Leading Organizations II - The Changing Organizational World, Problems and Prospects

What is driving the changes in strategic design/structure of today’s organization? What are the dimensions of change? Where are we in the “transition” process? Who’s winning? Losing? The Speech … (circa 1995-2000) “To compete effectively we must have a lean and flexible organization that can deliver the world’s most effective (document-processing) products and services …” Paul Allaire (Xerox) (part of an announcement in 1996 that Xerox will cut 10,000 jobs the next year) Variations … (circa 1995-2000) “We have to recognize that to progress, we must do everything differently … and become a more innovative and flexible company … this is a revolution and it must begin at the top.” Yoichi Morishita (Matsushita) “A major overhaul of the federal bureaucracies is long overdue. A lean, flexible and service oriented government will result from decentralizing authority, giving workers more responsibility, putting the customer first, and using market mechanisms to cut costs.” The “Gore” Plan to “reduce useless bureaucracy … 1998-9 Variations in practice … “… When a company (in Virgin) gets to a certain size, say 50 people, I put them in a new building … So we actually set up 30 or so small record companies …” “… Speed is something we are better at than most other companies. We don’t have formal board meetings, committees, etc. If someone has an idea, they can pick up the phone and talk to me. I can vote, ‘done, let’s do it.’ Or, better still, they can just go ahead and do it.” Richard Branson, Virgin (1998) Variations in practice … “The obsession with decentralization is a part of ABB. What I’ve tried to do is recreate small company dynamism and creativity. I have also made an effort to reduce the layers of management in the company. The advantages lie in communications and feedback. We try to make an environment where you can have creative, entrepreneurial people … We are now experimenting with cutting out a whole layer of clerical supervision to give teams of workers bigger responsibility. I think there is huge potential here … The obstacles to tapping it go back to the roots of the way we run our industrial organizations. It all comes out of the Frederick Taylor system: Managers do the thinking and the workers do the working. This attitude has got to be changed. One doesn’t need a blue or white collar. We are all in the same boat.” Percy Barnevik, ABB (1998) Variations in practice … “…The organizational pyramid is the cause of much corporate evil, because the tip is too far from the base. Pyramids emphasize power, promote insecurity, distort communications, hobble interaction, and make it very difficult for the people who plan and the people who execute to move in the same direction.” Ricardo Semler (1989) Key Challenges for the 21st Century … Rapid Technological change Hypercompetition Altered work relations New business models ... But keep in mind … Business cycles Consulting companies Business schools Political and cultural context Leading to … “We are an innovative, top-down, bottom-up, diagonally driven, vertically integrated global organization, utilizing cross-functional teams within diversifying divisions supporting each other in a soft matrix network format following the customer focused directions set forth by integrative devices called strategic business units.” From: Anonymous manager in a firm whose CEO emphasized “structural flexibility.”(2000) What’s in a name ??? Re-engineered organization Re-invented organization Re-structured organization Re-birthed organization Re-re-organization Virtual organization Network organization Lean organization Horizontal organization Hollywood organization Knowledge organization Learning organization Federal organization Process organization Pizza organization Glocalized organization Delta organization Post-bureaucratic organization Post-paradigmatic organization Post-structural organization Post-Modern organization Post-Industrial organization Post-heroic leader organization … Post-toasty organization Changing forms …THE 1990’S Old/Traditional New/Transformed Organization Job design Job assignment Structure of job Process of work Training Supervision Decision making Scheduling Quality Control Career Paths Promotions Pay Hours Commitment Participation Labor Force etc. Tall hierarchy Narrow Single job Individual task Rules, standards Job specific First-line manager Top-down Done by manager Specialized function Upward, linear By seniority By grade Fixed Time Low Homogeneous ETC. Flat hierarchy Broad Job rotation Teamwork Ongoing learning Broad skills Team facilitator Shared Done by team Team function Lateral, flexible By skills & org needs By results Flexible Initiative High Diverse ETC. Changing forms in Semco 1980 1989 12 Levels (Job Classification) Appraisal top-down Job schedule fixed Search workers Executive “perks” Large facilities Executives hire Large corporate staff Wages set by personnel No profit sharing Quality Control Department Production quotas Major decisions at top No access to financial info 3 Levels Bottom-Up (360degrees) Hours self-set No search No executive perks Break-up large facilities Subordinates hire 75% reduction of staff Workers set own wages Profit sharing No QC Department No production quotas Vote on major decisions Unlimited info … and more CONTRASTING ORGANIZATIONAL FORMS Old Model New Model Bounded Networked Hierarchical Flat Fixed (rules and procedures) Flexible Homogenous Diverse Home-Based Global