Practice of management - The image case study.

BLACKBURN BUSINESS SCHOOL

DMS

PRACTICE OF MANAGEMENT YEAR 1 ASSINGMENT

THE IMAGE CASE STUDY

Introduction.

After examining the Image case study, it is apparent that Walsh and bridges felt a need to “get more organised”. In this assignment I shall discuss their need for this and also discuss whether bureaucracy is still a valid form of organisation structure in today’s business environment, looking at the advantages and disadvantages of this style of organisation. I will also discuss the pros and cons of applying this style of organisation to Image.

The need to get more organised.

When Image (Case Study, 2002) was first established, the partners adopted a client-centred mode of organisation, where each partner became project manager for their individual clients. Due to this style of operating, each partner developed a good all-around knowledge of how the business was operated, developing a multi-skilled style of working. New staff were encouraged to develop the same all-around skills and capacities, creating great flexibility, however it was often time consuming and expensive.

The long hours and pace of life at Image was affecting Walsh and Bridges, who had heavy family commitments and wanted more leisure time. They felt the need to become more organised, in order to exercise a closer control over their staff and office activities, thus taking pressure from themselves in letting the office run itself within the framework they had developed. Walsh and Bridges were not happy with the ad hoc style of organisation they had developed during the first two years; where-by the organisation was temporary, adaptive, creative and flexible, aspiring to a more structured organisation with clear systems, responsibilities and office protocol.

The four principals (Walsh, Bridges, Beaumont and Rossi) frequently found themselves in lengthy meetings concerning office organisation. Walsh and Bridges favoured “more systems”, whilst Beaumont and Rossi argued for the status Quo. Walsh and Bridges felt that future progression could only be achieved by exercising their authority and insisting that a reorganisation of the office was initiated.

Eventually Walsh and Bridges called a meeting of all employees to outline their plans, which involved a clearer definition of job responsibilities, a more formalised procedure governing the exchange of staff between projects, and a closer control over the conditions under which staff were to be away from the office during business hours. Other office procedures were also introduced.

Reflecting on how the business was run, Walsh and Bridges wanted a closer control over staff and office activities, giving them more free time. Due to their age and family commitments, they wanted an organisation they could take a step back from, with the confidence that the firm would not grind to a halt, in the knowledge that everything would run smoothly and efficiently in their absence, thus creating an organisation which was not open to abuse by employees.

Walsh and Bridges wanted to develop an organisation with more structure, rules and procedures, insuring a more reliable and predictable behaviour from employees, thus creating a more efficient and reliable business. There seemed no apparent control or monitoring of employees time away from the office, nor did there seem to be any sort of plan or structure to an employees responsibilities. There were no levels of authorisation in place within the organisation, almost as if everybody was their own boss and left to their “own devices” daily. Although this could create an enjoyable, place to work, it could also create a very inefficient organisation.

Many staff worked long hours, starting early and finishing late. However, was this due to job satisfaction or the in-efficiencies within the organisation?

Bureaucracy.

Since the beginning of the twentieth century (Huczynski & Buchananman, 2001) organisations have adopted a bureaucratic organisation structure, a system created by German sociologist and philosopher Max Weber. The literal meaning being “rule by office or by officials”. Bureaucracy is a form of organisation structure which emphasised speed, precision, regulation, clarity, reliability and efficiency through creating a fixed division of tasks, imposing detailed rules, regulations and procedures, and monitoring through hierarchical supervision. Hierarchy being the number of levels found to be in an organisation. Below (figure 1) are the six main characteristics as defined by Max Weber.

Figure 1: Characteristics of Weberian bureaucracy

Job Specialisation: Jobs are broke down into simple, routine and well-defined tasks. Clear definitions of authority and responsibility are legitimated as official rules.
Authority hierarchy: Positions are in a hierarchy of authority, with each position under the authority of a higher one. There is a clear chain of command, and workers know clearly to whom they are responsible.
Employment and career: All personnel are selected and promoted on the basis of their technical qualifications and offered a full-time career.
Recording: Administrative acts and decisions ...

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Figure 1: Characteristics of Weberian bureaucracy

Job Specialisation: Jobs are broke down into simple, routine and well-defined tasks. Clear definitions of authority and responsibility are legitimated as official rules.
Authority hierarchy: Positions are in a hierarchy of authority, with each position under the authority of a higher one. There is a clear chain of command, and workers know clearly to whom they are responsible.
Employment and career: All personnel are selected and promoted on the basis of their technical qualifications and offered a full-time career.
Recording: Administrative acts and decisions are recorded in writing. Record keeping provides an organisational memory and continuity over time.
Rules and procedures: All employees are subject to rules and procedures that ensure reliable, predictable behaviour.
Impersonality: Procedures and rules are impersonal and apply to managerial and non-managerial employees alike.

Based on Max Weber, The Theory of Social and Economic Organisations, free press, New York, 1947.

Looking at the six characteristics seen in figure 1, we can see that these were not evident at Image. Due to employees developing the same all-around skills and capacities, there was no job specialisation, which although these would create great flexibility, they would not produce efficient, repetitive working practices, which can result in poor performance from employees. When jobs cannot be broken down into simple, routine, well-defined tasks, there are no clear definitions of authority and responsibility. These definitions are legitimated as official rules, which in this case would be non-existent.

There was little chain of command at Image; employees only appeared to be responsible to themselves. There was no hierarchy authority, resulting in slim control over office staff and procedures. With a staff level of 150 employees, control over their workforce would be virtually impossible without certain levels of hierarchy.

If staff were to be away from the office for a considerable amount of time, there would be a need for closer control of their whereabouts, with certain rules and procedures to be implemented. Any employee who was in such a situation, should be subject to rules and procedures, whereby their behaviour was more reliable and predictable whilst they were away from the office.

Walsh & Bridges also complained of a lack of clear systems and responsibility, due to a lack of authority hierarchy, where employees know to whom they are responsible. Beaumont and Rossi’s argument was that the company was producing excellent results and their clients were happy. To them, that was all that mattered. This may have been the case, but for how long, how much of this was due to individual’s memory and job knowledge? Did the business rely heavily on people’s commitment and ability to do the job well? There seemed to be no documentation or written procedure, no recording of administrative acts, resulting in a lack of organisational memory, whereby the company rely on these individuals. What would happen if these key staff were to leave the company, or be absent for a long period of time? Over a period of time, this would almost certainly erode their business performance and results.

Is bureaucracy still a valid form of organisation structure in today’s environment?

Even though bureaucracy is an early form of organisation structure, it is still common in today’s business environment. Almost all large-scale organisations are of a bureaucratic structure, probably due to the fact that controlling large amounts of people is virtually impossible without applying some sort of bureaucracy. However, is it still a valid form? Evidence of bureaucracy does exist. If we look at most large scale organisations, we can see a company’s ability to survive in today’s environment and achieve an acceptable level of efficiency, proves their prolonged existence.

Looking more in-depth as to why bureaucracy is still valid to this present day, there are several reasons to account for their continual existence. Stephen Robbins (1990) suggested seven of these:

Success: For the most part, over the last 100 years, irrespective of technology, environment and people, and irrespective of whether it has been a manufacturing, medical, educational, commercial or military organisation, it has worked.

Large size: Successful organisations survive and grow large, and the bureaucratic form is most efficient with large size.

Natural selection favours bureaucracy: Bureaucracy’s natural features, the six identified earlier, are inherently more efficient than any others and thus allow the organisation to compete more effectively.

Static social values: The argument is that western values favour order and regimentation, and bureaucracy is consistent with such values. People are goal –oriented and comfortable with authoritarian structures. For example, workers prefer clearly defined job responsibilities.

Environmental turbulence is exaggerated: The changes currently being experienced may be no more dynamic than those at other times in history. Management strategies can also reduce uncertainty in the environment.

Emergence of professional bureaucracy: Bureaucracy has shown its ability to adjust to the knowledge revolution by modifying itself. The goal of standardisation has been achieved in a different way among professional employees.

Bureaucracy maintains control: Bureaucracy provides a high level of standardisation, coupled with centralised power, which is desired by those in command. For this reason senior managers who control large organisations favour this organisation design.

Weber stressed (Conley, 2002) both the advantages and disadvantages of bureaucracies

The advantages are:

Bureaucracies provide a hierarchical structure whereby workers can rise through the ranks to positions of relative power.
Progression is based on technical expertise thereby increasing the professional management of organisations.
The development of written rules offered protection to less powerful workers and provided a basis for trade union negotiation.
Bureaucracies replaced nepotism and favouritism with impersonal social relations and the basis for equality of treatment.

The disadvantages are:

Hierarchies and rules formalise power structures and status divides in workplaces
Rules cannot cover every eventuality and are themselves subject to interpretation. Over-attention to a rigid set of rules can often hinder the smooth running of an organisation
Bureaucracies can create 'iron cages' which dehumanise work

Although bureaucracy has proved its need in the current business environment, there are still several downsides, not only for the organisation, but also for the employee. Many argue that in the twenty-first century, a bureaucratic organisation will be too expensive to maintain. It will also be incapable of responding quickly to change and will not be using the innovative resource of its members.

A further downside to bureaucracy is the fact that it is very impersonal, which may come across as disinterest to the employee, thus alienating them from the organisation and lowering morale. Also, the employee may become frustrated, due to the fact that there are many rules, regulations and procedures, causing much wasted time documenting everything rather than “getting the job done”. As well as rules and procedures creating frustration, they may also restrict improvements within the organisation, due to the fact that “the rules say that” and “that is how it must be done”.

Due to the hierarchical system, problems are usually passed upwards, preventing employees contributing to decisions, which will not promote proactive behaviour and can be damaging to an organisation.

An alternative to bureaucracy is adhocracy. This is the style of organisation similar to that which Image originally operated under.

This is a structural system (Sycamnias, 2002) that breaks from the traditional ways of bureaucracy by not holding formal rules or regulations, is usually void of hierarchies, has no standardised procedures for dealing with routine problems, is low in formalisation and is organised for a temporary life. The major highlight of this system is its flexibility and responsiveness in dealing with all sorts of situations quickly and efficiently, particularly in dynamic environments such as computer developments.

The benefits of adhocracy lie in its ability to be adaptive and creative, while at the same time allowing for collaboration from varied specialists with very few rules, thus removing any hindrances and allowing for individual creativeness. A more horizontal managerial structure allows a greater interaction and collaboration; thus becoming a viable alternative to bureaucracy.

In more recent years, businesses have developed a collaborated approach to structuring; combining the sturdiness of bureaucracy with the flexibility of adhocracy. By having a major framework based on strict rules and guidelines, workers on all levels have direction as to their expected responsibilities. At the same time, smaller departments within each business have been created to deal with individual cases that vary from the overall goals set. As such, this system can have stability while at the same time dealing successfully with a diversity that is brought about by changes within society.

Below (Howarth, 2002), we can see some of the positive consequences of bureaucracy as well as some of the negative, not only for the organisation but the individual as well.

Figure 2: Positive and negative consequences of a bureaucracy

Conclusion.

After understanding the need felt by Walsh and Bridges, and analysing bureaucratic structure, we must ask whether this was the correct action to take at Image. Due to the lack of organisation, and the view taken by Walsh and Bridges as to how the business should operate, applying bureaucracy should therefore be the answer. However, prior to doing this, there are other points which must first be considered.

Applying such a structure to this business, we must look at the purpose of the organisation. Image had a reputation as a fast, cutting edge agency, with many project teams and a client centred mode of organisation. Did they want to keep this reputation? If so, would it be possible with a bureaucratic structure?

Looking at Gareth Morgan’s (Huczynski & Buchanan, 2001) continuum of different organisation structures (see figure 3), we can see the organisation structure at Image was a project team structure (No. 5), where by the majority of the organisation’s activities are tackled through project teams. A structure where each team is given its own freedom to manage themselves within the strategic parameters defined by the senior partners. This style of organisation posses more of the features of a network of interaction rather than that of a bureaucratic structure.

Gareth Morgan stated that a bureaucracy could probably evolve from numbers 1 to 3, and perhaps even from number 4, but for an organisation to move to 5 or 6 would require a major revolution. Such a transformation would require not only a structural change but also a cultural and political one. If achieved, it would mean a loss of its bureaucratic features. Reflecting on what GM stated we must realise that not only is this correct, but that this would also be the case if an organisation was to move from a project team structure to that of a bureaucratic one.

Figure 3: Types of organisation structure.

Looking at the culture at Image, it was (Lloyd, 2002) one of task orientation, where-by the majority of the work revolved around different projects and teams. This being a much different culture than a role culture, which is often the type seen in bureaucratic organisations, where positions are more important than people and rules and procedures are the main influence.

Walsh and Bridges must realise that to change the organisation structure at Image, they must be prepared to accept the consequences of doing so. Although they may be happy with the framework they have developed, due to the change in culture, de-motivating employees, leading to staff leaving the firm because of their discontent with change. Not only would Image lose the skills of these individuals, but potentially they could also lose some of their business clientele if certain individuals were to work in a similar industry elsewhere.

In my opinion, if Walsh and Bridges were unhappy with the structure of the organisation and felt a need to get more organised, a lot more time should have been spent on deciding how and when they were going to make these changes, also realising that changes such as these, if they were to work, could not be implemented overnight.

Did Walsh and Bridges want to totally re-organise the business to the point that it lost its reputation as a cutting edge agency, the reputation that put Image on the map in the first place or, did they want to create an agency that produced sound financial results, but was un-inspiring? A decision that could be detrimental to the business.

Looking at Image as a viable business, working within the public relations field, I feel it would have greater potential with a less rigid organisation structure.

If Walsh and Bridges felt under too much pressure and wanted more quality time, I feel they should have given Beaumont and Rossi a greater share of the responsibilities. Beaumont and Rossi were happy to bare this in return for a greater equity in the firm. By allowing Beaumont and Rossi extra responsibility and equity, this would create a greater incentive for the junior partners and would also reduce the burden on the senior partners. The business would still have the same reputation, to sustain or potentially increase the excellent financial results and still be a fun place to work, “the Image way”.