The hidden costs of "how" companies

Abstract

The article deals with the issue of hidden costs that arise from the traditional management model. With respect to this article, two techniques were used, namely quantitative research and literature analysis. Consequently, from the research, it can be predicted that most companies prefer a management principle which inclines more towards efficiency than to performance. This principle is a part of the traditional management system through which the organizational culture of "HOW" is implemented. The relevance of this culture directly increases with increasing organizational size. Nowadays, most large organizations employ a management system that suppresses human potential. This system is based on rules, orders and controls. Thus, the hidden costs of this model are apathetic staff, lost revenues and mainly work-related stress. These factors, which cause a lack of participation in the workplace, similarly lead to poor performance capacity on the part of companies. They negatively affect the overall productivity of the economy and cause considerable social costs. Therefore, a new management system based on the WHY culture will be suggested as an alternative to the traditional management system. This system, which releases initiative, creativity and enthusiasm, was investigated in the Toyota and FAVI companies. Its aim is to eliminate the negative consequences of the traditional management model. The key features of this model are autonomy, freedom and responsibility, all three of which enrich the system with the ability to learn iteratively from one's own mistakes.