Tuesday, 8 September 2009

Management models and Social Advantage

 

    In the latest issue of the MLab’s Labnotes, Julian Birkinshaw suggests that organisations need to think as much about their management models (the choices firms make about what happens inside their organisations) as they do their business models (choices about their sources of revenue, their cost structure etc).

These choices include:

  • Choices about the nature of the objectives the firm pursues (ranging from alignment to obliquity)
  • Choices about how individuals are motivated to pursue these objectives (extrinsic to intrinsic)
  • Choices about how activities are co-ordinated in the firm (bureaucracy to emergence)
  • Choices about how decisions are made in the firm (hierarchy or collective wisdom).

 

I think this is a useful, new input to management thinking.

However, I’m not sure about the four dimensions of Birkinshaw’s framework (the four choices above).  Where does the Social Advantage approach fit into it this for example?

 

Social Advantage as collective wisdom

Although it doesn’t fit the framework that neatly, I’d have to say that Social Advantage fits best with the last two choices: managing across (emergence vs bureaucracy) and especially managing down (collective wisdom vs hierarchy).  But then these are ‘means’, and  think Social Advantage is very much about ‘ends’.

And I think some other dimensions are probably at least as important to Social Advantage as those presented in the model.  For example, what the organisation focuses on – outcomes or business impacts, And how importantly the organisation sees people working together in teams, or just sharing information between themselves.

 

Collective wisdom AND hierarchy

Also, although Social Advantage is probably best supported by a flat structure, I don’t see that it requires the end of hierarchy.  To me, the dimensions of the model are probably paradoxes (this and that) rather than polar opposites (this or that).

Anyway, polar opposites aren’t really in the spirit of the Moon Shots – particularly M20:

“ Better optimise trade-offs.  Management systems tend to force either-or choices.  What’s needed are hybrid systems that subtly optimise key trade-offs.”

 

So, I don’t feel very positive about the framework, but I suppose if it encourages organisational leaders to think about their management model, and perhaps what dimensions will be important to them, then I guess it will do its job.

As Birkinshaw himself notes,

“There is no one best management model…  Rather, there are choices to be made, and the appropriate choice depends on a host of circumstantial and competitive factors.  Firms who generate competitive advantage out of their management model are the ones that make conscious and distinctive choices about what principles to follow.”

 

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