Shapes and Structures of Organizations Today and Tomorrow

Transcription

1 ISSN NHRD Network Journa Apri 2012 Voume 5 Issue 2 Bijay Sahoo & Prashant Deshpande Brijendu Gupta Dr. Chandrashekhar S & Shiben Moitra Shapes and Structures of Organizations Today and Tomorrow Ester Martinez Dr. Keith C D Souza & Anjan Bhowmick Krish Shankar Kumar Krishnaswamy & Cyriac Joy Madan Nagadinne & Shweta Shuka Dr. Paab Bandyopadhyay Raj Raghavan S Ramnarayan B Ravi Shankar Sreekanth K Arimanithaya B Sudhakar Sudheesh Venkatesh Vikram Bector A Quartery Pubication by The Nationa HRD Network

2 NHRD Network Journa Shapes and Structures of Organisations - Today and Tomorrow Voume 5 Issue 2 Apri 2012 NHRD Network Board Members Nationa President: Past Nationa Presidents: Regiona Presidents: East: South: West: North: Nationa Secretary: Nationa Treasurer: Executive Director: Editoria Team Pubisher, Printer, Owner and Pace of Pubication Printed at Sy. Siddiqui, MEO (Admn - HR, Fin & IT), Maruti Suzuki India NS Rajan, Partner, Human Capita and Goba Leader HR Advisory, Ernst & Young Aqui Busrai, Chief Executive Officer - Aqui Busrai Consuting Dwarakanath P, Director-Group Human Capita - Max India Dr. Santrupt Misra, Director - Aditya Bira Group Sourav Daspatnaik S V Nathan, Director U.S. India Taent, Deoitte Rajeev Dubey, President (Group HR & After-Market) & Member of the Group Executive Board, Mahindra & Mahindra S Varadarajan, Executive President - HR, Tata Teeservices Prince Augustin, EVP-Human Capita, Mahindra & Mahindra L. Prabhakar, Head-Human Resources (Agri-Business Division), ITC Ltd Dhananjay Singh S V Nathan, Director, U.S. India Taent, Deoitte (Guest Editor for this issue) Dr. PVR Murthy, Managing Editor, CEO, Excusive Search Recruitment Consutants, pvrmurthy@excusivesearch.com Dr. Paab Bandyopadhyay, Director - Human Resources, Citrix R&D India Pvt. Ltd., bandyopadhyaypaab@yahoo.co.in Dr. Arvind N Agrawa, President - Corporate Deveopment & Group HR, RPG Group Dhananjay Singh on behaf of Nationa HRD Network, Nationa HRD Network Secretariat, C 81 C, DLF Super Mart, DLF City, Phase IV, Gurgaon Te e-mai: dhananjay.singh@nationahrd.org Nagaraj & Co. Pvt. Ltd., 156, Deveoped Pots Industria Estate, Perungudi, Chennai Te : The views expressed by the authors are of their own and not necessariy of the editors nor of the pubisher nor of authors organizations Copyright of the NHRD Journa, a rights reserved. Contents may not be copied, emaied or reproduced without copyright hoders express permission in writing.

3 Dear Readers, The Nationa HRD Network has been bringing out a semi-academic, theme based, quartery journa for the past four years. It aims at compiing and pubishing the professiona views and experiences of reputed HR professionas, ine professionas, CEOs, researchers, academicians in each theme area. We carry out extensive research, identify and invite persons who have eminent pubications or have rich experience in the theme area to contribute artices for each issue. Through the journa, we aim to buid a body of HR knowedge in a facets of HR which is not otherwise easiy avaiabe for the current and future HR Professionas. So far, cose to 300 eminent authors have contributed artices for the 20 issues. Each issue is guest edited by a person of eminence in the concerned theme area. This journa is circuated free to the members of NHRD Network to stimuate their thinking and towards their professiona deveopment. Pubications so far have been based on themes such as : IT in HR Performance Management Attracting and Retaining Taent Career Management Organizationa Change Goba HRM Women in Corporate Leadership Roes Organization Deveopment Learning and Deveopment Leadership Work-Life Baance Institution Buiding Coaching For Performance and Deveopment Human Resources Management in Rapid Growth Organizations HR Competence HR and Empoyee Reations CEO and HR Peope Power Draw, Drive and Deiver Getting HR Ready for Gen Y CSR & HR The copies of these issues of the journa can be accessed from The current issue (Apri 2012) is on the theme of Shapes and Structures of Organizations - Today and tomorrow Pans for the ensuing issues are as foows: 1. Juy 2012 issue on the theme HR, The Business Driver to be guest edited by Mr. Anand Nayak, Head HR, ITC. This is your journa and wi be as rich as you want it to be. In order to further enrich it, we woud ike to receive your 1. quaitative feedback on issues brought out so far, and 2. suggestions for themes to be covered in our future issues. 3. Any other suggestions. Kindy send in your thoughts to drpvrmurthyresearch@gmai.com Dr. PVR Murthy Managing Editor.

4 ACKNOWLEDGEMENTS Our profound thanks to a the contributors of artice and book reviewer who have taken time off from their busy schedues out of their interest in the fied. We acknowedge with gratefuness, the exceent contribution of the Guest Editor S V Nathan. I woud ike to pace on record our thanks for the passion with which you worked for this issue from concept to concusion. I woud aso ike to thank Karan Sharma for a his support. We acknowedge the support from Sunathy of Excusive Search for her support with a missionary zea. We aso thank Anuradha Muraidharan of SRM Schoo of Management for her support. Simiary thank you Mrs Bina for the professiona editing of the contents. Thank you advertisers, but for your support, we woud not have been abe to produce this journa as we have been maiing it free. Dr. PVR Murthy, Managing Editor (On behaf of the Editoria Team)

5 CONTENTS S.No. Tite of Artice Author Page No. 1 Organization structure as a vehice for Bijay Sahoo and 1 Strategy Execution Prashant Deshpande 2 Strategy ahead: Future Organizationa Brijendu Gupta 10 Structures 3 Organizationa structures of the future Dr. Chandrashekhar S and 15 Shiben Moitra 4 Structure and the virtuous Spira Ester Martinez 21 5 Organization structure and innovation Dr. Keith C D Souza and 25 Anjan Bhowmick 6 Organization structures chaenges in Krish Shankar 32 dynamic times 7 Organization structure in Hospitas-Enigma Kumar Krishnaswamy and 38 of Cinician Engagement Cyriac Joy 8 Organization structures in New Age Madan Nagadinne and 46 Organization and organizations of the future Shweta Shuka 9 Designing High Performance Work Dr. Paab Bandyopadhyay 52 Organizations 10 Evoution of Organization Structures in Raj Raghavan 58 New Age Technoogy & Research Organizations 11 Redesigning to go across borders Dr. Ram Narayan Keep aside the adder Ladder vs. Lattice B. Ravi Shankar Structures in muti-ocation organization Sreekanth K Arimanithaya 74 and its impact

6 S.No. Tite of Artice Author Page No. 14 Informa power centers B Sudhakar Organization design that serve a Sudheesh Venkatesh 86 socia purpose 16 Strategy and Organization Structures Vikram Bector 94 Reevance and reaity BOOK REVIEW 17 Organizationa Design: Reviewed by 100 A Step by Step Approach Neha Gupta by Richard M. Burton, Gerardine DeSanctis, Børge Obe

7 EDITORIAL COMMENTS S.V. NATHAN (Guest Editor for this Issue) S.V. Nathan is the Taent Director for the Deoitte U.S. India offices, with over 26 years of professiona experience in human resource management. Nathan has ed many teams of young professionas in both mutinationas as we as Indian entrepreneuria organisations, whie heping buid smaand arge-format organisations. Nathan graduated in mathematics and is an aumnus of XLRI Schoo of Business and Human Resources. He can be reached at I am peased to wecome you to a very specia edition of the NHRD Network Journa. The theme of the Apri issue is Shapes and Structures of Organizations - Today and tomorrow. As your Guest Editor, I have put together some very insightfu and interesting perspectives on this topic from prominent experts and thought eaders in our domain. I was very intrigued by the artice by Gary Hame where he discussed the word's most creativey managed company - Morning Star, a 700 M $, in 2010, where tites, structures and supervision don't exist! A hierarchy means overheads, risk of deays in decisions, risk of tyranny and the power to ki an innovative idea. This firm makes tomato ketchup. No one has a boss, empoyees negotiate with peers, everyone can spend money, and each is responsibe for toos needed. The empowerment is of such nature that peope manage themseves. But a companies cannot be Morning Stars. We exist in a word of constant change and innovation. Every day, organizations are forced to enter the war room and re-ook at their structures, not just because of their own interna need but aso because the rapidy changing scenario. Today, it is natura for executives to take the peope-first approach towards organization design. But more often than not, the resut is an organization structure that does not aign we with the true needs of the business. To compensate for this natura bias, organizations, shoud strive to foow a strategy-driven approach that is structured and consistenty appied across the enterprise. For many companies, a new organization strategy or structure means a new drawing an organization chart with boxes and ines that assign peope to positions and responsibiities. However, such process by itsef rarey yieds an organization design that s effective for reaising business strategy. And it's true that an organization transformation initiative itsef can be emotiona and difficut under any circumstances.

8 In this edition, under the broad umbrea of Organization Structure, our endeavour has been to cover organization structures in different sectors, e.g., FMCG, Heathcare, Teecom, Socia Purpose, new age and the od economy. What is unique about this edition is that there is a ot of origina thought and authors have penned their persona experiences that wi make us to think. We aso discuss the evoution of organization structures, how these support the current dynamics of the workpace, and how these woud need to change in order to prepare for the upcoming chaenges. We aso try to understand the HR innovations in this area over the years and the gradua increase of importance of structures. The artices in the journa are not ony informative but aso mutifarious. Whie the primary focus of our authors is the Indian industry and taent andscape, the various modes discussed or anaysis drawn up can be safey appied to any industry anywhere in the word. We have been fortunate to receive outstanding contributions from academicians and members from the corporate word, across various industries. The artices are a synthesis of their rich experience, in-depth research and soid conceptua knowedge. I truy hope that this issue of the NHRD Network Journa is abe to provide you a deeper insight into the area of Organization Structure, aong with practica soutions, and ideas to innovate and hep you manage its evoution into the future. Thanks for your patronage. Dr. PVR Murthy Honorary Managing Editor on behaf of the Editoria Team Dr. Paab Bandyopadhyay Dr. Arvind N Agrawa

9 ORGANIZATION STRUCTURE AS A VEHICLE FOR STRATEGY EXECUTION BIJAY SAHOO and PRASHANT DESHPANDE Abstract In this artice, the authors address how the business eaders, HR professionas and their advisors can design an appropriate organization structure for effective strategy execution. The authors aso highight how organization structure can be dynamicay aigned with strategy to meet changing needs of business. Finay, the authors share their refections on the emerging trends and the future of organization structure. About the Author Bijay Sahoo has over 24 years experience in HR at various senior eadership roes in eading nationa and goba corporations. He is currenty the President-HR responsibe for Reiance Industries Retai & 4G Infote businesses. Prior to this roe, he was VP and Goba HR Head of Wipro Technoogies and before that the Principa Consutant at PricewaterhouseCoopers and the eader of the HRM consuting practice of PwC in India. Prashant Deshpande has over 11 years experience in academic research, business education and eading corporations in the area of Strategy and HR. He is currenty the Head - HR Strategy, Panning and Poicy at Reiance Retai and 4G Infote. He is aso the Head of Reiance Retai's HR Academy. Business eaders have to ensure that, they have organizationa capabiity to execute business strategy. The organizationa capabiity derives from peope capabiities since every task an organization performs is done by peope; either interna managers and workers or externa consutants. A prerequisite for buiding organizationa capabiity is to design an organization structure in which the peope capabiities can be deveoped continuousy and depoyed effectivey. 1. Definitions of Strategy and Organization Structure Business organizations universay pursue profitabe growth and positive brand image as the core strategic objectives. Highy successfu business eaders Apri 2012 NHRD Network Journa 1

10 repeatedy highight profitabiity, growth and brand as key factors guiding their decision making. Therefore, we define strategy as any specific action pan or broad approach aimed to boost profitabiity, growth or brand of an organization. There are certain strategic objectives which stem from these core objectives such as cost efficiency from the profitabiity; organic growth, innovation or mergers and acquisitions (M&A) objectives from growth and various socia/ environmenta objectives from the brand concern. Organization structure is a framework, within which an organization divides its tasks into jobs, groups various jobs horizontay into departments and verticay into hierarchies, defines ines of authority and communication and determines how the roes and responsibiities are deegated and coordinated. The term organization structure invokes the imagery of an organization chart. However, the chart provides ony partia representation of the organization structure. For an organization structure to be truy usefu for the strategy execution, it needs to go beyond the chart. The structure shoud define hierarchica eves, reporting reationships, roes and responsibiities and key performance indicators (KPIs). Once the roes and responsibiities and KPIs are defined, it is easy to cascade the strategic goas down to the individua eve goas using a strategy aignment framework such as baanced scorecard. 2. Types of Organization Structure The traditiona basic types of organization structure are functiona, geographica and divisiona structure. These structures are simpe and conform to the principe of unity command meaning every empoyee has ony one supervisor. a. Functiona structure: In functiona structure, jobs from the same function such as production, marketing or HR are grouped together. An offshoot of pre-industria occupationa guids, this is the eariest structure to emerge in factories after the industria revoution. The advantage of functiona structure ies in the ease of communication due to shared anguage within the function and the ease in training and deveoping peope aong functiona career paths. The disadvantage of functiona structure is the sio mentaity it creates rendering inter-departmenta coaboration difficut. The functiona structure is appropriate for executing a strategy focused on profitabiity due to its optima utiisation of resources however it takes to on the growth since Figure 1: Organization Chart for Functiona Organization Structure 2 Apri 2012 NHRD Network Journa

11 it puts functiona contros above the autonomy needed for frontine staff to drive growth. b. Geographica structure: The geographica structure groups together empoyees working in the same region into one department. This structure has the advantage of the autonomy to geographica units and superior intradepartmenta coordination due to geographica proximity. However, with the advances in teecommunication, the geography is becoming ess reevant. Figure 2: Organization Chart for Geographica Organization Structure Geographica structure is appropriate for executing the growth strategy for a geographicay dispersed organization. That s why it is widey used to structure saes organizations. c. Divisiona structure: The divisiona structure groups together peope for a common product ine or project. Introduced in the first haf of the 20 th Century by Genera Motors and Du Pont, the divisiona structure is appropriate for executing growth strategy for a muti-business firm due to inherent autonomy to divisions. The disadvantage of the divisiona structure is that it may ead to narrow mind set within departments and dupication of resources thereby undermining the profitabiity which woud arise from synergies across divisions. In addition to the traditiona basic structures other structura aternatives before an organization designer are matrix, process based and customer based structure. d. Matrix Structure: Matrix organization is a combination of two or more basic types of the organization structure. The most commony used matrix across organizations is the functionadivisiona matrix in which every empoyee has a functiona supervisor Apri 2012 NHRD Network Journa 3

12 Figure 3: Organization Chart for Divisiona Organization Structure and a divisiona supervisor. Matrix structure is aso possibe at the crosssection of function geography or division-geography. Matrix structure evoved in 1960s from US aerospace industry but became widespread by 1980 s. The advantage of the matrix structure ies in its abiity to reconcie strategic priorities of profitabiity and growth. The divisiona authority heps growth through market aignment whie functiona infuence drives cost synergies internay and boosts profitabiity. The disadvantage of the matrix structure is the confusion in the mind of an empoyee due to two bosses. In practice, organizations keep the more prominent reporting Consuting Enterprise Appication Services Appication Deveopment & Maintenance Testing Horizonta Service Lines Industry Verticas Manu Banking & Teecom Retai & Energy & facturing Insurance & IT FMCG Utiities Figure 4: Matrix Structure of a Software Services Organization 4 Apri 2012 NHRD Network Journa

13 reationship as the soid ine reporting whie the ess prominent as the dotted ine reporting. The major management chaenge in the matrix is not structura but cutura. The matrix organization requires a heathy coaborative cuture to constructivey resove tensions between the vertica functions and the horizonta product divisions. Career movements of executives across functions, divisions and geographies can hep to buid a borderess mind set needed to make matrix organization successfu. e. Process based organization structure Process based organization structure invoves teams with end-to-end responsibiity for certain processes in workfow. Japan s runaway success in 1980s in improving quaity by empoying process centric teams caught the attention of the management word to the potentia advantages of process based organization. In 1990s, the reengineering movement brought the process to the centre stage and chaenged the traditiona functiona/ divisiona structures. The advantage of the process based organization is the improvement in customer service quaity since the process based organization ensures better accountabiity and end-to-end coaboration necessary for resoution of customer issues. Since non-vaue added processes are obiterated in the process based structure the cost is optimized. The BPO industry in India is an offshoot of the process based structures. The process based organization is often criticised for being impersona. This is argey due to the misuse of business process reengineering (BPR) concept by many Western corporations to justify mass ayoffs in 1990s. In our view, the process based organization is the best in executing a strategy focused on profitabiity objective. The process based structure heps efficient utiisation of resources whie ensuring quaity to the customer. It aso supports deveopment of broad based probem soving skis among professionas rather than ony the functiona skis. f. Customer based organization structure Customer based organization structure invoves departmentaisation around customers. In B2B industries, where arge customers require dedicated service and attention, the customer based organization structure is empoyed. Aso in B2C industries where different customer segments have markedy different needs, customer based organization is used to customise the offering to these segments. Organizations in professiona service industries such as software services and consuting design their business units according to the cient industries and at times, even around individua cients. Figure 5: Organization Chart for Customer based Organization Apri 2012 NHRD Network Journa 5

14 In our view, the customer oriented organization structure is appropriate to execute growth strategy. In the strategic contexts where customer intimacy is the primary differentiator such as those organizations heaviy reiant on repeat business from customers, customer based structure is the best suited to estabish this intimacy. 3. The effect of strategic context on organization structure The strategic context of an organization affects the optima organization structure required to execute strategy. The strategic context of an organization depends on mutipe factors at organizationa, industry and economy eve. However, the most Org. Size Fexibe Functiona Structure Customer based Structure or Aggressive Matrix Structure with a Strong Divisiona / Geographica Axis Process based Structure or Conservative Matrix Structure with Strong Functiona Axis Transformationa Process Based or Customer Based Structure Start up Growth Steady State Decine Stage of Organizationa Maturity Figure 6: Appropriate Organization Structure for Various Strategic Contexts predictabe pattern can be observed in an organization s strategic priorities based on the stage in the organizationa ife cyce. In the start-up stage, resources are typicay scarce uness the venture is iberay funded by investors. Growth without burning cash is the strategic priority at this stage. To execute this strategy a fexibe functiona structure is appropriate. In this structure, whie every individua has a functiona focus area, she fexiby performs tasks in other functions on the need basis. This structura arrangement heps better utiisation of resources. The fat hierarchy which heps in this stage supports growth due to faster response time and fexibiity to the serve customers. In the growth stage, it is crucia to provide autonomy to the frontine staff and organizationa units so that restrictions do not come in the way of seizing growth opportunities. In this stage, an appropriate organization structure to execute strategy is the customer based structure or the matrix structure with prominent divisiona/ geographica axis. If the growth 6 Apri 2012 NHRD Network Journa

15 strategy invoves diversification to a competey unreated business, even greater autonomy is needed for the new business division. e.g. Indian software companies, whie starting consuting practices, provided a fair degree of autonomy to the consuting units so that they can grow without the constraints appicabe to their traditiona software deveopment business. In the steady state organizationa stage, the growth opportunities diminish and profitabiity becomes the major concern. The appropriate organization structure in this stage is a process based structure or the matrix structure with a strong functiona axis. The organization can aso benefit in this stage from the introduction of shared services concept to minimize the overhead costs. In the decine stage, arresting the decine in top ine and conserving profitabiity/ preventing osses are simutaneous strategic imperatives. There is no uxury to prioritise top ine over bottom ine or vice versa. According to us, the organizations can adopt at this stage the process based or the customer based structure or the combination of these two structures to revitaise themseves. The process based structure is idea for reducing cost and improving the profitabiity/ stemming osses. The customer based structure is good for improving the top ine. In our view, the process based and customer based structures enjoy inherent superiority over the traditiona simpe or matrix structures. Whie the process based or customer based structures may become uttery necessary to savage the situation in the decine stage, their adoption in the earier stages can eevate the organizationa performance to higher eve by heping superior strategy execution. 4. Roadmap to design and modify organization structure For deveoping an organization structure capabe of executing the business strategy, it is important for the organizationa designer to have the carity about the fundamenta business drivers. It s not unusua for different parts of the business to have different business drivers. E.g. a arge Indian IT services company had its business from the geographies except Japan organized into the verticas according to the customer industry. Due to distinctiveness of the Japanese anguage and its importance for doing business with Japanese cients, Japan was made a separate vertica. Often companies organize production/ operations function according to the product/ service ines whie organizing their saes function on geographica ines. In short, the organization designer has to understand the business so we that she can assess what structure may or may not work in the specific context. From time to time, when there is a major strategic shift in business it s advisabe to re-examine the organization structure and aign it to the changing needs of business. The changing strategic priorities impact the organization structure periodicay. In the words of a great business historian Afred Chander, Structure foows Strategy. When an IT company decides to move up the vaue chain from coding to consuting, the change necessitates new peope capabiities and aso new positions such as business consutants and strategic account managers with corresponding roes, responsibiities and KPIs. When a retai company predominanty operating grocery convenience stores decides to enter into uxury retai, it simiary requires a marked change in the structure. It s aso worthwhie to scrutinise the structure is when the business resuts Apri 2012 NHRD Network Journa 7

16 disappoint you despite seemingy good strategy and eadership in pace. When your profit margins appear consistenty thinner compared to the competitors especiay in a peope intensive business, a eader can ook at the comparative organization structures and assess if there is any buge in organization structure verticay at any hierarchica eve or horizontay in a particuar function resuting into a cost there disproportionate to the vaue created. Simiary, if your organization weathers the downsides of the economic cyces we but repeatedy stumbes in capturing the upside of the recovery, you need to examine whether you provide enough autonomy to various business units and frontine staff to take advantage of the growth opportunities. Aong with the content of the structure, the change management process is very crucia whie modifying the structure. It s important to manage the peope dynamics of the structura change. If certain structura change adversey affects any of your star empoyees, you need to proactivey deveop a retention pan to mitigate the impact on them and engage them before announcing the change. Aso for the overa organizationa morae during the structura change, the importance of cear, transparent and positive organization wide communication cannot be overemphasized. It is aso crucia to read and understand the agendas of the key payers in pushing the structure change. New chief executives typicay push for organizationa restructuring immediatey after taking charge. More than organizationa interests, often they are driven by urge to put their own stamp on the organization and gain persona oyaty by shaking the organization and creating fear. If in the Board s professiona judgment, the change is not in the interest of the organization, no eader shoud be aowed to disturb the appecart on persona whims. 5. Emerging Trends and the Future of Organization Structure There are four forces which are shaping the emerging trends and ikey to ater the future of organization structure - gobaisation, technoogy, reguations and workforce demographics. First, the gobaisation is making the taent gobay mobie. If your organization has operations in mutipe countries, this means you need to think about creating seamess goba process based and customer based structures instead of keeping the country operations as separate isands. Even if you are a nationa payer, it wi provide opportunity to attract goba taent and access their expertise. To do so effectivey, we need to be creative in assimiating the expat taent into organization structure through advisory roes in the structure or if the expats are in executive roes, creating shadow positions in which the oca taent can earn and acquire new competencies. Second, the technoogy is atering the organizationa andscape in a big way. With the rise of onine communities around projects and socia networking, new ways of organizing the work are becoming more prominent. As a consequence, the core of an organization is going to become smaer in future and the shift towards greater reiance on the temporary/ externa taent in the ecosystem is going to acceerate. With the rising importance of socia networking in a spheres of economic ife, the network structure wi pay a greater roe in the organizationa decision making compementing the traditiona hierarchica structures. The network based structures, which are currenty into periphera industries of economy such as network marketing and open source software deveopment, may become widespread. 8 Apri 2012 NHRD Network Journa

17 Third, the reguatory changes in various countries throughout the word wi aso affect strategies and structures designed to execute them. There is an apt saying that the strategy begins where the aw ends. Corporate governance of pubic imited companies is becoming ever more important for reguators wordwide. To enforce new reguations for corporate governance, eaborate new machinery may become necessary in organizationa structures ike what happened in case of Sarbanes-Oxey Act in US. Certain reguations appicabe to macroeconomicay vita industries ike banking and auditing had earier mandated Chinese was between the businesses with potentia conficts of interests e.g. commercia and investment banking or auditing and consuting. Such reguatory restrictions on size and scope of organizations may come back to constrain structura aternatives for organizationa designers in these industries. Finay, demographics too wi significanty impact the organization structures. Especiay in India, we have a new workforce with youngsters who are not ready to be cogs in the whees for a their ives. They have unprecedented aspirations and opportunities. If we have to execute any strategy by engaging this workforce, the organization structures need to act ess as command and contro top down structures and resembe more ike a network of conduits through which peope can navigate their career journeys. To survive and thrive in the changing business andscape amidst simutaneous shifts in gobaization, technoogy, reguatory environment and workforce demography, organizations wi adopt innovative strategies and nove structures to execute them. As business eaders, HR professionas, consutants, academicians and students, we need to continuousy keep an eye on these deveopments to remain current and reevant. References: Bartett, C. & Ghosha, S. (1990) Matrix Management: not a Structure, a frame of mind, Harvard Business Review68(4): Chander A. (1962) Strategy and Structure: Chapters in the History of American Industria Enterprise, Press, Boston: US. Gabraith, J.; Downey, D. and Kates, A. (2002) Designing Dynamic Organizations: A Hands on Guide for Leaders at A Leves, New York: US. Nader, D.; Tushman, M. and Nader, M. (1997) Competing by Design: The Power of Organizationa Architecture, University Press, Oxford: UK. Apri 2012 NHRD Network Journa 9

18 STRATEGY AHEAD-FUTURE ORGANIZATION STRUCTURES BRIJENDU GUPTA Abstract The author starts off on a note briefing about the interreation between organization structure, cuture, management processes, technoogy, organization's strategy and it's peope. He then goes on to expain about the difference between an organization structure and an organization. The artice further provides information on the strategies for future organization structure. The author concudes that High speed information, knowedge fow, individua and innovative on the job earning and fexibiity at workpace wi be crucia strategies for success. About the Author Brijendu Gupta heads the Learning and Deveopment function at PricewaterhouseCoopers. He has rich experience in saes, operations, business deveopment, earning and organizationa deveopment in organizations ike Godrej & Boyce Mfg. Co. Ltd, Hindustan Lever Ltd., Redington India Ltd, and Wipro Ltd. Taent assessment, deveopment, coaching and mentoring are his areas of interest. He has contributed to the fied of coaching and mentoring by pubishing papers and practicing at work. Introduction The foowing figure depicts the interreation between organization structure, cuture, management processes, technoogy, organization's strategy and its peope. It sums up the key message of the topic. Organisation s Strategy Organisation Structure and Corporate Cuture Management Processes Individuas and Roes Technoogy Leavitt's Baancing Act (adjusted) cited in Inventing the Organizations of the 21st Century, pp.314 Organization: The essence of the definition of organization as written by countess authors is they are entities where some sort of structure, system exists and there are peope who perform within those structures and systems to achieve specific goas. Therefore it is cear that a structure or system to work, peope are the key. If we ook up any management book we wi find the suffixes to the word Organization ike Organizationa Behaviour, Organizationa Theory, etc. Refecting back three and a haf decades I now can reate it to the organization that existed in the boarding schoo where I have spent 7 invauabe years of my ife. 10 Apri 2012 NHRD Network Journa

19 Spread over 150 acres, the Ramakrishna Mission Ashrama, Narendrapur, to me, is one of the most intriguing organizations I have ever experienced. Rigid yet fexibe, high on standardisation yet innovative, we-defined structure are some of the characteristics that appeaed to me. The organizationa vaues imbibed in the teaching staff, non-teaching staff and the "Sanyasis" are exempary. Discipine was the non-negotiabe aspect of our daiy hoste ife. Right from morning ti night, ife used to be guided by bes, which incuded starting the day with the `morningbe,' foowed by the `physica training be', the `study' be and finay the `ights off' be. Inspite of a these bes there used to be time to study, pay, participate in extra curricuar activities ike, debate, quiz, and music etc. competitions. There was never scarcity of time. Vaues of sharing, caring, heping others, respect for others were so important and practiced that they wi remain with me ti I remain. The dreaded 'morning be' after decades has become so vauabe that I fee ucky to be part of that rigid organization. Vauing human being irrespective of their status, the vaue of the rigidity, the technique of managing time not competing with it, upon refection makes me wonder as to why that after I eft this organization I did not aow the bes to continue to guide my ife.i have now been competing with time and hence compain that there is no time! In strongy fee, therefore, if organizations exist there shoud be some rigidity as they deveop the vaue systems of the individuas. This is appicabe in our persona and professiona ives as we. However, one shoud earn to enjoy the rigidity of the organization and that shoud refect in the individua's behaviour Whether the boundaries are to be vast or narrow is what the organizations need to determine. The structure of the organization therefore determines the boundaries. Organization Structure A eaf from the book woud define an effective organization structure and design as one that attempts to optimise the performance of the organization and its members by the most appropriate use of the resources (e.g. money, materia, peope) to achieve the goa. It appears that efficient structure heps achievement of organizationa goas through panning, decision making, reduction in conficts across departments and increase in carity across functions. My journey in the corporate word began in From 1987 ti 2000 the reporting structure was very simpe. A few of my coeagues and I reported to one boss. A few of those bosses reported to one super boss.in the eary part of the year 2000,for the first time I was exposed to terms ike "dotted ine", "direct ine", "vertica" and "horizonta". I took sometime to understand who is the dotted ine boss and who is the direct ine boss, what is a vertica and what is a horizonta.i came to know thatorganizationsaso foowed a few other structures such as: a) Functiona based on the functions ike production, finance, saes etc. b) Divisiona which are sef-contained profit centres which has their own interna structure. c) Matrix structure where peope and activities are grouped in mutifunctiona teams according to the project or contract. So an individua reports into two or three bosses. d) Strategic aiances and joint ventures. For instance, in 1997 Microsoft and Appe, ong time competitors announced a five-year aiance to work on deveoping a Macintosh compatibe version of MS Office. Apri 2012 NHRD Network Journa 11

20 e) Mutinationa, Goba, Goca- Organizations operating in mutipe countries with headquarters in one and or mutipe countries. So there is a goba and oca cuture prevaent. f) Network and virtua organizationsnetwork of peope or organizations, often operating at a distance, coaborating on work and sighty different in characteristics than strategic aiances f) Hybrid which is a combination of functiona, divisiona, network etc. g) Line or Staff, Fat or ta, Centraised or decentraised The two otherinteresting structures that I came across which I had never heard before are "spaghetti" which indicates boundaryess and "amoeba" which suggests a structure that takes various shapes depending on the work. There coud be many more innovative designs but the question is how does one make the best use of a the organizationa designs and structures that have been suggested by various experts? In the artice Organigraphs: Drawing how companies reay work, Mintzberg and Ludo Van der Heyden highighted that Organigraphs have been abe to demonstrate how an organization works, depicting critica interactions among peope, products and information. Executives have used Organigraphs to stimuate conversations about how best to manage their operations and which strategic options make the most sense. It is much ike a map to the hiker and in this case to the executives in the organization. My firm beief is organization structure in some form or other wi remain as ong as organizations exists but the key to an organization's success woud be the kind of conversation that is happening within the ayers. If the gass house in the top does not know what is happening in the basement, the structure is bound to coapse. We have to refer to the diagram in the first page again. A structure is no good if we do not vaue the peope in them. What kind of emotiona attachment are eaders and members exchanging among themseves? Transparency, sensitivity to others, stepping into each other's shoes, an atmosphere that enhances a sense of beonging wi be far reaching than monetary inducements. So a efforts shoud be to foster energy and vigour among the peope and this is ikey to enhance the positive affectivity of the human capita. Strategies for the Future My nephew turned 10 in the month of January. On his birthday I caed to wish him and enquired about the gifts he had received. He repied that his parents had given him a computer and that they had contributed some money to the "Make a Wish" foundation for chidren suffering from cancer. Then he went on to share his own feeings of what he fet when he saw a two year od chid suffering from Leukaemia and how he wanted to make an effort to fufi his wish. It was with great difficuty me and my wife hed back our tears. And then here was a reveation for me. I wondered as to how a ten year od coud express his feeings for another chid with so much carity and empathy. I am quite sure that by now he must have surfed through a the information avaiabe on Leukaemia and even done a project on it. As parents we shoud earn to begin to cope with the chidren of the 21st Century.With hunger for knowedge manifod and with tonnes of information, after years he wi join the workforce. Organizations must aow seamess fow of information and encourage dissemination of knowedge that woud make the firm successfu which means unhindered 12 Apri 2012 NHRD Network Journa

21 sociaising at workpace by aowing virtua or physica "gup-shup" at workpace. It woud be a basic requirement to aow freedom to use "Facebook", "YouTube" etc., or "brew a storm over a tea-cup". We shoud devise strategies aong with business heads to make this happen. However organizationa and individua vaue systems must maintain the sanity and purity of this freedom. Empoyees shoud be increasingy trained on ethics and compiance practices and business eaders shoud spend significant time ony in ethica governance. If not, future generation workforce wi choke from information overoad and might take wrong steps in their journey. If we ook up any intergenerationa study done by some organizations (see reference) we wi find a few very interesting factors. For instance, fexibiity at workpace, high sef reiabiity, opportunity to earn and grow continuousy and most importanty opportunity to work with coaches and mentors for individuaised deveopment are some of the most highy vaued choices by the 21st century workforce."fexitime", "work from home" etc faciities wi not add to empoyee deight as they wi become a basic expectation. Corporate India wi need a huge shift in mindset but the best thing that wi happen is "trust-factor" between peope wi go up. As human resource professionas we have a very chaenging task to be the change agents in this process. On the job earning wi be the most beneficia and effective way of fostering knowedge and estabishing organizationa vaues and cuture.organizations need to provide opportunities to earn whie working. Individua coaching and mentoring wi be the preferred way of deveoping human capita.managers wi continue to pay a very important roe in the ife of their peope. Managers who wi be skied in coaching and mentoring wi be the most successfu in deveoping empoyee connect. There are penty of books and artices on why managers shoud or shoud not be coaches and mentors of their own peope but reaity is managers have a huge responsibiity of empoyee deveopment.manageria coaching and mentoring wi generate intense and meaningfu conversation between the ayers in the structure and as I mentioned before enhance "trust factor". Human Resource professionas have to become the most competent architects. We have to design structures where the ayers between the "gass ceiing" and the ground foor wi be at most one or two which means organizations wi become fatter and fatter. We have to create structures where boundary was between departments or individua cubices wi vanish. Work environment wi be "without boundaries". As human resource professionas our mindset shoud change first to pay the game in tandem then ony we wi be abe to face the chaenges ahead of us. In the book Inventing the Organizations of the 21st Century,Thomas Maone and Robert Laubacher expored some scenarios of the future. They coined a term e-ance economy which means eectronicay connected freeancers. Internet is given as an exampe of a vast goba system with no centra eadership that is enabed by a handfu of simpe technica standards. Managing in an e-ance word wi invove infuencing and coordinating networks with no rea contro. There wi sti be need of managers though but the competence required woud be very different. Inside the firm, skied workforce wi increasingy operate more autonomousy reying on extensive inks with coeagues inside the organizations and externay with customers and partners. In some cases sma teams and independent e-ancers, coaborating on a Apri 2012 NHRD Network Journa 13

22 project basis wi constitute a temporary firm which wi dissove as soon as the work wi compete. Technoogy wi connect these networks. Concusion Strategising for the future appears chaenging for the strategists. Within existing structures and frameworks, the key to success woud be nimbeness. High speed information and knowedge fow, individua and innovative on the job earning opportunities and fexibiity at workpace wi be crucia strategies for success. Whether we ike it or not, we earn a ot from our supervisors at work pace. The boundaries between the strategists and the peope for whom strategies are framed need to be burred and a mindset of incusion needs to be brought in. Unconditiona trust and creating vaue for peope organizationa members woud be the "mantra" for success. Structuring organizations and creating a poo of inteigent, pusating and engaged workforce coudn't be more chaenging than what it is now. Reference: Cuniffe, A.L. Organization Theory. Sage Course Companion. Sage, 2008, pp. 4, 25, Ha, D.T., (1996). Protean Careers of the 21st century. Academy of Management Executive, Vo. 10, No. 4, pp Ha, D.T., (2004). The Protean career: A quarter-century journey. Journa of Vocationa Behavior, Vo. 65, pp Indira Gandhi Open University (2011) Masters in Business Administration, Human Resources, Managing Change in Organizations, Emerging forms of organizationa structure, retrieved on 3rd Feb, 2012 from Unit-5.pdf. Maone, T. J., Laubacher, R., Morton, M. S. S., Inventing the organizations of the 21st Century. Pearson Education, 2004, pp. 20, 21, 314. Managing Tomorrow's Peope, Mienias at work: Perspectives from a new generation. Mintzberg, H., Ludo Van der H., (1999). Organigraphs: Drawing How Companies Reay Work. Harvard Business Review, September- October, pp Apri 2012 NHRD Network Journa

23 ORGANIZATION STRUCTURES OF THE FUTURE Dr. SRIPADA CHANDRASEKHAR and SHIBEN MOITRA Abstract Powered by technoogy and fueed by gobaisation, both work forms and empoyment modes wi see radica changes in the next decade. Temporary workers and part time free ancers wi provide expertise based work through a goba virtua poo of taent warehouse. A this wi bring about fundamenta changes to organization structures. In fact organizations wi be more unstructured in future aowing for forms and processes to constanty morph to suit the unpredictabe and ad-hoc needs of times to come. Organization structures wi, at their best, support a oose assemby of federated, distributed, virtua, manager-ess experts and service providers to come together, render a task and dissove. A this wi ca for new skis among eaders and the HR professionas to coach the new eader. About the Author Dr. Sripada Chandrasekhar is VP and Head of HR at IBM in India/ South Asia. He has over two and haf decades of executive experience in HR practice across Pubic, Private and MNC s in India. Associated with severa new generation HR practices, his thought eadership in HR practices paces him amongst the top eague HR eaders in India. Shiben Moitra is Dy Genera Manager HR in IBM India. He is currenty responsibe for a the HR functions and is a Management team member of IBM Netso. He has more than 10 years of experience in Human Resources, having worked in L&T and Wipro in India, Midde East and Asia Pacific. Shiben is a management graduate from SIBM- Pune. He is activey invoved in curricuum deveopment and is a visiting facuty in management institutions. The word is getting more and more interdependent and boundary ess in this century and so wi force changes to the way work is done in future. This in turn wi bring fundamenta changes to organization structures in future. Whie it is difficut to gaze into the very distant future, the next ten years, say, unti 2020 are reativey easier to foresee. In this artice we have endeavoured to: Anayse major goba trends that wi shape the next decade Understand how these key trends wi shape the organization structures Forecast the skis needed by the HR professionas to cope with the new era Key goba trends that wi shape our future and work In the next decade, the interdependence of different spheres in the word affairs wi be even more manifest. We have tried to ook at five distinct areas we beieve wi Apri 2012 NHRD Network Journa 15

24 fundamentay change the way work wi be done in These areas are: Gobaisation of Economy Shifting Demographic patterns Advancements in Science and technoogy Improvements in Medica science and human body Increased focus on Sustainabiity On the economic front, the word economy is gobaizing and going through a sea change which wi continue ti 2020 and beyond. The word economy wi be two-thirds bigger in 2020 than in Deveoped economies continue to grow marginay or negativey whie BRIC nations wi become a dominant force in the word economy. China and India wi make Asia the economic super power. With shift in economic powers, new mega cities wi emerge and it ikey to have a strong infuence on where goba organizations wi do business in tomorrow s word. Share of word GDP in 2020 (Source: Economist Inteigence Unit) The demographic pattern in workforce is shifting and wi continue to do so in the near future. On an overa term, workforce in western deveoped nations is aging, whie the workforce in Midde East, Asia and South America are growing and getting younger. Therefore it is expected that there wi be abour movements and goba abour suppy wi come from the demographicay young Asian markets. Science and technoogy wi take giant eaps. Advancements in the areas of Biotech, Automation and InfoTech and emerging sciences ike Nanotech wi acceerate significanty and in conjunction with each other, make significant changes to the word of work. In the next decade, advancements in Supercomputing and Hyper-connectivity wi change the way work is deivered. Over the next decade, advancements in Medicine, Pharmaceutics and the Human Body wi hep a arge number of physicay chaenged enter workforce and oder workers continuing to work. For exampe, Prostheses (synthetic body parts or repacements) with more targeted drug treatments wi ead to radica improvements for peope who are injured, impaired, or have otherwise degraded physica or physioogica capabiities. Human ife span wi rise dramaticay, creating possibiities for oder workers to continue to contribute. Sustainabiity wi become the key goba charter as the word gets more resource constrained. Corporate need of ow carbon footprints couped with traffic congestions and technoogy improvements ike Tee presence and Video Conferencing, wi mean more work wi be done from home or from nearest centers, thus reducing office and commuting costs. How the key trends shapes the organization structures of the future These changes, mosty in interaction with one another, wi have an impact on the key aspects of organization structure in future Workforce structure Management structure Leadership structure Governance structure The workforce structure: Eements of workforce structure ike Nature of workforce and Workpace practices are predicted to become competey unstructured in future. 16 Apri 2012 NHRD Network Journa

25 On the Nature of workforce, traditiona concepts of empoyees as taent in organizations wi perish and taent as a virtua poo wi emerge. Advancements in technoogy aong with the need of Gen Y wi enabe very different empoyment modes in the future. Methodoogies of how we source taent, assign resources and evauate work are expected to change. Traditiona fu- and part-time empoyees, individua freeancers and temporary agency contractors wi tap into a goba virtua taent poo. These free ancers and contractors work very differenty from the way traditiona fu and part time empoyees work today. These future virtua taent poo members wi be certified as experts in a variety of areas so companies can hire them on a pug and pay mode, whenever and wherever needed. Preference of speciaisation in one particuar area of expertise and se that expertise to more than one organization impies the emergence of speciaists versus today s generaists, which wi in effect accentuate the virtua taent poo mode. With opportunities to work part-time or from home, the aging workforce is expected to work we beyond 60. On the other hand incusion of younger workforce wi impy that there wi be potentiay four generationa cohorts in the workforce. A picture of the future workpace is where a Baby Boomer work even after retirement, Gen X takes eadership positions, Gen Y become managers/entrepreneurs and the next generation or Gen Z joins the workforce. An interesting scenario is where Gen X manager has a team constituting of Gen Y, Gen Z and retired yet working Baby boom freeancer. Gen Y workers reverse mentoring his/ her Gen X manager may become quite common pace. Work stye adjustments wi be required particuary from Gen X Leaders. As a resut, the workpace wi get more heterogeneous not ony sexuay, raciay and cuturay but aso in terms of distribution of age which wi ead to both innovation and conficts. By the year 2020 thanks to supercomputing, a new breed of Non- Human workforce, is ikey to emerge. Supercomputing wi ensure that an eectronic system wi be abe to take part in a five-minute conversation with an individua so convincing that the person coud not determine whether s/he was taking to another human being or a machine. These human ike machines wi hep do a ot of routine human tasks. IBM s Watson is an exampe of this amazing Non-Human workforce. Watson, among other things, is a question answering (QA) computing system buit by IBM. IBM describes it as an appication of advanced Natura Language Processing, Information Retrieva, Knowedge Representation and Reasoning, and Machine Learning technoogies to the fied of open domain question answering which is buit on IBM s DeepQA technoogy for hypothesis generation, massive evidence gathering, anaysis, and scoring. In future, Watson has amazing possibiities, for exampe its capabiities may be utiised as a cinica decision support system to aid the diagnosis and treatment of patients. Appications of Watson wi definitey be visibe in This wi trigger significant up skiing amongst the workforce. On the Workpace practices front, the traditiona 9 to 5 work environment wi shift towards 24x7, driven by empoyee need of fexi schedues. Work Option Fexibiity in the form of Individuaised work schedue, part-time reduced work schedue, compressed fexibe work week, mobie / teecommuter, work-at-home wi gain prominence. Customised individua Apri 2012 NHRD Network Journa 17

26 mobiity pans, customised retirement pans and ate career options wi mark workforce fexibiity. There wi be a wordwide, broadband network of networks based on fiber optics and increasing number of devices wi dawn an era of Hyper-connectivity. In the hyper-connected workpace, socia networking wi gain a ot of importance. Management structure Impications of changes in the word economic and demographic front are mutifarious and wi manifest in changed management structures in future. For exampe, emergence of Asian nations over the ast few years and ti 2020 means a significant shift in the cities once considered to be the most highy popuated in the word. Many traditiona business hubs such as Paris, London, and Moscow, wi be dwarfed in popuation size by Mumbai, Dehi, and Dhaka. Additionay with western markets not growing fast enough and high domestic consumption in BRIC nations, arge western corporations wi open second or mutipe headquarters and shift their senior professionas, coser to their markets in BRIC and Asian countries. Corporate HQs wi be distributed, an exampe being Marketing headquartered in China, HR in India, Finance in US and Quaity in UK. Large muti-nationa corporations wi become Gobay Integrated Enterprises and continue to pursue new goas, that of integration of production and vaue deivery wordwide. Popuation growth in India and China wi pose significant infrastructure chaenges. Non-avaiabiity of office space and difficuty of commutation in arge cities wi drive corporations to move to unexpored tier 2 and 3 cities with avaiabiity of taent. Changes in the nature of work and empoyment give rise to significant questions about the nature of management structure required in the fexibe organization. Managing remote workers wi be quite different from the traditiona roes of management and eadership. Simiary, managing fexibe abour characterised by teeworkers, free-ancers and taent communities wi require a different approach from that adopted in traditiona empoyment. It is evident that management structure wi be fatter and virtua. Hierarchy wi vanish. Organizations wi have fewer eves of management, with workers empowered to make decisions. Accompishing tasks through informa infuences wi become more important than forma hierarchy. Leadership structure: With workforce being an outsourced virtua taent poo with itte supervision, and working remotey from home, eadership structure wi shift away from direction, contro and hand hoding. It wi focus more on how the distributed temporary workers are aigned to the goas of the organization and how we do we get these convenience based arrangements of work share the broader ethica and vaues issues of the organization. Leadership characteristics and capabiities wi evove. Whie the focus of today s eaders is about eading or managing a task, future eaders wi tend to focus ess on the process and more on the purpose. Governance structure A ot of the current organization structure is created to provide strong governanceboth interna and externa. With businesses becoming truy goba in nature, significant changes are expected in the poitica and reguatory environment across the gobe. 18 Apri 2012 NHRD Network Journa

27 Through the mirace of enterprise software, reguators and top government officias can watch rea time dashboards and respond with speed previousy unheard of. Increased cooperation within bocks of nations wi ower reguations over abor contros, taxation, empoyment quotas and information/data privacy aws. Standardisation of educationa credentia is expected, further aiding goba mobiity. However with the need of workforce mobiity increasing, carity is sti awaited on whether governments across the word wi move towards a Visa ess federation, consider tax reciprocity etc. Internay within organizations, governance wi be more embedded in the work contracts and wi morph into greater sef-reguation. Gary Hame (Harvard Business Review, December 2011) presents an over view of the future manager-ess organization as seen in the exampe of Morning star a eading food processor. In this we-known HBR artice Gary describes how at Morning Star no one has bosses, everyone can spend company money, there are no tites and no promotions and empoyees can negotiate responsibiities with their peers. Such is the future, we beieve wi come upon us in the next decade and there wi be many more Morning Stars turning conventiona governance upside down. What does this mean for companies in India? The changing future of work is a goba trend and wi sweep across a three types of companies based in India, viz. pure pay Indian companies, Gobay Integrated Enterprises (GIE)/muti-nationas and Captive centers. This wi forever change the way work is traditionay done in India. To take a few exampes, work from home, teecommuting etc. wi be norma and the mantra wi be Work is something you do not something you trave to. Companies with 6 day working wi find it difficut to convince empoyees to work on Saturdays. Due to socio-economic reasons, getting women to work particuary in India has been a chaenge. With increased focus, this wi however see a marked improvement in organizations across a eves. Traditionay the hamark of a good job in India was summarised by Payment (grade based equitabe saary), Promotions (seniority based) and Pensions (peacefu retired ife). However the future is changing and it wi move to differentiated compensation, taent based promotions and a part timed working retired ife. Goba Taent poo wi gain popuarity. Today many goba companies find it difficut to convince western Subject Matter Experts (SMEs) to trave for fu time assignments to India. However with the goba taent poo concept gaining popuarity, SMEs can contribute to work deivered from India without traveing. Fueed by severe infrastructure botte necks and avaiabiity of taent, many companies wi move towards smaer cities in India e.g. Vizag, Bhopa, Coimbatore etc. Large goba corporations wi move significant portion of their operations to India. Companies may set up second Head Quarter in Dehi, Mumbai or Bangaore and pace their senior most executives in India. Many traditiona Indian companies comfortabe with hierarchy and rigid reporting styes wi find it difficut to adjust to a fatter and virtua structure. Aready many companies have defined their maximum permitted ayer from the eve of CEO to a fresher to be 10. Granting autonomy and decentraising decision making wi require a more matured management. In many goba companies, Apri 2012 NHRD Network Journa 19

28 we may quite often find an Indian mentor mentoring their western counterparts. Progressive Indian companies with an appetite of going goba wi induct empoyees and free ancers from many nationaities, party driven by reguatory norms and party by their incusive agenda. At interna governance eve, with incongruent stake hoder interests, nonmeasurabe outcomes, and wide geographic distances, companies in India wi have to set up a very different governance structure. For reguators and those in government, the dearth of empoyabe taent in India and the increasing abor cost wi pose a big chaenge to keep India a competitive business destination. So the future of workpace in India ooks quite exciting and very differenty structured than it is today. Skis needed by the HR professionas to ead this new era Therefore eading in the new era wi demand a new set of competencies from HR professionas. Expertise based Leadership HR professionas must be thought eaders in the HR domain. They must be abe to anticipate key trends that affect the way work is changing. Agiity within new Cutures and Environment - HR professionas wi need to deveop intercutura sensitivity and be abe to work in cross generation set-ups. New networking skis wi be essentia in the hyper-connected word. HR professionas wi need to move to vaue added work as many routine work ike HR Hepdesk, coordination wi be taken over by supercomputers. Abiity to execute projects by drawing virtua taent poos and working through virtua organization structures wi be essentia. Embracing technoogy HR professionas must be abe to anayse data and buid HR business pans. Can HR professionas create and oversee work through an integrated dash board comprised of an individua s externa reationships, academic credentias, skis, experience, resuts etc. Integrity in a forums HR professionas must demonstrate the highest form of integrity. Reputation of HR professionas in the form of digita reputation foot print wi be avaiabe onine. Coaching new eaders As eaders of future wi strugge with managing impermanent workers oosey connected to the organizations; they wi depend on HR for greater coaching and best practice guidance. HR professionas must earn to hep and hand hod the new eaders rise up to their new tasks. Thus just in next 10 years we are ikey to see quantum shifts in the way work is deivered and consequenty the way organizations are structured. In many ways structure itsef wi be rendered irreevant in times to come. The future ooks more unstructured and therefore organizations wi be ess structured in future. At their best organization structures of the future wi support oose assembies of federated and distributed work units in the virtua space. Bibiography: Hudson Institute Beyond workforce India s new opportunity:2020 AIMA report The Manager of the 21st Century BCG report Economist Inteigence Unit 20 Apri 2012 NHRD Network Journa

29 STRUCTURE AND THE VIRTUOUS SPIRAL ESTER MARTINEZ Abstract This artice provides an insight view on the emerging trends and deveopments and the technica advancements and how it is affecting the desgning of the organizationa structures, it shows ight on discovering and nurturing the organizationa competencies. It then gives an iustrated case on Reiance Industries: Project Management at the core of the structure and then goes on to concude on creating the right structures. About the Author Ester Martinez is Founder and Managing Editor at Peope Matters. A postgraduate from Indian Schoo of Business (ISB Hyderabad) and with more than 15 years of experience in HR in companies ike HP and TCS. Capabiity, core competence and the increasing roe of intangibes are at the heart of business success and sustainabiity. Structures shoud nurture these sources of competitive advantage. Emerging economies today present a compex andscape of immense opportunity, disruptive ow-cost innovation and rapid power shifts, in the backdrop of hitherto unknown constraints and cut throat competition. Business eaders can thrive by viewing their business ess in terms of products, services or processes and more in terms of deivery capabiity & competencies - known and hidden - within their organizations and buiding structures to strengthen these differentias. Competitive advantage does not come from imitation but from identifying emerging competencies and buiding them into capabiities. Such disproportionate advantages are hard-to-imitate ways in which an organization differs from its competitors - differences that coud utimatey bring immense economic benefit. They may consist of deiverabes (such as compex project execution that infrastructure eader L&T can deiver), reationships and partnerships (such as Tata Group's network spanning generations, industries and countries), processes, skis and knowedge (as with BPO sector eader Genpact)-provided competitors cannot imitate these within practica time and cost constraints. In fact, such competencies, because of their subtety, award a head start and discourage imitation, and give the company a sustainabe edge over competitors. The idea of Core Competence was first put forth by Hame and Prasad in 1990, when Apri 2012 NHRD Network Journa 21

30 they outined what makes up the concept of core competence. It provides customer benefits, is hard for competitors to imitate and can be everaged across products and markets. Increasingy, the competencies that afford companies such sustainabe edge over rivas are moving from the ream of tangibes to intangibes. Over the ast coupe of decades, many of the traditiona tangibe sources of competitive advantage - technoogy, access to capita and product deveopment have become commoditised in most industries and the source of competitive advantage has shifted to the intangibe strengths of an organization ike organizationa speed, cuture and peope. Competitive edge wi emerge from intangibes ike organizationa rhythm, responsiveness, and peope exceence. In the past, core competency used to emerge from tangibes ike technoogy, product road-map and quaity contro. Today, a these tangibes are repicabe by competitors across the word. Competitors cannot reay repicate intangibes because there is a high eve of ambiguity on how they are buit. Paradoxicay, a continuous and intimate connection with the market and with customers is vita for identifying these core competencies. First, companies have to understand the competition in order to know how they are unique. More importanty, they need to track customer reactions to discover which competencies are reevant. It is this abiity to constanty everage on the intersection between the company's emerging competencies and the opportunities in the marketpace that is the fundamenta strength of organizations based on capabiities. Later, structures wi need to be buit to aow the capabiities to transate into sustainabe business resuts. In this context, it becomes crucia for eaders and organizations to constanty ook for emerging competencies, shortist ones that coud be buit into marketbeating capabiities, nurture these by buiding organizationa structures and processes around them and finay, pursue market opportunities that buid and everage on these capabiities. And even more so for arge organizations. 'Discovering' and nurturing competencies To do we, companies need to deveop important capabiities or resources that their rivas cannot. It is, however, hard for them to deveop these resources uness they aready have some reaised or potentia edge. The first step ies in discovering the competencies that underie that edge and the second one is to create a structure that nurtures those competencies. In a recent interaction Phanish Puranam from the London Business Schoo, shared his thoughts of how capabiities can be buit by design but some emerge through serendipity. A ca centre may discover that in anaysingca voume, they have the seeding of a data anaytics capabiity. An IT outsourcer may find that they have earnt enough about their cient's business to be abe to offer business consuting advice. This happens a the time,he caims, because what peope earn and how this knowedge wi prove usefu is difficut to anticipate perfecty. But being abe to see it when it happens is vita as it can form the basis for differentiation within the same business or diversification into a new one. A good pace to begin the search for interna competencies is to find the more obvious externa ones-the reasons why cients and business gravitate to a company rather than its competitors. Managers might ook for the kinds of opportunities they can capture that their competitors cannot and vice versa. The most important 22 Apri 2012 NHRD Network Journa

31 way to identify competitive advantage is to ook outwards...tak to customers. If organizations understand why customers chose them to do business with over competitors, you have the most accurate response to the competency question. Competence search coud aso take pace inside a company. In many cases, the most usefu 'asymmetries' are buried deep within the organization and have to be traced back from surface eve abiities. This identification can take pace by spotting pre-existing but unexpoited assets or in an evoutionary manner that requires managers to recognise an emerging edge, mosty in intangibe assets such as knowedge, reationships, and reputation. There are many instances when market eaders fai to recognise their core offering, ike when Pepsi and Coke took a good many years to reaise their business was beverages and not coas - an oversight that saw them ose significant market share to iced teas, mik, juice and dairy brands. Organizations need to pick their core and create a strategy around it. The market can be viewed as a set of niches and opportunities that a company must choose Reiance Industries: Project Management at the core of the structure Few companies and individuas epitomise Indian business success as Reiance Industries and Dhirubhai Ambani. Armed with phenomena business acumen, impeccabe execution and fund-raising abiities, Dhirubhai buit Reiance into a business empire worth more than 100 biion doars in a period of just 40 years. Undoubtedy one of the greatest success stories in corporate history from any part of the word and an unparaeed baze of weath creation. A coser examination at these 40 years reveas a famiiar stye by which Dhirubhai 'out-strategised' the competition - Reiance woud enter an industry with excess capacity and word-cass technoogy, and then mop up a excess demand in the industry by providing the best quaity product at the owest industry margins. Whie this strategy per se was potentiay repicabe, number of companies incuding pubic sector companies tried to achieve ow costs by putting up high-scae pants and faied. Reiance's strategy worked because it was anchored in outstanding competencies. Reiance demonstrated the best project management abiities and it sti is a champion in executing arge-scae compex projects. Reiance structures were aso buit around those core competencies. The company virtuay pioneered raising ow-cost capita from broad-based equity markets in India and abroad. Further, it coud manage the reguatory environment, party through an extensive network and system for gathering and interpreting information - a key but often overooked component. And it coud move fast. The structure formed around those core competencies aowed Reiance to set up its word-cass pants of scae at the owest capita costs of any company in India. Ceary, Reiance's growth spira was buit on an iterative process. Its competencies in project management, finance mobiisation and infuencing the reguatory environment supported its high voume, ow-cost strategy buit on creating mega capacities. Each arge-scae project, in turn, aowed it to invest more in and deepen those competencies, thus preparing the company for even arger projects and greater cross-functiona coordination. Apri 2012 NHRD Network Journa 23

32 from to everage its capabiities in the most effective manner. Fundamenta to this is a deep-rooted understanding of what the company's core competencies are and where these competencies can be utiised for maximum economic benefit. At the end of the day, business sustainabiity is a about identifying the company's core competencies for which customers are wiing to pay and continue doing business, foowed by a reentess pursuit of opportunities in the market pace where these competencies can be everaged. It aso entais constanty ooking for emerging competencies within the organization that can expoit our view of externa opportunities and nurturing them by aigning peope, creating feedback mechanisms and institutionaizing knowedge. The imperative for eaders, senior managers and HR professionas is to continuousy map the externa word of customers and opportunities with the interna word of capabiities and manage change with the firm knowedge that their company's business is not defined by the products and services it deivers, but by the core deivery capabiity of their organization. Creating the right structures Competencies evove into sustainabe core capabiities argey through organizationa design, which buids and supports capabiities by embedding peope and processes into a cohesive configuration. This invoves a combination of aigning peope to everage on the competencies using the right reporting and reward structures, creating feedback mechanisms to reinforce organizationa understanding of competencies and institutionaising knowedge through earning and deveopment. Organizationa structure is the key to creating and sustaining capabiities according and the ine managers pay a crucia roe in this exercise. Line managers are utimatey owners of the organization's destiny. HR professionas are the architects who offer recommendation and technica inputs. Organization structures and processes shoud be designed around capabiities. At the heart of nurturing capabiities is the abiity to create an organization that is capabe of firmy capturing the essence of any competency and making it more vauabe to the organization than to its competitors. In this process to create structures and processes to maximize the core competencies, baancing between action and refection is an ongoing exercise and companies shoud buid mechanisms to encourage this baance. Training aso pays a crucia roe in consoidating knowedge within the organization and buiding an ecosystem of constant evoution. Utimatey, this process of designing structures, processes and poicies with the objective to nurture and institutionaise competencies is what resuts in the DNA of an organization. The right DNA for an organization is capabe of creating 'virtuous spiras' - a cyce of capabiity and aigned performance that enhances reputation, brings opportunities and creates resources to utimatey pough back into capabiity deveopment. Organizationa structure and design serve as a powerfu too in disseminating the capabiity within the organization and in everaging the capabiity across the right market opportunities. 24 Apri 2012 NHRD Network Journa

33 ORGANIZATIONAL STRUCTURE AND INNOVATION Dr. KEITH C D'SOUZA and ANJAN BHOWMICK Abstract The economic environment in India over the past coupe of decades compeed a shift in the business strategies of most business organizations, from a market push, to a market-pu based strategy. Whie earier demand was high and suppy scarce, the reversa of the trend to a high-suppy-ower-demand situation, has ed to a competitive environment, posing considerabe chaenges to business organizations. Faced with escaating customer expectations, organizations have had to go back to their drawing boards to anayse how to adjust quicky and adopt new ways to remain competitive. The view is cear: firms need to design structure, strategy and systems to insti a cuture of innovation to compete and perform in the market pace. About the Authors Dr. Keith C. D Souza, PGDIR&PM (XLRI), Feow (I'IMA) has thirty three years of experience covering academic teaching, research, consuting and administration, in management and human resource deveopment, and management eve empoyment in the corporate sector. Currenty, as Professor of Organizationa Behaviour at SPJIMR, Dr. D'Souza teaches various courses in the area of Organizationa Behaviour and Human Resource Management Anjan Bhowmick MPM (Symbiosis Institute of Business Management, Pune), Feow Student (Academy of HRD, Ahmedabad) has ten years of industry experience in Manufacturing and FMCG Sector aong with 3 years of part time experience in academic teaching. He is currenty working with ITC Ltd. as Manager Human Resources, Western Indian Operations for their FMCG The Concept and Importance of Innovation The concept of innovation has a ong history and has taken different meanings, depending on different strategies used to compete in the marketpace. Since 1950, different approaches of competing in the market-pace have been used, such as the efficiency approach (e.g. ean management), the quaity movement (e.g. quaity circes and standards), fexibiity, and finay, innovativeness (Bowijn and Kumpe, 1998). Innovation covers the entire gamut of processes - from the generation of the first idea to the introduction of a product or service into the market. Functiona aignment between R&D, Production and Marketing is the key to the innovation of organizations. Apri 2012 NHRD Network Journa 25

34 Design and impementation of new production ines, pants, abour conditions and missions are integra parts of the whoe process of innovation for it to deiver added vaue to the stakehoders of the company through vauabe knowedge. Popuar iterature on management and organization often seems to directy or indirecty highight the importance of behavioura and organizationa process factors on organizationa outcome variabes. Leadership, cuture, cimate and the ike, have been given prime pace in iterature on organizationa effectiveness. With the exception of a generaised notion that "bureaucratic" structures are counterproductive to organizationa and manageria effectiveness, by and arge the reevance and impact of structura factors have not featured very much in popuar iterature. This may perhaps be because the consequences of the structura characteristics of organizations are not as overt and obvious as other factors such as behavioura and organizationa process factors. Nevertheess, the structura characteristics of organizations have a singuar, abeit invisibe, impact on other organizationa variabes (Lawrence and Lorsch, 1967). Of particuar interest has been the effect of organizationa structure on innovation processes such as earning and creativity (Burns and Staker, 1961). Burns and Staker associated organic structures characterised by a ow degree of centraisation and formaisation with innovation, and mechanistic structures characterised by a high degree of centraisation and formaisation, as being antithetica to innovation. Other schoars such as Aiken and Hage (1971) argued that organic structures provide a suitabe context for organizationa innovation. The processes of creativity and earning that underie innovation and characterize dynamic capabiities are more ikey when organizations empoy organic structures as opposed to a mechanistic one (Bucic, 2004). Defining Innovation This brings us to the very definition of innovation. The most appropriate is that of West and Farr (1990), according to whom workpace innovation is the intentiona introduction and appication within a roe, group, or organization, of ideas, processes, products or procedures new to the reevant unit of adoption, designed to significanty benefit the individua, the group, the organization, or wider society. The definition of innovation, as defined by West and Farr, has severa facets. First, there must be an inherent appication component for any set of actions to be cassed as an innovation. Thus, workpace innovation invoves both ideation and impementation. Secondy, the definition aso specifies that innovation must confer intended benefit at one or more eves, or be perceived by peope to have benefitted the job roe, work group or wider organization. Thirdy, an innovation must be new to the reevant unit of adoption. These three eements constitute the defining characteristics of innovation. Factors Affecting Organizationa Innovation As is obvious, the factors affecting Organizationa Innovation has both Externa and Intra-Organizationa Factors. Externa factors such as government poicies, industry structure, and institutiona infuences impact the innovativeness of a firm. Among the intra-organizationa factors, organizationa cimate and organizationa structure are two key sets of variabes. Innovation happens within the context of an organization work cimate. The foundation for innovation is ideas, and empoyees are the ones who utimatey create, deveop and carry out ideas. 26 Apri 2012 NHRD Network Journa

35 Innovation depends on a supportive and encouraging organization where creative ideas can emerge and be depoyed effectivey. Organizationa work cimate is viewed as empoyee's perception and cognitive interpretation of the work environment. Empoyees use this information to construct their perceptions, and reguate their behavior. Amabie, et a point out that management support and encouragement mechanisms for creativity, differentiate between high and ow innovative organizations. Their contention was that organizationa efforts to deveop processes, programs, structures and resources for faciitating creativity, provide encouragement to empoyees by signaing the importance of innovation. The second factor that has a strong impact on innovation is organization structure. Organization structure may be considered the "stee frame" of the organization, providing the foundation on which the organization functions. It profoundy affects the behavior and processes of the organization and its members. In an interesting anaogy, Ha (1977) said that just as buidings have has, stairways, entries, exits, was and roofs, which determine the activities of the peope within it, behaviour in organizations is infuenced by the structure of the organization. Being something that can be directy controed and modified by management, it is the most significant parameter affecting innovation within an organization. It is aso one of the visibe eements of organization, which, when assessed, can bring out the preparedness of an organization for innovation. Organization Structure and Innovation An eary but significant British study by Burns and Staker (1961) tried to find out why in the post Word War II era, some new companies in the eectronics industry coud innovate quite successfuy and why some oder companies in the same industry that had been highy successfu during the Word War, faied to be innovative. Based on a study of 20 companies, the researchers concuded that the stye of management was one of the decisive factors. This concusion was arrived at by interviewing managers in these 20 companies. In the oder companies, successfu impementation of the management tended to be 'mechanistic', that is, it vaued fairy rigid functiona jurisdictions and discouraged atera communication. Since upward mobiity of the staff was ony within the functiona jurisdiction, departmenta oyaties were fierce and interdepartmenta disputes were usuay pushed upwards to top management for resoution. This resuted in indeterminate deays fata to successfu impementation of innovations which required inter-departmenta coaborations. The stye that was suitabe to innovativeness was one the researchers abeed as 'organic'. In this case there was free fow of atera and vertica communication, but getting resuts was given prominence over foowing aiddown rues and procedures. Improvisation was encouraged and decisions were arrived through interaction of a the stakehoders in the decision, and experts on the subject had greater say in the making of the decision than the person who was formay the fina authority. To be innovative, the organization shoud be ambidextrous, that is, be effective both at generating creative ideas as we as impementing seective ideas effectivey (Steiner, 1965). It needs to have a freewheeing, boundary-ess brainstorming cuture to generate creative ideas as in creative ad agencies or R&D functions and for effective impementation, a Apri 2012 NHRD Network Journa 27

36 professiona cuture with strong systems of panning, contro, coordination, evauation of proposas, rewards and incentives, performance review for course corrections and cross functiona teams for better coordination. It is frequenty difficut for organizations to change gears between the phases of 'invention' (creative ideation) and innovation (effective impementation of creative idea), and therefore some organizations try to separate the two wings entirey - one portion to ideate creativey and another to innovate successfuy (Kimbery, 1981). Another perspective, as pointed out by Khandwaa (2004), is concerning organization design for breakthrough innovation. Organizations need a different design for numerous incrementa innovations through the organization - what the Japanese ca Kaizen (Guck 1985). Breakthrough innovation needs 'skunk works' - teams of bright, creative individuas fanaticay pursuing breakthrough innovation despite modest resources as epitomised by Steve Jobs of Appe Computers having sma and moduar type structure. In such moduar structures, each team or custer is headed by an innovation champion. There is usuay considerabe disrespect for systems, procedures, budgets and others. They change, improve and try out odd approaches. These are the very cuture and the DNA of the organization. In contrary to this is the can cuture of Kaizen with its consensua, participative decision making, ife-time earning, job security, and paternaistic management, coaborative rather than adversaria reations with interna stake hoders, and bonus for everyone. Japan yieded exceent resuts during because of the above. From the preceding discussion, it can be easiy inferred that organization design faciitates innovation, and it is ony that the method and approach may vary from organization to organization. These methods and approaches are deepy embedded into the basic structura variabe that we a know are essentia components of organization structure. Further, from schoary iterature on organization structure and design, it seems that there are six structura variabes which are especiay significant for organizationa innovation. This finds mention in the earier part of the artice. Therefore et us then expore the extent of their reationship with innovation. 1. Vertica Compexity and Innovation Vertica compexity refers to the degree to which an organization is organized verticay into various eves of hierarchy, thus infuencing the degree of authority. Fat structures reduce promotion and growth opportunities in an organization, whereas these are motivating factors in ta hierarchies. Vertica compexity is important for innovative organizations, since it acts as a sieve through which ideas are fitered, but it is aso critica to note that vertica compexity has earned a negative reputation of having many hierarchies thus impacting decision making on a day to day basis. However, Leavitt in 2003 found, on the contrary, that despite their negative reputations, many hierarchies have demonstrated impressive adaptabiity to change. He found that hierarchies deiver rea, practica and psychoogica vaue by fufiing a deep human need for order and security. Therefore it may be inferred that vertica compexity may in fact have a significant positive reationship with Innovation. 2. Horizonta Compexity and Innovation Horizonta compexity refers to the degree to which work in an organization is 28 Apri 2012 NHRD Network Journa

37 divided horizontay into departments, sub-departments, functiona units and subunits, on the basis if different functions performed. Horizonta compexity faciitates innovation as new ideas are more ikey to emerge when a diversity of views are shared. It has been found that horizonta diversification presents key opportunities for new product deveopment, especiay in R&D based organization as per Pavitt (1994). Hage (1999) found a consistenty positive reationship between compex division of abor and organization innovation. According to her, compexity of division of abor taps the earning, probem soving, and creative capacities of the firm, and is hence important for innovation. Great innovations happen when different functiona units interact to deveop products and processes that best meet the needs of customers. Overa, studies show a positive reationship between horizonta compexity and innovation. 3. Formaisation and Innovation Formaisation is the extent to which empoyee behavior and job specification are reguated and standardised by the use of forma rues, procedures and task definition in the organization. Formaisation, through various rues and procedures, creates a feeing of security in the organization, protecting empoyees from arbitrary management decisions. Organizationa standards enhance roecarity and reduce roe confict which might ead to faster decision making. Srivastava (1991) states that formaisation faciitates performance by internaisation of organization goas and therefore makes innovation reevant to the organization. Studies by Barto and Martin (1991) suggest that rues and procedures hep provide coordination and directedness. One of the revoutionary studies in this era - the work of Drach - Zahavy et.a (2004) - actuay goes on to suggest that a greater autonomy - fexibiity approach at impementation stage might even be harmfu for innovation. On the whoe, contrary to popuar notions, formaisation may have a positive reationship with innovation. 4. Centraisation and Innovation Centraisation refers to the degree to which authority for decision making in an organization is concentrated at a singe point or the organizationa or manageria eve. Greater empowerment and increased decision making at ower eves of management, reduces the number of approvas required for decisions. Empowered project managers add to the speed and efficiency of new product deveopment. Khandwaa (1995) inferred that decentraisation has a positive motivationa effect on empoyees. Therefore, centraisation acts to impede democratic decision making, fais to foster responsiveness among empoyees, and inhibits the abiity of ower eves to infuence management thus negativey impacting innovation. Thus, it appears that centraisation has a negative impact on innovation. 5. Deegation of Authority and Innovation Deegation of authority is a widey used concept in management theory and can be defined as 'the process of entrusting authority and responsibiity to others throughout the various eves of the organization and the creation of a specia manager - subordinate reationship'. Most successfu innovations in organizations derive from situations where a number of peope from a number of areas make contributions. Reinquishing authority and giving empoyees Apri 2012 NHRD Network Journa 29

38 considerabe autonomy, can boost innovation and success at knowedge firms even during crises. Thus, we may infer that deegation of authority has a positive reationship with Innovation. 6. Participative Decision-making and Innovation Participative decision-making refers to the degree of participation of a member from different hierarchica eves and functiona units in an organization, in the decision making process. Participative decisionmaking comes from the concept of participative safety - the sense that team members can participate in decisionmaking and can share ideas without fear, and considers it important for innovation. It has been found that participation increases organizationa commitment and promotes better interpersona reationships among empoyees. Nowadays, organizations are reying on 'sef managed teams' to incubate new ideas. These team members interact with each other, rather than rey on higher authority for decisions. This increases the speed of innovation by speeding up the decision-making process. Where there are high eves of participation in decision-making, there is more information exchange and interaction within the groups. These groups are more ikey to work through difficuties associated with the introduction of innovations. They process information and opinions about the innovations more comprehensivey, ensuring more effective outcomes. These not ony increase the chances of success of particuar innovations, but aso increase receptivity to future innovation. Summing-up and Concusion The preceding discussion suggests that for organizations to foster and promote innovation, other things being equa, they need to: Have a moderate amount of vertica compexity, that is, have an adequate number of hierarchica eves as a structura mechanism for ensuring the order and the sense of security necessary for peope to free energies for innovative work, provide a fitering process for screening worthwhie innovation, and satisfying human needs for growth (perceived, even if not actua) Have a sufficient number of different units or division of work to encourage diversity, and speciaized attention to products and processes and the associated processes of earning, probem-soving and creative thinking Formaise systems and processes that may be repetitive in nature so that time and energy may be freed for creative and innovative work Decentraise decision-making in matters concerning work reated to innovation to aow sufficient freedom and room for the divergence of thinking necessary for innovation Create or deveop an organizationa cuture and practices that aow and encourage decentraised working even whie the organization retains a certain amount of vertica compexity in the form of different hierarchica eves. Promote and encourage participative decision-making through appropriate structures and systems such as sefmanaged work teams or parae structures. Designing innovative organizations is difficut, especiay in emerging economies in which traditionay there was a heavy reiance and concentration on centraised contro and command systems. If one goes back to ook into the predominant management styes prevaent in the 30 Apri 2012 NHRD Network Journa

39 emerging economies, one woud find authoritarian and paternaistic styes predominant. This artice may be of particuar use to corporate managements in emerging economies, as it suggests the kind of structura forms which may be conducive to encouraging innovation. This comes in the backdrop where firms in emerging Third Word economies are on the brink of pursuing different innovative strategies and practices to achieve different objectives. New products wi have to be deveoped to enhance 'differentiation'. They aso need to reach out to newer markets, urban, semi urban and rura. Innovative strategies need to be devised to offset competition in existing markets. Improving production or operation reated routines through innovation may provide them with cost advantages over competition. In order, to do a of the above, the organization shoud arrange or design themseves keeping in mind the basic components and characteristics of innovation. References Amabie,T.M. (1983) "The socia psychoogy of creativity", Springer - Verag, New York. Anderson N, C.K.W.D. De Dreu, and B.A. Nijstad (2004): "The Routinisation of Innovation Research: A Constructive Critica Review of the State of the Science," Journa of Organizationa Behavior, Vo: 25 No 2, pp Anderson, N., King, N. (1993): "Innovation in Organizations", In C.L.Cooper, & L.T. Robertson (Eds), Internationa Review of Industria and Organization Psycoogy, Vo. 8 pp. 1-34, Chichester, Wiey. Bowijn, P.T. and Kumpe, T (1998): Marktgericht Ondernemen: Managing van Continuiteit en Vernieuwing, Van Gorcum/Stichting Management Studies, Den Haag. Bucic, Tania Auters and Siegfried P. Gudergan (2004): "The Impact of Organizationa Settings on Creativity and Learning in Aiances," Management, Vo 7 (3), pp Burns, Tom and Staker, G M (1961) The Management of Innovation, Travistock, London. Drach-Zahavy, Anit Somach, Micha Granot and Ada Spitzer (2004):"Can we win them a? Benefits and costs of structures and fexibe innovation." Journa of Organization Behavior, Vo 25 (2), pp Guck, Fredrick (1993): "Big Bang Management," Journa of Business Strategy, Vo. 6 (1), pp Hage J.T. (1999) "Organizationa Innovation and Organization Change," Annua Review of Socioogy, Vo.25, pp Ha, R.H. (1977) Organization: Structure and Process, Engewood Ciffs N.J.: Prentice Ha. Khandwaa, Pradip N (1995) Management Styes, Tata McGraw-Hi, New Dehi. Kimbery, John R (1981) "Manageria Innovation," in Nystrom, Pau C and Starbuck, Wiiam H (eds), Handbook of Organization Design, Voume 1,Oxford University Press, , New York. King, N., & Anderson, N (2002), Managing Innovation and Change: A Critica Guide for Organizations. Thompson, London. Lawrence and Lorsch (1967), "Differentiation and integration in compex organizations," Administrative Science Quartery, Vo.12, pp Leavitt HJ (2003) "Why Hierarchies Thrive', Harvard Business Review, Voume 82 (7/8), pp Pavitt K (1994) "Key Characteristics of Large Innovating Firms in M Dodgson and R Rothwe (eds)", Handbook of Industria Innovation, Edward Egar. Srivastava DK, 1991: "Organization Effectiveness: Roe of Organizationa Structure and Process and Personaity". Ph.D. Thesis, Dept of Humanities and Socia sciences, Mumbai, Indian Institute of Technoogy, Bombay. Steiner, Gary (1965) "Introduction' on Steiner, G (ed.) The Creative Organization, Chicago, University of Chicago Press, Vedamanicham J, (2001): "Study of Innovativeness in Manufacturing," Saiesh J Mehta Schoo of Management, Mumbai. West. M.A. and Farr.J.L. (1990) "Innovation at Work". In M.A. West, & J.L.Farr (Eds.), Innovation and Creativity at Work: Psychoogica and Organizationa Strategies. Chichester: Wiey. Apri 2012 NHRD Network Journa 31

40 ORGANIZATION STRUCTURES CHALLENGES IN DYNAMIC TIMES KRISH SHANKAR Abstract In this artice, the author expains in brief about how the organizationa structures become the obvious too for impementing changes and gives an anaysis on the forma organizationa arrangements and their faiure. The author aso provides tips and essons on creating the right organization design and furthermore expains how to manage the transition. About the Author He has been eading the HR function in Bharti airte since Apri Prior to joining Airte, he has worked with Uniever for over 20 years, asty as Vice President, Human Resources- Asia- Africa Region. He started his career with Eicher Tractors in 1984 and thereafter has hed various roes in Hindustan Lever Ltd and Uniever, spanning the diverse areas of HR and business operations. He has a Post Graduate Dipoma in Personne Management and Industria Reations from XLRI, Jamshedpur. Introduction Every now and then, businesses change their structures, usuay foowing a string of bad performances, or after a new CEO takes over. Some businesses do so proactivey to drive new priorities or focus on markets more effectivey. It has become one of the most powerfu evers for CEOs to generate breakthrough improvement in organizationa performance. Why do structures (or to ook at it hoisticay, 'forma organizationa arrangements') become the obvious too for impementing changes? First, they are perceived to be substantiay easier to modify than either individua or coective behavior. Second, the forma organization has a much faster and direct resut on behaviour, activities and performance. It is aso directy inked to strategy and gives cear visibiity to the changes in priorities fowing from new strategic directions. Lasty, it serves as a good expression and communication of intent - sends a cear message right through the organization and heps aign priorities. However, not a changes in the forma organizationa arrangements are successfu. An anaysis woud show that there are two broad reasons for faiures: 1. Not ooking at organization design in a hoistic way. A good framework for ooking at organization design is the 'Congruence Mode' that was outined by Tushman & Nader, in their book 'Competing by design - the Power of Organizationa Architecture'. For effective organization design, the 32 Apri 2012 NHRD Network Journa

41 Congruence Mode advocates a fit between the four key eements: The Work to be done, derived from the strategic direction The Peope - their skis, capabiities, interests The Forma organization - structures, processes and systems The Informa organization - the cuture Therefore, changes in structures aone cannot bring about the desired resut. First, they need to be compemented by appropriate changes in processes (a specificay defined sequence of steps, activities or operationa methods) and systems (appication of physica or socia technoogies that enabe the performance of work i.e., HR systems, which outine specific sets of poicies and practices that infuence how work gets done and by whom). These are integra part of the set of 'Forma Organization', and a misaignment here is sure case for faiure. Further, the congruence or fit amongst the other core eements, namey Work, Peope and Cuture need to be ensured. 2. The other main reason for faiure of structure changes is what I woud ca as 'estimation defect 'or 'trade-off biases. Most of our strategic decisions are about trade-offs between aternate priorities or courses of actions. These decisions ca for an abiity to forecast, estimate or predict, and we go sometimes wrong in those. Such issues are more common among businesses which compete in highy dynamic environments with rapid and discontinuous technoogy change. In this artice, we wi focus on how we can understand and reduce such estimation/trade-off bias in our design of organizations. Let's take the exampe of a company in the hi-tech industry. Normay, a high degree of technoogica change exists in this industry, with an average of one big, discontinuous change every decade or so, and numerous other changes. Tushman & O'Reiy, in their book 'Winning through innovation', tak about four distinct periods in an innovation/product ifecyce. First, there is a period of technoogica discontinuity - when a competey new technoogy breaks through. Take the exampe of Mobie Phones or Digita Photography or Quartz watches - these create new paradigms. This discontinuity is foowed by a 'period of ferment' when competing patform/technoogies estabish themseves. Continuing with the exampe of mobie phone systems, it took a few years before the GSM technoogy got accepted as the standard. Simiary, Bu-ray of Sony is an exampe of a patform estabishing itsef in a 'period of ferment' over the riva patform. This period is foowed by a one of continuous improvement - where the focus is on incrementa change and architectura innovation, where the focus shifts to efficiency, scae, continuous improvement and stabiity. Soon, this stabiity is disturbed by another discontinuity, another breakthrough innovation and the whoe cyce starts again! Based on this insight, Tushman & O'Reiy have articuated three broad types of product ifecyce/innovation stages- the Incrementa/Process innovation usuay with sma extensions of existing technoogy, the Architectura innovation which is reconfiguration of the technoogy or patform, and the Discontinuous innovation with competey new operating principes. Each of these addresses both existing market/customers and new markets, as shown in Tabe 2 with an exampe from the watch industry. Apri 2012 NHRD Network Journa 33

42 Tabe 1 - Product Lifecyce/Innovation Stages Incrementa/Process Architectura Discontinuous (Sma extensions (Reconfigures (New operating existing technoogy) existing technoogy) principes/ Discontinuous innovation) New Markets Inexpensive 'SWATCH' First Watch mechanica watch (TIMEX) Existing Markets Thinner, smaer Quartz watches mechanica watches Now each of these different stages needs a different 'eco-system' to thrive - a unique set of Peope, Forma Organization and Informa Organization. That then is the chaenge, more so when a three stages Tabe 2- Product Lifecyce Stages and Organization/Cuture Required Incrementa Architectura Discontinuous Reativey formaised Adding & inking Entrepreneuria roes & responsibiities Sub systems Decentraised product Centraised procedures structures Functiona structures Reativey young and Focus on efficiency & Focus on integration heterogeneous peope continuous improvement & inkages Focus on experimentation, mutipe but sma faiures, earning by doing. We are now entering an era where such technoogica discontinuities are far more reguar - and this is putting incredibe chaenges to our eaders, and our organizations. To add to this compexity, at times we need to keep driving the business across a the above three stages of product ifecyces - becoming 'ambidextrous'! Given this eve of heightened uncertainty or compexity, no wonder our 'estimation defects' are increasing. Further chaenges in our quest for 'best fit' organization are to do with questions of speciaisation vs. integration, reduced ayers vs. managing compexity, and centraisation vs. decentraisation, etc. : 34 Apri 2012 NHRD Network Journa co-exist in a particuar company. Tabe 2 outines the features of the organization and cuture for each stage of the innovation cyce. 1. How do we manage our organizations for such dynamic changes? 2. How do we identify which technoogica changes or opportunities do we pace our bets on? How do we resource these? How do we manage the distractions to our existing core? 3. With each form of innovation needing different capabiities & cuture, how do we manage these seemingy different 'organizations' within one? 4. How do we buid synergies across these different streams or product groups? How best can we everage scae, without osing focus?

43 5. To what extent do we spit functions into further speciaised verticas? 6. What needs to be decentraised to business/product units or geographies, and what shoud be centraised? What principes hep us get the right mix of focus vs. synergies? 7. How do we get the matrix of a product ine-function-geography to come together effectivey? We wi expore some of these issues with a coupe of exampes, and then concude with some 'earning's' that we can use as practitioners. Let's take an exampe of Bharti Airte, a eading Teecom company. It started as a Mobie services provider in ate 90's and added a Landine business, and then an Enterprise business. It went into providing DTH broadcast services in Whie the aunch of 3G, Data services has become a speciaised, differentiated product ine. Airte Money, a competey new ecosystem for mobie payments and money transfers, has now been created. Mobie Entertainment (caed Vaue added services in teecom jargon); Mobie Heath and the other new business opportunities are emerging, using the mobie network patforms. The chaenge was to design an organization that focused on efficiency, scae and synergies in the traditiona voice business, but have different set-ups for the emerging businesses. The company chose to create an integrated Network Services Group to drive the technoogy backbone synergies, and an integrated saes and 'goto-market' organization, whie each business unit had its independent CEO to create and manage the products and its reevant ecosystem, in some ways buiding on the traditiona 'category organization' in FMCG. The other chaenge in organization nowadays is the trade-off between speciaisation and integration. Let's take an exampe: In FMCG companies, the Saes & Marketing function of yore that was integrated is now broken up into 3-4 different verticas, as foows: 1. Brand Deveopment 2. Brand Activation /Market Deveopment 3. Consumer Insights 4. Customer Marketing or Trade Marketing 5. Saes or Customer Management Whie Brand Deveopment, Brand Activation and Consumer Insights are normay grouped by 'categories' (a division by product group), Saes is normay integrated across the product groups, but grouped geographicay. Brand Deveopment, for instance, is usuay managed gobay. On one hand, the spit of the traditiona marketing function heps buid deep expertise and provides focus. Whie Brand deveopment is on a regiona or goba scae to buid on synergies, the Brand activation or Market Deveopment has a strong country P&L focus, thus ensuring a oca country perspective. However, there is a danger of too much 'saami-sicing' of jobs, requiring ot of interfaces between each of the above verticas - and that's a trade-off we need to make as eaders. The other perpetua chaenge is on baancing the number of ayers with increased span of contro, and thus the abiity to manage scae & compexity. An additiona ayer may be a 'span-breaker' (managing a set of simiar roes, e.g. Nationa Saes Head, with regiona saes heads reporting) or an 'integrator' (managing and integrating disparate functions, e.g. a CEO). As organizations' drive to be more agie and cut out ayers, the span-breaking roes are coming under the microscope- and thus there is a need to find different ways to manage the Apri 2012 NHRD Network Journa 35

44 compexity. We see the emergence of 'interface' management roes, and simutaneousy a more empowering and iberating governance framework, and an increasing reiance of the matrix reationship. Perfecting the matrix reationship is the 'hoy grai' for a effective organization design in these compex times. It is now increasingy cear that more than structures, it is our behaviour and the ways of working, i.e. the Informa organization, that enabe the success of the matrix. Therefore, here are some essons for us as we ook at the right organization design. The foowing are tips for practitioners. Foow the SCRIPT: 1. Begin with a deep discussion on Strategy, identifying the key priorities and imperatives, in the context of the environment and the future. A key earning is to ensure that this is sharpy prioritized - the team must be abe to 'stack-rank' the different priorities, so that when it comes to certain trade-offs, we are sure what is reay critica. 2. Look at each business or product group, and identify the Critica factors as foows: a. What is critica for success of that business? b. What is unique about that business, and our USP? c. What kind of peope needed to make a difference in that business or product group? d. What shoud be the unique cuture there to make it win in the market? e. What activities have to be specific to the business? f. What areas can benefit from synergies or scae? 3. Assuming you cannot make any structura changes; ook at how you coud meet the objectives by changing peope. Research shows that most issues in a business can be addressed by a change of eadership - having the Right Person wi make a the difference. A good way to identify this is to first ist out what is aiing the business - in terms of specific shortcomings. Then, identify the key eader and ask this question "what can this person do better (or stop doing) that wi make the organization more effective". If the two ists are simiar, it points to the issue of the individua. On a more generic eve, the organization of the future wi ca for peope to be abe to work across sios and boundaries, and depend ess on hierarchica orders but more on infuencing - and having such types of eaders is imperative for every company. 4. Many companies are ooking at various Innovative ways of managing the mix of Peope and Structures. For exampe, new business project teams are kept as separate 'start-ups' with a group of young, entrepreneuria peope, but ed by an esteemed senior person from the mother company to ensure that they do their work unhindered but sti get support from the mother company. Innovative inkage of reward systems to ensure that reevant peope have the ski in the game aso heps in managing the different priorities. Use of project/ programme management offices aso heps drive a new focus area. 5. The next step, before you jump into structures, is to see if the issues can be addressed by any of the foowing: a. Changing any systems or Processeseither a business process or any supporting HR processes, especiay rewards and performance management. b. Prioritising new set of measures reevant to the strategy. 36 Apri 2012 NHRD Network Journa

45 c. Changing or aigning KRAs/targets of key peope. d. Adding additiona roe or headcount to ook after certain focus areasthere are many exampes where big issues have been sorted out by adding a coordinating/interface or a project management roe. 6. Ony after a the above have ooked at, shoud you ook at changes in structures, with strong buy-in for the Transformation. Whie doing so, it woud be good to use a rigourous structured process. The methodoogy foowed by the Haygroup is given beow. Be sure to test the Congruence or fit of the four eements- the Work to be done, the Peope with their skis & interests, the Informa organization, i.e. the Cuture, and the Forma organization, incuding structures, processes and systems. Foowing the above SCRIPTunderstanding Strategy, identify Critica factors, putting the Right Peope, seeking Innovative ways to sort issues unique to your organization, aigning Processes and finay creating a strong buy-in for the Transformation wi hep us avoid the 'estimation defects' we spoke of. In concusion, as businesses go through increasingy dynamic environments, they need to be more fexibe and mutifaceted in how they organize themseves. They woud gain from a ot more hoistic approach to managing their organization design, with a greater focus on Peope, Cuture, Systems and processes, rather than just structures, and need to come up with winning mix of these eements. In the Indian context, we shoud be prepared for more frequent changes and tweaks as organizations' search for this winning mix. The perfect organization design is a myth! No sooner than you think you have found the 'perfect soution', you wi find that there is a new probem coming up somewhere. We shoud be open to continuous renewa and change, and be constanty ooking at ways in which to get the most effective organization working for us. Bibiography: 1. Competing By Design: the Power of Organizationa Architecture, by David A Nader and Michae L Tushman, Oxford University Press. 2. Winning through Innovation: A practica guide for eading organizationa change and renewa, by Michae L Tushman and Chares A O'Reiy III, Harvard Business Review Press 3. James M. Utterback Harvard, Mastering the Dynamics of Innovation. Business Schoo Press; 2Rev Ed edition. September 1996 Apri 2012 NHRD Network Journa 37

46 ORGANIZATION STRUCTURES IN HOSPITALS/ HEALTHCARE ATTEMPTING TO UNFURL THE ENIGMA OF CLINICAN ENGAGEMENT KUMAR KRISHNASWAMY and CYRIAC JOY Abstract The artice gives an introduction on organization structures in hospitas and expains how the Medica Cinician community differs from the mainstream concept of empoyee. It aso provides knowedge on working towards the idea structure and gives ideas for the organization of the idea structure in addition to enabing effective administration. The author has aso provided a diagram on the idea structure for hospitas to avoid confusion, and finay the author concudes by saying that organizationa structures cannot be a one size soution that fits a. It has to be ideay made to custom fit the needs of the arger organization whie taking into consideration those who are crucia to the organization. About the Authors Kumar Krishnaswamy passed out of XLRI in He has 30 pus years of experience in HR in Manufacturing, Service and IT.He is currenty the Head of Cinician Engagement for Fortis India an independent HR vertica for Cinicians in the organization. Cyriac Joy is HR Manager with Fortis Heathcare. He is a B.Tech, MBA with 5 pus years of experience in handing Payro, HRIS impementation, PMS, Support in OD initiatives. Introduction To run an organization, the owner of the business, hods a certain bunch of peope he/ she trusts, responsibe for certain areas of work that he/ she does not want to get into or fees, has to be handed by speciaists in the fied. However good you were, in financia accounting and Basics of Business Law and Taxes in coege, you sti have your investments panned by a reputed Chartered Accountant. Organizationa structure is the name given to the figurative drawing, of the roes occupied by this bunch of trusted aides who are accountabe for certain areas of the business. `Structure is a means for attaining the objectives and goas of an organization. Peter Drucker, In days of yore, there were those heaers, who took to the roads to find and hea those who were aiing from sickness, fear and possession by demons. Many sought them out to hea their near and dear ones. Science 38 Apri 2012 NHRD Network Journa

47 evoved from art and magic. Education then began to seep into a fast evoving, civiised word. Doctors earned the science of medicine and practised this art from the very foors of the Universities where they earned it. They met patients and the needy who sought them out at their homes. When the numbers grew, the doctors put up cinics near their homes. The cinics grew arger, and the doctors needed others to take care of the patients whie he/she treated them. A aong this journey doctors were the earned deity who heaed the sick. They never wanted to keep count of the patients, cacuate the rent for the buiding and make accounts for a the expenses and taxes, the pay scae for a who worked with them, check what the market paid for neither equivaents nor the work it entaied. But whie they owned the hospita, there were those Doctors who coud run it ike a charm, and there were those who chose to exce at their chosen fied whie the camour or administrative distractions were deat with by the appointed support. Then, came the age, of raising patient expectations, hospita chains and the business of heathcare. The key payers the doctors got so engufed in the sheer magnitude of the science, and hospita management found it fruitfu to nurture them in sios. Today, there is a need to being their expert medica opinions to the management board tabes, give ears to their opinion in this industry that faciitates their practice, to give them their inteectua and socia vent in the form of a peer group that s often stretched thin across hospitas and geography. The figurative drawings on the wa Organizationa structures have to determine how this can be faciitated. Organizationa structures determine the manner and extent to which roes, power, and responsibiities are deegated, controed, and coordinated, to the extent of how information fows between the various eves of management and empoyees. A quick ook at the past and current organizationa structures in hospitas before we probe deeper into the Cinician mind-frame to try and identify the idea structure that takes the presence of these domain experts and their needs as individuas into account by creating horizonta and vertica bands / matrix structures that can ensure sustained scaabiity. Terms that wi be used in the remaining document: Cinician: The senior Doctor/ Consutants from key speciaties with post graduate degree and extensive experience, engaged with the Organization Medica Officer: A junior Cinician who is typicay a MBBS without a post graduate degree Empoyee: A empoyees of the company incuding Medica Officers Faciity Director: Head of one singe hospita CEO: Head of an organization that runs a chain of hospitas Apri 2012 NHRD Network Journa 39

48 Organizationa structures within Hospitas span over 2 basic stages: Figure 1. Traditiona Hospitas Few among the many new Corporate Hospitas, have a management team who constitute of experts in their respective fieds; incuding a Faciity Director who is a business professiona (with exposure to heathcare, hospitas or simiar institutions). Ony the HOD of a particuar speciaisation is a practicing doctor from that speciaisation, and there is a section coordinator under him/ her who heps the day to day operations (often on a rotation basis among the consutants in the department). The HOD takes up the medica functions reated to the department, and does not pay a roe in the administrative functions. These structures do not exist in a corporate hospitas. Even in those corporate structures with HODs who can be Practicing Cinicians and a Section Coordinator who wi provide support to the HOD, this structure is acking in certain fronts in providing the cinicians the environment that can nurture both the inteectua in them as we as the individua. This structure even though foowed by various corporate hospitas, in our submission does not take into consideration the various unique attributes with respect to cinicians. Figure 2. Hospitas going Corporate It gains merit in the context of the Hospita sector, to get acquainted with the category of empoyee that defines hospita / heathcare sector Cinicians, before getting into the detais of the idea organizationa structure as being proposed by us. How the Medica Cinician community differs from the mainstream concept of empoyee 1. They are speciaists, with specific skis in their particuar domain. This group is coser to researchers. Cinicians are at the esteem eve of Masow s hierarchy with very senior members headed towards the Sef Actuaisation eve. The years of experience have to refect in the eves of importance associated with their roe, and not merey in monetary terms 2. They are individua contributors and the concept of team is more for administrative tasks, or a team of doctors often headed by the senior most among them. They tend to respect and hence obey orders from one of their own kind not so much from non-medica personne. Succession panning does not happen automaticay. 40 Apri 2012 NHRD Network Journa

49 3. Cinicians give very high importance to constant earning, and ensuring their knowedge is aways up to date. 4. They are invoved in ife saving work and trust pays an important roe. Trust between the patient and the doctor is not the same as that between the doctors and the management. Trust between doctors and the management team is different and often mistakeny taken for granted. Trust within the system has to be earned as we as faciitated by the organization structure. 5. As they move towards the top, they don t find many within an organization who wi be abe to match their inteectua requirements and traditionay they had to ook at fraternising outside their pace of work for knowedge sharing and meaningfu persona growth. 6. Their view of management often tickes down to a cerica overhead than a trusted framework that works towards their overa betterment; hence monetary returns overshadow sefdeveopment and contribution to the deveopment of the organization. 7. Cinicians need a vent, for their socia instinct and a peer group within their pace of work, who shares their inteectua aspirations. 8. The nature of their work, to reemphasise, has reinforced their pattern of thinking: a. To be rigid on their points of view (uness verifiaby proved wrong) as ives depend on their everyday decisions. b. Knowedge sharing is with whom they consider the eite members (Across the spectrum of hospitas and countries) of their fraternity / members who have aready earned their trust, which often are not within the same organization Working towards the idea structure: (Here we are considering a scenario, with a chain of hospitas in a corporate setup) 1. Nurtures the fine baance between Administration and Cinicians 2. Transforms the individua contributor among the Cinicians to a team person deveoping a team of cinicians based on evoved HR norms. Thus the eadership of the Cinica reated activities is in the hands of cinicians with a cear and firm ink to Administration to ensure that other stakehoder interests are aso taken care. The structure wi create a team around the so caed Individua contributors and invove them in aspects beyond cinica exceence thereby empowering their engagement 3. Respects the individua Cinicians thirst for higher knowedge, desire to interact with a peer group having superior skis and experience (This is the focus of the Virtua teams which wi be for each key speciaization) 4. Uses the overa knowedge, wherever appicabe in the administrative aspects of running a Hospita 5. Dedicated HR to suggest appropriate interventions 6. Provides an Emeritus group for the inteectua inputs to the organization in the cinica area 7. The idea structure shoud provide scaabiity without creating bottenecks whie everaging efficiencies within. 8. Provide an ambience of trust, respect and transparency 9. Enabe their growth and sefdeveopment. (Hep reaise the ambitions of a speciaist) The Matrix structure necessitates the requirement of Virtua teams. Apri 2012 NHRD Network Journa 41

50 Virtua teams perform better with: ( Organizationa Behavior by McShane/ Von Ginow ) For the Organization the idea structure in addition to enabing effective administration has to: 1. Aow speciaists to see the organization that invoves them to use their skis through forums where their skis can be used for better administration 2. Aow speciaists to see the organization as an institution that promotes their quest for acquiring knowedge and putting it to use in their daiy endeavors within the organization. 3. Ensure quick and effective decisions to be taken by the respective domain experts (Management as we as Factors differentiating Cinicians from Reguar Empoyees 1. Speciaists - coser to researchers 2. They are individua contributors 3. They give importance to constant earning 4a. Can be rigid on their points of view 4b.Knowedge sharing and Pubic recognition among peers Speciaist/HODs) without facing unnecessary administrative hurdes. 4. Take advantage of scae to ensure speciaists in each domain can create exponentia vaue within the organization 5. Standardise the quaity of services across geographies, by centraizing the functions that reduce redundancy 6. Enough avenues and motivation for the cinicians to deveop their own verticas beyond mere resuts into Research, Academics, Pubishing papers thus giving an overa direction to the organization. How the Organizationa structure shoud address Create avenues for constant earning and updating knowedge as we as interaction among peer groups (Virtua Teams) Provide a scope within their Roe for them to deveop teams in ine with current business requirements. Emeritus group to be the sounding board for a Cinician reated affairs, as we as champion mentoring and teaching at their eves. Virtua groups Create forums for interaction, creation of a knowedge bank, Impetus and recognition for Pubishing research papers etc. Virtua teams for key speciaizations to provide environment for peer group interactions 42 Apri 2012 NHRD Network Journa

51 5. Management not a trusted framework for their overa betterment 1. Stronger interaction with Unit MSOG- Medica Strategy and Operations Group (Medica Admin Head- Unit) 2. Cose interaction with other components of Medica Strategy and Operations Group (MSOG) 3. Unbiased performance measurement system on a wider set of parameters instead of outcomes ony 4. Emeritus group to be a baancing force in case of escaation. 5. KRAs/ Goas of the Faciity Director to aso focus on the cinicians overa deveopment rather than on resuts ony. Proposed Structure that takes the above points into consideration: Apri 2012 NHRD Network Journa 43

52 To expain the proposed Matrix structure; we need to understand the foowing terminoogies and groups that are being referred to: (3 new groups) 1. Medica Strategy and Operations Group (MSOG): A senior group within the Management reporting into the CEO and functionay into the MD. MSOG represents Cinicians interests during Board meetings and critica decisions. MSOG takes inputs from Emeritus group (who are in direct touch with Cinicians) in a decisions a. Unit MSOG: Medica Administrative Head, avaiabe at the ocation who reports into Faciity Head and functionay into Corporate MSOG 2. The Emeritus Group of doctors are a group of eminent personaities among Cinicians from our Organization and outside (who can be practicing/ teaching) respected within their respective fieds of speciaization and hence wi be abe to understand and guide the group of doctors within the organization. This new group pays the roe of guiding and supporting the Medica Strategy and Operations Group to ensure Management decisions at the Board / CEO eve take into considerations the views of the Cinician community. The advantages of the Emeritus Group are many. Emeritus Group members have been practicing consutants a their ives and understand what the current practicing consutants are going through and can see the word from their perspective. Depending on the size of the chain of hospitas, and the geographica spread, the Emeritus group can have a second ayer beow it which wi cater to particuar regions. 3. Virtua Teams: Separate groups for Cinicians from each key speciaity across a hospitas, across geographies who wi interact with each other. This coud aso incude Cinicians from our Organization who are part of the Emeritus group. The Virtua team is more of a socia gathering without any forma hierarchy, which provides Cinicians an opportunity to interact with peers who are simiary inteectuay aigned, to have fruitfu discussions of achievements and aspirations as we as, compicated cinica cases and atest advances/ practices in the fied. Cinicians at each unit wi report directy to the Unit MSOG (Who functionay reports into the MSOG). Roe expained in detai 1. Medica Strategy and Operations Group (MSOG) (Ony points with respect to Cinicians): a. Represents Cinicians interests during Board meetings and critica decisions b. MSOG is the overseeing group that takes care of: i. Recruitment of Consutants ii. Poicies, Protocos, Quaity and Standards iii. Research iv. Compensation and Performance Strategy and management v. Education vi. Management of Paramedica support systems 2. The Emeritus Group of doctors as a body of knowedge and Experts Lend the above group its expertise in: i. Performance management norms and Growth for Cinicians 44 Apri 2012 NHRD Network Journa

53 ii. Mentoring, coaching iii. Guidance for Education programs and a Learning Organization iv. Attraction of senior taent and Seection Criteria v. Expore atest deveopments that wi be the future of Medicine and guide the MSOG Concusion Organizationa structures cannot be a one size soution that fits a. It has to be ideay made to custom fit the needs of the arger organization whie taking into consideration those who are crucia to the organization. A organizations have executive boards that take care of their business needs; the current scenario raises the requirement of a taent board, drawn from the eite members of the domains the organization speciaizes in, with the roe of nurturing and deveoping functionay the organizations most important resource its empoyees. The Emeritus group woud strive to conquer these ofty aspirations. Day to day interactions with the decision making machinery that ensures every empoyee has a part to pay in the direction the organization is taking. The Unit MSOG and the arger MSOG group ensure Cinicians are activey istened to and their opinions are taken into consideration at a eves of administration. It aso provides a forma structure for Cinician growth and consequent succession panning etc. The structure has to fexibe enough, to incusivey engage every empoyee with a defined roe, position, as we as, an ecosystem the individua can beong to. A team structure that goes beyond the requirements of the daiy grind ike the Virtua team proposed here, having no executive power, tries to define the same. BIBLIOGRAPHY: Organizationa Behavior by McShane & Von Ginow A Theory of Human Motivation by A.H. Masow This artice contains, the views of the Authors, and is not representative of the view of the organization they are affiiated with, nor of the NHRD. Apri 2012 NHRD Network Journa 45

54 ORGANIZATION STRUCTURES IN NEW AGE ORGANIZATION AND ORGANIZATIONS OF THE FUTURE MADAN NAGALDINNE and SHWETA SHUKLA Abstract Organizations are feeing the dawn of the socia era a around them and have very few eaders who can hep them chart through the rapid swirs of change. Through this artice, we hope to chaenge the existing organizationa structures and peope strategies that are outdated in a sociay connected word and ask HR eaders to dispay visionary eadership and ead their organizations in the socia era. The way we work is being atered at the foundations and there never has been a more critica time than now where the roe of HR is so centra to an organization's success A robust peope strategy wi be at the core of any successfu organization in the socia era and ikewise, the ack of one wi mean rapid decay and destruction of the organization itsef. Such is the power of this transformation. About the Authors Madan Nagadinne is head of HR for Facebook, Asia Pacific and is based out of Singapore, he is famous in the fied of HR as a Youth Icon. Prior to Facebook, Madan was the head of HR for Amazon's India Deveopment Center. Madan has a Masters in Human Resources from the London Schoo of Economics. Shweta Shuka is the head of HR for Facebook in India and is based out of Hyderabad. Prior to Facebook, Shweta worked with Aon Hewitt in their management consuting division. Shweta did her MBA from XLRI Jamshedpur (cass of 2001). The way work gets done in companies thriving in the socia era ike Facebook, Twitter, Zynga, LinkedIn etc. is vasty different from the ones that cing on to the beief that 'bigger is better'. Organizations that have embraced 'socia by design' have created disproportionate impact and disruptive innovation in the industries they operate upending existing business and business modes. They have got there by their unique cutures which interestingy has a few commonaities - busting bureaucracy, redefining what managers 46 Apri 2012 NHRD Network Journa need to do, POD based organization structures, obsessing on hiring the very best, retooing a aspects of their peope strategy and encouraging diaogue and feedback from their empoyees, customers and stakehoders. These companies consider the entire ecosystem as being equay important and have reaised that in the socia era, their abiity to move fast and out-innovate whie constanty istening to their stakehoder networks offer them a chance at being different and adapt at making quick changes for the better.

55 From HR strategy to Peope Strategy - A note to HR eadership Like it or not, everyone (we amost) in your workpace is on a socia network, be it Facebook, LinkedIn or Twitter. Your own organization may be using enterprise socia network ike Chatter (Saesforce), Jive or Yammer. Every CEO wants to know how to dea with Socia that is invading every part of their organization, buzzwords ike co-creating, sharing, coaboration, crowd-sourcing are everywhere. Whether you are at the top of the management chain, or have just started your career in Human Resources, you are expected to ead this discussion Socia is about 'Peope'. Many of today's organizations structures are argey based on a command-andcontro mode of management, and it is getting competey outdated in a sociay connected word. Structures that support a top-down communication approach and rey on forma structures to get work done totay devaue the power of a socia enterprise. Unti recenty many HR eaders have been sow to adopt some form of socia networking in their enterprises. We commony hear excuses from HR ike 'this is just a marketing phenomenon impacting the Internet generation of consumers, it has nothing to do with organizations or the way we buid products or services, or manager or ead peope' - One can wish this goes away, but this change is here to stay. We are iving in a word that is witnessing the argest increase in expressive capabiities and we need to harness the messages in each of these expressions and appy it to differentiate our organization, our products and our peope. There is no other time more critica for the roe of HR than now with the recent transformation from an industria economy to a knowedge economy to an innovation economy. Your empoyees, managers, eaders, CEO and even the board expect you to show that you fuy grasp the enormity of this, and are bod and courageous to charter your organization into the socia networking reaity? So where do you begin? Let's start with defining what a Socia Enterprise is. A Forrester research anayst defined it as "business that connects empoyees to each other and to customers, through the power of socia technoogies," or as Saesforce (in its website) puts it "Your brand is the sum of a conversations"? What is cear is that conversations that happened in private or around the water cooer, or between empoyees, or between customers, or between teams are a happening in one big heap and in rea time and on socia networks that are everywhere. These networks have the potentia to significanty improve the quaity and speed of communication bringing aong with it, opinions, ideas, innovations, expression. Socia networks provide native support for groups and conversations and binding these conversations using technoogy wi hep assess the vaue of the diaogues that are taking pace. Once you have committed yoursef to a socia patform, you wi see that there is very itte training or nudging you wi need to do to get used to. Man has been inherenty socia from the beginning and the patform is just an extension of something that comes easiy. In other words, there is no steep earning curve you wi need to be worried about. Your first step starts with a commitment to embracing socia technoogies and your roe as an HR eader is to uncover how to transform your organization into a socia enterprise. Apri 2012 NHRD Network Journa 47

56 Work structures and not just organization structures Successfu companies organize around taent and not capita. In the socia era, management innovation and not management are the main drivers in a connected word. Whie we continue to evove our organization structures to match our strategies, there is a parae process that is brewing owing to socia technoogies. How work gets done is not just impacted by structure hierarchies, it is impacted by how teams are organized and how they connect with each other. For exampe, at Facebook, the mantra is 'Done is better than perfect' what this means is that work gets done in very short cyces and by constanty iterating the work product, based on the feedback from stakehoder networks of users, empoyees, boggers etc., you create a massive differentiator - which in this case is speed. Very often, companies spend an inordinate time defining their organization structure but fai to focus on underying sociay designed work structures. Socia technoogies can dramaticay impact speed and quaity of how teams operate. They can rapidy incorporate feedback from customer socia networks and create a process of iteration and continuous improvement - based on feedback from a network of experts. Contrast this with the mode of how work gets done today in your organization and you wi see the massive opportunity in front of you. An efficient org structure is not about tweaking a ayer here, adding a new roe there etc. but it is whether your org structure has an abiity to create a arge market differentiation over competition. "Creating pods and making them socia" New work structures in the socia era ca for new thinking about coaboration and sharing within your organization. The concept of a 'pod' is fast gaining acceptance over much narrowy defined 'departments and functions'. Pods are sef-managed teams that work with very itte forma reporting structures. These teams have individuas that reside in different functions but coaborate on common goas. They are different from project teams because there are no project hierarchies and they do not disband after a project goa is competed. The critica eement is how we create these Pods, it's very important that the dependencies that exist across teams are identified and the Pod is buit around that. Pods have the capacity to unock hidden vaue in your organization. They bust bureaucracy and create a joint sense of ownership and purpose. Pods end themseves to be socia and diverse and chaenge existing ways of doing work. As an HR eader, this is more about your courage and vision in changing the way work gets done and chaenging existing dogmas and sios that have artificiay been buit in the pre-socia-enterprise era which vaued kingdom buiding over efficient work structures. Simpy put, you need to Chaenge, Disturb and Redefine work in the socia era Having the right set of eaders: The doer eader To take advantage of these new socia patforms, redefining how work gets done in your organization is a first step. Equay important is to rethink the roe of your managers. In the socia era, the roe of the manager has changed dramaticay. Firsty, the command-and-contro approach that is far too ubiquitous is outdated and does not end itsef to enabing stakehoder networks. 48 Apri 2012 NHRD Network Journa

57 A manager's roe in the socia era is to inspire and enabe. Steven Denning in his Op.Ed piece on Radica Management says 'The roe of managers' shifts from a controer of individuas to an enaber of sef-organizing teams. Managers provide the team with a cear ine of sight to the customer and are accountabe for removing impediments. This shift recognises that the engine of productivity in a knowedge economy - innovation and creativity - resides in the energy and ideas of the peope doing the work, coaborating across boundaries, drawing on new technoogy and different perspectives. (Denning) In an innovation economy, managers need to be great at roing up their seeves, providing these inkages, inspiring teams, hiring great peope and deveoping them. Managers need to be, first and foremost, great at the core work of deveoping great products and services, and then be passionate to take additiona responsibiities of enabing teams to deiver great resuts. Managers don't get to ead teams just because they have enough years under their bets or because there is no other career track except management after a few years. Unfortunatey, command and contro structures pace a higher vaue on vertica growth, and power aways resides one eve higher. Empoyees on their part manage the adder carefuy and the potentia of aowing peope to foow their passion and operate in their strengths zone is a forgotten and it becomes business as usua. To reaise the true potentia of the socia era, this entire top down approach to management needs to be redesigned around strengths, PODs and new work structures that hep companies gain competitive advantages in the marketpace. Redefining the roe of the manager coud be one of the most important exercises that you wi need to undertake. Creating the empoyee socia experience The basic premise of the socia era is to repicate the offine word onine. It's the abiity to create socia experiences at work that mirrors your empoyee's actua word. The web is shifting from a vast encycopedia of information to a socia environment that refects our rea identities and the reationships and information we care about. Socia media companies ike Facebook are eading a socia movement by buiding ground-breaking technoogy that gives peope the power to share and makes the word more open and connected. To repicate this movement at the workpace, one needs to ook at what the workpace in the socia era wi mean to empoyees. At the very minimum, you wi need to create a workspace that aows for sef-expression by your empoyees and give them resources to do that. You wi need to be ready to hear your empoyees express their opinions about everything in your organization and act upon what you are hearing. The annua empoyee satisfaction survey may be a thing of the past as you can measure this on a daiy basis if you depoy one of these socia media patforms at work. Your empoyees can be your first and most oya customers and critiques on everything that wi eventuay be served to your paying customers. The more the chatter on these patforms, the more rea are the conversations and the more rea the conversations the more they wi impact the quaity of your products. The empoyee socia experience can have many dimensions that can touch upon every function of your organization and your organization's cuture gets exposed every day on these patforms based on how the company reacts to the incessant fow of information. This probaby represents Apri 2012 NHRD Network Journa 49

58 your biggest opportunity to harness this free but powerfu data and aso can be the biggest drawback if you do nothing with the data. If you make their workpace experience socia you stop teing peope what to do and start sharing with the same peope what you are panning to do. Once you take that step, you wi have created a commonaity and constancy of purpose and carity of thought on what the organizations stands for, what its mission and vaues are and who it is serving and how you are faring at it. Your empoyees are your most oya sodiers and you're your harshest critiques - you just need to unock their potentia Retooing HR to deiver A socia enterprise resides on the foundation of seamess rea time socia diaogue, which fues disruptive innovation through diversity of thoughts. In other words if your empoyees have the right mindset, the right incentives and the toos avaiabe to share and receive rea time feedback the earning oop becomes that much shorter and the end product that much better- Now the question is whether HR is structured in a manner that is additive to these changes that are taking pace. The roe of HR in the socia era wi either be centra to the success of an organization or wi become competey margina depending on the eadership the functions brings to bear. HR needs to be at the center of these changes - hep create new manageria and eadership competencies in its workforce, partner with business on the critica question of how work gets done, embrace socia technoogies and ead its estabishment in the organization, encourage and sustain the new empoyee socia networks and be a voice that is capabe of drowning the opponents of this change. The seat at the tabe for HR is open - transforming your organization to embrace the socia era wi get you a perpetua invitation to it. We are probaby at the brink of the next big eap in management thinking. At the beginning of the ast century we were heaviy focused on "IQ" driving success in our jobs: abiity, knowedge and skis mattered. We then reaized that cassic inteigence aone does not drive impact, so we added "EQ" to the success mix: empathy, sef-awareness and sef-contro aso mattered. Now with the birth of the socia enterprise we need to add "SQ" or socia quotient to this ist. Our abiity to harness socia technoogies and buid our business and peope strategies around the concept of socia wi transform how we communicate, coaborate and create. Each time we think about the power of the socia enterprise we are constanty awed. Its impact on peope on a persona eve is aready significant. However we cannot ignore the impact it is making on how we get work done and how organizations are going to be transformed by it. Unike a typica business or industry change that grows ineary, the dawn of the socia era at work is happening more rapidy than we thought possibe. An egaitarian and connected word beckons us where the principes of work as we know it today are being disrupted at the roots. It time to Question, Disrupt and Redefine our roes. Wecome to Work - version S.0! In Concusion: A socia enterprise is not centered around socia technoogies but on peope and their socia experiences. 50 Apri 2012 NHRD Network Journa

59 They coud be your customers or your empoyees. Uneash the power of sharing within your organizations - you wi be amazed at what you hear and how rich that feedback can be. Innovation can happen anywhere, it's immersed in every singe job in an organization. Managers need to inspire and enabe. They don't just ead teams, they ead by exampe and drive innovation on the ground. Work structures are as critica as formay designed organization structures. Pay attention to how work gets done in your organization and chaenge it at every eve Workpaces need to be designed around socia experiences aowing for sefexpression and persona growth. Create a unique advantage to your organization on buiding an empoyee socia experience The Socia Quotient is an important eadership trait that everyone in your organizations she possess more and more off. The hamark of the socia enterprise is to be agie, restess, ever evoving, coaborative, innovative and inventive a the same time. Organization structures in a socia enterprise drive true empowerment where impact matters more than process, where the onus of eadership is not in the hands of a few, where innovation matters not knowedge. If we as HR eaders have the foresight to understand this phenomenon then we can ead change aong with the business. The onus is on HR to Question, Disturb and Redefine. Apri 2012 NHRD Network Journa 51

60 DESIGNING HIGH PERFORMANCE WORK ORGANIZATIONS -ROLE OF STRUCTURE Dr. PALLAB BANDYOPADHYAY Abstract This paper begins with an attempt to understand the High Performance Work Organization as a concept comprehensivey since the avaiabe iterature indicates presence of very wide-ranging characteristics of the same. It summarises and buids a focus on the essentia characteristics that separates a High Performance work organization from other work organizations. Consequenty it traces the evoution of the High Performance work organization concept and traces the reationship organization structure has payed in this evoution process. Furthering this discussion, it aso anayses the new forms of organization structures that have been evoved in 21st Century primariy to keep pace with the extraordinary changes that are taking pace in the business environment in which they existed. It then buids on another inter-reated ingredient for designing High Performance work organization - earning organization and supporting processes that are essentia aong with appropriate organization structure for making it a success. At the end, a pertinent question is raised about the need to experiment with aternate forms of HR organization structure for creating a High Performance HR work organization in the Indian context, especiay in the present day scenario About the Author Dr. Paab Bandyopadhyay currenty heads the country HR function for India for both R&D and Saes as Director-Human resources for Citrix based at Bangaore. A doctora feow in HRD from XLRI, he has more than twenty four years of professiona experience. Prior to joining Citrix, he was with De Services, India. A member at the Nationa HR and IR/ER committee of CII. Pubished severa papers in eading HR journas and aso the guest editor for NHRD Journa. Dr. Paab is an honorary member of the HR Academic Area Advisory Counci of Symbiosis Institute of Business Management and aso a research guide for PhD students under the Facuty of Management Symbiosis Internationa. He is an expert reviewer at Harvard Business Schoo Press. High Performance work organizations - What it is and what it is not High Performance work organization is the buzz word in HR vocabuary today. However, it is obvious that it attributes different meanings to different peope. To begin with therefore, I have attempted to understand this concept comprehensivey before even ooking at the roe of structure in designing one. As apty put by Gephardt & Van Buren, (1996) "there is no singe, agreed-upon definition of a High-Performance work system, or consensus about the components it shoud have". However White (1994) whie writing about the process of deveoping eaders for the High-Performance workpace defined it as a pace where you 52 Apri 2012 NHRD Network Journa

61 have "extraordinary capabe peope, working in teams, equipped with proper technoogy, focused on satisfying the customer and improving work processes." To me it summarises the essence of High Performance work organization. In one of the most comprehensive meta-study conducted by Kirkman et.a (1999) from Centre for Creative Leadership found out five distinct components that characterises an idea High Performance work organization. These are isted beow: (1) Sef-managing work teams (2) Empoyee invovement, participation, empowerment (3) Tota quaity management (4) Integrated production technoogies (5) The earning organization It is absoutey fundamenta therefore to touch and fee the sou of High Performance work organization, without which we wi not be abe to have a practitioner's perspective to understand the impact of organization structure whie designing one. So what it is? Kirkman et a (1999) after painstakingy going through 168 research studies apty summarised them as foows; "We beieve that the High Performance work organization is probaby best defined as an organizationa system that continuay aigns its strategy, goas, objectives, and interna operations with the demands of its externa environment to maximize organizationa performance. Thus, it is not so much what a High Performance work organization is but what a High Performance work organization does - continuay and dynamicay adjusting to its environment." It is in this context organization structure pays an important roe in designing a High Performance work organization. Evoution of organization structures -the new forms to adapt to environmenta change and enhanced performance There are many researchers who have pointed about importance of organization structure and its impact on organizationa performance. Perhaps Burns and Staker (1961) from the Tavistock Institute were the first to concude that if an organization needs to achieve maximum performance then its structure must match the rate of change that the environment in which it exists. As can be seen from the above, High Performance organization does achieve exacty the same as its outcome. Muins (1993) and Mabey et.a. (2001) defined the organization structure as the pattern of reationships between the roes in an organization and its different parts. They aso concuded that the purpose of the organization structure is to faciitate aocation of work and responsibiities in order to direct activities and achieve organizationa goa. Structure thus serves as toos for managers to pan, direct, organize and contro their functions. However, it is inherent that organizations require a hierarchica command and contro structure for its effective functioning. Organization researchers ike Saaman (2001) beieved that the reason for such evoution was because of the beief that centraised production with division of abour offered more contro over their workers and this in turn enabed them to promote improvements in production methodoogies. Tracing this pattern of evoution of such organizationa structures, Mabey et.a. (2001) apty commented "ta structures were created with as many as 20 pus eves between the chief executive and the shop foor operative. Manageria contro of empoyees at a mutipe eves was based on a mixture of direct command and budgetary responsibiity. Hierarchy, command and contro were the governing principes of empoyee management."this trend continued ti the mid of 20th Century where organizations created huge corporate structure to expand and manage their nationa and goba expansion pan efficienty. However by the ast decades of Apri 2012 NHRD Network Journa 53

62 20th Century corporates roes and responsibiities began to devove out to more decentraisation and formation of smaer and independent Strategic Business Units (SBU) in order to become more nimbe and respond to match much faster environmenta changes coming out of socia, poitica and aspirationa changes of a stakehoders incuding empoyees and customers. As organization researchers ike Ashkenas et.a. (1995) pointed out amost a organizations began experimenting with some form of organizationa structure changes. This is the time when many arge corporations were broken into smaer units, bureaucracies were de-ayered, right/ down-sized, business process reengineering became more pronounced in order to ensure optimum return to sharehoders, or in other words to become more performance oriented. As Mumford and Hendricks (1996) pointed out many CEOs used this process to get rid of huge bureaucratic contro and chain of command. However, these changes did create a negative impact on empoyee behavior and morae. Couson and Coe (1991) pointed out that many were faced with issues of work-overoad, increased work-reated stress, ack of vision, poor decision meeting and corporate in fighting. In spite of these i effects, a new sient revoution was taking pace to make peope beieve in newer reationship between organizationa structure and its performance. The word was moving from the od success factors for organization structure that were characterised by size, roe carity, speciaisation and contro to a newer form that were characterised by speed, fexibiity, integration and innovation (Ashkenas et. a.,1995). The new forms of Organization Structure in 21st Century I woud ike to tak about two great organizationa researchers who were first to notice the changing trend in organizationa structure. They were the pioneers who in their own origina way contributed to the new forms of organization structure that are aready emerging as successfu aternatives to design High Performance work organizations in 21st Century. The first was Chares Handy from London Business Schoo. Handy was the first (1990) to notice that the od mechanistic system was breaking down everywhere, Handy (1990, 1993) has written extensivey the importance of cuture and its reation to organizationa design and structure and the need for the new form of organizationa structure to suit both the environmenta change and the change in aspirationa eve of peope. Handy was the first to use the metaphor of Shamrock, a three-eafed od white cover, ( a symbo of Ireand ) in describing the modern day organization as the 'Shamrock Organization' consisting three parts. Firsty there is a sma core of permanent key empoyees who keep the company operating and deveoping; secondy is the 'contractua fringe', i.e. subcontractors who are engaged as needed and paid by resuts; and thirdy the fexibe workforce, often casua and/or part-time empoyees who are taken on as and when needed. The second thinker was Peter Senge from MIT. He was the first to point out (1992,1994) that it is a egitimate roe of a manager is to design an organization's structure; yet this is one of the most negected responsibiities that a manger in most organizations woud manifest. He was one of the eariest organization thinkers who iustrated with exampes from Johnson and Johnson in 1982 when their cear sense of purpose effectivey guided them through the major Tyeno crisis that even threatened its existence. He argued therefore need for emergence of an organization structure buit upon a foundation of core vaues and purpose. 54 Apri 2012 NHRD Network Journa

63 Foowing this, Senge, Lewin and Regine (1999) documented the case of St Lukes, the award winning advertising and communication organization which had buit itsef on vaues and mora principes. McMian (2002) beieved that the nature and importance of organization structure and the underpinning design principes are not yet fuy understood by management experts. Yet they pay a key roe in impacting organizationa performance. She beieved the soution for success in future ies in moving from "Cassica Science Mode " that was characterised by inear, hierarchica, reductionist, controing, infexibe, uniform and centraised ways to "Compexity Science Mode" that are characterised by exacty opposite characteristics, namey, non-inear, nonhierarchica, hoistic, sef-organizing, fexibe, diverse and networked ways of functioning. I woud ike to cite the work done by Church et.a. (1998) in this regard on documenting the Microsoft experience, which undoubtedy is an exampe of High Performance organization in today's word. I woud ike to specificay point out this study to indicate how fexibiity when aowed to permeate the organization's structure, systems, and practices can create a truy High Performance work organization. By using the Burke-Litwin mode of organizationa performance and change the researchers concuded that the abiity to manage three apparenty paradoxica vaues were key strengths for Microsoft corporation. These three apparent paradoxica vaues were: 1) Look ahead, but focus on deivering resuts now. 2) Individuas make unique contributions, but teamwork and coordination are critica. 3) Customers are important, but they can't drive everything you do. A these new forms of organization structures resembe in one basic aspect and that is in their endeavour to break free from the traditiona command, contro oriented, predominanty hierarchica and bureaucratic form to attain High Performance orientation. It is therefore no surprise when we see Mabey et. a. (2001) echoed the point of view that I have tried to reinforce in this artice as they went on to comment "the new watchwords are teams (preferaby cross-functiona), atera communications, the minimization (if not outright remova) of hierarchy and the sparse use of rues. Informaity and the expoitation of expertise, wherever it may be in the corporation, are the essentia idea. With some variance of emphasis, the same basic tenets can be found underpinning the so-caed "High Performance work systems" and the "knowedge creating companies." Learning Organization - the essentia ingredient for designing High Performance work organization This artice wi be incompete if I do not mention about a very important factor that needs to kept in mind whie creating the appropriate organization structure for designing High Performance work organizations. This is about processes that are required to support the structure which can faciitate transforming individua earning to organizationa earning. I woud ike to mention the proposition put forward by organization researchers Popper and Lipshitz, (1998). They taked about a two-pronged approach for organizationa earning, namey structura and cutura. They defined structura earning as earning in organizations, which occurs at the individua eve and cutura earning that happens between individuas with the organization as earning agent. The second one in organizations happen when they are Apri 2012 NHRD Network Journa 55

64 supported by supportive organizationa earning mechanisms. The researchers further postuated that these earning mechanisms institutionaise structura and procedura arrangements that in turn, enabe organizations to systematicay coect, anayse, store, disseminate and use information reevant to the performance of the organization and its members. In today's context where innovation is fast becoming the too to achieve unbeievabe growth rate which is often attributed as biggest financia performance indicator (Appe crossing its market cap beyond 500 biion US doars recenty), organization structure that can faciitate individua earning in organizationa context assumes a far greater significance. One has to remember that organizations in 21st Century are facing a compeing need for fast-paced earning and are continuing to move toward knowedge-based, distributed information. Socum et.a. (1994) postuated that in today's organization, High Performance can ony be achieved where organization earning needed is to be used as a strategy for competitive advantage. They proposed a three-point action pan: (1) deveop a strategic intent to earn new capabiities, (2) commit to continuous experimentation, and (3) seek to earn from past experiences - both success and faiure. In concusion we might therefore argue that the key to design an effective High Performance work organization wi require an adept form of organizationa structure couped with inteigent and fexibe organization earning processes and systems that can truy everage individuas to earn seamessy and create innovative services and products that can serve as competitive advantages for their respective organizations. Are we creating High Performance HR work organizations? At the risk of faing competey out of favour with many of my feow HR professionas, I thought of ending this artice by asking a question that I am sure is going to raise a ot of debate. And the question is What about creating a high performing HR work organization by experimenting with aternate form of HR organization structure? How many HR eaders are ready to experiment with HR organization structure to attain High Performance? How many exampes can we cite where we can at east show some experiments that have begun? Unfortunatey I have not heard of any in the recent past. On the contrary most HR organizations in India are busy in repicating the most used HR organization structure which is sti tied up with functiona underpinning - HR Business partnering function couped with HR shared services/hr operations and Centers of Exceence (COE) with L&D, C&B and so on. Is this the best structure keeping in mind the current compexity of Indian business environment and changing aspirations and mind set of Gen Y empoyees? I do not have the answer but my readers might have. I am ony trying to point out an aternate point of view by asking this question? Athough I am sure, not every practicing HR Manager or academic woud endorse my viewpoint; but I surey think it wi be hepfu for many of them to introspect and search for an aternate soution. It is at this juncture, I woud ike to bring to the notice of HR professionas in India as what management guru ate CK Prahaad (1998) predicted about future business environment characterised by eight discontinuities. He had foreseen these eight discontinuities dominating the goba 56 Apri 2012 NHRD Network Journa

65 business environment. These are: (1) goba markets and customers; (2) dereguation and privatisation; (3) voatiity (demand and cyce time); (4) convergence of mutipe technoogies; (5) indeterminate industry boundaries that require more fexibiity in response capabiities than focus; (6) increased importance of industry standards competition and the resuting coaition competitions; (7) disinter mediation that changes the distance between producer and user (e.g., Word Wide Web) and (8) movement from compiance to business opportunity viewpoint with respect to the environment. As we can see now what he had predicted fourteen years back have a become reaity today both in India as we as gobay. In this context he had aso predicted that "earning to forget - unearning what used to work in the past but is no onger reevant may be the most difficut task." Perhaps this wi apty summarise my apprehension whie ending this artice. But I am hopefu. Since I beieve younger professionas from HR fraternity wi not shy away from experimenting with HR structure in organizations and wi prove me wrong in days to come. References 1. Ashkenas, R., Urich, D., Jick, T., and Kerr, S. (1995): The Boundary-ess Organization breaking the chains of organizationa structure. San Francisco, Jossey-Bass. 2. Burns, T and Staker, G.M (1961): The Management of Innovation. Tavistock 3. Couson- Thomas C and Coe, T. (1991): The Fat Organization: Phiosophy and Practice. British Institute Of Management 4. Church, A. H., Wacawski, J., McHenry, J. J., & McKenna, D. (1998): Organization in deveopment in high performing companies: An in-depth ook at the roe of O.D. in Microsoft. Organization Deveopment Journa, 16:3, pp Performance work systems. Training and Deveopment, 50:10, pp Handy. (1990): The Age of Unreason. London, Arrow Books Ltd. 7. Handy. (1993): Understanding Organizations. London, Penguin Books Ltd. 8. Kirkman,B.L, Bradey, L., and Young, D.P (1999): High-performance work organizations :definitions, practices, and an annotated bibiography, Centre for Creative Leadership, USA 9. Lewin, R. and Reagine, B. (1999): The Sou at Work. Orion Business Books. 10. Mabey, C., Saaman, G., Storey, J. (2001): Organizationa Structuring and restructuring in Saaman, G.ed. Understanding Business Organizations. London, Routedge. 11. McMian, E. (2002): Gephardt, M. A., & Van Buren, M. E. (1996): The power of High Considering organization structure and design from a Compexity Paradigm Perspective' in Frizzee, G. and Richards, H. (eds.) Tacking industria compexity: the ideas that make a difference. Institute of Manufacturing, University of Cambridge. 12. Muins, L.J. (1993): Management and Organizationa Behavior, London, Pitman pubishing. 13. Mumford, E, and Hendricks, R. (1996): Business Process re - engineering RIP, Personne Management. Institute of Personne and deveopment, May 14. Popper, M., & Lipshitz, R. (1998): Organizationa earning mechanisms: A structura and cutura approach to organizationa earning. Journa of Appied Behaviora Science, 34:2, pp Prahaad, C. K. Managing discontinuities (1998): The emerging chaenge. ResearchTechnoogy Management, 43:1, pp Saaman, G. (2001): The Emergence of New Work Forms in Saaman, G.ed. Understanding Business Organizations. London, Routedge. 17. Senge, P. (1992): The Fifth Discipine; the art and practice of the earning organizations. London, Century Business. 18. Senge, P. (1994): The eaders New Work in Mabey, C.and Ies,P.eds Managing Learning, London, Routedge 19. Socum, J. W., Jr., McGi, M., & Lei, D. T (1994). The new earning strategy: Anytime, anything, anywhere. Organizationa Dynamics, 23:2, pp White, J. B. (1994): Deveoping eaders for the high-performance workpace. Human Resource Management, 33:1, pp Dr Paab Bandyopadhyay is currenty working as Director (HR) with Citrix systems, at Bangaore and can be reached at bandyopadhyaypaab@yahoo.co.in.the view represented here is that of his own and does not necessariy represent that of the organization he works for. Apri 2012 NHRD Network Journa 57

66 EVOLUTION OF ORGANIZATION STRUCTURES IN NEW AGE TECHNOLOGY & RESEARCH ORGANIZATIONS RAJ RAGHAVAN Abstract The author initiay introduces us to the origin and history of the organizationa structures and moves on to expain about the transitions and product and the internet technoogy andscape. The artice aso defines the importance of the organizationa structures, and gives a view on the important questions on organizationa structuring. About the Author Raj Raghavan is Amazon India's Country HR Leader and eads their Human Resources function for their Deveopment Centers ocated across the country. Prior to this he was wih Genera Eectric's India Technoogy Centers. Previousy, Raj hed various senior HR eadership roes at HSBC Goba Resourcing, Uniever (Brooke Bond Lipton), and Ford Motor Company. He earned his Undergraduate Degree in Economics from University of Madras, India and PG in Personne Management & Industria Reations from Madras Schoo of Socia Work, India. INTRODUCTION Organizationa structures deveoped from the ancient times of hunters and coectors in triba organizations through highy roya and cerica power structures to industria structures and today's postindustria structures. Advent of high technoogy and research organizations have further refined this structure to refect how best to achieve business resuts out of structures or ack of it. The eary theorists of organizationa structure, Tayor, Fayo, and Weber "saw the importance of structure for effectiveness and efficiency and assumed without the sightest question that whatever structure was needed, peope coud fashion accordingy. Organizationa structure was considered a matter of choice... When in the 1930s, the rebeion began that came to be known as human reations theory, there was sti not a denia of the idea of structure as an artifact, but rather an advocacy of the creation of a different sort of structure, one in which the needs, knowedge, and opinions of empoyees might be given greater recognition." However, a different view arose in the 1960s, suggesting that the organizationa structure is "an externay caused phenomenon, an outcome rather than an artifact. "In the 21st Century, organizationa theorists such as Lim, Griffiths, and Sambrook (2010) are once 58 Apri 2012 NHRD Network Journa

67 again proposing that organizationa structure deveopment is very much dependent on the expression of the strategies and behaviour of the management and the workers as constrained by the power distribution between them, and infuenced by their environment and the outcome. Over the many years that I have been an HR practitioner, I have observed as many of you have, the significant changes that have come about in how successfu organizations organize themseves. The traditiona hierarchica organization structure continues to work in certain industries whie the more nonconventiona ones chose to adopt variants of structures naming them, functiona structures, matrix structures, no-structures, etc., In a certain arge technoogy company, there sti exists the concept of "pizza teams" where the intent is to have sma, expertise driven, functiona teams that can feed themseves on two pizzas a day and yet deiver outstanding customer and sharehoder vaue in terms of innovation, speed of execution, etc., The key here was to keep structures simpe, in some ways non-existent. TRANSITIONS I have been extremey fortunate in my career to have managed HR across industries spanning FMCG, Automobie, Manufacturing, Consumer Durabes, Goba Research and now Technoogy. It was fascinating to see the number of changes that some of these companies went through in the ast two decades and how some of it has been a resut of structura change. GE, where I spent about 10-years can make a cassic case study of how the organization transitioned from a predominanty manufacturing company to a top-notch technoogy product company that it currenty is. Their Goba Research Center in Bangaore probaby empoys the highest number of Ph.Ds that private sector empoys in India. The way they are structured there is much different from the way they woud be structured esewhere in the word or in any other business even in India. When Professor Vijay Govindarajan (VG) and Jeff Immet, GE's Chairman co-authored a Harvard Business Schoo artice entited "Reverse Innovation: How GE is disrupting itsef" in ate 2009, they unwittingy eaked out their new India organization structure which drew a ot of attention in Indian media than the crux of the artice that taked about how GE was bugging a brand new concept in organization strategy, which I have tried to describe in a coupe of paragraphs beow. As VG makes cear, for decades, GE and other arge industria payers based in deveoped countries grew by making performance-rich products at home and then distributing them with some adaptations based on oca conditions and needs. That process is what's termed "gocaization" - a strategy, they note, that is "so dominant today because it has deivered." They continue: "Largey because of gocaization, GE's revenues outside the United States soared from $4.8 biion, or 19% of tota revenues, in 1980 to $97 biion, or more than haf of the tota, in 2008." However, as VG expains, despite past and current successes, companies such as GE are now doing an about-face since the strategy is ony skimming the surface of potentia emerging market growth. The "disruption" that is at the center of their artice can strain companies because reverse innovation requires a decentraised, oca-market focus that fundamentay cashes with the centraized, product-focused structure that mutinationas have evoved for gocaization. For exampe, GE's new handhed eectrocardiogram deveoped for Apri 2012 NHRD Network Journa 59

68 India ses for around $1,000 and the portabe, PC-based utrasound that was designed for China ses for as itte as $15,000. The authors note that with these kinds of products, companies ike GE are "estabishing ower price points, and even using the innovations to cannibaize higher-margin products in rich countries" - which is "antithetica to the gocaization mode." PRODUCT AND INTERNET TECHNOLOGY LANDSCAPE Late 90's saw the word transforming itsef! With Appe reinventing itsef with Mac and ipods, the technoogy word just about started a not-so-sient revoution. Googe then came about with a big bang by what was known as a start-up search engine company that revoutionised to becoming a technoogy powerhouse. We aso saw how Hotmai got acquired by Microsoft and how Yahoo went through vioent changes in their fortune. Then arrived LinkedIn and Facebook who competey changed the way networking took pace. If one were to attempt cosey examining their organization structures, we wi come out pretty much empty handed, probaby other than Microsoft to some extent. A friend of mine who joined one of word's eading socia networking companies commented to how there are no "offices" in their WHQ. I heard him say that the founder of the company, whose face is weknown amost across the gobe, operates mosty from a workstation aong-side engineers and ony uses office space for cosed-door meetings. Their organization is known, not to have any pre-defined organization structure. A decade ago "spaghetti" organizations were known mosty to contribute to chaos than business. This was further accentuated by the bust of dotcoms of various forms and sizes. Obviousy, not a of them faied, with one eretai dotcom of mid-90's graduating to be a eading technoogy company today expanding much beyond their origina formation days. To most of these organizations, structure is what they do not have! In one organization I know of, the ony structure they foow is what they ca "singe thread". By this they mean a singethreaded organization that is committed to technoogy and its customers and each of the sub-functions and businesses in this organization are aowed to pretty much structure themseves in whatever manner they ike as ong as that structure enabes them to be earth's most customer centric company. In most of these new age product technoogy companies, there is no pubished information or any cear understanding of how they are structured making it difficut to do any comparison of sort. ORGANIZATIONSTRUCTURING: HOW DOES IT MATTER? For a typica young knowedge worker, technoogist or not,what matters most at work is the opportunity to sove probems. The modern workforce often has reentessy high standards - many peope may think these standards are unreasonaby high. Some even ca them "high maintenance". This workforce continues to keep the pressure on Leaders and in turn HR, to raise the bar and drive towards deveoping high quaity products, services and processes. So, any change in structures or a resutant reorganization shoud strive towards having an impact on this mind-set. Ese, such changes wi not sustain themseves. As an exampe, the modern workforce needs to understand 60 Apri 2012 NHRD Network Journa

69 why corporate governance is key component of an organization structure and how it impacts their careers and company's performance and profitabiity. Taken from 'Did You Know?' video cip produced by Shifthappens. wikispaces.com, deveoped by Kar Fisch, according to the US Department of Labor, and specific to technoogy companies in that country; 1 in 4 workers has been with their current empoyer for ess than one year. 1 in 2 workers has been with their current empoyer for ess than five years. It is estimated that today's earners wi have 10 to 14 jobs by their 38th birthday. With haf of a company's technoogy popuation ess than five years od, it is absoutey important that any organization poicy is aimed at getting this tenure up a itte bit. Therefore the key is to ensure that any structura intervention has to keep in mind, the empoyee and its customer. If not, retention of customers and consequenty highy vaued empoyees becomes a business impacting botteneck. The point I am trying to make is that any action on structure or re-org, wi need to aso focus on unintended consequences. Today's HR Managers have a key roe to pay in advising business eaders and in eading change to the benefit of the organization. Many years ago, Jack Wech, the egendary CEO of GE remarked that Bi Conaty, then SVP of HR for GE was his "eyes and ears". Together, the two of them transformed this goba company for many years before the current eadership took over. IMPORTANT QUESTIONS TO PONDER What are the strengths, weaknesses, and operating styes of the company principas? I beieve that this is a critica question to ponder, if one wants to organize the company successfuy. From what I have heard and read, one of my great exampes is HP. Bi Hewett and Dave Packard instituted a decentraized structure amost from the very beginning of Hewett- Packard. They were carefu to keep the units sma, by breaking them up as they grew. In my opinion, this was one of the great drivers of HP's success, and worked we because it suited their personaities, as we as the empoyees that they hired. They beieved in "Management by Waking Around", but aso beieved in motivating high performance by aowing their empoyees to use a of their taents, without unnecessary constraints. It seems simpe, but it is often hard for managers (especiay hands-on, entrepreneuria types) to give their empoyees enough rope and space to exce. I beieve that this handsoff, decentraized approach ony worked we because this stye fit with Bi and Dave's personaities. What are the key personaity traits of your empoyees and target hires? Simiar to the question about the principas above, the organizationa stye needs to fit with the "personaity" of your company, the cuture. If you have a ot of type "A", sef-motivated peope with strong eadership skis, a decentraised organization structure may fit better than a hierarchica, centraised approach. And, this wi change over time as the organization matures and key peope og in onger tenure in the company. Are there disparate technoogies or businesses within the company? This is a big driver in deciding how to organize. If you have severa different businesses, how do they fit together technoogicay-if at a? Do they fit together from a market perspective? If there is a ot of synergy or need to coordinate between technoogies/ products, a centraised, hierarchica approach may work best. The ess "fit" that Apri 2012 NHRD Network Journa 61

70 there is between your core technoogies or products, the more incination I woud have to organize using a decentraised, business unit approach. This assumes that the resources are avaiabe for a decentraised organization. But if resources are so scarce that you can't decentraise propery, does it make sense to try to be successfu with mutipe disparate products/technoogies anyway? TAKE AWAYS FOR HR MANAGERS Taking refuge under the od adage "change is constant" I have come to reaise that over the next severa years, many an Indian Corporation wi be enthused to make organizationa structura changes in order to prope change & innovation and move ahead of the pack. In doing so, the HR professiona wi aways have a key roe to pay to ensuring both continuity of the current cuture at the same time move towards the desired change. Having been invoved in quite a few organization structure changes, I took away the foowing key points that I thought wi hep feow coeagues. 1. Behavioura issues in structura changes revove around two major themes. One is that peope and organizations tend to reject new structures because they are reuctant to change. For this reason it is important that the change come about as part of accompanying change in the organizationa practices and cuture. It is aso essentia to incorporate organizationa earning in to the acceptance of newer structures and reorganization efforts. It is through earning (with coaching from those famiiar with peope and cuture) that the organization's members wi aow the change to take hod and reach new heights of productiveness. The second theme concerns empoyee invovement in the change and the resuting job satisfaction. This aspect reates to empowerment needed to effectivey impement newer and automated processes as a resut of structure changes. It is quite common for existing, arge corporations to augment organizationa change by impementation of more automation and/or technoogy. If it is not viewed as part of an overa transformation, the addition of technoogica process improvements or information systems which on the surface take away human responsibiity is ikey to ead to job dissatisfaction. In one sense such advancements remove the ast bit of ski that empoyees put into their job. Evidence of such discontent is given by absenteeism within the US auto industry in the 80's and 90's. The bottom ine is that as good as technoogy may be, it cannot act aone as a cure-a to improve organizationa effectiveness. 2. What was once a futuristic idea that has aready been impemented in many a new technoogy company is virtua workpace. This concept is based on the idea of empoyees being abe to work independenty as a resut of having access to information. The virtua workpace provides access to information you need to do your job anytime, anypace, anywhere... empoyees do not have to be tied to their offices to do their jobs. The idea of not even having a set office space certainy woud be a change from the typica routine of showing up at the office from 9 to 5 (ideay) and performing your work at your desk. Such a pan woud obviousy be dependent on the job to be accompished, but it is interesting to think of the supervisory impications. Such empoyees woud have the utimate amount of autonomy and woud have to be managed accordingy. Tasks woud have to be more objective or goa oriented and measures of job 62 Apri 2012 NHRD Network Journa

71 performance coud no onger depend on face to face interaction, but rather woud have to be tied stricty on the abiity to compete assigned tasks. Here, HR has a key roe to pay as they wi come under increasing scrutiny to adopt futuristic workpace ideas whie at the same time hep organizations adapt change and achieve key objectives. My refections above are just a quick take on a very compex topic. There are many different ways to organize a technoogy company for success and resutant HR chaenges and earnings-too many to discuss here. And we just touched on a few of the issues to consider. Hopefuy this short artice wi stimuate some thinking on this topic, to avoid organizationa structures which often form haphazardy as companies are started and grown. Discaimer: The author is Amazon's Country HR Leader for India. The views expressed in this artice stricty constitute the persona opinion of the author. These are not the views of Amazon or any of his previous empoyers. Apri 2012 NHRD Network Journa 63

72 REDESIGNING TO GO ACROSS BORDERS S RAMNARAYAN Abstract The artice begins on a breif on 'Hard' and 'Soft' aspects of Organizationa Architecture/ Design and goes on to discuss a few short case iustrations revoving on the topic and finay concudes on designs for today and tomorrow. The author draws out the mode in a unique way of using caseets to make the concept come aive. In more than one ways, it addresses the issues of the emergent reaities of what needs to be done beyond organization design - the human factor. About the Author Dr. S. Ramnarayan (Ram) is a Cinica Professor at the Indian Schoo of Business (ISB). After his graduation in engineering and post-graduation in management, Ram earned his Ph.D. in Organizationa Behaviour from the Case Western Reserve University, Ceveand, Ohio. During the initia years of his career, he worked for about 8 years in industry. He has been a facuty member at the Tata Management Training Centre, Pune for about 5 years, and ater a Professor at Indian Institute of Management, Ahmedabad for about 13 years. He has aso been visiting facuty at the Case Western Reserve University, and Guest Professor at the University of Bamberg, Germany. 'Hard' and 'Soft' aspects of Organizationa Architecture/ Design Organizationa architecture exists to reaise the strategic intent of the firm. Consisting of dimensions, such as organizationa structure, systems, organizationa cuture, processes, styes and vaues, organizationa architecture provides the infrastructure into which business processes are depoyed. In turn, architecture ensures that the organization is abe to reaise its core quaities across the different services it offers. Thus organizationa architecture or organizationa design is much more than organizationa structure. Whie structures and systems are usuay cassified as 'hard' aspects of design, processes and styes woud be considered 'soft' aspects of design. Using another metaphor, structure is ike a skeeta system in an anima or human being. Skeeta system provides support, form and strength to iving organizm. It has a tendency to introduce certain rigidity in functioning. Skin, musces and bone aow movement. Musces do actua moving. Bones give anchor to move against. Thus for fexibiity and range of fuid and gracefu movements, the iving organizm depends more on muscuar system. The genius of evoution is that not ony have different systems co-evoved to fufi different functions, but aso that the different systems - skeeta system, 64 Apri 2012 NHRD Network Journa

73 muscuar system etc. co-exist and function seamessy, suppementing and/ or supporting each other within certain imits. What aspects of organization design do Indian companies change when they go across borders? Do they restructure themseves to manage an acquisition? Or do they prefer the 'softer' approach of modifying processes? Answers to such questions fow from some research that we have been invoved with on how Indian companies go across borders. As a recent issue of 'The Economist' observes, "The rapid gobaisation of Indian firms owes much to takeovers. Over the past decade, there have been cross-border deas worth$129 biion". We studied how a few of the acquisitions got initiated, how the units were integrated, and how the company has been performing after the acquisition. In this paper, we have outined four short vignettes based on two organizations in our study. As can be observed from these short case iustrations, there are hardy any accounts of structura changes, but we find a number of interesting process innovations to manage acquisitions. We end the paper with a few comments and observations on what the shape of future organizations woud be ike, what requirements woud they pace on management and eadership, and how the processes outined in the paper appear to be in ine with emerging requirements of tomorrow. Short Case Iustrations Case 1 - Evoving Growth Stories to Pan for Acquisitions: At Carborundum Universa (CUMI), an engineering company beonging to the Murugappa group, an acquisition is justified not just in terms of synergies or 1 We are thankfu to the Human Capita Leadership Institute (HCLI), based in Singapore for providing6 cost reduction, but in terms of growth stories. This required a cear articuation of what CUMI woud do differenty to achieve greater vaue. The technica team was created, which was entrusted with the task of writing not one, but five growth stories. They knew we that success in a may not be possibe, but success in one coud guarantee a turnaround. The growth stories formed the basis for acquisition decision. For instance, when CUMI bought the Russian pant, they were producing roughy about 52,000 tonnes of Siicon Carbide. Even during the best of Soviet times when there was no disturbance, they never produced beyond 55,000 tonnes. One of CUMI's growth stories was that they coud take it up to 65,000 tonnes. This pan was based on severa technica improvements, such as changing the design of the furnace and changing the furnace head. They were not driven by huge capita expenditures, but by better technoogy. CUMI had worked out what they woud change, how they woud do it and how they wi monitor. Another growth story invoved changing the mix of two categories of products - crystaine materia and metaurgica materia. 55 per cent of the 52,000 tonnes that they were initiay producing was of the crystaine variety. The price of crystaine materia is 50 per cent higher than that of the metaurgica materia. Thus they were making 45 per cent of a very ow-priced materia. CUMI panned to take the crystaine materia from 55% to 80%. This woud have a huge impact on the profitabiity. When the acquisition was made, they did a quick 100-day integration pan. Within the 100 days, these growth stories were actuay roed out. The execution team was a joint team invoving members from both CUMI and the acquired company. The Apri 2012 NHRD Network Journa 65

74 teams from the foreign company came to India, the teams from CUMI went to the foreign company, and then a joint team was formed through which the execution of these growth stories was carried out. To buid mutuaity, CUMI invited the team from the acquired company to impement two or three projects in India thus aowing the Indian operations to earn from the other operations. This aso sends a message to the empoyees of the acquired unit that their skis and expertise are recognised and vaued. Once the team decides that this is a better way, then it becomes the CUMI way - open and avaiabe to a. Once execution began, and the benefits of growth stories started kicking in, the teams coud see benefits in terms of synergy, and this fostered coaboration. Of the five growth stories, two worked briianty. One worked reasonaby we, but got deayed, and the other two did not work. In terms of resuts, the unit was running at about 75,000 tonnes in In terms of product mix, they had achieved 81% crystaine variety. These changes had changed the entire game in terms of performance and profitabiity. As a resut, CUMI has been highy successfu in Russia. But one growth story faied miseraby. The Russian pant was making about 12,000 tonnes of bonded abrasives. They had a name pate capacity of 50,000; but even during Soviet times, they had made ony 24,000 tonnes. CUMI's target was that they shoud move from 12,000 to 24,000 tonnes within two years. They formed teams and started working. But as of date, they have not even come back to 12,000 that was being made and sod before the down turn. CUMI management invested huge efforts in preparing for the acquisition. It ensured that high quaity thinking and ideas were used to deveop the change agenda. The execution, however, was carried out in a non-directive mode. The company did not approach the acquisition as a 'conqueror', but as a partner. Given their coaborative, incusive cutures, CUMI eaders fet comfortabe achieving goas through infuence rather than contro. Case 2 - Mentor to Hep Buid Bridges Once an acquisition is made, a mentor is appointed to support the oca management overseas. A very senior eader from the top management committee assumes the roe of mentor for each internationa business. Caed as mentor directors, they sit on the boards of the respective subsidiaries thus assuming responsibiity to the board and for the overa success of the SBU or that internationa part of the business. Though they are caed mentors, they actuay review with the CEO of that unit, the P&L, the business pan, the capita expenditure, the HR pan, the growth pan and the R&D projects. They hep to integrate the unit with the rest of the CUMI system. A senior eader said, "For instance, an overseas operation may be strugging with a particuar probem of manufacturing. The mentor woud know that the pant in Uttarancha has soved that probem. Thus the mentor woud arrange for an empoyee from Uttarancha to make a visit and run the operation for a fortnight. Thus the overseas operation is not eft without support to try and see what can be done. Thus the mentor actuay becomes a hepfu ink to the rest of the CUMI system". Another senior eader added: "There is the soft roe of heping the CEO and other key eaders, apart from the business roe of doing monthy review in terms of P&L, baance sheet, performance, the various indices, and identifying the gaps. The roe is not merey one of doing a review and 66 Apri 2012 NHRD Network Journa

75 giving a directive. The mentor actuay gets invoved in heping the eadership team achieve those numbers. At CUMI we do this with a ot of persona touch. This is not the American way of the same system being forced on everyone. It is more a famiy way of working things together. We get different peope working together and ceebrating together. It is about sharing good practices. We trave together and exchange notes. It is a softer way of doing things". As the organization becomes arge, compex and more geographicay dispersed, 'sio' mentaity tends to creep in, and different parts of the organization do not communicate with each other. With their extensive network, individua CUMI top eaders took on the roe of 'connectors'. They activey searched for hep to sove the probems of the newy acquired units. They effectivey ensured that right peope moved to the right need areas to sove important probems. Case 3 - "Do you reay care about me?" Tata Chemicas (TCL) had set its heart on a company which was in Kenya- the Magadi Soda Company. But Magadi Soda was a part of BMGL, a UK company, and BMGL had no intention of seing one of its 'crown jewes'. After a coupe of years, BMGL was avaiabe as the private equity owner was ooking for an exit, and TCL acquired the entire group. Ramakrishnan Mukundan, CEO described how the acquisition was misunderstood a around by empoyees. He said:"we had a site in India at Mithapur; we had a site in Magadi, Kenya; and we had a site in the U.K. When I went to Mithapur, they were very worried. They were worried that we had made the acquisition saying that now you have acquired Kenya your ogica choice woud be to shut India down because Kenya is more cost-competitive. Why woud you want to put investment now in India? When we went to Kenya they were very worried. They said you acquired us because we were beating you. You wi shut us down because we're your competition. You acquired us to sta us; you did not acquire us to grow us. When we went to U.K. they said you actuay didn't want us. You wanted ony Kenya; at some point you are going to disown us. So we had a the three entities teing the business heads we don't beong to the famiy and you don't want us. I had inherited three bunches of businesses where nobody fet motivated". In another context, Homi Khusrokhan, earier CEO of TCL observed: "A very common faiing I come across in the headquarters of an expanded group is that often the peope at the centre forget to "think for two". Peope forget that now they have another two or three members in their famiy. I found this happening in Tata Tea, we after we acquired Tetey. Peope in Tata Tea were is sti ony thinking of Tata Tea. For instance, when putting out a staff notice for India, they woud forget to send a copy to the U.K. The UK empoyees aso want to know what is happening in India but someone had forgotten to te them and that creates a feeing of not beonging". Large changes ike mergers, acquisitions or joint ventures evoke strong emotions. The reactions and resistance to these changes are not merey at cognitive eve. They are aso on emotiona pane ("I don't ike it!), and on a reationship pane (I don't ike/ trust you!). Leaders must be abe to respond to non-rationa aspects, and have the abiity to respond to emotiona and trust-eve cues. They shoud be abe to buid trust and credibiity in their communication and reationship. Case 4 - "Trust is at the heart of the matter" The TCL eadership team had competed its eadership offsite just recenty. The teamconsisted of the top twenty peope of the company. There was the head of Apri 2012 NHRD Network Journa 67

76 Finance, the head of Strategy, the head of U.K., the head of U.S.A., the head of Kenya, the head of the Pesticide business, the CEO were a members participating in the offsite and deiberating together. In CEO's words, "Trusting reationships emerged as a fundamenta issue that is at the core of everything we do. How can we as a eadership team improve the trusting reationship which we have with each other, with our teams, and with our stakehoders?that came out as the crux. Of course there were two other things; strategic aignment which meant that there was a feeing that some of us were going in directions which were not in the specific corporate ine of thinking. And some peope didn't know why some businesses were not being appreciated. And third was taent management. But as we speak today if you ask everybody in the team what were the three issues, they woud say these three. But the topmost issue by a arge margin was trusting reationships. So it is something so fundamenta that you need to meet twice a year. This is despite our meetings on a reguar basis. But now at east one thing that has happened is that we are open enough to admit what is our probem. Two years ago this trusting reation woudn't have been articuated. It woud have been strategic aignment, taent, everything ese woud have come on the tabe. Now that there is enough trust to say isten I think we need to move further on this agenda. That has come out at the top of the agenda". "Left to the Indian team, they woud have raised this issue. The U.K team members amongst themseves woud have raised it. The U.S. team amongst themseves woud have raised it. But it takes a huge amount of work to reach a point where the crosscutura team states that this is an issue. To come to a point where peope openy say, "Listen, I think we probaby don't do enough to buid this reationship to a eve where we are amost ike a seamess organization; where one person can amost be absent and the other person is present there; and he can represent the other person with the same thoughts. We have not reached there". The fundamenta buiding bock of organization design is trust among key actors. When there is trust in the eadership team, so much more is possibe. Trust buiding becomes difficut because senior eaders come from different organizations with very different backgrounds and mindsets. If the top team does not work effectivey together, structura soutions at other eves wi serve itte purpose. Investments in teamwork and trust buiding, therefore, are critica. Cosing Comments - Designs for Today and Tomorrow Samue Pamisano, Chairman of IBM Corporation has discussed the evoution of the enterprise right from its eary forms to today and tomorrow. He notes that the mid-nineteenth century saw the emergence of Internationa Corporation organized in simpe hub-and-spoke networks using the basic structure of home country manufacturing and internationa distribution. The confagration of Word War I ed to the second phase. With bockage of trade-based networks and spread of protectionism, the Mutinationa Corporation emerged. These corporations buit pants in mutipe continents thus aowing them to se to important oca markets without incurring tariff penaties. Sti some tasks - R&D or product design - were performed on a goba basis. Now with the iberaisation of trade and investment fows, and the IT revoution, has emerged the Gobay Integrated Enterprise. Presenty, state borders define 68 Apri 2012 NHRD Network Journa

77 ess and ess the boundaries of corporate thinking and practice. Pamisano writes that the most visibe signs of this change can be seen in China and India. Companies are forced to choose where they want the work to be performed, and whether they want it performed in-house or by an outside partner. Such decisions are not simpy matters of offoading non-core activities nor are they mere abor arbitrage. They are about activey managing different operations, expertise and capabiities so as to aow enterprise to connect more intimatey with partners, suppiers and customers. Thus the journey through the three stages -Internationa Corporation, Muti-nationa Corporation, and Gobay Integrated Enterprise - presentsits share of chaenges. For instance, shifting to the mode of gobay integrated enterprises poses big eadership chaenges. New kinds of manageria skis woud be needed. Hierarchica, command-and-contro approaches impede information fows. Standards of governance, transparency, privacy, security and quaity need to be maintained even when products and operations are handed by organizations in many countries. We have to discover new ways of estabishing trust based on shared vaues across borders. New forms of partnerships wi be needed among mutipe enterprises in a much more compex marketpace. The processes discussed in this paper give a favour of what woud be expected. There woud be no pace for narrow-minded sefcenteredness or sefishness in the organizing ogic of such organizations. Actuay in this emerging word, the foowing principe outined in the Arthashastra around 300 BC woud assume even greater reevance: "The fundamenta principe of economic activity is that no man you transact with wi ose; then you sha not". References i "Indian takeovers abroad: Running with the bus", The Economist, March 3-9, 2012, pp ii "Don't Integrate Your Acquisitions, Partner with Them", Prashant Kae, Harbir Singh and Anand P. Raman, Harvard Business Review, December 2009, pp. 2-9 iii "Beyond the Wa of Resistance" Rick Maurer, Bard Press, 2010 iv "The Gobay Integrated Enterprise", Samue J. Pamisano, Foreign Affairs, 85 (3), 2006, pp Apri 2012 NHRD Network Journa 69

78 KEEP ASIDE THE LADDER! THE IMPACT OF GLOBALISATION ON ORGANIZATIONAL STRUCTURES B RAVI SHANKAR Abstract The artice introduces to us the technoogy of the organizationa structures when organizations expand their territories wordwide. It further expores into the process reengineering and expains how the 'Lattice' structure is the most apt and suited for today's need and deveopment. The artice aso defines how the 'Lattice' way of thinking works on a "knowedge for a" mode, which vaues transparency. Information sharing and knowedge management is promoted. Coaboration fues the engines of the attice framework. About the Author Ravi currenty heads the Peope & Cuture and HR Innovation Lab at HCL Technoogies Ltd., a 6.2 biion USD corporation with strength of empoyees. With over 30 years of varied experience across mutipe fieds in HR, ranging from founding a company (Lister Technoogies) to heading HR at Crompton Greaves Ltd & Deutsche software Limited. Ravi is we known in the industry for this expertise in HR and aso has a tremendous breadth andinsight on broad range of subjects -Business Strategy, Information Technoogy, TQM & Service Quaity.An aumnus of XLRI Jamshedpur and Harvard Business Schoo in Information technoogy, Ravi is an Executive Coach at ISB, Hyderabad for their Senior Management Leadership Program. Times have changed and organizations have evoved. Yet, on the topic of organizationa structures, we tend to turn to the pyramid as a reference. This may be the case because the compex structure is easier to understand today, than when the Pharaohs buit it. Without cear organogram roes and responsibiities, such a mammoth structure woud not have been possibe! Communities and tribes sought direction from the pyramid structure whie contributing to its changes. The structure, as we see today was perfected by Armies who needed a cear command contro of their operations. A ot of practices that we earn from our management books incuding the concept of 'Job Description' is derived from the army's operations manua, based on the premise that it is top-driven. 70 Apri 2012 NHRD Network Journa

79 Therefore, aong with organizations, the pyramid has evoved to accommodate both traditiona and current management theories and practices. When organizations began to expand wordwide, their structures aso evoved to encompass changes that come aong by competing in a goba marketpace. Reporting reationships evoved to incude empoyees who work across different ocations. For exampe, when Uniever expanded across different geographies, the HR head not ony reported directy to the oca CEO, but aso dotted ine reported to Corporate HR at the company's Head Office. Thus traditiona one-dimensiona reporting chains gave way to a new twodimensiona structure. In such structures, bowing to an od adage "You can't serve two masters" and at the same time accommodating to newer needs, HR practitioners created straight-ine and dotted ine reporting. Whie this concept is widey practiced it sometimes creates conficts and shoud be handed wisey by the eaders. Today, we are a paying aggressivey in a goba marketpace. Large organizations have severa verticas and services, on-site and off-shore empoyees and many virtua teams working together. Customer expectations and deiverabes are diverse and compex. Empoyee management across various geographies is chaenging. How do we make accommodations for these changes in our traditiona pyramid? Can the pyramid evove to provide direction in this goba economy? Yes it can. Having worked as an HR professiona for two decades, I beieved that singe box in organogram woud aways have a singe occupant. However, in the area of Cient Reationship Management, a new concept emerged with a beief that customer can be served better by two teams, hence two eaders in tandem. This made way for a new paradigm caed "Two in a Box" which is fast catching up. When Process Reengineering became a necessity for business, a ot of interna processes were undergoing radica changes. Companies discovered that the simpe adder structure was incapabe of handing new processes as workfow at every stage invoved muti-functiona teams. This made way to the first eve of 3-dimensiona structures where teams with members from different adders had to operate as one entity. Each bock of work fow became a new function. For exampe a function ike "Inward ogistics" was created to ensure smooth fow of raw materia instead of three traditiona departments such as purchase, stores and transportation operating independenty. With an advent of virtua teams and acrossthe-border communication, the 9 to 5 job has been repaced with teecommuting, video-conferencing and work-from-home options. These options continuousy question the viabiity of the traditiona adder structure. However, it is aso true that century od mind-sets are not easy to break. Ask Gaieo! In addition, we are at a defining juncture where five generations of empoyees come together in the workpace. Research suggests that currenty around 50% of the popuation < 35 years and predicts a future where Gen Y wi contribute to 60% of the goba workforce. 'Cimbing the corporate adder' is a popuar term we use in businesses. Whie standing on a adder, your earning and accessibiity to information is restricted to the rung you are standing in. Did you know that the adder may we be obsoete soon? Whie the corporate adder may have been a 'onesize-fits-a' structure that suited a traditiona industria unit, it cannot hep us in today's organization. Apri 2012 NHRD Network Journa 71

80 What works today is a 'Lattice' structure. Mathematics defines 'Lattice' as a threedimensiona structure that extends infinitey in any direction. Lattice structures are fexibe structures where empoyees can move in horizonta, vertica and diagona paths whie deveoping their expertise. Lattice structures promote better earning, networking and coaboration whie giving peope the opportunity to define their own paths. Research indicates that empoyees who work in such structures show tendencies to be sef-directed, motivates and assume roes of eadership with more ease. They work as independent nodes in a highy interdependent fashion. Organizations that are based on these structures beieve in mentoring and not bossing. The new-age 'boss' redefines his/her roe as a 'mentor' who engages activey in sharing knowedge with his team. The 'Lattice' way of thinking works on a "knowedge for a" mode, which vaues transparency. Information sharing and knowedge management is promoted. Coaboration fues the engines of the attice framework. So what happens when you introduce the attice structure in your organization? You become empoyee-friendy and give your empoyees the space to grow and fourish. Neither wi they hesitate to 'speak up', nor wi they refrain from innovation. A these factors are utimatey beneficia for an organization's growth. One of the biggest advantages of Lattice structures are that they fit in seamessy into the virtua word. They are aigned with the expectations of Gen Y who are the future of our corporate word over. Gen Y represents a taented group of highy motivated peope who are ooking for fexibe organizations. They beieve in 'getting the job done' and not on traditiona constraints ike 'working during particuar hours' or from 'one ocation'. Frontier Communications is a US-based teecommunications provider where 30% of their ca center agents work remotey, often from home. They are 25% more productive and have doube the retention rate of agents who work in the company's traditiona ca centers When a group of 10 Gen Y empoyees expressed the desire to work on a socia networking website meant excusivey for HCL empoyees, we gave them the green signa. Today, Meme is a pioneer in corporate socia networking. In six months, the website went from 200 registered users to 60,000 active ones. Our Leaders engages with our empoyees through MEME. Empoyees discusses about company's future, Pans, Strategy etc through this innovative medium breaking every stage of adder. Empoyees cut across adders, geographies and function to coaborate on their work and for their earning requirements. Recenty, I came across an onine presentation by the Roya Society for the encouragement of Arts, Manufactures and Commerce (UK) which asks what makes highy taented and motivated peope coaborate on projects that they give away for free! Facebook, Linux and Wikipedia are resuts of such efforts. The answer is passion and the opportunity to master their skis. Research competed by Lee Feming, a business administration professor at Harvard Business Schoo reveas that the breakthroughs that arise from mutidiscipinary work "are frequenty of unusuay high vaue-superior to the best innovations achieved by conventiona approaches. According to Catheen Benko of Deoitte and Moy Anderson, who have researched The Corporate Lattice and the impact it has 72 Apri 2012 NHRD Network Journa

81 on today's organizations, there are three key components to the Lattice Structure. They invove how careers are buit, how work gets done and how participation is fostered. Benko has aso used the Lattice Structure to bring about a new concept in Taent Management. She refers to fexibe workarrangements as an one-off instance and cas for a more a-encompassing view of career management caed Mass Career Customization where empoyees are encouraged to take ownership for their careers and can 'dia up' or 'dia down' their commitments in terms of deiverabes, time spent etc. So can Mass Career Customisation work for us? Imagine you are in a saad bar with a wide range of vegetabes and dressings to choose from. You can customise your mea to what works best for you. Imagine now, if you coud do that with your career. Whie there is no 'one' way to decide what works best, such innovations show a paradigm shift in the way organizations are evoving and experimenting. Ladder or Lattice, managing knowedge workers in modern corporations is chaenging. We are in a transitiona phase where HR departments need to define their company's organizationa structure by striking a baance between emerging concepts and proven methods. How we adapt a structure for our organization depends entirey on what our needs are. It requires carefu thought, panning and most importanty, an open mind. References Marquez, 2010, The Perfect Fit, Workforce Management American Management Association, 2006, The Organization's Faut Benko, Anderson, 2011, Mass Career Customization Apri 2012 NHRD Network Journa 73

82 STRUCTURES IN A MULTI-LOCATION ORGANIZATION AND ITS IMPACT SREEKANTH K ARIMANITHAYA Abstract The author starts by giving an introduction on the various organization structures for various organization needs and goes on to expain about the abiity of the structure to aid the organization in execution. The artice deves deeper into deciding optimum and effective structure giving a cear picture on the different perspectives of the structures. A series of tests to hep determine the organizationa structure and their strengths at different situations and gives an insight of the different types of structures and their uses. The author finay concudes by saying that structure is business enaber, it is not an end-a. About the Author Sreekanth K. Arimanithaya is Vice President & Chief of Human Resources of Britannia. He is aso in charge of Information Technoogy (IT). He is a passionate HR professiona, with a diversity of experience across industries, geographies and roes, having worked with TVS Motors, Toyota, Phiips and Genera Eectric (GE). During HR eadership position in GE and Toyota he has ead many transformation initiatives. He is quaified in TQM, Six Sigma (master back bet in Sis Sigma), Change Management (Change Acceeration Process). There is no universa, 'one best' way to organize," because organizationa structure is ony "the mechanism that takes strategy, in the context of environment, resources, and history, and transforms it into output. Nader and Tushman (Organizationa Architecture: Designs for Changing Organizations) I. Introduction: One Structure does not fit a Changing economic conditions, such as increasing financia risks, technoogica innovation, gobaisation and customer voatiity, prompt organizations to reconsider their core vision and strategies, and reassess their structures to ensure continuous aignment. When current structures impede organization's abiity to impement new strategies or disrupt the fow of key business processes, restructuring is in order. Unfortunatey, institutiona history and benchmarking offer itte guidance for how individua companies shoud structure themseves. 20th Century trends initiay favoured moving from highy centraised structures to highy decentraised structures to boster innovation and customer service. In the 74 Apri 2012 NHRD Network Journa

83 atter haf of the century, they returned to greater centraisation in efforts to garner cost savings from technoogy and eiminate redundant activities. Few organizations choose either extreme and instead maintain myriad hybrid structures that often rey on shared-services to expoit economies of scae whie eaving customer-facing and entrepreneuria functions decentraised. Utimatey, because "there is no universa, 'one best' way to organize," the chaenge of restructuring ies in identifying and utiising frameworks for making organizationa choices. Structure is an organizationa means to a strategic end and that centraisation and decentraisation of structure for muti-ocation organizations bring different strengths and weaknesses to bear against strategic goas II. Structure enabes Execution: Structure is driven by Strategy and representative of Cuture Beow are exampes of ways in which various companies used organizationa structure to meet that objective. Structuring for Core Competence: Many companies were organized around its core competencies that aowed it to operate in remote and dangerous terrain and support continua growth. Structuring for Customer Service: Some companies deveoped a hybrid structure incuding vertica departments and horizonta processes that baance the distinct product ines and cross-functiona coordination necessary to serve customers. Structuring for Strategic Aignment: Foowing a shift in growth strategy, a few organizations discarded its bureaucratic structure in favour of one that incudes business unit autonomy supported by eader accountabiity and cross-unit coordination. Structuring for Network Management: Some companies reconfigured its organizationa structure around distribution-based businesses competing in two markets to enhance cross-saes between markets. Structuring for Competitive Advantage: Some companies fet the need of key business groups into more formidabe operating companies whie divesting non-core subsidiaries. The new units wi be argey autonomous save their strategic ties to the centraised management board and shared services for corporate support. As operations become goba or mutiocationa, and continue to grow in voume and compexity, organizations are recognising the vaue of a muti-ocation or goba organizationa structure that inks corporate strategy with the needs of the oca business units. Organizations started everaging structure as a competitive advantage. Over time, however, companies have shifted from a muti-domestic structure, or one in which a company operates mosty or whoy autonomous subsidiaries in mutipe ocation, to a goba structure. Companies successfuy operating a goba structure manage to baance the independence of goba subsidiaries against the need for Apri 2012 NHRD Network Journa 75

84 centraised strategic direction and integration. The chaenges associated with designing effective and efficient muti-ocation structure incude the foowing: The "think goba, act oca" mantra has proven perenniay centra to the success of most goba companies as business units become increasingy distinct, diffuse and independent. The key to goba success is to integrate strategy wordwide whie retaining oca autonomy. The gobaisation of most companies is accompanied by greater decentraisation. Most goba companies recognise the critica need for both forma and informa mechanisms to ink business units scattered across the ocations. The success of a particuar organizationa structure depends heaviy upon the impementation of the structure and the company s understanding of its strengths and weaknesses. The majority of companies have osciated between various organizationa structures, atering their structures according to changes in strategy, organizationa trends, and needs of the marketpace or simpy senior management and eadership transitions. markets. Recognising that market conditions vary markedy among regions, companies have estabished structures that temper the company's corporate vaues and strategy with the unique characteristics of the marketpace in which it operates. III. The Framework: Deciding optimum and effective Structure The baanced scorecard framework is highy adaptabe to the mission, strategy and environment of organizations. Companies can customise this framework by breaking mission and strategy statements into reevant perspectives and then assessing the resuting decision points with targeted questions. The perspectives of the baanced scorecard (isted beow) may be adapted to assess tradeoffs between centraisation and decentraisation for muti-ocation companies: Financia Perspective - incudes eements of resource aocation and scae economies. How wi the structure affect costs? Strategic Perspective - incudes eements of competence, cuture and eadership. How wi the structure affect human capita? Operationa Perspective - incudes eements of process and coordination. How wi the structure affect key processes? Most companies view the needs of a marketpace as more vauabe than the preservation of a consistent organizationa structure in emerging Externa Perspective - incudes eements customer service and marketing. How wi the structure affect market position? 76 Apri 2012 NHRD Network Journa

85 Perspectives Decision Points Considerations FINANCIAL PERSPECTIVE Scaabiity Which functions reaize How wi the structure Cost Structure economies of scae? affect costs? What resources may be shared by a business ines? STRATEGIC PERSPECTIVE How wi the structure Innovation/ How rapidy must the company affect human capita? Entrepreneurship innovate to remain competitive? Cuture/Vaues How important is common Competencies cuture and shared vaues? Leadership Stye What core skis or attributes shoud be shared by a business ines? Does the desired cuture favor top-down or bottom-up eadership? OPERATIONAL PERSPECTIVE How wi the structure Oversight/Contro Which processes or standards affect key processes? shoud be monitored across a business ines? Speed of Business What types of decisions shoud Interna Networks be made on the ine? Which functions must coordinate to accompish goas? EXTERNAL PERSPECTIVE How wi the structure Customer Proximity How important is proximity affect market position? Market/Landscape of the customer to the ine? Competitive How does the company gain Advantage knowedge of its current Mission and prospective customers? Where does the company find competitive advantage? How does each function contribute to the company's mission? Apri 2012 NHRD Network Journa 77

86 Michae Good and Andrew Campbe deveoped a method for considering organizationa structures. Good and Campbe suggest that organizations use two types of tests to baance "the right amount of hierarchy, contro and processenough for the design to work smoothy but not so much as to dampen initiative, fexibiity and networking." "Fit" tests provide an initia screen for design aternatives, reveaing whether the structures support the company's strategy, taent poo and situation. "Good design" tests hep refine a chosen design by addressing potentia probem areas, incuding the baance between empowerment and contro. "Fit" Tests The Market Advantage Test assesses a design's fit with the organizations' market strategy and sources of competitive advantage. The test has three components: 1. Determines whether structure fits market strategy: Does the design refect appropriate eves of focus on key market segments? 2. Determines if structure directs enough attention to each market segment: Is every segment owned by at east one business unit? 3. Determines if structure supports key sources of market advantage and reated operating initiatives (i.e. speed to market, soutions seing, etc.) The Parenting Advantage Test invoves defining the corporate-eve or "parent" activities that add vaue to the entire organization and therefore shoud be aocated to the corporate centre (e.g., managing government reations, broady maintaining key organizationa capabiities) and evauating whether the design supports these propositions. The Peope Test considers the key payers in the organization and determines whether "the design provides the appropriate responsibiities and reporting reationships and wins their commitment." The test has two components: 1. Determines whether the structure defines roes and responsibiities such that empoyees everage their strengths and interests. Are there "osers" (individuas dispaced or disempowered) in the new structure? Has the organization managed them appropriatey?) 2. Assesses staffing needs: Have pivota positions within the new structure been appropriatey identified? The Feasibiity Test considers the context in which the organization operates, incuding both externa forces and intrinsic interna quaities. The test identifies barriers to success due to any of the foowing constraints: Government reguations Interests of a company's stakehoders Limitations of information systems Corporate cuture "Good Design" Tests The Speciaist Cutures Test contros for the effect of a new design on groups where performance is contingent on their abiity to operate outside the prevaiing corporate cuture (e.g., in some cases IT, product deveopment). The test has two components: 1. Identifies speciaist cutures: Which groups "need to think and work in ways that are different from the prevaiing organizationa norms" to achieve maximum performance? 2. Assesses vunerabiity: Are these groups significanty different from and therefore at risk for domination by the units to which they report? 78 Apri 2012 NHRD Network Journa

87 The Difficut Links Test identifies structura deficiencies that ead to the organizations' inabiity to achieve coordination across business units through any of the six basic inks outined beow: 1. Shared Know-How: Best practices, Functiona expertise Market knowedge 2. Shared Tangibe Resources: Physica assets, Peope, Interna services 3. Pooed Negotiating Power: Common purchases, Joint negotiations with, customers, governments and, other stakehoders 4. Coordinated Strategies: Response to a new competitor, Customer service 5. Vertica Integration: Coordination of resources to, reduce inventory costs,, enhance products or improve, market access 6. New Business Creation: Teams, Interna joint ventures, Other aiances The Redundant Hierarchy Test contros for inefficiencies and oss of vaue resuting from unnecessary organizationa ayers. The test has two components: 1. Determines if parent units or eves are necessary: Does the unit have distinct parenting propositions? Can the unit improve the performance of each unit reporting to it by at east 10 per cent? 2. Determines whether parent units have appropriate resources: Does the unit have access to the skis and resources it needs to accompish this goa? The Accountabiity Test ensures that each unit, especiay if decentraised, has appropriate contros over its performance and that these contros meet the foowing three criteria: Suit the unit's responsibiities Are economica to impement Motivate managers To perform this test, identify units with shared responsibiities or whose performance is difficut to measure that require additiona oversight to ensure appropriate performance contros. The Fexibiity Test ensures that future innovations wi not face undue chaenges because of the organizationa design. The test has two components: 1. Determines whether the design supports innovation and adaptation to changing environments: Does the design support potentia new opportunities? 2. Identifies pockets of resistance to future change: Does the design pose a risk of entrenchment even if priorities change? Now, et's discuss the emergence of mutiocation business appendage of the organization and the true integration of organization as a nationa, regiona and goba competitor. Once an organization has reached muti-ocation business, it is forced to impement one of the four possibe structures described beow: Muti ocation Product Division Structure: Each of the domestic product/ service division managers is given word-wide authority for his or her specific product/ service group. Each product/ service manager has ine authority over a functiona activities reated to the product/ service division regardess of the ocation in which they take pace. The chaenge of the Company is organizing principay aong product/ service ines; within the product / service divisions, the company branches out aong regiona and functiona ines. Muti-Geographic Division Structure: Here the market is divided into geographic regions or countries. Regiona or country manager are granted authority over a functiona activities for a products/ services within geographic area. The company devoves neary a panning and operationa responsibiities to the business unit eve; most functions such as marketing, finance and new product deveopment are performed at this eve. Apri 2012 NHRD Network Journa 79

88 Muti-Functiona Division Structure: Here each functiona vice president (e.g., vice president of manufacturing) are given authority for particuar product(s) or process (es) across a domestic and foreign operations. This is not commony used by internationa firms because of coordination difficuties between and among functions in a given geographic area. The company streamines corporate center performs those functions that ink across a of the business units and are not particuar to a specific product area. Goba Matrix Structure: Here two organization design variabes operate simutaneousy - product/ services and functiona area. This soves probems caused by unidimensiona structures, and bends ocation with product/ services to create a dua authority structure (e.g., foreign subsidiary manager receives directives from two superiors: product manager and country manager). Due to the argey segregated nature of the business units, the company strives to share knowedge across the business units through councis of the regiona heads of business divisions. Chaenges of creating a muti-ocation/ goba structure stresses the importance of goba corporations and coaboration which reies heaviy upon process and systems integration. Essentiay, mutiocation companies must possess the organizationa capabiity to faciitate communication and distribute resources most effectivey among regions/ ocations. The best practices to broker cross-regiona or functiona communications incude: Sharing knowedge across business units through councis of the regiona heads of business units. Councis create opportunity to share best practices across business units without burdening organization with an additiona management eve. Regiona managers work in white spaces between business units and have some support staff and "tiny corporate structures." Goba inteigence group composed of between ten and tweve business unit managers who maintain constant communication regarding the retrieva and dissemination of new competitive data. IV.Concusion: Structure is business enaber, it is not an end-a. In reaity, a company's structure resuts in better performance ony if it improves the organization's abiity to make and execute key decisions better and faster than competitors. If companies can aign its organization's structure with its decisions, then the structure wi work better and performance wi improve. Best practices suggest that faiure is rooted in a profound misunderstanding about the ink between structure and performance. Contrary to popuar beief, performance is not determined soey by the nature, scae, and disposition of resources, important though they may be. Organizations need to understand the set of decisions that are critica to the success of its strategy and determine the organizationa eve at which those decisions shoud be made and executed to create the most vaue. If companies can aign its organization's structure with its decisions, then the structure wi work better, and company's performance wi improve. A new strategy-or new execution of an existing strategy-can require both macro-changes and micro-changes to a company's structure. But any new structure wi create new boundaries that peope may find hard to cope with and that may make effective decision-making more difficut. To get around this probem, it may be necessary to overay new structure with some connections that hep peope reach beyond those boundaries. References 1. David A. Nader and Michae L. Tushman, "Chapter Two: Designing Organisations That Have Good Fit: A Framework for Understanding New Architectures," In: Organisationa Architecture: Designs for Changing Organisations,San Francisco: Jossey- Bass (1992). 2. Good and Campbe, "Do You Have a We-Designed Organisation?" 80 Apri 2012 NHRD Network Journa

89 INFLUENCE OF INFORMAL POWER CENTRES ON STRUCTURES IN ORGANIZATIONS B SUDHAKAR Abstract Most organizations have informa Power Centres and it is important to understand how these power centres get created and how they impact organizations. The artice heps us to understand better the views and concepts of the sources of power. The author concudes by saying that it is important to think of the process of converting these informa power centres into competitive advantage for the organization and aso that informa power centres are here to stay in organizations and the eadership wi ook up to HR eaders to hep them hande them. About the Author B. Sudhakar is the Chief Human Resources Officer of Tata Chemicas Limited. With a work experience spanning over 25 years, he has served in varied vertica industry segments ike Eectronics, Pharmaceuticas, Stee, Fertiisers, Chemicas and Infocomm. He has had sojourns at reputed organizations ike Samte, CEAT, SOL Pharmaceuticas, Nagarjuna Fertiisers and Reiance Infocomm prior to joining Tata Chemicas Limited in February He has done his post graduation in Business Management from IMT, Ghaziabad. He eads HR, Corporate Communications and Knowedge Management functions in the company. He is aso the Principa Ethics Counseor for the company. It is a common beief that these informa power centres are detrimenta to the organization and many view these with ot of scepticism. Empoyees and managers tend to fee et down by the eadership as they fee ignored under the shadows of such informa power centres. This artice is attempting to bring to the fore some of these informa power centres. As these power centres are being described, it wi not be surprising if each one of you is reminded of a person in your organization representing such power centres. We are a famiiar with organizationa charts that show who reports to whom in a company. Those peope in the boxes at the top 2-3 eves of the chart are those presumed to have the most power. However, more often the power structure of an organization can be different from a company s forma organizationa structure. The way decisions are taken, the way the resources are aocated, the way probems are soved, the way rewards and recognition systems are handed coud be impacted by the informa power structures in organizations. Regardess of the type of organization, there is aways the propensity for peope to create power centres or fiefdoms. These power centres can be created by a singe manager or executive or by groups of peope or SBUs. In many organizations, the power structure Apri 2012 NHRD Network Journa 81

90 is not the same as the organizationa structure. Knowedge of power centres, otherwise known as the informa organization, can hep managers and empoyees aike get things done. In a hierarchy, one is perceived to have more power if they have proximity to the top. In contrast to the inear structure, in a matrix structure decisions can be taken at different eves depending on factors ike expertise, geography, market size, revenue size, the profit size etc. One sees another trend of ate wherein many companies move toward a fatter organization aowing decisions to be made by empoyees activey affected by the decision, not an executive who is far away from a the facts needed to make that decision. Often one finds that the power resides at the Midde management eve. Informa power in an organization refers to the abiity to ead, direct or achieve without an officia eadership tite. It is derived from the reationships that empoyees buid with each other and the perceived power of an individua by others. For instance, in a knowedge company individuas with informa power may be the most experienced or knowedgeabe. The power centres in an organization can infuence organizationa dynamics. For exampe, if the design team has disproportionate power, it can reject product ideas it does not ike even though those ideas may have been carefuy vetted by the marketing staff. Or, if marketing has disproportionate power, it can insist product deveopment design products not reay suitabe for the company s goas. Many managers or groups of empoyees acquire informa power and use it to overcome opposition for a desired outcome. Individuas/ Groups or SBUs attain power to accompish goas through tactics that stem from sources other than authority ike increasing indispensabiity, associating with powerfu eaders, buiding coaitions etc. Sources of Power There are mutipe sources that peope derive power informay. There are many but I intend to iustrate a few predominant ones. I woud share a few such sources based on my persona experience and observation Proximity: In famiy run business, some of the famiy members wied power disproportionate to their capabiity. The trust that the owners have on them eads to that informa power. In professionay run set ups, the perception that a person is cose to the power centres, ike the MD etc., resut in those peope wieding informa power. The rest of the organization fees that these empoyees can infuence key decisions. This eads to the informa power. Time spent It is found that some CEOs spend disproportionate time with some functions/individuas. The rest of the organization fees that the eaders from those functions have the ear of the CEO and hence treated as informa power centres. Even if the CEO is spending time to improve the performance/deivery of the function/individua, rest of the organization coud perceive it otherwise. Past association Many times eaders grow up in the same organization. Some empoyees who have worked with the eaders in their eary part of the career coud constitute informa power centres. There is a tendency that the eader woud have to use these excoeagues to get information, vaidate information, to test some ideas. In arge organizations the ony connect of the eaders to the rest of the organization coud ony be imited to these ex-coeagues. This coud cause issues of Trust at the senior 82 Apri 2012 NHRD Network Journa

91 eves. Many senior coeagues of the eader fee that the eader vaues these excoeagues more than them. Some empoyees overty demonstrate their proximity with past coeagues who are in high positions in the Corporate/ Group headquarters. They tend to create informa power centres as the rest of the organization perceives them as great infuencers. Famiy connections There are some empoyees who are reated to key eaders in the organization or the Group corporate. They may be reated from their side or their spouse s side. Peope tend to be carefu in deaing with them and tend to make conscious attempts to be nice to these empoyees. Even if that empoyee does not want to be identified with that reationship the rest of the organization sees him/her as an informa power centre that coud swing decisions either way. In township environment one finds that the spouses of Doctors, teachers wied ots of informa power. The spouses of CEOs have a great infuence on the CEOs. It is not surprising to see the spouse of a CEO designing office space for the organization. Many times the trave pans of CEOs are governed more by the priorities of the spouse of the CEO than on the organization s need. Non substitutabiity Peope in speciaised roes in the Organization structure have power arising from the contro over information. Some empoyees adopt a conscious strategy of hoding on to very critica information/ data. They woud share data to seect eaders and withhod from the rest. The eader tends to perceive that this individua is most vauabe (ti he discovers the true intent of the individua) and that others do not care to have updated information. This is more predominant where the IT environment in the organization is not advanced. Increasing the nonsubstitutabiity/ (uniqueness) and centraity increase indispensabiity. Individuas with speciaised skis in an area of concern to an organization are indispensabe. Centraity rises by accepting assignments with visibiity and deveoping a network of contacts. Expertise Every organization requires some individuas who are experts in a given area. These experts have ot of informa power. They tend to be rewarded by eaders despite unwanted behavioura traits in some of them. Organizationa needs change as organizations defend or consoidate or grow. Different kinds of experts are required at different times. For instance, technica experts become power centres if pant capacity utiisation issues exist. However, peope with M & A skis become power centres if the organization is going through a growth phase. The expertise need not necessariy be in the core area of the organization. For instance, in an organization that has a remote ocation, the community deveopment experts become a great source of informa power as they can infuence the behaviour of the communities around the pant areas. Authority It is the most obvious source of power, because it is egitimate power stemming from an organization s forma design. Authority is distributed differenty in various organizations. Centraisation has top managers retain authority, and decentraisation deegates authority to ower eves. A highy centraised organization makes few significant decisions, because everyone is afraid to take responsibiity. Many managers try to Apri 2012 NHRD Network Journa 83

92 retain contro. Out of the fear of osing authority, the manager imits information to subordinates, making it hard for them to make decisions. Those managers who use their authority become power centres. Some managers who have the deegation of authority but not use them wi be perceived as ineffective and poweress. Contro over resources Contro over resources gives Individuas the power not accorded by the forma structure. In a muti-division company the division which is most profitabe wi have the most power or say in most decisions. The Heads of such divisions/sbus that produce revenue/ higher profits tend to wied power and have a strong infuence on resource aocation. For instance, the Technica Ce attached to the CEOs office in an organization coud infuence the depoyment of resources, which on many occasions was not in ine with needs of the operating personne. The abiity to generate resources aso increases power. Coaition A dominant coaition has the power to contro decision-making to resove confict in their favour. This is known as unobtrusive power, because other subunits do not know the coaition has infuence. A coaition s power arises from the abiity to contro the assumptions, goas, share resources, and aocate resources and norms to evauate aternatives. If marketing is the dominant coaition, cost cutting wi not get much attention. Coaitions require a trade-off: Manufacturing supports finance if finance supports manufacturing. Top managers must estabish good reationships with sharehoders and the board. A CEO wi fa without board support. Managers need ong-term reationships with stakehoders, such as customers, banks, and suppiers. Individuas ike Function Heads / SBU Heads or Groups/ Coaitions obby for their interests because the stakes are high. Stakes incude contro over resources. Other ess dominant power centres Functions can increase indispensabiity by increasing their centraity. They can increase non-substitutabiity, associating with powerfu managers, buiding coaitions, and infuencing decisionmaking by controing the agenda. Managers appy these tactics to specific functions, such as manufacturing, marketing, and finance. For instance, in a ow-cost cuture, manufacturing is centra. Poitics pay a roe in strategy and structure choices. Unsuccessfu managers may retain their power despite poor performance due to contro over property rights. A topmanagement team can hod a important roes on committees and choose supporters as members. Some CEOs serve as chairman of the board, which aows for board contro. Other top managers centraize decision-making and deny promotions to dissenters Concusion It is important to think of the process of converting these informa power centres into competitive advantage for the organization. At a macro eve it requires great process skis in the HR eader, the knowedge of socia sciences for the HR eader, right mind-set for the eadership team members to acknowedge and accept these power centres consciousy, it requires the emotiona maturity of the eadership team members to uneash positive power from these power centres, it requires reevant patforms/forums to discuss these issues in an open and transparent manner. 84 Apri 2012 NHRD Network Journa

93 It does hep if the HR eader maps the informa power structure of an organization and shares the same with the top team of the organization. We can even use the informa power structure as a competitive advantage by ensuring that the context of the organization is taken into consideration. The top team coud consciousy support the reevant power structures. It is aso important for the HR eader to do a sef-assessment in his/her function whether he/she is one such power centre or someone in the HR function is one such power centre. HR can faciitate discussion where the eadership team debates on whether these informa power centres are enabing or disabing. It is important to debate the functionaity and the dis-functionaity of each and every such informa power centre. At times it may be required to strengthen reevant power centres and at times it may be reevant to remove such power centres in the organization. Some key questions that the eadership team coud engage, which the HR eader coud faciitate, are: Are these informa power centres nurturing taent deveopment and taent retention? What is the impact of these informa power centres on the desired organization cuture? Are these power centres creating trusting reations and trusting cuture? Are these informa power centres creating competing groups? Are these informa centres adding vaue or eroding vaue? Has the quaity and speed of decision making improved because of these informa power centres? Has the quaity of probem soving improved? What are we recognising or rewarding? Are empoyees perceiving the organization becoming more poitica because of these power centres Which of these informa power centres need to be formaised? Having said this, the HR fraternity needs to refect on the kind of skis it needs to deveop on an on-going basis. The HR fraternity is very preoccupied with managing the content. Time has come now for the HR eader to focus more on process skis far beyond the content skis that we have now. A deep understanding and appreciation of anthropoogy, socioogy and psychoogy wi be greaty needed. It is very important for HR eaders to know the science behind human behaviour in a structured manner. It is aso important for the HR eader to understand the reation between appied Socioogy and Appied Psychoogy on HR systems and sub systems in this context. Investment of HR personne in earning the appied dimensions of these socia sciences has become an imperative. The good news is that these informa power centres are here to stay in organizations and the eadership wi ook up to HR eaders to hep them hande them. References i "Indian takeovers abroad: Running with the bus", The Economist, March 3-9, 2012, pp ii "Don't Integrate Your Acquisitions, Partner with Them", Prashant Kae, Harbir Singh and Anand P. Raman, Harvard Business Review, December 2009, pp. 2-9 iii "Beyond the Wa of Resistance" Rick Maurer, Bard Press, 2010 iv "The Gobay Integrated Enterprise", Samue J. Pamisano, Foreign Affairs, 85 (3), 2006, pp Apri 2012 NHRD Network Journa 85

94 ORGANIZATION DESIGNS THAT HELP DELIVER A SOCIAL PURPOSE SUDHEESH VENKATESH Abstract This paper has deat with organizations that primariy have a socia purpose - organizations that operate to further the common good and genera wefare of the community. This paper has incuded in its scope, government, a sef-hep group and a phianthropic foundation, concerned with issues of heath care, poverty aeviation and pubic education in India. Socia issues need to be addressed at scae, particuary in a country ike India. About the Author Sudheesh Venkatesh is the Chief Peope Officer at Azim Premji Foundation. Previousy, Sudheesh was Head of Human Resources for Tesco, India and ater the Shared Services Lead for Tesco's UK - Peope programme. He hods a Post Graduate degree in Management from the Indian Institute of Management, Kokata. He is the Vice-President of Nationa HRD Network, Bangaore. The scope of this artice: This paper deas with organizations that primariy have a socia purpose. These are organizations that operate to further the common good and genera wefare of the community. This paper incudes in its scope, government, deveopment agencies, non-profit organizations, pubic-private partnerships, and phianthropic foundations. The issues that often concern them are pubic education, heath care, rura deveopment, e-governance, sustainabiity and the ike. The need for thoughtfu Organization designs: Conventionay 'Organization design' has meant structure and roes. In its fu scope, 'Organization design' brings aignment of structure, process, rewards, metrics and taent to serve the purpose of the organization. This paper has taken the former position - and even within the conventiona and imited scope of structure and roes, 'Organization design' has to be thoughtfuy panned and executed. Firsty, Organization design has to serve a purpose - that of enabing the peope to perform their roes which together creates a symphony. For exampe, a footba formation of 4 Defenders -4 Mid fieders - 2 Forwards is a design chosen by a coach for a certain kind of pay. The Danubian schoo of attacking footba woud choose a formation. So, organization designs need to serve the goa and the stye peope want to pursue. 86 Apri 2012 NHRD Network Journa

95 Secondy, Organizations need to stay invested in a design for reasonabe engths of time. Chopping and changing frequenty eads to confusion down the ine and is best avoided. Peope need time to sette down and perform in their roes and hence the temptation to frequenty change structures (and create a fase impression that something substantia is happening) needs to be avoided. A change in design is certainy merited when there is a substantive change in strategy. Thirdy, Organization designs need to promote efficiency. It is natura for organizations to accumuate fab with effux of time. Periodicay, it woud be good to ask some hard questions. For exampe, The kind of organization designs exist today: What is the ratio of Direct to Indirect resources - sometimes uncharitaby caed the teeth to tai ratio What are the spans ( average and range) Are decisions getting made at the right eve or are they getting pushed up Is the pyramid sharp enough to promote a performance cuture whie at the same time broad enough to bring taent through? Is the organization nimbe enough to set up Natura Work Teams and Crossfunctiona teams rapidy? S. Type of Type of Features No. sector organization 1 Corporate Customer-centric Service-ed Litte sensitivity to Innovative greater pubic good Cear roes Cost and efficiency focused Performance and reward driven Fexibe 2 Defence Command Discipined Litte room for and contro Aigned innovation Sense of mission Limited manoeuvrabiity Rue bound 3 Government Federa Responsibiities Can often be sow and privieges of the centre and state are cear. Predictabe Big on scae Apri 2012 NHRD Network Journa 87

96 S. Type of Type of Features No. sector organization 4 Civi society Fat Very broad spans Often, cannot take and sef-hep Vounteerism direct action - need groups Participatory to infuence and character everage other organizations to High eve of achieve their autonomy purpose 5 Secret groups Personaity centric, Loyaty is its own intricate web reward and amoeboid Trust is everything Here are 4 case studies (1 in Heath, 1 in Poverty aeviation and 2 in Education) of organizations with a socia purpose and the specific organization designs that have worked for them: 1. An organization that is of, by and for the peope, that uneashed tremendous power - Mitanin, Chhattisgarh The state of Chhattisgarh was created in The state was we beow the Nationa Heath Indicators (e.g., Infant mortaity - second worst in India, prevaence of Maaria - highest in the country). The creation of the new state created in peope egitimate hopes of heath reforms. The state responded with the Mitanin programme. Mitanin in Chhattisgarhi means a woman friend. The programme aunched by the Government is a woman-centric, community heath workers programme. The Government took the sage advice of civi society and recognised the importance of women in deivering heath-care to the community. Interestingy, the trainers, the evangeists and the Mitanin of course are a women. The roe of the Mitanin ( now) is to spread awareness of good practices in heathcare and treat minor aiments. In order to ensure good penetration of services, Mitanins were chosen at hamet eve - one for every 30 to 40 househods. The remuneration was kept minimum, to ensure ony the fiercey committed join Resuts Sampe Indicators of Year Recent Improvement and Heath in Chhattisgarh 2000 measurement Remarks Infant Mortaity rate Remarkabe. From being the second worst in India, it is now ony marginay worse than the Nationa average of 53. Materna Mortaity Ratio Significant. From being very poory off, it has cosed the gap with the Indian average of Apri 2012 NHRD Network Journa

97 Design essons Speed, scae of impementation and cost determine the right organization design Organizations with a socia purpose (ike democracies) that are 'of, by and for the peope' have a greater chance of success. In performing roes that require empathy and caring, women tend to do exce. 2. Turning the conventiona organization of 'tricke down' on its head, an entire organization raies in a campaign mode - Kanya Keavani Mahotsav, Gujarat Since independence, Gujarat has progressed on different dimensions of human deveopment, such as iteracy, heath and nutrition, and socia security. The iteracy rates in Gujarat at 70% are higher than the nationa average. However, in 2000 Gujarat had a specific chaenge with the femae iteracy rate being ony 58.6 percent. Low enroment and retention of gir chidren in primary schoos was a serious concern before the Government. The Government had tried increasing budgetary aocation, started mid-day meas and set up hostes - however they were not yieding the improvement that was required. Worse sti the net enroment ratio had dropped in the 90s. In 2004, the Government hit upon a unique method, that of getting the entire Education eco-system in Gujarat to a campaign mode, to organize Kanya Keavani Mahotsav. From 2004, every year, the Chief Minister, his Cabinet, a Principa secretaries, Secretaries and Cass I officers take out three days in June to visit viages to create awareness about education (especiay about gir chidren) and hence improve the enroment and retention in schoos. The campaign's war cry is 'Pahea Vidyadan Pachhi Kanyadan' (Education first, Marriage ater). Chidren dress up during this Mahotsav and come in decorated buock carts. The newy enroed chidren are presented with a coourfu cap. Before the actua Mahotsav, the teachers visit a houses in the viage to mobiise the parents to enro their chidren. They aso hep the parents get birth certificates for their chidren. Every effort is made to ensure that no chid remains out of the schoo for any reason. This method's repicabiity and sustainabiity have been proven viages and schoos are covered in these 3 days, every year for the ast eight years and the resuts are there to see. Sampe Indicators of Year Recent Improvement and Education in Gujarat 2000 measurement Remarks Net enroment ratio 74% 97% Remarkabe. This proves that success is guaranteed when the entire organization, starting from the top is aigned. Dropout rate in 30% 5% Significant. When conventiona Primary casses 1-5 methods of driving resuts through an organization stop yieding an impact, dramatic measures are caed for, ike in this case - and it has worked. Apri 2012 NHRD Network Journa 89

98 Design essons Unprecedented situations require dramatic design soutions (e.g., Campaign mode organization). Communicating the severity and seriousness of an issue and mobiising an entire organization, cas for cutting through hierarchy. Persona exampe is the best way to make things happen and this is best ed from the top 3. Sef hep is the best hep - The story of rapid scae up through Sef Hep Groups - 'Veugu (Eterna Light)', Andhra Pradesh's rura Poverty Reduction Programme Sef Hep Groups (SHGs - e.g., Mothers' committees, Schoo Education Committees, Forest groups...) are a sma group of persons engaged for a common good. SHGs in Andhra are mosty engaged in providing micro-credit to the poor so that they pu themseves out of poverty. The Veugu project, sponsored by the state, aimed to touch 860 Mandas, in 22 districts to reach 3 miion of the poorest of rura poor. The purpose was to scae up the SHGs so that they coud improve the capabiity of the oca communities to pan and deiver basic infrastructure, socia deveopment and watershed activities. Providing and to the andess and improving enroment in schoos was among the key goas of the programme. Veugu addresses chid abour and high-dropout rates, whie simutaneousy improving their economic conditions. This programme has significanty scaed up in Andhra - there are 400,000 SHGs with over 5 miion participants. This is remarkabe scae, achieved in rapid time, thanks to good thinking by the State. For instance, the State invested in significant training of SHGs on how to form a SHG, book keeping and in raising money from banks and financia institutions. SHG formations, interestingy, have argey taken pace around women and they have come to be seen as more credit-worthy than men. Resuts Sampe Indicators of Mid 90s In the mid Improvement and poverty aeviation in 2000s Remarks Andhra Pradesh Poverty ratio ( % peope 22.3% 15.5% Remarkabe. When the abeow the Poverty ine) India figure is at 27%, Andhra has done very we. Growth in the Gross 5.6% 7.6% State Domestic Product (GSDP) Per-capita GSDP Rs.9000 Rs Significant improvement Chid manutrition 43% 30% Outstanding. Andhra has (Underweight) outperformed the A-India average of 40%. 90 Apri 2012 NHRD Network Journa

99 Design essons Keep it simpe. If there is a compeing economic or socia benefit, organizations wi scae without much effort Enabe and Support by a means (for exampe Training as in this case), but don't over-manage (e.g., SHGs woud have been kied had they not been given operationa independence). 4. India's socia chaenges are arge and compex. Hence the structura designs of organizations with a socia purpose shoud be scaabe, provide for partnership with Governments and be institutiona in scope. The story of Azim Premji Foundation - Improving quaity and equity of education The Azim Premji Foundation's action has so far touched 2.5 miion chidren across 13 states Purpose Identify and reward good schoos that achieve good earning eves in chidren Appication of technoogy in education for sef-paced, interactive earning Deveop chid centric schoos Deveop a repicabe mode of providing quaity education to chidren of migrant abour Buid manageria skis in Govt. education department officers Invove communities to make their schoos better Joint study with Harvard to study the various poicy options to improve the quaity of primary education in rura schoos What's been done to date 19 Districts across Uttarakhand, Rajasthan, Gujarat, Madhya Pradesh and Karnataka schoos 13 states and Union Territories (Andhra Pradesh, Chandigarh, Chhattisgarh, Dehi, Gujarat, HP, Karnataka, Orissa, Pondicherry, Punjab, Rajasthan, Tami Nadu, Uttarakhand) 16,000+ schoos Karnataka (1 bock) 350 Schoos 2 construction sites (schoos) in Bangaore city Being roed out by Govt. of Karnataka for a 53,000 education functionaries Karnataka, 74 schoos Andhra Pradesh (6 districts) 1300 schoos Apri 2012 NHRD Network Journa 91

100 The Foundation has had significant earning over the past decade: India's education chaenges have to be addressed at scae Socia sector needs to partner with the Government's and suppement the efforts of the Govt For change to ast, oca institutions need to be invested in We need mutipiers who can support the scae-up and impact Socia pressure on the system can work wonders And it is peope primariy who can make this happen With this earning and armed with a $ 2bn endowment by Azim Premji, the Foundation has embarked on an ambitious pan starting The strategy invoves Buiding an University to feed India's education sector with 3500 committed and capabe professionas every year Creating 50 State and District Institutes that can hep with the in-service training of our 7 miion teachers Setting up 100 Demonstration schoos to serve the under-privieged peope of our country and create socia pressure Deveoping a Centre that can assess and accredit schoos in the country. And this means a 5000 person organization by 2016 The Strategy determines the Structure Institutions Teaching Programs 2 Strategic eements working together at mutipe eves: Nationa (University, IAA) State, district (Fied institutes) Sub-district (Schoo) URC University Taent Knowedge Socia Pressure Univ. Research Institute of Assessment & Accreditation (IAA) X Communication & Engagement Partnerships 1 Taent, Knowedge & Socia Pressure embedded within ins tu ona structure Fied Institutes Schoos Fied 3 Institutiona efforts mutipied through: Communication & Engagement Partnerships 4 A ins tu ons wi work seamessy so that theory & prac ce are cosey intertwined, and infuence each other 92 Apri 2012 NHRD Network Journa

101 A coser ook at the Organization design Azim Premji Foundation Mutipiers University Fied Institutes Enabers Horizontas Communication & Engagement Partnerships Teacher Education Teaching Programs Research University Resource Centre State & District Institutes of Learning & Deveopment Schoos Knowedge Management I Infrastructure, IT, Projects & Administration Finance Education Leadership & Management Operations IAA Peope Function * Operating Units The Organization design of the Azim Premji Foundation has made an attempt to refect the need of an organization with a socia purpose and bring in the best of what other organizations have to offer i.e. Structuray enabed 'Partnerships' to work with the Government and succeed together 'Enabers' to focus on fast ramp-up, quaity and cost efficiency A design that is simpe and fit for purpose 'Operating Units' that are focused on deivering the strategy A governance method that devoves authority, deegates operations and provides autonomy whie simutaneousy monitoring the direction. Resources: 1. Panning Commission, Govt of India 2. Ministries of Education, Heath and Famiy wefare - Chhattisgarh, Andhra Pradesh and Gujarat 3. Azim Premji Foundation Apri 2012 NHRD Network Journa 93

102 STRATEGY AND ORGANISATION STRUCTURES RELEVANCE AND REALITY VIKRAM BECTOR Abstract In this artice the author discusses the view that strategy foows structure. He goes on to suggest an aternate point of view and taks about other interinked variabes such as the environment, cuture etc. Organisations buid a structure to capitaise on the opportunities, in practice it is this very structure that constrains the strategic choices they make. The artice expores the compex and iterative nature of the reationship between strategy and structure. About the Author Vikram Bector is the Chief Learning Officer of Tata Motors Limited and is responsibe for the earning and deveopment and the taent management function. He has over two decades of impressive ine and earning experience with some eading Indian and goba organisations. He is a certified executive coach by the Internationa Coach Federation and has ed some of his earier companies to outstanding internationa recognition as best-in-cass earning organisations. He has served on program evauation committee of the American Society for Training and Deveopment (ASTD) for the Internationa Conference and Exposition. He has contributed to the ASTD Management handbook which is currenty under pubication. He has hed senior eadership positions with firms ike Tata Stee, Aditya Bira Group, Mahindra Satyam and Deoitte and is currenty based in Mumbai, India. INTRODUCTION The quest for materia and modes for this artice ed me in many directions and yet the foowing five questions kept popping in my head at increasingy frequent intervas. So I abandoned my earier approach and decided to punge head on into answering these questions. This was done with a hope that the answers to these questions woud ead to more carity on the topic for the readers and for me. Let me first pose the five questions to the readers. In case of organizations, which of the foowing statements are true? A. Structure foows strategy B. Strategy foows structure C. Structure constrains strategy D. Environment shapes strategy and structure E. Strategy can shape the environment In my opinion a of the above statements are true. Companies and consutants have known the above facts for a ong time and 94 Apri 2012 NHRD Network Journa

103 I beieve that this is one of the best kept management secrets. The reason that this is a secret is that some exempary corporations have everaged one or a of the above constructs to survive and prosper over centuries. However, what gets communicated to the outside word are usuay the more intuitive constructs ike the statement A, B and C as above. A ook one of the odest corporations i.e. the East India Company, reveas that perhaps it everaged the statement E above (strategy can shape the environment) to create a mutinationa organization and an army which shaped the environment, taking up countries and resources in its wake. Corporations may not want to emuate a aspects of what the East India Company did, but this artice is about exporing these five constructs, questions or statements. STRUCTURE FOLLOWS STRATEGY Most organizations foow a process of anaysing the environmenta conditions or an industry sector for opportunities. They conduct a SWOT and competitive anaysis to understand who they are up against. They then sociaise this opportunity with a set of stakehoders to gain their support and funding and then creates a strategic pan and a budget. The organization then aigns it vaue chain of suppy chain, manufacturing, saes, marketing and human resources for the reaisation of the strategy. In other words the environment shapes the strategic response of an organization which creates an enabing structure to reaise the potentia in the industry sector. Since the work of Chander (1962) the reationship between strategy and structure has been the subject of a number of conceptua and empirica studies. The resuts of his research generated the basic propositions of the dynamic mode of strategy and structure as iustrated in figure 1 beow. Figure 1: A dynamic reationship between strategy and structure shaped by the environment and resources (capabiities) E- environment, R resources, S structure and St - structure The nature of the environment and the resources of the organization infuence the strategy at a given point in time, which in turn determines the structure. As the environment shifts or the organization buids new resources, this may ead to a new strategy which in turn creates the need for a new structure. A new strategy requires a new or at east a refashioned structure if the enarged enterprise has to be operated efficienty. Much ater (p. 314) Chander confirms that: Uness structure foows strategy, inefficiency resuts. In fact Chander s comment (p. 315) is significant: Yet, structure often faied to foow strategy Is this true for your company, dear readers? It is often seen that there is a considerabe time ag between the new strategy and creating or remodeing of the structure. These months of deay ead to sub-optima performance and frustration. So in many ways at this point the structure may predetermine strategy or the reaisation of the strategy. Apri 2012 NHRD Network Journa 95

104 STRATEGY FOLLOWS STRUCTURE and STRUCTURE CONSTRAINS STRATEGY There is no empirica data or study to propound the above hypothesis; however I am reying on my experience of over two decades with some very arge Indian congomerates and goba mutinationa corporations. In many of these corporations the eadership had to create a new organization structure to pursue new opportunities, as the current structure was too busy maximising returns on the current set of opportunities and operations. Athough Chander was primariy concerned with the reationship between strategy and structure once strategy had been formuated, he nevertheess writes about Genera Motors (1962: 45): The mutidivisiona structure at Genera Motors did not come as a response to administrative needs resuting from a strategy of diversification. Rather, its innovators saw it as a new way of administering a combination or federation of enterprises. and (p. 46): Furthermore, because of its administrative structure, it was abe to execute briianty a broad strategy of diversification into the making and seing of a types of engines, and products using engines, in the years after the automobie market fe of in the ate 1920s. Indeed one might say that structure often precedes strategy. David Ha and Maurice Saias make a powerfu comment in their artice Strategy foows Structure! and I quote An organization is designed for action, not for refection. There are not many exampes where companies have been abe to generate new ideas and innovate within the current structure. However, there are many exampes in corporate India such as Max India which diversified from drug intermediates into setting up hospitas and entered the heathcare business. The Aditya Bira group moved from being a B2B centred organization into a B2C business by acquiring companies such as Madura Garments. Tata Motors created a new organization whie moving from being a commercia vehices company to producing and servicing cars. Each of these organizations had structures which woud have constrained the reaisation of new opportunities. They ended up creating new organization structures much different from what they had in the past. This eads us to the inked discussion how the structure constrains strategy. The structure can make an organization more or ess short-sighted or bind. The organization whose manageria taent is fuy empoyed in the operation or the existing technoogy and process is unikey to perceive new environmenta threats or opportunities (Mies, Snow and Pfeffer: 261). Once an organization begins to operate, the nature of its structure imits its perception both of itsef and of its environment. Structura characteristics such as the cuture of an organization and its hierarchy act ike fiters and imit what the organization can see (Weick. 1969; Mies. Snow, and Pfeffer. 1974; Leifer and Huber, 1977). The roe of a structure coud be portrayed as in figure 2. Figure 2: Structure as a fiter Structure acts as a fiter for incoming information. When the information is judged interesting, it is subsequenty transmitted to other parts of the 96 Apri 2012 NHRD Network Journa

105 organization. Important deays can sometimes occur between the appearance of an event and its recognition by the organization. Like individuas, organizations have biases and fiters too. These coud prevent the organization from identifying opportunities and threats in time and acting on them. So it foows that the structures which are created for action can often be the reason for inaction because of the inherent biases of peope or the organization. What is true about information not traveing into the organization from outside is aso true for information sharing within arge organizations. Often the mutipe ayers of an organization act as a barrier and imit the information fow as an exampe information about competitive activity reaching the top management in the organization. Therefore any study in the effectiveness of an organization s strategy is compete ony when it is couped with an understanding of how the structure aids and abets the strategy. One coud argue that the strategy foows the structure. ENVIRONMENT SHAPES STRATEGY AND STRUCTURE It is a common pace that most industria enterprises, everywhere in the word, find themseves in a constanty changing economic environment. Some of the changes are abrupt and shift the performance of an enterprise from marginay adequate to suddeny unsatisfactory. Other changes, which coud be sower and more fundamenta, force the enterprise into new fieds or into significanty different ways of managing its affairs in its estabished fied. In either case, the ikey resut is a different arrangement of major management tasks and, therefore, a different organization structure. In India, diese fue is highy subsidised by the government and there is a substantia price difference between petro and diese fues. As a resut, there is a huge demand for diese variants of passenger cars and most automobie companies have tried to create a response to this opportunity. Automobie manufacturers have invested in bringing in new variants of diese cars and sports utiity vehices. India s finance minister recenty signaed that the government woud no onger extend the subsidy on diese to passenger cars in the future. With a these shifts in the environment, it is ikey that the structure and strategies of the automobie organizations wi change. The same can be said about the introduction of ecofriendy emission norms in Indian metros, which ed to the creation of CNG based buses and commercia vehices. Most automobie organizations had to create a strategy to respond to the change in the environment, so that they coud prosper. There are other circumstances which prompt a shift in structure and subsequenty its strategy. The other important stimui for an organization structure redesign are unsatisfactory corporate performance i.e. the faiure to contro costs or to improve productivity or to regain market share. Simiary, organizations ook at changing their structure when they fee that they are negecting the future and are too focussed on day to day operations. The environment is thus seen to shape the strategy and structure of organizations, many of whom respond to externa or interna changes. In the next section, we wi expore exempary companies which proactivey shape the environment rather than react to the changes. STRATEGY CAN SHAPE THE ENVIRONMENT Instead of etting the environment define your strategy, craft a strategy that defines your environment, say the authors of Bue ocean strategy W Chan Kim and Renee Mauborgne. Apri 2012 NHRD Network Journa 97

106 As per the authors there are two types of strategy: structuraist strategies that assume that the operating environment is given and reconstructionist strategies that seek to shape the environment. In choosing which of the two is most appropriate for an organization, the organization needs to consider environmenta attractiveness, the capabiities and resources it can ca upon, and whether the organization has a strategic orientation for competing or for innovating. Diversified companies shoud be comfortabe using both approaches. Whichever type of strategy is chosen, success wi depend on creating an aigned set of strategy propositions targeted at three different sets of stakehoders: buyers, sharehoders, and the peope working for or with the organization. A strategy s success hinges on the deveopment and aignment of three propositions: (1) a vaue proposition that attracts buyers; (2) a profit proposition that enabes the company to make money out of the vaue proposition; and (3) a peope proposition that motivates those working for or with the company to execute the strategy. Where the approaches diverge is in the nature of their proper aignment. Structuraist strategies require that a propositions focus on deivering either ow cost or differentiation. Reconstructionist strategy propositions aim to deiver both, as exempified by the case Appe s itunes. The authors aso researched on how the three strategy propositions are the key reasons why many market-creating innovations fai to become sustainabe businesses. One such exampe the authors quoted is the onine music provider Napster. Founded in 1999, it had pued in more than 80 miion registered users with its vaue proposition: simpe, easy-to-use software that aowed music fies to be indexed, searched, and freey shared across computers throughout the word. Yet within a year, Napster was under siege. Record abes, worried that the free sharing of music woud destroy their saes, approached Napster to work out a revenue-sharing mode that woud benefit both sides. But excitement over its spectacuar growth prevented Napster from appreciating that it needed a peope proposition aimed at this critica constituency. Instead of working to buid a win-win arrangement with the abes, Napster beigerenty decared that it woud advance with or without the industry s support. The rest is history. Napster was forced to shut down under a barrage of copyright-infringement suits before it had deveoped a profit proposition to benefit from its huge user base. Without three aigned strategy propositions, Napster s market-creating innovation faied to deiver commercia success. Contrast Napster s actions with those of Appe, which aunched the itunes Music Store in 2003 and in the space of five years became the number one music seer in America. Like Napster, itunes offered a compeing vaue proposition: Its onine music store aowed buyers to freey browse more than 200,000 songs, incuding excusive tracks, isten to 30-second sampes, and downoad an individua song for 99 cents or an entire abum for $9.99. Moreover, itunes guaranteed high sound quaity aong with intuitive navigation, search, and browsing functions. But Appe did not stop there. It buit an attractive peope proposition for the five major music companies. From the beginning, Appe gained the support of BMG, EMI Group, Sony, Universa Music Group, and Warner Bros. records by ensuring that music was downoaded with proper copyright protection and paying the music companies 65 cents for every song downoaded. Athough innovations aimed at creating new markets ceary have strategic importance for an organization s profitabe 98 Apri 2012 NHRD Network Journa

107 growth, it is known that many of them resut in ony temporary success or fai outright.the key esson here is that managers shoud not get too excited about innovation per se. It is just the beginning. The rea difference between success and faiure is strategic aignment between the three propositions discussed above. Unti executives earn this esson, biions of doars wi continue to be wasted on market-creating innovations that fai. Take the case of Fabindia, India s argest private patform for products that are made from traditiona techniques, skis and hand-based processes. It inks over 40,000 craft based rura producers to modern urban markets, thereby creating a base for skied, sustainabe rura empoyment, and preserving India s traditiona handicrafts in the process. It promotes incusive capitaism, through its unique COC (community owned companies) mode. The COC mode consists of companies, which act as vaue adding intermediaries, between rura producers and Fabindia. These are owned, as the name suggests, by the communities they operate from; a minimum 26% sharehoding of these companies is that of craft persons. Fabindia s products are natura, craft based, contemporary, and affordabe. In the ast 60 years the company has endeavored to bring customers a choice of products and ifestye, whie creating sustainabe iveihoods in the rura sector. Customers young and od, Indian and foreign find it quite coo to wear Fabindia s traditiona products. This amazing combination of vaue, profit and peope proposition is a compeing case of an organization shaping the industry environment. CONCLUSION This artice tries to expore the reationship between strategy and structure. The reationship is compex, dynamic and iterative. It is therefore pragmatic to work on structure and strategy and not to assume that working on a sound strategy is sufficient for success. There are a few exceptions to this though as Gabraith and Nathanson (1978: 139) point out: If a firm has power over its environment so that it can contro prices because of monopoy position, tariffs, or cose ties to government, it can maintain effective economic performance even if there is a mismatch between strategy and structure. We must recognise that recognizing that the reationship between strategy, structure, and the environment is symmetric; the environment conditions strategies and structures whist they in their turn shape the environment through the weight of the organization s capabiities and resources. REFERENCES David J Ha and Maurice A Saias - Strategy foows Structure! Afred D Chander - Strategy and Structure, MIT press, Cambridge Jay R Gabraith and Danie A Nathanson Strategy Impementation: The roe of structure and process Richard Leifer and George P Huber, Reations among perceived environmenta uncertainty, organization structure and boundaryspanning behaviour. Administrative Science Quartery 11. June pp Raymond E Mies, Chares C Snow, and Jeffrey Pfeffer Organization-environment: concepts and issues - Industria Reations pp Kar E Weick - The Socia Psychoogy of Organizing Apri 2012 NHRD Network Journa 99

108 BOOK REVIEW Organisationa Design: A Step by Step Approach Authors : Richard M. Burton, Gerardine DeSanctis, Børge Obe Pubisher : Cambridge University Press, 2006 ISBN-10: Designing organisations has been a chaenging process for both cassic and modern organisations given the muti-dimensiona context in which they operate. In eary 70s & 80s, the organisationa behaviour scientists argey focused on structure as predominant part of the design. However, the enhanced compexity of modern organisations demand an organising principe that is not soey reiant on structure but a host of tangibe and intangibe features and factors. Eminent schoar Pradeep Khandwaa expanded the myopic view by coining a formua which ooked at design as summation of factors ike structure, systems, stye, process, vaues, etc. The Organisationa Design: A Step by Step Approach examines the same idea in greater detai to deveop a comprehensive view. The authors systematicay deconstruct the compex task into five simpe steps namey i) Goas, ii) Strategy, iii) Structure, iv) Process & Peope, and v) Coordination and Contro. The topdown approach recommended by authors starts with structura components ike goas, strategy, and structure; foowed by human components ike work processes, peope, coordination and contro, and incentive mechanisms. The book introduces a unique, universay appicabe two-dimensiona mode (X&Y axes) to ocate a the design components in one of the four quadrants i.e. A, B, C, and D depending upon the vaues of parameters representing X-axis and Y-axis (Refer Figure 1). The mode aong with step-wise approach faciitates aignment and identification of the misfits among components. Every stage of the design process provides an opportunity to adjust the components and move them in the same quadrant as departure from aignment eads to costy misfits in the ong run. STEP #1: GOALS The recommended starting point for the design process is mapping the organisation s goas in terms of emphasis on effectiveness (X-axis) and efficiency (Y-axis) in the 2-D mode. Effectiveness reates to focus on outputs, products, services, revenue generation, etc. whereas efficiency focuses on inputs, use of resources, and minimization of costs. STEP #2: STRATEGY Strategy: The second step of approach concurs with Chander s dictum of structure foows strategy as strategy is the operationaization of organisation s goas and structure is the means to achieve them. By rating the eves of exporation (X-axis) and expoitation (Y-axis), the strategy of an organisation can be categorized as reactor (A), defender (B), prospector (C), and anayzer (D). After ocating the goas and the strategy, the authors suggest decoding the environment in which organisation operates and its impact on the strategy. Environment: Using unpredictabiity (X-axis) and compexity (Y-axis) as measures, four types of environments emerge, namey Cam (A), Varied (B), Locay Stormy (C), and Turbuent (D). At this juncture, two key questions to be considered before proceeding with the design process are: 100 Apri 2012 NHRD Network Journa

109 i) Does the strategy fit the goa? and ii) Does the strategy fit the environment? Once the three fundamenta anchors of design goa, strategy, and environment are in order, the next step is to review the structure. STEP #3: STRUCTURE Configuration and Compexity: According to Henry Mintzberg, a firm s configuration (generay visuaized as organisationa chart) invoves two compementary probems: i) how to partition a big task of whoe organisation into smaer tasks of subunits; and ii) how to coordinate these smaer subunit tasks to reaize the bigger task and organisationa goas. The organisationa design iterature views product/service/customer orientation (X-axis) and functiona speciaization (Y-axis) as two fundamenta dimensions to define configuration. The bend of externa focus and speciaisation eads to four basic configurations i.e. simpe (A), functiona (B), matrix (C), and divisiona (D). Organisationa compexity, another property of firm, refers to the horizonta differentiation (Xaxis) degree of task speciaisation across hierarchy, and vertica differentiation (Y-axis) depth of the hierarchy. The choices regarding the degree of differentiation resut in a typoogy of organisationa compexity. The section discusses how the configuration and compexity shoud be designed to meet firm s goas given its environment and strategy. Geographic Distribution and knowedge exchange: The structures for spanning geography can be broady based on oca responsiveness (X-axis) and optima sourcing (Y- axis). The four distributed organisationa structure viz. Goba (A), Internationa (B), Transnationa (C), and Muti-domestic (D) correspond to the four cassic configurations mentioned above i.e. simpe (A), functiona (B), matrix (C), and divisiona (D). Maximizing efficiency & effectiveness of knowedge exchange for distributed organisation is a key chaenge. Virtuaisation (X-axis) and IT infusion (Y-axis) yied four structures for sharing information within organisations. The authors break every aspect into four quadrants to ink one step to another. They emphasise continua assessment to assure fit among design components to ensure achievement of organisation s goas. After aigning the structura components, the human components are anaysed and atered for an effective design conducive to achieving organisation s goas. STEP #4: PROCESS AND PEOPLE Task Design: Task design poses the chaenge simiar to configuration i.e. decomposing work into smaer subtasks whie coordinating these subtasks to fufi organisationa goas. In ight of mutipe approaches in management iterature, task design can be categorised aong repetitiveness (Xaxis) and divisibiity (Y-axis). The authors ca the four basic task designs as Ordery (A), Compicated (B), Knotty (C), and Fragmented (D). Peope: In designing the organisation, one needs to take into account the professionaisation of the workforce (X-axis) and the number of peope (Y-axis). Based on these dimensions, there are four approaches to peope management, commony referred as Shop (A), Factory (B), Office (C), and Laboratory (D). Leadership and organisationa cimate: Amidst numerous defining characteristics of eaders, the authors choose preference for deegation (X-axis) and uncertainty avoidance (Y-axis) to anayze eadership stye. The four styes, as per these dimensions, are Maestro (A), Manager (B), Producer (C), and Leader (D). Whie eadership stye refers to top management, the organisationa cimate encompasses members across a eves. It is the interna environment which is experienced by the empoyees and infuences their behavior. The cimate measured against readiness to change (X-axis) and tension in work atmosphere (Y-axis) provides us with four categories incuding Group (A), Interna processes (B), Rationa goa (C), and Deveopmenta (D). It is essentia to ascertain the fit among peope and process and aso their fit with goas, strategy, and structure before examining coordination and contro components. Apri 2012 NHRD Network Journa 101

110 STEP #5: COORDINATION AND CONTROL Coordination, contro, and information systems: These eements coectivey support integration of the organisation, information sharing, and decision making. Coordination and contro systems which ink together the disparate eements can be assessed in terms of decentraisation (X-axis) and formaisation (Y-axis). The resuting design options are knows as Famiy (A), Machine (B), Can/Mosaic (C), and Market (D). Information system (IS) incudes a systems that coect, process, and store information within the firm. Two critica dimensions for IS are tacit nature of information (X-axis) and amount of information (Y-axis). Four approaches to IS system can be abeed as Event-driven (A), Data-driven (B), Reationship-driven (C), and Peope-driven (D). The coordination, contro and IS mode underying the enterprise infrastructure shoud be coherent with other characteristics of the design. Incentives: In order to motivate peope to act/make decisions that fit we with other aspects of organisationa design, the choices are basis of evauation of work where behavior represents negative X-axis and resuts ie on positive X axis. In Y-axis, group denotes the positive Y-axis whie individua denotes the other haf. Depending on basis of evauation (X-axis) and target of incentive (Y-axis), four distinct incentive schemes are Persona pay (A), Ski pay (B), Profit sharing (C), and Bonus-based (D). An organisation that undertakes a hoistic approach to design rather than a piece-mea fashion is more ikey to achieve its organisationa goas by obviating the osses incurred from misfits. In short, a the components shoud ie in the same quadrant ese be modified to move towards the desired design space in the 2-D mode. The authors focus on the how to/process and the unique inter-reated mapping which can be cascaded right from top to bottom sets it apart from other books on organisationa design. Aso, the appicabiity of approach to any type of organisation incuding business firms, nonprofit firms, JVs, hospitas, educationa institutes, etc. makes it a vauabe read for everyone irrespective of the firm type. The book concudes with brief discussion on joint ventures, mergers, partnerships and strategic aiances; which has been extensivey examined in the subsequent edition. The second edition pubished in 2011 features severa improvements, incuding a framework for understanding eadership and organisationa cimate and the concept of maneuverabiity. Reviewed by: Neha Gupta (Manager, Stakehoder Communications), Indian Schoo of Business (ISB), Hyderabad. (neha_gupta@isb.edu) 102 Apri 2012 NHRD Network Journa

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