As we have seen, the retail financial services sector in the 1990s is facing a period of intense competition, characterised by rapid changes in markets, technologies, and customer attitudes. There has been considerable discussion amongst managers, consultants and academics as to the most effective kind of organisational structures for companies competing in such an unstable environment. It is argued that the traditional, hierarchical organisational forms, so characteristic of the sector, have significant limitations and will not ensure survival over the next decade. They are criticised for being too slow to respond to a fast-changing business environment, for poor lateral communications, and for their functionally-based emphasis with large numbers of relatively unskilled staff working on fairly simple routine tasks.
In current market conditions, organisations need structures which facilitate the creation, communication, and flow of new ideas, allowing greater emphasis to be given to innovation, flexibility, and quick response to change. Different kinds of human resource strategies are needed to help those who work in them and those who manage them to adapt to new roles. In ‘a learning organisation: an organisation which learns and which wants its people to learn’ (Handy, 1989), the adaptation is seen as a two-way learning process in which managers and staff learn from one another and make mutual adjustments.
This chapter is in two sections. Section 1 outlines the key features of the flexible organisation, and the learning organisation—two popular themes of the early 1990s. Section 2 considers the development of new organisational structures, roles, and the human resource strategies required to manage change.
All organisations, including the traditional hierarchy, are built on networks of relationships, some formal with long-term, regularised exchanges between