Introduction to the Object-Oriented Organisation
Throughout our extensive experience working with companies worldwide, we have encountered numerous organisational challenges stemming from the effects of globalisation, the widespread distribution of work, and the increased collaboration with individuals from diverse cultures. This raises the important question: to what extent should a company prioritise promoting its own corporate culture at the expense of fostering cultural diversity?
Drawing upon our comprehensive research and the invaluable insights garnered from Gugin surveys, it is evident that we must address these dilemmas and find effective solutions. In the context of a global organisation, how can we strike a balance between maintaining control and consistency across the entire entity while allowing different cultures to express themselves?
Furthermore, how can we ensure that these unique cultural perspectives are not only acknowledged but celebrated within our global organisation?
A lot of cultural friction is developed because we often try to promote that there is only one right way to do things. And a lot of cultural friction is also developed in the opposite scenario where a company is afraid of promoting its corporate culture on its subsidiaries. It is very challenging for most companies to find the balance, which is why Gugin’s Cultural Diligence process is so valuable.
When I did classes on creative problem solving many years ago I learned that we could solve problems in three different ways. We can solve problems inside the existing paradigm, we can stretch the existing paradigm or we can shift to a completely new paradigm.
When it comes to addressing the issues global operating companies are facing today I think we have reached the point where the existing paradigms can’t be stretched any longer.
Here is a good example:
Many years ago when South West airlines in California decided that they wanted to become the most efficient airline they realised that they had to think out of the box in order to become best in class. Comparing themselves with other airlines would never enable them to become the best so they had to think of something else. A key to airline efficiency is to reduce the time the aircraft spends at the airport. Instead of looking at other airlines South West Airlines decided to look at a Formula 1 pit stop to see if they could learn anything from work processes there. Every second wasted in a Formula 1 pit stop can be crucial. If South West Airlines could adopt best practices from a Formula 1 pit stop they had a fair chance of becoming the most efficient airline. They succeeded.
In this article, we will propose an organisational model that is a paradigm shift as well, but it addresses the key issues I have identified earlier for achieving organisational effectiveness.
Introduction to the object-oriented organisation
What does object orientation mean?
Object orientations originate from object-oriented technology and object-oriented programming from the world of software development. It is no new invention as it originated to 1960s in Norway where it started in the IT industry. As IT solutions became more and more complex and had to handle more and more data in a flexible way and still preserve the integrity of the data it was necessary to invent a new technology to deal with that. Object-oriented technology was the answer to that problem.
The challenges in software development and in managing global businesses are quite similar. In a software program, data is the most important asset. In most modern companies, knowledge in different forms is the most important asset. Traditional programming languages couldn’t deal with the increased complexity without introducing huge overheads. In global companies, the traditional way of organising people is ineffective because we have no way to deal with diversity and no proper way to protect the most important asset of a company – its knowledge. So the challenges were similar, but so far only the software industry had found a solution. That gave me the idea to explore the possibilities of developing and implementing a similar system as a way of organising and managing a globally operating company.
Object-Oriented technology is unique because it protects its data effectively and only allows authorised methods or functions to access and manipulate the data. In an organisation that would, for example, correspond to that only local managers managed local people or you only tell a team what to do and what you expect them to return, but otherwise, don’t interfere with how they do it. An object in the object-oriented technology has three characteristics namely inheritance, encapsulation and polymorphism. These characteristics will be explained in detail +below, as the same terms will be used when I apply the concepts to organisation theory.
Class
A class is a conceptual framework from where the objects are instantiated. A class description tells about which data it holds and describes all the ways the data can be entered and manipulated. In a company is can i.e. be a production unit with the machines, descriptions of where to get the raw materials and where to send the final product. It can also be an HR department in a subsidiary with a description of the tasks they have to carry out, what kind of reporting that have to deliver to headquarters etc., but not a word about how that task shall be carried out or how they will collect the information for the reports.
Inheritance
Classes can be organised in a hierarchy and inherit attributes from their parent classes. In software, you can have a class called bank account holding all the general characteristics of a bank account. That class can have child classes for all the different kinds of bank accounts the bank has i.e. savings accounts, credit accounts, pension etc. All the generic attributes will be inherited because they are common to all types of bank accounts while other attributes can be added or modified to serve the specific need. Let us say the interest rate is a generic attribute – with a different value for the different types of accounts of course. If you want to increase the interest rate with 0,5% on all types of savings accounts you can do that at a generic level and it will automatically be deployed to all the children’s classes.
An organisation might have an HR department or HR function in each country where it is operating. They all perform the same
functions. In a traditionally organised company, they will also perform these functions in almost the same way. In the object-oriented organisation, they perform the same functions but for some of the functions, they have the freedom to perform them in a way that is more suitable to the local culture, customs and legislation. In this example, there will be a parent class describing all the data and the functions of the HR department shall perform. Local countries or departments can choose to override some of the functions with some making more sense in the local culture or in a way that will improve effectiveness. The essence is that it is the same functions with different implementation and the headquarter doesn’t interfere with how the implementation takes place in each country or department.
An example could be the implementation of promotion policies. In some countries, it makes sense to promote the best performers, in others the employees with the most seniority and in others the employees that fit into the equal opportunity policies.
Encapsulation
Encapsulation conceals the functional details of a class from objects that send messages to it. When used in software development it means that the data are protected from direct manipulation and can only be accessed and manipulated through the functions of that particular class. Using the example from before. Typical functions of a savings account are a deposit and withdraw. In an object-oriented system, you send the message deposit or withdraw to the object. Inside the object, it handles the transaction; adjusts the balance of the account does the interest calculation etc. It is all hidden from you who access the object. The data is encapsulated and as a user, you have to rely on that everything is handled, as it should be.
In organisations, the data you want to encapsulate will usually be pieces of knowledge, norms and values, traditions, or anything else that is specific to a project, group or culture. An example can be a customer service group in a company. They handle customer requirements in a structured way and have information about all the customers. The top management cannot interfere directly with how the customer service is performed, but only assess whether or not they fulfil the requirements for quality, response time, cost etc. How they do it internally in the department is entirely up to the department manager and his or her team.
Polymorphism
Polymorphism is probably the attribute of an object-oriented organisation that can boost the organisational effectiveness the most because it directly deals with the issues of multiple cultures and their underlying norm, values and basic assumptions as described earlier in this dissertation.
Polymorphism means that different objects or classes can have different implementations of the same function. Let us say we have two classes, both with the function add. We send two numbers to both of them; let us say 2 and 3. One class returns 5 and the other 23. They both added the numbers to each other but in two very different ways.
Polymorphism is a great enabler for embracing cultural diversity in global organisations because it gives us the opportunity to do exactly the same things in many different ways. Polymorphism is particularly applicable when it comes to motivation and reward. That is because we feel motivated by so many different factors depending on our culture, our age, gender etc. that it is impossible to make a one-size-fits-all all solution. So as a beginning, we can start letting the subcultures within the organisation implement their own motivation and reward systems and then later move on to the motivation and reward system I have described in one of my books.
Another example is the way that we organise people locally. In individualistic cultures, the matrix organisation fits well because there is a clear distinction between personal responsibility and project management. It fits well because the employee’s expectations about the leader’s role are that the leader should only deal with or get involved in work-related issues. When companies deploy a matrix organisation they run into problems when the implement that type of organisation in cultures where there is a preference for having strong relationships or family culture.
In these hierarchical, in-transparent cultures the expectations about the leadership role are completely different. The leader is perceived as a father who takes care of everything about the employee. A matrix organisation confuses managers on all levels as well as the employees in these cultures. If an employee has an issue he or she wants to discuss with their leader they don’t know who to turn to if they are organised in a matrix. So although it might seem old-fashioned hierarchical organisations might work better in some organisations or parts of organisations in some countries.
A global organisation shall be open to letting local organisations organise themselves in the way that suits the local culture, norm and values in the best possible way. No matter how they are organised they will respond to the messages the headquarters or others send out but the way that they carry out the tasks varies a lot from one entity to the other.
It is not only between different national cultures it makes sense to consider polymorphism. The integration of a company after a merger or acquisition can vary from a very loosely coupled affiliation to total assimilation. If an acquired company is forced to give up its corporate culture with all its values, norms and traditions completely it will lower the productivity dramatically. A company that has been acquired often has to give up almost everything it has that ties the employees together. It is usually done for the sake of efficiency because some people believe – usually in headquarters – that if everyone is doing the same things in the same way, they will save a lot of money. But in my experience, it is exactly that attitude that results in that 2/3 of all mergers or acquisitions fail to meet their original objective.
If polymorphism was a part of the management philosophy an acquired company was encouraged to maintain its own culture untouched, at least in the beginning. The headquarter or holding company can add some new functions about reporting i.e. growth, customer satisfaction, revenue, turnover etc. but refrain from interfering with how the acquired company meet the targets. Over time things can and will change gradually.
Summarisation
In both software development and organisational development, it has been a challenge to deal with the increased complexity and the need to be able to change fast. I have made comparisons between the two worlds and suggested that we try out some of the inventions from the software industry in organisational development. The object-oriented organisation can be seen as a further development of the adhocracy.
The advantages over the adhocracy are that we can promote a high degree of diversity because each class can implement its own implementation – if allowed. We can still maintain a high level of consistency because of the hierarchical structure of the classes and the inheritance function where some functions can be modified locally, while others remain the same globally. For example, you might want to have different implementations of HR policies in different countries but keep the quality control function consistent and uniform.
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