Several problems exist in this traditional culture that make it inappropriate in today's environment. A cost- reduction philosophy, for example, leads to obsessions with cost over quality and value. Cutting costs may lead to short-term profitability, but the reduction in value to the customer will result in lost business.
In terms of motivating employees, more of them can relate to the need to increase value and quality than to cutting costs. This is because as customers themselves, they know what they demand in quality. As employees, there is little incentive to cut costs unless they are partial recipients in the resulting gains. This is not usually the case.
An emphasis on costs tends to produce conservative solutions to problems. In history it usually has been the risk taker, the person with a creative solution to a problem, who has produced a profit while satisfying the customers.
The rational approach to management can result too often in a style that is overly critical. It is easier to find economic reasons not to do something than to find such reasons as customer satisfaction to proceed. The resulting paralysis through analysis leads to a lack of new ideas. The company relies on formal systems rather than on internal values to move it forward. The result is often stagnation rather than movement.
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