Change in today’s economy

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Discuss the background to change existing in today's economy.

A. Explain why it is important to assess the nature of the organisations' structure and environment before embarking on a change programme.

The environment is shrouded in uncertainty and this is a variable that lies out of the hands of an organisation. It is a turbulent entity that can vary from stable to least predictable and which constantly changes over time. In order to successfully survive in such diverse conditions or indeed to implement a change programme, understanding the structure of an organisation will illustrate how easy, or not, applying changes will be. There is no way of predicting what will happen in the environment since the economy, other people's business, the evolution of technology etc do not depend on the particular business. The structure of an organisation should take into account this unknown variable so as to best respond a circumstance perhaps regardless of remote that possibility may be.

Often in order to limit the impact of this variable the organisation tries to insulate itself, or at least its core productivity as much as possible. Yet there will always be interaction with the environment, be it trying to utilise it for input or having to output the products into it. The better you know an organisation's structure the greater the chances of implementing the necessary change programme. There is a mistaken tendency to regard an organisation as a homogenous group, without recognising that organisations are often made up of several smaller units. Each of these may interact differently with the environment. The better you know an organisation's structure the greater the chances of implementing the necessary change programme.

Burns and Stalker, who analysed extensively the relationship between organisational structure and the environment, identified five different types of environment as well as two basic organisational structures. Mechanistic corporations are best suited for stable environments. These are corporations where power is concentrated in the hands of a few, centred on procedures and practices. They are highly formalised organisations where individuals have specialised duties. These hierarchical businesses are slow to respond to changes so would best thrive in stable environments. Such simpler organisational structures often rely on pooled interdependence, where different parts of the organisation operate somewhat independently for the overall effectiveness of the organisation. In times of relative stability the planner could well consider increasing the formalisation of the company.

Organic organisations are best suited to less stable environments because they are far more flexible. Jobs are not as clearly defined. The organisation is not rule or task-oriented. Employees are encouraged to participate in the running of the business and are not hindered by procedures. In turbulent times, the planner needs flexible groups to collaborate, to be creative enough to respond to the demands of the environment.

In short the question about an organisation's structure does not pit one kind of structure versus another, but rather demands that the planner be fully aware of the environment in order to implement the necessary structural changes needed to respond in a positive manner.

B. How could the organisational life-cycle affect the planning approach? Provide an example based on an organisation you know or have studied, and the stage which that organisation is currently at.

An organisation undergoes a lifecycle similar to that of any other living organism. It goes from birth, to growth, maturity, decline and death, but unlike human beings it is difficult to pre-chart exactly how long each stage will be . An organisation's lifecycle can be subdivided into different stages, each characterised by a crisis. This crisis allows the organisation to enter a new stage. Without an understanding of the lifecycles a planner cannot understand the stage in which an organisation is, nor the likely characteristics of the forthcoming crisis and consequently what the next stage which to evolve should be. One of the more interesting organisation lifecycles to analyse is that of the Sony Ericsson WTA (Women's Tennis Association) Tour. The WTA is the business that spurns some of the highest-paid sportswomen in the world. The lifecycle of this organisation is an interesting study of women, of female athletes and businesswomen.

When the WTA was first formed in 1970 it was nine sportswomen who had the vision and audacity to want to be remunerated for their work and not merely be amateur sportswomen . This can be accurately called the birth of the WTA. There was however the need for a leader who could unite and spearhead these visionaries. This was the first crisis, characterised by a need for leadership. From these humble beginnings emerged a leader Billie Jean King, who to this day is a driving force for gender equality, who is both an outstanding business leader and prodigious tennis player. Since then the WTA has grown into a worldwide organisation where women can travel the globe being paid for their work, and not merely engaging in sports on a part-time basis as is often the case in other sports. The top-ranked player always is a figure-head for the tour and sponsors are drawn into that gifted young woman. Names like Maria Sharapova and Serena Williams transcend the sport and innumerable sponsors are drawn to their international appeal.

Yet in May 2008, in an unprecedented move, , 25-year-old Justine Henin retired when she was ranked number 1 in the world, leaving the state of the women's game in utter disarray . In a little over a year there four different women have been ranked in the top spot . Sponsorships may be reluctant in the future to invest money in a business that does not have a recognisable brand name. As if that was not enough, Larry Scott, who had orchestrated unprecedented sponsorship for the WTA, resigned as CEO of the WTA to take up a new post as PAC-10 Commissioner . Thus the WTA has lost its business (Scott) and athletic (Henin) figureheads. This organisation is in a period of turmoil. An indication of it is the number of people, players included, debating whether current world number 1 Safina should hold this prestigious title. Is she a worthy leader of the premier female sport? There is a perception that the value of the product has diminished . All this leads to the perennial debate as to whether they deserve to be paid as much as men. The organisation is in a period of crisis desperately needs revitalisation. The way in which the WTA Tour will navigate these rough times, will be key to the survival or revival of the organisation.

Bureaucratic organisations
A. Explain what a Bureaucratic organisation is and list the strengths and weaknesses of applying this model to an organisation.

Despite bureaucratic organisations nowadays having somewhat negative connotations, in its original definition by the likes of Max Weber they were seen as an ideal for managing a business. Everyone knows their responsibility and employee behaviour is carefully controlled. Employees work in extremely specialised tasks thus gaining specialisation and no time is wasted in tasks in which they are not fully competent. Since critical thinking is deterred no time is wasted in trying to come up with noveldeas. Time in the organisation is merely spent performing pre-defined tasks where performance and productivity can be measured and through specialisation of people and technology these can eventually be maximised.

A bureaucratic organisation has a classical hierarchical structure with power concentrated in the hands of a single person or group and with subordinates below them. In this school of thought, this is the only way to maximise productivity and performance. If subordinates are given too many tasks then these are completed less efficiently. People who work in such organisations execute their orders impartially and are therefore fully focussed on the task at hand. It is the person's job qualifications that make them obtain their jobs position and they can aspire to eventually rising up the ranks of the organisation over the course of a lifetime. Once gained, authority is not questioned since it is assigned due to one's position in the hierarchy. In other words a bureaucratic organisation is highly autocratic and status- oriented. It is focused on the leader who makes most of the decisions and on whom the organisation depends. Thus for leaders there is a high degree of satisfaction .
Due to its rigid structure a bureaucratic organisation is slow to acknowledge the need for change and then later to implement it. It is very inflexible meaning that old solutions are applied to new problems in a possibly turbulent environment. Thinking and acting that does not strictly adhere to the written policies is highly discouraged. Thus certain unforeseen scenarios simply cannot be tackled since they were never in the original procedures manual. Though bureaucracy creates rules are procedures to facilitate efficiency it is this excess of procedures that make it inept in turbulent times thereby actually hindering the organisation's efficiency.

The bureaucratic organisation also fails to recognise the myriad of reasons that motivate people to increase their productivity besides monetary incentives. It is very impersonal and does not take into account the individuals who form the organisation and their feelings. There is no mention of a feeling of ownership towards their work, nor is there is any acknowledgement that if employees were encouraged to take pride in the task they would then feel spurred to go the extra mile. Although there are rewards in a bureaucratic organisation, these are over the course of a lifetime. Nowadays few young people embark on a lifelong career. Switching jobs and careers is far more commonplace than in Weber's days, so a structure that rewards longevity in an organisation is not always practical. Similarly, being specialised is one thing, but overspecialisation is negative particularly in an era when job stability is not a given. If someone who worked in a bureaucratic organisation were to change jobs or careers they would likely find it challenging.

B. Explain what the main differences are between the scientific school of management and the human relations school with an example of where each may be the most appropriate.

The scientific school of management rests on the belief that work can be divided or fragmented into measurable units thus ensuring that production is always efficient and task completion guaranteed . This was believed to be the best way for all organisations to be run. This can only happen with a high degree of specialisation of tasks. This was of particular relevance to Frederick Taylor and Henry Ford who were alive during the industrial revolution and therefore sought ways in which to mass-produce products. They therefore ran their businesses in an impersonal manner. The belief was that if the employee or machine was assigned just the one particular task they would develop expertise in that particular area thus saving time in completing that task. Each worker, much like machines in an assembly line, was therefore assigned a small standardised task that was performed repeatedly . An organisation thus managed would be very hierarchical with strong emphasis on obeying superiors and with no flexibility at all.

Factories where items like clothes and shoes are produced are also run in this manner. Every day, month, year employees complete the same repeated task. There are clear production targets (perhaps a certain number of shoelaces have to be put in shoes in a given timeframe) and there is no straying from this particular highly specialised duty. Even machines are specifically created to fulfil that particular duty. Blind obedience is required. There is no time to get creative, to question the validity of the task or of the leader. Similarly the clothes or shoe factory manager has no time to consult their employees nor to take into consideration their particular feelings and emotions. There are production targets that need to be met. It may be impersonal, but tangible results are achieved.

The human relations school believes that performance cannot be enhanced without acknowledging that the workforce are humans and therefore unpredictable. Human beings are not just motivated by money. Often social and psychological incentives can be more powerful than monetary ones. If leaders are democratic and even consult staff in matters that affect them, performance will be improved since there is a sense of fulfilment from the employee. They will take pride in the end result since they feel as though the contributed physically and psychologically to its completion.

This would the kind of management employees most appropriate for creative companies such as Google. When enumerating the top ten reasons to be considered when joining their team, Google speaks of how it is “remarkably fulfilling” or that it is “mandatory to have fun and work at the same time”. They stress the importance of each member of the team and how their “creative ideas matter here and are worth exploring” - in short saying that there is no formal hierarchy. No matter a person's rank, the individual is encouraged to contribute. Ideas generation is fundamental to an organisation such as Google that revolves on innovative approaches. It cannot afford to overlook the ideas of certain people merely because they are juniors. Quite the contrary - productivity can only be increased by increasing the number of ideas presented .

A. Compare the contingency theory, open systems and formal/informal views of organisational development

Formal and informal views of organisational development mirror the number of written rules and procedures that are in. A formal organisation is one with several rules and procedures. It will often have a hierarchical structure and therefore be somewhat impersonal. Since tasks are clearly defined employees have little say in duty definition or the running of their organisation. A very formal organisation will also be highly bureaucratic. It would probably be slow to implement change since few would be allowed to even suggest it, and often any solutions implemented would be old solutions to new situations.

Informal organisations are just the opposite with fewer rules and procedures. Often the behaviour of employees will be governed by workplace culture - a set of unwritten rules and customs. If any changes are made it is not because the leader dictates so, but rather is the outcome of a collaborative exercise. Since there are fewer written rules these kinds of organisations tend to be more reactive. A highly informal organisation would also be slow to implement change since power no longer is in the hands of top management and it would be difficult to coordinate all teams to act accordingly.

The contingency theory proposes that managers have to find out the best way to organise their own business. There is no one formula that is applicable to all businesses since they should take into account the particular environment in which the business operates, the technology available and its size. It is thus contingent on the internal and external business environment. It does however present the manager with challenges since there is no empirical definition of what the key variables are so it is hard to apply rationally to organisations. There is also no clear link between structure and performance and it tends to disregard informal structures.

Open systems look at organisational development in terms of personnel flow and outside resources. In other words an organisation is never entirely closed off from the environment in which it operates. Its inputs are obtained from the outside environment. These could be information, personnel, technology, energy, to name but a few. Likewise its ability to produce outputs may be constrained or enabled due to the conditions of the outside environment. An organisation's ability to meet its goals hinges on it fully appreciating both the human fulfilment of its staff and what technology can complete given tasks .

Open systems put forth the notion of trying to achieve a balance between the input from and output to the environment. When it comes to change management, since total energy is a finite resource, implementing new programmes channels energy away from one task and therefore such choices need to be taken with caution . Much like the homeostatic mechanisms employed by the human body, the organisation too needs to strive for equilibrium with the environment . Too great an extraction of resources would put excessive strain on productivity and perhaps be wasteful of those resources. Too few resources would result in production being drastically reduced. Similarly, effective production has to be in synchronisation with resources inputted. Were production to drop then there would not be enough money to then derive resources to input into the organisation. There thus has to be an alignment between input and output. If, for example, are thrown away since they are outdated they have to replaced by new computers, thus maintain the balance.

B. Grenier talks of dimensions of organisational development and lists 5 key dimensions. What are these dimensions and how would a planner use this understanding when working in a change programme. Give an example using at least 2 dimensions.

Grenier's model of organisation development pivots around 5 key dimensions. These are the age of the organisation, its size, the stages of evolution, the stages of revolution and the growth rate of the industry. These dimensions can then be related to five phases of evolution. Grenier's work is of particular use when working in a change programme since it maps out what the transition stages between different phases of evolution. Critically he also links the notions of organisational growth and development with crisis. They are inter-related. Growth and development cannot occur without a period of crisis and crisis is a sign of growth and development. Therefore despite ‘crisis' usually being associated with negative aspects the careful planner should acknowledge it is a sign of positive aspects that have occurred before and the possibility of further development and growth yet to occur . Grenier's work also allows the planner to foresee any possible crises. Even if a planner successfully identifies a solution, it is not applicable to all phases of an organisation's evolution. What may be the solution to a particular phase ironically is the very reason the organisation will later enter another period of crisis. In short, the planner has to be very sensitive to these slight shifts and not propose changes that may be counterproductive due to the evolutionary stage of the organisation.

Logically enough, an organisation starts in the Creativity Phase. This is the initial phase when members are buzzing with ideas. Communication is informal. However in order to evolve from a group of people with plenty of enthusiasm and perhaps little coordination to a more formal organisation there is a Crisis of Leadership. This is the period when a leader is chosen whose vision can drive the organisation forward. That is why the next phase in the organisation's evolution is the Direction Phase.
There now is a clear leader. So rather than being a more organic where anyone can contribute, it is much more formal, and power is more centralised in that leader or group of leaders. There will however come a time when there is power conflict and more members of the organisation seek to have greater authority and not merely depend on the founding leader. This is the Crisis of Autonomy and if correctly identified, the planner would recommend shifting power from the hands of the single leader, perhaps the organisation's founder, and sharing it amongst many. If this advice is followed then the organisation enters the Delegation Phase.

Delegation is the way to cope with the growth of the organisation which cannot be effectively handled by a single person. However due to the fact that there are many new leaders the organisation enters a period of crisis of control- yet another seemingly contradictory crisis. Whereas at first it needed more leaders to help cope with growth, the fact that now there are many leaders makes the organisation uncoordinated and inefficient. It needs greater bureaucracy. The planner would recommend more rules, clearer guidelines and policies so that employees' roles are clear-cut and their performance and behaviour can be more carefully monitored. Once there is better planning the organisation can enter the Co-ordination Phase but often ends up restricted by too many rules and policies. Rules and procedures can seem impersonal and though on paper were the initial solution, now they are impractical, perhaps even outdated. This is the Crisis of Red Tape. Once this period of turmoil is overcome the organisation enters a Collaboration phase. The organisation is now a series of teams. The next period of instability involves a Crisis of Uncertainty. The organisation has lost its direction and it is not sure what the future holds. It may go back to strong leadership, thus making its development cyclical. Perhaps it should break up into smaller entities.

Grenier recently added a sixth phase which would happen after the Collaboration Phase. This is where growth happens through extra-organisational solutions. This is where the organisation grows through alliances and mergers. The organisation grows since it no longer operates alone, but rather as part of a network or organisations


Plant R - Managing Change and Making it Stick (Harper-Collins 1987) ISBN: 0006368735,,12781~1657960,00.html