POINTS OF VIEW
8090 Business Structures Theory
Traditionally, especially as taught by business schools, commercial organisations have been split up into a range of functions; including marketing, finance, personnel, operations etc. This was a convenient approach in the 1960s, where I started my own career, Much of commercial work then revolved around production, and accordingly this was a major part of the tuition by business schools at that time. Just emerging as a newly accepted discipline was marketing, and with it brand management -- which then took on wider role. Accounting and finance were, however, still very much the part of the organisation where managing directors came from. Personnel was barely mentioned, neither was purchasing, and - surprisingly from our current point of view -- strategy was little discussed.
Over 40 years since that time not much has changed, except that - due to the shift to service industries - production has dropped out of the picture. The main change, I suppose, is that strategy has emerged from being some specialism within marketing to become a major overall consideration of senior management. Equally personnel as grown to become human resources management programs. The problem is that all of the disciplines, driven by the academic specialists with their own axes to grind, have developed theories which are not particularly helpful to anyone.
A rather different approach has adopted by some organisation, especially those in the public sector. This is the approach which classically is followed by military forces. It is the line and staff approach. Incidentally, it was also the approach adopted by IBM during its most successful period. In other words, line management gets on with the day-to-day operations at the sharp end and concentrates on those, regardless of the disciplines to which they should nominally belong. Staff, on the other hand provide the logistical support to those operations and -- most importantly -- plan for the future.
Overlaid on this structure in IBM was something which, at that time, I described as cellular organic. I guess these days it most closely parallels networking. The essence of it, though, was that the organisation was made up of a of a large number of cells, typically each containing half a dozen or so individuals working on a specific activity or project, where the relationship between them and the rest of the organisation constantly shifted as circumstances changed. Such organisation though, is very difficult for the quite rigid compartmentalisation of the disciplines to handle.
The requirements for this new form of organisation are that the participants, the members who make up the cells, are multiskilled generalists. It is inevitable that any one point in time they will be focusing on one specialised activity -- which probably will be related to one of the traditional disciplines -- but within a relatively short time (certainly within a couple of years) they may well have moved into a totally different area using skills they have learned to apply in different disciplines. This implies that lifelong learning, albeit in a very practical form, is at the heart of the new organisations in Britain. I have written is a great deal about lifelong learning elsewhere.
It also implies that these cells are self managing, self organising. In the good old days, where people worked on the assembly line, it was possible to give them an instruction book to determine exactly what was wanted in every circumstance; and the Organisation and Methods (O&M) staff were the keepers of the rulebook. Now, where services are all-important but almost ephemeral, is not possible to tell someone how to handle every situation. Education is part of the answer, but the more general solution is to create a framework of values which guide workers through their decisions. These may be functionally based values, such as making the offer as safe as possible for the customer or as cheap as possible. More potent, even, was -- as in IBM -- linking them to ethical values. Thus IBM's marketing was driven by the two word phrase 'Customer Service' . Its production – and especially its research - was driven by 'Pursuit of Excellence', which also spilled over into marketing. Its most important relationship with its staff was defined by 'Respect for the Individual' -- a potent blend of looking after the individual and letting the individual have their heads.
What links all these together in the behaviour of any one individual has to come down to common sense. The IBM slogan for much of its life was simply THINK. That was seen by the rest the world as a meaningless slogan, but it was in fact a very powerful instruction to follow for every given situation. You didn't have to look at the cliches which the academics told you to apply to their disciplines, but you would actually think your way through it yourself!
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