Building the Integrated Company

Malcolm A. Birkin

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781138715912
• eBook ISBN: 9781351769594
• Topic: Business
• Subtopic: Business General
• Index: Business

This title was first published in 2000:  Global competition is increasingly impacting on even the most isolated of companies; the only way for any company to sustain competitive advantage is by tapping into the single remaining area of great potential - the management of people. If we want to be an above-average company, we will need an above-average ratio of above-average people who perform at above-average levels. None of which will happen without above-average levels of management. Malcolm Birkin's Building the Integrated Company offers a model for exploiting the human potential within organizations. This potential is one which, in previous decades, through an absence of focus on business basics and an adherence to mistaken ideas about sustainable competitive advantage, we have contrived to turn into all-too-limited performance. The first stage in any new learning process is to unlearn the misplaced concepts and bad habits we have developed. Section One of the book describes and contrasts the similarities and differences of American, European and Japanese management and then describes the characteristics of the Integrated Company, which has absorbed and perfected the best systems and philosophies from around the world. Anyone seeking to follow this lead needs to be able to distinguish the realities of these management systems from the myths. Section Two is built around a series of 13 detailed and scored questionnaires, containing over 240 individual questions, enabling the reader to assess every aspect of their business, from management focus to the behaviours of the workforce, against the Integrated Company model. Section Three, the largest and most important section, deals with integration, addressing the practical implementation of the systems and philosophies in a clear, logical and hands-on manner. As the name suggests, the Integrated Company is a holistic model, involving every aspect of the business. Nevertheless, managing people - the unlimited potential - remains the most complex

1 The integration of international management

The Integrated Approach-A Single Route to Building Competitiveness through People

The dramatic increases in the volume of global business, now estimated to involve over 50,000 companies and to be worth upwards of seven trillion US dollars annually, have placed incredible competitive pressures upon international companies. At no time in history have the challenges and opportunities been more intense. This 'pressure cooker' of international competitiveness has caused companies to look very carefully at the way they operate, and to try many different routes to increase their global competitiveness. Most believe that organic growth driven by efficient manufacturing plants and good products or services, is the route to be taken. Increasingly, others have decided that whilst big may be beautiful, being colossal is more competitive – this has created 'merger mania', and with it an array of acquisitions.

The Introduction stressed that integration is the key to dramatically improved competitiveness as well as the key to successful mergers and acquisitions. All have improved profitability through improved competitiveness as their objective, and need to concentrate upon strategy, culture, people and their integration, if they are to succeed. The objective of this book is to show how this can be done.

The direction of approach was outlined in the Introduction as first, to describe in Chapters 1 and 2, second, to assess in Chapter 3, and finally, to integrate in the remaining chapters. The first two chapters describe the background to our thinking, how it arose, and the ways in which we will put it to use in the Integrated Company.

Having completed the all-important description of the characteristics of the Integrated Company we move to Chapter 3, in which we can assess the level of development of your company, and so ascertain what needs to be done to reach the level of the Integrated Company. The remaining chapters describe the mechanics of implementation procedures and philosophies, leading to integration.

Global competition

The increasing demands of global competition have forced many companies, particularly those in the manufacturing field, to improve their efficiencies very considerably. These companies have learned from the best around the world, and many have achieved 'world best practice' in their levels of output, low inventories, just-in-time or flow manufacturing techniques, lower manufacturing costs and much improved quality.

Despite these improvements, the soft issues of culture and people have not been addressed, either at all or to anything approaching the level which international competitiveness requires. They have failed to achieve the integration of the objectives of the employees with the objectives of the company.

Many companies which have made an excellent job of raising their manufacturing standards complain that their employees remain clock-watchers who down tools immediately the buzzer sounds, and head for home. Obviously such lack of commitment will not make those companies into global winners and will fail to integrate the company into a committed entity which will move forward continuously in both good times and in bad.

Similarly, many companies led by those in the service sector, have appreciated the need to upgrade customer service and in general, the way customers and their needs are perceived and responded to. This realization has unleashed a host of upgrading programmes seeking to have the employees regard the customer as king. Some of these programmes have been beneficial, but in general, they have dismally failed to concentrate upon the most important factor, namely the people within the company.

It is self-evident that if you want to make the customer feel as though they are indeed number one when dealing with your company, this will not be achieved with employees who are not very directly integrated into the objectives of the company, and are themselves held in low esteem. Most such programmes have attempted to upgrade the status of the customer, whilst leaving the status of the employee unchanged. Since it is the employees who are the interface between the customer and the company, and are responsible for the level of service and quality which the customer will receive, failure to upgrade the status of the employees to at least that of the customer will cause all customer service and customer upgrade programmes to fail.

Only people make things happen – this maxim requires that total company-wide employee integration must be a central theme in all upgrading programmes if these programmes are to be successful. There are two major reasons why companies have not made much progress in achieving total company-wide objective integration: first because it is not easily achieved, and second because it cannot be achieved, as many companies have wrongly assumed, by applying 'add-on' components.

Not only is the problem far too complex to be solved by using any add-on technique, it requires the successful company to have a receptive corporate culture, an integrated strategic plan, to be globally process-oriented, and above all, to have a very different attitude towards people than that engendered by traditional 'human resources' thinking.

In brief, we must change the company philosophy over time, to make the company as effective and efficient in handling people as it has already become in manufacturing its products.

Many of the failed attempts to solve the 'people commitment' problem have relied upon financial reward in varying degrees, but have had limited success. There clearly must be a balance between financial reward for aboveaverage contribution with what it takes to create the feeling that 'this is a great, stimulating and satisfying company to work for'.

The Integrated Company

In creating integrated employees, we must acknowledge the global realities of high levels of integration and interdependence which exist between countries as the world becomes an integrated economic unit. Companies seeking to become internationally competitive utilize integrated management practices which have been developed from the best of world practice. No competitive company, of any nationality, now uses only American, or European, or Japanese management systems and practices alone, but have integrated the best practices from global management systems into their operation. To be effective these practices must include management philosophies, in addition to the day-to-day mechanics of management. An excellent example is the turnaround of the American auto industry which many regarded as something of a dinosaur seemingly incapable of change. In fact it changed dramatically using the best of international management practices.

It is only companies having this level of international integration which can hope to achieve the level of employee integration which global competitiveness demands. Only such companies will have developed the appropriate culture, structures and attitudes to people in which employee integration can happen. This means that we need to start by upgrading, changing, or modifying the relevant aspects of the company so that it can achieve this level of management integration.

What do we mean by the ‘Integrated Company’?

If the company has recently undergone a merger or acquisition then the need to integrate is obvious – the most common reasons for failing to integrate were given in the Introduction. There are two basic tenets essential to becoming an Integrated Company:

1. A company which has integrated the objectives of the company with the objectives of its people through structured operational unity.
2. A company which has integrated the best of international management systems, philosophies and practices, to enable it to...

Table of contents

• Cover
• Half Title
• Dedication
• Title
• Copyright
• Contents
• List of figures
• List of tables
• List of boxes
• Foreword
• Acknowledgements
• Introduction: Building the Integrated Company
• 1 The integration of international management
• 2 The characteristics of the Integrated Company
• 3 Assessing your company – how integrated are you?
• 4 Corporate/competitive strategy, its creation and its link to corporate culture
• 5 Implementation, people commitment and interlinking
• 6 Integrating people
• Index