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  • 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. 

  • Intensive technology – Reciprocal task interdependence

    In the last blog, we looked at long-linked technology and the task interdependence associated there with. In today’s blog we look at intensive technology and the nature of task interdependence. 
    Intensive technology generally comes with a lot higher complexity compared to the long-linked technology. The scope of the task is much task is much higher that an individual’s capacity to transform things; it mandates exchange of information between the people working on the task while performing it. 
    Let us take an example of restaurant to understand the scenario at hand better. The kitchen staff waits for the wait staff to provide orders, and the wait staff is dependent on the kitchen staff to provide meals prepared to the customer’s satisfaction. The situation becomes even more complex when we take the situation of a surgeon at work.  The surgeon needs to continuously exchange information with the anesthesiologist, assisting doctors and nurses while performing the operation. 
    We see that in addition to the existence of pooled and sequential task interdependence, we find a new type of task interdependence called – reciprocal task interference. We could diagrammatically understand this through the image shown below.
    The primary difference between the sequential and reciprocal task interdependence is that while long-linked technology involves work flow in a single direction, but the intensive technology has complementary work flows. “Mutual adjustment” becomes extremely essential to the operation of intensive technology on the parts of the individuals and units involved due to the reciprocal nature of their task interdependence. 
    Extreme mutual adjustment mandates the requirement of team work. In teamwork, work inputs to the transformation process are simultaneously acted upon by members of the work team, rather than passing inputs back and forth as in the case for less intensive forms of reciprocal task interdependence. The second example of surgical process is an example for this.

  • Long-linked Technology – sequential interdependence

    In the last blog, we looked at the realign between mediating technology and the related task interdependence – pooled task interdependence. In today’s blog we look at the long-linked technology and the related task interdependencies. 
    To begin with, let’s take an example of assembly line. We sometimes see that there are lots of functions operators can perform independent of one another. So the different lines are pooled in the sense that their outputs are aggregated into the total output of the organization – this is an example of pooled task interdependence. 
    In another situation, we see that within a production line, we see that each worker is dependent on the work of the others located at positions prior to theirs in line; this means that there is a sequential dependence of the tasks – this is called sequential task interdependence. This can be visualized as shown in the diagram below. 
    Such sequential task interdependence requires more planning and scheduling than pooled interdependence. Getting back to the context defined earlier, we would   need to design tasks and assign workers and schedule to work together in order for the assembly line to work properly. Any break in the line can interrupt production, careful planning of tasks and scheduling of workers is imperative. Rules and procedures are also necessary and these don’t need any explanation.

  • Mediating Technology – task interdependence and coordination

    In the last blog, we looked at the relation between Technical complexity, Uncertainty and Routineness. In today’s blog, we begin the discussion on relation between task interdependence and mechanism of Coordination.
    Thompson recognized that the objects being processed or the work processes of a technology may be interrelated so that changes or problems in one part of the technical system affect other parts. This is defined situation as task interdependence.
    In this blog, we look at specifically at mediating technology. To understand this, let’s take the example of a bank.
    Bank employees mediate between borrowers and savers or investors. The mediation cab is accomplished simultaneously by several bank branches that operate independently of one another.  Little direct contact is needed between the various units. In such cases, the output of the organization is simply the sum of the efforts of each unit. – This is called “pooled task interdependence“. 
    We could visualize this as shown in the diagram below.
    Another interesting point to note is that, if the organization wishes to achieve a coherent organizational identity or ensure services are consistent across units, this can be achieved by setting up and following rules and standard procedures.

  • Technology Complexity, Uncertainty and Routineness

    In the last blog, we discussed about the technology imperative and how it affects the structure of an organization. In todays blog, we look at how technical complexity, uncertainty and routiness are related.
    Woodward’s study indicated that both unit and continuous processing technologies are associated with low routineness while mass production technologies have high routineness. Thus the relationship between routines of work and technical complexity takes the form of an inverted U. The following diagram indicates the same. 
    We could represent Perrow’s two dimensional topology of technology into once single dimension of routiness as shown in the following diagram. 
    The above 2 diagram shows how both the topologies link technology and social structure in terms of routines and non-routinesss of work.