This paper addresses several interconnected topics in organizational design and management. It examines why shared information is essential in learning organizations compared to efficiency-focused ones, and how information sharing relates to structure, strategy, tasks, and culture. It then contrasts stakeholder expectations in nonprofit versus for-profit organizations and questions whether nonprofit managers bear a greater stakeholder burden. The paper also explores how employee development goals align with—and sometimes conflict with—goals for innovation and productivity, drawing on real-world examples such as retail bankruptcies and the Wells Fargo scandal. Additional sections address evaluating police department effectiveness and identifying which organizational activities are most and least likely to be outsourced.
Shared information is critical within a learning organization due to the changing dynamics of the overall market economy. Globalization is becoming an increasingly important element of the world economy, and the ability to distribute goods and services across borders ultimately enhances the quality of life for all market participants. To do so effectively, however, requires a large amount of data and learning. Data will soon become the new natural resource of the world — it can empower all manner of activities, from forecasting the weather to predicting when an individual will purchase a vacation. Organizations that can properly harness data and use it for their benefit will succeed within this global economy. To achieve this goal, organizations must be able to obtain, process, and share information within the broader organization. This is important because data can power further innovations and efficiency gains within the technology sector. Companies such as Google, Amazon, Alibaba, and Tencent have demonstrated what innovation and shared information can accomplish (Akhavan, 2015).
An efficient performance organization is also important to organizational success. Organizations must use data to become more efficient in their processes and procedures. Efficiency gains ultimately result in increased revenue, higher margins, and greater profitability for any organization, regardless of industry. Efficiency gains are much more process-oriented compared to information sharing, which is more organic in nature. Efficiency gains result from a deliberate and concerted effort to remove costs from an organizational system. They can also stem from increased productivity through improved operations or a reduction in internal bureaucracy. Information sharing, by contrast, is largely centered on organizational culture, which is often intangible. There must be a consistent culture of innovation and a willingness to share thoughts, opinions, and data. Data itself is one component, but the organization must cultivate a culture that enables people to share their interpretations of that data (Alavi, 2001).
As it relates to other organizational elements, culture has already been addressed above. Tasks, strategy, and structure are also affected. With data, organizations must be far more nimble than their traditional counterparts. This agility allows organizations to quickly shift tasks, challenge conventional wisdom, and devise strategies that are more long-term oriented. Many technology firms exemplify this by sacrificing short-term profits for long-term strategic objectives. In early May, Alibaba announced that it would reinvest all of its incremental profits back into its business operations. In the short term, this lowers profitability, but in the long term it enables the company to maintain its competitive position. The company indicated that these investments would be data-driven and therefore grounded in sound financial and operational reasoning (Bonito, 2008).
Stakeholders in nonprofit organizations differ considerably from those in for-profit organizations. The primary difference lies in how management is compensated and evaluated. In for-profit organizations, many managers are evaluated on financial and economic measures such as per-share capital appreciation, dividend growth, return on invested capital, and earnings-per-share growth. Their overall compensation is based in large part on these metrics, which leaders actively manage toward. Nonprofit organizations, however, often use nonfinancial measures to evaluate success. These may include the number of cancer patients treated, vaccinations administered, or reductions in mortality rates. Many outcomes in the nonprofit sector are intangible and not directly tied to financial performance. Instead, progress is measured from a societal standpoint — by how much the overall quality of life or civilization has improved over time.
Nonprofit managers do not necessarily have to pay more attention to stakeholders than business managers do. Both types devote considerable attention to stakeholders because their roles demand it. Both nonprofit and for-profit entities must engage with governmental organizations, communities, employees, and investors, among others. Each must work to accommodate and satisfy these groups. The primary difference lies in what stakeholders actually demand. The time commitment is roughly equal, but the nature of those demands differs. One sector may seek to maximize shareholder wealth, while the other seeks to maximize community benefit. Both have stakeholders; both face demands — the distinction is simply in what those demands are.
Employee development and innovation are more interconnected today than ever before. Employees must continually grow, develop, and innovate, or the company risks obsolescence. Technology has created a sustained imperative for continuous improvement. The retail industry provides a cautionary example: it was extremely slow to adapt its offerings to new consumer trends and technological demands. Employees were not trained to integrate the physical store with an online environment, and the omnichannel experience at many established department stores could not compete with newer, more innovative operators. As a result, the retail industry witnessed a wave of bankruptcies, including Sears, J.C. Penney, GNC, Hertz, and Neiman Marcus. The industry failed to develop its employees and, consequently, failed to innovate. Retail is not alone in this regard — the newspaper, energy, and transportation industries have also struggled to innovate. Traditional taxi services face extinction due to companies like Uber and Lyft, and conventional energy sources are increasingly being replaced by renewables. Innovation continues at a rapid pace, displacing many of the world's most established industries (Fisher, 2006).
The goal of employee development is directly related to the goal of productivity. For most industries, productivity represents the primary competitive advantage a firm holds over its peers. Productivity allows certain firms to produce or sell more services per employee than others, indicating a sustainable competitive advantage in the form of brand recognition, distribution network, or a low-cost operating structure. In either case, the goals of employees should directly correlate with the goals of the organization as they relate to productivity.
These goals can conflict with organizational objectives when they are not strategically aligned. The Wells Fargo scandal illustrates this clearly: employees were opening fraudulent accounts to meet aggressive sales goals and quotas. In this case, the organization's stated commitment to clients was not reflected in actual employee behavior, revealing a dangerous misalignment between individual incentives and organizational values.
"Data-based approach to assessing community policing"
"Which activities are outsourced and which are retained"
"Scripture on collaboration and organizational sharpening"
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