Peters and Watermans In Search of Excellence - Research Paper Example

Order 158040 Topic: EMERGENCY assignment for the "Accounting and Management". This paper seeks to analyze and discuss the following: “Peters’ and Waterman’s In Search of Excellence1 offers an account of business that is sloppy and self-serving. Consequently it can offer no practical insights on the business of management.” This paper will try to evaluate the implication of the statement of the authors in relation to the objectives of the authors in writing the books and the concept of management in organizational terms. This approach therefore requires us to see the bigger picture of the authors’ work and understand the context their statement of “no practical insight” could be properly understood. Knowing management and its ultimate test would allow us to evaluate the authors’ statement. It has been said that every organization requires the making of decisions by difference people in organizations, the coordinating of activities, the handling of people by those given the power and the evaluation of performance directed toward group activities.2 Such activities could be called management and its ultimate test of its success could be found in the “actual, long-run performance and operation results in the competitive market.”3 This success could only come through the efforts of people which should induce one to say that management does not operate in isolation with people. In management, some need to be leaders and some need to be followers to bring the organization into attaining its objectives in serving the interest of the community. Hence the concept of organizational culture is also an indispensable topic in the development of management theory. How do we appraise management then? How can we say whether management may be doing what it is suppose to achieve? The simple answer to this is that they must be bringing to people in attaining organizational objectives which are measurable. The actions of such successful management must influence or encourage others to follow their foot steps. They must impel people to action. This precisely was the finding of Peters and Waterman in their book ‘In Search for Excellence.’ This impels us therefore to know these attributes that characterized successful companies according to Peters and Waterman and from which we could learned. Massie summarized them as follows: (1) they are action oriented. (2) They are close to the customer. (3) They seek autonomy and emphasize entrepreneurship. (4) They focus in production through people. (5) They emphasize underlying values and try to use values in practice. (6) The “stick to the knitting” and do not attempt to perform in areas outside their expertise. (7) They seek a simple form of organization and keep their staffs lean. (8) They keep tight controls, yet allow those lose means of maintaining control.4 Knowing their conclusions would prompt us to answer the questions: “What were the criteria used by Peters and Waterman, Jr. in characterizing the businesses? Do these criteria have basis in logic and application?” Peters and Waterman made an analysis of the distinctiveness of at least sixty-two successful companies, on the basis of having “stayed ahead of their competitors on six criteria: compound asset growth, compound equity growth, ratio of market value to book value, return on capital, return on equity, and return on sales. They identified eight key attributes of “excellence”5. The popularity of their work could perhaps testify to logic and applicability of their work. Crainer and Hamel has described the work as “the most popular management book of contemporary times. Its global sales now near six million”6 By looking now at the eight attributes, one could notice what Peters and Waterman commented that these "excellent" companies were "brilliant on the basics", that strong leaders led them at forming stage and they have a “strong, shared culture” in achieving success.7 The authors themselves said: "Without exception, the dominance and coherence of culture proved to be an essential quality of the excellent companies. Moreover, the stronger the culture and the more it was directed toward the marketplace, the less need was there for policy manuals, organization charts, or detailed procedures and rules. In these companies, people down the line know what they are supposed to do in most situations because the handful of guiding principles is crystal clear."8 As could be found, the element of people is being indispensable part of the management. They have the leaders and the organization act in unison in attaining objectives in terms of their culture. Hope and Hendry agreed with the application of the principles when they said the “argument advanced by the excellence literature was that autonomous project teams and strategic business units could be given license to innovate in the confidence that their adherence to corporate values would prevent them from acting against the interests of the company….in such a way that rules and regulations, in the form of corporate policies and procedures, would become unnecessary.9” Payne could not but agree also by putting: “the value of a strong culture lies in the fact that behaviour is controlled by the members themselves”10 The findings of Peters and Waterman’s found consistency with reports by Deal and Kennedy11 who studied "nearly eighty" organizations by interviewing McKinsey consultants who had worked with them and where they found that only twenty-five had "clearly articulated beliefs" and for which they “characterized the consistently high performers as strong culture companies." 12 Not every author have the same degree of support for Peters and Waterman and Hofstede was one of them who gave “some rather lukewarm support” when the Hofstede found difficulty of searching “in vain for a practical [operational] measure of culture strength” to verify the claim that “strong cultures are more effective than weak ones”13 ( An intriguing question could be asked: “Was the success in their performance of the analyzed companies continuing for a long time?” Kennedy stated that "five years after the books publication, two-thirds of those companies had hit trouble in varying degrees. Only 14 could still be classified as excellent by the original criteria14". Crainer and Hamel quoted Tom Peters to have said about the matter: "It was a brutal, upfront attack on American management and McKinsey thinking. Okay it was 75 percent about islands of hope but that was what they were: exceptional. I consider In Search Of Excellence a bad news book15". Were the findings then of Peters and Waterman in vain? Certainly not since similar authors maybe subsequently questions. Gray noted that “they have stimulated much further discussion, research and experiment.16” He quoted Kennedy to have said “they illuminated many issues, such as corporate culture and values, which are just as valid today as in 198217" and Drucker to have commented: "The strength of the Peters book is that it forces you to look at the fundamentals. The books great weakness - which is strength from the point of view of its success - is that it makes managing sound so incredibly easy. All you have to do is put that book under your pillow, and itll get done.”18 Given now the context, under which “In Search for Excellence” was written, is there a still reason to study the sloppy ones? Is it fair to ask the question in the first place? Why mind those things when you cannot get anything beneficial from them? We had therefore seen the bigger picture when the authors discussed their dissertation on well manage companies. Who would have cared about the sloppy ones? When one tries to think deeper however, one would realize that a wise person learns wisdom from many things. One could argue that there are literatures or writings that study the causes of failures. Studying the cause of failures would allow one to avoid repeating the same mistakes. If there is any reason therefore to know the sloppy, it could be on knowing what to avoid these causes. When the authors talked of excellent companies, they could make their colourful by trivializing the sloppy ones and such was not unexpected. In other words, the title of the work influences the contents and ideas within. To conclude, there is basis to state that well managed companies serve as good models and should impel others to do the same. Peter and Waterman,Jr. had all the rights what they claim in their book ‘In Search for Excellence’ since they are looking from the point of view of what to do likewise in order to attain the success as defined in the book In Search of Excellence. It is true that we learn something from what is ideal or laudable. Good learning comes from good examples. As noted however, there should be also good reason to look at sloppy companies and know the caused of their sloppiness and eventually avoid the same. The position taken by Peters and Waterman in the book “In Search of Excellence” as to lack of practical insight from sloppy companies should be reconciled with the objective of the writer in writing the books given the title of the Book about excellence. Had the title been about the causes of failure19, of sloppy business, it would have been different they would said things differently. References: Crainer and Hamel (1997), The Ultimate Business Library Oxford, Capstone [Foreword and commentary by G Hamel] Deal, T and Kennedy, A (1982) Corporate Cultures London, Penguin Business Drucker, P F (1987) The Frontiers Of Management, London, Heinemann Gray, R. (1998) , Organizational Culture and the psychological contract, A review of the literature {www document} URL , http://www.btinternet.com/~kumpania/culture.htm, Accessed March 11,2007 Hofstede, G (1991) Cultures And Organizations London, Harper Collins Hope, V and Hendry, J (1995) “Corporate Culture Change - Is It Relevant For the Organisations of the 1990s?” Human Resource Management Journal, Vol 5, No 4, 61-73 Kennedy, C (1991) Guide To The Management Gurus London, Business Books Massie (1987) Essentials of Management, Prentice-Hall International (UK) Limited, London Payne, R (1991) “Taking Stock Of Corporate Culture” Personnel Management, July, 26-29 Peters, T and Waterman, R (1982) In Search Of Excellence New York, Harper and Row Taylor, and Arnold (1999), Another Look at Minimum Wages and Business Failure Rates , Journal of Economic Issues, Vol. 33, 1999 Read More