Below i have attached the document in which part 2 and 3 have been discussed and the question is

1. Choose a Solution: What are the available options
moving forward? Do you consider holacracy to be an appropriate organizational
design for Liip? Why or why not? (what are the pros and cons of working in a
holacracy at Liip?) (___/35)

Based on your responses to
questions 2 and 3, this is where you propose solutions and evaluate their
feasibility. Each potential solution should be explained in detail. The
advantages and disadvantages of having a holacratic structure need to be
discussed.

GROUP CASE ANALYSIS
LIIP: THE PATH TO HOLOCRACY

1.What happened in the case?
On April 5, 2017, Laurent Prodon was in his office in Lausanne, Switzerland, reflecting on his seven years at the Swiss-based digital agency Liip AG, formed in 2007. Swiss technology company Bitflux GmbH joined forces with the design and e-learning company Mediagonal AG, based in Fribourg, Switzerland, to combine their strengths in innovative projects for Switzerland’s German- and French-speaking customers. Liip paid its workers competitive wages near the industry average but was a desirable employer in flexible employment and continuing education opportunities. It has a wide range of web services and applications for clients such as banks, retailers, and manufacturers.

The Scrum process introduced In 2009?10 involved the product owner responsible for defining product features and the Scrum Master to facilitate team processes like developers, programmers, and testers providers. A hierarchical structure of the top management team of six people, responsible for company-wide decision-making, and largely independent project-specific groups of five to 20 employees operate like small business units. As a scrum master, Laurent Rodon, a well-trained web developer, explains the Scrum methodology as an ideal management tool at Liip, as providing service, managing large complex projects in a constantly changing environment is always tricky.

In 2015, Liip?s top management team referred to the work of Fr?d?ric Laloux to categorize organizational designs according to paradigms changing red to teal, an advanced form of corporate development, where the company was self-organizing based on self-management, wholeness, and evolutionary process. A self-management organizational structure could follow one of three potential models: a parallel team that operated independently, individual contracting, which allowed members to organize contracts or nested teams. Large groups were opted by Liips top management, also known as holacracy, founded by US Entrepreneur Brian Robertson, and implemented successfully by other companies.

The top management at Liip introduced holacracy training to a small segment across the nation because the employees were interested in a teal organization. In January 2016, all employees had assumed the role of a Liiper since the management had announced the new corporate structure, and the progress happened gradually. By September 2016, the general company structures partially continued to reproduce elements of the former culture, and roles in the circle represented broad interest. As in the case of former top management member Tonio Zemp being a salary determiner. Nearing the end of 2016, I retained the scrum methodology to execute projects and moved to a holacratic organizational structure, and the Liip culture was in progress.

According to zemp, holacracy organization was a challenge: individuals find it hard to fire themselves; it is weird to make rough and drastic decisions. Since the employees had many roles and not just held jobs, it was easy for them to disassociate themselves from the roles. The employees didn?t have real readiness to perform individual functions, for no tension was imposed on them from authority. Zemp still trusted in self-organization as a future and was backed up by Andrey, stating that there was a need for change, and evolving holacracy would bring in more ways of self-organization. Prodon questions Liip was over if the employees succeeded in their projects, if they had the necessary skills, and how they overcame potential inefficiencies in the holacratic structure. An exhibition of Liip on the holacracy implementation, doing agile web development sums up the Scrum framework and responsibly pushing the development of technology and organizational capabilities, reputations, and relationships sustainable. Arthur koestler defines holarchy as the way nature organizes itself and relates to how a cell in the body is self-contained and, at the same time, part of a larger whole. A general company circle includes roles such as agile coach, donation, salary determiner, and circle organizations; administration, salary process developer, Liip Bern, Liip Fribourg, and office collaboration. Liip AG Zurich cycle sub circles include Kleine Eule, Lmbda, Lego, Jazz, and roles such as system administration team coach, representative link, and secretary.

What is a holacracy? How does it function?
Holocrarcy is a self-management approach with using decentralized decision-making in fluid entities: termed as circles that are meant to adjust to serve a purpose for the organization. The management style transfers hierarchy from within an organization of people to circles of subunits of circles filled with roles. The removal of hierarchy of people allow prioritization of fulfilling the purpose with any autonomy, collaboration, and communication needed. The distribution of authority and decision-making change employees to seek an entity with a specific purpose and serve for process via their roles rather than a job position. Roles are different from job positions as roles are meant to directly serve a purpose rather than as a function with duties and responsibilities that aid the organization in achieving goals. Roles are seen as the smallest units with defined tasks entailed to serve the purpose of the circle. This empowers for employees to seek opportunities company-wide rather than being pigeon-holed into a task; employees are free to sign up for as many different roles in different circles and leave as they desire. The voluntary intake of roles to participate in circles allow employees to undertake roles based on interest and competence. Power is maintained with the circle by complex processes and process governance to develop roles, identify the authority needed for the role, and to hold accountability in role-takers.

Formation and Conflict
Holocracry is also known as nested teams: one of the three potential models in a self-managed organization structure. Nested teams are small teams of embedded in bigger circles, basically subunits of circles within bigger circles. The circles are formed and evolve to serve a purpose for the company, and as broad as it was the bigger the circle would be and more specific purposes would be embedded as circle subunits. Circles run with lead links assigning roles and allocating resources required for the success of the circle. Coordination between the roles and the drive for constant improvement were ran by a process arrangement of tactical meetings and governance meetings. The tactical meeting presented an opportunity for the individuals in the circle to voice their suggestions for improvement whereas the governance meetings were for any tensions between roles in the circle. Tensions were caused by a status quo in the circle that could be replaced with a better method for the circle to be a success. The governance meeting followed a six-step process safeguarded by a faciliatory to describe the tension and proposing a solution for steps one. The process continued with step two to four engaging questions and clarity, step five with more proposals and objections of a solution and ending with step six required resolving the objections and acceptance of a proposal. The end result of the process led to roles being redefined to accommodate the new method.

Comparison with Traditional Management
Holocracy is a modern approach intended to gear organizations in self-managing instead of relying on traditional management to form the structure and functions within the organization. The approach removes the rigidity of the organization that can decrease efficiency and limit the competitiveness of the company. With the rapidly changing environment and clients requiring complicated diversity of needs, the traditional system of management can halt the process with required authorizations and directions from the manager. Delegated authority can make communication less transparent in organizations as there can be missed voices and the formalizations can make the wave of communication confusing and time-consuming. With more transparency, alignment between worker and superior could be ceased since favouritism wouldn?t be possible within distributed authority. There the authority can remove biases and discrimination of management level that can halt the progress for improving productivity. The main purpose of distributed authority is to allow all employees involved to have a say and autonomy for the work they do. The distribution allows for problems that are time-critical and require close-connected information. Another key difference is the relationship employees can have with their work. With the focus on filling roles rather than the purpose of their job position, they?re able to easily meet the needs that are current rather than outdated job description of their responsibilities and duties. Employees would also be able to strengthen their specialty as they wish or have a broader role that involves company-wide strategy without limitations of promotions and the role of managing others. Holocracy also requires continuous training and other investment in employees as it stresses the more need for employees taking in roles to be competent and be able to work with self-sufficiency. Tasks that management have found difficult to do in traditional management would also be transferred to different circles so indecisiveness and procrastination wouldn?t halt the actions required in the organization. In the long-term, large-scale reorganizations can be made easily to adapt to the competitiveness of the industry whereas in the traditional management approach, reorganizations can be more of a gamble as they require more investment. Thus, in the long-term holocracy would be more of a sustainable approach for a company that relies on completing projects through a process.

2.Analysis: Internal & external challenges
Internal Analysis
The organization Liip has two main layers of structure: six people in top management and teams of five to twenty employees operating based on projects or function. With less organizational hierarchy and a wide range of control, operations requires less supervision and promotes employee collaboration. The organic structure is best fit for the organization?s survival and growth in the rapidly changing competitive environment. The main strengths of the organization as an organic strcucture, is in the growth mindset of the organization, the fluidity of the tasks is easilty adjusted for meeting client needs, and the opportunities for creativity in management and work. However, there are still weaknesses that need to be addressed that Liip experiences as an organic structure such as the ambiguity of accountability and work relations.
Strengths
Organic structure relies heavily on human capital to run operations effiecently, thus it is a great investment that the organization already provides flexibility and continuing education opportunity to attract talent. For Liip to be an attractive employer there are more employee retention and benefit from the accoumulation of the expertise not lost to other employers. The expertise developed is then able to make the company stand out for the diverse set of web services and applications they?re able to provide to different types of companies. The communication is also effective in the organization as communication is relied on informally within teams so key decision makers are able to receive the information directly and quickly. The flat structure motivates communication independently within the groups to solve issues, leading to employees self-directing in projects. Through organizational hierarchy, there can be loss of information and especially time in order to get approvals and directions; the agility of projects being completed is improved on with decentralization and the company can easily accommodate client needs. This is evident in Liip being able to deliever a practical product within weeks. With the quick response and flexibility, the customer experience is able to differentiate their services and justify their prices.

Weaknesses
Despite the many benefits of the decentralization and flat structure of the organization, there are difficulties that come with less traditional management. Initially with traditional management there were concerns with top management having limitations for vetting all organizational decisions, audits, and doing managerial work. The self-management of the organization solved some concerns, but with the quick changes made in the organization that already has stress of the rapid change in environment and demanding clients, it could be seen as easing the burden of management to the other employees. Through the case it?s stressed on the burden of management tasks with such as employee termination, conflict resolution, and giving employees direction and advice.The wide span of control not only makes the difficult of conflict resolutions as the team members are interdependent in projects and management would only get involved with the team when there are months of financial loss caused by a project. The ambiguity of employee termination would also lead to the company needing to rely on continous growth to make up for the employee retention and hiring of new employees, which would increase the need for more market share. There is also a lack of formalization of employee orientation, new hires are not able to understand the dynamic and framework of the complex organizational structure. Another big weakness of Liip is that with the quick service relies on sacrifice of value and just meeting the surface of meeting the client?s specification. In the long-run, problems could occur with the software or web services, that would require the specific employees who worked on the project previously. With the management of large projects in a constantly changing environment, the responsibilities of decision-making is scattered and would burden employees to figure out the prioritization of different tasks and the pressure to take responsbility of previous projects requiring more care. As the services are becoming more complex and requiring team-based approaches, the accumulation of previous work could stress employees. The role of firing would also be up to the employees, which could negatively impact the morale of the employees in forced terminations or be a loophole of workers to not add any value to the company.

External Environment Check
The other latter factors of a SWOT analysis is based on the external environment for opportunities and threats. The goal of external analysis is to exploit opportunities and to minimize the impact of threats to the organization. The importance of an external check is to take consideration the uncontrollable of a business?s competitiveness and relation with external stakeholders. The environmental factors could influence the revenue, operations, and growth of the company. The opportunities found in the environment for Liip are based on resources available to find a suitable management style and the use of an external consultant for support. Compared to the amount of opportunities, there are more threats as there are many stresses from the external environment. The main stresses are from clients, the competition, and the quality of the services provided.
Opportunities
As Liip is open to change for management style, the company has a lot of opportunity factors that could increase the effiency and effectiveness of the change. The availability of extensive documentations of different management styles and trainings results in less risk to making changes as the information is readily easy to share between co-workers and employees would be more likely to adapt and accept the new changes. The use of an external consultant can also be extended for giving feedback based on the support they?ve given previously. Another opportunity is the advantage Liip has over choosing their prospective projects and clients, which many of their competitors do not have the privilege of. This entails that the company has a potential to distinguish themselves from their competition by starting to build a reputation and initiate brand marketing. Later on, brand management would allow the company to build more trust with the potential clients and to have a more professional presence in the business world. With the constant rapid change of the environment and growing demands in the industry, there are more threats than opportunities. The culture of Swiss people have been pointed as their stubborness not to accept failure is in direct conflict with the organizational culture. This stubborness in the culture could lead to forced terminations and moraless-leaned behaviour to make a project a success. With the industry being project-driven and fast delievery to clients is required to compete in the organization, it could lead to the company needing to rely on short-cuts to make ends meet. Another threat, especially in regard to time is that the client?s specifications can change as the team relies on the client?s feedback to meet the specifications they require. Another threat is the competition as their relative prices are lower than Liip?s and with growing cost potentials, there would be an uptrend of costs that require justification for Liip?s services. The competition can also potentially be able to cater to more well-rounded services and products that give more value than Liip can have. While Liip can focus on the speed and just focus on speed of delievery by just meeting the specifications required, in the long-term this would negatively impact the company. Clients would look into the competition for long-term projects that could result in predictable profits for years whereas they would just go to Liip for emergenies and small projects.
Conclusion
Given that the main problems are related to the basic structure and management of the organization, the solution should prioritize the development of proper work culture to support human capital. A strong company culture could act as a social glue for the ambiguity of self-management and give directions no matter whether if the organization adopts the holocrancy management. In an organic structures the most important asset is human capital, and by having a strong organizational culture the performance would improve caused by the well-being of employees. The SWOT analysis factors was heavily weighed by the work culture of the company as the main operation is reliant on employees and the external environment is managed by the employees as well.
3.What are the available options moving forward? Do you consider holacracy to be an appropriate organizational design for Liip? Why or why not? (what are the pros and cons of working in a holacracy at Liip?) (___/35)

Based on your responses to questions 2 and 3, this is where you propose solutions and evaluate their feasibility. Each potential solution should be explained in detail. The advantages and disadvantages of having a holacratic structure need to be discussed

REFERENCES
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Promise?of the Next Generation of Self-Managed Teams,? Harvard Business Review 94, no. 7?8 (July?August 2016): 38?49.
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