According Roberts (2005: 12), “achieving high performance in a business results from establishing and maintaining a fit among three elements: the strategy of the firm, its organizational design, and the environment in which it operates”. These three components are intrinsic related, and since companies can not control the environment changes, they should adequate their strategies and restructure their organization to fit new sceneries.  The importance is crucial: as stated by Child (2008: 3), “the gains previously to be had from market protection, proprietary technology, and scale economies have become steadily eroded by trade liberalization, technology transfer, and the development of flexible production technologies, that could be acquired from the market or imitated”.  But, he observed, “organization, on the other hand, is an asset that each company has to develop to suit its need and situation, and it cannot be bought off-the-shelf”.

Globalization, new technologies, the knowledge-based economy and hypercompetition are just some of the challenges that modern firms must deal with these days. So how companies can develop competitive advantage in such continuous changing environments?  Let’s study two firms and see what make them successful over years of background changes.

Southwest Airlines

Starting in 1971 with three Boeing 737 aircraft serving three Texas cities, Southwest Airlines became one of the “World’s Most Admired Companies” by Fortune 500 (2009), with more than 3,300 flights a day, 35,000 total employees and a business of eleven billion dollars (Southwest, 2009). What they did to be so successful? How they created – and adapted – their strategy to new market conditions?

According to Gittell (2003), “is its ability to build and sustain high performance relationships among managers, employees, unions, and suppliers, characterized by shared goals, shared knowledge, and mutual respect”. Observe that all the ecosystem is involved, external parties inclusive. The unions are viewed as partners, rather than adversaries. Concerning to deal with employees, we can cite some strategies.

Solid corporate culture. From general managers to front line workers, the corporate culture and policies must be followed. A reasonable personal development plan is also another motivational measure to create a high productive atmosphere. They take seriously rewards and celebrations, and doing that, interconnects the three key organizing processes, as stated by Child(2008), control, integration and reward.

Respect employees. The no-layoff policy showed to employees that they are valued.   Treating people as equal and with respect, they could reduced hierarchy and bureaucracy. They created competitive advantage making the work environment fun, and it was transmitted to customers, and as observed by Roberts (2005: 18), that culture “operates as a social motivation and control system”. With proactive conflict resolution, they improve performance and satisfaction. Among with job security, people helped whenever necessary to provide a quality service, independent of formal positions.

Market Dominance. With lowest fares and most productive work force, they started to dominate the market, with now 60% in almost every non stop city-pair it serves (Freiberg & Freiberg, 1996). These factors were converted into highest completion factor and best safety record, and made Southwest Airlines the successful company it is.

Semco

The Brazilian Semco is a good example of how different and innovative an organization can be. Founded on the 1950s by an Austrian engineer and started manufacturing centrifuges for vegetable oil industry, today Semco Group is market leader in industrial equipment area and solutions for postal and documents management (Semco, 2009), with 2,200 employees, annual growth of more than 20 percent and a 100 million dollars/year conglomerate (Guimaraes & Southerst, 2003). On 80’s, at that time 28 years old, Ricardo Semler took the family company from his father and started his revolution. Even during Brazilian erratic economic on 80s and 90s decades the company only grew up, sometimes over 100% an year. According Semler (2006), the democratic organization, with fully space for participation and freedom of information, make all difference between success and fail. What is the formula of success that several important companies are trying to copy? Some of the following factors contributed.

Participation and involvement. At Semco, workers decided every single aspects of company: from their own salaries to budgets and production goals. Democratic committees are spread throughout the company and they are so connected with corporate decisions that preferred a pay cut than facing layoffs (Semler, 2002). But to perform this, they need information, which leads us to the next factor.

Freedom of information.  Even the executives’ payroll is available for every employee. More than that, all of semco’s financial data is accessible. As observed by Child(2008: 398) “workers are free to question managers on any aspect of the business”.

Reducing hierarchy and bureaucracy.  At Semco, from executives to the trainees, there are only three levels (Guimaraes & Southerst, 2003). To optimize production, workers choose their working hours. I believe that this is the hardest aspect to implement on a big organization, and Semler accomplished it by the integration of the previous factor and a strong organizational culture.

Culture. To Semler, “an own and defined culture, that is not only adapted to the conditions of the moment, but perennial in their basic beliefs is an essential condition to companies survive in the long term” (Semler, 2002: 70, own translation from the Portuguese text). The organization was molded to be more effective to people, and doing that, Semler created a very profitable company.

Considerations

Others organizations failed to copy these companies because the focus only on strategy, but they did not create the necessary environment. The approach with people are completely different. They maintain the same hierarchical structure, without sharing of information. Every aspect mentioned are complementary. Alone, they will not give the same results and the strategy will fail.

These two companies have in common strong organizational culture, few hierarchy and a worker empowerment through a free information flow and participation. This is not a recipe to success, but examples of how extraordinary and innovative organizations can be, and we have many to learn from them.

Reference List

Child, John (2008) Organization: Contemporary principles and Practice. Malden: Blackwell Publishing

Fortune 500 (2009)World’s Most Admired Companies [Online]. Available from http://money.cnn.com/magazines/fortune/mostadmired/2009/snapshots/2068.html (Accessed: 21 December 2009)

Freiberg, Kevin & Freiberg, Jackie (1998) Nuts!: Southwest Airlines’ crazy recipe for business and personal success. New York: Bard Press

Gittell, Jody Hoffer (2003) The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGrwaw-Hill

Guimaraes, Roberto & Southerst, John (2003) Semco: work + space = freedom [Online]. Available from http://www.steelcase.com/em/files/eb5340fb8a984abab98477a0f83ab080/SemcoWorkSpaceFr.pdf (Accessed: 22 December 2009)

Roberts, John (2007) The Modern Firm: organizational design for performance growth. New York: Oxford University Press

Semco (2009) About the Semco Group [Online]. Available from http://www.semco.com.br/en/ (Accessed: 22 December 2009)

Southwest (2009) Southwest Airlines Fact Sheet [Online]. Available from http://www.southwest.com/about_swa/press/factsheet.html (Accessed: 21 December 2009)

Semler, Ricardo (2002) Virando a própria mesa. São Paulo: Rocco

Semler, Ricardo (2006) Você está louco! Uma vida administrada de outra forma. São Paulo: Rocco

Motivation is usually stimulated by rewards systems. When there is a measurable and proper way to assess individual contributions, these systems are an very effective way to have workers doing their jobs well. On the other hand, inappropriate indices are counterproductive, causing conflicts of interest. Also, motivation can come from organizational identification. Kulik (pp 185, in Gilliland et al, 2005) argued that “organizational identification develop a long-term commitment to the organization, and may be more likely to engage in behaviors intended to provide support to the organization”. Since workers spend at least 1/3 of their days inside companies, it became a question of quality of life to find and stay at companies witch we are identified.

This identification could be enhanced by loyalty. More common on Eastern culture, Western companies started to pay attention on it. But how this loyalty is achieved? Reichheld (1996: x) analyzed that “organizational loyalty is principled leadership”. Through leader’s example and commitment in create a healthy workplace, respecting workers opinions and take in consideration their interests, organization can gain the respect necessary to develop this relationship.

Since the authority chain is more practical and easy to occur through effective leadership, we can observe the second point raised by Roberts, coordination. According to Simon (1996: 288), “organizations, through the authority mechanism, provide a means for coordinating the activities of groups of individuals in ways that are not always easily achieved by markets.”

Considering the division and specialization of labor the coordination of efforts, together with motivation, contributes to increase the production process efficiency. Coordination also helps to improve communication process and a better adequation between workers’ and business’ goals. Southwest Airlines focused on creating this relationship first with its workers. After have motivated employees, they started to expand its culture to customers, with leaded to a market dominance of 60%. We can cite also Google, as a company that created an excellent workplace, with highly motivated people, and hired top-leaders such as Vinton G. Cerf, and Eric Schmidt to coordinate the company to the success it is today.

As students of Management, we have to understand these key organizational mechanisms and its influence on society and modern firms. Managers are a fundamental piece on this process. In this ecosystem, managers earn workers’ loyalty, use rewards systems to motivate efficiency and productivity, promote organizational identification and coordinate all this factors to achieve strategic objectives. Understating our roles in organizations and how its affect business activity, we will be more prepared to face the challenges that will appear in our career.

Reference List

Bradshaw, H.H (1998) 4×4 Leadership and the purpose of the firm. New York: Haworth Press

Gilliland, Stephen W. et al (2005) What motivates fairness in organizations. New York: Information Age Publishing

Reichheld, Frederick F. (1996) The Loyalty effect: the hidden force behind growth, profits, and lasting value. New York: Harvard Business School Press

Roberts, John (2007) The Modern Firm: organizational design for performance growth. New York: Oxford University Press

Simon, H. (1995) ‘Organizations and Markets’ Journal of Public Administration Research and Theory, 5 (3), pp. 273-294

Let’s analyze the publishing market. Due the vast content produced and available over internet, selling books became a hard task. To continue in the business, they need to innovate. O’Reilly, one of the biggest technology publishers, created a new business model to deal with this problem, and used internet on its advantage. All his books are now available on-demand over internet. They launched a product called Safari books online (Oreilly, 2009), where final consumers and corporations can buy a subscription and get online access to over 8.500 books. If a consumer likes, he can also order the printed version, a pdf or another electronic format.

Amazon also made another revolution with kindle (Amazon, 2009), an electronic book device reader, that could storage over 1.500 books, with also wirelessly delivery of magazines and newspapers and fully integrated with amazon’s online store. As Richardson (2010) analyzed, being supported by the entire Amazon ecosystem, this product are revolutionizing the way americans reads. And now Amazon is expanding it to international markets.

These companies changed the way they are organized and its internal and external relationships to keep on the market, but as observed by Bouwman (2005: 46), “improving the effectiveness of organizations with the use of ICT is a (very) long-term affair”. Even now they continue the process of adaptation to the environment.

As exemplified by Amazon and O’Reilly, the challenge is how to use problems caused by new technologies at our own favor, as a strategic advantage, and how to use ICT to improve organization knowledge sharing and decision making process.

References

Amazon (2009) Kindle Device [Online]. Available from http://www.amazon.com/kindle-store-ebooks-newspapers-blogs/b/ref=topnav_storetab_kinh?ie=UTF8&node=133141011 (Accessed: 19 December 2009)

Bouwman, Harry, et al (2005) Information & Communication Technology in Organizations . London: Sage Press

Child, John (2008) Organization: Contemporary principles and Practice. Malden: Blackwell Publishing

O’Reilly Media (2009) Safari Books Online [Online]. Available from http://my.safaribooksonline.com/ (Accessed: 19 December 2009)

Richardson, Adam (2010) Innovation X: Why a Company’s Toughest Problems Are Its Greatest Advantage. San Francisco: Jossey-Bass

Roberts, John (2007) The Modern Firm: organizational design for performance growth. New York: Oxford University Press

University of Liverpool/Laureate Online Education (2009). Lecture notes from Strategic Organisation Module [Online]. Available from: University of Liverpool/Laureate Online Education VLE (Accessed: 17 December 2009)

Organisation could be defined both as structural, processual and boundary-crossing models. As structures, they can be divided as basic structure and procedures.

Basic structures are related to how we will model the company to work. As Child (2008) stated, “its purpose is to contribute to the successful implementation of objectives by allocating people and resources to necessary tasks and designating responsibility and authority for their control and coordination”. When we think about hierarchy, we have to consider both horizontal and vertical aspects. Levels, layers, authority and reporting lines are examples of how to design hierarchies. As procedures, the principal aspects are rules and standards, schedules and Systems.

An good example of importance of hierarchy changing are United Nations. Due its big scope and mission, it was created as a bureaucratic, with strict adherence to rules, higher vertical layers of control, and many horizontal specialization groups and units. United Nation Mission in Timor-Leste, a peacekeeping operation established in 2006 (UN, 2006), has so many subdivisions and hierarchic structure that to approve a travel from a district to another you need five signatures, and it takes at least 3 days.

As process, according Child(2008) the three key points are integration, control and reward. The Debian Project, an not-for-profit organisation that develops a Free Operating System called Debian (2009), is another example. With several specialized groups that are interdependent, to launch a new version is necessary a fully integration of its members. Control is executed by each team coordinator, and the reward comes from public recognition.

But these aspects are not isolated. We can identify both aspects – structural and processual ones – on modern companies. To be competitive, they have to improve all of it, according its own culture and size.

References

Child, John (2008) Organization: contemporary principles and practice. 2nd ed. Oxford: Blackwell Publishing

Debian Project (2009) A brief history of Debian [Online]. Available from http://www.debian.org/doc/manuals/project-history/index.en.html (Accessed: 12 December 2009)

United Nations (2006) Security Council Resolution 1704 [Online]. Available from http://daccess-ods.un.org/access.nsf/Get?OpenAgent&DS=S/RES/1704%20(2006) &Lang=E&Area=UNDOC (Accessed: 12 December 2009)

2010 será um ano de transição. Planos para casamento, compra de apartamento, mudança de emprego. Hora de colocar em prática novos planos, e tirar a teia de antigos. E embora tenha descuidado legal, o administrando.net continua sendo um xodó.

Descobri na prática que ser perfeccionista muitas vezes só atrapalha. Não vou prometer atualizar constantemente o blog e me desiludir caso não consiga, mas pretendo dedicar algum tempo a ele. Pelo menos os textos que escrevo para o mestrado vou colocar por aqui, toda semana. Aos poucos o blog vai se arrumando e sendo atualizado. Quem quiser acompanhar pelo twitter também estamos por lá (@edermarques)

Obrigado a todos os que comentaram e ajudaram a deixar o conteúdo ainda mais útil.

Um feliz 2010 a todos!

Deixando de lado a ficção, vejamos o que podemos aprender com Prison Break, evitando ao máximo spoilers.

Michael, com seus super-poderes de engenheiro, parece saber tudo sobre tudo. Isto soa bem parecido com o que nos é exigido, e que os livros de negócios, alguns recheados de auto-ajuda, tentam nos passar. Papo furado. Não precisamos saber tudo, nem nunca saberemos, o que precisamos é pesquisar e planejar as ações. Ter em conta os detalhes, pois no final das contas, são os eles que farão a diferença, e nosso protagonista faz isso muito bem.

Pensar rápido, e ser objetivo. Quando se toma grandes decisões, cujo efeitos também são bastante significativos, não podemos nos dar o luxo de “achar”. “Acho que está bom”. Você pode usar esta frase preparando o seu jantar, mas não decidindo projetos, administrando empresas. E aqui o gênio de Scolfield aparece novamente. Entre várias decisões de vida ou morte, ele é capaz de tomar diferentes rumos em busca do resultado esperado, sem perder tempo nem foco.

Cativar as pessoas. Se você quer que elas façam o impossível, elas precisam de um bom motivo, que não seja simplesmente seus lindos olhos. Além disso, a confiança é fundamental. Michael sabe disso, e consegue a cooperação de pessoas de vários perfis. Quando está em apuros, sabe negociar e lidar com os diferentes tipos de personalidades.

Além disso, uma boa dose de auto-confiança, determinação e vontade de vencer são essenciais, tanto para a fuga da prisão, quanto na vida real. Salvo as extrapolações, “coincidências” e “sorte” de nosso personagem, são habilidades como estas que eu gostaria de desenvolver melhor em 2009.

E você, o que pretende aprender neste novo ano? O que pretende melhorar? Deixe seu comentário.