Sustainable Strategy Insights from Centenarian Fortune 500 Companies

The organization that I chose from the Fortune 500 List is McKesson Inc., which is ranked number 5 on the list. I am familiar with McKesson as the hospital I currently work for uses McKesson as a distributor for our pharmaceutical needs and is one of the largest distributors in the United States.

What organizational characteristics do you think explain 100 years of longevity?

Many organizational characteristics explain why McKesson has been so successful, but flexibility stands out. As with anything in this world, there is always change, and there needs to be flexibility. McKesson has remained flexible to change throughout the years. I think a lot of their success with change has been specialization. “Specialization is the degree to which organizational tasks are subdivided into separate jobs (Draft, p.18).” Throughout the years, McKesson has changed and added specialized divisions to the company. They started as just a manufacturer of simple medications and now are a leading distributor of pharmaceuticals, medical supplies, generic pharmaceuticals, and specialty services to providers (Mckesson.com, 2018).

What are the primary differences between an organic and a mechanistic organization design? Which design is your researched company, and how did you determine that?

“An organic design means that the organization is much looser, free-flowing, and adaptive (Draft, p.29).” My thoughts on organic design are photography or art-related business. There is not much structure and a freer-flowing thought process. Another that comes to mind is any business related to creating apps, where the business structure is more open to encouraging free-flowing thoughts and less in the way of designing and setting paperwork/policies.

“A mechanistic design means that the organization is characterized by machine-like standard rules, procedures, and a clear hierarchy of authority (Draft, p.29).” This design for a business is more corporate and structured. What comes to mind when I think of this design would be the structure and uniform standards of a bank. In a bank, there is structure paperwork processing, and an organizational management chart.

As for McKesson, they are more of a mechanical design. They have structure and are formalized. There are different departments with rules and policies in place.

Early management theorists believed that organizations should strive to be logical and rational, with a place for everything and everything in its place. Discuss the pros and cons of this approach and any application to your researched organization.

With this rationale, there is always room for slightly bending the rules. To be logical and sensible all the time, in my opinion, would snuff out freethinking and possible future growth options. Every organization works differently, but all successful are open to new ideas and opinions. There are pros, such as less risk involved and other projects/ideas being looked at maybe more conservatively, but there also needs to be a balance of new and innovative ideas that might involve some risk.

McKesson has structure and organization, but there is room to grow and try new things. They have had many acquisitions, expanding them into new roles within the pharmaceutical world. How could a company grow and adapt to change if everything had a place with a place for everything?

References

Daft, R. L. (2016). Organization Theory and Design, 12th Edition. [Chegg]. Retrieved from https://ereader.chegg.com/#/books/9781305533882/

Fortune. (2018). McKesson. [online] Available at: http://fortune.com/fortune500/mckesson/ [Accessed 7 Mar. 2018].

Mckesson.com. (2018). Company Profile & Description | McKesson. [online] Available at: http://www.mckesson.com/about-mckesson/who-we-are/ [Accessed 7 Mar. 2018].

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A handful of companies on the Fortune 500 list are over 100 years old, which is rare. Research and discuss one of those organizations.

Sustainable Strategy Insights from Centenarian Fortune 500 Companies

1). What organizational characteristics explain 100 years of longevity?

2). What are the primary differences between an organic and a mechanistic organization design? Which design is your researched company, and how did you determine that?

3). Early management theorists believed that organizations should strive to be logical and rational, with a place for everything and everything in its place. Discuss the pros and cons of this approach and any application to your researched organization.