Organizational Design for Intrinsic Employee Motivation

 Organizational Design for Intrinsic Employee Motivation:
  A Review of Mori Seiki’s Team-Based Structure

By: Eric Holmes

      The design of a business organization plays a major role in its ability to motivate its employees.  The software company Google continues to encourage creative employees by granting them a high degree of autonomy which leads them to engage their work with high intrinsic motivation.  According to Google spokesman Matt Furman, Google employees have a chance to engage in “constant and often amazing innovation” which keeps their morale high (WSJ, 2009).  This need for creative fulfillment is described by Herzberg’s “two factor theory of motivation” which proposed that intrinsic motivators such as an employee’s sense of accomplishment outweigh extrinsic “hygiene” factors such as increased salary (Buchanan and Huczynski, 2010: p280).  What organizational structures help to foster intrinsic employee motivation?  What balance must be made between autonomy and central control in order to maintain the performance of such organizations?  The answers to these questions will be investigated in this essay.  Organizational structures will be described at the Japanese machine tool firm Mori Seiki through the lens of intrinsic employee motivation.  The author’s experience and related literature will be cited to support the claim that a certain level of autonomy is necessary to stimulate intrinsic employee motivation, but that certain organizational structures are required to maintain a company’s focus.  Organizational structures which promote collaborative competition, team empowerment, and individual development will be shown to strongly affect levels of intrinsic employee motivation.  Drawbacks to autonomy in the organization are discussed with the goal of identifying how Mori Seiki balances team autonomy with sufficient central control to ensure that its company objectives are achieved. 

Figure 1: Mori Seiki Japan's Matrix Organizational Form

      Mori Seiki is a Japanese machine tool manufacturer that supplies lathes and machining centers to Toyota, Boeing and other top tier manufacturers.  The author was a member of Mori Seiki’s design department which is a division within the organization’s open matrix structure shown in figure 1.  In this organizational structure, design teams act to develop a new product in coordination with specialist departments such as purchasing, manufacturing, and quality assurance.  Teams are the smallest functional group at Mori Seiki, and typically consist of six employees.  Working in small teams creates a sense of camaraderie and boosts employees’ desire to contribute.  Each design team member is tasked with a crucial function, and must interface with other team members’ contributions.  This requires a large degree of information sharing among team members, and hence all design teams are clustered in a single open floor plan without cubicles or dividers.  The absence of cubicles means that each member can quickly speak to other members and what is said can be heard by everyone.  Because each member works as a specialist in a certain design area, they are given responsibility and autonomy.  As a balance to the large amount of responsibility, designers have a ready support network to rely on through their team, and because each team member is faced with a shared challenge of creating a common product, they share a common frame of reference.  Teams meet socially outside of the workplace to celebrate a new member’s entrance or a current team-member's exit from the team.  These social functions allow teammates to engage in more candid exchanges than are possible within the highly structured workplace.  By firmly supporting and enabling each employee, and by creating a strong sense of team identity, Mori Seiki's team-based structure promotes continuous individual and team learning, a key factor in maintaining employee intrinsic motivation.
In order to manage its open, team-based matrix structure, Mori Seiki has established mechanisms for maintaining central control.  Design teams are required to gather in morning meetings in which they review management communications and discuss common design problems.  Morning meetings are preceded by radio exercises which build a sense of common organizational purpose.  In between the military-like radio exercises and the morning meeting is a company-wide public announcement.  In the announcement, the number of visiting customers and a daily company slogan are announced.  Before the morning meeting commences, each employee is given the chance to discuss issues that may affect other teams, such as their interest in solving a certain design problem.  Employees take turns in presenting design issues to their department, and in this way, the wider organization can incorporate team experiences.  These organizational structures promote the cohesion of teams into departments, and similar structures preserve the cohesion of progressively larger groups until the upper management level is reached.
      Mori Seiki's team based structure is a major factor in promoting intrinsic employee motivation, but there are also drawbacks to this approach. Design teams are required to be in frequent contact with many other teams throughout the organization.  The management of these relationships is a considerable challenge, and especially the act of prioritizing the multitude of requests which are received.  Mori Seiki team leaders have no assistants to arrange their schedule and must sift through and organize a vast volume of data.  Consequently, workplace stress levels are high, and this can become a barrier for employee motivation.  There are also benefits to the high workplace stress level.  Because of the enormous work load assigned to teams, employees who are not suited for their job discover this quickly.  The rigorous work load filters out unsuitable employees.  During the author's sixty day work assignment at Mori Seiki, four employees were transferred out of their design teams in order to work in different parts of the organization.  These flexible personnel practices are a key aspect of Mori Seiki’s ability to continually refine the match between employee and job function.  By matching the right employee to the right team, Mori Seiki's is able to retain its most intrinsically motivated designers.  Employees unmotivated by design tasks are shifted into other key areas such as manufacturing.  To gain a design team assignment is a sought after privilege, and for the right type of employee a life-long learning opportunity.  High pressure team conditions also create a fertile environment for identifying and training the company’s future leadership.  Good team leaders at Mori Seiki attain a respect similar to that given to Honda’s shusa (project leaders) as described below (Womack, 1990: p113):

“Oddly, while we’re used to thinking of dedicated teamwork as the ultimate sublimation of individuality, new products inside the Japanese auto industry are commonly known by the shusa’s name: ‘That is Fuji-san’s car’ or ‘Akoika-san has really stamped his personality on that car’ are phrases commonly heard within Japanese companies.”
 
Such personal identification with ones work, coupled with the high probability for career advancement intrinsically motivates the team leader in spite of the challenges.   The motivation which results from product development authority is one of the strongest aspects of the team-based approach.  The idea of refining a worker through difficult assignments and of providing employees with necessary autonomy is not unique to Japanese culture.  Henry Kaiser, the productive American industrialist stated (Kaiser Engineers, 2011):
 
"You find your key men by piling work on them. They say, 'I can't do this anymore and you say: 'Sure you can. ‘So you pile it on and then they're doing more and more. Pretty soon you have men you can rely on absolutely. You have an organization that really can get things done." 

Finding individuals who enjoy the work at hand and then giving them as much work as they can handle is the model for developing leaders at Mori Seiki.  Although this organizational methodology derives many customs from Japanese culture, Mori Seiki’s organizational structure is capable of reaching across cultural lines as the next example will illustrate.

Figure 2: Mori Seiki's US Subsidiary (MSUS)

      Mori Seiki has a US subsidiary in California whose organization is structured in a different way from the parent company.  Although the team-based structure from the parent company is still theoretically used, in practice the work flow proceeds in a different manner due to factors such as the geographic and cultural separation.  The author’s conception of Mori Seiki’s US office organizational structure is shown in figure 2.  The separation of Mori Seiki’s US design teams led to a lack of intrinsic employee motivation, and a dramatic drop in employee productivity.  Aside from the geographic separation, the US design team was unable to directly communicate with their Japanese counterparts due to organizational barriers.  One barrier was the involvement of a separate US management structure (labeled “Admin.” in figure 2) that moderated communication with the Japanese office.  This barrier led to serious problems in achieving the US design team’s milestones.  When measuring the extent of these difficulties, Japanese management discovered that the US design team’s pace was roughly half that of similar teams in Japan.  A large part of the problem lay in the US employee’s lack of motivation due to their inability to effectively steer their project’s outcome.  In addressing this organizational and personnel problem, Mori Seiki’s Japanese management determined that a drastic approach was required to bring US designers into their existing organizational structure.  The US based design team was instructed to travel to Japan and join their Japanese counterparts in order to be part of the team-based structure there.  This solution alleviated many motivational problems among US employees, who could now speak directly with specialist teams, and develop crucial working relationships.  The responsibility of US management was removed from the organizational structure, and Japan managers supervised their US employees directly.  Although cultural and language problems remained, the effect of incorporating US designers into Mori Seiki’s organizational structure was indeed dramatic.  Productivity increases were realized as designers gained knowledge that had been difficult to obtain in the previous arrangement.  Detailed communication with vendors, a crucial part of a designer’s feasibility studies, became possible.  US designers, motivated by their increased ability to affect the success of their project, responded to the organizational shift in a surprising manner.  Many began to adopt Japanese cultural practices such as deferring their opinions in the face of higher authority and bringing up their concerns during informal “drinking sessions” after work.  One employee in particular brought whiskey to present as an omiage, or ritual gift, for their Japanese team.  Team morale was boosted as individuals gained intrinsic motivation, and project progress continued to accelerate.
      The importance of integrating human resource considerations into the design and manufacturing process cannot be overstated.  In Mori Seiki’s case, the use of “lean design” principles dictated that wasted effort in mis-matching employees with job functions leads to wasted effort in the design process.   Similar statements could be made for other job functions including manufacturing, sales and product procurement. In viewing human resources in this way, a certain realism and practicality permeates Mori Seiki’s management approach.  A 2002 survey conducted by PricewaterhouseCoopers suggests that Japanese managers are ahead of their Western counterparts in understanding what motivates their employees (Brislin et al, 2005).  In the survey, Japanese managers ranked what they considered as motivational factors for their employees, and employees ranked what motivated them.  From the list of twelve factors, only one ranking differed by more than two places between managers and employees.  Although the homogeneity of Japanese culture can be cited as an explanation for Japanese manager’s motivational understanding, in Mori Seiki’s case, management was able to effectively motivate its US designers alongside its Japanese designers.  The important common factor was the ability to enforce an organizational structure which provided autonomy with support, and that matched the right individuals into the right functions.  Similar to Womack’s proposal for non-Japanese manufacturers to adopt waste-reducing practices (Womack, 1990), non-Japanese employers can take note of motivating organizational structures like those described at Mori Seiki.  The common elements of employee empowerment, access to necessary expertise and fostering of employee pride are fully transferrable given the correct organizational layout.  In a future of diminishing resources, every effort must be taken to remove waste wherever it exists.  Like maintaining any piece of manufacturing line equipment, maintaining the drive of an organization’s employees should remain a management’s central focus.  Ultimately it is people who compose an organization, and it is quite logical that any discussions regarding organizational structures should begin and end with their effect on people.

References:

1.    Wall Street Journal, 2009. Google Searches for Staffing Answers. [online] Available at <http://online.wsj.com/article/SB124269038041932531.html>
2.    Buchannan, D. and Huczynski, A., 2010. Organizational Behaviour. Essex: Pearson Education Limited.
3.    Womack, J., Jones, D., and Roos, D., 1990. The Machine that Changed the World. New York: Ralston Associates.
4.    Kaiser Engineers, 2011. Henry J. Kaiser: The Legacy Continues. [online]  Available at <http://home.earthlink.net/~peterferko/keweb/aboutke/history.htm>
5.    Brislin et al., 2005. Evolving Perceptions of Japanese Workplace Motivation: An Employee-Manager Comparison. International Journal of Cross Cultural Management, 2005 Vol5(1): pp87-104.
6.    Rehu, M, Lusk, E, & Wolff, B 2005, 'A PERFORMANCE MOTIVATOR IN ONE COUNTRY, A NON-MOTIVATOR IN ANOTHER? AN EMPIRICAL STUDY', Academy of Management Annual Meeting Proceedings, pp. K1-K6, Business Source Premier, EBSCOhost, viewed 30 October 2011.