Table Of ContentMaking Strategy and
Organization Compatible
Claude Michaud and Jean-Claude Thoenig
Translated by
Malcolm Stewart
Making Strategy and Organization
Compatible
Originally published as Strategie et Sociologie de l’Entreprise
by Village Mondial/Pearson Education
Mak ing Strategy and
Organization
Compatible
Claude Michaud
Jean-Claude Thoenig
Translated by Malcolm Stewart
© Village Mondial/Pearson Education,Paris 2001
Translation copyright © Malcolm Stewart 2003
Softcover reprint of the hardcover 1st edition 2003 978-1-4039-1123-0
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C
ONTENTS
List of figures viii
List of tables ix
Preface x
Chapter 1 In Praise of Complexity 1
1.1 How to Make Things Simple in a World That
is Not Simple 1
1.2 Strengths and Weaknesses of Organizational
Simplicity 3
1.3 Why do Hybrid Models Offer an Advantage? 5
1.4 Managing Complexity 7
1.5 Shared Organizational Action Languages 9
Chapter 2 Building Bridges Between Management and Strategy 11
2.1 Strategic Visions are Not Easily Put Into Practice 11
2.2 When the Gap Between Ambition and Action
Becomes Deadly 14
2.3 Immediate Monopolistic Rents and Future
Monopolistic Rents 15
2.4 The Need for Regeneration 18
2.5 When Hybrid Solutions and Complex Models of
Organization are Needed 20
Chapter 3 The Organizational System 24
3.1 Sharing Common Knowledge as a Coordination
Mechanism 24
3.2 Strategic Options 28
3.3 Organizational Models 31
3.4 The Dynamics of Renewal 36
3.5 The Cognitive System Keeps Hybrid Models Together 42
Chapter 4 Cognition as a Major Asset for the Firm 47
4.1 Shared References 47
4.2 Interpretation for Action 50
4.3 A Definition of Language 53
4.4 What Language is Not 55
4.5 The Role of Language in the Organization 57
v
vi Contents
4.6 The Importance of Mutual Understanding 59
4.7 Endogenous and Exogenous Languages 60
4.8 Foresight 62
4.9 Common Knowledge 63
4.10 Socialization and Trust 66
Chapter 5 Agro:A Company in Transition 69
5.1 A Multinational Faced with Hypercompetition 69
5.2 Shared Cognition In Action:The AIG 72
5.3 Cognitive Discontinuities at Work 85
Chapter 6 Managerial Fine-tuning 95
6.1 Dealing with Contradictions 96
6.2 Setting Out Principles for Action 102
6.3 Principles Are Not Enough 105
6.4 Transgression or Compromise? 107
6.5 Behaviours Inducing Paradoxical Effects 111
6.6 The Dilemmas of Complexity 113
6.7 When Cognitions Become Confused 115
6.8 Implementing Two or Three Organizational
Models at the Same Time 120
6.9 The Usual Nightmare at the Top 124
6.10 Trusting to Luck 130
Chapter 7 The Role of General Management 136
7.1 The Cognitive Architect of the Business 136
7.2 The Tools of Cognitive Management 139
7.3 The Quest for Foresight 145
7.4 Discretionary Codification 149
7.5 Tacit Accumulation 150
7.6 Explicit Articulation 151
7.7 The Strength of Cognitive Communities 154
Chapter 8 Cosmophar:Excellence in Tacit Accumulation 157
8.1 The Keys to Success 157
8.2 New Challenges in a Global Economy 161
Chapter 9 Where Management and Strategy Strengthen One
Another 166
9.1 Four Fundamental Guidelines for Managing
Complexity 166
Contents vii
9.2 Management,Firms and Competition 173
9.3 Some Brief Theoretical Implications 178
Appendix 1 How to Observe and Analyse Action Languages 181
Appendix 2 Distribution of Functions between Head Office and
Units within Agro 186
Appendix 3 Simplified Organization Chart of AIG 187
Bibliography 189
Index 193
L F
IST OF IGURES
2.1 The exogenous regeneration process 18
2.2 The endogenous regeneration process 20
2.3 Endogenous regeneration linked to exploitation 22
3.1 Exogenous coordination 26
3.2 Endogenous coordination 27
3.3 Contexts for action and types of organizational model 32
4.1 Linkage of shared language 60
5.1 Linkages of language in and around the AIG 73
6.1 The vicious circle of the lack of common cognitive ranges 116
6.2 Non-traded approach and breakthrough policy 128
6.3 Trade based approaches and sensitivity to local markets 129
viii
L T
IST OF ABLES
5.1 Types of languages and action-related worlds inside Agro 86
7.1 Process of disseminating knowledge 148
ix
