Organizations are continually searching for innovative ways of enhancing competitiveness. This is brought about by evolving external factors such as changing demographics, globalization, and technology. Because of changing dynamics, it has required managers to rapidly rethink and retool their organizational management strategies.
Coming up with the appropriate strategies calls for an increasing need for organizational diagnosis in developing and maintaining a competitive advantage. Researchers believe that in conducting organizational diagnosis, organizational effectiveness must be viewed from a systems perspective using a multidimensional approach in assessing the factors affecting enterprise performance management.
At this point wherein the role of organizational climate in business performance has become significant, there is a need for a business model that is most influential. To date, the Burke-Litwin Change Model is the best known and most influential model suitable when it comes to organizational climate.
A Quick Look at Burke-Litwin Change Model
The Burke-Litwin Change Model is seen as a conceptual framework that can best describe the relationships between different features of the organization, as well as its context and effectiveness.
According to Burke and Litwin (1992), Change Management models are not meant to be prescriptive. They are meant to provide a means to diagnose, plan, and manage change. Using the Burke-Litwin Change Model will provide organizations an effective diagnostic tool to improve overall organizational performance. It is a useful model for understanding the organizational change process.
The Burke-Litwin Change Model, as a change management tool, assumes 12 organizational elements that determine a change within an organization.
The Burke-Litwin Change Model 12 Drivers
The 12 key drivers of the Burke-Litwin Change Model interact with and affect each other. The change in the 12 key drivers brings about a series of changes in the structure, practices, and the system of the organization.
The 12 key drivers have been organized based on their specific roles within the organization.
- External Environment. The External Environment is the external influences important fo organizational changes. These are the economy, customer behavior, competition, politics, and legislation.
Throughput: Transformational Drivers. Transformational Drivers are those that make up the fundamental structure of an organization. It relates to the organization as a whole. There are 3 Transformational Drivers.
The 3 key drivers have over-riding importance of dealing with a change that is intended to share up “the way things are done around here.”
Throughput: Transactional Drivers
Transactional drivers are drivers that are more easily changed, but rarely have the same kind of impact on organization-wide performance. This concerns daily activities that take place in organizations and their mutual cohesion. There are 7 Transactional Drivers.
- Management Practices
- Work Climate
- Task and Individual Skills
- Individual Needs and Values
The Transactional Drivers can affect performance. However, performance can only be long-lasting if these key drivers are aligned. The 7 key drivers are critical in their role of supporting the change process.
Individual and Organizational Performance is the 12th key driver. It is the outcome of the change.
The 12th Key Driver: The Individual and Organizational Performance
The only thing that is constant is change. As output changes, so does the input and the factors of change. Individual and Organizational Performance is the measure of the effectiveness of the change. It measures the performance levels of both the individual employee and on the departmental and organizational level.
Individual and Organizational Performance can be measured on the basis of turnover, productivity, quality requirements, efficiency, and customer satisfaction. This is the key driver that impacts on the external environment.
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Most companies have ethics and compliance policies that get reviewed and signed annually by all employees. A company policy states that “Employees are charged with conducting their business affairs in accordance with the highest ethical standards.” “Morals, as well as legal obligations, will be fulfilled in a manner which will reflect pride on the Company’s name.” These all come from a company’s policy. Yet, to sustain a truly ethical organization, it takes more than a compliance policy or Values Statement.
“Corporate ethical failures have become painfully common, and they are not cheap.”
Billions of dollars have been paid in fines by companies charged with ethical breaches. Despite good intentions, organizations set themselves up for ethical catastrophes. In this age of corporate mistrust, creating an ethical workplace takes more than compliance programs.
Unraveling the Ethical Organization Paradox
According to the National Business Ethics Survey, leaders make concerted efforts to pay holistic attention to their organization’s systems. Yet, despite progress, a number has failed.
- 41% of workers reported seeing ethical misconduct in the previous 12 months
- 10% felt organizational pressure to compromise ethical standards
- $185 M in fines imposed on Wells Fargo as 5300 employees opened up more than a million fraudulent account.
Despite good intentions, organizations set themselves up for ethical catastrophes. The paradox is, without realizing it, organizations tend to create an environment in which people feel forced to make choices they could never have imagined.
Preventing ethical catastrophes can be done. Organizations just need to create that environment where people are encouraged to make ethical choices. There are 5 critical ways organizations can boost ethical decision making.
Boosting Ethical Decision Making in 5 Effective Ways
Boosting ethical decision making is important. This can be achieved when done using the most effective ways.
- Foster a Speak Up Culture. This is best applied when the courage needed to raise ethical concerns are inhibited. The corporate culture will dictate how people within the organization behave.
- Create Realistic Performance Targets. The second way of boosting ethical decision focus on ensuring that people do not make compromising choices to reach targets.
- Ensure Goals Are Fair and Non-conflicting. The culture of fairness in the organization is the main focus here. This is best applied when there are conflicting goals in pursuit of growth.
- Infuse Ethics into Regular Activities. This approach is the most challenging but life-changing. Often, leaders talk about business ethics only when there is a scandal or as part of the organization’s compliance program. Infusing ethics into regular activities ensure that ethics becomes an everyday part of the organization and its DNA. It becomes embedded in the way people relate with each other, work with each other, and even in the application of its processes and systems. Here, ethics become your organization’s everyday life.
- Set a Positive Example. Leaders play a vital role in setting higher standards when it comes to ethics. Essentially, they must be able to put themselves in the shoes of those they lead to see what unintended meaning they are sending. This can be seen in how they react to stressful situations or event confront poor performance. Leaders need to become extra vigilant as others may interpret their actions or behavior otherwise.
Organizations don’t want to find themselves in a front-page scandal. Hence, they must scrutinize their actions to far greater degrees than they may have realized. The 5 Ways of Boosting Ethical Decision Making can just be the organization’s steppingstone towards transforming into an Ethical Organization and sustaining it.
Interested in gaining more understanding of how Ethical Organizations improve Ethical Decision Making? You can learn more and download an editable PowerPoint about Ethical Organization: Improving Ethical Decision Making here on the Flevy documents marketplace.
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