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2019 | OriginalPaper | Chapter

6. Organizational Squares: How Straight Lines Limit Vision

Author : Ivan Hilliard

Published in: Coherency Management

Publisher: Springer International Publishing

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Abstract

This chapter looks at the theme of organizational design, and in particular, three of its principal features—organizational structure, organizational culture, and corporate governance. It analyzes them separately, identifying weaknesses in the thinking and application of each, and explains why such weaknesses prevent a more coherent approach to responsible management. It then outlines a more organic approach to organizational design, using the coherency conditions laid down earlier, and emphasizes the underlying importance of organizational culture and the supporting role of structure and governance.

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previous chapter Stakeholder Politics: Why Knowing More Can Also Mean Doing Less

next chapter Employee Worth: Why Every Hour Worked Doesn’t Add Value (but Counts)

Ethical training is one of many aspects of organizational design for promoting responsible behavior.

Examples might include bribing a public official, stealing corporate equipment, or smearing someone of an ethnic or sexual minority. While perhaps it is necessary to state such things are unacceptable, it may be interpreted as simply a way for the company to cover its back, or cause employees to bristle if they feel they are being addressed as people who might otherwise do such things, were the company not on hand to tell them otherwise. This is only compounded when there are indications that organizational decision makers are acting irresponsibly (Lock and Seele 2016).

These categories should be seen as fuzzy sets, which sidestep the binary idea that something belongs to a set or it doesn’t, focusing instead on the level of membership in perhaps multiple sets. Self-interest is not, for example, an issue only of importance when considering governance mechanisms. Nor is corruption training solely a feature of culture. It also needs some guidance and occasionally prodding from the governance system itself, as well as careful consideration of what organization structures will help follow or impede the desired objectives.

NUMMI, the General Motors, and Toyota joint venture is a case in point. Initially, GM did not put sufficient organizational resources behind the transfer of lean production techniques from the NUMMI plant, leading to trainers becoming adrift from the organization and facing stiff resistant to new ideas from plant managers (Inkpen 2008).

There were a wide number of cases throughout the 1990s where the CSR function was simply patched onto existing organization structures, quite often in teams dedicated to either public relations or human resources. As a result, the CSR manager became something of an anomaly, tasked to generate new value for the organization and society, with little authority to do so, in an organization not designed to permit it (Aldama et al. 2009).

New auditing requirements and calls for increased transparency in the wake of a corporate scandal, while welcome, are often only partially successful in preventing future scandals, which come about in the context of a different set of circumstances (Young and Thyil 2008).

This may be for personal reasons such as age or relationship with other board members, or it may be to do with the way the firm’s boardroom processes are structured.

The corporate governance Web site CorpGov.net provides an interesting and up-to-date selection of definitions from a variety of perspectives (academic, practitioner, legal, regulatory) of what corporate governance means. While on the one hand there are notable references to stakeholder needs and ethical considerations, what stands out is the wide number of definitions that focus on shareholder needs, economic performance, and profit making as key objectives (Corp.Gov., n.d.).

Indeed, it has been suggested that the failure of boardrooms to fully embrace this expanded role in the early years of the twenty-first century opened the door to increased demand for more CSR impetus in the corporate world (O’Mahony and Mason 2017).

One example of this increased participation is the growing willingness of investors to vote down or amend pay scales and performance bonuses for executives of companies they have invested in (Proxy Monthly 2016).

For example, in a study of corporate governance in the UK, Cassidy (2003) concluded that large accountancy firms have hijacked the drive for improved corporate governance.

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Title: Organizational Squares: How Straight Lines Limit Vision
Author: Ivan Hilliard
Publisher: Springer International Publishing
Book: Coherency Management
Print ISBN: 978-3-030-13522-5

Electronic ISBN: 978-3-030-13523-2

Copyright Year: 2019
DOI: https://doi.org/10.1007/978-3-030-13523-2_6