Professional Documents
Culture Documents
With in last ten or fifteen years three fundamental changes has been occurred.
1. The primary –products economy has come “uncoupled” from the industrial
economy. Capital movement rather than trade in goods and service have become
the engines and driving force of the world economy.
3. The third major change is the emergence of the symbol economy –capital
movements exchange rates and credit flow as the flywheel of the world economy
in the place of the real economy.
.
Japanese way of doing business:
Changes in jobs and their content are also creating mismatches in management.
Technology is one factor. We know how to train people to do technology such as
engineering or chemistry, but we do not know how to endow managers with
technology and it dynamics, the opportunities its offers and it impact on product and
process markets, organization structures and people.
Today even a medium sized company have an environmental specialist one assistant
treasurer who does nothing but manage cash and liquidity and tries to protect the
company against foreign-exchange losses and another one who watches over costly
benefits programs.
Since the 1950’s at many major manufacturing companies staff employment has
grown five to ten times as fast as the number of “ operating “ people in production
engineering, accounting, research, sales and customer service. The unchecked growth
and excessive power of service staff is considered by practically all our foreign critics
to be a serious weakness of industry and major cause of its poor performance.
The information-based structure is flat with far fewer levels of management than
conventional ones require. When a large multinational manufacturer restructured
itself around information and its flow it found that seven of its twelve levels of
management could be cut out.
The information based structure makes irrelevant the famous principle of the span of
control, according to which the number of subordinates who can report to one
superior is strictly limited with five or six being the upper limit. Its place is taken by a
new principle ---I call it as span of communications: the number of people reporting
to take responsibility for their own communications and relationships, upward,
sideways and downward control. “ Control “ it turns out is the ability to obtain
information. Information provides that in depth, and with the greater speed and
accuracy than reporting to the boss can possibly do.
The information based organization does not actually require advanced “ information
technology”. All it requires is willingness to ask, who requires what information
when and where? With nothing more hi tech than the quill pen,
Union Flexibility:
The old delusion persists that “ capitalists” pay wages out of the “ profits “—despite
the fact that wages and salaries in a developed economy account for some thing likes
85 percent of revenues and profits for at most 5 to 6 percent. Most labor still see the
work force as homogeneous and as composed of adult males who work full time and
who are the sole breadwinners in their families. Finally that the value of the benefit is
not determined by how much it does for the beneficiary to the employee, but by how
much it cost the employer; if a given benefit costs the employer more it is
automatically seen as a victory of Union. These assumptions were perhaps defensible
thirty years ago. First the large part of the wage needs to flexible instead of being
fixed: It needs to be geared to performance, to profitability and productivity.
The innovative company understands the innovation starts with and ideas.
Executives in innovative organizations demand that people with the ideas think
through the work need to turn an idea into a product, a process, a business or a
technology. These executives know that it is as difficult and risky to convert a small
idea into a successful reality as it to make a major innovation. They aim at innovation
a new business. It means creation of new value and new satisfaction for the customer.