Change or Change Management?


Our ability to deal with mega theme dramatic change is the subject of the next trend. Perhaps the single most important indicator for corporate success in the near future is the attitude of the company culture about change. The willingness of a structure to set itself up for change, to regard itself as a testing ground with daily battles, not just those that occur every planning period, is one of the best litmus paper indicators of eventual success or failure.

Today’s information explosion is just beginning. The growing list of mergers, alliances and joint ventures and the rapid deployment of technology are producing change at a velocity that even the seasoned players in businesses can’t surmise. The challenge for businesses will not be in how we manufacture or market change but how we manage it.

The days of the large-scale, vertically integrated corporation are numbered. The trend is toward smaller enterprises with increasing specialization of products are services: the upcoming approach is 50 people are the maximum for the company; if the staff gets above 50 people the company will be cut in two. There is no place to hide in a firm of 50 people. These small companies know what’s happening in their marketplace and with their competitors—they’re not from the marketplace.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Advertisements

Behavior of Committees


Committees are formally constituted bodies characterized by periodic, intermittent, or temporary rather than continuous functioning. Purposes for conducting a committee meeting almost always include an objective of gaining or maintaining inter-group coordination and/or cooperation. Staff or subgroup meetings have analogous purposes on the group level of analysis.

 

Committees integrate organizational behavior vertically in the authority hierarchy and/or horizontally across group boundaries. Committees may function primarily as a formal communications medium for one-way dissemination of information from above at one extreme all the way to omni-directional informational sharing (e.g., new projects, problems, etc.) at the other. Two other common committee functions are problem solving (e.g., performing a technical design, cost and schedule feasibility assessment) or decision making (e.g., adjusting and approving departmental overhead budgets for the upcoming three months).

 

There are both advantages and disadvantages to employing committees for any, or any combination, of these functions. The net effectiveness is emergent and is no doubt influenced by the nature of the tasks to be performed, the time available, the people involved, and primary task groups represented as well as other situational factors.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

 

Reengineering and Workers’ Decision-making


Companies that undertake reengineering not only compress processes horizontally by having case workers or case teams perform multiple, sequential tasks but vertically as well. Vertical compression means that at the points in a process where workers used to have to go up the managerial hierarchy for an answer, they now make their own decisions. Instead of separating decision-making from real work, decision-making becomes part of the work. Workers themselves now do that portion of a job that formerly managers performed.

 Under the mass-production paradigm, the tacit assumption is that the people, actually performing work, have neither the time nor the inclination to monitor and control it and that they lack the depth and breadth of knowledge required to make decisions about it. The industrial practice of building hierarchical management structures follows from this assumption. Accountants, auditors, and supervisors check, record, and monitor work. Managers supervise the worker bees and handle the exceptions. This assumption, and its consequences need to be discarded.

 The benefits of compressing work vertically as well as horizontally include fewer delays, lower overhead costs, better customer response, and greater empowerment for workers.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

 

 

 

Picking up on Lower Transaction Costs


Suppose a firm was pondering whether to integrate vertically into supplier activities or to keep buying supplies from the open market. One important factor is the decision would be the cost of each option. If the firm was buying the supplies from the market, it would have to search for the best price, best quality, and best on-time delivery, negotiate and sign a contract, and make sure that the terms of the contract are enforced. All these activities have costs associated with them—transaction costs. If the firm decided to integrate vertically, it would have to establish a value chain for the activities. It would hire, train, organize, motivate, and lead employees who carry out the activities of the supplier value chain internally—all of which also costs money. The firm would integrate vertically if its costs of organizing transactions internally are lower than those of doing so externally. That would depend on four things: asset specificity, uncertainty, the frequency of transactions, and whether the supplier is opportunistic. Asset specificity refers to how idiosyncratic an asset in the relationship becomes as it (the relationship) develops.

 

All else being equal, the higher the asset specificity, uncertainty, and frequency of transactions, the higher the transaction costs of market transactions, and the more the manufacturer should think about vertical integration.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com