The Firm's Elimination of Excess Management - Term Paper Example

Organisational Comparisons: Culture and Teamworking Methods within Radically-Different Companies By You Your Academic Organisation Introduction Two radically-different organisations have provided a brief snapshot of their companies managerial policies in relation to teamwork and organisational design. Semco, an engineering business in Brazil, describes a much more liberal management philosophy, focusing on building employee motivation through employee empowerment policies. Within Semco, self-managed teams and diminished layers of management in the firms managerial hierarchy have created a culture of shared values focused on product-related quality improvements. Various training initiatives and open staff communication are additional focuses to building a more stable, internal business environment. Barking Engineering (BE), established in the United Kingdom, maintains a much more developed managerial hierarchy, with this firm utilising a more traditional organisational structure built on managerial competencies and sizeable layers of management. BE assessed its internal environment, proposing the creation of various self-managed teams in order to improve plant functions. Despite BE leaderships best intentions, turnover ratios are high in this firm whilst employee motivation to perform is dismally low. These two distinctly opposite firms have adopted considerably different organisational hierarchies and have exhibited radically-different viewpoints regarding perceived employee competency. This paper will describe three elements of organisational philosophies: Teamworking, organisational design and organisational culture. Each of these business methodologies will be compared in relation to both Semco and Barking Engineering in order to determine which organisation has provided the most beneficial internal system of business. Comparison of approaches to teamwork Semcos CEO, Ricardo Semler, heralds his business success as a profitable company, citing its liberal policies on democratic employee systems as a primary driver for its sustained success in its industry. Semco cites a significant initiative to remove unnecessary layers of management at the firm, allowing employees to work in relatively unmanaged teams whereby the employee-led groups undertake responsibility for virtually all elements of the business from product design to final product delivery. This system provides employees with an enhanced motivation to perform to company expectations, whilst experiencing autonomous work environments which allow employees to practically mould their own job descriptions. Semco has provided information pointing toward an organisation which has experienced tremendous success under liberal team-building policies, suggesting that self-managed teams and autonomous work environments are the key to sustaining a business long-term. It is commonly understood that teamwork, in todays business environment, aids in communication between management and subordinate employees and minimises internal competition between employees (Nickels, McHugh & McHugh, 2005: 222). Such streamlined business operations are quite evident at Semco, as employee teams are granted the authority to act as the primary liaisons between various suppliers and customers. With the CEOs recommendation citing Semco as a strong and profitable business, it would stand to reason that self-managed employee teams at Semco have continued to provide excellence in product quality and total customer service. Barking Engineering, however, has established a more rigid system of management, with less emphasis on developing the quality of self-managed team groups. Though the company has cited an attempt to mimic internal policies of other successful organisations, through the relatively unprecedented creation of self-managed teams, the business is experiencing less-than-satisfactory internal performance. BE, unlike its counterpart Semco, has not adopted a system of resources designed to motivate employees, rather its self-managed teams are regulated by team supervision, which suggests that BE still maintains a strong belief in the importance of routine managerial presence within team projects. For instance, Barking Engineering has publicly categorised its internal labour force as supervisors, skilled, and semi-skilled, suggesting that those employees with more diverse job-related competencies will receive significant favouritism in relation to compensation and job satisfaction. BE maintains a significant divide between its management systems and that of its human resources department. In virtually all businesses today, maintaining a human resources advocate tends to instil confidence in employees that the business believes in the importance of human capital and will work to develop employees to maximise their core competencies. However, at BE, despite its best attempt to build self-managed teams and internal cooperation, is missing perceived equity. Equity can best be defined as the perceived fairness of what a person does with what they ultimately receive in business environments (Mathis & Jackson, 2005). At Semco, equal employee treatment is quite evident, as the creation of self-managed teams provides all employees with equitable compensation in the form of employee profit-sharing. Within BE, employees are segregated by their existing skill levels, with sizeable divisions between fair compensation and minimal pay grades based on knowledge. Rather than develop the team members using adequate training programmes, which is a common practice at Semco, BE allows its semi-skilled workforce to handle mundane tasks, with zero additional compensation provided for increased learning, suggesting that BE must rethink its current methods of building quality teams so as to prevent high turnover ratios and dismal staff motivation. Comparison of organisational structure and design Semco maintains what is referred to in contemporary business as a boundaryless organisational design, referring to a management design which eliminates internal and external structural boundaries that often inhibit employees from collaborating with one another and other external entities, such as customers or suppliers (Gomez-Mejia, Balkin & Cardy, 2005: 396). The companys CEO praises his companys best efforts to eliminate layers of management, citing a vast assortment of human resources-inspired tactics to build employee competence and long-term motivation. The utilisation of self-managed teams, at Semco, provides employees with ample opportunities to grow and develop, whist also experiencing flexibility in determining the appropriate job design. It is a growing trend in todays successful businesses to remove some of the traditional focus from sustaining a highly centralised managerial hierarchy, where command decisions stem from the highest levels of executive leadership. Today, companies are minimising management layers so as to simplify its internal chain of command, thereby becoming more quick and nimble in relation to responding to changes in the business environment (Sandburg, 2005: B.1.). Semco has found significant increases in growth and profitability, suggesting that the flattening of managerial layers provides employees with ample opportunity to become more diverse components of the business, leading to higher overall job competence. Barking Engineering, from a much different perspective, despite its attempts to benchmark the concept of self-managed teams, is experiencing considerable animosity in its current command hierarchy. In most respects, BE represents a firm with a strong belief in sustaining a more centralised management hierarchy. Despite the companys approach toward building employee autonomy, the firm still regulates the activities of its self-managed groups with the utilisation of team supervisors, suggesting that the firm believes in the importance of management as a primary element to building successful teams. When a firm such as BE provides little opportunity for employee development, it is sending the message to employees that their role in the business is minimal in comparison to that of management competency. The business maintains an environment where members of management are granted the highest levels of internal authority, leading to the aforementioned high turnover rates and diminished staff motivation. When animosity exists, created by segregating employees by skill levels, group performance can be significantly hindered. Ineffective group performance outcomes, according to Ayoko & Hartel (2006), are generally a product of poor team characteristics and team processes. With the acknowledgement in place that BE maintains considerable inequity at the company in relation to its newly-created self-managed teams, the ultimate outcome to the business will be unproductive workers with a building resentment of the management team. Unlike Semco, which has stripped its management tiers, BE must consider providing employees with increased development and autonomy if their long-term loyalty and contributions to sustained performance are expected to be realized. Comparison of Cultures Organisational culture, by most accepted definitions, involves a system of shared beliefs, assumptions, values and social norms which unite members of a business to reach optimal internal performance (Gomez-Mejia et al, 2005: 145). Strong cultures tend to generate pressure to conform to business objectives with much less reliance on formal control systems, including intense supervision (Gomez-Mejia et al). Within Semco, the organisational culture is one of total staff unity, where each employee is driven to excel in their individual job positions based on various motivational practices generated by the chief executive officer of the firm. Semco believes in democratic systems as the core value which is key to sustaining the business objectives over the long-term. Publicising democracy as a key corporate belief tends to illustrate that the firm legitimately values its employees and will continue to provide increased motivational tactics to ensure staff loyalty in recognition of their efforts to perform. Therefore, the key to this firms organisational culture is that of motivating performance. Abraham Maslow, a renowned 20th Century psychologist, established a theory known as the hierarchy of needs, which involves a series of inherent employee needs which require fulfilment in order for employees to reach the apex of their total competence (Morris & Maisto, 2005). Of these complex needs, esteem is the most vital, which involves the receipt of positive feedback and recognition for a job well-done. At Semco, opportunities to grow and develop within the company, along with generous, positive communication between leadership and subordinates, fulfils this need for esteem, driving the employee to their optimal level of self-improvement and performance. However, at BE, employee esteem needs are being blatantly ignored by its layers of management, failing to provide subordinate workers with motivational tactics, such as profit-sharing or genuine autonomy, providing a significant drop in total enthusiasm to perform. Despite the firms best efforts to establish self-managed teams, the existence of a singular leader within each project group tends to highlight that BE leadership sternly believes in the effectiveness of a more rigidly-controlled management hierarchy. Failing to provide semi-skilled workers with opportunities to grow and develop are substantially minimising the fulfilment of esteem (under Maslows theory), which prevents the subordinate staff from reaching their optimum desire to exceed performance expectations. The main managerial belief at BE is that if something is not broken, one does not need to fix it. There is clearly a separation between expected performance outputs and employee willingness to succeed at the firm, suggesting that the leadership at BE is somewhat blind to its internal operations. For instance, despite high turnover rates, a bitter human resources department, and high absenteeism, it would appear that BE believes that its internal culture is strong and thus requires no modification. When senior leadership is less-prominent on the manufacturing floor and exhibits little publicised acknowledgement of the firms need to administer change in favour of motivating employees, the end result is subordinate resentment and performance failures. Conclusion Clearly, Semco has built a quality reputation on the market, which is evident by increased profitability and sustained growth. The firms elimination of excess management, leading to increased employee autonomy, has created a system of team-orientation which is serving the company well over the long-term. Semco provides its employees with a strongly democratic work environment, suggesting that each employee is treated with relative equity and that each individual is valued for their contributions to the success of the firm. Semcos internal management policies are worthy of benchmarking as a solid template to other firms looking toward methods to administer change and increase total staff motivation. BE, from a completely different viewpoint, is creating an environment with mixed messages, offering autonomy to employees but never actually providing an unsupervised work environment. High-skilled workers are clearly favoured with better working conditions and opportunities, while semi-skilled workers are reporting a mundane, ineffective company. This is reflected by an unwillingness to remain with the company (turnover rate) and lack of motivation to show up routinely to the job. At BE, the firm must examine its current philosophy of self-managed team concepts and begin adopting a more democratic system in favour of employee contributions. Failure to do so will likely plague this firm for years to come with high turnover rates. Further, failure to provide their human resources division with more authority will drive a wedge between employee systems and management systems, ultimately leading to unsatisfactory business performance; both external and internal. Clearly, Semco is leaps ahead of BE in creating a quality work environment for its subordinate staff members. Bibliography Ayoko, O. & Hartel, C. (2006). Cultural diversity and leadership: A conceptual model of leader intervention in conflict events in culturally heterogenous workgroups. Cross Cultural Management. Patrington: 13(4), 345. Gomez-Mejia, L., Balkin, D. & Cardy, R. (2005). Management: People, Performance, Change. 2nd ed. McGraw-Hill Irwin, London: 396. Mathis, R. & Jackson, J. (2005). Human Resource Management. 10th ed. Thomson South-Western, United Kingdom: 70-71. Morris, C. & Maisto, A. (2005). Psychology: An Introduction. 12th ed. Pearson Prentice Hall: pp.348-349. Nickels, W., McHugh, J. & McHugh, S. (2005). Understanding Business. 7th ed. McGraw-Hill Irwin, London: 222. Sandburg, Jared. (2005). Office Democracies: How Many Bosses can One Person Have?. Wall Street Journal: p.B.1. Read More