The Importance of Companys Management - Assignment Example

Executive Summary A company’s management is essential for the growth and expansion of the organization. This is exemplified by the Haier Group, which grew from an importer of refrigerator production technology to a world leading home appliance manufacturer within two decades. The company took a different direction after Zhang Ruimin took over as the CEO. The company is now regarded as one of the fast developing and aspiring Chinese brands in the International Market. Before Zhang came to the rescue of the company, the Haier Group had a group of undisciplined and low-skilled employees and suffered from low productivity and reduced product quality. Zhang faced difficult times while trying to rescue the company from management mayhem and financial turmoil (Lau & Han 1-2). In order to liberate the company, Zhang instituted an organizational philosophy and rules and overhauled the business strategy to establish an incentive-oriented management control system. As the company continued to grow, Zhang was proud of its growth. However, one of the hurdles facing the company was how to fine-tune its processes and structure to face transformations in the current competitive global market. In order for the company to sustain growth in the future, it needs to consider how it will motivate its workers in the future to attain high performance goals, and how it will revolutionize the management control system to adjust to the organization’s internationalization stratagems. This report looks at possible problems that may arise from Haier’s management control system and documents recommendations on how the company can boost its employee’s motivation and heighten their desire to achieve the company objectives. It shows the loopholes in the management control system and presents ideas on how possible threats arising from the loopholes can be avoided. Issues within the Management Control System Through the intervention of Zhang, the Haier Group placed a considerable significance on the institution of a set of core values and corporate philosophies to maintain and promote employee cohesiveness. The primary organizational culture of the Haier Group was innovation. This was made effective by publishing a handbook that detailed the organization’s culture and establishment of an enterprise culture section to teach the workers on it. However, as the organization’s operations grew, it shifted from a process to people oriented approach. This led to the implementation of OEC management system, which aroused the employee’s sense of responsibility (Lau & Han 4). This management system grouped people into small groups with different standards and targets. This required every group to ensure that it attained the targets. This made the groups repeat the processes in order to find means of improving their process the same day (Lau & Han 5). The fact that the employees were required to come up with ways on how to improve their process within the same day would have acted as a less motivating factor. Notably, most of the processes in an organization require a considerable number of hours if the process fails or does not meet the target result then the employees will have to redo the process and will spend more time and will have overworked within that day. It is imperative to note that overworking of employees is one of the factors that contribute to low levels of motivation among employees. This may make the workers feel overburdened with huge work that can make them stressed and less motivated. Therefore, it is significant to recommend an OEC management system with a longer timeline such as two days or a week, or a management system that gives few processes to be accomplished within a given time. For instance, an OEC management system that gives three tasks that can be accomplished within five days. The reward system adopted by Haier is based on the performance of each product division recorded by the product manager (Lau & Han 7). Though this seems to be an efficient way to motivate the employees towards attaining the division target objectives, it may not be fair and equitable to all employees. It is significant for the organization to come up with a reward system that rewards individual employees. This system of rewarding is not just since the efforts of the product division group are awarded collectively. The productivity of all the employees cannot be similar and, therefore; the company should have considered individual contribution in the groups. Although the reward system does not speculate how the bonuses are distributed, it is assumed that the bonuses will be distributed equally. When distributed equally, an employee who had put more efforts and rewarded similarly to an individual whose contribution was not significant will be demotivated. This may also create a scenario where some of the employees in a division become reluctant and wait for the determined employees to put efforts in attaining the objectives and targets issued. However, Haier’s reward system intended to channel the division performance goals to the employees and assist in the calculation of the productivity of the division. Additionally, this system did not consider the role of the product group’s manager in the attainment of the targets and objectives. It is imperative for the reward system to consider the role and contribution of the division manager since a manager may rely and wallow in the miasma of the employee’s efforts. Therefore, it is recommended that the company designs a reward system that could evaluate the product manager’s contribution to the success of the group and reward them as individuals. Though Haier had grown and expanded to the international market, it had not made management policies to deal with challenges of internationalization such as how to deal with competitors and innovation and transfer of technology. Additionally, the company’s strategy should have considered a global management team that would be responsible for recruitment of staff in all regions. Competitors present a threat to all organizations. It is in this regard that the company requires having policies on dealing with its competitors in order to compete with them and look for was on attaining a competitive advantage. Review of strategies within an organization is significant in the attainment of desired objectives. In this case, in order for the Haier Group to attain high employee motivation and also structure the business units in the best way, there is a need to consider its current management control system. After an evaluation, some few loopholes were identified, which could have a detrimental effect on the employee motivation and attainment of desired company objectives. Appendices Exhibit 1: Causes of stress and workload on employees Exhibit 2: Effects of workload on employee performance Exhibit 3 This shows that employee performance may decline with continuous use of the OEC management system. This is because it may result to stress and a heavy workload on the employees. The fact that employees have to work until they can identify where they went wrong may take more time and may be forced to work overtime. Therefore, this management system can demotivate employees who will be left working for extra hours after they failed to attain the desired target objectives. Exhibit 4: Effects of an unfair reward system on employee performance Exhibit 5: Relationship between Job Dissatisfaction and an Unfair Reward System Dissatisfaction Level Unfair Rewarding System In this reward system, reluctance among some of the employees may be high and result to low performance and dissatisfaction. This can be detrimental to the progress of the product division and the organization as a whole. This will lead to demotivation among the employees and blame game if the group does not attain the desired goals and objectives. Exhibit 6: Anticipated Company Sales Turnover as a result of employee dissatisfaction Works Cited Lau, Amy, and Jun Han. "Haier: Management Control on a Tactical Level." Asia Case Research Center: The University of Hong Kong (2007): 1-26. Print. Read More