Fundamental Shift in the Nature of the Organization
Discuss About The Paradigm Shift Dimensions Of Work Culture.
In this essay, the fundamental shift in the nature of organizations will be discussed. The discussion will be based on the theory of network society given by M. Castell. The questions which will be discussed in this essay are: is there has been a fundamental shift in the nature of the organizations, where hierarchy and traditional principles of the hierarchy are not significant and relevant. The second question which will be discussed is the fundamental shift’s implication on organizational culture and managerial control. It will also be discussed that if such shift has occurred, the organizations and managers have to bear the effects, like by developing and integrating the culture of the organization and ensuring that the job is done according to the standards. An analysis of the implications of M. Castell view on the firms changing nature of its policies, practices associated with the structure of the organization, behaviours, control, and culture will be done. In the end, the conclusion will be drawn (Anttiroiko, 2015).
There has been a fundamental shift in the nature of the organizations, where the traditional principles of bureaucracy and hierarchy are no longer relevant. Though still there are two main flows of the organization, traditional and modern. But between these two, there is a huge difference in the trends which flow in the organizations. Traditional organizations structure is more bureaucratic and hierarchical in nature, where the power flows upwards and vertical and there is departmentalization of the employees. A chain of command is followed by the employees. Like, a manager is a chief coordinator and every department head reports to him. The traditional organizations were more hierarchical, disciplined and organized. The job description and accountability, goals and achievement plan is explained and set before, the business strategy is fixed at the beginning of the economic year. But due to changes in the economic and market condition and with the introduction of technology, there has been a fundamental shift in the way the organizations use to function. Modern organizations are usually termed as organizations with no barriers, which are networking with each other and collaborating more than the traditional organizations. These organizations are based on the concept of diversification of its activities and connectivity, they work in a more challenging environment and their goals are changed and set more frequently (Anttiroiko, 2015). Such organization’s management depends largely on the soft skills, like a relationship, understating, listening, consensus building, team building etc. The hierarchy is flat in the modern organization structure as they work on the concept of team building and teamwork. The fundamental shift has been due to the changing pattern of the work. There has been an increasing pressure on the organization which demands them to be more competitive, customer focused and agile. A breakthrough in the technology and communication has also contributed to the change.
M. Castell Theory of the Network Society
According to M. Castell theory of the network society, due to the revolution in information technology, there have been changes at the global level and the organizations are affected by it. Due to this, the organizations were restructured into the form of the digital network. This new network typology had few social consequences, which include the change in the pattern and structure of the organizations, which from sequential time organizations became a simultaneous timeless time organization. In this form of organizations, Taylorism and Fordism were eliminated and it gave rise to a more flexible production and just in time process. In the modern organizations, there was horizontal networking, interlinking of the firms and people. He also argued that the network of the society is created not only by the introduction of technology, but it is also due to the combination of economic, cultural and political aspects. In his own words, “Influences such as religion, cultural upbringing, political organizations, and social status all shape the network society”. According to his theory, power lies in various networks. People participate in the network according to the level and the contribution is done by them towards the goals of that particular network. Due to the introduction of electronic communication, people are easily connected with each other and it makes it easy for the people to join the network. Now the hierarchy has changed and has become less bureaucratic due to the presence of multi-level and multi-sector decision-making system based on the process of negotiations (Lefifi, 2015).
The new economy is characterized by three basic features, globalness, informationalism, and networkedness. At the intersection of these elements, network enterprise can be located which consist of enterprises or such constituent units which can perform various activities and projects and can change themselves according to the need of the time. With the presence of the globally networked business world, an enterprise becomes one at the global platform. Organizations these days are developing interfirm relationships and are connected with each other in various companies, through multiple memberships of boards of directors. In a vertical hierarchy, organizations have to face many problems in coordinating functions, resource allocation, an accomplishment of a task, which cannot be done due to the complexity of the network and a certain size of the companies. But in today’s world, due to the emergence of internet and technology, there is tremendous flexibility, co-ordinated decision making, decentralized execution, task performance, communication in global and horizontal manner. The inter-personal and self-communication is being used in the organizations at all level. With the help of information sharing system, the knowledge of the network societies are getting enhanced and it helps the organizations to reach a rationale which can be conclusive. This helps with the problem-solving at a fast pace (Heerwagen, 2016).
New Economy and Network Enterprise
The societies are continuing to perform politically and socially in which there is a shift in the process of formation of the public mind from political institutions to the communication. Also, the role of NGOs has evolved in the society and organizations today. Due to the change from hierarchical to horizontal corporations, a new kind of dynamism can be witnessed in the capital market. By horizontal corporation and network enterprise, Castell meant that vertically integrated corporation, Tayloristic work settings, cease to exist. There has also been an increase in the human autonomy, with an end in the hierarchical signals and bureaucracies which is replaced by an innovative economy. There has been a shift in the cultural values which are the main driving forces behind the social and economic changes (Walton, 2010).
In the mid-twentieth century, when business was embracing automation, many historical positions related to work were being eliminated. There was need of people to run and maintain the large-scale equipment installed in the companies. The entire organization was restructured, the management of inputs and outputs were re-assessed, and people skill sets were reviewed. This helped in optimizing the environment, where operations were taking place based on innovative methods. Those companies who were still working with old bureaucracies, while implementing new work methods have faced many problems especially with high operating over costs. One of the reasons for the emergence of a flat structured organization is the inefficiency of the new work methods which were operated in the old organizational models (Cummings, 2014). With a change in the market conditions, consumer preferences, increase in competition, companies were unable to design, develop and produce good based on their own internal goals. Bureaucratic structured companies, found it difficult to manage in such volatile conditions, sustain their profitability. There was no requirement for the middle management workers, due to the emergence of computers and business systems. Such managers were used to working according to the large bureaucracies in order to achieve the organizational goals. But due to such shift in the nature of the organizations, the bureaucracy was in direct conflict with the needs of the business. Due to the sudden change in the market, customer needs and tastes, managers found it difficult to maintain the profits and revenues. This leads the companies to lose their market share. Over the past two decades, many factors have challenged the running of the organizations, like automation, technology implementation, business computing advancements etc. Now the companies are more concentrated on the improvement of the product quality, increase in the satisfaction of the customers, reduce returns, increase in the sales, etc. (Castells, 1999)
Emergence of Flat Structured Organizations
Companies are reinventing themselves according to the market competitions and challenges. New benchmarks are set by the companies, while experimenting, implementing new theories of management, organizing themselves according to the new goals. Companies which are operating in post-bureaucratic era are more flexible in nature and ready to adapt to any kind of changes. In the pre-bureaucratic era, a hierarchy was cumbersome and responded very slowly to any kind of market changes. Now, the hierarchy is being replaced by the cross-unit organizational grouping, where there is more scope for decentralized decision making (Castells, 2000). There is no boundary in the lateral structured organizations, as all the departments and teams are required to work effectively with each other. Teams and departments are working on the basis of knowledge sharing and task sharing. Workers in the post-bureaucratic organizations are supposed to work towards the organizational goals and objectives rather than following the rules and regulations. Managers are seen as social supporters and coaches in flatter organizations, due to the distribution of authority to employees.
According to Clegg, in the past bureaucratic organizations, managers were obedient to the management and followed the authority delegation system religiously. But in the modern time, in a flat organization, this system will be inefficient. In such organizations, the strategic planning process is supposed to be creative and involve team decision making. Organizations are now more decentralized due to the presence of flexibility and innovation.
In the last few decades, many scholars and researchers who are studying the organizations and its culture, suggest that organizational culture is the composed of the practices, policies, and culture which an organization develops while handling its manpower. In recent years, there has been a new trend in the form of managerial thinking in the organization culture, where managers are encouraged in the creation of a strong organizational culture. According to J. Grey, managers play a vital role in the construction of a culture of an organization and they lead the organization in the direction, which they consider to be effective. Organizational culture is tried to be adopted by the concept of managerialism, in their agenda of self-management, alignment around the values and discussion regarding the empowerment (Touman, 2014). The organizational culture of pre and post-bureaucratic era has huge differences in the manner they were being created, managed and operated. Modern time, organizational culture is representatives of the active, living phenomenon, where the key members of the company, create a shared meaning for themselves. The head of the company who shape the culture affects directly the decision-making manner, behavior models, management style. Managers play a central role in controlling and shaping the culture of the organization. Managers determine how the resources of the company will be acquired, developed and deployed and later converted into valuable outputs. This is done by linking the performance of the job to the monetary incentives and also by ensuring that the workforce has the desired resources to accomplish the work. By understanding the culture of the organization, managerial reforms and its impact on the company can be understood more clearly. Many scholars and researchers have analyzed, that many bureaucratic organizations culture obstruct to introduce any kind of modernization in the system, and this hampers the alignment of the goals with the job done and impacts its overall economic growth. Post-bureaucratic organizations have a culture which defines the proper manner in which employees should behave in an organization. It consists of the shared beliefs and values which is established by the leaders or managers and they reinforced it into the organization with the help of different methods which ultimately lead to the shaping of the workforce behaviors, perception, and understanding. Organizational culture varies from company to company as they vary significantly, so there is not one size fit culture template to fulfill the needs of every organization. A strategic competitive advantage should be provided by the culture so that the organization’s overall performance can be improved (Trapp, 2014). Due to the elimination of bureaucracy from the system, a strong culture helps in bringing several benefits to the system, like efficient decision making, team building, enhancing the level of trust and cooperation etc.
An informal control mechanism is provided by the culture, as the employees know what is important for them to achieve. The degree of hierarchy is the limit to which any organization can value the traditional authority channel. An organization which has a high level of the hierarchy will be more formal and slow as compared to the low level of hierarchy organization (Srivastava & Panda, 2003).
Organizations are running successfully due to the fact that they are culturally driven, and are values-based, which are widely shared by the employees and are supported by the structure and the strategy. For instance, due to strong work culture, employees are aware what is required by the top management and how to respond to those needs. They are also aware of the monetary reward system if they demonstrate the organizational values (McKenna, Garcia-Lorenzo, & Bridgman, 2015).
In post-bureaucratic organizations, it is no longer required to have a tight control on the workers of the company and it is no longer effective or appropriate to have measurements of output. Managers in the flat organizations are required to help everyone on their team so that they can focus on the goals of the organizations and achieving it as well as delighting the customers of the companies. Now the role of the manager is not merely assigned to delegating the authority or tweaking the supply chain. Now managers are no longer looked as a semi-skilled labor, due to the transition, they are seen as knowledge worker whose main aim is to delight the client and work in harmony with others. They are now referred as an enabler rather than a controller (Styhre, 2008). It means they are supposed to work as a motivator and a person who can help those workers and staff, who are working for the company and remove any kind of hurdle which these workers face while doing their jobs. The managers are now supposed to enable the workers to help the company in achieving the goals by adding value to the customers rather than controlling the workers tightly (Hlupic, 2016). The primary emphasis of the managers is supposed to be placed on the new bottom line of the business, which is basically, delighting the customers, measuring the outcomes of the customers rather than the outputs. Nowadays, the role of the managers has transformed drastically. In today’s time period, the managers play a crucial role in the performance of the organization. They have the most direct influence on the employees. Now they have the responsibility of aligning the performance of the department and the staff other than controlling and motivating towards the achievement of the organizational goals. In the shaping of the organizational culture, they play a vital role. They work as a link between the senior management and the lower management. Managers are seen as a motivator and a person who communicate the decision clearly, who also help in creating a team ethos (O’Donnell & Boyle, 2008). The basic difference between traditional and modern managers is that traditional managers were driven by the hierarchical system and we're producing the orders and control amongst the staff and employees. Whereas, modern days’ managers are flexible and adaptable in nature. The focus on inspiring the knowledge, skills so that it can lead to team achievements. Earlier, managers use to demonstrate their authority and power to the employees, but now the managers are transformational and connect the individual goal with the organizational goals. The authority was exercised by the traditional manager with the help of command and control. But now managers, delegate authority to their subordinates so that they can create a problem by being innovative. The managerial control is done by establishing certain standards for performances, which are more clearly defined objectives. This ultimately leads to the alignment of the actions of the employees for the accomplishment of the organizational goals and monitoring and rewarding of the employees (Aktas & Kiyak, 2011).
To conclude, it can be said, that there has been a fundamental shift in the nature of the organization, where the traditional method of hierarchy and bureaucracies are no longer relevant. Due to this shift, there are certain implications on the organizations and the managers in respect to the development and integration of the organizational culture and work performance. Authors like Castell, have suggested that the only way of the future of the knowledge based economy is to attain with the help of post-bureaucratic systems. Organizations are becoming more flexible and adaptable in its structure. Multitasking force, social, economic, political and technological changes and the need for data analysis at various levels has shifted the society of the network. The network society engages the workers with empowerment, decentralization, decision making, empowerment in the knowledge economy.
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