Informal Management Structure in 3rd World Organization.

Contents

Introduction

1. Why should management worry about the emergence of an informal/ parallel structure?
2. Effects of an informal Management Structure
3. Causes of an informal/parallel structure
4. Detecting an Informal Management Structure
5. Preventing an Informal Management Structure
6. Breaking into it
7. Positively Managing an informal Management Structure
8. Conclusion

Introduction
A normal management structure defines the levels of authority in carrying out processes in an organization.
It is therefore expected that authority comes from the top, and those down the structure comply with the spirit of the directives in the processes associated with the normal operations of the business.

This is usually implemented by grouping the organization into sections or units, which are responsible in a hierarchical structure to unit and section heads, up to the chief executive. This varies with management style, and the nature of the organization.

In the military and law enforcement organizations for example, these structures are well defined and a breach could attract very severe consequences. However, in business organizations, they come in many forms and variations.

There is the vertical structure characterized by rigid communication procedures from the top to the bottom akin to the military style, where tasks are well defined and formalized.
There is also a flat structure where many units, equal in hierarchy connect to the top with one or two positions, with varying degrees of flexibility.

In many organizations however, the informal structures arise, where delegated authority is influenced by considerations other than organization culture, or instructions from top management.
In some organizations, there are deliberate policies where some services are outsourced to some other companies.
Some would not like to, for example deal directly with dog handling. They leave such to the security company engaged, where there are trained personnel to do that.

There are also tolerated informal leadership when employees belong to a trade union. The union leadership may call for strikes, sit ins, or work to rule action. In the two cases mentioned, management would have to deal indirectly with the employees through the contractor or the Union leaders .

However, in any organization, units which employ special skills may interact with management through a black box: for example, a unit where the chief executive is not an expert, eg the IT unit. The unit is only expected to perform as expected by supplying information to management promptly as at when needed. The chief executive would have to deal with this section through the head. The employees relate to the unit head who exercises control and authority over employees in the unit.

The main discussion in this topic however is when an informal structure arises in an organization contrary to the design or intention of management. This will follow these broad titles:

1. Why should management worry about the emergence of an informal/ parallel structure?
2. What are the effects?
3. What gives rise to an informal/parallel structure?
4. How can you detect the existence of one?
5. How can you avoid it?
6. How can you break into it?
7. How can you positively manage such?

1. Why management should worry about the emergence of an informal management structure.
1. Procedures for processes in any organization are always laid out to comply with management policies on internal control where one person's function is designed to oversee another person's.
   However, a factor usually ignored is where the sectors expected to oversee each other now collude to defraud an organization, and eventually the public.
   This, by far causes more damage than what can be perpetrated by individuals acting alone.
   It usually originates from the existence of an informal management structure, separate from that instituted in the organization, where there is a greater allegiance to this structure, than the formal one in which the staff member is expected to operate.
2. There are also implications as regards corporate image and culture. These may be compromised as laid down procedures are not observed.


3. Corporate policy as regards safety may go unheeded, an action which may result in grave consequences.


4. The figures generated from transactions therefore may not be reliable and will ultimately mislead management when business intelligence tools are employed.


2. What are the effects?


1. There is insubordination among some levels of management as workers' allegiances do not follow the organizational structure..


2. Some sections and departments see themselves as rivals with regards to certain objectives and goals.


3. Management policies are not reflected in normal processes.
   If for example, company policy stipulates that visitors should wear tags, the presence of some without tags may show the existence of an alternate source of authority.


4. An alternative code of conduct unknown to management. While management tries to create a culture or image, outsiders see a different image.


5. Presence of rackets and illegal syndicates in public organizations


3. What causes it?
   We attempt to enumerate some causes of informal management structures.


1. Social association.
   In many instances, a worker becomes a confidant of a co worker and is therefore able to exert considerable influence on him/her.
   In many instances, instructions or directives from management will still undergo “processing” from the confidant before execution.
   This is very common where employees have known each other for quite some while, for example, as former classmates or neighbors, or (in a typical African setting, “brothers/sisters” )from the same village.


2. Knowledge of weakness or a secret of a fellow worker.
   This worker may not be in a position to refuse, correct or expose some misdeeds of the co worker who knows the weakness.
   The worker may involuntarily become subjected to an informal leadership and authority not directly under management control.


3. Weakness in the management structure.
   When a management appointment follows considerations other than suitability. The leader relies heavily on the more suitable subordinate for guidance and direction.
   Success now hangs on the loyalty of the subordinate, who is able to exert more influence than what the position ordinarily commands to his advantage.


4. An incorrect leadership or management structure.
   Where top management positions are only reserved for administrators without a deep knowledge of the technical operations in the organization, management policies will go unimplemented.
   An example is a power utility company without any prospects for the engineering staff to attain management positions. This is very rampant in third world establishments.
   An engineering staff trained in management learns and appreciates the value of some management practices such as book keeping and budgetary control, and is able to positively influence subordinates.
   Management staff on the other hand, cannot appreciate constraints experienced by technical staff when making decisions.
   This leads to failure in implementing management decisions


5. Failure to continuously evaluate, assess and then improve the existing management structure and internal control procedure, which gets out of date with time and is informally substituted with what can be practiced conveniently.
6. Communication style which flows only downwards from the top.
   There is very little provision for feedback. Where ergonomics is absent for example, an informal leader provides suggestions that may violate corporate ethics.


7. Group rivalry.
   This results in a situation that breeds conflicts, and camps. In practical terms, a group reads a negative intention into every management decision.
   Policies are only implemented with some modification from an informal leadership.


8. Lack of definition of tasks.
   When tasks are ill defined, workers clash with each other. In many instances, the supposed resolution by another staff, whose own tasks are not better defined leads to greater confusion. The task gets done the wrong way, through the advice and authority of an informal leader.


9. Over centralization of authority and decision making,
   This reduces productivity during the chief executives absence and makes the creation of an informal authority imperative.


4. How to detect the existence of a parallel structure


1. Regular audits to include investigation into the compliance of policies in normal processes.
   This provides an effective check. Discovery of a persistent breach may indicate the presence of informal leadership.


2. Old fashioned budgetary controls.
   An organization must be able to assess its performance against set objectives from time to time. In setting those objectives, some performance framework is assumed. A budget variation may be the first indication of a problem.


3. Performance audit and measurements of processes.
   The budget variation may now be followed by actual investigation.
   The results may reveal valuable information about the efficiency in the operation of the process.
   
   
4. Superlative recommendation of staff from another officer or member of staff.
   While it is not unusual to have outstanding members of staff, persistent commendations by a particular officer should be examined as it may contain a motive which may give rise to an informal source of authority.


5. How to prevent it
1. While it may be difficult to avoid populating a unit with staff related by tribe or ethnic group in an African setting, one must avoid those from the same village.


2. Must avoid employing people with the same referees or guarantors.


3. Avoid employing staff based on references from employees/officers or even Directors of the company.


4. While human resources consulting firms are great in getting skilled staff, an organization should occasionally try some others. Management should ensure that tasks are well defined. There should be no ambiguity about what each employee should do.
   This will reduce the incidence of clashes and may also eleminate the need of informal arbitration which may also impose an informal authority.


5. If a couple must remain in employment, (whether married or not) special care must be taken to ensure that their spheres of influence do not intersect


6. How to break down an informal management structure.
1. Evaluation and measurement of tasks. This should involve setting of goals and benchmarks for teams and groups which should always bear in mind the learning curve. This implies that benchmarks should improve with time with officers' performances. The process of upgrading and implementing such goals may result in merger of some processes while some others may be totally eliminated. The forming and dissolution of tasks and groups on a continuing basis puts staff in unfamiliar territory more often than what would take to build an informal structure.


2. Regular seminars training and workshops in implementing processes.
   The process of auditing and evaluating tasks and processes over time should produce some insights into what should be avoided, corrected or done right. This should be disseminated periodically through trainings, workshops and seminars. While making the process of measurement and evaluation easier, staff would be made to work differently from what hitherto might have sustained a formal structure.


3. Audit and management report evaluated against the efficiency of processes should reveal potential causes of distractions.


4. Designing and modifying checks and verifications into processes.
   In addition to checking abuses, constant changes should obliterate relationships and gains made under informal structures.


5. Occasional movement of staff around different units.
   This should also bring about the effects mentioned in 2 above.
   Parallel structures exists to some extent in virtually all organizations. Smaller ones are less vulnerable.


7. How to Positively manage it.
Formation of teams.
Where ad hock teams are formed to handle various issues, it is natural to find a mix which produces the best result most of the time.
There is therefore the temptation for management to commission this mix each time an issue comes up.
This may also bring up undesirable effect of forming close alliances which may result in an informal structure.
Management should consider substituting others into such teams, one at a time, until those unable to work with teams are discovered. These may turn out to be the real actors in the informal management structure.