Business Units

To many of the 200 parents, teachers and business owners who crowdedinto the auditorium of Northwest Middle School, last night's Maryland 2000 kick-off meeting may have seemed little more than a recitationof statistics, strategies and educational jargon.But to the state and local school officials rattling off the details of the state's newest educational improvement effort, last night was the beginning of a program that will make Carroll schools better places to learn by the end of the century.

ANNAPOLIS -- A group of Maryland businesses and unions, frustrated with the runaway increases in their health-care costs, is taking matters into its own hands by applying business principles to the purchase of medical care.Just in case the General Assembly fails to reform Maryland's health-care system this session, a labor-management coalition has created a non-profit company called Medalco to review doctor bills and try to identify physicians who either charge too much or see patients too often.

In his so-called "Doom Speech," Percy Barnevik, president and CEO of Zurich's ABB Asea Brown Boveri Ltd., predicts two-thirds of big European businesses will fail in the wake of European economic integration -- unless they take Draconian steps to streamline operations.He prescribes strong medicine for firms in North America as well as Europe, beginning with the emasculation of central staffs.Any corporate center, Mr. Barnevik says, can be reduced by 90 percent in one year.Thirty percent of staffers, including, for example, all human-resource professionals, should be assigned to subordinate business units.

In his exciting new book, "Rebirth of the Corporation," Harvard Professor D. Quinn Mills boldly proposes a true, sweeping alternative to hierarchy: "the cluster organization." Mills argues for "dramatic change in the structure of the organization." Where hierarchy remains, he flatly states, "There cannot be any rethinking of the fundamentals of management."Enter the cluster. Mills defines it as "a group of people drawn from different disciplines who work together on a semipermanent basis."