Designing Organisations to Survive in the Global Economy: An Insider's Account

By O'Carroll, Robbie | Irish Journal of Management, July 1, 2004 | Go to article overview

Designing Organisations to Survive in the Global Economy: An Insider's Account


O'Carroll, Robbie, Irish Journal of Management


INTRODUCTION

There seems to be a general recognition that continuous increasing productivity is an absolute necessity if an organisation is going to survive in the global economy.Towards that end, many companies have initiated large-scale downsizing of their workers.The jobs are either being shipped overseas or just eliminated. The objective is to do more with less, so they try to squeeze more work out of their remaining workers by compelling them to work additional hours.

However, these policies will not be able to continue to make significant improvements in productivity. The workers are reaching their physical limits. There are thousands of studies over the last 60 years that show that the quality of the output of a worker significantly degrades after 40 hours per week. As early as 1926 Henry Ford (1926) recognised this when he said that we can get at least as great production in 5 days as we can in 6. Studies as recently as the late 19905 show that working over 50 hours per week reduces productivity by 10-17 Per cent and that working 60 to 70 hours per week reduces productivity by 15-44 per cent.

What is required to sustain significant continuous increases in productivity is an organisation designed to replace the traditional organisation with its steep hierarchies, rigidly divided functions and bloated bureaucracies. This new organisation must be lean, flexible and designed to support, motivate and enable its employees to contribute maximum energy and ability to the success of the organisation. The problem has always been how you change these organisations.

This paper describes how the author, when employed as a section manager, helped to lead his division to the kind of lean, empowering organisation required to survive in the global economy. He used short-cycle manufacturing combined with Japanese product and quality improvement strategies wonderfully described by Masaaki Imai (1986) to create sociotechnical systems autonomous teams outlined by Trist (1986), Pasmore (1988) and Cummings (1978)

These autonomous, self-regulating work groups - called self-managed, selfdirected or high-performance work teams - are cross-trained, empowered workers who progressively accept, as a team, the total responsibilities and duties necessary for completing a well-defined segment of work. These teams differ from traditional work teams in that they progressively assume increasing control of their operation. Management sets the goals and boundaries for these teams. The team then develops the methods, measurements and strategies to achieve these goals. As the team meets these goals, they take on more of the responsibility for the management of their activities. As these teams take on more of the management activities it allows the organisation to reduce organisational structure. The result of this process is a lean, empowering organisation that realises a level of organisational effectiveness that previously did not seem possible.

The development of these teams, like the development of a manager, requires a process where training is strategically combined with increasingly more responsible tasks and the guidance of a manager who will champion the developmental process (for greater detail see Carroll, 1998; 2001).

This paper starts by describing how the section manager slowly developed his first self-managed teams and the changes he championed in the organisation to support those teams, including his participation in a major organisational change. These changes resulted in the elimination of three layers of management and a significant improvement in organisational effectiveness.

Finally, the paper describes a model the author developed for a high-performance knowledge team, a product design team. The section manager had always wanted to combine his seven years' experience in developing high-performance production teams with his many years working on product design teams (Carroll, 1999). …

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