Aspects to be taken into account by SME entrepreneurs

In 2002 we discussed the importance of organizations in the development of both individuals and organizations.

In this meeting, work carried out by Eric Gaynor Butterfield between 1990 and 1995 has been summarized, including a series of Conferences and Dissertations on Organizational Development.

In two of them, both carried out in the city of Buenos Aires, the focus was on the importance of the analysis unit - Organizations, and how it impacts on individual and business development.

The summary of these talks has given rise to an article that was published by the IAEF ("Argentine Institute of Finance Executives" in its monthly magazine of Finance Executives, corresponding to year 12, No. 123 of March 1996.

It is described below, including some additional comments in light of the changes prevailing in the context and which are increasingly impacting on companies in Latin America.

Organizations, as a key element for individual and economic development The Entrepreneur / Manager asks: What part of each science can I apply to improve my Company? In his daily work, the businessman needs contributions and concrete solutions to consolidate his company and develop it efficiently for an effective positioning in the context. Several self-called "sciences" have made their contributions, all of them highlighting a particular approach that, due to their multitude and Diversity of “correct” answers makes the selection and applicability process difficult in the daily decision-making of the Entrepreneur / Company Director.

This review explores the limitations of the main approaches of these disciplines regarding their applicability since there is generally not enough empirical evidence for the business field, and suggests concentrating energies on the “state of the art” of behavioral science. Organizational Development, this being, in fact, the main unit of analysis.

It is suggested that the “missing link” between individuals and the community is Organizations and, therefore, the state of the art of this discipline can illustrate us about more effective and efficient ways for the development and growth of companies.

Therefore, our main hypothesis is that we should focus on the state of the art of Organizational Development, this being the business focal unit.

We will call it organization discipline since we know several things about their behavior, among them, mainly those things that we know “that we don't know”.

Growth and development. Organizations: the “missing link” Growth in a community or nation is as solid as the consistency of the value-added “chain” by individuals in their respective community. Different disciplines and self-named “sciences” have developed theories of growth and development at both the individual and community levels. Its distinctive features are usually focused on its different unit of analysis.

In some cases they have focused on individuals (Psychology, Psychiatry), and in other cases on the community in general (as in the case of Economics, Sociology, Political Science).

It has also been extremely unfortunate, in our opinion, to select as a missing link, the body of knowledge that has been known - presumably by both professors and the Universities themselves - as Administration Science.

Some conclusions regarding the eventual contributions made by anthropologists to the business world are shared in this work.

The field work that I have carried out for several years, including more than 100 consulting interventions, suggests that the degree of development of organizations is a relevant variable both for the development of individual growth in a community and for the growth of the community. as a whole.

Therefore, one of the hypotheses in this article suggests that the “individual intelligence” of some members is not enough to achieve the development and growth of the community, and in turn, the community limitations restrict - in what we will call a second. cycle - the development of such individual intelligences.

The missing link is what we call “collective intelligence” that is very strongly related to the growth of companies (Organizational Development).

This suggests that the wealth of the supposed “economy” of the nations with the highest degree of economic development is based mainly on the degree of strength of their organizations.

In reality, this has been the case at all times, since it is the companies that compete with each other to win the market and have an important portion of it, surviving those that can live "competitively". In order to compete, companies must have products and services that are “paid” by their Clients, and this in turn generates the need to develop a workforce that contributes to the production and subsequent “delivery” of the respective products and services.

This very, very simple fact has not always been taken into account by economists, sociologists and politicians, who in their traditional approach through deductive methodology assume “top down” hypotheses where they always play with the white pieces of chess and others sometimes can't even "move their black pieces."

The price paid for this approach is huge, and we can predict that the consequences can be deadly in the very short term.

In the review that follows, and in our quest to clarify the role of the different disciplines to the entrepreneur, a review of the main “sciences” is included and some suggestions are made regarding considerations to be taken into account by entrepreneurs. we would like in this work is to alert entrepreneurs about the limitations of applying in the business world principles, techniques, hypotheses, theories, best Practices, which are generated by disciplines that seem to be annexed to the business world, but that may have unanticipated consequences in organizations Growth and development theories (at individual and community level) Scholars,Development and growth practitioners and researchers at both the individual and economic and social levels have distinguished themselves mainly by selecting a different unit of analysis (individual, group, organization, community).

There are those who postulate the individual as the main driving axis and therefore focus their interest on people and, at the other extreme, we have those who, using a deductive approach, assume that what happens to people is a consequence of "systems" (economists, sociologists, political scientists). Let's look at some professions.

Psychology / Psychiatry

Both psychologists and psychiatrists have made very important contributions in relation to the daily actions of individuals.

However, we believe that a main limitation to be taken into account is based on the fact that a very significant part of the “empirical evidence that supports its theoretical frameworks” is based on cases of behavioral deviations.

And for us, unlike them, what interests us is the insertion of man in organizations (more punctually in his work within organizations).

In our opinion, the insertion of the individual in organizations is the relevant variable (dependent variable in terms of the researcher). On the other hand, for scholars at the individual - and non-organizational level - the relevant variable is "deviant behavior," which is not the characteristic of most organizational participants. "In this regard, the extraordinary work carried out by Dr Donald Cole (President of The Organization Development Institute, USA) that was published in his book entitled "Professional Suicide or Organizational Murder" ₍₁₎.

Dr. Donald Cole did a consulting - and research - job at a high tech company - where the organization “lost” its young and most talented staff after the initial honeymoon period within the company.

Dr. Cole suggests that most of these people have had no problems during childhood or with their parents (the Freudian approach would be of “partial and limited” use); the real and real problem is that they were all working many (and too many) hours and didn't have enough time to spend with their family and themselves!

On the other hand, and regardless of the considerations mentioned above, it is also important to bear in mind that a characteristic of scholars at this level of analysis is that of assuming that the “human brain is a black box”. As FHC Crick noted in "Reflections on the Brain:

“The difficulty in dealing with a black box is that, unless such a box is very simple in itself, a stage is soon reached when various rival theories explain everything, all equally well, with respect to the same observed results. "

In its Spanish version, this same book incorporates the applicability of the conceptual framework and its respective working hypotheses in relation to findings and evidence within organizations and companies in Latin America.

This work is carried out by Dr. Eric Gaynor - RODP, who is co-author with Dr. Donald Cole in this new edition of the original book in English, this time published in Spanish under the name "Suicidio Profesional or Asesinato Organizacional".

Economy

In relation to the important contributions made by economists, we find as a limiting factor the fact that their most significant contributions are made at the level of “explaining phenomena”.

However, we must recognize that as an economic science its ability to predict phenomena has not been strong enough in all cases.

As all science must have a predictive capacity - in addition to being explanatory - it is extremely unfortunate that economic predictions have been, and continue to be, far from reality.

In fact, as predictive science, their contributions have been less in relation to their capacity for explanatory science (the day after the lottery we all know which is the winning ticket). This limited predictive capacity is increasingly present in the most representative organs and voices of society.

Recently (La Nación newspaper of January 19, 1995) Mr. M Bein concludes when referring to the different macroeconomic forecasts for Argentina in 1996, that “… Like the memorable character of Peter Sellers - Chancey Gardiner - who seemed to advance from his vision Of the four seasons, the political times of the future, we have fulfilled this year, once again, with the routine of forecasting, without further reason, the future of the economy and the level of activity. Like Gardiner, from the garden ”.

We understand that predictive ability is of utmost importance since the (subsequent) ability to "explain" negative consequences is of anecdotal importance for those who, in their position as business leaders, are immersed in developing mechanisms for continued and sustained success in their Not to mention the dire consequences of some economic postulates such as the Keynesian Theory with its implicit suggestion, - applied with "great efficiency" by many States -, of the convenience of making wells in the street with the purpose to generate sources of work… and that this be taken into account in underdeveloped countries where not only the streets are literally destroyed but also even the pedestrian sidewalks are difficult to transit due to their irregular road…

The cost of this “bad practice” - needless to say, totally unwise for countries with a lesser degree of relative development - only begins to want to be reversed after more than 50 years later, where the unfortunate negative consequences of the mentioned practice are “explained”.

And now the question we ask ourselves is the following: Why should employers and organizations pay the consequences of:

Wrong economic "practices" based on predictions far from reality; and a poor "predictive" capacity that the entrepreneur does not anticipate the negative consequences? Another limitation of economic discipline is based on the fact that the deductive is assumed as a scientific method.

The deductive methodology, when it does not find empirical validity in the facts and does not allow to replicate the supposedly valid hypotheses, lead to the development of supposedly valid theories with lethal consequences with those engaged in business and authentic work generation.

- It should also be borne in mind that in practice many economists assume that they "play with the white pieces" and that any new resolution (for example in tax matters) must have certain unequivocal consequences. Well in practice this has not happened; in fact the rest of the individuals and especially the businessmen - even if they start playing with the black pieces and the move of advantage was held by the economists, they can very quickly transform a defensive position into an eventual attack.

Unfortunately, when all this is over, the pain and business disaster is present and it is impossible to return to the initial situation.

In reality, many of the limitations of the economy are based on the fact that its hypotheses are based on extreme situations, which are the exception. And it is very difficult to carry out the economy as a whole when we only consider the minority… Before finishing I would like to mention one of the basic assumptions on which "Economic Science" is based. It proposes that "resources are limited". Fortunately, scholars of human behavior are finding stronger evidence every day that does not support the above hypothesis.

Anthropology

Anthropologists have enriched the state of the art in the history of mankind and have also made very valuable contributions by exploring the transitions of man over time in order to discover the fundamental truth about our nature and its respective implications for both economic development and Social.

They have alerted human scholars to the cultural and social systems of life in the so-called "primitive" communities, which has allowed us to open our eyes to a different perspective. However, many of these communities under study have perhaps not gone back to Enough, just as ethnologists, paleontologists, or zoologists do.

That is why, in more than one case, many of the evidences that, supposedly, are applicable to "primitive" communities, are actually related to communities "in process of extermination".

Therefore, the exploration of the forms of life of these communities carried out by anthropologists under these circumstances, do not always reflect characteristics of primitive communities in their character of our ancestors.

To a lesser extent, they still help us to investigate the origin of man and his transformation processes until the presence of man today. As Desmond Morris points out in "The Naked Man": "The simple tribal groups that live today are not primitive, but are brutalized. The true primitive tribes have existed for thousands of years. "

Administration

This is the discipline that affects us as authors in a more personal way, since it has been the foundation of our first university studies. Anyway, at this point in my life, it is not only incorrect but also arrogant to speak of Administration Science.

For now we share with economists an orientation towards the explanation of phenomena (which some gurus have managed to expand to the area of prophecy), to the detriment of a predictive capacity that is required by businessmen every day.

Entrepreneurs at this point have been sufficiently punished for the "contributions" of professionals, teachers and consultants who only explain - at best - past events based on conjectures that do not have empirical evidence.

Administer incorporates the concept of acting on "what already exists" but is unable to develop a Vision to enhance and create the development of an organization.

That is why studies on the development of Business capacity do not find a firm answer in the Administration treaties, nor in the leading Universities in the world in the area of "Business Administration". Rather, many successful entrepreneurs have chosen to move away from university faculties where Business Administration studies are privileged.

Such is the case of Bill Gates who has abandoned his studies at Harvard Business School. Likewise, the greatest inventor of all time - Thomas Edison - also distanced himself from formal educational centers when he was considered by his teachers to be a poor student…

All this suggests that perhaps entrepreneurs - and those with the ability to create organizations (and why not also ensure continuity, efficiency and profitability) - possibly fall under the famous phrase of the ingenious Irishman Bernard Shaw: _ ”I interrupted my education when I started my formal studies ”.

A research work I led a year ago summarizes some 50 “Best Management Practices” as “unique” and more efficient ways to manage. Now if this were true

How is it possible that with an average validity of 4 years for each of them, more than 7 (supposedly "unique") Best Practices coexist simultaneously?

Even academics, professors, consultants and researchers have not found an answer to this question.

We can generously give you time to solve it, although paradoxically, the passage of time makes it increasingly difficult to find an answer as new best practices “appear”…

Organization Science (we suggest calling it discipline or art)

Saying that a company that has an entire building for its offices is an organization is the same as saying that a person who is blind is not blind because of having a pair of eyes.

Between 1990 and 1993 we have carried out a field work where we have been able to observe that the most vigorous economies are those that have vigorous Organizations (and individuals).When Rostow concludes his treatise on stages of economic development, Argentina is taking off (“Take-off”) that placed Argentina in an expectant position.

Many years later, we observed with sadness and disappointment, our distancing ourselves with not only developed economies of that time, but even with economies that were positioned in our "take-off" stage… and we began to perceive in the 50's where the " small businessman ”already had on his back the problems that governments“ said ”that they were concerned about - that we would gradually approach an underdevelopment similar to that of the most impoverished countries.

Many wonder what is the explanation for this phenomenon? What is causing this race to deterioration? For his work Rostow has taken into account numerous “economic” indicators that represent common practices for his economic projections.

However, it did not prioritize the importance of the degree of development of organizations and institutions, or to be more precise, it favored the organizational growth of the state apparatus and the entrepreneurs (please confuse them with the state contractors) in addition to all the problems that They have been used to it (lack of credit, difficulties in starting up their business, a really competitive market unlike both state and multinational oligopolistic and monopolistic companies, import restrictions, inspections of their companies bordering on extortion, among others), to all these limitations of an “external” type, the company added a lethal mechanism: its own personnel.

Already Lincoln - based on a biblical passage - had foreshadowed "… a house cannot be sustained if it is divided within."

Interviews with small entrepreneurs conducted periodically show that more and more of them want "a company without people"; How a small businessman who lost his light metallurgical factory in the city of Rosario at the hands of his workers as a result of "trials" for deafness participated with us.

What incentive do we employers have to assume with our staff our responsibilities that go beyond those we have with our family; at least my family has to keep my property when I die… instead now it is my staff who keep my factory… "

The degree of development of the Organizations of other countries located in the “take-off” stage such as Canada, Australia and New Zealand was significantly higher than that of Argentina at that time, and none of these three countries developed an anti-business policy. of organizational development of SME companies like the one that took place in Argentina.

Had Rostow prioritized the importance of the variable "level of organizational development", it is possible that he would not have positioned Argentina alongside the three aforementioned economies. With this, we intend to alert those responsible for generating "economic policies" that observe the number of personnel employed in developed countries that work in SMEs, and that, on the other hand, observe how assistance is provided to these companies that have everything at risk to comparison of mono and oligopolistic companies.

We foretold in the late 1960s that Argentina would gradually lose its hegemonic status in Latin America and that this would be accompanied by growing unemployment.

Nowadays no sensible person would suggest locating Argentina in the same degree of development as Canada, Australia or New Zealand… and please do not make us hear that sentence "that would have been better for us if instead of Italians and Spaniards the English to Argentina ”.

Until 1940 - the date when Rostow located the degree of economic development in Argentina, our country had had immigration primarily of Spanish and Italian origin and it was very, very good until 1940.

In our opinion, the variable that makes the difference - and precipitates the deterioration of Argentina - is not the immigration trend prior to 1940 (which was primarily Spanish and Italian, and this is true), but the systematic attack on the businessman (small and innovator who creates and generates work for others), which begins in the late 1940s and, paradoxically, continues despite its lethal consequences for the country as a whole.

Returning to the point of this section, our suggestion to lead by example is not to speak yet of an organizational science since there are also presumptuous academics, researchers and practitioners in this discipline.

Those of us who have been trained in Organizational Development prefer to be cautious on this topic, although we welcome how empirical evidence has been found for different conceptions of this growing discipline, since we have begun to discriminate how much we know is not true of how little We do know that it is true, a fact that represents a very important step in scientific work.

If we add to this the important contributions of the state of the art of Behavioral Sciences, we already find a discipline - Organizational Development - with a solid base.

In our opinion, the so-called Organizational Theories represent rather the prejudices of those who create and develop them (consultants and academics), and therefore they become organizational prejudices.

And there is nothing wrong with recognizing the limitations of knowledge by relying on our concepts being really nothing more than our prejudices, which is much more realistic and positive than advertising a theory as infallible.

For the time being we would begin in this way assigning the words their own meaning: we will be emitting "judgments in advance which is the real meaning of prejudices".

Scholars of Human Behavior have made significant contributions in the field of the integration of the Individual with the Organization, and in turn the latter with its context.

It is not the purpose of this article to analyze in detail the scope, meaning and implications of these discoveries, but we do want to alert entrepreneurs and businessmen of the relevant contributions made by those who have focused on Organizations (instead of of the economy or individuals).

In a conference held a month ago in the province of Mendoza (Eric Gaynor, 1995) I have developed a small compendium of the main “Best Practices” of the last 20 years and the main disciplines / organizational arts (vainly called theories) generated in the last 50 years.

For now, these practitioners and researchers have begun by discriminating those (few) "things that are known to be true" from those "variables that we do not yet know how they impact or behave".

Furthermore, by focusing on the organization as an indispensable link in the growth chain Individual - Organization - Economy, it allows completing the growth cycle for these three distinctive units of analysis.

To ignore or downplay this second link - Organizations - has represented a very expensive price that is already being paid by both Individuals and the Economy, especially in countries with a lower degree of economic development.

Note: Eric Gaynor Butterfield was invited to publish this presentation in the magazine of the Argentine Institute of Finance Executives for the month of March 1996 - Year 12 Number 123. The IAEF is a member of the "International Association of Financial Executives Institutes".

Eric Gaynor Butterfield's Note: I frequently use this article in Courses, Seminars, Workshops for companies seeking to familiarize participants with "theory and practice", and explore the limitations and opportunities of both.

Participants have stated that they have benefited in terms of theory and practice content, and especially in relation to the implementation of organizational changes and improvements.

They have also stated that they have been awakened by a "critical" capacity not only for the work of consultants but also in relation to university professors.

- Notable experts who have linked organizations to the economic context

- In order to provide the reader with different perspectives from notable experts who have studied the level of correspondence between organizations and their context (and within this, considering the variable "economy"), we must include several main authors who should not leave behind to be taken into account by all those consultants and specialists interested in the processes of change and organizational development.

Kenneth E. Boulding

Kenneth Boulding was born in England at the beginning of the 20th century (year 1910). He was a Quaker and as such devoted much of his effort to studying the relationship between organizations and moral values.

For Boulding everything that happens on the planet has more and more to do with organizations that manifest themselves as companies, unions, political parties, voluntary organizations, the national, provincial and municipal government and different Business Chambers both in the industrial sector, as in the primary.

This type of paradigmatic change has been called by Kenneth “Organizational Revolution”.

Kenneth Boulding ("The Organizational Revolution"; Harper - 1953) points out that the revolution is motivated by the fact that people have new habits and needs, but that above those habits and needs what has really impacted more on the "Organizational revolution" are the changes that have occurred in the techniques, procedures, techniques and methodologies of how it should be organized. The sustained growth of organizations has left its marks, since there are members who belong to the internal organization and other members who they are outside the organization.

And, according to Boulding, this creates an ethical dilemma that cannot be solved within the 10 Commandments or given the Sermon on the Mount. In addition, the ethical dilemma has to do with the different levels of the organizational hierarchy since the upper management may have to respond to several fronts, in addition to having to respond to society as a whole

From the moment companies are subjected to the market - which has more to do with (financial) business than with companies and the market does not necessarily respond to competitive and specialization rules, the organizational revolution conflicts with the component ethical due to super-monopolies and conglomerates under rules of economy of scale, both productive and financial.

This necessitates the existence of a market economy that is regulated and that it is through political representation, which can be achieved through social democracy.

Burnham, James

He was an interesting character since he started as a member of the Trotskyist party and ended his days struggling to support his basic hypothesis that society would move towards being managed by "managers", which he called "managerial revolution".

E. Whyte in his well-known book entitled "Organization Man" remains within the line of Burnham.

According to James Burnham (“The Managerial Revolution”; Peter Smith - 1941) even in the communist countries there was a managerial force that was the ruling class, since for example the Soviet Union did not make movements towards socialism but neither did capitalism.

People in managerial roles must have the power, privileges, and resources, and therefore would end up being the ruling class.

In order to discriminate with respect to the different profiles of individuals and organizational units, Burnham develops a typology made up of four characters:

Shareholders who have a totally passive role within the company, the financiers who have an interest only in the financial aspects of the company, and who are totally independent of what the company does, the executives who establish the organizational vision and mission, are interested in strategy and closely follow profits and return on investment as main indicators as well as the progress of income people who have to do with organizational processes and the day-to-day functioning of the organization, who deal with effectively integrating the financial, material, technological and human resources, whom James Burnham calls managers.

According to James Burnham, only those included in the fourth category are those that play a vital role in the production process, and suggests that evidence of this is found both within the Soviet Union and in the growth of large corporations in other countries.

And this is because managers have a self-confidence that exceeds that of bankers, owners, workers, farmers, and merchants. It goes as far as to suggest that in many "civilized" countries Parliament is being replaced by administrative offices.

It is not by chance that a person educated in England (Oxford) arrives at these conclusions.

Nor is it by chance that John M. Keynes (“The general theory of employment, interest and money”; London: Macmillan - 1936) has developed an economic theory where business and financial activity are privileged over the company, productive activity.

We believe that Joseph Schumpeter (“Capitalism, Socialism and Democracy”; New York: Harper - 1942), through his “innovative entrepreneur” theory, is much closer to the needs of developing countries as well as those that have a greater Degree of development.

Galbraith, John Kenneth

Despite being born in Canada, JK Galbraith spent most of his life in the United States of America.

He has spent most of his life striving to demonstrate that capitalism in the United States of America has undergone very important transformations and therefore traditional economic theory has no practical utility.

He suggests that despite the fact that in the beginning companies seem to compete hard, over time this situation is disrupted by the existence of very few organizations, presenting a situation that is known under the name of oligopoly.

Galbraith suggests that there are no significant differences between organizations in different countries, both in terms of their structure and related to planning, decision-making and control mechanisms.

When the company begins to circulate near the limits of a (financial) business, the requirements of equipment, machinery and capital will almost always privilege the large corporation, which in turn, will depend on the government (which is always attentive to its operations and profits).

Large corporations have greater and better advantages over small and medium-sized companies, given that due to their volume and economy of scale they are better able to dedicate financial resources to research and development.

These types of organizations are better able to satisfy the technological requirements by strengthening the relationship between the organization - the market - and the government.

Galbraith suggests that there are six fundamental aspects to the process by which organizations gain in size and breadth, the first of which, according to John Kenneth Galbraith, suggests that the period of time between the idea of a product and Its final manufacture is increasing (something with which we do not totally agree). Secondly, we must bear in mind that as the capital dedicated to production increases, more investment is required. Third, it must be provided Consideration to the fact that once we have committed as much time as money and energy, our chances of backing down diminish. Fourth, large corporations require a professionalized techno-structure,and fifthly, organizations gain in complexity through matrix organizational arrangements and beyond them, which in turn make it more necessary to develop mechanisms of coordination and cooperation between individuals who distance themselves more and more from each other.

Finally, and sixthly, the above requirements increasingly put more and more pressure on planning needs.

All these requirements together show that the typical “industrial system” of large corporations is the only one that can make use of the benefits of new technologies that arise in contexts under risk situations.

In reality, for Galbraith, the greater planning of large corporations is really oriented towards "replacing the role of the market" rather than reducing uncertainties and risks, and companies can have greater control over the consumer, making it dependent on the organization - such as through advertising - or by having only one customer (such as when the government becomes the Customer).

Under both situations, there is a tendency for the company to be nothing more than a small administrative apparatus of the government, as when it acts as a tax collector.

Sooner or later companies will have to grow and transform into businesses in order to survive market forces, and finally they will be dependent bodies of the government that has too much free time to choose what exact portion of the cake (taxes) it must demand.

- As additional reading material we suggest accessing:

- John K. Galbraith: “The affluent society”; Hamilton - 1958

- John K. Galbraith: "American Capitalism"; Houghton Mifflin - 1962

- John K. Galbraith: The age of uncertainty ”; André Deutsch - 1977.

Perrow, Charles

Charles Perrow is a sociologist and part from a very different point of view than most experts in organizational behavior and organizational development.

For Charles what counts are "structure, technology, context and objectives" and that is why these factors are what he has emphasized in his book: "Organizational analysis: a sociological view", Tavistock Publications, 1970.

To further strengthen his position on organizational behavior, he points out that other variables such as "leadership, interpersonal relationships, morale and productivity" have been given less importance.

It is their opinion that if the focus of our interest is placed on organizations, then the structural focus that characterizes sociology is superior to the focus that prioritizes the individual or group processes.

He suggests that efforts to change the personality and attitude of organizational participants in order for behavioral changes to occur are not something that can be achieved "reasonably" and even more so efforts to do so put an extra burden on the company since such efforts are really costly.

In the first chapter of his book (mentioned above) he points out that what some people would “see” as problems at the organizational member or organizational group level, is actually (according to Perrow) a problem of structure. This question has been asked by almost all practitioners, academics and researchers in the field of organizations that has to do with the possibility of identifying different organizational typologies since only when the manager identifies "another organizational type" is he in a position to understand his own.

And in relation to this important question Charles Perrow suggests that the fact of saying "that there is no single best way to organize" is not enough and does not lead us anywhere; Furthermore, this phrase is partially valid because there really are systematic differences between organizations and also systematic similarities between them that lead us to different degrees of efficiency for different organizational arrangements.

And this is where he suggests that instead of developing principles of administration (Henry Fayol: "General and industrial management"; Pitman - 1949) and more recent authors such as "The 7 Habits of Effective People" (Stephen Covey) "it is better to dedicate our energies to identify patterns of variation - in organizational arrangements - that will later help us to predict and explain organizational phenomena.

For Charles Perrow, bureaucracy is a very good mechanism that reduces the impact of influences "from outside the organization", and on the other hand, as a consequence of a high degree of internal specialization based on the expertise of the organizational members, it allows to control and reduce uncertainties regarding the company's processes and products / services.

What has happened in the context in the last 60 years has had a strong impact on companies and that is where the bureaucratic organization has started to have problems.

The risk factor appears as inherent to every company, and this risk factor, with its consequent uncertainties and some out-of-control variables, makes it necessary to operate in a different way from what we had in mind regarding the bureaucratic organization.

In fact, the bureaucracy privileges "routinizing everything routinizable" but not even the strongest proponent of bureaucratic organization is going to be so foolish as to accept that within the organization all units must carry out their tasks and activities routinely.

In any organization, "someone" has to be thinking about a new market, a new product, a new way of marketing the product, and how to provide a new and better service; And, of course, this requires a unit (which may be Development and Research) where both people and tasks are not routine.

Taking into account this new need to take into account the risk variable that has been accelerating over time, especially in developed countries (countries that consume rapidly the natural resources of the least developed countries and above what they can continue to generate) and their impact on organizations, they have to develop within their limits with the context different types of "buffer units" that must necessarily be flexible as work groups and, within these groups, it is necessary to have highly creative and innovative people.

So, according to Charles Perrow, not only do there need to be both routine and non-routine units, tasks, activities and processes, but it is also very possible that the differences between them have to be ever greater.

And then it goes on to expand further on this concept, distinguishing particularities that had not been previously taken into account, identifying two different types of dimensions on the basis of technologies or techniques (technology being a way of transforming material resources into products and services).

degree of routinization of the “search” or “non-analyzable search procedures”.

Of course machinery and equipment are not the technology of the company, but rather are simple tools. Here Perrow observes what happens to an organizational participant when he receives an order or a signal, which he generalizes under the name of stimulus.

When a stimulus hits a person, they start a search (which they call "search behavior") where even "not appreciating the stimulus" is also a certain type of response.

Now, the stimulus that the person receives may be "analyzable" since it has already been presented in some way in the past and is familiar to him or her, but instead, what the participant initiates is a process that Charles Perrow calls "procedures of non-analyzable search ”(which has not occurred in the past).

This variable would have to do with "the number of exceptions that the person faces".

degree of "stimulus variability". When confronting the task, people may consider it as a great variability of problems that lead us to a "behavioral search".

Sometimes the variety of stimuli is very large and each task can be viewed as of such a magnitude that it requires a significant search magnitude.

On other occasions the stimulus is not very variable or different in terms of its magnitude and the participant is confronted with a situation where the situations are familiar to him and others are new.

And Perrow cites the case of the automotive industry where every year a new car model with different parts comes out, but the variability of these new stimuli becomes familiar to different people.

From the combination of these two variables, four possible options are presented, which are named by Charles Perrow as:

non-routine artisanal engineering routines

The bureaucratic organizational model contemplates only two possible options; the ones we have mentioned under b. and c. only.

Under this conception Charles Perrow identifies two types of organizational arrangement additional to the Max Weber scheme. And to show the differences of these different organizational types within a specific area, choose the educational one.

Located in quadrant c. (routine) to custodial institutions, and within quadrant b. (non-routine) to an elite psychiatric agency. The two mixed types, where knowledge in one dimension shows ignorance in the other, are those under quadrant a. (artisanal) as is the case of socializing institutions, while in quadrant d. (Engineering) places schools with scheduled instruction.

It is interesting to note that this particular vision of Charles Perrow questions some myths of organizational life, as is the case of individual creativity as something generalized.

Perrow points out that not all people prefer to have non-routine activities that are continually modified, for which there are no clear results or feedback; not even the general management in companies prefers to operate in this type of situation.

And for this reason “the bureaucratic model can even become - for routine situations - not only the most efficient model but also the most humane.

- In addition to paying attention to the organizational structure as a result of the prevailing technology, Perrow considers that the context is also of singular importance and does not hesitate to make it known that "what appears as competence is often not" (in oligopolistic situations and in the top of their respective different companies, leaders have more in common with their competitor than those that are not). And in addition to technology, context and structure, it takes into account the organizational "objectives" variable, for which it is suggested that the reader turn to Drucker's work in relation to direction by objectives (MBO). See Peter Drucker: “The practice of management”; Harper & Row - 1954.

- Finally, it gives some consideration to the individual variable “by suggesting that the transcendence of the organizational leader is achieved when he takes into consideration aspects such as the organizational mission, its character and its degree of response from the authoritarian bureaucratic organization that appears as something inevitable within a supposedly democratic society. "

Schumacher, E. Fritz

Fritz Schumacher had a very interesting career in his life. He studied economics in England and the United States of America, and in recent years devoted himself to agriculture - becoming President of an organic agricultural organization - and journalism.

His thoughts distance themselves from that of economists and political science professionals. For Fritz Schumacher "small is beautiful" ("Small is beautiful: A study of economics as if People Mattered"; Blond and Briggs - 1973); to go after great is to approach destruction ”, which makes it clear what he thinks about large corporations and large conglomerates.

Some of Schumacher's main postulates are described below:

It is not possible to solve the problems of man on the planet through industrial and / or mass production It is important to create small decentralized units that bring people together In those situations where it can only be produced on a large scale to be competitive, in any case it is can achieve "work from the small even within the big" Organizations need to work two-dimensionally focusing on both order and the exercise of freedom Using intensive technology in third world countries makes absolutely no sense Intermediate technologies should replace "technologies gigantic ”The change with intermediate technologies can be done in a smooth and moderate way,especially in third world countries where people are not used to a "high" transformational rate of change Organizations must settle where people live Large urban centers are not the best places for people to spend an important part of their lives working Not It is reasonable for managers in organizations to have to move themselves and their families every three to five years as a result of promotion or lateral displacement. The creation of small and medium-sized entities that require very little capital investment to launch should be facilitated. in companies, it must mainly take into account those materials that are easily obtained within the context in which the organization operates. “Human-faced” technology is needed,“A non-violent technology” where there is no abuse of resources or people It is necessary to move away from the current production scheme where industrialized countries consume resources at very high rates

As a consequence of its postulates and conceptual scheme, E. Fritz Schumacher is encouraged to develop five principles for managing large corporations in order to direct them towards relatively autonomous business centers. They are:

the principle of the subsidiary function sustained in the fact that no task should be carried out in a higher hierarchy regarding where it is possible that the principle of revenge may be carried out where the subsidized unit must be protected against all kinds of reproaches the principle of Identification where the results of each of the results centers must be made visible The principle of motivation that suggests that all efforts should not be oriented towards replacing personal work by computer or automated equipment The principle of the axiom of the medium that maintains it is not beneficial to treat of achieving compliance by one of two extremes: persuasion or detailed instructions

E. Fritz Schumacher is a strong supporter of small organizations since participatory schemes can be developed in them, efforts can be related to rewards, and the owner develops his role naturally and equitably.

In medium-sized companies many of these virtues begin to dilute and their contributions are not visible.

Finally, in large corporations, the entity itself is nothing more than a fiction since it allows shareholders to live like parasites, preying on what others work.

There is no doubt that above all for Schumacher "small is really beautiful". See also: G. McRobie "Small is possible", Harper & Row - 1981.

Whyte, William H.

William H Whyte was born in the year 1917 and has been a journalist and a "curious" person about how people live in society.

There is no doubt that his lucidity in observing organizational phenomena allows him to elucidate some of the dilemmas that people experience - especially the professional, managerial and directive body - within organizations.

For Whyte, managers and executives experience the conflict resulting from the traditional Protestant ethic and a new social ethic, which can lead to neurosis.

Some characteristics that the management and management group experience are:

They begin to climb the pyramid as a result of their professional expertise, but over the years they must experience the frustrations of committee meetings. They hear that they must be sociable as they move up the organizational pyramid. But this is not always true for your family and your group of friends take work home which negatively affects your relationship with your family,While during the day he spends a lot of time efficiently doing many things that are not necessary, they realize over time that it is difficult to have a balanced life as one progresses in the organizational pyramid, they want to control their own destinies (they are characterized by having "independence" plans… which are not even put in place when they retire or are retired) are actually controlled by the organization… but they must appear to act freely, spending more and more hours at work and at work,since it is from there that they derive their greatest and best satisfactions through the prevailing social ethic - which contrasts with the Protestant ethic - the management team believes that it is pursuing its interests when in fact the only interests to be satisfied are those of the organization, the organization predominates on people always seeking consensus very close to mediocrity, they are recruited based on their creativity and initiative but then they are parameterized in their behaviors, transforming them into "repetitive" and, if they are not lucky, they have to be fired - paradoxically - for their lack of initiative and innovation that they obviously lost as a result of their daily coexistence within the companythey have to be fired - paradoxically - for their lack of initiative and innovation that they obviously lost as a result of their daily coexistence within the companythey have to be fired - paradoxically - for their lack of initiative and innovation that they obviously lost as a result of their daily coexistence within the company

These characteristics emerge largely due to social ethics that is opposed to Protestant ethics, being this ethic the one that provides an explanation and also justification for the pressures that society exerts on individuals. For William H. Whyte "The Organization Man"; Simon & Schuster - 1956) social ethics is made up of three basic propositions that complement and strengthen each other: scientism, belonging, and "acting together".

Social ethics means that students in the process of graduating from universities gradually move away from Protestant ethics and by the time the time comes to join a company, the influence of the company deals the final blow to Protestant ethics. You are looking for a person who is "fully rounded" under social ethics.

Personnel managers in companies and universities with business administration programs no longer require professionals to kill themselves working. Now they can play golf and you don't have to work as hard; even more so if they work long hours they are likely to be branded as inefficient.

The Protestant ethic is dead and a new ethic that Whyte calls social emerges.

Management has to start learning to live with these conflicts because if they do not, their career may be interrupted and negatively affected (for further details it is suggested that the reader turn to the book by Dr. Donald Cole and Eric Gaynor entitled " Professional Suicide or Organizational Murder ". Organizational Development and" The 7 Intelligences "

One of the questions that we are most frequently accompanied in the Workshops where we try to promote the growth of the community through entrepreneurial or organizational development, is the following: What do you need to promote the creation and maintenance of companies?

Private companies in particular, and within these SMEs, are those that are forced to compete.

Public companies, both national, provincial and municipal, NGOs are with funds at their disposal and their management has to do with "operating within the budget."

On the other hand, the subsidiaries of multinationals are overwhelmingly oligopolistic companies, and as a national businessman told us: “How easy it is to have a company (like multinationals) where the product or service can usually be sold only by two other companies or three companies.

On the other hand, SMEs have enormous competition and there are also "others" who are always attentive to introduce themselves as new players and competitors ".

And the question related to the survival of these SME companies is usually associated with what it is necessary for the entrepreneur to “possess within himself” in order to create, transit, compete, grow, consolidate and even perhaps also sell his own organizational creation.

For about 30 years we have made reference to "The 7 Intelligences" that usually develop within 3 main levels.

The first of these is a survival kit and it is related to Cognitive Intelligence, Emotional Intelligence, and Creative Intelligence. It is a necessary step for organizational creation and development, but it is not enough.

In the best of cases, effective people in these 3 intelligences must be very good "in exploiting themselves", as a prestigious professional showed us.

The second important step is made up of 3 other intelligences: the Practical Intelligence that is linked to the instrumentality of the products and services, the Commercial Intelligence (of entering, staying and leaving the commercialization of the products and services) and the Financial Intelligence that It is related to the distribution of resources within the organization (personnel, materials and equipment, among others) and outside (suppliers, shareholders, source of financing, among others).

But what ultimately makes the difference and provides continued and sustained growth is the bottom rung that is made up of a single Intelligence: Organizational Intelligence.

Mc Donald surely does NOT make the best burger in the world, but his income is remarkable; Babbage was the creator of the current computer but Thomas Watson has received many more benefits than Babbage within the same product line; and Henry Ford has had to give up first place to General Motors Corporation for Alfred Sloan's Organizational Intelligence.

Taking into account that the development of "The 7 Intelligences" has to be dealt with during the first hours of the morning session, and if it seems good to you, we would like to learn about the questions that the participants wish to ask and afterwards, give by the end of today's session taking into account that we are already on the hour.