Organisational Behaviour, Study notes of Management Theory

Download Organisational Behaviour and more Study notes Management Theory in PDF only on Docsity! Micro Exam Preparation (Colour coded) Values, Attitudes and Behaviours Conflict and Negotiation Teams and Leadership Reflective examples in Chronological Order Behaviours Timeline Micro Topic Theory and Example Formation of Values. Compliance: The formation of group for our team assignment group Attitudes and | was allocated by our tutor based on a personality test taken online. Behaviours This clearly shows a compliance as there is an external coercion involved since it is against the student’s will as they would have definitely chosen to form their group themselves. It is the result of an instruction and rule of the OB course. Team contract Compliance: Every team was also forced to form a team contract since it is a hurdle and the consequence of the failure of doing so would mean that a punishment would be given where the team assignment would be graded a fail. A few members of my team met up after the tutorial to form the draft contract. Conformity: Everyone agreed readily that they were willing to put in a huge amount of effort in the group assignment to achieve the goal of H1. This might have been because of social facilitation for the others since majority of the group was already very keen on putting their all into the assignment for a score of H1. There might have been an internal acceptance by every member whether it was involuntary or not. Values: Everyone had the same terminal values which are to graduate and obtain a good job. To achieve this, our instrumental values were to work hard in our degree to graduate with flying colours, in this case now which is to score a high mark for our OB team assignment. We also ranked our values in terms of the content (trivial/important) and intensity (and how strongly we hold them). We place utmost importance in responsibility, diligence and honesty while doing this assignment as we needed everyone to complete their parts to a high standard and avoid any forms of plagiarism. *Possibly add in whether values change throughout the whole assignment and whether Tuckmans model was consistent. Not always in order. Conformity and values: Social pressure lead me into behaving in ways that counter my personal values in order to “fit in”. I value punctuality. There are times where we plan to meet up at a certain time but one of the members would message the group, saying that he would be late, and other members are nonchalant about it. Instead of hurrying him up, I told him to take his time to get there. Lol. (Add in specific examples in the reflection!) Attitude: evaluative statements that relate to a specific proposition. From attitude to behavior: May be consistent or inconsistent (cognitive dissonance) Inconsistent Affective component: I am unhappy with teammate Cognitive: The teammate constantly comes late for meetings and have no punctuality Behavioral: I will not pester the teammate to be more punctual or show my dissatisfaction Consistent I think the discussions are sometimes unproductive : The group gets distracted very easily with other topics Behavioral: I form agendas and always try leading the discussion back to it Low-Context culture: Currently there is a low context culture happening since the shared values and agreements are written down in a contract to be signed. The relationships between the team members and personal involvement is not as valued?? Conflict and Conflict involves two or more parties and can be overt or covert. There are different types of conflict: Process conflict: Disagreements about how work should be organised and accomplished. When deciding on the place to hold our weekly group meetings to complete our assignment, one of our members persistently suggested his own student accommodation that had study area facilities. It was unfair in the sense that the rest of us had to travel a distance to his place and there was also no stable wifi. Managing conflict through negotiation Intergrative bargaining: Intergrative bargaining is used when resolving conflicts during the team assignment by dividing variable resources. This is to strive towards a win-win situation in order to reduce the level of insatisfaction between the members. It also has a longer term focus so that the conflict does not arise again and a convergence of interest will acknowledge both parties’ point and focuses on regrouping the team into one unanimous voice again. Macro OB Case Studies Section Page Enron 6 Apple 25 Solariz/Supernova 40 Automakers 54 Sanrizz 67 Enron Change Chapter: Ist change 2nd change Change: ¢ Planned: from energy ¢ Unplanned: Drought Type of change provider to energy that reduce the trader, from regulated hydroeectric power of market to free market california, Increasing ¢ Revolutionary: price of natural gas in transformed the entire California, plummeting organization= stock price, skilling Adopting new resigned, accounting technologies quickly, scandals transforming its ¢ Enron had not done any business model several changes times The change plan: ¢ Internal: new strategy © Internal: 1. WHAT is causing (which is skilling’s big | Problem with performance change: idea): to find way to outcome: plummeting stock 2. WHO should be responsible for the change deliver energy and transform energy into financial instruments that could be traded like stocks and bonds e External: the goverment partially deregulate energy market (only for wholesellers such as enron, and still set regulated market for retail energy sellers) Skillling because the change happened because of his idea. He also should have the knowledge of the business (since he’s the CEO), the skills needed, and the comfortability with the change price, accounting scandal e External: 1. Economic: Increasing price of natural gas in California, which is one of the first states to deregulate 2. Political and legal: Californian politicians accused enron for manipulating the market price for natural gas, accusation of price gauging during california power shortage Lay: because now after skilling’s resignation, he has to go back to run the day-to-day basis 3. WHAT needs to be changed (PROBLEM) 4. WHAT type of intervention is needed? (SOLUTION) 5. HOW will you implement the change? Strategy: Profit level and product positioning (to differentiate itself and generate profit) Make the vision and strategy of becoming the energy trader and embracing the free market and transform the whole organization based on these principle Unfreeze: Explain the new strategy, what the employees should do to achieve it (implement the money- generating based actions) Strategy: High energy price, the plumetting share price, the accounting fraud case, notorious reputation of enron For the goverment: strategy: soaring natural gas price © Stop manipulating the origin of the energy (make it as if it came from overseas to be able to set much higher price), © — stop doing overschedulling (make as if the pipelines are really congested/highly booked to encourage retail energy provider to pay the congestion fee, which is required to fasten the energy distribution process), © stop limiting energy supply (take power plant offline for maintanence during high demand so artificial shortage occurs and therefore enron can sell much higher price to the individul utility grid managers at the spot market) By the goverment: open up new factories, enable the state to buy froom the energy retailers. Unfreeze: Explain the the money-generating based action is actually a wrong and dishonest strategy, explain how to handle it, and change the Change theory example questions 1.1 Using the Six Silent killers theory of organizational change, analyse what went wrong with the change program? Explain your answer and use examples from the case to illustrate your answer.(25%, 30min) 1.2 Based on the model of unfreezing- changing-refreezing of organization change analyze what went wrong with the change program? Explain your answer and use examples from the case to illustrate your answer. (25%, 30min) 1.3 Using the model for management change develop the change plan for Enron. Explain your answer and use examples from the case to illustrate your answer.(25%, 30min) Recommendations (depend on the question) 1.4 Using the concept of “Organizational fitness profiling”, provide recommendations for how the change at Enron could have been changed to facilitate and improve the change process.(25%, 30min) 1.5 You could also use the principles of effective management in the case study(p176) Answers: 1.1 Using the Six Silent killers theory of organizational change, analyse what went wrong with the change program? Six Silent killers are mutually reinforcing barriers that block strategy implementation and organizational learning. The six silent killers are listed below: Senior management style is either too top down or too laisser faire unclear strategy / conflicting priorities ineffective senior management team poor vertical communication poor horizontal coordination (across functions, businesses or borders) inadequate skills at lower levels AWPYWNS (1) At Enron, the management style of leaders is too top down. As mentioned in the case, communication was essentially one way-from the organization’s top leaders to those at the bottom of the company. Its purpose was to reinforce the demanding goals set by Enron’s leaders. Corrective feedback was not sought. (p5) The leader took decisions prior to consulting and made individual deals. Another example of the top-communication was the code of ethics email sent by Ken Lay (chairman at 2000); employees were not encouraged to communicate upwards and certainly not in the form of negative information. Criticism of the company was not tolerated. Fusaro & Miller argued that Enron created an environment where employees were afraid to express their opinions or to question unethical and potentially illegal business practices. (p7) because the rank-and-yank 10 system was both arbitrary and subjective, it was easily used by managers to reward blind loyalty and quash brewing dissent. (2) Unclear strategy / conflicting priorities? Initially, the strategy appeared to work and very clear that “with deregulation, Enron was able to enter electricity markets where even more opportunities awaited them” (p3) But after Skilling’s departure in 2001, the company was unclear about their strategy. (3) Since the CEO doesn’t deliver enough information, their leader doesn’t know where they are going; and it is not clear that there will be enough money to get them there. As a result, employees are highly anxious-they don’t know where they are going. (4) Other managers know that senior managers are not open to discussion so they don’t bother to try to communicate. The company use bottom-up business ideas and autonomous nature of this initiative meant that senior managers were often not aware of what was going on. For example, Skilling (CEO at the time) knew nothing about Enron Online until an ad hoc group of 250 people were ready to launch the online business. (p3) During the major presentation after Skilling’s departure, he does not explain the situation fully. Robert, while inclined to believe the CEO, mentions “dark rumors” because of a lack of information. Absences of communication are also very important in shaping this culture, which is one, that lack of trust. Both Amy and Gary indicate that they get no information from their managers, indicting a lack of communication and trust within the divisions. (6) Since skilling recruited hundreds of outsiders to bring in new thinking, the company experience inadequate skills at lower levels. Young undergraduates and MBAs found themselves empowered to make multi-million decisions without higher approval. (p4) Company can experience major loss during the trading. 1.2 One-off change programs follow a three-step process of preparing the organization for change, changing the organization and then incorporating the changes within the processes of the organization. This process has in the past been referred to as unfreezing-changing —then refreezing. After Lay became the CEO, he was trying to change Enron from a natural gas company into a new one which deals with new products and services. It started to experience unfreezing process. When Enron was changing, Lay was clearly understanding of what is involved in the change and what kind of change he wanted to make. Afterwards, in the first place, he hired many young employees who were graduated from university. Then, he started to change the structure of Enron (p3 figure 1). A new kind of reward system called rank-and-yank had been created. A new product and service called Enron Online had been launched. Nevertheless, Enron was stopped when it finished all these changes. The reward system was not changed, for example, even when Enron was in trouble. It still paid millions of bonuses to its most successful trader in order to keep them in company (p9). Also, it kept top-down system to ignore and prohibit employees’ feedback. The culture of Enron kept as aggressive and none-question atmosphere. Overall, the Enron just stopped when planned change achieved which is called refreezing period. It did not follow ongoing method which keeps changing gradually and do not refreeze after finish the change plan. 1.3 Using the model for management change develop the change plan for Enron. 11 Figure 1.1 shows a model for organizational change. sneeeeeeeseeeseeesesseesecede Keteeeeeeeeeneenenseesees ¢ Change in Enron is initiated by forces that generally originate in the environment. However, the forces for change may be internally generated. For example, externally, other natural gas companies were trying to hold onto a regulated market. As a market leader, Enron find an opportunity to differentiate its products and services by embracing free trade for natural gas. Internally, this commercialize invention can make a profit whilst doing so. e Change agent Enron’s senior executives are those in power to implement change. Enron moved form an energy producer to an energy trader. There are changes to Structure, Technology, Processes and Culture. e = Structure Structural changes affect the distribution of authority; areas of responsibility; allocation of rewards; alterations in the chain of command; degree of formalization; and addition or elimination of positions, departments and divisions. e.g.at the beginning, skilling wiped out layers of existing management, and recruited hundreds of outsiders to bring in new thinking. (p4) e Technology Technology change usually is driven from outside the organization. The decision to change the technology is efficient to help Enron move from an energy trading company. © Processes This includes the changes of decision-making and communication patterns. Need more information here Culture 12 - Rank and yank system should be eliminated as it had become a way for the managers to reward blind loyalty, discouraging communication with the top management. This may encourage issues that arises due to the lack of transparency, for example, accounting fraud. - Appropriate information about the organization should be made known by the employees, instead of being withheld by the top management. - Enron also need to investigate the accounting scandals, find the criminal, and hold him accountable to return all of the money taken and make the correct accounting report Enron | Culture What is culture? Organizational culture refers to a system of shared meaning within an organization. In Enron, its corporate culture best exemplified values of risk taking, aggressive growth and entrepreneurial creativity which is not balanced by a genuine attention to corporate integrity and the creation of customer rather just shareholder value. We will be able to examine Enron’s culture into greater depth via the three theories of culture covered in the course of this subject. How to identify culture? We will be able to examine Enron’s culture into greater depth via the three theories of culture covered in the course of this subject. Integrationist Single uniform strong culture. e All Enron traders looked very similar. A goatee was fairly common otherwise they maintained a clean-cut and yet outdoorsy look and they all seem to be wearing the same blue shirt. e And they seem to adopt the same language too, signaling membership to the same ‘club’ (how culture is identified — communication pattern). Everyone in Enron seem to be using the ‘in’ words and language or risk being left out or called ‘loser’ which was by no surprise the most popular Enron label of all. e An organizational wide objective and strive to be the world’s leading company. e Enronians believe themselves to be the best and the brightest in the world and convinced themselves that they were contributing towards the society. 15 ¢ It was an intensely competitive environment where employees “compete fiercely among themselves” and leave all other loyalties, including family, behind. Is the culture deliberate? (engineered culture) ¢ Culture was part of a deliberate strategy by Enron’s management. To create and sustain a culture of high performance and competition, employees had to survive the tough recruitment process and endure a punishing workload and intense work hours upon being hired. Managers create the right type of culture via ‘engineering’ the right values through strict recruitment process, selection, leadership, socialization and rewards and punishment. e ‘L &S were revered for their transformational leadership, it was their vision that had led to Enron’s stunning growth.’ 246 Is the culture supported by consistent management practices? ¢ The strategy was explicitly supported by management practices via the reward and punishment system implemented. e Enron implements the “rank and yank” system whereby employees were ranked twice a year and divided into three groups. Those in the bottom last group were given until the next review to improve or face being fired. e Enron’s prevailing employee reward philosophy states that employees deserve to “live like last year’s Oscar winner” if they are “smart and tough enough” to work in Enron. Thus, employees who met their targets were highly remunerated — 75 top performers and their spouses were sent on a four all-expense day holiday trip. Even regular traders could earn multi-million dollar bonuses. ¢ Not allowed to give feedbacks upwards. Are people socialized into the culture? e¢ Employees were in a way forced to socialize into the existing culture or fear being outcast or called ‘loser’. e Blue shirt, goatee, and language. Is the culture organization wide? ¢ It appears to be. Everyone is Enron looked similar and spoke the ‘same language’. Does it benefit the organizational performance? 16 e It does help increase Enron’s productivity, profitability, tremendous increased in growth as claimed by Enron in their 2000 annual report of tripled revenue figures since 1998. Enron was also ranked number 24 among the 100 Best Companies to work for in America by Fortune magazine, seventh largest company in the US and was once valued over $US70 billion, reported $100 billion in revenues, share price exceeding $90 and boost over 20 000 employees. What else would make it an integrationist culture? ¢ There seems to be clear organizational boundary between what is outside and what is inside. Human Resource management had to compete fiercely with investment banks and other more established organizations to recruit the best talents. Within the organization or ‘inside’ employees compete fiercely among themselves. ¢ Top down control of culture by leaders. A strong culture of fear was embedded by top level management onto employees were not encouraged to communicate upwards and more so certainly not in the form of negative information. e Nick names: Darth Vader and also Rebecca rode in an elephant in a major spectacles Differentiationist e New projects within Enron runs autonomously while developing their own infrastructure and staffs from other parts of the company like the EnronOnline case where Skilling didn’t even know about. Critical How employees are affected? e Employees are afraid to voice their opinions, question unethical and potentially illegal business practices because the ‘rank and yank’ system was both subjective and arbitrary thus it was easy for managers to reward blind loyalty and quash brewing dissent. Who benefits from the culture? Managers. ¢ Employees are willing to slog and work long hours and not question authority. How easy is it to resist this culture? 17 Employees had unquestionable faith in both Lay and Skilling as they were both described to be surrounded by faith and charisma as quoted by Sherman (2002) to be the ‘gate-crashing Elvis at an old country club dinner’. Examples: Jayne seemed to be magnetized by the referent power of Lay as she could not understand how people could ‘get things so wrong’ i.e. make their own speculations on the company’s condition even after Lay had make it clear during the stage- managed presentation that ‘the worst was now behind them’. "Lay was able to pitch it to his employees as a merger" "Enron employees had unquestioning faith in both leaders, who were surrounded by an aura of charisma” (p2) Authority Power Orders by the Chair and CEO (both Skilling and Lay) were never questioned or challenged as they were both deemed to have formal power within the hierarchy of Enron. Examples: Ensured that Enron would be located in Houston rather than Omaha, by gaining control of the board after using his power to handpick his executive (also overlapping the 2™ dimension of power) Employees are not encouraged to communicate upwards and are also discouraged from questioning authority. Overall employees were never included in upper level management decision making to ensure that higher level of decision-making was confined to ‘safe’ participants who would not expose and leak Enron’s fraudulent acts. Control of the arena (many issues that threaten power holders never make it to the decision arena) The culture of fear embedded prevents employees to pose questions and thus meetings were often adjourned without any inquiries. Lay handpicked his executives at the beginning of his Enron worklife who are mostly people that have previously worked with him. Lay was able to control the location of Enron by influencing the Board. legitimate and beneficial outcomes for them, the company and the society. Lay's presentation to explain the situation and convince that company is fine with attempt to produce a belief that company is fine. In Enron’s case, the company had an advertising campaign launching the concept of “what we believe” and also declare via Vision Team that “everything we do is change” to reduce the resistance of change. (p3) 20 Information Power ¢ Top management (Lay and Skilling particularly) seems to be holding most of the information and hence their unquestionable authority could possibly be explained by their possession of information that others do not have and hence the reliance and on top management to carry out the appropriate conduct (which is not the case here). The information is kept tightly and not distributed to the employees. Examples: e VP, Sherron Watkins discovers accounting scandal but Lay ignored her. ¢ Skilling's departure: no one knows exactly why except for Lay. e Even when Jayne had frequent access to Lay, she still believed that all the rumors and gossips to be untrue. « Amy stumbles and sees a lot of troubles happening in the financial department but apparently she only has partial information. ¢ Senior managers have no idea what’s going on. Recommendations: The reward system should be restructured since employees became greedy and profit-tracing under rank-and-yank system. Each person only wants higher profits and not for the overall benefit of the company. What are some of the pros and cons of using the power. Critique your own recommendations. There should be more communication between the top management and the employees to ensure more transparency in the decision making which will avoid issues like fraud. Appropriate information should be readily available to the employees especially when it concerns the company as a whole instead of it being withheld by the top management as their information power. The top management (Lay) should not only have hired his own people. A diverse group of employees, although may end up with different opinions, may end up giving constructive criticism from different perspectives for the betterment of the company. Ultimately, the one with authority will make the final decision after considering all options instead of being confined to a limited view (i.e CEO). 21 Develop a change program (combine 3 dimensions) The target network, channel and audience are too generic-there is a need to consider the different audiences in the organization, and to target different networks using more channels are needed. The CEO needs to communicate with the senior managers of each function to communicate what exactly is involved in the different departments; these managers need to then communicate with their subordinates to explain the situation to them. Jayne may need to have meetings with the people most at risk from. Because the communication is too generic and the information is inadequate (i.e., the load is not sufficient), rumor is filling in the gaps and different individuals are encoding and decoding messages differently. There is a need for more feedback if rumour is to be combated and encoding/decoding distortions are to be reduced. This can be accomplished through smaller, face-to-face meetings within the different departments. the one-off meeting may be fine as a starting point because everyone gets to hear the message at the same time from the CEO directly. But it then needs to be followed up by separate communication by different people to different networks. e The meaning of what it takes to be a good manager should changed from one who was macho, aggressive and punitive to one who was democratic and participative. Strategy and Structure Strategy and Structure whose strategy is to protect existing markets and aims to maintain a stable share of the market : Enron tried to protect its market share and brand equity by regaining public trust (Stop Change Strategic Types: Miles & Snow _| Strategic Types: Porter Ist Prospectors — Organisations Differentiation strategy — Aims whose strategy is to find and to achieve a unique position in exploit new product and an industry in ways that are market opportunities : widely valued by buyers: Since there is a new opportunity | Enron erase the rick of having because of the deregulation to pay high price for energy in policy, enron exploit this by inflation period (by allowing becoming the energy trader buyers to make a contract with enron to withdraw the energy at a later date) 2nd Defenders — Organisations Cost-leadership strategy — Aims to achieve the lowest cost within an industry Enron should try to lower its energy price and increase its supplies to balance the profit 22 Apple MATERIAL FACTS/BACKGROUND INFORMATION: Material Facts/Background Information: ORGANISATIONAL MACRO TOPICS: 1) ORGANISATIONAL CHANGE: Causes of Organisational Change: = IBM Marketplace Dominance — Apple Marketplace Dominance = Lack of Competition + Competition = Industry Barely Exists — Rapid Industry Growth = Unstructured Market + Segmented Market = Standardized Costs +> Low Costs = Imitations/Clones Difficult to Produce — Imitations/Clones Readily Produced Change Agent: = John Sculley — Steve Jobs courted John Sculley from President at Pepsi-Cola Co. Inc. to Apple where he undertook the role of President and Chief Executive Officer. John Sculley was heavily involved in the change initiatives implemented at Apple although there was significance resistance evident from Jobs. Evolutionary Change (Small, Slow) Vs Revolutionary Change (Big, Fast) and Planned Change Vs Unplanned. Change: = The personal computer market is a rapidly progressing industry requiring companies to continually evolve and adapt to the volatile environment described above. Whilst Apple has undergone evolutionary and unplanned change due to the nature of the market, the initiatives implemented by Jobs and Sculley are revolutionary and planned. The computer industry requires companies to make big and fast changes particularly within such a competitive and rapidly growing environment. = Sculley experienced difficulties in changing the organisation because of Jobs’ resistance and in particular resistance to strategy. Apple Organisational Culture: = Steve Jobs » Unique Unorthodox Culture > Emphasis on Individual Achievement, Entrepreneurialism, Commitment, Devotion to the Company, Evangelical Spirit > ‘Laid Back and Cocky’ = John Sculley » Corporate Nature > Emphasis on Individual Achievement, Entrepreneurialism, Commitment, Devotion to the Company Declined 25 Apple Organisational Structure: 1970s (Steve Jobs) > Simple Structure >» Vertically: Flat Hierarchy, Decentralized >» Horizontally: Departments and Divisions Non-Existent Early 1980s (Steve Jobs) > Simple Structure, Decentralized Structure, Loose Product Groupings >» Vertically: Flat Hierarchy, Decentralized » Horizontally: Departments and Divisions Beginning to Form (I.e. Loose Product Groupings) Mid 1980s (John Sculley) » Functional Structure/Product Divisions > Split Apple into Two Product Divisions 1. Apple II Division 2. Mac Division Split Apple into Two Functional Groups (Previously Decentralized Divisions) 1. Product Development and Manufacturing 2. Marketing and Sales Vertically: Tall Hierarchy, More Centralized Horizontally: Departments and Divisions Formed 980s (John Sculley) Functional/Product/Geographic/Matrix/Boundaryless Restructured to Three Sales and Marketing Divisions USA, Europe and Pacific, Separate Division to Handle Development and Manufacturing Vertically: Tall Hierarchy, More Centralized Horizontally: Departments and Divisions Formed Vv Late VVVVV=-VV Apple Organisational Strategy: 1970s (Steve Jobs) Miles and Snow — Prospector Porter - Cost Leader; Differentiation; Niche > Go lt Alone Strategy >» High Margins to Distributors » Innovative Products > > vv Low Costs Quality Control Mid 1980s (Steve Jobs) >» Miles and Snow — Prospector > Porter - Cost Leader; Differentiation > Apple (1984) Sculley’s Strategy - Technology Driven Product Orientated Strategy - Unique and Different Product (E.g. Apple II, Lisa, Macintosh) - Coherent Product Strategy but also Consideration of a Strategy which encompassed the Reduction of Costs and Overhead > Apple (1985) - Strategy Conflict between Jobs - Go It Alone Strategy, How fast can we build and Sculley — How quickly can we bring down inventories and control expenses (due to the recession) - Reduce Inventories and Control Expenses Strategy > Apple (1989) - Control Expenses Strategy Mid-Late 1980s (John Sculley) > Miles and Snow — Analyzer > Porter - Cost Leader; Differentiation » Joint Venture Strategy 2000+ (Steve Jobs) 26 >» Miles and Snow — Prospector >» Porter - Differentiation Apple Products/Technology: = Personal Computers Assembled Product (1970) = Apple I (1976) > Manual Difficult to Follow, Machines Lacked Power Supply, Monitor and Keyboard = Apple II (1977) » Plastic Case, Low Heat Power Supply, Built in User Friendly Operating System, Documentation Easily Understood by Non-Technical Users = Apple II (1978) » Floppy Disk Drive, Large Range of Software, User Friendly » Keyboard Limited to Uppercase Letters, No Full Set of Characters, No Up and Down Arrows = Apple II (1983) » Addressed Problems and Cheaper » Rapidly Aging, Too Expensive for Home Users, Unable to Meet the Needs of Professional and Corporate Segments = Apple IIT (1983) >» More Sophisticated Personal Computer, Business Market = Lisa (1983) > Failure = Lisa II (1984) > Cheaper, Faster Model = Macintosh (1984) » Word Processing, Drawing, Financial Spreadsheets, Powerful, Easy to Use, Strong in Graphics = Apple II Portable Version (1984) » Successful = Mac Portable (1989) >» Weighed and Cost More Than Competition = Power book Laptop » Success Apple Image: = Company Logo was initially Isaac Newton Lost in Thought Under an Apple Tree (Reminiscent of Underground Press) (1976). However the company then adopted the Multicolored Apple with a Bite (Byte) Taken Out of It which was developed by the Regis McKenna Agency (1977). Apple Advertising = Apple utilized a television commercial which showed a long line of business executives as lemmings blindly jumping off a cliff, only the last one presumably a Mac user pulled off the blind fold and saved himself. The: advertisement was replaced as it insulted the very people it was trying to reach. Apple Employees and Leadership: = Apple Founder & Co - Steve Jobs & Steve Wozniak = John Sculley - President and CEO of Apple (1983) Chief Technicologist (1990) = Del Yocam - Apple II Division Head, VP Operations 27 Organizing — the organizing functions of Apple provide mixed messages in the case of the Apple II and Mac divisions where the former brings in the revenue but the later has high status. Furthermore not all divisions have access to the same information/meetings. Relationships — the relationship functions are distorted due to the divergence of opinion between Jobs who supports a Young, Hip and Exciting Culture exhibited in the Mac Division in contrast to Sculley who had developed a Corporate Culture within the Mac Division. The relations between the two divisions are strained particularly in the face of such contradictory messages and the role of Jobs in exacerbating the differences between divisions through his conduct and comments. Change — the change functions are distorted due to the divergence of opinion between Jobs who supports an innovative and creative strategy in contrast to Sculley who placed a high degree of emphasis upon reducing costs and inventory levels at times of economic hardship. Meaning Centred Theories: = Annual Meeting > Mac Team was in the meeting listening to Jobs announce mainly Mac products >» Apple II employees watched on closed circuit TV in another room and virtually nothing was said about Apple II computers or people despite it being the highest performing division = Jobs and the Apple II Division > Jobs was dismissive of the Apple II division despite its performance in bringing in $500m of the $698m in revenue > Jobs referred to Apple II’s marketing staff as member of the “dull and boring product division” > Lack of attention given to Apple > Jobs referred to Apple II’s marketing staff as member of the “dull and boring product division” Metaphor: (1) Machine Metaphor: = Fix and Maintain = Change Agent = Mechanic (2) Developmental Metaphor: = Build and Develop = Change Agent = Coach (3) Transitional Metaphor: = Move and Relocate = Change Agent = Explorer, Guide (4) Transformational Metaphor: = Liberate and Recreate = Change Agent = Visionary, Creator 30 (3) ORGANISATIONAL CULTURE: Organisational Culture: = Apple’s culture changed over time as the company grew and its strategy changed. = Apple classically exhibited an “Unorthodox (Revolutionary) Culture that typified Apple” — going against conventional wisdom. Identification of Organisational Culture: 1) Observable Symbols = Dress Attire: Staff Wear Jeans and Sneakers, Jobs Abandoned his Business Suit in Favour of a More Casual Look = Logo - Isaac Newton Lost in Thought Under an Apple Tree (Reminiscent of Underground Press) (1976); Multicolored Apple with a Bite (Byte) Taken Out of It Developed by the Regis McKenna Agency (1977) = Leadership - Steve Jobs, Steve Wozniak, John Sculley, Del Yocam 2) Physical Layout: = Office Environment: Rooms Named after Creative Artists = Organisational Structure — Refer Below 3) Rituals and Ceremonies: 4) Communications: = Office Environment: Classical and Rock Music Played, Rooms Named after Creative Artists = Interaction: Informal, Laid Back, Cocky Attitude, Believe self righteously that their mission is to bring computer literacy to the masses 5) Practices and Behaviours: = Dress Attire: Staff Wear Jeans and Sneakers, Jobs Abandoned his Business Suit in Favour of a More Casual Look = Office Environment: Classical and Rock Music Played = Services: Fruit Juice, Masseur, Indiana Jones Tickets = Personnel Behavior: Lack of attention given to Apple II = Organisational Strategy — Refer Below 6) Stories: = Founding of Apple: Steve Jobs and Steve Wozniak 31 Values, Assumptions, Feelings, Beliefs: Refer Below to Dissatisfaction of Apple II Division Employees Integrationist Theories: Describes the Initial Apple Culture - initially, the culture appears to be organization wide on the surface. Culture in Apple is part of a deliberate strategy by Steve Jobs. Strong Culture > “Emphasized individual achievement, entrepreneurialism, and commitment or...devotion to the company. » Strong Culture of Fun and Youth. > Unifying Culture Benefits organizational performance because it perhaps helps the employees be more creative in their jobs. If they are happy and relaxed, they will be committed to the team. Differentiationist Theories: Describes the Apple Vs Mac Situation. As Apple gets bigger, it appears that the divisions begin to develop their own individual sub-cultures. Apple II - Corporate in Nature, “Dull and boring” — felt undervalued and disparaged by Jobs Mac - Unorthodox Culture, Young, Hip, Cool, Exciting Jobs — Innovation, Creativity Sculley - How quickly can we bring down inventories and control expenses Critical Theories: Apple’s culture can be seen as a subtle form of managerial control in that when the Apple II division headed by Del became increasing corporate in nature. Jobs refers to Apple II as the “dull and boring product division” and subsequently is dismissive of them. Apple II’s resistance to conform to Jobs’ ideal culture is treated with lack of attention. By not being part of the idealistic Apple culture, Jobs felt he lost control of them and hence punishes them. Therefore, it can be seen that this culture is really only used to control employees and conform them to the personal beliefs and values espoused by Jobs. Hence there are high informal sanctions for not conforming to a strong culture. Effects of Conflicting Culture: High Turnover Reduction Motivation Amongst Apple Employees Created Identity Detracted from Commitment Increased Costs 32 Time: 1970s (Steve Jobs) Environment = Initial IBM Marketplace Dominance = Lack of Competition = Industry Barely Exists at this Point in Time Theories of Organisational Strategy = Miles and Snow - Prospector = Porter - Cost Leader; Differentiation; Niche = Work Occurred at the Jobs Family Home. Partners bought, installed and delivered components to the retailer. Partners paid suppliers, obtained credit, secured cheap parts, organized advertising and negotiated sales. Friends assembled the product. The Mike Markkula Investment Business Plan in 1977 saw the expansion of the business under which it established the following strategy. Go It Alone Strategy High Margins to Distributors Innovative Products Low Costs Quality Control VVVVVV Theories of Strategic Change: = Planned Approach - Gap Analysis Mid 1980s (Steve Jobs) Environment = Competition Theories of Organisational Strategy = Miles and Snow — Prospector = Porter - Cost Leader; Differentiation = Apple (1984) Sculley’s Strategy » Technology Driven Product Orientated Strategy - Unique and Different Product (E.g. Apple II, Lisa, Macintosh) >» Coherent Product Strategy but also Consideration of a Strategy which encompassed the Reduction of Costs and Overhead; therefore - Split Apple into Two Product Divisions (1) Apple II Division (2) Mac Division >» BUT STILL Required Coherent Business Sector Strategy, Strategic Alliances with Other Manufacturers and Software Houses and a New Advertising Strategy = Apple (1985) > Strategy Conflict - Jobs - Go It Alone Strategy, How fast can we build 35 - Sculley — How quickly can we bring down inventories and control expenses (due to the recession) » Reduce Inventories and Control Expenses Strategy - Split Apple into Two Functional Groups from previously Decentralized Divisions (1) Product Development and Manufacturing (2) Marketing and Sales - Almost half of the 15 senior management team was replaced or left - Reduced the workforce from 5300 to 4600 Workers - Closed Three of Six Factories - Reduced the Workforce by 6000 Workers > Objectives of Restructuring - Produce single coherent strategy - Reduce duplication and ensure lower break even point - Merging of the product divisions would end the rivalry between Mac and Apple = Apple (1989) > Control Expenses Strategy - — Major Cuts - Salary Freezes - Layoffs - Phase Out Company Cars - Modifications to Profit Sharing Plan - Reduce Spending Levels Theories of Strategic Change: = Planned Approach - Gap Analysis and Evolutionary/Emergent Approach - Adaptive Mid-Late 1980s (John Sculley. Environment = Competition Heats Up. = Low Prices and Clones Vs IBM. = Market Segmentation Theories of Organisational Strategy = Miles and Snow — Analyzer = Porter - Cost Leader; Differentiation = Overall the company is an analyzer, prospecting with the Mac and trying to defend the Apple. Also the company is differentiating on the basis of user-friendliness, technology (graphics in the case of the Mac), and not being IBM. Pressure for cost control (will never be a cost leader — that is the aim of the clones) and better technological updating to differentiate MAC and bring it to market, while extending the life of the Apple. = Joint Venture Strategy (1991) > > > > Technology Sharing Alliance between Apple and IBM Share Proprietary Technology and Future Product Plans Cross Licensing of Current Technologies, Joint Development of Operating System, Joint Ventures to Develop Technology and Products for Emerging Areas Can’t Do It Alone 36 Theories of Strategic Change: = Planned Approach - Gap Analysis and Evolutionary/Emergent Approach - Adaptive 2000+ (Steve Jobs Environment = Competition (New Market Opened Up as a Result of the iPod) Theories of Organisational Strategy = Miles and Snow — Prospector = Porter - Differentiation Theories of Strategic Change: = Planned Approach - Gap Analysis and Evolutionary/Emergent Approach - Adaptive (6) ORGANISATIONAL STRUCT! * Time: 1970s (Steve Jobs) Environment = Initial IBM Marketplace Dominance = Lack of Competition = Industry Barely Exists at this Point in Time Traditional Organisational Structure = Simple Structure = Small Organisation = Process - Partners bought, installed and delivered components to the retailer. Partners paid suppliers, obtained credit, secured cheap parts, organized advertising and negotiated sales. Friends assembled the product. The Mike Markkula Investment Business Plan in 1977 saw the expansion of the business under which it utilized Independent Distribution Channels and External Suppliers. Division of Labour = Vertically: Flat Hierarchy, Decentralized = Horizontally: Departments and Divisions Non-Existent = As Above Coordination of Labour = As Above Early 1980s (Steve Jobs) Environment 37 Solaris/Supernova Theory: Change ~ Organizational Change Type of change — Can be in the middle of both Revolutionary (acquisitions. New relationships and management system, from hierarchical management to more flat structure Changes in strategy, taking different customers Shifts in power — CEOs change Technology shifts “new information tech have exploited the “old” tech of the telephone to shape customer interface in innovative new ways” Evolutionary (after acquisition Culture — introduce fun culture into SuperNova Change of structure — from top-down to more SMTs, different responsibilities Adapting into the new way of taking phone calls, improvise around set phrases Technology shifts Planned (is it unwelcomed? Situations in which organizations have adequate time to anticipate and formulate a response to the drivers of change — SuperNova adapting? Or Solaris? Therefore it is Systemic Change, after careful consultation of senior management, disruption to systemic system. Later on becomes Adaptive Change, does not affect the whole Organization, easy to manage Causes of Change —Forces Initiating Change — Org want to impose its ways Taking over of Supernova (Acquisition) Culture clash New Environment Structural Differences - Management New technology — less use of set phrases, more individuality New strategy — customer focus, more individuality Reduction in Layers of management — changes in task/responsibilities, trainings to keep employee interested Action of management and/or change agent Change agents are those in power who want to implement change, and those who want either to teplace or to constrain those in power (managers, consultants, past managers) - The right knowledge (know the business well) - The Right skills (skilled in managing change) - The Right Attitudes (comfortable in delivering uncomfortable messages) Possible people - CEO James Carr (need to be closely identified with the change, hard to build political support if consultant who lacks long-term commitment to the org) - General Staff - HR team leader Kimberly Bell, Finance, Marketing, Project Managers 40 - Consultants/facilitators (provide expertise, experience in the field, hence bring to the company perspectives that are better informed than those inside the company) — may lack legitimacy in the eyes of internal stakeholders Development of a change plan/Intervention strategy Structure - New organisational chart - Authorities/responsibilities - Trainings for staffs to fit so does not fall back to former state Technology - Monitoring and measuring performance - Prescribed forms of speech - 150 calls per day - Improvisation and discretion on part of the agents, not following script - More complex calls, relationship between customer and agent - More individualistic in Super and more team work in Solaris - 30-50 calls a day Culture and Behaviour - Less punitive in Solaris - More fun and games - More team work (high pressure = turn on each as performance pressures intensified) - Higher staff turnover resulted in constant arrival of new members who did not fit, lack of training -> reduced team producstivity Implementation of the change plan 3-step process - unlearning the old ways - learning the new - incorporate the new way as part of established practice Ensuring does not revert - reward allocation system — don’t fall short of expectation - support of a sponsor — managers be seen to support the change - - transmitting information — expectations be known - Cultural change and group forces — see others do so -> more comfortable - Commitment — more participation — greater acceptance — will to succeed - Diffusion - more units affects, greater legitimacy May affect more than areas implemented Unfieeze — change — (refreeze) —in this case yes, incorporate into new environment Implementation tactics - Intervention — change agent selling change rationale to those affected - Participation - change agents delegate the implementation decision to those affected, design let someone else do it - Persuasion — abdicating the decision to experts or interested internal staff, change agent active after ideas are presented 41 - Edict — top management makes key decisions and uses authority to implement Managing unplanned change - Centralisation of management — CEO makes decisions, no time to pass on proposals - Establishment of special taskforces — focuses on the organization’s responses to the situation, composed of managers sufficiently senior and expertise in the nature of the problem - Active management of the environment — keep close touch with critical constituencies - Management of resources —- management develop a response to resource usage to minimise impact and maximise chances of survival - Need for active leadership — CEO being active and high-profile presence to all concerned 6 Silent Killers in managing change SK 1 — Management style is too top down SK 2 - Unclear Strategy/conflicting priorities SK 3 — Ineffective Senior Management SK 4- Poor vertical communication — between levels SK 5 — Poor coordination across functions SK 6 — Inadequate Down-the-Line Leadership Something exists and should get rid of from change Theory: Communication FUNCTIONAL THEORIES APPROACH 1) Functions of Comm. i) Relationship > interpersonal 1/s between employees — sense of belonging in Solaris. Solaris has a nominally flat org structure — team leaders and workers interact w each other plus its decentralized structure encourage e/ees to for “SMTs and empower them?”. Relationship and comm. w org goals matches w Solaris having the lowert e/ee turnover and best employer. Also, company “Fun Day” and sing song brings e/ees tgt where they will participate tgt. (Eg: Kris will bring Tom and sway to the songs. Shows that they relate to the org and their compatibility is high. ii) Change ~ altering the existing procedures, adapting to new env/rules. This is needed when the takeover of Supernova occurs. The 2 very diff cultures of Solaris and Supernova require efficient comm. to comm. change in order to integrate 2 companies tet. iii) Organizing > establish rules and regs for a new env. The joined culture of the companies requires a new manual in which maps out the directions, guidance and culture of the new company to direct org goals. 2) Networks i) Formal > authority at the higher level communicate/organizes the roles & responsibilities. For eg: team leaders of the mgmt team will comm. w e/ees. As for Supernova, team leaders report to supervisors, who then report to project managers, 42 How does communication shape power and influence? Communication between supervisors and employees will lessen our dependency on the power abuser and will seek other alternatives. Eg: Each leader in self-managed teams has authority to monitor and discipline their fellow team members. Team members are expected to contribute in discussions and decision making and they will have vital firsthand information about progress of work. Both are dependent on each other. Each leader is influential. Kris How does communication shape culture and socialization? Organizations culture describes how organizations do things and how they talk about how they do things. Communication rules are general prescription about appropriate communication behaviours in particular settings. Management uses communication to shape a fun working environment, a relaxed working culture. Eg: Words like “creative”, “dynamic”, “motivated” and “attitude” are heard among team members. The ‘Solaris Way’ is captured by a slogan: “Excitement, Attitude, Achievement”. Sing Song “I’m Walking On Sunshine”. It is to create a sense of childish fun among employees. The word “family” is frequently used because it conveys a message of security, belongingness and warmth (Tactical rule). Socialization is an active organizational attempt to help members learn appropriate behavior, norms, and values in everyday working environment. Eg: Anticipatory socialization: Agents are hired for both their formal skills and more importantly, their personal attitude and outlook of life. Encounter Socialization: This involves new employee training and supervisor coaching. Training is given for new agents which consists of prominent cultural rituals that seek to socialize and inform them about the “way things are done around here”. What metaphor is bring used and what are its effects? Developmental metaphor Theory 3: Power ~ Organizational Power and Politics 45 Power — a capacity to influence outcomes Politics — the exercise of power Unitary Theories - Top down power grid - Rational behaviour - Focuses on effective communication Pluralist Theories - Different people possess different kinds of power (e.g. expertise power) that the authority doesn’t necessarily have Solaris 1* dimension of power — Rewards — resources Carr engages in some unorthodox management practices in order to motivate employees and create a customer-friendly environment - authority power (able to tell employees what to do) - Reward power - Referent Power (employees identify with Carr) - “each team has a leader who is invested with the authority to monitor and discipline their fellow team members” 24 dimension of power — Kimberly Bell - Access to decision making process — how to make the environment fun - authority power (able to disregard people who doesn’t comply with the culture) - Recruitment process, people who doesn’t comply with the culture is sidelined: “agents tecruited more importantly for their personal attitude and outlook on life 3" dimension of power - changing the meaning of the work - Kimberly - ‘Excitement, Attitude, Achievement’ slogan printed everywhere - ‘Fun Day’ activities - Casual dressings - Trainings and cultural rituals that seek to socialize and inform them about ‘the way things are done around here’ - Group Power SuperNova 1% — Reward Power (mobilization of resources) — detailed measurements, telling that you need to comply with the rules “Measuring tools lead to dismissals if agents were not performing well enough", confrontation, fairly obvious 24 _ Controlling Process - “every call was subject to a series of detailed measurements that had to correspond to the specifications laid down in the contracts with each of its customers” — sideline people who does not comply Authority power + Reward Power Group pressure, league table, team performance 3" — not much used 46 Critical Theory 3" dimension = hidden use of power Communication + culture can be political Need all 3 to be empowered (e.g. doesn’t work well for SuperNova, because no 3" dimension) Power necessary to change organizations Individuals treated better when aware of 34 More comprehensive explanations: First dimension of power ¢ Management has controlled certain resources to derive power o E.g: Kimberly Bell, Team leader of the HR department uses information power from books stacked in her office bookshelf to give her ideas on making her employees work with more fun and excitement ¢ Reward power — To make work more fun and exciting, the management of Solaris has encouraged that Employees reward each other with gifts like : wines and phones to represent tangible ways to reward employees. * Because Pauly is dependent on Solaris for a Job, Solaris can exert power over him. ¢ Equipment support o Walls painted purple, vivid pink pillars o Carpets are fluorescent yellow o These are all things that further support the managements influence over its employees behaviour © Group Support o It can be seen that some of the employees have taken the behaviour and culture of Solaris very seriously to the extent that they support it and tries to motivate others. E.g: KRIS. Second Dimension to Power © To get the employees to behave in the manner they want and to embrace the culture, solaris has devised some methods which involved non-decision making amongst its employees. ¢ The employees’ resistance to Solaris’s fun culture is sidelined by culture programs like the Sing, SONG time. E.g: Tom has stated that he has no choice but to go along with KRIS when they sing the song and can’t do anything about it because of Kris’s over-enthusiasm. © The hiring process by Solaris would get/force the future employees to agree to follow the culture of Solaris. For example, Pauly says that they wanted him to say its all about the people and its all about the attitude so he was forced to agree to those philosophies before being able to join. THIS affects their ability to resist the culture in the future. ¢ Training programs during the employee recruitment consists of prominent rituals to socialise and inform them of how things are done at Solaris. This process sidelines the resistance to Solaris’s culture and the unorthodox measures on how they do things. This dimension to Power 47 The structure will be low in formalisation and have decentralised control “The decentralized company structure aims to empower workers with autonomy and cut bureaucratic red tape”. Miles & Snow — SuperNova - Defenders Organisations whose strategy is to produce a limited set of products directed at a narrow segment of the total potential market ...Sttive aggressively to prevent competitors from taking market share or customers “This quantitative assessment of output had been seen to be an important factor in successfully winning contracts in this highly competitive business” ...Intensive planning oriented towards cost and other efficiency issues “Every call was subject to a series of detailed measurements” “Phone calls were monitored to assess formal adherence to predetermined scripts...as well as quality of interaction” “Competes primarily on the basis of costs” ... defenders tend to ignore developments “Works in a more traditional call centre environment” ...a structure made up of high horizontal differentiation with highly specialised tasks, centralised control and decision making “Specialized in more routine operations” “Worked in a more hierarchical structure” Automaker — didn’t unfreeze and freeze properly, went back to 2 by 4 SK 2 - Hada conflicting strategy in change, quality, but measuring performance by quantity — during changing process + Teams Forming — team contract, left details, competition (points) Storming — Contract (determining goals), brainstorming, no conflicts involved though Norming — Contract, deciding the schedule, coming together with points Performing — Writing it out, constant meeting More detailled explanation: Porter’s competitive strategies ¢ Solaris offers more value as a call centre because it has a differentiated culture that is fun and exciting, which produces enthusiastic employees to provide for better customer service. This can promote higher customer satisfaction. The unique culture will allow the employees to develop a sense of responsibility towards their clients, hence delivering more value. ¢ — Solaris’s fun culture can reduce staff turnover because it encourages them to be themselves and to stay longer at Solaris. Low staff turnover will mean more solaris will operate with more cost efficiency. 50 Supernova on the other hand, is stuck in the middle because it does not have any competitive strategies to give it a competitive edge. Although it does seek to cut costs bu imposing rigid work cultures and criterias, it has failed to communicate Supemova’s main goals to the employees. This is why it is not uncommon for all the teams to fail the management’ standard of performance. It also doesn’t aim at integrating the staffs at supernova because it has implemented the league table which encourages staffs turning on each other. The stress caused by this will encourage higher staff turnover. Porter’s competitive forces Solaris is able to achieve a higher profitability as compared to supernova because it has managed to fend o competitive rival call centre firms. By adopting such an unorthodox method, other call centres will find it difficult to compete. This gives solaris a competitive advantage compared to its rivals. Supernova faces a risk of achieving low profitability because it faces intense rivalry and threats of new call centre entrants. This is because Supernova is nothing more than a conventional call centre which doesn’t offer any uniqueness as a call centre and its services. Strategic type Solaris is an analyser because it defends its core operations as a call centre but it also constantly finds new opportunities to motivate staffs and boost morale. Although these methods are unconventional, it seems to work on its employees. Supernova seems to be a defender in this case because it aims to protect its market share by putting heavy importance on performance measuring through CHTs and rigid work criterias. Despite these attempts , it was still common for all teams to fail the required standards expected of Supemova’s management. This is because Supernova does exhibit traits of being a reactor as well. Supernova only wants its employees to make more call volume but it does not tell them how to achieve these goals. More effective strategies for Solaris and Supernova Solaris can further improve their strategies by focusing their efforts and resources toward a more niche market. Because it has such a young, fun and exciting culture embedded, they should perhaps venture into tackling markets which appear more appealing to the younger generation. For example, do advertisements for sporting goods, rock concerts etc. By narrowing their market segment, it will be easier for them to develop effective measures for tackling that particular market because they know it so well. Supernova Should offer lower prices or in other words, derive cost leadership by reducing the staff turnover at its offices. One way it can do that is by abolishing the the oppressive work culture it currently has so reduce staff stress and encourage staff retention. This way, it can avoid rehiring new staffs which costs money. Besides that, it should differentiate its services to that it delivers more value to its call clients. One way it can do that is by using catchy opening lines to their dialogue. This will make Supernova’s services to catch client’s attention and make them more memorable. Supernova should also consider targeting more narrow market segments so that they can easily trace profits and coordinate between staffs and departments. 51 Structure at Solaris Solaris maintains a matrix departmentation structure because its employees maintain as members of a functional department but report to a project manager Within HR ,there are a number of project managers who liaise with Finance in relation to contracts. They also liaise with team members to find out service provisions in each team. Project managers oversee particular customers and teams are organized according to large groups based on a particular project. The structure is ideal for solaris to achieve its strategie sfor deifferentiation and cost leadership because: co. The separation of departments into HR, IT and Finance allows each departments to specialise in what they do. Specialisation involves employees learning to become more efficient in how they do things. This reduces the costs incurred and lead to cost leadership bu Solaris. Also, communication witth the departments will be made easier because everyone speaks the same language. o Because the teams are organised based on a particular project, coordination within that team is made easier because there are less barriers to communication . teams that work on a particular project can also develop effective responses to the needs of customers. Employees may be able to detect new market or product opportunities quicker because they know the customer better- enabling differentiation of services offered by Solaris. 7S framework for a more effective structure at sol Strategy Aims at cutting costs by introducing rigid criterias and oppressive work cultures. However, it has failed to communicate the organisation’s goals and hence all the employees sometimes fail to meet the required standard of performance expected by the management. The management of Supernova should lay out clear organisation goas to employees so that the employees can work towards them in a more effective manner. Perhaps they should implement proper training for staffs to communicate and clear up any misunderstandings that are present and to tell them what is expected of them. Structure Seems to have too many layers of middle management. This is not good because the more vertical layers an organisation has, the harder it is to carry out effective and efficient communication and cooperation within the organisation. The management of Supernova should actually contemplate removing these additional layers of middle management and have a similiar structure to that of Solaris. Superordinate goals Becasue the management encourages inter-staff conflict by introducing the league table, staffs are discouraged from collborating with one another, impeding the ability of Supernova to achieve superordinate goals. Managment of Supernova should get rid of the league table and instead, 52 — One manager at Automakers remarked ‘we do not like to see the other shift qun as well as we do.’ — Some workers found that it fostered ‘good, clean competition’ and that was part of the fun of working at T-Plant. — This encouraged people to work harder- however, it could get out of hand: “+ Workers resorted to counting back on the line to get a better count “+ The foreman would lock up tools so that the people on the next shift could not locate them. * Lockers were broken into 2. ‘Empire building’ (= lack of cooperation between functions) — Functional loyalty strong in every level of the organisation — The manager would turn the speed up on the line so that the team could produce more units than the other shift — The foreman from the other shift would sneak in early to make sure that the previous shift was not going overtime — Pressure to deliver maximal output e¢ LYING, CHEATING AND STEALING AT AUTOMAKERS o CAUSES: Management style and competitiveness Result of individuals’ fear of being exposed, humiliated and being defensive- adopting a ‘covering ass’ mentality o EVIDENCE OF LYING, CHEATING AND STEALING: Excuses- this results in problems not being solved Failure to take responsibility for product defects Rushing faulty products out the door to obtain numbers Lack of trust Concealing parts Hiding personnel Falsifying reports concerning injuries, defects and manpower o MANAGERS’ ATTITUDES: Some find that lying, cheating and stealing is necessary to get the job done- it is part of the fun of the T-Plant culture ¢ CULTURE CHANGE o REASONS WHY QWL CONSULTANTS FELT CULTURE CHANGE WAS NECESSARY No rewards Success determined by ability to be aggressive and competitive- not on productivity Those who asked questions, voiced problems and accepted blame not rewarded 55 o WHAT WAS THE CHANGE? = Multi-level committee structure to change management style Level 1 Managers -MANAGEMENT COMMITTEE: comprised of all 10 managers. Level 1 Managers required to delegate authority down the line. Level 2 Managers- SUPERVISORS: 8 superintendents and 4 reps of their direct subordinates. Level 2 managers required to carry out a socio- technical analysis of the production process to determine where problems arose and find ways of fixing them. Level 3 Committees- 8 committees involving the foremen and members of different. Level 3 committees expected to resolve multi-functional problems where possible and pass them up to Level 2 managers to follow on = OBJECTIVE OF CHANGE- increase participation at all levels of management by bringing them together in regular, frequent meetings. = PROBLEMS ENCOUNTERED BY CHANGE Level 1 managers, having been coerced to abandon their previous jungle- fighter management style, felt impotent and ineffective, quality and quantity were suffering. Level 2 managers, having been granted more authority, felt frightened and lost. Level 3 managers hardly aware of the change effort for reasons including the lack of rewards for changed behaviour. = EVENTUAL SUCCESS One manager comprehended what the consultants were trying to achieve. He identified skills necessary for his subordinates to change their behaviour, was able to act as the bridge between consultants and other managers. He was able to teach these skills to other managers. Another manager, who previous proliferated the 2 * 4 style, become critical of it; ‘Jt makes a lot of sense to me that we should all treat people with respect. Why should people be afraid to come to work? Why should they be afraid to lose their jobs? Why should they live in fear all the time?’ Both of these managers helped to change beliefs about what constitutes a ‘good’ manager- a good manager is ‘democratic and participative’ New budget devised which allocated money towards managers learning the new system. Bonuses, based on measures of quality, introduced for managers... ..ete, etc 56 ORGANISATIONAL CHANGE e Nature of change at Automakers > Revolutionary planned ge (big. fast. ° With a view to transform the entire organisation from a highly centralized organisation to a more participative one with cooperation instead of competition, new structures and management systems had to be created. Level 1 suddenly abdicated leaving conditions chaotic and level 2 vulnerable with information gaps. It was both a cultural and structural change. There was a deliberate introduction of new values and behaviours (eg. What a good leader should be and consultants felt that the culture had to be fundamentally changed — did not reward for good behaviours and success determined by competitiveness) with a conscious decision to adopt a new structure to address an emergent situation. (their behaviour was out of sync with the larger society) It is the result of a significant environmental change- a drop in sales and profits It has resulted in shifts in power- Level 1 managers relinquished a portion of their power to the Level 2 Supervisors following the change. It has resulted ina NEW ORGANISATIONAL STRUCTURE- there is now a multi-level committee structure Employees must now relate to each other in different ways- a less aggressive environment now exists New management styles e Difficulties of implementing organisational change > Asa general rule, managers of organisations try to avoid change due to the disruption and costs incurred as a result and the threat imposed to their control and privilege. The managers at Automakers felt impotent and ineffective and conditions on the shopfloor were seen as chaotic, and quality and quantity were suffering. > Managers didn’t do the right thing co The change was seen as erratic because some managers became participatory whilst others had not and were left with feelings of impotence and ineffectiveness due to the sudden abandonment of their jungle-fighter management style. There was a lack of consistency among managers with regard to the change process. o Managers were supposed to bridge departments together but they lacked motivation, skills, resources and time to carry out the multi-disciplinary interactions now demanded of them. > The change occurred too fast: in order for changes to be effective, it must be a gradual process. The pullback of level 1 happened too fast and although it level 2 managers with more autonomy, they were left feeling frightened and lost with the lack of 57 ¢ This perspective entails constructivism, together we construct meaning, and sense making, through organisational communication we make sense of what we experience. Organisational communication becomes a process of organising, decision making, influence and eventually culture. e¢ At Automakers, improving communication through this perspective can be through ensuring the best climate possible given the circumstances for information to be transmitted in the most certain and understandable way for behaviours to be carried out. This will help to build the culture since communication is constitutive of culture. ¢ Communication as influence is necessary for change. In Automakers, people identified with a credible manager who had been loyal to the company. His subordinates were able to make sense of the change process due to the way he communicated it to them. ORGANISATIONAL CULTURE 4. NATURE OF CULTURE AT AUTOMAKERS > The dominant culture at Automakers, that is, the overriding core values shared by the majority of the organisation’s members, can be measured according to 10 hat reveal the visible features of an organisation’s culture: Individual initiative- The ‘covering ass’ mentality that has developed has resulted in individuals failing to take responsibility for their actions. For example, faulty products are transported from one department to another in an effort to outperform the other shift. Moreover, any realised maintenance issue is not tended to because if an individual attempts to fix it, it would become his/her responsibility. Risk tolerance- Due to the inherent competitive nature at Automakers, risk tolerance is high; aggression is encouraged and even glorified. For example, one who hits someone over the head with 2 by 4 inch sized wood is glorified as a ‘folk hero’ by fellow employees. Direction- The mentality that ‘if you do not get the numbers, you get nothing’ indicates that there is a strong focus on results at Automakers. Whether the means for obtaining the desired quantity of output is unethical or corrupt is irrelevant; the goal of outperforming the other shift is paramount and is clearly pronounced and reiterated by leaders. There is no emphasis placed on quality as management has set no quality targets. Integration-Due to the rivalry between shifts (‘shiftitus’), integration is low as employees doing a particular shift have an incentive to act in a way that jeopardises the relative performance of employees in the subsequent shift. For example, the foreman will lock up his tools so that people on the next shift will not get them. This decreases overall productivity. Management _support- In one sense, the ‘straightforward approach’ adopted by management at Automakers means that communication with subordinates is direct. The employees find this management style appealing. Consequently, the employees are made characteristi 60 well aware of what is expected of them. The feedback given by the managers is counterproductive because the criticisms are not constructive, rather, they are demeaning. 6. Control- The lack of entrenched rules and regulations causes the employees to ignore defects because there is a tacit acceptance of rule-breaking including hiding personnel. This acceptance extends to management. 7. Identity- The sense of organisational identity is arguably diminished by the competitiveness between shifts. This rivalry causes employees to identify with their particular work group rather than the entire organisation. 8. Reward system- management at Automakers does not reward employees based on their performance. Rather, they are criticised if they underperform. This was one of the main reasons for cultural reform. 9. Conflict tolerance- Conflict tolerance at this organisation is high. Verbal abuse and dramatic confrontations are behavioural norms. Furthermore, the ‘monster’? managers adopt a macho attitude and are recurrently criticising the performance of their subordinates. 10. Communication patterns- the flow of communication is downwards as no feedback from employees to their superiors is permitted. > Evidently, the culture at Automakers is authoritative, aggressive, cut-throat and dishonest. The 2*4 management creates a culture of humiliation as employees are affronted by verbal abuse and this public humiliation is glorified. TERMINAL AND INSTRUMENTAL VALUES e Before the change: o Terminal values lay in the emphasis on results and instrumental values became competition and comparisons between the two shifts — they were compared to encourage people to work harder to achieve results. It was dominated by aggression and cheating behaviours to obtain their terminal values. e After the change: o Terminal values still lay in results but there was also emphasis on product quality not just quantity. It wanted to find ways to cut costs and improve quality but the initial management style did not allow this to occur as reward system was inadequate. o Instrumental values now included participative decision making as well as a relaxation of the hierarchy — it put emphasis on cooperation and team facilitation 61 and support. This way quality can be sustained with appropriate rewards and resources as everyone is accountable to their performance and participated in the decisions. THREE VIEWS OF CULTURE 1. Integrationist: ¢ From an integrationist perspective, it can be argued that the culture in Automakers is deliberate because the management style was displayed as appealing — fun, clean competitive and necessary to get the job done. ¢ There is top down control by the leaders and they engineer the culture through leadership, social norms, and punishments. ¢ People are socialized into the culture through practices where people learn about the explicit norms that govern behaviour.(there is unified perspective which everyone accepts) e Evidence: > Astrong culture: “2x4” management, competitiveness, lying, cheating, stealing Rituals — practices — cheating, stealing Observable — the use of language and masculine macho-ness — screaming, yelling. Jargon known to employees only “covering ass” “shiftitus” “shipping shit” Vv Vv wv Extreme examples of this behaviour had become myths in the organization and perpetrators were spoken of as folk heroes “T prefer the straightforward approach” “T do not think people listen to you if you are a nice guy” “It embodied high expectations of performance, punished failure and rewarded competition” “macho style specific to the factory” — distinct strong culture VV Vv Vv 2. Differentiation: e Different employees have different reaction to the culture. There were subcultures — empire building and functional loyalty is seen. There was competition between the shifts due to 62 Changing meaning: ensure legitimacy of change outcomes — conscious strategy to defeat resistance ¢ Change organisational view of definition of good manager o One manager who had credibility and was loyal to organisation changed people’s beliefs about what is a good manager — from macho/aggressive managerial style to a more democrative participative style. o The manager who people admired changed everyone’s perspective of the change when he believed the change had merits. People eventually followed him, accepted the change and did not resist. 4" dimension — System power ¢ This dimension of power is invisible and yet limits resistance. It is able to achieve disciplinary power eg. Internet usage being monitored, security cameras and swipes STRATEGY ¢ Under the Miles and Snow framework, Automakers can be seen as implementing a defender strategy — they are not being innovative and they are trying to produce a limited set of products directed at a narrow segment of total potential market. It is low risk because you are defending want you know, but this requires a stable environment. It is aggressive in protecting its company share. It is producing two more models in order to stabilize its falling market share — it is trying to improve productivity and quality. e Alternatively under the Porter framework, Automakers can be seen as having a cost focus strategy, in that it is aiming at a cost advantage. Evidence of its ability to do this is due to its tight controls (high pressure costs targets that factories were obliged to meet), high formalization, centralization and complexity. It is trying to reduce costs and improve productivity and quality. STRUCTURE (the division and coordination of labour) e T- plant was functionally organized with specific functional departments — industrial relations, quality, operations, manufacturing and engineering. Employees with closely related skills and responsibilities are assigned to departments. ¢ There were both vertical and horizontal divisions of labour prevalent. oO. The vertical division of labour meant that those in higher levels of management such as the Plant Manager had a higher levels of autonomy and control. It also meant that vertical communication was much more difficult. 0 The horizontal division of labour is evident as the T-Plant is divided into 6 functional departments. The division of different departments (Industrial Relations, Operations, etc) is an example of differentiation. 65 There is high complexity in the structure of the organization because both the vertical and horizontal levels have been highly divided. Persistent rivalry between departments is an example of a structural problem. Evidence of centralization- decisions were made at the top, rather than dispersed down the hierarchy. When the new change was implemented, it became more decentralized because due to the multi-level committee structure, some members were given decision making powers that were not previously available to them. Ie. level 2 and 3. The decision making power is no longer localized purely at the top of the organization to management committee. It is formalized because the work roles are highly defined and management does not appear to tolerate much variability from the work roles so long as output targets are met. Forms of control: Previously there was less room for autonomy and direct supervision in the product lines. This standardization of work processes gave little room for work to go wrong as the tasks were repetitive and easy to do. With the change, there wa: ignificant reduction in hierarchal structure and hence, autonomy increased. Evidence is seen in the change initially having little impact on costs or quality. This failure was attributed to lack of performance control as supervisors were becoming too slack in the new participative approach. 66 SANRIZZ Communication ~ The functional theories The massage’s function Organizing: In terms of Sanrizz Ltd, it is a family company which does not have a formal clear rule or policies to show the responsibilities. So they were always conflicts about the rules in the process of communications. For example, the plan of expanding their business, three brothers did not get the correct massages to do business. They have different opinions about the financial costs and expansion plan. Relationships: As we known, the company of Sanrizz has a family relationship. Tony plays an important role of decision making, and it seems a “big brother” in the company and he thinks that he has to look after his brothers. Hence it influenced their roles and assesses the compatibility of company’s goal. Change: It does not have an open system for problem solving. Tony was hardly to hear others suggestions. When the conflicts were occurred among them, it did not have a problem solving. And the feedback from the staff is also not fully reflected to the brothers. The networks The Sanrizz uses informal networks, as they are brothers and they always communicated in the private places. They did not have some regular committees in the process of communication. The channels The Sanrizz uses the channel of face-to-face, which means that richness is high. However they did not get the efficient messages during the processes. Direction Horizontal direction is crucial among three brothers, they communicated with each others. And the same time, it also had downward direction towards to their subordinates or employees in the solon. It is a negative effect to work performance of staff, as well as employees had grapevine or gossip to influence their efficiency. Load Tony is a big boss in running business of solons regardless of some negative reflections from other brothers and the environment. He always makes the decision of the company, and everyone engage in routine. This is an underload messages. ~ Meaning-Centred Theories Communication in organizations creates shared understandings and meanings, which is crucial to make sense of our performance in terms of communication, as the shared meanings could shape people’s experiences. In Sanrizz, three brothers invented Gerry as an expert or agent to help them to fix the communication problems. Gerry seems a “metaphor” in this case. Firstly, Gerry communicated with three brothers individually, and then he found the problem in the process of communication. It called “the machine metaphor”. Secondly, if three brothers want to expand their business, they have to build and develop their 67 the business and are thus only able to contribute their own expertise. This calls for conflict as difficulties arise concerning various methods required to tie in all these areas in a way that creates a merged, shared culture while still retaining its existing individual elements. Integrationist theory Integrationist theory in culture is exhibited through a sense of widely shared understandings, organisational wide consensus and with all members having a clear and combined view on what needs to be accomplished and the actions that must be undertaken to achieve it. Features of homogeneity, harmony and togetherness are what drive the members to succeed. This evidently does not exist within the Sanrizz brothers in the beginning, represented in their inability to work as a team and make their dreams into a reality. What one brother wants, the other wants something different. It is especially shown in Ricci’s character, who strongly believes that in order for the big bang to happen, conflict must be what leads to it. Where Tony and Ozzie crave cooperation from Ricci, they are instead held back by him. Although there is a sort of top down control of culture resonating from Tony, it is often met with resistance from the others who frequently disagree with his way of thinking. Personal values of each brother appear to not be shared by others as well. Ozzie feels exploited and unappreciated by Tony, as he is upset that Tony does not give him the recognition that he deserves. Ricci has ideas and suggestions that go unheard, making him feel like he never has a say in business operations. Tony rebuts by claiming that he does the majority of work. Because each brother fails to see the good in others, they are thus unable to create and partake in any sort of positive, shared culture because it is lost among their separate values. Differentiationist theory The differentiationist theory in culture is shown as a cluster of sub-cultures, separate groups where members work together irrespective of the company’s overarching culture. The boundaries between such groups are permeable, with ‘subcultures as islands of clarity in a sea of ambiguity.’ In other words, the interpretations of manifestations are inconsistent. Consensus and precision only occurs and exists within subcultural boundaries, whereas vagueness appears in the intervening space between subcultures. The Sanrizz business appears to embody the elements of differentiationist theory. Each brother specialises in a specific field separate from the others; Tony looks after the managerial/strategic aspects of the business, Ozzie is responsible for the publicity and advertising for the salons and Ricci takes care of the training school. They each manage their respective fields and often have nothing to do with the operations outside of their own. Because they each have their own ways of doing things within their own departments, when it comes to expanding the business together outside of these boundaries, conflict arises as they struggle to pinpoint one specific plan of attack in which is agreed on by all three brothers. These are the horizontal subcultural differences that exist because separate groups within an organisation have their own specific set of functional specialist embodying different core values and additional beliefs unique to members of specific to these groups. Consequentially, it leads to difficulties arising once members of each subculture are required to work together and agree on a single organisational culture that successfully symbolizes the elements pertaining to each group. Critical theory: Concerning the Sanrizz case, it is evident that the purpose of developing an organisational culture in which all three brothers accept and implement is to give direction to the expansion of their hair salons. The critical theory enforces the importance of ‘whistle blowers’ that are needed to give the company’s 70 members direction as well to keep dysfunctional behaviour in check. Under the integrationist theory, a problem that may arise from having the Sanrizz brothers all conform to the same unitary culture is that it oppresses each brother’s freedom to operate in his own way. Under the differentiationist theory, an issue could be that although the different subcultures create diversity in the business, the underlying objective that should be shared by everyone could become lost. Recommendations: Gerry decides to come up with a plan that allows some collaboration between the brothers but also enables them to develop individual salons separately at a different pace of growth. This means that, while they are able to have some freedom as to how they each decide to build their own respective salons, that the underlying mission statement as a whole is shared collectively. Along with the integrationist theory, the differentiationist theory is also combined to effectively tackle the Sanrizz brothers’ complications. Power Power > Capacity to influence behaviour of others ; Politics > exercise of power SANRIZZ: “BEFORE” (WHEN GERRY GOES INTO SANRIZZ AND EXPLORE THE BROTHERS) Time Frame Dimension of Power Being Exercised Examples After meeting with Gerry for the first time + brother’s individual talks and meetings with Gerry First Dimension: Authority Power Tony demonstrates that he has authority power over Ricci and Ozzie as he is the oldest out of the three brothers. Second Dimension: Opinions from others are heard but don’t have the necessary resource to support them as the “leader” makes all the management decisions at the end. Issues were not opened up widely as only Tony takes control that everything that was happening Some of the staff in the salons said that “it usually seems to be Tony’s decision that wins out.” Ricci: “Tony is extremely convincing with all the reasons why it needs to be his way” Third Dimension: Little evidence that meaning has been effectively managed Different perception of what “success” is Different beliefs within the brothers; Tony >big picture out there, in millions of “where you’re going to go in the next couple of years Ozzie > forty thousand in next Salon Ricci > ??? Don’t know where his real sense of direction is 71 Confusion as to whether a “change” is wanted to appear >Ricci’s problem Gerry believes that due to the different versions of what success is, the brothers “can’t run a joint business” like that. SANRIZZ: “AFTER” (WHEN GERRY SUGGEST TO SWITCH SANRIZZ TO A FRANCHISER) Time Frame Dimension of Power Being Exercised Examples After the First Dimension: Authority Power has changed as each brothers agree | Authority Power brother has their own control of their to finance a franchiser of their salon > doesn’t separate need the approval from others. Sanrizz company to Budgets/Equipment Power Brothers are allowed to pull out and market the spend as much as they want in their brand; own franchiser part of the business. agreement has This allows them to “separately go at been made their own speed in developing between the additional outlets” brothers Expert Power The brothers will individually use their own expertise and their own skills to develop the sort of environment they want in their salon, without the consultant and confirmations of others. Hence, they will be able to throw their opinion and create their “ideal” salon Second Dimension: More than one person can make the decision of Sanrizz (not just listening to Tony’s Point of view) Opening up process to new participants, issues ideas and agendas have been acted uponas an agreement has been signed with the brothers Ownership of the company includes the three brothers and that “there is a percentage (10%) that goes into the company” “agreement has been made” between the brothers, which was the starting move to expand Sanrizz and keep it moving forward; Achievements have been made throughout the company as there are unique styles and creativity Third Dimension: Beliefs about the “best’ way of carrying out one’s work; desire changes can be made to appear legitimate, desirable, rational or inevitable Key issues of Sanrizz, including logos, image, rules and regulations were decided by Tony and Ozzie during their meeting at the Savoy hotel with Gerry 72 Porter argues that firms will need to make a strategic choice in order to maintain a competitive advantage. That is, firms must either seek to offer low prices through cost leadership; offer more value through differentiation; or target one particular customer segment through focus. Sanrizz seems to have a rather high degree of product differentiation, they never talk about cutting cost and instead they are aiming for customers who are willing to pay for the best. Moreover, Sanrizz has a rather board scope of business ities. Besides their daily operation in the salon, they are also involved in the hairdressing education sector and selling hair products of their own brand. Using Porter’s theory, we will argue that Sanrizz chooses to maintain. competitive advantages from offering more value through differentiation. Sanrizz’s strategy seems to be successful as its brand is well known by the public and has good potential for expansion. Q2 Explanation on the application of Miles and Snow’s theories to the case study to identify the organization’ s strategy and why it was successful or unsuccessful: (What type? Defender, analyzer or prospector?) Miles and Snow’s strategic typologies classify organizations based on the rate at which they change their markets and product lines. Miles and Snows argue that all companies are facing a fundamental trade-off by either engaging in exploration: exploring new competitive opportunities through innovative behaviour and assessing new product lines, or exploitation: making the most of the current capabilities and seeking cash-flow from existing line of products. From the ‘branchising’ plan of Sanrizz, we will argue that Sanrizz is more a defender. Their plan is to maximize current capabilities by gaining more market share in its sector (building 20 salons in 3 years) instead of creating new product lines, or to jump into some sort of activities they are not currently involved in. Q.3 Explanation on whether the planned strategy is successful and was the emergent strategy: Before Gerry happens, the planned strategy wasn’t successful. The brothers argue too much and slowed down the growth of Sanrizz. We could argue that hiring Gerry was an emergent strategy implemented by the brothers. Also, the strategies made by Gerry seem to be all unplanned. He had to get to know the brothers then establish strategies on the spot. The “branchising’ plan suggested by Gerry is also an evidence of emergent strategy. Gerry comes up with this plan on the spot. It is not as if he thought of suggesting this plan to the brothers from the start. This emergent strategy from Gerry seems to be a successful one in the sense that the brothers are happy with it and adapting it. 75 Q.1 Explanation on what is the organizational structure in the case: Explanation on the structure: Pros and cons: Sanrizz has a functional structure. The departments are separated by the business’s functions, for instance, human resources management, education, branchising, artistic services, etc. Under functional structure, career ladders and communication within department are enhanced and efficiency is usually high. However, high degree of differentiation might make coordination difficult and it might runs into problems as organization grows and product diversify. 76