The Necessary Nature of Future Firms
Volume 17, Number 4 Article by Sunil Kumar Singh December, 2005
The Necessary Nature of Future Firms: Attributes of Survivors in a Changing World : By George P Huber, Response Books, 2004, pp. 307, Price: Rs.650 (hard cover). :
In the late 1990s it was commonly understood by managers that the services sector was different from the manufacturing sector, the two operating on different philosophies. It was also understood that manufacturing needed more standardisation than services. But now, with the business process outsourcing boom, there has emerged another services sector that is adhering to ‘Taylorism’ more strictly than F W Taylor himself would have imagined. The nature of firms is changing so rapidly that managers are often caught unawares, prisoners of their self-constructed fads/realities. Organisations and individuals often forget that the seeds of the future lie in the present.
G P Huber, one of the most well regarded names in organisational learning, has used the moderate ‘population ecology view’ in conceptualising this book. The author has two grand objectives in the book: to describe the nature of future firms and to inform managers (especially top managers) about changes they might want to make to prepare their firm for its future. The author has used the vast repertoire of his own research of over 20 years, the findings of organisational researchers, and the description of the future given by over 700 executive MBA students to describe the nature of future firms. The key ingredient which flows through the book is the congruence of higher order living systems (those governed by human cognition) with their environments. The author has argued that it is this congruence that will help organisations survive in future and decide upon their characteristics. This book also has a positivist orientation, as the author has vehemently argued in favour of the codification of the knowledge generated by organisational researchers in the last century. Such research would yield guidelines for the characteristics of the future firm if not predictions.
This book is structured in nine chapters. In the structuring of the chapters the author incorporates the interesting innovation of an ‘interim summary and transition’ along with a ‘chapter summary and transition’, which helps in maintaining the flow and telling readers what is coming next. The first eight chapters have been organised into four parts, namely: firms and the nature of future firms; managing the future environment and decision making in the changed environment; organisational learning and knowledge management in future; and dealing with future conflicts. The ninth chapter is an extremely brief recapitulation.
In dealing with the properties of the future and future firms, the author contends that firms must be congruent with their environments and future firms will be different from today’s firms because their environment will be different. Managers often perceive change through the lens of the popular press, which more often than not, excites but fails to aid enlightened execution. Further, in the flood of information generated by the popular press, two items are missed out – thoughtful analysis of the root cause and broad ranging and well grounded description. Moreover, managers often rely on good correlations and not on good and coherent explanations to understand the changing parameters of the environment. The author asserts that in this ever-changing environment, it is not dynamism that is important but the rate of change of this dynamism or ‘accelerating change’. This ‘accelerating change’ is the nature of future firms.
The second part of the book dwells on the way the future will be sensed and interpreted and the way decisions will be made. The author avers that the environmental elements will remain the same i.e. scientific knowledge, technologies, complexity, dynamism, and inter-firm competitiveness; the only difference will be that each will be ‘more’ so. The addition of one simple adjective will make a huge difference in the way ecological dynamics operate at the organisational level. In the past, environmental congruence was maintained by recalling the past; in present times managers have been successful in using sensing strategy for environmental changes; but in the future managers will have to use sensing and interpretation together, coupled with sophisticated analytical tools. Intelligence gathering is seen as one of the most critical tools used by the organisations of the future in managing ‘accelerating change’. The implication of the changed approach in sensing and interpreting is seen as a change in the decision processes and the frequency of decisions. For future firms, scope and speed of decision making will be most critical.
The third part of the book is close to the author’s heart. Most of Huber’s work has been done in organisational learning and knowledge management. But here, the author is guilty of the same lapse that he has attributes to the popular press, that of creating excitement but failing to give a broad ranging and well grounded description. Despite the emphasis on the sharing of knowledge, the role of experiential and team based learning, and the effect of the changing nature of firms on organisational learning, the author seems to keep the discussion at the level of a fad.
The fourth part of the book is a response to the contemporary problems faced by firms and does not seem to be part of the main agenda i.e. describing the nature of future firms. Here issues like change-efficiency conflict, change-commitment conflict, efficiency-commitment conflict, flexibility-efficiency conflict, downsizing problems etc. have been discussed and prescriptions for their resolution provided. Again the author seems to have given in to the managerial preferences of normative-prescriptive literature.
The major weakness of this book lies in the second half where the author seems to have catered to the reading habits of a managerial audience and in the process, faltered on the agenda which he set in the first chapter i.e. giving a broad ranging and well grounded description. While this book is clearly for practitioners, there are some elements (like the discussion on intelligence gathering) that may provide some insights for academic readers.
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