Rating

7

Qualities

  • Applicable

Recommendation

In response to globalization and other major business challenges in "post-industrial society," analysts have developed two highly different theories of organizational change. The first, "E theory," focuses on short-term financial gain, which usually translates into higher stock prices. Prevalent in North America, E theory encourages downsizing, including mass layoffs. Clearly, in E theory, the human element is of negligible importance. In contrast, "O theory" emphasizes retaining employees by upgrading their skills. Popular in Europe and Asia, O theory assumes an "implied contract of loyalty-protection" between management and employees. François Dupuy describes this theory, and how companies and other bureaucracies can apply it. His dense writing style and the book's forbidding layout, with few subheadings or visual aids such as charts, often make his reasoning difficult to follow. However, getAbstract believes this book is very useful for executives who want a new perspective on organizational change. Its prescient formula for corporate transformation is not only moral and humane, but also intelligent and sustainable. It recognizes that an organization is nothing without its people.

Summary

"The Customer's Victory"

In today's globalized environment, some companies win and others lose. But one clear victor has emerged: the customer, who benefits tremendously. Globalization has created downward pressure on prices and more choices for consumers. How do companies deal with this new dynamic? Many, particularly in North America, slash their workforces, move their manufacturing operations to developing countries and reorganize to reduce costs. Others, especially in Europe and Asia, attempt to institute organizational changes that do not involve gutting their local work forces, but rather working with them to become more efficient and cost-effective instead.

Problem Solving that Does Not Solve Problems

To remain competitive, organizations are discovering that they must radically change the way they operate by abandoning their bureaucratic ways. Yet change is "sometimes violent, always painful" – and never easy. The problem is exacerbated because many executives attempt solutions that are doomed to fail. These often take the following forms:

  • "Incantation" – The "most universally widespread practice in organizations," incantation occurs when ...

About the Author

François Dupuy is a senior executive at a consulting firm that assists large organizations to improve performance and deal with radical change. He teaches organizational behavior at the graduate level.


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