Management Chapter 7 PDF

To get work “Done Well” an organization needs to identify all the tasks that need to be done to complete the “Right Work” we discussed in Part II of this textbook. Some of those tasks may be done by people outside the organi-zation (a process known as outsourcing) and some will need to be done by em...

To get work “Done Well” an organization needs to identify all the tasks that need to be done to complete the “Right Work” we discussed in Part II of this textbook. Some of those tasks may be done by people outside the organi-zation (a process known as outsourcing) and some will need to be done by employees within the organization. The tasks to be done inside the organization need to be assigned to individual employees who will be responsible for completing those tasks effectively and effi-ciently. How does an organization decide which tasks to assign to which people? That will depend to a great extent on the skills and experience necessary to perform those tasks. So, the organization will need to determine what skills and experience are necessary to complete certain tasks and then find qualified people to perform those tasks. The good news is that many of these tasks are common across organiza-tions and thus the skills needed to do these common tasks have already been iden-tified. In addition, the ways in which employees acquire those skills have become readily available. In some cases, those skills are acquired through specialized train-ing programs, or through attending a trade school or college. In other cases, the skills are acquired by working with a knowledgeable and experienced craftsperson in an apprenticeship role. Rarely, it may be necessary for someone to self-develop a completely new skill set (skills not seen before in an organization) in order to be able to complete the task properly. From a practical standpoint, the typical approach used to assign tasks to employ-ees is to design standard “jobs” around tasks that require a common set of skills. For example, a set of tasks that requires expertise in accounting may be grouped into an “accounting associate” job (or similar title). As organizations grow and become more complex, however, “jobs” often become more specialized. In our example of an “accounting associate”, it may be common to see a larger organization have spe-cialized accounting jobs such as “state tax specialist” or “fixed asset accountant”. These jobs require even more specialized skills and experience. The benefit to the organization is having employees who are highly skilled at performing specific tasks and thus can do those tasks very effectively and efficiently. The challenge for orga-nizations as jobs become more specialized, is to make sure those jobs are meaning-ful for the employees doing them. If jobs become too tedious or stressful, there is a risk that an organization will experience high turnover rates in those positions, or employees will become less motivated and productive. Consequently, there will be fewer people interested in doing those jobs making it more difficult to find qualified individuals and/or more expensive to attract them. Thus, it becomes important in designing jobs to find the balance between creating jobs that will be done effec-tively/efficiently and also provide meaningful work for employees doing those jobs. Job Design is creating jobs in an organization that can be done effectively and efficiently while providing meaningful work for the employee. LG 7-2 What are some key considerations of doing effective “Job Design”? From a practical standpoint, a job needs to be designed in such a way that it is reasonable for an individual to be able to perform that job successfully. In the early days of industrialization, the approach was to specialize jobs by simplifying the tasks to be done in order to design the job for maximum efficiency, while maintaining acceptable quality. Remember the “Scientific Management” approach we discussed in Chapter 2? As we learned from that chapter, the work often became monoto-nous and employees would become dissatisfied or experience other negative con-sequences from doing the same task over and over again. Two researchers, Hackman and Oldham did extensive studies on factors that affect workers and created the “Job Characteristics Model” to better explain how job design can impact employee satisfaction and job performance. The following chart describes this Model: Skill Variety is the extent to which a job requires a worker to use a wide range of different skills and abilities. Task Identity is the extent to which the job requires the worker to perform all the tasks needed to fully complete the task. Task Significance is the extent to which the job effects the lives of other people. Autonomy is the extent to which the employee is allowed to make choices about scheduling and how best to perform tasks. Feedback is the extent to which the employee receives clear and direct infor-mation on how well they are performing the task. The “Contingency Factors” are pre-conditions for the model to be predictive. If an employee does not have the necessary knowledge and skill to do a job, lacks the desire for personal growth and development, or is unlikely to derive any satisfac-tion from doing the sort of job they are being asked to do, then improving the Job Characteristics will not likely alter the employee’s Psychological State or lead to improved Work Outcomes. When the “Contingency Factors” are present, assessing employees’ satisfac-tion with their jobs by evaluating the extent to which employees are experiencing the three psychological states in the Model is key to understanding whether jobs have been designed to achieve ideal “Work Outcomes”. If the level of satisfaction is low, then evaluating the job characteristics described above to identify and pursue opportunities for improving them will help to achieve better “Work Outcomes.” Summary: Creating productive and meaningful jobs is the goal of Job Design and an essen-tial element of good Organization Design. Finding the balance between specializing jobs to maximize efficiency and effectiveness and creating meaningful jobs so that employees are satisfied and motivated to perform those jobs, is the challenge man-agers face in designing jobs to get the “Right Work, Done Well!” In addition to good Job Design, managers need to consider how and whether those jobs will be organized into work groups. The clustering of jobs into work groups is done to: Make it easier for individuals to collaborate with others as necessary to perform their tasks, Create clear responsibility and accountability for a sub-group of the organization to coordinate and complete a collection of tasks that requires the involvement of multiple employees, and Make clear the delegation of authority for making and approving decisions including clearly establishing reporting relationships among employees (e.g., identifying who is the boss). Overall, the objective of having jobs grouped together within a particular Organi-zational Structure is to make it easier to get the necessary tasks done effectively and efficiently. Organizational Structure describes: the grouping together of jobs into work groups, the delegation of authority and responsibility within an organization, and the formal reporting relationships of employees to supervisors. A Functional Structure groups jobs that require similar skills and experience together into a single work group reporting to the leader of the organization. A Divisional Structure groups jobs together with people of diverse skills and experi-ence who collectively focus on either providing specific products, or serving specific groups of customers, or serving specific geographical areas. A Matrix Structure groups jobs together simultaneously by function and by division. organizations that own the company’s stock). In a process referred to as “Agency”, LG 7-4 authority to make most decisions is delegated from those shareholders to a Board of Directors elected by the shareholders. The Board of Directors then dele-gates some of its authority to a Chief Executive Officer (CEO) appointed by the Board of Directors who in turn delegates some of her/his authority to subordinates and so forth. The expectation is that each “delegate” is expected to act in the best interest of the shareholders from whom the delegation of authority originates. Shareholders use control mechanisms (such as independent audits) to make sure the authority they delegate is not being misused. In a Centralized Organizational Structure, most decisions are made, or at least must be approved, by the senior executives at the top of the organization. In a Decentralized Organizational Structure, many decisions are delegated to lower lev-els of management with those managers accountable for the consequences of their decisions (good or bad). Span of Control – refers to the number of direct reports assigned to a man-ager. The more direct reports, the broader the span of control. The fewer the num-ber of direct reports, the narrower the span of control. The trend in business is to broaden the span of control of managers thus reducing the total number of manag-ers required. Technology, and the increase in knowledge workers, reduces the need for direct supervision of many workers and thus allows for broader spans of control. Levels of Hierarchy – refers to the number of managerial levels between the top and the bottom of an organization. The fewer hierarchical levels, the flatter the organization. The more hierarchical levels, the taller the organization. The trend is towards creating flatter Organizational Structures Summary: Organizational Structure is a key part of Organization Design. The proper grouping of jobs together into work groups helps to assure that the work gets done effectively and efficiently. The appropriate delegation of authority allows decisions to be made where the information and expertise needed to make those decisions is located and allows decisions to be made faster and more reliably while maintaining accountabil-ity for those decisions. Modern organizations, with the aid of technology, are broad-ening the span of control of managers and reducing the number of hierarchal levels. This allows them to become more efficient and to improve communications from top to bottom. Collectively, Organizational Structure plays a key role in Organization Design and ensures that the “Right Work” gets “Done Well” Another key element of Organization Design is properly Integrating and Coordi-nating Workflows throughout the organi-zation. Regardless of which Organizational Structure an organization chooses, inevi-tably there will be a need to coordinate work activities across structural boundar-ies that exist in nearly every organization. This coordination is also necessary when working with the providers of outsourced services. How do organizations manage the integration and coordination of workflows? There are five common approaches used by organizations: LG 7-5 7.3.1 Organizational Structure 7.3.2 Liaisons 7.3.3 Task Forces 7.3.4 Cross Functional Teams 7.3.5 Integrating Roles Let’s look at how each of these approaches helps with Integration and Coordination of Workflows. Organizational Structure – as we discussed in Topic 7.2, Organizational Structure can help with coordination and integration by selecting a structure that will group the jobs together of those employees who need to routinely work together in order to accomplish their tasks. By having these employees work in the same sub-groups, it is more likely that they can integrate and coordinate their work more easily and successfully. Disagreements between employees on how to complete tasks can be more easily resolved by their managers who also work within the same sub-group. 7.3.2. Liaisons – are individuals appointed with the responsibility to coordinate the activities of their group with the activities of one or more other groups. generally, liaisons coordinate work activities by working with the liaisons appointed from those other groups. By consolidating this responsibility within an individual role, it allows that individual to develop an understanding of the groups that he/she will be coordinating with and build relationships with the people in those groups. These relationships can aid timely communication and problem resolution. It also can make it easier for individuals who need to coordinate efforts with another group to quickly gain the support of someone they know and trust (their group’s liaison). This is often a better approach than employees trying to figure out who and how to contact someone they have never dealt with before outside their group. 7.3.3. Task Forces – are made up of members of multiple groups who are assembled to address a specific need for coordination. This approach is generally used for handling a single project such as developing a new product or addressing a problem that has arisen in the organization. The intent is to bring together those people who are best able to complete the project successfully by working together. 7.3.4. Cross Functional Teams – are made up of members of multiple groups who are assembled with ongoing responsibility for managing a key activity of the organization. These teams could be product teams, or customer teams, or employee welfare teams, etc. The main difference between a Task Force and Cross Functional Teams is that Cross Functional Teams have ongoing responsibility for coordinating activities whereas a Task Force generally only stays in place long enough to complete a single project. 7.3.5. Integrating Roles – are individuals that in addition to their other responsibilities are charged with being a coordinator of activities with other groups. Unlike Liaisons whose sole role is to coordinate activities with other groups, someone in an Integrator Role has other responsibilities in addition to the role of coordinator with other groups. An example would be a person who works in the Human Resources function primarily as a compensation specialist but also is assigned to work with two or three other departments to help them prepare their annual Human Resources plan. That person may also be the primary point of contact for those departments to obtain services or support from the Human Resources department. Summary: Integrating and Coordinating Workflows across the organization and with important suppliers outside the organization is a key element of Organization Design and is essential to making sure the “Right Work” gets “Done Well”. Organization Culture are the set of norms, beliefs, values, and attitudes that are shared by a group of individuals within an organization. LG 7-6 Culture plays a key role in Organiza-tion Design by influencing the behavior of employees “ideally” in a manner con-sistent with the Core Values, goals, and Strategies of the organization. In this Topic we will review the follow-ing aspects of Organization Culture: 7.4.1 – Understanding an Organization’s Culture 7.4.2 – Strong vs. Weak Cultures 7.4.3 – Changing an Organization’s Culture 7.4.1 – Understanding an Organization’s Culture How does an organization identify and describe its current Organization Culture? This may be more difficult than it would seem! Edgar Schein, a leading scholar in the area of Organization Culture, suggests the following framework for understanding an organization’s culture. To help organiza-tion’s do this he describes Dimensions and Levels of Organization Culture. Dimensions of Culture – Content – what is deemed important including things like teamwork accountability, and innovation. Consensus – how widely norms are shared across people in the organization. Intensity of Feelings – how people feel about the importance of the norm. To what extent will people be recognized/sanctioned for supporting/violating the norm. The levels of Organization Culture include the following (listed from most easily observable to least easily observable): Artifacts – this includes things that can be observed in the organization like the dress code, physical layout, manner in which people address each other, the smell and feel of the place, the level of emotional intensity along with “archival” manifestations like products, statements of philosophy or values, and annual reports. While these are easily observable to an outsider of the organization it is not enough to rely on these alone as an indicator of the Organization’s Culture because what is important to understand is how the individuals inside the organization react to these artifacts and how it influences their behavior. Values – this includes the espoused and documented norms, ideologies, charters, philosophies, etc. that comprise the apparent values of the organization. To truly identify these, it is necessary to understand how the people in the organization think and feel which is difficult to ascertain from just observing what is espoused or documented. It is also insufficient to observe the behaviors without understanding the thinking and feelings which encouraged those behaviors. Assumptions – this includes the underlying, taken-for-granted, and usually unconscious thoughts of members of the organization that determine perceptions, thought processes, feelings, and behavior. Identifying assumptions correctly makes it easier to decipher the meanings implicit in the values and artifacts described previously. It is these assumptions that are at the root of understanding the culture in an organization. There is not always a single culture that exists within an organization. When this occurs, it is known as a weak culture because of the lack of uniformity around the key aspects of culture as described above. When cultures are weak, the organization may have difficulty motivating employ-ees to support the organization’s Core Values, goals, and Strategies. In addition, personal conflicts within the organization may be more frequent and more difficult to resolve as they may be more deeply rooted in the underlying differences in the organization’s culture. When we are talking about weak Organization Culture it is important to recog-nize that we are not talking about cultural differences that exist because of ethnic, religious, gender, or other types of identity differences that are common among employees in an organization. While these differences can potentially create social clusters within an organization, successful organizations are still able to align all employees in support of the organization’s Core Values, goals, and Strategies. They accomplish this by encouraging employees to see broader cultural differences as an important aspect of having a diverse organization; an organization that values and respects diversity. In this way, organizations reduce the risk that these broader cul-tural differences will lead to cultural schisms and lack of alignment. A Strong Organization Culture is one where the majority of the employees share the same norms, beliefs, values, and attitudes as it applies to their work-related activities even if they are part of significantly different cultures outside of their workplace. Changing an Organization’s Culture It is not easy to change an organization’s culture. When the culture fails to encour-age employees to align themselves with the organization’s Core Values, goals, and Strategy it becomes an impediment to the organization’s success. So how do leaders change the culture within their organizations in order to obtain better alignment? The first step is to identify the “Target Organization Culture” that the organization is seeking. Boston Consulting group (BCg) suggests that there are seven “Dimen-sions of Culture”. In the BCg model, the focus is on identifying strategy specific behaviors that are critical to aligning Culture with the Strategy of the organization. The BCg 7 dimensions are: Structured vs Flexible: How specifically are processes and acceptable behaviors defined? How closely are they followed in practice? Controlling vs Delegating: To what extent is power and decision making concentrated at the top or diffused throughout the organization Cautious vs Risk Permitting: How much does the organization support risk taking? Thinking vs Doing: To what degree do people spend time developing ideas versus executing them? Diplomatic vs Direct: How transparent are interactions and communications between workers and managers? Individualistic vs Collaborative: To what extent are employees concerned with their own individual performance versus shared goals? Internal vs External: To what extent are processes and behaviors oriented toward the outside world versus the internal environment According to BCg, an organization should set targets for each “Dimension” to best align with its Strategy. Below is an example of how an organization might set targets for each dimension. BCg recommends that organizations conduct workshops with management employees to establish these targets. Further, BCg suggests that there may be a need to have multiple sub-cultures in an organization. For example, the sub-culture for the research department may be different from the one for the finance department. Sub-cultures may also differ by business units in the organization. For example, a pharmaceutical division may require a different sub-culture than a consumer products division that are both part of the same organization. Once the organization has established a “Target Organization Culture” how does it go about effectively changing its current culture to move closer to the “Target”? Boston Consulting group suggests there are seven “critical levers” that influence employee behavior and shape organizational culture. Using these seven “Critical Levers” the organization can move towards imple-menting its “Target Organization Culture”. Leadership - Leaders’ role-modeling behaviors; their manner of communication, especially in reinforcing desired behaviors; how they spend their time, manage their priorities, and interact with direct reports (do they micromanage or manage by principle?); the heroes and legendary leaders they revere 2. People and Development - The kind of employees who are recruited and hired; opportunities for meaningful work and the kind of career paths and personal growth the organization enables; how talent is promoted and retained; the coaching that supervisors provide; the organization’s learning and development programs 3. Performance Management - The key performance indicators that the organization uses to define and track performance drivers, and its policies and practices regarding compensation, benefits, reviews, promotions, rewards, and penalties, including the consequences of undesirable behavior 4. Informal Interactions - Networks, the nature of peer-to-peer interactions, gatherings, and events, whether active communities of interest exist, whether people know whom to contact to access organizational knowledge 5. Organization Design - Organizational structure, processes, and roles, decision rights, collaboration processes, units’ relationship to headquarters, office layout and design 6. Resources and Tools - The projects that are funded, access to human resources, management systems, analytical tools 7. Values - The collective beliefs, ideals, and norms that guide peoples’ conduct and help them adhere to priorities, especially when facing a difficult business problem Organization Culture is an important aspect of Organization Design. For an organiza-tion to be successful, its culture must align with its Core Values, goals and Strategy. To develop the right culture, the organization needs to first understand its current culture by evaluating the various Dimensions and Levels of its Organization Culture using a model like the one developed by Edgar Schein. It also needs to select a target Culture using a model like the “7 Dimensions” of culture described by the Boston Consulting group (BCg) that will help identify the culture that will best align with its Strategy. If the current culture is not consistent with the “Target Culture”, then the organization needs to understand how to change its culture by using frameworks like BCg’s “Critical Levers” for changing Organization Culture. As industries become more dynamic (experiencing frequent and disruptive changes) the need to have an Organizational Structure that can adapt and respond quickly to this dynamic environment becomes essential to maintaining competitiveness. Recently many organizations are starting to adopt a new structure – “The Agile Organization”. McKinsey describes this new structure as an organization “... made up of a network of teams within a people-centered culture that features rapid learn-ing and fast decision cycles enabled by technology and guided by a powerful com-mon purpose to cocreate value for all stakeholders.” LG 7-7 These empowered and mostly autonomous “Teams” set priorities that are clearly linked to the organization’s goals. The emphasis is on enabling team success over individual success. The manager’s role is serving as a coach and less as a boss. Since much of the work is done in teams, the need for seeking feedback on an employee’s performance requires gathering input from the employee’s fellow team members as well as considering the achievements of the team overall. For an Agile Organization model to work effectively McKinsey identifies “Five Trademarks” of successful organizations adopting this model: For an Agile Organization model to work effectively McKinsey identifies “Five Trademarks” of successful organizations adopting this model: 1. North Star embodied across the organization – Clear goals for the organization allow teams to self-identify projects that align with those goals 2. Network of empowered teams – Flat organizational structures with limited hierarchy and no middle management. Teams are empowered and act autonomously with end-to-end accountability. 3. Rapid decision and learning cycles – Risk taking, failing, and learning fast are encouraged. Continuous people development is a priority. 4. Dynamic people model that ignites passion – Culture that empowers this agile way of working. Emphasis on intrinsic motivation and non-monetary awards. Developing expertise of employees is a cornerstone. 5. Next-generation enabling technology – Technology is seamlessly integrated and core to every aspect of the organization as an enabler for quick identification of opportunities/challenges and quick reaction. This involves full transparency of the organization’s information. The focus is to rapidly unlock value and address business and stakeholder needs.