Oil Change: Perspectives on Corporate Transformation

By Art Kleiner; George Roth et al. | Go to book overview

CHAPTER 15

GOVERNANCE AND FEDERALISM

Charles Handy

The OilCo story is a classic case of an organization moving from a totalitarian state to a modified federation, and from a centrally planned economy to a more open-market situation where the component parts of the old organization become quasi-independent businesses. It is the kind of transition that many organizations of all sorts are being forced to make, not least the granddaddy of them all, the old Soviet Union.

As an aside it is perhaps ironic that the businesses that were, in the seventies and eighties, vociferously pro-market and anti-Communist, failed to perceive that they were themselves designed as centrally planned and controlled economies, not unlike the regimes that they deplored. Such systems were doomed in a fast-changing interconnected world where insulated cultures could not compete or even survive. The dislocations those regimes subsequently endured and are still enduring, the mixture of heady excitement for some and the loss of past certainties for others, the need for new relationships and new ways of working, these are all mirrored in this story.

The OilCo story reminds us that corporations are not pieces of architecture or engineering; they are communities of living people, in many instances bigger in terms of revenue than many a country. They are corporate states and as such, are subject to the rules and principles of political theory as much as their individuals, who are human beings rather than human resources, conform to the theories of psychology and sociology. It was when OilCo's senior executives realized that technological efficiency and financial logic were not enough, on their own, to harness the energies and talents of their people that they began to look for others

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