Charlotte Beers at Ogilvy & Mather Worldwide - the Evaluation of Their Organizational Structure - Essay Example

 Charlotte Beers at Ogilvy & Mather Worldwide - the Evaluation of Their Organizational Structure In order to evaluate the organizational structure of a firm that operates in the modern market we should rely primarily on its performance through a specific number of years. However, in case of firms that already have a history within the market, like Ogilvy & Mather, the evaluation of their organizational structure should be based on a series of additional criteria, like the response of the firm to any turbulence occurred in the local and the international market, its readiness to confront any challenge related with the customer needs and preferences and its profitability since its establishment (at an average level). In the above context, the evaluation of Ogilvy & Mather organizational structure should be based on the views of the literature (primarily); additional criteria (like the firm’s decisions on specific issues related with the daily corporate activities could be also taken into consideration). It would be very important – in any case – to highlight the particular aspects of the organizational culture that acted as potential barriers to the implementation of strategies and plans that could help towards the improvement of the corporate performance (referring mostly to the Worldwide Client Service and the Brand Stewardship vision). In modern firms, the evaluation and analysis of organizational structure usually begins from the workplace, in terms of the distribution of roles and the performance of employees taking into account the market conditions, the needs of the customers and the level of support offered by the local government. On the other hand, it is clear that organizational structure (in all its aspects) had to be differentiated compared to the past in order to meet the needs of modern market. Towards this direction, it is suggested by Burke (1976) that within modern firms the following sectors have presented significant differentiations: ‘value shifts, expanded technology and theory, modifications in OD (organizational development) strategy, and a growing legitimization of OD (organizational development) as a field; it is argued that the development of OD has been adaptive rather than deliberate and planned’ (Burke, 1976, 22). In order for the above restructuring to be completed (i.e. for the firm’s strategies to be aligned with the trends of modern market) it is necessary that employees of a particular firm participate actively in any relevant effort offering their support in all the phases of the plan attempted to be implemented. For this reason, it is noticed by Hennestad (1990, 265) that ‘members of an organization are supposedly led, but very often they do not see the way; on the contrary, they are exposed to conflicting management signals and caught in double bind situations; the result is that the individual is not capable of meta communication and thus incapable of learning about the situation’. All the above issues have been taken into consideration by the managers of Ogilvy & Mather. The firm has managed to confront successfully the extremely strong competition (even if the entrance of new competitors within the particular industry globally made the survival of the firm a challenging task). It should be noticed here that the firm since its establishment in 1948 had the financial support of two London agencies. This was an advantage for the firm at least during the first years of its operation. On the other hand, the experience of its founders in the advertising sector was another element that helped towards the quick development of the firm within its market. When Charlotte Beers was appointed the firm’s structure was slightly different from its initial one (referring to its establishment). Despite the fact that the size of the company has been changed – corporate activities were expanded with more than 270 offices worldwide – there were still many issues that need to be resolved in order for the firm to be further developed. As Beers admits, ‘When I took over,all the press reports talked about ‘beleaguered’ Ogilvy; my job was to remove, ‘beleaguered’ from our name’ (case study, p.6). One of the most severe problems of the firm at the time of Beers’ appointment was its leadership. The firm’s leaders had failed to propose and apply innovative plans of action; as a result the firm could not respond to the needs of the market; the high cost of the firm’s services was also another element that led the firm to severe turbulences (most of the firms in the market had focused on the reduction of their costs; as a result their prices were also reduced). The fact that the firm’s leaders failed to understand the market trends was also identified by Beers who ‘within two months of her appointment dismissed a top-level executive who had failed to instigate necessary changes’ (case study, p. 6). Beers tried to focus on the firm’s major advantages: ‘its network worldwide, the talent of employees and the distinguished list of multinational clients’ (case study, p. 6). The implementation of a series of changes on the organizational structure (especially in the sectors mentioned above, methods of leadership, HR and cost management) was expected to support the further development of the firm worldwide. However, through the years, the implementation of the Worldwide Client Service scheme and the Brand Stewardship vision (proposed by Beers) was not completed (at least at the level expected by Beers). The reasons for this failure can be many; however the following facts can be considered as having delayed the re-format of the firm’s organizational activity (through the implementation of these two schemes): workplace resistance, lack of cooperation and communication among the employees and lack of skills of the firm’s managers (especially at the middle level of the organizational hierarchy) to respond to the needs of the attempted change. Using the theoretical framework developed by Goffee & Jones (1996, Figure 1, Appendix) we could state that the lack of appropriate cooperation within the organization has been the main reason for the failure of the various corporate plans (the firm’s culture could be positioned in the middle of the relevant diagram, the specific culture should become more ‘networked’ and less ‘fragmented’). 2. Use elements of the change kaleidoscope to identify which of the contextual features of change were particularly important for (O&M) when approaching the implementation of the WCS and Brand Stewardship vision and strategy. The implementation of change policies within any organization is a challenging task. In most cases, severe turbulences are caused and appropriate measures are necessary in order to handle the crisis. In general terms, change has been characterized as ‘an outcome jointly determined by motivation to change, opportunity to change, and capability to change’ (Greve, 1998, 59). Referring specifically to organizational change within the workplace Anson (2000, 21) notices that ‘managing organizational change remains one of the most important challenges facing HR professionals today’. In fact, in all organizational departments change is quite difficult to be implemented mostly because the reaction of the firm’s stakeholders (especially those affected directly by the changes attempted). Towards this direction, it is stated by Katzenbach (1996, 149) that ‘change efforts are often conceived as waves of initiatives that sweep through an organization from the top down, or the bottom up, or both, and flow across functions’. Of course, there are always strategic policies available to the firm’s managers in order to handle the potential resistance developed in the workplace because of specific attempted changes; but the success of the relevant effort depends on the managers’ ability to understand the strength and weaknesses of the organizational culture and propose the appropriate measures for the limitation of resistance to any change effort. The above issue (resistance in the workplace because of proposed changes) has been extensively examined in the literature and many reasons have been identified as promoting instability within the organizational environment. Under these terms, it is noticed by Bunker et al. (2005, 12) that ‘much of that failure stems from not understanding how to manage the structural side of change and the human dynamic of transition; as a result, instead of a loyal, productive, and enthusiastic workforce, we face employees who are insecure, fearful, and skeptical, and we undermine our progress toward new goals’. It seems that in most cases managers in modern organizations fail to understand the needs of these organizations; as a result any plan suggested and applied is very likely to be inappropriate for the achievement of the targets set. It is for this reason that Ivancic et al. (1998, 61) supports that ‘no organization should be managed to be "institutional" regardless of its size, but that size alone is not the sole determinant of self-motivated service delivery’ while Karp et al. (2000, 454) made clear that within all organizations ‘resistance needs to be recognized, honoured and worked with; it is very important that designers and deliverers of diversity training be aware of the positive aspects of participant resistance’. All these issues can be identified in the ‘Change Kaleidoscope’ (Figure 3, Appendix section) in which 8 elements are being presented as main criteria for the successful implementation of any plan of change: a) Power (Stakeholders Autonomy); b) Time (Crisis-Long term change); c) Scope (how much change?); d) Preservation (Identify assets); e) Diversity (uniformity v diversity); f) Capability (individual, managerial, organisational, functional); g) Capacity (cash, time, people) and h) Readiness (awareness, commitment). All these criteria could be evaluated and analyzed as of their role in the change plan applied on the particular organization through the initiative taken by Beers. In the specific organization there is no clear position of the role of stakeholders; the firm is depended on them but it is not sure whether their active participation in the efforts of Beers has a crucial role in the success of the relevant plans. On the other hand, time is considered to be a significant issue regarding the successful implementation of the policies proposed by Beers. In Ogilvy et Mather no particular plans of restructuring have been taken place the last decades (referring to the period before the appointment of Beers). In this context, the initiatives of Beers – even well planned and organized – had to produce results by the first steps of their implementation. Because the financial losses of the firm prior to 1992 (appointment of Beers) were significant (many important clients have stopped their cooperation with the firm) it was necessary that the changes attempted to lead quickly to positive results (at the highest possible level); in any case the further decrease of the organizational performance had to stop as soon as possible. The extension of changes (scope) has been evaluated by Beers; the relevant decisions of the firm’s leaders in the past have been proved inappropriate regarding the firm’s position in the market and its prospects for the future; the firm’s managers in general could have a supportive role to the implementation of the relevant changes but only Beers could decide on the required changes and the methods used for their implementation. The most important parts of ‘change kaleidoscope’ in the case of the specific firm seems to be the ‘capability’ part and the ‘preservation’ part; Beers had to identify the skills of the firm’s employees (in order to respond to the needs of the attempted plans) and the strengths of the company (in terms of resources and assets available for the realization of the relevant projects). It is during the above tasks that diversity should be promoted and established at all organizational levels. The above assumption is proved in practice by the policy followed by Beers towards the successful implementation of changes across the organization. More specifically, it is clearly stated that ‘by May 1992, Beers had identified a group whom she described as ‘thirsty for change’; some were top executives heading regions or key offices, others were creative and account directors… the selection criterion was ‘people who got it’ – those who agreed on the importance of change’ (case study, p. 7). After identifying the persons that would be most appropriate for the implementation of the plans of change, Beers ‘put a diversity of talents in a climate of disruption’ (referring to the Vienna meeting, case study, p.8). While working on the completion of the relevant plans, it has been proved by the firm’s managers (and the rest of the personnel participated in the relevant efforts) that within the firm a severe ‘morale problem’ existed. The firm’s principles and values had to be carefully reviewed and appropriate measures should be taken in order to face the challenges set within the various organizational sectors. The firm had the ‘capacity’ and the ‘readiness’ (see change kaleidoscope, Figure 3, Appendix) in order to adopt any plan of change; the prospects for the success of this plan could not be precisely estimated in advance; the intervention of a series of factors (like the position of the competitors and the strength of the company to support its position in the market) has caused severe delays in the successful implementation of the change plans (included the WCS and the Brand Stewardship vision) proposed by Beers within the various organizational departments. At a first level, Beers has identified three sectors which should be thoroughly reviewed: client security, performance of employees and financial discipline (in p. 9 of case study). The elements included in the ‘Change Kaleidoscope’ if taken into consideration could help to the improvement of the specific organizational sectors promoting the restructuring of many other organizational aspects (as analyzed before) that cause delays to the realization of plans of change. 3. What change design choices were indicated (or constrained) by critical contextual features identified above? Were these indicated design choices reflected in the change strategy actually adopted during the transition to the new organisational arrangements and procedures? Critically evaluate weak points in the change strategy as reported in the case study. The methods used by managers in order to achieve specific targets can vary in accordance with the market conditions, the resources available and the time required for the completion of any relevant plan. In this context, organizational development can be achieved only through the application of a series of policies/ principles that could be described as follows: ‘1) OD must become more theory and research-based; 2) OD must develop a new model that will incorporate with its methodology, directions for organization change based on research knowledge; and 3) OD practitioners are needed who (a) know who they are as persons and (b) will practice more OD on the field itself’ (Burke, 1976, p.22). On the other hand, it is necessary that any plan of change is appropriately structured (carefully designed and tested before its implementation) in order to avoid any severe consequence to the various organizational activities. Towards this direction, it is noticed by Tan (1998, 23) that ‘organizations need creativity to adapt to the fast‐changing environment and revitalize itself; in response to this need, managers have invested in various single approaches, such as, creativity training programmes, team‐building, and leadership development to improve creativity’. In accordance with the above, creativity should have a decisive role in the success of any plan of modern organizations; however there are other factors that can influence the success of any plan of change applied on a particular organization – the willingness of employees to participate in the relevant effort, their skills/ competencies, their ability to respond to the needs of the particular project, the market conditions, the position of the state towards the relevant effort and so on). In the case under examination, the role of the employee in the success of the relevant effort has been taken into severe consideration. Beers started the evaluation of the employees’ ability to respond to the needs of the relevant plans by the managerial level: development of the team that are ‘thirsty for change’ (p. 7 case study). All the other factors had been also taken into severe consideration by Beers when designing the relevant plans of change. 4. Conduct stakeholder analysis (using appropriate mapping techniques) to identify likely stakeholders reactions to the proposals for the adoption of the WCS and Brand Stewardship vision and strategy when it was first proposed. Contrast the likely situation with the preferred situation and identify the leverage points available to influence the more powerful stakeholders for the proposal to proceed. The stakeholder analysis of O & M could be conducted using the stakeholder mapping (Figure 5, Appendix section). In accordance with the specific graph, the impact of stakeholders on the success of organizational plans can be measured using the following criteria: Predictability and Power. These two criteria further can be combined with a series of other factors, like the problems of the company (both internally and externally), the competition, the conditions of the market (difficulties in achieving specific organizational performance due to extremely adverse financial and political climate both locally and internationally). In the case of the particular organization, the stakeholders have a critical role in the success of the attempted changes. More specifically, the successful implementation of the relevant plans for change is strongly depended on the willingness of the firm’s employees to participate in the relevant efforts; it is also depended on the customers’ response. In any case, it seems that Beers has the support of the firm’s shareholders in order to proceed to any required restructuring. However, it could be strongly doubted whether shareholders could possibly participate more actively towards the successful completion of the relevant plans; the fact that Beers has been given the power to proceed to any change required for the improvement of the firm’s performance prove that there is no particular factor that could be an obstacle to the realization of Beers’ projects. As for the specific two strategic plans, the WCS and the Brand Stewardship vision, their delay has resulted because of the development of different responses by the firm’s stakeholders. The power of Beers to insist further on the necessity of these two plans could not be extended. In order to understand the reactions of the firm’s stakeholders when the plans of change of Beers (referring especially to WCS and Brand Stewardship vision) we should primarily identify the firm’s stakeholders (at that particular point of time) and then evaluate their behaviour taking into consideration the fact that different approaches could be used in order to criticize the position of the firm’s stakeholders towards the proposals of Beers. The firm’s stakeholders are represented in the Figure 6. Their response to the attempted changes (referring as already noticed above to WCS and Brand Stewardship vision) have been differentiated. The fact that part of the stakeholders belong to the firm’s internal environment and the part of them belong to the firm’s external environment (see Figure 6, Appendix) has not been proved to be a crucial criterion for the development of specific behaviour by the firm’s stakeholders towards the proposals of Beers. It is noticed in the case study that ‘compared to the clients’ enthusiasm, reactions to Brand Stewardship within the agency were initially tepid’ (p.12). The lack of experience of employees to similar projects has been presented as the main reason towards this phenomenon. The firm’s shareholders also regarded with skepticism the introduction of the above two projects. Among the firm’s stakeholders the ones that mostly responded immediately (behaving differently) had been: the shareholders, the employees and the consumers. The position of the community and the state cannot be evaluated as no particular reaction was developed by these two ‘stakeholder categories’ (as presented in Figure 6, Appendix). Also the firm’s suppliers did not seem to respond to the implementation of the above two schemes. As for the stakeholders that responded to the implementation of WCS and the Stewardship vision, i.e. employees, shareholders and consumers, their reactions can be characterized as positive – even if initially they appeared to be negative (see also Figure 4, Appendix, when evaluating the behaviour of the firm’s stakeholders). 5. Discuss potential strategies for breaking down functional barriers within O & M to secure commitment to implementation of the new vision. Your answer should address issues relating to organisational structure, local/global tensions, team working, and individual resistance to change. (Refer to your earlier analysis in question 1-4 above if this helps amplify your answer.) It should be noticed that the strategies followed by managers around the world in order to respond to specific organizational demands can vary in accordance with a series of issues (industry in which the organization operates, position of competitors, financial strength of the firm, years of its presence in the market, response of customers and so on). The specific issue has been examined by Sias (2005, 385) who supported that ‘practitioners in troubled organizations (e.g., those with high levels of turnover, low levels of performance and morale) might examine the quality of the supervisor-subordinate relationships in their organizations to determine how that might be detracting from the dispersion of quality information throughout the organization’. In the literature and the empirical research, many strategies have been proposed in order to help managers to promote various plans of change in their organizations. An indicative example is the grid presented by Balogum & Hailey (Figure 2, Appendix). In accordance with the specific diagram, there are many different types of change which can lead to specific targets (included in the grid): evolution, adaptation, revolution and reconstruction. Using the specific diagram, it could be stated that the strategy followed by Beers regarding the implementation of specific plans of change was appropriately designed and implemented: at a first level the firm’s organizational environment was examined and evaluated, then proposals of reconstruction were made, strategic alliances were developed (referring to the ‘thirsty for change’ team) and the participation of employees was achieved (through the provision of appropriate incentives). However, it should be noticed that in the case under examination the potential success of the plans of change implemented by Barriers has been delayed because of a series of significant barriers. In this context, it has been noticed by Smith (1994) that ‘the principal impediment to changing an organization’s strategic direction is its existing culture: that is, people’s current beliefs about the limits of what is possible – a process also known as ‘the Merlin Factor’; the leadership tasks faced by executive ‘Merlins' are: (1) Co-Invention, (2) Engagement, and (3) Practice’ (Smith, 1994, 67). The application of the above strategic plan (regarding the implementing of changes in a specific organization) could also help Beers to overcome any potential resistance within the particular organization. At a next level, any issue appeared at each specific organizational department should be handled taken into consideration the needs of the specific department, its role in the performance of the whole organization, the chances for recovery (if the failure under evaluation can be easily recovered) and the response of the market to any plan of organizational restructuring. Referring to a specific part of the organization, the human resources, Paul et al. (2003, 1246) noticed that ‘HRM practices such as training, job design, compensation and incentives directly affect the operational performance parameters, employee retention, employee productivity, product quality, speed of delivery and operating cost’. The rest of the organizational activities could be reviewed and restructured using a series of additional plans and policies (in accordance with the characteristics of each sector, the skills of the managers and the employees and the needs of the market). In the case of O & M the barriers that delayed the development of the plans of change suggested and promoted by Beers could be limited if the following issues were taken into consideration: a) the attempted changes had to be introduced gradually avoiding radical changes within short period of time; b) the views of the firm’s employees (also of its managers) should be taken into consideration; c) more detailed review of the firm’s external environment should take place in order to accurately evaluate the position of competitors but also the response of consumers. The lack of time (as explained in previous section) in the particular case has been a negative factor for the success of the efforts of Beers. However, if the above issues are taken into consideration, it is very likely that all barriers towards the success of the relevant plans of change will be disappeared. References Anson, B. (2000) Taking Charge of Change in a Volatile Healthcare Marketplace. Human Resource Planning, 23(4): 21-24 Bunker, K., Wakefield, M. (2005). Changing Workforce: Leading Effectively When Change Is the Norm Canadian Government Managers Discover How to Weather Draconian Layoffs and Budget Cuts by Turning Inward to Become More Authentic. The Public Manager, 34(4): 9-17 Burke, W. (1976) Organization Development in Transition. The Journal of Applied Behavioral Science, 12(1): 22-43 Greve, H. (1998). Performance, Aspirations and Risky Organizational Change. Administrative Science Quarterly, 43(1): 58-63 Hennestad, B. (1990) THE SYMBOLIC IMPACT OF DOUBLE BIND LEADERSHIP: DOUBLE BIND AND THE DYNAMICS OF ORGANIZATIONAL CULTURE. Journal of Management Studies 27 (3), 265–280 Ivancic, M., Helsel, W. (1998) Organizational Behavior Management in Large Residential Organizations Moving from Institutional to Client-Centered Care. Journal of Organizational Behaviour Management, 18(2/3): 61-82 Katzenbach, J. (1996). Real Change. The McKinsey Quarterly, 1: 148-153 Paul, A., Anantharaman, R. (2003) Impact of people management practices on organizational performance: analysis of a causal model. International Journal of Human Resource Management, 14(7): 1246-1266 Smith, C. (1994) The Merlin Factor: Leadership and Strategic Intent Business Strategy Review 5 (1), 67–84 Appendix Figure 1 – Types of culture (source: as described above, lecture notes) Figure 2 – Types of change (source: as described above, lecture notes) Figure 3 – The change kaleidoscope (source: as described above, lecture notes) Figure 4 – Influences on organisational purposes (source: as described above, lecture notes) Figure 5 – Stakeholder mapping (source: as described above, lecture notes) Internal External Figure 6 – O & M – Stakeholders (Internal and External) Read More