Relationship between Effectiveness, Efficiency, and Productivity - Essay Example

? Management Table of Contents Introduction…………………………………………………………………………………..3 a) Relationship Between Effectiveness, Efficiency, and Productivity………………..3 b) Impacts of Business Life Cycle on Business Performance…………………………6 c) Improvement of Cohesion and Cooperation Across Departments Of Royal Store…7 d) Strategies to Improve Performance And Productivity Of Employees………………7 e) Impact of Characteristics of Managers and Employees on Performance of The Organization………………………………………………………………………...8 f) Strategies to Improve Performance And Productivity Of Employees………………8 g) Impact of Characteristics of Managers and Employees on Performance of The Organization…………………………………………………………………………8 h) Strategies and Procedures to Eliminate Bickering and Conflict Between Managers…9 Conclusion……………………………………………………………………………………….9 Management Introduction Management is a key issue facing the success of any business organization. The example of the royal store serves a great need in the establishment of proper management structures for the storeowner’s goals and objectives to be realized. The fundamental errors the storeowner made in the choice of management structure to use where different managers operated on their own were a costly decision. Management involves more than just holding of academic qualifications to include laid down procedures to be followed in line with the company’s expectations. These procedures are lacking in the Royal Store and each of the managers does as they please. This structure in the management needs restructuring for growth and profitability of the company. The company’s management is not market oriented and lagging behind market changes is dangerous for any particular company. The paper attempts to look at basic management concepts and their effective application in the daily running of a company. The basic definition of management is getting work done by others. Comprehensively management can be described as a set of functions that are directed at the efficient and effective utilization of resources for the achievement of set organizational goals. The difference thus arises in the management of the Royal Store that violates the definition of management, as its management does not adhere to any set functions. a) Relationship Between Effectiveness, Efficiency, and Productivity Effectiveness in the running of a business organization refers to the making of right decisions and successfully implementing them. It also means the accomplishing of tasks that are helpful in achieving organizational objectives. On the other hand, efficiency in a business entity refers to getting work done with the use of minimum effort, expense, or waste. Efficiency entails the use of resources available to an organization in the most cost-effective way. Effectiveness and efficiency in any business organization contribute to productivity. This forms one of the major arguments of Taylor on the issue of productivity. Productivity entails the performing of assigned duties in the manner that is required. In any company, the measurement of productivity is important in relation to the resources employed, which include labor, time, and monetary resources against the total output. Effectiveness and efficiency establish a base in measuring productivity in any organization. The Royal Store in its business activities exhibited lack of efficiency and effectiveness in its management leading to the productivity falling below the owner’s expectations. The company in its efforts to boost productivity should employ several of Fayol’s principles on successful management. The first principle they can inculcate is the unity of command. The principle means that any organization no matter how large it is should have an overall leader to coordinate its activities. As much as Royal Store has different managers, it should employ an overall manager to coordinate all the activities of the company. This will aid the organization in harmonizing the different goals and objectives in the branches to form a general policy guiding the company. This works in tandem with Fayol’s principle in unity of direction based on the common objectives of the firm (Strank, 2004). The company should use the principle of Subordination of individual interests to the common good. This principle will ensure that each manager in their operations within the company will always place the company’s interests first over their personal interests. This would help in solving the problem of bickering and conflict between managers of different departments. Three other principles of Fayol that ought to be adopted by the company are equity, centralization, and scalar chain. Equity addresses issues of fairness in the organization. All the employees and management should be treated fairly in the daily activities of the business and no exceptions should be made concerning fairness. The business in centralizing its operations should avoid inefficiencies. The company should aim at maintaining a balance in its centralization and decentralization efforts (Katz and Khan, 2010). The company in line with the principle of centralization should form “problem-solving groups” (Magjuka, 2006), a practice that is in common use with the Baldrige Awards. The scalar chain principle is referred to as the hierarchy principle that suggests how communication should be done in a company. The principle suggests that a company should form a chain of command vertically with no interrupters for effective communication. This will greatly aid the Royal Store in resolving its leadership as concerning communication between different departmental managers (Mintzberg, 2012). According to Taylor’s theory, a manager should assume the burden of identifying knowledge from the employees and classifying it to form rules and regulations governing the operations of the company. Managers in his structure assume new roles and responsibilities they did not have before in line with laid down procedures. His theories are aimed at the estimation of productivity as a measure of effectiveness and efficiency (Strank, 2004). Managers are tasked with the function of evaluating every man’s work scientifically, then using the results they should train, teach, and develop workmanship. The Royal Store in adopting some of these theories will get closer to establishing and achieving their goals on the expected profits. Fredrick W Taylor rested his theory on Scientific Management on four fundamental principles. The first was the development of scientific management to aid in determination of the best method to perform a task effectively. Secondly, he was of the belief that there should be scientific selection of workers to ensure matching of tasks, thirdly, the workers education and development was to be scientific. Lastly, he advocated for friendly cooperation between the management and labor through creation of good working conditions. The Royal Store could benefit largely from Taylor’s principles in ensuring that there was quality in staffing that matched the job at hand and thus eliminate the underperformance of certain departments. In evaluation of its laborers and management, team the company will engage in specialization and this will directly influence productivity (Strank, 2004). b) Impacts of Business Life Cycle on Business Performance Business life cycle is a term used to describe all the stages a company undergoes over time in its operations. The cycle in which a business is in greatly determines the company’s strategies, goals, and objectives. A good example is a business in its infancy stage compared to an established business. The infant business if addressed on advertisement basis will have to put in more into adverts than a well-established company does in order to market itself. The dynamics in the markets change throughout the existence of a business entity and it is upon the management to design strategies that ensure it is up to speed with the changes. The Royal Store Company in line with changes along the business cycle should institute Life Cycle Management (LCM). LCM is aimed at the improvement of decision-making and provision of a means of integrating the ever-changing dynamics of the business environment. The non-performance of the organizations profit and growth performance can be directly attributed to the lack of strategic management an effective tool of LCM. Strategic management is pegged on strategic planning that ensures a company has measures to cover changes at all times (Mintzberg, 2012). The company in this case in its expansion did not have any strategic planning concerning carrying out business on the relatively larger scale. A business that is under the growth stage in its cycle should at all times try and establish new markets and innovations to maintain its customers and attract new ones. The other reason for the failure of growth in relation to the business life cycle is related to product design and production. In product, design at different stages of the life cycle a company should aim at product differentiation. Product differentiation helps a company in carving a niche for itself and helps in the growth in profits and the general growth of the company. c) Improvement of Cohesion and Cooperation Across Departments Of Royal Store Cohesion and cooperation between the departments of the company is very important in aiding its overall growth. There are four basic functions of management in any organization and they include controlling, planning, organizing, and directing. In order to perform these basic functions, it is necessary for every organization to set up management structures (Mintzberg, 2012). The structures help in outlining the specific roles and functions of the various levels of management. Management structures are composed of several key components such as task definition. Task definition in the company could help in enhancing cooperation as every of the departmental managers will clearly know their duties. Another element is that of establishment of an effective communication style. Communication is very important at different levels of management and if it is proper, it resolves the different conflicts that might arise. The other component of management structure that could effectively serve to enhance cooperation of the management is the formalization of activities within the business. The company should strive to standardize its procedures with clear definitions of the rules that govern all decision making (Magjuka, 2006). These structures in place, the company will be aided in performing managerial functions spelt out above and will ensure the cohesion and cooperation of all the company. d) Strategies to Improve Performance And Productivity Of Employees The company in its efforts to boost productivity cannot neglect its employees and its managers should engage in activities to ensure that employees are highly motivated. Herzberg put forward a theory on motivation hygiene of employees in different organizations. The theory focuses on the various aspects of a company’s policies on its employees. Employees are motivated by the environment they operate I according to Herzberg and it is therefore the responsibility of the management of The Royal Store to ensure the working environment is safe. Hygiene is pertinent to all people and no employee would love to work in unhygienic conditions, as the threats posed by such on their health are grave. Employees’ remuneration contributes to their motivation. Attractive salaries and wages help in motivating people to take up jobs in a company and the quality of work done. Workers who are paid according to their input and skills and work in hygienic conditions tend to be more productive. It is the duty of the management to ensure that the welfare of its employees is placed first to ensure productivity is increased. e) Impact of Characteristics of Managers and Employees on Performance of The Organization Theory X suggests that all employees in any organization are lazy and they need constant supervision from the company’s management for them to perform. Theory Y is a contrast of theory X as it suggests that employees are at times self-motivated, ambitious, and they can exercise control on their activities with minimal supervision. Employees who have the characteristics discussed in theory X do little to contribute to organizations activities and their actions negate the effectiveness pillar of business organizations (Magjuka, 2006). Managers who believe in theory X also contribute to the inefficiencies of any company as their patronizing behavior do little to motivate their employees. Characteristics of managers and employees that are rooted in theory Y help in the growth of the company. f) Strategies and Procedures to Eliminate Bickering and Conflict Between Managers Conflict resolution in the company should be instituted immediately. The management of the company should cooperate with each other to ensure smooth running of the company. The principle of conflict resolution that would be suitable for the company is the accommodative principle. Managers in the company should learn to accommodate each other and work for the common good of the company in achieving its objectives. The company’s management should strive at finding a compromise in the activities to be carried out. Conclusion In conclusion, the company should endeavor to carry out total management restructuring without fear or favor if it is to increase its profits. The company in its efforts to bolster growth should establish a culture and code of ethics that will ensure guidance in its operations. Good and efficient management skills should be the pillar of any business organization. Bibliography 1. Katz, D. and Khan, R.L (2010), The Social Psychology of Organizations. New York, NY: John Wiley & Sons,. 2. Magjuka, R.F. (2006), “Survey: self-managed teams achieve continuous improvement best”, National Productivity Review, spring. 3. Mintzberg. H. (2012), Structures in Fives: Designing Effective Organizations, Prentice Hall, Englewood Cliffs, NJ. 4. Strank, R.H.D. (2004), Management Principles and Practice: A Cybernetic Approach., New York, NY: Gordon and Breach Science Publishers Read More