We face a lot of challenges during struggles of our life which makes us creative. Finally, when we get the results, we appreciate the struggle. Similarly, an organisation faces a lot of struggles till it becomes existent in this world. Struggles come in different manners, never shy away from struggle. Challenges of an Organization: Financial Performance Technology Management Monitoring Changes Team Cohesion Diversity Decision Making Challenges while Globalization: Different culture - Choices/Taste/Needs of consumers would differ Policies Resource Availability Understanding people’s psychology Existent competition in the market Different examples of challenges faced by Jio, Amazon, TATA nano Opening of plant by TATA Nano in West Bengal: People and Government against it Digital Technology Challenges: Banks need to gear up to adopt to these digital technologies. ICICI, HDFC bank: why people really interested to open their accounts here not in govt sector banks like Union Bank, Andhra bank? – now generation looks for digital way, transactions, and processes Organisations need to think about before they support diversity. o Person coming from different background, different belief system o People can bring new ideas, approaches in solving a problem. - Stakeholders for an organisation: those who are impacted by the organisation’s growth o Impacts on employees: employee satisfaction, any organisation is people-oriented o Impact on Customer: If org can’t take care of their customer, they would go away to the competitors. Ex: Automobile demand. Old days of Bajaj scooter. o Impact on Creditors: Important as org needs to borrow money. Creditors wont like bad debt. They won’t give credit if not good paymaster. They will see my creditworthiness. o Management: looking for efficiency and effectiveness. o Government: Rules & Polices If an org is being able to inc. profits, govt will get taxes, govt can think about getting more citizens employed. Govt and org should take care of each other so that they can survive. Unions: Ex: TATA taking up Air India: BMI testing every week – cabin crew against it. o Community: community development. CSR projects, Ex: Finolex cables (educate all electricians of India, giving them tools for day to day working), insurance policy due to hazardous working conditions. o Suppliers: look for fast payment for their supplies. Ex: Maruti has good term with suppliers. o Owners/Equity holders: Looks for more dividends, more shares, they monitor how org is performing. They can change the management, working, they can ques the management Efficiency: how efficiently org is using its resources (man machine material money) Effectiveness: How effective? Fulfil the targets/goal in time or before. Org can be efficient, may not be effective. But effective org will be efficient. OSD_Session 3 UM21351 Poll: A Popular form of Organizing is to have employees work on what they want in whatever department they choose so that motivation stay high. (Agree / Disagree): Disagree - Organisation may not be able to achieve its goal. Workforce might go skewed if employees are given Human resource will not be effectively utilised But when there are certain positions, internal advertisement of positions if employees want to choose Key Structural Dimension of Organisations - - - Formalisation: Rules, Documented Regulations. Many IT firms are less formal Specialization: specialised domains, when organisational design is done, where they must be assigned, group accordingly and position in structure Span of Control: It answers the question - How many people or positions can a person control? Unless it is a small company, everyone cannot report to the CEO. It will result in a long queue to answer their query. It will be beyond his capacity to control the situation and the effectiveness of the organization will break. Hence, we have departmental heads, functional heads who will report to the CEO. Example: a finance department will report to the CFO who in turn will report to the CEO. This is how we can figure out that whether an organization will have a tall structure or a flat structure Centralisation and Decentralisation o Centralized: • Decisions made by 2/3 people or selected board. • People at lower positions do not have power to take decisions • Time consuming • Frustration among employees, Sense of ownership is low o Decentralized: • power of taking decision is given to different positions • Faster decisions • People will be more creative, responsible • More responsible Contingency Factors: o Goal and Strategy: Goal is intent/purpose of an org; Strategy is the process/way to achieve goals. Every year goal and strategy are set. Based on this one can redesign and rework the structure of organisation o Size of Org: Organisational size, Departmental size o Technology: Need to use new technology, keep org effective and efficient; Some activities will be deleted, some job positions might be deleted or created. Hence structural changes o Environment: Environmental regulators, suppliers, creditors, shareholders, change in policies will affect o Culture: People coming from different cultures, diversity- people thought process different. People coming from diverse background would bring different views which might help in fighting challenges. In order to benefit from diversity, need to also work to keep diverse people in org: org needs to them so that they can work efficiently and contribute. Org is designed because org needs to work efficiently and effectively. Due to challenges, sometimes there needs to be org structure change. Processes involved in designing the structure. ▪ ▪ What is the purpose and future plan of org: the goals, the purpose and how to achieve them Based on experience, choose what to do, not do; take up on challenges OSD_Session 3 ▪ ▪ ▪ ▪ UM21351 Build your org structure, group activities, fill the structure with right kind of people Balance authority and Responsibility: Cannot go for centralised structure. The more decentralised the org, achieving the goal will be easier, fast decision making. Keep on restructuring human work force, giving responsibilities, pick up people who have expertise, bring in groups Review organisation structure repeatedly, whether if upgradation is required. Simple structure What if goals are not met? When to act? Annual goals are broken down into smaller goals Finding of which goal is not met Actions depends on the time of detection Start finding reasons If person faulty, change; If structural inefficiency, change structure Action is taken immediately OSD_Session 04 UM21351 – Pratiksha Dhar Types of Org structure 1. Hierarchical/vertical org struct: The line of command till lowest level of employees with hierarchical reporting relationships. Easy for people from outside to understand and relate who is responsible for what. Structure grows vertically. Merits: • • Clarity of level of authority (to others, other depts, divisions, to the person himself) Helps Organization to promote people (Vertical Promotion: promotion in the same function/field, Horizontal Promotion: Rotation of fields so you can gain more expertise in some other functions) Demerits • • • Slow down innovations as formal structure, people are guided by upper management, less freedom to be innovative Lower-level people might feel uncomfortable as doesn’t have authority and power as only taking up instructions. Narrow interest only on department 2. Functional Structure: Activities are grouped by function with similar kind of skills, response is slow when environment (changes in community, changes in creditors) changes as they particularly don’t get affected as they cater to their functions only. Merits: • • • Roles and responsibilities are clearly defined Facilitates to improve productivity Allow the skills to develop and specialize, trained based on specific domains/functions Demerits • • • Difficulty in mixing of other depts, lot of silos will get created -> hence performance will slow down Affects the communication, everyone will be more concerned about about their function only (Silo formation) No innovations, collaborations, teamwork 3. Horizontal or Flat Structure : In flat, there are no layers, max 1 or 2 layers. Ideal for smaller/ startup companies (Focus is how to make the org acceptable, faster communication. Focul only on end products and services, need flat struct as you need everyone to work together and report, working for common goal). Ex: Small audit and consulting firms Merits: • • • Everyone will report directly communication channels are very fast transparent communications present OSD_Session 04 UM21351 – Pratiksha Dhar Demerits: • • • Cannot maintain flat structure in org for long time as org grows as more activities come in hence more positions are being created, impossible for manager or dept head to manage people in flat struct. Confusion about who is responsible for work, confusing for external people like creditors, investors, govt People would have more generalised skill, not specialised 2nd type of Flat Structure: Processes will be flat 4. Divisional Structure: When an org has many prods/divisions; when org grows, huge demand for this divisions. Customer base for each prod/div high; so, have to be kept differently. Each division works as a profit centre. Each division works like a small organisation, they work like an organisation inside a bigger org. Each div has separate R&D, manufacturing, accounting, and marketing depts. Merits: • Good Coordination among functions Demerits • Standardisation not possible, customer base diff for every division Geographical Structure: When orgs grow w.r.t geography. – Product name might be same, but needs might be diff across geographies. Merits • • • Better segregation, customer needs can be addressed in a better way Closer to customers Communication between customers and org becomes faster Demerits • Duplication of services/activities (every geographical org has duplication of depts) Functions can also in geographical division. 5. Matrix Structure: Ex: Starbucks (tie up with TATAs.). All functions are separate but all report to CEO, IN head office have hierarchical structure. They have 3 main geographical divisions: US, China and Asia, Europe Middle East and Africa. They have 2 products: Coffee and Baked Products (divisional heads responsible) . Product heads under divisional heads. Each product will have a product head sitting at head office separately reporting the CEO. Divisional product head will be more concerned about marketing their own product. Each divisional product head will be supported by many functional depts. Functional dept reporting to divisional head and also dotted line relationship with functional head at board. Each product head – 2 bossed, each functional head – 2 bosses. Product/functional head at corporate office: reporting directly to CEO, they are the policy makers;policies have to be followed by the functional people under divisional heads who have administrative relations with them. OSD_Session 04 UM21351 – Pratiksha Dhar Single person/position reporting to multiple people. Merit • • Closer to their customers, divisions, business They have control but they don’t interfere Demerit • Confusion 6. Network Structure: Many activities are outsourced Sometimes specialised people from my org will sit with outsourcing companies. This structure makes the org lean. Better communication and optimised processes. Ex: Publishing House (Scriptwriters, editors may not be company employees and may be outsourced 7. HYBRID STRUCTURE: Every org is combination of above 2 or more structures which would make every organisation efficient and effective. Poll: Top Managers are smart to maintain Organizational Control over the activities of key work units rather than contracting out some work unit task to other firms. ( Agree/ Disagree ) OSD_Session 05 UM21351_Pratiksha Dhar Structure plays a vital role in making an organisation efficient. Every org is set up with a purpose. The board is responsible for making the org more effective and efficient. Once purpose is set for an org, they go for setting up a goal. The goal which they set depend on external and internal environment of an organisation. External Environment • • • Opportunities: The opportunities the org has to get closer to its goal. If I want to be No.1 leader, we must see what products and services we are providing, and for being best we look for opportunities around us. Like large consumer base, expansion opportunities. Threats: We must find ways and means to overcome these. Unless we understand the challenge, we cannot overcome it. Uncertainties: Things which we do not know and how to take care of it. How to know about uncertainties? See my past, how the uncertainties were and how it was tackled and predict what can happen. And we need to get prepared about those kinds of situations. Ex: Fire is an uncertainty, so we need to plan to tackle it. We need to predict and get ready for future situations. Certain readiness must be there. • Resource Availability: If resources will be available in a cost-effective manner. Plants are mostly setup near the place where resource are available near. Internal Environment: • • • • • Org Strengths: Where we can do excellent work. Ex: One org can be great in project management, Ex: Gujarat Refinery was wiped out due to calamity, project management was so good, by own people they completely revamped and re-setup the refinery. Org Weakness Org Competencies Leadership Style Past performance of Org What can be a Goal? When management set up a goal, it is a broad goal keeping in mind mission, vision statement. Goal also takes care of competitive advantage. Ex: Coca Cola broader goal: Put a coke at arm’s reach of every customer. Goal has a timeline and they setup operative goals. Different types of operative goals are • • • • • • Overall performance goal: Net profit, net income (quantitative) Resources Goal: where resources would be available and how much I will need. Man, material machine Market Goal: which are the markets we want to operate and what should be my market share. Employee Development Goal: what is the new skill I need in my org to achieve a particular grow; I have to train my people in those areas. Innovation and Change Goal: Can’t operate org in same way that we are operating yesterday. If we want to achieve more, we must keep changing with innovations, build for a better working world for the org to be a growth-oriented org. Productivity Improvement/Goal: Setup goals to improve. Like improving utilization of a machine, machine downtime low. The above goals need to be communicated. OSD_Session 05 UM21351_Pratiksha Dhar Having setup, a goal, we will think how to really achieve this goal -> Need to prepare strategic intent (prepare a strategy how to achieve that goal. Ex: Differentiation strategy of products, such as iPhone so iPhone became a differentiating phone) Strategy Formation Models 1. Portal’s Model • Differentiation Strategy: Bring Differentiation In your products and services • Low-Cost Leadership Style: Become leader in market by giving low-cost good quality. Ex: Jio, Patanjali, Walmart. 2. Miles & Snow Strategy: • Prospector Strategy: Brings prospects to an org, org having risk taking ability, creating an innovative environment, cost might increase. But No Risk No Gain. Ex: Nike (recycled items, kept cost competitive; Biocon: oral dose of insulin, Facebook, WhatsApp). Bring a new product of insulin and people will rush for your product. • Defender: They don’t take risk, hold on to their customers; try to reduce their costs and improve quality, fixed customers. • Analyzer: Mix of prospector and defender strategy. They are more flexible. • Reactor: Basically, not any prepared strategy, they believe on what is happening now and whatever challenges they face they try to overcome. They don’t plan and make strategy beforehand. The give first response to overcome challenges, they respond to the environment. The choice of strategy depends on the impact the organisation will have. Impact will have a direct relationship with the effectiveness of the organisation and achieving the goal. How to know the effectiveness of our strategy? We will know, by how effectively we have achieved our goal, then correct strategy. We will only know after seeing result. We can refer to this as a past performance/ experience of the organisation while preparing future strategy. How to measure effectiveness. As a whole, difficult to measure. Very difficult in-service org. Approaches to measure effectiveness: - - - Goal Approach: consumers, community are stakeholders. Reach out to them how happy they are. How can my customers and community can be happier? Indicators like profitability of org, market share and growth, social responsibility, and product quality. Feedback from stakeholders Resource Based Approach: Stakeholders are Suppliers and creditors. Indicators are Creating a win-win situation, measure their feedbacks, ability of managers to use tangible (Ex: people of org) and intangible(Ex: Knowledge) resources and capabilities Internal Process Approach: Stakeholders are employees, owners and govt. Indicators are Employee satisfaction survey, compliance with govt Strategic constituents’ approach: Stakeholders are shareholders who will look for financial gain. Creditors about credit worthiness There is no one/fixed strategy that will make the org effective. Orgs are dependent on different factors. At every point of time, org needs to revisit the struct, the needs of customer, re-evaluate the challenges and find out suitable structure of an organisation OSD_Session 05 Design Essentials: • • • Org is for a Purpose Strategic intent ▪ Core competencies and Competitive advantage of org ▪ While implementing strategies we may need many techniques. ▪ Models to aid Org effectiveness must be assessed. UM21351_Pratiksha Dhar OSD_Session 6 UM21351_Pratiksha Dhar Nowadays we find that more and more business are expanding globally by following different strategies to sell their products/services. Why are people interested are doing business globally? - - Tapping unutilised opportunity More Opportunities globally Growth: There may not be much scope for expansion in domestic market. So, they look for opportunities. Ex: Org from US, Europe come to open their business in BRIC country because they think that BRIC are developing, population very high; so business can sell, as more customers, more opportunities. Profitability/ Availability of resources: Resources might be available at competitive prices and cost of production can be reduced. Resources can be Man/material/Labour. Ex: China produces highest number of automobiles and consumes too. TATAs brought Starbucks Motivation for going global. - Scalability: Ex: China-more volume can be sold Economy of Scope: what is my scope (availability of resources/cheap labour/cost of manufacturing less). o Ex: For Walmart in South Korea, bright coloured products and cost competitiveness were the challenge. o Ex: Walmart entering German: couldn’t make a breakthrough. Understand the culture, people of the market. Most important factor is cost effectiveness How to enter the Global market? - - - 1st stage: Just in border of domestic market, wants to expand now in Global market 2nd Stage: Having decided to do global, create an international strategy: start by doing a pilot test of goods/services in other countries by exporting; there we don’t have any support unless we tie up with some existent agency to understand the demand of my product They may have an international division. They will have some functions that would be shared among the domestic and this international division like financial functions. In international division one person may be responsible for one / more countries 3rd stage: Multinational stage: We find demand for our products is huge; so unmanageable to do business through trading partners (also business through trading partners is not desirable) -> so setup your office (Ex: assembly and sub-assemble). Ready now to make customizations for my present global market (Ex: Sony). But some may sell standard products (Ex: Coca Cola). 4th Stage: After realisation that demand has reached for high volumes, we start setting up plants, machineries, R&D division for catering to the local needs of that market. The organisation becomes a special entity of that country. All functional depts are separate. o Ex: Unilever India as a separate organisation. They decide their own goals. Organisation inside an Organisation. o Ex: Nestle. These organisations are called stateless orgs as they have gone global. Nestle what business they are doing in home country; Switzerland is miniscule as compared to business they are doing in global market. o Ex: ABG (Family owned) No.1 in carbon block manufacturing in world; acquired many foreign companies. 60% of revenue comes from global business. OSD_Session 6 UM21351_Pratiksha Dhar What are the procedures for Global expansion? - Like for exports, org must license with other countries to sell their products. In licensing no profit sharing, will get according to agreement. Rules and regulations of parent company. Ex: Walmart - Then orgs mays go for joint ventures. Profit sharing, shareholder. Ex: TATA Starbucks Strategic Alliance/Consortium: Lets join hands and sell products together. Customer same, for mutual benefit, will sell products in a platter. If a group of companies has different kinds of products, but their customers are the same. Multi-Domestic Strategy: In global, when we go multi-domestic strategy- strategy is not to standardise products/services, but to cater to the need of the local players. Sometimes it may happen the product which is customised by Global player for one country becomes domestic preferred product for another country too. Ex: McD customisation for India (75% of the products are customised. Also, Mutton based product instead of Beef based product, heavy demand in India; they introduced this product to other countries) Structure changes when org goes global: Global trading struct, global geographical struct, global product struct depends on type of org functions, market, workforce Challenges in going Global - - The cultures, belief system, work orientation, language is different. (Failure of Walmart in South Korea, Success of Colgate in India) Transfer of knowledge and innovations: Transfer of experience is challenge as it is not easy to transfer, availing of previous experience may not work in new country. If successfully capturing the experiences my org faces in diff orgs for future use; them my org is a winner as we are capturing various nature of challenges and how the challenges were overcome. This past performance can be referred, and a clue can be taken but capturing the challenges is also difficult (format of storage must be standardised) Complexity and Differentiation: Every org is working in complex. Matrix or network based so as to make the system cost effective and keep the values, ethics of current org intact. Constant motivation and education are required for the workforce to keep working in this complex structure. Global Coordination (wherever required) Suppose org has footprint in 20 countries, want to setup one more org in another country -> so to be setup efficiently, needs coordination from all global orgs Coordination Mechanism: Task force is formed across all Global Orgs. For example, operations task force would be cross global org like from India, US, etc. and brings their experience at one place to solve the purpose. What are the right/best practices from each global org to make the end result efficient. Cross functional team Ex: Heineken. They make a team of 13 menbers from diff countries so as to optimise their production practices. How they are done in their own country, they share it in the task force. How it benefits? - Cost Saving Expertise available in own Org Educate own org people OSD_Session 6 - UM21351_Pratiksha Dhar Interdependence Better decision-making process Fast decisions Innovations across orgs All above combined, helps in higher revenue. But, while making coordination, take care of the culture of your own local market. Ex: Japan is centralised, European believe in decentralization. US are formal companies. China companies have traditional practices. Headquarter Planning: Values system unique across. They ensure that values and ethics are followed everywhere. Global Teams help to optimise the operations OSD_Session 07 UM21351_Pratiksha Dhar Challenges faced from the environment 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. From the industry: Other orgs who are in the marketplace. From the customers. From the human resources. From the international structures. from the raw materials. From the govt sector. From the community. Economic condition of the country. technological Sector. Financial sector. Challenges can be divided into two areas: o Task Environment: Where orgs are directly getting affected while interacting. ExEx: industry, customers, human resources, international sectors, raw material sectors. ▪ Interaction with Industry Sector: CD business got affected by introduction of Netflix; Telecom industry was affected due to introduction of Jio ▪ Impact of marketplace: Market is my customers. Gen C customers (born after 1990s) have different needs; they are more into social networking, mobile phones, etc. Needs are getting changed. The org would get affected. Ex: Orgs like sports, toy shops. ▪ Impact of Human Resources: There is huge demand of skilled people. Quality and skilled manpower is required for growth of org. If there is big gap between demand and supply, then it is affecting the org. Ex: People going from Bihar to Punjab, People from India are flying to Dubai. Orgs have to thing how to retain challenge ▪ Impact of International sector: Orgs as whole are depended on each other. In exports, etc. Ex: UrbanClap services Setup of manufacturing business in China, R&D team is extremely good. Other orgs who are not in China won’t get the competitive benefit. Raw material, labour is available in huge specially now for pharma sector. ▪ o Impact of Raw material Sector: Ex: Manufacturing of Aluminium alloy disrupted the Can market and the steel industry market got affected General Environment: The sectors which the orgs don’t interact directly and not get affected directly. ▪ Government Sector: When govt changes rules and regulations for the interest of people and the country, many orgs get affected. Ex: AntiDumping policies (duping means storing and selling in other countries, this policy says, bring only when demand is there, don’t store). Ex: Scrapping of vehicles in India (New demand creation, the spare part manufacturers demand will go down as if vehicles are to be scrapped every 15 years, there will be no need for repairs, replacement much) ▪ Social Cultural Factor/Community: Protection of Natural resources. Like water, energy resources, petroleum products. Govt is pushing to start with alternative resources OSD_Session 07 UM21351_Pratiksha Dhar ▪ ▪ ▪ Ex: Introduction of Electric vehicles - have to setup charging stations, other changes, etc.; Ex: Nike going green – other players in shoe industry may have to rethink) Economic Conditions: The economic conditions of the environment impacts on how the org takes decisions Technology sector: In medical sector innovations in technology where risks are coming down – best to best hospitals are getting technology oriented. If professionals don’t get updated then their services will not be in demand any more Financial Sector: Banks are the lenders, especially the nationalised banks; due to some events, they have become very strict and included lot of paperwork. Various new private lenders have popped up Categorisation of Organisations 1. Based on Complexity: o Simple: Family-owned business, roadside stores, hardware stores o Complex: Global companies, MNCs 2. Business operations wise: o Stable Business: Orgs which operate in a stable environment. The env doesn’t pose much threat to the organisations. Ex: Universities o Unstable Environment: Continuous challenges from env. Ex: Telecom industry, sector with lot of technological changes Based on above combinations, we can find uncertainty level • • • • Stable+ simple: uncertainty less (family-owned small orgs, container manufacturers) Simple + Unstable: Uncertainty higher Complex+ stable: high due to complexity Complex + Unstable: Uncertainty is very high (large org and unstable env) Ex: Telecom, large healthcare industries How to overcome environmental challenges: - - Create New Positions: Many orgs create new positions in structure to address these challenges. Ex: Appointment of Chief Compliance officer By structural differentiation and integrations: o Integrations: Combine few positions and make one. o Create some new positions with specialised sectors By planning By forecasting By being responsive to the new challenges OSD_Session 07 UM21351_Pratiksha Dhar What are the strategies to control External Environment? 1. Acquiring many orgs on ownership basis: Acquiring in similar industry. Ex: Big established orgs buy new start-ups that will add value and won’t be a challenge in future 2. By creating joint venture partnerships: 50% partnerships, both will be jointly working for gain; they will not compete 3. Lock and Key Players: Choosing the key players and lock them. Org 1 gets their board of director to be director from Org 2. Directors are common in both the organisations. The risks and challenges will get lessened. 4. Pro advertisements and public relations: Create own brand, chances of customers deserting will be less 5. Changing where you do business: If my env is creating problems, change the place of business. 6. Use political activity and regulations: Must be constantly in touch with policy making people. Tell them which policies might suit the org; try to see that the policies are brought out are not against your orgs. Ex: During budgets, many orgs lobby in the process 7. Join Trade Associations: Aa a combined force, represent to the government. As an association if we go to govt, they will listen; not if we go individually. Ex: Industry Associations 8. Avoid illegal work OSD Lecture 8 UM21351_Pratiksha Dhar How cultures and values and ethics affect the organisation’s ability? Culture: The values, norms, and the guiding beliefs and the understanding the organisation have. Everybody follows the culture. Culture is made keeping in mind the performance of organisation. Ethics is also part of org. As an individual we all have some ethical values. Similarly, org has some ethical values. How is culture divided? Culture is divided into two areas: • • Observable Underlying. How is the culture formed? Consciously. Org forms culture consciously by keeping in mind org goals, purposes and ethics and beliefs of the top management. Beliefs will give rise to my behaviour. How is org getting benefitted from culture? If culture is aligned with your purpose of org, then org becomes more efficient and effective. Purpose of Culture • • Internal Integrations: Collective identity of people who are working in the org External Adaptations Observable Characteristics: - Rites and ceremonies: Ex: Walmart Cheer Stories and Myths: Ehen you join an org, some people who are already working, they would start telling many stories about the org. Power Relationships: Who is an influencer, who is in power of what. Ex: Separate restrooms/cafeteria for top management in orgs Control System: How the people of the org is controlled. Ex: Quality control systems, Finance systems; people in the org can’t bypass these systems. Org Structure: What kind of org structure. Whether formal, centralised, decentralised. Do they want to control everything? Are they very disciplined? Symbols: The behavioural symbols Based on culture the org design takes place in following ways: 1. Adaptability Culture: Org has strategic focus on external environment Ex: The internet companies focus more on their customers o Whole is more important than parts. Departmental goals are present, but the employees are also well aware of the one bigger goal of the org. Alignment of their goal with org goal is closer. o Equality, Trust and Primary Values: They care for the people of org whatever position they hold in the org. People feel more secured, happy, cared; hence people get inspired. Structure is like network or matrix, not hierarchical o Culture encourages risk taking: Allow/ Tolerate the mistakes of the employees. Mistakes are seen as learning. Risk taking ability is more, hence employees become innovative. OSD Lecture 8 UM21351_Pratiksha Dhar 2. Mission Culture: they serve specific customers who can impact to large extent the profitability, the goal of the org. Specific people are assigned to them (Differentiating workforce practices, DWP. Ex: Customers bringing in 80% revenues are A+ Customers, so A+ employees are assigned to them). 3. Bureaucratic Culture: Org beliefs very disciplined culture. This culture makes the org efficient too. Ex: Punctuality in office timings 4. Clan Culture: Encourage people to be more innovative, creative. Ex: HCL (People first, Customer second) Ethics Every person comes to an organisation with their own set of ethics. Ethics forms our behaviour. Which adds up to the culture of org How ethics get build up in an individual? - People know about history of India; some of the things we start believing and liking. This history leads to development of social morality. Whatever we like, we make our principle; or behaviour gets changed accordingly. What I am believing and what I should believe which makes it our identity and this identity helps us create our image. The first impression is based on how we form our ethics. Individuals from their ethics and value system donate, for development of slum areas – same way an org does. Ex: EY. Mindtree: 95-95-95: 95% of info should be known to 95% of people at 95% of time How ethics work in large org? Normally large organizations have huge networks. Even if there is country head is there for each branch of company, still the H.Q. takes the responsibility (The Chief Ethical officer is appointed) of ethics code to ensure that everywhere the ethics is followed correctly. Social audits is done to make sure right ethics is followed or not. If ethics is not followed in orgs, the employee would lose the job; however talented he/she is. OSD_Session 9 UM21351_Pratiksha Dhar How innovation and change the organisation? Can affect both positively and negatively. Innovation is inevitable. Define innovation Innovation is something that is different from existing. Areas like technology, strategy, product, culture, etc. Why orgs need innovation? - Huge competition faced by organisations in market. Competition is because to have more customer base, profit, revenue, sales. Every company strives for this. Depends on org what kind of changes is brought in products/services to create need of customer. Create need or go with the needs of customer. Organisations strive for innovations. Categorization of Innovation: - Episodic Change: In products/services, we make small changes to meet feedback of the customers. They are not much frequent; relatively stable. Continuous Change: Bringing out a new product/service all together. This is frequent. This is done because of customer feedback, technological change and market. Not very stable. Ex: Smartphones Disruptive Change: Totally change the way the things are done. Beyond imagination of competitors. Ex: Jio services (brought total disruption in Telecom market) What to change? Which areas to change? There are 4 areas to change: - - Technology Area: Org gets new technology, which would make org cost effective, increase productivity, sustainable practices, improve communication channels if tech is used with right kind of structure. Decision making can be faster and efficient. Product and Service area: new products and services. Ex: Electric Vehicles. (New innovations for cost effectiveness, lesser complications, sustainable, less pollution) Strategy and structure area: Change in the policies, systems, processes for running org, manufacturing the product; bring change in that Culture Area: Values, attitudes, beliefs, ability, ethics. Change your belief system. Commitment is required from everyone for cultural changes as belief system is being challenged. Top management has to be role model. Start change from the top. How the changes happen? And what makes changes successful? • • The orgs get in touch with the environment from where it gets a lot of ideas, like from professional orgs, associations, etc. Org gets feedback from its stakeholder about their needs, products, services, gets ideas what is happening in the world. Putting above two together, the org thinks to incorporate innovation in products/services. And then they come out with some decisions. Once the results come, new cycle again starts (Ideas -> New services/products -> Go to market -> Customer usage and feedback -> New Ideas) Cultural change and technological change if go hand in hand – best results OSD_Session 9 UM21351_Pratiksha Dhar Mechanistical Orgs are stiff to innovations: They are formal orgs, guided by rules and regulations. When something new is thought of, they think about new rules. How technological change is brought in Orgs? - - Switching of structure: Bring some structural change where the structure can make the org more effective and efficient and to adopt the new technology in the org. Ex: In Philips Manufacturing company, product department has come out with new products. They brought all the people from manufacturing and formed cross functional teams to create process and system of implementing to manufacture new products R&D Departments: All big organisations like pharmaceutical, automobile. Without R&D, cant bring in success. R&D does continuous research By creating venture teams: Small team of cross functional people in organisation and a goal is given to them. By making a Bottom-up Approach: You have frontline people working in org. They are the best people to suggest ideas. These ideas if found suitable are then implemented by these people. Ownership of implementation is also to idea creators. How change in new products and services can be encouraged? • • • • Specialisation: By creating specialised depts for product development, like R&D Department. Coordination of marketing, operations and R&D Dept. o R&D coordinates with external technology depts to find out what new is happening and how this new thing can be incorporated in org. o Marketing dept talks to the customers/stakeholders, take feedback to find out their need. Continuous market feedbacks. o Operations/Production Team: How to feasibly produce the product/service Boundary spanning: Not only coordinating with depts inside of org, but going beyond the boundary of org. Horizontal Coordination: Marketing, R&D, Operations are horizontally coordinating, they are different. Open Innovations: Ex: If org is looking for a logo, they advertise to market for ideas (crowdsourcing). You can know what your customer feels like. Ideas from opinions of public. How to bring the change in cultural area: 1. Diversify: interacting with various cultures and belief systems will make you open. Seeing the effect is more effective than hearing. 2. Demonstrate: lead by example. 3. Change: Change should come from within. We should not change others. Barriers of Change: 1. 2. 3. 4. Excessive focus on cost: Don’t get sensitive based on cost. See the benefits in goals. Show the benefits to people: Lack of coordination: Buy the people’s note. By involving people in change process. Fear of loss: They are apprehensive about change as it might lead to failure. OSD_Session 10 UM21351_Pratiksha Dhar Organisations are thinking how they can leverage the technology to meet the changing needs of the customer. Areas in workplace where technology can be useful. Why we use technology? It makes the process faster. Gives consistency and precision Makes product cost effective. Tech helps org to meet customer needs How is technology helping customer meet the needs? Technology is of 2 types: Core Technology: Directly impact the product manufacturing. Ex: Operations like inspection, assembly line, material handling Non-core technology: Not directly impacting. Ex: Accounting, HR, R&D Types of Manufacturing Processes: - - - Unit production (Small batch): o when variety of products is more o more manual o Need skilled people o Not many supervisiors /management people, but workers o Workers take decisions immediately, more authority is given operating workers Large batch/Mass manufacturing o Manufacture components for longer period based on the demand o More economical o Time lost in changing of manufacturing units is less as frequency of change is less o Org knows from experience and forecasts, so storage is more – inventory cost is more in long run o Less no. of skilled people o Structure more centralised Continuous batch o Automatic o Chemical manufacturing plants, pharmaceuticals o Need less skilled people o Need supervision o No. of management level people more o Less skilled workers o More authority is given operating workers OSD_Session 10 UM21351_Pratiksha Dhar Change in structure, technology and mapping a strategy. Alignment of strategy, technology and structure needs to be done correctly. With the advancement of competition, the demand and choices of customers have changed drastically. To cater to the need, organizations go for single batch production, but since Technology and automation are also needed, companies are going for digital factories. CAD- Computer-aided design- Automatically, the design will be sent to the Dnc machine, which will create the design directly. This will lead to a more precise design. CAM-Computer aided manufacturing- Makes product, makes product handling equipment (like robots) helping in manufacturing automation. MPM – Manufacturing process management- It simulates the environment. It will show the design of the final process and output before the process begins. This will lead to minimizing loss. Integrated information- Everything related to equipment, raw material required, and other details PLM-Product Life cycle management: From the point when you generate an idea, the simulation will be done, and till the output then maintenance, i.e., the whole life cycle of a product, will simulate to show every detail of the product, its performance will be demonstrated through this mechanism. It helps in cost saving. Flexible manufacturing- digital technology help in producing a variety of equipment. In small batch production, it is helpful. Lean manufacturing: It optimizes the process and saves waste. Earlier, it was reported that the wastage was 20%. Lean manufacturing is a Japanese technology predominantly seen in the automobile industry. It comprises of the following process• JIT(Just in time)- When suppliers near the assembly line demand the product in just tin time • SMED-Single minute exchange of die)-for every component, individual dies are used uniquely, Which are heavy, time taking(1 day) when changing dies happen. Now it has been reduced to 1 minute for changing the die. The SMED process is generally needed in the industries where product customization is provided for the customer. Technology in services: For eg.-Mainly in the healthcare industry, Technology has created a significant impact. From online consultancy to booking medicines insurance, Technology has integrated the service center. Characteristics in the service industry-Earlier Highly skilled workforce requirement but with Technology now average skilled workforce can also do the job. For ex-, in the supply chain process. OSD_Session 10 UM21351_Pratiksha Dhar How to design service organization – • Service industry are not that much big in size • Often service locations are kept close to the customer’s place • Service sector require technical core employees • Decision making is decentralized • Knowledge, coordination, interpersonal skills are required for employees • More informal structure • Every employee works as an entrepreneur OSD_Session 11 UM21351_Pratiksha Dhar We will discuss about how information can help achieving goals of an organisation. Individual or org that is rich with information has more power and is more successful Information is a vital role when it comes to org because this data helps to make more creative and bring more ideas. It generates more ideas in you. It helps to come out with innovative ideas. It is not the information that helps you but the correctness and the time it reaches decides the importance of the information. Evolution of organization applications in technology: Top Management Adding strategic value Level Decision making and control Operations Low High How transparent and how secure are your communication channels.This information helps org to ensure that customer gets the right product/service which impacts the growth of the org. Normally we generate a lot of data on day to day life. Some datas are relevant, some datas will mislead others, some data might be non-existent. At more senior level, data becomes more complex. If I do not have any demand – should I go for closure, should I outsource, should I change my product/service. What is information reporting System? Generating informations and reporting it. Whoever is generating the information and reporting it Executive Reporting System OSD_Session 11 UM21351_Pratiksha Dhar DSS CEO will take decisions. DSS is, CEO will be interested to know how much close I am to mu business goal. Are we competitive? Are we good enough Why are sales coming down What is the vehicle maintenance Merger & Acquisition based on DSS Org end of the year, CEO will not be knowing that 50 components have not been manufactured. At the end of the year, org will not achieve the sales and revenue.. The trust will come down and the org might lose the market. If customer talks not good about the organisation, org might los eon future customers. Management Control Systems How management controls systems Rewarding system Operators not only producing but is responsible for producing the right products. Immediate actions from information help to minimise errors, loses, specially dynamic dashboards. Types of Network Intranet Internet Extranet Security of Data, Gateway of passing of data. Security against misuse of data E-Business: Business that is taking place in a computerised background, also sell their products/services on e-platform. Earlier there were joint ventures, now they are bringing it as division of the org. Now the org is going one step further and making it totally integrated and making it part of the division. This is possible because we are getting information and we have the technology to keep the business in flow. OSD_Session 11 UM21351_Pratiksha Dhar Two approaches to Knowledge Management: • • Codified Tacit Strategic approach 2: Strengthening coordination with external partners • With information technology: o Supply chain management o Integrated enterprise o Enhancing customer relationships o eBusiness organizational design It’s impact on Organizational design: o Smaller orgs o Decentralized org structures o Improved horizontal coordination o Improved inter-org relationships o Enhanced network structure
