Customer Reviews

The Individualized Corporation: A Fundamentally New Approach to Management

5 star:		(4)
4 star:		(2)
3 star:		(2)
2 star:		(1)
1 star:		(0)

 

 

This is a sound and thorough description of the principles and practices underlying a shift from the hierarchical, bureaucratic mode of managing to one based on recognition of the talents of the people within the organisation, which seeks to enhance and release those talents for shared ends.

Having said that, it is a bit difficult to see why the book has been given such extravagant praise. Nearly everything in it was anticipated by the Pinchots in 1993 and the themes covered are very well established (and were already established when it was first published in 1997). Although it is not new, the principles are still not widely followed, so any additional material that may serve to spread the message is welcome.

The material is good. The reliance on a lot of examples makes it very discursive, but the sub-heads through the text are useful. There is a slightly breathless air of 'discovery' through the book that would be acceptable if the ideas and prescriptions were in fact new.

"In 1682, English astronomer Sir Edmund Halley had the good fortune to be at the right place at the right time. His observations on the spectacular comet that now bears his name helped earn him the prestigious title of Astronomer Royal.More important to this professional scientist was the fact that this fortuitous opportunity inspired a flurry of other research activity that led to new and important discoveries about the nature of our universe." Sumantra Ghoshal and Christopher A. Bartlett write, "While hardly on the same grand scale as Sir Edmund, we, too, have been fortunate to have had a front-row seat at a once-in-a-lifetime event- the collapse of an outmoded corporate form and the emergence of a new management model that we believe will propel today's companies well into the twenty-first century. At the heart of the emerging model lie not only some very different organizational practices and processes but also a fundamentally different management philosophy. In this book, we describe this new management model and illustrate how some of the pioneers of this new approach have implemented it in their companies" (from the Introduction).

They divide their book into four parts. In the first part, they present the concept of the Individualized Corporation. In the second part, they describe the organizational characteristics required to develop three core capabilities that distinguish the Individualized Corporation. In the third part, they explore the managerial implications of these new organizational characteristics and focus on how companies can go about building and managing the Individualized Corporation. Finally, in the fourth part, they step back from the details of defining the characteristics of the Individualized Corporation and describing how to build and manage it, to examine the more profound issues of a new managerial philosophy that underlies this new corporate model.

In this context, in the third part, after introducing the new corporate model, they examine new management roles and tasks of this new model that are radically different from the classic ones:

1. Operating-Level Managers

* Changing role: From operational implementers to aggressive entrepreneurs.

* Primary value added: Driving business performance by focusing on productivity, innovation, and growth within frontline units.

* Key activities and tasks: Creating and pursuing new growth opportunities for the business. Attracting and developing resources and competencies. Managing continuous performance improvement within the unit.

2. Senior-Level Managers

* Changing role: From administrative controllers to supportive coaches.

* Primary value added: Providing the support and coordination to bring large-company advantage to the independent frontline units.

* Key activities and tasks: Developing individuals and supporting their activities. Linking dispersed knowledge, skills, and best practices across units. Managing the tension between short-term performance and long-term ambition.

3. Top-Level Managers

* Changing role: From resource allocators to institutional leaders.

* Primary value added: Creating and embedding a sense of direction, commitment, and challenge to people throughout the organization.

* Key activities and tasks: Challenging embedded assumptions while establishing a stretching opportunity horizon and performance standards. Institutionalizing a set of norms and values to support cooperation and trust. Creating an overarching corporate purpose and ambition.

Finally, they say that "Halley's comet will return to our corner of the solar system in the year 2062. When it does, we believe our successors will look back at the Individualized Corporation as the revolutionary new model that brought business organizations into the postindustrial, information-intensive age of knowledge."

Highly recommended.

Sumantra Ghoshal is Professor of Strategy and International Management at the London Business School, UK. Previously he was Professor of Public Policy at French business school INSEAD. Christopher A. Bartlett is Professor of Business Administration at Harvard Business School. They are both prominent authors of numerous management books and articles. This book won the 1997 Igor Ansoff Award. The book is split up in four parts, each consisting of 2-to-4 chapters.

Part I - Birth of a New Corporate Model serves as an introduction, describing "the most profound change in management in a lifetime": the move from organization man to individualized corporation. "In this book, we will describe this management model and illustrate how some of the pioneers of this new approach have implemented it in their own companies." The first chapter, The Rediscovery of Management, frames the historical context and describes the authors' research motivation. The second chapter, Rebirth of an Organization Man, provides an example of how the transformational changes at one company affected the activities, motivation, and performance of a "classic organization man." In Part II - From Organization Man to Individualized Corporation, the authors describe the organizational characteristics required to develop the three core capabilities that distinguish the 'individualized corporation'. The first core capability is its ability to inspire individual creativity and initiative in all its people, built on a fundamental faith in individuals. The second core characteristic is the ability to link and leverage pockets of entrepreneurial activity and individual expertise by building an integrated process of organizational learning. The third core feature is its ability to continuously renew itself. Each core capability is discussed in detail. The third part of the book - Building and Managing the Individualized Corporation - explores the managerial implications fo above mentioned characteristics and on how companies can go about building and managing the individualized corporation. The authors use the final chapter of this part to discuss the transformation process that has taken at various companies, such as Philips Electronics, ABB, ISS, 3M, McKinsey & Co., and General Electric. In the fourth and final part - Toward A New Corporate Era - the authors examine the new managerial philosophy behind this new corporate model. By using the case of Swedish company IKEA, they explain the redefinition of "the role of corporate management away from its classic focus on strategy, structure, and systems to one built around purpose, process, and people". This redefinition is really the main message of the book.

I have a mixed feeling about this book. Yes, I believe that the authors are right in the sense that we have now entered the era of individualized corporations. But my main feeling is that I either read this book too late or that it was published too late. Some other great management thinkers, such as Peter F. Drucker, Charles Handy and Henri Mintzberg, have covered this subject/trend several decades before. Also, the book does not provide us with enough tips and checklist to enable us to manage these (new) types of organization. The book is also rather long and I recommend other readers to go for the three authors' Harvard Business Review-articles covering this book, starting with "Changing the Role of Top Management: Beyond Strategy to Purpose" (1994).

Okay, I admit it. The title intrigued me: The Individualized Corporation: A Fundamentally New Approach to Management. In screaming red letters across the top of the book jacket, it professed: "Great companies are defined by Purpose, Process and People." Yep. I agreed with that. So I tucked it under my arm and took it home for some light, bed-time reading....
They said up front: "While not offering either universal solution or a quick-fix prescription, we believe we can provide managers with a perspective that will allow them to make sense of the revolution in which they find themselves, as well as suggest some ideas to help them manage successfully through it."
I don't believe in quick fixes either, so I kept reading. And before I knew it, two hours had passed.
The Individualized Corporation is interesting reading. I found it similar to Collins & Porras' Built to Last, with lots of examples from companies who have been successful. Similarly, this book compares and contrasts the Individualized Corporation and the definitive Organizational Man.
I don't think there is anything profoundly "new" in this book, but I did think that the book provides a great context in which many "new" concepts can be much more than just the "program du jour." They simply are great ways for companies to do business.
They maintain there are three core capabilities that distinquish the Individualized Corporation:
* The ability to inspire individual creativity and initiative in all its people, built on the fundamental faith in individuals.
* The ability to link and leverage pockets of entrepreneurial activity and individual expertise by building an integrated process of organizational learning.
* The ability to continuously renew itself.
I agree with much of the book - in theory. I think the challenge, however, is in implementation. The leadership and management have to have faith in individuals - and each other.
The book develops a "new" model of the organization as a "portfolio of processes" rather than a hierarchy of tasks. It describes the new roles that frontline, middle and top-level managers must play and examines the personal attitudes, knowledge, and skills they will need in order to succeed.
It gives some (not lots) of examples of companies who have successfully evolved. From these examples, we might be able to figure out what will work within our own culture.
Clearly, a program of the month strategy won't work. Leadership must be committed to a set of core values around purpose, process and people -- and behave consistently and systematically.
While this is a great book for forward thinkers -- I am not sure mainstream corporate America is willing to have as much faith in the individual as Ghoshal and Bartlett have.

A very well researched book with plenty of grounded case-studies on the subject. Content has been nicely laid-out in a logical fashion which makes the book very readable. Authors have taken a holistics view of the subject with appropriate references to other current literature. The book is full of valuable insights. Undoubtedly, this is one of the best books published on this subject and should be a must-read book for all serious practitioners. Bipin Junnarkar Director, Knowledge Management Monsanto Company

Management thinkers over the last 8 decades have been trying to come up with the perfect structure, whether it's the functional structure, the matric, the SBU structure and it is generally felt that if this problem is figured out the rest of the pieces of jigsaw will fall in place. Ghoshal and Bartlett differ, and drawing from the thoughts of other thinkers make a case that structure does not matter so much unless your processes make your company a place where the people love to come to. Where the control, compliance paradigm of organizations are replaced by the discipline, stretch, trust paradigm.

The book is packed with examples but an area that is not stressed which crops up again and again is that of leadership. Whether it is Percy Barvenik of ABB, or Welch of GE or Rajat Gupta of McKinsey, or Grove of Intel. They all perfected the art of "cooking sweet with sour" or combining the O and E factors for development (as Nohria and Beer put it)...The authors could have stressed more on that factor.

This book gave a new perspective to watch the firms in the new century.

A lot of cases explained how purpose, process, and people works under the new doctrins. However, empirical proofs should increase their creditibilty on their breakthrough suggestions.

How to use these concepts in contexts that differ than those appeared in this book is worth to further study.

Without doubt, Ghoshal and Bartlett have captured the essence of good management and, in particular, they have numerous examples from the "real" world that back up their assertions as to what good management is all about.
Having said that, I am not quite sure why the book has an introduction titled: "Birth of a new corporate model." Just about everything they are recommending has been said before, many times. Thirty-seven years before the publication of this book in 1997, McGregor published his findings in The Human Side of Enterprise and labelled two sets of assumptions espoused by managers as Theory X and Theory Y. This book of Ghoshal and Bartlett is recommending the assumptions put forward by McGregor as Theory Y.
Even so, although little is new, the principles are not widely followed today, so any additional material that may serve to spread the message is very welcome so, despite the criticism, it is a good book on the subject.
I have a problem, however, with the sub-title: "A fundamentally new approach to management". Is this a marketing ploy? I really can't believe that an author of the calibre of the late Sumantra Ghoshal could honestly believe this! Pity, because it could give young, aspirant leaders and managers the impression that it's all new when it is not.

This book simply does not live up to its hype. I expected a more informative book and was, sad to say, disappointed.