Module ; Managerial Effectiveness

( please answer separately each part of question and labeling it)

(a) Comment critically on the nature and value of the investigation. What difficulties does such an investigation present and how might these difficulties be best overcome?

(b) State clearly the conclusions drawn from the investigation and discuss the extent to which it reveals practical applications of organisation theory.

(c) Explain and justify the specific recommendations you would make to the top management of Helgaton Ltd as a result of the investigation.

CASE STUDY: HELGATON LTD: ORGANISATIONAL THEORY IN PRACTICE

Laurie Mullins and Ian White

This case study presents the result of an empirical investigation that attempts to assess the extent to which organisation theory has any practical applications for managers in a modern commercial organisation.

BACKGROUND

The overall mission of Helgaton Ltd is to deliver quality business products and systems throughout the UK and Ireland. The company employs more than 4000 people in nearly 50 locations. In order to help in the drive to fulfil the mission, there are four stated 'Common Goals' related to customers, quality, profitability and employees. These Common Goals are intended to provide central direction and focus for departments and the individuals within them.

Emphasis on quality

The continuing desire of Helgaton Ltd to become a Total Quality Company is the embodiment of corporate values. Quality is a basic business principle and means providing customers with innovative products and services that fully satisfy their negotiated requirements. This philosophy is reflected for example in terms of the BS 5750 status awarded to Helgaton Ltd by the British Standards Institute.

Tasks, goals and objectives

In consideration of the overall mission of Helgaton Ltd, the corporate plans are embodied within a series of functional Tasks, Goals and Objectives (TGO). Each individual employee receives a TGOwhich is a translation from the functional level into the targets and actions which are relevant for the individual job role.

Restructuring

Helgaton Ltd is also a change-oriented company. During 1992, a major restructuring process was undertaken. In order to provide a more customer responsive structure a whole layer of middle management was removed from the customer service division. Attention was also focused on developing closer team working among sales and service operations rather than operating as separate divisions. A large financial investment had also been made in implementing the concept of autonomous work groups.

THE SITUATION

An investigation was undertaken with the aim of addressing the practical applicability of organisation theory at Helgaton Ltd and the extent to which it meets the needs of the manager. This involved the analysis of published material already available within the company (secondary data) and information generated firsthand from personal interviews with managers (primary data).

Secondary data

Helgaton Ltd produces an enormous amount of literature aimed at informing and aiding the employees. This literature may be seen to reflect, in part, the management and structure of the company. Some examples are as follows.

Company manuals. Company manuals were found to be very specific in terms of policy and procedure. For example, departmental manuals explain policy in infinite detail and an accompanying manual details every step required in carrying out this policy. Employee manuals are in similar detail and include an analysis of the required manual skills.

Autonomous Work Groups (AWG). A comprehensive set of documents has been prepared by the company which set out: the AWG environment; the need for change; what is the AWG; the vision; limits of responsibilities; benefits to the individual; benefits to the company; and hopes and concerns.

Organisational processes. The recruitment and selection process is based on scientific principles. Detailed Job Profiles are built up and for interview purposes comprehensive Candidate Profiles are constructed. If suitable candidates have the right technical qualifications and pass the appropriate psychometric testing, they are matched against the job profiles. Other 'tools' include detailed processes intended to help employees in problem-solving and to improve quality.

The employee survey. This survey and analysis is carried out every year and is undertaken by an independent research company. The survey involves a wide range of questions related to subjects such as management systems and styles; working conditions; training; career development; pay; benefits; job security; team spirit; and overall job satisfaction. The same research company also provides a comparative analysis related to other companies that they survey. Results of the survey are confidential within the company but currently overall job satisfaction within Helgaton Ltd is around the 55 per cent mark.

Primary data

Although secondary data may provide an important source of supporting information it does not by itself provide a sufficiently sound basis on which to formulate any conclusions. In order to examine further the application of organisation theory, it was necessary to obtain more specific and detailed data. For this purpose use was made of the semi-structured interview with managers.

The survey population

The broad categorisation adopted was that of a manager and non-manager dichotomy. Because of their position and experience, managers were considered to be the most appropriate population for the survey and the resulting data more valid and easier to generalise. The population was quota sampled. Attempts were made to balance, as far as possible, the demographics, location, and seniority and experience of the managers. A further consideration was the availability of the managers' time. Details of the interviewee statistics are given below:

Pilot study

In order to test the reliability of the interview, a pilot study was undertaken involving a representative member of the population. This pilot study highlighted two major issues.

Many of the questions were either too open or too closed and needed to be refined.

Initially the responses were handwritten. This was both costly in terms of time and, more importantly, revealed the risk of missing vital pieces of data. It was decided therefore to tape record the interviews and to transcribe the results at a later date.

In order to try to avoid the managers gaining a feel for any particular sort of responses expected, the questions were arranged so as not to be sequential. The revised list of questions used in the interviews is given below.

1 Do you feel that there are good channels of communication within Helgaton?

2 Do you have a clearly defined job role? If so, where is it laid out?

3 What do you feel motivates Helgaton employees?

4 How do you go about achieving your goals at work?

5 To what extent do you feel a change in technology would affect the way Helgaton operates?

6 How do you plan your work?

7 Why do you believe Helgaton has chosen the empowered working group as the way forward?

8 How would a subordinate employee describe your management style?

9 To what extent do you feel teamwork is important to (a) Helgaton and (b) yourself?

10 Do you feel Helgaton's organisational structure is hierarchical?

11 To what extent do you see Helgaton Ltd as belonging to a larger environment?

12 Do you perceive there to be many technical requirements to your job?

13 What are your personal goals at work?

14 What do you feel is the purpose of training an employee?

15 What do you believe to be the basis of promotion at Helgaton?

16 How well do you see Helgaton's management respond to change?

17 To what extent do you plan the work of others?

18 Can you rate the following five factors in order of importance to (a) Helgaton (b) yourself? Groups and Leadership; Communications; Output; Motivation; Job Design.

19 Do you feel that an individual's behaviour can be predicted and if so, how?

20 Do you believe there to be a clear division between Helgaton management and subordinates?

21 What other roles within Helgaton have you been involved in?

22 Do you feel Helgaton is keen to understand what satisfies an employee at work?

23 Do you feel committed to a common purpose at work

Collecting the data

Interviews lasted on average just over one hour, were arranged when managers could best spare the time and took place over a period of about one month. Managers were informed that the interview would be taped and no one objected to this. The interview involved asking the questions, elaborating and probing where necessary, and finding out more about the manager's background, in case this might affect any of the responses. For the same reason the specific purpose of the interview was not explained to the managers. The tapes were then transcribed and tabulated.

Results of the interview questions

(Note: some of the questions prompted more than a single response, and so percentages may total more than 100.)

1 Channels of communication. 33 per cent argued that channels of communication were good, 53 per cent that they were poor and 14 per cent argued they were both good and poor.

2 Clearly defined job role. All managers pointed to their Tasks, Goals and Objectives (TGO) as evidence of a clearly defined job role. The TGO relates the four company goals to the employee. The most senior managers clearly stated the relationship between company goals and that of the individual. Other managers argued that the TGO provided only an overview of their job role. It was also noted that the lower down the organisational structure, the more restrictive the perception of the TGO.

3 Motivation of employees. 73 per cent stated money as a clear motivator. Sales and operations managers claimed that motivation was also dependent upon function: sales staff being motivated more by money and service staff by job satisfaction. Service and personnel managers claimed it was pay. Only the most senior managers directly referred to the employee survey carried out each year.

4 Achieving goals at work. Responses were of a general nature such as: 'by attention to and following my TGO'; 'by hard work'; 'whatever done at work doesn't really matter so long as it is seen to be related to the four common goals'.

5 Effects of technology. The responses made clear that Helgaton Ltd is a technology-driven company, for example the increasing use of mobile telephones. However, two managers indicated that the sole reason for the introduction of technology is to increase productivity. The problems of introducing technology without the necessary full training were also pointed out.

6 Planning of work. 60 per cent specifically stated that their work is planned by their diary. Management meetings at regular times in the month and regular meetings with customers, for example, largely dictated their movements at work. One manager estimated that 50 per cent of time was dictated by the diary.

7 Empowered working group. The importance of quality (including the work of Deming) and the influence of Japanese working methods were cited as examples. It was widely believed that the benefits to the customer, employee and business results justified the large expenditure on this concept. Many managers also highlighted the autonomous work group concept as an example of the application of organisation theory.

8 Management style. When managers were asked how their subordinates would describe their management style all apart from one (93 per cent) focused on terms such as 'fair', 'democratic', 'supportive', 'honest', 'caring' and 'humanistic'.

9 Importance of teamwork. All managers bar one felt totally committed to the importance of teamworking and believed it was the only way the business could move forward. The autonomous work group concept involved all employees including managers as well. The increasing attention given to team working was welcomed by the sales and operations managers who expressed their commitment to the concept as being the way forward to business success.

10 Hierarchical structure. 67 per cent indicated that the structure was not hierarchical in terms of specific functions. However, 47 per cent argued that a hierarchy still existed within Helgaton Ltd or within particular functions. One manager suggested that 'the principles of Taylor still exist within Helgaton'.

11 The larger environment. Although managers appeared to recognise that Helgaton Ltd was part of a larger environment, responses tended to identify only broad elements such as the 'Green' issue. There were no responses which referred to particular environmental factors influencing behaviour in work organisations.

12 Technical requirements of the job. All claimed that a high level of skill is needed to undertake their job role. The customer service managers had all come through the ranks and started as service engineers. At that level technical requirements are high but at management level only a broad technical knowledge is required; business skills are more important than mechanical skills. Non-service managers also recognised the need for business and management skills.

13 Personal goals at work. 47 per cent claimed that their only goal at work was to achieve the targets set by the company or to be the best region in terms of customer satisfaction. No conflict between business goals and personal goals was revealed. However, only senior managers clearly stated the relationship between the company goals and those of the individual. Some managers had targeted future managerial positions in accordance with the company succession planning programme but no details were disclosed.

14 The purpose of training employees. 87 per cent believed in the principle of training employees so that they become more efficient. 53 per cent recognised the importance of development of the individual as a person, but this was a secondary feature. One manager quoted the principle of 'self-actualising them'.

15 Basis of promotion. In the majority of cases, managers clearly stated 'merit' or 'ability' as the overt belief. However, the 'if your face fits' syndrome was also an apparent covert reason. One senior manager argued that with the removal of a layer of management promotion chances were reduced.

16 Management response to change. 73 per cent claimed that they responded very well and some claimed to actually thrive on change. 27 per cent claimed that management has severe difficulty but the implication appeared to be that this applied to other managers rather than to themselves. One manager pointed to the managing change training course offered by Helgaton to help with any problem areas.

17 Planning the work of others. Of the eleven managers with line responsibilities 73 per cent (eight) indicated that they do not specifically plan the work of their subordinates. Instead they tended to agree deadlines to work to and left subordinates to achieve tasks their own way in the given time. The remaining three managers claimed that they planned the work of others in great detail.

18 Importance of factors. Managers were asked to rate five factors in order of importance to both Helgaton Ltd and to themselves (they were permitted to tie answers). Results were then tabulated, as set out in the table opposite. For each heading, the first column shows the order of importance, the second column the importance they saw Helgaton Ltd attaching to each factor, the third column is their own ranking of the factor, and the final column looks at responses which ranked the same for both Helgaton and the manager.

For example, according to nine respondents output is a factor that Helgaton would rate as number one importance. Seven managers rated output as their highest priority and of these seven, four also ranked output as of greatest importance to Helgaton. Thus 57 per cent of those managers who believed output was the most important factor to Helgaton also claimed it was their highest priority.

19 Prediction of behaviour. All the managers believed that the behaviour of an individual can be predicted providing the individual is well known to them. There were, however, no indications of whether any particular behavioural assumptions, for example relating to motivation, job satisfaction or work performance, are made in Helgaton Ltd.

20 Division between management and subordinates. 93 per cent perceived there to be a division to some extent although this may be from a subordinate only view and/or that these divisions were being removed. Two managers further suggested that the division was due, at least in part, to the benefits received by managers when compared with subordinates - for example bonus schemes and choice of company car. One manager stated clearly that there was no division.

21 Other roles within Helgaton Ltd. Within the customer division all nine managers interviewed had always worked in service. The other six managers had varied backgrounds but tended to remain in the same function. All the service managers indicated that possible future moves would still be within service. Although the company promotes the belief that cross-functional moves are possible, this appeared to be a rare occurrence on a permanent basis. 50 per cent had moved on a temporary or secondment basis but only one manager had moved between functions on a permanent basis.

22 Satisfaction of employees. Managers felt that Helgaton Ltd was keen to find out what satisfies employees although some responses suggested this might be only a 'lip-service' exercise. It was only the most senior managers who directly linked their responses to the employee survey carried out each year. 33 per cent highlighted the interest in satisfying the employee in terms of the time and money spent in undertaking the employee survey.

23 Commitment to a common purpose. There was a claimed 100 per cent commitment felt to a common purpose at work. However, the nature of this common purpose varied. Some managers expressed that they felt committed to their TGO, some to the stated goals of Helgaton Ltd, some to their region, some to business results, and some to survival of the business.