The role of management

Before the introduction of the new departments, the span of control for the manager of department 1 was the whole company, but changed into a status equal to the other product managers under the CEO. To escalate matters further, a new CEO was appointed in 1990, following the declining period of Q. The cohesion within department 1 had fostered an informal culture of involvement in job design decision making. That culture weakened as more decisions were taken on a higher level after the head of department 1 lost relative status.

Before he had responsibility over the whole company, but now only the CEO had the position of taking decisions regarding the company as a whole. Eventually, key employees of department 1 and the CEO got into a clear conflict, causing limited flows of information and communication between the parties. Mutual dependency however kept the situation peaceful and stable, since the CEO needed the jobs done and the employees perceived their skills as company specific. In these circumstances no common vision could be introduced or implemented.

Each middle manager had control over day to day operations and guarded autonomy in respect to both the other divisions and the CEO. The result was that the middle managers had freedom to manage, without a clearly defined responsibility. A defining feature of the relationships was a feeling of vertical dependency and horizontal autonomy. As an example the process of budgeting and planning is resented by the departments as it is a mechanism for control. First of all it poses constraints in daily operations, and secondly it is a field of interaction between departments since the gathering of data and presentation is done within department 1.

Both factors are perceived as an intrusion to the autonomy of the departments, and budgeting and planning remains an exercise in guessing solely for external use to deliver to the State Budgeting Agency. Q is a small organisation with a rather informal structure of responsibility and relationships. These factors should in a general sense make Q more adaptable to change than a larger organisation with a formalized structure and procedures. Planned change has however been difficult to implement in the organisational setting described. To show the dynamics at work an example can be taken.

Top management intended to make changes in the organisational structure, making Q consist of three pure product based departments and define the coordinating and support functions as special departments with independent authority accountable to the CEO. The plan was to replace the informal interaction between the subunits with formally defined processes. The change was consulted with the middle managers and key personnel. The involvement process did provide support, albeit to a slightly different plan. The bargaining result was to refrain from making changes on margins that would threaten department autonomy, so peace the department heads.

The changes were small enough for top management to maintain their feeling of control and no sense of resistance was felt in the bargaining process. In the end, the change that was agreed to was not enforced to have any effect on organisation behaviour. If we refer to the force field analysis it can be seen that the drivers to change are relatively weak. The monopoly protection has provided the financial slack necessary to tolerate the ineffectiveness of the organisational culture. In this setting top management becomes a participant in the game of maintaining status within the existing organisational culture of the status quo.

The resistance to change is therefore not confined to the lower levels of the company but is a part of a dysfunctional stability that top management has bought into. The culture and processes described in company Q are similar to those described by Macri?? , Tagliaventi and Bertolotti (2002) for a small Italian manufacturing company. An organisational culture developed where “procedures that limit learning become institutionalized. “29 In Q it became a tacit agreement that the best way to do things would be to limit coordination and interaction.

In that manner employees could create a dependency, prove their exclusive knowledge and irreplaceability within the organisation. The only organisational learning and change that could take place would be local since the units did not respect external authority. The dysfunctional stability that developed in Q is consistent with the idea of an organisation that is stuck in a stationary equilibrium. By definition, there are no internal forces to change. The organisational structure described, seems to have the main objective of avoiding conflict rather than to define a system of coordination and control.

Although the individuals within Q do resist change, the responsibility for strategy and structure lies with top management. In the decade after 1985 Q witnessed a ‘strategic drift’, where external and internal needs changed but were not addressed in the organisational operational mode. The imbalance and insecurity fostered restraining attitudes among employees while the vision of top management was weak. The result was an environment that was static and resisted any learning and development. The quality of working life in such an organisation is low since employees have severely limited possibilities of growth and development.