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LEADERSHIPandCHANGE(1)ORGANISATIONALSTRUCTURE&MANAGEMENTandORGANISATIONALCHANGELeadershipandOrganisations6BUS1001LenRyder
ORGANISATIONALSTRUCTURE&MANAGEMENTLEADERSHIPandCHANGE(1)PREAMBLE(clickonthespeakericonbelow)
ORGANISATIONALSTRUCTURE&MANAGEMENTLEADERSHIPandCHANGE(1)Leadingchangeisoneofthegreatestchallengesforleaders.Changecanbeinconvenient,painfulanddownrightscary.Evenwhenachangeappearstobegoodforindividualemployeesaswellastheorganisation,itcanleadtodecreasedmorale,lowercommitmentanddiminishedtrustifnothandledcarefully.SomeofthemostdifficultchangesarethoserelatedtoOrganisationalSTRUCTUREandCULTURE.ChangingtheOrganisationalStructureinvolvesredefiningpositionsandresponsibilities,re-engineeringthecompany,redesigningjobs,departmentsanddivisionsordownsizingtheorganisation.Daft,2021
ORGANISATIONALSTRUCTURE&MANAGEMENT
ORGANISATIONALSTRUCTURE&MANAGEMENTTHECLASSICALAPPROACHTheClassicalApproachtoorganisation,structureandmanagementplacesanemphasisonformalstructures,rules,hierarchiesandcommonprinciplesororganisation.TheClassicalApproachisgenerallyassociatedwiththeworkof:F.W.Taylor(1911)-ScientificManagementHenriFayol(1916)-ManagementFunctionsMaxWeber(1947)-Bureaucracy
ORGANISATIONALSTRUCTURE&MANAGEMENTTHECLASSICALAPPROACH1.ThePrinciplesofScientificManagement(Taylorism)FrederickF.Taylor(1911)Developascienceforeachelementofaman’swork,whichreplacestheold“rule-ofthumb”method.Scientificallyselectandthentrain,teach,anddeveloptheworkman,whereasinthepasthechosehisownworkandtrainedhimselfasbesthecould.Managersheartilycooperatewiththemensoastoinsurealloftheworkbeingdoneinaccordancewiththeprinciplesofthesciencewhichhasbeendeveloped.Thereisanalmostequaldivisionoftheworkandtheresponsibilitybetweenthemanagementandtheworkmen.Themanagementtakeoverallworkforwhichtheyarebetterfittedthantheworkmen,whileinthepastalmostalloftheworkandthegreaterpartoftheresponsibilitywerethrownuponthemen.Embodiedintheaboveare:Replacementoftheoldrule-of-thumbmethodbyamorescientificmeasurementofworkderivedfromtime-and-motionstudies.Standardisationofsmallwork.Sub-divisionoflabour–eachactprecededbypreparatoryactsbyotherworkers(Specialisation)WorkplannedbymanagersinadvanceWorkersgivendetailedandwritteninstructionsonwhattodoandhowtodothework.Higherwagesfromincreasedoutput(moneybeingamotivator).Alignmentofworkers’abilitytothetask.Selection,traininganddevelopmentofworkersDivisionofworkbetweenmanagementandworkers–eliminationofthe‘boss’andthedutyofmanagementtohelpworkers.Consequently,Managementisatruescience,restinguponclearlydefinedlaws,rulesandprinciplese.g.Factories,CallCentres
ORGANISATIONALSTRUCTURE&MANAGEMENTTHECLASSICALAPPROACH2.TheFunctionsofManagementHenriFayol(1916)Planning-gatherallinformation,definethetaskandmakeaworkableplanOrganising-brieftheteam,explaintheplan,allocatetasks,setstandardsCommanding-monitorchanges,assessthesituation,makedecisions,provideleadershipCo-ordinating-recogniseindividuals’contributions,ensureallcomponenttasksareworkinginharmony,encourage,discipline,motivateControlling-maintainstandards,ensureallactionsaretowardsobjectives.
ORGANISATIONALSTRUCTURE&MANAGEMENTTHECLASSICALAPPROACH3.BureaucracyMaxWeber(1947)Weberstatesthatabureaucraticorganisationistechnicallythemostefficientformoforganisationpossible……………..thebureaucraticorganisationbecomestypicalofalltheinstitutionsofmodernsocieties.(Pugh&Hickson,1996)CharacteristicsJobspecialisation:jobsarebrokendownintosimple,routineandwell-definedtasksAuthorityhierarchy:Positionsareinahierarchyofauthority,witheachpositionundertheauthorityofahigheronewithaclearchainofcommandEmploymentandcareer:allpersonnelselectedandpromotedonthebasisoftheirtechnicalqualificationsandofferedafull-timecareersupportedbythoroughandexperttrainingRecording:Activitiesanddecisionsarerecordedinwritingthatformtheorganisational‘memory’(thefiles)ImpersonalRulesandProcedures:allemployeesareequallysubjecttorulesandproceduresthatensurereliableandpredictablebehaviour
ORGANISATIONALSTRUCTURE&MANAGEMENTTHEHUMANRELATIONSAPPROACHMovedthefocusawayfromtheideathatworkersweresimplyapartoftheproductionprocessandemphasisedthefactthatpeopleworkbetteriftheyaretreatedlikehumanbeingsMayo(1927)–HawthorneExperimentsMcGregor(1960)–TheoryX&TheoryY
ORGANISATIONALSTRUCTURE&MANAGEMENTTHEHUMANRELATIONSAPPROACH1.HawthorneExperimentsEltonMayo(1927)ExperimentscarriedoutattheHawthorneplantofWesternElectricinChicagoEmployeesraisedtheirperformanceaftertheirworkingconditionswerediscussedwiththem–extraattentiongiventothemandtheapparentinterestshowninthembymanagementWorkersappearedtowelcometheopportunitytohavesomeonetotalktoabouttheirfeelingsandproblemsinafriendlyatmosphereThisplacedthe“Humanelements”intothemanagementofpeople.Itdemonstratedtheneedtoseeworkprocessesasacollectiveco-operativeactivityratherthananindividual,isolatedonemotivatedbymoney.(“ThesestudiesgavesubstancetoagrowingsuspicionthattheClassicalviewoforganisationsasbeingpeopledby‘machines’motivatedbymoneywasbadlyflawed”…Burns,1996)
ORGANISATIONALSTRUCTURE&MANAGEMENTTHEHUMANRELATIONSAPPROACH2.TheoryX&TheoryYDouglasMcGregor(1960)Thewaymanagersmanagepeopleatworkoftendependsupontheirattitudestowardsthem.Theseattitudesarederivedfromassumptionstheymakeabouthumanbeingsgenerally.DouglasMcGregorsuggestedthatmanagersoperateunderoneoftwosetsofcontrastingassumptionsandwhattheybelievedaboutpeoplecaninfluencethemtobehaveinthatway:TheoryX–peopleonlyworkbecausetheyhaveto.Theydislikeresponsibilityandmustbedirected,rewardedorpunishedandstrictlycontrolledTheoryY–peoplehaveapsychologicalneedtowork,lookforfulfilmentinitandwelcomeresponsibility.
TheoryX&TheoryYTheoryXTheaveragepersondislikesworkandwillavoidithe/shecan.Thereforemostpeoplemustbeforcedwiththethreatofpunishmenttoworktowardsorganisationalobjectives.Theaveragepersonpreferstobedirected,toavoidresponsibility,isrelativelyunambitious,andwantssecurityaboveallelse.TheoryYEffortinworkisasnaturalasworkandplay.Peoplewillapplyself-controlandself-directioninthepursuitoforganisationalobjectives,withoutexternalcontrolorthethreatofpunishment.Commitmenttoobjectivesisafunctionofrewardsassociatedwiththeirachievement.Peopleusuallyacceptandoftenseekresponsibility.Thecapacitytouseahighdegreeofimagination,ingenuityandcreativityinsolvingorganisationalproblemsiswidely,notnarrowly,distributedinthepopulation.Inindustrytheintellectualpotentialoftheaveragepersonisonlypartlyutilised.(requiresan‘Authoritative’Managementstyle)(requiresa‘Participative’Managementstyle)
ORGANISATIONALSTRUCTURE&MANAGEMENTTHESYSTEMSAPPROACHViewsorganisationsasasystemofinter-relatedactivitiesEnableskeyelementsoforganisationstobestudiedindividually,inrelationtootherelementsandhowtheyinteractwiththeexternalenvironmentSystemscanbeopenorclosed…………
ORGANISATIONALSTRUCTURE&MANAGEMENTTHESYSTEMSAPPROACHClosedSystemINPUTSLabourTechnologyFinanceMaterialsPremisesManagementskillsOUTPUTSGoodsServicesIdeasInformationorganisation?FEEDBACKLOOP
ORGANISATIONALSTRUCTURE&MANAGEMENTTHESYSTEMSAPPROACHContextualEnvironment(General)PoliticalEconomicSocialTechnologicalLegalEnvironmentalOperationalEnvironment(Immediate)CompetitorsSuppliersLabourMarketFinancialCustomersorganisationExternalInfluencesInputsOutputsOpenSystem
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures“Thewayanorganisationisconfiguredintoworkgroups,andthereportingandauthorityrelationshipsthatconnectindividualsandgroupstogether”Brooks(1999)“Thesumtotalofthewaysinwhichitdividesitslabourintodistincttasksandthenachievesco-ordinationbetweenthem”Mintzberg(1979)“Goodorganisationstructuredoesnotbyitselfproducegoodperformance.Butapoororganisationalstructuremakesgoodperformanceimpossible–nomatterhowgoodtheindividualmanagersmaybe.Toimproveorganisationstructurewillthereforealwaysimproveperformance”Drucker(1989)
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructuresTypesofOrganisationalStructures:DivisionalStructures(Divisionalisation)FunctionalStructure(Functionalisation)MatrixStructureHandy’sStructures
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures1.DivisionalStructuresThereare3formsofDivisionalstructure:(1)Geographicwhenmanagersorganisedivisionsaccordingtotheareaofthecountryorworldinwhichtheyoperate.-Jones,etal,1998
DivisionalStructures–(Geographic)GeographicVIRGINGROUPAfricaAsiaAustraliaUKCanadaEuropeUSATheDivisionsdonotaccuratelyreflectVirgin’sstructure–forillustrationpurposesonly.
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures1.DivisionalStructuresThereare3formsofDivisionalstructure:GeographicProductwhenmanagersorganisedivisionsaccordingtothetypeofgoodsorservicestheyprovideJones,etal,1998
DivisionalStructures–(Product)VIRGINGROUPAfricaAsiaAustraliaUKCanadaEuropeUSATravel&TourismLeisure&PleasureSocial&EnvironmentFinance&MoneyMedia&Telecomm-unicationsShoppingHealthGeographicGroupingProductGrouping
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures1.DivisionalStructuresThereare3formsofDivisionalstructure:GeographicProductCustomer(orMarket)whenmanagersorganisedivisionsaccordingtothetypesofcustomerstheyfocuson.Jones,etal,1998
DivisionalStructures–(Customer)BTBTRetailBTGlobalServicesBTWholesaleOpenreachCustomerGrouping
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures1.DivisionalStructuresCharacteristicsofDivisionsOrganisationsmaybestructuredwiththefocusongeography,products(orservices)&customers(ormarket)EachDivisionwithinacompanyisself-contained–DivisionalManagershaveresponsibilityfortheirbusiness-levelstrategyandtocompeteintheirownmarket-placeEachDivisionhasacompletesetofFunctionsDivisionalisationisaformofDecentralisation.
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures1.DivisionalStructuresDisadvantages…ismorewastefulofresources…..itmustduplicatepersonnelandequipmentorlosetheadvantagesofspecialisation(Mintzberg,1983)Cannottakeadvantageofeconomiesofscale(Mintzberg,1983)Divisionswithinthesamecompanycouldenduptryingtomarkettothesamecustomers(Mills&Friesen,1986)Divisionalorganisationsoftendriftintoahodgepodgeofcentralisedanddecentralisedactivity(Peters&Waterman,1982)
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures2.FunctionalStructureCompanies,(andDivisions),organisetheirworkingactivityaroundteams.Themostcommonteam-structureisbasedonFunctionse.g.Production,Marketing,Sales,HumanResources,R&D,Finance,CustomerServices,etc.
FunctionalStructureHeadOfficeProductionBusinessDevelop-mentMarketingSalesR&DPurchasingFinanceHumanResourcesCustomerServicesFunctions
FunctionalisationFunctionalStructuresORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures3.MatrixStructure
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructures4.Handy’sStructures(Handy,1993)WebStructureOrganisationbuiltaroundthefounder/ownerwithpowercentralisedinthehandsofafewkeyindividualsGreekTempleOrganisationbaseduponfunctionalspecialismsanddefinedroles,commoninabureaucracy
Handy’sStructures(contd)NetAmatrixinwhichprojectteamsareco-ordinatedbylineandfunction–emphasisisuponthetaskClusterRelativelyindependentandself-supportingindividualse.g.professionalpractitioners
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructuresCentralisationCentralisationreferstothedegreetowhichtherighttomakedecisionsandevaluateactivitiesisconcentrated.(Koufteros&Vonderembse,1998)AdvantagesEasierimplementationofacommonpolicyfortheorganisationasawholeProvidesaconsistentstrategyacrosstheorganisationMakesforeasierco-ordinationandmanagementcontrolPreventssub-unitsbecomingtooindependentImproveseconomiesofscaleReducesoverheadcostsAllowsformorestringentcontrol
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructuresDecentralisationDecentralisationiswhenarelativelylargenumberofdecisionsaretakeninthedivisionsoroperatingunits.Peopleintheoperatingunitsworkastheythinkbest,providedtheydelivertheresultsexpectedbycorporatelevelandkeepwithinsomebroadguidelines.e.g.TheBranchManagersofthelocalsupermarketstoreshavingfreedomoverpricingandpromotionalactivities.AdvantagesAllowsmoreflexibilityinmeetinglocalneeds:DivisionalorBranchmanagershavelocalexpertiseCanrespondmorerapidlytocustomerneeds,marketforces,competitionandenvironmentalchangeConsequently,improvedlevelofcustomerserviceGiveslocalmanagersmorescopeandimprovesmotivationGivesthemgreaterchallenges,autonomy,jobsatisfactionandimprovesmoraleStimulatesinnovationandpromotesentrepreneurshipProvidesforbetterstaffrecruitmentandretentionTailorsconditionsofservicetolocalneedsFormulatespay/benefitsstrategyaccordingtolocalsituation
ORGANISATIONALSTRUCTURE&MANAGEMENTOrganisationalStructuresFactorsInfluencingStructurePowerCulture–values,beliefs&attitudesLeadershipstyleSizeofthebusinessScaleandcomplexityoftheorganisationTechnologyNatureofthemarketStaffSkills–strengths&weaknessesofkeypersonnel
ORGANISATIONALCHANGEChangeisnecessaryiforganisationsaretosurvive.Leadersinorganisations,fromsmallcompaniestomajorcorporationsandgovernmentagencies,havehadtoreconceptualisealmosteveryaspectofhowtheydobusinesstomeetthechangingneedsofcustomersorclients,keepemployeesmotivatedandsatisfied,andremaineffectiveandcompetitiveinacomplex,globalenvironment.Daft,2021“Whentherateofexchangeoutsideexceedstherateofchangeinside,theendisinsight”.JackWelch(FormerChairman&CEO,GeneralElectric)
ORGANISATIONALCHANGETypesofOrganisationalChangeBusinessProcessRe-engineering(BPR)DelayeringMergers&Acquisitions(M&As)DemergingDownsizingOutsourcing
ORGANISATIONALCHANGEOrganisationalChangeKotter’s8-StepChangeModel(Kotter,1996)Step1:EstablishingaSenseofUrgencyHelpothersseetheneedforchangeandtheywillbeconvincedoftheimportanceofactingimmediatelyStep2:CreatingtheGuidingCoalitionAssembleagroupwithenoughpowertoleadthechangeeffort,andencouragethegrouptoworkasateamStep3:DevelopingaChangeVisionCreateavisiontohelpdirectthechangeeffort,anddevelopstrategiesforachievingthatvision.Step4:CommunicatingtheVisionforBuy-inMakesureasmanyaspossibleunderstandandacceptthevisionandthestrategy
Kotter’s8-StepChangeModel(contd)Step5:EmpoweringBroad-basedActionRemoveobstaclestochange,changesystemsorstructuresthatseriouslyunderminethevision,andencouragerisk-takingandnontraditionalideas,activities,andactions.Step6:GeneratingShort-termWinsPlanforachievementsthatcaneasilybemadevisible,follow-throughwiththoseachievementsandrecognizeandrewardemployeeswhowereinvolved.Step7:NeverLettingUpUseincreasedcredibilitytochangesystems,structures,andpoliciesthatdon"tfitthevision,alsohire,promote,anddevelopemployeeswhocanimplementthevision,andfinallyreinvigoratetheprocesswithnewprojects,themes,andchangeagents.Step8:IncorporatingChangesintotheCultureArticulatetheconnectionsbetweenthenewbehavioursandorganizationalsuccess,anddevelopthemeanstoensureleadershipdevelopmentandsuccession.
ORGANISATIONALSTRUCTURE&MANAGEMENTandORGANISATIONALCHANGEReferencesDaft,RichardL.(2021)TheLeadershipExperience.TjhomsonSouth-WesternDrucker,P.F.(1989).ThePracticeofManagement.HeinemannProfessionalHammer,M.&Champny,J.(1993).ReengineeringtheCorporation:AManifestoofBusinessRevolution.Handy,C.B.(1993).UnderstandingOrganizations.4thedn.PenguinJones,G.,George,J.&Hill,C.(1998).ContemporaryManagement.Kotter,JohnP.(1996)LeadingChange.HarvardBusinessPressKoufteros,X.&Vonderembse,M.(1998).‘TheImpactofOrganizationalStructureontheLevelofJITAttainment:TowardsTheoryDevelopment’.InternationalJournalofProductionResearch,36(10),2863-2878.Mills,D&Friesen,G.(1986).BrokenPromises:AnUnconventionalViewofWhatWentWrongatIBM.Mintzberg,H(1983).StructureinFives:DesigningEffectiveOrganizations.Mullins,L.J.(2002)(also2006).EssentialsofOrganisationalBehaviour.FTPrenticeHall.Ouchi,W.G.(1981).TheoryZ:HowAmericanBusinessCanMeettheJapaneseChallenge.AddisonWesley.Peters,T.&Waterman,R.(1982).InSearchofExcellence:LessonsfromAmerica’sBest-runCompanies.Harper&RowPugh,D.&Hickson,D.(1996).WritersonOrganisations.5thedn.