The Summary of In Search of Excellence Published by Peters and Waterman - Book Report/Review Example

ADVANCED ORGANIZATIONAL BEHAVIOR: IN SEARCH OF EXCELLENCE By Presented to Advanced Organizational Behavior: In Search of Excellence Introduction “In Search of Excellence” is a well-known book published in 1982 by Peters and Waterman and has been considered a fundamental book in the business world (Thomas & Robert, 1982). It has been read and recommended by some of the largest corporations in the world who have borrowed some of the ideas and concepts explored in their book. Other writers have cited ideas from the book owing to the nature of publicity that it has received about its content over the years (Colville, Waterman & Weick, 1999). The book largely dwells on the principles that an organization must implement, if it seeks to be successful. The book came up as a result of a research activity that they had undertaken on various companies with a different aim in mind. As consultants at McKinsey, they were tasked with the role of collecting information concerned with organization – structure and people (Peters & Waterman, 2006). So with no particular theory in mind, Peters visited several companies and interviewed them as relates to organizational structure. He was later on asked to present the results of his study to several organizations whose need for a simple summary of information led to his development of eight themes that enabled success in an organization (Peters & Waterman, 2006). Peters discovered that there was much more that was required to ensure the success of an organization rather than the policy statements and the strategies that they implemented to increase market share. At the time when he was carrying out the research, most companies had their policies written down well on paper with a well-developed organizational structure that defined the roles and responsibilities of each member (Peters & Waterman, 2006), a scenario that was sure to define their success. However, not every organization actually implemented these plans creating a situation of ineffective management. In order to collect information, they approached top executives who were well known for their skills and experience in organizational design. Business schools within the United States and Europe were also visited to elicit their views on the aspect. Peters also sought to look into the theories of management that were in place at the time to guide organizations. An interesting aspect of leadership emerged with a leaders role being confined to management of the social forces within an organization. Good managers were meant to shape the organization and guide it in the establishment of a good value system. The book has criticized some methods of management as the leading cause of inefficient management in organizations. The structural organization mechanisms that were being used in the sixties and seventies were becoming obsolete (Strang & Macy, 2001). But instead of Peters developing ideas for new structures that could be used in the eighties to handle the growing business demands, he decided to instead focus on his eight themes. He felt that the structural form of an organization does not significantly contribute to its success owing to the fact that they are simply mentioned on paper but never implemented. More was needed to ensure business success apart from the constant development of organizational structure. The eight attributes Peters stated that for a company to be successful then it needed to display a bias for action and make decisions in a quick manner. He further insisted that much as analytical thinking had a role to play in fundamental aspects of the company, managers should not take such a long time to think over one issue. He advocated for a “fix it, try it” approach whereby organizations would try out a solution and evaluate its results (Peters & Waterman, 2006). If this particular solution did not work then they would move one to another approach until the best solution arrived at. Customers are important to any business and the nature of service that they receive will determine whether they stay loyal to the company. He demonstrated the manner in which some of the companies had paid attention to their customers and made changes as a result of the concerns they had about their products. Being close to the customers ensures that the companies learn from the customers that they serve so that they can produce quality service that can last. Autonomy and entrepreneurship is the third theme that Peters stated successful companies should have (Peters & Waterman, 2006). The development of new ideas is important for the continuity of any business. They allow staff to generate new products and even have special areas designed within the company premises that allow them to work effectively. A company should allow employees to take practical risks in order to develop new products. Every employee in an organization has the opportunity to act as a potential source of ideas for the company. Successful companies treat their employees well with the belief that they can be a source of efficiency. They do not foster attitudes or regard capital investment as a fundamental source of efficiency improvement but place emphasis on respect towards their employees. When employees are made to feel as if they are part of the company then they are more likely to engage in production in a very efficient manner as compared to their counterparts who are not regarded with respect. In addition, the level of capital investment that an organization injects into its operations may not yield if the employees are not motivated to engage in meaningful production. A hands-on approach is also important for the success of a business (Peters & Waterman, 2006). This includes constant visits to the site of production to assess the production processes. The role of managers evolved from their presence only in boardrooms and offices at the back of the company, to plant floors where they also supervise the production process. This is commonly referred to as management by walking around and is relevant to the achievement of a company. This process ensures that production is going according to schedule and any concerns can be addressed early. Employees also understand that their work is being supervised hence they are more likely to maintain the production standards to the companys requirements. Entrepreneurs should only start companies in a field that they are able to run (Peters & Waterman, 2006). A person who knows nothing about food production should not engage in the food production business because it is likely to fail. Once a company has delved into the production of one type of product then it should only stick to the production of this product and not engage into other area where it does not have operational knowledge. He however acknowledged that there were odds to this principle when applied to business. Among the various companies that were included in the study very few had many staff members at the management level. They maintained a simple form of management that focused on a lean staff structure. Management is an area that is crucial to decision making and success of a business. When there are many members, there are several disadvantages that go along with it. These include the high costs that will be incurred in paying their salaries and the decision making process that will be hampered. When there are several people through which a decision should be passed through. As a result of differences in ideologies, it may be difficult to reach a consensus on any issues that the business has to decide upon. Some of the best companies that were included in the study exhibited centralized and decentralized features (Peters & Waterman, 2006). Some of the features are centralized in one area while others are decentralized and allowed to operate from other areas. This is reflected in its theme of simultaneous loose tight properties that any business may seek to have. Most production processes are left in the hands of the production teams while other tasks like supervision and value is left to the managers. Criticism Their strategy was based on McKinseys 7-s framework and focused more on the reasons why things do not work in a company and less on the structures and strategies that are required by individual companies to succeed (Capon, Farley, Hubert & Lei, 1991). They have been listed and proposed in a manner to suggest that a company must practice all of them to attain this success. This is not however the case because these concepts were not represented in totality in the companies that were researched upon. In fact, the best practices of each company was identified and listed to make the eight themes. His research created the impression that those companies that were included in the study were perfect and operating optimally. This was not the case because some of the companies that were included in the study have either collapsed or have been acquired by other companies. Some of these ideas he recommended should be tried out in a controlled setting before being implemented. However, this failed to factor situations in which prototyping was not feasible. In order to try out certain solutions, they have to be applied to real life situations within the business. Organizations with sensitive production systems or those that are of a critical nature may have to make better decisions before implementing possible solutions to their systems (Clayman, 1987). Evaluation of other systems that have been tried and tested may be fundamental to ensure that only the essential methods are tried out. The process of evaluation takes time, a concept which Peters may not have considered when coming up with this theme. Trials are also costly and some organizations may not have enough resources to undertake such a venture simply to beat the time factor. Innovations in a company have often been known to take center stage towards the success of a business. Some companies dedicate so much valuable time and other resources to these departments without considering the fate of other departments. Innovation is just but one branch of a company and maintenance of the already designed products must be undertaken. Care should also be taken not to make the rest of the staff feel like they are not important as a result of the attention that is dedicated to innovations department. In addition, it is quite costly to manage such departments and may not be suitable for all companies and business types. Peters acknowledged that there were exceptions to his sixth principle stipulating that companies should only stick to what they know (Peters & Waterman, 2006). Not all entrepreneurs engaged in the businesses that they are currently in because they knew everything about the business. Quite to the contrary, some of them knew nothing about the nature of production but were able to elicit help from reliable sources that have turned their ventures into multimillion dollar companies. Acceptable risks need to be taken by entrepreneurs when they delve into the business world. At times, even those sectors that one believes they are very knowledgeable in may turn out to be less productive. This theme was limiting to potential business owners making them fearful of delving into business areas that they have limited knowledge in. The research process was flawed right from inception as the companies that were chosen for the sample were not representative. This is because the initial purpose of Peters research was not to develop eight themes for success and a book for that matter. Various organizations that are considered profitable were missing from the list of companies that were researched. Businesses in certain areas like banks were left out arguing that they were highly regulated at the time. This made them less interesting in their ability to contribute to the anticipated results of his study. This indicated that Peters already knew what results he would arrive at to the extent that he locked out potential business categories like banks that may have offered relevant information (Copper & Kleinschmidt, 1986). Small companies were left out from the study citing their inability to contribute significantly (Peters & Waterman, 2006). By doing this, Peters implied that small companies did not have efficient management practices that could be shared with the world. In addition, these results could only be applied to large organizations and businesses but may not produce significant results when applied to small organizations. This was a limited way of approaching the analysis because even small companies have got best practices which they could have lent to his study (Guest, 2001). In fact there are some small companies that operate very efficiently as compared to the large corporations and receiving a lesson from them would not have been bad. Companies that were also not receiving more than $1 billion in annual sales in five years prior to the study were also left out (Peters & Waterman, 2006). Some of the companies that were chosen for the research process did not continue on their path to excellence with two of them, Wang Laboratories and Atari being forced to bankruptcy (Grunig, 1992). Peters had not evaluated companies based on their ability to succeed in future but based it primarily on their past and current capabilities. As a result, some of Peters concepts do not ensure the success of a business in future, failing to take into account the factors that are required for a business to succeed in future. The companies were chosen as a result of perceptions and recommendations from various stakeholders who it can be argued may have had vested interests in these companies. This aspect led to bias in sampling, an issue that significantly affected the quality of information that Peters collected. Leadership is very important for the success of any business and must be carefully considered (Caruana, Pitt & Berthon, 1999). This is seen in the case of Wang Laboratories whereby the company almost collapsed as a result of poor leadership principles by the proprietors son. Because of Wangs decision to leave the company to his son who was then made company president, the company incurred significant losses. A failed attempt to impress the public with innovations tainted the companys public image. Several staff members resigned from the company due to poor management principles. Bearing this in mind, it would seem callous that Peters would suggest that leadership style was irrelevant to company success (Johnson, Natarajan & Rappaport, 1985). His research had a bias towards leadership claiming that its role would have been referred to heavily when determining the success of a company. The assumption that every company knows the importance of effective leadership is misleading. The aspect should have been tackled within the themes so that other companies seeking to utilize these strategies may have the facts correct. Conclusion Peters and Waterman have published an important book that seeks to guide businesses all over the world as to the aspects of their management that they should focus on. It has however been considered flawed from inception as a result of the research process that was undertaken to develop its eight themes of success. Even now, it is considered a flawed because some of the companies that it included in its study as successful companies are currently bankrupt, have been wound up or have been assimilated into other companies. This mere fact is enough for one to conclude that fundamental aspects for success were still missing. Principles that would ensure that the companies maintain their market share and are still profitable even in the future have been overlooked. The aspect of leadership has also not been treated with the seriousness that it deserves. As a result of the various aspects of management that have been overlooked, the book is considered flawed from inception to the present day. Businesses must approach the implementation of the concepts portrayed in the book with care and in context. References Capon, N., Farley, J. U., Hulbert, J. M., & Lei, D., 1991. In Search of Excellence ten years later: strategy and organization do matter. Management Decision, 29 (4). Caruana, A., Pitt, L., & Berthon, P., 1999. Excellence-market orientation link: some consequences for service firms. Journal of Business Research, 44(1), 5-15. Clayman, M., 1987. In search of excellence: the investors viewpoint. Financial Analysts Journal, 54-63. Colville, I. D., Waterman, R. H., & Weick, K. E., 1999. Organizing and the search for excellence: Making sense of the times in theory and practice. Organization, 6(1), 129-148. Cooper, R. G., & Kleinschmidt, E. J., 1986. An investigation into the new product process: steps, deficiencies, and impact. Journal of product innovation management, 3(2), 71-85. Grunig, J. E., 1992. What is excellence in management? Excellence in public relations and communication management, 219-250. Guest, D., 2001. Right enough to be dangerously wrong. Organizational Studies: Modes of management, 1, 347. Johnson, W. B., Natarajan, A., & Rappaport, A., 1985. Shareholder returns and corporate excellence. Journal of Business Strategy, 6(2), 52-62. Peters, T., & Waterman, R. H., 2006. In search of excellence: Lessons from America’s best run companies. New York, NY: Collins Business Essentials. Strang, D., & Macy, M. W., 2001. In Search of Excellence: Fads, Success Stories, and Adaptive Emulation1. American Journal of Sociology, 107(1), 147-182. Thomas, P., & Robert Jr., W. H., 1982. In search of Excellence. New York: Warner. Read More