(a) "An organisation without goals is like a rudderless ship." Comment and explain the importance of goals. 20 (b) Explain the…

(a) An organisation without goals is like a rudderless ship

The statement is true. A ship without a rudder may move with the wind and the current but cannot reach a chosen port; an organisation without goals has activity but no direction, and its energy is wasted or pulled in conflicting ways. Goals are the desired future states that an organisation exists to achieve, and they give meaning to its structure, effort and measurement. Drucker stressed that every organisation needs clear objectives in all key result areas.

Importance of goals:

• Direction and focus: they tell members what to aim for, so that effort and resources go to priorities.
• Coordination: they align the work of departments and avoid conflict between units, through a hierarchy that runs from the mission and strategic goals to departmental and individual targets.
• Motivation: specific, challenging goals raise effort and commitment, as Locke's goal-setting theory shows, and give a sense of achievement.
• Planning and decision making: they are the premises for plans, budgets and choices among alternatives.
• Basis of control and appraisal: results are measured against goals, so that deviations can be corrected and performance judged, as in management by objectives.
• Legitimacy and resource gathering: they justify the organisation's existence to shareholders, employees, the public and funders.
• Unity of purpose and culture, as shared goals bind people from different backgrounds.

Goals are effective when they are clear, measurable, attainable, time-bound and accepted by those who must achieve them. Goals set too rigidly can lead to a narrow focus, unethical short-cuts and neglect of other ends, and they must be reviewed as the environment changes. On balance, goals are the necessary rudder, but they must be used with flexibility.

(b) Quality circle system: objectives and phases of establishment

A quality circle is a small voluntary group of employees from the same work area, usually 6 to 12, who meet regularly to identify, analyse and solve work-related problems of quality and productivity. It began in Japan in the early 1960s (Ishikawa, JUSE) and is a tool of participative management.

Objectives:

• To improve quality, productivity and reduce costs and waste.
• To use the knowledge of workers and develop their skills and problem-solving ability.
• To raise morale, motivation and sense of ownership, and improve superior-subordinate relations.
• To build teamwork, communication and a culture of continuous improvement.
• To reduce errors, absenteeism and conflict.

Phases of establishment:

• Preparation: management commitment, a steering committee, a facilitator and a policy; awareness among employees and unions.
• Training: members and leaders are trained in group dynamics and problem-solving tools such as brainstorming, Pareto analysis and cause-and-effect diagrams.
• Formation: circles are formed on a voluntary basis with a leader, and are registered.
• Problem identification and selection: members list problems and choose the most important within their control.
• Analysis and solution: the problem is analysed with data, solutions are developed and tested.
• Presentation: findings go to management for approval of the recommendations.
• Implementation and review: the solutions are put into practice, results are monitored, and recognition is given. The programme is evaluated, and the circle moves on to new problems.

(c) Organic and mechanistic structures

Burns and Stalker described the mechanistic structure as a rigid, bureaucratic form with clear rules, and the organic structure as a flexible, network-like form. They are broadly opposite:

• Hierarchy and authority: mechanistic structures have a tall hierarchy with authority at the top; organic structures are flat, with authority based on knowledge and spread out.
• Rules and tasks: mechanistic structures have formal rules and narrow, fixed jobs; organic structures have few rules and broad, changing roles.
• Communication: vertical and formal in mechanistic structures; lateral, informal and two-way in organic structures.
• Decision making: centralised in mechanistic structures; decentralised in organic structures.

Mechanistic structures suit stable environments and routine tasks, and organic structures suit dynamic, uncertain ones. They are not absolute opposites but the ends of a continuum, and many firms combine both, with organic units for innovation and mechanistic ones for operations.