Application of Theories in Firms - Assignment Example

Download file to see previous pages Companies use penetration marketing to gain market share and retain their customers Method Various literature and information were evaluated as regards the culture of employee empowerment theory. Empowerment as a social theory is traceable to Freire, an educator and humanitarian of Brazilian origin who espoused a plant for liberating the oppressed in the world using education. The idea of empowerment was mostly associated with alternative approaches to social or psychological development. The theory of employee empowerment suggests that employees will undertake their duties and responsibilities in a more responsible, efficient, and effective manner if they are allowed to behave in a less encumbered way and are better informed (Hur, 2006). Employee understanding of the mission, objectives, vision, and goals of the company will enable them demonstrate greater initiative, risk-taking and responsibility when they are effectively trained, accorded an environment that is relatively free of castigatory consequences and they have some authority in making decisions. It involves delegating authority up to the lowest level within the organization where decision making is allowed. Over the past twenty years, the theory of employee empowerment has been tried and proven to yield considerable predictive value (Towns, 2010). Employee empowerment culture gives employees the leeway to make decisions by themselves and this gives a lot of room for creativity, and entails principles of shared leadership and is a shift from the traditional hierarchical leadership method. It incorporates an approach that is motivational where not much independent power and authority is accorded to employees. The other approach is relational that entails a lot of power decentralization (Towns, 2010). Question Two The theory of penetration pricing is a strategy that entails giving customers a markedly low price (compared to average market price) at the early stages of the business enterprise with the belief that over time due to experience and increased efficiency, costs of production will go down for instance due to economies of scale. This ultimately leads to the enterprise becoming profitable (Rao, 2009). It is suitable when a completely new product is being introduced, the market has customers that are price sensitive, a threat of a competitor entering the market exists, and continuous innovation is expected. Question three This memo reviews Google and Wal-Mart as two companies in the USA that practice employee empowerment and penetration pricing; respectively. Most traditional companies condition their employees to rely and depend upon leaders whom they really have no intrinsic connection to as the means for company progress. Employees are just not trusted to make the right decisions on matters affecting the company on their own (Llopis, 2010). Google has shown leadership and ‘breaking away’ from the pack by empowering their employees to make decisions and explore their creativity. Google employees are empowered to use 20 percent of the time they spend at work daily to pursue personal projects that are not related to Google as a company and remarkably enough, this presently accounts for half of Google’ ...Download file to see next pagesRead More