Reframing Organizations. Lee G. Bolman
find that it takes weeks or months to negotiate the rules and procedures that the university's information technology units have put in place. Issues that seem critical to IT may seem like trivial annoyances to the professor, and vice versa. Technocrats feel most at home in a machine bureaucracy.
The support staff pulls in the direction of greater collaboration. Its members usually feel happiest when authority is dispersed to small work units. There they can influence, directly and personally, the shape and flow of everyday work and decisions. In one university, a new president created a new governance structure that, for the first time, included support staff along with faculty and administrators. The staff loved it, but when they came up with a proposal for improvements to the promotion and tenure process, the faculty was not amused. Meanwhile, the operating core seeks to control its own destiny and minimize influence from the other components. Its members often look outside—to a union or to their professional colleagues—for support.
Attempts to restructure must acknowledge the natural tensions among these competing interests. Depending on the configuration, any component may have more or less influence on the final outcome. In a simple structure, the boss has the edge. In machine bureaucracies, the techno structure and strategic apex possess the most clout. In professional bureaucracies, chronic conflict between administrators and professionals is the dominant tension, while members of the techno structure play an important role in the wings. In the adhocracy, a variety of actors can play a pivotal role in shaping the emerging structural patterns.
Beyond internal negotiations lurks a more crucial issue. A structure's workability ultimately depends on its fit with the organization's strategy, environment, and technology. Natural selection weeds out the field, determining survivors and victims. The major players must negotiate a structure that meets the needs of each component and still enables the organization to survive, if not thrive.
WHY RESTRUCTURE?
Restructuring is a challenging process that consumes time and resources with no guarantee of success, as the BBC case at the beginning of the chapter illustrates. Organizations typically embark on that path when they feel compelled to respond to major problems or opportunities. Various pressures can lead to that conclusion:
The environment shifts. For Ma Bell (American Telephone & Telegraph), once the telephone company for most of the United States, a mandated shift from regulated monopoly to a market with multiple competitors required a massive reorganization that played out over decades. When AT&T split off its local telephone companies into regional “Baby Bells,” few anticipated that eventually one of the children (Southwest Bell) would swallow up the parent and appropriate its identity.
Technology changes. The aircraft industry's shift from piston to jet engines profoundly affected the relationship between engine and airframe. Some established firms faltered because they underestimated the complexities; Boeing rose to lead the industry because it understood the issues (Henderson and Clark, 1990).
Organizations grow. Digital Equipment thrived with a very informal and flexible structure during the company's early years, but the same structure produced major problems when it grew into a multibillion‐dollar corporation.
Leadership changes. Reorganization is often the first initiative of new leaders. It is a way for them to try to put their stamp on the organization, even if no one else sees a need to restructure.
Miller and Friesen (1984) studied a sample of successful as well as troubled firms undergoing structural change and found that those in trouble typically fell into one of three configurations:
The impulsive firm: A fast‐growing organization, controlled by one individual or a few top people, in which structure and controls have become too primitive and the firm is increasingly out of control. Profits may fall precipitously, and survival may be at stake. Many once‐successful entrepreneurial organizations stumble at this stage because they have failed to evolve beyond their simple structure.
The stagnant bureaucracy: An older, tradition‐dominated organization with an obsolete product line. A predictable and placid environment has lulled everyone to sleep, and top management is slavishly committed to old ways. Management thinking is too rigid or information systems are too primitive to detect the need for change, and lower‐level managers feel ignored and alienated. Many old‐line corporations and public agencies fit into this group of faltering machine bureaucracies.
The headless giant: A loosely coupled, divisional organization that has turned into a collection of feudal baronies. The administrative strategic apex is weak, and most of the initiative and power resides in autonomous divisions. With little strategy or leadership at the top, the firm is adrift. Collaboration is minimal because departments compete for resources. Decision making is reactive and crisis‐oriented. WorldCom is an example of how bad things can get in this situation. CEO Bernie Ebbers built the company rapidly from a tiny start‐up in Mississippi to a global telecommunications giant through some sixty‐five acquisitions. But
for all its talent in buying competitors, the company was not up to the task of merging them. Dozens of conflicting computer systems remained, local network systems were repetitive and failed to work together properly, and billing systems were not coordinated. “Don't think of WorldCom the way you would of other corporations,” said one person who has worked with the company at a high level for many years. “It's not a company, it's just a bunch of disparate pieces. It's simply dysfunctional.” (Eichenwald, 2002, p. C‐6)
Miller and Friesen (1984) found that even in troubled organizations, structural change is episodic: long periods of little change are followed by brief episodes of major restructuring. Organizations are reluctant to make major changes because a stable structure reduces confusion and uncertainty, maintains internal consistency, and protects the existing equilibrium. The price of stability is a structure that grows increasingly misaligned with the environment. Eventually, the gap gets so big that a major overhaul is inevitable. Restructuring, in this view, is like spring cleaning: we accumulate debris over months or years until we are finally forced to face up to the mess.
MAKING RESTRUCTURING WORK: TWO CASE EXAMPLES
In this section, we look at two case examples of restructuring. Some represent examples of reengineering, which rose to prominence in the 1990s as an umbrella concept for emerging trends in structural thinking. Hammer and Champy promised a revolution in how organizations were structured:
When a process is reengineered, jobs evolve from narrow and task oriented to multidimensional. People who once did as they were instructed now make choices and decisions on their own instead. Assembly‐line work disappears. Functional departments lose their reason for being. Managers stop acting like supervisors and behave more like coaches. Workers focus more on customers' needs and less on their bosses' whims. Attitudes and values change in response to new incentives. Practically every aspect of the organization is transformed, often beyond recognition. (1993, p. 65)
More than half of all Fortune 500 companies jumped on the reengineering bandwagon in the mid‐1990s, but only about a third of those efforts were successful. Champy admitted in a follow‐up book, Reengineering Management (1995), that reengineering was in trouble, and attributed the shortfall to flaws in senior management thinking.
Some reengineering initiatives have indeed been catastrophic, a notorious example being the long‐haul bus company Greyhound Lines. As the company came out of bankruptcy in the early 1990s, a new management team announced a major reorganization, with sizable cuts in staffing and routes and development of a new, computerized reservation system. The initiative played well on Wall Street, where the company's stock soared, but poorly on Main Street as customer service and the new reservations system collapsed. Rushed, underfunded, and insensitive to both employees and customers, it was a textbook example of how not to restructure. Eventually, Greyhound's stock crashed, and management was forced out. One observer noted wryly, “They reengineered that business to hell” (Tomsho, 1994, p. A1). Across many organizations, reengineering was camouflage for downsizing the workforce,