Every entrepreneur or manager must and needs, imperatively, to know if his company or organization responds to the traditional canons or is already focused and on track within the new concepts. Paradigms that until very recently served to do business and achieve strategic advantages have ceased to be useful for decades, but today this extends to all companies and organizations, and not only to those that operate at the level of international competition and are among the largest companies in the world.
The full boom of the global economy, the need to make the best use of scarce resources, the great development of information technology, and the new instruments and methodologies promoted by the Business Schools as well as by consultants and companies in tip, they need to mark a clear line of separation between a before and an after in the management of organizations.
In order to clearly understand these differences, it is necessary to analyze their differences aspect by aspect in order to become clearly aware of how the company is being managed, which may show for some issues a traditional approach and for others a marked evolution and a trend towards high competitiveness..
- Quality. While the traditional company favors the inspection and subsequent correction of parts or manufactured final products, the new competitive company gives precedence to prevention, thus generating significant decreases in costs due to internal and external failures. The traditional company generates the products through successive stages of adjustments and rearrangements, while the new needs clearly mark the obligation to generate the products “the first time”, that is, to design and adjust the processes, train personnel and generate mechanisms to produce products without failures, not requiring product corrections. This is because managers of traditional companies see quality only as the task of detecting faults, preventing them from reaching the consumer.On the other hand, in the new management, the objective is to aim at prevention, which, as stated above, is aimed at generating products and services well at first. New organizations clearly see that an improvement in quality is a reason for lower costs. Better quality leads to higher productivity and consequently lower costs, causing greater profitability for the company. While the need to produce at a level of quality compatible with the lowest possible cost of quality was considered, currently it has been shown that reaching Zero Defect implies achieving the lowest cost of quality, since achieving that level of quality generates a strong increase in sales.While the traditional western company is focused on short-term results, competitive companies focus their efforts on continuously improving their processes. That is why it is said that the former focus on the short term while the latter focus their efforts on the long term. Regarding the training of staff and managers, the traditional company considers it as an expense while the They see a new conception as an investment, which will increase the positive flow of funds in the future. While traditional companies are organized around functions, competitive new companies do so around processes. For this reason, the former emphasize the specialization of the workers and employees,while the latter emphasize the importance of versatility. Traditional companies base their operations on the sum of individual tasks. On the contrary, the competitive ones base effort on teamwork. The level of staff participation in management makes another important difference between one type of organization and others. Some (the traditional ones) do not grant or do so in a very restricted way, while the others make it a fundamental tool for improving productivity and quality, while the old ways of managing required the worker to stick to tasks. Currently, both physical and mental tasks are required of him. The worker ends up leaving his brain at the entrance of the company every day.Traditionally, supervisors are selected based on their performance, when what corresponds, and what is currently advised, is to select them based on their leadership and motivation abilities. Thus in the first case supervisors focus on an inspection and communication of orders, while in the second case it is about inspiring, motivating, supporting, coordinating and acting as a facilitator. In traditional companies it is systematically obstructed creativity, while in ultracompetitive companies it tends to be fostered, breaking down barriers and motivating staff to contribute their ideas and innovations, for which they are not only trained, but also institutionalized through means such as the Circles of Quality Control and the suggestion system.In traditional organizations, organizational behavior is not taken into account, something that is taken into account when managing highly competitive institutions. While traditional companies or organizations manage personnel by applying Theory "X", new competitive companies they make them under the "Y" Theory. The former consider individuals as lazy, indolent, lacking in motivation, for which their behavior and industry must be closely controlled. While Theory "Y" considers individuals exactly on the opposite side, that is, they are people who seek to transcend through their work, are aware of job responsibilities and want to apply their talents and creatives to the service of the company.Typically traditional companies have managers who suffer from the so-called "trained disability", which consists of seeing the company and its environment according to its various academic or technical backgrounds. This brings a lack of fluidity in communication between the different sectors, and a lack of adaptability of the company to reality and changes, since the company generally adopts its own approach of who runs the company. So if the CEO is a Bachelor of Finance, no matter what the company's activity is, if it follows a traditional profile, the management of the company will revolve around financial thinking and analysis. for new organizations to manage human relations in the company,with all that this implies in quality of working life and increased productivity, while the traditional ones do not allow for the necessary management of such relationships. Workers tend to satisfy their bosses in traditional management models as opposed to seeking to satisfy the wishes and needs of internal and external clients. In this second version, bosses are the ones who tend to serve employees and workers so that they have all the necessary resources to fully satisfy customers. Traditional companies leave aside the management of organizational culture, while that the latter place a strong emphasis on their management and development. Traditional companies are focused on production and sales,instead the demands of the present and the future force entities to focus on the consumer through marketing. The fact that the traditional ones are focused on production does not imply that they have high levels of productivity. This leads them to want to increase their profits via a significant increase in sales, when in reality they can achieve much better results by reducing waste levels. In the maintenance of machines, equipment and facilities, traditional companies give a preponderance to a reactive attitude in the sense of correcting problems as they take place. On the side of competitive organizations, the attitude assumed is quite the opposite, prevention and prediction take precedence, partly due to quality problems,as well as the drawbacks generated by high preparation times, the high number of breakdowns, the low reliability of suppliers, the organization of internal processes, and maximizing productive capacity, leads to high levels of stocks with low levels of turnover and consequently high costs of maintaining inventories and products in process, which motivates lower levels of profitability. As a counterpart, highly competitive companies concentrate their efforts on solving the fundamental causes that originate the existence of security inventories or inventories generated by the characteristics of the process, also producing goods according to their specific demand.This is how the traditional ones are identified as producers of goods by “push” and the second ones by “drag”. Traditional companies have numerous suppliers for each type of supply, citing reasons such as: possible production stops due to breakdowns, lack of of inputs, or worker strikes by suppliers; as well as making suppliers compete with each other to improve both prices and services. In the new competitive models, demand tends to focus on unit bidders for each supply, emphasizing the reduction of total costs, resulting not only from the prices of the inputs, but also from their quality, reliability of deliveries in terms of terms and quantities,and commitment of suppliers in the design stages of new products. In addition, long-term cost reductions are usually programmed following the experience curve. Traditional companies tend to focus production processes on processes (grouping of machines dedicated to the same tasks), whereas in new production systems the processes are focused on The products. Traditional companies have high preparation times, which is why they produce in large series that motivate the accumulation of inventories. The OCs reduce to the minimum or even eliminate the preparation times with which they make production more flexible, generating products in short series leading to lower inventories. Production aimed at lowering costs through the full use of machines,teams and personnel in the case of traditional organizations, as opposed to the use of resources to the extent that specific demand generates such need. Competitive organizations concentrate their efforts on eliminating all those processes and activities that generate waste, or what It is the same not producing value added for customers. In opposition to this, organizations that do not respond to the competitive model give rise to the existence and creation of unnecessary and unproductive processes and activities. Old companies do not carry out continuous improvement work, thus showing a continuous loss of competitiveness in the face of your competitors. Organizations imbued with the new spirit of management make continuous improvement a fundamental strategic objective,which allows you to obtain important competitive advantages. Companies that respond to the old management models sell the waste in order to recover part of its value, the new organizations concentrate their attitude on analyzing the reason or cause of such waste for the purposes to avoid generating them again in the future. Regarding the attitude towards change of one type and another of companies, the former (traditional) clearly adopt a reactive attitude, while the others manage change by adopting a proactive attitude with which not only tend to foresee the changes but to self-generate them to become the center of the scene. While the traditional models of organization tend to be structured around high pyramids, with reduced control stretches,By privileging vertical organization with a high degree of centrality when making decisions, competitive companies tend to show a flat organizational pyramid, with wide sections of control, where horizontal organization with high levels of decentralization is privileged. In the models with a higher level of competitiveness, generally represented by high-tech companies, the organizational structure has the structure or conformation of a network. As for the pyramid approach of organizations, while traditional companies reflect a typical pyramid with the base at the bottom, implying the characteristic of a company in which orders are generated in the upper strata, going down to the lower levels for their implementation.In the new organizational models, the pyramid is inverted, meaning that the highest hierarchical levels of the organization must support those who daily must serve the organization's external customers and consumers with their work. This model is also usually represented by concentric circles in which the center of the circle is occupied by consumers, which implies that the organization must revolve around consumers and their services. The OTs (traditional organizations) have an information system focused on financial aspects, on the other hand, the OCs (competitive organizations) build information systems around financial and operational aspects, as well as those linked to consumers, staff and competitors (benchmark).The OTs tend to monopolize the information in the managements and headquarters in order to increase their personal power, in the OCs the information flows naturally favoring empowerment. In the OTs there is no strategic planning and administration, as opposed to COs in which they assume a fundamental role. In COs are planned and directed around values, visions and missions, something that does not happen with OTs. OTs favor mechanistic, logical-rational thinking, as opposed to OCs in which lateral, organic and systemic thinking also take place. OTs lack a system for problem solving and decision making. COs use systems and methods aimed at better problem solving and decision making. OTs are not focused on loyalty,while the new types of organization give the loyalty of employees, clients and investors a critical importance.The internal audit is fundamentally dedicated to the internal control and protection of traditional financial items in the case of OT, in the case of The OCs the vision is notoriously broadened by also covering all those aspects that have financial implications, either directly or indirectly. The OTs mainly carry out financial audits, on the other hand, the OCs carry out quality and operational audits apart from the ones previously mentioned, productivity, cultural and social. In OTs, managers carry out their work in offices, acting with their backs to the operational areas.In COs managers systematically visit the workplace trying to identify feasible improvement activities or processes; In addition to maintaining direct contact with employees and front-line workers to learn about their concerns, OTs tend to be highly standardized organizations as opposed to COs that are guided by objectives, thereby promoting greater empowerment for employees. OTs lack both statistical analysis and statistical process control (SCP), in contrast OCs base their analysis, problem solving, decision-making and process improvement on statistical data and statistical process control. OTs only have a traditional costing system, on the other hand, CBs have systems in place such as ABC (Activity Based Costing),Systems of Horizontal Accounting, Kaizen Costing, and Poor Quality (or Quality) Costing. While the OTs pursue short-term benefits as their main objective, the POs try to achieve the highest degree of satisfaction for consumers by increasing the relation: quality / price, and with it the value generated for customers and consumers. The OTs base the selection of personnel many times on cronyism or internal politics, unlike the new organizations which focus on the analysis of skills and Candidates' attitudes. Budgets in the OTs are based on historical data, while the OCs pursue improvement as a fundamental objective with budgeting.Design and development of products and processes based on Joint Engineering is what is seen in competitive new companies, as opposed to segmented work and by functions typical of traditional companies. In this way, companies such as Toyota manage to develop a design in less than 2 years that most western automobile companies usually take an average of 3 years. Currently, and even more in the future, ecological factors will be a fundamental issue both when designing products and services, as when designing and developing the respective production processes. For this reason, OCs give great value and importance to ecology, certifying their processes with ISO 14000 standards, while OTs produce massively highly standardized goods,Competitive companies try to satisfy the requirements of each individual or market segment. Highly competitive companies conveniently manage brands, something that traditional companies do not do. As in the previous case, while competitive companies manage intellectual capital., the OTs do not do it.The OTs do not manage risks or they do it in an unsystematic and incomplete way. The CBs give risk management a preferential place when making decisions and analyzing the situation. Competitive companies par excellence practice benchmarking in a systematic way in order not to lose sight of their competitors, nor stop aside the best practices that are developed in the market.Highly competitive companies make the theory and practical application of business economics, financial engineering, logistics, operations research and economic engineering, fundamental tools to improve their performance. The OTs completely neglect these matters, thus losing many opportunities to improve the long-term average profitability of their operations. Highly competitive companies make the use of the Internet and Intranet a fundamental axis in their analysis and strategic projects.As a result, they miss many opportunities to improve the long-term average profitability of their operations. Highly competitive companies make the use of the Internet and Intranet a fundamental axis in their analysis and strategic projects.As a result, they miss many opportunities to improve the long-term average profitability of their operations. Highly competitive companies make the use of the Internet and Intranet a fundamental axis in their analysis and strategic projects.
From a point by point evaluation of your ongoing company, you will know how traditional or competitive it is in terms of management. If your business is about to open, you can take into account all the essential aspects so that your company is a highly competitive company from the beginning.
According to studies and research, a traditional company has unproductivities that represent 25 to 35 percent of its turnover. On average, they use twice the necessary labor, four times more physical space than competitive companies use on average, and have timeframes in their processes that are much higher than the OCs.
The best way to differentiate one from the other is to see them through Alvin Tofler's models and parameters, since the former can be classified as representative organizations of the Second Wave, while the latter are the so-called Third Wave organizations.
