Managing Change and Creativity in Organizations - Term Paper Example

MANAGING CHANGE AND CREATIVITY IN ORGANIZATIONS Table of Contents Executive Summary The Changing Face of Organizational Management – An Introduction Creativity and Innovation Organizational Structure Knowledge Management Employee Empowerment Organization Culture and Employee Motivation Employee Management Strategies and Practices at Microsoft Conclusion References Executive Summary In today’s rapid changing business scenario it is essential for an organization to set the right direction and adapt to the changes as and when required. This is possible only when the organization takes step to train and upgrade the employee skills to meet the anticipated changes. An organization can prove efficient only when its workforce respond quickly to anticipated changes and not fear it. Microsoft is one of the leading IT companies in the world and its success is defined by its team of highly creative and innovative workforce. The paper provides an insight into the organizational theories and practices that drive creativity and innovation in an organization like Microsoft. The Changing Face of Organizational Management – An Introduction Human resource management plays a critical role in defining business performance and productivity. It has a direct impact on the organizational success and market positioning within a highly competitive environment. People are the key assets instrumental in stimulating business growth and development. Human resource management has assumed increased significance in devising corporate strategies and enhancing organizational efficiency. The present economic environment has exposed the organizations to a number of challenges that includes structuring business processes to adapt to rapidly changing market dynamics and operating environment. Successful organizations are founded on principles of creativity and innovation within the work environment that provides the companies with the competitive edge to win strategic battles for market share and positioning. Organizations in today’s world operate in a dynamic environment that is driven by the globalization of economies, increased technology innovations and consumer demands. The changing demographics of the markets are responsible for large scale adaptations in product design, delivery and business processes. Most organizations today face the challenge of leading change management process. It is widely accepted that competent change management can help businesses transform their operational procedures, outlook and approach towards more effective and efficient means of delivering goods and services. A company in order to harness its strengths and core competencies to gain competitive edge must be able to identify them. One of the primary challenges facing the recruiter is to identify the key skills and competencies required by the organization to execute its tasks and objectives. A vital aspect of core competency development within organizations relates to training and development of employees and effective implementation of knowledge management systems. Microsoft is a leading IT company that employs nearly 80,000 people across the globe earning total revenue of nearly $15 billion. The company started as a partnership between nineteen year old Bill Gates and Paul Allen in the year 1975 when they sold their first program BASIC to a computer firm in Mexico (Microsoft, 2009). The company grew steadily over the years through a process of innovation and creativity that led to the emergence and growth of Microsoft products and services in response to changing market demands and expectations. The company owes its success to innovative practices that are based on a strong organizational structure and culture fostering creativity within its employees. A deeper analysis of the organizational practices at Microsoft reveals that effective knowledge management strategies and employee strategies have provided the company with the leading edge in the field of information technology and customer outreach. The paper provides an insight into the various aspects of organizational management that provide the necessary stimulus for promoting creativity and innovation within an organization. For the purpose of clarity and improved understanding of the theories the discussion focuses on the significance and role played by these factors in driving a high performance organization. The subsequent section links these theories to practical application at Microsoft and the strategies adopted by this organization to harness employee creativity skills and talents for pursuing business goals and objectives. The discussion also highlights the significance of change management strategies in adapting to new business environment needs and identifying new market opportunities. The application of effective change management practices has created a niche market for Microsoft over the past few decades and the discussion identifies these practices and its application within the organization. Creativity and Innovation Creativity is one of the vital factors driving organizational performance and growth. Presently most of the organizations focus their strategies on increasing employee morale and motivation levels to foster creative ideas at workplace. Creativity helps in the process of creating new products or services that are better or new. Creativity refers to the production of novel ideas that provide a new meaning to the existing processes or issues. A creative idea must have uniqueness in the nature of solution or ideas presented and must have value to the context in which it is being utilized. In the business context creativity reflects innovation at workplace triggered by organizational culture and practice that is aimed towards increased productivity and enhanced performance levels. “The focus of creativity may be innovation in the traditional sense – the invention of outstanding products and services – but it may also be the development of new processes, new ways of attracting and retaining the best talent” (Daff and Lawrence, 2003). Innovation is the product of creativity and personal motivation that leads to the development of new ideas and thought processes. The process of creativity and innovation within an organizational framework provides leverage to the business in terms of increased customer satisfaction, reduced cost of operations or enhanced quality standards. Innovative ideas are often reflected in terms of increased productivity and individual performance levels. Organizations flourish when they provide their employees with the necessary resources that promote creativity and innovation at work. These resources include access to required knowledge base and information that encourage employees to think out of the tank and an organizational culture that enables the employees to participate in the decision making process. Creative and innovative ideas are nurtured within organizations through appropriate organizational structures that facilitate employee skills development and growth. Organizational Structure Organizational structure plays a critical role in nurturing individual talent and providing the employees with the opportunity to deliver their true potentials. The organization in order to be efficient must understand the dynamics of the environment within which it operates and adjust its strategies to accommodate the changes or anticipated changes. The organizational design takes into account the reporting lines, communication protocols, decision making process, employee guidelines and compensation schemes. Organization structure is perceived to be a key element in determining type of managerial strategies and problem solving mechanism adopted by businesses. The new organizational structures are flat and non-hierarchical that is primarily due to the increasing collaboration between levels and departments and specialization of work. The new business environment influenced by globalization of economies and liberalization of markets has created the need for highly skilled professionals in their respective fields. Businesses today rely on the specialized knowledge and capacities of their workforce for success. Knowledge management has assumed great relevance in formulating managerial strategies and meeting new economic challenges. Knowledge Management Modern economy is driven by knowledge sharing programs that provides businesses with the competitive edge and improves quality of products and services delivered. The organizations are emphasizing the significance of human capital optimization strategies that involves knowledge sharing processes and information flow within the enterprise. “To be dynamically stable, organizations need to build their success of future revenue by maximizing the generation and flow of ideas and knowledge” (Holbeche, 2005). In the organizational context, knowledge is a tool that helps the organization to achieve strategic goals and objectives. These goals include generating a reputation for technical expertise, translating expertise into new business ideas, gaining new experience in specific areas to achieve cost advantage and optimum use of internal resources. Managers use various methods to develop and spread ideas and information within the organization. Some of these methods include cross functional teams that encourage team members from other work processes to learn the work procedures of a different process. This facilitates inter-operability in times of urgency and promotes the optimal use of human capital. Specialized teams that look into specific product or customer focused issues are another way of enhancing work performance while enhancing organizational expertise in the specified field. A study on the Need for Knowledge Management by BhogaRaju (2005) observes that implementing KM within an organization enables its employees to serve customers more efficiently, find cost effective and innovative techniques to complete a task, enhance flexibility and adoption, and empower employees. Employee Empowerment Employee empowerment is a new approach to management that incorporates employee self development programs to enable their involvement in corporate decision making process. Robert Heller (2005) in his article “Employee Empowerment: Management giving power to the people” defines empowerment as organizational culture where everyone can take action to enhance his or her own work, either in personal or professional terms. Traditional business outfits had management at the top level having well defined roles and functions that include directing, managing and leading the organization. However, the empowered organization promotes a flatter structure. The non hierarchical organizational structure promotes responsibilities and motivates the employees to put in their best at work resulting in high performing organizations. Employee empowerment allows individuals to get actively involved in the various stages of decision making process that includes identifying problems, analyzing alternative solutions, and recommending the most effective solution to the problem. Employee empowerment and non-hierarchical organizational structure are widely appreciated by most organizations owing to its contribution to promoting a healthy organization culture. Organization Culture and Employee Motivation Organization culture defines the organizational belief and attitude in the way goals and objectives are accomplished. An organization is shaped by the culture that predominates in work environment, employee behaviour and managerial attitude. However, in face of rapidly changing business requirements and market trends organizations are now implementing fresh strategies that improve the work environment and organizational culture to promote higher level of motivation and employee productivity. Employee motivation and satisfaction is one of the core elements that have a direct impact on the overall productivity and performance of the organizations. Employee satisfaction levels are to a large extent driven by organizational policies, managerial attitude, organizational culture, existing work environment, and communication policies practiced and adopted by companies. All types of organizations face the challenge of motivating employees to achieve higher levels of performance and build a work climate that induces positive attitude to work amongst its employees. Effective human resource management policies can play a critical role in shaping the necessary infrastructure that influence employee behaviour, attitude and performance. HR can support the organizational goals through individual development plans that include job rotation, skills development workshops and relevant soft skills and technical training. Rewarding an employee with financial compensation is a form of motivation that is intended to increase productivity and encourage others within the organization to strive harder to reach the specified performance targets. Adequate work incentives, performance bonus and compensation schemes are highly effective in increasing employee morale and motivating them to perform better. However, financial incentive alone is not sufficient to motivate the employees to perform better. The performance related pay system needs to be supported by a thorough understanding of the organizational culture, adequate monitoring and supervision of managers, transparency in communications and suitable growth opportunities to reinforce employee motivation. Employee Management Strategies and Practices at Microsoft Evolving business climate includes vast transformations in the perception of organizational leadership, managerial functions, and human resource strategy. Corporate management faces more challenges in the form of changing corporate relations and increasing global influences that have set a new pattern in managing people and businesses. Microsoft supports a highly creative organization culture through effective people management strategies that focuses on nurturing talent and employee development in the long run. The organization has emerged as a powerful market operator providing its customers with a series of IT tools and services that meets changing business needs and expectations. The success of the multinational corporation is largely accountable its high performing workforce that has contributed to the generation of innovative ideas and production of new products and services to meet the business and consumer demands. “We aim to attract and train first class talent, helping them to fully harness their intellect and unique gifts” (Zhang, 2009). Ya-Qin Zhang, the Chairman of the Microsoft China R&D group provides a comprehensive view of the human resource strategies and the significance of employee skills in ensuring a competitive edge in the IT industry. The human resource practices at Microsoft emphasize the significance of human capital resources in shaping organizational growth and productivity. The driving force that makes IT enterprises successful is the intellectual property that makes up the technical core of the company (Zhang, 2009). Microsoft provides its employees with access to updated technology and tools ranging from Intranet facilities to information resources that enable extensive research practices and increase performance. The organizational structure of the company promotes employee participation in the operational decision making process. A flatter structure and open lines of communication within the organization has enabled the employees to engage in activities that contribute to increased productivity and enhanced performance. The company has been projected as a employee driven organization that offers its workforce increased flexibility in terms of work hours, benefits and recognition schemes. Microsoft has made distinctive efforts to incorporate training and development programs designed to meet the company’s objectives and nature of business demands. Besides the knowledge management systems within the organization has provided the employees with the required resources to promote creative and innovative work practices. Employee training and development strategies have provided the organization with improved skills and competency levels that result in positive work attitude and environment. The existing business environment has increased the need for creativity and proactive behavior from employees. Businesses require skills for doing the job and in current market conditions advancing technology at rapid pace makes it imperative to learn new skills and upgrade one’s knowledge to adapt to changing market conditions. Organizations that provide a positive work climate through management policies that encourage employee talent and skills development are found to be better adjusted to face operational challenges and meet increased employee satisfaction levels. Such practices that enable the employees to develop their talents and skills on the job and increases motivation levels to go that extra mile to perform exceptionally well, can have a deep impact on the organizational performance. The key HR strategies focused on increasing and retaining employee motivation through an effective performance management framework that is supported by transparency in communications, adequate growth opportunities and employee skills development process. Improved communication can help in motivating employees, reduce employee resistance, and pursue change mechanism effectively. But it needs to be understood that the communication process is not simply conveying the message. It is a two-way process that needs interaction between the two parties. The management and the employees need to interact on how the plan is going to take shape and what are best possible ways to minimize risks and hurdles in the process. Another vital ingredient for successful communication process is consistency. The management policies need to be consistent in their approach to instill trust and confidence in the employees. Small tokens of appreciation work wonders in driving employee interest and enthusiasm towards work. Feedback delivery mechanism adopted act as a positive reinforcement rather than create negative feelings among employees. Applying motivational statements and reinforcing high standards of work can have a positive impact on the employee performance. Employee appraisals and one to one meetings with team members play a vital role in improving the communication between employees and their supervisors. It also assists in defining specific job objectives, relating personal objectives to the company goals, identifying parameters of performance management, defining how a particular job could have been done better, improving employee performance and work relationships, and most importantly identifying the barriers to better performance, and means to dissolve these barriers. Conclusion Rapidly changing business dynamics have made it critical for organizations to adapt to the changing market trends in order to survive and retain its competitive edge. Managers are increasingly realising the role training and development can play in pursuing new strategies and enhancing employee productivity. “Innovative companies not only try to hire creative people, they also try to develop in ways which will increase their creative output” (Christiansen, 2000). Microsoft has effectively incorporated strategies to empower its employees and lead the organization through increased creativity and innovation at work. This process has been greatly enhanced through employee training and development strategies. It should be noted in this context that current training needs are largely influenced by the globalization process that has triggered widespread changes in the economic environment and market conditions in which businesses operate. Organizations need people who are dynamic and are capable of molding themselves to meet changing market demands and enable the organization in meeting increased competition and capitalize on new business opportunities. However, it is important that corporate training programs are linked to strategic goals and objectives of the company. The business leaders should take the responsibility of creating a workforce that is well equipped to support the organizations’ growth strategies and meet the challenges of working in a global environment (Tong, 2008). References: 1. Riveros, Fernando Vega J. 2008. Creativity and Innovation. http://ece.uprm.edu/~icom5047/fall08/documents/Creativity%20and%20Innovation.pdf 2. Scotland, John. 2007. Strategic Innovation Leadership. http://www.thehrsummit.com/perth_07/pdf/Strategic%20Innovation%20Leadership%20-%20DF%20-%20Perth.ppt 3. Christiansen, James A. 2000. Building the innovative organization. 1st edn. New York, St Martin’s Press. 4. Holbeche, Linda. 2005. The High Performance Organization. Elsevier Butterworth-Heinemann Publication. (239-291). 5. Roberts, J. 2004. The modern firm: organizational design for performance and growth. Oxford University Press. 6. Heller, Robert. 2005. Employee empowerment: management giving power to people. http://www.thinkingmanagers.com/management/employee-empowerment.php 7. Tong, Dominic. 2008. Adapting Hong Kong’s workforce to meet the global challenge. http://www.ibm.com/news/hk/en/2008/07/01/p323016v95884e42.html 8. BhogaRaju, G. (2005) Knowledge Management: Why do we need it for corporates. Malaysian Journal of Library and Information Science Vol 10, Nos 2 37-50. http://eprints.rclis.org/5538/1/KM_why_do_we_need_for_corporate.pdf 9. Microsoft. 2009. Microsoft. http://www.microsoft.com/en/us/default.aspx 10. Business Week. 2007. Reshaping Microsoft’s HR Agenda. http://www.businessweek.com/magazine/content/07_37/b4049070.htm 11. Zhang, Ya-Qin. 2009. Management and culture in Microsoft, China R&D Group. http://www.microsoft.com/china/CRD/en/innoforum/innoforum_02.mspx 12. Herbolt, Robert J. 2009. Inside Microsoft: balancing creativity and discipline. http://www.manyworlds.com/exploreCO.aspx?coid=CO13022425658 13. Graff, Jeff De and Lawrence, Katherine A. 2003. Creativity at Work – developing the right practices to make innovation happen. University of Michigan Business School Management Series. Jossey-Bass. Read More