Organisation Design and Organisation Development

Working on the “Newskool Grooves” case study and drawing on relevant organisation design and

development theory address the following tasks:

Identifies and describes the nature of topic(s) critically and thoroughly

Literature review (30%)
Has evidence of reading on relevant material beyond those given in teaching sessions or exercises
Refers extensively to sources
Evaluates literature logically and critically

Analysis and discussion (35%)
Presents strong and critical analysis and discussion well-grounded in literature
Shows both depth and breadth of understanding of the topic(s)

Conclusion and recommendation (15%)
Summarises the assignment thoroughly and critically
Provides realistic and feasible recommendations

Presentation and reference (10%)
Conveys all information clearly and completely with logical order
Displays excellent use of reference style

The Scenario

Newskool Grooves is a transnational company developing music software. The software is used to compose

music, play recordings in clubs, and produce albums. Founder and CEO Gerd Finger is, understandably,

the company’s biggest fan. “I started this company from nothing, from just me, my ideas, and my

computer. I love music—love playing music, love writing programs for making music, love listening to

music—and the money is nice, too.” Gerd says he never wanted to work for someone else, to give away his

ideas and let someone else profit from them. He wanted to keep control over them, and their image.

“Newskool Grooves is always ahead of the pack. In this business, if you can’t keep up, you’re out. And

we are the company everyone else must keep up with. Everyone knows when they get something from us,

they’re getting only the best and the newest.”

The company headquarters are in Berlin, the nerve center for the organization, where new products are

developed and the organizational strategy is established. Newskool outsources a great deal of its

coding work to programmers in Kiev, Ukraine. Its marketing efforts are increasingly based in its Los

Angeles offices. This division of labor is at least partially based on technical expertise and cost

issues. The German team excels at design and production tasks. Because most of Newskool’s customers are

English speakers, the Los Angeles office has been the best group to write ads and market products. The

Kiev offices are filled with outstanding programmers who don’t require the very high rates of

compensation you’d find in German or U.S. offices. The combination of high-tech software, rapid

reorganization, and outsourcing makes Newskool the very definition of a boundaryless organization.

Gerd also makes the final decision on hiring every employee for the company and places a heavy emphasis

on independent work styles. “Why would I want to put my company in the hands of people I can’t count

on?” he asks with a laugh. “They have to believe in what we’re doing here, really understand our

direction and be able to go with it. I’m not the babysitter, I’m not the school master handing out

homework. School time is over. This is the real world.”

The Work Culture

Employees want to work at this company because it’s cutting edge. Newskool’s software is used by a

number of dance musicians and DJs, who have been the firm’s core market, seeing it as a relatively

expensive but very high-quality and innovative brand. Whenever the rest of the market for music

software goes in one direction, it seems like Newskool heads in a completely different direction in an

effort to keep itself separate from the pack. This strategy has tended to pay off. While competitors

develop similar products and therefore need to continually lower their prices to compete with one

another, Newskool has kept revenues high by creating completely new types of products that don’t face

this type of price competition.

Unfortunately, computer piracy has eroded Newskool’s ability to make money with just software-based

music tools, and it has had to move into the production of hardware, such as drum machines and

amplifiers that incorporate its computer technology. Making this massive market change might be

challenging for some companies, but for an organization that reinvents itself every 2 or 3 years like

Newskool does, the bigger fight is a constant war against stagnation and rigidity.

The organization has a very decentralized culture. With only 115 employees, the original management

philosophy of allowing all employees to participate in decisionmaking and innovation is still the

lifeblood of the company’s culture. One developer notes, “At Newskool, they want you to be part of the

process. If you are a person who wants to do what you’re told at work, you’re in trouble. Most times,

they can’t tell you what they want you to do next—they don’t even know what comes next! That’s why they

hire employees who are creative, people who can try to make the next thing happen. It’s challenging,

but a lot of us think it’s very much an exciting environment.”

The Boundaryless Environment

Because so much of the work can be performed on computers, Gerd decided early to allow employees to

work outside the office. The senior management in Berlin and Los Angeles are both quite happy with this

arrangement. Because some marketing work does require face-to-face contact, the Los Angeles office has

weekly in-person meetings. Employees who like Newskool are happiest when they can work through the

night and sleep most of the day, firing up their computers to get work done at the drop of a hat.

Project discussions often happen via social networking on the company’s intranet.

The Kiev offices have been less eager to work with the boundaryless model. Managers say their computer

programmers find working with so little structure rather uncomfortable. They are more used to the idea

of a strong leadership structure and well-defined work processes.

“When I started,” says one manager, “Gerd said getting in touch with him would be no problem, getting

in touch with L.A. would be no problem. We’re small, we’re family, he said. Well, it is a problem. When

I call L.A., they say to wait until their meeting day. I can’t always wait until they decide to get

together. I call Gerd— he says, ‘Figure it out.’ Then when I do, he says it isn’t right and we have to

start again. If he just told me in the first place, we would have done it.”

Some recent events have also shaken up the company’s usual way of doing business. Developers in the

corporate offices had a major communications breakdown about their hardware DJ controller, which

required many hours of discussion to resolve. It seems that people who seldom met face to face had all

made progress—but had moved in opposite directions! To test and design the company’s hardware products,

employees apparently need to do more than send each other code; sometimes they need to collaborate face

to face. Some spirited disagreements have been voiced within the organization about how to move forward

in this new environment.

The offices are experiencing additional difficulties. Since the shift to newer products, Sandra Pelham

in the Los Angeles office has been more critical of the company. “With the software, we were more

limited in the kinds of advertising media we could access. So now, with the hardware—real

instruments—we finally thought, ‘All right, this is something we can work with!’ We had a whole slate

of musicians and DJs and producers to contact for endorsements, but Gerd said, ‘No way.’ He didn’t want

customers who only cared that a celebrity liked us. He scrapped the whole campaign. He says we’re all

about creativity and doing our own thing—until we don’t want to do things his way.”

Although the organization is not without problems, there is little question Newskool has been a

standout success in the computer music software industry. While many are shuttering their operations,

Newskool is using its market power to push forward the next generation of electronic music-making

tools. As Gerd Finger puts it, “Once the rest of the industry has gotten together and figured out how

they’re all going to cope with change, they’ll look around and see that we’re already three miles ahead

of them down the road to the future.”

Recommended readingKey textbooks: organisation design

The theory and practice of change management – Hayes, John 2014

Managing quality – B. G. Dale, Anthony van der Wiele, Jos van Iwaarden 2007 (electronic resource)

Managing change: a strategic approach to organizational dynamics – Burnes, Bernard 2009

Managing change: a strategic approach to organisational dynamics – Burnes, Bernard c2009 (electronic

resource)

Managing change in organizations – Carnall, C. A. 2010

Organisational structure: an essential lever in managing change – Cunneen, Patrick c2008

Organization: theory and design – Daft, Richard L., Murphy, Jonathan, Willmott, Hugh c2010

Managing quality – Dale, Barrie G., Wiele, Anthony van der, Iwaarden, Jos van 2007

Organization development: a Jossey-Bass reader – Joan V. Gallos, MyiLibrary 2006 (electronic resource)

Quality management essentials – Hoyle, David, MyiLibrary 2007 (electronic resource)

Quality management essentials – Hoyle, David 2007

Change management: a critical perspective – Hughes, Mark, Chartered Institute of Personnel and

Development 2006

Organizational theory, design, and change – Jones, Gareth R. c2010

Images of organization – Morgan, Gareth c2006

Organizational development: a practitioners’ guide for OD and HR – Cheung-Judge, Mee-Yan, Holbeche,

Linda 2011

Organizational change – Senior, Barbara, Swailes, Stephen 2010

Key textbooks: organisation development

People and organisational development: a new agenda for organisational effectiveness – Francis, Helen,

Holbeche, Linda, Reddington, Martin 2012

Reinventing organization development: new approaches to change in organizations – Bradford, David L.,

Burke, W. Warner c2005

Managing change in organizations – Carnall, C. A. 2010

Organization development: a Jossey-Bass reader – Joan V. Gallos, MyiLibrary 2006 (electronic resource)

Organization development & change – Cummings, Thomas G., Worley, Christopher G. 2008

Change management: a critical perspective – Hughes, Mark, Chartered Institute of Personnel and

Development 2006

Change management: a guide to effective implementation – Paton, Rob, McCalman, James 2008

The fifth discipline: the art and practice of the learning organization – Senge, Peter M. 2006

Key journals

http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1748-8583
OR
http://onlinelibrary.wiley.com/store/10.1111/(ISSN)1748-8583/asset/homepages/HRMJ_SPECIAL_ISSUE_CfP_-_E

mployer_engagement_Feb_2015.pdf?v=1&s=b2caa03792f4a0d185a63be19a9d2522377e340d

International Journal of Human Resource Management [online]

People Management [online]
or
http://www.cipd.co.uk/pm/

Personnel Review [online]
Or
http://www.emeraldinsight.com/loi/pr

Work, Employment and Society [online]
OR
http://wes.sagepub.com/content/by/year