Sunday, September 07, 2008

The Coming of the New Organization: Is the Kenyan Industry Well Prepared?

Peter F. Drucker, a writer, management consultant, and self-described “social ecologist” who was widely considered to be the father of “modern management,” in his 39 books and countless scholarly and popular articles explored how humans are organized across all sectors of society. More than 20 years ago he observed that the levels of management in large businesses are going to be reduced drastically in the next 20 years. He saw that the businesses will have no choice but to become information-based. According to him, the impact of computer technology on capital-investment decisions is going to be huge. Drucker rightly believed that before the advent of data-processing capacity using computer technology actual analysis used to take many years but now with a spreadsheet anyone can do the same work in few hours. He predicted that computer technology is going to eliminate all the layers of management levels and managers that function as boosters for the faint, unfocused signals that pass for communication in the traditional pre-information organization.Drucker believed that unlike today’s big companies, the large, information-based organizations will more likely resemble businesses of a century ago where all the knowledge lay with the very top people and the rest were helpers or hands.

When one looks at the various industries that we have, you notice that this kind of change can already be observed in pharmaceuticals, telecommunications, and paper-making industries. In these research-oriented businesses, the traditional sequence of research, development, manufacturing, and marketing is being replaced by synchrony where specialists from all these functions work together as a team, from the inception of research to a product’s establishment in the market.

A keen observation at the development in the various industries shows that information-based organizations require clear, simple, common objectives that translate into particular actions. They also need concentration on one objective or at most, on a few. Because of this, an information-based business must be structured around goals that clearly state the management’s performance expectations for the enterprise and for each part and specialist and around organized feedback that compares results with these performance expectations so that every member can exercise self-control. The key to such a system is that everyone asks: Who in this organization depends on me for what information? And on whom, in turn, do I depend?

A number of management problems will surface in the information-based organizations. These will include developing rewards, recognition, career opportunities for specialists, creating unified vision in the organization of specialists, devising the management structure for an organization of task forces, ensuring the supply, preparation, and testing of top management people. The other challenge that information-based organizations face is giving its organization of specialists a common vision, a view of the whole.

Lastly, the hardest challenge will probably be to ensure the supply, preparation, and testing of top management people. With the number of middle-management positions sharply cut, where will the information-based organization’s top executives come from? What will be their preparation? How will they have been tasted?

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