MS 25 Question 2

Question 2 Describe various emerging organizational forms and structures and their advantages and disadvantages. Discuss with reference to your organization or an organization you are familiar with which requires restructuring. What type of structure do you choose and why? Describe the relevance of it.

TYPES OF ORGANIZATION

HORIZONTAL ORGANIZATION
Horizontal organizations consist of teams which are organized around business processes and which are responsible for the results they generate. By flattening portions of the organization and holding the team members accountable for results, it asserts that decisions will be made more quickly and more consistently with business objectives. This tool seeks to reduce problems with cross-functional coordination by ensuring that the team members have the necessary skills to have end-to-end accountability for the process.
Approach
The following steps are critical to creating a horizontal organization:
Organize teams around the most critical business processes.
Give team members ownership of the process and assign a clear process leader.
Cross-train team members for the range of skills needed for their process.
Tie performance measures directly to customer requirements for the process, and reward individuals for individual and team contributions.
Create career development paths consistent with developing team consistent with developing team skills.
Redefine managers' roles to focus on enabling teams to perform through training, coaching, sharing, information, and setting strategic direction.
Benefits
Horizontal organizations are often used to structure processes which requires extensive cross-functional coordination. This tool increases the responsiveness and productivity of an organization. Additionally, horizontal organizations can be used to balance local and global needs within a multinational corporation by creating a network linking the disparate operations.
[these types of organization structure are still very popular with the
''brick and mortar '' type of manufacturing / marketing cos.
these organization are visible and can be seen in types like
-product divisions
-business divisions
-geographical divisions
-functional divisions
etc etc
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virtual organization

A virtual organization or company is one whose members are geographically apart, usually working by computer EMAIL and GROUPWARE while appearing to others to be a single, unified organization with a real physical location.

But there is more to virtual organizations then simply replacing the location where people work.
What makes a virtual organization different?
It removes many barriers - especially that of time and location.
It emphasizes concentrating on new services and products, especially those with intensive information and knowledge characteristics, rather than concentrating on cost savings made possible by removing the barriers.
It goes beyond outsourcing and strategic alliances and is more flexible in:
that it has continuously changing partners,
the arrangements are loose and goal oriented,
emphasizes the use of knowledge to create new products and services,
its processes can change quickly by agreement of the partners.
What are the steps to a virtual organization?
Often the steps here go through:
outsourcing mainly to reduce costs where there is some experience in working at a distance, but three is one dominant party and high certainty of what everyone must do.
forming strategic alliances to share the work and gain experience in developing and sharing common goals. Here there is no dominant party although the parties are fixed. and
then becoming virtual organizations to achieve flexibility. Now the partners themselves can quickly change, with greater emphasis on the use of knowledge to create new and innovative products.
Why virtual?
What are the reasons for organizations becoming virtual. These include:
Globalization, with growing trends to include global customers,
Ability to quickly pool expert resources,
Creation of communities of excellence,
Rapidly changing needs,
Increasingly specialized products and services,
Increasing required to use specialized knowledge

[these types of organization structure are becoming very popular with the
''SERVICE '' type of cos.
these organization are visible and can be seen in types like
-insurance
-financial
-consulting
-professional services
etc etc
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INVERTED PYRAMID

Many of today's leaders view their organization as a pyramid, with senior leadership atop the apex, disseminating orders and snapping the proverbial finger expecting immediate responses. Below him or her reside lower echelon leaders and workers organized in subordinate tiers.

This construct is irrespective of your organization's size. If you want to succeed you need to get to the top. Your organization then succeeds because you pulled them to victory.

This perception of leadership has been the norm in nearly every military, governmental and civilian organization.

We grew up in it, we're comfortable with it and we expect to lead in the same structure. Control often rests with one individual. Leaders view workers as personnel to be positively or negatively persuaded to achieve the desired goals of the unit or organization.

THIS ABOVE IS A PYRAMID STRCUTURE.

Consider for an instant, a notion that subordinate tiers are not meant to be supporting of those above them, but instead supported by those placed in leadership positions below them. Envision the organizational pyramid inverted.

The leader stands at the bottom of the organization, supporting those who actually make the mission happen. In this organization the leader doesn't ask, "What are you doing for me?" but instead correctly queries the subordinate, "What can I do to help you?" or "What do you need to be successful?"

This simple variation of a leader's perspective creates an enormous difference in a leader's efficacy. The subordinate, doing the work, is empowered with the resources and the freedom to make the best decision for the particular process or task assigned to them. The individual now thrives in the environment where they are entrusted to make their process, system or task more effective. The organization's leader is successful because his or her personnel push, pushed the unit and its mission to achieve its goals.


To dispose of this misconception, visualize a leader pivoting the inverted pyramid around its point. The leader's actions project a new direction for the top or base of the pyramid. This shift in orientation is the leader's vision. He or she projects the desired course for the unit but the organization itself finds the most effective means and completes the journey.

THIS IS THE INVERTED PYRAMID STRUCTURE.
[these types of organization structure are popular with the
''DIRECT MARKETING '' type of cos.
these organization are visible and can be seen in types like
-COSMETIC DOOR TO DOOR SELLING.
-DOMESTIC APPLIANCES DOOR TO DOOR SELLING
etc etc
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Boundaryless Organization:
What are the boundaries?
Vertical - Boundaries between layers within an organization
Classic Example: Military organization
Problem: Someone in a lower layer has a useful idea; "Chain of command" mentality
Horizontal - Boundaries which exist between organization functional units.
Each unit has a singular function.
Problem: Each unit maximize their own goals but not the overall goal of the organization
External - Barriers between the organization and the outside world (customers, suppliers, other government entities, special interest groups, communities).
Customers are the most capable of identifying major problems in the organization and are interested in solutions.
Problem: Lose sight of the customer needs and supplier requirements
Geographic - Barriers among organization units located in different countries
Problem: Isolation of innovative practices and ideas
What is a boundaryless organization?
One that makes all of these barriers much more permeable than they are now; loosen boundaries
Let information/ideas/resources/energy flow throughout the organization and into others.
Can an organization be completely boundaryless? No -- there will always have some hierarchy, functional divisions, geographic boundaries, limits between organization


BENEFITS

Quick Market Intelligence - direct customer feedback .
SPEEDY New Product Introduction.
RAPID Advanced Manufacturing Techniques.
Quality initiatives .
Quality focused CULTURE
OPERATION Benefits
Speed
Flexibility
Integration
Innovation

[these types of organization structure are with the
'' IT COS '' type of SOFTWARE/ SOLUTIONS cos.
these organization are visible and can be seen in types like
-IT
-ITES
-BPO SERVICES
etc etc
===================================================
Matrix structure

Different structures can be combined together. When one has two parallel
organizational structures this is called a matrix structure. The idea is to combine the
advantages of two structures, but this has the obvious disadvantage of being harder to
coordinate and introducing more potential conflict.
In the past most large companies were centralized – that is, involved structures in
which decisions were taken at the centre or upper levels of organization. Just as there
has been a move to flatter organizations, so there has been a move to decentralized
ones.
**MATRIX STRUCTURE
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
Increases power conflicts
Increases confusion & stress for 2-boss employees
Impedes decision making
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MECHANISTIC ORGANIZATION
mechanistic organizations are often appropriate in stable environments and for routine tasks and technologies. In some ways similar to bureaucratic structures, mechanistic organizations have clear, well-defined, centralized, vertical hierarchies of command, authority, and control. Efficiency and predictability are emphasized through specialization, standardization, and formalization. This results in rigidly defined jobs, technologies, and processes. The term mechanistic suggests that organizational structures, processes, and roles are like a machine in which each part of the organization does what it is designed to do, but little else.

The term "organic" suggests that, like living things, organizations change their structures, roles, and processes to respond and adapt to their environments. Organic structures are appropriate in unstable, turbulent, unpredictable environments and for non-routine tasks and technologies. For organizations coping with such uncertainty, finding appropriate, effective, and timely responses to environmental challenges is of critical importance. Organic organizations are characterized by:
decentralization
flexible, broadly defined jobs
interdependence among employees and units
multi-directional communication
employee initiative
relatively few and broadly defined rules, regulations, procedures, and processes
employee participation in problem solving and decision making, often interactively and in groups
#######################################################################

Discuss the strategies adopted for organizational restructuring in an organisation you are familiar with. Discuss reasons for organizational restructuring?
The organization, I am familiar with is a
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
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The above company ,initially, operated as a market structures company.
As the company added more technical products, it became necessary
to re-organize the company.
-we conducted customer survey.
-we conducted an in-house operation audit.
-we conducted HR audit.
BASED ON THE FINDINGS, WE REVIEWED THE FOLLOWING

Basic Characteristics of Organizational Structure
Division of labor: dividing up the many tasks of the organization into specialized jobs
Hierarchy of authority: Who manages whom.
Span of control: Who manages whom.
Line vs staff positions
Decentralization
Hierarchy of Authority
Tall vs flat hierarchies
Autonomy and control
Communication
Size
Span of Control
A wide span of control: a large number of employees reporting,
A narrow span of control: a small number employees reporting
The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.
Line vs Staff Positions
Line vs Staff:
Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.
Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service
Decentralization
The extent to which decision making is concentrated in a few people or dispersed through out the organization
Advantage: benefits associated with greater participation and moving the decision closest towards implementation
Disadvantage: Lack of perspective and information, lack of consensus

Integration
Hierarchy of authority
Liaison roles
Teams, committees, task forces
Standardization & formalization
Mechanistic & Organic Designs
Mechanistic: tallness in hierarchy, specialization, centralization in authority, formalization. Work best under stable conditions
Organic: flatness, generalization, decentralization flexibility Best fit dynamic conditions and complex technology
Effectiveness Criteria
Output approach
Internal process approach
Systems resource approach
Stakeholder approach
Effectiveness & Structure
Size and structure
Complexity
Differentiation
Decentralization
Formalization
Structure and satisfaction
Decentralization
Span of control
Backwards & Forwards
Summing up: we examined the characteristics of organizational structure, differentiation and coordination. Mechanistic and organic designs were discussed and organizational effectiveness.
==============================================================
BASED ON THE TOTAL FINDINGS, WE DECIDED ON A
-PRODUCT GROUP BASED '' MATRIX'' STRUCTURE. THIS STRUCTURE
GAVE THE COMPANY
-better / effective coordination with R&D.
-better / effective cooperation with SALES TEAM.
-BETTER CUSTOMER SERVICE ON TECHNICAL PRODUCTS.
###########################################################
2. Describe any two types of interventions and their use in bringing organizational change. Discuss with reference to your organization or an organization you are familiar with where change has taken place and the intervention used. Briefly describe the organization you are referring to


OD INTERVENTIONS DO CREATE BOTH POSITIVE
AND NEGATIVE IMPACT.

THIS IMPACT IS CREATED BY THE CHANGE.

THOSE WHO SHOW THE NEGATIVES,

often show behaviors like
-BECOME LESS PRODUCTIVE
-LACK OF INTEREST IN THE JOB.
-DEMOTIVATED
-argue
-blame
-criticise
-avoid communication
-delay everything
-provide lots of exccuse
-sulk
-resign / go
-show indifference
-tension
-show outbursts
-remain silent
-sarcastic remarks
-show inflexibility


People react negatively due to
-reduction in responsibility
-reduction in authority
-dent in pride
-loss of contact with important people
-loss of freedom
-loss of good working conditions
-loss of status
-feels there is no need to change
-no need for change
-bring more harm then good
-lack of consultation
-creates more burden
-could not provide any input.
-requires extra effort without reward.
-poor timing
===============================================
THOSE WHO SHOW THE POSITIVES,

often show behaviors like


-ARE MORE PRODUCTIVE
-MORE MOTIVATED
-TAKE GREATER INTEREST IN THE JOB.
-asking questions about change
-listen intensively
-analyse the situations
-compromise
-agree
-make decisions
-discuss openly
-find alternative solutions
-show creative problem solving
-take action
-show optimism
-cooperate
-show enthusiasm
-make action plans



People react positively due to

-more responsibility
-added authority
-gain in status
-more contact with important people
-more freedom
-gain good working conditions
-gain in prestige
-feels the need to change
-desire for change
-bring more good
-gains more respect
-creates more satisfaction
-could provide input.
-good timing for change
-a new challenge
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INTERVENTIONS /CHANGES AND COMMUNICATION

The following steps will help you to minimize resistance:

1.Explain why. Provide all the facts about the reason for changing. If there are risks, acknowledge them but explain why the risk is worth taking.

2.Objectively explain the benefits that could result from the change.

3.Seek questions/clarifications and answer them.

4.Invite participation and ask for suggestions because the people involved know the situation best.

5.Avoid surprise because this stirs unreasoning opposition more than any other factor.

6.Acknowledge the rough spots and explain how you plan to smooth the change.

7.Set standards and explain your expectations.

8.Contact the informal leaders and use their resources.

9.Acknowledge and reinforce the staff's co‑operation and give them feedback on the progress.

10.Keep the two way communications open for suggestions and corrections.

==================================

======================================================================
WHEN YOU MAKE OD INTERVENTION IN YOUR ORGANIZATION,
IT SHOULD INCLUDE '' CULTURE CHANGE'' .

HERE IS A SIMPLE APPROACH/GUIDELINE FOR Creating Culture Change

1. Establish a sense of urgency
Communicate the business situation or reason for implementing the culture change —why is it necessary?
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2. Create the guiding coalition
Establish a team with the knowledge to initiate change and the power to make the change happen.
------------------------------------------------------------------
3. Develop a vision and strategy
Develop the organization ’s vision for the change and the strategies for implementation.
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4. Communicate the change vision
Share the vision and how it will affect the participants
-----------------------------------------------------------------------------
5. Empower broad-based action
Give the CHANGE team the authority to initiate the changes
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6. Generate short-term wins
Work with the practice groups that are mostly likely to
accept THE CHANGE and celebrate their achievements
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7. Consolidate gains and produce more change
Use success to create more success.
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8. Anchor new approaches in the culture
Make the CHANGE initiatives a part of the daily work process of the firm.
============================================================
THE MOST IMPORTANT POINT TO NOTE IN CHANGING ''CULTURE''
IS THE ''TRANSITION'' .

WHY? because transition occurs in the course of every attempt at change.

Transition is the state that change puts people into.
The change is external (the different policy, practice, or structure that the leader is trying to bring about),
while transition is internal (a psychological reorientation that people have to go through before the change can work).

A Method to Managing Transition

Although the details of a transition management plan are unique to each situation, the adviser must help a leader with the following essential steps:
Learn to describe the change and why it must happen, and do so succinctly -- in one minute or less. It is amazing how many leaders cannot do that.
Be sure that the details of the change are planned carefully and that someone is responsible for each detail; that timelines for all the changes are established; and that a communications plan explaining the change is in place.
Understand (with the assistance of others closer to the change) just who is going to have to let go of what -- what is ending (and what is not) in people's work lives and careers -- and what people (including the leader) should let go of.
Make sure that steps are taken to help people respectfully let go of the past. These may include "boundary" actions (events that demonstrate that change has come), a constant stream of information, and understanding and acceptance of the symptoms of grieving, as well as efforts to protect people's interests while they are giving up the status quo.
Help people through the neutral zone with communication (rather than simple information) that emphasizes connections with and concern for the followers,. To keep reiterating the "4 P's" of transition communications:
The purpose: Why we have to do this
The picture: What it will look and feel like when we reach our goal
The plan: Step-by-step, how we will get there
The part: What you can (and need to) do to help us move forward.
Create temporary solutions to the temporary problems and the high levels of uncertainty found in the neutral zone. For example, one high-tech manufacturer, when announcing the closing of a plant, made interim changes in its usual reassignment procedures, bonus compensation plans, and employee communications processes to make sure that displaced employees suffered as little as possible, both financially and psychologically. Such efforts should include transition monitoring teams that can alert the leader to unforeseen problems -- and disband when the process is done.
Help people launch the new beginning by articulating the new attitudes and behaviors needed to make the change work -- and then modeling, providing practice in, and rewarding those behaviors and attitudes. For example, rather than announcing the grandiose goal of building a "world-class workforce," leaders of transition must define the skills and attitudes that such a workforce must have, and provide the necessary training and resources to develop them.


Checklist for change management
Give maximum warning of the change
Explain the reasons
Involve people in the plan and implementation
Communicate, communicate, communicate
Introduce gradually with activities which will show quick results
Training orientation - offer people the chance to develop new, relevant skills
Sell benefits - "what's in it for them" matter more than the organisation!
Take the present situation into account
Always remember the effects on individuals, think of the change curve
Check on how individuals are coping and remember to support them!
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MODEL FOR CHANGE [ Trying to influence your own mind]

1.Study the nature of the INTERVENTION / change.

2.Monitor the external factors that are positive on change
and negative impact on change.

3.Study the reasons for change / benefits.

4.Identify the positive reasons, such as challenge/opportunities
/ benefits.

5.Prepare a tentative plan.

6.Analyze the probable reactions.

7.Prepare a carefully constructed , cohesive plan.

8.Establish the time table.

9.Identify means to overcome obstacles / short comings.

10.Create a clear picture of future situation.

11.Implement your plan.
12. Keep evaluating the change program.


MODEL FOR CHANGE [ Trying to influence others]
1.Explain the reason for change with facts. If there are risks ,
acknowledge them but explain why it is worth taking the risks.

2.Objectively explain the benefits that could result from the
change.

3.Get ready and sell the benefits at all times.

4.Anticipate objections.

5.Listen in depth.

6.Seek questions and clarifications / answer them.

7.Invite participation and ask for suggestions .

8.Avoid surprise because this stirs up unreasoning opposition.

9.Acknowledge the rough spots and show you plan to
manage them.

10.Establish a timetable.

11.Set standards and explain your expectations.

12.Contact the informal leaders and use their resources.

13. Acknowledge the staff cooperation / support.

14.Provide feedback on the progress.

15.Reinforce the positive .
16.Keep the two way communication open.
============================================

CASE ONE

The organisation I am referring to, where we
introduced ERP software for managing the supply
chain management system, with the objective of
-improving the efficiency
-improving the effectiveness
of the supply chain operation.

The organization, I am familiar with is a
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
==============================================
HOW did we INITIATE CHANGE

Often it is easier to carry out a job if there is a specific plan to follow. When major changes are to be installed, careful planning and preparation are necessary. Strengthening the forces promoting the change and weakening resistance to it are the main tasks.

CREATE A CLIMATE FOR CHANGE

How people react to proposed changes is greatly influenced by the kind of climate for change that the manager/supervisor has created in the department.

HOW IS THE RIGHT KIND OF CLIMATE CREATED?

Supervisors and managers who have enthusiasm for progress and change build a healthy climate.

Creating the right climate is more than just passing on changes. It involves:

Encouraging employees to seek ways of improving their jobs.

Seeking suggestions and ideas from employees.

This requires the manager/supervisor to listen and seriously consider suggestions. It is easy to see that there is a great deal of ego involvement in coming forth with an idea for improvement. Change can become an exciting and dynamic way of life. The manager/supervisor determines the climate in which they initiate change.
GET READY TO SELL

Much of the difficulty in getting co‑operation stems from the employees lack of understanding of how the change will affect them. With a little effort, managers/supervisors can find most of the answers to employees' questions before they are even asked. Answers to these questions would be useful.

What is the reason for the change? Whom will it benefit and how? Will it inconvenience anyone, if so, for how long? Will training or re‑training be necessary? When does it go into effect?

Armed with the answers to these questions a manager/supervisor can head off many objections and can develop a plan to present the change.

IDENTIFY THE SOURCES OF HELP

Why should you, the managers and supervisors, shoulder the burden alone? Staff can frequently be a great help in preparing to sell a change by explaining technical aspects and demonstrating new techniques.

One of the most overlooked sources of help in introducing changes are the informal leaders in the work group. With their help the job becomes easier. Giving recognition to informal leaders puts them in a co‑operative frame of mind.

Since union stewards are often informal leaders, their co‑operation ought to be solicited. The backing of union stewards makes the job easier.
ANTICIPATE OBJECTIONS

Change that upsets routines, requires new knowledge or skills, or inconveniences people are bound to meet with some objections or resistance. Looking at a change from the employees point of view will usually be enough to help determine what their objections are likely to be. Knowing the objections, we can, with a little creative thought, turn these objections into advantages.

Showing the staff with reason or logic will not do the job. Managers/supervisors have to convince people that the change is really best for them and that will not happen until their objections are dealt with seriously.

SELL BENEFITS

Everyone is concerned with, "What's in it for me?"

"Will the change mean more satisfying work. greater security. opportunity to show what I can do. more responsibility. more pay. less fatigue. less confusion. greater independence?"

The benefits used to motivate people to co‑operate should be put on as personal a level as possible. It would be dishonest, however, not to recognise any disadvantages that a change may bring. These can usually be countered with long range benefits.

One of the techniques that is helpful in identifying the characteristics and values of the proposed changed condition is a "Word Picture". The picture makes the new condition desirable in the minds of the staff.

A)One of the ways this concept of "word picture" is used, is the physical change in office layout or new equipment or any other physical changes.
B)To picture or model a change in policy, organization or operation is more difficult than the physical change. The principle is the same. The picture can help in communicating the desirability of the change and in fine tuning the change because it makes it possible to discuss how things will operate. It may take the form of a flow chart, an organization chart or a description of relationships.

To use this approach for deciding whether to initiate a change, you can take the following steps:

Describe as clearly as possible the present situation.

Describe as clearly as possible the desired situation.

Analyse what specific changes will have to take place in the key factors involved to produce the desired situation. Look at such key factors as bosses, employees, equipment, physical environment, policies and procedures, work methods, materials and time. Identify the relevant factors.

Assess the strengths of the forces promoting the desired situation and of those resisting it.

Determine what action to take. Choices are:

A)Do nothing, the resistant forces are stronger than the forces promoting change.

B)Act to strengthen the promoting forces and/or to weaken resistance, by concentrating one's efforts on the key factors.
LISTEN IN DEPTH

Employees have a right to be heard. If employees are treated with respect, they probably will respond in kind. They will feel better too, if they know their concerns have been considered.

FOLLOW‑UP

After having conscientiously sold the benefits of a change, it is tremendously important that the managers/supervisors see that their promises have materialized. A sincere interest in how the change has affected the employee and a willingness to make adjustments, help build the climate in which future changes will be initiated.

AS A MOTIVATION, WE INTRODUCE AN INCENTIVE SYSTEM,
WHERE ALL MANAGERS/ STAFF WOULD GAIN A BONUS
OF 50% OF THE PRODUCTIVITY GAIN DURING THE FIRST
2 YEARS OF IMPLEMENTATION.
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CASE TWO

As this is a company, which manufactures/ markets technical
products, the management decided to train every staff member
in the features/ benefits/ applications of all the core products.

-the company used the ''intranet'' to provide the knowledge.

-the staff were guided through a classroom session initially.

-the course was self study.

-for any clarifications, the staff could approach the respective product manager.

-the staff were given a monthly test --online.

-at the end of the sixth month,

THE TOP 10 SCORERS WERE OFFERED A SHORT HOLIDAY,
ALL EXPENSES PAID BY THE COMPANY.
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