In the last blog, we began our discussion on the various phases in an organizational development and discussed the phase of creativity in particular. In today's blog we look at the next phase of organization development - Direction and its accompanying evolution characteristics and the revolution that could happen.
Phase 2: Direction
At the end of Phase 1, the companies would have installed an able manager at the helm of affairs. What follows would be a period of sustained growth under able and directive leadership. The duration may vary but the characteristics are:
- A functional organization structure is introduced to separate manufacturing from marketing activities and job assignments get more specialized
- Accounting systems for inventory and purchasing are introduced
- Incentives, budgets and work standards are adopted
- Communication becomes more formal and impersonal as hierarchy of titles and positions builds
- The new manager and his key supervisors take most of the responsibility for instituting directions, while lower level supervisors are treated more as functional specialists than as autonomous decision making managers.
These changes channel employee energy more efficiently into growth, they eventually become inappropriate for controlling a larger more diverse and complex organization. The lower-level employees find themselves restricted by a cumbersome and centralized hierarchy. They have come to possess more direct knowledge about market and machinery than do the leaders at the top. Consequently they feel torn between following procedures and taking initiatives on their own.
At this stage, the 2nd revolution is due - It comes from the demand for autonomy from the lower-level managers. Most companies move towards greater delegation to handle such a scenario. The challenge lies in the top management who by this time is accustomed to being directive to give up responsibility. The lower-level managers are not yet accustomed to taking independent decisions.
If Companies at this point choose to stick to old control mechanisms, they are bound to lose the race with most of the lower-level employees leaving the organization.