Inovance Technology - Exploration of Business Behavior - Essay Example

Analysis of a Small Business Contents Task A 3 Analysis 3 References 15 Appendices 18 Task B 18 Reflection on Learning 18 Task A Analysis Researchprocess and experience The company chosen for this research study is Inovance Technology, a small business in China. Shenzhen Inovance Technology is a public firm located in China. The company is actively indulged into manufacturing, marketing and research and development of industrial automation control devices. Inovance technology mainly serves manufacturers of high-end equipment. The products designed by the company are servo systems, low-voltage inverters, PLCs, special and integrated drivers and HMIs. This firm was incorporated in 2003, and through their strong R&D capabilities it is able to achieve a market leader position within the market place. There are standardized as well as customized products offered by the company. In current scenario the company encompasses a total employee base of 2,410. This employee base constitutes 547 R&D experts who develop application technologies, new products, core platform technologies, etc. Business behavior reflects upon strategies undertaken by managers in order to solve critical scenarios. The owner manager of Shenzhen Inovance Technology was approached through sending official emails. The concerned people were convinced through highlighting outcomes of this study which can be utilized later in business operations. Shenzhen Inovance Technology is regarded as the top-most small business in China. Owner manager has been chosen for the study since they are the ones who can state appropriately business behavior in varied circumstances (Johnson and Christensen, 2008). It was an opportunity to interact with owner manager directly in order to identify basic principles implemented by small business for long term survival. Research methodology forms an essential part in this kind of study. It sets a framework that helps in accomplishment of research objectives. There are two forms of research study – qualitative and quantitative study (Tracy, 2012). Quantitative study encompasses analysis of market related data whereas qualitative study is centred towards opinions or views given by experts. This is a qualitative study where opinions and ideas shall be acquired from owner manager in context of small business management. Data collection measures are usually of two forms like primary and secondary data collection tools (Silverman, 2010). Primary measure will be suitable for this study where data shall be collected through structured interview process. Interview Process The first question asked to owner manager was – ‘What do you feel are essential factors behind small business success?’ Factors highlighted by the respondent was improving quality standards, being innovative, and encouraging employee empowerment, flexibility and customer oriented. This question was asked to determine managerial behavior towards organizational conflict. Respondent was asked – “How do managers or you react to any form of departmental conflict?” The answer given by owner manager was – “I usually prefer following participative management style where team members are encouraged to resolve issues on their own”. The third question was – “Do you feel that small business can be successful only on the basis of flexibility or industry experience?” Owner manager promptly replied – “No, I don’t feel so, because small business owners have to be risk takers, innovators and should continuously undertake training programs.” Owner manager was even questioned on stakeholder relationship. The question asked was – “How do you balance between supplier, shareholders and employee relationships?” Respondent answered – “We consider our team members to be a valuable asset since they are responsible for increasing organizational productivity. We try to continuously motivate employees through offering incentives, desirable pay structure, rewards, etc. Since time of incorporation we have maintained some standard principles with suppliers and other shareholders.” The next interview question was – “Do you support organizational change strategies during course of intense competition?” Reply to this question was as follows – “We have implemented change strategies to survive in competitive market place. Some strategies have failed but others helped to achieve high profit margins. I believe that organizational change is an essential component for any small scale business.” 2. Exploration of business behavior Business behavior of people is a wider concept and it positively or negatively affects business operations. As per the interview process it can be stated that there are multiple behaviours observed within team management and team members. Motivation is an important behavioural aspect observed within organizations. Motivating employees is a behavioural outcome and an essential leadership aspect. Business behavior is inclined towards obtaining maximum output from employees (Boxall and Purcell, 2003). Owner manager of Shenzhen Inovance Technology is focused on employee motivation techniques. These techniques enable management to align team members with corporate goals and objectives. Maslow’s hierarchy is one of the best behavioural theoretical frameworks to analyze different factors responsible for motivating employees. As per Maslow, individuals have certain things of motivation, which needs to be satisfied first before being transferred to the next level (Johnson, Whittington, Angwin, Scholes and Regnér, 2014). Maslow’s hierarchy model has been well represented in figure 1. Figure 1: Maslows Hierarchy of Needs (Source: Paauwe, 2009) As per figure1, basic needs of individuals should be satisfied first such as shelter, food and clothing. Once these needs are satisfied, focus shift towards next level of motivation. The next need is closely knitted with sense of belonging or love and respect from others. This aspect of the model is also known as social need. Self-esteem can be regarded as next need in the hierarchy model (Leopold, Harris and Watson, 2005). This need is strongly associated with self-recognition and self-respect. A person needs to gain self-respect so as to enhance their respective level of productivity. Self-actualization can be denoted as the last aspect in this hierarchical model. Full potential can be realized by an individual only when the last need is been satisfied. Self-actualization phase is all about realizing one’s full potential (Bamberger and Meshoulam, 2000). This model justifies various behavioural dimensions that facilitate employee motivation. Employees are considered as a valuable asset in Inovance Technology. Owner manager have clearly stated that their employees are the main factors behind organizational success. The interview process revealed a fact of company’s manager motivating employees through incentives, rewards, desirable compensation structure (Schuler, Dowling and DeCieri, 2003). These facts can be related with theoretical base of Maslow’s hierarchy of needs. Social and self-esteem needs are being satisfied by owner manager through their behavioural approach. The company has been able to retain their position in the industry by holding a wide base of motivated employees (Price, 2007). It is a small business but has secured desirable profit margins over the years. Employees form the basis of organizational success. Social needs of employees are satisfied through developing effective relationship with team members. Owner manager believes in forming strong bonds with employees as it increases competitiveness of the company. Social needs in workplace are satisfied through employee empowerment. Employees should not only be rewarded but also motivated to participate in decision making process. In Inovance Technology, employee oriented work culture is responsible for overall success and growth. This small business was incorporated in 2003 and since then the company has established high performance standards (Brewster, 2008). The increasing performance level is highly dependent on base of creative and talented employees. To be more precise flexibility in organizational culture developed a motivating workplace environment. The owner manager of Inovance Technology states that monetary rewards or incentives are not the only tool to keep employees motivated or enthusiastic (Wall and Wood, 2005). There are other factors too which needs to be emphasized on by team leaders. Non-monetary rewards or recognition at times play a vital role in satisfying some basic needs of employees. This kind of recognition is provided by owner manager through continuous training and development programs, and appraisal programs. Performance appraisal system is deeply rooted with the concept of self-esteem need. Employees at Inovance Technology are provided with appraisals and recognition for their creative ideas and hard work. This theoretical framework of Maslow could be correlated with information acquired during interview process in context of motivation. Goal-setting theory is another framework which is applied on small business management cases. Employees could also be motivated internally; this is the basis of goal-setting theory. Goals are given to team members so that they find it challenging to achieve such goals. Team spirit is also increased on the basis of providing goals to individual team members or a team as a whole. Group members eventually support the employee to accomplish set goal and this in turn initiates team work. A particular question was asked in the interview process stating - what is the probable action taken by owner manager during any organizational conflict scenario. This question was replied in favour of collaborative working style. Team members at Inovance Technology are inclined towards group work. Conflict resolution or accomplishment of goals is done through effective team work. This indicates a certain business behavior which is clearly outlined by goal-setting theory (Wright, Gardner and Moynihan, 2003). Employees need to be internally motivated as it contributes towards firm’s success. Internal motivation is provided to team members by the owner manager through aligning them with common goals or interests rather than reflecting upon individual interests. The behavioural science approach has been able to upgrade the framework of managerial principles. In earlier years, organizations develop strategies just for survival but in modern era focus have shifted towards retaining talent, maintaining corporate reputation and identifying market opportunities. This has also been focus of Inovance Technology China since it has adopted best practices over the years. Behavioural science approach indicates that information about human behavior within a firm is gathered so as to support managers for practical circumstances. Behavioural viewpoint highlights certain important aspects such as communication, leadership approach, group dynamics and motivation. For instance, large scale or medium scale or small scale firms are more concerned about communication channels and incorporation of appropriate leadership approach. Communication brings forth proper execution of tasks and leadership guides team members throughout the process. Behavioural perspective also denotes that human resources are not just passive tools but they are most valuable asset of any organization. This factor was supported by owner manager of Inovance Technology. The leader exhibits his behavioural aspect through employee involvement. There are some theoretical frameworks used to specifically denote behavior of managers or leaders (Fish, Schoenfeldt and Shaw, 2003). Theory X and Theory Y are two dimensions which highlight managerial behavior. Theory X managers possesses different set of assumptions which directly or indirectly affect their behavior. Their assumptions are worker centric and it is associated with workplace culture. Theory X managers are inclined towards security needs, consider employees to be lazy and are not ambitious to great extent. This behavioural aspect of Theory X managers is viewed during their interactions with employees (Reiss, 2012). On the other hand, Theory Y managers have an assumption that employees are innovative or creative, have self-control, and do not usually dislike work, and ultimately possess higher level of expectations. The interview process conducted with owner manager reveals specific characteristics of the people concerned. Theory Y managerial characteristics is well suited with owner manager behavior. Inovance Technology lays more emphasis on employee creativity rather than building up a team for following orders. Managerial behavior in this organization outlines a flexible structure where employees are given liberty to accomplish tasks and frame creative ideas (Brooks, 2005). These ideas are further implemented by this small business in order to achieve set goals. However there is one perspective of Theory Y which does not hold significance in case of Inovance Technology. This factor is of high expectations possessed by team members. Owner manager in interview process have not revealed any incident where an employee could not be retained due to one’s high expectations or needs. Majority portion of the employee base constitutes of R&D experts. This denotes level of creativity within the firm. Theory Y managers are supportive by nature and they cultivate required skills or knowledge in employees. These characteristics within owner manager are responsible for growth of Inovance Technology since 2003. Management principles also are an integral component of business behavior. Interview process encompassed two important questions such as manager’s role in departmental conflict and factors affecting organizational success. Respondent’s answers to these questions can be directly related with Fayol’s managerial principles. These management principles which hold significance in small business management are of 14 types. They are work division, authority, discipline, unity of command, centralization, unity of direction, alignment of general interests with individual interests, remuneration, scalar chain, personal tenure’s stability, order, initiative, equity and espirit de corps. Amongst these principles there are certain aspects which are directly associated with behavioural function at Inovance Technology. Work specialization is considered to be an important aspect in small business architecture. Individuals are allocated tasks as per their knowledge base or expertise. This factor is outlined in the management principle of division of work (Burns, 2012). It can be stated that at Inovance Technology focus was on creativity or innovation. During the interview process this approach was brought forward by owner manager. Innovation in an organization is facilitated through proper work division (Maxwell, 2002). The company deals in wide array of products and each department has R&D experts. These experts are given targets and in turn rewarded for their achievements. Unity of direction is also accomplished through strategies adopted by the organization. Owner manager stated that as an organization they believe in common interests rather than individual interests. Unity of direction is a common principle which denotes business behavior of Inovance Technology. This principle indicates that entire firm should be moving towards a common goal through a common path (Wintzer, 2007). Fayol had framed a wide range of principles but all of them are not relevant for the case of Inovance Technology. For instance, centralization approach could be observed within the organization. The major reason behind this was to manage effectively a small team. To be more precise, centralized approach is usually adopted in small businesses. This is done to have better control over team members. The company encompasses a small team of approximately 2000 members, where providing excessive flexibility might lead to disruption of corporate objectives (Peng, 2006). Hence, owner manager believes in giving limited flexibility only in context of innovative ideas or task accomplishment. Centralized decision making helps in eradicating conflicts and framing of strategies in least time possible. As described in the interview process, owner manager considers their human resources to be a valuable asset. In small business specifically, focus is on team work and reaching out towards set target. Inovance Technology is listed as the leader in small business sector. This has been possible only through giving importance to human capital. Equity principle is widely accepted in many small business firms. It indicates every employee should be equally treated. Rewards or incentives are standardized for all team members (Mello, 2011). This in turn motivates employees to perform well and enhance overall organizational productivity. Owner manager of Inovance Technology has a motive behind such equality in workplace. It is about establishing stability in personnel tenure. Employee productivity is an essential criterion for all business organizations. This productivity factor is greatly dependent on employee retention. The respondent during interview process clearly stated that initiatives are taken by the company to retain best talent in organizational system. Employee retention is of high priority for owner manager at Inovance Technology, China. It is observed that hiring new employees brings forth increased selection and recruitment costs, followed by increased percentage of product rejection. There is another principle also well aligned with behavior of respondent that is managerial initiatives undertaken to promote high work performance standards (Armstrong, 2006). Initiatives are framed by management of the company in order to encourage employees for doing additional work. Fayol’s management principle also comprises of espirit de corps. This principle denotes harmony and positive feelings amongst employees which are encouraged by management. On basis of the interview conducted, it is clearly evident that owner manager is inclined towards employee empowerment and conflict resolution by team members themselves (Torrington, Hall and Taylor, 2014). Managers of Inovance Technology continuously encourage employees to develop team spirit and strive towards maintaining harmony in the workplace. Management styles or leadership approach demonstrates managerial behavior with stakeholders. Owner manager of the firm possesses certain management styles that are essential for business growth. There are three main categories of management styles – autocratic, democratic and paternalistic. Each of these categories has certain characteristics which determine approach of manager towards employees. For instance, Inovance Technology has a flexible structure where employees are motivated to perform well and encouraged to contribute their innovative ideas. Employees are given liberty within organizational functions and it denotes a democratic management style (Bass, 2007). Democratic approach basically enables team members to actively indulge into decision making process. It has been already discussed that centralized framework is adopted by the company. This aspect cannot be correlated with democratic management style. Inovance Technology has not engaged into wider geographical distribution of their business operations. Their centralized business operation is a key to their success. Democratic management style is contradictory to centralized approach to certain extent. In democratic style decisions are taken by all team members collaboratively but majority opinion is emphasized on further implementation (Heifetz and Linsky, 2002). This kind of managerial style is also prevalent in their relationship building with stakeholders. Standardized principles are formed by the company and it needs to be followed by all suppliers. However these principles are structured by acquiring sufficient information from external stakeholders. Inovance Technology faces least scenarios where it might have to encounter any conflict with suppliers or employees (Truss, Gratton, Hope-Hailey, McGovern and Stiles, 2007). Extensive communication channels help the company to interact effectively with internal and external stakeholders. Democratic style proves to be beneficial when complex decisions are to be undertaken, that might require appropriate skills and knowledge (Erickson, Stephenson, Bradley and Williams, 2009). The motive of the company behind following such management style is to enhance support from subordinates and initiate quality work. When decision making process is streamlined it eventually slows down the entire decision making process (Northouse, 2004). Business behavior is also identified through eagerness towards organizational change. Owner manager of the company believes that organizational change is one such aspect which ensures long term as well as short term success. Lewin’s model can be associated with organizational change process followed by the firm (Hiatt and Creasey, 2003). There are three dimensions of Kurt Lewin’s model – unfreeze, change and refreeze. As per the interview process, in unfreeze stage owner manager communicates need for change and outlines probable loopholes in organizational system (Hayes, 2010). The current organizational culture is altered by management in order to incorporate necessary changes. On the other hand, in next phase, owner manager establishes change in respective departments, followed by an unfreezing stage where change is made standard for all team members. References Armstrong, M., 2006. Strategic human resource management: a guide to action. London: Kogan Page. Bamberger, P. and Meshoulam, I., 2000. Human resource management strategy. CA: Sage. Bass, B.M., 2007. Executive and strategic leadership. International Journal of Business, 12(1), pp.33-52. Boxall, P. and Purcell, J., 2003. Strategy and human resource management. Basingstoke: Plagrave. Brewster, C., 2008. Contemporary issues in HRM: Gaining a competitive advantage. Oxford: Oxford University Press. Brooks, I., 2005. Organisational behaviour: individuals, groups and organisation. Harlow: Financial Times Prentice Hall. Burns, J. M., 2012. Leadership. NY: Open Road Media. Erickson, M., Stephenson, C., Bradley, J. and Williams, S., 2009. Business in society: people, work and organizations. Cambridge: Polity. 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Truss, C., Gratton, L., Hope-Hailey, V., McGovern, P. and Stiles, P., 2007. Soft and Hard Models of Human Resource Management: A Reappraisal. Journal of Management Studies, 34 (1), pp. 53–73. Wall, T. and Wood, S., 2005. The romance of human resource management and business performance, and the case for big science. Human relations, 58(1), pp. 429-462. Wintzer, E., 2007. Global competition and strategic management. Germany: GRIN Verlag. Wright, P. M., Gardner, T. M. and Moynihan, L. M., 2003. The impact of HRM practices on the performance of business units. International Human Resource Management Journal, 13 (3), pp.21-23. Appendices Task B Reflection on Learning I have learned various dimensions related to small business management during class. Before I went for these classes I was not aware about the fact that small business management encompasses a set of behaviours completely different from large scale enterprises. As I have gone through frameworks on small business management, it clearly reveals objective of small business is to retain talent and acquire desirable profit margins. I have included some frameworks within this study too in order to relate business behavior of Inovance Technology with real time models. In my classes I also came to know about ways adopted by small business to keep employees motivated. I also have gathered experience regarding small business management. There are many small scale enterprises in China. I have visited some Chinese firms and collected information on their working style or business behavior. During my industrial experience I came to know that small businesses facilitate more employee empowerment in comparison to large scale enterprises. This action is usually exhibited to enforce collaborative working style and retain best talent in the organization. On the contrary, I even came to know about failures related with small scale firms. These failures are mainly due to inappropriate business behavior and inclination towards profit margins rather than employee retention. I was even provided with some practical case studies by my professor where I came to know more about small business management framework. During my class session, I prepared a presentation which encompassed basic characteristics of small business, their loopholes and key success areas. I think it has helped my classmates in terms of gaining further knowledge. Read More