Paper presentation on Changing the Role of Top Management - Beyond Structures to process. It is a Harvard Business Review article jointly authored by Mr. Sumantra Ghosal and Christopher A. Bartlett

1. Changing the Role of Top
Management
Beyond Structure to Processes

2. About Authors
Sumantra Ghoshal
•Organizational Theorist
•Professor of Strategic and International Management at LBS
•Founding member of ISB, Hyderabad
•Author holds the Robert P. Bauman Chair in Strategic Leadership at London Business School
Christopher A. Bartlett
•Professor at Harvard Business School, Boston
•Focuses on the management challenges of the multinational corporations
Managing Across Borders: The Transnational Solution
Changing the Role of Top Management: Beyond Strategy to Purpose
•It was the first article in this series

3. Background
Global Matrix Structure
• A organizational structure that was abandoned by
many big multinationals like Digital Equipment,
Citibank and Westinghouse
• ABB implemented the structure which other use to
think that is not workable and not even efficient
• ABB was able to build a more competitive
organization using the structure

4. The Elusive Structural Solution
Based on the classic doctrine Top Management has three core responsibilities
•To be the company’s chief strategist
•Structural Architect
•Developer and Manager of its information and control system
From atop the hierarchy Leader looks down on
•Order
•Symmetry
•Uniformity
From the bottom Employees looks up
•Phalanx of controller
•Whose demand soak up most of their and Energy and Time
“The result, as GE’s chairman and CEO Jack Welch puts it, is an
organization with its face towards CEO and its ass towards the
customer”

5. Continued…
Postwar Era: Traditional Divisional Structure
•Comprised of Strategic Business Units, Groups, Sectors
•Designed to make meticulous, calculated decisions and move them smoothly
forward and Upward
•Ideal for refining the management of ongoing operations
•Makes organization increasingly inflexible
•Slow to innovate
•Resistant to change
In the words of Jack Welch
•Right for 1970s
•A Growing Handicap in the 1980s
•A ticket to the bone yard in the 1990s

6. The Organization as a Portfolio of Process
Classic hierarchical structure
•Information and capital requests were pulled to the top of the
organization
•Corporate executives to make decisions drove resource,
responsibilities and control down to the frontline units
•Authority-based processes dominated the operation
Horizontal Process
•Cut across organizational boundaries separating
organizational units
•Not a top down process

7. Horizontal Organizational processes
The Entrepreneurial process
The Competence building process
The Renewal process

8. The Entrepreneurial Process
Assumes that individuals can take initiatives
Traditionally organizations use to break the organization in to smaller
entities for the ease of allocating task and control performance
Instead, deviating away from the traditional philosophy Smaller units
must be derived from the innovation
More number of smaller units and synchronism among them is
required

9. Continued…
Senior Management must maintain a sensitive
balance between discipline and support
Top management’s objective must be
• To reduce reliance on formal control system
• Increase self discipline
• Examples are ABB (1300 smaller entities) and 3M (3900
profit centers)
“At 3M, the assumption is that the market is a far better judge of a
project’s value than some staff analysis or senior manager”

10. The Competence-Building Process
It both assumes and shapes an environment for collaborative
behavior
Core competence is a solution to the problem of increasing a
marginalization
Top management entrusts the operating units with the challenges of
creating the competencies
Competence-building process is predicated on small frontline units’
ability to develop scarce skills, knowledge and other resources

11. Continued…
Top management must
• Create sense of community
• Enable cross-unit collaboration
• Fairness in organizational practices
• Create mutual dependence and
reciprocity in the organizational
environments
“An established sense of fairness serves as an organizational safety
net for risk takers”

12. The Renewal Process
Capitalizes on the natural human motivation to learn
by creating the resources and tools that people need
to do so
Traditional vertical process of information up and
control down has following
•Allowed organizations to develop highly efficient operations that
support the expressed strategy
•Contains no mean for challenging that strategy

13. Continued…
It is a process designed to challenge a company’s
strategy and assumptions behind them
Top managers must behave
•As an agent of disturbance
•Intervene directly to shake up operating units that have grown
comfortable
•Resolve the healthy conflicts and challenges that are
cultivated

14. Thank You