Four Major Principles that Define the Collaborative Organization in 2013

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Table of Contents

Abstract
The Four Major Principles
Demand-Pull
Demographic Kick
Organizational Transformation
Conclusion
Reference List

Abstract

The world of business is ever evolving as new factors come into play with time. Traditionally, most businesses would focus on making profits and everything else regarding the business’ operations would take second priority, but today, numerous multibillion-dollar corporations have worldwide reach.

The emergence of various factors has lead to the evolution of business management and development practices. Jacob Morgan, in his book, The Collaborative Organization, discusses the importance of collaboration in corporations and mentions some factors that affect businesses with regard to emergent collaborative tools.

However, particular to the discussion in this paper is his mention of four principles that define collaborative organizations in the present era. The principles include a technological push, the demand-pull principle, the aspect of a demographic kick, and organizational transformation mechanisms. This paper provides an in-depth analysis of each of these principles by applying views from other authors to provide balance to the discussion.

The Four Major Principles

The Technology Push

One of the main topics in Morgan’s book, The Collaborative Organization, is the issue of technology and its effects on the operational activities of businesses today. He highlights dissemination of information as one of the core applications of the internet by stating that employees use the Internet as a means of sharing information amongst them and with the management, thus ensuring that the organization works as a team even though each individual has his or her own specific role to play (Morgan, 2012).

Technology has evolved at a faster rate than was the case fifty years ago. The development of the Internet, mobile phones, and other communication tools has changed normal business operations and strategic planning. The two tools have made communication faster and access to information easier.

Guy Klemens (2010), author of the book, The Cellphone, gives a perspective of how much the cell phone has changed communication and its importance by giving an example of how the device has transformed business even in third world countries, with people viewing it more as a necessity than a luxury item.

Morgan (2012) expresses the same view regarding the use of the Internet as a collaborative tool in business organizations. He explains that the Internet is one of the most important technological tools that companies apply, for both communication purposes and strategic management.

Daniel Goleman (1998), the creator of the mixed model of establishing emotional intelligence, which is one of many theories on effective management, states that teamwork is essential in any organization for the development of social skill, and thus an important ingredient for a successful company.

He adds that good managers should formulate policies that foster teamwork through the enhancement of communication and creation of relationships in the work place. Goleman’s theory suggests that employees with good relationships and strong ties are more likely to improve the productivity of a company.

He adds that a company has better chances of synchronizing the operations of its employees in a manner that creates alignment with the company’s goals when the employees have good working relationships (Goleman, 1998, P.56). T. J. Allen, author of Managing the Flow of Technology (1977), presents ideas that support this theory by stating that employees that work more than thirty meters apart from each other reduce collaboration, hence negatively affecting communication.

The author explains that employees who work closely together communicate more thus sharing ideas that positively affect the productivity of the company. For instance, it is easier for one employee to ask for help from another if they have a good relationship as opposed to employees who rarely talk to each other.

Mark Granovetter, the author of The Strength of Weak Ties (1973), presents a contrasting idea from that shared by Goleman and Allen. Granovetter presents the ‘weak ties’ or ‘bridges’ theory, which suggests that employees with weaker ties are more productive than those with stronger bonds.

He likens ties between individuals to bridges by stating that they are weak structures that provide useful links between two points. According to him, two employees with a strong bond between them are likely to think and act the same way in various situations and depend on each other for solutions to problems. However, due to their constant interaction, such employees are likely to experience the same difficulties in similar situations and are of little or no use to each other in terms of solution generation.

In contrast, employees with weaker ties have different approaches to problems thus bringing an aspect of objectivity to solution generation (Morgan, 2012). Morgan supports this theory by adding that weak ties are easier to develop and take less time thus presenting an individual with the option to create as many as possible, within and outside the organization.

He explains that such ties are easier to make through technological tools such as social media avenues like Facebook and Twitter over the Internet. Weak ties, according to Morgan, foster innovation, help in developing existent ideas, and prevent monotony through interaction with several different individuals at a time (p.14).

Jacob Morgan (2012) considers it noteworthy that although it would be wise for companies to use the Internet and other forms of technological tools for collaborative purposes, companies should weigh the negative risks that the tools present against their benefits. One of the risks that Morgan highlights in the application of the Internet tools is the possibility of distribution of confidential information to parties not authorized to access it.

It is easy for employees to leak out trade secrets and other confidential company information whether intentionally or not. This aspect creates the necessity for companies to control the use of the Internet tools, as is the case in China. The government banned the use of Facebook in China as a way of ensuring productivity at the workplace.

Secondly, companies that apply the use of the Internet tools have to ensure that they develop structures for the improvement of alignment in various departments. As companies expand, especially for those that merge with others and multinational corporations with subsidiaries all over the world, it becomes increasingly difficult to maintain efficient communication structures.

The use of the Internet tools brings with it the problem of controlling and filtering information appropriately within various departments. Lack of proper structuring is likely to lead to a chaotic situation and loss of valuable income. It is thus the prerogative of every company to ensure that the collaborating tools they use present as many advantages as possible at minimal risk.

Demand-Pull

The second principle that applies in the definition of collaborative organizations is demand-pull. The concept of demand-pull explains how inflation starts. The basic mechanism in this theory is that when demand for goods and services is higher than the supply, companies employ more people in order to increase production. However, increasing the labor force causes an increase to the price of production for goods and services, which companies transfer to consumers by increasing the price of goods.

The ultimate result of the process is inflation, an aspect that affects company policies through the formulation of mitigating mechanisms. In order to ensure that company productivity remains high when facing the demand-pull problem, most companies result in specialization, producing the goods they are best at and leaving the rest to other corporations. At an organizational level, the application of specialization takes the form of employment of employees with different skills to work in the same organization.

The use of experts and specialists ensures that the company gets quality results from each department without having to apply additional funds for training programs. Although the use of specialization as a strategy is cost effective, Morgan (2012) notes that the involvement of people with different skills working towards the same goal requires a high level of collaboration.

Steven Covey (1994), in a discussion of his time management matrix for effective management, notes that in order to improve and maintain high productivity, good managers should foster the creation of relationships amongst employees.

The essence of this is the improvement of communication and aversion of crises due to differences in objectivity and goal orientation. Covey suggests the use of team-building activities and discussion forums in improving teamwork and encouraging the dissemination of information in the work place (Covey et al., 1994).

However, Covey’s theory is restricted to the work environment while Morgan (2012) takes a more holistic view in his discussion. Morgan explains that by applying the use of the Internet tools, employees are able to connect and align their goals to the company goals without having to bother with the creation of strong ties, which take unnecessary time to develop.

An additional advantage with the application of the Internet tools is that it allows employees in a corporation to link with others in other corporations, fostering innovation and enabling the generation of solutions that would otherwise be unavailable to employees who depend on colleagues for problem solving (Morgan, 2012, p.49).

Additionally, companies have the opportunity to outsource goods and services from professionals all over the world at cheaper rates, lowering the cost of production and creating the residual effect of generating competitive prices. This makes a company’s goods and services attractive to consumers and increases the company’s profit levels.

The third advantage Morgan notes with the Internet, as a collaborating tool is that it eases the possibility of a company to expand its market potential. Through links with people from other regions, marketing of goods and services is easier and has a far-reaching effect in economies that are more receptive to products that a company has to offer. The Internet tools provide a cheap market research option for companies looking to expand into other countries.

For instance, a company located in a country undergoing inflation would benefit immensely from exploration of markets in other regions through social sites, as a response for the proposed goods or services is instant. Therefore, depending on the budget at the time, the company may decide to open a subsidiary in the target market or opt to sell goods and services online as a way of testing the market and establishing the success rate.

Demographic Kick

On 20 October 2011, the global population hit the seven billion mark and according to an online article by Rajesh Kumar of USA Today (2011), surveys by the United Nations showed that the population is likely to rise to eight billion by 2025. Jacob Morgan (2012) states that such rapid changes in the population are bound to affect corporate structures both positively and negatively. For instance, high increase in population usually leads to less availability of resources per individual.

As a coping mechanism, most regions experience changes in cultural practices sometimes having residual effects on economic structuring in a country. For instance, in the 1960s, Abu Dhabi was a state with a low population and less than average economy. Although the state had oil, its benefits were dismal to the population. Most of the families near the Persian Gulf practiced fishing and subsistence farming, occasionally getting a little income from ocean pearls.

However, with the manufacture of synthetic pearls and border disputes with Saudi Arabian neighbors, the economy continued to deteriorate until the reign of Sheikh Zayed bin Sultan Al Nahyan. Sheikh Zayed implemented policies that allowed expatriates to work in the state and generate revenue for the government to take care of its people. Today, more than 80% of the population in Abu Dhabi comprises expatriates, with the citizen population totaling a mere 10%.

The increase in population created a positive change in the economy by attracting investments from multinational corporations. These corporations have to ensure that their policies allow them to remain competitive and provide goods and services that suit the region without compromising on productivity (Federal Research Division, 2004).

Another way that demographic changes affect corporate structuring is through changes in consumption trends. Companies have to ensure that their policies adapt to constant changes in consumption trends for goods and services. A good example of how population changes affect consumption trends is the fast food industry.

A decade ago, most fast food companies produced products that were mainly luxury items as people preferred to make their own food. However, as the population rose, so did the demand to make more money for sustainability.

This aspect is one of the factors that have seen drastic growth in the fast food industry. High population provides for a large labor force and a decline in wages. As prices of goods remain the same or higher, most people have to work for longer hours therefore reducing the time they have available for tasks such as preparing meals. The fast food industry has capitalized on this fact by making fast food products available at affordable prices.

Most people now find fast foods as an easier cheaper option in comparison to healthy foods that require prior preparation. Thanks to dissemination of information and collaboration structures, fast food companies now have subsidiaries all over the world. MacDonald generated great controversy when it first opened a branch in China, with residents complaining that it was unnecessary because Chinese culture encourages home-cooked meals.

Today, the company enjoys high sales as the fast food consumption trend has caught on in the country, with the massive population providing a steady market. Demographic changes thus have the ability to dictate corporate policies and corporations gain advantage by researching trends through collaboration tools as Morgan (2012) suggests.

Organizational Transformation

Organizational transformation is the fourth major principle that Morgan (2012) mentions in his definition of collaborative organizations. He explains that globalization and industrialization have led to extensive growth for the majority of the companies thus necessitating the restructuring of policies to match the changes (p.136).

He notes that in earlier years, most companies preferred the application of a vertical hierarchy of power and command. In his opinion, that such structuring in companies ensured that there was a definite chain of command, making it easier to establish accountability for various actions and decisions within the company.

However, this form of structuring has had its share of shortcomings. One such demerit is that the hierarchy limits the distribution of information. An employee has to go through an intermediary to relay information to top management, leaving room for delays and distortion of information. The resultant effect is the creation of unnecessary confusion and escalation of problems to crisis level.

The hierarchy also makes it difficult for employees to access information from top management regarding their duties in cases where they need tools for the enhancement of their performance and overall company productivity. Another disadvantage the structure presents is the creation of a barrier between the management and employees.

Such barriers make employees feel unappreciated and underpowered, reducing their moral and subsequently their productivity and the profitability of the company. Thirdly, innovations as all actions have to undergo an approval by management. Even though the hierarchy serves its purpose, its application to current companies would be impracticable, especially for companies with several branches or multinational corporations.

Henry Mintzberg (2008), a proponent of the emotional intelligence concept of business management, states that the manager has an obligation to make employees feel valued and appreciated by boosting their morale, an aspect that Morgan agrees with in the book.

Morgan adds that by providing employees with essential tools for the performance of their tasks and letting the employees know that the management values their opinion; managers increase the morale of their employees, thus reducing the need for constant supervision and averting the creation of a hostile work environment for everyone.

The current global economic trends require adaptability of policies to suit evolving trends and keep the company significant. Collaborative tools ensure that companies stay in touch with the latest trends and foster innovative ideas that ensure the company does not lose to newer competitors. Morgan gives an example of the need for companies to employ new talent and adapt to new ideas while improving on existent talents in the company where possible.

Conclusion

Although the Morgan (2012) talks a lot about the application of technological tools in improving company collaboration, he also makes observations on some of the mains that define corporations today. He provides an in-depth discussion of each of the principles while connecting them to his other topics. Morgan explains that companies today operate under different structures from companies in earlier years, with some of the structural changes being results of external forces.

The four principles in this paper constitute part of such external forces. Although some authors in their discussion of corporate management choose to indulge in a more localized perspective of issues by discussing internal workings of a company to the exclusion of global interactions, Morgan takes a more holistic view. This makes his discussion more objective and relevant to different other fields.

Reference List

Covey, S., Roger, A., & Merill, R. (1994). First things first. New York, NY: Free Press

Federal Research Division. (2004). United Arab Emirates: A country study. Whitefish, MT: Kessinger Publishing.

Goleman, D. (1998). Working with emotional intelligence. San Francisco, CA: Jossey Bass Press.

Klemens, G. (2010). The Cellphone: The history and technology of the gadget that changed the world. Jefferson, NC: McFarland.

Mintzberg, H. (2008). Mintzberg on management. New York, NY: Simon and Schuster

Morgan, J. (2012). The collaborative organization: A strategic guide to solving your internal business challenges using emerging social and collaborative tools. New York, NY: McGraw Hill.

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