The New St. Gallen Management Model

The model assumes that management primarily means mastering complexity. It is based accordingly on testing systems, cybernetic discoveries and concepts. It describes organizational systems along six dimensions: environmental spheres, structuring forces, stakeholders, processes, interaction issues and modes of development (Rüegg-Sturm, 2005). The New St. Gallen Management Model views the organization as a whole. It thus serves as an effective framework for structuring organizational communication. However, it is perhaps excessively descriptive.

The Origins of The New St. Gallen Management Model
The St. Gallen Management Model (SGMM) is a management reference framework developed at the University of St. Gallen in the 1960s, first published in 1972 by Hans Ulrich , the pioneer of system-oriented management theory in German-speaking countries, together with Walter Krieg and later initially developed by Knut Bleicher (1991) and Johannes Rüegg-Stürm (2002). Great general prominence has been found in 1991 by Knut Bleicher highlighted structure of the tasks of corporate governance in three levels: the normative management, strategic and operational management. These three levels correspond to systems 3, 4 and 5 of the Viable System Models. The revised model has been known as the "New St. Gallen Management Model" or "HSG Approach to Integrated Management Theory" since 2002. The motive for the renewal results, on the one hand, from the pursuit of integration and wholeness, and, on the other hand, from the development of a thought pattern for dealing with further education , research and teaching . Hans Ulrich and his team were aware that a functioning management system can not only be based on pure science, but must also meet the demands of reality.

source: Cornelia Geissler, Christian Krys

The Central Categories of The New St. Gallen Management Model
The new St. Gallen management system distinguishes six central categories. On the one level are the categories environmental spheres, stakeholder groups and interaction issues that relate to the social and ecological environment. On the other level are the categories ordering moments , processes and development modes, which refer to the internal view of the organization. Hans Ulrich introduced the term "vacancy framework for the meaningful" with the development of the first SGMM. Thus, the St. Gallen model shows as a design framework for executives, in order to recognize the own enterprise as holistic and to identify and solve problems from it. In addition, the vacancy framework should provide enough flexibility to implement further methods and solutions.

• Environmental Spheres: Environmental spheres refer to relevant reference spaces in the environment of the company. The company interacts with the elements of these systems, which is why they are very closely analyzed for trends and changes. Society is the most comprehensive of these spheres. However, technology, economics and ecology are also important.
• Stakeholders: Stakeholders refer to all groups and individuals who are somehow affected by the value or damage created by companies. [6] The value added for these stakeholders is the purpose of a company. Claims of different parties, however, are necessarily conflict-laden, which is why the company has to find rules and procedures within the normative orientation process in order to prioritize.
• Interaction topics: "Interaction issues are the objects of the exchange relationships between stakeholders and companies around which the company communicates with its stakeholders". These are norms and values , concerns and interests as well as resources . Values refer to fundamental views about a worthwhile life, norms are based on them and designate explicit laws and regulations. Interests refer to immediate self-interest, while concerns are generalizable goals. These personal and cultural elements are the object-bound resources across from.
• Process Perspective: The most important process categories of the new St. Gallen Management Model. The St. Gallen Management Model understands an enterprise as a system of processes . Processes are routine processes that shape the everyday life of a company. In the superior mastery of these routines, especially in a short process time, is an important prerequisite for entrepreneurial success. A distinction is made between management processes, business processes and support processes.
  • Management processes: Management processes encompass all basic tasks related to the "design, direction (steering) and development of purpose-oriented socio-technical organizations". A distinction is made between normative orientation processes, strategic development processes and operational management processes.
  • Business Processes: Business processes embody the core activities of a business, which are geared directly to customer value. They include the customer processes (brand management processes, customer acquisition processes and customer loyalty processes), the service creation processes and the performance innovation processes.
  • Support processes: This is where in-house services for an effective completion of business processes are accomplished. These include, for example, processes of educational work ( learning processes ) and personnel work (continuing education programs).
• Ordering moments: Everyday life, which takes place in the form of processes, calls for a coherent orientation and meaning. These functions fulfill the order moments. They arise explicitly and implicitly from everyday life and structure this in turn. So there is a circular connection between processes and order moments. The sub-areas are strategy, structures and culture.
  • Strategy: As mentioned earlier, the strategy is based on long-term decisions that build competitive advantage. The strategy as a moment of order designates the content dimension ("what?"). It should provide information on the concerns, needs and forms of communication of the stakeholders , the range of services offered, the focus on added value , possible fields of cooperation and core competencies . In contrast, the strategic development process (see Management Processes) focuses on the "how?": How should the generation process be designed? How are the contents effectively communicated and communicated on different levels?
  • Structures: Structures are needed to define the necessary degree of division of labor, and to effectively coordinate these areas. This is done by means of organizational structures ( organizational chart ) and process structures (definition of which tasks have to be completed in which sequence, for example in the form of a process plan ). Management can make comparatively easy changes here, since these are explicitly defined facts.
  • Culture: Culture refers to the implicit, enigmatic structures of a company. These include norms and values, attitudes, attitudes and reasoning patterns. The division of labor leads to a differentiation of culture within the enterprise. In culture, a key success factor of a company can be justified, because its elements are also difficult to put into words by its makers and therefore difficult to copy from other companies. For management it is a great challenge to influence the grown corporate culture, as it is anchored organically and unconsciously in the behavior and thinking of the employees in contrast to the formal organizational structure.
• Development Modes: Development modes describe the various types of development of a company. The continuous, ongoing improvement of the existing is referred to as optimization , while the discontinuous, only spiky creation of something completely new is represented by renewal.

Criticism of the St. Gallen Management Model
Helmut Kasper, Wolfgang Mayrhofer and Michael Meyer from the Vienna University of Economics criticize that people with their individual responsibility are still at the center of the 3rd generation St. Gallen model. H. the role of each leader is overemphasized. They replace this image of a technocratic leader from outside by looking at relationships, relations, and relationships between communications. In his theory of postheroic management, Dirk Baecker also criticizes the overemphasis on individual responsibility and the strict contents of the guidelines by the executives. In contrast, the manager even introduces uncertainty into the organization by referring to the open future.[10] The claim that the NSGMM facilitates an interlocking of objective and subjective perspective by emphasizing the respective construction of reality of the actors in the sense of social constructivism is extremely difficult to fulfill in practice. However, the NSGMM does not claim to offer any prescriptive solutions. It should be noted also that it the does not give a general St. Gallen model. There are only minor similarities between the biochemically influenced interpretations of the Malik School and the social constructivist perspective of Rüegg-Stürm, which starts from the critical dissolution of solidified thinking about management.

See Also

Business Model
EFQM Excellence Model
Strategic Management
Flexible Firm Model

Further Reading

The New St. Gallen Management Model: Basic Categories of an Approach to Integrated Management Johannes Rüegg-Stürm

• Why Managers Haven’t Embraced Complexity HBR
• A model for management helps to understand ScrumMaster duties Boris Gloger