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Lesson#3
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What an ideal effective healthy organization would look like
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What an “ideal” effective, healthy organization would look like?
Numbers of writers and practitioners in the field have proposed
definitions which, although they differ in
detail, indicate a strong consensus of what a healthy operating
organization is.
An effective organization is one in which:
1. The total organization, the significant subparts, and
individuals, manage their work against goals
and plans for achievement of these goals.
2. Form follows function (the problems, or task, or project,
determines how the human resources are
organized).
3. Decisions are made by and near the sources of information
regardless of where these sources are
located on the organization chart.
4. The reward system is such that managers and supervisors are
rewarded (and punished) comparably
for:
Sort-term profit or production performance, Growth and
development of their subordinates, and
creating a viable working group.
5. Communication laterally and vertically is relatively
undistorted. People are generally open and
confronting. They share all the relevant facts including
feelings.
6. There is a minimum amount of inappropriate win/lose
activities between individuals and groups.
Constant effort exists at all levels to treat conflict, and
conflict situations, as problems subject to
problem-solving methods.
7. There is high “conflict” (clash of ideas) about tasks and
projects, and relatively little energy spent in
clashing over interpersonal difficulties because they have been
generally worked through.
8. The organization and its parts see themselves as interacting
with each other and with a larger
environment. The organization is an “open system.”
9. There is a shared value, and management strategy to support
it, of trying to help each person (or
unit) in the organization maintains his (or its) integrity and
uniqueness in an interdependent
environment.
10. The organization and its members operate in an
“action-research” way. General practice is to build
in feedback mechanisms so that individuals and groups can learn
from their own experience.
The only constant is Change:
Although many organizations have been able to keep pace with the
changes in information technology, few
firms have been able to adapt to changing social and cultural
conditions. In a dynamic environment, change
is unavoidable. The pace of change has become so rapid that it
is difficult to adjust to or compensate for
one change before another is necessary. Change is, in essence, a
moving target. The technological, social,
and economic environment is rapidly changing, and an
organization will be able to survive only if it can
effectively respond to these changing demands. As we move into
the twenty first century, increases in
productivity of 100 percent, not 10 percent, will be required
for corporations to compete effectively.
Given this increasingly complex environment, it becomes even
more critical for management to identify
and respond to forces of social and technical change. In
attempting to manage today’s organizations, many
executives find that their past failures to give enough
attention to the changing environment are how
creating problems for them. In contrast 3M Corporation has
developed an outstanding reputation for
innovation. 3M is big but acts small. 3M’s 15 percent rule
allows its people to spend up to 15 percent of the
work week on anything as long as it is product related. The most
famous example to come out of this is
Post-it note.
The Organization of the Future:
The fundamental nature of managerial success is changing. The
pace of this change is relentless, and
increasing past sources of competitive advantage, such as
economies of scale and huge advertising budgets,
is no longer as effective in the new competitive landscape.
Moreover, the traditional managerial approach
can no longer lead a firm to economic leadership. (See the OD in
Practice what Trilogy Software is doing
to become a successful company of the future.)
Today’s managers need a new mind set – one that values
flexibility, speed, innovation, and the challenge
that evolves from constantly changing conditions. Virtual
organizations can spring up overnight as
networks of free agents combine expertise for a new project or
produce. Nothing could be more flexible,
ready to turn on a dime and grab any new opportunity. Management
theorists believe that to be successful
in the next century, organizations will require changes of the
kind in the figure 2 They suggest that
predictability is a thing of the past, and that the winning
organization of today and tomorrow, it is
becoming increasingly clear, will be based upon quality,
innovation, and flexibility.
These successful firms will share certain common traits
including
Faster –
more
responsive to innovation and change
Quality conscious –
totally committed to quality
Employee involvement –
adding value through human resources
Customer oriented –
creating niche markets
Smaller –
made up of
more autonomous units
Figure: 02
Fig. 1.2. The Changing Organization of the
OD in Practice: Trilogy Software – A New Kind of Company:
A dropout of Stanford, Joe Liemandt, formed a small software
company, Trilogy Software Inc., in Austin,
Texas, in 1989. Starting with a small investment, the company
grew from 400 to 1000 employees within a
short span of four years. Today, Trilogy is among the world’s
largest privately held software companies and
is a leading provider of industry-specific software.
To call all those who work for Trilogy as “workers” would be
wrong. They are all shareholders. They are all
managers. They are all partners.
The founder, since its start, knows one thing that is Trilogy
depends on talented people. He also knows
that people can go anywhere, join any of the competitive
companies, which means that his biggest
competitive headache isn’t companies. His biggest worry is
holding onto people. “There is nothing more
important than recruiting and developing people,” he says.
“That’s my number-one job. Trilogy is going
head-to-head with Microsoft and other biggies in the talent war.
They have a very clear teachable point of view of what Trilogy
is and what they practice. They know how
to energize people, how to make courageous decisions. The CEO
personally teaches a large portion of the
classes held for Trilogy’s employee recruitment and development
program – the glue that binds.
Trilogy has some unusual practices, including perks like
speedboat for water skiing available to all
employees, fully stocked kitchens on every floor, and parties
every Friday. And there are spontaneous
awards, such as a sports car for good work and trip to a Las
Vegas. The CEO once took the entire
company on a week-long, all-expense-paid trip to Hawaii. Bonuses
are given to top performers that are
equal to 50 or 100 percent of their regular salaries.
The economy is fostering new kinds of organizations with new
kinds of practices and operating rules for
pulling people together. These companies offer many of the
advantages of free agency; flexibility in how,
when, and where you work; compensation linked to what you
contribute; freedom to move from project to
project. However, they also offer the advantages of belonging to
an organization in which mutual
commitment builds continuity.
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