Organizational Survival in the New World

Alex Bennet, David Bennet

• Verlag: Routledge
• Jahr: 2004
• ISBN:
  9781136375040
• Auflage: 1
• Thema: Business
• Thema: Business generale

In this book David and Alex Bennet propose a new model for organizations that enables them to react more quickly and fluidly to today's fast-changing, dynamic business environment: the Intelligent Complex Adaptive System (ICAS). ICAS is a new organic model of the firm based on recent research in complexity and neuroscience, and incorporating networking theory and knowledge management, and turns the living system metaphor into a reality for organizations. This book synthesizes new thinking about organizational structure from the fields listed above into ICAS, a new systems model for the successful organization of the future designed to help leaders and managers of knowledge organizations succeed in a non-linear, complex, fast-changing and turbulent environment. Technology enables connectivity, and the ICAS model takes advantage of that connectivity by fostering the development of dynamic, effective and trusting relationships in a new organizational structure. This book outlines the model in chapter four, and then breaks down the model into its components in the next two chapters. This is a benefit to readers since different components of the model can be implemented at different times, so the book can guide implementation of one or all of the components as a manager sees fit. There are eight characteristics of the ICAS: organizational intelligence, unity and shared purpose, optimum complexity, selectivity, knowledge centricity, flow, permeable boundaries, and multi-dimensionality.

Part I

The Groundwork^*

Chapters 1 and 2, supported by the Appendix, set the context for a new theory of the firm.

Chapter 1 moves through the bureaucratic model to foundational concepts of the early and mid twentieth century, skimming such questions as: How do organizations evolve? What did organizations look like at the beginning of the twentieth century? What is the relationship of organizations to their environment? How is information technology changing that environment? What does it mean to be world-class? What are the challenges to becoming a world-class organization?

Chapter 2 explores the fundamental forces that will challenge future organizational survival in an environment filled with accelerating change, rising uncertainty, and increasing complexity. These forces are presented from both a systems-level perspective and in terms of connectivity; data, information, and knowledge; access; speed and digitization. These fundamental forces of the environment—along with the growing anxiety of individuals in organizations—are the four major descriptors relative to the future environment.

* Many of these concepts were originally published as “Rise of the Knowledge Organization” in Barquin, R. C., A. Bennet. and S. G. Remez (eds), Knowledge Management: the Catalyst for Electronic Government, Vienna, VA: Management Concepts, Inc., 2001, and reprinted with that title in Holsapple, C. W. (ed), Handbook on Knowledge Management 1: Knowledge Matters, New York Springer-Verlag, 2003.

Chapter 1

MOVING BEYOND THE BUREAUCRATIC MODEL

With the rise of large corporations in the early twentieth century came a strong interest in research in fields such as leadership, management, organizational theory, and capitalism. Frederick Taylor, Henri Fayol, Mary Parker Follet, Chester Bernard, Adam Smith, Herbert Simon, Abraham Maslow, etc. (the list goes on and on), all contributed to the foundational research and set of organizational concepts of the early and mid twentieth century. This era created the formal foundation of management and organizational theory. Although the origins lay in Weber’s bureaucracy, church and state autocracy, and military leadership, these were all modified by the social, political, and capitalistic drives in the free world after World War 11. The new theories and concepts such as Theory X, Theory Y, Theory Z, Charismatic and Transformational Leadership, General Systems Theory, and Organizational Linking Pins became popular and a noticeable shift occurred from bureaucracy toward a more benign and malleable organizational structure. Tools such as Management by Exception, Span of Control, Kurt Lewin’s Force Field Analysis, and Taichi Ohno’s Toyota Production Line techniques helped both managers and workers to implement change throughout their organizations. While some changes occurred, most organizations continued to be hierarchical and as Whyte (1956) noted in his widely read Organization Man, large organizations were still forcing people into molds and stereotypes. Knowledge and information were held close by supervisors and managers and protected as they represented power and authority. Economic progress was relatively steady and, until the 1970s) fairly predictable. During this post-bureaucratic era the key factors were a combination of Tayloristic time and motion management and participative management, slowly bringing some of the workforce into the arena of worker responsibility and empowerment.

Organizations strove for clear rules and policies that all employees were expected to follow with few exceptions and little initiative. Of course, many of the tools encouraged innovation, but unfortunately few organizations saw the need to risk doing anything drastically different. In colloquial language, during the 1950–1970 period, most large organizations were fat, dumb, and happy. Although pressured by a better-educated workforce and the growing ranks of knowledge professionals to provide a more participative environment, most large organizations held steadfastly to their belief in the fundamental hierarchical structure.

As the affluence, mobility, and expectations of the workforce in developed countries continued to rise, coupled with the explosive growth of information and communication technologies and the subsequent increase in the creation of knowledge, organizations found themselves in situations of restructure or collapse. The old mechanical metaphor could no longer function in the nonlinear, dynamic, complex global web of the mid 1990s. Many organizations failed, many were acquired, and the best set about seeking the popular vision of the “world-class” corporation. The stage was now set for the rise of the information and knowledge organizations, with the information organizations taking the lead via computers and communications technology in the early 1980s and 1990s and the knowledge organizations, currently in their early form, focusing on networking and knowledge creation, sharing, and application. We now consider the fundamental characteristics of these modern leading-edge knowledge organizations.

The Metamorphosis: Breaking Free of the Cocoon

Peter Drucker (1993) broadly describes the current shift from industry to information to knowledge, which started around 1960 and is expected to continue until 2010 or 2020, as follows: “We are entering the knowledge society in which the basic resource is no longer capital, or natural resources, or labor, but is and will be knowledge, and where knowledge workers will play a central role” (quoted in Skyrme, 1999, p. 11). Since these concepts are used extensively in describing the current and future organization, it is important to clarify our interpretation of the terms data, information, and knowledge. We are acutely aware of the many definitions and interpretations of the words data, information, and knowledge and we do not propose that “our)) use is “the” correct one. Rather, we take a pragmatic stance and offer the following meanings to these terms. Following Wiig (1993), we consider data to be sequences of numbers and letters; spoken words; pictures; even physical objects when presented without context. We take information as data with some level of context and meaning, noting that both context and meaning require human interpretation and understanding. It is usually presented to describe a situation or condition and therefore has added value over data. Knowledge is built on data and information, often heavily dependent on context, and created within the individual. Knowledge represents understanding of situations and their context, insights into the relationships within a system, and the ability to identify leverage points and weaknesses and to understand future implications of actions taken to resolve problems. It represents a richer and more meaningful awareness and understanding that resonates with how the “knower” views the world. Knowledge is frequently considered actionable. In brief, knowledge is the human capacity to take effective action in varied and uncertain situations. By capacity we mean both potential and actual ability. We now address the characteristics of the best of the best organizations in the year 2000.

Time accelerates. Distance shrinks. Networks expand. Information overwhelms. Interdependencies grow geometrically. Uncertainty dominates. Complexity boggles the mind. Such is the environment and the context within which current organizations must compete, survive, and thrive (see Chapter 2).

This situation is a result of many years of evolution driven by a number of major factors. Of significance is the increasing economic affluence of the worker in the developed countries coupled with increased education level. This has resulted in a strong demand by workers to be recognized, respected, and allowed to participate and have determination in their work. Economic growth and technology provide both the means and pressures for mobility, thereby giving individuals the freedom to leave their jobs for other, more challenging positions. While the last 50 years has seen many ups and downs in terms of employment, productivity, interest rates, investments, etc., overall the recent decades have provided increasing wealth and economic success.

Consistent with this history, every organization lives at the pleasure of its environment—economic, sociological, political, and technological. For example, state charters legitimize corporations, the Occupational Safety and Health Administration (OSHA) and Department of Labor mandate tight restrictions on both safety and personnel regulations, the Environmental Protection Agency (EPA) regulates organizational behavior relative to environmental impact, and the business media heavily influences corporate stock values depending upon local and temporal events. Technology plays a dominant role in determining both the landscape of competition and the cultural and educational needs of the workforce. It is arguably true that technology has played the strongest role in creating the present environment within which organizations must adapt and learn to excel compared to their competitors. For example, tremendous increases in processing speed, communication bandwidth, miniaturization of computers, and the development of complex algorithms and application programs have created the rapidly changing pace of society and the increasing need and capability for communication, collaboration, and networking, both virtual and real. The phenomenal rise of the Internet, coupled with the spin-offs of intranets, extranets, etc., have created a networking potential which drives all of society and corporations in terms of speed, interdependencies, global markets, and the creation and spread of memes (see p. 213) instantaneously throughout the world. Those organizations which have found ways to compete successfully within this nonlinear, complex, and dynamic environment may dominate their competitors by as much as 25 percent in growth rate and profitability relative to the average organization in their industry.

There are specific characteristics of these “world-class’’ organizations that are major determinants of their success. While most of today’s organizations are far from world class, many of the better ones are working hard to improve their performance, that is, efficiency, effectiveness, and sustained competitive advantage, in order to stay competitive and in some cases prevent being acquired or going into bankruptcy.

Many of the tools, methods, structures, and principles that the best companies have found to drive high performance are neither new nor, in many cases, unique. For example, the ideas that Toyota created in the late 1940s and early 1950s relative to lean manufacturing in the automobile industry, although refined and improved, are still considered world class and, in fact, Toyota has been considered to be a leader throughout the world in automobile manufacturing (Womack et al., 1990). Taichi Ohno created the Toyota production system just after World War I1 as a response to changing customer demands and potential bankruptcy (Shingo, 1989). The system eventually included just-in-time supply parts delivery, workers on the factory floor taking responsibility for the production line quality and having authority to stop the production line, and teams of workers solving problems on the factory floor and learning cross-functional jobs to ensure continuous production line flows. Shingo notes that it took Toyota over 20 years to perfect the system (Shingo, 1989). Approximately 50 years later many of these ideas are still considered best practices and used by corporations throughout the world. Note that they represent a breaking away of the bureaucratic hierarchical chain of command and minimum freedom of the worker.

In Built to Last, Collins and Porras did a six-year study of 18 companies who had outstanding performance over time periods between 50 and 200 years (Collins and Porras, 1994). They sought the fundamental factors creating such performance. Considering their results with other research on long-lived world-class firms, we suggest the following factors as being representative of long-term, highly successful companies:

• Continuous striving to improve themselves and doing better tomorrow than what they did today, always remaining sensitive to their customers and their environment.
• Not focusing on profitability alone, but balancing their efforts to include employee quality of life, community relations, environmental concerns, customer satisfaction, and stakeholder return.
• A willingness to take risks with an insistence that they be prudent and an overall balanced risk portfolio. In general, they were financially conservative.
• A strong feeling about their core ideology, changing it seldom if ever. Their core values form a solid foundation and while each company’s individual values were unique, once created they were not allowed to drift with the fashions of the day. These core values molded their culture, and created a strong sense of identity.
• Relative to their employees, these companies demanded a strong “fit” with their culture and their standards. Thus, employees either felt the organization was a great place to work and flourished, or they were likely short-term. At the same time these companies were tolerant of individuals on the margins who experimented and tested for possibilities.

Many current top organizations have made significant changes in the way they do business in the past decade and have been able to create performance through change management and deliberately develop the fundamental characteristics that support success. These characteristics must provide those responses needed to excel in the present environment. For example, time to market or the ability to develop new products rapidly is a key factor in many industries because of customer demands and the decreased production time made available by technology, concurrent engineering, and agile production techniques. The use of simulation, integrated product teams, and world-wide subject-matter experts operating virtually has created the capacity to quickly bring new knowledge and ideas together to rapidly produce products desired by a fickle and impatient market. Examples of this capability are mass customization, where economic order quantities of one are being pursued, and agility, the ability of an organization to move rapidly in response to changing and unique customer needs. Creativity and innovation have come to the forefront as key success factors with many organizations striving to develop and unleash these capacities throughout their workforce, using a combination of management, the workforce, and their customers.

Employee involvement has now been accepted and understood by world-class organizations and many “hope-to-besl’ Examples are Wal-Mart, Hewlett-Packard, IBM, Texas Instruments, Motorola, and the Chaparral Steel Company. These world-class organizational structures have moved significantly away from bureaucratic decision-making, and have modified their hierarchies to include team-based organizations and horizontal structures with minimum “white space.” These firms encourage cross-communication by all employees, supported by technology such as e-mails and groupware, and reward employees who play a strong role in influencing organizational direction and decision-making.

These organizations, working predominantly in the fast-moving world of information and knowledge application, also recognize the value of decisions made at the lowest qualified level and the payoff from smart workers who know their jobs. However, for employees at all levels to make effective decisions, they must understand the context within which those decisions are to be made. This context is provided through shared vision, clear values, and strong corporate direction and purpose, combined with open communication. As described by Peter Senge in The Fifth Discipline, smart companies put significant effort into transferring their vision, purpose, and goals to all employees. Good employee decision-making stems from understanding their work in terms of its impact on adjacent areas of the corporation and its direct impact on the customer. The first of these requires effective empowerment and systems thinking and the second results from customer orientation and focus (Senge, 1990). Note how far the leading companies have departed from Weber’s description of bureaucracy (see Appendix) and how impotent his bureaucracy would be in the current world context. One could think of today’s best organizations as flexible and sensitive hierarchies.

Nurtured by total quality management, the transfer of best business practices has recently become a hallmark of high-performing organizations. A number of tools have been developed in the recent past that have helped compan...

Inhaltsverzeichnis

• Cover
• Half Title
• Title Page
• Copyright
• CONTENTS
• LIST OF FIGURES AND TABLES
• FOREWORD
• PREFACE
• ACKNOWLEDGMENTS
• INTRODUCTION
• DEDICATION
• Part I: The Groundwork
• Part II: The Theory
• Part III: The ICAS in Practice
• Part IV: The Knowledge Solution
• Part V: The Probable Future
• Appendix: THE EVOLUTION OF THE ORGANIZATION
• BIBLIOGRAPHY
• INDEX