June 7, 2017

The Socio Economic Approach to Management (SEAM)

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The primary source for this article is the literature review by Chato B. Hazelberger in his Phd Thesis "Looking for the Evidence of TFW Virus." [School of Education UST, Minnesota, 2014].

In the 1970’s the Socio Economic Approach to Management (SEAM) was created in France as a systematic approach to management. Henri Savall and a group of researchers sought to integrate classical scientific management theories with the human relations school (Savall, 2010). The goal was to recognize and integrate the human factor, which according to the SEAM founders was overemphasized by the neoclassical human relations school and underappreciated by the traditional proponents of scientific management. What emerged was SEAM, which found its home at ISEOR. In 1973 ISEOR was created to manage SEAM consulting, and later doctoral work in SEAM (Savall, 2010).

SEAM is carried out by a team of consultants, who are referred to as intervener researchers. This title reflects the consultant’s role as both a consultant in the change process, and in continuing the research work of ISEOR.

Key to SEAM is the concept of hidden costs (Savall, 2008). Hidden costs are economic inefficiencies that come from dysfunctions. Dysfunctions can be explained as the gap between what is planned or directed and what actually occurs in the organization. By getting rid of the dysfunctions, an organization can release untapped potential allowing greater growth, new ideas, and cost savings.

SEAM classifies looks for dysfunctions in any of six categories: working conditions, work organization, time management, communication-coordination-cooperation, integrated training and strategic implementation. By finding dysfunctions in these areas and revealing their costs, SEAM finds additional revenue that can be returned to the bottom line, create potential for individual growth which will benefit the organization, and provide a better working environment.

From the beginning, SEAM was concerned about not just making organizations more effective, but also in studying the causes of the six dysfunctions. Early on, Savall (2013) suggested there was a flaw in the classic economic models. The classic models left out the human component. In searching for why this human element had been left out, the team at ISEOR identified that it was due to an overreliance on scientific management. They saw this particularly in the elements of scientific management as put forth by Frederick Taylor, Henri Fayol and Max Weber. ISEOR observed scientific management had an ideological flaw.

Acknowledging that scientific management had an ideology was important to understanding the TFW virus. Ideology “... describes the system of beliefs, values, and practices that reflects and reproduces existing social structures, systems and relations (Brookfield, 2005, p. 68).” An ideology is put forth as the true system of belief within the dominant group and is propagated as the one true way. Savall and his contemporaries at ISEOR observed that what was at the core of the scientific management was an ideology. That ideology was based on the work Taylor, Fayol, Weber.

When the Academy of Management was asked to update their list of the top 10 outstanding contributors to American business management thought and practice Taylor was named number one, Weber two, and Fayol five (Heames 2009).

The concept that setting goals is a management task is found in Fayol’s work and that element of strategic planning is found also in Porter and Kotter.

 Savall first put forth the metaphor of the virus in 1973 (Cristallini, 2012). He used the metaphor of a virus for three reasons:
• The virus was ideological in nature, contaminating decision making and analysis at a foundational level
• The virus caused changes in organizational structures and behavior
• The virus was continually transmitted within and to other organizations through training, practice, and management education

In his article “The role of governance in the fight against the global pandemic of the techno-economic virus,” Cristallini (2011) wrote extensively about the TFW virus as the root cause for the hidden costs and dysfunctions that ISEOR finds in organizations. He asserted that organizations are carrying this hidden virus. It is going undiagnosed, and current organizational change efforts are treating symptoms of the virus rather than the core problems of the organization which is the presence of the virus.

 Cristallini (2012) made the case that the proponents of the TFW virus view individuals as untrustworthy, and not intelligent or responsible. The individual is not free. In contrast to this, SEAM sees the individual as creative, and able to grow, change, and be trusted to do what helpful to the organization given the chance.

The virus promotes the view of individuals as untrustworthy with the health of the organization and even the protection of their own interests. This baseline belief about the individual leads to the conclusion that individuals must be controlled in order to do what is in their best interest and the best interest of the organization. The effect of this view of individuals is manifested in the symptoms of the TFW virus.

Manifestations of the Virus.

(Cristallini, 2011):
• Depersonalization and Submission
• An aristocratic view of the organization
• Apathy
• Separation

Cristillani (2011) argued two concepts promoted by the founders of the TFW Virus are depersonalization and submission. Cristallini (2011) explained depersonalization as the individual giving way to the needs of the organization. “Submission assumes that the individual complies with the requirements, because it accepts the principle of subordination, it is docile and waives his freedom and his aspirations” (p. 3). Depersonalization at its core is looking at the worker as a machine. The individual is unimportant; another resource to be used that is replaceable and interchangeable with any other worker (or possibly a machine).

Cristallini used the word massification to explain the concepts of depersonalization and submission. One image that Cristallini (2011) gave for massification was herding cattle. In the workplace that exhibits evidence of the virus there is a herder, and then there are the workers, who are the cattle who must be pushed along. No cow is different, and the job of management is simply to get the cattle to move in the right direction.

As defined by Cristallini (2011), submission occurs when individual aspirations and preferences give way to organizational good. More than just existing as a second consideration, individual aspirations and preferences must be in some ways suppressed in order to achieve organizational goals. Massification is also the result of the technocratic nature of organizations where the virus is present. Organizations are governed by rules and systems that are inflexible. Organizational rules, procedures, and standards, replace dialogue between understanding and intelligent individuals, unable to handle the unexpected and complexity because of their structure.

 “The TFW virus is profoundly marked by an aristocratic view of organizational life” (Conbere, Heorhiadi & Cristallini, 2014, p. 4) Cristallini (2011) argued that the separation of menial and noble tasks within an organization is evidence of the virus. Since some tasks are considered more important, the people who have the more important tasks are considered more important. This leads to artificial hierarchies. Time and energy are spent on the management of the hierarchy rather than on tasks related to the mission of the organization.

Apathy, or a lack of interest in work, results from a lack of hope. Conbere, Heorhiadi & Cristallini, (2014) used a similar concept in the term “blindness,” noting, “Our blindness prevents us from seeing, and thus we become unable to hope that it is possible to implement organizations which are flexible, cooperative and more livable” (p. 8). Socioeconomic approach tries to develop more livable organizations.

 In his original work Cristallini (2011) explained apathy partly as non-cooperation, “The virus has the effect of encouraging individuals and groups to withdraw their known world and not to open outwards” (p. 6). This non-cooperation is the workers way of disengaging essentially because the organization does not incent workers to cooperate. Apathy is a key to the virus because apathy means people are resigned to whatever happens, who do not feel that they can or even should affect change in the organization (Cristallini, 2011).

Another way the virus manifests itself is in separations or divisions in the workplace, marked by borders, walls and fences. One reason for these walls is hyperspecialization or the separation of functions based on faulty logic. Cristallini (2011) saw a linkage between the separation of tasks and an increase in egotism and selfishness. He said the virus is observed when group effort is not recognized; instead individual tasks in very specialized areas are encouraged and promoted. People are not rewarded for teamwork and cooperation, but rather excellence in their own small task. Therefore the focus is not on making the whole better, but rather on making oneself look better. This non-cooperation is evidence of the virus as well, as hyperspecialization is rewarded over teamwork and the effect on others is not considered. The virus encourages the building of walls between areas of the organization.


Becoming Agile: How the SEAM Approach to Management Builds Adaptability

Christopher G. Worley, Veronique Zardet, Marc Bonnet, Amandine Savall
John Wiley & Sons, 15-Sep-2015 - Business & Economics - 192 pages

Becoming Agile: How the SEAM Approach to Management Builds Adaptability illustrates the process of becoming an agile organization. Reflecting the principles presented in The Agility Factor, readers are taken on a real-world journey of transformation and change. This short-format case study of the French company Brioche Pasquier highlights how one organization successfully implemented the principles of agility using the socio-economic approach to management, detailing each step of the process and describing how every decision brought the goal closer within reach. Readers get inside the heads of decision makers to gain insight into how tough decisions were made, how new, important, and flexible management tools were implemented, and how the necessary changes ultimately benefitted both the organization and the people who made it work. From overarching policy to day-to-day procedure, the story provides a clear example of how an agile organization is developed, giving readers a foundation upon which to implement similar changes in their own organization.

 This case study allows readers to learn from an organization that got through the inertia and put the principles of agility into action, with incredible results.

Understand how the principles of agility can be implemented using a specific intervention strategy
Tailor those principles to suit any organization
Calculate and convert the "hidden costs" of traditional organizational design into flexible, value added activities
Formulate and execute an actionable agility strategy
Big changes require a deep understanding of the problem at hand, and a viable plan for steering the organization in a better direction. By seeing how it's been done before, organizations can take a proven approach and tailor it to their specific needs. For those tasked with formulating the agility strategy, Becoming Agile: How the SEAM Approach to Management Builds Adaptability provides invaluable insight.


Mastering Hidden Costs and Socio-economic Performance

Henri Savall, VĂ©ronique Zardet
IAP, 2008 - Business & Economics - 346 pages

 As research and theory building in management consulting have grown rapidly during the past several years, the series is dedicated to capturing the latest thinking from applied scholars and scholarly practitioners in this field.  This volume is a translation and modest updating of Henri Savall and Veronique Zardet's original work on mastering "hidden costs," initially published in French in 1987.


Socio-economic Interventions in Organizations: The Intervener-researcher and the SEAM Approach to Organizational Analysis

Anthony F. Buono, Henri Savall
IAP, 2007 - Business & Economics - 441 pages

The volume begins with a chapter by Henri Savall, founder and director of the ISEOR Institute and creator of the SEAM methodology, that presents an overview of the development of the socio-economic approach to management, and its guiding frameworks and methodology. The chapter's detailed explanation of the underlying thinking, tools, and techniques of socio-economic management serves as the primer for the remainder of the volume. The book is then divided into three sections. The first part presents illustrations of SEAM interventions in different types of organizations, including industrial and service companies, and not-for-profit organizations, including cultural institutions and sports clubs. The next section looks at cross-cultural applications and assessments of SEAM experiments in Africa, Asia, Mexico, and the United States, with a concluding chapter on intervening in multinational corporations in general. The volume concludes with a section that examines different issues and challenges in SEAM intervention, ranging from the impact on and role of middle managers in the SEAM process, intervening in small organizations, SEAM's facilitative role in operationalizing and institutionalizing information technology, conceptualizing, and implementing organizational change, facilitating merger and acquisition integration, and the application of socio-economic management in sales and marketing. The book also contains a combined glossary and chapter index that provides a definition of key terms and concepts in the SEAM methodology and where they appear in the volume. These key terms are highlighted in bold italics throughout the volume, illustrating their application in different contexts.


Work and People: An Economic Evaluation of Job-enrichment

Henri Savall
Originally published in 1974 in French - based on phd thesis of Savall
IAP, 2010 - Business & Economics - 268 pages

This is a reprint of Henri Savall's classic Work and People, originally published in French in 1974.

Savall's insights into the complexity of organizational life were groundbreaking, articulating the need to examine both economic and social factors as part of the same analysis, assessing technical and behavioral patterns through the lens of an integrated framework. As he has argued, there is a double-loop interaction between "the quality of functioning and economic performance," and underestimating this socio-economic "tension" leads inevitably to reduced performance and losses, which he refers to as "hidden costs." This approach, referred to as the socio-economic approach to management (SEAM), has significant potential for our thinking about organizational diagnosis and intervention. As Savall emphasizes, the North American tendency to cast people as human "resources" misses the essential point that human beings cannot be considered as simply another resource at the organization's disposal. People are free to give or withhold their energy as they desire, depending on the quality of formal and informal contracts and interactions they have with their organizations. As such, the SEAM approach focuses on human "potential," underscoring the need for managers and their organizations to create the conditions under which people will want to maximize their talents on behalf of the organization. Work and People focuses on the ramifications of this reality, as dysfunctions - the difference between planned and emergent activities and functions - can quickly lead to a series of costs that are "hidden" from an organization's formal information systems (e.g., income statements, balance sheets, budgets). As his insightful work underscores, as organizations begin to accumulate dysfunction upon dysfunction, they inadvertently undermine their performance and create excessive operating costs, with lower productivity and less efficiency than they could achieve. As readers will discover, the frameworks, tools and ways of thinking about organizations, people and management in this volume - in essence the background to the socio-economic approach to organizational diagnosis and intervention - continue to hold great promise for our attempts to create truly integrative approaches to management and organizational improvement efforts.

Updated 9 June 2017,  27 May 2017

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