Discussions in Management Practice

Discussions in Management Practice
By Sohailuddin Alavi
Dedicated to my Nieces and Nephews
Dedicated to my Loving Nieces and Nephews
Brief: This lesson covers definition of an organization; stakeholders theory vs. social action theory; soft side of an organization purpose, vision, goals and objectives; organization performance; organization structures; and, the organization management. Definition: Organization can be defined in many ways. However, a popular definition of an organization is, A group of individuals working together to achieve shared goals. This definition is elaborated as follows. In an organization group of individuals work together in a coordinated manner for a shared purpose, with each one having clearly defined work responsibilities and authorities. This definition has the following dimensions, which if found in a group, cause an organization to emerge. Namely: Presence of more than one person, generally Shared purpose (Please note that shared purpose could be a singular common goal or multiple individual goals for which each individual is depending on others performance) Each individual has an identifiable and specific responsibility within an organization Each individual has identifiable and specific authority to perform his or her responsibilities All individuals in an organization essentially work in a synchronized manner. This helps achieve synergy in organizational performance. Last but not the least; a system should exist to navigate individuals actions in a unified direction and monitor performance within the organization. This system should essentially policy and procedures driven. However, in certain situations it is people driven (personified). The former stable and consistent while the latter system lacks both the characteristics. Stakeholders vs. Social Action Theory Two rather different explanations exist parallel with regard to the basis of organizational emergence and continuity. The Stakeholders theory suggests that organizations are artificial persons (entities) with explicit motives, which are rather independent of their stakeholders. However, to sustain organizations should consider the individual stakeholder(s) interests besides its own motives. For instance, investors demand profit (RoE) Employees demand fair wages and work satisfaction Customers demand good quality products and services at reasonable prices
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Regulators demand compliance and, Society demand socially responsible conduct. The relationship between different stakeholders is evidently competitive rather than cooperative. Usually stakeholders with stronger power to prevail, influence organizations priorities and goals. Hence it is more of a political process that affects organizational goals and performances in the long run. On the contrary, Social Action Theorists suggest that organization is a virtual platform that effectively provides opportunities to each stakeholder accomplish its respective goals (agenda). Each knowing the interdependence of the others for continual achievement of their respective agenda decides to perpetuate relationship with each other, which in turn allows the organization to continue into the future. Major deviation in this theory is that individuals do not work for the achievement of common goal. This follows that in an organization multiple goals co-exist at any point in time. It is the interdependence of the stakeholders representing different goals effectively replaces the need for a common goal to keep the organization going. The Soft Side of an Organization The term soft side of an organization refers to the intangible dimension of an organization the purpose; vision, goals and objectives. Although on the face of it these seem less significant then the organizational system and structures but in reality it is these factors that provide true sense of direction and enable the organization move consistently and rationally towards its destination (So is true to for an individual). Purpose is the explicit declaration by an organization of what it intends to accomplish; and, what value it commits to deliver. For instance a school, however commercially managed, aims to educate young citizens and contribute towards fostering a more socially responsible and productive society in general. Likewise a public utility service institution, although considered a not for profit organization, aims to create public utility services at affordable prices thus contributing towards a building a more sustainable social and economic infrastructure. It is important to take note of the fact that what ever the purpose may be and whether the organization operates as a commercial or social entity profit or to be precise resource generation remains pivotal. However, as displacement occurs, the profit / resource generation becomes the purpose in it self while the real purpose is lost means become the end. The dysfunctional effect of displacement quickly trickles down
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and the organizational performance becomes less effective. For instance, as displacement occurs in public utility organizations they tend to focus on internal efficiencies instead of social effectiveness. Similarly, displacement in commercial organizations forces them to aim at higher profits in a less responsible manner. Vision by definition is a cloudy statement of where does an organization intends to go or what it endeavors to accomplish. In short a vision statement is an articulation of organizational purpose, written to communicate the purpose of business and provide directions across the organization. For instance, an organization might state, We wish to be the most preferred company for our customers. A good vision statement helps harness all employees in particular and stakeholders in general in a singular direction. A vision statement is usually elaborated by the mission and value statements. To be exact, mission statement unfolds the strategy an organization might choose to pursue its vision, while the value statement underlines business and moral principles (the segregation between business and moral principles is only made to enhance understanding, however, both business and moral principles are essentially the same). We shall always provide maximum value for money to our customers by making quality products at affordable prices. This is an exemplified mission statement of the vision cited above. In doing so, the organization might commit to adhere to the following principles, namely; Always putting customers first Innovation drives quality entrepreneurship make better employees etc. It is important that once an organization manifests its vision statement then it should adhere to it in letter and spirit. However, with the passage of time and by the emerging opportunities and challenges an organization might like to revisit its vision statement at appropriate intervals. Goals are specific targets organization decides to achieve in pursuit of its vision statement. Goals must conform to the SMART criteria. In other words goals should be specific measurable attainable relevant and time bound. For instance, I will another degree is a vague goal. Let us now rewrite it to make it smart. I will take a degree in technology by registering in a four year evening program to increase my career chances in my existing field.
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Goals are terminal in nature, which are further split into mile stones called objectives. Objectives help monitor and control goals meaningfully. Let us make objectives of the above goal: To obtain a degree in technology is a goal. This entails following objectives to identify the relevant program; make an application for registration; mobilize financial resources either through own, loan or scholarship, etc. This follows that a singular goal is usually split into multiple objectives, which can be sequential or parallel. In the above example identifying relevant program and mobilizing resources are parallel while making application and registering are sequential to the former objectives. Organizational Performance Performance of an organization is and should be in effect the end of any management a be endeavor. In simple is to Input
Idea; People skills; and, Resources
Permeable Environment Throughput

People performance Resources conversion Coordination and Control
Output
Value Products and Services; and, Profits
terms organizations perfor-mance processes. Organ-ization is said
function of input and throughput effective when it achieves what it when the inputs are
aims to achieve, while it is considered efficient
Permeable Environment
minimized, however, without sacrificing the achievements. In broad terms, however, the performance of an organization is significantly influenced by its permeable environment [factors in the immediate external environment that have directly affect organizations performance are referred to as permeable environment] This includes regulations; socioeconomic and political conditions; demand for the products and services hence the market prices; supply of resources including skilled people; etc. The relationship between an organization and its permeable environment is complex and abstract. It is said to be complex as multiple factors constitute the permeable environment. It is said to be abstract because the marginal effect of an individual factor can hardly be isolated from the combined effect. Moreover, the interrelationship can be seen as reciprocal for organization also influences the environment in many ways: such as, improving life style of the customers by delivering better quality services and products. Organization Structures
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Structures refer to how different segments of an organization [ departments and people] are connected to each other in order to produce the desired performance [ goods and services]. Structures are built along the authority lines and job responsibilities. Tall [administrative] structures are dominantly authority based juniors reporting to the seniors. This type of organization structures had been advocated by Weber the pioneer of bureaucratic organizations. Here authority to make decisions generally lies at the senior most levels. Hence tasks are delegated but without authority. Even at times, junior employees are considered to be performing their jobs not as their jobs but as extensions of and on behalf of their seniors, hence, achievements are credited into the seniors account. The job contents are also minimized at individual level thus reducing the perceived and actual worth of job. These structures make organizational process slow and less responsive to its permeable environment. Some times these structures also serve as a tool to control people and their actions, as the emphasis in here is on disabling people from performing outside the routine boundaries. Resultantly, people become more focused on actions rather than results. Flat structures are in fact hybrids of a tall structure, with the exception that job contents are enriched and enlarged as middle layers are removed or merged with the front layers. It also provides superficial satisfaction to the junior employees as they find them in direct relationship with the most senior person in the organization. Although these structures induce greater productivity in terms of work load per employee, synergy remains a question. Work Groups or matrix structures theoretically represent divergent thinking and approach in organizing the work. However, in practice some elements of administrative organizations do exist in here as well for better or for worse. Conceptually, the emphasis in these structures is shifted from authority to roles and responsibilities. Putting it differently, each individual can clearly distinguish himself or herself on the basis of his or her unique role and responsibility. Hence the chances to encourage focused performance and greater synergy are increased many a times. Organization Management Having discussed the organizations in rather holistic perspective, we should now ready to unravel the scope of management in the context of organizations. The term management refers to a process of achieving the desired results in more effective and efficient manner. Organization management thus refers to a process of creating and
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maintaining an effective and efficient organization at the input level, throughput level and output level. The organization management process can thus be defined as: Planning, Organizing, Directing, Influencing, Coordinating, and Controlling. We shall conduct a detailed discussion of these management processes or functions in the following lessons. Discussion Questions 1. Why organization have to different from a simple group of individuals 2. What makes organizations effective and efficient 3. Discuss the importance of organizations purpose to its performance 4. What effect do different organization structures have on the organizations performance efficacy 5. Describe the function of organization management.
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Brief:
In this unit you will learn about various theories of management, namely; Scientific Management; Management Science; Bureaucracy; Human Relations; Neo Human Relations; and, Systems theory.
Introduction In the previous unit the term management was introduced in the context of organization theory, with a view to highlight linkage between the two. Here we shall discuss this term in detail and later we shall present different schools of management thought. In general terms management is what managers do! This definition has its limitations as ocean wide gap exists in theory and practice. Of course, this follows the fact that many a time individuals are designated as managers but they and sometimes their organizations do not clearly understand or communicate their distinguished role and responsibilities, respectively. Many a time it is seen that consequent to promotion (designation) as managers, individuals begin to assume that now onwards they will have people working on their behalf. In fact they fail to take cognizance of their changing role hence new responsibilities. For instance, a newly promoted sales manager might assume that he is now given so many sales agents who will do the sales on his or her behalf. Meaning as manager he or she is still responsible for selling: he or she has no cognizance of his or her changing role and new responsibility as sales manager. The result is a hitherto good sales person becomes dormant subsequent to his or her promotion. Like wise, the term manager manifests authority in most of the situations, which leads to a rather natural displacement in work behaviors: designated managers become masters. This dichotomy exists in almost any organization and is clearly visible. In view of the above, it is critical to define management more comprehensively and in a less personified fashion: management as a process. Metaphorically, let us consider the role of a teacher from two divergent perspectives. Firstly as someone who has the authority to declare the students either pass or fail. Secondly, as a facilitator who takes the responsibility to create an enabling learning environment in which the students can successfully learn and qualify. The former perspective reflects managers right to prevail over others, while the latter perspective reflects managers role as of a facilitator for a successful performance. Now let us use the facilitators perspective to elaborate management.
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To begin with, unlike authority to prevail over others that is often taken as a right to get ones job done by another person, facilitation entails a process that aims to enable others do their jobs in a befitting manner. Facilitation is a different task altogether from what other employees do hence it causes synergy in other employees performance. This follows that management is a facilitative process that exists in an organization in addition to and to reinforce the tasks performed by the employees. Ideally management task can neither be taken as superior or inferior to other tasks being performed in an organization but as different and equally critical. To conclude this discussion at this point we can say that two streams of tasks are necessarily performed parallel in any organization, namely the technical (job) tasks and management (organizing) tasks. Both streams are interdependent as management task would have no value if it fails to facilitate the technical tasks similarly technical task will deliver no result if not managed. In the following text we shall maintain our focus of discussion on management tasks. Management Theory The origin of management theory began at two locations rather simultaneously: at the production floor in industry and at the apex level in public institutions. Initial developments at each location were made independent of the other, which led to recognition of two rather separate bodies of knowledge, namely; the business management and public administration. However, at a later stage the two have been merged in a single body of knowledge. Let us now discuss each theory rather separately to take cognizance of its letter and spirit. 1. The Scientific Management School 2. The Management Science School 3. Bureaucracy 4. Human Relations School 5. Neo Human Relations School 6. Systems Theory
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Brief:
This lesson focuses on differentiating between managing and the manager thus establishes distinction between management as a system and a position. It will help students clarify the system of management.
More than often the term management is used parallel to the act of supervision. Thus it is always associated with managers individuals at a higher echelon. However, speaking in letter and spirit management should be defined as an independent system, while supervision is more of operating as a technical expert someone who knows better then the juniors or has longer experience of doing the job. This distinction can be further explained by considering that simultaneously two sets of activities are performed across the work organization. One relates to executing the job (executive system) and the other relates to managing the job (management system). The executive system involves actions that are typically technical in nature. It also includes supervision per se. For example, teller in a bank pays checks to and receives deposits from bank customers. Similarly his or her manager acts as a coach and trouble shooter, which are again typically technical roles. Some times, the technical tasks are split between juniors and their manager on the basis of transaction value, complexity and the risk involved. Tasks that are relatively of low value, simpler and posse little to no risk are delegated to the juniors while the tasks that are of higher value, complex and posse higher risk are retained and executed by the managers. Here, it is interesting to note that the tasks handled by the juniors as well as their managers remain similar in nature. In many situations, it is considered that juniors perform the tasks rather on behalf of their managers. In other words they act as extensions and buffers of their managers, while performing the tasks. Inevitably it inculcates conflict of interests hence leads to dysfunctional competition between managers and their juniors. As a consequence managers exist but do not perform the management function in verbatim, and organizations lose opportunities to synergize upon their potentials for a more sustainable future but only succeed in performing mundane jobs via fire fighting and on ad hoc basis. Sadly, many bureaucratic institutions as well as business organizations often portray this scenario and are complacent to improve upon. The grid given below presents an interesting analysis of various management systems prevalent in modern age organizations:
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The Management Systems Grid
Format Traditional [Controlling]

Pseudo Management Process: Assigning low level task; and, Controlling actions
Technical Process: Task Execution according to stature
E Competitive [Management by Objectives]

Pseudo Management Process: Assigning targets and controlling actions
M E
Technical Process: Pursuing Individual Targets.
Orientation Manager delegates his responsibility to the employees to do the task essentially on his behalf, while keeping the control with him or her Ultimately s/he counts the performance of all employees towards his performance. Both manager and the employees see their roles as similar Manager consider performing similar tasks that the employees are expected to perform, in addition to assigning targets to the employees and controlling their actions Both begin to compete internally Both manager and the employees see their roles as complimentary to each others role Manager focuses on creating enabling work environment where employees can succeed, while employees focus on accomplishing their tasks to benefit the organization
Risk(s) Limited scope of management process. Employees fail to accept ownership of the tasks for they can not foresee their individual actualization, hence do not demonstrate passion and responsibility towards performing their jobs well. Limited scope of management process. No relationship exists between the manager and employees. It is likely that every one competes internally thus de-synergize organizational productivity.
Facilitative [Enabling]
Management Process: Establishing Directions; and Creating enabling environment
M
Technical Process: Task Execution and control
Unwarranted employee dependence on the manager Favoritism enabling few and ignoring others employees
Synergistic Interdependence
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Progressive [Empowering]
Outer Inner Core Core
Each individual has Lack of employees as high degree of role well as management clarity; Manages and systems maturity may employees know their lead to chaos in the respective responsibiwork place. lities individually within the given organization management system. Need for a manager is virtually eliminated, for every one is a manager and employee within.
Management System Now let us try to explore management as a system. To being with, the end result of management technical system is to compliment the system. Thus it is about Walt Disney once said, People think I am genius and so have done the wonders in the world of entertainment. They are wrong! My contribution in introducing new dimensions in entertainment was only that I brought together people who were smarter then myself and provided them with a conducive work environment where they had been able to work together, for as long as they were separated from each other they could perform nothing.
establishing an enabling environment for the technical system to run successfully. The enabling environment represents a set of physical and intangible situation that
essentially encourages and enables individuals to work together to produce what any one individually can not. Though here we are explicitly referring to management as a system of enabling two or more people to work together, but we also need to consider the significance of management system at each individuals level. Variables that essentially form the management system, their inter-relationship and effect on the technical system are portrayed in the diagram given below. The variables are split into two levels, namely; back-end variables and front-end variables. Back-end variables represent primary actions and include establishing directions, planning, organizing, directing, monitoring and checking, and making alterations.
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Typical Management System and its Impact on Technical System
Back-end Management Variables Establishing Directions Planning Organizing Directing Monitoring & Checking Making Alterations
Front-end Management Variables Culture Communication Coordination Decision making
Impact on Technical System 3S Synergy Success Satisfaction
Front-end variables include enabling shared culture, cross communication, vertical and horizontal coordination, and just decision making (also problem solving). The relationship between back-end and front end variables is portrayed as interdependent in diagram. The assumption is that back-end variables provide the infrastructure for the front-end variable to be carried out meaningfully, while the effectiveness of front-end variables provide objective basis for continually adjusting the back-end variables. Together an effective management system influences the technical system in terms of synergy, success, and satisfaction. Yet another interesting classification of managerial system was done by Henry Mintzberg 1. He identified ten different managerial roles, which he then clustered into three distinct but interlinked groups, namely; informational, interpersonal, and decisional roles. Interpersonal roles include figure head, coordinator ( leader), and liaison. Informational roles include spokes-person, monitor, and disseminator. Decisional roles include entrepreneur, disturbance handler, negotiator, and resource allocater. Conclusion Management is a complementary process that should essentially aim to augment higher effectiveness of the technical process at every level. However, it would be grossly mistaken to consider the management process as superior to the technical process but both the processes are equally critical. Following this maxim, the term management must always be interpreted to reflect upon the process or the role-function not the status or seniority. It is being affirmatively suggested that the practice of designating senior operations specialist as manager to elevate his or her status while the job remains operational in
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nature needs to be abandoned as it is widely noticed that such managers fail to perform management function in most of the situations but act rather as operational experts and troubleshooters, which reduces their work productivity on one side and on other side they fail to perform management function in verbatim. Instead it is recommended that either organizations should explicitly split technical and managerial functions at each level of the organization (front end; middle; and, upper echelon) and accordingly develop two parallel streams of employees as operations and management specialists to work interdependently, without creating status incongruence at any point in the career paths of operational and management specialists. Meaning both should have ample opportunities to grow within their respective domains. Alternatively each job, irrespective of its location, should essentially be split into technical and managerial dimensions and employees either located in the inner core or outer core should be developed on both aspects of their jobs. Put it simply, empowerment of employees both at the outer and inner cores should essentially by ensured. ____________________________
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Intervening management processes refer to a number of essential interventions that aim to achieve business process effectiveness and efficiency on day-in day-out as well as on long terms bases. These interventions typically include establishing communication structures; enabling coordination; enabling smart decision making; harnessing organization culture; and, continuous learning and development . Let us describe each of the above intervention separately. 1. Communication Structures: Flow of information within and outside an organization between different departments and individuals is critical for efficient and effective business performance. It is understandable that the information contents must be valid and reliable at all times. The term valid refers to the usefulness and relevance of the information to the receiver, while the term reliable refers to the accuracy and consistency of the information. Much of the information validity and reliability depends upon the communication network that exists in an organization. Does the network allow free flow of information? Does the network allow timely and correct information exchange? Do people have trust on the network? These are few aspects that determine efficiency and effectiveness of communication network in a work setting. Management intervention hence should aim at fostering the above to ensure reliable and valid communication across the work organization and within its permeable environment. Generally speaking information flows formally as well as informally in an organization. When any information is routed through formal structures it is said to have been communicated formally, while information routed outside the formal structures is said to have been communicated informally. While formal structures allow more control on the information flow, informal information is rather speedier and has its unique advantages. Hence, coexistence of formal and informal communication networks provide a unique combination of effective and efficient communication opportunity, respectively. Formal communication structures are predominantly influenced by the organizations management system. Communication structure in a tall administrative (dogmatic)
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management system is likely to be top-down and bureaucratic. Such structures are generally characterized by red-tapism; controlled access; inefficient; less responsive; and, are largely vulnerable to subjectivity i.e. perception differences due to respective positions and interests and status incongruence i.e. emotional prejudice of seniors vs. juniors. These characteristics raise doubts about the validity and reliability of information communicated through administrative communication structures. Moreover, it encourages unwarranted reliance on informal structures (grapevine) that lead to false assumptions and distorted perceptions. As better management systems evolved over the years, improvements in the communication structure also followed. Consequently we witnessed emergence of many variants with increased validity and reliability within the domain of administrative management system. Most noteworthy are the two-way communication; lateral communication; and, direct (flat) communication structures. Two way communication allows down-top communication in addition to top-down communication. Firstly, this structure allows people at the top (in the centre) get the feed back thus make better decisions subsequently. Secondly, it encourages and allows participation across the work organization hence builds stronger trust between top (centre) and front (outer) segments of the work organization. However, it is observed that the argued improvements remain pseudo in quite a few situations. Lateral communication allows individuals to communicate (exchange information) across the departments concerned without unnecessarily involving other individuals, especially those on the higher echelons. While it makes communication speedier, subjectivity and status incongruence remains a barrier. Direct (flat) communication refers to a scenario where the middle tiers are virtually or physically by-passed as and when the top man communicates with the front-end employees and vice versa. While this structure promotes better relations between the two; improves morale at the front end; and, enhances communication efficacy, it also causes some degree of chaos in the work place by challenging the legitimate authority of middle tier employees. Matrix organizations are rather emerging structures. For many obvious reasons the communication system in these structures is also quite different from the conventional variants. In order to understand the communication dynamics in here, it is important to understand how a matrix organization structure works. It would be right to consider a matrix structure as dynamic or fluid in nature. The positions and roles of various individuals keep changing on task to task basis. For instance, the cricket field virtually
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plays under the directions of the bowler. As soon as the new bowler, another player from the existing field, takes over the bowling his predecessor moves back to a field position. To find a similar analogy in a work setting think of a project based structure. Individuals from diverse specializations (departments) come together to work on multiple projects. Each person will have varied stature in the organizational hierarchy. However, his or her status in each project would primarily be of a team player. In one project he or she may work under the supervision of another team player, while in another project he or she may have a supervisory role whereas the other individual would now work under this persons supervision. This phenomenon of changing roles can also be witnessed in a routine work situation as different team players might supervise different tasks being done by the same group. Yet another example is of committees. In any modern organizations there is more than one committee, while the members all the more remain common, different individuals from amongst head different committees. Consequently, a dynamic communication structure would emerge whereby individuals will communicate with each other in multiple capacities simultaneously. Like any other system, this system also has its peculiar limitations. Such as, dogmatic organizational culture; status incongruence; specialists subjectivity; etc. deters communication to a large extent. Informal communication structures are basically outcome of inadequacy of formal communication system. When the formal system fails to communicate, people tend to move towards informal structure in search of truth irrespective of the fact if they find it or not. Informal structures are made up of individuals working at randomly different locations in an organization yet inter connected with each other on rather informal relationship basis: colleagues, friends, members to an association, etc. Ironically no one has the complete information but just a bit of it. By sharing with each other what one knows enables them building a bigger picture true or false. While it satisfies the natural urge for complete information it also provides strong basis for developing shared assumptions and understanding. Sometimes the shared assumptions and understanding can be much close to the realities, however, most of the times these are mere wishful beliefs that allow individual to sustain consonance in their perceptions and the work situation. Informal communication structures are largely seen as supportive of formal communication system unless the organization is extremely dogmatic. The underlying reasons for this supportive nature of informal communication structures are very simple: information travels much faster in here as compared to formal communication
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system; individuals tend to have more confidence on informal communication structure as it is primarily built on personal relationships; individuals tend to be more candor in expressing their feelings and facts through informal structure; etc. It is therefore organizations consider it as complimentary to the formal communication system, especially in seeking candid feed back. 2. Coordination Organizations business processes or functions are split into numerous departments such as warehouse; production; marketing & sales; finance & accounting; research & development; and, human resources and administration; etc which means each department performs a different role. However, it is imperative for each department to synchronize its activities with other departments in order to optimize business process efficacy. Thus the second most important management intervention is to encourage and enable coordination across the organization for optimal efficacy. Coordination as clearly demonstrated above refers to synchronizing the activities of two or more departments and/or processes. It can be thought of either horizontal or vertical in nature. A horizontal coordination refers to lateral coordination while vertical coordination refers to upwards coordination. The need for horizontal and lateral coordination exists for both at intra-department and inter-department levels. An interesting way to achieve inter-department coordination is by identifying and emphasizing internal customer and supplier relationship between two or more departments based on their process interdependencies. For instance, Purchase department is a virtual (internal) supplier of materials either to the warehouse or production department while the latter department is the virtual (internal) customer of the former. The recognition of this type of relationships enables each process (department) to focus on their virtual customers and synchronize their activities in accordance with them. It is interesting to note that a particular department can be a virtual customer in one situation and a virtual supplier in another situation. Just like the production department in the above example is the internal customer to the purchase department for raw materials, simultaneously it is an internal supplier of finished goods to the sales department. Intra-department coordination is enabled through job design and direct supervision. A complex job design i.e. a job that allows individuals more control over the outcome and also empowers the individual to make job related decisions provides more independence hence entails lesser need for coordination. Whereas, a simpler job which
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requires many people to work together to produce specific output coupled with lesser empowerment at the individual level entails much frequent coordination and control. 3. Decision making Decision making is quite an essential behavior that needs attention. Decisions need to be unified, rational and consistent where ever and who ever decides. This follows that all decisions should essentially be taken with the holistic organizational perspective. For instance, how will this decision affect the entire organization? Secondly, a decision needs to be based on some organizational rationales (principles). For instance, whether it envisages increased profits or decreased expenses, etc. Finally a decision should be consistent with decisions made elsewhere and in the past. For instance, a decision to reduce non development cost in a department should essentially coincide with similar decisions made elsewhere in the organization. It is, however, interesting to note that in dynamic environments organizations do require to deviate from their legacies and make radical turns in their business direction. In such scenarios business rationale might advocate making inconsistent decisions from past. However, this would be exceptions. In an administrative organization mostly and in other organizational system often supervisors take decisions and their subordinates comply with them by performing certain tasks. Ironically it is this decision making role of supervisors that is considered management and the supervisors are titled as managers although these decisions come directly under the purview of a typical business process. On the contrary the managements role or function per se, is of clarifying direction and empowering individuals within the business process domain to make smart (reliable and valid) decisions, be it supervisors or their subordinates. This follows that primarily two distinct yet complimentary management interventions need to be carried out towards enabling good decision making in an organization. Namely; clarifying organizational direction and encouraging empowerment. Clarifying organizational direction is not establishing organizational direction but communicating it across the organization effectively and efficiently. This involves selling, negotiating and persuading by the management specialists in order to create a shared sense of direction across various business processes or departments. Sharing of direction is not enough to make smart decisions. Empowerment of the individuals who make decisions day in day out is equally critical. The term empowerment strictly refers to a state of an individuals mental maturity (capability)
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where s/he begins to make rational decisions from a holistic perspective. This typically requires diverse work exposure and mentoring in the organization along with encouragement to out of box thinking. Here a typical management intervention would be to provide a policy environment where all this is recognized and enabled in letter and spirit. In organizations four major variants of decision making structures are found, namely; centralized, consultative, participative, and delegated. Centralized decision making entails that all decisions are made by a single person who is usually Head of the organization or department rather independently. Consultative decision making is a bit different from the centralized decision making. It encourages the decision maker to consult and ponder upon the issues with other members of the organization before making the decision. Participative decision making is a step further. Here other members not only participate in considering the issue or its solutions but also are part of the decision making. Meaning decisions are made on the basis of consensus between amongst the select group of individuals and where the consensus is difficult or not possible then on the basis of majority. Delegated decision making is the opposite of centralized decision making. Here each individual is delegated authority to make decisions within his or her domain /specialization. For instance, people decisions are made by the HR specialist; production decisions are made by the production specialists, so on and so forth. Centralized decision making by default is constrained by the bounded rationality of an individual. However, it is quicker and requires lesser coordination efforts. Consultative decision making effectively overcomes the bounded rationality by the involvement of individuals, especially when they come from diverse backgrounds. Such as marketing, finance, production, etc. Simultaneously, it also has the advantage of lesser coordination requirement as the decision is finally made by the individual. (Interestingly, it is this consultative decision making that is prescribed in the Noble Quran). Participative decision making is vulnerable to dilution and displacement of the issues and unnecessary delays. Moreover, usually in process of gaining consensus inevitably compromises are made on subject matter of the decision. Likewise in case of decisions by the majority, it is much likely that certain interest groups will dominate to influence the decision in their favor as it is very common in our political society. Delegated decisions provide for specialized and focused decision making but at the same time it is likely to lead to subjectivity (narrow horizon) and require a lot much coordination efforts.
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4. Organization Culture Culture is defined as set of shared beliefs, values and norms. Organization culture thus refers to set of shared beliefs, values and norms of individuals working together in a particular organization. The significance of organizational culture is that it provides a strong basis for discipline, cooperation, and performance, hence it merits harnessing for higher business efficacy. Beliefs are deep rooted assumptions that help us perceive about events, situations, opportunities and even people. A valid belief would obviously cause valid perception and vice versa. Values are the principles that enable us distinguish between good and bad, right and wrong, etc. Values are largely influenced by our beliefs and reinforced by our immediate environment. Norms refer to our (automatic) standard responses to particular event, situation, opportunity or people. Here a typical management intervention would be to encourage positive (constructive) culture and at the same time to discourage dysfunctional culture. It is clearly evident that as an organization embarks upon a Change Management prog ram, altering the culture usually precedes change in any other direction, for without cultural change business practices and processes can not be changed. This is because of the fact that behind every business process and practice is a human mind that either accepts the change or rejects it. To initiate the cultural change organizations need to identify so called Dos and Donts of work behavior in the form of organizational values; communicate or disseminate the same to the outer most boundaries of the organization, and finally introduce rewards and punishment system to encourage adherence and to prevent ignorance of the values, respectively. 5. Learning and Development Prophet Mohammad SAAW said, Whos today is no better than yesterday is doomed. According to an article published in an international magazine, organizations grow to doom. This phenomenon is explained by Daniel Goleman in his famous research on Emotional Intelligence. Accordingly, as world class summers stopped improving their performances their subsequent performance deteriorated, this was validated in a structured experiment conducted by Goleman. Organizations are no exceptions.
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6. Bryan Joiner in his book titled, Fourth Pace of Change/Performance Generation this organizations Management by with varied articulated two of pace concept comparing
Alpha
learning and change. He concluded that the organization, which was learning and changing faster than its counterpart organization comes out as winner especially in the long run. See figure 5.1
Beta
Fig. 5.1
Time Horizon
Surely the locus of learning and change should be the business processes. Attempts should be made continually to improve upon the efficacy of business processes as a basis for increasing organization performance. But creating a policy and physical environment conducive for learning and innovation is a function inside the purview of management process. Integration of technology into business processes, such as ERP solution is a good example of creating an enabling environment. Besides, providing appropriate inducements to encourage innovation at each point is also critical. For example, Cummins UK explicitly encourages its employees by saying that, We have hired you to improve, if you maintain status quo we will fire you. Likewise, KAIZEN, TQM and Six Sigma are also good examples of inducing learning and change.
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Introduction: In managing the profits on rather longer time horizon, organizations need a strategic direction for operating and competing in the industry. Basically, it has two dimensions; namely; corporate [conglomerate level], and business [SBU] level. Corporate strategic plan relates to integrated management of all the SBUs together to enhance group [synergy] profitability or its control in the industry. On the other side, Business strategic plan deals with managing profit within a single business unit. In essence, the focus is upon managing the profits of the organization by maximizing the value creators and minimizing or eliminating the value destroyers. Strategic planning, in essence, is determining: Where is the organization today What is the value of the organization, and which units of it are creating value and which are destroying value? Where is the organization going What opportunities for adding value exist, and which one should ? How is the organization going to get there How can the options identified in the previous step be exercised such that maximum value is added to the organization? Corporate [conglomerate] level planning: A typical conglomerate can be seen as a cluster of SBUs along the value chain. For instance, a fabric weaving mill adds on a spinning mill and a garments manufacturing unit. The former is referred to as backward integration and the latter is referred to as forward integration. Alternatively, a fabric weaving mill can add yet another fabric weaving mill, which would be considered as vertical integration. Furthermore, a fabric weaving mill can add on diversified businesses such as a floor mill or a commercial bank, etc. This type of integration is referred to as diversified integration. The rationale for forward and backward integration is generally to gain more control over the supply chain of a particular product thus to reduce cost and increase market [price] the organization pursue. And what (value destroying) business should the organization sell or discard
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control. Many textile enterprises engaged in fabric weaving now have garment manufacturing and some times spinning factories to improve their production efficiencies and market control. A vertical integration also aims to increase the presence and influence in a particular industry by way of increasing the overall capacity of doing business. A good example is Unilever acquired Polka and Igloo ice cream companies to become the sole ice cream vendors in the industry thus improving upon their monopolistic advantages. A diversified conglomerate is a good tool to buffer the groups profitability from cyclical down turns of a particular industry. For instance, if there is a downturn in the textile industry, profits generated from a commercial bank or floor mill can conveniently compensate lower profits in the former unit. Thus a stable profit stream can be projected over a longer period. Besides, a diversified conglomerate enhances the ability to continue operating a less profitable SBU even in sluggish periods. Business [SBU] level planning: Long term management of profits at the SBU level is equally critical. Here the decisions concern increasing the profit margin of a particular business. Two routes are generally considered in this regard, namely; Cost leadership and Market differentiation. Cost leadership aims to continually reducing the cost of producing the product thereby increase the profit percentage. This route is generally efficiency driven achieved either through economies of scale, improved business processes, and even reduced product quality and quantity. It is mostly advisable in the highly competitive commodities markets where neither higher price can be charged nor can product differentiation be effectively achieved. Market differentiation on the other hand essentially aims at converting a commodity into a differentiated [separately identifiable] product. This involves product positioning and branding, which actually means affecting the perceptual value of a commodity relative to its parallel commodities. This allows charging premium prices in the market, thus without improving or even despite increasing cost of production higher profit margins can be achieved. Generally Cost leadership requires producing standardized basic products to cater to the broader market base hence achieve economies of scale. However, sometimes cost of a product can be reduced by developing more customized products by eliminating extra frills to offer in a niche [narrower] market segment. Product differentiation is generally based on niche market. However, differentiation in a standard product scenario can be done at the service level thus increasing the turnover of a particular product. In nut shell market differentiation can be done in the broad markets for increasing economies of scale by a particular supplier. For instance, Shell Pakistan and PSO although vending a commodity to a broad market, yet maintain differentiation to sustain an increasing demand for their respective commodities.
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Strategic Process: Planning managers and executives need to do the Situation Audit to answer Where the organization is ? before they can decide Where to go and how to get there? In doing so, they conduct SWOT analysis to determine internal strengths as well as weaknesses and external opportunities as well as threats. Internal analysis emphasizes financial and market performance. While external analysis focus upon market situation, customer satisfaction, regulatory environment, economic system, etc. In addition, managers must know their stake holders - customers; owners; depositors; borrowers; management, supervisors, and other employees. Once the managers know where their firm is and what it is worth, they can rightly decide where it should be going. Such a decision usually has a five year time horizon. However, strategic plans should always remain subject to annual review and adjustments. In establishing the future position of the firm, an articulated Corporate Vision is essential. the vision should be brief, broad, and some what vague sense of the future direction. It should broadly identify target customer segment and products/services representing organizations priorities, and how it wishes to position it self in the high priority markets. Given the organizations Vision, the elements of SWOT analysis assist managers in identifying alternative strategies and in their evaluation towards exploiting their unique SWOT condition in order to decide how to get there ?. At this stage, managers need to do What-if-analysis; scenario-planning; computer-simulations etc. Once an overall plan and specific strategy have been developed, these must be implemented and monitored. Conclusion: Survival for a firm is fundamental reason for undertaking the process of strategic planning. However, since most managers want to do more than just to survive, even higher reasons for strategic efforts exist for them.
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The term Corporate Performance relates to the overall efficacy (effectiveness and efficiency) of a business firm in particular and any other firm in general. It needs to be looked upon and analyzed from the external and internal perspectives. Refer to the diagram: Corporate Performance Framework
EXTERNAL PERSPECTIVE: Responsible business conduct From profit alone to multiple goals: Commercial, ethical, regulatory, social, and environmental.
INTERNAL PERSPECTIVE: Synergistic performance From short term profit centric to long term competitive advantage orientation Diversity; Roles; Precession; Faster learning and change
External Perspective Conventionally profit (earning per share) was the only measure of corporate performance. However, in the modern times corporate entities are expected to demonstrate rather holistic performance, which includes regulatory compliance; ethical compliance; social compliance; etc. in addition to their profit targets. In short, contemporary corporate must act responsibly towards attaining its commercial objectives by adhering to social, regulatory, and ethical norms of the land. Hence, corporate performance which was hitherto driven by profits alone now encompasses a complex system leading to multiple and some times conflicting corporate goals. For instance, a successful modern corporate aims to accomplish in the following directions: a. Profit growth b. Total regulatory compliance c. Ethical business conduct d. Environmental safety (external and internal) e. Win-win transactions (relationship) with the permeable society Obviously seeking profit as a reward for investing money, human capital, and time is a legitimate goal for any commercial or other firm. Furthermore, profits in the
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long term also provide basis for the sustainability. However, the debate is now focused on making just profits rather than maximum or minimum profit. Just profit is defined as one that is made in a responsible manner without violating own or any one elses rights be it customers, employees, ow ners, society, etc. Regulatory compliance generally aims to protect the rights of the stakeholders in particular and society in general. It defines boundaries, norms, and the work environment that is beneficial for all. Besides, it gives legal share to the government in the profits of an entity in consideration of the services it provides. Ethical business conduct refers to voluntary adherence to ones own and others rights, manifested in the business processes, product quality, and transactions. Besides, protecting and maintaining safe and healthy psychological and physical environment is yet another major aspect of corporate performance. It demands conducting business in a manner that does not destroy the physical or psychological environment. Such as, destruction and pollution of physical environment; harassment and violation of psychological environment; etc. Proactively fostering mutually complimenting relationship with the permeable society is but another important dimension of modern corporate performance. It demands from the corporate to respect the social norms and values; protect native culture; and last but not the least, not just to ensure equal rights and opportunity to all without bias but to go a mile extra in improving upon the social standards and quality of life of the permeable society at large. Internal Perspective Firms corporate performance from the internal perspective can be analyzed on a performance continuum. The performance along the continuum will be from salvaging (aggregate) through mundane (average) to synergistic (constantly improving). See diagram below. Corporate Performance Continuum
Synergistic Mundane Salvaged
Salvaged performance portrays scenario of below average overall efficacy and sometimes even continued losses. These firms generally lack holistic approach function from the conventional perspective. Moreover, these firms fail to manage
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their process efficiencies and service/product quality, which hampers their long term profits. Public sector firms are a good example of such salvaged performance. Furthermore, these firms quite often have had invested in directions that neither were nor are feasible from any angle. Such as, big successful companies when diversify their businesses they usually over look the fact whether they have the core competencies to operate in the new markets. Or they simply make decisions on increased projected revenues while keeping their eyes closed on the corresponding projected increase in cost. Consequently, while the revenues multiply but the cost hikes by a greater percentage pushing the profits even below current levels1. As they usually say, Companies grow to doom. The recent consumer financing tragedy of Pakistani commercial banks is a good example in this regard. Mundane performance refers to the scenario where a firm typically attains low average performance with minimal growth rate on the long term horizon. This is because the firm may attain higher performance in a particular year but fail to sustain it on a long term horizon for one reason or the other. At many instances much of these firms performance depends upon their external situation. For instance, performance of investment portfolio of an individual largely depends upon the equity market sentiments. Another example is sugar producers and retailers who are currently booking humongous profits. Ironically this growth in their profits is purely a result of the particular market situation rather than their affirmative strategies and interventions to improve upon their productivity, hence the growth can never be sustained. Synergistic performance refers to a sustainable advantage that comes from constant change and improvement in the processes and products of the firm, which Kaizen help maintains the firms growth rate above others. environment, Japanese Comparison of Core Dimensions
Conventional Firm Short term profit centric Status driven positions Delegated authority Horizontal diversity of skills Status quo Synergistic Firm Long term sustainability Roles driven positions Empowerment Vertical and horizontal diversity of skills Constant improvement
Total Quality Management system, and the Emergent
Leadership practices are good examples of synergistic performance culture. The basis of this is surely internal to the firms management process. Synergistic firms distinguish themselves on the following dimensions, namely; profit vs. sustainability, status vs. roles, authority vs. empowerment, horizontal vs.
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unidirectional diversity, and last but not the least status quo vs. constant improvement. Business Process and Corporate Performance It is important to analyze the business processes that are instrumental in attaining a particular level of corporate performance salvaged; mundane; and, synergistic. For the sake of analysis and comparison these business processes can be identified as Control; Manage; and, Lead. To begin with, let us establish the relationship between level of corporate performance and type of business processes. Control orientation in
Lead Performance Growth Index
business processes by and large cause the corporate performance to remain at salvage level, while managing oriented performance to the next mundane. business To process improve level i.e. corporate must business processes improve
orientation
change to lead type.
Control Salvaged
performance to synergistic level the
Manage
Mundane
Synergistic
Control orientation is typically a short sighted
mindset
that
instills
reactive
practices such as quality control instead of quality assurance. In a typical control oriented firm administrative discipline prevails over the rationality of behaviors; legacies are blindly looked upon positively; follower-ship dominates across the firm; decision making and execution remain detached from each other; functional subjectivity prevails over holistic reasoning; etc. All this cumulatively inhabit learning, innovation and change hence fail to prevent performance lapses but to salvage it only. In brief, firms operating from control orientation remain focused on fire fighting to salvage short term performance hence lose sight of long term opportunities as in the UK they say, Penny wise pound foolish, and as in the Noble Quran ALLAH Al Mighty describes those people who desire (follow their lust in this) world and they will have no reward in the hereafter [ALLAH Al Mighty knows better]. Mundane orientation is a step forward. It fosters preventive practices per se. In here, quality assurance supplements quality control, thus allowing the firm to attain quality performance within bearable limits. Put it differently, by quality
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assurance process the firm ensures strict adherence to given performance parameters that in effect prevent the performance lapses to a greater extent. Quality control remains in force to check quality lapses, however, reduced these may become. Doing so performance is enhanced to a higher level but not beyond the given parameters par excellence. This is because long term advantages remain secondary to the short term profits. Subsequently, out-of -box thinking would still not be there to move out of the short term perspective hence the need for learning, innovation and change would also remain confined to meetings and seminars, if at all. Typical firms that consider ISO quality system [certification] as an end in itself are good representatives of mundane performance. As they say, like father like son. Bryan Joiner in his book The Fourth Generation Management, contemplated that firms, which learn and change faster are bound to supersede others who do not change or do so at a nominal rate. Synergistic or par-excellence performance is defined as one that constantly raise firms performance level. There is this saying of the last prophet Muhammad SAAW in this context, The one whose today is not better than yesterday and tomorrow is not better than today is doomed. The Lackson Group, a Pakistani conglomerate, affirmatively inculcates this culture; they say, We raise our bars every day. Walt Disney said, People think I had made wonders, they were wrong. When I got together with other people of diverse skills, each better than the other [better than my self] in his or her respective field we together created wonders. This follows that synergy essentially entails diversity, interaction and interdependence. To attain synergistic performance culture the firm essentially needs to switch to long term perspective; empower by inculcating leadershipmindset2 across the people without regard to their status and location; instill unidirectional diversify of skill set at all levels; focus on unique value that each individual should contribute based on his or her role function; integrate departmental performances along shared corporate directions; and last but not the least, transform hierarchies into work groups. Conclusion: In the contemporary fast changing extravaganza of global businesses it is extremely important and urgent for a firm to envisage beyond profit and to encompass ethical, regulatory, and social dimensions as integral constituents of external corporate performance. Likewise, attaining synergy in the internal corporate performance is equally critical to remain eligible and sustain
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competitive position in the global economic village. Any compromise on the external or internal performance fronts will render the firm in-competitive and virtually defunct. ____________________________________________________________________________ References: 1. Book titled Focus. With apology, name of the author is not known 2. Sohailuddin Alavi, The Emergent Leadership Skills [See exhibit a]
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Exhibit A The Emergent Leadership Skills 1. Power to Lead: It focuses on individuals readiness to conduct him- or herself from the leadership perspective. A true leadership perspective is characterized by rational independent thinking and actions, based on sound socio-moral cognizance, that continually challenge status quo and reform for a better future. Conventionally, however, majority of the people perform from the follower-perspective that essentially hibernates their individual cognition, values and perception thus hijacking (altering) their individual thinking. Put it differently, these people begin to live and conduct themselves from an alien perspective hence lose sight of their own identity and directions. More so blindly sticking to the past practices, work methods and not challenging the rituals is also but a reflection of follower-perspective. The former perspective inculcates affective energy to take on opportunities and face challenges innovatively, thus makes the performance meaningful, consistent, and just. The latter perspective, however, inhabits innovative outlook thus leads to ritualistic behaviors and mundane performance. As visible above, it is more of self-behavior instead of interpersonal-behavior. Power-to-Lead entails higher degree of conviction; harnessed motivation; and, stronger moral integrity in whatever and wherever an individual (employee) performs. 2. Empowerment Empowerment provides to the individuals independence and rationality in their conduct - seeking opportunities, facing challenges, making decisions, executing and shooting problems - in unified direction. Thus at the individual level it improves consistency and objectivity in performance, while reducing need for others directions and control. In precise terms, it refers to individuals m aturity on the job to the extent that they are independently able to conduct on the job hence manage their performances on their own. Having said this, empowerment as a skill-set helps individuals perform rather independently yet synergistically. Empowerment has following dimensions, namely; discipline, responsibility, and emotional power. 3. Horizon It focuses on the individuals ability to see opportunities and challenges beyond the present and beyond the obvious. In other words it is an ability to understand the relationship between discrete present and cloudy future. It is defined as, Insightfulness and ability to clarify directions. Here the term horizon refers to a visionary perspective with a strong focus on present and a sense of direction that gives meaning to the vision and focus. Thus it provides a compass to distinguish between productive and unproductive performance based on the end in mind. Horizon can be developed [acquired] through a set of specific characteristics. Such as, being generalist, learning to articulate, and knowing oneself and his or her environment, dreaming, attention to details and insightfulness. Horizon has following dimensions, namely; vision, focus, and sense of direction. Let us now discuss each in rather detailed manner. 4. Social This has focus on the individuals ability to work and interact with other p eople. It is defined as, The interdependence and ability to collaborate and reinforce performance and relationships. It has the following dimensions, namely; team-player, role-model; moderator. 5. Management focuses on the individuals ability to control the business activity and/or process in an efficient and effective fashion. It is defined as, Independence and the ability to make decisions rationally. It has following dimensions, namely; attention to details, systems thinking, and managing change.
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In the previous unit we introduced the corporate performance framework. In this unit we will discuss the corporate performance planning, both as a system and a process, with the aim to equip you with the knowledge and skills that are required to develop the corporate plans. The term knowledge refers to ones understanding of the significance, underlying rationales and the uses. In this case the knowledge refers to your understanding of the significance, rationales and the uses of a corporate plan. This knowledge will help you do the planning in a more informed manner hence more meaningfully. Skills refer to ones understanding of the process or steps involved in doing a particular task. In this case the skills refer to your understanding of, as well as the ability to perform the process or steps involved in developing a corporate plan. Corporate Planning The corporate performance plan is considered as a system for it consists of a holistic (organization wide) corporate plan; and, a set of inter-related secondary plans of individual units of an organization, which are directly derived from the holistic plan. The chart below portrays a typical corporate planning system:
Corporate Plan
Marketing Plan
Human Resources Plan
Production Plan
Action Plan / Budgets
Corporate planning entails a systematic process. Many variants of the planning process suffice for a successful and comprehensive corporate planning though. Here we suggest the following typical process as one alternate. It consists of the following steps:
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1. Clarifying business directions 2. Strategic analysis 3. Developing strategic corporate plans 4. Developing derivative plans Significance Corporate planning per se is an effective instrument of directing an enterprise meaningfully and realistically. Its significance is quite obvious, for it provides rationality to business decisions; consistency of actions and systems orientation in managing corporate performance. Furthermore, it also provides a useful benchmark to monitor and evaluate corporate performance on a continual basis. Many will argue that corporate planning is too much of unnecessary articulation to conclude an action plan, when we already know what needs to be done. The counter argument in this case is even if we accept that the manager knows, but all others dont know. Hence they will be forced to depend on their guess work when given the action plan, which is more likely to distort their knowledge. Consequently, there will be no empowerment and secondly there will be distrust and lack of commitment especially when the knowledge is distorted. There was this incident of a factory; every time the orders were to be delivered on urgent basis extra production shifts were planned and employees were compelled to work overtime, they were equitably compensated for the overtime though. As a general practice, absenteeism used to increase during that period. Frustrated with this attitude of the employees the management invited a psychiatrist to investigate into this attitude of the employees. The psychiatrist concluded that primarily there is a mistrust amongst employees, which is because of the fact that they were never explained the under lying reasons for the overtime - instead they were simply compelled to work over time and were left on their own to assume the reasons. On the recommendation of the psychiatrist the management started sharing the entire information with the employees. The results were dramatically encouraging absenteeism reduced to a considerable level, which was a clear indication of empowerment and commitment amongst the employees. 1 Clarifying Business Directions Clarifying business directions is the first step. It mainly focuses on developing consensus of stakeholders on the ultimate and transient values an enterprise is expected to create, which provides the basis for articulating corporate vision and values
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Two schools of thoughts seem to exist. One considers profit as the ultimate value while market competitiveness; productivity; human factor efficacy etc. are transient values. The limitation of this school of thought is that it ignores in totality the need for a win-win relationship of the enterprise with all the stakeholders those who provide money [investors]; those who input performance [employees], those who buy or consume the services or products [customers]; those who make available the materials [suppliers]; those who live and operate in the surroundings [community; etc. The advocates of second school consider the ultimate value in a much holistic perspective. They deem necessary that ultimately together everyone [stakeholders] should achieve more. This leads to the concept of Responsible Business Conduct, which means the enterprise should conduct its business transaction in the manner that protects theirs as well as everyone elses rights. In other words, it is to conduct business in a socially and morally disciplined manner. Here the right to earn profit is not denied but it is demanded that profit should always be earned in exchange of equitable value to other stakeholders be it customers, suppliers, employees, government, or the community. This is grossly contrary to the ritualistic orientation of corporate social responsibility in the former scenario. The recommended process of clarifying business directions consist of two levels. In the first level it entails answering a few questions pertaining to the enterprises business to uncover the following facts: What is the enterprise business / value it provides to it customers in particular? What are the enterprises life line /critical survival factors? What is the enterprises socio moral obligation? What is the enterprises legal obligation?
In the second level, business vision and values are articulated in the context of above uncovered facts. A typical business vision is an expression of futuristic performance. In other words it describes the anticipated commercial, socio-moral and regulatory aspects of your business performance obligation. Values are statements of commitment that an enterprise declares vis--vis its stakeholders. In other words it outlines the code of business conduct.
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Exhibit 1: Clarifying Business Directions Contemporary Food Outlet a) What business are we in? [Value we provide to our customers] Our customers visit us for a host of reasons, namely; business meetings and networking, leisure, friends and family reunion, celebrate special occasions, etc. We provide convenient and comfortable environment to do business, leisure and celebrate b) What is our life line? [Maximization of profit or something else] Good service, privacy, serene environment, cleanliness, and quality food at competitive prices are a few critical factors for doing business profitably. Quality at competitive prices c) What is our socio moral obligation? [Just and fair practices, etc.] We are part of the society and are equally responsible to adhere to the socio moral values in the letter and spirit. To demonstrate fair business practices and proactively encourage responsible behaviors, decency, modesty, etc.
d) What is our legal obligation? [Respect and comply with regulations, etc.] Abiding the laws and regulations is reflection of discipline and honesty. To make all possible efforts not to violate laws and regulations and let not others do so, even if it costs to the business. Vision To keep our diverse customers satisfied by meeting their unique requirements and exceeding their expectations within the ambiance of sociomoral values and legal environment in a commercially viable manner. Values Investors have put in their monies and have their legitimate right to earn competitive return. We must practice financial discipline and commercial diligence in every thing we do. Do Business Responsibly Customers provide basis for doing business and for its continuity, however, they are not responsible for our portability. Customers Value for Money Employees performance is what businesses sell. Equal opportunity, Just compensation, and Fair treatment are but their legitimate rights. Empowerment for All. Suppliers are partners in business. Just relationship and fair practices are but their legitimate rights. All One Team. Competitors are equally entitled to do their business. Fair Competitive Practices. Government and regulators provide good business environment and have the responsibility to protect interest of the society at large and of the businesses too. Do Business the Legitimate Way. Community and society at large are the owners of environment and resources therein. Businesses must operate and consume resources in an environment in the
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best interest of the community and society. Social justice, Respect and Tolerance, and Equal opportunities for all. 2. Strategic Analysis Strategic analysis aims to unravel and analyze the business trends opportunities and challenges in the permeable external environment with reference to the strengths and weaknesses of an enterprise. This analysis primarily provides basis for setting boundaries within which an enterprise can successfully operate and accomplish its value creation function. It also, however, provides clues as to what an enterprise needs to improve upon to augment its existing value creation function. It is typically a four tiered analysis: External trends analysis, Internal analysis, Financial analysis, and Summary analysis.
External Trends Analysis It primarily focuses on identifying opportunities and challenges in the present and emerging external scenarios. For instance, the type of competition the extent and basis of rivalries amongst the competitors, socio political scenarios and their likely impact on the performance of the enterprise; the direct and indirect impact of the regulations on an enterprise; dependence of and access to technology in efficiently managing an enterprise; and, last but not the least macro economic prospects. Internal Analysis Internal analysis as the title suggests focuses on taking cognizance of [recognizing] internal strengths and weaknesses of an enterprise in relation to the present and emerging external scenarios. Strengths are the characteristics of an enterprise that help it cease opportunities and face challenges in the external world. For instance, strong equity base; loyal customer base; extended market outreach; technology; patents; innovations; etc. Weaknesses per se are the opposite of strengths, however, one characteristic may be an opportunity in one scenario it may turn into a weakness in another scenario. For instance, humongous equity base can be strength during booming period but may become detrimental in recession as reduced profit margins will lead to greater reduction in return on equity. Similar is the case with huge installed capacity. This analysis on one side provides objective basis for making SMART2 business decisions and on the other side enables planning and initiating organization development to better position it in relation to the external scenario.
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Financial Analysis Financial analysis is done to reflect the probable effect of external trends in the back drop of internal strengths and weaknesses on the enterprise earning potentials. For instance, it considers the opportunities for economies of scale; stability of prices of and demand for the products; operating efficiencies; etc. Summary Analysis Summary analysis is a combined reflective statement of previous analyses. In here the analyst integrates the external, internal and financial analyses in an attempt to arrive at a conclusion, which can then be an objective basis for developing a consolidated strategic performance plan. Exhibit 2: Exemplified strategic analysis in diagrammatic form:
External Analysis Opportunities: Financial services sector in Pakistan particularly and in the neighboring countries will continue to grow in terms of its products, customer outreach, market size, etc. Threats: Continuing growth in the sector is likely to increase cost of attracting and retaining customers; bring down the average rates of financial services and increase effective cost of doing business; increase capital adequacy requirements; last but not the least, customers are like to become more demanding and price conscious.
Sector Analysis Summary Growth potentials in the financial sector are likely to attract new entrants; increase competition; entail higher efficacies; and, last but not the least, increase institutional exposures and the risks potentials thereof. Institutions competitive advantage would largely depend upon their speed of learning; innovation and change; access to technology; and, ability to attract, develop, engage and retain high caliber, morally responsible professionals.
Internal Analysis Strengths: Karachi Bank in particular and Pakistani financial institutions are well sunk in the markets; have fairly good experience and knowledge of various segments of the customers; matured processes and products; etc. Weaknesses: Experienced but inadequately trained human resources to cope up with the modern day challenges; less responsive business system and processes; standard products and processes, which fail to cater to modern day customer needs and expectations
Financial Analysis Potentially lowering margins and relatively higher fixed cost structures are likely to shrink profitability hence competitiveness, unless institutions increase their business volumes, reduce cost of doing business; and, improve employee productivity at group and individual levels
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3. Strategic Performance Plan Strategic performance planning is the third step in sequence. In here performance is planned in all-one-organization perspective. Put it simply, here the enterprise is considered as one unit comprising of all the functions, processes, and people. The primary advantage of strategic performance plan is that it integrates and aligns the entire functions in a singular direction. A typical strategic performance plan consists of following dimensions, namely; Strategic Goals Strategic Objectives Strategic Action Plan Key Result Areas, and Key Performance Indicators
Strategic Goals and Objectives Goals are the transient ends in reference to accomplishing the business vision. It is critical to understand that in the most of the situations more than one goal are required to accomplish the vision. For instance, to live the vision of A competitive enterprise it must consider improving brand image; enhancing product quality; rationalizing cost of doing business; etc. Goals should reflect the vision within the context of given strategic scenario and should conform to the SMART2 criteria. Objectives are means to reaching the goals. To reach a goal again achieving multiple objectives is critical. For instance, to effectively reach the goal of Improving brand image the enterprise must improve upon its publicity and advertisement; better market segmentation; presence in the market; after sales service; etc. Objectives should strictly correlate with the goals. Strategic Action Plan It is an elaborate list of actions identified as critical to the effective implementation of the strategic plan. Its scope should be as wide and holistic as possible. Ideally the actions so identified should have time line and be assigned to specific task groups or individuals. Key Result Areas, and Key Performance Indicators Key-result-areas represent critical performance dimensions while the Key performanceindicators are the performance standards of an enterprise in the context of its strategic agenda for change goals, objectives and action plan.
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Exhibit 3: Exemplified Strategic Performance Plan Strategic Goal: To develop a competitive brand, which principal organizations and the trainees can associate with quality learning and higher career-prospects, respectively; To forge effective linkage between business strategy, training and organizational change; To make learning accessible and rewarding for all; To create equal opportunity for learning and development. Strategic Objectives: To promote the institutes image in the financial services sector in Pakistan and neighboring countries especially and amongst the corporate community in the region. To continually develop and deliver state-of-the-art training curricula that cater to the needs and exceed expectations of the stakeholders To develop trainees professional finesse comparable to the contemporary corporate culture. To transform training culture into a learning culture by introducing interactive discussions, real life case analyses, interactions with the corporate executives, etc. To make trainees evaluations based on learning and ability to apply in the real world To create strong linkage between competence developed at the institute and competence applied in the world of work; To improve the validity and reliability of the nomination/entrance criteria to increase trainees performance in the class room and at work. To encourage and enable trainees from diverse back grounds to join in based on their demonstrated potentials to learn and serve. Action Plan Review and align training and development policy and curricula to better reflect business strategy, work place needs and trainees expectations Develop individuals training roasters based on their current job assignment s and future career paths Induct corporate managers as faculty and train them on experiential training techniques Develop experiential learning instruments, such as local case studies and critical incidents Develop learning focused training environment and culture Improve internal coordination and cooptation between various stakeholders faculty, trainees, line managers (nominating authorities) Key Result Areas: Strategic and tactical relevance of the training programs Efficacy Outreach Key Performance Indicators: Change for better in the organizational culture and performance in line with the envisaged business strategy Problems addressed in the real work situations Improvement in the overall performance culture Improvement in the general motivation towards learning and change Development of job specific competence in response to work place demand
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Enhancement of overall career prospects Improvement of overall social behaviors at work Percentage of employees in each cadre attended trainings Average training days per employee
___________________________ 1. Source unknown 2. SMART: Specific, Measurable, Articulate and Attainable, Relevant and Realistic, Time bound and Challenging (Tough)
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Empowering people at the work place is not synonymous to synergy but surely essential prerequisite to instilling synergy in the work place. Let us start by exploring the truth of empowering people. Ironically misnomers and partial understanding of the term abound: Many a times it is considered as giving authority to make decisions; sometimes empowering is even considered as independence at the individual level. If we analyze the first assumption we find that it can actually make the individuals performance chaotic and dysfunctional. How? The explanation is simple. You give a child authority to drive car: Though the child would have legitimate access to the car and might also know to drive but because he or she is still a child you cant expect safe driving. Same is true when organizations in a sincere attempt to empower their employees delegate authority to them to make decisions but they are not matured to do it. Empowering in letter and spirit is state of
High
employee performance when he or she fully understands the demands and repercussions of the task; posses the requisite skills to do it; and has optimal control on the process. Understanding of the context and the skills to do the task is Job-competence. Control on the process is Job-autonomy. we At this point may generalize that empowerment is a
Empowerment Par Excellence 9:9
Job Competence
5:5 Path to Empowerment 1:1
Low
Low
Job Autonomy
High
relative concept: Ones demonstrated empowerment in one situation does suggest that the person is empowered for all other situations and/or tasks. Rationale of Empowering People Case in point: Subsequent to death of our beloved prophet Muhammad PBUH, ALLAHS message is continuing to spread (MashaAllah). The main enabling force behind this success storey is the fact that our beloved prophet PBUH honestly duplicated the message to the disciples (believers) to the extent that each of them understood its rationale and the unparallel implication on the lives of men and women of all times to come and taught them the art of communicating the message in an honest and candid manner so as to make it clear and laud for those who decide to come to the path of ALLAH i.e. the path of success. Interestingly, these disciples went to distant places and continued spreading the message of ALLAH rather independently of each other. The only thing that kept them
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connected to each other was the essence of message every one was living and spreading nothing but Islam as just code of life. In short our beloved prophet truly empowered his disciples by rightly building their competence and giving them autonomy to make contextual interpretation of the Islamic principles and develop comprehensive Islamic jurisprudence and to make spot decisions (Ijtehaad) to deal with rather ambiguous situations within the ambiance of Islamic principles thus providing appropriate solutions to the emerging opportunities and problems to the mankind. The contemporary world of work characterizes by newer opportunities; ambiguous situations; and, unending challenges at every corner. Corporate synergy demands responding to all such opportunities, challenges, and situations innovatively yet from a unified orientation. Centralized decision making and control could be a solution but not practical in modern day complex and dispersed organizations. Firstly, narrower specialization has made it difficult to impossible for one person to be master of all. Secondly, dispersed scenario makes the persons at the core less sensitive of the situation prevailing at the sharp end. Thirdly, speed of response is critical while centralized decision making is bound to be less efficient. Finally, it fails to infuse ownership and commitment of all the stakeholders. As an alternate, empowering every one would allow each employee to carry out his or her unique task innovatively yet from a unified orientation as each of them would have shared sense of organizational directions; clarity of their respective roles (value they should create) in a task and the responsibility vis--vis others; requisite skills and adequate autonomy. Barriers to Empowering People 1. Hierarchical Culture All tasks are done by the boss. Every other person has no job but to assist the boss in doing his or her job. 2. Lack of shared organizational directions 3. Unclear roles and responsibilities 4. Tightly controlled job design 5. Personification 6. Self interest Foundations of Empowerment Task Competence (MASK) - Harnessed Motivation - Realistic Attitude - Relevant Skills - Knowledge (Rationality) Task Competence Analysis Task Autonomy - Input control - Throughput control - Output control have the
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Competence per se is the ability to execute a particular task in a particular situation. Thus the concept of competence is relative: an individual may have the competence to perform a task but may not have the competence to perform other tasks. For instance and contrary to the general misnomer, an individual may have good competence to perform as sales person but if asked to manage a group of sales persons he or she is likely to fail unless has administrative competence as well. Similarly an individuals competence to perform a task can change depending upon the context. Simply put, an individual who can execute a task in normal work conditions may not do so if the conditions change. For instance, a bank teller may be able to do his or her job quite diligently through out the month but fails to perform when the counter is full of customers during the first week. describes the contours of a task competence. Motivation as a term is much loosely used to refer to as a generalized basis of performance or performance deficiency. However, let us define it in a narrower perspective: motivation is a manifestation of individuals set of motives that shape his or her behavior in a particular situation. The motives can be needs (and desires), values, fear, fun or even following the trend. Urge to fulfill needs (and desires) is generally considered single most common source of motivation. Go beyond the visible, we see that at many instances, people demonstrate motivation because it is their value to respond in a particular way or they simply enjoy doing it. Furthermore, people also demonstrate motivation when they decide to follow the crowd or fear of being left behind if they do not behave in a particular manner. All this leads to two orientations of motivation, namely; rights based and responsibility based. Individuals are better empowered when their motivations are responsibility oriented. Attitude is the spontaneous response to a situation. Put it simply it is what we do and how we do it rather instinctively. A lot of attitude depends on the perception. As a general rule, it is argued that if one maintains positive perception his or her attitude will remain positive and vice versa. The argument is valid prima-fascia, however, at times it leads to wishful thinking in reality. The Gurus of positive attitude even go the extent that positive attitude can turn impossible into possible. Whether with positive attitude one can do the impossible or not, this sort of thinking is nothing but a departure from reality. Alternatively, we can describe positive attitude as an ability to take on opportunities and challenges realistically. In other words, positive attitude should empower individuals to take on opportunities and face challenges in an informed manner by acknowledging their responsibility for actions; separating the possible from impossible; keeping hope for better; MASK
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and, last but not the least is to accept and analyze the fate (outcome) realistically. In precise terms, realistic attitude is at the core of empowerment. Skills refer to the theoretical know how and hands on practice of performing a task. A child may feel confident to ride a bicycle by watching his elder brother riding it. Can he do it? The answer is not until he practices to do so. This follows that perhaps by observing other person one can develop know how but to perform one must also gain hands on practice. In a class room training environment, what trainees can acquire the most is know how unless they are given the opportunity to do hands on practice. Therefore it is important that skills training sessions must focus on building the process know how and practicing to perform. Knowledge refers to knowing the context in which task is to be performed. There was this incident in a factory: (Quote) The production was much time bound, which many a times forces the factory administration to schedule extra shifts and overtime. However, every time extra shift or over time was planned and the employees duties were scheduled accordingly they resented by absconding from work. Initially the administration considered this behavior more of a disciplinary problem later, however, they invited a psychologist from outside to probe into this. The findings were amazingly different. According to the psychologist employees abscond from work during planned extra shifts and overtime because they are not given the underlying reasons and were left to assume the same on their own. Consequently, they began to consider extra shifts and overtime nothing but a whimsical practice that is meant to make workers life difficult. As the administration started to reason with the workers every time they had to plan an extra shift or overtime their involvement and commitment improved dramatically (Unquote). This follows that skills training does suffice alone. Individuals must be given full back ground of the task. Such as, how this task is connected to the over business goals of the organization; what is the significance of doing this task efficiently and effectively with reference to overall productivity of the department and of the organization as a whole; what are the costs and risks involved if the task is not done properly; etc. In short, developing a strategic perspective of each individual employee is critical for his or her empowerment. Task Autonomy Analysis Autonomy refers to the extent of control an individual has on the task execution process. As a general rule, greater the control greater will be the empowerment. Job design is pivotal in affecting the control. Control in a job can be increased by integrating the tasks
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forward, backward and upwards. The former is technically refers to job or task enrichment while the latter refers to job or task enlargement. Backward enrichment involves merging the input processes while forward enrichment refers to merging the next processes into the given job, thus expanding the scope and contents of the job horizontally. A good example of backward job enrichment is to add on product designing task with the existing product development task. Forward job enrichment is to add on product testing task with the existing product development task. Allowing the person executing the job to also make decisions is an example of job enlargement. Two considerations are important while enlarging and enriching the job. Firstly coordination and secondly control of the overall departmental or organizational processes. Conclusion Empowering people is critical for attaining synergy across the department and organization. However, simply increasing the autonomy of the job alone will only create chaos. Likewise, developing the competence without giving autonomy at work creates nothing but frustration and withdrawal. A balanced approach to empowering is recommended whereby an individuals job competence and job autonomy are increased proportionately and gradually as the employee moves along the learning curve*.
______________________________________________________________________________________ * The author has actually experienced this approach while being mentored in his early career stage by his immediate senior Mr. Abdul Ghafoor at United Bank Limited. In acknowledgement of gratitude for the mentor the author is pleased to dedicate this paper to Mr. Abdul Ghafoor (May ALLAHs grant blessings for him).
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Undoubtedly, we have high competency individuals every where. Yet synergy hence productivity remains much unleashed in most of the situations. Besides other factors, the problem lies in the fact that teams abound in every sphere of professional arena, but fail to function like a team. Put it differently, high competency individuals are there but the underlying process of teamwork is not there. A personified culture where individualism is emphasized at the cost of process dominates in most of the situations, be it a political institution, public administration, business organization or even sports. Through this paper, I envisage to discuss concept of synergy; teamwork dynamics; and, unravel the core issues that underlie the synergy dilemma thus prompting professionals and academicians to revisit the processes and overcome the dilemma together for unleashing synergy hence productivity potentials in our work settings to the optimum. 1. Performance Vs. Synergy Performance generally refers to routinely repetitive behaviors that are ironically taken as achievements in themselves. For instance, a college lecturer repetitively teaches old theoretical concepts without validation and improvement to every new class of students, year after year. In his or her mind, perhaps s/he is achieving a lot by doing so. However, in fact neither new knowledge nor cognitive abilities of the students are developed in this scenario. Likewise, numerous examples in the organizational context exist. Such as, employees repeating routine tasks rather ritually, year after year, with no improvement either in the organizational output or in their personal abilities and believe that they are achieving a lot. Yet another example is employees progressing upwards on the hierarchy without change or improvement in their output. Meaning while they become senior and expensive, they continue to do what they had been doing in the past. The consequence is definitely alarmingly significant obsolescence of organizations and people output, as we can clearly witness this phenomenon in our organizations that are though profitable but are not able to deliver higher value and sustain competition over time. Synergy, however defined, is some how taken as magical in its manifestation. Wrong! Synergy is a real process that leads to faster change and improvement in productivity (Figure 1). In other words, synergy refers to the creation of a new thing, which could be an innovative idea; clearer conceptual understanding; improved product or service value; last
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but not the least, stronger and sustained organizational growth and competitiveness that stimulates rapid growth. It is interesting to understand that synergy is essentially an out put of interaction between diverse resources and not the resources themselves. For instance, fertile seed is not able to grow a plant on its own and so are other resources such as soil, air and water. However, when these resources are combined and interact a new plant is born. Likewise, skilled and resourceful people do not create value as long as they are separated from each other. They need to interact with each other tocreate value. Thus we generalize that interaction
Normal Performance Productivity Line Productivity Horizon Synergized Productivity Line Rate of Change Figure 1 Performance vs. Synergy
Rate of Change
is the critical factor in causing synergy.

Time Horizon
In modern days, it is even more significant for organizations and its people to achieve synergy not just performance. In this article, I have attempted to highlight some ideas on transforming performance into synergy thus contribute for the advancement of our understanding as to how can we develop even more synergistic organizations and people. 2. Understanding Interactions Understanding interactions is critical in fostering synergy. Precisely, interactions refer to a process whereby every one behaves interdependently or responds to each others actions and together create a bigger output. Concept of internal customer-supplier relationships is a good practical example of synergy. Interestingly, sometimes individuals maintain focus on their (personal goals) as the primary purpose of working together; sometimes as secondary to the common organizational goal; and, finally they completely succumb to organizational goals at the cost of their personal goals. Thus we can visualize many variants of working together alongside the two extremes i.e. Teams and Hierarchy and a typical hybrid of the two i.e. Workgroups. However, not each is designed to suit the organizational setup and yields optimal synergy (Figure 2). Although sometimes rightly, teams and workgroups are used interchangeably but here we are referring to these titles as rather different for the purpose of explaining the underlying interactions and synergy potentials of the two variants. .
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Figure 2. Teams
High Synergy
Workgroups Hierarchy
Optimized Synergy
Hierarchy
Low Synergy
At this stage we can clearly see that synergy is essentially the reward for interactions. To aid the interactions following conditions are considered essential, namely; diluting of the authority at individual level, fostering specialization and professional orientation, improving focus, developing clarity of roles and their interdependencies, and defusing of position based status across the board. Some likely benefits of the above are presented below: Diluted Authority In a group work generally authority is narrowed at the individuals level and the group becomes empowered. Lowered risk of authority abuse, reduced bias, greater transparency. Specialization Individuals tend to develop greater control on their respective areas of work. Improved Focus Helps in developing more objective approach and achieve speed and quality of work Clarity of Roles Every individual can clearly see what he or she is expected to do in a group. Accountability, ownership, work discipline and reduced potential conflicts are likely. Diffused Status Status-incongruence is minimized through lesser emphasis on varying status of individuals. Better and cooperative (congenial) work environment is likely to emerge. High Synergy Teams Together every one accomplishes more! According to Social Action Theorists, Organizations are group of individuals, each cooperating with the other for the ir selfgratification (needs). The potentials for self-gratification determine whether individuals will stay together or not. The binding force of a team, as one can see, is mutually advantageous interdependence of individuals. The common goals would, however, be to stay together for continued self-gratification. Still the focus on personal goals remains of primary significance, while common goal is also indirectly a personal goal.
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Case in Point In Malaysia there were a few poor Dairy Farmers, each had a daily capacity of about 15 to 20 Kg. of Milk. These farmers used to earn their lively hoods only by supplying their available milk door to door at a nominal margin. One day they realized that if they could collate their individual productions, they would have adequate capacity to operate a medium sized milk-processing plant without depending on out side suppliers. They went to the Government of Malaysia and sought loan for setting up the milk processing plant, and were able to convince the officials. The next challenge they had was how to pay to the laborers who would work on the plant. Therefore, they together decided to work themselves. Doing so, they were able to save their expenses. At the end of the day saleproceeds were shared amongst themselves, partly towards the cost of their inputs (milk and labor) and partly as their share of profit. Subsequently, every ones earnings multiplied many times.
The synergistic effect in the Case is primarily because of increased price of the milk, which became possible only because of combining their resources and cooperating. Today many mergers of businesses are based on this premise. Likewise, many partnerships too are built and flourish on the same rationale. The critical factor, however, in this is equitable sharing of the benefits. Meaning that no one should leverage others for out of proportion benefit, as ironically we see this happening in quite a few instances day in day out. For example, industries especially in the third world are competitive because of the fact that they are free to exploit workers by extracting maximum output without paying them fair wages; save on costs by not treating their waste that eventually disturb the ecological environment and cause health hazards expto the community at large. We can cite another example of exploitive culture, where most of the input comes from the front, however, ironically the benefits are shared in reverse proportion workers create value their managers reap the rewards in paradoxically unjust proportion. Although this loitation is much aptly rationalized [justified], it is these reasons that we fail to gain synergy. Put it differently, though we seem inclined to establish team culture we fail to do so in the letter and spirit. Work-groups Work-groups are typical clusters of individuals of diverse backgrounds and unique competencies created for accomplishing specific organization tasks. Unlike teams where individuals seek to satisfy their personal goals interdependently, in a work group individuals work together for accomplishing organizational as their primary goal in
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consideration of rather agreed compensation and/or rewards. Work groups are generally formed to develop a new product or service, innovate a new process, make a business decision with consensus or solve a problem, etc. Work-groups are better suited to work organizations situation in optimizing the synergy at work. Walt Disney in his own writings says, People think I have made wonders. They are wrong. What I did was that I got then together myself with and people each of diverse in their
Figure 3
intelligence, capability and capacity, better other respective fields of specialization. As the group started to interact with each other in a given setup, wonders became reality synergy truly optimized.. Figure 3 presents a visual position of work groups vs. team and hierarchical settings. Administrative Hierarchies Typical administrative hierarchies when compared to Work-groups are similar in some ways and different in some other ways. Both hierarchies and work groups focus on common goals (organizational interest), operate in a supervised environment (managersubordinate relationship), and expect rewards in return of their performance (inputs). Hierarchies, however, are differentiated from work groups in many ways. Firstly, the latter essentially envisages diversified work force while the former emphasizes on concentration of single competence specialization per se. For instance, a business college will have faculty of diverse specializations while an accounting department usually consists of accountants only. Secondly, in a work group while individuals focus on their unique roles of rather equal significance and maintain reciprocal interdependence on each other for the accomplishment of common goals. In a hierarchy individuals have superior / subordinate relationship and their performance [input] is somewhat similar in nature but different in significance depending on their respective position in the hierarchy. Thirdly, in a workgroup overall accomplishments largely depend upon the role clarity; interactions; and, coordination while in the hierarchy overall accomplishments largely depend on clear authority lines and discipline.
Work Grou p Team Hierarch y
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3. The Process I assume that the underlying process in a team as well as group work setting remains the same. Therefore there is no need to discuss the team and work group processes separately. The process refers to evolutionary stages through which a team or work group moves in the due course of time and begins to synergize [deliver]. The stages are usually identified as Forming; Storming; Norming; and, Performing (See figure 4). Figure 4: Synergy Process
Forming
Moral Motivation Attitude Diversity
Storming
- Positions - Interests - Conflicts
Norming
- Shared vision and values - Clarity of roles and responsibilities - Realization of interdependence -
Performi ng
Discipline Cooperation Involvement Participation
The process looks much simpler. But it is not so. To master the process one needs to understand the barriers that can make the process extremely vulnerable. The barriers can be identified as Personality Barriers amongst team members that keep them from becoming truly team players hence impede teamwork. Then there are Systemic Barriers, in the immediate work environment, which too adversely affect teamwork. Personality barriers are manifested in many colors. For understanding let us consider the followings. Ego syndrome, seniority or superiority syndrome, competition syndrome, specialist or comfort syndrome, lone-worker syndrome, and dysfunctional-leadership syndrome, etc. Systemic barriers include factors, such as; centralized authority and/or decision-making, individualized reinforcement plan, induced status incongruence manifested in authoritative boss/subordinate relationship and top down only communication, status quo culture, emphasis on individuals tasks rather than interdependent roles, etc. Way Forward Modifying the dysfunctional habits and inculcating functional habits are critical in overcoming the personality barriers at individual level thus increasing their state of
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readiness to work as team players. Furthermore, systematic barriers also need to be overcome by altering the immediate work environment. For instance, one needs to; diffuse position based status and emphasize on interdependent roles across the board, innovate group based yet equitable reinforcement plan to induce cooperation and not competition internally, etc.
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We are naturally interdependent and so are our society and work organizations. Fortunately, we are recognizing this interdependence rather advantageously. We already know that interdependence of people and organizations brings forth diversity, innovation and synergy in the society and work place. Managing interdependence successfully entails harmonization, synchronization, integration and coordination of directions and actions of all the stakeholders. For instance, in a team poised to bring success for all it is imperative to reconcile divergent goals of individuals for greater harmony; make each one sensitive of others interest and position and encourage accommodation amongst to achieve optimal synchronization; unify directions, priorities and work plans for better integration; last but not the least, coordinate decisions and actions across the board to achieve maximum synergy of inputs. More so, a successfully managed power-culture in the work organizations should bring forth discipline in practice. Here, discipline does not mean blind obedience and a set of pretentious or ritualistic behaviors. Realistically speaking, it is more of an environment, which encourages rationality in behaviors and empowerment across the board. Moreover, fostering, sustaining and balancing meaningful power across the work organization is the key to managing interdependence advantageously. Thus, we may begin analyzing power with an understanding that it is more of an instrument of encouraging discipline and making interdependence rather productive characteristic in a work place, as against generally held view of power as authority and control. In nutshell, our organizations are faced with two basic managerial challenges: Managing diversity and establishing discipline for sustained higher productivity.
Meaning of Power
Power is often differently defined from the concept of control. While the focus of power and control is similar, the execution is different: To influence others decisions and actions in a predetermined direction, however, the former facilitates while latter asserts in doing so. In simple terms, power refers to ones position or ability to influ ence or facilitate others towards a desired behavior or attainment of the target outcome. Power by all standards is a responsibility as against authority, which is generally taken as a right. Hence, it should
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be exercised with the same orientation. Figure 1.1 elaborates potential impact of power versus control culture on organizational performance and employees.
Figure 1.1 Power vs. Control Continuum Potential Impact

Mutual Trust Win-win relation-ships Realistic and Sustainable behaviors / performance Satisfaction
Potential Impact
Extreme Control Extreme Power
Coercion Win-lose relationships Ritualistic and Forced behaviors / performance Dissatisfaction
A typical power structure consists of the resource-person, the constituent(s) and the relationship between the two groups. Resource-person is the individual who enjoys power [ability to prevail and influence] over the other person(s) [constituents]. The constituents are the people who willingly accept influence [power] of the resource-person on their decisions and actions. Relationship is defined as natural or situational dependence of the constituents over the resource-person. Power base of the resource person consists of the resource persons traits or strengths; relationship of the resource person and the constituent; perceived situation; and, the constituents readiness to accept influence in a particular relationship. Resource persons traits refer to an individuals or groups ability to affect others chances of achievement, her knowledge of the Perceived Situation [An exclusive scenario] Relationship [Perceived Dependence] Resource Traits
Power
Constituent
mostly in a positive way. For example: A lawyer with his or
prevailing laws and regulations could avail to legal benefits to his or her clients. Thus, a lawyer by his or her trait has power over the constituent. Relationship refers to the type of perceived dependency of the constituent[s] arising out of interaction with the resourceperson. For example: The constituents understanding that his or her success depend a lot more on the lawyer than on himself or herself allows the lawyer to successfully exert influence on the constituent. Situation refers to a particular scenario, which offers a unique set of opportunities for the constituent to become successful. In other words, the constituent will assess the situation arising out of a particular relationship with the resource-person in terms of opportunities it might offer and the corresponding cost for him or her. Furthermore, the situation also defines boundaries of the power. Hence, we can say
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power will exist in a relationship only to the extent of a particular scenario and will not in other situations. For example: A lawyer will avail of power in a relationship where his constituent perceives the situation important with little or no other alternates to correct it. However, the lawyer will not avail of similar power over the constituent in other spheres of his or her life and career. Constituents readiness refers to the individuals value perception of the resource-person, the relationship and the situation itself. For example: if the constituent attaches high value to the professional skills of a particular lawyer, perceives the relationship advantageous, and has a serious concern for the situation then he or she will be much willing to subordinate him- herself to the lawyer. It is clear from the above that power is an outcome of a mutual agreement and readiness of the resource-person and the constituent. Put is simply in a power relationship the constituent welcomes the resource-person to exercise power over him or her. On the contrary, control is unilateral and is often taken as a threat [compulsion] by the constituent, hence resisted to the possible extent. Although, one may conclude that the objective of both power and control is to mend others behavior towards a desired goal [state of affairs] the foundation of power is more on mutual trust between the two, while the control is erected on ones proclaimed supremacy or right to demand obedience from the constituents. Thus, it is a unilateral phenomenon and does not necessarily require mutual trust, and often fails to be effective. Sources of Power Source refers to the resource characteristics of the resource-person, which enables him or her to gain and exercise power in a relationship. Sources can be of different origins, such as: Legitimate power; Expert power; Referent power; Spiritual power; Leveraged power; Coercive or reward power; and, Legacy Power; Etc. Let us now explore each power-source. Legitimate Power Legitimate power represents a relationship wherein the resource-person enjoys a relatively superior position [or role] viz-a-viz the constituents and that they have accepted its legitimacy. It is interesting to note that superior position of the resource person, which the constituents do not consider legitimate, is interpreted as authority [control] rather than power. The underlying reasons of considering the position legitimate are as follows: a) Constituents perceived legality of the system, laws and practices that put the resource-person in a superior position [role] and allows him or her to exercise power. For example: Boss / Subordinate relationship in a typical administrative setting.
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b) Constituents valence for particular cultural values and norms encourage them to recognize individuals by their positions [roles] and seniority. Thereby they consider it legitimate for the senior-person [resource-person] to exercise power onto them. c) Resource-persons charisma often associated with their personality characteristics induces constituents favorable response to the exercise of power by the former. A good example is of the followership that most of the political leaders, especially in the developing countries, possess. Expert Power Individuals who are perceived to have and/or demonstrate superior skills or knowledge tend to occupy superior position or role in a relationship and the constituents look at them for support and willfully take instructions. Thus by virtue of this, they are able to obtain willful compliance of their constituents. The relationship of a doctor and patient is a good example of expert power that doctors generally enjoy. A senior [experienced] technician also avails of similar power over his or her junior associates [interns]. Likewise, a truly well informed instructor [teacher] enjoys similar relationship with the pupils. Referent Power Referent power arises from the identification of an individual with another person. It is based on the resource of other person and an urge to be like him or her. For example, if [A] praises [B] to the extent of modeling his or her personality then [B] has referent power over [A]. Interestingly, it is possible that all is done without the knowledge of [B]. Thus, [B] can potentially influence [A] without being aware of it. Hence, it is critically important that the resource-person must remain vigilant of his or her behaviors and attitudes all the time, for others keep noticing and duplicating them automatically. Celebrities, successful CEOs / Entrepreneurs, and of all the people parents truly represent referent personalities. Charismatic instructors [teachers] also fall in this category, for a few instructors leave a lasting impression on the personality of their pupils, if not all. Coercive or Reward Power Behaviors are generally instrumental, especially at the work place. In other words, people tend to respond to a set of preferred incentives and punishments in the world of work. Obviously so, the immediate manager can solicit his associates willful compliance by tactfully using his or her access to coercive or rewarding ability. Generally, it is said that not all managers possess rewarding ability. However, they can invariably cause damage to
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ones career prospects. Meaning to say, they may not always be in a position to reward but are always capable of punishing their associates. This perception generally causes a fearful work environment, which could be grossly disadvantageous for the people and organizations alike. Moreover, often mis-match is done by the managers while choosing either a reward or punishment to influence the constituents, causing more damage than benefit. It is so because, while rewards are effective initiators for positive behavior, punishments successfully deter or discourage repetition of dysfunctional behaviors. However, sometimes managers apply incentives in place of punishments and vice versa. Spiritual Power Constituents generally perceive their strong emotional dependence on religious gurus, which encourages them to seek their support and take instructions. This is by no means referred to any specific religion such as The Islam, but it is true for all the religions. In the developed secular economies interpret the emotional dependence differently, however, the spirit remains intact. The Prophets [PBUT]; Pope the spiritual symbol of the Catholic Church; Dali Lama the spiritual guru of Buddhist philosophies; Etc. are a few living examples of spiritual power. Leveraged Power Often when the individuals lack resources to gain power, successfully leverage their resource deficiency through another resource-person either within the organization or from outside. Thereby he or she effectively gains the requisite power. Management negotiating an agreement with Collective Bargaining Agents is an example of gaining effective power on employees in the rank and file cadre. Likewise, managers take their bosses into confidence before making any specific use of their power onto their subordinates is yet another example. Leveraged power could also lead to dysfunctional scenario. For instance, it is possible that an associate, close to the senior manager, could leverage his or her relationship in influencing his or her immediate managers decisions to his or her advantage. Legacy Power In quite a few instances, it is true that a person proclaims power from the legacy of another person merely because of his or her special relationship or terms with that other person. The person availing of legacy is not always part of the original organization, but he or she can be an outsider to it as well. However, it is critical for the person to exercise power effectively that the constituents must recognize it as his or her inherited right. Interestingly, it is true that whenever such a situation arises there is always a chance that
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more than one person proclaim the power. Consequently, the organization faces destabilization and chaos, which increases the chances of splitting the organization into smaller independent organizations. Political Power Of all the sources of power, political followership is most sought out source of power base. Here the individual (resource-person) commands superior power over his or her constituents solely on the basis of the followership. The followership is generally manifested in the perceived dependence of the constituents over the individual. The dependence could be psychological, physiological or both in nature. How it is casted is a long term complex relationship between the individual and constituents. One can primarily see explain this as process of emotional trust building, establishing credibility, and standing for the followers in times of need. Perhaps this type of power tends to over shadow other power bases, generally. Implications of Power in Organizational Setting Implications of power in organizational perspective can be grouped into two categories. Firstly, power as an instrument of organizational discipline and secondly power as a basis of political process. Power as an Instrument of Discipline It is impossible to undermine the significance of discipline in a work setting. However, discipline as a connotation can vary in different work cultures. Here the term discipline is strictly referred to by a work environment where individuals are empowered to perform on their jobs in a coordinated manner and productively. In addition, individuals are discouraged to become dysfunctional. Exercising power (not control) by the immediate supervisors is evidently critical in establishing discipline in the immediate work environment. Absence or abuse of power by the supervisors could potentially turn the immediate work environment chaotic, which in turn would cause lower productivity and dysfunctional behaviors. Thus, it is imperative that supervisors (managers) strive to build appropriate power base to full fill their roles more efficiently and effectively. Power as a Reconciliation Process Organizations consist of smaller clusters of people. Each cluster represents a unique position and interest profile and possesses some degree of power over the other. At this point it is interesting to observe that in a real life organizational setting various power-
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clusters sometimes maintain rather competing positions with each other. If organizations fail to recognize the unique positions and interests of various power-clusters then they may use their relative power in competing within, which would certainly cause rivalries among the clusters at the cost of organizational goals. On the contrary, due recognition of power-clusters and allowing organizational policies and decisions more in line with their positions and interests would prove synergetic for the organizations towards accomplishing their goals. A positive effect of various power-clusters on organizational goals is of attaining equilibrium in organizational performance, which in turn increases the chances for organizations
Power Cluster
Figure [a]
Altered Organizational Goals
Power Cluster
sustainability in the long-run. This process generally referred to as political process, which is presented in the adjacent diagram. As evident in the figure [a] the two powerclusters with almost equal power are exerting pressure on organizational goals thereby altering it to their advantage. The presented process is, however, deliberately simplistic. On the contrary, in the real world of business it is
Interest Cluster
Figure [b]
Altered Organizational Goals
Interest Cluster
rather abstract. Meaning to say, different power-clusters exercise varying degree of power to influence the organizational goals. It is the most dominant power-cluster which prevails over others in getting the organizational goals [policies] altered in their advantage, refer to figure [b]. Here the organizations role is either to ensure that interests of all power clusters are satisfied or at least no ones interest is violated for the benefit of others. Ideally, organizations should create a win-win situation for all power-clusters to successfully accomplish and sustain its own goals. A basic recommendation in this regard is that organizations should incorporate individual clusters positions and interest s into their mainstream policies and decisions; and, pursue policy criteria that essentially encourage decision making that follows advantages for all or at least no disadvantage to any power-cluster. Conclusion Understanding and managing interest-clusters in an organizational setting is critical for building sustainable organizations; developing long-term relationships with various
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stakeholders; improving productivity and profits; last but not the least, creating enabling environment and satisfying careers for all.
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Organizations that learn and innovate faster can change faster. Modern times are typically characterized by free market; easy access; breakthrough buyers [globalization]; technologies; etc. This unprecedented markets that follows power; expanding
Alph a Rate of Chang e Bet a
organizations must respond to the modernday hyper-dynamic environment with speed.
Time
Figure 1.1 provides a comparison of Alpha and Beta organizations. While both are growing, the rate of change of Alpha is much higher compared to Beta. Consequently, Alpha turns out to be more competitive in the long run (Bryan Joiner, 4th Generation Management). As a good example, Private enterprises that are generally more responsive to their environment as compared to their counterparts in the public sector are likely to out perform in the long run. Thus, we may generalize that it is the rate-of-change [improving faster] than seniority of an enterprise that determines its competitiveness. however, are always there. Ideally, the organizational response should be in perfect harmony with its environment. Ironically, however, internal obsolescence and changes in the external environment continually cause imperfect organizational responses, which must be corrected rather continually to maintain perfect response relationship. Figure 2.1 exemplifies a typical intervention model to over come imperfect organizational responses. The model is self explanatory and need no elaboration:
Figure 2.1
Exceptions,
Elements of Change
Intervening Innovations Leadership and Culture Organization System and Design Business Processes People-resources Marketing Strategies and Tactics Corporate Relations Resulting Innovations All One Team Total Quality Environment Empowered Employees Responsive, Flexible, and Efficient Organization Superior Products and Services Competitive Image
Imperfect Organizational Response to Environment
Perfect Organization Response to the Environment
Elements of Innovation and Change

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Resulting Innovations
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All One Team Total Quality Environment
Changing for Better Changing for better necessitates learning and innovation at two levels, namely; organizational and people or individual. Both are interdependent on each other for creating a positive organizational change. We shall look into the dynamics of learning and innovation for change at organizational and people level separately to aid the readers understanding. Organizational learning and innovation is a holistic and systematic approach towards institualizating improvements. This precisely refers to affecting change at every level of an organizational process. To elaborate this concept, let us say change must affect organizational strategic and operational performance. Improving the products and services would be the front-end basis for the former. To bring improvement in the products and services, changes must be incorporated at the systems, business process and competence levels. Business goals, rationales and policies also need to be revisited to improve the systems, innovations need to be instilled in the technology to improve business processes, and last but not the least retooling of skills, knowledge and attitudes of the people will be critical to continually upgrade organizational competence. Interestingly this type of change is proportionately correlated with learning and innovation. Thus, learning and innovation are the two fundamental constituents in a successful change intervention, while speed being the most critical success element. See figure 3.1
Figure 3.1
Oganizational Philosophy
Organizational Culture, Systems, Processes and Structure
Organizational Products and Services
Sustained Organizational Continuity in the Changing Business Environment
Day One
Day Two
Day Three
Creativity (Innovation) Interventions
Learning [Feed back] Mechanism
Learning and Innovation
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Learning is a pre-requisite for innovation and change [improvement], while speed of learning determines the speed of innovation and change. A typical learning, innovation and change process is presented in figure 3.2. The continuous line indicates forward linkage between learning, innovation and change. Dotted line indicates the reverse relationship of learning to innovation and change. Thus one can say that the three variables are interdependent or in a loop relationship learning follows innovation and change, and change follows new learning.
Fig. 3.2
Learn
Audit Analyze Select
Innovate
R&D Experiment Empower
Change
Plan Inaugurate Reinforce
Learning consists of three tiers, namely; audit, analysis and selection. All is done in both short run and long perspectives. Audit refers to comparing the actual with targeted results. In other words it is about determining the actual or potential impact of external and internal changes on various dimensions of an organization. For instance, profitability; productivity; customer and employee satisfaction; market competitiveness; strategic advantages (or disadvantages) etc. Analysis is the second stage of learning. It focuses on identifying rootcauses of the problem or potential problem. Selecting is the final stage of learning. It involves building focus on the impending issues and setting priorities. Shorter the learning cycle, higher is the rate change. For instance, in a typical enterprise scenario financial statements provide handy information to learn. If these statements were prepared on monthly basis this would mean 12 learning cycles in a year. On the contrary, if financial statements were only prepared on yearly or half yearly basis the opportunities to learn in a year would remain much restricted, less reliable and distorted. Innovation is at the intervening level. It essentially follows learning if change is for the better and not for the heck of changing. Pragmatic findings at the learning stage become the input for innovation per se it is said, need is the mother of all innovations. Generally it is argued that innovation [creativity] is abstract hence need no process. On the contrary innovation is a critical investment hence it is managed for optimal efficacy. The recommended process for innovating can be sequenced as the R&D or development; experimentation; and, empowerment. Development is the first tier and entails preparation of protype solution, preferably in the controlled [laboratory] environment. It is critical that the controlled
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environment should be created within the real life scenario, while the term laboratory is used as a metaphor only, to maintain reliability and validity of the process. The solution is then put to testing for assessing its capability of resolving the problem. This again is done in the controlled environment. Once the solution is tested and the critical gaps are closed, it becomes ready for implementation. Implementation entails empowering the system and people in accordance with the new solution. Empowering systems is about making necessary adjustments in the policy, processes and immediate environment, while empowering people broadly refers to retooling and/or reorienting the people.
Case in Point: Subsequent to the learning that documents exchange/submission is a major factor in causing delays in international trade settlements (payments), electronic documents are considered as viable alternates to the conventional documents, for these can be exchanged/submitted instantly via world-wide-web portals. However, to implement this solution successfully and efficiently it is considered imperative that the organizations must, in the first place, amend their policy/regulations governing the paper documents to afford similar acceptance or legal status to electronic documents, too. More so, it must upgrade (automate) its processes to be able to create and transmit electronic documents successfully, and last but not the least it should make available a suitable technology and foster compatible business culture. Besides making the above changes, it is important that people are retrained, enabled and encouraged to transit onto the new solution rather conveniently and willingly. Change or changing is the ultimate stage of the cycle per se. It is this stage when the solution is put into action envisaging real-time redressing of the pending issues, improvement in organizational performance or both. This stage is further split into three tiers, namely; planning, inaugurating, and reinforcing. Planning refers to doing things (putting solutions into actions) on paper first. Planning primarily involves defining the Key-result-areas [KRA] and the Key-performance-indicators [KPI] along with action plan to implement the solution, and identifying the people and material resources to be required in the due course of time to successfully and efficiently implement the solution. Inaugural tier refers to the set of activities or events aimed at creating hype or to be precise positive attitude towards the change or at least reducing the existing and potential concerns to the maximum of the stakeholders. Doing so will increase the chances of successfully implementing the change and reducing potential restraints. Many a times the enthusiasm to change with which it is normally initiated fads out as the initiative progresses. As a result the chances of success also tend to go down. Therefore, it is imperative to constantly reinforce the change initiative by way of providing positive feed back and acknowledging achievements. However, it does not undermine the need
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for corrective feed back, which is essential to ensure that learning and innovation continues in the future. People Learning Dynamics Learning at the people level is equally significant as that of organizational level, for the continued organizational improvement. It is more than true that every individual is unique in his or her personality make-up and so in is his or her learning styles. However, the learning process remains similar for average individuals, yet the exceptions are always there. Understanding of the process that an average individual follows to learn suffices to manage learning of the individuals, particularly in an organizational setup. Learning process of individuals generally consists of following stages, namely; Selection, Experimentation [trial], Adoption, and Reinforcement [Based on the work of Prof. Udai Parek, Learning for Development] Selection refers to preliminary learning behavior of the individual whereby s/he selects specific information for learning. The individual primarily does so on the basis of information relevance to his or her area of interest or work, meaning if it has practical usage or not; expectations of someone he or she values such as supervisor or the management in a work scenario, and as a result of which s/he expects some personal advantage; and, last but not the least, that it is also convenient to learn sometimes because it is nothing but an extension of what s/he already knows [believe] thus no psychological incongruence is caused; it is challenging yet easy to learn; or. it is excitingly interesting to learn fun. Subsequently, the individual experiments the new learning to gain confidence and ascertain its actual practical advantages. In case the outcomes conform to the expected goals then the learning gets internalized. Consequently the individual adopts the new learning and gets ready to practice it in the real life situation [do it on-the-job]. Repeated successful outcomes of applying new learning would successfully reinforce the learning into sort of established habit. Role of the immediate supervisor and management in general is of immense value in making the learning process successful. Firstly, it is the supervisor or management who create the value for learning by identifying its significance in the context of the individuals immediate work environment or career. Secondly, again the encouragement to experiment and the opportunity to apply new learning depends a lot onto the supervisor or management. Thirdly, ensuring that the learning environment remains conducive and friendly is expected from the
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supervisor or management. Finally, positive reinforcement in terms of laud acknowledgement and subsequently rewards come from the supervisors and management. Conclusion Learning for innovation and change has always been the most critical factor for organizational success both from the short term and long term perspectives. Indeed its importance has increased many a times in todays world of work, which is typically characterized by changing global business environment; more demanding customers; tougher competition; deregulations; and of all the things higher degree of contingencies, for this has put the business organizations in dilemma to deliver superior quality services [products] at most affordable [low] prices, all the time. The solution to this dilemma lies in the ability of organizations to learn, to change and to improve faster, all the time.
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Introduction Conduct or behavior refers to decisions as well actions that individuals or groups make, either in the informal setting or formal setting. Obviously, any decision and/or action aim at a certain goal; be it financial, social, or simply psychological. It is important to understand that at many instances a lot of dysfunctional outcomes occur as a cost to get the desired goals. Most of the times, these cost are borne by third persons, hence not recognized at a conscious level. But ironically in quite a few situations the cost of dysfunctional outcomes is also inevitably paid by the person or group itself in addition to third persons, however, it gets overshadowed as the immediate gains appear humungous and vital. As the society [institutions] to be sustainable needs to be more just and equitable for everyone without discrimination, it becomes imperative to harness the conduct of individuals and groups so that the dysfunctional outcomes of their respective conduct are eliminated altogether or at least contained to the minimum. Ethics or moral principles provide basis for the required harnessing of the conduct. Firstly, a conduct needs to be analyzed on two Figure 1.1 orientations, namely; moral and legal for declaring its acceptability or otherwise. The moral orientation represents acceptability or otherwise perspective, of a while conduct the from ethical legal orientation Not Ethical Ethical Legal Universally Accepted Behaviors: Just and Equitable. Immoral Behaviors: Annoying Not legal Illicit Behaviors: Grey
distinguishes conduct as either permissible in the law or not. Accordingly, four quadrants of typical conduct are identified Accepted behaviors; Illicit behaviors; behaviors; and Immoral
Condemned Behaviors: Unjust and Inequitable.
Condemned Behaviors [see figure 1.1]. Accepted behaviors are clearly identified as just and equitable by all standards, thus encouraged and supported universally. Illicit behaviors represent conduct, which may be ethical in it self but is not legalized. Such as, violating of a particular regulation in vogue, which may not be ethical in it self. For instance; to punish a convict without appropriate legal proceedings, because one does consider existing legal regime as just and fair. Similarly, otherwise ethical business
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transactions but executed outside the purview of the law are illicit, such as smuggling. In short, self proclaimed authority to make decisions and execute is an example of illicit conduct. Immoral conduct is opposite of the illicit conduct in nature, however, is also not acceptable. It represents behaviors that may be considered legalized but are not acceptable morally. Such as, legalization of bribery by certain countries or groups of individuals. Similarly, amendments in Usury Laws in the Europe to legalize interest transactions in the 14th. Century is yet another example. Condemned behaviors are neither morally acceptable nor legalized. For instance, abortion in a majority of the countries; also biased discrimination in access to social, political and economic opportunities, such as, education, employment and access to loans and grants, etc. Ethical [Just and equitable] conduct can be visualized into three generic behaviors, namely just-behaviors; compensatory-behaviors; and, deterring-behaviors. Just behaviors are such a conduct, which is just and equitable for all the stakeholders, offering win-win outcome. For example, a marriage whereby a women promises to associate herself with a man with full commitment and loyalty and the man commits his loyalty to the woman and promises to be responsible for her wellbeing and even both jointly take the responsibility for their offspring is a classical example. Likewise, a seller offers safe products at just prices and the consumer buys at just prices. Compensatory and deterring behaviors can be argued unethical when considered in isolation. But, when evaluated with reference to a particular context these behaviors are ethical. Compensatory behaviors, as the title suggests, are actions and decisions that aim towards undoing or recompensing loss suffered by a person, group of persons, institution, or the society. For instance, positive discrimination in job opportunities for the minorities aims at compensating for their lack of access to such opportunities in the past. Similarly, companies paying damages to their customers for the losses they might have suffered due to non performance or unsafe performance of their products. Furthermore, punitive system of dealing with criminals such as putting a person in jail, cutting his or her hands for robbing someone, and even killing him for he or she has killed someone are a few examples. Deterring behaviors are actions that aim at controlling and preventing dysfunctional or criminal practices from the society in general and amongst individuals in particular. Ironically, positive reinforcements alone are not effective in this regard. Presence of strong punitive reinforcements is also necessary to deal with such a menace rather successfully. It is these reasons that justify actions, which may appear unethical per se but when considered in the context of controlling and preventing much more threatening problems. Perhaps, death penalty if on one side provides psychological
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compensation to the heirs of the victim it also becomes a strong deterrence for the potential killers. At this point, it is imperative to note that the compensating and deterring behavior should neither be symbolic nor of greater magnitude than the suffering it self. Moreover, it should also conform to the legitimate boundaries. For instance, self proclaimed authority to override an otherwise unethical law or to punish the criminal when the formal legal system is in place is not warranted. Instead, it is necessary to invoke the legal system for justice. From the above discussion, we may derive a few criterions for identifying ethical conduct: 1. Just [legitimate] actions and decisions that benefit the individuals, group and society at large. 2. Just [legitimate] actions and decisions that benefit select individuals or societies but do not harm other individuals or the societies. 3. Just [legitimate] actions and decisions that aim at benefiting a particular set of individuals, community or the society in compensation of their earlier sufferings. 4. Just [legitimate] actions and decisions that envisage controlling and preventing bigger threats, even if these actions and decisions are relatively lesser evils. Sources of Ethics Definition: Chambers English dictionary defines the word ethics as The study of right and wrong. From the dawn of civilization, the criteria for right and wrong have been dictated by three elements: Religion, Society, and Individual perceptions. Religion is one of the main elements, and perhaps the greatest force that sets out the criteria for ethical behaviors throughout the world. Religion enables us to distinguish between right and wrong by telling us what is right conduct and what isnt. For instance, religion may tell us that killing a person unduly is something grossly unethical and helping someone is something greatly ethical. However, what may be ethical according to one religion may be highly unethical according to another religion. For instance, hunting to satisfy ones legitimate needs is regarded as ethical in Is lam, Christianity and other religions of the world. However, in Jain religion the same act is grossly unethical. Different societies have been dictating what the ethical codes of conduct are and what arent, right from the primeval era. However, what may be regarded as a highly ethical behavior in one society may be regarded as highly unethical in another. For instance
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cohabiting is highly despised in Eastern societies, but is generally an accepted conduct in the European and North American societies. Conventionally, social legacies, customs and traditions determine the code of conduct in a society. But in the contemporary societies marked by freedom of choice, greater emphasis on human rights, continues change in life styles, and of all technological and knowledge revolution are some of the emerging forefront variables that determine the socio-moral conduct at a given point in time. Personal Perception just like the religion and society that have since long dictated and discriminated the right conducts against the conducts that are wrong, personal perception also influences individuals judgment of conduct. For instance, one person may personally think that there is nothing wrong bribing as long as one gets his needs achieved, but another person may have a completely different opinion about the same issue. She may accept giving bribe for something that is legal but would not consider it ethical to bribe for illegal things. Yet another person might even consider bribing unethical altogether. Factors that might influence individual perception may be his or her moral values; goals and expectations; circumstances; and, immediate environment; etc. Basis of Ethics Empathy: Should you lie to keep from hurting a friends feelings? Should you keep a promise to visit a sick friend or accept a last-minute invitation to a dinner party instead? When should a life-support system be kept going for someone who would otherwise die? The roots of morality are to be found in empathy. It is empathizing with the potential victims; someone in pain, danger, or deprivation and the urge to sharing their distress moves people to act to help them. Putting oneself in anothers place leads people to follow certain moral principles. There is a natural progression in empathy from infancy onward. At one year of age a child feels in distress herself when she sees another fall and start to cry, her rapport is so strong and immediate that she puts her thumb in her mouth and buries her head in her mother' lap, as if she herself were hurt. After the first year, when infants become more aware that they are distinct from others, they actively try to soothe another crying infant, offering them their teddy bears, for example. As early as the age of two, children begin to realize that someone elses feelings differ from their own, and so they become more sensitive to cues revealing what another actually feels; at this point they might, for
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example, recognize that another childs pride might mean that the best way to help them deal with their tears is not to call undue attention to them. Empathy underlies many facets of moral judgment and action. One is empathic-anger, which is the natural feeling of retaliation rendered by intellect and sympathy applicable to those hurts which wound us through wounding others; this instinct is called the guardian of justice. Another instance in which empathy leads to moral action is when a bystander is moved to intervene on behalf of a victim; the research shows that the more empathy a bystander feels for the victim, the more likely it is that he will intervene. There is some evidence that the level of empathy people feel shades their moral judgments as well. For example, studies in Germany and the United States found that the more empathic people are, the more they favor the moral principle that resources should be allocated according to peoples needs. Moral Development is yet another personality dimension, which influence ethical choices. It refers to an individuals awareness and values that he or she attaches to the moral obligations in general. It is interesting to note that generally moral maturity coincides with age. In the Noble Quran ALLAH Al Mighty says, When MY slave [man or women] attains the age of forty, he or she reverts back to ME. The moral is as one gets older he or she becomes more and more disciplined [harness behaviors] and this is what ALLAH Al Mighty ordains HIS slaves. The figure forty perhaps should not be taken in absolute terms but as a metaphoric benchmark. ALLAH knows better. We can find evidence of the finality of this Quranic wisdom in the research that correlated the organizations sustainability to the age of CEOs [Decision makers]. This was published in the NEWS Week many years ago, wherein the researcher compared the Japanese organizations with US organizations and concluded that the Japanese organizations are more sustainable then US organizations. The researcher cited age factor as main contributor to this effect. Japanese organizations are managed by aged executives, while US organizations were managed by much younger executives. A researcher name Lawrence Kholberg successfully identified several stages of moral development [These stages should be visualized on a continuum and not as discrete segments]. Accordingly, an individuals moral outlook changes as his or her moral development matures to a higher stage.
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Level One: Pre-conventional Stage 1 Stage 2 Level Two: Stage 3 Stage 4 Level Three: Stage 5 Stage 6 Concern for physical consequences to self, especially to avoid punitive possibilities Concern for satisfaction of personal needs. Conventional Concern for others approval of ones behavior: You are OK! Concern for conforming to legal boundaries / standards Post Conventional Concern for preventing (not violating) others rights and social contract (obligation), for conducting one self in a morally correct manner. Concern for confirming to the ethical principles such as justice; fairness; and equal human rights etc. Ethics in Typical Work Place In an organizational world characterized by cutbacks, expectations of increasing worker productivity, and tough competition in the marketplace, its not altogether surprising that many employees feel pressured to cut corners, break rules, and engage in other forms of questionable practices. Members of organizations are increasingly finding themselves facing ethical dilemmas, situations where they are required to define right and wrong conduct. For example, should they blow the whistle if they uncover illegal activities taking place in their company? Should they follow orders they dont personally agree with? Do they give an inflated performance evaluation to an employee they like, knowing that such an evaluation could save that employees job? Do they allow themselves to play politics in the organization if it will help their career advancement? What constitutes good ethical behavior has never been clearly defined. And in recent years the line differentiating right from wrong has become even more blurred. Employees see people all around them engaging in unethical practices. When caught, they hear these people giving excuses like Everyone does it, or You have to seize every advantage nowadays, or I never thought Id get caught.
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Managers and their organizations are responding to this problem from a number of directions. Theyre writing and distributing codes of ethics to guide employees through ethical dilemmas. Theyre offering seminars, workshops, and similar training programs to try to improve ethical behaviors. Theyre providing in -house advisers who can be contacted, in many cases anonymously, for assistance in dealing with ethical issues. And theyre creating protection mechanisms for employees who reveal internal unethical practices. Todays manager needs to create an ethically healthy climate for his or her employees, where they can do their work productively and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors. The Ethics and Organizational Politics While there are no clear-cut ways to differentiate ethical from unethical politicking, there are some questions one should consider: do self-serving interests to the exclusion of the organizations goals motivate the political action? Does the political action respect the rights of the individuals affected? Is the political activity fair and equitable? The first question one needs to answer addresses self-interest versus organizational goals. Ethical actions are consistent with the organizations goals. Spreading untrue rumors about the safety of a new product introduced by your company, in order to make that products design team look bad is unethical. However, there may be nothing unethica l if a department head exchanges favors with her divisions purchasing manager in order to get a critical contract processed quickly. The second question concerns the rights of other parties. If the department head went down to the mailroom during her lunch hour and read through the mail directed to the purchasing manager, she would be acting unethically. She would have violated the purchasing managers right to privacy. The final question that needs to be addressed relates to whether the political activity conforms to standards of equity and justice. The department head who inflates the performance evaluation of a favored employee and deflates the evaluation of a disfavored employee has treated the disfavored employee unfairly.
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Unfortunately, the answers to these questions are often argued in ways to make unethical practices seem ethical. Powerful people, for example, can become very good at explaining self-serving behaviors in terms of the organizations best interests. Similarly, they can persuasively argue that unfair actions are really fair and just. Immoral people can justify almost any behavior. Those who are powerful, articulate, and persuasive are most vulnerable because they are likely to be able to get away with unethical practices successfully. Its a lot easier for the powerless to act ethically, for no other reason than they typically have very little political discretion to exploit. Conclusion This presents a solid challenge to todays business managers: Developing a win -win ethical code of conduct. Putting it differently, a paradigm shift is being encouraged from considering ethics as a social consideration besides profit and other commercial considerations in decision making to adhering ethics as guiding principles [environment] for profit and other commercial decisions. In the former paradigm, entrepreneurs make decisions that maximize their commercial advantages and if required rationalize ethical dimension to support their decisions. In the latter paradigm, entrepreneurs shall make commercial decisions that are just and equitable, as ethical principles would provide basis for and empower the entrepreneurs to make right decisions in the right way. A detailed discussion will follow in the next units.
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Enterprises are increasingly recognizing their role of a Corporate Citizen rather in conjunction with their commercial agenda. Hence, it is now taken as an effective tool to sustain growth in today\s responsible and transparent business environment. Interestingly, many organizations adhere to their Corporate Citizenship responsibilities. However, bigger is the number of organizations that are unconsciously violating it. Consequently not only they lose many business opportunities but also become vulnerable to much aggressive response from their stakeholders and the community they operate in. It has almost become a misnomer that Corporate Citizenship and Capitalism are fundamentally in conflict with each other. In my view, however, capitalism is an economic system that is rather neutral vis--vis corporate citizenship concept. It neither mandates nor prohibits social initiatives at the business process level or at the philanthropic level. Thus, ideally capitalistic enterprises, which are socially and ethically cognizant, can contribute towards the betterment of their permeable society preferably by playing a proactive role or at least avoiding dysfunctional role. In this short article, first I have talked about the concept of Corporate Citizenship followed by articulation of certain action-based-principles that may guide enterprises towards better adherence to their responsibilities as good corporate citizens. What is Corporate Citizenship? As corporate citizen, enterprises are expected to demonstrate their responsibility towards the society in general and stakeholders in particular. Thus, the concept permeates onto core business activities as well as extra curricular [philanthropic] initiatives of an enterprise. In precise terms, Corporate-Citizenship has emerged as a multidimensional concept that essentially encourages socio-moral discipline in various business-processes, such as product design and quality, pricing, promotion, delivery, after sales commitment, etc. Besides, it also advocates continually meeting and exceeding the needs and expectations of the community at large thereby alleviating their hardships to the possible extent. Social mobilization could also be one of the targets of extra curricular initiatives. Corporate citizenship manifests in three inter-related processes, namely; socio-moral responsibility; responsiveness; and, performance. Socio-moral responsibility is a fundamental process that entails upon an enterprise to make a conscious resolve
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[commitment] towards its corporate citizen responsibilities. It is a sort of declaration by the company that it stands committed to adhere to its corporate citizenship responsibilities. Responsiveness is transitory process whereby the enterprise is expected to demonstrate its commitment by tangible initiatives in this regard. Such as, the enterprise implements a policy of not violating the rights of employees, customers, etc. Similarly, the enterprises could also implement a policy of investing certain percentage of its income on various community projects such as Schools, Hospitals, etc. Performance is the ultimate process that requires continually assessing the impact of socio moral initiatives. In other words, it is about ensuring impact in the real life. Socio-moral performance of an enterprise would be assessed based on its resolve, responsiveness and performance. We have basis to conclude that Corporate Citizenship is not just spending on a few philanthropic ventures outside the business permeable environment, but it is also a culture of doing business in a socially and morally correct manner. We also have basis to say that with the adherence to corporate citizenship responsibilities, the chances of growth and sustainability of a cognizant enterprise increase many times in todays highly responsible and transparent world of business. However, it is imperative to create an enabling environment where each enterprise is rather encouraged to adhere to its corporate citizenship responsibilities in a substantive manner rather then continuing to commit their time and resources more from the ritualistic orientations. An enabling environment would essentially require the followings: Awareness, conceptual clarity, and consensus building. Policy formulation and religious implementation. Reinforcements to provide encouragement and prevent lapses at all levels.
Guiding Principles Corporate citizenship is an action-based-concept therefore it is imperative that the concept must be translated into action-based-principles if at all we expect its adherence in letter and spirit. In the following lines, I have [dared] to draw the principles in the light of ultimate wisdom of the Noble Quran, hoping that the principles will find their way into the day-in day-out of the corporate world. ALLAH Jale-shahnaho SAYS in Quran, In your wealth is the share of your parents, family, relatives, and othersAl Quran. Principle 1: Help develop the community; the customers, employees and other stakeholders; the environment; and, the future generation.
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ALLAH Jale-shahnaho SAYS in Quran, Help each other in righteous (constructive) endeavorsAl Quran. Principle 2: Create networks, Support, and Synergize for Better.
ALLAH Jale-shahnaho SAYS in Quran, When you measure, you must measure just rightAl Quran. Principle 3: Value for money, always.
ALLAH Jale-shahnaho SAYS in Quran, When you make promises, you must adhere to themAl Quran. Principle 4: Live the promises and honor the commitments, always.
ALLAH Jale-shahnaho SAYS in Quran, Do not eat each others wealth (property) in unjust mannerAl Quran. Principle 5: Create and sustain Win-Win relationships.
ALLAH Jale-shahnaho SAYS in Quran, The suppressed people ask ALLAH AL MIGHTY to send HIS slaves (believers) who may help them in times of distress and difficultyAl Quran. Principle 6: Show Benevolence; Walk an extra mile.
ALLAH Jale-shahnaho SAYS in Quran, Do not do mischief or acts of immorality (vulgarity) and do not cross the limits set by ALLAHAl Quran. Principle 7: Uphold ethics and moral values; promote safe environment; and protect life.
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Exhibits and Instruments
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Strategic Corporate Performance Plan Our Key Result Areas are: [KRAs indicate the critical performance dimensions] ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Our Key Performance Indicators are: [KPAs indicate the measurable standards for each key result area, such as people satisfaction, processes efficiency, products demand, customers loyalty and market size] ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Our Strategic Goal is: [Goals are the ends and should be consistent to the vision and values] ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Our Strategic Objectives are: [Objectives are the actions that are needed to accomplish the goals] ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Our Action Plan [Action plan indicates actions to be taken to implement the corporate plan. Actions are generally in the following areas, namely; organization policies, system and structure, individual and group behavior, internal work environment and culture, etc.] ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________
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Strategic Corporate Performance Plan Our Key Result Areas are: [KRAs indicate the critical performance dimensions] 1. Research and development 2. Professional training and development 3. Learning based accreditation Our Key Performance Indicators are: [KPAs indicate the measurable standards for each key result area, such as people satisfaction, processes efficiency, products demand, customers loyalty and market size] 1.1 Number of research projects initiated / concluded in a particular period 1.2 Validity and reliability of research output 1.3 Practical usage of the research output 2.1 Improvement of job related skills in response to work place demand 2.2 Improvement of overall career prospects 2.3 Improvement of work and social behaviors 3.1 Overall motivation to learn 3.2 Recognition in the world of work 3.3 Validity and reliability of accreditation as a basis of ones performance potential Our Strategic Goal is: [Goals are the ends and should be consistent to the vision and values] 1. To develop a competitive brand of the university, which customers can associate with quality education and higher career-prospects; 2. To make learning a rewarding and convenient for all; 3. To create equal opportunity for learning and development. Our Strategic Objectives are: [Objectives are the actions that are needed to accomplish the goals] 1.1 To promote the university image in the corporate especially and amongst the community in general 1.2 To attract teaching resource persons from good corporate entities 1.3 To develop graduates corporate finesse comparable to the contemporary corporate culture. 2.1 To transform teaching culture into a learning culture through interactive discussions, real life case analyses, interactions with the corporate executives, etc. 2.2 To make students evaluations based on learning and ability to apply in the real world 2.3 To create strong linkage between knowledge taught at the university and knowledge applied in the world of work; 3.1 To encourage and enable individuals from diverse back grounds to join in based on their demonstrated potentials to learn and serve. 3.2 To improve the validity and reliability of the admission tests with the require performance in the class room Our Action Plan [Action plan indicates actions to be taken to implement the corporate plan. Actions are generally in the following areas, namely; organization policies, system and structure, individual and group behavior, internal work environment and culture, etc.] 1. Review academic policy and curricula to better reflect work place needs and expectations
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2. Encourage faculty interaction with corporate managers and train them on experiential techniques 3. Develop experiential learning instruments, such as local case studies and critical incidents 4. Develop learning environment and culture 5. Improve internal coordination and cooptation between various stakeholders faculty, students, administrators and others
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Corporate Citizenship Agenda 1. Core Values Describe the guiding values [beliefs and norms] your bank might require to establish its strategic directions for its Corporate Citizenship Roles. The key words in this regard are given below. You may pick and elaborate into core value: Actions Compensation Culture Disadvantaged Equal status Equitability Ethics / Morality Exploitation Fairness Free will / choice Information Justice Legitimacy Opportunity Outcomes Positive discrimination Profitability Respect Responsibility Rights Safety Self esteem / respect Transparency Win-win
Write your core values below:
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2. Policy Statement a. Express your understanding of obligation and commitment vis--vis its Corporate Social Responsibility: _________________________________________________________________________ Customers __________________________________________________________________________ Suppliers __________________________________________________________________________ Employees __________________________________________________________________________ Owners __________________________________________________________________________ Regulators __________________________________________________________________________ Society __________________________________________________________________________ b. Express your understanding of the key actions an enterprise should take in compliance to its Corporate Social Responsiveness: _________________________________________________________________________ Customers __________________________________________________________________________ Suppliers __________________________________________________________________________ Employees __________________________________________________________________________ Owners __________________________________________________________________________ Regulators __________________________________________________________________________ Society __________________________________________________________________________ c. Express your understanding of the key results [outcome] an enterprise should aim at vis--vis its Corporate Social Performance: _________________________________________________________________________ Customers __________________________________________________________________________ Suppliers __________________________________________________________________________
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Employees __________________________________________________________________________ Owners __________________________________________________________________________ Regulators __________________________________________________________________________ Society __________________________________________________________________________ d. Summarize the [a, b, c] above into a paragraph, below:
3. Strategizing: a. Identify gaps [areas of concern] in an enterprise internal environment vis--vis its Corporate Citizenship Policy. Use the following table to assess gaps: Dimension: Management understands and demonstrates commitment to its Corporate Citizen sip roles Corporate Citizenship is incorporated into the Strategic Business Plan Management policies are aligned to the Corporate Citizenship roles Management systems are aligned to the Corporate Citizenship roles Business processes are aligned to the Corporate Citizenship roles Products and services comply to Corporate Citizenship roles People attitude and behaviors comply to Corporate Citizenship roles Company actively participates in the socio-moral development of the society, such as advocacy [social Scale:
12345 12345 12345 12345 12345 12345 12345
12345
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mobilization], employment creation, community health and education, sports and cultural activities, etc.
Scale: 1 excellent, 2 good, 3 more is better, 4 needs improvement, 5 not present.
b. Enlist gaps [areas of concern], actions and outcomes, and possible interventions to improve: Gaps [areas of Describe actions and Possible intervention: concern]: outcome in the as-is scenario
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