I am small business owner with a central office in one of New Zealand’s major cities. I want to consider decentralisation as way to improve performance and profitability. What advice do you have for me?
Decentralisation was fashionable in the late 1970s and has remained on enterprise agendas ever since. I believe the intent of decentralisation should be to separate business into smaller units capable of becoming self-sustaining profit centres. move to decentralise will require some careful analysis on your part. That analysis should consider foresight planning, forward objectives, company strengths and weaknesses, opportunities and risks plus full analysis of projected cash flow.
The British magazine, The Economist, recently called decentralisation “the process of distributing power away from the centre of an organisation”.
So when you do this you need to carefully reflect on just how much power should be decentralised and how much empowerment you will give to the colleagues you will employ in your decentralised operations.
American management writer Tom Peters said in the mid 1990s that after watching organisations thrive and shrivel, decentralisation was at the top of his list of management strategies to “loosen the reins, to allow thousand flowers to bloom and hundred schools to contend”. It was, he said, the best way to sustain vigour in perilous times.
Well planned and structured decentralisation will encourage innovation and entrepreneurship within your company and ultimately lead to improved profitability.
Our company talks lot about ethics, can you please tell me how this relates to business?
For me, ethics are how we act toward each other. Being good, trustworthy, reliable, fair and empathetic. I don’t know of any formal sets of rules on business ethics, but I am aware of how important they have become in our life. Ethics are generally subjective and mostly about morality.
Peter Drucker (Management – Tasks, Responsibilities and Practices, 2003) said the first responsibility of professional was spelled out clearly, 2500 years ago, in the Hippocratic oath of the Greek Physician: primum non nocere – “above all, not knowingly to do harm”.
What Drucker was clearly saying to us all is that we have responsibilities to carefully reflect on our proposed actions, to contemplate our words and how we articulate those words, and to ensure we personally uphold appropriate behaviours that set an example to our colleagues and all those we relate to in our work and in our communities.
Business ethics and social responsibility are often linked because social responsibility is significant aspect of the discipline of operating ethically. I believe that just as health and safety is responsibility for all staff members, so too is operating ethically. Acting ethically isn’t just for company owners, the board of directors or senior management. Acting ethically is for every single individual who is responsible for his or her own actions.
For all stakeholders this means consideration must be given to how we interact with each other. It is also about embracing our rich diversity, not accepting credit for what may have been done by others, maintaining confidentiality, and telling the truth (my recipe for successful selling).
Finally, being ethical at work or in your business is continuum and must be part of everyday life. It is never okay for business to be unethical.
Kevin Vincent, FNZIM, is Christchurch-based business consultant. [email protected]
