Supply Chain Vector [Electronic resources] : Methods for Linking the Execution of Global Business Models With Financial Performance نسخه متنی

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Supply Chain Vector [Electronic resources] : Methods for Linking the Execution of Global Business Models With Financial Performance - نسخه متنی

Daniel L. Gardner

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Organizational Structure and Corporate Culture


An organizational structure that is personified by departmental hierarchies does not possess the flexibility to either create or respond to rapid changes in its markets. Distance, time zones, language and culture all limit the effectiveness of a top-to-bottom hierarchal approach to international management, creating reporting lines that are out of touch with the needs of the people at an operating level. Also, while responsibility and ownership must be clear among the various business functions, strict departmentalization has a tendency to create a corporate personality that is self-centered and selfish by nature.


When people are organized by department, human nature dictates that they gravitate to and identify with the entity closest to them. Familiarity may breed contempt, but in business the contempt is often aimed at people least familiar to an individual, those who work outside one's area. A maxim of social psychology, this phenomenon occurs whether one is working at a plant, division office or corporate headquarters. When conflicting goals or budgets are thrown into the mix, the combination of human nature and disparate agendas can be damaging to an enterprise and its supply chains.




This partially explains why there are perennial conflicts between sales and accounts receivable, purchasing and manufacturing or two competing divisions in a company. In fact, if one breaks down the word "division," it is ironic to find that it is a derivative of the verb "to divide." Thus, the tendency to internalize not only is innate to the human condition but is built into our business vernacular.


The above dynamics are exacerbated by the way in which organizations compensate performance with bonuses. Managers, just like Pavlov's dog, respond to conditioning. When incentive plans are based solely on departmental performance and not on overall company results, myopia will set in. The response in this situation is most predictable, with managers reacting to the plan by achieving goals that may be "productive" for their department but are deleterious to the company as a whole.


None of the above is intended to suggest a structure characterized by a decentralized free-for-all. Unbridled liberty without policies and some semblance of coherency will do more damage than a centralized, hierarchal model. The question becomes how to create a structure that allows for adaptation to local requirements while fostering the desired corporate culture, adherence to strategic corporate fiat and the achievement of financial goals.


Sometimes the answer to difficult business questions can be found in the most unlikely of places. Benchmarking is a powerful tool, especially when companies can learn from unrelated industries and successfully apply practices to their own set of circumstances. When dealing with such ethereal issues as corporate culture or structure, seeking benchmarking opportunities from places alien to commerce may also be a wise practice and can have a direct impact on supply chain performance.


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