Contemporary Management - Essay Example

Topic: Contemporary Management Introduction Contemporary business management is characterized with innovative frameworks and optimization of technology to communicate its products to the market. Like other management and operation, the company is guided with its clear vision, mission, targeted goals and outcome, but it earned distinction by thriving by managing risks and through e-commerce (Heng, 2001). In this study, we will tackle how Amazon.com, a leading online seller of books and reading materials, advance its business strategies in a global scale applying theory contemporary management in reaching its market goals effectively. This paper will specifically (a) analyze effective management and the evolution of management’s ideation; (b) analyze effects, influences and changes from numerous factors using theory of contemporary management; (c) examine how management theory can be optimized in Amazon.com’s organization; (d) evaluate the significance and impact of information technologies in contemporary business operation; and finally, (e) appreciate how information systems are optimized to support Amazon.com’s management’s decision-making. Theories of Management Contemporary business management is distinguished by some significant factors with other theories of management. The latter is inclusive of scientific, bureaucratic management, human relations movement and progressive management development (McNamara, 2012, p. 1). Scientific management theory, which is more widely practiced in the 18th to mid-19th centuries by then emerging large industries, deals with routinary tasks in the manufacturing industries (McNamara, 2012, p. 1). The management here is very apposite at technical matters especially in measurements, specifics, and standards (McNamara, 2012, p. 1). The theory is developed by Frederick Taylor and has the strictest relations between employers and employees due to its reward-and-punishment policy (McNamara, 2012, p. 1). This system evolved into bureaucratic management as theorized by Max Weber in the mid-19th century (McNamara, 2012, p. 1). Members of an institution are subdivided into hierarchies and with standard operating procedures to systematize their functions (McNamara, 2012, p. 1). The dehumanizing and enslaving relations at workplaces under these management theories motivated workers to deliberate their rights and fought for human relations movement to improve their situations in work places (McNamara, 2012, p. 1). Impelled by labor unrest and uprisings, workers demanded for business management that respects their skills, capacities and intelligence (McNamara, 2012, p. 1). They asserted, as reflected with corporate behaviorism, that organizational integrity and development could only be attained if workers rights and needs are considered by the companies (McNamara, 2012, p. 1). Bolstered by these movements, workers were capacitated, coached, and mentored for their career development and supervisory skills acquisition (McNamara, 2012, p. 1). Most workers were sent to school to acquire knowledge on effective business operation and human resource management (McNamara, 2012, p. 1). Nowadays, companies embraced contemporary management which is featured with contingency, systems and chaos theories (McNamara, 2012, p. 1). The first theory contended that the management assume the power of decision-makings using frameworks and approaches with better leadership styles (McNamara, 2012, p. 1). Contemporary leadership adopts the confluence of transformational, transactional, principle-centered and charismatic styles to manage human resources to ascertain that they are well-motivated to meet goals while engaging clients for their respective service satisfaction (McNamara, 2012, p. 1). On the other hand, systems theory extols functional systematic operational procedures laid for workers in business operations and in human resource management (McNamara, 2012, p. 1). The system includes regular meetings, planning, implementation, monitoring, evaluation, workers’ feed-backing and performance control (McNamara, 2012, p. 1). Currently, this kind of management is adopted by governments, industries, corporations, educational institutions and the like (McNamara, 2012, p. 1). This is a breakthrough in business management, experts say. Chaos theory, meanwhile, recognized the complexity of modern business management but leaders perceived that albeit uncontrollable circumstances impelled by rapid changes in the market, the same can be controlled through if business leaders will be in an incessant analysis and reading of trends to maintain stability or to withstand economic shocks (McNamara, 2012, p. 1). The complexity of business operations coupled with investors desire to reach global markets at the household level, contemporary management adopt and optimized information technology (IT) to advance business ventures. This is the most liberalized from of business operation using the potential of information technology in marketing. Through web-based facilities, marketing and communication for customers are bridged and facilitated. At a greater context, IT also becomes an instrument for i-system and business solutions (Moraru, 2009, pp. 440-443). Through IT, decision-makings are often structured for relevant decisions for the organization. To attune to business needs and interests, IT-based marketing offered precision in buy and sell relations in a scientific coordination and controlled procedures (Moraru, 2009, pp. 440-443). This is where Amazon.com contextualized itself as a web-based business organization that trail-blazed in marketing products via e-commerce. Contemporary Management and Amazon.com . Amazon.com is an online business registered under Security and Exchange Commission (SEC) since 1994 and holding office at Seattle, Washington (US Security and Exchange Commission, 2011, pp. 2-76). It’s listed under Nasdaq Global Select Market (US SEC, 2011, pp. 2-76). It is a virtual avenue for online sellers, consumers, enterprises and content creators (Chaffey, 2012, p 1). Amazon’s business offer services focused on selection, price and convenience aiming at selling all products from softwares to IT hardwares, home necessities, books, kindle, with secure payment systems (Chaffey, 2012, p 1). It desired to leverage with other competitors by offering low prices of products online and to ship sold products reliably and efficiently (US SEC, 2011, pp. 2-76; Chaffey, 2012, p 1). Targeting global customers, it used co-sourced and outsourced systems to fulfill its 76 million customers via data analytics and business intelligence with interactive transaction systems (Chaffey, 2012, p. 2). For sellers, Amazon offered websites and branded sites to bridge them to Amazon’s customers (US SEC, 2011, pp. 2-76). Although it acted as conduit for sellers, Amazon still earns fixed rates, including from its media sales (Chaffey, 2012, p. 4). It also earn from its Amazon Web Services (AWS) for online site developers (US SEC, 2011, pp. 2-76). Other service offered is content development for authors and publishers thru Amazon’s Publishing and CreateSpace (US SEC, 2011, pp. 2-76). The latter offer on-demand publishing for online creators. As an e-commerce, Amazon is highly competitive but is likewise sensitive to its target market and own resources. To protect its vested interests, Amazon upheld its intellectual property rights (US SEC, 2011, pp. 2-76). The organization profess that trademarks, copyrights, patents, domain names, trade secrets, and property or intellectual properties are significant to it success (US SEC, 2011, p. 3). As of 2011, Amazon has 56,200 employees but pliant in numbers depending on seasons (US SEC, 2011, p. 3). It’s human resource are independent contractors and personnel albeit it has its own council and statutory employees in some countries (US SEC, 2011, pp. 2-76). Noting its distinction as an online commerce, their workers are not unionized but claim that their relations with employees is good and competitive but are cultured by metrics too (Chaffey, 2012, p. 5). The company further claims intensive rivalry of capabilities amongst hired software engineers, computer experts and technical staff (US SEC, 2011, p. 3). The company is vigorously expanding in its management and global operations by escalating its retail services (US SEC, 2011, p. 5). While looking onward for developments, its authorities recognize the increasing complexity in its business, human resource, and operational management (US SEC, 2011, p. 5). Some of the risks it confront are the needs to escalate its technical performance, resource/fiscal management, performance control, and reporting systems (US SEC, 2011, p. 5). Growth challenged them to respond to its operational needs and might damage its corporate integrity if company is unable to unlock its limitations to counter disruptions in quality control (US SEC, 2011, p. 5-6). While the company is articulate of its weaknesses and of possible hindrances in attaining growth, but they wager that their strength rest on its capacity to attract, sustain and retain its market base; expand number of sellers; uphold leadership in e-commerce; adaptation to more improved IT infrastructures; offering variety of products or services; and, leveraging to expand to global market base with unimpaired access, among many others (US SEC, 2011, pp. 5-6). The company likewise forecasted some hindrances in attaining success by strategic expansion in international market if factors fail to optimize its fulfillment centers, hence, the need to predict the demand of consumers (US SEC, 2011, p. 7). The company likewise needs to improve its efficiency in the delivery of purchased goods as impatient customer could readily post commentaries online. Added to that is the need to improve its warehouse capability (US SEC, 2011, p. 7). Organizationally, the company needs to integrate and sustain its commercial relations and strategic collaborations through the facilitation of IT (US SEC, 2011, p. 8) to meet its targeted outcome. Workers should be motivated to better employee-employer relations; provide incentives for gain their focus; improve the integration process of agreements, as well as, improve the revenue generation to standardize income (US SEC, 2011, p. 10). Operational risks need to be mitigated by careful and systematize planning to also lessen losses, and reduce remedial costs, including time loss in repairing impaired relations with sellers and clients (US SEC, 2011, p. 10). Apart from this, the company needs to enhance its market analysis on market trading relations to reduce risks in foreign exchange risks. Forex management necessitates some measures to be adopted such as hedging to evade losses. As market rapidly changes, at times with some shocks, the management must have quick political, economic, social, environmental, technological, and logistical analysis (PESTLE) and sustain on the basis of its strength and opportunities. Aside from these, there is also an urgent necessity for the company to invest for best internet security to prevent data and system breaches (US SEC, 2011, p. 10). Moreover, as business is regulated by policies, Amazon must abide with policies on commerce and electronic business operations. Company must nurture better business relation with government authorities to avail incentives and tax reliefs. Despite these challenges, Osako and Felton (2012, p. 1), bared in a press statement that Amazon’s operating expenses increased by 12.% or has reached at $3.90 billion in 2011 compared to $3.50 B in 2010. Its free cash flow lowered by 17% or $2.09 billion (2011) in comparison to $2.52 B in 2010 (Osako and Felton, 2012, p. 1). The outstanding common shares however pegged at 468 million, a three point notch up than the 465 million in 2010 (Osako and Felton, 2012, p. 1). Moreover, the company had net sales of $17.43 B in 2011, higher than the $12.95 B in 2010 (Osako and Felton, 2012, p. 1). This could have scaled up more to 34% increased net sale if only forex rates stabilized (Osako and Felton, 2012, p. 1). On the other hand, the operating income lowered to $260 M in 2011 than that $474 M in 2010 due to unfavorable forex rates (Osako and Felton, 2012, p. 1). The company’s net income sagged by 58% to $177 M or $0.38 per diluted share in 2011 as against the net income of $416 M or $0.91 per diluted share in 2010 (Osako and Felton, 2012, p. 1). Albeit the wide margin of disparity of income, the company was still able to gain profit which they attributed to the wild purchases of Kindle Fire and its e-reader devices in the last quarter of 2011 (Osako and Felton, 2012, p. 1). Amazon’s net sales in 2011 increased by 41% or $48.08 B as against the $34.20 B in 2010 (Osako and Felton, 2012, p. 1)—computation included that $1.09 B annual changes in forex rates (Osako and Felton, 2012, p. 1). The operating income however lowered by 39% or $862 M in 2011 as against the $1.41 B in 2010 (Osako and Felton, 2012, p. 1). Operating net income decreased by 45% to $631 M in 2011compared to $1.1 net income in 2010 (Osako and Felton, 2012, p. 1). Conclusion As the company struggled to cope with the internal and external pressures from the market, however its leaders are still able to attain better income amid economic shocks. The complexity of the rapid changes of the market proved the risk and vulnerabilities brought by forex rates fluctuations affecting income. Under contemporary business management, Amazon.com has advanced itself in gigantic profits even if it’s trailblazing in such e-commerce ventures, although figures observably sloped down by almost 50% in a comparative analysis of income and profits derived in the last two years. The appreciable aspect here is that the management was able to forecast the issues, problems, challenges, hindrances and the volatile condition of the market’s forex thus, have technically better prepared to expected shocks using critical contexts and analyzed information. With their assessments that are contextualized to erratic changes and impacts, it can still be inferred that the company is able to brace itself from possible tremendous effects. With gigantic number of human resources and highly technical operations endured by Amazon.com through, the management was still able to take control with this risky venture by prevailing well against market odds. Indeed, with systems and clear plans laid, leaders could only be roughly estimating shocks at every turn of uncertain circumstances, but with experts as its human resources, solutions can be optimized through strong collaboration and partnership. Amazon.com proved that albeit the challenge in IT-based commerce and operation, the digitized market is still one of the best options in business management (Moraru, 2009). Complex and highly technical in its systems, the company illustrated notwithstanding the significance of systems in operations and marketing to gain profit and improve business investment relations. It likewise proved that market’s instability can be dealt with squarely, provided the management are adequately equipped with critical analysis using accumulated information to vivify trends and possible outcomes. IT indeed is instrument in marketing process and has become an ally in business expansion. With PESTLE and strength, weakness, opportunities, and threat (SWOT) analyses coupled with good workers relations, business can innovatively succeed. References Chafey, D., (2012). Amazon Case Study. http://www.smartinsights.com/digital-marketing-strategy/online-business-revenuemodels/amazon-case-study/ Accessed: May 1, 2012. Heng, M. S.H., (2001). Rethinking the strategy of Amazon.com. Series Research Memoranda 0007, Faculty of Economics, Business Administration and Econometrics, VU University Amsterdam. McNamara, C., (2012). Historical and Contemporary Theories of Management, Free Management Library, Authenticity Consulting, LLC. http://managementhelp.org/management/theories.htm Accessed: May 1, 2012. Moraru, M. (2009). E-Commerce. Journal of Information Systems & Operations Management, Romanian-American University, vol. 3(2), pages 440-443. Osako, M. & Felton, J. (2012). Amazon Announces Fourth Quarter Sales up 35% to $ 17.43 billion: Kindle Device Sales Nearly Triple During the Holidays, Business Wires pp. 1-6 US Security and Exchange Commission (2011). Amazon.com Annual Report. Form 10-K, Commission File No. 22513. SEC, Washington, D.C. pp. 2-76. Read More