Friday, June 29, 2012

Creating high performance organizational culture

             Organizations are the most important aspect of modern day’s human society but they have not received the desired attention that deserved. Organizational Behavior is the study and application of knowledge about how people, individuals, and groups act in organizations. It does this by taking a system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system. Its purpose is to build better relationships by achieving human objectives, organizational objectives, and social objectives. The behavior of organizations constantly undergoes changes with business trends and evolving global strategies. To succeed in increasingly competitive domestic and global markets, organizations must create and motivate a workforce that is able to realize competitive advantage.

What type of performance is necessary to attain such an advantage is heavily dependent on the market a firm is in and the strategic choices a firm makes. Firms that operate in markets where, for example, price is the dominant performance indicator likely will opt for producing large quantities of a limited set of products or services. Standardization and repetition of work processes will contribute to high levels of efficiency, and, thus add to competitive value.  Manufacturing organizations fall into this category. Facilitating outstanding routine performance requires an appropriate management of human resources by creating structures, rules and procedures so that work across individual employees and groups can be coordinated and controlled in effective and efficient ways according to Human Resource Management.

            If innovation and being innovative are prime performance indicators an organization may prefer a strategy to offer customer made products that fulfill the unique needs of individual clients. This will lead to work processes that are primarily non-routine in nature and demand creative workers. Such a firm needs a HRM (Human Resource Management) policy that stimulates employees to engage in creative and innovative courses of actions that may substantially deviate from fixed patterns of work behavior.  The HRM policies should focus on interpersonal relations, interdependencies and processes such as trust, learning, communication, and information exchange between employees. IT Services and Consulting organizations fall into the innovative category.

            The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcome is performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.

            Four major models or frameworks that typical organizations operate are:

Autocratic - The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

Custodial - The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.

Supportive - The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.

Collegial - The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and self-discipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

            Although there are four separate models, almost no organization operates exclusively in one. There will usually be a predominate one, with one or more areas over-lapping in the other models. The first model, autocratic, had its roots in the industrial revolution. The managers of this type of organization operate out of McGregor's Theory X. The next three models begin to build on McGregor's Theory Y. They have each evolved over a period of time and there is no one "best" model. The collegial model should not be thought as the last or best model, but the beginning of a new model or paradigm.

            Finally, creating a high performing and innovative organization also requires cooperation among employees who differ in their knowledge, skills, and abilities. Cooperation implies knowledge sharing, finding solutions together, learning from one another and realizing synergy in creative and innovative processes.

I wish you good luck and see you next week! 

Saju Skaria

Saturday, June 23, 2012

Critical Thinking Approach to Ethical Leadership Decision Making

Success in the modern business firm requires the development of critical thinking skills: the ability to understand what someone is saying and then to apply evaluative criteria to assess the quality of the reasoning offered to support the conclusion. There are many forms of critical thinking, but they all share one characteristic: They focus on the quality of someone’s reasoning. Critical thinking is active; it challenges each of us to form judgments about the quality of the link between someone’s reasons and conclusions. This article review ethical theories and applies these theories with critical thinking approach for ethical leadership decision making.
Business Ethics and Leadership
How does one link between Critical thinking, business ethics, and leadership? American Heritage Dictionary defines ethics as the moral quality of a course of action; any set of moral principles or values; the study of the general nature of morals and of the specific moral choices to be made by the individual in his [or her] relationship with others. Business ethics is a subset of the study of ethics and is defined as the study of what makes up good and bad business conduct. This conduct occurs when the firm acts as an organization, as well as when individual managers make decisions inside the organization.
            Examining what comprises the organizational culture should reveal some key attributes that encourage ethical behavior. Scholars who studied organizational reputation maintained that a positive reputation, such as one for ethical behavior, had a beneficial effect in the marketplace. The sum total of individual employees’ ethical values influences corporate conduct, especially in a corporation’s early years. The activities during these years, in turn, form the basis of what constitutes a corporate culture, or an environment for doing business. In a free-market society, values of productivity, efficiency, and profits become part of the culture of all companies.
Theories of ethical thought
Consequential theories:
Ethicists, businesspeople, and workers who adhere to a consequential theory of ethics judge acts as ethically good or bad based on whether the acts have achieved their desired results. The actions of a business or any other societal unit are looked at as right or wrong only in terms of whether the results can be rationalized. This theory is best exemplified by the utilitarian school of thought, which is divided into two sub-schools: act utilitarianism and rule utilitarianism. In general, adherents of this school judge all conduct of individuals or businesses on whether it brings net happiness or pleasure to a society. They judge an act ethically correct after adding up the risks (unhappiness) and the benefits (happiness) to society and obtaining a net outcome.
Deontological theories
Deontology is derived from a Greek word meaning “duty.” For advocates of
deontology, rules and principles determine whether actions are ethically good or bad. The consequences of individual actions are not considered. The Golden Rule, “Do unto others as you would have them do unto you,” is the hallmark of the theory. Absolute deontology claims that actions can be judged ethically good or bad on the basis of absolute moral principles arrived at by human reason regardless of the consequences of an action; that is, regardless of whether there is net happiness. Immanuel Kant provided an example of an absolute moral principle in his widely studied “categorical imperative.” He stated that a person ought to engage only in acts that he or she could see becoming a universal standard.
Humanist theories:
A third school of thought, the humanist school, evaluates actions as ethically good or bad depending on what they contribute to improving inherent human capacities such as intelligence, wisdom, and self-restraint.
Profit-oriented theory
The profit-oriented theory of social responsibility begins with a market-oriented
concept of the firm that most readers were exposed to in their first or second course in economics. Holders of this theory argue that business entities are distinct organizations in our society and that their sole purpose is to increase profits for shareholders. Businesses are to be judged solely on criteria of economic efficiency and how well they contribute to growth in productivity and technology. Corporate social responsibility is shown by managers who maximize profits for their shareholders, who, in turn, are able to reinvest such profits, providing for increased productivity, new employment opportunities, and increased consumption of goods..
Managerial theory
Advocates of the managerial theory of social responsibility argue that businesses, particularly large institutions, have a number of interest groups or constituents both internally and externally that they must deal with regularly, not just stockholders and a board of directors. A business has employees, customers, suppliers, consumers, activist groups, government regulators, and others that influence decision making and the ability of the entity to make profits.
It is whether or not we foster the development of wisdom--through Business Ethics--that will ultimately dictate the direction in which our part of the universe moves. In fact, the idea that human beings are acting as co-creators for the present and future is something that has become a tangible reality. When examining business ethics, one must recognize that the corporations, partnerships, and other entities that make up the business community are a composite of individuals. Corporations, and the culture of a corporation, are greatly influenced by what ethical values individuals bring to them. For an organization as a whole to be ethical, it must have an organizational culture that values ethical decision-making.  The best way to achieve the ethical value in organization is to foster critical thinking in organizations.

I wish you good luck and see you next week!

Saju Skaria

Saturday, June 16, 2012

Organizational Behavior: The Paradigm Shift

“In a few hundred years, when the history of our time will be written from a long-term perspective, it is likely that the most important event historians will see is not technology, not the Internet, not e-commerce. It is an unprecedented change in the human condition. For the first time - literally - substantial and rapidly growing numbers of people have choices. For the first time, they will have to manage themselves. And society is totally unprepared for it.” --Peter F. Drucker

A prelude to organizational behavior study
Traditional management education focuses on competency such as accounting, finance, marketing, operations and information technology related areas. However, with the growth and expansion of organizational needs, it has become essential to understand the process of management to be successful in the competitive global market place. Within this process view of management now the attention is given to the roles, behaviors, and skills that are necessary for effective managerial performance. Some of these behavioral ‘soft’ skills are communicating with peers, subordinates, and bosses; obtaining and sharing information; running meetings; allocating resources to different groups; and handling conflict within or between teams,
The understanding of management processes, often referred to as organizational behavior (OB) extends managerial education to the study of people, groups, and their interactions in organizations. Changing business environment demands broader skill sets that helps in problem solving, decision-making, and handling communication and interpersonal relationships.
Historical background of organizational development
Essence of leadership was first recorded by the Greek philosopher Plato. Aristotle introduced persuasive communication in leadership. Niccolò Machiavelli in 16th century laid the foundation for organizational power and politics. Adam Smith in 1776 brought in organizational structure based-on division of labor. In late 18th century, German sociologist Max Weber introduced the idea of rational organizations. Weber also initiated discussion of charismatic leadership. Soon after, systematic goal setting, and reward was introduced by Frederick Winslow Taylor.  Elton Mayo and his colleagues in 1920’s have done productivity studies in Hawthorne laboratory.
Schools of historical thought on organizational theory
Studies show systematic transformation of the orientation from machine into human potential. In general, while examining the history of organizational behavior, a marked shift from scientific management era to more human behavior approach in organizations is evident. The basic assumptions underlying human behavior were now perceived to be oriented to personal growth, accomplishment, and inner development.  If managers were to become truly effective, it was argued, they must go beyond simply providing fair pay and treatment and attempt to make organizational members feel important.
Understanding an organization
An organization is a tool used by people to coordinate actions to obtain something desire or value—that is, to achieve their goals. The production of goods and services most often takes place in an organizational setting because people working together to produce goods and services usually can create more value than people working separately. Organizations exist because of their ability to create value and acceptable outcomes for various groups of stakeholders, people who have an interest, claim, or stake in the organization, in what it does, and in how well it performs.  Most people have a casual attitude toward organizations because organizations are intangible. Today, many organizations being founded, and particularly those experiencing the fastest growth, are producing goods and services related in some way to new information technology. The increasing use of computers and new information technologies such as the Internet are revolutionizing the way all organizations operate.
Organizational theory is the study of how organizations function and how they affect and are affected by the environment in which they operate.  For any organization, an appropriate structure to facilitates effective responses to problems of coordination and motivation—problems that can arise for any number of environmental, technological, or human reasons that need to be addressed. As organizations grow and differentiate, the structure likewise evolves. Organizational structure and culture are the means the organization uses to achieve its goals; organizational design is about how and why various means are chosen. Further, organizational structure can be managed through the process of organizational design and change.
Global Dimensions of Organizational Behavior
In the globalization age corporate success is increasingly linked to worldwide operations and a global staff. Top executive teams have learned first-hand one of the foremost lessons of doing business in international markets to understand the local culture. All around the globe, people working in large and small businesses alike are facing the many challenges and opportunities associated with business competition in an increasingly complex and “borderless” world.  The ability to respect differences and value diversity is an important key to success in managing organizational behavior across cultures.
Summary and conclusions
Today’s organizations need managers with global awareness and cultural sensitivity. This does not mean that they all must work in foreign lands. But it does mean that they must be aware of how international events may affect the well-being of organizations. They must know how to deal with people from other countries and cultures. Especially for those who cross cultural and national boundaries, understanding these differences is critical for success working in an interconnected world.
Today, managers must be inquisitive and willing to learn quickly from management practices around the globe. Insights into effective management and high performance organizations are not restricted to any one location or culture. Contributions to our understanding about people and organizations can be found from Africa to Asia and from Europe to North and South America. Finally, in the interest of effective and efficient organizational performance, managers should create jobs and organizational structures that allowed people an opportunity to develop their abilities and to experience personal growth.
 I wish you good luck and see you next week!

Saju Skaria

Friday, June 8, 2012

The power of habit!

"We are what we repeatedly do. Excellence, therefore, is not an act but a habit." - Aristotle

Here is an interesting story about a woman named Lisa Allen, reported by Charles Duhigg, in his recent book, The Power of Habit. Lisa started smoking and drinking from the age of sixteen and by that time she reached thirty, she was obese, troubled with deeper debt, and with unstable jobs.  Here is another status of the same women, in the next phase of her life; lean and vibrant with toned legs of a runner. She firmly established in her job, she is debt free and not touched a drink or smoked for over four years. She lost sixty pounds and ran a marathon since then. She was an interesting study for neurologist, psychologists, geneticists, and sociologists. The researchers’ goal was to identify how habits work at the neurological level – and what it took them to change.

How changes do happen in behaviors? What is causing the transformation? Research findings are very interesting. By focusing on one pattern – what is known as “key stone habit” – one can reprogram other routines as well. In the above mentioned study, Lisa changed her smoking habit which created a chain reaction that lead to change in other habits as well. In a larger context, business organizations get transformed by changing habits, starting with a single key activity change.

William James (1842 –1910) a pioneering American psychologist and philosopher wrote in 1892, “All our life, so far as it has definite form, is but a mass of habits”. Most decisions we make day to day are may feel like well thought over actions, but they are not. They are habits. One of the studies by Duke University in 2006 found that 40 percent of decisions people performed were not actual decisions, but habits.  High performing athletes and other high achievers build their skills but routine practice which eventually become part of their DNA, or their daily habit.

To a greater extent, our habits define our destiny. Although each habit may look little on its own, over time, the way we deal with our day to day activities including what we eat, whom we talk to, how we deal with children, how we deal with money, how often we exercise have enormous impact on our health, wealth, and happiness. Have you ever noticed your own driving habits? There are no special thoughts on your actions at every stage of your driving. If you closely observe you follow a particular patterns based on the habits you developed.

Habits never really disappear. They are encoded into the structure of our brain and that is a huge advantage for us, because it could be awful, if we need to relearn to drive after every vacation. The problem is that your brain cannot tell which is a good habit or a bad habit. So, if you have a bad habit, it is lurking there, waiting for the right cue or rewards. Habits are powerful, but delicate. They can be deliberately designed or can emerge outside our consciousness. They often occur without our permission. They shape our lives far more than we realize. They are so strong that they cause our brains to cling to them, exclusion of all else, including common sense.

The central argument of this article can be very exciting to all. Habits can be changed, if we understand how they work.  We need to make conscious choice of what we want to accomplish. To drink or to run is a choice one has to make deliberately.  Repeat the process till it becomes a habit. Then stop making the choice and the neuron in our brain will ensure we follow the pattern and the behavior will become automatic.

Let me also share some very basic tips that work for you.  Many behavioral scientists have reported that if you repeat an activity at least 21 days without break it may help in habit formation.  So, chose one good activity and practice it to become a “keystone habit” and then sustain it. Always remember that you have a higher purpose in life and choosing the right habits will take you to the destination you wanted to go!

I wish you good luck and see you next week!

Saju Skaria