T.

MURUGAN, FMS, VMKVEC, SALEM

INDUSTRIAL DISPUTES
By V S RAMA RAO on AUGUST 21, 2012

The increase of size in industry and their expansion at other locations felt to categorize industries in terms of size, turn over, type of industry such as mass consumable products or luxury items, different regulatory authorities came into existence. The number of employees in different sections, associates in distribution chain increased. This resulted to understand different state & national laws as well as global laws. This along with different labour laws & trade unions were formed and these associations were given power to negotiate working conditions, disputes and there was provision of a periodical review. The environment brought into several disputes between industries and workers, regulatory authorities, taxation department, vendors & distribution chain associates etc. The HR section, have been dealing with internal disputes and Legal section, have been dealing with regulatory authorities etc. The relations between Management and its employees are very important for Industrial Relations and its smooth functioning. Good Industrial Relations will lead to motivated employees as a result this will give rise to enhanced Productivity. If industrial relations are poor employees will be demotivated and productivity would be compromised with a high turnover of staff. Departure of experienced and trained staff would affect the output. This may result into recruitment of new & untrained staff. They would take time to match with trained staff. This will exhaust resources and invite industrial disputes. There may be several types of Industrial Disputes. Unsatisfactory working conditions, wages not at par with peers in other organizations, unfair dismissal, poor staff and boss relations, discrimination and introduction to new technology without specific training, limited growth opportunities. These conditions give rise to dissatisfaction among staff and may lead to demonstration and revolt. The workers form a body under frame work of labour law and elect their office bearers. Trade Unions become an organization, who represents employees views with their employers. Union members elect a committee to represent them in negotiations with the employers. Trade Union helps in increased bargaining power, with their skilled negotiators. They also take
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T.MURUGAN, FMS, VMKVEC, SALEM help of consultants or councillors, to handle bargaining. Trade unions have done greater service to improve job security of workers; hence this resulted in improved living standards of the workers. It also has some limitations, where trade union cannot organize a strike or any other industrial action without getting the majoritys approval. Disputes maybe of several types: Departmental disputes are ones which have received the approval of workers at large. The union must then decide the type and the timing of the settlement. Individuals having charges of integrity or indiscipline has no union approval. A strike without advance notice is an unofficial one. This is unfair and creates a situation that brings embarrassment to the management and unpleasant relationship. Response of Employer Few employers attempt a lock out to dismantle the strike. This can happen when an employer declares lock outs or suspends staff during an industrial dispute. This is viewed as an act to break the strikers morale. A more reasonable approach is to start negotiating a settlement with those involved. This can be resolved with dialogues between employees unions and employers. If unresolved it may lead to help from the Labour Relation Council. Consequences of industrial relations conflict Less productivity, more costs Cut in profits Degrading companys image Hindrance in recruiting new staff Loss of working hours Solution for Industrial Conflicts: Discuss issue with level headed representative of the union. The union would follow the grievance procedure agreed with the employer. If no agreement arrives, representatives can talk directly to the management. If there is no agreement on the issue it can be taken to the Labour Department which provides the conflict resolution services. It there is still no solution then an ARBITRATION SERVICE is provided for group conflict resolution. The industrial disputes, lead to disadvantage for both parties, hence a reasonably good environment should be there in place. There should be activities where their employees and their family members can be involved. There could be welfare programmes from management. Their issues can be resolved and they should be rewarded & self-motivated. Management including
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T.MURUGAN, FMS, VMKVEC, SALEM team leaders have greater responsibility towards all this. A pleasant relationship means, more productivity, better contribution to the economy of the state. ***************************************************************************** *

LATEST ORGANIZATION DESIGNS

By V S RAMA RAO on AUGUST 13, 2012

Many practicing managers are becoming disenchanted with traditional ways of designing their organization. Up until a few years ago, most managers attempted only timid modifications of classical bureaucratic structures and balked at daring experimentation and innovation. However, many of todays managers finally overcome this resistance to making drastic organizational changes. They realize that the simple solutions offered by the classical theories are no longer adequate in the new paradigm environment. In particular the needs for flexibility, adaptability to change, creativity, innovation, knowledge, as well as the ability to overcome environmental uncertainty are among the biggest challenges facing a growing number of organizations. The response has been horizontal network, and virtual organization designs. Horizontal designs replace the traditional vertical, hierarchical organization. The advanced information technology and globalization environment, suggests the use of horizontal structure to facilitate cooperation, teamwork and a custom rather than a functional orientation. A McKinsey & Company consultant is given credit for developing some of the following guiding principles that define horizontal organization design. Organization revolves around the process, not the task. Instead of creating a structure around the traditional functions, the organization is built around its three to five core processes. Each process has an owner and specific performance goals.

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T.MURUGAN, FMS, VMKVEC, SALEM The hierarchy is flattened. To reduce levels of supervision, fragmented tasks are combined, work that fails to add value is eliminated and activities within each process are cut to the minimum. Teams are used to manage everything. Self-managed teams are the building blocks of the organization. The teams have a common purpose and are held accountable for measuring performance goals. Customers drive performance: Customer satisfaction, not profits, or stock appreciation, is the primary driver and measure of performance. Team performance is rewarded. The reward systems are geared toward team results, not just individual performance. Employees are rewarded for multiple skill development rather than just specialized expertise. Supplier and customer contact is maximized. Employees are brought into direct, regular contact with suppliers and customers. Where relevant, supplier and customer representatives may be brought in as full working members of in-house teams. All employees need to be fully informed and trained. Employees should be provided all data, not just sanitized information on a need to know basis. However, they also need to be trained on how to analyse and use the data to make effective decisions. Today, the horizontal structure has become a reality in an increasing number of organizations. For example, AT&T units are doing budgets based not on functions but on processes, such as the maintenance of a worldwide telecommunication network. Importantly AT&T is also rewarding its people based on customer evaluations of the teams performing these processes, and GE Motorola and Xerox among other firms have moved to the principles of the horizontal design of organization. For example General Electric has scrapped the vertical structure that was in place in its lighting business and replaced the design with a horizontal structure that is characterized by over 100 different processes and programs. In particular, to cut out bureaucracy and solve organizational problems that cut across functions and levels. GE implemented its famous Work Out described as follows: Large groups of employees and managers from different organizational levels and functions come together to address issues that they identify or that identify or that senior management has raised as concerns. In small teams people challenges prevailing assumptions about the way we
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T.MURUGAN, FMS, VMKVEC, SALEM have always done things and come up with recommendations for dramatic improvements in organizational processes. The Government Electronics group at Motorola has redesigned its supply chain management organization so that it is now a process structure geared towards serving external customers. At Xerox new products are developed through the use of multidisciplinary teams: the vertical approach that had been used over the years is gone. These new ways of organizing are more relevant to todays environmental needs for flexibility, speed, and cooperation. The Horizontal Organization suggests principles such as the following: Make teams not individuals, the cornerstone of organizational design and performance Decrease hierarchy by eliminating non value added work and by giving team members the authority to make decisions directly related to their activities within the process flow. Emphasize multiple competencies and train people to handle issues and work in cross functional area. Measure for end of process performance objectives, as well as customer satisfaction, employee satisfaction and financial contribution. Build a corporate culture of openness, cooperation and collaboration a culture that focuses on continuous performance improvement and values employee empowerment responsibility and well-being. The network designs go beyond even horizontal structures and totally abandon the classical, hierarchical, functional structure of organization. The bureaucratic model worked fine in the previous era when there was less competition and more stable market conditions, and before the now boundary less conditions of advanced information technology and globalization.

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T.MURUGAN, FMS, VMKVEC, SALEM

ORGANIZATION AND CULTURE

By V S RAMA RAO on AUGUST 4, 2012

Different from traditional mergers and acquisitions the partner in the virtual organization share costs, skills and access to international markets. Each partner contributes to the virtual organization what it is best at its core capabilities. Briefly summarized here are the key attributes of the virtual organization: Technology: Informational networks will help far flung companies and entrepreneurs link up and work together from start to finish. The partnerships will be based on electronic contracts to keep the lawyers away and speed the linkups. Opportunism: Partnership will be less permanent, less formal and more opportunistic. Companies will band together to meet all specific market opportunities and more often than not, fall apart once the need evaporates. No borders: This new organizational model redefines the traditional boundaries of the company. More cooperation among competitors, suppliers, and customers makes it harder to determine where one company ends and another begins. Trust: These relationships make companies far more reliant on each other and require far more trust than ever before. They share a sense of co-destiny, meaning that the fate of each partner is dependent on the other. Excellence; because each partner brings its core competence to the effort it may be possible to create a best of everything in the organization. Every function and process could be world class something that no single company could achieve. Importantly virtual organizations can help competitiveness in the global economy. The alliances and partnerships with other organizations can extend worldwide, the spatial and temporal interdependence easily transcend boundaries, and the flexibility allows easy reassignment and reallocation to take quick advantage of shifting opportunities in global markets. To avoid disintegration and attain effective needed focus, the lead virtual organization must have a shared vision, a strong brand, and most important, a high trust culture.

Examples of virtual organizations include those already mentioned as well-known network organizations Ford, Harley Davidson, and ABB and also on a smaller scale, firms such as Clark Equipment a manufacturer of forklifts and other industrial equipment, Semco, a Brazilian firm producing pumps, valves and other industrial products, Swedens Insurance Group (with
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T.MURUGAN, FMS, VMKVEC, SALEM 91,000 partners worldwide) and the Australian firm Technical and Computer Graphics (TCG). Other well known examples include Nike and Reebok, who do very little of their own production but shift it to Asian firms. In the information technology industry, Sun Microsystems views itself as an intellectual holding company that designs computers and does all other functions (product ordering, manufacturing, distribution, marketing and customer service) through contractual arrangement with partners located throughout the world, and Intel uses virtual teams with members from Ireland, Israel, England, France and Asia working on a wide variety of projects. As with the network organization, it is not really possible to show a virtual organization, depicts graphically how TCG would look as a virtual organization. Because networks and virtual organizations both represent such radically different ways to structure firms, there are many challenges ahead, especially on the human side of these contemporary structural forms. When people join an organization they bring with them the values and beliefs they have been taught. Quite often, however, these values and beliefs are insufficient for helping the individual succeed in the organization. The person needs to learn how the particular enterprise does things. A good example is the US Marine Corps. During boot camp, drill instructors teach recruits the Marine way. The training attempts to psychologically strip down the new recruits and then restructure their way of thinking and their values. They are taught to think and act like Marines. Anyone who has been in the Marines or knows someone who has will verify that the Corps generally accomplishes its objective. In a less dramatic way, todays organization do the same thing. For example, as discussed in knowledge management (KM), the key challenge for contemporary organizations is to instil and sustain a corporate wide culture that encourages knowledge sharing. As the partner in charge of Ernst & Youngs knowledge based business solution practice notes, if youre going to have a knowledge sharing culture, that cant just be a veneer on top of the business operation. You have to have people who can make sense out of it and apply it. In other words organizational culture is quite complex. Although there are a number of problems and disagreements associated with the conceptualization of organizational culture most definitions including the preceding recognize the importance of shared norms and values that guide organizational participants behaviour. In fact, there is research evidence that not only are these cultural values taught to newcomers but newcomers seek out and want to learn about their organizations culture. Organizational culture has a number of important characteristics. Some of the most readily agreed upon are the following:
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T.MURUGAN, FMS, VMKVEC, SALEM Observed behavioral regularities: When organizational participants interact with one another, they use common language, terminology, and rituals related to deference and demeanor. Norms: Standards of behavior exist, including guidelines on how much work to do, which in many organizations come down to not to do too much or do not do too little. Dominant values: There are major values that the organization advocates and expects the participants to share. Typical examples are high product quality low absenteeism and high efficiency.

COMPETITIVE ADVANTAGE THROUGH OPERATIONS

By V S RAMA RAO on AUGUST 13, 2012

The purpose of an operations strategy is to guide an operations organization in assembling and aligning the resources that will enable it to implement its companys competitive strategy effectively. The problem that most managers face when attempting to develop an effective operations strategy is not that the task is too complex or difficult. Paradoxically, they often appear to believe that it is too easy that they can easily seek out and emulate the best practices of other companies, particularly those deemed world class. The seductive appeal of ideal approaches has occasioned a fierce, and sometimes fairly emotional, debate about the relative merits of three quite different philosophies of operations. Until the early 1980s, most American managers thought about operations in terms of a paradigm whose roots went back well over a hundred years. The American System of manufacturing, with its emphasis on mass markets, standard designs, and mass production using interchangeable parts, revolutionized manufacturing in the middle of the nineteenth century. This new philosophy modified and elaborated by the concept of scientific management promulgated by Frederick Taylor and his disciples was exploited by such great industrialists as Andrew Carnegie, Henry Ford, and Isaac Singer to transform the United States into an industrial powerhouse by the 1920s.
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T.MURUGAN, FMS, VMKVEC, SALEM The ideas that the key to low cost was standardization and high volume , that work was done most efficiently when divided up and assigned to specialists that managers and staff experts should do the thinking for workers (so they could concentrate on doing) that every process was characterized by an innate amount of variation (and hence an irreducible rate of defects) and that communication within an organization should be tightly controlled so as to avoid possible confusion and should proceed through a hierarchical chain of command were accepted as dogma. The best manufacturing process was assumed to be based on long runs; it utilized equipment that was specialized for each stage of the process and whose capacities were matched as closely as possible, and it used inventories to buffer different stages both from each other and from the erratic behaviour of suppliers and customers. Work should be organized and conducted systematically in a specified sequence and under tight supervision. In the minds of many top managers, such practices which collectively formed a cohesive operations strategy defined the one best way ( to borrow Taylors phrase) to design any manufacturing or service delivery system it was the ideal toward which all should strive. In many continuous process industries, such as petrochemicals food processing, and paper making, this paradigm remained dominant. During the 1980s, however, its shortcomings became increasingly apparent in many assembly and high tech industries, and other approaches to operations were found to provide convincing advantages. Rather than a single new approach that could be studied and mastered, however, operations managers now faced a confusing cacophony of expert advice each advocating different routes to improved competitiveness. The mass production paradigm, although inadequate in many environments at least offered simplicity and clarity it allowed limited options as regards technology, organization, work scheduling inventory and quality control, and performance measurement. People might make different choices, but there was widespread agreement about the underlying premises. The clearest evidence of this consensus is provided by an analysis of the books written about operations management in the twenty years prior to 1980. In Japan, however, companies rebuilding from the shambles of World War II were beginning to create an entirely different approach to production. Short on capital blessed with few natural resources and faced with small, fragmented markets, they were forced to design new practices that reflected both their lack of resources and the chaotic conditions of their economic environment. Over time, the best ones developed an approach to manufacturing that was claimed by some to be uniformly superior to the American system.
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T.MURUGAN, FMS, VMKVEC, SALEM This lean production system was characterized by an emphasis on reliability, speed and flexibility rather than volume and cost. People ought to be broadly trained, rather than specialized and should work in teams to identify and solve operating problems. Staff was overhead and overhead was bad. No amount of rejects was acceptable, so one should work tirelessly to eliminate them. Communication should take place informally and horizontally among line workers rather via prescribed hierarchical paths through the organization. Equipment should be for general purposes and organized in cells that produced a group of similar parts or products, rather than specialized by process stage. Production throughput time was more important than labor or equipment utilization. Inventory like defects was waste. Supplier relationships should be long term and cooperative. Product development activities should be carried out concurrently, not sequentially and by cross functional teams.

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