R. Devarajan

Recent approaches to organisational change and transformation are mainly concerned with improving the performance of an organisation. Any attempt to change an organisation must be concerned with strategy and capability. There are three core elements in organisational performance strategy, capability and environment.

Business strategy is simply the identification of the ends that an organisation intends to pursue, and the means to achieve those ends. Capability refers to the ability of an organisation to achieve the goals that have been set for it. Environment constitutes pressures from competitors; expectations of customers; requirements of employees/suppliers/society; the nature and impact of regulations; and the changing nature and implications of technology.

Strategy first

Management writers have identified three distinct approaches to improve organisational performance, by using the three core elements. The first method exhorts the organisation to change itself to create the necessary blend between the organisation and strategy. Managers are advised to ask themselves: "What sort of organisation do we need to achieve what we want to achieve?" Or, more negatively (which is even more revealing), "What features in our current structure/system/culture and so on, obstruct what we are trying to achieve?"

In this method, strategy is identified first, and later the organisation is suitably modified to deliver the strategy. Structure follows strategy. This type of organisational improvement starts with a process of environmental mapping. The organisation must survey its environment, gather data, analyse the data, and then, develop a market-focused strategy. Once the strategy is designed, the organisation will be adjusted and aligned in line with the strategy, and then employ the strategy to the best of its ability.

The second approach to the improvement of organisational performance is the reverse of the first approach. Rather than converting the organisation to support a strategy, this approach involves building a strategy on the basis of real and existent organisational strengths.

Instead of asking, "What sort of organisation do we need to support the strategy?" this approach asks, "What sort of strategy would take advantage of and exploit the strengths currently available in the organisation?" The advantage in this system is that a strategy built on the core capabilities of an organisation is more enduring and difficult to duplicate by competitors.

Amalgam of approaches

The third approach to improving performance in organisations is an amalgam of the two approaches outlined earlier. It does not exclusively focus on capabilities, nor does it stress the strategy formulation

per se

. This method refuses to separate strategy and capability. It considers the attempt to dichotomise thinking and doing as undesirableIt is this third way of improving performance that creates an organisation that is clever and adaptive. It eschews the normal pathologies associated with the hierarchical and straitjacket organisation. It is quick to spot opportunities as well as threats. It is not bogged down by historic baggage. And it is always alert to an unknowable future.

(The author is a Chennai-based freelance writer.)

(This article was published in the Business Line print edition dated June 6, 2007)
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