SOME MANAGEMENT FRAMEWORKS WORK BETTER THAN OTHERS

Most organizations use some sort of framework, though they are usually specialized in nature and relate to explicit processes such as IT, human resources, sales reporting, or supply chain management. Some are high level, top management oriented, and are intended to be used by the most senior executives exclusively. Other frameworks are more general in nature. The problem with most of these frameworks is the way they connect or, more accurately, do not connect with each other. They were usually designed by specialists for specialists, who often work in very specific contexts while using different terminology as compared to other members of the same organization. In addition, in global organizations it is not uncommon to find that some regions use one kind of system and other regions use other systems that do not connect well with each other, if at all. In addition, cultural differences developed within and from outside the organization might mean that reporting is done in very different ways. In most companies, the only framework that usually connects different parts of the organization well in a consistent way is the reporting of financial data. The finance department is sometimes the only department that applies standardized spreadsheets for reporting and communicating data.

Specialized frameworks have their valid purpose but an organization also needs an overarching management framework that encompasses the whole organization, while addressing the management of environmental complexities. To illustrate this concept we draw an analogy with architecture and the construction of a large building. Constructing a building might require a wide range of specialized blueprints for highly specific experts who only work on particular parts of the structure; however, there is only one overarching architectural master plan on which each of these specialists work and from which individual interconnected elements are developed. In an organization, as well, there needs to be one master plan that spans the whole organization and connects all the elements. The point is that these individual elements—like the plumbing of a building—are unable to function without all the other parts. They need to be incorporated into a coherent structure in order to be effective. Similar to a building, an organization consists of a number of elements, including finance, sales and marketing, production, distribution, international, research and development, human resources, legal, technical departments, and of course top management that form a functioning whole. The larger the organization, the more diverse and, often, the more geographically spread out it is. Similar to the design of a building with different floors and utility lines that are well connected, an organization needs to ensure that its various layers are well connected and that all functions and activities work together based on the same plans and templates. Adopting a bird's eye view, it is clear that management should provide the connections between all the different parts of an organization. Hence, it is the responsibility of management to align all the different parts and prevent them from pulling apart without either limiting their individual effectiveness or their proper functioning for the overall organization.

Starting from the 1960s there was a proliferation of high-level strategic frameworks proposed including those of Michael Porter and Igor Ansoff.13 The former is still widely cited as the underpinning for newer framework variations. Many of these frameworks, however, are problematic because they focus purely on strategic intent and planning and insufficiently address strategy execution and structural consistency. Hence, critics such as Henry Mintzberg14 argue that those frameworks do not reflect the reality of how business is being conducted in the real world. The 1990s and 2000s saw the appearance of a large number of specialized frameworks in areas such as marketing, finance, and operations. Advances in IT and the wide-ranging availability of high-speed Internet at the global level led to the widespread adoption of enterprise resources planning (ERP) solutions from the likes of SAP and Oracle. This in turn affected organizational structures and often caused disconnections between the so-called hard processes that are more numbers based and the soft processes that are more relationship based. Eventually, new general management frameworks emerged, including Kaplan and Norton's balanced scorecard approach,15 which was later complemented with the strategy maps concept.16 Pryor, White, and Toombs17 developed the 5Ps model that fosters the alignment of an organization's purpose, principles, processes, people, and performance. The 5Ps model was targeted specifically at smaller businesses; hence it was kept fairly simple. Another widely used concept was McKinsey's 7S framework,18 aimed at describing and transforming an organization in a more holistic way in order to drive efficiencies. Finally, Accenture's SAP-based "advanced performance management solution" represents a framework that integrates an IT-driven enterprise resources management approach and a managerial relationship approach.

There are many more frameworks available. Almost daily a new generic approach seems to emerge. Hence, it is impossible to address them all in the context of this chapter. We acknowledge, however, that different managerial preferences make one or another framework more appealing to specific executives and their respective organizations. The selection for this overview was of course biased, though it was based on more than 20 years of executive experience and diligent academic research that spans a period of more than six years. In the following section, the underlying individual logics behind the four frameworks selected for discussion will be introduced before we provide a more in-depth look at the TPE framework.