VIRTUAL TEAMS ARE HIGHLY EFFICIENT
3.7 The use of external consultants
A manager often seeks the advice of an external consultant either when a specific, clearly defined problem needs to be addressed, or when there is a vague feeling that problems exist but they have not yet been identified. Although it is usually the task of management to solve the problems by themselves, they may conclude that for some reason problems cannot or will not be solved without external help. For example:
• Management may not be able to solve the problem because it is too difficult or too time consuming. Management may wish to take advantage of the consultant’s knowledge of the problem and solution possibilities and alternatives based on previous experience.
Management may have the ability to solve the problem, but not the time because of other (more important) activities. The consultant’s time is used instead.
• Management may want a complete and objective investigation to bring the real cause of the problems to light and explain. A wider view of the problem in question is more likely to be supplied by an external consultant than by the organization itself, because the consultant is not involved in the daily events, which can lead to a certain narrowing of view. Objectivity is also more difficult if an organization carries out its own internal investigations.
• The organization sometimes finds it hard to accept problems resolved internally when there are conflicting ideas within the organization. The hiring of an independent consultant will overcome this difficulty.
• The client may not know the problem, but can detect the symptoms. The issue is not so much the difficulty of the problem as ignorance of or unfamiliarity with the problem.
• The client may require information which it cannot produce itself. This may involve knowledge of the sector and market data which a consultancy firm with specific knowledge of the sector can supply.
• The client may require a second opinion to confirm or reject a point of view. External consultants see things differently from the client as they will not suffer from ‘company blindness’. Requesting a second opinion is often done in the case of a very radical plan.
Such a study would often be commissioned by the board of directors and/or the works council of an organization.
• The client may wish to use the consultant as an instrument of power in the solving of problems – that is, the consultant is hired for organizational-political reasons. The power of the consultant is often determined by the influence exercised by the use of his or her skills.
Internal resistance to solutions can often only be overcome once an independent person has considered them. The consultant should only be used to deliver a message which certain members of the organization find hard to deliver themselves, or to express a message in different words. Management consultants have justifiable difficulty with such commissions. They usually clearly insist on determining the message (or solution) themselves. In principle, the consultant will not accept an engagement purely on a ‘ritual’
basis as part of an internal political game.
• The client may wish to use the consultant to bring a problem to the attention of his or her own organization or the supervisory bodies (for example, the board of directors). The consultants are unlikely to object to such assignments as they will be aware that their advice carries more weight in some situations than that of management itself.
• The client may not dare or want to take responsibility. If management abdicates, or at least appears to abdicate, responsibility for a potentially risky solution, it may be difficult to find a consultant who is willing to adopt the manager’s ideas. If the solution works, the manager can still take the credit; if the solution fails, then the consultant can be blamed.
Such commissions usually involve the functioning of ‘important’ members of the organization and dismissals may form part of the suggested solutions.
external consultant
complete and objective wider view
objectivity
second opinion
instrument of power
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• A financier may seek assurance that a debt or credit extension is a good idea via an independent judgment. The client may use the fact that a consultant has been engaged to impress a financier.
• The client may want to win time while making a particular decision or may want to lose so much time that he or she does not have to implement the measures after all. In both cases, the client would be merely using the consultant’s time rather than skills. No self- respecting consultant would accept such an assignment if he or she were aware of the client’s intention.
• The client may only want a general or periodic check, or a general orientation in relation to the future.
• In certain situations – for example, in case of the sudden departure or death of a manager – a management consultant may be asked to support management in the short term or to fill in temporarily. The assignment sometimes involves ‘turnaround management’ – that is, through the implementation of all sorts of (often unpopular) measures, moving the organization out of the red or curbing negative developments within a relatively short period of time. The roles of an interim manager and turnaround manager are both at the edge of or even outside the usual professional field of consultancy. By becoming part of the organization, they cease to be independent and objective.
win time
interim manager turnaround manager
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Summary
• Decision making is often referred to as the central task of management.
• Decisions are, in fact, the result of a process which begins the moment the information which highlights the problem becomes available, and lasts until a chosen solution is implemented.
• This process involves four steps or phases:
identification of the problem; development of alternatives; selection and finally a decision about which of the alternatives is the best or optimal one.
• This process of decision making is influenced by many different factors – for example, the structure of the organization, the quality of the communication processes and the motivation, involvement and commitment of the members of the organization.
• Once the decision has been made, it is important to proceed carefully and to draw up an initial plan.
A number of steps are involved, from words or policy decisions to deeds and specific actions. (Planning and various kinds of plans for various parts of an
organization are covered in more detail in Chapter 9.)
• Decision making also involves learning, both by individuals and by organizations, via an observing- judging-designing-applying cycle. Learning takes place at two levels: operational and conceptual learning.
• When organizations are striving for continuity and effectiveness, decisions will be based on actual and anticipated experiences.
• Constant change means that on occasions it will be necessary to adjust the ‘world picture’ of both the individual and of the organization if continuity and effectiveness are to be maintained.
Discussion questions
1 With reference to Management in Action at the beginning of this chapter:
a) Do you think that decision making changed at Hyundai when founder Ju-Yung passed corporate leadership to his son, Mong-Koo Chung? Give reasons for your answer.
b) Speed and aggressiveness are part of Hyundai’s competitive advantage. How will this affect decision-making across hierarchical levels? Compare Hyundai with its
competitors,
2 ‘If everyone in a department participates in decision making, coordination costs will increase exponentially and the quality of the decisions will decrease. As such, decision- making authority should be designated to the department manager.’ Discuss this statement.
3 ‘Having everyone in a department participate is too time-consuming. It is better if the department manager makes the decisions because that’s a lot faster.’ Discuss this statement.
4 How do the formula E = f (quality × acceptance) and the statement in Question 3 relate to each other?
5 Is there a relationship between lateral thinking and conceptual learning?
6 Compare Lewin’s learning cycle (Figure 3.8) with the experimental learning model (Figure 3.9). What are the key differences and similarities between the two models? Can you think of some examples in the business world?
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Research-based exercise
CEOs and single and double-loop learning
Introduction
This research-based exercise is based on a research article by Garc ´ia-Morales, Verdú-Jover and Lloréns (2009), published in the International Journal of Manpower. The research question, data collection, method, and some of the results of the research project are presented. The exercise consists of three questions based on the research article and the theory in this chapter. The answers should be based on both the theory in Chapter 3 and your own insights into the practical implications of your answer.
Research Question
What influence do CEO perceptions of personal mastery, shared vision, environment and strategic proactivity exert on organizational innovation and performance, as mediated by the degree of single- and double-loop learning?
Data Collection
As part of this investigation, a structured questionnaire aimed at better understanding of how CEOs face learning issues was devised. The population for this study consisted of the main Spanish firms in the four sectors examined (food-farming/manufacturing/construction/
services), according to the Dun and Bradstreet Spain (2000) database. Firms were selected on the basis of possessing characteristics (e.g. billing volume, employees, assets) able to provide them with the resources and means to undertake action to develop the variables analyzed in this research. A total of 900 questionnaires were sent and 408 valid questionnaires returned, giving an approximate response rate of 45 percent.
Outcomes
The researchers found that:
• CEO perceptions of several strategic factors and capabilities (personal mastery, shared vision, environment and strategic proactivity) influence single and double-loop learning, which in turn influence organizational innovation and performance.
• Single-loop learning is influenced by personal mastery, shared vision, stable environment and strategic proactivity.
• Double-loop learning is influenced by personal mastery, shared vision, ambiguous environment, and strategic proactivity.
(Based on Gar´cia-Morales, V.J., Verdú-Jover, A.J., and Lloréns, F.J. (2009) ‘The influence of CEO perceptions on the level of organizational learning: single-loop and double-loop learning.’
International Journal of Manpower, (30)6, 567-590.)
Questions
1 Explain in your own words the difference between single-loop and double-loop learning.
2 A key difference between single-loop and double-loop learning is that a CEO’s perception of the environment (i.e., stable versus ambiguous) has a different impact. Explain this difference.
3 Explain why both single and double-loop learning are necessary and generate an increase in organizational innovation and performance.