Introduction At the fourth biennial Mercy Corps leadership conference in November 2006 executive leadership described the well-known, internal complications at Mercy Corps as a large organization ($194 million budget in 2006) that “has to focus on two core areas: international relief and development” (Grossman & King, 2008). The status of the organization was examined in detail by the Harvard Business School case study and a number of problems were revealed. This analysis is based on the information provided by the case study and addresses four issues.
The first section discusses three forms of differentiation and how they are relevant to Mercy Corps. The second section addresses the five different forms of integration in an organization. The third section evaluates the use of differentiation and integration in the organization and the success of differentiation and integration. In the last section I examine whether Mercy Corps is a mechanistic organization or organic organization. Changes in Differentiation As discussed in class and in assigned reading for PUB M 511 there are three forms of differentiation.
This is essentially how an organization divides its labor into distinct tasks and then coordinates them (Hodge & Anthony, handout). Hodge & Anthony have defined the three forms of differentiation as: 1. Horizontal differentiation – differentiation of work into tasks at the same level of organization. 2. Vertical differentiation – division of work by level of authority, hierarchy, or chain of command. 3. Spatial differentiation – refers to geographical dispersion. All three forms of differentiation are relevant to key issues in the Mercy Corps case.
Horizontal differentiation is clearly evident when the four program directors formerly supervising 40 country directors were replaced by six regional program directors. Effectively, a new department was added and the reporting structure was changed so that country directors were now reporting to their respective regional director who reported to the Portland, OR HQ and not the program directors in Portland, OR. Because the reporting structure was changed the country directors now had one more step before reaching the HQ.
On the other hand country directors now had a faster response rate for questions that were not critical. Vertical differentiation was also apparent at Mercy Corps. One example of vertical differentiation at Mercy Corps was Zimmerman’s position. Originally program directors reported to the president but now regional program directors (replaced the four program directors) reported to Zimmerman. This removed the president from the regional program directors; it also helped the president focus on strategic initiatives and become the face of the organization instead of the day-to-day administrative functions.
Mercy Corps had a strong sense of spatial differentiation. With 3,000 team members spread out across the world the organization had a strategy that kept the teams abroad aligned with the mission. All teams, despite their geographical locations, align their country goals to their greater vision and mission of Mercy Corps. Although country directors get great autonomy in how they run their program and where their funding comes from they still are working towards a shared goal. Changes in Integration Many of the forms of integration were significant in the Mercy Corps case.
As defined by Hodge & Anthony in the handout provided in class the Five Forms of Integration are defined as: 1. Formalization – utilization of formal rules, policies and procedures. 2. Centralization of decision-making or authority – refers to the place in the hierarchy where decisions are made. 3. Span of Control – refers to the number of immediate subordinate positions a managerial position controls or coordinates. 4. Standardization – integration can be achieved through a process, input (human resources and materials), and output standardization. 5.
Nonstructural means for integration – refers to the coordination mechanisms including liaison roles, teams, culture, information systems, and communication processes. The Mercy Corps case starts out using formalization at the country director – president. Communication channels are well defined and employee and staff know whom they report to. After the addition of regional directors another layer was added to the communication process. The policies and procedures were formalized and understood by all employees and staff and followed so that funding and program goals could be met.
Centralization was not evident at the organization level. It was evident at the country level, where country directors were given permission to run their programs in the most efficient way for that country. Span of control was reasonable for the staff of Mercy Corps. Previously the four program directors had 40 direct reports. This changed when six regional program directors. While span of control was manageable the standardization process was not. The human resources team small compared to other organizations of the same size.
The human resources team also was based primarily out of the Portland, OR office with one person in Scotland. In terms of non-structural means for integration, Mercy Corps has liaison roles and communication processes in place. Mercy Corps also has a culture that is adapted by all teams across the globe. Appropriateness of Use of Differentiation and Integration & Success with Differentiation and Integration Mercy Corps used differentiation and integration in a successful way.
By leveraging both the highs and the lows of differentiation and integration the organization can function at high operational and strategic level. Mechanistic Organization vs. Organic Organization Mercy Corps as a whole runs like a very mechanistic organization. While the country offices run more similarly to a organic organization. As defined in the handout by Hodge & Anthony a mechanistic organization is: high vertical and horizontal complexity, high formalization, narrow spans of control, high centralization and high standardization.
While a organic organization is defined as: low vertical and horizontal complexity, low formalization, broad spans of control, low centralization and low standardization. Conclusion In conclusion, Mercy Corps embodies high differentiation and integration at an organizational level. At the field/country level it seems to operate more on a low differentiation and integration. Therefore, the organization as a whole is run as a mechanistic organization and the field offices are run more organically with more autonomy.
References Grossman, Allen S. , and Caroline King. “Mercy Corps: Positioning the Organization to Reach New Heights. ” The Harvard Business School (2008): 1-24. Print. Hodge, Anthony and Gales. Organizational Goals and Effectiveness, Organization Theory: A Strategic Approach. 6th Ed. , 2002. Print. Hodge, Anthony and Gales. The Nature of Structure and Design, Organization Theory: A Strategic Approach. 6th Ed. , 2002. Print. Morgan, Gareth. Images of Organization. Thousand Oaks: Sage Publications, 2006. Print.