ORGANIZATIONAL TRANSFORMATION ...!!!

ORGANIZATIONAL TRANSFORMATION

Transformation, according to Webster’s Dictionary, is: ‘A change in the shape, structure, and nature of something’. Organizational transformation strategies are concerned with the development of programmes that will ensure that the organization responds strategically to new demands and continue to function effectively in the dynamic environment in which it operates.

Organizational transformation strategic plans may involve radical changes to the structure, culture and processes of the organization – the way it looks at the world. This may be in response to competitive pressures, mergers, acquisitions, investments, disinvestments, changes in technology, product lines, markets, cost reduction exercises and decisions to downsize or outsource work. Transformational change may be forced on an organization by investors or government decisions. It may be initiated by a new chief executive and top management team with a remit to ‘turn round’ the business.

Transformational change strategies involve planning and implementing significant and far-reaching developments in corporate structures and organization-wide processes. The change is neither incremental (bit by bit) nor transactional (concerned solely with systems and procedures).

Transactional change, according to Pascale (1990), is merely concerned with the alteration of ways in which the organization does business and people interact with one another on a day-to-day basis and ‘is effective when what you want is more of what you’ve already got’. He advocates a ‘discontinuous improvement in capability’ and this he describes as transformation.

A distinction can also be made between first-order and second-order transformational development. First-order development is concerned with changes to the ways in which particular parts of the organization function.

Second-order change aims to make an impact on the whole organization.

Types of transformational strategies

Four strategies for transformational change have been identified by Beckhard (1989):

1. A change in what drives the organization – for example, a change from being production driven to being market driven would be transformational;

2. A fundamental change in the relationships between or among organizational parts – for example, decentralization;

3. A major change in the ways of doing work – for example, the introduction of new technology such as computer-integrated manufacturing;

4. A basic, cultural change in norms, values or research systems – for example, developing a customer-focused culture.

Transformation through leadership

Transformation programmes are led from the top within the organization.

They do not rely on an external ‘change agent’ as did traditional OD interventions, although specialist external advice might be obtained on aspects of the transformation such as strategic planning, reorganization or developing new reward processes.

The prerequisite for a successful programme is the presence of a transformational leader who, as defined by Burns (1978), motivates others to strive for higher-order goals rather than merely short-term interest. Transformational leaders go beyond dealing with day-to-day management problems; they commit people to action and focus on the development of new levels of awareness of where the future lies, and commitment to achieving that future. Burns contrasts transformational leaders with transactional leaders, who operate by building up a network of interpersonal transactions in a stable situation and who enlist compliance rather than commitment through the reward system and the exercise of authority and power. Transactional leaders may be good at dealing with here-and-now problems but they will not provide the vision required to transform the future.

Managing the transition

Strategies need to be developed for managing the transition from where the organization is to where the organization wants to be. This is the critical part of a transformation programme. It is during the transition period of getting from here to there that change takes place. Transition management starts from a definition of the future state and a diagnosis of the present state. It is then necessary to define what has to be done to achieve the transformation.

This means deciding on the new processes, systems, procedures, structures, products and markets to be developed. Having defined these, the work can be programmed and the resources required (people, money, equipment and time) can be defined. The strategic plan for managing the transition should include provisions for involving people in the process and for communicating to them about what is happening, why it is happening and how it will affect them. Clearly the aims are to get as many people as possible committed to the change.

Organization Effectiveness...!!!

Organization Effectiveness

An effective organization is one that achieves its purpose by meeting the needs of its stakeholders, matching its resources to opportunities, adapting flexibility to environmental changes and creating a culture that promotes commitment, creativity, shared values and mutual trust. The improvement of organizational effectiveness is an overall objective of strategic HRM, which addresses the organization-wide process issues discussed in this

chapter relating to organizational development and transformation, culture management, knowledge management, change management, developing a climate of high commitment and trust, quality management, continuous improvement and customer relations. The last three of these areas are the special concern of front-line managers, but the HR function can provide

support and help in developing and implementing the required strategies. A holistic approach is required that provides the basis for integrated HR strategies in the main areas of resourcing and talent management, learning and development, performance management, reward and employee relations.

STRATEGIES FOR IMPROVING ORGANIZATIONAL

EFFECTIVENESS

Strategies for improving organizational effectiveness will focus on developing processes that support the achievement of business goals and a positive culture. There are no universal prescriptions for the development of strategies. Some of the areas that might be considered are listed in the box, but these are generalities and would have to be turned into specifics in accordance with an assessment of the particular business environment and needs. Rosabeth Moss Kanter (1989) noted that corporations are being pushed in ever less bureaucratic and ever more entrepreneurial directions, cutting out unnecessary layers of the hierarchy and forging closer ties with employees. She emphasizes, however, that the pursuit of excellence has multiplied the number of demands on executives and managers and described this as the

‘Post-entrepreneurial corporation’. This represents ‘a triumph of process over structure’. She suggests that relationships and communication and the flexibility to combine resources are more important than the formal channels and reporting relationships represented in an organization chart: ‘What is important is not how responsibilities are divided but how people

can pull together to pursue new opportunities.’

Areas for developing organizational effectiveness

1. Clearly defined goals and strategies to accomplish them.
2. A value system that emphasizes performance, productivity quality, customer service, teamwork and flexibility.
3. Strong visionary leadership from the top.
4. A powerful management team.
5. A well-motivated, committed, skilled and flexible workforce.
6. Effective teamwork throughout the organization, with win/lose conflict well under control.
7. Continuous pressure to innovate and grow.
8. The ability to respond fast to opportunities and threats.
9. The capacity to manage, indeed thrive, on change.
10. A sound financial base and good systems for management accounting and cost control.

In Managing on the Edge, Richard Pascale (1990) suggested a new ‘paradigm’ for organizations in which they are:

·        placing increased emphasis on the ‘soft’ dimensions of style and shared values;

·        operating as networks rather than hierarchies;

·        moving from the status-driven view that managers think and workers do as they are told, to a belief in managers as ‘facilitators’ with workers empowered to initiate improvements and change;

·        placing less emphasis on vertical tasks within functional units and more on horizontal tasks and collaboration across units;

·        focusing less on content and the prescribed use of specific tools and techniques and more on ‘process’ and a holistic synthesis of techniques;

·        Changing the military command model to a commitment model.

Linda Gratton (2004) has proposed the following six tenets of the democratic enterprise:

1. The relationship between the organization and the individual is adult to adult.

2. Individuals are seen primarily as investors actively building and deploying their human capital.

3. Individuals are able to develop their natures and express their diverse qualities.

4. Individuals are able to participate in determining the nature of their association.

5. The liberty of some individuals is not at the expense of others.

6. Individuals have accountability and obligations both to themselves and to the organization.

Performance Management System...!!!

Performance is understood as achievement of the organization in relation with its set goals. It includes outcomes achieved, or accomplished through contribution of individuals or teams to the organization’s strategic goals. The term performance encompasses economic as well as behavioural outcomes. Brumbach views performance more comprehensively by encompassing both behaviors and results. He is of the view that behaviors as ‘outcomes in their own right’, which ‘can be judged apart from results’. Performance is an impact. The roles of any manage can be seen in three parts: Being, Doing and Relating.

Being it is concerned with the competencies of the manage that are relevant to his/her performance. It is preparedness of the mind of the manager. Doing focuses on the manage activities that are variably effective at different levels in the organization: that affect performance of other roles dependent on the manage output, and the organizational performance as a whole. As someone said, ‘Ideas are funny little things. They won’t work unless you do.’

‘Relating’ emphasizes the nature of relationships with members of the role network-vertical, horizontal or otherwise. Performance has a linkage with the individual potential and how best it is realized by the individual. With regard to manage, his/her potential becomes the input to the productive process and performance is the output.

Appraisee’s Potential is determined when a set of tasks are assigned to him. It is also related to performance standards set.

Task-related activities refer to appraisee’s or supervisors involvement to achieve the allocated task or meet expectations in the given task environment.

Performance is what the appraisee’s actually achieve. Performance in a role refers to the extent to which the appraisees achieve the purpose for which the role is created.

‘Choice, not chance’, they say, ‘determines destiny’. The actual performance of an appraisee is a function of several forces, internals as well as external to the organization-some of choice, some of chance. Most organizations do not take these forces into account-either systematically or intuitively-while building expectations from an appraisee. An appraisee in her task environment could be subject to some of the influences and factors shown in Exhibit.

In this framework, Organizational Relevant Environment, Role Purpose or Objective, Stakeholder Expectations, Role Technology and Input Role or Vendor Contribution are inputs to the appraisee’s performance. These are substantially known, and are the factors and forces, which organizational expectations from the Appraisee Performance can reasonably be predicted.

Role Design, Appraisee Potential, Managerial Leadership, Competing and Collaborating Colleagues, and Group Climate are throughput factors that can be optimized by a manager to enhance the Appraisee Performance. These determine whether the organization’s performance expectations from a appraisee are realistic. As such, throughput factors are the core concerns of PM.

It can be argued that Role Design and Appraisee Potential are, in fact, input factors. However, a manager can modify-enhance or stretch-these factors by improving the fit between the appraisee’s capacities, resources and role requirements, PMS would assume these as throughput factors.

Role Output or Appraisee Performance is the end-result-the effect for which we work. This is the variable that is predicted or planned. It is invariably observable and measurable. The behavior of all organisms is goal-directed. As such, people performance is not only a sequence of causes and effects; it is a chain of sub-goals and actions, leading towards the ultimate goal. In fact, when a appraisee has a goal, he/she behaves as if she is following some signposts that create a healthy expectancy in him/her to reach the goal.

Role Purpose or Objective sets the boundary for the goal(s). It is a reference point for Stockholder’s Expectation.

Appraisee Potential corresponds to the role to which an appraisee is assigned and the inputs he/she receives to fulfill the role purpose. It stretches or contracts depending upon the Group Climate, the behavior of the Competing and Collaborating Colleagues, and the Managerial Leadership. 

The actual realization of an appraisee’s potential depends heavily on:

v  Group and Organizational Purpose.

v  Group or Organization Capacities and Resources.

v  Human Climate in the Group or the Organization.

v  Quality of Up-stream or Vendor Inputs.

v  Feedback on Performance.

Role Design is fashioned by the organizing process. The sole purpose of organizing and designing a role is to provide a vehicle for implementing performance plans and expectations. It determines the requisite competencies, knowledge and skills. Role design predominantly determines task-related attributes needed by the appraisee. Managerial Leadership predominantly determines the behavioral attributes needed by the appraisee. Leadership role of the manager and managerial style of the leader are also major determinants of the appraisee’s development and his/her job satisfaction. Managerial leadership and group climate have considerable influence on each other.

Group Climate - The internal psychological environment of the group-influences the behavior, style and performance of the appraisee. It is also, in turn influenced by the behavior and attitude of the appraisee. Group climate is after all, the collective outcome of thebehavior and attitudes of all the members of the group-the appraisee and all his/her competing and collaborating colleagues, the manager or the leader. People in any group or organization are less anxious about work if both goal clarity and goal agreement are present.

Considerable conflict arises when purposes are unclear or when people disagree on what the priorities should be. Without convergence on goals and priorities, groups or organizations cannot develop a climate that facilitates performance.

Three abilities or forces in an individual are said to be essential for achievement:

1. Icchha-desire or motivation
2. Jnana-knowledge or know-how: and
3. Kriya-action to actualize.

Not much performance achievement has been reported without the creative combination of these three forces which, acting dynamically and in concert, form the core motive force of all people in any organization. Through the medium of performance, an organization is able to effectively achieve what it sets out to. Indeed, it is the people’s capacities and resources that determine an organization’s capability to perform and to satisfy or influence its stakeholders. These capacities and resources reflect a measure of the internal state of an organization that is expressed through its results.

Performance management is a way of systematically managing people for innovation, goal focus, productivity and satisfaction. It is a goal congruent win- win strategy. Its main objective is to ensure success to all appraisees i.e., all task teams who believe in its process, its approach and implementation with sincerity and commitment. The appraisee’s success is reflected in organisations’ bottom line in terms of achieving its planned goals. PMS is an endless spiral, which links several processes such as performance planning, managing performance throughout the year, taking stock of appraisee’s performance and potential. Also it includes recognizing and rewarding success at the end of the year. PMS links these processes in such a way that an individual appraisees’ performance is always oriented towards achieving organisational goals. PMS creates positive goal oriented task motivation and aims at reducing intra-organisational conflict. It is realized that organisations could not be successful if they do not have a good performance management system. Each manager needs to devise his/her own system of managing performance. While some norms of performance management are explicit others are not so clear even to the managers. It is said that standards or expectations that define good performance may be generally understood but are rarely specific. PMS is a holistic, largely participatory and goal congruent process of managing and supervising managers at work. It is understood as a systematic, organized approach to managing and rewarding performance by generating and sustaining positive appraisee (employee) motivation. It is neither the well known system of performance appraisal nor the well talked about system of MBO. Its salient dimensions include performance standards- representing organizational goals and objectives, appraisee recognition and reward.