Mintzberg (1994, pp.7-9) and Bedeian (1980) argues that there is a need to discuss if the traditional hierarchical structures are relevant in modern business. As successful organisations’ grow, they tend to employ more people to meet their extra work. These resources may not be play a pivotal role in the long run and as a result of this, the company reviews its structure. Hierarchical structures contains long chains of commands which causes poor communication and poor coordination, which left unchecked will cause diseconomies of scale
Senior (2002, pp.586) states that matrix organisation relies heavily on teamwork, with managers requiring high-level human management and behavioural skills.
Now-a-days, many companies have de-layered their organisations with one or the other reason. However, this de-layering of structure is assumed to be a controversial policy as it is not always seen to achieve its objectives. The gains from de-layering are
- better communication, as there are less layers to pass the message on,
- increased responsibility,
- better motivation and
- Reduce costs.
The disadvantages are:
i. It causes staff redundancy, this may be as a result of cost cutting, which
ultimately leads to loss of motivation.
- There will be a loss of knowledge because of the removed staff.
- Affects customer relationships; the staff might have good rapport or key contacts with the customers.
3. Organisational Change – Response
Change
Oticon was moved to Hellerup and the new structure was implemented on 8 Aug 1991. The new structure implemented, has had a significant impact on all aspects of the organisation. The usual and well known habits and routines were changed. However, there was some resistance to the change from the employees. Oticon tried to minimise the resistance by keeping the employees updated about what was going to happen in the next three years. The managers informed its employees about the new policies adopted and openly discussed about the benefits, and the reasons for implementing the change. Many employees had actively participated in planning of the company. The company mandated all its employees to use a personal computer (PC) and they were encouraged to carry their PCs to their home such that they could gain some expertise. The attrition rate in the company had slowed down in the initial three months of implementing the change.
Why resistance?
There is some kind of resistance from the employees of Oticon with the implementation of new change. This resistance may be because of lack of trust in the management or their personal opinion on change or misunderstanding created because of miscommunication about the change.
Responses to change
Though, this concept seems to be a totally new experience, there were some employees who were not comfortable with the change implemented. Mullins (2007, pp.740) suggests a framework to managers, so that they can understand what changes the organisation is capable of handling, and he identified three factors that had a significant effect on organisational responses to change.
- Resources: There is certainly a chance to the organisation of coping with change if it has access to high quality resources.
- Processes: these constitute co-ordination, communication, patterns of interaction and decision making. These processes may be formal or informal.
- Values: These are the standards set by the employees to prioritize the customers or to judge an order, if it is attractive or to judge an idea for the product if it is attractive.
Apart from these, there might be some natural responses to the change in the employees of Oticon like fear, frustration, dissatisfaction, insecurity and resentment.
Overcoming resistance to change
The success of any change depends on the willingness of the employees to accept and implement the change. In Oticon, the major resistance to change came from the new technological developments adopted, like using a PC for communication. According to Kotter (2002, pp. 740), there are some possible solutions to minimise the problems that arise due to technological developments and Oticon implemented successfully.
- The company should create trust and commitment among the employees and enable them to participate in active decision making. Oticon in successful in involving its employees in decision making.
- The company should give information about the proposed change, its implied benefits and should encourage employees to raise their concerns. Managers should handle any difficulties in working relationships and should attempt to find solution. In my opinion, the company had perfectly utilised the theories to motivate its employees.
- The company should implement change in such a way that the change balances socio-technical balance. With the use of new technology and automation, the jobs become boring and repetitive. This will reduce the job satisfaction among the employees and provides them a little challenge.
- The company should carefully consider the job design, the development of teams, and relationship between the nature of the jobs and their content. There is a need to pay attention to the employee involvement, development of skills, problem solving capacity and decision making.
Generally the change in an organisation is led by the front line staff where as the senior managers play the role of facilitators in organisational transformation. Managerial behaviour plays a pivotal role in the implementation of the change. Some employees may respond positively, or show interest to the change. But there are concerns where the employees are mandated to participate even if the employee is not willing to cope with the change. This may lead to further frustration and insecurity in the employee. To solve this, a manager needs to analyse the effect of change on each employee and take special care in dealing with the dis-satisfied employees. He should try to explain the potential benefits in implementing the change before the dissatisfaction in one employee might spread to the other employee.
The change should be in such a way that:
- should reduce the burdens on the participants,
- should not create insecurity among the employees,
- create interest among participants.
Apart from the advantages, the employee facilitation in involvement and participation has drawbacks as well. If the team is very large, then it will be highly time consuming and expensive.
Project organisation –Teams
A group can be defined as a of who contact regularly, have frequent interaction and work together for common set of goals. Groups play an important role in motivating, inspiring and extracting the best from an individual. In most of the organisations, work is performed in groups. However, the critics, in contrast, assert the misinterpretation of managing group conflict.
In Oticon, the participants are divided into project teams depending on the size of the project. The size varies from 2 to3 in a small project to 20 to 30 in a large one. The project manager is responsible for marketing and introduction of the project into the market. The selection of the project leader is done in several ways. Sometimes the person who came up with a proposed project (idea) is given the role. At other times, the senior management takes the responsibility to appoint a project manager taking his/her skills into account. Firstly, where the person proposing an idea being made a project leader, I guess the management should consider his skills, qualifications and technical expertise in the project. In India, even if a person works for more than ten years on the same field and have technical expertise in the that field and if comes up with an innovative idea , the management considers certain qualifications to promote/appoint him/her to a project manager position and vice versa. Secondly, if there is a highly experienced person who is familiar and worked on similar kind of project, the idea that Opticon adopted can create job dissatisfaction in him, which may lead to his resignation or changing the company.
The project manager has a right to organise the group in his own way. The selection procedure for the project is informal. Any employee who is free and had interest in the project can directly walk to the manager and request for the place. I guess, this informal procedure opted by Oticon, may sometimes be misused. Some managers consider the employees who are favourable to him and show inclination towards their well-beings, even though they have no subjective knowledge or technical expertise. This has an advantage as well, instead of forcefully asking him/her to work, one will know the real interest of the participant working in the project.
Cross functional teams like project based teams are beneficial to the employees as the employees are involved in a challenging and rewarding job, opportunity to gain visibility in front of management and gain wider knowledge in the organisational processes. This will ultimately lead to the formation of the project groups. Buchanan (2004, pp. 305) using Tuckman’s stages of group development states that as whenever a group is formed or a new person enters a group, the group goes through the following five stages.
Forming: This is the initial stage of group formation, where every person is busy in finding the attitudes and backgrounds of other persons. The participants try to create an impression on other group members. Task wise, the participants try to analyse the task allotted to them.
Storming: During this stage, the group members reveal their personal goals and may resist the control of other group members.
Norming: This is a compromising stage and the group develop closer relationships. Task wise, there will be an increase in data flow.
Performing: In this stage, the group focus increases on the group objectives. Not all group come through this process. Interdependency increases and there will be an increase in commitment from the group members.
Adjourning: This is the final stage of the group, either because the project is finished or some people have left.
These stages need not occur in sequence, instead, the group goes through some of these process repetitively and might froze at certain stage for a period of time. Some groups quickly pass through certain stages when compared to other groups.
Group behaviour:
Groups influence the behaviour, attitude and beliefs of its members. When working in a group the dependency on an other team member increases. The problems when working in a group are:
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Relationships: The relationship in the team should be friendly and should not be competitive when dealing with information sharing.
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Member participation: some people might take other share of work and actively participate and the other may be depending on them.
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Goal understanding: Some of the employees have a clear cut idea on the objectives of the team; where as other persons may consider it as a burden bundled on them.
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Information sharing: If there are conflicts within the group, then the flow of information disrupts.
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Expressing feelings: Inability to express personal feelings and discuss project related issues because of fear or insecurity.
When competing with other teams, the problems stated above condense. Every person in a team will knit themselves very closely, expect greater loyalty from other members of the team, and bury their internal differences. The team changes it behaviour and will become more task oriented, ready to tolerate even autocratic leadership.
In case of competition between teams, each team treats the other team members as enemies. Each team tries to hide its weaknesses and tries to point out at other team’s weaknesses. As a result, the communication between the teams decreases.
I guess this will pose a serious problem when it comes to the structure that Oticon has implemented. Oticon has employees distributed among different projects. Employees are asked to work in various projects depending on their availability. Consider a person ‘X’ in oticon is working in two different projects p1 and p2, if there is a competition between project teams p1 and p2 in one aspect or the other, the person will have limited access to the information on the project p1 as well as p2 as the other team members may be not willing to share the information with Mr ’X’. It has been argued that, though they are representatives, the y align more to their home project.
Conflicts
Oticon has organised its employees in such a way that no person other than a person in senior management level has been allotted a personal cabin and made the employees to sit in an open area. The employees were allotted a portable table to move around any corner within the room. When the employees are working in groups or in a particular work area, there is a chance of conflict to develop within and between employees.
Conflict explains some important aspects of social life such as fights between individuals, groups, social disparities and change or conflict in interests. A conflict arises because of
- Ignoring his/her or others or group needs,
- Perception of a party that the other party has negatively affected or will affect something that the first party cares. These are always influenced by the need and may differ from person to person,
- Misuse or misperception of power,
- Persons holding incompatible or unclear values. Values may be like food habits, culture and etc., Value conflicts are the serious conflicts which are sometimes difficult to handle,
- Difference in personal feelings and emotions over an issue, or ignoring others feelings and miscommunication.
Oticon employees are asked to reduce the waste in the papers and use the PC as the means of communication. Though some may be familiar with the technology, I guess few of the employees would have faced problems in communicating the information clearly or correctly which as a result will lead to argument or conflicts.
Traditionalistic view of conflicts states conflicts as an indication of malfunction with in a group and are viewed as violent and destructive. But human relation view points out that the conflict, which is inevitable and a natural occurrence in any group or organisation, may have a positive impact on the group. Whereas the interactionist view encourages the conflict only when it is tranquil, harmonious, peace and cooperative.
Conflicts are divided into functional and dysfunctional conflicts. Functional conflicts enable and improve the performance of the group in achieving its goals through confrontation of two parties. At individual level, it enables a person to develop his skills, focus on career and take up challenges and deliver the results. Whereas the dysfunctional conflict hinders and breaks down the rapport between employees and destroys the achievement of groups goals. When it comes to intergroup conflict
Stages
A conflict goes through a process in its tenure. The first step is the potential opposition. This creates a chance for conflict to grow. This is because of miscommunication, technical jargon or lack of knowledge or differences in values. The second one is cognition and personalisation, where employees perceive about the other employees. This results in fear, frustration or anxiety. The third stage is intentional, here the parties compete-think about themselves; collaborate- value groups concerns; avoid- withdraw the conflicts or try to minimise; accommodate- tries to value opponents interest; and finally compromise - willingness to give. The final stage is behaviour, and this stage involves visible behaviour of the parties like discussions or statements on conflicts.
Conflict management techniques
Conflict management techniques are not the one which totally clear off the conflicts, but they minimise and regulate the negative consequences. These techniques can be categorised as:
- Problem solving: A face to face meeting is arranged, where the conflicting parties would identify and resolve the conflicts.
- Creating a shared goal: By making the goal clear to the conflicting parties and making them clear that the goals cannot be achieved without their cooperation.
- Expansion of resources: Conflicts related to scarcity of resources like labour, equipment and sufficient salaries can be seen in many companies. I argue that Oticon at some point have faced a conflict because of scarcity of resources.
- Avoidance: Making sure that the employees are not involved in the conflict. But I argue that it is not the effective conflict management technique.
- Smoothing: Downsizing the differences and emphasise is more on common interests.
- Behavioural trainings: Organising human relational training to strengthen or alter attitude, ability and reduce fear and frustration.
- Organising structures: involves transferring or swapping (job rotation) conflicting parties.
Advantages
Apart from disadvantages, conflicts enable one/team to get relief from tension, analysis of the conflict may lead to innovation in procedures, policies and behaviour; makes the group think several times before performing a task; unites the team members at a point of time; makes members to identify their capacities and sort out their weaknesses.
Conclusion
Oticon is successful in implementing organisational change by letting the employees know the reasons and benefits of change. Though there was some initial resistance from the staff may be because of their personal or career concerns, later they got used to it and perfectly helped the company to reach its specified targets. I would like to appreciate the top management for enabling the employees to understand the impact of the change and get used to it by giving them lenience in taking the computers to their home. This exhibited the company’s trust and care on the employees. The company also created a friendly environment by making them sit in a particular open place and asked them to participate in decision making.
Bibliography
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Mullins, L.J., 2007. Management and Organisational Behaviour, 8th edition. London: Financial Times Prentice Hall International Ltd.
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Senior, B., 2007. Organizational Change, Second edition. London: Financial Times Prentice Hall International Ltd.
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Kotter, J.P. and Cohen, D.S., 2002. The Heart of Change, Harvard Business School Press.
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Buchanan, P.and Huczynski, A., 2004. Organizational Behaviour: An Introductory Text, Spain, UK: Financial Times Prentice Hall International Ltd.
Buchanan, D. and Huczynski, A., 2004. Organizational Behaviour: An Introductory Text, fifth edition. London: Financial Times Prentice Hall International Ltd.
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Mintzberg, H.J.,1994. ‘That’s not “Turbulence”, Chicken Little, It’s really opportunity’, Planning Review 22, 6: 7-9.
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Bedeian, A.G., 1980. Organisation Theory and Analysis, Fort Worth: Dryden Press.
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‘Oticon: unorthodox project-based management and careers in a spaghetti organization’ Available at: Accessed 10 December 2009.
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‘Conflict’ Available at: accessed on 10 December.
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‘Complete Perspective of Organisational Conflict’ Available at: Accessed on 10 December.
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Accessed on 10 December.
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Udayan, Raut-Roy., [email protected] , 2009. Attached is the OB Assignment. Thoom, A.K. Sent Friday November 6, 2009 at 8.06 PMay 7 June 2005, 08:13.