2014 The 5th Snapshot of Content Business in Todays ICT Industry

The 5th Snapshot of Content Business in Todays ICT Industry (SCBTII 2014)

Creative Generations Organization Structure (a General Study for Future Organization Preparation)

Astadi Pangarsoa, Ida Nurnida Relawanb,Anita Silvianitac* a,bBusiness Administration Program of Study (Adbis), Communication and Business Faculty (FKB), Telkom University, Jl. Telekomunikasi

Terusan Buah Batu, Bandung 40257, Indonesia

Abstract

The organizational structure is basic and essential for an organization to fulfill its goal. The organizational structure is about how people in an organization can coordinate through complexity, formalization and centralization in order to fulfill its goal. Part of generation Y (or the millennial generation) specially by year of birth from 1990 is a generation that will play a major role in the future because in less than 10 years from now this generation will enter the age that allows to produce work that can have a positive impact to human life. This paper is based on a collection of previous research on the study of the generation Y characteristics who in turn were associated with the study of the organizational structure. The purpose of this paper is to explain in general the suitable organizational structure for generation Y (or the millennial generation) as a creative generation. The method used in this paper is to collect and analyze relevant secondary data (literature review). The conclusion of this paper is expected to provide a suggestion for the organization plan for the future in order to prepare the appropriate organizational structure for the creative generation as one of important fundamental. In addition, this paper can also be a basis for subsequent research to empirically study based on contextual organizational condition.

Keywords: Creative; Generation; Organization; Structure

1. Introduction

Change is something that will happen over human life on earth. Changes also happen in the organization because organizations often operate in a changing environment (Lin & Hui, 1997) and also organizations need a change as a response to environmental changes (Palmer, Dunford & Akin, 2009). Organizational change is a process of the organization toward the ideal conditions (Pangarso, 2014). Organization ideal condition is being an important part of five persepectives in comprehensive theory of change (Dunphy, 1996). Because the ideal organization is capable of continuous adaptation (Weick & Quinn, 1999) and the continuous adaptation is important because to be able to exist organizations have to understand and adapt to such changes (Weick, 1987; Lin & Hui, 1997; Milliken, 1999). One of many important things to be change in organization is organizational structure (Yang, Zhuo & Yu, 2009). An organizational structure is a mostly hierarchical concept of subordination of entities that collaborate and contribute to improve effectiveness of an organization (Suman, 2014).

* Corresponding author. Tel.: +62-858-212-1544-543; fax: +62-22-756-5200.

E-mail address:astadipangarso@telkomuniversity.ac.id

2 Astadi Pangarso, Ida Nurnida Relawan

Human limitations in fulfilling the need to survive often means social relations (Pangarso, 2014), therefore

human needs organization. Organization is a tool for people to fulfill their goal. From the institutions perspective (North, 1990) organization is essentially role of the player. Every person as an organization member have to do their own role in order to together fulfill the organization goals. Overall, organization is social unity (entity) that consciously coordinated, with a limitation that can be identified, which works on the basis of continuously relative to fulfill a common goal and or group of goals (Robbins, 2009).

2. Literature Review

2.1. Generation Y as Creative Generation

The number of the world's population according to data from the United Nations in 2010 as many as almost 7 billion (6,916,183,482). The number of the world's population by age, it can be that the identification of the total population in 2010 based on the age range can be seen in the table below:

Table 1. 2010 World Population based on age group (thousand)

Age group Total Population

0-4 642161.079

5-9 607379.715

10-14 592696.184

15-19 606055.968

20-24 617394.044

25-29 559498.119

30-34 503169.904

35-39 488824.97

40-44 459301.644

45-49 412114.273

50-54 352592.648

Generations defined as an cohort (unique formative years) experiences and teachings (average from 20 to 23

years of their lives) and develop unique values, attitudes (Underwood, 2007). From various academic literature (including figure 1 below) on the generation when viewed year of birth, it can be distinguished that generation Y: 1981-2000, generation X: 1961-1980, and baby boomers: 1944-1960 (Howe & Strauss, 1991, 2003; Van Meter et al., 2013). Baby boomers have characteristics: a work ethic driven by success, ambition, high achievement and a loyalty to their careers and organizations; while generation X have characteristics: team orientation, a work/family life balance, and loyalty to relationships, dominates the current workforce population in organization position (Alexander & Sysko, 2013).

Astadi Pangarso, Ida Nurnida Relawan 3

Fig. 1. Generation defined

This table describes that generation Y do not have the same work ethic driven as their baby-boomer parents or the Gen X work-life balance expectations (Finkelstein & Gavin, 2009). Table 2. Generation profiles

4 Astadi Pangarso, Ida Nurnida Relawan

Generation Y is known as the millennial generation or net generation (Tyler, 2007); the millennium generation, generation next (Wong et al., 2008); generation me (Twenge & Campbell, 2008), and the next generation (Jennings, 2000) where the number is large enough. The current (2014) generation Y age range was 12-33. From the table 1 it can be seen the total number of Generation Y (age group 15-19, 20-24, 25-29, 30-34) now is 2 billion (2,286,118,035). Of the total amount of generation Y can be limited to those who are currently still in the high school-college age was in the age group 15-19 as many as 6 million (606,055,968). This paper purpose for the generation Y (specialized on age group 15-19) because they are currently still in high school and college-age , so there is still enough time for organizations (less than 5 years) to prepare itself (readiness), to make changes in the organization with generations which have large enough to fulfill organization's effectiveness (Lester, 2011). In the future existence of Generation Y will have an impact on the changes that must be prepared by the organization (Burmeister, 2008; Howe & Nadler, 2009; Lancaster & Stillman, 2010; Sujansky & Ferro-Reed, 2009; Tapscott, 2009). Generation Ys characteristics will challenge the organization to adapt and prepare (Orrell, 2008). In order to compete in the global economy, the organization must adapt to deal with generation Y (Myers & Sadaghiani, 2010; Ng, Schweitzer, & Lyons, 2010; Nicholas, 2008). The generation Y will bring challenges to the companies in which they are employed (Zemke, 2000).

The first principle is that every single human being is creative (Florida, 2010). Facing global environment, with high-level information and technology sources, individuals will be required to compete with creativity; creativity is the new patterns of knowledge deployment (Chowcat, 2002). Increasing popularity of ICT and the creative industries to encourage organizations to seek creative employees (Robinson, 2001). Creativity of generation Y become an important part needed by the organization to adapt (Pink, 2005). The challenge to be creative for Generation Y is important to meet the needs of the age (Pink, 2005). Creativity is the key to economic growth (Florida, 2010) & creativity is needed in problem solving (Sternberg, 2003),creative solutions are used to solve the problem and provide a solution that is adjusted to the specific issues (Csikszentmihalyi, 1996). The generation Y is creative generation (Tapscott, 2009). From the various explanations over literature review it is known that generation Y should be the creative generation.

In addition to considerable quantities for generation Y age range who will enter the workforce, researchers examined interest is due to research on generation Y has not so much (Curtin et al. 2011; Freestone and Mitchell 2004; Luthy et al. 2009) it is expected that this paper can contribute to increase research on generation Y from a different viewpoint. The following characteristics of Generation Y will be expressed in general (which is obtained from various literature sources). Generation Y has the tendency to colaborate with others and they are group oriented (Howe & Strauss, 2000). Most generation Y have been raised by mid-life baby boomers (who were accustomed to winning and achieving); generation Y have a confident about their future, self motivated, goal-oriented, optimistic, assertive, and they believe they are right; suited with the egalitarian leadership style (democratic style); narcissistic (Twenge & Foster, 2008,2010;Van Meter et al., 2013). Generation Y understanding of work is said to be influenced by their parents work-life, their related economic situation, and their own early work experience (Loughlin & Barling, 2001). Generation Y are the children of baby boomers, are the fastest-growing segment of the workforce (Cennamo & Gardner, 2008). Generation Y are new generation of people influencing todays workplace (Cennamo & Gardner, 2008; Dries, Pepermans, & De Kerpel, 2008). Generation Y are generally grown in the age of technological breakthroughs, economic freedom, and with overprotective parents. Generation Y grew up with over-involved parents who created children that were told they could be anything they wanted to be (Engelman, 2009). Gen Y has several characteristics, namely: having a sense of entitlement; have controls to determine their own decisions; brought up to believe their opinions matter, believe that they loved by the environment, and they deserve to be loved (Forbes, 2011). Generation Y has a commitment to bring in the idealistic vision and mission; willing to work hard to fulfill it; expect the appropriate recognition and reward immediately (Christopher & Sysko, 2013) different from that stated by Marston 2009 that Generation Y is a generation that lack of loyalty (disloyal) and work ethic; impatient, self-important (Hill 2008; Howe and Strauss 2007; Jacobson 2007). Generation Y technology minded and native to the technology also their inclination to trust peer and public concensus (self absorb) (Pew, 2010; Deal, Altmann & Rogelberg, 2010; Hershatter & Epstein, 2010). Generation Y are more accepting of diversity; have capabilities with ICT; have the ability to see problems and opportunities from fresh perspectives, and are more comfortable working in teams (Howe and

Astadi Pangarso, Ida Nurnida Relawan 5

Strauss 2000; Gorman et al. 2004; Tapscott 1998; Zemke et al. 2000). There is a tendency of generation Y are regularly in touch with each other by their use of the latest media and resources (Meister & Willyerd, 2010; Nicholas, 2008). Generation Y need to use new technology to improve their work (Florida, 2005). Generation Y dont like working long hours and choose to multitask to get their jobs done quickly (Gilburg, 2007). Some things that motivate generation Y include: loyalty, getting rich, meeting family and peer expectations, a desire for fame, being the family provider and living a modest, yet comfortable, lifestyle; a desire for personal time, opportunities for advancement and personal growth, security, a desire for intrinsic rewards, leadership opportunities and team development all served as motivators of this group (Jayson, 2007; Nations, 2007). According to (Eisner, 2005) the characteristics of Generation Y are as follows:

1. Formative events: Prosperity/uncertainty, violence/terrorism, outsourcing/under-employment 2. Socialization: Strong social pressure, structured life/live at home, non-traditional families, active role in family, fallout from parents work, non-standard work, multiculturalism 3. Imprint made: We generation, wired/switch/populist, work at early age/worldly 4. Pattern: Expect to make decisions, need to achieve/self-reliant, curious/energetic/question, distrust job security, dislike face time/menial work 5. Qualities: Large size/diverse/loyal, skilled/energetic, polite/positive/leave none out, socially conscious/hopeful, sophisticated/demanding 6. Value: Heroism/patriotism/virtue/duty, elderly/family/home/time, service/respect more than money, work to live, shared norms 7. Assets: Education/experience, sociable/technical/perform, work ethic/multi-task 8. Lack: Direction/focus/confidence, interpersonal/soft skills 9. Prefer: Self-improvement, candor, immediate payoff/win/fun 10. Style: Get-it-done/produce/negotiate, plunge right in/fast-paced, open and civic-minded, blend work and play, measure own success 11. Management strategy for: Treat fairly/professionally, give new/meaningful/fun work, challenge intellectually, meet growth/personal goals, model expected behavior, manage inclusively/belong, have positive/open environment, provide importance/voice, assign projects/teams/tasks, allow freedom to try/access, focus by speed/target/win, clarify big picture/timeline/roles, use to reverse mentor, train strategically/digitally, streamline/target recruiting.

2.2. Organization Structure

Organization structure is the way for organization to fulfill its goals and objectives (Pangarso, 2014). Organization structure discussed in this paper using Robbins (2009) perspective which consist: complexity, formalization and centralization. The relationship between complexity with formalization and centralization is as follows: if the horizontal complexity is high, then the organization becomes more informal (Robbins, 2009) and if an organizational complexity increases, will tend to decentralize (hage, 1967; Child, 1972).

To thrive and fully utilize generation Y unique abilities, organizations have to change their rules and policies (Gursoy et al. 2008). Organizations will be challenged to attract, motivate, and retain these young workers (generation Y) given the implications of their approach to employers (Loughlin & Barling, 2001). Todays employers are working to anticipate and respond to ever-changing new markets and competition (Monroe, 2010). Generation Y , the ICT minded generation has generated new ways of doing business that can create or exacerbate ripple effects for workers and the larger society, despite providing the organization with immediate economies-of-scale (NaDesh, 2008).

Currently there is a trend of business organization doing the downsizing and restructuring to face the challenges that exist (Dries et al., 2008; Tulgan and Rainmaker Thinking, Inc., 2003). Restructuring is meant is less-hierarchical organizational structures (Loughlin & Barling, 2001; Pasieka, 2009; Tulgan and Rainmaker Thinking, Inc., 2003). Less hierarchial organizational structure means that the general trend is a flat organizational structure.

6 Astadi Pangarso, Ida Nurnida Relawan

3. Conclusion

Based on the literature review be temporary concluded that the organizational structure for generation Y as creative generation are:

Complexity. Because of the tendency of the suitable organizational structure for generation Y is flat then the complexity tends to horizontal, (few administration and hierarchial level) with a wider span of supervision / control (Carzo & Yanouzas, 1969). Which might cause this because of the challenges for the future for a more efficient organization and because of the characteristics of generation Y is more suited to the type of egalitarian (democratic). Flat organizational structure with horizontal complexity has advantages can increase responsibility for each member of the organization, division of labor can be more specific; facilitate decision-making and increase the span of control (Rajan and Wulf 2006); reduce the salary for middle management and is suitable for smaller organizations (thus contributing to the improvement of efficiency); member organizations tend generalist (rather than specialist).

Formalization based on the characteristics of Generation Y tend to be social, team oriented and ICT minded social relationships which result in using social media. It affects more inclined to informal or low formalization. Coordination is informal and maintained through direct supervision (Lunenburg, 2012), this is in accordance with the above discussion that the tendency of organizations to generation Y with horizontal complexity (wider / broader span of control / supervision direct supervision).

Centralization flattened/delareyed firms can exhibit more control and decision-making at the top (Guadalupe & Wulf, 2010; Wulf, 2012) but these condition could lead firms decentralized decision-making or delegated decisions to lower levels (Wulf, 2012). By widening the span of control allows more decentralized, preventing the intervention of superiors for decisions made by subordinates (Aghion and Tirole, 1997). From the above it can be concluded that while the organization with a flat structure that remains to do 2 things: centralization and decentralization, it's just still a tendency to centralization (Wulf, 2012) and if it is linked with the ICT tend to be more decentralization (Acemoglu et. Al, 2006).

The conclusion of this paper is expected to provide a suggestion for the organization plan for the future in order to prepare the appropriate organizational structure for the creative generation as one of important fundamental. For further research can be empirically tested to determine whether the contextual organizational structure is summarized above is really suitable for the generation Y as the creative generation.

In addition, this paper can also be a basis for subsequent research to empirically study based on contextual organizational condition. Allowing potential research done for each type of organization by:

Analyze the organizational structure of the existing organization conditions Comparing it with the organizational structure (contextual empirical tested) for creative generation (check

whether there is a difference? what is the organizational structure needs to be changed?) If there is a difference, the analysis of what things need to be changed; how to change the priority order;

what kind of changes are made; what a challenge to make a change; it can be compiled detailed steps relating to changes in organizational structure changes.

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