The Configuration Approach: Organizational Strategies

In his doctoral thesis at Carnegie Mellon University, Pradip Khandwalla uncovered that organizations function effectively by putting different characteristics together in complementary ways. His arrival at McGill University’s Faculty of Management in the early 1970’s, stirred interest in the configuration approach. This resulted in Mintzberg’s two books on the subject, one about structure, and the other on power relationships.

In 1971, a major research project began at McGill that tracked strategies of various organizations over thirty to fifty or more years. Distinct stages were identified in the histories of the organizations. These stages sequenced themselves and four main patterns emerged: periodic bumps, oscillating shifts, life cycles, and regular progress (Mintzberg, Ahlstrand, and Lampel 306, 310).

Danny Miller, initially affiliated with McGill University, wrote a doctoral dissertation using published studies of companies to pattern ten archetypes of strategy formation; four failures and six successes. His work integrated different attributes of organizations and covered a combination of large samples and specific firms. Later, Miller and Friesen describe the concept of organizational change as quantum, as in viewing the changing of many elements concurrently, rather than piecemeal, which involves changing one element at a time. Miller indicates that success within organizations is often achieved by exploiting the strategies already in place. When the configuration gets out of sync, a strategic revolution has to take place where many things change at once. The company will try to leap to a new stability as quickly as possible (Mintzberg, Ahlstrand, and Lampel 312-314).

In another published study about configuration in strategy and structure, Chandler identified four stages in a firms’ life cycle after researching the evolution of the large American industrial enterprise.

• Initial acquisition of resources
• Establishment of functional structures
• More growth and diversification
• A second shift in structure

Large firms now usually concentrate on core competencies. Together with Chandler’s stages, this suggests oscillating cycles of control and release (Mintzberg, Ahlstrand, and Lampel 317-318).

Background

The configuration approach is characterized by terms such as holistic, universalistic, integrative, and systemic. This stance asserts that the parts cannot be understood in isolation but order emerges from the interaction of the whole (Meyer, Tsui, and Hinings 1178). It focuses on the mutual influence of four variables: leadership, environment, structure, and strategy. Think of these elements as the causes, and the organizational design as the effect. While each is likely to have a role in all configurations, most often one influence will dominate (Miller 686).

This school of thought suggests that for a period of time, the organization will adopt a structural form, matched within some type of context that causes particular behaviors to give way to a set of strategies (Mintzberg, Ahlstrand, and Lampel 305). Organizations will alternate between equilibrium and disequilibrium. Change, as episodic, occurs in rapid transformations from one stable state to another. Transitions between the four influences may happen during the course of a firm’s life cycle, but organizations will change easier within their major influence and original theme. For example, a bureaucratic firm may strive for more standardization. Destroying an old configuration to build a new one is a disruptive undertaking. Such a move requires significant incentives. The most common changes are due to serious performance declines, or replacement of top management (Miller 698).

The configuration approach shares many elements of chaos theory such as, disorder, instability, and nonlinear relationships. It embraces the concept that certain patterns are within systems of apparently random behavior. It accommodates equifinality because there is more than one way to succeed in each setting but cohesive configurations reduce the number of ways the elements combine. This allows for some commonality between organizations, especially between structure types and strategies (Meyer, Tsui, and Hinings 1178-1179).

Works Cited:

Meyer, Alan, Anne Tsui, and C.R. Hinings. “Configurational Approaches to
Organizational Analysis.” Academy of Management Journal 36.6 (1993): 1175-1195.

Miller, Danny. “The Genesis of Configuration.” Academy of Management Review 12.4 (1987): 686-701.

Mintzberg, Henry, Bruce Ahlstrand, and Joseph Lampel. Strategy Safari. New York: Free Press, 1998.

Social Isolation in the Virtual Community

When Frederick Taylor in the early twentieth century introduced scientific management, humans were seen more as physical components in organizational machines than emotional and spiritual individuals. Today, the corporation is viewed as a social community and becomes an arena not only for work but also for identification, self-realization, and friendship. As the new century progresses, “on-line communities” are taking the place of traditional labor environments and many Americans are transitioning to virtual work. By recent estimates, nearly 18 million U.S. workers spend at least a portion of their work week in virtual mode. Although virtual work has many benefits, there is ample data to support the premise that those who work at home full-time experience social isolation. Social isolation is the absence of work-based social support associated with organizational identification. For many, virtual environments inhibit the social interaction that builds community and identification within the workplace.

Although sociologists differ on what community means, there are two concepts universally agreed upon to constitute its existence. They refer to a commonality of location and a commonality of interest. Considering virtual employees work at least part of the time in separate locations, this definition indicates that building a virtual community brings unique challenges. Without daily interaction, a common workplace, and a sense of identity, virtual personnel can feel disconnected and isolated. These workers repeatedly report concerns about being “out of sight, and out of mind” from their organization.

As virtual employees are isolated from their colleagues, they lose opportunities to benefit from other people’s ideas and experiences. The synergy that teams experience as they interact within community is lost when community is not established in cyberspace. This can easily discourage employees from participating in virtual programs and hinder the progression of any telework program.

Consequently, virtual organizations can also lose social cohesion, which refers to situations in which individuals are “bound to one another by common social and cultural commitments”. This results in a loss of individual loyalty to common norms, values, and interdependence that arise from shared interests and individual identification within the group. An employee’s identification to the organization provides a psychological link referred to as “strength of members.” This indicates the degree to which employees are motivated to fulfill organizational needs and goals, their willingness to display organizational citizenship, and their tendency to remain in the organization.

The costs of social isolation are too great to be ignored. The entire virtual work program is weakened as personnel fear losing their identity and distinction. Some feel their contributions may end up in a company’s database to never be associated with its contributor. Other’s have asked themselves, “If my hard earned experience, knowledge, and wisdom can no longer be traced directly back to myself, what future will I have in a Knowledge Economy?” Ultimately, employees may decide to terminate their participation within a virtual environment.

Similar to the days of the Industrial Revolution, today’s managers must learn how to lead within the context of newly established communities. Isolation and potential loss of identity among colleagues inhibit many people from taking advantage of telecommuting and virtual teams. Social isolation requires managers to rethink their methods of leading within today’s on-line community.

So how do leaders ensure that social relationships and commitments are maintained, and that social isolation does not occur within the virtual environment? One way is to understand the personalities, gifts, and styles of virtual employees and their leaders. Another way is through organizational design of a socio-technical system. To accomplish this:

1. Set boundaries to define the overall limits of permissible action by a follower, but use these boundaries to give team members freedom to work, rather than directives from management.

2. Manage the boundary between the system and the environment.

3. Communicate with followers on a continuous basis by email, conference calls, and instant messaging. Instead of relying on unplanned contact in physical third places, members of communities must seek out companions in personal spaces created through the use of new communications technologies. Many tools are available for this, including Blackberry™ devices, free conference call websites and Skype.

4. Hold face-to-face meetings in order to build higher levels of trust and communication. People who fail to communicate cannot compose a common culture and are not, therefore, a community. If meaning is lost in transition from speaker to addressee, then community is lost. In addition, conducting meetings, at least annually, enables leaders to facilitate teambuilding activities with their constituents.

Using these methods within a socio-technical design context will mitigate or eliminate many problems related to feelings of isolation brought on by virtual environments. As communication and change are inevitable and move at an accelerated pace, leaders within virtual communities must work toward acquiring the competencies needed to maintain a sense of cohesiveness despite location.

The Changing HR Structure: Leadership, Foresight, & Strategy

In an annual survey from the London-based Economist Intelligence Unit entitled, CEO Briefing: Corporate Priorities for 2006 and Beyond, senior executives worldwide indicated they were unhappy about their company’s HR functions. Historically known as a support department with a lot of responsibility and little control over outcomes, HR has taken a direct hit. To survive in organizations driven by globalization, changing demographics, cost containment, advanced technology and legislation, HR must prove its importance by acting as a strategic partner and aligning with company wide objectives, or face outsourcing themselves.

The new HR professional performs transformational work that involves knowledge management, foresight, and strategic redirection and renewal. Knowledge programs evaluate and manage the process of accumulation, creation, and application of intellectual capital. Foresight is used to plan for the future. According to Edward Cornish, those who study the future concentrate on three areas. First, they believe that the world and all its systems and inhabitants are interconnected and dependent on each other. Second, they are focused on time as a critical force and believe that to change the course of events, one has to begin now. Third, ideas of the future are paramount for improving the lot of humankind. Knowledge management and foresight are both used in the strategic processes. Strategy-making involves capturing data from all sources, including insight, internal and external material, and then synthesizing the learning from that data into a direction for the business to pursue. It encompasses projecting knowledge into a future state of existence. These skills allow HR leaders to act as consultants in the advancement of state of the art systems and processes for use within the organization, and to help business unit line executives strategically address and forecast staffing needs.

There is a two-way relationship between human resource planning and companywide strategic planning. Human resource planning helps the organization create a feasible strategy that makes sure people are available with the appropriate skills to pursue the firms’ strategic objectives. It identifies gaps between staffing needs and current or projected demographics, determines the strategy for recruiting, retaining, or retraining critical talent, and monitors those strategies to ensure alignment. According to Raymond Noe, from his book, Employee Training & Development, “human resource planning includes the identification, analysis, forecasting, and planning of changes needed in the human resources area to help the company meet changing business conditions”. Planning allows a company to anticipate the movement of employees due to turnover, transfers, retirements, or promotions. Rapid technological advances can cause serious mismatches between the jobs available and the number of people with the necessary skills to fill those jobs. Strategic HR matches employee skills with other positions in the organization when necessary and provides training to prepare employees for increased responsibility or predicted job opportunities.

Since strategic staffing involves forecasting the supply and demand of appropriate human resources for the organization, planners must understand the external business environment and the trends that occur within it. In an article called, “Workforce Planning: The Strategy Behind Strategic Staffing,” Christina Morfeld suggests using a four-step model to staff strategically.

1. Supply Analysis: Identify the demographics and competencies of your current workforce by examining attrition statistics, including resignations, retirements, internal transfers, promotions, and involuntary terminations. A skill inventory that captures information on each employee’s knowledge, skills, abilities, education, experience, and compensation history can address changing needs.
2. Demand Analysis: Forecast the competencies that will be required by the company’s future workforce to be successful. Review internal and external influences to predict how the nature of the work will change. These include reviewing the business mission, strategies, goals, legislation, economic conditions, technological advances, and market competition. Scenario planning is an effective way to systematically evaluate these variables by answering the question, “What would happen if…?” They may also be developed through the use of back-casting.
3. Gap Analysis: Compare the supply and demand data collected during steps 1 and 2. The results determine skill surpluses, skill deficiencies, and help pinpoint who is at risk.
4. Solution analysis: Develop strategies for closing the gaps identified in step 3. Identify ways to build skills that are in short supply and reduce those that are overly abundant in relation to the organization’s projected needs. Focus on optimizing the current and future workforce.

Strategic human resource planning drives the other human resource management functions by providing a framework for policies and programs such as compensation and training. The process is used to determine how people will be hired and used in the firm as it considers:
· Tasks and responsibilities that are tied to business goals
· Competencies and skills necessary to produce outstanding performance
· Which combinations of resources are most productive
· Tools designed to make the better hiring choices

A strategic staffing plan that is carefully designed and executed transforms hiring practices to align with the organization’s human capital and strategic goals. These methods improve employee utilization and the company’s overall effectiveness and competitive positioning.

In concluding, we must realize that job markets today are about variety, choice, and change. HR professional’s that think like futurists and take a strategic approach to designing organizational structures can lead their company into a new era. This involves the continuous process of futures fluency; gathering data to monitor changes, accessing the implications of change, imagining alternative futures, envisioning ideals, and planning. The success of future American corporations relies on the development of systems and practices that attract, retain, and develop a skilled, educated, and talented workforce.

Decisions: How do you make them?

In my working career, I have noticed that many leaders do not always think their decisions through before implementation. The biggest mistake they make is not consulting with the employees to whom the decision will effect. Such action requires engaging the employees in conversation and the decision-making process. It means asking them questions about work flow, time constraints, problems, integration with other departments, and customer care, to name a few. It especially means listening to what others have to say. By including employees in decision-making, the leader will discover critical information that will enable them to make a more effective decision. They will probably even gain buy-in.

Some workplace decisions may require a certain level of confidentiality. In such circumstances, it may be beneficial for a leader to hire an external coach. Coaching can help leaders make more effective decisions by considering unrecognized variables and working through the consequences of different scenarios. If coaching is not an option, here is a tool to get you started in making better decisions.

When I was a child I used to love to draw nature pictures. Most of my pictures had the sun in them. I would draw a circle and then draw straight lines coming out from the edge of the circle all the way around the perimeter (OK, I still draw the sun like that). I want you to grab a piece of paper and draw about eight suns on it. Make the suns fairly large and spread them out. Now, think of a decision you recently made. What action did you decide to take? At the top of the paper write, “If I take this action, how will it effect………” In the middle of each sun, write one of these words or phrases: me, my employees, my department, other departments, the company, customers, vendors, and environment. If you have eight suns, each with one of the eight words of phrases written in it, you are now ready to record your bright ideas. Starting with the ME sun, record on the spokes or straight lines all the ways your plan of action affects you. Then move to the EMPLOYEE sun. Record on the spokes or lines all the ways your plan of action affects your employees. Repeat the process for each sun. Record both the good and bad. There are always two sides to every story. If you need help discovering both sides, engage others in the process to help you. Once you are done with the exercise, read over it and ask yourself some questions. Is your plan of action still as good as you thought it would be? What needs to change? What other actions might be more feasible or cause less damage? How can you make your decision even more effective?

I hope you have a better understanding about the importance of thinking your decisions through. Our actions usually touch others in some way that we may not be aware of. The question becomes: Is your action harmful or beneficial to others? Is your decision selfish or considerate of the greater good?