Page 333 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes The first two mechanisms, the marketplace and bureaucracy, are used under the conditions of
fairly low uncertainty and complexity. The market form, appropriate in competitive situations,
manages transaction costs with a price mechanism. Contracts are made and kept among parties
at a "fair" price so that competitors won't take over the business. Bureaucracy creates the appearance
of equity by creating an employment contract, whereby employees contract to receive wages
and in turn submit to supervision, which is designed to reduce uncertainty and monitor employee
performance. A hallmark of bureaucracy is the simplification of complex tasks into easily
monitored activities. The bureaucracy uses the mechanism of rules or standards of behavior; as
long as uncertainty is low, the rules in place can guide behavior.
When uncertainty or complexity increases, none of these mechanisms works. A third mechanism,
a clan or culture, thus, then becomes feasible. As already discussed, the clan is a culturally
homogeneous organisation in which members share a common set of values, objectives, and
beliefs. This common core empowers them to act with greater flexibility in a fluid situation.
This approach addresses the social exchange problem quite differently than either the marketplace
or bureaucracy method: it socializes parties to the exchange in such a way that all participants
see their objectives in the exchange as congruent. Clans require a tremendous amount of group
process activity.
Strength also rests in the core values of an organisation. Any good organisation must have an
inspiring, shared mission at its core and it must have capable leadership in place and in
development. Assuming these two factors are present, the following eight traits define a healthy
corporate or organisational culture.
1. Openness and humility from top to bottom of the organisation: As we know that the
arrogance kills learning and growth by blinding us to our own weaknesses. Obviously,
strength comes out of receptivity and the willingness to learn from others.
2. An environment of accountability and personal responsibility: Weak organisations show
signs of denial, blame, and excuses hardened relationships and intensify conflict. Successful
teams on the other side, hold each other accountable and willingly accept personal
responsibility.
3. Freedom for risk-taking within appropriate limits: Both the extremes–an excessive, reckless
risk-taking and a stifling, fearful control have the potential to threaten any organisation.
Freedom to risk new ideas flourishes best within appropriate limits.

4. Courage and persistence in the face of difficulty: The playing field is not always level, or
life fair, but healthy cultures remain both realistic about the challenges they face and
unintimidated and undeterred by difficulty
5. A fierce commitment to "do it right": Mediocrity is easy; excellence is hard work, and
there are many temptations for shortcuts. A search for excellence always inspires both
inside and outside an organisation.
6. Unquestioned integrity and consistency: Dishonesty and inconsistency undermine trust.
Organisations and relationships thrive on clarity, transparency, honesty, and reliable
follow-through.
7. A willingness to tolerate and learn from mistakes: Punishing honest mistakes stifles
creativity. Learning from mistakes encourages healthy experimentation and converts
negatives into positives.
8. Pursuit of collaboration, integration, and holistic thinking: Turf wars and narrow thinking
are deadly. Drawing together the best ideas and practices, integrating the best people into
collaborative teams, multiplies organisational strength.

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