Otd Graduate Research Paper Final Paper

Running Head: Border’s Graduate Research Paper

Border’s Organization Theory and Design Graduate Research Paper

Anthony Layton Harding

Wilmington University Graduate School

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Abstract

My research topic is on executive leadership management issues in the company Borders Books

relating organization theory and design to Borders, while I suggest organization theories to be

implemented to the board of Borders Book, so I can research a way for them to improve

operational characteristics while keeping them in business. What are the main problems Borders

is facing in year 2011? What is the “as is”, and the “to be” while doing a gap analysis? What is

the market potential, and gap of Borders? How is Borders structured, and how would I

restructure executive management? What does “images of the brain” mean in organization

design? Is Border’s organization approach aligned with “organizations as information processing

brains? Explain? How does it differ from organization as a holographic brain? How did I create

“social reality” in my design? My team is Stephan, Gabrielle, and Brittany. Together we have

formed team groups to discuss organization design theories that could be implemented in

Border’s business model. I am researching methods that include images of the brain, information

processing brains, holographic organizations, social reality, and Plato’s cave. I will conduct my

research on the school database; give firm examples from the Images of Organization the

Executive Edition while conducting a data analysis. “We learn to recognize that our favored

ways of managing and organizing often lead us to miss out on other ways of managing, and

organizing.” (Morgan, 1998 p.4)

Borders Organization Theory and Design Graduate Research Paper


“As we move into a knowledge based economy where information, knowledge, and

learning are key resources, the inspiration of a living, learning brain provides a powerful image

for creating organizations ideally suited to the requirements of a digital age.” (Morgan, 1998

p.69) This quote reminds me of the economic warfare going on now in today’s economy. While I

researched I began to become even more familiar with how important knowledge, information,

and technology are in today’s global competitive market. My research contribution questions are

what does “images of the brain” mean in organization design, is Border’s organization approach

aligned with “organizations as information processing brains, explain, how it differs from

organization as a holographic brain, and how did I create “social reality” in my design? On the

other hand in my fact-finding I first had to ask myself what is the problem with Borders, what is

the as is and the to be while doing a gap analysis, what is the market potential, and gap of

Borders, how is Borders structured, and how would I restructure executive management? My

research knowledge expertise is integrated with the team’s research questions. So, to answer my

questions during my research I had to find out what is the problem with Borders, and how will I

change their old business model using new organization theory and design techniques.

Literature Review

The main issue with Borders is that they are going out of business due to economic

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reasons, and their inability to adapt to their changing environment. “Borders Group Inc. filed for

Chapter 11 in an attempt to reorganize its business model and mend its finances. The company

stated that they have struggled with the growing popularity of e-Books and other digital reading

formats in recent years. According to Mike Edward, the President of Borders Group Inc., filing

for Chapter 11 was necessary in order to restructure debt while remaining open for business. He

stated that Borders does not currently have the resources required to be a competitive force in the

bookstore industry. Many of the problems Borders is experiencing are being attributed to the fact

that Borders did not pursue an active presence on the internet until 2008.”

(http://www.birminghamalbankruptcyattorney.com/2011/03/borders-books-turns-to-chapter-11-

bankruptcy.shtml) Borders stayed the same through it all, and did not give up its old system

because at the time it was working for them, but on the other hand today it made more problems

for the company now.

By doing a gap analysis on Borders while conducting research can help identify relations,

contradictions, gaps, and inconsistencies with the company that will suggest the next steps in

problem solving process. (American Psychological Association, 2010 pg. 10) There are 6 main

problems with Borders that caused them to loss their market niche they are failure to adequately

address the internet sales channel and the subsequent e-Book market, poor real estate strategy,

over-investment in music, over-reliance on assortment size to compete as opposed to efficient

operations, failure to build efficient systems and processes, and branding failure. Borders even

tried to open up more business overseas thinking the more stores they opened the more business

they will get. (http://www.quora.com/Borders-Books/Why-is-Barnes-Noble-performing-well-as-

a-business-while-Borders-has-filed-for-bankruptcy) “Amazon boasts of catalog of 900,000 books

in its Kindle store, and the company posted $9.86 billion in sales in the first quarter of 2011—up

http://www.birminghamalbankruptcyattorney.com/2011/03/borders-books-turns-to-chapter-11-bankruptcy.shtml

http://www.birminghamalbankruptcyattorney.com/2011/03/borders-books-turns-to-chapter-11-bankruptcy.shtml

http://www.quora.com/Borders-Books/Why-is-Barnes-Noble-performing-well-as-a-business-while-Borders-has-filed-for-bankruptcy



38 percent from last year.” (http://blog.heritage.org/2011/07/19/bookseller-borders-goes-belly-

up-but-save-your-tears/#idc-cover) This is where Borders has a gap in the market potential

because of its old business Model it kept using over the years. Borders should be more cognizant

of their environment, so they should implement organization and design theories to combat their

competition during these hard economic times.

Method

Gareth Morgan conducted the study of the methods used out of the book Images of

Organization. While researching on the internet, and gathering data from websites too the

company Borders old business model closely matched being mechanistic and Plato’s Cave ways

of seeing become ways of not seeing. The book says it best “being mechanized creates rigidities

that prevent organizations from adapting and flowing with change.”(Morgan, 1998 pg. 17) The

research results of the historical data gathered of Borders over time seemed to be old ways of

thinking. Since the economy is in financial crisis in these economic warfare times’ organizations

need to learn to learn, and have a good knowledge base that is why Borders has to learn from

Plato’s Cave. This old method compared the old U.S ways of thinking to the Japanese innovative

ways by stating “their particular style of excellence had become a trap that prevented them from

thinking in new ways and from transforming themselves to meet new challenges.” (Morgan,

2010 pg.183)

These are the methods used in the old Borders business model. Previous research

methods comparing Organization Theory and Design structures suggests to implement images of

the brain, holographic organization, information processing brains, create a learning

organization, and to create a social reality in the culture of the organization. Comparing the

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http://blog.heritage.org/2011/07/19/bookseller-borders-goes-belly-up-but-save-your-tears/#idc-cover


proposed methods vs. the current methods suggested. Borders need’s to use these because it is up

to date answers to get positive results based on historical data in the past. The above results differ

from the current because they all adapt their environment like an organism. Organizations have

to change inside and out with the times because they cannot stay stagnated like being

mechanistic just like a machine. Borders has to get the big picture not just the small same picture

that is why technological, and culture advances of the company are holographic. Just like a

distorted picture that can focus into a clear picture after you fix it on photo shop, and it becomes

clearer as you adjust the focus. Borders has to implement new technology like last year, but it is

never too late to recreate the organization structure in their leadership, management, products,

and business model with proper funding, and strategy. The next paragraph will explain the

results if Borders implements these suggestions.

Results

The implemented results will improve the companies’ operational characteristics because

of the past research to lead to the metaphors. The brain metaphor will work because the

American psychologist Karl Lashley did an experiment removing parts of the brain, and the

brain could still think. On the other hand when he took parts of the machine it would not work.

(Morgan, 1998 pg 70) Then it leads to the findings that can relate to Borders the most, and that

is “the evolutionary advantage of such an arrangement is manifest: when pursued, it is better to

run clumsily than not at all. The brain is an information processing system similar to a complex

computer. The brain has been compared with a holographic system.” (Morgan, 1998 pg 70)

Morgan (1998 pg.71) describes being holographic as throwing a pebble into a pond seeing the

results in each and every one of the drops of water just like Borders had to see the signs before

going out of business. When organizations are processing brains “strategic managers make


decisions by developing policies and plans that then provide a point of reference for the

information processing and decision making of others. Since organizations are becoming

synonymous with the decisions, policies, and data flows that shape day to day practice Borders

has to find ways of developing information processing and decision making tools that can lead to

more rational decisions.” (Morgan, 1998 pg.74) New technology would help reshape Borders

organizational Design while fitting the new design of a virtual organization of “organizing

without having an organization”(Morgan, 1998 pg.75) because it is the new knowledge based

economy.

The next results researched were creating a learning organization while Borders

organization learns to learn like the Japanese in Plato’s Cave, and implements the internet and

the transformation of commerce wave. The company will fully commit to “transforming retailing

and electronic commerce by collaborating with manufacturers, distributors, credit card and

finance companies to produce a pattern of direct interaction between customers and

manufacturers. Eliminating intermediary firms, such as retailers, the development is enhancing

possibilities for mass customization.” (Morgan, 1998 pg.76) This is system intelligence, which

leads to the information economy that Borders did not assimilate to until it may have been too

late. “ All these developments break old assumptions that the structure and capacities of our

organizations are limited by constrained information processing, or what Nobel laureate Herbert

Simon called the bounded rationality of human beings. While human intelligence is still the

driving force, networked computing is able to realize organizational possibilities that, just a few

decades ago, were no more than a dream.” (Morgan, 1998 pg.76) Borders can get back on course

by just moving in the opposite direction. Research proves this true in the creating organizations

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cybernetics definition “ a system to engage in self regulating behavior depends on processes of

information exchange involving negative feedback.” (Morgan 1998 pg.76) The brain differs

from a holographic organization in the aspect that its 5 steps in the cycle that helps a holographic

organization flourish. The first principle is build the whole as parts this is the corporate D.N.A,

second the importance of redundancy, third requisite variety, forth-minimum specs, and five

learn to learn. A holographic organization has to flow in this way for it to work. (Morgan, 1998

pg.94) Lastly the Borders have to have some type of social reality by creating a shared vision.

Research suggests that the culture of the organization characteristics needs a “new mindset, and

new values for doing business. Many organizations succeeded in revolutionizing and reinventing

themselves through the values of quality and customer service, but as many as 70 percent of the

firms that set off on this new path were unsuccessful, largely because they failed to replace the

bureaucratic logic governing the old mode of operation. To be effective Borders need to

transform prevailing organizational mindsets and political patterns.” (Morgan 1998 pg.136) If

Borders does not follow the designs the book says it will fail.

Discussion

So to sum it up the basis of research was to answer four questions, and they were what

does “images of the brain” mean in organization design? This is metaphor used to create a

learning organization that is able to adapt to its changing environment, innovate, and evolve all

at the same time. The brain is an intelligent organism that is knowledable, and creative. “The

brain metaphor identifies the requirements of learning organizations in a comprehensive way,

and how different elements need to support each other.” There is more than 1 design in the

images of the brain theory. For example Borders could see the signs a long time ago when their

profits decreased, so they should of reacted on their holographic outlook instead of staying


stagnated. Then adding more technology and electronics for the information processing brains.

(Morgan 1998 pg.107)

Is Border’s organization approach aligned with “organizations as information processing

brains? Explain? Borders was not originally aligned as organizations as information processing

brains because the companies old styles of being mechanistic and Plato’s Cave ways of seeing

become ways of not seeing, affected negatively but just like a information processing brain

Borders can self regulate, and go in the opposite direction by applying the cybernetics theory.

Borders was to stuck in its old ways of doing things they tried to innovate to late then gave up

hope of recreating their self. In the end they will listen to Organization Theory approach, and the

company will act more like an information processing brain.

How does it differ from organization as a holographic brain? “Holography demonstrates

that it is possible to create processes where the whole can be encoded in all of the parts, so that

each and every part represents the whole.” (Morgan 1998 pg.71) It also differs because when the

holographic brain is injured, or removed the organism can still recognize itself. Just like “Young

children who lose a complete hemisphere of their brain are often able to recover lost functions as

the remaining hemisphere takes over.” (Morgan 1998 pg.92) Just like what Borders was doing to

survive depending on Amazon, or just enough funding to survive month to month.

How did I create “social reality” in my design? By creating holographic organization

design with Borders. Recreating the culture of the company will be during the process of

implementing all the above results. This will be the strength of the organization by “showing

how the organization ultimately rests in shared systems of meaning, hence in the actions and

interpretive schemes that create and recreate that meaning. Under mechanical and organism

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metaphors, primary emphasis tends to be placed on the importance of organizational design: the

design of organizational structures or the design of adaptive processes.” (Morgan, 1998 pg.140)

The culture of the organization characteristics needs a “new mindset, and new values for doing

business. Many organizations succeeded in revolutionizing and reinventing themselves through

the values of quality and customer service, but as many as 70 percent of the firms that set off on

this new path were unsuccessful, largely because they failed to replace the bureaucratic logic

governing the old mode of operation. To be effective Borders need to transform prevailing

organizational mindsets and political patterns.” (Morgan 1998 pg.136)

Conclusion

So in conclusion, Borders has to implement these changes immediately. The old ways

created a market gap that Borders should of seen a profit if they innovated enough because they

been around in the industry for awhile. Even if Borders is going out of business I suggest to the

research and development team, the board, and strategic managers to look over the proposal of

the organization theory and design theories. If executed, and if executive management can

provide funding for the project the company will be successful for the years to come going into

the information economy. Our American Businesses have to be strong in the face of adversity in

these economic warfare times.


References

Gareth Morgan. (1998). Images of Organization: The Executive Edition. Thousand Oaks,

California: Sage Publications

American Psychological Association. (2010). Publication Manual of the American

Psychological Association: THE Sixth EDITION. Washington, DC: American

Psychological Association

Ovide, Shira. (July 2011). It’s Official: Borders Going out of Business. Retrieved 8-11-2011

http://blogs.wsj.com/deals/2011/07/21/its-official-borders-is-going-out-of-business/

Phil Wahba, Tom Hals, Santosh Nadgir, and Terry Baynes. (2/17/2011). Border Turns to Chapter

11 Bankruptcy. Retrieved 8/11/2011

Brownfield, Mike. (7/19/2011). Border Bookseller Goes Belly Up, but Save Your Tears.

http://blog.heritage.org/2011/07/19/bookseller-borders-goes-belly-up-but-save-your-

tears/#idc-cover

Evans, Marks. (2/17/2011). Why is Barnes and Noble performing well as a business while

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http://blogs.wsj.com/deals/2011/07/21/its-official-borders-is-going-out-of-business/

Borders has filed for bankruptcy? Retrieved 8/11/11

http://www.quora.com/Borders-Books/Why-is-Barnes-Noble-performing-well-as-a-

business-while-Borders-has-filed-for-bankruptcy

Morris, Rothenal. (2011). Book Sale Statistics. Retrieved 8/15/11

http://www.fonerbooks.com/booksale.htm

Appendices

What does “images of the brain” mean in organization design?

See results and discussion

Is Border’s organization approach aligned with “organizations as information processing brains?

Explain?


How does it differ from organization as a holographic brain?


How did I create “social reality” in my design?


http://www.fonerbooks.com/booksale.htm




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