The structural change at Semco is identified as emerging from the decision by Ricardo Semler to radically change the leadership and structure at the familys Semco business. It is identified that the company was on the verge of bankruptcy indicating the need to adopt a very different approach in the hope that this could produce positive outcomes. At the time of introducing the change Semler’s approach was built around removing top managers and almost all of the bureaucracy. What this suggests is that the company has been operating through a tall structure with many levels of leadership and decision making.
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Semler’s changes however went beyond this because he also elected to eliminate job titles perhaps most probably because these can also indicate a hierarchy with implications for peoples status power and authority relative to each other. Having eliminated much of the old generic structure Semler also removed many of the existing systems of decision making. In essence Semler turned the business over to the employees who become responsible for almost all of the decision making not just in their immediate areas of responsibility but also in support functions such as human resources, scheduling and the interactions between employees and managers. A measure of the authority given to the employees can be found in their right to choose managers by voting evaluate those managers and publish the evaluations through bulletin boards. It is also identified that the position of CEO is transitory being rotated amongst senior managers every 6 months. Semler retains ownership but does not exercise executive decision making.
The growth at Semco has been enormous but at the same time it is observable that business outcomes go against the industry trends. For example employee turnover is less than 1 percent as opposed to 20% and wages are actually less than the industry averages. Semler’s perspective is that the success emerges from the removal of top management which in turn has allowed employees to become far more heavily involved in the company operations. Semler regards this as highly motivating resulting in people waiting to come into work rather than more traditional patterns which might include for example absenteeism. The significant aspect of Semlers observation relates to the motivating impact of his approach.
Kreitner and Kinicki(2010, p. 212) refer to motivation through the concept of psychological process that arouse people and direct them towards particular goals. Motivation therefore tends to encourage people to voluntary engage with certain activities to persist with them and ultimately to seek benefits from engaging these activities. Clearly the Semco worker do experience substantial motivation as expressed by their ongoing support for processes at Semco which under other circumstances might be less likely to produce employee support. For example people do not generally take a lower wage unless they perceive other benefits from doing so. This therefore highlights the need to explore concepts related to motivation particularly from the perspective of identifying how theories of motivation might help to explain the observed behaviours of Semco workers.
Theories of motivation tend to address either content or process KK(2010, p. 212) where the content theories refer to the internal factors that satisfy motivation such as needs and instance. In contrast, process theories suggest that there are interactions between internal needs and the environment that increase levels of motivation. That is rather than just responding to a need employees have impacts from their thoughts and feelings that shape the level of motivation. It is suggested that current success reported for Semco can be explained by considering each category of motivation.
Content theories with emphasis on needs suggest that motivation emerges from satisfaction of those needs. One of the early components of needs concepts was Maslow who established a hierarchy from physiological needs through to self actualisation. In considering this hierarchy it is important to remember that needs can vary with time and place and also that motivation stems from addressing needs which are not yet satisfied. That is if a person has a particular need and their situation meets that need they are not motivated to change the situation. Both satisfied and unsatisfied needs can be addressed at Semco (Kermally, 2005, p. 25).
Maslows base level relates to physiological needs which are the elements necessary for survival. A workplace may satisfy these by providing enough pay for people to eat dress themselves and have accommodation. Since Semco pays less than other places this level of need must still be satisfied because the workforce does not leave and Semler infact observes that it is hard to attract people away from Semco. Therefore pay does not appear to be an issue (Hindle, 2008, p. 101).
Maslows second level refers to safety which appears to have increased at Semco quite simply because both physical and physiological needs can be met. Bearing in mind that the company was almost bankrupt the growth in the profits and staff numbers can be seen as reassuring in terms of meeting this need so the perception is that people will not be motivated to change under the present system because they feel sufficiently safe at Semco (Snell, 2007, p. 34).
Maslow’s third level refers to “love” which more generally refers to peoples need to feel that they belong and that they are treated with acceptance and affection. A workplace that only addresses the lower two levels is unlikely to generate this level of personal security. People may perceive that they belong only while there are physical inputs to be made. Semco however seems to have been able to move beyond this because the decision to focus on workers has generated a greater sense of belonging because employees become trusted with decision making processes that ensure acceptance in the workplace. Workers became valued because they can contribute more than just physical skills and aspects like opening up financial records creates a stronger sense of belonging (Snell, 2007, p. 34).
The fourth level relates to esteem which can express both recognition of others and self esteem. It is interesting to note that Semler refers to employees being able to decide the company budget as well as activities like holidays and days off. This is very motivating in terms of generating self confidence because employees can see themselves contributing not only to work but also decisions about work. The fact that they are trusted to make these decisions indicates recognition by Semler and managers of the value of each of the employee which further enhances self esteem. By being valued and trusted employees learn to value and trust themselves more (Snell, 2007, p. 34).
The highest level of Maslows hierarchy refers to self actualisation which reflects the motivating need for people to become the best that they can be. This represents a very powerful internal motivation in the context that people may recognise a lack of opportunity in their lives to do what they are good at or to express particular capabilities. It appears that many employees generally do not experience satisfaction of this need and therefore change jobs as part of the process of looking for new opportunities perhaps through promotion. Semco however seems to have addressed this need and therefore change jobs as part of the process of looking for new opportunities perhaps through promotions. Semco howver seems to have addressed this need by enabling employees to contribute in many different ways. The capacity to be self directing to actively engage in leadership and to contribute to the selection and evaluation of workmates and managers means that many employees experience opportunities that so well beyond traditional roles. Self actualisation therefore emerges as a much greater reality at Semco quite simply because employees get to do things which they normally cant do or have to try to chase through some other occupation (Kermally, 2005, p. 29).
Semco’s radical way of approaching the workplace means that most of the workers have most of their needs met most of the time. This is a marked contrast to the experience of many workers in other industries or firms who may find that their workplace fails to recognise these needs and focus instead on lower needs. When this happens interactions become more limiting fewer needs are met and the desire for change becomes greater. From the perspective of internal factors like needs Semco is successful because it meets many more needs.
The application of Maslows hierarchy suggest that motivation might sometimes seen a little mechanical. That is there is a need and the workplace satisfies it and so the motivation becomes less. Process models of motivation suggest that there are cognitive elements that must also be considered. What people think or believe or understand becomes just as important as satisfying a particular need. Vrooms expectancy theory nprovides a model where these processes help to explain the success of Semco experience.
KK(2010, p. 223) identify that expectancy theory can be used “to predict motivation and behaviour in any situation in which a choice between 2 or more alternatives must be made”. Interestingly, KK provide examples including whether or not to stay in a job and whther or not to exert effort related to a specific task. These of course reflect the types of decisions workers might make at Semco.
Vroom’s theory proposes that people will tend to act in ways that they perceive will produce a valued outcome. Where they have a strong expectation of a desirable outcome the strength of their action becomes greater. Fundamentally this suggest that people will put in more effort where they anticipate a greater return. The sequence is that an effort produces a performance which in turn results in an outcome.
Vroom’s approach was structured around a mathematical model beginning with expectancy. This relates effort to performance with the recognition that a particular level of effort results a particular level of performance. An expectancy of 1 suggest that performance depends totally an effort and can be influenced by aspects like self esteem and self efficacy. It may also be influenced by relationships with supervisors and co workers and it is clear that Semco addresses many of these aspects because worker performance is at a high level and is clearly related to the amount of effort they exert. People wanting to come to work with strong motivation and it seems that their efforts are effective in generating positive outcomes (Wahba, 1972, p. 69).
The second aspect is instrumentality which links the outcome to what is done. An instrumentality of 1 suggests that all of a specific outcome can be related back to what was performed. In many workplaces people may perceive that an outcome like promotion results not just from performers but also from factors like workplace relationships, favouritism, length of service and so on. In many cases people make decisions about what to do and how hard to work on it based on their perception of the link between performance and outcome. Semco appears to have addressed this situation by providing not just immediate rewards and outcomes but also more meaningful outcomes such as the opportunity to be self directing. People can see the benefits of work not just by still having a job but also by evaluating financial reports (Kermally, 2005, p. 53).
The third element is valence which refers to the ways in which people value a particular outcome. If the Semco workers valued pay more than anything else its valence would be high and they would be likely to move on. Clearly workers place a high valence on the intrinsic rewards gained from working at Semco and this results in much higher levels of satisfaction in their current work (Kermally, 2005, p. 53).
Expectancy theory shows that people at Semco value the particular outcomes they get and are prepared to make the effort that produces the performance leading to those outcomes. Semco strategy works because peoples needs are satisfied in terms of Maslows model and also because expectations about rewards are fulfilled.
References:
Hindle, T 2008, ‘Hierarchy of needs’ in Guide to Management Ideas and Gurus, pp. 101 – 102.
Kermally, S 2005, ‘Chapter Seven: Victor Vroom’ in Gurus on People Management, Durham University Business School, pp. 51 – 55.
Kermally, S 2005, ‘Chapter Four: Abraham Maslow’ in Gurus on People Management, Durham University Business School, pp. 25 – 34.
Kreitner, R & Kinicki, A 2010, Organisational Behaviour, 9th edition, Mc Graw Hill NY, USA
Snell, R 2007, ‘Compliance/Ethics Program Hierarchy of Needs’, Journal of Health Care Compliance, vol. 9, no. 1, pp. 33 – 38.
Wahba, M 1972, ‘Expectancy Theory In Managerial Motivation’, Academy of Management Proceedings, pp. 69 – 70.
ESSAYS: ESSAY TOPIC 1: Choose 2 leadership theories covered in the OB course this year and explain why you believe they are applicable to Australian organisations. Then explain clearly and specifically the steps you would take to implement them into an organisation with which are familiar.
Leadership is a complex concept because it frequently involves more than just management which can be seen as taking the existing resources and employing them to satisfy specific objectives. Leadership goes further because it involves different processes that enable a leader to shape the behaviour of others. This shaping is reinforced to as aimed towards achieving a common goal (KK, 2010, p. 467) with leadership expressed through a relationship between the leader and followers that may enhance the culture and outcomes.
While leadership has been addressed using various models such as trait theory trying to describe the characteristics of a leader and behaviour theory addressing what leaders seem to do there are other approaches which seem to be more effective in describing how leaders act in Australia today. Transactional and transformational leadership reflect approaches that to some extent represent two ends of a spectrum related to the role of the leader in an organisation.
Transactional leadership as the name implies is based around the transactions between leaders and followers based on performance. In this perspective leadership is closer to management because the leader establishes goals and monitors performance towards those goals. The closer worker performance is to enabling these goals the more positively it is seen by the leader who will then produce positive rewards for that performance. Clearly negative outcomes will be attached to performance that fails to address desired goals. This process is therefore extrinsic because people are motivated by the type of reward presented to them (Hay, 2007, p. 2).
Transformational leadership relies much more on intrinsic factors. Leaders using this style aims to address employee motivation in ways that encourage them to place the organisations goals ahead of their own. What effectively means is that the leadership is focused around interpersonal characteristics such as trust and commitment and it requires employees to accept the greater benefits resulting from pursuing the organisations goals ahead of their own. This is achieved by the leader exerting a personality that is more comfortable and inspirational so that employees want to associate with the leader and follow that example. Employees tend to increase their focus on goals by identifying with the leader and their goals and they may well adopt the leaders style as part of the process of working towards goals. They are likely to find tasks more satisfying to become more self sacrificing and to contribute more to organisational goals (Bono & Judge, 2004, p. 902).
In considering these 2 styles and my current workplace at Saint Spyridon College, my interpretation is that the leadership there is much more strongly focused on a transformational style ahead of transactional leadership. This is because the school seems to have a strong desire for the local church and God to transform the educational experiences for children in the local area. A unique example of this, the Priest, Reverend Father John Psalios who sits both on the Executive committee of Saint Spyridon Greek Orthodox Church, College & Community inc. and Saint Spyridon College Board of Management (Appendix-A), is regarded firstly as a Transformational leader and secondly as a Transactional leader. After having had a discussion in detail with Reverend Father John at Saint Spyridon College and after having read Elder Paisios of Mount Athos, Epistles, Souroti, Thessalonica, Greece: Holy Monastery of the Evangelist John the Theologian, 2002, p. 52, I would implement the following steps utilising transformational leadership skills and transactional leadership skills, for an Orthodox Christian Quality Education at Saint Spyridon College.
Father Paisios is a monk from Mount Athos known for his self sacrifice and who had the grace of healing gave this simple yet precise reply……”When from a young age a child becomes filled with Christ, goes to church with his parents communes, chants, prays…later on when he/she gets older leaves home and ends up possibly in an unfavourable environment, it’s not difficult for him/her. It’s like wood which has been drenched in linseed oil. Afterwards it doesn’t absorb rain, as it is protected by the oil, it won’t take in water, it repels it.” (2002, p. 52).
Firstly, we develop the vision of the future at Saint Spyridon College that will excite and convert potential followers. This vision may be developed by the leader Reverend Father John Psalios who represents the highest power, God in this case. The proposed Primary School Reception – Year 7 will need to base its curriculum on the S.A Education Departments SACSA frameworks which identify five “essential learning’s”, that is, Futures, Identity, Interdependence, Thinking and Communication. These learning’s need to be developed in all units of teaching and learning. An Orthodox Education would extend and make these learning’s more complete or whole.
Secondly, which in fact never stops is to constantly sell the vision. The Transformational Leader thus takes every opportunity and will use whatever works to convince others to get on board. For example, How can we talk about the future without developing and including our relationship with God? After all God created the wonders of nature and He gave man responsibility over His creation. How can we talk about our identity which although is influenced by our family and friends is ultimately shaped by our relationship with God. Jesus Christ and the Saints constantly remind us about who we are and who we should aspire to be.
How can we talk about interdependence without acknowledging our dependence upon Gods strength and guidance? Through this relationship with God we learn humility Christian charity and value service to others. Through a real and meaningful relationship with God we are never alone and never feel lonely or abandoned. How can we talk about thinking without acknowledging Gods grace through enlightenment through the Holy Spirit. Thinking itself is value laden whether your’e a scientist, politician, teacher, priest, parent or individual. It gives value to the product of our thoughts and actions both the concrete and the abstract.
How can we talk about Communication without acknowledging its key role in influencing all the previously mentioned Essential learning’s. It is not merely a mechanical process for it is the vehicle by which we convey and exchange thoughts and meanings which themselves are value laden in spite of our best attempts at times to be academically neutral. How can we not talk about prayer and the way in which it maintains our relationship with God and how it influences our everyday live’s. Who hasn’t talked to God at the most important of times? Furthermore, the “Foundations of Learning”, are described as being made up of the four key elements that is Confidence, Persistence, Organisation and Getting along with others.
In parallel with the selling activity is seeking the way forward. Some Transformational Leaders know the way, and simply want others to follow them. Others do not have a ready strategy, but will happily lead the exploration of possible routes to the promised land.
The route forwards may not be obvious and may not be plotted in details, but with a clear vision, the direction will always be known. Thus finding the way forward can be an ongoing process of course correction, and the Transformational Leader will accept that there will be failures and blind canyons along the way. As long as they feel progress is being made, they will be happy.
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How can someone get along with others if they have no Humility? How can someone persist and maintain confidence unless they draw strength from Faith? How can someone be organised if they don’t have a clear purpose and underlying values? Even if our children have wealth and status will their life be truly blessed if they have no relationship with God?
The final stage is to remain up-front and central during the action. Transformational Leaders as Reverend Father John is in this case, are always visible and will stand up to be counted rather than hide behind their committee members and parishioners. They show by their attitudes and actions how everyone else should behave. They also make continued efforts to motivate and rally their followers, constantly doing the rounds, listening, soothing and enthusing.
It is Reverend Father John’s unswerving commitment to God as much as anything else that keeps people going within Saint Spyridon College, particularly through the darker times when some may question whether the vision can ever be achieved. If the people do not believe that they can succeed, then their efforts will flag. The Transformational Leader seeks to infect and reinfect their followers with a high level of commitment to the vision, in this case having trust and faith in Reverend Father John as he is a man of the cloth and represents God.
One of the methods the Transformational Leader uses to sustain motivation is in the use of ceremonies, rituals and other cultural symbolism. Small changes get big hurrahs, pumping up their significance as indicators of real progress.
Overall, they balance their attention between action that creates progress and the mental state of their followers. Perhaps more than other approaches, they are people-oriented and believe that success comes first and last through deep and sustained commitment.
Whilst the Transformational Leader seeks overtly to transform the organization, there is also an implicit promise to followers that they also will be transformed in some way, perhaps to be more like this amazing leader, a saint like figure. In some respects, then, the followers are the product of the transformation.
Transformational Leaders are often charismatic, but are not as narcissistic as pure Charismatic Leaders, who succeed through a belief in themselves rather than a belief in others.
One of the traps of Transformational Leadership is that passion and confidence can easily be mistaken for truth and reality. Whilst it is true that great things have been achieved through enthusiastic leadership, it is also true that many passionate people have led the charge right over the cliff and into a bottomless chasm. Just because someone believes they are right, it does not mean they are right.
Paradoxically, the energy that gets people going can also cause them to give up. Transformational Leaders often have large amounts of enthusiasm which, if relentlessly applied, can wear out their followers.
Transformational Leaders also tend to see the big picture, but not the details, where the devil often lurks. If they do not have people to take care of this level of information, such as The Chairman of the Board of Management and its professional business members, then they are usually doomed to fail.
Finally, Transformational Leaders, by definition, seek to transform. When the organization does not need transforming and people are happy as they are, then such a leader will be frustrated. Like Priests who are responsible for a whole community, however, given the right situation they come into their own and can be personally responsible for saving the organisation.
However the process of change has been given to the leadership by people whose backgrounds are more closely related to structured systems and bureaucracy rather than a small close nit community. As a result the goals of the school established more strongly in behavioural terms in learning objectives and in other measurable outcomes rather than in attempting to provide innovative leadership. Reverend Father John Psalios on the Board of Management conducts himself as a Transactional Leader.
When the Transactional Leader allocates work to members of the Board of Management, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure (just as they are rewarded for succeeding). This is dealt with by the Chairman of the Board of Management and Reverend Father John.
The Transactional Leader often uses management by exception, working on the principle that if something is operating to defined (and hence expected) performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind of corrective action is applied for performance below expectation.
Saint Spyridon College does not have its own constitution. The College comes under the Churches constitution where it is recognised for example that the leadership of the school that is The Executive Committee (Appendix A) does not consist of people with great experience in either education or management and so their preference for example is to have clear cut guidelines which in turn become as established as targets for teachers and other staff members.
Evaluation of programs and outcomes is therefore very often results driven where those results are easily measurable. This seems to be a factor not just of the school but education generally because of the introduction of systems like NAPLAN tests that are interpreted as giving feedback on students, teachers and schools. Saint Spyridon therefore has both internal and external elements guiding it towards transactions that enable positive or negative rewards. The structural system does not enhance the potential for inspirational leadership or for the capacity to enhance personal relationships at the Executive Committee level. Desired elements such as trust and acceptance seem to be lacking between employees and the leadership of the Board of Management making transformational processes almost impossible. Members of the small community college feel too much in the eye of leadership and too often experience negative consequences for them to feel anything except engaged in a transactional system of leadership.
In conclusion, Transformational Leadership has more of a ‘selling’ style, Transactional Leadership, once the contract is in place, takes a ‘telling’ style.
References:
Bono, J & Judge, T 2004, ‘Personality and Transformational and Transactional Leadership: A Meta – Analysis’, Journal of Applied Psychology, vol. 89, no. 5, pp. 901 – 910.
Elder Paisios of Mount Athos, Epistles, Souroti, Thessalonica, Greece: Holy Monastery of the Evangelist John the Theologian, 2002, p. 52.
Hay, I 2007, ‘Leadership of Stability and Leadership of volatility: Transactional and Transformational Leaderships Compared’, Academic Leadership the Online Journal, vol. 4, no. 4, pp. 1 – 8.
Kreitner, R & Kinicki, A 2010, Organisational Behaviour, 9th edition, Mc Graw Hill NY, USA
Reverend John Psalios Priest, School Chaplain, Director of the Executive Committee of Saint Spyridon Greek Orthodox Church, College and Community Inc.
Bass, B. M. (1985). Leadership and performance beyond expectation. New York: Free Press.
Bass, B. M. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational Dynamics, (Winter): 19-31.
Burns, J. M. (1978). Leadership. New York: Harper & Row
ESSAY 2- Do change programs produce change? To counteract the criticisms of change programs outline the steps you would implement to set up an effective change program and evaluate its impact.
Change is identified as one of the most common factors impact organisations simply because it is an inevitable part of existing in both internal and external environments. For example external forces producing change may include economic developments changes in technology, new customer preferences and political or legal change. Internally change may occur because of conflict changes in leadership worker dissatisfaction or because the organisation needs to change through a restructure. Forces of change are therefore extremely significant but one of the questions that emerges is whether or not organisations are able to identify how they perform and transform themselves in response. Planned programs of change are often seen as the way to renew the organisation but their effectiveness needs to be questioned (KK, 2010, p. 534).
Planned change may occur at different levels and these perhaps reflect cultural values. Organisations in the West frequently adopt a timeframe which is quite short so that for example they look for profitability quickly but this mind set is not always useful when considering change. For example introducing change to resolve a single short term problem may not actually address the underlying causes of that problem. If so the change program is likely to be perceived as failing because it is an artificial solution rather than a meaningful long term change. One issue to keep in mind therefore is to determine the root cause of the thing to be changed while the second need is to identify the proper timeframe needed for the proposed change (KK, 2010, p. 538).
KK(2010, p. 539) suggest that change can be modelled as adaptive, innovative or radically innovative. These terms reflect the increasing degree of cost uncertainty and complexity and also indicate the growing level of likely resistance. Consequently while adapting may seem less threatening because it is more or less familiar a radical innovation potentially may fail because it is perceived as too much change for the organisations culture and stakeholders.
What this suggests is that change needs to be understood as a developmental process that begins with undoing existing processes and values. This is likely to require an understanding of the need to change and the development of the motivation to change. It is only from this background the actual process of change becomes possible because it has a context that becomes meaningful in terms of introducing or improving processes products or other outcomes. The change only becomes meaningful where it is supported and allowed to become the pattern of the way forward.
Beer et al (1990) identify that one of the problems with change programs is that they don’t actually produce change. Their research suggests that organisations often recognise that they need to transform in order to compete but they approach it in the wrong way.
For example in Saint Spyridon College the Board of Management are members of an elite business group. Saint Spyridon College does not have its own constitution. It falls under the constitution which belongs t
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