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management tool. Company's source of investor value will increasingly be based on the value of
their customer franchise, the lifetime customer value of their present and future customers (see
Chapter 9, Section 9.1.1 “Basic E-Business Strategy Patterns”).
1.3 Management by Collaboration (MBC)
The business environment has been witnessing tremendous and rapid changes in the 1990s. There
is an increasing emphasis on being customer focused and on leveraging and strengthening the
company's core competencies. This has forced enterprises to learn and develop abilities to change
and respond rapidly to the competitive dynamics of the global market.
Companies have learned to effectively reengineer themselves into flatter organizations, with
closer integration across the traditional functional boundaries of the organization. There is increas-
ing focus on employee empowerment and cross functional teams. In this topic, we are proposing
that what we are witnessing is a fundamental transformation in the manner that businesses have
been operating for the last century.
This change, which is primarily driven by the information revolution of the past few decades,
is characterized by the dominant tendency to integrate across transaction boundaries, both
internally and externally. The dominant theme of this new system of management with signifi-
cant implications on organizational development is
collaboration
. We will refer to this emerg-
ing and maturing constellation of concepts and practices as Management by Collaboration
(MBC). CRM packages such as SAP CRM are major instruments for realizing MBC-driven
organizations.
MBC is an approach to management primarily focused on relationships; relationships by their
very nature are not static and are constantly in evolution. As organizational and environmental
conditions become more complex, globalized, and therefore competitive, MBC provides a frame-
work for dealing effectively with the issues of performance improvement, capability development,
and adaptation to the changing environment. MBC, as embodied by CRM packages such as SAP
CRM, has had a major impact on the strategy, structure, and culture of the customer-centric
organization.
The beauty and essence of MBC are that it incorporates in its very fabric the basic urge of
humans for a purpose in life, for mutually beneficial relationships, for mutual commitment, and
for being helpful to other beings, that is, for collaborating. These relationships could be at the level
of individual, division, enterprise, or even between enterprises. Every relationship has a purpose
and manifests itself through various processes as embodied mainly in the form of teams; thus,
the relationships are geared toward attainment of these purposes through the concerned processes
optima lly.
Because of the enhanced role played by the individual members of an enterprise in any rela-
tionship or process, MBC not only promotes their motivation and competence but also develops
the competitiveness and capability of the organizations as a whole. MBC emphasizes the roles of
both the top management and the individual member. Thus, the MBC approach covers the whole
organization through the means of basic binding concepts such as relationships, processes, and
teams. MBC addresses readily all issues of management, including organization development. The
issues range from organizational design and structure, role definition and job design, output qual-
ity and productivity, interaction and communication channels, and company culture to employee
issues such as attitudes, perception, values, and motivation.
