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Class 1, 1/25: Course Overview & Introduction to Organizational Change
Class Lecture Slides 01
managerial innovation
Exploitive authoritative systems
Benevolent authoritative systems
Consultative systems
Participative group systems
Blake and Mouton's Grid OD: an individual's style can be described according to his concern for production and concern for people. (Note: concern for production includes productive tasks, developing ideas – not limited to things; also includes people). There are 81 possible leadership styles ranging from 1,1 to 9,9. A 1,9 manager has a low concern for production and a high concern for people. A 9,9 style is the most effective
How to facilitate, lead, and manage change:
– change can be self-initiated
– change can be forced upon us
– change can bring threats
– change can lead to opportunities
Organizational Development Defined:
- OD is a planned process of change in an organization's culture through the utilization of behavioral science technology, research, and theory (Burke).
- OD refers to a long-range effort to improve an org's problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants (French).
- OD is an effort planned, organization-wide, and managed from the top, to increase organization's effectiveness and health through planned interventions in the org's "processes," using behavioral science knowledge (Beckhard).
- OD is a systems-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at: enhancing congruence between org structure, process, strategy, people, and culture; developing new and creative org solutions; and developing the org's self-renewing capacity. It occurs through collaboration of org members working with a change agent using behavioral science theory, research, and technology (Beers).
- OD is a systemwide application and transfer of behavioral science knowledge to the planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to org effectiveness.
Five Systems of OD Practice:
– Laboratory Training (1950s-now)
– Action Research/Survey Feedback (1950s-now)
– Normative Approaches (1960s-now)
– Quality of Work Life (1970s-now)
– Strategic Change (1980s-now)
Open Systems Model: org's exist in an environment with the other companies around it. instead of closed system which is Taylor's view – an org is where it's address is, in a vacuum.
Open Systems Model Diagram looks like this… Org's have inputs (environment, resources, history) which shapes its strategy. Which leads to
Assumptions about Org's:
– Orgs are dynamic entities
– Behavior occurs at multiple levels for multiple reasons
– Orgs are open systems (a set of interrelated components that conduct transactions with a larger environment)
Lewin's Change Model:
Unfreezing -> Movement -> Refreezing
(start, stop, start, stop fashion). Change happens when having a snapshot. This is the most common view of change. Challenge of it is that this process isn't that simple. Argue that "unfreezing" is really a process of multiple small changes
Action Research Model: with a feedback loop. You see a problem and gather data, then you make a joint diagnosis with the client to determine the course of action. Repeat and repeat to get it right.
Positive Model: Initiate the inquiry, then inquire into best practices, discover themes, envision a preferred future then design and deliver ways to create the future. Keep the loop going back to inquiring about the best practices
Planned Change Models:
– enter into a contract
– diagnosis
– planning and implementing change
– evaluating and instituting change
The Water of Ayole
– have to get into the fabric of the organization to make change stick
– can't tell someone what to do
– change creates other changes
Final notes:
– change is not a one-shot deal
– people may want to change but there are systemic factors that prevent them from changing
– Orgs are stubborn: managers have strong beliefs that are difficult to change
Guinea Worm Update
OD: a process that applies a broad range of behavioral science knowledge and practices to help orgs achieve greater effectiveness
OD applies changes in the strategy. It is based on application. Managing planned change. Design, implementation, and subsequent reinforcement of change.
Oriented to improving org effectiveness, which is measured in three dimensions: adaptability, high financial and technical performance, and satisfied and loyal customers/shareholders.
OD is dif from change management in the underlying value orientation. Behavioral science plays a predominant role. OD is more narrowly focused too.
Changes: globalization, information technology, managerial innovation
History of OD:
(1) Kurt Lewin (1946) of MIT held laboratory training. They learned: (1) feedback and group interaction was a rich learning experience; (2) "group building" had potential to work in back home situations.
(2) Kurt Lewin, John Collier, and William Whyte did action research. This is where Rensis Likert created Likert scale.
(3) Normative background led to Blake and Mouton's Grid: an individual's style can be described according to his concern for production and concern for people. (Note: concern for production includes productive tasks, developing ideas – not limited to things; also includes people). There are 81 possible leadership styles ranging from 1,1 to 9,9. A 1,9 manager has a low concern for production and a high concern for people. A 9,9 style is the most effective.
– Exploitive authoritative systems
– Benevolent authoritative systems
– Consultative systems
– Participative group systems
The two foremost barriers to excellence: planning and communication
Class 2, 2/1: The Role of the Consultant & Entering/Contracting Strategies
Class Lecture Slides 02
The OD Practitioner
– Internal or external
– other professionals may apply OD practices
– managers and admin apply OD daily, whether they are aware or not
Competencies of an OD Practitioner:
– Intrapersonal skills (need self-awareness)
– Interpersonal skills (ability to work with others and groups)
– General consultation skills (can manage the process)
– Organization development theory (knowledge of the change process)
Primary function is to build trust and confidence
Role Demands on OD Practitioner:
– Position (internal vs. external)
– Marginality (ability to straddle boundaries)
– Functional demands (emotional intelligence)
– Use of knowledge and expertise
Schein, 1990:
Three Models of Helping:
– Provide expert information
– Playing doctor
– Process consultation
Ethics – Professional Guidelines:
– Find out what resources you can use in your analysis? What info is off limits?
– Confidentiality: what info is confidential?
– Informed consent: participation should be voluntary and should not have adverse consequences.
Ethical dilemmas:
– misrepresentation
– misuse of data
– coercion
– value and goal conflicts
– technical ineptness
The Entering Process:
– Determining the relevant client (where is the target of change?)
– Clarifying the organizational issues (presenting a problem, symptoms)
– Selecting a consultant
Determining the relevant client:
– Those who will impact change
– Those who will resist change
– Who is needed to be a part of the change
– Note: these may not be the people you think at the onset of the project
Elements of an Effective Proposal:
– Goals: descriptive, clear, concise
– Recommended Action Plan: description of 1) diagnosis, 2) data analysis process, 3) feedback process, 4) action-planning process
– Specification of Responsibilities: what will each party be held accountable for?
– Strategy for Achieving the Desired State: provide change strategies (education/training, political influence, structural interventions, and confrontation of resistance)
– Fees, terms, and conditions
Develop a contract:
– Establishes phases of the project (can be formal or informal)
– Establishes the expectations of the client (ground rules, confidentiality, deliverable deadlines, who the team will have access to)
– May be verbal or written, but must be mutually agreed upon
Elements of an effective contract:
– Mutual expectations are clear (outcomes and deliverables, publishing cases and results, involvement of stakeholders)
– Time and resources (access to clients, managers, members, and info)
– Ground rules (confidentiality)
Outline of a contract:
– Statement of the problem
– Expected process of the diagnosis
– Expected outcome from the diagnosis
– Roles, expectations, resources, ethics
– Time-line/Gant chart
Class 3, 2/8: Diagnosing Organizations
Class Lecture Slides 03
Open Systems model is hard to prove, as one thing is dependent upon another is dependent upon another, so difficult/impossible to test empirically. Have to look at top down and bottom up.
General Model of Planned Change:
- Entering and Contracting
- Diagnosing
- Planning and Implementing Change
- Evaluating and Institutionalizing Change
People Pulse is the HR term for ESM
The model of planned change above is very simplistic. There is a lot of unknown that comes from change.
Data Collection and Feedback Cycle:
- Collecting Data
- Analyzing Data
- Feeding Back Data
- Follow-up
Diagnosis is a collaborative process between organizational members and the OD consultant to collect pertinent information, analyze it, and draw conclusions for action planning and intervention.
Successful diagnosis depends on…
- Your ability to collect appropriate information/to understand what is really happening in the organization
- Your ability to facilitate organizational action
- Your ability to direct energy toward org problem solving
When giving an effective diagnosis, you should choose the right data/information to pay attention to. Is it relevant/meaningful? It is understandable/easy to interpret? Is it consistent/are there patterns? Is it descriptive/can you link to examples? Is it verifiable/is the data valid and accurate? Is it timely/current data? Is it comparative – what is similar/different from other successful firms?
Whenever you can show the gap between where people are and where they want to be, it is very motivating. Show comparative numbers – get a benchmark. You want to be the Ikea of furniture? Well, they're moving 2000 units per day, you're moving 200. Gap!
The Open Systems Model – it is in an environment and there is constant feedback. IPO Model – Input, Process, Output. Inputs (information, energy, people) – Process/Transformations (social component, technological component). Outputs (goods, services, ideas).
Properties of Systems:
- Inputs, Transformations, and Outputs
- Boundaries (departmental, company, legal, international)
- Feedback
- Equifinality (more than one way to skin a cat)
- Alignment
Transactional Cost Economics – how can we tell where one company ends and another begins?
Competitive Advantage comes from alignment of internal components.
The key to effective diagnosis is to know what to look for at each organizational level and to recognize how the levels affect each other.
Inputs (general environment, industry structure) – Design Components (technology, strategy, structure, HR systems, measurement systems: all lead to culture) – Outputs (org effectiveness)
To understand environment, need to know how dense the market is.
Strategy – is your strategy to be Innovative, cost-cutting, quality, and one other thing…
The strategy (in the design components) directly impacts the outcome (whether the org is effective).
In alignment, make sure the design components fit with the inputs. Are they internally consistent? Do they fit and mutually support each other?
Organizational Environments and Inputs…
Environmental Types:
- General Environment
- Task Environment and Industry Structure
- Rate of Change and Complexity
- Enacted Environment (perceived environment)
Environmental Dimensions
- Information Uncertainty
- Resource Dependency (number of potential suppliers determines how dependent one is)
Strategy: the way an organization uses its resources (human, economic, or technical) to gain and sustain a competitive advantage.
Technology: the way an organization converts inputs into products and services.
Structure: how attention and resources are focused on task accomplishment.
Organizational Design Components
— Human Resource Systems: the mechanism for selecting, developing, appraising, and rewarding org members
— Measurement Systems: methods of gathering, assessing, and disseminating information on all the activities of groups and individuals in organizations.
— Culture: the set of shared beliefs, expectations, value, and norms that shape attitudes and behavior in organizations. It emerges from the shared history of a stable social group. Varies in strength and intensity. It is essentially the "right" way to behave, think, or feel.
Functions that Culture Serves:
- Sense making (enables people to understand decisions and goals)
- Social glue (provides a basis for promoting similarities among people creating common bonds)
- Organizational identity (highlights org characteristics that distinguish it from others)
- Facilitates commitment (creates a place where people want to stay and contribute)
- Control mechanism (provides guidelines about appropriate and inappropriate behaviors)
Basic assumptions (what you take for granted/preconscious) -> what you are told -> what you observe. Assumptions are most visible when challenged (about reality, time, space, human nature, relationships) lead to values that you're told about leads to what you observe (artifacts, objects with cultural meaning, ceremonies, rites, stories, language and symbols; difficult to interpret without other levels)
Outputs: Org Performance (profits, profitability, stock price), Productivity (cost/employee, cost/unit, error rates, quality); Stakeholder Satisfaction (market share, employee satisfaction, regulation compliance)
Alignment: diagnosis involves understanding each of the parts in the model and then assessing how the elements of the strategic orientation align with each other and with the inputs. Org effectiveness is likely to be high when there is good alignment.
Inputs (organizational design) – Design Components (goal clarity, task structure, group functioning, group composition, performance norms) – Outputs (group effectiveness)
Goal Clarity: extent to which group understands its objectives
Task Structure: the way the group's work is designed
Team Functioning: the quality of group dynamics among members
Group Composition: the characteristics of group members
Performance Norms: the unwritten rules that govern behavior
Hackman's Model for Group Process: Is the group learning? Did they produce? Are the individual members thriving and flourishing?
Inputs (organizational design, group design, personal traits) – Design Components (skill variety, task identity, autonomy, task significance, feedback about results) – Outputs (individual effectiveness)
Meaningfulness of work has three components: skill variety, task identity, task significance.
Skill Variety: the range of activities and abilities required for task completion
Task Identity: the ability to see the whole piece of work
Task Significance: the impact of work on others
Autonomy: the amount of freedom and discretion
Feedback and Results: Knowledge of task performance outcomes
Quick Review for Diagnosis:
– Who is the OD Practitioner?
– Why is the practitioner here?
– Who does the practitioner work for?
– What does the practitioner want and why?
– How will my confidentiality be protected?
– Who will have access to the data?
– Can the practitioner be trusted?
Data Collection Feedback Cycle: Planning to Collect Data -> Collecting Data -> Analyzing Data -> Feeding Back Data -> Following Up
Sampling – population vs. sample; importance of sample size; process of sampling; types of samples (random, convenience)
Advantages of Questionnaires: responses can be quantified and summarized; large samples and large quantities of data; relatively inexpensive
Problems with Questionnaires: little opportunity for empathy with subjects; predetermined questions; over interpretation of data is possible; response bias possible
Advantages of Interviews: adaptive; "rich" data; empathic; builds rapport
Problems with Interviews: relatively inexpensive; bias in interviewer responses; coding and interpretation can be difficult; self-report bias possible
Types of Questions
– Experience and behavior questions
– Opinion and value questions
– Feeling questions
– Knowledge questions
– Background/demographic questions
Examples of Acceptable Questions
– Descriptive/Linear questions: Please tell me what you do in your job?
– Narrative questions: Can you please tell me how you came to get the job?
– Structural questions: So what are all the stages involved in the process of making different kinds of coffee?
– Contrast questions: What are the main differences that distinguish a good day at work from a bad day at work?
– Evaluative questions: How do you feel after a bad day at work?
– Systematic questions: Circular -> What do you think your supervisor thinks about how you do your job? Comparative -> How do you think your life would be different if you worked somewhere else, like at CBTL or Starbucks?
– Prompts and probes: Can you tell me more about that? What do you mean by fast-paced?
Advantages of Observations: collects data on actual behavior rather than just reports of data; real time, not retrospective; adaptive
Problems with Observations: coding and interpretation difficulties; sampling inconsistencies; observer bias and questionable reliability; cost can be expensive
Advantages of Unobtrusive Measures: non-reactive, no response bias; high face validity; easily quantified
Problems with Unobtrusive Measures: access and retrieval difficulties; validity concerns; coding and interpretation difficulties
Analysis Techniques
Qualitative Tools: Content Analysis; Force-field Analysis
Quantitative Tools: Descriptive Statistics; Measures of Association (eg correlation); Difference Tests
Class 4, 2/15: Mechanistic/Bureaucratic
Class Lecture Slides 04
Mechanical View of Orgs
- Fredrick the Great of Prussia (1740-1786) inherited an army and introduced ranks, uniforms, common language, training and drills.
- Adam Smith (19th Century) Division of Labor
- Max Weber (19th Century) observed parallels between the mechanization of industry and bureaucratic forms of organization.
Classic Management Perspectives: Fayol, Mooney, and Urwick – management is a process of planning, organization, command, management techniques, and other means for stressing rational planning and control.
Scientific Management: Frederick Taylor (1915), and engineer by training, realized workers were not working their machines or themselves as hard as they could.
Principles of Scientific Management:
- Shift all responsibility for the organization of the work from the worker to the manager (split the brain and the hands)
- Use scientific methods to determine the efficient way to work
- Select the best person to perform the job
- Train the worker to work efficiently
- Monitor worker performance to achieve desired performance
Organizational Structure: defines how job tasks are formally divided, grouped, and coordinated.
Work Specialization (division of labor): describes the degree to which activities in the org are subdivided into separate jobs. Benefits: greater efficiency, lower costs. Costs: human costs when carried too far; job enlargement as a solution.
Departmentalization: basis by which jobs are grouped together so that common tasks can be coordinated. (similar to work specialization, but think functions – accounting, HR, etc). Common bases: functional, departments, geography, process, customer.
Chain of Command: unbroken line of authority that extends from the top of the org to the lowest echelon and clarifies who reports to whom. This is the height of the org chart.
Span of Control: the number of employees a manager is expected to effectively and efficiently direct. Determines the number of levels and managers an or has. Trend is toward wider spans of control; wider span depends on knowledgeable employees; affects the speed of communication and decision making. This is the width of the org chart.
Centralization and Decentralization: the degree to which decision making is concentrated at a single point in the org is centralization. Only includes formal authority; highly centralized when top managers make all the decisions; decentralized when front line employees and supervisors make decisions; trend is toward increased decentralization.
Formalization: degree to which jobs within the organization are standardized. Formal = minimum discretion over what is to be done, when it is done, and how; Informal = freedom to act is necessary.
Common Organizational Designs
Simple Structure: difficult to maintain this design in anything other than small orgs; low degree of departmentalization; wide span of control; authority centralized in a single person; little formalization.
Bureaucracy: highly routine operating tasks achieved through specialization. Formal rules and regulations; centralized authority; narrow spans of control; tasks grouped by functional departments; decision making follows the chain of command.
Matrix Structure: combines two forms of departmentalization (ie: functional and product); dual chain of command; advantages: facilitates coordination and efficiency; disadvantages: possible confusion, fosters power struggles and stress.
The Mechanistic Model: high specialization, rigid departmentalization, clear chain of command, narrow spans of control, centralization, high formalization.
The Organic Model: cross-functional teams, cross-hierarchical teams, free flow of information, wide spans of control, decentralization, low formalization.
Comparing Organic and Mechanistic
Organic: employees contribute to the common task of the org; tasks are adjusted and redefined through employee interactions; there is less hierarchy of authority and control and there are few rules; knowledge and control of tasks are located anywhere in the org; communication is horizontal.
Mechanistic: tasks are broken down into specialized, separate parts; tasks are rigidly defined; strict authority and control and there are many rules; knowledge and control are centralized at the top of the organization; communication is vertical.
Mechanistic approach is most appropriate when precision, safety, and accountability are at a premium. Ex: surgical wards, aircraft maintenance, or finance offices. This approach works best when there is a straightforward task to perform, when the environment is stable enough to ensure the products produced will be appropriate ones, when one wishes to produce the same product time and time again, when precision is at a premium, when the human machine parts are compliant and behave as intended. Weaknesses: difficulty adapting to change, employees unlikely to take initiative, people justify mistakes by saying they are "obeying orders," lack of pride can emerge because people aren't feeling empowered, competition can arise from the division of labor, employees lose opportunities for growth.
Top-Down Change: this is not simply the CEO, it is a management team making a push to change. The nature of today's work environment (ie: need for speed, shifts in corporate culture) require fundamental shifts that need to come from the top. Pushes people toward chance, cuts across intra-org boundaries, and requires buy-in from all levels. People at the lower levels don't have the perspective, resources, or power to make system-wide changes. Leaders still have control over rewards and process. Advantages: from the view of the top, they can see all aspects, not just the view of a single department; process visible and formal authority should be a natural point of projections.
Bottom Up Change: has to pull or attract people to change, starts with a champion who is passionate about the cause, lets ideas and suggestions come from below. More perspectives could be considered, resulting in innovative alternatives.
Major Strategic Decisions for Rewarding Employees
- What to pay employees
- How to pay individual employees
- What benefits to offer
- How to construct employee recognition programs
What to Pay: Need to establish a pay structure, balancing between internal equity (worth of the job to the org) and external equity (the external competitiveness of an org's pay relative to elsewhere in the industry). This is a strategic decision with trade-offs.
How to Pay: Variable-Pay programs –
- piece-rate pay (workers are paid a fixed sum for each unit of production completed)
- merit-based pay (pay based on individual performance appraisal ratings)
- bonuses (rewards employees for recent performance)
- skill-based pay (paid based on job title or rank; doesn't address the level of performance)
- profit-sharing plans (org wide programs that distribute $$ based on established formula designed around profitability)
- gainsharing (compensation based on sharing of gains from improved productivity)
- employee stock ownership plans (ESOPs) (plans in which employees acquire stock, often at below-market prices)
Class 5, 2/22: Designing Interventions and Strategic Change
Class Lecture Slides 05
An intervention is a set of sequenced and planned actions or events intended to help the organization increase its effectiveness. They are designed to resolve specific problems and improve areas of org functioning.
Effective interventions are relevant to the needs of the organization. They contain valid information, free and informed choice, and internal commitment. Members should take ownership over the intervention and be responsible for implementation.
Assessing Change:
– Readiness for change (sensitivity to change, dissatisfaction with the status quo, crisis that creates urgency)
– Resistance to change (potential losses from change?)
– Urgency of change (how quickly is it needed?)
– Magnitude of change (how major of a change is required?)
Two approaches to change: cognitive (evaluative) and affective (emotional).
In cognitive, there is both the individual and collective. People will be ready for change if there's a discrepancy and they believe change is needed. They also need to believe that change is appropriate. Also need to believe in efficacy – that there is a capability to implement the change initiative. Finally, they need principal support – a belief that the org will provide support for the change.
We know more about cognitive responses to change than affective. Affective is the emotional inclination to accept, embrace, and adopt a particular plan to purposefully alter the status quo.
Change readiness: beliefs, attitudes, and intentions regarding the extent to which changes are needed and the org's capacity to successfully undertake those changes
Change readiness is a multi-level phenomenon. How are the levels related to one another?
Resistance to Change
- Lack of understanding
- Don't believe that the direction of change makes sense for the org
- Lack of trust in top management
- The feeling of urgency that change is necessary is not strong
- Low tolerance for change
- Desire to lose the "way things are now"
Dealing with Resistance to Change:
- Education and Communication: where there is a lack of accurate information
- Participation and Involvement: when initiators need more information and there is resistance
- Facilitation and Support: challenges with adjustment
- Negotiation and Agreement: when one group may lose out in the change and may resist
- Manipulation and Co-optation: when other options don't work or cost too much
- Explicit and Implicit Coercion: when speed is needed and initiators have a lot of power
When should you use each strategy?
When you need fast change, it should be clearly planned, needs little involvement from others, and attempts to overcome the resistance.
Slower change is not clearly planned at the beginning, needs lots of involvement from others, and attempts to minimize resistance.
Fast Change (on the left) ——————————— Slower Change (on the right)
Situational Factors That Cannot Be Ignored:
- The position of the initiator vis a vis the resisters, especially with regards to power (stronger the initiator's position, more one can more to the left
- The amount and kind of resistance (greater the resistance, move to right)
- The person who has the relevant data for designing the change and the energy for implementing it (if info needed, more one moves to the right)
- The stakes involved (greater urgency, the more one moves to the left)
From a worker's perspective – front line employees tend to be cynical about change. Many believe that management is lying to them. They don't trust that senior management is concerned about the interests of the employees. However, many workers feel an affinity to their immediate supervisor.
Mistakes made when communicating interventions:
– Not communicating
– Communicating values (we're a family company, but then people get laid off)
– Communicating using big meetings, videos, publications
Change should be communicated:
– Involve frontline supervisors
– Communicate facts
– Communicate face to face
– Through front line supervisors in small groups
Intervention Targets:
Human Process Interventions: what systems can make the organization go?
– Process consultation and team building
– Third-party interventions (conflict resolution)
– Organization confrontation meeting
– Intergroup relationships
– Large-group interventions
Technostructural Interventions: how to divide and coordinate work?
– Structural design
– Downsizing
– Reengineering
– Parallel structures
– High involvement organizations
– Top quality management
– Work design
Human Resources Management Interventions: how to attract, select, and retain talent?
– Goal setting
– Performance appraisal
– Reward systems
– Coaching and mentoring
– Career planning and development
– Management and leadership
– Managing work force diversity
– Employee wellness programs
Strategic Interventions: how will they compete and with who?
– Transformational Change (integrated strategic change, organization design, culture change)
– Continuous Change (mergers & acquisitions, alliances & networks)
– Transorganizational Change (self-designing orgs, org learning and knowledge management, built to change orgs)
Organizational Design Model
Look at the strategic fit between organizational strategy and organizational design. The design fit includes: management & information systems, HR practices, structure, and work design.
Mechanistic and Organic Design
– Strategy: mechanistic design (cost minimization); organic design (innovation)
– Structure: mechanistic design (formal/hierarchical, functional); organic design (flat, lean, and flexible; matrix, process, and network)
– Work design: mechanistic design (traditional jobs, traditional work groups); organic design (enriched jobs, self-managed teams)
– HR Practices: mechanistic design (selection to fit job, up-front training, standard reward mix, pay for performance and individual merit, job-based pay); organic design (selection to fit org, continuous training and development, individual choice rewards, pay for performance and business success, skill-based pay)
– Management and Information Systems: mechanistic design (command and control; closed, exclusive, centralized information); organic design (employee involvement; open, inclusive, distributed information)
Organization Design Application Stages: (1) Clarify the Design Focus; (2) Designing the Org; (3) Implementing the Design
Culture Change Application Stages: (1) Establish a clear strategic vision; (2) Get top-management commitment; (3) Model culture change at the highest level; (4) Modify the org to support change; (5) Select and socialize newcomers; downsize deviants; (6) Develop ethical and legal sensitivity
7 S Framework: Everything is connected – Structure, Strategy, Skills, Staff, Style, Systems, Shared Values
Star Model: Strategy affects (1) People; (2) Rewards; (3) Management Processes; (4) Structure; (5) Work Process/Capabilities. This in turn shapes behavior which affects performance and culture
Looking at Southwest, there's a Cost-Reduction Strategy:
– Explicit job analysis, fixed and narrow job responsibilities
– Minimal risk taking activity
– Minimal recruitment and selection procedures
– Narrow career paths (expertise and efficiency)
– Minimal socialization, training, and development
– High concern for outputs and results
– Short-term, results-orientated, remedial appraisals
– Pay based on market equity
Quality Strategy
– Explicit job analysis, broad job responsibilities
– Explicit job descriptions
– Narrow career path (expertise and quality)
– Socialization, continuous, and extensive training
– High concern for process
– Medium to long-term, appraisal of behavior and results
– Mixed individual and group evaluation criteria, employee participation
– Pay based on internal equity, emphasis on job security
Innovation Strategy
– Less explicit job analysis, broad responsibilities
– Less explicit job descriptions
– Broad career paths
– High creativity and high risk taking activity
– Minimal socialization, training will vary
– Developmental, long-term appraisals
– Mixed individual and group evaluation criteria
– Pay based on internal quality, but perks and incentives are given
7s Framework:
– Strategy: How will they create unique value? What are sources of non-imitable competitive advantage?
– Structure: How are tasks and people specialized and divided? Use of teams?
– Systems: What formal processes are used to manage the organization?
– Staffing: Who is hired, selected, retained?
– Skills: What are the unique competencies of employees, systems, management, technology?
– Style: What is the leadership style of top management? Does it breed trust?
– Shared Values: What values are held in common and provide a sense of purpose?
Lessons from using the 7s Framework: (1) Change agents make choices focused on these 7 key aspects of organizations; (2) Each is linked to one another and neglecting one can reduce the successfulness of the change strategy; (3) Imitation is often a challenge because not all of the 7s' can be imitated to get the "right" combination
Dimensions of Relational Coordination:
– Frequent and timely communication
– Problem-solving
– Helping
– Shared goals
– Shared knowledge
– Mutual respect
Environment shapes orgs. Strategy shapes environment. Strategy shapes org.
Class 6, 2/29: Human Relations
Class Lecture Slides 06
Employee Involvement (EI) seeks to increase members' input into decision that affect organization performance and employee well-being. It is the broad term for diverse approaches to gain greater participation in relevant workplace decisions.
EI Can Change:
- Power: extent to which influence and authority are pushed down into the organization
- Information: extent to which relevant information is shared with members
- Knowledge and skills: extent to which members have relevant skills and knowledge and opportunities to gain them
- Rewards: extent to which opportunities for internal and external rewards are tied to effectiveness
IPO Model with EI and Productivity: Employee Involvement Intervention -> leads to -> Improved Communication and Coordination; Improved Motivation; Improved Capabilities -> leads to -> Improved Productivity.
—Note: as psychologists we are looking at the underlying mechanism driving the outcome (the P)
Looking at a country like Thailand (high power distance, collectivistic), the model may not apply
Secondary Effects of EI on Productivity. An EI intervention lead to greater productivity in that it leads to well-being and satisfaction which leads to attraction and retention which also leads to productivity.
Job Characteristics Theory
High Involvement Organization Features:
– Flat, lean organizational structures
– Enriched work designs
– Open information systems
– Sophisticated selection and career systems
– Extensive training programs
– Advanced rewards systems
– Participatively designed personnel practices
– Conducive physical layouts
Approaches to Work Design
I. Engineering: Traditional Jobs and Groups
– High specification and routinization
– Low task variety and autonomy
II. Motivational: Enriched Jobs
– High task variety and autonomy
– Feedback of results
III. Sociotechnical: Self-Managing Teams
– Control over total task
– Multi-skilled, flexible, and self-regulation
I. Designing Work for Technical and Personal. Must look at Technical Factors and Personal Need Factors.
Technical factors include: (1) Technical Interdependence: the extent to which cooperation among workers is required. (2) Technical Uncertainty: the amount of information processing and decision making among workers necessary to do the work.
Personal need factors include: (1) Social needs: the desire for significant social relationships. (2) Growth needs: the desire for personal accomplishment, learning, and development.
II. Enriched Jobs: the core job characteristics are Skill Variety, Task Identity, and Task Significance (I) leading to critical psychological state of Experienced Meaningfulness of the Work (P). In this same way, Autonomy (I) leads to Experienced Responsibility (P). Also Feedback (I) from work leads to Knowledge of Actual Results (P). All of these P items lead to Outcomes (O) of High Internal Work Motivation, High Growth Satisfaction, High Job Satisfaction, and High Work Effectiveness.
— Note: there are moderators impacting the P of this model, such as stage of career, age, gender, etc.
III. Self-Regulating Work Groups: The community of practice is there to develop members' capabilities and to build and exchange knowledge. The members who select themselves are involved and it's held together by passion, commitment, and identification with the group's expertise. It lasts as long as there is an interest in maintaining the group. The formal work group is there to deliver a product or service and everyone reports to the group's manager. The group is held together via job requirements and common goals and is in place until the next reorg. A project team is there to accomplish a specified task and the employees are assigned by a senior manager. The group is held together by the project's milestones and goals and is in place until the project is created. The informal network is there to collect or pass on business information, made up of friends and business acquaintances. It's held together by mutual needs and is in place as long as people have a reason to connect.
To start and sustain a community of practice, one should (1) identify potential communities of practice that will enhance the company's strategic abilities (identify the domain of expertise); (2) Provide the infrastructure that will support such communities and enable them to apply their expertise effectively. (IT systems, official sponsors or support teams, rewards); (3) Use non-traditional ways to assess the value of the company's communities of practice (collect stories).
IDEO: enlightened trial and error succeeds over the lone genius. Innovated a shopping cart. They began by discussing facets: safety (22,000 hospitalized per year). Then went to the field and interviewed users (many with kids, watched behaviors – like people don't let go of the cart, asked the guy who picks up the carts – they've been clocked going 35 mph). Then they put all ideas on a wall and vote with colored post-its.
Conditions that support change from the bottom:
- When the task is complex and requires insight from org members
- When the environment is dynamic and changes to products and services are needed
- When quality and innovation is at a premium
- When org members are mindful and engage in constant adaptation
Some weaknesses of approaching change from the bottom up:
- When human capital is lost, performance can decline
- Participation by uninformed, unskilled, and unmotivated workers does not enhance org change
- It requires an investment of money and time to encourage participation and empowerment
- Rhetoric about empowered participation without action breeds cynicism and conformity
- Change depends on top management's willingness to build the skills and knowledge of org members
Ralph Strayer's Guide to Improving Performance:
- People want to be great. If they aren't, it's because management won't let them be.
- Performance begins with each individual's expectation. Influence what people expect and you influence how people perform.
- Expectations are driven partly by goals, vision, symbols, semantics, and partly by the context in which people work, that is, by things as compensation systems, production practices, and decision-making structures.
- The actions of managers shape expectations.
- Learning is a process, not a goal. Each new insight creates a new layer of potential insights.
- The organization's results reflect me and my performance.
To make the degree of delegation work, there needs to be:
– Clear objectives
– A willingness of the boss to give up authority and direct exercise of power
– Willingness of the people in the org to buy-in
– Very good information and control systems so that individual activities can be measured
– Staff and managers that see themselves in supportive roles
– Great clarity in procedures
– Congruent incentives
– Skill, expertise down the line
– Trust in the leader
Class 7, 3/7: Leading Change – Creating a Vision and Establishing Urgency
Class Lecture Slides 07
Change as a transition state:
Current State -> Transition State -> Desired Future State
Must think about context in change.
Change Context -> Implementation Strategy -> Change Outcomes
Think of context of change in two ways: (1) Reactive Change: closing a performance gap (what is and what should be). (2) Proactive Change: closing an opportunity gap (what is and what could be)
Three Org Change Phases:
- Mobilization phase: make the case for change and build the org capacity for change
- Movement phase: build momentum, preserve and continue to build org capacity for change
- Sustain phase: institutionalize change initiative
To make the case for change:
– Benchmarking (comparing to others)
– Show opportunities for growth
– Basically, want to create discomfort in current situation to encourage change
Kotter's 8 Steps:
- Establish a sense of urgency
- Formatting a powerful guiding coalition
- Creating vision
- Communicating a vision
- Empowering others to act on the vision
- Planning for and creating short-term wins
- Consolidating improvements and producing still more change
- Institutionalizing new approaches
Mobilization (Unfreeze) -> Movement (Change) -> Sustain (Refreeze)
Effective Change Management:
– Motivating Change
– Creating Vision
– Mobilizing Commitment
– Managing the Transition
– Sustaining Momentum
Barriers to Motivating Change:
– Direct Costs
– Saving Face
– Fear of the Unknown
– Breaking Routines
– Incongruent Systems
– Incongruent Team Dynamics
Creating a Vision: First, discover and describe the org's core ideology. What are the core values that inform members what is important in the org? What is the org's core purpose or reason for being? Second, construct the envisioned future. What are the bold and valued outcomes? What is the desired future state?
What makes a good vision? Must be desirable, feasible, relevant, and communicable. To be desirable, must satisfy stakeholders and inspire employees. To be feasible, there must be an opportunity for short term wins and a realistic stretch. To be relevant, it must be contextually sensitive. To be communicable, it must be clear, concise, and understandable.
What makes visions fail?
– Failing to focus
– Sitting out the dance
– Skipping the skill building
– Mismatching message and metrics
– Clashing powers
– Neglecting the talent pipeline
Phases to Enabling a Vision
- Framing the agenda: frame the org's challenges as compelling stories that created urgency for action
- Engaging the org: distribute "ownership" broadly
- Building mission-critical capabilities: develop necessary capabilities
- Connecting the dots by creating alignment: align systems, mind-sets, messages
- Energizing the org through power of the people: make a link between talent requirements and competitive capability requirements. Keep people energized
Rhetorical Crafting: a leader's ability to use symbolic language to give emotional power to his or her message. Examples: metaphors, analogies, stories, speech (repetition, rhythm, balance, alliteration), and language (make language fit the audience)
Transactional Leader: uses a carrot and a stick
Transformational Leader: inspires
Stretch Goals: BHAG (big, hairy audacious goals) is a part of envisioning the future. Is clearly articulated and is reachable within 10-30 years. Can be qualitative or quantitative. David vs. Goliath thinking. Be like an iconic role model. Internal transformation.
With managing the transition, need Activity Planning which is the roadmap for change. Need Commitment Planning which determines whose support is needed, where they stand, and how to influence their behavior. Need Change-Management Structures which is knowing the appropriate arrangement of people and power to drive the change.
When developing political support: assess change agent power, identify key stakeholders, and influence stakeholders. Need to know the social network.
Sources of power and power strategies for change agents
– (individual source of power) Knowledge: (power strategy) playing it straight
– (individual source of power) Others' Support: (power strategy) using social networks
– (individual source of power) Personality: (power strategy) getting around the formal system
Sustaining Momentum: provide resources for change; build a support system for change agents; develop new competencies and skills; reinforce new behaviors; stay the course
Sustainability: meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Three Pillars of Sustainability
- Economic sustainability: a company cannot survive if expenditure exceeds income
- Social sustainability: embodies the humanitarian context of business and related to issues of poverty, income inequality, and disease
- Environmental sustainability: considers impact of business on the quality and quantity of natural resources, the environment, global warming, ecological concerns, waste management, reductions in energy, alternative energy production and improved pollution and emissions management
Learning about Sustainability:
1. Codes of Conduct: minimum acceptable standards in corporate processes and procedures
2. Impact Measures: calculating not only financial standards, but social and environmental impact
3. Structures and Policies: designing company structures and policies that embody the principles of economic, social, and environmental sustainability (e.g. corporate governance or decision making
4. Purchasing and Supply Chain Innovations: dialogue about sustainability in the supply chain, along with human rights practices that foster well-being
5. Communications and Dialogue: means to communicate the importance of sustainability internally across the org and externally to stakeholders
6. Employee Training and Dialogue (should be ongoing): train and teach methods of sustainability
Four Articles Highlighting the Process of Institutionalizing Sustainability…
Marvis & Googins (2006): see the primary phase as elementary, engaged, innovative, integrative, and transformative. The persistence indicators: citizen concept, strategic intent, leadership, structure, issues management, stakeholder relations, transparency. The drivers of change: challenges, credibility, capacity, coherence, and commitment.
Werbach (2008): see the primary phase as blind, aware, compliant, then transparent. The persistence indicator: role of media transparency. The driver of change: strategic implementation.
Zadek (2004): see the primary phase as defensive, compliant, managerial, strategic, civil, then maturity pers. The persistence indicator: maturity of perspective. The drivers of change: market forces and org learning.
Goodman & Dean (1982): see the primary phase as n/a. The persistence indicators: knowledge, performance, preference, normative & value, and consensus. The drivers of change: congruence, socialization, rewards, diffusion, and sensing & calibrating.
When do you know that sustainability is institutionalized?
1. Codes of Conduct
2. Impact Measures
3. Structures and Policies
4. Purchasing and Supply Chain Initiatives
5. Communications and Dialogue
6. Employee Training and Dialogue (should be ongoing)
OD Midterm Review
Class 9, 3/28: Human Processes
Class Lecture Slides 09
Toxicity in Organizations
– Pain can be caused at work from a variety of sources: abusive bosses, budget pressures, or unexpected traumas
– Although emotional pain is inevitable at work, the aim is to make sure that it does not become or stay toxic
– The challenge is to help leaders create workplaces that are positive and healthy
– Sometimes pain can be a force for change that can lead to improving the quality of life and boost performance
Process Consultation: the creation of a relationship that permits the client to perceive, understand, and act on the process events. It is an approach that helps people and groups help themselves.
Factors facilitating toxic work environments:
– Radical change
– Fear
– Competition over scarce resources
– Personality differences
– Fear of losing a job
– Certain peaks during the year: finals, industry deadlines
Outcomes from Toxicity:
– Turnover
– Absenteeism
– Physical illness
– Reduced commitment and effort
– Contagion
Core Assumption: Toxicity is inevitable. (90% see incivility as a worsening problem. 50% of 327 front line workers indicate mistreatment in the last 3 years. 1/3 or more than 600 nurses experienced verbal abuse in the previous 5 days of work. All leaders, good and bad, create toxins. The good ones know how to support toxic handlers.)
Toxicity is handled through: (1) a toxic handler (another person who serves as a buffer to the toxicity); (2) directly dealing with the pain and toxicity at work.
Toxic Handlers:
- Help to carry the burden of what is caused by the toxic employee/situation
- Are empathetic to others who are suffering
- Help talented people to work past toxic pain/experiences to accomplish their work
- Serve as a translator between toxic bosses who deliver rude or disrespectful messages by reframing them for others
Individual Toxic Handler Interventions:
– Aimed at helping people better communicate with others
– Johari Windo
– Activities that focus on interpersonal conflicts within the org
– Interventions help involved parties interact with each other directly, facilitating diagnosis of the conflict and its resolution
Corrosive Connection: connections with others at work that are often characterized by low regard, disablement, or distrust
Challenges in dealing with corrosive connections:
– Pressures to deny or suppress
– Tendency to put blame on a person
– Instigator is clueless about the effects
– Limited resources for dealing with corrosivity, yet effects can be damaging
Typology of strategies to directly deal with corrosive connections:
- Bound and Buffer: create distance or interdependence (it doesn't alter the cause of the problem)
- Buttress and Strengthen: build the capacity to bear emotional weight of corrosive connections (watch out for health and emotional problems)
- Target and Transform: alter the root cause of corrosivity through a process (mediation, renegotiation) – this is the most work and the most risky strategy
Johari Window: a model where things not in front of the open window are known and unknown to self and others
Group Process Consultation and Interventions
Group Process Issues Addressed by Process Consultation:
– Communications
– The functional roles of group members
– Group problem solving and decision making
– Group norms
– Leadership and authority
Group process interventions: aimed at the process, content, or structure of the group
Major intergroup interventions: resolving intergroup conflict
Resolving Intergroup Conflict:
- Groups and consultant convene to address issues
- Groups are asked to address three questions: (1) What qualities/attributes best describe our group? (2) What qualities/attributes best describe their group? (3) How do we think the other group will describe us?
- Groups exchange and clarify answers
- Groups analyze the discrepancies and work to understand their contribution to the perceptions
- Groups discuss discrepancies and contributions
- Groups work to develop action plans on key areas
Group Decision Making:
– Define the problem
– Identify the criteria
– Weigh the criteria
– Generate solution alternatives
– Rate each alternative on each criterion
– Determine the optimal solution
Facilitating the condition for positive interaction…
– Team meetings are ideal settings for members to protect their claims to knowledge, to defend approaches, and to maintain their position of "power" in the org hierarchy.
– Aim to give equal "air time" to different parties represented in the team.
– Stop value judgments that members make of one another's suggestions immediately, facilitating a "safe" space to make knowledge contributions.
Prior to launching the first meeting…
– Carefully compose a team by meeting with individuals beforehand to understand their unique perspectives and objectives.
– Aim to create balanced representation and include "boundary spanners" to bridge groups.
– Identify smaller problem areas that link experts together to make goals clear and work manageable.
– Informal and formal leaders exist in every science team – discuss opportunities for shared leadership in order to make roles and responsibilities clear.
– Establish group norms early that foster effective team process.
Class 10, 4/4 Work Design & Technostructural Change Interventions
Class Lecture Slides 10
Class Lecture Slides 10 (most current)
Three Goals of Structure
- Efficiency: minimize costs, time, effort
- Coordination: coordinate diverse org tasks; ease info flow
- Adaptability/Flexibility: scan environment; change to meet environmental needs
Structural Design Dimensions of Orgs
Structural Differentiation: How are activities divided?
– Vertical differentiation (hierarchy of authority)
– Horizontal differentiation (specialization, e.g. product, process, function, geography)
– Complexity (number of activities or subsystems)
Integration: How are activities coordinated/linked?
– Centralization (hierarchical level of decision making)
– Span of control (number of products, processes, functions supervised)
– Formalization (amount of written documentation)
– Standardization (degree similar work is done in a uniform manner)
Issues of Differentiation of Subsystems
– Differences in time orientation (Ex: R&D can take years; Marketing new projects more frequently)
– Differences in objectives (Ex: data analytics want a movie that makes $$; creatives want expression)
– Differences in interpersonal orientation (Ex: business students dif personality than HR students)
– Differences in formal structure
Structural Integrating Mechanisms
Formalization: rules, policies, and procedures. More formalization coordinates by specifying roles and responsibilities or how different subunits will interact. Ex: job descriptions, operations manuals
Centralization: levels at which decisions are made. Centralized decision-making coordinates by concentrating decisions under one person. Ex: CEO has to sign for expenses over $1,000.
Spans of Control: number of subordinates or activities supervised. Larger spans of control are more integrating because responsibility is grouped under one person. Ex: Sales and marketing in the same sub-unit.
Standardization: standardized inputs, outputs, or processes. Increases predictability, reducing the need for coordination. Ex: TQM.
Co-location: different units are located in the same physical space. Physical co-location increases the likelihood of informal interaction.
Non-Structural Integrating Mechanisms
Liaison Roles: assign responsibility for inter-unit communication and coordination to specific people. Making someone directly accountable for coordination will ensure boundary-spanning interaction.
Teams: groups made up of people from multiple business units. Regular meetings btwn ppl from dif bus units increases communication and coordination. Ex: cross-functional product development team.
Culture: cultural propensity for sharing info, balanced power btwn sub-units. Unified culture can facilitate coordination across different business units. Ex: SW Airlines gate turnovers
Info Systems: who has access to the info? Increased access to info increases coordination through awareness of situations. Ex: Intranet knowledge bases.
Cross-training, Internal Job Mobility: employees have experiences in multiple business units. Experience in multiple jobs enables coordination through better understanding of other sub-unit's issues and personal contacts. Ex: management development programs.
Vertical Linkages: degree of vertical coordination and control required. Can be low capacity links like rules and plans or high, like adding new positions to the hierarchy)
Horizontal Linkages: degree of horizontal coordination and control required. Can be low costs of coordination, like direct contact or high, like adding new tasks forces or teams.
Org Design is Important Because…
– Resources are aligned or misaligned with strategy and priorities
– Coordination is efficient or inefficient – resource use is optimized or resources are wasted
– Performance capabilities are enabled or disabled – quality, speed, innovation, growth
– Work is hard or easy to do – people are frustrated or feel well-utilized
– Customer interfaces are effective or ineffective – high value is delivered or not
– Human capital is developed, motivated, and retained or stagnates, becomes cynical and departs
– Societies, communities, and ecologies are strengthened or depleted
Designing orgs is the process of purposefully configuring the elements of the org to foster the achievement of valued business, customer, and employee, community, and environmental outcomes.
Look at the design at all systems levels: business unit, team/work/work process unit, inter-unit, corporate/system wide, inter-organizational.
Orgs are designed to fit a context, not a recipe
Review of Star Model — strategy informs: people, work processes, structure, rewards, and management processes — which in turn informs behavior and leads to performance and culture.
So in terms of self-design and the star model, look at — laying the foundation (valuing, acquiring knowledge, diagnosing) to criteria to designing to implementation and assessment. It all loops back to strategy.
Hierarchical structure is necessary but insufficient in a dynamic and complex environment.
Image of a team-based org in the slide, showing the overlap
Common Aims of Internal Restructuring
Enhance flow of information and expertise across org boundaries to increase: learning, catching mistakes, innovation, efficiency, shared understanding, coordination
Implement the Internal Restructuring:
– Over-communicate honestly
– Align goals with the restructuring efforts
– Avoid the creation of bottle-necks that require certain people to be brokers
– Involve employees in the process and take their input into account
– Create a climate that supports speaking up in order to enhance the flow of info resources across org boundaries
Downsizing = Layoffs + Restructuring. More than 3 mil people laid off every year. It can happen even during prosperous times. When deciding who to keep, try to figure out which departments and people matter and protect them. Be ready to adjust work processes now that there are fewer people to accomplish the work. Be mindful of how it will affect customers and their expectations.
When announcing a downsizing, use it as a last resort. Be clear about short and long term goals. Communicate rationale and allow for Q&A. Involve senior management and let everyone know at the same time. Provide counseling at the location. Try not to make an announcement before the holidays or before the weekend.
When implementing the downsizing: (1) Over-communicate honestly. (2) Be fair (help victims find other jobs; senior management should share this burden; reduces likelihood of voluntary turnover). (3) Explain the selection process (focus on merit or future skill needs; fit this criterion with the vision for the future.
Involve employees. If you can't offer job security, provide ways to enhance employability. (Training and development; link incentives in order to motivate skill development.)
Surviving org downsizing – this depends a great deal on the way survivors respond. If they support he change initiative, downsizing is perceived to meet its objectives. If they feel that the downsizing has violated them and their work environment, workers will tend to work against the objectives of downsizing. There is survivor guilt, so help people understand. It will reduce voluntary turnover in the future.
Book Rec, from an employee's perspective: "Healing the Wounds (Noer, 2009)
Recs for Change SMA MEPD: increase integration by development product organization, communication, and decision-making systems. Communicate new project organization to division and R&D group, develop interpersonal competence, involve group relations through inter-group problem-solving meetings, more personal leadership.
SMA Lessons: structure should follow strategy; structure shapes interactions and accountability inside the org; linking mechanisms can compensate for mismatches, but only so far.
Class 11, 4/11: Organizational Lifecycle and Consulting
Class Lecture Slides 11
Partner Types: Mergers, Acquisitions, Joint Ventures
Partner Aims: To achieve the objectives of growth, diversification, economies of scale, synergy or a global presence
Barriers to Successful Partnerships: Geographic distance, language barriers, cultural differences
Historical Perspective
1960-1970s: Conglomerate type that involved partnering with an organization in an unrelated field. The focus was on financial and planning systems at the corp level with operations being conducted separately. The need for cultural integration was low.
1980-1990s: Greater number of partnerships between orgs in the same field of business activity or industry (ie: Time Warner & AOL). The need for cultural integration was high.
To get a successful partnership, prospect search and identify, do your due diligence, negotiations, transition management, view ops as an integrated unit.
M&A Lessons: No partnership of equals. Avoid arrogance. Change is inevitable, culture matters, two-way and open communication, view employees as assets, not liabilities, employee involvement, overestimate timing.
Notes from Dick Strayer's Slides
Life Cycle Analysis: A Systems Approach
Services Strayer Offers:
– Team Building (new teams, teams in conflict, matrix management, team restructuring, board development)
– Organizational Change Management (org change planning, strategic planning facilitation, org change road map)
– Acquisitions Integration (integration model, team consolidation, culture integration, acquisition integration)
– Executive Development (self-assessment, feedback, development plan, coaching)
Flamholtz: Organization Life Cycles
– New Venture
– Expansion
– Consolidation
– Professionalism
Stages of Organizational Evolution (Growing Pains: Transitioning from an entrepreneurship to a professionally managed firm by Eric Flamholtz): (1) Identify and define a market; (2) Develop products and services; (3) Acquire resources; (4) Develop operational systems; (5) Develop management systems; (6) Manage the corporate culture.
Start Up Life Cycles: Key Stages
Early Entrepreneurial Stage:
– Lots of grandiose vision/no real strategy
– No processes, systems, structure, little role delineation
– Founder Group dominance
Later Entrepreneurial Stage:
– Oozing strategy, no functional objectives
– Chaotic-overwhelmed
– Resource squeeze
– Constant change in roles
– Rebellion against beginning structure
– Culture derived from Founders
Early Professionalization Stage – and leading to Boredom Stage:
– IPO able leader
– Strategy of the quarter
– 90-day task implementation roadmap
– Roles stabilizing
– Processes/systems more defined
– Internal coordination and linkage evolving
– Culture defined by team
Lots more info, but the slides are a better resource…
Class 12, 4/18: Performance & Talent Management Interventions
Class Lecture Slides 12
A Performance Management Model:
Have "reward systems" (work place technology) and "goal setting" (employee involvement) tie into inform "individual and group performance" which is informed by the "performance appraisal."
Characteristics of Effective Goals:
– Goals are challenging but realistic
– Set participatively
– Goals are clear and specific, operationally defined
– Resources for goal achievement are negotiated
Management By Objectives (MBO) attempts to align personal goals with business strategy through increased communications and shared perceptions between managers and subordinates. MBO programs may go beyond manager and subordinate roles to address individuals, work groups, and to reconcile conflicts.
Performance Appraisal Elements
- Purpose
- Appraiser
- Role of Appraisee
- Measurement
- Training
In the Traditional Performance Appraisal, the purpose is organizational, legal, and it's fragmented. The appraiser is the supervisor and the appraisee is a passive recipient. The measurements are subjective and concerned with validity. The timing is on a period, which is fixed, and administratively driven.
In High Involvement Performance Appraisals, the purpose is developmental and integrative. The appraiser is a combination of the appraisee, co-workers, and others. The appraisee is an active participant, measurements are objective and subjective. The timing is dynamic, timely, employee- or work-driven.
Performance Appraisal Application Stages:
- Select the appropriate stakeholders
- Diagnose the current situation
- Establish the system's purposes and objectives
- Design the performance appraisal system
- Experiment with implementation
- Evaluate and monitor the system
Characteristics of Effective Appraisal Systems: timely, accurate, accepted by the users, understood, focused on critical control points, economically feasible.
Forced ranking system: shows top management, middle, and deadweight. Arguments both for and against a force ranking system. Yahoo got rid of forced ranking systems, but gives bonuses based on rank, so they essentially just shifted the system.
Reward System Design Features:
- Person/Job Based vs. Performance Based: the extent to which rewards are based on the person, the job, or the outcomes of the work
- Market Position (external equity): the relationship between what an organization pays and what other organizations pay
- Internal Equity: the extent to which people doing similar work within an organization are rewarded the same
- Hierarchy: the extent to which people in higher positions get more and varied rewards
- Centralization: the extent to which reward system design, decisions, and administration are standardized
- Rewards Mix: the extent to which different types of rewards are available and offered to people
- Security: the extent to which work is guaranteed
- Seniority: the extent to which rewards are based on length of servce
Characteristics of Effective Reward Systems: availability, timeliness, performance contingency, durability, equity, and visibility.
Types of Rewards:
– Pay: (1) skill-based pay plans; (2) performance-based pay systems (pay linked to performance); (3) gain sharing (paying bonuses based on improvements in the operating results)
– Promotions
– Benefits
Performance Appraisals evaluate an employee's current and potential levels of performance to allow managers to make objective human resource decisions. They also let the workers know how they are doing and what they can do better. They provide the basis for distributing rewards. They also help the organization monitor selection, training, and development activities.
Common Evaluation Techniques:
(1) Objective Methods: basis is a measurable quantity (units of output, sales volume, number of defective products)
(2) Judgmental Methods: managerial estimates of employee performance levels; ranking (ordering employees from best to worst – difficult to use because there is no absolute standard and differences in performance of ranked employees is not apparent)
(3) Rating: using a predetermined scale (standard) to evaluate each employee's performance
Before a company sends managers out to do appraisals, do some interview prep. Some questions to consider:
– Can you make cause-effect linkages between your subordinates' strengths and weaknesses and tangible outcomes?
– How often and to what extent have you intervened in your subordinates' areas of responsibility?
– To what extent are your own actions a source of your subordinates' problems?
– What diagnosing performance are you able to identify root causes (motivation, ability, resources)?
– What are your subordinates' limitations that cannot be corrected? (move them out of job or retain them?)
– On what strengths can your subordinate capitalize to further increase their effectiveness?
Avoiding Appraisal Errors:
– Use the entire evaluation instrument; avoid focusing on one portion
– Don't let an employee's poor performance in one area influence the evaluation of other areas of performance
– Evaluate the entire performance period and not the most recent behaviors of the employee
– Guard against any form of personal bias or discrimination in the evaluation
Common Feedback Errors:
– Focusing on the person, rather than the behaviors
– Overwhelming the person with a laundry list of areas to improve, rather than focusing on a select few
– Focusing on what you don't want, rather than on what you do want
– Being hurtful while claiming to just be "honest"
– Leaving the discussion with vague goals
– Not making the feedback timely or frequent
Coaching and Mentoring
– Goals: assist in the execution of a transition, address a performance problem, develop new behavioral skills with leadership development
– Application Stages: establishes the principles of the relationship, conduct an assessment, coach and client debrief the results, develop and implement an action plan, and assess the results
Behavioral Coaching: 360 Feedback, before you begin…
– If the person you're coaching is not willing to make a sincere effort to change… behavioral coaching will only work if the manager you are coaching is willing to make the needed commitment.
– If the person has been written off by the company… sometimes, organizations are really just documenting a case to get rid of someone. If that's the case, don't bother going through this process.
– If the person lacks the intelligence or functional skills to do the job… if a manager does not have the capacity or experience required, don't expect behavioral coaching to help.
– If the organization has the wrong mission… behavioral coaching is a "how to get there" process, not a "where to go" process. If the organization is headed in the wrong direction, behavioral coaching will not make it change course.
360 Feedback: An Overview
– Clarify the purpose for every member of the organization
– Clarify rater anonymity, accountability, and selection
– Prepare participants
– Review and interpret feedback results
– Develop an action plan
– Follow-up
360 Feedback: Steps
– Identify attributes for the manager you are coaching. Once you've determined the behavioral characteristics of a successful manager in a given position— such things as accessibility to colleagues, recognition of others, and listening—ask that manager if he or she agrees that these are the right kinds of behaviors.
– Determine who can provide meaningful feedback. Key stakeholders may include direct reports, peers, customers, suppliers, or members of the management team. Strive for a balanced mix that does not stack the deck for or against the manager, and gain agreement that these are the appropriate reviewers.
– Collect feedback. Assessment is often best handled in a written, anonymous
survey, compiled by an outside party into a summary report and given directly to the manager. Analyze results. Talk with the manager about the results of his or her peers' feedback. The manager may choose not to disclose individual stakeholders' comments or numerical scores. Discuss the manager's key strengths and areas for improvement.
– Develop an action plan. The most helpful and appreciated outcome of any assessment is specific advice. Developing "alternatives to consider" (rather than mandates) should not be difficult. If, for example, you asked the manager to suggest things you could do to be a better listener, you would probably receive a pretty good list, such as: don't interrupt people; paraphrase what they say; make eye contact; pause five seconds before responding to their remarks; recognize that the problem isn't figuring out what to do; the problem is doing it; and focus on one or two key behaviors and develop a few action steps to improve each.
– Have the manager respond to stakeholders. The manager being reviewed should talk with each member of the review team and collect additional suggestions on how to improve on the key areas targeted for improvement.
– Develop an ongoing follow-up process. Within three or four months conduct a two- to six-item mini-survey with the original review team. Respondents should be asked whether the manager has become more or less effective in the areas targeted for improvement.
– Review results and start again. If the manager has taken the process seriously, stakeholders almost invariably report improvement. Build on that success by repeating the process quarterly for the next twelve to eighteen months. This type of follow-up will assure continued progress on initial goals and uncover additional areas for improvement.
Class 13, 4/25 Managing Workforce Diversity
Class Lecture Slides 13


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Julie London: Around Midnight CD Track Listing
Julie London
Around Midnight (1960)
Originally Released 1960\nRemastered CD Edition Released September 26, 2006\n\nAMG EXPERT REVIEW: In 1960, pop vocalist Julie London was really cranking out albums for the successful label Liberty Records. The success of her 1955 hit "Cry Me a River" put Liberty into overdrive and London responded by making some of the strongest records of her career. Her ability to interpret a song was at its strongest in the late '50s and early '60s, as is evidenced on the shimmering Around Midnight. While some of her best recordings were front of small jazz combos, Around Midnight proves that London was just as effective in front of larger orchestras and bands. The drowsy "Black Coffee" and lazy "Lush Life" typify the late-night feel of the album, leading right into "The Wee Small Hours of the Morning." [Julie...At Home was released in 1996 as a two-fer as Julie...At Home/Around Midnight.] -- Zac Johnson\n\nAMAZON.COM CUSTOMER REVIEW\narguably London's best album for the Capitol label, February 23, 2007\nReviewer: Byron Kolln (the corner of Broadway and Hollywood)\n\n'Around Midnight' is probably Julie London's greatest album from her days with Capitol. There's a dizzying jazz arrangement of "Lonely Night in Paris", a well-judged "Misty", and a suitably sultry "Don't Smoke in Bed" lends itself perfectly to London's style. \n\nThe biggest irony of Julie London's singing career was the fact that she never could give herself enough credit. She never felt her voice was special, and constantly downplayed her abilities. In the realm of the great jazz ladies, there was nobody who could touch her, nor will there ever be. Julie London was a complete original, and this reissue of 'Around Midnight' will be welcomed with open arms by her legion of fans. \n\n\n\nAMAZON.COM CUSTOMER REVIEW\nLondon is at her sultry peak with this 1960's recording!, January 10, 2007\nReviewer: Ben Cassara (Close to NYC)\n\nPopular song stylist, Julie London truly got it all together to make this terrific album. 'Round Midnight is a typical example of that jazzy, bluesy, sultry sound that Ms. London was so famous for. Her voice is at it's peak with perfect phrasing.....and what a band! Her back up on all tracks shines as much as the singer! If you aren't familiar with London...this is the perfect CD to introduce her to you.....if you are and don't own this run...GET IT QUICK! You won't be sorry!\n\n\n\nHalf.com Details \nProducer: Si Waronker \n\nAlbum Notes\nPersonnel: Julie London (vocals).\nRecording information: Capitol Studios, Hollywood, California (1960).\n\nJulie London was at the peak of both her popularity and her abilities in 1960, the year AROUND MIDNIGHT was released. Some listeners might find the string-laden arrangements and backing vocalists to be a bit dated, and there is indeed an unmistakable early-'60s lounge feel to the proceedings, but it all works perfectly in service of the album. This is thanks mostly to London's sultry delivery and masterfully understated phrasing, which glides like a caress. Her "cool" treatment of chestnuts like "Black Coffee" and "Misty" make AROUND MIDNIGHT a must for fans. Those interested in getting away from London compilations and investigating her studio efforts would also do well to start here.
This jazz cd contains 12 tracks and runs 34min 32sec.
Freedb: aa08160c
Category: Music
Tags: music songs tracks jazz Vocal
- Julie London - 'Round Midnight (02:54)
- Julie London - Lonely Night In Paris (02:12)
- Julie London - Misty (03:12)
- Julie London - Black Coffee (02:59)
- Julie London - Lush Life (01:42)
- Julie London - In The Wee Small Hours Of The Morning (02:49)
- Julie London - Don't Smoke In Bed (02:26)
- Julie London - You And The Night And The Music (02:41)
- Julie London - Something Cool (04:39)
- Julie London - How About Me (03:08)
- Julie London - But Not For Me (02:26)
- Julie London - The Party's Over (03:17)

subset: commoncrawl


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Digital Workflow Solutions for Photographers
Wednesday, April 3, 2013, at Calumet in NYC – from 5:30-8:30pm
This workshop is FREE, but advance registration is required. Please click HERE to register.
We know you. Your hard drive is filled with picture files, and they've got names like: "_MG_8266.CR2," "DSC_7230.NEF," and "Headshot-Final-Final-Final.jpg." Your own pictures overwhelm you and, secretly, you're not totally sure which ones are backed up and which ones aren't. You wonder whether you should be using Bridge, Photoshop, LightRoom, Aperture, Nikon Capture, or Phase One. You're thinking about that new 36 megapixel Nikon, but can't decide if it would be the best camera ever, or just a giant storage nightmare.
We understand. We are Jean Miele & Antonio Rosario, and we have many of those same feelings. The difference between us and you, however, is that we've developed simple, practical strategies for minimizing the pain, so we can get back to what's important: making pictures.
Topics include: file renaming, RAIDs & other hard-drives, Photoshop vs. LightRoom and much more. Let us teach you how to get organized, so you can stop worrying and focus on creating! Join us for what promises to be a highly interactive and useful seminar.
Copyright © Jean Miele 2013. All Rights Reserved. No Reproduction Without Written Consent. This course description may not be used in whole or part to describe, promote, or advertise classes, workshops, or seminars by any instructor other than the author.


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I hated this stuff. First, it weighed down my fine hair. Second, it made my hair feel sticky until I dried it. It made it almost impossible to run my fingers through or a brush. Everything would get caught. Finally, in terms of smoothing and fizz, my hair would get very staticy when brushing.
These reviews are the subjective opinions of ChickAdvisor members and not of ChickAdvisor Inc.


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Deepavali is the most important festival celebrated by Indians all over the world. Deepavali is commonly known as "The Festival Of Lights", since Hindus has a strong belief that how the light rays illuminates the darkness, as the same way all the evil things will vanish from our lives (the victory of brightness over darkness) In Tamil it is literally called so because Deepavali (தீபாவளி = தீப + ஒளி meaning lamp lights), it denotes the Array of Lights. The Festival is a bundle of joy gives us prosperous, filled with light, love, peace and bliss. According to the Hindu Lunar calendar, the festival day will be a new moon day and it falls in-between the middle of October to the middle of November. There are many faiths for celebrating the festival, but commonly all the things denote"the victory of good over evil".
North Indians prays to Lakshmi, the goddess of wealth to start a new financial year for their business. On Deepavali, the goddess Lakshmi, a symbol of prosperity, is worshipped. People wear new clothes, share sweets, decorate their home with earthen lamps & colourful rangolis and light firecrackers. The lights signify a welcome to prosperity in the form of Lakshmi, and the fireworks are supposed to scare away evil spirits. The Lights & Firecrackers on this day shows the indication of people's joy in the earth, to the almighty. In the scientific note, it is said that there is a possible reason to lit the crackers as the fumes produced by the crackers kill a lot of insects and mosquitoes, found in plenty after the rains.
In South India, the auspicious day starts with the oil bath early in the morning, wearing new clothes, doing prayers to god, going to the temple, visiting neighbours, sharing sweets, gifts and joy. "Deepavali Lehiyam" a medicinal food is consumed after taking bath in the morning, in order to have a precaution to digestive problems due to feasting that occurs later in the day. A traditional meal in the afternoon with all the family members and relatives and in the evening, lighting up the lamps and decorating the home withrangolis and clay lamps. On the festival night addition to the billions of stars in the sky, fireworks are cracked and it illuminates the sky more beautiful as happiness in our life. Narakasura, a demon was killed by Lord Krishna and at his last breath, he asked a wish to the god that his death should be celebrated by everyone wearing new clothes, bursting crackers and praying god to get out the evil of their life to live peacefully and happily. In the south of India, the day when the demon king was killed is celebrated as Deepavali. Whereas in the northern part it is celebrated as Goddess Lakshmi's birthday and also the return of King Rama to Ayodhya after defeating Ravana of Lanka. In the western part, the day is celebrated by worshipping Lord Vishnu and Lakshmi, since Lord Vishnu rescued Lakshmi from the prison of King Bali after killing him. Not only in the Hindu Community the promising day is celebrated in Jainism as the spiritual awakening day for Lord Mahavira and in Sikhism the same Deepavali day, Guru Hargobind Ji, the Sixth Sikh Guru was freed from imprisonment. Regardless of faith over centuries, Deepavali is celebrated by the Nation under one common shield as a process of conquering evil things to bring glory in lives. On the auspicious and colourful occasion three important things lit the festival fire: Lights Lights illuminate your life with glory and success. Gives the grace of its wings, to overwhelm the dark and show a great path to our success. Light gives you tranquillity. Colors Colors are able to identify the nature around us. Each color is unique and a glow with vibrant shades gives the hope of light in our life. Colors make us feel very bright and bring the festive happiness. Crackers A clear sky with stars added with additional sparkles, gives an eye catchy view. These dazzling fireworks scene the beauty of light and illuminates our life forever. Crackers bring a lot of excitement.
We the team TOON EXPLAINERS, wishes everyone a happy, colourful and pollution free DIWALI!!!!!!!! This DIWALI burst your EGO, not CRACKERS!!!!!!!


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3DOcean HDR 127 Industrial Hall sIBL 2629555
Texture \ HDRI Images \ Interior
Resolution \ Panorama \ Spherical \ Channel \ Organizing \ Application
Texture - HDR 127 Industrial Hall sIBL 2629555 by brainspoon @ 3DOcean
Texture \ HDRI Images \ Interior
This package is a complete sIBL set and the full resolution source .hdr file.
-Full resolution .hdr Panorama
-half resolution .hdr Panorama
-full resolution .jpg Tonemapped Image
-low resolution light map
Projection: 360/180 full spherical panorama, Spherical Map Latitude-Longitude Depth: 32 bit per channel
What is sIBL? sIBL-Gui is a free application for organizing your HDR images and setting up your scenes with a single click.
HDRI Loader Script (V-Ray for Maya)
Discounted Bundles
HDRI Skies
Layered: No; Tileable: Yes; Graphics Files Included: JPG Image, High Dynamic Range HDR; Minimum Adobe CS Version: CS; Texture Resolution: 10240x5120.
HDR 136 Cloud Sky Hill Top sIBL; HDR 121 Night Sky sIBL; HDR 085 Road sIBL ; HDR 084 Parking Lot sIBL; HDR 083 Road sIBL; HDR 082 Road sIBL; HDR 081 Road sIBL.
Keywords: abandoned, backplate, building, dirty, environment, factory, graffiti, hdr, hdri, ibl, industrial, map, panorama, photo, plate, reflection, rusty, sky, skydome, spherical, sun, vandalism.


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An Admirable MBA Student
I've had the privilege of teaching MBA students since 1999. I've met both exceptional and abhorrent people over the years. One that I admire as much as anyone I've ever met graduated last weekend.
This woman is a single, working mother of a young child with special needs. During the two years I've known her, I've watched her juggle the demands of her job, child, and coursework with professionalism and grace. I've listened to her describe her demands in a matter-of-fact way, but never once heard her complain. She was always positive, always in search of solutions instead of excuses or pity. On top of everything else, she confronted personal health issues and also lost her job. Her response to losing her job was to start her own business.
She had plenty of very legitimate reasons to quit, but she determined to persevere instead.
I think that's pretty impressive.
If you read this, you'll know I'm talking about you. I want you to know that in addition to earning your MBA, you also earned my admiration and respect. People like you make the work I do very worthwhile. Thank you.
About the Author: Bret L. Simmons
Comments (10)
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Bret, I think I know the individual you speak of and I can tell you that there is no higher honor for a MBA student than what you have written here. The work you do makes people want to work harder, especially when they have a role model such as yourself! Thanks for the post. ~Christine
Bret L. Simmons Reply:
December 8th, 2010 at 1:10 pm
I think you might know that person too, Christine 🙂 Thanks for the kind words! Bret
That's really impressive & would act as a source of inspirations for many others, specially women.
Bret L. Simmons Reply:
December 9th, 2010 at 9:29 am
I agree, Anshul. Thanks! Bret
Having long been a single mom myself, I would love to encourage that woman and tell her that her actions, which have inspired her MBA professor and fellow students, have changed the course of history for her and her family. I would like to tell her:
Keep reflecting light and hope into the life of your child. To do that, keep close to sources of light yourself. Allow people you trust to bless you, so that you do not allow darkness to overcome you.
Don't be shy about seeking supportive relationships. Build a network of fervent friends who share your values, then commit to keep each other on the path. You are worth haveing as a friend. Your value comes from you being you.
And, take notes! I think you will encounter other women in the future who will need the gritty kind of encouragement that only people in your position can provide. Be ready. Give them a word of wisdom from the lessons you've learned. Pass them your rope of hope to hold onto when they waver on their cliff of despair. Pay back the kindnesses you've recieved in your time of need by supplying kindness to others in theirs.
The guys who read this may not understand it, but this is how women of courage survive: They have found out how to say "Stop." They have turned into tigresses for their children's sake. They have ditched self-pity while they have kept self-compassion. And they have learned how to face the future practically, resourcefully, and fearlessly, one moment at a time.
Bret L. Simmons Reply:
December 18th, 2010 at 10:57 am
Thanks for sharing this, Elizabeth. You are so right, I and many other men can never fully understand what this, but I can admire it. I've seen many women in similar situations in my years of teaching and it makes me marvel. Thanks! Bret
Denny Thurman Reply:
April 14th, 2011 at 4:33 pm
Bret, Elizabeth and All,
I like everything that has been said above except that this is just not about strong women, many men have shouldered the same burdens and challenges through the years. As a single dad with primary custody for two children, my challenges and requirements to overcome are no different. The economy devastated me during the past few years, and yet like most strong willed people I found a way to survive and to keep on keeping on.
Congratulations, to all who "will not fail, will not give in, will not quit, whether they are male or female they've embraced the spirits of survival and thriving in the face of adversity and they are bringing their families through.
Bret L. Simmons Reply:
April 15th, 2011 at 12:13 am
Welcome, Denny, and thanks for adding your thoughts to the conversation. You are quite right, and I appreciate you providing the reminder. Thanks! Bret
That's truly inspirational Dr. Simmons ! We fret about little things in life, real life examples like these help us to stay grounded & to look at the bigger picture in life !
Bret L. Simmons Reply:
January 26th, 2012 at 6:50 pm
Welcome, Harini! Thanks for sharing your thoughts. Bret


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A Shift from the Substantial Review and Approval System to the Filing for Record System
As of October 1, 2016, the current substantial examination and approval process required by the approval authorities (Approval Authorities, i.e., the Ministry of Commerce (MOFCOM) or its local counterparts) for the establishment and subsequent changes of foreign invested enterprises (FIEs) will be simplified to a filing system, as long as the FIEs in question are not engaged in industries included on the national Negative List. MOFCOM has also published the draft Interim Administrative Measures regarding Filing for Records of the Incorporations and Changes of Foreign Invested Enterprises (Record-filing Measures) for public comments by September 22, 2016, with the final version set to take effect on October 1, 2016. These legal changes will substantially lessen regulatory burdens on foreign investors and speed up the regulatory registration process for the establishment of FIEs in China.
On September 3, 2016, the Standing Committee of the National People's Congress of the People's Republic of China (the PRC) adopted the Decision on Changing the Wholly Foreign-Owned Enterprise Law of the People's Republic of China and three other laws on foreign investment (the Decision).1 This article outlines the current legal regime on the administration of foreign direct investment (FDI) in China, explains the shift from the substantial review and approval system to the record-filing system, details how the record-filing system will be implemented in China and offers our thoughts on the major issues to be further addressed for the implementation of the amendments to the four relevant laws as specified in the Decision and the final version of the Record-filing Measures.
In the decades since the beginning of the opening-up policy in 1979, China has developed a comprehensive set of laws and regulations to regulate foreign investments, among which, the WFOE Law, the EJV Law, the CJV Law and their respective implementing rules are the key legislation, together with the PRC Company Law. In addition, there are separate rules governing various aspects of foreign investment related issues, such as acquisitions by foreign investors of PRC domestic companies, equity changes in FIEs, mergers and splits of FIEs, and re-investment in mainland China by FIEs.
By publishing the Foreign Investment Industrial Guidance Catalogue (Guidance Catalogue) since 1995,2 China classifies foreign investment activities into four categories: (i) Encouraged, (ii) Permitted, (iii) Restricted, and (iv) Prohibited.3 Foreign investment in the first three categories is subject to substantial review and approval of the constitutional documents of the FIEs (such as joint venture contracts and articles of association) by the Approval Authorities before any foreign investor can register with the competent Administration for Industry and Commerce (AIC, i.e., the company registry in China) for the establishment of an FIE. Approval Authorities must approve the incorporation of FIEs and any subsequent changes to the FIEs.4 Certain changes to any FIE (such as amendments to the constitutional documents, equity changes and transfer and increase or decrease of total investment and registered capital) are also subject to the review and approval by the Approval Authorities.
Over the years, the approval system has faced criticisms mainly in the following aspects:
- The lengthy statutory timelines for the Approval Authorities to issue approvals, which vary from thirty to ninety business days, depending on the matters to be approved—even though, as a matter of fact, many Approval Authorities have improved their efficiency and may grant approvals within ten business days.
- The substantial review of FIEs' constitutional documents has raised concerns by FIEs and foreign investors that the Approval Authorities can interfere with their flexibility in doing business.
The Approval Authorities have been aware of the fast-changing environment for foreign investment in China and the demands of foreign investors and FIEs for more openness, transparency and efficiency. Thus they started trials to improve the current administrative regime for FDI. From October 2013, China started certain trial pilot programs in the Shanghai Free Trade Zone, Guangdong Free Trade Zone, Fujian Free Trade Zone and Tianjin Free Trade Zone (collectively, the FTZs). Under the trial pilot programs, foreign investment in the FTZs in areas which are not on the Negative List is no longer subject to the Approval Authorities' approval. Instead, a simple record-filing system was established.5 MOFCOM now believes that the trial record-filing system, which has been successfully tested in those FTZs, is ready to be applied nationwide.
- In addition to the PRC Wholly Foreign-Owned Enterprise Law (WFOE Law) adopted by the NPC on April 12, 1986 and amended October 31, 2000, the other three laws amended by the Decision are: the PRC Sino-Foreign Equity Joint Venture Law (EJV Law) adopted by the NPC on July 1, 1979 and amended April 4, 1990 and March 15, 2001, the PRC Sino-Foreign Cooperative Joint Venture Law (CJV Law) adopted by the NPC on April 13, 1988 and amended October 31, 2000, and the PRC Law on the Protection of Investment by Taiwan Compatriots adopted by NPC Standing Committee on March 5, 1994.
- Amended in 1997, 2002, 2004, 2007, 2011 and 2015.
- As a matter of fact, the Guidance Catalogue only included three categories, i.e., (i) Encouraged, (ii) Restricted, and (iii) Prohibited. Any activities not included in the Guidance Catalog are deemed to be permitted.
- Such as changes of the registered capital and total investment amounts, registered address, business scope, director(s), supervisor(s), legal representative, equity transfer, amendment to the articles of association and joint venture contracts (for EJV and CJV), termination of FIEs, etc.
- Based on the trial experience of the FTZs, on April 8, 2015, MOFCOM published the Administrative Measures regarding Record-filings for Foreign Investment in FTZs (Trial) (Record-filing Measures for FTZs) and the General Office of the State Council published the Special Administrative Measures (Negative List) on Foreign Investment Access to FTZs (Negative List for FTZs), both of which took effect thirty days after being published.