From the Smokestack Era to the Digital Era

The role of management has changed over the decades as the paradigm shift from manufacturing to services and then to the emerging view of organizations as a holistic whole interacting with its environment in a symbiotic manner. This paradigm shift has engineered and engendered a corresponding shift in the management thought and practice.

For instance, it is now common for management experts to stress on the organization and its interaction with its environment as opposed to a machine like organization that is standalone and functions on its own. It has also changed the importance given to employees who are now treated as key sources of competitive advantage rather than yet another factor of production.

The changing management paradigm has come about mainly because of the change from the “Smokestack” era to the “Digital Era” which means that the industrial paradigm is giving way to a conception of the organization as part of a system as well as information replacing machines as the central pivot around which organizations function.

In other words, the industrial organization that is characterized by the smokestack or the picture of factories and plants manufacturing goods and services has now given way to companies that use computers and the digital highway to perform their activities.

Consequences of the Paradigm Shift

This changing paradigm has been concomitant with the increasing globalization of the world economy, which has meant that corporations now operate across the world rather than in their own countries. This means that managers and management need to adopt a global outlook and at the same time execute the functions locally, which has given rise to the term, “Glocalization” that has been popularized by the noted expert, Thomas Friedman.

The paradigm shift has also resulted in organizations adopting CSR or Corporate Social Responsibility and embracing diversity, which means that social and environmental concerns apart from inclusivity and tolerance are the buzzwords for managers.

Further, the rise of the Knowledge Worker means that information has become the raw material that is transformed through the organizational processes rather than physical resources that are transformed through machines. Of course, this is not to say that manufacturing is dead.

Rather, the point here is that the services sector that includes the IT and financial services commands the lion’s share of the economy when compared to manufacturing. This has also meant that the emphasis on machine like bureaucracies has given way to systems approaches to management as the shift from manufacturing to services means that organizations are flatter, leaner, and fit than their predecessors.

Organizations of the Future

The paradigm shift from the mechanistic model of organizations to the systems view has also meant that the organization of the future would be a shape-shifting one that has the ability to adapt to new market conditions quickly and rapidly than before.

The advent of the internet and the increasing use of social media have meant that organizations can no longer have the luxury of taking their time to respond to market conditions and instead, the fastest, cheapest, and most innovative product wins in the market. This has again resulted in a shift from managers as bureaucrats to that of an individual who empowers and enables the workforce.

The point here is that the rigid rules prescribed by management experts of the 20th century no longer work in the workplace of the 21st century where management is expected to be more innovative, inventive, and creative if it has to ensure that its companies stay ahead of the pack.

Concluding Thoughts

Finally, the paradigm shift has also meant that more women are present in the workforce and the composition of the workforce is more diverse. This means that management can no longer be an old boys club and instead has to shatter the glass ceiling to ensure that everybody has a chance to make it to the top instead of a few.