Contemporary issues in management - Essay Example

?Contemporary Issues in Management Introduction The following paper deals with contemporary issues emerging in the business activities of MNCs and the concept of ethical leadership. In this context, the given passage of Niccolo Machiavelli’s ‘The Prince’ is starkly relevant to contemporary issues in management. It is asserted in the passage that whether it is prince, an individual or a company, all of them have to flow according to changing circumstances. The most relevant point in this context is that change in the place i.e. shift from one place to another affects the policies of individual and companies to a great extent. Thus, it is realised that this passage can be critically utilised in the field of management to solve various issues. Here, the word “prince” is substituted as contemporary company or any entrepreneur. The deep analysis of the passage reveals that it links the issues of change management in the passage (Aaker and McLoughlin 2009). In the contemporary context, change management is frequently gaining importance which in turn indicates the importance of the passage in the present time. While exploring the issues of modern management, they are also linked with the context of the passage. Furthermore, a theoretical approach is adopted along with real examples of companies and their change leaders. It is elaborated in the passage that the idea of change management and its importance in the achieving success in different circumstances. Machiavelli was of the view that in order to achieve success in different place and circumstances, local resources should be optimally utilised rather exploitation. Furthermore, his passage indicated that ethical values should not be underestimated while dealing with change in the business environment. Also, strong ethical values bring strong goodwill in the market place (Alas 2006). Main idea of passage of the Machiavelli is managing change while encountering the problems of the change. It is written the passage that when a company enters into a new country it should have understand its varying needs and its culture in order to stay there for long term. On the contrary, if a company ignores or avoids a country’s culture on which its entire system is based then that company surely fails to sustain there. Machiavelli writes in the context of the country that if one country wants to succeed over another country then first of all it should gather support of general public of that. Along with this, the inhabitants of that country should be treated as useful resource for utilisation rather than for exploitation. Thus, it says that company should manage the change with ethical values and give the due respect to the inhabitants (Zadek 2004). A company which is constantly crossing milestones in its respective area may suddenly fall down because it’s changing relationship with its business environment and lack of response on the part of the company. Change is inevitable and minor changes continuously occur in every industry. However, major changes like recession; decide the future of the companies in relation to success and failure. These changes can be related with a number of aspects of the business, however, three fields have major impact on the companies i.e. macro environment, technology and government. These changes together form a basis for the uncertainties in the environment. In order to address the uncertainties in the environment, there should be formulation of certain strategies and policies which again indicates relevance with the Machiavelli’s passage. Thus, mission, vision, goals and philosophy of a company possess an important place in managing the change (Worthington and Britton 2009). It is supported by a series of examples. In order to understand the influence of the change management on level of success or failure can be understood by a series of examples. In this context, example of British Airways is very crucial. In 1981, the company was going through one of its worst time phase. Then the company appointed a new chairman who went in details of the weak position of the company. He found out that company is wasting valuable resources and working inefficiently, and then he decided to restructure the company. Therefore, he adopted change methodology management plan i n order to make the company more profitable. For this purpose company went for reduction in workforce in a systematic manner. Furthermore, the chairman realised that achieving the support of the employees in this change management process is very necessary hence he told them about the benefits of the restructuring and privatization. This explanation not only achieved the support of the employees but also they felt that company worth their presence. Thus, workforce reduction took place without any resistance because leadership was effective to implement the change (Wetherly and Otter 2008) Another example in this context is Apple Inc and its Former CEO late Steve Jobs who directed the company towards high range of innovation. Machiavelli’s passage has a huge relevance in the success story of Apple (Apple 2009). The company and its CEO adopted a proactive approach in relation to change so that it remains initiator for every perceived change. Apple took the changes in the macro environment as an opportunity and responds them accordingly. Therefore, every change in the business environment suggested company a market innovation idea. Thus, company adopted the innovation strategy to combat the changing market scenario. In managing the change, role of ethical leadership of Steve Jobs was also important (Werhane 2008). A strategy which incorporates intelligent elements of the change always proves profitable for the company by producing products which are demanded by the consumers. This can be understood by the strategy of players of the same industry. When the rivals of the Apple only make it to stay in the industry; the company was constantly flourishing and increasing its profits (Apple 2009). Along with this, it is world leader in its respective area and leading innovative company. Role of ethical leadership possess very prominent place in this regard and relevance to the Machiavelli’s passage. Leaders are the individuals who direct the path towards the change and convince others to do what they don’t want to do at initial level (Senior and Fleming 2006). In the above mentioned two examples of Apple Inc and British Airways, their leader took the responsibility to introduce and implement the change. In addition to this, they adopted ethical working style in implementing the change rather than cheating their employees and consumers. Today’s business practices are constantly becoming corrupt and cheating the stakeholder. In such circumstances, one who is ethical achieves the goodwill of the public and hence prospers their business. There are also various examples which indicate that companies which used unethical practices as well as didn’t respond to the local need properly collapsed in the market. Leadership of such companies are also responsible for the collapse (Bhagwati 2007).. In the above discussion, change management’s successful examples have been discussed, it is now necessary to include some examples of failure Along with some successful examples of the change management; there are also some examples which demonstrate the failure of the companies in adopting the change. Coca-cola which is considered as world leader in producing various categories of drink, failed in India during 70s as it did not respond properly to the changing macro-environment. It is the company which is equivalent to entire industry and hence shaped its own industry in the world. People in India was liking the taste of the Coca-cola product but exploitation of the India’s natural resources without acknowledging its inhabitants is hindering its success story in India. Here few sentences of Machiavelli seem relevant i.e. when the people are hostile and regard it with hatred it must go in fear of everything and everyone (Senge 2006). The company hit by the lack of adeptness in relation to changing place. As the company was entering into a new country, it needs to understand the changing work-place, its culture and expectations of the locals. It needs to formulate the policy which is adept answer to the local needs. The company debarred from India and was not allowed conduct its operations in India almost for 20 years. Such dire consequences could be avoided if it handled the changing needs of the macro-environment in efficient manner. Here. Role of its leadership was also doubtful. It promised the inhabitants numerous job opportunities but it failed to do the same. They failed on the ground of ethical leadership by not fulfilling their promises (Bolton 2000). The business circumstances as well as the operating place changed for the company but company continued to operate its business in the same manner which caused its failure in India. Machiavelli’s words keep great importance here as the company failed to adapt to the changed conditions. When the Coca-cola entered India, it was the time of advent of globalisation. Today every marketplace of world has globalised and international trade possess vital place in every business aspect. It is globalisation which is increasing the importance of change management and ethical leadership in the marketplace to a great extent. In this context, Machiavelli asserted in his passage that “for the very people who had opened the gates to the French King, when they found themselves deceived in their expectations and hopes of future benefits, could not put up with the insolence of their new ruler.” Therefore, local people should be given utmost importance during globalisation (Burnes 2004). MNCs which are entering into different countries are simply involved in the globalisation. Globalisation can take various form say technical, cultural, economic, political and social. Machiavelli’s passage reads that MNCs should understand the varying needs of the host nations and thus gain their respect. Along with this, support of the inhabitants of the host nation should also be achieved. However, both entries into a new nation as well as gaining the support of its inhabitants are not an easy task for the companies. Therefore, most of the companies offer job opportunities to the inhabitants of the host nation. It is considered most traditional and appealing way to gain the support of them. In addition to this, some more appealing methods are adopted to enter into a new nation. These methods include increase in the tax collection of the country, improvement in the infrastructure of the country, improvement in the overall economy and so on. All these methods are more impactful in relation to developing nations. However, terms and conditions are tougher than developed nation hence requires more precautions (Carnall 2003). Examples of countries along with companies also seem relevant in this context. Along with so many companies, China is a burning example of change management and ethical leadership. Since 1978, china is ever changing and ever transforming. It is responding to changes in the macro environment in the most effective manner. China’s approach in relation to handling change is proactive. It perceives the changes before it actually takes place and formulates its strategies accordingly. And, so far its strategies in relation to change have remained successful. China has transformed its economy to a great extent and these changes are in its favour. Its leadership played a significant role in taking the changes as opportunity (Donaldson and Dunfee 1994). On the contrary, UK was once complimented as pioneer in the world for modern techniques of manufacturing and now struggling with the colossal imbalance in the global economy. UK’s economy is completely based on its retail industry hence it is facing difficulty in dealing new world economic order. After getting re-entry in the India, Coco-cola tried its best to regain the goodwill of the inhabitants. The company identified that it is exploiting water resources of the host nation which is damaging its nature. Therefore, it decided to take environment and climate stand so that support of inhabitants can be gained (Drucker 1986). Coco-cola now one of world’s most ethical companies because it takes the responsibility sustainability projects very seriously; especially in host nations. Along with this, it is promoting globalisation with full spirit. In developing countries globalisation is considered as key of technical and economic advancements hence even most of the governments of such nations encourage MNCs in their countries (Fineman 2000). Machiavelli’s passage seems very relevant in this context as it says that people of the host nation support another nation’s ruler if they work for their benefits. MNCs share advanced technology of developed nations, facilitate greater access to the international markets, improvement in the standard of living and so on (Gold, Malhotra and Segars 2001). In addition to this, generation of the funds through foreign direct investments (FDI) ensures economic development of the developing countries. Also, developing countries offer these companies cheap labour and a market with unexploited opportunities. Thus, these companies get a market to increase their revenues as developed nations are considered as saturated markets (Hansen, Nohria and Tierney 1999). Thus, both MNCs and developing nations have mutual benefits in this regard. The brighter aspects of globalisation are more discussed as it is in favour of the MNCs. They get a chance to expand their business activities through the concept of globalisation. Leadership of these companies also have to play a decisive role in such conditions. Ethical leadership easily wins the confidence and goodwill of the inhabitants of the host nations and in turn get profitable results (Horwitz, Heng and Quazi 2003). Along with so many benefits of the MNCs in the developing nations, there are also some demerits of the MNCs. These demerits include exploitation of the resources, quick fluctuation in the financial market, and degradation of environment which may cause global warming (Johnson 2011). Machiavelli had the opinion that “when they found themselves deceived in their expectations and hopes of future benefits could not put up with the insolence of their new ruler.” This sentence implies, in the context of MNCs and developing nations, that if the inhabitant s of the host nations are not benefited by the existence of the MNCs then they started opposing such companies. It is so because they realise that companies only exploiting resources and not working for the benefits of the host nation (Morrison 2000). Having examined the role of MNCs in the developing nation, it is now necessary to consider the role of change management in the globalisation. Globalisation can only be managed with the help of change management as MNCs need to work in different work culture of different countries. Changing work places suggest the companies to be a follower of change management. In addition to this, local employees of the MNCs also need to update their skills so that they easily adjust in the work culture of the MNCs. Thus, it can be said that both MNCs and local employees need to adopt change management on their respective levels. Ethical leadership is again important here as it is the one which decides over the issues like child labour, wage rates, utilisation of natural resource and so on. In order to get cheap labour and sell product on the competitive prices, companies sometimes overshadow the ethical considerations in the globalised market. Rather increased rate of revenues stop them to think ethically. However, the companies who take the pain of working under the ethical consideration may flourish in the long term and for this their leadership always get applauses (Nickerson and Zenger 2004). With regard to this Machiavelli said in the passage that “Well-organized states and wise princes have always taken great pains not to make the nobles despair, and to satisfy the people and keep them content; this is one of the most important tasks a prince must undertake.” On the basis of the above discussion it can be said that change is inevitable in the business environment. Also, companies who want stay in new nation for long term need to cope with the changes successfully otherwise all the efforts will go into vain. A clear relation is visible between the Machiavelli’s passage and contemporary issues like change management, business activities of the MNCs, ethical leadership and globalisation. Examples of Apple and Coca-cola are also relevant in this context. The main theme of the Machiavelli’s passage is that companies should take care of local resources of the host nation otherwise they have to face dire consequences. This theme proves right with the help of example of Coca-cola. On the contrary, companies who go with the flow of the change and optimally utilise the local resources remain the market leader in their respective industry. Thus, the essay can be concluded by saying that Machiavelli’s passage still possesses great relevance and importance in the business activities of MNCs and ethical leadership and pave a way towards achieving the organisational objectives (Noon and Blyton 2002). References Aaker, D. and McLoughlin, D. 2009. Strategic Market Management. Wiley. Alas, R. 2006. Ethics in countries with different cultural dimensions. Journal of Business Ethics, 6, pp. 237-247. Anderson, D. and Anderson, L. 2001. 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