FTCA—REGIONAL AND HEADQUARTERS RELATIONS
Swee C. Goh, University of Ottawa The FTCA is a government agency that provides services to the public but also serves an enforcement role. It employs over 20,000 people who are located at headquarters and in many regional offices across the country. Most staff members are involved with direct counter-type services for both individuals and businesses. These services include collections, inquiries, payments, and audits. The agency also has large centers in various parts of the country to process forms and payments submitted by individuals and businesses.
FTCA is a typical federal government agency; many employees are unionized and have experienced numerous changes over the years. Because of the increasing complexity of regulations and the need to be more cost-effective in service delivery, FTCA has evolved into an organization that uses technology to a great extent. The agency’s leaders increasingly emphasize the need for easier and faster service and turnaround in dealing with clients. They also expect staff to depend more on electronic means of communication for interaction with the public.
As the population has grown over the years, the regional offices of this government organization have expanded. Each regional office is headed by an assistant director (AD) who has a budget and an increasing number of staff for the various functional activities related to the region, such as a manager for information systems. Every region also has offices located in the major cities. The managers of these city center offices report directly to the regional AD. The regional ADs report to the director who is the overall head of the agency.
FTCA has a strong emphasis on centralized control, particularly in the functional units. This emphasis occurs because of legal requirements as well as the fact that the agency has extensive direct interaction with the public. For example, one functional unit at headquarters (HQ) is responsible for collections and enforcement. If a regional manager has the same functional activity, FTCA executives believe that person should be accountable to the HQ functional AD. However, as mentioned earlier, the regional manager also reports directly to the regional AD; and the budget for the agency comes from the regional budget allocations, not from the HQ functional group.
This arrangement produces a dual reporting relationship for regional functional managers. Regional managers complain that this situation is awkward. Who is the real boss under the circumstances: the regional AD or the functional HQ AD for these managers? Also, who should be responsible for evaluating the work performance of these dual-reporting regional managers? And if a regional manager makes a serious error, which of the two supervisors of that manager is ultimately accountable?
The potential for confusion about responsibility and accountability has made the roles and reporting relationships of the senior managers vague. This has also increased conflict between regional managers and HQ managers.
To address this growing problem, a consultant was brought in to do an independent evaluation of the current organization structure of FTCA. The consultant asked for an organization chart of FTCA, which is shown here. The consultant became aware of the concerns just described by conducting interviews with various staff members throughout the agency. Other information such as budgets and financial allocations, some earlier organizational studies, the mandate of the agency, and the like were also provided to the consultant.
The discussions with staff members were interesting. Some viewed this issue as a people problem and not a structural one. That is, if regional and HQ managers learned how to cooperate and work with each other, this would not be an issue at all: They should take a shared responsibility approach and try to work together. But the view of the HQ functional groups was quite different. They argued that FTCA is a functional organization, so these functional unit leaders should have authority and power over regional managers performing the same function. In effect, these regional managers should report to the functional unit ADs or at least be accountable to HQ policies and objectives.
To compound the problem, the regional managers saw this problem completely differently. They argued that the functional HQ managers should have a policy development function. On an annual basis they should develop broad objectives and targets in consultation with regional managers. Once these were approved, it should be the responsibility of the regional managers to carry them out in light of the environment and constraints they face. The functional unit ADs opposed the regional managers’ position, pointing out that if the regional managers did not achieve their objectives, the functional ADs would suffer the consequences.
After hearing these views, the consultant formed the opinion that this was an intractable and complex problem that could be related to both people and structure. The consultant also noted that the regional budgets were huge, sometimes larger than the budgets for functional groups at HQ. Regional ADs also met infrequently—only once a month—with the director and functional ADs at HQ. Most of the time the regions seemed to operate fairly autonomously, whereas the director seemed to have ongoing involvement with the functional ADs.
An HQ staff member observed that over time the regional offices seemed to be getting bigger and had become fairly autonomous with functional staff mirroring the staff functions at HQ. The implication was that the regional staff would soon view the functional units at headquarters as a distant group that only set policy for the regions to interpret or ignore as they pleased.
A functional AD with several years of seniority at FTCA warned that the functional units must have some control audit and other functional activities in the region. The AD explained that without clear roles, reporting relationships, and accountabilities between the regions and HQ, FTCA could not provide citizens with transparent and fair treatment in the services under its mandate.
The regional ADs, however, saw their responsibilities as facilitating horizontal coordination within the regions to ensure that actions and decisions were consistent and reflected the legislative responsibility of the agency.
After a month of study and discussions with FTCA staff, the consultant realized that this was not going to be an easy problem to resolve. There were also rumblings as the project progressed that some regional ADs did not like the idea of restructuring FTCA to deal with these issues. They seemed to have considerable clout and power in the organization as a group and would resist any change to the status quo.
As the consultant sat down to write the report, a number of critical questions became apparent: Was FTCA a purely functional organization? Could the accountability issues be resolved through an acceptable organizational process and people training without the need for restructuring? What about power, politics, and conflict in this situation? Finally, would resistance to change become a problem as well?
1. Describe the current organization structure of FTCA. What is it? What are the strengths and weaknesses of such a structure?
2. Can FTCA operate effectively as a purely functional structure?
3. What roles do power and politics play in the current situation?
4. What kind of conflict is FTCA experiencing between HQ and regional managers?
5. Suggest a practical, workable solution to the problem at FTCA. If restructuring is part of your solution, describe what the structure would look like and justify from your knowledge of organization theory and design why it would work—that is, how it would improve the working relationship between headquarters and regional staff.
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