Evidence of an Archetypal Management Framework: An Exploratory Examination of Commonality Among Existing Management Frameworks and Resulting Efficacy

Introduction

Enterprises represent the most prevalent type of systems in the worldwide economy, far greater in number than other complex systems (Rouse 2005). These enterprises represent complex, adaptive, socio-technical systems (Gharajedaghi 2006). They are ubiquitous and involve and impact a vast number of humans every day (Checkland 1999; Pennock and Rouse 2016; Rouse 2011). As of 2015, there were over 5.9 million small business firms in the United States (“Statistics of U.S. Businesses (SUSB)” 2015). The National Center for Charitable Statistics reports over 1.5 million charitable organizations in the United States (“NCCS Core Statistics” 2015). According to the US Small Business Administration, small businesses create 64% of the net new jobs and employ 47% of the country’s private workforce (2018). Extending these numbers beyond the US, the ubiquity and importance of this class of enterprises are evident.

Enterprises, as complex adaptive socio-technical systems, are notably hard to manage and stubbornly resistant to change precisely because they are complex, adaptive systems (de Weck, Roos, and Magee 2011; Hoebeke 1994; Kotter 2007; Rouse 2011). At the enterprise level systems dynamics tend to dominate (Hoebeke 1994; Rouse 2011). Further, W. Edwards Deming found that upwards of 94% of all errors, defects, mistakes, misunderstandings in the enterprise were systemic (Deming 1982, 1994); people in the system wanted to do the correct thing, but were led astray by the system. Management is the systems architect and thus cannot escape culpability for these findings (Gharajedaghi 2006; Hoebeke 1994). The Gallup Organization’s survey findings offer evidence of systemic underperformance. The Gallup organization surveys companies every year for employee engagement. In 2015, 50.3% of the employees surveyed responded they were disengaged at work, and 16.8%% said they were actively disengaged (Adkins 2016). In all, more than 67% of the respondents indicated they were disengaged from the system; results predicted by systems thinkers as far back as the 1970s (Ackoff 1971; Checkland 1971; Churchman 1979; Senge 1990b).

Systems thinking has been described as “the discipline that integrates the discipline” (Senge 1990a). Therefore, this research is of particular importance because it has the potential to affect all the management disciplines at the enterprise level – the strategic level. A better understanding of an archetypal management structure can only be of help to each of the discrete management and social science disciplines.

Too much, and not enough, management advice?

A review of the relevant literature and a search of the disciplines reveal many useful models specific to planning, strategy, marketing, human resources, project management, risk management, resource management, engineering management, and many more management areas. All these models are useful for managing portions of the enterprise, or processes therein, but fall short of offering holistic, enterprise-level system models or frameworks.

Management Models

From all the management literature, many models have emerged to cope with managing the complex, adaptive, socio-technical systems we call enterprises. It is beyond the scope of this review to look at each management model. However, it is instructive to explore the underlying nature of the models and their use.

Marshak summarizes many of the most common managerial models and draws the following conclusions (Keenoy et al. 2000):

1. The models contain many of the same elements, but with different orientations and emphases.

2. The models contain several elements in the range from four to twelve, but most commonly contain between five and seven.

3. They contain implicit or explicit interaction and interrelationships among the elements.

4. Each model omits elements advanced as critical by other models or that other schools of thought emphasize.

Keenoy et al., discuss the importance of a common set of elements and a common understanding of these elements and their interaction as critical to organizational discourse and managerial success, regardless of firm size (Keenoy et al. 2000). This research reiterates Senge’s findings on the importance of common mental models, holons, team learning, and systems thinking (Senge et al. 1994). The importance of these unifying themes is demonstrated in the preponderance of corporate universities found in leading companies worldwide (Abel and Li 2012). These internal universities are designed specifically to teach the common elements, common mental models – constructs, frameworks unique to the specific business (Rouse and Morris 1986; Senge 1990b), common language and understanding of a holistic management system (Allen 2002). In teaching these common elements in a Socratic way, these universities are, by default, capturing Checkland’s notion of using Koestler’s holons to structure learning, debate, and understanding (Checkland 1999; Koestler 1967; Stewart, Shaw, and Blass 2005; Storey 2004).

“The prime systemicity lies in the process of inquiry rather than in the real world, as is assumed in hard systems thinking, which attempts to model the real world. In soft systems methodology, the models of human activity systems are holons used as devices to structure coherent debate (Checkland and Haynes 1994).”

All of the prior foundational work has led to a broad understanding of the management disciplines (Collins 2001; Deming 1994; Drucker 2001; Kaplan and Norton 2008; Quigley and Hambrick 2015; Wheatley 2006). However, the sheer number and proliferation of management models have proven to be problematic, as managers face an overwhelming array of models from which to choose (Drucker 2001; Porterfield 2009; Schwaninger 2001). In addition to the sheer volume, the management disciplines suffer from the same schisms and reductionist tendencies as befell earlier academic efforts in the natural and social sciences (Churchman 1979; Deming 1994; Jackson 2003). Much of management thought, and practice is designed to optimize certain discrete functions within the organization – finance, human resources, marketing, etc. This concept, known in system thinking as point optimization, or sub-optimization (Meadows 2008), is anathema to good systems thinking as managers strive to optimize their area of influence (point optimization) often at the expense of the whole enterprise, the system (Goldratt 1984; Meadows 2008; Rouse 2011). Yet the disciplinary structure of the academy almost assures a lack of inter-disciplinarity (Churchman 1979). As Arnold and Lawson point out, business and management curricula are almost totally devoid of systems thinking elements (Arnold and Lawson 2004).

W. Edwards Deming and Peter Drucker, two of the most influential management thought leaders, wrote extensively on the need for managers to be more well-rounded and more holistic in their thinking. In topics ranging from leadership to globalization, accounting to research, manufacturing to supply chain, they espoused a more systemic view (Deming 1982, 1994; Drucker 2001). Collins and Porras identified the characteristics of successful organizations, including a more inclusive view and some of the concepts embodied in Churchland’s soft systems methodology (Churchman 1979; Collins and Porras 1994). Collins furthers these ideas identifying the traits, many that are mirrored in systems thinking that allowed companies to make transformational moves in their industries (Collins 2001). From the systems engineering realm, Rouse explores the business management implications of enterprises as systems. He explores the essential challenges that are inherent in the dynamics of a constantly changing environment and how firms can use systems concepts for enterprise transformation (Pennock and Rouse 2016; Rouse 2005). Kaplan and Norton presented a broader, more holistic performance management concept, The Balanced Scorecard, that included measures generally considered to be the soft side of management (Kaplan and Norton 2007, 2008).

It only matters if the system learns

Management scientists have described the various phenomena by which elements of complex, adaptive, socio-technical systems learn and grow, either by design or by default (Chan 2009; Fyock 1999; Senge 1990b). However, the notion that an enterprise is a system is not a universally accepted construct in the business management community (Atwater, Kannan, and Stephens 2008; Senge 1990b). Senge advances the notion that systems thinking is the missing link - the “Fifth Discipline” - that enables, organizational learning as distinct from individual learning (Senge 1990a). Senge is largely responsible for awakening, or re-awakening, the business community to systems thinking. Despite the commercial success of Senge’s book, there remains little evidence that mainstream business management disciplines have integrated systems thinking. Atwater et al. report that a comprehensive treatment of systems thinking is lacking in graduate and undergraduate management programs (Atwater, Kannan, and Stephens 2008).

Another area Senge promoted was team learning. Levitt and March, from the Sociology and Business schools at Stanford, wrote about organizational learning before Senge. They clearly articulate many of the same concepts of systemic learning as Senge; however, they do not use the term systems thinking (Levitt and March 1988). Slowly the worlds of business management and systems thinking are coming together, and the enterprise is the meeting place. Bardoel explores the importance of applying systems thinking tools in organizational behavior training (Bardoel and Haslett 2004). Segatto et al. advance the concept of systems thinking into the area of business process management (Segatto, Silvia Inês Dallavalle de, and Dante Pinheiro 2013).

Towards a common set of elements – an archetype

The profusion of management thought, and frameworks make system learning harder, by offering management new novel mental models with which to frame the enterprise. Many business owners and managers, of enterprises small and large, employ these “new” tools and new language to tackle the same problems as before, leading to confusion, not clarity (Ackoff 1999; Hoebeke 1994; Jick and Peiperl 2010; Pennock and Rouse 2016; Rouse 2011). Termed management by best seller, this constant resetting of the frameworks or methods often does more harm than good (Drucker 2001; Porterfield 2009).

Intent of this research

The intent of this research is to explore the evidence of an archetypal management system. If such a model exists, owners and managers of enterprises of all size can focus on these most important elements and the system in which they are deployed.

Research Methodology

The following research questions guided the exploration onto the existence of an archetypal management model or framework.

(1) Is there sufficient commonality and overlap in existing business enterprise management models to evidence a common set of framework elements, an archetype?

(2) Do companies that apply the common management elements identified in the extant business management models in a systematic way exhibit better performance?

The complexity of the research required the employment of a multi-phase research methodology. The phases were as follows:

(1) An extensive literature review and analysis of existing, most prevalent management models and frameworks from the areas of general management, strategic management, change management, project/program management, human resources management, organizational behavior, and the social sciences.

(2) Extensive content and affinity analysis of the most common frameworks found to develop a set of generalized management elements, which form the definitional elements of the survey and semi-structured interview instruments.

(3) Semi-structured interviews with owners and chief executive officers of companies known to use a management system incorporating some or all the common elements to verify usage and efficacy of the framework and elements.

(4) Repeating phase 2 repeatedly to confirm evidence of an archetypal management model.

Advancing management theory through qualitative, exploratory research

Critics of often debase qualitative research soft and imprecise, instead demanding the certitude of quantitative research. However, complex adaptive systems are too complex to yield to such certitude, there are too many independent variables. Therefore, management theorists propose certain heuristics, rules of thumb, schemas, and frameworks to help managers grasp the totality. However, the sheer volume of such heuristics and schemas appears to be a problem (Drucker 2001; Porterfield 2009). The author proposes that advancing the theory of an archetypal management model will help focus future management thought and research.

Evidence of archetypal management elements

To determine the most prevalent management elements in use, internet searches were initially conducted to identify images of frameworks or models using the following terms – strategic management model, strategic management system, enterprise management model and enterprise management system. Initial searches captured additional terminology, so the searches expanded to include change management, risk management, project management, and human resource management models and frameworks. Initial raw search results yielded over 2,400 potential images. Using the following criteria further narrowed the initial results:

• The image must be a graphical representation of a management model or system with distinct, named management elements (versus text, photographs, graphs, etc.);

• The model must have at least three distinct management elements;

• There must be no evidence of overlap (e.g., identical elemental structures utilizing a different name).

Applying the above criteria, the potential management frameworks were reduced to an initial set of 169 for further study. Using literature searches and review, these were further filtered by requiring that the model must be directed at managing all or part of the enterprise (e.g., not a framework for inventory numbering or bill of material structure, risk management, etc.) leaving seventy-one management models for rigorous analysis. Next, the verbiage of every element of all seventy-one models was content analyzed for raw numbers of repetitions. One hundred eighty-seven different terms used six hundred thirty times (an average of 4 elements per model) were analyzed using standard numerical content analysis techniques - counting and summing occurrences. These terms were further subjected to affinity analysis to eliminate overlap and concentrate on generalizable terms. For example, the terms plan, planning, and strategic planning were all ranked among the top elements and were subsequently reduced to the element ‘strategic planning.’ This affinity analysis further refined the elements to the following common management elements – Leadership, Corporate Culture, Developing People, Strategic Planning, Structure, Control and Governance.

Note: after the conclusion of the initial research, subsequent student researchers with no prior contact or access to early work repeated the precise research methodology serially to verify the results. The following results are from the final research round, but all rounds had similar findings, including the ranking of most popular frameworks and most common elements.

Figure 3-4 summarizes the findings.

Figure 3-4.Results of Content and Affinity Analysis

In the next step, the most common management models, as revealed by the literature searches and review, were specifically searched by name to determine the frequency of citation. It should be noted that citation volume used as a proxy for usage is a technique popularized by Page, Brin, et al. (Page et al. 1999).

Table 3-1 reflects the results.

All of the models from Table 3-1, and the literature associated with them, were analyzed to determine the intent and scope of usage of the individual elements embodied in each one (Blake and Mouton 1969; Bolman and Deal 1984; Bryan 2008; Burke and Litwin 1992; Freedman 2011; Galbraith 2002; Hanna 1988; Kaplan 2005; Kilmann 1986; Kotter 2007; Leavitt 1962; Morgan 1980; Nadler and Tushman 1980; Weisbord 1976). Table 3-2 below maps the overlap of the most commonly used management models and the most common elements as identified in the content and affinity analysis.

Table 3‑2: Element Coverage Commonality

Summary of archetypal element research

The research and literature review resulted in a clear articulation of elements common to the most often used management frameworks. These common elements do not represent a mutually exclusive, collectively exhaustive (MECE) set of elements or a framework for all management purposes, just the most common elements of the most common frameworks, and therefore evidence of an enterprise archetype. The following definitions of these elements are not intended to be prescriptive or definitive for any purpose other than establishing a common reference language for the survey and interview recipients in the next phase of the research. This methodology for generalization was used to minimize or eliminate any bias on the part of the participants for a particular embodiment of the elemental terminology or for specific management frameworks or set of elements that may have been in use, previously used, or preferred by the participating CEOs, (Creswell 2003; Leedy 1997; Yin 2014). For the purposes of conducting the semi-structured interviews, the archetypal elements were defined for the participants as follows:

(1) Leadership - A formal method of developing and assessing leadership and leadership potential, both current and future, within the enterprise.

(2) Organizational Culture - A formal method of developing and assessing organizational culture, both current and future, within the enterprise.

(3) Development of Personnel - A formal method of developing and assessing the skills and capabilities, both current and potential, within the enterprise.

(4) Strategic Planning - A formal, cross-functional team-based method for planning for the future of the enterprise.

(5) Organizational Structure - Clear representation of all the organizational structure elements embodied within the enterprise.

(6) Control Systems - All the visible, demonstrable systems that monitor enterprise performance.

(7) Governance - The enterprise system used to govern, including the board of directors.

Evidence of archetypal system framework and efficacy

To test the hypothesis that the elements, when assembled into a framework and used systematically led to better enterprise performance, the author conducted semi-structured interviews with owners and chief executive officers.

Semi-structured Interviews with Owners and CEOs

The next phase of the research involved interviewing owners and CEOs of companies known to use one of the common management models, identified in Phase 1 and containing at least five, if not all, of the common elements, found.

Semi-structured Interview Instrument Design and Testing

Interview questions were carefully designed to provide insight into the research questions posed. The instruments were reviewed before use by business owners, CEOs, and business consultants known to utilize commonly used frameworks identified in the literature search to verify language and clarity (Whiting 2008). Following review by the business advisors, the Institutional Review Board at George Washington University (GWU-IRB) approved the instrument for use.

Semi-Structured Interview Population and Conduct

Utilizing independent business consultants with client bases known to use common business management frameworks including the elements (Leedy 1997), one hundred and thirty-one contacts were made across all industries, sizes, and ownership types and screened for participation (Creswell 2003). Thirty-seven CEOs initially agreed to participate and received the survey instrument. Twenty-three semi-structured interviews were conducted (62.1% response rate). Interview participants received an email containing the research instrument and were asked to fill it out in advance and to provide a convenient date and time for the formal interview. Sending the questions in advance helps to eliminate biases and steering that may be introduced by the interviewer in the live interview (Cachia and Millward 2011). During the conduct of the actual interview, the interviewer verified the respondents’ answers and offered the respondents an opportunity to expand upon their answers and clarify any areas of confusion. A secondary benefit of this approach was the development of a fuller and more nuanced understanding of the field of research than is possible with a traditional blind survey (Whiting 2008).

Design of Research Plan to Eliminate Bias

The researcher must be very careful not to introduce bias into the research, especially when utilizing multi-phase, qualitative, or mixed methods (Creswell 2007). Careful consideration was given to this concern in the development of this research methodology. Specific safeguards employed to combat the introduction of bias were as follows:

1. Generating the generalized set of elements using multiple search, content, and affinity analysis techniques to ensure veracity and subsequent verification of results with literature research.

2. Utilizing a generalized set of management elements for all research instruments to a) ensure consistency throughout the phases, and b) ensure individual or institutional biases to specific management models or frameworks were avoided (Creswell 2003).

3. Verifying the practical utility and efficacy of the generalized elements to ensure that later phase research explored reaction to known efficacious elements and not theoretical efficacy only (Leedy 1997).

4. Utilizing the semi-structured interview method of sending the research instruments in advance to eliminate live survey and interviewer bias (Cachia and Millward 2011; Whiting 2008; Yin 2014).

Findings from Enterprise CEO Interviews

Table 4-8 characterizes the respondents to the semi-structured interviews conducted with CEOs concerning enterprise performance. Categories include title, average tenure, revenue range, and growth rates.

One hundred percent (100%) of the owners and CEOs indicated the common management framework elements helped to optimize their business, and eighty-five percent (85%) said they teach it as a system of management. Seventy-nine percent (79%) indicated they teach it to all of their employees. Eighty-five percent (85%) of the respondents felt the model was generalizable and was applicable across divisions, companies, and industries. On average, they rated the effect on the business of using a defined management system with clearly defined management elements as transformative (Likert Level mode = 5). Table 4-9 below summarizes the results from each element individually.

Echoing the findings in the literature review, the most important elements were found to be those from the soft systems methodology. The lowest scoring individual elements were the more traditional and predictable structural and control elements, yet even here, respondents deemed them to have a large positive effect. While the mode was a five and the median was a 4, one element, Governance, scored a minimum rating of two, no effect on enterprise performance. The score was only from two respondents out of twenty-three (9%). Further analysis of these interviews indicates these two respondents are in partnership structures. In such structures the partners represent both leadership and governance (Kumar and Zattoni 2014) possibly leading to a perceived redundancy in the survey question for these respondents. This duality may explain the low minimum score for the Governance element and hence the larger variability.

Extent of Practice within the Enterprise

The respondents rated the degree to which a defined management system was practiced within the enterprise as foundational to the business (Likert Level mode = 5). Table 4-10 summarizes the results for the individual elements.

Financial Performance and Anecdotal and Expert Opinion of Efficacy

Financial results are the traditional measures used to assess efficacy and performance in a business enterprise. For this research, and using the measures owners and CEOs were willing to share, revenue growth rate, profit growth rate and revenue per employee were the measures used to assess performance. The respondents provided actual revenues, profits (EBIT) and in most cases employee counts. Growth rates were calculated from this information. Respondents were not as precise with employee numbers as with financial data, often giving approximations of staffing. Consequently, only revenue and profit growth rates were used in the statistical analysis. There is considerable debate as to what constitutes performance with respect to management systems (Huselid 1995) and what and how certain independent variables contribute to enterprise success and performance (Kumar and Zattoni 2014; Quigley and Hambrick 2015).

Senge and others have noted that financial measures are not necessarily the best measures of system health and effectiveness, however, they are the most universal (Deming 1982; Kaplan and Norton 2008; Rouse 2011; Senge 1990b), and in the case of this research, the only non-ordinal data collected.

Anecdotal evidence of efficacy from using the elements is echoed in the financial results and the opinions of the respondents. Over the study period, 2007 to 2013, average revenue growth was reported to be 116%, and average profit growth rate was reported to be 95%. It should be noted this period includes the greatest recession in US history and the participants included companies in real estate, construction, mechanical contracting and leisure and travel, some of the hardest-hit industries. During this same period average growth of US Gross Domestic Product (GDP) was 0.73% (Young 2013). The respondents reported an average revenue growth rate of 116%. Sample sizes proved to be too small to infer any statistical significance.

Specific comments and opinions advanced by the respondents speak to the efficacy of the common elements in enterprise performance. Below are some representative responses:

“The impact on our growth rates is impossible to discern, but I believe using the framework as a system has caused me to focus on the areas where I can have the greatest impact. The elements individually created great value for me, but as a system the framework transforms my company’s performance.”

“Without these elements used as a system, we probably would not have survived.”

“The results over the last nine years, especially in the area of profitability, but also in hiring and development of our people and overall quality of programs in marketing, sales and logistics - without a doubt our enterprise has been enhanced by using the elements and the model.”

“Using the model, we have excelled comparatively to our peers (growth in the business (enrolments and revenue), growth in net assets, etc. and are consistently identified as the best place to work based on employee surveys.”

Conclusions

From the research into the most common elements of the most common enterprise management models, it appears there is evidence of an archetypal set of elements. There are several implications for owners and managers in these findings:

1. There was variability in the descriptions and uses of each element revealed in the research. These slight variations are not problematic firm to firm; however, it is imperative to clearly describe and define the elements chosen within a given firm so that all occupants reach a common language and common mental models.

2. Whether managers choose a named framework, use the one described herein, or create their own, which framework they choose is not as important as assuring that the common elements all have coverage.

3. Managers must view the chosen framework and the elements of that framework as a system and use it consistently in such a manner.

4. Managers must train all system occupants in the language and use of the system for full effectiveness.

Owners and managers should not abandon all past affinity to current models and frameworks. The keys are to assure that the common elemental coverage is in place, the framework is used as a system, and the system and elements are known and understood by all.

Implications for small business

The reader might be tempted to say that the findings described here are not germane to small businesses as small business owners and operators are in some ways at a significant disadvantage relative to their larger more established counterparts. They do not have access to corporate universities and consultants. However, the systemic and archetypal nature of the findings are the compelling feature for small businesses. Each of the common elements described herein will be in place in a small business either by default or by design. There will be a governance function in place even in a sole proprietorship where the owner represents the governance element alone. The operative question is whether that default setting is effective? If not, perhaps the owner should empanel a board of advisors to assist with important governance issues. Similarly, in that same sole proprietorship there will be a planning system, perhaps that system is to not plan at all, but is it effective and appropriate? Even in a small firm, there will be a default leadership system and style. But is it effective and appropriate? Does it integrate with all the other elements in a systemic way? All the common elements found in this research will be in place in a small business precisely because they are elemental and must be in place for the system to function. Some elements, such as the culture and leadership style, are emergent properties of the system that arise precisely because the system elements are brought together (Meadows 2008). Nothing keeps a small business from thinking about the common elements and assuring that all employees, regardless of number, are aware of the system elements and have common mental models and language. In fact, that is precisely what the consultants would have them do if they were big enough to engage them. The danger in the proliferation of management guidance is that small business owners often gravitate to the latest or most alluring trends without assuring that they are appropriate to their system and the elemental systems components already in play in their system.