Requirements for keeping a business competitive increasingly depend on the
successful development and marketing of new products. In addition to having high
quality and efficiency, firms must now also be flexible enough to rapidly
develop products that "delight their customers" and reach the market early in
the product opportunity window.
Many firms are currently in trouble without even realizing it because they have continued to use old-world management paradigms that were almost universally accepted in the past.
Take the whiff test. Picture a young man shoveling manure into a wagon: the first shovelful takes his breath away. However, by the time he has filled the wagon, he is so used to the foul odor that he is no longer even aware of it. Most firms are in this same situation. They have become so accustomed to using conventional, old-world command-and-control ways of thinking and operating that they have either ignored its shortcomings (such as those depicted in Dilbert cartoons) or learned to live with the consequences, believing there was no valid alternative.
Today, many are learning that new-world thinking is probably the answer in the post-1990s world of business. New-world thinking has been discussed in management circles for a long time, but it was considered to be too idealistic to be useful in real world organizations. Few firms took it seriously until Douglas McGregor integrated early management thinking into his theory x, theory y concept.
Theory x, theory y. McGregor's concept described two contrasting assumptions about human nature and work. Theory x was based upon the old-world traditional, work-centered, authoritarian, mechanistic approach which assumed that employees dislike work and must be coerced by management to do it. Theory y was a new-world, people-centered humanistic, organic approach which assumed that people are dynamic enjoy meaningful challenging work, and can manage their own affairs.
Organizations, in their endeavor to survive, are beginning to identify and apply new-world paradigms to their businesses. They are encouraged by the booming market for management books and by consulting organizations. Time commitment and some cultural changes are required for businesses to prosper.
To help us formulate a new-world management paradigm, the following table lists typical management concepts and the differences when looking at them through old- or new-world paradigms.
Ask the Manager
Q: How can innovation and investment in new technologies increase the rate of economic growth without creating inflation?
A: As the economy grows, unemployment will decline. This puts pressure on employers to increase wages so that they can hire and retain qualified employees. These increases are then passed on to customers in the form of higher prices. This will result in inflation unless productivity--output per worker--is increased along with the increases in wages and prices. The problem is that increases in new technology will not boost productivity and growth by themselves. A new world concept called "complementarity" may be the answer. It recognizes that investments in new technology cannot achieve their full potential without a number of concurrent developments. At the local level, these might include the introduction of more flexible workplace organizations; the delegation of greater responsibility to non-managerial people; the utilization of workteams; the enhancement of skills, knowledge and education of all employees; and the installation of improved communication capabilities. Implementing the notion of complementarity would also be made easier by providing better education and training for those entering the workforce as well as upgrading the nation's communications infrastructure.
Q: Are most firms now involving workers in management decisions and self-starting teams?
A: No. As recently as Feb. 95, a Wall Street Journal survey found that only 13% of companies have experimented with self-management teams and 37% were involved with so-called total-quality management programs.
The Managerial Revolution
B. Old-World Pre-'90s
C. New-World Post-'90s
| Organizational Structure:
|| Stable, mechanistic, hierarchical
|| Flexible, organic, networks, cross-functional teams, flat
| Organizational Culture:
|| Fiefdoms, command and control, micromanaging, left-brain, theory x: work to eat.
|| Empowering, participative, left and right brain, theory y: eat to work
| Institutional Goals:
|| Profit and customer satisfaction
|| Profit and customer
| Focus of Managers:
|| Short-term operations, personal gain
|| Operations and long-term strategic management