Đề tài Reducing bureaucracy and encouraging a proactive attitude throughout the workplace

CENTRE FRANCO-VIETNAMIEN DE FORMATION À LA GETION ********************** GROUP ASSIGNMENT ON ORGANIZATIONAL BEHAVIOR Topic: Reducing bureaucracy and encouraging a proactive attitude throughout the workplace Instructor : Richard WARNEMINDE Done by : CFVG MBA 16A1, Group 2 Bui Thi Diem Huong Do Thi Thu Thuy Le Phong Tuan Mai Huu Luat Hanoi, December 2007 CONTENT Page PREFACE................................................................................................. Part I - Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned enterprises) Real situation of bureaucracy and non-proactive in Vietnam 1.2. Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned enterprises) Part II - Solution to reducing bureaucracy and making people more proactive in Vietnamese organizations 2.1. Why do we have to change 2.2. The difficulties and challenges we face 2.3. Overcome perception challenges 2.4. Moving people up the continuum of behaviors and change the organization culture. CONCLUSION....................................................................................... REFERENCE.......................................................................................... 2 3 3 4 5 6 6 9 11 15 PREFACE In recent years, Vietnam’s economy has quickly developed and integrated successfully into global business. In November 2006, Vietnam officially became a member of World Trade Organization (WTO). This may lead to significantly positive changes to this country, but it may also make many challenges. For example: unemployment, take over, competition, dependency or to lag far behind other countries. For those reasons, each domestic entity is required to rapidly innovate organizational structure and method of operation in order to adapt to more severely competitive business environment and moreover extend scope of activities worldwide. It aims to reduce bad impact and catch good opportunities originated from globalization. However, after 2 decades of innovation, many organizations in Vietnam on all fields are managed and ruined under bureaucracy, especially state-owned enterprises. Therefore there is an issue which should be discussed that specify causes and propose solutions in order to come to wipe old vestige and create new structures and institutions. This aims to build an dynamic business environment and help each person to promote the whole ability, to contribute to socio-economic development in a new era. So, senior members of the Vietnamese government and top business leaders also have repeatedly publicly stated that Vietnamese organizations must improve significantly to compete internationally. This has now become urgent because of Vietnam's becoming a member of the World Trade Organization (WTO). Experts state that there are two areas in particular which must be addressed: • Bureaucracy must be dramatically reduced. • Individuals must be more pro-active. They must show initiative, make decisions and implement them PART I :Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned ENTERPRISES) 1.1. Real situation of bureaucracy and non-proactive in Vietnam The bureaucracy and non-proactive in Vietnam reflects clearly in state owned enterprises (most in structure and people) where: • The input and output of state owned companies in Vietnam are set from top down, each state owned enterprise is a party who performs a specific function assigned by the state. Vertical structure is still widely applied. • Power distance is still strong as most junior employees think that seniors have a lot of experience about work and they know all the things so there is no way or chance to change. Ascription is overwhelming, people are evaluated by their working years not on actual results. 1.2. Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned enterprises) Through many studies, there are a lot of reasons but some of them are overwhelming: (structure, context, environment, commitment, perception, attitude) • Most of state owned enterprises are structured with functional orientation (vertical designs): each individual has his/her own job and only focus of that. The word “complete” means that he/she completes one part, that individual is not taught or trained to be responsible for the whole job. • Their perception is affected mostly by their colleagues that the managers, supervisors are always correct and right because they have plentiful of experience of the job. • Individual only concentrates on the job assigned and not concerns about customer’s satisfaction, final result of the team work. • Definition of team work is to group in a team but work individually, in another words, it can be said “individualism in collectivism”, individual wants feedback about their own performance as a member of a team first and then for the whole team. • Culture of information sharing is weak in Vietnam especially in state owned enterprises where the person who has information is the one who has advantage. So if they have information, experience or valuable lessons, they keep for their own. Information is considered as tangible asset and if someone else know, that means you lose. • Speaking up capacity of employees is quite little, people have ideas, however, they look at the example of precedents (that a lot of people with idea speaking up are sacked or rejected). State owned enterprises which depend mostly on state budget are not usually willing to take risks from new idea reality. • The ideas which are carried out in reality are the ones that come from the top of the companies (board of managers) who stayed far from the real situation. PART II - SOLUTIONS TO REDUCING BUREAUCRACY AND MAKING PEOPLE BECOME MORE PROACTIVE IN VIETNAMESE ORGANIZATION 2.1. Why do we have to change Why we need to change our organization, to reduce bureaucracy and to encourage employees especially managers to be more proactive? Vietnamese students have done very well in international competitions and brought home a lot of prizes and medals but the competitiveness of Vietnamese State Owned Enterprises (SOEs) is decreasing, SOEs are loosing in international market and even in domestic one, the growth rate is rather low compared to the private and foreign sector although they get a lot of subsidies and privileges from the government. The cause of the problem here is not the ability of the people but the way our organization do business, the old culture of the organization, the bureaucratic style. Vietnam joined WTO in late 2006 and the competition is being more and more fierce, a number of foreign companies in every fields are coming to VN to do business. If we want to compete we have to reorganize our structure and to change our working style if we do not change and do not change immediately we can not survive. Like a legendary CEO once said: “in order to survive tomorrow we have to learn to kill ourselves today”. 2.2. The difficulties and challenges we face The need for Vietnamese SOEs to change is obvious and urgent but why people do not want to change and only a little progress has been made so far. We should study and understand the causes in order to have the right solutions to the process. At first we should think that it is very difficult to change the culture of an organization which has existed for a long time and if we do not allocate enough thinking and resources failure is more likely than success. The culture always defends itself. It is nature that companies only change when “there is a sufficient significant emotional event threatening to bring real fear or pain”. There are people who like the current situation, the director of the SOE, who has a lot of power and privileges with very little responsibility. He or she can make money irrespective of the balance sheet of the company. He (in fact) does not have to be responsible for the company’s result and does not have to worry about losing his job. Many managers and workers may think the same because they are having stable job, and they still think that the government will continue to support them so the threat of failing the competition or going bankrupt is somewhere far in the future. One of the cause that people do not want to change is that Vietnam has come out from thousand of years in the feudal regime , where the king and the mandarins had power and privileges over the other and people think that makes sense, the power distance is rather high, most people accept that some one has more power than other as a matter of course. People normally think of themselves first (high individualistic) and their interest is placed above that of the organization’s and generally Vietnamese people often consider short-term perspective only that is why Vietnamese employees are not proactive. SOEs can not do the way they have been doing, the need to change is very urgent but there are too many obstacles, how do we overcome this? There are two main difficulties in implementing change in organizational culture : to design a new system which is better than the old one and to attempt people accept and embrace the new system. And everyone agree that the second task is much more difficult. Often people at the top are the most reluctant to change. The first and also the very important thing is perception. Everyone must realize the need to change. We have to create a common vision for the company. What will the company be like in the next 5 or 10 or 20 years, what is our goals: revenue, profit, what is our strategy, core values, management philosophy etc. Every one must contribute to creating the company’ vision and let they see what they benefit if the company get the goals. And because they join together to create so they will try to do to fulfill their plan. We should invite a lecturer (or by the CEO) to talk about the modern organization: what it is like, what its strength is and talk about some successful companies in the world, especially in VN with the same situation which applied the new model, and some other companies failed because of the old structure, bureaucracy, and not proactive. This will give everyone in the company brief information about how companies organize and operate, at least everyone will understand that there are more way to do a business besides our own one. But to make them change their way of thinking by doing this is not enough. 2.3. Overcome perception challenges To overcome this we should understand the nature of fear, identify the specific reaction and apply appropriate tools to get people go ahead. Is that the people afraid of change? psychologists state that this is not true. People want new things in life , they like wearing new clothes every days , new cars, visiting new places which are different from where they live. They do not expect to see the same thing everyday and the change in everyday life is considered good. But why are they afraid of change in the work place? The answer is that most of us are afraid of the unknown. They fear that the new system will involve loss, they may lose their power, their prestige, their current relationship, their ability and experience they have learned to do the job. They may lose their privileges or even the job itself, they do not known what they will be faced tomorrow. If we are threatened with the change we will do what we can to stop the change or at least slow it down. But if we know that the change will bring us a lot of good things : salary increase, promotion, recognition etc. we will support the change . But only if there is clear evidence of positive personal benefit people will only consider the negative aspects of change. So in order to start a change we have to understand the resistant of change and try to overcome this. The change of organization culture from a bureaucracy to a modern organization must start from the top manager and the external pressure plays an important role. The threat from competitors, losing of market share or the reduction of profit... will push the organization to change in order to survive, but without the internal motive the organizational change can not be effective and proactive. To change from a SOE to a JSC (Joint Stock Company) is an positive step to reduce bureaucracy and make employees especially managers to be more proactive. After creating a common vision for the company, all departments will together set the detail goals for each section and in order to reach those goals we must make a clear action plan. Now the company has a common goal and each department has its own targets and responsible for those targets because the people closest to the problem can solve it best so each department would do what are needed to reach their goal. They will think and discuss what should be Eliminated, Reduced, Raised, and Created to meet their goal that they are responsible for. And the reward system must be changed so that employees are paid according to their performance, to what they make for the company not according to seniority or their position only. All managers are responsible for his department’s targets and challenged by the CEO, other department and stakeholders... Once all employees especially managers have a common vision, and are allowed to make their own targets according to the company vision, they are also responsible for and paid depend on their performance they will try harder to reach their goal and be more proactive. The organization change is a long and hard process and it can be successful only when all the employees understand and execute the change. But the perception is a very complex cognitive process and every one has his own filter. A person perceives something according to his taste, intelligence and experience etc. How can we check whether all people in the organization understand and support the change? We have to learn to identify the reaction to change which can be broken down into 6 specific behaviors ( according to Doug Howardell ) : Flight Fight Doubt Explore Accept Embrace Each of the actions has specific behaviors and what we have to do is to observe the actions, classify them and then apply appropriate tool to get people to go through the continuum of behaviors. The first reaction is normally Flight . People who resist change through Flight often miss the meeting, they find some excuses to not show up, or even if they come, they may come late and at the meeting they do not pay attention. They often have a plan of their own but they do not reveal. The second reaction is Fight. They will resist at any time possible, they explain why the new process won’t work and they may find other people with the same thinking. The implementation of the change may be delayed or destroyed if one or some important managers are in the first 2 positions. The next step of reaction is Doubt, people in Doubt may admit that there is better way or at least there are more way but they do not support the implementation, they avoid making decision, they ask for help and slow down the change. Then the next stage is Explore, people in this stage may appear cautious and distant, they require time to think before they give opinion. After this stage people will go to the next one: Accept change. In this stage they fully support the change and ready to go to the highest stage: Embrace change. They feel enthusiastic and share what they know and what they learn and seek to empower other. 2.4. What to do to move people up the continuum of behaviors and change the organization culture. The first thing we have to do is to explain why we have to reduce bureaucracy and to be more proactive and what the organization will be like, and raise the level of discontent of the current process to make people agree that the current process is not perfect. Let everyone write down the drawbacks of the bureaucracy and not proactive so that all the problems are visible. This may make the people to agree with the change or accept that some thing must be done. Research shows that “people remember and respond most effectively to what they see and experience. Positive stimuli reinforce behavior whereas negative stimuli change attitude”. Send some top managers for benchmarking other successful companies or let them “come face to face with poor performance, showing the worst reality”, “ get them to listen to their most disgruntled customers directly”. We can also use the method “walk a day in someone’s shoes” like it has been applied at Southwest Airline, by sending some people to do some work which involves a lot of things like asking for licenses or form filling or kind of that in other SOE so they can understand how bureaucracy affect the customers’ satisfaction. Then explain in detail what is the changed state look like, what is the vision and what to expect in the transition of change, how the bureaucracy is reduced, what measures to take to make people to be more proactive in the work place, how long the change process takes and the cost to change and what the outcome is, how people benefit from the change . Then to build a coalition and get all the people to join. To make the people in the organization understand and support , first we need to understand what they concern, the reasons why they do not want to change, what is their difficulties. Try to understand their point of view before they can understand ours. After we listen to them and understand them, we will have a good chance to explain our plan and we all find that there are a lot of common interests in what we are doing. Since all people, all managers feel understood and understand that the change will make them better it is likely that they will support or at least won’t resist the change process and it is time to move the plan to the next step. And remember that “little success will pave the way to new success”, this will make everyone feels positive about the change process. After people show the discontent and drawbacks of the current process, and after the benchmarking trip or listening to their most disgruntled customers, experiencing some real situation we will hold a meeting. In the meeting we let people discuss freely what should be done to improve the current situation and all opinions are recorded and analyzed what could be done now and what will be done later. We have to direct the meeting and finally all will come to a conclusion that we should: • Build horizontal structure based on core processes which will facilitate cooperation, and maximize customer and supplier contact. • Match the people with the work based on their skills and talent, give managers and other appropriate training, responsibility and power to do their tasks • Team work building, train people to work together from start to finish. • Customer orientation: receive claim and feedbacks from customers and respond to their need. Forecast what they need and satisfy them. • Encourage people to be willing to take risk that is the way we cope with change, and try to learn from their failure, “failure is success if we learn from it”. This together with “performance based reward” will play an important role in making people more proactive. One of the biggest reasons why people include managers in SOE are not proactive is the fear of failure (high level of uncertainty avoidance) if they succeed they get nothing but if they fail they lose everything. They do not have the “willpower”. Remember that it is not acceptable to repeat the same mistake. All the experience, successes or failures should be shared for everyone to draw lessons from them. • Establish the new reward system that bases on performance, people with good initiatives and contribution are rewarded and who do not perform up to expectation are encouraged to do better. This is a difficult task, we should understand what people expect and try to do that everyone can see it is fair for all. All the criteria for reward, promotion etc. should be clear and transparent • Create a friendly working environment so all people feel that working place is just like their home and encourage people to share their knowledge and skills. Hold outside activities for all people and their family, this is a chance for all people to meet in an open environment, talk and understand each other. • Motivate people to think outside the box, create “Blue Ocean” products and services which differentiate from other, create more value for customers. We should always remember that changing an organization culture is not smooth sailing but a painstaking job. The change process must be taken step by step with challenging but attainable goal. The management must try to understand the expectation of all employees and satisfy and motivate them. Based on the hierarchy of work needs develop a policy which fulfills their desire, hope and expectation which may include: Revise the payment system, raise their income, part of the profit must return to those who made it. Increase job security, health insurance, pension program, welfare etc. Improve working conditions Empowerment: allocate responsibility and authority and give necessary conditions for individuals to develop and advance in their career, help them realize their ambition and dream etc. Receive feedback and make adjustment At the same time we have to develop positive organizational behavior in the organization that include: optimism, hope, happiness (SWB), resiliency, emotional intelligence and self-efficacy. These POB will make people more energetic, dynamic and ready to cope with difficult and challenging tasks, significantly improve performance especially in the long run. Establish some suitable training program in the organization to improve their skills and give them support when they deal with difficult tasks. Professional training is indispensable for managers to improve work performance. The training should be corresponding to the real task so it will increase confidence when they do the real work. The targets must be attainable and once they succeed they will be more self-confident, optimistic and self-efficacy. Be careful when giving negative feedbacks this may make them feel unhappy and lost confidence. Let all employees see that failure is just an opportunity to learn and once you fail you are one step closer to success. Fear of failure make us be more careful but can not let it stop us doing things. Never give up and never give in. By continuing to do that and make necessary adjustment the company’s performance and competitiveness will be improved and gradually bureaucracy will be reduced, managers and employees are more proactive and company’s culture will change. CONCLUSION Vietnam already became a member of the World Trade Organization and is integrating into many international organizations in the region and over the world. This requires Vietnamese organizations to change to adapt to new situation. Therefore, it is necessary for Vietnamese organizations to abandon backward management and apply new management styles. For this reason, reducing bureaucracy and making people become more proactive in Vietnamese organizations is very essential and do so, by knowledge learnt from Organizational Behavior subject, we need to try to apply to the course of industrialization and modernization in Vietnam. REFERENCES 1. Blue Ocean Strategy – Harvard Business School Press - 2005 By W. Chan Kim and Renee Mauborgne 2. “Change Management”. By Doug Howardell – ACA Group 3. “Getting Your Boss To Change “ By Doug Howardell – ACA Group 4. Knowledge Management Center – LG Electronics 5. Organizational Behavior – Tenth Edition - McGraw-Hill Irwin By Fred Luthans 6. The World Is Flat – 2005 By Thomas L. Friedman 7. And Sources from internet