Modern Business in Comparative Perspective - Essay Example

Modern Business in Comparative Perspective al affiliation Introduction Chandler’s model of integrated management suggests that industries are better off with a well-organized management layout rather than management based on personal capitalism. He argues that this professional management comes up with better decisions and projects that are crucial to the organization unlike personal management which may be biased. Integrated managerial enterprises aims at expanding the economies of scale and scope in the economies. This paper discusses the chandler’s theories in relation to ancient and modern trends in countries such as China, Japan, Germany and the UK. Question One Positive effects. Chandler has helped expand the fields of strategic management in the field of economic development. His work emphasize on the need for organizational innovation, managerial expertise, and performance of the business. His theories are applied in the modern setting to help in economic advancement and help in improve sectors such as managerial uprising and organizational management structure. Chandler emphasized on modern industrial capitalism and was against the personal capitalism. Depending on a sequence of changes in internal and external environments, large companies are appreciating a new form of organizational structure. Post war or 1930s multidivisional organizational structure is different from this new method of organization as it is based on knowledge of expertise rather than economies of scale and scope. Managerial enterprise in large companies is industrial concerns whereby decisions of the company are based entirely on a hierarchy of managers for the best interest of the organization. National managerial enterprise patterns arose in the search for organizational capabilities and the need to gain benefits from diversification of companies. Comparing the UK to Germany and the US, UK trailed downward basically because of personal capitalism model. The public policy and the monetary policies of Britain were viewed as challenges to the uprising of the Britain economy. In Japan however, the enterprise system was due to delayed industrialization. Japan economies replaced personal capitalism with well-organized managerial structures that contributed greatly to the success of the economy. This kind of a system creates a competitive advantage both to the organization and between other nations once it has kicked off. Competitive advantage enables growth of the organization, and it’s hence a motivational tool as many large firms are responding to such competition by advancing their management structure. Due to this management structure proposed by chandler there has been an increase in diversification of products as companies are in competition with each other. Hierarchical organizations have some benefits as discussed by Chandler such as reducing cost which is represented by factors such as following up of transactions, integration of products and services as well as batch distribution of products. This managerial enterprise model encouraged the development of technology to compete with the growing size of economies, such as producing larger units of commodities. The first big enterprises in the US, the large railway and the telegraph required centralized operations and hierarchical management as opposed to personal capitalism. However for the benefits of these projects to be realized it took some due to lack of technological skills. A similar issue of appreciating the new chandler model of management was observed in the UK, but this adopted slowly, basically because the market was already solidified and organized in large number transitional dealers. Japan appreciated the use of groups and networks in their economy, these groups are vastly influential and an example could be trading companies. Japan economies replaced personal capitalism with well-organized managerial structures that contributed greatly to the success of the economy. Negative effects I disagree with this theory as, Chandler’s analysis was best suited back in the 1980s as it contributed to the growth of economies vastly but it has also become useful in the modern economy especially in managerial organization and in importance of groups and networks. Japan economies replaced personal capitalism with well-organized managerial structures that contributed greatly to the success of the economy. . I disagree with the notion that chandler has contributed to modern day systems. Due to the increased product diversification and benefits from national and international transactions firms in the 20th century have chosen to replace multidivisional with integrated managerial enterprises. Chandler has contributed to the growth of business groups and networks which act as a motivational tool because of competition between its members to achieve what the other member economies have achieved or even better. Competitiveness of nations is based on productivity, location and profitability of the firms. Large companies are linked in different economies so as to promote economic development between nations as they operate. Competitiveness of nations is wide spread and productivity contributed by chandler’s hierarchical model of management enterprise is the major factor. China competes with the US on argument of if it can attract supportive activities. Conclusion The chandler model was most effective in the 1980s in the managerial organization of enterprises but has also played a major role in the development of systems in the modern business, and has brought about concepts that have advanced the businesses. Question Two Chandler has helped expand the fields of strategic management in the field of economic development effectively. Discussed below are the contributions he has made to make his work effective in management. His work emphasize on the need for organizational innovation, managerial expertise, and performance of the business. His theories are applied in the modern setting to help in economic advancement and help in improve sectors such as managerial uprising and organizational management structure. Chandler emphasized on modern industrial capitalism and was against the personal capitalism. The chandlers’ management contingency theory states the relationship between strategy and structure in an organizational. National managerial enterprise patterns arose in the search for organizational capabilities and the need to gain benefits from diversification of companies. Comparing the UK to Germany and the US, UK trailed downward basically because of personal capitalism model. The public policy and the monetary policies of Britain were viewed as challenges to the uprising of the Britain economy. In Japan however, the enterprise system was due to delayed industrialization. Japan economies replaced personal capitalism with well-organized managerial structures that contributed greatly to the success of the economy. Chandler’s analysis was best suited back in the 1980s as it contributed to the growth of economies vastly but it has also become useful in the modern economy. Chandler describes the American way of organization as the best one way approach for all the countries. Personal capitalism is whereby companies in British are greatly managed personally which is unlike in other countries like America and Germany. The British companies have smaller managerial hierarchies and are managed in totally individual and personal ways. Superior managers in the Britain companies oversaw the lower level managers and so unlike other economies they did not find the need for a defined organizational layout. The family operated businesses opted to keep large stable incomes than invest. These family owned businesses prevented the emergence of complex managerial hierarchies as the heirs retained the powers of senior managers. Network groups are a great way to meet people and make wider connections, buildings relationships and marketing their own products. China and Korea have established themselves fruitfully through the region winning major contracts, and projects. Japan and the United States have posted a major increase in competitiveness unlike Germany that has recorded a decrease in the recent years. While chandler focuses on management and internal characteristics of a firm, the modern economy has further focused on external groups and networks into their management to help expand the economic grid and network of firms. Japan has embraced business groups and networks and some of the elements of groups include the firm, the factory and the inter firm network. Holding companies structure in the UK has greatly increased due to some benefits such as the added tax benefit. Having a business group implicates that all costs can be channeled or spread around the group easily. In addition profits can also be channeled up and pooled by the business group for holding companies so as to be invested elsewhere in future. Japan had previously banned holding companies but recently the ban has been cancelled. Elimination of the ban was expected to raise the flexibility of Japanese firms in the lines of creating new or lesser units with different pay systems than the parent company. Japan legalized the holding companies again to diversify the market and grow its economy by adding non- associated companies to the capital market. Britain was stuck at personal ownership as they did not embrace the Chandlers structural model. Different economies require different structures; sheer hierarchies are common in capital intensive, meaning large financial systems while compliment hierarchies are prevalent in labor intensive industries. The organizational structure of an organization must change to suit the changing internalization pushed by competition of other nations. Due to the increased product diversification and benefits from national and international transactions firms in the 20th century have chosen to replace multidivisional with integrated managerial enterprises. This structure can be based on product, matrix or even geographical basis. Firms with vastly diversified product lines require more flexible technologies. Chinese firms have been slow compared to other economies such as the UK and Germany to adopt Chandler’s model because the government provides financial support and rights to monopolies of large companies to increase the economies of scale and the scope to industries. Conclusion With changing times there has been a union between countries toward managerial capitalism. Lack of hierarchical managerial organizational structure leads to a collapse of the economy, like what happened to Great Britain when it lost its second best position in leading economies. To achieve maximum efficiency in an organization structure must shadow strategy. Groups and networks play a major role in marketing and expansion of a business due to the fact that they can distribute costs and profits amongst each other, which is an added advantage. Management teams are dependent on the size of the national market and the enterprises thereof. Bibliography Chandler, A. D. & Herman, D. e., 1980. Managerial Hierarchies: Comparative Perspectives on the Rise of Modern Industrial Enterprise. Volume 32. Cambridge Mass.: Harvard University Press Read More