Analysis Of Sumantra Ghoshal's Article: Changing The Role Of Top Management

The articles:

Sumantra Ghoshal’s article on “Changing the role of Top Management: Beyond Structure to Processes” which was published in Harvard Business Review is a good example of his immense contribution to the field of leadership and change management in a large organization. Taking the example of ABB, the article beautifully explains the importance of managing the paradox of being centralized and decentralized, being small and big, being local and global at the same time. ABB being one of the worlds’ major Electrical Company encompassing over 1300 different companies adopted the model which required their frontline managers to report to both a regional manager and a global business head. This kind of hierarchy is just one step towards creating

He wonderfully describes it as “the externally oriented, opportunity seeking attitude that motivates employees to run their operations as if they owned them”. This line summarizes the way Sumantra feels about the entrepreneurial process in an organization. Every employee will be lost in the process of sticking to the hierarchy and the various other static structures within the organization and forgets that the true innovation will happen at the grass root level when the employee takes complete ownership of the task. Sumantra was one of the earliest to spot this as a management initiative to drive in the culture of the organization and used it as a sound basis to criticize the existing system structure doctrine. The authors quote examples of 3M, Intel and Canon for showing that these companies maintained that entrepreneurial spirit in spite of the growth they achieved in terms of size and revenues. However, the authors go on to caution that the “mere existence of small units does not guarantee that they will be innovative”. Just like 3M, even the top management at ABB has begun to focus on its frontline small units as they believe that they will be the primary locus of the organizations assets and

The innovations story of 3M, be it the post-it notes or the other adhesives that they have innovated for the special need of the customers, the impact of the top management’s thinking and strategic decision making is highlighted in these stories. The culture at 3M was to let the market decide the value of the project or the innovation made rather than some analysis of their internal manager or the innovator himself! The authors also acknowledge the collaboration of various functions and the various departments that is needed in building this process ideology. The 3M example stands testimony to the fact that If one of the department fails or does a terrible business mistake, the other departments must pitch in and help even before help is asked. That is a culture where an organization thrives in a paradoxical paradigm which enables it to be small in spite of being big, decentralized, in spite of being centralized and local in spite of being