The Future Of Hierarchical Management Structures

Introduction

In the 21st century, organizations have seen the need to adapt to changes taking place in the business environment (Tidd & Bessant, 2011). One of the factors that has prompted change in organizations is the shifting economy. Currently, there is a shift from an industrial economy to a knowledge driven economy (Brown & Osborne, 2012). The current competition between companies has changed and is more inclined to creativity than prices of goods and services. The nature of work within organizations is also transforming from repetitive pre-arranged tasks to tasks that are more cognitive and spontaneous. This also applies to the managing styles and employee expectations.

Effective adaptation to these inevitable changes requires companies to encourage a creative and innovative organizational culture (Singh & Waddell, 2004). There are many organizations that are being run by the hierarchical management structure, which is characterized by strict adherence to chains of command (Daft & Marcic, 2010). This limits the flexibility of an organization by slowing down decision making processes. As a result, such structures limit creativity in organizations (Bilton & Cummings, 2010; Tseng, 2011). With the future expected to have a higher demand on creativity and change management, it is highly likely that hierarchical organizational structures shall be replaced by structures that emphasize more on innovation and creativity.

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Despite the increase in the focus on creativity and innovation, it is difficult to abolish the hierarchical structure. While some companies such as Apple, Microsoft and Google stand out for having abolished hierarchical management structures, such traditional organizational approaches still remain appropriate for many companies. It is difficult for current hierarchies to self-destruct. Whether such structures shall be replaced by an innovative and creative culture in the near future is a subject of debate. In this regard, this paper discusses whether in the near future, management in organizations shall involve nurturing of creativity and innovation, which shall reduce hierarchy in organizations. Some of the areas that are covered in relation to this include changes in the global economy, factors affecting innovation in the workplace and change management in organizations.

Changes and Shifts in the Global Economy

According to Henry and Bruin (2011), there is an on-going shift from a traditional knowledge economy to a creative economy. Creativity, in this context, can be defined as the process by which novel ideas are created. Not long ago, creativity was confined to arts like photography, music and painting. However, many companies have started to realize that creativity can also be applied in business, albeit, in a manner that is somewhat different from that of arts and humanities.

Whilst creativity in business is about developing new ideas, it also involves solving issues that affect the business operations innovatively (Burkus, 2013). The current fast moving economy has made companies push their efficiencies to the limit so as to keep up with the market competition and ensure effective delivery of goods and services to clients. To overcome the limits that knowledge based organizations have in delivering quality and satisfaction to clients, many companies are opting to differentiate themselves from their competitors by becoming innovative and creative (Brown & Osborne, 2012).

An example can be drawn from the use of technology over the years. For most companies, getting ahead of the competition simply required the acquisition of the latest technology that existed at the time. For instance, the invention of computer technology revolutionized record keeping, communication and other operations. Organizations that acquired and utilized this technology gained an edge over their competitors. However, the accessibility of computer technology has become easier with time and currently, almost every company utilizes it. Therefore, being ahead of the competition in business has shifted from simply acquiring computer technology to acquiring and utilizing it in a way that is creative and unique in the industry. This is points out to the fact that lack of creativity in present-day organizations can be detrimental to organizational performance. Technological development, globalization forces, increased competition, market demand and expectations have all led to the growing interest on nurturing employee creativity in the workplace.

Some of the companies that have been known to nurture creativity and innovation include Apple, Facebook, Microsoft and Google. Even during the past recession period, entrepreneurs in Silicon Valley continued to establish start-up companies founded on creativity. According to Dervitsiotis (2011), the success of Apple has been achieved by recognizing the crucial role that innovation plays in present day businesses. To attain its business objectives, Apple Inc hires employees that are dedicated to creating innovative and unique products. With reference Jobs’ interview published in The New Yorker by Surowiecki (2011), the company has maintains its competitiveness in the computer industry by designing products that are user friendly to a wide range of customers. Some of these products include the iPod and iMac computer that were innovatively manufactured and advertised, making Apple to stand out among its competitors.

As companies recognize the need to be creative in the design of their products and services, they have also realized the importance of creativity in their management. According to Von Held (2012), effective management of a creative workforce requires motivation and inclusion. Companies ought to create a culture or environment that allows employees across all ranks to feel important by encouraging them to make contributions towards organizational development. One of the ways in which this has been achieved is through encouraging open horizontal communication structures.

Whereas the trend has been towards a creative and innovative work environment, critics have pointed out several setbacks that creativity and innovation can cause in an organization. One typical characteristic of innovation is the fact that it involves taking risks, which may even threaten the existence of the organization. In addition, outcomes of innovative ideas or changes within the organization are usually unknown. Whilst some innovative ideas have positive revolutionary outcomes, there are also chances of failure (Henry & Bruin, 2011). Failed innovations may be detrimental to organizations, especially if the innovation involved high costs.

Factors to be managed to Enhance Creativity in Organizations

There are several factors affecting creativity that have been identified by researchers. According to Andriopoulos and Lowe (2000), organizational creativity is affected by the organizational culture, organizational environment, management styles and structures, skills and resources. Amabile et al. (2004) argued that creativity is influenced by employee motivation, management practices, organizational resources and group characteristics. Other factors affecting individual creativity include personality, IQ levels, capabilities and dispositions, among others. This section explains how management of these factors can enhance creativity and innovation at the workplace.

Employee Motivation

Researchers have established that for employees to be innovative in the organization, they ought to have the passion and drive to do so. Employee motivation can increase their passion for innovation if it is managed appropriately. As argued by Daft and Marcic (2010), employee motivation is a complex issue that is influenced by social, biological, emotional and intellectual factors. Therefore, there are several strategies that have to be effectively managed so as to keep employees motivated and encouraged to be innovative.

One of the strategies that can be used by corporations to increase employee motivation is communication. While vertical communication that characterizes hierarchical management structures may be ideal in some situations, innovative organizations thrive more on horizontal communication structures (Tidd & Bessant, 2011). It is necessary for the organization’s management to frequently communicate with its employees on the organization’s vision. In addition, organizations also need to recognize and reward individual innovative contributes towards the overall good of the company. Rewards motivate employees to compete constructively and as a result, encourage innovativeness and creativity.

Organizational Resources

According to Yazdani et al. (2011), employees are among the most important resource in the organization. Therefore, innovative organizations ought to hire employees that have the personality and intelligence needed to make creative contributions. . a classic example of a creative individual was Einstein, who made contributions in various fields are . In addition to his contributions to Physics, it is documented that he had interests in visual arts (Runco, 2010). Other traits that human resource managers need to look for when hiring include mental flexibility, originality in thinking self-confidence and the will to take risks.

Time and financial resources also have an influence on the creativity or innovation in an organization. These resources ought to be managed effectively because their availability can either support or suppress creativity of employees (Amabile et al., 2004). Organizations need to establish a “threshold of sufficiency” within which these resources can positively contribute to creativity. Once this threshold is set, companies can be able to avoid allocating either insufficient or too much time and financial resources.

Organizational Environment and Culture

The conduciveness of an organizational environment for creativity can be gauged from the levels of employee participation, employee freedom of expression and experimentation and other creativity stimuli available within the organization (Amabile et al., 2004). One organization that has effectively managed its culture and environment to encourage creativity among employees is Google. For instance, the company offers social amenities to employees that are not offered by other companies. These include cafe stations that offer free food for employees, rooms for exercising and entertainment rooms where employees can play several games.

Whilst these amenities do not directly contribute to the profitability of the company, they create an environment that allows them focus more on their contribution towards that growth of the company without thinking about how they will cater for these needs while at work. Hierarchical barriers at Google are limited, encouraging employees to work closely and learn from each other regardless of their positions in the firm. Therefore, creating an ideal organizational environment, keeping employees motivated and allocating resources that are within the threshold of sufficiency for creativity are among the ways of encouraging creativity and innovation among employees.

The Change Management Process

With the inevitability of change in present day organizations, several researchers have established steps that ought to be undertaken in managing change. Reasons that necessitate change include the need to overcome challenges that are posed by the dynamism of the business environment (Kotter, 2007). The need for organizations to effectively manage change is drawn from the fact that it may affect several business stakeholders that include suppliers, employees, customers and distributors. Whereas good change management procedures and practices are likely to improve the brand position of the company, poor change management is likely to adversely affect its performance. Anderson and Anderson (2010) point out that some of the impacts of poor change management include reduction in morale among employees and a drop in the company’s competitive capability.

Kotter (2007) suggested an eight-step model of managing change in an organization. In establishing this model, he identified the errors that are commonly made by leaders in initiating change and based his change management model on these errors. The eight steps presented in the table below.

1. Establishing urgency. This involves the creation of a sense of urgency within the organization to motivate involved parties to start the change process.
2. Forming a powerful spearheading coalition. Involves identification of organizational members to form a cross-level team that is capable of leading the rest of the company in implementing the identified change.
3. Development of the change strategy. Involves formulating a strategy for implementing the change process. This should consider all the factors influencing the change process.
4. Communicating the change strategy. The change vision should be presented to all organizational members and stakeholders that will be involved in the process. The most effective communication paths ought to be used to ensure speedy and efficient message delivery in the organization.
5. Elimination of barriers. This involves empowering a broad based action that removes barriers to the change process and targets certain elements of change in the transformation of the organization.
6. Generating short-term wins. This is achieved by setting short-term goals that contribute to a larger long-term goal. Short term wins can be generated by rewarding employees who contribute towards meeting the short-term goals to keep them motivated.
7. Consolidating the short-term gains. Credibility from several sort term wins is collected to create a bigger change. Here, a reinvigoration is brought to the process.
8. Anchoring changes into the organization. Involves reinforcement of transformations made to be part of the organizational culture. This enables the change to be passed on in case of a change in the management or when employing new members of staff.

Even though Kotter’s approach has been approved by many researchers, critics have pointed out some flaws associated with it. For instance, O’keefe argues that it assumes that changes are one-time processes that promise stability if managed meticulously. However, the existing global uncertainty does not give an assurance that the intended goals of the change will be attained (O’Keefe, 2013).

According to Anderson and Anderson (2010), effective change management benefits individuals and the overall organization. It benefits individuals by enabling them to maintain or improve their morale and performance before, during and after the change process. It also increases the acceptance of employees to the change process (Andriopoulos & Dawson, 2009).Benefits of change management to the organization include enabling it to respond effectively to client demands even during the change process. It also enables the company to assess its performance by comparing its state before and after implementation of the change.

Ineffective change management, on the other hand, can distort the transition of the company from its old state to the intended new state. With reference to Kotter’s eight steps, inefficient change management may cause the process to stick in one of middle stages. Therefore, it is important for organizations to ensure that they avoid negative impacts associated with the change process by ensuring that it is managed effectively.

Conclusion

This paper has presented an in-depth discussion on the need of change and innovation in present-day organizations. While the hierarchical structure of management has several benefits, the need for organizations to adjust to the current dynamism in economic and social conditions has prompted many companies to go for management techniques that nurture creativity and innovation. Some of the organizations that have attained high levels of success through encouraging innovation and creativity include Apple and Google.

The shift in the global economy from knowledge to creativity has also been extensively discussed, which also explains why hierarchical management structures are likely to be less evident. Among the factors that have to be effectively managed to enhance creativity are employee motivation, the organizational culture and the organization’s resources. Steps to be undertaken in managing change as suggested by several researchers have also been extensively discussed.

References

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