Organizations dominate our lives, yet how well do we really understand them, and their differences? To get past the one-size-fits-all notion of organization design, this article presents four forms of organizations-the personal enterprise, the programmed machine, the professional assembly, and the project pioneer-each with its own way of managing and crafting strategy. Many organizations come remarkably close to one of these forms, while others can be understood as hybrids of them. Nevertheless, since organizations are made up of people, every one of us different, every single organization structure must be customized through a process of design doing.
If people want to fix health care in the U.S., they need to set aside the prevailing myths that the system is broken or just needs to become more competitive and "businesslike." Instead, they should focus on spreading the adoption of good, effective management practices that are already in use.
Decades of short-term management have inflated the importance of CEOs and reduced employees to fungible commodities. Middle managers, who see the connections between operations and strategy, can be instrumental in rebuilding a sense of community in businesses.
When they cut R&D, underinvest in their brands, and--worse--cut worker and middle management ranks, leaders are merely punishing their employees (and stockholders) for their own inability to create real value, says this McGill University professor. Productivity improvements come from better management or applying new technologies, not from making fewer people do more work.
Cities, buildings, products, services, systems, and strategies all face the same need to combine expertise, insight, engagement, and adaptation. As a result, it is time to confront the tensions of design, say the authors, who then define three approaches to design: the formulaic approach, exemplified by planned-city Brasilia; the visionary approach, exemplified by IKEA; and the evolutionary approach, exemplified by Linux. Along the way they show that design is not just a metaphor for management, but the very essence of it.
Managers are told: Be global and be local. Collaborate and compete. Change perpetually, and maintain order. Make the numbers while nurturing your people. To be effective, managers need to consider the juxtapositions to arrive at a deep integration of these seemingly contradictory concerns. That means they must focus not only on what they have to accomplish but also on how they have to think. When the authors, respectively the director of the Centre for Leadership Studies at the University of Exeter in the United Kingdom and the Cleghorn Professor of Management Studies at McGill University in Montreal, set out to develop a master's program for practicing managers, they saw that they could not rely on the usual MBA educational structure, which divides the management world into discrete business functions such as marketing and accounting. They needed an educational structure that encouraged synthesis rather than separation. Managing, they determined, involves five tasks, each with its own mindset: managing the self (the reflective mindset); managing organizations (the analytic mindset); managing context (the worldly mindset); managing relationships (the collaborative mindset); and managing change (the action mindset). The program is built on the exploration and integration of those five aspects of the managerial mind.
This is an MIT Sloan Management Review article. In an article written well before Enron became a euphemism for corporate irresponsibility, the authors make the case that such misdeeds, so prevalent in recent months, are symptoms of a syndrome of selfishness that has taken hold of our business institutions, our societies, and our minds. Drawing on history, literature, philosophy, and management thinking, they argue that the syndrome is built on a series of half-truths--or fabrications--each of which has driven a debilitating wedge into society. Our narrow view of ourselves as "economic man" has driven a wedge of distrust between our individual wants and our social needs. A distorted view of shareholder value has driven a wedge of disengagement between those who create economic performance and those who harvest it. Our obsession with heroic leadership has created a wedge of disconnection between leaders and everyone else. The glorification of the lean and mean organization has driven a wedge of discontinuity between short-term and long-term goals. And the convenient, widely held notion that "a rising tide lifts all boats" has ratified a wedge of disparity between the prime beneficiaries of stock-price increases and the large numbers of people disadvantaged by the corresponding actions. The authors challenge and deconstruct each of these flawed premises and offer an alternative. Real prosperity, they say, combines economic development with social generosity--and that requires a new philosophy of social and managerial engagement.
This is an MIT Sloan Management Review article. Renowned management thinker Henry Mintzberg and business professor Frances Westley zero in on three ways the best managers make decisions. To hone their decision-making skills, business leaders can start by admitting that real-world decisions are not always made through logical steps--and that often they shouldn't be. Most managers believe they make decisions by using analysis. Define the problem, they say, diagnose its causes, design possible solutions, choose and, finally, implement the choice. But they may make their best decisions in some other way--for example, after a flash of intuition or by trying out several things and keeping what works. The authors show that a focus on "thinking first" before choosing may interfere with a deep understanding of the issues dividing people and prevent a good decision. A decision-making approach the authors call "seeing first"--literally creating a picture with others to see everyone's concerns--can surface differences better than analysis and can force a genuine consensus. "Doing first"--going ahead with an action to learn--is the third approach. Each route is best under particular circumstances. Thinking first works best when the issue is clear, data are reliable, the context is structured, thoughts can be pinned down, and discipline can be applied--for example, in an established production process. Seeing first works best when many elements must be combined into creative solutions, commitment to those solutions is key, and communication across boundaries is essential--for example, in new-product development. Doing first works best when the situation is novel and confusing, when complicated specifications might get in the way, and a few simple relationship rules could help people move forward--for example, when companies face a disruptive technology.
Walk into any organization and you will get a snapshot of the company in action--people and products moving every which way. But ask for a picture of the company and you will be given the org chart, with its orderly little boxes showing just the names and titles of managers. Now there's a more revealing way to depict the people and operations within an organization--an approach called the organigraph. The organigraph is not a chart. It's a map that offers an overview of the company's functions and the ways that people organize themselves at work. Perhaps most important, an organigraph can help managers see untapped competitive opportunities. Drawing on the organigraphs they created for about a dozen companies, authors Mintzberg and Van der Heyden illustrate just how valuable a tool the organigraph is. For instance, one they created for Electrocomponents, a British distributor of electrical and mechanical items, led managers to a better understanding of the company's real expertise--business-to-business relationships. As a result of that insight, the company wisely decided to expand in Asia and to increase its Internet business. As one manager says, "It allowed the company to see all sorts of new possibilities." With traditional hierarchies vanishing and newfangled--and often quite complex--organizational forms taking their place, people are struggling to understand how their companies work. What parts connect to one another? How should processes and people come together? Whose ideas have to flow where? With their flexibility and realism, organigraphs give managers a new way to answer those questions.
The orchestra conductor is a popular metaphor for managers today--up there on the podium in complete control. But that image may be misleading, says McGill University and INSEAD Professor Henry Mintzberg, who recently spent a day with Bramwell Tovey, conductor of the Winnipeg Symphony Orchestra, in order to explore the metaphor. He found that Tovey does not operate like an absolute ruler but practices instead what Mintzberg calls covert leadership. Covert leadership means managing with a sense of nuances, constraints, and limitations. When a manager like Tovey guides an organization, he leads without seeming to, without his people being fully aware of all that he is doing. That's because in this world of professionals, a leader is not completely powerless--but neither does he have absolute control over others. As knowledge work grows in importance, the way an orchestra conductor really operates may serve as a good model for managers in a wide range of businesses. For example, Mintzberg found that Tovey does a lot more hands-on work than one might expect. More like a first-line supervisor than a hands-off executive, he takes direct and personal charge of what is getting done. In dealing with his musicians, his focus is on inspiring them, not empowering them. Like other professionals, the musicians don't need to be empowered--they're already secure in what they know and can do--but they do need to be infused with energy for the tasks at hand. This is the role of the covert leader: to act quietly and unobtrusively in order to exact not obedience but inspired performance.
Perhaps no other article published in the management literature has had the impact of Richard Pascale's piece on the "Honda Effect" that was published in the Spring 1984 issue of the California Management Review. This now classic article has stimulated considerable debate over the role and value of corporate strategy in business decision making--which is the subject of this forum. This special collection of essays includes an abridged version of Pascale's original article ("Perspectives on Strategy: The Real Story Behind Honda's Success"), an exchange of correspondence between Henry Mintzberg and Michael Goold, and new essays by Richard Rumlet, Michael Goold, and Richard Pascale, who revisits his own original article as well as this whole debate.
Henry Mintzberg, a professor of management at McGill University in Canada and at INSEAD in France, takes aim at the hype surrounding management fads and gurus and dares to suggest that the emperor has no clothes. In order to rile all who care about management and get them thinking creatively, he presents ten contrarian observations on such topics as the meanness of leanness, the folly of CEOs who fancy themselves strategists, the disempowering that so-called empowerment creates, the myopia of purely financial measures, and the inadequacy of M.B.A. programs.
The collapse of communism has led many in the West to declare that capitalism has triumphed. But Henry Mintzberg, professor of management at McGill University and INSEAD, says that this idea is overly simplistic. He argues further that the push for government to become more like business ignores both the value of the alternative forms of ownership we have in the West--including cooperative and nonprofit organizations--and the purpose of balance in our societies. A business model for managing government would treat its constituents as customers in an arm's-length trading relationship. But we are not merely customers of our government; we are also subjects (who have obligations), citizens (who have rights), and clients (who have complex needs). Thus we need a wide range of management models for providing public services.
Strategic planning has fallen from the pedestal it occupied when it came on the scene in the mid-1960s. Strategic planning failed because it is not the same as strategic thinking. Planning is about analysis--about breaking a goal into steps, formalizing those steps, and articulating the expected consequences. Strategic thinking, in contrast, is about synthesis. It involves intuition and creativity. The outcome of strategic thinking is an integrated perspective, a not-too-precisely articulated vision of direction that must be free to appear at any time and at any place in the organization.
What do managers do? A study of five CEOs and studies of managers conclude that managerial work involves interpersonal roles, informational roles, and decisional roles. These roles require developing peer relationships, carrying out negotiations, motivating subordinates, resolving conflicts, establishing information networks, making decisions with little or ambiguous information, and allocating resources. This article includes a commentary by the author outlining his perspective 15 years after the original publication of the article. McKinsey Award Winner.
Strategy requires multiple definitions to fully appreciate its implications. Accordingly, this article proposes five definitions--strategy as plan, ploy, pattern, position, and perspective--and analyzes how these definitions interrelate. Part II reconsiders the question of why organizations really do need strategies, and also shows how some long-held beliefs explain why organizations don't, as well as do, need strategies. It considers the needs for strategy to set direction, focus effort, define the organization, and provide consistency.
Formal planning alone is not the best way for managers to develop strategy. Facts, figures, and forecasts are necessary; but managers also need an intuitive understanding of the organization, a feel for the business not unlike a potter's feel for the clay. Strategy is not just a plan for the future but also a pattern out of the past. Strategies are not always deliberate--they also emerge over time as organizations innovate and respond to their markets. By seeing patterns take shape in their environments, the best strategists find strategies as well as create them. McKinsey Award Winner.
The characteristics of organizations fall into one of five natural configurations, each a combination of certain elements of structure and situation. The five configurations are the simple structure, machine bureaucracy, professional bureaucracy, divisionalized form, and adhocracy. These five configurations serve as an effective tool in diagnosing the problems of organizational design.
The left hemisphere of the brain controls logical thinking processes and the right hemisphere controls simultaneous processing. Human tasks often activate one side of the brain while leaving the other largely at rest. There may be a fundamental difference between formal planning and informal managing corresponding to differences in these two hemispheres of the brain. Educators will have to revise their notions regarding management education in order to bring about a balance between developing analytic and intuitive thought.