According to the model, management basically involves mastering complexity. As a result, it is founded on concepts and testing systems related to cybernetics.
Six dimensions are used to define organizational systems: stakeholders, processes, environmental spheres, structuring forces, interaction issues, and modes of development (Rüegg-Sturm, 2005).
The organization is seen as a whole by the St. Gallen Management Model. As a result, it provides a useful foundation for structuring organizational communication.
History of St. Gallen Management Model (SGMM)
The St. Gallen Management Model (SGMM) originated in the 1960s at the University of St. Gallen. Initially published in 1972 by Hans Ulrich, a trailblazer in German system-oriented management, and collaboratively developed with Walter Krieg, it underwent further refinement by Knut Bleicher (1991) and Johannes Rüegg-Stürm (2002).
In 1991, Knut Bleicher emphasized a three-tiered structure for corporate governance: normative, strategic, and operational management, aligned with Viable System Models’ systems 3, 4, and 5. Renamed the ” St. Gallen Management Model” in 2002, it reflects a commitment to integration and holistic thinking, driven by the evolving needs of education, research, and teaching.
This revision acknowledges that a functional management system must not solely rely on theoretical foundations but must also address the practical demands of reality, a realization championed by Hans Ulrich and his team.
Categories of St. Gallen Management Model
The innovative St. Gallen Management Model (SGMM) identifies six key categories.
Firstly, it addresses environmental spheres, stakeholder groups, and interaction issues, focusing on the social and ecological context.
Secondly, it delves into ordering moments, processes, and development modes, offering insights into the internal workings of the organization. Coined by Hans Ulrich, the term “vacancy framework for the meaningful” underscores SGMM as an executive design framework, promoting a holistic understanding of one’s enterprise for problem-solving. The model encourages flexibility for the integration of diverse methods and solutions.
- Environmental Spheres: Trends, changes, economy, ecology
- Stakeholders: Defining the organization’s purpose and the value it creates.
- Interaction Topics: Internal vs. External: Norms, values, resources, and other crucial aspects.
- Process Perspective: Examining the organization as a system of processes.
- Management processes
- Business processes
- Support processes
- Ordering Moments: Providing coherent orientation and meaning through:
- Strategy
- Structures
- Cultures
- Development Modes: Strategies for Optimization and Reinvention
1. Environmental Spheres
These pertain to relevant reference spaces in the company’s environment, including society, technology, economics, and ecology. Close analysis of trends and changes in these spheres is essential as the company interacts with their elements.
2. Stakeholders
Encompassing groups and individuals affected by a company’s value or damage, stakeholders’ needs represent the purpose of a company. Managing conflicting claims requires establishing rules and procedures through the normative orientation process.
3. Interaction Topics
These are objects central to exchange relationships between stakeholders and companies, covering norms, values, concerns, interests, and resources. Values and norms guide explicit laws, while interests and concerns represent self-interest and generalizable goals.
4. Process Perspective
SGMM views an enterprise as a system of processes, comprising management processes, business processes, and support processes. Mastering routine processes efficiently is crucial for entrepreneurial success.
- Management Processes: Encompassing tasks related to the design, steering, and development of purpose-oriented socio-technical organizations, these include normative orientation, strategic development, and operational management processes.
- Business Processes: Core activities geared toward customer value, including customer processes, service creation, and performance innovation processes.
- Support Processes: In-house services facilitating effective business process completion, such as educational and personnel work processes.
5. Ordering Moments
Everyday life, which takes the form of processes, necessitates a consistent orientation and meaning. The order moments are achieved by these functions. They emerge both explicitly and implicitly from everyday life and subsequently structure this. Thus, there is a circular relationship between order moments and processes. Culture, structures, and strategy are the sub-areas.
- Strategy: The long-term choices that create competitive advantage are the foundation of the strategy. The content dimension (“what?”) is designated by the strategy as a moment of order. It should include details on the needs, wants, and forms of communication of the stakeholders, the variety of services provided, the core competencies, the added value focus, and potential areas of cooperation. The strategic development process, on the other hand, is more concerned with the “how.” What design should be used for the generation process? In what ways are the contents communicated, both effectively and at various levels?
- Structures: In order to efficiently coordinate different sectors and determine the appropriate level of labor division, structures are required. Organizational structures (such as an organizational chart) and process structures—which specify which tasks must be performed in what order—are used to achieve this (for example, in the form of a process plan). Since these facts are well established, management can make changes in this situation rather easily.
- Culture: A company’s implicit, enigmatic structures are referred to as its culture. These consist of attitudes, reasoning patterns, norms, and values. The division of labor causes cultural differentiation within the enterprise. A company’s culture might be deemed a crucial success factor since its elements are hard for its creators to put into words and, as a result, hard for competitors to imitate. In contrast to the official organizational structure, it is difficult for management to influence the developed corporate culture because it is anchored organically and unconsciously in the behavior and thinking of employees.
6. Development Modes
The numerous types of development of a company are described by development modes. Optimization is the process of continuously improving what already exists, whereas renewal is the only spiky, discontinuous process of creating something entirely new.