Zbornik gozdarstva in lesarstva 83 (2007), s. 15–21 GDK: 79.791.3(045)=111 Prispelo / Received: 05.12.2006 Pregledni znanstveni članek Sprejeto / Accepted: 13.06.2007 Scientific review paper Organisational model of a globally oriented wood industry company Jože KROPIVŠEK1, Rudi ROZMAN2 Abstract The paper provides an answer to the question as to in what way and with which organizational steps a wood industry company can be (more) adaptable and successful in a rapidly changing (global) business environment. The purpose of the article is to form an organizational model of a globally oriented wood industry company, considering the three required model properties: repeatability, efficiency and productiveness, as well as practical applicability. Research is limited to actual state in Slovenian wood industry practice with some specifics that should be considered by other implications of the research. Practical applicability of the model is based on these findings and is ensured by making guidelines on the basis of which companies can organise their businesses. These guidelines include suggested measures for individual areas of business organization with the intention of increasing adaptability and innovativeness of business operation, improving competitive ability, and the ability of constant improvement. The paper provides a new organizational approach, specialized for making wood industry companies successful in the changing business environment. Key words: adaptability, globalisation, model, organization, wood industry company Organizacijski model globalno usmerjenega lesnoindustrijskega podjetja Izvleček Prispevek poskuša odgovoriti na vprašanje, na kakšen način in s katerimi organizacijskimi ukrepi je lahko lesnoindustrijsko podjetje (bolj) prilagodljivo in uspešno v hitro spreminjajočem se (globalnem) poslovnem okolju. Namen članka je oblikovati organizacijski model globalno usmerjenega lesnoindustrijskega podjetja, pri čemer smo poskušali zagotoviti tri zahtevane lastnosti modela: ponovljivost, učinkovitost in plodnost, pri čemer smo želeli zagotoviti predvsem njegovo praktično uporabnost. Razvoj tega modela je temeljil na analizi stanja v slovenskih lesnoindustrijskih podjetjih, pri čemer so bila upoštevane vse posebnosti lesarstva in ugotovitve iz teoretične obravnave vpliva globalizacije poslovnega okolja na spreminjanje organizacije podjetij. Praktična uporabnost v slovenski lesarski praksi je bila zagotovljena z oblikovanjem smernic, na podlagi katerih lahko podjetja organizirajo svoje poslovanje. Te smernice vključujejo predloge ukrepov na posameznih področjih organizacije poslovanja z namenom povečati prilagodljivost in inovativnost poslovanja ter izboljšati tekmovalno sposobnost in sposobnost nenehnega izboljševanja poslovanja. V prispevku je prikazan nov organizacijski pristop, ki dosledno upošteva posebnosti lesarstva in zagotavlja lesnim podjetjem dolgoročno uspešnost v spreminjajočem se poslovnem okolju. Ključne besede: prilagodljivost, globalizacija, model, organizacija poslovanja, lesnoindustrijsko podjetje 1 Introduction JONES 1999). Changes in the environment have an effect on the changes in the quality of operation and the changes 1 Uvod in the dependence between organisation and company The process of globalisation has a great influence on success (MIHELČIČ 1999). This is due to the fact that the development of (global) business environment and on the environment is one of the most important situational the development of individual companies. The nature of variables of the situation (organisational) theory. Not so today’s business environment has changed significantly many years ago, the familiar organisation structure was in recent years and environmental uncertainty is still dominated by a traditional view of managers that was based increasing (HOQUE 2004). Changes in the global business on asset ownership and vertical organisation structures. environment demand changes in company business as More recently, flexibility, co-operation and collaboration well. The emphasis is mainly on the speed, adaptability have become important features for success (WALTERS and creativity. A great deal of company adaptability to 2004). In order to survive and develop, many organisations changes in the environment is connected with the changing have become faster, leaner, more consumer-oriented and of business operation (ROZMAN 2000, GEORGE / more conscious of cost than they have ever been before 1 Doc. Dr. J.K., University of Ljubljana, Biotehnical Faculty, Department of Wood Science and Technology, Rožna dolina c. VIII/34, 1000 Ljubljana, Slovenia 2 Prof. Dr. R.R., University of Ljubljana, Faculty of Economics, Kardeljeva ploščad 15, 1000 Ljubljana, Slovenia 16 Zbornik gozdarstva in lesarstva 83 (SHAO / LIAO / WANG 1998). On the basis of studying the globalisation of the business environment and its influence on companies (KROPIVŠEK 2004), we may assume that some organisational areas are more important than others. Revolutionary and evolutionary changes in re-engineering business processes, modernising the organisational structures, introducing innovative ideas into business and ensuring quality of operation are basically the things which interfere with the very heart of the company organisation, as they include i.e. define especially the relations within the organisation. And this is one of the key principles of the company organisation definition done by Lipovec (1987). Changes and the goals of changing the organisation are, on the other hand, not completely the same for all companies; as a consequence their adaptability is different to some extent as well. Thus, some characteristics are also true for groups of similar companies, in this case for wood industry companies (MILLER et al. 1996). We are also going to assume the fact that the European furniture market is quite well developed and globalised, as Slovenian wood industry companies export, on average, as much as 52.9% (KOŽAR 2004). 2 Hypothesis and objectives 2 Hipoteze in cilji The article verifies the thesis that in changing and adapting the operation, wood industry companies are somewhat specific compared to other branches. This is true especially due to the use of wood as a basic raw material. It namely has many specific (and also “non-competitive”) characteristics for organising the business operation. The final objective of the research was to form an (organisational) model of a globally oriented wood industry company, which would answer the following question: • in what way and with which (organisational) steps a wood industry company can be successful in this rapidly changing business environment, • what organisation, what kind of properties will suit the global business environment most, and • how to introduce a new type of organisation properly. 3 Methods 3 Metoda dela In forming the model of a globally oriented wood industry company, we tried to assure the three required model properties (LIPOVEC 1987): repeatability, efficiency and productiveness, whereby we wanted to ensure, above all, its practical applicability. We tried to provide for repeatability of the model by firstly including all the organisational areas important for the globalisation of business into the model, and then with a careful choice of solutions to problems established in analysing the state of wood industry companies. The purpose of this was to achieve a generality of the model and the repeatability of realisations from the model in all wood industry companies. What needs to be stressed at this point is the time dimension of the formed model, as the increased development (and changing) of individual organisational areas and the formation of (new) different problems appearing in practice demand constant up-dating and supplementing of the model. We tried to provide for efficiency of the model by using a graphic (picture) design, where the key organisational areas are emphasised. Moreover, due to the efficiency the model includes and shows the most important factors a (wood industry) company needs to consider when forming individual organisational areas. We tried to provide for productiveness by showing the interdependence of individual organisational areas, the involvement of the specifics of wood industry into the discussed problems and the exposure of the most important factors in individual organisational areas. The model is formed in the way that new concepts can be added, which is the consequence of development of both global business environment and individual organisational areas included in the model alike. This thus enables an up-date of individual insights and a fairly non-complicated application onto practical problems in a clear way. We wanted to achieve applicability of the model for wood industry practice (as well) by forming the list of changes in the business organisation of wood industry companies with the intention of increasing their adaptability, competitive ability, the ability of constant improvement of operation and finally achieving long-term success in the global market. 4 Results and discussion 4 Rezultati in razprava The organisational model of a globally oriented wood industry company (Figure 1) shows the groundwork of adapting and the adaptation of the business organisation to the changes of a global business environment. It also includes the basic guidelines, which can serve as recommendations to companies as to which measures to take in individual areas of business organisation to improve the competitive ability and to achieve long-term success in a global business environment. It is based upon results of studies by individual organisational areas in Slovenian wood industry companies (KROPIVŠEK 2003, KROPIVŠEK / OBLAK 2003, KROPIVŠEK / OBLAK / LIPUŠČEK 2004). Adaptability and innovation of the (organisation of) business cannot be provided for without suitable changes and measures in individual organisational areas. The specifics of wood industry have a major influence on forming individual organisational areas and business organisation in general. In certain cases, these can be an advantage, but on the other hand, they can be a Kropivšek, J., Rozman, R.: Organisational model of a globally oriented wood industry company 17 disadvantage as well. The advantage is definitely that the handling of the basic material (wood) is environmentally friendly, the disadvantage being that certain problems decrease competitiveness of the companies in the market. The model is formed on an adapted business organisation, the foundation of which are constant gradual (incremental) and periodical radical changes, especially in areas of Business Process Management (BPM) (KOVAČIČ 2004, GUNASEKARAN / KOBU 2002, DOUMEINGTS / MALHENE 1997, LESTER 1994). What needs special emphasis at this point is the requirement for a thorough re-engineering of business processes with major stress on re-engineering the production process by using computer supported methods and tools for re-engineering and management of business processes. Along with that, an introduction and harmonisation (of capabilities and the levels of quality handling) of modern adjustable production technology and informatisation of modernised processes is needed, assuring traceability and accurate monitoring of materials and handled products throughout the business (and production) process. The organisation alone is not a sufficient condition for success of a company in a global market. Pennings (1997), for example, claims that providing for innovation as well as profitability and achieving high productivity in a manufacturing company is one of the key factors for success, which confirms the great importance of knowledge and creativity in a company. Similar is true for the quality management where the goal is ensuring total quality management (TQM), constant quality of supply, adequate product quality and adequate quality of customer services (COOK 1997, VONDEREMBSE / WHITE 1996). These are the basic conditions for regulating the state of affairs in the field of quality management in the sense of achieving business excellence. Two things are based on this philosophy, namely the EFQM Model of the European Foundation for Quality Management, which is the basic reference model for those organisations whose aim is to achieve excellence (CASTILLA 2002), and the COBRA project (KOVAČ 2002), which is a renowned project set within the European Union framework. The mentioned changes cause and demand certain changes in the organisational culture of a company and in the human resources management as well. The role of an individual in a company and his knowledge namely changes significantly. Through development, each employee receives either new duties (the importance of knowledge and qualifications) or responsibilities (values, motivational provisions) and, along with that, technology he uses for work changes (develops) as well. For the long-term success of business operation, which needs to be provided for, is harmonisation of the strategy of staffing with the company strategy, where (long-term) planning of employment needs to be based on knowledge and qualification of employees. In staffing, the concept of employability needs to be considered along with making good use of the advantages of group i.e. team work and telework. Due to the increased importance of knowledge in the global business environment, an effective system of knowledge management needs to be introduced into business operation. The changed human resources management has strong links to the needed change of the company culture. The companies have to change their values at work, the way of operation and management, the conduct, the goal of which needs to be motivating employees and the methods of assessing and rewarding the employees, for example the 8C plus 6C model (WAI-HUNG / LEE / SIORES 2003). It needs to support learning, creativity and innovativeness of the employees, their willingness to take risks, their accepting of responsibilities and co-operation in (international) teams (CLARK / MALLORY 2003). Moreover, it needs to enable a certain level of humanisation of work and relations due to new working conditions (e.g. telework) as well as to support the development of an individual by minimising stress caused by these changes (MACK / NELSON / QUICK 1998). Owing to an ever increasing importance of (searching for and) developing competitive advantages, demanding faster and more complex decisions at all levels of business operation, new knowledge and needs of the staff, companies are faced with the requirement of more numerous and more quality data, which explains the meaning of business informatics. The latter has an influence also on the field of management (planning, changing, etc.) of the production process, considering all the specifics of this process in wood industry companies, on assuring (organisational and technological) conditions for the introduction of electronic business operation itself, this being one of the key conditions for business success in terms of globalisation. Due to an increase in ecological awareness of eventual customers, the important thing is also proving ecological adequacy of technological processes and proving the company’s management from the point of view of environmental protection. Therefore, some authors (VILA / KOVAČ 1998) claim that environmental protection nowadays needs the same level of consideration as the other (global) factors in business environment. Ecology has become the philosophy of the most penetrative of the developed European countries (TRATNIK / OBLAK / KROPIVŠEK 2000). The field of environmental protection mostly has an indirect influence on forming the company organisation (adaptable to the global environment). It namely defines the contents and the methods of performing business functions (of the production function above all), and this needs to be considered for instance in business processes re-engineering. However, it also has an indirect influence on the changing of company culture. Strategic thinking and planning of business operation has also changed due to the rapid changes in the global business environment, as it can no longer be focused on details with one strategy and one route only, but rather needs to (strategically) anticipate more routes and have more objectives, which change quickly as well, therefore 18 Zbornik gozdarstva in lesarstva 83 4 ^ WOOD INDUSTRY COMPANY IN A GLOBAL BUSINESS ENVIRONMENT (LESNOINDUSTRIJSKO PODJETJE V GLOBALNEM POSLOVNEM OKOLJU) ^ 8 STRATEGIC THINKING (strateško razmišljanje) 3 ADJUSTED "'^v^' '' ORGANISATION OF BUSINESS (prilagojena organizacija poslovanja) & 5 INFORMATISATION OF BUSINESS (informatizacija poslovanja) ¦''ADAPTABILITY AND ""•¦ BUSINESS INNOVATIVENESS (prilagodljivost in inovativnost poslovanja).' ^,,^ /QG>^o\i9c,V-e /QUALITY OF / ENVIRONMENTAL'^ j PROTECTION \(varovanje okolja)L fa (2 a^- ^ A \L)§§ i° ^ ,0^ OPERATIONS r~~~^?^33Lyk (kakovost poslovanja), BUSINESS tf 1 6 Figure 1: Organisational model of a globally oriented wood industry company Slika 1: Organizacijski model globalno usmerjenega lesnoindustrijskega podjetja Legend to Figure 1 (legenda k sliki 1): Label (Oznaka v sliki) Content (Vsebina) Business Process Reengineering, emphasising the production process modernisation (Prenova poslovnih procesov s poudarkom na prenovi proizvodnega procesa) Introducing the philosophy of Business Process Management (Uvajanje filozofije ravnanja poslovnih procesov) Introducing the modern (adjustable) production technology (Uvajanje sodobne (prilagodljive) proizvodne tehnologije) Introducing traceability of materials and handled products throughout the production process (Uvajanje sledljivosti materialov in obdelovancev skozi proizvodni proces) Decreasing the security factor in production planning (Znižanje varnostnega faktorja pri planiranju proizvodnje) Informatisation of production and production planning (Informatizacija proizvodnje) Modernising the sales and logistics process by introducing the philosophy of marketing products (Prenova procesa prodaje z uvedbo filozofije trženja izdelkov) Label (Oznaka v sliki) Content (Vsebina) Introducing Total Quality Management (Uvajanje celostnega ravnanja kakovosti poslovanja) Ensuring constant quality of supply (Zagotavljanje konstantne kakovosti dobave) Ensuring an adequate level of product quality (Zagotavljanje ustrezne kakovosti izdelka) Ensuring an adequate level of customer services quality (Zagotavljanje ustrezne kakovosti servisiranja kupcev) Providing for an effective introduction of quality standards (Zagotavljanje učinkovitega uvajanja standardov kakovosti) Providing for conditions to reach business excellence (Zagotavljanje pogojev za doseganje poslovne odličnosti) The legend continues on the next page (legenda se nadaljuje na naslednji strani) 2 1 Kropivšek, J., Rozman, R.: Organisational model of a globally oriented wood industry company 19 the use of appropriate methods and techniques for strategic planning is necessary, enabling different simulations and anticipations. What is most important are careful monitoring of developments in the environment and rapid reaction to the ascertained changes. Kaplan and Norton (2000) introduce the so-called balanced scorecard as an important framework for a strategic system of assessment and management of companies, because with their help one can convert the mission and strategy of companies into an entire range of indicators of success. 5 Conclusions 5 Zaključki Forming the organisational model of a globally oriented wood industry company was based upon findings from a theoretical discussion of the influence of Label (Oznaka v sliki) \ Content (Vsebina) 3 Setting up of adjustable (virtual) and process organizational structure (Postavitev prilagodljive organizacijske strukture) Organizing business for working in clusters (Organiziranje poslovanja za delovanje v grozdih) Horizontal linking with companies within the branch (Horizontalna povezovanja s podjetji v panogi) Improving the condition in the field of business innovativeness (Izboljšave stanja na področju inovativnosti poslovanja) 4 Re-designing of company culture and work-related values (Prenova kulture podjetja in sprememba vrednot pri delu) Changing the management method and company conduct with the aim of motivating the employees (Sprememba načina vodenja in vedenja v podjetju s ciljem motivirati zaposlene) Re-shaping the assessment and remuneration of employees (Prenova načina ocenjevanja in nagrajevanja zaposlenih) Supporting learning and rewarding knowledge and abilities of employees (Podpora učenju in nagrajevanju znanja ter sposobnosti zaposlenih ) Importance of humanisation of work and relations due to new working conditions (Pomen humanizacije dela in odnosov zaradi novih delovnih razmer) 5 Providing for harmonisation of the staffing strategy with the company strategy (Zagotavljanje usklajenosti strategije kadrovanja s strategijo podjetja) Long-term planning of employment on the basis of knowledge and qualifications of the staff (Dolgoročno planiranje kadrov na temelju znanja in usposobljenosti kadrov) Providing for adequate knowledge about wood (Zagotavljanje ustrezne ravni znanja o lesu) Introducing an effective information system for human resources management (Uvajanje učinkovitega informacijskega sistema za ravnanje s zaposlenimi) Developing and introducing team work and telework (Razvijanje in uvajanje skupinskega (timskega) dela in teledela) Familiarity with and consideration of the employability concept (Poznavanje in upoštevanje koncepta zaposljivosti) Introducing effective knowledge management (Uvajanje učinkovitega ravnanja z znanjem) globalisation of business environment onto the changing of company organisation and on the analysis of the situation in Slovenian wood industry companies. One of the important demands in forming the model was to determine in what way and with which organisational steps a wood industry company can be (more) adaptable and successful in a rapidly changing (global) business environment. In this regard it has been ascertained that a more suitable organisation of business operation, with the emphasis on a (more efficient) organisation of the production process, a more adaptable organisational structure and a more complete quality of business operation present the groundwork of a globalised business environment being adapted to the business organisation. Changes in these areas also cause and demand certain changes in the organisational culture of a Label (Oznaka v sliki) \ Content (Vsebina) 6 Informatisation of production process management (Informatizacija ravnanja proizvodnega procesa) Informatisation of the decision-making process (Informatizacija procesa odločanja) Introducing electronic business operation (Uvajanje elektronskega poslovanja) Introducing business internet sites into operation (B2E, B2B and B2C) (Uvajanje poslovnih portalov v poslovanje) Using the internet for new market approaches (Uporaba interneta za nove trženjske pristope) 7 Knowledge and consideration of the trends in environmental protection in business (Poznavanje in upoštevanje trendov s področja varstva okolja pri poslovanju) Total and systematic providing for ecological quality of business (Celostno in sistemsko zagotavljanje ekološke kakovosti poslovanja) Proving the ecological adequacy of technological processes (Dokazovanje ekološke ustreznosti tehnoloških procesov) Company management from the aspect of environmental protection (Ravnanje podjetij z vidika varovanja okolja) Forming and asserting the ecological mark (Oblikovanje in uveljavljanje ekološkega znaka) Providing for ecology (well-regulation) of the working environment (Zagotavljanje ekologije (urejenosti) delovnega okolja) 8 Using adequate methods and techniques for strategic planning (Uporaba primernih metod in tehnik za strateško planiranje) Using The Balanced Scorecard for measuring success (Uporaba modela uravnoteženih kazalnikov za merjenje uspešnosti poslovanja) Careful monitoring of activities in the environment (Skrbno spremljanje dogajanja v okolju) Mutual strategic linkage of companies (Medsebojna strateška povezovanja podjetij) Thinking about developing the so-called business internet site within the wood industry branch (V okviru lesarske panoge razmišljati o ustanovitvi ti. poslovnega portala) 20 Zbornik gozdarstva in lesarstva 83 company and in human resources management. Namely, the role of an individual in the system and relations among people change drastically. Business informatics is a branch, which in a way also has a strong influence on the development of the global business environment. For this reason it is becoming of strategic significance in companies, as it enables certain timesaving services (e.g. electronic business operation), and at the same time it deals with data of key importance for making the right decisions. Strategic thinking in business has also changed quite drastically due to the rapid changes in the global business environment, the changes being both in view of their contents and dynamics. The importance of environmental protection and its influence on business operation is changing drastically and gaining its significance with the globalisation of business environment. It mainly has an indirect effect on the changing of the company culture (values) and the forming of certain business processes. The model is formed on the basis of repeatability, efficiency and productiveness, whereby the important issue is (also) its practical applicability in Slovenian wood industry practice. This was ensured by making guidelines on the basis of which companies can organise their businesses. These guidelines include suggested measures for individual areas of business organisation with the intention of increasing adaptability and innovativeness of business operation, improving competitive ability, the ability of constant improvement of business operation and achieving long-term success in the global business environment. Thus, the aim of the research was achieved. In making the guidelines, special consideration was given to the specifics of wood industry. These specifics also have an effect on some organisational changes in business operation. On the basis of the most important specifics of wood industry companies, we can ascertain that globalisation demands different treatment of wood industry companies in certain places and is therefore specific. Working in the field of business organisation is by no means a one-time task, but moreover a constant one needing to ensure a system of monitoring, analysing and discussions of organisational solutions, which have to be aimed at reaching economic, development and other objectives of a company. And in this all, wood industry companies are no exception. 6 Povzetek Oblikovanje organizacijskega modela globalno usmerjenega lesnoindustrijskega podjetja je temeljilo na ugotovitvah iz teoretične obravnave vpliva globalizacije poslovnega okolja na spreminjanje organizacije podjetij in na analizi stanja v slovenskih lesnoindustrijskih podjetjih. Ena izmed pomembnih zahtev pri oblikovanju modela je bila ugotoviti, na kakšen način in s kakšnimi organizacijskimi ukrepi je lahko lesnoindustrijsko podjetje (bolj) prilagodljivo in uspešno v hitro spreminjajočem se (globalnem) poslovnem okolju. V tem oziru je bilo ugotovljeno, da so ustreznejša organizacija poslovnih procesov, s poudarkom na (učinkovitejši) organizaciji proizvodnega procesa, prilagodljivejša organizacijska struktura in celovitejša kakovost poslovanja temelj globalizaciji poslovnega okolja prilagojeni organizaciji poslovanja. Spremembe teh področij povzročajo in zahtevajo določene spremembe tudi v organizacijski kulturi podjetja in pri ravnanju z zaposlenimi in njihovimi zmožnostmi. Močno se namreč spremeni vloga posameznika v sistemu in s tem razmerja med njimi. Poslovna informatika je področje, ki na eni strani močno vpliva tudi na razvoj globalnega poslovnega okolja, zaradi česar na drugi strani postaja v podjetjih strateškega pomena, saj omogoča določene storitve, ki prihranijo čas (npr. elektronsko poslovanje), poleg tega pa ravna s podatki oz. informacijami, ki so ključnega pomena za sprejemanje pravih odločitev. Strateško razmišljanje pri poslovanju se je zaradi hitrosti sprememb v globalnem poslovnem okolju tudi precej spremenilo, tako vsebinsko kot v dinamiki. Pomen varstva okolja in njegov vpliv na poslovanje se z globalizacijo poslovnega okolja tudi zelo spreminja in pridobiva na veljavi. Ima pa predvsem posreden vpliv na spreminjanje kulture podjetja (vrednote) in oblikovanje določenih poslovnih procesov. Model je zasnovan na temelju ponovljivosti, učinkovitosti in plodnosti, pri čemer je pomembna tudi njegova uporabnost (tudi) v slovenski lesarski praksi. Ta je bila zagotovljena z oblikovanjem smernic, na podlagi katerih lahko podjetja organizirajo svoje poslovanje. Te smernice vključujejo predloge ukrepov na posameznih področjih organizacije poslovanja, z namenom povečati prilagodljivost in inovativnost poslovanja, izboljšati tekmovalno sposobnost in sposobnost nenehnega izboljševanja poslovanja ter dosegati dolgoročno uspešnost v globalnem poslovnem okolju. S tem je dosežen cilj raziskave. Pri oblikovanju teh smernic so bile dosledno upoštevane tudi posebnosti (specifike) lesarstva. Te posebnosti vplivajo tudi na nekatere organizacijske spremembe v poslovanju. Na podlagi najpomembnejših posebnosti lesnoindustrijskih podjetij lahko ugotovimo, da globalizacija zahteva za lesnoindustrijska podjetja na določenih mestih različno obravnavo in je zato specifična. 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