Key management action of innovative organizations

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The management are the people who guide the team in a right path wherein all together working for the same goal of success. They have to work together with Sincerity, Unity, Courage, Communication, Enthusiasm, Strengths, and Secrets of the company to form the ultimate chain of SUCCESS. The manager who runs the team should have proper interaction with each and every team member with proper updates and feedbacks. Also have to take active participation whatever happens within the team and team members. Since the manager knows about each and every member of his team, has to check with the daily metrics where that particular team member is lacking behind and has to make sure that the person has been well trained, again have to check for the daily metrics to give the feedback. Also have to sympathize and empathies with the person having any personal issues as well. Every individual team player also has to develop knowledge, confidence, time management and sincerity to be a part in the growth of the company.


An organization is a place where group of people work, together or individually for the same motive and goal of the organization. So to run an organization in a successful manner the management should have some set of rules and norms where every individual has to follow. Every individual should feel responsible for the things happening in the organization and should actively participate in the work given. They should motivate themselves to do the work properly and make use of the benefits given by the company and give benefits to the company in return. These basic keys will be followed in all organization which is running successfully. But now a day it has to be a step ahead with innovation to sustain the success and to bravely face the competitor.


As we all know the only thing that never changes is "change", so everyone needs some change and people are willing to see new things and new ideas. The other name for innovation is creativity which is very important in this competitive world. Innovation is not only one time phenomena but a long process ranging from the generation of a new idea till the phase of its implementation. Hence no matter how marvelous a technological innovation may be, it does not constitute innovation if it creates no pure profit in the market economy. Many books and management experts have predicted a world today of rapidly increasing change and the need for managers to be able to respond in ways that have not been previously imagined.

A. Key management action of innovative organization through SEMCO and GORE

As per Hamel last century, management paradigm focused on control and efficiency however it's no longer adequate at present where adaptability and creativity steer business into success. Long term business success can be enabled not by operational excellence, breakthrough in technology or new business model but through management innovation i.e. mobilizing talent, allocating resources, formulating strategies. (Hamel, 2007).

SEMCO and Gore survived the dynamic market and difficult circumstances in a very innovative and experimental way. Obviously, they are doing something right. Innovation can be raised and influenced through organizational characteristics and practices. There are five main key management actions analyzed in the innovative organizations like Semco and Gore:

Solving Problems Innovatively

Communication Process

Decision making

Management Control

Process Improvement

A1. Solving Problems Innovatively:

All organization has the same motive as to run the business in a successful way, but in today's competitive business world it is made necessary to run the business in an innovative manner like Gore and Semco to stand alone ahead of other companies. Traditionally manager solves a problem if he or she knows about it. He or she will never accept any solution given by others because of ego problems in psychological perspective. They try to impress other by showing they know the real concern of the problem (Holistic approach to performance management -HAPM, n.d). Hence, here power matters. If manager is more powerful, staffs have to listen. But when it comes to innovative management, problem solving is done by group discussion where everyone will be given a chance to express their own innovative ideas which makes the team members feel that their values are been rewarded.

A2. Communication Process:

Organizations that follow traditional which is also called mechanist approach may have long hierarchies. As a result information flow will take a longer time and also this may affect the reliability of information received. On the other hand the innovative modern organizations have more flat hierarchies, where information flows easily between individuals.

In an innovative management, hierarchy is cut down to minimum. Instead of five supervisors or managers, management will have two. Most minor decisions will be taken by the employers themselves. Direct communication between employee and supervisor without including middle person since everyone has given the right to express their own innovative ideas and everyone is considered as an asset of the company. To create an innovative organization, every individual in the organization needs to feel responsible for helping to produce the organization's real results.

A3. Decision making:

Decision Making lies at the heart of a successful organization and as such it is important to consider the different decision making processes. It is the processes and systems by which strategic decisions are taken in the organization. Internal organization decision making becomes the centre of attention and stakeholders and leaders receive less emphasis (Rabin et al, 2000: p.549).

Once a decision is taken it is considered as the final decision and cannot be changed all of a sudden, since the process would have been in the next step. The usage of such formal procedures have the advantage of a well-defined process that all participants can follow and know what to expect. At the end of each cycle of the decision making process the organization will have an in depth understanding of the problem from the evaluation stage (Rabin et al, 2000: p.549).

Group decision-making is a better resource than an individual acting alone when the decision requires much research and brainstorming of ideas. Innovative management approach to decision making is that the managers often involve subordinates and encourage them in giving their view point when making decisions. Hence employees feel more valued and trusted by their managers which in turn not only motivates employees but also increases employee morale. This is not seen in the traditional approach to decision making as the manager often makes the decision alone and dictates to subordinates.

A4. Management Control:

This is the most important key factor which every organization feels difficult to handle. The employees working for the organization are humans and cannot be controlled like machines. They have to be handled in such a way that they are not been hurt and also get the work properly done from them. If such mechanisms does not operate in an organization there is no coordination and control, thus no organization or performance. Therefore if proper management control is done then it is easy for the organization to grow well, because team co-ordination is very important to run any kind of concern. Management also has to motivate the employees with proper co-ordination which ultimately leads to the pathway of success. From a behavioral perspective management control is viewed as a process and not as a set of tools and techniques. In other words implementing a managerial control mechanism in an organization can impact employee behavior (HAPM, n.d).

According to the mechanistic view of organizational control, classical management theories suggest that control is one of the basic functions of management that goes along other management activities such as planning, organizing, commanding and staffing. In other words the control is a mechanism which ensures managers that plans and targets will be achieved (HAPM, n.d).

From 1990 there has been incredible change in management control to initiate innovative ways to meet the growing demand of the markets and now it's tilted towards Organic approach i.e. it focuses on participation, delegation and organization's self willpower to achieve team based management performance targets. It is also analyzed by Wellens on the organic approach and its impact on the employee participation and found that how organic approach can be initiated. (Wellens, 1977).

As per Sisaye, in a team based management control system, to manage employees a cognitive approach is used, i.e. employees in this approach can use personal, face to face communication, flexible feedback and interpersonal relationship to encourage and build trust cooperation, coordination, power sharing and authority among themselves and also with other management. (Sisaye, 2006, Pg.155-158).

A5. Process Improvement:

The purpose of process improvement is to eliminate the root causes of performance deficiencies in processes that already exist in the organization. These performances deficiencies may be causing real problems for the organization, or may be preventing it from working as efficiently and effectively as it could. To eliminate these deficiencies a five-step approach is used.










B. Analysis of SEMCO S.A with the management actions


SEMCO S.A, founded by Antonio Semler in 1912, was traditionally managed industrial equipment company. SEMCO is located in Sao Paulo, Brazil. Richard Semler, instituted an employee-friendly and employee empowered management system. SEMCO S.A, manufactures pumps used to empty oil tankers, high volume industrial dish washers, cooling units for air conditioners and various types of industrial mixers for the food industry (Maresco,P & York,C, 2005).

SEMCO was originally founded in 1984 as an entity positioned to provide engineering services and management support to the Department of Defence. The entire business base consisted of government contracts, many of which were set-aside for small business and small minority-owned business concerns. As a result of the expanding business base and the growing number of military acquisition programs during the mid-to-late 1980s, SEMCO continued to grow and diversify (SEMCO, 2010).

B2. SEMCO Solving Problems Innovatively:

As per Semler's experience, he explored many innovative methods and applied to make his family business a success. When he took the initiative, he observed the increasing level of theft and robbery in the factory. The problem became so crucial that SEMCO had to install metal detectors to check the employees. In spite of the implementation of high tech technology the theft level prevailed. The conventional method was to employ more security guards and catch as many as possible so as to set examples. This type of approach can be seen in stores and banks in UK wherein to prevent theft, security guards and CCTV cameras are installed. But SEMCO applied totally different approach to solve the problem. He believed in the fact that if you could trust people they are surely going to surprise you. Thus he treated all his employees as responsible adults and removed all the detectors to create a environment to show that the employers trusted the employees. Surprisingly, initially the theft level increased, but after some weeks theft level started to fall. It continued to fall even further until the new generation of Semler arrived. (Maverick, 1993).

B3. SEMCO Communication Process:

SEMCO organizational change and innovative communication face highest level of entropy. It is also supported by Barnett, stating that organizational change and innovative communication enables to tolerate highest levels of entropy. It promotes research and development departments and planning and implementation to work at ease and help getting better results compared to heavily structured or networked organization.( Barnett, 1997 ,p. 134).

SEMCO adopted superior communication skills as they had to communicate with numerous satellites, clients, customers and internal team members through oral and written process with greater confidence, ability and ease. (Semler, 1994).

B4. SEMCO Decision making:

SEMCO managers and workers together make decisions; not just the chairman. One of Ricardo Semler's first undertakings was to throw out all the rules. He reduced the layers of management from twelve to three and reduced the "corporate" staff by more than 75%.

At SEMCO the standard policy is to have no policy. For those whose job requires travel there are no travel restrictions other than using your head. There are no departments, no rules, and no audits. The entire budget system has been simplified. What Semler did was to strip away the blind authoritarianism that diminishes productivity. Workers are self-governing and self-managing. In fact, workers have, in most cases, mastered several jobs (Maresco,P & York,C, 2005).

B5. SEMCO Management Control:

According to Richard Semler, strategic planning and vision are the often barriers to success. In group of six counselors, all take a six-month turn as acting CEO. Meetings are optional and those who attend make decisions and those who not have to live with it. Designs and specifications are shared. Person who knows more about the subject will chair the meeting (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Second principle being, the person who claims the responsibility will be given the task. Third, profit sharing for employees and success-oriented compensation for satellite enterprises will spread responsibility across the SEMCO map (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

C. Analysis of W.L. Gore with the management actions

C1. W. L. GORE & Associates, Inc.

W. L. Gore & Associates, Inc was founded in 1958. It is a privately-held company headquartered in Newark, Delaware, USA. Gore has built a worldwide reputation for ethics and integrity in its dealings with customers, suppliers, and employees, and for taking a long-term view when assessing business situations for more than 50 years now. The company has around 9000 employees that they call associates and is located in 30 countries. The company has manufacturing facilities in the US, Germany, Scotland, Japan and China, and sales offices over the world. Gore has been best known for GORE-TEX. Right from the start Gore has been a team-based, flat lattice organization that favored personal initiative. There are neither traditional organizational charts nor any chains of command. Gore encourages hands on innovation within the organization.

C2. GORE Solving Problems Innovatively:

Company's perception in implementing informal team for problem solving with very little application of standard corporate procedures made Gore reputation to establish as an 'innovator'. As per the press release about Gore, McMillan quoted that this innovative approach had made them to "attract extraordinary people who saw what was going on and got excited about it". (Business Media,2002).

Since Gore competencies lies in its product innovations and the way they do things (Culture).In its problem solving approach, Gore Company accompanied with technical competence need to effectively communicate and blend well to innovate products. Thus people are encouraged to take initiatives by asking questions to themselves and further taking risk in solving problem. Every day in the company new solution and methods are applied which goes beyond the technology. (Gore Case study,2010 )

C3. GORE Communication Process:

The idea of free to communicate with anybody creates trust and also enhance confidence, open mindedness and happy atmosphere.(Nielsen,2004)

Gore created a strong communication through providing the members of the organization to be free in speech to put across their opinions and views and share creative ideas. Moreover Sponsors guidance to their subordinate and continuous learning and implementation cannot facilitate without proper communication system in place. (Gore Case study, 2010).

As Gore specialises in Product innovation. (Maher,2010). Thus product innovation cannot happen until and unless sharing and supporting of these ideas do not take place, as freedom of thought is the most significant aspect in an organization that's mainly into research and development of new and maintenance of old products.

C4. GORE Decision making:

Gore Company does not have a formal hierarchy and everyone is a leader of their own. However, associates of the organization may propose objectives and activities and then seek agreement and team consensus on objectives (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010). This is a clear example of the innovative approach to management where the manager first consults subordinates before reaching the final decision.

C5. GORE Management Control:

Company demanded from its employees to follow the basic ethical procedures in doing business and refrain from illegal activities in the organization. With the relaxed management style, company was doing well. According to Bill Gore having a formal management approach may hinder creativity of employees (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

One of the management control mechanisms that the organization use is when recruiting employees. The company used a 'Sponsor' program, in training and measuring employee performance. The sponsor will measure the new employee's performance, and help in motivating and training the employee. The company was not only seen as not been managed, but also as not having any form of structure. Bill Gore referred to this structure as a lattice structure (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Gore case indicates one of the innovative managements where employees are given the freedom to their work by their own. The company believed that the implementation of such kind of management control has a greater influence in innovation, thus leading to successful organizational performance.

D. Grace Supermarket

Company description:

This is a retail supermarket where we sell all the products which are required by customers in daily life. Since 2004 it was formed with just 16 employees and with limited products, now has improved to have nearly 115 employees with different varieties of products and an average of £3 M per annum. It is a self-service store offering a wide variety of food and household products organized into different departments. The supermarket occupies a large amount of floor space and is located near the residential area in order to be convenient to consumers.


There are different varieties of products in the supermarket like food items, non-food items, alcohols, cigars, soap, shampoos, cosmetics, canned goods, greeting cards, soft drinks, vegetables, newspapers, magazines, electronic items, milk, meat, fish, and all sea foods under single roof.


There are large varieties of products in this supermarket which mainly focus on food items, so it is been consumed by all types on customers. They also focus on cosmetics, bouquet, greeting cards and chocolates so it gathers the attention of youngsters and children. There is a large open space for car parking so that it will be helpful for customers for parking their car safely till their purchase is done.

E. Indicating the Advantages and Limitations of adopting innovative features in Grace Supermarket

Solving Problems Innovatively:


Creative thinking is very essential to solve a problem innovatively. So if there is proper interaction within the employees it makes them to express their own creative ideas and will share their own innovative ideas within the team, which help the management to decide the right solution.

For example, promoting creativity in software industry or research and development organisation can help developing or discovering new products.


Even if there is proper interaction within the team, some employee feels shy to express their ideas thinking it may be wrong or some inferior complex.

It is more time consuming to get a solution from other since everyone gives their own ideas.

Communication Process:


In Gore and Semco the communication is direct within the team members without any mediator in between. This should be followed in Grace Supermarket, which will build tight organisational culture.

It is less time consuming since the information or work is split among the team members having proper interaction which makes job easier.


There might be a chance of conflict and people might do the work in their own way without considering ethical issues.

If the work is not split properly then there is a chance of two or more people doing same work separately.

Innovative Decision making:


Group decision-making is a better resource than an individual acting alone when the decision requires much research and brainstorming of ideas.

Motivates other team members in the team to contribute their ideas since their fellow mates are giving some ideas.


Creates inferiority for those who do not give any suggestions since they feel that their suggestions may be made fun off.

It makes a must for everyone to give some suggestions so some might give some wrong suggestions in order to just give an answer.


Innovation leads to change. As per the Garvin in Harvard business review stated that change efforts fail due to two main reasons: Poor design i.e. for example the way they allocate resources and not explicitly handling the change in behaviors and Poor communication. Without effective communication neither leadership works nor people will understand the right decision when they need to be implemented. (Garvin, 2001).

As per Hamel, the future belongs to those organizations that can easily adapt and create to drive their business and suggesting radical principles need to become a part of DNA of the management. (Hamel,2007).

The implementation of innovation in Grace Supermarket like in SEMCO and Gore is not possible as abolition of hierarchical structure and employee deciding compensation may not go well with all the people and moreover different organization have different norms and ethics which varies. It is not easy to implement the same innovation techniques because it may not suit the surroundings or organization, since it can only happen according to the needs of organization.