Rothwell W.J. - Beyond Training and Development[c] The Groundbreaking Classic on Human Performance Enhancement (2004)(2-e)(en)

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specialist or a task force should consider how to communicate the policy or procedure, and a communication plan should be established to ensure that employees are informed of policies or procedures.

Problems with Using Organizational Policies and Procedures as an HPE Strategy

In many organizations, written policies and procedures are viewed with scorn and are regarded as trappings of bureaucracy. Nobody pays much attention to them. Indeed, some entrepreneurs boast that their organizations have no written policies or procedures and that employees are told to ‘‘apply the golden rule’’ when they encounter problems. In other settings, employees who encounter problems rarely drop what they are doing to read a policy or procedure manual; they usually turn to a coworker and ask what to do. Most policies and procedures are informal, despite the obvious problems that can lead to.

To address these issues, policies and procedures should usually be kept to a minimum and be directed to only the most important matters. They should also be frequently reviewed, updated, and communicated.

Enhancing Organizational Design

Organizational design is critically important to establishing a high performance work environment. The reason: People have to know who is responsible for doing what—and why—to function effectively. Organizational design establishes the authority and responsibility relationships that are so critical to successful performance. To achieve high performance, managers or employees must do more than ‘‘try their best.’’ They must have a sense of responsibility for what they do. The organization’s design establishes responsibility—and accountability.

What Is Organizational Design?

Organizational design means arranging divisions or functions, work groups, teams, and jobs in power and authority relationships that are consistent with—or at least do not interfere with—strategic goals and desired results. Organizational structure refers to the reporting relationships of the organization, the arrangement of who reports to whom. Organizational redesign is the process of changing relationships between organizational units or jobs to achieve more harmonious balances among them. Organizational redesign is common in the wake of radical

changes such as downsizings or mergers. Redesigns without careful forethought are often unsuccessful.

Why Is Organizational Design Important?

Few contemporary observers dispute that organizational design is one of the most important decisions that can be made in an organization. Deciding who reports to whom and what functions or operations fit together can be critical in meeting customer needs, ensuring effective work flow, developing potential talent, and preserving organizational resources.

Research on organizational design has revealed that there is no one best way to organize and that different approaches to organizing are not equally effective.1 Classic (and still relevant) studies of organizational design were conducted by Tom Burns and G. M. Stalker,2 Joan Woodward,3 Alfred Chandler,4 Richard Hall,5 and Paul R. Lawrence and Jay W. Lorsch.6 Burns and Stalker examined twenty British and Scottish organizations and concluded that any organizational design can be effective, depending on the external environment in which the organization operates. Mechanistic organizations are effective in stable external environments; organic organizations are effective in dynamic environments. Woodward, having studied one hundred British organizations, concluded that structure and effectiveness are related only when production technology is controlled. Chandler, credited as the founder of strategic planning, looked at seventy U.S. industrial giants and argued that the choice of structure should follow (rather than precede) choice of strategy. Chandler found that successful organizations operating in a single industry tended to retain a top-down structure, while successful organizations operating in several industries at once tended to decentralize geographically.

Hall found that functions within organizations vary in the same way as organizations themselves; successful functions that deal with a dynamic environment tend to structure themselves organically, while functions that deal with a stable environment structure themselves in a top-down, mechanistic way. His findings are important for making organizational design decisions within divisions, departments, work groups, or teams.

Lawrence and Lorsch examined structure in light of uncertainty and concluded that different organizational designs should be used within functions or even within jobs, depending on the uncertainty of task outcomes. The uncertainty of a task (defined as ‘‘the difference between the amount of information required to perform the task and the amount of information already possessed

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by the organization’’) is a key issue in making decisions about how to organize the work.7

When Should Organizational Design Be a Focus of Attention for HPE Strategy?

Attention needs to be directed to organizational design whenever an organization, division, department, work unit, or team undergoes major change from inside or outside. If the external environment becomes more unstable because it is becoming more competitive or if the internal environment becomes more unstable due to changing work methods or relationships with other departments or work operations, reassessing organizational design is warranted.

Organizational design problems are possible sources of human performance problems under the following conditions:

‘‘Turf battles’’ across work units or teams, departments, or divisions are apparent.

Managers or employees complain that their organizational units are not the only ones involved in a work process, method, activity, or responsibility.

Overlapping or duplicative duties, titles, or responsibilities are evident on organization charts.

Customer complaints are traceable to unclear or duplicative efforts by different units or teams, departments, or divisions.

What Choices Exist in Organizational Design?

The basic tenets of organizational design have remained largely unchanged since the days of Frederick W. Taylor early in the twentieth century. However, increasing attention is being devoted to fluid designs, partly because of the widespread view that the external environments of organizations are becoming more dynamic as a result of fierce global competition.

There are several possible choices for organizational design. They include:

The entrepreneurial design

The functional design

The divisional design

The project design

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Exhibit 11-4. The divisional design.

Chief Executive Officer

a global organization that manufactures perfume may add a layer of management or task specialization to handle sales on different continents.

The project structure (see Exhibit 11-5) adds a layer of management or task specialization below divisions and functions. Projects are temporary activities that require special handling, such as new-product launches, new industrial plant designs, or new service lines. A project manager oversees the temporary activity within the framework of existing divisions and functions. However, the project manager is usually subordinated to divisional or functional managers.

The matrix structure (see Exhibit 11-6) adds complexity to design. All features of a project structure are maintained, with only one important exception: The project manager is elevated to a status equal to a division manager. That means that workers may have two immediate supervisors, one for a project and

Exhibit 11-5. The project structure design.

Chief Executive Officer

Exhibit 11-6. The matrix management design.

Chief Executive Officer

one for a division. The idea is to encourage cross-functional sharing to expedite prompt, effective responses to customer needs or requests.

The team structure (see Exhibit 11-7) is similar to the project and matrix structures and often overlaps with them. Teams may be temporary or permanent. They may be restricted to one division or function, or they may operate across functions, divisions, or project assignments. Teams have gained immense popularity in recent years, since they provide flexibility and broad sharing across jobs. They also encourage necessary interdependency across organizational boundaries.

According to a survey of 4,500 teams in more than 500 organizations by the Wilson Learning Corporation, it is collaboration rather than teamwork that enables companies to turn a limited team process into a positive driving force. The most frequently mentioned organizational barriers to effective team performance are unfair rewards and compensation; unsupportive personnel and human resource development systems; ineffective information systems; lack of top management commitment; incompatible organizational alignment; negative personal mindsets among team members, incompatible individual abilities and characteristics; and various team membership factors. The survey revealed that most corporations utilize six type of teams: (1) functional; (2) continuous improvement;

(3) product; (4) project; (5) management; and (6) problem solving. When asked how they evaluate the effectiveness of collaboration, 84 percent of respondents

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Exhibit 11-7. The team structure design.

Team

Member

Team

Member

said they used task outcomes, 53 percent mentioned group process, and 41 percent cited team member satisfaction.

The virtual design (see Exhibit 11-8) is most radical of all but appears to be the organizational structure of the future. The organization chooses to outsource its work or relies heavily on external vendors, temporary employees, offshore or virtual workers, or others brought inside to cope with peak workloads or specialized assignments. Only a skeleton crew is employed full-time, and its members may function more as contract managers overseeing an army of temporary help than as individual contributors. One advantage of this design is its tremendous flexibility. It also helps the organization hold down costly employee benefits. A disadvantage is that insufficient time, money, or effort may be devoted to cultivating a long-term base of experience, and institutional memory and organizational learning may be sacrificed on the altar of expediency.

Recent attention to organizational design is focused on work flows across jobs, teams, departments, and divisions. The aim is to go beyond organization charts and paper-and-pencil depictions of reporting relationships (so-called for-

Exhibit 11-8. The virtual design.

Temporary

Suppliers

Employees

Organization

Long-Term Employees

mal design) to examine the actual, daily processes and interrelationships of work units as they meet customer needs, manufacture products, or deliver services. Keys to such examinations are analyses of the inputs, transformation processes, and outputs of each function, division, project team, work team, or job. Often such examinations require organizational maps, depictions of where and how the work flows, and an analysis of necessary improvements. An organizational map is like a flowchart that depicts the movement of work through each work area, how each work area processes it, and how it then moves on to other areas.

How Can Organizational Design Be Used as an HPE

Strategy?

In most cases HPE specialists acting alone are unable to affect organizational design. The reason is that most major decisions about organizational design are reserved for top managers, middle managers, and supervisors or teams for their respective areas of responsibility. Changing organizational design requires management and employee involvement.

Exhibit 11-9. A worksheet for considering organizational redesign.

Directions: Use this worksheet to structure your thinking about the impact of organizational design on division, department, work group or team, or individual performance. Consider each question posed in the left column. Then note your answers in the space at right. There are no right or wrong answers, though there may be some answers that are better than others in special situations.

1.What structural or design defects appear to exist?

2.What evidence suggests that the defects are leading to ‘‘turf battles,’’ duplicative efforts, or other unproductive activities?

3.How have other organizations arranged their responsibilities around similar work products or processes to avoid duplication of effort or missing areas of responsibilities?

4.How well could the design of other organizations be adapted to this organization?

5.Who should be involved in decision making about organizational design, and how can they be convinced that a problem exists?

6.How can a shift in organizational design be made in a way that minimizes disruptions? What HPE strategies may have to be combined with organizational redesign to achieve a smooth transition from an existing to a desired organizational design?

Several problems can occur when organizational redesign is used as an HPE strategy:

1.It is easy for managers, employees, and HPE specialists to overlook the systemic consequences of an isolated organizational redesign decision; changes in design may lead to problems in other areas of organizational