Paradigm Shift

A paradigm is an overarching theory or viewpoint that a society operates by, accepting it as a basis for understanding. When a paradigm shift occurs, a new theory is proved and established, forcing all members under the old theory to change their perspective. There is often a strong movement against shifting paradigms, since many must restructure their businesses and lives to reflect the new understanding. However, a true paradigm shift will be inevitable, a step in natural progress as knowledge in a particular field increases.

One of the most often cited examples of a paradigm shift is Copernicus's theory that the Earth, along with other planets, revolved around the Sun. It took scientists centuries to fully accept this physical principle which eventually revolutionized many scientific fields. Another paradigm shift occurred at the beginning of the twentieth century, when Newtonian physics began to be replaced by Einstein's theories of relative space and time. As in science, many important paradigm shifts have occurred in the business world as economic principles have been more fully explored and organizational structures attempted. Some of the predicted paradigm shifts for the business world include new management paradigms and revolutionary marketing techniques.

PARADIGM CRISIS

A paradigm shift is often begun by a paradigm crisis, which occurs when the current understanding of a situation is not adequate to explain events. When this happens, people begin seeking other explanations to explain events more clearly and accurately. Changes in international policy or economic situations can begin business paradigm crises, while scientific crises are most often caused by data that cannot fit into the current model. The crisis is resolved when a new model is created that explains current events so well it becomes accepted by the majority in the field, thereby establishing the next paradigm.

BUSINESS PARADIGM SHIFTS

Many business analysts see the arrival of Internet-based collaboration, social networking, and Web 2.0 applications as the beginning of an important business management paradigm shift. For the past couple centuries, managers have produced their own goals and ideas for their companies to follow, creating a top-down system of governance in which employees follow orders from the executives who work on innovation and concepts. Invention was relegated to individual innovators and those with entrepreneurial talent.

While such innovative people are still expected to be necessary, the communication technology of the early twenty-first century is allowing organizations to form ideas in a more fluid, collaborative manner. Concepts are beginning to be formed as a result of employee discussion and customer understanding. Decision making is being spread further throughout the organization, leading to bottom-up strategies formed by the widespread creativity of many organizational members.

To deal with these new methods of creativity, managers must learn to judge incoming data. Widespread collaborative creativity results in a large amount of information, which must be used based on quality and authority. How will managers be able to trust data from so many different sources? What protocols will be established to deal with such employee-generated ideas? These are the

questions the decision-making paradigm shift may bring to the twenty-first century.

PARADIGMS AND IMAGE

Paradigm shifts also apply to marketing principles. This has become an important part of company branding and rebranding, as organizations seek to create a distinctive image for themselves. In this way companies can produce and manage their own paradigm among customers by creating important marketing and innovation strategies. Paradigm shifts can also occur within the organization as new views are accepted concerning branding and image. Sometimes all that is needed is a change in attitudes toward how a company can brand itself and what its brand is founded on.

Managers will encounter paradigm shifts, both large and small, in their organizations. Understanding what decisions are based upon paradigms—and how these decisions will change as the paradigms change—is a vital part of effective leadership.

BIBLIOGRAPHY

Hiebert, Murray, and Bruce Klatt. The Encyclopedia of Leadership. New York: McGraw-Hill Professional, 2000.

Knapp, Duane E. The Brand Mindset. New York: McGraw-HillProfessional, 1999.

Kotelnikov, Vadim. “Paradigms and Paradigm Shifts.” 1000Ventures.com, 2008. Available from: http://www.1000ventures.com/business_guide/crosscuttings/thinking_paradigms.

“New Management Thinking—Are You Ready for the Paradigm Shift?” CBR, 1 Nov 2007. Available from: http://www.cbronline.com/article_feature.asp?guid=2000C49D-30FC-4373-81DEC5913B753C68.