Written by one of the foremost scholars, the fully updatedSecond Edition of this successful text provides executives andadvanced business students with a wide-ranging and trustworthyguide to organizations as the conditions for their survival in ourglobal business environment change. JOHN CHILD is an internationally acknowledged expert onorganization and international business. He is particularly knownfor his grounded approach to the practice of management. AmongChild's 23 books, Corporate Co-evolution , co-authored withSuzana Rodrigues, won the 2009 Terry Book Award of the Academy ofManagement.
Organization and Its Importance
What This Chapter Covers
This book focuses on new trends and options in how we organize collective activity. The present chapter defines the key terms organizing, organization, and organizations . It then introduces the components of organization. Some of these are structural in nature, some are concerned with key processes, while others define boundaries. The components of organization are the parameters along which policy choices have to be made. Although there are limits to what the design of organization can achieve, these policy choices are highly consequential because serious problems can arise from inappropriate organization. The chapter closes with examples of such problems and a checklist to help identify their symptoms.
Purpose and Scope of This Book
In contemporary societies most work, and a good deal of leisure activity too, is carried out in cooperation with other people - it is collective. Often people are working with others in the same location, but increasingly it can involve collaboration across physical distances through Internet and satellite connections. The aim of this book is to provide you with useful insights into how good organization is a foundation for success in collective activity.
Although the book focuses on business companies, much of its content is also applicable to the many public and not-for-profit institutions that are also expected to organize themselves for delivering relevant services in an economic manner. The success of any company depends basically on two fundamental requirements: strategy and organization. The two are closely bound together. Strategy "establishes the criteria for choosing among alternative organizational forms." 1 Yet if its strategy is faulty a company's organization, however sound, cannot compensate for this deficiency. The failure of Kodak to recognize the strategic importance of digital photography is a case in point. On the other hand, an unsuitable organization will handicap a company from delivering sufficiently on its strategy, however well conceived this might be. For example, some business schools fail to capitalize on market opportunities because their faculty are organized in traditional supply-side departments rather than in customer-oriented program teams. Additionally, the formulation of a sound strategy in the contemporary business world relies on knowledge and insight being provided from all levels and units within a company. An inability to motivate and coordinate these inputs because of inadequate organization can prevent a good strategy from being formulated in the first place.
Superior organization offers one of the last sustainable sources of competitive advantage. The gains previously to be had from market entry barriers, proprietary technology, and scale economies have become steadily eroded by trade liberalization, technology transfer, and the development of flexible production technologies. Most resources and technologies can either be acquired from the market or imitated. Organization, on the other hand, is an asset that each company has to develop to suit its own needs and situation and it cannot be bought off-the-shelf. The globalization of markets and value chains, competitive pressures, and the ever-shortening cycles of innovation, place an increasing premium on the ability to organize a wide array of resources, especially human resources, so as to make speedy, intelligent, and coordinated moves in the competitive game.
We live in a challenging and dynamic time for organization. It is often said that the conventional ways in which companies and other collective endeavors have been organized in the past are inadequate for 21st century conditions. Also their two foundations - hierarchy and bureaucracy - today attract hostility because in the public mind they are associated