One of the main factors which affects the performance of individuals at all levels within an organisation is the way in which the organisation itself develops and changes in time. Such changes are often closely related to a companys growth but not necessarily; developments can clearly take place in an organisation which is not increasing in size as such. From analysis of the way in which many organisations have made growth over the years, it is possible to build up a picture of a number of principles of development, which the normal organisation will follow as it develops. These principles cannot be rigidly applied: every organisation is different, and different functions or areas of one company can be at different stages of development at one point in time. However, applied with flexibility, the principles are of value in interpreting company problems and planning future policy. Outline of Principles:
From its inception, an organisation develops by way of several distinct phases. At a particular stage of development, its management style, internal structure and processes will follow a pattern, which will change as the company develops. The move from one phase to another is a natural but challenging process. As the company develops, its original approach no longer copes effectively with the changing demands made upon it; the resulting problems in turn force the company eventually to alter its approach and thus move into the next phase of development. Three main phases of development can be identified:-
o The Pioneering Phase (Phase 1)
o The Scientific Management Phase (Phase 2)
o The Integration Phase (Phase 3) The Pioneering Phase:
Organisations are typically created by one or two people with an idea. They will identify a need for which they feel they can supply a solution (i.e. a new product or a service). They believe there are sufficient markets for the product to make a financial profit and that they have the capacity to create the product. From this sometimes vague origin, the organisation begins. At its outset, all revolves around the individual or individuals with the original idea (the pioneers). They raise the necessary finance from personal resources; relations etc. create the initial market through friends and contacts and provide themselves with the technical and practical expertise necessary to put their idea into production. As the idea takes hold, the pioneer(s) need to bring others into their organisation to share the load, initially on the production and clerical sides. The new entrant to the company is often given only a general picture of the duties; to a large extent they create their own role within an informal and flexible structure. At its height, the following characteristics typify an organisation in the pioneering phase:- Leadership from the Top:
All decisions are taken by the pioneer(s), who have the overall picture of the company. The leadership is autocratic (other employees are expected to do what they are told) but respected and followed as the expert on every aspect of the business. Everyone in the organisation as a result knows what is expected of them. Clear Organisation Goals:
The organisation is geared directly to the needs of its customers; being normally of small size, it can change quickly and easily cope with changes in demand. It is easy for employees to see what the company is trying to do. Informal Organisation:
There are no formal or rigidly defined lines of responsibility and communication. Most information is passed verbally - little paperwork is used. Everyone in the organisation knows, and comes frequently into contact with, most of their colleagues. Dynamic And Informal Operation:
Few procedures or methods are standardised, nor are standards rigidly defined. Forward planning is minimal. Products are tailor-made and the work process is moulded to suit customer needs. In summary, the pioneer runs the business much like a family; loyalty is rewarded and strict paternalistic discipline imposed. For this approach to be successful, the pioneer needs to have a complete and detailed picture of every aspect of company operation and their subordinates must be willing to accept dependency and autocratic leadership. (The latter requirement sometimes leads to the selection of managers who find difficulty in coping when the organisation moves into the next development phase) Crisis Of Phase 1:
The duration of the pioneer phase in a particular organisation is extremely variable and is often closely geared to the personality of the pioneers themselves. This style of organisation depends on the pioneers ability to oversee the companys detailed operation. The phase may end with the retirement or departure of the pioneer when their successor, in the person normally of their son (or another family member) lacks the original pioneers depth of knowledge of the company and technical expertise and, therefore, has to adopt a different style. In other cases, other problems gradually develop which may force the pioneer themselves to modify their approach, if they are able to do so. Typical events which may cause an organisation to move into the next stage of development are:- Growth In Size:
Increasing numbers of employees, size of market and production facilities cause the informality of pioneering management to become inadequate. The top manager can no longer directly control the detailed running of the company. Specialist Techniques:
The increasing complicated nature of the business demands the application of more professional techniques if control is to be kept. (i.e. production planning, cost control and work study). This necessitates a more defined structure of management to avoid confusion between specialists and line management. Succession To The Pioneer:
As already indicated, the successor to the pioneer may not be sufficiently versed in the ways of the company to take as strong a role as leader. Lack Of Capital:
When the pioneer can no longer supply the necessary capital funds for growth, outsiders may be called upon to provide the necessary resources and, in turn, will require a say in how the business is run. The pioneer is no longer free to operate as they personally would like. Better Planning Needed:
The informality and flexibility of day-to-day planning can no longer guarantee to support the increased resources of the company. Planning of all aspects of the company (production, marketing, investment, etc.) needs to be more systematic and longer term. Professional Management:
Experienced managers are introduced from outside the company who are not prepared to function within the paternalistic, autocratic style of pioneering management Where a company can be identified as predominantly in Phase 1 of development, the adequacy of this situation can be judged by considering whether any problems exist in the following areas:- Communication:
o Are instructions failing to reach their destination?
o Does middle management find themselves bypassed by communications between the top managers and the shop floor?
o Do managers and supervisors complain that they are never told anything, or are always the last to hear?
o Are there clashes between line managers and specialists? Job Performance:
o Do some things never get done?
o Does everyone disclaim responsibility?
o Do some things get done several times by different people?
o Do senior management complain that supervisors will not accept responsibility and do not act as part of management?
o Does lower management complain that senior management will not delegate?
o Are there regular arguments between departments? Co-ordination And Planning:
o Are decisions proving to be wrong or not getting made at all?
o Is the company losing production or sales through failing to plan ahead?
o Are standards of quality and quantity of work varying from person to person? Are customer complaints going up?
o Does the company desperately need increased production at reduced unit cost? If the answer is yes to a signification number of these and similar questions, the company would benefit from some of the procedures normally adopted in the second Scientific Management phase development.(See Part 2) The moral right of the author, Jonathan Farrington, has been asserted. All rights reserved. This publication or any part thereof may not be reproduced or transmitted in any form or by any means electronic or mechanical including photocopying, recording, storage in an information retrieval system or otherwise, unless this notification of copyright is retained. |
