COORDINATION:COLLABORATION, The Crisis

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Change Management MGMT625

LESSON #18

PHASE 4: COORDINATION

This evolutionary phase is characterized by the use of formal system for achieving greater

coordination, and by top executives taking responsibility for the initiation and administration of

new systems. For e.g. decentralized units are merged into product-group-formal planning

procedures are established and intensely reviewed. Other features of this phase are:

· Numerous staff managers are hired at headquarters (HQ) to initiate company wide

programs of control and review for line managers.

· Capital expenditure related decisions are carefully made.

· Each product group is treated as an investment centre where return on investment (ROI) is

an important criterion for funds allocation.

· Stock options and profit-sharing schemes used to encourage identity with the firm as a

whole. HO-subsidiary dynamics (HQ- branch relationship) come to play as a factor in

organization growth or performance

4. Red Tape Crisis

Lack of confidence and trust between line and staff, and between HQ and field; systems, program

and procedures go beyond their utility, and become end in itself. Line managers resent heavy

directions by staffs, which are unaware of local conditions. Staffs on the other hand complain about

uncooperative and uninformed line managers. Therefore procedure takes precedence over problem

solving, and innovation is dampened

Lawrence & Lorsch highlighted this in their study as the problem of differentiation and integration.

As organizations become large, vertical and horizontal differentiation becomes pronounced. The

problem at this stage is higher the differentiation, higher will be the need for integration.

PHASE 5: COLLABORATION

To overcome crisis of red-tape crisis strong inter-personal collaboration is suggested in this

phase. Now the question is; what is the difference between Phase 4 of Coordination and Phase 5 of

collaboration? The difference is that Coordination phase was managed more through formal system

and institutional procedures while Phase 5 (collaboration emphasises greater spontaneity in

managerial actions through teams and the skilful confrontation of interpersonal differences.

Social control and self discipline take over from control. This transition is very difficult for those

who create and believe on the formal methods of report and answers. The phase evolution builds

more flexible and behavioural approach to management. Here are some of its features:

· The focus is on problem-solving quickly through team-thinking and team-actions

· Teams are combined across-functions

· HQ-staff experts are reduced in numbers-combined in cross-functional teams to consult

(not to direct) field units

· Formal systems and procedures are simplified to focus on tasks

· Conference of key managers are held on major organizational issues

· Reliance on educational and training programs for conflict-resolution and better team work

· Real-time information system are integrated into daily decision-making

· Rewards are geared more towards team performance than individual achievement

· Experiment with new practices are tolerated and encouraged

The Crisis

What will be the revolution in this stage of evolution?

Change Management MGMT625

Many large and mature multinational (MNCs) are in this phase.

Any way whatever the answer is, the sole focus is that each evolutionary period culminates into a

revolutionary period, which is short and spasmodic and transformative for the existing managerial

system, and the processes are never ending and perpetual ones.

For Compulsory and Further Readings

Miles Raymond E., Organization Development Reading 8.1

_________ Developing an Organization that contribute to long run effectiveness Ch 8

Greiner, Larry E., Evolution and Revolution as Organizations Grow Reading 8.2

Also published in HBR July Aug 1972 (can be accessed through J-Store HEC Digital

Library)

5. Drucker, Peter F, The Need to Prepare for Growth, Reading 8.3

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