The Significance of the Resources in Different Stages of Business Life Cycle - Research Paper Example

Organizational Theory Table of Contents 1.0 Introduction 2 1.1 Thesis of the Paper 2 2.0 Importance of the Resources for the Organizations in Different Stages of Business Life Cycle 3 3.0 Impact of the Resources on the Organizational Members 4 4.0 Process of Competing for Resources with the Other Industry Players 5 4.1 Consequences of obtaining Resources 5 4.2 Costs of Obtaining Resources 6 5.0 Differences in Resource Attainment 6 5.1 Nature of Organization and Environment 7 5.2 Organizational Stage of Development 8 6.0 Conclusion 13 References 14 Bibliography 15 1.0 Introduction 1.1 Thesis of the Paper The main purpose of this research paper is to investigate the significance of the resources in different stages of business life cycle in the organisation and their influence in different members of the organisation. The paper is intended to provide detail descriptions about the competition of organisation with their competitors for acquiring resources. Lastly the report covers the full description of the nature of organizations and their stages of development. The paper describes about various resources in the organization and how these resources are useful for enhancing the productivity of the organization and for applying various strategies. The paper contains full description about the nature of the organization and different stages of organizational development in their business cycle. It also describes about the process of competing for resources with other organization. Finally the paper includes the conclusion of the desired research paper. 2.0 Importance of the Resources for the Organizations in Different Stages of Business Life Cycle Resources are the assets of the organization with which the organization survive and take advantage of ever changing external world and market. It plays a significant role in prosperity of firms. For managers the importance of resources is to develop, identify and arrange them in such a manner that it brings profit in the competitive market with higher return on capital. Resources comprise of every assets such as capabilities, information, knowledge, attributes of firm, organizational processes and so on. These resources are managed by a firm to conceive as well as apply strategies to stimulate its effectiveness and competence. As resources can be considered as heterogeneous, it varies from organization to organization. Resources are the tangible and intangible assets of the firms which are being used to implement and develop their strategies. Firms have right to use specific resources of a firm as well as country-specific resources. These resources are located in both the firm’s country of origin and other host countries where it performs the business (Rapp & Jackson, 2003). Human resources, financial resources and physical resources are fixed effort of any organization. Administrative resources provide leadership structures for managing and leading these traditional resources. Political resources are used for government agencies and are typical to public organizations. Reputation is an important intangible resource. Labor is also a key resource of any organization (Lee, n.d). 3.0 Impact of the Resources on the Organizational Members A variety of resources show moderately different impacts on organizational members. Certain resources have positive and major influences on efficiency of organization’s members and others embrace negative or insignificant relationships against the performance of the organization’s members. The organizations resources comprise of human resource, financial resource, physical resource, administrative resource and political resource. All these resources have greater impact on members of the organization. The human resources of an organization bring better performance and competitive advantage to the organizations’ members. The proportion of professional employees in the firm is associated with the autonomy in human resource. As a result, professionals in human resources have positive impact on performance of members of organization. Financial resources help an organization to acquire the employees, technical capacity, well maintained facilities with the aim to enhance and improve performance of the employees. Physical resources are the fixed assets and raw materials that can be used for operation of the organization. The greater the physical resources, the better will be the performance and the working environment. Political resources have positive impact on organizational performance. Various resources of political influence are chief executive, courts, legislative bodies’ citizens and news media. Reputation is an important intangible resource which represents organizations and performances. Good reputation improves legitimacy for a firm. Reputation can increase certain benefits such as staff motivation, agency legitimacy, professional prestige and bureaucratic autonomy. These factors are imperfectly and valuable imitable resources of an agency which brings defensible competitive advantages and better performance. Thus, all these resources play a significant role in enhancing the efficiency of members of the organization (Lee, n.d). 4.0 Process of Competing for Resources with the Other Industry Players 4.1 Consequences of obtaining Resources Organization of different dimensions uses different policies, strategies and structures. Large and small organization depends on different mixes of resources. This signifies that one company competes with similar size company for resources. Large and small organization depends on different types and combination of resources. The leaders of the organization are generally responsible for obtaining resources. The process of allocating organization’s resources depends on the structures and strategic situation of the firm. Physical resources, financial resources, human resources and capital are important attributes of organizational resources, but it differs from organization to organization. Depending on the quality of resources an organization decides how it can use and arrange its resources. If an organization possesses unique resources then it can achieve competitive advantage from other competitor. It also helps them to keep away from imitation of the competitors. Resources should be managed in such a way that it can achieve competitive advantage for the employees and the organization. Presence of threshold resources in the organization helps to meet minimum requirements of the customers. 4.2 Costs of Obtaining Resources Resources and capital of a country are vital factors for production. The key factors such as human, financial and physical resources are required for producing goods and services. An organization possesses abundant physical resources, capital and machinery but unless products and goods are produced by the human resources, the organization cannot make rapid economic growth. Organization makes all types of investment for human resource to acquire knowledge, skills and aptitudes for workforce of organization. This investment will bring growth in the organization. The cost of a firm is observed in terms of financial resources and time. If an organization wants to gain competitive advantage over other organizations then it will obtain resources with its capability which others company does not have. Few organizations attain extraordinary profits in comparison to others because they have those resources which allow them to produce superior products at standard cost with inferior resources. The strategic capability of an organization is to improve cost efficiency and this may be acquired by having both resources and competencies to control costs (Clegg & Et. Al., 1996). Customers are benefited from cost efficiency when price is less. Stakeholders, who are the budget providers, prefer to maintain quality and level of service provision with reduced price. The management of cost in order to acquire resources depends on the firm’s competitive advantage. 5.0 Differences in Resource Attainment 5.1 Nature of Organization and Environment Organizations work in order to achieve specific purposes. The purposes of the organization are not permanent; they may change over time. The formation of the organization is the natural trait of human beings. It is the purpose of the organization to achieve its objective with skilful members of the organization. Based on the diverse skills and specialization of the members, the work has been distributed. This will create groups with various responsibilities in order to achieve certain objectives of the organization. Each group must possess formalized work division, coordination of activities, well defined rules and procedures governing working relationships and communication modes. Organizations are political rationale too. It provides effective means and influence upon others. All these influences are related to the goals of the organization which are set by all the members of the organization. An organization comprises of leaders, managers and other employees who help the organization for a specific goal or purpose. They structure the members in such a manner in order to achieve the objectives of the organization. It becomes necessary to put in position the mechanism for information flow and communication among members and coordinate and control various task performances in the organizations (Johnson & Et. Al., 2008). Organizational environment comprises of competitors, customers, pressure groups and various other factors such as economic, political or legal, socio cultural, technological, demographic and global changes. All these factors directly or indirectly have influence on organization. Customer is the members who absorb output of the organization; competitor’s policies related to price, product and service must be familiar to managers. Suppliers are the party who provide input for the organizational business. There are certain groups of people who try to influence the organization; they are known as pressure groups. Economic factors include inflation; interest rates, changes in disposable income and others have great impact on organizational environment. Political conditions include federal state and local government and socio cultural conditions have great influence on organization about their changes with alteration in the lifestyle of the society. The physical characteristics of population and technological changes affect the performance of the organization. 5.2 Organizational Stage of Development Organizations operate in a rapidly changing environment. One of the most vital assets for an organization is the ability to manage people to remain healthy and genuine. Organization Development is a vital tool to influence the members of an organization to improve their directness with each other about their individuals’ views for the organization and their experience in it. It also helps to take greater duty and responsibility for their activities as organization members. The theory behind Organizational Development is that when people follow all the objectives at the same time, they are expected to discover new ways of working together which they think to be more effective for accomplishing their own and their mutual organizational goals. When this does not occur, these activities help them to understand and make consequential selection about what to do in light of this understanding (McNamara, n.d.). Four Stages Organizational Development The movement related to human potential described in early seventies uses a supportive frame of reference to comprehend the process regarding ‘interpersonal group development’. This model involves four distinct stages of development: Acquaintanceship, Friendship, Conflict and Union. These four stages of development are an essential part of organizational development as a whole. Effective leaders are experts at guiding their organizations completely and kindly through these four stages of organizational development—often repeatedly, partly or fully. Stage 1: Acquaintanceship In this first stage, a new organization or older one appointing new employees involve all or few of them in the organization for its development. This stage is mainly used for distribution of information conversing organizational mission, job descriptions, target, employee expectations, and performance standards and personnel policies. Communication in this stage is generally important which provide clear and positive directions to the organization. The activities are mostly supervisory tasks of monitoring, assigning and assessing work processes. The boundaries of the organization are developed for the employees in this stage. Stage 2: Friendship The Friendship stage of growth is intermediary in nature. Here the movement of expansion takes place from acquaintanceship to friendliness and from that to friendship in the organization. Interaction in the organization becomes formal to more informal, communication moves from superficial exchanges to conversation and then to meaningful response and disclosure, and also the preliminary focuses on differences move to similarities. There is teambuilding which optimizes diversity, focuses on synergy and build up commitment. In order to develop it fully in this serious stage of development, it is essential that leaders take care of the organization to prepare for the next stage. Effective leaders complete this important preparation with role modeling which demonstrate their own proficiency, intrinsic motivation, positive attitude, empathy, likability, servant-leadership style, self-control, trustworthiness and know employees better and acknowledge them, sharing their humanness, communicating supportively, minimizing emotional negativity; and accommodating, flexible, understanding and forgiving. Stage 3: Conflict When Conflicts develop in the organizations it keeps away from running smoothly and achieving target goals. Sales of the organization may turn down and personality clashes can occur between operations and sales staff. Various other problems can also arise in the work culture and environment of the organization. The gap between management and line staff may arise, work groups bring destruction for each other, communication can go down and the values of the organization can grind down, as a result entire business fail. Certain signs of organizational conflict are obvious including lack of productivity, poor morale, high turnover, poor communication, employee resistance, income drop and lack of growth. Other signs embrace difference in core values, unidentified issues, uncomfortable feelings, hidden agendas, informal power struggles, generalized fear, wrong assumptions and preoccupation with dissimilarity between and within organizational levels and work groups. Conflicts within the organization are tackled aggressively. The effective leader is sensitive to conflicts and applies creative problem-solving and effective communication to bring about right resolution. Often an effective leader may plan productive conflict in order that the organization cannot get unstuck. Supportive communication is required to resolve the conflict which arises between satisfactory organizational productivity and the best performance. Any communication that creates a suspicious climate will impede the organization from moving to this next stage. When effective leaders stay away from any communication it leads to superiority, certainty and insensitivity, judgment, control which maximize equality, freedom, understanding and sensitivity. Stage 4: Union A state of union is the final sign of an effective organization. Success is a reflection of an incorporated team working together for the common purpose. The workforce is practically content, highly creative and productive .The organization goes beyond its business plan simply and quickly. There is complete similarity between what management says, what supervisors hear, what employees do and what customers’ sense. The achievement of the union stage of development is definitely not guaranteed term, even with the best efforts. In fact, the principle of entropy—the propensity for the organization to get bored and harm its own success—can often take over the most effective organizations as well. The leader is then challenged to begin this organizational development process once more. The Johari Window is another device of the human potential movement. It is a helpful process to make the wisdom that is required to lead the organization through these four stages of development completely, quickly and gracefully specially in the conflict stage. The Johari Window processing is a method of knowledge that assists the leader to find different answers in order to resolve conflicts. This will hold back the organization from involving in the conflicts and operating within the Union of stage. For example, the leaders try to dissolve the conflict by ignoring the fact that whether the sales and operational department understood the problems or not and take time to ask relevant questions and get both sides work together for a mutual resolution. On the other hand, when the leader enforce certain judgmental and controlling solutions to this conflict, employees take it underground where it is more difficult to deal with (McNamara, n.d). 6.0 Conclusion Organizations are using a variety of resources in order to manage their organizations depending upon goals of the organization and their policies or programs. Certain resources are positive and bring significant influence on firm’s performance and the negative resources bring harm for the organization as a result business fail. In the public sector, however, they do not have enough empirical and comprehensive knowledge regarding what sorts of resources are present, and also whether different resources actually add to organizational performance, which resources are more important than others, and so on. At times the organizations resources are wasted by different members of the organization for their personal interest. As a result it brings negative impact on the reputation of the organization. The problem of misuse of resources is found in both developed as well as developing countries. Thus, management that understands the relative impacts of various resources in federal agencies can play a significant role in improving organizations’ performance more strategically. The resources are the vital assets of the organization because they can bring competitive advantage of the company over their competitors. References Clegg, S. & Et. Al., (1996). Handbook of Organization Studies. SAGE Publications Ltd. Johnson, G. & Et. Al., (2008). Exploring Corporate Strategy: Text & Cases, 7/E. Pearson Education India. Lee, S. Y., (No Date). Introduction. Impacts of Organizational Resources on Agency Performance: Evidence from Federal Agencies. Retrieved Online on January 19, 2011 from http://www.pmranet.org/conferences/OSU2009/papers/Lee,%20Soo-Young.%20%20Impacts%20of%20Organizational%20Resouces%20on%20Agency%20Performance%20-%20Evidence%20from%20Federal%20Agencies.pdf McNamara, C., (No Date). Definition of OD. About the Field of Organisational Development. Retrieved Online on January 19, 2011 from http://managementhelp.org/org_chng/od-field/OD_defn.htm  Rapp, B. & Jackson, P. J., (2003). Organisation and Work Beyond 2000. Springer. Bibliography Gautam, V. & Batra, K. S., (2007).Organisation Development Systems: A Study in Organisation Behaviour and Organisation Management. Concept Publishing Company. Misra, D. C., (No Date). Monitoring Extension Programmes and Resources. FAO. 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