Organizational Behavior the Basic Objective

Organizational Behavior

The basic objective of this project is to describe and analyze the organizational structure of Foresight Technologies Co -- a fictional company, as well as to investigate whether this organizational structure is directed towards achievement of the organizational goals. In addition, this project also aims to suggest appropriate recommendations to the organizational structure which would further facilitate the realization of the organizational goals and lead to increased control, efficiency and calculability. The write-up begins with an overview of the organization, i.e. its inception, location, size, etc. followed by the organizational structure, an overview of departments, its work functions, communication, organizational mission, goals, objectives, etc. And the organizational culture in the company. This is followed by identification of the organizational contingencies and its "fit" with the structure, goals and objectives. The project concludes with a short summary of the main points covered along with some recommendations on how to improve the organizational structure and culture at Foresight Technologies.

2. Overview

Foresight Technologies Co. is a medium-sized company formed in 2006 as a result of the merger between two small companies -- Sight Technologies and ForeScan Ltd. dealing with software solutions. This company is located in Portland, Oregon and employ approximately 300 people. The organizational structure of Foresight Technologies can be described as an "organic structure" with a typical decentralized structure with a low level of formalization. As most organic structures, Foresight also has a matrix management structure. Communication is mostly informal, multi-level as well as lateral often without resorting to written interactions. However, the legacy of the earlier two firms from which this organization evolved has still remained as most of the employees have been sourced from these companies and the existence of two clear groups within the organization cannot be ignored. (Organisation Behaviour: Structuring the Organization, p. 21)

3. Organizational Structure of Foresight Co.

The functions and form of all the activities conducted in an organization define the structure of an organization. In other words, the scheme of authority relationships and the procedures involving tasks and reporting within the organization is referred to as organizational structure. Now one of the main issues concerning us here in this project is the relationship between organizational structure and organizational goals. One must remember that the fundamental rationale of organizational structure is to control and synchronize the activities of the workers in order to attain organizational goals. (Griffin; Moorhead, 2009, p. 407)

Foresight Technologies, in its early days, witnessed a clash of organizational cultures due to a variety of factors. This has left a trail of internal disturbances which are not very apparent but do affect the realization of the collective goals of the organization till date. One of the reasons for this internal conflict has been the entire restructuring of the organizational structure as part of the "cultural change" program initiated after the merger of the two loss-making firms. Despite the apparent strong support received from the top management, the restructuring of the organization was partially successful. (Section 2: Organizations & Culture, p. 67)

There has been an attempt to base the current organizational structure of Foresight Technologies on the "Contingency Theory" according to which the design of an organization depends to a large extent on the environmental contingencies faced by organizations. It is true that the effectivity and survivability of an organization rests on how much the internal structure of the organizations complements the environmental contingencies. (Organisation Behaviour: Structuring the Organization, p. 24) The top management also realized that organizational effectiveness in terms of both social and financial aspects require well-designed as well as rationalized structures and therefore the need for adopting the "best practices" from the managerial domain. (Organisation Behaviour: Structuring the Organization, p. 1); (Banerjee, 1995, p. 109)

a. Overview of departments (functional/product-based)

As mentioned before, the current organizational structure at Foresight is a matrix one which essentially means that here there are two types of departmentalization -- product-based and function-based. Both these, of course, have their own merits and demerits. For instance departments at Foresight include the traditional ones like marketing, HRD and finance apart from other departments like "software engineering," "system administration," "web development," "copywriting & documentation," "quality assurance," "research and development," and "customer care." Gitman; McDaniel, 2009, p. 190) These departments are horizontally arranged in terms of work functions but some are vertically arranged in terms of time or phase in the pipeline. Departments like "customer care" have a special cell called "remote assistance" which provides software and limited hardware support to offshore clients. (Kmetovicz, 1992, p. 106)

b. Detailed description of work functions

The software engineering department is responsible for designing, coding and testing a new software product, system integration, and finally providing evaluation support. System administration is responsible for maintenance of the hardware and software platforms on which the entire projects run as well as for providing overall hardware and software support to the rest of the departments. The web development department looks after the maintenance of web sites and the provision of resources -- support software and documentation on it. (Kmetovicz, 1992, p. 110)

The copywriting and documentation department creates and maintains the libraries, project documentation as well as user manuals. The quality assurance section checks the safety and reliability of products as well as maintains process statistics and confirming the products' regulatory compliance. The R&D department is responsible for product innovations. The marketing department chalks out strategies for promotional campaigns, advertising, market research, etc. The HRD department looks after the recruitment, placement, career development, salaries and benefits of employees. The finance department is in-charge of cost-accounting, financial analysis and reporting, and accounting of individual projects. (Kmetovicz, 1992, p. 112)

Most, but not all, of the departments consist of "Team Members" who report to their respective "Project Leaders" who in turn have "Group Leaders" above them. The "Group Leaders" report to one or more "Program Managers" who are accountable to a Board of Directors headed by the CEO -- Bill Smith. At Foresight, only the Program Manager can work across other disciplines in both horizontal as well as vertical manner collaborating with other management teams as well as the top management. However, none of these arrangements is absolute and is flexible in various degrees. For instance, "a team member with an innovative "first-of-kind" product idea may be placed in the R&D department to further his/her idea." (Kmetovicz, 1992, p. 116)

Special projects often witness the convergence of talent from diverse departments. Thus, a specific project may include a member of the R&D team, a few members from the software engineering section, documentation experts, a marketing member, a hardware engineer from the system administration department, etc. Also, a team member working with product development of a particular project in the software engineering section may be shifted to the quality assurance team working on the later phases of the same or different project or on a new/innovative product development project in the R&D department. Hierarchy at Foresight is a simple multi-layered one with not more than 4 or 5 levels in most departments. However, departments like marketing, finance, HRD or customer care do not have the same arrangement and often report to their respective heads of departments who in turn report directly to the board of directors. (Kmetovicz, 1992, p. 117)

c. Communication at Foresight Technologies

It is well-known that effective communication in an organization can be highly motivating for the employees and may also serve to facilitate the decision-making process. In addition, it also serves to help employees bring out their emotion and at the same time controls employee behaviour. The management at Foresight recognizes the fact that successful communication is not only essential for motivation and performance management but also for transmission of new ideas and information and for conveying organizational goals throughout the organization. It is also required for effective job training, attaining employee coordination, conveying rules and regulations and for increasing commitment and involvement of employees. (Section 5: Organisation Communication and Control, p. 116-117)

However, Foresight had the unique problem of dealing with a section of employees, belonging to one of the earlier two companies which formed Foresight, who were used to traditional and formal -- mostly written and somewhat bureaucratic methods of communication whereas the rest were more accustomed to more informal methods of interaction with written/digital being resorted in very official and necessary situations. The cultural change at Foresight initially led to some conflicts with informal methods not being given much importance or not being adhered to until the management arranged for a few workshops on importance of communication and various communication methods for both the sections of employees. (Section 5: Organisation Communication and Control, p. 165)

Another factor which changed a few things for the better at Foresight was when the earlier CEO who earlier worked with Sight Tech. was replaced by an outsider -- Bill Smith -- in 2008. The change in leadership brought in quite a few changes. In fact, the entire organizational structure at Foresight was overhauled in accordance with the organizational goals and vision. Smith provided the appropriate managerial direction which struck the right balance between creativity, performance and productivity. His farsightedness which encompassed a wide vision was long-term, ambitious and the same time entirely practical and feasible. (Section 7: Leadership and Management, p. 243)

Having earlier steered a floundering company towards a successful path, Smith's work was uphill. He had to drastically change the organizational culture and structure while reducing conflict within the very talented set of employees and provide them with a collective direction. He was also expected to reduce the atmosphere of uncertainty prevailing in the organization and use the "countercultures" of the earlier two companies to foster innovation and creativity and thus get a competitive advantage for the new organization. (Section 2: Organizations & Culture, p. 64)

d. Organizational goals, vision, mission, objectives and values

Organizational mission defines the very reason for its existence. It basically refers to a general all-encompassing statement which normally is not meant for alteration every year or with an alteration in organizational structure -- i.e. organizational mission is a long-term commitment. The organizational mission at Foresight Technologies is to create innovative trend-setting software to fulfil the needs of the current and future businesses. An organizational mission gives rise to organizational goals which are more specific. (USD Casa. Setting Organizational Goals); (Rowitz, 2009, p. 102)

Organizational goals provide identity, prevent chaos and impart direction to an organization. These are fundamentally statements that explicitly express the things that an organization wants to accomplish. These are the end-results of all the activities that the organization undertakes in a particular period of time. Thus, goals may display alterations from time to time or at different periods and are therefore medium-term commitments. Such goals provide motivation to workers by conveying to them what the company wishes to achieve. (USD Casa. Setting Organizational Goals); (Rowitz, 2009, p. 102)

Appreciating and acknowledging successes and accomplishments of workers also depends on the achievement of these goals to large extent. For instance, Foresight has at different points of time simultaneously or separately identified its organizational goals as "Retaining the earlier pool of talented workers," "Utilizing new hardware technologies to produce more reliable and faster applications," "Recruiting talented, highly-motivated managers with a proven track record of turning around a company," "Creating a secure, fool-proof, highly-reliable and real-time software for the banking industry," "Providing 24x7 online customer support to all customers," "Immediate adoption of new technologies to provide expert advice for creation of new software," etc. (USD Casa. Setting Organizational Goals); (Rowitz, 2009, p. 102)

Organizational goals give rise to objectives which are more precise, clear-cut, unambiguous and detailed descriptions of the activities that must be undertaken to achieve the goals. These tasks are measurable entities. Objectives are usually deadline-oriented and are therefore, short-term. For instance, one of the current objectives at Foresight is to set up a small committee which will look into the sources of conflict which are obstructing the development of full human potential at Foresight and come up with an action plan to channel the creative talents of these employees so that employees' goals can be aligned with the organizational goals. (USD Casa. Setting Organizational Goals); (Rowitz, 2009, p. 102)

e. Organizational Culture at Foresight

It has been well established that organizational activities are vastly affected by organizational culture. However, there is an ongoing debate as to how much priority should be given to this concept in the organizational domain. It has also given rise to different ambiguous statements about what it exactly is. Some experts like Smircich in 1983 view culture as a product of the organization whereas others take the opposite end and view the organizational behaviour as a product of its culture. Some others like Peters and Waterman in 1982 feel that organizational culture is basically "rules of the game for getting along in the organization. One important thing that features in this aspect is the not just the issue of different organizational cultures within the same community but also cross-cultural issues involving different communities as well. (Section 2: Organizations & Culture, pp: 65-66)

Foresight Technologies like many other organizations in the U.S. has embraced employees from many communities including Europeans and Asians as well as handicapped people. Gender equality has also been one of the strong points at Foresight. However, adding to this complexity is the very formal and bureaucratic cultural legacy that the employees from the former Sight Technologies inherited. On the other hand, there is the too informal culture that the other employees were used to. Both the conditions needed a "reconciliation of cultural differences" as proposed by Fons Trompenaars and Peter Wooliams. (Trompenaars; Woolliams, 2003, p. 16)

This approach has recently influenced the approach towards organizational culture at Foresight. The "three R's" advocated by Trompenaars and Wooliams -- Recognize, Respect and Reconcile -- has also been recognized by the management as a better alternative to managing cultural differences and using it to the company's advantage. Therefore, instead of combating cultural differences, the management is planning to arrange a series of activities involving employees to help them recognize the fact that cultural differences do exist and one must learn to respect them and instead of changing the entire culture reconciliation may be the best way to deal with them. (Trompenaars; Woolliams, 2003, p. 16)

f. Organizational Contingencies

The organizational structure at Foresight Technologies adheres more to the "Organic structure" with slight variations as defined by Burns and Stalker in 1961 than a mechanistic structure. However, organizational structure is not homogeneous at Foresight and is dependent on the kind of activities being performed in the subsections. In this context, Foresight has applied the principles of "differentiation" and "integration" as described by the contingency theorists, Lawrence and Lorsch. (Organisation Behaviour: Structuring the Organization, p. 28)

Differentiation is the breaking up of an organization's process into a number of components. Each of these components focus on a specific section of the environment and each of these components tends to have their own structures, beliefs and values. For instance, the "software engineering" section is different from the R&D or marketing department not just in structure but also in attitude and values. The R&D section may spend weeks on a project which may seem to be of no market value to the marketing department until a demand arises in the market. On the other hand 'integration' is the process of accomplishing a collective effort amongst the various components of the organization. (Organisation Behaviour: Structuring the Organization, p. 28)

This usually involves direct control from the upper layers of management. For instance, the program manager usually controls projects which require collaborative efforts and thus works across departments and directly reports to the CEO. These two factors depend to a large extent on the environment in which the organization operates. The IT industry is unpredictable to a large extent and changes in technology and technological needs take place at a rapid rate. In such an environment, differentiation is bound to increase. Highly differentiated companies respond better to their relevant sub-environments than highly integrated companies. Therefore, what is required is an optimum balance between differentiation and integration to respond suitably to environmental uncertainties. (Organisation Behaviour: Structuring the Organization, p. 28)

The merger between Sight and ForeScan was by itself a reaction to the environmental factors allowing the merged company to adapt to the environment as well as get access to resources which were not possible for the small individual companies grappling with losses and market uncertainty. This was in keeping with the methods used by companies to get access to resources as proposed by Pfeffer and Salancik in 1978. (Organisation Behaviour: Structuring the Organization, p. 29) Even Burns and Stalker in 1967 had suggested that organizational structure following contingency theory approach has more potential for success in volatile environments. (Section 8: Organizations and the Management of Change, p. 295)

Some of the key contingency factors that affect many organizations including Foresight include organizational strategy, technology, size and age of the organization. (De Laurentis, 2004, p. 31)