- Bureaucratic - This type of culture is visible in organisations that follow a well-defined way of doing things. Employees are not encouraged to take risks and rewarded for following rules. This is suitable for a stable environment that is hard to find in these modern days.
It is visible that Quinlan’s culture was bureaucratic. In particular Quinlan had:
- Properly defined rules and procedures to function in a predictable and routine manner
- Roles were clearly defined and labour was divided based on these roles
- A hierarchical chain of command
- Clear separation of ownership and control
Culture and organisation success
Daft, Management, 2003, chapter 3 explains that an organisation has two main environments: the external and internal. The external environment includes elements that exist outside the boundary but have the ability to affect the organisation. Eg. competitors, resources, technology, customers. The internal environment consists of employees, management and culture, that have a particular influence on employee behaviour and how well an organisation could adapt to the external environment.
Deal & Kennedy (1982) states that, a strong culture is a powerful handle in guiding behaviour and that companies that cultivate their cultures "have an edge". This edge is shown in terms of productivity. The impact of a strong culture on productivity is amazing and it also makes employees feel better about what they do, so they are more likely to work harder.
A research at Harvard on 207 US firms have shown the relationship between corporate culture and external environments. (Daft, Management, 2004). The study found that a strong culture itself was not responsible for business success unless the culture encouraged adaptation to the external environment. I strongly agree with this idea that there has to be a right fit between environment, strategy and culture. The culture should adopt what it takes to succeed in that external environment.
The bureaucratic culture adopted at Quinlan’s had the following adverse effects:
- Employees becoming too rigid, relying to procedures and defensive, having an adverse effects, for example on customer service.
- When its necessary to react to changes in the external environment, it is too slow and inflexible.
- Employees tend to be satisfied with average levels of performance. They wont strive for higher levels of performance.
- Too mechanical, no incentives for innovation or experimentation.
- When the new management tried to bring about changes, which lead to tightening up of bureaucracy, the employees disliked it. This lead to low morale, low performance among employees. This ultimately becomes a vicious cycle.
Question 2:
As the Director of HRM at Quinlan’s you have become aware that the morale of your workforce has declined. What explains these morale problems and how might they be tackled?
Why is it that the morale has declined
After Quinlan had begun the downward trend there were a number of top executives who were hired in succession to bring about some radical changes to the organisation and improve sales. These executives introduced new management styles and the employees were getting increasingly insecure about their jobs. This type of behaviour is explained by Alvin Gouldner (1954) in his studies carried out (University of Leicester, Management, people and organisations, section 12). This is similar to what happened at Quinlan. When the new executives joined the company and realised the low performance of its employees, they introduced tough new measures that were totally in contrast to its existing culture. This situation lead to a negative reaction from the employees, who became rather insecure about their jobs. The low morale or we could say lack of motivation at Quinlan’s is due to various reasons.
- Roles were clearly divided and well defined. Employees were performing repetitive tasks.
- Employees are loyal to a person rather than the organisation or its missions, which in this case is the founder Sir Thomas Quinlan. But when he died that loyalty would have diminished.
- Lack of job security. They feel that poor performance could easily result in losing their jobs or lesser work hours.
- Employees not liking being told what to do. Rather they didn’t have the opportunity to be part of the decision making process and decide what’s the best course of action.
- No employee feedback mechanism in place. Quinlan just carried on with its restructuring programme without knowing the ground situation.
- Employees not being informed of the important events happening in the organisation and being kept in the dark
Concepts of motivation
Motivation refers to the forces either within or external to a person that arouse enthusiasm and persistence to pursue a certain course of action (Daft, Management, 2003, p546). Motivation is a critical factor affecting ones productivity. It is a part of a manager’s role to utilise motivation to accomplish organisation missions. There are number of theories of motivation as described by Daft, Management, 2003.
- Traditional approach – This was the first approach on study of employee motivation and was done by Frederick Taylor. His work was based on the idea that employees were primarily motivated by monetary incentives. Although his ideas are not widely accepted today, still there are schemes that adopt incentive pay systems.
- Human relations approach – According to this approach non monetary rewards such as social relations in a workforce could be a powerful motivating factor. Research begun with the landmark Hawthorne studies conducted at a General Electric plant in the USA by Elton Mayo.
- Human resource approach – This approach carries forward the first two approaches and further introduce the concept of a whole person. McGregor put forward a new theory Y, which states that the degree of commitment is dependant on intrinsic rewards such as self-esteem.
- Contemporary approach – This approach is dominated by three types of theories:
- Content theories – based on analysis of human needs and how they can be satisfied in the workplace.
- Process theories – these theories are more complex and give the human a more active role than simply responding to an external stimulant.
- Reinforcement theories – these look at the relationship between work and its consequences. It focuses on changing the employees on the job behaviour through the use of immediate rewards or punishment.
A. H. Maslow, “A Theory of Human Motivation” (1943), originally published in psychological review, 50, 370-396, states that humans are motivated by a number of needs and these can be classified into five major groups in a hierarchical manner. Those groups in ascending order are:
- Physiological – the most basic needs of humans such as food, water, oxygen and sleep. In an organisation perspective this translates into adequate basic pay and a good working environment.
- Safety and security – this is the need for a safe and secure physical environment where workers do have a safe job and job security.
- Love and belonging – this is the need for having a good relationship with the supervisor, peers and colleagues, to work as part of a group and acceptance as a member of that group.
- Esteem – this is the need for self-esteem. The desire to be recognised and appreciated by others.
- Self actualisation – this is the need for self-fulfilment and is the highest needs category. This is the desire to increase ones potential and becoming a better person.
Clayton Alderfer “Existence, Relatedness and Growth” (1972), proposed a similar theory known as the ERG (existence, relatedness, growth) theory. It has three levels of need:
- Existence needs – concerned with existence and survival of humans.
- Relatedness needs – these concern a healthy relationship with others.
- Growth needs – concern with development of human potential and the desire for self esteem.
How motivation can be achieved at Quinlan’s
We have looked at several theories about motivation and realised that there are intrinsic and extrinsic rewards that motivate people. Many modern organisations have realised that motivation and high performance has less to do with extrinsic rewards such as salary and more to do with intrinsic rewards such as recognition, providing a conducive environment for employees to work and empowerment. At Quinlan, I would say that the main reason for low employee morale is caused by the company ignoring such intrinsic rewards. As the Director of HRM, I would recommend the following course of action:
- Empowerment – manager should delegate power and authority to the subordinates, so that they have the ability to choose the best course of action to achieve certain tasks. An example is my present company, which call its consultants ‘managing consultants’, meaning that they are managing their own work. This creates a sense of creativity, commitment and ownership.
- Keep employees informed of the changes in the company and its vision. Especially when the company is in a state of constant change, the top management need to convey these changes to the lower levels. So that they are aware of the initiatives being taken at the top and have confidence and faith in the company.
- Do a survey on their employees. This is the best way to know the morale of their employees and their aspirations. In my present company we recently had a survey where all employees took part. Some facts from the survey revealed that the employees were all committed to a long term career with the company but lacked in training. The management reacted quickly to this and the manager of each employee had to come up with a training plan and there was a career banding exercise, so that each employee had a well defined career path.
- Invest in the employees. Provide a comprehensive training plan that include technical as well as soft skills training. Emphasis could be made on the decision making, communication skills for the management roles.
- Job rotation – move employees from one role to another. This gives the employees to learn new skills, cross training and will also give greater flexibility to the organisation.
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Suggestions box. This is a great way to cultivate creativity. Each suggestion should be reviewed and for those ones that will be implemented a reward could be given to that employee.
Question 3:
One of the problems faced by Quinlan’s is that it is faced with competitors who operate more ‘flexibly’. What does flexibility mean in practise for organisational and management strategy? How do you think that Quinlan’s should respond to these new challenges?
A ‘flexible firm’ model
In these present times organisations are functioning in ever changing economic, social, technological and international environments. The pressures from the external environment include increased competition, volatile markets, diversified consumer demands and new technology. The world is so uncertain that planning for the future is impossible. This lead to the adoption of more flexible decision making processes that were more suitable for the changing environments. Flexibility means the ability of the organisation to exploit changes in the environment and turn them into opportunities that lead to sustained favourable market positions. Consequently, flexibility implies that the firm must be capable of responding quickly to shifting market conditions and product demand (University of Leicester, Management people and organizations, chapter 15).
There have been many theories put forward in this area. John Atkinson’s ‘flexible firm’ model (Atkinson, 1984) suggests that organisations can design workforces to proactively meet business needs through flexible staffing arrangements. His model comprises of three types of employees: core workers, peripheral workers and subcontractors. Over recent years other have suggested similar models (eg Loveridge and Mok 1979, Handy 1989). Charles Handy argues that companies are rapidly moving away from being labour intensive organizations (The Age of Unreason, Handy, 1989). The future organisations will be one of knowledge-based structures, run by key people at the center.
Types of flexibility
There are three types of flexibility usually identified.
- Numerical flexibility – the expansion or contraction of labour to address market fluctuations through primarily ‘peripheral’ groups, part time or contractual workforce. Another popular form is franchising.
- Functional flexibility – this is achieved through the ‘core’ workers. These workers are employed on a full time, permanent basis and undertake tasks that are central to the success of the organisation. They do not work to rigid job descriptions but carry out a broad range of duties.
- Financial flexibility – many companies associate pay and career progression with individual performance. There is no fixed rate for a job. This is a shift from the traditional ‘personal management’ to a human resource management approach.
Organisation and management strategy – to be flexible
Flexibility is central to most of the new models of organisation structure suggested by modern management theorists. Most of these theories suggest that organisations need to break up their bureaucratic nature and disintegrate into smaller, autonomous units. Handy and Kanter are two of such people who have proposed such organisational models.
A number of others have come out in opposition to some of these ideas, and particularly to Atkinson’s model, such as Anna Pollert who has argued that there is nothing particularly new about flexibility as it is described by Atkinson. Firms have always had to slim down their workforces when faced with difficult business circumstances, and they have always shed subcontractors and peripheral workers first. Thompson and McHugh, 1995 argue that mass production is still active. Industries such as food are adopting global standardised products and marketing. For small companies flexible manufacturing systems are too expensive and they still rely on ‘Fordist’ type production.
There are several distinct structural types and they need not be mutually exclusive:
- Value chain - to provide useful framework for dividing a firm’s activities into a set of distinct activities, which add value.
- Modular - to outsource non-vital function, but retain full control of them. It drives down overall cost and enables company to focus scarce resources on areas of competencies. Incorrect identification of core areas would lead to a hollow company and losing of competitive edge.
- Virtual - a continual evolving network of independent companies which are linked to share skills, cost and access to market This arrangement need not be permanent and participating companies need to give up part of the control and be dependant on partners for success.
Flexible organisation is able to continually develop new strategies and adapt to new manufacturing realities. It is not a matter of team-based or matrix or vertical structure. It is the ability to change from one design to another when needed.
Believing that a flat organisation is the answer to survival is not right. The concept of flexible organisation uses the bottom line approach like meeting consumer satisfaction to improve itself. It is not a single model that fits all business situations. If the external environment is so dynamic, then how can the organisation structure be not dynamic in order to survive? Sometimes, a hierarchical structure may just work as well as a flat structure. The issue is how fast the organisation can acquire, process and use information in a timely manner, and how fast the organisation can execute these decisions precisely. A vertical structure can be optimised within a function and when coupled with strong linkages front and back, it can be a potent and flexible organisation too.
How Quinlan should respond to the new challenges
- Horizontal structures - break down the vertical structures and create structures around workflows or core processes. People involved in say, new product development or fulfilment have access to one another. Cross training of employees will give job security as well as giving the functional flexibility. Computer Associates (my present employer) – a leading software vendor uses, a combination of matrix and divisional structures for greater flexibility.
- Special teams – teams can be formed for a special purpose, Quinlan could use this approach for example, marketing a new product line, creating a new product line for next season, new quality initiative in the company etc. These teams can be of a global, virtual nature linked through advanced information technologies. Pepperl-Fuchs Singapore Pte Ltd (one of my previous employers) used this approach when they implemented an enterprise wide ERP system as well as during new initiatives such as TQM, ISO 9001 certification.
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Network approach – Outsource some of the functions such as marketing, R&D to 3rd party companies. Quinlan could therefore concentrate on its core competencies and let another company that is specialized in certain specific areas to do the job. This would give greater numerical flexibility to Quinlan. In Singapore DBS bank (one of the largest local banks) have outsourced their IT services to IBM.
- Part time/contract staff – during seasons of peak demand college students, school leavers could be employed for product sales, marketing, packing activity. This would be cost effective and also make Quinlan numerically flexible.
- Integrated worldwide supplier network – Quinlan should look for suppliers from low cost countries and they should be connected through an internet based supply chain network. To operate efficiently and produce high quality goods, the organisation must have a cost effective and reliable network of suppliers. By having an integrated supply chain network, the level of co-operation with the suppliers could be improved and response to consumer demand can be much faster.
- Look out for new market segments – focus on the younger generation and cater for their needs. Quinlan has been traditionally focusing its clothes towards the adult and affluent market and they neglected the younger generation that was also spending a lot in clothing. The brand positioning has to be re-defined to attract young people and an icon such as pop, sports stars could be used in advertising.
- Improve quality through new initiatives – by forming project teams who are tasked with looking into quality improvement Quinlan could react to customer needs faster.
- Improve customer retention - in order to react to changing customer needs the most important factor is to know what the customer wants. This could be achieved by using surveys. Customer loyalty, reward programmes could be initiated.
- Diversification – perhaps design a new range of clothes such as underwear or sports wear. This is a risky business but since Quinlan has a reputation for selling quality clothing it could prove worthy.
References:
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University of Leicester, Management, People and Organisations, Edition 11, 2001-2002
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Daft, R. L. (2003), Management, Sixth Edition, Southern-West
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Dilley, R. D. (2004), Management, People and Organisation Local Counselling Lecture Notes, University of Leicester
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Deal, T. E. and Kennedy, A. (1982), Corporate Cultures: The Rites and Rituals of Corporate Life, Addison-Wesley
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Maslow, A. F. (1943) “A Theory of Human Motivation”, Psychological Review
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Sajgalikova, H., Trends of Flexible Work Arrangements and their Applications, University of Economics Bratislava, Slovak Republic
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Schoemaker, M. (Dec 2003), Identity in Flexible Organisations: Experiences in Dutch Organisations, Blackwell Publishing Ltd, Volume 12, Number 4,
- Gjerling, A. N. (1999), The Evolution of the Flexible Firm, Presented at the conference on National Innovation Systems, Industrial Dynamics and Innovation Policy, Denmark
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Fowke, D. (1999), Shaping Corporate Culture, The New Management Network, Volume 12, Number 2
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Businessweek, April 30 2004, [3 May 2004]
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Alderfer, C. (1972), Existence, Relatedness and Growth
