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Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1995

Abstract

The hierarchical organization based on the strategy-structure-systems doctrine of management no longer delivers competitive results. While a top-down structure of corporate divisions gives managers tight control and allows companies to grow, it also fragments resources and creates a vertical organization that prevents small units from sharing their strengths with one another. Structural fixes, such as skunk works, alliances, and acquisitions, have not solved the problem. Based on a study of 20 companies with vanguard management styles, the authors predict a managerial revolution that will focus on horizontal processes rather than vertical structures. The job of management will be to promote three core organizational processes: frontline entrepreneurship, competence building, and renewal.

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Abstract

The hierarchical organization based on the strategy-structure-systems doctrine of management no longer delivers competitive results. While a top-down structure of corporate divisions gives managers tight control and allows companies to grow, it also fragments resources and creates a vertical organization that prevents small units from sharing their strengths with one another. Structural fixes, such as skunk works, alliances, and acquisitions, have not solved the problem. Based on a study of 20 companies with vanguard management styles, the authors predict a managerial revolution that will focus on horizontal processes rather than vertical structures. The job of management will be to promote three core organizational processes: frontline entrepreneurship, competence building, and renewal.

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