Inevitable Part of Organisation Design or Simply a Management Convenience - Assignment Example

IS HIERARCHICAL CONTROL AN INEVITABLE PART OF ORGANISATION DESIGN OR SIMPLY A MANAGEMENT CONVENIENCE? DISCUSS. Customer Inserts His/ Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 12th November, 2008 The current market scenario makes it imperative to reconsider the traditional organizational system whereby hierarchical control was considered to be an inevitable part of organizational design but whether it is really so de rigueur for proper functioning of an organization or is just a tool to ease the managerial responsibilities, is a striking issue when analyzed from the contemporary business practices perspective. The following discussion aims to focus on the impact of hierarchical control on the overall performance and efficiency of the firm and the relative consequences in absence of such measures that can change the direction of the business either for favourable or unfavourable circumstances. HISTORY OF HIERARCHY Hierarchies were first initiated to run military and religious organizations which in the 20th Century transformed into multiple layer organizations. F.W. Taylor realized that the most vital aspect in running a business that is knowledge and technical know how were polished under the guidance of heads of workers of the time, thereby he conceptualized the methodology to convert tacit knowledge into explicit knowledge and empowering managers to head on the production process (Dafermos N G). He further supported that the time and motion study and exhibited that each task could be split up into many steps in order to achieve dissemination of knowledge, hence the batten was passed on from workers to managers and comprehended an organizational structure that regarded the organization as a machine and the workers as cogs (Dafermos N G). WHY HIERARCHY? The need of hierarchy can be defined by analyzing the fact that all bodies that govern companies employ people to perform the routing business functions and they all organize people into managerial hierarchies because this is the only way to structure inform working system with a large number of employees. The system helps in to add real value to the work, to identify and nail down accountability at each and every crucial stage of the process, placement of competent people in respective organizational layer and above all builds a general consensus in accomplishment of organizational ends. The real essence of hierarchy lies in its effective organizational form for positioning people and segregating tasks at complementary level. Inspite of all kinds of changes in the business environment, hierarchy still appears to stay alive and many organizations still embody the characteristics and features of the hierarchical form of business organization. Leavitt, Harold (2003) states that every large or massive organization has to be hierarchical, the intensity and passion with which the debate regarding the importance or irrelevance against hierarchies is dealt only serves to highlight its strength and permanence. The knowledge based organisation or networking structures are simple modifications or personifications of the basic hierarchical structure. The new flatter, faster organisation does imbibe certain effective changes in the designing of the business protocol but the basic plan remains unchanged. HIERARCHY A POSITIVE APPROACH OR NEGATIVE MECHANISM? According to Jacques E ( 1990), balanced scorecard of managerial hierarchy is drawn very efficiently bringing out , both the pros and cons of implanting the hierarchical system Bureaucracy in business demoralizes creativity, initiative and innovativeness but it cannot be denied that hierarchy is inevitable for the existence of a firm in releasing energy, rationalizing productivity and improving morale of the employees. However the current business practices draw out many loopholes for implementing the control system especially in the era of information age, service and the post industrial age (Jacques E , 1990) but on the same front if we delve deeper into the concept, it is not the hierarchy which is to be blamed but a wrong understanding of its functions, it cannot be completely called a managerial convenience as it enables a company to employ a large chunk of people and yet sustain the unambiguous accountability for the work they perform. Though there are inefficiencies related with the system like excessive layering, accountability cramping, buck passing but this is all due to ineffective management and not the system in itself (Jacques E, 1990). It is the hierarchies which are badly designed; placing the emphasis on accountability for getting the work done can definitely refine the tarnished image of hierarchical system which is posed as management’s convenience and not as a vital component in the business. Further assuring that managers are bestowed with enough authority to ensure that their subordinates can perform the work assigned to them, simultaneously creating a quantum time-span difference between managerial levels (JMcaddel, 2007) can help in bridging the gap that is widened in comprehending the advantageous and benefits of imbibing the hierarchical system. Tapscott and Caston (1993) supported the fact excessive control by hierarchy’s results in retreating of efficiency due to heightening of technological advancements that favour open networked organizations. Few studies have revealed that instilling coordination techniques via the organization’s hierarchical system has become a much desired way of increasing entrepreneurialism and motivation in firms Foss J N (2000). However, due to the credibility problems between the management and their unnecessary intervention such measures become a fruitless exercise. The most latest researches have come up with the idea of incorporating ‘spaghetti organization’ due to the fact that the new market trends face a downsizing turn, spinning off and outsourcing the business activities, such lessening down of hierarchical control gives way for liberty and flexibility in work culture, as in one of the case study interpreted by Foss J N (2000), a complete restructuring of firm where everybody was supposed to have full right to the accessibility of all information, no private offices, breakdown of departmentalization into project system, removal of multiple hierarchies resulted in augmenting and enhancing the growth and performance of the organization. Hierarchy system was found to be ineffective and could be used only as a sorting mechanism for allocating skills so that people with more influential knowledge would obtain authority over those with less decisive knowledge (Casson M, 1994). In fact, the very notion that hierarchical job ladders no longer functioned as incentive mechanisms, supported the conventional flexible organizational structure (Kolind L, 1990). Bureaucracy is inevitable so as to deal with the complexity of ever increasing massive firms. An administration system has to be enforced for effective control and dissemination of information. Hierarchical set up is capable of imparting optimum efficiency in order to make possible the calculability of results for the leaders of the organization. It is aptly been said that Bureaucracy is the most important “mechanism for the administration of everyday profane affairs." (Dafermos N G), however one cannot disregard that In the better, cheaper, faster world of globalization and liberalization, anything that works or creates bottlenecks and regresses up decision-making is a hindrance to growth, under such aspects hierarchical management is not a positive channel to forge ahead and what employers desire in the current phase is a teams based around co-ordination, co-operation and flexibility (Hindle, T, 2006) Past researches such as one undertaken by Maclagan P, 2007, has pointed out that there exists a fundamental conflict in business ethics between the need to continue ethical conduct through hierarchical control, and the propagation of individuals' autonomy, freedom and flexibility in real terms . however, after the study it could be well confirmed that hierarchy is more dominant than any other control but is regarded as a misplaced extension of the more general and stringent managerial tendency to seek and maintain control over the workforce. From a Kantian or a social theoretic approach, the arguments stand in favour of individual’s autonomy as well, but a wider societal significance of hierarchical power in organizations overpowers all other issues. It was ultimately found out that genuine, non-manipulative; participation by employees can actually delimit the constraints posed by the hierarchical system (Maclagan P, 2007). FUTURE VISION In many growing industries such as fashion, the contemporary environmental dislocation reveals the limitations of traditional organizational setups. In order to cope with the environmental threat, companies are trying to experiment new organizational forms which incorporate more flexibility and diversity (Djelic L M, Ainamo A, 1999). The search of new organizational form far from the past hierarchical setups are trying to cope up with the issues of interdependence, disembodiment, velocity and power (Child J, McGrath G R, 2001) so as to update themselves from a materialistic economy to a informative and knowledge based design by unshackling and liberating many organizational aspects from physical constraints. The past century has noticed a significant impact on the organizational structure and management which have transformed them from ‘bureaucratize dinosaurs’ to more flexible and innovative designs. Hence, to tap on the competitive edge, organizations have revised their management practices giving birth to a virtual networked organization. The hierarchical system is based on three notions, stability of environment, and predictability of processes and predetermined output which in current vision stand outdated. Organisations which were guarded by hierarchies where the prominent feature was that the functional departments were separated are now in the new outlook replaced by organisations which are purely based on team-work with cross-teams that treat people as assets and not as mere cogs. The hierarchical structures are to be taken over by networked systems that foresees an ideal flexible production system exhibiting the role of a niche-based markets in response to a society which is shaped and structured by a decline in the ideas of mass society, market and production as people no longer want to be associated as a part of the mass , they prefer their own individual identity and like to be acknowledged in a distinct and discrete manner (Limmerick C D, Cunnington B, 1993) The future vision sparks out the deficiencies displayed by the Top-level managers in many leading corporations who are gradually losing control of their companies. The issue does not revolve around misjudgment of demands created by a complex environment or rapid pace of environmental change but because the companies are actually incompetent to carry out the strategies developed over the past 20 years, though it is difficult to point out that such causes are due to indulgence of hierarchical system or inefficiency of putting those systems into practice (Hindle, T, 2006) Recently, organization design has been under issues due to compliance with divergent demands. Few of the firms prefer organizational forms to build on trust while some others regard control-oriented forms to assure confrontation with an increasing number of regulatory norms. The optimum solution for all the companies is to face the challenge to satisfy both requirements in tandem (Burton M R, Håkonsson D D, Eriksen B, Charle, Snow C C, 2006) UNDAUNTING HIERARCHICAL STRUCTURE No matter how much people try to diminish the importance of bureaucratic form of organization, it still overpowers and persists because it’s capable of change and adaptation, it renders true psychological and practical value, its almost unrealistic and improbable that the existence of hierarchical structure disappears or pervades with time (Li Feng, 2006). It can be analyzed that on a wide front, successful and established companies find it a lot harder to restructure the organizational framework; they strongly intend to carry on with "the way things are done around here" unless they have sound reasons for change CONCLUSION It can be concluded that hierarchical system is not just an ease for the management but an inevitable part for the sustainment of any business firm employing a large number of people, what is needed in the current trends is not a complete, 100 percent flat organization but a better understanding in implementing the traditional hierarchical structure for getting work done efficiently. It’s important to set the structure right which will ultimately lead to increased efficiency and morale in the workforce. No amount of refraining or catch phrasing, incentive panning or leadership can bear results unless the concept of hierarchy is put to its optimum use. The real problem of organisations in the current time is not actually to search a new structure but to adapt to the environment such that successful strategies result. Hence, it’s not for the convenience of management that Hierarchy persists, but because it is quintessential for the existence of the organization. REFERENCES Burton M R, Håkonsson D D, Eriksen B, Charle, Snow C C, 2006, Examining the Relationship between Trust and Control in Organizational Design, Vol 6, p 43-65 Casson M. 1994. Why is Firms Hierarchical? International Journal of the Economics of Business 1: 47-76. 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