Managing in a Challenging Environment

1.0 Introduction

Gore is a unique organisation in terms of structure and control. This has been in place for nearly 50 years. The founders of the organisation had a vision for the structure that would contain fewer rules, which encouraged the strength and expertise from colleagues.

The organisation is multi national and regularly appears in the top list of organisations. With the growth of the organisation the culture has been maintained and nurtured. Leaders appear naturally, with very few formal managers.

The beliefs of Gore are well studied and documented but few organisations have attempted to introduce their philosophies. Organisations are reducing their hierarchical structures, but they are also reducing employee numbers.

For the purpose of this paper the name W.L. Gore & associates has been abbreviated to Gore.

2.0 Contents

3.0 Case Study

This section will discus the case study and compares this to the traditional model of organisational practices.

3.1 Foundations

Most organisations (even the very large) have their foundations in one or two individuals who had the determination to turn a vision into reality. These founders are said to possess entrepreneurship. These leaders are embedded in the culture of organisations. These organisations have primarily developed around the ideas of entrepreneurial individuals, for example the development of Virgin around Richard Branson, Dyson around James Dyson Microsoft around Bill Gates. The growth of successful small enterprises into medium-sized firms and beyond presents a multitude of managerial and organisational challenges for these entrepreneurs (Cunningham, I. 2002).

The founders of Gore are both entrepreneurial and transformational in their vision; this is reflected in the structure and culture of the organisation. Although a relatively new concept of charismatic leadership this is an accurate model of their style. This is based on the belief that the leader can broaden the awareness and interest of his/her followers. Consequently, the aims of the leader are of greater importance and are placed prior to the personal goals (Mullins, L. 2005).

Steers (1996) defines charismatic leadership as “a special quality that enables the leader to mobilise and sustain activity within an organisation through specific personal actions combined with perceived characteristics”. Employees are motivated by charisma beyond their original expectations. This is done in three ways, awareness about certain key issues and processes are raised, organisational goals are placed above the own interests and adjusting the needs level, so they have a stronger drive for responsibility, challenge and personal growth (Steers, R, 1996:693).

From their belief that organisations did not require formal structures and hard and fast rules of control, W.L. Gore & Associates has grown into a successful multinational organisation.

3.2 Organisational Structure

Classical writers examined the organisation in terms of its purpose, with its formal structure; the hierarchy of the organisation. The importance placed on planning work, achieving this through supervising the technical requirements, and the assumption of logical and rational behaviour from within the organisation (Mullins L, 1996). Baker (1972) discussed these principals as “it offered simple principals which claimed general application……… it also followed architectural and literary styles which emphasised formality, symmetry and rigidity” (Baker, R. (1972) cited in Buchanan, D. and Huczynski, A. 1991: 430).

Gore’s unique, flat, “lattice” structure contradicts and even challenges the traditional model of organisational structure. This stems from the core values put in place by founder Bill Gore that were introduced to foster a creative and energising work environment. The small plant approach, limits each facility to approximately 200 people. Most plants are self-sufficient, with manufacturing, finance, research and development contained within the facility. These plants have no formal structure, allowing leadership to emerge naturally (Anfuso, D. 1999).

Bureaucratic organisations with strong pyramid structure have the top down approach to authority, responsibility and control. This rigidity and inflexibility are at a disadvantage in these organisations, which are rapidly changing their structure towards learning organisations (Betts J & Holden R 2003).This change is moving organisations towards the structure of leaner and flatter organisations. Not towards the Lattice structure of Gore. So although this structure is acknowledged to be successful, few organisations have tried to copy it.

3.3 Business Strategy

Organisational strategy is the pattern of decisions that determines and reveals to stakeholders the organisations intent; this is achieved through their objectives, purposes, and goals. The organisation identifies where they strategically want to be, and introduces policies and procedures which put in place to achieve these goals. When the strategy is formulated, it will allocate the resources based on its relative internal competencies and shortcomings, and predictable changes in the environment. Johnson & Scholes (1997) concluded that “strategic intent is the desired future state of the organisation…which seeks to focus the energies of the members of the organisation (Johnson J & Scholes K 1997:15).

Managers of organisations have responsibility to get the strategic intent right, not just for the advantage of the organisation. Drucker (1989) discussed the responsibility of management as being “decisive not only for the enterprises itself, but for the Managements’ public standing….for the very future of our economic and social system and the survival of enterprise. The decisions that managers make, do not just affect the organisation, they have an affect on the whole of society, with ethical, environmental and social considerations (Drucker (1989) cited in Mullins 2005:214).

Gore has been successful with their organisational strategy as they are fluid, forever moving and adjusting to the market forces. From the previous years performance new goals are set, brining in innovative fresh activities that make the organisation more effective. These criteria includes increased employee versatility/flexibility; increase of expertise; broadening of the market base; increasing production capacity; improved production economy; and the ability to respond to change (Mullins, L, 2005).

It is argued by chaos theorists that the world of the organisations is unstable and chaotic, making it impossible for them to foresee the future. Therefore traditional approaches to strategic decision making are no longer relevant (R Stacey (1989) cited in Johnson J & Scholes K 1997:78).

This increased competitiveness has raised the value of organisational strategy, for organisations to be competitive they must adapt faster to change. The managers at Gore are constantly changing, utilising the skills, competencies with the ability to deal with forces that represent both threats and opportunities to the organisation (Mullins, L 2005). Strategy has to be managed in a different way. Managers should rely on their innate ability to draw on experiences, introducing flexibility into their role. Experiences should not be regarded as static and constrained, but regarded as a strategic tool, which involves all employees (Johnson J & Scholes K 1997).

3.4 Culture

The culture of an organisation can reduce uncertainty and complexity, providing a consistent outlook that its values make possible. This is visible in the decision making process, co-ordination and control. Brown (1992) discussed that “Effective leadership must be based on sensitivity to, and understanding of the culture. Excellent leaders are not merely aware of the organisations basic assumptions, they also know how to take actions and mould and refine them” (Brown (1992) cited in Mullins, L. 2005:898).

Gore has an open culture, will seek to bring together the correct people and resources for the job. This task culture utilises the power the power within the group, leadership is a joint effort. Leadership is based on expert power, rather than on position within the organisation (Mullins, L. 2005). Gore is an organisation that is based on entrepreneurship; they encourage individualism and diversity in the work force by carefully recruiting and training individuals that will add this value to the organisation. Although organisations are made up of individuals, they are successful from the collective actions of individuals being greater than the sum of the parts. This synergy is the organisation operating together (Morrison 1998).

This open culture fosters the learning of employees and the organisation. With the emergence of a learning culture, organisations are able to undergo the transition to integrated organisational learning, which in turn reinforces the embedded culture. Learning from experience, continuous improvement and a learning climate are pre-conditions for a learning culture. Gore has all three of these values in place (Mullins, L. 2005).The culture at Gore in reinforced with all new associates, they are instructed on the founders and the humble beginnings of the organisation.

3.5 Management Style

A theory of managing organisation is that to manage you have to control; this argument has clear moral and ethical considerations. The idea of control is there are predictability, reliability, order and stability. With control the members of the organisation know what they have to do, and customers know when to expect the product or service. Control is in three key areas of the organisation (1) Economic, this is a necessary control, if this control breaks down then resources are wasted and money is spent inefficiently. (2) Psychologically, to create stable and predictable conditions, the well being of the work force, if this breaks down then uncertainty, ambiguity and disorder prevails leading to disruption within the organisation. (3) Political, they way powerful groups and individuals interact with each other. Decisions that are taken by managers are clear, without subordinates placing pressure on them, and forcing them to do what they want (Buchanan, D. & Hucczynski, A, 1991).

Within Gore the managers appear naturally and are followed for their expertise on a particular area. As projects move on the leadership changes, these leaders are not developed with man management skills. This contradicts the traditional role of a manager who as a leader balances limited resources against the requirements of employees.

Because there are no managers, there are no hierarchies that push decision making through the organisation, there are no pre-determined channels of communication, thus prompting associates to communicate with each other. Associates don’t have titles; they aren’t locked into particular tasks, which encourage them to take on new and challenging assignments (Anfuso, D. 1999)

The two fundamental challenges to a manager are to (1) figure out what to do despite uncertainty and an enormous amount of potentially relevant information. (2) Get things done through a large and diverse group of people despite having little direct control over most of them. These challenges have severe implications for the traditional management functions of planning, staffing, organising, directing, and controlling. The traditional role of management is dated, and has undergone several attempts to modernise thinking (Kotter, J.1999).

Development for managers, has traditionally fallen into the “nice to have” category rather than the “must have”. This embraces the idea that leaders are born and not made. The current managers in Gore have learnt their skills through on-the-job experience. The conventional assumption, that managers learn best through “doing” whenever possible. They come forward and use their expertise and then withdraw their supervision once the task is completed (Reader, A. 1998).

Transformational leaders are able to effectively communicate their vision to an organisation and provide an environment where individuals are empowered to achieve that vision. Instead of telling employees what to do, transformational leaders provide the tools that can help employees achieve greatness. A subset of transformational leadership is charismatic leadership, which is built on the idea that sheer force of personality can be enough to provide leadership to an organisation and inspire high levels of personal loyalty from employees to leaders (Mullins, L. 2005).

3.6 Organisational Learning

Dixon (1994) describes the essence of organisational learning as “the organisation’s ability to use the amazing mental capacity of all its members to create the kind of processes that will improve its own” (Dixon 1994 cited in Wilson 1999). They are organisations where individuals constantly expand their capacity to create the results they truly desire. They have systems, mechanisms and processes in place, that are used to continuously enhance their capabilities to achieve sustainable objectives. To achieve this strategy there is an open culture which promotes learning in both formal and informal methods. Mistakes are discussed and reviewed, theoretically without blame being apportioned (Wilson 1999).

Through the constant reviewing learning organisations are adaptive to their external environment, continually enhance their capability to change/adapt, develop collective as well as individual learning and use the results of learning to achieve their objectives. There is free exchange of information, with systems in place to guarantee that expertise is available where it is needed; individuals network extensively, crossing organisational boundaries to develop their knowledge and expertise. All of these traits are present at Gore.

Employees are valued for their ideas, creativity and past experiences. Within this culture employees’ diversity is treated as strength, and individuals are encouraged to develop ideas, to speak out, and confront actions. With organisations requiring innovative skills to survive; this is based on complexity of the chaos theory. The format of Gore is viewed as self-regulating, emergent, open, whole systems. Capra (2002) discussed the change in organisations as “a contrast in the metaphor of organisations being machines to that of organisations as living systems” (Capra 2002 cited in Nixon 2004:58).

It has been discussed that the foundation of a “learning organisation” is uncomplicated, and therefore should be treated as such. It is based simply on the recognition that change is constantly with us. Problems are becoming more complex, with demands on resources greater; the available ‘technology’ is ever more complicated. The knowledge explosion and the pace of change demands an unparalleled learning reaction from organisations. With quickly evolving technology, declining natural resources and increasing global competition, lead to organisations needing learn more and learn it faster (Bennett, J & O’Brien. M.1994).

Hawkins (1994) discussed the application of a learning organisation as “a change at the heart of our understanding of learning, a shift from viewing learning as being abrupt facts to learning as a more multi-faceted and dynamic process” As Hawkins suggests, it is not that we are learning any differently than before but “our understanding of how we learn has begun to catch up with what happens in practice” (Hawkins, 1994:9).

The learning process has been challenged within Gore to create a culture that allows continual learning throughout the organisation. As knowledge is what matters, organisations and individuals alike must become continuous learners (Bennett, J & O’Brien. M. 1994).

3.7 H.R. Practice

There are fundamental differences in the approach to HR. Storey (1987) discussed these as ‘hard’ and `soft’ versions of HRM.. The ‘hard’ version places little emphasis on workers’ concerns and, therefore, within its concept, any judgments of the effectiveness of HRM would be based on business performance criteria only. In contrast, ‘soft’ HRM, while also having business performance as its primary concern, would be more likely to advocate a parallel concern for workers’ outcomes (Storey cited in Guest, D. 1999).

Gore’s HR practice embraces the soft HR practice, demonstrating concern for their employees in reward and welfare. There is deep integration of HR in the company and its complete commitment to the company’s values, has underpinned the strategy and structure (1) Fairness to each other and everyone with whom we come in contact. (2) Freedom to encourage, help and allow other associates to grow in knowledge, skill and scope of responsibility. (3) The ability to make ones own commitments and keep them. (4) Consultation with other associates before undertaking actions that could impact the reputation of the company by hitting it “below the waterline” (Anfuso, D. 1999).

Performance management can be described as a control mechanism, linking values, behaviours, performance and growth of employees to the organisation. The management can control growth through training and development, the values and behaviours through reinforcing the culture, therefore controlling the behaviour of the employees (Beardwell, I et al 2004).

Reward systems are one of the four key policies within strategic HR. the organisation can use this tool to raise commitment, competence, and congruence and it is cost effective. With individuals having more control on their reward, at a basic level this can motivate, at a higher level can introduce self esteem and self worth. These values are congruent to the organisations values and principals (Beardwell, I et al 2004).

The HR structure has developed over time, changing as the company grows to facilitate maintaining the culture. Likewise, the innovative HR practices the company has in place have developed over time to ensure continual adherence to the values and culture. New employees are recruited that “fit” into the culture, and will perpetuate the organisations beliefs (Anfuso, D. 1999).

All new employees are assigned a sponsor, an associate who has made a commitment to help the newcomer The sponsor gives the person a basic understanding of his or her commitments and what it will take to be successful in those commitments. As associates’ commitments and needs change, they and their sponsors may decide they need something different from a sponsor, and that role may also change (Anfuso, D. 1999).

3.8 Corporate Entrepreneurship

Corporate entrepreneurship is quickly becoming a weapon of choice for many large companies. Corporate entrepreneurship is an attempt to take both the mindset and skill set demonstrated by successful start-up entrepreneurs and implant these characteristics into the cultures and activities of a large company. This can be a powerful remedy to large company staleness, lack of innovation and inertia that is common in mature organisations (Thornberry, N. 2003).

Entrepreneurial thinking is viewed as key drivers in the future success of the organisation. The identification, development, and capture of an entrepreneurial business opportunity should be included in all training interventions. Skills of entrepreneurs that have been identified as being within the scope of training are opportunity identification; shaping; and capturing. The kills that can be developed do not create an entrepreneur, they can only encourage skills that they already posses (Thornberry, N. 2003).

4.0 Conclusion

The lattice structure of the organisation is at the core of the success, all values stem from this. This structure is almost unique in the business world, with few formal managers in place. Communication channels are open, although ad hoc.

It could be argued from a traditional aspect, without formal structures, that the organisation would be chaotic, but Gore’s success is testimony that it does work.

Fundamental to the success is the HR policy, recruiting to perpetuate the culture, rewarding good performance, mentoring new employees and encouraging natural leaders.

The entrepreneurial vision of the founders has been embedded in the organisation. This has allowed natural leaders to come forward, when their talent is required, and to withdraw when other skills are required.

The conflict of diversity is encouraged, with all employees valued for their opinion. This has maintained the learning culture of the organisation accepting and adapting to constant change.

These unique attributes has made them a successful organisation, this as a model should be followed by others, removing formal structure and the hierarchy of control.

5.0 Bibliography

5.1 Books

Beardwell, I. et al. (2004) (4^th Edition) Human Resource Management a Contemporary Approach Prentice Hall, Harlow.

Burnes, B. (2000) (3^rd Edition) A Strategic Approach to Organisational Dynamics

Pearson Education, Edinburgh

Buchanan D, and Hucczynski A, (1991) Organisational Behaviour, Prentice Hall, Padstow

Hawkins, P. (1994), The changing view of learning in Burgoyne, J., Pedler, M. and Boydell, T., Towards the Learning Company: Concepts and Practices, McGraw Hill, London.

Johnson, G & Scholes, K. (1997) (4^th Edition) Exploring Corporate Strategy Prentice Hall, London.

Johnson, G & Scholes J (2004) (6^th Edition) Exploring Corporate Strategy

Prentice Hall, Hemmel Hempstead.

Morrison, A. (1998) Entrepreneurship an international perspective Butterworth Heinemann, Oxford

Mullins, L (2005) (7^th Edition) Management and Organisational Behaviour

Prentice Hall, Pearson Education, Edinburgh

Reader A, Strategic Human Resource Management (1998) Sage Publications, Pitman, London

Steers,R. (1996) Motivation and Leadership at work

McGraw-Hill, Lomdon

Wilson, John P. Human Resource Development: Learning & Training for Individuals & Organisations(1999) Kogan Page London

5.2 Journals

Anfuso, D. (1999) Core values shape W.L. Gore’s innovative culture

Bates, T. (1997). Unequal access: Financial institutions

Journal of Urban Affairs, June 1997

Bennett, J& O’Brien. M (1994) The 12 building blocks of the learning organization

Training, June 1994 v31

Betts, J & Holden, R (2003) Organisational learning in a public sector organisation: Journal of Workplace Learning.Bradford: 2003Vol.15,Iss.6;

Cunningham, I. (2002) Developing human and social capital in organisations

Industrial and Commercial Training, Guilsborough: 2002.Vol.34,Iss.3

Guest, D (1999) Human Resource Management–The Workers’ Verdict

Human Resource Management Journal, London, 1999.Vol.9,Iss.3;

Kotter. J. (1999) What Effective General Managers Really Do.

Harvard Business Review, March-April 1999 v77

Nixon, B. (2004) Creating a cultural revolution: the 21st century challenge for HRD Training JournalOct 2004

Thornberry, N. (2003)Corporate entrepreneurship: Teaching managers to be entrepreneur The Journal of Management Development, Bradford, 2003.Vol.22,Iss.4;