Friday, June 12, 2009

Describe different approaches to organisation and their relevance. Explain 7Ss Model and it’s significance in organisations.

Describe different approaches to organisation and their relevance. Explain 7Ss Model and it’s significance in organisations. Discuss with suitable examples.

The basic elements of organisations have remained the same over the years. Organisations have purposes (be they explicit or implicit), attract people, acquire and use resources to achieve the objectives, use some form of structure to divide (division of labour) and coordinate activities, and rely on certain positions/people to lead or manage others. While the elements of organizations are the same as ever before, the purposes o\f organisation, structures, ways of doing things, methods of coordination and control have always varied widely over the years and even at the same time amongst different organisations. For example, public sector organisation in India with there multiple objectives in early years were not roused by the profit motive but are now required to make surpluses. At a given point in the time of history. Ford Motors relied more on centralization and General Motors on decentralization. The crucial aspect that accounts for the differences is how an organisation adapts itself to the environment. Organisation being part of the society affects and is affected by the changes in society. The changes could be social, economic, technical, legal or political; they could be in input (labour, capital, materials etc.) or output markets.

It is essential to develop a perspective understanding about organisations because human behaviour and organisational behaviour are influenced by the people in organisations and the specific characteristics in the basic elements in the organisations and the way they adapt themselves to the environment. There is considerable body of knowledge and literature, called organisation theories, developed over the years reflecting what goes on in organisations. Organisation theories are sets of propositions which seek to explain or predict how individuals and groups behave indifferent organisational structures
and circumstances.

Basically we have the three types of approaches to organisation
1. Classical
2. neo-classical
3. modern approach
Now we will describe

Classical Viewpoint:
these concepts have come to be popularly known as classical concepts or classical theories of organisation. The structure of an organisation received emphasis under this school of thought. According to the classical view, “An organisation is the structure of the relationships, power, objectives, roles, activities, communications and other factors that exist when persons work together.

The streams of concepts in the “classical” mould are based on the same assumptions, but are developed rather independently. Bureaucracy as a concept, first developed by Max Weber, presents a descriptive, detached, scholarly point of view. Administrative theories not only described macro aspects of organisations but also focused on principles and practice for better performance. Scientific management thought focused mainly in micro aspects like individual worker, foreman, work process, etc. The classical theorists on the whole, with scientific management stream being a minor exception, viewed organisations as mechanistic structures. Let us consider the three streams of classical theories briefly : i.e Bureaucracy, Administrative theory and Scientific Management.

Bureaucracy is the dominant feature of ancient civilizations as well as modern organisations in contemporary world. Max Weber describes an “ideal type” approach to outline the characterstics of a fully developed bureaucratic form of organisation. The features that the described as being characterstic of a bureaucracy are common to all social institutions, be they political, religious, industry, business, military, educational or government organisations. Size and complexity produce bureaucracy. As such, the rigid structures, fixed jurisdictions, impersonal rules and mundane routine, concomitant with bureaucracies often result in delays, produce inertia, encourage buck-passing, lead to wastage of resources and cause frustration. As such, in general parlance the word ‘bureaucracy’ has come to have a negative connotation and many tended to wish it away. But the features that characterize bureaucracy have become inevitable and ubiquitous with the growing size and complexity in organisations. There is need, therefore, to understand and improve bureaucracies than indulge in dysfunctional debates over their relevance.

Administrative Theory
Administrative theory is another stream of thought in the classical mould.
Among the several proponents of the Administrative theory, the earliest and significant contribution came from Henri F Fayol, a French industrialist, in 1916. The 14 principles that capture the essence of the administrative theory could be summarized as follows:

Division of work. Division of work or specialization gives higher productivity because one can work at activities in which one is comparatively highly skilled.

Authority and responsibility. Authority is the right to give orders. An organisational member has responsibility to accomplish the organisational objectives of his position. Appropriate sanctions are required to encourage good and to discourage poor performance.

Discipline. There must be respect for and obedience to the rules and objectives of the organisation.

Unity of command. To reduce confusion and conflicts each member should receive orders from and be responsible to only one superior.

Unity of direction. An organistion is effective when members work together toward the same objectives.

Subordination of individual interest to general interest. The interests of one employee or group of employees should not prevail over that of the organisation.

Remuneration of personnel. Pay should be fair and should reward good performance, decentralization.

Centralisation. A good balance should be found between centralisation and decentralization.

Scalar chain. There is scalar chain or hierarchy dictated by the principle of unity of command linking all members of the organisation from the top to the bottom.

Order. There is a place for everything and everyone which ought to be so occupied.

Equity. Justice, largely based on predetermined conventions, should prevail in the organisation.

Stability of tenure of personnel. Time is required for an employee to get used to new work and succeed in doing it well.

Initiative. The freedom to think out and execute plans at all levels.

Espirit de corps. “Union is strength”.

Scientific Management
The third stream of classic school of thought is the scientific management. Whereas bureaucracy and administrative theory focused on macro aspects of the structure and processes of human organisations, scientific management concerned itself with micro aspects such as physical activities of work through time-and-motion study
and examination of men-machine relationships. Unlike in the other two, the scientific management and based its inductive reasoning on detailed study and empirical evidence. In juxtaposition the principles of bureaucracy and administrative theory were formed by synthesising experience and observation with abstract reasoning.

Neoclassical Viewpoint
The neoclassical theory, also referred to as the human relations school of thought reflects a modification to and improvement over the classical theories. While classical theories focused more on structure and physical aspects of work the neoclassical theory recognizes the primary of psychological and social aspects of the worker as an individual and his relations within and among groups and the organisation. Though neoclassical philosophy could be traced to ancient times, it gained currency only after the world War I, particulary in the wake of the “Hawthrone experiments” at Western Electric Company by Elton Mayo during 1924 to 1932.

The neoclassical viewpoint thus gave birth to human relations movement and provided the thrust toward democratisation of organisational power structures and participative management. The emerging changes in social, economic, political and technical environment of organisations also seems to have provided the rationale for such shift in emphasis.

The neoclassical viewpoint does not replace classical concepts. The need for order, rationality, structure, etc. have been modified to highlight the importance of relaxing the rigid and impersonal structures and consider each person as an individual with feelings and social influences that effect performance on the job.

Modern (Systems) Viewpoint
Modern theories of organisation and management have been developed largely since the 1930s. The perspective here is to provide a systems viewpoint. Among the several persons who contributed to the modern theory, it was perhaps Chester I. Bernard, who in 1983, provided a comprehensive explanation of the modern view of management and organisation. He considered the individual, organisation, suppliers and consumers as part of the environment. Ten years later, Weiner;s pioneering work on cybernetics developed concepts of systems control by information feedback. He described an adaptive system (including an orgainsation) as mainly dependent upon measurement and correction through feedback. An organisation is viewed as a system consisting of five parts: inputs, process, output, feedback and environment as shown in Figure .

Input Process Outputs

The GST approach suggests the following nine levels of systems complexity:
1. The most basic level is the static structure. It could be termed the level of frameworks. An example would be the anatomy of the universe.
2. The second level is the simple dynamic system. It incorporates necessary Predetermined motions. This could be termed the level of clockworks.
3. The next level is a cybernetic system characterized by automatic feedback Control mechanisms. This could be thought of as the level of clockworks.
4. The fourth level is called the “open-systems” level. It is a self-maintaining Structure and is the level where life begins to differentiate from nonlife. This is the level of the cell.
5. The fifth level can be termed the “genetic-societal” level. It is typified by the plant and occupies the empirical world of the botanist.
6. The next is the animal level, which is characterized by increased mobility, Teleological behaviour, and self-awareness.
7. The seventh level is the human level. The major difference between the human level and the animal level is the human’s possession of self-consciousness.
8. The next level is that of social organisations. The important unit in a social organisation is not the human per se but rather the organisatonal role that the person assumes.
9. The ninth and last level is reserved for transcendental systems. This allows for ultimates, absolute and the inescapable unknowables.

Each level is more complex than the one that precedes it. However, no stage is as yet fully developed and knowledge about different levels is for varying degrees. Beyond the second level none of the theories are comprehensive or fully meaningful. Over the last here decades further developments in research into organisations may have added to the existing knowledge, but human organisations continue to be extremely complex.

The systems approach points to the interdependent nature of everything that forms part of or concerns an organisation. A system is composed of elements which are related to and dependent upon one another and which, when in interaction, from a unitary whole.

Systems framework covers both general and specialized systems and closed and open analysis. A general systems approach to the management processes deals with formal organisation and concepts relating to different disciplines such as technical, social, psychological and philosophical. Specific management systems deal with aspects relating to organisation structure, job design, specific functions of management, etc.

A closed system operates in a closed loop, devoid of external inputs. An open system, in contrast, is a dynamic input-output system “in continual interaction with environment to achieve a steady state of dynamic equilibrium while still retaining the capacity for work or energy transformation”.

While the classical theorists recognised only a closed system viewpoint, the modern theorists believe in organisations as open systems. The work of D.Katz and R L Kahn provided the intellectual basis to merge classical, neoclassical and modern viewpoints.

Here below we are describing the different approaches to organisation in relevence of 7s model.

The 7-S-Model is better known as McKinsey 7-S. This is because the two persons who developed this model, Tom Peters and Robert Waterman, have been consultants at McKinsey & Co at that time. Thy published their 7-S-Model in their article “Structure Is Not Organization” (1980) and in their books “The Art of Japanese Management” (1981) and “In Search of Excellence” (1982).

The model starts on the premise that an organization is not just Structure, but consists of seven elements:

Those seven elements are distinguished in so called hard S’s and soft S’s. The hard elements (green circles) are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documentations.
The four soft S’s however, are hardly feasible. They are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. Therefore it is much more difficult to plan or to influence the characteristics of the soft elements. Although the soft factors are below the surface, they can have a great impact of the hard Structures, Strategies and Systems of the organization.


The Hard S’s
Strategy Actions a company plans in response to or anticipation of changes in its external environment.
Structure Basis for specialization and co-ordination influenced primarily by strategy and by organization size and diversity.
Systems Formal and informal procedures that support the strategy and structure. (Systems are more powerful than they are given credit)
The Soft S’s
Style / Culture The culture of the organization, consisting of two components:
• Organizational Culture: the dominant values and beliefs, and norms, which develop over time and become relatively enduring features of organizational life.
• Management Style: more a matter of what managers do than what they say; How do a company’s managers spend their time? What are they focusing attention on? Symbolism – the creation and maintenance (or sometimes deconstruction) of meaning is a fundamental responsibility of managers.
Staff The people/human resource management – processes used to develop managers, socialization processes, ways of shaping basic values of management cadre, ways of introducing young recruits to the company, ways of helping to manage the careers of employees
Skills The distinctive competences – what the company does best, ways of expanding or shifting competences
Shared Values / Superordinate Goals Guiding concepts, fundamental ideas around which a business is built – must be simple, usually stated at abstract level, have great meaning inside the organization even though outsiders may not see or understand them.

Effective organizations achieve a fit between these seven elements. This criterion is the origin of the other name of the model: Diagnostic Model for Organizational Effectiveness.
If one element changes then this will affect all the others. For example, a change in HR-systems like internal career plans and management training will have an impact on organizational culture (management style) and thus will affect structures, processes, and finally characteristic competences of the organization.

In change processes, many organizations focus their efforts on the hard S’s, Strategy, Structure and Systems. They care less for the soft S’s, Skills, Staff, Style and Shared Values. Peters and Waterman in “In Search of Excellence” commented however, that most successful companies work hard at these soft S’s. The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers. The lack of success and synergies in such mergers is often based in a clash of completely different cultures, values, and styles, which make it difficult to establish effective common systems and structures.

The 7-S Model is a valuable tool to initiate change processes and to give them direction. A helpful application is to determine the current state of each element and to compare this with the ideal state. Based in this it is possible to develop action plans to achieve the intended state.

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