17 May The Corporation as Confederation (...corporation to confederation)

[Paul Terlemezian]

I am guilty of using the terms corporation, confederation and federation without being able to clearly articulate the difference. Corporation is probably the easiest to articulate. What about federation and confederation?

 

Drucker describes two principles of the traditional corporation:

 

1. Own as much as possible of what you manufacture

2. Own everything you do

 

An analogy is useful. Let's think of states as corporations. As part of a federation (The good old USA) they maintain independent rights in a number of areas and have given them up in others. Participation is mandated. In a confederation they would maintain much more control of their rights and particiate because they want to (not because they have to.)

 

Drucker's assertion is that corporations will migrate towards becoming confedertions on terms of what they manufacure and what they do (sounds like outsourcing and alliances to me!)

 

What does this mean for the corporate training function? Will it resemble the traditional corporation (own it all) or will it become more like a confederation as it does things like:

 

1. Enable line managers to deliver content

2. License third party content for delivery

3. Share access to classrooms and perhaps the LMS

 

What other areas look more like a confederation than a corporation from the perspective of the training department? What factors should influence the structure (e.g. functionality, speed, cost?)