Key points:
- Organisational behaviour depends on it structure, sector, nationality, control systems, organisational culture, size, environmental change and strategy. These factors also determine the level of differences between different organisations.
Traditional argument that external environment is uncontrollable, that organisations simply need to adapt as and when external forces change. More contemporary opinions suggest that it is possible for organisations to predict what could happen 10, 20 years down the road, and therefore do the necessary preparations. Thus, it is important for managers to allocate sufficient time looking at the external environment to understand the behaviour and potential change of course.
Environment Volatility
The more we understand the behaviour of external environment and its level of volatility the more we could prepare ourselves for and impacts coming from it. It is argued by academics that rationality, and structured approach to business and organisational management is not a competitive advantage within environment that is volatile. In fact it is a hindrance to success. It should also be noted that environment changes and volatility offers threats as much as opportunities. Good managers are able sense and detect opportunities as well as threats resulting from external changes early enough to make the right decisions.
In ATS, the business division of AP I work with, the business in strong anticipation of business opportunities in some key markets such as Russia, China and Asia Pacific (Malaysia and the surrounding), decided to either open new offices or expand the existing units. Many new engineers as well as other support personnel were hired. To this point, none of these locations have won any new projects. Malaysia has gone from around 150 employees in 2006 to close to 800 today - in 6 months if they remain without any project, chances are that some people will need to go. Likewise Russia and China continue to exist with minimum number of people, hoping to hit a small jackpot some day.
Working environment is essentially a system consisting of environment, people, technology and organisation. It cannot be look at solely as either technical system or social system - the combination of the two that makes it work, i.e. socio-technical.
Emery and Trist (1965) produced 4 classifications of environment:
- Placid, randomised - relatively unchanging and homogeneous whose demands are randomly distributed.
- Placid, clustered - relatively unchanging, but its threats and rewards are clustered. Example, monopoly whereby its existence is dependent of ability to hold over the market it serves.
- Disturbed, reactive - there are competitions between organisations including hindering tactics
- Turbulent field - dynamic and fast changing environment in which organisations must adapt fast to survive
Contingency Theory and Organisational Structure
Contingency theory says that there is no one best solution to every management problem and needs. It all depends on the industry, forces of external environment, organisational structure, dominant nationality, strategic direction of the organisation and various other factors. There are debates on whether organisations aligns its structure of the external environment or to its strategy. The traditional view of organisation structure classifies into two - mechanistic structure and organismic structure. The former is used by organisations that exists in a stable environment whereas that latter in fast changing world (more about the two structures is explained in this post).
Sector
Every organisation is different. For small organisations, the role of managers is more loosely defined, and responsibilities are quite broad. In larger organisations, this is more specifically linked to narrower defined responsibilities. Although there are arguments that every sector and every organisation is different and therefore management theories cannot be applied to all, there are however common problems across all organisation irregardless of size and sectors that can be addressed by the same management theories and frameworks.
Nationality
This simply says that culture of nationality of the people in an organisation could influence the way it is organised and operates. In Germany, the labour law is strong and pro employees that the personnel development plan and performance management system (PMS) simply cannot be implemented. Taking an example of restructuring the IT entity of A in 2008, we could see that it is not easy to change the status quo because there are so many of the employees based in France - and the Workers Union did not make it easy for A. Specifically on culture, it's clearly observed in A that French managers are more relaxed and take more time to complete tasks than the Swiss. Organisation structures in in French units are less flat than those in Switzerland.
Control Systems
Control systems range from totally personal such as supervisor closely monitoring his subordinate, semi impersonal such as through KPIs and balanced scorecards, and totally impersonal through control of machines in an assembly lines. Control systems are also either integrated or fragmented. An example of the former is set of bottom up KPIs or balanced scorecards that are based on a single framework. With the latter, each department may have its own way of managing KPIs and measurement of performance; this will require some sort of consolidations and alignment of tasks report them to top management. The problem with fragmented control systems is that they usually cause conflict with each other. An example in ATS is the recent split of the supplier monitoring group into expediting and quality control. In the past the two functions were done by the one person belonging. Today, we need two persons, each will fight to get his priority and objective done - one will fight to get parts released ASAP by supplier to meet project deadline and the other will do his best to check and make sure only with the right quality can it be shipped (this may need more time than the expeditor could allow). So, who will win ?
A system takes inputs, execute some processes for conversion and produces output and releases it to environment. There are also some systems that take some parts of the outputs and feedback to the input and conversion process - this is called closed loop system. Example of this is budget process.
A closed system does not interact with its external environment whereas open system does. An example of a closed system is the old China that was self-sufficient, not depending on others to survive. Many other systems are open, depending on the external environment for input and use of the output.
Katz ajnd Khan identified 5 sub systems in an organisation:
- Production or technical - basically sub systems directly involved in productions; in the context of A, these are engineering and construction / commissioning
- Supportive - these are supporting functions such and procurement and logistics, HR.
- Maintenance - sub-system supporting breakdowns of activities of production and technical (or even support)
- Adaptive - sub-system concerned with future (looking what future would hold, challenges etc and prepare the organisation to face it.
- Managerial - controlling and coordination. In the context of A, the sectors are essential managerial sub-system.
Managing Conflicts
Conflicts can happen because of diversity (in terms culture, nationalities, gender etc.) and also authority, power. Although diversity usually promises better chance of finding solutions to problems as we tend to have higher level of creativity and many ways of thinking, it also often causes arguments and frictions in a team especially when time is essence and other pressures involved.
Conflicts don't usually show themselves. In most cases these are clear from exchange of strong words, body language, foul language in some cases etc.. But there are situations when conflicts are suppressed - this is dangerous and it's important for managers to be able to detect them (read between the lines? perhaps). Factors why some conflicts are not disclosed or shown are 1) Fear of consequences, 2) Ideas of legitimacy (i.e. one side thinks the other acting legitimately), 3) Exclusion (stakeholders having interest in the issue are not included in discussion), 4) Taken for granted assumptions (i.e. the unhappy person decide to simply go with the decision made as he thinks it's not critical to interject).
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