According to Thomas J Peters and Robert H Waterman Jr., the traditional culture has included several beliefs they consider inappropriate to success in today's business environment. 1
First has been emphasis on the idea that bigger is better. As a company grows, economies of scale result. The key is to grow, carefully coordinating growth along the way.
The second aspect is an emphasis on cost control. To oversimplify, profits come from sales minus costs. Profits can be increased by increasing sales or cutting costs. This orientation stresses cost cutting as a means of being successful.
The traditional culture stresses lengthy analysis before any action. Whether in marketing, budgeting, planning and numbers are given top priority.
Entrepreneurs are not encouraged. After all, the company has spent a great deal of time and effort to develop the "perfect" system. Company officials do not want people to suggest changes to the system. All they want is someone to follow the methods that have been developed.
Another aspect is the belief that a manager's job is to make decisions. Making the right decisions is regarded as more important than and separate from their implementation.
It is also important for the traditional manager to exert control over everything. An emphasis is placed on lengthy job descriptions, detailed organizational structure, and complicated procedure manuals. People are treated solely as a factor of production.
The key to improving productivity, the traditionalists say, is to provide the correct monetary incentives. Top performers are rewarded and poor ones fired.
Quality can be controlled through inspection. Simply increasing the size of the quality control department can eliminate problems.
Traditionalists believe that all businesses are essentially the same and can be run using the same methodologies. As long as a manager can read the financial statement, he or she can control the business and make a success of it.
Traditionalists also believe they know more than the market. As long as quarterly earnings keep growing, the income statement and balance sheet can be massaged to make the manager look good, irrespective of what the marketplace tells us.
Last is the emphasis on growth. If domestic growth slows, expand into international markets or other industries, even if we do not understand the business being expanded into. (After all, the traditionalists say, all businesses are the same.)
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