MGM - Week 4: Discussion Question, IR & Responses

Welcome to Week 4 of the MGM!

Below you shall find this week's Discussion Question (DQ) as well as my Initial Response (IR) to it followed by the Discussions had with my professor and fellow student. The post ends with my hand-in assignment for the week.

Regards,

El Tanoderno

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Week 04 Discussion Question


Reading: Child, J. (2005) Organization: contemporary principles and practice. Malden, MA: Blackwell Publishing.

In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real companies.

Examine the implications of new technologies on organisation, using examples from your own company or another organisation you know well.

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My Initial Response to Week 4's DQ: 

Implications of New Technology on Organization

The past few centuries have seen tremendous advancements in technology that shaped the way we make business in the 21^st Century, from the Industrial Revolution in the 18^th Century to entering the Modern Age in the 20^th Century and up until now, which has become known as the ICT Revolution, Digital Era as well as the Information Age (G15, 2008) amongst many others

Since the 1950s technology has made significant changes within organizations as organization has no longer to focus around hierarchy and the accumulation, storage and distribution of information as much as in traditional vertical organizational structures, bureaucracies, where the main focus was ‘command and control’ (Zammuto et al, 2007).

Instead of using a rainforest of files in copious amounts of file-cabinets, a company’s accumulated data is generally stored in a main computer that is kept secure, just as was the case during an internship at the IT department of Kuoni.

Compared to our forefathers we have such an array of new tools it will be difficult not to leave a good amount of these out and how they have facilitated as well as the continuous development of said tools and how they keep facilitating, not to mention impacting, on the way we work in organizations. The way these new technological advancements impact the structure of an organization and the processes within an organization is evident in both.

One aspect in which an organization benefits from technology is by reducing a company’s costs of information processing and communications by annually increasing processing power and through enterprise-wide systems that create a single database hosted on a server providing automated processing and analytical reports (Zammuto, 2007). 

How does saving costs translate into organization? Simply by saving money the organizational processes that need more focus, now, have another financial backing source. Resources can now be increased to reward, control and integrate or by focusing on customer needs and invest more into the R&D department to make that new gadget the crowd so eagerly would like to have. In a structural sense, these systems allow integration to occur across organizational boundaries, i.e. the vertical hierarchy, and by the integrative aspects these systems provide they decrease the necessity to use hierarchy to manage information flows and coordinate tasks, thus perhaps making certain positions obsolete within the chain of command. This ultimately allows people to organize around their function itself as an employee and how the information may benefit the organization as a whole (Zammuto, 2007) by increasing the speed and reliability of transaction for both business-to-business (B2B) and business-to-customer (B2C) transactions (OECD, 2005).

Another example, whilst I was Assistant-Delegate Manager at Richmond Events (RE) in London, a fellow colleague found out she was pregnant but, even though the company was to give her maternity leave, she decided to work from home using the company laptop which allows her full access to the intranet used by RE and hence the data of all clients as well as being updated in real-time. This meant RE didn’t have to find a replacement that wouldn’t perform all responsibilities as well as my colleague due to unknown terrain, thus keeping the process-based activities fully intact which wouldn’t have been able without the necessary technology.

Due to the successful integration of working from home, which has been on the rise in Europe from the 90s (Brocklehurst, 2001), she now regularly works from home although mainly from the office. This freedom relaxes and decreases stress found in the workplace thus increasing performance.

Sitting amidst this revolution and looking at the impact and implications a question might arise to some. How will our dependence on technology fare on our overall performance in an ever competitive market in which people become obsolete due to the convenience of technology?

References:

Brocklehurst, M. (2001) ‘Power, Identity and New Technology Homework: Implications for ‘New Forms’ of Organizing’ Organization Studies, 22/3 [Online]

Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 28 January 2012)

Anon (2005) ‘ICT, E-Business and SMEs’ OECD Digital Economy Papers Number 88 [Online]

Available from: http://www.oecd.org/dataoecd/6/9/31919255.pdf (Accessed 28 January 2012)

Zammuto, Raymond F. et al (2007) ‘Information Technology and the Changing Fabric of Organization’ Organization Science Vol.18 No.5, September-October [Online]

Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 28 January 2012)

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Good, Andrew. Regarding your employee who is
working from home do you know the percentage of
employees in your company  who are allowed to do
so? Has the company reviewed the data that confirms
that most employees are more productive at home, or
why do you think the company went this way?  Best, Dr. L.

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Dear Dr. Lapkoff,

Richmond Events’ London branch currently employs an estimated 30 employers, although during my time with the company and prior to the Credit crunch there were about 50 employees which were divided more or less equally by occupying two floors. 

During my three years at RE, as called by employees, I’m only aware of my colleague telecommuting on such a regular basis, although others, from time to time, were given the same privilege but on a far less regular basis. The reason as to why she enjoys the freedom of telework more than others is primarily because she is a very diligent, highly time-organized, efficient and disciplined worker that dedicates oneself to deliver no matter how stressful it might get whilst raising her first-born son by herself. 

Therefore, on the basis of trust built up through dedicated hard work instead of reviewing any data, she was given the regular privilege of teleworking. 

This complies with the following,

‘First, telecommuters may be more productive because they receive additional training and/or are selected to become telecommuters because they are already the most productive employees.’ (Butler et al, 2007).

Other employees enjoyed other privileges which were suited to their needs. My senior, for example, was given the privilege of taking her family, each entire summer, to her villa in Spain or leave early in order to pick her kids up from school. During this time I would take on her full responsibilities and report directly to the Logistics and Supply Chain Team Manager whilst maintaining contact with her by e-mail.

London’s RE Branch is rather small and with a pronounced horizontal structure due to consisting of 6 teams, Marketing, Logistics & Supply Chain, Finance, PIMS International and HR as well as IT, which all work independently from each other and therefore RE functions with low specialization and high discretion. Each team has a team leader who controls each team and reports directly to the manager of the branch whilst cross-conferring with other team managers, especially IT and Finance. 

Through this process-based approach employees are given a lot of freedom, although under one condition, which is to work diligently and to get the right results otherwise one may be made redundant. The same colleague that became pregnant was also given a one week holiday to Miami with her son as thanks for her hard work prior to becoming pregnant.

What has to be taken in consideration is that telecommuting is only performed on a short-term basis at RE and not made the principle manner of working. 

‘…many organizations offer telecommuting as an option, but are not strongly encouraging it. This is a very telling indicator that telecommuting does not deliver, at least at the level of the whole organization…’ (Westfall, 2004).

It is rather used as a strategic tool to help maintain productivity, which is even found to be sustainable whilst increasing productivity not just on a short-term but also long-term basis (Butler et al, 2007).  

Regards,

Andrew

References:

Butler et al (2007) ‘Does Telecommuting improve Productivity: Seeking solid evidence of demonstrable productivity gains’ Communications of the ACM, April, Vol.50, No.4 [Online]

Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 30 January 2012)

Westfall, Ralph D. (2004) ‘Does Telecommuting Really Increase Productivity?’ Communications of the ACM, August, Vol.47, No.8 [Online]

Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 30 January 2012)

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Dear Andrew,  

The company I work for also applies the work-from-home approach in its organisation to some of its employees, however not on an everyday basis (meaning they will stay in the office a couple of days a week). While some of them cope with their work responsibilities (largely depending on ICT), for others it is not the most suitable way to work. There was an example of my former colleague who was exceptionally allowed to work from home on a permanent basis due to her family situation and she quit after 1 month, because according to her could not bear stress of “job” and “home” at the same time in the same place.

Do you think there is a risk that applying this approach can lead to family-to-work conflict bringing negative impact on the performance of the employee who works from home?

Thank you.

Vita 

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Dear Vita,

Thank you for your interest in my post and contributing to it with a stimulating question. 

In my personal opinion, I do believe that working from home on a permanent basis may be far more productive for some people provided they have their own office area of the house to provide them with a designated workplace. 

Another condition, for this to work is self-discipline and the ability to work at times of domestic stress and the pressure of a deadline. It isn’t, most certainly, an approach to work that should be adopted on a large scale in my opinion as most people aren’t fit to handle all of the responsibilities, but there are a few that would excel in such a working environment. 

According to Standen et al (1999) Telecommuting has both positive and negative effects which directly affect family relationships and quality of life as well as one’s psychological well-being and performance as the work-family boundary is reduced.  The same paper also states that work-family conflict due to this boundary crossing is expected to happen.

If one is single, strong-minded and reliant or with family, but has things domestically under control, then this might be just what that persons needs in order to balance and manage each responsibility in a time-frame that suits the relevant situation, thus increasing productivity by the overall control of one’s life in all aspects. This control, however, may cause tension between family members if they are overly monitored (Standen et al, 1999). 

In regards to you former colleague, I believe she just wasn’t fit for such an approach on a permanent basis even though she was exceptional. Depending on what issues you former colleague had at home, maybe the reason as to why she was exceptional at the workplace is that it was her escape from whatever issues she was facing at home and hence company served as her retreat. If this was the case, then yes, at the workplace she could breathe freely and therefore perform at the level she did, but once she had to come face-to-face with her issues at home she had nowhere else to retreat anymore and thus the approach backfired in the way it did by rupturing her pressure-threshold.  

Standen et al (1999) also mentions that the home is traditionally perceived as a refuge and that telework could blur out that spatial designation, although in your colleagues case this role might have been reversed due to her issues at home, and that this overlap of roles, between home and workplace, creates new stressors that may likely to produce states such as tension, anxiety, fatigue, and depression.

Do you believe if she was perhaps allowed to come in just twice or three times a week and work the rest of the week from home on a permanent regular basis, that she might have managed better? Or perhaps her full-time telecommuting should have been introduced step-by-step to prevent ‘sudden immersion shock’?

Regards,

Andrew

References:

Standen et al (1999) ‘The Home as a Workplace: Work-Family Interaction and Psychological Well-Being in Telework’ Journal of Occupational Health Psychology 1999, Vol. 4, No. 4,368-381 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed 1 February 2012)

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Dear Moses,

I have to agree on your concluding sentence that in the modern business world the ability to stay ahead in the development and use of new technology can determine how competitive a company remains or even the company’s survival.

Samsung Electronics, for example and as I mentioned in my Initial Response last week, is currently the World’s biggest technology company by sales as of 2009 pushing ahead of HP (Song & Oliver, 2010). It continues to push forward as in the previous year Samsung overtook Apple to become the World’s smartphone leader selling an estimated 11m more phones than Apple in its third quarter (Arthur, 2001), and the world’s top maker of memory chips and smartphones, estimated its profit would jump up 73%(Kim, 2012) and thus to a lifetime high (Reuters, 2012). 

Clearly this wouldn’t have been possible if Samsung Electronics didn’t invest into its R&D department in order to maintain the pole position or strategically invested. In fact, since it was incorporated into the Samsung Group in 1969, as the group’s first venture into the electronics industry, till the early 1990s, it had done little to upgrade its capabilities in product design and development. According to Kim (1997), between 1993 and 1995, Samsung Electronics strategically invested into and acquired eight foreign firms covering a broad spectrum of technology such as telecommunications, computers and semiconductors diversifying further into the information technology sector. Kim (1997) further states that Samsung Electronics re-oriented the nature of its non-production linkages with foreign firms to help foster the development of the design and marketing capabilities it has lacked in the past, frequently through acquisition.

One might say that 1996 was the deciding year for Samsung Electronics’ success it enjoys nowadays as Chairman Lee Kun Hee launched the New Management Movement by declaring that “design would be a source of corporate competitiveness in the new century” and thus hired six professors to teach at the newly established IDS (Innovative Design Lab of Samsung) to teach design courses to Samsung’s designers resulting in winning the Industrial Design Excellence Award in 2003 for its products (Chang 2011). 

Further, according to Chang (2011), Samsung Electronics became the top-ranked firm for design excellence and created a new ‘strategic product system’ in which all business divisions work around-the-clock to develop new and better products.

‘R&D at Samsung

Innovation is crucial to Samsung's business. As new technologies are being constantly introduced to the market, speed is essential for remaining competitive in today's digital era, and new markets have to be pioneered continuously. Through the interplay of creative, imaginative people; a global R&D network; an organization that encourages collaboration and cooperation among business partners all along the supply chain; and a strong commitment to ongoing investment, Samsung has put R&D at the heart of everything we do.’(Samsung Electronics, 2012)

So yes, a business requires the aptitude and ability to invest appropriately into R&D in order to stay ahead, which in my opinion Samsung Electronics is a great example due to its problems prior to 1996 and how it flipped the coin to become the World’s leader in technology.

Regards,

Andrew

References

Song, J. & Oliver, C. (2010) Samsung beats HP to pole position [Online] Seoul: Financial Times. Available from:

http://www.ft.com/cms/s/2/c48d477a-0c3b-11df-8b81-00144feabdc0.html#axzz1k5t451vn (Accessed 21 January 2012)

Arthur, C. (2011) Samsung overtakes Apple to become world smartphone leader [Online] The Guardian. Available from:

http://www.guardian.co.uk/technology/2011/oct/28/samsung-overtakes-apple-smartphone (Accessed 31 January 2012)

Kim, M. (2012) Samsung to report Q4: Eyes on smartphone sales, spending plans [Online] Reuters. Available from: http://www.reuters.com/article/2012/01/26/samsung-idUSL4E8CQ2LK20120126 (Accessed 31 January 2012)

Reuters (2012) Samsung forecasts best profit ever [Online] Available from: http://www.theglobeandmail.com/report-on-business/samsung-forecasts-best-profit-ever/article2293082 (Accessed 31 January 2012)

Chang, S. (2011) Sony Vs Samsung: The Inside Story of the Electronics Giants' Battle For Global Supremacy [Online] Available from: http://books.google.co.kr/books?id=4Y5y0IpuheYC&pg (Accessed 31 January 2012)

Samsung Electronics (2012) R&D at Samsung [Online] Available from:

http://www.samsung.com/us/aboutsamsung/ourbusinesses/researchdevelopment.html (Accessed 31 January 2012)

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Week 4 Hand-In Assignment:

Special Organization Features within Companies

The Case of Southwest Airlines and Semco

Southwest Airlines

Southwest Airlines (SWA) was founded in 1967, by Rolling King and Herb Kelleher (Muduli & Kaura, 2011), and from day one other competitors in the air-travel industry, such as Texas International and Braniff Airlines, tried to boycott SWA to take off, by using any means possible by law, as well as politically, but, to no avail as the company grew to become one of the most successful airlines in history (Child, 2005). 

In 1971 it started its operations serving the intrastate Texas cities, Dallas, Houston and San Antonio, becoming the 7^th largest US airline by 1993 (Muduli & Kaura, 2011) and covering 59 US cities by 2004. Two years after it started operating, it became profitable and has been profitable until 2009 when it experienced its first ever losses (Wheelan, 2011). 

It became an $11.7billion business by 2004 (Child, 2005), with a net income of $499million in 2006, employing over 32,000 Employees (McGee-Cooper et all, 2007) without having any redundancies ever. The latter highlights one of the three main components of SWA’s policy, which are job security, minimum hierarchy and bureaucracy, as well as a consistently applied corporate culture (Child 2005). This approach to internal culture is taken seriously evident through the following two mission statements and the following examples which demonstrate these.

‘We are committed to provide our employees a stable work environment with equal opportunity for learning and personal development…above all, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest customer.’ (Child, 2005)

One unorthodox strategic adoption at SWA is that customers come second, as Kelleher and Colleen Barrett, his legal secretary and partner, believe that employees can only serve customer with exemplary and memorable service if employers were supported in the same way (McGee-Cooper, 2011), therefore providing employees with flexibility at the work place, recognition and appreciation for outstanding performance to stress the importance of positive attitude instead of one’s skills (Muduli & Kaura, 2011).

This approach has resulted in SWA in an overall high customer satisfaction through customer friendliness, achieved by primarily focusing on its employees’ well-being, even though its departures were only 76% punctual of the time and had a higher rate of baggage loss than the national average (Wheelan, 2011).

 ‘To help create the SOUTHWEST SPIRIT and Culture where needed; to enrich it and make it better where it already exists; and to liven it up in places where it might be floundering.’ (McGee-Glover, 2011)

Semler’s Semco

Semco is a manufacturing company that extended its services to the internet (Semler, 2000), based in Sao Paulo, Brazil, and led by Ricardo Semler, who took over his father’s business in 1980, a self-proclaimed maverick as he puts more value on responsibility than pyramidal hierarchy and thus adopted several unorthodox ways since his rise to CEO (Semler, 1994). As soon as he took over, he made most top management positions redundant, by cutting 75% of corporate staff by 1982, and remodeled the structure from 12 layers (Child, 2005) to have just three layers by removing most job titles (Colvin 2001) as the company was almost bankrupt at the time (Child, 2005).

Semler himself states in his 1994 Harvard Business Review paper that he just owns the company’s capital as he doesn’t belief in control and therefore reconstructed the company to govern itself rather than him owning and controlling it. He further states that his unique and unorthodox approach is based on three principles which are employee participation, profit sharing, and open information systems.

‘Executives set their own pay, and everyone in the company knows what everyone else makes. All workers set their own hours. Every employee receives the company's financial statements, and the labor union holds classes on how to read them. Workers choose their managers by vote and evaluate them regularly, with the results posted publicly.’ (Colvin, 2001)

One might say the company’s strategic approach is run like a democracy rather than a business by giving this amount of freedom to its employees and thus doubt its success as traditionally a company is defined by boundaries and control, but this approach including the value of free-time away from the office and time for creative thought in the office has raised Semco’s profits from $35million to $160million during 1998 and 2004 (Shinn, 2004). Even the workplace environment is affected by Semler’s free-thinking vision in action as there are no private offices or any policy on office attire and neither Semler himself, or his employees share the privilege of personal assistants or extra auxiliary hands and therefore are self-responsible.

Analaysis and Conclusion 

Compared to most companies’ approaches these two companies not only stand out in their specific industries but throughout the global markets in their approach to managing a company. Southwest Airlines has its employees at the center whilst focusing on their well-being and thus produces customer satisfaction compared to the more traditional approach which focuses on the needs of the customer, and this is what makes this company so special. 

Semco also focuses on its employees although in a totally different way which reminds one more of a democratic revolution taken place and making other companies look more like military regimes. It feeds of the freedom given to its employees which is enjoyed only by a very few employed workers on the planet and this is what makes this company special.

What both share is a very humanitarian approach focused around their workers.

 

References:

Wheelan, D. (2011) All Grown Up [Online] Available from:

http://www.forbes.com/forbes/2011/0718/features-southwest-airlines-gary-kelly-midway-grown-up.html (Accessed 31 January 2012)

Muduli, A. & Kaura V. (2011) ‘Southwest Airlines Success: A Case Study Analysis’ BVIMR Management Edge, 2011, Vol. 4 Issue 2, p115-118, 4p [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

McGee-Copper, A. et al (2008) ‘The Power of LUV: An Inside Peek at the Innovative Culture Committee of Southwest Airlines’, Reflections, 2008, Vol. 9 Issue 1, p49-54 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

Colvin, G. (2001) The Anti-Control Freak in Ricardo Semler's company workers pick their own hours and the CEO has a temp job. Yes, it works [Online] Available from: http://money.cnn.com/magazines/fortune/fortune_archive/2001/11/26/314107/index.htm (Accessed 31 January 2012)

Semler, R. (1994) ‘Why My Former Employees Still Work For Me’ Harvard Business Review January-February [Online] http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus  (Accessed 31 January 2012) 

Semler, R. (2000) ‘How we went digital without a strategy’ Harvard Business Review September-October [Online] http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

Shinn, S. (2004) ‘The maverick CEO’ BizED January/February [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)