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Summary 3.5 Organizational Psychology
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Organizational PsychologyFebruary & March 2019
5 ECT
ESSB FSWP3085A
Prof. Dr. P.P. Petrou
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WEEK 1
1
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LECTURE 1: Introduction
There was a guest lecturer (Ashish Lall) from Unilever. He is the Unilever Europe Talent Organization Director. He discussed
organizational change in action. He will discuss a more applied type of framework rather than a theoretical one. Unilever
has a huge yearly turnover of about 53.7 billion. They own different types of international and locally recreated brands.
Ashish explained that Unilever is also considerate of the global challenges. This contributes to their fundamental believe.
Their vision is to grow the business whilst decoupling their environmental footprint. They have four types of products: food,
personal care, refreshment, and homecare.
They have created 8 market clusters to allocate regions around the world to a certain type or market (e.g. Europe, Africa,
South-Asia). They use this to take into account the needs of this market. Before 2005, Unilever was a multinational but was
less restricted to international product management. Every region was allowed to decide themselves which products they
sold. After, 2005 they started to create universal products across the world as well as regional products.
The current global developments have created limits and should be dealt with through growth and reshaping the aspirations
of Unilever. These changes are for instance: more digitalization, reduced barriers to enter the market, environmental issues,
intense cost competition, inequality, and hyper-segmentation. In order to fit the wishes of the costumers better, they decided
to focus more on locally inspired products. The Connected 4 Growth plan focusses on being more competitive, being more
costumer centered, using capacity, and attracting high caliber people. They generally promote empowerment,
experimentation and collaboration.
He concludes that if there is a shift within costumer needs, your strategy needs to change too. Furthermore, the
organizational culture has to change with it. Companies need to be aware that changes will never stop happening.
Therefore, companies must test, learn, fail and repeat.
The professor then gave an overview of the course. There is a workload of 40 hours a week, with lectures on Monday with
information which is not discussed in the literature. The exam will consist of 60 items which 3 answer option. The exam will
be elaborated upon in the last lecture. For the practical we write a self-reflection report. The professor said that the paper
of Porter is corrected with what Ashish explained earlier in the lecture. The book you will need is the Organizational
Psychology; a Scientist Practitioner Approach (2014) by Steve M. Jex and Thomas W. Britt. This is the third edition. The
2008 version of this book is basically useless in this course. Make sure you don’t sure this! This book can be accessed at
Polak or online.
The practical 3.5 is called Organizational Diagnosis. The first step of consulting is a diagnosis. This is the only step of
consultancy we will explore during this practicum.
2
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WEEK 2
3
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LECTURE 2: Organizational Change
Paris said to no exam questions will be asked about this lecture. The sides are not online due to copy right issues. The
discussion during the lecture was very much related to the specific companies, and you therefore don’t need to know this.
PROBLEM 1
Mitzberg, H. (1980). Structure in 5’S: A Synthesis of the Research on Organization Design.
Introduction
There are five basic configurations of organizational structuring: (1) simple structure, (2) machine bureaucracy, (3)
professional bureaucracy, (4) divisionalized from, and (5) adhocracy. Simple structures are often found in smaller
organizations. It is associated with a direct supervisor, a highly centralized structure, a dynamic environment, and strong
leaders. The machine bureaucracy occurs in highly specialized and formulized fields. It is often associated with older
organizations which are stable. You can recognize it from having a vertical leadership structure. Professional bureaucracy
is highly specialized but not formalized. There is decentralization, extensive training and a complex but stable environment.
Divisionalized form organizations achieve standardization of outputs through performance control systems. This is often
found in mature organizations operating in a diversified market. Adhocracy has specialized jobs, training but little
formalization, small units, decentralized and centralized structures. It can be found in complex and dynamic environments.
Elements of Structure
The authors refer to design structures when mentioning design parameters. Design parameters are analyzed through
contingency factors.
▪ The basic parts of the organization: (1) operating core, (2) strategic apex, (3)
middle line, (4) technostructure, (5) support staff. The operating core
includes all those employees who themselves produce the basic products
and services. The strategic apex consists of the top general managers of
the organization, and their personal staff. The middle line comprises those
managers who sit in a direct line of formal authority between the people of
the strategic apex and of the operating core. The technostructure consists
of those, who apply analytic techniques to the design and maintenance of
the structure and to the adaptation of the organization to its environment.
The support staff includes those groups that provide indirect support to the
rest of the organization.
▪ The coordinating mechanisms: (1) direct supervision, (2) standardization of
work processes, (3) standardization of outputs, (4) standardization of skill,
(5) mutual adjustment. In direct supervision, one individual (typically a
manager) gives specific orders to others and thereby coordinates their work. In
the standardization of work processes, the work is coordinated by rules to
guide the doing of the work itself. In the standardization of outputs, the work
is coordinated by standard performance measures. In the standardization of
skills, the work is coordinated making sure an individual has of standard skills
and knowledge, usually before they begin to do the work. And in mutual
adjustment, individuals coordinate their own work, by communicating
informally with each other
▪ Design parameters: (1) Job specialization is a parameter which determines
the division of labor. (2) Behavior formalization is the design parameter by
which work processes are standardized, through rules and procedures. It is
typically the unskilled jobs that are the most highly formalized (bureaucratic).
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(3) Training and indoctrination is the design parameter by which skills and knowledge are standardized, through
extensive educational programs, usually outside the organization and before the individual begins his job. (4) Unit-
grouping deals with the bases by which positions are clustered into units, until all are clustered together under the
strategic apex. (5) Unit size (usually called span of control) deals with the number of positions, or subunits, that are
grouped into a single unit. (6) Planning and control systems consists of action planning (regards specific output
decisions) and performance control (the measure of what is good. (7) The liaison devices are the means by which
the organization encourages mutual adjustment across units. (8) Decentralization consists of vertical decentralization
(power is delegated down) and horizontal decentralization (power is delegated outside the line of authority.
▪ Contingency factors: (1) Age and size, (2) technical system, (3) environment, (4) power. The older and larger the
company, the more formalized the behavior becomes. If the technical systems (the regulations) are often used, the
organization is typically more formalized and bureaucratic. If this system is complex, there will be more support staff,
selective decentralization and liaison devices. Dynamic environments are more organic whist complex environments
are decentralized. External control (power) of organizations can lead to formalization and centralization.
Configurations of Structure
The congruence hypothesis relates effectiveness of
organizations to the fit of a design parameter and a
contingency factor. The configuration hypothesis
predicts that effectiveness requires internal
consistency among the design parameters. The
extended configuration hypothesis states that
effectiveness requires consistency among design
parameters and contingency factors.
▪ Simple structure: Typically, it has little or no
technostructure, few support staffers, a loose
division of labor, minimal differentiation among its
units, and a small middle line hierarchy. Little of its
behavior is formalized. Thus, the strategic apex
emerges as the key part of the structure; indeed,
the structure often consists of little more than a
one-person strategic apex and an organic
operating core. Likewise, decision making is
informal. The classic case of the Simple Structure
is the entrepreneurial firm. The firm is aggressive
and often innovative, continually searching for
risky environments where the bureaucracies
hesitate to operate.
▪ Machine Bureaucracy: The Machine Bureaucracy
is typically associated with environments that are
both simple and stable. Typical examples of
organizations drawn to the Machine Bureaucracy
configuration are mass production firms, service
firms with simple, repetitive work such as
insurance and telephone companies.
▪ Professional Bureaucracy: Professional
Bureaucracy is found typically in school systems,
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