Design Management

1 Organizational Structure

Henry Mintzberg defines the structure of an organization as "the total of the ways in which its labour is divided into distinct tasks and then its coordination achieved among those tasks." He also says that "a limited number of configurations can help explain much of what can be observed in organizations." (Mintzberg, 1989)

The structure of a company thus determines the division of labour, the co-ordination of tasks, as well as lines of communication and responsibilities. By establishing formal authority, positions in the hierarchy or network, and reporting relationships, the organization provides a framework for its management and operations. Organizational structures encompass human resources, the environment, business systems and technology. They enable the delegation of functions and promote efficiency. Broadly speaking, a plan of action is devised by top-management, translated by middle-management, and implemented by supervisors and employees.

2 People Management

A key leadership competency is "the ability to communicate across professional and operational boundaries so as to effectively link functions and resources for the common good." (Mai, 2003)

The management of professionals and creatives - designers, architects, software developers, researchers - goes beyond mere supervision. Professional workers have specific needs, they have invested in their education and are motivated to succeed. Creative individuals expect an amount of freedom and autonomy while "the personal, psychologically risky nature" of their work (Foote, 1996) requires meaningful recognition and support.
Despite short term productivity gains, the value of human resources usually decreases under autocratic leadership. The preferred management model for creative services firms tends to be that of mentor and performers. "The perception [by professionals] that fairness has been exercised" (Mai, 2003) implies their pro-active part in a dialogue with management, e.g. knowing the reasons behind a decision that affects their work. This process extends to employee critique, formal evaluation, and recommendations for change.

3 Communication

Language can be used in a rigid manner to describe reality or language can be used creatively to make that reality. Most organizations have their own kind of 'grammar': Conversations, written communications, or types of interaction all indicate how a company works, which directions it will take, and how it could be transformed.

Supervisory-subordinate relationships are distinguished by downward and upward communications. A downward communication process, comprising formal letters, memoirs and reports, flows from superior to subordinate; upward communications (like informal feedback) flow from subordinate to superior. Horizontal communication processes occur at peer level and are vital for managing professionals "because [this] enables specialists to pool their knowledge in a professional group." (Shell, 2003)

Supportive communication is:

• Problem-oriented, not person-oriented;
• Descriptive rather than evaluative;
• Validating, not invalidating;
• Specific, not global;
• Less directive and more facilitative.

The communication objectives in a professional staff operation should adhere to company strategies, enable understanding and development, correct deficiencies, and promote a collegial atmosphere.

4 Direction & Control

Controlling concentrates on "the regulation of business activities in relation to the original plan." Directing is defined as "the guiding of work toward the accomplishment of organizational objectives" (Shell, 2003). Both are intrinsic aspects of management.

Organizational structures permit the division of labour and address the communication and co-ordination needs of the firm. The basis of direction and control is responsibility. Functional similarity enables the delegation of authority which is the formal power to act. Professionals are considered to have functional authority within their area of expertise.
In a creative services firm, most executive tasks, project management, client contact and marketing can be delegated. Delegation helps decentralise the decision-making process and is essential to managing professionals. Effective delegation defines the task (briefing, monitoring, evaluation) but encourages staff to use their own methods.

5 Decision Making

"Design is the conscious decision-making process by which information (an idea) is transformed into an outcome." (Von Stamm, 2003)

A preferred course of action may be selected when goals, priorities and alternatives are known. Unlike poorly-structured problems, a routine problem can be automated using a computer system. What remains with management is their responsibility for decision-outcomes. A systems analysis methodology can be used to aid decision-making processes by:

• Describing the problem space;
• Defining the objectives;
• Identifying alternatives;
• Making certain assumptions;
• Recognizing constraints;
• Specifying criteria;
• Collecting data.

The data is eventually analysed and several alternatives formulated for the decision-making stage. The systems analysis approach is often preferred for the management of professionals. It accommodates their feedback and participation which permits them to exercise advisory authority. This enables the decision-maker to acquire a balanced view of the situation (top certainty).

6 Strategy and Planning

Companies operate in a competitive environment. They race to access resources - people, space, money, customers - and depend on the performance of their products to win. A good strategy anticipates technological developments, economic conditions, and socio-political trends. In formulating competitive strategies, a company must deal with buyers, suppliers, substitutes and competitors. Strategic planning supports company objectives and contributes to an appropriate course of action.

Management relies on statistical data to make its projections - that is to say, forecasting enables the planning and maximization of business resources. A plan first ascertains the current state [of the firm] and then sets goals, including milestones and performance indicators, for reaching the desired target state.
Planning is highly centralized in a top-down approach, meaning that company aims and methods are assigned to every division by upper management. The bottom-up approach, by contrast, allows all divisions to formulate their own goals based on locally acquired data and experience. With interactive planning, each division supplies top management with local information. This enables the development and downward transfer of broad definitions that can be implemented in conjunction with division-specific guidelines. In scenario planning, companies create different strategies in order to rehearse for possible futures.

7 Leadership

We are not afraid to entrust [the people] with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people. (John F. Kennedy)

I never say 'never,' and I never say 'always.' (Grace Kelly)

Leaders may emerge and prevail with the necessary preconditions* and their ability to play the role. Leadership styles can be autocratic, bureaucratic, laissez-faire or democratic. The autocratic approach may be quick and easy, however, the value of human resources usually decreases under autocratic leadership. Democratic managements tend to convey clear company goals, invite more staff input, and promote the sharing of knowledge.

"The only thing that is constant is change" (Heraclitus). Companies will need to restructure, rebrand or even merge more frequently than before in response to global digitalization and changing market conditions. The reconfiguration of an organization can be slow, costly, and painful while producing highly delayed or uncertain results. Leaders who generate "a sense of opportunity, rather than confusion, in the face of change" (Mai, 2003) connect positively with staff, engage their support, and steer the firm through difficult transitions.

* Attention is drawn to the German phrase vorherrschende Bedingungen; vor|herrschen literally means to pre|rule.

Author: Marcel Ritschel, Date: 07.06.2007 (revised: 2017)
Assignment for Practice Management 89302; University of Technology, Sydney