Administration Getting Things Done

1 Administrative Context (Formal)

Administrative Context: Structure and Systems

Vasant Sivaraman
Learning Objectives: 1. Definition of administrative context structure, systems, etc. 2. Why is it important? How is it important? 3. Alignment of organizational purpose with the design of the context leading to certain behavior that impacts performance. 4. Application to practice 5. Application in ADMAP program

Let us start by defining the background for this segment. We are aware that ADMAP at a very simple level is about learning administration - We are talking about getting things done, with the emphasis on learning by doing. This is what broadly ADMAP is seeking to achieve by a host of paths: committee work, and projects and so on and so forth. But the view is, you still require a few class based sessions for what is essentially a non class based program. You need a few sessions in order to look at some theory and some concepts which will hopefully make your task in the committees and projects and what you carry beyond from here into your first job, more effective. So, this is where these few classroom sessions fit within the larger scheme of the ADMAP program. The theoretical inputs module in ADMAP program comprises 4-5 classroom sessions. The theoretical constructs covered during these modules will find application during the doing part of the program . Our interest here is in the administrative context. Before we end this segment, what we would like to achieve is an idea of what does administrative context mean and how can we apply this in ADMAP, specifically in committee work and projects. And, at a larger level, how does it help you beyond an MBA. This is the aim for this segment. Theoretical constructs in ADMAP modules are: 1. 2. 3. 4. Administrative context Administrators role Administrative processes Administrative strategies

The ADMAP framework has four modules. Let us start off with the last one- the administrative strategy. What it really presupposes is that there is some task to be achieved for which you have certain choices as an administrator. This means that you have some tools, or some instruments which you can apply in order to get the task done. So, the administrative strategy is to enable the administrator to make a set of choices or strategy to get the task achieved. This module will come a little later. It will be dealt with using the Roosevelt case in your readings. The Roosevelt case is essentially trying to define how did Roosevelt as an administrator achieve a turnaround during the Great Depression to bring the economy back on rails.

This example shows that there are a couple of issues involved: the question of timing, external impact of the environment, who the administrator is and what are the personal choices he makes. In the subsequent module, some of these ideas will be explored at length e.g. the traits of the administrator and different kinds of administrative processes that can be followed in order to get the task achieved. So, in order to get the administrative strategy dealt with, you need these building blocks created in the ADMAP frame work. It seems to suggest that what worked at a particular time in the forties, worked in a certain set of circumstances for a particular administrator who is distinct and unique. More important, the administrator could depend upon some set of tool kit with which he wishes to achieve the goals. For the second and third modules, you have readings by Wrapp and Mintzberg - essentially on what managers do, their role, policy decisions and so on and so forth. In other words, you could make different kind of processes and choices to achieve your goals. The first module, the Administrative Context has two parts: the formal structure & the informal structure. The second one will follow in the next segment. What do you mean by administrative context or the tool kit that you may use for decoding an organization? Let us first discuss some key points as the basis of our discussion. We will keep coming back to this particular note, as detailed below. So, if you look at Administrative Key Points, it has got three parts. The first one is to get a definition of the term, Administrative Context because this is not a general term, there is a specific meaning attached to it. It is important that we clearly understand what is exactly intended. So, the first part is what we see as our purpose. The second part is essentially the readings (Christensen articles).There are two chapters on accomplishments of purpose. They deal with structure, systems and processes and how they impact behavior and therefore the performance. And of course, the third section is, how does this matter i.e. how does all this make sense.

Administrative Context- Key Points I. Definition of administrative context: The administrative context consists of elements such as structure and systems etc. that provide reference and direction to organization members in performing their tasks More on structure and systems (Christensen articles) 1. With growth of the organization (scope and scale of activities), a structure needs to be designed to meet the organizational purpose (Rose Co) 2. Activities have to be broken and assigned to people with required skills (or potential to build necessary skills); building specialization 3. Once tasks have been assigned to people/ units there arises the need for integration of the activities of the sub units; a need for coordination 4. Information flow must allow key, relevant inputs to be available at the coordination points 5. Systems and processes (e.g. performance management, compensation, controls etc.) help align efforts with desired outcomes (GE) 6. The ideal outcome (future plans) sets the bar against which performance is to be judged by use of composite result areas (including subjective analysis of say problem handling ability), all of which need to be in sync with long run firm goals. 7. Total benefits, both monetary and non monetary (guided by results, among other factors) and control measures can influence performance towards organizational goals. 8. Active recruitment along with coaching can align individual abilities and interests with the

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organizational priorities. III. Why does administrative context matter? 9. The context influences decision-making and human behavior in organizations 10. Understanding the context allows one to decipher the organizational environment: why people act the way they do? How do decisions get taken? Box -1 What is Context? The administrative context consists of elements in an organization such as structures, systems etc and that etc is because here we deal with structures and systems and there could be other elements also which could be dealt with separately. For example, if we get an understanding of some of these things in an organization, it could provide reference and direction to the members of the organization in performing their tasks. So, if you were to know something about the organization you belong to or an organization that you are dealing with, if you know a few things about the structure (and by structure the idea now is not to talk about different kinds of structure but given that there is a structure in the organization) like: what is the formal design? Is there a large degree of centralization? Is it flat or otherwise? You could ask some of these intuitive questions and derive certain inferences. What are Systems? In an organization, there are some formal guidelines about how tasks can be achieved. If you think of any system, it could be planning system for any business in terms of resources to be allotted (people resources and/or capital resources) it could be resource allocation systems, the MIS, the performance management systems, goal setting, compensation systems, award systems, control systems, all kinds of policies which are firmly defined in place or, there could be informal processes by which things get done. There is a separate segment on institutions and organizations there is a difference between organizations in general and institutions in particular, and it has all to do with certain values that are typically associated with institutions. So, when we talk of context, we are actually covering all these elements. If you understand nuances from the structure, from the system and the values that you see in the organization, then it could help you in getting things done. In box -1 above, section 3 helps you to decipher the organization environment. It helps you to answer the question, what kind of company is this? The company that you are a part of, or company that you are dealing with, as a customer, as a vendor, or whatever. What kind of company is this? Why do people act the way they do, why do they take decisions the way they do? What influences them? If we know the context, then how does it help us in answering such questions?

Select Initiatives : the kind of organization and influence on managerial behavior 1. 2. 3. Pizza Hut and ring the bell initiative. Open offices Executive dining room or common canteen

4. 5. 6. 7. 8. 9. 10. 11. 12. Box -2

Corner offices Flat Structure Anil Ambanis sms-based information system Birla system of daily telegrams Cancer store at the entrance of the factory Small numerous conference halls in the Japanese factories Bottom up Toyota system as suggestion scheme Rai Bahadur Mohan Singh Oberois daily information system JRDs selection (Kerkars Taj; Modis TISCO; Mulgaonkars Telco, Darbari Sheths Tata Chemicals and Tata Tea) vs Centralization of Ratan Tata.

Let us refer to the items detailed in box -2 above. If you look at some of the rather cryptic items that are listed here, some initiatives tell you what kind of organization it is. And, more important, does it help you answer the question how does this initiative influence behavior of managers in that organization? If you could look at point number 12, the last, many of these examples actually span a few decades - some go back to the eighties and nineties while some are more current. They have been chosen consciously and deliberately. Let us discuss these in greater detail. TATA example Point number 12 actually contrasts the way in which the House of Tatas was organized during JRDs time and currently under Ratan Tata. During JRDs time, there was a loose conglomeration run from Bombay House. This was in 80s and 90s. There were individual companies of the groups which were more synonymous with the chairman or the leaders of those organizations i.e. if you think about the Taj chain Indian hotels; it was associated with Ajit Kerkar. He built it and he made it what it was. People associated Taj not so much with Tatas or Bombay House but with Kerkar. He was a very tall leader and Taj was associated with him. Similarly, with Tata Steel, Jamshedpur itself was associated with Rusi Modi - a largerthan-life figure, who was running almost everything for a long period of time. While Tatas were the owners and on the board, their link was a little thin as far as TISCO was concerned. Similarly, Sumant Moolgaokar was with Tata Motors. So the idea is - these were strong personalities who, according to some critics, were satraps running their fiefdoms. That was very clear. So what kind of organization is Tata Steel? In the days of JRD, it was a Rusi Mody company. It was built and made successful by him. Remember, this was a choice. During JRDs time, it suited the environment and his own style of having loose coordination. But then, if you were a part of Tata Steel in those days, and if you wanted to know, if certain decisions were to be taken, how would they be taken? Does Bombay House call the shots, or is it Jamshedpur? Who is the big boss? What is our goal, and what should we try to achieve? It is very different from what we see today. Today, under Ratan Tata, in the last decade or two, it is a much stronger Bombay House. There is a deliberate choice regarding the retirement age. When many of these strong men stepped down by way of retirement, they were replaced by a new team. Now, there is a strong new team at Bombay House including Gopalkrishnan etc; these Central office people have a dominant role to play in the way the House of Tata grows. Today, the environment is different. Today, there is no domestic competition. Does it help today? Well, perhaps it does. This is a conscious choice, and it tells you a lot about the way in which the House of Tatas has chosen to organize itself. If you were to answer those two questions we raised at the beginning - what kind of an organization Tata is? If you were in Tata Steel today, then large investment, large overseas acquisition - is it likely to happen without a strong role of Bombay House? Very unlikely. Today, it is very different. So, what kind of

organization is it? And, what is the influence on behavior of managers at all levels? At entry levels and beyond - as in how are we going to run this organization? Basic 1. 2. 3. 4. 5. 6. Box -3 Decentralization Vs Centralization If you see the box -3 above titled Basic Choices, what is the first choice that you make? The first choice was at the level of the owner- do we need more centralization or do we need more decentralization? During JRDs time, it seems there was a substantial degree of autonomy of running the business these strong leaders built it and they ran it the way they felt it was right. Decentralization had its benefits and it worked well in those times. If we look at it today, there is a lot of centralization namely Tata Motors for their overseas investment, and Tata Steel for their overseas acquisition, and Tata Tea for their acquisitions, and Indian Hotels for their overseas acquisitions. Many of these things would not have been possible, without all these group companies working together, including TCS. So in the current environment, all these things are necessary and they are happening because of a strong Corporate Office. So, it was a question of choice, something relevant for the times. If you were to answer this question as a part of the Tata group today, you would have a different viewpoint in describing what is the kind of organization in terms of Bombay House control and Bombay House involvement for running the affiliate companies. If you had to take some decisions, would you do it on your own and if not, to what extent would you involve other people? If you were to take a call on some of these basic things, right from centralization or decentralization (you can look at basic things from outside) and to what extent is information sharing working in the JRD days versus Ratan Tata days, what might you think? Is information sharing any different from what it was before? How might it be today? Even in centralization, all the decisions are not taken by Bombay House. But yes, your sense is that there is a lot more sharing potentially happening today under Ratan Tata than before because there is a role for the corporate office which is a lot stronger than before. If you think of some of the items which are listed in Box -3 about choices, these are the parameters which among other things help in deciding whether you should let things continue the way they were being done earlier and what are the merits of the current dispensation in terms of transparency, involvement, commitment and so on? This is one small example of how you choose to have your organization or how it is structured under two different dispensations. So, if you would look at the Box 1 (administrative context: key points), points two to five are quite obvious. Essentially, when an organization grows from a Mom and Pop store to say a conglomerate, a large multi country, multi business kind of organization, it is clear that Choices Decentralization vs Centralization Information Sharing Agility / innovation Transparency Involvement Commitment

these are two extremes and one person cannot handle many things. So you need to split tasks and activities according to the expertise or the potential that you can build. Once you allocate tasks and activities, then it needs to be integrated and coordinated for it to run well, and you need information systems to achieve it. And going back to the example of the House of Tatas, you will find that points 2, 3, 4, 5 have their relevance for each of the two scenarios. Points 2 to 9 are really intended to say that if you have got a certain purpose in mind, for accomplishment of purpose, you need to think about being organized in a certain way as far as structure and systems are concerned. Similarly, points 6 to 9 are indicative of how systems and processes could be organized or aligned in order to achieve the purpose you have in mind. Let us look at another example to see what kind of organization it is this and what is its influence on managerial behavior? The GE example At GE, examples of some systems are - Performance Measurement Systems during Jack Welchs time. Because, GE is a so called bellwether company, many of the initiatives popularized by them were adopted in many other companies worldwide.

GE under Welch What do the following tell us about what kind of company GE is? Performance measurement system 1. Bonus to options 2. 300 to 30,000, leadership opportunities in 350 businesses 3. Vitality curve and Type 4 Managers Box -4 Now, GE under Jack Welch, if you look under systems, in performance measurement, there is this idea of stretch targets. The first two points in Box -4 above are quite interesting because when Jack Welch was designing the performance measurement system, he chose to switch from bonus to options. When you switch from bonus to options, what are the implications? Bonus is going to lead to cash, options is going to yield to shares. Options are not a cure all, or fix it, as it turns out in hindsight. But, at least on the face of it, you think that stock would help ownership. It changes the mindset of the individuals. Options are also going to be of value, if the stock performs well, if the owners are interested in the stock doing well. And, if the managers are also going to be rewarded on the basis of the stock doing well, then there will be some alignment. The managers are now going to think in terms of their ownership or stake in the company and their performance or achievements as contributing to the stock performing better. Our concern here is not to discuss whether this is an effective move or not but that on the surface, this is one possibility. Let us now look at other things such as the number of people eligible for options. About 300 senior managers worldwide were eligible to avail options. What this implies is that the eligibility net is now widened. 30,000 people are now eligible for options. If we address the same questions what kind of company is this again and if you are a part of the same organization, what signals does it send to you? Lot more people are likely to feel that if they can get stock, they will get greater sense of ownership which

in turn will result in employees working towards getting the options to perform i.e. getting the stock to do well. Leadership opportunities in 350 businesses! Basically asking why should you not be interested in being part of GE when there is so much possibility of growth! With 350 businesses, one could be a business manager for core businesses globally. This is a huge incentive. As an ambitious young manager, is there a better place than GE to be in? So devising a certain system is one part of the performance measurement system; the second part is, how it influences behavior of individuals, their thinking and understanding of GE as an organization of choice. This was the impact of Jack Welchs initiatives on GE as an organization.

GE: Vitality Curve There is something called the vitality curve, the 20-70-10 rule. Accordingly, all employees are to be rated, (force fitted) into a curve of top 20 who are high performers, middle 70 who are average performers, and the bottom 10. Bottom ten is bad news because it means at some stage, you may have to find some other job. So this force fitting of the vitality curve could give you an impression that this is a cruel kind of environment. That is an extreme way of looking at GE. How can this potentially influence managers behavior? Now people who perform well, need to be rewarded. Sachin Tendulkar needs to be dealt with differently than someone who is not necessarily performing that well. So this vitality curve again gives you a sense of the kind of organization GE is. But, this is one piece. There are many pieces which have to be seen together. This brings us to the concept of the Type 4 Manager.

The Type 4 Manager Performance metric- hi-lo Values fit metric- hi-lo What does this mean for the managers and their performance? Box -5

One matrix is, how do people perform when delivering against goals? The other is, how aligned are their individual values with what the organization stands for? The former is about their performance; the latter about their fit with the values of their organization. Now, what are the possibilities of high-low of an individual, when you are doing a performance assessment? If you are high on performance, and high on values, it is a pretty simple answer. Here is a good guy and he is probably going to be one of those 350 business leaders. If the guy is low on performance and low on values, again, the answer is very simple. He is part of that 10% in the vitality curve. What about the other two combinations? If one is high on values, and low on performance, what do we do? And if someone is low on values and high on performance, what do we do? As it turns out, if you are high on values, and low on performance, and this is true for many organizations, this seems to be a person organizations would wish to retain. May be, this is not the best kind of role he is in. So if he could be given some other opportunity and some other resources, high performance could follow.

How about this high performer whose values are low? This is the type 4 Manager. Type 4 Managers delivery is a star but he might be a misfit as far as values are concerned. This situation calls for serious thinking. But in the scheme of things for GE under Jack Welch, he states in a video, that the answer to him as always explicit and clear. High performer, low value does not have a role in this organization. He has got to go. This is interesting. This is what many organizatio ns have been talking about. If he is good on performance but does not fit in on values, then he does not necessarily have a role in the organization. Now, what does this do? If you have a spiteful manager in the organization, then, as individuals, how do you develop, and how do you view this kind of organization? Remember, vitality curve says perhaps, this is a difficult place to work in. Throwing out people is never easy but if you combine it with other elements, it turns out that here is an organization operating according to what it believes in- they may be good values, may not be good values- right or wrong- whatever it believes in. For that organization, values are important and performance is not necessarily as important. We notice an entrepreneurial kind of organization with opportunities for one particular type of personality. This can suit certain people who may find this organization an exciting place to grow. Some question that persistently bother young managers seeking employment is: particularly in the Indian context, when companies recruit do they look for people who fair high on performance with low scores on values or are values ranked higher than performance? Well, there is no one size fits all. Companies that stress on value compatibility as a pre requisite might not view the profile of potential future leaders the same way as some other firm might. When a large number of entry level executives are to be hired, performance might be the dominant consideration and in this scenario, values can be built over time or only persons with aligned values will grow. At senior levels, hiring is done in small numbers or situations where the hirer herself has values aligned with the organization, performance alone may not be the driving factor. In both cases, some threshold level of performance vs values would still be demanded. Another frequently asked question is about the vitality curve (or 80 20 rule) that implies that 80% of the work in an organization is being done by 20% of people. Why is equal opportunity not given to all the administrators and get more efficiency out of all of them. Also, if the top 20% are given importance and bottom 10% are given the boot, what happens to the rest of the 70%? Is it not more important to build an entire organization rather just 20% of the work force? Let us understand that the 80:20 principle is distinct from the vitality curve. What matters is how the scheme is implemented. The top 20% may be rewarded, the bottom 10% may get a new role or support to perform and not necessarily be instantly weeded out and the mid 70% could be backed such that they get a chance to be in the top 20% too. GE under Welch typified forced ranking which was dictated by the intention to differentiate high performers from the rest. The aim, as shared by Welch was to build on people as a source of competitive advantage and to develop individuals so that the 90% get opportunities to be in the top 10%. It was the confirmed base 10% that would feel the heat

All this means that there are different kinds of systems. These systems are what we call the administrative context and you can interpret systems in order to find out what kind of organization you are looking at and how people might respond to this kind of system.

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Let us now go back to some of the examples in Box -2 (Select Initiatives to show Kind of Organization) and interpret some other initiatives. East India Hotels: customer satisfaction Item number 11 is about the East India Hotels, the Oberoi group. Rai Bahadur is the older, the senior Oberoi. The current Oberoi is also fairly senior but he is Biki Oberoi. His father had built this chain of hotels to what it is now. Oberoi group own properties all over the country, each hotel under a General Manager. At the end of each day, senior Oberoi was required to report on two items: occupancy in the hotels and the client complaints. The GM himself is involved with taking care of affairs at the hotel and making sure the guests are comfortable. This suggests that senior Oberoi is really committed to customer satisfaction. He has many properties to manage and he is asking for only two things. If the top man is asking for these two things then the GM needs to make sure that customer complaints do not happen. There is an anecdote. A guest did put in some complaint but the staff acted upon it promptly even offering future deals to earn the satisfaction of that customer. These days, some of the airlines are following this policy. Coming back to our original question: what kind of organization is the Oberoi Hotels? The answer is simple. This organization is high on guest satisfaction. How will it impact the behavior of the staff under the General Manager? Everyone will work towards making sure that the guests are kept satisfied because that is what is measured and that is what the organization stands for and that is what employees end up doing.

Let us look at point number ten in our list (Box-2) - the Toyota System as a suggestion scheme. This is basically a suggestion scheme from bottom-up at a Toyota shop floor. If you look at item number nine, there is another initiative at the work force at the production floor- small meeting and conference rooms for the work force to use for whatever purpose. The idea behind this exercise is that based on this input, one can get an understanding on what kind of administrative context exists in an organization and how it can impact the behavior of the managers. The Cancer Store Going back to the list in BOX-2, number eight is rather a curious example - cancer store at the entrance of the factory. This means that all the rejects from the production process would be on display at the entrance for all to see as one comes in to work in the morning. Now, if you are a part of this workforce, then you pass by this place at least once. You see the label Cancer Store and you see the rejects of yesterday neatly piled there. What impact is it likely to have on the employees? What are the possible implications? What does this say about what kind of an organization this is? How does this influence behavior of managers and employees? The message is loud and clear: In future, try and reduce rejections. The first assumption here is the premise that you have a sense of pride in your output. And, if you find that there was high level of rejects from previous days output and when you find that it is openly displayed at the entrance, you may wish to save your pride by ensuring that the reject rate goes down. Why at the entrance of the factory and not at the back of the factory? This is clearly visible to the employees but unfortunately, it is also visible to customers and visitors. So, that is a big gamble to take. But keeping it right up front and not

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hiding it, an important statement is being made. Why Cancer Store? Why not Reject-Store? Cancer is not a nice thing to label something with - it sounds undesirable. It catches your attention-If there is a cancer store at the entrance of the factory, what kind of organization is this? It is a transparent organization willing to share data and communicating that quality is a priority here - and it is a matter of pride. This is a simple yet powerful initiative for sending a message of being a strong and quality focused organization. One could argue if it is a good idea to display defected pieces at the factory entrance in the Cancer store, since it can prove to be a de motivator for the workers and customers could perceive it as a sign of defective manufacturing. Well it may be a possibility but it can be obviated by certain associated practices like progress chart on trend improvements, action taken reports, reward to workers for genuine turnaround, quantifiable assurances on quality to customers for shipments. Such measures may be called for in order to overcome the potential downsides.

Birla Group: a telegram a day saves the day Item seven is Birla group. The idea of telegrams is old. But this is about communication. Like the Oberoi group, Birlas were reputed for asking for specific information from all the managers at the end of the day. They wanted to know about utilization, about hiring and the cash profit. And, the interesting element about cash profits was, you did generate cash profits but against plan, how much did you produce? Are you ahead of plan or are you behind plan? If you are ahead of plan, then you report it as positive cash profits, and if you make profits but are still behind plan, then, it is negative. This is deliberate. It has got certain implications on how people respond to this kind of reporting and what is shared across the organization. So, this is a daily information requirement of few specific things. Anil Ambani Group: sms Item number six is about Anil Ambani group. Anil Ambani has many businesses as a result of which many senior managers report to him. They send an sms to him on every big project or initiative that they uncover or embark on. It is a requirement of the system. So, you can imagine Anil Ambani receiving lots of SMSes and needing five or six people to screen them. At the end of the day, he chooses which of these initiatives excites him and deserves his time and attention. This is Anil Ambanis way to exercise his choices in terms of commitment and involvement. Again, when you go back to the question, what does this mean, what kind of organization Anil Ambani s Group could be? Let us look at some of the other points in an organization with flat structure, what could be the basic choices? If there are corner offices in the organization as opposed to an open plan, then what do you think it means in terms of the same questions? This is an organization which encourages and develops a corner office kind of syndrome. The senior managers are people who are deemed important, who have their own offices that includes a window or two. Having a window is a premium. An office space in the middle of the hall is not so exciting. Therefore if there are windows in the office and plush carpets, what type of organization would it be? It means these people have some achievements and the organization wants to spell it out clearly - respect the hierarchy and their authority. Communication flow is likely to be more downwards and less egalitarian. Had it been more open-plan office, how would it be different? Now, I am told, Adi Godrej had an open-plan office. In an open office, a guy can just walk in and chat. In the other, there is some kind of a door or a barrier in the front. Is there any difference? If there is, how does it help

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you to answer the question about what kind of organization is this? You already have some suggestionshierarchical, information is flowing downwards in a corner office whereas in an open office, people are more accessible one can meet and discuss freely. Of course, there are many pros and cons in having an open office and that is not relevant for the discussion here. There are some other ways and practices that organizations develop in addition to just the corner office: whether the parking lots are reserved or is it available on first-come-first-serve basis; is the dining room meant only for executives or is it a common canteen for everybody? There are similar other structures that help one understand what kind of organization it is. Let us go back to Box -2 item number 1, the Pizza Hut example. Many of us go to Pizza Hut. There is a bell at the entrance. It says, if you had a good time, ring the bell . How does this work? On your way out as you pay, either you ring the bell or you do not ring the bell. Now, what is the big deal? Why have this kind of system? How does it help? When someone rings the bell, then all the staff let out a small joyous cry. There is some motivation here. There is a bit of a trouble also. If you go with children, they want to ring the bell for fun, regardless of whether you had a good time or not. It becomes a ritual for kids. So, there is a bit of filtering that you might have to do here. There is another eating place where at the strike of every hour, one o clock, two o clock, all the waiters would leave whatever they were doing and line up in columns across the store. Then the music starts and they all dance. Pizza Hut is also doing this. This happens in other chains too. The music becomes very peppy and the waiters break into a dance. In a couple of minutes, the music stops and they go back to their regular duties. This is in Hard Rock Caf. For the employees, it is a good way to let their hair down for a couple of minutes. To some employees, the idea of shaking a leg would not be appealing but then, they will say, What do we do? If this is the ritual in this organization, then we have got to do this. For some customers, this is a nice distraction, the kids may also like this but, most important is, what kind of organization is this? The message it communicates is that it is fun to be here. In terms of managerial behavior, if you can accept the fact that happy employees give better service, then maybe there is some link here. If you think about all these initiatives, which could be a part of some system, then, essentially it gives you a sense of some idea on what kind of organization they are, and what effect does it have on employees under this kind of requirement or system. Therefore, there exists a link between behavior and performance.

Organizational DNA vs Biological DNA We shall now consider an interesting generalization which has been attributed to Vijay Govindrajan - who is widely regarded as one of the famous management Gurus. He shows that these elements of the organization that we have been talking about so far go towards defining the DNA of the organization. He believes that the kind of people we bring on board, the kind of structure we create, the kind of systems that we put in place in the organization, and the kind of culture it generates - all these put together define the organizational DNA. This is the first premise that he makes.

Shaping the organizational DNA

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1. 2. 3. 4.

Staff: Hiring, promotion, leadership style Structure: authority, reporting, relationships between functions, process design, roles and responsibilities Systems: Planning approach, performance measures. Incentives, compensation Culture: Core values, assumptions about success

Box 6

Then he compares the biological DNA i.e. DNA of people like you and me with the organizational DNA. Organizational DNA has some similarities to biological DNA 1. 2. 3. Both shape behaviors, motivations and ability. Both are difficult to observe directly. Both are very powerful

Difference between biological DNA & Organizational DNA: BIOLOGICAL DNA 4. 5. BOX -7 Both of these things are similar in many respects yet different in some respects. Essential part is that it is the DNA that really determines what kind of a person one is OR what kind of organization. It determines the behavior and therefore it determines the performance. You are born with the biological DNA and you cannot change it much whereas for organizational DNA, it may take time but, there is a choice for a manager to modify and to build on. Both are long lasting and both have a very important impact as far as behavior and performance are concerned. So, he contrasts biological DNA with organizational DNA leading on to the point that structure influences behavior and behavior impacts performance. Why does administrative context matter? Referring once again to Box-2 Administrative Context Key points, we come to the third section- why does administrative context matter? Let us refer to point 11. This leads us to two points: 1. If one can figure out the formally defined structure and formally defined systems of an organization plus the way these things effectively work, one can decipher the organization and get a feel of what kind of organization it is. And also, this helps in answering the second question Why people act the way they do, how do decisions get taken and what influences the behavior of managers. Inherited at birth Cannot be changed ORGANIZATIONAL DNA 1.Chosen by managers early in a companys life 1. Can be changed, with substantial effort

2.

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It is a very simple kind of idea which we are trying to establish over here.

Recapitulation
The administrative context is defined in terms of structure and systems and what they indicate about an organization and a little bit more about the culture of the organization. Together these comprise the context. This can explain a lot that is going-on in organizations or at least understand what drives the senior managers in an organization to take decisions the way they do. One can understand ones boss and also in later years, when one has the choice to design some of these systems, it becomes even more interesting. When you are in a position to think about designing systems, then you recognize the consequences that it could result in. Hence given a certain purpose or goal that you want to achieve, work backwards and make sure that these contexts enable and encourage people to perform and to go about their work the way you would like them to. Now, if you just go back to points two through nine, you would notice they are split into few specific sections- two through five about recognizing when the organization grows large, one needs to break up the task according to specialization and when one break up the task, one also needs to get an effective mechanism for coordination and information sharing. Point two through five is on structure. Point six through nine is on systems and processes. There are few simple points to be made. 1. 2. Know the purpose. What is it that you want to achieve (purpose) for your organization? Put in place systems and processes which will help align efforts with desired outcomes i.e. individual efforts and teams efforts both. Desired outcomes are outcomes which are the future goals which could be composite which also includes efforts. Inputs and outputs - What was achieved, as well as how it was achieved?

3.

Points two through nine coming from those two notes at the bottom are about ensuring that when you have a purpose, when you have a goal, link those goals to structure and systems for the simple reason that it is going to influence behavior, and that will lead to certain outcome. And, you want that to be desired outcome, as opposed to the undesired outcome. You may ask what if there is more focus on ends than on the means as a result of which input and output become more important than the method? Our intent here is not to be judgmental between the means and ends. A focus on results only, to the exclusion of the means may suggest a certain domina nt logic in the organization which is one takeaway from an understanding of the context of a particular organization. A classic example is Bausch & Lomb under Daniel Gill where the message to the managers was achieve the numbers but do not do anything silly; this could be interpreted as an expectation where output matters even if the path taken is questionable, so long as you do not get caught! Input and output are relevant to the extent of our interest in the issues raised in the Christensen article: is the way performance is measured likely to assist or impede constructive behavior? Do they converge on desired outcomes? What changes in measurement, incentive and control systems would you recommend to facilitate achievement of goals? In order to

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reflect the requirement that the means matter too, the design of the system will have to be such. Performance assessment mechanisms that give weightage to the means, is one way to deal with it. This in a nutshell is administrative context as also why it matters, and where these two things structure & systems fit in the day to day functioning of a manager.

ADMAP Program You can use the above learning during your stint in the ADMAP program where you are all members of an ADMAP committee that carries out real time work of the Institute; and ADMAP projects at government department; and some other activities. Every committee has some strategic tasks that need to be accomplished for the institute by your team. Let us take the infrastructure committee which entails dealing with SPJIMR as an organization, the office administration, the entire PGP batch as also organizations outside the institute like mess in charge, the corner restaurant, the repair staff electricians, plumbers, computer centre etc. How would you put this knowledge into play? Find out what kind of systems are being followed within your committee, within the institute and in the outside organization that you are dealing with. Is there some relationship that you see in terms of what they are doing and how they are doing, given the kind of systems that they are working with. Use this knowledge to achieve your committee tasks more effectively. Similarly during projects at BMC, Police or Railways, try to decode the three elements of structure, systems and culture. It may not be so easy to decipher all of them so quickly within the limited time you get to interface with them. Still, keep it at the back of your mind as it gives you some framework for greater understanding and to get a hang of what is happening and why it is happening the way it is happening. If you had to achieve something else, what kind of levers might potentially be needed to bring about that change? We are not so much interested in the second part because that comes at some later stage in life but the first- which is the relationship between the context, behavior and performance is the learning objective for now. And remember, this might be relevant not just for ADMAP but later when you are part of a company, it is important to get a sense of these issues. You need to align yourself with the organization you work for. If you have to deal with another company as a customer or a supplier, again, it helps a lot to be able to answer these questions. Reference reading: 1. C. Roland Christensen, Kenneth R. Andrews and Joseph L. Bower, Business Policy-Text and Cases, Book Two: Accomplishment of Purpose: Organizational Structure & relationship, Richard D. Irwin, Inc: 1978, page 593-602 C. Roland Christensen, Kenneth R. Andrews and Joseph L. Bower, Business Policy-Text and Cases, Book Two: Accomplishment of Purpose: Organizational Processes & Behavior, Richard D. Irwin, Inc: 1978, page 661-677

2.

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