Organisation Analysis and Design - Case Study Example

1. INTRODUCTION ALCAN Management made significant improvements in terms of teamwork, employee involvement and development of cooperative relations with trade unions. However, it is clear from a claim made by a maintenance engineer that they were “treated like shit” that ALCAN was treating people as “means” as “categories of status and function rather than as individuals”. This behavior had the consequence of destroying the meaning of work itself, failing to recognize and utilize properly the organization’s most valuable resource. Organizations, and ALCAN was no exception, have paid dearly for these attitudes in the various forms of worker resistance, absenteeism and complacency. 1.1 Organizational Structure Because Machine Bureaucracies are structures ridden with conflict, control systems are required to contain it. The magnified divisions of labor, horizontal and vertical, the strong departmental differentiation, the rigid distinction between line and staff, the motivational problems arising from the routine work of the operating core permeated the structure with conflict. The machine bureaucracy is typically found in the mature organization, large enough to have the volume of operating work needed for repetition and standardization and old enough to have been able to settle on the standards it wishes to use (Mintzberg, 1997;p120). 1.2 Organizational Culture Organizations pursuing a global strategy focus on the realization of location and experience curve economies. To coordinate the firm’s globally dispersed web of value creation activities, headquarters typically maintains ultimate control over most operating decisions. In the case of ALCAN this was clearly visible since the instruction to reduce capacity with consequential redundancy of about half the workforce, was a directive from the head office in Canada. In general, then, global organizations are more centralized. Reflecting the great need for coordination of the various stages of the organization’s globally dispersed value chains, the need for integration in these organizations also is high. Thus, these firms tend to operate with an array of formal and informal integrating mechanisms. The resulting interdependencies can lead to significant performance ambiguities. As a result, in addition to output and bureaucratic controls, global organizations tend to stress cultural controls (Hill, 1994;p394). 1.3 Organizational Values The organizations’ values and morals also contribute to its ethics. Ethics can affect managerial work in any number of ways, but three areas are of special concern. (1) Relationship of the organization to the employee, (2) Relationship of the employee to the organization, and (3) Relationship of the organization with other economic agents (Griffin,1990;p811). Organizations can maintain healthy dealings with their employees by treating them fairly, making them part of the team, and respecting their dignity and basic human needs. 2. RELATIONSHIP BETWEEN TEAM-WORKING, POWER AND CONTROL 2.1 Description 2.1.1 Team-Working Team-working establishes a system of common supervision among positions and units, creates common measures of performance and encourages mutual adjustment (Mintzberg, 1997;p106). Team-working encourages strong coordination within a unit, but it could create problems of coordination between units. 2.1.2 Power and Control All members of the organization typically seek power, if not to control others at least to control the decisions that affect their own work.. 2.2 Analysis Strategy, size, technology, and environment – even when combined – can at best explain only 50 to 60 percent of the variability in organizational structure. There is a growing body of evidence that suggests that power and control can explain a good portion of the residual variance (Kreitner et al,1992;p414). The power needs of organizations tend to generate structures that are excessively centralized. To function effectively, organizations typically require hierarchical structures and some degree of formal control. And these naturally put power in the hands of the line managers, as opposed to the staff specialists or the operators, and aggregate that power at the top of the hierarchy. As a result, managers promote centralization in both the vertical and horizontal dimensions; the managers of the middle line promote vertical decentralization, at least down to their own levels, and horizontal decentralization, to draw power away from the line managers, and the operators seek vertical and horizontal decentralization, all the way down to the operating core (Mintzberg, 1997;p291). Contemporary research had made clear the need to flesh out the bones of the superstructure with linkages that are lateral, as opposed to strictly vertical. Two main groups of these linkages have received extensive treatment in the contemporary literature on organizational design; planning and control systems that standardize outputs and liaison devices, such as team-working, that grease the wheels of mutual adjustment. (Mintzberg, 1997;p148). We can distinguish two fundamentally different kinds of control systems, one that focuses on the regulation of overall performance (after-the-fact monitoring of results) and the other that seeks to regulate specific actions (oriented to specifying activities that will take place). The concept of power evokes missed and often passionate reactions, however, like it or not, power is a fact of life in modern organizations. Power must be used because managers must influence those they depend on. Power is also crucial in the development of managers’ self-confidence and willingness to support subordinates. Managers should recognize and develop their own power to coordinate and support the work of subordinates; it is powerlessness, not power, that undermines organizational effectiveness. (Robbins, 1989;p362) Managers and others who pursued personalized power for their own selfish ends gave power a bad name. Emphasis must be placed on the word ability because it sets power apart from the concept of authority. Team-working activities are intended to enhance the effectiveness and satisfaction of individuals who work in groups or teams to promote overall group effectiveness (Hill, 1998;p405). In the old days labor and management worked together grudgingly. Workers were told what to do and were basically expected to do just that. Today, labor and management work together as partners. Each employee is expected to offer insights into how to be more effective, and management listens. In the case of ALCAN teamwork was introduced and jobs and grades were replaced by a flatter structure. Despite initial skepticism on the part of production managers, a survey indicated that a greater sense of autonomy and participation among shop-floor workers did exist. The dispersal of formal power down the chain of line authority will be called vertical decentralization. A decision process is most decentralized when the decision maker controls only the making of the choice in the organizational hierarchy, he loses some power to the information gatherers and advisors to his side, to the authorizers above, and to the executers below. Vertical decentralization is logically associated with work constellations grouped on a functional basis, but such selective decentralization leaves important interdependencies to be reconciled, which raises the question of coordination and control. Horizontal decentralization will refer to the extent to which “non-managers” control decision processes (Mintzberg; 1997;p186). Team-working includes the hygienic sprays that are supposed to reduce alienation, but it also deals with feelings of powerlessness. The lower orders are consulted on decisions and encouraged to make their own in some areas, yet they are left without the ultimate power and control to re-act. In the case of ALCAN enforcement of discipline was not part of the teams’ duties which differed substantially from teamwork experiments and resulted in a pragmatic acceptance of teams. Intergroup relations can be viewed in terms of efficiency and quality. Efficiency considers the costs to the organization of transforming conflict into actions agreed to by the groups. Quality refers to the degree to which the outcome results in a well-defined and enduring exchange agreement (Kreitner et al, 1992;p387). Using these definitions, ignoring outcomes for the moment, rules and procedures are less costly to implement than hierarchy, hierarchy is less costly than planning, and so forth. But, of course, keeping costs down is only one consideration. The other element of effectiveness is quality, or how well the coordination device works in facilitating interaction and reducing dysfunctional conflicts. The most effective coordination device will be the one that facilitates an enduring integrative exchange. High interaction among groups increase trust and openness with cohesiveness as the result. Cohesiveness is a process whereby a “sense of we-ness” emerges to transcend individual differences and motives. Such groups experience greater member satisfaction, are more effective, communicate more frequently and produce more positive and productive solutions. Groups offer an excellent vehicle for performing many of the steps in the decision making process. They are a source of both breadth and depth of input for information gathering. If the group is composed of individuals with diverse backgrounds, the alternatives generated should be more extensive and the analysis more critical. When the final solution is agreed upon, there are more people in the group decision to support and implement it. Many decisions fail after the final choice has been made because people do not accept the solution. In the case of ALCAN the shop-floor point of view was favorable, however, middle managers and technical staff did not share this sentiment. If people who will be affected by a decision and who will be instrumental in implementing it are able to participate in the decision itself, they will be more likely to accept it and encourage other to accept it. By aggregating the resources of several individuals, we bring more input into the decision process. This opens up the opportunity for more approaches and alternatives to be considered. Integration can be achieved through formal integrating mechanisms. These vary in complexity from direct contact and simple liaison roles, to teams, to a matrix structure. A drawback of formal integrating mechanisms is that they can become bureaucratic. For a network to function effectively, it must embrace as many managers within the organization as possible. Information systems and management development policies (including job rotation and management education programs) can be used to establish networks at all levels within the organization. For a network to function properly, subunit managers must be committed to the same goals. The key to understanding the relationship between international strategy and control systems is the concept of performance ambiguity. Performance ambiguity is a function of the degree of interdependence of subunits and it raises the costs of control (Hill, 1994;p396). Organization change is a complex phenomenon. A manager cannot simply wave a magic wand and have an intended change magically occur. Instead, change must be approached in a systematic and logical fashion for it to have a meaningful opportunity to succeed. To carry this off, the manager needs to understand the steps needed for effective change and how to deal with resistance to change (Griffin, 1990;p393). Uncertainty is perhaps the biggest cause of employee resistance to change. In the face of impending change, employees are likely to become anxious and nervous. In the case of ALCAN the introduction of teamwork was part of the reason why technical staff felt that their status had diminished, and that their job territory was under threat. Participation is generally considered the most effective technique for overcoming resistance to change. Employees who participate in planning and implementing a change are better able to understand the reasons for the change. Uncertainly is reduced and self-interests and social relationships may be less threatened. Trust has a significant influence on team-working effectiveness, enabling members openly to express feelings and differences, and avoid typical sabotage and defensiveness (Cooper et al, 1998;p93). When people don’t trust each other, they ignore feelings and alter facts and ideas that they anticipate may increase their vulnerability; under these conditions the chances for misunderstandings and erroneous assumptions increase dramatically. The less distortion that occurs in communication, the more goals, feedback and other messages between management and employees will be received as they were intended. Evidence that demonstrates a positive relationship between effective communication, which includes factors such as perceived trust, perceived accuracy, desire of interaction, top management perceptiveness, and upward information requirements, and worker productivity (Kreitner et al, 1992;p293) The internal costs of mistrust result in inefficient entanglements of hierarchy, communication, misperception, anger, blame and cynicism that was time, energy, goodwill and money. It is useful to conceptualize trust as behavior that conveys appropriate information, permits mutuality of influence, encourages self-control, and avoids abuse of the vulnerability of other (Kreitner et al, 1992;p408). 3. CONCLUSION In the traditional authoritarian organization, the dogma was managing, organizing and controlling. The new dogma will be vision values and mental models. Healthy corporations will be ones which can systemize ways to bring people together to develop the best possible models for facing any situation at hand (Senge, 1994;p181). An exciting and promising trend in today’s organizations is the decentralization of power. Power is shifting to employees at virtually all levels as a way of boosting productivity and competitiveness. It allows them to make their own work-related decisions. There is also a subtle but perceptible change in the philosophy underluying management behaviour (Kreitner et al, 1992;p423). Real change seems under way because of a) a new concept of human nature, based on increased knowledge of complex and shifting needs, which replaces an oversimplified, innocent, pushbutton idea of human nature b) a new concept of power, based on collaboration and reason, which replaces a model of power based on coercion and threat c) a new concept of organizational values, based on humanistic-democratic ideals, which replaces the depersonalized mechanistic value system of bureaucracy. The real push for these changes stems from the need not only to humanize the organization, but to use it as a stimulus for personal growth and development of self-realization . ALCAN CASE STUDY ANALYSIS OF RELATIONSHIPS BETWEEN TEAM-WORKING ON THE ONE HAND, AND POWER AND CONTROL ON THE OTHER I N D E X 1. Introduction 1.1 Organizational Structure 1.2 Organizational Culture 1.3 Organizational Values 2. Relationship between team-working, power and control 2.1 Description 2.1.1 Team-Working 2.1.2 Power and Control 2.2 Analysis 3. Conclusion LIST OF SOURCES Cooper, R. and Sawaf A. (1998) Executive EQ Emotional Intelligence in Business UK: Butler & Tanner Ltd Griffin, Ricky W. (1990) Management (Third Edition) USA: Houghton Mifflin Company Hill, Charles W.L. (1994) International Business, Competing in the Global Marketplace (Second Edition) USA: Richard D. Irwin, Inc Kreitner, R and Kinicki, A (1992) Organizational Behavior (Second Edition) USA: Richard D. Irwin, Inc Mintzberg, H. (1997) The Structuring of Organizations USA: Prentice-Hall, Inc Robbins, Stephen P. (1989) Organizational Behavior, Concepts, Controversies, and Applications (Fourth Edition) USA: Prentice-Hall, Inc Senge, Peter M. (1990) The Fifth Discipline – The Art & Practice of The Learning Organization USA: Bantam Doubleday Dell Publishing Group, Inc Read More