In recent years, two management trends that seem significant in response to international competition are the adoption of Japanese management practice and the renewed efforts to achieve excellence in product and service quality.
Theory Z management. Given the recent success of Japanese companies, management writers have been carefully analyzing Japanese organizations. The most notable publication in this area is Ouchi’s Theory Z. Ouchi showed that American and Japanese firms are essentially different along seven important dimensions:
- length of employment
- mode of decision making,
- locations of responsibility,
- speed of evaluation and promotion,
- mechanism of control,
- specialization of career path
- and nature of concern of the employee.
Ouchi’s theory Z proposes a hybrid form of management that incorporates techniques from both Japanese and North American management practices. In a very short time, his ideas have been well received by practicing managers.
Achieving excellence. In their best seller on America’s best-run companies, In Search of Excellence, Peter and Waterman found eight basic principles that reflected these companies, management value and corporate culture. The eight principles of excellent companies are:
- Bias toward action. Successful companies value action, doing, and implementation.
- Closeness to the customer. Successful companies are customer driven; a dominant value is customer need satisfaction.
- Autonomy and entrepreneurship. Organization structure in excellent corporations is designed to encourage innovation and change.
- Productivity through people. People are encouraged to participate in production, marketing, and new-product decisions.
- Hands on, value driven. Excellent companies are clear about their value system.
- Sticking to the knitting. Successful firms are highly focused. They do what they know best.
- Simple form, lean staff. The structural form and systems of excellent companies are elegantly simple, and few personnel are employed in staff positions.
- Simultaneous loose-tight properties. Excellent companies use tight controls in some areas and loose controls in others. A tight, centralized control is used for the firm’s core values. In other areas employees are free to experiment, to innovate, and to take risk in ways they will help the organization achieve its goals.
Application of these “principles” in the best-managed companies tends to produce an environment that fosters entrepreneurial pursuit of new opportunities and adaptation to change.