Affecting change in an organization is a difficult task that most leaders will endeavor at some point in their career. The Smith & Falmouth scenario illustrates the challenges a leaders faces when entering an established culture and attempting to affect change. Oftentimes, to bring change a leader must restructure the organization to help shift stalwart paradigms. This paper covers the methods of control employed at Smith & Falmouth and examines ways to affect change in the organization through restructuring, and a change in management practices.
Overview Smith & Falmouth
Figure One, S&F Organizational Structure
Smith & Falmouth (S&F) is a mid-size organization specializing in tele- and mail order shopping. Recently, S&F started an e-tailing division to enter the Internet shopping market. The e-tailing division is crucial to S&F??™s future. The S&F Online CEO, Irene Graves, has put in place ???a web development team, a logistics team and a marketing manager to coordinate marketing and logistics operations with the parent company??? (University of Phoenix, n.d.) Irene Graves hired a Chief Operations Officer (COO) to oversee the e-tailing division and make certain the division reached its strategic goals; figure one illustrates the current organizational structure of the e-tailing division. The management is resistant to the arrival of the COO and subsequently forms alliances, and demonstrates behavior and attitudes that are a detriment to organizational success. The COO must understand the current methods of control, how to gain influence over the team, and decide which organizational design will enhance S&F??™s strategy. Current Methods of Control
Influence is an important part of organizational success. Some forms of power are position-centered, but to have true bearing over an organization, an individual must be able to influence peers, subordinates and superiors. In the Smith & Falmouth scenario, the COO must devise a strategy to influence the Project Manager (PM), Marketing Manager (MM), Logistics Manager (LM) and their teams to have an effect on operations. The entire team is in charge of making sure the new e-tailing division of Smith & Falmouth is successful, the duty of the COO is to oversee operations, influence outcomes, and guarantee the team meets objectives.
Types of Power & Influence
For general purposes, power is the ability of one individual to influence the behavior or attitudes others. For the COO to implement change successfully, she must use her power, or the influence power of others, to move the team toward goals. The COO must determine she can influence, and who in her coterie can persuade key players outside of her realm of persuasion. Individuals use power to influence; however, it is important that one use the right tactics to gain affect forms of influence. Herbert C Kelman, a renowned psychologist and former Harvard alumni, (Harvard University, 2008) proposed that there are three types of influence: instrumental, internalization, and personalization.
* Instrumental. This type of influence is using some tangible award or threat, the individual will respond, but only insofar as to gain the reward or avoid negative outcomes.
* Internalization. Here, the influencer can strike a chord with the target by tapping into greater underlying or values.
* Personal identification. When the target wants to be similar to the agent, they will behave in a way to please the agent; this taps into the targets need for acceptance and esteem. “Maintaining a close relationship with an attractive agent may help to satisfy the target person??™s need for esteem from other people, and becoming more like an attractive agent helps the target person maintain a more favorable self-image” (Yukl, 2006, p148.)
The goal of the COO is to use her power, or the influence of others, to gain the most effective type of commitment from the organization. Researchers have identified various forms of power such as (a) reward power, influence based on an agent??™s ability to bestow rewards (b) coercive power, wherein the target “complies in order to avoid punishments” (Yukl, 2006, 148) and (c) legitimate power, wherein people comply because they believe the agent has the right to give directives. These three forms of power garner low levels of commitment from targets. For the COO to successful lead the e-tailing team toward S&F goals she must gain higher forms of power; (a) referent power, wherein an individual wields power because of respect and admiration, and (b) expert power, power gained demonstrations of knowledge and expertise. Research shows ???that expert [and] referent??¦power were correlated positively with attitudinal commitment by subordinates, whereas reward and coercive power were correlated with behavioral compliance??? (Yukl, 2006, p161.)
Thus far, the COO has not had an opportunity to develop referent or expert power, therefore, attempts to use less effective forms of influence (such as coercive or reward) alone leads to low-level commitment from the team. To increase influence, the COO must choose an ally in the organization to boost her ability to influence.
Of all the managers at S&F Online, James Argyle, the PM, has the highest level of influence over the other teams. The team admires James and his success at managing projects for S&F has given him expert power as well; the COO must win over James by developing a relationship and applying multiple forms of influence. For example, by praising James efforts over coffee the COO increases her referent power, whereas creating guidelines and procedures exercise her legitimate authority. As the COO??™s influence over the PM increases, James in-turn, influences the rest of the team to meet S&F??™s goals.
Current Departmental Culture
Business research and literature generally defines the culture of an organization as the values, behavior, and norms in an organization. The management in place at S&F has created a strong culture, spearheaded by the dynamic personality of James Argyle, and the innovative nature of their vision. ???Just as people??™s personalities tend to be stable over time, so too do strong cultures. This makes strong cultures difficult for managers to change. When a culture becomes mismatched to its environment, management will want to change it??? (Robbins & Judge, 2007, p595.) Many positive factors exist in S&F??™s culture; however, as the COO grows her alliance with James the communication flow becomes less open. As the relationship increases between the two the organization realizes greater successes, yet the alliance creates a decrease in communication and influence between the COO and other key managers. Essentially, as the alliance between the COO and the PM grows, the sense of teamwork between the other key managers shrinks.
Behaviors & Attitudes
The behaviors and attitudes in an organization directly affect job satisfaction, which in turn affects performance. Current behaviors tend toward alienation; synergy is difficult to come by. On the onset of the change, the PM and his team believed that an introduction of a figurehead to steal the credit was hurting productivity (University of Phoenix, n.d.) The attitudes and behavior are reflective of James leadership style, centered on inspirational approaches and referent power. The drawback of James approach is that his team??™s performance ebbs and flows with his attitude because they look to James to set the tone of the organization. A strong resistance to change also exists as the team fears loss of power, influence, position, and the unknown. To focus the team there are two tactics that the COO can employ to improve the e-tailing culture and likelihood of success. The first tactic is to find the right organizational structure, and the second tactic is to ensure the right types of management practices are set into place.
Organizational structure has a strong impact on the effectiveness of the organization and the right type of organizational structure depends greatly on the strategy of an organization. For example, Southwest Airlines strategy is to be the low-cost airline and their organizational structure emphasizes efficiencies rather than innovation (unless the innovation is on how to be more efficient.) Conversely, an organization like Google must constantly innovate to keep its technological edge on new competitors in the market and Google??™s structure is less rigid and more organic. S&F must focus on innovation to grow their relatively new e-tailing division. S&F??™s current organizational structure is a typical hierarchy of centralized decision-making; upper management makes decision and passes that information downwards to their teams.
Figure One, S&F Organizational Structure
Figure Two, S&F Team Structure
The current strategy of S&F is to increase market share and achieve break-even through aggressive marketing and value-added services (University of Phoenix, n.d.) To achieve this goal the separate departments need to work closely together. Currently, S&F has organized their e-tailing division in a centralized structure, separated by functionality. The best structure to carry out S&F??™s vision is a team structure, decentralizing the decision-making process to enhance innovation. Figure Two illustrates the recommended structure for S&F e-tailing division. Using cross-functional team structure to tackle S&F??™s strategies will help increase communication, innovation, and personal commitment to achieving objectives. Furthermore, cross-functional teams allow specialist, such as logistics team member, to be generalist as the team works together toward a common objective. Figure Three illustrates the composition of the cross-functional teams, which report to the leadership team. The leadership team consists of the PM, PM, and MM. Now, instead of a separation of functionality managed by individuals with potentially competing objectives, project teams focus on a single project, and report to the
Figure Two, S&F Team Structure
leadership team that guide and manage project focused teams. The leadership team meets with the COO and together they monitor and encourage the project teams.
Effect on Teams. When cross-functional teams work together, functional barriers that exist in a centralized, functional organizational structure break down. Whereas the original organizational design had logistics on one side and web development on another, strategically these departments need to work together to develop ideas and systems that include multiple perspectives.
Effect on groups. Teams are an organized collection of staff brought together to achieve a common task or objective; a group is an information can simply be a collection of people. Information groups in the organization can form alliances that can help or hinder effectiveness. Oftentimes, in a functional organizational structures, groups form organically by function and an ???us against them??? mentality arises. Using a cross-functional team structure will lessen the perception of separation by focusing on the team aspect of cooperation.
Effects on individuals. In a large organization with a functional organizational structure, individuals can grow myopic, and feel less satisfaction because there are fewer short-term wins. According to the Encyclopedia of Applied Psychology, (n.d) individuals in cross-functional teams feel more valued because teams focus on smaller tasks and experience a sense of accomplishment from meeting team objectives.
Effects on organization and its future. Introducing a team structure and eliminating the traditional functional structure can lead to confusion, leaders need specific training and management skills to direct cross-functional teams effectively (Encyclopedia of Applied Psychology, n.d.) The remainder of this paper focuses on the management practices most effective in dealing with cross-functional teams so the effect on the organization will be positive.
Effective Management Practices
Managing cross-functional teams requires a different management styles. The leadership team (consisting of the PM, LM, and MM) become coaches and mentors rather than traditional managers. The leadership team must empower the team leaders to tackles challenges, make decisions and be available to keep them on the right track. From a management perspective, this approach means the leadership team has more time to focus on the planning and visionary stages of management rather than the reactive, task-based aspects of management.
The pitfall of managing cross-functional teams is that they can soon get out of control; it requires diligence, team-building exercises, goal setting, and conflict resolution (Berkeley, 1998.) The most effective leadership style in dealing with cross-functional teams, especially given the culture of S&F, is a transformational, people-oriented leadership style. The job of the leadership team is to keep the project teams excited about their objectives and vision for the company. The research on charismatic and transformational leadership indicates that a clear and compelling vision is useful to guide change in an organization??? (Yukl, 2006, p 295) and this style will help facilitate the transition. Furthermore, a transformational leader can create a vision that offers a sense of continuity during the change process.
Encyclopedia of Applied Psychology, (n.d). Organizational Structure. Retrieved from XRefer XML database.
Harvard University.? (2008).? Herbert C. Kelmans website.? Retrieved from http://www.wcfia.harvard.edu/faculty/hckelman/
Robbins, S. P., & Judge, T. A. (2007).? Organizational Behavior. Retrieved from? eBook Collection LDR531.
University of Phoenix. (n.d.). Smith & Falmouth Simulation [Computer Software]. Retrieved from University of Phoenix, Simulation, LDR531 website.
Yukl, G. (2006).? Leadership in organizations. Retrieved from? eBook Collection LDR531.