By its principal definition, an organization can be said to be an assemblage of people that work as one to accomplish common objectives of the organization using a division of labour approach (Jones, 2007). Organizations provide ways of tapping individual strengths in a given group in achieving more than can be realised by combined efforts members of a group who work individually. On the other hand, organizational theory can be said to be the study of organizational structures and designs, how organizations relate to their external environment as well as technocrats and managers behaviours within organizations. In the real sense, these theories suggest how organizations can cope with changes that are rapid. Over several years ago, economists, academic researchers, and business analysts have deliberated on various theories that explain the dynamics of organizations, especially the way they arrive at their decisions, resolve conflicts, and allocate power and control as well as promoting or resisting organizational change (Ouchi, 2008).

Part One

Organizational theory employed by Robert in 1980s and early 1980’s

As a manager, Robert saw the need to be at par with the advancement in technology and other management factors that were rapidly changing in late 80’s and early 90’s. He, therefore, applied theory z that had been developed in 1980’s. The theory is a blending of  Japanese and American practices of management; it was a highly visible theory because of US’s difficulties in manufacturing and the Japan’s fine-documented improvements in productivities in that decade (Ouchi, 2008).  It is a socio-technical type of approach that Robert employed at Damco company, where he realised that technology advancements could affect the company in various aspects.  Organizational design at Damco and the unions could as well hamper the Recycled Furnishings’ culture.

Theory Z was developed by Dr. William Ouchi, Abraham H. Maslow and W.J. Reddin. Ouchi had the intentions of increasing the loyalty of employees to the organization by providing them with job safety. During the said period, Recycled Furnishings Company was in need of improving their methodology of assembling their furniture, producing quality furniture and improving their shipping processes. For such reasons, Theory Z was fundamental. Dr. Ouchi suggested that for an organization to realise these objectives, managers must ensure that workers are the focal point.


Consequently, during this period, the traditional theories regarded an organization as a closed system that was isolated from the outside world. Hence, the traditional theory at that time failed in taking into account several aspects that included environmental influences, these hampered companies’ efficiency (Ouchi, 2008).

The principles of theory Z were very distinct. It epitomizes a humanistic style to management. The primary features of this theory include.

  • Consensual decision-making –the theory stresses much on collaboration, communication, and agreement in decision making.
  • Individual responsibility- theory Z stresses much on individual contributions; it recognizes individual achievements, although in the perspective of the wider group.
  • Long term employment- this was borrowed from Japan where organizations make life long assurances to their employees and as a result, expect loyalty from them(Ouchi, 2008). This brings about stability as well as security of the job in an organization.
  • Abstemiously specialised career path. The theory adopts a middle of the road posture with less specialised careers than traditional United States model but more specialised than Japanese traditional model.
  • Holistic concern-theory Z is characterized by employees’ concern that extends beyond their workplace as extensively practised by Japanese organizations.

Managers using theory Z achieve many benefits that include satisfaction of employees, their motivation, and commitment not forgetting in terms of financial performances (Lewis, 2000). Employees commitment to the job and the kind of motivation they are given will allow them concentrate on their work without close supervision with their managers. Hence, the manager will be accorded ample time to perform his duties.

Thor as an organization faced a rather different situation that made Robert adopt a more comprehensive way of management. It is for this reason that the manager had to use theory Z. It takes into account several aspects of the employees’ welfare as well as the environment affecting their performances that include technological changes and workers unions (Ouchi, 2008).

Part Two

How my change of management at, Thor can differ with Robert’s

A 21st century manager should consider serious change efforts in my organization. And in order to get everyone on board, he or she must ensure that the following concerns are addressed at Thor in the following steps:

To start with, beating communication breakdown should be his top priority at Thor. It is understood that people never want to be told that change is good till they understand the said change. As a leader, Thor manager must share the information plainly and completely as possible. It is clear that in the absentia of clear and factual communication, employees tend to come up with their own information concerning the announced change. As a result, rumours develop into facts. Thor will want a manager who can answer questions like:  what change is, the reason it is needed at Thor, the problem with the current situation at Thor, the rate at which Thor is expected to grow as an organization.

Secondly, after the information satisfies their concerns, the new manager should now start getting to the personal level and explain to them how the changes will affect them, because they will be eager to know the effects at personal levels.  There are several questions that most employees will be asking themselves concerning the change, like:  what do they need to change? Will they look good? Will they lose or win? Where is the time to implement these changes? Does the change require new skills? Can they really make it?

A 21st-century manager should understand that employees with personal concerns always want to know how the changes will affect them (Hage, 2002). It is normal for employees to focus on what they might lose before considering what they might gain, therefore, as a manager; one should ensure that he or she addresses these personal concerns because it’s believed that “whatever is resisted, will always persist.” Meaning if a manager don’t allow the employees to express and deal with their feelings about the current situation, their feelings will stay around always.

Furthermore, after addressing the first two concerns effectively, the manager must ensure his employees will be willing to hear the info on the details involved in the change implementation. This is where the manager will plan his action, they will, therefore, be interested in the changes as well as information on where they can seek technical assistance and solution to the arising problems (Jones, 2007).  As the manager, one must be prepared to answer questions like: what can be done first or second? What happens when things don’t work as planned? How is it possible to manage all these details? Where can one find help? How will the changes affect organizational systems and structure? Is what we will experience typical?

The manager must ensure he sell the change. When a manager has done a good job, it is at this stage that employees at Thor will sell themselves on the change benefits based on relative merits of the results to be achieved. He must also be ready to share the organization’s early wins and proof that the changes are making a positive difference. In the case where the changes don’t positively impact results, it will be more challenging to maintain the change initiatives moving forward (Lewis, 2000).

For the future of Thor the change in management will bring about various benefits that will boost the image of the company both in terms of production and sales. Firstly, before the implementation, the benefits of the change will be known and will serve as the motivators and progress assessment (Sheth, 2002). Furthermore, Thor will be able to respond quickly to the demands of customers as well as helping to align existing resources at Thor. The change will also be instrumental in increasing the performances of the employees when they understand the processes of change. Lastly, the change will bring about the creation of opportunities for the development of leadership and team development.

In the shipping division, the employees are going to be fully aware of the required increased returns on investment made. Secondly, the change will bring about reduced and efficient shipping costs; also, the time needed for the implementation of shipping regulations will reduce drastically since my change will aim at saving time (Negandhi, 2006). Lastly, the shipping division will have the ability to anticipate shortcomings and respond to them in a most efficient way without affecting other divisions of Thor.


It is therefore evident that when change in management is effectively conducted, an organization undergoes rapid changes. When Robert realised that the prevailing business environment in 80s and 90s could not favour his management style, he swiftly changed to theory Z. This further improved the performances of Thor. The shipping division had its share of effective change as well, thus suggesting that, each organizational unit experiences significant improvements upon implementation of appropriate organizational theory.


  1. Jones, G. (2007). Organizational theory, design, and change (5th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
  2. Ouchi, W. (2008). Theory Z: How American business can meet the Japanese challenge. Reading, Mass.: Addison-Wesley.
  3. Negandhi, A. (2006). Modern organizational theory; contextual, environmental, and socio-cultural variables,. Kent, Ohio: Kent State University Press.
  4. Sheth, J. (2002). Global organizational theory perspectives. Cincinnati, Ohio: South-Western.
  5. Hage, J. (2002). Theories of organizations: Form, process, and transformation. New York: Wiley.
  6. Lewis, J. (2000). Excellent organizations: How to develop & manage them using Theory Z. New York: J.L. Wilkerson Pub.

ORG 589-Turning Great Strategy into Great Performance