EVOLUTION OF THE COMPANY ORGANIZATION
The basic organizational principles of the Export oriented company, in large part, correspond to the optimal ones for any company that intends to face the complexities of the markets that characterize our years.
In reality, the only thing that changes is the incisiveness of inefficiencies due to not adopting these principles. Up to now, in fact, especially in the micro, small and sometimes even small-medium companies accustomed to operating at local level and with a very reduced organizational structure (ie with two maximum three hierarchical levels of staff) the figure of the entrepreneur it is associated with that of the condottiere who, thanks to the experience and the “nose” forged over the years, guides all the main choices. It is important to remember, however, that this “nose/feeling” has developed and is nourished by the possibility of living within the market on a daily basis, with the fundamental possibility of seeing and experiencing all of its metamorphoses directly.
It follows, even intuitively, that if the company decides to internationalize this is no longer possible with the same frequency and it is essential to build teams of people who know how to manage choices and responsibilities.
For the entrepreneur, in addition to the not negligible problem of their selection, the problem of their management arises and hence the need to acculturate about organizational logics that until recently had considered less influential because the related problems were solved directly by his actions.
When referring to operate with foreign countries, reference is made to various possibilities, including:
- Selling abroad
- Buying abroad
- Look for resources abroad
- Transforming materials abroad
- Use foreign distribution systems
– THE CLIENT: THE GUIDE FOR THE ORGANIZATION
– WHICH ORGANIZATION FOR WHICH COMPANY
– ORGANIZATIONAL MANAGEMENT INSTRUMENTS
– THE ORGANIZATIONAL STRUCTURE LINKED TO THE INTERNATIONALIZATION PROCESS
– QUALITY IN THE COMPANY
THE HUMAN CAPITAL
CULTURE AND CORPORATE IMAGE
THE TIME RESOURCE
THE CUSTOMER: THE GUIDE FOR THE ORGANIZATION
In the section reserved for marketing, we will have the opportunity to study in detail the developments with which the company has tried to approach the market in the last fifty years. Here we need only to start from an affirmation that today is basically an indisputable postulate.
The company today must be completely customer-oriented!
The problem lies in the fact, however, that it is not enough that only the property or the General Management of the company are convinced of this; it is not sufficient even that the management of the small or medium-sized company is aware of it, is necessary that the 100% of the company structure must be fully convinced of it.
To make an example, think for a moment to the packaging of an electronic instrument perfectly designed and perfectly realized, but packed by the staff to the shipments in a superficial way, perhaps with newspaper. Can this superficiality ignite all the efforts of every nature made up to that moment?
Again, just think for a moment about the effect that can cause the sleepy voice of the receptionist in the one who calls you for the first time. Can this sensation affect the impression that the interlocutor perceived of your structure?
The problem, however, lies in the fact that usually these answers are attributed only to the impact of the corporate image, and unfortunately it is not so because the implications of acting in an inconsistent way along the supply chain of one’s organization also implies a lack of attention to the needs of the client, which can result in far greater losses than a simple image incongruity.
If a customer calls you or writes you a complaint, you should reward him with a concrete gift, not only to reward him where his complaint is founded, because first al all – if he complains – is unlikely he has already gone to another supplier (typically he would do it without telling you anything) and then because it gives you the chance to improve your product / service. Responding adequately to a complaint, even verbal, you will have maintained a customer – which is much more important today than finding new ones – and you have the opportunity of improving your product / service.
Therefore, attention to the customer in practice means not only the production of goods suitable to meet the needs of your customers, but to acquire and – even more importantly – to build customer loyalty.
All this is worth, if possible, even more with a view to expanding into foreign markets: the attention to the customer will help you overcome the difficulties of entering a new market, and will above all allow you to stay there for a long time.
Then we can stablish that the organization of a company that really wants to look at the customer in the best way must be complex and structured. Every function, every activity and every resource must look at the customer.
The times where production was the clue of everything are over, and production is not able any more of being the one to dictate the law within the company, or the era in which the invention of a new product had to necessarily find an answer on the market. The economy has changed and listening to the needs of the market and structuring to be able to respond is the new imperative.
To do this, within the company you need new functions that have the focus of their duties focused mainly on the outside, while the functions dedicated to the daily routine work will remain the task of serving the customer.
WHICH ORGANIZATION FOR WHICH COMPANY
The organization of the enterprise is given by the sum of two fundamental factors:
- the structure of processes and procedures
- synchronization of resources with processes and procedures.
What is a business process?
It is the set of activities and resources that leads the company to have a defined result (output).
With this little assumption, we have already defined some important points:
a) the company, after having defined strategy and tactics, must decide with which organization it wants to reach its objectives,
b) the company must know and manage the activities inside it,
c) the company must know and manage the resources it dedicates to the different activities.
d) It must monitor what is happening in order to redefine the trend.
The most wrong thing would be to think that we are talking about banality and for this we make simple es .:
- How many of our companies have structured a true customer service process?
- How many times have we found ourselves with unsold stock products?
- How many times did our production manager get angry at the sales manager because he wanted to produce one piece instead of another?
- How many times has our administrative sector run counter to our commercial sector?
Often the entrepreneurs, by their vocation, dedicate themselves (rightly) to the general part of the enterprise and the particular is delegate to others. But, who does the optimization of the particular? Who cares about finding the best and least expensive forms in the implementation of different business activities? Who cares to review all the processes of transmission of information within the company to see to reduce the time, then costs, and give a better service?
Well, a company that wants to compete with foreign markets decides to compete with more competitors. ‘And when the going gets tough, the tough start playing’?
By making this choice, every entrepreneur must necessarily review his organization in detail.
- find all the activities within the company that are not value added (which do not add value to the product-service offered to the customer) considering their elimination or transformation;
- assess whether the resources (human, material and immaterial) dedicated to the various activities are correct or not;
- start a process of continuous change and monitoring with respect to its organizational structure.
ORGANIZATIONAL MANAGEMENT INSTRUMENTS
The theory of company value is linked to the economic value that business strategies create for shareholders, ie those who injected venture capital into the company itself. It is evident that companies must be managed in such a way as to effectively serve the interests of their owners, but it is equally evident that the value of the company is not of exclusive interest to the shareholders. The staff, the customers, the suppliers, the lenders, are equally interested and the very existence of the company depends on maintaining relations with each of these different entities.
In the last few years, around the theory of business value, some management techniques and methodologies have developed, all having a common reference to business processes:
- “TQM” (Total Quality Management) based on the pursuit of process quality;
- The “BPR” (Business Process Reengineering) based on the review of the processes;
- The “ABC” / “ABM” (Activity Based Costing / Activity Based Management) based on the economic management of the processes.
According to the technique of Total Quality Management, the governance of processes is the fundamental element of the generation and management of quality in the company. The excellence of these processes and consequently their intrinsic quality is now as vital for companies as the excellence and quality of processes related to products and services intended for the market. The reengineering of business processes is becoming in recent years, for companies, what strategic planning has been for the ’70s and’ 80s.
Basically, the basic concept of BPR is based on an approach that involves going back, starting again from the beginning, rethinking the company from scratch and, subsequently, redesigning the same processes in full. This implies, first of all, the revision and the profound rethinking of the organization and of how it operates in order to understand and then get rid of all the tacit rules, assumptions, habits, conventions that unconsciously have been the basis of the company management and that, often, means they are obsolete, no longer suitable and sometimes even wrong.
Activity Based Costing is an analytical accounting technique developed in industrial companies in the last decade with the aim of giving the products, in a more adequate way than previous techniques, the so-called “indirect” costs. We will see later, in the space dedicated to management control, more in particular.
THE ORGANIZATIONAL STRUCTURE LINKED TO THE INTERNATIONALIZATION PROCESS
What are the business functions that change when a company starts operating abroad?
Virtually all of them because there is a change of the skills that people must have; these must know languages as a fundamental tool of communication, they must master new information, new needs, etc.
The functions that structurally could change are:
The marketing sector
We need skills able to analyze new markets and transfer new information within the company
The sector dedicated to customers
We need skills capable of managing new markets and new needs
The shipping office
will have to identify new methods of product distribution over the long haul to optimize results and objectives.
The purchasing sector
will find itself having to manage with intermediaries or not. Probably will know new methods of distribution and retrieval of materials.
The technical production sector
will have to dialogue with technicians who are part of different cultures.
QUALITY IN THE COMPANY
Working in quality means working well on the first place in order to not have problems later, simply because it is convenient: it reduces costs, minimizes errors and risks of losing customers. So concentrate and perhaps even spend more time in the initial stages of the process, such as the list of product / service requirements we intend to design, before designing it, producing and selling it and realizing it, only when the product is already on the market, that the product has not a useful function because it has not been foreseen earlier.
To clarify immediately the diversity with respect to the meaning commonly given to the word, inevitably trivializing the matter, we can use the example of the fast-food: the sandwich with the hamburger is certainly not worth a lunch at the restaurant, so we are inclined to say that has a lower quality. But not only it is exactly what the customer expects, for example, entering at McDonald’s: it is absolutely the same sandwich in every part of the world, so it is the result of a system, of a company organization operating in Quality.
The International Standard Organization has already dictated for several years the rules, the well-known ISO 9000, on which any organization (even non-profit), on a voluntary basis, can comply.
They establish the elements of a quality management system, which, inter-related or interacting with each other, make it possible to achieve the objectives of an organization with regards to quality.
A company that wants to compete in quality must design, manage and improve all its processes so that they are intrinsically capable of generating the quality required by customers; in this sense the management of quality in the company has as its objective the customer satisfaction (customer satisfaction).
If these processes are structured according to ISO 9000, specific “accredited” bodies can certify the conformity of the company quality system according to the standard. This certification, in addition to representing a guarantee for all company interlocutors, is a significant plus in the projection on international markets.
The ISO 9000, whose last edition dates back to 1994, has recently undergone an update, following a ten-year revision and improvement program called “Vision 2000”.
The peculiarities compared to the old norm are considerable:
- Standard all customer satisfaction (customer oriented: beyond the explicit and the implicit it is necessary to go beyond his expectations)
- An approach that is no longer formal but pragmatic (everything is based on achieving customer satisfaction and not on how to achieve it without verifying the obtainment, process approach)
- Simplification of the terminology
- Leadership: company management is increasingly involved in motivations, policies and objectives
- Obligation to measure what is planned with the policy and objectives
- Staff involvement
- Relationships of mutual benefit with suppliers (before there was Customer / Supplier / Subcontractor is now Customer / Organization / Supplier, where the organization we are including suppliers)
- Regarding the objective evidence of the old standard (Procedures-instructions-test report) today you can do without even the first two, provided that the operator is qualified and makes the recordings to be kept under control
- Obligation for continuous improvement (before it was enough to register the Non-Conformities as per the procedure and it was in place, today it is necessary not to have Non-Conformity and therefore to punish or involve the staff)
- Obligation to keep under control and according to law the resources, the infrastructures, the work environment, manage human resources
The changes that emerge from this innovation are very significant, and they are:
- The “object” of quality has enormously expanded: from product / service to the process that generates it, to the management system, to the entire company / organization and its components, to the entire network of relations with the outside world, to the country’s system.
- The recipients have changed (quality for whom?): For the production line, for the client, for all those interested in the future development of the organization.
- The temporal orientation has changed: from an orientation oriented towards the past (the inspection, the selection of what has already been produced), towards a future orientation. The quality of future objectives and their achievement: quality becomes a business strategy in being able to achieve these objectives, effectively and efficiently.
- Everything becomes dynamic: compliance is only an essential first step, but then we must know how to run at the speed of the best; even for the agreed services, it is necessary to improve the way to obtain them. Quality becomes a capacity for continuous improvement, a speed of improvement compared to that of the best ones.
- Quality becomes a diffused culture, it becomes a common yardstick when we receive it and when we produce it, as all of us are producers and customers of quality in a continuous alternation of roles.
- Quality becomes, as Jacques Delors said, the striving for improvement, becomes enthusiasm to do better … “everything”, becomes the purpose and values worthy of enthusiasm, becomes a “state of mind”.
THE HUMAN CAPITAL
In this era we also speak in Italy of ‘Budget of the intangible’. The ‘knowledge’ that accumulates in the company constitutes the true value of the company. It is no longer just the buildings, the social capital, the product that constitutes its economic value, but it is increasingly the value of ‘knowledge’ and its capacity for use.
Today, people with their cultures make important corporate values. Think of the companies that were born in the era of the ‘new economy’. Sometimes virtual companies (without even a place where everyone gathered to work) that were sold and bought at very high levels. But what was bought? Ideas, skills, projects, ability to achieve, ability to solve problems, etc. etc.
The software system of companies has acquired an increasingly high importance, obviously also for companies called ‘old economy’. Even in our factories where products that meet old needs are produced, the ‘knowing’ component has become fundamental.
It is the element that makes the difference between companies!
Finding the right employees for the entrepreneur who wants to expand his business is a difficult but fundamental and determining task. Human resources are often the highest cost, but above all they are the factor that can really make success or not.
It is almost as difficult to make these important, laboriously selected people work so that they can prove to be really such.
Giving rules in this area can be presumptuous and invests not only the personality of the entrepreneur but above all the characteristics of the business. In general it can be said that the most influential factors are the following:
- motivation / enthusiasm
- self realizzation
- respect and loyalty
Creating or supporting the right motivation in people is an art that can be learned. Very often entrepreneurs use only economic leverage to motivate their employees, but no one moves only for this. Every human being needs to see his needs for fulfillment fulfilled. Even people who apparently show they are not interested, basically love to realize themselves in life. It is obviously part of the basic needs now. We ourselves want to have the best, feel good, be happy, etc. etc. Those who work with us do not want the exact same thing, but very often we forget about it.
There are entrepreneurs who love to treat their staff with hardness and detachment. In some companies there is a glacial climate. People are constantly looking over their shoulders to avoid the knives that pass. These are certainly situations that everyone has been able to see and to touch by hand, as its said. Already when you enter a company you can ‘breathe the air’. We can understand a lot with very little. The climate, the political orientation towards staff, customer orientation, etc. The people around us transmit every policy that we, entrepreneurs, have given. It is up to us to decide and manage this part too.
It is undoubted that man is more often driven by irrational factors than rational: the realization of one’s own person often prevails. The challenge of the entrepreneur is to assimilate to the whole company organization that the goal of self-realization of the individual corresponds to that of the company. An absolutely true concept, if only because the company’s success allows jobs to be maintained over time, but often difficult to assimilate, especially for salaried workers.
The friendly environment in which it operates, respect as a shared rule, helps to bring these seemingly divergent targets together. In this sense, the depersonalization effort serves both the employees and the management, especially when the latter identifies with the property: it is necessary for everyone, indiscriminately, to work only for the good of the company, avoiding any action dictated exclusively or predominantly from the need to satisfy one’s ego.
It is only apparently a “good-natured” concept, because those who “stand against” the company sooner or later realize that they have rowed against themselves. In fact, when personal interests of any kind, not only economic, but above all of power, intervene, the Company, although having the best organizational and information means, can not profit from it, because it is distorted and used for other purposes than the essential one. and primary that, as mentioned, is the good of the Company.
CULTURE AND CORPORATE IMAGE
The ‘culture of enterprise’ means the culture that is formed within the company given the sum of the cultures deriving from the people who compose it. Each one brings his knowledge and skills. The entrepreneur gives the address and tries to manage it, but it is not said that he can do it.
Here is an example of principles on which business culture has an important influence.
The corporate image is an asset of the company built over time based on the values that it has consolidated and transmitted to the outside world.
Very often companies declare to be: correct, respectful, loyal, etc. etc.; but many times they are not at all, any of those things! Managing the company ‘organizational machinery’ in such a way as to be able to respond to the needs that all publics declare (customers, suppliers, sellers, partners, collaborators, competitors, influencers, etc.) is not at all simple. Very often, we entrepreneurs, we care about communicating to customers. We structure everything to be able to tell them what they can buy from us, but we completely forget the need that today has the company to live with the world.
Do not think that these are good principles only in the confindustrial field because “politically correct”. The company that intends to pursue this management principle will not only adhere to the principles of ethics, repeatedly consecrated by Viale dell’Astronomia, but will make a difficult long-term investment in corporate prosperity. It’s a difficult choice because it’s undoubtedly easier to make money by cheating others, whether it’s a client or a collaborator, or by defrauding taxes.
But today, in the information age, the company has multiple opportunities for internal and external contact with people, organizations, companies and organizations. We think about contacts with banks, suppliers, exhibitions and fairs, internal relations with employees and independent collaborators. The set of these opportunities forms the image of the company for third parties.
Given the high number of these contacts, and the ease with which information can circulate in the Internet age, the capacity of the modern company lies no longer in giving – for example through classic advertising channels – the best image of self, but in knowing how to be, concretely, better than its own competition. We therefore moved from “know how” to “knowing how to be”. This communicates our company and we have to worry about this.
But how? Some suggestions that the GI have identified:
- Select the different targets to which the company “speaks” and define the relationship method between the company and these;
- Create a center within the organization to structure and manage communication to different audiences. This center will become one of the most important points of collection of information with respect to the market, therefore, it will be a supplier of fundamental foundations to the other organizational processes.
- Managing and managing communication with employees: nothing should be left to chance or disenchantment.
THE TIME RESOURCE
In this age determined by technological evolution, times have been reduced to the essence.
Everything is done with increasing speed and there is never enough time.
In the economic world, and business in particular, this is a very important problem. Time optimization means the possibility or not of achieving goals; the possibility or not of being able to compete in national and international markets.
It is not enough to know perfectly the procedures of the company, it is not enough to have the most prepared people, it is also necessary to have a correct management of the whole organization in order to harmonize processes and resources.
Here is how companies must equip themselves with:
- management by objectives systems,
- IT tools that support the management of activities,
- IT systems that reduce waste of time in non-value added activities,
- be able to manage the resource ‘time’ with reasonableness in order to achieve the objectives and ensure a positive atmosphere within the company at the same time.