The 21st Century Organisational Paradigm

by ayd

Table taken from “Managing change to win in today’s global village”, 5 & 6 February 1999.

20th Century 21st Century
Stability and Predictability Discontinous change, continuous improvement
Size and scale Speed and responsivness
Top-down “command and control” Empowerment; leadership from everybody
Organisational rigidity “Virtual” organisations, permanent flexibility
Control by rules and hierarchy Control by vision and values
Information closely guarded Information shared
Rational, quantitative analysis Creativity, intuition
Need for certainty Tolerance of ambiguity
Reactive; risk-averse Proactive; entrepreneurial
Process driven Results driven
Corporate independence and autonomy Interdependance; strategic alliances
Vertical integration “Virtual” integration
Internal organisational focus Focus on competitive environment
Consensus Constructive contention
Domestic market orientation International focus
Competitive advantage Collaborative advantage
Sustainable competitive advantage Hyper-competitive, constant reinvention of advantage
Competiting for todays market Creating tommorrow’s markets

The shift in paradigm fits a lot with other work stipulating the rise of the knowledge economy. How the organisations of the future will be very different from those of the past. Where reliance on human capital will be key to ensuring that your firm stays current in the race for competitive advantage, or as the table mentions is an environment of hyper-competition where firms are required to constantly reinvent advantage. This fits with “Blue Ocean Strategy” where you have to constantly compete by inventing market space, where innovation and risk-taking is valued.

This paradigm is visible in the technology sector, however, has it made inroads into more conventional sectors. I would argue that it has. GE now does local research in places like India and China, and the stripped down products are sold across the world as they provide greater value. Companies like 37signals which started life as a web design firm is now one of the most competitive web applications firms in the world, and according to founders’ book Rework had only 16 employees in 2 different continents who managed a company which made multi-million dollar profits annually.

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