Why Your Enterprise Organization Structure Spells Doom for Your Business

The fundamental problem of 20^th century enterprise, the failure to organize the business

The generally-accepted definition of the enterprise business is “the activity of providing goods and services“. Therefore, the activity of providing goods and services must be organized in order to organize the business. However, 20^th century organization theories organize “the enterprise” into organization units, positions, functions, reporting relationships, etc. to produce a contrived “enterprise organization structure” that is laid over the business. The organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business, the business can never be managed.

The business must change continually, while the “enterprise organization structure” remains rigid. The rigid organization structure hampers business change, creates change management problems, and eventually creates pressure for reorganization to contrive a new “enterprise organization structure” that is aligned closer to the actual business. If the business was organized the organization would change with business change.

Result-performance Management (R-pM) organizes the business for 21^st century management

Result-performance Management (R-pM) organizes the activity of providing goods and services into a business result-performance structure. The business activity is organized into capital defined as specific performance solutions. The business goods and services are organized as specific results that are produced by utilizing specific performance solutions in business activity. The organized results to be produced across the business and the organized capital invested in performance solutions are combined to organize the business, by deploying specific solutions to be utilized to produce specific results to organize performance. The cost-effectiveness of each solution utilized is managed against the value-quality of the result produced. By organizing the business, instead of the enterprise, the business itself is used as one structure to integrate enterprise organization and management.

20^th century theories organize the enterprise and not the business, dooming the enterprise to problems

Many organization theories and methods were developed throughout the 20^th century promoting different ways to organize the enterprise. Organizing and reorganizing the enterprise became big business for management authors and consultants. The problem is that once the enterprise organization structure is implemented over the business, the enterprise is doomed to unsolvable 20^th century problems, for the following reasons:

• The enterprise organization structure is laid over the business creating the unsolvable reorganization problem
• The enterprise business, the activity of providing goods and services, has never been organized, preventing the business from being managed
• The enterprise must be managed through contrived accounts, processes, systems, architectures, functions, etc that also are laid over the business
• There is continual conflict between the ever changing business and rigid overlaid structures producing the unsolvable 20^th century management problems
• Each added structure incurs high costs and wastes high-worth capital in the human, IT infrastructure, and other capital required to administer the structure

The enterprise organization structure is the foundation for unsolvable 20^th century problems with reorganizations, inaccurate accounts, corporate governance, unknown value creation, intangible assets, unknown costs, unknown capital worth and benefits of investments, capital development management, outsourcing, alignment, collaboration and on and on. Each structure defines the enterprise differently and requires an information system for processing, creating enormous information complexity and unnecessary IT overheads, while not recording actual business data or reporting actual business management information.

20^th century enterprise problems must be eliminated by organizing and managing the business with R-pM.

20^th century enterprise problems can never be solved by more overlaid structures. The problems exist because the enterprise business, the activity of providing goods and services, has never been organized. Therefore, the solution is to organize the business into current and strategic business structures and use the business structures to integrate business planning, direction, control, and reporting with Result-performance Management. One complete and accurate set of business data is captured and one set of consistent management information is reported on the actual business. All information in or leaving the business is related to a business entity in one official Business Information Base. The general ledger system and a relational data base management system are used to manage the business. All structures laid over the business and the costly information system processing to manage the structures are abolished.

21^st Century Management eliminates 20^th century problems

Result-performance Management (R-pM) eliminates the reorganization problem and other costly 20^th century problems. Slash costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21^st century management.

Download your 21^st Century Management Manual today

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21^st Century Management. Get your R-pM Toolkit, and future updates, at result-performance-management.com.

This entry was posted on Friday, April 11th, 2008 at 02:28 and is filed under:
Forums: Organization and Management, Business Change Methods, Top Ten 20th Century Problems
Topics: Organization Methods, Best Practice Management, Corporate Governance, Strategic Management
Result-performance Management (R-pM): The 21st Century Enterprise
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