Knowledge
The Development of Large Service Organizations
Organizations emerge, grow, and change their form. From rigid, centralized, hierarchical structures, organizations transform into a grouping of self-sufficient segments and service providers that support one another.
Selling hardware was the starting point. Products, systems, and plants were sold to customers in various regions. Faults occurred, service and additional services became necessary. Regional sales and service organizations emerged.
Regions received overarching central organizations. Pure repair service transformed into comprehensive services: expansion, augmentation, operation, financing, leasing, training, and consulting became part of it.
Under various considerations, regional units were placed under the more or less tight leadership of a headquarters. Arguments include: a common strategic direction, consolidation of redundant activities in one place, thereby reducing duplicated effort. Examples are data centers, staff departments, and purchasing organizations. Costs are reduced.
In markets with manageable, constant customers and market segments, the advantages of centralized organization come into play.
The competence and overview of the individual is reduced. The individual becomes a number in the system. Mechanistic phenomena emerge. Human, flexible, spontaneously vibrant ways of working find no fertile ground. They are suppressed by uniform rules, procedures, guidelines, and directives.
Complexity rises and leads to diminished capacity to act in new situations. Yet constantly new situations are more the rule than the exception in rapidly changing markets.
Knowledge exists in many places. There is no shared center of power. Individual segments serve, process, and develop their own markets. Market segments exist both within and outside the neural network. Customers are served individually and in a focused manner. Required services are delivered immediately, individually, and flexibly, aligned to the respective customer needs.
The staffing strength of individual segments ranges from areas with well over 100 employees, to smaller groups and teams, down to individual persons. Individual segments remain manageable and can be directly influenced by each member. Individuals shape and take responsibility for their activities in coordination with other colleagues of the segment and are an important element.
Individual segments offer unique, individual services. Uniform approaches, as they occur in centralized organization, do not exist. In neural organizations, every single segment must deliver inspiring performance.
Few, simple, recognized, and acceptable rules exist. For example, each segment must work together with a mutually and freely selectable control segment. Several self-sufficient control segments must exist within the network. They control the segments working with them and report their results to the owner.
Owners thereby have an indirect but highly effective means of steering.
The question arises whether such neural organizational networks have a basis for existence. They must be more efficient than individual self-sufficient companies.
Justification for existence exists when a network offers a better platform for people and communication than is possible outside.
Neural networks fundamentally enable various combination possibilities for collaboration between any segments. The combination possibilities are extensive overall:
A look at developments in nature shows that neural structures also form there. The temporal dimensions in nature are greater than in markets and organizations created by humans.
The possibility of a neural organizational form presented here is forward-looking. Organizations are developing in this direction.
GoodPoints implements this neural principle:
Discover GoodPoints →Original: "marginal regional central neural - Development of large service organizations" by Dr.-Ing. Walter Tritt. Further publications at www.scwt.de.