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cphbusiness
COPENHAGeN BUSINESS ACADEMV
Blbllotok
Lendem""ket 11,4. sal
DK-1119 Kebenhavn K
www.cphbusiness.dk
.4536154502
Henriette Bjerreskov Dinitzen
Lars Krogh Jensen
Organisational Theory
a practical approach
In english by Clem Luxford
1
resolving the exercises in each chapter. To ensure full understanding
of the chapter's contents, each chapter ends with a few discussion
questions.
::'_-:---_-.- .
In addition, the book ends with some major cases and accompany-
historical perspective
ing exercises.
Part 2 Assessment of the corporate strategy base It is important to keep in mind that organisation theory is not con-
cerned with facts. Theories allow for a deeper analysis of patterns
Aims and depth: The reader will be able to assess the company's struc- and systems within an organisation and thus a better understanding
ture and networks in relation to core values and objectives, including of the observed actions.
internal targets for efficiency and flexibility and external objectives,
such as innovation, internationalisation, and partnerships.
The classical school
Part 3 Strategy implementation Organisation design is closely linked with trends and patterns in the
external environment. Therefore, there are also certain historical de-
Aims and depth: The reader will be able to identify different ways to velopments in organisation design. The establishment of factories
change the organisation and identify various reasons for the neces- during the Industrial Revolution, around 1900, represents the start
sity of organisational development. of modern organisation design. We went from small, family owned
businesses, where the focus was local and production was for own
or local consumption, to larger and more complex structures, which
Supplementary material
required a more elaborate command and control.
On the publisher's homepage, www.hansreitzel.dk, there are addi-
tional exercises with thematic proposals for solutions. There will be a The classical perspective had, as a starting point, to build organi-
teacher-forum with access to a selection of the book's figures, tables, sations with a focus on efficiency and used elements, such as bu-
and bullet-points that can be used for teaching. The website contains reaucracy and hierarchy, as central elements of the structure. The
literature and references on the elaboration of certain topics. external environment was assessed as being stable and predictable,
and management's main task was to ensure stability. If the manager
-.----------------~-----------
..
If you visit Jensen's Steakhouse and order their lunch-steak, you are
sure that your plate will have exactly the same food on every time.
Based on the principles of Scientific Management, Jensen's Steak-
house can plan the content and processing of the food. Thus, you
can always be sure of getting a steak to a particular size and qual-
ity, where the potatoes are similar in both appearance and quantity,
and the whiskey sauce tastes as it should. The benefit to Jensen's
Steakhouse is consistent quality and minimal need for intervention
in employees' work, i.e., fewer resources.
ings, or people. The people in the organisation were, if anything, a Today, demands of the market, customers, and employees, mean
necessary evil. Personality, desires, and needs were not expected to that organisations have to be designed to cope with key development
influence an employee's work, and the 'real' organisation was inde- trends.
pendent, whether it was a small trading house or a large industrial
manufacturing company. Globalisation: Developments in technology and communication mean
that customers and suppliers can be located anywhere in the world.
However, this changed during the 1960s, when an increasing focus on The company can exploit geographic advantages by placing parts
people within the organisation, appeared to have a positive impact of the business, where it 'suits best' and should thus be able to
on productivity and motivation. The Hawthorne studies in Chicago handle their duties without any geographical limitation. India has
(Daft, 2007), analysed how workers at a power plant were affected for example, built up such a great knowledge in programming and
by light levels in the room where they worked. The researchers turned computing that many companies choose to place their programming
the lights up and down in the room, and measured the impact of projects with Indian partners. These employees are still a part of the
each change on the employees. What is interesting in the study is organisation, they have the same rights of a work environment and
not that they were influenced positively, so their motivation and pro- rewards, adjusted for national cultural differences, and they must
ductivity increased, but that the positive effect was independent of have the same understanding of quality and service.
whether the lights were turned up or down. Productivity increased,
even though employees were asked to work in near darkness. Ethics and Social Responsibility: Companies today sell not only products:
Their image and attitudes have a significant impact on customers'
The Hawthorne studies concluded it was not the work environ- assessment of their value. In recent years, we have seen several cases
ment that was the decisive factor in motivation and productivity: It in the media, where companies have used child labour, produced
was the focus on the employee. When an employee felt important products using underpaid employees, working under slave-like con-
enough to be the subject of a study, they were more positive, more ditions, or where production is dangerous or polluting.
motivated, and ultimately more productive. Today the results of the
Hawthorne studies are central to development of, among others, Nokia, Aria, H&M, Nike, FairTrade, and Mattei have appeared in the
motivation theories, leadership, and HRM. media with stories of irresponsible production in Asia. Customers
expect that a company have control of their processes - regardless
Competition and instability of geography and location of the supply chain. Moreover, a subcon-
The classic principles focus on efficiency through hierarchy and tractor who does not live up to the company's requirements and reg-
standardisation, worked fine until about the 1970s, when a surge in ulations are still the company's responsibility. Most companies now
global competition changed the world where organisations would have a policy for social and ethical rules that apply internally, and to
operate. Companies had to focus more on customers and principles, supply chain partners. The concept of Corporate Social Responsibil-
such as organisational culture, Lean, flexibility, and quality, all of ity (CSR) is now a central part of most organisations' core values.
which originate from this period. Since then the Internet has been of
great importance for organisations and today the concepts of agil- E-business and Internet: The amount of activity that takes place over
ity, network design, and e-business are key elements in the design of the Internet is increasing. Digital processes replace the physical. Just
organisations. think of the banking industry: A few years ago, withdrawing money
was a physical process; you went into the bank, were served by a
bank clerk, and received the requested amount of money. Today it is
Modern organisational design a digital process of using online banking to transfer money between
Modern organisations still operate on the classical school's back- different accounts and pay via credit card. One of the consequences
ground. Although the requirements and the situation today are of digitisation is disintermediation, where the 'middleman' is re-
dramatically different from the 1930s , the administration " hierarchy moved. There is less need for intermediaries in transactions where
standardisation, and management remain an important part of customers can deal directly with the manufacturer. Instead, organi-
organisational design. There are very few organisations, which can sations rely on managing a complex network of partners, who work
function optimally by only focusing on bureaucracy and efficiency. together to serve the customer.
I,>" , 17
When you buy a computer through Dell's website, the product is the a formal education, but with many years experience, men with dif-
result of many different manufacturers, each of which has produced ferent ethnic backgrounds, whose formal qualifications are high, but
their specialised areas of the computer and sent them to Dell, who with limited foreign language skills and a disabled employee in a flexi
then ensure they are assembled correctly and on time. Sony handles job. These employees must work under the same organisational cul-
packing and shipping. For the customer, though, it is a Dell compu- ture and with individual requirements of the reward system, career
ter - it is Dell, who is the guarantor of the brand, regardless of how plan, and flexible working hours.
many partners have been involved.
The result is that today there is no road map for organisational de-
Figure 1.1: Organisations as networks sign. There is no one correct way to put together an organisation -
and the same method does not work equally well for all businesses or
at all times. Organisation design has become a dynamic discipline,
where it is not a matter of building the 'perfect' structure, but un-
derstanding the requirements of the organisation from the outside
world, employees, shareholders, customers, etc., and as a result, be
able to constantly adjust and adapt the organisation. Organisation
is not a geographically defined unit, but may consist of departments
in different countries, employees who work at home with direct con-
nectivity to company systems and tasks undertaken by employees of
partners or subcontractors.
Employees who require motivating and challengingjobs that are suited to the
individual and with clear opportunities of growth: It is a challenge with the
increased diversification of employee strength. The same company
has to offer interesting and motivating jobs to a young woman with
two children and a man who travels a lot, an older woman without
Part 1
Strategic analysis
Aims and depth: After part one; the reader will be able to prepare
an analysis of a company's organisation. The reader will be able to
analyse and assess the location of the organisation's elements, and
the overall interaction between the company's relationships and its
organisation.
: .. ,::.
External environment
2
and structure
Source: www.fremtidenssygehuse.dk
The international market: Competition from international organ isa- degree of contact with for example, the HRM factor (human re-
tions, risk of take-overs, opportunities for internationalisation, cus- sources management) and the international factor, varies greatly.
toms, rules, exchange rates. Similarly, a fledgling company with high focus on innovation and the
need for external investors will be affected more by the degree of
To a certain degree, these ten factors will affect a company. There- investment readiness capital on the market, than a well-establisher]
fore, it is necessary to identify the organisation's 'domain'. A domain company with high equity.
is the niche or market area the organisation operates within, i.e.,
products, customers, and markets that thereby define the contact
the organisation has with the factors mentioned.
Figure 2.2: Examples of the different domains from two different companies
Technology
i'l: i /:",[, i F' 1,) ( "j 27
Figure 2.3: Identification of environmental uncertainty dictable, the environment is defined as dynamic. If the changes are
Poor few and predictable, the environment is stable. A manufacturer of
fashion clothing has a very dynamic environment, where new devel-
opments and trends occur constantly, and where the ability to pre-
dict sales a year ahead is very difficult. At the other end of the scale ,
we find the likes of a container ship manufacturer: Requirements
and trends change very slowly, and product lifetimes and production
time is so long that it is relatively easy to predict what the company
will produce the following year.
For all three factors, it is important that the assessment to determine Specialisation assesses the degree of subdivision of tasks within an or-
whether the environment is simple or complex, stable or dynamic, ganisation. An organisation with a high degree of specialisation will
rich or poor, is a subjective assessment. There are no fixed number have employees who only perform one, or very few tasks. At a hospi-
of external factors or changes that define position. Therefore, it de- tal, doctors have their specialty. When a patient is treated, doctors
pends on the analyst's ability to understand the situation. A good concentrate on their medical specialty. When a road traffic victim is
rule of thumb is that if the number of factors and the degree of admitted to the emergency department, there would be more doc-
change exceeds what a 'normal manager' can cope with, the environ- tors treating the patient - one to look at the gastrointestinal region,
ment will, as a starting point, be most complex and most dynamic one focuses on broken bones, one on the head and brain, etc. An-
and will require structural solutions. other example could be McDonald's, where every employee has their
area of responsibility (fries, customer expedition, drive-in, etc.). A
low specialisation describes the situation where the employee per-
forms, a large variety of tasks in their job. In smaller companies, it
is often customary for the sales manager to also answer the phone,
make coffee, submit budgets, meetings with suppliers and meetings
with production - all within the same job. The degree of specialisa-
tion can also be referred to as horizontal division of labour.
formal education and training/experience, e.g., medical practition- Uncertainty can be limited with specialisation
By focusing on the degree of formalisation and control
ers who have been through several internships.
can be reduced. A company that operates in a simpl~ and
Personnel quota assesses the number of employees in, respectively, the exte~nal. environ~ent can often reduce uncertainty through
operational part of the organisation and the planning part. Either monitoring and tighter control. In this way, rules and systems are set
you can assess the number of production workers vs. the number up for conduct and limiting the number of decisions that employees
of administration employees or the number of managers at all levels must take themselves in a given situation.
vs. the number of employees. The aim is to draw a conclusion on the
Uncertainty can be reduced by [ormailsinq
balance between different parts of the organisation. The assessment
may also be combined with a value chain analysis that identifies the Finally, the uncertainty resolved through the company's access to
number of employees of primary functions vs. the number of sup- a.nd control of.resource.s, i.e., the way you ensure supply through
port functions. The aim is to deduce the relative sizes of, respect~v~ly, either stock or information. A company who cannot predict future
operational, technical, and administrative staff, thereby providing demand, or where the quantity of resources is limited, can choose
an understanding of the processes and working methods that will to build 'safety' stocks. In this way, the company is less dependent
dominate the organisation. An example might be a production de- on being able to predict sales accurately and thus ensures greater
partment that switches from assembly line work to automation with supply. Alternatively, you can enhance the organisation's ability to
process information accurately and quickly. By using barcodes and
robotics. Here the personnel quota changes from a majority of pro-
duction workers to a majority of administrative staff, who will be re- POS1 data, supermarkets are able to record sales of a particular
sponsible for the programming and management of the technology. product in connection with an advertising campaign and later, be
able to predict the response to a similar campaign more accurately
One way to reduce uncertainty by structure is, as mentioned, by in- than without the recorded data.
creasing the number of departments and jobs. This could help cre-
ate more specialised positions, which would only have to cope with Uncertainty can be reduced by establishing control over resources
a few functions. You can then create standardised and specialised Besides the structural factors, an analysis should also involve key
contextual factors, such as the organisation's size, production meth-
skills, thereby reducing the amount offactors from the environment
that have to be directly monitored and which require a response. od, - manual or high tech, and culture, i.e., values and standards,
as described in Chapter 7. There is a mutual dependence of factors
This specialist thinking we know for instance, from banking. A bank
advisor specialises in either private or corporate client consultancy which means that a large organisation with very high tech production
advice. At the same time, they will often have a specialty area, such as and a performance culture, usually scores high on formalisation, cen-
pensions or investment advice. In this way, it reduces the employee's tralisation and specialisation. A small organisation, where the tasks
external environment and hence the level of complexity is reduced are carried out manually, will be more specialised, decentralised, and
_ they will now only concentrate on the factors that influence their have a low degree offormalisation.
type of customer, and therefore they only have the need for informa-
tion that concerns them. If they have for example, responsibility for
young private customers, then factor four, financial resources, will
not be as relevant to them as it would for their colleague in charge of
older private customers with larger shareholdings.
Stable 8 9 10 Dynamic
Teams
Coordinators,
group leaders
ployee. F
Resource requirements - time and people
There is no requirement on HOW mechanistic organisations have to
Source: Own design with inspiration from Daft (2007)
be divided. Usually organisations use a combination offunctions and
products, depending on the type of division that allows for t~e best
use of resources, such as procurement and production functions of
~he struc.ture of organ!c b?dies is built upon focussing on adapta-
sales as a product by geographical area or types of customers. Th.e
tion, hon~ontal coord.matlon: decentralised decision-making and
key is to manage through a formal hierarchy with a high degree o~ di-
broad, vaned tasks. By ImprOVing the organisation's ability to handle
vision or specialisation. This creates some very controlled organisa-
large amounts of information, uncertainty is reduced.
tions, where employees have precise job descriptions, ~an~gement
plays a central role in both communication and coordination, and
Group-based organisations are organised as small, more or less autono-
tasks are to be done according to precise rules and procedures. The
mous groups, responsible for much of the planning and practical
disadvantages are that mechanistic organisations perform ~oorly in
tasks. A g:~up can have responsibility for planning, ordering materi-
highly dynamic environments - decisions often tal~e ~ long time and
opportunities for innovation and knowledge are limited because of als, o~ganlsmg s~aff, meeting times and breaks, quality improvement,
employee's lack of oversight of the organisation's tasks. supplier ~va~uatlon, etc. Within the group, it is central for this type
of org.anls.atlonal form that there is a very high degree of horizontal
coordmatlon and comm~~ication, and the group gets given a very
Examples of organic structures - knowledge sharing an~ innovation
large amount of the declslon-~aking authority. Employee require-
In very dynamic and complex environment types, environmental un-
ments are that they can, and WI", take responsibility for the process
certainty cannot be resolved structurally, but must be solved by ~et-
an~ they get the freedom needed in order to adapt to changes in the
ter information management: It is therefore a matter of enhancing environment.
the organisation's ability to manage information.
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Copenhagen
London
New York
Seattle
Tokyo
The horizontal focus and adaptation means that the employees in-
volved can bring special skills or special knowledge into a project. An
Coordination within the
engineering company that designs offshore platforms organise the
organisation's framework in a matrix, where the staff have their own specialty: pipes,
electricity, or steel. They collaborate on different projects
are paid hourly, according to the number of hours used on that
In this way, the company can take advantage of specialist
but also achieve a higher degree of coordination between
The machine manufacturer Rival A/S (www.rival.dk).whDpr?duces
ever thin from the smallest cDmpDnents for the electronics Industry, to. .
projects within the organisation.
larg~ piec:s for the machine industr~, has intrDduced autDnDmDUS teams In
production. The grDups are respDnslble for: virtual network organisations are known as organic-inspired
Planning Network structures arise because of outsourcing and col-
Process methDds and choice where companies outsource functions to contractors. In
Quality control the company is not one physical entity, but a network of
Delivery time that cooperate to complete a specific project. The cus-
- Training perceives the company as a single unit with a brand, but in
Machine maintenance
and structuring terms, the company is dependent on
Safety.
able to coordinate the creation of value in a number of com-
Rival's experience with this type of structure is that they have achielved · h often located in different countries and with very different
hi her motivation and greater commitment among the staff, but a so. h Ig er
This creates a challenge for management because the task
q~ality, more efficiency an~ le~s dependence on key personnel - thus a bet-
ter knDwledge of the DrganlsatiDn.
now involves both their own and others' employees,
people in different time zones and geographical locations.
newspapers and magazines use freelance journalists, who then
Matrix organisations are a second type of horizont~l-controlled ~r- part of the magazine's organisation, insofar as they deliver
anisation. Matrix organisation attempts to combln~ the au~h~nty and materials. Articles must be suited to the magazine's
~f functional specialists with horizontal product/project speCialists, and strategy, while the journalist can easily submit articles to
who then take the central coordination role. magazines within the same week.
j i I i'i 39
Typical network structures are known from for instance, Microsoft and functions (reciprocal). In the latter case, such as in a hos ital wh
Amazon, both of which are companies that act as constellations of a number of different doctors each with their 0 ~ I' ere
t he nati ' wn specra ty would
individual partners, who provide parts of a product for a coordinat- reat t e patient,
. X-rayed "me
scanned direate d ,etc., requires
.' a str
ing entity. Thus, Amazon has a wide range of partners, publishers, ture t h at IS very much focused on th e hori onzonta I connect' uc-
manufacturers, printers, etc., who supply and sell products through other words, an organic structure. Ions, In
Amazon, and thereby in the customer's eyes are a part of Amazon's
brand, but not actually employed by Amazon and thus cannot be
controlled by Amazon's management team.
Dependency
For all organic structures, focus is on horizontal coordination and
communication. The key is no longer, where in the organisation an
employee is placed, but how that employee shares information and
knowledge with staff in other parts of the organisation. One way to
deepen relationships between various departments and people is by
using Thompson's definition of mutual dependencies (Daft 2007).
Discussion Questions:
Figure 2.11.' Relation between external environment and structure Can yo~ make objective criteria for the classification of the exter-
nalh environmental
. types in relation to Figure 2 . . xp I'am.
3? E
W .y IS the degree of innovation often low in mechanistic organi-
sations?
Gi~e examples of companies who need a high degree of centrali-
sation and formalisation.
What k:nd of mutual dependence do you think are found at: Mc-
Donald s? A hairdressers? A four star hotel? Explain.
Give examples of how a company can use control of resources as
a way to reduce uncertainty.
Giv.e exam~les. of what 'products' a company can use to divide
their organisation. What determines which product is relevant to
use?
What are the advantages and disadvantages of using matrix
stru ctu res?
Can knowledge sharing be formalised, so you can make rules and
p~ocedures that promote the sharing of knowledge? Explain.
Source: Own design with inspiration from Daft (2007) ~Ive examples of the three forms of uncertainty reduction from
Figure 2 '.11: Structure, information/knowledge, and the influence
Foran organisation, it is a matter of: of domain.
Identifying the factors in the environment that are essential to the
organisation's structure
Identifying the transformation process within the company, in
proportion to how and to what extent the organisation's depart-
ments are mutually dependent
Choosing the optimal structuring strategy
Mechanistic structure for a high degree of efficiency and control
Organic structure for knowledge sharing, learning and innovation
Working actively to influence its domain/market area, so that
market opportunities are constantly exploited and the company's
position is a positive match between these opportunities and
company strengths.
Structuring and changes are not a one-time task: Because the exter-
nal environment is constantly changing, it is necessary for manage-
ment to create a structure that adapts to change, or at least, is able
to handle adjustments and changes on an ongoing basis. This can
be done through an organisation design to fit the environment and
the task, and through a management style working actively with em-
ployee adaptability. The latter is elaborated in Chapter 11.
Groups and teams
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Not so many years ago, the National Board of Industrial Injuries in Den-
mark used the traditional method where every caseworker would sit with
their own cases, and work through them.
This changed when the Board started to work in teams. Team structure
means that employees do not have their 'own cases' - they are the 'team's
cases',
Today, several caseworkers in the same team often handle a case. Therefore,
it is important that everyone in the team has mastered the art of working
together during a busy day. This means that there is a need for a high degree
of autonomy and it is very different how each team will organise their work
- depending on what suits its members best.
most companies operate in, makes it possible to respond and adapt You can hence distinguish between different group types, e.g., pri-
quickly. Team structure helps to support this. mary/secondary groups, formal/informal groups, professional/
multidisciplinary groups, and project groups. Group types are seen
Theoretical distinction between groups and teams, where groups from the point ofview of the person participating in the group.
are described as a functional community that perceives itself as an
entity, but not necessarily generates better results than its members Primary groups are the 'main' groups for individuals, i.e., those groups
could have achieved separately. A typical example is all the students that have the greatest impact on the person and where the highest
in a team, members of a sports club, or any employees of a marke- degree of interaction takes place. It is often family or close friends.
ting department. Secondary groups are further out, in terms of importance and inter-
action. It may be friends, close colleagues or other members of the
A team is also a group, but differs because members are chosen for local old-boys football team.
their individual strengths and skills that they shall use to achieve the
team's common goals. A team is a more binding and objective con- Formal groups are deliberately formed for a specific purpose. It may be
trolled unit. a department within a company or a class on a course. Character-
istic of the group is that if you draw an organisational chart for the
Through the synergy of the group, a well-designed team can produce organisation, the group will be a part of it as well. Formal groups
better results than a collection of individual performances. can be found within both a department, such as project teams with
a specific purpose, or between departments. This is based on cross-
An example of a team is the Danish national football team, a team of functional groups - often with development or deployment purpos-
doctors in an acute admission unit, a team of teachers for a college es. Project type groups are often called ad hoc groups.
class, etc.
Reference groups are formal groups that the individual would like to
In practice, the distinction is not always between the different con- become a member of, in other words, a group the person identifies
cepts. The concept of 'team' is often used as a general description with. An example of this is, as an employee, you have a desire to be a
for all forms of formal group structures. However, it is important manager and consequently be a part of the management group.
to be aware of the increased demands for collaboration and com-
position that are required for a successful team structure. It will be Figure 3.1: 7Jpe of groups
described later how these will affect the team structure.
Group Types
Both as a private individual and as an employee, you are in different
groups. Some groups you are in because of your job, others are due
to family relationships and interests outside of the job, orvoluntarily
with colleagues.
The different group types affect how involved you become. In the
family, it is because of your familial affinity, the sports club because
of your interest, and work because of your skills and interests. To
find the structure of group types and their function, it is possible to
divide them into wide-ranging group types.
47
role; his status is as a sales director, but only as a mediocre tennis Context
player. When he comes home to his family, it is yet another role, as a External factors can affect a group, just like all other parts of the
husband and father. organisation. The organisation's external environment/ plays a role
in the basic structure of the organisation and therefore, also for the
A company can constructively use knowledge of these role types. way that groups or teams approach their tasks. For that reason, it is
Partly by giving employees formal roles, such as head of a depart- important that:
ment, and partly by taking into account the roles to avoid the emer- The team must have a supportive environment
gence of various conflicts in the company. If management is not The team will have access to appropriate resources in reasonable
aware of the different roles in a group, it may cause a role conflict. quantities
Management must be appropriate and supportive
An example of a role conflict can be if an employee in a team 'nomi- The structure must be adapted to the task at hand and the people
nate' themselves as informal leader, because management has not People in the team must have clear and relevant feedback of their
pre-defined beforehand how the collaboration should work and work
who takes the decisions. People shall be rewarded for achievements in the team, in a fair
and appropriate manner.
How to create effective teams
A team working in a very dynamic and complex environment, where
When we work with organisations, we focus primarily on those it is difficult to get an overview of the project and requires many
groups or teams who have influence on the organisation's daily diverse resources, must be organised more flexibly than a team with
operations and the ability to handle the tasks. As mentioned, it is a relatively simple project in a stable environment. In this way, think-
primarily formal groups that we can design and manage, so they sup- ing about the context/environment for a team, is not much differ-
port the company's project. However, informal groups often contrib- ent from the considerations we must make in relation to the entire
ute greatly to organisational culture, and must not be ignored (see organisation.
Chapter 7). At the same time, the need to create teams increases that
are better able to function effectively and evolve with the project. An organisation's strategies and objectives also apply to the team,
just as leadership of a dynamic team" often requires a high degree of
Effective teams are generally created by focusing on these four dif- autonomy. Therefore, management's behaviour has to be adapted to
ferent areas: support the team's needs.
Composition For example, for many years LEGO involved teachers and educa-
The team will be composed of the right people with the relevant tors in developing their products. In this way, they ensured that new
skills. They must encompass all roles, which are allocated according products were incorporated into the children's real life and fit games
to personal preferences and strengths. There must be an appropriate that engage children of all ages.
distribution of the different types, backgrounds, and cultures, and
the group must not be too large forthe project, and employees must A group of employees, who will be responsible for arranging the an-
be able to adapt and adjust their behaviour to suit the situation. nual summer party, typically consists of two to five employees from
different parts of the organisation. They will quickly have an idea for
It does not necessarily mean the larger the group is, the better the the party or a theme, and then delegate tasks to different members
group's results will be. As a rule of thumb, working groups should - one finds the place, one takes care of food, one arranges decorat-
not exceed more than four members. There is truth in moderation. ing and one organises the cleaning afterwards. In this way, tasks are
completed easier, and there is no immediate benefit in increasing
If the group must resolve specific operational projects, then it should the group size. The party is not any better, and time flies arranging
be small. There is no provable advantage in having many people if meetings and discussing back and forth.
coordination is primarily structural, and the project does not have
a developmental or creative nature. At the same time, it may be dif- In contrast, a group has been given a project to rethink the com-
ficult to coordinate specific tasks among more than three or four pany's products. Here the group will consist of several persons and
people. for the project to be successful, it is crucial that all areas of the or-
ganisation are represented, and that all ideas and thoughts are taken
However, if the group's project contains a requirement for develop- under consideration before taking a final decision. This group will
mental and creativity problem solving, where it is important to get use innovative forms of cooperation, such as brainstorming, asso-
as many different contributions for the problem as possible, then ciation techniques" and similar, to ensure that all possible solutions
numerous members can be beneficial. Here, large groups of very dif- are brought to the table. Much of the time will be used on discuss-
ferent people will often be able to highlight an issue from multiple ing and identifying the preconditions for the modified products or
perspectives, discuss the consequences for very different parts of an target group.
organisation, and ultimately be better at solving complex problems
than smaller groups.
On the other hand, if the group has to solve complex problems, then
heterogeneous skills and backgrounds can be necessary. If the prob-
lem involves various disciplines, has broad influence on the organisa-
tion, or requires an understanding of many parts of the environment,
it is easier solved by putting together a group of very diverse people
- see the discussion on functional versus cross-functional teams.
Development departments in companies, to a high degree, consist
of people with widely different backgrounds: Engineers, production
workers, economists, philosophers, sociologists, teachers, etc.
4. See Chapter 8.
, I,,'
53
Job Characteristics
The third requirement for an effective team is that the project is de-
signed so that it lives up to the basic elements for a motivational jobs:
It should contain a degree of freedom (autonomy)
It must provide the possibility to use different skills and abilities
(skills variety)
It should be clear what the project's purpose is in relation to the
rest of the organisation (task identity)
It must give the person/people a sense of responsibility for results
(task significance).
For a team it is important that they know the goal of their project
and that they have the necessary resources in terms of money, time
and knowledge to complete it. Another key element is that the team
has the freedom to organise the work optimally. This is a big part of
the considerations in connection with the organisation of autono-
mous teams.
EXAMPLE:
The nursing and care sectors have widely used autonomous teams. Many
home help departments are organised as autonomous teams, where each
team cover members of the public within a specific geographic area. The
team consists of, for instance, two nurses, a social and health assistant,
as well as five to seven social and health helpers. In addition, the team can
draw upon extra resources in the form of group coordinators and area
managers. Often a number of teams will also share external resources, such
as doctors and psychologists.
Norms can be described as formal and informal rules of behaviour in Strong norms may also have a negative effect on an employee's own
the group. Is it okay, for example, to come ten minutes late? Can you opinions, in that he suppresses his own opinion and meaning in fa-
take a sick day without really being bedridden? What do you do if vour of the group, so as not to appear opposed to the general norm.
you discover a fault with a product? And is it okay to sit and look out These are known as groupthink and groupshiit, and are concepts that
of the window during working hours? describe either the tendency to suppress a different position in or-
der to appear as part of the group (groupthink), or the tendency to
Teams are naturally subject to a number offormal rules established reinforce one's own position when feeling support from the group
by the company. They often deal with work place rules, such as (groupshift). A small irritation at a manager can quickly become a
meeting times, breaks, holidays, productivity, and working methods. huge crisis, without the situation actually changing.
There are also a number of personal norms concerning cooperation,
appearance, and dress code. Conflict types in teams can be both constructive and destructive.
Constructive conflicts are beneficial for the team's work, often lead-
ing to discussions about methods or solutions, which can lead the
team to a better or new solution to a problem. Characteristic of con-
7. Social loafing is a term describing the tendency that individual productivity may be lower when structive conflicts are that they involve resources and processes - not
working in groups, because the ability to identify the individual's contribution to the group's work,
is not so great. In other words, someone works less or slower, in the belief that it is not as visible in
people. We can thus discuss how to complete the task, or how to
relation to the final result. allocate time, but never personal characteristics. These conflicts ex-
56 /\ 57
ist both within the team, and between the team and its environment are called team roles. To find out whether all team roles are in the
(typically around resources or the budgets, for example). team, a test can be conducted. The test will provide a result for each
participant, which tells about the their primary, secondary, and terti-
Destructive conflicts are conflict types, which harm cooperation. ary team role.
Typically, they are personal and can be very difficult to resolve. It
typically concerns who has a particular role (e.g., the manager), or To discover whether team roles are represented as primary, second-
a lack of consensus about standards in the team. A participant who ary, or tertiary team roles, the group has to be examined. In this case,
does not deliver the project on time or who repeatedly arrives late for the group will probably function optimally. With the test you will
group meetings and does not want to change their behaviour, can be also find out if there are too many or too few, or perhaps none at all
very destructive for the overall cooperation within the team. These ofa certain type of team role. Ifso, the group should be reorganised.
conflicts exist within the team and only rarely involve people outside
the team. When the group is complete, the team's work can begin.
Shaper
Implementer
Belbin's team roles consist of eight different personality types that pref- Implementer and Shaper are the roles that ensure a high level of activity
erably should be represented in the team group. Personality types in the group. The Implementer can be described as hardworking, fo-
'.1'-
59
cused, and practical. The Shaper is competitive, energetic, authori- Producer is a role that focuses on progression and goals. It is this role
tative, and responsible. that ensures the work goes in the right direction, qualitatively and
quantitatively, and to maintain efficiency and productivity in the
Plant and Resource Investigator are the team's
creative roles. The Plant project. Often it is the Producer role that ensures the project is com-
can be described with words like inventive, imaginative, and intellec- pleted on time and with the level (professional and quality), which
tual. The Resource Investigator is curious, enthusiastic and network was agreed. A good Producer must be goal orientated and energetic.
seeking.
Administrator ensures structure and systems. It is in the Administrator
Coordinator and Team Worker are the roles that focus on the external role that manages the methods and resources. The Administrator
environment. The Coordinator is fair, democratic, and delegating. will focus on and ensure things are done properly, carefully coordi-
The Team Worker can be described as a relationship builder, has nated, and they should generally be thorough and detail oriented.
situational awareness, and socially oriented.
Entrepreneur is the innovativerole. This is where ideas originate, new
Finally, Monitor Evaluator and Completer Finisher are who keep the team projects, and thinking ahead. The Entrepreneur role is both a su-
together internally. The Monitor Evaluator has oversight, is analyti- pervisory role (development of key external environment factors,
cal, objective and levelheaded, while the Completer Finisher is dili- which affect the project) and a creative role (new opportunities, new
gent, a perfectionist and cares about detail. projects). The Entrepreneur must be willing to take risks and be crea-
tive and open.
Belbin concludes that if all roles are present in the team, it has a good
foundation to be effective. If just one of the roles is missing, it will Integrator is the social role. This is where coordination and coopera-
be noticeable in the team's performance. Therefore, the Plant is im- tion are managed. A good Integrator ensures that all members work
portant for innovation and creativity, the Implementer is important optimally, that there is a good atmosphere in the team, and that
to keep the team running and the Complete Finisher is important to conflicts are resolved in the best possible way. An Integrator must
ensure that the project is completed. According to Belbin's studies, therefore be a people person, empathetic and compromise focused.
one person typically has two to three roles, and so a team of three to
five people can easily represent all eight roles." In Adizes' theory, the goal is that all four roles are represented in the
team. Ifso, the team should be able to maximise efficiency. Therefore,
Adizes' leadership roles applied to the team each member is assessed by how well that person plays the four roles.
Another way to consider the roles of a team is based on Adizes' lead- For this purpose, a coding system is used, where PAEI represents a
ership roles (Hansen, Heide & Riis, 2000)9. Originally, Adizes' theory person who is strong in all four roles, and paei is a person who has a
was used to define the different roles of a manager, but it can also trace of all roles, but no strong representation. If the person has no
contribute to an understanding of the effectiveness of a team. In trace of a role, it is defined with a zero (0). In this way, a person who is
Chapter 5, roles are elaborated in a management context. analysed as PaOi, will be very strong in the Producer role and to some
extent, could fill an Administrator and Integrator role. The person
Adizes works with four basic roles in an organisation or in this case will not have a focus on the creative or evolving part of the project (0
in a team: in the Entrepreneur role). A person, who is assessed as pOEO, will take
Producer (P) on the typical Entrepreneur's role: Strong focus on new ideas and
Administrator (A) projects, a certain interest in putting projects in motion and achiev-
Entrepreneur (E) ing results, but no focus on structures or collaboration.
Integrator (I).
According to Adizes, the optimum combination, PAEI, cannot be
found in one person. However, by careful selection of its members,
it is possible to assemble a team that has strengths in all four roles.
8. More information about Dr. Meredith Be!bin's team role test, etc., are available at the website
Theoretically, this will result in optimal cooperation. In practice,
www.potential.dk.
9. See Chapter 5 on management/ where Adizes illustrates from a management perspective. grouping people together with very different strengths and areas of
61
to
IS
ct
Time
re
~s group may also encounter problems if there are differences in the
understanding of ,right' and 'wrong' behaviour. This is compounded
if the team consists of several different cultures, see, for instance,
p Uncertainty Avoidance from Hofstede's Culture Theory (Hofstede,
w 1999), which can cause very big differences in the need for long-term
agreements and plans.
d Team success is achieved through their ability to reach the goals the
e organisation sets for them. A secondary effect is that the members
in effective teams (an 'elite team') will develop professionally and
socially. At the same time, an effective team often becomes an im-
3. portant part of members' identity - that is, they feel at home, the
role they are most comfortable with and the partners they work best
with. You can say that an effective team becomes a part of members'
primary group.
Community: The group's structure and standards are established and Team success is achieved through their ability to reach the goals the
role division begins. Members experience themselves as a part of the organisation sets for them. A secondary effect is that th.e members
group, and effectiveness of the group's work improves. in effective teams (an 'elite team') will develop professionally and
socially. At the same time, an effective team often becomes an im-
Elite Team: Roles and norms are in place. The team functions as a portant part of members' identity - that is, they feel at home, the
well-oiled machine, and synergy is at its highest. role they are most comfortable with and the partners they work best
with. You can say that an effective team becomes a part of members'
Break-up: The project is completed and the group is disbanded. primary group.
In the transition between each phase, there lies a potential conflict. An alternative model can be used to describe the development of
Typi~a'.'y, confli.cts occur in the Love phase, where the group's lead- project groups, where the deadline for the group's ~i~band!ng is
ership IS established. There is often disagreement about who is the known. Here there is a leap in development, where efficiency In the
leader of a team. Also in the Community phase conflicts arise in con- first half of the project's lifetime is very low. When half of the time
ne.cti~n with the establishment of norms and roles. Usually problems is gone, there is a jump in performance, when the team sudd~nly
exist If the group has a majority, or minority, of certain personality realise that they must work hard if they are to complete the project
ty~es, e.g., many extroverted salespeople, but no economy/detail within the stipulated time. Then, work continues until the end, with
orientated persons, according to Adizes so-called POEi group. The a somewhat higher efficiency.
i j,
During the team's lifetime, there may also be a need to work more or
less structured with the team's culture, teamwork processes or roles
and norms. Some of this work may be performed as social activities,
(see improvement suggestions for established teams, in the ~revious
section), while others can also take place as formal consultations. At
times, the team may have the need for an external consultant, who
can offer support in areas, such as communication, roles, problem
solving and conflicts, norms or leadership and hierarchy.
0rskov AjS, a company in Skjern, who inter alia, work with man-
agement and organisational development, has 25 years experience
in conflict management in private and public companies. "It's not
always about fulfilling expectations", says Gunnar 0rskov on the
company's website (www.oerskov.dk). 0rskov AjS offers courses
that can, through coaching and mediation, train team members and
managers to have the courage to engage in conflicts and to use con-
Strengthening the team flicts constructively in the processes of change.
The big question in work groups and teams is how we create an ef-
fective team that can work with both high quality and high efficiency. Are all projects performed in teams?
There have already been suggestions on this in the form of how to
The answer is NO! In theory, team structures are an advantage for
select the people, and how management provide the right framework
companies, who need to exchange knowledge and. information - i.n
for the team. However, some teams continue cooperating, and every
other words, a great need for horizontal connections. However, It
now and then, new input is required.
looks very different in practical reality. Many Danish companies have
tried team structures, autonomous groups, or project groups, and
To impr~ve a team's performance or ability to cooperate, we can
many have failed.
take action on several levels. Teambuilding is a term used widely in
management theory today, and covers a range of activities from ab-
On paper a team can increase efficiency and motivation of employ-
seiling to coaching sessions to teamwork exercises.
ees but frustrations and conflicts in start-up phases are often much
higher than the anticipated results. The consequence is that many
In the start-up phase of a new team, there is often focus on the
companies give up establishing team structures before they reach th.e
types of. exercises that create unity and team spirit in the group.
stage where, in principle, they should begin to see the results of their
Here various outdoor activities are available, such as survival and
efforts.
sporting ~ctivities. Their primary purpose is to give participants an
opportunIty to get to know each other and to uncover some of the
Teamwork requires more resources than individual jobs. Communi-
personal strengths and weaknesses that the team will be dependent
upon later. cation and conflicts put demands on management and the structure
- demands that may incur necessary costs. However, despite these
increased costs, team structures are often preferable. They increase
the motivation of participants, allow for better and more creative iob types and the necessary strengths in Belbin's theory? Should a
project resolution, and reduce the need for middle managers in the Ieader for example, be strong in the 'Shaper role'? Explain.
organisation - just to name a few positive arguments. Describe the four roles in the Adizes model. How do you think
your neighbour will score? Compare your results with the results
A good exercise to identify whether a team structure is preferable is from your online test.
to ask your self: Give suggestions on how to design a reward system that ensures a
Is it better to have more than one person working on the project? balanced focus on all four Adizes roles.
Can the project's goals be defined clearly enough to be resolved How can you avoid social loafing? . .
in a team? How many members do you think an optimal project team will
- Will the project create mutual dependence among members?lO consist of in your studies? Explain.
What is the difference between destructive and constructive con-
Football is a typical team sport: A match can only be won if all play flicts? Give examples of some conflicts you have experienced, and
together and have the same objective for the match. In contrast suggestions for how to resolve them.
there are situations, swimming for instance, where members act as How can the leader of a team help the team through the five
individuals, with the backing of a team, but without real collabora- phases of development? Give examples.
tion i~ completion of the project '200 meter free'. Another example of
a ~roJect best done individually, is work-roster planning for holidays.
It ISa task that contains a political element: Who has children, who
was off last year, is it better to work 12-18 or 14-20, etc. It is rare to
make ~ roster that can please everyone. Therefore, a manager, who
then dIctates the solution, is better to take these types of decisions."
Discussion Questions
.- Describe the difference between a group and a team.
What. is easiest to manage, a group or a team? Explain.
Why IS teamwork for most people more motivating than group
work?
- D~scribe the.eight roles in Belbin's theory. How do you think your
neighbour wIll score? Do you think there is consistency between
There was once a business owner, who for years had run his business with
the philosophy that one must take the good with the bad. Therefore, this
meant that everybody were forced to accept they had to do some annoying
and boring tasks, in order to be able to have the tasks they were most ent-
husiastic about. And what happened? All employees were equally dissatis-
fied; the arduous tasks filled their time disproportionately and overshado-
wed the joy of the good and exciting ones. At one time, even the business
owner noticed that he did not think it was fun to go to work anymore.
tracting some of the tasks out to external companies, partly by hiring some os ital emergency room: Patients with co~plet,ely dif~er-
employees who wanted to work on exactly these tasks, and finally, some of ah p d injuries stress levels are high and time IScrucial.
the tasks disappeared by changing the workflow,
dan 'Ide who 'must be treated first, who should be sent
The experiment was a success, Effectiveness and job satisfaction incre- must ec , hil Th ual
ased and the Company's results were clearly improved, ' who can wait a little w I e, etc. e q -
Into th~ syst~m, t conse uence of the doctors at admission,
Source: Teglkamp (2009) the w~rk ISa direc I' hqocan handle a high stress level, are
h nght persona rty, w h h
t e tructured have the right experience to ass,ess w et er a
An organisation is made up of people, who work together to achieve , ~ d er or not and is able to interpret different symp-
' IS In ang "
iven context, Remove Just one 0 f the above competences 'II
a common goal. To steer the organisation in the right direction and , .
In
' a gl, h vlng a secretary assess the injuries _ quality WI
to improve its results, it is therefore necessary to control and predict
Instance, a
The example 'I
, obvious
IS y extreme, but the ,principles are
each individual's behaviour, We can create optimal conditions for
each individual by giving them the opportunity to fully utilise their The result of a completed piece of work is a ~unc,tlon of person-
skills and knowledge, If we can motivate them to do it, and we are perception, knowledge/experience, and motivation,
able to coordinate their individual efforts towards the common
goal, the result should be a strong and effective organisation, The , be analysed in many ways, Researchers fundamen-
can
rty " of some innate charac-
company in the case study gives an example of a manager, who with
agree tdhat p::~:;I~~el~e:rcnoe~~e::i:~; conditioned traits and
courage and vigour, and by focusing on individual skills and motiva-
an som , , 'that
t h e com biIna tion of these characteristics or traits, make us
tion, has been able to improve his organisation,
Personality
of the main ways to analyse personality is with the help of per-
Personality affects behaviour, The first step, if we are to understand
employees' behaviour in the organisation, is to understand their
background and why, they react as they do, If We know the basic , f ' f uestions designed to iden-
A personality test consist,s ~ a s~n~s ~o~e redefined categories. A
strengths and weaknesses in their personality, experience, and ways tify personality char~ctenstlcs wlth~n 'r :,ndicator (MBTI) (Rob-
of understanding the world, we are more likely to understand their
~idely used ;~t;~: :s~h;T~r~:~-t~~~sg~a~Fc personalit~ tr~its b,ased
reaction, and ultimately influence them to respond in a certain way
within the organisation. bins 100
on & Judg ,
questions)on how ,IndiIVIid ua Is react
,. in , certain situations.
From the responses, individuals can classified as,
As mentioned in Chapter 2, organisations are leaning more and more
towards a horizontal focus, with consequences such as, lower de- Extrovert or Introvert (E/I): Extrovert Pdeo P,Ie are
, outgoing
d are and
oftensocial,
very
grees offormalisation and widespread decentralisation. The organi- they clearly expresses their views an OpiniOnS, a~ ,
sation is dependent upon employees being able to make informed, self-conscious, Introverted people are more shy an qUiet,
independent, and quick decisions, Management is dependent on
having dedicated employees with the right skills and experience in ,, '\' Sentient individuals are practical, detail-
Sensing or Intuitive (S/N/, d der Intuitive people rely
the right position of the organisation. It is these employees, who on d f tines systems an or .
oriented an ~re, er :ou If' blems ~heoretical possibilities or crea-
a daily basis, have to make the decisions that drive the organisation
forward. on aand
tive moreunusua
hollstllc
sovile,,:,
uuons. 0 P~~ey are' often not particularly interested
71
Thinking or Feeling (T/F): Cognitive personalities use logic and rational
arguments to make decisions. Emotional individuals rely more on job related results - probably because indivi~uals. with ~t~ong
their personal opinions and feelings. are working harder, are more responsible In their Jobs
consequently create better results. At the same time, often a
Judging or Perceiving U/P): People with an evaluating outlook on life degree of agreeableness can demonstrate good results, when
want control and would prefer a world that is structured and man- are more popular among colleagues, which in team
aged. They would rather work with one task at a time, are methodical, provides a better base for cooperation and thus better
and make long-term plans. People with a perceptive vision of life are Openness affects learning and flexibility and gives positive
flexible, make plans along the way, and often react spontaneously to especially in volatile and change-oriented businesses, a~d
situations they encounter. people with good emotional stability are generally more sans-
with their life, more positive in the job and have a lower sense of
Collectively, the four indicators describe how a person prefers to act, (Robbins &Judge, 2009).
communicate, make decisions, meet people, and tackle tasks. Per-
sonality types are defined by four letters, and result in 16 different focusing on the Big Five are not as widespread as MB-:I;
personality types. MBTI is often the starting point for revealing personality
in connection with, for instance, recruitment.
An ESTJ, for example, is an organiser - realistic, logical, analytical,
and decisive, and will often work well in commerce. An ENTP is
more innovative, flexible, and development-focused and can act as
an entrepreneur in the company. INTJ is a visionary, focusing on his
or her own ideas and visions. They will often be stubborn, critical,
independent, and enthusiastic about their own inventions and ideas.
The manager's effect on employee's learning, acts as a reinforcement "Nielsen, this is the third time you are late this week. You had better buy
of the opinion that the employee has of the organisation. Positive an alarm clock! We cannot have people who cannot meet on time".
reinforcement occurs when behaviour is followed by a pleasant re-
sponse. It may be praise from managers or colleagues. Negative rein- Figure 4.1: Conversation as communication
forcement occurs, for example, when a teacher asks a question to a
student, who is sitting and looking down at the desk, hoping not to Person wishes to disclose
Message Recipient hears
some information. the message.
b~ asked. Punishment is the third reinforcement method and is a very - Form (verbal, written)
direct way to stop unwanted behaviour. An example of punishment - Style (quiet, aggressive,
Information is Message is interpreted.
polite, reproachful,
is a student being barred from an exam due to lack of attendance. selected/ defined
objective/subjective, etc.)
Finally, managers can choose to ignore certain behaviour. This kind The interpretation is
The choice is a consequence again dependent on
of reinforcement, or lack thereof, has the result that the behaviour
of a person's background, the person's
will dis.appear .over. tim~ - the lack of reinforcement sends a signal attitude ~nd understanding background and
that this behaviour IS uninteresting to the organisation. of the situation personality, attitude
and the other towards the situation
(personal context) and the other
Both positive and negative reinforcement creates learning. Modern
(positive / negative).
~rgani.sational thinking puts more focus on managing the posi-
tive reinforcement than the negative. Negative reinforcement has a
higher level of control and surveillance, and reminiscent of the more
authoritarian management style and mechanistic structure. How-
~ver, positive learning is central in the development of, for instance,
In~~vative cultures and learning organisations in which employees'
ability to understand and manage their own learning is crucial to its
development.
The negative reinforcement is that in the recipient's interpretation,
he will note the value 'meet on time' as a necessary behaviour in or-
Communication der to stay in the company. He will have learned that if he wants to Ii
keep his job, he must not arrive late.
Much of the learning in an organisation is through communication
and communication serves as the control and motivation mecha- However, ifhe were to send a positive message, it could be:
nism for managers.
"Nielsen, I would like to rearrange your tasks a little. I have a vacant
Wh.en ~ colleague says something to me and I choose to react, my position in Group B, with responsibility for the contents of our latest
action IS due to an interpretation of what has been said to me , and products. It would probably require a little more work in the begin-
an assessment of what I expected to do in this situation. Conversa- ning, but it will give you some challenges. What do you think?"
tion thus becomes a central element of positive and negative rein-
forcement, as mentioned in the section on learning. Here, the manager's relaying of information will based on a positive
interpretation of the employee'S behaviour - he meets late because
One example is a manager that must communicate with an em- he is bored, and the goal of the conversation will be to increase his
ployee, who has arrived late for work for the third time in a short motivation by challenging him. It requires that the manager assesses
period. The information is that it is not acceptable to be late. The the employee as conscientious, and he will be positive towards the
manag~r may c~oose to phrase this message positively or negatively, work and the organisation.
depending on his goal with the conversation and relationship to the
employee. If he chooses to say it as negative reinforcement, the mes- In principle, conversation is a central behaviour parameter in mod-
sage could be:
ern organisations, where rules and systems are minimised. Often it is
only through conversation and communication that employees will
have direct feedback of their behaviour.
(,11'.,1,
75
Figure 4.2: The four elements: discover; dream) design and destiny
Although personality and values are connected, they are not identical
- personality is concerned with behaviour, and values are at.titude.s.
We may have, for instance, good attitudes that are not evident In
our behaviour. Most have the opinion of supporting children in poor
loute to the gold
countries, but that does not mean we are actually doing it.
The individual must fit in on two fronts: In relation to the job and in Early motivation theories
relation to the organisation. In the 1950s and 60s, as a consequence of increased focus on people
within the organisation (see Chapter 1), there originated a series of
Job fit-analysis assesses whether personality matches the require- motivational concepts, which all had the common element of work-
ments of the job. For example, a salesperson would be outgoing and ing with an individual's wishes and needs as a basis for motivation.
social, and an accountant would have a high degree of detail focus. Today, these theories are criticised harshly for having insufficient
Organisation fit-analysis focuses on the interaction between a person's documentation. However, they are still relevant to know because
norms and values, and the organisation's values. For example, very they are the basis from which all other motivational theories have
innovative individuals work better in organisations where creativity is developed, and are still widely used by managers to explain employee
the focus, than places where standardisation is central. It also con- motivation.
cerns a match between what the organisation considers as correct
behaviour, and what the person believes is the correct way of doing Maslow's Hierarchy of Needs
things, where the attitude towards the job is created - if the employ- Abraham Maslow's Hierarchy of Needs is probably the most well
ee feels that the company and management treat him fairly and take known motivation theory. Maslow's theory was that humans have
his wants and needs into account, his behaviour will improve. Where five basic needs:
there are differences in values and attitudes between organisation
and employee, the employee will not be satisfied. The employee will Physiological: hunger, thirst, shelter, etc.
try to change the values of the organisation, change their own posi-
tion, or eventually leave the company". Security: protection against physical and psychological danger.
A key argument for focusing on values is that the organisation's val- Social: togetherness, sense of belonging, acceptance, friendship.
ues also strongly influence the way employees are motivated.
Esteem: internal factors, such as self-respect, freedom, the feeling of
achieving something and external factors, such as status, recogni-
Motivation tion, and attention.
Motivation is a psychological processes derived from inner needs or
external incentives and structures that steer our actions. Motivation Self-realisation: growth, achieving goals, the feeling of success.
is the driving force behind these actions, and the impetus for achiev-
ing goals. Maslow's theory was that systematically we move through these
needs. Only after step 1, when physiological needs have been met,
When we analyse motivation, we distinguish between the following: can we begin to focus on step 2. A person will not feel fulfilled until
- Inner needs all the underlying needs have been met to a reasonable degree.
- External incentives and structures.
Maslow's theory is well known and widely used. It has not been pos-
Inner needs are primarily a consequence of individual personality, sible to prove the theory, and especially the ranking of needs has
values, and lifestyles. External incentives can be a consequence of received much criticism. In several cases an upside down pyramid
the outside community, such as the attitude of a 'good life', or the is used to illustrate the theory, because people in the western world
company can create it. have a fundamental achievement of the lower needs and are there-
fore more focused on the possibility offulfilling themselves.
Historically, we have seen an evolution from the very needs-focused
theories from the 1950s and 1960s, to an increased focus on struc-
turing, management and job characteristics.
1S. The concept is called Cognitive Dissonance, and it describes the correlation between attitudes and
behaviour. For details see Robbins &Judge (2009).
79
Figure 4.3: The traditional theory and the inverted needs pyramid Herzberg concluded that it was not possible to motivate people un-
Traditional Inverted less they were in or above the neutral zone. If an employee is dissatis-
design design fied with his job, the first task is to meet his needs for Hygiene Fac-
Self-real isation tors, good working conditions, no bullying, etc. Only when they were
satisfied, can work begin to motivate the employee through Motiva-
Esteem
tion Factors. Similar, it does not help an employee's motivation by
Social increasing the number of Maintenance Factors, because they have
no connection to his sense of satisfaction. Here one should focus on
Security
the more performance-focused Motivation Factors.
Physiological
Herzberg is comparable to Maslow's Hierarchy of Needs.
Source: Own design with inspiration from Robbins &Judge (2009)
Figure 4.5: Comparison of Maslow's Hierarchy of Needs and Herzberg's Two
Factor Theory
We are so sure of our physical and security situations, that it is not
necessary to focus on these. Instead, we seek the possibility of hav-
ing to meet the upper needs: Esteem and self-realisation. Maslow's
theory does not have direct focus on jobs, so this makes it difficult
to relate the Hierarchy of Needs directly to a job situation. Despite
this criticism, Maslow's theory is still in widespread use among the
world's managers.
The general conclusion is that employee motivation increases when Research in motivation has increasingly focused on how the way
they have a clear expectation of what is expected of them and when work is structured, affects motivation. One of the key theories in this
they determine that it is necessary to make an extra effort to reach is Hackman & Oldham'sJob Characteristics Model.
the goal. In part, motivation is influenced by the employee's assess-
ment of the situation. This is described further in the Expectancy Job Characteristics Model (JCM)
Theory, which precisely takes subjective assessment as a central fac- JCM is based upon any job being defined through five central dimen-
tor. sions:
85
Skill variety tonomy gives the employee a sense of personal responsibility. Overall,
The breadth of activities within the job. A job with a high variety the goal is to give individual jobs as high levels of the five dimensions
of skills gives the employee the opportunity to exploit several differ- as possible. Theoretically, this gives the best basis for motivation.
ent competencies (practical, managerial and social), and the job has However, jCM takes in no account of individual factors, such as
several different types of tasks. An example might be a self-employed wants and needs, but works only on a structural level. It is therefore
hairdresser, who cuts, advises clients, does the accounts, orders a basis for motivation and not the result, which is characterised.
products, advertising and communication, deals with employees,
etc. An example of a low variety of skills is an assembly line worker, Figure 4.6: Hackman & Oldham's job Characteristics Model
who packs products in boxes.
Task identity
The extent to which the task results in a complete product/result or
is only sub-processes. A high task identity, e.g., is a hairdresser, who
takes care of the entire process from the customer's decision to the
finished hairstyle. A low task identity is the employee, who mounts
fuses in electronic equipment, but never sees the complete product.
Task significance
The extent the task influences others' lives or work. An important
task is, for example, the teacher at a school who can see how his way
of doing things, has a direct impact on pupils' learning. The cleaner
at the same school will probably assess their tasks to have a low
impact on student learning.
Autonomy
Freedom to decide within the framework of the task. It may be the
freedom to determine the pace of work, breaks, methods, etc. An
example is an independent consultant, who may choose to take most Source: Robbins & Judge (2009)
of the week off and then work hard the other days. jobs with low
autonomy are, for example, telephone sales people who ring custom-
ers up, working from a list of phone numbers and a standardised How can jobs be redesigned based on JCM?
interview script. jCM allows us to work with the general restructuring of the com-
pany's work-sharing principles (see Chapter 2). We can increase mo-
Feedback tivation of employees by focusing on the way we assign tasks among
To what extent will the employee receive direct and precise feedback? employees, the degree of specialisation, decentralisation, and stand-
This factor has strong correlation with the Expectancy Theory's ardisation. Specifically, there is a direct correlation between highly
result-reward factor. A job with high feedback is, e.g., an emergency specialised and standardised jobs and a low variety of skills and for
department doctor, who immediately sees whether the patient re- example, highly centralised organisations, and a low autonomy.
sponds to treatment. An example of a job with low feedback is the
cleaner from the school, who rarely gets feedback from students The goal of structural redesign is to increase motivation among
about the standard of cleaning. employees. Elements such as job rotation, job development and job
significance, all have focus on increasing motivation and are clarified
jCM is illustrated in Figure 4.6. Be aware of the correlation between byjCM.
factors. If the first three dimensions are met, the employee experi-
ences the job as meaningful, important and worth doing. High au-
()
Job rotation describes the situation, where an employee has training Motivation theories essentially deal with. the same basic problem:
in various types of tasks, and then switches between them on a fixed 'he employee to make an Improved effort? However,
How d 0 we ge t t . I' h"
schedule. One example is a production group during the transition they have different approaches to the problem. This re ations 'P IS
to autonomous teams, who will face a requirement to perform all illustrated as follows:
functions within the group. They no longer have a fixed position at a
particular machine, but must be able to operate all machines in that c: 4 7' The relationship between organisational theories
,tgure . . / .
area. The purpose here is to increase the variety of skills during the
day and thereby reduce their sense of routine and boredom.
Job expansion is based on the same situation, but here the same
employee does both tasks. In the example, it would mean that the
same employee must now deal with maintenance and repair of the
machine, for instance. In the previous system, a specialist' was called
if the machines broke down. Now, the same employee has to both
operate and maintain machinery. Job expansion influences not only
skill variety, but also task identity, because the employee now has an Personal needs
Result
overview of several sub-elements within the organisation.
,
and goals
Job significance has the most extensive influence. Where the first ...-.-..
'" '.''"' ...-~~~
...-...
Personal needs
two work with tasks on the same level, job significance is concerned (Ability, expenence, ! analysis - what is
with increasing the employee's sense of autonomy through increasing backgr ..ound, skills, I.. most important?
self-determination and management of his own job. In the example I .
I Job/fit
etc.
)
I
of the autonomous group, the old middle management position is \."""..""" ...".".",, ...,,..., ..
Objectives
removed, giving employees the responsibility for planning and man-
agement tasks. Here, each employee feels more responsibility and
freedom to affect their job and through this experience increase mo- Source: Own design with inspiration from Robbins &Judge (2009)
tivation. In relation to Herzberg's factors, motivational factors are
increased for individual employees, who now have the opportunity
to meet their needs for status, development, and self-realisation. The Implementation - how the method of
employee, who only performed familiar, set tasks before, now has motivation is chosen?
managerial responsibility. The weakness with job significance is that
the requirement for job significance increasing motivation of an em- What the presentation above makes apparent, is that there ar,e,~any
ployee, is that the employee is already satisfied with their job. They ..
different ways to ana Iyse motivatIOn.. None of them covers ad situa-1_
must feel that an acceptable number of hygiene factors satisfy their tions and organisations, and they all have their strengths an weak
basic needs.
nesses.
The trick is to choose the correct model for ~ given situation. The
Expectancy Theory is good for clarifying cholc~s that "" emplo:ee
faces' the Organisational Justice and Goal Setting theone; a;e ~t-
ter at' redicting these choices. Meanwhil~, th: n.eeds-base t eones
are b:rter for analysing problems with dissatisfied ~mployees, than
the Ex ectancy Theory that focuses more on behaviour and not s.o
much ~n attitudes. Problems of a high turnover a.mong employee~ IS
explained better with the Expectancy Theory for Instance, than with
needs-based theories, such as Maslow's.
88
What is leadership?
Egon wa.s not s~~cessful even though he possessed a wealth of good inspiration
leadership qualities. Why was that? At one time or another, he al- Gives staff the power to
ways became the focal point and solutions and carrying out of tasks solve difficult tasks.
Satisfy human needs.
were his idea. Although he worked in a team, he was the leading force
and the goal of easy money was more an ideal for him than it was R.esults inpositive and
sometimes dramatic
a realism of the team. Maybe he should have made sure the team
functioned better as a unit, i.e., utilising their competences, rather
than simply giving out orders.
Source: Based on Kotter (1990)
Figure 5.2: The new leadership styles The study, which is the basis of the table, showed that many of these
New leader Superleader Transactional Transformational features were feminine, and not surprisingly, it was often female
leader leader leaders with this style of management.
Is inspiring and Is able to develop Is a leader who Is a leader in
visionary, pre- leadership capa- considers the re- handling staff
occupied with city in staff, dele- lationship to staff relationships
building common gate responsibi- like a trade-off, by motivating
understanding of lities and reduce because staff gets and expects
the objective. Is their reliance on what they want, active partici-
preoccupied with formal leaders while delivering pation. Involves
creating an under- and stimulate results the leader and inspires staff
standing of corpo- motivation, par- wants. Staff must to do their best
rate objectives and ticipation and follow specified to improve the
that staff have the creativity.
Although the above leadership styles can be ideal for a manager, it
tasks and meet company's per-
skills, responsibility set targets. formance.
is far from certain that the leadership styles are prevalent in compa-
and opportunity to nies. There are other perspectives of leadership and the rest of this
achieve common chapter will seek to clarify this. Generally, prospects/theories will be
goals.
used in the analysis of leadership.
Source: Huczynski & Buchanan (2007)
Figure 5.4: Garuda model for leadership opportunities Douglas McGregor has developed the XY Theory about this. The
starting point is the attitude that motivates people to work, and Mc-
System flexibility.
Gregor came to two opposing views of human nature.
Detail oriented.
Abstract thinking. Structuring ability
Risk taki ng.
In Theory X the manager believes that people are generally innately
Supportive. lazy and have no career ambition; they just turn up at work to get
money to live. People do not want to take responsibility; they are
Empathy. selfish and lack self-discipline. X people do not like change and to
Social contact. avoid this they will become an opponent or directly sabotage the
Social flexibility. Social interaction organisational work of change.
Self-control.
Confidence - trust.
However, in the Theory Y, the manager has the opposite opinion;
Competitive. people have a responsibility in relation to work - to be growth and
Influence. development oriented. Employees like to work, to exercise self-man-
Self-confidence. Pervasiveness agement and identify with organisational goals. Here the starting
Desire for freedom.
point is often the top elements of Maslow's Hierarchy of Needs.
Psychological
Physical energy.
A manager's view of human nature has an impact on the manage-
Source: Based on Havaleschka (2002)
ment style used; see the section on Leadership Characteristics.
The power base consists of different types of power and the man-
ager's opportunities to use this power, such as rewards in relation to
employees. The power yielded is due to the person's appointment as
a manager and their personality. The power base also addresses the
position, both formally and informally, that the manager can exer-
cise in the company.
Legitimate power - the manager has power to issue orders that em-
Productivity in the department is high and employees have a great
ployees have an obligation to accept.
dependence on the manager. The manager's negative attitude to e~-
ployees and their ability to perform the job is often due to a hostile
Information power - the manager has access to information that is not
public knowledge. culture] which often results in blatant aggression. Employees are not
very motivated to make an effort and react with indifference] apathy]
and repressed discontent.
Group power - the manager has collective support from a team or
group.
The democratic manager
The democratic manager is often referred to as 'the consultative
A manager can then apply the different types of power in relation to
manager]. The democratic manager's human perception. corre~ponds
employees] colleagues and the company as a whole.
to the Y-view. Employees and the manager collaborate In setting ob-
jectives forthe department and job content. Most of the topics come
under discussion in working groups] which define the methods and
principles for division of labour. They work together towards com-
mon goals for the department and company as a whole. Decisions
are often only made after they have been discussed with] and ac-
cepted by those involved. Collaboration is paramount: just as people
and performance are. The democratic manager sees himself as a part
of the group and uncritically passes on almost all information. The
manager tries to develop individual employees in the department and
support them in this process. High quality and efficient staff. are a
leadership Characteristics result of a democratically led group. With regard to culture In the
department] it is characterised as friendly] relaxed.] ther.e is a .feeling
Management style of well-being and cooperation. There is great satisfaction with the
results. Employees are not very dependent on the manager on a daily
Kurt Lewin]s. t.heory of forms of management is probably the best
basis. The manager is often all for self-management among staff.
known. He divides management into three types that express the way
leadership is exercised.
Self-management occurs when employees have been delegated re-
The three forms of management are: sponsibility and the opportunity for decision-making] so in their
daily work they function as their own manager.
Autocratic/authoritarian manager
Democratic manager
Laissez-faire manager. To use self-management the employee must experience:
Being professionally competent and have the desire for tasks
99
98
Laissez-faire manager
A laissez-faire manager is characterised largely by failing to be
present, often because they are not interest in the department. Their
view of human nature is not very pronounced, but may be a kind of
Y-view.You could say that there is passive or even no leadership. The
manager presents the problem and leaves the solution to the staff.
Laissez-faire managers generally lack interest in people and perform-
ance, and would rather staff do not contact them.
1.1 No respect for people and tasks. One can say that in this situation
the manager makes as little work-related effort as possible and has EXAMPLE:
no interest in employee welfare. The department survives by ac- The director of LEGO's facility management department is responsible for
managing the staff in the department at the parent company in Billund
complishing just enough to ensure that the department will not be
and its subsidiaries in the Czech Republic, Hungary, and Mexico. Although
streamlined away. The management style is very similar to laissez- LEGO try to create uniform rules for all employees, the cultural differences
faire leadership along with the inconveniences this causes. in the four countries means that management is different and reflects such
things as the employees' point of view at work. One could imagine that the
1.9 Management consideration for employees. A management style where manager's expectations of employees' autonomy, social zeal, etc., in the
the manager takes great consideration and cares about their employ- four countries are not necessarily the same. There may also be situations
where some tasks are to be completed faster than others: Here, it is ma-
ees. There is a huge desire from the manager's side that employees
nagement style that can be used in the different cultures/countries.
must develop and work well together. This leads to a comfortable In essence, a manager at LEGO will be democratic, but with certain
and friendly department, with a calm pace of work. sions in different cultures, a different management style is necessary.
103
These decisions depend on their style of management, and if they
are authoritarian, the manager will be positioned to the left in Figure order to take into account these employee considerations, the
5.6. At the opposite end, We find the laissez-faire manager, and the behaviour will be crucial. In this theory, the manager can
democratic manager will be somewhere in the middle and a little to supportive or controlling, and in both cases, their behavi~ur ca.n be
the right.
or weak. A combination of these creates four possible Situa-
which generate four different management styles, as the figure
What the theory is really about is that the manager could be in a
situation, where it is vital for the decision making process, to deter-
mine whether the manager is to the right or left in the diagram. If a nctrurtionot management style .
manager is able to move from one side to the other of the diagram, Employees are not motivated for the task and at the same time do
they will be a democratic manager, who uses situational leadership. not feel qualified to solve them.
The manager defines what, how, when and where tasks are to be
done. The manager gives detailed instructions for staff and closely
monitors task implementation.
Figure 5] Hersey & Blanchard's theory of situational leadership Participating management style .
Employees are professionally competent and reasonably well moti-
Strong
vated. Manager and staff share decision-making. The manager makes
decisions together with employees, and supports efforts towards
Supportive completing the task. The manager will have a consultant role.
behaviour
Weak
Delegating management style
Employees are motivated and competent to sol,:,e the task. The man-
ager gives only limited directives, and suppo:t .1:
not necessar~. The
manager leaves partial decisions and responsibility for completion of
Weak
Strong the task to the employee. The manager acts as a consultant.
Controlling behaviour
This role requires a manager who can develop strategies and targets
forthe company's various functions, coordinate and prepare detailed
plans for the necessary activities and consider their implementation.
The manager is systematic, has a sense of order, and likes to work
with detail. The focus here is short-term and the processes.
Although Adizes believes that all four roles must be present for effec-
tive leadership, there will still be management tasks where some roles
are more pronounced than others. To this end, he has, as mentioned
in Chapter 3, developed some codes to show to what extent roles
must be represented, see the section on 'Adizes' leadership roles ap-
plied to teams' in Chapter 3.
Example of the use of Adizes' codes:
Apart from the time factor, the amount of i~formation and the eco-
Change management. Projects in which major changes in the company
nomic impact, the decision-making process ISthe same.
take place, such as implementing a new organisational structure.
Figure 5.9: Rational decision-making.
Sales management. Managing a number of sales people and structuring
of the sales department's organisational structure.
Decisions
Who makes decisions in the company? Philosophically, we could say
that all do, because everybody is constantly making decisions about
what to do next. Not taking a decision is also a decision.
The third step is to find information on alternatives to discover the best al-
ternative. This is done by searching information, e.g., by asking your
colleagues, using your experience to think back to similar situations
in the past, look it up in a manual, etc.
on the situation, it may vary as to whom takes the de-
and it is very complex to generalise. However, looking at
There may be a danger that the information the decision-maker ob-
from the situation-based leadership model of Tan-
tains n:
ay not be .correct, only partially applicable, or they can be
nenbaum & Schmidt's theory and linking it with Lewin's leadership
expe.nslve to ac~ulre, so the decision is made based on inadequate
forms, the r,esult will be shown in Figure 5.10.
and Incomplete Information.
This requires a competence to act in order to decide and to some Lead er takes Leader gets Leader gets Leader gets Leader and group
extent, courage from the decision-maker. all decisions information information, collective or group alone
and provides from ideas and information, take decisions.
information employees and suggestions ideas and Leader provides
The choice of alternatives means initiating action and the decision-maker about these leader takes the from employees. suggestions information to
now has some experience in the type of problem to be addressed. decisions. decisions. Leader takes the from employee the group and
That experience helps them next time a decision has to be taken. decisions. groups. Leader acts as a
and group take consultant.
the decisions. Decisions are
It t.ak~s dr!ve t~ act and learning abilities to exploit this knowledge in delegated.
a similar situation in the future.
Decision-making Models
There is a variety of decision-making models that have their founda-
tion in various places. The actions resulting from these decisions will
depend upon the situation in which they were taken, both in-house
and in relation to the company's external environment.
117
Human Resources
RM is a series of activities that ~n individual company can irnple-
Management and individual managers have responsibility for ensur-
The main activities are considered below.
ing that employees are motivated and satisfied as a prerequisite for
them to be efficient and productive within the organisation. Chap- HRM process"
ters 3, 4 and 5 gave an overview of motivation and leadership models
ImplementatIOn. f HRM means that the company I initiates
d HR ac-
si
that can help the manager in improving conditions and results for 0 ..
. .. h believe are relevant. HR activities ea to some po -
their staff. For many companies, this work has a broader definition,
which is why they have established an HR department. ~:~~tlreess~~t:t:al~~d
HR results. Eventually, these HR results will lead to
some organisational improvements.
Organisationally, the HR department will often act as a staff func-
tion that provides advice and guidance to all departments concerning Figure 6.1: The connection b:t~:e~ ~_R~ ~n~ ~r!!~n~s~t~o~a}_
~esults
r - - - - - - - - - - - j
personnel matters. The HR department has the overall responsibility
for developing and implementing the company's personnel policy. HR
Performance-based rewards Motivation Profit
HR metrics Training and development Market value
HR includes all activities dealing with planning, acquisition, develop-
Recruitment Organisational commitment Market share
ment and termination of staff resources in the company (Kuvaas, and loyalty
2009). Teamwork Turnover
Staff appraisals Job performance Product and service quality
Training and . Turnover intention - - - - Customer satisfaction
In this way, the HR department's work is often the place where you development tactics Social environment Innovation and creativity
can clearly see the company's approach to staff motivation, struc- 360-degree assessment and cooperation Etc.
ture and management. Leadership development Etc.
HR strategy and internal
Consistent HR
Research in the field shows that it is profitable to invest in HR. The
companies that have recognised this introduce HR Management
Source: Kuvaas (2009)
(HRM). This means that managers must respect and work according
to the personnel policy, which the company has adopted. Thereby, it
is the vision to create a well functioning organisation with satisfied
employees. Internal results of HRM have been so successful that it The company mus t se lect an HR strategy that fits . its vision
hei HRand trat
rnis-
also has external effects on relationships with suppliers and custom- . If the company operates in different countries, t err s -
ers. sion. 5
egy should be adapted for each country. ome 0 f the parameters
f d'
that apply here are of a cultural nature - refer to Geert Ho ste e s
HRM can also be beneficial within the company. For example, if a cultural dimensions."
company introduces staff appraisal interviews and through these
they receive criticism from the staff. It could be the company were The HR strategy is the company ,s c.hoi orce 0 f HR
. activities, as shown
not aware that an employee is dissatisfied with their working condi- . F'Igure 51
In ., The list is not necessarily exhaustive.
tions. It may be the case that the situation can easily be put right,
so the employee is happy, even without high costs and no hassle. It How the company uses the activities and v:hat t~ey will .pu: into
would indeed be a win-win situation for both parties. t h em, .IS up to the individual company. Here ISa brief description of
HR activities:
On the other hand, in the same situation you could discover that a
group of employees have some skills that you need in the company, A performance-based reward is the ability to use rewards, if an employee
which you have never used because you were not aware they were makes an extra effort or achieves certain agre~d _performance tar-
there. gets. It can take the form of bonuses and commissions.
all in his head, while a larger company, such as Grundfos A/S, has
a detailed and written personnel policy, which is further divided up
according to job function. Most importantly, is that the company
Induction of new employees prepares its own personnel policies to suit its particular conditions.
It is important to us that new employees feel welcomed and quickly come to
function professionally and socially in the Immigration Service.
Personnel policy is the executive values, principles and operational
As part of your reception as a new member of staff, you will receive a
welcome folder containing useful information - and a welcome from our
guidelines, which the company provides as a basis for the manage-
director. ment and development of its staff (Stordal &S0rensen, 2009).
As a new employee you will be part of a mentoring scheme, so you always
have an experienced employee you can approach with both academic and Personnel policy is therefore a framework of staff resources needed
practical challenges. The mentoring scheme ensures that you receive a pur- within the company.
poseful induction to your specific work area.
As a new member of staff you will be invited to an informal interview with
both our director and our centre/deputy directors, just as you will come to There can be many objectives of a personnel policy:
participate in an introduction day, where all new employees are introduced To attract talented staff
to our values, working methods, etc., and are greeted by key people within To provide a framework for employees
the organisation.
To provide a framework for managers
Personnel Development
To regulate conduct within the company
The Immigration Service is a job in continual development, which places
To show partners how the company treats its employees inter-
heavy demands on employees. You are expected to be efficient, professional nally (positive signal value) . .
and service oriented. So management can use it in their managerial work (communi-
It is of great importance to us that you as an employee experience both cate attitudes, increase commitment and motivation)
professional and personal development. We are very aware that you develop To build a foundation of common values, whereby bringing em-
the right skills, both to perform your job, but also so that you can take
ployees closer to each other and closer to the company.
advantage of the opportunities our area offers, including the 6 monthly
internal course catalogue and internal vacancies. There are also opportuni-
ties to apply for posts in the Ministry of Integration, as we have a rotation A central factor in the development of a personnel policy is that it
agreement with other ministries. takes its root in the company. This can be done by management and
As an employee of the Immigration Service, we will do our best to sup- employees working together to create it and the outcome will be
port you in turning your qualifications into skills.
communicated to all company employees.
Your development in the Immigration Service will be linked closely with
future requirements and expectations of our work place. We are working,
for example, with new ways of organising the work (teams, delegation of Stakeholders of the policy are all employees, from directors to the
responsibility and competence, more project-oriented and Lean) and all man on the floor, but also future employees and external partners.
employees are expected to participate actively in all processes. We work
with ourselves as a workplace and as an employee you must have the desire The contents of a personnel policy
to evolve through open dialogue with your manager about your professional
and personal development. Overall, the three areas can be divided in main and partial policies.
Our focus is always on your continual progress, among other things,
through your annual staff appraisal interview and by providing you with The main policy area outlines goals and general attitudes.
appropriate further training, possible participation in talent programs':_jnd I
through learning on the job by offering you exciting projects. Partial policies are the specific part that is tangible and can be princi-
~~"'==~~~==--=<'::===='=~=~~~';T--=~= __
~""",,,,_~ ~~ pal for the company's actions.
Personnel Policy
One area ofHR is personnel policy. All companies have one, but they
all have different descriptions. For example, in a small building busi-
ness, there will often not be anything in writing, as the boss has it
'{ I: !'.::
I /\
3
12
- Marketing of the - information Rules/procedures in the partial policy: All appoi.ntments to permanent
- S~rliorschemes
company to potential -;..Green policy and work posts must occur after prior notification to the ~nlon representatlv,e, follo-
(~canhg down,
candidates environment d by external and internal job vacancy advertisements. Notification must
co.nsula.nd light
- Recruitment Aicoho] and smoking include a needs analysis. In exceptional cases, a position maybe filled solely
duties)
- Induction - ~qualrights based on internal job vacancy advertisements.
- L~y()ns. As soon as possible after appointment, permanent teachers start on a
- Holidays', days oft; - Pension schemes
sic::krl~s~,maternity paedagogical foundation course, unless they have already completed one
- Self~rance interviews
Hours ()fwork,travel before employment. ,
polityandteleWorking The academy naturally likes to see its staff con~lnue to learn and educate
-r .. Salaries,ipensions, fringe themselves. However, the school cannot automatically guarantee that ac-
.b~~etits and employee quiring further theoretical qualifications can result in a change of employ-
services ment conditions,
- StaFfappraisal
irlt:erlfiews Overall purpose of the personnel policy: Here ar.e some general conditions on
l"r~rrlingand
.-C .•·...
Business Academy Aarhus' idea of the policy.
development.
General:
The academy's management and employee representatives designed the
personnel policy at Aarhus Business Academy and it applies to all who have
their primary employment at the academy - both management and staff
It is a very important prerequisite for the academy to live up to its own
objectives [."J
Main Policy:
The organisation and personnel composition at Aarhus Business Academy
shall have the necessary skills to solve current and future projects, in order
to achieve the academy's mission and goals.
Competent, committed and responsible employees are Aarhus Business
Academy principal asset.
Discussion Ouestions:
Partial Policy: What is most important with staff appraisal interviews in a com-
The starting point of recruiting staff at the academy is an assessment of the pany?
school's short and long-term requirements, as well as established needs. What can HR contribute to a company?
The decision of which applicant will be employed in a particular position, What is the link between managers and HRM?
is taken on the basis of a needs and requirements evaluation in conjunction Which HR activities are most important for a company?
with an assessment of the applicant's qualifications, so that the best quali-
Is it true that a personnel policy promotes motivation in the com-
fied candidate is selected. For the sake offlexible use of staff and the most
secure working conditions for employees, newly recruited members of staff pany? . ?
to permanent posts should have a broad range of skills. What is difference between HR and a personnel policy.
We seek to provide the best possible job security [... J
Appendix
development plan as set out in Annex 1, and submits them for approval to
the manager. Both parties keep a copy of the agreement.
Exam pie of the content of a staff appraisal Both parties are responsible for ensuring that the agreements made jointly
during the interview, are followed up.
interview:
1. Follow up on last year's development agreements
Guidelines for a staff appraisal interview
The intention is to discuss the realisation of last year's agreements and goals.
How has it gone? How has it gone with the agreed development goals?
Purpose
It is important that there is mutual agreement about the purpose of the ap-
Good experiences and successes since the last interview.
praisal interview's expectations.
Business Academy Aarhus' purpose with staff appraisals is that it will
2. Work-related issues
serve as a good, honest interview, where the common aim is to create goals
To highlight the employee'S strengths and development potential as seen
that support employee development and motivation, and produce results
from the employee and manager's perspective, and discuss job wellbeing.
for the employee and the organisation. Staff appraisals are interviews where
Before the interview, both employee and manager must decide their own per-
the manager and employee exclusively discuss employee development and
ception of the employee's good performance, strengths and competencies.
therefore they are not used for salary negotiation.
In what situations have you experienced things are going well in your work
Before the interview
and that you use your skills, qualities and competencies in a good way?
The manager has the responsibility to initiate the appraisal interview, but
both sides have equal responsibility for the realisation and end result.
2.a. What characterises such situations?
Both the employee and the manager must have thoroughly planned and
be prepared for the interview. There is a questionnaire for both the em- What do I and your colleagues do in these situations?
ployee and the manager to fill out beforehand. What strengths and qualities do you use in these situations?
Devote ample time to the interview. Experience shows that it takes bet-
ween 1-111:2 hours and there should not be any interruptions. 2.b. What is it that I, your colleagues and students see when you do a good
The interview is based upon equality, but it is a conversation taking place job in this way?
between manager and employee. Thus, it is not between equals. What will it take for your working day to be marked by more ofthese
Both parties will seek an appreciative, open and honest approach with a kinds of situations?
focus on the interview contributing to the employee developing in a positive
direction and that the manager supports them in this. 2.c. What would you like to contribute to create change in that direction?
The interview takes place in a professional context and within a fra- What changes would you like to introduce?
mework of what the planned interview should and must be about. How do you experience the correlation between your job, your skills and
Any practical problems concerning cooperation or job performance your work-time?
are expected to be discussed as they arise, and not saved for the appraisal
interview. 2.d. How can you tell that I have found that things are moving in the desired
Similarly, it is expected that throughout the year there is constant dia- direction?
logue between the individual employee and manager.
3. Strategy and goals
During the interview The intention is to provide maximum consistency between the employee's
The interview covers the previous year and implementation is based on job and Business Academy Aarhus' strategic objectives to discuss aspirati-
the notes the employee and manager wrote in their questionnaires. The ons and the need for new challenges, together with ideas for innovation and
conversation is confidential. It only takes place between the manager and to get a long-term and open dialogue concerning the employee's wishes and
employee. ideas.
Provided you have given your consent, others may be informed of certain
parts of the agreement, for example, professional development. 3.a. How do you see that your work contributes/may contribute to Aarhus
Business Academy's strategic objectives?
After the interview
What is needed to strengthen th is relationship?
The employee writes a summary of the interview and all conclusions reac-
hed, as well as agreements on projects, job and skills development in the
3.b. What goals and aspirations have you for your work in the coming year?
What are your expectations of Aarhus Business Academy and how can
you contribute to the academy's continual development?
Do you have any innovation ideas regarding the organisation of work in
your department, your team or division or innovation in other func-
tions?
What would you like to do be doing in five years time?
Part 2
4. Cooperation Issues
The intention is to have an open dialogue concerning the working relation-
ship between manager and employee, and the employee's relationship with
Assessment of corporate
colleagues or others at Aarhus Business Academy.
4.b. How does our cooperation function? Aims and depth: The reader must be able to assess the co~p~ny's
structure and networks in relation to core values and objectives,
4.c. What do you think managers and colleagues should do more of? including internal targets for efficien? an~ fl.exibility and exte~nal
What can you do to ensure a good work environment in future? objectives such as innovation, internationalisation and partnerships.
5. Miscellaneous
The intention is to accommodate opinions and desires not covered in the
other points.
6.a. What can we arrange in the way of more precise development and trai-
ning that would be relevant to your job at Aarhus Business Academy?
6.b. Do you have any long-term wishes for your job and skills development,
which may be relevant to discuss?
Development plan
There are many examples of Danish and foreign companies who have
a clear position on corporate culture. They work constantly to im-
prove, monitor and actively apply it in their daily work.
'30
We will:
Prevent pollution, injuries and accidents in connection with the
Kamstrup company's activities and products
Values Use energy, water and materials wisely
Kamstrup's fundamental values and attitudes support the development of Be aware of relevant regulatory requirements and ensure compliance
the decentralised organisation and all employees are committed to cus- with these
tomer orientation and decisiveness. Set targets for continuous improvement
Educate our employees and encourage them to actively take an interest
Customer Orientation in the outside environment and the work environment
It is important to us that all employees see themselves in a supplier/cus- Communicate openly on environmental and health conditions, both
tomer situation, where the next step is a customer who must have their
internally and externally
expectations met. We demonstrate credibility and responsibility to keep our
Use subcontractors who are environmentally responsible
promises to clients, colleagues, work-related tasks and the environment.
Ensure that suppliers working with Kamstrup live up to relevant regula-
All employees in Karnstrup must contribute to our customers experienc-
ing good quality. tory rules and Kamstup's own rules.
the degree of motivation, direct and indirect expectations that are Corporate culture
effective from the organisation's side and much more.
As previously mentioned, many external and internal factors form
The organisation makes some things formal, while others come to be corporate culture, which will be discussed later in this chapter. Th~re
informal over time - this is known as organisational culture. are many different definitions of corporate culture; the following
definitions are used in this book:
The concept of corporate culture appears in literature: It is consid-
ered as the overall culture of a company, but as companies consist 'A dominant and consistent set of common values, driven by symbols
of a number of departments/organisations, there may be various such as stories, myths, legends, slogans, anecdotes and fairy tales'
organisational cultures in a company. (Hansen, Heide & Riis, 2000).
This chapter will provide instructions on how it is possible to analyse Corporate culture is a way to understand an organisation or s~me
and change corporate culture. With organisational changes within parts of an organisation. The common values that .are determined
the company, there will always be interaction with the organisational and accepted in the corporate culture help to determine what proper
cul~ure. It is up to management to make organisational changes, behaviour is, how to relate to each other internally and externally,
while at the same time considering what it means for the culture: and how the organisation perceives itself in relation to its surround-
Can it be strengthened, or will it deteriorate? ings.
With employees all over the world understanding and accepting different
Cultures and religious beliefs is a natural part of our mentality and conduct. Strategies, goals,
This respect for diversity is reflected in everything we do and we try to activities and routines
ensure that individual departments and employees have the opportunity to
follow local customs and traditions.
Fundamental values
Perceptions, thoughts, feelings,
Employees are our most important asset and we strive to create a chal- expectations of the com pany
lenging environment where as far as possible, everyone has control over
their work and even plan their career based on skills, achievements and
opportunities. Source: Bakke og Fivelsdal (2004)
Source: www.maersk.com
135
EXAMPLE
Most people recognise the logo of the now global company JYSK. Lars
Larsen, the charismatic founder, is an artefact from his activities and media
performances. Virtually everyone knows through him and the words 'a
great deal', what the company stands for. He has also strengthened the The cultural web
company's brand by being the only person who has published a book about To understand what creates a corporate culture, among other things,
himself, and then distributed it to all households in Denmark.
the organisation can be analysed using the enlarged cultural web.
Level 2. Values. The values that apply in the organisation.To under- Figure 12: The cultural web
stand these values one must normally have been in the company for
some time. How is the tone, how is contact between managers and
staff, how do you act externally: Do you see opportunities or prob-
lems?
EXAMPLE
In Fetex, the structure is clear, because employees in each shop are dele-
gated responsibilities. Each individual is responsible for certain product
categories, there is an informal tone between managers and staff, and the
staff is friendly and helpful to each other and to customers.
A variety of internal and external conditions determines the corpo- Long-Term Orientation (LTO)
rate culture. The traditional cultural web focuses mostly on company How much thought is there about the future and is it planned for?
conditions, which directly or indirectly, the management of the com- Is it a culture that lives and acts here and now, or is it a culture and
pany may have affected. thus a population, who think further ahead?
How corporate culture is put into practice, is also a product of such What Hofstede describes are some common, national culture traits.
factors as national and regional cultural conditions, industry and In each country, there are also regional differences. Even in such a
market conditions and individual factors. This is illustrated in the small country as Denmark, there are significant cultural differences,
outer ring of the enlarged cultural web model. depending on whetherthe company is located in Jutland or in central
Copenhagen.
National and regional culture conditions
How is society's culture? How do we see our fellow man? Is it a
culture where there is great emphasis on the individual or a group?
Geert Hofstede" is a person often referred to when it comes to na-
tional cultures and differences. Hofstede describes national cultures
through five cultural dimensions.
Masculine or feminine dominance. In a masculine culture status The people working in the company have a great affect on corporate
symbols are important in showing the world that you have power; culture, because culture is, after all, a product of the staff's values,
there is focus on career, salary and benefits. In a more feminine cul- attitudes and behaviour. Their age, education and gender influence
ture, there are values such as job security: Good, safe and meaning- culture. What values and attitudes does the staff have? Is there any
ful work conditions. subculture in the company, for example, a sales representative cul-
ture, a workshop culture or an entirely different culture among the
Uncertainty Avoidance Index (UAI) administrative staff?
Are there large structural needs, or are people happy not knowing
the future work situation in detail? The six areas of internal culture
The followi ng describes briefly the six internal areas that according to
the cultural web, affect which corporate culture the organisation has.
The family is characterised by the manager being the influential party, !f the company's environment is very dynamic, then an ongoing ad-
but they show great interest in their en:ployees, more ~h~n they do Just~ent of the corporate culture is a necessity for the company's
for the tasks. There is a close relationship between participants, but survival. The surroundings and the internal situation also affect the
it is not necessarily visible to their surroundings. The manager is 'the culture and the speed of its adaptation.
father/mother', who looks after the family's wellbeing, but who also
takes most of the decisions.
Fundamental values
The four culture types are often used throughout the whole com- Perceplion5,thoughts,~eling5,
expecratlonsofthecompany
Internal
pany, but in many cases, several types of culture are represented in =~~- ~=~-~ ..
=~~---"-..~~~=~. ~--
adjustment
When assessing the symbols of the company and comparing Ethics is about what is good, or rather, what is considered good.
against the goals it has for its corporate culture, you get the Ethics is the theoretical and philosophical reflections on proper be-
portunity to define what course of action is required to achieve haviour and thus principles of how a society believes we should act
desired culture. Here you are forced into putting words to within the framework of what can be done in the present or future,
actions that must take place to change the culture. In the figure, it usually with strong influences from the past. Unlike morals, ethics
called the functionalist perspective. are, in practice, abstract and theoretical. Ethics have a strong subjec-
tive element as well and it is therefore impossible to give a specific or
The result is specific changes, both externally and internally. An ex- definitive definition. To do this is to take out a patent on good, an act,
ternal adjustment may be a new logo, a move to a more fashionable which historically has never proven to lead to anything good (Nielsen,
address, new standards for how to treat customers, etc. Internal ad- 2001).
justments could include a new organisational structure, training
employees in a particular direction or change of dress code. Today, companies work extensively with ethics and morality in rela-
tion to all their stakeholders, and in practice, it has meant that com-
panies have an interest in having a strategy in this area. In this con-
Ethics in a business context text, the concept of Corporate Social Responsibility (CSR) emerged.
Ethical issues related to the company is a broad topic, but can
kept within the boundaries contained in the stakeholder model. Today CSR covers all three areas of the stakeholder model.
In that way, there are three main areas: Corporate Social Responsibility (CSR)
- managers and employees in the company, Often the result of a company's CSR work is documented in the form
close environment in terms of customers, suppliers, competitors, of a 'Code of Conduct'.
partners and owners,
remote environment, the surrounding community, national and
international. EXAMPLE:
Chapters 3-6 have already dealt with the topic of ethical charac- A part of the complete supplier guideline
ter, which is concerned with how employees, as individuals and in Summary of our Code of Conduct
groups, exposed to various forms of management are treated and
Preface
treat each other. Here standards and morals are often the cause of We work on a basis of mutual trust on goods that are delivered to us. Ever
this. sinceJYSK was founded, we have given top priority to cooperation and trust
between our agents, our suppliers and ourselves, and we believe this forms
Ethics, what is it? the basis of healthy, profitable cooperation.
Cooperation includes clear responsibilities and agreements. That's why
we ask you to acknowledge the agreements made, with the various condi-
EXAMPLE: tions and principles we put forward for our mutual benefit, just as we
According to Anne Skare Nielsen, Institute for Futures Studies: consent to meet our part of the agreement.
We expect our partners to act in our mutual best interest to ensure that
"Business ethics and social responsibility are concepts that give every sign this code of conduct results in positive actions, not just words.
of not just being a trend, but an integrated feature of tomorrow's successful
company, whether you want to call it moral obligation, human rights, su- Source: www.jys/c.dlc
stainable development, charity, sacrifice, community orientation, corporate
social responsibility, corporate governance, total quality management or
something else. All the concepts arise from ethical consideration, but what
One of the best-known and most accepted models ofCSR is Carroll's
are ethics anyway? Is it nothing more than a rhetorical slogan invented by
some ancient Greeks, that you can throw into a debate to strengthen your Four Part Model of Corporate Social Responsibility, developed by Archie
own position?" Carroll. He sees CSR as a concept that can be divided into four com-
mon aspects: Economic, legal, ethical and philanthropic responsibil-
;",i
147
means that. the company must act in its stakeholders' interest , re-
The table is divided into four areas as shown in Figure 7.6, but the
spect universal human rights, and contribute to what is best for so-
location of each CSR is debatable, because legislation is very differ-
ciety, in order to be accepted as an ethical and socially responsible
ent depending on where in the world you are. Therefore, the areas
company. Companies are hereby ordered to demonstrate ethical
can be moved around.
'49
companies must abide by. The second area contains the considera-
tions on business ethics that the company must deal with (Crane &
Matten, 2007). In the 'gray area', it is up to companies and their
industry to define ethics if they wish to exercise ethical responsibility.
Ethical decisions
As shown, the conditions for em I . Companies make ethical decisions to ensure that they will have an
stakeholders' company p oyees In the Company and its
can vary greatly Th . h image as an ethical company in relation to their stakeholders and
must make a CSR policy hI· at IS wythe company the outside world in general,. There are also some companies that
' so t e sta<eho/d .
t h e company's CSR contains. ers are In no doubt what will further enhance this image by making ethical and environmental
accounting and reporting.
CSR decisions
Those who are th d .. When is a decision required that must address ethics?
. e eClslon-makers for CSR· h
caslonally find themselves in h. I . In t e Company will oc- Ethical decisions are decisions concerning what is right and what
h
ethics and legislation.
an et rca dilern
as to be described. One of the dilem . rna
h
v:
en CSR policy
mas ISthe relationship between
is wrong. Through an identification process, it can be determined
where exactly situations of an ethical character arise, and whether
there is an ethical issue at all.
Figure 7.8: The relationship between ethics and legislation
Although, based on the company's viewpoint, there does not seem
to be a moral issue, this is perhaps not the case for all parties. By
looking at the following two considerations, it is possible to identify
whether there is an ethical issue to be dealt with:
The decision seems as ifit will have a relatively big effect on others
One or more persons see the decision as ethically appropriate.
If the answer is yes to just one of these, it must be assumed that there
is an ethical issue.
Legislation is by definition th .. I
deoes not cover many ofth minima accept bl b h .
I. a e e aVlour. Law
e mora Issues b th . h·
company. Business ethics beg· h 'I o. Wit In and outside the
ethics only come into In w. er~ egistation ends. Therefore
.. corporate thinking fi . , When it is recognised there is an ethical issue, a moral evaluation
non, Figure 7.8 consists oft or areas with no legisla-
. woareas:Oneofl . I . is made, after which it can be decided what is morally appropriate
o fb USlness ethics. The I . I . egis ation and the other
. egis atlve area cover th . to do in the situation. When the first three stages are completed,
national and international I . I. . s e entire complex of a moral action can then happen. The model distinguishes between
egis atron, I.e., all laws and rules that all
knowing what is right, and then actually doing it. An example of this is
150
j; I
151
What is innovation?
"[I]nnovation; development of a new idea and its
realisation in practice. Examples could be a new product's
introduction on the market, introduction of new technical
solutions, routines and practices in both private and public
The 'Oh Abe' concerts in Denmark have had a recession. At one time the
organisations, new forms of interaction or incorporation
were very ~opular and CD's and merchandise were produced for the ~on- y
~ert~, but It rained for a couple of seasons, and the audience stayed away. of new customs and rules of conduct in society. The core
i,i t t e same time, there was not much innovation with the concerts. of innovation is that the new idea will have an actual use.
II The target g~oup was young children and their parents. There is reat fo- The Austrian-American economist Joseph A. Schumpeter
ii ~~s on childr~n s everyday entertainment in children's television br~adcasts. introduced the concept of innovation in a recent economic
~ ere are vanous celebnty dolls like Bamse etc The ci . I
Ii h' hat i .. ' . e circus ISa so some- theory 'in 1912. According to Schumpeter, innovation is a
I t I~g t at ISvery exciting for this target audience, just as a visit to one of the
II,' various amusement parks acr th . . constant inventive element, but consequently, a destructive
Ab' Id . oss e country IS also eXCiting. Eventually 'Oh
~r e cou only offer music and a little festival atmosphere. element in relation to the existing economic order; old
The Muscular Dystrophy Foundation, who arranged the 'Oh Abe' c companies die and new ones are born; competitive
cer.ts, had hto d~sco.ntinue them and find a new direction to take. In co~:~o- behaviour and social life changes."
ration Wit DR s Big Band, the innovative process began Source: Den Store Danske Encyklopcedi (The Great Danish Encyclopaedia)
t ~R:s Big Band and the Muscular Dystrophy Foundati;n would really try
o e Innovative - combining different elements into one whole entity.
This definition of innovation shows that there is more to innovation
Elements: than just being creative. An innovative person or organisation must
- TV stars be able to have a new idea and implement it into practical new prod-
Circus ucts, market approaches, collaboration, production processes, etc.
Play area
Music
- Avoid a fiasco due to bad weather. Innovation versus creativity
The Muscular
Many people and organisations are very creative, but the ideas are
. Dystrophy . Foundation
. writes ' "Th e woe
h I'd I ea ISt
. h at we
want to build a non traditional circus performance that moves the bounda- rarely put into practice, they lack the ability to realise the ideas into
hav of what normally takes place in DR's child universe. The audience will actual products and actions. Therefore, the innovative person must
ave the opportunity to meet presenters and characters across otherwise also have skills in project management/planning, attract, and retain
very separate worlds. ~haracters are transformed into circus performers relevant stakeholders.
and together they provide a narrative that sparkles with music game '
fa~tasy and all the good songs. And then the DR Big band hel~s to bis~d the
w. ole perfo~mance together," says Signe Lindkvist, DR's Children's Ent _
Figure 8.1: Innovation's elements
tamrnanr Editor. er
Circus
. Summarum
. bec . I .
ame a uruversa expenence for 3-80 year olds
It ISall packaged In a creative and happy website selling tickets: .
:~5.
D Bandet
Source: www.circussummarum.dk/cms.ashx
M _ MUSKELSVINDFONDEN
Creative destruction
leave our 'comfort zone' and step onto uncertain ground, challeng-
New companies arise, new facilities services and products are in- ing our surroundings and ourselves.
troduced to the market, new processes and management practices
are introduced, and continuous innovative elements occur. These Our brain has two halves; the left side is where we think logically and
innovative elements naturally lead to some products, facilities serv- analytically and the right side is where our emotions and fantasies
ices, businesses and business processes being replaced. This is what are stimulated. What often happens is that we get an idea in the
the economist Schumpeter called creative destruction, i.e., to build right side of the brain, but very quickly, our logical, analytical left
something new means some of the previous routines, structures, side says, the idea will not work, it is no good, it is too uncertain, or
products, etc., is torn down and phased out (Heilbronn, 1953). Here we have never tried that before, etc.
the evolution from 'Oh Abe' concerts to Circus Summarum is a good
example of creative destruction. Later when w~ work more with idea development, one of the key
areas of the creative process is to separate the impulses of the brain's
Many manufacturing companies previously had a clear division of two halves.
labour between those with white coats - the supervisors - and those
in blue overalls - the professional and unskilled. The supervisors Company level
planned, allocated tasks, controlled the work, and hired and fired. "You can't survive on the success of yesterday," wrote Tom Peters in
The organisation of work processes has proven not to be optimal his book The reinventing work series SOList books (1999). Tom Peters be-
in many organisations because the supervisor can quickly become lieves that when companies stop innovation and development, they
a bottleneck and he may not necessarily have the best knowledge begin to phase themselves out. If companies become so complacent
to plan and solve the tasks. The previous working practices were and secure in their position that they lose their innovative abilities,
exposed to creative destruction and new more flexible working ar- then they will ultimately lose a foothold in the market and disappear
rangements have emerged, such as autonomous teams, matrix because of the aforementioned creative destruction.
organisations and others, see Chapter 3 on groups, Chapter 4 on Product lifecycle for most products becomes shorter and shorter
leadership and Chapter 10 on organisational development. Competitors are quick to copy the company's products and serv-
Ices
New technologies and new market opportunities arise
Different levels of innovation
Information is distributed globally online
Innovation theory talks about three levels from which the innova- Many customers are not as loyal as before
tive process has its source and the opportunity to develop. The three Globalisation in general.
levels consist of input from Individuals, Companies and National
interests. All these factors mean that companies/organisations must continu-
ally focus on planning, developing and introducing new services and
Individual level products on the market.
How does an individual get new and different ideas? We as people
tend to stay in familiar thought and behaviour patterns, and act as In many companies, the logical and analytical approach to problem
we always have done. Be it the way we meet other people, or the way solutions provides status. When a new and different idea comes
we respond when some problem arises that we cannot immediately along, there are many who quickly come up with reasons why it can-
solve. How we behave under pressure, or how we respond when deal- not be done. The opinions of these idea killers can vary, but the ef-
ing with something new and unknown, etc. fect is often that work on the new idea will stop.
It lies deep in human nature to be on the safe side. When we as peo- Below are some examples of idea killers. You can certainly make the
ple must find some new ideas or try something new, it requires a list much longer.
great deal of effort from individuals to dare to embark on the new
and untried. If we want to be more innovative, we must be willing to
159
tive. However, some put limitations on themselves and therefore do To promote the wealth of ideas you can use differen~ meth~ds. One
not come forward with their new and unusual ideas. To overcome of the best known methods is brainstorming, where In the light of a
these barriers it is necessary to work with some sort of idea develop- specific problem, as many ideas and suggestions are made as pos-
ment template.
sible.
As mentioned earlier, our brain is made up of two halves. The left Another tool are word chains, where a person from the group work-
side manages and controls our logical and rational behaviour, while ing on the problem, says a random word and the ne~t person in the
the right side provides impetus and drives our creative behaviour and group also says a word. This is repeated about 20 times, so that a
emotions.
word chain of20 random words is created.
In our society and culture there is a lot of focus on and prestige in Subsequently, one word at a time from the word chai.n is int~rlinked
using the brain's left side, i.e., appearing logical, rational and control- with the problem. This entails the group abandoning their usual
led. Various boards and committees have killed offmany a good idea, thought patterns, and new angles and ideas arise.
springing from the right side, early, because immediately the rational
left side of the brain questions the idea: What are the costs? Has a
cost benefit analysis been made? What about the legal issues? Etc.
There are many methods that can be used in connection with getting
ideas.
In the divergent phase, you must put your inhibitions and restrictions
to one side: All ideas are good ideas. Create an environment where
everyone dares to present the ideas they have. In the divergent phase,
you must only use the right side of the brain, i.e., when you get an
idea, do not sit and think: Is this idea good enough? Is it too silly? Is
it realistic? Etc. All ideas are good ideas.
That is the way the wild, crazy idea sometimes provides inspiration
for new angles and ways of working, so the idea that initially seems
completely unrealistic, can provide ideas and idea impulses to work-
able solutions.
The divergent phase is also sometimes called the green zone, inspired
by organic, sprouting, new life. To be continued on next page
Eventually some of the ideas might be interlinked in one overall
idea.
Sources of innovation groups, etc. Rather than seeing it as a defeat,' failure can turn into
learning from which new opportunities arise. A classic example ~f
"The most successful innovations are the result of a deliberate and
the unexpected is the yellow Post-it®, which was invented by acci-
targeted search for changes and problems in society" (Drucker
2007). ' dent. The company had developed some glue that did not stick as it
should, where, after some thought, someone came up with the idea
of using it for the now so familiar yellow labels.
The American management professor Peter F. Drucker (1909-2005),
has worked most of his life with and researching how organisations
Source 2. Incongruities
c.an be.come .more innovative, and the sources to be used in conjunc-
Incongruities occur if there are some undesirable habits and routines
non with deliberate and structured work with innovation.
in the company or industry. An example might be if there is some dis-
cipline boundaries at work, so that only some groups may per~orm
The sources in Figure 8.5 are areas Drucker believes companies
certain work functions. Another example: In the past lorry drivers
should monitor in a systematic and structured way to capture new
spent many driver hours sailing with various shippi.ng con:pani.es.
signals internally and externally. These new trends and signals must
Nowadays, lorries do a lot of transportation by leaving their trader
then undergo a creative process in order to become innovative op-
on the quay, and another lorry drives it onboard. When the ferry
portunities for the organisation.
reaches the other side, a second lorry is waiting and continues trans-
portation.
Drucker's Seven Sources of Innovation
Source: Drucker (2007) 22. Lean is to streamline the organisation, thereby securing the greatest possible value creation with the
fewest possible resources.
,68
i !.: ,69
The German chain SCHLECKER has made it their business to Spot
small and medium-sized cities, where the local grocery shop closes. Some believe that instead companies should work to m~ke. a creative
SCHLECKER move into these towns with shops selling non-food and innovative environment available to employees. This IS done by
products. They now have over 14,000 shops and are starting to enter looking at the seven sources of change, but also:
the Danish market. Employees
Organisational culture
Source 6. Changes in public perception National standards and values.
How consumers perceive things. This perception is not necessarily
based on real facts, but often on emotions. It may well be that the Figure 8.6: The innovative workplace
number of domestic burglaries is falling, but people feel insecure, so
the sale of burglar alarms increases.
It is the innovative company's mission to notice these new trends
and tendencies. Is it possible, for example, to find new business op-
portunities based on the increased focus on CO emissions and sus-
2
tainability, or the general focus on health, etc.
Source: Own design with inspiration from Buchanan & Huczynski (2007)
Source: Own design with inspiration from Buchanan & Huczynski (2007)
The following tables explain the factors that will help increase and _~~?~~ni~_t~oiL __"~~~_~~~_~~~~~~i_<>._~_,"_____ ,~_~, ~_ .._
reduce the creative, innovative environment. Both the enabling and
Challenges ~eopl~arealienatedand radiate, indifference. The job is'
without challenges and apathy prevails.
containment factors in the table are partly concerned with employee
People are passive, rule-bound and eager to linger in their
attitudes and opinions, and partly about the company's openness to well-established and limited job situation.
take initiatives up and process them.
Proposals will be quickly dismissed with idea killer ar-
guments. The usual response is about fault finding and
Figure 8.7: Innovation enabling factors obstacles.
Trust and openness Very bad environment of trust. People are suspicious of
eachother.afraid of maki ng mistakes and afraid of get,:,
ting their ideasstolen.
Dynamic and " Slow pace without surprises. No new projects or plans
People are'ieeking contact, give and receive information
initiative for change. Everything is as usual.
without hindrance. They discuss problems and tasks,
make decisions and take initiative. Playful and humour Heavy and serious atmosphere, rigid and sombre. Jokes
are not acceptable.
People listen to each other. Ideas and proposals will be
received in a positive and constructive manner by both Debate People follow the recognised and authoritarian
managers and colleagues. without questioning them.
'73
Conflict
Personal and emotional tensions are
management
Coalitions are made setting traps for others. There
gossip and a risk of slander. A bit of a warlike
environment.
Taking risks
Caution and hesitation is prominent in relation to
initiatives. People work on the "safe side", "sleep on
and let a committee work with ideas before decidi
Idea time
All of the working time is planned and specified in
The workload means that there is not room for
thiriking in daily lif~.
Source: Own design with inspiration from Buchanan & Huczynski (2007)
Discussion Questions:. .. an ?
What is meant by innovation capability of a comp y. I.
What organisational issues are invol~ed when it comes to wor<mg
towar ds the company being innovative?
.. ">
. eant b Ythe term 'creative destruction. .
Whal t.IS mh Tiom Peters talks about different levels ofinnova~lo~.
Exp am w y . . . h th indi-
Characterise the individual level and combine It Wit e
As an analysis tool, we can look at how the employees act, and thus
vidual factors in Chapter 4.
assess to what extent containment or enabling innovation character-
istics are prevalent. What are idea killers? .
H w do ou avoid idea killer behaviour? ..
W~y is t~ere a big difference between the desires for mnovation
It is then up to the decision-makers to change the culture of the com-
d ding upon national cultures? .
pany. This can be done from tools previously discussed in the book
epen. I'
Descnbe the corre anon e b tween the .12 Principles of Innovation
about teams, individuals, motivation, leadership and corporate cul-
Governance and the innovation enablmg factors.
ture, because it is all of the themes that lay the foundation for the .. ?
company's ability to be innovative. What is meant by creativity. . ?
What can we use innovation types for In a company.. tant
Discuss which of Drucker sources of change are most Impor
How the company will come to function and look in the future de-
to a company.
pends on these assessments and the changes that the company must
undergo. We give some suggestions to what changes can be made in
the book's third part on strategy implementation.
Part 3
Strategy Implementation
Aims and depth: The reader must be able to identify different ways
to change the organisation and identify various reasons for the ne-
cessity of organisational development.
Organisation Strategy
Lodam
For over 40 years, Lodam Electronics A/5 in Senderborg has designed,
produced and implemented customised, electronic regulators for climate
control systems for a wide range of customers worldwide. In 2007, Lodam
became a member of the Bitzer Group, one of the world's largest manufac-
turers of refrigeration techniques.
Lodam has a clear goal to be innovative. In 2007, they came 3cd in the Da-
nish Innovation Cup and they have the goal of a permanent position in the
top ten. As a workplace, their vision is to be among the ten best workplaces
in Denmark, based on the 'Great place to work' assessment.
Knowledge sharing and openness are two of the tools, among other
things, that have secured the company moving from 12th to 3cd place in the
Innovation Cup, and it is also partly due to Lodam introducing weekly meet-
ings, where employees brief each other of their projects.
"The meetings allow knowledge sh ' The starting point for the outside-in perspective is that the company
you are invited to share your kn =
la~ng be perfectly legitimate because
your knowledge while prev nti ow th ge with others, The goal is to share must adapt to the market, It is therefore key market trends, which
, e Ing ot ers from h ' k define where the company should position itself. Management's abil-
position of power" said CEO 1(' , uSing t etr nowledge as a
, ' Fistlan Strand The co h I
meeting on Wednesdays wh I ' mpany 0 ds a weekly ity to understand the market and position the company optimally is
, ,ere emp oyees and '
current projects, trips meet' d management can discuss crucial in achieving a competitive advantage, The basis for this way
like a small thing it h~s IngdSan much more, Although it may sound
, create more ope d of thinking about strategy are the surroundings and the market being
leagues are doing, nness an awareness of what col-
relatively transparent, It is therefore possible to implement a quali-
"We have seen that the meetin shave ' ,
fied external environment analysis and identify the optimal position
advice, which can otherwise begd'ff' Imade It easier to ask colleagues for - the strategic 'fit'. If the company has taken the right position, it will
h ' I ICUt In a development d
were t h ere ISa certain pride" 1(" epartment be able to achieve a competitive advantage by aligning its resources
, says Fist/an Strand,
with market requirements (Hamel and Prahalad, 1994).
Source: www.!odamcomand"/'
, nnovatlon on presc 'pti "i E. h
n IOn, r versbladet, 30 July 2007.
On the contrary, the inside-out strategy assumes that the market is
volatile and unpredictable. The company consists of resources, and
What is strategy?
some companies have more valuable resources than others have and
There are many different d f , , are better at utilising them. These companies will therefore be able
, e InltlOns of strategy All d f , ,
tarn both an intention ' , h ,e uunons Con-
, I,e" a WIS for the fut d ' , to create more customer value than their competitors will. Valuable
a greater or lesser extent ofth d ure, an recognItIon, to resources are therefore a barrier for new competitors, as they ensure
,
strategy IS about: ,e nee to adapt to I I hi
mar<et, ntIs way,
a 'better' product for the customer and thereby creating preferences.
Involving employees Strategy here concerns companies identifying a competitive advan-
Creating a common direction tage zone based on their unique core competencies.
To ensure that direction and b' ,
cepted by all, 0 1ectlves are understood and ac-
In 2010, Google launched its first mobile phone - the Google Gl - in
collaboration with mobile manufacturer HTC, and Google supplied
Attitudes towards how t d I the Android software, The mobile is a direct competitor to Apple's
changed over the last 50 :ear:v(~(~p and work with strategy has iPhone, launched in 2007, and launched at a time when the market
was on fundamental analysis of the ;~sen, 2~09), In 1950-60, focus for mobile phones was the worst year since 2001. In 2009, the whole
such as SWOT's integrari f' mpany s external environment
Ion 0 Internal and e ternal f ' market saw a decline of more than 15 per cent and if the global
outset, In the 1970s th M' x erna I actors from the
, , ere Was Intzberg's pi ' hi economy does not improve, forecasts predict a further decline of as
In the 1980s positioning an I' d annlng lerarchies, and much as 25 percent. There are simply too few first-time customers in
P orter as one, of the I f"
a YSISan focus on I ith Mi
mar<ets WIt MIchael
" <ey 'gures, Srnce the 1990 h proportion to the number of current customers, who choose to wait
d ifferenr strategic perspect' 'I' s, We ave seen many
ives, Inc udlng the I' , with purchasing a new phone.
cu Iture and value-based strate ies n earn,lng organIsation,
such as ecosystems and re g b' etwork strategIes, organisations
source- ased strategies, In spite of this negative situation, Google chose to introduce the G1
in December 2009. An analysis focusing on the market and industry
From all these perspectives and theori " would have concluded that Google should wait until the economy
trends: Positioning analysis ( ,~orr,es, we wIll hIghlight two key
recovers. When Google decided to introduce the phone anyway, it
perspective (inside-out) W' h?utsl ~-~n), and the resource-based
must have be based on an analysis that concluded Google's internal
known author is withou~ d It bin ~~s~tlonlng perspective, the best
competencies in communication and operating systems, combined
Chain, Competitive Analysi;~n~ G~c ~el Porter ,(Five Forces, Value
with the image they have on the market built up through their In-
ries such as Blue Ocean a d h B nerrc StrategIes), but also theo-
n t e oston model " from this ternet search engine, gives them a unique competence demanded
perspective, ,orrglnate
by customers. An inside-out analysis, rather than an outside-in may
better explain Google's strategy.
180
How a company chooses to implement its strategic process depen~s Figure 9.1: The strategic process
on the specific situation, needs and ambitions. Most of ~ur strate.glc
tools come from the positioning school, but companies In unpredict-
strategy
The conclusions of the external and internal analysis is evaluated by
management in the organisation and used to form the basis of the
company: Vision, mission and values. Here it is crucial that manage-
ment recognises that although the purpose of the analysis is to look
ahead, it is of course a snapshot of the situation right now, and it
is therefore essential that they have skills, creativity and experience
to interpret the situation correctly. The basis must be formulated at
several levels within the company:
The Strategic level deals with vision, mission, values and policies, and
The other half of the situation analysis is about the company's inter- is long-term planning (5-10 years). Here top management and the
nal situation. The goal of the analysis here is to ascertain what re- board of directors have responsibility.
sources exist within the organisation, i.e., an assessment of strengths
and weaknesses. The tactical level is dealt with by functional managers, for example
sales or marketing managers, who plan resources, such as budgets
The analysis can be a value chain analysis, an analysis of the com- for each part of the organisation based on the formulated strategy.
pany's resource profile or a rating of the company's market orienta-
tion (Hollesen, 2003). The operational level translates tactics to specific plans, such as staff-
ing, purchasing management, etc. Operational planning concen-
Crucial for the analysis is to identify the person or core competencies trates on a period up to one year ahead, and is dealt with on a prac-
that are essential for the company's ability to serve customers. These tical level in the company.
may be based on primary activities, such as modern and efficient
production equipment, a creative and innovative marketing depart- The three levels represent the goal hierarchy in a company. It is cru-
ment, or they may be more indirect, such as skilful leadership with vi- cial for the company's strategies and plans to work that there is con-
sion and ideas, and an innovative culture with very high learning. The sistency between the way the company is managed at the top and
results of the analysis are summarised in a SW analysis, where the bottom. In order to be able to meet the overall vision, it is necessary
determining factors in the company are assessed as either strengths, to meet the targets from below. The optimal purchase size and fre-
i.e., something you can invest in to achieve the goal, or weaknesses, quency affect the purchasing department's ability to stay within its
i.e., something that can take resources from other activities, thereby budget, which in turn affects the company's ability to meet its cost-
making achievement of goals difficult. It is important to assess all saving strategy that makes it possible to sell the products cheaper
types of resources: Financial, technological, human, physical, organ- than competitors can.
isational and image-based (Hollesen, 2003). All six resource types
may be of importance in the overall assessment of the company's Vision and Mission are business direction and justification In the
competitive strength - and thereby strategy. market. For example, Nordisk Films write on their website:
9.2: Porter's generic strategies
NORDISl( FILM
j Low costs
Cost leader
e.g. Ryanair e.g. Starbucks
Focused cost leader e.g. Focused differentiation
Vision fA/L;' frn·;_._.,,, C"A-? "PC"
.... .,L" IJ:&:, l.sererstandens Brandforsikring e.g. Asics
Egmont's vision is to be the m t .
.
b USlness os attractIve m di
partners and con e la group for employees
sumers '
At Nordisk Film, we have inter ·ret .
tractive provider of entertainme~ fO~~i~:'S as the ~esire to be the most at-
We are a company with far-reachin . ~, televIsIon, games and music. In a differentiation strategy, the company seeks to compete by offer-
while at the same time b . g hlstoncal roots and a strong culture ing customers a better product or a higher value. This can be done
elng a COmpanywh b '
are always at the forefront. 0 em races the future, and We via special characteristics, such as easy user interfaces for IT equip-
Only with satisfied and diverse e I ment or design, such as iPod, extra good service like courtesy cars
Nordisk Film exist. mp oyees, who work as a team, can
for repairs or advertising. The aim of differentiation strategy is to win
It may well be that through th .
filmmaking machine in Scandina:~ge~ Nordlsk Film is the most productive customers who have special requirements, such as status or prestige.
mechanical ambitions. ia, ut as a workplace, we have never had A wide range of products and brands, such as Diesel clothes, Ap-
We are proud of our polar bear s b ple computers and Toyota cars, adopt this strategy. Organisations
to be polar bears. ym 01 and everyone one of us are proud that use a differentiate strategy are very focused on building and
maintaining specific skills that allow them to be better than the com-
Mission
petition on the decisive factors. Therefore, Apple's organisation will
Egmont's mission is to create and tell stori .
through living images and music. e stones. At Nordlsk Film, we do this focus on maintaining skills of innovation, which has been crucial In
For.over a hundred years, Nordisk Film h . the development of the iPod.
ment Industry in Scandinavia 0 . as been a leader In the entertain-
talents in film, television g . ur gdoal IS.to continue to attract the best
II h ' ames an music In th Cost-leader strategy seeks to increase market share through selling the
te t e best, the strangest the rnosr i . at way we can continue to
W I·· ,ost Important d h . products a little cheaper than the competition or try to be so good at
e Ive to gIve creativity plenty of elb an t e wackIest stories.
proud of it. owroom and we allow ourselves to be production that there is a greater profit margin. Cost-leaders focus
So our promise to the wid· W . heavily on efficiency and control over their resources. The strategy
Vision, mission and valor . e bnng stories to life. can be seen in low cost airlines, such as Ryan Air or from car manu-
ues are used to formulate the overall strategy.
facturers like Suzuki. H&M also have a cost-leader strategy.
Source: www.nordiskfilm.dk
Porter's third and fourth strategies; focused differentiation and focused
If We st~rt from a positioning perspective h. cost-leader, focus around a particular market or customer group. The
the basis for formulating th . ' w ich for most companies is company tries to gain a competitive advantage within this group by
. elr strategy we .
generic strategies but h .' can use Michael Porter's either a cost-leader strategy or a differentiation strategy. An example
M·II es & Snow's archetypes.
,ere We will also I d
rntro uce an alternative: of a focused cost-leader is the LB Group, who offers cheaper insur-
ance to those employed in education-related jobs. ASICS running
Porter's generic strategies shoes are an example of focused differentiation.
Porte' .
r s generic strategies work with t .
advantages: Low cost and u-: wo potential competitive Porter's theory concludes that it is vital for the company's competi-
assessment of audience . u.nNlqueprod~ct. This combined with an tive position to consciously choose one of the FOUR strategies. This
size. arrow aim d def
people with special requests ~ e at a eflned group of choice will set the basis for the market position and guide organisa-
di or requirements· b d .
many ifferenr segments Th b. ,or roa, aiming at tional design".
. . e com inati .
IoWing matrix: Ion IS expressed in the fol-
24. However) there is much debate among theorists about the findings of Porter's strategies. Companies
like Google and eBay have had great success with hybrid strategies that combine elements from the
cost-leader strategy and differentiation strategy. Organisation design is reviewed in Chapter 10.
186 if
"When I was 21 and had qualified, my father had back problems and the
shop was not looked after. So after a short time I considered opening my
own business," says Karsten l<jaerulff.
However, the idea did not go down well with his father.
"Some days we would not speak to each other. Then he came and asked
me if I would take over the business. I had not expected that," says Karsten
A small TV antenna business that has expanded l<jaerulff.
It had otherwise always been on the cards that this was exactly what
to become a digital frontrunner should happen. The mid 1980s were bad times, and the business was not
going, as Karsten l<jaerulffwould have liked. Nevertheless, on 1 October
By Ulla Gunge Hansen, Business Magazine (Erhversbladet), Thursday 7 May 2009. 1986, 21-year-old Karsten l<jaerulfftook over at the helm.
Since 1957, the family business of Kjaerulff 1 A/S has supplied state-of-the- Illegal satellite dishes
art electronic solutions for radio and television. Today, the founder's son He was much younger than the other six employees, some of whom had
can look forward to digital television broadcasting taking over Danish TV. been there from the company's early years and may therefore have found it
difficult to adjust to the errand boy now being the boss.
One can easily get nostalgic on hearing the successful story of l<jaerulff 1. "But I made some adjustments and reshuffles, and I let some people go."
Over nearly six decades, the company has grown from a small one-man After that, the company's growth went from strength-to-strength. In the
TV antenna business in Odense, to being a global company involved in the first year, Karsten l<jaerulffwas able to achieve a turnover of 5.5 million
forefront of development and supply of solutions for digital television, IP DKK, which was the same as the previous year. In 1987, turnover had incre-
platforms, fibre and satellite.
ased to 7.5 million DKK.
Back in 1957, 17-year-old Flemming l<jaerulff stood in his own little What really sparked growth was satellite TV.
blacksmith shop in the basement, bending antennas into shape, which he "Even though the government tried to make satellite television illegal, it
then rode out with on his bicycle and set them up for Mr and Mrs Denmark. was this that really set the business in motion. Back then the state owned
what is today, TDC, and it was their intention that everybody should have
Sold ground coffee
hybrid net. This was totally, totally wrong. Imagine if you had to live with
At that time, television was just for the privileged few, and only about this kind of controlled communication. It was a monopoly."
100,000 television sets existed in Denmark - the vast majority on Sealand. Despite the strict rules, Karsten l<jaerulffbegan selling satellite dishes.
He also ground a little coffee in the basement, which he sold. He expan- "I set the first one up in 1985. Back then, it was illegal. After I had sold the
ded the business, so he both set antennas up and offered a domestic ap- first ten or fifteen, people were so afraid that we put plastic over them and
pliance service, says his son Karsten l<jaerulff, who today is the owner and logs all around, so you could not see it was a satellite dish."
director of his father's company.
Satellite dishes are now legal, and with TV2 in 1989, satellite and cable
However, the domestic appliances service side was sold off within a few television became a big part of the business, whereas before Danes would
years and antennas became the core business area. Denmark's Radio was have had new antennas.
the onlyTV channel and it was originally transmitted from Copenhagen, "There was a queue several hundred metres long in front of the little
but from 1955, it was also transmitted from the 219-metre high transmitter shop, because people wanted to see TV2's opening broadcast," said Kar-
mast in Sender Hejrup.
sten l<jaerulff.
In 1960, regional radio was also transmitted from here, and there was
suddenly an enormous demand for antennas. Flemming l<jaerulfftoured Letting the shop go
around the island ofFunen with his homemade antennas for the radio and In 1989, he went to Korea, Hong Kong and Taipei to find suppliers of satel-
television hungry population.
lite television equipment, satellite dishes and receiver boxes. The contacts
Several German television channels were available and the Danes wanted created during this trip, sowed the seeds of the commercial company that
to see them. Using his ingenuity, Flemming l<jaerulff developed one of the l<jaerulffl is today. The retail and installation division was sold offin 2000.
first cable TV systems, and in 1969, German television transmissions came "I could see how fast development was going, and I had more interest in
into Danish living rooms as a result.
developing a commercial company than driving out and setting up anten-
Meanwhile, Karsten l<jaerulff comes into the world, and when he was nas."
about ten years old, he worked daily as his father's errand boy in the busi- In the early 1990s, l<jaerulff 1 began exporting to Germany, and Sweden
ness. After a while, he too went off and set antennas up, and when he was and Norway soon followed. Today the company has sales offices in Sweden,
17, he apprenticed as an electrician. Soon afterwards, he was ready to take Norway, Finland, Germany and Poland. Customers are found virtually all
over his father's life's work.
over Europe, some even outside.
Structure
Organisational structure was analysed in Chapter 2, and here we dis-
tinguished between mechanistic and organic structures.
The organic or horizontal structure can be characterised with task Direct supervision is a manager controlling employees' behaviour and
dependent division of labour/projects, mutual adaptation, gen- steering them in the correct direction. Standardisation of work processes
eral responsibility, decentralisation, advisory roles and interaction, is the use of routines and formalised systems as a method to ensure
prestige via personal knowledge and experience, commitment and consistency within the organisation. Standardisation of output focuses
contribution to growth. Organic structures often work with compa- on uniformity in the finished product as a way to ensure consistency.
nies in very dynamic and complex external environments, where the Coordination through standardised skills uses employees' skills as a key
company has chosen to differentiate them self: Differentiation with element, and finally, mutual adaptation is a coordination method in
Porter, and prospector with Miles & Snow.
which employees adapt themselves in line with each other. Direct super-
vision is the most vertical approach, and mutual adjustment is the most
The analyser strategy requires a combination of the two structures: horizontal connection (see organisational structure in Chapter 2).
The base part with a focus on stability and performance requires
control and efficiency, and thus often a more mechanistic structure. The relationship between the method of coordination, company
While the development orientation part, trial and error component, is structure and environment type can be deepen by broadening the
in need of more learning and flexibility, as in the organic structure. figure from Chapter 2:
~~
Mechanistic trends Organic trends
Financial stability
Managerial development. The company's mission is:
Kirk & Holm will create strategic-based visual design with a profit-genera-
Objective-based efficiency is used in most companies, because out- ting effect and value for our customers.
They have many different types of customers, from various industries.
put is relatively easy to assess and quantify. The problem with an
They include an art book for Johnny Madsen, IDEmobler (overall design
objective-based assessment is that the company's goals often involve strategy for their own IDdesign brand), an exhibition design for the Univer-
different areas that are in conflict with each other. It can be, for sity of Aarhus, design of the website and magazines for Surf & Ski, graphic
instance, difficult to be both in expansion and have high financial design of a recruitment campaign for Maersk Oil and Gas, and Caroline
stability. In this way, it is necessary for the company to prioritise its Wozniacki (packaging design for her personal care products).
Workflow at Kirk & Holm operates as follows: When they get a major
goals before assessing effectiveness. An example of a priority target
project, all employees sit around a table and brainstorm for two to three
assessment can be found on the Balanced Scorecard (Daft 2007), hours. All ideas are put on the table, and it is often here they find the
where economy, learning, customers and processes in a goal hierar- project's central theme. The project is then divided up among the graphic
chy are prioritised. designers, Tasks are resolved using the Adobe tools InDesign, Illustrator
and Photoshop, and supplemented with traditional graphic craftsmanship.
Often a project will lead to the development of20 to 30 different visual
proposals, but only one is selected as the best, is developed and presented
CASE STUDY: to the customer.
Kirk & Holm is a small design and advertising agency with strong skills in
visual and strategic communications. The company has five employees:
The three owners, graphic designer Jesper Holm, graphic designer Kristina
Kirk and CEO Birte Bruun, and two graphic artists.jacob Jensen and Lars
Thomsen. Age wise they range from the mid 20's (the two graphic design-
ers) to mid 40's (Jesper Holm).
Kirk & Holm is run with plenty of spirit and enthusiasm. Jesper Holm and
Kristina Kirk started the company 13 years ago and they are an important
part of the corporate culture. The mood at the company is marked by
commitment, informality and humour. There is focused expertise within
the company: Employees are selected for their professional competence.
Birte Bruun has a Master of Science in Business, Language and Culture and
is a former marketing director. Jesper Holm and Kristina Kirk are qualified
graphic designers and specialists of print media and logos; all three have
additional competences in text writing, and Jesper Holm is the author of se-
veral books, while Jacob Jensen and Lars Thomsen are specialists in among
other things, web design. As a team, Kirk & Holm therefore has both depth
and breadth in their knowledge and can tackle projects and styles ranging
Owners of Kirk & Holm from the classic and minimalist, to the hip and colourful.
1,.\'· 203
Assess Kirk & Holm's strategy using Miles & Snow's four archetypes If one or more symptoms exist in the organisation, it is probably
from Chapter 9: Prospector, Defender, Analyser and Reactor. What a sign that the organisational design is n~t opt!mal. The ~ompany
of coordination do you think is dominant in Kirk & Holm? Are there should go through the design process again, as Illustrated In Flg~re
several types of coordination in play simultaneously? 10.1, with the aim of adjusting the design factors. For companies
- Assess Kirk & Holm's corporate culture. Which archetype do you think in highly turbulent environments, this can be a continuous. process,
fits the company best?
but even companies who had a relatively stable external environment
- Assess mutual employee dependency. Are they pooled, sequential or before; can experience an increasing need for change and transfor-
reciprocal? Explain.
mation. This need is the starting point for the next chapter.
- Give suggestions on how Kirk & Holm can assess their effectiveness
using Figure 10.5.
Discussion Questions:
Source: Www.kirk-holm.dlc Give examples, respectively, of external and internal factors that
may affect the company's organisational design. ...
Give examples of the five different methods of coordlnatlo~ In
Signs of design problems Figure 10.2. How does the method of coordination affect motiva-
The easiest way to recognise problems in design is to look at tion in an organisation?
above-mentioned efficiency types. If management assesses that According to Figure 10.3, organisations in complex markets have
one or more areas the organisation is lower than desired such a trend towards decentralisation. Explain why. Can there be cases
it has a lower .market share and growth than is desired, less profit, where companies need to centralise decision-making powers, al-
poor work environment or a weak negotiating position in connection though the market is complex? Give eX,amples. .
,:ith suppl.iers in the market, i.e., low bargaining power, it may be a - Is it possible to change a department s depende~cles? .Can you,
sign of an Inadvertent organisational design. for instance, change from reciprocal to sequential? Give exam-
ples. What are the respective advantages and disadvantages of
An incorrect design often has the following symptoms: reciprocal dependence? .. .
Oecision-m.aki~g is ~ooslow or too bad. The hierarchy may be too steep, Give examples of products produced by Single-piece production,
decentralisation ISpoor, or information can be stuck in different mass production and process production. .
parts of the organisation. The horizontal or vertical channels of Give suggestions on how the following companies ~a~ gauge .thelr
communication do not function optimally. organisational effectiveness: A library, a small painting busln~ss
The organisation does not respond to changes in the external environment. with two painters and an apprentice, a metalwork c~mpany With
Coordination between departments is bad, the customer's needs 55 employees, a beautician who has started a business, and a
are unknown or new technologies only get as far as the develop- charity. You need to include elements in terms of resources, proc-
ess-based and objective-based efficiency.
ment department. There is no clear division of responsibility in
relation to market surveillance. Read the Kirk & Holm case study, and give suggestions on how
Employee productivity and efficiency decreases and they do not achieve Kirk & Holm should motivate and reward their graphical employ-
their goals. The organisation is unable to set clear objectives for ees. Base your answer on your analysis of culture and values.
employees or structure is out of shape in regards to the balance Ii
between market complexity and the need for clarity in the place-
ment of responsibility and authority.
- Conflicts. Organisations should allow conflicts as a means of de-
velopment and change, but excessive levels of conflict or destruc-
tive conflicts is often a sign of an incorrect organisational struc-
ture, with unclear objectives and lack of horizontal coordination.
Change Management
206
~~:~,:gr ;7 d
a practice and very
the individual employee.
.
/y::t;~:~;~~~~:~
g II arge y concerns rational views and assessments
. Definition: Managing changes is the process that helps to recognise
changing needs and can put the changes into practice in an optimum
way for the organisation. (Hildebrandt, 6 November 2003)
h en a research . and' many experrences suggest that ou'
th
Ita.ve mad: a ~aJor basic mistake. It is in fact the oppo~te' It means that there are many different elements involved in change
th 1S emotiona .and personal subjective views and concern~ management. This includes virtually all the topics covered in this
a t are esse.ntlal or very important in the implementation book, as well as issues that are also outside ofthe book's framework.
of many projects and changes." (Hildebrandt 31 0 t b
2003). ' coer
To illustrate the complexity of managing changes, the topics on the
subject are outlined in Figure 11.1:
20g
208
Figure 11.1: Issues that may be included in managing changes projects At the same time, management must know the external factors that
will affect change and how change affects the other way round. They
must manage and assess the economy of the change project, but also
the economy as a result of the changes for the company in terms of
income (financial). They must be able to take the right decisions and
assess risks with the project. The method of managing for changes
must be considered and planned (project management, leadership),
because it is obviously very complex.
211
The model should be compared with Figure 11.1, since the elements
listed are part of the three phases in Figure 11.2.
Source: Loosely based on Smith, Norton & Ellis (1992)
instance, by purchasing new manufacturing equipment or a new IT Once a change is underway in the company, it will generate insecu-
system. rity throughout the organisation, especially in the areas of company
where employees think it will have the greatest influence. This means
The hold of the four areas, and .. that there is a need to quickly step in with activities, so confidence
tell thmodel takes
I Its primary intent is to
. e peop e - managers and employees - that you cannot chan e among staff does not disappear. One tool for this is the Change Cir-
Just one of the areas without a change in all the oth ers. g cle.
It is here that conflicts and resistance emerge, and you often see
absenteeism rise. It is important that you see these reactions as tem-
porary stress symptoms. The reactions can be severe and can mean
loss of good employees through redundancies or they leave of their
own accord.
The last part of the process is less problematic. Here the parties in-
volved look ahead and can see the possibilities in the new situation
(5). Depending on how big the change is and the employee's, own
handling of it (6), you can come unscathed through the circle and
now continue beyond the timeline until the new changes take place,
which in turn will send you around the circle again.
How can managers cope with the situations in the various phases of the change
circle?
Source: Hawk of the Yellow Wind (2006)
The best thing would be to avoid having to go through these phases,
but that is often not so easy in practice. Therefore, managers choose
the best possible change and communication strategy, which should
:~e figur~ should be seen as a timeline that illustrates what happens be able to nip most frustrations in the bud. More on that under the
en a c ange occurs. When the change begins, where the lines in-
point of communication strategy.
tersect, and you must take a trip around the circle b f,
~eed Wit~your usual work. This trip will be easierto :c~:~~~~~~:~~7~ In the first phase, the manager must deal with the person affected by
th~~:~t~ yo~ c~ose colleagues know the reactions, and you all know the change and take care of them. This is done by providing proper
I goo c ange management, they will disappear again.
information, create space and provide opportunities of various
kinds, ensure that there is common understanding among staff or
~i~s~~ecahc~~;~~:aactionds.~ccur whilst moving around in the circle. The manager colleagues, and ensure that they have someone they can
con rtion (1) where th t f ffai .
Example: "It can't be . h '. , e s. ate 0 a airs IS denied. talk with. Be attentive and sympathetic.
I rig t that It s always In our department the
ma <e changes. It must be a mistake." (2) Or "I can' b I' h y
In the second phase, the situation is worked on by activating the people
managemen~ will m~ve the development dep~rtment :br:~e;el t ~t
involved, getting them to deal with the situation and to do something
have to se~ If ther~ IS qu~lified staff there, before I believe i~" w"~
~~~:~:fthls, :deactlodn (3) IStypi~a"y that you push the situatio~
nge aSI e an pretend It IS not there.
!~ about it, etc. Here, the team or network can, with others who are
also facing change, help to increase understanding and acceptance
of change. Get them to recognise the reactions, such as frustration
and sick leave, for what it is: An expression of uncertainty.
~a:etn t~~:ucg:a~~~~:~it~ut~e denial, begins to take shape, people
perha . if i .'. as anger, frustration, and sorrow or In the third phase the reactions come: Here is where both management
ps JOY, I It IS a positive change. You get used to the ch
and employees should show understanding of why their colleagues
hereafter acceptance of the change C II ange, and
. soon 10 ows Now the react as they do. All are going through their own change process and
IS resurrected from before the ch . moment
ok the reaction is not due to a lack of cooperation.
and see the possibilities (4) in thea~;~ s~;u:~:~ sWtahrtatt~10h ah~ad
. IS appenlng
216
E.m~loyees can now begin to look ahead, and they no longer feel like employees work more against than for the organisation's goals, an~
victims of the event and in need of help, but as performers in their to a high degree, it is others who must adapt, rather th~n t.he orga.nl-
own situation. They will begin to look ahead and work actively in sation itself and there are many changes in the organisation, which
relation to the new situation. helps to create a breeding ground for discontent and resistance.
Change strategies Theory X: Here the employees are people who need to be set to work,
As sh~wn~ it is very different how to tackle change in a company. are lazy and require supervision. They only come to work to earn
OrganlsatlO~al s.tructures, changes in the environment, management money and have no desire to contribute other than the tasks they are
styles, organisational culture and development are topics that affect given to do.
change strategy. This means that strategy can be and often is dif-
ferent depending on where in the company the planned change will A comparison of the four views produces the following four change
take place. It may vary from department to department. There will strategies. See Figure 11.5.
typically be a difference in strategy with changes in, for instance, the
sales department compared to the production department, simply Figure 11.5: Change strategy
because there are different issues involved, and the people subjected
to change, are very different.
This means the strategy for planning a change, also requires looking
at various departments and personnel groups.
To choose a change strategy involves Figure 11.5, which has its point
of origin in th: t:vo extremes, na.me~y that the company or a given
department ":'Ithln the ~~mpany, IS.either in a state of harmony or a
state of conflict. In addition, there IS also the view of human nature
which lies behind management's view of employees. Here there is the
XYTheory, see Chapter 5.
The socio-technlcal strategy is similar to the expert strategy and it is ac- Risk analysis .
tually .als~ an expert strategy, but it differs in that the analysis and A risk analysis aims to ensure that the change process IS prepared
organisation of tasks takes place in two forums: A technical and to encounter possible problems. However, first we must analyse the
social. The basis is that there are already some conflicts within the risks involved, and how they may arise.
organisation, which may be due to professional divisions with dif-
ferent, clear boundaries or similar. The technical, such as IT experts, The analysis can be based on a 'Before/During/After' analysis,
take c.are of the changed tasks due to technology and organise tech- in other words, what risks are there in the analysis phase, process
n~loglcal change. The social, such as sociologists or HR department, phase and the result phase, see Figure 11.2.
will then look at the changes to made in terms of the job, structure
and personnel, see Leavitt's model, Figure 11.3. The two forums of During the analysis phase, where the change projec~ is dete.rmined~ it
experts co~rdinate ~nd come with a collective solution for change. is a matter of choosing the right method for analysis, that IS, ~on~ld-
Here there IS a relatively low level of conflict and low risk of internal eration of corporate culture, thinking about who in the organlsa~lon
problems associated with change, because the change in situation is will be involved (Leavitt), choosing the right change strate?y, p:oJect
addressed as a whole. composition and management. These issue~ are ~~out risks '" the
selection and consideration of methods, but In addition, there IS also
Participation strategy is characterised by a Yview, where there are con- the content of change, where there may be risks. An example of a
flicts within the organisation. This means that there are employees method to analyse these factors is as follows:
~h~ are acti~e, have a~titudes, goals and ambitions, but might have
d.lfflc~l~y seeing what IS best for the company. The strategy is, in its This can be based on what can go wrong or fail:
simplicity, that all employees participate in the change process. This Where?
can .be very difficult in large organisations, because it may be a costly When?
affair for the company. There is a high conflict level and therefore a How?
great risk that it will be a bad solution, so you can often count on Who?
internal problems in connection with change.
Afterwards discover the reason why the risk factor occurs.
The risks mentioned in connection with change strategies are im-
portant to analyse as much as possible to avoid any inconveniences. The reasons here may be:
This is addressed in the next section. Technical
System related
External environment related
220
221
This means the employees know the premise to change and many of
the previously described inconveniences can be avoided.
Diaioq"
Project composition
EXAMPLE:
The process of change is a lengthy, large and complex task that is
LEGO warn of mass redundancies
best implemented as a project. The project begins with putting a
When LEGO decided to stop all production in Switzerland, they sent out a
project team together, who are supervised by a steering committee. press release. This is an indirect method to inform employees. However, in
Who participates in the project and the steering committee, depends conjunction with this they informed all employees throughout the Group
on the outcome of the analysis presented in Figure 11.2. via meetings and intranet, so everyone was properly informed and able to
ask questions to their immediate managers and senior management on the
The project implications for their own job.
What happened was that the 239 employees at its plant in Willisau,
Also called the change project. Here the project is broken down into would eventually lose their jobs in early 2006.
a series of smaller tasks, and time wise, driven by the project group
manager. This means there is always control of what has to be set in
motion, when and in what order. 27. Also see change communication in the appendix of this chapter.
222
223
BY doi competitors.
olng t hiIS, they ensured a greater understanding of the situation.
Get external consultants to open management's eyes to alterna-
tives.
Figure 11.7: Kotter's three phases Step 3. Developing a vision and a strategy
It takes time and resources to create a common and realistic vision
and strategy. The vision for the change process defines the course
of change; it motivates employees in the right direction and helps to
coordinate their actions. The vision provides a picture of where you
want to go with the change, and in addition, it sets realistic goals, is
focused, flexible and easy to communicate.
There are some activities in connection with these ph d h
. d i . ases an t ey
ar e perceive In eight steps. '
Step 4. Communicating the change vision
Employees in the organisation must know the change vision, and this
Unfreezing only happens ifit is communicated to them. It is important here that
The idea is that when the nee~ for change arises, the situation is communication is simple with non-technical terms or knowledge is
analysed in the here and now, In order to ask questions about the not taken for granted. You can use metaphors, analogies and exam-
current situation. ples, and communicate in many different forums. Debates within
and across different employee groups is also a way to publicise the
~tep 1. Increase urgency28. Here it tries to focus on potential crises VISion.
o ensure that change begins to take place. If self-satisfaction in the
Changes of the old processes are removed and new ones are integrated in the
After the message of change is circulated within the organisation, remain Ing processes.
and there is now awareness and acceptance, a change is now made.
Here the organisation is working to implement change and new Step 8. Anchoring new work methods in the culture
needs arise. Changes should ideally match corporate culture, or it now has some
new elements to implement change. Corporate culture is, refer to
Step 5. Strengthen staff skills Chapter 7, a series of standards of conduct and common values for
Employees help greatly with the work of change, so they must be a group of people. Norms of behaviour are common practices in a
equipped for the new tasks. This is done by developing their skills group, and the standards maintained by the group. Common values
and changing working conditions. Various barriers may hinder the are harder to change than norms of behaviour, because they are less
process, for example: visible and deep rooted in culture. Therefore, you should be aware to
The structural barriers within the organisation anchor changes in the culture and common values.
Lack of skills
- Information and personnel systems that can be contrary to the One should thus be aware of:
vrsron That changes in norms and common values come last and not
Managers who are unwilling to change and therefore obstruct in first in the change process
different ways. Change is only reflected in the culture when it has shown results
It may be necessary to replace key personnel, who maintain the
Step 6. Generate short-term gains old values and criteria
Success with the process of change is dependent on creating rela- Promotion may be considered when the new values must be an-
tively short-term, visible and unequivocal results. Depending on chored.
the complexity of the project, it is necessary to have continual and
tangible results associated with the change project. This signals to
employees that the initiative is worthwhile, and gives the project a Outcome
feeling of success. In the change management model in Figure 11.2, we now come to
the point where the organisation will act as a learning organisation
Step 7. Consolidation of results and producing more change and thus reflect over the change made. This is done by looking at the
The momentum of change may be lost and thereby progress is lost. whole process and then evaluating the results.
A major reason for this might be corporate culture and the mutual
dependence created with the change process. According to Leavitt, Here a process evaluation is applied, where change management can
changes in one place affect other parts of the organisation. This get feedback on the work and methods, and whatever else happened
complicates the change initiatives, because you cannot only change during the change project. The result of this evaluation can then be
the components, you have to change the entire organisation at the used in subsequent change projects.
same time, and that requires a high level of patience and coopera-
tion. Leavitt's claim also means that several change projects are un- A frequent result of change is that new change needs arise. Herein
der way simultaneously. For this to succeed, top management needs lays change that was not in the planning of the change project. It
to concentrate on overall leadership, while responsibility for projects may be that targets set for the project have been so amply satisfied
is delegated further down the organisation, which will allow as many that it has led to these new change needs arising, just as the opposite
people as possible to be engaged in projects. may also be the case.
The manager will not always be able to find answers to all questions
right away. For middle managers in local government, the problem is
that sometimes as part of a political system, they do not always have
enough time to think about the issues.
4. Tell about the Which 4-6 specific, delimited, fixed-term goals accom- 11. Identify the main Which 3-6 key
goals of the change modate change? message Howwould we
What promises do these goals hold? For instance, the How would we test whether the messages work?
promise of a better and more secure future, the promise Finally:
to meet specific needs and wants? What do we still need to clarify?
5. Tell about the What tangible rewards do we expect that change will When could we expect to have a response?
benefit of change give employees? Source: Pjetursson (2005)
What specific motivators accommodate change?
What good val ues have we that are still useable?
VVhat neW valuesdo we need for change?
H0\'i.c.f(.(th~sei~alues reflect the recipients' and
companY'~ Values?
7. Show the values Howwill we as leaders show that we believe in the
and show passion vision arid project?
How will weshow what values we believe in?
Whatpicture do we want to be painted by us?
8. Create consistency How ~a.hchange fit together with the good that we have
previ()~slyd.one, with what we need tod()?
~.?W~.~~ ..~.h~2?~ ..b~.conn.ectedtothe.indivi~.~.~I·units
a.n•d previous.\'i0rk?< \ i i . ((......... \ .
I-lO\'i~aW~hahg.be linked.to. individual~rh~I()yees?
y
.\iV9.a.t..•.....
employee?"':
d..••...........
o.•..
·•·e
.••.
.·••..
.s.•
•··.·..·.c
•.. \..•....•..
·•h.... . ..
a...........•
n...••.•.
getyRic.all l11eanfor.t •h·•e...•..
i...:;.•..•
.·.•..•.
n·d
. .....•..•.
i•V....
I·•d
•• ...........•.
u al
•....••..•.•.
wei7t~;~f~·~~~~~t~i~atefhentherei~w@~t~~ffiething
How will w~communicate with each team a:~d
employeEl about what change means to them?
Whatva.ll.Ies should characterise our c()mml.ltli<:CI.tionof
changei'
B~:t~iflt~~:~~fu8Mc~te\VitKeacht~W~·;i·WJ·e~Plo~
yee abo~tl,\lhat change means to them? .
Literature
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Hersey, P. & Blanchard, K.H.(1988) Management and Organisational Behavior. Prentice Aarhus City Council: www.aarhuskommune.dk
Hall. A.P. Moller- Maersk: www.maersk.com
Hildebrandt, S. (2003, 23 October) Syv provokationer am ledelse. Used on www. Appreciative Inquiry Commons: http://appreciativeinquiry.case.edu
lederne.dk, 23 October 2003) Belbin Danmark: www.belbindanmark.dk
Hildebrandt, S. (2003,31 October) Forandringsledelse _ udfordring for ledere og ansatte. Belbin: www.belbin.com
Borsen, Kronik p. 1-2. Cheminova: www.cheminova.dk
Hildebrandt, S. (2003, 6 November) Ledelse og [elelser _ [elelser og tanker i forbindelse Circus Summarum: www.cirkussummarum.dk/cms.ashx
med forandringsprojekter. Folkeskolen nr. 45, Kronik CSR I<OMPASSET: www.csrkompasset.dk
Hermann, N. (1996): The Whole Brain Business Book. McGraw-HilI. Dana Lim: www.danalim.dk
Hofstede, Geert (1999): Kuliurer og organisationer _ overlevelse I en gramseoverskridende Danfoss: www.danfoss.com
verden, Handelshejskolens Forlag. Danske Bank: www.danskebank.dk
Hollesen, 5.(2003): Marketing Management, Financial Times. Doblin: www.doblin.com
Buchanan, D.A. & Huczynski, A.A. (2007): Organisational Behavior, 6th edition. Erhvervsbladet: www.erhvervsbladet.dk
Prentice Hall. Hjemls: www.hjem-is.dk
johnson, Scholes & Whittington (2008): Exploring Corporate Strategy, s- edition. Human Metrics: www.humanmetrics.com
Klausen, K. I<(2009): Strategisk ledelse _ de mange arenaer, Syddansk Universitetsforlag, Innovation Council: www.innovationsraadet.dk
2nd edition. Itim International: www.geert-hofstede.com
Kortler, P. (2003) MarketingManagement. 11<hEdition, Prentice Hall. jeld-wen: www.jeldwen.dk
Kotter, j. P (1990): A force of change: How Leadership Differs from Management. Free Press jobindex: www.jobindex.dk
New York. jysk: www.jysk.dk
Kuvaas, B. (2009): Lensomhed gennem HR, Academica. jyske Bank: www.jyskebank.dk
Lindblom, C. E. (1989): Science of Muddling. Ardent Media I<amstrup: www.kamstrup.dk
Mintzberg, H. (1979): The structuring of organisations, Prentice-Hall International Kirk-Holm: www.kirk-holm.dk
Editions. l<jaerulff1: www.kjaerulff.com
Nielsen, A. S. (2001): Etik for begyndere. Published 19 February 2001 on www.cifs. Lederweb: www.lederweb.dk
dk - Instituttet for Fremtidsforskning. LEGO: www.lego.com
Peters, T. j. (1999): The Circle of Innovation _ You can't Shrink Your Way to Greatness, Lodam: www.lodam.com
Vintage. National Board of Industrial Injuries in Denmark: www.ask.dk
Pine,j. & Gilmore,j.H. (1999): The Experience Economy: Work is Theater & Every Business Netto: www.netto.dk
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Pjetursson, L. (2005) Ndr ledelse er kommunikaiion. Borsens Forlag. New in Denmark: www.nyidanmark.dk
Psykologen (2002): Fire kulturer _ kan du genkende dem? I nr. 5 TEMA, April 2002. fra R98: www.r98.dk
www.jobbank.dk/karrierernet Rival: www.rival.dk
Riis, A.M. (2005) Brugerdreven innovation i medicobranchen. I Fora, nr. 10. August SCHLECI<ER: www.schlecker.com
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Robbins, Stephen P. & judge, Timothy A. (2009): Organisational Behavior, 13th Wikipedia: www.wikipedia.dk
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www.lederweb.dk/wm141663
Part 4
Case studies
29. The case was developed in collaboration with Sonny Finn jergenscn, Vice President and Plant
Manager and Seren BlaabjergJepsen, Plant Manager, Cheminova A/S.
239
third are skilled process operators and a third are other skilled work- The staffing of the plants is often changed or adjusted, so about
ers (blacksmiths, carpenters, electricians, etc.). There are produc- 30% of all appointments at Cheminova are internal redeployment of
tion worker.s at the major chemical production plant as well as sup- employees from one facility to another. There is no deliberate evalu-
ply and environmental facilities (e.g., cleaning plant). ation of the employee's personality (personal profile) relative to the
type of facility (team) they are moved to. The logbook is used as a
~ach facility is organised into a number of 'steered groups', depend- tool to assess professional competence/suitability for the job.
Ing on how many shifts are at the facility. At a five-shift facility with
an annual operating time of around 330 days, there are five teams, In 2007, a new production facility, Triazol, was ready to use. The
which in turn staff one site. The facility runs 24 hours a day, and the plant is the second multi-planr'? at Cheminova and will produce two
teams have the responsibility themselves to organise the work opti- different types of antifungal. The plant's staff was selected from em-
mally. Therefore, the supervisor's role is primarily coordination. The ployees who applied to work at Triazol - knowing that the manage-
supervisor, however, still has the overall environmental and safety ment of the facility wanted a team-based structure as a basis for
responsibilities.
work.
Usually a new employee starts in a team in the role of an 'appren- Plant Manager Soren B. Jepsen led the staffing and training of new
tice'. They are equipped with a logbook in which to note down tasks production workers (operators and overseeing supervisors). He had
and challenges. As time passes, they are given more complex jobs experience in team structures from a previous facility, Pyrethroid,
and greater responsibility. Time wise it is partly dependent of the where a team structure had been tried, but which had experienced
employee's own interest and competence, i.e., how quick they are a degree of relapse to the 'old' way of working, where the supervi-
to learn. The logbook contains milestones (targets) that after three sor planned and decided, and employees implemented. The plant's
~nd six months must be reached. If they fail, there will be a manage- operation required many resources, and the result was that employ-
rral assessment of whether their employment will continue. Overall, ees' first priority was operations, and therefore the working form
the logbook is a key tool in assessing the employee's knowledge and returned to what was familiar.
development.
A more radical team structure was wanted at the new facility.
Therefore, two separate out of house training sessions were organ-
ised - one for operators and one for supervisors. At both sessions,
Triazol plant the exercise was to discuss and process the content of the work, a
typical working day, and what tasks you might expect, and who was
responsible for what. A number of responsibilities were established
for operators.
The challenge was to create a facility where the objectives set are
achieved
To produce different kinds of fungicides, of the right quality and
quantity - at the right time
To reduce production costs through continuous improvements in
everyday life
- To create a dynamic and challenging workplace, where it is fun
to be.
30. A multi-plant is a facility, which is able to produce several types of products. A 'normal' plant is built
to produce only one type of product in a continuous process.
team on duty at a time staff the facility. There is no way to com- After a short period of operation, problems began to arise. The
municate between the teams, apart from the ten-minute overlap, cause was not cooperation, but the plant's function and operation.
when one team goes home, and another arrives. This places heavy For more than a year, the plant was tested and adapted to enable
demands on documentation and responsibility - for both the op- it to function optimally, and during this period, commitment and
erators and the supervisors. Another challenge is that at Cheminova focus on the new team structure unfortunately disappeared rapidly.
many of the production workers have trouble reading and writing, The mental energy to develop and create the new way of working
making it more difficult to use written communication for instruc- was no longer present. All efforts went into solving operational and
tion and coordination between teams. practical problems.
To create an understanding of each other's roles and to strengthen However, in July 2009, it seemed as though the plant was running
cooperation and communication, the training sessions ended with again. All tests and samples looked positive, and the mental energy
a two-day course, where the operators and supervisors all partici- was back among the staff. To return to the team structure it called
pated. They discussed how the team and supervisors should work for an out of the house retraining session, which would focus on how
together, responsibilities, communication style and rules of coopera- to get the team structure up and running again.
tion. All staff underwent a personality test based on ideas of The
Whole Brain (Hermann, 1996). Here, staff were analysed with focus Questions:
on their personal preferences: The rational, the experimental, the Analyse the team structure at the Triazol plant uSing relevant
emotional or the practical. theories.
Assess what form of leadership that type of team structure re-
Hermann's Whole Brain quires. Are there any special conditions that you believe are con-
ducive or inhibitory to establish a team structure for the produc-
tion team?
A challenge in the team structure is to create a reward system
that accounts for the team, as well as the individual. Give sugges-
tions on how Cheminova could structure a reward system to fit
the team structure. You should be aware that due to agreements
and trade unions, you cannot give different wages for the same
job (i.e., a professionally qualified operator gets the same hourly
rate regardless of commitment, initiative, etc. A skilled process
operator, however, receives a lot more than an unskilled opera-
tor/skilled with another qualification).
Give suggestions for activities that you think should be part of the
retraining session for operators at the Triazol plant.
The goal was to put the team in a position to recognise and identify
their weaknesses. A team where employees, for example, all scored
low on the future factor, would be more aware they should ensure a
progressive and development-oriented focus in their work. A team
that is weak on the emotional, can be very productive, but with a
bad working atmosphere.
The training course was a great success. Both operators and supervi-
sors were dedicated in their work on structure and focused on team
structure. In February 2008, the plant went into production.
243
Case 2. Aarhus City Council The council has developed a vision that reflects the council's goals.
KOMMUNE Aarhus is large enough to be interesting and small enough to feel at home.
Aarhus is a lively and attractive city with many educational and research
institutions, and a strong and dynamic economy.
Source: www.aarhuskommen.dk
Source: www.aarhuskommune.dk
In addition for having responsibility in relation to the City Council,
The various committees are the political link between the council councillors and civic department heads are also responsible for en-
and the civic departments. The committees only have advisory func- suring that the council is a good work place. The council makes a big
tions. The mayor and councillors share the top management of local effort to retain and develop employees.
government and are all full-time politicians.
Based on the overall vision, the City Council has internally tried to
create common values for the council.
244 245
Questions:
New vision for Aarhus and common values for Aarhus City Council Based on the above case and references in relevant parts of Aarhus
On 9 October 2003, the council adopted a new vision for Aarhus and com-
City Council's website, please:
mon values for Aarhus City Council.
The vision is comprehensive, long-term and development-oriented and
Based on Hertz's motivation theory, analyse how the council
covers the whole of Aarhus. It will serve as an indicator for development motivates its executives and other employees, and the extent to
and represents the upper levels of Aarhus City Council's goal hierarchy. which maintenance factors provide fertile ground for satisfied
The purpose of preparing these base values is to create common values employees. It is recommended to read these specific topics on the
across many local authority areas and focus on what characterises staff website: Job satisfaction, personnel policy, development policy
contact with the public, businesses and other internal and external part-
and respect.
ners. Unlike the vision, the base values are not concerned with the whole of
Aarhus, but only Aarhus City Council as an organisation. Analyse the council's form of leadership.
The City Council have affirmed the following values. Assess which implementation model of motivation is used.
Analyse Aarhus City Council's corporate culture.
Aarhus City Council's values
In Aarhus City Council, we have a vision for the city and the council's
activities, just as we have developed a wide range of goals for the council's
different areas of work. The vision and goals are indicators for the develop-
ment of Aarhus.
We have also put into words the values that we prioritise highest at Aar-
hus City Council. The values are broad and express what we want to stand
for, and be known for, in our contact with the public, businesses and other
internal and external partners.
These are words and thoughts, that we all know, and in our daily work,
we do our best to live up to them. In this way, the values represent a philo-
sophy for all employees of Aarhus City Council.
Source: www.aarhuskommune.dk
247
Case 3. Almeco CM Lab31 The industry is subject to tight regulatory controls. A product must
have approval before being put on the market and for companies
working globally, this can be a very complicated process. Licensing
and regulatory rules are not standardised worldwide.
the company in January 2010. They had sold their dental business Case 4. Dana lim
and wanted to start something new. Almeco CM Lab set up 1,000
m2 of production facilities - provisionally with eight men, in three
shifts at the port of Esbjerg. However, the company plans to grow,
and it is expected to create more jobs within the first year.
DANA LIM
Index
1 Sales Manager 1 Sales Manager 1 Sales Manager 1 Export Director
1 I(ey Account Manager - Seal and 1 Sales Consultant China: 2 Sales Reps.
5 Sales Consultants 1 Sales Manager - Central & Finland: 1 Sales Consultant
- North Sealand & - Jutland & Funen North Jutland Latvia: 1 Sales Consultant
Greater Copenhagen 1 Sales Consultant Lithuania - Subsidiary:
- South & Central - Funen, Central & 1 Sales Consultant
360-degree assessment 119 Change management 108, Creative/divergent phase 160
Seal and South Jutland Norway: 1 Export Manager
A.P. Moller-Maersk 132 205 Create effective teams 48
- Central Jutland 1 Floor Consultant + 3 Distributor
Funen & South Jutland - Jutland & Funen companies Aarhus Business Academy Change management Cross functional groups 46
- NorthJutiand Poland: 1 Sales Consultant 122 process 221 CSR 147
Sweden - Subsidiary: Adams 81 Change needs 225 Culture 31
1 Sales Manager Adizes 56, 105 Change reactions 214 Dealing with uncertainty 28
4 Sales Reps. Adizes' leadership roles 56 Change strategies 221 Decisions 108
Hungary: 1 Importer Administrative principles 13 Change vision 223 Decision-making process 109
Administrator 58,59 Circus Summarum 156 Decentralised organisations
Administrator role 106 Classical school 11 29
Adjustments externally and Close environment 144 Definition of innovation 155
internally 144 Code of Conduct 145 Democratic manager 96
Almeco CM Lab 246 Common values 133,225 Demographics 166
Project: Alternative options 109 Communication 67,72, Development of teams/
Give an assessment of the sales department's organisational divi- American Marketing 227 teambuilding 60
Association 152 Competencies 169 Dependency 38, 196
sions.
Analyst 28 Com petitors 157 Dialog 221
Prepare two other proposals for possible divisions and describe Analysis 205 Complex and dynamic exter- Different levels ofinnova-
the advantages and disadvantages of these. Analytical/convergent phase nal environment 195 tion 156
162 Com pleter Finisher 58 Differentiation strategy 185
It is recommended to use Dana Lim's website: www.danalim.dk Application of organisational Conflict perception 216 Division of labour 156
groups 46 Conflict types 51 Domain 24
Appreciative Inquiry 74 Conflicts in the team 54 Drucker's 7 sources of
Artefacts 133 Conscientiousness 70 innovation 166
Attitudes 74 Contents ofCSR 147 Dustbin model 112
Authoritarian manager 97 Context 49 E-commerce 209
Authority 95 Coordination mechanisms Effective teams 43, 48
Autonomous groups 35 and dependencies 194 Eiffel Tower 141
Autonomous teams 52 Coordinator 58 Emotional stability 70
Balanced Scorecard 200 Core competencies 182 Employee competencies 82
Base values 244 Corporate culture 133, 143 Entrepreneur role 105
Behaviour 60 Corporate social responsi- ERP 167
Belbin's team roles 56 bility 146 Ethical codes 151
Blake & Mouton 99 Cost leader strategy 185 Ethical decision-making
Burns & Stalker 32 Creative destruction 156 process 149
Business ethics 144 Creative innovative environ- Ethics 15,145
Carroll 145 ment 170 Ethics in a business context
Change Circle 221 Creative process 159, 164 148
254 255
Expectancy theory 82 Informal norms 55 Mintzberg's leader roles 104 Porter & Lawler 80, 83 Ro Ie types 48 Team management 108
Experience-based 112 Inner need 76 Mission 201 Porter's generic strategies Sales management 108 Team structure 43
Expert strategy 218 Innovation 34, 155 Modern manager 90 184 Schein's culture model 133 Teambuilding 62
External environment 21 Innovation capability 153 Modern organisational Positioning analysis 178 Secondary groups 45 Teamwork 63
External incentives 76 Innovation governance 153 design 14 Positive reinforcement 72 Seven sources of change Technology 164
Feedback 82 Innovation versus creativity Moral judgement 150 Power distance 136 169 The Big-five model of
Formal groups 45 155 Motivation 80 Power structure 138 Shaper 57 personal ity 70
Formalising 31 Innovative company 168 Motivation factors 78, 197 Primary groups 45 Single piece production 196 The four primary culture
Frederic Taylor 12 Innovative work place 169 Mutual adjustment 195 Process-based efficiency 199 Signs of design problems types 140
Functional groups 46 Input/output ratio 81 Mutual dependencies 38 Process needs 167 202 The Power Culture 140
Functional structured Inside-out 178 Myers-Briggs Type Indicators Producer role 59, 106 Situation analysis 180 The unexpected 166
organisation 33 Inspirational motivation 92 (MBTI). 69 Product divisional structure Situational leadership 100 Training and development
Functionalist perspective Instructional management National and regional cul- 34 Social responsibility 129, tactics 117,119
144 style 103 ture relationship 136 Production method 31, 246 145 Transformational leader 91
Garuda model 93 Integrator role 106 National level 158 Production process 155 Socio-technical strategy 218 Trornpenaars og Hampden-
Goal hierarchy 183 Inverted Needs Pyramid 78 Negative reinforcement 72 Project groups 45,47 Span of control 29 Turner's culture 141
Group types 44 Job design 48 Network of innovators 158 Prospector 186, 197 Stable 21, 25 Two Factor theory 78
Groups 43 Job development 85 Network structures 37 Punishment 71,72 Stakeholder model 144 Types of innovation 164
Groupshift 55 Job fit-analysis 76 New knowledge 168 Rational decision-making Standardised skills 195 Uncertainty level 181
Guided missile 142 Job rotation 85 Norms 54,75 process 109 Standardisation of work Value base 235
Guiding team 223 Job significance 86 Objective-based efficiency Reciprocal 38, 196 processes 195 Value chain analysis 30
Hackman & Oldham's job Knowledge sharing 34 199 Reference groups 45 Standardisation of outputs Values 75
design model 83 Kotter 91, 222 Objective theory 80 Recruitment 23, 118 195 Victor Vroom 83
Harmony perception 216 l.aissez-faire manager 98 Occupation conditional Remote environment 144 Strategic 'fit' 187 View of human nature 95,
Hawthorne studies 14 Leader roles 104 ethical codes 151 Resistance to change 212 Strategic level 183 98
Hersey & Blanchard 102 Leadership 89,90 Openness 70 Resource-based perspec- Strategic process 180 Vision 183
Herzberg 79 Leadersh ip characteristics Optimal composition of ad tive 178 Strengths and weaknesses Wealth of ideas 161
Hierarchy 29 95 hoc-teams 56 Resource-based efficiency 57,62 Word chain 161
Hofstede's cultural Leadership form 111 Organic organisations 33 199 Structural redesign 85 X-view perception 97, 218
dimensions 117 Learning organisations 17 Organisational culture 14, Resource Investigator 58 Structure 21 ff. XYtheory 95
Horizontal division of labour Leavitt's Diamond Model 17 Resource types 182 Tactical level 183 Y-view perception 97,218
29 211 Organisational design 14 Rewards 95,139 Tannenbaum & Schmidt
Horizontal communication Lewin 96 Organisational fit analysis Role conflict 48 101
and coordination 35 Lewin's leadership forms 76
H R activities 117 111 Organisational justice 80
HR management (HRM) Logical and rational Organisational strategies
116 behaviour 160 190
HR results 117 Maintenance factors 79 Organisational structure
H R strategy 117 Management development 28,193
Human Resources (HR) 115 121 OT analysis 181
Idea assessment method Management style 79,96 Outcome 225
163 Managerial Grid 99 Outside-in 177
Idea generator 170 Maslow's Pyramid of Needs Participating management
Idea killer 157 79 style 103
Idealised influence 92 Mass produced 196 Perception 166
Incongruent 167 Matrix organisation 36 Performance-based rewards
Incubator 141 McClelland's theory 79 117
Individuals in groups 47 McGregor 95 Permanent team 60
Individual level 156 Mechanistic or organic Personnel policy 121
Individualism 136 structures 32 Personnel quota 30
Industrial ethical codes 151 Mechanistic organisation Personality 56
Industrial revolution 11 33 Personality test 60
Industry and market Michael Porter 177 Picture association 162
structure 167 Miles & Snow's archetypes Plant 58
Informal groups 45 186 Pooled 196
Chpbusiness City
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