Chapter I An introduction to managing people in changing contexts > greater control over how they perform their iobs than in the tradi- tional manufacturing sectors,largely because of the difficulties in measuring employee output.Services are by definition more qualita tive in nature because there is often no tangible output and,in the case of personal services,they are'consumed'immediately.Think about the quality of service provided by checkout operators in a retail store and then think about the difficulties in measuring their output.High- performing retail organizations such as the UK-based Tesco,which regard the service provided by their checkout operators as the key to getting repeat business,place great emphasis on the links between sat- isfied and commiued employees,high-quality service and strong brand performance.This link between committed emplovees and the serv ice-profit chain is the major element in Kaplan and Norton's (2001) 'theory of the business',to which we shall return in Chapter 6. The newer variant has developed because of the increased emphasis on knowledge work in modern economies,which became especially fashionable to emphasize following the 'dot-com'boom in the USA and Europe in the late 1990s.The argument here is that knowledge workers(and most skilled and professional employees can be labelled thus)enjoy genuine power vis-a-vis employers over the one scarce non-substitutable resource that modern organizations use to compete, and that is knowledge and information (Evans and Wurster,2000) The old adage that'knowledge is power'has never been more true,it is argued,and in organizations that rest on knowledge as their distinc tive competence,managing employees who have effective control ove it has become a different proposition from managing large numbers of unskilled workers,whose prior knowledge has been effectively relocat ed into machines.So,for example,the models of top-down control that were employed in motor vehicle manufacture are not seen to be relevant in managing consulting firms,healthcare or science-based industries such as biotechnology.Getting the best from employees in these kinds of industry,where expertise is often located in unwritten tacit know-how built up over years of experience,usually requires organizations to provide them with high levels of involvement in key decision-making rather than tell them what to do and how to do it, since managers often lack the expertise to do so.Think of the prob lems and conflicts that occur between hospital administrators and medical practitioners.or between managers who do not have a tech- nical background and technologists,and you begin to get a sense of the need to manage differently. There are two final points I wish to make in this section on domi- nant ideas and guru theory paradigms.The first is that our models of
greater control over how they perform their jobs than in the traditional manufacturing sectors, largely because of the difficulties in measuring employee output. Services are by definition more qualitative in nature because there is often no tangible output and, in the case of personal services, they are ‘consumed’ immediately. Think about the quality of service provided by checkout operators in a retail store and then think about the difficulties in measuring their output. Highperforming retail organizations such as the UK-based Tesco, which regard the service provided by their checkout operators as the key to getting repeat business, place great emphasis on the links between satisfied and committed employees, high-quality service and strong brand performance. This link between committed employees and the service–profit chain is the major element in Kaplan and Norton’s (2001) ‘theory of the business’, to which we shall return in Chapter 6. The newer variant has developed because of the increased emphasis on knowledge work in modern economies, which became especially fashionable to emphasize following the ‘dot-com’ boom in the USA and Europe in the late 1990s. The argument here is that knowledge workers (and most skilled and professional employees can be labelled thus) enjoy genuine power vis-à-vis employers over the one scarce, non-substitutable resource that modern organizations use to compete, and that is knowledge and information (Evans and Wurster, 2000). The old adage that ‘knowledge is power’ has never been more true, it is argued, and in organizations that rest on knowledge as their distinctive competence, managing employees who have effective control over it has become a different proposition from managing large numbers of unskilled workers, whose prior knowledge has been effectively relocated into machines. So, for example, the models of top-down control that were employed in motor vehicle manufacture are not seen to be relevant in managing consulting firms, healthcare or science-based industries such as biotechnology. Getting the best from employees in these kinds of industry, where expertise is often located in unwritten, tacit know-how built up over years of experience, usually requires organizations to provide them with high levels of involvement in key decision-making rather than tell them what to do and how to do it, since managers often lack the expertise to do so. Think of the problems and conflicts that occur between hospital administrators and medical practitioners, or between managers who do not have a technical background and technologists, and you begin to get a sense of the need to manage differently. There are two final points I wish to make in this section on dominant ideas and guru theory paradigms. The first is that our models of Chapter 1 An introduction to managing people in changing contexts 17
18 Managing people and organizations in changing contexts management do change over time,often in a cyclical fashion.In con nection with the two big ideas of top-down control and bottom-up management,it is clear that they have ebbed in and out of fashion throughout the last 100 or so years.Often,this has been a reaction to the worst excesses of their application,as in the case of scientific man Isome ver sions of human relations teaching.Change and changefulness are at the heart of business and management theory and practice because organizations are always in a process of 'becoming',especially giver the often turbulent nature of their environments.Thus,any text and course on management has to reflect such change and make it a cen- tral feature of the analysis The second point is to warn you about some of the worst excesses of guru theory and the kinds of material that you can often pick up in air- port bookstalls.Willing consumers of management knowledge,looking for quick fixes,are sometimes motivated by the search for'newness'.As a consequence,we are witnessing the creation of a fads and fashion industry for management knowledge (Joyce et al,2003).Pascale (1999) identified many such fads that,in their day,laid claim to paradigm sta- tus,most of which have been discredited or else have been counter manded by other fads and fashions.Because of this faddist nature of management,the whole discipline of management has been character- ized as little more than an immature body of knowledge lacking a prop- er scientific basis and bedevilled by inconsistencies and contradictions that would not be tolerated in any other area of scientific life (Micklethwait and Woolridge,1997).This faddish nature of much of management knowledge has been seen as the cause of the low status of business schools within the university community and has raised severe question marks over the role and content of courses such as the MBA In this book I hope to help you avoid these pitfalls and help you learn useful,though often critical,ideas that have stood the test of time. A framework for the book Bearing in mind the issues previously raised in this chapter about the nature of management and change,the course focuses on the prob- lems of managing people in changing contexts. To help guide you through the rest of the book,let's look at Figure 1.1. Any book in management has to begin with an examination of the nature of what is being studied and practised,which is the subject of Chapter 2.In this chapter I have adapted and reworked some ideas by
management do change over time, often in a cyclical fashion. In connection with the two big ideas of top-down control and bottom-up management, it is clear that they have ebbed in and out of fashion throughout the last 100 or so years. Often, this has been a reaction to the worst excesses of their application, as in the case of scientific management, or because they have failed to deliver what was promised, which was the case with business process re-engineering and some versions of human relations teaching. Change and changefulness are at the heart of business and management theory and practice because organizations are always in a process of ‘becoming’, especially given the often turbulent nature of their environments. Thus, any text and course on management has to reflect such change and make it a central feature of the analysis. The second point is to warn you about some of the worst excesses of guru theory and the kinds of material that you can often pick up in airport bookstalls. Willing consumers of management knowledge, looking for quick fixes, are sometimes motivated by the search for ‘newness’. As a consequence, we are witnessing the creation of a fads and fashion industry for management knowledge (Joyce et al., 2003). Pascale (1999) identified many such fads that, in their day, laid claim to paradigm status, most of which have been discredited or else have been countermanded by other fads and fashions. Because of this faddist nature of management, the whole discipline of management has been characterized as little more than an immature body of knowledge lacking a proper scientific basis and bedevilled by inconsistencies and contradictions that would not be tolerated in any other area of scientific life (Micklethwait and Woolridge, 1997). This faddish nature of much of management knowledge has been seen as the cause of the low status of business schools within the university community and has raised severe question marks over the role and content of courses such as the MBA. In this book I hope to help you avoid these pitfalls and help you learn useful, though often critical, ideas that have stood the test of time. A framework for the book Bearing in mind the issues previously raised in this chapter about the nature of management and change, the course focuses on the problems of managing people in changing contexts. To help guide you through the rest of the book, let’s look at Figure 1.1. Any book in management has to begin with an examination of the nature of what is being studied and practised, which is the subject of Chapter 2. In this chapter I have adapted and reworked some ideas by 18 Managing people and organizations in changing contexts
Chapter I An introduction to managing people in changing contexts 19 The Con rate Context Context (Chapter Context (Chapter 3) The Nature of (Chapter8) Figure 1.I A framework for the book. well-known management theorists to produce a model of a well-rounded manager who is capable of operating at different levels and in differ. ent contexts in modern economies.This model of management should help you to think more reflectively about your own job and oth- ers you may move into during your career. The first premise of the model is that management is practised at different levels-managing on the inside,managing across the organ- ization and managing on the outside,which we discuss in Chapter 2. Managers who are unable to deal effectively with people at these dif ferent levels are increasingly unlikely to deliver strategic goals.This is equally true for human resource managers and many line manag who have traditionally defined their roles as managing on the inside. as well as marketing managers.whose roles have naturally inclined them to manage on the outside The second premise of the model is that managers are being asked to
well-known management theorists to produce a model of a well-rounded manager who is capable of operating at different levels and in different contexts in modern economies. This model of management should help you to think more reflectively about your own job and others you may move into during your career. The first premise of the model is that management is practised at different levels – managing on the inside, managing across the organization and managing on the outside, which we discuss in Chapter 2. Managers who are unable to deal effectively with people at these different levels are increasingly unlikely to deliver strategic goals. This is equally true for human resource managers and many line managers, who have traditionally defined their roles as managing on the inside, as well as marketing managers, whose roles have naturally inclined them to manage on the outside. The second premise of the model is that managers are being asked to manage in changing contexts, which, in some respects, are qualitatively different from the experience of managing even a few decades ago. Let’s Chapter 1 An introduction to managing people in changing contexts 19 The Corporate Context and Managing People (Chapter 6) The Technological Context and People Management (Chapter 8) The Knowledge Context and Managing People (Chapter 7) Managing Organizational Change (Chapter 9) The Nature of Management, Managers and their Work (Chapter 2) Managing in the Individual– Organizational Context (Chapter 3) Managing in the Organizational Context (Chapter 4) Managing in an International Context (Chapter 5) Figure 1.1 A framework for the book
20 Managing people and organizations in changing contexts take an example from a real life case I came across quite recently.A sen ior sales manager,working for a leading international instrumentation company,is asked to take on the role of managing a global team of high- ly qualified,highly paid sales engineers,operating in ten countries.It makes little sense to have these sales engineers relocate to head office,so the organizational structure has to be'virtual'and the senior sales man ager will have to learn to manage at a distance and across time zones.The problem has come about because the company has grown rapidly through acquisition and has taken over companies in these ten countries during the previous two years.His job is to instil a sense of corporate spir it into these engineers as well as support them in their aims to develop their own national markets.Thus,he faces the problems of managing a disparate group of people,from very different national and organiza tional cultures,to manage locally and integrate their efforts with each other,thereby aligning them with the strategic aims of the company This example throws up the problems of managing in multiple, changing contexts.Our senior sales engineer's initial problem is to understand the different expectations,needs and attachments that connect individuals with organizations-their psychological contracts -and how best to exercise leadership in circumstances where people are likely to differ markedly in their expectations,needs and attach ments.This is the subject of Chapter 3.Then he has to understand how organizational structures can influence individual and group behaviour,and how to design and operate in structures that are more complex and virtual than those he has previously experienced,which is the subject of Chapter 4.He also faces the problems of managing in an international context,which is sometimes defined in terms of over coming the 'liability of foreignness':How should managers deal with the costs of doing business abroad,arising from unfamiliarity with the cultural and institutional environment and the needs for coordination across time and space?This is the subject of Chapter 5. Moving on,the example raises problems of how to create a sense of corporateness in a previously fragmented organization because the organization wishes to leverage its international brand for new mar- kets.It also raises the problems of managing employees who are knowl edge workers,many of whom are individualistic by nature and can exercise lots of power because of their understanding of local markets, and the issue of how technology might be used to achieve global inte gration of the sales team in a way that was close to impossible before the introduction of the Internet.So,in Chapter 6 we shall look at the corporate context and examine the problems managers face in creating strong corporate reputations and corporate brands.In
take an example from a real life case I came across quite recently. A senior sales manager, working for a leading international instrumentation company, is asked to take on the role of managing a global team of highly qualified, highly paid sales engineers, operating in ten countries. It makes little sense to have these sales engineers relocate to head office, so the organizational structure has to be ‘virtual’ and the senior sales manager will have to learn to manage at a distance and across time zones. The problem has come about because the company has grown rapidly through acquisition and has taken over companies in these ten countries during the previous two years. His job is to instil a sense of corporate spirit into these engineers as well as support them in their aims to develop their own national markets. Thus, he faces the problems of managing a disparate group of people, from very different national and organizational cultures, to manage locally and integrate their efforts with each other, thereby aligning them with the strategic aims of the company. This example throws up the problems of managing in multiple, changing contexts. Our senior sales engineer’s initial problem is to understand the different expectations, needs and attachments that connect individuals with organizations – their psychological contracts – and how best to exercise leadership in circumstances where people are likely to differ markedly in their expectations, needs and attachments. This is the subject of Chapter 3. Then he has to understand how organizational structures can influence individual and group behaviour, and how to design and operate in structures that are more complex and virtual than those he has previously experienced, which is the subject of Chapter 4. He also faces the problems of managing in an international context, which is sometimes defined in terms of overcoming the ‘liability of foreignness’: How should managers deal with the costs of doing business abroad, arising from unfamiliarity with the cultural and institutional environment and the needs for coordination across time and space? This is the subject of Chapter 5. Moving on, the example raises problems of how to create a sense of corporateness in a previously fragmented organization because the organization wishes to leverage its international brand for new markets. It also raises the problems of managing employees who are knowledge workers, many of whom are individualistic by nature and can exercise lots of power because of their understanding of local markets, and the issue of how technology might be used to achieve global integration of the sales team in a way that was close to impossible before the introduction of the Internet. So, in Chapter 6 we shall look at the corporate context and examine the problems managers face in creating strong corporate reputations and corporate brands. In 20 Managing people and organizations in changing contexts
Chapter I An introduction to managing people in changing contexts 21 Chapter 7,we shall examine the changing nature of work,particularly the role of knowledge in creating value in organizations and the prob- lems of managing so-called knowledge workers.In Chapter 8 we shal study the changing technological context,particularly the role of information and communications technologies in being a positive,but sometimes negative,force for change. Finally,our senior sales engineer will face the problems of manag ing the change process itself;how should he turn his plans for a glob ally integrated sales team into action.The old saying about the best laid plans falling down in the implementation is even more appropri- ate in an increasingly unknowable world,which is the subject of Chapter 9. Learning summary In this chapter we have learned about some of the key ideas underlying the management of people in changing contexts,including the rele- vance of universalism and relativism to management practice and the importance of mindsets in shaping how we view management problems and solutions. First,I argued that the idea of'best practice'is flawed because man agement practices are always 'context bound'in the sense that prac tices are developed in unique mixtures of organizational,industrial. cultural and historical 'soil'.Therefore,you cannot transfer practices easily from one situation to another without some adaptation and con- siderable time and effort to embed these practices in new fertile soil. Thus,practices can best be described as'promising';there is simply no one-best-way to manage. Second,I suggested that change is one of the few universals or con stants of management.Therefore,understanding how contexts and ideas about management have changed and have often been recycled is impor- tant.However,such change is often cyclical,exemplified by the major debate in management theory and practice-top-down versus bottom-up management and organization.Management theory has been dominat. ed at different points in history by the mechanistic mindset,which has resulted in bureaucratic organizations and control,and the organic mindset.which is revealed through a more bottom-up.humanistic and people-oriented mode of management.These cycles of interest reflec models of national economic and business success-for example,the Japanese model and organic management-and the role of management gurus in shaping dominant ideas.All managers are searching for some
Chapter 7, we shall examine the changing nature of work, particularly the role of knowledge in creating value in organizations and the problems of managing so-called knowledge workers. In Chapter 8 we shall study the changing technological context, particularly the role of information and communications technologies in being a positive, but sometimes negative, force for change. Finally, our senior sales engineer will face the problems of managing the change process itself; how should he turn his plans for a globally integrated sales team into action. The old saying about the bestlaid plans falling down in the implementation is even more appropriate in an increasingly unknowable world, which is the subject of Chapter 9. Learning summary In this chapter we have learned about some of the key ideas underlying the management of people in changing contexts, including the relevance of universalism and relativism to management practice and the importance of mindsets in shaping how we view management problems and solutions. First, I argued that the idea of ‘best practice’ is flawed because management practices are always ‘context bound’ in the sense that practices are developed in unique mixtures of organizational, industrial, cultural and historical ‘soil’. Therefore, you cannot transfer practices easily from one situation to another without some adaptation and considerable time and effort to embed these practices in new fertile soil. Thus, practices can best be described as ‘promising’; there is simply no ‘one-best-way’ to manage. Second, I suggested that change is one of the few universals or constants of management. Therefore, understanding how contexts and ideas about management have changed and have often been recycled is important. However, such change is often cyclical, exemplified by the major debate in management theory and practice – top-down versus bottom-up management and organization. Management theory has been dominated at different points in history by the mechanistic mindset, which has resulted in bureaucratic organizations and control, and the organic mindset, which is revealed through a more bottom-up, humanistic and people-oriented mode of management. These cycles of interest reflect models of national economic and business success – for example, the Japanese model and organic management – and the role of management gurus in shaping dominant ideas. All managers are searching for someChapter 1 An introduction to managing people in changing contexts 21