Structural Configurations For Organizations
Assignment 1:—Structural Configurations for Organizations
Henry Mintzberg (1980) introduced a new way to explain structural configurations by “clustering various functions into groupings and showing their relative size and clout in response to different missions and external challenges” (Bolman & Deal, 2009, p. 78). Other authors offer different ways of looking at this topic.
Using the University online library resources, locate a minimum of four different scholarly sources that offer different approaches on structural configurations for organizations.
Complete the following:
- Pick two extra approaches, one of those being Sally Helgesen’s (1995) “The Web of Inclusion.”
- From the manager’s standpoint, examine the different approaches and provide the pros and cons of each one of them when compared to Mintzberg’s proposal.
Write your initial response in a minimum of 400 words. Apply APA standards to citation of sources.
By Thursday, January 9, 2014, post your responses to the appropriate Discussion Area.
Bolman, L., & Deal, T. (2009). Reframing organizations: Artistry, choice, and leadership(4th ed.). Jossey-Bass.
Helgesen, S. (1995). The Web of Inclusion: A New Architecture for Building Great Organizations. New York: Currency/Doubleday.
Mintzberg, H. (1980). Structure in 5’s: A synthesis of the research on organization design.Management Science, 26(3), 322–341.
Assignment 2: Home Depot Analysis
For this assignment, you will review an article describing a situation in which a business leader used a management approach that proved to be unsuccessful. You will write an analysis that covers the requirements listed in the directions below.
Review the following:
- Charan, R. (2006). Home Depot’s blueprint for culture change. Harvard Business Review, 84(4), 60–70.
Using the University online library resources, locate at least 2 different scholarly sources on the topic.
Write a paper that covers the following:
- Explain what led to an unsuccessful outcome at Home Depot.
- Analyze the Home Depot scenario utilizing the four-frame model (i.e., Structure, HR, Political, and Symbolic).
- Explain which frames were more useful in your analysis and justify your reasoning.
- Explain an experience you have faced in your own career that is similar to the situation presented in this case. Analyze the approach taken and assess its success.
Write a 2–3-page paper in Word format. Utilize at least two scholarly sources in support. Your paper should be written in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; and display accurate spelling, grammar, and punctuation.
By Sunday, January 12, 2014, deliver your assignment to the M2: Assignment 2 Dropbox.
PART TWO The Structural Frame
The Structural Frame
chapter THREE Getting Organized
chapter FOUR Structure and Restructuring
chapter FIVE Organizing Groups and Teams
Bolman, Lee G., Terrence E. Deal. Reframing Organizations: Artistry, Choice, and Leadership, 4th Edition, 4th Edition. John Wiley & Sons P&T, 11/2007. <vbk:9781118178102>.
chapter THREE Getting Organized
It might have looked like chaos, but we always knew what was going on,” says Commander Gary Deal about his service on the aircraft carrier USS Kennedy.1 In Commander Deal’s panoramic view from the bridge, a complex, fast-moving flight deck was relatively easy to read and manage. When fully equipped for deployment, the Kennedy was home to more than five thousand men and women. About half were assigned to the ship and half to the carrier’s air wing. The ship was organized into nineteen departments, while the air wing had nine squadrons. The flight deck was responsible for the safe and efficient launch and recovery of the aircraft. Fifty functional roles were involved in the process. Individuals’ functions were immediately obvious from their uniforms: blue for “grunts,” red for weapons and fire-control personnel, brown for aircraft traffic directors, and purple for fuelers (affectionately referred to as “grapes”). Supervisory personnel wore yellow, safety personnel wore white, and officers on the bridge dressed in standard khaki. The officer of the deck wore a gold-emblazoned baseball cap. The captain had overall command of the ship, while the commander of the air group was in charge of the pilots and aircraft.
In combat, the USS Kennedy‘s primary goal was clear: bombs on target. To reach that objective, all functions had to work together. Anyone’s actions could affect everyone aboard, especially in close quarters under battle conditions. Individuals knew their own jobs even if they were less clear about the big picture. A carrier succeeded only if roles were clear and everybody responded to the chain of command. The performance of the carrier fleet in the Gulf War in the early 1990s and a decade later in Afghanistan, as well as in the more recent 2003 campaign in Iraq, gave ample evidence that warships like the Kennedy can do their job.
A naval carrier can plan for most combat contingencies. The same was not true for New York City’s fire and police departments when they confronted the 9/11 terrorist strikes on the World Trade Center. That day saw countless inspiring examples of individual heroism and personal sacrifice. At the risk of their own lives, emergency personnel rescued thousands of people. Many died in the effort. But extraordinary individual efforts were hindered or thwarted by breakdowns in communication, command, and control. Police helicopters near the north tower radioed that it was near collapse more than twenty minutes before it fell. Police officers got the warning, and most escaped. But the word reached very few firefighters. There was no link between fire and police radios, and the commanders in the two departments could not communicate because their command posts were three blocks apart. It might not have helped if they had talked, because the fire department’s radios were notoriously unreliable in high-rise buildings. The breakdown of communication and coordination magnified the death toll—including 121 firefighters who died when the north tower collapsed. The absence of a clear, workable structure seriously impaired the effectiveness of highly dedicated, skilled professionals who gave their all in an unprecedented catastrophe (Dwyer, Flynn, and Fessenden, 2002).
Comparing the situation aboard the USS Kennedy with rescue efforts at the World Trade Center points to a core premise of the structural lens: clear, well-understood goals, roles, and relationships and adequate coordination are essential to organizational performance. This is true of all organizations: families, clubs, hospitals, businesses, and public agencies. The right structure forms a solid underpinning to combat the risk that individuals, however talented, will become confused, ineffective, apathetic, or hostile. The purpose of this chapter and the next two is to identify the basic ideas and inner workings of a perspective that is fundamental to social endeavors.
We begin our examination of the structural frame by highlighting its core assumptions, origins, and basic forms. The possibilities for designing an organization’s structure, or social architecture, are almost limitless, but any option must address two key questions: How do we allocate responsibilities across different units and roles? And, once we’ve done that, how do we integrate diverse efforts in pursuit of common goals? In this chapter, we explain these basic issues, describe the major options, and discuss imperatives to consider when designing a structure to fit the challenges of a unique situation.
The assumptions of the structural frame are reflected in current approaches to organizational design. These suppositions reflect a belief in rationality and a faith that a suitable array of formal roles and responsibilities will minimize distracting personal static and maximize people’s performance on the job. Where the human resource approach (to be discussed in Chapters Six through Eight) emphasizes dealing with issues by changing people (through training, rotation, promotion, or dismissal), the structural perspective argues for putting people in the right roles and relationships. Properly designed, these formal arrangements can accommodate both collective goals and individual differences.
Six assumptions undergird the structural frame:
1. Organizations exist to achieve established goals and objectives.
2. Organizations increase efficiency and enhance performance through specialization and appropriate division of labor.
3. Suitable forms of coordination and control ensure that diverse efforts of individuals and units mesh.
4. Organizations work best when rationality prevails over personal agendas and extraneous pressures.
5. Structures must be designed to fit an organization’s current circumstances (including its goals, technology, workforce, and environment).
6. Problems arise and performance suffers from structural deficiencies, which can be remedied through analysis and restructuring.
ORIGINS OF THE STRUCTURAL PERSPECTIVE
The structural view has two main intellectual roots. The first is the work of industrial analysts bent on designing organizations for maximum efficiency. The most prominent of these, Frederick W. Taylor (1911), was the father of time-and-motion studies; he founded an approach that he labeled “scientific management.” Taylor broke tasks into minute parts and retrained workers to get the most from each motion and every second spent at work. Other theorists who contributed to the scientific management approach (Fayol,  1949; Urwick, 1937; Gulick and Urwick, 1937) developed principles focused on specialization, span of control, authority, and delegation of responsibility.
A second ancestor of structural ideas is the German economist and sociologist Max Weber. Weber wrote around the beginning of the twentieth century. At the time, formal organization was a relatively new phenomenon. Patriarchy, rather than rationality, was still the primary organizing principle. Patriarchal organizations were dominated by a father figure, a ruler with almost unlimited authority and boundless power. He could reward, punish, promote, or fire on personal whim. Seeing an evolution of new models in late-nineteenth-century Europe, Weber described “monocratic bureaucracy” as an ideal form that maximized norms of rationality. His model outlined several major features:
• A fixed division of labor
• A hierarchy of offices
• A set of rules governing performance
• A separation of personal from official property and rights
• The use of technical qualifications (not family ties or friendship) for selecting personnel
• Employment as primary occupation and long-term career
After World War II, Weber’s work was rediscovered, inspiring a substantial body of theory and research. Blau and Scott (1962), Perrow (1986), Thompson (1967), Lawrence and Lorsch (1967), and Hall (1963), among others, amplified the bureaucratic model. Their work examined relationships among the elements of structure, looked closely at why organizations choose one structure over another, and analyzed the effects of structure on morale, productivity, and effectiveness.
GREATEST HITS FROM ORGANIZATION STUDIES
Hit Number 4: James D. Thompson, Organizations in Action: Social Science Bases of Administrative Theory (New York: McGraw-Hill, 1967)
“Organizations act, but what determines how and when they will act?” (p. 1). That guiding question opens Thompson’s compact, tightly reasoned book. He answers that “organizations do some of the basic things they do because they must—or else! Because they are expected to produce results, their actions are expected to be reasonable, or rational” (p. 1). As Thompson sees them, organizations operate under “norms of rationality,” but rationality is no easy thing to achieve because of the central challenge of uncertainty. “Uncertainties pose major challenges to rationality, and we will argue that technologies and environments are basic sources of uncertainty for organizations. How these facts of organizational life lead organizations to design and structure themselves needs to be explored” (p. 1).
Thompson looked for a way to meld two distinct ways of thinking about organizations. One was to see them as closed, rational systems (as in Taylor’s scientific management and Weber’s theory of bureaucracy). A second viewed them as open, natural systems in which “survival of the system is taken to be the goal, and the parts and their relationships are presumably determined through evolutionary processes” (p. 6). In melding the two, he tried to build on a “newer tradition” emerging from the work of March and Simon (1958, number 10 on our scholars’ list) and Cyert and March (1963, number 2). This tradition viewed organizations as “problem facing and problem solving” in a context of limited information and capacities.
With these premises, Thompson developed a series of propositions about how organizations design and manage themselves as they seek rationality in an uncertain world. The two primary sources of uncertainty, in his view, are technology and the environment. He distinguishes three kinds of technology—pooled, sequential, and reciprocal—each making different demands on communication and coordination. Since demands and intrusions from the environment threaten efficiency, organizations try to increase their ability to anticipate and control the environment and attempt to insulate their technical core from environmental fluctuations. Still another source of uncertainty is the “variable human.” The more uncertainty an organization faces, the more discretion individuals need to cope with it, but greater discretion creates a challenge of controlling its use. “Paradoxically, the administrative process must reduce uncertainty but at the same time search for flexibility” (pp. 157–158).
STRUCTURAL FORMS AND FUNCTIONS
How does structure influence what happens in the workplace? Essentially, it is a blueprint for officially sanctioned expectations and exchanges among internal players (executives, managers, employees) and external constituencies (such as customers and clients). Like an animal’s skeleton or a building’s framework, structural form both enhances and constrains what an organization can accomplish. The alternative design possibilities are virtually infinite, limited only by human preferences and capacity.
We often assume that people prefer structures with more choices and latitude (Leavitt, 1978). But this is not always the case. A study by Moeller (1968), for example, explored the effects of structure on teacher morale in two school systems. One was structured loosely and encouraged wide participation in decision making. The other was tightly controlled, with centralized authority and a clear chain of command. Moeller found the opposite of what he expected: faculty morale was higher in the district with a tighter structure.
United Parcel Service, “Big Brown,” provides a current example of Moeller’s finding. In the company’s early days, UPS delivery employees were “scampering messenger boys” (Niemann, 2007). Since then, computer technology has replaced employee discretion, and every step from pickup to delivery is highly routinized. Detailed instructions specify where and in what order packages are to be placed on delivery trucks. Drivers follow computer-generated routes (which minimize mileage and left turns, to save time and gas). Newly scheduled pickups are automatically inserted into the nearest driver’s route plan. If a driver sees you as he trots to your door, you’ll get a friendly greeting. Look carefully and you’ll notice the truck keys on the ring finger of the left hand. Given such a tight leash, you might expect demoralized employees. But the technology makes the job easier and enables drivers to be more productive. As one remarked with a smile, “We’re happy robots.”
Do these examples prove that a tighter structure is better? Not necessarily. Adler and Borys (1996) argue that the type of structure is as important as the amount or rigidity. There are good rules and bad ones. Formal structure enhances morale if it helps us get our work done. It has a negative impact if it gets in our way, buries us in red tape, or makes it too easy for management to control us. Equating structure to rigid bureaucracy confuses “two very different kinds of machine—machines designed to de-skill work and those designed to leverage users’ skills” (p. 69).
Structure, then, need not be machinelike or inflexible. Structures in stable environments are often hierarchical and rules-oriented. But recent years have witnessed remarkable inventiveness in designing structures emphasizing flexibility, participation, and quality. A prime example is BMW, the luxury automaker whose success formula relies on a combination of stellar quality and rapid innovation. “Just about everyone working for the Bavarian automaker—from the factory floor to the design studios to the marketing department—is encouraged to speak out. Ideas bubble up freely, and there is never a penalty for proposing a new way of doing things, no matter how outlandish. Detroit’s rigid and bloated bureaucracies are slow to respond to competitive threats and market trends, while BMW’s management structure is flat, flexible, entrepreneurial—and fast. That explains why, at the very moment GM and Ford appear to be in free fall, BMW is more robust than ever. The company has become the industry benchmark for high-performance premium cars, customized production, and savvy brand management” (Edmondson, 2006, p. 72).
Dramatic changes in technology and the business environment have rendered old structures obsolete at an unprecedented rate, spawning a new interest in organizational design (Nadler, Gerstein, and Shaw, 1992; Bryan and Joyce, 2007). Pressures of globalization, competition, technology, customer expectations, and workforce dynamics have prompted organizations worldwide to rethink and redesign structural prototypes. A swarm of items compete for managers’ attention—money, markets, people, and technological competencies, to name a few. But a significant amount of time and attention must be devoted to social architecture—designing structure that allows people to do their best:
CEOs typically opt for the ad hoc structural change, the big acquisition, or a focus on where and how to compete. They would be better off focusing on organizational design. Our research convinces us that in the digital age, there is no better use of a CEO’s time and energy than making organizations work better. Most companies were designed for the industrial age of the past century, when capital was the scarce resource, interaction costs were high, and hierarchical authority and vertically integrated structures were the keys to efficient operation. Today superior performance flows from the ability to fit these structures into the present century’s very different sources of wealth creation [Bryan and Joyce, 2007, p. 1].
BASIC STRUCTURAL TENSIONS
Two issues are central to structural design: how to allocate work (differentiation) and how to coordinate diverse efforts once responsibilities have been parceled out (integration). Even in a group as small and intimate as a family, it’s important to settle issues concerning who does what, when the “what” gets done, and how individual efforts mesh to ensure harmony. Every family will find an arrangement of roles and synchronization that works—or suffer the fallout.
Division of labor—or allocating tasks—is the keystone of structure. Every living system creates specialized roles to get important work done. Consider an ant colony: “Small workers… spend most of their time in the nest feeding the larval broods; intermediate-sized workers constitute most of the population, going out on raids as well as doing other jobs. The largest workers… have a huge head and large powerful jaws. These individuals are… soldiers; they carry no food but constantly run along the flanks of the raiding and emigration columns” (Topoff, 1972, p. 72).
Like ants, humans long ago discovered the virtues of specialization. A job (or position) channels behavior by prescribing what someone is to do—or not do—to accomplish a task. Prescriptions take the form of job descriptions, procedures, routines, protocols, or rules (Mintzberg, 1979). On one hand, these formal constraints can be burdensome, leading to apathy, absenteeism, and resistance (Argyris, 1957, 1964). On the other hand, they help to ensure predictability, uniformity, and reliability. If manufacturing standards, airline maintenance, hotel housekeeping, or prison sentences were left solely to individual discretion, problems of quality and equity would abound.
Once an organization spells out positions or roles, managers face a second set of key decisions: how to group people into working units. They have several basic options (Mintzberg, 1979):
• Functional groups based on knowledge or skill, as in the case of a university’s academic departments or the classic industrial units of research, engineering, manufacturing, marketing, and finance.
• Units created on the basis of time, as by shift (day, swing, or graveyard shift).
• Groups organized by product: detergent versus bar soap, wide-body versus narrow-body aircraft.
• Groups established around customers or clients, as in hospital wards created around patient type (pediatrics, intensive care, or maternity), computer sales departments organized by customer (corporate, government, education, individual), or schools targeting students in particular age groups.
• Groupings around place or geography, such as regional offices in corporations and government agencies or neighborhood schools in different parts of a city.
• Grouping by process: a complete flow of work, as with “the order fulfillment process. This process flows from initiation by a customer order, through the functions, to delivery to the customer” (Galbraith, 2001, p. 34).
Creating roles and units yields the benefits of specialization but creates problems of coordination and control—how to ensure that diverse efforts mesh. Units tend to focus on their separate priorities and strike out on their own, as New York’s police and fire departments did on 9/11. The result is suboptimization, an emphasis on achieving unit goals rather than focusing on the overall mission. Efforts become fragmented, and performance suffers.
This problem plagued Tom Ridge, who was named by President George W. Bush as the director of homeland security in the aftermath of the terrorist attacks. Ridge struggled to pull together previously autonomous agencies. But he was more salesman and preacher than boss—he lacked the authority to compel compliance. Ridge’s slow progress led President Bush to create a cabinet-level Department of Homeland Security. The goal was to cluster independent security agencies under one central authority. Unfortunately, the new structure created its own problems. Folding the Federal Emergency Management Agency into the mix reduced FEMA’s autonomy and shifted its priorities toward more focus on security and less on disaster management. The same agency that had responded nimbly to hurricanes and earthquakes in the 1990s was slow and ponderous in the aftermath of Hurricane Katrina and lacked authority and budget to move without a formal okay from the new secretary of homeland security (Cooper and Block, 2006).
Successful organizations employ a variety of methods to coordinate individual and group efforts and to link local initiatives with corporation-wide goals. They do this in two primary ways: vertically, through the formal chain of command, and laterally, through meetings, committees, coordinating roles, or network structures. We next look at each of these strategies in detail.
With vertical coordination, higher levels coordinate and control the work of subordinates through authority, rules and policies, and planning and control systems.
The most basic and ubiquitous way to harmonize the efforts of individuals, units, or divisions is to designate a boss with formal authority. Authorities—executives, managers, and supervisors—are officially charged with keeping action aligned with goals and objectives. They accomplish this by making decisions, resolving conflicts, solving problems, evaluating performance and output, and distributing rewards and sanctions. A chain of command is a hierarchy of managerial and supervisory strata, each with legitimate power to shape and direct the behavior of those at lower levels. It works best when authority is both endorsed by subordinates and authorized by superiors (Dornbusch and Scott, 1975). On the USS Kennedy, for example, the chain of command was crystal clear and universally accepted. It is one reason that the ultimate goal—bombs on target—was consistently attained.
Rules and Policies
Rules, policies, standards, and standard operating procedures limit individual discretion and help ensure that behavior is predictable and consistent. Rules and policies govern conditions of work and specify standard ways of completing tasks, handling personnel issues, and relating to customers and other key players in the outer environment. This helps ensure that similar situations are handled in comparable ways. It reduces “particularism” (Perrow, 1986)—responding to specific issues on the basis of personal whims or political pressures unrelated to organizational goals. Two citizens’ complaints about a tax bill are supposed to be treated similarly, even if one citizen is a prominent politician and the other a shoe clerk. Once a situation is defined as one where a rule applies, the course of action is clear, straightforward, and, in an ideal world, almost automatic.
A standard is a benchmark to ensure that goods and services maintain a specified level of quality. Measurement against the standard makes it possible to identify and fix problems. During the 1970s and 1980s, American manufacturing standards lagged, while Japanese manufacturers were scrupulous in ensuring that high standards were widely known and universally accepted. In one case, an American company ordered ball bearings from a Japanese plant. The Americans insisted on what they saw as an unusually high standard—only twenty defective parts per thousand. When the order arrived, it included a separate bag of twenty defective bearings, and a note: “We were not sure why you wanted these, but here they are.” Pressure for world-class quality spawned growing interest in “Six Sigma,” a statistical standard of near perfection (Pyzdek, 2003). Although Six Sigma has raised quality standards in many companies around the world, its laser focus on measurable aspects of work processes and outcomes has sometimes hampered creativity in innovative companies such as 3M (Hindo, 2007, pp. 8–12). Safer, more measurable options may crowd out the elusive breakthroughs a firm needs.
Standard operating procedures (SOPs) reduce variance in routine tasks that have little margin for error. Commercial airline pilots typically fly with a different crew every month. Cockpit actions are tightly intertwined, the need for coordination is high, and mistakes can kill. SOPs consequently govern much of the work of flying a plane. Pilots are trained extensively in the procedures and seldom violate them. But a significant percentage of aviation accidents occur in the rare case that someone does. More than one airplane has crashed on takeoff because the crew missed a required checklist item.
SOPs can fall short, however, in the face of “black swans” (Taleb, 2007)—freak surprises that the SOPs were never designed to handle. In the 9/11 terrorist attacks, pilots followed standard procedures for dealing with hijackers: cooperate with their demands and try to get the plane on the ground quickly. These SOPs were based on a long history of hijackers who wanted to make a statement, not wreak destruction on a suicide mission. Passengers on United Airlines flight 93, who had learned via cell phones that the hijackers were using aircraft as bombs rather than bully pulpits, abandoned this approach. They lost their lives fighting to regain control of the plane, but theirs was the only one of four hijacked jets that failed to devastate a high-profile building.
Planning and Control Systems
Reliance on planning and control systems—forecasting and measuring—has mushroomed since the dawn of the computer era. Retailers, for example, need to know what’s selling and what isn’t. Point-of-sale terminals now yield that information instantly. Data flow freely up and down the hierarchy, greatly enhancing management’s ability to oversee performance and respond in real time.
Mintzberg (1979) distinguishes two major approaches to control and planning: performance control and action planning. Performance control imposes concrete outcome objectives (for example, “increase sales by 10 percent this year”) without specifying how the results are to be achieved. Performance control measures and motivates individual efforts, particularly when targets are reasonably clear and calculable. Locke and Latham (2002) make the case that clear and challenging goals are a powerful incentive to high performance. Performance control is less successful when goals are ambiguous, hard to measure, or of dubious relevance. A notorious example was the use of enemy body counts by the U.S. Army to measure combat effectiveness in Vietnam; field commanders became obsessed with “getting the numbers up.” The numbers painted a picture of progress, even as the war was being lost.
Action planning specifies methods and time frames for decisions and actions, as in “increase this month’s sales by using a companywide sales pitch” (Mintzberg, 1979, pp. 153–154). Action planning works best when it is easier to assess how a job is done than to measure its product. This is often true of service jobs. McDonald’s has very clear specifications for how counter employees are to greet customers (for example, with a smile and a cheerful welcome). United Parcel Service has a detailed policy manual that specifies how a package should be delivered. The objective is customer satisfaction, but it is easier to monitor employees’ behavior than customers’ reactions. An inevitable risk in action planning is that the link between action and outcome may fail. When that happens, employees may get bad results by doing just what they’re supposed to do.
People’s behavior is often remarkably untouched by commands, rules, and systems. Lateral techniques—formal and informal meetings, task forces, coordinating roles, matrix structures, and networks—pop up to fill the void. Lateral forms are typically less formal and more flexible than authority-bound systems and rules. They are often simpler and quicker as well.
Formal gatherings and informal exchanges are the cornerstone of lateral coordination. All organizations have regular meetings. Boards confer to make policy. Executive committees gather to make strategic decisions. In some government agencies, review committees (sometimes known as “murder boards”) convene to examine proposals from lower levels. Formal meetings provide a lion’s share of lateral harmonization in relatively simple, stable organizations—for example, a railroad with a predictable market, a manufacturer with a stable product, or a life insurance company selling standard policies.
But informal contacts and exchanges are vital to take up slack and glue things together in fast-paced, turbulent environments. Pixar, the animation studio whose series of hits has included Toy Story, Finding Nemo, The Incredibles, and Cars, relies on a constant stream of informal connections among managers and engineers in its three major groups. Technologists develop graphic tools, artists create stories and pictures, and production experts knit the pieces together in the final film. “What makes it all work is [Pixar’s] insistence that these groups constantly talk to each other. So a producer of a scene can deal with the animator without having to navigate through higher-ups” (Schlender, 2004, p. 212).
As organizations become more complex, the demand for lateral communication mushrooms. Additional face-to-face coordination devices are needed. Task forces assemble when new problems or opportunities require collaboration of diverse specialties or functions. High-technology firms rely heavily on project teams or task forces to synchronize the development of new products or services.
Coordinating roles or units use persuasion and negotiation to help others dovetail their efforts. These are essentially boundary-spanners, individuals or groups with diplomatic status who are artful in dealing across specialized turfs. For example, a product manager in a consumer goods company, responsible for the performance of a laundry detergent or low-fat snack, has what is primarily a coordinating role, spending much of the day pulling together functions essential to the product’s success: research, manufacturing, marketing, and sales.
Beginning in the 1960s, many organizations in unwieldy environments developed matrix structures. By the mid-1990s, Asea Brown Boveri (ABB), the electrical engineering giant, had grown to encompass some thirteen hundred separate companies and more than two hundred thousand employees worldwide. To hold this complex collection together, ABB developed a matrix structure crisscrossing approximately a hundred countries with about sixty-five business sectors (Rappaport, 1992). Each subsidiary reported to both a country manager (Sweden, Germany, and so on) and a sector manager (power transformers, transportation, and the like). The design carried the inevitable risk of confusion, tension, and conflict between sector and country managers. ABB tried to create structural cohesion at the top with a small executive coordinating committee (thirteen individuals from eight countries), an elite cadre of some five hundred global managers, and a policy of communicating in English, even though it was a second language for most employees.
The structure worked through the 1990s, and ABB became one of Europe’s most admired companies. But the inherent tensions eventually took a toll, and after a business downturn in 2000, ABB began to generate more bad news than good (Reed and Sains, 2002). Nonetheless, variations on ABB’s structure—a matrix with business or product lines on one axis and countries or regions on the other—are common in global corporations.
Networks have always been around, more so in some places than others. Cochran (2000) describes how both Western and Japanese firms doing business in China in the nineteenth and twentieth centuries had to adapt their hierarchical structures to accommodate powerful social networks of merchants and workers deeply embedded in Chinese culture. One British firm tried for years, with little success, to limit the control of “Number Ones” (who headed local networks based on kinship and birthplace) over the hiring and wages of its workforce. The proliferation of information technology beginning in the 1980s led to an explosive growth of computer networks—everything from small local grids to the global Internet. These powerful new lateral communication devices often supplanted vertical strategies and spurred the development of network structures within and between organizations (Steward, 1994). Powell, Koput, and Smith-Doerr (1996) describe the mushrooming of “interorganizational networks” in fast-moving fields like biotechnology, where knowledge is so complex and widely dispersed that no organization can go it alone. They give an example of research on Alzheimer’s disease that was carried out by thirty-four scientists from three corporations, a university, a government laboratory, and a private research institute.
Many large global corporations have evolved into interorganizational networks (Ghoshal and Bartlett, 1990). Horizontal linkages supplement and sometimes supplant vertical coordination. Such a firm is multicentric: initiatives and strategy emerge from many places, taking shape through a variety of partnerships and joint ventures.
DESIGNING A STRUCTURE THAT WORKS
In designing a structure that works, managers have a set of options for dividing up the work and coordinating multiple efforts. Structure needs to be designed with an eye toward desired ends, the nature of the environment, the talents of the workforce, and the available resources (such as time, budget, and other contingencies). The options are summarized in Exhibit 3.1.
Vertical or Lateral?
As noted, vertical coordination rests on top-down command and control. It is efficient but not always effective, and it depends on employees’ willingness to follow directives from above. More decentralized and interactive lateral forms of coordination are often needed to keep top-down control from stifling initiative and creativity. Lateral coordination is often more effective but costlier than its vertical counterparts. A meeting, for example, provides an opportunity for face-to-face dialogue and decision making, but risks squandering time and energy. Personal and political agendas often undermine the meeting’s purpose. A task force fosters creativity and integration around pressing problems but may divert attention from ongoing operating issues. The effectiveness of coordinators who span boundaries depends on their credibility and skills in handling others. Coordinators are also prone to schedule meetings that take still more time from actual work (Hannaway and Sproull, 1979). Matrix structures provide lateral linkage and integration but are notorious for creating conflict and confusion. Networks are inherently difficult to manage.
Exhibit 3.1. Basic Structural Options.
Organizations have to use both vertical and horizontal procedures for coordination. The optimal blend of the two depends on the unique challenges in a given situation. Vertical coordination is generally superior if an environment is stable, tasks are well understood and predictable, and uniformity is essential. Lateral communications work best when a complex task is performed in a turbulent, fast-changing environment. Every organization must find a design that works for its circumstances. Consider the contrasting structures of two highly successful organizations: McDonald’s and Harvard University.
MCDONALD’S AND HARVARD: A STRUCTURAL ODD COUPLE
McDonald’s, the company that made the Big Mac a household word, has been enormously successful. For forty years after its founding in the 1950s, the company was an unstoppable growth engine that came to dominate the worldwide fast-food business. McDonald’s has a relatively small staff at its world headquarters near Chicago; the vast majority of its employees are salted across the world in more than 31,000 local outlets. But despite its size and geographic reach, McDonald’s is a highly centralized, tightly controlled organization. Most major decisions are made at the top.
Managers and employees of McDonald’s restaurants have limited discretion about how to do their jobs. Their work is controlled by technology; machines time french fries and measure soft drinks. The parent company uses powerful systems like its “Global Restaurant Operations Improvement Process” to ensure that customers get what they expect and a Big Mac tastes about the same whether purchased in New York, Beijing, or Moscow. Guaranteed standard quality inevitably limits the discretion of people who own and work in individual outlets. Cooks are not expected to develop creative new versions of the Big Mac or Quarter Pounder. Creative departures from standard product lines are neither encouraged nor tolerated on a day-to-day basis, though the company has adapted to growth and globalization by increasing its receptivity to new ideas from the field—the Egg McMuffin was created by a local franchisee, and burgers-on-wheels home delivery was pioneered in traffic-choked cities like Cairo and Taipei (Arndt, 2007).
All that structure might sound oppressive, but one of the major McDonald’s miscues in the 1990s resulted from trying to loosen up. Responding to pressure from some frustrated franchisees, McDonald’s in 1993 stopped sending out inspectors to grade restaurants on service, food, and ambience. When left to police themselves, some restaurants slipped badly. Customers noticed, and the company’s image sagged. Ten years later, a new CEO brought the inspectors back to correct lagging standards (David, 2003).
Harvard University is also highly successful. Like McDonald’s, it has a very small administrative group at the top, but in most other respects the two organizations diverge. Even though Harvard is more geographically concentrated than McDonald’s, it is significantly more decentralized. Nearly all of Harvard’s activities occur within a few square miles of Boston and Cambridge, Massachusetts. Most employees are housed in the university’s several schools: Harvard College (the undergraduate school), the graduate faculty of arts and sciences, and various professional schools. Each school has its own dean and its own endowment and, in accordance with Harvard’s philosophy of “every tub on its own bottom,” largely controls its own destiny. Schools have fiscal autonomy, and individual professors have enormous discretion. They have substantial control over what courses they teach, what research they do, and which university activities they pursue, if any. Faculty meetings are typically sparsely attended. If a dean or a department head wants a faculty member to chair a committee or offer a new course, the request is more often a humble entreaty than an authoritative command.
The contrast between McDonald’s and Harvard is particularly strong at the level of service delivery. No one expects individual personality to influence the quality of McDonald’s hamburgers. But everyone expects each course at Harvard to be the unique creation of an individual professor. Two schools might offer courses with the same title but different content and widely divergent teaching styles. Efforts to develop standardized core curricula founder on the autonomy of individual professors.
Why do McDonald’s and Harvard have such radically different structures? Is one more effective than the other? Or has each evolved to fit its unique circumstances? In fact, there is no such thing as an ideal structure. Every organization needs to respond to a universal set of internal and external parameters (outlined in Exhibit 3.2). These parameters include the organization’s size, age, core process, environment, strategy and goals, information technology, and workforce characteristics. All these characteristics combine to dictate the optimal social architecture.
Size and Age
Size and age affect structural shape and character. Problems crop up if growth (or downsizing) is not matched with fine-tuning of roles and relationships. A small, entrepreneurial organization typically has very simple, informal architecture. Growth spawns formality and complexity (Greiner, 1972; Quinn and Cameron, 1983). If carried too far, this leads to the suffocating bureaucratic rigidity often seen in large, mature enterprises.
Exhibit 3.2. Structural Imperatives.
In the beginning, McDonald’s was not the tightly controlled company it is today. It began as a single hamburger stand in San Bernardino, California, owned and managed by the McDonald brothers. They virtually invented the concept of fast food and their stand was phenomenally successful. The two tried to expand by selling franchise rights, with little success. They were making more than enough money, disliked travel, and had no heirs. If they were richer, said one brother, “we’d be leaving it to a church or something, and we didn’t go to church” (Love, 1986, p. 23).
The concept took off when Ray Kroc arrived on the scene. He had achieved modest success selling milk shake machines to restaurants. When many of his customers began to ask for the McDonald’s milk shake mixer, he decided to visit the brothers. Seeing the original stand, Kroc realized the potential: “Unlike the homebound McDonalds, Kroc had traveled extensively, and he could envision hundreds of large and small markets where a McDonald’s could be located. He understood the existing food services businesses, and understood how a McDonald’s unit could be a formidable competitor” (Love, 1986, pp. 39–40). Kroc persuaded the McDonald brothers to let him take over the franchising effort. The rest is history.
Structure is ideally built around an organization’s basic method of transforming raw materials into finished products. Every organization has a core technology that includes at least three elements: raw materials, activities that turn inputs into outputs, and underlying beliefs about the links among inputs, activities, and outcomes (Dornbusch and Scott, 1975).
Core technologies vary in clarity, predictability, and effectiveness. Assembling a Big Mac is relatively routine and programmed. The task is clear, most potential problems are known in advance, and the probability of success is high. Its relatively simple core technology allows McDonald’s to rely mostly on vertical coordination.
In contrast, Harvard’s two core processes—research and teaching—are far more complex and less predictable. Teaching objectives are knotty and amorphous. Unlike hamburger buns, students are active agents. Which teaching strategies best yield desired results is more a matter of faith than of fact. Even if students could be molded predictably, mystery surrounds the knowledge and skills they will need to succeed in life. This uncertain technology, greatly dependent on the skills and knowledge of highly educated professionals, is a key source of Harvard’s loosely coordinated structure.
Core technologies often evolve, and significant technical innovation calls for corresponding structural alterations (Barley, 1990). In recent decades, struggles to integrate new technologies have become a fateful reality for many firms (Henderson and Clark, 1990). Existing arrangements often get in the way. Companies are tempted to mold innovative technologies to fit their existing operations. A change from film to digital photography, slide rules to calculators, or “snail mail” to e-mail gives an advantage to start-ups less committed to the old ways. Christensen (1997) found this in his study of the disk drive industry from 1975 to 1994, for example. Innovation in established firms was often blocked not by technical challenges but by marketers who argued, “Our customers don’t want it.”
Organizations try to insulate internal operations from outside pressures, but changing environments are a potent force. Organizations depend on the environment to provide raw materials and consume products and services. Stable, mature businesses—such as railroads, furniture manufacturers, and elementary schools—deal with slow-changing and predictable external pressures. As a result, they rely on simpler forms of organizing. Organizations with rapidly changing technologies or markets—such as high-technology electronics firms—confront a much higher degree of uncertainty. New products may be obsolete in six months or less. Uncertainty and turbulence press for new roles and more elaborate, flexible approaches to vertical and lateral coordination.
Some organizations are more susceptible to outside influences than others. Public schools, for example, are highly vulnerable to external pressures because they have so little capacity to claim the resources they need or to shape the results they are supposed to produce. In contrast, an institution like Harvard is insulated from such intrusions by its size, elite status, and large endowment. The university can therefore afford to offer low teaching loads, generous salaries, and substantial autonomy to its faculty. A Harvard diploma is taken as sufficient evidence that instruction is having its desired effect.
Strategy and Goals
Strategic decisions are future oriented, concerned with long-term direction (Chandler, 1962; Mintzberg, 1994). Across sectors, a major task of organizational leadership is “the determination of long-range goals and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals” (Chandler, 1962, p. 13).
A variety of goals are embedded in strategy. In business firms, goals such as profitability, growth, and market share are relatively specific and easy to measure. Goals of educational or human services organizations are typically much more diffuse: “producing educated men and women” or “improving individual well-being.” This is another reason Harvard adopts a more decentralized, loosely integrated system of roles and relationships.
Historically, McDonald’s had fewer, more easily quantifiable, and less controversial goals than those of Harvard. This aligned well with the McDonald’s centralized, top-down structure. But that structure has become more complex as the company’s size and global reach have fostered levels of decentralization that allowed outlets in India to offer vegetarian cuisine and those in France to run ads attacking Americans and American beef (Tagliabue, 1999; Stires, 2002; Arndt, 2007).
To complicate matters still further, stated goals are not the only ones an organization pursues. Westerlund and Sjostrand (1979) suggest various others:
• Honorific: Fictitious goals with desirable qualities.
• Taboo: Goals pursued but not talked about.
• Stereotypical: Goals any reputable organization should have.
• Existing: Goals quietly pursued even though inconsistent with stated values and self-image.
Understanding linkages among goals, structure, and strategy requires a look beyond formal statements of purpose. Schools, for example, are often criticized if structure does not coincide with the official goal of scholastic achievement. But schools have other, less visible goals. One is character development, often espoused with little follow-through. Another is the taboo goal of certification and selection, as schools channel students into tracks and sort them into careers. Still a third goal is custody and control—keeping kids off the streets and out from underfoot. Finally, schools often herald honorific goals such as excellence. Strategy and goals shape structure, but the process is often complex and subtle (Dornbusch and Scott, 1975).
New technologies continue to revolutionize the amount of information available and the speed at which it travels. Once accessible exclusively to top-level or middle managers, information is now easy to get and widely shared. E-mail has made communication immediate and far reaching. With the press of a key, anyone can reach another person—or an entire network. All this makes it possible to move decisions closer to the action.
In the 2003 invasion of Iraq, for example, U.S. and British forces had an obvious advantage in military hardware. They also had a powerful structural advantage because their superior information technology let them develop a much more flexible and decentralized command structure. Commanders in the field could change their plans immediately in response to new developments. Iraqi forces, meanwhile, had a much slower, more vertical structure that relied on decisions from the top. A major reason that Iraqi resistance was lighter than expected in early weeks was that commanders had no idea what to do when they were cut off from their chain of command (Broder and Schmitt, 2003).
Later, however, the structure and technology so effective against Iraq’s military had much more difficulty with the rising resistance movement, which evolved a loosely connected structure of entrepreneurial local units that could adapt quickly to U.S. tactics. New technologies like the Internet and cell phones enabled the resistance to structure itself as a network, or “complex adaptive system” (Waldrop, 1992, p. 145)—a set of loosely connected units, each pursuing its own agenda in response to local conditions. The absence of strong central control in such networks can be a virtue because local units can adapt very fast to new developments and because the loss of any one outpost does little damage to the whole.
By increasing the flow of information, improved technology reduces uncertainty. Galbraith (1973) defines uncertainty as the difference between the information an organization has and the information it needs. One way that organizations reduce this gap is by increasing their ability to process information (with information systems, for example). A second alternative is to reduce the need for information by creating self-contained units (which can work on their own using information at hand) or by adding slack resources (extra copying machines or support staff, for example, so that people don’t have to fight over access).
Information technology has made flatter structures both possible and inevitable because “the information-based organization needs far fewer levels of management than the traditional command-and-control model” (Drucker, 1989, p. 20). As technology spread in the late twentieth century, organizations around the world made deep cuts in both management levels and support staff, a process that still continues.
Nature of the Workforce
Human resource requirements have changed dramatically in recent decades. Many lower-level jobs now require higher levels of skill. A better-educated workforce expects and often demands more discretion in daily work routines. Increasing specialization has professionalized many functions. Professionals typically know more than their supervisors about technical aspects of their work. They expect autonomy and prefer reporting to professional colleagues. Trying to tell a Harvard professor what to teach is an exercise in futility. In contrast, giving too much discretion to a youthful, low-skilled McDonald’s worker could become a disaster for both employee and customers.
Dramatically different structural forms are emerging as a result of changes in workforce demographics. Deal and Kennedy (1982) predicted early on the emergence of the atomized or network organization, made up of small, autonomous, often geographically dispersed work groups tied together by information systems and organizational symbols. Drucker makes a similar observation in noting that businesses increasingly “move work to where the people are, rather than people to where the work is” (1989, p. 20).
Challenges of Global Organization
In sum, numerous forces affecting structural design create a knotty mix of challenges and tensions. It is not simply a matter of deciding whether we should be centralized like McDonald’s or decentralized like Harvard. Many organizations find that they have to do both and somehow accommodate the competing structural tensions.
Two electronics giants, Matsushita in Japan and Philips in the Netherlands, have competed with one another around the globe for half a century. Over time, Matsushita developed a strong headquarters, while Phillips was more decentralized, with strong units in different countries. The pressures of global competition pushed both to become more alike (Bartlett, 2006). Philips struggled to gain the efficiencies that come from selling the same products around the world. Meanwhile, as Matsushita gradually discovered, “No company can operate effectively on a global scale by centralizing all key decisions and then farming them out for implementation. It doesn’t work.… No matter how good they are, no matter how well supported analytically, the decision-makers at the center are too far removed from individual markets and the needs of local customers” (Ohmae, 1990, p. 87).
The structural frame looks beyond individuals to examine the social architecture of work. Though sometimes equated with red tape, mindless memos, and rigid bureaucrats, the approach is much broader and more subtle. It encompasses the freewheeling, loosely structured entrepreneurial task force as well as the more tightly controlled railway company or postal department. If structure is overlooked, an organization often misdirects energy and resources. It may, for example, waste time and money on massive training programs in a vain effort to solve problems that have much more to do with social architecture than people’s skills or attitudes. It may fire managers and bring in new ones, who then fall victim to the same structural flaws that doomed their predecessors.
At the heart of organizational design are the twin issues of differentiation and integration. Organizations divide work by creating a variety of specialized roles, functions, and units. They must then use both vertical and horizontal procedures to lash the many elements together. There is no one best way to organize. The right structure depends on prevailing circumstances and considers an organization’s goals, strategies, technology, people, and environment. Understanding the complexity and variety of design possibilities can help create formal prototypes that work for, rather than against, both people and collective purposes.
1. The supercarrier USS Kennedy was decommissioned in May 2007 after almost forty years of service.
Bolman, Lee G., Terrence E. Deal. Reframing Organizations: Artistry, Choice, and Leadership, 4th Edition, 4th Edition. John Wiley & Sons P&T, 11/2007. <vbk:9781118178102#outline(3)>.
chapter FOUR Structure and Restructuring
Larry Summers took the helm as president of Harvard in 2001. An economist and former U.S. treasury secretary, Summers concluded that the venerable university needed an overhaul. From the president’s office, he issued a series of authoritative new directives. He attacked the undergraduate grading system, in which half of the students received A’s and 90 percent graduated with honors. He stiffened standards for awarding tenure, encouraged more foreign study, and asked faculty (especially senior professors) to spend more time with students. He stepped across curricular boundaries to call for an emphasis on educational reform and more interdisciplinary courses. He proposed a center for medicine and science to encourage more applied research. Finally, he announced a bold move to build an additional campus across the Charles River to house new growth and development. Summers’s initiatives aimed to tighten Harvard’s famously decentralized structure and to imbue the president’s office with more clout.
How did his plans pan out? Prior experience with restructuring teaches that a crash was likely, and, in this instance, it was a big one. Summers was forced out after the shortest term for a Harvard president in more than a century.
Major initiatives to redesign structure and processes have often proved neither durable nor beneficial. Moving from designing a structure to putting all the parts in place and satisfying every interested party is difficult and hazardous. The attempt after the 9/11 attacks to bring related agencies under the Homeland Security umbrella provides another example of the perils of restructuring. We can get an idea of the effects of this attempt by looking at one organization—the Federal Emergency Management Agency (FEMA).
Before 9/11, FEMA was an autonomous operation. Its main goal was to respond to domestic disasters caused by hurricanes, earthquakes, and other whims of Mother Nature. FEMA was created in 1979 by a stroke of President Jimmy Carter’s official pen. It was an effort to integrate separate emergency agencies—hurricane, earthquake, flood—under a single authority. The hitch was that the blend also included Mount Weather, a super-secret national counterespionage group that was housed in separate quarters, replete with guards and other accoutrements shrouding a clandestine operation. This self-styled elite dismissed their colleagues in the rest of FEMA as a “bunch of weenies who went out and chased storms” (Cooper and Block, 2006, p. 55). In fact, FEMA was a two-headed agency. Structurally, as a disaster relief agency, it was itself a disaster, provoking an insider’s comment, “How can you help others when you can’t even take care of yourself?” (p. 56).
Enter James Lee Witt, a political appointee tapped to head FEMA in 1993, who promised to remake the agency into an integrated organization capable of delivering the goods when disaster struck. He envisioned catastrophes as political opportunities to showcase taxpayers’ dollars at work. One of his first actions was to restructure FEMA to focus on disaster relief rather than splitting its mission to encompass national security. He also developed the agency’s role in preparing for rather than just responding to national tragedies.
FEMA demonstrated its new configuration in responding successfully to earthquakes in Seattle and in Northridge, California, as well as other national disasters of the new millennium. But after September 11, 2001, terrorism rather than national disasters topped the federal agenda. FEMA was folded into a new agency, the Department of Homeland Security. Tom Ridge was appointed to head the mix of diverse, previously independent operations. The overarching goal: stop terrorism.
Structurally, the change gave FEMA another reporting level and left its funding for disaster relief vulnerable to the new emphasis on terrorism. The flaws in this arrangement became evident when Hurricane Katrina scored a bull’s-eye on New Orleans. FEMA’s response to the unparalleled disaster sometimes looked like an episode of the Keystone Kops or the Three Stooges. Who was in charge, who reported to whom, and basic logistical decisions appeared more happenstance than planned. More could be learned from CNN than from the official chain of command.
In the usual political blame game, FEMA’s head, Michael Brown, took the hit. But the real culprit was not an individual. It was a restructuring plan that didn’t work out. The core assumptions of the structural frame were overlooked or ignored. The costs in property damage and human lives were enormous, and the reputation of a previously successful government agency was tarnished.
Reorganizing, or restructuring, is a powerful but high-risk approach to improvement. An organization’s structure at any moment represents its resolution of an enduring set of basic tensions or dilemmas. We begin this chapter by describing these dilemmas. Then, drawing on the work of Henry Mintzberg and Sally Helgesen, we describe two unique views of the alternatives organizations may consider in aligning structure with mission and environment. We conclude with several case examples illustrating both opportunities and challenges managers encounter when attempting to create a more workable structural design.
Finding a satisfactory system of roles and relationships is an ongoing, universal struggle. Managers rarely face well-defined problems with clear-cut solutions. Instead, they confront enduring structural dilemmas, tough trade-offs without easy answers.
Differentiation Versus Integration
The tension between allocating work and coordinating sundry efforts creates a classic dilemma, as we saw in Chapter Three. The more complex a role structure (lots of people doing many different things), the harder it is to sustain a focused, tightly coupled enterprise. Think about the challenge facing Larry Summers as he tried to bring a higher level of coordination to a highly decentralized university. As complexity grows, organizations need more sophisticated—and more costly—coordination strategies. Rules, policies, and commands have to be augmented by lateral strategies.
Gap Versus Overlap
If key responsibilities are not clearly assigned, important tasks fall through the cracks. Conversely, roles and activities can overlap, creating conflict, wasted effort, and unintended redundancy. A patient in a prestigious teaching hospital, for example, called her husband and pleaded with him to rescue her before she went crazy. At night, she couldn’t sleep because hospital staff kept waking her up, often to repeat what someone else had already done. Conversely, when she wanted something, her call button rarely produced any response.
As we have seen, the new cabinet-level Department of Homeland Security, created in the wake of the 9/11 terrorist attacks, was intended to reduce gaps and overlaps among the many agencies responsible for responding to domestic threats. Activities incorporated into the new department included immigration, border protection, emergency management, and intelligence analysis. Yet, as noted in Chapter One, the two most prominent antiterrorism agencies, the FBI and the CIA—with their long history of mutual gaps, overlaps, and bureaucratic squabbling—remained separate and outside the new agency (Firestone, 2002).
Underuse Versus Overload
If employees have too little work, they become bored and get in other people’s way. In one physician’s office, for example, members of the clerical staff were able to complete most of their tasks during the morning. After lunch, they filled their time talking to family and friends. As a result, the office’s telephone lines were constantly busy, making it difficult for patients to ask questions and schedule appointments. Meanwhile, nurses were swamped with clients and routine paperwork. Too busy for informal talk with patients, they were often brusque and curt. Patients complained about impersonal care. A better structural balance was accomplished by reassigning many of the nurses’ clerical duties to office staff.
Lack of Clarity Versus Lack of Creativity
If employees are unclear about what they are supposed to do, they often tailor their roles around personal preferences instead of systemwide goals, frequently leading to trouble. Most McDonald’s customers are not seeking novelty and surprise in their burgers and fries. But when responsibilities are overdefined, people conform to prescribed roles and protocols in “bureaupathic” ways. They rigidly follow job descriptions regardless of how much the service or product suffers. “You lost my bag!” an angry passenger shouted, confronting an airline manager. The manager’s response was to inquire, “How was the flight?” “I asked about my bag,” the passenger said. “That’s not my job,” the manager replied. “See someone in baggage claim.” The passenger did not leave a happy customer.
Excessive Autonomy Versus Excessive Interdependence
When individuals or groups are too autonomous, people often feel isolated. Schoolteachers working in self-contained classrooms and rarely seeing other adults may feel lonely and unsupported. Yet efforts to create closer teamwork have repeatedly run aground because of teachers’ difficulties in working together. In contrast, if units and roles are too tightly linked, people are distracted from work and waste time on unnecessary coordination. IBM lost an early lead in the personal computer business in part because new initiatives required so many approvals—from levels and divisions alike—that new products were overdesigned and late to market. Hewlett-Packard’s ability to innovate in the late 1990s was hindered by the same problem.
Too Loose Versus Too Tight
A critical structural challenge is how to hold an organization together without holding it back. If structure is too loose, people go their own way or get lost, with little sense of what others are doing. Structures that are too tight stifle flexibility and cause people to spend much of their time trying to beat the system.
We can see some of the perils of too loose a structure in the former accounting firm Andersen Worldwide, indicted in 2002 for its role in the Enron scandal. Andersen’s Houston office shredded documents and altered memos to cover up its role in Enron’s questionable accounting procedures. At its Chicago headquarters, Andersen had an internal audit team, the Professional Standards Group, which was charged with reviewing the work of regional offices. But unlike other big accounting firms, Andersen let frontline partners closest to the clients overrule its internal audit team. This loose control permitted local discretion, which was a selling point to customers, but it came back to haunt the firm. The lax controls created a situation where “the rainmakers were given the power to overrule the accounting nerds” (McNamee and Borrus, 2002, p. 33).