STRUCTURE AND PROCESSES ORGANISATION STRUCTURE
Structure provides the framework for the activities of the organisation and must harmonise with its goals and objectives.
The nature of the organisation and its strategy will indicate the most appropriate organisational levels for different functions and activities and the formal relationships between them.
There are six structural dimensions as defined by Pugh (1968).
- Specialisation – concerned with the division of labour and allocation of tasks.
- Standardisation – standardisation of procedures.
- Formalisation – denotes the extent to which rules, procedures, and instructions are documented.
- Centralisation – concerns the locus of authority to make decisions affecting the organisation.
- Configuration – is the shape of the structure, e.g. long or short chain of command.
- Traditionalism – the extent to which an organisation is standardised by customs or rules
An additional structural dimension not mentioned above but of equal importance is information technology.
Computer based information and decision support systems affect other choices in design such as strategic decisions on markets, customers and products, or tasks and individuals.
Managers therefore must develop an appreciation for the interface between computing and the organisation.
The Division of Work
Within the formal structure of the organisation work has to be divided among its members and different jobs related to each other.
The division of work should therefore be organised by reference to some common characteristics which form a logical link between the activities involved.
Work can be divided and activities linked in a variety of different ways, e.g. function, product, location, department, or a combination of these elements
Functional organisations are regarded as having the traditional organisational structure where each unit is tasked with the management and maintenance of specific activities. Each department handles aspects of all or most products
The advantages to this type of structure are as follows:
- Each individual’s efforts are focused.
- Resources are used efficiently by grouping the various functions and thereby exploiting economies of scale.
- Communications and decisions are easier to transmit.
- The measurement and output of each function can be easier to facilitate.
- Status is given to each function.
- Control is made easier to facilitate.
The disadvantages to this type of structure are:
- Functional department can become too large and are more difficult to manage.
- Employees may focus on department goals rather than organisational goals.
- The larger the function the more costly it becomes.
- Management development becomes more difficult as there may be a lack of crossfunctional experience.
- Competition between functions can develop.
Organisation by Product Division/SBU
Ingredients: A global provider of customised food ingredients for the food processing industry.
Bio-science: Provide Bio-ingredients and Pharma-ingredients for the beverage and food industries.
Flavours: This division focuses on global markets creating sweet, savoury, and dairy flavours.
Agribusiness: This division ensures the efficient production of quality milk in line with Dairy Hygiene Regulations.
Foods: This division has eight business units under which the company’s food products and services are marketed:
- Kerry Foods Ireland – Cooked Meats & Speciality Poultry
- GB Brands – Frozen Meals & Snacks
- Direct to Store (UK) – Foodservice
- Ready Meals & Convenience Products – Liqueurs
The advantages to this type of structure are as follows:
- Product departments can be evaluated as profit centres.
- As the business grows or declines additional profit centres can be added or consolidated.
- The co-ordination of activities between functions can occur more quickly.
- Each product department can focus on the needs of customers.
- Management development within a SBU or profit centre occurs across a variety of activities.
- Staff are focused on the product objectives and not distracted by wider organisational goals
Some Disadvantages are:
- Co-ordination among specialised product areas can be problematic.
- Duplication of functional services.
- Less Communication and interaction among functional specialists.
- There is an emphasis on the product rather than the organisational goals and objectives.The matrix structure is appropriate where an organisation engages in distinct and significantly large projects that are unique, for example construction companies may have a number of unique projects running simultaneously, E.g. bridge building, tunnel building and commercial development. Staff will belong to a functional group but will also be members of a project team.The Matrix structures have the following advantages,
- Human Resource knowledge and experience is maximised.
- Specialists are available to work across a number of projects.
- It provides an opportunity to train and develop management skills.
- The Project manager is central to the delivery of the project.
The disadvantages to the Matrix structure is as follows,
- Power struggles can occur between project managers and functional managers.
- Interpersonal and command conflict may exist where dual reporting is required.
- Project teams can promote narrow viewpoints that are in conflict with organisational goals and objectives.
- Speed of decision making can be slower than with other forms of structures.
This is becoming a common approach to implementing a team concept in organisations. There are two types:
The cross-functional team which consists of employees from different departments who are responsible to meet as a team and resolve mutual problems. These teams may also be used to manage change in the organisation or new product development.
The Virtual Team – see below
The Virtual Network Organisation Structure
Organisations are now challenging the conventional approach to organisation by developing loosely interconnected groups beyond the boundaries of the organisation. These teams collaborate together in the delivery of strategic goals. Organisational virtual teams located in international locations are designing and producing products e.g. Air bus, where for one product an aeroplane, the constituents parts are made by different companies in different countries. Whilst many other organisations are collaborating with other organisations to enhance their product offering in the pursuit of increased market share, e.g. Google and You Tube. However many organisations take the virtual approach of simply outsourcing non-core activities.
Centralisation V Decentralisation
A particular problem which arises from the division of work and activities is the extent of centralisation or decentralisation.
A decentralised organisation is one which the authority to commitment, money and materials is widely diffused throughout every level of the organisation.
A centralised organisation is one where little authority is exercised outside the key group of senior managers.
The advantages of decentralised are as follows:
- Top management are free to concentrate on their strategic responsibilities.
- It speeds up operational decisions.
- It allows local management to be flexible.
- It can contribute to staff motivation.
The main disadvantages of decentralisation are,
- It requires good control and communication systems.
- It requires greater co-ordination by management.
- It can encourage parochial attitudes.
- It requires a supply of well-motivated managers.
On balance the advantages of decentralisation outweigh the disadvantages because of the pressure on modern organisations to be flexible and respond quickly to the business environment.
Henry Mintzberg Classification of Organisation Forms
According to Henry Mintzberg, an organisation’s structure is largely determined by the variety one finds in its environment. For Mintzberg, environmental variety is determined by both environmental complexity and the pace of change. He identifies four types of organisational form, which are associated with four combinations of complexity and change.
To help explain each of the four organisational forms, Mintzberg defines five basic organisational subunits.
Subunit Example positions from a manufacturing firm.
- Strategic Apex: – Board of Directors, Chief Executive Officer
- Technostructure: – Strategic Planning, Personnel Training, Operations Research, Systems Analysis and Design
- Support Staff: – Legal Counsel, Public Relations, Finance/Payroll, Mailroom Clerks, Cafeteria Workers
- Middle Line: – Operations Manager, Marketing Manager, Plant Managers, Sales Managers
- Operating Core: – Purchasing Officer, Machine Operators, Assemblers, Sales Persons, Dispatchers.Machine Bureaucracy: Technocrats, standardised procedures and output dominate. Machine Bureaucracy is highly specialised, routine operating tasks with very formalised procedures in the operating core. A proliferation of rules, regulations, and formalised communication throughout the organisation; large-sized units at the operating level; reliance on the functional basis for grouping tasks; relatively centralised power for decision making; and an elaborate administrative structure with sharp distinctions between line and staff.Because the machine bureaucracy depends primarily on the standardisation of its operating work processes for co-ordination, the technostructure – which houses the analysts who do the standardising – emerges as the key part of the structure.
Machine bureaucratic work is found, above all, in environments that are simple and stable.
Professional Organisation: Professionals in the operating core (e.g. doctors, accountants, professors) rely on roles and skills learned from years of schooling and indoctrination to coordinate their work. The professional relies for co-ordination on the standardisation of skills and its associated design parameter, training and indoctrination. It hires duly trained and indoctrinated specialists -professionals- for the operating core, and then gives them considerable control over their work. Control over his/her own work means that the professional works relatively independently of their colleagues, but closely with the clients they serve. Most necessary co-ordination between the operating professionals is handled by the standardisation of skills and knowledge – in effect, by what they have learned to expect from their colleagues.
Entrepreneurial Start-up: Managers in the strategic apex directly supervise the work of subordinates. This structure is characterised, above all, by what is not elaborated. Typically, it has little or no technostructure, few support staffers, a loose division of labour, minimal differentiation among its units, and a small managerial hierarchy. Little of its behaviour is formalised, and it makes minimal use of planning, training, and liaison devices. Coordination in the simple structure is effected largely by direct supervision. Specifically, power over all-important decisions tends to be centralised in the hands of the chief executive officer. Thus, the strategic apex emerges as the key part of the structure; indeed, the structure often consists of little more than a one-person strategic apex and an organic operating core.
Most organisations pass through the simple structure in their formative years. The environment of the simple structure tends to be at one and the same time simple and dynamic Adhocracy: Teams of professionals form the operating core, while support staff and technostructure rely on informal “mutual adjustment” to co-ordinate their efforts. In adhocracy, we have highly organic structure with little formalisation of behaviour. Job specialisation based on formal training; a tendency to group the specialists in functional units for housekeeping purposes and to deploy them in small, market-based project teams to do their work; a reliance on liaison devices to encourage mutual adjustment, the key coordinating mechanism, within and between these teams.
Planning and Control Systems
Structure may be important in the co-ordination of organisational resources but what makes organisations work are the processes. These processes can also be considered as controls which may aid or hinder putting the strategy into action.
Control processes can be subdivided in two ways:
Input controls: the emphasis is on how resources are consumed in the strategy i.e. financial, human etc.
Output controls are focused on targets and performance measurement.
The second subdivision is between direct control and indirect control. Indirect is more hands off by management while direct control involves close supervision of staff.
The six approaches to control processes are as follows:
- Direct supervision: the direct control of strategic decisions by one or few individuals. It is a dominant process in small organisations.
- Planning process: regarded as administrative control it is the allocation of resources and monitoring their utilisation, methods such as standardisation of work practices and (ERP) enterprise resource planning system aid this form of control.
- Self-control and personal motivation: this is achieved by integration of knowledge and co-ordination of activities by the direct interaction of individuals without supervision.
- Cultural processes: here we are concerned with organisational culture and norms of behaviour.
- Performance targeting processes: this relates to the outputs of an organisation such as product quality, pricing, or profit. Balance score cards have been used to widen the scope of performance targeting.
- Market processes: this involves some formalised system of contracting for resources or inputs from other parts of the organisation. Internal markets normally require the establishment of inter service level agreement in the delivery of services. Internal markets may also mean business units competing for business amongst themselves for survival.
Enterprise Resource Planning
Enterprise resource planning (ERP) is a method of planning and integrating business resources (materials, employees, customers etc.) through the application of information technology.
An ERP system is a business support system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management.
An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in realtime. The information should be reliable, accessible, and easily shared. The modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance. Ideally, the data for the various business functions are integrated. In practice the ERP system may comprise a set of discrete applications, each maintaining a discrete data store within one physical system.
The Balanced Score Card
The balanced scorecard is a management concept which helps managers at all levels monitor results in their key areas. An article by Robert Kaplan and David Norton entitled “The Balanced Scorecard – Measures that Drive Performance” in the Harvard Business Review in
1992 sparked interest in the method, and led to their business best-seller, “The Balanced Scorecard: Translating Strategy into Action”, published in 1996. The balanced scorecard forces managers to look at the business from four important perspectives. It links performance measures by requiring firms to address four basic areas.
There’s nothing new about using key measurements to take the pulse of an organisation. What’s new is that Kaplan and Norton have recommended broadening the scope of the measures to include four areas:
- The Financial Perspective: The delivery of financial expectations, consistently. Types of measures used are: ROCE, cash flow, profitability, reliability of performance and shareholder value.
- The Customer Perspective: This relates to the extent of customer satisfaction, of their needs of the business and the market segments in which they, the businesses, compete e.g. satisfaction based on value, reliability, price or quality.
- The Internal Perspective: focuses on what an organisation must excel at to meet the customer needs defined in the Customer Perspective e.g. faster delivery of service or more reliable products achieved by better production processes or improved quality of materials.
- The Growth/Innovation Perspective: The focus here is on how a business is improving its ability to innovate, improve, and learn so as to enable success with the critical operations and processes defined in the Internal Process Perspective.
This allows the monitoring of present performance, but also tries to capture information about how well the organisation is positioned to perform well in the future.
Kaplan and Norton cite the following benefits of using the balanced scorecard:
- It focuses the whole organisation on the few key things needed to create breakthrough performance.
- Helps to integrate various corporate programmes, such as quality, re-engineering, and customer service initiatives.
- Breaks down strategic measures to local levels so that unit managers, operators, and employees can see what’s required at their level to roll into excellent performance overall.
Using on-going performance measures, an organisation can determine what activities to focus on to improve its competitive position.
- MANAGING KEY ENABLERS
Managing key enablers is concerned with the two way relationship between overall business strategy and strategies in the separate resource areas such as finance, technology and people.
The knowledge and experience of people can be key factors enabling the success of the strategies. However they can also hinder the successful adoption of new strategies, therefore people related issues are a central concern and responsibility to most managers. Most organisations will attempt to ensure that Human Resource policies are designed to complement any intending strategy.
People as a Resource
Strategic capabilities are central to the successful implementation of strategy and how resources are deployed, managed and controlled and in the case of people motivated to create core competencies.
The activities of the HR function can enable successful strategy in the following ways:
- Audits: to assess HR requirements that aids the development of core competencies.
- Goal setting performance assessment: empowering management to evaluate the performance of subordinates in a 360 degree appraisal thereby linking performance to strategy.
- Many organisations utilise reward mechanisms as an incentive to individuals and teams in the execution and delivery of strategies. The challenge is to ensure the incentives do not hamper the delivery of the strategy.
- Recruitment: Recruitment is important in the delivery of strategy as the organisation may need to source new skills, redeploy existing staff or put in place succession planning for the future.
- The replacement of training and development in favour of coaching and mentoring to support self-development. This is important where organisational change in on going.People and Behaviour People are not like other resources, they can influence strategy both through their competence and behaviour. As the McKinsey model demonstrates: the “soft ” side of management and how it is concerned with behaviour and is sometimes neglected in favour of harder issues.
Therefore managers and their actions may influence behaviour which in turn may determine the success of the strategy.
Managers must be clear about their actions and their impact on organisational strategy e.g.
- Managers must be people oriented and understand the softer aspects of management that can help deliver a strategy.
- Understand the relationship between behaviours and strategic logic. This is important to focus on the correct form of behaviour.
- Be realistic about the difficulty and timescales in achieving behavioural changes.
- Vary the style of management under different circumstances.
The Human Resource Function
A company’s workforce represents the most valuable resource the organisation possesses. It is essential therefore that the workforce be managed in such a way that their efforts are continually contributing towards improving and sustaining organisation performance.
The origins of modern day personnel management lie in the dramatic changes brought about by the industrial revolution in the UK and Europe, indeed a central component to the evolution of personnel management was the factory system where large numbers of workers were employed to produce products for mass markets.
The emergence of the scientific school of management (Taylorism) with its standardisation of work systems and methods focused the personnel function, on the careful selection and training of employees along with other functions such as job design, work conditions and remuneration.
Over the years the role of personnel management has developed to the extent that it has become a distinct function within the organisation; issues that have affected this include growth in industrialisation, direct foreign investment, government intervention and the development of the industrial relation machinery. Also people are seen as a resource of production.
In recent times increased competition has forced many companies to seek ways of achieving competitive advantage and this has led to organisations investigating different approaches to workforce management. The most widely debated development has been the emergence of Human Resource Management (HRM). HRM has its roots in the USA and was developed as a method of integrating workforce management with strategic corporate objectives.
There are four broad roles the HR function fulfils in modern organisations,
- As a service provider e.g. recruiting or arranging training.
- As a regulator setting the rules within which the line managers operate.
- As an advisor on issues of HR strategy to line managers to ensure policies and practices are aligned to strategy.
- As a change agent moving the organisation forward.
The role of the HR function will be shaped by the structural context and the type of strategy to be delivered; to this extent the line managers’ responsibilities may differ by varying degrees.
Middle (line) Managers
Line managers are expected to take a central role in managing the human resources and while this gives advantages due to ownership of objectives it sometimes leads to concerns relating to people management and the risk to strategic success. Some concerns are listed below:
- The risk of expecting managers to be competent HR professionals
- The short term pressures to meet targets may detract from being people oriented
- Trade unions have resisted the dispersion of HR functions rather than engaging with a central contact
- Managers may lack the incentive to take on HR activities
- There has been the criticism that managers are acting as gatekeepers and block strategic change whereas their involvement is crucial to delivering strategy.
Structure and Processes
As covered widely in earlier sections people may not be engaged in the strategy because the traditional role and structures do not match the future strategy.
Also as strategies require change in behaviour it may be necessary to encourage interrelationships between department, cross functional teams or external third parties.
Management may also consider the involvement of an outside HR specialist or agency to advise on matters around recruitment and selection.
Implications for Managers
The relationship between business strategy and people cannot be under estimated and this is best illustrated in the model below where an organisation focusing on matching management skills and HR strategies in the pursuit of competitive advantage from people.
There must be activities to support the strategy e.g. performance rewards, objective setting, and training.
There must also be a platform upon which the strategy can be built in the long term e.g. leadership, culture and competencies.
The cycles of leadership and performance management must be linked. Short term goals must not be at the expense of long term capability e.g. the individual bonus schemes may prohibit the creation of new roles and relationships to develop a more innovative organisation. Therefore it is important to connect activities to the strategy.
The organisations that can optimise peoples’ competencies, behaviour and processes in the pursuit of strategy may be best positioned to gain competitive advantage.
Human Resource Planning Recruitment and Selection
Human Resource Planning
Human resource planning is the basis of effective personnel management since it involves forecasting human resource needs for the organisation and planning the steps necessary to achieve them.
As organisations are continually working in ever changing environments, their survival is becoming more dependent on the quality of staff employed and thereafter their utilisation. It is with this in mind that the function of human resource planning is concerned with the recruitment of employees with the right qualifications, knowledge, necessary skills for effective functioning and who will “fit in”.
The following benefits may accrue from human resource planning,
- The reduction of personnel costs through the anticipation of shortages or surpluses of human resources which can be corrected before they become unmanageable.
- Employee development to make optimum use of workers’ aptitudes.
- The overall improvement of the business planning process.
- The provision of equal opportunities for all categories of employees.
- The greater awareness of the importance of sound personnel management at all levels of the organisation.
- The provision of a tool for evaluating the effects of alternative personnel policies.
There is an explicit link between human resource planning and other organisational functions such as strategic planning, economic and market forecasting and investment planning. Human resource planning is therefore a corporate level activity and relies on the accuracy of firm future plans and direction – the most important aspect of plans being the resource utilisation at operations level.
The Stages in Human Resource Planning
Stocktaking is about identifying those variables that influence organisational operations.
External environment – labour market, Government policies, education/training, technology.
Internal environment – Corporate objectives, sales targets, profits, product or service, HR systems, work practices, employee development, workforce profile.
The forecasting stage involves forecasting both the supply and demand for labour. This is a difficult task as it involves predicting how many employees will be needed into the future (based on past trends and likely future business functioning) and determining where future employee are likely to be obtained (supply analysis). Planning therefore is a speculative exercise relying heavily on past experience and the development of hypotheses concerning the future.
Besides the external influences which determine the supply of labour to the organisation there are factors internal to the organisation which affect the supply of labour e.g. natural wastage, absenteeism and age profile of the workforce; these factors can be analysed using quantitative methods,
To calculate natural wastage or labour turnover:
Number of employees who leave in one year X 100 = %
Average number employed in that year
To calculate absenteeism:
Total absence (days/hours) in a particular period X 100 = % Total possible work-time (days/hours)
To calculate the age profile:
Plot the age levels of employees on a graph against roles and responsibilities. This will highlight bottlenecks in issues such as the promotional system or retirement effects on the organisation.
Externally the organisation will examine unemployment trends, levels of vocational training, and the appropriateness of college courses. Other influences could be government legislation, the local skills base.
Once the supply and demand analysis has been completed the organisation can determine where the imbalances occur if any and the range of options available to it. If a recruitment drive is necessary then the costs and benefits associated with this will be examined before a strategy is drawn up.
Once the human resource plan is drafted the company implements its decisions and the cycle of analysing the organisations human resource demands begins again.
Recruitment and Selection/Process
The process of recruitment and selection is concerned with job analysis, sourcing the candidates, assessing the possible candidate’s suitability, and executing an induction programme.
Conducted properly the recruitment and selection process should match peoples’ capabilities and career expectations with the demands and rewards offered by the organisation.
It is appropriate therefore to distinguish between the two phases of recruitment (attracting candidates to the vacancy) and selection (choosing the right candidate).
When an organisation makes the decision to fill a vacancy through recruitment the first stage in the process is conducting a comprehensive job analysis. The job analysis may have already been determined at the human resource planning stage. The job analysis forms the bases for developing three critical recruitment and selection tools.
The job description outlines to the potential employee the details of terms and conditions of employment.
The elements of a job description are,
- Job title
- Reports to
- Main tasks
- Staff responsibilities
- Rewards and conditions
Job descriptions are broad statements of purpose, scope and duties and are critically important when attracting potential employees by means of vacancy advertisements.
The person specification is a description of the ideal person to fill the job and includes details of qualifications, knowledge, specific skills, and aptitudes, experience and personal attributes that are required to do the job.
A person specification is important for a number of reasons, firstly it describes the kind of person needed to fill the vacancy, secondly it determines where advertising should be focused (local paper or college graduates), thirdly it facilitates short-listing of candidates. It is essential therefore that the person specification matches the job description.
Terms and conditions of employment
Terms and conditions are often included in the job description. They specify the effort reward relationship and include hours to be worked, methods of payment, job entitlements (holidays, bonuses) and other benefits. The terms and conditions are important in attracting potential candidates and should conform to current employment legislation.
The recruitment process is important for three reasons:
- To attract a pool of suitable applicants for the vacancy,
- To deter unsuitable candidates from applying,
- To create an important image of the company
Recruitment normally involves placing an advertisement. However there are alternative methods available to a company, below are some examples.
- Internal recruitment,
- Supervisor/Manager recommendations,
- Search consultants,
- Unsolicited enquiries,
- Government training schemes,
- Professional referrals,
Screening and Short-listing
Once applications have been received companies must devise ways of analysing their suitability for short listing. At this stage the person specification becomes a vital tool for identifying suitable and unsuitable applicants.
The following matrix can facilitate in making an informed decision regarding an applicant’s suitability.
Terms and conditions of employment
Terms and conditions are often included in the job description. They specify the effort reward relationship and include hours to be worked, methods of payment, job entitlements (holidays, bonuses) and other benefits. The terms and conditions are important in attracting potential candidates and should conform to current employment legislation.
The recruitment process is important for three reasons:
- To attract a pool of suitable applicants for the vacancy,
- To deter unsuitable candidates from applying,
- To create an important image of the company
Recruitment normally involves placing an advertisement. However there are alternative methods available to a company, below are some examples.
- Internal recruitment,
- Supervisor/Manager recommendations,
- Search consultants,
- Unsolicited enquiries,
- Government training schemes,
- Professional referrals,
Screening and Short-listing
Once applications have been received companies must devise ways of analysing their suitability for short listing. At this stage the person specification becomes a vital tool for identifying suitable and unsuitable applicants.
The matrix is used to eliminate those applicants who fail to achieve minimum criteria and so a short list is compiled.
The Selection Interview
Although every effort is made to match the person specification to the job description it is important to note that the process of interviewing is not without bias or error on the part of the interviewer.
From research conducted by Anderson and Shakleton (1993) a number of the more common errors and biases have been classified.
- The expectancy effect: Interviewers can form a positive or negative impression of candidates based on biographical information presented in an applicant’s CV (see Glossary) and this can affect subsequent decisions.
- The information seeking bias: Interviewers seek information from the interviewee that confirms their initial expectations.
- The primacy effect: Interviewers may form impressions about a candidate’s personality within the first few minutes based upon the comments of the interviewee.
- Stereotyping: Forming opinions on an interviewee based on nationality, sex, religion.
- Horn/halo effect: Based upon information, the interviewer may look favourably or unfavourably on a candidate.
- Contrast and quota effects: Interviewers may be influenced by the decisions made on earlier candidates and by pre-set quotas.
It is important therefore to have a balanced interview panel with the experience and knowledge to put the appropriate choice of questions to the interviewee.
Types of interview questions
- Direct or closed: these yield short answers such as ‘yes’ or ‘no’, important for getting facts.
- Leading: These lead the interviewee to give the answer the interviewer wants.
- Probing and developing: pursue a line of questioning by building on a question already asked.
- Open-ended: These encourage full answers and allow the interviewee to develop the response.
- Reflecting back: Relating to an earlier question the interviewee can restate the response.
A very important element of the interview process is to find out personal qualities to ensure the candidate can fit in with the culture of the organisation. A “fish out of water” may simply flounder and be costly both to the firm as well as to the candidate/employee.
When the selection decision is made the unsuccessful candidates are notified by mail and thanked for the interest in the vacancy. When the successful candidate accepts the offer it is customary to have a period of induction, probation and training in order to allow the new recruit become familiar with the workings, policies and procedures of the organisation.
If the immediate supervisor cannot resolve a conflict, the employee may resolve the problem by going through a grievance procedure. Some organisations have standard procedures which are communicated to the employee during the induction programme or on company bulletin boards.
Disciplinary Action and Termination of contract of employment
When work performance or behaviour is unacceptable it is the supervisor’s responsibility to address the problem and to advise on appropriate performance. If the employee does not correct the problem, they face disciplinary action. The employee should clearly understand the disciplinary process. Such procedures usually apply only to employees past their probation period. Those still on probation may be dismissed without warning.
Disciplinary procedures, like grievance procedures, vary from one employer to another and where there are more than ten employees will be found in the internal regulations (Article 138-139 of the law no 13/2009 published of 27 May 2009
The following steps are recommended:
Oral warning. The supervisor warns the employee that his/her performance is not acceptable. This applies only to less serious problems. Serious problems such as drinking or drug use probably will result in immediate suspension or dismissal. The oral warning goes into the employee’s personnel record but is removed later if no further problems arise.
Written warning. Repeated performance problems result in a written warning. This step takes place after an oral warning is issued. A written warning may become a permanent part of the personnel record.
Suspension. Suspension means the employee is not allowed to work for a short period of time, sometimes three to five days. This is unpaid time. The disciplinary action becomes a permanent part of the personnel record.
Dismissal. The final step of any disciplinary process is dismissal. This means the organisation won’t tolerate poor job performance any longer. Dismissal becomes a permanent part of the personnel record. It also means that any future employer who contacts the former employer may be told that the employee was dismissed from their job.
The management of performance is a key variable in the effectiveness and growth of an organisation.
In the existing competitiveness of the business environment it is necessary to carefully monitor performance if organisations are to realise improvements in productivity and growth.
As organisations undergo continuing change through de-layering, increasing spans of control, devolution of accountability and responsibility and expectations of employees there is an increasing importance on the abilities of companies to manage the performance of their staff.
Performance management is essentially a strategic management technique that links the business objectives and strategies to individual goals, actions, performance appraisal and rewards through a clearly defined process.
It has always been the function of management to monitor the resources of the company towards the success of the organisation. In the past this was generally informal and ad hoc. Now there is an increasing use of a formal process of a continuous and integrated approach of appraising rewards and performance. Terms such as performance evaluation, job appraisal, performance assessment or review are used and interchanged when determining an individual’s performance against organisational objectives.
When defining performance appraisal it is essentially a companywide activity that is concerned with the continuous assessment and review of performance against predetermined strategic objectives.
Performance management is very similar to Management by Objectives MbO since both systems set objectives however MbO was chiefly concerned with the performance of managers whereas performance appraisal applies to all staff.
According to Armstrong (1995) Performance management can be regarded as a flexible process and offers a conceptual framework of the performance management cycle.
The Benefits of Performance Appraisal
Benefits to managers
- Opportunity to learn about employees’ hopes, fears, job and future,
- Chance to reinforce goals and priorities,
- Mechanism for measuring changes in employee work performance,
- Opportunity to motivate staff,
- Clarification of overlap in roles and responsibilities,
Benefits to employees
- Opportunity to receive feedback on performance,
- Opportunity to communicate views,
- Opportunity to discuss career,
- Recognition of tasks carried out well and objectives achieved,
- Basis for identifying training needs,
Benefits to the company,
- Assistance with succession planning and identification of future potential,
- Facilitation of human resource planning,
- Method of harmonising business objectives and employee performance,
- Method of communicating with employees,
- Opportunity to improve performance,
Source: Evenden and Anderson (1992)
In spite of the benefits of performance appraisal it is essential that management take cognisance of organisational policies, systems and design for PA to be successful.
Methods of Performance Appraisal
The following are methods of appraising staff,
- Ranking: Appraiser rates the employee’s performance and behaviour against predetermined scale.
- Ranking: Appraiser ranks workers from best to worst based on specific characteristics or overall performance,
- Paired comparison: Two workers compared at a time and a decision made on which is superior, resulting in a final ranking for the entire group,
- Critical incident: Appraiser observes incidences of good and bad performance. These are used as a way of judging performance.
- Freeform: general free written appraisal by appraiser,
- Performance or objective oriented systems: Appraiser determines if job targets have been met,
- Assessment centre: Appraisees undergo a series of tests or interviews by trained assessors,
- Self assessment: Appraisees assess themselves using a predetermined set format or structure,
Styles of Appraisal Interview
There are three interviewing styles associated with appraisal interviews,
- Tell and sell: direct and authoritative in nature this involves the manager telling the appraisee how they have evaluated their performance and the fairness of the assessment. This one directional approach allows little feedback from the employee.
- Tell and listen: similar to above but some attempt is made to actively get the employee to respond to the assessment.
- Problem solving: Here the manager asks the employee to discuss performance against agreed targets and to express any problems that might be affecting work behaviour.
When conducting the interview always remember to:
Begin the interview with a clear statement of purpose thereby reducing ambiguity.
- Attempt to establish a rapport with the employee.
- Discuss the main tasks and responsibilities undertaken by the employee and invite comments, focus on the objectives of their job. Ensure a balanced discussion takes place.
- Encourage the employee to talk frankly about difficulties they are having with their job.
- Encourage the employee to develop self-analysis and self-discovery.
- Bring the interview to a close by summarising what was discussed and what is agreed for the future appraisal period.
What is Leadership?
- “The ability to influence a group toward the achievement of goals”. (Robbins:1998).
- Leadership involves an ‘influence’ process – whether that is coercive or non-coercive.
- “a relationship through which one person influences the behaviour of other people” Mullins (1985)
Why is leadership important to organisations?
- A good leader is essential for effective business and organisational performance.
- The ability to provide effective leadership is one of the most important skills a manager can possess.
- Leadership is a widely studied management subject yet there remain many unanswered questions about the leadership phenomenon.
Krech et al (1962) identified fourteen leadership functions which demonstrate the complexity of leadership.
- Policy maker,
- Symbol of the group,
- External group representative,
- Substitute for individual responsibility,
- Father figure,
- Arbitrator and mediator,
- Purveyor of rewards and punishment,
- Controller of internal relations.
Trait (or Qualities) Theories – Great Man Approach
Trait theories argue that leadership is innate. Leaders are born not made; they attempt to identify a unique set of characteristics that make all leaders great. The theory is simple – find out what makes leaders great and select future leaders who exhibit the same traits. Early research only found a minimal relationship between personal traits and leader success.
Behavioural Theories of Leadership, (Style) What leaders do
The difference between Trait Theories and Behavioural Theories lies in the underlying assumption that if Trait Theories were valid then leadership is basically inborn. On the other hand if there were specific behaviours that identified leaders, then we could teach leadership.
Ohio State University (Stogdill and Coons 1957)
One of the earliest studies into leadership behaviour began in the 1940’s to classify definitions of leadership. In surveying leaders, they identified two categories – Initiating Structure Style and Considerate Style.
- Initiating structure: (Task oriented) leader defines own role and that of followers, establishes formal lines of communication and determines how tasks are to be performed.
- Considerate style: (Socio-emotional) leader focuses on trust/rapport with followers and attempts to establish a warm, friendly, and supportive climate. Considerate style managers provide open communications, develop teamwork and are concerned for their subordinates’ welfare.
The researchers presented the two dimensions in a matrix as follows,
Leaders in HI/HC (see table below) tended to achieve subordinate performance and satisfaction. However this assessment of the theory is now disputed.
The aim was to discover what leaders did in particular situations that encouraged others to follow them.
- They discovered that leadership is multidimensional behaviour
- Effective leaders exhibit different behaviours in different situations
Research has demonstrated that both of these behaviours are necessary at different times for leader effectiveness (surrogate leader)
These studies occurred about the same time as the Ohio Studies. The objective of the research was to locate behavioural characteristics of leaders that appeared to be related to measures of performance effectiveness. The most effective leaders were those who focused on the human needs in order to build effective teams and thereby improved performance.
The Michigan Studies identified two classifications of leaders – Employee oriented (interpersonal) and Production oriented (technical).
Employee oriented leaders established high performance goals and displayed supportive behaviour towards subordinates. The less effective job or production oriented leaders tended to be less concerned with goal achievement and human needs in favour of meeting schedules, keeping costs low and achieving productivity.
The Blake and Mouton Managerial/Leadership Grid
The Blake and Mouton Managerial/Leadership grid provides a framework for understanding and applying effective leadership. The grid is a two-dimensional leadership theory that measures a leader’s concern for people and production. Each axis on the grid is a 9-point scale, with 1 meaning low concern and 9 high. Concern for production pertains to getting results and achieving objectives with little regard for the people involved.
Concern for people emphasises healthy interpersonal relationships in the work group.
Team management (9.9) is often considered the most effective style and is recommended for managers because organisation members work together to accomplish tasks. The leader leads by positive example and works to foster a team environment in which all team members can reach their highest potential both as team members and as people. The leader encourages the team to reach team goals as effectively as possible and works to strengthening the bonds among the members.
Blake and Mouton argue that team management is always the best style to adopt since it builds on long-term development and trust. In order to be truly effective, this style of leadership requires an appropriate cultural fit; i.e. the value set of the organisation must seek to support this style of leadership.
Country club management (1.9) occurs when primary emphasis is given to people rather than work outputs – low task, high relationship: This leader uses predominantly reward power to maintain discipline and to encourage the team to accomplish its goals. Conversely, he/she is almost incapable of using the more punitive coercive and legitimate powers. This inability results from the leader’s fear that using such powers could jeopardise his/her relationships with the team members.
Task management (9.1) occurs when efficiency in operations is the dominant orientation. It is usually associated with an authoritarian Leader – high task, low relationship. People who get this rating are very much task oriented and are hard on their workers (autocratic). There is little or no allowance for co-operation or collaboration. Heavily task oriented people display these characteristics: they are very strong on schedules; they expect people to do what they are told without question or debate; when something goes wrong they tend to focus on who is to blame rather than concentrate on exactly what went wrong and how to prevent it; they are intolerant of what they see as dissent (it may just be someone’s creativity) so it is difficult for their subordinates to contribute or develop.
Impoverished management (1.1) means the absence of a management philosophy; managers exert little effort towards interpersonal relationships or work accomplishment. This style of leader refers to a low task, low relationship. This person might use a “delegate and disappear” management style. Since he/she is not committed to either task accomplishment or maintenance; he essentially allows the team to do whatever it wishes and prefers to be detached from the team process by allowing the team to suffer from a series of power struggles.
Middle-of-the-road management (5.5) reflects a moderate amount of concern for both people and production.
Clearly the top right hand box is where organisations should be in terms of team leadership.
Modern Leadership Theories – Contingency/ Situational Approaches
The contingency theory of leadership states that the leader, to be effective, must adjust his or her style in a manner consistent with critical aspects of the organisational context, such as the nature of the task, and attributes or skills of employees carrying out the work”.
One of the first leader-situation models was developed by F E Fiedler (1967). His contingency model was based on studies of a wide range of group situations and concentrated on the relationships between leadership and organisational performance. The basic premise is to match the leader’s style with the situation most favourable to achieving success.
Fiedler developed a least preferred co-worker (LPC) scale which measures the ratings leaders gave to the person whom they could work with least well.
Pleasant ——————————————————————————- Unpleasant
8 7 6 5 4 3 2 1
Fiedler suggests that leadership behaviour is dependent upon the favourability of the leadership situation.
There are three main variables which determine the favourability of the situation and which affect the leader’s role and influence
- Leader-member relations: the degree to which the leader is trusted and liked and the willingness to follow the leader.
- The task structure: the degree to which the task is clearly defined for the group and the extent to which it can be carried out.
- Position power: the power of the leader by virtue of his/her position in the organisation. Does the leader have the power to plan and direct the work of subordinates.
From these three variables Fiedler constructed eight combinations of group-task situations, from where the situation is favourable (good leader member relations) to very unfavourable (poor leader member relations), etc
The leader’s effectiveness is determined by the interaction of the leader’s style of behaviour and the favourableness of the situational characteristics. The most favourable situation is when leader-member relations are good, the task is highly structured, and the leader has a strong position power.
Research on the contingency model has shown that task-oriented leaders are more effective in highly favourable (1, 2, 3) and highly unfavourable situation (7, 8), whereas relationshiporiented leaders are more effective in situations of intermediate favourableness (4, 5, 6).
Fiedler is suggesting therefore that leadership style will vary as the favourability of the leadership situation changes.
Situational Theory – Hersey and Blanchard
The situational theory is an extension of the behavioural theory. This theory concentrates on the importance of the situation in the study of leadership.
According to situation theory a leader can adopt one of four leader styles:
- The telling style reflects a high concern for tasks and low concern for people. This is a very directive style of leadership.
- The selling style is based upon a high concern for both people and tasks. With this approach the leader explains decisions to followers.
- The participating style shows a high concern for people and relationships and a low concern for production tasks. The leader shares ideas with subordinates and encourages participation.
- The delegating style reflects a low concern for relationships and tasks. The leader provides little direction and no subordinate support.
The essence of the Hersey and Blanchard theory is to select a leader style that is appropriate for the readiness level of the subordinate – their education, skill level, attitude and selfconfidence.
The Readiness (R) level of the subordinates is outlined below
R1 – low follower readiness – refers to low ability and low willingness of followers i.e. those who are unable and insecure. Low skill or poorly educated workers require close supervision. R2 – low to moderate follower readiness – refers to low ability and high willingness of followers i.e. those who are unable but confident
R3 – moderate to high follower readiness – refers to high ability and low willingness of followers i.e. those who are able but insecure. The worker may lack confidence.
R4 – high follower readiness – refers to high ability and high willingness of followers i.e. those who are both able and confident. Professional and highly skilled workers require minimal direction.
The Path-Goal theory of leadership suggests that the performance of the subordinates is affected by the extent to which the manager satisfies their expectations. Path-Goal theory holds that subordinates see leadership behaviour as a motivating influence.
House identified four main types of leadership behaviour,
- Directive leadership: is letting subordinates know what is expected of them and giving them specific instructions.
- Supportive leadership: involves a friendly and approachable manner and displaying concern for their needs, treats everyone as equals.
- Participative leadership: involves consulting with subordinates and then evaluating opinions.
- Achievement oriented leadership: involves setting challenging goals for subordinates. Leader has high standards of excellence and seeks continuous improvement.
Two important situational contingencies in the Path Goal theory are,
- The personal characteristics of group members such as skills, needs and motivations. This can be modified through training or coaching.
- The work environment which includes the task structure, the nature of the formal authority and the work group itself. The amount of power exercised by managers and the extent to which rules constrain employees’ behaviour.
Path-goal theory suggests that different types of behaviour can be practised by the same person at different times and in varying situations.
Substitute for Leadership
The final contingency theory contends that situation variables can be so powerful that they substitute or neutralise the need for leadership. This approach is most common in highly professional subordinates who know how to do their tasks and do not need a leader to initiate structure for them and tells them what to do. A substitute for leadership makes the leadership style unnecessary or redundant. The neutraliser counteracts the leadership and prevents the leader from displaying certain behaviours. E.g. where the leader’s situation or power is removed from the worker, the leader’s ability to give direction is greatly reduced.
In the table below the situation variables are the group, task and the organisation itself, e.g. where subordinates are highly professional, both leadership styles are less important. In the context of task characteristics, highly structured tasks substitute for task oriented leadership and satisfy task substitutes for people oriented style.
The main value of the table below is that it avoids leadership overkill. Leaders should adopt a style that suits the organisation situation.
Differentiating Managers from Leaders
The McKinsey 7S framework helps us to distinguish between the aspects of managing an organisation that relate to managers and those that relate to leaders. Managers assume the ’hard’ aspects and leaders assume the ‘soft’ In reality the ideal manager will be able to combine both ‘hard’ and ‘soft’ aspects.
Managerial Aspects (3) Style, Staff, Skills, Shared Goals. = ’Soft’ The 3Ss below are described as ‘Hard Ss’:
Leadership Aspects (4) Systems , Structure, Strategy = ‘Hard’
- Strategy: The direction and scope of the company over the long term.
- Structure: The basic organisation of the company, its departments, reporting lines, areas of expertise and responsibility (and how they inter-relate).
- Systems: Formal and informal procedures that govern everyday activity; covering everything from management information systems through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc).
The 4Ss below are less tangible, more cultural in nature and were termed ‘Soft Ss’ by McKinsey:
- Skills: The capabilities and competencies that exist within the company. What it does best.
- Shared values: The values and beliefs of the company. Ultimately they guide employees towards ‘valued’ behaviour.
- Staff: The company’s people resources and how they are developed, trained, and motivated.
- Style: The leadership approach of top management and the company’s overall operating approach.
In combination they provide another effective framework for analysing the organisation and its activities. In a marketing-led company they can be used to explore the extent to which the company is working coherently towards a distinctive and motivating place in the mind of consumer.
Differentiating Management from leadership,
WG Bennis and B Nanus (1985), “Managers do things right’ Leaders do the right things’?
Management is getting things done through people to achieve stated organisational goals.
Styles of Leadership
The Authoritarian Leadership Style
The focus of power is with the manager, and the democratic style is where the focus is more with the group. There are of course many dimensions with in these broad headings with each having their advantages and disadvantages.
Charismatic and visionary Leadership
Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviours.
Studies have focused on those behaviours of charismatic leaders from those of noncharismatic leaders.
Warren Bennis identified four competencies displayed by charismatic leaders:
- compelling vision of purpose,
- the ability to communicate the vision to others,
- demonstrated consistency and
- focus in pursuit of vision,
This type of leader knows their own strengths and has capitalised on them.
Other competencies include shaping the corporate value system for which everyone stands and also trusting subordinates and earning their trust in return.
Charismatic leaders tend to be less predictable than transactional leaders. They create the atmosphere of change and may be obsessed with visionary ideas.
Transactional /Transformational Leadership
Transactional leaders motivate their followers in the direction of established goals by clarifying role and task requirements. They provide appropriate rewards and try to meet the social needs of subordinates. Transactional leaders excel at management functions.
Transformational are similar to charismatic leaders. However they pay attention to the concerns and developmental needs of followers; they change followers’ awareness of issues by helping them to look at old problems in new ways.
Using Power and Influence
Power is the potential ability to influence others. Influence is the effect a person’s actions have on the attitudes, values, beliefs or behaviours of others. Within an organisation there are typically five sources of power; the first 3 are position power, the second two are personal power.
- Legitimate power – comes from the formal management position.
- Reward power – comes from the authority to bestow rewards on other people.
- Coercive power – is the authority to punish or recommend punishment.
- Expert power – resulting from the leader’s special knowledge or skill regarding the tasks performed by the followers.
- Referent power – comes from the leader’s personal characteristics that command followers, identification, respect and admiration.
Post Heroic Leadership for Turbulent Times
As the concept of leadership continues to grow and change due to the turbulent times we live in, the focus for leadership is changing to a form known as the “post heroic leadership” which goes un-noticed and often un-rewarded.
The post heroic leader is mostly associated with humility rather than the brash forms of leadership. These are leaders who display characteristics of being unpretentious and modest.
There are five approaches to this form of leadership,
- Servant leadership: this is a leader who works to fulfil the subordinate needs and goals as well as achieving the organisational mission.
- Level 5 leadership: is the concept of transforming companies from merely good to great organisations. A key characteristic of a Level 5 leader is the lack of ego and the giving of credit to others for successes.
- Interactive leadership: is a leadership style characterised by values such as inclusion, collaboration, relationship building, and caring.
- E-Leadership: is a form of leadership where the subordinate works remotely. Effective e-leaders are set clear goals and timelines and are very explicit about how people will communicate and how they are co-ordinated.
- Moral leadership: here the leader is tasked with distinguishing right from wrong and choosing to do right in the practice of leadership.
Information and Technology
Information systems and the information technology (IT) that supports systems are now a fundamental force shaping and reshaping the business world – perhaps the single most important force for driving change in the late 20th and early 21st century.
Indeed information management and knowledge creation are issues at the front of managers’ minds as a source of improved competitiveness.
Very significant sums of money are being spent on IT and businesses are rightly becoming concerned about getting ‘value for money’ from their investment. As the IT environment becomes more complex, costs and benefits are harder to define and measure. ‘Technology developments and advanced application systems put pressure on the methods which enterprises use to make decisions about the allocation of resources to IT.’
The increased complications of defining costs and benefits and at the same time the increased sense of urgency attaching to decision-making about IT due to its competitive implications pose hard management questions:
‘Are we spending enough or too much on IT?’
Information and Product/ Service Features
The enhanced capabilities of IT are enabling organisations to provide product and service features that are valued by customers through, • Lower prices – such as financial services.
- Improved pre-purchase information.
- Easier and faster purchasing processes.
- Shorter development times for new features.
- Product or service reliability and diagnostics.
- Personalised products or services.
- Improved after sales services.
Information and Competitive Performance
For many organisations information processing and market knowledge are of paramount importance. The concept of Data Mining is the process of sorting through large amounts of data and picking out relevant information that will give the business the capability to achieve a competitive advantage. Data mining is used to find trends, patterns and connections in raw data to inform and improve an organisation’s performance e.g. many service industry organisations analyse their customer behaviour in terms of spend and frequency of purchases in the development of products.
Information and Robustness
Information processing can influence the robustness of an organisation’s capabilities e.g. increased performance adding value to activities or a competency that competitors find difficult to imitate.
The strategic role of information will need to be different depending on the way the organisation positions its products or services in the market. This is particularly true where organisations have a collection of business units pursuing different strategies. There must be the information capability to support all SBU’s but in different ways,
- Routinisation (creating a routine) is a method of moving customers to self-service thereby lowering costs e.g. checking in your own baggage at the airport.
- Mass Customisation – “producing goods and services to meet individual customer’s needs with near mass production efficiency”. (Tseng & Jiao – 2001). In other wordsproducts are produced with “optional” added features at lower cost. This is most commonly used with electronic goods and cars.
- Customisation – potential customer can access information on products prior to purchase and choose the one he/she considers best. This benefits both the customer and the organisation.
- The IT Laggards – those individuals that do not value IT based systems will be more comfortable with traditional information methods e.g. face to face interaction.
Managing technology is concerned with the relationship between technology and strategic success. Technological development can take several forms each of which may give an organisation an advantage in a different way:
Some of the factors that shape an organisation’s technological use are size, country, industry or products. These different technological developments may have different implications for strategy,
- Supplier dominated developments – how technology has transferred the agri-business by using advances in pesticides, harvesting machinery and gene-modification.
- Scale intensive developments – Such as complex manufacturing systems in automobile and other sectors where advantage is gained through economies of scale.
- Information intensive developments – such as financial services, e-tailing (e.g. Amazon).
- Science based developments – the organisation monitors academic research in the pursuit of acquiring innovative strategic mechanisms.
Technology and Strategic Capability
Core competencies are unique to organisations and are not easily copied; but technology by itself can be easily imitated. There are exceptions to this especially where technology has been patented but technology also has the potential to reduce core competencies and the organisation should be aware of some of the following issues associated with technology,
- Companies that tie future development to a single technology may run the risk of that technology becoming obsolete e.g. encyclopaedia publishers selling their product only in book form.
- Core competencies may be found in processes or linking technologies rather than in the technology itself.
- Dynamic capabilities, whilst technological, may give advantage but this may be short lived if it is not underpinned with adequate processes. Organisations must be careful how they develop technology if it is not to be copied by competitors.
An important classification tool for organisations is the McFarlan and McKenney IT Grid (1983). It is not the only available classification approach, but it is a straightforward and effective one. Using the Grid system, propositions can be identified according to certain basic characteristics.
The grid has four quadrants built around two management questions (see below).
How important does management feel the current IT systems are to the business?
How important does management think future developments in IT will be for the business; e.g. the impact IT will have on how it operates?
Depending upon the response to these questions the business can be placed in the four quadrants as follows,
Low Current: Low Future Impact. IT has little relevance and simply supports existing business.
Low Current: High Future Impact. It will feature more on the business agenda in the future. Management believes IT will have a major impact on the business in the future and is in turnaround e.g. where supermarkets are developing “e-tailing” and e-commerce is reshaping how customers and suppliers are conducting business.
High Current: Low Future Impact. Here IT plays a factory role and is important in its day to day operations. The maintenance of current systems is important for business continuity.
High Current: High Future Impact. Here IT plays a crucial role from a current and future perspective. IT has a strategic significance as it may sustain or improve competitive advantage.
The McFarlan & McKenney Strategic Grid
Whilst the grid is not perfect, it can create a valuable insight into the nature of system requirement for a business.
Professor Earl’s nine reasons for an IT Strategy
Professor Earl of the London School of Economics (LSE) provides a useful list of nine reasons as to why a company should have an IT strategy. Briefly, they are as follows:
- IT involves high costs.
- IT is critical to the success of many organisations.
- IT is now used as part of the commercial strategy in the battle for competitive advantage.
- IT is required by the economic context (from a macro-economic point of view).
- IT affects all levels of management.
- IT has meant a revolution in the way information is created and presented to management.
- IT involves many stakeholders, not just management, and not just within the organisation.
- The detailed technical issues in IT are important.
- IT requires effective management, as this can make a real difference to successful IT use.
Technology in the Value Chain
A frame work that can help identify strategic information systems is the Value Chain. It views the firm as a chain of basic activities, each of which can add value to its products and services and thus add a margin of value or competitive advantage.
The value chain concept can help managers decide where and how to improve the strategic capabilities of information systems technology. Information systems that can improve operational efficiency, promote innovation, and build strategic information resources.
Examples of strategic information systems (SIS) are automated warehousing (inbound logistics), online ordering systems (EDI) (electronic data interchange outbound logistics), CAD (computer aided design) and CAM (computer aided manufacturing).
Developing or Acquiring Technology
There are three basic approaches to technological development in an organisation,
In-house developments – may be favoured if the technology is key to competitive advantage or the organisation is in pursuit of first mover advantage.
Alliances – may be appropriate for threshold technologies rather than competitive advantage e.g. an organisation may want to collaborate with a supplier or distributor to add value to their supply chain.
Acquisition of current players or rights – this gives an organisation faster access to the technology and also reduces the learning time. It can also be useful if the knowledge or technology is complex.
However an organisation must have a good understanding of its needs and the capabilities of the technology.
The choice between in-house, acquisition or alliance will depend upon the technology life cycle of the business. The more mature and larger the business the more likely it is to develop in-house.
Information Technology & Knowledge Management
Data versus Information
Data – Raw un-summarised and unanalysed facts and figures.
Information – Data that have been converted into a meaningful and useful context for the receiver.
The job of transferring data into useful information has resulted in the creation of the role of the CIO – Chief Information Officer.
The CIO combines knowledge of technology with the ability to help managers identify their information needs and how the organisation can use its information technology capabilities.
Types of Information Systems
Two Broad Categories of Information Systems
- Operations Information Systems – These support the information processes related to the business day to day operations e.g. transaction action process systems (Customer sales). They help generate reports, customer statements and pay slips.
- Management information Systems – These are systems that provide information and support for effective management information decisions, normally in the form of reports.
Types of MIS:
- DSS – Decision Support Systems
- EIS – Executive Information Systems
DSS – interactive computer based information systems that use decision models and data bases to assist decision making. Pose what if type questions and test alternative scenarios.
EIS – information systems that facilitate strategic decision making and facilitate the querying of complex systems and data in a timely manner.
Executives can now use information systems that allow them to view a “Dashboard” of key performance indicators (KPI) at their desk top.
Organisations use Groupware (software) to connect people or management teams across organisations or even the globe. Groupware facilitates the sharing of information, documents and communications.
Positive Implications of Information Systems
Improved Employee Effectiveness – provides employees with information on customers, markets and competitors.
Increased Efficiency – Speeds up work processes, cutting costs and increasing efficiency.
Empowering Employees – IT allows information to be disseminated to employees at lower levels in the organisation that was not possible before.
Enhanced Collaboration – IT enhances collaboration within organisations and with customers, suppliers and partners.
Information Overload – This occurs where organisations collect and disseminate large volumes of information and employees may struggle to make sense of it all.
The role of the CIO is to ensure the workers get the right information when needed.
Knowledge Management and its Importance to Strategy
We define knowledge as a combination of information and processes whereby the processes relate to an array of information so as to promote rational behaviour and achieve desired goals.
Knowledge management is defined in terms of three components: Information, People and IT
Two Different Perspectives on Knowledge Management
- The technology-centred perspective; The main promoters are the business process re-engineers and the e-specialists who believe that knowledge equals objects that can be encoded, stored, transmitted and processed by IT systems
- The people-centred perspective is that of the organisational theorists with backgrounds in psychology, human development, cognition, organisational behaviour, group dynamics and sociology.
Knowledge is the process of systematically gathering knowledge, making it widely available throughout the organisation and fostering a culture of learning.
Two technologies facilitate Knowledge Management
- Business intelligence software.
- Corporate Intranets or networks.
Business intelligence software combines related pieces of information to create knowledge. However much of organisational knowledge resides in peoples’ heads.
Business Intelligence (BI): Organisations store vast amounts of Data (Data Warehousing). The activity of analysing this data is data mining.
BI refers to the analysis of business data to identify patterns and relationships that might be significant e.g. profitable product lines or market segments.
Intranets are dedicated networks for the sharing and storing of information within an organisation. Intranets contain knowledge management portals which are a single point of access for employees to access multiple sources of information.
Many organisations’ departments share information using a document sharing management system such as Sharepoint.
Knowledge Management – A Firm’s Intellectual Asset (from Dess, Lumkin & Eisner, Strategic Management)
Today more than 50% of the gross domestic product (GDP) in many developed economies can be knowledge based i.e. it is based on intellectual assets and intangible people skills. In the knowledge economy wealth is increasingly created through the effective management of knowledge workers instead of efficient control of physical and financial assets. The growing importance of knowledge coupled with the move by labour markets to reward knowledge work tells us that someone who invests in a company is in essence buying a set of talents, capabilities, skills and ideas – intellectual capital not physical or financial resources.
Knowledge Management – Developing a Learning Organisation (from Dess, Lumkin &
Eisner, Strategic Management)
Successful learning organisations create a proactive approach to the unknown; they actively solicit the involvement of employees at all levels and enable all employees to use their intelligence and apply their imagination. A learning organisation environment involves organisational commitment to change, an action orientation and applicable tools and methods.
A strategy for empowering people encompasses the following,
- Start at the top,
- Clarify the organisation’s mission, vision and values,
- Specify the tasks, roles, and rewards for employees,
- Delegate authority,
- Hold people accountable for results.
Effective organisation must also redistribute information, knowledge and rewards e.g. empowering workers to act as customer advocates in the pursuit of customer satisfaction.
To be this effective staff will need to be trained and this will include communicating business and financial information.
Knowledge Management Definitions
Human Capital – Individual knowledge, capabilities, skills and experience of a company’s employees and managers.
Social Capital –The network of relationships that individuals have both inside and outside the organisation.
Explicit knowledge – Knowledge that is codified, documented, easily produced and widely distributed.
Tacit knowledge – Knowledge that is in the minds of the employees based on their experience and background.
Knowledge Asset – It is some combination of context sensing, personal memory and cognitive processes.
Intellectual Capital Management – Intellectual capital includes assets such as brands, customer relationships, patents, trademarks and, of course, knowledge.
Knowledge Economy – An economy where wealth is created through the effective management of knowledge workers instead of by efficient control of physical and financial assets.
MANAGING THE CHANGE PROCESS
The management of change has become a top priority for all managers irrespective of the organisation.
Change is occurring at a far greater pace than ever before.
Hussey (1995), argues that change is one of the most critical aspects of effective management and that the turbulent business environment in which most organisations operate means that not only is change becoming more frequent, but that the nature of change is becoming more complex and the impact of change is often more extensive.
Factors Forcing Change
Globalisation: Domestic markets open to foreign competitors/investors which provide more intense competition; such as coffee plantations owned by overseas investors and international mobile ‘phone operators (e.g. MTN).
Technology Developments: The most dramatic changes have occurred in the area of Information Technology. Consider Teleworking, MIS, FIS, CAD, CAM. These have made the control of complex operations much easier.
The changing nature of the labour force
The world labour force is changing significantly both in terms of composition and values and expectation.
Organisations in the developed world have an ageing work force which is more costly than those workers in the developing countries with a young work force.
Unless these costs are met with higher productivity developed countries will become less competitive.
There has also been an increase of women in the work force, women are remaining in the workforce after they get married or returning to the workforce when their children have reached school going age .
A move towards knowledge-based industries and organisations will mean that different people and indeed different forms of organisation will be required.
Changes in structure, technologies and products do not happen on their own and any changes in these areas require changes in people also. Employees may have to adopt new collaborative ways of thinking and acting while managers have to be willing to give up control and empower teams to make decisions and take action. Groups of sole traders such as craft-ware makers coming together to form a co-operative will individually have to change as well as adopt new technologies to communicate and inform themselves as well as their markets/customers whether at home or abroad.
Culture/people change refers to a change in values, norms, attitude, beliefs and behaviour. Two common tools for changing people are culture and organisational development (OD).
Training is the most frequently used approach to changing a person’s mind-set whilst OD is a planned systematic process of change that uses behavioural science, knowledge and techniques to improve an organisation’s effectiveness and adapt to environmental challenges. OD is particularly useful in situations such as mergers, conflict management and organisational turnaround such as within a company or perhaps by a government trying to make an industry more competitive in export markets.
The Process of Change – Organisation Change Models
Kurt Lewin Force Field Analysis
Kurt Lewin suggests that change is the outcome of the impact of driving forces on restraining forces, more commonly known as force field analysis.
What is Force Field Analysis?
Force Field Analysis is a technique based on the premise that change is a result of a struggle between forces of resistance (forces that impede change) and driving forces (forces that favour change). By using Force Field Analysis, you can learn which course of action will be the best one to implement because it has the most driving forces and the least resistant forces.
Force Field analysis is a tool mainly for managers implementing change but can also be used by team members and other users affected by change. Change requires strong leadership on the part of the managers. It is used to determine the best course of action to take.
Carrying Out a Force Field Analysis
To carry out a force field analysis, follow these steps:
- List all forces for change in one column and all forces against change in another column.
- Assign a score to each force from 1 (weak) to 5 (strong) and draw a diagram showing the forces for and against, and the size of the forces.
Once you have carried out an analysis, you can decide on the viability of the project. Where you have decided to carry out a project, it can help you to analyse how you can push through a project that may be in difficulty. Here you have two choices:
- To reduce the strength of the forces opposing a project
- To increase the forces pushing a project
Often the most elegant solution is the first: just trying to force change through may cause its own problems e.g. staff can be annoyed into active opposition to a plan instead of merely not welcoming it.
If you were faced with the task of pushing through the project in the example above, the analysis might suggest a number of points:
- By training staff (increase cost by 1) fear of technology could be eliminated (reduce fear by 2)
- It would be useful to show staff that change is necessary for business survival (new force in favour +2)
- Staff could be shown that the new machines will introduce variety and interest to their jobs (new force +1)
- Wages could be raised to reflect new productivity (cost +1, loss of overtime -2)
- Slightly different machines with filters to eliminate pollution could be installed (environmental impact -1)
These changes swing the balance from 11:10 (against the plan), to 8:13 (in favour of the plan)
In force field analysis change, is characterised as a state of imbalance between driving forces (e.g. a new management, changing markets, new technology) and restraining forces (e.g. individuals’ fear of failure, organisational inertia).
Lewin Kurt (1958), proposed that in order to ensure that the desired change becomes a permanent feature of organisational life and that new behaviour is successfully adopted the old behaviour has to be discarded. There are three stages to this of change process,
Stage 1 Unfreezing: the organisation must reduce those forces that are maintaining the organisation’s behaviour at its current level. A strategy of education/communication and information by management can overcome this behaviour. Communicating the business reasons for the change will help employees understand why the change is necessary.
Stage 2 Change: at this stage the organisation is active in developing new behaviours, values and attitudes that are consistent with its desired behaviour outcomes. This is usually achieved through structural and process changes. Employee acceptance and support for the change is critical if the change initiative is to be successful.
Stage 3 Refreezing: Once the change has occurred the organisation is concerned to ensure it remains in its new state of equilibrium and that it does not regress. It therefore focuses on developing systems, values, norms and culture that facilitate and reinforce the changed behaviour.
Some factors to consider at stage two,
- Initial problem identification
- Obtaining Data
- Problem diagnosis
- Action planning
- Follow-up and stabilisation
- Assessment of consequences
- Learning from the process
Initiating Change – From Richard L Daft: The New Era of Management
After perceiving the need for change, the next part of the change process is initiating change. This is where the ideas that solve perceived needs are developed. The responses an organisation can make are to search for or create a change to adopt.
Richard L Daft identified the following techniques a manager can use to facilitate change
Search: This is the process of learning about current developments inside or outside the organisation that can be used to meet a perceived need for change.
Many needs however, cannot be resolved through existing knowledge but require that the organisation develops a new response.
Initiating a new response means that managers must design the organisation so as to facilitate creativity of both individuals and departments, encourage innovative people to initiate new ideas, or create new venture departments.
Creativity: The development of novel ideas or solutions that might meet perceived needs or offer opportunities for the organisation to follow. e.g. Vacuum packaging to aid the preservation of ground coffee.
The 4 Roles in Organisation Change according to Richard Daft
Richard Daft suggests that to champion an idea requires roles in the organisation. Sometimes a single person will play more than one role in championing an idea. However, successful innovation requires the interplay of several people in the organisation.
FOUR ROLES IN ORGANIZATION CHANGE
- Inventor or Idea Champion: A person who sees the need for and champion’s productive change. The notion here is that change does not happen by itself; personal energy and effort is required to successfully promote an idea. Often a new idea is rejected by management.
- Champion: Champions are passionately committed to a new product or idea despite rejection by others. Managers can directly influence whether champions will flourish. The evidence is that projects for new products or services fare much better when there is someone championing them.
- Sponsor: A high level manager who approves, protects and removes organisational barriers to acceptance of the new idea.
- Critic: The critic prevents people in other roles in the organisation from adopting a bad idea. The critic is often seen as a barrier, but where criticism is constructive, it can help with the evaluation and often the promotion of a project.Another way of initiating change is through New Venture Teams.
New Venture Teams: A unit separate from the mainstream of the organisation that is responsible for developing and initiating innovation.
A variation of New Venture Teams is Skunkworks. (The “Skunk Works” was the Lockheed R&D workshops in California)
Skunkworks: A small informal and sometimes unauthorised groups that creates innovations. It is a group of people who, in order to achieve unusual results, works on a project in a way that is outside the usual rules. A skunkworks is often a small team that assumes or is given responsibility for developing something in a short time with minimal management constraints. Typically, it has a small number of members in order to reduce communications overhead. It is sometimes used to spearhead a product design that thereafter will be developed according to the usual process. A skunkworks project may be secret; viz Lockheed R&D work.
New-venture fund: A fund providing resources from which individuals and groups draw on to develop new ideas, products or businesses.
Idea incubator: This is an in-house programme that provides a safe harbour for developing ideas that will not suffer from the interference from company bureaucracy.
Open Innovation: Some organisations innovate by extending the search for new ideas outside their organisation. Here organisations acquire another business or purchase the idea from another company. E.g. A technological breakthrough may be purchased by a business that will enable it to add new functionality to its products.
Resistance to change
Organisations facing change will inevitably encounter a degree of resistance even with sufficient planning; however some resistance to change is natural. Resistance to change can take the form of strikes, reductions in productivity or even sabotage. More covert examples of resistance to change include increased absenteeism, loss of employee motivation and a high rate of accidents and errors.
There are two sources of resistance to change, (1) individual and (2) organisational.
- Organisational structure: Hierarchical structures with narrowly defined jobs give stability to organisations; because these structures are rigid they do not facilitate change easily.
- Narrow Focus of Change: Frequently change programmes are introduced piecemeal and the important interdependencies such as people, systems and structure are ignored.
- Group Inertia: occurs where established group norms, either formal or informal, act as a barrier to change.
- Threatened Expertise: If the specialised expertise of an individual or group is threatened the natural reaction is resistance to change.
- Threatened Power and Influence: Change programmes frequently involve redistribution of power and influence.
- Once a position of power has been established individuals or groups are reluctant to surrender it, e.g. decentralisation.
- Resources: Change programmes that attempt to alter the allocation of resources will meet with resistance
Individual Sources of Resistance,
- Habit: As individuals become more familiar with the tasks assigned to them, they are able to cope with the work environment which in turn provides a degree of comfort. Changing this habit may result in resistance to change
- Selective Perception: Individuals only listen to things they agree with and deliberately ignore or forget other points.
- Individuals requested to make changes may not select those changes they are at odds with.
- Economic Factors: While individuals are not solely motivated by money, economic factors will remain important, particularly where the change affects income.
- Security: Insecurity arises not only from change itself but from prospective outcome of such changes, e.g. fear of the unknown.
- Social Factors: Individuals may resist change due to social factors and the fear of what others might think. The work group may exert peer pressure on the individual to resist change.
- Lack of Understanding: Individuals who do not understand the rationale for change will resist it. It is up to the organisation to make sure that individuals fully understand the change programme.
Reducing Resistance to Change
There are at least three generic strategies for overcoming resistance to change.
- Participation and involvement – members are given ownership of the change process.
- Communication – Effective communications and information sharing will reduce resistance to change.
- Training and education – where jobs and processes are restructured this initiative can help to maintain productivity levels and lessen the uncertainty of change.
Kotter and Schlesinger set out the following six (6) change approaches to deal with this resistance to change:
- Education and Communication – Where there is a lack of information or inaccurate information and analysis. One of the best ways to overcome resistance to change is to educate people about the change effort beforehand. Up-front communication and education helps employees see the logic in the change effort. This reduces unfounded and incorrect rumours concerning the effects of change in the organisation.
- Participation and Involvement – When employees are involved in the change effort they are more likely to buy into change rather than resist it. This approach is likely to lower resistance to change. Where the initiators do not have all the information they need to design the change and where others have considerable power to resist, participation and involvement can help significantly.
- Facilitation and Support – Where people are resisting change due to adjustment problems, managers can head-off potential resistance by being supportive of employees during difficult times. Managerial support helps employees deal with fear and anxiety during a transition period. The basis of resistance to change is likely to be the perception that there is some form of detrimental effect occasioned by the change in the organisation. This approach is concerned with provision of special training, counselling, time off work.
- Negotiation and Agreement – Where someone or some group may perceive losing out in a change and where that individual or group has considerable power to resist, managers can combat resistance by offering incentives to employees not to resist change. This can be done by allowing change resistors to veto elements of change that are threatening or change resistors can be offered incentives to leave the company through early buyouts or retirements in order to avoid having to experience the change. This approach will be appropriate where those resisting change are in a position of power.
- Manipulation and Co-option – Where other tactics will not work or are too expensive. Kotter and Schlesinger suggest that an effective manipulation technique is to co-opt resisters. Co-option involves the patronizing gesture in bringing a person into a change management planning group for the sake of appearances rather than their substantive contribution. This often involves selecting leaders of the resisters to participate in the change effort. These leaders can be given a symbolic role in decision making without threatening the change effort. On the other hand, if these leaders feel they are being tricked they are likely to push resistance even further than if they were never included in the change effort leadership.
- Explicit and Implicit Coercion – Where speed is essential and to be used only as a last resort. Managers can explicitly or implicitly force employees into accepting change by making clear that resisting change can lead to losing jobs , transferring or not promoting employees.
The Six (6) Change Approaches of Kotter and Schlesinger is a model to prevent, decrease or minimise resistance to change in organisations
According to Kotter and Schlesinger (1979), there are four reasons that certain people are resistant to change:
- Parochial self-interest – some people are concerned with the implication of the change for themselves and how it may affect their own interests, rather than considering the effects for the success of the business
- Misunderstanding – communication problems; inadequate information
- Low tolerance to change -certain people are very keen on security and stability in their work
- Different assessments of the situation – some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process
UNDERSTANDING GROUPS AND TEAMWORK
Team work and Group Dynamics
Formal and Informal Organisations
The Nature of Organisations
Organisations enable objectives to be achieved that could not be achieved by the efforts of individuals on their own.
Organisations come in all forms; , e.g. schools, banks, government departments, farms, hospitals or grocery stores.
The structure, management and function of these organisations will all vary because of differences in the nature and type of the organisation, the work they do, their respective goals and objectives, and the behaviour of the people who work in them.
Common Factors in Organisations
Despite organisations carrying out different functions, there are at least three common factors in any organisation.
- The interaction of people in order to achieve objectives forms the basis of the organisation.
A form of structure is needed by which peoples’ interactions and efforts are co-ordinated.
- The process of management is required to co-ordinate the activities of people in achieving organisational objectives.
- The effectiveness of the organisation will be dependent upon the quality of its people, objectives and structure and the resources available to it.
There are two broad categories of resources:
- Non-human – physical assets, materials, facilities etc.
- Human – people and their management.
The interrelationship of the above variables will determine its effectiveness and the failure or success of the organisation.
Differentiating the Formal and Informal Organisations
The Formal Organisation can be defined as: The planned co-ordination of the activities of a number of people for the achievement of some common, explicit purpose or goal, through the division of labour and function and through a hierarchy of responsibility, (Schien 1980).
The Formal Organisation can exist independently of the membership of particular individuals.
The difference between the Formal and the Informal organisation is the degree to which they are structured.
The Formal organisation is deliberately planned and concerned with the co-ordination of activities.
It is hierarchically structured with stated objectives, specification of tasks and defined relationships and authority.
Other examples of the Formal Organisation are rules, regulations and job descriptions. Within the Formal Organisation there exists the Informal Organisation.
The Informal Organisation arises from the interaction of people working in an organisation. This informality is due to the psychological and social needs, group development, relationships and behavioural norms, and is present irrespective of the defined formal structure.
Membership is spontaneous with varying degrees of involvement.
Because these relationships are outside the formal structure they may be in conflict with the Formal Organisation.
The Informal Organisation can serve a number of important functions.
- It can provide satisfaction of members social needs, personal identity and belonging.
- It provides for additional channels of communication, e.g., the grapevine.
- It can provide a means of motivation, e.g., status, social interaction, or informal work methods.
- It provides a feeling of stability and security; informal norms of behaviour can exercise a form of control over members.
- It provides a means of identifying deficiencies in the formal organisation, e.g., where duties or roles are not covered in the job description.
- The Informal Organisation may also be used when formal methods are deemed too slow or cumbersome.
- The Informal Organisation has an important influence on the morale, job satisfaction, and performance of staff.
- It can provide members with a greater opportunity to use their initiative and creativity in both personal and organisational development.
Based upon the above analysis the informal organisation therefore can be viewed as a coalition of individuals and depending upon the organisation can include managers, union officials, workers, staff representatives, customers and shareholders etc.
Team Work – Group Dynamics
Team – a definition:
A small group of people with complementary skills who work together to achieve a common purpose for which they hold themselves collectively accountable (Schermerhorn et al. 1996).
According to Daft (2006) a team is a unit of two or more people who interact and co-ordinate their work to accomplish a specific goal.
A team is a group of individuals working together to complete a specific task successfully within a timeframe.
Teams are generally made up of people with complementary skills.
Why study teams/groups?
- Organisational work is usually performed in Groups or Teams.
- Importance of `Team Player` in selection.
- Large organisations can be viewed as a collection of small groups. Groups represent mini-societies in which the interaction takes place and in which the behaviour of individuals can be studied.
- Groups play an important role
- Understanding Teamwork involves understanding group dynamics.
- People behave differently in groups
- Group membership affects self image and social identity
- An organisational leader needs to understand group behaviour, working with rather than against the group.
The language of Teams is used regularly in the organisational setting, and many strategists and HR specialists believe in and champion the benefits of team based activity.
Organisations that have successfully implemented team initiatives often report higher levels of productivity and effectivenessTop Management Team: The group that operates at the strategic apex of the organisation (Mintzberg 1988). However a top management team can only be considered to be a team if it fulfils the above broad definition.
Project Teams: created to investigate or address certain issues or problems for which a solution is sought.
Project teams can be multi-disciplinary and multi-status, the sometimes cross functional nature of these teams can yield benefits to the organisation as a whole.
Functional Teams: groups of people who carry out various tasks within the organisation. Organisations that refer to their sales team, marketing team or R&D team are referring to functional teams that may have developed team like characteristics.
A group of people and a team of people have the same potential for performance.
Organisations devote enormous effort to try to build groups of people into teams in an attempt to realise this potential.
When is Teamwork Appropriate?
When a task requires teamwork, it usually means that the following factors exist.
- Working together will produce better results than working apart.
- The task requires a mixture of different talents and skills.
- The job needs constant adjustment in what people do and in how work is co-ordinated.
- Where competition between individuals might be damaging.
- The pressure of the job creates more stress than one person can handle.
An organisation that has a structured and well developed team philosophy can derive substantial benefits however the following problems can occur with developing team roles
- Inadequate Attention to Team Characteristics
It is easy to pay lip service to team development by simply using the term `TEAM` when referring to groups of people that are loosely connected within a structure.
Various team characteristics can have a strong impact on the performance of the team.
- Autonomy versus Accountability
As more and more organisations use the methodologies of self-managed teams (autonomous work groups) the problem of accountability becomes an issue.
Individual accountability is easier to establish than team accountability, especially where task outcomes are more ambiguous.
Evidence demonstrates the benefits of teams, however the potential of team working can be lost if accountability is not taken into consideration.
- Teamwork – Too Much or Too Little Conflict
Effective teams are made up of individuals who occupy a variety of complementary roles.
Because teams demand a variety of skills there may be clashes when priorities are being established.
However teams should be characterised by healthy levels of conflict,
You need to surround yourself with able people to argue back. Confrontation of divergent views is an important principle of effective teams, (Thomas 1976) and unless conflict can be expressed, important and creative ideas may be lost, (Harison 1972).
- Too Much or Too Little Control
Because teams exist within the structure of the organisation, teams are subject to a certain level of control and co-ordination.
Without a certain level of control, activities become disjointed and confused.
Someone perhaps a team leader needs to be given a certain amount of controlling power to ensure that the team gets its job done, particularly where there are pressing deadlines. Too much control smothers a lot of potential creativity, whereas too little results in time wasting and confusion.
- Teamwork – Not Enough Training
If people are not trained for team work and for the specific tasks they are required to complete they will not be able to operate successfully in a team situation.
Training is particularly important during the time the organisation is undergoing change. The organisation must be prepared to invest in training in order to gain the benefits of teamwork
- Unsuitable or Defensive Management Philosophy
If top management do not agree with the idea of teamwork it is unlikely that the reality of teamwork will get off the ground.
Teams need the support of top management through empowerment.
Empowering people removes the power from where it traditionally lies, as a result some managers may work against the principle of teamwork rather than for it.
- Unfair Rewards
Effective teams can yield positive results for the organisation.
Teams can be very aware of their successes and failures and unless the organisation is prepared to reward them for their efforts, dissatisfaction is likely and as a result motivation and morale may be lost
Team Roles (Meredith Belbin)
A team role refers to the part someone plays in the team. Dr R. Meredith Belbin suggests that effective teams need to have a number of participants who play very different roles within the team structure.
Effective teams have members who recognise the roles they play best and who attempt to enhance the strengths of that role.
Belbin (1981,1993) research indicated that it was possible to identify and distinguish nine distinct management styles labelled `team roles.
Belbin’s Nine Team Roles
- Clarifying the goals and objectives of the group.
- Selecting the problems on which decisions have to be made and establishing their priorities.
- Helping establish roles, responsibilities and work boundaries within the group.
- Summing up the feelings and achievements of the group and articulating group verdicts.
- Shaping roles, boundaries, responsibilities, tasks and objectives.
- Finding or seeking to find pattern by group discussion.
- Pushing the group towards agreement on policy and action and towards making decisions.
- Advancing proposals.
- Making criticisms that lead up to counter-suggestions.
- Offering new insights on lines of action already agreed.
- MONITOR/ EVALUATOR
- Analysing problems and situations.
- Interpreting complex written material and clarifying obscurities.
- Assessing the judgements and contributions of others.
- COMPANY WORKER/IMPLEMENTER
- Transforming talk and ideas into practical steps.
- Considering what is feasible.
- Trimming suggestions to make them fit into agreed plans and established systems.
- TEAM WORKER
- Giving personal support and help to others.
- Building on to or seconding a member’s ideas and suggestions.
- Drawing the reluctant team members into discussion.
- Taking steps to avert or overcome disruption of the team
- RESOURCE INVESTIGATOR
- Introducing ideas and developments of external origin.
- Contacting other individuals or groups of own volition.
- Engaging in negotiation-type activities.
- Emphasising the need for task completion, meeting schedules and generally promoting a sense of urgency.
- Looking for and spotting errors, omissions and oversights.
- Galvanising others into activity.
- Brings a specialist knowledge or expertise that other team members do not possess.
Since each role contributes to team success, a successfully balanced team will contain all roles. A single member can play several roles and thus reduce the overall team size.
Managers tend to adopt one or two of these team roles fairly constantly.
These roles can be predicted using psychometric tests.
When team roles are combined in a certain way they tend to produce more effective teams.
Guiding Principles of Teamwork
A good way of getting individuals to commit to team work is to develop a set of rules for everyone to focus on, e.g.,
- Treat each other with respect and trust.
- Keep their promises to each other.
- Demand honesty from each other.
- Quickly resolve any issues that interfere with a good team spirit.
Characteristics of Effective Teams
An effective team should have some or all of the following characteristics (Woodcock 1979).
- Clear objectives which have been agreed.
- A relaxed and informal atmosphere where people are allowed to express themselves.
- Support and trust.
- Criticism is honest and constructive.
- Activities are distributed evenly.
- An accurate awareness of performance.
- An ability to deal with disagreements.
- Appropriate leadership.
Characteristics of Effective Teams
Size – The ideal team size is 7 although 5 -12 is common.
These teams are large enough to take advantage of diverse skills, enable members to express good and bad feelings and aggressively solve problems.
Diversity – Since teams require a variety of skills, knowledge and Experience, heterogeneous teams are more efficient than homogeneous teams.
Team Member Roles – Two types:
For teams to be successful over the long run they must be structured to maintain their members’ social well-being and accomplish tasks.
- Task Specialist Role
- Socio-emotional Role
Task Specialist Role – Help the team to reach its goals.
Some behaviours of the task specialist are,
- Initiate ideas,
- Give opinions,
- Seek information,
- Summarise ideas,
- Energise by stimulating ideas.
Socio-emotional Role – Support teams members’ emotional needs.
Some behaviours of the socio-emotional role are:
- Encourage others and their ideas,
- Harmonise the team by resolving conflict,
- Reduce tension e.g. tell jokes,
- Follow, by going along with the team,
- Compromise by shifting their opinions to maintain harmony.
Group Dynamics – What are Group Dynamics?
It is the study of the interaction and behaviour of individuals as members of a group and of the behaviour of groups generally.
Benefits of Groups to individuals:
- Groups provide people with friendship and social support.
- Groups help people to be aware of their own identity i.e. who they are in relation to others.
- Groups can help in sharing workloads of performing difficult tasks.
- Groups help individuals in self-development, i.e. up-skilling, or confidence.
Benefits of Groups to Organisations
- When people come together in groups, the pooling of skills can assist greatly in the completion of difficult tasks.
- When people come together in groups it may sometimes be easier to solve problems or make informed decisions.
- When people come together in a group it is more likely to have higher levels of commitment and participation.
- When people come together in groups they can resolve conflicts that may otherwise be difficult to resolve where people are apart.
The Stages of Group Development Tuckman (1965)
Bruce W Tuckman is a respected educational psychologist who first described the (then) four stages of group development in 1965. Looking at the behaviour of small groups in a variety of environments, he recognised the distinct phases they go through, and suggested they need to experience all four stages before they achieve maximum effectiveness. He refined and developed the model in 1977 (in conjunction with Mary Ann Jensen) with the addition of a fifth stage.
- Forming: The initial entry of the group members.
- Storming: Intragroup conflict, high emotion and tension. Hostility and in-fighting may occur at this stage. Members’ expectations are clarified, team roles assigned and members accept the existence of the group.
- Norming: The goal is agreed. Close relationships develop and the group demonstrates cohesiveness.
- strong sense of group identity and camaraderie exists. People feel empowered. The norming stage is complete when group structure solidifies.
- Performing: The group at this point is fully functional and accepted. Group has moved from a getting to know to understanding and The group is able to deal with complex tasks and handle conflict. Group structure is stable.
- Adjourning: An important stage for temporary groups that are increasingly common in the work place.
- well integrated group is able to disband if required.
- Norms are often referred to as standards of behaviour.
- Group norms help to clarify membership expectations in a group.
- Group norms can help members to structure their own behaviour and to predict what others will do. Members can gain a common sense of direction and reinforce the desired organisational culture.
Types of group norms:
Groups operate with many types of group norms. Norms can have both positive and negative implications for an organisation and its managers.
Positive Norms: “It’s a tradition to stand up for our company”
Negative Norm: “ In our company they are always trying to take advantage of us”
Norms are influenced by organisational factors such as policies, management style, rules and procedures.
Developing Cohesive Groups
Cohesiveness has been described as the ‘binding together of group members and maintaining their relationships with one another’ (Schacter1951).
Common determinants of group cohesiveness are,
- High levels of communication.
- Group size can impact greatly on the effectiveness of the group; a figure above twelve is not recommended.
- Co-operation and competition: studies have shown that where groups co-operate behaviour is more likely to lead to group cohesiveness whereas competition within groups have an adverse effect.
- A feeling of acceptance: If group members feel accepted by the group there is a higher tendency for the group to stick
- Outside threat: If the group experiences a threat from out-side or conflict arises with another group, members will unite and in return the group becomes more cohesive.
- Success and Performance: The more successful a group feels, and the more it achieves rewards for what it does, the more likely members will enjoy being part of the group.
- Group cohesiveness can be greatly strengthened by successful achievement of goals. However where there is too much group cohesiveness, a group can lose sight of the aims or objectives of the group.
‘Groupthink’ Irving Janis, (1972)
The idea of Groupthink occurred to Irving Janis while reading Arthur .M Schlesinger’s A Thousand Days, particularly the sections on the Bay of Pigs, as a result of this he began questioning group decision making processes. He suggested JFK’s advisors were more concerned with approval of colleagues than achieving the objectives.
Arthur .M Schlesinger was special assistant to President J F Kennedy. The Bay of Pigs Invasion was an unsuccessful attempt by United States-backed Cuban exiles to overthrow the government of the Cuban dictator Fidel Castro in 1961.
Groupthink is what happens when people in a group become so close (or cohesive) that any disagreement between people becomes less and less likely to occur.
As a result, the group develops a way of thinking which prevents it from being realistic or critical about what it is doing or the ways in which it is doing it.
The people in the group are then less likely to question the reasons for their actions.
According to Janis several factors give rise to the groupthink phenomenon.
- A feeling of invulnerability: particularly where groups have a high success rate.
- False logic: groups will try to rationalise their logic even though there is evidence to suggest that their logic is wrong.
- Shared stereo types: Groups that experience groupthink can stereo type anyone who criticises them.
- Pressure: individuals within the group who express doubts about decisions of the group may be asked to resign or withdraw from the group.
- Self censorship: Members of cohesive groups may be reluctant to communicate anything negative about the group which can result in the group not exploring or analysing what the group is doing.
- An illusion of agreement or unanimity: often groups become convinced that everyone agrees with the decision of the group and therefore there is no need to explore a particular course of action.
How To Deal With Groupthink
- Ask each member to be critical and evaluate all ideas and suggestions generated by the group.
- Encourage people to voice and explore their doubts.
- Create subgroups with different leaders to work on the same problem.
- Invite outside experts to observe and react to group discussions.
- Have a different member act as ‘devil’s advocate’ at each group meeting.
- Hold ‘second chance’ meetings once an initial decision is made.
Adapted from, Janis 1982
Team Conflict (Kenneth Thomas and Ralph Kilmann)
In the 1970s Kenneth Thomas and Ralph Kilmann identified five main styles of dealing with conflict that vary in their degrees of cooperativeness and assertiveness. They argued that people typically have a preferred conflict resolution style. However they also noted that different styles were more useful in different situations. The Thomas-Kilmann Conflict Mode Instrument (TKI) helps you to identify which style you tend towards when conflict arises. Thomas and Kilmann’s styles are:
Competitive: People who tend towards a competitive style take a firm stand and know what they want. They usually operate from a position of power, drawn from things like position, rank, expertise, or persuasive ability. This style can be useful when there is an emergency and a decision needs to be made fast; when the decision is unpopular; or when defending against someone who is trying to exploit the situation selfishly. However it can leave people feeling bruised, unsatisfied and resentful when used in less urgent situations.
Collaborative: People tending towards a collaborative style try to meet the needs of all people involved. These people can be highly assertive but unlike the competitor, they cooperate effectively and acknowledge that everyone is important. This style is useful when you need to bring together a variety of viewpoints to get the best solution; when there have been previous conflicts in the group; or when the situation is too important for a simple tradeoff.
Compromising: People, who prefer a compromising style, try to find a solution that will at least partially satisfy everyone. Everyone is expected to give up something, and the compromiser him- or herself also expects to relinquish something. Compromise is useful when the cost of conflict is higher than the cost of losing ground, when equal strength opponents are at a standstill and when there is a deadline looming.
Accommodating: This style indicates a willingness to meet the needs of others at the expense of the person’s own needs. The accommodator often knows when to give in to others and can be persuaded to surrender a position even when it is not warranted. This person is not assertive but is highly cooperative. Accommodation is appropriate when the issues matter more to the other party, when peace is more valuable than winning or when you want to be in a position to collect on this “favour” you gave. However, people may not return favours and overall this approach is unlikely to give the best outcomes.
Avoiding: People tending towards this style seek to evade the conflict entirely. This style is typified by delegating controversial decisions, accepting default decisions and not wanting to hurt anyone’s feelings. It can be appropriate when victory is impossible, when the controversy is trivial or when someone else is in a better position to solve the problem. However in many situations this is a weak and ineffective approach to take.
Once you understand the different styles, you can use them to think about the most appropriate approach (or mixture of approaches) for the situation you’re in. You can also think about your own instinctive approach and learn how you need to change this if necessary.
Ideally you can adopt an approach that meets the situation, resolves the problem, respects people’s legitimate interests and mends damaged working relationships.
Benefits and Cost of Teams
Potential Benefits of Teams,
- Level of effort – unleash enormous energy and are essential to the learning organisation.
- Satisfaction of members – working in teams gives a greater sense of belonging to members.
- Expanding Knowledge and skills – they empower employees to bring greater knowledge to the task.
- Organisational responsiveness – teams enhance flexibility as members can be reorganised more easily.
Potential Cost of Teams
Power realignment – As an organisation reorganises to team structures, middle and front line managers lose out on status.
Free riding – This refers to members who contribute little to the team but benefit greatly.
Co-ordination costs – time and energy is consumed co-ordinating team activities and therefore productive time is lost.
Revising systems – implementing teams requires changes to the organisation in terms of rewards and appraisal.
Communications can be defined as the process by which, ideas, information, opinions, attitudes, etc. are conveyed from one person to another.
Axley (1996) defines communications as the process of sending and receiving messages with attached meanings and with the ultimate meaning in any communication being created by the receiver or perceiver of the message.
Price (1997) conceives of organisational communication simply as the degree to which information is transmitted among members of the organisation.
Within the organisation communications can occur in a formal or informal way, i.e. official or unofficial.
- Used in a Professional Business Setting
- Non-use of slang words
- Pronounce words correctly
- Usually used with friends and family
- Contains shortened version of words
- Contains slang words
Another communication distinction identified is horizontal and vertical. Horizontal refers to the transmission of information among peers whilst vertical communication is the transmission of information between super-ordinate and sub-ordinate.
Communication can also be personal, e.g., telephone conversations, or impersonal – transmitted to the mass media.
The final distinction in communications is between instrumental and expressive. If the transmission is instrumental it is necessary to do the job, if it is expressive it is of a non job nature.
Just as the human nervous system responds to stimuli and co-ordinates responses by sending messages to various parts of the body, communication co-ordinates the various parts of the organisation.
The key elements of the communication process include a source who encodes the message and receiver who decodes the message. The receiver may or may not give feedback. Noise is the term to describe any barrier or disturbance within the communication process.
The most common methods used by organisations to communicate with employees are Email, Team briefings, Videos, Direct written, Direct oral, Meetings, Representative staff bodies.
Communicating Among People
Managers have a choice of many channels of communication. Research has attempted to explain how managers select communications channels to enhance communication effectiveness.
The research found that channels vary in their capacity to convey information.
The communication process is made up of a number of elements or stages through which every form of communication must pass. .
- Sender: the entire process starts when the sender decides that he or she wants to send a message to another person. For example you want to inform your manager about a quality control problem.
- Encoding the message: before a message can be sent, it must be encoded in a suitable language. This language or sign could be any of the following – a gesture or non-verbal communication, written word, spoken word, picture or illustration.
- Medium: Once the sender has encoded the message the next choice is to decide which medium to use to transmit the message. The choice of medium, e.g. email, memo, briefing, meeting, video conference, telephone, will depend on a number of factors. Factors influencing the choice of medium will be: is it bad news?, speed of message or is it a report.
- Decoding process: the receiver must decode the message and understand it before acting on the message; the use of unfamiliar language will impact on the understanding of the message.
- Receiver: finally when the receiver has decoded and understood the message, the receiver then becomes the sender in the process, the receiver then sends feedback to the original sender to indicate that the message has been received and understood.Noise: is used to denote anything that inhibits the success of the communication process. Noise can refer to actual noise in the room or the reader’s state of mind
Planning the right channel to convey the message is the most important factor in communications.
Choosing channels (The three main forms)
Writing is best when there is a need for,
- no immediate feedback
- an accurate legal record
- complex information and detail.
Telephone is best when there is a need for,
- some immediate response
- quick one off issues
- simple facts
Meeting is best when there is a need for,
- immediate verbal and non-verbal feedback demonstration and observation of facts and feelings
- sensitive and confidential information.
Communications Planning the 5 W’s
Who: is it for? Keep the receiver in mind
Why: do you wish to communicate?
What: will you say? Keep it short and simple (KISS)
Where: are the main points?
When: do they need it by?
How: do you convey the message.
Non Verbal Communications
Nonverbal communication (NVC) is usually understood as the process of communication through sending and receiving wordless messages. Such messages can be communicated through gesture; body language or posture; facial expression and eye contact; objects such as clothing, hairstyles or even architecture.
One of the most important activities for a manager is listening both to employees and customers.
Often the most important information in the organisation comes from the bottom up rather than the top down. Listening is a skill that must be learned as approximately 75% of communication is listening. Most people spend about 30-40% of their time listening which can lead to communication errors.
There are ten keys to effective listening according to Daft RL.
- Listen actively,
- Find areas of interest,
- Resist distractions,
- Capitalise on the fact that thought is faster,
- Be responsive,
- Judge content not delivery,
- Be patient
- Listen for ideas,
- Work at listening, Exercise one’s mind.
Team Communication Channels
Teams communicate horizontally i.e. across as opposed to upwards or downwards
Research into team communications has focused on two team characteristics – the level of centralisation of communications and the nature of the team tasks. In a centralised team all communication passes through one individual to solve problems or make decisions. In a decentralised network individuals can communicate freely. In laboratory experiments centralised communication networks achieved solutions faster for simple problems, whereas decentralised communications were slower for simple problems. However for more complex problems the decentralised network was faster. See “Effectiveness of Team Communication Networks” diagram below.
In a highly competitive global environment organisations use teams to deal with complex problems. Teams will share information, knowledge, experiences and rationalise the solution.
Personal Communications Channels
Personal communications channels exist outside the formal communication channels. This form of communication co-exists with the formal methods of communications and in some instances can skip hierarchical levels to form a wide network.
There are three types of personal communications.
- Personal Networks: Here the approach is to cultivate personal relationships across the entire organisation. Managers who adopt this form of communication are developing networks and are in a greater position to influence others. Relationship building is at the core of management.
- Management by wandering around: Managers who engage with employees gain an insight into the workings of the organisation. By developing relationships with employees, managers at all levels learn from workers in departments and divisions e.g. Steve Ballmer of Microsoft regularly briefs staff directly on business strategy.
- The grapevine: This is a method of communication that is not officially sanctioned by the business. The grapevine links employees in all directions from CEO down to operations staff. This form of communication exists in every form of organisation and is more pronounced where formal channels of communication are absent or closed off to lower level staff. The grapevine is more common during periods of change or uncertainty and can sometimes help staff to clarify management decisions. Smart managers recognise the importance of the grapevine but also ensure that it is not the only form of communication in the organisation.
Communication during Turbulent Times
During turbulent times communication becomes even more important. In order to build trust, promote learning and problem solving, managers promote open communications, dialogue and feedback and learning
- Open communication: Open communication means managers share all types of information throughout the company and across functional and hierarchical levels. Open communication often runs counter to management thinking and selective communication. However it provides benefits through generating trust and commitment and helps ideas to be evaluated among a greater audience.
- Dialogue: This is another method of fostering trust and collaboration in organisations. Dialogue is a group communication process where people create a stream of shared meaning that enables them to understand each other and the world around them. The role of dialogue is for group members to suspend their personal views in favour of the group. Dialogue is different from discussion where discussion tends to lead to a single outcome dialogue leads to a change of mind set.
- Feedback and Learning: Feedback occurs when managers use evaluation and communication to help individuals and the organisation learns and improves. It also determines if the communication message is successful. Successful managers focus their feedback to help develop the capacities of subordinates and teach the organisation how to achieve its goals.
In recent years many organisations have faced crisis situations from day to day operational challenges.
Managers can develop four primary skills for communicating in a crisis,
- Maintain your focus: Good communicators do not allow themselves to be overwhelmed by the situation.
- Be visible: Many managers underestimate how important it is to be visible during a crisis. A manager’s job is to reassure employees and to respond to customers’ concerns.
- Get the awful truth out: Good managers gather all the information and determine the facts and then tell the truth to employees and the public.
- Communicate a vision for the future: People need to feel that they have something to work to. Moments of crisis give managers opportunities to communicate a vision of the future and unite people in common goals.
Barriers to effective Communications
Managers need to be aware of and devise ways of overcoming barriers to communication.
- Information overload – with today’s technology people can be bombarded with information.
- Information can be either too detailed or too generalised.
- The purpose of the message or action required may be unclear to the receiver.
- Because messages are generally one way we rely upon the receiver’s interpretation, which may not be what the writer meant.
- The words we use may not have the same meaning to everyone.
- The style of communication may be too officious or too informal depending on the audience.
- The sender makes assumptions about what the receiver already knows; likewise the receiver makes the same assumption.
The Principles of Effective Communications
- Think carefully about your objective before communicating. Do you want to inform, persuade, advise, consult or entertain?
- Choose the correct medium, or combination of media – speech, visual etc.
- Organise your ideas and express them carefully.
- Time the message to best advantage.
- Check for feedback.
- As the receiver, give messages your full attention and respond in an appropriate way.
What is a Project?
- A project is used for carrying out an assignment which is of a non-recurring nature.
- A project is defined by expected results, completion date, quality and cost.
- Projects are characterised by the use of a defined model for control and follow up.
A project can be defined as: a temporary endeavour undertaken to create a unique product or service.
Temporary means that every project has a definite beginning and definite end. Unique means that the product or service is different in some distinguishing way from all similar products and services.
Thus using this definition any of the following could be a project,
- develop a new product or service
- construct a building or facility
- develop a new operations process
- set up a new business division
- develop a new computer system
- put a man on the moon
- be the first person from ICPAR to the top of Mount Everest
What is Project Management?
Project management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Meeting or exceeding stakeholder expectations involves balancing competing demands among:
- Project scope ,time ,cost and quality
- Stakeholders with different needs and expectations
The term project management is sometimes used to describe an organisational approach to the management of on-going operations. This approach, more properly called management by projects, treats many operational activities (tasks) as projects in order to apply project management to them.
Project Management Component Processes
The process of managing projects requires application of nine management processes (PMBOK) where each contributes to the overall success of the project. These are:
- Project integration management is the process to ensure that the various elements of the project are co-ordinated.
- Project scope management includes all the work and only the work required to complete the project successfully.
- Project time management ensures the timely completion of the project using tools such as activity duration estimation, schedule planning.
- Project cost management ensures the project is completed within the budget. It consists of resource planning, cost estimation, cost budgeting and cost control.
- Project quality management ensures that the project satisfies for which it is undertaken and consists of quality planning, assurance and control.
- Project HR management consists of organisational planning, staff acquisition and team development.
- Project risk management describes the process of risk identification, quantification, risk response and risk control.
- Project communications management ensures the timely and appropriate generation, collection, dissemination and storage of information.
- Project procurement management describes the process of acquiring goods and services from outside the performing organisation.
The Business Review (Identifying the need for a project)
A business review is normally undertaken where a business need or case has been recognised or to identify any deficiencies in the operations of a business.
Before deciding if a project should be undertaken a business review is executed.
Setting up a project presupposes that a manager in the organisation has decided to carry out a specified and clearly defined task to meet a business need. The decision-maker has deemed the task is best carried out in the form of a project
The Main Phases of a Project
Because projects are unique undertakings they involve a degree of uncertainty. Therefore projects are usually divided into several phases (stages) to provide better management control and appropriate links to on-going operations.
Each phase is marked by completion of one or more deliverables. A deliverable is a tangible, verifiable outcome, result, or item that must be produced to complete a project or part of a project.
A project consists of three phases:
- The project start (Initiating)
- Implementation of the project (Planning, Executing and Closing process)
- The project review (lessons learned)Project Start The project start consists of two elements; the project sponsor hands over the produced project specification that has been developed during the business review to the project manager and then the project manager creates a project plan based upon the project specification.
The following activities are pursued until a clear project specification emerges.
- A project statement is written which may refer to the business agreement, contract or customers request.
- The final deliverable (goal), i.e. what the project will and will not address.
- An investment appraisal assisted by a financial controller.
- The appropriate project organisation which includes the project sponsor and board.
- The business level risks and issues.
- A project estimate and budget.
In the project start phase the project is established and mobilised. This phase aims to create and guarantee sufficient requirements for effective implementation. Only after this phase is completed can the project carryout the main task effectively.
The project start is mainly about creating an agreement between the project sponsor and manager.
Defining the project plan involves the following elements
- Clarifying the task by identifying possible unclear or incomplete points in the project.
- Choosing and adapting a working model.
- Work Breakdown Structure
- Critical Path Analysis diagram to determine the critical task to be executed.
- A project schedule documented on a Gantt chart.
- Milestone schedules.
- Risks and issues are identified and qualified.
- Configuration Management (Change Control).
- Plan level estimates and budgets are prepared and timing of expenditures.
- The competencies and skills required by the project members.
- The project organisation which includes the project sponsor and manager.
- A milestone is the end of a stage that marks the completion of a work package or phase typically marked by a high level event such as completion, endorsement or signing of a deliverable, document or a high level review meeting.
- A deliverable is a tangible or intangible object produced as a result of project execution. A deliverable can be created from multiple of smaller deliverables.
The Work Breakdown Structure
The creation of a WBS is the responsibility of the project manager. The documentation has three elements:
- Work: Defines each task from the PQP (Project Quality Plan).
- Breakdown: Decomposes these tasks into a hierarchy.
- Structure: Reflects the structure of the team through definition of individual work plans.
The interaction of different areas or stages within the project creates a complexity in plan definition: Tasks may be:
- Dependent –This relates to the need for sequencing and can be seen in the need for the design phase to follow systems analysis.
- Parallel – Some tasks such as interviewing users can occur simultaneously when the work structure is broken down.
- Overlapping tasks – Some tasks begin before the previous phase has finished.
In IT system development, testing may begin before programming is complete.
Some of this complexity is dealt with through the use of diagrammatic planning techniques such as network analysis.
During the project implementation the project task itself is carried out.
The scope and form of the main tasks vary greatly from project to project depending on the result to be achieved.
It is important from the project leadership and implementation point of view to continuously revisit the project specification to determine what has to be done.
The implementation phase of the project activities include the following,
- Project members report periodically to the project manager so that progress can be measured against the project plan.
- The project plan should be available for the periodic financial forecast to ensure up to date forecasting is provided to senior management for decision making.
- Identifying the project critical points, risk factors and weaknesses and taking suitable measures.
- Change requests to the project organisation are sent to the project sponsor for evaluation.
- Gradually improving working methods and routines.
- The project manager updates the relevant documents in the project plan as necessary.
- Team meetings are held and minuted, to review progress and identify issues.
- Regularly reporting results, suggestions for decisions and measures to the sponsor,
- Scope of the report: what period does it cover etc.
- Achievements: what has been achieved during the period. Compare actual with milestones and deliverables.
- Deviations from plan deliverables and milestones.
- Actions: what activities have been carried out during the period, compare actual activities with planned activities.
- Problems/issues if any were encountered, describe them.
- If any new opportunities arose describe them.
- Provide an update on the risk analysis.
- Recommendations: suggestions for improvement or action to be taken.
The conclusion of the implementation phase is marked by a handover of the final result. Quality control and approval within the project will precede the handover. The project is then handed over to the sponsor for approval.
While the project sponsor has made the final decision with the project manager that the project has ended, the project manager gives the signal to the members that no more tasks have to be done.
The project manager hands back all resources (human etc.) to the line organisation.
In the project review phase the project manager analyses the final deliverable, objectives, results schedule and costs. These results are compared with the original specification. Any discrepancies are commented on. A function of the project review is to supply feedback to the line organisation; so that, if appropriate, operational systems can be developed.
The results of the analysis together with experiences and suggestions for improvement are documented in the final report.
The final report must reflect everyone’s experiences not just those of the project manager although the project manager is responsible for writing the report.
It is often said that more can be learned from project failure than project success. The lessons learned from project failure can include:
- When starting off in project management, plan to go all the way.
- Don’t skimp on project management qualifications.
- Does not spare time when laying out the project ground work and defining work.
- Ensure work packages in the project are of a proper size.
- Establish and use network planning techniques.
- Be prepared to re-plan jobs continually to accommodate frequent change.
- Whenever possible tie together responsibility, performance and rewards.
- Long before the project ends provide some means for accommodating the employees’ goals.
Lessons learned: “Lessons learned” is the documentation of success or failure of the project. Boeing maintains diaries of lessons learned on each aeroplane project. Lessons learned documents are drafted by the project manager and are used to for training programmes for future projects or by managers of similar projects.
Projects as a method of work requires that a temporary organisation is formed to carry out a pre-determined task, according to a customer’s needs, expectations and requirements. By organisation we mean how;
- We allocate tasks and responsibilities to the different roles in the project.
- The different roles work together and interact to carry out the various tasks.
In order to define a project’s organisation one needs to have an understanding of which tasks and responsibilities are to be allocated.
A general description of the responsibilities of the project sponsor, project manager and project members are given below.
Project Sponsor (Role normally held by a senior Manager/Director)
The project sponsor ensures the project has a purpose, is financed and the results will be utilised. The responsibilities consist of
- Ultimate authority and responsibility for the project.
- Producing a project specification.
- Starting and stopping the project.
- Making resources available.
- Designating the project manager.
- Overall control of the project.
- Approving any changes to the project.
- Appointing a project board.
- Taking delivery of and approving results.
The Project Manager
The project manager has the responsibility and authority to lead the project to its final deliverable (goal) within a given framework. The project manager’s responsibilities are to ensure:
- Drawing up and continuously updating the plan.
- The day to day running of the plan.
- That the correct resources and workload requirements are scheduled.
- The activities are properly prioritised and that the critical tasks are defined.
- That there is a continuous review of the project and revision of the plan as required to meet the final deliverable (goal).
- That all project plans will define key milestones to ensure the project remains in control.
- That all project documentation is updated and maintained.
- That the chosen work model and methods are applied.
- That the project is tracked, controlled, and reported.
- That stakeholders, internally and externally, are kept informed.
- That the interim and final results are handed over.
A project is made up of a number of project members each of whom will have different roles whose task and responsibilities are documented.
Generally speaking the responsibilities cover the following, • Planning, carrying out and adapting the chosen processes.
- Using the available methods and working groups to ensure the quality of the interim results.
- Identifying the competencies needed to carry out the tasks.
- Where necessary clarifying demands and requirements which affect the allotted tasks.
- Identifying and reporting mistakes or deficiencies in the working methods.
Types of Project Organisation Structures
Functional organisation: is a hierarchy where each employee has one clear line of authority, staff are grouped by speciality, e.g. production, marketing, finance.
Projectile organisations: project team members are grouped under the project manager, in this type of organisation the project manager has a great deal of independence and authority.
Matrix organisations: is a blend of functional and projectile structures and may be classed as weak or strong matrix organisation.
Weak matrix maintains many of the characteristics of functional organisations and the project managers role is more of co-ordinator whereas a strong matrix reflects the projectile organisation where the balance of power shifts towards the project manager.