Individual Actualization in Complex Organizations - Essay Example

Individual Actualization in Complex Organizations Introduction People management has always fascinated everyone and various theories have been expounded to explain how people act and react in different situations. The primary image of an organization is akin to family, clan or tribe where relationships, needs, feelings and skills are the characteristics of its members. The objectives are empowerment, liberation, fulfilment and self actualization of both the individual and the group and the challenge is how to develop attitude to achieve this goal. There are three assumptions to all Human Relations (HR) theories. Organizations serve human needs. People and organization need each other for this service. It is critical that people and the organization are in complete harmony to fulfil this purpose. Abraham Maslow (1954) described this in a hierarchical manner starting with human psychology, safety and security, belongingness, self esteem and finally self actualization. According to Maslow employees have a basic human need and a right to strive for self-actualisation, just as much as the corporate directors and owners do and by this fulfilment the organization becomes stronger, competitive and profitable. Chris Argyris (1957) argued that conflict was an inherent part of the issue and the result of skill was monotony of work. This dehumanizes a person and leads to conflict. Negative or Positive attitude of the management is explained by Douglas McGregor (1960) in his theory X and theory Y. According to him a negative attitude of the management, theory X, presupposes that workers are lazy, passive, without ambition, willing to be led and resist change. Hence management is through control, coercion, threats and punishment. This results in low productivity, antagonism, unionism and subtle sabotage. In contrast positive management, theory Y, believes that people are motivated, active and interested, ambitious, prefer to lead and are interested in change. Hence management is through open systems, communications, self-managing teams and peer controlled pay systems. The result is high productivity, bonhomie and care for the organization. Organizational and National Cultures However HR is influence by the culture of the firm. Every firm has written or unwritten codes of conduct and it expects it employees to work by these rules. According to Nelson and Winter (1982) routine interactions within the working environment forms the basis of organizational culture and a predictive pattern emerges. Deal and Kennedy (1982) describe it as “the way we do things here”. The importance of this routine is gaining importance as has been acknowledged by Cohen et al (1972) and Hedberg et al (1976). Ritual activities form another view of practices as shown by Trice and Beyer (1984, 1985). The culture of the organisation has been defined by Edgar Schein (1985) and acknowledged at three levels of cultural phenomenona: basic assumptions, values, and artifacts. Basic assumptions are the conditions taken for granted in an organisation and considered to be the "correct" way of doing things. These are the foundations and are the deepest level of culture and are the most difficult to change. At the next level are values and these are perceived to be changeable and also that need to be changed. The artifacts are behavioral usages at the front like rules, procedures, communications and technology that are readily changed and indeed do not change values or traditions but are mere change of presentations or mannerisms. Nevertheless, HR practices are at variance in different countries due to several reasons; amongst main causes are different business structures (Schuler et al 1994, Pieper 1991); employment laws of the country (Florkowski and Schuler 1994); model of competency and decision making used (Sparrow et al 1994); and most importantly the national cultural practices (Hofstede 1990, 1991). The most crucial is the national culture and these HR practices dominate the International Human Resource Management (IHRM) scenes in successful companies. These are the impressions and practices picked up in early childhood and called software of the mind by Hofstede (1993). These are less explicit and are the main drivers of customs and eventual behaviours (Jaeger 1986). When these values are undermined, workers are dissatisfied, distracted, uncomfortable and uncommitted (Newman and Nollen 1996). The Question of Cultural Fit A question has arisen in ‘Whether or not firms achieve a good “cultural fit” between their HR practices and their local environment has little effect on their performance’. In the light of above statements it appears to be so. A firm has to adapt to fit the local conditions for getting the benefit of the host markets both for profitability and growth. However this is not the case. Firms grow and become profitable due mainly to their exceptional leadership and the competitive advantage they create for themselves. IKEA – Defying Logic This question can well be answered in a case study of IKEA, the Swedish Furniture company that has defied conventional wisdom from its inception. Apart from the fact that it introduced a vertical supply chain in an industry that is considered to be highly localized, and converted the company to a global giant, it has adopted soft HR policies that have been heavily influence by its own national culture. Yet it is highly successful in the global markets. It has borrowed heavily from the Swedish national culture. It has management by consensus. Its Human Relations policies reflected this soft approach and learning by doing is encouraged. There are only three levels of rather blurred hierarchy between managers and employees called co-workers to eliminate bureaucracy. IKEA has adopted a subtle way of doing things and this culture is inherent throughout the organization, irrespective of the countries it operates in. In the name of training week long seminars for managers are held periodically at the Swedish headquarters. A notable feature is that to be in the top echelon an executive needs to understand the Swedish language and culture which means that there are few non-Swedes at that level. There are some HR problems at IKEA. In each of its three large markets, Germany, France and the USA it faces adversities but its management refuses to change its policy of adaptation by saying that their uniqueness lies in the fact that they have a different attitude to everything; be it business practices, management or human relations. Leadership and Competitive Advantage Theory says that this is definitely wrong and should result in the company showing declining results, but its continued growth defies logic. One reason for this appears to be the radical leadership at IKEA. “Founders of organizations, while usually unique individuals, are also children of a national culture; so the founders national values appear to be reflected in the values of their organizations, even if the organizations spread internationally”. (Hofstede 1985: 349-50). Leaders have a great impact on Organizations and Ingvar Kamprad, the founder, was an exceptional leader whose foresight and acumen has led to the phenomenal growth of IKEA. His mission of offering a cost effective product to the consumer still carries weight and he is proved right by the steady rise in business. The heart of strategy lies in its competitive advantage (Porter M.E. 1980). When a firm becomes different by offering value, quality and some attributes through which it offers some uniqueness then it will become an above average performer in its industry. But to arrive at this stage the firm must make difficult choices. In a later essay Porter M.E., (1966) redefined strategy to be a combination of differently performed activities. While the activities remain the same, the approach taken to perform or enact them is the strategic decision that pays off. This brings about strategic positions that are unique by themselves and set the organisation apart from its rivals. All positioning is directed to entice the consumer. The uniqueness appeals to the customer. But for this it must fulfil the customer’s needs or wants. Hence strategies are to be consumer oriented. Positioning demands some sacrifices. Organisations have to make choices in order to position themselves and positioning comes out of best set of activities suited to produce those results that satisfy the consumer. These activities have to be performed in a different way to produce unique results enabling the organisation to position itself or its products for a destined set of consumers. Conclusions Choices means trade-offs and this results in giving up some activities in preference for others. This is a difficult choice as it restricts the organisation to a particular set or sub-set of orientation. But excellence cannot be achieved without trade-offs. An organisation cannot perform two separate set of activities to position itself with two set of standards as it will then fail to compete with its rivals. Trade-off is important as it limits the organisation’s offering but they certainly raise the level of the offer to such heights that the rivals cannot match it. Here is where the concept of Fit comes into play. A fit is when ideally all activities relate to each other in a tight way and when each is as strongly linked to the other like a chain. Furthermore each link in the chain is equally strong so that the fit is complete and such a fit cannot be copied. Consistency, complementary activities and optimal effort are the ingredients of a fit. This is what brings sustainability in strategy. A strategy has to be sustained for very long periods for pay-back and it should be inimitable by competition. This can happen only when activities are performed differently. Porter is also of the firm view that the leaders play a decisive role in shaping strategy. These two factors, Leadership and Strategy, prove that it is possible for a firm to perform well despite its HR policies being at variance with local conditions. Bibliography 1. Argyris, C., (1960). Individual actualization in complex organizations. Mental Hygiene, 44(2), 226‑37. 2. Cohen, M.D., March, J.C., and Olsen, J.P. (1972), A Garbage Can Model of Organization Choice, Administrative Science Quarterly, 17: 1-25. 3. Deal, T., and Kennedy, A. (1982), Corporate Cultures: The Rites and Rituals of Corporate Life, Reading, M.A: Addison-Wesley 4. Florkowski Gary W., and Randal S. Schuler., 1994, Auditing Human Resource Management in the global environment, International Journal of Human Relations Management, 5: 827-857 5. Hofsted, G. 1985, ‘The interaction between national and organisational value systems’, Journal of Management Studies, 22/4, pp. 347-357. 6. Hofstede, G. 1991, Culture’ consequences: international differences in work-related values, Sage London. 7. 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