Exploring The Management Of Lean And Agile Organisation Business Essay Example
Exploring The Management Of Lean And Agile Organisation Business Essay Example

Exploring The Management Of Lean And Agile Organisation Business Essay Example

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  • Pages: 8 (2029 words)
  • Published: September 19, 2017
  • Type: Research Paper
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Management involves the skillful application of technique, as stated by Harris (1994). While ideas typically originate from individuals, it requires a diverse administration with multiple disciplines to transform them into products and bring them to the market.

An Administration is a group of individuals who have specified relationships with each other in order to achieve goals or objectives, such as a Club, Bank, or Manufacturing Company. Administration can also be defined as a structure that outlines the division of work and communication among individuals, groups, and resources (Dunderdale, 1994). Organizational behavior refers to the study of how individuals within an administration behave, which subsequently impacts the performance of the organization (Robbins, 1998-99).

This assignment focuses on the organization and its elements that define the management of lean and agile organizational behavior. The company chosen as an example is

...

SEMCO Manufacturing Company, also known as Semler & Company. SEMCO was founded in the 1950s by Antonio Curt Semler, an Australian engineer, with a focus on manufacturing extractors for the vegetable oils industry and engineering machines. In 1980, Ricardo Frank Semler, the founder's son, took over and implemented a series of changes. These changes included dismantling the rigid management structure imposed by his father and replacing it with a more flexible organization based on three core values: employee engagement, profit sharing, and the free flow of information.

Administration has expanded and diversified its areas of operation, particularly in the services sector and through partnerships with global leaders. Semco, as an organization, has successfully established itself as a market leader in various industries such as environmental consultancy, facilities management, real estate consultancy, inventory services, and mobile care services. It is also

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known for its expertise in industrial equipment and solutions related to postal and document management.


Open system theory in Organizational Management

The concept of open system theory was initially introduced by Ludwig von Bertanlanffy (1956), a biologist. However, its application extends to all fields. This theory defines a system as an interconnected collection of parts that are interdependent on each other (Scott 77). According to Laurie J Mullins (1999), an open system model can be used to explain and categorize management and organizational behavior within a company.

This Model of Organizational was beneficial to many companies, including Semco. Semco quickly applied the systems approach to the study of organizations and recognized that the surrounding environment has significant effects on organizational behavior and structure, and vice versa. Semco fits perfectly into the open system model of organization. As shown in fig 1.1, Semco faced competition from Elgin group equipment and a few engineering equipment manufacturing companies, but Semco's management inputs (staff, products, etc.) allowed for necessary transformation. Many organizations adopted the open systems perspective to grow their respective administrations. This perspective caught the attention of Semco, resulting in its growth as an administration from 1950 to 2009. Semco began with manufacturing extractors and hydraulic pumps in 1950 and expanded to producing refrigeration units, food processors, etc. This increased the company's share values, leading to the establishment of Semco consultancy and Semco schools. The schools manage a foundation that mentors and supports educational, cultural, environmental, and strategic projects.

(semco.com) However, many organizations do not operate according to a system. The progress of an organization may be significantly influenced by external environmental factors. Often, normative structures are only loosely connected to actual

behavior, both at the individual and group level. Pfeffer and Salancik observed that the organization is a coalition of groups and interests, each seeking to achieve something through interactions with others and each having its own preferences and objectives" (Pfeffer and Salancik, 1978 p.

Businesses function in an exterior environment where competition from rivals necessitates companies to consider legal, political, social, and economic influences. A PESTEL (Social, Legal, Economic, Political, Technological) analysis is regularly conducted by business planners to develop more informed strategies. This strategy can also be referred to as long-term plans.

Environmental influence can impact any organization in terms of competition, legislation, culture, or different ways of working. Division of Work: Division of work refers to how a company divides its tasks among different individuals (Moorhead and Griffin:1998). In any organization, division of work depends on factors such as the main function of the organization, the product or service offered, the location, common time frames, common procedures, number of staff employed, and the target customers or people to be served. Semco, as an organization, follows this division of work by designing tasks based on the nature of the work and the interests and job satisfaction of its staff (Ricardo Semler).

Organizational construction:

According to Mintzberg, the main elements of structure that serve as coordinating mechanisms for the work of an organization are Mutual Understanding, Direct Supervision, Standardization of Work procedures and its output, and Worker skills. Businesses need to be organized in a specific form referred to as organizational structure. Organizations can be structured in various ways depending on their goals and culture. The company's structure often determines its operations and performance (Waterman et al.).

Since the

1980s, organizational structures have typically been hierarchal, consisting of multiple divisions and sections responsible for different tasks, such as human resources management, production, or marketing. Each level of management oversees the operations of the lower level. However, there has been a recent shift towards a flatter structure where work is done in specialist teams rather than fixed sections.

The goal is to make the administration more flexible and delegate power by authorizing employees and eliminating intermediate management layers (Boyle, 2007). Semco Organization's model, created by Mickensy, is very similar to the Semco model. The organizational structure of Semco does not emphasize hierarchy or organizational charts, but follows a general layout based on the 7s model.

Centralization: Centralization in an organization refers to the process of centralizing or the state of being centralized. It involves combining or reducing several parts into a whole. In a centralized organization, decision-making power is concentrated at the top and there is minimal delegation of authority.

Advantage Of Centralization:

  • Easier implementation of a common policy for the entire administration.
  • Prevents sub-units from becoming overly dependent.
  • Easier coordination and management control.
  • Improved economies of scale and reduced overhead costs.
  • Increased utilization of specialization, including better facilities and equipment.
  • Enhanced decision-making that may otherwise be slower.
    • Arguments against centralization:
      • Centralised Administration requires more mechanistic construction.
      • Lengthens scalar concatenation (figure of different degrees in the construction of an administration).
      • However many Organization autumn someplace between these two extremes, there is a marked tendency toward more and more decentalisation.
    • Decentralisation: Semco as Decentralised:
      • A

decentralised organisation is one in which determination devising is non confined to a few top executives but instead is throughout the organisation, with directors at assorted degrees doing key.

  • Semco as Organisation falls in the Decentralisation of Organisation, the leader Ricardo Semler believes that in Organisation each and every staff are free to do their ain determination.
  • Full centralisation means minimal liberty and maximal limitations on operations of fractional monetary units of the organisation. Semco believes that as the organisation grows in size and complexity, decentralisation is generally considered to be effective and efficient, allowing decisions related to their area of responsibility. Semco is a strongly decentralised organisation where even the lowest-level managers and employees are empowered to make decisions. Semco does not adhere to the standards of companies with a predefined hierarchy and excessive formality. At Semco, people work with significant freedom, without formalities, and with a lot of respect. Everyone is treated equally, from high-level executives to the lowest-ranked employees.

    Hence, the true importance of each individual's work is given. However, some organizations may find this way of working problematic and ineffective. In modern times, employees seek more freedom from their administration for better performance. The author or founder believed in this type of working, which improved Semco as an organization.


    Advantages of Decentralization

    • Allows decisions to be made closer to the operational level.
    • Support services are more effective when they are closer to the intended activities they serve.
    • Provides opportunities for management training.
    • Easier to implement in private

    sector organizations compared to the public sector in terms of accountability, regularity, and uniformity.


    Major Change in Semco:

    The biggest challenge for any business is change. Many managers view the changes that Semco underwent as too extreme and unnecessary given the global environment at the time.

    Many argue that such drastic alterations were unnecessary to achieve the same level of success. However, Semco and Ricardo Semler had a different idea that was unique. On his first day as the new CEO, Ricardo Semler fired two-thirds of the top management of Semler & Company, including many close friends of his father, and started devising a product diversification strategy for the newly renamed Semco. Semler worked extensively to salvage the hesitant business and made some limited progress in his first year towards eliminating the old Semler & Company and its organizational legacy. However, it was not until he collapsed while touring a factory in the United States and was diagnosed with a severe case of stress that he decided to dramatically change his lifestyle and that of his employees. Although Semler had not yet formulated a strategic vision, he clearly perceived "a sense of stagnation, a lack of enthusiasm, a unease at Semco, and [knew] that [he] had to change it..."

    ''Semler revolutionized the rigid hierarchical structure imposed by his father and adopted a more flexible organization based on three core principles: employee engagement, profit sharing, and the free exchange of information. By 1998, Semco had limited its in-house functions to top management, applications, technology, some research and development, and a few other high-tech, capital-intensive functions that were considered essential to Semco's core competencies. The company had either

    transferred or completely outsourced all other functions to its subsidiary companies or external firms. Initially, many senior managers opposed outsourcing due to concerns about information leaks and the potential loss of competitive advantage.

    Semler firmly believed that continual innovation is the key to achieving a competitive advantage. The close relationship between Semco and its affiliates meant that most competitive data stayed within the organization. Semler believed that Semco had little strategic information and excessive planning hindered spontaneity and creativity. In support of his argument, Semler mentioned that 10-15% of the company's profits came from environmental consulting, which may have been included in Semco's strategic plan ten years earlier. Given Semco's ever-changing nature, Semler considered a corporate mission statement unnecessary. i. Semco's successful transition from an autocracy to an entrepreneurial democracy took fifteen eventful years.

    According to Semler, the alteration demonstrates that worker engagement does not result in bosses losing power. Instead, it removes the blind and irrational dictatorship that hinders productivity. By 1998, Semler believed that only about 30% of the organizational change process at Semco had been completed. Despite this, the rewards have been significant. The company, which was once stagnant, has thrived by refusing to waste its most valuable resource: its people. Despite a shrinking recession, increasing inflation, and chaotic national policy, Semco has grown six-fold. Productivity has increased nearly seven-fold.

    Net incomes have increased fivefold. Semco has experienced periods of up to 14 months without any workers leaving them. They currently have a backlog of over 2,000 job applications, with hundreds of individuals expressing a willingness to take any position just to be a part of Semco. In fact, articles about Semco as an organization

    generated more than 1,400 responses in the first week.

    Most significantly, altering the company changed the lives of Semco Associates.

    Conclusion:

    This assignment concludes that the survey of Management and Organizational behavior are essential aspects of successful Administration. It emphasizes the importance of understanding how organizations function and the influence they have over people's behavior. This assignment explains:

    • Open system model (Mullins) with Semco as an Organization and its Environmental Influences.
    • Division of work in relation to Centralization, Decentralization, Advantages of Decentralized and Centralized Organization, Arguments on Centralization, and Structure of Organization with 7s model. However, it does not explain hierarchy or chart of Organization as Semco does not follow those.
    • Culture of Semco in terms of its form and Principle values.
    • Highlights on the successful transformative changes carried out by Semco and its staff, which greatly improved Semco as an Organization.
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