Introduction to Organisations and Management - Assignment Example

?Introduction to organizations and management Table of contents Introduction 3 Organization structure and firm performance 4 Motivation and satisfaction 10 Groups and Teams 12 Organization culture and human resource management 13 Technology and innovation 14 Observations and recommendations 15 Introduction The growth of business ventures has come a long way from the times when barter system was the accepted mode of trade to an era of multinational growth and investment that defies geographic boundaries. In recent times entrepreneurs are re-engineering their business strategies to accommodate advancing technology and rapid innovation in the field of information technology and e-commerce. Technology has equipped the workforce with speed and accuracy that has enhanced overall productivity and efficiency. Business is a dynamic process governed by the economic, political and social environment in which it operates. Due to rapid changes in the operating environment entrepreneurs need to dynamic in their approach to devising and implementing strategies for growth and development. Businesses create opportunities within the community to grow and prosper. The report provides an assessment of the changes taking place in the business processes over the past few decades through a comparative analysis of the existing practices at H&M Consulting and Watson Engine Components. While Watson Engine Components exhibit a conventional style of management based on traditional values and practices, H&M Consulting offers a modern approach to dealing with its employees and customers. The strategic management practices here are based on innovative work culture that applies employee empowerment theories and open organization system that promotes employee commitment and proactive behaviour at workplace. The next few sections analyse these practices and highlight the significance of modern day management strategies through a comparative assessment of these two firms. Organization structure and firm performance Organizational structure plays a pivotal role in determining organizational culture and values, communication lines and the extent of employee involvement in decision making process (Jelinek, 2010). The levels of reporting and accountability framework of a company determine the corporate culture and work environment existing within the company. In current business context, entrepreneurs re-engineer business processes to accommodate a flatter organization structure that necessitates free flow of information and knowledge to the workforce. Watson’s business strategy focuses on conventional business management approach that adopted a top down hierarchical structure. While this conventional form of management practice is successful in instilling discipline within the organization, it fails to motivate employees to perform better. Over the past few years Watsons has faced significant challenges in meeting the needs and requirements of the evolving business climate. The problems are evident in the difficulties faced by the organization in meeting delivery schedules and retaining employees. The management is opposed to innovative strategies that can help the company in boosting employee morale, productivity and performance efficiencies. The staff participation and involvement in decision making process within the organization is missing and the managers believe in adopting an authoritative style of leadership to promote business goals. Traditional organizations employees were provided with directives on how to get a task done and it was effective in accomplishing organizational goals. However, the employees simply followed directions and were not given the scope to think and act. This restricted their scope of personal and professional growth that had a negative impact on their performance in the long run. Participatory style of management is highly effective owing to their impact on employee decision making abilities, performance level, and positive reinforcement at work (Jelinek, 2010). “Business firms around the world are experimenting with new organizational designs, changing their formal architectures, their routines and processes, and their corporate cultures as they seek to improve their current performance and their growth prospects” (Roberts, 2004). Organizational structure plays a critical role in determining the extent of employee empowerment within an organization. Various studies on this subject conclude that the levels of reporting and accountability existing within an organization are of prime significance in ensuring employee participation in managerial functions. Ian Palmer and Cynthia Hardy argue in their work “Thinking about Management” (2007) that employee involvement programs rely on flat organization structure having little hierarchy. Potterfield (1999) claims in his book “Thinking in Management” that empowered organization is “ideally an open system, where information is shared freely, and where communication takes place in all directions.” The organization is structured in such a manner that shifts the focus of decision making from vertical to more horizontal lines – this implies that the staffs at the forefront actually involved in the job process are better equipped to judge the work processes and decide on how the contingencies can be met. The effectiveness of these strategic practices is displayed in H&M Consulting that has been successful in becoming one of the top consulting companies in UK. The company adopts modern management principles of participative leadership style and an open organizational structure that enables transparency in operations and free flow of communication for improved productivity and performance. The figure below illustrates the various dimensions related to transformations taking place in organizational strategies and practices - Organizational Dimensions Traditional Firms Transition Stage Modern-day Firms Structure Hierarchical Horizontal Center-less Leadership Command-and-control Participative Stewardship Culture Static Reactive Entrepreneurial Knowledge Individualistic Learning organization Knowing organization Strategy Marketability Adaptability Flexibility (Fig 1, source: Kuznik & Harvey, 2001) H&M Consulting strongly identifies with the modern day firms while Watson’s is categorized in the traditional firm segment. The existing business environment has increased the need for creativity and proactive behaviour from employees. Businesses require skills for doing the job and in current market conditions advancing technology at rapid pace makes it imperative to learn new skills and upgrade one’s knowledge to adapt to changing market conditions. In a free market economy that is characterized by global competition, organizations are faced with enormous challenges in the form of growing consumer expectations, high level of innovation in the industry and rapidly changing market dynamics. H&M Consulting has adapted itself to the global business environment through promotion of innovative practices and enabling human resource practices. Businesses are restructuring their human resource management strategies to increase employee productivity and performance. Watson’s inability to replace conventional management practices by evolving managerial concepts has limited its scope to meet the challenges of the external business environment. Leadership and management strategies Leadership practices within organizations have a deep impact on its employee management policies and effectiveness in achieving business goals. Leadership has been defined by Northouse (2009) as a “process whereby an individual influences a group of individuals to achieve a common goal”. The past few decades have witnessed a significant shift in leadership styles and practices within organizations. Leadership styles within organizations pursue a more humane approach than it used to a few decades ago. Autocratic style of leadership is being replaced by participative and free rein leadership styles that promote increased individual participation in managing the whole show. Nickels in his book Understanding Business concludes that various researches conducted have found that employee participation in decisions is highly effective in increasing performance and productivity besides increasing individual job satisfaction. “Many progressive organizations are highly successful at using democratic style of leadership that values traits such as flexibility, good listening skills, and empathy” (Nickels, 2008). A critical aspect of business management today lies in evolving well defined strategies to meet global challenges posed in the form of new opportunities and emerging markets. The developing economies today have emerged as potential contenders for consumer markets and most multinational companies are venturing to extend its operations to these regions in search of higher profits. Advancing technology and lowered cost of telecommunications has opened new channels of business operations and this is visible in the increasing demand for outsourcing of business processing, knowledge processing and legal processing to developing economies (Gold, Thorpe, & Mumford, 2010). H&M Consulting has adapted its management practices to include a more humanistic and participative leadership style. The company realizes that growing complexities within the business environment has created greater need for knowledge and understanding of the operating environment that affects the profitability and growth of the organization. Organizational success is deeply influenced by the extent their flexibility in approach and capacity to mould themselves to the changing needs of the operational environment. Evolving business climate includes vast transformations in the perception of organizational leadership, managerial functions, and human resource strategy. Corporate management faces more challenges in the form of changing corporate relations and increasing global influences that have set a new pattern in managing people and businesses. However, the traditional autocratic leadership style in management seen in Watson’s deeply contrasts the management practices at H&M Consulting. While H&M Consulting has proved to be a successful organization with its PRIDE strategy that provides the employees with clear goals and directions on the expected results and organizational conduct, Watson’s though successful in retaining its market shares displays signs of stagnation and ill-adjusted growth strategies. H&M Consulting has adapted its managerial practices to promote a flexible and dynamic approach that highlights organizational growth and development. The company has online strategies to tap and explore expanded market opportunities. The Internet revolution and emerging e-commerce activities are yet another aspect that has thrown new light on business strategy development. Growing number of Internet users worldwide has extended the reach of entrepreneurs finding new ways to reach their potential global clients. The amount of information available to the consumers through the Internet has created a new group of highly educated and well informed client base who have extensive access to competitive market information such as product prices, range of services available, features and scope of application (Gold et al., 2010). The new business environment influenced by globalization of economies and liberalization of markets has created the need for highly skilled professionals in their respective fields. Businesses today rely on the specialized knowledge and capacities of their workforce for success. The current business environment presents a complex global marketplace that is highly driven by rapid changes in technology, new markets, and growing consumer expectations. Business units are constantly in the process of devising new strategies to gain a competitive advantage. Increasing players in the industries have provided the workforce with extensive job opportunities and this has increased the level of attrition in organizations. Human resource management strategies are shifting their focus on increasing job satisfaction and employee skills development. The managerial strategies clearly identify and communicate the specific organizational goals and objectives of the organization to the workforce. Effective human resource management policies can play a critical role in shaping the necessary infrastructure that influence employee behaviour, attitude and performance. HR at H&M Consulting support the organizational goals through individual development plans that include job rotation, skills development workshops and relevant soft skills and technical training. The definitions and parameters of performance evaluation are expressed clearly to the workforce to avoid ambiguity and clarity. Motivation and satisfaction Employee motivation and satisfaction is one of the core elements that have a direct impact on the overall productivity and performance of the organizations. Employee motivation has been defined as “the force that gives impetus to our behavior by arousing, sustaining, and directing it toward the attainment of goals” (Wortman et al., 1999 as cited by Muller, 2011). Employee satisfaction levels are to a large extent driven by organizational policies, managerial attitude, organizational culture, existing work environment, and communication policies practiced and adopted by companies (Gitman & McDaniel, 2008). Managerial attitude and strained relationship with team members are often the biggest impediments to increasing motivation levels among employees. Managers often lack the sensitivity to handle employee issues or team performance related problems. One of the reasons behind this is the lack of perception of real issues that direct employee behavior and performance. Often the managers tend to criticize and impose their authority in getting a job done without much thought to the efforts placed by the employees in getting the work done. Adequate work incentives, performance bonus and compensation schemes are highly effective in increasing employee morale and motivating them to perform better. However, financial incentive alone is not sufficient to motivate the employees to perform better. The performance related pay system needs to be supported by a thorough understanding of the organizational culture, adequate monitoring and supervision of managers, transparency in communications and suitable growth opportunities to reinforce employee motivation. Career growth opportunities and employee development strategies play a critical role in inspiring the workforce to increase performance levels and align individual goals with organizational objectives (Gitman & McDaniel, 2008). The managerial strategies at Watsons focus on driving its employees through an autocratic leadership style that limits the scope of communicating employee issues, ideas and proactive approach at workplace. Employees feel restrained in terms of applying their own thoughts and ideas to the business processes that might help in improving productivity and performance. In contrast H&M Consulting provides a more flexible and open approach to managing the employees and creating a positive work culture where employees feel valued. The company promotes a healthy and motivated climate to work for by providing its employees with well-defined business goals and mission that are set as targets for enhanced performance and productivity. Groups and Teams Teams are an integral part of operational processes and organizations rely extensively on teams to perform strategic functions. Teams are groups of individuals sharing similar goals and work responsibilities. These teams are instrumental in developing operational strategies that are directed towards achieving high performance and efficiency. Management of teams requires able leadership skills that is based on a participative approach and demonstrates an improved understanding of individual attitudes within the team, team capabilities and existing limitations or challenges. Communicating with co-workers involves a strong ability to understand the problems and traits of the individuals in the team. It requires good listening skills since people confide in leaders who are willing to listen to their viewpoints. Working with a diverse workforce has its own distinctive advantages such as increased creativity and innovation at work. “Team members with different backgrounds may come up with more creative and effective problem-solving techniques than homogenous teams” (Guffey, 2008). The case study of Watson’s and H&M Consulting emphasizes the significance of working in teams and promoting group efforts to contribute to business goals and objectives. The success at H&M Consulting reflects the effectiveness of such strategic initiatives that is based on open communication and free sharing of ideas at workplace. Organization culture and human resource management Organization culture defines the organizational belief and attitude in the way goals and objectives are accomplished. An organization is shaped by the culture that predominates in work environment, employee behaviour and managerial attitude. However, in face of rapidly changing business requirements and market trends organizations are now implementing fresh strategies that improve the work environment and organizational culture to promote higher level of motivation and employee productivity (Gold et al., 2010). The new age firms are designed to promote flexibility in strategy and approach to meet the challenges of the emerging times. The figure below illustrates the various parameters driving the success of firms today – (Fig – 2 Source: Kuznik & Harvey, 2001) While the HR policies at Watson’s focus on conventional practices, the extent to which employee skills and competencies are exploited by the organization is limited. Since the managers do not involve the employees in the decision making process, the motivation and commitment to organizational objectives is low. H&M Consulting has proven the effectiveness of adopting a work culture that promotes higher level of motivation and productivity through its enabling HR practices and focus on employee growth and development. Technology and innovation The rapidly changing market dynamics have re-defined the need for fostering creativity and innovative practices at workplace. Businesses are identifying new strategies and means of marketing their goods and services to the targeted consumer segment with the objective of increasing market shares and add value for the consumers and external stakeholders. Innovation is seen as the product of creativity and individual motivation that facilitates the development of new ideas and strategies at workplace. Innovation has been defined as the “application of resources to create value for the customer and the enterprise by developing, improving and commercializing of new and existing products, processes and services” (Terziovski, 2007). The business enterprises in the past few decades have focused increasingly on acquiring and investing in new technological breakthrough to gain competitive advantage. Most of the businesses use technology as the “key differentiating lever” (Mayo & Nohria, 2005). The present business environment depends on technology for increased efficiency, speed of operations, productivity and cost control. Watson’s fail to meet the needs of the changing times by their reluctance to invest in new technology and the impact of this approach is evident in its failure to meet competitive pressures. H&M Consulting presents a picture of efficiency and innovative approach at workplace through its use of latest technology tools and applications that facilitate quality production and performance. Observations and recommendations Organizations should focus on improving communication between the employer and employee since this can help in motivating employees, reduce employee resistance, and pursue change mechanism effectively. Giving the employees a chance to participate in management decisions not only makes them feel valuable but also ensures their support and enthusiasm in the whole process. Organizational productivity and performance can be enhanced through able leadership strategy, employee training and development initiatives, and open communication between employers and employees (Jarvis, 2009). Watson’s must invest in revamping its operations by adopting new management approach and technology tools to compete in the industry and promote an innovative work culture. Moreover, the company needs to re-engineer its leadership styles and approach to accommodate employee participation and involvement in business processes for realizing the true benefits of the workforce. Following the example set by H&M Consulting, Watson’s can help in promoting its business efficiencies through increased focus on participative management approach, employee training and development, well-defined business goals, and reduced hierarchical structure that promotes open communication and collaboration between the employees and employers. Bibliography 1. Gitman, L.J. & McDaniel, C. 2008, The future of business: the essentials, South Western Cengage Learning. 2. Gold, G., Thorpe, R., & Mumford, A. 2010, Handbook of leadership and management development, Gower Publishing. 3. Guffey, M. E. 2008, Business Communication – Process & Product, Cengage Learning. 4. Jarvis, G. 2009, Ask your staff: they will know all the answers, Human capital management journal, Jan-Feb 2009 8-10. 5. Jelinek, S. 2010, The impact of management practices and organizational structure on firm performance, GRIN Verlag. 6. Kuznik, S., & Harvey, T. 2001, An organizational architecture for the 21st century firm: a resource based view. 7. Nickels, William G. 2008, Understanding Business. Chapter 7: Management, Leadership, and Employee Empowerment, McGraw Hill Higher Education. 8. Northouse, P.G. 2010, Leadership – theory and practice, Sage Publications. 9. Muller, C. 2011, Employee motivation and incentives at Apple – do incentives really help to motivate employees? Grin Verlag. 10. Palmer, Ian and Hardy, C. 2000, Thinking about Management: implications of organizational debates for practice, Sage Publishing. 11. Potterfield, Thomas A. 1999, The business of employee empowerment: democracy and ideology in the workplace, Greenwood Publishing Group. 12. Roberts, J. 2004, The modern firm: organizational design for performance and growth, Oxford University Press. Read More