Organizational Issues

Organizational Issues Organizational Entropy and its Causes Empowerment Organizational Issues, Management of Technological Innovation, KV Patri

Functions of Management • Planning: What?, When?, How? • Delegating: Who? (Organization) • Coordinating and Control • Leadership (Motivation) Strategic Management: Paradigm and Goal setting Organizational Issues, Management of Technological Innovation, KV Patri

Organizational Entropy • Entropy of a system is the degree of disorder, disorganization, lack of patterning, or randomness of the system. Greater the disorder, greater the entropy. • The second law of thermodynamics, in its most general form, states that, left to themselves, all physical systems tend to increase in entropy. • The Second Law applies to human (hence, corporate) systems as well. • To prevent the Second Law from destroying an organization (destroying its innovative spirit) organizations must concentrate on the direction, velocity and acceleration of its entropy. Organizational Issues, Management of Technological Innovation, KV Patri

Causes for increase in organizational entropy • Attraction to success: each succeeding generation of a once successful company loses some of the characteristics that had led the original group to success. • The Peter Principle • Paradigm Problem • Informal Group Formation Organizational Issues, Management of Technological Innovation, KV Patri

The organizational Entropy Conundrum As an organization exerts greater control over its members, its organizational entropy increases. !!!??? This is counter-intuitive but appears to be true. Organizational Issues, Management of Technological Innovation, KV Patri

The Peter Principle • “In any large organization, the most competent individuals at a given level will inevitably get promoted to jobs higher and different (often more complex but less technical) responsibilities, until ultimately they reach a level where they are both nonproductive to the organization and miserable in their job satisfaction[Lawrence Peter in his book The Peter Principle, 1969]. • Corollary: All individuals at the top are incompetent and miserable. Organizational Issues, Management of Technological Innovation, KV Patri

Flaws in Peter Principle: - Does not recognize human ability to adapt. The problem is not associated with incompetent managers being in a good management structure but, rather, with good managers being in a bad management structure. Hence the principle is valid only to the extent that the promotees fail to adapt to the demands of the higher job. • Solutions to the “Peter” Problem: - Ask yourself whether you need to promote at all? Is there another method of rewarding good performance? The major aspect of the problem lies with discrete promotion. Can we focus on continuous job enrichment through dynamic reassignment of jobs? - The dual ladder system. Organizational Issues, Management of Technological Innovation, KV Patri

The Paradigm Problem • Once thought is well established within a given paradigm, optimization tends to take place within the mindset; it is exceedingly difficult for most people to even conceive of another paradigm, and once one is suggested, it is difficult to gain general acceptance of it. • Factors promoting the Paradigm problem: - The forest-for-the trees syndrome: Managers stop looking for new forests. - Only an elite few are responsible for conceiving of new paradigms. -Anticipation of rejection. Failure of past projects. Organizational Issues, Management of Technological Innovation, KV Patri

Some cliches that reinforce the Paradigm Problem • “Let us not reinvent the wheel.” • “You don’t remove the pitcher when he’s winning.” What does it mean by winning? Was IBM winning when it failed to recognize customer demand for more open systems? • “Don’t throw the bay out with the bathe water.” Organizational Issues, Management of Technological Innovation, KV Patri

Solutions to the Paradigm Problem • Formally establish vertically and horizontally integrated groups that are dedicated to creating new paradigms. • Provide real, tangible, and significant incentives for those seeking new paradigms. • Prove new paradigms with pilot test before implementation. • Evolve a financial structure that encourages pursuit of new paradigms. Organizational Issues, Management of Technological Innovation, KV Patri

Organizations should strive to permit free flow of ideas • IBM runs a ‘fellow’ programme in which ‘dreamers, heretics, mavericks and geniuses’ are given virtually free rein up to five years for their working on their notions, concepts and ideas. The role of a fellow is ‘to shake up the system’ • Texas Instruments provides support to innovation through their Individual Contributor program. Organizational Issues, Management of Technological Innovation, KV Patri

The 3M company does the same through its New Business Ventures Division. • Harrison and United Technologies give numerous awards for excellence in inter-divisional technology transfer. • Bachtel urges that every project manager spend fully 20 per cent of her/his time experimenting with new technologies. Organizational Issues, Management of Technological Innovation, KV Patri

Decentralized Locate your Organization National Patterns of Corporate Climate USA Canada Sweden UK Informal Formal Denmark Netherlands Spain Germany Japan Centralized [Trompennars, F., Riding the Waves of Culture, The Economist Books, London, 1993.] Organizational Issues, Management of Technological Innovation, KV Patri

How can a manager promote innovation/creativity • Be willing to absorb the risks taken by subordinates. • Be comfortable with half developed ideas. • Be willing to stretch organizational policy. • Be prepared to make quick decisions. • Be a good listener. • Do not dwell on mistakes. • Focus and gear the pressure to goals. • Foster interpersonal contact. • Give continuous feedback. • Recognize the need for outside stimuli. • Recognize creativity - publicly. • Put up with some innocent foibles • Maintain a balance between need for freedom and the necessity of structure. Organizational Issues, Management of Technological Innovation, KV Patri

Reasons for resisting innovative change • To protect social status. • To protect an existing way of life. • To prevent devaluation of capital invested in the existing facility. • To prevent a reduction of livelihood because the change would devalue the knowledge or skills presently required. • To prevent the elimination of a job or profession. • To avoid expenditure such as the cost of replacing existing equipment. • Because the change conflicts with existing laws. Organizational Issues, Management of Technological Innovation, KV Patri

Reasons for resisting innovation (contd.) • Because the change opposes social customs, fashions and tastes and the habits of everyday life. • Because of rigidity inherent in large or bureaucratic organizations. • Because of personality, habit, fear, equilibrium between individuals or institutions, status and similar social and psychological considerations. • Because of tendency of organized groups to force conformity. • Because of the reluctance of an individual or group to disturb the equilibrium of society or the business atmosphere. Organizational Issues, Management of Technological Innovation, KV Patri

Technimanagement Application of principle that have been proven over time to apply to the effective management of technical organizations Organizational Issues, Management of Technological Innovation, KV Patri

Control • All management strives for control. But over what? And to what end? • We never be able to say unequivocally that a system is “in control,” but we can usually identify when it is not by the obvious consequences but by that time the damage has already been done. • Thus, we can never know whether a particular manager has been ‘good’ until sometime has passed after her/his departure. Organizational Issues, Management of Technological Innovation, KV Patri

Three essential elements of control: Goal: articulation of the highest ideals of the organization. Purpose is to generate specific objectives for which degrees of attainment can be definitely measured. Measurement: To assess the degree of progressive realization of objectives. Correction: To restore the system when the evaluation of measurements shows unacceptable deviation from objectives. Organizational Issues, Management of Technological Innovation, KV Patri

Goal or Goals? • In 1962, John F. Kennedy said “I therefore ask the Congress … to provide the funds … to achieve the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth”. Setting this goal was the beginning of the current technological revolution. The goal had full support all stakeholders. • It is better to focus on one goal. Organizational Issues, Management of Technological Innovation, KV Patri

How do we empower ourselves and others? Give power away! Yes, it’s true. The more power we give to others the more powerful we become. The most powerful managers are those who give consistently insist that others become powerful. Realize that we are all, regardless of our position, seniority, or, job title, players-coaches. We are all playing in the game but we are also coaching one another. We’are team players in the best sense of the word: we have to act as individuals, at the same time relying on others to do their jobs and support us as we support them. Organizational Issues, Management of Technological Innovation, KV Patri

Visualizing ourselves and others in terms of the future, determining what we want to become or accomplish, and then focusing on the vision. Communicating what we and our unit, organization, and company stand for in terms of values. Becoming role models for others; behaving as we expect they will behave. Living by examples. Acknowledging, rewarding, and publicizing incidents in which people behave according to the values we want. Creating entrepreneurial expectations continually, within project teams, units, departments, and the company; expecting people to view business as if it were their own. Organizational Issues, Management of Technological Innovation, KV Patri

Organizational Issues