Have organisations progressed through the legendary McGregor’s Theory X and Theory Y to the present day Theory Z. Do these theories remain a management myth in the present day organisation or should revolutionary strategies be adopted to implement relevant management thinking within the current global village we now live in.
Structure creates hierarchy and hierarchy creates constraint. Employees who are capable and innovative are constrained by the lack of power usurped by the triangular structures that exist in organisations. CEOs are unduly credited with turning around organisations by using the workforce to achieve success. The question is who really carries out the productive work for the organisation to be profitable and deserves to be rewarded with the huge incentive bonuses that come with success? Certainly it is not the CEO but the workforce, because they are ultimately responsible for the turn around.
Organisations hold on to power as a means of controlling the employees by withholding information. There is a resistance of the devolution of power from the top to the lower levels of the organisations. The success of an organisation depends on its wealth of resources it may possess and one of the critical resources is the human capital. The dynamism of the human capital presents a challenge for any organisation to maximize the potential of the resource.
Employees do not come to work to fail but have a desire to succeed in what they do. Hierarchy works against this desire and employees hold on to their potential. This creates a tug of war between employees and management with undesirable consequences.
The bureaucratic tendencies of organisations are characterised by standard operating procedures, domains of authority, hierarchical lines of communication and demarcated work assignments. “It [bureaucracy] kills ambition and destroys the initiative and incentive to do more than the minimum required. CEOs are perpetrators of bureaucracy that alienates co workers and stifles intellectual stimulation. Employee job satisfaction surveys often reveal that employees experience too much controls and policies that impede innovation and creativity. This results in a rigid organisation with tight boundaries in which very little complex learning occurs
There is a tendency by corporations to rely on layers of management to guarantee that profits, targets, productivity and bottom lines are met to satisfy shareholder expectations. This is usually at the expense of the general welfare of employees including ecology and job satisfaction. Managers act as enforcers, overseers, and parents of unruly, irresponsible, disobedient children disregarding the fact that employees are actually responsible adults who desire to do well.
Organisations ought to facilitate work based teams who constitute what for example Fisher and Paykel in New Zealand called the Everyday Work Teams (EDWT). The EDWT’s mandate is to encourage contributions from members, establish a unified vision, be responsible for plans linked to goals, and formulate plans to develop members and processes, operate within defined boundaries and have a positive focus.
Organisations need to expand the scope of employee autonomy in order to establish attachment to the firm. Organisations that facilitate employee participation in work teams and involve the teams in decision making ultimately benefit from increased employee satisfaction and commitment. Conclusions from studies carried out in the past show that self managing teams, rate higher in quality of work life outcomes and performance than traditionally-managed groups.
In any organisation social groupings or teams form naturally and these teams usually have an effect on the organisation in one way or another. Organisations should in-build self managing teams within hierarchical structures to harness the relationships that exist within these groups for organisational benefits.
It can be hypothesised that by sharing power and rewards with team members, organisations help to motivate team members to perform. This can best be achieved by diverting the bonuses traditionally paid CEOs to employees as part of a profit sharing scheme. The devolution of the CEO’s power comes with the democracy of information, skills development, trust and autonomy.
Top heavy organisations as exemplified by monarchic and oligarchic political systems in business do not provide an encouraging environment for the emergence of champions and innovation. Such organisations miss out on real time issues as there is usually a “disconnect” between the executive and the shop floor employees or customers and opportunities go begging as it takes time for management to realise their existence. Management systems need to give the employees the latitude to be innovative and responsible for their actions. There is a need to re-distribute power to lower levels of the hierarchy to encourage the sprouting of numerous important agenda items that need addressing for organisational success. Team member based power would ensure the utilisation of improvement opportunities as they emerge.
Rather than management prescribing the sequence of how tasks are to be carried out employees require encouragement to participate in the conceptualisation of tasks and of the work processes as a whole. This would result in improved emotional intelligence of team members as they feel the sense of belonging and the freedom to make a change. The organisation has to facilitate the forming of groups or teams naturally, without interfering with the formation process. Informal groups within organisations have a natural birth and the organisation can make use of these formations for organisational performance.
More often employees want to understand the organisation’s purpose and how they can contribute and it is the organisation’s prerogative to unlock this potential from the empowered teams to generate new ideas and competitive advantage.
In traditional organisations, managers have a tendency to hoard information as a means of control. This tendency is eliminated in a self managing teams based organisation that calls for the democracy of information. The team members will naturally make decisions based on common information, but it is the pooling of unshared information held by individual team members that make their decision making stronger and of value to the organisation. The information is released and shared for the common goal of team achievement and organisational success.
The homogeneous nature of self managing teams fosters trust among team members and keeps them motivated. This makes information dissemination fluid and transparent. The facilitation of information flow should be in the organisation’s structure to empower the work teams. Hierarchical control of information de-motivates employees at shop floor level and does not add value to customers due to the disempowered employees.
The self managing teams based model of management asserts the effectiveness of leadership that is not based on individualism but a democratic relational type of leadership that fosters harmony and job satisfaction. The leadership emotional intelligence is spread through an array of individuals the summation of which is the enhanced wellbeing of the workforce and improved performance.
The trust and autonomy accorded the employees releases tension created by control and buys loyalty, commitment and responsibility. The workforce becomes self regulating and develops a sense of ownership and entrepreneurship.
Organisations are able to benefit from harmonious relationships within the workplace that result in efficiency, productivity and sustainability.
A revolutionary overhaul of strategic approach is required in order to facilitate the encouraging of self managing groups.
Management needs to set challenging goals without being explicit to encourage curiosity and different ways of doing things.
Understand the power of self managing teams in creating new order out of chaos.
Organisational culture requires a shift from controlling to trust and empowerment. When employees are treated as responsible trustworthy adults, a sense of citizenship is created. This will pave the way for redistributing power throughout the organisation and a subsequent motivated high performing workforce.
My admiration goes to the Semco and the Fisher and Paykel organisations that have inspired my thoughts, from the following references;
Semler, R. (1994). Why My Former Employees Still Work for Me. Harvard Business Review, 72 (1), 64-74.
Mallon, M., & Kearney, T. (2001). Team development at Fisher and Paykel: The introduction of 'Everyday Workplace Teams'. Asia Pacific Journal of Human Resources, 39 (1), 93-106.