Approaches of Organizations - Research Paper Example

Running Head: Approaches of Organizations Approaches of Organizations [Institute’s Approaches of Organizations Introduction Mainstream management refers to the management approach where there is great deal of focus on materialism and individualism. Managers are more likely to focus quantifiable goals, top down analysis, standardization, specialization, instrumental motivation, output vigilance and information systems. “Winning is everything”, “Go Heavy or Go Home”, “Beat them or get beaten”, “Time is Money” and others are the common slogans associated with mainstream management. With this approach, the focus of the managers remains on the financial well being of the company, improving the outlook of balance sheets, income statements, profit and loss statements, and short-term or quarterly results of the company. The mainstream approach strongly believes on the idea of “invisible hand” given by Adam Smith (Lussier, 2008). The idea of invisible hand dictates that if all the individuals of the society would go on to pursue their own self-interests then not only they would achieve their own goals and objectives but at the same time, they will also satisfy the societal needs and expectations (Dyck & Neubert, 2008). Even if the company and its managers appear to be focusing on other variables such as environmental preservation, employee development, stakeholder management and others , that is only because they want to achieve the financial result which are the bottom line of the company. Much of the productivity and development that we witness today is actually a result of mainstream approach, which ruled the management and industrial scene for decades (Köster, 2007). On the other hand, multistream management refers to the approach, which calls for taking holistic view of well being of multiple stakeholders associated with the operations of the business. Managers using the multistream management approach are more likely to focus on practical wisdom, experimentation, workplace democracy, self-control, dignification, ethical conduct, and others. The company and its managers realize that they are operating in a wider environment where the extended society and its members are also the stakeholders of the company. Financial numbers and quarterly results become a secondary concern for the company and its managers and the prime focus become managing and balancing the company’s expectations with the well being and requirements of all stakeholders (Dyck & Neubert, 2008). Rather than believing that “if one has to win then others would have to lose”, the focus remains on creating “win-win” situations for everyone. The mainstream approach to management somewhat rejects the Smithian idea of being self interested but believes in the Aristotle’s Virtue Theory where the philosopher stresses on creating, nurturing and developing virtues which would lead to good, responsible and healthy actions (Lussier, 2008; Dyck & Neubert, 2008). An ideal mainstream manager’s approach towards the four functions of management would be completely different from that of a multistream manager. For a mainstream manager, planning would mean a process of setting goals and objectives and identifying the resources to achieve them with maximum efficiency. However, a multistream manager would look towards planning as an activity where people would work together to construct the organizational goals and strategies and identify the resources required for the same. A mainstream manager would view the management function of organizing as assigning tasks and arranging organizational resources for meeting the organizational goals. However, a multi-stream manager would believe that the organizing function is about “ensuring” that the tasks have been assigned with resources so that now people could experiment and manifest their creativity in their operations and tasks. For a mainstream manager, leading is all about motivating others to achieve the organizational goals, however, a multistream manager would define leading as working alongside others to help them achieve their personal as well as organizational goals in harmony with eachother. Controlling would be a process of monitoring the performance and actions of organizational members and taking corrective actions when necessary for a mainstream manager. Nevertheless, for a multistream manager, controlling would be to ensure that the actions of organizational members are ethical and in line with the organizational values (Köster, 2007; Dyck & Neubert, 2008). This thorough background and introduction to multistream and mainstream management approaches lays down the foundation for a paper, which would go on to examine the applications of these approaches in real life situations and would identify organizations where these approaches are being used. The paper would attempt to identify that how well each approach works. The basic presumption behind this paper is mainstream management may work in the short term but in the long term and for strategic actions, companies need multistream management. Discussion Mainstream Management McDonalds Probably one of the most prominent examples of mainstream management is McDonalds, which is the largest fast-food chain in the entire world, representing Americanization and Globalization. In the year 2010, revenues earned by McDonalds increased by 6 percent to 24.075 billion US dollars and Net income were almost 5 billion US dollars which was an increase of 9 percent over the last year. The company has more than 0.4 million employees all over the world and the Merriam Webster dictionary added the term Mc Job for these employees, which is defined as a job “a low-paying job that requires little skill and provides little opportunity for advancement”. Despite repeated attempts from McDonalds, the officials from Merriam did not remove their definition and believed that this paints the correct picture of employee working at McDonalds. For years, institutions and its own employees have criticized McDonalds for inhumane and inconsiderate treatment of its employees. Majority of the jobs are not well paid, can be characterized as blue-collar jobs with least possible benefits and rewards and nonexistent opportunities for development (Lussier, 2008). Furthermore, while working at McDonalds employees may lose their dignity and self-esteem since they are more likely to be treated as programmed robots. George Ritzer in his book “McDonaldization of the society” points out five aspects of McDonaldization of society. Two of them are calculability and predictability. Calculability refers to objectivity of quantifability of every aspect of the business rather than making it subjective. Whether, it is sales, revenue, quality, customer satisfaction, taste, smell or others, it has to be measureable. The quality of the work that the employees do is of lesser significance as compared to the quantity of their work. Customers have to believe that they are getting more for less, regardless of the quality and the major task of the employees is to help the organization in achieving the same. Predictability refers to standardization of the process, which means to avoid any variability and introduce highly repetitive and routine tasks for the workers. They are discouraged from using their innovation or creativity and have to follow specific set of rules. Furthermore, it is highly unlikely that even any first line manager at McDonalds would get a chance to contribute to the decision making of the top or even middle management or have his or her say in the organizational decision-making (Wilton, 2010; Ritzer, 2009). The company has also received its share of criticism for exploitation of its suppliers in the third world countries, spreading obesity, tricking children with its advertising filled of toys, unhealthy menu and so on. The company has responded to such criticism by making minor changes to its approaches which not only passively show that the company accepts its constant neglect of its stakeholders but at the same time, it shows that there is still a long way to go for McDonalds (Martin, 2003). Best Buy Best Buy is consumer electronics retailer in the US market with almost one fifth of the total market share. The company has more than 0.2 employees all over the world and revenues of more than 50 billion US dollars as per the figures released in the year 2011. Furthermore, Best Buy’s Net Income stands at 1.28 billion US dollars. For past couple of decades, the company has been continuously accused of fraudulent, deceiving, sham, and misleading sales activities. There have been many claims and lawsuits against Best Buy during the last decade or so where customers have claimed that the company’s sales people used high pressured sales techniques and tricked the people in believing that their extended warranties covered all the damages and replacements (Lussier, 2008). Furthermore, the company also created artificial barriers for the customers who wanted to claim these warranties. Some of the cases are pending whereas, in many cases, Best Buy has reached settlements for thousands of dollars with the customers. On various customer forums, blogs and societies, Best Buy has received great deal of criticism because of its deceptive pricing techniques. It appears that the company is least interested in creating long-term partnerships with its customers (Wilton, 2010; Leach, Wall & Jackson, 2003). It was in the year 2007 that Best Buy made headlines when Greenpeace named the corporation as one of the companies, which were responsible for deforestation in Canada. The company, although, did change its operations to escape their claims (Köster, 2007). Multistream Companies Gore W. L. Gore & Associates (more commonly known as Gore) is one of the most astonishing and unusual organizations present in the corporate world. The company has diversified into many markets and industries as if it has the reach and financial base of UniLever, P&G or Johnson and Johnson. Nevertheless, the company is indeed a reputed name in the advanced technology products for electronics, automotive, environment, aerospace, military, textile, industrial fabrics, and medical/healthcare, surgical markets, and industries (Raelin, 2005). With operations in 30 different countries, the company employs more than 45000 people, which it strictly prefers to call its “associates”. Since its inception, it has repeatedly received a huge list of awards for its innovation and creativity (Leach, Wall & Jackson, 2003). Furthermore, Gore is one of the five companies which has constantly made to all lists of “best companies to work for” in United States. Since it is not a public company, therefore, it does not release its financial data on the internet but it has been reported that the company has been constantly achieving double digit for the past fifteen years. Furthermore, average turnover in the industry peaks at 16 percent but Gore has been able to maintain turnover rate at less than 8 percent for the last couple of decades (Köster, 2007; Raelin, 2005; Hackman & Wageman, 2005). In the year 2009, Gore received more than 19000 job applicants when it only needed to fill 500 positions. Interestingly, these applicants were interviewed a team of five people, which consisted of not only the top management or their bosses but future teammates and colleagues as well. During the first six months, employees are not expected to contribute but the focus remaining on orienting employees with the culture, values, systems, processes, and people at Gore. The founder of Gore, Bill Gore had the staunch belief that the workplace needs to have a balance between “making money” and “having fun” (Lussier, 2008). The company still stands true to this ideology even after five decades of its operations. Summer picnics, Halloween parties, lunches, beaches parties, celebration of successful projects, breakfast, sports leagues of football, soccer, golf, bowling, volleyball and others, surprise distribution of profit sharing checks, concerts and others are a regular and recurring feature at Gore (Raelin, 2005). Unlike other companies, Gore does not allow its employees to have anything, which resembles even a bit like a job description. Employees select their projects for themselves and then work with their teams for their accomplishments (Wilton, 2010; Hackman & Wageman, 2005). The compensation of employees depends upon three important factors. Competitiveness, benchmarking across divisions and departments and the ranking received from all the peers in a plant or division. Furthermore, Gore does not believe in providing a major portion of income in variable pay since that would divert the attention of employees from the long-term strategic goals of the company (Raelin, 2005). Semco Semco was founded in the year 1952; however, the company did not make any headlines until the year 1980 when Ricardo, son of the company’s founder Antonio Kurt Semler (Vanderburg, 2004), took over the company after completing his MBA from Harvard Business School at the age of 21. When Semler joined the company, he was of the idea that the company should diversify into new markets but the Board of Directors kept on resisting the idea (Vanderburg, 2004). Finally, his father gave up to his son’s resistance, went on a vacation to Europe, and left the company to Semler. When Semler took over the company, he decided to operate it, with his principles of employee wellness, employee participation, employee empowerment, workplace democracy, stakeholder management and others (Lussier, 2008). Furthermore, he instantly fired 75 percent of the top and middle managers of the company because he wanted to create an extremely flat organizational structure with could encourage communication amongst all employees of the company regardless of their ranks (Semler, 2004). In the past 30 years, much has happened in Brazil but during this period, Semco has progressed and expanded under the golden principles of Semco. Sales have increased by 24 percent only during the past decade and profits have tripled during this period. The company has been able to keep its turnover rate at less than 1 percent where the industry average peaks at 20 percent. More than 150 Fortune 500 companies have sent their representatives and researchers to Semco to understand the golden principles of Semler, which have guided the company to success (Wilton, 2010). Semler strongly believes that employee empowerment and employee participation is the key to almost all problems. There is no dress code at Semco and employees can wear whatever they want until and unless it bothers their fellow colleagues. There are no glass ceilings, soundproof rooms or big offices at Semco but one would find cubicles all over the place with four colleagues sharing one table. At Semco, employees determine their own salaries (Vanderburg, 2004). Information about the average market pay is given to the employees; furthermore, the salary of every employee of the company, from a clerk to the CEO of the company is made public. Then employees are given the chance to determine their own salary. If the company feels that the employee is asking for too much then the company would sit down with the employee and either ask him to lower his demand based on his contribution or leave the company. Whenever the company has to take an important decision, the way out is to take a vote from all the employees and surprisingly enough, Semler has only one vote to affect the process (Semler, 2004). Conclusion The paper attempts to explore the practical applications of mainstream management from the examples of McDonalds and Best Buy and multistream management in light of the examples of Gore and Semco. It appears that all these companies are financially viable and have been making profits. However, what is evident from these examples and research is the fact that was mentioned in the beginning of the paper as well that mainstream management is only applicable in short term but multistream management approach is ideal of the company aims at achieving long term strategic goals (Glor, 2005). Considering the ongoing globalization, revolution in information technology, increasing awareness amongst customers and increasing concern regarding ethical and environmental issues, businesses cannot rely on their selfish approaches. Gone are the days when the companies had significant bargaining power over their customers and employees to dictate their own terms (Leach, Wall & Jackson, 2003). That bargaining power has been shifting steadily from companies to employees and their customers. Retaining employees and customers is becoming more and more difficult and with a vigilant media eyeing on all actions of companies, they cannot take the risk of losing their credibility. Repeatedly, when McDonalds and Best Buy tried to engage in any unlawful practices, the media, NGOs, watchdogs, customers and other associations brought its actions in the spotlight and then the company had to pay to price in form of decreasing credibility. If this continues, considering the increasing competition, it would not be long before these companies lose their market shares (Martin, 2003). On the other hand, Gore and Semco over the years, have earned a reputation in customer circles of being innovative and trustful, and in employee circles of being caring and considerate. These companies do not only attract thousands of job applications but almost every other product of these companies is a hit. References Dyck, B., & Neubert, M. (2008). Management: Current Practices and New Directions. Cengage Learning. Glor, E. D. (2005). “About Empowerment.” The Innovation Journal: The Public Sector Innovation Journal. Volume 10, Issue 1. Hackman, J. R., & Wageman, R. (2005). “A theory of team coaching.” Academy of Management Review. Volume 30, Issue 2, pp. 269-287. Köster, M. (2007). Human Resource Management versus Personnel Management. GRIN Verlag. Leach, D. J., Wall, T. D., & Jackson, P. R. (2003). “The effect of empowerment on job knowledge: An empirical test involving operators of complex technology.” Journal of Occupational and Organizational Psychology. Volume 76, pp. 27-52. Lussier, R. N. (2008). Management Fundamentals: Concepts, Applications, Skill Development. Cengage Learning. Martin, J. (2003). “Rise of the New Breed.” CEO Magazine, August/September, pp. 25-29. Raelin, J. A. (2005). “We the Leaders: In Order to Form a Leaderful Organization.” Journal of Leadership and Organizational Studies. Volume 12, Issue 2, pp. 18-30. Ritzer, G. (2009). McDonaldization: The Reader. Pine Forge Press. Semler, R. (2004). The seven-day weekend: changing the way work works. Portfolio. Vanderburg, D. (2004). “The Story of Semco: The Company that Humanized Work.” Bulletin of Science Technology Society. Volume 24, Issue 5, pp. 430-434. Wilton, N. (2010). An Introduction to Human Resource Management. SAGE Publications Ltd. Read More