Organisational Structure as Risk-Mediator (2)
Metaphors of the Organisation
Morgan (1986) defined eight (moderately famous) metaphors to describe different organisations:
- mechanistic,
- organismic,
- information processor/brain, culture,
- political/system,
- psychic prison,
- flux,
- transformation, and
- instrument of domination.
Of these, several were relevant to the findings of my PhD.
The organismic organisation is more capable of responding to tasks (market, agility) than performing template processes. The organismic organisation is adaptive, ad hoc receipt, and project-oriented. Important to the organismic organisation is understanding how groups of organisations, or industries, adapt and survive more than individual firms (thus the metaphor has parallels with the supply chain management meta-concept).
Organismic organisations emphasise the relationships between organisations and the market; they function best as open systems (in SCM theory, this would be broadly analogous with visibility); they have options in design so are innovative (Early Supplier Integration is the SCM near-equivalent); and they focus on market environments and the response of interrelated organisations (SCM: agility and collaboration). Their weaknesses are that they can be highly mechanistic (too well-suited to simple, repetitive tasks and lacking in innovation), they can sometimes struggle with social phenomena (which should be a key strength of the organismic organisation), and the poor functioning of interrelated organisations is usually attributed to lack of cooperation. In the course of my research, it became evident that SC arrangements feature stronger organismic organisations linked with mechanistic suppliers.
In the brain organisation, uncertainty is inevitable in complex, change-prone environments. The brain metaphor accepts that mistakes are normal and learning is continuous (which sounds a lot like kaizen).
Organisations should seek to self-organise and develop redundancy, key concept in operations management. Redundancy is achieved by adding parts or functions, i.e. multitasking and multi-skilling. Multitasking gives mechanistic advantages; multi-skilling gives flexibility. Both have implications for SC risk reduction, and both are exemplified in my research. Redundancy, in both the operations management sense, and Morgan’s multiple-capability-component-parts sense, was evidenced in several of the SME cases. For example, D2C had continuous access to a network of variously capable suppliers who could process unconventional or small-volume orders that their larger supplier could not.
In the culture organisation, firms from disparate cultures are incorporated, questions of whose values prevail and which processes are optimum in which environments are likely to arise: Hofstede’s research showed differences between national cultures and concepts of work and organisation. Firms and their cultures are socially constructed. The MNEs examined here circumvented these issues (or at least attempted to do so) by in-country mediation and the imposition of global standards on their suppliers. In both SME and MNE cases, cultural issues – if they occur, apparently they are infrequent – were resolved between culturally similar persons. The Chinese preference for ethnic commonality between managers is supported by Jiang et al (2011) and, indirectly, by Schein (1992), who argued that structural stability is stronger in groups that share basic assumptions.
Schein (1982) also claimed that groups evolve, i.e. grouping is neither instant nor automatic. This research finds that interfirm collaboration (between SMEs and their Chinese suppliers especially) and interfirm and interpersonal/guanxi formation also evolve (Buttery and Wong, 1999). For both MNEs and SMES, SC risk is lowest when the interfirm relationship is strongest, hence such security is acquired over time and through extensive interpersonal interaction (particularly in the case of SMEs).
Future research might also investigate the possibility (mentioned by Prof. Martin Christopher) that stability is not necessarily positive because stability can reduce agility and flexibility. That is, the SCM concept of “agile” is possibly compromised by the steady security that accompanies stability, despite that stability reducing certain other forms of SC risk.
As instruments of domination, MNEs exert control over their partners but also yield to control from a larger entity (the Chinese government in the case of China operations and China market ambitions). MNE rule over their supply base is through centrally radiating global administration and explicitly codified rules. Unlike SMEs, MNEs project impersonal principles, and their pursuit of operational efficiency underpins the logic and rationale of the interaction between MNE buyer and Chinese supplier. The MNEs examined also pursue Chinese market share by self-embedding in the projects of the Chinese government. The logic of the MNE (and the Western values that they appear to assert) is however efficiency, i.e. the operative domination is domination by reason and profit rationality. SME and MNE respondents reported that Chinese managers are tending nowadays toward Western contracts and Western management methods. (“transvergence” in the terms of Mackinnon, 2008) and “network capitalism” (Lovett et al, 1999). This observation could explain the lack of cultural issues reported by the respondents who participated in my research.