In contrast, organic organizations focus on generating revenue (i.e., making a profit) and this focus leads them to stress the need to create innovative products. Employees are valued for their creative talents and are given free rein to generate new ideas.
An excellent example of a mechanistic organization is that of Wal-Mart. Wal-Mart boasts that it offers consumers the lowest possible prices, all of the time. The focus is not on innovative products -- most of the items can be found in other stores -- but upon keeping prices low. Wal-Mart stores are run in a highly controlled fashion, with little variation between stores even in terms of how customers are greeted. Employees are paid little and are treated as expendable -- their low wages enable prices to remain rock-bottom. "Wal-Mart customers want the lowest possible prices on the things they use every day. And Wal-Mart delivers, with reliably rock-bottom pricing and fantastic product variety. To afford it, the company under-delivers on other parts of the retail experience, such as sales support and ambience" (Frei & Moriss 2012). Wal-Mart has very little interest in optimizing the customer buying experience, much less listening to disposable employees about how to improve the store. It has been wildly successful by keeping things cheap, despite a great deal of media criticism of its store policies. The span of control of management is very direct to make this model work and is highly formalized and centralized. Wal-Mart's model has worked, thanks to its sheer size, but smaller budget retailers have struggled if their ability to compete on price is shaken, given they have little else to offer.
In contrast, the search engine company Google focuses on encouraging employee creativity...
Employees are even given personal time to come up with their own projects and pursue them. New hires are carefully screened and vetted, and once at the company, they are supported with a wide variety of benefits and 'perks' designed to keep them as happy as possible (Emerson 2012). Employees work in small teams and there is little observance of hierarchy. So long as someone has a good idea, the company executives at Google are willing to listen. Controls are relatively relaxed and there is a high degree of trust placed in employees in this informal, decentralized environment. Google, like Wal-Mart, has been extremely successful, although it is an open question if this business model would be feasible at a different type of organization with less intellectually-driven employees.
References
Drucker: The father of management theory. (2013). Success. Retrieved:
http://www.success.com/articles/1115-peter-drucker-the-father-of-management-theory
Emerson, R. (2012). Google's best benefits. Huffington Post. Retrieved:
http://www.huffingtonpost.com/2012/01/30/google-benefits-employee-perks_n_1242707.html
Frederick Taylor and scientific management. (2013). Net MBA. Retrieved:
http://www.netmba.com/mgmt/scientific/
Frei, F & Morriss, a. (2012). To offer great customer service, dare to be bad. Forbes.
Retrieved:
http://www.forbes.com/sites/forbesleadershipforum/2012/03/02/to-offer-great-customer-service-dare-to-be-bad/
Hershey Blanchard situational leadership theory. (2013). Mind Tools. Retrieved:
http://www.mindtools.com/pages/article/newLDR_44.htm
