The chicken and the egg of organizational design

information flow versus relationships


Concerns of Project Managers

Up & Down

Paul C. Dinsmore,
Feature Editor


Paul C. Dinsmore is author of Human Factors in Project Management, Revised Edition (AMACOM, New York, 1990), and is principle of Dinsmore Associates (affiliated with Management Consultants International). His latest book, The AMA Handbook of Project Management, will be released by The American Management Association, New York, in July 1993.

Paul C. Dinsmore, PMP, Dinsmore Associates, Rio de Janeiro, Brazil

Organizational change remains in the limelight under names like downsizing, right sizing, adhocracy, flat flexible structures, etc. This raises the question: Why do organizations want to bring about change anyway?

There are lots of solid reasons. Here are some common ones:

  • To optimize operations
  • To speed up the work and reduce costs
  • To keep the customers happy
  • To facilitate communications
  • To ensure quality
  • To adapt to new situations

All these are noble motives forsaking organizational change. The question is, how do you organize to accomplish these goals? What are the cornerstone assumptions for developing an effective organization that will bring about the desired change?

The first challenge involves walking through the classic steps of redesigning an organization. These include activities such as reevaluating company strategies, reviewing the marketplace, observing the competition, evaluating current academic and management consulting organization theories, and sizing up internal needs and pressures. This results in a reorganization plan that establishes the philosophies and strategies needed to trigger the desired change.

Once these decisions are established in the organization plan (structuring by market segment, by profit centers, by production operations, for instance), there still remains the challenge of organizing activities on a day-to-day basis. At this level, there are two differing views, related like the chicken and the egg. One is to organize for information flow and the other is to organize around relationships.

Proponents of business process design, or reengineering, suggest that if you organize around information flow, then the work that is supposed to be done will get done. Relationships are to be built around the solid foundation of information flow.

The relationship view, on the other hand, contends that the purpose of ineffective organization is to establish a framework for relationships so that people can do their work and contribute toward meeting proposed goals. When the organization facilitates the bonding of those goal-oriented relationships, then the objective of organizing has been met. Effective relationships will in turn ensure that adequate information channels are established.

Organizing using either concept is no easy task. Under either one, the scenarios are complex and the settings diverse. Both information flow and relationships must take into consideration at least four strikingly different situations.


1. “On stage, live” (same time, same place). This situation includes meetings, presentations, one-on-one discussions and anything else that is going on live and where the parties are at the same place. Being organized in this setting calls for using the right tools, such as electronic copy boards (makes reduced paper copies of writing on a special white board) and other audio-visual resources such as multi-media, or standard flip charts. A functional layout that blends easy communication with needed privacy is also an organizational requirement, along with fully-equipped conference rooms, meeting rooms and team rooms. The other piece of organization, besides the tools and layout, is training in presentation skills, meeting management and individual coaching skills needed for effective same-time-same-place happenings.


2. “Out of synch” (different time, different place). This is where answering machines, E-mail, computer conferencing, and the like, come into play. These tools make it possible to organize interactions in spite of the fact that people geographically distant from one another send and receive information at different times. Much of the training for these tools is of the on-the-job variety. Some basic rules, however, are important: what can be sent and what can't, guidelines for responding, and allowing for the fact that some people prefer E-mail over voice-mail and vice versa.

3. “On line” (same time, different place). The telephone has long helped us in dealing with realtime reactive communication from afar. Video conferencing is another way to link up from a distance. The challenges here involve actually making the connection with the other parties and the normal difficulties of telephone protocol. Also, in the case of video conferencing, geographically-split meeting management becomes an issue. Computers can also converse on line, if needed.

4. “Shift work” (same place, different time). Offices where everyone is not in the office at the same time are typical of the shift work situation. Although the place is the same, people are on “flex-time,” shift rotation, or the nature of the work is such that people are in and out of the office a lot. The “out of synch” tools are useful in this situation (E-mail, voice mail, etc.) as well as a formal way of passing over information on a daily basis (shift report, routine notes on a board and check lists).


These four settings have long existed, yet under today's demanding economy, both the information flow and relationship theories face increased challenges because of advances in communications technology. Such technologies help manage situations better, yet their use often results in the manifestation of the “Los Angeles Freeway Syndrome.” (The LA freeways are clogged because there are so many of them and they were planned so well in advance; this stimulated people to increase their driving radius and to become increasingly automobile-dependent.) Likewise with communications, since systems are so powerful, the communications traffic is greatly increased. As the cartoon office worker puts it to a colleague, “By the time I get through my E-mail and voice mail, I don't have any time to get any work done.”

Author Michael Schrage [1] [2] argues that simply adding technology to information flow (sometimes referred to as automation) will not increase an organization's effectiveness. Schrage proposes that there is a need to enhance the process by taking into consideration relationships. In other words, optimized information flow is not enough to ensure an effective organization, unless that criterion is conciliated with the need of the organization to facilitate relationships.

Since focusing on information flow and focusing on relationships are both valid forms for optimizing organizations, how then should detailed organizational redesign projects be carried out? Should information flow predominate over relationships? Or should relationships be predominant over information flow? Which one is the chicken and which one is the egg?

Traditionally, companies have reorganized themselves based on information flow, using techniques like automation, reengineering, and organization and methods. While this is certainly a necessity, it is also insufficient. A balance between relationships and information flow is the basic criterion.

To check your organizational change project, a survey, including these basic questions, is suggested:

  • What measures does the project include that aim to optimize relationships between key company personnel?
  • Does the program include items of strong enough impact that will ensure that lasting change actually takes place?
  • Has higher management “bought in” to the program and are the key figures willing to model the desired new behavior and actively participate in development and training programs?
  • Have company personnel been involved in the project, and are their ideas and suggestions being taken into consideration?
  • Does the project take into account that, in order to optimize relationships, a concentrated effort of up to two or three years may be necessary to overcome behavioral challenges?

Aside from these basic relationship-oriented questions, it is important to focus a spotlight on the four scenarios described in this column in order to ensure that the information flow outlined will actually enhance as opposed to hinder working relationships. In each of those distinct settings, information flow must feed relationships in a way that it enhances organizational effectiveness as opposed to clogging up the information channels and complicating the ability for people to relate.

1. Schrage, Michael. 1990. Shared Minds: The New Technologies of Communications. New York: Random House.

2. Schrage, Michael. 1992. Keynote address at Projexpo ‘92, “Implementing Today's Revolutionary New Developments in Project Management, Strategic Planning and Concurrent Engineering,” November 4-6, Silicon Valley Institute, San Jose, California.


JUNE 1993



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