The Zombie Syndrome

Changes in structure, referred to as reorganization, involve changes in authority and reporting relationships and often downsizing. In turn, reorganization results in changes in power and personal relationships (both formal and informal). According to “Leadership Wharton,” reorganization also results in a change in culture, and depending on the type of reorganization and its implementation, the culture change can be positive or negative. For example, a reorganization that involves greater centralization and reduces autonomy may increase efficiency, but is likely to have a negative effect on morale and culture. The authors of “Leadership Wharton” also describe the impact of restructuring as often schizophrenic for those who experience it. For example, restructuring often has dual impacts, e.g., employee stress and anxiety increase, and morale may decrease (at least temporarily) while new assignments and responsibilities may increase job challenge and variety.

Is reorganization really necessary? Clemmer proposes that in attempts to deal with fast-paced changes in the environment, executives too often respond by re-arranging the organizational structure.19 “This seems to be an especially favorite approach of a new executive taking over a division, department or organization. It’s almost routine when there’s been a major financial failure or big public blunder”.19 He reports that a survey of 1600 executives in 35 countries conducted by the Boston Consulting Group found that over 90 percent of companies with over 1,000 employees had recently restructured. Is it possible that all of this restructuring is necessary or effective? The consultants actually found that less than half of these restructuring events were considered effective by the executives surveyed.

“Most US companies have not realized positive gains from organizational restructuring because they focus too much attention on eliminating unnecessary jobs and outplacing people and not enough attention on cutting or outplacing unnecessary work”. Tamasko goes on to report that of the 1,000 companies surveyed by a leading actuarial firm, 90 percent wanted to reduce expenses, but less than half actually did; 75 percent hoped for productivity improvements, yet only 25 percent achieved them.20

One of the roadblocks to successful reorganization is change that does things TO people rather than WITH people.19 Organizations that see people as human capital rather than as human beings will move people around on an organizational chart like pawns on a chessboard. Middle managers and critical support staff must be involved and overlaid on the executives’ vision, organizational culture and change strategies.

Casio attributed the failure of many reorganization attempts to the lack of effective strategies to mitigate the unanticipated (or unanticipated severity of) personal consequences (e.g., reduced engagement, stress, intent to quit and voluntary turnover among them).21 These consequences seem to be particularly prevalent among middle managers.22 And unfortunately, research shows that those most likely to leave are those who are most competent and have the highest potential.23

What we can conclude is that executives need to be confident that reorganization is the best approach to address the issues. As we look back on Yahoo’s reorganization history and Marissa Mayer’s approach to change processes rather than structure, we might conclude that reorganization was not the best response to Yahoo’s problems. Given the potential downsides to reorganization and the failure rates, other alternatives should be considered first. 

And, when reorganization is deemed necessary, executives should take a “human” approach and consider potential personal consequences and strategies for minimizing them.

19 Clemmer, J. (2012). Overcoming the abysmal reorganizing and restructuring failure rates. Retrieved        April 20, 2014, from http://www.business2community.com/leadership/overcoming-the-abysmal-reorganizing-and-restructuring-failure-rates-0187765#!X10oR

20 Tomasko, R. M. (1992). Restructuring: Getting it right. Management Review, 81(4), 10.

21 Cascio, W. F. (1993). Downsizing: What do we know? What have we learned? Academy of Management Routledge19 Executive, 7(1), 95-104. doi: 10.5465/AME.1993.9409142062

22 Newell, H., & Dopson, S. (1996). Muddle in the middle: Organizational restructuring and middle management careers. Personnel Review, 25(4), 4.

23 Mishra, K. E., Spreitzer, G. M., & Mishra, A. K. (1998). Preserving employee morale during downsizing. Sloan Management Review, 39(2), 83-95.

 

Modelling Ethical Behavior

In the 1930s B. F. Skinner developed the concept of operant conditioning. Simply put, operant conditioning proposes that behavior is controlled by its consequences. That is, when positive reinforcement (reward) follows a behavior, that behavior will likely be repeated.2  This notion was built upon by Albert Bandura and other social psychologists who discovered that the learner did not personally have to be rewarded, but could learn from observing consequences delivered to others. Bandura developed Social Learning Theory (SLT) to explain how observing others’ behavior, and its consequences, can result in learning and imitation.3 SLT proposes that four processes are necessary for vicarious or observational learning to take place. The first process is attention. Before a behavior can be imitated an individual’s attention must be focused on that behavior. Certain factors increase the chances that an observer or learner will attend to another’s behavior. One of these is status. Individuals are more likely to pay attention to behavior of someone of higher status (i.e., a leader). The second process is retention, meaning the behavior must be remembered. Third, the observer must be physically capable of imitating the behavior. And fourth, the individual must be motivated or have a reason to learn the behavior. Again, if the behavior is being displayed by a leader, it likely will be seen as more important to learn and imitate.

One area of research that has been receiving increased attention is the learning and modeling of ethical or unethical behavior. Brown, Trevino, and Harrison have defined ethical leadership as follows: “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships and the promotion of such conduct to followers through two-way communication, reinforcement and decision-making.” Brown et al. grounded their definition in social learning theory, asserting that individuals can learn standards of appropriate behavior by observing role models.4

Mayer, Aquino, Greenbaum and Kuenzi used SLT as the basis for their study of leader ethical behavior and unit unethical behavior.5 They concluded that “when a leader models desired ethical behavior and uses rewards and punishments to help ensure appropriate behavior on the part of subordinates, employees are less likely to engage in unethical behavior” They also concluded that leaders have to actively model ethical behavior; rewards and punishments alone were not adequate.

2Skinner, B. F. (1938). The behavior of organisms. Oxford, England: Appleton-Century.

3Bandura, A. (1977). Social learning theory. Oxford, England: Prentice Hall.

4Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior & Human Decision Processes, 97(2), 117-134. doi: 10.1016/j.obhdp.2005.03.002

5 Mayer, D. M., Aquino, K., Greenbaum, R. L., & Kuenzi, M. (2012). Who displays ethical leadership, and why does it matter? An examination of antecedents and consequences of ethical leadership. Academy of Management Journal, 55(1), 151-171.

 

Implicit Person Theory

Similar to the concept of fixed mindset, Dweck and Leggett developed an analytic framework for the way people respond to the events they experience.15 Implicit Person Theory (IPT) refers to a person’s implicit belief about the malleability of personal characteristics such as ability or personality traits. Those individuals who hold a mindset that personal attributes are largely fixed are referred to as entity theorists while those who believe people can change and develop are referred to as incrementalists. While one’s IPT can be somewhat domain specific (e.g., morality can’t change but ability can) there is clear evidence that overall people have a belief about malleability.16 A number of recent studies have demonstrated the relevance of leader IPT in a work context. Heslin, Vandewalle and Latham conducted two studies each demonstrating a significant relationship between a leader’s IPT and his or her willingness to provide coaching and developmental feedback to subordinates.17 Incrementalists were more likely to engage in coaching and development of followers. Devloo, Anseel and Beuckelaer found that incrementalists were also more likely to seek feedback when they perceived a misfit between their own abilities and job demands.18 Also of importance, Heslin et al. were able to increase entity theorists’ level of incrementalism by introducing video-taped examples of individuals who had made changes.17 These changes in their levels of incrementalism were evident even six weeks after the intervention. Interestingly, Sevincer, Kluge and Oettingen showed that an individual’s future focus could be enhanced when those with entity orientations were led to adopt a more incremental focus.19These authors demonstrated that incrementalists focus more on the desired future than the present reality. This future focus could be improved by providing people with information that traits can be influenced by environmental conditions. The implications of this are significant for managers. First, a belief in the malleability of people is not stable, but can be modified. Second, leaders who believe in malleability will be more effective as coaches as well as inmanaging their own jobs and careers. Third, possessing a greater incremental focus will lead to greater emphasis on future possibilities than present realities.

15 Dweck, C. S., & Leggett, E. L. (1988). A social-cognitive approach to motivation and personality. Psychological Review, 95(2), 256.

16 Dweck, C. S. (1999). Self-theories: Their role in motivation, personality, and development. East Sussex, UK: Psychology Press.

17 Heslin, P. A., Vandewalle, D. O. N., & Latham, G. P. (2006). Keen to help? Managers’ implicit person theories and their subsequent employee coaching. Personnel Psychology, 59(4), 871-902.

18 Devloo, T., Anseel, F., & Beuckelaer, A. (2011). Do managers use feedback seeking as a strategy to regulate demands–abilities misfit? The moderating role of Implicit Person Theory. Journal of Business and Psychology, 26(4), 453-465.

19 Sevincer, A. T., Kluge, L., & Oettingen, G. (2014). Implicit theories and motivational focus: Desired future versus present reality. Motivation and Emotion, 38(1), 36-46.