Vol 02 01
Praxis Logo
Quarterly Journal on Management
From the publishers of THE HINDU BUSINESS LINE

Vol. 2 :: No. 1 :: March 1998

Breaking the Rules

N. Nagaraj and S. Inbasekeran

Some years back, in a typewriter manufacturing and financing company, a review of performance showed a drastic difference between the performances of two units, both working in a similar environment. Branch A had the best performance in terms of sales and Branch B had an excellent collection record, though it was not in the same league as Branch A in terms of sales.

The managers of both branches were called in to meet the CEO of the company and the revelations were startling. The manager of Branch A did not bother about collection but went into the market with only one aim: sales. The manager of Branch B's aim was to have no bad debts and/or delayed collection. His thinking was that sales did not matter if he couldn't realise the money from the sale. That notion is only partially true, but he lost sight of the fact that, overall, if you keep increasing sales, even if a certain percentage turns bad, the company was much better off than not selling machines.

Why did this happen? One, the manager had a mental model that was different; two, his mental model made him assume a different measure for performance; and three, at the operational level, the method the manager was to follow was not communicated to him. How is this connected to bureaucracy? The manager of Branch B is ineffective (and inefficient too, with respect to the parameters required for success). This illustration helps in understanding the different iterations in which the bureaucracy creeps into any organisation.

Iteration One

The problem of bureaucracy comes in when an organisation moves from an entrepreneurial/project-based set-up to a strategic set- up. The point at which the shift occurs, if not managed properly, sows the seeds for bureaucracy. In any enterprise, a bureaucracy, as we interpret it now, is not the idea at all. When the shift to a strategic form takes place, the system (and the systems within) become larger naturally. Commitments to and on behalf of the organisation are formalised and the formalisation of internal responses follows. Therefore, the blueprint for the organisation and the actual functioning of the organisation move away from each other.

Iteration Two

Any organisation has a philosophy that reflects its ideals; a cultural environment in which it operates that provides its goals; it requires policies that provides missions; and requires strategies to convert its missions to programmes. Programmes, in turn, require tactics and logistics. The policies are the key to operation essentially because they guide `action'. All these translate into an Institutional System in a formal form.

Iteration Three

This institutional system is based on Models, Measures, and Methods. Within the Institutional System, the 3Ms are not distributed equally among the different elements except at the policy level. At higher levels, there is a skew towards Models and at the lower levels, there is a skew towards methods. The policy level is where there is some sort of equal concern about models, measures and methods. And therefore, the key.

Iteration Four

The actual `action' part of the operation begins at the strategy level and this is where the most chaotic variable comes in: People. People are given responsibilities to perform certain tasks that make a job. The formal `giving' of authority and responsibility to a person would give the person a `position' or `office'. And, with the position comes the job.

Iteration Five

When a person is given a position and he takes up the job, he also assumes a `role'. It is in the nature of human beings to assume roles. A role, to be sustained, needs meaning and choice. Unfortunately for a lot of people, they sustain a role and then search for a meaning. For most of these people, power becomes a meaning. They create this by establishing territorial control, which could be in the form of interpretation of rules, making sanctions, or simply by playing safe within the boundaries.

Iteration Six

People depend on power as a meaning when there is a threat to the physical self, that is, survival, in the broader sense. This threat, in time, envelopes both the core self and the phenomenal self. The core self is the self-concept a person has of oneself, in freudian terms known as the `ego'. For instance, ``I am well suited for this job.'' The phenomenal self is the extended self. For instance, ``This is my wife. This is my car.'' Power could be a strength against this fear.

Iteration Seven

How does one extend power? A person searches for a domain/territory, which he can call his own. He creates HIS interpretation of policies. Eventually, his mental model goes against those originally created. Fragmentation of boundaries in territory makes a person lose sight of the whole system and his/ her place in the system.


Organisations generally start off with an entrepreneur at the helm or at least with a team of committed people. At this stage in the organisation's evolution, there is a close relationship between the people in it. Systems are designed and put in place with the top man's or the team's mental models in consideration. A few instances of `not-following-the rules' is accepted and there is no really fixed way of handling things. When new people come in to the organisation or when some of the original members leave it, there is a voluntary and deliberate effort to indoctrinate that person to the ways of the organisation. In some cases, the entry of a new member or the exit of another member may actually change the way the organisation handles issues.

Although a natural hierarchy would exist, the hierarchy is not a hindrance to management. The hierarchy exists as an inclusive network or in a workgroup form. Most of the work, especially in a project-oriented organisation, is done through teams. People in a young organisation also tend to have a higher level of shared values and are highly aware of the mission they work towards. Transactions/ communication are mostly informal in nature. Also, at the inception stage, roles are easily assumed and such roles are understood quite well by everyone in the organisation. Because of the awareness of the mission and shared values, the model necessitated by the philosophy of the company and the model assumed by a person -- while assuming a role -- are congruent, and therefore, makes the role more effective. Also, in the early stages of the organisation recognition is something very important and it takes the form of `recognition' itself, that is, an acknowledgement, a credit, a word of praise.

What happens over a period of time is that models change. Models are affected by the way in which the model-maker thinks. This, in turn, is affected by the environment. Organisation philosophies almost never change. But, goals change (or, at least, need to change). Policies need to reflect the changes in goals; Strategies need to change to achieve its missions. Model-building or model-making for the organisation takes place at the place of least action. Down the line, changes in models reflect the changing environment.

The worst blow comes in with model-making at the strategic level. At the strategy level, the skewness is slightly more towards Methods than Models and Measures. However, this is also the place where most models go incongruent or grow out of context. Models handed down from the higher levels no longer fit the environment (external and internal), and, increasingly, the people at the strategy level -- the action level -- impose and follow *their* mental models rather than the organisational models. Organisational Roles, therefore, affect the interpretation of organisational models and also the building of individual models.

What are roles? Role is the position a person occupies in a social system, as defined by the functions one performs in response to the expectations of the `significant' members of the social system, and one's own expectations from that position or office. While office / position is a relational and power-related concept, role is an obligational concept. Role is the integrated set of behaviours expected from a person occupying that office / position. With this in mind, one can realise that a role made up of expectations of `significant' members is by and large acceptable but a role made up of expectations from the self is unacceptable. We could define a person in the former case is a role `taker' and the one in the latter case is the role `maker'.

Returning to the original discussion, when the organisation is inchoate, most people within it are role `makers', and this does not disturb them or their organisation simply because of the extent of shared values. Role making is a proactive process and should not be projected negatively. What does happen over a period of time, and when new people come in to the organisation is that they tend to be role takers if they have not gone through the right inductive process. In this scenario, the role making process becomes dysfunctional: The absence of a proper set of expectations makes a person insecure and makes him search for his domain or territory -- he becomes a role `taker'. This is where the *basic* problem is. Once a person becomes a role taker, and creates his own fiefdom, it becomes very difficult for him to interpret models as others in the organisation intend him to. Also, once the person has lost sight of the mission, the role becomes a hindrance to the job rather than help him learn and make him more effective.

Over a period of time, the awareness levels of the organisation philosophy and missions fall if the top management is not careful: the relevance of the Institutional System goes through a change, which in turn affects strategies thereby affecting responsibilities through roles. The nature of changes is startling. Informal communication is formalised. And once this happens, informal networks become concrete and formal systems; the natural hierarchy within teams become an imposed hierarchical structure; communications become strained. People, especially role makers, start seeing their roles as tasks (which they are definitely not); People start looking towards monetary awards/ incentives for recognition. And, as systems become older, it becomes very difficult for the organisation to change. The lack of change in the organisation, and the unwillingness of role makers in the organisation who are unwilling to change let bureaucracy creep in. And then it is the story of the proverbial camel during a storm who first wanted only to let his head inside his master's tent and then...

Real-life Examples

Another example is that of an international spice trading company in Cochin. The processes involved at the premises are: One, receive spices; two, sort according to quality and other parameters; three, clean the spices; four, weigh and pack the spices; and finally; pick up the packed spices from the premises and despatch spices to customers.

The first four processes are done by the production department and the person in charge is the production controller. The last process is the responsibility of the Production, Planning and Control (PPC) department under the PPC manager. One fine day the General Manager - Marketing instructed the PPC manager to make sure that a container was ready for shipping by five in the evening that day. The PPC manager ignored the picking up of the produce at the end of the line in the premises and concentrated on getting the container ready.

Packed products were ready but they were not being picked up by the PPC people. The space for storage became clogged and the production controller had to reduce throughput to regulate production and storage. That evening, the total production for the day was down by twenty five per cent. Whose fault was it? The GM's, the PPC manager's or the production controller's?

This case illustrates the effect of roles and their perception on the interpretation of models, measures and methods. One may ask: where did the roles come in? Well, the PPC manager lost his head when he blindly left the line to obey the GM's (note: GM, his boss) orders. The production controller did not see the clearing of his space as his role: he could have easily accommodated the PPC manager for a day.

The Solution

Good inductive processes when people join the organization and a continuous induction process for all members when major changes in models take place. This process would help manage the behaviour repertory of people. The process would essentially consist of three elements: One, the right information, about models, from top down; two, the right instructions/methods; and three, the right incentives (also read as power). These elements take us to the concept of empowerment. Empowerment is effective only when the employee is free to act within some guidelines.

Here is an example of ineffective empowerment: Two customers missed one of the airline's flights (from Heathrow to Dublin) by a thin margin and the airline executive at the airport was very understanding about the seriousness of their problem. She was well aware of the company's philosophy (and pride) in customer service and then took a split-second decision about what was to be done: She called up a charter flight company and hired a small plane to take her customers to their destination. Wasn't it overdone? She could have easily called up another airline and booked her customers in the next flight to Dublin. The customers would have understood her concern even if she had taken the more sensible option. In the end, the airline company spent a lot of money for a mistake made by its customers and something that could have been fixed in a more reasonable manner.

In conclusion... Organisations have to make sure that Models, Measures and Methods match; excellent induction programmes have to be put in place not only for new recruits but also for the old hands in times of change; and the basic requirement for both the above is free and open information and communication.


The Hindu | Business Line