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OF THE ENVIRONMENTAL AND ORGANIZATIONAL CONTEXT NATURE OF DIVERSITY Diversity refers to those attributes that make people different

from one another. Primary dimensions of diversity include age, ethnicity, gender, physical attributes, race and sexual orientation. Secondary dimensions include educational background, marital status, religious beliefs, health and work experience. Diversity raises important ethical issues and social responsibility issues as well. It is also a critical issue for organizations, one that if not handled well can surely bring an organization to its knees, especially in our increasing global environment. Globalisation is intensifying workforce diversity in three key ways: (i) (ii) (iii) Growth of the transnational corporations means that increasingly, companies are being owned and managed my people from different countries and cultures. Globalisation results into migration and recruitment of workers from other countries. Globalisation results into an increase in the participation rate of women and minority groups in the workforce. As economies develop, they require greater amounts of labour, resulting into the inclusion of these groups into the workforce and a consequent increase in diversity. MANAGING DIVERSITY Though workforce diversity brings with it numerous challenges, immense benefits can accrue in an organization if diversity is well managed. In a fiercely competitive world where markets are expanding and customers are increasingly rejecting standardized products and services in favour of ones tailored to their needs, workforce diversity can bring substantial benefits. It offers the possibility of more creativity, innovation and flexibility, it provides heightened sensitivity to different customers groupings and a wider pool of talent to draw from. Only by attracting, retaining and motivating workers effectively, including recognizing and promoting the benefits of diversity, can organizations expect to prosper or even survive in an increasingly competitive global economy. This means that organizations have to achieve the essential task of treating workers differently because of their diversity but treating them all 1

fairly. This is a task that can only be achieved if those in positions of power and authority in organizations are prepared to manage ethically. ETHICS IN AN ORGANIZATION Ethics are the inner guiding moral principles, values and beliefs that people use to analyze or interpret a situation and decide what the appropriate way to behave is. At the same time, ethics also indicate which inappropriate behaviour is and how a person should behave to avoid doing harm to another person. Beyond personal considerations, an organization can encourage people to act ethically by putting incentives in place for ethical behaviour and disincentives to punish those who behave unethically. With such measures in place, interests of all groups including women and other minority groups will have been catered for. ORGANIZATIONAL DESIGN AND CULTURE Organization design is the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals. Because of increased global competitive pressures and because of the increasing use of advanced information technology (IT), organizational design has become one of managements top priorities. Today, managers are searching for better methods to coordinate and motivate their employees to increase the values their organizations can create. Organization design and change have important implications for a companys ability to deal with contingencies, achieve a competitive advantage, effectively manage diversity and increase its efficiency and ability to innovate. Types of Organizational Design (1) Horizontal Design As organizations grow and become too complex to manage, they are divided into smaller units. Four commonly used types of horizontal designs include; a) Functional design Means grouping managers and employees according to their expertise and the resources they use to perform their jobs. Potential benefits of this design include: 2

- Supporting skills specialization. - Reducing duplication of resources and increasing coordination within the functional area. - Enhancing career development and training within the functional area. - Allowing superiors and subordinates to share common expertise. - Promoting high quality technical decision making. Potential pitfalls of this design include: - Inadequate communication between units. - Conflicts over product priorities. - Difficult with interunit coordination. - Focus on departmental rather than organizational issues and goals. - Developing managers who are experts only in narrow fields. b) Product design. Means that all functions that contribute to a product are organized under one manager. Product designs divide the organization into selfcontained units that are responsible for developing, producing and selling their own products and services to their own markets. Potential benefits of product design include: - Promoting fast changes in a product line. - Allowing greater product line visibility. - Fostering a concern for customer demands. - Clearly defining responsibilities for each product line. - Developing managers who can think across functional lines. Potential pitfalls of product design include: - Not allowing efficient utilization of success and resources. - Not fostering coordination of activities across product lines. - Encouraging policies and conflicts in resource allocation across product lines. - Limiting career mobility for personnel outside their own product lines.

c)

Geographical design. Organizes activities around location. This design allows organizations to develop competitive advantage in a particular region according to that areas customers, competitors and other factors.

Potential benefits include: Having facilities and the equipment used for production and/or distribution all in one place saving time and costs. Being able to develop expertise in solving problems unique to one location. Gaining an understanding of customers problems and desires. Getting production closer to raw materials and suppliers.

Potential pitfalls include: d) Duplication of functions to varying degrees, at each regional or individual unit location. Conflict between each locations goals and organization and goals. Network Design (Virtual Organization). Subcontracts some or many of its operations to other firms and coordinates them to accomplish specific goals. Managers need to coordinate and link up people from many organizations to perform activities in many locations. Potential benefits of this design include: Brings together the special knowledge and skills of others to create value rather than hiring employees to perform this task. This design can work exclusively on a given project. This design can work with a wide variety or different supplies, customers and other oganizations. Potential pitfalls include: Other organizations can fail to live up to the deadlines that were established. Managers must constantly monitor the quality of work provided by those in other organizations. Employees in networked organizations may not commit to the same values and sense of time and urgency to which employees in the networked organization are committed.

Since this design requires working with many organizations, the lines of authority, responsibility and accountability are not always clear.

(2)

Vertical Design Five aspects of an organizations vertical design include: (a) Hierarchy is a pyramid showing relationship among levels. Reducing hierarchical levels creates a more efficient organization and prompts more people to participate in decision making process. (b) Span of control. Refers to number of employees directly reporting to a person. The optimal span of control is not so narrow that the manager micromanager or subordinates or too broad so that manager loses ability to lead subordinates.

(c) Authority, Responsibility and Accountability Authority is the right to make a decision. By exercising authority, employees accept the responsibility for acting and are willing to be held accountable for success or failure. Responsibility is an employees duty to perform the assigned task. When giving an employee responsibility, the manager should give the subordinate enough authority to get the job done. Accountability is the managers expectations that the employee will accept credit or blame for his work. When managers are reluctant to hold their subordinates accountable, subordinates can easily pass the bulk for nonperformance onto others. (d) Delegation. Is the process of giving authority to a person (a group or team) to make decisions and act in certain situations. In addition to holding an employee accountable for the performance of defined responsibilities, the manager should give the employee the authority to carry out responsibilities effectively. (e) Centralization and Decentralization. These are overall management philosophies that indicate where decisions are to be made. Centralization is the concentration of authority

at the top of an organization or department. Decentralization is the delegation of authority to lower levers of employees or departments. The five parts mentioned can be combined in many ways to build a vertical design. ORGANIZATIONAL CULTURE Organizational culture is a portion of shared basic assumptions invented, discovered or developed by a given group as it learns to cope with problems of external adaptation and internal integration that has worked well to be considered valid and, therefore to be taught to view members as the correct way to perceive, think and feel in relation to their problems. Since organizational culture involves shared expectations, values and attitudes, it exerts influences on individual groups and organizational process. A strong culture is characterized by employees sharing core values. The stronger the culture, the more influential it is on their behaviour. More specifically, organizational culture includes: (1) Routine ways of communicating; seen as organizational rituals and ceremonies and the language commonly used. (2) The norms shared by individuals and teams throughout the organization. (3) The dominant values held by the organization such as product quality or price leadership. (4) The philosophy that guides management policies including determining which groups are included or consulted on decisions. (5) The feeling or climate conveyed in an organization by the physical layout in which managers and employees interact with customers, suppliers and other outsiders. (6) The rules of the game for getting along in the organization or the ropes that a newcomer must learn in order to become an accepted member. Organization culture is more important today than it was in the past because of competition, globalization, mergers, acquisitions, alliances and various increased workforce

developments have created conditions which can be effectively managed by the use of organizational culture. Also a greater need to adapt to these external and internal changes has made organizational culture more important, because for an increasing number of corporations, intellectual as opposed to material assets now constitute the main source of value. Maximizing the value of 6

employees as intellectual assets require a culture that promotes their intellectual participation and organizational learning, new knowledge creation and application and the willingness to share knowledge with others. Creating Organizational Culture The culture that eventually evolves in a particular organization is a complex outcome of external pressures, internal potentials, responses to critical events, and, probably, to some unknown degree, channel factors that could not be predicted from a knowledge of either the environment or the members. Creating a culture just doesnt happen because a group of intelligent, well intentioned managers meet and prepare a document. Imposing a culture may be often met with resistance. It is difficult to simply create core values. Also, when a disparity exists between reality and a stated set of values, employees become confused, irritated and skeptical. Some methods and procedures that managers can use to foster a culture include: (a) Elaborate on history Communicate about and by heroes and others. Leadership and role modeling. Communicating norms and values. Rewarding Career management and job security Recruiting and staffing. Training and development Participative decision making. Intergroup coordination Personal exchange.

Maintaining culture Organizational culture has the potential to enhance organizational performance, individual satisfaction, the sense of certainty about how problems are to be handled, and other aspects of 7

work life. Managers therefore should be concerned about sustaining the existing culture. Ways through which culture can be sustained through: (i) Recruitment, selection and replacement. Culture sustenance can be enhanced by ensuring that appointments strengthen the existing cultures or support a culture shift. (ii) Socialisation it is the process by which organizations bring new employees into their culture. There is a transmittal of values, assumptions and attitudes from the older to the new employees. (iii) (iv) Performance management reward systems can be used to highlight and encourage desired behaviors which may turn to desired values. Leadership and modeling. By executives, managers, supervisors can reinforce existing myths, symbols, behaviour and values, and demonstrate the universality and integrity of vision, mission or value statements. (v) Participation participation of all organization members in cultural maintenance and associated input, decision making and development activities is essential if culture is to be maintained. (vi) (vii) Interpersonal communication. Satisfied interpersonal relationships do much to support an existing organizational culture and integrate members into a culture. Structures, policies, procedures and allocation of resources need to be congruent with organizational strategy, culture and objectives. REWARD SYSTEMS Reinforcement theory states that behaviour is a function of consequences. Positive consequences are referred to as rewards. Desired behaviours are reinforced through use of rewards. Rewards for goal achievement increase motivation and performance because they strengthen the level of commitment that employees feel. Organizational rewards can either be classified as extrinsic or intrinsic. An extrinsic reward is initiated from outside the person. An intrinsic reward is self-administered by the person. It provides a sense of satisfaction or gratification and a feeling of pride for a job well done. Extrinsic Rewards (1) Financial Rewards. Money is major extrinsic reward and is the major mechanism for modifying and modifying behaviour in industry. 8

(2) Interpersonal rewards. The manager has some power to distribute such interpersonal rewards as status and recognition. By assigning individuals to prestigious jobs, the manager can attempt to improve the status a person possesses. (3) Promotions and lateral moves. Promotions and lateral moves ma be long term rewards that recognize employees professional growth, expertise and capacity to contribute to the institution in new rates. Intrinsic Rewards (1) Completion. Ability to start and finish a project is important to some individuals. Some people have a need to complete tasks, and the effect that completing a task has on a person is a form of reward. (2) Achievement. It is a self-administered reward that is decided when a person reaches a challenging goal. (3) Autonomy. Some people want jobs that provide them with the right and privilege to make decisions and operate without being closely supervised. (4) Personal growth. The personal growth of any individual is a unique experience. An individual who is experiencing such growth senses his/her development and can see how his/her capabilities are being expanded. Benefits of Rewarding Since behaviour followed by pleasant consequences is more likely to be repeated, managers can therefore use reward to modify employees behaviour to the desired one with a consequent effect of increased organizational performance.

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