mso-fareast-font-family:Arial;color:red'>1.
color:red'>Introduction
color:red'>
This study analyses the impact of
Organisational Change on managerial roles in Petroleum Development of Oman
(PDO). The study explores the PDO
restructuring upon the work role and work experiences, by using Mintzberg’s
analytical frameworks of Managers. This
Study discusses the organisational change that happens in the company and the
types of changes.
The chapter starts with introductory
chapter, which briefly reviews the nature of problems, aims and objectives,
scope of the study, methodology and limitation of study.
Arial'>1.1
Overview: The Nature of the Problem
Organisational Change is currently one of
major domains of organisational research, and the study of organisational
change has become one of the major aspects in being able and helping to measure
the organisation performance; efficiency and effectiveness. The effective
organisation must be able to meet today’s and tomorrow’s challenges,
adaptability and responsiveness are essential to survive and thrive.
Today’s organisations are experiencing change
like never before as a result of global competition which had created
uncertainty for the organisations (Havery and Brown, 2000). Therefore business
world organisations face unprecedented changes as the response to the internal
and external challenges for emerging technology and market forces.
Moreover, the pace of change is so rapid,
only organisations that can adapt to this changing environment can survive,
getting a profile of the current problems can enable organisations to
thoughtfully bring the elements of the change into alignment and move forward
towards an ideal.
In thinking about the process of
organisation change, two questions immediately come to mind. First, why do
organisation change? The answer is “to survive”.
the various organizational factors that can be modified to help the
organisation adapt and grow? (Mullins, 1999).
Due to the decline of the oil production, PDO changes it structure and
strategy in response to environmental forces which will help the company to
secure its competitive advantage through organisational transformation.
There are some problem areas in the
company and the management needed to take action to develop and to adapt a
change process to improve the environment where it operates.
many areas within the company, such as the structure which is suffering from
several problem areas occurring form the internal control process in the organisation.
PDO’s structure was a mechanistic
structure with a central decision-making process and one-way flow of
information. According to Handy (1997)
PDO appears to be a Role Culture where the rules and procedures dominate the
internal environment bases in the exercise of authority by the Senior
Management Team. As a result there are
some negative aspects, the communication and decision-making channel are not
properly used, and have difficulty in adapting this structure in PDO. There are
very strong hierarchy, as the senior
management exerts a tight top-down control. As a result, the staff are not
allowed to act on their own initiatives and they are less willing to work
cooperatively due to the lack of involvement in the decision making process.
Moreover, it might be argued that the reason why some staff leave the company
is because of the heavy workload.
An important aspect to PDO management
vision is the change of the current structure, since it does not provide the
benefits, and does not enable the company to run sufficiently and effectively.
structure, PDO implemented some change in their system. The company focused the
individual attitude toward teamwork, personal values and ability to innovate
especially in the technology and science, decision-making involvement and adapt
suitable information flows across departments.
PDO change the current structure to more
task culture, to enable the flexibility, and to improve communication and
understanding. Also this system will enable the organisation to be flexible
with suitable communication channel between different functions. This new
structure has a decentralization process, which will have a lower level
decision, and the senior management control can be dealt with on the spot.
A number of studies (Smith 1990, Dopson
and Stewart, 1990) suggests that middle managers play a key role in change
implementation. It can be argued that
the effective planning and management of change require careful consideration
of the impact of structure change on middle managerial work roles and work
satisfaction levels – to maintain their resistance, and maximise their
commitment to the containing and accelerating pace of change within Petroleum
Development of Oman (PDO).
Managers not always initiate change are
accept all change proposals, as especially change in authority systems (Hampton
at all, 1982). The blindness of top
managements to the negative impact of their policies, practice and behaviour
tends to be very high (Arguis, 1970) due to the threat of loss of position
power. Drucker (1995) sees managers as the basic and scarcest resource for an
organisation as well as the key factor for a healthy growing economy and
supply, which is critical to the survival and further development of any
organisations. Drucker (1995) further
regards managers in an organisation as the life-giving elements in every
organisation in that without managers, organisations cannot possibly function
properly. Thus, a strong link is noted
between manager’s efficiency and organisation performance. It has been
recognised that mangers are a significant power behind the progress and
successful development of an organisation’s strategy and such success is very
much dependent upon their attitudes, behaviour and commitment to their specific
responsibilities.
Therefore it’s important to understand
the extent to which these formal changes in management systems and role
prescriptions have resulted in change in work behaviour and job satisfaction
experienced by PDO managers. It is thus
essential, when attempting to assess the impact of formally espoused changes
within PDO, to examine the extent to which, and the way in which, managers have
adapted new forms of work behaviour in accordance with the new managerial role
perceptions.
mso-fareast-font-family:Arial'>1.2
and Objectives
The main objective of this study is to
define to which extent the impact of organisational restructuring affects the
managers’ roles in Petroleum Development of Oman (PDO).
the extent to which these formal changes in management systems and role
prescriptions have resulted in change in work behaviour and job satisfaction
experienced by managers. As a number of
studies (Smith 1990, Dopson and Stewart, 1990) suggests that middle managers
play a key role in change implementation, therefore it can be argued that
effective management of change requires careful consideration of structural
change on managerial roles to limit their resistance and maximise their work
commitment.
mso-fareast-font-family:Arial'>1.3
of the study
The study will include a review of
literature on books and journals, and other materials about organisational
change, and management roles and development.
The study will also present the review of
the responses to the sample questionnaire distributed among PDO managers.
of manager’s role (Interpersonal roles, informational roles, and decisional
roles).
mso-fareast-font-family:Arial'>1.4
of the Study
This
paper shall attempt to determine the impact of
organisational change on managerial roles in Petroleum Development of Oman
(PDO). By conducting a random sampling survey, the writer shall try to
correlate the organisational change to the managerial roles.
This paper shall cover the
PDO and its managers as source of data. Analysis shall be limited on the
outcome of the survey that will be conducted. Moreover,
covering the area of business management, particularly the overview of
organisational change, the nature and concept of managerial roles will be
gathered and analysed using the framework of Mintzberg on managerial roles.
mso-fareast-font-family:Arial'>1.5
Outlinestyle='font-size:12.0pt;mso-bidi-font-size:14.0pt;line-height:200%'>
This study
consists of five chapters. The first
chapter introductory chapter presents the overview of the nature of the problem
to be discussed in the study. It also
covers the aim and scope of the study, as well as applied methodology and
provides general ideas about the way that the study is structured.
The second chapter will provide a historical
background of Petroleum Development of Oman (PDO), the aim of the organisation
functions, discussion making system, the company structure and discuss the
change in the company. In the third chapter, the writer provides the literature
review of the theoretical materials related to organisational change,
managerial roles, Arab management system, and the influence of culture on Omani
management is analysed.
In the forth chapter is the analysis of the result
of the findings on the PDO management.
The writer addresses the impact of the organisational structure on the
managerial roles, and Organisational Culture within PDO. The fifth chapter of
the study will present some recommendation and guidelines offered by the writer
in regards to improve the
Arial'>1.6
Summary
This introductory chapter has overviewed
the nature of the problem and its formulation.
It also covers the aim and objectives, scope and methodology of the
study. In the following chapter the researcher provides overviews of the
company resurfaced and change.
Arial;color:red'>2.
Overview of Petroleum
Development
color:red'> (PDO)
color:red'>
Arial'>2.1
History of the
Petroleum Development Oman (PDO) is the
major oil and gas company in
As per the company registration a document, the Government has 60% of the
shareholders which 40% of the company’s shares are retained by private
shareholders (Shell 34%, TotalFinaElf 4% and Partex 2%). PDO commenced its
first oil exports in August 1967. The oil produced comes from some 2326 wells
located in the arid region of
PDO’s top management has taken a decisive
decision to redesign its entire core business structure and to help a line in
business to be competitive and simultaneously meet the shareholders
requirement. The company faced three new
governmental regulations. First to increase the oil production level than, to
engage more Omanis in the workforce of the company.
arid areas where oil exploration and production sites are located. Therefore
the need to create a new organisation as described by
with the old traditional organisation where decision process was seen to be
very low.
Due to the decline of the oil production in 1998, PDO start looking for
a new way of work, and therefore the company introduced a major change
initiatives, “Emergent Change” (Burns, 1996) which will help the company to
reduce it’s expenditures and to organise its work in more efficient way, to
cope with the decline in the oil production.
According to the five-year plan devised by PDO, roughly $1.5 billion a
year would be put in as capital investment to recover the lost oil production
level to 800,000bbpd mark in 2007.
mso-fareast-font-family:Arial'>2.2
Vision
The Petroleum Development of Oman (PDO) long term vision is “to
sustainable deliver 800,000 brls/day for
potential of their people”.
Arial'>2.3
PDO Management Structure
In 1998, PDO have gone through reform process, this study will focus on
the change of PDO structure and how it has been organised into units known as
assets, each of which is headed by a manager who is directly accountable for
its performance and development. Each
asset manager reports to one of seven directors, who sits in a committee
chaired by the Managing Director of PDO.
The Managing Directors Committee thus shares responsibility for PDO’s
overall performance and business direction.
The directors also have a
"functional" responsibility, that is, they are also ultimately
responsible for the development of staff in a particular discipline. In the
execution of this second responsibility, they are assisted by corporate
functional discipline heads, who — like the directors — generally have dual
role that combines functional with line-management responsibilities.
including the Chairman — represent the Government of Oman, and four represent
PDO’s private shareholders (Shell, TotalFinaElf and Partex).
structure to improve the company unit’s productivity and efficiency.
The new organisation is fully based on
asset management principles and provides a structure which is geared towards
growth and value creation. It is focused on technical integrity of product flow
assets, infrastructure and business processes. Moreover, single-point
accountability for the day-to-day management, performance and development of
all assets - from product flow to service provision - has been introduced and a
number of management layers has been removed.
The existing PDO organisation reflects
the main producing assets in its Area Team structure, with an asset management
team representing Petroleum Engineering, Engineering and Operations. The
implementation of the new organisational structure is therefore expected to be
smooth with minor or no disturbances to day-to-day activities.
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v:shapes="_x0000_i1025">
The new organisation delivers growth from
Frontier Exploration and New Projects (currently Athel) under the exploration
director, and from the oil-producing assets. Focus on revenue is ensured by
grouping all oil-producing assets, oil-related Technical Services and
Infrastructure under the oil director. The importance of Gas is reflected in a
direct reporting line between the gas manager and the MDC. Business
Improvement, Technology and Public Affairs will receive more management
attention under the Corporate Centre Directorship.
A major change with respect to the
current organisation is a dedicated Frontier Exploration asset team, whilst
near-field exploration will be the responsibility of the oil (Product Flow)
Area Asset Managers. The mission of Frontier Exploration will be the delivery
of new product-flow assets, complete with notional development plans, a declaration
of commerciality and reserves booking.
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v:shapes="_x0000_i1026">
A further change is the
introduction of single-point accountability for the Area Assets. The area asset
management triumvirate will now report to one Asset Manager instead of the
current bi-functional relationship with the Development and Operations
Managers.
The new organisation is expected to be a
more exciting place to work for PDO staff, as it is based on staff and team
empowerment. Also, it is more commercial in nature and clearly links performance
to reward at every level in the organisation.
The current re-organisation is a logical
next step in the evolution of PDO from a functional organisation towards an
asset-based organisation as indicated in the well known diagram below, taken
from the Corporate Management Framework (CMF):
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v:shapes="_x0000_i1027">
PDO has virtually
become an asset-based organisation "from the waist down", i.e. from
the Area Team level downwards. However at the management level, there remains a
long reporting line. The new organisation
is based on “single-point responsibility”, and it has fewer layers then
pervious structure.
mso-fareast-font-family:Arial'>2.4
Assets Management Group
As shown in (Figure 1) there are five
types of Asset management in the company:
The Product Flow (PF), Service provider, Process Owner, Risk Adviser,
and Skill Manager
The Product Flow Assets
The Product flow (PF) assets comprise
four elements: Frontier Exploration, the Area based Oil Product flow Assets
Teams, Gas and Infra-Structure.
The PF structure is built on the
traditional strengths of exploration – regional geological thinking; innovative
play generation, risk-taking – whilst also promoting fully-integrated life
cycle sub-surface evaluation and greater commercial focus.
entail substantially more risk than in the old organisation.
The two extremes of Oil Product Flow
Assets are represented by:
a “bare-bone”
organisation: the existing triumvirates led by an Asset Mangers
a
"bare-bone" organisation: the existing triumvirates led by an Asset
Manager, with all other activities (Finance, Planning etc.) contracted in from
the service and corporate organisational entities, and
an
organisational structure which represents a series of mini PDO's, i.e. with
their own services (drilling, well services, human resources etc.) integrated
in the Asset, as shown in the Figure 4
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v:shapes="_x0000_i1028">
The Service Assets
The service Assets are consist of eight
different areas, as below
Human Resource
(HR)
Finance
Contracting
Operation and
Engineering Technical Services (OETS)
Drilling
Services
Supply and
Logistics
Computing and
Communication (IT)
The old HD unit and Finance unit are
fully supportive of the new organisational structure with devolved units in the
Product Flow and Service groups and the larger service assets such as Drilling
and Supply and Logistics.
mso-fareast-font-family:Arial'>2.5
Overall Organisation
The new organisation places all
oil-producing assets in the "Oil" directorate, together with the
infrastructure and main oil-field services organisation. This will ensure optimal
deployment of all resources across the various assets and will allow for rapid
reactions to production shortfall or other unexpected events. Moreover, one
uniform face to the outside world regarding oil production is guaranteed.
Growth in the new organisation is
strongly driven by the Exploration Directorate which has the responsibility for
Frontier Exploration, GeoSolutions and the maturation of the Athel. It is
likely that new project teams, like the Athel, will be added to this
organisation in case of significant discoveries outside producing areas. Focus
on Gas as a new business is maintained by having a direct reporting
relationship between the Gas Manager and the DMD.
One new aspect of the organisation is the
formation of a corporate centre, the Corporate Affairs Directorate. PDO will be
one of the first companies explicitly treating Technology as an Asset. It is
felt that the combination of Economics and Planning, Technology Management and
Business Improvement will generate significant synergy. Moreover, the company
will move towards a more proactive approach on Public Affairs and HSE.
The new organisation is fully based on
asset management principles and provides a structure which is geared towards
growth and value creation, focused on technical integrity of product flow
assets, infrastructure and business processes. Single-point accountability for
all assets, from product flow to service provision, has been introduced and a
number of management layers has been removed.
mso-fareast-font-family:Arial'>2.6
color:black;font-weight:normal'>
Reporting Relationships
An effective functional organisation will
be essential to the integrity of the business conducted by the Asset Teams and
to the competence development of their staff. The functional organisation will
be a virtual one, but with very concrete roles and responsibilities. It will
require a reinforcement of the current roles of the Corporate Functional
Discipline Heads (CFDH's).
The top of the functional organisation is
the Functional Director, and the Leadership Team will comprise a representative
cross-section of EP functions. In view of its size, it is likely that one
member of the Leadership Team will assume two Functional Director roles.
Each business-critical discipline will be
represented by a CFDH, who is a senior technical professional in the line (i.e.
in the Product Flow or Service Asset teams). Thus functional responsibilities
will be discharged by individuals with a dual role, and the CFDH's will derive
their authority and credibility from their position in the line.
Normally, a CFDH will not be a Product
Flow Asset Manager, although this may be so initially in the transition between
the old and new organisations. In some Service Assets where line and function
coincide (e.g. Drilling, IT), the role of Asset Manager and CFDH may be combined.
The CFDH's will fulfill four distinct
roles, which are elaborated in the Mandate and Service level agreement
(Appendices 7 & 8):
providing risk
advice to management in his discipline;
staff resourcing
and development;
documenting
& updating technical standards and ensuring the integrity of business
processes;
planning for,
introduction and promotion of, discipline-specific technology
mso-fareast-font-family:Arial'>2.7
color:black;font-weight:normal'>
of the Leadership
The Directors form a Leadership Team with
shared responsibility for PDO's total performance and business direction. The
accountabilities and responsibilities of the Leadership Team can be summarised
as:
Being
accountable for PDO total performance
Setting
strategic direction for the various components of PDO's business
Promoting
integration across Assets
Seeking new
business opportunities
Reviewing the
effectiveness of the organisational architecture
In view of the size of the PDO
organisation (10 Product Flow Assets, 7 Services Assets, Corporate Centre,
Finance, HR and CFDH's), it was felt that a flat structure with Asset Managers
reporting directly to MD would not be workable. Therefore each Director also
acts as a delegate of MD for his/her assigned portfolio of Product Flow or
Service Assets.
Figure
20
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v:shapes="_x0000_i1029">
Asset Managers will remain bottom-line
accountable for the performance of their Assets. Conversely, Directors
performance will be judged on PDO's performance and not on the performance of
their delegated portfolio. The role of the Directors is therefore one of
enabling rather than controlling, of integrating rather than isolating.
Each Director will also have a Functional
responsibility, allocated according to his / her experience in such a way that
all business-critical disciplines are covered by the Leadership Team. The roles
of the functional organisation are described in section 4.4.
In both his / her portfolio and
functional responsibilities, the role of the Director is to:
Set & review
functional & portfolio strategy
Set & review
challenging performance targets for Asset Managers (as MD delegate) and CFDH’s
Provide
technical leadership, challenge and act as consultant to Asset Managers &
CFDH’s
Promote
technical excellence, lateral learning & professional values
Define policies
and endorse proposed codes of practice & standards
Chair the
relevant Asset Managers' forum(s)
Facilitate
performance optimisation with Asset Managers
Resolve issues
of resource allocations between Asset Managers
Stimulate
motivation, resource sharing, joint ownership of PDO goals
Maintain an
external focus, with Government, suppliers & contractors, the community and
general public
The Directors will be supported in these
responsibilities by Corporate Planning & Economics, who will compile the
Corporate business plan and measure its performance, CFDH’s and their Discipline
Experts, the HR organisation, the Technology Asset Manager and the Business
Improvement Manager.
mso-fareast-font-family:Arial'>2.8
Manager Mandates
An essential element of asset management
is that the asset managers are directly and single-point accountable to the
managing director for the performance of their asset. This accountability is
wholly exercised through the mandate, which makes all requirements and controls
on the asset manager both transparent and consistent. It stipulates the main
items expected of each asset manager and the degree of freedom that he has in
the execution of his business. This section describes the basic of elements of
the mandates as adopted for PDO from SIEP report 97-5502 issued on June 1997.
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A mandate consists of six elements. Some
of these six elements already exist in PDO as independent documents that apply
to every asset and every asset manager. Direction and strategies are currently
addressed in the Corporate Management Framework (CMF). Policies and authorities
are covered in the Corporate Policy Manual and the Manual of Authorities. On
the other hand, targets and budgets are asset-specific and will be specifically
described in the mandates. Service providers will maintain zero budgets by
tariffing costs to users of the services. The structure of the mandates is
fixed and consists of four sections. However the targets and budgets in the
mandate will be reviewed annually.
mso-fareast-font-family:Arial'>2.9
Organisation – A sharing
The new organisation places substantial
emphasis on the performance of its major assets, for which the Asset managers
have single-point accountability. The focus on Assets must be balanced by
co-operation and flexibility amongst the Asset teams, in order to promote
sharing, learning and consistency.
The Asset Managers Forum will be an
important vehicle for promoting the sharing of knowledge and resources, and a
role model for encouraging this amongst staff. However, it is recognised that
the transformation process will require a proactive approach involving all
staff.
Arial'>2.10
Organisational Culture in PDO
Culture is an important factor in the art
of management, because for any organisation to operate effectively it must for
some extent have a general set of believes and assumptions. Because
understanding the term of the culture metaphor helps organisations to be aware
of how employees are thinking about the organisation phenomena, and to
recognize how different attitudes, value and beliefs affect the workplace.
Understanding and assessing the national
culture and organization's culture can mean the difference between success and
failure in today's fast changing business environment. Cultural assessment can
provide measurable data about the real organizational values and norms that can
be used to get management's attention. Though, it can be said that the basic
assumption, values and norms drive practices and behaviours. Hence when a
“culture” is created it becomes a driving force for the shape and scope of the
organisation.
The framework for national culture has
been developed by researcher such as Hofstede (1980). While the respective
merits and drawback of different framework are widely discussed, the Hofstede
basic module of culture can be seen as a helpful framework to illustrate the
major issues that need to be considered in change process.
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form the nation of human society which makes defining it a complicated
task. As a result, there are many
definitions for culture. Czinkota et al (Cited in McEwan, 2001) define culture
as “an integrated system of learned behaviour patterns, characteristic of the
members of any given society”. In addition Hofstede (1991) identifies culture
as “collective programming of the mind”.
Therefore, the culture environment is one
of the important principles that influence the organisation as shown in the
diagram. Hostfede (1991) identifies that
there are four dimensions that differentiate cultures at a national level
(these are power distance, Individualism-Collectivism, Masculinity-femininity,
Uncertainty avoidance), which help to understand that people arrive to
organizations with their own national culture.
Therefore, it is only necessary to
understand the relation between business environment and its culture. For that
reason Hall (1976) identifies two classifications of culture that have an
impact on business activity, the “High Context Culture” and the “low context
culture”. The high context culture have
a very high prevailing homogenous view on nationality, religious values and
beliefs (Hall, 1976) (such culture can be found in Japan and Arab countries);
the context of communication is more valued such as body language and
gestures. However in the low context
culture, communication context is more of formal written records, such culture
can be found in the
National Culture
Dimensions
Building on Hall research, Hofstede
(1980) investigates the influence of national culture on organisational
behaviour, and he identifies four dimensions of culture, named as (power
distance, Individualism/collectivism, Masculine/Feminine, Uncertainty
Avoidance).
The first dimension is power distance. As defined
by Hofstede (1991), power distance “is the extent to which the less powerful
members of institution and organizations within a country expect and accept
that the power is distributed unequally” (Hofstede, 1991, p28).
power distance indicates to what extent the society accepts the centralized
power from the superior, it distinguishes the relation between subordinate and
superior. The research shows that countries such Japan,
countries src="file:///C:\DOCUME~1\COMP02~1.COM\LOCALS~1\Temp\msohtml1\01\clip_image011.gif"
align=left hspace=12 v:shapes="_x0000_s1071">are having a high power
distance. Whereas countries such as
and
are having a lower power distance. The chart above indicates that Arab
countries are having high power distance compared to
The second dimension of culture is
Individualism/collectivism. This dimension refers to the role of the individual
and group whose interest prevails over the others. The collectivism culture is
usually observed in high context communication countries similar as the one
proposed by Hall (1976), where employee and employer relationship is defined in
moral terms. Whereas the individualism countries have low context
communication, and the relationship between the employer and employee is passed
on mutual advantage.
According to Hofstede (1991),
collectivism is likely to appear in high power distance countries, and the
collective dimension is refer to the “we” group in the source of identity,
loyalty and dependent relation (Hofstede, 1991).
integrate into strong cohesive groups who protect themselves and demand loyalty
throughout lifetime. The collectivism
culture can be found in
Arab countries etc, where there are large families, close relationship, and
where conflict is minimized. Therefore people who deviate from this norm are
considered as a bad or weak character.
src="file:///C:\DOCUME~1\COMP02~1.COM\LOCALS~1\Temp\msohtml1\01\clip_image013.gif"
align=right hspace=12 v:shapes="_x0000_s1072">Therefore, individualism dimension distinguishes countries in which
employees are determined by their individual action. Thus individualist can be
found in a small power distance. Hofstede (1991) research shows that
third; accordingly he defines individualism as “pertains to societies in which
the ties between individuals are loose”.
Moreover, in the individualist culture the interest of the individual is
over those of the group. As they are characterized by individual and personal
characteristics rather than group, the ties between individuals are very loose,
and everyone is expected to look after him/herself.
more regarded to assertiveness, trust and high conflict, and the self
actualisation is the goal, as shown in the chat that Arab countries scored an
average of (38) compared with
scored of (91). (Hofstede, 1991).
The third culture dimension is
masculinity/femininity. Hofstede (1991) refers the masculine dimension to “male
achievement” as it emphasizes assertiveness characteristics which associated
with high earning, recognition for a good job, advancement and challenge to
have personal accomplishment.
As illustrated by the Hofstede research,
societies where gender roles are clearly distinct, material success, progress
and money are the most dominate values. The top two ranking masculine countries
are
Consequently, in these countries, men are supposed to be assertive, ambitious,
and tough where women tend to take care of relationship.
However, Hofstede refers the feminine
society as having a modest characteristic where there is a good working
relationship and cooperation. Similarly, in this dimension, there is a
desirable living area for family and employment security, and the roles are
merged between both men and women.
Hofstede ranked
and
as the most feminine society. In these countries, the dominating value is
caring for others and the relationships
seem to be more important. As a result there is less conflict in the society
and everyone seems to be modest.
The final culture domination identified
by Hofstede is uncertainty avoidance, which he defines as “the extent to which
the members of a culture feel threatened by uncertain or unknown situation”
(Hofstede, 1991). There are two types of
uncertainty avoidance culture: either strong or a weak. The strong uncertainty
avoidance creates high anxiety. Hofstede (1991) suggests that an “uncertainty
avoidance” society tends to believe that there is one truth, and show its
emotions to others by expressing itself. This kind of society is aggressive.
Such culture can be found in
and Asian cultures like those of
and
As a result, countries with high power distance and collectivistic tend to be
high on uncertainty avoidance.
On the other hand, the week uncertainty
avoidance culture is not inclined to express their emotions and aggression. So
this society has a low anxiety level and according to Hofstede (1991), a
significant number of people in this type of culture suffers from heart
diseases due to their repressed feelings. In addition, they consume high
amounts of caffeine (i.e. tea and coffee) to reduce stress, as is highly
evident in
However, Rodriguez at al (2000) argue
that Hofstede research in uncertainty avoidance is not prefect. He goes on to
illustrate that “Singapore measures as a weak in uncertainty society, however
the country functions under a governance system which provides high
regimentation and stability for its citizens, this system tends to be more common
in high uncertainty avoidance cultures”. (Rodriguez, at al, 2000, p 28)
Arial;color:red'>3.
Aspects of Literatures
color:red'>
mso-fareast-font-family:Arial;color:blue'>3.1
Organisational Change
The
globalization of the economy has radically changed how corporations do business
and has forced individuals to redefine their work force. Private industry is
cutting down costs through such massive restructuring, using measures as
down-sizing, re-organisation and out-sourcing.
mso-fareast-font-family:Arial'>3.1.1
concept of Organisational Change
There
is no right way of effective change. According to Burnes (1996), there is “No
Best way to manage change”. An organisational change comes in
difficult to establish an accurate picture of a successful change management
(Burnes, 1996). However, According to
Ellis and Williams (1995) there are three main components for organisational
change that collectively lead to improve business performance:
Creating a shared
mindset;
Building
competencies/capabilities;
Changing corporate
culture
change must be managed to enable the competitive position of the business to be
refocused. At this instance, change becomes a fundamental need not an option
(Ellis and Williams, 1995).
Nevertheless, organisational change requires a clear vision of the
firm’s new strategy and the shared values needed to make it work by managing it
from the top down. Leadership by example is combined with organisational
adaptations and changes e.g. systems, structure etc.
mso-fareast-font-family:Arial'>3.1.2
of Organisational Change
style='font-family:Arial;color:windowtext'>Organisational change can and has
been classified in various ways, the approaches to change can be distinguished
by their concentration on individual, group and organisation wide issues
(Burnes, 1996). This leads to two main approaches of change management: planned
change and emergent change (Burnes, 1996).
(1999) argues that the market becomes increasingly globalise, therefore change
becomes more pervasive, and businesses are now entering into a new phase in
which sustainable business performance is perceived.
and economic activity around the globe is extremely powerful and increasing,
and business need to adapt for those changes to survive.
regarding the most appropriate approach to change, according to Burnes (1996)
neither planned approach or emergent approach is suitable for all change
situations. Thus there are several
methods that can help analyse organisational change.
style='font-family:Arial;color:windowtext'>Doberty and Horne (2002) suggest
four types of changes that help to shape the way public and private
originations operates. As shown in the table (2), they argue that most changes
have been driven by technological factors which has a strong influence on other
environmental factors i.e. economic, political and social factors.
Table: 2 : Types of Change
solid windowtext .5pt;mso-yfti-tbllook:480;mso-padding-alt:0in 5.4pt 0in 5.4pt;
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color:windowtext'>Speed
color:windowtext'>LITTLE
color:windowtext'>BIG
color:windowtext'>SLOW
color:windowtext'>Emergent
color:windowtext'>Transitional
color:windowtext'>FAST
color:windowtext'>Incremental
color:windowtext'>Transformations
Horne, 2002, page 32)
organisational change represents discontinuity as described by Gundy’s third
type of change “discontinuous change” (cited on senior, 2002). It is a
long-term, complex and uncertain notion inasmuch as an organisation’s culture
is the amalgamation of its people’s attitudes, beliefs and behaviours.
managing organisational change consists of five major areas that need to be
heeded whenever any change is considered in an organisation (Ellis and William,
1998);
Organisational
Culture
arises from an organisation’s corporate culture’s misfits with the external
environment of which can cause difficulties or even prevent a change of
external focus to take place. Change by
drastic action, a revolutionary change or what described by Senior (2002) as
“frame-breaking change” is discontinuous and often forced on the organisation
or mandated by top management. A phenomenon that occurs suddenly but more often
than not requires time, commitment and the patience to endure (Meyerson, 2001),
is a necessary condition for a fundamental attempt for strategic change (Ellis
and Williams, 1995).
Duphy
and Stace (cited in Senior, 2002) categorised change in 4 types:
Fine Tuning:
ongoing process
Incremental
Adjustment: distinct modifications but
not radical change
Modular
Transformation: Radical change focus on subparts of the organisation
Corporate
Transformation: revolutionary change thought-out the whole organisation.
However
as different literatures reviewed different types of organisational change, the
below table (3) shows those different types of changes that might related to
certain environmental conditions (senior, 2002)
Table
3:- Environmental conditions and types of change:
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forces for change
Change
and McDonnell (1990)
et al. (1998)
and Stace (1993)
(1993)
certainty
(fine-tuning)
tuning
incremental
by extrapolation
certainty
(Incremental)
adjustment
threats and opportunities
transformation
Incremental
predictable opportunities
transformation
certainty
Change”, 2nd e-d, page250
Another classification
suggests two distinct fundamental process of change: planned change and
emergent change (Burnes, 1996) (Senior, 2002).
process suggested by Organisation Development (OD) (Burnes, 1996; Cummings and
Worley, 2001). There are three major theories of planned change a) Lewin’s
change model b) action resource model and C) contemporary action research.
style='font-size:12.0pt;line-height:200%;font-family:Arial'>According to
Cummings and Worley (2001) a general framework of planned change can be seen in
fig 1, which shows the components of diagnosis, Planning and implementing
change (action) and Evaluating and Institutionalising change (program
management).
of Planned Change
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planned approach initiates form inside the organisation to deal with
environmental demands and the change process is sequential (Burnes, 1996).
Whereas emergent change stems from continuous improvement and learning
organisation theory. This approach initiates opportunity in ongoing activity
within the organisation and it is seen as driven by “bottom-up” process
(Burnes, 1996).
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striking similarities (Burnes, 1996). The distinction between them is not
cut-off (Senior, 2002) and both approaches share common difficulties. The
planned change assumes organisation that operates in stable environment
(Burnes, 1996). It heavily focuses on management view or the
hand, the emergent approach assumes organisation that operates in turbulent
environment. This approach has a little control over its environment,(Fig. 2).
The PDO corporate-transformation scale can be seen as a planned change because
the company set is “top-down” and the oil environment is fairly stable
environment. According to Deal and Kennedy (cited in Mullins, 1996) the oil
companies such as PDO can be described as a “Bet-your-company culture” which is
described by high risk and slow feedback culture. As the company invests
millions in large-scale project, it takes a long-time for action and decision.
As a result the decision making tend to be top-down similar as described by
Handy (1979) role culture. However, one cannot distinguish the difference
between planned and emergent changes. In many respects both approaches can be
equally valid and applied to different organisation circumstances.
management.
Arial'>3.1.3
Strategies of Organisational Change
There are two basic
strategies to facilitate change in organisations: the “transition” and
“transformation” strategies (Levy & Merry, 1986). The first is widely known
and is more utilized because it is goal-oriented. In this strategy, the change
efforts are focused on managing the transition from a present state into a new
state that is already known. The second, on the other hand, which is less known
and less developed, focuses on transformation processes. The transformation strategy
is a process-oriented strategy in which the main efforts for change are focused
on consciousness raising and processes like understanding present.
Ackerman (1983) states that
“In situations where clients have a clear future state in mind, like reorganization…the
transition management process is used to achieve or implement that desired
state. Its focus is over a set period of time, at the end of which the ‘future’
becomes the ‘present’ way of operating”.
The
transition strategy takes into account human as well as formal structural needs
of the system as the implementation proceeds. The change process has a greater
emphasis on the entire system (levy & Merry, 1986). The transition strategy
is future-oriented for it only focuses on practical issues related to
implementing the desired state. This strategy is analytical, rational, and
pragmatic in nature. Its primary goal is to know the impact of the future state
on the present state, and deducing what action steps need to be taken.
"spirituality," and "energy" are key elements in describing
organisational transformation (Levy & Merry, 1986). Hawley (1983) describes
organisational transformation as follows a basic change in the organisation
energy.” Kiefer and Stroh (1984) also claim that the main emphasis of the
transformation strategy is on the organisation's purpose and vision, and the
alignment of members with these elements. A vision created out of the
organisation’s and individuals' needs tends to "pull" the organisation
toward its fulfillment.
strategy are not inclined to forms nor to structures. On the contrary, they are
abstract, fluid, and dynamic elements that are hard to define and deal with.
These elements are the organization unconsciousness, energy, spirit,
spirituality, mission, purpose, vision, belief systems, worldview, myths,
symbols, paradigm, and state of being.
and transformation strategies are not mutually exclusive. In any organizational
change, they are used as mixed strategies or one after the other, depending on
the organization situation, the manager, or the consultant. But because of
their different methods and approaches, transformation strategies are more
useful for facilitating the first phases of the change process, while
transition strategy is more useful for facilitating the later phases of the
process.
Arial'>3.1.4
Limitation of Organisational Change
Arial'>3.1.5
Mintzberg Five Configuration
organization's structure is largely determined by the variety one finds in its
environment. For Mintzberg, environmental variety is determined by both
environmental complexity and the pace of change. As seen in Table 4, there are
four types of organizational form, which are associated with four combinations
of complexity and change.
style='font-family:Arial'>Table 4. Environmental Determinants of Organizational
Structures
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ZH-CN'>
organizational forms, Mintzberg defines five basic organizational subunits.
ZH-CN'>
Figure 3. Five Basic Organizational Subunits
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these subunits, the strategic apex is represented by the Board of Directors and
Chief Executives. The technostructure on the other hand is represented by those
involved in Strategic Planning, Personnel Training, Operations Research and
Systems Analysis and Design. The Support Staff is composed of the Legal
Counsel, Public Relations Officers, Payroll and Mailroom Clerks, and Cafeteria
Workers. The Middle Line consists of the VP Operations, VP Marketing, Plant
Managers and Sales Managers. Finally, the Operating Core involves Purchasing
Agents, Machine Operators, Assemblers, Sales Persons and Shippers (Beshears,
2003).
Each of the four
organizational forms in Mintzberg's scheme depends on fundamentally different
mechanisms for coordination. According to Mintzberg (1979), the glue holding
organisational structure together involves mutual adjustment, direct
supervision, standardisation of work processes, standardization of work
outputs, standardisation of skills and standardisation of norms. Figure 4
illustrates the basic mechanisms of coordination
Mutual adjustment is the co-ordination of
work by process of informal communication. Here, the control of work rests in
the hands of the 'doers'. The success in
mutual adjustment depends on groups/teams of specialists adapting to each other
along an uncharted route. In direct supervision, the organisation outgrows its
simplest state. Co-ordination is practiced by taking responsibility for the
work of others.
On the other hand, the standardisation of work
processes is needed when the content of work is specified for in the program.
Here, the routinisation and bureaucratisation of processes is commonplace in
business. Routinisation and bureaucratisation may reduce opportunities for
independent action and creative expression but for those delivering and those
receiving the results of routinisation the benefits are substantial in every
aspect of life.
through education and training before or after joining the firm. Where an
organisation invests in systematic training not only policies, rules and values
are being conveyed but also standard ways in which skill should be applied.
by performance dimensions, conversion ratios, profitability and cost
indicators, time. Therefore, unlike the skills and knowledge, the result can be
standardised.
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Mintzberg makes use of his own classification of organisational types
(Mintzberg & Quinn, 1988): the Simple Structure, Machine Bureaucracy,
Divisionalized Form, Professional Bureaucracy and Adhocracy (see Fig. 5).
organisation with a simple structure does not have an elaborate, formal
arrangement of reporting relationships (Mintzberg & Quinn, 1988). Because
of its "structure" and coordination/control, it enables the
organisation to respond quickly to environmental demands. As a result, work
relationships are more fluid and there is a small, centrist management
hierarchy. Moreover, there are few functional specialists. People doing core
operational tasks are often interchangeable. The division of labour is looser
with people carrying out multiple roles. Finally, there is less role
differentiation.
large structures such as an airline or a
hotel chain. These structures are managed as integrated, regulated systems
which make use of specialised, routinised methods and tasks, formal operating
procedures governed by well defined rules and regulations and the formal
organisational communication systems are well-developed to ensure communication
flow between operational units (Mintzberg, 1979). In addition, tasks are
grouped on functional lines and the decision making powers are more
centralised.
As stated earlier, the standardisation of skills and values is one of
the glues that bind a Professional Bureaucracy together. It is typified by a
collegiate of academics in a university, a practice of doctors, a partnership
of solicitors and a trumpet of volunteers. It may also show signs of machine
bureaucracy and adhocracy but for typology purposes the Professional
Bureaucracy reflects "standardisation with decentralisation"
(Mintzberg, 1979).
smaller scale and fluid structures. Herea group of line managers, staff and
operating experts come together most of the time in small product, customer or
project-focused teams. Informal behaviour and high job specialisation are its
characteristic. Teams rely on liaison methods and mutual adjustment between
themselves and other teams. Teams have their terms of reference by more senior management
and a team's scope for action and membership may run counter to the command
structure of the rest of the organisation e.g. a machine bureaucracy.
style='font-family:Arial'>Figure 5.style='font-family:Arial'>
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Arial;color:blue'>3.2
Managerial Roles
color:blue'>
Arial'>3.2.1
Concept
Classification and the Mintzberg Framework of Managerial Roles
style='mso-ansi-language:EN-GB;mso-fareast-language:ZH-CN'>
style='mso-ansi-language:EN-GB;mso-fareast-language:ZH-CN'>
What is a managerial role? Mintzberg (1973) concludes that a role is a
set of certain behavioral rules associated with a concrete organization or
post. Thus, in addition to functions of management as parameters of managerial
activities there appeared one more unit - managerial role. Mintzberg (1973)
classified the roles into three groups- interpersonal, informational and the
managerial proper.
manager they are interdependent and interrelated in such a way that they allow
to describe the nature of managerial activities taking into account levels of
managers and the specificity of production processes (Mintzberg, 1979).
Therefore, it is possible to define different types managers with the help of
prevalent roles. Table 5 and Figure 5 show the managerial roles according to
Mintzberg.
style='font-family:Arial'>Table 5. [Accessed at www.bashedu.ru]
Managerial
Roles According To Henry Mintzberg
- Interpersonal
roles.
Description
of actions
Examples
from managerial practice requiring activation of corresponding roles
1.
Figurehead
Symbolic
leader of the organization performing duties of social and legal character
Attending
ribbon-cutting ceremonies, hosting receptions, presentations and other
activities associated with the figurehead role style='font-family:"Times New Roman";mso-fareast-font-family:"Arial Unicode MS"'>
2.
Leader
Motivating
subordinates, interaction with them, selection and training of employees
Virtually
all managerial operations involving subordinates style='font-family:"Times New Roman";mso-fareast-font-family:"Arial Unicode MS"'>
3.
Liaison
Establishing
contacts with managers and specialists of other divisions and organizations,
informing subordinates of these contacts style='font-family:"Times New Roman";mso-fareast-font-family:"Arial Unicode MS"'>
Business
correspondence, participation in meetings with representatives of other
divisions (organizations)
- Informational
roles.
1.
Monitor (receiver)
Collecting
various data relevant to adequate work style='font-family:"Times New Roman";mso-fareast-font-family:"Arial Unicode MS"'>
Handling
incoming correspondence, periodical surveys, attending seminars and
exhibitions, research tours
2.
Disseminator of information
Transmitting
information obtained from both external sources and employees to interested
people inside the organization
Dissemination
of information letters and digests, interviewing, informing subordinates of
the agreements reached
3.
Spokesperson
Transmitting
information on the organization’s plan’s, current situation and achievements
of the divisions to outsiders
Compiling
and disseminating information letters and circulars, participation in
meetings with progress reports
- Decisional
roles.
1.
Entrepreneur (initiator of channge)
Seeking
opportunities to develop processes both inside the organization and in the
systems of interaction with other divisions and structures, initiates
implementation of innovations to improve the organization’s situation and
employee well-being
Participation
in meetings involving debating and decision making on perspective issues, and
also in meetings dedicated to implementation of innovations
2.
Disturbance handler
Taking
care of the organizations, correcting ongoing activities, assuming
responsibility when factors threatening normal work of the organization
emerge
Debating
and decision making on strategic current issues concerning ways of overcoming
crisis situations
3.
Resource allocator
Deciding
on expenditure of the organization’s physical, financial and human resources
Drawing
up and approving schedules, plans, estimates and budgets; controlling their
execution
4.
Negotiator (mediator)
Representing
the organization in all important negotiations style='font-family:"Times New Roman";mso-fareast-font-family:"Arial Unicode MS"'>
Conducting
negotiations, establishing official links between the organization and other
companies
font-family:"Times New Roman"'>
roles link all managerial work together; the interpersonal roles
meanwhile ensure that information is provided; and the decisional roles
make significant use of the information. The performance of managerial roles
and the requirements of these roles can be interchangeably played at different
times by the same manager and to different degrees depending on the level and
function of management.
concerned with interpersonal relationships while the informational roles are
concerned with the information aspects of managerial work. On the other hand,
the unique access to information places the manager at the center of
organizational decision-making.
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