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Organizational theory and practice is undergoing a crisis due to major changes in business objectives and tasks. New business is multidimensional. It is shifting from mechanical to process technology, and from manufacturing to providing knowledge and services. Proven models, such as Fayol's model of functional organization and Sloan's model of federal decentralization for General Motors, are unsurpassed, and yet, they are unequipped to deal with today's problems. New organizational design principles focus on team organization, simulated decentralization, and systems structure. McKinsey Award Winner.

An examination of the Japanese style of management regarding decision making, corporate planning, worker productivity, and management training, suggests ways in which managers in the West might redirect their approaches to these issues. Topics described include decision by consensus, lifetime employment and continuous training, and managerial godfathers. Despite existing societal tensions and frustrations, Japan's managerial achievements contain answers to Western management's most pressing problems.

Effective decision-making requires a distinct sequence of steps. The sequence includes identifying a generic or unique problem, defining the issues of the problem, determining the required specifications, deciding what is right rather than what is acceptable, building action into the decision, and using feedback which tests the validity.

Productive business managers are those who obtain optimum economic results from the prevailing resources. A series of primary steps, which have proven to be highly effective for managers in actual business situations, include: 1) analyzing the facts in terms of opportunities and costs of products, as well as the contributions of staff, and the "cost streams"; 2) allocating resources, according to projected results, by analyzing present and future resource allocations; and 3) prioritizing decisions with respect to area of greatest potential for opportunity and results.

Public expectations with regard to big-business enterprise are rising sharply, and business leaders must prepare themselves to meet this challenge. Big companies are no longer private affairs, but community assets, and are expected to promote the country's competitiveness in world markets and innovate policies in new areas such as semi-free markets. They must also develop a code of conduct that reflects the double role of executives as businessmen and professionals.