Intra-Organizational Efficiency

Business management and organizational structure has come a long way since the time of Adam Smith's book Wealth of Nations. Throughout the decades businesses have become very efficient and have squeezed out much of the waste they may have experienced in the past. Costs passed on to consumers have decreased while corporate profit margins have increased. However, many business managers are left wondering how they might increase efficiency beyond the concrete methods used in the past.

The competitive market in the global world can be voracious with developing countries maintaining lower labor and input costs then many American companies. The competitive landscape of American dominance must rely deeply rooted in stronger management techniques and greater productivity. Productivity isn't seen only in terms of the amount of pieces produced per hour or per employee but also in terms of products produced per resources used (Return on Investment).

It isn't easy to squeeze more productivity out of the operations of an organization when the business is already running well and equipment has already been updated. At that point only general improvements to the intellectual and innovative abilities of the organization are likely to make meaningful differences. A business must step into a higher order to gain a new level of proficiency and productivity. This is why intellectual capital is likely to be a key factor in the future.

However, there are a few innovative places to look for intellectual capital whereby new ideas for improvements can be found. Business leaders can look at network clusters of efficiency, the policies of their organization and the intrapeneurial abilities hidden deep within their organization. However these areas where improvements may be found are not easy.

In the first case supply chains often develop efficiencies called network clusters (Niu, Miles, & Lee, 2008). These efficiencies develop because small groups of supply chain businesses that regularly interact thereby learning to adjust to each other in order to create smooth transitions of products. These positive adjustments are precisely where companies should look in order to implement new ideas into their own processes.

One may wonder why these processes develop. The heart of the matter is that people are lazy and when they can develop a process or innovation that makes the job easier they will often create efficiency. For example, a company might upgrade their purchasing software to include easier ordering or may adjust their shipping docks to more easily handle their vendor's products. In the end, the constant interaction of these businesses helps make small adjustments that add up over time to big savings of both time and money.

The concept of finding clusters of knowledge also coincides with adjusting policies in order to better match them to vendor processes. When policies take into consideration vendors processes a symbiosis begins to formulate (Teichert & Bounchen, 2008). For example, the process of ordering products matches the time frames and processes of the vendors which make the process faster and more efficient.

Many of the new frontiers to innovation lie in the intra-organizational processes and innovations developed for handling transactions. These relationships and intellectual capital aren't often explored for the further development of efficiencies within businesses. However, companies that have exploited every obvious place for improvement need new frontiers in order to avoid complacency and non-competitiveness. Intra-organizational management offers that new frontier without the costs associated with new ventures.

De Clercq, D., Cataner, X. & Belausteguigoitia, I. (2007). The secrets of intrapreneurship. European Business Forum, 31, 40-45.

Niu, K., Miles, G, & Lee, C. (2008). Strategic development of network clusters. Competitiveness Review, 18 (3), 176-191.

Teichert, T. & Bounchen, R. (2008). Strategic Impulses for innovation in supply chaings. Academy of Management Proceedings, 1 (6). Retrieved November 18, 2008 from Ebscohost database.