STRUCTURE AND SPACE

What is 'Organizational Structure'

Organizational structure is a system that consists of explicit and implicit

institutional rules and policies designed to outline how various work roles
and responsibilities are delegated, controlled and coordinated. Organizational
structure also determines how information flows from level to level within
the company. For example, in a centralized structure, decisions flow from
the top down, while in a decentralized structure, the decisions are made at
various different levels.

BREAKING DOWN 'Organizational Structure'

Organizational structure, stated simply, defines a specific hierarchy within an
organization, and businesses of all shapes and sizes use it heavily. A
successful organizational structure defines each employee's job and how it
fits within the overall system. This structuring provides a company with a
visual representation of how it's shaped and how it can best move forward in
achieving its goals. Organizational structures are normally illustrated in
some sort of chart or diagram.
Common Types of Organizational Structures

At its highest level, an organizational structure is either centralized or

decentralized. Traditionally, organizations have been structured with
centralized leadership and a defined chain of command. The military, for
example, is an organization famous for its highly centralized structure, with
a long and specific hierarchy of superiors and subordinates. However, there
has been a rise in decentralized organizations, as is the case with many
technology startups. This allows the companies to remain fast, agile and
adaptable, with almost every employee receiving a high level of personal
agency.

Four types of common organizational structures are implemented in the real

world. The first, and most common, is a functional structure. This is also
referred to as a bureaucratic organizational structure and breaks up a
company based on the specialization of its workforce. Most small-to-medium
sized businesses implement a functional structure. Dividing the firm into
departments consisting of marketing, sales and operations is the act of using
a bureaucratic organizational structure.

The second type is common among large companies with many business
units. Called the divisional or multi-divisional structure, a company that uses
this method structures its leadership team based on the products, projects
or subsidiaries they operate. A good example of this structure is Johnson &
Johnson. With thousands of products and lines of business, the company
structures itself so each business unit operates as its own company with its
own president.

Flatarchy, a newer structure, is the third type and is used among many
startups. As the name alludes, it flattens the hierarchy and chain of
command and gives its employees a lot of autonomy. Companies that use
this type of structure have a high speed of implementation.

The fourth and final organizational structure is a matrix structure. It is also

the most confusing and the least used. This structure matrixes employees
across different superiors, divisions or departments. An employee working
for a matrixed company, for example, may have duties in both sales and
customer service.

Role of Organizational Structure

Organizational structure pertains to the way in which companies arrange

their departments. Smaller companies tend to have flatter organizational
structures with few management levels. Larger companies use tall
organizational structures with many echelons of management and
employees. Companies use several types of organizational structure for
specific roles. For example, companies using a geographic organizational
structure decentralize various functions like marketing because of varying
regional needs.

Efficiency
One role of organizational structure is efficiency. Most companies need to
make the most of various resources. Duplicating raw materials or job duties
is wasteful and inefficient. Consequently, a company will structure its
organizational according to products and services it offers. A small software
manufacturer may use a customer-oriented organizational structure because
of its wide variety of customers. For example, the software company may
sell to consumers, corporations, financial institutions, hospitals and health
clubs. In this case, organizing departments by customers is efficient because
of diversity. Product management duties may differ widely by customer
type. Marketing to consumers is much different than targeting corporations.
Harnessing Experience
Another role of organizational structure is harnessing experience. Companies
may arrange their companies by specific functions, such as marketing,
accounting, finance and engineering. The purpose of grouping departments
by function is to use the experience of groups to accomplish tasks and
projects. A certain synergism exists when skilled employees of similar
talents work together as a whole. For example, marketing and advertising
managers can can better evaluate the potential success of a new product
introduction as a group.
Decision Making
Organizational structure in a company also enhances decision making,
according to Referenceforbusiness.com. Companies will often structure their
organizations to make the best decisions possible. For example, a company
may decentralize its marketing to make quicker decisions locally.
Consequently, the company may put marketing managers in one of four
different regions. It is much easier for regional marketing managers to make
local decisions about consumer needs than a marketing manager in a distant
corporate office.
Communication
Companies also also use various organizational structures for communication
purposes. Larger companies have many levels of management. Therefore,
the most effective way to communicate is usually from the top of the
organization down. Executives create certain operational procedures which
they communicate to directors and managers. Managers, in turn, explain
these operational procedures to subordinates or hourly employees.
Span of Control
Organizational structure is used for span of control. For example, a vice
president of marketing may be in charge of four directors: One for marketing
research, brand management, advertising and public relations. The directors
may have three separate groups of managers reporting to them. Span of
control pertains to the number of employees an executive or manager
oversees. This reporting structure is how companies establish accountability.

Role of Physical Space

In the knowledge economy, workers are less and less tied to a specific
business
location. This growing phenomenon entails a re-examination of the role and
the benefits
of the work space. In line with the ‘spatial turn’ trend (van Marrejick and
Yanow,
2010), we attempt to better understand the materiality of the work space
and how it can
be leveraged as a management tool to support innovation processes (Allen
and Henn,
2007). We chose to concentrate on a set of micro-enterprises occupying a
shared work
space at ‘The Beehive’ (France) to study whether and how spatial design can
support
interactions between several independent organisations. Through an
empirical and
interpretative qualitative research design combining interviews and
ethnography, we
show how the work space can – in its physical and social components –
induce new
forms of collaboration across organisational boundaries to foster
innovativeness.

However, other studies have also pointed out that work space contributes to
creativity,
innovation and learning for their employees (Kanter, 1983; Peters, 1992),
particularly
for ‘knowledge workers’ (Drucker, 1959), though this dimension has been
less
emphasised. In the field of knowledge management, innovation and office
design, there
have been only a few, though influential, studies: Lefebvre (1911), Tom
Allen (1977),
Duffy (1997), Hillier (1996), Kornberger and Clegg (2004), Allen and Henn
(2007),
Fayard and Weeks (2007). In line with the ‘spatial turn’ trend (van Marrejick
and
Yanow, 2010), we are eager to better understand the physical nature of the
work space
and how it can be leveraged as a management tool to make the innovation
process more
effective (Allen and Henn, 2007).
Work space and organisations
Work space, communication, knowledge and innovation
The work performed by the workforce in the knowledge economy involves
creating and
exchanging knowledge in the work space. According to Nonaka (1991),
knowledge is
4
the fuel for innovation – in other words, innovation results from
organisational
knowledge creation. But the question is how to leverage knowledge and
develop
innovation in the workplace. Nonaka argues that knowledge workers have to
transform
their personal and subjective tacit knowledge into organisational explicit
knowledge to
foster the innovation capabilities of their companies (Nonaka and Takeuchi,
1995).
There is evidence that the work space may have an important role to play in
this
process, involving Nonaka and Takeuchi's five enabling conditions: intent,
autonomy,
fluctuation, redundancy, and variety. They also recommend a ‘middle up
down’
management model whose main goal is to enhance interactions between
individuals and
groups within the organisation and thus encourage exchanges of tacit and
explicit
knowledge.
According to Allen and Henn (2007), organisational structure and physical
space can
and must be configured to encourage interactions and communication
among co-
workers to increase the likelihood of knowledge transfer, and hence
innovation. The
majority of research projects on organisation theory and workplace studies
have
concentrated on facilitating communication that spurs innovation because
the direct link
between the design of physical space and creativity or innovation or even
organisational
behaviour is extremely difficult to prove (Leonard and Swap, 1999;
Kampschroer and
Heerwagen, 2005; Price, 2007). However, the spatial configuration of office
settings has
an incontestable impact on interactions (Seiler, 1984; Girin, 1990). For
instance, the
5
well-known Allen curve (1977) demonstrates that the frequency of R&D
workers’
interactions increase with the proximity of their offices. Allen (1986)
identifies three
goals of scientific communication: communication for coordination, for
information,
and for inspiration. Interaction can boost organisational and individual
learning by
disseminating knowledge broadly (Cummings and Oldham, 1997; Bagnara
and Marti,
2001).
Physical settings and social designation of work spaces
The physical space may influence how and where communication takes place
and the
quality of that communication because the configuration of space can initiate
and
influence social behaviour (Hatch, 1987; Allen and Henn, 2007). Some
authors
acknowledge the role of the office building (Markus, 1993; Duffy, 1997;
Hilier, 1996)
whereas others emphasise special spatial settings. Sailer (2011) argues that
physical
office features – accessibility, density, proximity, distance to others, layout,
design and
visual cues – can enable or constrain the processes of knowledge creation
and sharing.
For instance, project platforms (Clark, Fujimoto, 1991; Midler, 1993) favour
the
effectiveness of developments and help build competencies, in contrast to
work carried
out by a scattered team (Nonaka, Takeuchi, 1995; Eisenhardt, Tabrizi,
1995).
Furthermore, Amabile (1997) explains that a worker’s social environment
can affect
his/her level of motivation to complete his/her job, and hence the level of
his/her
6
creativity. Other authors speak about the importance of ‘work climate’
(Abbey and
Dickson, 1983) in encouraging innovativeness, for example, in the R&D
subsystems of
the semiconductor industry, highlighting the role of a reward system and a
willingness
to take risks.
Fayard and Weeks (2007) propose an integrated framework to explain how
the physical
and social characteristics of a setting influence informal interaction. A work
space
invites interaction only if it balances proximity, privacy, and permission
(Fayard and
Weeks, 2011; Parkin et al., 2011). Moreover, some authors emphasise the
importance of
spaces that are not dedicated to the organisation's core activity but where
interactions
may occur (Goffman, 1997; Allen and Henn, 2007; van Marrewijk and
Yanow, 2010),
such as corridors (Hurdley, 2010; Iedema et al., 2010) or coffee machine
and
photocopier rooms (Fayard and Weeks, 2007). In spaces that are outside
the actual work
space but within the organisation, the affordance of ‘permission’ – also called
‘social
designation’ by Fayard and Weeks (2007) – is really important to allow
people to stay
and talk to each other. This is a necessary condition for people to exchange
knowledge
and consequently to boost innovativeness. Because ‘the unexpected’
(Drucker, 1985) is
one of the main sources of innovation and ‘serendipity’ is crucial to
innovation
processes, organisations have to pay attention to both physical settings and
the social
designation of their work spaces to foster interactions, collaboration and
innovation
among their employees. However, these studies mainly underline
interactions within a
7
single organisation whereas other research stresses the importance of
cooperation with
other organisations, in particular for small firms. One may therefore wonder
if the work
space might play a role in supporting collaboration between different
organisations.
Inter-organisational work space sharing
Geographical proximity is a dimension that the innovation literature has
been exploring
for many years in trying to understand innovation performance. At a macro-
economic
level, previous studies notably examined the concentration of companies in
the same
area and its economic consequences (Porter, 1998). From Marshall’s analysis
of
industrial districts (1890) to the literature on clusters, ‘positive network
externalities’
are manifested in the sharing of information, infrastructures and
competencies
(Malmberg, Maskell, 2002). Nevertheless, the most recent studies show that
setting up
businesses in a given location does not necessarily give rise to interactions
between the
various parties present. In addition to geographical proximity, some
researchers
introduce different types of proximity, such as ‘organised proximity’ (Torre,
Rallet,
2005) to emphasise the embeddedness of relations between individuals in a
given area
(Grossetti, Bes, 2001) or ‘institutional proximity’ to highlight the need for
shared norms
and values in order for different parties to interact (Talbot, 2008). Cohendet
et al. (2010)
propose, for example, to connect the three types of proximity –
geographical, organised
and institutional – with a view to building knowledge, in order to explain
creative
8
processes on a city-wide scale. This meso level of analysis – ‘middleground’
–
emphasises the interactions and knowledge flows between very different
kinds of actors
in terms of size, goal, etc. – individuals, companies, market, and state –
using a spatial
and social combined model. One may wonder if this model would be relevant
on a
smaller scale to understand knowledge and innovation processes between
different
organisations sharing the same work space.
First, studies which deal with the impact of spatial settings on interactions
and hence on
knowledge transfer and innovation have mainly analysed intra-organisational
relationships, and most often within large companies. Second, studies about
inter-
organisational interactions in a given area mainly focus on a macro or meso
economic
level. This is the reason why we chose to concentrate on a set of micro-
enterprises
occupying a shared work space to study whether and how spatial design can
support
interactions between several independent organisations. Our research
question is this: to
what extent can the work space – in its physical and social components –
induce new
forms of collaboration across organisational boundaries to foster
innovativeness?

How does the organizational structure affect the function of the

organization?

Every organization is an entity defined by its membership ( employees ),

Structure ( organization structure ) and system ( management system ).
The strategic responses to the changes in the business environment are
formulated based on the strength & weaknesses, which are internal to the
organization ,as well as, on the opportunities & threats, which are external
to the organization. The organization must gear up its efforts through
mobilization of resources ,as well as ,effecting necessary structural changes
for optimum utilization of the same for responding adequately to the
business environmental changes. Therefore strategy and structure cannot be
isolated and will certainly influence each other.

You may use different approaches to deal with the question. Theorists on
population ecology of firms will emphasize the impacts of structure on
strategy, with the notions of niches and competition. This links up with
institutional theory on the role of processes of legitimation and isomorphism
within specific industries and sectors. However, you may also look at the
other end of the spectrum, with theorists on dynamic capabilities, who
highlight the importance of management in designing the trajectories of
firms. The latter stresses strategy over structure. Possibly, none of these
theories provide a balanced view, but you can find empirical studies in all of
them that might help you fit theory to the organizations you have in mind.

Alfred Chandler first examined this relationship in 1962. Structural

dimensions (complexity,formalisation,and centralisation/decentralisation)
must fit the requirements of strategy otherwise strategy will not be effective

TYPES OF AUTHORITY:

3 main types of authority can exist within an organization:

1. Line Authority
2. Staff Authority
 3. Functional Authority
Each type exists only to enable individuals to carry out the different types of
responsibilities with which they have been charged.

LINE AUTHORITY:

The most fundamental authority within an organization, reflects existing

superior-subordinate relationships. It consists of the right to make decisions
and to give order concerning the production,sales or finance related
behaviour of subordinates.

In general, line authority pertains to matters directly involving management

system production, sales, finance etc., and as a result with the attainment of
objectives.

People directly responsible for these areas within the organization are
delegated line authority to assist them in performing their obligatory
activities.

STAFF AUTHORITY:

Staff authority consists of the right to advise or assist those who possess line
authority as well as other staff personnel.

Staff authority enables those responsible for improving the effectiveness of

line personnel to perform their required tasks.

Line and Staff personnel must work together closely to maintain the
efficiency and effectiveness of the organization. To ensure that line and staff
personnel do work together productively, management must make sure both
groups understand the organizational mission, have specific objectives, and
realize that they are partners in helping the organization reach its
objectives.

Size is perhaps the most significant factor in determining whether or not an

organization will have staff personnel. The larger the organization, the
greater the need and ability to employ staff personnel.

As an organization expands, it usually needs employees with expertise in

diversified areas. Although small organizations may also require this kind of
diverse expertise, they often find it more practical to hire part time
consultants to provide it is as needed rather than to hire full time staff
personnel, who may not always be kept busy.

LINE – STAFF RELATIONSHIPS :

e.g. A plant manager has line authority over each immediate subordinate,
human resource manager, the production manager and the sales manager.

However, the human resource manager has staff authority in relation to the
plant manger, meaning the human resource manager has staff authority in
relation to the plant manager, meaning the human resource manager
possesses the right to advise the plant manager on human resource matters.

Still final decisions concerning human resource matters are in the hands of
the plant manager, the person holding the line authority.

ROLE OF STAFF PERSONNEL:

Harold Stieglitz has pinpointed 3 roles that staff personnel typically perform
to assist line personnel:

1. The Advisory or Counseling Role : In this role, staff personnel use

their professional expertise to solve organizational problems. The staff
personnel are, in effect, internal consultants whose relationship with
line personnel is similar to that of a professional and a client.
2. The Service Role : Staff personnel in this role provide services that
can more efficiently and effectively be provided by a single centralized
staff group than by many individuals scattered throughout the
organization. This role can probably best be understood if staff
personnel are viewed as suppliers and line personnel as customers.
3. The Control Role : Staff personnel help establish a mechanism for
evaluating the effectiveness of organizational plans.
The role of staff in any organization should be specifically designed to best
meet the needs of that organization.

CONFLICT IN LINE – STAFF RELATIONSHIP:

From the view point of line personnel, conflict is created because staff
personnel tend to

 Assume Line Authority

 Do not give Sound Advice
 Steal Credit for Success
 Fail to Keep line personnel informed of their activities
 Do not see the whole picture.

From the view point of Staff Personnel, conflict is created because line
personnel do not make proper use of staff personnel, resist new ideas and
refuse to give staff personnel enough authority to do their jobs.

Staff Personnel can often avert line-staff conflicts if they strive to emphasize
the objectives of the organization as a whole, encourage and educate line
personnel in the appropriate use of staff personnel, obtain any necessary
skills they do not already possess, and deal intelligently with the resistance
to change rather than view it as an immovable barrier.

Line personnel can do their part to minimize line staff conflict by sing staff
personnel wherever possible, making proper use of the staff abilities, and
keeping staff personnel appropriately informed.

*****

FUNCTIONAL AUTHORITY:

Functional authority consists of the right to give orders within a segment of

the organization in which this right is normally non existent.

This authority is usually assigned to individuals to complement the line or

staff authority they already possess.

Functional Authority generally covers only specific task areas and is

operational only for designated amounts of time. It is given to individuals
who, in order to meet responsibilities in their own areas, must be able to
exercise some control over organization members in other areas.

Decision Types: 6 Types of Decisions Every Organization Need To Take

Article shared by

The following are the main types of decisions every organization

need to take:
1. Programmed and non-programmed decisions:

Programmed decisions are concerned with the problems of repetitive nature

or routine type matters.

A standard procedure is followed for tackling such problems. These decisions

are taken generally by lower level managers. Decisions of this type may

pertain to e.g. purchase of raw material, granting leave to an employee and

supply of goods and implements to the employees, etc. Non-programmed

decisions relate to difficult situations for which there is no easy solution.

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These matters are very important for the organisation. For example, opening

of a new branch of the organisation or a large number of employees

absenting from the organisation or introducing new product in the market,

etc., are the decisions which are normally taken at the higher level.

2. Routine and strategic decisions:

Routine decisions are related to the general functioning of the organisation.

They do not require much evaluation and analysis and can be taken quickly.

Ample powers are delegated to lower ranks to take these decisions within

the broad policy structure of the organisation.

Strategic decisions are important which affect objectives, organisational

goals and other important policy matters. These decisions usually involve

huge investments or funds. These are non-repetitive in nature and are taken

after careful analysis and evaluation of many alternatives. These decisions

are taken at the higher level of management.

3. Tactical (Policy) and operational decisions:

Decisions pertaining to various policy matters of the organisation are policy

decisions. These are taken by the top management and have long term
impact on the functioning of the concern. For example, decisions regarding

location of plant, volume of production and channels of distribution (Tactical)

policies, etc. are policy decisions. Operating decisions relate to day-to-day

functioning or operations of business. Middle and lower level managers take

these decisions.

An example may be taken to distinguish these decisions. Decisions

concerning payment of bonus to employees are a policy decision. On the

other hand if bonus is to be given to the employees, calculation of bonus in

respect of each employee is an operating decision.

4. Organisational and personal decisions:

When an individual takes decision as an executive in the official capacity, it

is known as organisational decision. If decision is taken by the executive in

the personal capacity (thereby affecting his personal life), it is known as

personal decision.

Sometimes these decisions may affect functioning of the organisation also.

For example, if an executive leaves the organisation, it may affect the

organisation. The authority of taking organizational decisions may be

delegated, whereas personal decisions cannot be delegated.

5. Major and minor decisions:

Another classification of decisions is major and minor. Decision pertaining to

purchase of new factory premises is a major decision. Major decisions are

taken by top management. Purchase of office stationery is a minor decision

which can be taken by office superintendent.

6. Individual and group decisions:

When the decision is taken by a single individual, it is known as individual

decision. Usually routine type decisions are taken by individuals within the

broad policy framework of the organisation.

Group decisions are taken by group of individuals constituted in the form of

a standing committee. Generally very important and pertinent matters for

the organisation are referred to this committee. The main aim in taking

group decisions is the involvement of maximum number of individuals in the

process of decision- making

Delegation of Authority:
Concept of Authority:

Since authority is the crux in distribution of authority. It would be necessary

to understand what the authority is. Authority is the right to do something.

Authority is the power legitimised by organisation which empowers a

manager to make decisions, to use organisational resources, and to monitor

and regulate the behaviour of subordinates for the efficient performance of

assigned work responsibilities. Authority (right do something) is different

from power (ability to do something).

Authority is positional, but power may not be positional. Authority has the

legal power, but power is because of personal influence and resource

fullness. Authority always moves downward, but power can move in any

direction. Authority can be delegated, but not power. Authority commands

fear but power commands respect.

Characteristics of Authority:

(i) It is the right given to the managers.

(ii) The right is vested in position and the manger gets it when he occupies

the position.

(iii) Authority originates at the top and moves downward.

(iv) Authority can be delegated by a superior to his subordinate.

(v) Authority creates superior – subordinate relationship.

(vi) Manager exercises authority to influence subordinates’ behaviour so as

to get the things done.

Types of Authority:

1. Line, staff and functional Authorities:

Line authority contributes directly to attain the goals of an organisation.

Staff authority does not form part of the chain of command and is advisory

in nature. Functional authority is the right to give orders within specific task

areas and is operational only for designated amount of time.

2. Shared Authority and wholesome Authority:

When authority is delegated to two or more persons to solve a common

problem, it is called shared authority. Wholesome authority means giving

authority to one person only to solve the problem.

3. General and specific Authority:

When the authority to perform all the functions in this department or

division subject to overall guidance and control of the superior (like chief

Marketing officer in the Marketing department), it is known as general

authority.
Under a specific authority, a person is given authority regarding specific

function or functions. Specific delegation is functional in nature and is

precise.

4. Formal and informal:

When the authority is delegated according to organisation structure, it is

known as formal delegation. A salesman being granted authority to give

cash discount of 5% on sales by the sales manager is formal authority.

Informal authority is given to short circuit the formal procedure to perform

the task quickly.

5. Charismatic Authority and Positional Authority:

When the rights and power come through the charm and influence of one’s

personality (like Mahatma Gandhi, Napoleon Bonaparte, et al) it is known as

charismatic authority. When the authority is acquired because one is

appointed as a manager, it is positional authority.

6. Written and oral Authority:

When the authority is granted in writing it may be called legal or written

authority. Oral authority is known as traditional authority guided by

traditions and customs.

7. Downward and sideward Authority:

When authority is granted to immediate subordinate it is referred to as

downward delegation. If the authority is given to another official of the same

rank, it is known as sidewalk authority or delegation of authority.

Concept of Delegation of Authority:

Delegation is the process by which a manger assigns or entrusts a part of his

workload to his subordinate (s).

In practice the term delegation is in use for different activities. It is a

programming technique, a TV quiz show (in Ireland), a term in contract law

(giving another person responsibility to carry out the performance agreed to

in a contract), a name of a British funk musical band, and a second level

administrative subdivision of a country (Delegation of Tunisia).

Process / Elements / Steps of Delegation of Authority:

In involves three steps apart from sizing-up of workload by the manager to

decide what is to be assigned to subordinates. First, the manager assigns

the responsibility or work to subordinate to do.

Second, to complete this assignment he grants necessary authority (like to

spend money to get information from confidential files, to use company’s

resources, to liaise with outsiders, to direct others, etc).

Finally, accountability of the subordinate is created towards the manager.

Accountability is an obligation of subordinate to a manager for the use of

authority and performance of assigned work.

Characteristics of Delegation of Authority:

1. It involves transfer not surrendering of authority.

2. It is a process of sharing work, granting authority and creating

accountability.

3. Delegation takes place at all the levels, where superior – subordinate

relationship exists.

4. Delegation is possible only when the delegator has the authority.

5. No delegate is permitted to delegate the granted authority’ further.

6. A manger never gets total authority delegated; otherwise he won’t be a

manger any more.

7. Delegation is not abdication, ultimately the responsibility for proper

discharge of authority and completion of task remains of the manager or

delegator.

8. Authority once delegated can be withdrawn or revoked by the delegator.

Need / Importance / Reasons of Delegation of Authority:

1. Higher Efficiency (A superior being able to concentrate on non-routine

jobs (delegated to subordinates) multipolices his efficiency)

2. Motivation (since delegation indicates confidence of manager, the

subordinate feels self- importance, recognition, etc. he feels motivated)

3. Develops subordinates (Making decisions and solving problems enables

them to develop their managerial skills)

4. Better Distribution of work in the Group (since every employee gets

adequate authority to act, it also leads to prompt decision making)

5. Foundation of Decentralisation (the delegation may be made permanent,

only if it works well temporarily, in the organisation chart).

Effective Communication is significant for managers in the organizations so

as to perform the basic functions of management, i.e., Planning, Organizing,
Leading and Controlling.

Communication helps managers to perform their jobs and responsibilities.

Communication serves as a foundation for planning. All the essential
information must be communicated to the managers who in-turn must
communicate the plans so as to implement them. Organizing also requires
effective communication with others about their job task. Similarly leaders
as managers must communicate effectively with their subordinates so as to
achieve the team goals. Controlling is not possible without written and oral
communication.

Managers devote a great part of their time in communication. They generally

devote approximately 6 hours per day in communicating. They spend great
time on face to face or telephonic communication with their superiors,
subordinates, colleagues, customers or suppliers. Managers also use Written
Communication in form of letters, reports or memos wherever oral
communication is not feasible.

Thus, we can say that “effective communication is a building block of

successful organizations”. In other words, communication acts as
organizational blood.

The importance of communication in an organization can be

summarized as follows:

1. Communication promotes motivation by informing and clarifying the

employees about the task to be done, the manner they are performing
the task, and how to improve their performance if it is not up to the
mark.
2. Communication is a source of information to the organizational
members for decision-making process as it helps identifying and
assessing alternative course of actions.
 3. Communication also plays a crucial role in altering individual’s
attitudes, i.e., a well informed individual will have better attitude than
a less-informed individual. Organizational magazines, journals,
meetings and various other forms of oral and written communication
help in moulding employee’s attitudes.
4. Communication also helps in socializing. In todays life the only
presence of another individual fosters communication. It is also said
that one cannot survive without communication.
5. As discussed earlier, communication also assists in controlling
process. It helps controlling organizational member’s behaviour in
various ways. There are various levels of hierarchy and certain
principles and guidelines that employees must follow in an
organization. They must comply with organizational policies, perform
their job role efficiently and communicate any work problem and
grievance to their superiors. Thus, communication helps in controlling
function of management.

An effective and efficient communication system requires managerial

proficiency in delivering and receiving messages. A manager must discover
various barriers to communication, analyze the reasons for their occurrence
and take preventive steps to avoid those barriers. Thus, the primary
responsibility of a manager is to develop and maintain an effective
communication system in the organization.

Essential Types of Organizational Communication (With Diagram)

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Essential Types of Organizational Communication!

A. Communication According to Organisational Structure:
1. Formal Communication:

Such a communication is that which is associated with the formal

organisation structure and the official status or the position of the

communicator and the receiver. It travels through the formal channels

officially recognised positions in the organisation chart. Formal

communication is mostly in black and white.

Thus, it is a deliberate attempt to regulate the flow of communication so as

to ensure that information flows smoothly, accurately and timely. Formal

communication is a deliberate attempt to regulate the flow of communication

so as to ensure that information flows smoothly, accurately and timely.

We frequently come across the phrase ‘through proper channel’. It

emphasises the essence of formal channel of communication. For example,

when the General Manager issues instructions (because of his senior position

in the organisation), it is formal communication.

The forms of formal communication are as under:

(i) Departmental meetings,

(ii) Conference,

(iii) Telephone calls,

ADVERTISEMENTS:

(iv) Company news bulletins,

(v) Special interviews and special purpose publications and messages.

The main advantage of the formal communication is that the official

channels enable the routine and standardised information to pass without

claiming much of managerial attention. Essentially, executives and

managers may devote most of their precious time on matters of utmost

significance.

But at the same time, the weakness of formal communication should not go

unaccounted. Communication through channel of command greatly obstructs

free and uninterrupted flow of information.

2. Informal Communication:

Informal communication is also known as ‘Grapevine’. It is free from all sorts

of formalities because it is used on informal relationships between the

parties, such as friendship, membership in the same club or association.

Persons at the executive levels also use informal communication when they

find it difficult to collect information from the workers. Such communication

includes comments, suggestions etc. It may be conveyed by a simple glance,

gesture, smile or mere silence.

Managers and executives also favour the growth and development of

informal network of communication off and on. This process, In fact, serves

a very useful purpose in disseminating certain information which, in the

general interest of the organisation, cannot be transmitted through the

official channels.

Apart from that, it also offers the high and higher ups a clearer insight into

what the subordinates think and feel. But at the same time, the weaknesses

of the informal communication are also worth noting. It may be mentioned

that this process very often tends to pass distorted, misinterpreted, and

inaccurate and half- truth information and facts, depending on the

circumstances and the message. But still, executives and managers cannot

do away with informal communication.

B. Communication According to Direction:

1. Downward Communication:

Communication which flows from the superiors to subordinates is referred to

as downward communication. In an organisational structure, the executives

must exercise their powers to achieve the desired objectives which imply

that they may be engaged in issuing orders, instructions and policy

directives to the persons at the lower levels. This may be called downward

communication. Under downward communication, immediate performance of

a job is expected.

Katz And Kahn Have Identified Live Elements of Downward

Communication:

1. Specific task directives; Job instructions.

2. Information designed to produce understanding of the task and its

relation to other organisational tasks; job rationale.

3. Information about organisational procedures and practices.

4. Feedback to the subordinate about his performance.

5. Information of an ideological character to inculcate a sense of mission,

indoctrination of goals.
Communication from superior to subordinate can be face to face as well as

through written memos, orders, job descriptions etc.

2. Upward Communication:

In an upward communication, the persons from the lower level are expected

to have communication with those who are above them. It is just the

reverse of downward communication. This sort of communication includes

reactions and suggestions from workers, their grievances etc. Contents of

upward communication are reports, reaction, suggestion statements and

proposals prepared for the submission to the boss.

Upward Communication can be divided into four categories on the

basis of what employee says:

(i) about himself, his performance and problems,

(ii) about others and their problems,

(iii) about organisational policies and practices, and

(iv) about what needs to be done and how it can be done.

The main features of upward communication are:

(1) it is condensed and summarised as it passes through various levels in

the hierarchy. It gives feedback on the extent of effectiveness of downward

communication. This feedback is used for improving communication

effectiveness.

(2) It provides the management about the viewpoints, reactions, attitudes,

feelings and morale of employees.

(3) It provides means of control.

(4) Finally, it gives information and date for decision making.

Upward communication may get distorted owing to the nature of superior-

subordinate relationships. An employee is not likely to give any information

which may affect him adversely. Moreover, he may transmit wrong

information to impress his superiors. It flows through many media e.g. chain

of command, suggestion boxes, personal contacts, attitude and morale

surveys, grievance procedure, private lines, labour unions etc.

3. Horizontal Communication:

When the communication takes place between two or more persons who are

subordinates of the same person or those who are working on the same

level of organisation, the communication is known as horizontal (lateral)

communication.

The communication between functional managers or among subordinates

working under one boss, the communication between managers of various

factories is the examples of such communication. Horizontal communication

may be oral as well as written.

Horizontal Communication satisfies peoples’ needs to know from their own

peers without taking into account other levels in the organisation. It is really

difficult for an organisation to function efficiently without such horizontal

communication flows. Although the formal organisation design does not

provide for such communication flows, it is needed for the coordination and

integration of diverse organizational functions.

Since organizational horizontal communication ordinarily do not exist in

facilitation is left to individual managers. Peer to peer communication

necessary for co-ordination and can also provide social need satisfaction.

C. According to Way of Expression:

1. Oral or Verbal Communication:

Oral communication is a direct communication between two individuals. In

oral communication both the parties i.e., sender and receiver exchange their

ideas through oral words either in face to face conversation or through any
mechanical or electrical device such as telephone, teleconference etc. When

it is face to face, the person communicating can ask questions or

explanations or sometimes when the communication is not properly

understood, he can clarify meaning.

Oral communication is generally possible where there can be either a direct

contact or message to be conveyed is not of permanent nature. Meetings

and conferences, lectures and interviews are other media of such

communication.

Oral communication enjoys certain advantages communication

which may be enumerated as follows:

(i) Oral communication has the distinct advantage of being quick and

prompt. It provides the opportunity to both the transmitter and receiver of

the message to respond directly.

(ii) Oral communication facilitates close contact and thus fosters mutual

exchange of ideas, facts, understanding and cooperation.

(iii) Oral communication through direct contact undoubtedly inculcates in the

subordinates a sense of self-importance which in turn acts as a motivating

factor.

(iv) Oral communication further enables the superior to make a quick

appraisal of subordinate’s action and reaction to any message transmitted.

This obviously helps the superior to minimise and avert conflicts, redesign

plans and programmes according to the need of time and circumstances.

(v) The personality of the communicator is brought to bear in the

communication process. This has good effect on the subordinates and they

understand the communication properly.

(vi) It can bring a friendly and co-operative team spirit.

However, the following are the disadvantages of the oral communication:

(i) There is a possibility that the spoken words may not be clearly heard or

understood.

(ii) It is not good for lengthy communications.

(iii) It requires the art of expressing accurately and appropriately, and listen

to others emphatically.

(iv) It is inadequate where specific performance of policies and rules is

needed.

(v) The inexperienced subordinates do not follow the facial expressions and

the tone of manager’s voice.

2. Written Communication:

When the communication is reduced to black and white (writing), it is called

written communication. This includes written words, graphs, diagrams,

pictures, etc. Written communications are extensively used in organisations.

Sometimes, this form of communication becomes indispensible as in the

case of rules, orders, schedules or policy matters etc. The circulars,

magazines, notes and manuals are some common forms of written

communication.

It may be asserted from general observations that in all types of

organisations both oral and written communication is in practice. Which form

should be used and applied? Much depends on the message, its importance

to receiver, and implication to functional aspects of the organisation.

Communication Flows in an Organization

In an organization, communication flows in 5 main directions-

1. Downward
2. Upward
3. Lateral
4. Diagonal
5. External

1. Downward Flow of Communication: Communication that flows

from a higher level in an organization to a lower level is a downward
communication. In other words, communication from superiors to
subordinates in a chain of command is a downward communication.
This communication flow is used by the managers to transmit work-
related information to the employees at lower levels. Employees
require this information for performing their jobs and for meeting the
expectations of their managers. Downward communication is used by
the managers for the following purposes -

Providing feedback on employees performance

 Giving job instructions

Providing a complete understanding of the employees job as well

as to communicate them how their job is related to other jobs in
the organization.

Communicating the organizations mission and vision to the

employees.

Highlighting the areas of attention.

Organizational publications, circulars, letter to employees, group

meetings etc are all examples of downward communication. In order
to have effective and error-free downward communication, managers
must:

 Specify communication objective

 Ensure that the message is accurate, specific and unambiguous.
 Utilize the best communication technique to convey the
message to the receiver in right form

2. Upward Flow of Communication: Communication that flows to a

higher level in an organization is called upward communication. It
provides feedback on how well the organization is functioning. The
subordinates use upward communication to convey their problems and
performances to their superiors.

The subordinates also use upward communication to tell how well they
have understood the downward communication. It can also be used by
the employees to share their views and ideas and to participate in the
decision-making process.

Upward communication leads to a more committed and loyal workforce

in an organization because the employees are given a chance to raise
and speak dissatisfaction issues to the higher levels. The managers get
to know about the employees feelings towards their jobs, peers,
supervisor and organization in general. Managers can thus accordingly
take actions for improving things.

Grievance Redressal System, Complaint and Suggestion Box, Job

Satisfaction surveys etc all help in improving upward communication.
Other examples of Upward Communication are -performance reports
made by low level management for reviewing by higher level
 management, employee attitude surveys, letters from employees,
employee-manager discussions etc.

3. Lateral / Horizontal Communication: Communication that takes

place at same levels of hierarchy in an organization is called lateral
communication, i.e., communication between peers, between
managers at same levels or between any horizontally equivalent
organizational member. The advantages of horizontal communication
are as follows:

It is time saving.

It facilitates co-ordination of the task.

It facilitates co-operation among team members.

It provides emotional and social assistance to the organizational

members.

It helps in solving various organizational problems.

It is a means of information sharing

It can also be used for resolving conflicts of a department with other

department or conflicts within a department.

4. Diagonal Communication: Communication that takes place between

a manager and employees of other workgroups is called diagonal
communication. It generally does not appear on organizational chart.
For instance - To design a training module a training manager
interacts with an Operations personnel to enquire about the way they
perform their task.
5. External Communication: Communication that takes place between
a manager and external groups such as - suppliers, vendors, banks,
financial institutes etc. For instance - To raise capital the Managing
director would interact with the Bank Manager.

POLICY AND GOVERNANCE

The role of policy

The role of policy in an organisation is to:

1. Provide general guidance about the organisation's mission

2. Provide specific guidance toward implementing strategies to achieve
the organisation's mission
3. Provide a mechanism to control the behaviour of the organisation

Examples of policy

Provide general  A policy that limits the industries in which the

guidance about
the organisation' organisation will operate
s mission  A policy about the geographical region in which
the organisation will operate
 A policy about the general nature of the business
i.e. profit making, non-profit making, community
recreation or elite sport
 A policy about affiliations with other organisations
i.e. affiliation with a national body or a peak
industry body

Provide specific  A policy for athlete development

guidance toward  A policy for recruiting, training and utilising
implementing volunteers
strategies to
 A policy for employing staff
achieve the
 A policy for opening hours of a facility
organisation's
 A policy for promoting and staging events
mission
 A policy for doping control

Provide a  A policy for the inclusion of people with

mechanism to disabilities
control the  A policy that sets up judiciaries or disciplinary
behaviour of the
 organisation hearings
 A policy that regulates the election of office-
bearers
An organisation’s decisions should be based on its established policies.
Policies are the collective voice of the governing body. This means the
decisions made by the governing body are policy decisions—they set the
direction for the organisation to follow.

6.4.1 What are policies?

Definition: Policies are the big-picture guidelines that set out, in clear
language, what an organisation wants to achieve (such as its long-term
vision and goals) and the performance standards and outcomes expected.
They provide the overarching framework under which procedures are then
designed to get those big-picture things done.
In any organisation, some policies specifically focus on governance; others
address operational, administrative and HR matters.
But whatever the type, in all cases, the final policies must be formally
approved by the governing body.
Only decisions made by the governing body as a whole are binding.
Put simply, the governing body develops policy and management
implements it.

Tips: Understanding different types of policy

There are two broad types of policies: governance and operational
Governance policies are made by the governing body. They cover:
 the governing body’s accountabilities, attendance, codes of conduct,
commitments, conflict of interest, decision making, governance values,
leadership, roles and responsibilities, and a range of related cultural
matters.
 They also include policies on the governing body’s relationship with the
top manager and staff, its nation and community members, its financial
commitments and its ethics.
Operational policies are usually drafted by the top manager to apply to the
administration and daily management of the organisation. They include:
 policies on complaints procedures, diversity and harassment,
employment, HR and managing staff.
 The top manager initially develops and oversees these policies, but the
governing body will also be involved and finally approve them, often at
its meetings when discussing communication with members, dispute
resolution and cultural leave issues.

6.4.2 The benefits of governance policies

Policies are the ‘bread and butter’ standards that help to ensure consistency
and accountability.

What do policies do?

Decisions should be based on established policies. See above diagram.

They:
 serve as a tool of governing control
 act as frameworks for future direction and strategy implementation
 set boundaries, constraints and limits on action
 reward and sanction behaviour
 indicate what staff can expect
 reduce the chance of inconsistent, unfair or erratic decision making
 enable reliable delegation of powers to management and staff.
If the governing body is not developing and enforcing policies, it is not doing
its job for the organisation.
A well-developed governance framework (documented in a written policy
manual) benefits the nation and community, as well as the organisation.

6.4.3 Your governance policies

The governing body has responsibility for developing a set of governance

and leadership policies. These set out how it will conduct its business and
oversee the proper operation of the organisation.

Key Governance Policies

 Vision, purpose and goals

Planning  Guidelines for making policies
 Guidelines for planning

 Making decisions
 Representation rules and responsibilities
Leading  Codes of conduct
 Conflict of interest
 Relationships with members and community
 Succession planning and mentoring

 Organisational standards
 Meetings and committees
 Separation of power between board and CEO
Organising  Relationship between board and CEO
 Relationship with staff
 Board self-evaluation and how it develops governance
 Professional development and training
 Dispute resolution and appeals

 Corporate governance
 Risk management
Controlling  Managing finances
 Accountability
 Performance appraisal of CEO
They should cover these areas: Planning, Leading, Organising and
controlling.

Check-up: Our governance policies and rules

PDFView/download

Do you have all the policies, rules and procedures in place for your
organisation to run well? Use this check-up to find out.

6.4.4 Making and reviewing policies

Policy-making is a skill that can be learned.

Organisations should include practical sessions in inductions and governance
training for board members on how to make policies, and how to then work
with their top manager to ensure the organisation follows those policies.
Policies need to be workable and fair, and easily understood.
While the governing body has responsibility for making and adopting
policies, the policies won’t be supported if:
 community and staff members do not understand them
 they have not been consulted or had the chance to contribute to them
 the policies do not reflect broadly held values.
Every community and organisation has its own ways of developing policies
and focuses on issues that matter most to them. But there are some
common steps you can follow.
It is important to write down your policies and other rules and make sure
copies are always accessible. It may also be useful to translate your rules
into language and visual formats.

What can we do? Steps to develop effective policies

PDFView/download
 Every community and organisation has its own ways of developing
governance policies, focusing on issues that matter most to them. But
there are some common steps you can follow. These apply to policy-
making in general, not just to governance policies.

Tips: Making and reviewing policies

A policy usually contains:
 A purpose statement. This outlines why the organisation is issuing the
policy and what it should achieve.
 An applicability and scope statement. This describes who the policy
affects and what will be affected by the policy. This statement may
include or exclude certain people, organisations, behaviours or activities
from the policy requirements.
 An effective date. This states when the policy begins.
 A policy statement. This sets out the specific guideline, regulation,
requirement, or modification to people’s and organisational behaviour
that the policy is trying to encourage.
 A review and evaluation statement. This explains when and how the
policy will be assessed.
 A complaints statement. This sets out the process for how complaints
about the content of the policy will be handled, its implementation or
impact.
 A communications statement. This talks about how the policy will be
communicated to staff, members, the wider community.
 A roles and responsibilities section. This states which people or sections
of the organisation are responsible for carrying out particular parts.
 A definitions section. This provides clear meanings for terms and
concepts.
 A cultural issues statement. Many Indigenous governance policies contain
extra sections setting out cultural issues, goals, values and traditions
that the policy recognises and is supporting, protecting, regulating or
limiting.
To increase the effectiveness and legitimacy of policies, many Indigenous
organisations are also including a cultural enforcement statement in their
policies. This sets out practical processes and mechanisms that the
governing body has identified as something that might help the governing
body, management and staff to implement the policy in the face of
challenging cultural pressures.

Template: A policy
DOCXView/download

This policy template shows how all the information that needs to be
contained in a policy can be set out. You can use and adapt it to create
your own organisation’s policies.
Communities and organisations often change. That means governance
policies and other rules sometimes need to be assessed, evaluated and
changed to make sure they continue to be relevant.
Governing bodies should discuss the policy implications of their decisions at
their meetings, and periodically review their written policies.
This allows policies to stay current and adapt to changes within the wider
community and organisation.
A major policy review process should include wide consultation (especially
with members and other people affected by it), giving everyone the chance
to provide feedback.

6.4.5 Create a governance policy manual

When a footy player breaks a rule, there are referees and coaches to pull
them up; they might even have to go before the tribunal and be punished.
They can’t plead ignorance—all the rules and policies for how they play and
train are written down in the game’s rule book and in their club’s policies.
It should be the same for your governance policies and rules.
They need to be written down and pulled together in one place—a
governance policy manual—where everyone can get hold of them, read them
and check them.
Your manual doesn’t need to be complicated or full of technical jargon.
It should be written in plain language so that people on the governing body
—and in the nation, community, and organisation—can understand it.
A simple list of contents for a governance reference manual is
provided below. It will give you some ideas of the kinds of policy areas to
include in your governance policy manual.

PURPOSE AND VALUE

All business organizations should have written goals that are part of their
business plan. These goals can describe what the company plans to
accomplish in terms of market share, growth and profitability. Goals may
also be set for internal measurement like expanding staff or boosting
employee morale. Businesses should aim to have goals that are specific,
measurable, attainable, relevant and timely. There are many benefits to
setting goals.
When organizations set goals for employees, it shows employees the
organization's priorities. Employees then know what to focus on
in the coming quarter or year, thus prioritizing projects and other tasks as
they weigh how their work will impact those goals. It also provides focus for
management when deciding on major projects and how to best divide tasks
among employees.
Increases Motivation
Organizational goals give employees something to strive for in their daily
tasks. For example, instead of merely aiming for general profitability,
employees can work to improve profitability 10 percent by year-end. Most
people strive to be successful, but having a specific standard that constitutes
success will especially motivate them to strive for excellence. If goals are
tied to other external awards, such as group recognition or rewards, it can
further improve the motivation level.
Improves Group Cohesion
Many business goals cannot be reached unless employees of all levels work
together as a whole to reach the goals. This can improve group cohesion and
collaboration when employees realize the goals will only be reached when
teamwork is present. Managers can further enforce this through group
rewards given when the organization meets its goals.
Increases Employee Worth
Including employees in the goal-setting process will increase their buy-in for
the project and the business as a whole. It tells them their input is valued
and important, thus giving them a sense of ownership. Consequently, the
goals are no longer only management's; they are the goals of
everyone in the organization.
Offers Measurability
Set goals using the SMART principle: specific, measurable, attainable,
relevant and timely. This will enable employees to gauge their progress, see
how their efforts are having an impact and assess how far they have yet to
go to reach the goal.
Types of values

We can speak of universal values, because ever since human beings have
lived in community, they have had to establish principles to guide their
behavior towards others.

In this sense, honesty, responsibility, truth, solidarity, cooperation,

tolerance, respect and peace, among others, are considered universal
values.

However, in order to understand them better, it is useful to classify values

according to the following criteria:

• Personal values:
These are considered essential principles on which we build our life and
guide us to relate with other people. They are usually a blend of family
values and social-cultural values, together with our own individual ones,
according to our experiences.

• Family values:
These are valued in a family and iare considered either good or bad. These
derive from the fundamental beliefs of the parents, who use them to educate
their children. They are the basic principles and guidelines of our initial
behavior in society, and are conveyed through our behaviors in the family,
from the simplest to the most complex.

• Social-cultural values:
These are the prevailing values of our society, which change with time, and
either coincide or not with our family or personal values. They constitute a
complex mix of different values, and at times they contradict one another, or
pose a dilemma.

For example, if work isn’t valued socially as a means of personal fulfillment,

then the society is indirectly fostering “anti-values” like dishonesty,
irresponsibility, or crime.

Another example of the dilemmas that social-cultural values may pose is

when they promote the idea that “the end justifies the means”. With this as
a pretext, terrorists and arbitrary rulers justify violence, intolerance, and lies
while claiming that their true goal is peace.

• Material values:
These values allow us to survive, and are related to our basic needs as
human beings, such as food and clothing and protection from the
environment. They are fundamental needs, part of the complex web that is
created between personal, family and social-cultural values. If exaggerated,
material values can be in contradiction with spiritual values.

• Spiritual values:
They refer to the importance we give to non-material aspects in our lives.
They are part of our human needs and allow us to feel fulfilled. They add
meaning and foundation to our life, as do religious beliefs.

• Moral values:
The attitudes and behaviors that a society considers essential for
coexistence, order, and general well being.

MEETINGS RHYTHM AND COORDINATION

Identify your meeting type to plan for success

The first step towards planning a meeting is defining what type of meeting it
is. While every meeting is unique, being familiar with the six most common
types of meetings will help you better identify the goals, structure, and
activities best suited for your meetings.

Meetings represent a huge value to both companies and employees.

The six general types of meetings:
 Status Update Meetings
 Information Sharing Meetings
 Decision Making Meetings
  Problem Solving Meetings
 Innovation Meetings
 Team Building Meetings

Here is a break-down of the six general types of meetings with examples of

the main activities involve in each type. Knowing what type of meeting you
are planning will increase the success of your meeting.

Meeting Type 1: Status Update Meetings

Status update meetings is one of the most common meeting types. This
category includes regular team and project meetings, where the primary
goal is to align the team via updates on progress, challenges, and next
steps. Commonly found group activities in these kinds of meetings are
problem solving, decision making, prioritization, and task assignment.
Check out our post about how to run status update meetings.
Meeting Type 2: Information Sharing Meetings
Presentations, panel debates, keynotes, and lectures are all examples of
information sharing meetings. The primary goal of these meeting is for the
speakers to share information with the attendees. This could be information
about things like upcoming changes, new products and techniques, or in
depth knowledge of a domain. Visual communication tools, like slides and
videos, are powerful tools for making the shared information more
memorable.

At information sharing meetings the attendees have historically been passive

listeners. With new technologies like MeetingSift they can use their smart
devices to go from passive spectators to active participants, making the
meeting more engaging and enjoyable for all.

Check out our post about how to run information sharing meetings.
Meeting Type 3: Decision Making Meetings
The vast majority of business decisions are made by groups in
meetings. While small decisions are made in all kinds of meetings, the more
important decisions often get their own dedicated meetings. There
are different types of group decision making processes, and care should be
taken to choose a process that best matches the situation. A decision
making process can include group processes like information gathering and
sharing, brainstorming solutions, evaluating options, ranking preferences,
and voting.
Check out our post about how to run decision making meetings.
Meeting Type 4: Problem Solving Meetings
Problem solving meetings are perhaps the most complex and varied type of
meetings. Whether the meeting is addressing an identified problem, or it is
focusing on creating strategies and plans to navigate the future, there are a
rich arsenal of group processes that can be used. Scopes and priorities need
 to be defined, opportunities and threats need to be identified, and
possible solutions should be brainstormed, evaluated, and agreed upon.
Check out our post about how to run problem sharing meetings.
Meeting Type 5: Innovation Meetings
Innovation meetings and creative meetings often start with thinking outside
the box, by brainstorming, associating, and sharing ideas in a broad scope.
Meeting participants can then use various techniques and processes to
reduce the diverse pool of ideas to a more focused short list. Through
ranking, evaluations, and decision making the most suitable idea, or ideas,
are identified, and recommendations and tasks can be assigned based on
this.
Check out our post about how to run innovation sharing meetings.
Meeting Type 6: Team Building Meetings
All meetings should contribute to team building, strengthening relationships
and corporate culture. However, now and then team building
activities should be the main focus for a meeting. This category include
meetings like include all-hands meetings, kick-off meetings, team building
outings, and corporate events. Have participants feel like essential parts
of their unit, team, department, branch, and company has all kinds of
positive impact on their engagement, performance, and satisfaction.

The Purpose of Meetings

Meetings are an important organisational tool as they can be used
to:

 Pool and develop ideas

 Plan
 Solve problems
 Make decisions
 Create and develop understanding
 Encourage enthusiasm and initiative
 Provide a sense of direction
 Create a common purpose

Operating Rhythm can be defined as a set of pre-defined process of

communication and interactions that should be present between different

departments to ensure that the flow of operations is not interrupted and is

controlled as intended. It provides a structured way of communication

through which the stakeholders communicate to the project team/operations

and vice versa on items like roles, milestones, outcomes, targets and so on

that is aligned to the organization’s vision.

Each organization has a vision based on which the Business Strategy Plans

are prepared. These Plans have to be communicated and reviewed at a

defined frequency to ensure that the Plans are being achieved without any

bottlenecks. For this an organization has to identify the applicable KPIs

linked with the Plans. Once the KPIs are defined, these have to be

communicated to all the stakeholders and a review plan defined at regular

intervals.

The reviews and interviews should be defined such that all the relevant

points are discussed and any bottlenecks cleared giving a beneficial stand to

these reviews and meetings. A strong emphasis should be laid on

communicating the right information which is crucial in proper Operating

Rhythm followed by review meetings which should be effective and efficient.

Why is Operating Rhythm needed?

Why can’t normal communication plan be enough?

Remember, Operating Rhythm is not a separate process or method. It is a

state that the organization’s management and communication team should

attain in order to ensure smooth, seamless operations enabled by timely and

effective communication. While a normal communication plan targets only

passing of information without any clear KPIs or reviews and can therefore

not good enough to achieve the Planned Business Strategy of an

Organization.

Be it a manufacturing industry or a service sector, the role of communication

is very crucial in not only in management of its day-to-day operations but

also for strategy planning. In today’s scenario, where company’s operations

and teams are spread across the globe, Operating Rhythm is a must for

every organization that wants to achieve operational excellence, increase

process efficiency and reduce cost and time.

Gone are the days when the company had one Operations team and other

support teams. Today each team has a business process, and every team is

treated like it runs its own operation that adds value to the entire

organizational objective. Adding to the changes, are the outsourcing and off-

shoring business models, where a part of the operations are performed by

vendors and partners operating from different parts of the globe, in different

time zones and with different organizational objectives.

In such a scenario, achieving organizational effectiveness, product/process

compliance, increase efficiency of operations is very critical. Operating

Rhythm is a guideline that helps you in achieving all of the above in a simple

and effective manner.

How can Operating Rhythm be achieved?

To achieve Operating Rhythm one needs to ensure the below:

1. Identify Business Needs / KPIs

2. Identify the stakeholders and their needs.
3. Map the needs of the business and process to specific KPIs defined by
the organization.
4. Plan who, how and when the KPIs should be captured and recorded?
5. Define Operating Mechanism
6. Define the tasks to be performed
7. Define the ownership and process of collecting data
8. Define how and through what mode the communication will be shared
with the stakeholders.
9. Define Review and Feedback Mechanism
10. Define the review items, frequency for Meetings
11. Define the Process of CAPA and decision making on the basis of
performance of metrics.
12. Identify the owners for action items and time line for process
correction.
Figure 1: Achieving Operating Rhythm
The above points and picture gives a broad idea on what needs to be done

to achieve Operating Rhythm.

How does Operating Rhythm help an Organization?

The below are the results of achieving Operating Rhythm:

1. In the process of achieving Operating Rhythm, an organization devises

a Predefined communication plan that simplifies the job of Execution
team. It ensures that all necessary information are communicated,
tracked in a timely and orderly fashion. This helps to stream line the
information flow within and outside the organization.
2. Also, a Clear ownership on tasks that should be performed by each
individual and the process to be followed for it are established. This
reduces confusions among employees on who needs to deliver what,
when and how.
3. A well planned Metric collection and monitoring system is devised
which reduces the complexity of collecting ad-hoc data and analysis
process. Also, it eliminates the variation in the approach for metric
calculations. It standardizes the entire KPI measurement process.
4. It reduces time and effort spent on unnecessary meetings and Review
items. The core purpose of Meetings and Reviews are to assess the
performance of KPIs and set mid-term corrective actions and to issue
directions on Change management activities (if any). By streamlining
the review process and objectives, the time and effort spent by
management and other key personnel are saved, which can be used
for other useful processes and activities.
5. Operating Rhythm ensures timely and Proper Information flow across
the organization which creates and optimizes Value flow. Timely and
accurate Information is Value in any business.
6. By streamlining the Communication flow and ownership of tasks, it
eliminates follow-ups and Reminders for all the process, which is a
major bottleneck in any organization.
Thus, Operating Rhythm amidst other management methodologies and

initiatives is a major requirement for success of any business regardless of

the nature and size of an organization.

What Are the Different Ways to Collaborate? In the nonprofit sector there
are various forms of collaboration, ranging in formality, actors and purposes.
Some of the most common types of collaboration include networks,
coalitions, movements, strategic alliances, strategic co-funding, public
private partnerships and collective impact initiatives. It can sometimes be
difficult to differentiate among them and know which might be the best fit
for certain situations. This piece defines these forms and offers guidance for
grantmakers on when to use each, along with examples and considerations.
While not an exhaustive list, the following table breaks down some of the
most common forms of collaboration in the nonprofit sector and provides
guidance on when to use it, examples and considerations. It is important to
note that these types of collaboration are not mutually exclusive — a
collaborative effort may include two or more types at once. Also, each of
these entails some level of formality, although the degree of formality
varies. Usually, less formal collaborations, partnerships and/or intentional
relationship building are important precursors to more sustained forms of
collaboration to build a baseline of trust and common understanding.
Common Types of Collaboration Some of the most common types of
collaboration, listed in level of formality from low to high and with
definitions, are as follows: • Networks: People connected by relationships,
which can take on a variety of forms, both formal and informal. 1 o
Example: Barr Fellows Program • Coalitions: Organizations whose members
commit to an agreed-on purpose and shared decision making to influence an
external institution or target, while each member organization maintains its
own autonomy.2 1 For more about different types of networks, see
Catalyzing Networks for Social Change: A Funder’s Guide, by Diana Scearce
(Washington, D.C.: GEO and Monitor Institute, 2011). 2 TCC Group, “What
Makes an Effective Coalition?,” 2011. Grantmakers for Effective
Organizations | 2 o Example: Conservation Alliance for Seafood Solutions •
Movements: Collective action with a common frame and long-term vision for
social change, characterized by grassroots mobilization that works to
address a power imbalance. o Example: Caring Across Generations •
Strategic Alliances: Partnership among organizations working in pursuit of a
common goal while maintaining organizational independence. This could
mean aligning programs or administrative functions or adopting
complementary strategies.3 o Example: Arts + Response • Strategic Co-
Funding: Partnership among organizations that work in pursuit of a common
goal. This could mean aligning programs or administrative functions or
adopting complementary strategies. o Example: Home for Good • Public-
Private Partnerships: Partnerships formed between government and private
sector organizations to deliver specific services or benefits. o Example:
Cambridge Energy Alliance • Collective Impact Initiatives: Long-term
commitments by a group of important actors from different sectors to a
 common agenda for solving a specific social problem.4 o Example: Shape Up
Sommerville

STRATEGY AND INNOVATION

Different Types of Business Strategies

by Rick Suttle

Related Articles
 1Five Types of Business-Level Strategies
 2Growth Strategies in Business
 3The Five Stages of the Strategic Management Process
 4Four Generic Strategies That Strategic Business Units Use
A small company can use a number of business strategies, depending on its
situation. For example, new companies may face different challenges than
companies that are more established. Therefore, the business strategies
they implement may be different from those of key competitors. Four types
of business strategies include the growth, product differentiation, price
skimming and acquisition strategy.
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Growth Strategy
A growth strategy entails introducing new products or adding new features
to existing products. Sometimes, a small company may be forced to modify
or increase its product line to keep up with competitors. Otherwise,
customers may start using the new technology of a competitive company.
For example, cell phone companies are constantly adding new features or
discovering new technology. Cell phone companies that do not keep up with
consumer demand will not stay in business very long. A small company may
also adopt a growth strategy by finding a new market for its products.
Sometimes, companies find new markets for their products by accident. For
example, a small consumer soap manufacturer may discover through
marketing research that industrial workers like its products. Hence, in
addition to selling soap in retail stores, the company could package the soap
in larger containers for factory and plant workers.
Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they
have a competitive advantage, such as superior quality or service. For
example, a small manufacturer or air purifiers may set themselves apart
from competitors with their superior engineering design. Obviously,
companies use a product differentiation strategy to set themselves apart
from key competitors. However, a product differentiation strategy can also
help a company build brand loyalty, according to the article "Porter's Generic
Strategies" at QuickMBA.com.
Price-Skimming Strategy
A price-skimming strategy involves charging high prices for a product,
particularly during the introductory phase. A small company will use a price-
skimming strategy to quickly recover its production and advertising costs.
However, there must be something special about the product for consumers
to pay the exorbitant price. An example would be the introduction of a new
technology. A small company may be the first to introduce a new type of
solar panel. Because the company is the only one selling the product,
customers that really want the solar panels may pay the higher price. One
disadvantage of a price-skimming is that it tends to attract competition
relatively quickly, according to the Small Business Administration.
Enterprising individuals may see the profits the company is reaping and
produce their own products, provided they have the technological know-how.
Acquisition Strategy
A small company with extra capital may use an acquisition strategy to gain a
competitive advantage. An acquisition strategy entails purchasing another
company, or one or more product lines of that company. For example, a
small grocery retailer on the east coast may purchase a comparable grocery
chain in the Midwest to expand its operations.

Types of Innovation
JUNE 29, 2015 BY JORGE LOPEZ 2 COMMENTS
It is remarkable how many people are under the false assumption that
companies are either innovative or not. This is a very polarizing and
simplistic perspective that does not take into account the different types of
innovations that companies can and do pursue.

For this post, let’s break down innovation into two dimensions: Technology
and Market, which gives us the following 4 types of innovation:

Incremental Innovation

Incremental Innovation is the most common form of innovation. It utilizes

your existing technology and increases value to the customer (features,
design changes, etc.) within your existing market. Almost all companies
engage in incremental innovation in one form or another.

Examples include adding new features to existing products or services or

even removing features (value through simplification). Even small updates
to user experience can add value, for example below is an older version of
Constant Contact’s email schedule page:
There is nothing majorly wrong with this page, however it is easy to see that
the page title is “Schedule”, yet there are no schedule settings anywhere to
be seen. In fact, in this version, you have to click on the yellow schedule
button on the upper right-hand corner to actually pop up the schedule
settings. In addition, there is a huge empty space on the right side of the
page that does not contribute much value to the user. Below is a more
current version of the same page:
This updated version replaces the “Schedule” title with the title of the email
campaign. This makes it easier for the user to see which campaign they are
working on. Actual schedule settings have replaced the awfully huge empty
space on the right-hand side, which makes it possible for the big yellow
“Schedule” button to actually schedule. Also, larger sized form fields have
been introduced to allow easy clicking on those elements. All these changes,
which may seem as just updates, are actually small incremental changes
focused on adding more value to an existing product. They will prove to be
incrementally innovative if customers have a better experience with the
product and are able to schedule email campaigns much easier.

Disruptive Innovation

Disruptive innovation, also known as stealth innovation, involves applying

new technology or processes to your company’s current market. It is
stealthy in nature since newer tech will often be inferior to existing market
technology. This newer technology is often more expensive, has fewer
features, is harder to use, and is not as aesthetically pleasing. It is only
after a few iterations that the newer tech surpasses the old and disrupts all
existing companies. By then, it might be too late for the established
companies to quickly compete with the newer technology.
There are quite a few examples of disruptive innovation, one of the more
prominent being Apple’s iPhone disruption of the mobile phone market.
Prior to the iPhone, most popular phones relied on buttons, keypads or scroll
wheels for user input. The iPhone was the result of a technological
movement that was years in making, mostly iterated by Palm Treo phones
and personal digital assistants (PDAs). Frequently you will find that it is not
the first mover who ends up disrupting the existing market. In order to
disrupt the mobile phone market, Apple had to cobble together an amazing
touch screen that had a simple to use interface, and provide users access to
a large assortment of built-in and third-party mobile applications.

Architectural Innovation

Architectural innovation is simply taking the lessons, skills and overall

technology and applying them within a different market. This innovation is
amazing at increasing new customers as long as the new market is
receptive. Most of the time, the risk involved in architectural innovation is
low due to the reliance and reintroduction of proven technology. Though
most of the time it requires tweaking to match the requirements of the new
market.

In 1966, NASA’s Ames Research Center attempted to improve the safety of

aircraft cushions. They succeeded by creating a new type of foam, which
reacts to the pressure applied to it, yet magically forms back to its original
shape. Originally it was commercially marketed as medical equipment
table pads and sports equipment, before having larger success as use in
mattresses. This “slow spring back foam” technology falls under
architectural innovation. It is commonly known as memory foam.

Radical innovation

Radical innovation is what we think of mostly when considering innovation.

It gives birth to new industries (or swallows existing ones) and involves
creating revolutionary technology. The airplane, for example, was not the
first mode of transportation, but it is revolutionary as it allowed
commercialized air travel to develop and prosper.

The four different types of innovation mentioned here – Incremental,

Disruptive, Architectural and Radical – help illustrate the various ways that
companies can innovate. There are more ways to innovate than these
four. The important thing is to find the type(s) that suit your company and
turn those into success.

Definition of Resource Allocation

Resource allocation is a process and strategy involving a company
deciding where scarce resources should be used in the production of goods
or services. A resource can be considered any factor of production, which is
something used to produce goods or services. Resources include such things
as labor, real estate, machinery, tools and equipment, technology, and
natural resources, as well as financial resources, such as money.

Method of Resource Allocation

In an economist's perfect world, which doesn't exist, of course, resources
are optimally allocated when they are used to produce goods and services
that match consumers' needs and wants at the lowest possible cost of
production. Efficiency of production means fewer resources are expended
in producing goods and services, which allows resources to be used for other
economic activities, such as further production, savings, and investment.
This basically boils down to creating what customers want as cheaply and
efficiently as possible.
TYPES OF RESOURCE ALLOCATION

We can begin by defining resource allocation. In a broad sense, it can be

defined as how things can be distributed. This may include credit, blame,
responsibility, money, time, and the like. In the science and engineering this
translates to: money, consumables, time, space, and services. Naturally
there needs to be a "fair" way to distribute these resources. This section
outlines way to distribute these resources.

Allocation by Merit

 This can be seen as a rewards system of sorts. This view suggests that
rewards should be distributed according to productivity, effort, or
demonstrated ability.
o In the work place, this can be seen as salary increases,
promotions, and even layoffs.
o In the college environment, this can be seen as the distribution
of grades. As not everyone can receive an A for classes, the
grades need to be distributed reflecting a students
understanding of the subject.

In aspects where a necessity is involved, such as food, shelter, and

water, this system breaks down. In impoverished countries, for
example, few would argue for denying children food because they are
not as productive as adults.
Allocation by Social Worth

 Allocation by social worth tends to take a practical view toward

resources, directing them toward those who appear most likely to
contribute to the common good. This view suggests that resources
should move in directions that ultimately do the greatest good for the
largest number of people. Criteria for social worth can include age,
seniority, rank, and expertise.
o In the work place, this can be seen as layoffs. Generally
speaking, a senior worker will not be fired over a new worker.
o In the college environment, this can be seen as the distribution
of money to labs. Labs for graduate students and upperclassmen
tend to be better than freshman labs.

Allocation by social worth breaks down when the criteria for worth
ignores basic human rights. For example, wealth is sometimes used to
measure social worth, especially in countries with market economies.
This attitude can cause food, energy, education, medical attention, and
social influence to "flow uphill," thereby making severe imbalances in
essential resources even worse.

Allocation by Need

 Allocation by need tends to view resources in terms of basic human

rights. This view suggests that every person has the same right to
some minimal level of a given resource. Obvious examples include
food, shelter, and clothes.
o In the work place, this can be seen when a company diverts
funds to a division in that company who's equipment is outdated.
o In the college environment, this can be seen as scholarships
given to students who otherwise would not be able to attend
college.

Allocation by need breaks down when this criterion is applied so

strictly that it removes the incentive to produce. It's usually true that
people work hardest when they believe they will enjoy the fruits of
their labors. This is also the same reason why socialism doesn't work.

Allocation by Equal or Random Assignment

 Allocation by equal or random assignment takes the view that no

rational, unbiased way can be found to distribute resources. This is the
default allocation method when no other allocation method works.
 o The most obvious example of this is a lottery. When there is no
obvious way to distribute resources, a simple lottery can prove
to be the "fairest" way.

Allocation by random assignment breaks down when each portion of a

resource is simply to small to do any good. For example, dividing
antibiotics into small doses during an epidemic could make each dose
so small that no one benefits.

No simple rules for allocation can guarantee fairness under all

circumstances. The ultimate decision depends heavily on exactly what needs
to be distributed and on the specific details of each situation.
The Candy case study is a perfect example of resource allocation.

The Four Types of Target Marketing

by Jonathan Lister

Target marketing for your small business is the product of extensive

research into your consumer base and the needs of the local market. There
are several types of target marketing your company may take advantage of
depending on how you wish to generate interest with consumers. Combining
a couple strategies can garner more attention from a wider base of potential
customers.
Targeting a product to a particular age group or generational cohort is a way
to concentrate your marketing efforts and generate product interest within
that particular group. According to "Entrepreneur"'s website, extensive
research is necessary for age or generational marketing to determine the
status and living situations of consumers in your potential target group. For
example, a middle-aged woman in the modern era may still be on the dating
circuit and not looking to settle down any time soon just as easily as a
woman in the same age group could have a family.
Income-Sensitive Marketing
Income-sensitive marketing seeks to target your small business's services or
products to consumers of particular income and economic status. This
strategy also shapes the prices you charge for your goods and services as
well as the marketing campaign itself. For example, products marketed to
consumers with higher incomes will usually have higher prices while those
products marketed to consumers with lower incomes will usually have
correspondingly lower prices. This allows more consumers in your target
market group to afford your products.
Gender-Specific Marketing
Gender-specific marketing shapes an advertising campaign toward one
gender or specific group within that gender. For example, target marketing
toward pregnant women seeks to generate more interest in your small
business's goods and services within that particular group. How your small
business accomplishes this task depends on the outcome of your market
research and gender needs within your local marketplace. This research may
influence the types of images, colors and language you use in your
marketing campaign to attract your target gender or gender group to your
company's products or services.
Geographic Target Marketing
Geographic areas across the country have different product needs. Targeting
a marketing campaign to meet the signature geographic demands of
consumers in your marketplace can boost your company's importance and
necessity in the minds of consumers. This strategy also works with seasonal
marketing campaigns to take advantage of shifting consumer moods as the
weather turns hot or cold. For example, many beverage companies roll out
pumpkin-flavored hot drinks during the fall to catch consumers turning
attention toward Thanksgiving and colder weather.

Types of Forecasts
Corporate planning groups use market forecasts to guide research and
development activities and to plan new facilities. Finance and accounting
groups use forecasts to estimate future profits and capital requirements.
Marketing groups use forecasts to plan promotions and sales strategies.
Operations groups use forecasts to plan plant capacity, inventory levels,
production schedules, resource allocation, etc. And, investors use forecasts
to identify under-priced securities. Clearly, forecasting is an essential part of
business planning for most companies.

There is a wide variety of forecasting techniques that you can use including:
qualitative techniques, such as combining department estimates; and, causal
techniques, such as determining how advertising impacts sales and then
deriving sales from planned advertising. This chapter deals exclusively with a
third technique, time-series forecasting.
Time-series forecasting relies on the assumption that you can extract a trend
or pattern from historical data, and extrapolate the trend into the future. For
example, use historical sales to predict future sales. This is a very useful
technique for short-range forecasts because it is easy to apply. Also, in the
absence of any substantial change in business practices, time-series
forecasts can be quite accurate.

Qualitative forecasting techniques are subjective, based on the opinion and

judgment of consumers, experts; they are appropriate when past data are
not available. They are usually applied to intermediate- or long-range
decisions. Examples of qualitative forecasting methods are [citation
needed]
informed opinion and judgment, the Delphi method, market research,
and historical life-cycle analogy.
Quantitative forecasting models are used to forecast future data as a
function of past data. They are appropriate to use when past numerical data
is available and when it is reasonable to assume that some of the patterns in
the data are expected to continue into the future. These methods are usually
applied to short- or intermediate-range decisions. Examples of quantitative
forecasting methods are[citation needed] last period demand, simple and weighted
N-Period moving averages, simple exponential smoothing, poisson process
model based forecasting [2] and multiplicative seasonal indexes.
In this approach, the predictions of all future values are equal to the mean of
the past data. This approach can be used with any sort of data where past
data is available. In time series notation:
where is the past data.
Although the time series notation has been used here, the average approach
can also be used for cross-sectional data (when we are predicting
unobserved values; values that are not included in the data set). Then, the
prediction for unobserved values is the average of the observed values.
Naïve forecasts are the most cost-effective forecasting model, and provide a
benchmark against which more sophisticated models can be compared. This
forecasting method is only suitable for time series data.[3] Using the naïve
approach, forecasts are produced that are equal to the last observed value.
This method works quite well for economic and financial time series, which
often have patterns that are difficult to reliably and accurately predict. [3] If
the time series is believed to have seasonality, seasonal naïve approach may
be more appropriate where the forecasts are equal to the value from last
season. The naïve method may also use a drift, which will take the last
observation plus the average change from the first observation to the last
observation.[3] In time series notation:
A variation on the naïve method is to allow the forecasts to increase or
decrease over time, where the amount of change over time (called the drift)
is set to be the average change seen in the historical data. So the forecast
for time is given by
[3]

This is equivalent to drawing a line between the first and last observation,
and extrapolating it into the future.
Seasonal naïve approach[edit]
The seasonal naïve method accounts for seasonality by setting each
prediction to be equal to the last observed value of the same season. For
example, the prediction value for all subsequent months of April will be
equal to the previous value observed for April. The forecast for time is:[3]
where =seasonal period and is the smallest integer greater than .
The seasonal naïve method is particularly useful for data that has a very
high level of seasonality.
Time series methods[edit]
Time series methods use historical data as the basis of estimating future
outcomes.

 Moving average
 Weighted moving average
 Kalman filtering
 Exponential smoothing
 Autoregressive moving average (ARMA)
 Autoregressive integrated moving average (ARIMA)
e.g. Box–Jenkins
Seasonal ARIMA or SARIMA

 Extrapolation
 Linear prediction
 Trend estimation
 Growth curve (statistics)
Causal / econometric forecasting methods[edit]
Some forecasting methods try to identify the underlying factors that
might influence the variable that is being forecast. For example,
including information about climate patterns might improve the ability
of a model to predict umbrella sales. Forecasting models often take
account of regular seasonal variations. In addition to climate, such
variations can also be due to holidays and customs: for example, one
might predict that sales of college football apparel will be higher
during the football season than during the off season.[4]
Several informal methods used in causal forecasting do not employ
strict algorithms [clarification needed], but instead use the judgment of the
forecaster. Some forecasts take account of past relationships between
variables: if one variable has, for example, been approximately
linearly related to another for a long period of time, it may be
appropriate to extrapolate such a relationship into the future, without
necessarily understanding the reasons for the relationship.
Causal methods include:

 Regression analysis includes a large group of methods for

predicting future values of a variable using information about other
variables. These methods include both parametric (linear or non-
linear) and non-parametric techniques.
 Autoregressive moving average with exogenous inputs (ARMAX) [5]
Quantitative forecasting models are often judged against each other
by comparing their in-sample or out-of-sample mean square error,
although some researchers have advised against this.[6]
Judgmental methods[edit]
Judgmental forecasting methods incorporate intuitive judgement,
opinions and subjective probability estimates. Judgmental forecasting
is used in cases where there is lack of historical data or during
completely new and unique market conditions.[7]
Judgmental methods include:

 Composite forecasts
 Cooke's method
 Delphi method
 Forecast by analogy
 Scenario building
 Statistical surveys
 Technology forecasting
Artificial intelligence methods[edit]

 Artificial neural networks

 Group method of data handling
 Support vector machines
Often these are done today by specialized programs loosely labeled

 Data mining
 Machine Learning
  Pattern Recognition
Other methods[edit]

 Simulation
 Prediction market
 Probabilistic forecasting and Ensemble forecasting
 Some socioeconomic forecasters often try to include a humanist
factor. They claim that humans, through deliberate action, can
have a profound influence on the future. They argue that it should
be regarded a real possibility within our current socioeconomic
system that its future may be influenced by, to a varying degree,
individuals and small groups of individuals. Recent popular
publications like Capital in the Twenty-First Century are regarded
as major contributors to the increasingly apparent possibility of
such reality. It is argued that the influence private and public
investment have on our future can never be discomposed of the
individual Machiavelian human character. All methods that
disregard this factor can not only never accurately predict our
socioeconomic future, but can even be used as strong coercion
tools. Such theories are generally regarded conspiracy theories,
but the increasingly worrying socioeconomic development in the
world grants some of these theories a persistent credibility.

Role of People

People Theory

From this research, we’ve observed seven challenges companies must meet
to create development programs that really work:

1. Ignite managers’ passion to coach their employees. Historically,

managers passed on knowledge, skills, and insights through coaching and
mentoring. But in our more global, complex, and competitive world, the role
of the manager has eroded. Managers are now overburdened with
responsibilities. They can barely handle what they’re directly measured on,
let alone offer coaching and mentoring. Organizations need to support and
incentivize managers to perform this work.

2. Deal with the short-shelf life of learning and development

needs. It used to be that what you learned was valuable for years, but now,
knowledge and skills can become obsolete within months. This makes the
need to learn rapidly and regularly more important than ever. This requires
organizations to rethink how learning and development happens from a
once-in-a-while activity, to a more continuous, ongoing campaign. As
Annette Thompson, Senior Vice President & Chief Learning Officer at
Farmers Insurance pointed out in an interview, avoiding information
overload is vital, so organizations must strike a balance between giving the
right information versus giving too much.

3. Teach employees to own their career development. Highly-

structured, one-size-fits-all learning programs don’t work anymore.
Individuals must own, self-direct, and control their learning futures. Yet they
can’t do it alone, nor do you want them to. The development and growth of
your talent is vital to your ongoing success, ability to innovate, and overall
productivity. It’s a delicate balance, one Don Jones, former Vice President,
Learning at Natixis Global Asset Management summarized like this: “We
need to have ‘customized’ solutions for individuals, while simultaneously
providing scale and cost efficiencies across the organization,” he said.

4. Provide flexible learning options. Telling employees they need to

engage in more learning and development activities with their already heavy
workload often leaves them feeling overwhelmed and consumed by the
question, “When and how will I find the time?” Companies must respond by
adopting on-demand and mobile solutions that make learning opportunities
more readily accessible for your people.

5. Serve the learning needs of more virtual teams. While most

organizations have more people working remotely and virtually, it does
require more thought and creativity in how to train this segment of your
workforce. This includes formal types of learning through courses, but also
the informal mentoring and coaching channels. Just because employees are
out of sight doesn’t mean they get to be out-of-mind when it comes to
learning and development.

6. Build trust in organizational leadership. People crave transparency,

openness, and honesty from their leaders. Unfortunately, business leaders
continue to face issues of trust. According to a survey by the American
Psychological Association, one in four workers say they don’t trust their
employer, and only about half believe their employer is open and upfront
with them. If leaders disengage or refuse to share their own ongoing
learning journeys, how can they expect their people to enthusiastically
pursue theirs? It’s the old adage of “lead by example.” If managers want
employees to engage in learning and development, then they need to show
that they are actively pursuing their own personal learning journeys as well.
7. Match different learning options to different learning styles. With
five generations actively in the workforce, organizations must restructure the
way employees learn and the tools and activities they use to correctly match
the different styles, preferences, and expectations of employees. For
example, Millennials came of age using cell phones, computers, and video
game consoles, so they expect to use these technologies to support their
learning activities.

As leaders, we know the value our learning and development programs bring
to our organizations. But we also want to ensure we’re receiving a high
return on investment. By clearly understanding the trends emerging in our
learning and development programs, we’ll better position our companies to
select the right targeted solutions to drive results, increase employee
engagement, and increase innovation and productivity.

Types of Motivation

There are two types of motivation, Intrinsic and Extrinsic motivation. It's
important to understand that we are not all the same; thus effectively
motivating your employees requires that you gain an understanding of the
different types of motivation. Such an understanding will enable you to
better categorize your team members and apply the appropriate type of
motivation. You will find each member different and each member's
motivational needs will be varied as well. Some people respond best to
intrinsic which means "from within" and will meet any obligation of an area
of their passion. Quite the reverse, others will respond better to extrinsic
motivation which, in their world, provides that difficult tasks can be dealt
with provided there is a reward upon completion of that task. Become an
expert in determining which type will work best with which team members.

Intrinsic Motivation

Intrinsic motivation means that the individual's motivational stimuli are

coming from within. The individual has the desire to perform a specific task,
because its results are in accordance with his belief system or fulfills a desire
and therefore importance is attached to it.

Our deep-rooted desires have the highest motivational power. Below are
some examples:

 Acceptance: We all need to feel that we, as well as our decisions, are
accepted by our co-workers.
 Curiosity: We all have the desire to be in the know.
 Honor: We all need to respect the rules and to be ethical.
 Independence: We all need to feel we are unique.
 Order: We all need to be organized.
 Power: We all have the desire to be able to have influence.
 Social contact: We all need to have some social interactions.
 Social Status: We all have the desire to feel important.

Extrinsic Motivation

Extrinsic motivation means that the individual's motivational stimuli are

coming from outside. In other words, our desires to perform a task are
controlled by an outside source. Note that even though the stimuli are
coming from outside, the result of performing the task will still be rewarding
for the individual performing the task.

Extrinsic motivation is external in nature. The most well-known and the most
debated motivation is money. Below are some other examples:

 Employee of the month award

 Benefit package
 Bonuses
 Organized activities