Week 2 by Audrey

New Organizational Structure Maximizes Calvin Klein Business

The assigned reading for this week, I admit, is my first real exposure to
organization design. The more I delved into the reading the more complicated
it seemed. What simplified it for me was going back to and understanding
Galbraiths (2011) Star Model represented as the “foundation on which a
company bases its design choices.” (pg. 1). I then raised the question to
myself, “Would you be able to identify in the real world the design policies
used by a company?” I recognizably found an article in the Wall Street Journal
titled “Warnaco Announces New Organizational Structure and Key Executive
Appointments at Its Calvin Klein Business to Support Its Global Growth
Strategies,” (March, 2012) that talked about a new organizational structure
for Warnaco’s Calvin Klein business. The highlights of the article subliminally
indicated that the design policies of “The Star Model” (Galbraiths, 2011) were
used in the design process. The article identified the long-range strategy of the
company, the new structure of segmenting the Calvin Klein business into two
components, the people, new and promoted personnel, to lead the management
charge of the two components and the processes of which they will meet their
objectives.

As the article talked about the two new business components, I believe it clearly
showed how they can support the identification as a new business as Lorsch
identified in his 1975 Notes on Organization Design. The article also gave
the perception that Warnaco is confident of their decision to move into new
markets, grow their direct to consumer channels and increase market share by
establishing the two centers of excellence. Also by establishing the two centers
they are a true example of one of today’s built-to-change organizations. (Worley
& Lawler, 2006). The article insinuates they are in touch with their markets, they
know where their new markets are and they will capitalize on every opportunity
as it arises.

Lastly, in Warnaco’s drive to accelerate growth and ultimately gain more market
share, I believe they recognized the need to do something different to get ahead
of the competition and that was the development of the centers of excellence that
will explore every way to maximize their potential. According to the article it looks
like they have some growth potential in the direct-to-consumer market. I believe
this strategy was shaped by the response of the consumer therefore confirming
one of Galbraith’s six organization shapers, “Buy Power”. (2002).

References

Business Wire (March, 2012). Warnaco Announces New Organizational
Structure and Key Executive Appointments at Its Calvin Klein Business
to Support Its Global Growth Strategies.Wall Street Journal. Retrieved on
May 26, 2012 from
http://online.wsj.com/article/PR-CO-20120322-904924.html

Galbraith, J. (2002). An Executive Guide to Strategy, Structure, and Process.
Designing Organizations, 3.

Galbraith, J. (2011). The Star Model.

Lorsch, W. (1975). Note on Organizational Design. Harvard Educational Review,
14.

Worley, C. & Lawler, E. (2006). Designing Organizations that are Built for
Change. MIT Sloan Management Review. 48(1), 21.

Week 2 Post by Leslie

(Note: In my post this week, I evaluate an academic publication and discuss how it relates to our readings. This is my first of three posts that will take this form.)

The article I selected this week is an older one, but I like the way it simultaneously references and challenges the limits of Lorsch's contingency theory while intersecting several of the week's other assigned readings.

In his article, "The selection interview: Contingency theory and beyond," Jablin (1975) embraces Lorsch's contingency theory as an academic exercise but raises a number of questions related to its application in a real-world environment. Specifically, Jablin (1975) attempts to apply Lorsch's "concept of fit" (1987, p. 3) to the business interview process.

Jablin begins by telling us what we already know from our reading: that Lorsch's contingency theory relies upon assumptions from open systems approach (1975). This approach "builds on the principle that organizations, like organisms, are 'open' to their environment" (Morgan, 1998, p. 40). Jablin (1975) goes on to say that the environments in which an organization exists are numerous rather than singular; he further argues that organizations are not only influenced by their environments but dependent upon them for survival. In connecting open systems theory with Lorsch's emphasis on the importance of "a three-way fit" between employees, tasks, and organizational design (1987, p. 3), Jablin reasonably concludes that "if an organization is to survive, it must strive to fit the character of the individual with the environmental system surrounding the task" (1975, p. 2).
The remainder of the article addresses two practical questions related to this conclusion:

1. "How does one measure the ability of prospective and present employees to fit into the organizational environment?"
2. "What can the manager of an organization do today to prepare for the eventual implementation of Contingency Theory in his/her organization?" (Jablin, 1975, p. 3)

The first question is of particular relevance to human resources practitioners who wish to apply the principles of contingency theory in recruiting and hiring processes. And the second question, I would argue, is especially relevant for us as students of communication management theory. It might as well be rephrased to read, "how can we apply our academic knowledge of contingency theory in the workplace?"

Though Jablin's article goes on discuss these questions in great detail, he recommends that interviewers begin by educating themselves on the skills required "for the applicant to successfully fit both the job and organization" (1975, p. 3). These ideas are echoed in Worley and Lawler's article about creating agile organizations. The authors recommend that "built-to-change companies... specifically look for people with initiative and the right attitude, including the desire for professional growth" (2006, p. 19).  This seems straightforward enough -- but then again, when is the last time you saw a job posting that gave "social abilities" equal billing with "task abilities"(Jablin, 1975, p.3)? At most, we see a surface treatment of attitudinal requirements described in such watered-down terms as "must enjoy taking on new challenges" or "requires careful attention to detail."

Like Jablin, I find Lorsch's blunt appraisal of the differences in employee "psychological makeup" refreshing (1987, p. 3). There should be nothing wrong with acknowledging that some employees are comfortable -- or even prefer -- the mundane and predictable, while others enjoy a lack of structure and thrive with a minimum of feedback or direction. To pretend otherwise may saddle organizations with a workforce that lacks diversification and is less than optimally effective.

While I've Got Your Attention...
I've got a question about the reading. Did anyone else think that Lorsch's figure for reciprocal "patterns of required integration" (1987, p. 6) could benefit from some additional arrows? While I understood that the  sequential pattern describes organizations with a linear task flow through departments (e.g., factories), it seems to me that the reciprocal pattern is meant to apply to a broader range of departmental structures, including non-linear ones (Lorsch, 1987). Indeed, without the extra lines I've superimposed over Lorsch's original graphic [below], one could hardly call this pattern "the most complex" (1987, p. 5):

(Lorsch, 1987, p. 6)

References

Morgan, G. (1998) Nature intervenes: Organizations as organisms. In Images of organizations: Executive edition (pp. 35-67). Thousand Oaks, CA: Sage Publications.

Jablin, F. (1975). The selection interview: Contingency theory and beyond. Human Resource Management, 14(1), 2-9.

Lorsch, J. W. (1987, January 30). Note on organization design [Case no. 9-476-094]. Boston: Harvard Business School Publishing.

Worley, C. G., & Lawler, E. E. (2006). Designing organizations that are built to change. MIT Sloan Management Review, 48(1), 18-23.

Week 2 Post: By: Jayson Paretts

In thinking about my response to this week’s readings, I wanted to share with everyone an interview that I conducted with the owner of my company that I work in here in Las Vegas.  The company specializes in public relations and the name of the owner is Bob Tyson.

I asked Mr. Tyson how he keeps his company competitive in a small market that is saturated with other public relations companies.  He told me “the entire trick behind it is to be open to change and innovations.  You must embrace new things, which means embracing new people in certain situations as well.”  I wanted to know more about the concept of change and Mr. Tyson said “he really loves to change the look and feel of his company as it is warranted depending on the needs of the consumers the company is servicing.”

I found this entire discussion regarding change to be very interesting and I thought it related well to the reading we were assigned for this week.  I look forward to sharing more thoughts from Mr. Tyson in future posts as we cover subjects that will allow me to do so.

Week 2 Post by Phillip Cortez

As a leading content provider for today's US Hispanic consumer, Telemundo strives to integrate emerging technologies in order to broaden its reach, increase its market share, profitability and enhance the viewer experience. This is why the readings for the week truly made me reflect on the organization that I work for, ZGS Communications, which owns the largest number of Telemundo stations in the United States.

There are advantages to being an affiliate station, the main one being that a certain level of autonomy is enjoyed. The station is essentially considered a distributor of Telemundo content, much like how a beer distributor would distribute products exclusively for Anheuser Busch. Although their are certain guidelines for being an affiliate, ZGS affiliate stations are not controlled by Telemundo. This means that ZGS Communications can create its own revenue streams.

The disadvantage here is that ZGS affiliate stations do not follow the organizational model that Telemundo stations do. The case example Group 1 provided was the integration of a digital product called holaciudad.com is study in how a change in organizational design would essentially alleviate many of the issues that have come about since holaciudad.com was introduced to select markets in the Unites States.

According to Worley and Lawler, organizations that fit the built-to-change mold seek out candidates that want to learn quickly and like change (Worley & Lawler, 19). But time and time again, I have seen the company hire sales personnel that have no experience in selling digital media. Combine this with the company's reluctance to provide ongoing training in selling digital media, and it's not wonder why the company is not meeting its digital sales goals.

The lack of ongoing training has resulted in an extreme reluctance to embrace holaciudad.com on the part of many station General Managers. Though television stations have a typical hierarchical structure, introducing holaciudad.com to the market meant that ZGS Communications needed to adhere to the built-to-change characteristic of shared leadership (Worley & Lawler, 22). Rather than "spreading knowledge across many people" (Worley & Lawler, 22), station General Managers are running for the hills.

Essentially, ZGS Communications took a "do what I say" approach in telling stations to sell the new digital product after providing a light, initial introduction to it. This is counter to multiple categories to what the Star Model (Galbraith, 1) shows us.

I took great interest in reading Galbraith Chapter 6, Designing a Reconfiguring Organization, because I feel that this could help lead a resurgence of this digital product for ZGS Communications. Creating a "cross-functional line team" (Galbraith, 79) comprised of the right personnel associated with holaciudad.com will essentially create a "miniature business unit" (Galbraith, 81) designed to meet challenges that arise an ever-changing digital world.

References

Galbraith, J.R. (2002). Designing a reconfigurable organization. In Designing organizations: An executive guide to strategy, structure, and process (pp. 73-90). San Francisco, CA: Jossey-Bass.

Galbraith, J.R. (2002). Introduction: Six immutable forces shaping today's organization. In Designing organizations: An executives guide to strategy, structure, and process (pp. 1-8). San Francisco, CA: Jossey-Bass.

Worley, C., & Lawler, E. (2006). Designing organizations that are built to change. MITSloan Management Review, 48(1), 19-23. 

Week 2 Post by Paul Merrill

Today's conquering giant of innovation within consumer and business technology, Apple, Inc., went through some very dark times in the 1990's. They made several choices that almost lost their battle to continue to introduce new products that hit the targets of business and consumer needs. They almost failed to keep their ability to sell what was their core product (no pun intended), computers.

One of Apple's attempts to diversify was their introduction of a digital camera in 1994, the QuickTake. According to Carlton (1997), "Within four years, the digital camera market would begin taking off, and as usual, Apple would largely sit on the sidelines of a category of product it had helped popularize" (p. 170). Marketing blunders were made and a lack of awareness of and taking action to face the competition ultimately killed the product. Morgan refers to an organization as an organism (1998, p. 35). A healthy organization operates in an open system, where its interaction with the surrounding environment keeps the organization healthy and relevant (Morgan, 1998, p. 41).

Apple continued their lack of awareness of the surrounding competitive business environment by having an unhealthy dependence on Microsoft, their arch-rival. "90 percent of the Mac's spreadsheet market was dominated by Microsoft Exel ..." (Carlton, 1997, p. 274). Their relationship with Microsoft was not only competitive but spiraled into hurting their client base for the sake of not sharing technology. They avoided using Microsoft's OLE (Object Linking and Embedding), a system for developing software that would have made software development much easier for Macintosh developers (Carlton, 1997, p. 274).

Thankfully, when Steve Jobs took over as interim CEO in 1997, things began to change. This closed environment corporate culture became more open, to a degree. Corporate willingness to not just adapt but to innovate, both internally and externally, allowed Apple to become the very healthy company it is today. Handsomely rewarding innovative employees such as Jonathan Ive, their lead industrial designer, has helped lead to their current success. Ives is the designer of Apple products including the iMac, the iPod, and the iPhone. This is an excellent example of Worley and Lawler's idea of "person-based pay" (Worley & Lawler, 2006, p. 20). Rewarding Jonathan Ive for his skill and creativity rather than solely for his position within the company provided him with the motivation to ascend new heights of inventiveness. His achievements led to his appointment by the Queen of England as a Knight Commander of the British Empire ("Apple's Jonathan Ive gets knighthood," 2011).

References:

1. Carlton, J. (1997). Apple : the inside story of intrigue, egomania, and business blunders. New York, NY: Random House, Inc.

2. Morgan, G. (1998). Images of organization. San Franciso, California: Berrett-Koehler. Thousand Oaks: Sage.

3. Worley, C. & Lawler, E. (2006). Designing organizations that are built for change. MIT Sloan Management Review, 48(1), 18-23.

4. Apple's Jonathan Ive gets knighthood in honours list (2011). Retrieved May 27, 2012 from http://www.bbc.co.uk/news/technology-16367022

Week 2 post by Andrew

This week’s readings present a variety of approaches to organizational design, with proper regard given to strategy, structure, processes, rewards and people – together known as the Star Model as outlined by Galbraith (2011), as well as managing talent and information and decision-making processes, among other concepts delineated by Worley & Lawler (2006).

When considering organizational design approaches in the real world, I found inspiration in an unlikely source: professional hockey general managers. Mike Colligan, a contributor to Forbes.com, recently interviewed Jason Farris, author of “Behind the Moves: NHL General Managers Tell How Winners Are Built” and outlined a variety of different approaches used by these general managers in the pursuit of the ultimate goal: the Stanley Cup.

It should, of course, be stated that professional hockey franchises are different from many other industries: the teams need one another for the ultimate success of the business of hockey, and with the advent of salary caps and shared television-rights funding, there is more of a level playing field when it comes to funding than in typical businesses.

What makes hockey a valid study in organizational design is that when many other resources are equal, how a general manager chooses to run his organization can be isolated as a primary factor in the franchise’s success. Let us consider newly-appointed Montreal Canadiens general manager Marc Bergevin, at the helm of one of the league’s most storied franchises.

As Colligan explains, “Controlling the flow of information and using it to drive internal decision-making is critical to success, but no optimal method exists that automatically translates into Stanley Cups.”

Worley & Lawler (2006) use a near-identical conceptualization of a manager’s responsibilities regarding information and decision-making: “to ensure good decision making, information needs to be transparent and up-to-date, indicating the current condition of the organization’s capabilities and providing a clear view of how the company is performing relative to its competitors and its strategy” (p. 22).

In hockey, Worley & Lawler’s idea would relate most closely to hockey operations and scouting, as a general manager’s most important job is to select players that will fit into the team’s philosophy, decisions he must make based on the information and recommendations provided by his team of experts.

Bergevin is faced with a challenge similar to leaders in other industries: how to best organize his staff. In the article, he is quoted as saying “I’m not scared of things I don’t know because I’m going to make sure I surround myself with the people who can help me make the right decisions” (Colligan, 2012). This would indicate he favors a network approach, where the informal organizational structure is ever-changing and “dependent on actions taken by people through mobilizing personal ties, that the only organizational structure that has reality for people is an informal one” (Lorsch, p. 9).

The other option for Bergevin is to organize his group of scouts and hockey operations professionals into silos, a philosophy advocated by Lou Lamoriello, GM of the New Jersey Devils. Lamoriello, Colligan explains, develops an environment where each scout develops information for Lamoriello’s use and his alone, creating an environment that favors quality knowledge over cooperation. While this more formally-structured approach may not win Lamoriello many friends – inside or outside of his organization – it does win hockey games, Colligan points out, as the Devils have been a playoff team 14 of the last 15 years, as well as this year’s Eastern Conference champions.

So how best to organize the off-ice team around you? Marc Bergevin must tackle this issue this summer – some of the league’s most passionate fans, not to mention the stewards of the league’s third-most valuable franchise, are waiting.

References:

Colligan, M. (2012, May 25). What Makes A Successful NHL General Manager? New Book Takes A Look. Forbes. Retrieved from http://www.forbes.com

Galbraith, J. (2002). Designing Organizations. San Francisco, CA: Jossey-Bass Publishers.

Galbraith, J. (2011). The Star Model. 1-6.

Lorsch, W. (1975). Note on organizational design. Harvard Educational Review, 1-21.

Worley, C. & Lawler, E. (2006). Designing organizations that are built for change. MIT Sloan Management Review, 48(1), 18-23.

Week 2 Post by Justin McAneny

This weeks readings made me want to re-watch the 1999 Mike Judge cult-classic movie “Office Space.”  The movies’ main character, Peter Gibbons, is what Wren and Bedian (Wren & Bedian, 2009, p. 123) would describe as a soldier.  This is evident when Gibbons says, “It’s not that I’m lazy, it’s that I just don’t care.”  (To watch the clip click here.)  But why doesn’t he care?

In the movie, Gibbons is bored in his job working in what Paul referred to last week as a “cube farm” environment.  The management of Gibbons’ “cube farm” would benefit from reading any of our readings this week, but starting with Morgan’s “Images of Organization” in which Morgan discusses Abraham Maslow’s Theory of Motivation that states that people (employees) want “full growth and development” (Morgan, 1998, p. 38).

A piece from Teresa’s Amabile's “The Progress Principle” published at www.washingtonpost.com addressed four factors that can cause Gibbons, and employees like him, to have such an attitude. 

Amabile takes the backhanded approach and lists four steps in how to make employees miserable: “Never allow pride of accomplishment. Miss no opportunity to block progress on employees’ projects. Give yourself [as the supervisor] some credit. Kill the messengers” (Amabile).

Amabile’s four steps of ineffective management grind against the three goals of management that Lorsch describes as influencing staff, creating an environment of “collaborative effort,” and “creating an organization that is cost effective” (Lorsch, 1987, pp. 1-2).  If the employee succeeds, it would seem the organization succeeds.

And that success could stem from understanding the “Organismic Metaphor” (Morgan, 1998, p. 63) that states everything needs to work together to work well to achieve the “full growth and development” the Theory of Motivation (Morgan, 1998, p. 38).

However, with each theory and idea, I wonder how much of it is practical once human nature and other uncontrollable X-factors are part of the equation?  At the end of “Office Space” (sorry, spoiler alert) it turns out Gibbons was just in the wrong occupation.

References:

1.  Amabile, T. & Kramer, S. (2012, March 6). How to completely, utterly destroy an      employee’s work life. The Washington Post. Retrieved from                                                http://www.washingtonpost.com

2.  Judge, M. (Director). (1999). Office space. Motion picture. United States: Twentieth               Century Fox.

3.  Lorsch, J.W. (1987, January 30). Note on organization design [Case no. 9-476-094].                 Boston: Harvard Business School Publishing.

4.  Morgan, G. (1998). Images of organization. San Franciso, California: Berrett-Koehler. Thousand Oaks: Sage.

5.  Wren, D.A. & Bedeian, A.G. (2009). The evolution of management thought. Danvers,   MA: John Wiley & Sons.

Brian Bleau - week two

Organizational Design –  T-Mobile

Brian Bleau

Prior to beginning my career in the communication field, I worked for T-Mobile as a retail sales representative where, under the corporate umbrella of T-Mobile USA and German parent company Deutsche Telekom, I encountered many aspects of organizational design discussed in this week’s readings.

The wireless industry is a rapidly changing one and as the technology used to create networks and devices never stops evolving, if a company within the industry wants to succeed, neither can its strategy, structure, processes, people or rewards; elements that make up Galbraith’s (2011) Star Model.

As one of the “smallest of the large” wireless carriers in the United States, T-Mobile recognizes (internally, at least) that it will never win an advertising battle against AT&T or Verizon so it takes a different approach. As Galbraith (2002, p. 89) said,”when competitive advantages do not last very long, neither do organizations. Competitive advantage results from a string of short-term advantages delivered through a reconfigurable organization.” And these continuing short-term advantages are exactly what T-Mobile has set out to capture.

The company formed product development teams and retail “champions,” or product specialists, implementing Galbraith’s (2002) practice of specialization in the R&D and retail realms to help develop, promote and educate consumers and other employees about new services like “hot spot calling,” a service that provided full signal if connected to a WiFi network, regardless of network coverage, and the previously unknown Google Android platform. The company evolved its structure (Galbraith, 2002) to successfully launch these products, carving into AT&T’s market share and adding customers who were willing to leave their iPhones behind in exchange for cheaper rates and flexible, innovative service offerings.

T-Mobile’s recruiting and rewards practices in my market also shifted noticeably following AT&T’s iPhone launch.  Managers began to recruit younger, more technically knowledgeable sales reps than those remaining from the company’s days as VoiceStream Wireless.

Market and store managers empowered their new crop of hip ”geeks” to set out on their own and attend college and community events, create flyers promoting upcoming launches and set up in-store demos to highlight new products. This entrepreneurial freedom was welcomed by the new employees who were recruited to embrace it, but not the “old dogs” who were slow to move past VoiceStream’s organizational structure and employee expectations, resulting in culture clashes (Lorsch, 1975) and unclear perception of their responsibilities.

Local cross-functional teams (Galbraith, 2002) were developed, comprising retail store staff, development engineers and regional retail management to create a corporate structure that was in-tune the needs and feedback of local staff and customers, leading to a more uniform objectives.

In addition to the company’s standard commission policies, T-Mobile would also offer store and market bonuses and rewards, including parties and other events, for the highest-performing local markets and retail locations.  For instance, when the company launched the G1, Google’s first Android phone, T-Mobile added an extra “kicker” to sales reps’ commission payouts for each device sold and implemented store bonuses, which managers were free to distribute, or not distribute, however they chose. By implementing these incentives, individual employees, their respective stores and in consequence, local markets were all aligned to accomplish the common goal (Galbraith, 2002) of launching, promoting and selling T-Mobile’s new products and services.

Perhaps the reason that T-Mobile’s business model does not hinge on predictability is because the wireless industry has never changed slowly or predictably. Since its inception, it has been situated in a storm of technological advancement and corporate mergers and acquisitions. Constant change has always been “business as usual” (Worley & Lawlor, 2006, p. 23) and will continue to be in the foreseeable future.  By continuing to align its organizational structure with the talents of the employees that it aims to recruit (Lorsch, 1975), T-Mobile should continue to do well in the battles it carefully selects and engages in. As for winning the wireless war, remaining in the fight seems to be victory enough.

References

Galbraith, J. (2002). Designing Organizations. San Francisco, CA: Jossey-Bass.

Galbraith, J. (2011). The Star Model. (CMGT 500 PDF document).

Lorsch, W. (1975). Note on organizational design. Harvard Educational Review, 1-21.

Worley, C. & Lawler, E. (2006). Designing organizations that are built for change. MIT Sloan Management Review, 48(1), 18-23.

Week 2 Post by Will

Dell: Organizational Design Adapted for Change

Interview with Dennis M. Brass, Project Manager, Dell Shared Service Operations

Dennis Brass has been a project manager for more than 10 years, first with IBM and for the past two years with Dell in its Shared Service Operations division.  His department is one of several that provide reports on the status of computer information systems that are outsourced to Dell by large corporations.  In our one-hour interview we talked about Dell’s organizational design, how that design responds to quick changes in the technology market and how Dell creates an environment amenable to independent creative output.

1. Organizational Design – Dell has a “flat” design structure as opposed to a strongly hierarchical system. Brass agrees with Worley and Lawler’s assessment (2006) that a wide surface area tends to encourage greater contact among employees with the external environment, placing them in greater contact with clients’ needs. This flat structure necessitates the need for lateral interaction among project managers, with less of an emphasis on responding to direct commands from above. This increases the span of control. Brass notes that only four steps separate him from Dell’s CEO and founder, Michael Dell. “Of course there is a hierarchy between the project managers and ‘the king,’ but power is fairly evenly spread. You don’t see a lot of empire building, people trying to feather their nests. Dell has found that by flushing out the middle managers more work gets done. You see a matrix of people from different departments getting together to solve problems.”
2. Reconfigurability –  Dell is a working example of Galbraith’s reconfigurable organization that can adapt quickly to environmental changes. Galbraith cites the importance of an organization’s ability to form internal teams and networks (1995) in response to sudden external changes, and Brass notes that Dell has refined this to a science. Departments can be quickly reconfigured to respond to the need for price adjustments or new product innovation. He cites a recent effort to bring a number of parallel reporting departments under one umbrella to streamline operations and create greater uniformity of output. The effort was later abandoned, but he recalls how the exercise brought out the core traits of flexibility and teambuilding in his colleagues, qualities actively sought out by Dell in its hiring practices. “People like to control their empires, but at Dell you have to be ready to move around and embrace change. You can’t always stay in one place. They do this by design, to keep people on their toes.”
3. Environmental adaptability – Brass notes the importance of Dell’s ability to react quickly to changes in the technology marketplace (i.e. its external environment). The growing popularity of tablets and personal data assistants (PDAs) has caused Dell to shift its thinking away from its trademark laptops and desktops, and this has led to commensurate changes in organizational structure. Design teams have been mobilized and project managers shuffled in an effort to stay ahead of the technology curve.  “When Western Union figured out it wasn’t going to make money selling telegrams, it shifted to money transfer, and now you see Western Unions everywhere. It’s no different here. Technology-based companies like Dell must be able to continually evolve.”
4. Getting the job done – Brass feels that Dell embodies the concept of fit, which, per Lorsch’s description (1975), is the ideal melding of an individual’s psychological makeup, the nature of the task at hand and the organizational design structure. Team members are hired more on the basis of creativity and adaptability than pure technical know-how. This enables the constant shuffling and reshuffling of teams as changing circumstances warrant. Team members are encouraged to contribute ideas for product innovation and are duly rewarded through generous bonus packages pegged on merit more than seniority. And the flat organizational design provides freedom for self-motivated creative action. “Everyone brings something to the table.  That’s what helps Dell continually diversify.”

____________________

References

Galbraith, J. (1995). Designing Organizations. San Francisco: Jossey-Bass Publishers.

Lorsch, W. (1975). Note on Organizational Design. Harvard Educational Review, pp. 1-21.

Worley, C. & Lawler, E. (2006). Designing Organizations that are Built for Change, MIT Sloan Management Review, 48, pp. 18-23.

Week 2 Application Assignment: Coleman

As I was driving to work the other day, I heard an interview on NPR that tied directly to the assigned reading for this week. On Morning Edition, Renee Montaigne interviewed Ursula Burns, the CEO of Xerox (Burns, 2012).

In the interview, Burns discussed the transformation underway at Xerox, a business built on and well-known for paper copiers, has had to transform itself to succeed in a digital environment (Burns, 2012).   As Burns noted, “We became so good at this one business process that we didn’t think like all the rest of them…” (Burns, 2012).  

While the interview didn’t delve into the organizational structure that allowed or enabled the transformation, the story she told echoed some of the key themes from this week’s readings, particularly, the forces that shape organizations (Galbraith, 2002).  As Galbraith notes, today’s companies are operating in a world of temporary advantage where companies must change frequently and where companies must increasingly add knowledge to products (Galbraith, 2002). 

These realities, coupled with a market where the reliance on paper copying was shrinking, led to strategic directional change at Xerox (Burns, 2012).  The new direction for Xerox is back office systems and infrastructure, expanding the definition of automation that made Xerox so successful in the past (Burns, 2012).   And aligned with Galbraith (2002), the Xerox strategic focus came about from customer requests; customers who had relied on Xerox for automation needs asked that the company extend the scope of its offering (Burns, 2012).  Rather than innovating in a new industry or line of products, Xerox moved into an adjacent area, as Burns (2012) said, “…it was in our neighborhood.”  

It would be interesting to look closer at the organizational structure that helped or hindered this transformation.  As Burns notes, “…you would be under-using your assets if you don't figure out a way to become more relevant as the world transforms and evolves. And that's what - a big piece of what a CEO does.” (Burns, 2012)

References

Burns, U. & Montaigne, R. Transcript from Morning Edition: Xerox CEO: if you don’t transition you’re stuck (5/23/12). Retrieved from http://www.npr.org/2012/05/23/153302563/xerox-ceo-if-you-don-t-transform-you-re-stuck. (Original work broadcast May 23, 2012).

Galbraith, J. R. (2002).  Designing Organizations. San Francisco, CA: John Wiley & Sons, Inc.

Week 1 Post by: Jayson Paretts

I apologize for my post coming in late, but I have been very ill and there were some technology issues as well.
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Week 1 Post:

For the readings pertaining to week one, I was reminded of a personal experience of mine that I would like to share.  The personal experience is about how I had to recently fight the bank for the right to keep my home here in Las Vegas, Nevada.  The precept that got me thinking about all of this was the idea of risk management and how companies come to apply that theory to their business standards and practices.  I was particularly struck by the ideas of Fayol especially regarding the concept that individuals who exclusively help themselves show very little regard for others, be it their employees or customers.  This is exactly what happened to me in my dealings with my bank, which was J.P. Morgan Chase.  They have a system that lives up to the worst standards of many of the concepts that were discussed for the reading in week one.  Luckily for me, everything worked out in the end, but it was a very negative experience and it certainly opened my eyes to the entire notion of maintaining certain standards if you are a business of any sort.

References

Wren, D. A., & Bedeian, A. G. (2009). The evolution of management thought (6th ed.). New York, NY: John Wiley & Sons.

Nik Gurney Week02 Application

In my pursuit to better understand the dissemination of ethical culture within organizations I recently read a journal article titled The Influence of Organizational Design on Knowledge Transfer by Martin-Perez et al. (2012). The research team examined Spanish non-profits to gain insight into the way knowledge transfer is affected by organizational design traits like delegation and rewards systems (Martin-Perez, Martin-Cruz & Estrada-Vaquero, 2012). The NPOs examined serve people with disabilities. The researchers chose this particular set of NPOs because, “providing assistance to people with disabilities requires diverse technical staff with highly specialized knowledge” and “Managers of these small NPOs do not have all these kinds of technical knowledge, and thus they need to delegate to experts in order to take adequate decisions” (Martin-Perez, Martin-Cruz & Estrada-Vaquero, p.11, 2012).

The design challenges in NPO settings do not differ from the for-profit sector. It is my suspicion that the for-profit world could learn a great deal about effective management strategies through examining the NPO world more carefully.  Even though it is slightly dated now, the dilemma noted by Lorsch regarding managers treating research staff with the same rigidity as production personnel (pp.10-11, 1975) is still relevant today and could easily be remedied with the knowledge gained through the study Martin-Perez et al. (2012) conducted. What seems obvious, and is probably the first consideration that should be made, is the nature of research scientists’ work is dramatically different from production, and as such needs to be managed differently regarding time flexibility. What is not so obvious is the need for rewards. In examining the Spanish NPOs it was found that if an organization is to remain relevant and viable it is essential that it establishes an effective “intrinsic-rewards system” to keep employees engaged (Martin-Perez, Martin-Cruz & Estrada-Vaquero, p.2, 2012).

But wait, what do intrinsic rewards have to do with a highly compensated research scientist? It is understandable NPOs need to offer something in order to keep specialists around. Most NPOs don’t have the cash necessary to really keep these highly functioning people engaged. There is more to it than just money though. Extrinsic rewards work in concert with intrinsic rewards to retain highly trained individuals as well as ensure the transfer and retention of important knowledge within the organization even after they have left (Martin-Perez, Martin-Cruz & Estrada-Vaquero, 2012). You are probably asking still, so what? Odds are a highly compensated research scientist can most likely be a highly compensated research scientist at more than just one organization. Who’s to say an employee won’t pick up and leave (with all their knowledge) tomorrow to the competitor down the street? Proper intrinsic rewards can help reduce the appeal of a move and at the very least ensure an employee’s tacit knowledge is made explicit knowledge before separation (Martin-Perez, Martin-Cruz & Estrada-Vaquero, 2012).

Galbraith dwelled largely on the fact that an organization cannot stagnate and remain competitive (2002). The way he sees it is in order to succeed a firm needs to be light footed. When I originally read the two chapters from him I kept thinking of Mohammad Ali, “Float like a butterfly, sting like a bee.” [Perhaps another metaphor for Morgan; I highbred super butterfly-or just Ali… (1998).] This idea seems to paraphrase, “Thus the challenge is to design organizations to execute strategies when there are no sustainable competitive advantages. When product advantages are not sustainable over time, the winners will be those who create a series of short-term temporary advantages. Under this scenario, the leaders will be future-oriented and will continuously create capabilities that lead to customer value. They will move quickly to combine these capabilities to match and surpass current advantages (including their own)” (Galbraith, p.75, 2002) quite well. However, one advantage I see as sustainable is always attracting and retaining the most talented employees available in your industry. Part of the trick to doing this is having a reward system set up that keeps them engaged holistically. As Worley and Lawler point out traditional compensation systems “do little but reward people for surviving” (p.20, 2006). When properly rewarded and motivated to progress these individuals will fuel an organization with the knowledge requisite to stay competitive. As Martin-Perez et al. succinctly noted, “Knowledge is the most strategically important resource for organizations” (2012, p.3). I contest that through proper talent management it is possible to retain, develop, and ensure the continual progression of organizational knowledge.

References

Galbraith, J.R. (2002). Designing a reconfigurable organization. In Designing organizations: An executive guide to strategy, structure, and process (pp. 73-90). San Francisco, CA: Jossey-Bass.

Galbraith, J.R. (2002). Introduction: Six immutable forces shaping today's organization. In Designing organizations: An executives guide to strategy, structure, and process (pp. 1-8). San Francisco, CA: Jossey-Bass.

Lorsch, J.W. (1975). Note on organizational design. Boston, MA: Harvard Business School.

Martin-Perez, V., Martin-Cruz, N., & Estrada-Vaquero, I. (2012). The influence of organizational design on knowledge transfer. Journal of Knowledge Management, 16(3), 1-32.

Morgan, G. (1998). Nature intervenes: Organizations as organisms. In Images of organization (pp. 35-67). Thousand Oaks, CA: Sage Publications, Inc.

Worley, C., & Lawler, E. (2006). Designing organizations that are built to change. MITSloan Management Review, 48(1), 19-23. 

Week 1 Post by Christina

When viewed in light of this week’s readings, a front-page article in yesterday’s New York
Times that examined the internal discord at JPMorgan Chase—a company known for its risk
management skills—was remarkable in the sense that a group of well-seasoned executives’
failure to adhere to basic tenets of management resulted in a multibillion-dollar trading loss.
Many of the scientific management principles set forth by Henri Fayol and Frederick W.
Taylor—or rather, JPMorgan Chase’s violations of them—can be applied to the behind-the-
scenes chain of events that led to the company’s trading disaster.

Ina Drew, the senior banker who has been blamed for the mishap, had been frequently absent
from the office after contracting Lyme disease in 2010. Her absences allowed, as the article
states, “long-simmering internal divisions and clashing egos to come to the fore.”

Fayol recognized that individuals or groups who serve only themselves are harmful to the
interests of their fellow employees and the interest of the firm in general (Wren and Bedeian,
2009). At JPMorgan Chase, Drew’s deputy in New York was at odds with Achilles Macris, her
London deputy who was behind the losing bet. The mounting tensions among executives left
traders “feeling whipsawed.”

Fayol’s twelfth principle, stability of tenure of personnel, recognized the need for orderly
human-resource staffing and establishing provisions to ensure that a firm’s employees possessed
the requisite abilities for the work to be performed (Wren and Bedeian, 2009). One wonders
whether Drew had appointed competent staff to “run the shop” in her absence. At one point
Althea Duersten, the executive who oversaw North American trading, called one trader into
her office and told him that he would report to her instead of Macris. In early 2011, Irene
Tse, formerly of the hedge fund Duquesne Capital Management, took over for Duersten. As
a newcomer to the company, Tse was less equipped to go up against Macris, according to the
Times article.

Taylor stressed the importance of the human factor in scientific management. A JPMorgan Chase
trader reported that as a manager, Drew “enjoyed the confidence of her subordinates”; a former
senior executive described her as a “coolheaded and an excellent manager.” However, when
Drew returned from sick leave, she moved upstairs to an office among senior executives instead
of one floor above the trading desk. As a result, she became less hands-on with the trading book
than she had been in the past (Wren and Bedeian, 2009).

Drew is expected to resign from JPMorgan Chase. As public distrust of financial entities
continues to prevail, the lack of adhesion to management principles presented in this article
makes one wonder how a company with a reputation for managing risk could create a trading
loss of this magnitude and jeopardize client trust.

Link to New York Times article: http://www.nytimes.com/2012/05/20/business/discord-at-
jpmorgan-investment-office-blamed-in-huge-loss.html

Silver-Greenberg, J. & N. D. Schwartz (2012, May 19). Discord at key JPMorgan unit is faulted
in loss. New York Times, A1.

Wren, D. A. & Bedeian, A. G. (2009). (6th ed.). The Evolution of Management Thought.
Hoboken: John Wiley & Sons, Inc.

Week 1 post by Will

Management Theory As Applied to One USAID Implementing Partner in Afghanistan

American aid projects abroad present managerial challenges that Frederick Winslow Taylor, Henri Fayol and Max Weber would all appreciate. In Afghanistan, USAID implementing partners rely on an “Afghan First” hiring strategy, with Afghan nationals comprising 95% of the workforce. While this fulfills USAID’s goal of employing mostly local workers overseen by a small coterie of expatriate managers, it requires careful managerial structure to safeguard against corruption, worker apathy, absenteeism and inefficiency. In my two years working for agricultural stabilization projects in southern Afghanistan I’ve observed that a mixed managerial approach has evolved, one that shows the combined influences of Taylor, Fayol and Weber.

With some 200 Afghan employees, the office of the Southern Regional Agricultural Development (S-RAD) program is tasked with overseeing Program Support relating to the project’s four main components: seed vouchers, training, infrastructure development and agribusiness. The program components all fall under the auspices of an expatriate director who oversees a staff of some 20 Afghan workers. The directors answer to the Deputy Chief of Party (DCOP) who in turn answers to the Chief of Party.

With his emphasis on time study and worker productivity, Taylor’s scientific management system might seem to have little relevance to the functions of desk workers overseeing data management. Nor does Taylor’s principle that management should offer the maximum prosperity for both employer and employee seem on the surface to relate to a non-industrial setting. Our workers are not evaluated in terms that would be appropriate to the use of time study. However, the workplace psychology of Taylor’s theories still applies, particularly the principle of temporal contiguity, in which Taylor observed the importance of timing the stimulus and the response for conditioning behavior. Just as rewards and punishment influenced factory output standards in his studies, those same factors continue to influence worker morale. S-RAD workers receive wage increases that are pegged to specific job performances, and letters of reprimand tied to dereliction of duty, and in both cases the timing of the response has been found to be crucial in eventuating the desired behavior.  Also crucial to smooth office function is another Taylor observation, the importance of unity of command. Each worker has a clear understanding of the organizational structure, answering to a single supervisor.

Fayol emphasized the values of leadership over pure technical ability, and saw management from more of an upper-level perspective. His scalar chain can be clearly observed in the S-RAD organizational structure, whereby the division of work is delegated in such a way as to create specialization within each department. Ascending the scalar chain one finds less specialization and more reliance on the leadership qualities (mental, physical, moral, etc.) espoused in Fayol’s philosophy. The expatriate department heads rely on the work of their Afghan team leaders, who in turn delegate supervisory functions within their departments as needed, a nod to Fayol’s preference for a narrow span of control. Most of the specialized work is done at the bottom of the chain, with the expatriates serving to regulate the workflow and ensure that all paperwork is moving consistently upward. The most effective department heads exact a balance of fear and respect in their teams, remunerating employees who show merit and disciplining those who fall short of departmental goals. These department heads convene weekly staff meetings with the COP and DCOP so that each branch stays abreast of the doings of the others, a hallmark of Fayol’s participative management. And while the structure is vertical in design, employees work laterally with their cohorts in other departments, a structure similar to “Fayol’s gangplank” that reduces stress on team leaders and department heads.

Max Weber praised bureaucracy, in which the office took precedence over the person.  S-RAD office functions bear some similarities to Weber’s ideal, though often at their peril. Employees are trained to recognize and respect ranking superiors, regardless of the personality holding that rank. Our employees are protected by uniform rules that limit exploitation and ensure equal opportunity. All employees are aware of their recourses for grievances. But terminations often result in employees bringing forth legal challenges, and as Afghanistan labor law leans favorably toward the worker over the foreign employer, such terminations are few. This sometimes results in complacency and poor performance, particularly at the bottom of the scalar chain. In general only the most flagrant cases of poor performance or corruption are punished, a vexing problem for department heads and their team leaders.

Week 1 Post by Leslie

In my job, communications consultants partner regularly with specialists in the areas of talent management and compensation to design and communicate employee incentive plans. Thanks in part to the challenging economic climate of the last few years, we’ve seen more and more companies adopting pay-for-performance incentive plans for employees at all levels. Not only do we share Frederik Taylor’s view that responsibility lies with management to design effective incentive plans (Wren, 2009), we also believe that good communication is essential to the success of incentive plan implementation. However, our practices do diverge from scientific management in our treatment of the human element. Despite Taylor’s protests that properly practiced scientific management maintains “the proper personal relations … between the employers and men, (as cited in Wren, 2009, p. 152), most of my colleagues would argue that strict adoption of scientific management has a detrimental effect on employee attraction and retention. Fayol’s acknowledgement of the role of job enlargement in increasing employee engagement (Wren, 2009) is a step in the right direction, but as a whole, Taylor, Fayol, and Weber – while offering many excellent management principles -- undervalue the individual employee.

Did anyone else find Taylor’s description of the motivations for “soldiering” particularly interesting? He observed that employees would “soldier,” or underwork, for a number of reasons, most of which boiled down to fears that high performance would not be rewarded in the long term (Wren, 2009). No doubt Taylor had great insight into the incentive needs of Midvale’s engineers, yet I cannot help but wonder if better communication (including clear “if, then” scenarios and direct address of worker assumptions) could have solved performance problems just as readily as a revised incentive plan.

This week’s reading reminded me of a BBC News article I heard referenced on NPR. Links to two full articles are provided below, but to sum it up, the Department of Education in England and Wales recently announced its recommendation to implement a pay-for-performance compensation approach for teachers (“British Teachers,” 2012; Coughlan, 2012). While the department’s recommendations are complex and include several pay-for-performance models as well as the idea of “different pay in different areas,” a surface evaluation of the suggestions certainly brings scientific management theory to mind (“British Teachers,” 2012; Coughlan, 2012). The committee urges an approach in which “the best teachers are rewarded while the weak are discouraged from staying in the profession” (“British Teachers,” 2012). If that doesn’t divide teachers into “first-class” and “second-class” workers, I don’t know what would!

Perhaps teachers’ unions would have better received better-focused recommendations offering greater anticipation and consideration of teacher concerns. What do you think?

http://www.bbc.co.uk/news/education-18089505
http://en-maktoob.news.yahoo.com/british-teachers-paid-performance-141620652.html

References

British teachers to be paid for performance? (2012, May 1). Indo Asian News Service. Retrieved from http://en-maktoob.news.yahoo.com/british-teachers-paid-performance-141620652.html

Coughlan, S. (2012, May 16). Michael Gove pushes for performance pay for teachers. BBC News. Retrieved from http://www.bbc.co.uk/news/education-18089505

Wren, D. A., & Bedeian, A. G. (2009). The evolution of management thought (6th ed.). New York, NY: John Wiley & Sons.