HR & Prologues

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Organisation & Culture

Different from traditional mergers and acquisitions the partner in the virtual organization share costs, skills and access to international markets. Each partner contributes to the virtual organization what it is best at – its core capabilities. Briefly summarized here are the key attributes of the virtual organization:

Technology: Informational networks will help far flung companies and entrepreneurs link up and work together from start to finish. The partnerships will be based on electronic contracts to keep the lawyers away and speed the linkups.

Opportunism: Partnership will be less permanent, less formal and more opportunistic. Companies will band together to meet all specific market opportunities and more often than not, fall apart once the need evaporates.

No borders: This new organizational model redefines the traditional boundaries of the company. More cooperation among competitors, suppliers, and customers makes it harder to determine where one company ends and another begins.

Trust: These relationships make companies far more reliant on each other and require far more trust than ever before. They share a sense of co-destiny, meaning that the fate of each partner is dependent on the other.

Excellence; because each partner brings its core competence to the effort it may be possible to create a best of everything in the organization. Every function and process could be world class – something that no single company could achieve.

Importantly virtual organizations can help competitiveness in the global economy. The alliances and partnerships with other organizations can extend worldwide, the spatial and temporal interdependence easily transcend boundaries, and the flexibility allows easy reassignment and reallocation to take quick advantage of shifting opportunities in global markets. To avoid disintegration and attain effective needed focus, the lead virtual organization must have a shared vision, a strong brand, and most important, a high trust culture.

Examples of virtual organizations include those already mentioned as well-known network organizations – Ford, Harley Davidson, and ABB and also on a smaller scale, firms such as Clark Equipment a manufacturer of forklifts and other industrial equipment, Semco, a Brazilian firm producing pumps, valves and other industrial products,   Sweden’s Insurance Group (with 91,000 partners worldwide) and the Australian firm Technical and Computer Graphics (TCG). Other well known examples include Nike and Reebok, who do very little of their own production but shift it to Asian firms. In the information technology industry, Sun Microsystems views itself as an intellectual holding company that designs computers and does all other functions (product ordering, manufacturing, distribution, marketing and customer service) through contractual arrangement with partners located throughout the world, and Intel uses virtual teams with members from Ireland, Israel, England, France and Asia working on a wide variety of projects.  As with the network organization, it is not really possible to show a virtual organization, depicts graphically how TCG would look as a virtual organization. Because networks and virtual organizations both represent such radically different ways to structure firms, there are many challenges   ahead, especially on the human side of these contemporary structural forms.

When people join an organization they bring with them the values and beliefs they have been taught. Quite often, however, these values and beliefs are insufficient for helping the individual succeed in the organization. The person needs to learn how the particular enterprise does things. A good example is the US Marine Corps. During boot camp, drill instructors teach recruits the Marine way. The training attempts to psychologically strip down the new recruits and then restructure their way of thinking and their values. They are taught to think and act like Marines.   Anyone who has been in the Marines or knows someone who has will verify that the Corps generally accomplishes its objective. In a less dramatic way, today’s organization do the same thing. For example, as discussed in knowledge management (KM), the key challenge for contemporary organizations is to instil and sustain a corporate wide culture that encourages knowledge sharing. As the partner in charge of Ernst & Young’s knowledge based business solution practice notes, if you’re going to have a knowledge sharing  culture, that can’t just be a veneer on top of the business operation. You have to have people who  can make sense out of it and apply it.

In other words organizational culture is quite complex. Although there are a number of problems and disagreements associated with the conceptualization of organizational culture most definitions including the preceding recognize the importance of shared norms and values that guide organizational participants’ behaviour. In fact, there is research evidence that not only are these cultural values taught to newcomers but newcomers seek out and want to learn about their organization’s culture.

Organizational culture has a number of important characteristics. Some of the most readily agreed upon are the following:

Observed behavioural regularities: When organizational participants interact with one another, they use   common language, terminology, and rituals related to deference and demeanour.

Norms: Standards of behaviour exist, including guidelines on how   much work to do, which in many organizations come down to not to do too much or do not do too little.

Dominant values: There are major values that the organization advocates and expects the participants to share. Typical examples are high product quality low absenteeism and high efficiency.

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Latest Organisation Designs

Many practicing managers are becoming disenchanted with traditional ways of designing their organization. Up until a few years ago, most managers attempted only timid modifications of classical bureaucratic structures and balked at daring experimentation and innovation. However, many of today’s managers finally overcome this resistance to making drastic organizational changes.  They realize that the simple solutions offered by the classical theories are no longer adequate in the new paradigm environment. In particular the needs for flexibility, adaptability to change, creativity, innovation, knowledge, as well as the ability to overcome   environmental uncertainty are among the biggest challenges facing a growing number of organizations. The response has been horizontal network, and virtual organization designs.

Horizontal designs replace the traditional vertical, hierarchical organization. The advanced information technology and globalization environment, suggests the use of horizontal structure to facilitate cooperation, teamwork and a custom rather than a functional orientation. A McKinsey & Company consultant is given  credit for developing some of the following  guiding  principles that define horizontal organization design.

Organization revolves around the process, not the task. Instead of creating a structure around the traditional functions, the organization is built around its three to five core processes. Each process has an owner and specific performance goals.

The hierarchy is flattened. To reduce levels of supervision, fragmented tasks are combined, work that fails to add value is eliminated and activities within each process are cut to the minimum.

Teams are used to manage everything. Self-managed teams are the building blocks of the organization. The teams have a common purpose and are held accountable for measuring performance goals.

Customers drive performance:  Customer satisfaction, not profits, or stock appreciation, is the primary driver and measure of performance.

Team performance is rewarded. The reward systems are geared toward team results, not just individual performance. Employees are rewarded for multiple skill development rather than just specialized expertise.

Supplier and customer contact is maximized. Employees are brought into direct, regular contact with suppliers and customers. Where relevant, supplier and customer representatives may be brought in as full working members of in-house teams.

All employees need to be fully informed and trained.  Employees should be provided all data, not just sanitized information on a need to know basis. However, they also need to be trained on how to analyse and use the data to make effective decisions.

Today, the horizontal structure has become a reality in an increasing number of organizations. For example, AT&T units are doing budgets based not on functions but on processes, such as the maintenance of a worldwide telecommunication network.  Importantly  AT&T is also rewarding its people based on customer evaluations of the teams performing these processes,  and GE  Motorola  and Xerox among other firms have moved to the principles of the horizontal design of organization. For example General Electric has scrapped the vertical structure that was in place in its lighting business and replaced the design with a horizontal structure that is characterized by over 100 different processes and programs. In particular, to cut out bureaucracy and solve organizational problems that cut across functions and levels. GE implemented its famous Work Out described as follows:

Large groups of employees and managers – from different organizational levels and functions come together to address issues that they  identify or that identify or that senior management has raised as concerns. In  small teams people challenges  prevailing assumptions about the way we have always done things and come up with recommendations  for dramatic improvements in organizational processes.

The Government Electronics group at Motorola has redesigned its supply chain management organization so that it is now a process structure geared towards serving external customers.  At Xerox new products are developed through the use of multidisciplinary teams: the vertical approach that had been used over the years is gone. These new ways of organizing are more relevant to today’s environmental needs for flexibility, speed, and cooperation.

The Horizontal Organization suggests principles such as the following:

Make teams not individuals, the cornerstone of organizational design and performance

Decrease hierarchy by eliminating non value added work and by giving team members the authority to make decisions directly related to their activities within the process flow.

Emphasize multiple competencies and train people to handle issues and work in cross functional area.

Measure for end of process performance objectives, as well as customer satisfaction, employee satisfaction and financial   contribution.

Build a corporate culture of openness, cooperation and collaboration a culture that focuses on continuous performance improvement and values employee empowerment responsibility and well-being.

The network designs go beyond even horizontal structures and totally abandon the classical, hierarchical, functional structure of organization. The bureaucratic model worked fine in the previous era when there was less competition and more stable market conditions, and before the now boundary less conditions of advanced information technology and globalization.

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Management Problems of Today and Further

The academic field of organizational behaviour has been around for about a half century. However, as the accompanying OB in Action: Some Things Never Really Change clearly indicates, problems facing managers of human organizations have been around since the beginning of civilization. Embedded in the case are many topics covered, for example, charismatic leadership, management of conflict, empowerment, management of change and nonfinancial incentives.

The problems with human organizations and the solutions over the ages have not really changed that much, the emphasis and surrounding context certainly have changed. For example, in the 1980 and 1990s managers were preoccupied with restructuring their organizations to improve productivity and meet the competitive challenges in the international marketplace and quality expectations of customers. Although the resulting “lean and mean” organizational offered some short-run benefits in terms of lowered costs and improved productivity if they continued to do business as usual they would not be able to meet current or future challenges.  As a Harvard Business Review article argues ‘these are scary times for managers’. The singular reason given for these frightening times the increasing danger of disruptive change.

The World Is Flat, he identifies dramatic  forces of change affecting the 21st century from geopolitical (e.g. the fall of the Berlin Wall) technological (e.g. Internet based platforms and work flow software) and business processes (e.g. open sourcing, outsourcing and insourcing). An example of insourcing would be UPS taking over the entire logistics process of a company from factory to warehouse to customer to repair to even customer payment collection. This new “flat” world has not only levelled the playing field for firms around the globe, but also has made collaborating individuals and groups the competitive advantages.

The 21st Century environment requires new thinking and new thinking and new ways of managing. As another example, take the disappearance of tightly defined and programmed jobs. The tendency is to think that this may be happening in the dot-com firms or in high profile firms such as Microsoft  but not in the mainline companies such  as an old established firm such as Koch  industries based in Wichita, Kansas  which is into chemical, agriculture, financial services, and oil and gas. Yet the head of the Human Resources Department at Koch notes that they no longer use the old approach of a complex system of job classifications, pay grades, promotional charts and job descriptions. Why don’t Amazon, Microsoft and Koch Industries have defined jobs? Because the nature of work is changing so rapidly that rigid job structures impede the work to be done now, and that may drastically change the following year, month, or even week.

This new “Flat” world, non-job environment is representative of the disruptive, discontinuous change that is taking place now in the foreseeable future. It represents a new paradigm, a new way of thinking about the workplace.

Some things never really change: A powerful charismatic leader is having problems. A well-known consultant is called in to help. The consultant notices that the leader tries to handle all problems and conflicts of his people himself. People queue up before his office; because he is overwhelmed he cannot handle all the business. So the consultant has a private talk with the leader and tells him to structure his organization by delegating authority, empowering subordinates to handle the workload. These subordinates should be selected not only on their leadership abilities, but also on their character. They should be truthful not driven by material gain. The new structure should resolve all daily issues at the lowest possible level; only the big and difficult issues should be brought before the leader. He should focus on strategy — on dealing with the higher authority, on establishing new approaches and teaching these to the people, on showing them the way to go and the work to be alone. The case states that the leader listens to the consultant and carries out the reorganization which is a success and the consultant returns home.

All the speculation and speeches about the challenges in the new century have come and gone. Now trying to effectively manage 21st century organizational has become the harsh reality. Ask anyone today management professors, practitioners, or students – what the major challenges are in today’s environment and the answer will be fairly consistent: An uncertain economy and turbulent geopolitics preoccupy everyone’s concerns.  However, at the organization level, advanced information technology, globalization, diversity, and trying to solve ethical problems and dilemmas come to the fore. These are unquestionably major issues facing contemporary organizations.  However, the basic premise and assumptions of the fields of organizational behaviour in particular are that managing  the people, the human resources of an organization have been, are, and will continue to be, the major challenge and critical competitive advantage.

more at http://www.citeman.com/20828-management-problems-of-today-and-further.html#ixzz22jtbVUIq

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Evolution and History of Management

Definitions of Effectiveness and Efficiency

Productivity implies effectiveness and efficiency in individual and organizational performance. Effectiveness is the achievement of objectives.  Efficiency is the achievement of the ends with the least amount of resources. Managers cannot know whether they are productive unless they first know their goals and those of the organization, a topic that will be discussed in the article.

Managing: Science or Art?

Managing, like all other practices – whether medicine, music composition, engineering, accountancy, or even baseball is an art. It is knowhow. It is doing things in the light of the realities of a situation. Yet, managers can work better by using the organized knowledge about management. It is this knowledge that constitutes a science.  Thus, managing as practice is an art; the organized knowledge underlying the practice may be referred to as a science. In this context science and art not mutually exclusive; they are complementary.

As science improves, so should art, as has happened in the physical and biological sciences. To be sure, the science underlying managing is fairly crude and inexact. This is true because the many variables with which managers deal are extremely complex. Nevertheless, such management knowledge can certainly improve managerial practice. Physicians without advantage of science would be little more than witch doctors. Executives who attempt to manage without management science must trust on luck, intuition or what they did in the past.

In managing, as in any other field, unless practitioners are to learn by trial and error there is no place they run to for meaningful guidance other than the accumulated knowledge underlying their practice.

Many different contributions of writers and practitioners have resulted in different approaches to management, and these up a “management theory jungle”. Later in this chapter you will learn about the different patterns of management analysis and what can be done to untangle the jungle. The major contributions of management writers and practitioners we will highlight Frederick Taylor’s scientific management, Henri Fayol, the father of modern operational management theory, and Elton Mayo and F.J. Roethlisberger’s Hawthorne studies.

Frederick Winslow Taylor gave up college studies and started out as an apprentice pattern maker and machinist in 1875, joined the Midvale Steel Company in Philadelphia as a machinist in 1878, and rose to the position of chief engineer after earning a degree in engineering through evening study. He invented high speed steel cutting tools and spent most of his life as a consulting engineer. Taylor is generally acknowledged as the father of scientific management. Probably no other person had had a greater impact on the early development of management. His experiences as an apprentice, a common labourer, a foreman, a master mechanic and then the chief engineer of a steel  company gave Taylor ample  opportunity to know first-hand the problems and attitudes of workers and to see the great possibilities  for improving the quality of management.

Taylor’s famous work entitled The Principles of Scientific Management was published in 1911. The fundamental principles that Taylor saw underlying the scientific approach to management are as follows:

Replacing rules of thumb with science (organized knowledge)

Obtaining harmony in group action, rather than discord.

Achieving cooperation of human beings, rather than chaotic individualism.

Working for maximum output, rather than restricted output.

Developing all workers to the fullest extent possible for their own and their company’s highest prosperity.

You will notice that these basic precepts of Taylor’s are not far from the fundamental beliefs of the modern manager.

The emergency of management thought

Frederick  W Taylor

Shop management (1903)

Principles of Scientific management (1911)

Acknowledged as the father of scientific management His primary concern was to increase productivity through greater efficiency in production and increased   pay for workers through  the application of the scientific method. His principles emphasized   using science, creating group harmony and cooperation, achieving maximum output, and developing workers.

Henry L Gantt (1901)

Called for scientific selection of workers and harmonious cooperation between labour  and management. Developed the Gantt chart. Stressed the need for training.

Frank and Lillian Gilbreth (1900)

Frank is known primarily for his time and   motion studies. Lillian an industrial psychological focused on the human aspects of work and the understanding of workers’ personalities and needs.

Modern operational management theory

Henri  Fayol (1916)

Referred to as the father of modern management theory Divided industrial activities into six group: technical, commercial, financial ,security accounting and managerial. Recognized the need for teaching management.  Formulated fourteen principles of management, such as authority and responsibility unity of command, scalar chain, and espirit de corps.

more at http://www.citeman.com/20884-evolution-and-history-of-management.html#ixzz220ZUtA00

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Organizational Approaches – Training

Recent surveys indicate that the majority of US companies currently have diversity training and have moved into the mainstream from the traditional role of merely equal employment opportunity complaint.  A comprehensive research study found those firms that adopted diversity training tended to have the following profile:

large size,

positive top-management beliefs about diversity,

high strategic priority of diversity relative to other competing objectives

presence of a diversity manager and

existence of a large number of other diversity supportive policies

There are two ways in which this training can play a key role in managing diversity. One way is by offering training to diverse groups. Members from a diverse group can be trained for an entry level skill or how to more effectively do their existing or future job. The other approach is to provide training to managers and other employees who work with diverse employees. In recent years a number of approaches have been used in providing such diversity training.

Most diversity training programs get the participants directly involved. One of CMD’s programs involves putting trainees into groups based on ethnic origin. Then each group is asked to describe the others and to listen to the way its own group is described. The purpose of this exercise is to gain insights into the way one ethnic group is perceived by another ethnic group. Each group is also asked to describe the difficulties it has in working with other ethnic groups and to identify the reasons for these problems. At the end of the training, both managers and employees relate that they have a better understanding of their personal biases and the ways in which they can improve their interaction with members of the other groups.

Another widely used approach is diversity board games, which require the participants to answer questions related to areas such as gender, race, cultural differences, age issues, sexual orientation and disabilities. On the basis of the response, the game players are able to advance on the board or are forced to back up. For example, in helping participants gain an understanding of the legal issues involved in employment practices, one game asks the players this question:

Two white workers and one African American worker were charged with theft of company property. The white employees were discharged but the African American employee was retained because of concerns about racial-discrimination lawsuits. The employer’s action was:

Illegal. The Law prohibits racial discrimination

Legal. The law  protects only minorities

Legal. This case involved theft.

The answer is “a” and participants who answer correctly are allowed to advance on the board or given some form of reward such as a token that counts towards a higher score. The objective of these types of games is to acquaint the players in a nonthreatening manner with legal rules and restrictions regarding how to manage members of diverse groups.

Other training games help participants focus on cultural issues such as how to interact with personnel from other cultures. Here is an example:

In Hispanic families, which one of the following values is probably most important?

Achievement

Money

Being on time

Respect for elders

The correct answer is ‘d’ As participants  play the game, they gain  an understanding  of the values and beliefs  of other cultures and learn how better to interact with a diverse workforce.

In many cases these diversity related games are used as supplements to other forms of training. For example, they are often employed as icebreakers to get diversity training sessions started or to maintain participant interest during a long program. Recent research has found that the major key to the success of diversity training is top management support for diversity; also important are mandatory attendance for all managers, long term evaluation of training results, managerial rewards for increasing diversity and a broad definition of diversity in the organization. However, it must be remembered that awareness training is valuable to shift perceptions, but may not lead to behavioural change.  All state and other firms learned that the training must be linked to business outcomes in order to produce actual behavioural change.

A major problem of training in general and diversity training in particular, is the transfer problem. Those going through the diversity training may see the value and gain some relevant knowledge, but then do not transfer this training back to the job. A major reason for this transfer problem is a lack of confidence or self–efficacy (i.e. the trainees do not believe that they can successfully carry out the diversity training objectives back on the job in their specific environment). A recent field experiment by Combs and Luthans was designed to increase trainees’ diversity self-efficacy. The results were that the training intervention significantly increased the trainees (N=276 in 3 organizations) measured diversity self-efficacy. More importantly, there was a strong positive relationship between the trained participants diversity self-efficacy and the number and difficulty of their stated intentions for initiating diversity goals in their specific environments of insurance and manufacturing firms and a government agency.

more at http://www.citeman.com/21220-organizational-approaches-%e2%80%93-training.html#ixzz220UIdXv1

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HR Roles and Goals

HRM - What is it? As the name suggests, it is the management of the human factor in an organization. They manage the most important asset of any firm, i.e. its employees. It finally boils down to people. Since these people are drawn from the same common pool, it is only team, culture and environment, leadership and vision, attitude towards change and occasional failure that determine team performance. The role of an HR department, be it leadership, vision, or attitude towards change, building up team culture and environment, everything is managed by this one department. They set up the long as well as short goals for each department, team and individual members in the firm. Its main aim is to bring about coordination between organizational goals and employee goals. It tries to bridge the gap between the different levels in the company. Simply put, it’s the link between all concerned.

What is the role of the HR Manager? He is the person who manages the whole HR department, which in turn handles all the departments and the people in the organization. So, what does he actually do?

Setting up an HR team which will assist him in achieving organizational and individual goals.

Assigning different roles and positions to all people in the HR department.

Planning: Setting up goals for the organization & chalking out a path as to how to achieve them.

Foretelling/Forecasting: Based on the planning, an HR manager, needs to figure out the manpower requirements of the firm. As to how many employees are currently working, whether more will be required in the near future, or whether some old ones need to sacked.

Assigning targets and goals to individual employees in the firm or giving the task of setting and assigning goals to someone in the HR department.

Recruitment: How to attract/recruit the best people for the firm?

Selection: Choosing the right candidate for the right job.

Induction & Training: After employees have been hired, providing them right knowledge about the firm, its history, its working patterns etc., their role in the firm and also their duties. Under training, the skills of the newly hired ones are polished according to the needs of the firm.

Performance Appraisal: HR manager assigns the task of following the progress or performance of each individual employee to people in his department. A systematic procedure is developed for the same.

Career Tracking: This is usually done by a growth chart wherein the progress of individual employees is charted from the day he joined the firm till the day he leaves. In case of a problem, it is resolved by giving the employee another chance, or as a last resort sacking him.

Hiring and firing: The process of redundancy i.e. downsizing or in other terms throwing out people who are not useful to the firm anymore, is also carried out by the HR manager. A proper process is followed wherein the concerned individuals/employees are given redundancy notices and are also paid the redundancy charges.

Rewards & Awards: The employees need to be appreciated for the good work and resulting progress of the firm. This is done by the HR manager, who decides whether to acknowledge the progress of employees with monetary (rewards) or non-monetary (awards) terms.

Grievance handling: Managing employee complains as well as complains about employees and resolving them in a way most suitable for the smooth functioning of the firm.

What is the role of HR Department? (What do they actually do?) The main role of the HR team/department is to look after the employees of the firm.

They have to support, help, assist, or even at times do the work of the HR manager. They have to report to him regularly and follow his orders.

Goals of HR Manager/Department: (Why we need HRD?)

Administrative - Setting up goals, long term, for various departments, teams within the departments and also individual employees.

Ensuring successful and timely completion of each task. Managing the deadlines.

Setting up proper reward system for acknowledging good work.

Setting up realistic goals and reviewing the progress at regular intervals through meetings, etc. Also reviewing, discussions and meeting after actual completion.

Operational - Setting up short term goals i.e. weekly, monthly, quarterly, etc.

Goals need to be adaptable and flexible in contrast to the administrative ones.

While, administrative goals largely define what is to be done, operational goals define how it is to be done. This is the role of the HR team. They work out how to do the day to day activities in order to increase productivity of the employees as well as the firm.

Strategic - Strategic goals are solid statements backed with figures at times of what a firm wants to achieve over a specific period of time.

This defines the path of work for whole organization. The company’s goals are made clear through its vision and mission.

This vision and mission is developed by the HR department.