Management - Vikhanskiy OS

4.5. A market-oriented organization

This type of organization is in practice a kind of combination of the above new types. A market-oriented organization , or, as they say, a "market-driven" organization, can be described as follows. By the nature of interaction with the external environment (ie, the market), it is an organic type of organization that quickly adapts to what is happening outside its changes. By the nature of the interaction of parts within the organization, this is either a developed divisional or a real matrix structure. And finally, by the nature of the interaction of the individual with the organization, this is an individualist type. The principal difference of this type of organization from others is that if in the previous cases only a part of the organization was grouped around the market, then in this case it is a question of grouping all parts of the organization around the market or markets.

The transition to market-oriented organizations was due to the fact that the old, "pre-market" structures did not keep up with the rapidly changing market environment. "Pre-market" organizations, driven by the production of a functional product or service, ensuring productivity growth, did not always solve efficiency issues. With functional orientation, all functions are known at the top and, therefore, decisions are made there. The functional nature of the organization focuses more on solving internal problems (for example, how to allocate resources) than on solving consumer problems. Separate or matrix approaches are formal in such organizations. The intersection of the "line" and the "function" creates a constant conflict in which the "function" always wants to become a "line" in the decision. Within the "functions" is also a struggle for influence on the decision. These political games lead the organization away from the consumer. The organization is engaged in constant coordination of issues, i.e. Internally focused. In such organizations, each work is described to the details, mainly taken into account individual achievements, group work is not recognized in due measure and is often absent altogether. The scheme of the structure of the "pre-market" organization is clear, they try to follow without deviations.

With undeveloped market relations, this type of organization can have a number of advantages. It allows you to work on the principle of "divide and rule" in the management of the company. In this case, you can control everything, the development of work on a functional basis reaches its perfection. Narrow specialization in work to a high level develops skills and abilities. In general, all these advantages are optimized in the direction of servicing the interests of owners, managers and employees of the organization, but not the consumer.

With the development of the market, there are serious shortcomings of the "pre-market" approach to designing an organization. The designed "walls" between the functions drive organizational disease - functionalism - deep into the depths. At the same time, the duplication of works grouped according to different criteria, for example, by territory or by product, is increasing (in some cases up to 10 times) the cost of hardware structures, decision-making takes a long time. The entire organization is visible only from above and only for guidance; Hence the whole responsibility is above, and in the bottom, in this sense, is emptiness. Delegation of authority in such conditions is difficult. There is a lack of innovation. These shortcomings prevent the organization from being optimized towards the consumer and ultimately towards the market.

In this context, a developed market creates for the business organization the following environment for its functioning.

"Massiveness" of the market is generated not by the "similarity" of millions of consumers, but by their individuality, which forces the organization to differentiate as much as possible. A developed market makes it possible for a small organization to compete with a large one, because efficiency is not the priority, but efficiency. The emergence of thousands of new competitors requires the organization to strengthen domestic competition. The explosive speed of changes in products and services becomes incompatible with rigid schemes of the organizational structure and requires a transition to new ways of dividing the work in the organization. The aggravation of competition is compensated by the development of partnership and alliance in business, giving the organization more flexibility. Entrepreneurial approach gives rise to many ways of running the same business, which makes it necessary for the organization to develop innovation.

The development of the market develops people. People are more prepared for work and want more participation in the affairs of the organization. Since life outside the organization changes very quickly, people expect rapid changes within the organization. Otherwise, they can leave the ineffective organization in the effective.

The development of information systems makes it possible for every employee to have the necessary information about both the overall situation in the organization as a whole and the situation at any level of the organization. Free movement of information on levels in any direction allows, if necessary, to delegate decision making down to any level.

These factors require the organization focused on the market, the three main qualities : flexibility, adaptability and innovation. In the movement in this direction of many business organizations the following tendencies are manifested. The organization is strengthening the grouping of works on markets. More effort is applied to adapt the product to the consumer. In this case, there is frequent change in the product. Streams of information are accelerating. The structure of the organization begins to be more and more networked. The management system becomes the main resource of the enterprise. Everything in the organization is aimed at convergence of those who make a decision, with those who buy this solution, by consumers. This, in turn, requires reducing the number of management levels in the organization and transferring responsibility to the lower levels of the hierarchy, located closer to the consumer and taking the risk. Group work, role behavior and interaction based on trust are important.

The development of these trends changes the structure of a market-oriented organization in the following areas. Connections in the structure of the organization are formed more under the influence of the organization's relationship with the consumer ( processes ), rather than the relationship between functions (Figure 8.12).

Market orientation in the grouping of parts of the organization

Figure 8.12. Market orientation in the grouping of parts of the organization (from "function" to "processes")

The organization is designed based on the needs of the consumer. As a result, rather autonomous groups appear instead of a rigid hierarchy (Figure 8.13). These groups are usually given the status of a "profit center" or a business group.

Matrix and Organic Approaches to Differentiation of Organizations

Fig. 8.13. Matrix and Organic Approaches to Differentiation of Organizations

The groups themselves, in which everyone is responsible for everything, function within the framework of the process assigned to them.

Thus, the network diagram of the structure is formed (Figure 8.14).

Network outline of the structure

Fig. 8.14. Network outline of the structure

One of the options on which to build a general outline of the organization structure, market-oriented, can be the following. At the top of the organization, only the key functions that determine its position on the market are usually centralized. So, in IBM (Figure 8.15) at the headquarters of the corporation centralized mainly functions related to the overall development of the company: research and development, finance, personnel, information systems.

The structure of the company's IBM

Fig. 8.15. The structure of the company's IBM

At the next level of the organization, as a rule, production operations are decentralized. Since the end of 1985, instead of existing "productization" in IBM, regionalization of the corporation structure was carried out. As a result, the company has decentralized production at the level of "continents".

At the lower level, the organization is grouped according to product or geographic principles with the creation of profit centers on this basis.

In IBM, this level is grouped on the basis of "country" marketing. It is at this level that the direct access of the organization to the consumer, to the market, begins. The relationship between the given and the next higher levels is built on the basis of a matrix that combines the product and the territory. To the country branches, IBM provided a high degree of autonomy. The management of each branch is headed by a council almost entirely consisting of citizens of the given country and including at best one obligatory director-foreigner. In relation to research and production operations, the branch is subordinated to the headquarters. On all other issues within the home country, the branch independently manages the administration without any significant external intervention from above.
In another computer company, Digitl Equment Corporation, also market-oriented, the outline of the structure is more like an entrepreneurial option, although the general principle of building a market-oriented organization is the basis (Figure 8.16).

CONSUMERS

Scheme of the structure of a market-oriented organization

Fig. 8.16. Scheme of the structure of a market-oriented organization - the version of "Digitl Equiment Corporation"

The process of performing work in a market-oriented organization also takes on a special form. Since the main thing is the execution of each individual order, then the work is grouped along this chain. The workers are mastering the process as a whole, and not some separate functions. It is important to take into account the total costs, and not just expenses in the production sphere. The supply also becomes common to all activities in the organization. A system of single through planning is being developed that permeates all functions. This contributes to the information system, which is brought to each individual worker and which functions on the basis of personal computers and information centers. The described organization of work becomes effective if everyone works literally under one roof, i.e. In the same building.

Particular importance in a market-oriented organization is given to the distribution of rights and responsibilities. At the top there are as many rights as necessary to ensure optimal performance of the work. This is combined with the autonomization of working groups or production departments. As the solutions approach the consumer, there is less agreement on these decisions on the levels. The main task of the leadership in these conditions is the definition of policy, general rules of activity. The actions of the management in this direction consist in the formation of the organizational culture, the development of information systems and the measurement of the results of the work. All this is accompanied by a general reduction of "hardware" staff, the allocation of working groups to administrative functions and, conversely, administrative - workers. Risk in business and trust in relationships are the basis of the organization of the market type.

The position of the individual in the organization, driven by the market, becomes new. The predominant features are professionalization, emphasis on managerial roles. Priority is given to horizontal growth of the employee and development of interfunctional experience. Group result gets more weight than individual result. The basis for career planning is not the job description, but the setting of individual goals. Errors made by the employee are not conclusions, but lessons are learned. Mentoring is cultivated and the ability to listen is valued. The employee's assessment is based on how quickly he reacts to changes, how much he understands the consumer and how innovative he is in solving problems. It takes into account his ability to delegate authority, the level of his motivation and the desire to achieve quality improvement. In these conditions, organizations need the personnel of high qualification and in their periodic rotation. For example, in IBM, almost every employee in one form or another changes jobs about every two years.

When the organization moves to a market orientation, it is recommended to begin the change from its upper levels. The leadership itself should demonstrate an example in this regard. His task is to inspire the lower classes. The introduction of elements of market design should be conducted on separate parts of the organization and take into account "local" features. With changes, attention should be focused on the development of organizational culture in the following areas: groups, risk, trust. Management in its development should also focus on the introduction of a group form of organization of work. Innovations should cascade to reach ordinary workers on a principle "heads train subordinates". The focus of personnel rearrangements should be interfunctional movements. In parallel, a new system for planning, measuring, stimulating and evaluating work should be introduced. The transition to the market structure is completed with the development of an information system with a common data bank and free access to it for each employee.