Al plan de desarrollo vial que compone PESEM se acompaña el Cuadro anexo III-2
2) Cantidad de embarcaciones que hacen escala
Learning outcomes
By the end of this chapter you should be able to:
• define the term organisational structure and evaluate its links to strategy;
• describe and analyse conceptual approaches to the design of organisational structures and discuss their strategic implications;
• identify principal forms of organisational structure and explore their main effects on those who work within them at both a theoretical and practical level;
• analyse the relationship between organisational structure and SHRM.
Summary
• Strategic linkages exist between corporate strategy, organisational structure and human resource strategies, demonstrating the strategic nature of structure.
• Dimensions of organisational structure have been identified that can be used to analyse the nature and evaluate the effectiveness of an organisation’s structure.
• These dimensions indicate the complex range of variables to be understood by managers in deciding how they should structure an organisation’s activities to meet its strategic objectives. They also indicate that the design of organisation’s structure involves managerial or strategic choice.
• Three perspectives were considered that offer explanations about the relationship between the design of organisational structure and strategic effectiveness. These relate to the classical universal, contingency and consistency approaches to the design of organisational structure. A fourth perspective relates to the role of organisational politics and the exercise of power that has already been considered and discussed in depth in Chapter 1.
• Principal forms of organisational structure were reviewed and their effects on those who work within them analysed and evaluated. These forms include: simple; functional; divisionalised; matrix; project-based; network, cellular and virtual structures. Theoretical linkages between these organisational forms and contingency variables have been recognised. The development of these forms indicates some degree of movement from centralised and bureaucratic structures to decentralised and more fluid ones.
• Organisations need to promote human resource strategies that are congruent with the nature of the organisational structure that they chose (or recognise the impact of their structure on their espoused human resource policies and the practice and outcomes of the human resource strategies that they promote).
• Choice of organisational structure has been recognised as leading to a problematic relationship between the respective desires for managerial control, organisational efficiency and responsiveness to external conditions and intended markets. Attempts to maximise centralised managerial control in situations requiring greater organisational responsiveness are likely to affect the pursuit of effectiveness and working relationships adversely.
• Decentralised forms of organisational structure may adversely affect the scope for and nature of organisation-wide human resource strategies. In practice, this is likely to be a function of both the nature of the structural form that is chosen and the strategy of the organisation.
Teaching and learning suggestions
Comment
In general strategy terms one of the most important resources an organisation has is its employees. Within the context of strategic human resource management (SHRM) models and theories a central theme emerging is that people are the organisation’s most important ‘asset’, so how they are organised is crucial to the effectiveness of a strategic approach to the management of human resources (HR). Traditional views about controlling the organisation through structure can be traced back to the early twentieth-century management scientists such as F.W. Taylor and Elton Mayo. These approaches can be directly linked to a view of strategy making that is essentially top-down. Strategy is developed at the top of the organisation and the rest of the organisation including the HR function is utilised as a supporting mechanism in the implementation of the strategy. In this approach to strategic management the organisational structure becomes a method for achieving top-down control. Such principles of control are as bureaucratic or mechanistic. This chapter considers organisational structure in the context of SHRM. The fact that there is a need to regulate the implementation of an HR strategy is accepted but this needs to take of a wide variety of influences into account. For example, the types and range of issue and problems the organisation faces in developing and implementing a strategic approach to the management of its HR. Key issues to consider include:
• The operating environment of the organisation, it may operate in a highly complex or changing environment or in a relatively stable one.
• How diverse is the organisation, for example the needs of a multi-national company with a wide range of products and services and globally dispersed customer base will be dramatically different from those of a small local firm.
• How accountable are the senior executives of the organisation to external influences, for example is the organisation a public body, perhaps reporting to a government minister or is it a publicly quoted company reporting to a board of directors and a variety of internal shareholders or is the business privately owned by a family or group of partners who may be owner managers and have complete control over the current and future direction of the business?
Millmore et al., Strategic Human Resource Management: Contemporary Issues, Instructor’s Manual
40
© Pearson Education Limited 2007
Student preparation
Prior to the class, we believe it is essential that students read and make notes from the chapter. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter.
We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. As standard, we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance.
Students may also be asked to do one or more of the following:
• address pre-set questions and write up their answers briefly in note format;
• complete the self-check and reflect questions and come to the session prepared to share and discuss their responses; and
• familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions.
Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Pre-set questions that we have found useful for structuring student reading, preparatory activities and classroom discussion for the topic of the role of organisational structure in HRM include:
1. How would you define organisational structures and set it into the SHRM context? 2. What are the principal strategic relationships between organisational structures and
corporate strategy and how could they be evidenced in practice?
3. How would you argue the case for and against the formal adoption of structures by organisations?
In the classroom
Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. This avoids providing lecture input that simply repeats what students have already grasped, reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. However, when adopting this approach, we find it useful, once student queries have been exhausted, to provide a snappy summary of key issues.
Where preparing answers to self-check and reflect questions has been set as part of preparation for the teaching session, at least two alternatives present themselves. First, students can be asked to contribute individual responses that are then subjected to plenary discussion. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Second, students can be formed into groups to share their individual answers and draw conclusions from their discussions. However, preparing answers to self-check and reflect questions was not part of preparatory work but consideration
of the questions is to feature as part of the teaching session, we would favour the group approach as a more stimulating approach. In all cases student responses can be considered against our suggested answers, which themselves can be usefully critiqued.
Follow-up work
The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. If they have not already been used as part of class activities, any prior preparation of answers to the self- check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Daimler–Chrysler AG’ will serve as a useful reinforcement to chapter content. Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading.
Answers to Self-Check and Reflect Questions
5.1 Drawing on the dimensions of organisational structure outlined above, use the list of potential organisational consequences from structural deficiencies to evaluate the structure of an organisation known to you.
This question is designed to allow you to relate theory to your own experiences so your response will be individually related to your own reflections. However, hopefully you will have been able to use the dimensions of structure outlined in Concepts Box 5.1 and in the discussion that follows this and to relate these to the consequences of structural deficiencies reported in Concepts Box 5.2. For example, too high a level of standardisation or centralisation may in your evaluation be associated with some of the adverse consequences reported in Concepts Box 5.2. Conversely, your evaluation may judge that the structure within which you work is not affected by such adverse consequences because of the appropriate ways in which these structural dimensions are applied in this organisational context.
5.2 What other criticisms do you think may be made against the classical universal approach to the design of organisational structure?
The classical universal approach is strongly associated with a philosophy of managerialism. Universal principles are advanced in the name of organisational responsiveness and efficiency. However, while they may be seen as furthering short-term managerial interests they neither consider the consequences of those affected, nor, the longer-term implications of some of the practices that may flow from these universal principals. The available literature related to the use of forms of flexibility, leanness and downsizing would support this view about an absence of thinking about these people-centred and longer-term business consequences. While some of the practices associated with this approach may be seen as encouraging employee involvement, this is based on unitarist principles and does not consider more conflictual frames of reference.
5.3 How would you summarise the key differences between the classical universal, contingency and consistency approaches to the design of organisation structure?
Millmore et al., Strategic Human Resource Management: Contemporary Issues, Instructor’s Manual
42
© Pearson Education Limited 2007
The classical universal approach is associated with the identification of so-called best practice principles that may be used in a variety of organisational settings. It is therefore associated with the notion of 'one best way'. The contingency approach requires a more situational analysis and believes that effective organisations will result from a structural design that takes account of the demands created by the environment and the characteristics of the organisation. The consistency approach allows for structural variation based on a broader range of aspects. It highlights the need to analyse the internal fit between the various elements of an organisation's structure to produce a higher level of effectiveness and performance.
5.4 Using the ideas discussed above, how would you summarise ‘organisational fluidity’? ‘Fluidity’ is used, following Clegg and Hardy (1996), as the opposite to, or movement away from, bureaucracy. Bureaucracy is associated with systems of rules and rule-following, division of labour, hierarchy, authority and centralisation. ‘Fluidity’ by contrast is associated with decentralisation, collaboration, the need for participative and entrepreneurial behaviours, alternatives to hierarchy and structures that facilitate these. The later forms described in the section entitled ‘Principal forms of organisational structure and their effects on those who work within them’ progressively describe attempts to construct structures that are intended to produce these outcomes. Of course, the actual incidence of organisations using more radical types of structure is still very much in the minority.
5.5 The discussion in this section has considered the impact of decentralised organisational structures on the development of human resource strategies. How do you think a more centralised and bureaucratic form of organisational structure will affect the development of human resource strategies?
Large organisations based on these principles were associated traditionally with the existence of an internal labour market. For certain groups of employees, this offered a pathway for progression linked to the provision of training and development, incrementally progressive rewards and security of employment. These characteristics are associated with a psychological contract that exchanges security and gradual progression in the organisation for loyalty and commitment. The bureaucratic approach also points to the creation of centralised rules that are likely to include those related to HR. Organisations based on centralised and bureaucratic principles are therefore likely to develop corporate HR strategies that are applied across the organisation.
However, the effects of such corporate HR strategies may be questioned in practice. Those outside particular groups may be excluded from the intentions of these HR strategies, especially in the context of recent developments to differentiate more strongly between core and peripheral groups of workers. Secondly, a centralised and bureaucratic organisational structure is likely to have an adverse impact on the intended outcomes of certain HR strategies in an organisation. Concepts Box 5.2 and related discussion are examples of this type of effect. The impact of structures based around centralised controls and bureaucratic procedures may thus act to impair HR strategies aimed at promoting or improving employees' performance, involvement and commitment. This is likely to indicate a failure by those responsible to appreciate the lack of congruence between the impact of this type of structure and the aims of such HR strategies, if this is indeed their real aim.
Answers to Case study questions
Answers for the Daimler–Chrysler (DC) case study have been presented in the form of a PowerPoint presentation that can be used to respond to class discussion and analysis of the case study.
1 As the HR-Director of DC (Stuttgart, Germany) you are required to develop a ‘suitable HR strategy' and to propose solutions to the problems raised by the actual situation of DC and the intentions of the CEO described above.
State your understanding of the situation at DC and determine the needs of DC (problems within DC and reasons for the new organisational structure); also describe some strategic elements of the organisational structure.