NRI Papers
No.60   January 1, 2003
  Control Configured Organizations (CCO):Delivering Both Speed and Scale Merits in Business Operations  
Koji NOSE, Masayuki SATO and Seigo ITO
        To maintain their competitive edge in today's world, corporations must simultaneously achieve two conflicting objectives: accelerating change and expanding their scale of operations. This requires a means of responding to the rapid pace of change in the business environment, as well as a concept that surpasses the strategic business unit (SBU) and taskforce organizations that form part of current business practice.
    In this paper, Nomura Research Institute, Ltd. (NRI) proposes the concept of a "Control Configured Organization (CCO),"* which is an organizational structure that proactively manifests instability. Within a CCO, the conventional line system controls business units in which various new projects are organized within the line system to deal with market needs and change. In short, it essentially manages both new projects and the line system effectively.
    A CCO offers the following advantages: (1) a non-linear, free-form communication network is created within existing communication channels; (2) business ideas are generated by frontline staff and the transactions and relationships they have with existing customers trigger these business ideas; and (3) the proposer of each business idea becomes the project leader and has complete authority to select the team to develop the idea.
    Moreover, introducing a CCO creates the following ripple effects: (1) there is a shift towards a corporate culture with a powerful entrepreneurial spirit; (2) it builds a talent market and allows for spontaneous, 360-degree appraisals; and (3) it intensifies competitiveness when recruiting staff members.
    As a CCO is designed to create instability within the organizational structure, management commitment is critical. Specifically, the following mechanisms need to be established: (1) support for the new business idea discovery process by offering avenues of communication among all staff members; (2) quick decision-making when initiating each project; (3) information-sharing among employees and coordinating the selection of project team members; and (4) appropriate, flexible personnel evaluations and performance management.

* The authors have coined the term Control Configured Organization (CCO) on the basis of the term "Control Configured Vehicle," which refers to the fuselage design of the stealth bomber used in the Gulf War.
I The Inherent Dilemmas in Current Corporate Organizational Structures
1 The Scale and Speed Dilemmas
2 Conventional Measures to Maintain the Speed of Change
II CCOs Proactively Create Instability
1 An Administrative System to Manage Both a Project and a Line Organization
2 Features of a CCO
3 The Advantages of the CCO Ripple Effect Throughout the Company
III Managerial Requirements for a CCO
1 Supporting Efforts to Discover New Business Ideas
2 Making Project Launch Decisions
3 Supporting Project Teams
4 Appropriate Personnel Evaluation and Performance Management
IV Two Case Studies
1 Case Study 1: High-Tech Manufacturing Company
2 Case Study 2: Software Development Company
V CCO: Activating Japan's Major Corporations


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