Mullins L.J. Management and organisational behaviour, Seventh edition

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CHAPTER 22 ORGANISATION DEVELOPMENT (CULTURE, CONFLICT AND CHANGE)

(After the meeting, Jane and John undertake a short

post-mortem. They walk across the car park.)

John: Well, what did you think of that? That’s just

typical of what we’re dealing with. The pressure

from the top demands change and the group has

not really come to terms with it.

Jane: Their reactions were not surprising given the

speed and magnitude of the proposed changes. It’s

one thing seeing it all on paper but when we actu-

ally turned up, the reality must have hit them hard.

John: They will all go off to their little groups, chew

it over and get ready for the next meeting. I know

things are not what they should be but no one ever

says so. You’ve certainly got your work cut out.

Jane : Yes, we have but that’s our role. I suspect that

what they are feeling and articulating holds true for

others in the organisation as well. Thus, the meeting

was not what we expected but it did give us a lot

of information about how we might arrange the

next meeting.

(The two parties bid farewell.)

YOUR TASK

Discuss what you see as the main issues and ques-

tions arising from this case.

CASE STUDY 22.3

A matter of life or death: managing knowledge at an NHS Trust

Reddix Hospital* is an NHS (National Health

Service) Trust Hospital in the UK. The hospital is

located between Leicester and Birmingham and

serves a population of over 900 000, a quarter of

whom are senior citizens. About one tenth of the

total female population is suffering (or is suspected

of suffering) from some type of cancer. Most of the

senior citizens are suffering from medical conditions

that are typical of their age profile (i.e. arthritis and

cardiovascular diseases – in particular, congestive

heart failure).

The hospital has about 7000 annual admissions, a

total of 375 intensive care beds, and a general

patient capacity of about 2000. The hospital aims to

be an excellent care provider for cancer and cardio-

vascular patients. The hospital employs around 200

specialists whose expertise includes breast cancer,

cardiovascular diseases, musculoskeletal diseases and

paediatrics. The hospital also employs around 400

nurses and other caregivers. The hospital has 100

per cent integrated faculties for medical tests relat-

ing to cancer and cardiovascular prognosis and

diagnosis; the hospital information system is com-

posed of the following six systems:

1 Radiology Information Systems (RIS)

2 Patient Administration System (PAS)

3 Laboratory Information Systems (LIS)

4Clinical Patient Record (CPR)

5 Pharmacy Systems (PS)

6 Nursing Systems (NS)

This lack of interoperability between different, but

related, healthcare systems has been cited as one of

the main challenges facing the hospital management.

Other related problems stem from the fact that staff

are overworked and consequently suffer from low

morale; there is a relatively high employee turnover

rate. A blind staff opinion survey of all caregivers

confirmed that most of the senior and junior doctors

felt that they were working on average twice the stip-

ulated hours. The survey also indicated that most

caregivers felt that there was virtually no clinical

information governance. These problems are exacer-

bated by the recent annual NHS performance ratings

(carried out bi-annually) where Reddix Hospital was

ranked in the bottom 10 per cent for patient satisfac-

tion. Worse still, in both the core clinical expertise

(cancer and cardiovascular), the hospital was ranked

in the bottom 5 per cent of all NHS trusts offering

expertise for cancer and cardiovascular treatments.

The Trust report stated that the one of the main rea-

sons for the low ratings was that about 10 per cent of

their patients had suffered from adverse reactions to

drugs while under medical care.

The report alarmingly confirmed that in about 60

per cent of the adverse reactions, patients had suffered

from serious, life-threatening, or fatal consequences.

935

936

PART 8 IMPROVING ORGANISATIONAL PERFORMANCE

The Trust report also pointed out that as a result of

these reactions while under medical care, High Courts

had awarded financial penalties of over £2.75 million

against Reddix in over 15 cases. The report goes on to

state that a large number of specialist nurses and other

caregivers were not aware of the best practices and/or

were not following them. The report castigated the

Hospital Administration System as one that belonged

to a bygone era and was very concerned about the

non-availability of patient medical files to the con-

cerned caregivers when required. The hospital is

highly unlikely to meet the NHS target of ensuring an

IT infrastructure that will ensure caregivers have full

electronic access to all of its NHS patient records.

Sickness and absenteeism was twice the NHS average

and the report felt that this could be symptomatic of

the underlying problems at the hospital.

Senior managers brought in outside consultants,

specialists in management and healthcare organisa-

tions, with a brief to examine the issues highlighted

in the report. The consultants carried out a detailed

investigation and presented the following key

points to senior management:

■ The fundamental IT problem at Reddix is that

they were using a centralised computing architec-

ture to support all IT applications. Some of the

software in use was created about thirty to forty

years ago. The consultants added that this soft-

ware is characterised by being written in a

proprietary language, specifically made to func-

tion on a particular hardware platform, and most

importantly, had very limited interfaces (connec-

tions, ability to communicate) with other

healthcare information systems (clinical, diagnos-

tic etc.). Moreover, they did not have the ability

to interconnect with common desktop applica-

tions (word processing etc.).

■

There has been a significant evolution in system

architectures that form the substrate of IT applica-

tions. Organisations have evolved from a

centralised to a distributed computing architecture.

This change of emphasis in system architectures

has been accompanied by the emergence of

client–server and object-oriented (OO) technolo-

gies. By the 1990s, these two technologies had

signalled the coming-of-age of the distributed com-

puting architecture. They added that most NHS

trusts had made the transition and suggested that it

was imperative that Reddix do likewise.

■ Reddix should invest in a Knowledge Management

(KM) system to reduce the serious medical errors.

KM has been defined as a multi-disciplinary para-

digm, which uses technology to support the acqui-

sition, generation, codification and transfer of

knowledge in the context of specific organisational

process. Explicit knowledge typically takes the

form of company documents and is easily avail-

able whilst tacit knowledge is subjective and

cognitive and as such requires interpretation.

Explicit knowledge can be easily documented and

is generally found in the form of written manuals,

reports or in electronic databases. It is easily acces-

sible and, in many cases, available on an

organisation’s intranet.

■ Reddix does not possess a secure information

security mechanism (which would ensure that all

the available clinical information is sufficiently

encrypted and encoded). Reddix needs to invest

in a practical Healthcare Information Security

system that would allow it to keep, in the form of

secure logs, records of access to sensitive clinical

data. Furthermore, the proposed Healthcare

Information Security system would ensure that

these secure logs are stored in a format that is

conducive to long-term storage.

■ Reddix need to ensure that their organisational

structure is remodified to reflect how work is car-

ried out (i.e. healthcare workflow processes) and

how these can be improved. This will require

optimising all organisational capabilities at

Reddix. Once this is achieved, a new holistic

organisational structure will emerge – one that

can facilitate innovation and creativity.

DISCUSSION

The main incentive behind the knowledge manage-

ment initiative was that the rapid advances in

healthcare and in particular in biomedical know-

ledge has rendered extraneous the concept of a

healthcare expert. It is no longer possible for health-

care stakeholders to possess all the pertinent

knowledge in their domain of specialty. In order for

Reddix’s clinical practitioners (e.g. consultants, gen-

eral physicians, and nurses) to overcome their low

NHS ratings they would have to acquire proficiency

in understanding and interpreting clinical informa-

tion so as to attain knowledge and wisdom whilst

dealing with large amounts of clinical data. Clinical

data would be dynamic in nature and would call for

the ability to interpret context-based healthcare

information. This challenge cannot be met by the

existing IT infrastructure at Reddix.

The consultants argued for the introduction of a

KM system, which integrates patients right from

Case study 22.3 continued

CHAPTER 22 ORGANISATION DEVELOPMENT (CULTURE, CONFLICT AND CHANGE)

their entry into the hospital and follows them

throughout the process of care. In particular, the

proposed KM system would streamline clinical

knowledge into the workflow of healthcare

processes at Reddix. The proposed KM system would

integrate the patient electronic patient records (EPR)

that are held by the NHS with the process of physi-

cians and GPs ordering medical tests or medications.

The extension of the KM system would allow the

integration of evidence best practice rules into the

system, thereby also tackling the issue that care-

givers at Reddix were not using the prevailing best

rules for clinical diagnosis and prognosis.

In the proposed system, when the physicians and

GPs would order a test or medication, the system

would use an Artificial Neural Network that would

run ordered tests and medications through a series

of checks and decision rules to check if the patient

was allergic to a drug or if any two drugs or tests

interacted badly with each other. This would help

Reddix to lower the 10 per cent figure of their

patients suffering from adverse reactions to drugs

while under medical care, an instrumental issue in a

low performance rating by NHS.

However, the consultants added that there is a

limit to what technology can achieve and that

Reddix would ultimately have to re-orient their

organisational culture and realign it with their new

holistic organisation structure (that incorporates

both new and redesigned existing operational

processes and structures), so as to possess both

formal and informal aspects of the knowledge envi-

ronment. For the KM initiative to succeed, it is

important that Reddix creates a ‘knowledge sharing

culture’. As a prerequisite, Reddix would have to

shift their emphasis to deal with the intangibles of

knowledge, institutions and culture. Finally, for the

KM system to work, Reddix would have to combine

all three of their integral healthcare system compo-

nents (i.e. people, processes and technology).

* Reddix is a purely fictitious Trust.

Rajeev K. Bali, Biomedical Computing Research Group (BIOCORE),

Coventry University and Ashish N. Dwivedi, Northampton Business

School. Reprinted with permission

YOUR TASKS

(a) What strategy could Reddix adopt to undergo a

successful culture change process?

(b) Describe the steps that senior management would

have to undertake in order to create, develop and

reinforce a pervasive knowledge culture.

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Use the Financial Times to enhance your understanding of the context and practice of management and

organisational behaviour. Refer to articles 26 and 27 in the BUSINESS PRESS section at the end of the

book for relevant reports on the issues explored in this chapter.

But the purpose of management and organisation

development activities is not to gain high scores

on review forms. It is to have some kind of

beneficial impact on the organisation. And since

management and organisation development does

not take place in a vacuum: and since it may well

take time for the beneficial impact to take effect,

‘proving’ effectiveness becomes fraught with all

kinds of complications so long as we continue to

position management and organisation

development within some form of causal

framework.

Keith Patching

Management and Organisation Development, Macmillan Business (1999)

Every work organisation is concerned with

being effective. Upon the attainment of its aims

and objectives rests the success and ultimate

survival of the organisation. The quality of

management is central to organisation

development and improved performance. There

are, however, a multiplicity of variables which

impinge upon the successful organisation. The

manager needs to understand the importance

of improving the overall performance and

effectiveness of the organisation.

LEARNING OUTCOMES

After completing this chapter you should be able to:

 explain the importance of effective management and

detail an integrated model of managerial behaviour

and development;

 evaluate the main features and requirements of the

management development process;

 explore the importance and effectiveness of

management education, training and development;

 assess the nature of organisational effectiveness and

basic attributes for organisational success;

 examine the benefits of the learning organisation, TQM

and Business Process Re-engineering;

 provide criteria for an evaluation of organisational

effectiveness;

 review the importance of management development,

and attempts to improve organisational performance and

effectiveness.

MANAGEMENT DEVELOPMENT

AND ORGANISATIONAL

EFFECTIVENESS

Photo: Crispin Hughes/Panos Pictures

Previous chapters of this book have emphasised the importance of management as an

integrating activity which permeates every facet of the operations of the organisation.

Management is the cornerstone of organisational effectiveness, and the contribution to

economic and social needs of society. This applies as much to public sector and service

organisations as to any other industry. The quality of management is one of the most

important factors in the success of any organisation. For example, a major global study

of managers and workers undertaken by Proudfoot Consulting reports that inadequate

management is a major cause of lost productivity, and among key factors noted in the

report were absence of people skills and inadequate management training.

Managers need a balance of technical, social and conceptual knowledge and skills,

acquired through a blend of education and experience. There is, therefore, a continual

need for managerial development. The organisation must ensure the development of

both present and future managers. Stern draws attention to the importance of manage-

ment education, training and development as a matter of vital strategic importance.

Competition and the pace of change in business require continuous improvement – and that

means continuous learning … Today, learning and development opportunities rank high among the

concerns of talented employees. Support for management development, in whatever form, is per-

haps the strongest weapon that a business can use in its struggle to retain the best employees.

However, as Stewart points out, there is a danger that enthusiasm for management

selection and development may place too much emphasis on the manager and too

little on the organisation. The behaviour of managers is also affected by the position in

which they are placed.

Although we must continue to do all we can to improve the selection and training of managers,

we should not think of good managers as the sole, or even necessarily the most important factor

in successful management. The culture of the organization, that is the ways that people custom-

arily behave towards each other, is important in determining how well the organization works.

This is more widely recognized today.

Attention must be given therefore to both management development and organisa-

tional effectiveness.

There is no single, agreed definition of management development. A common view is

that whereas training is concerned with the achievement of effective performance in

the manager’s present job, development is concerned with preparing the manager for

expected changes in the job, or for an anticipated future job or role. Nevertheless,

management development is likely to include at least an element of training.

However, according to Lilley, ‘in truth, Management Development is a very inexact

science’. The best method of developing effective managers continues to be a subject

for debate and there are a number of competing models of those who seek to improve

management performance.

■ There is nothing you can do – management is an inherited talent driven by charac-

teristic personality traits and charisma.

■ It’s all down to experience and the needs of the moment – better performance is

achieved through pooling of minds and sharing experiences that focus on common

issues and problems.

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PART 8 IMPROVING ORGANISATIONAL PERFORMANCE

THE IMPORTANCE OF EFFECTIVE MANAGEMENT

THE MEANING AND NATURE OF MANAGEMENT DEVELOPMENT

■ Become a better manager by taking a course – formal structured programmes on

knowledge and analysis such as MBAs, and business seminars.

■ Performance is the only criterion, and competence is of the essence – the defini-

tion of generic performance standards such as NVQs, measured and assessed

through evidence and observation.

Lilley suggests that although no particular creed has yet developed in management

development, no single one of the four models possesses the monopoly of truth and

they can be mixed. They can all have something worthwhile to offer.

A more general interpretation views management development as an integral

part of the process of organisational development. For example, in his recent study

of Europe’s top companies, Heller refers to the need for new managers and new meth-

ods to obey the imperatives of a dramatically changed environment.

Today, managements whose minds and deeds are stuck in the status quo are obsolescent, weak

and failing. In the next fewyears, they will be obsolete – and failed. Renewal and nimbleness

have become paramount necessities for the large and established. For the younger business,

staying new and agile is equally imperative.

Management development is equally as important in the public sector as it is for pri-

vate enterprise organisations. For example, the Local Government Management Board

has drawn attention to the importance of the development of management skills,

competencies, attitudes and qualities throughout all levels of local government organ-

isations.

As another example, the Institute of Administrative Management has drawn

attention to the importance of developing managers and identifying leadership

potential in schools.

Coaching empowerment and support

An environment of rapid change, technological innovations and increasing business

competitiveness has highlighted the growing importance of management develop-

ment. In particular, the general movement towards greater employee involvement and

making things happen through people has emphasised an integrating rather than a

controlling style of management. In addition to personal competence in their own

areas of specialisation, the nature of management requires a climate of coaching,

empowerment and support.

In Chapter 10 attention was drawn to coaching and men-

toring. Mentoring requires a set of skills that include the role of coach. Stern suggests

that a valuable mentoring relationship is worth nurturing for managers. ‘The experi-

ence of senior colleagues is a valuable asset and some businesses have introduced

mentoring programmes in a deliberate attempt to capture it.’

Clarke refers to the changing role of the manager and suggests that the manager of

the future will have to master three specific roles, or survival skills – leader, coach and

facilitator.

■ The role of leader involves the skills of focusing on the wider picture, involving

employees in implementation, and establishing an environment in which people

can operate and have enough space for creativity.

■ The role of coach involves the skills of creating an environment where change can

thrive, and bringing abilities to the surface by building up confidence and building

upon capabilities.

■ The role of facilitator involves the skills of moving the organisation forward and

achieving continuous improvement in performance, encouraging the growth of new

ideas and bringing the best out of employees.

CHAPTER 23 MANAGEMENT DEVELOPMENT AND ORGANISATIONAL EFFECTIVENESS

943

Patching points out that different managers often have different theories concerning

how management development and organisation development should be planned and

implemented, and identifies five different approaches favoured by managers.

■ The ‘top down’ approach – all activities are seen as part of a grand plan directly

driven from the top of the organisation and with a direct and constant involvement

from senior managers.

■ The ‘learning vanguard’ approach – the only sustainable competitive advantage

comes from the organisation’s ability to learn and all activities should push people

to the leading edge of learning.

■ The ‘empowerment’ approach – based upon empowering managers at all levels to

seek their own development as appropriate.

■ The ‘community’ approach – organisations are best served by people who share

the same language and follow the same processes in similar ways.

■ The ‘financial’ approach – like other activities within the organisation it requires

investment not only of time but also of money, the cost of doing the activities and

the opportunity costs involved.

Management development is concerned not only with improving the effectiveness of

individual managers but also with an improvement in management performance as a

whole and organisational effectiveness. To be fully effective, management develop-

ment requires an integrated approach related to the development of the organisation

as a whole. And this includes even at director level in the boardroom. ‘No matter how

experienced directors are, they can never be too highly qualified or too experienced to

ignore the need continually to enhance their professional competence.’

The wide variety of organisational settings found within the work situation makes spe-

cial demands upon its managers. There is a dichotomy between the application of

general management theory in influencing the behaviour and performance of man-

agers, while at the same time accepting the need for individuals to manage according

to situational demands. Particular models of managerial behaviour applied to specific

types of organisations have little relevance, and if anything provide a constraint on the

need for an open and fluid interpretation of management development.

Using accumulated knowledge of management theory, Mullins and Aldrich have con-

structed an integrated model of managerial behaviour and development. The model

relies on basic management and behavioural theories for its structure, and situational

demands for its adaption.

(See Figure 23.1.)

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PART 8 IMPROVING ORGANISATIONAL PERFORMANCE

Different

approaches to

management

development

strategy

An holistic

approach

Management development is becoming an holistic process which delivers benefit of a per-

sonal nature as well as enabling the success of the organisation. Moreover, this process is

directed at more than those who are recognised as managers by title; management skills

are needed at all levels to varying degrees. Personal development is a partnership between

the individual, the organisation and the provider. Each making an essential contribution to

receive benefit. Few would disagree with this concept but fewer still are putting it into prac-

tice. There is a fine balance between delivery of benefit to the organisation and to the

individual. Ideally development programmes should do both simultaneously.

Glyn Macken, Deputy Director General, The Institute of Management

AN INTEGRATED MODEL OF MANAGEMENT DEVELOPMENT