BUSINESS ORGANISATION AND MANAGEMENT I

Introduction to the course: FRAMING

1. ARE TOP MANAGERS CLUELESS?

Managers sometimes seem to not know how to achieve their organisation goals.
● CEO (chief executive officer) Jeff Skilling thought Enron was “in excellent shape” when
he quit a few months before it collapsed and disappeared.
● Joseph Berardino, CEO of Eron’s auditor, Andersen Worldwide, said no one told him
some of his partners thought the firm was at risk in approving Enron’s aggressive
accounting practices.
● Roger Smith said it was a “mystery” why General Motors lost market share
throughout his tenure as CEO.

2. VIRTUES AND DRAWBACKS OF ORGANIZATION

Virtues
● Prevalence of large, complex organizations is historically recent.
● Much of society’s important work is done in or by organizations (not only companies
but other organisations like schools). They are here to make our lives easier.

Drawbacks
● In general, they often produce poor service, defective or dangerous products. This is
less true in society where there is a high degree of competition.
For example in fashion, people want to dress fashionable but most people can’t afford the
real price of the clothes. So we often prefer having more products and lower quality than less
but more qualitative ones.

● Too often they exploit people and communities, and damage the environment. This is
clearly connected with our desire to have cheaper products.

Example: Nowadays one of the best companies in the world in terms of revenues is Walmart, followed
by State Grid, Amazon, China National Petroleum, Sinopec Group, Apple, CVS Health….

3. SIGNS OF CLUELESSNESS
● Management errors produces 100s of bankruptcies of public companies every year.

● Most mergers (when two companies become one with a new identity) fail, but companies
keep on merging.

● One study estimates 50 to 75% of American managers are incompetent. And they
charge a lot of money for that.

● Most change initiatives produce little change; some make things worse.

● Most of the times, the statement or speech of the CEO is not congruent with the
reality
4. STRATEGIES TO IMPROVE ORGANIZATIONS
● Better management

● Consultants: try to help them to improve management practices by providing expert

opinions, analysing and recommending to organizations or individuals, based on their
own expertise.

● Government policy and regulation: what relates to them is a way of improving

organisations.

5. WHAT IS A FRAME?
● Mental map to read or to understand and negotiate a “territory”.

● The better the map, the easier it is to know where you are and get around (a map of NY
won’t help in San Francisco). This map is not the solution to the problem but it can
guide you. Each map is different in each company.

● Frame as a window: enables you to see some things, but not others. It will give us
information about the organization but most of the time is not enough to understand
your organisation.

● Frame as tool: effectiveness depends on choosing the right tool and knowing how to
use it.
For example, a very popular tool in management is “SWOT” (DAFO): strengths (internal
origin), weaknesses (internal), opportunities (external origin) and threats (external).

5.1. STRUCTURAL FRAME

● Roots: sociology, management science

● Key concepts: goals, roles (division of labor), formal relationships

● Central focus: alignment of structure with the internal goals of the company and
environment.

5.2. HUMAN RESOURCE FRAME

● Roots: personality and social psychology

● Key concepts: needs (motives), capacities (skills), feeling

● Central focus: fit between individual and organization.

5.3. POLITICAL FRAME

● Roots: political science

● Key concepts: interests, conflict, power, scarce resources

● Central focus: getting and using power, managing conflict to get things done

5.4. SYMBOLIC FRAME

● Roots: social and cultural anthropology
● Key concepts: culture myth, ritual, story
● Central focus: building culture, staging organizational drama
 5.6. STRUCTURAL AND HUMAN RESOURCE FRAMES

Frame Structural Human Resource Political Symbolic

Metaphor for Factory or Machine Family Jungle Carnival, temple,

organization. theater

Central Rules, roles, goals, Needs, skills, relationships Power, conflict, Culture, meaning,
conceptes policie, technology, competition, metaphor, ritual,
environment organizational ceremony, stories,
politics heroes

Image of Social architecture Empowerment (when you give Advocacy Inspiration

leadership power to people in order to
manage the situations they have
to face in the organisation)

Basic leadership Align structure to Align organization and human Develop agenda Create faith, beauty,
challenge: task technology, needs and power base meaning
environment

7. EXPANDING MANAGERIAL THINKING

What management was What management is becoming

TRADITIONAL MANAGEMENT THINKING ARTISTIC THINKING

See only one or two frames Holistic, multi-frame perspective (see the problems from
different perspectives so as to come up with better
solutions).

Try to solve all problems with logic and structure. Rich palette of options

Seek certainty, control, avoid ambiguity and paradox. Develop creativity, playfulness

One right answer, one best way (and instead in much Principled flexibility.
problems, there is no one right answer)

8. CONCLUSION
● One of the problems today is narrow thinking → clueless managers. And what we
really need today is managers who are more creative, open minded…

● Multiple frames improve understanding, promote versatility.

● Multiple frames enable reframing: viewing the same thing from multiple perspectives.
When a department is in trouble it’s important it can connect with other departments and
areas to have different approaches.

9. WHAT IS AN ORGANIZATION?
● Organization: a tool people use to coordinate their actions to obtain something they
desire or value.

● Entrepreneurship: The process by which people recognize opportunities to satisfy

needs and then gather and use the resources they need to meet those needs.
10. HOW DOES AN ORGANIZATION CREATE VALUE?
● Value creation takes place at the stage; input, conversion and output.

● Each stage is affected by the environment in which the organization operates

○ Organizational environment: the set of forces and conditions that operate
beyond an organisation’s boundaries but affect its ability to acquire and use
resources to create value.

FIGURE 1.1. HOW AN ORGANIZATION CREATES VALUE