Working in Organisations

Andrew Kakabadse, John Bank

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9780429765650
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 2004, this volume recognises that, as society changes, so must its organisations; as organisations change, so must their management competencies. The requirement for organisations to be flexible, innovative and adaptable in environments of increasing complexity and uncertainty is also a requirement of any organisation's most essential resource: its people. They not only work for the organisation – they are the organisation.

The second edition of this highly successful book provides a comprehensive and thought-provoking examination of the operational and strategic skills, demands and responsibilities of the modern workforce, and in particular its management. Reflected here are the manager's new and changing priorities. Attention is given to the manager's role, the motivation to work and succeed, and teamworking. Also emphasised is the new psychological contract, highlighting reliance on self whilst maintaining sensitivity to diversity concerns.

Providing clear and decisive leadership requires the projection of a vision that captures the imagination of others, but inevitably managers face conflict and adversity. Working in Organisations therefore discusses how power and politics can be moulded to positive advantage. The challenges facing organisations go beyond cost and profitability, as political and environmental challenges have forcefully entered into managerial responsibility. The book asks 'What is the ultimate purpose and contribution of organisations?' and highlights profound governance and ethics concerns. The design of organisations is also explored, and how creating appropriate structures will in turn focus resources to achieve desired ends.

This book provides a broad coverage of key issues, ranging from a close examination of the manager's job to a discussion of the corporate and social forces that determine our lives. Written in an easy-to-read style and bursting with case examples, Working in Organisations acts as mentor and guide to those whose quest is for ever greater sustainable accomplishment.

Written by a distinguished team of authors, this book will continue to be welcomed as the definitive text on organisational culture and change for academics, researchers and managers around the world.

Part 1 People, Jobs and Relationships

Chapter 1 Challenges

Critical challenges facing managers

Managers must understand how to lead and why people at work behave the way they do in order to accomplish the goals of their organisation. Understanding organisational behaviour becomes a prerequisite of good management. But there is nothing static about this process because the science of management is forever evolving and the context in which managers work is in continual flux. People change too; they change their aspirations and expectations, their hopes and dreams, their lifestyles. All of these changes – environmental changes and personal changes – converge to produce particular challenges for managers today.

Five of the most critical challenges in the role of management at the start of the twenty-first century are:

• establishing business ethics,
• managing globalisation,
• dealing with downsizing,
• valuing employee diversity and
• exploiting new technology.

Although we can analyse each of these aspects of management separately they are joined, interlinked like Olympic circles. They share common causes and are affected by the convergence of economic, political, scientific, social and competitive factors.

Business Ethics

Good management of organisations goes on all the time quietly unnoticed. It is usually the cases of bad management that grab the banner headlines and causes grief for tens of thousands, perhaps millions, of people. When Estelle Morris dramatically resigned from the Government as Education Secretary in October 2002 she cited among the reasons for her resignation her inability to handle both the 'modern media' and the 'strategic management of her department'. She took responsibility for the A level debacle that left thousands of English students confused about their grades and some with lower marks than they expected, thereby disqualifying some of them from the universities of their choice. She also accepted blame for the failure of her department to achieve its targets on literacy and numeracy tests.

On the global scene, TV images of Enron's top managers, the directors of Anderson's and WorldCom's chief executive officer, Bernard Ebbers, being led off by the authorities to face charges of serious mismanagement offered visual evidence of the urgent need for greater corporate responsibility and business ethics in America. An initial report ordered by the bankruptcy-court judge to 'examine wrongdoing, mismanagement and incompetence' at WorldCom found that a further restatement beyond the US$7.2 billion in fraudulent accounting may be required.

The consequences of bad management leading to the failure of these three colossal, global companies – one in energy, the second in accountancy and the third in telecommunications – have affected the lives of millions of employees and investors. They have also contributed to creating a crisis of confidence that has shaken financial markets around the world. In one swoop, the three discrete events demonstrate the need for principled management and codes of conduct and the interconnectivity of today's world. These and other examples of unethical behaviours in major organisations have shaken people's trust in aspects of the entire economic system. Trust is a belief that people – in this case, managers – will deliver on our positive expectations of them. When this trust is shattered, it is extremely difficult to have it restored.

Who is responsible for the ethical management of organisations? It is the primary responsibility of directors and senior managers who set the policies, establish values and develop the strategies to deliver goods and services to their customers. But everyone in the organisation shares collective responsibility for his or her part of the business and this often leads individual employees to play the role of whistle blower when they are otherwise powerless to stop unethical or incompetent practices within their own organisations. It was a unique event to have the Time Magazine 'Person of the Year' 2002 shared by three women whistle blowers, Cynthia Cooper (WorldCom), Coleen Rowley (FBI) and Sharon Watkins (Enron), who risked their careers to call attention to unacceptable practices in their organisations.

It is the scale of poor practices and unethical behaviour and the magnitude of the consequences of such unprincipled actions that have accelerated the importance of business ethics. The end does not justify the means and ethical leaders all over the world must sort out the Machiavellians in their organisations who think it does. As Tonge, Greer and Lawton (2003) have documented in their account of the Enron saga, it is easy for organisations to be hypocritical,

It is generally considered that the key determinant of ethical culture of an organisation is the example set by senior management. Enron is no exception. In principle Enron claimed to subscribe to a morally worthy set of values insofar as respect, integrity, communication and excellence are at the core of its mission statement. Respect is defined as 'We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don't belong here.' /4s our account. . . demonstrates, these latter qualities belonged precisely there, along with bullying, manipulation and lying!

Tonge, A., Greer, L. and Lawton, A. (2003), The Enron Story, you can fool some of the people some of the time', Business ethics: a European review, 12(1), January, p 10

Other examples of unethical behaviour from the Enron case include: a greed for profits, negligence at board level, an intricate corporate web of financial dealing, conflicts of interest, insider trading and other betrayals of shareholders' trust, false accounting, and the destruction of documents. It was a high-octane mix of these unethical behaviours that led to the downfall of both America's seventh largest corporations and one of the world's leading accountancy firms.

Survey data from the US indicates that the problem of poor adherence to business ethics may lie in part in the absence of personal ethics. In a survey by the organisation, 'Who's who among American high school students', a sample of these bright students were asked, 'Do you cheat to pass important exams? Do you fraudulently turn in papers? Do you plagiarise?' An alarming 80 per cent of the students said, 'Yes, isn't that what you have to do?' (Kidder, R. (1999), 'Global ethics and individual responsibility', RSA Journal, (1 April), pp 40-41).

Postgraduate students did not do much better. Donald McCabe (Kidder, 1999) at Rutgers University surveyed graduates who were going on to do postgraduate studies. He asked them, 'Did you cheat as an undergraduate so you could get into the graduate programme of your choice?' and found that 57 per cent of the students going to colleges of education answered, 'Yes, I cheated to get here.' The numbers rise: in law schools, 63 per cent; in medical schools, 68 per cent; in schools of engineering, 71 per cent; and with MBA students in business schools, 76 per cent.

Reality Check
Chernobyl’s near Meltdown was Caused by a Moral Meltdown

Did you know that:

• Chernobyl is the largest industrial accident in the world.
• 32 people were killed.
• The health of 3500-150 000 people was/is affected.
• It ruined large areas of fertile land in the Ukraine.
• The damaged reactor core has to be encased in concrete for thousands of years.
• Cracks in the encasing concrete have already appeared because of the freezes and thaws of the lake on which the reactor core sits.

The accident at Chernobyl was caused by two engineers working late into the night 'fiddling with reactor number four'. Their actions were officially referred to as 'conducting an unauthorised experiment'. They wanted to find out how long the turbine would freewheel if they took the power off it. To run the experiment the two engineers had to manually override six separate computerised alarm systems. Each system issued a warning to stop what they were doing because it was dangerous. But the engineers ignored each of the warnings to continue their experiment. They had to padlock valves in the open position to keep them from automatically shutting down in a failsafe mechanism. Their actions were 'deliberate and unconscionable'. 'Before there was a meltdown at the core of reactor number four there had already been a moral meltdown.'

Source: Kidder, R. (1999), 'Global ethics and individual responsibility', RSA Journal, (1 April), pp 39-40.

Whilst business ethics can be studied on their own as a special subject, it is perhaps better to highlight the ethical dimensions of various areas of business activity from accountancy to fair trading practices, from mergers and acquisitions to sourcing raw materials from developing countries. Business ethics examines the consequences of business decisions. As demonstrated in the Robert Maxwell case, decisions made by a rogue chief executive officer not only destroyed the company and cheated all of its stakeholders but robbed the Mirror Group's pension fund of over £400 million and thereby jeopardised the retirement of thousands of loyal employees. Societal ethics are about decisions that are both legal and morally acceptable to the wider community. Fundamental principles and values about the worth of life and respect for people are the bedrock of ethics. Since business is a type of society, it too needs commonly held norms, values and meanings. Businesses have an obligation to contribute to the communities they serve, rather than plunder them.

But when management is done extraordinarily well, it too attracts media attention and applause. The former mayor of New York City, Rudolph W. Giuliani, won global recognition, including an honorary knighthood from the Queen, for his leadership in handling the September 11th terrorists' attacks on the World Trade Center. His masterful demonstration of crisis management has given managers everywhere a positive case study of how to lead a team in extreme emergency situations. His was a visible leadership as he was leading from the front in the street with his staff and the rescue teams.

'Then the second plane hit', Giuliani recalled. 'All I saw was a big flash of fire. By that point we were at Canal Street, which marks the beginning of Manhattan's southern tip. Initially I thought it was the first tower experiencing a secondary explosion, but Patti got a call from Police Command saying the south tower, Tower 2, had also been struck, by what turned out to be the United Airlines Flight 175, a 767 en route from Boston to LA. This convinced us it was terrorism. We redoubled calls to the White House switchboard but cellphone service was now becoming difficult. We continued rushing south toward the scene. Driving by, I could see the stunned expression on every face as people stared up at the nightmare unfolding before their eyes.'

Giuliani, R.W. with Kurson, K. (2002), Leadership, London: Little, Brown, p 5.

At the time of the attack, Giuliani had been pulling together his ideas for a book on leadership based on his experiences of managing New York City. He is now an international consultant to other cities and companies that want to measure, benchmark and improve their performance.

Barbara Cassani, who is now chairperson for London's 2012 bid for the Olympic and Paralympic Games, had a bad experience with unethical behaviour on the part of her employer, British Airways, when she was a marketing manager for the airline stationed in the USA. Virgin Atlantic exposed its rival's unethical behaviour in a lawsuit that won extensive damages and embarrassed British Airways. A member of British Airways' sales team invented the scam in which they used Virgin's confidential computerised bookings, hacked from the computerised reservation system, run by British Airways, which other airlines fed into. British Airways used the data to try to poach passengers away from its rival airlines. As a middle-level marketing manager Barbara Cassani became enmeshed in the dirty tricks affair in a minor way. 'The statistics were being gained completely illegally, yes, completely,' she said, 'but I had no idea at the time they were being collected. If I had known they were being collected illegally 1 would have stopped the activity immediately. You do the best you can and when you find out that something is being done improperly you just stop it.' (Vinnicombe, S. and Bank, J. (2003), Women with attitude: lessons for career management, London: Routledge, pp 23-24).

Globalisation

For good or ill, the actions of many managers have a global dimension that reflects the interconnectivity of today's world. 'Think globally, act locally!' has been the dictum for over three decades. Begun in the 1970s, globalisation is the 'phenomenon of the transition of industries whose competitive structure changes progressively from multinational to global. Industries such as telecommunications, processed food, personal care and retail are In the process of globalisation.' (Lasserre, P. (2003), Global strategic management, Basingstoke: Palgrave Macmillan). Examples of global companies include: Coca-Cola, Pepsi, McDonalds, Sony, Citibank, Asea Brown Bovery, Ford, Nissan, General Electric, Microsoft, Dell, BT and Benetton; any company that sells into the main markets of the world in an integrated and co-ordinated way. This is achieved through an organisational s...

Table of contents

• Cover
• Half Title
• Dedication
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Authors' preface to the Second Edition
• Acknowledgements
• Part 1: People, Jobs and Relationships
• Part 2: Working the Organisation
• Bibliography
• Index