Chandler’s Thesis

Source: http://www.citeman.com/4644-chandler%e2%80%99s-thesis

In his ground-breaking study of the history of large corporations, Chandler examined the growth and development of 70 of the largest businesses in the United States, including Du Pont, General Motors, Standard Oil, and Sears, Roebuck. He observed a common pattern in their development. Although the organizations changed their growth strategies to suit technological, economic, and demographic changes, new strategies created administrative problems and economic inefficiencies. Structural changes were needed to solve those problems and to maximize economic performance. Thus, Chandler concluded that organizational structure followed and reflected the growth strategy of the firm.

According to Chandler, organizations pass through three stages of development, moving from a unit structure, to a functional structure, and then to a multidivisional structure. At first, organizations are small. There is usually a single location, a single product, and a single entrepreneurial decision maker. For example, when Bill Hewlett and Dave Packard founded a company to build an audio oscillator in 1939, they were personally responsible for its design, manufacture, testing, and marketing.

As an organization grows, however, increased volume and additional locations eventually create new challenges. The organization then becomes a unit firm, with several field units and an administrative office to handle coordination, specialization, and standardization among the units.

The next step is vertical integration. The organization keeps the original product but broadens its scope and strives for economies of scale by acquiring a supplier of raw materials and components or a distributor of finished goods. For example, the pioneers of vertical integration, the steel companies, eventually moved into mining. A manufacturer might naturally move into warehousing and wholesaling. However, vertical integration creates new problems in moving goods and materials through the organization’s various functions. Therefore, the organization evolves into a functional organization, with finance, marketing, production, and other subdivisions and formalized budgeting and planning systems. Thus, as Hewlett-Packard’s production of test equipment expanded, functional managers took over operating decisions.

In the third stage, an organization expands into different industries and diversifies its products. This phenomenon poses a significant new challenge: selecting products and industries in which to invest the organization’s capital. The result is the multidivisional firm, which operates almost as a collection of smaller businesses. Semi-autonomous product divisions take responsibility for short-term operating decisions, with the central office remaining responsible for strategic decisions with a longer time horizon. For instance, Sega was organized to give operating units a great deal of autonomy.

Chandler observed that the transition from one structure to another was often both delayed and painful. He concluded that organizations do not readily change structure because their entrepreneurial founders excel at strategy but are generally neither interested in nor knowledgeable about organizational structure. Indeed, when the organization is finally restructured, the entrepreneur often leaves. This has happened frequently in recent years in rapidly growing, technology-oriented firms like Apple Computer. At Railtex Service Co, a freight-car operator, founder faced the problem head-on: With his successful business at the crossroads, should he stay on? He knew that with the right leadership, the business was poised for incredible growth. Could he provide that kind of leadership?

More recently, Raymond Miles and Charles Snow have done extensive studies analyzing the fit between an organization’s strategy, structure, and management processes-that is, the balance between its alignment with its environment and its maintenance of stable internal interrelationship. They argue that successful organizations achieve strategic fit with their market environments and support their strategies with appropriately designed structures and management processes, while less successful organizations typically exhibit poor fit externally or internally, or both.

IBM’s recent highly publicized problems are in part a result of its highly centralized decision-making structure, which could not adapt fast enough to changes in the external environment. Even if IBM knew the correct strategy, it could not implement it in its current structure.

Regardless of the final verdict on Chandler’s thesis, it is impossible to understand an organization’s strategy without examining its structure. Indeed, one framework for organizational effectiveness goes even further in its analysis of interacting factors in strategy implementation.

Talent retention during economy slow down

Source: http://www.citeman.com/4652-talent-retention-during-economy-slow-down

There will be hiring and there will be attrition, through the numbers may be small even if the economy has slowed down. Hiring will not come to a halt and there will be attrition.

When uncertainty prevails, there will be employees who will want to move out to safer places or jobs that will be guaranteed for a longer time. This is the time rival companies come poaching to grab the best available in the industry to out do competition.

Talent retention continues to pose a challenge for many organizations. In addition to the obvious costs of recruiting and training replacements, loss of talent can have a serious impact on customer service and severely impair the capacity to develop future leadership. This alone is reason enough for businesses to treat the issue of talent retention with utmost gravity.

Though compensation is an important consideration for attracting and retaining talent, there are other factors that influence a company’s ability to hold on to people who have the biggest impact on its bottom line. Outlined here are keys to talent retention.

People are different: The idea of personalized employee motivation may appear a stretch for companies that find the ‘one size fits all approach’ to be both practical and convenient. However, a failure on the part of the employer to recognize the individual desires and needs increases the likelihood that they will seek employment elsewhere. As a person responsible for the productivity and well being of your staff, it is important you be there for them when they need your guidance or feedback. Your staff must feel valued as individuals, not as mere cogs in a big wheel. When managers recognize this ‘personal component’ by building rapport, fostering open lines of communication and providing unique development opportunities for employees , it results in better relationship building and staff morale.

Training: There is controversy regarding the relationship between training and turnover. Employers are concerned about training employees and then have them leave before the organization benefits from the skills and knowledge so developed. In times of recession especially, it is tempting to slash training budgets and stick to paying lip service. If the employee finds that he is not getting enough development opportunities, he will leave anyway, so withholding training opportunities is not the answer.

Trained people give the business a competitive edge and for employees, it enhances their sense of value and job security especially in a downturn. By including those employees who you believe are more likely to stay in specialized training and grooming them for the future through succession, management programs, you show that the organization has a personal stake in their growth and development as well.

Talented employees have expectations of what is needed to achieve their career aspirations. An organization that recognizes this fact and helps its employees integrate their personal career plans with organizational objectives through continuous feedback challenging work and growth opportunities will be able to retain the best staff without difficulty.

Work life balance: With on-job stress taking a toll on the health and psychological well being of a large section of the working population, many people are pushing work life balance to the top of their priority list. Money, prestige, even growth and development opportunities sometimes place in comparison to the need to achieve equilibrium between personal and professional life. By providing assistance to employees to help balance job stress and personal commitments through advice, counseling and proper support systems, you create an ideal environment for work satisfaction and happiness to thrive in.

Every employee expects to be fairly and adequately compensated for the value he delivers to the organization. The compensation not only covers monetary benefits, which clearly is high on the list, but it also includes other factors such as recognition, appreciation, opportunities for professional growth, development and self actualization.

An organization that recognizes this value proposition is well equipped to cope with the vagaries and challenge of talent retention.

Good hiring ratios

Source: http://www.citeman.com/4653-good-hiring-ratios

Every company craves for good hiring ratios. Needless to say, efficient employment selection alone can predict job success. But the fact of the matter is that good hiring does not happen by accident. In fact, it is estimated that two-thirds of employee hiring decisions may be hiring mistakes.

When the going was good and nobody bothered about cash it was “OK” if one or two of those hired were not up to the mark the hiring mistakes are pointed towards the HR department’s recruiters.

There is this profound realization now that the costs of faulty hiring are steep indeed. Companies not only have to pay through their nose for a bad hire, but may also end up saddled with their mistakes, as it is not always possible to terminate them straight away.

When layoffs are being thought of in many sectors, if a company is hiring then you have to ensure that you get the right candidate at little cost.

Requirements: Have a clear cut picture of a candidate with job responsibilities and requirements complete with both hard and soft skills specifications. Designing a clear job description will not only help you attract the right candidates in the first place but also pick the right candidate for the job. But, do establish realistic and limited criteria.

Comprehensive search: Effective hiring requires a well-organized and planned search sans premature decisions. This is possible when you do not let the pressure of filling the position unduly affect your decisions. Remember that it is always better to take the time to hire correctly from the beginning than to sacrifice quality.

Pre-screening: Reviewing and screening the resumes based on knowledge, experience, skills, expected salary and even culture fit will help you to weed out the superfluity from the candidate pool and narrow down to the promising ones.

For this purpose, you can design an exhaustive application form to collect detailed information such as last CTC, reasons for leaving pervious job and past employers details which may not be available on the standard resume.

You cannot rely on hiring by ‘gut feel’ or sixth sense. Some managers claim to feel that particular candidate is the perfect employee, but this intuition could prove wrong later. Also, move away from hiring on the basis of familiarity like of you and the candidate hail from the same town went to the same college or even shared a similar hobby. You have to be much more selective when it comes to hiring decisions.

The interview: Now, asking any random questions that cross your mind at the last minute cannot help you to make informed hiring decisions. It is advisable to move to a rational and structured interviewing process by carefully crafting and practicing discerning questions to determine the candidate’s skills, qualifications, likes and dislikes and preferred communications methods as well as determining acceptable answers for the same.

Also, prepare open ended behavioral questions to assess essential skill requirements. This will help shed light on the candidate’s work style, motivation and key on the job behavior along with the ability to meet expectations and achieve goals.

Evaluations: According to recent research by a HR consulting firm, the typical interview increases the likelihood of choosing the best candidate by less than two percent.

In other words, if you just ‘flipped’ a coin you would be correct 50% of the time. If you added an interview you would only be right 52 percent of the time.

This is because shrewd candidates can manipulate interview conversations to show that they perfectly match the job requirements.

Design assessment questionnaires to gather skills, strengths and weaknesses for specific positions. Never forget to gauge personality factors to check if the candidate can fit in with the company culture.

Reference checks: Diligent reference and back ground checks are again crucial as candidates are not beyond falsifying information on their resumes.

You should be wary of possible misrepresentations and thoroughly probe qualifications and past employers. This will help you as certain the candidate’s work ethic, management style, team orientation, values and past performance.

In effect, good hiring is the result of careful planning and informed decisions. Only then you can be successful in selecting a compatible candidate who can effectively contribute to the job and organization.

Talent Management or Talent Manipulation?

by Jamie and Maren Showkeir

Talent managers have an essential role in hiring and developing organizational talent. Stakes are high in the interview process and during performance appraisals. People are inclined to sell their best qualities to get the job, the raise or the promotion, and talent managers want to ensure the organization has the best possible workforce.

Consequently, both sides may be tempted to use manipulative techniques to get what they want and often don't realize they're doing it. In fact, the tactic is so common and subtle people may not even see it.

Manipulation starts with intention. When you try to get people to act, believe something or feel a certain way without fully disclosing, you're in manipulation mode. Manipulation makes it easier to win in the moment. You can use it to make yourself look better or get results from others.

Recently, we conducted a workplace survey of 250 people from diverse industries and backgrounds that included questions about manipulation at work. The majority of respondents said they rarely or never used manipulation at work to get things done, and neither did the majority feel others manipulated them.

And nearly 70 percent said using manipulation to get things done was unacceptable. Yet four out of five said the people who are best at manipulating others are the ones who get ahead in their careers. The people who responded to the survey included a preponderance of managers, so how can this contradiction exist?

Manipulation is a barrier to authentic conversation. It takes a heavy toll on relationships by destroying trust and fostering cynicism. When people manipulate each other at work, it creates something no one can believe in. In our survey, roughly half of those responding - regardless of position - admit they found it difficult to have open, honest conversations at their company. This problem often starts with the interview process.

Manipulation shows up when talent managers oversell the benefits of a company or give calculated descriptions about what it's like to work there. It can make an impression when future career opportunities are overstated. Manipulation is likely at play, no matter how benevolent or subtle, when motivational tactics are used to create enthusiasm, loyalty or to improve morale.

The talent manager can recognize manipulation. The following are common manipulative techniques identified in the workplace:

a) Spinning the facts or using calculated descriptions that favor your position or ideas. For example: "You asked about my weaknesses. My biggest weakness is that I work too hard. Sometimes my co-workers accuse me of being too conscientious."

b) Overstating the situation or exaggerating threats to create a false sense of urgency or importance to motivate people. For instance: "The biggest difficulty in my last position was every time I took a vacation I got back and had a huge mess to deal with. Nobody there seemed to care as much about our customers as I did."

c) Understating or downplaying difficult issues or serious problems to keep others calm or focused on work. It could sound like: "There were a few times when my boss and I didn't see eye to eye. But if she thought my way was wrong, I was happy to do it her way."

d) Sucking up or going over the top and giving phony praise to have an effect. It could sound like: "I have always wanted to work here. Everything I read and everyone I talk to mentions what a great place this is to work."

Other techniques include feigning interest in something or someone to get what you need, playing to another's emotions, reassuring others without any evidence things will be all right, disguising your agenda, masking your true intentions when asking someone to do something, revealing only the facts that bolster your arguments, using sarcasm or dropping powerful names to get your way.

Without self-awareness, manipulation can show up when and where we least expect it. For instance, viewing those we are hiring and managing as human capital instead of people makes it easier to engage in a strategic dance of inauthentic manipulative conversations. Questions such as "What am I trying to create here?" and "How would I want to be treated?" can help talent managers develop an awareness of techniques to engage in authentic conversations.

Abandoning manipulation isn't easy, but choosing more authentic conversation techniques will strengthen relationships and build trust. Talking about things this way acknowledges an individual's freedom of choice. When we choose conversations that emphasize transparency and honesty, people are more likely to choose accountability and responsibility.

When conversations are imbued with full disclosure of projects and plans, it creates commitment and investment in a shared future. Employees who are authentically engaged from the beginning will produce better results. Conversations that include full disclosure presuppose a faith in people's ability to collaborate and use their intelligence, judgment and goodwill to create a world in which we can all believe. Authentic conversations are better for business.

[About the Authors: Jamie and Maren Showkeir are co-authors of Authentic Conversations: Moving from Manipulation to Truth and Commitment. Their company, Henning-Showkeir & Associates, offers management consulting, change management and leadership development. ]