Challenges to Bureaucratic Organizations In the Modern Business World

International Journal of Applied Management of Change (ISSN: 1744-8190) Volume 1 Issue 1

Thomas E. Sprimont


As a professional consultant in business process efficiency and technology application, it is paramount that deliverables be effective and measurable. In working with organizations, results (often in the form of an ROI, or Return On Investment) are expected. (This is especially true of Six-Sigma and other quality and cost-driven companies.) These results are the analysis of a broad range of consulting experiences delivered to a variety of industries. Business processes, business goals, strategic and tactical planning, computer systems, organizational structure, and various technologies are involved. A successfully executed project relies on properly aligning many elements within a business, all interacting with organizational structure. This success requires change, much of which is driven by both internal and external constraints, and ultimately depends on the business’ ability to properly organize itself.

The content of this paper is based upon experiences in working with a range of companies, from high-technology to industrial manufacturers. The abstractions reflect the issues companies face, the challenges of meeting their business objectives, and the results of delivering products and services. These experiences are not singular in nature. They are based upon a large spectrum of companies and consulting projects. My experience ranges from large multi-national corporations as Toshiba, General Motors, and Bechtel, to small mid and micro-caps, to entrepreneurial startup companies. The consulting work preformed ranged from inter-departmental ERP software implementations to corporate-wide business process reengineering to managing software products from inception through market release. All of the consulting work delivered is based on real returns to the target companies. This real world experience has crafted a perspective of how to structure successful business improvements in today’s fluid business climate.

This paper reviews the historical aspects of business organization to establish perspective, leading to recent business challenges, and the details of the factors that actually drive change. The paper focuses on effectively managing this change through methods, which cast a broad net, rather than discrete and independent changes throughout an organization. Finally, the business challenges of today and tomorrow are reviewed in respect to the organization. These challenges require a deconstruction of a bureaucratic structure due to the rapidly changing constraints under which businesses must exist. Organizations can only be partially effective if they retain rigid hierarchical or horizontal structures. It is these very structures that prevent businesses from attaining a true state of responsiveness. This responsiveness interacts with customers, suppliers, shareholders, employees, regulations, international laws, new technologies and processes, management theories, changing business practices, the environment, and other important factors to a business’ viability. Without a purposeful eye toward how an organization is structured, how it functions, and how it interacts internally and externally, little headway can be made in overall improvements. By reviewing these principles in the context of business operations, we learn how to propose meaningful and effective changes that impact the business’ bottom line. This is critical to any change-agent involved with business operations, regardless of the scope or sphere of influence.

In order to maintain an effective business consultancy, professionals working with companies must realize that the organization itself is often the largest impediment to success. Improvements in process, technology application, business planning methods, logistics, use of software, training, and other areas, can no longer justify the cost and effort of independent change. That is to say that single point efforts to yield bottom line improvements are becoming less effective over time. This is due largely to external constraints and pressures on the business itself. Just a few examples are competitors, changes in markets, fast-evolving customer requirements, changes in technologies, obsolescence of processes and technologies, global competition, off-shoring work, business partnerships, changing laws and regulations, international standards, and employee training.

The key to continued business viability is based on understanding which business factors should be tied together for specific results (expected ROI, or improvements). It is no longer feasible to expect the implementation of a multi-million dollar ERP system to yield business-wide benefits. Certainly some benefits will occur. But as with any project, at least 100% of the cost will be incurred, while less that 100% of the benefit will be realized. True success can only stem from including other factors into this implementation. Business Process Reengineering, Supply Chain Management Initiatives, use of collaborative tools in complex workflows, and strategic information technology infrastructure planning all must accompany an ERP deployment. This is only a single example of how a business “improvement” cannot occur without including a much broader scope within the company itself. This is true for any business initiative that seeks to improve the business itself. Finally, it is the organization itself that is both overarching and underlying all instances of business improvement. This paper’s objective is to convey how business goals, business process, and organizational structure are integral parts of a business’ success. The consumption model (companies and consumers who purchase goods and services) has radically changed in the post-industrial age. Market demands can only be satisfied by organizational structures that appear very different than the large bureaucratic structures created by the industrial revolution.

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