Organisational Adaptation And Change In

Turbulent Environments

 

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frederic Kwesi Great Agboletey

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institute of Behavioural Studies

Linköpings University.

581 83 Linköping. Sweden.

2005

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                                                                    II

 

 

 

 

 

                                                                

ACKNOWLEDGEMENT

 

 

This thesis could not have been completed without the assistance, guidance and support of my supervisor Dr. Lauritz Brännström. I owe him a great debt of gratitude.

I extend my gratitude to Professor Grännström, head of the small group research studies of Linköpings University, Sweden. In addition, all the graduate researchers, (especially Näslund who gave needed methodological literature to support the research), of the Small Groups Research Studies of the Department of Psychology of Linköpings who contributed significantly in academic discussions and literal criticism of the papers contributed at various seminars during the course of this research work.

My utmost appreciation also goes to the various Heads of Institutions, Organisations and the various Managers, Supervisors, Trade Union Representatives and Workers who contributed immensely by participating in the interviews and giving much appreciated information about their organisations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

V

 

ABSTRACT

 

This study aims at identifying the nature of change and the processes therein engaged by organisations in the manufacturing and services sectors as they respond to triggers of change by engaging adaptive coping response strategies. Organisations engage in other forms of change, in addition to adaptive change. Organisations that had engaged in transformational change were also studied, and their core change activities and the interaction that ensues as organisational sub-systems interact to facilitate change elaborated. Interviews were conducted employing the focused interview technique in private sector manufacturing industries that had engaged in some form of adaptive change and in former State-Owned service organisations, which had undergone change of sector ownership. The study focuses on how change was facilitated, why the need for change and the outcome of actual change activities at individual organisation levels in the core system defining categories configured within the open system configuration of organisations. Particular attention was devoted to detailing the environmental particularities within which organisations studied exist and their effect on the organisation and the changes undertaken. The goals of the organisations undergoing change as expressed in their core managerial strategies to deal with internal, external and organisation-environment relationship in order to optimise organisational outcome states are drawn out through extensive obervations and interviews and detailed. The behavioural processes at various system levels, extensive characterisation of the interaction processes activated in response to change effects at individual, sectional and sub-system level in organisations studied; changes effected at organisational structure and the emergent organisational state as a result of adaptive change processes are discussed. All these factors were isolated and their associative issues exhaustively discussed during the extensive and detailed focused interviews conducted within these organisations. The interviews were conducted at three classificatory levels, the management, supervisory and worker levels, in all the organisations studied. The distillative analysis based on the analytic induction format, enabled detailed and precise collative discussion within a complex open systems framework for each organisation and for cross case analysis. The interviews reveal that over a defined period organisations engage in categorically different change activities. The environment, in which the organisations exist, has significant impact on organisational outcome states and the full benefits of any planned change or the adaptive coping activated in response to a need for change in aspects of the organisation’s activities. Organisations that inhibit turbulent (immediate and general) environments could be negatively impacted by forces emerging from these environment(s). Organisations in the study all exhibited hierarchical structures but had adapted by adopting designed-in flexibility to enhance communication effectiveness across organisational layers, partly to deal with uncertainties but also to maximise employee potential capacity. The field of organisational change is broad and multi-disciplinary, the broad base of knowledge therein accruing, enables the research to model the variety of change types pertinent to unique setting of organisations studied. These change activities engaged in by the various organisational sub-systems in interaction with their unique environments were through distillative analytical modelling set within an explanatory representation. Recommendations are made for future research in the academic area.

 

 

 

 

 

                                                                                                                                   VI

 

LIST OF TABLES

TABLE                                                 PAGE

1.  Types of change and Nature of Responses Actuated……….…..73/252

3.  A Distillative Analytical Table of Change Indicating the type of Changes Undertaken by Private Sector Manufacturing and the SOEs.……… 256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VI

LIST OF FIGURES

Figure                                                Pages

1. Multiple Environmental Influences on an Organisation..………..……. 22

2.  A Congruence Model of Organisational Behaviour…....………….....24

3. Organisational Change as a Transition State...28

A Model of Degree of Environmental Uncertainty Based on Degree of Complexity and Stability of the Environment……………………...…….30

5. Types of Managerial Decisions Under Different Conditions of

Certainty/Uncertainty..……...............………………...………..............33                                  

6. From People Make a Difference.........…….............…………...........39

7. An Example of Lewin’s Force Field Analysis......………...….............74

8. The Lewin Three Stage Change Process.........…………...….............74

9. The Lewis Model......................……...............……………..............76

10. A tri-diagrammatic Representation of the Research………..….....…92

11. Adaptation of Bloor’s Approach to Analytical Induction….……….175

12a. Explanatory Model of Types of Environments..........……….…....257

12b. Core Emergent Problems in Input and Output

Environments of the Manufacturing Sector Organisations………..……..257

13. Characteristic Types of Communication and Task Related

Decision Making at Different Organisational levels...…….…….…...…269

14. Synchronous Coordination of Critical Sub-systems to 

Enable Organisations Attain Balance........…….............………………272

15. Determining Multi-factor Organisational Effectiveness...…….....…..273

      

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VIII

 

LIST OF APPENDICES

Appendix 2-5 Lexicon of Organisational Complexity…….………..277

Appendix 6-4 Ghana In Geo-Political Perspective…….…………..280

Appendix 8-2 - Modelling Change………………….…………….283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IX

 

TABLE OF CONTENTS                                                

Acknowledgement..........………………...……….....…...…………..i

Abstract...........................………………….......... ...........………....ii

List of Tables.................................….……………... ..............…….iii

List of Figures.....................…….………….......................………...iv

List of Appendices...................….....……….......................………..v

 

CHAPTER ONE

Introduction And Preliminary Literature Review

1-1 The Organisation As An Open System..........…………...………....16

1-2 The Organisational Life Cycle.................…....…………...………..25

 

CHAPTER TWO

2-1 Organisational Change as an Adaptive Coping Response……….….26

2-2 The Effect Of Change on Organisational Performance.………...…...29 2.3 The Organisation/Environment Interaction....……………...……......29

2.4 The Effect of Technology....……...............…………………….…..40

2.5 Learning In Organisations as a Self-Enhanced Flexibility in the Changing

Organisation……………………………………………....42

2.6 Learning Organisations as a Self-Enhanced Flexibility in the Changing Organisation………………………………………………...…….…...53

 

CHAPTER THREE

3-1 The Organisation as a Dynamic Interaction of Component Variables.57

3-2 Organisational Effectiveness……….........……...…………….…....59

3-3 Organisational Adaptation and the Adaptation Process………….…61

3-4 Effective Adaptive Coping.....................…………………..…........63

3-5 The Stream Analysis Approach of Analysing Organisational Change.65

3-6 Some Consequences of the Change

Process that May Interfere with Successful Change Outcomes.…66

3-7 Triggers of Change and Adaptation...……..……………...…..........71

3-8 Planned Organisational Change.....………..………...….….............71

3-9 Organisational Transformation......……..……………......................72

3-10 The Systems Model of Change.........….………..…….……….....75

3-11 The Integrative Approach...................…………….....….….........76

3-12 A Critical Analysis of Change Models......…………..………........77

 

 

CHAPTER FOUR

THE PRESENT STUDY

4-1 Aim Of The Study................…..….....………………....................78

4-2 Design Of The Study............…..….………..………...…...............78

4-3 Case Study Questions..............….…………...……...........…….....79

4-4 Key Features of The Case Study Method…………....………..…..79

4-5 Constructs Of The Present Study…………………………….........84

4-5.1 Dependent Measures.................……………………….…..........85

4-5.2 Dependent Variables.......................………………...………......85

4-5.3. Independent Variables................……………………….............85

4-5.4. Control Variables..........................…………….……….............85

4-6 Selection of cases.............................……………………...............86

4-7 Hypotheses.……………...........................………………...…......87

4-8 Relevance Of The Study.....................………………….................87

4-9 The Interview Information Sources. Determinants Of Persons To Be Interviewed And Other Sources Of Information…………………..…....87

4-10 The Logic of Constructs and Conduct of the Focused Interview .....90

4-10.2 Uses/Applications of the Focused Interview…….……………...93

4-10.3 Criteria that Distinguish Between Productive and Unproductive Material..……………………………………………………………. 96

4-10-4 Procedures………………………………..…………………..99

4-10.5 Retrospection…………………………………..….…………100

4-10.6 Reports Unlinked to the Stimulus Situation…..……..………….102

4-10.7 Procedures…………………………..……………………….113

4-10.8 Specificity…………………………...……………….…….…119

4-10.9 Depth…………...………………………...………………….128

4-10.10 Flexibility of Interview Situation……………...………………130

4-10.11 Comparative Situations……………………...…..…………..134

4-10.12 Personal Contexts………………………………………...…135

4-10.13 The Group Interview……………………………………...…141

4-10.14 Dead Silence and Pregnant Silence…………..………………152

4-11 The Data Collection Process……………….…………………...162

4-12 Other Sources of Information………………………….………..166

 

CHAPTER FIVE

5-1 Methodological (Booster) Framework for Analytic Discussion of Interview Data…….........……..…………………………………......168

 

CHAPTER SIX

6-1 Presentation of Individual Case Analysis.........………………........178

6-2 The Private Sector Manufacturing Organisations..………..…….....180

The Ghana Rubber Company Limited………………...………………180

Interplast (Gh.) Limited………………………………………………184

PolyProducts…………………………..…………………………….193

Duraplast……………………………...……………………………..200

Latex Foam Rubber Products Limited……………..…………………203

6.3 Topical Issues of Private Sector Concern…………...…………….205

6-3 The Private Enterprise Foundation (PEF).....………….…….........205

6-4 The PEFs Position on the Economy.........………..……………….213

6-5 Areas where PEF thinks Government Needs to Make Change.…..216

6-6 The State of the Ghanaian Industrial Sector........………………....217

 

CHAPTER SEVEN

7-1 Summaries and Explanatory Analysis of Interviews Conducted at the Service Organisations..………………………………...……………..218

Tema Development Corporation (TDC)………………...…...……….218

The Ghana Commercial Bank………………………..………….……233

The Ghana Post Company Limited………………….………….…….234

The Ghana Civil Aviation Authority……………….……..……...…….242

7-2 Interview At the State-Owned Enterprises Commission (SEC)…...247

 

CHAPTER EIGHT

8-1 Cross Case Analysis....….............................…..…………............250

Coping with Financial Losses and Profit Reductions……..…………….250

Planned Change………………………………………..………..…....252

Psychological Leadership in Changing Organisations……...…………....253

Adaptive Change……………….……………………………………..254

A Distillative Analysis of Change………………………………………255

Organisations and their Environments…….……………………………257

Facilitating Improved Organisation-Environment Coordination…………258

Organisation-International Environment Dependency…………………..259

Responding to External Triggers of Change………………..…………..259

Increased Competition………..……………………………………….260

Change at Employee-Management Interface……..…………………….261

The Role of Trade Unions in Facilitating Internal Change…….…………262

Quasi Innovation…………………………………………..…………..262

Training in the Changing Organisation……………………..…………...263

Goal Setting…………………………………………..……………….264

Planning for Salary Changes…………….…………..…………………264

Empowerment and Flexible Form………………...……………………265

Decision Quality and Implementation……………….………………….266

Co-ordinating Organisational Sub-system Activities for    Effective Performance………………………………………….……………….267

Communication Structures in Changing Organisations……….…………267

8-2 The Distillative Model of Organisational Change...………………....269

 

CHAPTER NINE

9-1 Summary of Study Findings and Recommendations for Future Researchers.....................…………………………………..........…..274

 

 APPENDICES

Appendix  1 ..................……………………….................…….........279

Appendix  2 ..................……………………….................…….........279

   

BIBLIOGRAPHY

Page........................………………………….................…….……..293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

 

Introduction and Preliminary Literature Review.

 

1-1 The organisation as an open system

 

 

Singer J.E. & Drucker D. (2001) in the summary to the fourth report on Organisational Change and Effectiveness in the United States Army, assert, “Organizations are among the most significant structures through which society functions. Through it’s business, civic, social, and religious organizations, society carries out much of its economic and social life. Understanding how organizations work, how they are designed, how they change through internal processes and can be changed from without, as well as how change can be guided, is of immediate interest both to those who work in organizations and those who study them.”

They further contend “Business organizations provide a rich, complex, but barely tapped lode of knowledge about organizational performance and the processes of change. Although research approaches in this field are still in their infancy and need to be further developed and validated, the field is fertile ground for greater understanding of organizations, organizational performance, and organizational change broadly conceived.” Indicating that,  “Organizations through the ages have been characterized by a tension between the forces of stability and the need for change. Much of the strength and utility of organizations comes from their inertia, helping to make them reliable in what they do and accountable for what they do. Indeed, some argue that their tendency to inertia can provide organizations with some short-term competitive advantage.”

 

From organization theory and much research, it is common knowledge organizations do not adapt readily or easily; many organizations that change do so in ways that are neither successful nor effective. Organizations must continually balance the forces of stability and the push for change. Nevertheless, organization theory and managerial wisdom suggest that, to survive, organizations must be compatible with their environments, which include all the external social, economic, and political conditions that influence their actions. In the current environment of rapid technological and societal change, organizations must adapt quickly enough to maintain their legitimacy and acquire the resources they need to stay viable.

 

In developing country systems change is inevitable and prompted by strong external originating pressures for change in an organisation. In addition to the expected adjustments that accrue to an organisation through time, the unique turbidity that occasion’s organisations set within the uniqueness of developing country systems sets into motion triggers of change and adaptation and singularly unique response activities. The nature of subtle variations in management outlook and employee perceptions, the distinctly multi-layering of the environments in which organisations in such settings respond to, and the consequent emergent environmental pressures from such environments provide a basis for expecting departures from the norm in research models applicable to developed and comparatively stable and predictable systems as pertains in developed western systems.

 

An organisation has been defined as the patterned relationship among people, who are engaged in mutually dependent activities with a specific objective (Wexley and Yukl, 1984).

James Drever on the other hand conceptualised an organisation as the differentiation of parts and functions, and integration into a systematic interconnected whole.

Guest (1962) has defined an organisation as consisting of any large group of persons engaged in mutually dependent activities for some specific purpose. He states further that an organisation is rationally structured in that: -

a. The organisation has been formed as a legal entity at some identifiable point in time and space.

b. Men and physical objects have been deliberately brought together to achieve a defined goal.

c. The manner in which the task is to be accomplished is based on calculation and reason, which distinguish it from spontaneous formation or actions.

d. The arrangement of men and material objects assume the form generally recognised and agreed upon by the participants.

 

Schein (1970) has defined an organisation as the rational co-ordination of the activities of a number of people for the achievement of some common explicit purpose or goal through the division of labour.

 

Schein (1982) asserts that research about organisations of late has progressively espoused a view of the organisation as an open, complex system in dynamic interaction with multiple environments. Attempting to fulfil goals and perform tasks at many levels and in varying degrees of complexity, evolving and developing as the interaction with a changing environment forces new internal adaptations. He contends that this orientation is best expressed by stating a series of general propositions rather than attempting a single all encompassing definition of what constitutes an organisation. The propositions he suggests are: -

Basically, the organisation must be conceived of as an open system, which means that it is in constant interaction with all its environments, and transforming or converting inputs from its environment into products and services that are then exported to these various environments.

Secondly, the organisation consists of many subsystems that are in dynamic interactions with one another. Instead of analysing organisational phenomena in terms of behaviour, it is becoming increasingly important to analyse the behaviour of such subsystems, whether they be conceived in terms of coalitions, groups, rule or some other conceptual elements.

Thirdly, because the subsystem are to varying degrees interdependent, changes in one subsystem are likely to affect the behaviour of other subsystems. Thus, organisations exist in a set of dynamic environments composed of other systems, some larger, some smaller than the organisation. The environments place demands upon and constrain the organisation and its subsystem in various ways. The total functioning of the organisation cannot be understood, therefore without explicit consideration of these environmental demands and constraints, and the manner in which the organisation copes with them in the short run, moderate-range and long term.

Fourthly, the multiple links between the organisation and its environments make it difficult to specify clearly the boundaries of any given organisation. Ultimately, the concept of organisation is perhaps better conceived in terms of the stable processes of import, conversion and export, rather than in structural characteristics such as size, shape, function or design.

 

The overall evolving characteristics of dynamic complexities of interacting and mutually inevitably influencing entities existing in close dependency relationships with several often but not always clearly defined external environments create its own definable nature, which nature is best conceptualised within an open system framework as elucidated above by Schein (1982). The organisation is a multi-interpretable entity existing as a complex composition of multiplicities interacting with a defined intent, that intent is what determines for the most part the expected pattern of individual constituents behaviour as the organisation pursues its defined outcome state at various levels in an equally complex environmentally dependent relationship.

 

A system is the arrangement and relationship among component parts that operate as a whole (Katz and Kahn, 1966). By this conceptualisation, each component in a system is a subsystem that has some system properties of its own. The various components of a system form an elaborate web of causal connections, so that a change in one component will set of a chain reaction in other components of the system. The resulting change is not always exactly predictable for both the component that initiated the change and the other components because of the complexity of the relationships.

 

Beer (1979) distinguishes five systems as comprising the basic component of organisational systems. These are: - implementation, co-ordination, control, intelligence and policy within his viable systems model.

A further breakdown leads to a conceptualisation of human activity as the basis of organisations. These activities are focused on the attainment of individual aims together with organisational goals. The potential possibilities to reach these aims are in such resources as time, material resources, money and information.

He suggests that the efficiency of the transformation depends on motivation, qualification and the rate of freedom-variety of action- the action bearer holds.

The human activities seem to be in a mutual interaction, which is directed by: -

Co-operation, which is the interaction among the bearers of the activities by means of which the aims, the ways of resource exploitation and activity performance are set more precisely with regard to the current aims of the organisation. Co-operation can be directed by horizontal co-ordination.

Control, which is the expectation of the power in the framework of a hierarchic power system, by means of which aims and results are kept in harmony inside a feedback loop.

 

A system is said to be open if it has transactions with the environment in which it exists. Basically the transactions between an organisation and its environment involve inputs and outputs. In puts are usually those resources the organisation obtains from its environment and include information, energy, money, personnel, materials and equipment. Outputs from the organisation are actually what has been transformed from the inputs and could be considered the end process of the organisations manufacturing process. Outputs from the organisation can take many forms depending on the organisation involved. However the basic process is almost the same for all organisations;

 

 

The survival and growth of the organisation depends on a favourable input-output ratio. With a bias towards improving output as against inputs. There are multiplicities of factors that can affect the organisations operations or disrupt the regular

Input-transformation-output process. Some of the major environmental elements that affect a business organisation are shown in the sketch below: -

 

 

Figure1. Multiple Environmental Influences on an Organisation. (Adapted from Wexley and Yukl (1984)).

 

Customers and competitors are key determinants of the market demand for the organisations products or services. Customers by buying and competitors by undercutting prices and offering better conditions to workers.

Suppliers and competitors for sources of supplies and labour are principal determinants of whether the organisation can obtain an adequate amount of these inputs.

Government regulatory agencies also exert some influence on the organisation.

Owners and stockholders also influence an organisation's goals.

Labour unions by their activities could also influence an organisation's goals, through strikes and hold offs.

Creditors and consumer groups can also exert conflicting pressures on the organisation and influence its goals and activities.

 

Where an organisation cannot maintain a favourable input-output ratio, it cannot operate efficiently, and its continual existence is in jeopardy.

 

Harrison (1978) has characterised the activities from the open systems perspective as follows: -Environment: - The task environment, which, includes all the external organisations and conditions that are directly related to an organisation's main operations and its technologies. They include suppliers, unions, customers, clients, regulators, competitors, markets for products and resources, and the state of knowledge concerning the organisation's technologies. The general environment includes institutions and conditions that may have infrequent or long-term impacts on the organisation and its task environment, including the economy, the legal system, the state of scientific and technical knowledge, social institutions such as the family, population distribution and composition, the political system, and the national culture within which the organisation operates.

Purposes: This includes the strategies, goals, objectives, plans, and interests of the organisation's dominant decision makers. Strategies are overall routes to goals, including ways of dealing with the environment (e.g. strategy for expanding operations into the construction business); goals are desired end states (e.g. becoming the leading construction firm in the South), whereas objectives are specific targets and indicators of goal attainment (e.g. 5% growth per year). Plans specify courses of action toward some end. Purposes may be explicit or implicit in the decision makers' actions. They are the outcomes of conflict and negotiation among powerful parties within and outside the organisation.

Behaviour and processes: This includes the prevailing patterns of behaviour, interactions, and relationships between groups and individuals-including cooperation, conflict, coordination, communication, controlling and rewarding behaviour, influence and power relations, supervision, leadership, decision making, problem solving, planning, goal setting, information gathering, self-criticism, evaluation, and group learning.

Culture: This includes shared norms, beliefs, values, symbols, and rituals relating to key aspects of organisational life, such as the nature and identity of the organisation, the way the work is done, the value and possibility of changing or innovating, and relationships between lower and higher ranking members.

Structure: This includes enduring relations between individuals, groups, and larger units-including role assignments (job descriptions; authority, responsibility, privileges attached to positions); grouping of positions in divisions, departments and other units: standard operating procedures; established mechanisms for handling key processes such as coordination (e.g. committees, weekly meetings); human resources mechanisms (career lines, reward, evaluation procedures); actual patterns (e.g. informal relations, cliques, coalitions, power distribution) that may differ from officially mandated ones.

He further asserts that an organisation's success depends heavily on its ability to adapt to its environment or to find a favourable environment in which to operate (as well as its ability to tie people into their roles in the organisation, conduct its transformative processes, and manage its operations (Katz and Kahn, 1978). Those systems needs do not necessarily correspond to the interests or priorities of top management. 

 

The congruence model of organisational behaviour (Nadler and Tushman, 1977, 1980) based on the general systems model is structured around input, transformation, and output. The major types of input to the system of organisational behaviour are seen as the environment which presents constraints, demands, and opportunities; the resources available to the organisation; and the history of the organisation including key events, decisions, crises, norms, and others, which influence current behaviour. A fourth input and perhaps the most crucial is the organisation's strategy. Strategy is the set of key decisions about the match of the organisation's resources to the opportunities, constraints and demands in the environment within the context of history.

The output of the system includes the patterns of activity and performance at different levels of analysis. Specifically, the output includes organisational performance, as well as group performance and individual behaviour and affect, which of course contribute to organisational performance.

The basic framework thus views the organisation as the mechanism that takes input- strategy and resources, in the context of history and environment- and transforms it into output-patterns of individual, groups and organisational behaviour.

 

Nadler (1981) further contends that the major focus of organisational analysis is therefore, this transformation process. The model conceives of the organisation as comprising four major components: -

First, is the task of the organisation or the work to be done and its inherent critical characteristics.

Second, are the individuals who perform organisational tasks.

Third, are the formal organisational arrangements, including various structures, processes, systems, which are designed to motivate individuals in the performance of organisational tasks.

The fourth is a set of informal organisational arrangements, which are usually neither planned nor written, but which tend to emerge over time, these include patterns of communications, power, and influence, values and norms, which characterise how an organisation actually functions. The relationships among components can be thought of as each component having a relationship with every other component. Each pair of composing components, seeking to establish a relative degree of consistency, congruence or fit.

Figure 2. A Congruence Model of Organisational Behaviour (Nadler and Tushman, 1980).

 

The basic hypothesis of the model is that organisations will be most effective when their major components are congruent with each other. To the extent that organisations face problems of effectiveness resulting from management and organisational factors, these problems will stem from poor fit or lack of congruence among organisational components.

The concept finds earlier reflection in Homan (1980), who in his pioneering work on social processes in organisations emphasised the critical role of the interaction and consistency among key elements of organisational behaviour. The concepts of consistency and or relationships among organisational components have been used by a variety of theorists such as Leavitt (1965), Seiler (1967), Lawrence and Lorsch (1969), Lorsch and Sheldon (1969) and Galbraith (1977).

At the core of this systems based perspective is the assumption that the interaction among the organisational components is perhaps more critical than the characteristics of the components themselves, and that as systems, organisations fundamentally work better when the pieces fit together.

This perspective on organisations is thus a contingency approach. There is not one best organisational design, or style of management, or method of working. Rather different patterns of organisation and management will be most appropriate in different situations. The model recognises the fact that individuals, tasks, strategies and environments may differ greatly from organisation to organisation.

Nadler (1981) further contends that organisational changes may be prompted by environmental variations, strategic shifts, the introduction of new technologies, changing worker characteristics and any other variables. In most cases, major changes require not only changes in strategy and the nature of the work to be done, but also alterations in structures, people, and processes.

 

Bertalanffy (1968) emphasises that the organisation as an open system has to adapt itself to the environment in order to survive. He asserts that an organisation's performance and the rationality of its internal arrangements depends on the environment-organisation contingency. The nature of the contingency that prevails in organisations in the present study will feature significantly as the researcher seeks to identify and outline the pattern of activity sets that these organisations activate in response to task environment intrusions. Some environments influence an organisation by means of long-term determined stable aims and at the same time do not provide the organisation either with opportunities or hard economic restrictions. These are typical conditions for a planned economy; such an environment demands reactive behaviour, where stability of performance is a primary criterion. Turbulent dynamic environment creates on the one hand new opportunities but demands entrepreneurial behaviour. Which require the effort to take full advantage of organisational resources potential, the ability to adapt itself, to search for new opportunities and innovations.

In the present study an effort is made at identifying the specificities of the adaptive responses and the particularities of the changes organisations engage in, while detailing what aspects of their internal and external circumstances such responses or change actions are intended to deal with.

 

The next section of the review focuses on the organisational life cycle.

 

1-2 The Organisational Life Cycle.

 

Organisations by their very nature go through life cycles. They are established, grow, expand and suffer setbacks, periods of revitalisation as well as decline and death. Greiner, (1972), developed a model of organisational growth, in his sequence of growth, the various stages of growth of an organisation are interspersed with periods of crisis. Inability to overcome the crisis that characterise each growth stage could mean the imminent death of the organisation. Barnard (1938) maintains that long-lived organisations are atypical and that most organisations disintegrate after comparatively short periods of existence. While some organisations facing crisis can determine where the problem lies, replace their top managers if necessary, reorient and survive, other organisations simply fail.

While it appears that older well-established industries are more likely to survive than younger ones, they are far from immortal. According to Starbuck (1979) only 2 per cent of all corporations reach the age of 50 years, and even in this stable group a full 30 per cent can be expected to disappear within ten years.

 

The size and age of an organisation are critical for understanding its context and its progress through various stages of growth and decline. As organisations are established, those that survive over time, expand in both market niche and production base. This demands improved management and co-ordination of activities; failure to implement these effectively can adversely affect effectiveness of the organisation.

The organisations involved in the present study have been in existence, in some cases for more than a decade, how the changes initiated in these organisations are tactically deliberate management activity intended towards market expansion and increased production will be inquired as part of the research information. The research will seek to determine whether such actions are adaptive responses to contain decline pressures or initiatives to expand organisational activities in a preferred direction.

 

Wilson (1985) asserts that every organisation is influenced by its past operations and is an embodiment of conservative influence, with the passage of time there is a need to adapt to changing trends, new technologies that are compatible with the times must be implemented or the organisation will decline.

 

As Aldag and Stears (1987) point out, it is apparent that many organisations that have achieved prior success often fail because they are poorly managed when they begin to decline. In their view, while many reasons could account for the high failure rate of new organisations, one overriding cause is a lack of management's understanding of the organisation's context.

 

Another reason is management's inability to manage an organisation through its critical stages of development.

 

Stewart (1991) points out that the nature of the environment in which many organisations are currently operating can be characterised by rapidly changing markets and customer requirements, with increasing complexity in the technologies utilised. This turbulent and continuously changing demand is reflected in the different strategies adopted by management to ensure the survival and growth of their companies.

 

Waterman (1987) observes that somehow there are organisations that effectively manage change, continuously adapting their bureaucracies, strategies, systems, products, and cultures to survive the shocks and to prosper from the forces that decimate their competition.

 

However other organisations collapse and may have to be re-acquired, reactivated and made productive, profitable and effective. A fair amount of the research is concerned with ownership change and the changes therein ensuing and how such changes are planned and executed and the outcomes realised, as a result of such change activities.

 

The next section of the review is on the concept of organisation adaptation; viewed as a widely applied concept in organisational change.

 

                                                                                       CHAPTER 2

 

2-1 Organisational Change As An Adaptive Coping Response

 

The study of how organisations develop over time examines what adaptation has actually taken place. A number of studies have indicated some organisational development takes place independently of strategic moves. These studies indicated that increasing bureaucratisation is a function of time. Inkson et. al. (1970) In a longitudinal study of fourteen organisations in the English Midlands over a period of four to five years found that they had, on the whole increased their autonomy from outside board or owning groups; probably indicating that their internal delegation had increased. These changes were independent of changes in size. Evans and McQuillan (1977) found similar trends over four years in the history of a large British Insurance company, though they were not wholly independent of its board during that period.

 

It is not altogether irrational to postulate, based on earlier research, on three dentifiable processes of change. Kiesler and Child (1981) propose an adoptive process where administrators co-opt managerial procedures developed in managerial schools and published in the management literature. Starbuck (1965) originated the concept of organisational learning whereby "as an organisation gets older it learns more and more about coping with its environment and with its internal problems of communication and co-ordination.

A third change process, could be the planned change process of organisational development which has an organisation wide effect; is co-ordinated at various levels, with full senior management support; and involves all of an organisation's participants and processes.

 

In principle, the issue of adaptive coping response in organisations sits uncomfortably on the border between perceived actuated response within an organisation involving the application of appropriate strategies with or without the aid of outside agencies, and internal responses actuated in response to change as an organisation's normal operating procedures. However, considering that adaptive coping is in response to a crisis at organisation wide level, then it is apropos that it is operative in unusual circumstances, other than the normal response-reactive processes of an organisation over time. This observation is supported by Penrose (1952); commenting on the conscious organisational decision making for managing or adapting to the environment while writing on theory of the firm, he states that "...to treat innovations in firms as chance mutations not only obscures their significance but leaves them essentially unexplained, while to treat them directly as purposive attempts of men to do something makes them far more understandable." In relation to the present study, an assumption of proactive effort on the part of an organisation’s management to steer an organisation into the best positioning to optimise its potentials in a defined situation and setting is hypothesised and how this is realised for each of the organisations studied is discussed.

 

While this may very well be a non-significant issue bordering on definition, in the context of this research, it assumes significance due to the non-exactitude of the categorisation of adaptive coping response strategies viewed within the framework of organisational development.

 

According to Harrison (1970) what passes for organisational development has diverse expressions and there is no one acceptable technique. He sees the different approaches as varied techniques in response to different organisational problem.

 

Lawler (1981) states that in order for most change efforts to be successful, a number of systems must be changed otherwise congruence will not exist and the changes will not be institutionalised. To facilitate these sub-component changes to realise organisational goals the appropriate procedure is that one or more systems become lead systems of the change effort and the others become lag systems. As to how a complex organisation facilitates congruence through coordination of change activities through its subsystems may vary and uniquely dependent on the system under consideration. Thus an aspect of the present research seeks to perceive each organisation’s change and adaptive coping response within this supportive sustaining framework of a system’s subsystems responding to a central leading from one of its units.

 

Nadler (1981) indicates the difficulty of effecting change on an organisational wide basis, he states: -

"Bringing about a major change in a large and complex organisation is a difficult and problematic task. Individuals and groups must be motivated to continue to perform in the face of major turbulence. People must be told that the "old ways" which include familiar tasks, jobs and procedures and structures are no longer applicable. Political behaviour frequently becomes more active and more intense. While there is still much that is not understood about change in complex organisations, the experiences and research of recent years do provide some guidance to those concerned with implementation of major changes in organisations".

 

Beckhard and Harris (1977), in their discussion of change management, provide a simple but powerful vocabulary for talking about the different kinds of significant changes that occur in organisations. They argue that almost any major change no matter what the context, can be thought of as a transition.

Figure 3. Organisation Change as a Transition State. (Adapted from Beckhard and Harris, 1977)

 

A change begins with the organisation existing in a current state (A). The future state (B) is how the organisation is planned or envisioned. It is the expected state that would ideally exist after the change. The period between A and B can be thought of as the transition state C. Beckhard and Harris argue that the transition state is critical because it greatly determines the quality of the future state, yet it has characteristics that make it uniquely different from either the current state or future state.

 

They further indicate conditions that reveal when a change process has been effectively managed; these are when: -

The organisation is moved from the current state to the future state.

The functioning of the organisation in the future state meets expectation, that is, it works as planned.

The transition is accomplished without undue cost to the organisation.

The transition is accomplished without undue cost to the individual organisational members.

 

Within the context of the present research this implies the need for goal identification at varied levels within organisations researched. These goals at the higher management level encapsulate the purpose and the driving mechanisms that underlie the change process. These conditions provide a basis for ascertaining the effectiveness or otherwise of the change process over time, enabling a concise framework for framing questions that are in tandem with other propositions for assessing the state of the organisation as a manifest indication of changes in the organisation, at the specific organisation level.

 

Nadler (1981) concedes that while not every organisational change can be expected to meet these criteria, such standards provide a target for planning change as well as assessing change effects.

Nadler further recommends that owing to the balancing effect, whereby an organisation's components thrive toward congruence, there is the need for the researcher to take a holistic or systemic perspective when thinking about major organisational change.

 

For effective management of change at a most general level, this researcher suggests three stages. First, there is the need to diagnose the current state as a way to identify problems or unutilised opportunities. Second, is the need to design the future state. Typically, this involves a determination of desired output, the development of strategy to achieve that output, and the design of the task, individual, formal organisation and informal organisation component configuration needed to execute that strategy. The third step is implementing the movement or modification of these components.

 

The next section of the review examines the effect that organisation change has on the overall performance of the organisation.

 

2-2 The Effect Of Change On Organisational Performance.

 

Delacroix and Swaminathan (1991) contend that both classical schools of organisational analysis as well as modern managerial thought display a high degree of faith both in organisations' ability to change and in the idea that organisational change is beneficial. Both schools tend to assume that organisations frequently transform themselves and that change often leads to a better fit between organisations and their environment

 

The management strategy literature is replete with numerous researches on the relationship between organisational change and organisational performance. Most of these literatures Haveman (1992) contend focuses primarily on change of domain through diversification-the introduction of new products, often for new clients, and sometimes requiring the introduction of new technology.

Authors in a large body of work argue that the impact of diversification on firm performance is contingent on the direction of change, the degree to which new activities are related to the original core competencies of a firm. In this context, related diversification has three main benefits: - firstly, it can generate additional resources to further increase competence in the firm’s original domain. Secondly, it can reduce average long run costs, due to scale effects, rationalisation of production and managerial tasks, and opportunities for technological innovation. Thirdly, it can reduce the variability of the firm's income stream. In one on of the most extensive studies of diversification, Rumelt (1974) found that firms that followed a related diversification strategy-controlled diversity-outperformed firms that followed an unrelated diversification strategy. Even after adjusting for industry effects, the negative relationship between profitability and extent of diversification remained (Rumelt, 1982). The impact of organisational change on performance thus depends not only on whether the environment is changing or stable, but also on what type of change forms undertaken- whether related or unrelated fields of activity constitute the change.

The extent, to which a new line of activity represents related or unrelated diversification by this reckoning, can be determined by reference to the organisation's original domain. Organisational domain has three dimensions: products sold, clients served, and technology employed (Levine and White, 1961; Thompson, 1967) Diversifying involves changing one or more aspects of domain.

What distinguishes related from unrelated diversifying is the extent to which each dimension of an organisation's domain must be altered to accommodate new activities. Change that affects one dimension of domain only slightly should be less arduous to undertake than change that requires extensive modification of two or all three dimensions. For instance, offering new products to old clients with a similar production and distribution technology requires adjustment of only one dimension of domain, whereas offering new products to different clients that are made and sold in ways very different from the original products requires substantial modification of all three dimensions of domain. The former should be easier to undertake and be less harmful to performance and survival chances than the latter.

 

The next section of the review examines aspects of the organisation environment interface.

 

2-3 The Organisation/Environment Interaction

 

Duncan (1972, 1973) provides a general model of the impact of the environment on the organisation. His analyses attempted to specify which characteristics of the environment would create problems for an organisation by increasing uncertainty.

Firstly, he suggests the lack of information on which factors in the environment will be most relevant to the organisation's function. For example, lack of knowledge of consumer attitudes in regard to a new product; inability to determine whether political instability in some part of the world will affect certain market areas; inability to determine which socio-political factors might affect the price of oil; inability to forecast future technology in key areas.

Second, is the inability to assign probabilities to given known environmental factors.

Third, is the lack of information on the costs of an incorrect decision.

These factors are then combined into a fourfold classification of types of environmental uncertainty based on two further dimensions for analysing the environment; simplicity to complexity and stability to instability. Thus Duncan hypothesised that the lowest perceived uncertainty of the environment occurs in simple, static environments where there are only a few relevant factors.

 

Figure 4. A model of the degree of environmental uncertainty based on degree of complexity and stability of the environment. (Source: B.B. Duncan "The characteristics of organisational environments and perceived environmental uncertainty" Administrative Science Quarterly, 1972. 72. 320)

 

The highest perceived uncertainty is experienced by organisations operating in a complex environment- that is one characterised by a large number of dissimilar factors that are continuously changing (cell 4).

Duncan's impression also is that, stability is more important than complexity in determining uncertainty; in other words environments with a few unstable factors were seen as more uncertain and threatening (cell 3) than environments with many dissimilar but relatively more stable factors operating (cell 2).

 

The viability of most organisations is measured on ability to make profits in achieving organisational goals. In attaining this goal the organisation not only interacts with its environment but it must continuously ascertain the essential variations within this environment that impact on its operations and ultimate survival.  Response to such turbulence will require much flexibility and interest on the part of individuals, groups and the organisation as a whole. No central authority can possibly provide all the answers that an adequate fit will require. Participation, open communication and innovative organisational forms will be essential if an organisation is to be structured appropriately to its environment. Management must keep itself informed about external developments. Even more important management must expand its view of the organisation to see it not as a narrow, closed system of owners, managers and employees but as a part of an open system, also encompassing suppliers, customers, competitors, governments and a multiplicity of action groups. This gives an indication of the import of the nature of response by business firms to government regulation, consumers and other external determinants of the organisations outcome.

 

In spite of this obvious linkage between an organisation and its environment, Child and Kiesler (1981) raise the question as to how far one should seek to interpret the development of organisations as the product of external forces rooted in the social and economic system as opposed to interpreting it as the product of idiosyncratic purposive behaviour on the part of those within organisations who decide on strategies. Basically, this comes down to a debate over the significance of environmental forces and management practices.

 

Organisations in developing countries, such as Ghana, are exposed to immanent general environmental influences of divergent sources, mainly from the economic and political subsystems of the general environment (refer to Agboletey 1984; M. Phil Thesis. University of Ghana.) Since the general impact of such influences are organisationally non-discriminatory, ecological models offer a viable explanatory reference.

 

Bacharach, Bamberger and Sonnenstuhl (1996) contend that the current macro theories of organisational change, such as institutional theory and population ecology, have placed primary emphasis on explaining change within a population of organisations and the rates at which change may occur, with little emphasis on the details of the process of transformation itself (Beckhard and Harris, 1977; Tichy, 1983).

Bacharach et. al. (1996) are of the opinion that to understand the organisational transformation process it is necessary to consider the micro political processes within organisations as well as the macro environmental changes that often trigger transformations.

Other articles by Romanelli and Tushman (1984), DiMaggio (1994) have called for the further examination of the processes underlying fundamental organisational transformation, noting that such an examination needs to pay particular attention to the essential role of agency in terms of subunit and interest groups, resistance and advocacy. The present research pays particular attention to these suggestions in its design.

Bacharach et. al. (1996) discuss a logic of action that must be consistent at three interacting levels; the institutional level-the level that links the organisation to its broader environment- must have a logic of action that is consistent with the managerial level- the level that controls and serves the technical level- which level in turn must be consistent with the technical level- the level that directly processes the materials used by the organisation-.

When these levels of consistency are guaranteed and operative; they propose that the organisation then has an aligned logic of action. Organisations, they assert, could then be viewed as cognitively most coherent and structurally most stable when these hierarchically structured logic of action are consistent with one another.

In the light of this notion of organisational coherence and stability, as well as this three tier hierarchical distinction in conformity with previous studies, an examination of how the environment drives change in organisations, in the present research will also consider the way in which logics of action at all three levels become misaligned and realigned. Organisations, it is assumed approximate stability when there is alignment in the logics of action of the parties in the exchange. This alignment of logics does not mean that there is a total absence of conflicts between parties in exchange relationship in the organisation undergoing change. It simply means that the   means and ends of parties across all levels are not inconsistent. With particular reference to developing country organisations, it cannot be overemphasised that weak linkages between economic policies and organisational expectations fostered by global financial and exchange rate policies have had significant impact on outcome states of organisations.

Bacharach et. al. (1996) point out that while environmental shifts may lead to the initiation of new policies and practices at the institutional level, actors at the core-that is, managerial and technical levels are likely, at least in the short-run, to cling to old attitudes and behaviours inconsistent with the institutional actors' new ideas. Over time, these incongruencies are likely to be resolved, resulting in the stable states assumed by both instituitionalists and ecologists.

 

A classic distinction in organisational thinking is between situations that can be described as certain, predictable, well understood, or routine and situations that can be described as unpredictable, intractable or uncertain (Burns and Stalker, 1961; Galbraith, 1973; Scott, 1987). An implication of this distinction is that when situations are certain or predictable, then people can plan and organise their activities to rely on routine and bureaucratic organisation (Galbraith, 1973). When uncertainty reigns, then people adjust to this lack of information by being more experimental, flexible and even improvisational (Scott, 1987). This distinction appears in numerous areas of organisational inquiry. In organisational design, authors describe how conditions of low uncertainty are best adapted to bureaucratic or mechanistic organisations, while in conditions of high uncertainty, more flexible, adaptive, organic organisations are appropriate (Burns and Stalker, 1961; Lawrence and Lorsch, 1967; Galbraith, 1973). The distinction also appears in decision-making theories. Frederickson (1984) advised that when uncertainty is low, rational models of goals and choice processes are appropriate, whereas less comprehensive models become relevant in more uncertain, turbulent settings. Typologies of efficient problem solving strategies for differing technologies (Thompson, 1967; Perrow, 1980) and organisational control (Ouchi, 1980) also reflect the distinction between certain and uncertain tasks.

A further analytical insight is offered in Thompson's (1967) analysis of decision-making strategy as a function of firstly goal consensus among dominant coalitions in an organisation. Secondly the degree to which there is certainty about how to accomplish a given goal. The first of these variables resembles Cyert's and March's theory of the firm, but by combining it with the dimension of certainty and Duncan's analysis of how certainty can begin to be measured one can derive a more powerful taxonomy of managerial decision types.

The figure below shows the basic typology and identifies four kinds of managerial decisions or leadership styles:

 

Figure 5.  Types of managerial decisions under different conditions of certainty/uncertainty. Source J.D. Thompson. Organisations in Action. (New York: McGraw Hill, 1967).

 

Computational: If there is high goal and high certainty about how to achieve goals, one can routinise decision making as much as one routinises mathematical problem solving once the rules are known. Thus a shared decision can be reached to develop a new product for which the technology is known and for which a clear market exists.

Compromise; if there is high certainty about how to achieve various different kinds of goals but low consensus on which goals should be sought management finds itself having to make compromises and engage in various kinds of bargaining behaviour of the kind that Cyert and March identified.

Judgmental: If there is high goal consensus but the environmental/organisation interaction is such that there is low certainty about how to achieve a given goal what is needed is good judgement on how to maximise the probabilities of desired outcomes and minimise the probabilities of undesired outcomes. Thus, judgement is needed where the market for a given product is clear and where profit goals are clearly agreed upon but the costs of developing the product are highly uncertain because of changing technology.

Inspirational: If there is neither consensus on goals nor any degree of certainty on how to achieve a given goal, what is needed is an inspirational leader who combines the ability to pull diverse coalitions together and the judgement to make the decisions with the highest probabilities of desired outcomes. The decisions that entrepreneurs make in the face of high environmental uncertainty to go ahead with certain products and market strategies are of this kind.

 

There is an assumption that the emerging structure within an organisation is dependent on clarity of decision-making as facilitated by accurate interpretability of the external environment and ease of goal establishment taking into full consideration relevant influencing factors. With regards to the present research, the emergent structure whether bureaucratic or open, flat structures, as exists in the organisations studied may be as Thompson (1967) imply a reaction to ease of understanding and interpreting the environment by management.

 

Schein (1980), states that it is obvious that the various normative theories which attempt to "specify" leadership or managerial behaviour or "correct" ways to organise, often make inadequate assumptions about the state of the organisation/environment interaction. The ability to see the full range of possibilities in that interaction enables an understanding of the numerous organisational structures and decision-making styles available in organisations.

 

One fundamental aspect of organisations is that as organisations grow and expand they become more formally structured and bureaucratic. While bureaucratic structures are essential for managing growing organisations, they have consequences for an organisation's eventual outcome states.

 

Kiesler and Child (1981) note that most organisations today are too tightly tethered to a static position by their existing standardised systems and procedures. They are too committed to their investment in these to be willing to adopt new programs embodying an innovative response appropriate to a new external condition. This is in large measure the price of previous success, which generates a belief in the viability of previous policies and which also leads to the bureaucratic concomitants of larger size.

 

An essential requirement of any organisation, of whatever size and stage of growth, is the need to anticipate future events and be able to respond quicker than its competitors. This ability to read into the future in a changing situation ensures a reduction in uncertainty and enhances the organisation's flexibility.

 

As Hedberg et. al. (1976) point out; change is one of the world's dominant properties. In such circumstances, an organisation maximises its chances of long-term viability by placing greater emphasis on flexibility, immediacy of problem solving, creativity, and initiative, with less emphasis on authority, clarity, or firm unchangeable decision. The implication here is that, an organisation should be able to find a balance between its long-term achievement and short-term survival, or between the conditions for creating adaptiveness and controlled economy.

 

Starbuck (1965) found from his review of research, that organisations become formalised as they grow older-that is, they develop characteristic roles into which individuals settle, patterns of behaviour stabilise and standard operating procedures are established. He concluded "the formalisation process is fundamentally an adaptive process."

 

Meyer (1977) seems to be emphasising organisational rigidity with growth, he asserts that formal structures are massively unresponsive to changes in organisational goals, to changes in environment, and even to changes in leadership. He had little faith in the potentialities for large organisations to develop through improvement of their internal management. Although growth may actually be a consequence of responsiveness, in Meyer's view growth invariably generates greater complexities of co-ordination and communication and thus breeds an unresponsive structure.

 

However, the opinion has been expressed that there is no a-priori conflict between routinization and formalization on the one hand and organisational flexibility on the other. An organisation, as it were, becomes more flexible when it has discovered continuities in its environment and has developed efficient, fast responding programs. It is only when an environment no longer fits the definitions on which these procedures are based, when an organisation is treating an environment which has become discontinuous as continuous that routinization and formalisation become sources of inflexibility.

 

The concepts of continuous and discontinuous decision processes evolved out of an illustrative case of formalisation of the Peace Corps movement by Alexander (1974).  Organisational members learn to identify similarities in recurring decision-making processes. Variables perceived originally as discontinuous are placed into a common scheme of reference and appear continuous after some time, until a shock disturbs the decision environment and ends the continuity decision makers have constructed as their image of reality. What this implies is that, on the whole an organisation originates a novel response to an emergent problem, which procedure after some time becomes a standard process.

 

Robbins (1974) points out that those who have the responsibility of deciding the direction an organisation will take and who hold the authority to move it towards its goals are the single most important factor in determining an organisation's success or failure. The quality of an organisation's administrators will determine its success; successful administrators will anticipate change, vigorously exploit opportunities where they exist, correct poor performance and lead the organisation towards its objectives. The importance of administrators or management to organisation success requires some clarification of their work

 

In elaborating strategies of adaptive coping response strategies evoked by an organisation's management to cope with crisis, Simon (1957a) sounds a conspicuous note of warning wryly suggesting that one should be cautious about the rationality of such strategies, because as he puts it "limited knowledge sets bounds to rationality". Cyert and March (1963), confirm this observation, reasoning "...and because the groups directing organisations are often coalitions of individuals holding partially conflicting objectives".

 

Kantor (1982) studied 165 mid-level managers in five companies. Her basic questions were what attributes do managers have that contribute to innovation share and what factors do innovative companies have in common. She argued that innovative mid level managers: -

-Were confident that uncertainties would be clarified, had foresight, and saw unmet needs as opportunities.

-Have long time horizons and view set backs as temporary obstacles in an otherwise straight path to a goal.

-Have insight into organisational politics and a sense of whose support can help them at different times. They encourage subordinates to help them, promise a share of rewards, and deliver on their promises.

-They persevere, with tact, until they achieve their goals.

Kantor concludes that traditional hierarchical organisations do not encourage innovative middle management. In such settings, managers spend a great deal of their time coping with change; there is an atmosphere of uncertainty that creates opportunities for the very few risk takers. Rewards are scarce and promises about rewards are not always kept.

Kantor's research presents aspects of management in organisations facing change and she presents the managerial disposition appropriate to formulating and executing effective change.

 

Closely allied with Kantor's findings has been the perennial question of how administrators behave when faced with uncertainty or other difficult problems.

 

Steinbruner, (1974) laments the lack of progress in specifying the coping behaviours that political actors actually tend to adopt when confronted specifically with decision characterised by great uncertainty. This lapse in research to generate a prescriptive model for individuals and their organisations with the aim of optimising decisions by employing objective-rational techniques is a gap that needs to be filled.

 

Argyris and Schon, (1978); and Bateson (1972) note that it is most often the case that in most organisations, espoused norms to handle crises are in perpetual conflict with actual operating norms, and this could lead to very serious problems in organisational performance result.

 

Starling (1986) Municipal Coping Strategies, commenting on this schism between operating realities and formal procedures comments that decision techniques that are based on idealised rationality are not appropriate for decision-making processes characterised by high uncertainty. Starling's research at the Oakland Municipal Council is cited here with some reservations, when one takes Child (1973a) admonishing into consideration-

Although some structural regularities have emerged from comparisons between business and other types of organisations, it is doubtful whether many conclusions drawn from one field of organisation would apply without qualification to others.

This being the case, though, Starling's research findings have cogent psychological dimensions that could very well find expression across organisation typification, they must be assessed with caution.

 

His study reveals that, faced with unfamiliar problems, different persons, with different experiences, purposes, beliefs and values, turned out to apply tactics of coping that were so regular as to generate a charted sequence of adaptive coping behaviours that vary with parameter conditions and available resources. His research indicates that certain easy or passive responses are chosen first; more sophisticated or difficult coping tactics are adopted only when insufficient resources or a breakdown in screening forces more active coping. The initial reaction to a poorly understood decision problem is to avoid it. Avoidance, it thus would appear, is at worst normal and can even be a tactic that mitigates overreaction or needlessly quick choice. As Petersen (1987; 178-182) sums it up, the argument is not that avoidance is always good; it is that there will be a strong tendency to "pass the buck" under conditions of great uncertainty, and avoidance is not always a poor strategy. Starling's observation is that choosing avoidance is widely considered a pathological administrative behaviour yet avoidance is a normal administrative occurrence.

After avoidance, delay is the predominant reaction in the face of high order uncertainty. The difference between avoidance and delay may be principally one of time or degree to which a problem is perceived to require a solution. Specifically delay implies that a decision maker needs more time in order to implement further tactics that will enable him or her cope better with or to reduce his or her uncertainties.

The next most often adopted tactics, by Starlings research, is that of limited response, which is based on professional education, training, or on the job experience. This too is more of a passive than active response. In this mode the decision maker attempts to muddle through an ambiguous problem by limiting himself or herself to those actions that he or she can explain, understand, and thus justify in terms of accepted codes, previous experience or education, training or on the job experience. Such a situation, also is normal under subjective assumptions and can be a helpful interim tactic when, for example, experienced administrators find themselves confronted by choice problems in an environment in which familiar operating rules and guides have been suspended or do not apply. It is likely that this may result in frustration and surprising consequences to the decision makers if they fall back on a routine that irritates rather than ameliorates the problem facing them. This research indicates that the more active the coping tactic the less likely it is to be chosen, as a commitment to action is psychologically more difficult than inaction and is more likely to engender offensive results. Thus limited responses are found more often than avoidance or delay.

After limited choice, the response patterns under highly uncertain conditions become more complex. If decision makers do not have professional education, training or on the job experience, they may not have sufficient capacity to "fall back" to a limited response. If this is the case or the limited option is not working, the choices become increasingly difficult.

Where decision makers fear punishing consequences, they naturally will withdraw from the arena if possible.

If withdrawal is not possible or decision makers believe their stake to be great, the tendency when facing considerable loss is to seek appropriate response mechanisms to apply to the problem.

Cyert and March (1963) and March and Simon (1958) in their highly influential studies of organisations goal setting and decision making concluded that an organisation, is, in reality, a complex coalition of individuals and groups with diverse goals, needs, desires, talents, and orientations. In order to understand goal setting and decision-making, there is the need to acknowledge the existence within organisations of a process of continuous bargaining for power, and that coalition members use various forms of side payment to induce others to join them in pursuit of their particular goals. Commitments of resources as side payments to various coalitions e.g. high wages to employees or high dividends to stockholders become a constraint on the future actions of the organisation's flexibility by limiting its resources. Of course as organisations interact with their various environments and coalitions relate to each other they learn to revise their goals. In this case it can be seen that the total goal setting process of the organisation is a process of bargaining, limited by prior commitments and influenced by organisational learning. For the organisation to survive and adapt, it needs "organisational slack"-that is resources not committed by prior decisions. In the absence of slack resources in production capacity, talent or money to invest in new programs, the coalitions within the organisation will basically be stymied in any attempt to change the course of the organisation. The models that emerge from this line of thinking mesh more readily with the organisational and decision making models that predominate in political science and public administration (Schein, 1982).

In studying public organisations such as government bureaux, foundations, hospitals, and community organisations, it has always been clearer that organisations are composed of complex coalitions that bargain for power with each other and therefore the process of setting organisational goals and policies has to be conceptualised in terms of bargaining compromises rather than the rational pursuit of primary goals (Jannis and Mann 1977; Allison, 1971; Lindblom, 1959, 1965; Hickson, Butler, Axelson & Wilson 1978).

Indeed, organisational theories built on research from business organisations suggest a rationality of the organisation and overlooked the extent to which organisational decisions result from complex negotiations between various individuals, groups, and role sets, many of which have membership both inside and outside the organisation.

Simon (1960) made the very important conclusion that the manager should be seen in this light as one who satisfies i.e. reach a workable decision rather than maximises, because rationality is always limited or bounded. The managers of successful firms are also expected to be more output oriented when they face decline in demand because they pay more attention to the specific problem areas facing them, a process labelled "problem sensing" by Kiesler and Sproull (1982).

While these observations may very well be a given in developed country economies; in developing economies significant elements of manufacturing requirements are externally resourced and thus not within full control of the manufacturing organisations. This makes focus on input environment fairly relevant. The study will ascertain the variation in emphasis on the input-output environment in the organisations studied.

 

The conclusions derived from above complement a diagram of actions and reactions effects that manifest from within and without an organisation, succinctly captured as a stream of cascading response measures in reaction to pressures requiring organisational response in the diagram below. The diagram in a way depicts varied organisational responses to multi-source changing environmental effects on an organisations outcome state. Forces of change emanating from without make for unmitigated management response, owing to the effect of those pressures. Management who represent the organisation react by making strategic responses with an intended effect on organisational state and constituents. The whole process is captured in lucid summary in figure 6, below.

 

Figure 6.  From People Make the Difference: An IPD Position Paper. Institute of Personnel and Development, London, 1995, p. 2.

 

The next part of the review takes a look at the ubiquitous technological consideration in the manufacturing industry.

 

 

2-4 The Effect Of Technology

Technology that facilitates increased productivity is the definitive characteristic of the present manufacturing organisation. The nature of technology that a particular organisation employs has social ramifications that must be managed to effectively accentuate an organisations effective state of being.

A large number of researchers in England began to study large numbers of organisations in different industries in order to determine the relationship of organisational form to its effectiveness. In this manner Burns and Stalker (1961) distinguish between those firms with fairly stable production technologies and those with rapidly moving, dynamic technology e.g. electronic products. In stable technological environments, a more mechanistic managerial style worked well, characterised by rigidly prescribed structure, well defined duties, clear power and lines of authority for each organisational role, a strong hierarchy of command and primarily vertical hierarchical communications. By contrast, in the more dynamic technological environment, they found that a more organic organisation was better suited, characterised by a relatively flexible structure, continual adjustment and redefinition of individual tasks through interactions with others, more lateral than hierarchical communications and control and a wide dispersion of power based on technical expertise rather than organisational rank.

 

Woodward (1965) studied approximately 100 British firms to determine whether their organisational structures were related to the three major types of technology that she distinguished:

Unit and small batch technology, in which customised products are made for the individual customers.

Large batch and mass production technology such as that found on the assembly line.

Process technology which involves the transformation of raw materials through a series of continuous chemical processes.

Woodward’s finding indicate that companies with different technologies demonstrated characteristic patterns and that the most effective companies within each group were the closest to the median for that category, suggesting that there were optimal organisation forms.

It would appear that a more formal, structural approach seemed best suited to mass production technology, while a more flexible organisation seemed better suited to both unit and process technologies.

 

Subsequent studies by Pugh (1973), Hideson and his colleagues (1969), and others called the Aston Group showed that the effects of technology tended to apply only to those parts of the organisation intimately involved in that technology-typically the production departments-and that one could not infer organisational structures in other functional departments such as accounting and marketing or in the firm as a whole unless it was very small. They argued for a more contingent set of relationships, namely that technology would influence organisation only if organisational size and type of department are controlled for.

Mahoney and Frost (1974) focused on specific departments rather than total organisations and used the three part typologies proposed by Thompson (1967).

Long linked technologies, in which there is a series of interdependent steps such as in the assembly line or in continuous process work.

Mediating technologies, in which the work unit links otherwise independent units into a system through the creation of standard operating procedures.

Intensive technologies, in which each task sequence is uniquely applied to the particular needs of a given client based on feedback from earlier steps.

Using managerial judgements as to which factors contributed most to effectiveness, Mahoney and Frost found that in long-linked technologies such as data processing, the important factors were planning, efficient utilisation of employee skills for task performance, and tight supervisory controls resembling Burns and Stalker's "mechanistic systems"

In mediating technologies such as clerical departments in an insurance company, effectiveness was related to the ability to remain flexible and adaptive to the needs of the moment.

In intensive technologies such as research laboratories, managers related overall effectiveness more to effective utilisation of employees, the building of co-operation and team spirit, the personal development of employees and careful staffing of projects-more similar to Burns and Stalker's "organic" system.

In summarising these and other research studies on the relationship between technology to organisation structure, Steers (1977) concludes that there is no simple consistent relationship between technology and structure. However there is some evidence that more complex, unstable technologies are less likely to be associated with more formal hierarchical structures.

 

With respect to the present research, the determining nature of technology to overall organisation structure emergent as a consequence of planned change efforts is considered an important aspect of the overall organisational effectiveness attained as a consequence of the change effort. The typical manufacturing organisation is technology focused; and productive activities evolve around the installed technology, therefore linking the emergent organisational structure as discerned in the study to underlying factors and the specific effects on the organisations overall effectiveness is an important aspect of the present sudy.

 

Though, the research evidence is not yet conclusive enough trends have been identified to enable some theorists to construct a generalised framework for analysing the relationship between technology, environmental uncertainty and organisational form. For example Perrow (1970) starts with two characteristics of organisational tasks: -

Firstly, the degree to which the task is routinised and has few exceptions.

Secondly, the degree to which the task to be performed is based on analysable principles and known ways of solving problems versus having to constantly invent new solutions because of variations in the problem posed. These two dimensions enable Perrow to sort various kinds of technologies into a fourfold separation, in the first section are what might best be characterised as the craftsmanship approach. The raw material and the basic product remain essentially the same, but individual customers may want some special feature. For such organisations a decentralised production organisation in which the lowest technical levels have relatively low job description while supervisors have high power and high discretion appears to be most typical.

Cell 2 is what Perrow calls "non routine" manufacturing or at the extreme, R&D types of work which require more flexible organisation, the kind that Burns and Stalker would have called "organic structures". Organisations in these industries ideally display high discretion at both technical and managerial level, high interaction, decentralisation of decision making according to expertise, a high degree of interdependence and, therefore, a high need for effective co-ordinating structures.

Cell 3 involves custom made products, but in areas well known for their amenability to technical and analytical solution. Here reference is being made to engineering firms that design customised equipment for manufacturing firms and production organisations that apply such designs to making drill presses, electric motors and so on. In this model the technical level has relatively more discretion because it possesses the problem solving techniques needed to design and manufacture the process. Co-ordination is achieved through high interaction with and feedback from the consumer.

The organisation is flexible but also centralised because of the known problem solving techniques.

Cell 4. Is the traditional routine manufacturing operation involving mass production or routine process operation where the technology is well understood. Thus both of Woodward's other types, the large batch assembly and the continuous process fall into this cell since both share what Thompson has termed long linked technologies and a high degree of sequential interdependence. Firms in this cell display the greatest tendency toward the formal, centralised, bureaucratic form of organisation where co-ordination is achieved primarily through rules and plans; however, it should be noted that at the extremes, in continuous process technologies such as automated refineries, this does not hold true, at the extremes the relationships are instead adaptive to the particular characteristics of the task being performed. So that in the oil refinery there is a high formalisation but also high decentralisation down to skilled operators who have high levels of responsibility and high discretion (Blauner, 1964).

Schein (1982) commenting on the model, states that it integrates much of the work on task, environmental and technological characteristics into a single framework which makes it possible to sort out the characteristics of organisational tasks in more systematic fashion.

 

This dichotomisation of levels and variety of technology employed by organisations to facilitate the production process will enable greater clarity of the nature of aspects of the change process in the present study.  Given the centrality of technology and machinery in manufacturing, the study will also attempt to decipher the pattern of technology based organisational structure in the organisations researched.

 

The next section of the review takes a look the concept of learning in organisation.

 

2-5 Learning In Organisations as a Self-Enhanced Flexibility in the Changing Organisation.

Michel (1996) on a discussion that focuses on organizational change in the context of unpredictable futures in the non-profit human services sector. Explored the literature on emerging concepts such as the culture of "learning organizations" (Senge, 1990), the characteristics of "adaptive systems" (Zimmerman, 1994), and strategies for creating a capacity for "change-ability" (Zimmerman & Armstrong, 1994).

The purpose of her paper being to present some concepts and strategies for creating a capacity for change in a very unstable environment and to encourage a deeper critique of the changing nature of work. In a broader context, the paper presented a means for deeper understanding of organizations and systems as they face unprecedented shifts in every corner of their sector.

 

Michel (1996) intones, “Change is the only real ‘constant’ around us.

Reality tells us that change is the only real ‘constant’ around us.” However, the paradox is between change as a constant and the unpredictable nature of change that is unnerving for many people and organizations. Not surprisingly, being forced into a process of change causes many to instinctively become defensive and resistant. During organisational change, management need to create within the workforce a sense of collective acceptance and responsibility to work through the uncertainties of the change process, with a shared mindset of working out the difficulties successfully. The creation of healthy change is about living comfortably with conditions of constant change, and finding ways to create, within those conditions, pathways for accomplishing desired objectives through continuous adaptation (Zimmerman & Armstrong, 1994). The Ontario Prevention Clearinghouse summarizes the unique dilemma facing today’s leaders in three simple phrases: there is no ‘away’ ... to create something new without being able to leave behind the old. There is no ‘finally’ ... the change process that is underway is not simply a matter of seeking a new equilibrium there is no ‘returning to normal’ ... the chaos changing organisations are coping with is their new normal; the old structures, models, practices and roles are gone (or should be). Many organisational constituents have trouble acknowledging that fact because of the painful individual and organizational identity crises brought about by such a realization. Organizational change, Michel points out is not simply a reactionary strategy for organizations to survive a temporary state of flux. Rather, organizational change goes beyond coping with, managing or adapting to change as it occurs. These assumptions suggest, rather narrowly, that change is only a temporary state, predictable, directly traceable, and attributed to external forces. Organizational change is about transformation, creating capacity and an infrastructure for continuous learning, and understanding that every member of the organization is the organization. This conceptualisation of organizational change comes from the new paradigm of work, which has been evolving over the past three decades. It has involved a shift from hierarchical, authoritarian corporate structures to team-building models and community corporate models ([Maynard & Merhten, 1993] cited in Mullen Heck, 1995). The result of this paradigm shift is that many organizations have moved toward innovative structures that emphasize flexibility, employee empowerment, customer focus, and widespread, continual learning at all levels of the organization.

In organizational change theory, fostering healthy change implies moving past our old notions of simply managing, adapting or coping with change. Building a capacity for change in organizations means creating environments for learning, whereby people are encouraged and able to work toward building a better organization (Senge, 1994a). This process of capacity building and continuous learning can be described as creating organizational "change-ability" (Zimmerman & Armstrong, 1994). However, the challenge organizations often face is that it

"Is easier to begin initiatives than to bring enduring changes to fruition" ([A.T. Ariyaratne] cited in Senge, 1994b). Zimmerman and Armstrong (1994) describe the difference between managing change and creating change-ability:

 

Managing change

Managing change addresses the issue of moving an organization or system from Point A to Point B in the most effective manner. It assumes that one knows where Point B will be in the future even if, at the outset, one does not know the route to get there. Creating change-ability implies creating the conditions or environment in the organization or system so that it has the innate capacity to change. [This] is based on an assumption that organizations need to become more adept at creating change-ability given the unpredictability of future outcomes in the economic, social and political arenas.

 

Understanding organizational change-ability can also be illustrated through a comparison of change as linear process and change as a process of "free-fall", otherwise known as "that place of confusion and not-knowing" that Margaret Wheatley describes as chaos (Margaret J. Wheatley quoted by Flower, 1993). Linear change suggests that change is predictable and even reversible, following a solid line that might fluctuate with highs and lows, but where the outcome is not entirely unknown. Meanwhile, a process of "free-fall" suggests that change is unpredictable, where the only way to move forward is by letting go of the familiar. In this respect, organizations in "free-fall" are much like living systems, which "when confronted with change, have the capacity to fall apart so that they can reorganize themselves to be better adapted to their current environment" (Margaret J. Wheatley quoted by Flower, 1993). Michel (1996) then presents the concept of Free-fall: letting go of what you know and starting from a different point and contrasts it with Linear Change.

Wheatley refers to ‘open, abundant and free-flowing information as what living systems use to transform themselves’. However, she describes that ‘in order to make sense of this information, an organization needs a strong core identity or vision, one that is clear to everyone in the organization’. With a shared vision, people are then free to ‘organize their own behaviour within that vision, instead of organizing by non-dynamic, linear policies and procedures’. (Flower, 1993). This trend of thought is further elaborated by Senge (1990), who suggests that the reason people and organizations may be adverse to change and uncertain about creating a capacity to change is that "many people and organizations find themselves motivated to change only when their problems are bad enough to cause them to change". Senge further adds that "this works for a while, but the change process runs out of steam as soon as the problems driving the change become less pressing". Thus, extrinsic motivations cannot be the only driving force for change. For an organization to effectively respond to, and shape changes that may be occurring in external realms, there first has to be an understanding of the organization's internal capacity and commitment to continuous learning for healthy change.

 

Kim (1993) states, "Creating a learning organization requires a community of leaders". If every person in an organization believes in his or her own capacity to learn, then an organization can help by fostering a space in which learning thrives. Kiefer and Stroh ([1984] cited in Senge, 1990) suggested that "organizations capable of inspired performance appear to have several key elements: 1) a deep sense of purpose often expressed as a vision of what the organization stands for or strives to create; 2) alignment of individuals around this purpose; 3) an emphasis on both personal performances and an environment that empowers the individual; 4) effective structures that take the systemic aspects of organizations into account; and 5) a capacity to integrate reason and intuition". These characteristics highlight the vital link between individual learning and organizational learning in the process of creating a capacity for healthy organizational change.

 

Kim (1993) observes, "All organizations learn, whether they consciously choose to or not - it’s a fundamental requirement for their sustained existence ...[moreover], organizations ultimately learn via their individual members". Peter O’Donnell, Senior Consultant for the Ontario Prevention Clearinghouse supports this view. In his consulting work with organizations, Peter states that "increasing organizational change-ability often involves a complex process, of balancing planning and implementation of new strategies in practice with the equally important need to address the impact of change on staff, who must become skilled and comfortable at ‘learning their way into the future’". Organizations that are cognizant of this balance and committed to learning are willing to ask questions that challenge existing assumptions, make un-discussable issues more discussible, and believe that taking risks, both in learning and action, are essential to creating healthy change. Moreover, only by developing this capacity at the individual and organizational level can we hope to produce the wider changes we seek at the systems level. For example, it is not enough to put individuals or organizations together and encourage them to collaborate in the creation of something new.

The partners must know how to create change in their separate roles before they can contribute to collective change.

The fundamental principle of "learning organizations" is the transformation of experience into knowledge (Senge, 1990). In the second edition of his book about "learning organizations", called The Fifth Discipline, Senge (1994) predicted that, "the organizations that will excel in years to come will be those that understand how to gain the commitment of employees at all levels and continually expand their capacity to learn". The five disciplines, by which Senge defines learning organizations, are understood to be disciplines that are practiced continually by the best organizations, but are never mastered (Senge, 1990). These five disciplines include: systems thinking; personal mastery; mental models; shared vision; and team learning.

Understanding what makes a learning organization is no harder than understanding what makes a great team. That is, "a group of people who, over time, enhance their capacity to create what they truly desire to create" (Senge, 1994). There are a number of skills and capabilities that characterize learning organizations: aspiration to change because one wants to, not because one needs to; reflection on deep individual and collective assumptions and patterns of behaviour; learningful conversation; and conceptualisation of larger systems and forces at play. The fundamental balance of learning organizations is between organizational issues and people issues. As Senge (1994) states, the actual 'fifth discipline' is systems thinking, because it is the cornerstone of the learning organization and of the other four disciplines. Traditional approaches usually focus on isolated parts of a system, which limits an organization's efforts to solve problems and be effective. However, systems thinking can be described as a conceptual framework that encourages an organization to see patterns of organizational behaviour, and then learn to reinforce or change them effectively.

 

Knowing that system thinking is the anchor of the learning organization, the remaining four disciplines are discussed in no particular order. The next discipline of learning organizations is personal mastery, which means, "deepening one's vision, focusing one's energy, developing patience, and seeing reality objectively" (Senge, 1994). Personal mastery is about working toward the results one decides, personally, professionally or otherwise (Senge, 1994). This discipline is not unlike the concept of empowerment, which is the foundation of many efforts in health promotion practice.  Next, mental models are defined as the way in which "we understand the world and take action in it based on notions and assumptions that may reside deeply in the psyche" (Senge, 1994). Understanding mental models is also something that is not new to health promotion practice, although it may not be described as such. In understanding the theory and practice of health promotion, emphasis is placed on exploring our own assumptions, values and biases and how they may influence our practice. As Senge describes, "[w] e may not be aware of the effect these models have on our perception and behaviour, yet they have the power to move us forward or hold us back". However, he goes on to state the importance of "learning to unearth our internal pictures of the world, to bring them to the surface and to hold them rigorously to scrutiny...to carry on 'learningful' conversations that balance inquiry and advocacy, where people expose their own thinking effectively and make that thinking open to the influence of others". Egan (1994) explores the influence of mental models in terms of the culture of an organization. As he indicates, before attempting to change an organizational culture, you need to know how it is defined. This definition requires an in-depth exploration of practice ethics, biases, assumptions, and the shared or individual visions about one's practice. It also requires asking what is the ‘preferred organizational culture’ versus what is the ‘covert culture’ (i.e., often undiscussed, unnamed, undiscussable, and even unmentionable), neither of which are necessarily what is stated on the plaque on the wall. The fourth discipline is shared vision. Senge (1994) believes that "[n]o organization becomes great without goals, values and missions that become shared throughout the organization." However, many organizations do not understand the difference between a vision statement and a genuine vision. As Senge states "a genuine vision breeds excellence and learning because people in the organization want to pursue these goals". Meanwhile, a vision statement is often a one-shot effort to give "overarching direction and meaning" to an organization's strategy. Senge goes on to suggest that, "writing a vision statement can be a first step in building shared vision but, alone, it rarely makes a vision 'come alive' within an organization”. As Kiefer and Stroh (1984) cite from Ackoff, "a vision has the capacity to motivate people far more effectively than a precisely defined solution, because it is not bound by preconceived limitations". Moreover, the process of creating visions enables people to clarify and realize what they really want, independent of what presently seems possible, by building a bridge between the current and desired states (Senge, 1990). The final discipline of a learning organization is what Senge describes as team learning. This principle means an organizational commitment to working together synergistically, such that the learning of the whole team is greater than the learning of each individual member. In order to achieve true learning in a team, Senge (1994) suggests beginning with dialogue, in which members "suspend assumptions and think together to solve problems or chart the future of the organization". Following open dialogue, an important next step is discussion, whereby views are presented and defended and the team searches for the best view to support decisions.

 

Senge emphasizes that increased adaptability and an orientation toward continuous learning are prevailing characteristics of learning organizations. As he describes, ‘corporations that are leading the pack, are focused on two types of learning: "generative learning", which is about creating; and "adaptive learning", which is about coping’. Kim also uses these characteristics to describe the levels of understanding in organizations undergoing change. As Kim (1994) describes, "There are multiple levels from which one can view and understand the world: events - the things we encounter every day; patterns of events - accumulated memories of events; systemic structure - "event generators" responsible for producing events; and shared vision - "systemic structure generators" guiding force behind the creation or change of all kinds of structures". These levels of understanding can help recognize where one is at in an organizations so that organisational human constituents can go beyond typical reactive and ‘event-oriented’ responses and begin to look for ‘higher leverage actions’”.

 

Michel (1996) surmises that organizations can pursue healthy change through a number of guiding principles that reflect the culture of learning organizations. Fundamental to creating capacity for individual and organizational learning are a shared vision of the organization, rich relationships and a feeling of interconnectedness, and an open flow of information and dialogue. These ‘intangible’ characteristics support the disciplines of learning organizations which, when practiced, support individual and collective opportunities for everyone in the organization to feel that they are the organization. Healthy organizations are like living systems, and require a dynamic exchange. To learn and build capacity to survive and thrive, an organization cannot be afraid to ask questions, expose and deal with "undiscussable" issues, and critique existing processes relating to decision-making processes, information sharing, and learning.  Healthy organizations view change as both a continuing and evolving process. They work hard at learning how to make conditions of change work for them. They see themselves in a virtual state of continuous change, never static, and are committed to the ongoing development of their collective intelligence, history of learning and mechanisms for ensuring interconnectedness. To foster individual and collective change-ability, organizations should focus not on managing the outcomes of change, but rather on managing the patterns, which create the change. The principle of change-ability assumes that organizations are complex systems in their own right, but also part of larger complex systems as well. At every level of change there are internal and external influences, which must be considered, including individual responses to change. Organizational change-ability will require learning and applying the principles and techniques of scenario planning to identify a range of possible futures, which, in turn, create the context in which continual adaptation can take place.

Creating a capacity for change means that few things will be obvious and many things will be ambiguous. Learning to become comfortable with ambiguity and things ‘unknowable’ is not something only for the Executive Director or those in upper management to deal with, but it is a collective commitment to change and to the sustainability of our work.

 

Michel (1996) presents an important disposition the changing organisation, which will be brought to bear in the present study. The changing organisation is invariably a learning organisation; how this learning process is construed and managed may very well mean the difference between successful and unsuccessful change, self-sustaining change in an organisation. The suggestions emergent from her and other researchers on organisational learning outlines, certain characteristics of organisations that serve as indicators to help decipher if a particular organisation’s change has facilitated the appropriate learning engendered activity to sustain that organisation’s successful change process.

 

The next section of the literature review outlines the pattern of interaction among the organisations’ component elements.

 

                                                                                       CHAPTER 3

 

3-1 The Organisation as a Dynamic Interaction of Component Elements

 

Kotter (1978), making use of the major variables of organisation theory developed a diagnostic model, which enabled an overview of the diagnostic categories of dynamic organisational function. The model can be used to analyse short run, moderate range and long-term organisational dynamics. The basic conceptual elements used in the model are: -

 Key organisational processes, the major information gathering, communication, decision-making, matter/energy transport, and matter/energy converting actions of the organisations employees and machines.

The external environment: An organisation's task environment can be defined as all possible suppliers-of labour, information, money, materials etc.- markets, competitors, regulators and associations that are relevant in light of the organisations current products and services.

The wider environment can be defined by such indicators as public attitudes, the state of the technological development, the economy, the occupational system, the political system, the demographic characteristics of people and organisations, the society's social structure, current price levels, etc.

Employees and other tangible assets: The size or number and internal characteristics of an organisation's employees, plant and offices, equipment and tools, land, inventories, and money.

Formal organisation arrangements: All formal systems that have been explicitly designed to regulate the actions of an organisation's employees and machines.

The social system: Culture and social structure. Culture can be defined as those organisationally relevant norms and values shared by most employees or subgroups of employees. Social structure is defined as the relationship that exists among employees in terms of such variables as power, affiliation and trust.

Technology: The major techniques and their underlying assumptions about cause and effect that are used by an organisation's employee while engaging in organisational processes and that are programmed into its machines.

The dominant coalition: The objectives and strategies for the organisation, the personal characteristics and the internal relationships of that minimum group of co-operating employees who oversee the organisation as a whole and control its basic policy making.

 

Kotter suggests that short run organisational dynamics-up to a few months- are created by specific cause and effect relationships between the key organisational processes and each of the six other elements. In other words if there is a change in any of these elements, such as drop in demand for the product-environment- or a change in employee skill levels, or the introduction of a new incentive system-formal arrangements- or a change in employee morale-the social system- or the introduction of new product technology or a key managerial change, there will be an immediate impact on the way in which the organisation makes decisions and process information.

In turn any change in organisational process will cause changes in the six other elements. One can thus track the effects of a triggering event such as a drop in the demand for a product through several successive effects on internal processes to more far reaching effects on other such elements as the state of morale or the internal social system.

 

The moderate range dynamics-up to several years- results from lack of congruence among the six structural elements which surround the organisational process. For example, if the basic strategy of the dominant coalition is based on incorrect assumptions about the external environment or if the formal reward or control system is inconsistent with employee educational levels or cultural attitudes, or if the tangible assets available to the organisation are not sufficient to make a complex product-technology- and so on, the organisation will gradually begin to experience disequilibrium and will have to seek 'ways to co-align its basic structural elements. Such a process will take time and will involve more complex organisational change processes than the reactive changes characteristic of short-term dynamics.

The long-term dynamics-decades- result from the fact that each of the structural elements becomes more differentiated and complex as the organisation evolves and this evolution for each element can be toward a more or less adaptive state. Given that some of the elements will inevitably exert more of a dynamic or driving force on the total organisation than others, it is likely that over time the elements will become less congruent or co aligned, and a need will arise for some of the elements to adapt to change necessitated by the driving effects of other elements. The ability of those elements to make the adaptation will then determine the long-range ability of the organisation as a whole to remain viable in a changing environment.

The driving elements can be any one of the seven factors or a combination thereof. Perhaps it is the dominant coalition-an aggressive entrepreneur-or a rapidly changing technology. Or perhaps the social system has been modified by legislation to alter the kinds of work employees find acceptable; or again, it could be the organisations formal arrangements are too tradition oriented and rules and regulations about work procedures need to be reviewed.

Wherever the driving force is coming from, it will take considerable time to determine whether the other elements will be able to adapt. However, since the source of the driving force is not always known and may change, it may be crucial to consider how each of the basic elements can remain adaptable, for example, by maintaining a product mix that utilises several technologies, by keeping assets in good shape and well maintained, by ensuring that formal arrangements are flexible and differentiated according to the different tasks faced by the organisation, by developing the social system toward norms of high trust, adaptability, and flexibility and by developing within the dominant coalition a learning attitude and a variety of skills.

In effect, Kotter's model provides a systematic checklist of elements to analyse, types of interactions among elements to consider in terms of a time horizon, and developmental goals to seek if long run adaptation is to be maximised. This type of model takes the open systems point of view to its logical conclusion in identifying the wide variety of interactions that must be analysed if adaptability is to be maximised.

 

With respect to the present research, it is to be noted that Kotter's model fine tunes the sub-components that drive the organisation system and indicates a relevant interaction effect mediated by intervening organisational variables as well as time and the set goals of the organisation. Though the model falls short of a theory, its detailness and prescriptive diagnostic capability make it an important descriptive instrument for clarifying the organisations' intricately interwoven and mutually influencing variables. In addition it is important to establish that while organisations researchers look for firm patterns, organisations are fluid states of constantly changing patterns, the above model emphasises this by eliciting and detailing the dynamic interactiveness that characterises some of the elements that interact as organisations adapt and change.

 

The next section of the review examines the linkage between the organisation's adaptation to changing situations and its overall organisation effectiveness.

 

3-2 Organisational Effectiveness

 

Cameron (1980), Campbell (1977), Kanter and Brinkerhoff (1981) group the many criteria that have been used to assess organisation effectiveness into three broad categories, namely: - (i) output, (ii) system state and (iii) adaptation criteria. Harrison (1987) indicates that these criteria derive from clients and consultants images of some preferred organisational state and from their assumptions about the organisational conditions that can facilitate the achievement of these states. Output goal criteria correspond to many of the specific targets toward which members of the organisation strive. Sometimes they are expressed in terms of the success or failure to achieve some end. Criteria dealing with output goals are most appropriate where the goals can be defined in terms of clear measurable objectives.

Criteria dealing with system state refer to internal organisational states and processes that can contribute to achieving output goals, whereas others like efficiency or employee satisfaction are sometimes regarded as ends themselves. Efficiency and cost related criteria are amenable to profit oriented organisations. Whereas system criteria relating to internal relationships and processes can be applied to any type of organisation, they can be viewed as desirable states or as indicators of some more global state of organisation "health" (e.g. Beckhard, 1969) that facilitates coping with organisational challenges.

Criteria relating to resource position and adaptation are especially relevant when the task environment is changing rapidly (e.g. in high technology industries), is highly competitive, or poses a serious challenge to the client organisation's viability (e.g. in social services faced with budget cuts). These criteria are especially suited for ascertaining effectiveness from the perspective of high-level administrators who have both the authority and the willingness to work for change in their organisation's or their division's relation to its environment.

Cameron (1980) suggests that in developing and deciding on definitions of effectiveness, there is the need to consider what time frames and comparison standards to apply. Comparisons could be made between current and past levels of effectiveness, for example, comparisons of efficiency ratings, accidents, and quality. The organisations effectiveness to that of others in the same industry or field, for example, comparison of profitability, sales or industry figures, the organisation's current state to some minimum standard, e.g. conformity to federal environmental standards. Comparison of the current state to an ideal standard, e.g., innovativeness or community service, etc.

The time frame used, Harrison, (1987), indicates, may vary from hours or days to several years, depending in part on the organisational feature being assessed. Different times can also be applied to the same phenomenon. Hayes and Abernathy (1980) reveal that a manufacturing firm's performance may seem impressive, for example, if one looks at its current quarterly profits or return on investment. In contrast, if that firm is achieving the results by cutting costs and aggressively marketing current products, it may be unable to sustain these results for more than a year or two because of lack of investment in the new product development.

In ascertaining the level of effectiveness in an organisation there often emerge many contradictions and tensions among the criteria adopted as measures of effectiveness. It is the case that organisational growth implies that an organisation is successful in acquiring needed resources, but growth often leads to less participation in decision making, reduced efficiency, and less ability to adjust to environmental change. The same manager may have conflicting priorities and evaluative criteria without being aware of the conflicts, because the criteria are not evoked simultaneously or their operational implications are not spelled out fully. It is also the case that few effectiveness criteria equally suit the interests and priorities of all members of an organisation. The many groups and individuals who have a stake in an organisation often have conflicting interests and engage in recurrent bargaining and influence struggles to promote their own goals and interests. In pursuing their own purposes, these stakeholders (or constituencies) typically advocate the use of divergent effectiveness criteria (Pennings and Goodman, 1977). As Harrison (1987) exemplifies, in an industrial firm, stockholders may want more short-term profits, while the research and development people favour investment that will support innovation and growth in the long run, and the unions press for better wages and working conditions. Apparently, the effectiveness criteria that characterise the interests and needs of one subgroup such as the dominant decision makers within the top management, will probably neglect the priorities of less powerful managers, external clients, production workers, government regulators, and so on.

To resolve the contradictions and enable uniform effectiveness criteria, Harrison (1987) implies that top management must resolve with their constituents an agreeable standard that all organisation participants should strive to achieve. Also it is suggested that stated priorities must reflect actual practices. It is suggested that when there is a focus on the priorities underlying major decisions, resource allocations, and patterns of rewarding and evaluating performance, it may be revealed that operative goals and priorities diverge greatly from stated purposes. Such discrepancies may enable the clarification of goals, priorities, policies, and evaluative criteria.

 

Selltiz et. al. (1981)  propose that in principle, the procedure for developing systematic measures of effectiveness is identical to that of developing any kind of measure. After clarifying the concept conceptually, the investigator specifies concretely what phenomena will be considered indicative of effectiveness and chooses measures that fit this operational definition.  Harrison (1987) admonishes that in practice, researchers in organisations may have to define and measure effectiveness in ways that allow them to engage in secondary analysis of data that are available or can be gathered quickly and inexpensively. "Unless such organisational investigators keep clear conceptual and operational definitions of effectiveness in mind when working with these less-than-perfect data, they may interpret their findings incorrectly and overlook important phenomena that are not covered by these measures.”  Where data was originally designed to evaluate the performance of employees or units, Lawler and Rhode (1976) contend that members may have learned to perform in ways that make them look good on the measured criteria, such as the number of sales completed, while neglecting other desirable forms of behaviour-such as customer satisfaction or service- that are less closely monitored.

Another salient issue of relevance in measuring effectiveness is the value of using objective, behavioural measures of effectiveness as opposed to subjective measures reflecting the judgements of participants of experts (Harrison, 1987). As Campbell (1977 p. 45) points out, in practice this distinction often turns out to be far from clear-cut. For example, the number of units manufactured in a plant during a month is apparently an objective measure, but we must have a standard in order to decide whether the figure is too high or too low, or just right. Even comparing the figure to past performance does not resolve the problem. Is a five percent growth over last year substantial or lacklustre, in light of the efforts and investments made. In the final analysis, the kinds of objective data that managers collect and pay attention to and their evaluations of these figures all depend heavily on their subjective priorities and standards (Harrison, 1987).

 

The need to ascertain the effectiveness of an organisation from that organisation's own perspective and self-established criteria it is hoped will throw light on measurement criteria of unspecified specificities. In addition the agility with which an organisation responds to changing circumstances may be significant enough to merit discussion from the organisations' owners perspective; this leads to a review of the adaptation process below.

 

3-3 Organisational Adaptation to Change and the Adaptation Process

 

 3-4 Effective Adaptive Coping

 

For effective coping to occur requires the existence of internal conditions in the organisation that will facilitate the adaptive response to change. These conditions as suggested by Schein (1980) are as follows: -

Successful coping requires the ability to take in and communicate information reliably and validly.

Successful coping requires internal flexibility and creativity to make the changes that are demanded by the information obtained.

Successful coping requires integration of and commitment to the multiple goals of the organisation, from which comes the willingness to change when necessary.

Successful coping requires an internal climate of support and freedom from threat since being threatened undermines good communication, reduces flexibility, and stimulates self-protection rather than concern to the total system.

Coping requires the ability to continuously redesign the organisation's structure to be congruent with its goals and tasks.

 

Since, within the context of the present research, it is assumed that the essential aspects of these intermediary variables that facilitate successful adaptation are actively existent. The research will ascertain salient aspects of these prerequisites for successful change, by determining the extent to which these intervening variables reflect in individual attitudes to the organisation as a whole.

 

Schein (1980) states that, that sequence of activities or a process that begins with a change in some aspect of the organisation's internal or external environment and ends with a more adaptively dynamic equilibrium for dealing with the change can be thought of as the organisation's adaptive coping cycle. He further indicates that by identifying the various stages or processes of this cycle it should be possible to pinpoint those areas in which an organisation may typically fail to cope adequately. Consultants and researchers may then be able to help in a variety of ways to increase organisational effectiveness.

The effectiveness of an organisation needs to be defined in terms of systems level criteria. Acknowledging that every system has multiple functions and also exists within an environment that provides unpredictable inputs, a system's effectiveness can be defined as its capacity to survive, adapt, maintain itself, and grow, regardless of the particular functions it fulfils.

 

For purposes of analysing the cycle, he suggests, five conceptually separable stages, all of which are more or less simultaneous, since the organisation is in a constantly dynamic interaction with its multiple environments.

Firstly, sensing a change in some part of the internal or external environment.

Secondly, importing the relevant information about the change into those parts of the organisation that can act upon it, and digesting the implications of that information.

Thirdly, changing production or conversion processes inside the organisation according to the information obtained while reducing or managing undesired side effects in related systems and stabilising the change.

Fourthly, exporting new products, services and so on, which are more in line with the originally perceived changes in the environment.

Fifthly, obtaining feedback on the success of the change through the further sensing of the state of the external environment and the degree of integration of the internal environment.

 

Certain internal conditions appear to be necessary for effective coping to occur.

In the first place successful coping requires the ability to take in and communicate information reliably and validly.

Secondly, successful coping requires internal flexibility and creativity to make the changes that are demanded by the information obtained.

Thirdly, successful coping requires integration of and commitment to the multiple goals of the organisation, from which comes the willingness to change when necessary.

In addition, successful coping requires an internal climate of support and freedom from threat, since being threatened undermines good communications, reduces flexibility and stimulates self-protection rather than concern for the total system.

Finally, successful coping requires the ability to continuously redesign the organisation's structure to be congruent with its goals and tasks.

 

Schein (1980) also recommends that sales figures and future demand figures must be analysed to determine whether the organisational change has been "successful" in terms of increased sales, as an outcome measure variable. In the case of intervening processes, he recommends that the internal environment must be assessed to determine whether unanticipated costs in the form of lowered morale or inter group competition has been minimised.

Thus, once an organisation perceives some change of problem within itself, it must then digest this information and follow a logical course of change as outlined in the five stages.

The present research as earlier stated will attempt to ascertain the extent to which these assumptions are generalisable to operative organisations undergoing change.

 

The next section of the review is based on an aspect of organisational development that will enable a detailed analysis of organisational change.

 

3-5 The Stream Analysis Approach to Analysing Organisational Change Processes

 

Porras, Harkness and Kiebert (1983) view organisations as complex, constantly evolving systems that present a substantial challenge to those who try to understand and improve their performance. Seldom, they assert, is it easy to determine the true nature of organisational phenomena. Consequently, trying to consciously change an organisation to improve its effectiveness is difficult and time consuming. Yet, presently, planned improvement of organisational functioning is a constant and necessary task of many executives and managers. Organisational development has evolved as one response to the need for strategies and approaches to planned change. Apparently, while numerous perspectives exist as to how to accomplish OD and how organisational change should take place. No widely accepted view exists, and few methods for understanding the planned change process currently exist. They contend, that professionals working in the area of change need to decide which change model to use, what the most appropriate next step might be and how to better understand the effects of past actions to improve the impact of future interventions. They stress that tools for the analysis and planning of change activities are few, but urgently needed. They suggest the stream analysis as a tool that can be used to understand and plan the change process.

Indicating that during an intervention, it can facilitate clearer insights into the current state of the change process, and after the intervention it can improve understanding of what actually occurred.

 

The stream approach is based on first identifying the key organisational factors altered by any complex change process. Given the current state of OD technology the organisational factors typically affected fall into one of four general categories; these are; the organisational structure, technology, human processes and internal physical environment. In other words, any change activity would probably affect one or more of these aspects of the organisation.

The stream framework stems from the premise that all change activities in an organisation development program can be conceptualised as a stream of actions occurring overtime.

The result of this perspective is a pictorial representation, in correct temporal sequence, of all activities conducted as part of a complex change program.

By conceptualising several parallel streams of activities flowing overtime, the analysis becomes more complex. In the case of the OD stream, each set of parallel streams may contain all of the change activities directed at altering one of the key change factors described earlier, viz. human process, technology, structure and physical environment.

By identifying the particular focus of each change activity and placing it in its proper temporal position, it becomes feasible to decompose a complex organisation development intervention into its main parts and as a result, gain a better understanding of what happened and when.

Once activities have been organised into streams a final step is to make the appropriate links between activities. Change interventions typically are organic processes in which one activity builds on the results of a previous activity, or in which a specific activity precipitates a need for a follow-on activity.

In general, one can follow a single path through the intervention by proceeding down the four streams by interconnecting arrows. Occasionally, however, two or more actions may have been precipitated by an intervention in one stream.

Thus by conceptualising a complex organisational development intervention as consisting of four parallel streams of action provides a way of looking at change processes. This can be useful not only from the point of view of the researcher, but also for the manager who is trying to keep the organisation operating as effectively as possible.

As a retrospective document, a stream chart lays out the history of an intervention so that it can be analysed from the perspective of one who wants to learn more about the change process.

 

The stream analysis makes itself amenable to research work that seeks to generate knowledge about change dynamics. By codifying the trigger patterns and relating them to outcomes of change efforts, it yields information on the effectiveness of one pattern over another.

Another important value it possesses is that of taking trigger modifications and determining if repeatable cycles occur, as the change process unfolds.

 

The next section of the review assesses some difficulties inherent in organisational change that may subvert the successful outcome of the process.

 

3-6 Some Consequences Of The Change Process That May Interfere With Successful Change Outcomes

While organisations must necessarily change to survive over time, however, all organisational change does involve at least some destruction of existing practices (Biggart, 1977). Many different kinds of changes are required in products, technologies, in markets, in the organisational structure, and in many other ways. But the readiness and willingness to change are virtually never the same among the different members and parts of the organisation. Thus every change evokes stresses, differences, and conflicts (Kahn, Wolfe, Quinn, Snoek and Rosenthal, 1964). The new practices may or may not be more adaptive than those they replace; anyhow the initial substitution phase is mostly disruptive. This initial disruption it is suggested may also incapacitate the organisation in the long term. Hence all organisational change contains an element of danger.

 

Organisational ecologists have systematised this notion into a frankly pessimistic view of structural inertia articulated around two propositions. Firstly, there are internal (Hannan and Freeman, 1977) and external (societal) constraints (Nelson and Winter, 1982; Hannan and Freeman, 1984; Amburgey, Kelly and Barnett, 1990) ensuring that organisations have little capability to change; and secondly, it is asserted that much organisational change involves the loss of competency either through structural transformation or through personnel replacement (Becker, 1989). Further it is assumed that change that modifies the visible mission of the organisation undermines its acquired legitimacy, based in part on reliability of performance (Hannan and Freeman, 1989). On both accounts, organisational change ought to prove frequently deleterious. The obvious implication here being that change in organisations constitutes for itself an acquired danger of failure.

 

Some ecologists observe further that organisational change is similar to organisational founding. It is to be noted that ecologists have accumulated evidence to the effect that young organisations tend to suffer high disbanding rate. Hence every attempted organisational change may amount to "a resetting of the liability of newness clock" (Hannan and Freeman, 1984; Freeman and Hannan, 1989), placing the changing organisation anew at a high rate of disbanding. In this vein, an organisational transformation that may be adaptive in the long run should always be perilous in the short run as argued by Amburgey, Kelly and Barnett (1990). From an organisational learning standpoint, however, March (1991) espoused exactly the reverse position describing organisational change as often beneficial in the short run but deleterious in the long run.

Thus, there are two main divergent perspectives, one describing change as largely unproblematic and beneficial and the other viewing change as difficult and perilous; both positions, of course not fundamentally incompatible (Levinthal, 1991). It is possible that both positions are practically correct under different conditions that the literature is yet to formally specify. It is an issue that will receive attention in the present research.

 

D'Aveni and Macmillan (1990) suggest that a useful step is to disentangle propositions concerning the factors promoting change attempts on the one hand, and the consequences of change on organisational welfare, on the other. Organisational change may be difficult but have beneficial effects. Or it may be easy and detrimental. Moreover, it is conceivable, they further assert, be it easy or difficult, may have no effects on organisational welfare, because it proceeds from "superstitious" learning (Levitt and March, 1988) or because it is cosmetic or simply illusory.

 

Aldrich (1992) noted that there is little direct evidence on the thesis of structural inertia.

 

Amburgey, Kelly and Barnett (1993) commenting on the field states that a number of theories focusing on the process of change suggest that in most cases organisations resist change. Resistance to change occurs because organisations are embedded in the institutional and technical structures of their environment (Granovetter, 1985). Other theories focus on factors internal to the organisation, such as how change is often opposed by organisational members (Coch and French, 1948) and even when change is advocated by some organisational members, established roles and formal organisational rules are difficult to alter quickly (Tsouderous, 1955; Stinchcombe, 1965; McNeil and Thompson, 1971; Hannan and Freeman, 1977).

 

Hannan and Freeman's (1984) structural inertia theory offers a model of the process of organisational change that includes both internal and external constraints on organisational change. The first part of their argument addressed the probability of organisational change. They argued that organisations exist because they are able to perform with reliability and if questioned, to account rationally for their actions. Reliability and accountability are high when organisational goals are institutionalised and patterns of organisational activity are routinised, but institutionalisation and routinisation also generate strong pressures against organisational change. Thus, the very characteristics that give organisation stability also generate resistance to change. The second part of their argument dealt with the effect of organisational change on survival.

They argued that because both internal and external stakeholders prefer organisations that exhibit reliable performance and because change disrupts both internal routines and external linkages organisational change is hazardous.

Amburgey, Kelly and Barnet (1993) following Hannan and Freeman (1984) define organisations as structured systems of routines embedded in a network of interactions with the external environment. Routines refer to the repetitive patterns of activity by organisational members, both individuals and groups. Beyond defining what an organisation can do, routines define what an organisation "knows". A model of organisations as structured set of reactions is consistent with the literature on the differential effects of organisational characteristics-different routines produce different organisational outcomes-but a routine based model of organisations and organisational change focuses attention on the disruption and loss of competency that results from changes in routines. If it is assumed that stable and reproducible routines are the foundation of reliable performance, then organisational change increases the risk of failure, independent of any change in the risk brought about by the new configuration of organisational attributes (Hannan and Freeman, 1984). They further contend that a routine based model of organisations is also consistent with the literature on organisational interaction with the external environment.

Nelson and Winter (1952) pointed out that routines might involve extensive direct interactions with the environment. A change in such routines will involve disruptive modifications of ties and linkages between the organisation and its environment. A change in the routines that do not directly interact with the environment may also have a disruptive effect through spill over effects. Similarly, organisational change can affect the normative relationship between the organisation and its environment. It must be pointed out that this theoretical model is more fitting to supportive environments that are slowly evolving, rather than environments that are turbulent and intrude their disruptive effects on the organisational outcome processes, by severely interfering with internal processes.

 

Another issue they raise is that organisational change disrupts routines and creates the same conditions that make young organisations more likely to fail, the earlier referred to liability of newness phenomenon (Stinchcombe, 1965; Carrol and Delacroix, 1982; Freeman, Carroll, and Hannan, 1983). A changed organisation that survives long enough can rebuild internal processes and external relationships. In this way, change can be thought of as "resetting" the liability of newness clock (Hannan and Freeman, 1984, Freeman and Hannan, 1989).

 

The net effects of organisational change depend on time. Change may be ultimately adaptive, but only after enough time passes for the organisation to repair the problems associated with disruption. If change takes place too often this recovery may never occur. Thus organisations that change frequently, may appear to be very adaptive, nevertheless they would continually be resetting their liability of newness clocks.

 

Amburgey et. al. (1990) further state that organisations change in response to perceived problems. The more experience an organisation has with a particular type of change, the more likely that the change will be seen as a solution to a broader set of problems. Unless the environment of the organisation is unusually placid, a steady stream of problems requiring solutions will be forthcoming. Moreover, the increased competence in making a particular type of change lowers the marginal cost of making the change. Because the cost decreases changes that offer a lower level of prospective benefits are more attractive and more likely to be carried out. Whether or not these changes actually solve problems can be irrelevant.

The evidence clearly indicates that organisations pass from periods of volatility and change into periods of relative stability (Steindl, 1980; Miller and Friesen, 1984; Dosi, 1984, Tushman and Bouanelli, 1985). On the other hand, changing routines requires that the organisation develop or acquire additional human and physical capital, institutionalise new processes and objectives, and shift the distribution of power within the organisation; these are all potential sources of resistance to change (Nelson and Winter, 1982; Hannan and Freeman, 1984).

 

Resistance to change is a pervasive organisational phenomenon. Schein (1980) indicates that whether the change desired be an increase in production or an adaptation to some new technology or a new work methodology, it is generally found that those workers and managers who are directly affected will resist the change or sabotage it if is it is forced upon them. He contends, that the major reason for resistance to change is that the conversion or production parts of any organisation are themselves systems-they generate ways of working, stable interpersonal relationships, and common norms, values and techniques of coping and surviving in their environment. In other words, the subsystem of an organisation operates according to the same coping principles, as does the whole organisation. If the subsystem is to change, it must sense a change in management policy, be able to import this information into itself, manage its own change, stabilise it, export better results in terms of the desires of management and obtain feedback on how it is doing. The manager desiring the change can from this point of view accomplish more by viewing his or her role as that of helping the system to cope rather than giving orders or issuing directives.

There is some evidence that one of the best ways to help implement a change is to involve the affected system directly in the decision making process. The more such a system participates in decisions about how to manage the change, the more stable the system is likely to be (Benne and Chin, 1969; Lewin, 1952; French and Coch, 1948).

 

It is to be noted that since organisations exist as an inter linkage of subsystems; a change in one component is likely to activate some response in other components. This inter linkage between subsystems, it has been suggested should be used to positive advantage, so that a desired change successfully implemented in one of the systems, in its spread effect should be a basis for other successful changes that will permeate the whole organisation.

 

Congruent with Schein (1981), each stage in the adaptive coping cycle presents characteristic pitfalls and problems. To ensure organisational effectiveness requires some amount of successful coping on the part of the organisation, implying that each stage of the cycle must be successfully negotiated.

 

Another dimension is one adopted by Haveman (1992) he opines that when an organisation undertakes none trivial change it must learn new patterns of communication to facilitate the flow of different information. It must integrate new members who must learn new work routines in order to fill new job functions and manage the altered flow of work. It must forge new relations with suppliers and clients (Hannan and Freeman, 1984, Singh, House and Tucker, 1986). During the reorientation period that follows change, an organisation diverts a considerable portion of its resources from operating to restructuring. Thus the task facing an organisation that undertakes change is similar to that facing a new organisation. The effort involved in developing a structure and system of activities de novo or in restructuring an existing organisation lowers the efficiency of operations, which leads to poor performance in the short term and lower survival chances in the long term.

 

Dissonance reduction, it has been imputed, is implicit in major organisational change process inasmuch as old situations are discarded in favour of new adaptive restructuring congruent with the organisation's new goals. This restructuring necessarily activates inconsistency in previously existing patterns of "cohesive activities". This results in a search for consistency, a viable and definable concept in social psychology (Festinger, 1957; Heider, 1958; Bem, 1970). Theories of cognitive consistency have maintained that parties often seek to avoid or reduce inconsistency even if this reduces the potential for utility maximisation (Bem, 1970; Zimbardo and Leippe, 1991). Implied in this concept is the notion that when parties hold two contradictory cognitions they experience an averse state known as cognitive dissonance (Kahle, 1984), which may arise for a number of reasons, including exposure to new information, disagreement with other parties, or because of forced compliance (Kahle, 1984). It is a premise of cognitive dissonance theory (Festinger, 1957) that such states will motivate parties to restore cognitive consistency by changing the importance of cognition or adding new cognition.

Bacharach et. al. (1996) assert that, if parties who are members of the same group share a common logic, it is likely that they will also experience a common sense of dissonance whenever that logic is threatened. Furthermore, when experiencing such dissonance, these organisational collectives may take any number of actions to restore their sense of consistency. Blau (1964) described in detail how cognitive dissonance and dissonance reduction at the group level may stimulate and "socially confirm" changes in collective attitudes and behaviour. This drive for cognitive consistency, they suggest, may thus explain the non-rational component embedded in the strategic choice theorists' concept of "resistance to change" (Tichy, 1983), the organisational ecologists notion of inertia (Freeman and Hannan, 1984), and the institutional theorists' idea of taken for granted behaviour (Zucker, 1988).

Given parties preferences for consistency, to avoid dissonance, they may either resist change or challenge changes that have already occurred. It has thus been suggested that the analysis of dissonance may provide insight into the micro processes of transformation from one state of consistency to another.

 

Whatever, effective ways of resolving these differences constructively and with reasonable rapidity must be found if the changes are to occur smoothly and with a minimum of delay, thus enabling the organisations product and/or services to be marketed at a time when they are profitable.

 

The final section of the literature review sets organisational change into a clear perspective with a summarisation of the prevalent models that define the various types of organisational change.

 

3-7 Triggers of Change and Adaptation

 

Organisational change is occasioned by modifications in an organisation's structure, goals, technology and work tasks. (Organisational change can be thus defined as the difference between two or more successive organisational conditions or states.) Carnall (1990) has defined organisational change by identifying the areas in which changes take place, such as technology, goals and work tasks. Thus many of the changes that take place, such as innovation, multi-skilling, flexibility, total quality management, continuous improvement and re-engineering are all embraced by Carnall's definition.

 

Change is an inevitable part of everyday life in all organisations. Organisations come under pressure to change constantly to survive rather than when they want to change, because of a combination of factors emanating from within and without the organisations. Environmental turbidity requires organisational reactive response to enable organisational sustenance. Internal forces may arise from a need to adapt to enhance productivity and expand to meet growing market needs. Theoretically, there can be a wide variety of pressures that trigger organisational change, such as financial losses, or a drop in profits, increased competition, environmental sensitivity, new technology and workforce diversity. A 1991 survey by Wille and Hodgson that embraced organisations in the UK, continental Europe and the USA indicates that financial losses or a drop in profits, together with increased competition were at the top of the list of change triggers. These two factors accounted for almost 50% of the reasons given by companies for embarking on change, followed closely by technological development, new chief executive officers, industry in recession and staff utilisation.

 

3-8 Planned Organisational Change

Internal factors such as low morale among staff used to be considered the main trigger for planned change, whereas external factors such as rapid technological growth, economic or legislative shifts tended to be seen as the main factors prompting reactive change in organisations. However, since the economic success of a country requires cooperation between government and industry, there is increasingly better communication between these parties, which enables companies to plan for change and be more proactive. In Europe and the developed economies, the experience of the last two decades has encouraged companies to be proactive, which has also prompted them to plan for change well in advance; for instance having emerged from the complex market fluctuations of the 1980s and the early 1990s companies have developed more flexible strategies in order to be prepared for external and internal triggers for change, which has become evident in the shift from emergent to planned models of change over the last decade (Wilson, 1993). Indeed planned change can only happen by being proactive, which is to be ahead of change itself, by anticipating problems in the market-place or by negating the impact of a world-wide recession (Wille and Hodgson, 1991) and in today's turbulent business environment, managers are usually exhorted to adopt an entrepreneurial style in order to realise the planned vision. (Wilson 1993).

 

The identification of appropriate responses to change triggers has been a key issue for strategic management in organisations, and typical responses have included decentralisation, empowerment, total quality management and the development of the flexible firm (Wilson 1993). While managers need to make these decisions for a change to occur, one of the main determinants of success in a change situation is the quality of the decision making process and of the resultant decisions. Moreover, the effectiveness of an organisational change response is not only determined by an appropriate decision, but also by giving careful attention to the implementation of these decisions. When implementation occurs some organisations underestimate the human implications of change, while relatively few recognise the importance of employee reactions to change.

 

Planned change is a planned movement occurring from one organisational state to another that has a commitment to producing a specified outcome. Porras and Silvers (1991) describe planned change as an intentional action that has a commitment to producing a specified outcome.

 

Cummigs and Huse (1985) identify four broad states of change: exploration of the need for a change, planning for change, tracking action to implement changes, and integration of change with other systems in the organisation. Proactive organisations continually undertake the first and second of these. However, in the second (planning) state it is also important to understand that change can take place at a number of levels. In general, it has been posited that, there are six different organisational levels at which change can be made (Jones 1995): corporate, divisional, functional, task, group and individual.  At all levels different types of difficulties can arise and a difficulty at one level can result in a domino effect on all the other levels. For example at the corporate level, a strategic decision on the direction and form of change could be made, which means that at divisional level, a change to structure is put in place. Individual level is usually one of the most complicated areas of change management. However, most of the models of change recognise the importance of the individual level, they pay different amounts of attention to the 'people' factor in implementing change. For these reasons it can be important to have an integrated approach to change, so that it becomes an integral part of the daily organisational life. Planned organisational change can be divided into two small: small and large-scale changes (Cummings and Huse 1985).

 

Transformational change is associated with large-scale strategic changes and several models have been developed to bring about small to medium-scale changes. While it is not easy to measure the scale of changes, in the following sections transformational change and other change models will be explained in order to illustrate differences in their approaches.

 

3-9 Organisational Transformation

Transformational change is the transfiguration from one state to another that is fundamentally different. Transformational change is usually the response to, or anticipation of major changes in an organisation's environment (Marshak 1993), for example privatisation is a change from a state-owned monopoly to a market-driven business. Nadler and Tushman (1986) identify two dimensions, which distinguish OT from other types of planned changes: the scope of the change and temporal positioning of change in relation to external events. The scope of the change expresses whether the change is incremental (change in the reward system etc) or strategic (designing a new strategy), whereas temporal positioning describes whether the change is reactive or anticipatory, as shown in the table below, the authors suggest that once the nature of the change is anticipated along these dimensions the action plan can be developed. Thus incremental change is change that aims to improve the existing systems, policies and procedures. While strategic change is change that aims to establish new systems, policies or procedures.

 

 

Table 1. Types of change and the responses they actuate (after Nadler and Tushman 1986).

 

Nadler and Tushman (1986) note that 'tuning' occurs in anticipation of external events; for example, if customer organisations start to change their information technology, by adopting network systems in order to transfer information more efficiently, supplier organisations might gradually start to change (tune) their communication systems, in order to be complementary with customer information technologies. 

Conversely, 'adaptation' type change occurs when organisations react to rather than anticipate their external environments. Incremental change of this type seldom results in change for the entire organisation.

However, 'reorientation' involves changing dramatically in anticipation of future events, and 'recreation' is a drastic change in reaction to a major external disruption. Nadler and Tushman (1986) identify these two types of strategic change as transformational changes, which result in an organisation moving to a state that is totally different from what it was before. An organisation may transform itself into a flexible organisation as opposed to a very bureaucratic one because customers complain about bureaucracy in other sectors. Such a change would be of the 'reorientation' type, because the organisation would have a lead-time in which to change itself dramatically in anticipation of future events.

Organisational transformation is usually an internally driven process, whereas other types of change often use organisational development techniques that rely largely on outside development specialists. In transformation the need for transformational leaders is strongly emphasised. Transformational leadership is based more on leaders shifting the values and beliefs and needs of their followers (Burn 1978).

 This definition shows that transformational leadership operates at two different levels: first, at a psychological level by shaping the values, beliefs and assumptions of employees and, second, at a behavioural level by creating social situations which powerfully communicate significant message to others. However, it is not at all clear how significant messages can be communicated powerfully and Wright (1996) has suggested that further research is needed in order to understand the nature and influence of transformational leadership. Whether they are incremental or strategic organisation changes need to be implemented.

 

Over the years several change models have been developed. Organisational change has been studied extensively, not only by organisational theorists but also by sociologists and psychologists. In some cases there have been attempts to develop integrated approaches, which utilise the contribution of several disciplines (Cumming and Huse 1985); in other cases these integrated approaches simply combine different models, without adopting a multidisciplinary approach. Most models adopt either a macro or a micro level approach to change.

 

Lewin's (1954) 'force field analysis', form the foundational base from which all theories of organisational change are derived, and is generally considered as the landmark model of change. Lewin suggested that in a change situation there are two sets of forces: restraining forces, those striving to maintain the status quo; and driving forces, those pushing for change (Cummings and Huse 1985). This illustrated below in Figure 7, below

 

Figure 7. An example of Lewin's Force Field Analysis

 

Lewin among other things suggested that trying to maintain the balance between the two forces would not bring about change. Therefore, one needs to increase the driving forces and decrease the restraining forces that inhibit a move from the current state. Lewin's well known change model consist of three steps: unfreezing the status quo, moving to a new state, and refreezing the new state to make it permanent, as shown in Figure 19.2. If forces pushing for change are stronger than forces maintaining the status quo, organisational change occurs.

 

 

 

 

REFREEZE

 

Establish the new patterns of behaviour as those that are normal

       MOVE

From old Behaviours to new behaviours

UNFREEZING

Disturb the equilibrium to lessen resistance to change and create need for change

 

 

 

 

 

 

Figure 8. The Lewin three-stage change process

 

Lewin suggested that changing the behaviour should start by 'introducing information' that shows discrepancies between the desired behaviours and those that people currently exhibit' (Cummings and Huse 1985), which indicates that effective communication is important in the change process. Unless communication is effective the 'unfreezing' stage of the process will not be successful. Although Lewin used the organisational level of action to 'move' behaviour, that is through revised organisational structures and processes, and even at this level of action effective communication was considered to be a very important factor. For instance, employees need the information to understand what new patterns of behaviour are required. Finally, he utilised new cultures, policies and structures to 'refreeze' behaviour in the new state.

Although Lewin's principle are very basic his model shows that effectiveness of the communication process can be one of the most important factors in determining the successes of the change process. This is especially true in attempting to understand the restraining forces, which often consist of invisible mental factors such as perceptions or emotions.

 

3-10 The Systems Model of Change

A system is an organised assembly of components, related in such a way that the behaviour of any individual component will influence the overall status of the system (McCalman and Pato 1992). The systems model of change describes an organisation as five interacting variables: strategy, structure, task, technology and people (Hellriegel et al. 1989), this provides a framework that can be used to analyse each variable and understand its impact on the others, which alerts us to the idea that if one these things is changed it has an impact elsewhere. Successfully understanding the impact of these interactions necessitates a very effective communication process between parts of the organisation and between managers and employees. Otherwise a very subjective evaluation based on the opinions of a very limited group consisting mostly of senior personnel could be used. In the systems model of change, the communication process is seen as part of the 'structure' variable (Kreitner and Kinicki 1995). The danger in this is that the communication process is only seen as a formal system, which places little emphasis on the effectiveness of the process. However, as Kreitner and Kinicki (1995) point out, the systems model of change 'underscores the assumption that people are the hub of all change, and change will not take place unless individuals embrace it one way or another.' Thus an effective communication system, which took account of employees’ views, would be more likely to enable managers to communicate changes to the employees in a way that also enabled employees to understand, digest, clarify and participate in the change process.

 

These two in addition to action research, which is a data, based method to diagnose issues, analyse them, feed them back to relevant parties and take action. The essential steps in action research are: diagnosis, analysis, feedback, action, and evaluation.

 

These are the traditional models of change other recent models of change are worthy of consideration. Lewis (1991) focuses on changes internal to an individual, for example changes to an individual's system of beliefs. Lewis's matrix diagram presented below in figure 9 assumes that the environment structure is external to the individual and this surrounds the matrix, while mental, emotional structures and self-concepts are internal to the individual. Two of these quadrants deal with what Lewis calls objective factors. The first deal with working conditions, demands and resources, and the second embraces other people's perceptions and interrelations. The remaining quadrants deal with subjective factors. One consisting of the individuals skills and knowledge and the other the individual's feelings. In order to implement change successfully, Lewis (1991) suggest it is necessary to identify which of these quadrants is required to change, because different skills are needed for each one.

 

 

Figure 9.  The Lewis model

 

However, Lewis argues that if the matrix is used as a guide, all that is required is to imbue the person with the courage to confront his or her feelings about the change. Lewis's (1991) model is rare because it focuses on the micro issues of change, such as the feelings of individuals, whereas although other models recognise the importance of the individual in the change process they do not suggest techniques to deal with them. Nevertheless, in order to deal with these micro issues, change managers need to develop appropriate skills, first to understand individuals' feelings, and then to deal with them.

 

Another change model is suggested by Plant (1987) in his 'need, commitment and shared vision model'. This model is comparatively more managerially orientated (Wilson 1993) and its objective is to help managers to implement change in complex organisations. According to Plant implementation requires managers to persuade employees to accept and support change. However, Wilson (1993) argues that a severe limitation of the model is that, it relies on a manager's ability to persuade. Indeed, if persuasion is regarded as one of the key components of effective communication (Bovee & Thill 1995), then the nature of the communication process needs to be analysed more critically to overcome the limitations of these models.

 

Very recent attempts to develop change models usually adopt a more integrative approach and these are considered next.

 

3-11 The Integrative Approach

One of the first integrative models to be developed was Bullock and Batten's 'Integrative Model of Planned Change' (Cummings and Huse 1985), which draws on an analysis of over 30 other models of planned change, although it is difficult to see what criteria was used to select the models that were integrated. In essential terms the model splits the change process into four phases:

Explanation: In which the importance of creating awareness about the need for change is emphasised, often with the help of an outside organisational development specialist.

Planning: which consists of the core activity of the model and involves the use of an outside consultant to work with employees to diagnose organisational problems and develop plans of action for their solution. Clearly to do this a good communication process is required so that the information on which action plans are based is objective and as free as possible of subjective evaluations.

Action: which starts with implementation of the programme change, evaluation and feedback of results to employees. This may well involve modifications to the programme, with further evaluation. Once again an effective communication system is required for the success of this phase.

Integration: in which the changes are stabilised; that is, they become adopted as the new way that the organisation will function.

 

The strongest criticism of this model relates to its final phase. Many researchers, for example Nadler and Tushman (1986), suggest that it is impossible to stabilise change because it is a constant, ongoing process. In the light of this idea it is hard to see how the final phase of the model has much plausibility. However, the four phases have a distinct similarity with the phases of action research model, indeed more so than in any other change model.

 

3-12 A Critical Analysis of Change Models

Given that there are various change models, one would expect that there are guidelines for enabling selection of which model to adopt or assume as an interpretation medium in an organisation. However as noted, there are few agreed criteria to help one choose between the models. While all of them identify major change steps, characteristics and categorisations of core variables that identify any change process, there is a noted shortcoming in what is suitable for what organisational circumstances and situational state. Therefore an implementer of change is still left with the perplexing question of 'Which model should be used in order to bring about the required change?' And an interpreter of change with what model to best explains a particular change scenario in an organisation. Moreover, all of the models tend to leave people with a feeling of unease. None of them, even the integrative model, looks comprehensive enough to be applicable to all situations of change. This is because most of the models focus on identifying a set of phases to follow, but give no details of the supportive mechanisms, which could be absolutely necessary for change to succeed. Indeed most of the literature only pays lip service to these mechanisms and does not emphasise how vital they are.

One of these support mechanisms of change is a communication process. Although most of the models discussed in the previous sections mention a communication system, they treat it as something separate to the change process and fail to include it in any of the stages or phases of the model. However, communication process cannot easily be excluded from any other system, action or process. All changes in organisations need to be communicated to the different parties involved, and it can be argued that communication is a process through which change occurs. (Ford and Ford 1995). Thus an effective communication process needs to be considered as a process which incorporates all the other aspects of change within it, or as Ford and Ford (1995) also put it, 'producing change is not a process that uses communication as a tool, but rather it is a process that is created, produced and maintained by and within communication. Therefore communication systems and processes are essential ingredients of the change process and, like involvement, participation, negotiation and support, they should never be treated as something separate from the process of change. An effective communication process can be considered as one of, if not the most important component of any change model, without which it will be impossible to foresee and eliminate any blockages to change, rather than just react to resistance when it occurs.

 

Many organisational change models have been developed over the years. The main organisational change models include force field analysis, the systems approach and action research. Alongside these classical change models, more recent models have been developed, for example by Lewis and Plant, the integrated approach to change aims to pull all change models together and borrow missing elements from each one to generate a general change model.

 

The next aspect of the proposal focuses on the methodological details of the present research; its design, data collection techniques and analytical considerations.

 

Chapter Four

 

The Present Study

 

4-1 Aim of the Study.

 

The research researches into the process of change and change strategies employed by organisations in the manufacturing and service sector, either as part of their normal management procedures, strategic management re-orientations or inevitable response to some organisational state or environmental intrusions to maintain/reinstate their organisations to effective states of operations. The overwhelming effect of environmental influences on organisational processes had been evident in previous research, the present research will attempt to elucidate the impact of external determinants on the outcome of organisational change processes, as well as external variables that instigate change. Mapping out and attempting to integrate this external influence where it is a predominant organisational determinant to existing system dynamic variables.

Adopting a heuristic approach, the study will ascertain the nature of change as each unique case situation indicates in the organisations studied. Attempting to establish an explanatory pattern from the information so derived of the nature of the separate events to enable the beginning of the formation of a reliable prediction of the essential characteristics of change in organisations.

 

The basic theoretical orientation being to ascertain the nature of adaptive responses initiated by organisations operating in turbulent environments as these organisations contend with change, seeking to adequately explicate the nature of interactive dynamism that characterises the organisational change process.

The research will seek to ascertain the nature of adaptive response strategies operative in the manufacturing industrial sector and the services sector, as they change and respond to the pressures of internal and external demands for change. The intention being to ascertain the extent to which organisations in adapting to organisational circumstances change.

 

 

4-2 Design of the Study

The research design is devised in a more traditional fashion, specifying namely:

Data collection methods

Sampling criteria

Type and size of sample

Measures for all variables

Analytical procedures.

 

Audet J. & d’Amboise G. (2001) in their definitive research on Multi-Site Study comment,    ”The Multi-Site Study is a qualitative research approach that can be applied to gain an in-depth knowledge of an organizational phenomenon that had barely been researched. It combines several approaches to case study research, borrowing from the positivist tradition, the interpretative approach and the qualitative research corpus. It involves the observation and analysis of several sites using namely cross-case comparisons and explanation building techniques to analyse data”. The approach has been employed in the present study. The section below details in depth the essential characteristics of the case study research method as employed in the present study.

 

 

4-3 Case Study Questions

The fundamental question here is what is the nature and discernible pattern of change instituted in the organisations studied. Whether as in the industrial sector organisations, organisational change is merely the installation of new machinery and the infusion of operating capital in previously existing organisations/factories/manufacturing industries or a more complicated interaction of variables at varied levels of the organisation? The other research questions guiding the research are: -

 

1. What is the exact nature of change and adaptive response that organisations in the study initiate?

2. What external and internal factors instigate the need for organisation change?

3. What are the effects of organisation change on the organisation's internal processes?

4. How does change affect workers attitude and performance and how do workers and management react to change?

5. What are the effects of change on the organisation's outputs?

6. What factors determine the successful outcome of organisational change?

7. Do organisations pay differing attention to aspects of their environment?

 

4-4 Key Features of the Case Study Method

In general, case studies are the preferred strategy when "how" or "why" questions are being posed, when the investigator has little control over events, and when the focus is on a contemporary phenomenon within some real life context. The case study, like any other research strategy, is a way of investigating an empirical topic by following a set of pre-specified procedures. Applied to elicit meaningfulness and understanding of complex social phenomena, the case study enables the researcher to retain the holistic and meaningful characteristics of real life events-such as individual life cycles, organisational and managerial processes, neighbourhood change, international relations, and the maturation of international relations, and the maturation of industries (Yin, 1994). Thus the case study research method disposes itself to exploratory, descriptive and explanatory research.  Yin (1994) discusses a logic-of-action of the case study. In the first place, a case study is an empirical enquiry that- i. investigates a contemporary phenomenon within its real life context, especially when. ii. The boundaries between phenomenon and context are not clearly evident. Secondly, because phenomenon and context are not always distinguishable in real life situations: The case study inquiry; i. copes with the technically distinctive situation in which there will be many more variables of interest than data points, and as one result. ii. Relies on multiple sources of evidence, with data needing to converge in a triangulation fashion, and as another result. iii. Benefits from prior development of theoretical propositions to guide data collection and analysis. In effect, the case study strategy comprises an all-encompassing method-with the logic of design incorporating specific approaches to data collection and to data analysis. Thus ensuring the case study as a comprehensive research strategy, that is specifically defined and implemented as each unique research situation warrants. Case studies include both single- and multiple-case studies, which could either be qualitative or quantitative. In the area of evaluation research, case studies figure prominently. Yin (1994) indicates that there are at least five different applications in this focal area. Most prominently, is to explain the causal links in real life interventions that are too complex for the survey or experimental strategies. In evaluation language, "the explanations would link program implementation with program effects" (U. S. General Accounting Office, 1990). A second application is to describe an intervention and the real life-context in which it occurred. Third, case studies can illustrate certain topics within an evaluation, again in a descriptive mode-even from a journalistic perspective. Fourth, the case study strategy may be used to explore those situations in which the intervention being evaluated has no clear, single set of outcomes. Fifth, the case study may be a "meta evaluation"- a study of an evaluation study (Smith, 1990; Stake, 1986). Whatever, the application, one constant theme is that program sponsorer -rather than research investigators alone - may have the prominent role in defining the evaluation questions and relevant data categories (U. S. General Accounting Office, 1990; Yin, 1994).

 

This brief introduction adequately suggests that the case study is an adequate design for the present study, since many elements of its defining characteristics are amenable to the requirements of the present study.

 

The case study design, incorrectly thought to be a variant of the quasi-experimental one shot, post-test-only design, is now a clearly independent research approach that has its own research designs.

 

Primarily, the design is the logical sequence that connects the empirical data to a study's initial research conclusions and, ultimately, to its conclusions. In conducting the case study, emphasis has been placed in distinguishing between statistical generalisation and analytical generalisation. In statistical generalisation, normally adopted in surveys and experiments, inference is made about populations based on data collected from samples. In analytical generalisation, as applied to case study generalisation, a previously developed theory is used as a template with which to compare the empirical results of the case study. The empirical results may be considered yet more potent if two or more cases support the same theory yet does not support an equally plausible rival theory. It has been noted that because a research design represents a logical set of statements, the quality of any design can be judged by the standards of certain logical tests. Concepts that have been offered for these tests include trustworthiness, credibility, confirmability, and data dependability (U. S. General Accounting Office, 1990). Construct validity is concerned with whether a sufficiently operational set of measures has been operationalised to facilitate adequate data collection. To meet the test of construct validity, it is required that the two steps specified below be met. i. Select the specific types of changes that are to be studied (in relation to the original objectives of the study). ii. Demonstrate that the selected measures of these changes do indeed reflect the specific types of change that have been selected. For doing case studies as indicated in the above figure, three tactics are available for increasing construct validity. The first is the use of multiple sources of evidence that converge, this is relevant during data collection. A second is to establish a chain of evidence, also relevant during data collection. The third tactic is to have the draft case study reviewed by key informants. Internal validity, basically internal validity is a concern only for causal or explanatory case studies, in which the researcher is concerned with trying to determine whether event x led to y without the interference of a third, spurious factor -z-. As concern for case study research, internal validity generally revolves around the issue of making inferences. It is the case that case studies involve an inference every time an event cannot be directly observed. In this situation it will be inferred that a particular event resulted from some earlier occurrence, based on interview and documentary evidence collected as part of the case study. The questions that need to be asked are: Is the inference correct? Have all the rival explanations and possibilities been considered? Is the evidence convergent? Does it appear to be airtight? A research design that has considered these questions has begun to deal with the overall problem of making inferences and therefore the specific problem of internal validity. As to the specific tactics for attaining internal validity, the analytic tactic of pattern matching, and two other related analytic tactics, explanation-building and time-series analysis, are suggested. External validity deals with the issue of whether a study's findings are generalised beyond the immediate case study. Yin (1994) indicates that the external validity problem has been a major barrier in doing case studies. In that, critics often state that the case study is a poor basis for generalising. However, due to the fact that case studies rely on analytical generalisation, where the investigator is interested in generalising results to some broader theory rather than to some universal set or population of which the sample is a subset as in the case of statistical generalisation. The above criticism of case studies is untenable. Analytic generalisation is not necessarily based on a single case, rather applying replication logic the theory must be tested in additional cases and be confirmed. Reliability is important in case study research ensuring the adequate documentation of research procedures to enable the minimisation of errors and biases in a study. To achieve this purpose, it is recommended that recourse be made to the use of the case study protocol to enable adequate documentation. Also recommended is the development of a case study database. In conducting a case study it is recommended that effort is made to make as many steps as possible operational and to conduct the research as if "someone were looking over your shoulder" Yin (1994). Thus ensuring that another person could follow in your steps in conducting the same study and arrive at the same results.

 

The basic research approach adopted for the present study is the multi-site, multiple embedded case study design with a literal replication.  This is an appropriate case study design fitting the contingencies of the present research, as well as enabling adequate flexibility. The main unit of analysis being at the organisational level, while sub groupings and individuals in strategic position will also serve as data sources. Yin (1994) suggests that any use of multiple-case designs should follow a replication and not a sampling logic, and cases must be carefully selected. The cases should serve in a manner similar to multiple experiments, with similar results (a literal replication) or contrasting results (a theoretical replication) predicted explicitly at the beginning of the study. Further note is to be taken that the replication design does not necessarily mean that each case needs to be either holistic or embedded. The individual cases, within a multiple-case study design may be either. When an embedded design is used, each individual case study may in fact include the collection and analysis of highly quantitative data, including the use of surveys within each case. With regards to the present research, at each level of analysis, data collection techniques used, range from references to organisation's records, through to interviews.

 

In the organisations studied, each individual organisation is considered as a separate and independent data source. To ensure that organisational change at the organisational level remains the context for studying individual views, there is a deliberate thematic focusing of inquiry instruments on generating responses reflecting organisational wide issues, even where such data source is primarily from an individual source. Overview analyses of all participating organisations in cross cases analysis is conducted. Across cases/organisations, the essential aim is to indicate as clearly as possible the extent of realisation of the replication logic in organisation change processes. This is in accordance with the logic underlying the use of multiple embedded case studies, whereby each case/organisation must be carefully selected such that it either predicts similar results as in a literal replication or produces contrary results as in theoretical replication. With regards to the number of literal replications, experts of the field recommend, it is a matter of judgemental discretion, the greater certainty lies with the larger number of cases. Both the individual cases and the multiple cases remain the focus of analysis and discussion. Data generated within each organisation varies across a wide gamut of issues of organisational relevance elicited through interviews applying the focused interview technique.

 

The present research adopts an eclectic approach in its review of the literature, drawing on theoretical perspectives from varied fields of organisational theorisation that focus on the research area and in so doing provide clarity of theoretical generalisation, providing subject specific terminology to facilitate adequacy of descriptive reference at one level and enhanced explanatory capacity at another level.

 

To investigate an organisational phenomenon, there is the need to specify the level at which that activity is to be analysed. Leavitt, (1978) considers three levels of analysis, individuals, groups and organisations as a whole. Pfeffer (1982), Van de Venn and Astley (1981) distinguish between the micro level of individuals and substructures within organisations and the macro level at which organisations as units and populations and networks are examined.

Huse (1980), points out organisational transformation and organisation development (OT and OD, respectively) not only use several different intervention strategies but also intervene at different of the many organisational levels conceivable and consequently must be analysed at those levels. Conceived from an organisational behaviour perspective, he outlines four levels varying by depth of intervention.

1. The shallow level is related to factors that are external to individuals, for example techno-structural issues such as:

- Changes in organisational technology

- Changes in organisational structure

- Changes in quality of work life (improving both productivity and employee well-being)

- Work design.

2. The Deep Level involves individuals in analysing their own behaviour and deals with matters such as:

- Job design

- Role analysis

- Management by objectives.

3. The deeper level helps individuals to discover their own hidden attributes, such as personality, values and attitudes, which are not easily uncovered without deep exploration; covers matters such as:

- Process consultation

- Team building

- Role negotiation

- Inter-group conflict resolution.

4. The Deepest Level deals with fundamental aspects of individual personality and includes:

- Life and career planning

- Sensitivity training

- Personal consultation and /or counselling.

 

Understanding the level of interaction and matching this level with the nature of change he postulates help change managers to bring about change more successfully. For example, if an organisation needs to change attitudes to implement a new customer care programme, it might need to use both deep and deeper level interventions because such a programme would involve changes in job design and also a deeper analysis of individual attitudes in order to ensure that employees can do what is asked of them.

 

 Pfeffer (1982) emphasise that the unit and level of analysis is critical consideration when deciding on data collection source since an inappropriate choice given the theoretical propositions being examined could lead to wrong conclusions. He proposes that the unit of analysis should correspond to the level of the theoretical mechanisms that are presumed to be affecting the dependent variables. Within the context of the present research the unit of analysis is a core issue of consideration, since the assertion has oft been made that global measures of organisations offer little in terms of remedial measures that could be applied in organisational processes. From a quintessentially applied perspective, there seems little merit in holistic organisational analysis. On the offset is the pragmatic theoretical requisite for clearly defining measures at levels that encompass the organisation as a unit of analysis to facilitate a clear scope for appreciating organisational change.

 

To enable meaningful data collection and analysis, recourse will be made to a tripartite breakdown in data sources within the organisation. Based on Likert (1961), who states that to understand the fundamental nature of a system, the way in which its component parts function and the adaptive responses it makes to its environment, the component parts and their interaction needs to be clearly mapped out in the constantly changing situation in which the organisation exists. Likert refers to two kinds of information available in the organisation. These are information on the nature of the system and information on the state of the system. By nature of the system, reference is being made to data that enables the construction of the basic conceptual model of the organisation. This model in turn enables what measurements to obtain for diagnosing the state of the system and how to interpret the data so obtained. By information on the state of the system, reference is being made to data, which reveal the current situation of the organisation; such as the behaviour of its leaders, the motivations of its members, its communication and decision-making processes, and its productivity and earnings.

Both of these data sources are of paramount value in enabling a clear interpretative analytical perspective as well as relevant data that allows interpretation of the change process and its overall effectiveness on the organisation's outcome. In effect the individual and sub-systems responses to the change process are of relevance in formulating an organisational picture; thus implying that the organisation's human component reflections on the change process is critical.

To facilitate easy data collection, based on earlier work by Likert (1961), data collection is at three separable phases. These are the Causal, Intermediary and Outcome phases. Within the conceptualisation of the present research, the causal phase is the cause/trigger of change, which is held to be the basis for the Intermediary phase where intervention measures which in this case is when organisational change has been instituted; the outcome phase yields data on the overall outcome of organisational change measures. Here, data is collected at individual levels within sub-components of the organisation; these data reflect individual attitudes on the change process using focused interviews. Espenjo (1987) points out, "The complexity of organisational problems does not rest exclusively in the very quantity of elements and links, in the openness of the organisation and its contacts with the environment, or in organisational parts. The complexity ensues from a variety and interactions of viewpoints by means of which participants consider the organisation's problems." It is this complexity that the interview attempted to access with a view to ascertain an equanimity indicative of the change process and its effectual outcome from organisation members' perspective.

Quantitative raw measures such as output measures and capacity utilisation are also assessed, as well as independent outsiders view of the organisations performance as indicated by stock exchange indicators of the organisations viability, where available. This being complemented by interview information as likely explanatory reasons to account for this outcome outputs.

Another important outcome data sources are customers’ responses to  an organisation's products and/or services.

 

As already variously discussed in the literature review, change is a phenomenon in process, attempting a one shot, entry cross sectional study has its implications for in-depth appreciation and interpretation of organisational change in any organisation.

 

Significant numbers of studies in the organisation theory perspective have used individuals as data sources to derive conclusions of relevance to the organisation as a unit. These analyses consider such individual observations as independent or group related reflections on the organisational outcome.

In the present study, though data is collected from individuals in organisations, the focus is on the normative context of variables that are all inclusive instead of focusing on individual concerns as ends, such variables as technology, management styles, structural modifications and the attitudinal responses of workers and management is the data of concern. External influences like the economy; competitors and government legislation that affect individual reaction to work are important variables whose influence on the change process and its outcome are evaluated.

  

4-5 Constructs of the Present Study

 

It has been indicated that case studies, yield conclusions that can only be as good as the care and planning going into the initial design of the study.

In this study, the interview, using the focused interview format is the prime information-gathering tool.

Certain researchers in the field have pointed to the fact that most organisational research has not been directed at the process of development overtime, rather it has been cross-sectional have expressed concern. Freeman and Hannan (1975) discuss certain tenacious problems related to the issue of drawing inferences for longitudinal relationships from data secured only at one point in time. This is an issue that rises within the context of the present research since, organisational change and adaptation are both longitudinal phenomenon. The periodic element of the change process could only be ascertained by way of interviewee appreciation of the change situation and documentary evidence accessible to the researcher.

 

4-5.1 Dependent Measures

 

(i) Capacity Utilisation of installed technology/production machinery.

(ii) Total output of manufactured products.

(iii) Total sales over specified time intervals.

(iv) Profits over specified time intervals.

(v) Worker's satisfaction and perceived organisation effectiveness measures.

 

4-5.2 Dependent Variables

 

The main dependent variable is the success of change. Measuring outcomes assesses this, and the extent of attained expectancies as indicated by expressed attitude of the extent to which expectancies have been meet expressed primarily by the organisations internal constituents and knowledgeable outsiders who perceive and  interpret organisational performance as due to successful outcomes of change. Internal constituent views regarding the sustainable improvement due to change is variously solicited, based on the nature of interaction between management and other organisational human components and groupings, as well as the technological mediated impacts of change at the human-machinery interface. The dependent variable measures thus selected, is by a critical screening process short of content analysis of previous research findings on organisational change as well as detailed elicitation of what each organisation expressively considers as relevant to its unique circumstances.

 

4-5.3 Independent Variables

 

This is indicated as the nature of the change process instituted within a particular organisation. Within organisation's focus of the nature of change is based on observation of major changes in the organisation's core components viz. infrastructure, technology, human resources, organisation's structure; assayed over critical time duration.

 

4-5.4 Control Variables

To ensure a semblance of equanimity in data sources, control measures such as organisation size; indicated as amount invested, number of employees and geographical location of organisations are held as 'constant' as possible. What this means is that, the size of organisation are all within the local specification of medium sized manufacturing industries and service sector organisations are all former State Owned Enterprises (SOEs).

 

The duration of the major change process of concern is equally important, since studies indicate a period of institutionalisation of change, an organisational process of change that is of paramount importance as far as measuring and/or considering the consequences of the implementation of any of change process are concerned. For the present study the initially stated presumption that the change should have been initiated not less than three years, preferably around five years prior to data collection for the present study, proved impractical during actual data collection. Mainly because the adaptive change process in most organisations in environments requiring effective response to enable organisational sustainability is an on going process that cannot be exactly calibrated in some instances.

The potential of social desirability bias is reduced by the use of multiple informants within and in separate functional units (or sub systems) of each organisation, the varying viewpoints on issues arising out of change and the insistent requirement made of subjects for independent response to enquiries, it is expected, minimised this bias.

 

4-6 Selection of Cases

A nonprobabilistic sampling method was favoured as generalization to a wider organisational population beyond those sampled and studied in a statistical sense was not one of the objectives of this research. For this reason, "probabilistic sampling is not necessary or even justifiable in qualitative research" (Merriam, , p. 61). Recommended however, is purposeful sampling, that is, selecting a sample from which the maximum can be learned. According to Yin, sample selection should be dictated by replication logic instead of a statistical one. More precisely, each site (or case) should be considered as an experiment in itself, subsequent sites being used either to confirm or refute previous findings. Sites should therefore be selected if they are expected to yield similar results (literal replication) or on the contrary, completely opposite results (theoretical replication). Eisenhardt writes that "cases may be chosen to replicate previous cases or extend emergent theory, or they may be chosen to fill theoretical categories and provide examples of polar types." ( p. 537).

Audet & D’Amboise (2001) note that the sample size in a multiple-site study cannot be large. Any sample exceeding ten cases would indeed make it virtually impossible for the researcher to analyse adequately the staggering amount of data to be collected. This is even more so in this particular project where the context dictated the use of only one investigator. Eisenhardt recommends a sample size of four to ten organizations (or sites). This advice was taken into consideration to limit the number of organisations involved in the present study.

 

Manufacturing industries that are in the process of some form of organisational change were selected as case/s to be studied. The research literature indicates the necessary requirement of a reasonable time period after change implementation, usually of more than three years, within which it is expected that change processes have become stabilised. This requirement guided organisations selected for the present study. The cases included are manufacturing industries in Ghana. The manufacturing industrial sector is selected because technology is often heavy and capital intensive. Overall changes of an organisation wide dimension are not frequent and when they do occur, relatively, provide a predictable environment within which the consequences of change can be studied. Additionally, most manufacturing organisations have been in existence long enough for pre and post change comparisons to be made. Also the nature and distribution of knowledge workers in manufacturing is much more distinctly distributed and categorised than in the service sector or rapidly evolving organisations like computer technology and software design.

 

In addition, cases were drawn from the services sector where government divestiture, instituted macro economic efficiency plans has led to significant restructuring of government owned organisations, in some cases, and outright disposal of some state owned organisations to the private sector. These activities have been marked by wide scale organisational change and offer a basis for interesting research on change and adaptive coping responses in these service sector organisations.

 

4-7 Working Hypotheses

The notion of a hypothesis is more related to statistical research than case studies, however, working hypothesis as detailed below in addition to the research questions enable research focus, especially considering the diversity of information and likely divergences that fluid information accessing in a widely studied area like organisational change and adaptation is palpably capable of generating.

1. Changes in environmental factors will determine the positive outcome of the change process.

2. Change is likely to be associated with the introduction of new technology or equipment organisation wide.

3. Where change has stabilised management and workers will not differ significantly in their response to the intervening change process.

4. Change in organisational sub-components (human processes, technology, products offered, infrastructure) will have positive effects on outcome measures.

5. Turbulence in an organisations environment will increase the attention the organisation pays to that environment.

 

The relevance of the study is briefly stated.

 

4-8 Relevance of the Study

Developing countries, for the most part are undergoing changes along various fronts, within the academic scope of organisational research with a mainly psychology orientation and methodology, the field can boast of only a few studies that seek to validate and build theoretical models from the unique perspective of the turbulent environments within which organisations exist in the developing countries. The present research attempts to fill that vacuum to a limited extent as well as providing a platform for ascertaining the durability and applicability of existing theories, evolved from a developed country perspective.

 

4-9 The Interview Information Sources; Determinants Of Persons To Be Interviewed And Other Sources Of Information.

Researchers in the field constantly recommend the need for the application of reliable and valid, well-accepted instruments for gathering data. The issue of variable representativeness as asserted elsewhere has been carefully considered as critical to the results of the present study. (The data collection format of focused interviews is further elaborated as an appendix). However, as Yin (1980) piquantly notes, the interview may take several forms. Most commonly, case study interviews are of an open-ended nature, in which one can ask the key respondents for the facts of a matter as well as for the respondents' opinions about events. In some situations, one may ask the respondent to propose his or her own insights into certain occurrences and may use such propositions as the basis of further inquiry. The more that a respondent assists in this later manner, the more that the role may be considered one of an "informant" rather than a respondent. Key informants are often critical to the success of a case study. Such persons not only provide the case study investigator with insights into a matter but also can suggest sources of corroboratory evidence-initiate the access to such sources. A second type of interview is a focused interview (Merton et. al., 1990), in which a respondent is interviewed for a short period of time, e.g. an hour. In such cases, the interviews may still remain open ended and assume a conversational manner, but one is more likely to be following a certain set of questions derived from the case study protocol. For example a major purpose of such interviews might be simply to corroborate certain facts that presumably have been established (but not to ask about other topics of a broader, open-ended nature). In this situation the specific questions must be carefully worded, so that the interviewer appear genuinely naive about the topic and allow the respondent to provide a fresh commentary about it, in contrast, if leading questions are asked, the corroboratory purpose of the interview will not have been served. Even so, there is a need to exercise caution when interviewees appear to be echoing the same thoughts corroborating each other in conspiratorial way. Further probing is needed.

 

Overall, interviews are an essential source of case study evidence because most case studies are about human affairs. These human affairs should be reported and interpreted through the eyes of specific interviewees, and well-informed respondents can provide important insights into a situation. They also can provide shortcuts to the prior history of the situation, helping the researcher to identify other relevant sources of evidence. However the interviews should be considered verbal reports only. As such they are subject to the common problems of bias, poor recall, and poor or inaccurate articulation. Again, a reasonable approach is to corroborate interview data with information from other sources.

 

The interview is designed to access specifically and as detailed as possible information on the nature of change implemented, the internal reorganisation of major sub-components of the organisation and its consequences on organisational effectiveness and the organisations short term and long term prospects. Responses from the organisations human constituents in response, reaction to, and/or resistance against these internal restructuring and the overall consequence for the organisation as a whole. The external instigators and determinants of organisational change are also ascertained. Also, the manner of the formulation of work teams and workers involvement in aspects of task organisation directly related to their work is also ascertained.

 

To obtain interview data, top management and strategic occupants of management positions and senior technical supervisors are interviewed. Department heads provide basic information on their departments and work groups within them, but they seem reluctant to report candidly on actual processes and behaviour that may reflect negatively upon their performance as managers. In such cases, interviews were needed with additional department members. Assistants to high-level managers have very comprehensive view of their organisation and are comfortable in describing it than the top managers themselves. Such well-placed individuals provided useful information about sensitive subjects. By conducting detailed interviews with members from different backgrounds and locations within each organisation and sub-systems of an organisation, and by carefully compounding their accounts of important issues, it is possible to develop the distinctive perspectives and viewpoints on each organisation as evidenced below.

 

Production managers by their unique positions represent a strategic resource base for obtaining interview information concerning the details of organisational change. Production in the manufacturing organisation is not just an indispensable function, with most of the typical company's manpower and resources under its control, production is also a central function, which is involved in the whole chain of manufacturing, from design to sales, and locked in dependency relations with numerous other functions. The interview data from production managers provide a view of the organisation's central operations response to change and its effect and offer insight into the nature of contingent functions. Production is also a strategic site for gauging the quality of teamwork, the reaction to the formation of work teams, the direct action of workers on production processes and machinery as an approval or resistance to organisation change, in terms of increased productivity and decrease in defect rates or otherwise. Production is also the function in which blue-collar workers whose attitude to change is crucial to the outcome of the planned change process are concentrated and contains as well the most critical worker-management interface.

 

Personnel/ Human Resources Managers were also interviewed as information source. Personnel managers because they are not directly involved in production actually have a peculiar overview of the organisation, since they at once seem to be at a distance and intimately involved in the daily happenstances of their organisation through daily contacts with workers. They are also at organisation boundaries recruiting and accounting for its human resources; they are thus predisposed to be sensitive to the moods and nuances of the organisation's workforce. Additionally, personnel managers provide relevant information on quality of personnel employed in changing organisations, training programmes and the mobility of labour in their organisations.

 

Knowledgeable supervisors, as information source, constitute a critical interface straddling the invisible but ever persistent boundary between management and workers. As March and Simon (1959) indicate, one of the primary exchange relationships underlying organisations is the hierarchical exchange that occurs between super-ordinates and subordinates. Viewing organisations as hierarchical systems, organisation theorists have generally accepted the qualitative distinctions between the technical level, that is, the level that directly processes the materials used by the organisation; the managerial level, that is, that level that controls and serves the technical levels of operation, and the institutional level, that is, that level that links the organisation to its broader environment (Parsons, 1960; Thompson, 1967; Hannan and Freeman, 1989). Knowledgeable supervisors, thus by the intermediary role interacting and relaying information between shop/floor level workers and mid level as well as senior management constitute an important interview information source. In some cases, supervisors are an important reference point and role determinants in the anomalous evolving organisation culture of an organisation in the process of a major change.

 

As has been noted by organisational researchers, interview studies are often subject to bias because respondents seek to present themselves in a favourable light or withhold information, such as negative descriptions of organisational states that they fear may ultimately be used against them. The interviewer it is suggested can help overcome these concerns by gradually building relationships of trust with organisational members. Sometimes, during the course of interviewing for this research it was possible to develop such relationships with individuals who are highly knowledgeable about organisational affairs but somewhat detached from them, and are therefore willing to provide a great deal of valuable information. Of course, while caution was not abandoned so as to become overly dependent on any informant to avoid any inter personal influence that the informant may have over the researcher. (The information garnered for this research could not have been accumulated otherwise). Recourse of course, was made to contradictory evidence where available and to other sources of evidence as corroboratory information to enable the presentation of a balanced organisational depiction.

 

Interview information is also collected and collated at the institutional level from strategically placed persons with adequate information and knowledge (overhead sources) about the industrial and services sector. For instance, the office of the Association of Ghana Industries; The State Enterprises Commission, The Private Enterprise Foundation, the Ghana Stock Exchange and the Divestiture Implementation Committee, all of whom posses adequate overviews on the industrial environment in Ghana as well as having crucial policy decision making roles that determine the outcomes of manufacturing and services organisations in Ghana.

 

The interview constitutes an essential aspect of the present study since as Raphael (1944) rightly suggests, "it is not until employees are directly asked for their suggestions or complaints that the wealth of potential information and neglected experience lying hidden in every industrial organisation is disclosed."

 

The next section details the actual conduct and the considerations effected for effective conduct of the focused interviews.

 

4-10 The Logic of Construct and Conduct of the Focused Interview

According to Boree C. (2001), “One of the most popular interview techniques today is the group interview, better known as the focus group.  The idea is very simple:  Instead of interviewing one person at a time, get a group of people of one sort or another, and discuss some topic of interest. But if the researcher is well trained and open-minded, focus groups are a good research tool.  They are especially appropriate for beginning an investigation, for example, into how a company runs or into the dynamics of a social club.  They are often used in consultation work. People are not rocks.  Our lives are infinitely varied and in constant motion.  No person is quite like any other person.  No moment is quite like any other moment.  We are more like whirlwinds.   If we perceive the goal of the human sciences to be the prediction and control of human lives, and the scientific method the means of accomplishing that goal, we are ignoring our natures.  We are trying to pin down the whirlwinds when without movement whirlwinds cease to exist… It is hard to be insubstantial; it is easier to be a rock.  Perhaps the persistence of traditional methods reflects our discomfort at being whirlwinds.  But life is more complex than any theory  -- much more.  I suggest we start dealing with that complexity directly, by opening our eyes and our ear.”

 

 

However varied the specific purposes of the focused interviews, they have in common the general purpose of trying to discover the meanings of a designated situation for those who have been exposed to it.

 

The organisational theory perspective tends to focus on organisational analysis from the holistic perspective of the organisation as an entity. The process of organisation change impacts significantly on the individual human components that are constituents of the organisation. To enable elicitation of in-depth data on the individual experience and affective reaction to the change process, the focused interview has been adapted for application in the present study. The present essay adapts the format of Merton, Fiske and Kendall (1990) and reconciles it for use in collecting data, in both the individual and group setting, in organisational settings, to generate response to organisational change processes. The interview may generate interesting information, taking a varied and unexplored slant on the organisational change process, thus enabling the positing of new hypotheses for further studies.

 

 

 

 

Figure 10. A tri-diagrammatic representation of the research purpose in employing the focused interview.

 

The basic reason for employing the focused interview is to attempt to capture the authentic human voice as regards the change process and how it has impacted on the individual. The emergent individual's view of the organisation as a consequence of the change process.

 

The need for prior analysis

There are certain unique features that characterise the focused interview:-

First, of all, the persons interviewed are known to have been involved in a particular situation...in an uncontrolled but observed social situation.

It is assumed that there is a substantial foreknowledge of the interview situation from a prior diagnostic analysis to identify the hypothetically significant elements, patterns, processes and total structure of the situation. Through this prior content or situational analysis, one can arrive at  a set of hypotheses concerning the consequences of determinate aspects of the situation for those involved in it. (It is obvious here, that the focussed interview is not to be employed as the research instrument for the first assessment of the organisation to be made, but will follow after fundamental knowledge is obtained through other assessment media, enabling a fair knowledge of aspects of the situation worthy of further consideration.)

On the basis of this analysis, the researcher takes the third step of developing an interview guide, setting forth the major areas of inquiry and the hypotheses that provide criteria of relevance for the data to be obtained in the interview.

Fourth and finally, the interview is focussed on the subjective experience of persons exposed to the pre-analysed situation in an effort to ascertain their definitions of the situation.

The array of reported responses to the situation helps test hypotheses and to the extent that it includes unanticipated responses, potentially, gives rise to fresh hypotheses for more systematic and rigorous investigation.

 

The information that the focussed interview yields is distinctly an individual affective reaction to the change process, and by focusing on aspects of previously assessed organisational states, as it relates to individuals, and their uniquely personal response to such states, is likely to generate interesting, sublime and overlooked aspects of the organisational situation as it relates to the individual, and which may have far reaching or negligent organisational consequences and thus worthy of further scientific evaluation.

 

The next section outlines the interview guide that served to focus the interview sessions on the research theme of change in and on relevant aspects of the organisations.

 

4-11 The Data Collection Process

Interview Guide

According to Boree C. (2001). “Interviewing is the mainstay of many different kinds of qualitative method, from case studies to ethnography.” The present case study employing qualitative research methodology is no exception. An interview schedule is prepared to act as guide that keeps the interview within a certain framework of expectation, without necessarily depriving the interview situation of interviewer driven information-gathering process. Boree points out that in an (unstructured) interview, although interviewer may interact with the person  -- ask questions, ask for detail, for clarification, and so on  -- the interviewer should avoid, as much as possible, forcing the person in any direction, other than keeping their attention on the original topic.  In other words, “back off and let them express themselves”. That is what these list of interview items are intended to do, they are to prompt the interviewer in the truest tradition of the well conducted focused interview, striking a balance between the favoured characteristics of the unstructured interview and a purposeful pursuit on an area of specified interest.

Data is collected through semi-structured interviews at the organisations involved in the study. In each instance management enabled entry and provided information and the trade union and between two and four groups of workers enabled the conduct of one-on-one or group interviews. The process is further detailed in the case-by-case analysis. Interviews lasted from one to three hours. An interview guide was used to avoid losing focus and to ensure that all relevant questions were asked. Indeed, while some indicators required a brief and precise answer, it is also desirable to let information emerge from the field. Respondents were thus given the opportunity to express their thoughts on the topic of interest as freely as possible. Finally, a point was made to verify with the respondents the relevance of the questions. This was done in order to refine the operationalization of the variables observed in the field, should further studies be done on the same topic.

 

Interview Schedule

(This interview schedule merely serves as a guide rather than a rigidly pursued list for conduct of the interview!)

1. What is the name of this organisation?

2. What are its primary activities?

3. How long has the organisation been in existence? / When was the organisation established?

4. How many employees do you have?

5. How is the organisation structured? (Request for organisational chart)

6. Are employees highly controlled?

7. In supervising your workers do you engage in visible supervision and high control?

8. How would you describe the effects of the structure on organisational activities and their outcomes?

9. In recent times has your organisation engaged in organisational change; what were the driving forces for these changes?

10. Can you detail the particular nature of the changes you have undertaking?

11. How long has the change been going on?

12. What is the expected goal of the change effort?

13. What has been done in reference to change activities in terms of: -

i.) Technology

ii.) Management practices

iii.) Work groups and Task allocations

14. What has been the impact of the changes on employees?

15. Have you made use of external consultants?

16. How would you assess the relevancy of the use of external consultants in implementing the changes your unit is engaged in?

17. Do you think the expected goals will be fully realised?

 

18. Have you had incidences of resistance from employees in reaction to some aspects of the management process of the organisation (that occasioned the change effort)?

19. How do you determine the effectiveness of your operations, what criteria do you use: - i.) Administratively. ii.) Production, iii.) Customer service, iv.) Customer satisfaction.

- How does your organisation compare with competitors?

20. What would you say has been the overall effect on your organisation of: i.) The local/national economy, which aspects are of relevance to your success? And which aspects have been problematic to your operations and how have you adapted to this sources of problems?

- What about: -

ii.) The activities of your competitors

iii.) The International Market and Influences

21. What would say has been your operating strategy?

22. Who constitutes decision-making authority; how are decisions communicated, implemented and assessed for efficiency and effectiveness?

23. How do you determine what new technology to adopt; what has been the most recent technological adaptation the organisation has made?

24. How do managers relate to employees in general?

25. In your opinion is there a significant communication gap between managers and lower level employees?

26. Do you organise workers as team of dependent interacting sets of groupings or is task allotted to individuals for execution?

27. Do you have any training and skill updating schemes for employees, who are covered and what are the consequences of these activity on the organisations:

i.) Operational efficiency

ii.) Profitability

iii.) Employee perspectives

28. What are the goals of employee training and are these goals being fully realised?

29. What aspects of your (managing) activities have you found most challenging and what tactics are you adopting or have adopted to cope with this challenges?

30. Are employees in any way (please specify!) involved any aspect of organisational decision-making?

31. Would you say that employees have all the relevant information to make adequate decisions?

32. Has the organisation adequate resources to successfully complete the changes it has embarked upon?

33. Do you as an individual embrace positively the changes in your department/unit and why?

34. What is your opinion with regards to the quality of: -

i.) Working conditions

ii.) Intensity of Task Demands and employee preparedness

iii.) Interrelations among different departments/ sections

iv.) Friction among personnel

 

35. How do you ascertain the performance level of your department?

- What criteria are employed?

- Why are these the preferred criteria for assessing performance?

- Are the results fedback to employees; how is feedback actually applied to improve or sustain work activity?

36. What does your organisation expect of you in your task performance?

37. What do you expect of your organisation?

38. In what areas would you expect improvements in organisational practices?

39. How would you rate the effectiveness of communication between higher and lower levels in the organisation? And among employee performing at the same unit location?

40. What are the most common complaints you receive with regards to your specific task?

- What are the most common complaints you receive with regards to:-

i. The organisation's internal practices

ii. External practices and relations with the external environment

(As much as possible these interview questions are related to the changes in the organisation being studied).

Overview Question that should be asked if the interviewer is not satisfied with the depth of materials generated from the above interaction process: -

1. What have been the driving forces for change in your organisation?

2. How has your organisation been responding to these forces of change?

3. How has the organisation’s response affected the way employees are organised and the management strategies the organisation has adopted?

4. How have employees appreciated management activities?

5. In what particular ways has the change processes affected management activities?

 

The next section looks at other data sources resourced.

 

4-12 Other Sources of Data Accessed

 

Yin (1994) indicates that there are six data sources from which information can be garnered for a case study. These are interviews, documentary sources, archival records, participant observation, physical artefacts and direct observation. Of these six, extensive use is made of interviews, documentary sources such as information obtained from organisations, direct observations and occasional reference to archival materials, for the present study. Each of these data sources has their strengths and weaknesses. Since no single source of data has a complete advantage over all the others and given that the data sources are highly complementary, and the recommendation by researchers that a good case study may want to use as many sources as possible. (Harrison (1987) also recommends that a combination of data gathering techniques be used). The various data sources that were accessed for the present study were combined as complementary or corroboratory information for presenting each case.

 

Each data collection source has noted weaknesses as well as strength. (While these are methodological concerns, their being detailed here is an indictment of the importance of full awareness in actual data collection). The interview is generally favoured because it focuses directly on the case study topic. It is insightful, providing a perceived causal inference. On the other hand its weaknesses are the possibility of bias due to poorly constructed questions. A likely response bias, inaccuracies in information ventured due to poor recall, as well as reflexivity-where the interviewee gives what the interviewer wants to hear. Documentation as an evidence source is favoured because, the information therein derived is stable, and it can be retrieved repeatedly. It is unobtrusive, not created as a result of the case study. Exact, in that it contains exact names, references, and details of an event. It also encompasses broad coverage, covering an extensive period of time, many events, and many settings. On the other hand it has its foibles. Retrieve-ability can be low.  There could also be a problem of biased selectivity, if data collection is incomplete. Further there is a potential reporting bias, which reflects the unknown bias of the author. Also access to such documentary sources could be deliberately blocked. Documentary information has relevance in most studies. It takes many forms and should; it is suggested be the object of explicit data collection plans. Some instances of varieties of documents worth considering are, letters, memoranda, and other communiqués. Agendas, announcements, minutes of meetings, and other written reports of events. Administrative documents such as proposals, process reports, progress reports and other internal documents. Harrison (1987) suggests that, Organisation publications and records may also provide information on processes, structures, technologies and purposes, but this information could be hard to code and quantify. These documentary data almost always need to be supplemented with information on actual practices, as opposed to managerial descriptions, formal studies or evaluation of the same "site" under study. Newspaper clippings and other articles appearing in the mass media are another documentary source of information. While these documentary materials are not per se literal representations of events, they have been accessed and cited as important corroboratory information. Documents play an explicitly important role in data collection effort and it is recommended by Yin (1994) that deliberate effort should be made to gain access to and examine the files of any organisation being studied, including a review of documents that may have been put into cold storage. Another source of evidence are archival records. In addition to being fairly similar in strengths to documents, it is usually precise and quantitative. Some archival records are also qualitative in nature. For many case studies, archival records-often in computerized form-also may be relevant. These are as follows: Service records, such as those showing the number of clients served over a given period of time. Organisational records, such as organisational charts and budget over a period of time. Harrison (1987) also indicates that most organisations also have records of group outputs like sales, productivity and production quality (e.g. percentage of products serviced under warranty). Maps and charts of the geographic characteristics of a place. Lists of names and other relevant commodities. Survey data, such as census records or data previously collected about a "site". Personal records, such as dairies, calendars, and telephone listings. These and other archival records can be used in conjunction with other sources of information in producing a case study. However unlike documentary evidence, the usefulness of these archival records will vary from case study to case study. For some studies the records can be so important that they can become the object of extensive retrieval and analysis. In other studies, they may be of only passing relevance. Its accessibility could be blocked due to privacy reasons-When archival records are to constitute part of the relevant information collected, an investigator must be careful to ascertain the conditions under which it was produced as well as its accuracy. Sometimes, the archival records can be highly quantitative, but numbers alone should not automatically be considered a sign of accuracy. Direct observations enables a reality check of events in real time as well as having a contextual capability that enables the covering of the context of events. Less formally direct observation (rudimentary observations) might be made throughout a field visit, including those occasions during which other evidence, such as that from interviews is being collected. For instance, the condition of buildings or workspaces will indicate something about the climate or impoverishment of an organisation; similarly, the location or the furnishings of a respondent's office may be one indicator of the status of the respondent within an organisation. Observational evidence is often useful in providing additional information about the topic being studied. If a case study is about, for instance, a new technology, observations of the technology at work is invaluable aids to any further understanding of the limits or problems with the technology.

Its weaknesses are that it is time-consuming, selectivity, reflexivity (where event may proceed differently because it is being observed), also is the issue of costs in terms of hours needed by human observers. This technique will not find detailed reflection in the present study. Physical artefacts enable insight into cultural features, as well as insight into technical operations. Its weak points however are selectivity and availability. 

 

The benefits from these six sources of evidence, it is admonished, can be maximised if the following three principles are adhered to. These principles, relevant to all six sources, when applied meticulously, are of critical value in establishing the construct validity and reliability of the case study. This being the case these principles guided the conduct of the study. The three are as follows: -

 

Principle 1: Use of Multiple Sources of Evidence

Case studies need not be limited to a single source of evidence: In fact, most of the better case studies rely on a wide variety of sources. A major strength of the case study data collection is the opportunity to use many different data sources of evidence. The use of multiple sources of evidence in case studies enables the researcher to address a broader range of historical, attitudinal, and behavioural issues. However, the most important advantage presented by using multiple sources of evidence is the development of converging lines of inquiry, a process of triangulation. Thus any finding or conclusion of a case study is likely to be much more convincing and accurate if it is based on several different sources of information, following a corroboratory mode.

 

Patton (1987) discusses four types of triangulation in doing evaluations-

That is the triangulation

1. Of data sources (data triangulation),

2. Among different evaluators (investigator triangulation),

3. Of perspectives on the same data set (theory triangulation), and

4. Of methods (methodological triangulation)

 

Data triangulation features strongly in the present study, encouraging the researcher to collect information from multiple sources but aimed at corroborating the same fact or phenomenon.

With triangulation, the potential problems of construct validity also can be addressed, because the multiple sources of evidence essentially provide multiple measures of the same phenomenon.

 

PRINCIPLE 2: CREATE A CASE STUDY DATABASE

 A second principle has to do with the way of organising and documenting the data collected for case studies. Here, the case study strategy has much to learn from the practices used with other strategies, in which documentation generally consists of two separate collections:

1. The data or evidentiary base and

2. The report of the investigator, whether in article, report, or book form? The main point here is that every case study project should strive to develop a formal, presentable database, so that, in principle other researchers can review the evidence directly and not be limited to the written reports. In this manner a case study database markedly increases the reliability of the entire case study.

Since accuracy and reliability are cornerstones of the social scientific enterprise, the building of a database is a necessary aspect of the present study.

 

                                                                                       Chapter 5

 

5-1 Methodological (Booster) Framework for Analysis and Discussion of Thesis Results

Denzin and Lincoln (1994) point out that over the past two decades, a quiet methodological revolution has been taking place in the social sciences. A blurring of the disciplinary boundaries has occurred. The social sciences and humanities have drawn closer together in a mutual focus on an interpretative, qualitative approach to research and theory.

Qualitative research approaches have traditionally been favoured when the main research objective is to improve our understanding of a phenomenon, especially when this phenomenon is complex and deeply embedded in its context. Its many methodologies and techniques have helped researchers get a better grasp of a variety of management situations. Qualitative research has now grown into a wide domain, having evolved much beyond its original scope of qualitative data collection. However, a consensus has yet to be reached to determine the exact qualitative research boundaries and the main components of a qualitative research design There exist few roadmaps with detailed instructions to guide the researcher through this methodological maze. For some researchers, such ambiguity can constitute a source of anxiety. However, some others will view it as an opportunity for innovation, that is, an opportunity to "break the mould" and conceive a research strategy that will meet the researcher's specific needs and objectives. Understanding a phenomenon that has barely been researched requires a qualitative approach that is both adaptive and innovative.

 

Qualitative research is research that focuses on understanding, rather than predicting or controlling, phenomena.  It is usually contrasted with traditional experimental and statistical research and is felt by many to be more appropriate to the study of human life

Perhaps the most outstanding characteristic of fieldwork is the unstructured nature of it, especially at first!  "Unlike controlled studies, such as surveys and experiments, field studies avoid prejudgement of the nature of the problem and hence the use of rigid data-gathering devices and hypotheses based upon a-priori beliefs or hunches concerning the research setting and its participants" (Shaffir et al., 1980, p. 17).

 

The last few years had seen an explosion of interest in qualitative methods, particularly within organisational psychology. A number of commentators have proffered explanations for this phenomenon. Henwood and Nicholson (1995) suggest that, although the methodological repertoire of psychology has generally included qualitative methods, these have tended to be seen as appropriate for the pilot phase of a project or as an adjunct to other research designs. Yet as stand-alone techniques there are clear areas of contribution that are now being recognised. Henwood and Pidgeon (1995: 116) argue that there are two particular issues within psychology that enhanced use of 'qualitative paradigm', as they call it, can address. Firstly, they suggest that an overemphasis on theory testing, as is typically the case within traditional approaches to psychology, can produce a worrying under emphasis on the systematic generation of new theory. Such generation of new theory, traditionally 'grounded' in data, is a key principle of qualitative research. The use of qualitative methods can therefore counteract the perceived current imbalance between theory testing and theory generation.

 

Secondly, they suggest that qualitative approaches, with their emphasis on exploring the research participants' own situated experiences, offset the critique of much psychological research that the richness and significance of individual experience is neglected in favour overarching reductionism explanations.

 

The question of method begins with the design of the qualitative research project. This always begins with a socially situated researcher who moves from a research question to a paradigm or perspective, and then to the empirical world. So located the researcher then addresses the range of methods that can be employed in any study.

 

The present research adopts a case study approach, focusing on specified cases of organisations within the unique environment of a developing country economy, organisations' adaptation to environmental exigencies and changes made to nurture survival. Data is generated through collection of interview information, to observations of actual organisational states and conditions, to the use of artefacts, documents, and records, to personal experiences, with regards to the phenomena of research interest. While these phenomena of research interest are ostensibly outlined in an interview guide, the use of the focussed interview technique, implies among other things, that the interview situation generates issues of relevance that are explored in detail.

 

A post data activity of significant academic relevance is interpretation of the qualitative data so garnered, including criteria for judging the adequacy of qualitative materials, to interpretive processes, the written text, and qualitative evaluation.

 

For any researcher applying qualitative techniques to their research, in-depth appreciation of the anti-positivist debates and the consequences of scientific relevance in employing the qualitative approach is a basis for adequacy of the research so conducted. But that epistemological debate will not be further pursued here.

 

As Symon and Cassel (1998) in their field defining text on qualitative methods note, perhaps it is the difficulty of accessing accounts of data analysis that has led some authors to be concerned with the quality of research conclusions that have emerged from studies using qualitative techniques. Silverman (1993) outlines his 'discomfort' with a large proportion of the qualitative research to be found in leading academic journals. He lists a number of related tendencies that give rise to this concern, for example, 'the use of data extracts which support the researcher's argument, without any proof that contrary evidence has been reviewed' (1993: ix).

 

A key question here concerns the criteria against which the findings of qualitative research are evaluated. The traditional criteria on which research is evaluated stem from a positivist paradigm where tests of the reliability and validity of the data are seen as integral to the 'rigorous' conduct of research. Some qualitative researchers seek to apply these criteria to their own work using a variety of techniques, such as inter-rater reliability (King, 1994).

 

However, assessing the output from qualitative techniques on the criteria generated to assess quantitative techniques creates problems for other qualitative researchers. Again the role of epistemological and ontological assumptions is significant. From alternative perspectives such criteria are unobtainable and not necessarily desirable, as research outcomes are viewed as the result of the interaction between the respondent and the researcher. It is argued within these paradigms that analysis is an interpretive process, which precludes the very idea of a ‘scientific objectivity’ as implied, by reliability and validity.

 

However, most qualitative researchers do wish to justify their interpretations of their data in some way. Consequently, authors have generated lists of alternative criteria suited to assessing the 'rigour' of qualitative researcher. The best known of these are Guba and Lincoln's (1989) 'authenticity' criteria. These authenticity criteria are explicitly formulated to reflect the concerns of alternative paradigms:

 

1 resonance (the extent to which the research process reflects the underlying paradigm);

2 rhetoric (the strength of the presenting argument);

3 empowerment (the extent to which the findings enable readers to take action);

4 applicability (the extent to which readers can apply the findings to their own contexts).

 

Consequently, these could be considered appropriate criteria against which to assess the present research. However, the methodology has outlined other techniques of ensuring scientific relevance of the study. While the booster-methodology enables a more effective analysis of the research information than solely relying on the case study methodological approach, supportive and relevant techniques are complementarily applied to enable a more effective analysis than would otherwise have been obtained depending on only one methodological approach.

 

In qualitative research the distinction between data collection and data analysis may not be clear-cut. In practice, for example, as a series of interviews progresses, the researcher will often be creating, testing and modifying analytic categories as an iterative process, such data analysis may be considered 'an organic whole that begins in the data-gathering stage and does not end until the writing is complete' (Potter, 1996).

 

In reference to this, attention is paid to the admonishment of Symon and Cassel (1998) who state that despite this potential false dichotomy, there is a considered need to focus on the analysis process in some detail, given that researchers often find it difficult to access material that distinguish different types of data analysis, and, significantly, links them to their differing epistemological and ontological bases.

 

Without the tools for incisive and insightful data analysis and interpretation, the amount of data generated through the use of qualitative methods can seem overwhelming and the analysis process itself confused and confusing. Insightful analysis is really at the heart of successful qualitative investigations. As Wolcott (1990) suggests and is here reiterated: 'the real mystique of qualitative inquiry lies in the process of using data rather than in the process of gathering data'.

 

Analytic Induction is the preferred analytical tool and embedded methodological guide for the present thesis on organisational adaptation and change in unstable environments.

 

Johnson (1998) refers to analytic induction (AI) as involving the intensive examination of a strategically selected number of cases so as to empirically establish the causes of a specific phenomenon. Intrinsic to the approach is 'the "public" readjustment of definitions, concepts, and hypotheses' (Mannig, 1982: 283).  The term 'induction' refers to the processes by which observers reflect upon their experience of social phenomena and then attempt to formulate explanations that may be used to form an abstract rule, or guiding principle, which can be extrapolated to explain and predict new or similar experiences (Kolb et al., 1979). - It is to be noted that this epistemological assumption is reflected in the focused interview approach, the interviewing technique applied in gathering the data for this thesis. - Hence AI is a set of methodological procedures that attempt to systematically generate theory grounded in observation of the empirical world. Thus, it sharply contrasts with deductive procedures in which a conceptual and theoretical structure is constructed prior to observation and then is ostensibly tested through confrontation with the 'facts' of a cognitively accessible empirical world (see Wallace, 1971: 16 - 25). The eclectic review of organisational change literature does not provide a theoretical, fitting (or to be fit) framework, albeit it enables adequate definition of the field of research.

 

The justification for induction in the social sciences usually revolves around two related claims. Firstly, it is argued that in contrast to the speculative and a priori nature of deductively tested theory, explanations of social phenomena which are inductively grounded in systematic empirical research are more likely to fit the data because theory building and data collection are closely interlinked (Wiseman, 1978) and therefore are more plausible and accessible (Glaser and Strauss, 1967). Secondly, there is the argument that deduction's etic analyses, in which an a priori external frame of reference is imposed upon the behaviour of social phenomena in order to explain them, are inappropriate where the phenomena in question have subjective capabilities (Shotter, 1975; Giddens, 1976; Gill and Johnson, 1997). It follows that social science research must entail emic analyses where explanations of human action are generated inductively from an a posteriori understanding of the interpretations deployed (i.e. cultures) by the actors who are being studied. Here again it is to be noted that an academic research in organisational psychology is not engaged in tabula rasa, and thus inductive analysis is employed within bounded rational rather than as detritus extremis.

 

In organisational studies of the sort embarked upon, it is to be noted that, though there may be exigent similarities in previous research the developmental context of organisational environmental impact, favours grounded theory's inductive theorisation, but that procedure of generating analytical insight is not exhaustively pursued in this study.

 

Hammersley and Atkinson (1995) argue that ethnographic fieldwork shares these inductive commitments. However, ethnographers' explanations of observed behaviour often remain at the level of aposteriori 'thick description' (Geertz, 1973; Denzin, 1978) of actors' interpretive procedures which goes beyond the 'reporting of an act (thin description) but describes the intentions, motives, meanings, contexts, situations, and circumstances of action' (1978: 39). In this, theorisation is limited to providing a conceptual framework for understanding actors' cultures. While the theoretical aims of AI include such descriptive frameworks, AI avoids what Loftland (1970) has called 'analytic interruptus' by also trying to explain and predict through positing causal models.

 

AI enables theory development to occur through two processes: firstly the hypothesis itself may be modified (which has been done in this study), and/ or secondly the phenomenon of interest may be redefined. With either process the range of application of the hypothesis is limited to exclude, or extended to embrace, new observations. The result should be a causally homogenous category with no negative cases (Kidder, 1981). For Fielding and Fielding the result of this procedure is that 'statistical tests are actually unnecessary' (1986: 89). In this manner a grounded theory is intuitively generated out of data that are applicable to a number of cases and it constitutes a generalisation.

 

How cases are chosen depends upon what Glaser and Strauss call 'theoretical sampling' (1967: 184). In this, having developed a theory to explain observations of a particular case of the phenomenon, a researcher can decide on theoretical grounds to choose to examine new cases that will provide good contrasts and comparisons and thereby confront the emergent theory with the patterning of social events under different circumstances. 

 

This has been established through the literature review and the specification of categorical classifications of cases fitting the specifications established prior to data collection and the remodification made during actual fieldwork as specified in the discussions.

 

This approach to AI has been heavily criticised by Robinson (1951). In his critique of Znanniecki (1934) and Cressey (1950; 1953), Robinson (1951: 200) argues that in their version of AI the procedures used are inadequate because they result in the articulation of only 'the necessary, and not the sufficient conditions for the phenomenon to be explained'. This is because their approach fails to analyse situations in which the phenomenon does not occur. Thus Robinson argues that in employing AI in this form, where only cases where the phenomenon to be explained occurs: so as to identify sufficient conditions, there is an implied requirement that only cases where the conditions specified by the hypothesis pertain are worthy of selective consideration so as to elucidate whether or not the phenomenon occurs. It is to deal with this problem that Bloor (1976; 1978) develops a set of procedures for AI that allows for the differentiation of necessary and sufficient conditions.

 

Bloor develops an approach that categorises, in terms of similarity and difference, variations in the phenomenon to be explained so that cases in other categories could stand as a control group for those cases in the category being analysed. (Bloor, 1978: 547). Bloor’s approach may be seen to entail four basic steps and is summarised by Figure11.

Figure 11. Adaptation of Bloor's approach to analytic induction (Gill and Johnson, 1997: 123; adapted from Bloor, 1976; 1978).

 

Bloor's model is applied for refining analysis of the present sets of studies.

 

In effect the empirical focus of this research has been to ascertain the nature of adaptation and changes organisations have made and are in the process of realising in response to internal demands and unique environmental impositions. And tentatively to delineate the factors that categories that accrue to these activity sets through the generation afforded of grounded theory.

 

While, within the academic restrictions of organisation psychology there are different possible ways of pursuing these objectives, for the purposes of the present thesis a focused interview approach on a case study basis set within the scientifically relevant Analytic Induction (AI) of Bloor's approach to AI is adopted. The research is presently discussed, with each phase in data collection and analysis corresponding to those illustrated in figure11.

 

Phase 1: gaining access

 

Access to organisations was gained by making personal introduction through the presentation of letters of introduction from Linköpings University's Institute of Behavioural Studies. Through this formal approach made through senior management personnel, in all the organisations concerned, an appointment time was booked and in a few unusual cases interviewing began almost immediately. While all managers in all organisations were appreciative of research in organisations, not all were equally accommodating. It is the case that in all organisation's approached, management while preferring interviews to questionnaires, were short on time and chaffed on the cuffs where interviews exceeded 45 minutes. In addition some management staff were hesitant about discussing aspects of their organisational practices that they felt was what gave them an edge in a highly competitive environment. Some were also keen to ensure that the interviewer was actually engaged in purely research oriented issues, and raised 'blocks' to entry such as securing management board consent or the managing directors consent before granting or participating in interviews. However on the whole, upon discovering that interviews were not geared at investigating operational secrets but the discussion of mundane organisational activities, many were forthcoming and co-operative. Since the research is geared towards eliciting relevant knowledge, organisational members who expressed disinterest or other relevant excuses for non-participation were excused and not coerced to participate. In some organisations, reference was often made to a management source believed to have an effective organisational knowledge of the organisation, and these often proved to be effective entry points for the conduct of interview, since they not all provided in-depth organisational knowledge but provided links within the organisation who were equally willing to participate in the interview sessions. In two organisations entry was gained because persons in managerial positions were acquaintances of the researcher. They facilitated enlivening discussions of their organisational practices and enables access to other organisational participants. Clear-cut introduction of the aspect of organisational activities that were of the research's interest ensured that discussions stayed focused on a thematic interest area. One difficulty encountered with senior managers but not with junior managers and lower level employees in organisations was that discussions about organisational states assumed a more personal tone with higher-level managers than it did with lower level employees. Ostensibly because the outcomes of most organisations were directly or visible identified with high management decision-making and execution capability, while inability to attain high objectives at the lower levels was in this type of research not of immediate relevance. Effort was made to provide prior disclosure of areas on initial contact with the management personnel to whom the interviewer was directed upon visiting organisation premises to present introduction letter(s). This in a way helped to prepare ground for the consequent interview with organisational members; once any initial restraint was dispelled by the awareness that interview information hardly departed from an employee's  daily activities. This emphatically impressed awareness made interviews open and relaxed, yielding 'treasure troves' of mundane activity sets that defined formally conjured conceptualisations of organisational perceptions. This was of particular relevance to this research since it eschewed a 'protected withdrawal' to stocks of formal and rehearsed responses that could undermine unrestrained individual perceptions on ongoing organisational activities. This resulted in a stating of specified organisational activities in informal 'lingua' expression and the detailed delineation of the individual experience and appreciation of that organisational adaptation or change effort.

 

In all cases interviews were conducted in interviewees place of task performance. This enabled the interviewee to retain full confidence and control in talking about aspects of the organisation that directly concerned them. (Lyman and Scott, 1970).

 

There was not an enforced requirement to follow a particular course of discourse but on the whole the source of information defined areas of relevance that were then discussed with an aim to explain with clarity each area in terms of how it affects the (1) the individual in the organisation, (2) the organisation in achieving its desired end state. While in some instances it led to lengthy discussions of areas of organisational activities not reviewed or expected, it enabled an appreciation of the organisations involved in the study from a distinctly interviewee self-defined position. Initial activity of each interview situation was to enable the interviewee (or group, as the situation is) to assume a 'controlled centre stage' later gently guided by the interviewer to fully realise in-depth discussion of the full extant of the research area of interest. Douglas's 'principle of non-direction' (1983: 137) to encourage their self-disclosure and then subtly manipulate dialogue towards the main focus, was the basic interview strategy in this case.

 

Phase II: Defining the phenomenon and identifying variations

 

As the term implies, processes of Analytic Induction focus upon the analysis and interpretation of data. Except for induction, AI does not specify how data should be collected. In principle it can therefore be used to analyse data that derive from any method of collecting data that has been applied in an inductive fashion.

 

In the research reported here data were collected through focused interviews. This enabled interviewee rather than the interviewer to be the principal definer of relevance. Thus, interviewees had full ability to define organisational reality from their unique positions as daily participants in an aspect of the organisation's full set of activities. In addition allowing access to how individuals perceive organisational reality. Thus focused interviews were employed to generate and document interviewees account of their daily organisational realities with an emergent focus upon how they perceive how adaptive and change activities affect organisational states.

 

Some issues were in the course of an interviewee rephrased to enable utmost clarification if there were inadequate explanation or discussion in the first instance, ensuring that in the end a rounded and detailed discussion was generated.

 

By guiding the interview around pertinent issues through the use of various prompts and questions (refer to the bulk of these in 'interview questions and prompts') the interview sessions elicited and documented interviewee’s perspectives on aspects of organisational activity of research interest.

 

These processes necessitated some degree of skilful posing of intervening question as a follow up to some comment immediately, or how to phrase mutually intelligible prompts which allowed informants' elaboration upon a significant issue without inadvertently fixing the terms in which they spoke, or the perspective they articulated. Regular consort to the interview schedule acted as a guide during these phases of interviewing. Since the guiding schedule was formulated within a general system framework that effectively covered all the significant areas of change and instigators of change, a continual comparison to ascertain approximations or clear-cut departures was a relevant activity of this stage of data collection.

 

Where discussions fitted within the general systems framework they were so noted, for later analytic consideration and development, where they found representation but not priorily articulated research in existing organisational research it was duly noted.

 

In all 12 separate organisations were case studied, each involving several hours of formal interview interaction and other time spent on observing production operations. An initial taxonomy construction of 'observer identified' (Lofthand, 1971) categories and their conceptual properties while staying within the limits of the data (Glaser, 1978) were being framed within a general change model.

 

This entailed comparing informants' accounts within each grouping, viz. senior management, junior management, supervisors and lower level or shop floor workers so as to identify similarities and differences, and then aggregating this at the whole organisation level for each organisation studied, thereby constructing the uniformities underlying and defining the emergent categories.

 

Phase III: Case Features And Causal Analysis

In most cases, respondents allowed the tape recording of the interview. When such recording was not possible, the investigator managed to take notes while listening to the respondent. Notes were reviewed the same day or the day after the interview and the within-case analysis (see next section for description) was performed as soon as possible, while the information concerning the case was still fresh in the mind of the researcher. Even when the interviews were taped, the investigator tried to do the individual case analysis shortly after meeting with the respondents. The taped interviews were not re-transcribed since it would have been too time consuming and expensive. Instead, tapes were carefully listened to over and over again, notes being taken along, together with citations from the respondents. As a framework in which to place and categorize data already existed, the task was made much easier (as will be explained in the following section).

Eisenhardt recommends starting data analysis with an in-depth study of each individual site, this first step being called "within-case analysis". This entails sifting through all the data, discarding whatever was irrelevant and bringing together what seemed most important. The idea was to allow the most significant observations to emerge from all data gathered in the field, while reducing the volume of data. To facilitate the cross-case analyses that were to follow, all eight individual cases were written following the same format: a brief introduction describing the organization and its business environment; a detailed description of the change activities engaged in, attempts to correlate findings with theoretical references; then the rest of the information that cannot be fitted within a reviewed theoretical framework are detailed. This proved to be the easiest way to put order in the vast amount of data gathered during the interviews. The individual cases involving several interview groups were then analysed to present an overview for the whole organisation that encapsulated the main change activities. Lengthy primary data enabled an in-depth analyses, however since they involved for the most part repetitions, they could be culled to generate an emergent view of change and adaptation activities from an organisational perspective.

The second step of the analysis consists of a cross-case analysis for shared emergent patterns. Using an approached based on Eisenhardt as a reference, a unique technique was developed to structure this type of analysis. Activities could be grouped under broad headings that related to several organisations and the specific nature of its realisations for various organisations were then detailed. Various organisations were then categorised under a defined change and/or adaptation rubric and iteratively analytically compared and discussed. There was not, a search for patterns as an attempt to find categorical descriptive representation among the organisations on pertinent change activities. The extensive interview data were analysed by several means, including the search for key words to categorise information for each interviewee, the segmental decoding of each interview under prior specified categorisation schemes, till each interviewees comments could be representatively defined and a final composition for each organisation written. This should enable latter quantitative assessment should there be a need for it. However the explanation building process thus activated enabled a clear and precise discussion of the extensive data on a trite, straightforward, unambiguous format.

 

Quality of Research Design

As pointed out by Patton, "it need not be antithetical to the creative aspects of qualitative analysis to address issues of validity and reliability" (, p.1190). To enhance the quality of this research, several of the approaches recommended by Yin for case studies are applied.

 

Construct Validity

Data is collected from more than one member of each respondent firm, enabling greater confidence in the measures of the constructs. Information about the firms is also obtained from a variety of sources, such as from consultants, annual reports, business magazines, newspapers and organisational information sheets given out by the organisations, to mention a few. Enabling triangulation of sources and to a reasonable extent, methods triangulation (Patton, ).

Internal Validity

In generating explanatory discussion, a form of the pattern-matching analysis is engaged in while performing the cross-case analysis. Indeed, as a form of theoretical validation of the emerging framework (empirically based pattern) was referenced to the initial theoretical framework (predicted pattern).

External Validity

Iterative comparison and contrast of organisations that were either predicted to be similar (literal replication) or different (theoretical replication), depending on the sector and type of activity of the organisation is extensively carried out. This replication logic both strengthens and broadens analytical generalizations. As well as emphasising the frequency of occurrence of particular change activity across organisations.

Reliability

Reliability is improved by a well-designed case study protocol. Which included an outline in detail of guiding interview questions and conduct format. An extensive case study database is created as a result of the study materials collected as a consequence of the data gathering activities. In actual analysis of interview information, for each case, a within-case analysis enabled an accurate compilation of the interview information to present an organisational state for each case in reference to the research topic. Leading to a logical and precise presentation for single case analysis and cross case analysis.

 

The next section begins the individual case presentation of the analysed information from the researched organisations.

 

CHAPTER 6 

 

Presentation of the Individual Case Analysis

 

6.1 The Private Sector Manufacturing Organisations

 

Summary of Interviews Conducted At: -

 

1. The Ghana Rubber Company Ltd.

The Ghana Rubber Company produces ladies and men's classic beach slippers in a wide variety of sizes and colours. The company also produces slippers made from durable PVC. Rubber heels and soles are also produced for the footwear industries. It also manufactures car mats in a range of sizes. In addition it produces rubber sheets sold for cutting by other footwear sole and heel cutting set-ups.

 

The rubber products factory has been a family owned medium scale-manufacturing organisation in existence for 40 years. The organisation is hierarchically structured. The structure has a managing director at the helm of affairs, with a General Manager, a Sales Manager and the Production Manager at the level below the director. The Supervisors are below this level and above the workers.

 

The workers are individually allotted their tasks and are assessed individually on their task performance. Supervision is visibly done and highly controlled. In terms of changes in management styles, the managers all assented that in over 40 years of existence not much has changed in management style.

 

Workers have an open channel to their immediate superiors and with task related problems gain the immediate attention of their supervisors or the management office concerned. Ideas arising from the shop floor for changes in production or new ideas for consideration are encouraged and each input is carefully accessed for relevancy.

 

There is good communication between workers and management, the workers have an active union that is mainly involved in salary negotiations. The organisation favours unhindered communication across all levels of the organisation.

 

The organisation management has not received any major complaints indicative of mass worker dissatisfaction other than requests for salary increases but this is usually negotiated through the workers union. There have been no complaints from the organisation's external environments about its activities. The management however complains that there is pilfering and stealing of products at the shop floor, those caught are immediately dismissed, increasing the rate of labour turnover. Though the company has a policy of immediate dismissal after investigation of persons caught stealing, yet pilfering still goes on.

 

There have been no significant incidences occasioning the management labour interface; other than high labour turnover. High labour turnover has been adduced to two reasons. Management of Ghana Rubber prefers to hire casual labourers. Most of these workers would prefer permanent employment status and tend to change to other organisations that offer permanent employment. Secondly, the organisation has a policy for dismissing workers who steal products, apparently this policy does not seem to deter factory hands some of who are regularly dismissed for pilfering products. 

 

In terms of recent technological changes, the factory has just acquired a new production line for PBC footwear. Other than this new line, the organisation normally phases out its old machinery, replacing old machines with more current one as the need arises. The organisation spends an average of 250,000 U.S. Dollars per annum on its phasing out of machinery activities.

 

On the whole the organisation has not had need for resorting to external consultants or technical expertise other than in-house employees. The introduction of a new production line was occasioned by the employment of new workers and a new supervisor. As to their training the workers are trained on the job and there is no external training programme in place, since there is no need for it.

 

As a manufacturer the rubber products organisation's goals are full production lines and a ready market to absorb all the products produced. At the existent time the factory produces at 25% to 30% production capacity. The organisation presently runs only a single shift; and has been forced to lay-off its casual staff. One production line has been forced to shut down because of non-existent markets for the products from that line.

 

The managers indicated a number of problems mainly from the external environment as being at the source of all the problems that hamper optimum production capacity. The most basic has been linked to the national economy of Ghana, where the local currency is in a constant depreciation against the major foreign currencies. The rate of depreciation as far as this industry is concerned is so rapid that the organisation cannot increase the prices of its products to match the changing, increasing devaluation of the Cedi, which basically increases the production cost. The consequence of this has been that while in 1987 the ex-factory price of a beach slipper was 50 cents the present price is 32 cents against an ever-increasing price of inputs of production and local cost of operations. The organisation is thus forced into a position of barely just breaking even.

Secondly, the local market, in the open economy environment is flooded with a splurge of similar products, some smuggled in from neighbouring countries, others dumped by producers in the Far Eastern Countries. Competition does not come from local producers of similar products since there is only one organisation producing that product locally; the competition is from the importers of beach sandals who price their slippers lower than the production price per item of the Ghana Rubber Company Limited's products. Another type of competition is from the second hand shoes sellers who flood the local market with comparatively low priced footwear. An open economy policy enables unrestricted entry for second hand clothing. The organisation is of the view that the organisation is operating in a non-supportive environment.

 

The fluctuating local economy with its unstable local currency; high interest rates on short term loans of 45% to 52%; inadequate foreign currencies to facilitate the ease of purchase of the 50% of the production materials that must be acquired externally make effective operation difficult. While 50% of the company's raw materials are acquired locally on the open market, the remaining 50% is imported, since such raw materials as polystyrene, PVC, plastic etc, cannot be obtained locally. The implication is that the organisation is sensitive to foreign exchange rate fluctuations and the interest rate on short-term commercial bank loans, which are required to facilitate imports of raw materials.

 

Economic instability and currency fluctuations pressure the organisation to cope by resorting to short-term plans rather than long-term goals and planning. This has had effects on the company's bottom line profitability.

 

The administrative structure of the organisation is compact. Other than installation engineers that accompany new machinery, the company hardly makes use of external expertise to run any part of its operations whether administrative or production.

 

The organisation's management indicate that, presently, untapped production capacities exist to produce higher number of products than the market can presently absorb. Again reference was made to the ease of access that importers have into the local market. A required provision made under the Economic Recovery Programme of Ghana was to open its markets and facilitate an open economy without protection for local industries. The organisation has had plans to install a new product line but has been forced to withhold implementation because of legislative policies that fail to provide an effective supportive structure for local industries.

 

The management believe that higher custom duties must be imposed on similar imported products; or a degree of protection that will favour the organisation from eventual shutdown due to inability to compete against the cheaper imported products is in order. Already, even though the organisation produces products of equal quality to the imported ones, the low purchasing power of the average Ghanaian means that lower prices rather than quality, style or desire for locally manufactured goods become a major determinant of purchasing activities of the end consumer.

 

The organisation's management laments the dumping practices of some Chinese manufacturers who dump their produce on the local market below production costs. So severe is the competitive lowering of prices through the activities of importers that the organisation had to close down a whole production line to cut losses; the machinery lying unproductive for the past six years.

 

While the umbrella organisation for local manufacturers is sympathetic to the problems of the local industrial sector they have been incapable of influencing in a marked manner legislation that will create a beneficial environment for this organisation.

 

In terms of technological adaptation, the organisation has a stable phasing out of old machinery to be replaced by more current ones; but no major technological change that significantly departs from the introduction of new models of machinery employing prior existing production technology. Phasing-out, as applied to this organisation implies that the machinery replacing the older one may be more efficient but the basic technology remains virtually unchanged.

 

Apart from the local market the organisation has some regional export markets in Togo and Cote D'Ivoire

 

The organisation's management is of the opinion that some amount of protection will be of much help to enable equal grounds for competing with importers.

 

In effect changes occurring at the Ghana Rubber Products Ltd, are mainly within the area of technological change where a new line for producing PBC sandals has been installed as a planned change strategy in anticipation of exploring an identified niche opening in the local market. The organisation also has a cyclical adaptive change of anticipated and planned phasing out of old machinery and replacement with newer models. Apparently the new models have not resulted in significant change from prior worker-management activity as expressed from lower level workers perspective in the organisation. Workers are allotted tasks singly on the machines and are supervised closely. The management structure is hierarchical and has not seen significant changes in recent times. Response to a need for adaptive coping from environmental triggers of change has been severely circumscribed by the capacity of the organisation to make advantageous change. The organisation has coped with intrusive environmental change such as depreciation of the local currency by curtailing its productive capacity to minimise costs and cut losses. This type of response to environmental triggers of change is only of short-term relevance and organisationally non-sustainable and non-beneficial. It is very much the case that medium scale manufacturing organisations desire a type of business environment that the government or the economic circumstances has failed to sustain. Their ability to change their operational environment is severely restricted, as units such organisations as Ghana Rubber Ltd. can only influence policy making through the Industry Associations. As the General Manager observed –

While the Association of Ghana Industries sympathises with the manufacturing sector, it has not been effective or influential enough to force policy changes such as local industry protection, antidumping legislation or stable macro-economic environment to support manufacturing sector growth.

 

The common management - labour conflict resolution interface is through trade union representatives, while this ensures fair negotiations of employees conditions of employment, over dependence on trade union entrenches hierarchical structures and formal organisational states.

 

 In trying to understand the nature of adaptive response made by some organisations in response to external pressures such as the threat of market erosion due to free market economic policies recourse needs to be made to the concept in complex organisational modelling of ‘adjacent possible’. This is when in searching the space of possibilities, whether for a new product or a different way of doing things, it is not possible to explore all possibilities- for any of a variety of reasons – but it is possible to consider change one step away from what already exists. Thus in the case of Ghana Rubber Factory Limited, their adaptive response to market erosion threat was product expansion to imitate imported beach sandals. A response that is within easy realisation of existing factory machinery but is only activated in response to an external threat undermining the organisation’s bottom line.

 

2. INTERPLAST (GH) LTD

Interplast Limited was established in 1970, in consultation with the Ghana Water and Sewerage Corporation (GWSC), the former State owned water and sewerage systems developer, supplier and manager in Ghana, to provide high quality unplasticised Polyvinyl Chloride (uPVC) pipes and fittings to internationally recognised standards. The Company has (by its own estimation) since produced and supplied the majority of Ghana's requirement for small and large diameter uPVC pipes for the supply and distribution of water throughout Ghana. Interplast Limited is the largest manufacturer of uPVC pipes in Ghana.

 

The factory which is located in Accra, is equipped with the most technically advanced extrusion machinery available today, thus making it possible to supply complete uPVC pipelines at short notice for either new projects or for additions and replacements of existing lines. The factory also produces uPVC pipes for borehole drilling, irrigation, telecommunications and electrical distribution industries.

 

Routine testing of all pipes produced at the factory is carried out, as laid down in BS 3505 or DIN 8062 Standards specifications under the supervision of the Ghana Standards Board. These quality tests are undertaken in the company's fully equipped and modern laboratory ensuring that Interplast pipes conform to the highest quality attainable in the world today. The company presently manufactures a comprehensive range of uPVC pipes to the following specifications: BS 3505 1/2" to 8" diameter in various pressure classes. Pipes from 1/2" to 1.1/2" outside diameter are available with plain spigot and solvent weld joints. All pipe sizes 2" diameter and above are available with mechanical rubber ring joints, as well as plain spigot and solvent weld socket joints. DIN 8062: 20mm to 400mm outside diameter in various pressure classes. Pipes from 20mm to 50mm outside diameter are available with plain spigot and solvent weld socket joints. All pipe sizes 63mm outside diameter and above are available with mechanical rubber ring joints; as well as plain spigot and solvent weld socket joints.

 

In addition to manufacturing uPVC pipes, as an added service, the organisation has trained engineers and technical advisors that offer technical advice to buyers on the correct use of Interplast uPVC pipes and fittings. The company also keeps stocks of pipe fittings as an added service, to accompany all sizes of pipes produced. Normally pipe fittings are not produced by the factory and could be obtained on the open market, but this added service makes purchasing pipes from the organisation a one stop shopping activity.

 

There are two other organisations manufacturing similar products in Ghana, namely, Duraplast and Pipes and Plastics. By the organisation's own estimation it is by far the largest in the sector, producing almost 60% of the total national output.

The company has 250 people employed presently, and has only a single production site, with warehouses off the production location.

 

The management style is described as highly controlled but flexible, with an emphasise on disciplined organisation and an extolled sense of individual and collective responsibility. In task allocation processes, generally an employee is given a clear task definition, and is allowed to express any points of differences; uncertainties with regards to the task. Assistance, differences in opinion, etc related to allotted task must be clarified through a worker's immediate supervisor or manager, or by turning to appropriate information sources. There is an effective trade union representative body that represents the workers, focusing on workers welfare, safety related issues and production related activities. The workers union negotiates on behalf of the workers with the organisation for salaries and conditions of service of workers as well.

 

Generally there is no friction between workers and management, and workers have adequate and relevant information to enable them work effectively and confidently. Open channels of communication exist between management and workers with the Managing Director often walking through the production floor and interacting at ease with the workers on the shop floor. Among management, there is a flexible interaction environment. Flexible interaction occasions all levels of the organisations communication, with an emphasis on functional relevance rather than excessive bureaucratic patterning of activities.

 

However there are clearly demarcated lines of role responsibilities. At the shop floor level are three separate positional groupings, the supervisors, foremen and the workers. There are four shifts, and every shift has a foreman, assistant foreman and a supervisor (or shift leader) who leads each shift.  The factory hands are at the bottom of the ladder, above them are the foremen, with supervisors above them, actually, supervisors are the shift leaders; the workers are organised as work teams and teams are allocated responsibility for each shift, the factory runs three shifts operating twenty four hours for seven days a week. This is necessitated by the fact that plastic extrusion is economically best conducted on uninterrupted basis, shut downs of the factory that interrupt production is costly, and the organisation finds it economical to operate non-stop. There is a back-up generator in the event of a power shut down, but this is only for emergency power sources and cannot run all the production machinery.

 

There are regular negotiations between workers and management to ensure the establishment of a climate of mutual support and the elimination of friction. There is a formal two year salary re-negotiation, but due to the continuing depreciating value of the Cedi (the local currency) due to turbulences in the macro-economic environment, management and workers have come to an understanding to have 'a wage opener clause' where an annual salary review is undertaken. Salaries, which is the area of utmost concern for workers is not solely organisational determined but is influenced significantly by government regulations and minimum wage specifications enunciated from governmental level as well as prevailing salaries in other manufacturing sector organisations. However the organisation pays workers more than the minimum government approved salaries.

 

The most recent changes the organisation has made has been an expansion programme, leading to the introduction of new lines of machinery, new products etc. The new product line was the polyethylene line and the manufacturing of wider dimension pipes; these are pipes of the 450mm diameter size to fill a market niche in the large-scale construction sector. This has been occasioned by the introduction of new machinery to facilitate these production activities. The organisation has also imported machinery that is being set up for the production of plastic door and window extrusions, that are currently only imported, and have had no significant impact on the local building industry.

 

As a consequence of the new production lines, new machinery has been imported and more technicians have been engaged and employed to set them up and operate them. In addition, foreign experts from the manufacturers of the new production machinery have been hired to help with on the job training of the technicians to facilitate operations of the new machinery. The organisation emphasises on the job training of its employees, even though occasionally there are external training through seminars organised at The Management Productivity and Training Institute (MDPI).

 

Other changes have been the strengthening of the accounting staff through the recruitment of professional accountants, the standardised application of accounting software and payroll and purchasing management software.

 

The quality of new employees have also been upgraded, leading to the increasing employment of qualified technicians with Polytechnic background and Production Engineers with University and Polytechnic educational backgrounds.

 

There is a high emphasis on workers safety and safety equipment provisions are rigidly and uncompromisingly enforced. The management on the whole indicate no problems between workers and management; and workers/work teams have no significant frictions with their organisation at any level. For shop-floor workers the main issue of concern are their earnings, the value of which is affected by depreciating local currency and the inflationary pressures permeating the economy. There is an active trade-union representative body in the organisation and every other year the terms of conditions of service are fully reviewed with full workers participation.

 

Training of workers is mainly done on the job, in addition there are training workshops organised by the Management Productivity and Training Institute, and another institute, AMSCOM for managers and employees.

 

To enable international recognition and enhance export potential the organisation is seeking to receive the ISO 9002 certification, internationally recognised industrial quality recognition. The requirement for this certification in itself has brought in its wake organisational re-organisation to ensure that the organisation meets the specification of the requirements for the certification. The changes have significantly manifested in updating management processes, physical organisational infrastructure upgrading and changes in product quality; which in this instance required investment in machineries that ensure precise measurement of products. In addition to technological modifications and upgrading, there has also been staff trimming activities, which was preceded by a worker sensitisation exercise to condition the workers to the higher expected standards concomitant with the ISO 9002 industry certification. The requirements for this certification cover the whole organisation rather than only the products or the manufacturing process.

 

Local consultants, have been resourced to assist the organisation in setting up required structures, to draw up documents for the certification process, when it was realised that the expertise required was beyond the organisation's knowledge base. To facilitate the ease of change external consultants have been brought in by the organisation to assist with worker sensitisation. External auditors have also been brought in to update accounting procedures.

 

As to whether there was any conflict of interest between the local industrial certification carried out by the Ghana Standards Board and the ISO Certification Board, there was no conflict of interest, rather it is the case that the ISO Certification was of higher stringency and more demanding than the local product certification.

 

With regards to management procedures, the organisation is future oriented and innovative, with adaptive capacity built into the management procedures. The management specified the importance of constantly changing and adapting to changing circumstances, rather than extolling any particular approach as the best. On product quality, which is of utmost importance, there is an orientation towards constantly introducing newer products so long as there is a market to be explored. Presently the organisation is seeking to expand its product market base by seeking to export to the West African countries, since most of these countries are French speaking, the organisation has hired bi-lingual secretaries, and bi-lingual salesmen. Management practices have seen significant changes in recent times. Leading to increased flexibility and very open channels for communication within and across segments of organisational sub-systems, the management has emphasised relevancy rather than role status as the underlying basis for cutting across hierarchical positioning. Indeed the management emphasised that it is task activity that governs the type of decision making engaged in at any particular level. Thus, issues of relevance to a particular work team receive full, involved, discussion and decisions are arrived at consensually rather communicated from above.

 

The organisation generally tries to anticipate changes in customer tastes and market potentials rather than react to changes. An approach that requires an effective marketing division that collect and analyse market data to anticipate changes.

 

The organisation's goals are to produce the highest quality products and expand its market base, while selling at the most competitive prices. Given that there are other operators in the market, it requires monitoring competitors’ products and those imported.

 

Workers are organised as teams with 22 persons in each team. Isolated machines may have individual workers but generally task is organised for teams with a shift leader, each team on a shift is expected to work together on the production machines. Shift leaders allocate each person within the team, allocating specific tasks as human capacities and task specifications require. Certain tasks override individual task allocations. For example, in the event of a sudden power shut down, a not altogether infrequent event in this part of the world, all the workers must proceed to empty the extrusion tanks before they harden, irrespective of task area of specialisation or allocation. In which case all the team must focus on a production activity that is normally a shop floor activity. Each work team on a shift is constituted of Engineers, Electricians, Mechanics and Operators, the Electricians are under the Engineers and the Operators are responsive to the Mechanics, and they are all under the direction of the shift leader. The tasks are monitored based on the performance of the whole team rather than the individuals per se. On the whole, the organisation has no record of any significant or disruptive inter-team disturbances, the organisation has expounded mutual support rather than blame laying, and it has become an aspect of the organisation's culture.

Concern for workers welfare rank highly in the organisation's management strategy, and this requires involving workers in significant aspects of discussions regarding their welfare. The intention here, being to ensure that workers are highly committed and task focused, at ease in the day to day task performance situation. Maintaining safe working environment is a standard practice and safe work practices are detailed-out and effectively supervised.

 

Quality of performance is determined on the job by the amount of 'scrap' generated by a factory worker. A further inducement for high performance has been a strategy of relating performance to salaries, where pay is matched to team performance.

 

The organisation has devised its own way of determining the degree of worker satisfaction or dissatisfaction by the extent of scrap each work team produces, level of attendance of workers, amount of sick leaves and leaves without absence. So far these employee state assessment have yielded high positives, or indicators that show high effectiveness coupled with efficient production, little wastage, and high worker attendance, which to the Management indicate high worker satisfaction. However, while no recourse had been made to psychological measures of worker satisfaction the management expressed interest in resourcing for these measures, however, these non-manufacturing social science tools have no high priority as measurement tools.

 

The organisation has excess capacity, and is currently trying to expand its market to enable increased production. The factory has a maximum production capacity of 15,000 tonnes per annum but is currently only producing at 9,000 tonnes per annum. However, the organisation notes that while it has excess capacity for the wider diameter pipes, the utilisation capacity of machinery for smaller diameter pipes are at optimum, with little excess capacity. In the light of this, it is noted that institutional buyers for major construction projects usually use wider diameter pipes. The organisation had been supplying larger diameter pipes to the Ghana Water Company Ltd, which is responsible for undertaking large-scale water supply projects that use these types of pipes. However, the organisation has not received any significant orders of recent times from the Ghana Water Company Ltd. which organisation, i.e. the GWC Ltd. has placed a ban on purchases for the current financial year, since that organisation is heavily indebted and is unable to make purchases. In addition the national government is financially hampered and restricted in carrying out major construction projects in the water supply sector, which projects normally make use of these pipes.

 

Export market is thus being sort for, for both small and large pipes. The Managing Director has of recent past been on market exploration trips in neighbouring West African countries of Benin, Togo, and Niger, and interest has been received in the organisation's products from the Arab countries and as far as from Pakistan.

 

While the organisation thrives for effective performance in all areas of its activities, the innovative disposition of its management practices makes the management freely admit that there is always room for improvement in management practices.

 

As to how the organisation measures effectiveness. Effectiveness is measured through a combination of several procedures; the approach basically involves a combination of a series of comparisons. The organisation compares production of the previous and present year and attempts to analyse the differences, whether it be increments or decrements. There is also an assessment of degree of debt recovery. The financial statement, indicating profitability is also regarded as a measure of effectiveness. Conclusively, the management assumes that given the organisation's expansion activities the organisation is effective since a non-effective organisation cannot expand. In addition management note that commercial banks have confidence in the organisation, another indication of the organisation's effectiveness and viability.  These are all indicators of effective organisation state rather than means of valid measuring of organisational effectiveness.

 

The organisation has been growing progressively since 1971 when the organisation started with 3 sets of production machines, the number of production machines have increased to 12 and 4 more are being added. Comparatively, for example in 1992 the organisation produced 2,200 tonnes of pipes and in 1994 it produced 9,000 tonnes.

 

The immediate external environment has been characterised as not favourable. The external environment of organisational concern is the local economy. The organisation faces severe problems in meeting its dollar import bills because of the depreciation of the local currency, the difficulty of obtaining foreign exchange to import raw materials, leading to default in payments, the exchange rate of the local currency to the major foreign currencies, especially the United States dollar, keeps fluctuating precipitatiously downwards affecting financial planning. Goods sold at the existing prices in a few months are inadequate to cover production costs.

 

The organisation has to advertise its products extensively, and also a lot of promotional activities are embarked upon, all these are expenses for the organisation. Although manufacturers association (The Association of Ghana Industries) has attempted to mediate a common pricing policy among producers of similar products, this has not proven very effective, leading to marginal price-cutting to attract customers.

 

The interest rates on loans from banks, which is important for servicing the purchasing of raw materials is around 45-52%, which is astronomically high and unfavourable for the organisation.

 

Importers don't seem to pose much risk since; such importers have focussed on importing pipe joints, rather than items that are produced by Interplast.

 

The problem rather stems from international contractors, who prefer to procure wholly made pipes from their donor governments than buy locally manufactured pipes, an activity that has deprived the organisation of a viable market. In response to this problem, the factory has outlined a programme in conjunction with the government to import raw materials from the country where the loan is coming from, while production is carried out in Ghana, and the contractors pay the cost of production and transfer the raw material costs to the country tendering the international loan.

 

This approach has been evolved by the organisation through discussions with donor agencies, the government, the Association of Ghana Industries and the World Bank Representatives, as well as the International Contractors to come to an understanding that instead of purchasing pipes from abroad, the shipping of which doesn't make economic sense, the contractors can come to an agreement with the organisation to import the raw materials for local processing. Though some basic understanding has been reached, legislative or international trade policies have not been effected to make this agreement all binding for all internationally contracted projects requiring the use of uPVC plastic pipes, which can be locally manufactured in Ghana.

 

The Managing Director of the Ghana Water Company, which is a major receiver of foreign grants, is working to make this exportation of raw material rather than pipe imports a part of their international contractual agreement. Realised, this effort emergent from this organisation will have an industry wide effect and benefit. In addition to making available a viable market hitherto closed to the organisation, it would also lead to increased employment generation for the local economy. In addition local production of finished goods leads to lower product price. This initiative is very much in concordance with the ongoing 'buy made in Ghana' promotional activity being carried out by the Association of Ghana Industries.

 

As part of an innovative management strategy the organisation has added customer support services to complement its product sales. Special pipe laying equipment have been purchased by the company to assist large scale construction activities of its major customers who require such assistance, there is available transport to deliver the products to purchasers sites, technical expertise on aspects of pipe-laying are offered, the organisation often offers to send pipe-laying experts to building and construction sites to offer free consultation. Where special fittings required for particular projects are non-existent locally, the organisation exploits its international product-resourcing base to help acquire these for its large-scale customers. In this developing economy where building contractors are often novices in the field, and lack the necessary technical expertise these services endear the organisation to its customers and leads to committed customers. An example is given of appropriate services provided for two Chinese companies that have generated a lot of purchases from other Chinese contractors.

 

Customer complaints about the company's products are not only welcomed but also encouraged, and adequate responses and adjustments are activated to suit particular customer demands.

 

Some of the customer complaints have been in regard to quality of products in terms of the exactness with which a specified measurement is reflected in the manufactured product. Thus a customer who buys a 3-meter pipe, goes home and measures it and finds that it is actually 2.90m will come back complaining. The organisation has made consistent effort to take a responsible remediation to ensure optimum product quality. As indicated above, part of the new technology installed is designed to improve on precision measurement.

 

New equipments are accompanied by technical experts who come to help with the installation. The organisation has placed orders for six new machines to help increase capacity. Replacement of ineffective machines is periodically carried out, thus, new cutting limbs are expected to help improve precision cutting. Most of the equipments are bought from within the European Union.

 

While the bulk of the raw material comes from the USA, unfortunately none of the raw materials, mainly PVC resin are available locally and what comes from Nigeria, for example, the Filler, Calcium Carbonates, are of lower grade than what the organisation could use in its products. Local Potassium carbonate is of lower quality than desirable. In addition reliable sources of supplies have been established with raw material suppliers in the U.S.A. who offer good terms of trade and credit extensions, making a sustained effort to resource raw materials locally unmotivated.

 

Public Awareness is created of the organisation and its products through such promotional activities as supporting local Universities and Technical institutions.

 

The major problem outside the depreciating Cedi and the high interest rates has been a major flood that caused extensive damage some few years back. All the machinery had to be stripped down. This is a distressing location factor over which the organisation has no control. However as at the time this study was being conducted, work was progressing on the improvement of the drainage systems, it is expected that the completion of this drainage improvement project will completely and effectively remove this location problem. 

 

In terms of ease of access to regional markets that could absorb the organisation's products, its been noted by management that while there is an ECOWAS (Economic Community of West Africa) trade liberalisation, the actual activity on the ground differs from governmental proclamations. It has been realised that there seems to be a French faction that gives preference to products coming from Francophone West African countries, thus irate drivers frustrated by the cumbersome procedures to transit from example from Togo to Benin to deliver products have refused to make the trip again. Thus there is still need for a more effective implementation of regional trade policies to facilitate market expansion drives into neighbouring countries.

 

Transportation costs to countries further a field have made markets further a field than the West African sub-region unattractive.

 

It would be noted that with Interplast various kinds of changes are taking place simultaneously or in close proximity. The organisation is constantly monitoring its environment, especially the products and prices of competitors to enable it make reactive adaptive response to enable it maintain its market position. The organisation also makes reactive coping responses measures such as installing a backup generator to enable uninterrupted production when the national power supply was irregular and unreliable. The organisation also undertakes planned changes such as the ongoing ISO 9002 certification organisation modification and upgrade activity in progress. Expansion of existing production capacities through increasing existing production capacity and introducing new machinery to explore a new niche for larger diameter pipes are another form of internally driven change activity. The organisation has made internally instigated changes at lower employee level by inserting a wage review clause that enables yearly review of workers salaries. This change is a required necessity since workers are sensitive to issues related to their remunerations and any proactive effort to anticipate crisis situation and react proactively aids the organisation's long-term effectiveness.

 

The organisation’s structure is clearly hierarchical, but changes in management orientation have enabled greater flexibility and open channels of communication across the organisation.

 

A change in quantity and quality of personnel has been in reaction to an internal need for higher qualified technical men and women on new machines. While the organisation prefers internal training of production workers, it is the case that this internal training on fairly complex production machinery and processes is enhanced by the availability of personnel with the required technical background training.

 

The resourcing for external knowledge base and consultants is in response to an internally driven need for modifications and upgrading of internal organisational states to satisfy the need for international certification of the organisation.

 

External assistance has also been resourced to assist in the upgrading of the accounting section of the organisation. This change is in response to an internal need for higher quality accounting procedures and practices to support the organisation's bid to be a market leader for its manufactured products.

 

Market expansion drive is a response to an internal advantageous circumstances of expanded production base, such that the organisation is producing and is capable of producing more goods than its existing market base is capable of absorbing, in response to this need for a change in marketing orientation, the organisation is exploring regional markets in the West African sub-region.

 

An aspect of organisational response to micro triggers of change is in terms of in-built flexibility in organisational response to its customer’s needs and requests for product adaptation to customers' special needs and requirements as a management approach. By formalising this approach, the organisation has structured in adaptive response at a responsive organisational interface and thus integrating customer needs with formal organisational states. What this implies is that the organisation constantly monitors through sensitive procedures customer reactions and expectations, locking in satisfied customers as it builds on its existing customer base.

 

Some triggers of change, whether internally originating as a need or a strategy for growth or externally emerging which activate an anticipatory response in the former sense and a reactive response in the later sense can be managed by the organisation through adaptive responses to cope with the need for change, such as wage opener clauses or as a growth potential realisability such as the introduction of a new production line.

 

All change that is in response to some internal or external influence, which change activity would not have been undertaken at that time, in the absence of the intermediary influence are adaptive responses to cope with those triggers of change. Certain triggers of change emergent from the external environment such as depreciating local currency that negatively intrudes and distort financial projections by distorting pricing policies can only be responded to limitedly.

 

Response to change triggers, which triggers can be seen as pressures for changes in operational and management strategies that cannot be obviated but responded to assume two basic forms. There are those changes that the organisation by adapting its systems to cope with lead to growth or sustenance at preferred levels of organisational activity. There are other change triggers that the organisation in responding to, must necessarily shrink at some level, whether through taking short-term financial losses or lowering production capacity to cut back losses.

 

Organisation would preferably control or be able to influence all extraneous circumstances that determine their outcome states. Manufacturing organisations bring together variables of production within a defined structure, which structure is a division of specialised groupings, with an aim to realise determined ends within an operational medium existing in fairly predictable external environments. The extent to which an external environment is predictable influences significantly an organisational capability to operate profitably. When an organisation's general environment, which environment is beyond organisational control albeit affecting organisational affairs significantly becomes turbulent and unpredictable in a negative direction, such an external environment's effect on an organisation cannot be underestimated. Interplast is a manufacturing organisation that imports all its raw materials, and is thus dependent on availability of foreign exchange at good purchasing rates on the local foreign exchange market, it also requires a supportive credit facilitation from local banks. In addition it requires a steady currency value for it to balance production costs with appropriate pricing of its products. All these three factors that complement an organisation's capability to sustain its production activities and grow are woefully lacking in the general environment in which this organisation exists. The organisation's attempts to cope with this negative environmental intrusion has not been clearly expressed or defined. There is an assumed slack built into organisation's resources to enable production at lowered profit levels to enable the environmental turbulence to stabilise or lead to redefinition of a changed and stable and more predictable externally environment. Changed environments would naturally lead to a redefinition of organisation sub-system activities through cost cutting actions, resource re-allocations, micro amanaging of production activities, while product prices are adjusted to reflect the changes within the organisation arising from external influencing effects.

 

Every change in an organisation's activities would normally be expected to reflect positively on the organisation's bottom line of desired expectancies. One way an organisation can determine the extent to which it is approximating this desired bottom line is through the measurement of its effectiveness in any of a myriad of activity sets end results that occasion any organisation's productive activities. In the manufacturing sector it is not altogether unusual that some aspect of effectiveness measure is related to actual production activities. At Interplast, the main effectiveness measure on the shop floor is the amount of 'scrap' or waste that is generated as a result of the production process. From the perspective of the management, the 'scrap' is the definition of production efficiency, high quality work is equal to low scrap, and while poor quality production is equal to increased waste of production materials. It is to be noted that rather than measuring effectiveness, this measure of production is a measure of efficiency. Organisation's may focus on productive aspects of their whole activity sets, but even where they do not articulate it, all organisations are constantly measuring a variety of end measures across various organisational sub-systems to determine the degree to which the organisation approximates maximum states of efficiency over extended periods. What this reveals is that Interplast could benefit by looking for organisational psychologists to identify and establish reliable measurement tools for determining the organisation's effectiveness.

 

The complex nature of organisation-environment relations come to the fore in relation to this organisation and its management’s efforts to remain profitable. Another area in which this becomes evident is in the organisations relation to its external suppliers of raw materials, for example at Interpalst Gh Ltd, the management has formed a relationship with its external suppliers that goes beyond the normal purchasing activity that typifies this sort of mutual engagement between buyer and seller. As a means of enabling regularity of supply of raw materials even when foreign exchange supplies and or poor exchange values lead to inadequate organisation purchasing ability.

 

 

 

3 POLY PRODUCTS

The Poly Group of companies started operations thirty years ago, initially setting up two plants; Poly Products (Ghana) Limited and Poly Sacks (Ghana) Limited which produce polythene films and woven sacks respectively. Presently the organisation has grown into a collection of a group of seven companies based in Accra, Kumasi and Tema producing high quality packaging products for the local industries and exporters of agro-commodities. In addition to its seven manufacturing plants in Ghana, Poly Group has other establishment in seven countries in seven countries in Africa, Asia and Europe. The group has distinguished itself as the market leader in the packaging industry and is ranked among the top 100 companies operating in Ghana. The Groups product range include (i.) Carrier bags used for shopping and packaging, seedlings, food, water and strapping. (ii.) Woven sacks for packaging agro-export products like cocoa, cotton, salt, rice, flour, sugar, maize etc. (iii.) Water storage tanks, dustbins and traffic cones. (iv.) Plastic products- viz. PET bottles and jars, tubs, buckets, disposable cups, food containers and straws. (v.) Corrugated boxes (cartons) made for the packing of locally made products and agro-export commodities.

 

The company is a group of six affiliated factories, namely:-

1. Poly products

2. Poly Sacks

3.Poly Tank

 i) Roto (which produces plastic water tanks.)

ii) Bottle (which produces drinking bottles)

 4.Poly Kraft

5. Sonnes (which produces all of these products but is located in Kumasi and serves the northern sector of Ghana)

6. Somotex or the Somovision (which sells electronic consumer products.

 

Poly Products where the present study was conducted was set up in 1966, and is the flagship of the Group of companies. It is the pioneer and the largest producer of the top-of-the product range of carrier bags for shopping, seedlings, food, water and other consumer products. Among its defining technologies is a fully equipped graphics department, which can assist customers to work on their ideas and designs. It has six printing presses, making the company the quickest in turn-around on delivery within the industry. In addition, the organisation is in the process of procuring gravure and lamination presses in order to substitute some of the high quality packaging that is currently imported. In order to solve problems of liquid packaging, oils and detergents, the company represents "Nichrome-India", a market leader in manufacturing packaging machines. The machinery from this company is targeted at the oil, soap powder, mineral water, confectionery cocoa powder, salt and other industries that may want to automate their packaging and filling lines. Poly Products is also capable of providing additional support by offering multi-layer films and applications that can increase the shelf life of these products.

 

 

The organisation is a privately owned manufacturing sector organisation. As is typical of all such organisations, final decision-making authority lies with the Chairman, who in some cases also happens to be the founder as is the case in this organisation. The workers are highly controlled. Which implies that there is a strict line of control where lineal responsibility is maintained. For example as indicated above the Managing Director is responsible to the Chairman, the various Factory Managers and Staff Managers are responsible to the Managing Director, the Factory Hands and Operators are under the Supervisors. And this line of reporting is preferred but there are occasions when this command structure is not stringently adhered to. Supervisors seeking to consult the Managing Director may consult the Factory Manager and be granted permission to establish first hand contact with the Managing Director, but under no circumstances are they to by-pass the Factory Manager (i.e. without consultation) and make a task related contact with a higher position manager. If a problem is within the solution capability of an immediate supervisor, that immediate superior personnel becomes the immediate recourse, and the line of positional capability is thus followed. At times certain issues, may require a worker going directly to the Managing Director, there are no formal barriers. If an issue requires the Union representative the worker must go directly to the individual in charge of that activity. If however, a technical problem arises on the production line, then, whoever is in direct superior position must be consulted. The senior mangers, even the Managing Director, walks the factory floor and interact with the workers to ensure that there is no separation between activity groupings. There are occasional seminars to highlight relevant aspects of organisational activities.

On the shop floor of the factory are the factory hands, the junior operators and senior operators. The factory hands work under the junior operators and the junior operators under the senior operators. The factory has two types of task activities; extrusion is mainly a team activity, while at cutting and printing each individual is allocated a machine and job allocation for a daily operational period of eight hours.

In extrusion, a machine may require three to five workers to enable task completion. The nature of the task on the extrusion machines require groups of workers interacting as highly coordinated teams to ensure efficient production.

 

Workers involvement in decision-making and aspects of organisational management are encouraged. Every three months there are durbars held where all workers and management interact on common problem areas that need to be addressed within the organisation. There are also suggestion boxes where workers who have ideas that can contribute to innovativeness in any area of organisational production are encouraged to deliver their suggestions. Suggestions that are implemented are rewarded to the contributor as a cash award. This encourages idea generation among the workers.

 

The primary mission of the organisation as set out the organisation’s vision statement is to produce packaging products of highest quality and standards as obtains anywhere else. Secondly to distribute these products quickly through a nationwide network of sales outlets and distribution centres that will easily ensure availability to customers. Thirdly, to remain partners in progress in national economic development, helping to create employment and wealth that will enhance the standard of living of the people and sustain advancement of the country. Finally the Group of companies aim at capturing leadership position in the packaging industry, and using this base to expand and diversify into other viable areas of the economy. Sustained profit making is of importance in sustaining the organisation.

 

With regards to the changes that have occurred in the organisation, in technology and machinery, there has been additional machinery brought in since to upgrade production quality and capacity. The last addition of new machinery was two years back for expansion in response to widening market base.

 

In the area of changes at the human resources of the organisation, it is the case that with increasing growth of the organisation, incentives have been introduced to increase employee commitment and sustain motivation to worker harder. Some of the workers, for example, the higher management staff have been issued cars. Workers who have served ten, fifteen, twenty years in the organisation are given long service awards, mainly electronic products (fridges, deep freezers, televisions, etc) and/or cash awards. Every five years following the tenth year of employment a worker receives an incentive award. Ten years of employment is merited by an award of 14" TV, fifteen years, 20" TV; 20 years a double deck fridge, etc. All who qualify for the years of employment receive these awards. Workers greatly appreciate these awards and try to be of good behaviour to qualify for them in terms of years served. This incentive scheme was introduced as a reaction to loss of experienced employees who were being attracted to work in other manufacturing companies. The organisation in a bid to create further favourable conditions introduced this award incentive scheme as a further inducement to life long employment with the organisation.

 

Changes at management level has been in terms of the employment of a number of qualified personnel and administrative staff to cope with a need for increased staff to support the increasing size of production and the consequent need for persons of such required skill. Presently the total number of employees is 200 as compared to an initial number of 30 persons when the organisation was established.

 

A worker's appointment may be terminated for proven theft, fighting on factory premises etc. All these are managed under disciplinary procedures. For minor offences one is forewarned four times before stringent disciplinary sanctions are applied. Some of the minor offences regularly evident in the factory are 'taking small quantities' of rubber bags, e.g. ten pieces of polythene bags the value of which is insignificant.

 

The factory has in recent times, more precisely the past one-year solicited the assistance of management experts to establish a team oriented incentive scheme to enable the elicitation of high team performance. The preliminary studies in this regard have been concluded and management is presently assessing the report for implementation considerations.  The Management were unwilling to go into details about the implementation of the team incentive scheme.

The performance appraisal system in place in the factory, considered the individual's input within the team effort. Thus workers were appraised based on their performance within the team in realising production targets. The appraisal is based on meeting pre-established objectives and goals set for each position. Worker's performance appraisal started about four years ago, and the appraisal system is being improved with time and usage. Supervisors have been tutored from time to time on appropriate appraisal conduct.

 

Training of workers is mainly in-house. A worker can start as a factory hand and end up as a supervisor depending upon performance, honesty, integrity, and response to duties.

 

As regards employment policy, the organisation had to increase its employee numbers, this resulted in the employment of new supervisors and junior managers, to prevent any bitterness in existing workers, positions open for promotion are advertised in-house with required qualifications and if such positions cannot be filled from within the organisation, new entrants are then taken. (For example, the educational background requirements for supervisors as specified in the job description for a supervisor is the Higher National Diploma in Engineering, if there are no employees with the experience or qualification, then a new person would have to be employed and support is encouraged from all employees to enable easy settling in by the new employee).

 

There are regular consultations between Management and workers. Discussions between Management and Workers are sometimes mediated through the union. The Workers Union articulates the workers view and negotiates with Management on workers behalf. There is a regular yearly collective agreement negotiation focused on pay; while every two years the whole collective agreement is reviewed. In recent, times the pay, medical insurance and safety requirements have been altered within the collective agreement. These negotiations are conducted through the Workers Union.

 

The effectiveness of production is ascertained through the meeting of pre-set production targets. Over time the production department has set task completion, quality, and quantity production targets based on mean production over time. In establishing production targets based on averaged performance on the machines, the factory managers assumes that these are realistic targets emerging from actual operation rather than estimates based on untested expectations. Production groups are thus more responsive to these performance goals positively.

 

There have been noticed group influence effects, especially in the team-based activities. Severe shortfalls in production output targets are investigated and workers are advised to improve performance. There are no punitive measures related to poor productivity. Instead Factory Managers try to establish conditions for realising optimum production, other than through threats.

 

The most common area of complaint is remunerations, since salaries are fixed through comparison with other similar producers in the polythene industry and government minimum wage specifications.  The organisation considers itself a leader in the industry sub-sector and attempts to offer the best salary scale as far as the minimum wage, is concerned. In response to the falling value of the actual purchasing power of salaries, the organisation has a yearly salary review with the union rather than the normal two-year reviews.

 

The organisation makes an effort to retain its workers. Since the inception of the company, it is only once that a few workers were laid off due to redundancy. Long tenured workers are preferred as they acquire ease of performance and technical efficiency. Management prefers workers to have permanent tenure once employed. Retraining is expensive and time consuming. And constant infusion of new workers lowers productivity levels.

 

In terms of customer relationships, the organisation assesses its customer relations in terms of customer responses to their products. Common customer complaints are related to product quality and pricing. The Managing Director sets product price, and this is done by considering product input costs and average prices of similar products on the market.

 

One of the effects of the local economy has been the fall in value of the local currency; this has affected negatively the operations of the organisation. The devaluation of the Cedi has some serious effects. Raw materials, for example, are purchased on 90 days credit basis, the rapid rate of devaluation means that products sold in the local currency do not generate adequate returns in foreign exchange value or dollar value to cover total cost of production. Interest rate on commercial bank loans at 51% is abnormally high.

 

Competitors activities such as 'poaching' which involve procuring qualified workers from sensitive positions at Polyproducts by new establishments have led to situations where poached workers are offered high incentive salaries, while that particular organisation's overall base salary may not be high for all employees. The 'poached' workers then pass on their abnormally high pay scale information to other employees who then complaint about their comparatively lower pay. Management has however indicated to workers that on the whole Poly Products has a better general base salary than similar organisations in the sector. By being a pioneer in the industry, Poly Products has become a base of knowledgeable workers that are poached with regularity.

 

Importers of similar finished products from South Africa, Korea and Taiwan have become competitors to Poly Products and have been a source of lowering of product price on the market. The management is of the opinion that trade globalisation has a general negative effect, especially given the weak economy of Ghana; the management is of the opinion that some form of limited protection may not be out of hand. However, in a bid to increase its market base the company also sales products in other West African countries. But about 90% of the organisation's products are sold locally, on the Ghanaian market and fluctuations in that market have significant impact on the organisation.

 

The management emphasises good communication across the organisation, to enable early identification of problem areas to be addressed. Motivational courses are organised for supervisors to inspire and sustain high productivity through efficient supervision. This activity is coupled with performance related pay to ensure high productivity. Workers are assisted by the Human Relations and Factory Managers to set individual, periodically assessed performance targets.

 

There are new changes being implemented in administrative procedures. Old machinery is frequently replaced. On the technology front, the whole organisation is newly computerised.

 

The organisation believes that its products are of quality high enough to be competitive in any market. Lectures leading to the implementation of Total Quality Management were being organised for Factory Managers as at the time these interviews were conducted. On the whole, future prospects of the organisation are seen as very bright.

 

The economy is seen as a negative influence, because it is not stable. The depreciating value of the Cedi is seen as real threat to production capability. Last year, for the first time in 30 years, the severe devaluation of the Cedi by 32% caused the organisation to layoff some of its workers. Apart from the depreciation of the Cedi, foreign exchange is inadequate to meet the foreign exchange requirements for facilitating importation of raw materials from either the open foreign exchange market or the banks.

 

Workers desire good remunerations, job security, and adequate social provisions.

 

The organisation is mindful of its extra organisational social responsibilities and has made financial donations and structural upgrade assistance through its social outreach programme to institutions such as the Ghana Medical school and other tertiary institutions in the country. And has organised seminars and public education campaigns in conjunction with metropolitan and district assemblies on waste management problems. Given that it is a producer of polythene bags that cause not altogether insignificant litter in the larger settlements.

 

Poly Products like other organisations in the private sector manufacturing sector has undertaken a number of adaptive changes in response to both internal and external triggers of change. Adaptive changes were made in response to a situation that requires a change from existing patterns of operations to enable the organisation to re-orient its core systems to remain in balance, it is also to enable the organisation as an entity to maintain a healthy balance with its task and general environment. What passes for a balanced state of existence is not a calibrated measure but a state of organisational existence that enables the organisation to realise its goals at all levels. The organisation environment relationship is critical in every manufacturing set-up. At Poly Products, the turbulence in the economic environment has had negative impact on organisational affairs. While the organisation absorbs the intruding effects of high foreign exchange rates, limited supply of foreign exchange, high interest rates. It does not seem to have any means of directly controlling the turbulence occasioning these environments. The organisation also has had to make adaptive changes to other environmental effects such as competitors poaching activities, by activating an incentive scheme to entice workers to aspire to work for lifetime. The interesting aspect of this adaptive response to experienced employee loss actually was that management allowed the workers to define the organisational conditions that facilitated would encourage them to work with the organisation for, hopefully, their whole working life.

 

These ideas were then conditionally implemented as an employee incentive scheme. In addition, it has increased employees’ awareness of its salaries in comparison to others in the industry. The shrinking local market base through the activities of competitors has resulted in an increase drive to find markets in the West African sub-region through intensified sales efforts. Customers are attracted to be retained, and the organisation does this by responding to customer complaints about product quality.

 

The organisation also has introduced new technology that enables the organisation to expand its range of possible product choices from which customers can choose.

Internal adaptations have also been made to cope with changing system states. The installation of new machinery has resulted in the entry of new personnel and increased training programmes to update employee knowledge and operational efficiency.

 

Improvements have been made in communications between management and workers through the institution of regular employee-management durbars to facilitate a common forum for discussing organisational problems at direct management/employee interface. The introduction of worker's durbar is a means of further enhancing flexibility and encouraging easy communication across all levels of the organisation.

 

In a hierarchical organisation greater participation is enhanced by organising communication activities that minimise on position and emphasises situation and problem relevancy, when both lower level employees and managers desire clear lines of responsibility. To establish a convenient compromise these workers durbars have been instituted to enable early identification of problem areas and fishing for innovative solutions and idea generation across the organisation.

 

Technological change has been mainly in terms of expansion through the installation of additional production machines and computerisation.

 

Whatever benefits were expected from adaptive changes made, these no doubt have been negatively influenced by the non-supportive environmental turbulence. Establishing balanced states of organisation existence in an open system model assumes that efforts within the organisation must be complemented by critical environmental factors or that such actions are mediated within predictable environments. While organisations are by their very nature positioned to influence aspects of their environments to promote their existence and growth, the lack of cohesion that environmental turbulence causes, cannot be resolved without shrinking effects on organisational viability in the long run, especially if that influence comes from the input environment.

 

In competitive environments, organisations tend to focus on the output environment, whereas in the case of Ghana, potentials for expanding on market base for manufactured products will require innovative marketing and adaptive response tactics to best competitors while creating and exploring 'virgin', and hitherto un-accessed market niches. In such a setting creating effective adaptation processes with efficient supporting internal administrative and management strategies that enable maximum mobilisation of resources to effect utmost market penetration is all within the organisations control and is more often than not realised. However when input environment factors, especially those from the general environment, such as currency fluctuations, high interest rate, lack of adequate foreign exchange, unfavourable exchange rates, all which variables are beyond direct organisation control, intrude and disrupt the input-transformation-output process of organisation's conceptualised in the open system model. Given that these intruding variables are outside the organisation's control, no amount of structural alterations, employee improvement processes within the organisation and market orientation strategies is likely to enable the organisation its desired performance level since as Bertalanffy (1968) notes "an organisation's performance and the rationality of its internal arrangements depends on the environment-organisation contingency." Where some aspect of the variety of environments that organisations interact with does not makes itself amenable to or cannot predictably be integrated into overall organisational planning, implicatively cannot be coherently managed, the organisation is rendered incapable of maximising its potentials because of the turbulence intruding from that unpredictable environment.

 

Organisations dwelling in such environments must create 'slack resources' to absorb the uncertainties and enable them to continue productive operation until predictability is gained in those environments and stability realised at the organisational environmental interface. Like all other organisations dependent on imported raw materials and therefore requiring foreign exchange, instability in the value of the local currency and the consequences of weak economies, present Poly Products with environmental pressures and negating forces that are initially reacted to by drawing on slack resources of the organisation to enable continuity in production. This however is a short-term measure. In the medium term, if stability is not established in the environmental source of turbulence, adjustments will have to be made to facilitate further slack through cost cutting measures. In spite of this environmental peculiarity, expansion of product lines, improvements in quality of personnel, increasing flexibility in communication across organisation structure, training programmes, incentive schemes, new equipment and machinery, market expansion drive and salary reviews are all aspects of anticipatory or reactive adaptive responses to some organisation need with an intent to yield positive benefits for this manufacturing organisation.

 

The management of Poly-Products emphasises that while profit making is important to the organisation, it still pays attention to its wider social responsibilities and obligations, this social activity is realised through contributions to educational institutions and through financing social outreach programmes. However the interviews indicate that inability to predict precisely significant aspects of input environment eventually undermine expected organisational outcome states.

 

4 Duraplast (Gh) Limited

Duraplast produces PVC pipes, corrugated chips and fittings and water hoses.

 

The company employs 195 persons.

 

The organisation has been in existence for about 30 years.

 

The structure of the organisation has an Executive Chairman at head with six directors beneath him (The Executive Director; The General Manager; The Director of Human Resources; The Financial Comptroller; )

 

Beneath them are the Production Managers (who normally have engineering backgrounds); beneath these are the Technicians, (supervisors) and the Operators and finally the factory hands.

 

Workers are highly controlled and supervision is visible and direct.

 

All issues relating to employees welfare are discussed via the local workers union. The union intermediates on issues relating to workers welfare in the factory; and acts as a liaison between management and the workers on non-task related issues. The union is also involved in salary negotiations.

 

Duraplast is the main manufacturer of PVC pipes for government set-ups and supplies several major contractors. The organisation sees itself as one of the major manufacturers in its field of production.

 

The fluctuating local currency that is depreciating against the major foreign currencies has led to problems of import bill servicing for an organisation that has to import all its raw materials. However owing to good relations with bankers, the organisation still obtains support for import credits.

 

The organisation has imported new machinery for replacing and expanding its existing production line. The effect of the new machinery has been an enhancement in production.

 

Management has good relations with employees.

 

The factory has made use of expatriate consultants, especially in technical areas of production activities.

 

The organisation’s products have a reputation for high quality and aims to have available to satisfy market demands this high quality of products. 

 

The organisation is expanding its production activities in response to expanding markets and increasing demands for its products. Though there are competitors in the market, Duraplast has built a reputation for high quality products, resulting in ever increasing demands from the lucrative government sector and private contractors. Owing to the popularity of its products and the high quality of the products. The organisation sees itself as a market leader.

 

The organisation determines the effectiveness of its operations by focusing on the extent to which it is able to meet its set production schedules. Operational efficiency is considered to be very good. Profitability is fairly good and there is admittedly room for improvements.

 

The main negating effect of the local economy on the organisation’s activity has been difficulty in procuring foreign exchange from the Bank of Ghana. Since bills of credit have to be obtained through the Bank of Ghana. On the open local foreign exchange market the organisation is unable to procure enough foreign exchange to satisfy its foreign exchange needs.

 

Decision-making is top down, with strategic decisions emanating from top management. The workers are involved in organisational discussions at their own levels in terms of issues relating to them and their task activities; the primary ground of interaction between workers and management in relation to organisational policies is through the workers union.

 

The organisation has added a new line of machinery to existing production line to augment existing production capacity. In addition to its main production line the organisation also maintains a top class workshop where all repairs of its machinery are undertaken. The organisation also has four sister companies, Qualiplast, Ashfoam and Qualicap. Qualipast also manufactures plastic pipes, Ashfoam makes polyurethane foam mattresses, while Qualicap manufactures crown cap bottle caps for bottles using steel plates.

 

Managers generally relate to employees in a friendly and fairly informal manner, there is a supportive environment throughout the organisation. Workers are organised as teams running three shifts operating twenty-four hours, seven days a week. The morning shift runs from 7 am to 2 pm, the afternoon shifts runs from 2 pm to 9 pm, the night shift runs from 9 pm to 7am. Any grievances from workers related to the organisation are referred to the union, who then take it up with management for resolution.

 

The organisation has no particular training scheme for its employees; self-improvement through individual initiative is the norm. All employees, especially factory workers are supposed to learn on the job. Some managers have the opportunity to take external training, especially it if is needed to enable them improve their work performance.

 

There are no significant frictions between managers or between management and the union. On the whole, differences of opinion are normally resolved at all levels through discussion and fair negotiations. The import being on what is good for the organisation without necessarily being humanly detrimental.

 

The working environment is generally of good quality.

 

The main workers concern is inadequate salaries. The organisation on its part says it abides by government regulations for salaries and the problem has more to do with the fast depreciation of the local currency. While the government has increased minimum wages by 2%, the increment was not supposed to affect the private sector. Owing to poor government directives and ineffective currency stabilisation instead of the bi-annual salary review as specified in the Collective Agreement, there is an annual salary review.

 

Workers task performance assessment is carried out by their immediate supervising officer, and is based on attendance, per unit output as specified for a particular production task and an individual’s attitude towards work and other workers. A worker's performance is monitored through objective measures like the amount of time taken to complete a measurable production output.

 

Performance appraisals are carried out organisation wide and its results are linked to the bonus an employee is given. Bonus comes in the form of products or cash, which is the preferred medium desired by most workers. Only full time or permanent workers benefit from bonus payments, casual workers or temporary workers are excluded.

 

The organisation taking into account variability in performance constantly revises production targets for each shift. There is a standard daily production target arrived at through averaging of daily productions using same technology over twelve months. If a work shift for instance the night crew produces a certain number of products, the production quality and quantity are compared with the average of the previous crew, while overproduction is merited, underproduction is noted and compared with the next shift's production concurrent falls in production are investigated at both technical and behavioural levels to find out the cause for the lowered production and any problem area identified is promptly addressed.

 

The various supervisors and shift leaders have been sensitised by the production and personnel managers to notice and reward exceptional performance on the job. And resources have been set aside to give weekly incentives as the need arises.

 

The organisation expects from its workers maximum output and daily inspections in the various departments are encouraged to ensure that all employees are doing what is expected of them.

 

It is the view of the management that in so long as construction activities nationwide are high, their production will continue to increase.

 

Though the currency fluctuates and depreciates, the organisation makes its annual financial projections in Cedis.

 

The main change activity in Duraplast has been an expansion programme, which is realised as the installation of new machines to expand on existing production capacity. The organisation sees a need for increasing production and responded by installing new machinery. The installation of new machinery aside, the organisation has made changes by introducing flexibility in salary review as a response to the depreciating value of the currency undermines the real value of workers salary. Change is a response to a need in reactive change situations and in planned change anticipation for an end benefit. Environmental changes that impact the organisation's state are invariably responded to, however the nature of that response varies depending upon what is deemed an effective response to cope with that environmental trigger. Inability to secure foreign exchange, establish letters of credit and depreciating currency should necessarily activate an adaptive response of some sort, but Duraplast management are reacting by absorbing the decreasing profit margins due to this environmental intrusions on organisational states until stability of some sort emerges in the macro-economic environment. This reaction is due to the fact that the organisation has little control over this environment and must react to pressures for change from a solely organisational context, seeking by that uni-locus activity to create a consistency of logic of action through organisational system readjustment to enable organisational sustenance.

 

The preference for casual and temporary workers is a protective response to enable the organisation reduce labour force easily without accruing the expenses otherwise involved with laying off permanent employees, should cut back on costs require closing down some production capacity.

 

Changes in reward schemes have led to the introduction of an incentive scheme that rewards hard work. This motivational incentive is supposed to reward outstanding contribution, but it is the case that evolved social norms at the shop floor, lead to about same level of production by all teams. Production teams are allocated tasks and an assumed production target, they have a responsibility as a unit to generate the expected performance and for the most part determine how they realise each day’s production. Close supervision and high control on the shop floor keeps performance of all team members producing at about the same rate, the incentive scheme it is my observation, served more as a token moral booster than a practical means of increasing workers salaries.

 

5 Latex Foam Rubber Products Ltd

The organisation is called Latex Foam Rubber Products Limited. The organisation was incorporated in 1969.

 

The organisation manufactures Polyurethane flexible Foam and Spring Mattresses, High Density Foam Mattresses, Orthopaedic Mattresses, Student Mattresses, Re-enforced Mattresses, Foam Sheets for carpentry, Sofa Beds and Pillows.

 

The organisation has two factory locations, one in Accra and the other in Kumasi. The Kumasi factory was opened in 1996.

 

The organisation has over the past 30 years expanded considerably its sphere of activities; from an initial factory area of 6,000 sq. ft in 1969 the organisation presently occupies a total area of 200,000 sq ft.

 

The organisation has been very innovative. In 1972 a new line of products, the spring mattresses were added and factory space was increased to 36,000 sq ft to accommodate the new machinery. Two years later in 1974, production capacity for the spring mattresses were increased by the addition of new machinery. This increased the factory space to 72,000 sq ft. In 1979, the organisation expanded its productive activities, by producing its mattress ticking for its covers, which hitherto was imported. This expanded activity led to factory space expansion to 200,000 sq ft. The organisation produces almost 90% of its raw materials within its factory area.

 

The organisation has the intention of introducing new lines of products.

 

The company has always had an innovative orientation; in 1992 the organisation blazed the trail in the production of High Density Foam Mattresses and Super Soft Foam for furniture making. Again in 1994, the company became the first in Ghana to begin manufacturing Re-enforced Spring Mattresses and Sofa Beds in Ghana. In 1998 the company pursuing its innovative orientation, began the production of orthopaedic pillows. And began producing shoulder pads for the fashion industry. In 1999, the organisation introduced began a new product line of comfortable need fitted pillows, these are the Dona pillow which is 100% polyester fibre, Willows pillow, Readers pillow, Armrest pillow, Shaper's pillow, Ergorest, Legrest, Back care, Neck Care, Liam's pillow and Body Inclinator.

 

As international markets were entered successfully, the organisation found it necessarily to expand office space to accommodate increasing supporting staff, and also present the appropriate image of the organisation, in lieu of this a new office complex was constructed and officially opened in 1999. A show room was attached to exhibit the company’s range of products.

 

In the year 2000, the organisation became the first in the Foam Manufacturing business to put up an environmentally friendly Tank Farm. The tank receives chemicals in bulk so as to facilitate continuous flow of raw materials to the factory.

 

As export markets demands expanded the organisation has begun building an additional factory to cater for export supplies due to the high demand for the company's products in Neighbouring West African countries.

 

In addition to its present two factories and a new one under construction, the organisation has regional depots in all the ten regions in Ghana.

 

The organisation is wholly privately owned and has bureaucratic management structure. There is a flexible work climate and communication channels are open. At the top of the management structure is the Chairman, assisted by a Managing Director and a General Director.

 

The organisation employs 450 persons.

 

The local market can be segmented into supplies for furniture upholstery manufacturers, assembling plants, departmental stores, hotels, hospitals, prisons, governmental institutions and the general public.

 

Export markets presently exist in Neighbouring West African and Angola.

 

The company's vision is to gain ascendancy in its export markets and to increase the exportation of finished products.

 

The company also makes donations to various charitable organisations in the health and education sectors as well as sports. The company has won many national and international trade awards and certificates of merits.

 

Latex Foam Rubber Company Limited is one of the truly innovative organisations in its sphere of production. The organisation has actively introduced new products.

 

The organisation has also engaged in infrastructure expansion to augment its expansion activities.

 

Structure like in all privately owned sector organisations is thin at management level, broadening out at the bottom layer. The organisation has facilitated flexible communication structures that enable ease of communication between management and workers.

 

 

 6.3 TOPICAL ISSUES OF PRIVATE SECTOR CONCERN

6-3 The Private Enterprise Foundation (PEF)

One recurrent problem in establishing organisation-environment contingency in the private sector manufacturing organisations is the extent of their ability or more appropriately inability to input their suggestions in the defining of the economic landscape. In recent times the Private Enterprise Foundation (PEF, -hitherto-) has been established through multilateral consent and interest to represent and proactively project the needs of the industrial sector in policy making. So important has been the activities of the PEF that no research involving a macro perspective of organisations in Ghana can overlook its critical role in the outcomes of the manufacturing sector.

 

The PEF has been in existence for five years now and is an autonomous non-governmental organisation. Whose membership consists of six business associations; The Association of Ghana Industries (AGI), Ghana National Chamber of Commerce and Industries (GNCI), Federation of Association of Ghanaian Exporters (FAGI), Ghana Employers Association (GEA), Ghana Association of Bankers (GAB), Ghana Chamber of Mines (GCM). These are all private sector associations.

 

The PEF was established with the assistance of the United States Assistance for International Development (USAID). Who shared the view of the need for an effective private sector oversight body to play a critical role in the economic resuscitation efforts of Ghana. The need for multiple voices in assisting Government policy development and implementation has been recognised and for the private industrial sector it found representation under the aegis of the PEF. A multilateral funding arrangement was contracted from an international funding agency. The dispersal of funds required a matching fund from the Government of Ghana as an assurance to the donors that the PEF project had any relevance to Government Policy making. The Government thus made a one off 250 million Cedi contribution towards the setting up of the foundation outside that the PEF does not see itself under any conditional requirement to tow the line and support Government views that are contrary to its member’s analytical conclusions. The PEF has been vociferous in its critique of Government policy statements as enunciated in the annual budget statements that it finds inappropriate.  The advocacy activities of the PEF are mainly in terms of reviews of the budget statement its shortfalls and problem areas are highlighted and published in a publicly circulated document. The aim of these critiques is to build abroad base for discussion of issues that the PEF raises on its publicity platform, to build public pressure for Government to make adjustment where it is required.

 

The Private Enterprise Foundation is an Advocacy body that lobbies in the interest of the private sector with a desire to cause a change in unfavourable government policies. It desires among other things that government consult with it before budget statements are presented. So that its inputs be considered in budget preparation.

 

So far the foundation has made significant strides in attracting government attention. Currently, there are on-going discussions with Government, with a bi-monthly meeting with the Vice-president of the Republic on policy related issues.

 

The Private Enterprises Foundation (PEF) has had some effects on government policies. Investment policy for one, has received significant attention in discussions with the Government. It is the opinion of the PEF that while a congenial investment atmosphere in the light of globalisation trends is welcomed, that does not necessarily mean that the nation should cede its national authority to attract foreign investment. They are of the opinion that the investment law lacks equity.

 

With regards to the Divestiture of state owned organisations in progress in Ghana, the PEF believes its involvement in later stages of divestiture policy has enhanced the divestiture implementation process, increasing the range of organisations being divested. The PEF participation also made the divestiture process more open.

 

With regards to the World Trade Organisation (WTO) Free Trade Ratification requirements, the PEF is of the opinion that the Government ratified the WTO Free Trade Agreement far too hurriedly without long-term consideration of its full implementation effects on local industry development. Coupled with the Government's Structural Adjustment Programme that made Trade Liberalisation an entrenched economic policy, PEF's assessment is that the Trade Liberalisation Policy in its present form has opened the flood gates of uncensored trade far too wide and is a threat to the future well-being and development of the medium scale private industrial sector in Ghana. There is the need for Government to provide soft loans to buffer distressed local industries. The PEF also advocates for an ingenious funding scheme of non-defined particularities to help support local industries. A nurturing environment is required to sustain local industries, but it came short of outright protection for local industries.

 

In this regard PEF asserts that Government has a tendency of being reactive instead of proactive in economic policy framing, because policy making is far too exclusive of relevant interest groups who should otherwise be involved in policy framing discussions.

 

Following the noticeable financial distress of some private sector manufacturing concerns, the Business Assistance Fund (BAF-hitherto-) was established to assist distressed organisations. The PEF observes that the BAF was inadequately managed and funds were wasted through inappropriate dispersion. The PEF agitated to have representation on the disbursement Board to observe the disbursement and management of the BAF funds. It is the observation of PEF that disbursements were unnecessarily stalled, and loan recovery rates were poor. The PEF assisted through its participation by providing assistance with technical feasibility of applicants for assistance under the scheme, with the intention that assistance should be directed at organisations with the potential to apply it with economic returns.

 

Capital is essential to private industries. However Government is crowding out the private sector from the capital market. There is limited capital available and while Government's revenue has been increasing in recent years its expenditure is not decreasing, in its need for more capital financing to support its expenditure Government is borrowing from the same capital market as private industries, creating competition for critical, limited resources.

 

There is the need for long-term capital bonds in addition to existing current short-term treasury bills.

 

In the existing atmosphere, manufacturing has become burdensome and barely profitable. Those with capital to invest see trading as the quickest way to wealth.

 

The interest rate on 90 days credit virtually approximates the interest rate on loanable funds, given the risk free nature of treasury bills, Commercial Banks are preferring to invest otherwise loanable funds in the purchase of treasury bills. This creates a situation where treasury bills are soaking all available loanable capital on the financial market. Commercial Banks have indicated problems of loan retrieval and given the choice of a fail-safe investment of their resources, they will definitely prefer the safer easier investment approach of treasury bills. In the existing situation more than a few manufacturing industries in the private sector are starved of loans or access to credit.

 

Interest rates on Commercial Banks loans are astronomically high, such that, after such loans are contracted, businesses are finding it difficult to generate reasonable profits while servicing the loans. There is a correlation between interest rates and inflation rates; while prices of produced goods cannot be so proportionally increased given the existence of similar competitive imported products in the open economy of Ghana. Compared to the international borrowing rates, borrowing rates of Ghanaian Commercial Banks are simply uncompetitive.

 

What is most disturbing for private sector manufacturers is that national economic failures is giving international competitors in similar industries in the sub-region an advantage.

 

Industries are also faced with the high cost of utilities like water and electricity rates. The cost of labour is another consideration since depreciating local currency against inflation makes frequent salary adjustments inevitable.

 

Some manufacturers still use obsolete machinery leading to high production cost with comparatively reduced efficiency as well as low levels of productivity. Lower operating margins for newer more efficient machines and technologies means lower operating margins, making some locally manufactured products uncompetitive in their pricing.

 

Some Government Economic Policies related to open trade leaves much to be desired. A typical example is the collapse of the textile industrial sector due to poor Government policy frameworks that permitted uncontrolled entry of second hand clothes with low prices that undermined the demand for locally manufactured textiles.

 

The volatility of the local currency is another cause for concern; the value of the Cedi has depreciated by 40% in three months against the United States dollar, the major foreign currency. Throwing annual projections in Cedi in import dependent raw material users in industry out of gear.

 

While the private industries are not asking for Government subsidies they ascertain that the prevailing external environment within which they operate is hostile.

 

The critical review of economic performance by Government in 1999 is one of the most objective assessments of the economic environment within manufacturing sector industries operate in Ghana, and is summarised in the appendix as general organisation environment defining characterisation, providing the framework within which the general politico-economic environment of the organisations studied can be interpreted.

 

6-4 Areas Where PEF Thinks Government Needs To Make Changes

There is the need for Government to make radical macro-economic adjustments to enable the sustenance of local industries. Topically the Trade Liberalisation policy needs re-consideration as earlier stated.

In the area of Divestiture funds, PEF cites the example of Uganda, where divestiture funds did not go to support budget deficits financing as in Ghana but served as seed money for distressed industries or a means for granting soft loans for cash strapped manufacturing organisations to enable initial operations.

 

Government support of infant industries is a worldwide phenomenon, in many countries the industrial sector had been nurtured and there is the need for Government to come up with some ingenious process for stabilising frail industrial base in the country.

 

The political divide as much as possible should not affect policy implementation, this being so, since there are undocumented cases of Government bias towards party supporters business and against opposition party organisations.

 

Government needs to continue to be a facilitator of business through appropriate policy making.

 

Infrastructure provisions must be improved to service industry and facilitate industrial growth.

 

Technology transfer needs to be emphasised as an aspect of industrialisation policy.

 

The Association of Ghana Industries published an insightful survey report on the industrial sector in Ghana that succinctly summarises the nature of environment and the severity of the environmental intrusions on member organisations. This is briefly discussed below

 

6-5 The State Of The Ghanaian Industrial Sector

The Association of Ghana Industries (AGI) a member of the Private Enterprise Foundation (PEF), published its bi-annual assessment of the industrial sector in Ghana on October 9-15, 2000 edition of the Business and Financial Times, the foremost weekly business publication in Ghana. Its conclusions based on limited survey of production and profitability performance of thirty-three selected large and medium scale member organisations, spanning the period from January to June 2000. Indicate that the period of the first six months of the year was generally described as harsh on the industrial sector.

 

Of 33 companies surveyed for the study, only 7 (21%) achieved production targets, while 3 (9%) met profitability targets. Of the three (3) companies that achieved profitability targets, two (2) were major exporting companies.  Of the 33 industrial organisations surveyed, 28 (85%) identified finance as their main operational problem, while 10 (30%) and 6 (18%) companies raised marketing and technical issues respectively as operational problems.

 

The sample surveyed covered enterprises in the food, drinks, building, aluminium, printing and packaging, textiles and pharmaceuticals industrial sub-sectors.

 

The AGI concludes that the sharp depreciation of the Cedi (the Ghanaian currency), shortage of foreign exchange, high interest rates during the first half of the year 2000, certainly had adverse effect on industrial performance. It was also realised that sales volumes of some companies dropped as a result of unfair competition and reduced purchasing power. Overall operational margins were severely squeezed and huge foreign exchange losses contributed greatly to reduced profits.

 

 

                                                                   Chapter 7

 

7-1 Summaries and Explanatory Analysis Of Interviews Conducted At The Service Organisations.

 

1 Tema Development Corporation 

 

In 1951, when the Government of the then Gold Coast decided to construct the Tema Harbour, there was an identified need to build township which would provide the necessary residential accommodation and urban amenities for the harbour, and the workforce in the industries and other related activities associated with the harbour.

 

Since its inception in 1951, the TDC had gone through a chequered history. In 1952, it had formally been established by Ordinance No. 35 of July 1952, and then through the enactment and passage of the Tema Development Act of 1963 (Act 158), its functions were spelt out as the construction, administration and maintenance of the township. Presently the Corporation is now operating under Legislative Instrument (LI 1468), which has turned the Corporation into a development agency.

 

The Tema Development Corporation was thus established for the development of a township in the area known as Tema. The Master plan for Tema Township made an initial provision for 250,000 inhabitants in 23 planned communities. By original estimation all these communities were to have been completed by 1985. However, this objective could not be achieved over the planned period. Principally, the removal of government subsidies, loans and grants to the corporation in 1970's, was a major hindrance. By the end of 1980, the TDC was able to develop a total of ten (10) communities. In addition a substantial portion of the industrial belt was also developed.

 

Since being cut adrift from Government support, the TDC was generally left to generate its own financial resources to carry out its projects. To date the TDC has managed through its own ingenuity to develop additional ten residential communities to bring the total number of developed communities to 20. Two new communities (Community No 19 and 22) are being developed and constructed.

 

The organisation's vision is considered of immense importance. The future of TDC is seen as shaped largely by the organisation's corporate strategy, which to a large extent is tied to the achievement of Ghana’s developmental target, set in the national developmental blueprint, VISION 2020.  The goals of the organisation have also gone through several adaptations and reinventions. Presently, the Corporation seeks to further explore new areas of commercial co-operation and development, which will further strengthen the economic base of the township. The organisation thus emphasises its desire to seek joint ventures with foreign and local investors for the enhancement of its activities. These activities centre on the goal of being an efficient and reliable provider of both housing and infrastructure facilities of the highest standards to contribute to national effort towards the attainment of better standards of living for the inhabitants of Tema and Ghana as a whole.

 

The Corporation's Mission Statement states that TDC exists to plan, execute and facilitate developmental activities with the view to providing acceptable housing, industrial, commercial and infrastructure facilities within the Tema Acquisition Area. The Corporation seeks to conduct its business on sound commercial lines, while being mindful of its social responsibility. The organisation seeks to explore new operational areas in industrial and commercial development as well as in management.

 

To achieve this mission, TDC places value upon and emphasises the under mentioned organisational activities in its operations: -

(i) Teamwork

(ii) Regular and effective communication between management and employees and good customer relations.

(iii) Development and motivation of employees.

(iv) Efficient utilisation of resources, including time.

(v) Leadership by example…

(vi) Satisfying the needs of its stakeholders

(vii) Providing quality products and services to customers

(viii) Protection and preservation of the environment

 

The success of the Corporation has been significantly adduced to the Economic Recovery Programme initiated in the early 1980s by the Government of Ghana, which improved upon the general economy, making available various building materials that facilitated efforts in the housing construction industry.

 

In 1983, the Corporation de-emphasised its primary role as a direct developer to a facilitator. This change manifested itself in the type and nature of the organisation’s operations. Which presently can be summed up into three sets of activity categories.

1. As a Planning and Development Agency

2. As a Developer

3. As a Facilitator of Development

 

In its role as Planning and Development Agency, TDC fulfils one its major role, which is to plan and order land use and other related activities within the framework of the Master Plan. In line with this, the Corporation produced layouts to guide and control developments within the Tema Acquisition Area; setting out a plan for the developments of the various communities within the township. The main activity of the Corporation with regards to this function is to ensure that approved planning schemes are adhered to in the cause of their implementation, with occasional reviews to enhance performance of the plans.

 

In the role of TDC as a Developer, the Corporation has recently shifted attention to the provision of infrastructure services for the township to enhance proper and orderly development. In so doing the burden of providing such services by government after settlements have been established is eliminated. In pursuit of this strategic goal, the Corporation has been able to provide approximately 3,400 serviced residential plots in five communities since 1991 for both institutional and private developers. In the industrial areas, the Corporation has developed a total of 230 serviced plots for both local and foreign investors under the Corporation's investment scheme for industries. It is expected that this effort will complement a government programme, the Ghana Free Zones Board, which is currently working to establish a Free Zones site also in Tema.

 

In its role as Facilitator of Developments, TDC's activity in this functional area is mainly in the area of release of land to large and medium scale residential developers with a view to developing and creating acceptable environments which conform to the provisions in the Master Plan through such developers' own effort. Through this facilitation activity, the Corporation has added approximately 5000 houses through institutions and other developers under the Ghana Real Estate Developers Association over the past ten years.

 

In the past, government interference in the organisation's operations affected profitability. Currently there is no dependency whatsoever on the government. However because it is classified as a State Owned Organisation (SOE), it is under the regulatory control of the Ministry of Works and Housing. While in the long run it hopes to operate as a limited liability. Effectively, by 1970 the degree of state control over its activities were minimised and the organisation began operating as a profit-making organisation. Given it attains limited liability status, with no government interference, the organisation expects to continue to perform very well. Formerly, government interference and improper directives about allocations without payment from the government caused shortfalls in profitability. Presently, while the organisation is an SOE working under ministerial guidance of the Ministry of Works and Housing, it only operates on commercial basis without significant governmental interference in its activities. On the offset is that government subvention is no longer available. The organisation is now self-financing, producing high quality products, is competitive and totally self-dependent and appreciates it’s capabilities better than when it was restricted through full government ownership.

 

The main reason for government allowing the TDC to operate along commercial lines was that by 1970, it was realised by the government of the day that the consolidation fund that supports through subvention state owned organisations was being depleted, a few viable organisations were requested to be removed from state subvention to become self supporting, among these early group of organisations was TDC. While presently the organisation is a state corporation operating profitably and self-sustainingably. Plans are far developed to privatise the organisation completely. Being listed as an SOE implies a partial responsibility to government, but when it becomes a limited liability company it will become totally self-determining. Now the company cannot enter joint ventures with other companies, which it desires to do. Neither can it acquire land outside the Tema Acquisition Area to expand its activities into other parts of the country as it seeks to do. One of the consequences of government ownership is that the organisation cannot enter partnerships with other organisations to carry out joint projects. If it becomes a limited liability company it can do so. Thus enabling it to expand its sphere of existing activities. Management expects that soon, when it becomes a limited liability company, it can have greater operating ease to expand and grow, than presently.

 

There have been changes in Management Structure and Management Strategy since its transformation from state owned and subvented organisation to an independent profit-making organisation. There have also been significant reductions in staff levels. The trend has been towards functional relevance in employee levels. Initially there was a recognised need for employee trimming to compensate for the poor salary levels due to widespread coverage of limited profits over redundant staff. Poor overall salary levels were thus related to over employment. Thus employee size was reduced from about a 1,000 to 265. Even with this number, there is a felt need for further reduction. The existing level of staffing is considered adequate, but the Human Resources Director is of the view that staffing levels need to be reduced when one compares the number of houses being developed and built yearly. Presently the organisation employs about 362 persons. This was after a series of layoffs that reduced employees from 1,000 to the present number.

 

The organisation is structured with a Management Board that helps in policy design. There is a Managing Director at the helm of affairs, with six (6) Directors below him. Below the Directors are the supervisors and beneath them the non-supervisory staff.

 

 

By the structure of the organisation, management has a firm control over the organisation. There is high control of workers; the chain of command ensures that management has firm control. The organisation has a hierarchic structure, but the organisation sees itself as a 'family'. Among personnel of the organisation there is a harmonious relationship within and across ranks. There have been no industrial actions in the organisation that will indicate otherwise.

 

The Non-supervisory staffs belong to the Trades Union Congress, and are affiliated to the Public Services Workers Union (PSWU).

 

The organisation has some level of worker participation through the Joint Negotiation Committee. Before any major policy decision is taken this committee meets to consider these policy decisions. Here top Management, Senior Staff and Union representatives share a common platform to reach common decisions on issues related to the well being of each identified grouping. The main activities negotiated are the conditions of service as outlined in the Collective Bargaining Agreement. The Collective Bargaining Agreement deals with issues related to leave days, car loans, severance award, medical provisions, salary scales etc.

 

Task related issues are dealt with at departmental levels. Generally Management or Departmental goals are set at the organisational level, after that the various departmental heads (referred to as "directors") must then organise their subordinates to achieve mutually set goals at the departmental level. Departmental goals are based on organisational goals set at the management level. There is a common management strategy but no common management practice across the organisation, as various heads of departments have developed their own approaches to realising their departmental goals. Yet there is an emphasise on open communication channels to facilitate easy identification of problem areas in any department and efforts made to rectify them where there is an easy solution.

 

Departmental heads or Directors must submit quarterly reports for goal approximation assessment to be made at the organisational level. For example, the Estates Department is given a goal of ensuring that once houses have been approved for construction, they must be completed within a set period. After a project is completed, a specified period of marketing is determined and outlined after which another set time is specified within which all houses within that project must be sold. The Estates department must then submit quarterly reports to the Director once a particular batch of houses have been assigned for sale. This enables the Director to follow the rate of goal approximation at that level of Estate department’s activity. (It is resources generated from selling houses that provide profits for running the organisation, thus whatever is obtained from selling houses serve as part of the revenue for investment into other building projects.) Once houses are completed the organisation sets a maximum time period of eight months, within which completed houses must be marketed and sold. Most often these set times are met, clearly indicating a fairly good demand for TDC houses. Each of these activities sets are integrated with performance review and feedback activities to ensure a dynamic adaptation to emergent issues concurrent with the implementation activities. The Estate Manager observes that on the general these time-programmed goals are most often achieved 100%. In some events special interest cases falling outside the general norm have to be dealt with as they arise.

 

There has been overall computerisation and the networking of all computers on location at the head office. Improved accounting software has led to redundancy among lower level accounting staff. The organisation is currently in the process of computerising its Estates administration, enabling a more effective supervisory coverage of its property administration. 'Estates' is responsible for rented properties and selling/hiring of properties.

 

Public demand is very high for the Corporation's houses. Because, though there are competing estate developers, the organisation has a policy of using the highest quality materials, and because its lands were obtained through legislative instruments, there is no added burden of land litigation issues, a pertinent irritant in this part of the world. An example is given of a customer who came to purchase a house from the organisation because the former house she owned, built by another estate developer had a structural problem that, that particular estate organisation, after persistent complains by the woman refused to rectify. The point here, being that at TDC this would have been unheard of.

 

In addition to complete housing units, the organisation also facilitates the leasing of serviced plots. This is an innovative provision where before plots are leased certain facilities such as asphalted roads, water and underground drainage systems, underground instead of overhead electric cables are already provided in the area. This is quite contrary to prior practices in other plots where land/lease purchasers often face severe problems of non-accessible tracks, no utilities etc.

 

The introduction of underground drainage systems is also an innovation; in Ghana the normal drainage system is the U-shaped open gutters. But TDC has begun whole area construction of underground drainage and cable systems.

 

The organisation is the first estate developer in Ghana but has several equally capable competitors. Its progress is perceived as presently more effective than when it was under government subvention. Put into a position of being self-sustaining, there is an infusion of competitive self-sustenance drive that has caused the organisation to upgrade the quality of its products and its management strategy.

 

There is a preference for the TDC's houses because of several factors that favour it. In the first place there are several modes of payment offered. Houses are preferably sold outright. The hired houses are being sold, with consideration given to existing occupants, who have a first claim to purchase. Given that the organisation is operating as commercial entity this offers the best chance for maximising returns on its investments. The usual mode of payment for a house is that there is a 50% down payment and the remaining 50% is spread out over several months. This compares against outright full payment by other estate providers. One can also make full payment for development of houses as well as purchase already constructed houses put on the market. Once a purchaser makes down payment on a house, it is completed within reasonable time. When a house is acquired it can be sublet. A location advantage that makes houses acquired from TDC to be easily hired out is the fact that Tema is a prime industrial region with a large number of workers and their families. In terms of types of houses built the organisation attempts to satisfy all income classes. Considering the current overall high prices of houses nationwide, TDC's houses are a bit cheaper.

 

Due to the fluctuating local currency and the inability of the organisation to charge economical rents on hired houses, there is a preference for outright sale of its finished housing units. Rents of some older houses are far too low to enable adequate maintenance. Higher rents are difficult to implement because of lengthy court litigations. In more than a few cases rent increments had led to bitter legal feuds. To forestall any such problems, the organisation has in place a policy for selling the older units that had been rented. The litigation by rentals have led to a new rule by the organisation to the effect that occupants not willing or able to purchase have a choice to vacate the buildings or pay commercial rates at the end of one year's notification for purchase. But since the courts cases are yet to be decided, even this policy cannot be fully implemented until after all the court cases are resolved, to avoid a charge of contempt of court. Since becoming independent and self-financing, organisational attention has shifted towards commercial property development and houses for outright selling at existing commercial rates.

 

Outside houses, offices, shops, the Tema Development Corporation has rented out serviced plots, among other innovative services introduced by TDC have been the citing of a serviced car market for car sellers within its administrative region. All car sellers have been relocated to this serviced area. The lots are provided with canteen services, perimeter lights, electricity connections and water as well as telephones. While relocation outside city centre has engendered complaints from some car sellers who have developed a clientele base in their former locations, it is expected that concentration of similar products/ activities in a common locality will increase patronage of the car market.

 

A Free trade Industrial Zone has also been recently developed. This site is supposed to enable investors to build factories, the difference between this plots and any other plot elsewhere is the added value of supportive infrastructure provisions like streetlights, drainage systems, tarred streets and security guards on location.

 

Within the serviced areas, room has been created for social provisions such as schools, playgrounds, security men, police stations, etc. In addition to infrastructure provisions like water, electricity, asphalted streets etc. This makes the TDC property more attractive than other private estate developers.

 

The organisation has begun developing a Business City Project at the former Meridian hotel that is converting the entire twelve-floored hotel into offices for hiring. The organisation has developed several warehouses for renting and has plans for building more warehouses in this port city that is barely twenty kilometres from the capital city of Ghana, Accra.

 

Shopping malls have been developed at Community 18. These are two floor structures, but there has been a noted preference for the street level floors that were quickly hired. Shop owners admit that ease of accessibility is a factor for selection, and that given two shops selling similar products, a customer is most likely to enter a street level shop than climb the one floor upstairs to purchase a similar commodity at a similar location, for the same price. The upper floors are thus mainly being hired for offices, consultancies, service oriented activities. (It was my observation that slight structural adaptations such as the introduction of escalators will remove any location preference for top or bottom floors.) The organisation provides security services on a twenty-four hour basis to safeguard the malls.

 

The main problems from the external environment, is mainly due to Chieftaincy problems. The lands were acquired for development by government from the traditional authorities who are traditionally the custodians of the land. Over the years the Chiefs have bitterly complained that having given to TDC their sole legitimacy, they have gained little by way of benefit. The organisation has by way of compensation re-leased land back to the traditional authorities for farming and non-permanent development projects. When the organisation required the lands back at a latter period for construction, these has often led to court battles over who has the actual claim to the re-leased lands.

 

Encroachment problems have also been worrisome. Land that has been given for farming has been developed for housing, leading to court cases. The organisation has only one in house, active lawyer, who is overwhelmed by the number of cases. A situation leading to the organisation losing cases that it needn't lose. There is the identified need for recruiting additional lawyers but management delays emanating from the Managing Director's indecisiveness have not enabled this need to be fulfilled. It has been realised that an additional three or four lawyers are needed. (It is to be noted that the Managing Director is a government or a political appointee rather than a qualified employed role occupant.)

 

The organisation has also outsourced for external expertise to re-write Job Descriptions, Task classification, Job Evaluations and New Salary Structures. A World Bank Consultant also assisted in planning and implementing retrenchment.

 

A New Performance Appraisal format that linked performance to salary was developed through the assistance of an external consultant. The internally developed performance-pay appraisal system had run into severe problems due to incomplete and unsophisticated development and implementation, resulting in a virtual collapse of the salary scheme, leading to a situation, where many lower level employees were receiving higher take home pays than even senior management. In addition the appraisal became a highly subjective exercise, conducted as a favour rather than an objective assessment of the worker's performance. To rectify the situation that had severely dampened management motivation, there was recourse to external management consultant to re-develop and manage the implementation of performance related pay system for the organisation. Even after the application of the new appraisal system, the managers conclude that it will take some time for objective appraisal to become effected and call for a need to reconsider the essence of relating appraisal to salary.

 

Management suggests that performance may be related to an aspect of the salary as additive rather than determining the salary as a whole. Ensuring that the base salary structure remains unduly undistorted, while not removing a core incentive for motivating high performance. The general non-acceptance of the objectivity of the appraisal system in place and the linking of the performance appraisal system to salaries has left in their wake unresolved resentments. While most workers accept the linking of performance to pay, there is a non-satisfaction with the act of appraising performance objectively enough. To resolve this problem, it has been agreed that appraisals are linked to some form of cash awards but not actual salary, otherwise improper administration of performance appraisal linked to pay may cause a collapse of the salary structure due to non-sustainability of ever increasing salaries due to higher and higher performance appraisals. There was in addition a noticeable similarity between Management and lower level employee salaries. It was estimated that almost 60% of junior level employees earned higher salaries than management/ senior staff. To compensate for this unusual state of affairs, management decided that appraisal might be linked to some form of award but not be the sole determinant of salary.

 

Owing to the fluctuating value of the local currency the Cedi, an annual salary review has been instituted instead of the traditional two yearly lapse between salary reviews.

 

Presently, there is a general fairness in salary administration such that there were hardly incentives that could be said to be strictly limited to the managerial class. A new salary structure has subsequently been introduced that ensured that senior staff and junior staff did not earn at the same levels. The initial reaction from the junior staff with regards to the new salary scheme that decoupled salaries from performance was dissatisfaction, but following intense educational awareness the criteria for establishing salary for various levels were clarified, and was seen as equitable and fair to all employees and consequently the new salary structure was generally accepted. To ensure acceptance of the new salary structure; educational awareness campaigns were begun to facilitate full comprehension at junior worker levels for the rationale behind the new salary scale. Initial resistance from junior level employees who lost some of their pre-salary restructuring benefits fizzled when the full implications of the lopsided existing salary structure was fully explicated to them.

 

For an estate construction and management organisation, the TDC maintains a Construction Inspection and Maintenance Department that examines and certifies its construction projects. Actual construction projects are normally contracted to outside agencies as another innovative approach to minimise redundant organisational expenses over the long run. The decision to contract out construction projects rather than maintaining own construction crew came as a result of a change in the organisation's status from being a State Owned Corporation to a State Owned Enterprise (SOE). Contracting-out its building projects instead of maintaining its own building crews has improved bottom line profit making and minimised misuse of organisational properties as pertained when the organisation maintained its own builders. Presently there is a Work Superintendent who supervisors the quality of constructional work done by external contractors, as specified in the contractual awrding documents for building projects. On the whole, management is satisfied with this contracting out of construction projects.

 

Management is of the opinion that while much has been accomplished in improving organisational states there is yet room for improving efficiency and increasing output. The Human Resources Director is of the opinion that productivity could be doubled across the organisation with the existing calibre of personnel.

 

Management feels that there is a problem of lateness and regular attendance at work. It was discovered after discussions with workers that some workers live far from work and had difficulty with getting to work on time, this was due to difficulty of obtaining transportation early enough to get to work on time. To solve this problem Management and the Workers Union decided that the organisation should purchase a worker's bus that should pick workers. So far a 45-seater bus has been purchased and order has been placed for two additional buses. When all the busses are in place, the organisation expects that it will be possible to convey majority of workers without their own means of transport.

An alternative was the provision of transport allowance in the form of taxi fares for certain workers in strategic positions whose lateness to work affects the whole organisation. This provision of transport allowance is linked to on-time reporting to work. At the end of each week the worker's attendance is checked against the reporting time of each worker, those who report late or whose name do not appear in the reporting book do not receive the transport allowance for the next week. To ensure that workers who report to work late do not 'back-time' their actual reporting time to duty the attendance sheets are withdrawn from the desk to the Departmental Managers offices at 8:30 a.m. prompt. The approach of monetary incentive against early arrivals to work has yielded wholesale workers support. The attendance sheet will serve the dual purpose of checking regularity of attendance and control worker lateness.

 

Since TDC is not the only estate developing and building organisation and has recently faced stiff competition from other property developers developing luxury and economic houses on whole community basis. The organisation has been forced to engage in intensive marketing and public awareness exercises to enhance public awareness of the range of its housing and commercial properties products and community based activities.

 

The organisation sees a very bright future for itself given that the housing sector is pretty much underdeveloped in Ghana and being liberated of government control it intends to push the organisation into wider hitherto unexplored areas of the housing sector.

 

However, overall salaries of workers in Ghana are comparatively low, while cost of developing houses is increasing geometrically. The problem it has created is that local workers are not capable of making direct purchase of houses. However Ghanaians serving in foreign missions, working abroad, soldiers serving on United Nations Missions who have the financial means buy several houses and sublet to workers. These are those who are paid in dollars, pounds, etc.

 

A related problem due to depreciating local currency is the rising cost of building materials that causes a constant increment of building materials that transfers to higher cost of houses. Local residents are restrained from purchasing such high priced houses. Prices of building products, even those locally procured are indexed against the dollar, leading to incremental fluctuations of all raw inputs into estate development. Currently most of the buyers are foreign residents. From the public's perspective it is deplorable that houses built by local government owned organisations such as TDC are not affordable to the average Ghanaian. New houses have fairly significant amounts of imported components, such as electric fixtures.

 

A topical problem in Ghana is the fluctuating and constantly depreciating local currency that makes workers salary virtually insufficient. Complaints for salary increments are the major worker complaints. 

 

To compensate for the fluctuating value of the local currency, the organisation makes its annual financial projections in dollars to ensure stability.

 

There are external trainings or outside organisational training abroad for some senior management staff, in places like India, Britain etc. The government of Holland has facilitated Management Courses for the Estate Divisions Management personnel. External training is usually linked to need for improvement in a particular department of the organisation and is usually valued in terms of enhanced performance in a particular management area of activity after the training is completed. This is done by comparing performance before and after training.

 

The Director of Estates who participated in the interview remarks that external training has enhanced his management capability such that he is poised as a candidate for consideration for the post of Managing Director and commends the Director of Human Relations who has been employed for about two and half years, for increasing external training for enhanced management activities.

 

In addition, internal and external training is widening the scope of awareness of senior managers especially, as well a bringing to junior workers attention, spheres of work activities, hitherto unacknowledged, for improvement. The increasing introduction of innovative ideas for implementation has been adduced to increasing awareness for participatory management emanating from external workshops facilitated by the organisation for senior and junior managers.

 

It however also noted that sometimes ideas introduced at training workshops are difficult to introduce and implement into the actual work setting. Since long tenured employees are reluctant to experiment with new ways of doing things. This calls for Management sophistication to ensure employee acceptance rather than forcing through a new process that has met initial resentment. Implementation gaps are traced to source of difficulty of realisation and where feasible re-introduced after negotiations for all round acceptance of the new processes has been concluded. More often than not, this leads to all round acceptance and effective implementation.

 

As an estate developer TDC has a technical focus. The organisation is thus split along two broad categories i.e. i.) The Technical and Development Division and ii.) Supporting Administration machinery. The effective and efficient realisation of organisation's goals are best realised when these two arms operate co-operatively, but a personal schism that has been traced to non-cooperativeness from the Director of Technical Services sometimes serves as a blockade to smooth implementation. However this is not seen as a significant problem.

 

The organisation has a policy favouring problem identification and solution through dialogue, rather than allowing small problems to build up over the long term. Departments are organised as supporting teams that work around a problem with the singular aim of building a successful self-supporting organisation.

 

New employees are being recruited according to the strategic demands of organisation's manpower needs.

 

The organisation has won an award of merit from the Swedish government, and the Japanese government.

 

In the performance ranking of SOEs, TDC was number three in terms of viability and profitability. For the past two consecutive years the organisation has performed in profit generation higher than projected.

 

While all round performance has been high, some investments have not led to desired outcomes. Recent high investments in developing industrial plots and serviced areas have not yielded the expected returns. Demand for such plots for building factories has not been as high as expected. The management has received far more enquiries than actual long-term commitment to build factories on these plots. Management thinks that these is probably because a change in government in an election year is anticipated and there are expectations that tax regimes and concessions for industrial investment may change under a new government leading to a wait and see attitude from potential investors. It was pointed out that pressure was exerted from Ministry of Works and Housing to develop these industrial free zones to complement government development and industrial policies, the government created an awareness with TDC that many foreign investors had responded to Ghana's industrial renewal and foreign investment drive and needed adequate industrial provisional infrastructure provisions to establish industries. But TDC after investing millions of dollars based on this government assurance is virtually on the point of bankruptcy.

 

Another problem with the development of industrial plots was that initial government assurance has not been realised in rate of investors’ acquisition of the plots. However since the organisation is currently the only industrial area developer in Ghana it still operates in a niche market and invariable whoever wants to build a factory is most likely to acquire/rent land from it. This gives some room for hope for TDC, whose management is of the opinion that after the elections and a likely change of government, potential investors may be encouraged to commit themselves to actual investment in industrial infrastructure construction on its serviced industrial plots.

 

Currently, the organisation is preparing to operate as a limited liability company giving them a freehand to enter into joint ventures with other developers, to acquire more lands outside the existing acquired areas.

 

The Tema Development Corporation (TDC) has almost exhausted through development all its acquisitions that were original acquired to build twenty-four communities. So far twenty communities have been built and in four years all the acquisition will be exhausted.

 

The TDC is an estate developer, there is quasi-political organisation Tema Metropolitan Area Authority (TMA) that has been set up by the government under the Tema Assembly to cater for public spaces in the Tema Municipality. Earlier duplication of duties and functions led to frictions between the TDC and the TMA but these frictions has been amicably resolved through clarification of task responsibilities for the two organisations. Leading to the TDC leaving the maintenance of public spaces to the TMA while it focuses on estate development and maintenance of its hired structures.

 

"Discharging Our Social Responsibility" - Interview with the Director of Public Relations.

The organisation has been caught over the past two years in a ruckus with the Tema Metropolitan Area (TMA - hitherto -) over areas of functional responsibility leading to duplication of duties. When the sources of conflicts were resolved it was necessary for the organisation to clarify to the public that street lights, rubbish collection, the maintenance of community streets, schools etc was outside the sphere of activity of the TDC and residents need to approach TMA for issues or problems related to this. This clarification was necessary since before the establishment of TMA, it was TDC that was totally responsible for maintaining the Tema Municipality.

 

As a result of the establishment of TMA house owners who want to make extensions to their properties not only have to seek permission from TDC but also TMA. The two bodies then share 50/50 the charge for granting permit for extension to community houses. When a permit for extension is granted by TDC it has to be endorsed by TMA.

 

The organisation presently pays dividends to State coffers, but it is expected that government will pass legislation giving the organisation the status of a limited liability company.

 

Tema Development Corporation operates as a 1. Planner 2. Developer 3. Builder on order, 4. Operator of ownership scheme, 5. Facilitator of serviced plots and sites, 6. Initial provider of roads, drainages, water and electricity in its area of acquisition.

 

Serviced plots have added value, where all amenities are provided.

 

Government withdrew its subvention twenty years ago and since then the organisation has been operating profitably. It is a viable organisation. It is viable due to its management practices. Management encourages collective decision making rather than imposing decisions from above. The organisation now has a Management Board. The Management Board serves as a check on activities of Heads of Divisions.

 

There is a need for a good public image for the organisation and this depends to some extent on the activities of the organisation's staff.

 

The Renter's Association has in recent times posed problem through court litigations due to the organisation attempts to charge commercial rates for its houses, an activity that invariably has led to increasing rents.

 

Originally the government obtained land from three traditional authorities, the Tema traditional area, Kpone traditional area, and the Nungua traditional area. Over time the organisation has been engaged in Community Assistance Projects for these traditional authorities. These activities include the provision of water to Kpone Community, a project costing almost a billion Cedis. Schools have also been built; health centres and clinics have been built for the three communities. An educational endowment fund has been established for the three traditional authorities managed jointly by both the TDC and the traditional authorities.

 

The TDC has provided vehicles for transporting examination papers for the local schools during examination time. TDC has also provided transport support for Rotary International of Tema and the Lions Club.

 

TDC has also supported Tema Secondary School the main government established secondary institution in Tema. Recently a new sewer system has been built for the school, computers purchased for the school, a set of musical instruments provided, likewise for Ashiaman Secondary School.

 

These public support activities are expensive and affect the financial stance of the organisation but they are necessary to obviate the economic consequences of land acquired from these traditional authorities. In the wake of these activities the public has had a positive orientation towards the TDC and its Community Assistance programmes.

 

The organisation publishes a quarterly house journal for increasing internal and external awareness of its activities. There is a community FM radio station for education and entertainment.

 

The TDC intends to acquire new areas for future development. Presently all its land is still acquired through the traditional authorities. The land is guaranteed through government support and paid for through compensation charges and physical provisions to the traditional authority from which the lands are acquired.

 

The Tema Development Corporation (TDC) is in a transformational process of being changed from state-owned to Limited Liability Company. For the most part the organisation has been freed of government support and subventions, and had made the transition towards self-sustenance through profitable operations.

 

Like any large organisation TDC has had to make several types of changes. Its main planned changes has been in terms of expanding its sphere of operation, enabling it to expand into other activities other than only building houses using its own resources. The business activities of TDC of providing houses, commercial space and developed plots are activities that enjoy high commercial patronage. The organisation by its reconstructed business model has disengaged itself from actual construction of houses but rather contracts out projects to contracting firms; this implies that it is not in any way engaged in resourcing for materials for constructing. Rather it is engaged in supervising its contractors to build by specifications laid out by TDC.

 

The organisation is split along two broad divisions the technical division and the supporting administrative section. These broad sub-systems must need coordinate and establish supportive activity sets at their common interfaces to ensure effective organisational states of existence. Optimising human capabilities, especially at the management level is in response to management's awareness that by improving the quality of personnel, they stand a better chance at effective implementation of innovative management strategies. The quality of decision making in an organisation with tentatively numerous potentials and possible areas of investing is very much determined by the quality of the knowledge base its management possesses, and the organisation in recognition of this has adopted external training as a means of increasing awareness of its management body. The organisation is in the service sector where measurement of each individual output is not indicative in terms of units of some product.

 

The efficiency with which it is able to adapt and implement change measures will depend on the ability of its human constituents to be self motivated and their willingness to commit themselves to optimum task performance at all times. To create the organisational environment where employees are encouraged to contribute willingly, management of TDC has set in place several provisions such as transport assistance, performance appraisal systems linked to a reward system and opportunities for open communication between directors and employees.

 

Inter-departmental coordination and co-operation is enabled at management level through goal setting and post-implementation assessment at directors meetings on a regular basis. Vertical coordination is enabled and efficiently maintained through clear lines of responsibility and seniority in the functional hierarchical structuring of the organisation.

 

Departmental efficiency is ensured through head of department responsibility for facilitating a sub-system environment that enables goals for each department to be met, as much as possible, within agreed time limits.

 

Since employees’ performance is related to reward, managers and heads of groupings within each department are required to establish standards of performance ascertainment.

 

The Local Area Network ensures through accessible computer desk top units that all relevant information from all the various departments of the organisation are within easy reach for application to task performance across the organisation.

 

High demands for good quality buildings have ensured that over time, TDC has established itself through appropriate financial management as a highly profitable organisation in the estate development sector.

 

If management strategy is assumed to be that critical, selective management activity that coordinates internal resources to maximise output through input transformational activity, one could easily conclude that certain unique predispositions of sector occupancy and adroit individual management ability in TDC have made TDC a successfully transformed organisation.

 

It has also been favoured by having an enormous tract of land for development.

 

These two factors are its critical input requirements, it is well disposed to shop for the highest quality contractors to construct its houses and develop its plots, while it supervises and establish a basis for developing appealing design concepts, to be constructed for disposal in the housing consumer market. TDC is one of the few organisations that seem favoured by the turbulent economic environment, since its houses are priced in dollars, a stable currency, it ends up earning more in local currency for each identically priced input purchased on the local market as product input. Moreover, it's buildings with the exception of the slow take-off of its industrial free zones find a ready market.

 

The diversification from building its own structures to contracting out its projects represent a major shift in focus for TDC and was a management strategic orientation that was accurately analysed as a more efficient and cost cutting approach to providing its services. So far this has freed resources at the estates department to focus on project development and supervision, and cut resource wastage significantly.

 

Internal change has not always proceeded without problems, the institution of performance related salary scheme was intended to motivate increased productivity but the performance appraisal technique was undesirably subjective and initially, loosely implemented enough to make it an ineffective drain of financial resources and made ridicule of the salary scheme. The introduction of a new salary scheme that plugged the financial hole faced stiff resistance even though it unfairly favoured lower level employees. However educational awareness brought this misunderstanding under control and led to the implementation of an all round satisfactory salary scheme, with an added performance leveraged bonus scheme operating alongside.

 

TDC depends extensively on activities in its output environment, the heavy investment in a free industrial trade zone was undertaken without sufficient and detailed analysis of demand for such developed plots and has become a drain on organisational resources. While some pressing needs can result in a change in some aspects of the organisation to yield expected results, others such as heavy commitment of financial capital to products with low demand can lock an organisation's resource irredeemably over prolonged periods. Since the range of responses is limited, in this case to hoping that industrialists would be attracted in sufficient enough numbers to build manufacturing facilities in this industrial zones.

 

It is again to be noted that transformational change may and is often accompanied by a breaking away from conservative influence and practices that undermine strategic re-orientation. This sometimes centres on an individual in a critical role position. Adaptation to orient towards a more flexible and open management trend is compatible with the employment of new, well educated management and non-management personnel This action however met a block of significant resistance in the case of TDC in the person of the head of the Technical Department, whose management style is contrary to espoused management practices, making system congruence difficult to establish across all system sub-system elements. The incongruence resulting from the fact that while the rest of the organisation has become hierarchic with clear lines of responsibility and flexible communication structures built in to enable open communications environment; the Technical Department is hierarchic and bureaucratic, with preference for management practices leading to communication blockage and inflexibility in an important department within the organisation. This blocks the logic of action between the institutional level, the managerial level and the technical levels of the organisation, since management strategy is hindered from permeating organisation wide and having its fully anticipated beneficial effect. As indicated elsewhere, the extent of inbuilt flexibility between levels of operations in an organisation, the rate of ease of communication across levels become significant determinants of the extent to which organisations are able to dampen external intrusions from paralysing effective coordinated system wide response. This assumes greater relevance when one realises that an organisation's management approaches in reacting to environmental triggered change assume systematic systemic diffusion of responsively evolved tactical response aligned and coordinated at higher management level rather than peripatetic decisions fragmented within sub-systems in response to that sub-systems needs.

 

Significant change in organisations may either be a series of change activities in response to a variety of needs, either emerging internally or externally, or it may be a broad whole system affecting activity. Whatever form change assumes, adaptive coping assumes that a change in one sub-system will invariably affect a change in other related systems and cause them to adjust to keep the organisational in balance. An organisation is in balance when all its sub-systems are coordinated activity wise and strategic wise, such that hypothetically, the organisation is in position to maximise its potentials as a productive unit.

 

Worker participation in aspects of organisational decision-making is a change in human resources management practices at TDC. These participatory activities are realised through flexible communication practices, workers durbars and performance oriented management that requires open door policies. Worker participation activities have the possibility of bringing to management attention organisational issues that need attention that otherwise will not have been brought to management attention or taken longer to identify and resolve. In its transitional phase of transformational change, managers are exhorted to adopt an entrepreneurial style, to be open for new insights from all sectors and levels within the organisation for realising its goals and approximating its visions. Opening up communication channels is one way of freeing innovating ideas lying latent in some employee within the organisation.

 

The systems model of change lays emphasise on the central importance of human beings as the hub of all change. It is emphasised that change will not take place unless all individuals embrace the change. Facilitating a communication structure that disseminates information and encourages response from all organisational sub-system elements, allows early detection of resentment and employees reaction to change strategies, structural modifications and implementation procedures in real time. In this way, positive response is appreciated and negative response is reacted to and the necessary adaptations to particular implementation procedures are induced.

 

The sub-systems of a system may very well exist and function as clearly identified units out of synchrony with the rest of the system sub-system elements but at a cost, for example at TDC the legal department unlike the rest of the organisation retained a rigid hierarchy sub-system, structure and maintained clear sub-system boundaries from the rest of that organisation. This was a constant irritation to the rest of the management personnel who reacted by emphasising the separation attitude by excluding that unit from the benefits of whole system transformation or limiting its benefits to them, the head of that department which is so critical in an estate building and management organisation was not a part of the management body that were part of the focused group interview and their absence was explained in a way that clearly brought to the fore the negative reaction the refusal by the head  of that department to become more open and easily accessed by the rest of the organisation.

 

It became clear that the rest of the management personnel were in favour of the removal of the head of the legal department since his attitude to open management was not in synchrony with the attitude of the rest of the management body. Their reaction mirrors Checklands concept of emergence. The concept of emergence associated with systems theory is also a fundamental characteristic of complex systems. In systems theory it is linked with the concept of the ‘whole’- i.e. that a system needs to be studied as a complete and interacting whole rather than as an assembly of distinct and separate elements. Checkland defines emergent properties as those exhibited by a human activity system “as a whole entity, which derive from its component activities and their structure, but cannot be reduced to them. The emphasis is on the interacting whole and the non-reduction of those properties to individual parts. Not only should organisations be seen as a whole but in their operations organisations seek sub-system complementarity and are likely to be intolerant as a whole against a sub-system of the whole whose activity-set and management style is in opposition to the generally preferred and evolving management style in an organisation undergoing transformational change and this was made most evident in the case of the Tema Development Corporation. (TDC).

 

 

2 The Ghana Commercial Bank

This large, nationwide former state owned bank has recently been divested and has been acquired with 60% government shares. As part of the change from public to private sector ownership, the bank has had to cut down on staffing levels. Studies are underway to determine the appropriate staffing level.

 

The bank has also embarked on institutional change in culture; the goal of which is that worker orientation needs to change. Previously, there had been poor customer service complaints from its clients.

 

Existing system coordinating mechanisms were outmoded.

 

The organisation has set itself a new vision of being leaders in commercial banking in Ghana. By optimising banking activities at branch networks through application of information technology. Delivering first class customer services. Maintaining high quality assets.  It is expected its publicly traded shares should have good values.

 

The public should have good perception and appreciation of the bank.

 

The Bank has employed key management personnel to strategic positions. The organisation in securing top calibre personnel has poached personnel from other banks. The Human Resources and Personnel Department has been strengthened.

 

Communicating the message of change. The former Management team with the exception of the Director of Finance and Administration has been laid off. Though the layoff package was good by any standard, the trimming of staff is still in progress making many workers jittery of their tenure. The fear of job security has reduced employee commitment.

 

The basis for being laid off has been categorised as poor work habits, poor educational backgrounds, though workers who over time have improved themselves through in-service training are exempt. On the whole the criteria has been seen organisation wide as not being fair.

 

Resistance to change has been in reaction to redeployment of redundant staff at Headquarters and the larger cities and towns to smaller branches. Some of the redeployed claim to have established themselves and their families in these larger towns and are reluctant to transfer to the smaller branch offices. Generally employees prefer larger towns and main cities to smaller branch offices, where their services are most needed.

 

To prop employee morale various awards events recognising hard work recognition have been instituted to motivate higher worker output.

 

Work is presently organised as a team activity to encourage supportive behaviour on the part of all workers, and employees are assessed as members of a team. However, this is a task dependent orientation and must be interpreted as such.

 

Worker durbars are organised where ideas and problems areas are openly sourced and discussed across the organisational strata. Though the communication is highly bureaucratic and formal the durbars are occasions where open participation and open communication permits the free discussion of ideas and suggestions for solutions.

 

The changes are expected to be fully implemented by 2001.

 

Transformation from public sector to the private sector ownership is more often that not identified with trimming of employee levels. That scenario is being enacted at the change-taking place at the Ghana Commercial Bank. The bank exists in fairly viable environment for successful commercial banking. The commercial banking environment is fairly competitive with several efficiently run banks offering nation wide commercial banking. In the larger towns and cities regional branches of international banks, offer stiff competition to the Ghana Commercial Bank (GCB -hitherto-). To enable the bank to compete effectively an important aspect of the change focuses on organisation culture change that among other things should inculcate in staff better customer relations as an important element in attracting and retaining customers.

 

 

3 The Ghana Post Company Limited

The Ghana Post has been in existence since 1854; development of the Postal Services took off after World War II. Until then the Post and Telecommunication (P&T) Corporation of which Postal forms a part was a department of the Ghana Civil Service. The P&T Department became a corporation in November 1974 with the promulgation of NRC decree 311 of January 1974, which has gone through the following changes: -

NRC Decree Amendment 336, June 1975; SMC Decree 70, January 1977; PNDC Law 202, January 1988; Act 505, August 1995. The Decree of Incorporation enjoined the Corporation among other objectives: - to operate postal services internally and externally; to operate National and International telecommunication services; to operate on sound commercial lines.

 

As part of the Second Telecommunication Projects, Government accepted a proposal to separate the Posts from the Telecommunications and to restructure both entities with a view to:

(i) Stimulating foreign investment in both divisions. (ii) Expanding and improving their network to provide viable commercial ventures. (iii) Improving the managerial capacities to ensure effective and efficient operations and maintenance of their facilities and services. Lexcroft Consultancy, a private corporate consultant firm, conducted an initial organisational independence viability research. Based on their recommendations the government decided to separate the post from the telecommunications unit.

Presently Ghana Post is a limited liability with 100% ownership by the Government of Ghana. On December 13, 1993 the Telecommunication Act 401 of Parliament established a former division of the corporation as a telecommunication entity under the company’s code. On August 31, 1995 the Ghana Postal Services Corporation was established with the enactment of Act 505 to operate as a separate and independent entity and provide postal and allied services. 

 

The Ghana Post has 2,300 employees nationwide, runs 327 post offices and operates 700 postal agencies.

 

The Ghana Post was formally a public service organisation; now authority has been given to the board of directors to govern with a set aim of operating profitably. This transformation effectively changes the fundamentals of Postal services operations and management process. Unlike the former public sector organisation era, the present Postal organisation is focused on self-sustenance through efficient operations and constantly innovative service products. As a limited liability company, the organisation now has a responsibility for accountability, good corporate structure, the strengthening of the authority of the Board of Directors, and the need to operate on a sound financial basis. This led to the Ghana Post being restructured as a limited liability company, to operate along commercial lines.

 

The functional activities of Ghana Post Limited are to provide postal services by operating a postal system in Ghana in accordance with the laws and international obligations of Ghana. These functional activities revolve around: -

(a) The provision of postal services

(b) The provision of courier services

(c) The provision of services by means of which money may be remitted through Money Order, Postal Order, Post Giro and other financial instruments available through the post.

(d) Provision of Philately services.

(e) Provide agency services for other government bodies or any other interested party

(f) Provide in the parts of Post Offices that are open to the public (whether for the transaction of postal business or otherwise) such other services as may conveniently be provided there.

(g) Appoint agents for the purpose of giving effect to any or all of the functions of Ghana Post.

 

In addition to this broad outline of functional activities, the services of the post can be further detailed and elaborated in terms of 1. Letter Post Services: the Ghana Post is responsible for the collection and safe delivery of all letters to almost anywhere in the world. Letters are categorised as airmails, aerogramme, (while both airmails and aerogramme are for international mails, the aerogramme is a pre-paid, folded, no-content holding air sheet), registered mails, printed matter and post cards. In addition letter post services include small packets, articles for the blind and economy air/surface air lifted (SAL). In addition to these there are special services that include 'express items' (delivered in the speediest manner possible), 'advice of delivery' (a means by which the sender can confirm that the mail has been delivered to the addressee.) and 'franking letters' (which are prepaid letters which do not need postage stamps.)

 

There are also 2. Delivery services, which consist of the letter box, whereby a person rents a private letterbox accessible to the renter at all times at a post office premise. There are private mailbags services, which offer additional security in the delivery of correspondence. The Post Restante, this is a sort of delivery service where a person can call for a letter addressed to such a person at any post office location. To ensure that delivery is made to the proper person, the recipient must be able to state from what place or district letters are expected and to produce some form of confirmed identity.

 

There are in addition three other services offered by the organisation, these are registering newspapers, which is a service whereby newspapers are registered at the Ghana Post Headquarters in Accra, newspapers, which are registered, enjoy reduced courier rates. This is a service available only to newspapers published in Ghana. The Post shop is a self-contained stationery products shops within selected main Post Offices. The Cassette Post is a form of message on tapes, where individuals who cannot write or want to send voice messages, can record their messages at the post offices and the tapes are then properly packaged and posted.

 

4. The Business Reply service is a type of service under which a person who wishes to obtain a reply from a client without inconveniencing the recipient with paying postage, may enclose in the communication an unstamped reply card, envelope etc. The clients post their items in the ordinary way, but without a stamp; and the addressee will pay the charges on all the replies received.

The International Business Reply Service (IBRS) is a means for authorised senders to prepay in advance reply items posted by their respondents residing abroad. Senders are required to set a period during which the addressee must receive the mail.

 

5. The Bureau Fax is an international facsimile service governed by bilateral agreements and operated between public bureaux on the one hand and between these public bureaux and subscriber stations on the other.

 

6. The Ghana Post performs Agency Service for organisations, groups, and individuals. For example passport forms are sold at the counter on behalf of the Ministry of Foreign Affairs for a commission.

 

7. Periodicals are sold at some designated post offices.

 

8. Remittance Services of the post provide a convenient means of transmitting sums of money by post. The services embrace two types of remittances: The Postal Order, and the Money Order. This in a way are identical forms of purchasing certificates for enabling the sending of money by post, the purchaser pays a commission on the order and the recipient receives a certificate that can be exchanged for cash at a post office.

 

9. The Expedited Mail Services (EMS) was commissioned in April 1990 with the aim of providing the quickest postal services by physical means, or to provide fast courier services to contract customers and the general public.

The EMS provides two types of services; these are the On Demand and Contract Services. On Demand items are accepted from the public without any formal contractual agreement. The items need only be presented at the counter. The Contract service items are accepted on the basis of a contract between the sender and EMS. This service is mainly patronised by firms that post important documents and packets that need immediate delivery. The EMS also offers other services like: i.) Pick-up-collection and Delivery Services, and ii.) Special Distribution on contract basis. Since there are other courier services all these services are offered at competitive rates, and an effort is made to tailor services to customer needs.

 

10. Philately Service: Philately is the art of collecting stamps without using them for posting letters. Postal Administrations issue two types of postage stamps. These are the Definitive Postage Stamps and the Commemorative or Special Stamps. Definitive stamps are used for normal postage. Definitive stamps are normally issued to be in existence for five years. Commemorative postage stamps or Special stamps are however, issued to commemorate special occasions, events, anniversaries, etc. These stamps reflect the image of the country, depicting, for instance, sculptures and handicrafts, which are part of the cultural wealth, or the flora or fauna of the country.

 

The core business of the post is conveyance of mail, bulk goods, i.e. printed matter. They also offer financial services through postal and money order, money transfer. Other agency services like offering counter services to other organisations such as the Vehicle Examination and Licensing Division of the Department of Vehicle Registration and Licensing of the Ministry of Transport and Communications, through the selling of license forms. Courier services are facilitated in conjunction with Expedited Mail Services. The Post also produces and sells stamps.

 

The mission of the postal services is to provide its domestic and foreign customers in the communication and financial market with prompt, efficient, reliable and secure postal service. The Postal service undertakes its activities through the physical conveyance of all types of mail items as well as cash remittances. It provides Agency and other services at economic but competitive rates with the view to contributing towards the country's vision of realising accelerated growth. The organisation in its determination to fulfil its mission places emphasis on: -

(a) Prompt delivery by reducing waiting time drastically; improve its transmission time, update equipment and facilities constantly, train staff regularly to put the customer first and sanction those who provide poor services.

(b) Competitive rates to ensure reasonable satisfaction of customers and at the same time to ensure cost effective delivery.

(c) Ensure security of both local and foreign mails.

(d) Upholding Post Office values and continuous improvements in performance, and finally, displaying high personal levels of competence, accountability and integrity.

 

The organisation has set itself the vision of being the best postal company in Africa. So far ratings by the Universal Postal Union (UPU) places the Ghana Post third to Tanzania and Kenya in terms of quality of services offered. Despite some problems, efforts have been made to maintain a high standard of service. The organisation is committed to serving the public and providing innovative and quality services in response to changing demands in its operative environment. The Organisation also has set itself the task of expanding its network to provide services commensurate with the needs of its customers. The efficiency and reliability of its operations are constantly being upgraded to better serve the value of its customers.

 

There is a five-year corporate plan, which is annually reviewed; it is this corporate plan that sets the broad outline for management strategy and implementation tactics for the organisation and its sub-systems. Presently the corporate plan is being implemented. The corporate plan is seen as a guide for the organisation from the Board of Directors.

 

 

 

The Ghana Post structurally is hierarchical with formal lines of communication being the preferred lines of communicating. In terms of structural designations, the Post can be considered as consisting of two core divisions there is the Operations concerned with actual mail handling and related issues and the Support Services, which consist of Finance and Administration, Human Resources, Audit, Legal Affairs and General Corporate Affairs. As the organisation structure diagrammatically depicts, the organisation has a fairly complex arrangement of positional responsibilities, apparently the only effective medium for establishing clear lines of responsibility and realising effective performance is through clearly specified and task functional, reporting lines of responsibility. Organisational employees are highly controlled and supervision is visibly done. Every department has a supervisor over each group of workers who ensures that task goals are realised in the most conducive and amiable social environment. Aside these formal patterns of communication within the organisation, the management has established communication flexibility through activities like workers durbars, which are organised every three months. These durbars are gatherings where all employees at a particular location gather to discuss in a free and unhindered atmosphere organisational issues; ideas are resourced from all employees about how to improve existing organisational states, topical problems and their likely solution, among other things. While the organisation tries to meet all worker demands arising from these durbars, capital restriction may at times restrict the extent to which all workers demands are realised.

 

Task is usually assigned to individuals, but projects teams are established from time to time. One such project team formed recently was to deal with the Renewal of Drivers License, which involved teaching staff about the procedure involved in the filling and processing of the new forms. Workers are evaluated through annual performance appraisals and employee performance is linked to Annual Salary Increments.

 

There are general incentives linked to meeting of annual profit targets. Workers are of the opinion that a job has to be challenging and give good salary to be rewarding. While they do agree that work at the Post was challenging enough, they think salaries could be improved and need to be improved. Following the split, the organisation has come down hard on mail theft, new closed circuit television have been installed in the sorting rooms to detect mail theft. This has cut down dramatically on incidences of mail theft or pilfering. Any worker caught stealing is dismissed summarily. During peak mail seasons the organisation usually requires workers who are willing to work overtime. There is generally no recourse to employing temporary workers or casual workers. Generally, there are cordial relations between managers and workers of the organisation.

 

The topical worker complaints management receives has to do with calls for salary increments, this in the light of the continuing depreciation of the local currency the Cedi is reasonable due to the continuing fall in the real value of money and the consequent decreasing purchasing power, but the organisation is incapable of increasing salaries to match the rate of depreciation. The solution lies with the government establishing the fundamentals of appropriate policy development and implementation in an economy overly dependent on basic mineral, agro-raw material exports.

 

The workers union negotiates salaries based on the government established minimum wage and the organisation's operational efficiency and income generating capacity. Following the split between the Post and Telecommunications, it was realised that Telecommunication workers earned higher salaries than Postal workers, but as the management rationalised that was because revenues from the Postal sector were much lower than those generated from the Telecommunications sector. This initially led to the loss of qualified personnel who left to join the Telecommunications sector or other organisations. In response to employee loss some sensitive positions had to employ new personnel. The financial administration has been beefed up with a number of highly qualified accountants.

 

While salaries may not be at the desired levels, the organisation provides several incentives to its employees. There is a clinic on location at the head office offering free medical services to employees, all employees have 100% health policy coverage, and there are housing facilities for employees.

 

In the important area of employee training, changes have been introduced to ensure cost efficiency and improve employee quality. Occasionally, the organisation sends out some its personnel for external training. External training refers to training outside the Posts own school whether within or without Ghana. The Ghana Post has also changed the structure and content of its internal training programme for new employees. Cutting down the period of training from 6 months to 4 weeks.

 

When aspects of the organisation's task and general environment change, the organisation has to respond to those changes, the difficulty the Ghana Post faces with regards to negative environmental influences, its response reactive capacity is severely restricted by internal organisational restrictions. In effect it is unable to respond effectively to environmental influences due to imposed internal constraints. The rates and charges (these are the prices charged for stamps and mail deliveries) remain unaltered while cost of operations continues to increase as a result of the depreciating value of the Cedi. The organisation's management while desiring to pass on full cost of postal services, which cost increase with depreciating local currency, cannot pass on these costs, and thus like organisations in the manufacturing sector, in the short run must absorb these costs, which lead to shrinking profit levels and undermine full realisation of expectations.

 

The organisation is of the opinion that yearly projections are frequently affected by the fluctuating local currency that is constantly depreciating against the major foreign currencies. The effect of this has reflected in rising local costs of equipment, vehicles, cost of foreign transportation. These are regular costs incurred in the cost of postal work, and significant departures from projected costs can cause disarray in financial projections and estimations, making organisational budgets ridiculous. More relevantly it weakens the expected results of change in the organisation. Government determines postal tariffs through legislative instruments. Passing parliamentary legislation to enable changes in charges makes the organisation incapable of altering prices to keep up with external developments and costs of services the organisation uses in its activities. Presently, following persistent efforts to change this dependence on parliament for price changes, the government has responded; a regulatory body is being set by the government to take responsibility for determining and reviewing tariffs and operational regulations for the Post and Courier service providers in Ghana.

 

However planned organisational changes have been engaged in proactive, internally driven change to enable a more effective organisation. In the Operations department where task activities involve mail processing and deliveries, the focus is on meeting the set time schedules. (Activities at the Operations department involve counter services, where postal products are made available to the public; sorting of mails; and mail deliveries). Meeting this time schedules is one of the means the organisation measures and ascertains its operational efficiency. Presently mails destined for the regional capitals are sorted and delivered within 24 hours, while 48 hours is the normal delivery time for outlying areas. The organisation has recently changed its fleet of vehicles. However to make effective delivery in scheduled time, mails are carried on other vehicles not belonging to the organisation. This is a contractual arrangement that ensures safe and efficient mail delivery. In non-profitable geographical areas of operation, where the volume of mail traffic is low, the organisation has changed its former practices of owning post offices by resorting to commissioned agents who are contracted to operate as postal agencies. Other changes introduced at operations include hitherto non-existing activities like door to door to deliveries in the well-planned areas of the City of Accra. Where mails are delivered by scooters, motorbikes and three wheeled rugged terrain motorbikes (with better stability and high volume capacity) and bicycles.

 

In the competitive courier services market, the organisation faces challenges from other courier service providers like FEDEX, UPS, and DHL in international mail deliveries. The organisation is seeking to increase the number of institutional and corporate customers through high quality service and competitive pricing for services rendered. While in the area of local courier deliveries the Ghana Post is unarguably the best compared to DHL the other local courier service, in the international arena stiff competition exists from global couriers. The international courier service is lucrative and the organisation's response to competitive triggers for change has been to engage in marketing the quality and reliability of its international courier services.

 

The Post also undertakes in intensive marketing to create public awareness of the range of products it offers and seek to encourage public participation in those products. Focus has been in increasing public awareness of the range of services over and above selling stamps and posting letters that the post offers. Core marketing activities encompass trade promotions, grants and award ceremonies that enhance public relations at the same time creating awareness of the Post's range of activities, and new product promotional drives.

 

Technology wise, there is a newly introduced local area network at its headquarters, enabling full and easy access to relevant information from any desktop within the organisation's premises. A wider area network is also in the process of being facilitated nationwide, enabling all postal workers to be connected and access all organisational data as and when the need arises. It is expected that when the wider area network is activated it will improve mail tracking via computers. It will also facilitate easy and quick transfer of money from any postal location. The counters of all the large post offices are being computerised. Trace and tracking systems are available for all Expedited Mail Services (EMS) deliveries.

 

The Post has also began offering new services, it has opened internet cafés at some locations in Accra and is putting more such internet accessing localities at its city locations nationwide. In the medium term the organisation intends to become an Internet Service Provider. Presently its access to the World Wide Web and the Internet is via Africa online.

 

Some departments complained about problems with securing vehicles for official duty from the vehicle pool.

 

The organisation intends to improve on delivery times to ensuring that all mails reach their destination nationwide in twenty-four hours, through an overnight delivery strategy being experimented with.

 

On the whole Ghana Post is a profitable organisation, from 1996 to date the organisation has operated profitably, with annual profits increasing progressively in real terms. Unlike other organisations that make their financial projections in the more stable dollar, the Ghana Post makes its annual financial projections in Cedis.

 

 

3 The Ghana Civil Aviation Authority

The Ghana Civil Aviation Authority was established by PNDC Law 151 of May 16, 1986. As the regulatory agency of Government on air transportation in Ghana, however its origins dates back to 1918.

 

In 1953 the Civil Aviation Unit was granted Departmental status headed by a Director of Civil Aviation. In 1956 it became autonomous under the Ministry of Roads and Transport.

 

The Ghana Civil Aviation Authority (GCAA-hitherto-) has a broad responsibility for the provision, operation and maintenance of airfields and related facilities for aviation in Ghana. The provision of air navigation services, the licensing of aircraft and their personnel operating within its jurisdiction. And the regulation of the air transport industry in Ghana. It is also responsible for the securing of a sound development of the civil air transport industry, co-ordination of the activities of the various airlines companies operating in Ghana and advising Government on matters concerning civil aviation generally.

 

Organisation structure: The governing body of GCAA is a Board and Managerial and Admnistrative Authority is organised into two broad divisions (Technical and Finance/Administration) under a Director-General assisted by two Deputy Directors-General who head the divisions

 

From 1980 to 1991 the organisation went through a transformational process that culminated in the organisation becoming classified as a State Owned Enterprise (SOE); this implies that the organisation has been designated by legislature as an independent commercial organisation supporting itself from resources generated from its own operational efficiency. In 1994 new directors were employed.

 

Concurrent with this high-level management changes began the decoupling of Air regulations and Airport Company. Air Safety Regulations regulates air safety and Airport Company manages the Airports and Airstrips of Ghana. This separation between Air Regulations and Airport Management reflects trends in other places such as Britain where Airport Management is separated into the United Kingdom Civil Aviation Authority, responsible for air regulations and the British Airport Authority responsible for airport management. The full realisation of the decoupling exercise, which will effectively separate the two companies, is being carried out through the assistance of external consultants and is expected to be completed in December 2001. The need for expatriate consultants is mediated on the grounds of the need for qualified and knowledgeable expertise with the necessary experiential base, which led to the contracting of British consultants from British Airports Authority.

 

The organisation which is government owned has a corporate plan and is profitably managed with a goal of sustainable profitability while offering services comparable to any other airport in the world. In lieu of this the organisation has widened its profit making avenues through innovative developments and expansion projects. The Airport Company Limited is projected to takeover the core job of the Civil Aviation.

 

The organisation has a bureaucratic structure; all major decisions are taken at higher management levels and passed down for implementation. Employees are highly controlled and monitored to ensure that expected performance levels are attained. Persons in superior positions are held accountable for effective performance outcomes in their areas of responsibility.

 

There have been changes in organisational structure. In 1994, the organisation was restructured, with the assistance of external consultants. New managerial positions were created and qualified personnel employed to fill in existing and new positions requiring new personnel. At the same time restructuring resulted in a cutting back on overall employee numbers and the outsourcing of certain basic tasks. Among other things new accounting procedures were introduced. A new Project Department has been created and the Director of Engineering moved to head that division, the position within the organisation's structure is a deputy director position, and the former director of engineering has made the appropriate complaints for the position's upgrading to its former status, but nothing has been done about it yet.

 

Several new managers were employed in response to a need for more qualified personnel to manage key positions. In addition new employees with the requisite qualifications filled higher management positions of directors. Of the organisations twelve departments all but the Air Traffic Control has newly employed directors. High academic and professional qualifications were mandated as necessary requirements for certain strategic positions as well as experiential background and exposure, since there were no competent personnel within the organisation at the time who could competitively fit in the slots, new managerial recruits filled the positions. The existing organisational culture and covert resistance from the 'old guards' to the new, younger employees made it difficult initially for the new managers to gain acceptance but with time normality was restored. Acceptance of new managers was also quickened by the fact that the organisation was in dire need of qualified personnel to improve its management, in the light of this awareness any initial obstacles to gaining acceptance was quickly cleared. To date there has been no major disruptive conflicts.

 

The organisation encourages its management to constantly come up with innovative ideas for implementation consideration. There is a cordial management-employee relation. To ensure that workers and management share similar perspectives on core strategies, staff forums are organised where all employees and managers meet to discuss topical issues. Emphasise is on free expression on any issue of pertinence to the organisation or worker. Employees are encouraged to be forthcoming with new ideas and innovative concepts that will enhance profitable stance of the organisation. These staff forums are held every quarter.

 

The main emergent problem has been salary disparity. The only industrial action was a strike by Air Traffic Controllers who wanted to receive the same salary as their counterparts working in airports abroad, but this action did not receive organisational wide support and was considered myopic by other workers not in traffic control. The issue was amicably resolved however. However, it is the general opinion that salaries must be improved to be commensurate with those of other similar organisations. Adequacy of salaries or remunerations is a topical problem organisation wide. It seems that most employees have the notion that the Civil Aviation by dint of the international aspect of its Airport Management activity should pay very high salaries. The organisation however has in place several incentive schemes to complement salaries. There is a total medical coverage for all employees and their nuclear families. All employees have free lunches. Several loan facilities exist, accessible to all employees including car and motorbike loans. Loans are given according to one's salary that determines the ability for payback.

 

All workers are provided with accommodation or housing loans. The organisation has its own bungalows and flats, but where a person cannot find such accommodation, allowance is made to enable adequate accommodation elsewhere.

 

Courses are organised externally for knowledge upgrading, the frequency and quality of these courses has increased with the transformation of the organisation from a publicly owned subvented organisation to self-financing SOE. Mainly the need for highly qualified personnel at all levels of its various sub-systems cannot be underestimated for efficient performance in Airport Administration and Air Regulation. In response to this, personnel training have been improved through internal training and external training. Presently the Human Resources Department is running a course on Carrier Development, being conducted by external agencies for all Human Resources Management personnel. For other departments and other needs, for example Air Services Department, there is an Engineering School where workers in that section are trained. Apart from this internal school, engineers are trained abroad as well as in local institutions as a particular task qualification merits. Certain job areas for example air traffic controllers have per necessity to be trained abroad. For others such as Human Resources and Accounting staff, it is accepted that there are enough resources and enough qualified institutions nationally to obtain such training in Ghana. 

 

Because of the cost involved external training has to receive approval from the Board of Directors. When the board for external training approves a person, the individual's performance is monitored for excellence in performance. The institution abroad is required to send interim academic assessment reports to the organisation. If an individual displays consistent incapability to cope with the course abroad such a person is recalled.

 

Annual targets at various levels are set, which the organisation generally aspires to meet and encourages maximum output from all its employees to meet employee performance goals. Employees’ performances are appraised annually. While performances are appraised they are not linked to salaries. To motivate workers several incentives schemes exist for workers.

 

On the whole workers have responded to change with caution, since the change initially led to re-deployment and cut back of redundant labour. There is a general unease among lower level workers about loss of their jobs. The organisation has also resorted to outsourcing some labouring tasks such as cleaning and ground maintenance.

 

In the area of technological adaptation, for administrative support and managerial support systems, extensive computerisation and local area networking of the organisation has already taken place. The most common problems the organisation faces with regards to changes in technological support systems for administrative work are complaints about logistical provisions, which among other things imply a need for more computers.

 

The other topical problem is office space, for managers some persons prefer to have their own offices but have had to be paired. However efforts are underway to build additional office space, some of which are already completed.

 

Infrastructure developments at the Kotoka International Airport, features significantly in change activities of the GCAA. The airport, formerly the Accra International Airport, was turned to civil use in 1946, when the then Royal Air force pulled out. The International Airport, which is classified as an “A” class, or "Category 9" Airport according to International Civil Aviation Organisation (ICAO) standard is situated at an area five nautical miles North of the city of Accra. Since the commissioning of the original terminal building in 1969, the airport had not undergone any major developments until in 1991, when in preparation for the Non-Aligned Movement (NAM) Ministerial Conference held in Accra in 1991, a refurbishment of the terminal building and the technical (tower) block was given a facelift. An additional car park was also constructed on the landside. The baggage hall was also refurbished then, the construction of a proper transit lounge has long been considered (and is in the process of being constructed). The runway has been rehabilitated and strengthened. This were all part of the phase 1 of the airport Master plan revision and updating, undertaken by Messrs Siemens Plessey Radar Ltd. This phase 1 included a major rehabilitation and provision of new facilities. These included an expansion and total refurbishment of the Arrival/Immigration Hall. In the terminal building new X-ray baggage screening security equipment were provided, while automatic message switching equipment and other Air Traffic Services equipment had been installed in the Tower block as part of phase 1. New Navigational aids provided include a DVOR (in place of the old VOR) and a DME.

 

Presently the organisation has self negotiated and contracted a 74 million dollar loan for airport expansion developments, which is under Phase 2 of the airport re-modelling of the terminal building, passenger piers (fingers) and the apron to create more parking space for aircraft, passenger check-in/check-out areas and public waiting areas are currently being constructed. The Swedish construction firm Skanska is constructing an expansion of the arrivals and departures halls and other constructional aspects of Phase 2. Another structural development has been an additional office block. Infrastructure provisions, such as the new office block have created needed room for employees and managers.

 

It is the organisation's expectation that with improvements in infrastructure provisions, user agencies of its facilities will increase. The organisation generates incomes from its activities and pays government dividends and taxes.

 

7-2 Interview at the State Owned Enterprises Commission (SEC)

State Owned Enterprises (SOEs) are enterprises that are fully (100%) owned by the Government of Ghana and/or in which government has 100% management control.

 

As at 1987 there were 324 of such State Owned Enterprises, these have been divested till there are only 181 of them left. These 181 have their management under government control. Apart from 100% ownership government may also have majority share, i.e., share values over 51% to 99% in an organisation or minority shareholdings of less than 50%, all these are considered as State Owned Enterprises.

 

SOEs future

The State Owned Enterprises (hitherto referred to as SOEs) reform programme, has as its core objective re-orienting the public sector to be more effective through drastic reform through three significant activity components: -

1. Divestiture

2. Restructuring

3. Group of SOEs under the performance monitoring and evaluation system.

 

The government's policy is to strengthen the private sector, by removing the artificial strength that State Owned organisations exercise over non-subvented private sector manufacturing and non-manufacturing organisations, by enabling a uniform playing field for all organisations to exist in. The burden of government supporting non-performing industries and organisations has been a drain on government resources. In response to this waste of government's resources government decided on extensive divestiture of the majority State Owned organisations. This exercise is being carried out under the Divestiture Implementation Programme. Divestiture of State Owned organisations is based on a basic assumption that Government has no business in doing business. Government's main preoccupation is thus enabling the legislative and regulatory environment within which the private sector can operate most effectively. Within this established setting government can then focus on effective tax collection.

 

Among other reasons one reason for extensive privatisation through divestiture is to ensure that there is an infusion of efficiency through exposure to competitiveness even among those State Owned organisations not divested, otherwise referred to as SOEs. Divestiture in an open economy, unbundled the natural monopolies that protectionist laws enabled former State Owned organisations that owe their existence to state support, and infusing efficiency into the operations of these industries and organisations. Enabling an open economic environment implies the possibility of competitors entering to engage in similar productive activities forcing passive organisations formerly dependent on Government subvention to maximise their capabilities and become profitable or fold up.

 

However, it is also Government's opinion that some organisations for strategic reasons must remain publicly owned. The SOEs are currently under minimal Government monitoring but most of them are being readied for divestiture.

 

The performance monitoring and performance evaluation system covers all of the 43 organisations presently classified as SOEs under the oversight office of State Enterprises Commission. With regards to the future of the SOEs the answer basically lies in their basic functions. On the one hand, is the awareness that the State Enterprises Commission (SEC) is monitoring the performance of SOEs which are all presently on their own, operating as profit making and self-sustaining organisations, in order to make appropriate recommendations to Government as to whether they should be divested or held as Government owned profit making organisations.

 

The Performance Evaluation and Monitoring system is in a way of speaking a holding strategy for strengthening the SOEs whether they eventually remain under Government control or are divested. Its aim is to ensure that all State Owned organisations become efficient. Since 1993 an action programme has been in place to make all SOEs have a resemblance to private sector organisations. An Act of Parliament was enacted and passed to put all SOEs under the Companies Code. The effort to give corporate structure to the SOEs is a major step in making them assume the operational outlook of private sector organisations (and hopefully become operationally as effective as private sector organisations) guided by the companies code.

 

While some opinions hold the view that all SOEs should be divested, residual considerations like the management and monitoring of Government portfolios in partly divested organisations highlights the variations in divestiture. Divestiture could be total where Government relinquishes all holds of the divested organisation either through sales or liquidation. Divestiture could also be partial where government still maintains some shares in the divested organisation, or it could be a shared management arrangement with a non-governmental management concern where government retains all its original shares.

 

Presently there is a programme in execution to clearly categorise existing SOEs on the basis of whether these organisations are: - i.) Fully commercialised, ii.) Partly subvented or iii.) Fully subvented. Commercialised and partly subvented will eventually qualify to be referred to as SOEs.

 

The eventual fate of the SOEs is that they will not only be limited liability concerns but also limited to specific sectors of the economic where their role will be needed.

 

Presently the enterprises constituting SOEs are found in all sectors of the economy, such as: - Mining, Manufacturing, Services, Agriculture, Culture, and Government Ministries.

 

Categories of SOEs

Financial Sector

1. Ghana Commercial Bank  -60% government shares divested.

2. Social Security Bank

3. Ghana Supply Commission

 

Ministry of Roads and Transport

4. Ghana Civil Aviation Authority

5. Ghana Ports and Harbours Authority

6. Ghana Railways Company

7. OSA Transport Company

8. City Express Company

9. Ghana Highways Authority

10. Volta Lake Transport Company

 

Ministry of Works and Housing

11. Tema Development Company

12. State Housing Company

13. Ghana Water Company

14. Community Water and Sanitation Agency

 

Ministry of Communication

15. Ghana Broadcasting Corporation

16. Graphic Group of Companies

17. New Times Company

18. Ghana News Agency

 

Ministry of Mines and Energy

19. Volta River Authority

20. Tema Oil Refinery

21. Electricity Company of Ghana

22. Precious Minerals Marketing Company

 

Ministry of Trade and Industry

23. Ghana National Procurement Company

24. GIHOC Distilleries Company

25. Ghana Trade Fair Company

 

Ministry of Agriculture

26. Ghana Irrigation Development Authority

27. Grains and Legumes Development Board

28. Ghana Food Distribution Company.

 

Commission on National Culture

29. National Theatre

 

Ministry of Trade and Industry

30. Bonsa Tyre Company

 

In conclusion it is to be noted that the list of companies of organisations under SOE keep decreasing as many such organisations have already been divested and therefore no longer under the oversight office of the SEC. The SEC (State Enterprises Commission) is a Government oversight agency for the supervision within existing Government policy for the effective, efficient and profitable performance of the SOEs. The SEC is also responsible for the promotion of corporate governance in the sector organisations and the granting of autonomy, consistent with proven ability of an organisation for accountability and transparency, to the SOEs.

 

The SEC performs this duty through the Performance Monitoring and Evaluation System introduced into the SOEs management in 1987.

 

                                                                                       Chapter 8

 

8-1 Cross-Case Analyses

Financial losses and Profit Reductions

One of the main reasons for changes in the services sector of the SOEs was that while under Ministerial control they were as a sector, inadequately managed. Service quality, as was characteristic of government owned organisations was deplorable, and since they were on the whole sole operators, lacked the competitive push for constant improvement. Being required to be self-sustaining required immediate changes in management strategy and customer service orientation. Urgent changes were also necessitated in marketing, location distribution and extent of availability of services.

 

The SOEs were sensitised through transformational change to take advantage of their unique positioning to maximise their efficiency and realise their full performance potentials and the accruing profit generating capability. Taking full benefit of their established and well-supported preparatory base to assume changed status from recipients of government subsidies to profitable ventures managed for self-sustainability as any other private sector venture. In this regard the SOEs have matured through transformational change to assume their proper stature. (This contentious proposal is contradictory to the argument that organisational change increases the failure potential of organisations reversing them to states of newly established organisations). This is due to the fact that institutional policy changes have led to the withdrawal of government subsidies, which among other things, have led to transformational change, which has brought to focus the awareness that the solid preparatory base enabled these public sector organisations, established over years of state support, to enable these organisations gain stability and operate independently, to become sustainable, to become contributors to state coffers through their tax obligations is being realised in change from state control to self-financing commercial entities. This change in status is commensurate with changes in operational activities, such as the existing commercial orientation of such organisations and the necessary management strategy change that belies this commercialism. Change in these instances is best construed as 'ideal-continuum', leading to organisations (SOEs) with widely expanded services, enhanced and made sustainable through self-sustaining, profit generating orientations.

 

Changes in government economic policies and international financial support sources, led to conditional requirements for economic restructuring for obtaining government loans and credit support have among other things, imposed a requirement for elimination of government subsidies for tentatively profitable state owned organisations. The implication of this trigger for change has been the formation of a government oversight body. The State Enterprise Commission for supervising the operations of the State Owned Enterprises (SOEs), these SOEs are as characterised in the cases studied, viz. The Ghana Civil Aviation Authority, The Ghana Post, The Tema Development Corporation (and the divested Ghana Commercial Bank), totally independent, self sustaining organisations with mainly government ownership.

 

These organisations have had to adapt to new rules and regulations, being required to become more nimble and responsive, to react adeptly to their locally competitive environment, shop for funds in the commercial banking sector, recruit new managers with professional and required technical and academic qualifications and the leadership capabilities to enable them becoming self sustaining.

 

A noticeable effect of self-dependency in these service sector SOEs is that, apart from being unfettered from government dependency, their management boards and managers have more room to exercise their independent creativity freed of government or ministerial impositions to find more lucrative avenues for sustainable operations.

 

Self-dependency has become synonymous with accountability and financial prudence, since organisations could only spend as much as they can generate, without recourse to the government purse for 'bailing-out'.

 

The change from non-profitable state owned to commercial SOEs status has required changes in organisational structures to cope with the requirements of the new designations. The organisations have had to re-arrange their work in a way that enables efficient use of available resources. These organisations (SOEs) inherited cumbersome hierarchically structured organisations. Departments were protected enclaves of personality cults and entrenched cultures of under-performance, which had created norms that had to be radically altered, even as performance oriented structures were being designed and implemented. Organisational transformation invariably also led to changes in an organisation's culture if the whole process was not to be cosmetic but system defining. The introduction of new management practices and orientations with different perspectives was one of the core implementation strategies, but these new managers often came head on with older personnel and had to resolve situation engendered personality conflicts to realise their desired and expected organisational states in their sub-system performance.

 

It is discerned from the cases discussed and analysed above that organisational change in reference to the cases studied can be broadly categorised along a number of dimensions. There is large scale, whole organisational change otherwise referred to as transformational change as is evidenced in the cases of the Tema Development Corporation (TDC), The Ghana Civil Aviation Authority (GCAA), the Ghana Post. These are all SOEs where once legislative changes have been made to unbind these organisations from ministerial control, they have all undergone a process of being controlled by government ministries to becoming independent, commercial, limited liability entities with corporate boards. Fundamentally, these organisations were transformed from non-profitably operated state owned entities to profit oriented independent corporations through transformation of state-owned organisations. This change in sector ownership and management strategy, initiated changes, organisation wide to enable SOEs assumes a corporate image and operational strategy commensurate with their changed status. Basically changing these SOEs from one state of existence to another that is completely different from the original state. Whole scale internally driven organisational changes occurred as well. Transformational change of this kind is associated with large-scale strategic changes along major organisational dimensions. As Marshak (1993) points out transformational change are usually the response to, or anticipation of major changes in an organisation's environment for example privatisation is a change from a state-owned monopoly to a market-driven business.

 

Planned Change

Nadler and Tushman (1986) define planned changes along two dimensions: the scope of the change and temporal positioning of change in relation to external events. The scope of the change expresses whether the change is incremental (change in the reward system etc) or strategic (designing a new strategy), whereas temporal positioning describes whether the change is reactive or anticipatory, as shown in the table below, the authors suggest that once the nature of the change is anticipated along these dimensions the action plan can be developed. Thus incremental change is change that aims to improve the existing systems, policies and procedures. While strategic change is change that aims to establish new systems, policies or procedures.

 

 

Table 2. Types of change (after Nadler and Tushman 1986).

 

Nadler and Tushman (1986) note that 'tuning' occurs in anticipation of external events; for example, if customer organisations start to change their information technology, by adopting network systems in order to transfer information more efficiently, supplier organisations might gradually start to change (tune) their communication systems, in order to be complementary with customer information technologies. Conversely, 'adaptation' type change occurs when organisations react to rather than anticipate their external environments. Incremental change of this type seldom results in change for the entire organisation. However, 'reorientation' involves changing dramatically in anticipation of future events, and 'recreation' is a drastic change in reaction to a major external disruption. Nadler and Tushman (1986) identify these two types of strategic change as transformational changes, which result in an organisation moving to a state that is totally different from what it was before. An organisation may transform itself into a flexible organisation as opposed to a very bureaucratic one because customer complains about bureaucracy in other sectors. Such a change would be of the 'reorientation' type, because the organisation would have a lead-time in which to change itself dramatically in anticipation of future events. Organisational transformation is usually an internally driven process, whereas other types of change often use organisational development techniques that rely largely on externally resourced specialists. In transformation the need for transformational leaders is strongly emphasised. Transformational leadership is based more on leaders shifting the values and beliefs and needs of their followers (Burn 1978).

 

Nadler and Tushman's model of transformational change finds broad similarities in SOEs in this study. However a noted departure from the model is that initial pressure for change is not from within the organisations per se but from the government. However, since these organisations were state-owned. It can very well, loosely be assumed that the government manages them. Stringently, however, SOEs were transformed into profit making organisations with corporate structure and formally on course of being registered as limited liability companies. While formal and legal corporate structure is yet to be effected, these SOEs have all been operationally structured as private owned, profit making organisations and managed as such. While change into SOEs is in reaction to public expectations that these transformation will lead to better management and improvement in effectiveness of these organisations. Consequent management strategy has been in reaction to emerging external environmental triggers for change and internal requirements for adaptations. Thus, while Nadler and Tushman's (1986) model of transformation dissects the transformational process into two activity sets that aid planning for change, in post-implementation change situations, the model is a weak explanatory tool for adequate explanation of progressive change in organisations. Organisations in the SOE categorisation in this study are simultaneously having to make adaptive response to externally triggered need for change from previous states of operational existence to new, changed states of existence. Such organisations have to adapt to respond more effectively to the unrestricted competitive environment that they presently exist in and having to respond adaptively to internally triggered change needs. A model that dichotomises organisational change along clear lines, obscures the identification and operational realisation of fluid dynamism of proactive and reactive responses that occasions organisational change. An adaptive coping response model that incorporates the fluid characteristic nature of organisational change is more representative of the reality of change in organisations. Adaptation in these instances is an anticipatory and reactive planned change activity that anticipates internal and external dependent states and strategically orients the whole organisation and its sub-systems towards desired incremental end states, albeit realised in that subsystem of the organisation in need of making such change.

 

Specific instances of adaptive response characterised by unique environmental and internal factors that trigger change in any particular organisational setting, leading to adjustments in other organisational sub-systems in response to change in any other organisational sub-system, is a preferred definitive representative model of the activities that occasion change in the manufacturing organisations and SOEs in this study.

 

Psychological Leadership in Change Situations

The critical role of leadership during any change situation cannot be underestimated, the literature on change emphasises the significant role of the change champion in the innovative organisation. In transformational organisational change, the role of the leader, who by his role responsibility steers the change implementation into the success zone, assumes psychological proportions over and above the normal managerial role. The transformation process in the organisations studied, especially, the SOEs, indicate among other things that certain difficult decisions related to employees have to be taken, consequently there have been noticeable drop in morale of employees. Certain cutbacks measures, such layoffs, dissolution and integration of sections, employment of new managers, lead to destabilisation of prior existing social networks and norms. The immediate as well as latent resistance that these turbulences cause in the 'normal' organisational states, need to be managed by capable leadership to restore the organisations' employee morale towards positive productive mode. This requires managers to apply leadership roles of forming within the collective mind set a need to reorganise to mobilise for optimum productive benefit, by replacing reluctance due to instability and shattered equanimity with recognition for the renewed capacity and potentials enabled in the changed organisational setting. As earlier noted in the review, leadership operates at two different levels: first, at a psychological level by shaping the values, beliefs and assumptions of employees and, second, at a behavioural level by creating social situations which powerfully communicate significant message to others. In concordance with Lewins three phases model of unfreeze, action and refreeze, it is my observation in the organisations studied that while most workers recognise the need for change, managers need to adopt strong leadership roles at the same time as facilitating workers' empowerment, to enable successful change to be established. In SOEs transformation resulted in changes from familiar states of operations and established norms, and the breaking and distortion of long established fellowship among existing employers as part of the total organisational change. To enable full acceptance of new practices within reorganised structures and untested support systems, requires formidable managerial ability to focus employees on organisational goals as well as creating avenues within daily task performance for former employees to disperse their angst and re-orient to embrace new employees as well as acquire identity with the organisation. Concurrently, not only must new employees not be absorbed into existing work group norms, but they must also not close themselves to older employees whose experiential knowledge is often critical to the efficient task performance of new employees, without their necessarily absorbing those negations of the exiting culture that undermine organisational productivity.

 

Enabling full participation across organisation requires agile management to generate expected benefits of meaningful contribution from all levels of the organisation. Successfully managing this phase of change in strictly hierarchical systems as persisted in former state owned organisations, has meant breaking down socio-psychological barriers entrenched over years of moribund activity in systems that discouraged criticism of officials and colleagues. By managing the organisations' human constituents to assume more open and participatory culture at the action phase, the phase of transformational change that requires the organisation to adopt new modes and practices by disengaging from former practices, organisations have made transition to assume new cultures. This new culture is centred on individual responsibility for task performance, engendered through repeated, created awareness of the critical relevance of each individual role and task performance in enabling the organisational approximating its set goals. Given that invariably change in SOEs is often accompanied by layoffs, role responsibility is no longer latent and assumed but proactively activated by management through leadership behaviour. And managerial encouragement of participation at the lower levels, through activities that increasingly inculcates a sense of collective responsibility for organisational success among all employees. Managers in SOEs, either newly employed or occupying former positions facilitate flexibility in communication structures and reduce intractable adherence to prior existing mind sets by adopting management styles that not only encourage flexible patterns between sub-systems, but by adopting and articulating a willingness to tolerate openness. They create situational provisions within which such changed orientations towards adaptive openness at behavioural levels are realised. In the SOEs, openness is enhanced through rewarding innovative thinking and idea generation for implementation consideration across organisation.

 

In the private sector manufacturing organisations, management facilitates flexibility through durbars and rewards worthy ideas that the organisation implements. Outside experts are resourced for aspects of restructuring management and putting in place communication structures that allow lower level employees a voice in management through such participatory activities as workers’ durbars. These social facilitations in formal systems enable deeper level behavioural change that positively complements shallow level change at wider organisational level to achieve its expected ends.

 

Adaptive Change

Apart from these broad, whole system changes, the SOEs and the private sector manufacturing organisations share in common the implementation of several small to medium-scale changes. Scaling organisational change as large or small is relative and subjective, and is best appreciated from the organisation's own perspective, in that organisations define a change as major or minor depending in the expected impact on the old ways of doing things in the organisation on one hand and the expected bottom line effect on the other hand. Change that changes routinely only some aspect of sub-system activity is small or minor. Change that affects whole organisation is major. A minor change may lead to significant increase in profitability in the short term; a major change may lead to shrinking of profits in the short term. However small changes are more often than not adaptive response to some pressure for change requiring an adaptive response to cope with the change.

 

The manufacturing and services sector in Ghana has had to make adaptations and required changes to enhance system capabilities in recent times to enable sustenance and growth. These adaptations have either been in response to internal needs or external pressures. These pressures come in the form of either restructuring salary administration procedures in response to combined external economic pressures and internal worker demands for review of salaries. They could also be a response to competitors’ activity. Organisations also adapt to shrinking market demands by self-protective measures such as shutting down temporarily, production lines that cannot be operated profitably given existing environmental circumstances. (The Ghana Rubber Company Limited had to close down a production line because of excessive competitive pressures from importers of beach sandals; at the same time it expanded production capacity of another line of products by adding additional production machinery). Organisations in this sector also anticipate internal and external states and plan for changes that would ultimately yield organisational benefit. This occurs through such change activities like introducing new product lines (for example, Latex Foam Rubber Products, has introduced many new products and extensively expanded product ranges that have yielded profitable organisational returns).

 

The range of changes undertaken by these sector organisations vary across various classification categories identified in previous studies, but in their implementation in organisations they are not mutually exclusive. Organisations transformed, may within a specified time span be required to adapt to a variety of internal and external pressures, such organisations may have to be innovative to be industry leaders, and plan to explore new markets and increase production capacity to fulfil increased demands for their products. On the other hand adaptive, reactive, response mechanisms in an organisation may be to retain system balance at existing levels, but incremental change is required to push system balance state to a higher realised level of overall performance. While induced reduced production capacity caused by changes and resulting pressures from an aspect of the environment may occur concurrently with incremental change at another product line favoured, by an aspect of the output environment.

 

A Distillative Analysis of Change

This view of organisations is represented by the distillative analytical model that represents the type of change and the activities that characterise them as observed in the present study.

 

Table 3. A distillative analytical table of change indicating the types of changes undertaken by organisations in the private sector manufacturing and SOEs.

 

The explanatory discussion below, structured within a systems model delineates the factors within and without organisations in the manufacturing and services, public and private sector, that determine change and the responses organisations make in response to those mediating factors.

 

 

Organisations and their Environments

The environment within which organisations operate in Ghana is of particular relevance and the breakdown of the relevant factors in that environment and their effect on organisation outcome states and the consequent organisational response is dominant in discussions with all managers and workers.

 

 

Figure 12a. Explanatory model of types of environments.

 

The task environment of an organisation includes the input and output environments, where resources; material, technological and labour are obtained and products and services sold. The organisations studied here, have all established fairly stable and predictable relationships with the various sub-systems of their organisation-environment boundary. A resource acquisition environment for most manufacturing organisations and service sector organisations is the international environment, raw material and technological acquisition from this environment is mediated solely by an organisation's ability to pay for its purchases. The general environment as Harrison (1987) defines it, includes institutions and conditions that may have infrequent or long-term impacts on the organisation and its task environment, including the economy, the legal system, the state of scientific and technical knowledge, social institutions such as the family, population distribution and composition, the political system, and the national culture within which the organisation operates. In the organisations studied, the economic sub-sector of the general environment is turbulent, unpredictable and industrially unsupportive, intruding its negative effects on organisations and distorting organisations' projections and reducing bottom line profits. Reduction in profits results from the fact that turbulence is adapted to be utilising slack resources to absorb the unintended cost while the organisation eagerly waits for stability to be realised in the economic environment. The ability of industry member association bodies to proactively influence policy making is a collective collative long term strategy in which associations like the Ghana Chamber of Commerce, The Association of Ghana Industries and the umbrella body of the Private Enterprise Foundation intervene advantageously for individual organisations.

 

Facilitating Improved Organisation-Environment

 

 

Figure 12b. Core emergent problems in input and output environments of the manufacturing sector organisations.

 

A stable and predictable input and output environment is organisationally desirous but is often not obtained. Organisations are constantly adapting to enable sustainable operation in response to the demands of their environments. Katz and Kahn (1980), assert that an organisation's success depends heavily on its ability to adapt to its environment or to find a favourable environment in which to operate. In the manufacturing sector in Ghana, change is mainly driven by a need to constantly adapt to changing external developments. As figure 12, above shows there are peculiar topical problems emerging from the two basic environments that organisations operate in. The manufacturing sector has depended on member associations like the Association of Ghana Industries and the Ghana Chambers of Commerce to attempt to influence the legislative and economic policies of government in an attempt to leverage policy making favourably. The establishment of the Private Enterprise Foundation as an umbrella body that articulates the interest of the private sector is a significant development along these lines. The General Manager of the Ghana Rubber Factory noted that while the Association of Ghana Industries was sympathetic to the negative effects of depreciating local currency on industrial productivity there was little that body could do in terms of interfering to change the situation favourably. However the Private Enterprise Foundation (PEF), assumes a more proactive role in economic policy making, meeting twice a month with the Vice-president of Ghana to offer advise on short-term measures and contributing advisory inputs into long term policy proposals for national economic growth. By securing government commitment towards making economic policies that take into serious consideration measures that should boost local industrialisation effort, the PEF has become an effective and important monitoring and influential arm of private sector organisations, in exercising some measure of control over the economic and legislative aspect of the general environment in which organisations operate. As indicated in the literature review, the economic success of a country requires cooperation between government and industry. Government in lieu of the economic recovery and structural adjustment programmes in Ghana has become more sensitised to this awareness, in addition divestiture of state-owned enterprises, places a conditional requirement on government to provide the economic and legislative environment that will enable their successful growth and development. These institutional economic measures apart from creating supportive environments for industry and business locally have an important short-term logic of securing the investment of the purchasers of divested enterprises. The increasingly better communication between government and the private sector through the activities of the PEF enables companies not only to make more accurate annual projections in a more favourable economic environment but also to plan for change and be more proactive through their representative body in policy making discussions.

 

Organisation-International Environment Dependency

There are indications that organisations that resource for their raw materials from an international suppliers market attempt to cope with turbulence in the national economy that affects their resource acquisition capability by strategic orientation to stabilise resource acquisition at suppliers and through foreign exchange resourcing locally. But the adaptive capacity of those coping strategies remains questionable. To adapt, in organisational lingo, implies an adjustment in a positive direction and with beneficial outcomes for the organisation. Coping has implications of assuming a defensive stance to an evolving pressure that enables organisational sustenance, but carries no implied assumption of an improved future state. Depreciating local currency, increasing interest rate and difficulty of obtaining adequate foreign exchange at desirable exchange rates, characterise the economic turbulence occasioning national economy. This turbulences impact negatively on an organisation's ability to finance raw material purchases and make timely purchases. Organisations involved in this study are responding to this external pressures by coping through using generated slack resources to absorb the excess cost infused into production, just to sustain their production in the short term. When it comes to strategic adaptive change to ensure organisational growth in the long run, this coping strategy is woefully inadequate, unless it is balanced by external economic stability in the general environment. Such coping responses, such as calling upon established loyal customer-client relationship between local manufacturing organisations and their regular international suppliers, to obtain their raw materials through 90-day credits are certainly characteristic of short coping strategies since in the long run production costs must be passed on to consumers if the organisation is to obtain financial stability. A realisation that inflationary pressures and weakening currency value of the local currency undermines. In addition, manufacturers are constantly searching the supply market for the cheapest source of high quality raw materials, since 'loyal' customer-client support relationship underlies the flexible credit facilities that the manufacturing sector enjoys from their raw material suppliers it is not sustainable and reliable as a long term resource acquisition strategy.

 

Responding To External Triggers Of Change

The identification of appropriate responses to change triggers has been a key issue for strategic management in organisations. Certain triggers emergent on organisations, intruding from the external environment of an organisation require organisational response to change aspects of the organisation, if the organisation is to sustain its operational capability in the long run. While some effects such as the constant depreciation of the local currency have immediate impact on prices of goods, cost of foreign exchange, salary levels of employees, ability of the organisation to compete, etc. The organisation may be severely handicapped from the full implementation of change measures because all the factors that would enable advantageous implementation are beyond the organisation's control. Thus, salaries no matter how often negotiated may not be enough to satisfy employees, prices cannot be raised to commensurate with the full depreciation value of local currency, any such attempt will push prices beyond competing imported similar products. Failure to fully implement these required changes, however, might imply that the organisation is being cornered by its economic, legislative and resource environment from optimum capability. Manufacturing organisations are at times forced to sell below production price just to remain competitive and by so doing eating into their reserves.

 

Long-term projections in the local currency are rendered nonsensical, requiring some organisations to make their annual financial projections in U.S. dollars. Unfavourable changes like layoffs of workers are also forced by environmental demands that require organisations to cutback on their expenses to remain operational as in the case of Poly Products. These environmental triggers place impositions on organisations to make changes that have only short-term relevance but long-term detrimental net effect on the organisation's growth. The extent to which organisation's can make change either positively or negatively is determined by the environmental supportiveness for profit maximisation and increased patronage of services without incurring ever increasing costs of production.

 

Increased Competition

In the organisations studied, competition assumes various guises, there is competition emerging from the producers of similar products locally, and there is competition from importers of similar products. The latter form of competition has imposed greater demands for agility, especially in the manufacturing sector organisations. The imported products are lower priced than locally produced ones. Thus making local products higher priced than imported varieties. Given the free economy environment within which organisations have to operate, there is little in terms of government support to shield local producers who have, then, to contend with the effects of the impositions of the Free Trade Agreement.

 

Characteristically, response has been the same, there is an initial attempt to increase awareness for local producers through increased advertisement, but since importers also advertise and tend to emphasise the price differences rather than the quality of products, which does not seem to vary much between local and imported varieties, the next course of action is for the local producers to reduce prices, but this is a limited resort for prices can only be reduced so far. The resort to psychological appeal for consumer patronisation of locally produced products, depends on the consuming publics empathising ability with local manufacturers and their products. Conceptually, there is a quaint appeal to this response reaction to competitive pressure from the supply environment. But practically, it has failed in making the expected impact in changes in consumer preference, more so, since many manufacturers still cite unfair competition from importers as a threat to their existence. (It is to be noted that consumers are unusually price sensitive and product choice is more often than not mediated by domestic budget constraint than any sense of patriotism). The last resort is for organisations so affected, is to exert pressure on the government to impose control on importation of goods produced locally, totally defeating the very purpose of open market economy policies. The manufacturing sector are reacting to this external pressure from importers through proactive engagement of the government with an aim to influence policy making by the Private Enterprise Foundation (PEF).

 

Competition is also resulting from changes in what the market demands. Companies in the service sector have to provide faster services, timelier services, manage more effectively, enhance customer care and ensure greater customer satisfaction, if they are not to lose their existing customer base or entice new customers to patronise their service offerings. Since one of the institutional effects of organisations' transformation by change of sector ownership has been the opening of the economic environment for any company to 'open shop' and render services in sectors formerly protected. Decreased costs of operation are also required if one is to compete more effectively. Given an expanded range of available products and wider choices, due to open market policies that facilitate imports, customers are tending to be more selective and demanding, in terms of product quality and variety, and supportive services available.

 

In the manufacturing sector, organisations have had to improve on product quality, price products competitively, create greater product awareness through increased marketing effort and advertisement, gain customer commitment, establish an improved customer support service base, in addition to product sales, and continue to expand their existing market base, while continuing to expand product lines, through continuous product innovation efforts and proactively develop new products. One other way of coping with increased competition is creating friendlier organisational-general public interface by engaging social relevance through social support activities that project a positive organisational image for fundamentally profit-oriented organisations. In all the organisations studied, social commitment over and above their commercial oriented activities has been variously mentioned and qualified.

 

Changes at Employee - Management Interface

All the organisations studied have accepted employees as vested interests in their organisations. Employee training is an unmitigated obligation and it is expensive. Thus most organisations that have invested in employee training desire to retain their employees for the long term. New management practices places employees at the core of the management practice, seeking to ensure that employee needs are approximated as much as organisationally possible. To facilitate this need, and to ensure that employees are not relegated to the outer edges of full organisational involvement. Organisations in the study have in place worker participation schemes that are variously realised. The trade unions are seen, as a representative body for discussing the needs of non-management employees and in all organisations are the body that negotiates with management on behalf of lower level employees on the contents of the collective bargaining agreement, the conditions of services and the provisions of adequate work environment, structures and furnishings.

 

There are regular scheduled workers-management interaction forums that are variously called worker durbars, worker forums etc, these informal gatherings are regularly scheduled and enable an open and unhindered discussion in areas of mutual concern. Organisational issues requiring management attention for improvements, such issues that would normally have escaped management attention are brought up for immediate considerations during these all-comprising organisational forums for immediate attention. Improvements through changes in aspects of the organisation’s sub-systems and management practices for overall organisational benefit, through open discussions between employers, employees and management has emerged from these open forums. In addition they enhance flexibility in communications in the organisation and the weakening of organisational barriers.

 

While there is a preference for clear lines of responsibility and reporting lines in all the organisations studied, bureaucracy is not identical with hierarchical structures. (What one sees emergent in the organisations studied is a blending of easy communication across organisations' sectors and sub-systems and a preference for clear reporting lines and responsibility structures). Clear lines of reporting and responsibility enable effective task execution and problem solution, and removes confusion for task focused employees. In manufacturing organisations task determined and technology mediated requirements impose workers requirements for workers to be organised as teams. These teams are empowered to take full responsibility for daily task execution, though their overall task allocation and designs are imposed from higher management. All information needed to execute tasks are generally made available to work teams and information is constantly upgraded through IT mediated technology that are available organisation wide in virtually all the organisations studied, both in the private sector manufacturing organisations and the SOEs sector organisations, since these information are task related and relevant and are normally required for task execution. (In the SOEs while fully networked systems exist, departments and key positions log in by user identification codes, to ensure that strategic information is accessible to only relevant departments. In effect all the information needed to make effective decisions are accessible at any section of these organisations).

 

The Role of Trade Unions in Facilitating Internal Change

While all organisations that operate with a profit motive put profitability as their fundamental objective, organisations more often than not have to resolve their human factor problems to be able to attain maximum profitability. These human factors related issues are variously addressed in organisations. Predominantly, all organisations emphasise the critical role of the union at the organisation- lower level employees interface. The union represents workers in salary negotiations, collective bargaining agreements, resolving conflicts between management and lower level employees.

 

Some organisational changes require retraining, skill upgrades, technology change adaptation training programmes, external training programmes for middle and senior management personnel, to enhance the performance capability of employees. Aspects of these changes have to be resolved through the trade union to alleviate lower level employee worries and reservations as regards aspects of these changes efforts.

 

Collective bargaining has always been and will remain a significant element in the industrial and services sector of Ghana, because of the strong and still existing viable trade unions influence in the formal employment sector. The role of collective bargaining (refer to case study database for copies of collective bargaining agreements) in approximating expressed workers' interests in their places of employment can hardly be underplayed.

 

In addition, management in many organisations continue to appreciate and increase the relevant role of worker's participation and involvement in their respective organisations and have introduced procedures that enable workers to be more involved in organisational decision-making and management. The Collective Bargaining Agreement (CBA -hitherto-) is the definitional documentation that aggregates in formal terms for execution, the main expectations of management and concerns and needs of employees. In all the cases studied the CBA is referred to as the basic document that referees the management-employee interaction interface in both task and non-task related issues. All parties concerned must renegotiate changes in aspects of organisational activities or organisation’s sub-systems that modify the CBA. Review of the CBA in all organisations occurs every two years, but where core content areas, like salary reviews have to take place more often, which in itself is an adaptive response to cope with the depreciating value of the local currency, then review clauses are negotiated and inserted in the CBA.

 

The Role of Technology

Manufacturing and services are often technology mediated. Thus the effect of technology in full realisation of expected outcome for organisational change cannot be underestimated. For all the organisations in the manufacturing sector, change is often associated with some form of technological adaptation, such as replacing old machinery, introducing new technology to improve product quality and/or range, installation of new product lines, installation of production machinery to increase product/s output.

 

Technology is continually improving and expanding capabilities of organisations in many innovative ways. In some sectors of the economy, adopting newer technology is inevitable if an organisation wants to remain sustainable. In the SOEs, technological adaptation has mainly been to improve efficiency of performance. Wide scale computerisation has been undertaken, and Local Area Networks (LANs) are a force de rigueur. Increased information transfer and rapid information transfer capabilities have been infused by these technological changes, enabling 'geometric growth' improvements in organisational efficiency.

 

In the private sector manufacturing organisations, machinery is the driving force of productive activity and this machinery are constantly being improved. Modern, more efficient machinery, lowers long-term costs of production and enables the production of new lines of products, introducing flexibility in ability to adapt aspects of the production process to match changing consumer taste and enhance product appearance at short notice. This flexibility more than anything in production process has been at the fore of technology adoption in the manufacturing process. Newer machines and computerisation of production, means that newer products and innovative products can be easily and quickly brought into the market to satisfy and attract increased customer demands and increase product appeal. In all the cases studied, regular introduction of new machines to either replace old machinery or increase existing production capability and enhance production range is the norm. In the manufacturing sector the introduction of new machinery has often required the introduction of new production techniques or improvements in existing production practices.

 

The introduction of new technology also requires in addition to expanded production capacity, the introduction of higher quality products. Flexibility enabled by new machinery has enabled customisation of products to unique customer demands in some cases. In some organisations, new machinery has enabled quick change of production lines in order to respond to changing customer demands.

 

To enable maximum application of the full capability of new technology, there has been a required need to update employees technological knowledge and operational efficiency through internal training. Production is organisation centred in the environment studied (the outsourcing of segments of production to external organisation is not commonly practised). Owner acquired machinery to enhance flexibility and agile responsiveness to customer demands is significantly centred on the capabilities within a particular organisation.

 

Quasi Innovation

In the cases studied, some manufacturing sector organisations, it would appear, are always seeking to innovate to stay ahead of the 'pack of competitors' or to occupy new market niches. Newly introduced product ranges and product diversifications drives have been in response to this innovative urge. The innovative need has been driven among other things by open market economic policies that allow the importation of similar products from foreign manufacturers. Local producers have had to change by anticipating consumer tastes and/or create hitherto non-existing product lines, to respond to product type varieties available on the market, due to importation of varieties of locally manufactured products, to retain their customers and enter new market niches. It is also the case that situational and location uniqueness requires certain products to be designed to meet the situational requirements of the local market needs, this also drives innovation in manufacturing organisations. Some of the organisations studied have been successful in this type of change, introducing new products on the local market to meet the specific local needs of a particular consumers’ market.

 

Service sector organisations are equally responsive in creating unique services that meet unique expediency demands of consumers.

 

While imitation occasions some organisational activities, it is hardly enough to enable an organisation retain market leader position, albeit it cannot be eschewed altogether. Customers are exposed to imported as well as locally produced products and service providers, sometimes the choice for preference lies in product design or a product component that can be easily adapted to local needs. And in the competitive environment where high organisation boundary monitoring enable early detection of changes in consumer preferences, many organisations have designed in-built flexibility to their management structures and production technologies to respond effectively accordingly.

 

Training

Training is an important activity in all the organisations studied. Training complements organisational adaptation in some instances by updating employee skills and broadening management knowledge base. The SOEs focus more on management training enabling the equipping of highly qualified management personnel with modern and current management knowledge base to manage their responsibilities more effectively and to execute their tasks in changed organisational situations more efficiently.

 

In the manufacturing sector, the introduction of new machines requires re-training of factory hands to acquire new functional capacities or adapt to new operation modes on the new machinery. In-house training of employees is the norm here. Technicians accompany new machines to ensure adequate familiarisation to the new machines. Supervisors are often given external training at the Management Development and Productivity Training Institute (MDPI) or through other training programmes available at other local institutions.

 

Externally training abroad exists for those who need it, but is mainly for the training of management and persons operating in positions where the required knowledge base must be attained outside the country (for example, air traffic controllers receive their training abroad because locally such training facilities are not available). In the SOEs where such training facilities are more occurring, the cost of such training are borne by the organisation or through support grants meant to improve management and technical staff quality, from foreign sources.

 

Goal Setting

Goal setting used to be a technical mediated activity in most manufacturing sector organisations (most manufacturing sector organisations still see production effectiveness in terms of achieving daily production targets) and only perfunctorily indicated in the services sector. Recent changes in management approaches in the SOEs imply, among other things, that goal setting; individual task performance assessment and evaluation procedures have become important organisational activities.

 

Most major changes in organisations invariably infuse elements of organisational development in attempting to effect change at the deeper level in organisations' human constituents. Thus transformational change involves such core OD activities as goal setting at various levels in the organisation, and concurrent performance evaluation to determine goal approximation. Pragmatism, hitherto, non-existent has been infused even as tasks are more clearly defined and performance targets set at the individual, group and departmental levels. This change has meant that performance is more task relevant and appreciable than was formerly realised.

 

Organisational change and management strategy change often tend to be situational interpreted and in their realisation assume unique organisational characteristics. The exact nature in which employees have responded to certain management strategy changes and the efforts made to diminish the gap between management orientation and employee interpretation through 'clarifying within organisation awareness programmes' have meant a difference between total rejection of management proposal and effective implementation of management proposal organisation wide.

 

Planning for Salary Changes

Planned change is only possible when the organisational anticipates a problem and reacts to it proactively. Since salary and wages negotiation is part of the collective bargaining agreement, this annual salary renegotiation is a response to the depreciating value of the local currency that erodes real value of money or its purchasing power. To prevent worker’s agitation for increased salaries or to remove any tendency towards gross employee dissatisfaction because of inflexible implementation of the collective bargaining agreement, management in the organisations studied have had to insert a wage/salary re-opener clause to enable flexible re-consideration of workers salary on an annual basis to make incremental adjustment to approximate the real purchasing power of money.

 

Empowerment and Flexible Form

In the SOEs organisations, strategic change from ministerial control to self-determinacy, profitability orientation and corporate boards, has meant among other things that management position has an assumed, required performance factor. These organisations have thus structured management positions to be more performance oriented. To ensure that sections under a particular management position are more effective, there has been a clearer definition of sectional/departmental responsibilities. Greater room enabled for each section to be more innovative in achieving their expectations within the general organisational strategy framework. In the case of the Tema Development Corporation and Ghana Post as well as The Ghana Civil Aviation Authority, this has meant that there is greater awareness within and between organisational sub-units of each unit’s sectional output towards the achievement of overall organisational targets.

 

The various sections or sub-units of an organisation are inter-dependent, to foster cooperative climate rather than crippling sub-unit competitiveness. Flexibility is facilitated at higher management level as part of the structural change that accompanied transformational change. This flexibility in establishing mutually supporting departmental goals at higher management levels is practically made possible throughout the organisation by reconfigured sub-unit interaction and exhorted inter-unit supportiveness and inter-dependency at all internal organisational sectional interfaces.

 

Managers at the higher directorate level engage in coalition strategy orientation meetings regularly, and across system activities like workers durbars are organised regularly to ensure that the employees and management appreciate their organisations as organic wholes.

 

Flexibility is encouraged in idea generation, and the sharing of common resources like printers, faxes where applicable subtly reduces assumed sectional differences that are more prejudicial than realistically beneficial. By sharing open organisational networks a sense of control is evident in the strict adherence to lines of hierarchical responsibility, without the imposed bureaucratic impositions of non-task relevant obeisance of classical bureaucratic organisations. Firm and clear lines of control, it would appear makes positional responsibility unambiguous and specified. 

 

TRANSFORMATIONAL LEADERSHIP

Transformational leadership is a form of leadership that occurs when leaders “broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purposes and the missions of the group and when they stir their employees to look beyond their own self- interest for the good of the group” (Bernard Bass, 1990).

 

Transformational leaders have a clear collective vision and most importantly they manage to communicate it effectively to all employees. By acting as role models, they inspire employees to put the good of the whole organisation above self-interest. They also stimulate employees to be more innovative, and they themselves take personal risks and are not afraid to use unconventional (but always ethical) methods in order to achieve the collective vision.

 

In the organisations studied management style most likely as stipulated in another part of the discussion in response to change and instability in the environment had assumed the characteristics of transformational leadership. These management activity types are concordant with management creating room, often in unambiguous terms for collective decision-making and through engaging workers in idea generation. The interesting observation is that hardly any of the organisations studied can be classified according to traditional organisational structuring as being truly flat, especially in the service sector. 

 

Formal lines of communication are indicated in organisational structures.  Within the organisations studied themselves, however, one clearly discerns a clear demarcation between management and other workers, and the mediator role of an active trade union is all evident. It is my observation, that these organisations have become more open and flexible, possibly as a means of improving relations between workers and the trade union on one hand and the management on the other hand. In the interviews conducted, it was clearly expressed that open and unambiguous communications and ease of access to management enables quick transfer of critical information, especially as relates to the organisation’s financial state and its capability to revise upward, workers pays in response to downward fluctuating local currency value and rising inflationary trends. To hold in check workers demands for salary revisions, other provisions etc in response to inflationary trends, the communication between levels within the organisation has to be open and often cutting across the formal lines of communication. In this respect, the complex nature of the relation between internal organisational states responding to external pressures, leads to changing organisational forms as a consequence of adaptive reactions.

 

This form of leadership goes beyond traditional forms of transactional leadership (that typified Ghanaian management style) that emphasised corrective action, mutual exchanges and rewards only when performance expectations were met. Epitropaki (2001) notes, “Transactional leadership relied mainly on centralised control. Managers controlled most activities, telling each person what, when and how to do each task. Transformational leaders, on the other hand, trust their subordinates and leave them space to breathe and grow. In that respect, transformational is a more developmental and constructive form of leadership for both individual employees and the organisation as a whole.”

 

Decision Quality and Implementation

In the private sector manufacturing organisations and the SOEs, managers need to make timely decisions for change processes to continue operationally as planned. Exposed to the vagaries of open economy competitiveness, formerly sheltered SOEs organisations in the study have been required to improve the quality of the management capacities at the administrative and technical levels and to outsource for qualified support knowledge base for effective management of their organisations. Unlike in the period under government subventions, the decision-making processes and the effectiveness of the resultant implemented decisions have become core concerns in these organisations. In all cases, triggers of change from within and without are necessarily immediately addressed, since failure to respond has bottom line financial repercussions.  In addition, the management of these organisations are answerable to corporate boards, and justify their tenure by their evaluated performance.

 

In addition to structural changes in the SOEs, there is evident an emergent organisational culture of involving all organisational participants in major decisions, thus employees at all levels are sensitised to major changes at the planning, pre-implementation stage and any dissent is appreciated early and dealt with. Such that in all the organisations studied, changes within the organisation have not given rise to major resistance to change. Where an implemented change results in unexpected negative outcomes, such as in the example of The Tema Development Corporation's (TDCs) "employee performance related salary fiasco". In redress, the pre-implementation awareness of the relevance of full consideration of the human factor in successful change through pre-implementation sensitisation and educational awareness yielded positive, expected outcome. This is appreciated in both the manufacturing sector organisations and the SOEs.

 

Coordinating Organisational Sub-systems for Effective Performance

SOEs have various units performing different tasks which must be coordinated and integrated at a variety of shared performance interfaces to enable these organisations attain maximum productivity. The efficiency with which transformational change is attained depends on employee motivation, qualification and the rate of freedom (variety of action the action bearer holds). The human activities seem to be in mutual interaction that is directed by co-operation; an action process that involves vertical and horizontal coordination within and across organisation structures. Management activities seek to create an organisational climate of mutual supportiveness and cooperation to minimise the detractive influence of friction. The SOEs cases reveal that management at these organisations engage in a series of well coordinated interface management activities to enable optimum sub-system supportive activity. At the highest level of management; the directors of all departments attend a common management forum regularly, where measurable short term goals are set and execution patterns and sub-system boundary activities are detailed, discussed, and problem areas identified and supportive mechanisms facilitated.

 

To enable optimum problem identification and practical solutions derived, these higher management usually practice open door communication policies and are actually trained to communicate across departmental levels, to enable early identification of not only novelty ideas but also problems relating to sub-system boundary interaction. (In the one topical case at TDC where the Technical Department had bureaucratic departmental structures, this departure from the flexible communication system pertaining in the whole organisation was disturbingly noticeable and frustrating to other departments who had direct interaction to enable their task fulfilment with the technical department. In the same organisation, the inadequacy of the Legal Department, delayed full implementation of new business strategies).

 

In the manufacturing sector organisations, organisations are by designation more compact and focused around the primary production task activity. The supporting sub-system of the administrative machinery are all geared towards facilitating optimum production. However, it is the Chairman or Managing Director in this privately owned organisations that set the tone for the nature of relationship within administration and between administration and the factory floor. In the cases studied, there is a marked preference for open and flexible communication within shop-floor workers, management as well as across-positions. However task is closely supervised in all manufacturing sector organisations to optimise high activity potential and minimise costly production errors. Close supervision is tantamount to high control; control is the expectation of the power in the framework of a hierarchic power system by means of which aims and results are kept in harmony inside a feedback loop.

 

Communication

Hierarchically structured organisations project an image of rigidity, but despite their hierarchical structures, the organisations studied have designed-in flexibility that enables ease of communication between management and employees as the need arises. There is rationality to communication types that characterise the complex negotiations between various individuals, groups and role sets occurring at different levels of the organisation. The extent of in-built flexibility that an organisations accords within and between levels of operations is formally realised as dependent on the functional necessity and rate of cross levels communication necessitated in organisational activities. It is also dependent on the degree of certainty about how to accomplish a given task and or realise a certain goal. In situations of high uncertainty there is a preference towards 'certain and assuring' higher level authority. Hierarchic organisational structures with clearly specified positional responsibilities and performing at levels of pre-determined adequacy are the preferred norm. Private sector organisations have thin management layers while SOEs have thick, multi-layered management levels. However, the preference for hierarchic structures is common to both sectors, hierarchic structures notwithstanding, there is no desire to stunt lower level creativity or idea generation capacity.

 

To optimise the benefits of clear-cut lines of responsibility, role responsibility, and effective supervision, as well as the improved organisation environment that open communication allows, all organisations in the study engage in all employee participative open forums on a regular basis. In the system model of change communication is considered a central formal activity and emphasis is laid on the fact that people are at the core of all change. Change will not take place unless all individuals embrace it. Thus an effective communication system which takes account of all employees view points on any relevant issue of common concern, is more likely to enable managers to communicate change or adaptive response tactics to employees in a way that also enables employees to understand, digest, clarify and participate in the change. The basic communication activities and characteristics as obtains at organisational levels in the cases studied is summarised in figure 12, below.

 

Figure 13. The characteristic types of communication and task related decision making at different organisational levels.

 

8-2 The Distillative Model of Organisational Change

An organisation's total outcome activities can be analogically depicted as ebbs and tides of rising and falling loops of overall outcome states. The basic rhythm that occasions total organisational outcome can be plotted linearly as intersecting loops of rising and falling curves of growth and decline. The peak and abyss of these curves as well as each level of the curve are accumulated indicators of variables that in combination add up to indicate a particular measurable state of the organisation's total well-being. The fluid dynamism of expansion and contraction within the organisation represent different end states, but they are not mutually exclusive, but are inherently linked together as jointly, co-existing states with varying strength and influence at any particular stage of the organisation's operations at any phase of organisational life cycle. There is a recessive combination of the variables that constitute the contraction state of the organisation as the organisation optimises its operational efficiency and gain in the growth variables that combine effectively to indicate organisational expansion which implies higher organisational effectiveness. The dominance of contraction factors implies a decrease in expansion factors. The increase and potency of expansion variables pulls the productivity curve in an upward direction, indicative of growth. The predominance of positively valued variables leads to their combination interactively to yield overall growth effect.

 

There exists at all times in an organisation negligent negative influences associated with contraction state, but their down pull effect during expansion, are generally, effectively overwhelmed by the positively valued expansion indicators. The definable categorical end states of expansion and contraction, are not constantly constituted variable conditions, but themselves are porously contained, such that there is an ongoing intrusion and recession, enabling the exit of non-relevant variables, rendered irrelevant by the organisation's evolving state and the entry of previously undefined variables that have gained currency and introduction as deterministic influences-variables- due to the constantly evolving endogenous and exogenous activity states of the organisation.

 

These variables, hitherto were undefined because their prior existence have had no organisational relevance and consequently were not acknowledged, simply because the existing state of the organisation has not facilitated their relevance in determining the organisations prescient end state. Their non-existence as variables, imply their narrow definition with reference to the organisation in a prior state.  Which clearly indicate that their effects on total organisational operations and outcomes is a consequence of time and extenuating circumstances that render them operative in that particular organisation only within certain situational circumscriptions of relevance. The implication here being that existing relevant factors and variables that constitute the definitive state of the organisation are gradually or cataclysmically rendered redundant and inapplicable and thus eliminated over time. As organisation conditions change over time these factors and variables in modified states gain re-admittance when and where appropriate. New variables are introduced, engendered by the complexity of activities within the organisation or are imported within from the organisation's environment. These new variables or factors upon gaining entry and status as verifiable influences on the organisation's total outcome, combine with prior existing factors or variables and become deterministic influences of the organisation's activities and outcome state(s). While variables that lead to contraction co-exist with variables that lead to expansion and define growth, it is not implied that the specific variables find exact opposite reflections of their dominant determining variables.

 

The organisation’s indicated state of activities does shift upwards or downwards, in major transitional movements that are not in smooth upward or downward continuity from a particular referenced point of progressive growth or regressive decline. Rather, these major transitional shifts are often the result of significant external developments and often significantly modify the existing definitional variables that occasion the organisation's effectiveness. The effect of these major external developments affect whole populations of organisations, and leads to a redefinition of critical determinant variables that interact to determine the organisation's level of operational efficiency at any point, and over prolonged periods, the organisations effectiveness. The transitional shift could lead to overall improvement or expansion state of organisational existence, (an upping of the stakes of critical organisational determinants, which causes a general sustainable increase in productivity, over and above anything possibly attainable in the previously existing state) or generally catalyse major contraction and leading over sustained intervals to a general downward transitional shift. These transitional shift states represent the emergence of "new" defining factors of organisation states in a remarkable manner, such that it brings into operation new variable combinations that effectually determine organisation end states, albeit negatively, requiring a new performance evaluating format to determine the organisation's state of comparatively lowered effectiveness. Organisational states at any new point have as critical influence variables, certain core factors or variables, around which a set of interrelated sub variables combine by natural development of normal organisation productive activity or through management's managing process to realise certain expected and specified ends.

 

The progressive modulation of organisation change does not imply a chaotic impulsive projection of factor variables that create turbulence, (although the possibility is not to be totally discounted in extremely volatile environments, as in organisations approaching cataclysmic collapse, or the complete phasing off procedure that has not allowed adequate time for the crystallisation of existing defined states of organisational operational effectiveness). Since all organisations thrive within contrived, and planned settings, where efforts to maximise yield can be fully approximated. The intrusion of hitherto 'feeble' variables to assume determining importance in organisational states are emergent during internally instigated planned activities that bring to fore new definitive variables, as when in adopting new management policies organisations reorient to focus on new operational mechanisms with an expected aim, that projects new focal areas of primary interest. The intrusive effects of external originating influences on organisational state that have direct operational relevance to organisational outcomes can also cause a rearrangement of core operating determinant variables of the organisation's outcome state. Projecting onto the fore, previously insignificant variables or the introduction of virtually non-existent variables that in combining with other variables determine a new state of organisational effectiveness, higher or lower than a previous state of stable comparability. The organisation is in a constant state of balancing all these variables to attain higher states of operational efficiency or to maintain balance in an already highly attained state of effectiveness. Any state of the organisation is a result of an appropriate or inappropriate combination of all the identifiable component variables of the separate organisation constituents emergent from within and without the organisation and interacting at a common interface to determine existing organisational state. The componential variables are capable of measurable assessment as the organisation reassembles its core components and reorient the relationship among component variables. Which occurs as the organisation engages in planned change, or adapt in response to any trigger of change. The fluidity that characterises organisations in change is best expressed by the maxim that no two states of the organisation are ever the same. As the organisation engages its internal capabilities to readjust to external intrusions to attain a preferred balanced state of existence, it encounters a variety of constantly changing environmentally ingested variables and internally evolved counterparts. Whatever stability occurs in either or both of these environments through proactive or reactive organisational influence adjusts the organisation at a level of balance but unlike any the organisation has existed in hitherto.

 

Figure 14. Synchronous coordination at critical system interfaces to attain balanced organisational states.

 

The organisation can be conceptualised as a complex system in complex synchronous relation with other relevant external systems, in a complex coordinating effort, to enable a balancing between relevant complementary systems, composed of synchronously active subsystems, seeking to find coordinated integrated interactional existence with their boundary systems, that ensure a fit. This is to enable the core systems activities to be mutually sustainable. While a fit is sought, to exploit effectively, boundary systems interaction activity, to enable optimum functioning capability, organisations do not exist in a 'fitted' environmental niche but continually adapt their sub-systems and resource capacities to ensure maximisation of organisational capabilities at the organisational-environment interface. The effective monitoring of external developments in relevant external systems necessitates an adjustable modulation process within a focal organisation's production activity to be responsive to developments in external institutions that may impact an organisation's outcome goals.

 

Figure 15. Measuring the change outcome as effectiveness at variable end states.

 

As figure 15, above indicates, organisational change occurs at different levels of the organisation sub-systems but change can be defined within certain broad organisational factors of structure, human resources, technology and infrastructure/physical environment of the organisation. Within an organisation's sub-systems, performance is configured within specific effectiveness measures that enable comparative assessment of organisations' activities at unit, multi- and combined indicator levels. Frequently, organisational performance is measured at productivity output levels, employee performance, and profitability levels. On the other hand organisational constituents are constantly assessing the organisation from individual and group perspective, in terms of what the organisation as an entity enables them to maximise their contribution to the organisation and increase their commitment to their organisation. Invariably, as an organisation changes, these variable states also undergo evaluative change.

 

The organisation can be conceived of as a conglomeration of defined groupings that seek to realise the organisation's primary goal of making profits from the production process. The groupings that operate within the general organisational framework can be considered as subsystems that seek to promote their interest first and foremost, in achieving their subsystem goals and expectations. Each identifiable entity within the organisation or each sub system has a set of constituent state defining its composition; both human and material resources, that are organised round a well defined internal structuring strategy with a view toward the realisation of that sub system's expectations, which sub-system is organised around a common organisational strategy.

 

The process of task organisation and execution within organisational subsystems gives rise to system-generated variables that have positive and negative values in total organisational end activity of expected outcomes. Detecting these influences and balancing their expression against each other by sustaining positive values while eliminating negative values is an ongoing balancing act of the management process.

 

The nature of task execution within subsystems involve human resources in different categorisations of expertise and task orientation interacting with machinery and an organisation's resources to attain specified goals. In the process of working towards these sub-system goals there is invariably task related interaction with boundary sub-systems with the sole purpose of enabling the sub-system's task performance. Thus a particular sub-system may interact with a boundary sub-system to enable the acquisition of some production resource. The nature of the resource spans a diversified range, from information to enable planning and task performance, to inputs passing in from one sub-system to become essential materials to be processed within another sub-system. In a way the impact of the boundary activity of one sub-system on another sub-system is qualified by the nature of these activities.

 

An organisational sub-system must on its own, attempt to achieve "internal cohesiveness of purpose" in its task performance and role allocation. In role allocation, personnel are assigned to task and role positions, with the dual aim of being capable goal achievers and to integrate their skills with other personnel within the sub-system (primarily) in a non disruptive, directional activity set, which activates a reciprocal response with the basic intent of achieving a sub-system goals, without compromising activities in the engaged boundary sub-system. Task performance implies a need for arranging of task performing procedures to be the application of human knowledge to machinery and existing technology to process whatever passes for input material to be transformed through the productive processes within the sub-system. The resulting process gives rise to end variables of the human-technology interaction, which variables can be categorised as positive or negative in their overall approximation of the desired or set goals within the sub-system. Such sub-system goals must in effect be in synchrony with organisational wide expectancies.

 

The "internal cohesion" referred to above is a purely sub-system descriptive specification that enables the development or establishment of stable states of co-operative task performance. In this state, sub system goals are approximated with maximal cohesiveness of all-participating interests, along specified and well-rehearsed patterns employing the resources available to the sub-system. The unit must per necessity interact with other sub systems to acquire needed information and required resources to facilitate its task activities.

 

The next section of the thesis is the summary of the study findings and recommendations to future researchers.

 

                                  Chapter 9

9-1 Summary of Study Findings and Recommendations for Future Researchers

In conclusion, the initial objective of the study, which was to ascertain the nature of organisational change and adaptive coping activities in the organisations studied and to attempt to develop an explanatory model of those change activities within the context of existing theories of change have been achieved. The organisations indicated in some cases, whole organisational change of planned change type, while in other instances there is only a reactive adaptive response to effect change on a minor scale to enhance existing organisational state. The nature of change activity is situation defined but overall some or all the organisations show similarities in many aspects of change activity and thus interesting cross-case analysis is enabled. The nature of organisation-environment relationship for all the organisations without exception is complex and strongly determining of organisational outcome state. Turbulence in the environment is primarily due to weak general economic state of a developing nation system and the intrusive effects of a weak currency. This supports previous research on the influence of the environment on organisation state. In addition, new insights were gained as to the expression of this organisation-environment relationship and the way organisations respond and steer their organisations to maintain effective operation in the midst of worsening uncertainties. While the samples might be too small and not concentric enough to enable effective generalisation, nevertheless the information obtained and analysed enables an appreciation of the dynamics of change in Ghanaian organisations and definitely serve as a guide for further research in that organisation eco-system. The attempt at giving expanded expression to existing studies on organisational change falls squarely within the choice of research design. Audet J. & d’Amboise G. (2001). Note that, Primarily, research design should allow concurrently for some theory testing and theory building, which implies that both a deductive and an inductive logic are to be followed at different phases of the research. The reason guiding this choice is that the research should be based on previous findings while remaining open to the new information and understanding of the phenomenon that is likely to emerge from the field. Although qualitative research lends itself to both theory testing and generation, a design combining both is not common since such a design would combine flexibility and rigour, two qualities often irreconcilable. Yin is of the view, "good use of theory will help delimit a case study inquiry to its most effective design" (, p. 4). He also points out that, in case study research "theory development as part of the design phase is essential, whether the ensuing case study's purpose is to develop or to test theory" (, p. 27). This contrasts sharply with Eisenhardt's position that "research is begun as close as possible to the ideal of no theory under consideration and no hypotheses to test" (, p. 536). These observations on theory building within the context of research influenced aspects of the present study.

A detailed and well-developed research design provided a firm framework to enable high quality discussion and open that aspect of organisational change research for further work. The flexibility built into the literature review and design on the one hand enabled explorative analysis to enable innovative perspective while ensuring the maintenance of scientific integrity. The guidance enabled by the detailed research design proved invaluable during data collection and analysis, leaving little room for self-doubt, while keeping the research within clearly outlined supportive framework. Enough provision is made in research design and data collection to facilitate new insights on change emergent from the field. This proved rewarding and newly discerned variables departing from existing theoretical references were adequately developed. This is evident in the fact that not all the dispositions on the emergent nature of change in the organisations studied fitted into existing change theoretical frameworks but had to be interpreted in terms of the uniqueness of the study.

The interview process revealed that while interviewees freely expressed themselves on a wide range of organisational issues they hardly expressed themselves using the jargon and lingoes of the organisational theorist or student of organisational behaviour. Interview information had to be checked and rechecked to enable effective categorisation of all the information generated, a demanding and at times frustrating experience, given that the range of the frame of reference is indeed wide for issues of organisational change and adaptation cutting across several levels in each organisation. Certain expectations of the research were not fully met, for instance organisational effectiveness could not be determined to the researcher’s satisfaction in some of the cases studied; in those instances where organisational data was made available to ascertain aspects of organisational effectiveness further collaboration is at best curtailed and limited. In addition change is a process in realisation and an existing state is only a qualified state of representativeness; most management personnel tend to make reference to expected outcome states as against existing state of the organisation. Interestingly, the environment in which these organisations operated provided a powerful and common, all-influencing frame of reference that enabled the identification of common trends and shared worries. As such, the initial worry of the researcher as to the viability of a multi-site research on a phenomenon as complex as organisational change proved irrelevant. The approach enabled a rich and interesting reference frame for comparison and enabling an insight into an existing state on a wider basis than a single case study would have enabled.

 

Organisations are not by designation permanent institutions, much as they would wish to be. They are carefully crafted socio-economic institutions or establishments, technologically powered for the purposes of processing inputs employing structured social segments of organised personnel and equipment for the realisation of specified end purposes, which in the manufacturing and commercialised service organisation is profit making.

 

The key organisational factors altered by any complex change process given existing theoretical development in organisational psychology can be grouped into four general categories; these are the organisation's structure, technology, human processes and internal physical environment. In other words, any change activity affects one or more of these aspects of the organisation.

 

Changes in key organisational activities are realised within functional subsystems where the dynamism that occasions the change is expressed in task realised activity sets. Thus while analysis of change could be undertaken from specific subsystem viewpoints, an inside out revelatory process where the specificities of complex activities are disassembled to enable their proper appreciation from delimited perspectives is preferred with a view towards clarity. This enables elicitation of the factor variables operating in combination to determine through combinatorial processes (that occasion complex processes in dynamic fusion).

 

Within this construct, change is analysed from the perspective of specific activities affecting differently aspects of organisational sub-systems. It is to be noted that since organisations exist as an interlink of subsystems, a change in one component is likely to activate some response in other components. This linkage between subsystems, it has been suggested should be used advantageously, such that a desired change successfully implemented in one of the systems, in its spread effect should be a basis for other successful changes that will permeate the whole organisation.

 

One organisational subsystem that predominates the manufacturing organisation is the production unit and its technology. The effects of technology tended to apply to only those parts of the organisation intimately involved in that technology, typically the production departments. – The defining structure of production in terms of employee-management interaction is sub-system defined and one could not infer such structures in other functional departments such as accounting and marketing or in the organisation as a whole, unless it was very small.

 

Efficiency within subsystems refers to the establishment of internal conditions with regards to human and technological processes that realise optimum utilisation of existing resources within the subsystems. Ultimately the subsystem exists as a constituent part of the organisation working in coordination with other units to realise the whole organisation's internal state of consistency.

 

It was also observed that all organisational subsystems in the organisations studied tended to evolve work performance routines applying processes that will enable the maximal utilisation of resources within existing technological knowledge and management skills, in the particular general or wider environment within which they exist to sustain sub-system survival in a competitive organisational environment, where resources tended to be stretched.

Most often in unitary manufacturing organisations this is realisable at the wider organisational level where all the various sub-system activities converge to yield expected organisational expectancies (or profit + environment awareness goals).

 

In the transformed former state owned organisations such as Ghana Post, there were signs of subsystem competition for resources.

Organisational change of any kind, be it an adaptive response to change triggers emanating from the task or general environment, invariably involves analysing the existing state of the organisation, and determining a desired future state against which change is effected to approximate. Typically, this involves a determination of desired output, the development of task, individual and formal organisation and managements attempt to influence the informal organisation configuration needed to execute that strategy.

 

The organisation's human components often need to establish the internal environments they desire to facilitate the realisation of maximum output. The introduction of novelties, either technological or strategic, must find acceptance within each subsystem and implementation need be based on improving an existing state of performance. The expected improvements must first however find acceptance system wide.

 

The organisation is oft conceptualised as an open system that receives input from its input environment and 'ingests' processed outputs into its output environment. Identifying niches to be occupied as suggested by some scholars in the external environment implies a determined search for potential resources in the external environment, and for such resources to be acquired for promoting the organisations interest and growth potentials. Organisations that are 'internally consistent' are often through no fault of theirs barred from participating in critical external systems relevant to their operational activities. To ensure stable organisational/ environment relationship on any front or boundary there must be a fairly predictable pattern in short and medium term developments that occasion those boundary activities involving such external systems. If the assumption is made that organisations are designed as self serving entities with specified profit end motives, then the rationality of an organisations internal arrangement, is with an aim toward the realisation of this definite profit end, the responsiveness and determined reactions to external organisations is thus within the context of utilising them towards this end.

 

Unarguably, organisations exist in an open system; external environment impacts significantly all organisations in open system dependency with their environments. Organisations do not necessarily need to seek a fit within their external environments, so much as to ensure effective boundary management activities that ensure that organisation internal activities are managed to be synchronous with developments in external systems, such that the organisation maintains a balance between its internal state and external circumstances. The open systems approach establishes an observed pattern of organisational activities that requires constant monitoring of the relevant environments that are related to acquisition of resources and dispensation of processed goods. The organisation's activities must be in synchrony with developments in these environments such that its productive activities are responsive to these essential external environment situations.  The organisation must structure its processes to accommodate changes in these systems and adjust its own internal workings responsively to enable its viable sustenance. This, in a way requires flexible structures of internal organisation that are amenable to the acquisition, processing and adaptation variations and fluctuations in response to evolving external events. (There is therefore a need to access the extent of slack an organisation develops to accommodate sudden unanticipated variations in external systems). It also brings to focus the need to begin to deliberate among organisational constituents the stage at which developments in the external environment systems become the driving force of an organisation management activity due to strong adaptive impositions and response reactions                   .

 

When an organisation experiences intrusion that disrupts normal patterns in its operations, which intrusions may emerge from the external environment, the organisation as pointed out in the study may begin to adapt to accommodate these changes in its external environment that directly impacts its operational activities. Adaptation may also be in response to events occurring outside the organisation's immediate environment, emanating from the general environment, but with enough effect to disrupt the effectiveness of the organisation. Change within organisations, in their structures or activities reduce the reliability of their performance and its accountability thereby increasing the probability of failure. Change however may be worth the risk when the transformation of environmental conditions renders previous organisational strategies and orientations obsolete, and organisation need to avoid total collapse by trying to adapt to new environmental demands. (Tushman and Romanelli, 1985). As Waterman (1987) observes, and is reflected in the studies, somehow, there are organisations that effectively manage change, continuously adapting their bureaucracies, strategies, systems, products and cultures to survive the shock of change and to prosper from the forces that decimate their competition. Adaptation as the cases studied, operationally enable organisational survival as an internal response actuated on the basis of calculated response to an externally developing situation (or an internally mediated response) that could negatively impact the organisation's activities if ignored.

 

Stewart (1991) points out that the nature of the environment in which many organisations are currently operating can be characterised by rapidly changing markets and customer requirements, with increasing complexity in the technologies utilised. To this may be added the negative effects of weak macro-economic effects in an organisations general environment. This turbulent and continuously changing demand is reflected in the different strategies adopted by management to ensure the survival and growth of their organisations.

There are few organisations that can effectively restructure external systems to suit their internal operational needs as they would their own internal organisational structures. Private sector organisations attempt to influence the external economic environment through the Private Enterprise Foundation. Coping, the more common reaction to environmental intrusion requires the ability to continuously redesign the organisational structures to be congruent with its goals and tasks. There are two bases for making adaptive adjustment to respond to external developments so as to improve upon internal operations and improve approximation of set goals. Management needs to pay more attention to the specific problem area. In a process labelled "problem sensing" (Kiesler and Sproull, 1982). 

                  

Crisis often lead to stress within the organisation and a focusing of attention on the source of crisis. (Jamis & Mann, 1977; Lazarus & Folkman, 1984). The question may be posed, what is the exact nature and type of environmental change(s) that warrants drastic change within the organisation to adapt to these external developments so as to ensure long-term sustenance? As has been pointed out in the studies, it is not just enough to characterise a situation as a crisis, but one needs to equate it with an identifiable downward trend in an organisation's activities. In effect while different subsystems may reflect variations in degree of flexibility to adapt to change, the general organisational policy should be one predisposed to malleability in its activities. The organisations internal activities takes into consideration the effects of systems beyond the immediate, direct manipulation of the organisation. To enable coping with external developments, organisations must coordinate internal activities to be in synchrony with these external developments. Organisation heads have to contend constantly with how to change the organisation in response to crisis arising from technological and social changes both in the external environment and from situations and needs arising from within the organisation. They have to cope with competition and other forces from other organisations, regulatory agencies, with pressures from within the organisation such as trade union activity and demands, and unavoidably, their own gradual evolving over time, all these require at certain stages dramatic reorientations in structure and processes. Invariably, all organisational systems change and evolve in response to internal and external forces or pressures, the implication being that to obtain an adequate meaning of issues arising in an organisational context from a psychological perspective, there is the need to acknowledge the concept of total systems interacting with complex environments.

 

Change and adaptation is towards enabling more effective organisations. The effectiveness of an organisation is best defined in terms of systems level criteria. Acknowledging that every system has multiple functions and also exists within an environment that provides unpredictable inputs, systems effectiveness can be defined as its capacity to survive, adapt, maintain itself, and grow regardless of the particular functions it fulfils. To the extent that by an adaptive response or a change in all or some aspect of an organisation, its survival capacity is enhanced, one could emphatically say change has led to a more effective organisation.

 

The extent of diversification also has significant effects on change outcome. Those organisations who had changed sector ownership but maintained similar product or service range, generally tended to focus more on improving efficiency through internal structure modification and generally tended to institutionalise change quickly and successfully.

 

It is also the case that contrary to expectations as hypothesised, organisations that have undergone change do not necessarily pay excessive attention to their output environments, such organisations tend to focus equally on their input environments, more so where elements of such input environments are turbulent as in the access to foreign exchange needed to facilitate raw material acquisition as exemplified in the cases studied.

 

It is also indicated clearly, that the task environments could be conceived as multifaceted, as when the acquisition of raw materials has to be mediated through foreign exchange availability.

 

As organisations transit from SOEs to limited liability companies, the change processes instigated reveal peculiar characteristics of successfully organisational management strategies in developing country environment.

 

It is recommended that further research be conducted into the full impact of the proactive policy influencing activities of oversight bodies like the Private Enterprise Foundation on private sector manufacturing organisation, evolution and growth.

 

Additionally the progress of transformed organisations (basically, the State Owned Enterprises like Tema Development Corporation, The Ghana Civil Aviation Authourity, The Ghana Commercial Bank and Ghana Post) ought to receive further attention as organisations to be studied in detail as the proceeed through transitionary stages of ownership and corporate status change to stable states of independency.

 

It is recommended, additionally, that further studies could be conducted to determine the interaction and interfaces defining sub-system resource and information exchange activities as organisational systems reorganise around new system definitions of relevance during transformational and adaptive change.

 

APPENDICES

 

Appendix 1

Ghana in Geo-political Perspective

Ghana is a tropical country off the coast of the West African Sub-region, set in between the Ivory Coast on the West, Burkina Faso on the north, Togo on the east and the Gulf of Guinea of the Atlantic Ocean on the south. It has a shoreline of 560 Kilometres. Ghana has a total area of 238,539 square kilometres. It lies between latitude 6 and 11 degrees north of the equator and is crossed by the Greenwich Meridian. Average monthly temperatures in all parts of the country are above 20°C all year round. In the northern parts of the country temperatures can rise above 35°C during the day especially in the hottest months of March and April. In the mountains and hilly areas lower temperatures of between 14 - 18 ° C are not unusual. The average rainfall varies across broad climatic regions in the country. The southeast otherwise referred to as the Dry Accra plains, due to an abnormal cold current off the coast in the Atlantic is a comparatively dry area with about 77 cm, while the Southwestern part of the coast has a high average annual rainfall of 225 cm. The driest region is in the north where there is a long dry season (November to March) and an average annual rainfall of about 100 cm. As to be expected the climate controls the vegetation, with the luxuriance and type of vegetation determined by rainfall patterns. Thick forest abounds in the rainy southwest and central areas and in the river valleys, but savannah covers the drier regions.

 

Ghana has two broad linguistic groups - Kwa of the southern sector and Gur of the Northern sector and about ninety ethnic groups. In 1960, 17 major groups were identified based on language. Akans form 44% (Ashanti, Brong Ahafo, Central, Western and Eastern), while there are Ewes (14%) mainly in the Volta Region and Ga-Adangbe (8%) in Greater Accra and Eastern Regions. In the Northern and Upper Regions there are the Mole-Dagbani, (16%), Grussi (2%) and Gurma (4%). Other minority groups make up the remainder.

 

Political and Administrative Structure

 

Ghana achieved Independence from British rule on 6th March 1957, being the first African country to gain independence status from a colonial power. It has since 1957 had four civilians governments (1957-1966; 1969-1972; 1979-1981 and from 1993 the fourth republic began and still continues). In between these periods the country was ruled by military regimes. the country has been divided into ten regions and 110 districts for administrative purposes: Greater Accra, Western, Central, Eastern, Volta, Ashanti, Brong Ahafo, Northern, Upper East and Upper West. Each region has a Regional Minister as the political head whose schedule is coordinate the development activities of the districts within the region. Traditional Administrative areas co-exist with the government structure. They are made up of chiefdoms and traditional councils. In the mid-eighties, to reduce the excessive concentration of authority at the centre, the government introduced the decentralisation programme. In this system the primary political body in each district was the District Assembly comprising elected and nominated members. The main objective of the District Assemblies was to achieve democratic administration in order to involve communities in decision making and implementation; and also to promote a balanced, social and spatial development. (It is intended that in future, Area/Town Councils and Unit Committees will be constituted at the sub-district level to serve as the primary units of the regional administrative organisational pyramid.) The process has been carried into the existing constitutional government.

 

Population

 

According to the 1960 census there were about 6.7 million people in Ghana. In 1970, the figure rose to 8.5 million and in 1984 it rose to12.2 million. Presently the population is about 18 million. With an average growth rate of 2.6% it is expected that the population is projected to double in 25 years from the 1984 figures. Generally over two thirds of the population live in the rural areas while one third lives in the urban areas.

 

Economy

 

Ghana is a country abundantly endowed with many natural resources. There are significant deposits of gold, manganese, bauxite,  diamonds and iron ore in addition to substantial deposits of other minerals. The country is the third largest exporter of manganese and diamond by weight and the fifth largest exporter of gold. Bauxite is also exported. In agro-products, cocoa accounts for over 50% of the country's foreign earnings.

Ghana has a mixed economy: a small capital intensive modern sector and a large traditional agricultural sector. The modern sector is made up of public and civil service and other areas like the industrial and mining sector. The traditional sector is composed of small farmers who make up 61% of the economically adult population. The economy experienced a steady decline throughout the 1970's and early 1980's with per capita real income falling substantially during that period. The decline of the economy could be attributed to a variety of factors viz. Poor policy framework within which industry operated, poor incentive for cash crop producers, lack of raw materials, generally high operating cost among a myriad of other reasons. As a consequence the production and export of commercial crops also declined. Meanwhile, there were large budgetary deficits and poor fiscal management over long periods that led to high inflation and inevitably reduced living standards. The currency was overvalued and the exchange rate was fixed, and these contributed to decreasing exports and a shortage of foreign exchange.

In 1983, the Government launched an Economic Recovery Programme to reverse the deterioration in the economy; originally the programme concentrated on macro-economic policies and addressed serious economic distortions and imbalances. Some of these activities were hindered by low exports; the weakness of the financial system, which mitigated against savings and private investment, low agricultural production; and weak public administration, because staff were poorly paid while the lower echelons were overstaffed. As part of the Economic Recovery Programme, the government introduced a Structural Adjustment Programme (SAP), which has led to some improvements. Foreign exchange is rate determined by open market operations of demand and supply. FOB prices received by cocoa farmers have improved significantly. The tax structure has been reformed and a Value Added Tax introduced and reviewed. Public expenditure has been re-oriented towards economic infrastructure as well as the provision of social services.

 

Ghana's long-term goal, as spelt out in the Vision 2020 document, is to transform the economy from a low-income to a middle-income status by the year 2020. The strategy to achieve this goal is to create an open and liberal market founded on private sector initiative and creativity. It is projected that the economy will have to grow by at least 8% per annum. While population growth will have to be reduced from its present level of about 3% to 2% per annum in order to allow real income per head to rise to a more appreciable level.  Real GDP growth in the most recent years has averaged far below this 8% annual growth rate. In 1999 real GDP was only 4.4%, which approximates the results of previous years when the average GDP growth rate was 4%-5%.

 

The economy is estimated to have grown by 5% in 1989 with a strong performance in agriculture and expansion in industry and services. 1990 GDP is 3.4% and 1991 is 5%. In 1999 Real GDP grew by 4.4% this compares with a growth of 4.7% in 1998. The fiscal deficit rose from 6.3% of GDP in 1998 to 6.5% in 1999. Broad monetary supply (M2+) increased by 16.1% compared to 17.6% in 1998. With regards to interest rates, lending rates for the manufacturing business declined from 38.5% at the end of 1998 to 36.1% at the end of 1999.

 

Agriculture

 

Agriculture is the mainstay of the Ghanaian economy and accounts for over 70% of the country's labour force. From 1989, agricultural output has increased an average of 4% each year. Cocoa production has improved dramatically through the implementation of improved production techniques and better management by farmers.

By 1998 continual agriculture growth rate is 5.1%, in 1999 a growth rate of 3.9% was recorded as against 1998 total output.

 

Industry

 

Industrial growth moderated in 1989-90 financial year, when expansion in manufacturing dropped. Mining remains a strong sector. Value added in mining has risen about 10% between 1980 and 1990. Production of gold has risen continuously. Across industrial groups there has been considerable variation in degree of performance across industrial groups.

Manufacturing is at 63% of its 1977 level when production was at its peak. Performance has been strong in beverages. Petroleum refining has seen increased growth. Cement and non-metallic mineral products have also risen since 1989.

By 1999 the industrial sector grew by 4.9% compared to 3.2% in 1998. The manufacturing sub-sector grew by 4.8% in 1999 as against 4.0% in 1998.

 

Services

 

The overall services sector grew by 5.0% in 1999 compared to 6.0% in 1998. And is expected to grow by 5.9% for the year 2000.

 

The Volta River Project

Ghana is a fast industrially developing nation with many large and small-scale industries in areas of metallurgical engineering, chemicals, textiles and food processing. To provide enough electrical power to support these industries, two major power-generating plants have been built, namely, the Akosombo Dam, completed in 1966 with the capacity of generating 854,000 kilowatts and the Kpong Dam completed in 1982 with a capacity of 206,000 kilowatts of electricity;

The Volta Aluminium Smelting Plant (VALCO) at Tema consumes about 60% of the total output of electrical power generated.

The rest of the power is distributed throughout the country for use by the numerous industries and for domestic use. Nevertheless, the country still has surplus electric power for export to neighbouring countries; Togo and Benin. The two projects have also created a vast lake, the Volta lake (the largest man made in the world) that acts as an important agricultural basin and also an inland waterway for relatively cheap water transportation of cargoes between the north and the south.

 

Savings and Investment

Investment increased from 11% of GDP in 1988 to 16% in 1990. Public invest accounted for 60% of total in 1989, and 50% in 1990. Private investment doubled over the same period. Expansion concentrated in gold mining where total investment was over US$200 million in 1987-90. National savings stagnated at about 8% of GDP in 1990.

 

Prices and Wages

Inflation as measured by the annual average change in the consumer price index (CPI) fell from 31.4% in 1988 to 25.2% 1989.  In 1990 annual average inflation was 41.4%. In 1991 it was 26.7%. 

 

The 1990s have seen concerted Government effort to tame inflationary pressure on the economy. The twelve-month end-of-period inflation rate stood at 13.8% at the end of 1999 compared to 15.7% at the end of 1998. Such that by May 1999 inflation was as low as 9.4%. However the hopes for further improvement in the macro economic environment were dashed in the last quarter of 1999 and into this year when the economic environment changed negatively pushing inflation to 19.8% as at midyear and still rising. This is against expected end of period inflation of 12.5%. (A variety of factors account for this and are discussed in the body of the thesis.) The exchange rate of the Cedi depreciated by 33.0% in 1999 to close at 3500 Cedis to one US dollar compared to 2341 per one US dollar at the end of 1998. Which experienced a depreciation of 4.1%. Presently the exchange rate of the Cedi hovers around 6500 Cedis to one US dollar. Overall balance of payments deficit for 1999 was US$ 93 million compared to US$ 99.0 million in 1998.

 

Appendix 2

Critical Review of Economic Performance in the 1999 Financial Year

The guiding document that sets a national development vision, has a vision of transforming the economy by the year 2020 from a low income to a middle-income status. The strategy to achieve this goal is to create an open and liberal market founded on private sector initiative and creativity. It is projected that the economy will have to grow by at least 8% per annum, while population growth will have to be reduced from its level of about 3% to 2% per annum in order to allow real income per head to rise to a more appreciable level.

 

National economic performance in 1999 shows a real GDP growth of 4.4%, which reflects average growth performance of between 4-5% over the previous years. These are well below the 8% annual growth target specified in the Vision 2020 National Guidance Document.

 

Below expected performance during the 1999 fiscal, which generally is reflective of previous years indicate that national policies and initiatives are yielding below expectations and calls for a strategic review of these policies. The performance of the main driving forces of the economy, viz. Agriculture, industry and services has been sluggish over the past few years. Agriculture is still, despite efforts to the contrary, very much dependent on rainfall. The growth of 3.9% recorded in 1999 for agriculture is generally appreciated as poor.

 

The performance of industry in 1999 was an improvement over that of 1998, but is still inadequate to achieve the country's long-term goal. The recorded improvements in the growth of the manufacturing sub-sector reflected the improved energy supply situation. The private sector opines that further improvement of the business environment should see a further increase in the growth of the sub-sector. The improvement would entail measures the ensure availability of adequate credit, low inflation, low interest rates, low taxes, and good infrastructure facilities among others.

 

One of the key ingredients for a strong growth of the private sector is macroeconomic stability that is characterised by low inflation, low interest rates and a stable exchange rate. Unfortunately the Ghanaian economy has not sustained such stability. Indeed, the economy has experienced high inflation leading to high interest rates and a fast depreciation of the Cedi. However, since 1995 when the rate of inflation peaked at about 70% there has been a gradual decline in the rate of inflation. The downward trend in inflation has been abruptly reversed by events in 2000. It is pointed out that inflation can be tamed if more stringent fiscal and monetary measures are put in place and the agricultural sector given a greater boost than presently.

 

High interest rates are an obstacle to effective private sector borrowing.

 

In Ghana, inflation is largely explained by the growth of money supply. During the 1980s and most of the 1990s, the economy experienced a very high growth in money supply, averaging about 40% per annum. However, 1998 saw a sharp decline in growth to 17.8%. Monetary expansion was relatively under control in 1999 as in 1998. However with the persistent budget deficits and borrowing from the financial market by government, the private sector is worried about any further success in this area. The perception that inflation may rise and interest rates could reach higher levels seems to be evident in the 2000 financial year.

 

1999 saw a deterioration in government fiscal balance as the overall budget deficit as a percentage of GDP increased from 6.3% in 1998 to 6.5.%. The worsening performance in1999 was alluded to shortfalls in revenue from divestiture, project loans and cocoa export duty. In the case of divestiture receipts, a shortfall of 34.0% was recorded while that of project loans was 24.2%. Revenue from cocoa export duty also fell short of the target by 27.0%. It has been the case shortfalls in project loans occur when government in unable to fulfil conditions attached to such loans. In order to reduce the shortfall, there is a need for government to take a critical look at conditions that go with the loans and make sure they are met as programmed.

 

The Cedi experienced a 33.0% fall in its value in 1999 compared to 4.1% in 1998. As much as bringing some benefits to exporters through increased export earnings (Cedi value), the steep depreciation had negative effects on domestic prices and thus contributed to raising the cost of production. Uncontrolled depreciation it is feared could destabilise the economy.

 

Given developments in 1999 the private sector with its focus on growth and development, expects that government policy making should focus on addressing:

 

• Ensuring sustainable macro economic stability

• Providing access to adequate credit

• Guaranteeing efficient infrastructure facilities

• Ensuring efficient public service

• Utilising high level technology and Human Resources

• Moderating tax levels as incentive

• Promoting access to markets

 

The 2000 budget, (the importance of government budget in setting the tone for industries success or failure cannot be underemphasized, and the PEFs review of the previous and the present year's budget is mainly in terms of its impact in terms of realised expectations and gaping failures to address problematic areas of the operating environment of industry and the manufacturing sub-sector.)

 

The main highlights of the 2000 budget are as follows: -

Sectoral growth targets were set as follows:-

 

•  Agriculture : 4.2%

•  Industry      : 5.1%

•  Services       : 5.9%

• Total revenue and grants are projected at 8,633.1 billion Cedis

•  Total payments are estimated at 8,633.1 billion Cedis

•  Total exports to increase by 1.2% to US$ 2056 million

 

The Budget also included some key policies and initiatives aimed at promoting the development of agriculture, industry, employment and services through the provision of finance, markets, tax incentives. Some notable examples are: -

• Expansion of the production of foundation seed and promotion of partnership with the private sector.

• Special focus on rice and plantain production.

• Creation of necessary marketing avenues for agricultural produce.

• Ensure accessibility to credit and markets for small and medium enterprises.

• Establishment of specialised courts to deal with issues related to commerce, tax and land.

• Provision of special line of credit through Agricultural Development Bank to private sector participants in agricultural production and marketing.

• Introduction of legislation to protect local industries, rationalise the import duty and special tax regimes. A review of the whole system of exemption.

 

In evaluating these policies and their assumed impact on the industrial and business sector external environment of operations, the PEF makes a number of comments, recommendations and condemnations, the salient of which are discussed below: -

 

The private sector commends the government for the various initiatives aimed at supporting the sector, for example the planned sourcing of $50.2 million in addition to 260 billion Cedis from ADB for lending to agriculture; the proposal for lower corporate tax rates, imposition of special tax on imports and implementing the "Buy made-in-Ghana goods" policy. The PEF laments however that often these initiatives are not well implemented and therefore the private sector does not benefit fully from them. There is a call on government to strengthen its implementation machinery in order to enable the economy to achieve the expected results in the areas of availability of credit, more manageable costs of credit, lower corporate taxes and applying special taxes to stem the unfair influx of competing imports.

 

The private sector is appreciative of government's efforts at sourcing funds for onward lending to the manufacturing sector on 'friendlier' terms. The private sector is of the view that these credit facilities would be properly managed and lent on medium and long-tern basis. The beneficiaries are advised to use the funds properly. It is also expected that the interest rates on the loans would be reasonable to make repayment more manageable to borrowers.

 

The establishment of procedures and mechanism for implementing the purchase of Made-in-Ghana goods by public sector organisations is commended by the private sector. There is an expectation that there would be government to the initiative to support the development of the sector. The sector organisations are also admonished to produce quality goods at competitive prices.

 

With collaboration of the private sector the Value-Added Tax was re-introduced with success in 1998. While the coming few years should consolidation, the proposed increase in the tax is seen as untimely and inappropriate. The increase it is observed would drive up cost of production and restrain demand of goods and services. Government is advised to focus on improving the tax collection machinery and suspend the increase for the time being.

 

The private sector welcomes a bill that will allow the operation of pension schemes supplemental to the one being run by Social Security and National Insurance Trust (SSNIT). The private sector sees this as an opportunity for private businesses to assist in raising long-term funds for the development of the private sector. It is our hope that the bill will provide tax breaks for both contributors and the pension fund companies in order that substantial amounts of funds can be raised through this channel. The private sector would like to see a more independent SSNIT devoid of any government interference to enable them take the best investment decisions.

 

It is the case that for some years now, local manufacturers have been facing strong competition from foreign imports that has made it difficult for them to expand production and enjoy economies of scale. In this regard, the private sector appreciates the formulation of a bill to address the problem by reviewing tariffs as well as harmonise rates. An appeal is made that only products that have local counterparts need be considered under the policy.

 

Its been noted that that budget has been strategically silent on the major constraints presented by the private sector and the needed inputs to be structured and polished to deal with issues like:-

 

• Availability of finance

• Public borrowing through Treasury Bills, the obvious action that crowds out private sector borrowing and dictates the high level of lending rates.

• The arrears problem.

 

The privates sector strongly recommends that the under mentioned eight issues should receive government attention:-

1. Cut down on expenditure

- This will impact on inflation, exchange rate, and government borrowing.

2. Improving revenue performance, there is the need to plug all the revenue leakages - for example dealing with

- issues of inefficiency in revenue collection and corruption and misappropriation of revenue collected. Consider implications of increase in VAT, petroleum tax

3. Implement the recommendations of the National Economic Forum - for example, attainment of a single digit inflation rate. Achievement of a balanced budget year (The 2000 sessional address) called for this target to be deferred because of the external shocks referred to

4. Aim at full employment-tackle the issue of large pockets of unemployment; poverty reduction; Youth in Agriculture

To enable expanded activity in the industrial sector, i. Government must provide the enabling environment. ii. Private sector must take up the challenge. iii. Labour organisations should not only protect those already in employment but also create the conditions for investors to want to set up business in order to employ more people.

5. Deal with low-income levels of workers (the main reason for the brain drain; people with skills moving out to receive incomes very much higher than available locally.

6. There is the need for increased investment in education. There is the need to consider seriously education related issues like; access to quality education, capacity building and utilisation.

7. More investment in health.

8. Tackle corruption. The entrepreneur in Ghana wants to see progress in economic development, through the provision of:

- Finance availability

- Finance cost

- Time frame of policy and successful implementation

- Sustainability of the policies

 

On the topical issue of donor funds, there is a heavy dependence on the economy on donor assistance. But there is evidence that donor inflows have not been very substantial and it is part of the pressures disturbing the stability and sustainability of the macro economic aggregates. There is evidence that the donor pipeline may be drying up as part of the anticipated donor fatigue. A more prevalent situation is the delay in, or obstruction of disbursements on account of the recipient not being able to satisfy conditions agreed for the release of funds. There is the need to emphasise that given the important roles currently linked to donor support, the satisfaction of the various performance criteria should be guaranteed so that the donor funds become available. While the private sector is not against the policy of sourcing donor funds to support selected actions of the budget. The main concern is that planned activities should be carefully and efficiently implemented to ensure a system of fulfilled promises. This means the process for accessing these funds in a timely manner should be followed. There should be results for these donor funds before the nation cuts of its reliance on them.

 

In conclusion the PEF notes that while a number of policy measures and initiatives have been outlined that are appealing to the private sector. Such appealing measures and initiatives have characterised previous policy statements but often very little has been achieved from them owing to government machinery unable to implement them effectively. The private sector is of the view that inability to achieve set goals at the national level is due among other things to poor implementation of policy measures, this calls for a need to critically re-examine government implementation machinery and make it more effective.'

 

The PEF's Position on the Economy

 

The PEF describes the existing environment within which industry operates as hostile. They contend that certain macro-economic factors are largely responsible for creating this hostile environment for business operations in Ghana.

 

Prominently the depreciating value of the Cedi. In addition, an increase in the treasury bill interest rate equivalent to 45.68%, the increase of the nominal interest rates to between 49% and 51%, re-emergence of an increasing inflation rate (19.8% as at mid-year) and the inadequacy of foreign exchange. Coupled with these have been price increments in many products. These price changes have been linked to exchange rate depreciation, special tax on selected imports, and petroleum price changes.

 

The low inflation figure of 9.4% in May 1999 enabled the Bank of Ghana to lower its rediscount rate rather slowly to 27% in April 1999. This in turn encouraged the banks to lower their base rates. But now with inflation have risen to 19.8%, the situation is different and has serious implications for the industrial and business sector. The fall in the prices of the country's major commodity exports gold and cocoa and the rising crude oil price on the international market are cited as core reasons for the current "turbulence" in the economy. In addition, a slow down in the disbursement of foreign grants and loans also aggravated the situation.

 

Local prices of petroleum products have been raised several times to reflect changes on the international market or parity prices. These price increases in petroleum products have increased the cost of doing business almost three fold.

 

The local currency, the Cedi, has depreciated from 2350 Cedis to the US dollar in 1999 to 6500 to the US dollar by midyear 2000.

 

The declining anticipated export earnings coupled with the sharp increase in crude oil import prices put pressures on the amount of foreign exchange available to the economy and the amount required to make payments. In the Government's Budget Statement and Economic Policy for the year 2000, it was indicated that the critical developments were placing considerable strain on government's fiscal position, the external balance of payments situation and the exchange rate of the Cedi.

 

It is the observation of the PEF that interest rates were relatively high at the level of 33%-35%.

 

Treasury bills have become the most indicative rate for the operations of the banks. Customers of banks always face the difficult choice of keeping ordinary deposits or investing in treasury bills. The qualities of liquidity, yield and security (risk free) attached to the treasury bills usually drive investment decisions in favour of "lending to Government." The banks therefore are left with very limited funds to be devoted for private sector loans.

 

During the current year, it has been realised that Government is willing and able to borrow large sums of money through treasury bills issues. The interest equivalent of 45.68% implies that credit to the private sector is to be at 45-50% interest.

        

                               Treasury bills    Interest rate   Lending

                                discount rates   equivalent       rates

 

December 1999     31.50                  34.19               33-40%

January 2000         31.50                  34.19               33-40%

April 2000              31.52                   34.22               33-40%   

June 2000               39.49                  43.82              45-50%

July 2000                41.00                  45.68               45-50%

 

It is to be noted that the attractive interest rates quoted above would provide every justification for banks to pick Treasury bills instead of loans to industry and agriculture. Also, even if banks are wiling to lend to the private sector, the estimated interest charges of 45-50% would deter the entrepreneur. PEF asserts that invest need to return yields in excess of 80% in order to promote the use of local credit. The situation is indicative of a clear-cut crowding out development and the consequences do not bode well for prospects of meaningful private sector growth.

 

The PEF suggests that Government should ensure a reduced reliance on treasury bills for fiscal support enabling the banks to be ready to favour lending to the private sector.

 

The Government budgetary statement indicated that the crisis in the economy was going to place considerable strain on the exchange rate of the Cedi. When 1999 ended with the Cedi exchange rate at 3500 Cedis to the dollar, it was believed that there had been a major depreciation from the end 1998 position of 2400 Cedis. The current year has witnessed a very dramatic trend in the exchange rate. The interbank rate was 5600 Cedis at midyear while the foreign exchange bureaux advertised 6000-6400 Cedis. Some purchasers might have paid more depending on the urgency of their transaction.

 

The interbank rate has become largely academic and indicative. The private sector has had to rely on the foreign exchange bureaux to meet their needs for current imports as well as imports already in the system. The importers claim that they are not able to use the proceeds of their sales to make payments for the imported goods because of the depreciation. No doubt, some losses have been incurred and the operators should need higher adjustments in their prices in order to build up appropriate Cedi balances to effect foreign exchange purchases at the new rates.

 

The PEF calls for reliable and feasible measures to halt the slide of the Cedi. Especially through increasing exports or cutting imports as a response to the crisis.

 

For every import order, the depreciation of the Cedi imposes on the private sector the duty of sourcing more Cedis to effect payment for the goods. No doubt the higher Cedi payments have been translated into the new increased prices of both basic and capital goods essential for the economy. It is also been observed that tax liabilities of importers get increased through the tax imposed on import values converted at the depreciated rates. The reaction to the steep tax imposition induced as a result of the Cedi depreciation has been an appeal by some traders for a review of tax rates and the imposition of special taxes because the exchange rate itself had become a tax. The fast depreciation has not been beneficial to private sector planning and operations.

 

When the private sector submits the various applications for the transfers of dividends in respect of foreign partners, it is obvious that the state of the depreciation of the Cedi erodes the value of such transfers. For example a dividend of 35 million Cedi which should translate into 10,000 dollars in 1999 at 3500 Cedi per dollar now is worth 5384 dollars at 6500 Cedi per dollar. The implication of this transaction is that the investor gets dividend lower than expected. The investment would no longer be worthwhile. This implies that no new investments would flow in, and sometimes, the existing ones would be terminated and repatriated. These are hardly the expectations desired by an economy eager to achieve new levels of sustainable growth.

 

Reference has been made to the level of credit available to the private sector being constrained by the prevailing interest rates and the interest of government finance in public borrowing. The increasing share of government in credit available is illustrated as follows:

 

     

1997           39.3%           6.4%       54.3%        100%

1998           56.9%           4.5%       38.6%        100%

1999           53.9               7.6%       38.5%        100%

 

It is interesting to note that in 1999 government had 53.9% of credit available compared to 38.5% for the private sector.

 

In addition to unfavourable trends in the economy certain government ministries, departments and agencies are by their operational approaches compounding the problems facing the private sector at this time.

 

For example, it has been noted that for the past eight months, six electronics assembling companies have had their imported SKD parts held up by Custom Excise and Preventive Services (CEPS) due to the difficulty of the Commissioner to appreciate the arrangements for assembly plants. Even with the involvement of Ghana Import Promotion Council, the Board of CEPS, the Vice President's office, and others who have all come to the same conclusion to allow the plants to operate as they have been duly authorised to, the CEPS Commissioner has continued to detain the parts unilaterally. From an exchange rate level of 3200 in December 1999 to 6000 to the dollar this is a huge additional cost to the operators. And this is happening at a time when a PEF/Vice President Committee is looking at how to use IT and Electronics Industry as a possible alternative foreign exchange earner for the country. This does not auger well for the establishment of a thriving Electronics and IT industry in the country.

 

To ameliorate the exchange rate government advanced a policy for exchange rate control, but this has been condemned by the PEF who thinks that other ways of short term stabilisation such as appeal to foreign donors to honour their disbursement pledges and the banks are made to prioritise their payments to cover the critical needs of the nation in addition to what has already been committed in the pipeline.

 

The National Communication Authority (NCA) has recently closed down in an unacceptable manner some Internet Service Providers (ISPs) for alleged offences connected with voice-over IT services. PEF investigations indicate that the rumpus is more misunderstanding of how to introduce improved or more sophisticated technology into the Ghanaian system, which is dominated, by obsolete and intermediate technology.

 

Government's renewed focus on productivity improvement in the economy is applauded. There have been awareness creation initiatives and positive reactions from all the stakeholders. PEF emphasises that an issue that needs more consideration is to give more meaning to the productivity drive is the institution and application of sustainable reward systems for effort, initiative and commitment. There is a need to identify high performance and offer appropriate incentives, motivation and compensation commensurate with the new understanding of the reward system. Leading to a national programme for increase growth through improved productivity.

 

PEF's critical assessment of the economy among other things is meant to create an objective forum where mutual concern is to provide guidance for securing an enabling national environment and the entrenchment of fiscal discipline at governmental level. While the large and extensive documentary and interview material garnered from the PEF could only be briefly summarised here, the foundation is the representative influential mediator of the private sector manufacturing organisations, and by their lobbying activities at governmental policy making levels and proposals, effectively define and articulate the general environment of critical relevance to the manufacturing and profit oriented service organisations.     

 

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