ARTICLES - Organization THE ORGANIZATIONAL ORCHESTRA : STRUCTURES & PROCESSES INTERFACE

Neelesh Hundekari

Structures & Processes Organisational Structures do not exist in isolation; they presume, depend on and influence several organizational variables such as processes (communication, goal setting, conflict resolution, socialisation, leadership building, strategic planning, supporting, team working), behavior, values, rituals, climate, authority (with which the role holders are imbued) and people (competence, confidence, interpersonal skills, leadership, perceptions about others). Structure designers tend to ignore this vital reciprocal relationship quite often, leading to ineffective structures and unhappy human beings. An attempt has been made in this article, to map this relationship between organisational structures and processes. An organizational structure is an attempt at structuring the activities such that the desired end objectives of the organization are met. This involves division of work, accountabilities and authority. However organisations are created to provide products and services which are integrated packages involving the contributions of several organisational sub components. In fact provision of this output is the prime reason for the existence of the organisation. Like analytical problem solving, in the course of structuring, organisations also break down a complete task into sub tasks, each of which is then handled by a sub system designed to manage this small task with high levels of efficiency, productivity and resource optimisation. As effective as the analysis (breaking down into sub components) is, for the purpose of conclusion and delivery, synthesis and synergisation of these processes is of paramount importance. A set of very effective and efficient components is of little use unless they work well together. Consumers would rarely be interested in how the work is structured as long as the outcome is complete and delighting. The organisational orchestra has to create a symphony by skillfully combining the notes of the constituent instruments at an appropriate scale to create a beautiful musical experience for the listener. Individual brilliance is of no use unless it is coordinated and led properly. The organisational processes are designed to precisely achieve this coordination. Structuring roles leads to the creation of roles defined in relation to each other. Designing the supporting processes leads to weaving these roles into a seamless pattern of excellence. This coordination to achieve the organizational objectives of producing goods and services and satisfying customers is facilitated through the following processes: Core processes Value creation and delivery process Leadership Supporting processes Acculturation

Information Sharing and decision making Performance management & Reward processes Stabilizing Processes Conflict management and Integrative processes Environmental scanning & Feedback process Character building Core Processes & Structure Value Creation & Delivery Process The value creation & delivery process flows directly from the chosen product & customer strategy and the structure led processes will follow directly from the structure chosen and the people strategy. A structure by itself cannot deliver goods / services / job satisfaction to customers/employees if the attendant processes are either not defined or poorly executed. Processes weave a path for the product and the customer through the structure. It is obvious that all the above processes are critical in making a structure work. An example will make this clear. A firm in the biscuits business, which has chosen to diversify into a new product line say chocolates will create infrastructure for manufacturing chocolates and making them reach the end customers, in this case children and young adults. Depending on the similarity /diversity between the manufacturing processes and the customer segments of the biscuits and the chocolates business it may create a separate structure for the new supply chain or load it onto the existing supply chain. If the manufacturing process is similar or same and utilises same or similar machines then it would make sense to add on additional activities on to the same structure by widening the roles of the incumbents. The former would be classified as a divisionalised structure while the latter would form a functional structure. Thus the core business processes would determine the structure needed. The support services such as Raw Materials, Utilities, Systems, Finance and Human Resources would also be common or distinct depending on the similarity / diversity of the core processes. In this case the firm may find that it can expand easily on functional lines if it were to expand into the breads and cakes business than in chocolates and it could retain common functions on functional lines. In physical terms a functional expansion would mean that the machine utilisation would go up by running an additional shift or the product mix would undergo a change. It may also mean installing additional capacity near the existing facility so that these two facilities can be synergistically managed. (Though at the senior levels location of a manufacturing facility would be of less importance, at the operating or frontline level, expanding the roles horizontally is possible only if there is locational congruence.) However if the diversification was into areas with completely different value creation and delivery processes such as into financial services then even the common functions may have to be distinct with the common core values of the organization as the linking pin. The core business processes thus determine the structure to a large extent. Leadership Even though the core business processes determine organisational structures as shown above creation of organisation structures is not a linear equation with one right answer. Rather it is a multiple variable equation with several assumptions about each of the variables. Perception: The first key variable is the perception of the organisational leadership. While

configuration of work at the operating level is influenced by technology, location of manufacturing facilities and their synergies, at the strategic and decision making levels such reconfiguration is determined more by perceived synergies in the markets and customers, although it is ideal if both can be simultaneously achieved. It is ironical though real that similarity and diversity amongst products and customers is always relative and not absolute. It is therefore possible to have several structural solutions for tackling the same value creation and delivery functions. The leadership of the organisation performs this critical role of perceiving todays realities and interp reting them for the organisation. Visionary leadership stands apart by its ability to perceive todays trends and to gaze into the crystal ball for predicting the tomorrow. Organizational structures of today and tomorrow are thus the output of the leadership process in the organization. Positioning: At the top management level this structuring is also determined by the way the organisation is "positioning" itself with respect to potential customers by presenting its product portfolio in a particular form. This positioning is a result of a critical analysis of the competitive advantages available to it, analysis of value gaps in the environment where the organization sees an opportunity for contributing and its vision, mission and core values. Wipro, a large and established Information Technology Corporation, recently reconfigured its businesses into the Information Systems business, Information Technology business and Other businesses. Chief Operating Officers have been appointed, who would run their businesses with relative independence. This structuring is a consequence of the CEO's perception that each of these segments has tremendous growth potential and hence needs focussed attention and autonomy for allowing growth. As a result, Wipro is now positioned as a Corporation which has a presence in the Software business, the Hardware business and other small businesses. These markets were catered to earlier also but having now segmented the market in a clear manner and reflecting the same in the structure there will be greater focus on each of these segments. Resources would get dedicated along these lines and generally the business would grow along this new roadmap. Given the rapid expansion in the IT industry, this is a right move which will prepare the organisation for coping with business growth along the dimensions of software, hardware and others. The chosen structure is therefore also a reflection of the way the top management expects the future to evolve. Both structuring and staffing would thus reflect the vision of the leaders. Arvind Mills has created a Research department in the Human Resources function for performing research on Organisational Future, Organisational Structures and micro variables affecting individual behavior. This is in anticipation of a more complex future, which will call for greater data & research based decision making on issues relating to the organisation and its future. The structure thus is a reflection of how the leader perceives the environment and wishes to position the organisation for coping with it. Performance: Leadership here is not restricted to the topmost position, the CEO. A leader here includes each and every individual who is leading a team. Each and every box in the organogram here is in a leadership position with respect to his team. Designing an organisation structure assumes that these individuals will be able to perform the role that the position demands of them. Quite often placement in leadership positions is a function of functional competence and expertise and could be blind to the incumbents leadership abilities. Such a placement is fraught with risks of bringing disrepute to the structure itself. Success has many fathers but failure is an orphan. Non performance could be blamed on a variety of factors ranging from mismatch of individual with the role, lack of support from other functions or the superiors, lack of focus on systems and processes, lack of the right type and quantity of manpower, lack of other resources, or market conditions. A failure of leadership can be camouflaged as any of the above. Such an analysis is fraught with the risk of successive failed solutions for the same chronic problem. The patient may in this case die of wrong diagnosis. Failure of leadership is difficult to diagnose, difficult to prove and difficult to fix.

Goal Setting: Good leadership will make a difference to the quality of goals set. Mediocre leaders will set and achieve mediocre goals. For extraordinary courage dynamic and visionary leadership is needed. Resource Allocation: While the rational budgetary planning process will come with an optimal allocation plan for maintaining the status quo or achieving it cannot be a substitute for the core leadership function; directing and focussing the organisational energies towards the intended goals. Like the annual budget of the country is a clear indication of the nations priorities, the organisational budget (which flows from the business plan) is an indicator of the organisational priorities. The leader has to decide upon the priorities or at least facilitate the emergence of the priorities and their translation into a plan. The organisation being an arena where several lobbies or constituencies will constantly be clamoring for more and more resources, this role is an unpleasant one. These constituencies are clamoring not for their own sake but in the best interests of the organisation from "their" perspective. The leader has the advantage of listening to all the expectations and priorities and the responsibility of facilitating the emergence of a consensus among these constituencies. In the event of his inability to evolve a consensus the organisational sub units will get polarised on the issue of resource allocation and lead the emergence of conflict. Risk Evaluation: Every business venture has a risk involved, financial & business risks. While modern risk analysis tools will help minimise such risks, the final decision will be fraught with anxieties. It is given for a leader to suffer these anxieties alone and spare his team from them. Decisions like these put a leaders courage and wisdom, at the same time, to test. Trade off between the short term and the long term : Leaders tend to be evaluated today on a financial statement basis and will be evaluated tomorrow for the heritage left behind. Occasions arise when the leader is facing a contradictory set of choices. One guaranteeing short term advantage and the other significant advantage in the long run. There are arguments on both sides and the future is unknown in any case. The impact of these decisions will be felt only later, but the butterflies in the stomach are real now. Institution Building: Without realising it himself, the leader is laying the foundation of an institution. Every word, every act, every decision of the leader creates a benchmark and takes the institution either forward or backward; either creates a culture or destroys it. Setting standards of performance and behavior: The best way of influencing performance and behavior is for the leader to lead by example. While formal processes for monitoring performance do exist, there is no substitute to influencing this through a personal example. Organisational members emulate the leaders behavior and organisational behavior patterns can be traced to the leaders behavior. For perpetuation of a culture of excellence it is therefore imperative that the leader leads it upfront. Bestowing of rewards and sanctions: A good leadership process ensures that rewards are visible and substantive; are immediate and personal. Leadership implies the courage to impose sanctions on transgression of the corporate values or proven non performance. Regeneration: When he does create an excellent backup for himself the leader has laid the succession path. Of course incompetent leaders will always be scared of being over thrown by their successor. The only coping strategy available for the leader is to continually scale new heights himself. A leader who rests on his laurels and is complacent in the feeling that he has arrived, is risking his position and the future of the team that he is leading. Supporting Processes & Structure Most managers consider their job done, once a structure is created and staffed. It is then left to the

role holders to the role holders to perform by "managing the processes" so critical for the structure to become effective. Left to itself, the other processes will follow to make the structure operational i.e. support the core processes. Hence information flow through the structure to relevant members to facilitate decision making and information sharing for coordination will start happening. The choice of the structure will automatically include some members, exclude some others from the information flow and decision making processes. Induction & socialisation of people to make the structure alive and manage their performance through Feedback and reward to achieve end objectives assume critical importance. By default these processes will follow the structure and thus employees will internalize the new structure and the structure shall thus perpetuate unless a conscious change is made. With these processes operational the structure can be said to have started working. However, structures are not effective by themselves; it is the role-holders who are effective or otherwise. Their success or failure will also depend on the way the supporting processes are configured. The following organizational processes have to be designed to support the structure; they should be formally agreed, recognized, communicated & enunciated by the leader. Acculturation Often talked about, a well planned induction and socialisation process is critical in helping a new entrant settle down fast. Selections focus on demonstrated competencies, knowledge possessed and attitudes as apparent from past behaviors and endeavor to find a perfect fit between the organisations and the persons role expectations. While the knowledge and skill fit become apparent as soon as the person starts performing, attitude and expectations mismatch is not so readily apparent. People make judgments based on their past expectations and are steeped in the cultures of the organisations with which they have been associated with. This includes the family values, the schools studied in and organisations associated with in professional as well as personal capacities. Expectations about Organisational Values, the unspoken boundaries, use of authority and power, management style, communication protocol, autonomy available are some focus areas for Induction and Socialisation Programs. A high flying manager who moved from a large bureaucratic multinational to another medium sized evolving multinational found a significant difference between the two organisations in the autonomy available to him. Having been hired to lead change, he was given complete autonomy for making the change happen. The new found freedom was so overwhelming that the manager started bulldozing his way through. Little did he realize that while the organization offered complete autonomy, its value system abhorred conflict. Very soon he made enemies with everyone and could not get his team to perform, let alone lead change and left the organisation as a failure. While the choice itself may have been wrong, it is apparent that the Socialisation process failed to acclimatize the new entrant, with the organisational norms. Similarly when another organisation launched a new business it hired a large number of experienced professionals from the industry. The industry operated in a disintegrated form in an unorganised manner. Since there were no organized sector players there was no choice but to take people from the small companies and induct them carefully into the new culture. The contrast between the two cultures was sharp. The small company culture was a "thin" culture, high on autonomy and adhocism, lack of policies and systems, hire and fire, and employed mostly uneducated migrant labour. The company to which they moved was a "thick culture which emphasised clearly articulated vision and values, offered long term employment, had documented and progressive people policies, and an educated and enlightened workforce at all levels. A 3 day Culture Workshop which made people experience the new culture as a team helped a great deal in helping the new team settle down and become productive. Stories of adhoc behavior stopped and morale improved. Retention, which was once thought difficult, is now a manageable problem. A change in structures and roles of is similar to joining a new organisation. New roles even in the same organisation implies new expectations, new goals, new colleagues and new skill sets. However when an individual changes jobs he is likely to be more conscious of these differences, in an internal transfer, individuals take on new roles with old styles. Handing over which is an important

part of the transfer process is supposed to not only ensure continuity of work but is also supposed to acclimatize the new entrant into the role with expectations, role demands, culture with respect to information sharing, conflict, delivery of results etc. In the absence of this acculturation the transfer is likely to create turbulence which could have been avoided. It is not unusual to see cultures where the new entrant is evaluated very closely within the first six months and therefore individuals, in their anxiety to make a mark, try to undo what their predecessors have done with an entirely different logic to support their actions. With every management reorganisation therefore, come in a different set of styles, principles and prescriptions for success. While institutions would be proud of their inheritance and seek to build upon it, fledgling organisations unsure of their identity would use "fashions & fads" to find that one right answer which does not exist. Information Management and decision making One simple way of getting a pulse of any organisation is to read the notice boards, observe the way people write to each other through formal memos and communicate during informal conversation. It is a simple window into the way the organisational processes are working and the organisational culture. A customer, who is external to the structure and an employee who is a part of the structure will not be hit by the structure if these communication processes are working smoothly. Whether planned consciously or otherwise, an organisation has to have communication processes to make work happen. Goals will be set and decisions will be communicated downwards, coordination will happen amongst the relevant people and Feedback will go up the hierarchy. Whenever not consciously planned, members will work out informal processes, which suit them. Structures drawn as organograms will represent people in boxes arranged in a pyramid. Immediately therefore the superior position will start issuing instructions to and insist on Feedback from the subordinate position. Since a functional structure will show the people belonging to the same function in connection with each other the flow of information will also follow the functional path. Other functions will therefore be slightly distant as far as information flow is concerned. While flow of information along the structure is automatic because of the boss subordinate relationship, information flow in any other direction will have to be planned formally and implemented firmly. Most important amongst these is the information flow along the flow of value to the customer. Since structures are created for providing value to the customer through goods and services, for effectiveness flow in this direction is more important. Structure designers rarely pay enough attention to this aspect though. Is left to the individual members to work out systems to share information. The result therefore is that members share information which helps further their own goals. Information is shared selectively and judiciously. Hiding is not unusual. Structuring into divisions or departments is done for administrative efficiency and functional specialisation for knowledge acquisition. If the end objective of the process which is the customer is not satisfied the compartmentalisation is counterproductive. It would have been much better to have segregated the work along the value chain to the customer. Critical issues in such value chains are those of coordination, quality control and Feedback. Micro structuring & Coordination: Time lags and mismatch between handing over of information at the boundaries where the information changes hands are potential problem areas. The customer will experience a change and will get a different feel at such points of change. While the concept of internal customer seeks to remedy such handing over issues unless the minds meet in the true sense of the word, such transitions will not be seamless. While the clarity in the structure, at a macro level is important, for the purpose of customer satisfaction, the clarity at the micro level becomes important when structures are flat and roles are expanded. Process flow clarity with accountabilities is critical; particularly when response times are short. While such micro structuring of roles and accountabilities will help coordination, & control, an extensive fetish for such structuring creates mental boundaries and hinders effective sharing and team work. (This issue has been dealt with in the authors article on Organisation Structures &

Behavior: Square Pegs in Round Holes). Formal processes laid out for sharing relevant information to relevant people are created through Business Process Reengineering initiatives. Management Control Protocols: Creating control mechanisms for monitoring organisational processes is another aspect which is a function of organisation structures. The sum total of control mechanisms used by the top management to retain control over the organisation is referred here as " Management Control Protocols". These controls could range from control through physical presence through policy controls to control through shared values. These control protocols are applied in information sharing and decision making thus controlling the value creation and delivery process. It is normally assumed that organisation structures also represent authority and control structures. While a congruence between the two is desirable, it cannot be assumed. The congruence between the two will depend on the following: Stage of Evolution of the organisation (Evolving / Growing / Mature): Congruence increases along the maturity continuum Stabilised goal setting and review processes: The greater the stability of these processes, the greater is the probability that the organisation and authority structures will be congruent Correlation between functional skills and role demands: Higher is the congruence between the demands of a particular role and the skill set of the incumbent, the higher the probability that the control protocols will follow the organisation structure

Depending on the above the management control protocols may exist in any of the following forms: control through shared values: A highly decentralised organisation where a high delegation exists as a matter of choice, the only control is through values which hold the different parts of the organisation together. A large number of European Companies operate in "multilocal" mode where the headquarters holds limited control on business decisions except where the organisational values are in question. Values being a nebulous concept, headquarter control is also nebulous and vague in such cases. It is quite obvious therefore that in such cases the organisation structures may not be truly reflective of the control in the system. Control through policy: Large bureaucracies which are inevitable in any large organisation operate through a documented et of procedures, policies, dos and donts, standard reports, checklists, controlled documents and written down delegation of powers. These seek to control and coordinate the actions of a large number of people, at various levels, spread over several geographical locations, through impersonal documented protocols. The advantage lies in the impersonal nature of the control process, those higher up are in control on account of the position they occupy enunciated through Formal Written Down Delegation of Powers Matrix. control through competence: Increasingly in flat structures built around competent professionals, control in complex situations can be exercised through placement of competent specialists at critical locations. Deep functional knowledge updated continuously helps such individuals to be in control irrespective of their placement. The sum total of, an understanding of the variables involved, their interrelationships, the criticality of each variable and knowledge of control points for managing each of these, the possession of necessary skills for managing these variables, awareness of and control over sources of information and dissemination, is competence. Competence could be acquired through various possible combinations of education (knowledge & information), aptitude (for learning skills/doing various tasks), experience (information, knowledge about the interrelationships, and a battery of several tried and tested solutions) and intellect

(information processing, analysis & synthesis skills). Each competent individual will owe his stripes to one or more winning combination of the above. Control & decision making hierarchies follow the structural hierarchies. However control depends on functional expertise and control processes, which ignore functional expertise, encourage bureaucracy without the attendant advantages in terms of control. An example will make this clearer. In a divisional structure the divisional business head is empowered to run his business independently; this implies decision making about all aspects. The business manager would have some core functional expertise area/ areas and will have a supervisory knowledge of the other areas which he supervises. This would be true of all senior management in varying degrees. In an divisional structure, such business managers (eg. who has core hands on expertise in marketing and supervisory knowledge of other functional areas) would be called upon to authorise selections for other functional areas such as Operations, R&D, Human Resources, Finance etc. While structurally such authorisation would be correct and desirable, it may not guarantee real control. Real control on the quality of such hires would be a function of deep functional evaluation by functional specialists in addition to the evaluation of the business manager. A management accountant who gets selected by a business manager with a dominant operations skill set, without the vetting of the Chief Finance Officer, runs the risk of being found functionally shallow by the functional experts and will not be able to earn respect and would fail to find a place in the Management Control Protocol. Mature organisations therefore combine structural authority with functional expertise when creating Management Control Protocols. Organisational processes have to be built around such Management Control Protocols. Organisations desirous of retaining control would make use of such competence brought in through various people coexisting with each other in intersecting roles. Organisations could locate the best man for the job who combines all the factors which determine competence or if that is not possible create collective competence through a team of individuals who bring in distinctive competencies. More often than not it is the latter which is more realistic. Control through people: Without being asked to people bring their individualities into the roles that they perform. While socialisation and role descriptions would bring in certain amount of control, there is still a large variation on account of individual personality factors and trust. Organisations would leverage this trust in people by placing such loyal soldiers at critical locations. The greater the criticality of the job the greater will be the probability of a trusted lieutenant being posted there. Further the greater the discretion and leeway that exists in a particular position, the greater will trust become important. Similarly it is not unnatural to see loyal soldiers of the CEO deputed at critical locations to act as a source of information to his boss. Much as it may be disliked by the parties who feel spied upon, this is an informal control mechanism as effective for retaining control as any other formal control and review mechanism. While all parts and components of an organisation are important, there is an overriding temporal dimension; what is most important now. One way in which organisations retain control is by deputing their most loyal soldiers on the most critical assignment/location/responsibility at any point in time. It is therefore not unusual to see such soldiers being given different assignments depending on their criticality at that time. Managing a large organisation in a turbulent & uncertain environment throws up complex and unforeseen problems with no readymade solutions, but of critical importance for survival and growth. Fixing these problems is a priority which keeps recurring and is a symptom indicative of insufficient control over the environment and within. Such organisations would frequently use the services of one or more "fixers" who are trusted lieutenants of the leader with superior problem solving skills. Without identifying these positions as being so, chief executives would make up for lack of control

within the organisation and over the environment through the presence of such fixers. Also while in mature organisations control will be consistent with hierarchical position, in evolving organisations it may at times be divorced. In such cases an analysis which is blind to this dichotomy will yield false conclusions and unrealistic solutions. This is very clearly apparent in family managed businesses where while there would be a few family members with equal stake and hence "theoretical authority", operational authority may be concentrated with one or two of them depending on the trust levels amongst them and the managerial competence possessed. In such cases formal signing authority would rest with the business managers but the would not exercise without the verbal consent of the de- facto CEO. It is also possible that while formally the business manager is empowered the CEO would not consent unless his trusted aides are in agreement. This is indicative of a limited faith in professional competence and a greater faith in gut-feel and reliance on loyalty in decision making. In such cases formal authority is incongruent with informal authority and some departments or individuals will exercise extra constitutional authority. While it may actually help the organisation in the short run it is a clear indication that the organisation is still on the road to maturity. Performance Management & Reward Processes Practising managers come across two types of bosses; those who love giving Feedback and those who abhor it. Irrespective of their liking however organisation survival and success depends on how it seeks Feedback from the environment and converts it into specific actionable Feedback for managers to act upon. Boundary roles such as Public Affairs, Human Resources, Legal etc. receive Feedback from the environment regularly. Processes for converting such Feedback into action planning requires creation of Formal Feedback & Review Processes. For example, organisational image management is done by the Communications, Public Relations & Human Resources functions. Audacious image management goals demands a formal process which collects such Feedback, makes sure it reaches the relevant members and corrective actions are taken. Performance Management & Review is not restricted to Feedback about image alone. The entire process of organisational objectives attainment requires begins with goal setting; goes through performance, Feedback and review and starts all over again with fresh goals. The business performance goal setting is epitomised by the budgeting process; where business performance goals are set and reviewed against actual achievement at periodic intervals. The top management committee takes this control role upon itself so that performance is by design and not by default. At the heart of the performance management & review process is the ability to envision the future, willingness to plan ahead & stick to deadlines and the discipline to review and act upon the results of such a review exercise. The nature of the structure will determine the nature of the Performance Management & Review Process. Managers in a divisionalised structure prefer holistic business goals and a "hands off" management style from their superiors. This will mean that they seek freedom to run their businesses, as per agreed goals. Unless the organisation is a mature one where the review process includes comprehensive / holistic performance management measures such as "The Balanced 2 Scorecard" , divisionalised structures tend to emphasize narrow financial objectives at the cost of all other institutional objectives. There is also a tendency to pass on the blame for non performance, to other functions outside the divisional boundary. In such a case, the short term will always take precedence over the long term and financial results will always supercede institution management issues. Some of the casualties of a myopic performance management process are the softer issues such as organisational image, human values & culture. On the other hand a purely functional structure reduces the role of the chief executive to that of an 3 arbitrator between warring functional factions .

Stabilizing Processes & Structure The core & supporting processes shall ensure that the structure works. However this new structure exists in the larger context of the organization and its other sub units and therefore has to coexist with them. The structure also has an inbuilt survival assumption; it is assumed that the organisation will continue for all times to come. Even the " Generally accepted accounting principles", assume a firm to be a perpetuity; there is a certain timelessness about organisations and hence a future is always there. Organisations believe that there is a future for them and would like to prepare themselves for it. Organisations thus have to manage internal conflict and simultaneously build competencies for the future. Structural changes not accompanied by such stabilizing processes are likely to face the prospect of being rendered unsuccessful even before the structure has had a chance to prove itself. The importance of these stabilizing processes cannot be overemphasized. Since these processes do not follow naturally from the structure itself as the supportive processes do, the absence of these processes will not be felt as that, but will be felt and articulated as a Structural issue, leading to another structural change for a process reason. In fact political games seek to block such stabilizing processes to make the structure fail. Conflict Management The source of the conflict is the coexistence of a large number of sub-systems and the coexistence of these sub unit goals. This coexistence creates opportunities for conflict, which has to be managed and resolved. This conflict if not managed threatens to destabilize the structure itself and force the creation of an alternative structure. The structure thus gets blamed for what is essentially a process issue. The origin of this conflict lies in the division of accountability, which follows the division of work through a structure. A neat division of a single holistic organizational objective into several micro objectives for each of the structural units with clearly demarcated role boundaries is sought to be achieved through a structure. The goal setting process serves to align priorities of the various structural units and the mindsets of the incumbents. The greater the time and attention devoted to this process the lower will be the possibility of the various units pulling in different directions. Extent of sharing of information, the sincerity of purpose and the amount of time spent by the leader will affect the extent of alignment. However the greater the division and clarity in individual goals of sub-units the greater is the possibility that some of these objectives will be contradictory to each other. The extent to which individual goals of structural units are set in isolation of each other will be directly proportional to the amount of energy spent in negotiating conflicting goals. There is always the temptation to structure rigidly and to create watertight compartments with distinctive goals to bring clarity in goals and monitor their achievement. However more often than not the amount of clarity achieved is nullified by the dysfunctional conflict created on account of conflicting goals of the structure. Conflict between such contradictory objectives will lead to conflict between these structural subunits. A classic case of contradictory objectives is between the production subsystem and the raw materials subsystem. While the former would demand the best possible raw material to maximize good quality production to meet its goals, the latter would try to economize on raw materials costs by trying to push cheaper raw materials where the manufacturing subsystem will have to exert itself a little harder to get the same quality. From a holistic point of view it is apparent that both quality and control of input costs are important objectives and must be simultaneously achieved. However, the division of these objectives into sub-units where the effectiveness of each sub-unit is judged on the basis of independent objectives, creates a situation where each sub-unit tries to maximize the achievement of its own objectives without reference to the impact it has on the other units and

hence on the larger organizational interest. This situation is an inevitable outcome of the structuring process and leads to conflict between these sub-units first and between the role incumbents later. While this conflict could be healthy to some extent in that it creates pressure for performance on the sub-units, if not managed and contained it could be counterproductive and could threaten to destroy the structure itself. Organizations therefore have to create processes which will manage and resolve these conflicts on a regular basis. Though the conflict management and resolution process is therefore as essential for a structure to work effectively as the supportive processes, it is rarely perceived as being so. Managers spend most of their time in creating a structure and the supportive processes and wish that the structure will then create processes for its own survival. However as the genesis of conflict is in the creation of the structure itself, the structure cannot manage conflict on its own. It needs the conscious creation of conflict management processes which have to necessarily involve members from the conflicting subsystems and the neutral leader. This is one function which the leader cannot delegate. It is not unusual to find vested interest groups (structural sub-units) trying to blackmail the leader and forcing him to take sides in a win-lose game. The role of the leader is very critical here. For if he is ill equipped to call the blackmailers bluff, he will have to abandon his neutral position and hence stands to lose his credibility with the other sub-units of the organization. The conflict resolution process is only one of several such integrative processes needed to make the structure work and survive. A comprehensive bonding process which establishes the structure firmly in the context of the larger organization and provides for pressure release mechanisms is essential. Creation of forums for communication and building trust and interdependence are essential. The definition of the reference group should be large enough to be sensitive to the larger organizational interest and focussed enough for effective role performance. Individuals in conflicting roles have to learn to be sensitive to each others priorities and work towards a win -win. Formal & joint goal setting particularly for conflicting sub-units with clear communication and understanding of each others goals helps reduce conflict. Whenever conflict surfaces it has to be managed and dealt with firmly. The most effective style of managing conflict is confrontation. Wishing away (sweeping under the carpet) or ignoring it will only make matters worse. Organizations with a matrix structure or roles cannot survive without the presence of such integrative processes. A pathological form of such integrative processes is to create integrator roles and make them responsible for conflict resolution. Very rarely does this type of delegation work, although it is quite common to delegate it to a support function head such as Finance or Human Resources. With increasing diversification and environmental pressures such integrator roles become increasingly difficult. Some times the conflict may pull the integrator into the conflict and then the integrator himself becomes the center of conflict. It is not uncommon for the integrator to be used as a scapegoat by the conflicting parties, not to speak of conflicts involving his own function where he is called upon to be fair to all but himself. A large number of such pathological political games are rampant in Organizations and are an outcome of unmanaged conflict (Mintzberg, 1985). It is therefore apparent that, in order to preserve the holistic nature of organizational objectives complementary integrative processes are essential, not to mention the management of informal processes that go against the structure by directives, education, counseling and by invoking discipline. In addition to conflict management, the other structure stabilizing process, which an organization has to undertake, is environmental scanning and Feedback. Environmental Scanning & Feedback A structure once formalized has a tendency to become inward looking. While this helps in focussing the energies on the task at hand, unless there is a monitoring of the direction in which the organization is headed and its performance in relation to its objectives, there is a likelihood of getting lost in activities and losing sight of objectives. While some Feedback will be received by

those functions at the organizational boundary, formal processes for converting this information into decision data are essential. In relation to a specific structure, such Feedback will normally come from other interested organizational members. Such Feedback is critical in identifying lacunae in structures and institution of corrective processes. Structures and the incumbents of such structures can ignore such Feedback at their own peril. This process of Feedback and review is similar to the performance management process and helps a structure stabilize itself and gain a sense of direction, just as the performance of an individual improves with Feedback. We must therefore recognize this process as a formal process by which a structure seeks to adjust itself to the environmental demands and ensures continuity for itself. Sources of Feedback All organisational members & components on the boundary are important sources of Feedback. The customer interface functions such as marketing, sales, product development, the people interface functions such as recruitment, the vendor interface functions such as vendor development & procurement, public relations and liaison functions such as legal, statutory and public interface are all important sources of Feedback. Media relations functions by being in touch with the media are able to provide inputs based on inputs received. Occasions such as customer / dealer conferences, press conferences, meetings with public officials, shareholder meetings provide capsuled Feedback and need to be recognised as formal Feedback mechanisms. These occasions should be used to collect / seek Feedback and this Feedback has to be then fed ack into the organisation and the relevant parts which can then act upon it and the loop is completed. Using Feedback for benefit The Feedback received is not likely to be in the form where it can be perceived as Feedback but would rather be in the form of a complaint, appreciation, inquiry, explanation sought, reports asked for and such other signals. The signals would be innocuous to an untrained eye. In any case any input coming from the environment should be taken as an important piece of information and acted upon. Analysing Feedback continuously is like catching the enemy wireless conversation continuously in the hope that when the need arises the organisation would be prepared. The data would not come in packets identified as such but will be mixed with a lot of noise and garbage. Only if organisations recognise this information as an important input into their decision making process that they would consciously seek this information and use it for planning ahead. Reward plans, which use such environmental data such as customer survey ratings, serve to sensitize the employees to such environmental signals and galvanise efforts to impact the environment. Character Building Organisations, with character distinguish themselves from those that do not. Institutions are organisations which have transcended the narrow short-term profit motive and have an identity and personality of their own. Much as individuals with a deep rooted sense of their identity, clear values, a definite purpose and vision, and abilities and skills acquired through their development, organisations which possess these stand out from other fellow organisations. Identity Like the identity and personality of individuals evolves over their development, so also organisations evolve. All organisations like the products they produce progress through the maturity curve. They take birth, grow, mature and eventually decline. The large mature global organisations which we see today were born someday as fledgling family enterprises. Consumer goods giants like Unilever & Kelloggs were born as small family businesses. Over time they have grown to such an extent that

they hardly bear any resemblance to their former self. Microsoft maybe a multibillion dollar conglomerate, but in terms of its evolution it is still at the growth stage. Microsoft is Bill Gates. It is intuitively apparent that Microsoft today owes its existence and survival to Bill Gates. It is an infant as far as its position in the evolution process goes. Evolved mature organisations like mature individuals have an identity of their own which is distinct from the owner or promoters. The following few characteristics define the identity of mature organisations. Self awareness Unlike a child which is unaware of its own self and the difference between the "I" and the "Not I", young organisations are at times unaware of the difference between them and their surroundings. Boundaries between the family of the promoters and the organisation, between ownership and management, between personal and organisation assets, values, the ambition of the leader and that of the organisation are quite nebulous in an evolving organisation. The innate desire to grow and become "big" dominates the organisation thinking; in this case the leaders thinking. To become aware of its own self takes time. This identity formation process is a natural one and is fraught with several crises, each of these crises taking the organisation closer to maturity and fulfillment. A mature organisation is aware of its desires and wishes, its abilities and competencies, its strengths and weaknesses, it is aware of its dreams for the future and has a roadmap for getting there. It is aware of its responses and reacts predictably in crises. It knows where it begins and where it ends. Vision "An organisation without a vision" is not only a possibility, it is a symptom of an organisation still unsure of itself. Just as individuals take time before they can create a vision for themselves, organisations too have to evolve to a certain stage before they can craft a vision for themselves. Crafting a vision requires knowledge of the self, its likes, dislikes, preferences, abilities, skills and weaknesses. It has to know what it can do best which others cant or cannot do as well and create a niche for itself. It has to maximise its uniqueness without copying others or even if mode ls itself after some of its "idols", to possess a distinctiveness not found in clones. The vision will then serve to guide the organisation through its maturity phase and will outlast any human leader that the organisation can produce. While leaders will always be needed to steer it forward and while different leaders may choose different paths, the roadmap and the game plan would be consistent. Values Organisations come across several dilemmas where there is no right or wrong answer. The conflict between right and wrong is a relatively easier one to handle. What the organisation would do in such cases, would be a function of whether the organisation is aware of its unconsciously held values and whether they have been articulated to serve as guides for decision making by the members of the organisation. Each such articulated value and each such value demonstrated through decisions taken takes the organisation forward in its evolution. A set of such articulated values indicate to others the uniqueness of the organisation and makes it stand apart from others. Competencies Each individual acquires competencies as he goes along in life. These competencies help him survive, relate to different sets of peer groups, grow in stature and wealth, mark a position for him in the society, and enable him to leave a unique mark in his surroundings, which would outlast him. An organisational resume similarly helps distinguish the organisation from others. These competencies are necessary for today and tomorrow; for organisations that wish to outlive today and have a vision

for tomorrow. Living organisations do acquire competencies on a day to day basis through its interactions with the environment and through the efforts of its constituents. However organisations with an identity of their own are aware of their competencies and take pains to build upon them as well as acquire newer competencies for the future. It goes without saying that competencies are relevant in the context of the vision and values of a mature organisation and conversely an evolving organisation can create a vision for itself by becoming aware of its competencies and creating a vision to maximise them. Courage Organisations which are sure of themselves are sure of what they stand for. Courage is partly knowing for sure, what is right for you and hence what is that which you would support at any cost, and what is that which you would compromise on. Evolving organisations are unsure of their position on a large variety of issues, some which maybe affecting the, others which may not. Like mature adults, mature organisations are aware of their opinions and beliefs and possess the courage to stand up for them. Demonstration of this courage differentiates the men from the boys. Proactivity Reactivity comes naturally to individuals as well as organisations. Innate survival instincts are responsible for the involuntary reactions such as the straightening of the knee when being hit or the automatic withdrawal of the hand when it comes in contact with heat or pain. Proactive actions do not come naturally and is an attribute that needs to be consciously ingrained. While the environment maybe similar for all what differentiates the winners from the losers is the vision to foresee the future and build competencies today for coping with the tomorrow when it comes. Proactivity implies thinking hard about the future, being sensitive to the signals, planning ahead and working hard for the future while retaining control over the present. Charles Handy talks about the Sinusoid curve and the need to start a new curve when one is at the pinnacle of the previous one. Failure is the reward of complacency. Regenerativity A lizard which loses its tail does not go through life without a tail. It grows one again. Much of the human tissue regenerates itself. The skin discards the dead cells and creates new ones. Organisations that wish to live long after the founders are dead have to necessarily create mechanisms and processes for the organisation to be able to renew and revitalize itself. The following are a few measures which organisations must undertake to prevent death and decay: Creation of leaders for tomorrow: Todays leaders will age, retire and fade with time, but the organisation must go on. Organisations have to plan for this transition when the leaders of today are still firmly in the saddle. Programs for inducting young talent early in their careers and when the need is least felt are a must. An environment that nurtures this talent and encourages creation of a new generation of leaders, not clones is essential. When those in the saddle today can no longer bear the mantle, these young shoulders will give the organisation a new direction and take it forward. The training and grooming of these Young Turks has to constantly expose them to challenges which the present generation finds unpalatable and difficult. They have to be brought up to have a opinion and voice that opinion without fear. They have to be encouraged to take risks and to taste failure as well as success. These second generation leaders will be the organisations

insurance against obsolescence and decay. Culture of dissent: A culture of acquiescence and assent will blind the organisation to antithetical changes. While a pride in the past and a confidence in the present is essential, a healthy doubt about the continuity of the present will keep the possibility of a different future open and alive. One is not advocating cynicism here, but a healthy mistrust about the eternal continuation of the current success measures and paradigms. Preparing for tomorrow while being firmly grounded in the present is a safe and sensible strategy lest the future spell doom and decay. Conclusion Organisational Process Management is oft ignored in favor of structural solutions. The best of structural solutions will be apologetic if the processes that are supposed to weave it together are ignored. While structure provides the hardware, writing a software to maximise the hardware is organisational process management. Organisations chosing to ignore process in favor of process will soon find several alternative structures fail and fall by the wayside. It is time that alongside the consciousness of relooking at business processes, a parallel consciousness of looking at the human processes which ride on the business process also emerges. An enlightened organisation will leave no stone unturned in the path towards effectiveness. Managing the organisational orchestra well could mean converting sound into music.