Person Dependence in Organizations and Steps to Manage or Reduce the Same
Some Real World Examples of Person Dependence and its Perils
A common problem across organizations in the contemporary corporate world is about person dependence and the ways and means to manage person dependence. The term person dependence refers to the phenomenon wherein the organizations are overly dependent on individuals for their success and even for day-to-day operations.
For instance, companies like Apple and Microsoft were dependent on their founders (Steve Jobs and Bill Gates respectively) to find new business models and to come up with innovative ideas that are game changers for them.
Similarly, in India, Infosys is heavily dependent on its founders for inspiration and ideas for growth as is evident from the troubles that the company has been going through in recent times with the retirement of its founders. These are some of the big-ticket companies that are overly dependent on individuals.
The banks like JP Morgan and Goldman Sachs are also examples of companies where there is too much reliance on the CEOs and the top management without which they flounder for lack of guidance and are adrift without direction.
The point here is that excessive dependence on individuals is fraught with risk as we live in an uncertain world where anything can happen to anyone anywhere.
Person Dependence in General in any Organization
On an operational level, there are many companies that are dependent on individuals at the middle management level without whom the success of the organizations is in jeopardy. Further, many project teams in organizations often depend heavily on key team members or project managers without whom the project teams cannot function efficiently and profitably.
The key aspect here is that organizations must reduce their person dependence because the individuals might quit, take emergency leave because of personal exigencies, and in the extreme cases, might even die which means that once the individual is not in the picture, the organizations that have learnt to depend on them would be directionless.
Apart from this, there are many startups and SMEs (Small and Medium Enterprises) where the entire setup is run by a few individuals or a single individual and as mentioned earlier, if any of the risks come true, then these companies are in the danger of folding up.
On a personal level, many of us would have visited hospitals, service providers, and legal offices where a single doctor, an engineer, or a lawyer holds forth and when we visit them for assistance, if that person is not around, our work is not done or is postponed.
How to Reduce Person Dependence
Therefore, there is a need for any organization, big or small, to develop contingency plans in case of the key individuals being absent and this is a critical and crucial aspect of business continuity management that every organization must put in place and plan for.
There are many multinationals like Citigroup, Fidelity, and P&G that make their employees go on mandatory leave for a few weeks every year so that the rest of the teams and the organization learns to operate without them.
The rationale being that any individual is replaceable and is not indispensable when it concerns the organization. This practice along with having continuity plans in case the key employees or for that matter any employee is absent from the scene, is essential in this 24/7 real time business landscape where the need of the hour is for the show to go on despite any setback.
Moreover, person dependence is dangerous as the other employees learn to take it easy secure in the knowledge that the individual on whom they depend on a day-to-day basis would step in case of any crisis.
Finally, the requirement of many risk management agencies and process maturity certification institutions is for organizations to prove their person independence for them to certify the organizations as having managed risk or achieving process maturity. This is the reason why many companies in recent times have started the task of making themselves person independent.
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Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
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