MANAGING AND ORGANIZATIONS IN CHANGING CONTEXTS

MANAGING AND ORGANIZATIONS
IN CHANGING CONTEXTS
OPENING, THINKING, CONTEXTUALIZING
LEARNING OBJECTIVES
This chapter is designed to enable you to:

• Appreciate the current contexts in which managingand organization occur
• Identify the impact that changes in the contemporary world are having on managing
• Provide a rough guide to the themes of the book

INTRODUCTION
We all learn to make sense of the situations we are in. However, just like a fast-flowing river, these situations are often changing in imperceptible ways. Before too long we find that the ways we have been using to make sense leave us out of our depth! Managers find that what they took for granted no longer helps them survive as well as it did in the past. Well-established techniques of the past, such as management by rules and instructions, by oversight and surveillance, by command and control, on the part of hierarchical managers, are changing. When everyone can be connected to anyone everywhere, when the value basis of employees is shifting radically, and when the organization laces itself over the globe and employs many of the diverse peoples that the globe has to offer, the old certainties are harder to hold. Today, more indirect techniques, such as managing in and through vision, mission, culture, and values, leading to a lot less imperative instruction and command and a great deal more dialogue and discussion, are fashionable: the switch is from ‘hard power’ in the form of imperative commands to ‘soft power’ in the form of getting people to do what we want them to do through indirect methods, such as induction into an organizational culture, training and strategy workshops, or leadership courses.
We often refer to different paradigms when discussing systematic approaches to some practice. The term derives from its use in the history of science, where different paradigms or models for analysis have been identified at different periods (Kuhn, 1962). The term can have broader application, however, having spread to fields such as management (Clarke and Clegg, 1998). Academic paradigms are ways of theorizing about an activity such as physics; in business the idea of there being different paradigms applies to the spheres of business practice, such as management. For something to be a paradigm it must be accepted as an ideal example and exemplar, something that shows people how to practice something. Hence, there is an element of fashion to management paradigms – they frame what is thought of as legitimate ways to conduct business at any given time.
p.8
CHANGING PARADIGMS
ORGANIZATIONS AND TECHNOLOGICAL CHANGES
The shift to a world in which digital capabilities enable elements of organizational practices to be moved offshore has led to the spectacular rise of Bangalore in India, as well as other places, as an IT and call centre ‘district’. Often when you phone the help desk of an organization that you are dealing with you will be speaking to someone from a region of the global economy in which English-language skilled graduates are available to work at rates much lower than in the country in which the organization is headquartered. Since it is much cheaper to live somewhere with a much lower standard of living, employers are able to pay far less. They outsource work to third-party organizations in cheaper labour zones.
Outsourcing involves contracting the provision of certain services to a third-party specialist service provider rather than seeking to deliver the service from within one’s own organization. Usually, outsourcing is entered into to save costs and to deliver efficiencies and productivity benefits. By not concentrating on services and tasks that are peripheral to the main business, an organization can better focus on those things it needs to do well while leaving the peripheral tasks to organizations that specialize in the delivery of those services. Often, areas such as HRM, catering, IT, and equipment and facilities maintenance are outsourced. Outsourcing may not necessarily entail moving some subset of operations to another country. Instead, it may be that some elements of what an organization regards as non-core business are hived off to a specialist contractor that concentrates on doing the outsourced activity efficiently, at the lowest costs, and to a contracted standard. Outsourcing is not a new phenomenon: in major production industries such as automotives, the outsourcing of initially non-core and latterly core functions and services has been progressively used since the 1930s (Macaulay, 1966).
The development of outsourcing, burrowing away at the innards of organizations, hollowing them out, and networking them into other organizations’ capabilities and competencies, has accelerated in organizations since the late twentieth century. The imperative to outsource – as distinct from the opportunity to do so – was a result of globalization and increased competition, leading to a continual need to improve efficiency and to increase service levels. Thus, vertically integrated services were no longer seen as the best organizational arrangements for gaining competitive advantage. Extending the organization’s capabilities, whether core or non-core, to a third party, became synonymous with efficient and effective management. Outsourcing became fashionable.
Many new industries have developed on the back of the digital revolution, often referred to as knowledge-intensive industries, those which we find at the forefront of contemporary global competition, such as Google, IBM, Microsoft, and Dell. In these organizations we find new organizational forms that challenge the older, more bureaucratic structures of the past, structures that we will explore in Chapter 15.
Digital capabilities have transformed the world – some journalists such as Friedman (2005), of the New York Times, suggest that digital capabilities have made the world ‘flat’ – by which he means that advances in technology and communications now link people all over the globe. In part this explains the rapid development of India and China, and the growth of global businesses that exploit the opportunities of the Internet to create and design goods and services on a 24/7 cycle – globally – taking advantage of different time zones to work on accounts, data, and designs seamlessly. The world has sped up to a state of immediacy: any reader of this book would know how to find its authors’ email addresses in a matter of seconds.
p.9
MANAGING TECHNOLOGICAL CHANGES
Shorter life cycles, virtual connectivity, and disaggregation spell many changes in ways of managing. The dominant trend is an increasing separation of routine processes from more essential work, which is often reflected in a spatial division of labour. Thus, for instance, as we will see in Chapter 16, in call centres the work is as routine and scripted as in any work process designed in an early twentieth-century bureaucracy by one of F. W. Taylor’s scientific managers (see Chapters 14 and 15). The means for storing the rules may have shifted from paper to software and the nature of the work may be less physical, but there are still essential similarities.
There are consequences for other jobs when much of the routine is extracted and repositioned elsewhere. The remaining core staff – rather than those that are peripheral – will need to be more skilled than before. They will be working in technological environments subject to rapid and radical change. New competencies and skills will be required. Managing will mean more developmental work oriented to renewing staff’s specific skills and general competencies rather than seeing that they follow the rules, issuing imperative commands, and generally exercising authority. Managing will mean negotiating the use and understanding of new technologies, contexts, and capabilities, and facilitating the understanding of those who will be operating with the new tools and environments. Changing technological paradigms mean that managers must be able to make sense of the new technology for all those who will use it. Sandberg and Targama (2007: 4) note, citing Orlikowski’s (1993) influential work on Japanese, European and US firms, that many technology implementation projects fail because of what the employees do – or do not – understand.
Traditionally, organizations were neither very responsive nor flexible because of their bureaucratic nature, as we will see in Chapter 14. They had tall hierarchical structures, relatively impermeable departmental silos, and many rules. Such organizations offered little incentive for innovation and, typically, innovation was frowned on because precedents went against the rules. Such organizations could hardly be responsive – they were not designed to be.
More responsive organizations should have employees who are capable of problem solving rather than having to refer any problem, deviation, or precedent to a higher authority. Such people need to be trained and engaged in styles of managing and being managed that reinforce empowerment, using far more positive than negative approaches to power, as we will see in Chapter 9.
New technologies attach a premium to a flexible, timely approach to customer requirements. In order that such flexibility can exist in an organization it has to be premised on ways of managing employees that allow them to be responsive to customer requirements in developing products and services. As we will see in Chapters 14 and 15, the critique of bureaucracy has been particularly acute in the areas of public sector management. Especially in the Anglo-Saxon countries, from the 1980s onwards, the extensive adoption of strategies of deregulation, privatization, and contracting out, often on the back of significant changes in technology, have led to profound changes in the nature of public sector work. Something known as new public management (Osborne and Gaebler, 1992) has had a profound impact on the public sector, in the public (or civil) service, education, universities, and health care, especially. The clarion call has been for more entrepreneurial managers and less rule following. Whether this is a good or bad thing has been the subject of lively debate, which we discuss in Chapter 15.
p.10
CHANGING RELATIONS OF SERVICE AND PRODUCTION
Look at your computer; check the clothes you are wearing; what about your shoes? Where do your things come from? Bet they were made in several countries and none of them may be where you live. Bet also that China was one of the countries. Today, ‘Made in China’ is a ubiquitous label – we find it on virtually any manufactured product that we are likely to wear or use in the office or home.
Supermarkets such as Walmart represent the end of a supply chain that invariably starts somewhere in China. The concentration of much global manufacturing in China is a relatively recent phenomenon, which really gathered pace in the 1990s. Just as much of service work has been disaggregated into lower value-adding elements such as call centres that can be located anywhere, much of what was once produced by a domestic blue-collar labour force in the heartlands of Europe or the USA, is now produced globally, often in China.
One consequence of the shifting international division of labour is that employment and organizations in the developed world are increasingly based on the production of services rather than goods. Material things – such as computers, clothes, and household goods – are being produced in the developing world while the most developed parts of the world economy switch to services, such as financial services. One consequence is that the nature of work and organizations is changing rapidly in both worlds. In the developing world peasants are rapidly becoming factory workers; in the developed world there has been an explosive growth in what is referred to as knowledge work, done by knowledge workers in knowledge-intensive firms. Chief among these are IT firms (Alvesson, 1995; Starbuck, 1992), global consultancy, law, and accounting firms, as well as the universities, technical colleges, and schools that produce the new knowledge workers.
SHIFTING LOCATIONS; SHIFTING MANAGING
An increase in knowledge-intensive work means that organizations have to employ – and manage – different kinds of employees. Brains not brawn, mental rather than manual labour, are the order of the day. Employees need to be capable of working with sophisticated databases, software, and knowledge management systems. These have to be related to customer requirements often on a unique and tailored basis that deploys a common platform while customizing it for specific requirements. Thus, technical and relational skills will be at a premium.
Knowledge-intensive work, according to Alvesson’s (2004) research, depends on much subtle tacit knowledge as well as explicit mastery. In such a situation, working according to instruction and command will not be an effective way of managing or being managed, especially where the employee is involved in design and other forms of creative work on a team basis, often organized in projects. In such situations, increasingly common in contemporary work, ‘because of the high degree of independence and discretion to use their own judgment, knowledge workers and other professionals often require a leadership based on informal peer interaction rather than hierarchical authority’ (Sandberg and Targama, 2007: 4). As we will explore in Chapters 5 and 6, some of the old theories and approaches to leadership and project work need updating.
p.11
GOING GLOBAL
Digital technologies and a growing international division of labour between economies specialized in services and production make the world economy increasingly globalized. Competition is based less on traditional comparative advantage as a result of what economists call ‘factor endowments’, such as being close to raw materials, and more on competitive advantages that arise from innovation and enterprise. IT means that enterprise and innovation can now be globally organized. No industry is more indicative of this than the financial services industry, where firms such as American Express, Citicorp, and HSBC span the globe. These multinational behemoths operate as integrated financial services providers almost everywhere. Global competition goes hand in hand with outsourcing in industries such as these, as such firms exploit technology to disaggregate ‘back-office’ routine functions and locate them in cheaper labour markets, as we discuss in Chapter 17.
The rise of India and especially China has seen a major restructuring of the global economy. As Martin Jacques said in 2010 in a TED Talk on ‘Understanding the rise of China’:
The world is changing with really remarkable speed … in 2025 … Goldman Sachs projections suggest that the Chinese economy will be almost the same size as the American economy … [By] … 2050, it’s projected that the Chinese economy will be twice the size of the American economy, and the Indian economy will be almost the same size as the American economy. And we should bear in mind here that these projections were drawn up before the Western financial crisis.
Jacques makes the point that for 200 years Europe and North America dominated the global world but that now, with the awakening into capitalist development of countries such as China and India, who between them have over one third of the global population, as well as other newly emerging states such as Indonesia and Brazil, civilizations and cultures that have for the past 200 years been marginal and minor players on the world stage are now at its centre. If the future managers reading this book want to have stimulating and successful careers in the future they are as likely to be forged in these countries as in Europe or North America. The managers that you will become will have to be truly global in experience and outlook.
MANAGING GLOBALLY
Doing business internationally in real time, enabled digitally, produces ample opportunity for cultural faux pas and misunderstanding. Work groups may be working in serial or in parallel with each other on projects that are networked globally. Global organization means managing diversity: it means developing appropriate ways of managing people who may be very different from each other – from different national, ethnic, religious, age cohort, educational achievement levels, social status, and gender backgrounds (Ashkenasy et al., 2002). One consequence of globalization and diversity is that HRM must be both increasingly international and equipped to deal with diversity, as we will see in Chapter 6.
Diversity is increasingly seen as an asset for organizations: people with diverse experiences can contribute more varied insights, knowledge, and experience than can a more homogeneous workforce. (In the terms that we use in Chapter 10 we can say that it is a good thing to introduce more polyphony into organizations but it can also introduce more conflict: see Chapter 8.) An evident reason is that if a business wishes to sell globally it must understand all the specificities of the local markets into which it seeks to trade. One good way of doing this is to ensure that the organization has employees that understand that market. Moreover, in certain markets, such as the Middle East, where etiquette and rituals are of considerable importance in everyday interactions, it is enormously beneficial to have employees who do not have to learn through making costly mistakes because they have an intuitive understanding. Moreover, as we will see in Chapter 14, organizations whose members are not representative of the populations the organizations draw on and serve risk being seen as discriminatory in their recruitment policies. There are ethical issues concerned in managing diversity as well.
p.12
CHANGING CONCEPTIONS OF TIME AND SPACE
Technological developments such as the Internet and other telecommunications seem to make the whole world something that can be present here and now – as users of Google Earth no doubt know. Email can fly around the world in seconds, as quite a few people can testify who have pressed the send button inadvertently on something they might have preferred not to share globally.
While time and space are two fundamental coordinates of the way we relate to the world, the ways in which we make this representation are not fundamental but socially constructed. The earliest concerns of modern global management were with the centrality of clock time in the time and motion studies of F. W. Taylor. Indeed, in these studies the central motif was that of time–space relations, as we will see in Chapter 14. Stopwatches measured in terms of microseconds to prescribe ways of doing tasks. Space was rigidly defined in order to maximize the speed of work. These notions of space and time as phenomena under strict organizational control are hardly relevant in the age of the Internet. With a computer, camera, and broadband connection any organization member can simulate immediacy with anyone anywhere in the world similarly equipped. In such a situation time and space are eclipsed. Organizations can be global, navigating anywhere.
MANAGING TIME AND SPACE
Immediacy through the eclipse of space presents problems. Work is much more accountable and transparent as others can be online anytime, anywhere, challenging the understandings that the other has developed. Often these understandings will be embedded in a sense made in a cultural, linguistic, religious, ethnic, and age and gendered context that is simply foreign to partners elsewhere. Great cultural sensitivity, as well as a capacity to handle circadian rhythms, is needed in the interest of global business. In such contexts there will be a great deal of doing by learning as managers seek to make sense of others whose cues are not only unfamiliar but often mediated by the limitations of Internet communication. Managing communication in these circumstances poses especial challenges, as we will see in Chapter 10.
CHANGING DEMOGRAPHICS, CHANGING VALUES
The era from the 1960s onwards has been dominated by the ‘boomer’ generation, who are now slowly moving out of the workforce, to be replaced with people drawn from Generation X and Y. Generation X, broadly defined, includes anyone born from 1961 to 1981. In the West, Generation X grew up with the Cold War as an ever-present backdrop. During their childhood they saw the dismantling of the post-war settlement and the advent of neo-liberal economics (such as Thatcherism) and the collapse of communism. They often grew up in single-parent households, without a single clear or guiding moral compass. They had to negotiate the hard years of global industrial restructuring when they were seeking their first jobs; they experienced the economic depression of the 1980s and early 1990s; and saw the decline of traditional permanent job contracts offering clear career structures. Instead of careers they were invited to accept insecure short-term contracts, unemployment, or junk jobs in McDonaldized organizations, or get educated. Many of them ended up overeducated and underemployed, with a deep sense of insecurity. Not expecting that organizations will show them much commitment, they offer little themselves.
p.13
Generation Y includes anyone born in the late 1980s and 1990s, sometimes to professional boomer couples who left childrearing later than previous generations or, as a result of boomer males mating with much younger women, maybe procreating with a new partner for the second or third time, celebrating the attraction of old money for young flesh. Young people born in this bracket are the first digital generation for whom the computer, Internet, mobile, iPods, DVDs, and the Xbox were a part of what they took for granted growing up. While Generation X was shaped by de-industrialization in the West and the fall of communism globally, Generation Y developed into maturity during the War on Terror, grew up reading Harry Potter, and has enjoyed relatively prosperous economic times, in part because of the success – for the West – of globalization. If you want to know more about the generations and the differences they are inscribed in you could talk to your parents or grandparents – if they haven’t already talked to you about these things!
MANAGING CHANGING VALUES
The employment of Generation X members offers real challenges for managers seeking to motivate and gain commitment from employees. As we will see in Chapter 3, the issues of commitment and motivation are increasingly central to managing. The X generation will be more cynical than its predecessors and less likely to accept rhetoric from management that is not backed up by actions. For Generations X and Y, according to Sennett (1998: 25), there is a predisposition towards high uncertainty and risk-taking as defining features of the challenges they want from work because they do not expect commitment. In part this is because they do not expect anything solid or permanent: they have seen casino capitalism at close quarters as brands they grew up with moved offshore or were taken over, or radically changed by new ownership, and so tend to distrust prospects of long-term or predictable futures.
Using traditional management control and command devices to manage people who desire to explore is not appropriate. Instead, the emphasis will have to be on creativity and innovation, as we explore in Chapter 12.
If there is one value that binds these disparate generations together it is the sense that the previous generations have really made a mess of the planet; green values are very strongly held, and saving the environment through sustainability is high on the list of value preferences. Consequently, as we discuss in Chapter 13, issues of corporate social responsibility, especially those addressed to sustainability, are high on the values agenda. Such changes pose major implications for how organizations attract, select, retain, and treat employees, as we see in Chapter 6 on HRM.
CHANGING CONCEPTIONS OF THEORY AND PRACTICE
One of the trends that readers of the book may not be so well aware of as the people who set it as a text is the changing nature of the relation between what academics do, funding arrangements from government, and conceptions of the usefulness of academic work. Academics do research. This is what defines them as academics. In the past, they worked in circles that were largely self-referencing: if successful, they published a book or two, some academic papers and, if they were really successful, others would read them and cite them in their research. Times are changing. Academic researchers in all fields are increasingly expected not just to produce outputs in the way of publications but also to have an impact.
p.14
Impact is usually defined in terms of having a positive effect on a specific sphere of practice beyond academia, including being able to demonstrate the contribution made to society and the economy (see Nutley et al., 2007). It is generally agreed that there are three main ways of making such an impact. Academic research can have an instrumental impact, influencing changes in policy, practices, and behaviour; it can have a conceptual impact, changing people’s knowledge, understanding, and attitudes towards social issues; or it can have an impact through capacity building where involvement in research develops the skills of those involved. The debates about impact are quite generic and are found in many OECD nations in recent years, as the costs of higher education and research funding have grown, so the clamour for demonstrations of relevance and impact have grown from politicians and the public. In the following article you can find an interesting account of how this debate has been addressed in the field of management, the field in which the work considered in this book seeks to make its impact.
EXTEND YOUR KNOWLEDGE
In Jean Marie Bartunek and Sara Lynn Rynes’ (2014) ‘Academics and practitioners are alike and unlike: the paradoxes of academic–practitioner relationships’, Journal of Management, 40 (5): 1181–1201, which is available at the companion website https://edge.sagepub.com/managingandorganizations4e, rather than seeing the academic–practitioner gap as essentially dichotomous they identify and suggest ways of working with the divide that foster research and theory building. Several different tensions are associated with the gap, including differing logics, time dimensions, communication styles, rigour and relevance, as well as interests and incentives. Initiatives of national governments, ranking systems, and special issues of journals have exacerbated these gaps, which they suggest ways of bridging.
USING MANAGING AND ORGANIZATIONS
The basic themes of this text are now established. In this book, as we have foreshadowed, we will introduce you to the main lines of management and organization theory, and we will situate these in the major changes marking the present-day world. These, we will argue, make the ideal of the wholly rationalistic organization evermore difficult to believe in principle and secure in practice. However, most of what you will learn as a management student makes assumptions about the rationality of organizations and management. Organizations go to great lengths to try and ensure that stocks of knowledge are shared as widely as possible within the organization, as we will see in subsequent chapters, and do so in ways that are reflected in each of the subsequent chapters:

1. Managing the most basic organizational and managerial capability – how to achieve common sensemaking (Chapter 2).
2. Creating induction programmes that socialize individuals into an organizational frame of reference (Chapter 3).

p.15

3. Training individuals in teamwork and groupwork (Chapter 4).
4. Hosting leadership development, coaching, and training for common understanding (Chapter 5).
5. Building highly rationalistic HRM plans and seeking to implement them (Chapter 6).
6. Emphasizing strong, common cultures (Chapter 7).
7. Designing lots of rules to frame everyday behaviour in the organization and manage conflicts (Chapter 7).
8. Managing organizational conflicts, so that the goal-oriented elements of organization can come to fruition, despite countervailing tendencies, schisms, and frictions in an organization (Chapter 8).
9. Managing power, politics, and decision-making so that plans are implemented, not resisted, and so sectional and specific interests are well aligned with rational plans (Chapter 9).
10. Communicating these rational plans, their culture, and other messages to organization members (Chapter 10).
11. Capturing all of what their members know and embedding it in management systems as they try and practise organizational learning (Chapter 11).
12. Managing change, introducing and effectively using new technologies, and ensuring innovation (Chapter 12).
13. Incorporating new mandates arising from social issues and concerns articulated by new stakeholders and influential social voices, such as sustainability, ethics, and corporate social responsibility (Chapter 13).
14. Implementing global management principles in the organization (Chapter 14).
15. Adjusting the structure of their organization to fit the contingencies it has to deal with, be they size, technology, or environment (Chapters 15).
16. Designing the organization in ways that seem best fit for purpose (Chapter 16).
17. Managing to manage globally, to manage globalization, and to deal with the added complexities that managing in a global world entails (Chapter 17).

SUMMARY
In this chapter we have staked out the territory that the book covers. We have dealt with nothing in depth – the rest of the book does that – but we have provided an indicative guide to the topics that we shall address subsequently. Managing and organizing is very dynamic – its world never stays still – so innovation, change, and tension are often characteristic of the way that events pan out.
EXERCISES

1. Having read this chapter you should be able to say in your own words what each of the following key terms means. Test yourself or ask a colleague to test you.

p.16
Paradigms
Outsourcing
‘Flat’ paradigm
Supply chains
Globalization
Digitalization
Organizations
Theory–practice gap
Generation X and Y
Values

2. Why do organizations become globalized?
3. What do you think are the major changes that are shaping the contemporary world and what do you think their impact is on management?

TEST YOURSELF
Review what you have learned by visiting:
https://edge.sagepub.com/managingandorganizations4e or your eBook
 
Test yourself with
multiple-choice questions
Revise key terms with the interactive flashcards
CASE STUDY
This is a very simple case study to get you started. Think about the last organization that you were a member of for some time. It might have been a school, a church, or an employing organization. What were its main routines? How were these organized in terms of some of the factors that might frame organizations? Think about factors such as how standardized, timetabled, or ritualized the flows of time and organizational effort were in the organization in question. What were the characteristic markers of identity of the different people and groups in the organization? What were the goals of the organization?
ADDITIONAL RESOURCES
If you want to know more about the major changes shaping the contemporary world of business you could take a look at Clarke and Clegg’s (1998) Changing Paradigms. It is dated now, but still has several interesting points to make about globalization, digitalization, and so on. This book is not too difficult for the introductor
 

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"