2 Traditional business model
The traditional organizational business model [developed more than a century ago in Britain as 'the
method of doing business by which a company can sustain itself – that is to generate revenue' (Rappa,
2001)]' was driven by pre-specific plans and goals, aimed to ensure optimisation based primarily on
building consensus, convergence and compliance' (Malhotra 2000b).
In this traditional model ['tightly bound command-and-control hierarchy with headquarters staff calling
the shots from the top' (Viscio and Pasternack 1996)], organizational information and control systems,
performance and behaviour were modelled on the same paradigm, to enable convergence by ensuring
adherence to the organizational tried-and-true model, the company way, rules of thumb, procedures,
processes and archived best practices to ensure profits and sustainability. As described by Malhotra in
his article, A Framework for Business Model Innovation, this routinization of organizational goals for
realizing increased efficiencies is suitable for that era, which is marked by a relatively stable and
predictable business environment (Malhotra 2000b). 'The pace of change was relatively predictable
with some level of certainty', while the components to sustain success ('information, control and
performance systems; the procedure manuals, rules of thumbs and best practices in the minds of
managers and workers who have comfort in following "tried and tested" business practices') is safely
and comfortably embedded in the company's recipe for success (Malhotra 2000a).
In the traditional economy, business dictated to customers and customers had to buy what
organizations had to offer them to suit their needs. Customers' needs were artificially created and
manipulated; therefore, the service and products rendered to them could be planned in advance. It is
clear that the old world of business, with its predefined recipes for success and pre-determined
strategies and business conduct, was focused on its inner self and its products. Business existed in a
comfort zone and organizations were able to programme and archive their business procedures and
know-how in databases and human minds for any significant duration of time as 'programmed
logic' (Malhotra 2000a).
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:tut/oai:encore.tut.ac.za:d1001008 |
| Date | 01 March 2004 |
| Creators | Steenkamp, CJH, Arnoldi-van der Walt, SE |
| Publisher | Inter-World Communications |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Text |
| Format | |
| Rights | Inter-World Communications |
| Relation | South African Journal of Information Management |
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