Mechanistic and organic systems of management

Question one: What the questions seeks to know

Enhancing business process is vital for any business to remain competitive in today’s business world which is highly competitive. In the words of Johansson et.al (1993) in the recent past companies have had to improve and advance their business processes since the customers keep on demanding for better products as well as services. And when a customer does not get the products or services he/she wants from one supplier he/she has other suppliers to choose from. (Thus the competitive aspect) A lot of companies started business process improvement.

Due to this, companies have reinvented ways for quicker business processes enhancement. As Lon (1994) explains companies require breakthrough performance transformations, not merely incremental transformations, and these companies require it today. Since the pace of change has increased for each one, hardly any business can afford to undertake a sluggish change process. Business Process Reengineering is one of the approaches used for rapid change as well as incredible improvement.  This question thus wants the student to explain the measures and process a business undertakes in Business Process Reengineering. In general the question aims at:

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1. Finding out if the student’s understands business process
2. How a student understands and distinguishes continuous process advancement and business process re-engineering

Question two: comparing and contrasting the mechanistic with the systems viewpoint of an organisation. 

Burns & Stalker (1994) explains that bureaucracy theory of organisation management formulated by Max Weber asserts that bureaucracy design represented the perfect approach in which organisations ought to follow. According to Weber rules together with regulations are essential in making the organisation work and also in defending its members from favours. (Burns & Stalker, 1994)  From his examination, Weber established three main forms of legitimate power, which he named as traditional, rational-legal and charismatic.  The power one has enables that person to compel another one to behave in a specific manner, either through force or incentives.

Systems model was formulated by Von Bertalanffy (1969) he proposed a systems science based in computer technology, automation, cybernetics, and systems engineering. To him this approach seemed to the system notion into another idea, finally forming a technique to model man and the society gradually into a super machine. (1969, p, viii)

The systems model centres on understanding an organisation as being an open system which changes inputs into outputs. The model views an organisation as a complete system which interacts with the environment hence requires attaining equilibrium. Nevertheless, from the systems concept, line and the positions of staff do not dwell in the departments but they dwell in relationships between them. However, the model as been seen being very abstract and complicated.

Mechanistic structure

Mechanistic organisations normally follow the bureaucratic approach of Max Weber. The organisation entails a more centralised power, has got many rules, regulations and procedures, a specific separation of labour, restricted ps of control and lastly an official and impersonal approaches of coordination. In such organisations, decision making process follows a particular chain of command that is rigid.

Williams, 2005 clarifies that such organisations are appropriate in situations where the working environment is generally stable.  The application of bureaucratic model in an organisation permits the organisations to develop into big complex organized organisations which are cantered towards formalised clear objectives and goals. However, the limitation of this model is that it can lead to organisations becoming regulation dominated instead of being goal dominated.

Systematic systems

In an organisation which adheres to systematic approach, the organisation is usually flexible and loosens. Such an organisation shows general features of a decentralised power, it has less rules and regulations, less specific separation of labour, broader ps of management, and unofficial and personal approaches of coordination. Systematic organisation style is suitable and thrives in environments that are ever changing. The model has made it possible for organisations to understand patterns and happenings in a workplace- i.e., through enabling organisations to identify the different parts of an organisation, and, particularly, how the parts are interrelated. (Burns & Stalker, 1994)

Table to compare and contrast mechanistic and systematic approaches

Koontz and Weihrich (1990) sums up by stating that, as one can see, essential mechanistic and systematic concepts are different in the styles regarding organisation design approaches. In practice, nearly every organisation is most likely to exhibit varied combinations. Therefore, no particular organisation or even its sub-unit is expected to be entirely mechanistic or entirely systematic style, it will as well show the general principles of both.

The decisive contribution of sub-systems to an organisation’s overall performance

There are several subsystems of an organisation which are important in ensuring that the organisation carries out its processes well. Among these systems are financial systems, information systems, production and planning systems, marketing systems and human resources systems. All these subsystems are crucial in operation of an organisation. There is doubt that a proper organisation performance requires excellent understanding of how these subsystems function together.

Financial information subsystem

Financial information system in an organisation is used to accumulate and assess the financial information, the aim being to make well informed financial management decisions to run the organisation. Grant (2005) explains that, the main goal of a financial information system is meeting the organisation’s financial commitments as they arise, though the use of least sum of financial resources which are consistent with a stipulated border of safety.

The financial information system generates such information such as accounting reports, cash flow estimates, working capital statements, budgets, and different what-if analysis statements. The assessment of financial information maybe carried out trough the use of ratio evaluations or trend evaluation. The results from these reports highlights the financial position of the organisation and assists the management to establish how soundness of the organisation in relation to financial performance and make necessary adjustments and changes where weakness have been detected. (Grant, 2005)

Marketing information systems 

Marketing information systems involves regular, planned, collecting sorting, keeping and retrieving system to provide market information which is pertinent to the operation of the organisation. Today, companies are opting for personal marketing orientation. With the current technology available, new market tools have increased and brought consumers close to the company. The company no longer have to limit its marketing strategies on broad market segments, but, it can concentrate on personalized marketing that are more effective and responsive to the customers (McGahan, 2004)

It is clear that there is no specific marketing information system, thus an organisation has to formulate its own personalized system which is specific to the company’s market, the marketing staff of the organisation and the needs of the company. Marketing information system in an organisation enables it to know the changing demands and trends of its consumers and be able to respond to changes and any other opportunities or even threats fast and gain the competitive advantage. This is vital in improving the performance of the company.

Information technology systems

Information technology system serves as a vital strategic tool for any organisation. When IT system is well used in companies it brings considerable opportunities to the company. IT system is vital for many companies, today technological advancement has assisted many companies and organisations to revolutionize the manner in which they operate and manage their operations. Though, for a company to realize maximum benefits of technology it must invest in the technology and manpower. (Grant, 2005)

IT system helps the company improves its process through enabling it to enjoy the following benefits: cost saving, market share, productivity and profitability of the company. These benefits enables the company to make a lot of saving and the money goes along way in improving other aspect of the company McGahan (2004) In addition it also improves the following aspects; improved customer care, advanced knowledge on customer needs, enhanced coordination with the company partners, improved product quality. In addition, IT system impacts the company by having an effect on the way the company operates, by changing the products of the company and also changing the approach of the competition itself.

Conclusion

Business process reengineering is a major approach which organisations use to improve their processes and become more effective and modernised. BPR is able to change an organisation in a manner which directly improves its performance.  The main aspects in an organisation are human resource and processes, if human resource is motivated and performing its duties well, but the processes are not streamlined, the performance of the organisation will still be poor. Thus, BPR is essential in improving the processes of an organisation to achieve the desired goals.

Mechanistic and systematic are two different management models used by organisations. However, it is clear from the discussion that not both models are applied at different times in an organisation. It is also apparent that different subsystems are used to achieve and enhance the organisation performance, among these subsystems are financial information systems, marketing information systems, and information technology system. As organisation continue to face the challenge of improving their performances, it is clear that they will have to formulate clear BPR strategies to achieve their objectives.

Reference:

Bertalanffy L. von (1969): General Systems Theory. NY: George Brasiller

Burns, T. & Stalker, G (1994): Mechanistic and organic systems of management: London, Sage

Grant, R. (2005): Contemporary Strategy Analysis; Blackwell Publishing Ltd; Oxford (U.K

Johansson, H. et.al (1993): Business Process Reengineering: - Break Point Strategies for Market Dominance; John Wiley & Sons

Koontz, H and Weihrich, H (1990): Essentials of Management, Fifth Edition, McGraw-Hill

Lon, R (1994): Process Reengineering: - The Key To Achieving Breakthrough Success; Quality Press, Milwaukee.

McGahan, A. (2004): How Industries Evolve - Principles for Achieving and Sustaining Superior Performance: Harvard Business School Press, Boston,

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