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Impact of Leadership on Identifying

Right Organizational Designs for Turbulent Times


Christopher Mosley* and Sergio Matviuk**
Organizations of all sizes, types across various industries are experiencing
turbulent forces of change from the environment in the business world,
both nationally and internationally. We are in an era of global business
a one world market. The traditional orientation of companies working
just within national boundaries is declining worldwide. The ability of
business to respond to the newer challenges of globalization requires
clarity of vision and understanding about the behavioral role of
management and organizations in this constantly changing new world
(Brake et al., 1995). It is up to the leaders and followers alike to position
the organization to compete and win in the face of increasing external
global market pressures. The expressed purpose of this paper is to add
new insights and foresight to an existing body of knowledge on the role
and impact of leaders to identify and implement the right organizational
design(s) to fit the culture, strategy, people, and unique challenges facing
each organization. Equally important this paper is intended to articulate
the necessary prerequisites that must be in place to ensure that the
design(s) is sustainable to achieve the desired outcomes for the
organization.

New Organizational Reality: Winds of Change


Unprecedented technological advances, unparalled diversity, winds of rapid change,
innovation in products and designs, escalating strategic and operational competition,
cultural and ethical dilemmas, employee exodus and growing unrest by stakeholders
for greater productivity, rising performance demands, etc., are spurring organizational
leaders and managers to think how to structure organizations to better respond to this
reality, and survive ultimately.
In turbulent times, an enterprise has to be managed both to withstand sudden blows
and avail itself of unexpected opportunities. It is not an either or proposition, but rather
a paradoxical situation which must be confronted by organizations and its leadership
and followers. This means that in turbulent times the fundamentals have to be managed,
and managed, well (Drucker, 1980).
* Research Scholar, School of Global Leadership and Entrepreneurship, Regent University, US.
E-mail: cmosley777@gmail.com
** Assistant Professor, School of Global Leadership and Entrepreneurship, Regent University, US.
E-mail: sergmat@regent.edu
The
2010
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on Identifying Right Organizational Designs for Turbulent Times

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Skeptical leaders may be wonderingis it really worth it? Why to bother during these
turbulent times? Would it not be far easier to just call it a day, or start all over, or blow
up the structure, or simply give up trying to use the organizational structure as a strategic
asset at all? Against the backdrop of such challenges one must recall how great leaders
like Gandhi, Martin Luther King Jr., Abraham Lincoln have changed the course of history
with tremendous vision and courage without placing an emphasis on organizational
structure to support their efforts. However, when it comes to business, it is cautioned
to replicate the same logic because organizations are dealing metaphorically with an animal
of a far different shape, complexity, and the dynamic forces at work in the industry require
unity of purpose. Organizations, thus enable people working in groups to accomplish
goals that none of them could do on their own. In this way, they are able to harness
complex and simple technologies and ingenious solutions to achieve greatness in a far
more profound and sustainable fashion (Mitroff, 2004).

Leadership 101: Step Up or Watch Out for the Stampede


The speed of change will overtake the organizations where the leaders do not adopt
a new mindset, first themselves and solicit the hearts, minds and souls of followers
to join suit on this quest to transform the organizations to successfully operate and do
well in the new landscape. In support of this idea, an even bolder declaration is made
that a leader who does not inspire is like a river without water (Secretan, 1999).
Thus, organizations work the way they do because of how we work, how we think
and interact: the changes required ahead are not only in our organizations but in
ourselves as well (Senge, 1990). This statement speaks of the importance of leaders
focusing on personal mastery before trying to influence change within the organizations.
Leaders have to bring the changes they want to see in the world (Potts Michel, 2002).
There is no way for leaders to get around this question which has stood the test of
time for leaders: To be or not to be: that is the question, whether tis nobler in the mind
to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of
troubles (Shakespeare, 2006). This article encourages enlightened leaders to face the
reality of the latter and keep rowing ahead to find ways to navigate the organization
to overcome these torrential winds and raging sea of the business world to safer ground
on this distant horizon.

Static Environment: Things of the Past, Inspire Followers


Static is defined as pertaining to bodies at rest or forces in equilibrium; not involved
in or with motion (Landau, 1999). While it is human nature to try to control the
environment to ensure predictability, order, and even flow of events, enlightened leaders
quickly accept the reality that it is no longer possible to operate organizations in the
21st Century without experiencing chaos and unpredictable winds of change. In
recognition of this fact, the world and the workplace have moved into the 21st Century
with an increasing awareness of change in individuals, families, communities, countries
and organizations (Lewis, 2006).
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Leaders Creed: First Adopt New Mindset, Not New Strategy


It all sounds a bit scary for the unprepared, uninformed, and unwilling leaders running
organizations; however, it does not have to be for the leaders who are willing to do
something about it. To move from static to adaptive thinking, enlightened leaders actually
do not need to have the vision; they need to possess the willingness and ability to
draw the vision from their people and inspire and empower those people to do what
it takes to bring the vision into reality. Indeed, enlightened leaders nurture and encourage
their people to be open, creative, and innovative and find what it takes to achieve their
shared objectives. This brings out the best in people (Oakley and Krug, 1991). At the
core of this whole discussion is a critically important paradigm shift required in the
minds and hearts of a leader; it represents a creative shift from the thinking ushered
in by Frederick Tayl In the Principles of Scientific Management. This will require, above
all, very different assumptions about people in organizations and their work: one does
not manage people, and the task is to lead people. And the goal is to make the specific
strengths and knowledge of each individual productive (Drucker, 1999).
While the words in this paper may be easy to read and digest, it is far more difficult
to enact because of the earlier notion that people are inherently resistant to change.
Leaders must overcome the fear of failure and accept the reality by making informed,
decisive and timely changes in the organization. This will help enlightened leaders to
avoid the trap of creating a failed legacy defined and guided by fear. For those who
do not heed the warning, their legacy of leadership for the organization will read: we
can easily forgive a child who is afraid of darkness. When man is compelled to look
at the light, will he not have the pain in his eyes which will make him turn away to
take in the objects of vision which he can see? The real tragedy of life is when men
are afraid of the light (Plato, 360 B.C.E). The light will help to prepare leaders and
illuminate their path.

Resist Redesigning Before Transforming Culture


In the face of changes in the external environment and internal resistance, the blinded
leaders want to immediately get out the pen and paper and start redesigning work flows,
reconfiguring organizational structures and reporting relationships. While these exercises
may soothe the ego of the leader, they will not help the organization and followers to
achieve the desired success aspired by all involved. This point is irrefutable because
although the tools and techniques may be present and the change strategy implemented
with vigor, many efforts to improve organizational performance fail because the
fundamental culture of the organizationvalues, ways of thinking, managerial styles,
paradigms, approaches to problem solvingremain the same (Cameron and Quinn, 2006).
Culture is a powerful force and has to be reckoned with as such instead of attempting
to ignore or even worse trying to minimize the affect that it has on the organization and
the people in it. Organizational culture holds your organizations aspirations and the spirit
of the place. Its beliefs and values define the organizations core. To implement a strategy
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that requires people to change the way they do things, leaders need to work beyond the
operational plan and plan to change culture as well (McGuire and Rhodes, 2009).
First, to address the cultural dynamics of the organization, leaders need information
instead of allowing their unsubstantiated beliefs, emotions, assertions, past experiences
and successes of yesterday and old and untested ways of doing things to guide them.
One of the worst things that a leader can do is to make assumptions, unfounded
predictions about what is driving behaviors without doing an assessment of the
organization. Using the Organizational Cultural Assessment Instrument (OCAI) is one
of many research tools available to help in this process. It allows the leaders and
followers to work together to determine both the now and preferred culture to help
the organization to achieve its desired goals.
For instance, the Clan Culture is commonly associated with a friendly place to work
where people share a lot of themselves and leaders are considered to be mentors. The
organization places a premium on teamwork, participation, and consensus. On the other
hand, the Adhocracy Culture is dynamic, entrepreneurial and a creative place to work.
The emphasis is on the leading edge and the organization encourages individual
initiative and freedom. As a polar opposite, the Hierarchy Culture promotes a very
formalized and structured place to work. The management of employees is concerned
with secure employment and predictability. Lastly, the Market Culture is best
characterized as a result-oriented organization. The leaders are hard drivers, producers,
and competitors and so is the organizational style (Cameron and Quinn, 2006).
The OCAI works well in subunit cultural assessments and for the overall
organization. However, a word of caution is applicable here: please do not start changing
things too quickly without seeing a clear picture of what is the current and preferred
culture. This theory works in a similar fashion as the one used in other circles. If leaders
are interested in assessing the leadership styles and teams dynamics within the
organization they might deploy a Myers Briggs Survey or a DISC Profile of the team
(Briggs and Myers, 1998). These parallel applications are offered here for comparison
and illustrative purpose because leaders stand the risk of making a huge mistake by
rushing to conclusions and solutions without the right information to guide their
decisions. Do so at the peril of the organization!
With the realization that no enlightened leader wishes the organization to perish on
his or her watch, organizations playing on the global business stage must affect positive
changes in the culture in the wake of unparalleled change in the global marketplace
by doing the following things:
Consciously developing a global organizational culture;
Reframing diversity from a global perspective;
Preparing employees for short to midterm global rotations;
Facilitating learning about culture and their values, beliefs, expectations, and
behaviors in order to be successful worldwide;
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Developing effective multicultural teamwork and structures for collaboration;


and
Managers being able to manage, transcend and leverage cultural diversities
appropriately and effectively (Walker et al., 2003).

Strategic Thinking: Precedes and Supports Organizational Design


It is also important to take every precaution to minimize confusion, inertia, inefficiency,
miscommunications and mishaps in the organization. It must be remembered that the
competition is running the same race, and every step counts. Leaders and followers
have to work together to craft and chart a clear, well analyzed, developed, and thoughtout, written, and carefully constructed strategy for the organization. In strategic thinking,
one first seeks a clear understanding of the particular character of each element of a
situation and then makes the fullest possible use of human brain power to restructure
the elements in the most advantageous way. No matter how difficult or unprecedented
the problem is a breakthrough in the best possible solution can come only from a
combination of rational analysis, based on the real nature of things, and imaginative
reintegration of all different items into a new pattern, using nonlinear brain power
(Ohmae, 1982).
This suggests that organizational leaders must do the work to first understand the
character or true essence of the situation before trying to change anything. Character
is expressed in terms of an organizations developmental patternthe manner in which
it grows, develops, and renews itself (Hamermesh, 1986). It is hard, but vitally important
for the leaders and followers to get it right for the organization, which is the primary
goal of strategic thinking in the first place.
Organizational strategy answers three fundamental questions: (1) why an organization
exists, why are we here; (2) what is it, what are we doing; and (3) how it competes,
where are we going in the future. In other words, structure and systems are properly
regarded as means for realizing organizational strategy (Keidel, 1995). It is also important
to appreciate the fundamental and significant fact that all models of organizations as
coherent entities can be reduced to two basic views: organizations as social systems,
sustained by the roles allocated to their participants, and organizations as associations
of self-interested parties, sustained by the rewards the participants derive from their
association with the organization (Lammers, 1987).
Strategic thinking has two major components: insight about the present and foresight
about the future. Visual thinking is the process that stimulates both of these by helping
us link our intuitive sense of the events in the world with our intellectual understanding
(Sanders, 1998). For strategic thinking to serve as a useful resource and construct for
the organizations, leaders and followers must dig deep to find and understand the
strategic coreall of the resources that can be exploited in a good way so as to confer
a sustained advantage. These are resources which cannot easily be replicated by others
(at least in the short-term), then clearly it must be encompassed within the boundary
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of the organization. Four key pieces of this jigsaw are: (1) core skills; (2) core
competencies; (3) distinctive capabilities; and (4) strategic assets (Ferguson and
Ferguson, 2000). Using a metaphor from the game of hockey, the key to success is not
to skate towards the puck, but, instead, anticipating where the puck is going and get
there ahead of it. The same thing could be said of great leadersthey anticipate where
the change is going and make sure their organization get there first (Sanders, 1998).
Given the fierce winds of change in the external environment, the organization has
to do the necessary work of strategic thinking to face a certain future fraught with
disaster. If you fail to plan, you plan to fail. It stems from a universal acceptance of
the fact that an organization which does not confront change, or sees no need to innovate,
will stagnate, decay and eventually die. Trees begin to die from the top downwards,
and so this process in business usually stems from the chief executive and those around
him or her (Adair, 1990). To mitigate the inherent inertia to change brought on by new
strategies, it is very important for the leader to encourage participation in the process,
communicate the strategy across the organization with special emphasis on what and
why of the strategy and to remain flexible as this is not a static, but fluid process. If
you want the strategy to be embraced, accepted, internalized and adopted by the
employees rather than some edict from the top, there is no substitute for improving
communication as the strategy unfolds the organization (Morgan, 1997).

Spirit of Finding Right Organizational Design:


Let Questions Lead to Right Answer(s)
Once the organization has gone through the process of strategic leadershipthinking,
acting, and influencing the changes necessary to achieve the desired objectives for the
organization, it is time to develop a structure to support and roll out the strategy (Hughes
and Beatty, 2005). Organization designs that facilitate variety, change, speed, and
integration are sources of competitive advantage (Galbraith, 2002). But where do you
start in the quest for the right design for the organization? Right inside the organization
lies the answer. This is no time to start looking outside of the organizational doors for
the magic bullet after all of the work is done to assess and transform the culture,
developing a compelling strategy and reshape the paradigm thinking of leaders and
followers. Now is the time to put it onto action. However, it is very easy to get myriad
in all the various theories and types of design out there. Start with the basic questions
and the answers will lead the organization to the right design. First, why are we here
(mission, and values)? Where are we trying to go (vision and strategy)? What changes
do we need to make to get us there (organizational design)? Keep it simple and the
organization has a far better change of landing in the right spot when it comes to
organizational design.

Choice Design Best Suited for Organization, Not Leadership


There are five pervasive principles which have to underpin the work of finding the
best design for the organization:
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1. There are both technical, human and strategic requirements;


2. It is an ongoing part of the job of the leader; flexibility is the key;
3. Design emanates from the overall vision and strategy for the organization;
4. Balance the effectiveness for the design and the political dynamics of the
organization; and
5. The ultimate goal of the design is to use creatively the new structural materials
and collateral technologies to achieve a fundamental new architecture that will
focus and unleash the competitive strengths embedded in each organization
(Nadler and Tushman, 1997).
For these reasons, the remaining thrust of this article will highlight the strengths
and weaknesses of various useful design, but there will not be a lot cast on the design
that is a panacea for all organizations; there is no such animal out there and to suggest
such a thing would be irresponsible and a major disservice to leaders and followers
in organizations.

Design Puzzle: What is Out There for Best Use?


With questions as your best asset for this discovery to find the design(s) best suited
for the organization, leaders have to lead the way. Now there is a role for strategic
planners in the process, but leaders must not and cannot delegate away the primary
responsibility of designing the organization for future competitive advantage; it is the
leaders job to do and this is stressed because there are some unenlightened leaders
who see it differently. There is no shortage of organizational transformational
movements, and redesign efforts out there that have found failure at this point after
the best made plans have been developed and implemented.
For the less complex organization there is the basic structure of organization often
referred to as the Simple Structure (i.e., Mrs. Fields Cookie Shops). It is commonly
used when there is little or no competition and when it is for smaller organizations.
The most compelling aspects will be to improve control and eliminate work, so that
the size of the organization can be kept down and direct control can be retained (Groth,
1999). There is a theme needed for control here. However, this design is inherently
less useful when an organization wants to grow and there is a need for increasing
delegation of responsibility. Next, there is the Decentralized Design driven by
entrepreneurial subunits that are loosely connected to a central corporate identity
(McDonalds). These organizations must be prepared to honor the subunit autonomy;
there is a possible danger of losing harmony and synergy across the organization to
achieve common goals (Robey, 1986).
This brings the subject of organizational design full circle to the more traditional
Functional Design where all human knowledge and skills with respect to specific
activities are consolidated, providing a valuable depth of knowledge for the organization.
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The main weakness of the functional design structure is a slow response to


environmental changes that require coordination across departments. In the global
marketspace, leaders should proceed with a great deal of caution in trying to maintain
or institute the functional structure with escalating competition at the local levels around
the globe (Daft, 2007).
In business environments where innovation is king and being first to market has
a premium associate with it, the design structure is critical. For these situations, the
Adhocracy Design may fit the need nicely. It is a highly organic structure with little
formalization of behavior with less formalization, standardization and reverence for unity
of command. Lack of good and consistent communications, conflict and aggressiveness
are necessary elements of the model (Mintzberg, 1983).
As a means to foster speed, flexibility and timely decision-making, the Divisional
Structure may have merit for some organizations. Pioneered in the automobile and
manufacturing industries, it is designed essentially to foster self-contained units. While
in the Functional Structure, subunits have the propensity to become so engrossed with
their specialty that they forget the organizations overall goals. Although the Divisional
Structure addresses this problem by placing full responsibility in the hands of the
divisional manager, it has a major weakness associated with duplication of resources,
and activities stimulate conflict and coordination problems (Robbins, 1983).
Given the increasing global nature of business, there are a few designs which are
specifically crafted for this environment: (1) Multi-Domestic; (2) Transnational;
(3) Global; and (4) International. Below is a chart to compare and contrast the similarities
and differences (Table 1):
Table 1: Comparative and Contrasting Images of Structural Designs
Types of Structure
Multi-Domestic

Nature of the Structure


Decentralized, geography based
Used for new market entry
Must be monitored for efficiency

Transnational

Decentralized and centralized focus


Good for varied strategies
Very complex

Global

Centralized approach
Similar products and services worldwide
Low on optimal sourcing and local responsiveness

International

Centers of excellence or hub for each product


Maximize outsourcing
Low local responsiveness due to same products (Burton et al.,
2006)

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Design Road to the Future: Boundaryless Organization


All this said, the key is to remain flexible rather than sticking to a single design for
life. This kind of thinking is doomed to fail the organization. This way of thinking is
associated with the old critical factors of business: size, role clarity, specialization, and
control. In this new era, this thinking has been replaced with a new paradigm: speed,
flexibility, integration and innovation. In their quest to achieve the success factors of
the 21st Century, organizations must confront and reshape four types of boundaries
regardless of the desired structures in the future (Table 2).
Table 2: Types of Boundaries
Boundaries

Old Thinking

New Thinking

(1) Vertical

Hierarchy

Ideas

(2) Horizontal

Walls between Rooms

Cross Functional

(3) External

Barriers between Stakeholders

Efficiency, Results

(4) Geographic

Isolation

Innovation (Ashkenas et al., 2002)

Conclusion
This paper has demonstrated that there is not a silver bullet out there for every
organization to use as the ultimate design to advance the cultural and strategical
objectives. We are well-aware that this makes the leaders task of finding and
implementing a design even more challenging; however, this discovery when done
well, has the potential of distinguishing the great organizations from the rest. There
is no substitute for the role of effective leadership and followership in this
discovery for the right design. Reason being, the leader has to leave the organization
in a better posture than when he or she arrived and a good design helps in this
quest (Peterno, 2009).

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