Modern Concepts of Management - Assignment Example

Managing Organizations 1. Many modern concepts of management advocate for horizontal coordination, cross - functional linkages and empowering organizational members. Contrary to this model, traditional bureaucracy calls for formal subordination and reserves power for decision making at the top, and provides coordination always at least one level above the implementation level. What do you think, under what internal and external conditions freedom for action granted to organization members could bring maximum performance for an organization? Globalization brought many changes, which influenced not only organizational environment, but also the psychology of employees. Modern people differ much from the people of the previous century in terms of their goals, methods of their reaching, communication, ambitions, etc. Managing people now is not an easy task thus it needs new approaches. Thus, managers of the modern companies are looking for the new ways of employee motivation. Freedom for action is an essential factor to consider. Actually, when we hear about the organization, where employees make decisions themselves, we usually can’t believe that, because a great number of successful companies are hierarchical bureaucracies (Microsoft, Apple etc.). It seems impossible also for many managers to provide staff with opportunities to set the goals for the company instead of them and to realize these goals without being controlled and thoroughly supervised. Also we all know the conclusion made by Max Weber: bureaucratic organizations are the most successful players on the stage of the market economy. However, modern experts admit that Weber’s conclusion can’t be considered fully grounded as the famous sociologist may not know some important facts on bureaucracies. Modern investigations show that workplace stress prevents people from high performance. Working in the conditions of hierarchical bureaucracy, people are able to realize only 60% of their potential. Thus, it is essential to look for alternatives. Moreover, as it was mentioned above, modern people often refuse to work in the atmosphere of dictate, when they should only fulfill somebody’s orders and do not have an opportunity to express their own opinion. Such working conditions prevent people from the realization of their creative potential and it is obvious that such realization would contribute to company’s success. New ways of managing people should be found by modern supervisors. Recent studies held showed that there are some companies who successfully practice freedom of employees’ action. Their success is built on the principles of liberating leadership listed below. Liberating leader is a one who: listens to employees’ propositions instead of imposing his own views; openly shares his views on successful organizational performance in order not to make employees confused; does not motivate employees to give them an opportunity to motivate themselves; plays the role of “culture-keeper”. Actually, the behavior of workers in the organization is determined by the number of factors, external and internal. These factors contribute to organization performance in freedom action conditions. Among the internal factors is first of all trust in leadership. Leadership plays an essential role in any type of organization, no matter if it is freedom company or hierarchical bureaucracy. Workers of any organization usually tend to mirror the work of leadership and the supervision should be implemented in the way so that employees may feel its support but not a dictate. The second important internal factor is organizational culture. The atmosphere in the company should be friendly and positive, work schedule should be flexible. The external factors also mean much, for example, it is interesting to cooperate and communicate with another companies in the market. “Research findings show that collaboration with other firms and with customers can be a significant source of product innovation, and can even stimulate stronger internal coordination. Cooperating with external parties requires the involvement of people from different areas of the company, which in turn necessitates that organizations set up stronger internal coordination mechanisms” (Daft 2008, p. 426). Another important factor is person’s family life. It is not related to work but plays an important role. Happy family can serve as a very good stimulus. McDonalds’ can be taken as a perfect example of a company that practices a successful business framework based on freedom: “McDonald’s is taking an approach called “freedom within a framework” that allows regional and national managers to develop practices and products suited to the local area. The company then makes sure international managers have plenty of both formal and informal ways to communicate and share ideas. The Big Tasty, a whopping 5.5 oz. beef patty slathered in barbeque sauce and topped with three slices of cheese, was created in a test kitchen in Germany and launched in Sweden, but as word spread, the sandwich was adopted by restaurants in places like Brazil, Italy, and Portugal, where it became a huge hit” (Daft 2008, p. 233). 2. An organization has innovative products and ideas, but consistently fails to meet cost projections. In addition, they are almost always a couple of months late in getting the product to market. What would you recommend? In the modern changing environment creating new products is crucial for every company. This helps increase productivity and profits, keeps a company competitive. “This growing global interdependence creates new advantages, but it also means that the environment for companies is becoming extremely competitive. Customers want low prices for goods and services” (Daft 2008, p. 8). Now business environment is characterized by rapid changing, thus modern companies have to engage innovations and implement changes to hold its grounds. But notwithstanding that there are many positive factors, introduction of new products always contains some risk. New products demands much investment, planning and research that is needed to avoid failure. “Today, globalization and advancing technology have accelerated the pace at which organizations in all industries must roll out new products and services to stay competitive. Today’s customers want products and services tailored to their exact needs, and they want them now” (Daft 2008, p.9). Several studies were conducted to reveal the reasons why a new product may fail. There are four main reasons of a new product failure: bad management, bad concept, bad realization and bad planning. Certainly, it is not necessary that the failure is due to the four reasons at once, the fail of only one category may lead to the lack of success. If a company fails to meet cost projections, it usually happens due to bad planning. Before the product is launched, it is necessary to estimate all the expenses taking into account force-major circumstances, which can’t be predicted and may demand extra costs. Launching new products a company may face a lot of new difficulties and challenges that also will cause extra expenses. Also failure in meeting cost projections may be caused by poor product concept. That means that the product was studied badly and while the planning was implemented, there was lack of understanding what exactly this or that product needs to be successfully launched. When the organization is late in getting the product to the market, this can happen due to the bad management. On-time launching is very important especially if the sales depend on the season. Late launching can reduce profits and cause many losses that will lead to product failure. “….there is a distinct pattern of tailoring innovations to customer needs, making effective use of technology, and having influential top managers support the project. These ideas taken together indicate that the effective design for new product innovation is associated with horizontal coordination across departments.” (Daft 2008 p. 424). If the product is managed badly, the launch can be late because of poor launching process organization. If the process is organized badly, company experts may not reveal possible risks on time and this will slow down the process. Also bad management causes wrong capital distribution that can cause many mistakes during the product launching. The delays in getting the product to the market may be also caused by bad realization. Bad realization is usually caused by insufficient market research that prevents to execute market plan. Goalless advertising, bad employee performance, wrong pricing are the factors that contribute to bad realization Thus, it is necessary to every company to implement thorough market research, prepare staff, study product well and estimate all the predictable and unpredictable expenses. If all of these factors are taken into account, the risk of failure will be very small. “Another critical issue is designing products that can compete on a global scale and successfully marketing those products internationally. Companies such as Quaker Oats, Häagen Dazs, and Levi’s are trying to improve horizontal communication and collaboration across geographical regions, recognizing that they can pick up winning product ideas from customers in other countries. Many new product development teams today are global teams because organizations have to develop products that will meet diverse needs of consumers all over the world” (Daft 2008, p. 428). 3. In managing organizations today we need to balance opposition between standardization and mutual adjustment, between now and the future, between free floating creativity and disciplined execution, between efficiency of the current processes and long-term effectiveness. Assuming that these oppositions can bring positive results, how can we design organization structure and the entire management process to make sure that we can reach these balances? Modern companies have to face serious oppositions, because the environment they work in change rapidly and there is a need to look for the new ways of acting. Moreover, the competition is currently too hard and every failure can throw the company away from the market. In order to survive in such conditions, it is necessary to design organization structure in the ways that will help reach the balance. First of all, it is important to implement thorough planning. Planning represents the process that defines the main goals of the company, evaluates the environment the company works in, chooses the way of acting, introduces actions needed to implement the plan and tries to predict the results. At the same time types of planning may vary depending on the type of the company. Planning is very important for those who want to have successful business activity, because it is defining the prospects and forecasting success or failure in case of these or those actions. “Organizations have to keep in touch with what is going on in the environment so that managers can respond to market changes and other developments. A study of high-tech firms found that 97 percent of competitive failures resulted from lack of attention to market changes or the failure to act on vital information. To detect and bring important information into the organization, boundary personnel scan the environment” (Daft 2008, p.150). The next important step is decision making. It is close to planning process, but has its own peculiarities. The difficulty lies in the fact that usually the decision should be made cleverly in any situation, even if there is not very much information about the consequences and options. Nobody can guarantee positive outcome, that is why decisions are made with a degree of uncertainty. Leaders should decide what goals should be reached and how they can be reached with certain availability of sources and certain level of staff preparation. The third step is organizing. It is very essential to organize the project implementation correctly. The process of organizing prescribes building a good team for plan realization, correct distribution of tasks. There are five important steps of process organizing: correct understanding of the main goals, distribution of tasks among employees, providing resources needed for project realization, designating the authority. The next important factor is right staffing. It is very important to define the abilities of each employee, determine what he/she can do best and give the corresponding tasks to him. Correct human resource planning contributes to successful projects implementation. In order to find a right person for this or that position, it is very important to provide a good description of a vacancy. It is not an easy task as the description must be specific and general at the same time to attract many people with similar abilities. Also it is very essential to make the staff oriented. They should learn the rules and objectives of the company, know responsibilities, understand procedures needed for task completion. Modern companies have to work in the environment of uncertainty when they do not know how the situation may change tomorrow. It is very difficult to work in such conditions. Thus, modern organizations try to find different ways out. “The traditional approach to coping with environmental uncertainty was to establish buffer departments. The purpose of buffering roles is to absorb uncertainty from the environment. The technical core performs the primary production activity of an organization. Buffer departments surround the technical core and exchange materials, resources, and money between the environment and the organization” (Daft 2008, p.150). New rules in business bring not only new opportunities but also new challenges and it is very important for the organizations to meet the requirements of the new environment they have to work in. References Daft, Richard L. (2008). Organization theory and design. Retrieved March 1, 2013 from http://dl.dropbox.com/u/52226210/Organization.pdf Read More