Running head: OBSERVATIONS OF ORGANIZATIONAL MODELS

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1 Running head: OBSERVATIONS OF ORGANIZATIONAL MODELS Observations of Organizational Models Giovanni Mejia San Jose State University Information Organizations and Management Dr. Fuller September 10, 2008 Mejia, Giovanni A3 -Observations of Organizational Models 1

2 Observations of Organizational Models Management is doing things right; leadership is doing the right things (Peter F. Drucker). Organization and management are overlooked by the average employee. How often do employees at retail stores ask their managers about the philosophy behind the stores organizational structure? But organization is something we deal with on a day to day basis. Either at work or with are families there is an organizational theory being implemented in both. In my life I have experienced different organizational theories while working for Red Bull North America, and Coughlin Stoia LLP. I have observed behavioral theories, and contingency theories applied to organizations with different results. But a properly implemented behavioral theory is most effective in a non-routine work environment. Organizational Structures Observed in Work Settings Red Bull North America seems to have approached management using several different models. One theme stands out in Red Bull s approach to management, which is the stepping away from Bureaucratic Hierarchies. Two approaches can clearly be identified in Red Bull s organization, a systems, and behavioral approach. Red Bull s approach is completely focused on creating a company with like minded people. The approach beings on how they hire individuals. Jobs are rarely posted on any kind of public media, and are usually communicated through word of mouth. For example, I was stopped by a friend in the middle the street, and asked two questions: Do Mejia, Giovanni A3 -Observations of Organizational Models 2

3 you like Red Bull? and Would like to go skydiving? My answer to both questions was yes, and her response was Apply to this job. Why would an employee go through the process of questioning someone s interests, and relating it to a job? The behavioral approach could lend some insight to why such tactics were used. According to Hugo Munsterberg, there are three concepts that must be applied within an organization when using a behavioral approach: Identifying the person with the proper characteristics to perform the job (skill, attitudes, physical abilities), developing methods to identify the ideal psychological condition for engaging in a task, and creating optimal motivational influences on the worker. (as cited in Evans G.E & Ward P.L, 2007, p.25) The three concepts explain some of the reasoning behind Red Bull s method of hiring. They wanted to hire someone based on their lifestyle, such as my reputation for being athletic and always having a positive attitude toward life, not based on the ability to perform well at an interview. Red Bull s method of interviewing people explains Munsterberg s second point. The interviewing process was not like any other process I ve experienced. For example, most of my interviews have been with office managers who asked questions about my strengths and weaknesses, and past accomplishments. In contrast, Red Bull s manager asked for my opinion on potential marketing events. Further, my second interview was called an audition, which was a series of games used in theater to see how potential employees interacted. The people being hired were young energetic consumers. The ideal psychological condition Red Bull had decided on was through the formation of Clans. The clan mentality is dominant throughout the corporation. Ouchi and Price (1993) define a clan as a culturally homogeneous organization, one which most Mejia, Giovanni A3 -Observations of Organizational Models 3

4 members share a common set of values about how to coordinate effort in order to reach common objectives (Clans section, para. 1). Red Bull would find people with lifestyles that fit the image they wanted, which led to a homogenous organization. For example, most marketing mangers were in their thirties, involved in either extreme sports, or popular music and media. Further, the employees they hired for marketing jobs were primarily college students or recent graduates with the same interest as the managers. In short, the marketing branch of Red Bull was one unified Clan. The company used a Systems approach to tie the different branches together to create one giant clan. The sales branch of Red Bull primarily focused on per unit sales, but the marketing mentality was also integrated into the sales branch. Peter Senge describes his version of systems theory as an understanding of the whole picture in order to see how the parts are interconnected (as cited in Smith, M.K, 2001, Systems thinking - the cornerstone of learning organization section, para. 3). The point of integrating the marketing perspective into the sales branch was to create an understanding of the overall picture. The picture everyone was to understand was a triangle with an important center. The top of the triangle was labeled know, which described the advertising, and the process of making consumers aware the product exists. Another point on the triangle was labeled try, referred to the marketing branch. Marketing teams would sample the product to customers. The third point was labeled believe, meant if the marketing teams sampled the product properly then the consumer would believe in the product, and consume it. Finally in the middle of the triangle, there was a circle labeled love. If the consumer enjoyed the product they would love the company once they saw the different public events the company put together. The sales people understood the systems map, Mejia, Giovanni A3 -Observations of Organizational Models 4

5 and felt close to the marketing people because the end result of the map was to sell the product. The systems approach connected the marketing clan with the sales personnel to create an organization of socialized individuals. Finally, the optimal influence for employees was to be part of Red Bull. The socialization was so intense that most former co-workers expressed feeling empty because they felt they were part of something bigger than they could ever be while at the company. At Coughlin Stoia LLP, the implementation of the contingency theory was the primary method of operations for the office, but a behavioral approach was also implemented among smaller groups. Coughlin Stoia was made up of several horizontal and vertical groups. Litigation has many processes that make it up. There are databases that must be maintained, paper records that must be updated, briefings that need to be reviewed, and so forth. Daily interaction was through horizontal co-ordination. Mary Parker Follet describes such a structure as: Not hav[ing] an ascending and descending ladder of authority.that means in this case that a problem which occurs at X which concerns Y does not have to be taken up the line from X and then taken down the line to Y. (as cited in Graham, 1995, p. 186) This means there is not just one line of authority, so jobs could be more efficiently completed. For example, if a paralegal received a set of electronic documents that needed to be loaded onto the firm s database, a document clerk would load the documents onto the database. But if there was a problem with the documents, it was not necessary to go through the paralegal to find a resolution. A document clerk and a database coordinator could either deal with the problem themselves, or directly address an attorney for suggestions. In short, a job could be completed without having to go through specific people. Mejia, Giovanni A3 -Observations of Organizational Models 5

6 Smaller groups in the office were organized using a behavioral approach, more specifically into clans. The document clerks were recent college graduates seeking either to go into law or seeking to get a taste for law before pursuing other goals. In terms of office location, the document clerks were isolated to a cluster of cubicles in one corner of the office. Additionally, document clerks had similar work hours, and flexible lunch hours to promote having lunch together furthering socialization. In contrast, partners, associates, and paralegals were scatters between two floors, had individual offices, and did not have set hours. Clearly, there was a conscious attempt to unify the group of clerks. Mobility played was the primary factor for the adoption of the clan approach. Ouchi and Price (1993) suggest that industrialization and hierarchies have problems developing clans because of mobility (Clans section, para. 4). A law office has little to do with industrialization, but the idea of mobility is important in understanding why the clan approach was implemented. Document clerks had zero mobility within the field because a certain level of education was needed to be mobile. For example, attorneys needed Juris doctorates, and paralegals needed certificates. The organization of the document clerks led to their socialization. The overall office was dictated by the law of situation. Follet describes the law as authority based on knowledge (as cited in Evans G.E & Ward P.L, 2007, p.30). For example, certain attorneys were heavily competent in database management and how document were formatted. In contrast, other attorneys did not know the name of the databases. Or certain document clerks were fast at preparing document for trial, and others were better at organizing spreadsheets. The tasks and skills of the employees were Mejia, Giovanni A3 -Observations of Organizational Models 6

7 greatly varied, so authority over how to approach a task was based on expertise. The contingency theory was applied to the office because it s flexibility. What models were least effective? The least effective model was the contingency model. The contingency theory makes authority situational and it only works if there is proper training. Expectations on behavior and how the company views the document clerks would be important first step. Contingency s strength is its ability to adjust to uncertain environments. And that flexibility allows for the application of problem solving skills from allowing an individual to think independently. But for problem solving skills to work, especially when working in teams, a cohesive group is necessary. But there was not cohesive group. The head document clerk had an antagonist relationship with the rest of the document clerks. Follet describes how giving orders does not work, and that language plays an important role in an organization (p ). The head document clerk had a habit of giving orders instead of rephrasing words to depersonalize the orders. Additionally, since there was no direct supervision, the existing problem was never directly addressed, and the work environment was not as efficient as possible. In this case, the administrative approach or the bureaucratic hierarchy could lend some remedies on dealing with the problems faced at the law firm, such as training program to explain how groups form, and how to make the most out of team work. Finally, some supervision was clearly required to mediate problems. Mejia, Giovanni A3 -Observations of Organizational Models 7

8 Red Bull s major problem was socialization took a significant amount of time. During that time of socialization there is a period of alienation. Elton Mayo (1933) refers to employees who do not adjust to a work setting as socially maladjusted, and explains that incompetent individuals can seem competent if placed in the right social setting and vice-versa (p ). At Red Bull if you were did not believe in the product there was no way to become socialized. Further, the systems approach was supposed reinforce the behavioral approach by showing a map of the company s vision. Unfortunately, during the period of socialization, if an employee does not fully integrate into the clan then the overall picture is irrelevant. In this case the problem could be resolved my immersing the new employee into the culture. First of all, transparency about the organization would be a good start. Red Bull is a private company, so it tends to be secretive about its practices. Second, by allowing people to be part of the major events would have helped with connecting the individual s job with the overall vision of the company. But few people had trouble becoming full integrated because there was a training program. What model was the most effective? The behavioral models are the most effective. The implementations of models depend on the type of work needed to be completed, but in these cases the behavioral model made logistical sense. Both situations did not need a bureaucratic hierarchy. Perrow (1985) defines the hierarchy with six points, centralized authority, clear lines of authority, specialization and expertise, marked division of labor, rules and regulations, Mejia, Giovanni A3 -Observations of Organizational Models 8

9 and clear separation of staff and line (p.1). In both cases discussed, a hierarchy would be too rigid. For example, at Red Bull I worked independently from a school campus on a daily basis building relationships with key figures. In other words, since my work was not predictable a hierarchy would not have been the best option. A centralized authority would not be able to give me insight or manage my behavior on a daily basis. Thus a behavioral theory along with socialization was the most effective approach. Conclusion When potential employees apply for a job they should have and idea of what the how a company is organized. Employers should have a clearly stated organizational approach, and must train employees because if that understanding not there then problems may arise. With a behavioral approach the socialization period can be hard for some people, but it is a model that unites the entire company. Red Bull called it Brandwashing. The bureaucratic hierarchy model provides some insight on how to resolve issues such as incompetent managers, and maladjustment. But for dynamic work environments the theory is too rigid. At the end of the day, if a behavioral approach is thoroughly implemented, management will do the right things to lead people in the right directions. Mejia, Giovanni A3 -Observations of Organizational Models 9

10 References Evans, E.G, & Ward, P.L (2007). Management basics for information professionals (2 nd ed.). New York: Neal-Schuman Publishers. Graham, P. (Eds.). (1995). Mary Parkeer Follet Prophet of management. Boston: Harvard Business School Press. Mayo, E. (1933). The Human Problems of an Industrial Civilization. New York: The Viking Press. Ouchi, W.G; Price, R.L. (1993). Hierarchies, clans, and Theory Z: A new perspective on organization. Perrow, C. (1985). The short and glorious history of organizational theory. In Lynch, B, (Ed.) Management strategies for libraries: a basic reader. (pp ) New York: Neal-Schuman. Smith, M.K. (2001) Peter Senge and the learning organization. The encyclopedia of informal education. Retrieved September 9, 2008, from Mejia, Giovanni A3 -Observations of Organizational Models 10