Identifying the companies' competitiveness through their structural profile: Romania case.

Cuesta, Felix ; Popescu, Catalin

1. INTRODUCTION

Prof. Cuesta defined, in his doctoral thesis, what a company structure is and must be as base for competitiveness and after done several studies in Spain, the idea is to expand the study to other countries starting by Romania with the help of Prof. Popescu.

2. ABOUT THE COMPANY STRUCTURE

According to the doctoral thesis of Prof. Cuesta, starting a with a simple definition we can say that a company is "an institution typical of the freedom market, set to do economical activity, within the environment", the key of this definition where we want to emphasize is the business environment dependency.

Then the managers have to understand that to properly manage a company means that it is fundamental to understand the every time environment and then to adapt the company according to it. Professor Norbert Thom (Thom, 2000) mentioned that companies are always immersed in crisis situations, but we have three different types of crisis, Strategic crisis, Result crisis and Cash-Flow crisis. Let's focus on the first one, the strategic crisis, which occurs when there are significant changes in the environment. The companies must to be ready to manage the situation because otherwise the end of this type of crisis is the Result crisis, when there are significant differences between the achieved results and the expected ones and again, a mismanagement of a results crisis concludes in a Cash-Flow crisis and in most cases the company bankrupt.

To avoid this process and this undesirable end, the companies must work with the first variable of the company structure, the Strategy, studying the environment and the internal resources in order to set the most appropriate one and the correspondent basic and global company objectives.

To achieve efficiently these global objectives, the company must works in the second variable, the Organization, organizing its resources in the best way possible, according to the strategy which is affected by the environment. Within the resources a special attention must be applied to the human resources and consequently another three variables must be set up according to the decide organization: Management System, Working Formal Organization and Compensation Policies. And then, in order to properly manage the structure, the information is a key and then the last variable of the company structure must be set, the Information System, supported by the Information Technology in order to manage the information in the most effective way possible. In the figure 1 we can see the company structure illustration, compounded by the different variables that we have discussed before.

[FIGURE 1 OMITTED]

3. BUSINESS TRANSFORMATION PROCESS

Once we have the Company Structure, we are ready to adapt it according to the particular environment, that means that maintaining the same variables of the structure, but the values must change according to the particular environment, creating new company forms, aligned with such environment, within a transformation process to increase the company competitiveness (Cuesta, 2004), as we see in the figure 2.

[FIGURE 2 OMITTED]

During the transformation process to adapt the company structure to the corresponding environment, some specific company forms are set, starting with the traditional structure typical of the stable environments, the organization by business process (a Kaizen base model) typical of a unstable environment and finally the Virtual Corporation, as the most suitable structure for global, fast and uncertain environments (Cuesta, 2006).

Within the process a two transition models appears to give continuity to the transformation process, as we can see in the coherence matrix[R], where the different structures are defined by the value of the structural variables.

4. INVESTIGATION IN ROMANIAN MARKET

In order to design the profile for Romanian companies it was delivered a questionnaire composed by 7 questions. These questions are mainly focused on some subjects such as: organizational model, organizational structure, and management system style, type of work concern the employees, compensation policies and information system.

[FIGURE 4 OMITTED]

The Romanian companies included in the research are carrying out activities in areas such as: trade, retailing and finance. These domains were significant to the Romanian economy in the last 3-4 years. The questionnaire was distributed to a number of companies, mostly located in Prahova County and Ploiesti city, to their managers. After the questionnaires' processing stage the companies' profile line was drawn step by step and the result of this activity generate a diagram (fig. 4) which respect the framework of the coherence matrix[R] described above.

5. CONCLUSIONS

* First, to mention that this is the advance of a ambitious project, to follow the doctoral thesis of professor Cuesta, this has been a test to be followed by studies of specific sectors and countries to set a large benchmarking base of good practices;

* The immediate conclusion is that the wish/dream of all the companies reviewed is to set a client oriented strategy, but they have not changed the others structural variables to properly implement the client oriented strategy, so this creates a high level of inefficiency, due to a lack of coherence but also due to the difference between the clients expectations and the real companies possibilities to serve to adapt to them;

* With some differences, but mainly the profile of the companies reviewed is the typical old Industrial Era company profile, around the 80's and probably the way in the one they are maintaining some competitive advantages it is due to the low labour cost;

* Considering that we are in the Information Era, the I.T. used by these companies is old fashion and then the competitive advantages are reduced as well as to properly implement a clients oriented strategy due to the lack of real clients knowledge;

* A typical error that it could happen and they must be prevented it is to invest in I.T. without changing the Human Resources related variables (organization, management systems, formal working organization and compensation policies), and then these companies could arrive to a profile in the one they will have Strategy and IT of century XXI and the rest of the variables typical of the middle of century XX, creating more inefficiency in the global structure;

* The recommendation would be to don't do the same error that the old emblematic industrial companies typical of the century XX have done, thinking that changing the strategic approach an buying the last state-of-the-art in IT, the problems are solving, they have to adapt the organization, culture, etc. to properly implement the client oriented strategy and them to support it with the adequate IT.

6. FUTURE RESEARCH PLANS

The idea is to extend the research to specific sectors of activity and to different countries in order to progressively obtain a large data base of companies profile for benchmarking.

7. REFERENCES

Cuesta, F. (2004). Company Transformation as base of competitiveness, Ed. Piramide, Madrid

Cuesta, F. (2nd revised edition 2006). Virtual Corporation. COSMOS structure, tools & solutions for business transformation, Ed McGraw-Hill, Madrid, 1998,1999

Kotter, J. (1998). Leading Change: Why Transformation Efforts Fail, Harvard Business Review on Change, Boston, MA: Harvard Business School Press, pp.1-20

Imai, M. (1997). Gemba Kaizen: A commonsense, Low Cost approach to Management, Ed. Kaizen Institute, Japan

Thom, N. (2000). Change Management. Basic elements for an integral change management, Ed. IDOE Universidad de Alcala, Alcala de Henares Fig. 3. Coherence Matrix[R] Period 1900 Company structure TRADITIONAL TRANSITION A STRATEGY internal external (corp-d-comp) (comp-d-corp) ORGANIZATION functional, functional, MODEL specialized specialized & global by processes ORGANIZATION vertical & vertical & STRUCTURE rigid flexible MANAGEMENT SYSTEM by presence by presence + objectives, participative FORMAL WORKING individual individual ORGANIZATION within a vertical team COMPENSATION fixed salary fixed salary + POLICIES variable I.S.I.T. centralized decentralized mainframe minicomputer Period 1985 Company structure BUSINESS PROCESS TRANSITION B STRATEGY external & external & competitive competitive (comp-d-corp) (comp-d-corp) ORGANIZATION internal internal MODEL processes processes with partial outsourcing ORGANIZATION inverted pyramid inverted & lean STRUCTURE pyramid MANAGEMENT SYSTEM based on situational leadership leadership theory FORMAL WORKING team high ORGANIZATION performance team COMPENSATION based on based on POLICIES motivation motivation I.S.I.T. distributed personal PC minicomputers networks network Period 1995 Company structure VIRTUAL CORPORATION STRATEGY external/internal competitive/global (d-corp-comp) ORGANIZATION virtual processes MODEL ORGANIZATION virtual corporation STRUCTURE MANAGEMENT SYSTEM leadership & distance FORMAL WORKING high performance ORGANIZATION virtual team COMPENSATION loyalty-oriented POLICIES I.S.I.T. central-decentralized client-server