Growth and Evolution of Organizations

It is very interesting to study how Organizations and Businesses grow, evolve, change, mature and also decline over a period of time.

Organizations are very similar to living entities that respond, react and evolve in relation to the external and internal environment that surrounds them. The survival and growth is entirely dependent upon the continuous exchange of the external and internal environment that keeps happening all the time.

History tells us of how trade became the key driving factor that pushed the throne of England to colonize the world. Post World War II, we see the industrial revolution changing the face of people’s life.

From agriculture and trade, the advanced economies moved on to focusing on mass production and distribution. The world has seen tremendous progress being made in manufacturing processes. Then came, the quality revolution that brought about the concept of process control, statistical controls and product quality.

If you study the evolution of Organizations and Businesses, you will see that the Organizations were based on conservative and hierarchical principles with the clear distinction and demarcation of white collar and blue collar workers etc.

The Organizational theories centered around span of control, hierarchical structure and departmentalization of activities. The division of labor, manual systems and paper based documentation and control being used to manage the business processes can be seen in the times following the industrialization. This kind of Organizational structure tended to be based on individual ownership and family owned enterprises. Profit maximization was and has been the main motive of the business owners.

With introduction of computer and internet technology, the manufacturing and accounting processes and procedures underwent changes. Aided by manufacturing resource planning and quality, the product quality and production processes became competitive and efficient.

At this stage the Organizations did were still not looking at employee welfare and business processes. The emphasis on quality, control of processes to maintain quality brought about a focus on Customer.

Slowly the businesses began to realize the importance of the customer being the most important factor governing their business and thus began to orient the entire production processes towards Zero Defect Product and Customer Satisfaction through superior Product Quality. All along, the businesses have been focusing on profit maximization and aligned the rest of their initiatives and business decisions around profit maximization alone.

With technological revolution and globalization we have entered into a totally different sphere. The business Organizations that were owner or family driven and controlled have had to fade out and give way to professional management that manages the business through business processes where the processes guide and assist the people in managing the businesses and they are not dependent upon specific individuals and people.

In recent times we see the evolution of Multi National Organizations who’s span of control over global markets necessitates setting up of business entities in almost all nations and managing workforces involving thousands of people of different nationalities.

What sustains these global giants and Corporate Companies like Xerox, 3M, GE, Dell, HP and IBM etc is the fact that they are established their businesses globally and have embraced business processes to manage their businesses.

These companies have invested in building technology and processes using technology and establishes standardized business processes across all countries to sustain their organizations, with the result that they are able to recruit and manage thousands of people and establish bigger enterprise with larger outputs to cater to global markets.

It is not the people and the management that sustains these Organizations, but their business processes based on technology, driven and based on the vision and values that have been envisioned by the Senior management.

We can very clearly see the de-linking of ownership and management in such Organizations. Structure of ownership too has changed from individual and family ownership to share holder and holding based investor ship. The management has been professionalized. Such structure has lead to a change of focus from profit making to building system and value based Organizations with Customer as the key focus.

By investing on business processes, the managements have been able to build sustainable organizational base and capture larger markets as well as build loyal customer base. They have embarked on a new journey and changed the way the Organizations function, their approach to the markets as well as their approach to the customer.

Those who have focused on their internal business processes have realized that they are able to deliver and exceed customer expectation and achieve larger growth in dynamic markets. Larger profits have naturally followed and accrued.