Systems Thinking by Jamshid Gharajedaghi

Author:Jamshid Gharajedaghi
Language: eng
Format: epub
ISBN: 978-0-12-385915-0
Publisher: Elsevier Science
Published: 2011-02-20T16:00:00+00:00

8.3.7. Structural Incompatibility

XYZ is faced with a series of incompatibilities in its architecture (structure, function, and process) that arise from the requirements of new realities in its environment. The present structure of XYZ is consistent with an organizational legacy that proved extremely successful in an era when the system was operating in a stable and growing environment. It is a typical organizational structure, a dominant form of organization in corporate America today. The model was initially developed (by Alfred Sloan of GM) to meet the increasing challenges of managing growth in diversified markets. The basic architecture of this model is made of a series of semi-autonomous divisions operating under the central control of a powerful headquarters (the brain of the firm). Each division is a miniature of the whole and responsible for operating in a predefined product/market niche. The assigned niche defines the identity, viability, and scope of the operation of each division. The required competency of each division is a prediction of the demand and preparation for it. Otherwise, the divisions are expected to follow a pre-established mode of operation with no deviation. The administrative functions are the essential means of central control. These functions are duplicated throughout the organization. Conversely technical competencies are diffused and differentiated across product divisions in the form of local technologies. Since each division is to operate with a predefined product, technology, and a given market territory, interactions between them are minimized. This reduces conflict and complexity and increases focus and accountability. Success is achieved by staying the same and cloning the product divisions in several markets, a perfect model for a stable and growing and predictable business environment. This perfect structure, however, becomes grossly dysfunctional in an unstable and unpredictable environment latent with new sets of obstructions and opportunities. To be viable in this environment requires flexibility and core competency. Note that state-of-the-art capabilities, which are specific to a particular operation and cannot be successfully duplicated in different contexts, are not considered to be core competencies. Incompatibility of control and service functions at the corporate level produces unnecessary confusion, making both functions ineffective. Service providers are expected to perform a control function while simultaneously providing a service. As a means to avoid the control/service conflict, services that could be easily and effectively shared are duplicated. This chimerical quality results in continuous boundary disputes and loss of accountability. On the other hand, control functions, by being part of a service company, lose their proper legitimacy to be taken seriously. This, especially in a context of a culture that avoids bad news and conflicts in exchange for peace, does not provide a proper setting for an effective learning and early warning system. It reduces the control function to a minimum, mostly a bureaucratic form (i.e., supervision). Finally, determination of the attributes and capabilities that are to be common to all parts of the organization and those that are unique to specific parts of an operation is of paramount importance. The critical question, then, is the process (how) by which these objectives are to be achieved.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.