Sustaining Organisational Effectiveness - Research Paper Example

Sustaining organisational effectiveness is key to survival in the business environment of 2009. How might a business organisation develop an innovative, proactive culture and thereby ensure survival? Task 1 - Part A Innovation needs creative thinking. Being innovative is all about interest and passion to create something out of ordinary. Several businesses started in a small level have grown to Himalayan heights and an equal number do mediocre business and more than the numbers in the above two categories go down the drain fail in the market place. The reason is very simple i.e. there is lack of innovation in either products or processes. But, the first categories of organisations have one thing different from the other two and the difference is the man who leads the company. Yes, leadership play a crucial role in being successful in innovation. This article dwells in to the details of how leaders can be inspirers at the same time also analyses how lacklustre leadership qualities can result in poor performance of the entire organisation. The article also substantiates the fact, with the help of a survey conducted by the McKinsey consultancy services highlights the wide gap between the aspirations of executives to innovate and their ability to do so. It also says that tinkering with organisational structures and processes as a way of stimulating creativity and innovation will lead the organisation nowhere. The article also lays emphasis on innovation and the need for it to be incorporated as a part of business strategy itself. The article attempts to drive home the point that fostering a culture of creativity and innovation is only possible only when the higher ups empower their people. Even failure should also be encouraged so as to encourage employees and other to crop up with innovative and creative ideas. Not all organisations give the staffs such a degree of participation, with authoritarianism raising the head (Burnes, 2004). Several multinational companies encourage their employees of all levels to generate business ideas which can result in competitive advantage for them. For example, the Japanese company like Matsushita encourage its entire staff to generate innovative business ideas. They even encourage people who do menial jobs in their organisation to convey their ideas to the top management in case if they have any. Another excellent example is Philips; this company encourages not only their employees but also their suppliers and also their customers to come up with new innovative ideas to compete better. Johnson and Scholes (2002) state that an organization might develop in the future based on groupings of key environmental influences. Such ideas are duly appreciated and awarded also promptly by the company. Innovation can lead the company as a niche player. "...the general ability to replicate both 'hard' and 'soft' innovations with ever diminishing time scales, places the creative and effective management of change well towards the top" (Paton and McCalman, 1992). But, the cause of worry is only 23% of the managers encourage their employees with such attitudes. Those who don’t encourage are considered as negative leaders. This attitude has to change for the betterment of the corporate world. The concept of leadership has evolved into various manifestations and dimensions over years. However in business a combination of all is required with creative and innovative approach. Overall the article has covered all aspects of creative leadership. Task 1 - Part B John Hayes in his book ‘The Theory and Practice of Change Management’ has explained many of the finer aspects of change management. The book strikes a perfect chord with the Gill’s article in more than one way. People always fear the worst if change takes place in the organisation. Initial resistance is because of the fear factor. The book has also very lucidly tells about the role of the top management in keeping the people comfortable when the management goes in for such change. Once change is resisted and if that is not taken seriously it may back fire on the organisation’s future performance. So the roles of officials at different stages have to take care of change management very seriously. This happens especially at times of mergers and acquisitions. And the problem is even more when there is a hostile take over or merger which is generally against the wishes of the company employees. As pointed by Gill in his article communication is very crucial and that is also very clearly explained in the book. Laura J Mullins in his book, “Management and Organisational Behaviour” talks about the various facets of organisational behaviour. People management is one of the biggest challenge these days and hence due importance should be given in this area. The presentation is so lucid that even a lay man can also understand the nuances of organisational behaviour. Organisational behaviour if understood properly can solve a lot issues especially in the man management areas. It also addresses the leadership issues with excellent examples. Gill in his article has given enough coverage about innovative leadership which has a complete sync with the book. Some understanding of the behavioural sciences in the work place is important in understanding the nuances of man management which will result in better leadership. It was the far sighted vision, ambition-“ambition made of the sterner stuff”- indefatigable determination to fight against eccentrics, perseverance, that several companies to create world class companies and has give significant pride for their nations apart from creating employment opportunities for the country they come from. Andrzej Huczynski and David Buchanan in his book, “Organizational Behaviour: An Introductory Text” has made the text very simple. In fact his work can be easily understood by students at all levels of management. It is a must read for every student who starts his/her management education. In his book he touches various aspects like recruiting, training and the importance of retention. These days’ employees are free to jump to any organisations and which ever organisation treats them well they shift there. So one of the biggest challenge that one faces is retaining their employees and the book clearly gives an idea of retention tricks to the human resource officials. The book also empathises with Gill’s article about the lack of creativity in today’s managers. The book also teaches to the expected mangers the organisation behaviour that is expected. It also touches the area of leadership which is inevitable when we discuss organisational behaviour. As stated by Gill understanding of values and culture is essential in any management. The book also drives home the point the point the importance of understanding the culture in the organisation. Every new member who joins the organisation observes the culture that prevails in the company and then he makes some little adjustments to accommodate himself in the organisation Task 2 - Part A “Organizations are made up of their individual members. Each individual is a central feature of organizational behaviour, whether acting in isolation or as part of group.” (Mullins, 2006). Every organization’s survival and success hinges on how the organization has been able to adapt to the changes in its functioning as well as the changes that might keep happening in the environment around them. When the organisation does not perform up to expected levels, and in other cases wanted to expand and diversify its operations, the management method has to be changed. This is where the concept of change management comes into the picture. Change management constitutes the structured changing or transitioning of employees, departments and the organisations as a whole from a current state to a favourable future state. The structured changing of employees is the key. The basic aspect is, for a company to develop, apt and qualified employees have to be recruited. But, in this changing world, it is necessary for the organization which wants to change ethically, to recruit employees from different or diverse backgrounds. So, this paper focusing on Nike, will discuss how it has changed from a traditional organizational model to a transformed organizational in 2005, as part of positive image building. Nike’s Diversity Program Nike, the leader in manufacturing and supply of athletic shoes, apparel and sports equipment, is functioning in more than 500 locations in 45 countries all over the world. “This company operates on six continents, and employs around 23,000 people. Their suppliers, shippers, retailers and service providers employ close to 1 million people. The diversity inherent in such size is helping Nike evolve its role as a global company.” (Clark et. al, 2005). With such extensive locations, Nike, an American corporation has a sizeable percentage of employees from different diverse groups. But, as part of a positive image building exercise, it planned to increase that percentage to recognizable levels. So, in 2005, it actualized that plan by adopting the diversity program. “Two years ago, Nike set out on a five-year journey to make the company an Employer of Choice. We said diversity could be a competitive advantage. … Our commitment to diversity is an integral part of Nike’s identity as a company” (nike.com) Initially, Nike introduced diversity programs into its functioning in co-operation with six employee networks, which were established by Nike themselves in 1990’s. These networks consisting of the main minority segments of the population, by liaising with the recruiting officers of Nike, introduced as much people from their segments into the organization. The six Nike networks each containing a minority group are Networks of African-American, Asia Pacific, Disabled Employees & Friends, Gay, Lesbian, Bisexual, Transgender, Latino & Friends and finally Native American (nike.com). So, by these measures, Nike tries to include qualified or equipped persons from groups or networks into their organization, and thereby bring in the diverse element. In operations outside U.S., Nike tries to recruit individuals from different nationalities or provinces. For example, at its European headquarters, there are employees from over 70 different nationalities. Apart from recruiting employees, Nike incorporates diversity in the supply segment as well, by having a Supplier Diversity program for the external stakeholders of suppliers. That is, Nike in U.S. selects its network of suppliers among the minority group members consisting of Asians, Blacks, Hispanics or Native Americans. Desired and Achieved End state Through this diversity programs Nike intended to recruit some of the brightest and talented individuals from the groups or sections of population, who are not given adequate opportunities due to their allegiance to particular group and its way of living. Nike is also hoping that these diversity programs will bring in many dynamic people from different backgrounds, who can enrich the creativity and innovation part of their business. Apart from these employee centric outcomes, Nike mainly intends to build a positive image about the company in the minds of the customers all over the world. This positive image will lead to easier identification of Nike’s products particularly among the ‘minority’ groups. That is, common people belonging to these minority groups will be happy with the Nike for recruiting one of their kind or group members, and this external stakeholder will become a regular customer. “Diversity heightens the stature and belief in the brand and within our culturally diverse consumer base. “ (nikebiz.com). After the introduction of diversity programs, Nike was able to increase the proportion of people from ‘minority’ groups to recognizable levels. For example, among the persons who hold Executive and Senior manager positions in Nike, 14% belong to the people of color, consisting of the main minority groups of U.S. Due to the appreciable success of this program, Nike was awarded honours by many organizations. Nike took a ‘proactive’ stance in relation to ethical or social responsibility and initiated the change management process in 2005. The main value, which Nike incorporated into their functioning to showcase their ethical responsibility, is to have a diverse workforce. The by-product of holding this value is their successful implementation of the Diversity Program. After the introduction of diversity programs, Nike is getting many favourable benefits, which have put them in the path of success. The process of revolutionary change and organisational transformation provides the basis for a new state of equilibrium (Hayes, 2006). Nike by actualizing a diverse work force is able to show its social responsibility and attain its economical goals. This real world example of Nike clearly proves the positive impact the diversity incorporated change management will have on the organization. Task 2 - Part B The first recommendation or option that is available to Nike’s HR to further optimize its diversity program is to include all the top management members and also other supervisors in the implementation of the Diversity program. Directors or managers in Nike can be involved in the diversity programs as part their work schedule and also as the criteria for financial rewards. Financial rewards are key to elevate the employees’ performance. This perspective is fully supported by Herzberg theory. That is, according to Herzberg's two-factor theory, good wages are good motivational factor, which can accentuate the excellence level. “Salary strategies and job enrichment strategies were positively related to job satisfaction. Job enrichment strategies and job stability strategies were positively related to employee commitment” (Arocas & Camps, 2008). The second recommendation is that, Nike as part of its comprehensive diversity strategy and HR policies should put the onus on its managers particularly managers at its different production units and its retail stores to recruit employees from diverse backgrounds. Instead of asking of HR managers at the head office to play a major role, decentralization should happen. Also, to optimize those subordinate managers’ performance in relation to its diversity program, Nike should reward them financially. Sometimes, according to Barsh et. al (2008) the employees, largely in the middle managers' level, with the most negative attitude towards change management served as bottlenecks to the flow of new ideas and the resultant changes. The leader in association with HRM has to put in extra efforts, if they are not in line with the strategic intent of change in the organisation. The third strategy which can be employed in Nike is the requirement on the part of the company executives, to mentor two people from diverse background. Experienced officials based on HR policies have to mentor employees from diverse background. This strategy will improve the employees from the diverse group, as those employees will become more productive with constant mentoring. The fourth recommendation is recruiting more employees from Host countries, in which Nike operates. Nike can include this aspect in its diversity programs because Nike is also a global company, operating in close 50 countries. If more employees are recruited, Nike can also get cheap labour and importantly a positive brand image in those countries, helping it to develop both ethically and economically. Importantly these employees will act as symbols of diversity and positive understanding of NIke. “research on organizational change has highlighted the role of symbols and symbolization in promoting new understandings of an organization” (Ravazi and Schultz, 2006). The fifth recommendation is, Nike can integrate disabled persons as part of their supply network. Even though Nike has a diversity programs in its supply network, it does not give extra focus to the disabled. So, Nike can integrate disabled persons as part of their supply network. So, these plans, if followed by the Nike’s management, can further optimize its diversity program, bringing in economic profits and positive ethical image. Conclusion A company will mainly be judged by the success it achieves. Judged in the sense, the company will be appreciated, feted, discouraged, hated etc, etc… by the success or the lack of success (failure), they get. In today’s world, the success of a company is mostly correlated with its achievement in the form of high profits, maximum market share, etc. Even though this perspective is not at all wrong, the bone of contention is how a company achieves those positive things. Whether, they achieve through ethical means or by the ways of fraud, illegality, etc? The primary focus of any organization is to give a clean management based on preset ethics and optimal HR policies. If the management and the employees of the company are ethically perfect, they will exhibit good discipline, hard work and thus high productivity. This is what Nike is successfully doing through its Diversity program. That is, Nike by actualizing a diverse work force is able to show its social responsibility. So, in future, if Nike incorporates the above mentioned HR strategies, it will be able to give a clean management, attaining both its ethical and economical goals, thereby being judged a success. References Arocas, R & Camps, J (2008). ‘A model of high performance work practices and turnover intentions’. Personnel Review. 37 (1). 26-46 Barsh, J., Capozzi, MM. and Davidson, J, (2008). “Leadership and Innovation”. The McKinsey Quarterly. 1. 37-47 Burnes, B (2004) Managing change: A strategic approach to organisational dynamic. London: Prentice hall. Clark, D, Taylor, R, Gioulos, P and Spanke, R. (2005). The Transition of Nike. Retrieved April 30, 2009 from http://homepages.wmich.edu/~r3taylor/Project-6.htm Hayes, J (2006) The theory and practice of change management. Basingstoke: Palgrave Macmillan. Johnson, G., Scholes, K., Whittington, R. (2008) Exploring corporate strategy: text and cases 8th edition. Harlow: FT Prentice Hall. McCalman, J. And Paton, R. A. (1992) Change management: A guide to effective implementation. London: Chapman. Mullins, L. J (2006) Essentials of organisational behaviour. Harlow: Prentice Hall. nikebiz.com. Diversity & Inclusion. Retrieved April 30, 2009 from http://www.nikebiz.com/company_overview/diversity/ nike.com. Employees and Diversity. Retrieved April 30, 2009 from http://www.nike.com/nikebiz/gc/r/fy04/docs/employees_diversity.pdf Ravasi, D and Schultz, M. (2006) “Respond to Organizational Identity Threats: Exploring the Role of Organizational Culture.” Academy of Management Journal 49, 3, 433–458. Read More