The Self-Managing Organization : How Leading Companies Are Transforming the Work of Teams for Real Impact

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9780684837345: The Self-Managing Organization : How Leading Companies Are Transforming the Work of Teams for Real Impact
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Based on the principles of "Participative Design," the authors explain why employees' participation is the key to successful corporate reorganization and present detailed case studies of major companies in which employees design and manage their own workplaces.

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Business consultants Ronald Purser and Steven Cabana argue that it's time for democracy to replace bureaucracy at work. In The Self-Managing Organization, they warn that high-tech, knowledge-based businesses perform best with the flexibility, creativity, and information sharing that come with more freedom on the job. "We need the real medicine now: democracy at work," write the authors, consultants to such companies as Motorola and Procter & Gamble.

Building on research by social scientists at the Tavistock Institute in London in the 1950s, Purser and Cabana explain the theory and provide examples of two self-managing techniques for improving work: Participative Design and the Search Conference. The Participative Design method asks workers themselves to determine what's wrong at the company and suggest solutions. And the Search Conference method has workers develop new business strategies to help the company succeed. The Self-Managing Organization thus offers provocative ideas to business managers and students. --Dan Ring

Excerpt. Reprinted by permission. All rights reserved.:

THE END OF MANAGEMENT AND THE RISE OF THE SELF-MANAGING ORGANIZATION

What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.

-- T.S. Eliot

Management is coming to an end. We might liken the end of management to the fall of communism. When institutions get out of synch with the movement of history, they go into decline -- whether they are national governments or private enterprises. We believe that conventional management will be the next domino to fall.

Conventionally, management has been focused on planning, organizing, directing, coordinating, and controlling human efforts. Managers were seen as the exclusive stewards of the business, occupying a distinct social role and fixed position in a bureaucratic hierarchy. For many years managers were internally focused, absorbed in operational details, controlling and coordinating the work of their subordinates and dealing with office politics. Management was sucked into acting as a troubleshooter and firefighter for the level below. This all just seemed like the natural order of things. And from such a perspective, it didn't make sense to question what seemed to be well established dogma. Management meant controlling the work of other people. Over the course of this century, management had established its own interests, and to question this was to risk deconstructing what had been carefully constructed.

Yet as the foundation of bureaucracy started to crack, the frailties of the traditional management approach became more and more apparent. No matter how dedicated internally focused managers were, their intermediary role did not directly contribute to output or add value to customers. Managers were fixated on control, order, and prediction, but they themselves did not produce anything real or useful. Like a cancer, management spread as it became associated with the external supervision of internal work processes. Layers upon layers of management were added, and a costly support staff proliferated, making organizations into bureaucratic labyrinths. As organizations became more complex, this justified the call for more managers, more supervisors, and more administrators to wade through the maze and barrage of paperwork, memoranda, endless signoffs, and bureaucratic approvals.

Excess management put a stranglehold on the real producers -- the people who actually produce a product or provide a value-added service. Most jobs in manufacturing and service industries were narrowly designed and subject to close supervision. In the absence of intrinsically motivating and interesting work, employee alienation led to a loss of commitment. Symptoms of employee alienation showed up in high turnover, absenteeism, labor disputes, poor product quality, and increased downtime -- all of which added to the costs of production. In short, tall hierarchies, a control-oriented management, and poor work design resulted in an unresponsive, self-serving bureaucratic monster. Management, as we have known it in this sense, is coming to an end.


SELF-MANAGEMENT AND THE KNOWLEDGE REVOLUTION

The knowledge revolution is making conventional management obsolete. The unprecedented and rapid advancements in information technology, telecommunications, and artificial intelligence are transforming both the context and content of work. Organizations on the leading edge of this change are creating network-like virtual organizations that undermine our whole notion of conventional managerial roles in a bureaucratic hierarchy. Intranets, electronic spreadsheets, groupware, and teleconferencing are obliterating Max Weber's "files" and offices -- the raw materials of a bureaucracy.

Clearly, the magnitude of this transformation is pervasive. Despite the continual decline and exodus of heavy U.S. manufacturing, innovations in technology and knowledge-based products have brought about the transition to a white-collar professional and service economy, which now accounts for 75 percent of private employment. Although the growth of the service sector, along with the concomitant emergence of the "knowledge worker," is as dramatic a change as was the disappearance of farm hands and the replacement of agrarian work with that of mass assembly-line production, productivity in the white-collar sector has remained relatively flat. This is why the principles and practices of self-management increasingly make sense if organizations are to tap the creative talents of their knowledge workers. Indeed, quality and productivity improvements in knowledge-based work will not be derived solely from installations of new technology, but will require substantial changes in business processes and organizational arrangements.

The environmental conditions that once made a traditional command-and-control hierarchy viable are rapidly decreasing. Under conditions of rising uncertainty, bureaucratic organizations simply do not have the requisite learning and information processing capacity to cope with the accelerating rate of technological and social change. Turbulence has forced organizations to develop or strengthen their ability to scan the environment and respond to it through the acquisition, development, and application of knowledge (Purser and Pasmore, 1992). In fact, organizations must now devote a more significant proportion of their resources to apprehending, thinking, learning, and innovating -- the basic elements of knowledge work. Put more simply, the changes we are experiencing are causing organizations to employ more people who think for a living rather than simply following directions.

Further, the infusion of new information technology into corporations is eliminating the need for redundant managerial positions whose only purpose is to collect and process information, relay messages up and down the hierarchy, monitor performance, and measure results. Traditional status and power relationships that are the cornerstones of a dominant hierarchy are being shattered by new information technology that can break down barriers between levels and functions. Secrecy is the enemy of trust, and new technology makes it possible to share greater amounts of information with the workforce. Rather than expropriating information from workers so that it can be utilized and controlled by management (the stuff that Taylorism is made of), new technology is being used to democratize work. When shop-floor operators and front-line employees can access information about their performance instantaneously, what need is there for a human intermediary whose only task is to collect and disseminate information to others? The knowledge revolution has the potential of turning every employee into a "self-manager."

Moreover, as work centered around production processes continues to shift to work that is dependent upon employees to generate knowledge, as well as to deliver products and services fast, reliably, and at the lowest possible cost, organizations require highly committed and well-educated employees. Organizations can no longer survive if their workforce is alienated, poorly trained, and unresponsive to the shifting demands of the marketplace. Perhaps most importantly, hierarchies based on personal superiority -- that is, organizations that align authority with position -- are becoming increasingly ill suited to knowledge-intensive companies. These types of organizations -- high-technology companies, software houses, professional service firms, and science-based industries -- must rely on the creativity and commitment of knowledge workers who are specialists or professionals in their fields. Knowledge workers are more autonomous, more specialized, and are quite capable of controlling and coordinating their own work. Conventional "command-and-control" management is a kiss of death in knowledge-based firms, as knowledge workers place a high value on their autonomy and freedom to make their own decisions. However, in most traditional organizations, authority of position overshadows expertise in decision making. Conventional management often decides, unilaterally, what knowledge will be used and how. Experts who have the most relevant knowledge are frequently excluded from discussions where key strategic decisions are made.

We are quite certain that if companies are going to improve their knowledge development capabilities, it will require a fundamentally different set of social dynamics and structural logic for designing organizations. Indeed, if the primary goal is to improve the development and application of useful knowledge -- to unleash human intelligence to serve customers -- then the self-managing organization seems to be a logical and rational choice for managers in the twenty-first century. But the inertia of the old paradigm is still with us. For almost a century, bureaucratic organizations limped along under the protection of stable domestic markets. Under these conditions, it was possible to tolerate such dynamics as hoarding knowledge for political gain; secrecy; one-upmanship; conflict among functions or departments; the exercise of power in decision making unrelated to knowledge or expertise; a lack of cooperative behavior; and a reluctance to change practices or procedures. Rather than improving competitiveness and enhancing the competencies of the firm, a great deal of time and energy is often wasted on these debilitating distractions. Most organizations nowadays cannot afford such distractions; they must focus their attention in more productive and fruitful ways.

Companies that must compete in a rapidly changing and unpredictable environment, especially if they rely on knowledge workers, can derive great benefits by focusing their design efforts in the direction of greater self-management. We are witnessing a conscious evolution to a new, more adaptive form of corporate species -- the self-managing organization. This trend is clearly the wave of the future. The question is: will companies wake up in time to ride the crest of the wave, rather than being left behind in its wake?


THE SELF-MANAGING ORGANIZATION

Based on a new design principle, the self-managing organization eradicates the need for external supervision and costly bureaucratic overhead. A self-managing organization places the control of the work process in the hands of the people who actually touch a product or provide the service. People can control their own work, participating directly in decisions that affect the outcomes of their unit. Self-managing organizations by design prevent persons from centralizing authority or embedding power in fixed roles, allowing the organization to remain flexible and adaptive to changing circumstances.

Self-management, then, implies more than simply a cosmetic change in management style that leaves asymmetrical power arrangements intact. Self-managing organizations redistribute the power to make decisions to people who have the strategic knowhow, or to groups who are responsible for a whole work process. Under such new arrangements, the traditional tasks of management -- planning, controlling, organizing, and coordinating the work of others -- no longer makes sense. Rather, it is management's responsibility to create the conditions that allow people to plan, control, organize, and coordinate their own work. This is a big paradigm shift.

But the paradigm shift has been underway for some time now. Fortune magazine's 1998 assessment of the 100 best companies to work for in America found that many companies have been moving toward the self-management paradigm. For example, at the company at the top of their list -- Southwest Airlines -- employees are treated with utmost respect, are paid well, and their ideas are used to solve problems on a regular basis. Similarly, Wall Street Journal columnist Tom Petzinger's (1997) annual forecast of business strategies found that the key emerging trend was toward restructuring organizations toward self-management. Leading-edge companies are finding ways to tap the contributions of their employees through self-managing work systems, freeing talented knowledge workers from the bastions of central planning and autocratic control. Petzinger says the dominant theme in the hundreds of interviews he conducted and the thousands of e-mails he has received is the need to rethink our antiquated definitions of management and the way we structure work.

At W. L. Gore, the manufactuer of Gore-Tex fabrics and many other high-tech materials, the traditional hierarchy has been replaced by a broad-based system of empowerment which is unique and unduplicated elsewhere. Consider the way it operates: There are no fixed positions of formal authority (people have sponsors, not bosses), lines of communication are direct, objectives are set by those who make them happen, teams are formed when the need arises, tasks and functions are organized through commitments, not compliance.

At Synovus Financial in Columbus, Georgia, we find a bank where people actually enjoy working because they are able to learn, grow, and have fun. At one of the most profitable enterprises, the major Wall Street investment firm Goldman Sachs, in New York, employees perceive that their teamwork is better than on most professional sports teams. The Whole Foods supermarket chain in Austin, Texas, was recently featured in a PBS special as having an empowered workforce which caps CEO compensation at 10 times the average that team members are paid. As we go through the list of Fortune's 100 best companies to work for in America, we find over thirty that have been working with the principles behind self-management for many years.

And we can see why. Self-management can rev up the workforce and boost performance. Meet the workers at CIG Gas Cylinders in Sydney, Australia, a unionized facility where technicians work without bosses breathing down their necks. Technicians at CIG have even started taking on tasks that were once reserved for top-level management. For example, technicians interviewed candidates for the general manager of a business that will turn over $43 million this year. After the interviews they came to the conclusion that they really didn't need to fill the general-manager position -- they would do the job themselves! John Buis, the only remaining manager at CIG Gas Cylinders, supported the technicians but admitted that such autonomy depends on the maturity of the people and teams. "The decision is not irreversible," says Buis. "But the role of management in this business is in promoting change, business development, and improvement."

The technicians designed a new structure that would redistribute the work of the traditional general manager's role to themselves and the professional support staff. "We are saying we are going to self-managing teams that are accountable for what they do," says technician Larry Smith. "If we hire a general manager we would be being hypocritical." CIG has been on the journey toward self-management for over a decade. CIG's teams have received training, equivalent in some years to 10 percent of total payroll costs, to allow them to take on greater responsibilities from their immediate managers gradually.

"We have just watched our people ...

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