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Category: Organizational Development ವ್ಯವಹಾರಿಕ ಉನ್ನತಿ

  • Organization Processes at Evolutionary stages

    In the last blog, we looked at the last of the 5 phases – Collaboration. In today’s blog, we intend to provide a summary of the management processes of the organization across 1the various phases.
    The diagram below provides the summary.
    Org Processes at Evolutionary Stages

  • Interpersonal collaboration & organization

    In the last blog, we discussed about the phase of coordination understanding the characteristics of the evolutionary scenario there in and the following revolution. In today’s blog, we look at what the revolutionary phase leads to and what would characterize the evolutionary stage there in.
    Phase 5: Collaboration
    The red tape crisis of the earlier coordination phase begins to slowly open up into a more inter-personal collaboration phase. The phase generally composes of temporary teams that work on projects with spontaneity. Social control and self-discipline replace the formal control mechanisms of the earlier phase. 
    All is not rosy at this stage; the transition would be extremely difficult for those experts who created the old systems as well as for those line managers who relied on formal methods for answers. The characteristics of this phase include:

    • The focus is on solving problems quickly through team action
    • Teams are combined across functions for task-group activity
    • Headquarters staff experts are reduced in number, reassigned and combined in interdisciplinary teams to consult with, not to direct, field units.
    • A matrix-types structure is frequently used to assemble the right teams for the appropriate problems
    • Previous formal systems are simplified and combined into single multipurpose systems
    • Conferences for key managers are held frequently to focus on major problem issues
    • Educational programs are initiated to train managers in behavioral skills for achieving better team and conflict resolution
    • Real-time information systems are integrated into daily decision making
    • Economic rewards are geared more to team performance than to individual achievement
    • Experiments in new practices are encouraged throughout the organization

    The possible revolution that follows this evolutionary phase hasn’t been well documented so, we wouldn’t really discuss about these at the moment.

  • Collaboration phase of Organization Growth

    In the last blog, we discussed about the organization development phase of Delegation and the associated characteristics along with the build up to the next revolution. In today’s blog we look at the next phase – Coordination.
    Phase 4: Coordination
    The top-management which had a lot of issues in the delegation phases achieves control over the organization’s functioning in this Coordination phase. The evolutionary period of this phase would be characterized by the following:

    • Decentralized units are merged into product groups
    • Formal planning and procedures are established and intensively reviewed
    • Numerous staff personal are hired and located at headquarters to initiate company-wide programs of control and review for line managers
    • Capital expenditures are carefully weighed and parceled out across the organization
    • Each product group is treated as an investment center where return on invested capital is an important criterion used in allocating funds. 
    • Certain technical functions, such as data processing are centralized at headquarters, while daily operating discussions remain decentralized
    • Stock options and company-wide profit sharing are used to encourage identity with the firm as a whole.

    These coordination systems enable the organization grow efficiently allocating a company’s limited resources. The field manager begins looking beyond the local unit needs. They still enjoy much of the decision making authority, but they would have to justify their actions to the headquarters. This smooth sailing begins to rock when the lack of confidence begins to creep in. 
    The lack of confidence would be between the line and staff and between headquarters and the field. The proliferation of system and programs being to exceed its utility – a red tape is created. A lot of paper work is seen as highly bureaucratic. Procedures take precedence over problem solving, and innovation takes a backseat. The organization would have at the time of the next revolution become larger and complex to be managed through such rigid processes and formal programs. 
    The next phase following this revolution is that of Collaboration

  • Delegation – Organization Development phase

    In the last blog, we looked at the “Direction” phase of a phase in the development of an organization. In today’s blog we look at the next phase of Organization Development – Delegation. We understood from the last blog, that the struggle for more responsibility at lower levels of the organization leads to the process of delegation. At this juncture, the company could grow only if a good amount of delegation is in place. 
    We begin today’s blog from the point of such delegation. As the phase “evolves” we find that:
    • Much greater responsibility is given to the manager of the plants and market territories.
    • Profit centers and bonuses are used to stimulate motivation
    • The top executives at headquarters restrain themselves so managing by exception, based on periodic report from the field.
    • Management often concentrates on making new acquisitions which can be lined up beside other decentralized units
    • Communication from the top is infrequent, usually by correspondence, telephone, or brief visits to the field locations.

    Such delegation enables the company expands through enhanced motivation at lower levels. The decentralized managers are able to penetrate larger markets, respond faster to customers and develop new markets.
    But
    This growing delegation to the lower levels sows the seeds of the next revolution. The top management begins to sense a loss of control. The highly diversified operations are akin to the field managers running their own show with little to no concern for coordination, money, and technology and man power with the rest of the organization!
    The top-management attempts to regain control over the total company. A return to centralized top-management at this stage is not an option. The companies that really move ahead are the companies which would have to find a new solution in the use of special coordination techniques.

  • Direction as an organization development Phase

    In the last blog, we began our discussion on the various phases in an organizational development and discussed the phase of creativity in particular. In today’s blog we look at the next phase of organization development – Direction and its accompanying evolution characteristics and the revolution that could happen.
    Phase 2: Direction
    At the end of Phase 1, the companies would have installed an able manager at the helm of affairs. What follows would be a period of sustained growth under able and directive leadership. The duration may vary but the characteristics are:
    • A functional organization structure is introduced to separate manufacturing from marketing activities and job assignments get more specialized
    • Accounting systems for inventory and purchasing are introduced
    • Incentives, budgets and work standards are adopted
    • Communication becomes more formal and impersonal as hierarchy of titles and positions builds
    • The new manager and his key supervisors take most of the responsibility for instituting directions, while lower level supervisors are treated more as functional specialists than as autonomous decision making managers.

    These changes channel employee energy more efficiently into growth, they eventually become inappropriate for controlling a larger more diverse and complex organization. The lower-level employees find themselves restricted by a cumbersome and centralized hierarchy. They have come to possess more direct knowledge about market and machinery than do the leaders at the top. Consequently they feel torn between following procedures and taking initiatives on their own. 
    At this stage, the 2nd revolution is due – It comes from the demand for autonomy from the lower-level managers. Most companies move towards greater delegation to handle such a scenario. The challenge lies in the top management who by this time is accustomed to being directive to give up responsibility. The lower-level managers are not yet accustomed to taking independent decisions. 
    If Companies at this point choose to stick to old control mechanisms, they are bound to lose the race with most of the lower-level employees leaving the organization.

  • Phases of organization growth – Creativity (Ph 1)

    In the last blog, we concluded the initial discussion on the dimensions affecting the organizational development. From today’s blog we begin a new discussion on the phases of organizational growth. The basis of this brief discussion is still the same source – Evolutions and Revolutions as organizations grow by Prof Larry E Greiner.
    Building on the understanding of the various phases of organizational development, when we analyze the growth of companies over a relatively long period of time, we could categorize the phases of growth into the following phases:

    • Creativity
    • Direction
    • Delegation
    • Coordination
    • Collaboration

    It is important to note that, each phase is both an effect of the previous phase and a cause for the next phase. The principal implication of each phase is that management actions are narrowly prescribed if growth is to occur. 
    We shall understand each of these phases beginning with Creativity today and continue through the week. 
    Phase 1: Creativity
    Organizations when they begin have 2 primary areas of emphasis – creating the product, creating the market.
    The characteristics of this period include

    • Company’s founders are usually technically or entrepreneurially oriented and don’t focus on the managerial activities.
    • Communication amongst employees is frequent and informal
    • Work is generally for long hours but rewards are modest salaries. There would be promise of ownership benefits
    • Control of activities comes from immediate market place feedback – “management acts as customer reacts”

    While all this is the daily happening, there is something lurking in the horizon – a potential leadership crisis. As the organization scales up, the range of activities widen requiring an entirely different mindset to handle these. The founders who love their freedom and creativity find them burdened with unwanted management responsibilities. The critical question now to answer is – who is to lead the company out of confusion and solve the managerial problems confronting it.
    The founders often hate to step aside even though they are probably temperamentally unsuited to be managers. The need would be to locate and install a strong business manager who is acceptable to the founders and who can pull the organization together.

  • Organization growth, evolution and revolution challenges


    In the last blog, we began looking at the 5 dimension that are important when considering organization development. We have covered 2 of these, and the remaining 3 are being discussed in this blog.

    • Stages of Evolution
    • Stages of Revolution
    • Growth rate of the company

    As a company grows from a start up phase the first few months are with enormous confusion, the managerial processes are generally evolving and the challenges are many. There are no defined rules, procesures etc. Once the organization lives through this face, it enjoys a period of stability till another challenge of growth and scale comes in. This mandates another change in the managerial processes of the company. Once this challenge is effectively handled out by the organization there will be  a longer phase of stability – the quiter periods. This is what is indicated by the term “evolution“.

    A look at the forture 500 list over the last 50 years would indicate definitely that companies in the first 10 years of this search would be very distinct from the once in the last 10 years. This is due to the turbulance these organizations face. The companies might have experienced a long stable period where it wouldnt have to change much of the organization structures and processes to address external challenges. However over a period of terbulance these would have to be changed, the challenge is to find new set of organization practises to handle the new challenges and prepare for the future. These turbulent times is what is meant by the term “revolution“

    The stage of the organization where the company is – revolution or evolution is also what defines what the organization structure is going to be.

    If a company is in a rapidly changing market then it has to be extremely agile. In a rapidly expanding market the comapny would have to respond by expanding the employee base. This leads to a requirement of a new organizational structure. The length of the evolutionary phase is shortened and the revolutionary phases are more common. Thus the growth rate of the company plays a significant role in the oragnization structure and processes and there by its development.

  • 5 dimensions affecting the organization’s growth

    In the last blog, we began our discussion on understanding how the organization grows, in today’s blog we look at the key forces that affect the organization development. We shall discuss 2 of these forces and the remaining in the next blog. 
    It has always been a hard call on whether the organization’s structure would define its strategy or is it that the organization’s strategy would define the organization strategy. Though each of these approaches could have a long and detailed discussion, to understand the way we look at the current blog, we would take the approach that it is structure plays a critical role in influencing corporate strategy. We can look at 5 key dimensions that are important in building a model for organization development, these are:
    1. Age of the Organization
    2. Size of the Organization
    3. Stages of Evolution
    4. Stages of Revolution
    5. Growth rate of the industry

    Let us begin looking at each of these dimensions:
    Age of the organization: 
    This is one of the most obvious of the dimensions that one can think of. A simple observation would clarify that the same organization practices are not maintained throughout a long time span. – Management problems and principles are rooted in time. The passage of time is also the factor that enables institutionalization of managerial attitudes.
    Size of the organization:
    A company’s challenges and theirs solutions tend to change a lot as the company scales up – both in terms of the number of employees and the sales volumes. Organizations that grow in size need to change their structure and management practices over a longer time frame. Along with the increase in size, come problems of coordination and communication, new functions emerge, levels in the management hierarchy multiply, and jobs become more interrelated.
    Let us continue the discussion in the next blog.

  • Growth of Organization – Evolution & Revolution

    In the last blog, we summarized the relation between technology and task interdependence. From today’s blog over the next few blogs we look at some of the theories that deal with the growth of an organization, these are mostly based on the HBR paper – “Evolution and Revolution as organizations of growth” by Larry E Greiner.
    The basic principle on which the growth of an organization could be predicted is that it is less determined by the environmental forces and more defined by the history of the organization! To understand the paper further, we would need to understand the 2 terms
    1. Evolution
    2. Revolution

    Evolution stands for a phase in the growth of the organization where no major upheaval has occurred. It is relatively a stable period.
    Revolution stands for a phase where substantial turmoil is felt in the organization. 
    The famous adage – what goes up comes down it something that could be related to in this scenario. Every Evolutionary phase would be creating its own revolution. The nature of the management solution is what would determine whether a company would move forward into the next stage of evolutionary growth.
    Let’s take an example to get this clearer – Generally start ups begin with a phase where entrepreneur is the central decision making authority. He/She works out most of the decisions to be taken regarding the company or the firm single handedly. As the company scales up, we begin seeing that the complexity of the decisions to be made would not be best decided by the entrepreneur. There needs to be a decentralization of these decisions to ensure that the company moves ahead smoothly.

  • Task interdependence and Technology summary

    In the last blog, we looked at intensive technology and reciprocal interdependence. In today’s blog we take a look back at all the various interdependence and technologies to get a comprehensive view of the topics discussed over the last 10 blogs.
    We could summarize the complete discussion on task interrelation and technology in the following diagram. 
    (based on Thompson)

    It is to be noted that task interdependence increases from pooled to sequential to reciprocal, mechanisms of coordination get added to the organization. Pooled interdependence only requires rules and procedures, sequential interdependence uses rules, procedures and scheduling. Reciprocal independence uses all these coordination mechanism and “mutual adjustment”.
    To provide an alternate view of what define the organizational structure we would like to take the focus on to what Galbraith has suggested. He claims that it is communication that shapes the organization structure. He also argues that technical complexity leads to structural complexity, uncertainty promotes organic forms, and interdependence increases demands for coordination, because these factors increase the communication load carried by organization. This in turn affects its structural form. Thus – technology is related to social structure through the mediating effects it has on communication.