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Introduction

        In an effort to respond to changes in market and social conditions, organizations are constantly in the process of structuring and re-structuring to stay abreast of these complexities. In view of these complexities, an organization needs to strategically plan and develop the most appropriate and adaptive structure that will allow it to maximize its resources and ultimately, meet organizational goals.
        As the leader of the organization, a Chief Executive Officer (CEO) has the responsibility to ensure that his leadership styles and strategies are attuned to the ebb and flow of these organizational complexities. And this requires the CEO to be able to create a positive working environment that would motivate the employees to do their best. With good management of the human resources, a CEO will be able to steer the organization effectively in meeting the increasing needs and wants of the customers. In a nutshell, an effective CEO must judiciously balance his focus internally (the organization and its members) and externally (the customers and the society at large) to ensure operational effectiveness and longevity for the company.
        The focus of this paper is to highlight the organizational tools available to a CEO in the management of uncertainty, change, conflict, and other complexities of organizational life. The author will be describing organizational tools such as the use of contingency approach towards conflict management, content and process motivational theories, participative management, building effective groups and organizational structures.
Description of Tools for Attuning Organizations

 

Contingency Approach

        The traditional approach of organizational design is widely known as the universalist approach. The universalist approach to organizational design is largely bureaucratic and relies on a number of principles which should be observed and which would, therefore, create systems that would be effective regardless of the situation (Owen, 1987). However, in view of the constant flux in socio-economic conditions, rapid changes in competitive market conditions and technological advancement, this universalist approach was unable to move effectively in tandem with the times.
        Thus, in the mid-1960s, the contingency view of management or situational approach emerged. This approach stressed on the fit between organization processes and the characteristics of the organizational situation. It calls for fitting the structure of the organization to various possible or chance events (Owen, 1987). The contingency approach assumes that leadership and managerial behavior is dependent on a wide variety of circumstances and their accompanying elements. With this realization, an organization leader must study and analyze the forces of change to its organization before organizational design occurs and embrace the idea of best fit for a particular situation.
        An example of how contingency approach is being applied to resolving workplace conflicts will be highlighted in the following paragraph.

Contingency Approach to Conflict Management
        The approaches to conflict management are often demonstrated by a continuum of flight (moving away from the conflict) and fight (being confrontational) at the extremes. Both extremes are inappropriate with a win-lose orientation to conflict, which often lead to prolonged conflicts and negotiation for the parties involved. As the contingency approach lies somewhere between these extremes, it is seen as a more effective way to conflict resolution. The contingency approach takes the view that  “one” best way of managing conflict under all conditions does not exist, but that there are optimal ways of managing conflict under certain conditions (Owens, 1987). 
        According to Thomas (1976), he utilized the contingency approach to diagnose conflicts and identified five styles of conflict management. These management styles are identified as:

1.      Avoidance is often a form of flight suggesting indifference, evasion, withdrawal, or isolation.  Avoidance is usually used when the issue is trivial or when the costs outweigh the benefits of resolution.

2.      Compromise/sharing involves splitting the difference or giving up something to get something. This may be appropriate when the objectives are important, or when potential disruptions are likely to result from assertive behaviour.

3.      Competition frequently means a desire to win at the other’s expense.  It is a win-lose power struggle where the opinions and interests of others are of little concern. This is practised in situations when quick, decisive action is essential, as in emergencies or when critical issues require unpopular action, as in cost cutting.

4.      Accommodation means a submission to others at one’s own expense.  On occasion, it can represent generosity, while at other times, it might mean conserving energy and resources by giving up a few battles in order to win the war.  This is usually when an individual wants to build good will for more important matters and/or to minimize losses when defeat is inevitable.

5.      Collaboration represents a desire to fully satisfy the interests of both parties.  It is a mutually beneficial stance based on trust and problem solving. A common practice in circumstances when both sets of concerns are so important that only an integrative solution is acceptable.

The five management styles are identified to help resolve organization conflicts that usually stems from the senior management’s attempt to meet organizational demands and on the other hand, trying to balance the need to satisfy individual needs of the employees. A CEO can apply the contingency approach to conflict management as explained above within the organization when the need arises.

Workplace Motivation

The success of a business is largely dependent upon the ability of the organization to motivate workers to meet organizational goals in the most effective manner. A CEO must be aware of the study of motivational theories and more importantly, how to apply them critically within the organization. Motivation theories can be classified in two categories: content theories and process theories. Briefly, content theories revolve around the identification of inward needs, whereas process theories place more emphasis on how people become motivated (Kovach, 1995).

Content theories of motivation

The content theories suggest that specific behaviors are the result of an individual’s desire to secure some need. Content theories of motivation focus on this question: What causes behavior to occur and stop?  The answers as explained by Kovach (1995) usually center on:

1.      The needs, motives or desires that drive pressure and forces employees to action and

2.      Employees’ relationships to the incentive that lead, induce, pull and persuade them to perform.  The needs or motives are internal to the individual.  They cause people to choose a specific course of action to satisfy a need.  Incentives are external factors that give value or utility to the goal or outcome of the employees’ behavior.

There are a few content oriented motivation theories, namely, Maslow’s hierarchy of needs, Herzberg Two-Factor theory and McClelland’s need for achievement.

 Maslow’s Hierarchy of Needs. Maslow (1954) proposes five levels of human needs, suggesting that lower level needs must first be satisfied before the next higher level of needs will be of interest to the individual. The five levels with the most basic needs are shown at the bottom of the ladder, with prepotency decreasing as one progresses upwards.

1.      Self-actualization – reaching your maximum potential, doing your own best thing

2.      Esteem – respect from others, self-respect, recognition

3.      Belonging – affiliation, acceptance, being part of something

4.      Safety – physical safety, psychological security

5.      Physiological – hunger, thirst, sex, rest

Herzberg Two-Factor Theory. According to Herzberg (1968), There are two factors of motivations -one type (known as the motivators) results in satisfaction with the job, and the other (known as hygienes) which merely prevents dissatisfaction. The two types are quite separate and distinct from one another. In the context of workplace motivation, typical hygiene factors include working conditions, quality of supervision, salary, status, security and etc. Motivators in a work place include: achievement, recognition for achievement, responsibility for task, interest in the job, advancement to higher-level tasks and more.

McClelland’s Need for Achievement. McClelland (1961) expressed three specific needs: a need for achievement, a need for affiliation, and a need for power that together make up a human’s wants. These needs are found in varying degrees in all workers and managers, and this mix of motivational needs characterises a worker’s or manager’s style and behaviour, both in terms of being motivated, and in motivating others.

McClelland firmly believed that achievement-motivated people are generally the ones who make things happen and get results, and that this extends to getting results through the organization of other people and resources. Thus, a CEO must be aware of its employees’ need for achievement in order to get the best out of them.

Process Theories of Motivation

Process theories include motivation theories such as expectancy, equity or goal-setting theories. The focus of these theories is to capture the dynamic of making choices with respect to desired goals. Unlike content theories of motivation, they see the individual not as predetermined and blindly struggling its way upward the hierarchy of needs, but as an active decision-maker.

An example of process theory of motivation is the expectancy theory by Vroom (1964). Vroom’s expectancy theory expressed the view that motivation depends on people’s expectations of the outcome. If working life offers opportunities for workers’ expectations to be met, then motivation is likely to be high. If the outcome of their actions is expected to be desirable, they will be motivated. The stronger the desire for the outcome, the greater is the level of motivation. 

In summary, process theories of motivation offer an opportunity to understand and reflect on the dynamic contextual and individual factors, which constitute a variety of expectations that in turn, influences workplace behaviour.

Participative Management

        Participative management is a process whereby the employees are involved in the decision-making of the organization through formal and informal means. This could include having formal fortnightly meetings with employees to discuss decisions affecting their work lives, feedback survey, suggestion box and etc. The main goal of participative management is to enhance the quality of the employees’ working life and the management must be responsive to the requests of the employees (Lewis & Renn, 1992). If workers can be motivated and given the opportunity to participate in the organization’s decision-making, their job performance should improve. This will in turn increase productivity and thus the profit margins of the company, coupled with an increased in employees’ morale.
Reasons and Benefits of Participative Management

As suggested by Lewis and Renn (1992), a CEO would consider implementing a participative management program for various reasons:

            Poor Performance. In light of a company’s poor performance, a CEO may realize the need to involve employees in decision making to help the company turn around profitability. A program like this could heighten the morale and encourage the employees to search for ways to save costs and improved productivity. In most situations, ideas, changes, suggestions and recommendations that are generated by the people who implement them stand a much greater chance of being successfully implemented. Thus, some of these employees’ ideas can help turn around a company by producing higher-quality products that are more internationally competitive. In addition, people tend to accomplish what they decide they want to accomplish.

            Keeping with Changes. Many CEOs have realized that their traditional and bureaucratic way of management may not be suitable with the rapid changes surrounding the organization. Thus, in order to steer the company in the right direction, they become more flexible and involve the employees in decision-making to gain a competitive edge. The participation of the employees and their collective talents and knowledge can improve the overall quality of decision-making in the face of organization uncertainties.

            Building Relationships. A CEO may turn to participative management to create better relationships between management and the employees. Through participative management, Lawler (1990) stated that it could help the organization to understand and approach the reality of how people should be treated: with respect; dignity; democratic rights; individual rights; and the right to share in the fruits of their labor. By doing so, this would help in building trust and motivate the members to work towards common organizational goals.

Building Effective Groups

A group can be seen as a self-managing unit in an organization. Due to the range of abilities and knowledge-set of the members, an effective group can provide innovative solutions to possible unfamiliar problems. In most cases, the wider skill and knowledge set of the group has a distinct advantage over that of the individual.

 To a CEO, the main advantage of developing a group-based work force is to tap the full potential of the work force through collective efforts. However, one must also understand that there are difficulties in building effective groups in an organization.  The difficulties include conflicts of personalities, power struggle amongst group members and etc.

Organizational Structures

An organizational structure is defined as the formal decision-making framework by which job tasks are divided, grouped, and coordinated. In order to develop appropriate organizational structures, a CEO must study and analyze the design features of the different organizational forms and how it complements the organization’s overall strategy.
As suggested by Burns, T. et al. (1961) and further explored by O’Neill et al. (1997), there are two main organizational structures, namely, mechanistic and organic structures. Mechanistic structures have relative stability and flexibility in the way they organize workers and activities. The decision-making process is usually centralized within a unitary chain of command. According to O’Neill et al. (1997), employees in a mechanistic structure tend to work with specific job descriptions and fall into a formalized hierarchy of control, authority, and communication, and the majority of communication occurs in a vertical format where instructions and decisions are issued by the manager.
            On the contrary, organic structures emphasize flexibility and the ability to adjust rapidly to change. This usually leads to less rigid job descriptions and specialization and encourages individuals throughout the organization to assume responsibility for making important organizational decisions. In addition, due to decentralization, organic structures tend to encourage more fluid information processing and this enables the organization to respond better and faster to unexpected events, vis-à-vis a mechanistic structure.
During these times of unprecedented pace of change in external market conditions, many CEOs have realized the importance of an appropriate organization structure to stay ahead. This has led to many organizations adopting the organic structure to stay nimble and flexible in face of such organizational complexities. At the end of the day, a CEO must grapple with the fact that external environments do determine the internal structure of an organization to a very large extent.

Conclusion

            The marketplace of today will require an organization to be nimble and adaptable in order to stay ahead of their competitors. And one of their critical assets is the strategic employment of their huma n resource. Participative management, effective teambuilding and other initiatives (as described in the paper) have been useful in motivating the employees to work towards realizing organizational goals. In closing, the author wants to emphasize that in order to reap the full benefits of implementing such initiatives, the CEO must study the implications carefully and be sensitive to the needs of the employees.

 

 

This Business 101 article was written by Dr. Alvin Chan on 3/31/2005

Dr.Alvin Chan is a Research Fellow at a research forum in Asia. In addition, he acts as an Advisor for several organizations such as CambridgePI (Europe) and Tumble Tots (Singapore and Asia-Pacific). Contact Dr. Chan at alvinchan88@gmail.com