CHAPTER OBJECTIVES After reading this chapter, you should be able to: 1. Understand the meaning of coordination NOSED India’s Inspirational Managers R.S. Butola is the former chairman of Indian Oil Corporation Ltd., which is India’s largest company with a sales turnover of % 409,957 crore, IndianOil is the highest ranked Indi- an company in Fortune’ Global 500 listings, ranking at the 83rd position. Before joining IndianOil, Butola was the managing direc- tor of ONGC Videsh Ltd. (OVL). Butola is also the chairman of Petroleum Federation of India (PetroFed). He has rich and diverse experience in all aspects of the hydrocarbon Discuss the types of coordination List the steps in the coordination process Evaluate the techniques of coordination Explain the requirements for effective coordination Describe the significance of coordination Enumerate the principles of coordination industry ranging from project development and execution to commercial closures. Un- der his stewardship, IndianOil was engaged in an enterprise-wide exercise to strengthen its internal system by optimizing the supply chain and achieving zero-process inter- ruption. Butola is well-focused on build- ing bench strength in his company’s core businesses. Butola won the coveted Life- time Achievement Award from the Dainik Bhaskar group for his stellar roles as a team leader, a game changer and a motivator. Keeping his achievements in the back- ground, we shall now discuss coordination. IntroductionCONTROLLING AND COORDINATION ansures that the whole organization moves in a common direct 1 ens Te als aiud_objectives, Coordination thus become the acco iting. the strategic and operational objectives, Traditional litera Pe pnganizations recognize coordination as a paramount function of managements ordination not only supports the integration of the organizational acti ies Co. er iitates elective decision making by the managers. This is possible because 2° nation enables managers to anticipate and react quickly to the changes in the n> and external environment that need organizational adjustment © inte tn many organizations, coordination is the key competence that drives mance, It is generally viewed as an end result of the management process “Th because the management function is only about the coordination of all activten etlorts and the internal and external forces that impact the organization, Coosa” nation is essential for integrating tasks and resources for accomplishing the ora. nizational objectives. It also enables managers to establish collaborative relatien ships among various resources like human resources and physical resources ofthe organizations. It thus serves as a key to all managerial functions. Coordination becomes more important in organizations where effective interaction of decisions made by different groups of people are critical to the success of goal initiatives Through coordination, management ensures that all managers undertake goal accomplishment — BSS ‘Thal fulfilling actions alone. Definitions of Coordination Coordination is all about establishing a relationship, and therefore people should know the different patterns of relationships. Obviously, many authors of(@8@iiiaion in their definitions. | look at a few definitions of coordination. ; iigoney? “Coordination is the effort to assure a smooth interplay of the functions and fore: es of all different parts of an organization to the end that its purpose will be realized with a minimum of friction and maximum of collaborative effectiveness” —Tead* “Coordination is the conscious process of assembling and synchronizing dilfe- entiated activities so that they function harmoniously in the attainment of organiza” tional objectives” —Haimann and Scott* Aa “Coordination is the process of developing the required patterns of group aa and securing unity of action for the accomplishment ‘of common goals’ —D* McFarland® 5 “Coordination refers to the quality of collaboration across departme Richard L Daft” We may Qe Let us now knowledge, shared go" it becomes clear that shared : dination. From the above definitions, and mutual respect are the three important characteri istics of coorsignificance of Coordination tance ilar to any other managerial function, coordination also plays a crucial role in site the organization. Let us now see the impor- of coordination as a managerial function, COORDINATION 467 the @ Coordination is « €GRLRTOUSREEy of an organization. Similar to other man- agerial functions, managers need to perform coordina ously n function continu- & ltaimsat Specifically, it enables an ory anization to uni: @ its@EEiNHTIES and them({6Wafad the Coordination is also capable off , which means the total result is greater than the sum of indi ividual achievements, It aims at achiev- ing required patterns of group and individual performances @@eeSsanyaforithie @ Coordination is in fan organization, Coordination of an organization by helping the managers to connec! t different departments and sections and weld them as one entity. It thu: the organization asa whole and @ Coordination is necessary t performed by an organization, f it. Integration and balancing of individual efforts alse OMGUAFATIGE the presence of alSMOGTHTRH @ 1 hacilitates . Tt also of work, and overlapping efforts, and S—— ® Ithelps manager: Theres growing realization among companies about the ¢ role and importance of coordination in achiev- 'ng balanced organizational performance, Compa- Mies realize that effective coordination of internal and external organizational components can help in ‘educing the internal and external complexities and “certainties within the organization. They believe that effective coordination can enhance productivity, ink macro- and micro-level organizational dynamics cious Wignranelee e -A'Microsoft Initiative and improve trust among organizational groups. In this regard, organizations may evolve their own goals and strategies for their coordination initiatives. Microsoft’ realignment and coordination initiatives area case in point. Microsoft has recently announced its realign- ‘ment strategy that aims at enhancing speed, efficiency and capability to innovate and improve performance. Through its realignment strategies and coordination (Continued)468 CONTROLLING AND COORDINATION initiatives, this company expects to achieve better execution from product conceptualization and in- novation right through to marketing and sales. The ing its capability in all disciplines and engineerin technology areas and (iii) working together With more collaboration and agility around its commo, n goals. Microsoft also believes that its single stra performance enhancement initiatives of this com- ° a pany have three dimensions. They are: (i) focusing as one company will drive it to set shared Boals for all activities.* the whole company on a single strategy, (ii) enhanc- Principles of Coordination When an organization grows in size and shape, two things always occur, They are (i) new positions and departments are added to deal with the new developments, opportunities and threats emerging in the external environment and to meet the changing goals and needs of an organization and (ii) managers searching for ways and means to integrate the activities of all these positions and departments, These developments necessitate the presence of effective coordination. To make coordi- nation effective, * has suggestedsfouryprinciplés of coordination (Figure 17.1). We shall now briefly discuss these principles. _ Principle of Direct Contact According to this principle, @a¢himmanager should imiaintain direct on personal contact with his or her subordinates . Direct contact is often viewed as the best way of con- veying ideas and information effectively. It also (@GilifatesitheleXCHANGelOl Opinions (@ndjsuggestions between the managers and subordinates. It thus ensures that there are qlommisunderstandings|aNid tensiOns\inlNEWElAWOHS between the managers and subordinates, It can also in the relations. Generally, direct contact can be established with the help of face-to-face meetings through conferences, committees, etc. _ Principle of Early Stages Coordination As per this principle, management should (6@ginilthelprocesslomeoordinatiomeve" _at the early stage of enterprise formation. . The rationale behind this principle is that Principles of coordination ——,—_,—_—_, | Principle of caer ot early pines a cine dit reciprocal ontinui meena coordination relations = Figure 17.4 Principles of CoordinationCOORDINATION dination can be achieved easily and effectively if it is undertaken in the early coordina ages of planning and policy formulation. Understandably s vison wil undenalingthe coceinonee es OO ave) Aspe this principle, managers must fist RARER ia within the organization. This is essential @ecauseioB in the organization. For instance, the decision or action of one person in any one department may impact the decisions or actions of others in the same or other departments. Therefore, managers must give due importance to the interrelationship while devi ising their coordination strategy. This principle insists that managers must @EWROORIGESNRS a continuous activ- ity an Simply put, coordination as a managerial function It should, therefore, be able to perpetuate itself, Saag should continuously coordinate thearious activities of the organization Types of Coordination George Terry, who views coordination as a dynamic activity, classified it into four types. They are: (a) coordination within an individual, (b) coordination among indi- Viduals of a group, (c) coordination among groups of an enterprise and (d) coordina tion with those of other enterprises and forces (like government regulatory measures, fconomic conditions, etc.) Based on the number of people involved and nature of activities undertaken, coordination can be categorized a: . We shall now briefly look at each of them, Coordination @ithinlaRlORGaMTZAHON is typically known as internal coordination, It involves coordinatior . It also refers to the integration of financial, material and human re- Sources available with an organization for organizational purposes, Coordination is called exter- nal coordination. It typicalh involves coordination Effective internal and external coordination ‘San essential prerequisite for the smooth and successful functioning of organizations. Depending on the level of ‘management, @OOaiiiatiGiniyalcoIbS elaine aD 469 of470 CONTROLLING AND COORDINATION © CAGED —mreansthecoordination ofvctivites carried ou GAGS esl of the management Vertical coordination is achieved among peop GRCTOESABOMTINAG relationships. Coordination betwe » he (aaah GB 61 management isan example of vertical coordination, si tment head (say, sales manager) coordinates the activiti sates (9 safes team) working under him, it may be called vertical coordina @ CGAAATERATEAD —is the coordination such as marketing department, purchase department, finance de, HR department, ete. It can SB be achieved: (@QAAEN. 1¢ typically involves the activities carried out at the same management, Horizontal coordination is a key function in any organi structure." A successful production or marketing requires various departments ateand communicate with each other overa period of time. Manager achieve horizontal coordination through ditect contact between department, information system, task forces, teams and full-time integrators,"" partment, level of ational to coope (iii) —means the coordination of of the organization. In large anagement has no direct access or proximity to the working arrangement, diagonal coordination can be effective. This coordination becomes organizations where top 1 Techniques of Coordination An organization can achieve coordination in a variety of ‘ways. As seen in Figure 17. the major techniques of coordination are authority, objectivities, policies, procedures, rules, methods, committees, conferences, coordinators, communications, collective bargaining, performance reviews and managements, information technology tools and voluntary coordination. We shall now briefly discuss these techniques. Authority is the capacity to evoke compliance in others." It ensures thateopleComply . Authority facilitates coor- dinated behaviour among the organizational members towards goals and activities. In Organizations iit@Epersonal relations are mostlystructured and organizational activi- ties are coordinated in terms of the prescribed authority of the managers. (Q’IECLHED are capable of SRBVRing They a enable the management to. This facilitates ‘managers to achieve coordination with ease. _ Policies, Procedures, Rules and Regulations Policies, procedures, rules and regulations » pehaviovt Policies help to ensure that the members beha'472 CONTROLLING AND COORDINATION zanizational rules and external law. i “place conform to the organizal ha Fa fos paid that the members’ behaviour meet the expectations of the manag” aan Typically, policies apply to particular situations. in the form of proce ment. Typically, rremedures may be defined as step-by-step list ob activities needed to carry out pre determined tasks. and policies help the managers to (@@inimittees are generall ‘Managers can achieve coordination among employees working under them by form. ing committees or work groups. Since committees are made up of a small number of members with(frequentimeractions, they (acilitate\betterjcoordination among these members. _ Conferences Conferences are used for achieving effective coordination among the organizational members, Since conferencestiivelNeWideimiembership, they become effective forums for the managersf@iseussvarious|commonjissues)and feAChTUNGerStaNcing(onin. . Such understanding in turn Helpsiinijenstring better _ Coordinators Organizations may use a coordinator ((ORMinte grating ithe laCtivities fonvarious (@@partMENts. In organizations, coordinators are also KmOWilaslintegrarors|or liai- GBs. Coordinators normally *ORRGnyORe|departmentjandjcoordinatewteyactivs The primary role of coordinators is to(fepresen) They participate in the discussions and pass on the information gathered from the meetings with the members of their departments. For instance, coordinators may disseminate information on issues, policies and regulations to their department people. Box 17.2 shows the role of integrators in consumer packaged goods companies. rae — + Oy In organizations, communication is another @ffeetvelaiid msefulanstrament °° ordinating the activities of the organizational members and . In this regard, managers may yorking : to the organizational members ¥° across different departments.COORDINATION 473 any organizations prefer organizational integrators M 4 » forachieving the required level of coordination, build- for a tin § coalitions or spearheading the operation in a interactions. They make sure that all interrelated elements are brought together and the right products reach the right market at the right time. Besides these integrators, companies can also opt for “bridge functions” composed of employees drawn from marketing, supply chain, finance, R&D, etc. The members of the bridge function will have diverse knowledge and expertise. Generally, the purpose behind the formation of the bridge func- tion is to build relevant capabilities in critical busi- ness units and codify the best practices and incor- Porate them into its formal processes and training programmes! ‘qeasingly complex and complicated situations. They inay be identified variedly as project manager, prod- ct manager, team leaders, etc, In case of consumer packaged goods (CPG) companies, managements may opt for creative marketing integrators like brand managers, calegory managers, key account executives or geographic leaders. Brand managers are people in a coordinating role with specialized negotiating and networking skills. They engage in assorted activi- ties ranging from product development to consumer Organizations may utilize the collective pargeining process (6J@iHanceleoordinalion . Typically, managements can Bite GiioneAderS, who cepresentetenaployess, in the bargaining process to convey in- formation on certain organizational issues like terms and conditions of. employment, etc. Management may also: (HEHARGES PROPOSED by the management. Trader GHiORlERGEScan also GSebargain- ing process to express the workplace concerns and sentiments of the employees. Organizations may use performance management as a technique for achieving coordination among the employees Performance reviews providelopportunities|to the managers to and what must be done to continue to meet those Boals. They can: iD Since cena management focuses on many aspects of the organization nand is Processes like goals, plans, processes and outcomes, it facilitates el of different activities of the organization.474 CONTROLLING AND COORDINATION focus_on the overall activities iny, olvea . OF late, several e {fy control programmes such as : (Seoreea | ave Greatyselpedd organizations Among the various departments and their activities. Voluntary coordination— Managers may eee In voluntary coordination, mao G@fotkerMepartments. In other words, coordination is achieved more by persuasion and motivation and (@Ssibyithelsuperiorsicommand Even though organizations may adopt any one or more of these techniques to achieve the required level of coordination, success depends on the nature of tasks performed and the prevailing environment. Steps in the Coordination Process nizations with well-developed coordination proces: achieve: (i) well-developed relationshi vy several advantages, ng different departments tional members whose activi- jong the managers and employees the availability of critical support and . Though each organization can decide on the steps to be followed in cos ion depending on their specific requirements, dination process. Wherever necessary, they should develo} ating procedures and rules and norms of behaviour. 2. Managers should design and develop effective decision-making system Ps enables them to supervise the organizational activities personally. They show Understanding the current organizational policies, procedures and plans h Designing and developing effective decision-making system H rc Installing a proper system for reporting of activities a Forming committees to perform coordination related functions - Figure 17.3 Steps in the Coordination Process