- Slow in response to change.
- Limited communication, especially top to bottom.
- Decisions made to benefit department only and not the entire organization.
- Employees are afraid to change and break the rules in order to initiate progress.
This type of organization is most common in the world today. However it is being proven daily that such a rigid structure is not so much of a healthy one. These drawbacks ultimately affect the bottom line of an organization.
Taking a position of service and customer driven, senior managers had an unorthodox idea for organizational structure in Digipoint, making the core unit of doing business, the employees. The lack of a direct leader to which employees reported was one of the most peculiar aspects of the change. Also the division of work is the main purpose of structure and they erased the traditional way of this division by introducing project-based work.
One could label Digipoint’s structure in different ways such as, the ‘structure less’ organization or the ‘boundary less’ organization. According to Francesco and Gold (cited in Mullins 2007) ‘Features of a boundary less organization include a wide spread use of project teams, inter-functional teams, networks, and similar structural mechanisms, thus reducing boundaries that typically separate organizational functions and hierarchical levels’, the features described are without a doubt, describing Digipoint’s structure. One might even suggest that the organization was quickly becoming a ‘brain’. Using this metaphor one can understand the organization to be one that was thinking and inventive of new ideas and employees were free to express ideas and were not afraid to do so. Senior management’s vision for their flat type structure was well planned and executed, it was as if he could see the future and the results of their efforts.
Not every employee was satisfied with the new way of doing business. This flat structure meant that employees who thrive on being told what to do would now have to change into a thinker. This new plan included the involvement of the employees in the change management process which was a strategic move in getting them to buy into the whole idea.
Also senior management restructuring process involved a ‘clean break from well known routines and habits’, one can identify this as a change management theory developed by Kurt Lewin, a German sociologist in his three stage model of unfreezing, changing and refreezing. One can at the same time criticize this model as being too slow and does not describe the speed in which Digipoint had to change.
After examining Digipoint one can make lots of different observations about the organization’s structure, but one might take an approach that one is more inclined toward. The author of this report is more inclined to believe that Digipoint’s structure is best described as a mix of metaphors, a ‘brain’ and an ‘organism’. According to Morgan (cited in Mullins 2007) ‘The organization is seen as behaving like a living system’ and ‘Viewing organizations as brains involves thinking about the organization as inventive and rational and in a manner that provides for flexibility and creative action’, and even more so, as the employees had to change simultaneously with the systems and procedures of Digipoint. All the changes into the project based organization were new to the structure and the employees, making it a complex and interesting transition. Management’s idea could have easily left employees behind wondering what just happened but the empowerment of employees limited this feeling among them.
Chapter 3
Motivation
Participation
The employees at Digipoint were involved in the changing of the organization. This type of participation by the employees is one that can also motivate them as they feel needed by the company. According to McGregor (1960) in his theory Y model ‘Imagination, creativity, and ingenuity can be used to solve work problems by a large number of employees’, this suggests that the manager knew the employees would react positively to this strategic involvement. In his works on theory Y McGregor (1960) also rightly stated, ‘Staff will contribute more to the organization if they are treated as responsible and valued employees’, again it is as if the policy makers of the organization read the book on employee satisfaction though participation. Most of the employees embraced this type of participative management as this would have reduced the high employee turnover.
One can also refer to Fredrick Herzberg’s motivation theory in analyzing the organization. The directors had the basic hygienic factors covered and his restructuring attempted to cover the motivational factors of the employees. The participative style at Digipoint, brought into the employee’s minds, a sense of achievement, interest and responsibility which all discussed in Herzberg’s motivational theory.
Hierarchy of needs theory and its application to motivation, Maslow’s theory argues that the needs of an employee can be best described in a hierarchical structure. The needs start with the basic application of physiological, safety, love, esteem and self actualization, as shown in the diagram below,
If careful consideration was given to Maslow’s Hierarchy of needs by the policy makers of Digipoint I believe it would have affected the rate of employee turnover by reducing it and therefore encouraging the employees to better serve the customers.
Flexible Working Conditions
Digipoint’s structure allowed employees to work flexi hours as long as the level of service delivered to customers was not affected. For many employees seeking work-life balance and had this type of orientation, this was most welcomed and was one of the motivational tools used by senior management. The work-life balance is critical for many employees and employers, as according to Mullins (2007), ‘Businesses prosper if they make the best use of their most valuable resource: the ability and skills of their people. And these people, in turn, will flourish if they can strike a proper balance between work and the rest of their lives’, and with a similar suggestion by the CIPD (cited in Mullins 2007) when referring to flexible working conditions stated, ‘this relates to an organization’s working arrangements in terms of working time, working location and the pattern of working’. CIPD went on to discuss that flexible working arrangements bring about noticeable effects on job satisfaction and performance.
A Work life Balance Model
Further analysis of Digipont show that flexibility worked according to Taylor (2007, p. 6), ‘In reality life and work over-lap and interact’. This statement holds though to the case of Digipoint, as the employees showed results, based on the fact that Digipoint was ‘back on the money-making track’ and there for delivering a high level of customer service all of its customers. Also employees who can have their life resemble the above model benefit both in their work life and personal life. Benefits will also g to their employers because there are highly motivated and to the people in their personal lives as well.
The Knowledge Worker
With reference to the company one can suggest that with the training and the involvement of the employees in Digipoint that the directors wanted to create knowledge-workers. In this new organization, senior management could have easily gotten rid of the older workers and replace them with new knowledge-workers. Instead they choose to develop the existing staff.
If one were to agree with the writer, one can now make a co-relation to the organization’s structure, to the motivation of the knowledge worker. The knowledge worker thrives in the organic type structure according to Reigle (cited in Mullin 2007), ‘knowledge workers in today’s high-technology organizations require environments with organic characteristics’. Management once again proves his long viewed foresight in setting the organization for the type of worker he wanted.
In this new style employees felt empowered. One can suggest that the employees were setting their own goals. Discussions in Latham and Locke’s goal theory show that employees’ involvement in their own goal setting is in itself a motivational tool. Also according to Hannagan, ‘At present goal-setting is one of the most influential theories of work motivation applicable to all cultures’, this also suggests that the project based structure was one of genius.
For the Knowledge worker at Digipoint there were certain expectations. Good performance meant that they might be given bigger responsibilities. While this may not be viewed as a reward, for the knowledge worker the expected outcome of one’s good performance is a type of recognition. Vroom’s expectancy theory states that as long as the worker knows the outcome (albeit what they expected), he/she will work towards it.
Chapter 4
Leadership
Part of all the changes taking place in the organization was also the style of leadership. As Digipoint responded to competitive market pressures and they decided to restructure. A key aspect to the change was the change from a hierarchical style to more of a mixture between Likert’s (1970) model of participative and consultative style. In their research on leadership style, Vroom and Jago (1978) described consultative leadership as, ‘the leader shares the problem with subordinates, obtains their ideas and suggestions, and then reaches a decision which may or may not reflect their input’, this in a nutshell describes the policy makers method but there is more to it than that. In adapting this consultative style leadership, they still remained with a lot of the decision making powers in the organization even though to the employee it may not have seemed to be like that. Encouraging employees to use their skills and experience in problem solving and new idea creation was motivational for the now newly created knowledge worker. By allowing employees to have the impression that they have decision making powers Digipoint showed participative leadership. In This unique leadership style everyone’s thoughts and ideas are considered by the team leader.
Digipoint took the opposite approach to the exploitive authoritative style of leadership, in Likert’s four-fold model this style is one of imposing decisions. According to Likert (1961) he describes the exploitive style as, ‘decisions are imposed on subordinates, motivation is based on threats, there is very little teamwork or communication; responsibility is centered at the top of the organizational hierarchy’ certainly based on this theory one can suggest that director’s style was the direct opposite. Digipoint’s style was one that was geared toward winning over the employee not ridiculing them. From the grid shown below it can be seen that Digipoint has taken a Team Management style approach as a form of restructure.
The New Psychological Contract
This unwritten contract was introduced in the 1960’s and is used even more in present day organizations. According to the CIPD the psychological contract is, ‘the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other’, this suggests that both parties are involved in its initiation.
In came new policies, out went the old structure and with it went the old psychological contract. The old contract may have taken care of the basic needs of Digipoint’s employees. According to the Institute of Administrative Management (2003), ‘People no longer come to work to be told what to do, but are aspiring to be part of the whole’, this explains Digipoint’s contract. Their employees were part and parcel of the company, they knew this and they were also reminded of this fact with their level of responsibility and the company being known as employee centered. For Digipoint and its policy makers this new contract would have broadcasted employee commitment and a general care for the company.
Managers vs. Leaders
One can sum it up by saying that manages have subordinates and that leaders have followers and that leaders can control situations though people. At Digipoint, the directors took a mixed approach to his leadership style. Path-Goal theory of leadership can be suggested as one of the models they took. Path-Goal theory comes out of the expectancy theory and concentrates on the leader’s ability to influence the subordinates. Developed by Robert House in 1971, the theory suggests that the behavior of the leader is related to the outcomes he/she get from employees. With this flat structure employees could communicate with management and one can suggest that employees would discuss their challenges they have encountered. This type of support would act as a motivational tool in getting the task completed. In Path-goal theory House spoke about supportive leadership as being; showing concern for the follower and ensuring a friendly work environment.
The director’s leadership style also contained traits from Fiedler’s contingency theory, where Fiedler discussed the fact that the leader relies on subordination, task, and group variables. This type of situational leadership relies heavily on the relationships between leadership and organizational performance. At Digipoint this was the case, with the employees being customer focused, task orientated situations most of their work life. With their regular meetings they felt like part of a whole.
Chapter 5
Conclusion
Digipoint is arguably the organization for the future. With a host of theories being applied, one can suggest that management consulted on change. Picking his theories quite delicately they were able to transform Digipoint back to its successful financial position. This shows that even the old theorist of the past and their theories are still relevant in today’s organization.
Digipoint would have been great for the egos of many theorists in proving them right even though one might say they did not need it. Being customer focused, the use of the flat structure was also a positive move, in that the decisions affecting customers were made much easier. The use of motivational theories like McGregor (1960) and Herzberg’s motivational factors by management propagated employees to strive for excellence in whatever project they were on. In creating the knowledge worker they knew what in tern motivate such a worker. Policy makers also used the teachings from institutions like the CIPD and the IAM in his creation of the new psychological contract. There leadership style mimicked various models of theory, such as Vroom and Jago (1978) and Likert’s in their work on types of leadership.
Senior management used theories of the past and the present to create his new Digipoint. Mixed with real life experiences and models of theory they achieved his long termed vision for Digipoint.
Summary
Digipoint is an interesting company used for this analysis. Enclosed in the company are many organizational behavior topics and theories. The writer also saw some challenges in separating the issues as they were so tightly weaved On completing this report one of the main lessons is that in organization behavior, one cannot discuss any one theory or model in isolation. Having such a broad scope of study, Organizational Behavior takes an in-depth researched approach to its study.
Management’s level of risk taking in implementing the drastic changes in Digipoint was very admirable. They could not accomplish his vision without a high level of the chance that the whole thing could fail. With all the various usages of the organization behavior theories and the different models found in the company one can suggest that policy makers consulted on change then they implemented the theories and models to suit their vision.
This report covers some of the organization behavior issues from the company. Many theorists would have different ideas about what is taking place in Digipoint, and then they might even contradict each other. That just confirms the fact that organization behavior takes a system, and a multidisciplinary approach.
Projected Challenges
Digipoint has gotten far with its change management and all the other changes, but even for the company change is eminent. If Digipoint remains with its flat structure one can foresee challenges in the future. One can state that managment did create his knowledge worker to suit the structure. However if an employee had a different orientation towards work than the one he was promoting then the structure could have failed. For example if one had an instrumental orientation, one could probably hide behind all the knowledge workers and not be shown up.
It is also foreseeable, because of the possible loss of control; they may have to readapt some the hierarchal traits in the organization. Where the new system is working, over time one can suggest factors of the older models may have to be introduced. For example in the hierarchy structure there are clear lines of promotion unlike Digipoint. One would have to think that one day the worker might ask ‘what’s next’, and in Digipoint the answer will be nothing.
Recommendations
After discussing the positives and some negatives with the company, one can also make recommendations for the future.
Digipoint might consider:
- Taking closer monitoring measures into consideration. Thus the standard of customer service can rise.
- Revisit line of control management. As a result regaining some of the lost control.
- Have one on one interaction with the customers so as to create a more personal experience.
One can sum up the recommendations by saying that Digipoint’s structure while effective; it only suits the knowledge worker. The company may try divisions in seeking to relate to all the employees and the different orientations employee’s may have. In its divisions, Digipoint could fuel the creative workers and give them opportunity to grow. The company should further consider resuming some aspects of the hierarchical and authoritative type systems. A closer view of their organization might reveal that there are employees who still like the style of being told what to do.
Bibliography
Dessler, Gary (1997), “Human Resource Management”, 7th Edition, Prentice Hall
Handy, Charles, (1999), “Understanding Organizations”, 4th Edition, Penguin
Johnson J, Scholes K, Whittington (2005) Exploring Corporate Strategy, 7th Edition, Prentice Hall Publishing.
Lumpkin, Dess (2003) Strategic Management: Creating Competitive Advantages, Mc Graw Publishing.
Mullins, L. (1999) Management and Organizational Behavior 5th edition, London Prentice Hall.
Thompson, J (1993) Strategic Management Awareness and Change 2nd edition, London Chapman and Hall.
Torrington, D., Hall, L, Taylor, S., (2005), “Human Resource Management”, 6th Edition, Prentice Hall