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Read Exhibit 11-14 on page 291 of your text, and answer the following questions:
What type of organization was ISE Communication before the reorganization: matrix, functional, or project? Explain your reasoning.
Why did the employees miss the bureaucratic control of the organization?
Give an example of a company that you find in your research that supports your point.
Exhibit 11-14 on page 291 is below
When an organization removes existing structures to provide empowerment in a more democratic fashion, it may find the ambiguity associated with the new structure uncomfortable and respond by imposing a more controlling and bureaucratic structure than the one it sought to replace. This highly rational but powerfully oppressive bureaucracy is known as the iron cage.134 Out of a desire for order, people continually rationalize their bureaucratic relationships, making them less negotiated (i.e., less based upon commitment) and more structural.135 As a case in point, see Exhibit 11–14.
EXHIBIT 11-14 Tightening the Iron Cage
ISE Communications is a small manufacturing company in a mountain state, located in a metropolitan area. ISE manufactures voice and data transmission circuit boards for the telecommunications industry. It employs a total of 150 employees, 90 of whom are in manufacturing. Originally, ISE was a division of a large telecommunications firm. The ISE management team bought it outright in 1984, although the large firm still remains ISE’s largest customer. ISE has traditional manufacturing, engineering, sales, marketing, human resources, and executive staffs. ISE converted from traditional manufacturing into self–managing teams in 1988.
In 1988, the CEO of ISE made a commitment to restructure the organization into self–managing teams. Literally overnight he reconfigured the physical workspace and created several work teams called Red, Blue, Green, Orange, and so on. Before the change, the structure of ISE was such that three levels of managerial hierarchy existed between the vice president and the manufacturing workers. Line and shift supervisors formed the first managerial link. The assembly line in manufacturing organized the plant, with workers manufacturing circuit boards according to their place on the line. Workers had little input into work–related decisions (i.e., not even parallel suggestion involvement). Management disciplined all workers and interviewed and hired all new workers.
After the change, the managerial hierarchy extended directly from the new manufacturing teams to the vice president. Team work areas replaced the old assembly lines. Teams were responsible for all aspects of the product: complete fabrication, testing, packaging, and so on. Team members took on management issues within each team, electing someone to coordinate information, and to discipline, interview, hire, and terminate members. When workers reported to the plant on the next business day, there was mass confusion and chaos. What happened in the ensuing months was surprising.
ISE is an example of a company in which upper management moved from bureaucratic control to participative management. However, many of the effects were not intended. Three distinct phases were observed over a 4–year period of change.
In the first phase, the challenge for the teams was to learn how to work together and supervise themselves functionally, that is, how to get a customer’s order manufactured and out the door.
In the second phase, the teams had to deal with the socialization processes that had shaped the norms of the group. The company prospered, and a large number of new workers had to be integrated into the teams; workers were unfamiliar with the existing teams’ value consensus, and they posed an immediate challenge to the power relationships that the older employees had formed.
In the third phase, the company began to stabilize and turn a profit; teams’ normative rules became more and more rationalized; and simple norms (e.g., we all need to be at work on time) became highly objective rules similar to ISE’s old bureaucratic structure (e.g., if you are more than 5 minutes late, you’re docked a day’s pay). The social rules were more rigid. The senior group members took on the role of leader within each team. Not surprisingly, many employees were frustrated and confused. It is a bitter irony that some looked back fondly on the days in which there was greater bureaucratic control.
Source: Barker, J. R. (1993). Tightening the iron cage: Concretive control in self–managing teams. Administrative Science Quarterly, 38, 408–437.
Making the Team-A Guide for Managers
by Leigh L. Thompson
© 2011, Pearson
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