CHAPTER 17

Coordination

CHAPTER OBJECTIVES

After reading this chapter, you should be able to:

1. Understand the meaning of coordination
2. Describe the significance of coordination
3. Enumerate the principles of coordination
4. Discuss the types of coordination
5. List the steps in the coordination process
6. Evaluate the techniques of coordination
7. Explain the requirements for effective coordination

India’s Inspirational Managers

R. S. Butola is the former chairman of Indian Oil Corporation Ltd., which is India’s largest company with a sales turnover of ₹ 409,957 crore. IndianOil is the highest ranked Indian company in Fortune’s Global 500 listings, ranking at the 83rd position. Before joining IndianOil, Butola was the managing director of ONGC Videsh Ltd. (OVL). Butola is also the chairman of Petroleum Federation of India (PetroFed). He has rich and diverse experience in all aspects of the hydrocarbon industry ranging from project development and execution to commercial closures. Under his stewardship, IndianOil was engaged in an enterprise-wide exercise to strengthen its internal system by optimizing the supply chain and achieving zero-process interruption. Butola is well-focused on building bench strength in his company’s core businesses. Butola won the coveted Lifetime Achievement Award from the Dainik Bhaskar group for his stellar roles as a team leader, a game changer and a motivator. Keeping his achievements in the background, we shall now discuss coordination.

Introduction

Coordination, as a managerial function, involves the establishment of links between the various parts of an organization. Besides people and processes, coordination is also equally important to ensure the smooth functioning of all components of an organization. It ensures that the whole organization moves in a common direction towards the accomplishment of goals and objectives. Coordination thus becomes imperative to fulfilling the strategic and operational objectives. Traditional literatures on organizations recognize coordination as a paramount function of management.¹ Coordination not only supports the integration of the organizational activities but also facilitates effective decision making by the managers. This is possible because coordination enables managers to anticipate and react quickly to the changes in the internal and external environment that need organizational adjustment.²

In many organizations, coordination is the key competence that drives performance. It is generally viewed as an end result of the management process. This is because the management function is only about the coordination of all activities, efforts and the internal and external forces that impact the organization. Coordination is essential for integrating tasks and resources for accomplishing the organizational objectives. It also enables managers to establish collaborative relationships among various resources like human resources and physical resources of the organizations. It thus serves as a key to all managerial functions. Coordination becomes more important in organizations where effective interaction of decisions made by different groups of people are critical to the success of goal initiatives. Through coordination, management ensures that all managers undertake goal fulfilling actions alone.

Definitions of Coordination

Coordination is all about establishing a relationship, and therefore people should know the different patterns of relationships. Obviously, many authors of coordination emphasize on the interrelationship and interaction of functions in their definitions. Let us now look at a few definitions of coordination.

“Coordination is the orderly arrangement of group effort to provide unity of action in the pursuit of a common purpose.”—Mooney³

“Coordination is the effort to assure a smooth interplay of the functions and forces of all different parts of an organization to the end that its purpose will be realized with a minimum of friction and maximum of collaborative effectiveness.”—Tead⁴

“Coordination is the conscious process of assembling and synchronizing differentiated activities so that they function harmoniously in the attainment of organizational objectives.”—Haimann and Scott⁵

“Coordination is the process of developing the required patterns of group effort and securing unity of action for the accomplishment of common goals.”—Dalton McFarland⁶

“Coordination refers to the quality of collaboration across departments.”—Richard L Daft⁷

We may define coordination as the process of integrating the various activities in an orderly manner with the intention of accomplishing the organizational goals.

From the above definitions, it becomes clear that shared knowledge, shared goals and mutual respect are the three important characteristics of coordination.

Significance of Coordination

Similar to any other managerial function, coordination also plays a crucial role in the accomplishment of objectives and goals in the organization. Let us now see the importance of coordination as a managerial function.

1. Coordination is a continuous activity of an organization. Similar to other managerial functions, managers need to perform coordination function continuously to achieve the organizational goals and objectives repeatedly.
2. It aims at achieving unity of action. Specifically, it enables an organization to unify all its activities and channel them towards the accomplishment of organizational goals. Coordination is also capable of producing synergy effect, which means the total result is greater than the sum of individual achievements. It aims at achieving required patterns of group and individual performances necessary for the smooth functioning and efficient accomplishment of an organization.
3. Coordination is in effect the responsibility of all the managers at all levels of an organization. Coordination ensures stability and growth of an organization by helping the managers to connect different departments and sections and weld them as one entity. It thus enables managers to view the organization as a whole and avoid narrow sectional goals and interests.
4. Coordination is necessary to ensure the smooth interplay of different functions performed by an organization both within and outside of it. Integration and balancing of individual efforts also guarantee the presence of a smooth and harmonious work team.
5. It facilitates efficient management of resources and time. It also avoids waste and duplication of work, and overlapping efforts, and thus reduces cost.
6. It helps managers improve the human relations by reconciling organizational and individual goals. It also promotes commitment and loyalty among the employees. Box 17.1 shows the coordination and realignment initiatives of a multinational company.

Principles of Coordination

When an organization grows in size and shape, two things always occur. They are: (i) new positions and departments are added to deal with the new developments, opportunities and threats emerging in the external environment and to meet the changing goals and needs of an organization and (ii) managers searching for ways and means to integrate the activities of all these positions and departments. These developments necessitate the presence of effective coordination. To make coordination effective, Mary Parker Follett⁸ has suggested four principles of coordination (Figure 17.1). We shall now briefly discuss these principles.

Principle of Direct Contact

According to this principle, each manager should maintain direct or personal contact with his or her subordinates. Direct contact is often viewed as the best way of conveying ideas and information effectively. It also facilitates the exchange of opinions and suggestions between the managers and subordinates. It thus ensures that there are no misunderstandings and tensions in the relations between the managers and subordinates. It can also avoid any possible conflicts and disputes in the relations. Generally, direct contact can be established with the help of face-to-face meetings through conferences, committees, etc.

Principle of Early Stages Coordination

As per this principle, management should begin the process of coordination even at the early stage of enterprise formation. The rationale behind this principle is that coordination can be achieved easily and effectively if it is undertaken in the early stages of planning and policy formulation. Understandably, managers need to have a long-range vision while undertaking the coordination function.

Principle of Reciprocal Relations

As per this principle, managers must first ascertain the likely effect of their decisions on other people and departments within the organization. This is essential because of the interrelated nature of people and departments in the organization. For instance, the decision or action of one person in any one department may impact the decisions or actions of others in the same or other departments. Therefore, managers must give due importance to the interrelationship while devising their coordination strategy.

Principle of Continuity

This principle insists that managers must view coordination as a continuous activity and not as a one-time activity. Simply put, coordination as a managerial function begins and ends with an organization. It should, therefore, be able to perpetuate itself. Managers should continuously coordinate the various activities of the organization irrespective of the changes in the plan, policies, activities and situation.

Types of Coordination

George Terry, who views coordination as a dynamic activity, classified it into four types. They are: (a) coordination within an individual, (b) coordination among individuals of a group, (c) coordination among groups of an enterprise and (d) coordination with those of other enterprises and forces (like government regulatory measures, economic conditions, etc.).⁹ Based on the number of people involved and nature of activities undertaken, coordination can be categorized as internal coordination and external coordination. We shall now briefly look at each of them.

Internal Coordination

Coordination within an organization is typically known as internal coordination. It involves coordination among different individuals, groups, units and departments of an organization. It also refers to the integration of financial, material and human resources available with an organization for organizational purposes.

External Coordination

Coordination between an organization and its external environment is called external coordination. It typically involves coordination with suppliers, customers, trade unions, competitors, shareholders, banks, government agencies and all others who interact with the organization from outside. Effective internal and external coordination is an essential prerequisite for the smooth and successful functioning of organizations.

Depending on the level of management, coordination may also be classified as vertical, horizontal and diagonal coordination.

1. Vertical coordination—means the coordination of activities carried out at different levels of the management. Vertical coordination is achieved among people in superior–subordinate relationships. Coordination between the top and middle levels of management is an example of vertical coordination. Similarly, when the department head (say, sales manager) coordinates the activities of the subordinates (say, sales team) working under him, it may be called vertical coordination.
2. Horizontal coordination—is the coordination across functional departments such as marketing department, purchase department, finance department, HR department, etc. It can also be achieved among peers working in the same department. It typically involves the activities carried out at the same level of management. Horizontal coordination is a key function in any organizational structure.¹⁰ A successful production or marketing requires various departments to cooperate and communicate with each other over a period of time. Managers achieve horizontal coordination through direct contact between departments, information system, task forces, teams and full-time integrators.¹¹
3. Diagonal coordination—means the coordination of activities performed at different levels and different departments of the organization. In large organizations where top management has no direct access or proximity to the working arrangement, diagonal coordination can be effective. This coordination becomes more important when different departments depend on a particular department to accomplish a specific goal.

Techniques of Coordination

An organization can achieve coordination in a variety of ways. As seen in Figure 17.2, the major techniques of coordination are authority, objectivities, policies, procedures, rules, methods, committees, conferences, coordinators, communications, collective bargaining, performance reviews and managements, information technology tools and voluntary coordination. We shall now briefly discuss these techniques.

Authority

Authority is the capacity to evoke compliance in others.¹² It ensures that people comply with the orders and instructions issued by their superiors. Authority facilitates coordinated behaviour among the organizational members towards goals and activities. In organizations, interpersonal relations are mostly structured and organizational activities are coordinated in terms of the prescribed authority of the managers.

Objectives

Objectives are capable of providing direction to the whole organization. They also enable the management to achieve unity of action and direction. This facilitates the managers to achieve coordination with ease.

Policies, Procedures, Rules and Regulations

Policies, procedures, rules and regulations are used by the management to standardize the behaviour of members. Policies help to ensure that the members’ behaviour in the workplace conform to the organizational rules and external laws. It also makes certain that the members’ behaviour meet the expectations of the management. Typically, policies apply to particular situations in the form of procedure. Procedures may be defined as step-by-step list of activities needed to carry out predetermined tasks. Policies and procedures aim at ensuring that all the activities of an organization are performed in an efficient manner. In brief, these procedures and policies help the managers to achieve conformity in employees’ behaviour and coordination of their activities.

Committees

Committees are generally made up of members representing different departments. Managers can achieve coordination among employees working under them by forming committees or work groups. Since committees are made up of a small number of members with frequent interactions, they facilitate better coordination among these members.

Conferences

Conferences are used for achieving effective coordination among the organizational members. Since conferences involve wide membership, they become effective forums for the managers to discuss various common issues and reach understanding on important organizational issues. Such understanding in turn helps in ensuring better coordination of activities and cooperation among members.

Coordinators

Organizations may use a coordinator for integrating the activities of various departments. In organizations, coordinators are also known as integrators or liaisons. Coordinators normally work in one department and coordinate the activities of one or more departments. The primary role of coordinators is to represent their units, departments or divisions in the meetings, conferences, etc. They participate in the discussions and pass on the information gathered from the meetings with the members of their departments. For instance, coordinators may disseminate information on issues, policies and regulations to their department people. Box 17.2 shows the role of integrators in consumer packaged goods companies.

Communication

In organizations, communication is another effective and useful instrument for coordinating the activities of the organizational members and achieving common understanding on matters of importance. In this regard, managers may use e-mails, circulars, notices, memos, internal magazines, staff meetings and verbal announcements to communicate necessary information to the organizational members working across different departments.

Collective Bargaining

Organizations may utilize the collective bargaining process to enhance coordination between the management and the employees. Typically, managements can use trade union leaders, who represent the employees, in the bargaining process to convey information on certain organizational issues like terms and conditions of employment, etc. Management may also use these leaders to get the acceptance of the employees to the changes proposed by the management. Trader union leaders can also use bargaining process to express the workplace concerns and sentiments of the employees.

Performance Reviews and Management

Organizations may use performance management as a technique for achieving coordination among the employees. Performance reviews provide opportunities to the managers to discuss with employees the performance goals for the future, how well those goals should be met, and what must be done to continue to meet those goals. They can also discuss how well the past goals were met and the areas of concern. Since performance management focuses on many aspects of the organization and its processes like goals, plans, processes and outcomes, it facilitates effective coordination of different activities of the organization.

Information Technology Tools

Computers have helped managers to increase the effectiveness of coordination. Specifically, managers use integrated management information systems, human resource information systems, office automation software, project management software, etc., to monitor and coordinate the employee activities efficiently and almost continuously.

Quality Control Techniques

Many quality control programmes focus on the overall activities involved in developing, producing and distributing products and services. Of late, several quality control programmes such as Total Quality Management, ISO 9000 and Balanced Scorecard have greatly helped organizations in improving coordination among the various departments and their activities.

Voluntary coordination—Managers may create a conducive environment that facilitates voluntary coordination. In voluntary coordination, organizational members develop a natural desire to coordinate their activities with the activities of the members of other departments. In other words, coordination is achieved more by persuasion and motivation and less by the superior’s command. Positive environment, mutual trust, effective leadership and good communication are essential for achieving voluntary coordination in organizations.

Even though organizations may adopt any one or more of these techniques to achieve the required level of coordination, success depends on the nature of tasks performed and the prevailing environment.

Steps in the Coordination Process

Organizations with well-developed coordination processes enjoy several advantages. They may achieve: (i) well-developed relationship among different departments and units, (ii) a shared vision among all the organizational members whose activities are coordinated, (iii) confidence and trust among the managers and employees about their organizational mission, vision and the availability of critical support and (iv) a way to test and verify performance. Though each organization can decide on the steps to be followed in coordination depending on their specific requirements, they may also adopt the steps shown in Figure 17.3 to achieve effective coordination.

1. Managers should first understand the current organizational policies, procedures and plans before beginning the process of coordination. They should also identify the existing organizational structure and the key participants in the coordination process. Wherever necessary, they should develop standard operating procedures and rules and norms of behaviour.
2. Managers should design and develop effective decision-making system that enables them to supervise the organizational activities personally. They should also establish a dynamic communication channel for faster and effective dissemination of information among the various departments. Effective decision-making and communication systems are also essential for quickly identifying and solving the problems associated with coordination.
3. Managers should next install a proper system for reporting of activities by various participants on a routine basis. The participants may report on the nature and pattern of organizational activities carried out, the outcome of such activities, etc.
4. Managers should formulate an appropriate reward system necessary for encouraging the participants to comply with the requirements of effective coordination. The reward system should also develop harmonious relationship among the participants.
5. At this stage, managers can form committees or task forces made up of employees to perform certain coordination-related functions. The purpose behind the formation of these committees is to relieve the managers of certain routine activities relating to the coordination function.

Besides adopting the above steps, managers should also encourage personal and informal interactions among people working across different departments to enhance the effectiveness of coordination.

Once the coordination procedure is developed, it is essential to review it carefully before actual implementation. While reviewing, care should be taken to ensure that the coordination procedures are complete and properly sequenced. Once the coordination procedures have been reviewed and revised, they should be properly documented.

It is to be understood clearly that the successful process of coordination also requires the development of coordination skills, leadership skills, and communication skills among the participants. This is essential for the systematic implementation of coordination in organizations.

For the process of coordination, Peter Drucker has suggested a simple three-step process. The steps are: (i) activity analysis, (ii) decision analysis and (iii) relation analysis.¹³

1. Activity analysis involves the analysis of the activities performed by people across different levels and departments in an organization. This analysis normally involves answering questions like what works are to be done, how these works should be done, who should do them, how these works are to be grouped and coordinated and what level of emphasis should be provided for each of these works.
2. Decision analysis involves the determination of the possible nature, kind and timing of the decisions to be made in the future. It is to be noted that an accurate prediction of future events is simply impossible as the future is characterized by uncertainty.
3. Relation analysis involves the analysis of the nature of relationship prevailing between the task of superiors and subordinates. This analysis may also cover the relationship existing among the peer groups. Relationship analysis deals with both vertical and horizontal relationships.

Requirements for Effective Coordination

Since co-ordination is a continuing process, organizations should keep it dynamic and effective. To make coordination effective, organizations should have a: (i) suitable coordination structure, (ii) schedule of administrative tasks and (iii) method for presenting information. Effective coordination should fulfil the conditions shown in Figure 17.4.

Well-defined Goals and Mission

Clearly defined goals and mission are essential for the success of coordination initiatives. These goals and mission can unify the actions of the employees and provide them a sense of direction. Coordination thus requires continuous update and effective communication of organizational missions and goals to all the people. Sound planning is also a basic prerequisite for effective coordination. This is because plans are also capable of ensuring uniformity of actions. In this regard, the management must ensure that the plans of different teams, units and departments are well-integrated. Understandably, well-integrated plans, clearly-defined goals, harmonized policies and standard procedures provide an ideal stage for effective coordination.

Competent Leadership

The presence of competent leadership is perhaps a critical requirement to the success of coordination-related initiatives. Professional and competent leadership that believes in a democratic style can gain the employees’ trust in and cooperation for its coordination initiatives. Effective leadership can also help the organization in reducing its reliance on the formal methods of coordination like authority, rules and procedures.

Simplified Organizational Structure

The management can achieve effective coordination by keeping a simple and sound organizational structure. There needs to be a clear chain of command in organizations to ensure effective coordination of different individuals, units, divisions and departments. Organizations should have clearly-defined line of authority that flows from top to bottom. When authority, responsibility and accountability of individuals across departments are well-defined, it can avoid many potential conflicts in interpersonal relationships. Clear organizational charts, well-developed organizational manual and appropriate allocation of work can help managers in coordinating the organizational activities with ease.

Effective Communication

Organizations should have open and two-way channels of communication to make coordination effective. When managements can ensure that there is a free and frank exchange of opinions and information among employees, they can create mutual trust and understanding among the employees. Effective communication can also help managements resolve difference of opinion and conflicts in interpersonal relations. Effective communication in coordination may mean frequent communication, timely communication, accurate communication and goal-oriented problem-solving communication.

Employee Involvement and Commitment

Effective coordination requires the complete involvement and commitment of the employees of the organization. Employees with high involvement generally contribute better to the improvement and success of their work organizations. They also display a high sense of ownership and commitment and tend to be more cooperative than others. It becomes easier for the management to coordinate the activities of the employees with high involvement. To enhance employee involvement and commitment, organizations need to provide them with training in team effectiveness, problem solving, communication, etc.

Summary

1. Coordination is the process of integrating the various activities in an orderly manner with the intention of accomplishing the organizational goals.
2. The four principles of coordination are the principle of direct contact, principle of early stages coordination, principle of reciprocal relations and the principle of continuity.
3. Coordination within an organization is typically known as internal coordination. Coordination between an organization and its external environment is called external coordination.
4. Vertical coordination means the coordination of activities carried out at different levels of the management. Horizontal coordination refers to coordination across functional departments. Diagonal coordination means the coordination of activities performed at different levels and different departments of the organization.
5. Techniques of coordination include authority, objectivity, policies, procedures, rules and methods, committees, conferences, coordinator, communications, collective bargaining, performance reviews and management, information technology tools, quality control techniques and voluntary coordination.
6. Steps in the coordination process are: (i) understanding the current organizational policies, procedures and plans, (ii) designing and developing effective decision-making system, (iii) installing a proper system for reporting of activities, (iv) formulating an appropriate reward system and (v) forming committees to perform coordination-related functions.
7. Requirements for effective coordination are well-defined goals and mission, competent leadership, simplified organizational structure, effective communication and employee involvement and commitment.

Review Questions

Short-answer questions

1. What do you mean by coordination?
2. Explain briefly the significance of coordination.
3. What is meant by early stages of coordination?
4. Distinguish between internal and external coordination.
5. Write a short note on diagonal coordination.

Essay-type questions

1. Critically examine the principles of coordination with examples.
2. Enumerate the different types of coordination with a suitable example.
3. Discuss in detail the different types of techniques of coordination.
4. Illustrate with example the steps in the coordination process.
5. Evaluate the requirements for effective coordination.
6. Coordination is a process to achieve unity of action. Discuss.

Case Study

Is Proper Coordination a Panacea for all Problems?

Green Horn is an Atmospheric Fluidized Bed Boilers producing company with an annual turnover of ₹ 4000 crore. Green Horn, which commenced its operations in the year 1979, has now become a company capable of designing, manufacturing and constructing a wide of range of boilers, thermal oil heaters, energy chillers and customized products like exhaust gas boilers. This company has about 6,800 employees, including people in technical as well as-non technical categories. Green Horn’s product development and project management capabilities are backed by a robust R&D set up, which has dedicated technology development and adaptation facilities for various industrial applications.

Green Horn has been facing problems in sticking to the promised delivery schedule due to production bottlenecks as well as heavy order booking. As a part of its strategic move to reduce time delay and cost escalation in commissioning of boilers, the company increased its outsourcing from what was initially, 35%–40% to 55%–60% for all products. Green Horn expected that this outsourcing decision would enable it to reduce the cost of expanding the facility from an estimated ₹ 1,400 crore to 900 crore. It also planned to substantially boost its manufacturing capability through this outsourcing exercise. In fact, Green Horn’s top management viewed this enlarged outsourcing as a panacea to all its problems relating to time delay and cost overruns.

However, the outsourcing strategy of Green Horn simply backfired and the end result was just the opposite of what it aimed at achieving. It failed to achieve both cost reduction and faster commissioning of boilers. Actually, it began to witness serious time delays in the receipt of outsourced components from vendors leading to cost escalation in the projects. However, the quality of the outsourced material conformed to the standards set by the company. Quite obviously, managers of different functional departments, i.e. manufacturing, material management, engineering and commercial began to complain about the serious disturbances in the production schedule. Sadly, Green Horn further faulted on its delivery promises and thus incurred the wrath of customers.

For their part, the vendors of the company complained about the absence of any on-site support from Green Horn for solving various technical problems. For them, these technical problems appeared to be the root cause of delay in their timely completion of components outsourced by Green Horn. Though the top management is seized with problems relating to outsourcing, it still believes that its strategy of outsourcing can work well provided there is better coordination among all the interested parties.

Questions

1. In your opinion, what went wrong in the outsourcing decision of Green Horn?
2. What needs to be done regarding the complaints of the vendors?
3. What according to you is the long-term solution to the problems associated with outsourcing from the coordination perspective?

References

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2. Richard M. Burton, Børge Obel, and Gerardine DeSanctis, Organizational Design: A Stepby-Step Approach, 2nd ed. (New York: Cambridge University Press, 2011), p. 165.
3. J. Mooney, Principles of Organization (New York: Harper & Brothers, 1947).
4. Ordway Tead, Administration: Its Purpose and Performance (New York: Harper & Row, 1959), p. 36.
5. T. Haimann and W. G. Scott, Management in the Modern Organization (Boston: Houghton Mifflin, 1974), p. 126; R. D. Agarwal, Organization and Management (New Delhi: Tata McGraw-Hill, 1982), p. 242.
6. Dalton Mcfarland, Management: Principles and Practices (New York: McMillan Publishing, 1974), p. 388.
7. Richard L. Daft, Management, 10th ed. (Mason, OH: Cengage Learning, 2011), p. 281.
8. L. D. Parker, “Control in Organizational Life: The Contribution of Mary Parker Follett,” Academy of Management Review (1984), 9(4): 736–45.
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10. William Byrnes, Management and the Arts, 3rd ed. (Burlington, MA: Elsevier Inc., 2009).
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12. Robert V. Presthus, “Authority in Organizations,” Public Administration Review (1960), 20(2): 25.
13. Peter Drucker, The Practice of Management (New Delhi: Allied Publishers, 1970), pp. 193–201.
14. http://www.microsoft.com (last accessed in May 2014).
15. http://www.mckinsey.com (last accessed in May 2014).