Page 14 - PRAGMATIC STRATEGY

STRATEGIC MANAGEMENT AND THE ORGANISATION

Mechanisation, specialisation, standardisation; divorce of ownership and control;
limited liability and other contributory factors historically led to a change in the unit
size and structure of firms. In turn this led to changes in the demands on
management techniques and consequently increased internal pressures. In a
small organisation the entrepreneur can usually sort these problems out as he
will generally know his staff. The multinational enterprise (MNE) whose
development has been rapid since the Second World War and which
consequently has undergone structural changes in terms of diversification and
re-structuring along multi-divisional basis cannot possibly operate in this way.

The complexity of the management task has thus forced policy makers to
re-assess their role and control skills, particularly in terms of developing an all-
encompassing corporate strategy capable of adequately controlling their
increasingly diverse and often disparate businesses.

Firms today generally do not depend on any single individual rather, the
organisation self-perpetuates. Galbraith's idea of a developing "technostructure"
which posed the question, ‘which will last the longer De Gaulle's France or
General Motors?’ may be re-written in terms of Obama’s USA or Microsoft given
the growth in scale of modern organisations.

No firm acts in total isolation within a static framework. They influence and are
influenced by the environments in which they operate. Consequently, it may prove
fruitful to consider organisations and their planning from a basic systems
approach.

Question! What is a firm?

Answer: a firm is an organisation of resources in the form of manpower,
technology, finance and goals and values. The firm takes in inputs from the
external environment, transforms them internally and then sends them out as
goods and services for consumption in the external environment.