Book Review on 'The Modern Firm' Essay Example | Topics and Well Written Essays - 1500 words

Book Review on 'The Modern Firm' - Essay Example Thus, these insights can be more readily applied to any developing business firm to achieve the desired level of success. According to the Economist, The Modern Firm is the "..best business book of the year...deserves to be a classic...Nobody, it can now be said, is fully fit to run a modern firm until they have read "The Modern Firm. " (The Economist, 16th December, 2004). Times also agrees with Economist calling the book â€Å"interesting† that is not so in many business literatures. Objective The book’s objective is to explicate some of the core concepts in organizational economics in a language accessible also for the lay people (Fredrick Tell, November 2006). The Wave of Change In this book a strong conceptual framework has been developed to analyze the interrelation between business environment, competitive strategy and organizational design features. According to Fredrick Tell, the essential problem that Roberts discusses is how features of strategy and organizat ion can be modified by a â€Å"designer† so as to achieve higher level of performance in relation to the firm’s context. Industries from all the corners of the globe are introducing new and modern designs for their organizations. They are going in for better and innovative architecture. They are changing their processes and routines. Thus, we find that the total corporate culture is undergoing a dramatic transformation in a bid to maximize their profit. However, all these changes are contributing towards a great upheaval that promises to reconstruct the entire organization. Hence, we can see that the values and beliefs of any organization are greatly transformed with the passage of time. The changes do not stop at the infrastructure level but move on to the power making authorities too. Hence, newer governing bodies are being formed within the organizations that affect the overall decision taking authority. The organizational charts are being redrawn while the manpower is shrunk and made as diverse as possible. Outsourcing is also coming up as a cost effective and simple solution that solves much of the productivity problems. The mechanism to reward and motivate people is being revamped. The information system is also being redesigned to include latest technologies. Hence, the entire organization is suffering a facelift to present the business in a healthier and better way. Compulsory Changes John Robert argues in favor of these changes as he says that they are compulsory for the growth of the industries. He says that these changes would affect the organization in a better way and accelerate the companies’ performance and growth. However, the writer cautions that the change should not be done to the cost of the basic profit formula. The industries that are already successful and showing great monetary returns should continue to embrace that winning formula while affecting the required overall change. The Determinants of Performance Accordi ng to the writer, the performance has three determinants- Strategy, Organization and Environment. Strategy: What merchandise is suitable for which market? Organization: It consists of a collection of workers and the way they are grouped. Environment: Customers, competitors, technology, regulatory and regal context, various social, demographic and political features, and so on. When all three determinants work in accordance with each other then the performance level is maximized that result in a greater level of achievement. PARC PARC is Roberts’