The Basic Streamlines Used in Evaluation of the Organization - Case Study Example

CONTRAST THE ASSUMPTIONS OF MAINSTREAM AND CRITICAL APPROACHES TO STUDYING ORGANISATION Introduction This review refers to the development of a critical understanding of strategic management of an organization and the basic streamlines used in evaluation of the organization. The core of any company depends upon its management and every organization needs to have a successful strategy in order to prosper. For this purpose it is necessary to understand strategic management such that we can evaluate a company through its management policies. I will provide a concise outline of strategic management as it is normally taught and practiced and further pointing to many aspects for developing critical approaches. As a whole and general principle, a critical viewpoint differs or can be said as it is outside of the managerialist course in order to learn strategy as a definite organizational process. Through research and several other reviews it was seen that there are many approaches that are critical to strategic management and one of them is the processual school that asserts to illustrate how strategy is actually made from bargaining, constructivist, and embryonic perspectives. But the case is that processual approaches keep some promise however quickly move en route for prescriptive managerialism. Next I would add about a more profound critique from critical theory and postmodern insights. Strategy can be witnessed as a set of practices and discussions which promotes influential rationality it also reiterates hierarchical relations of power and most of all analytically privileges the interests and perspectives of particular groups. This approach has been important in probing the principles of strategy what it lacks is the point that its focus on discussion and lack of concern with the reality of strategy is to a very valid extent its potential weakness. The third and final approach that I like to discuss is drawn from Gramsci which gives an offer from a historical materialist perspective, this approach pays more attention to the actual content of strategy. Here the debatable point is that the strategic exploitation of discursive, managerial, and monetary resources in supporting or challenging supremacy suggests a strategic notion of power and a political standpoint on corporate strategies to exercise market power, influence government policies, , discipline labor and refuse to accept pressures from social groups. This approach also points to a more encompassing image of liberation strategies. Next we can asses the corporate culture in order to get the perspective about the organization involved. Corporate culture is often determined by the beliefs of the people at the controls -- and this culture can affect the way individuals in the organization respond to adversity. For example, a corporate culture based on top management's belief that "No matter what, employees will always work as little as possible, so it's our job to monitor them closely" can foster mistrust and an "us/them" thinking style. In Adaptive terms, this would create a less resilient organization. Senior management can use the Adaptive skill set to build a corporate culture that endorses a flexible, optimistic approach to handling adversity. They can learn to identify their own and their company's cultural "thinking style". They can then check it for common errors in logic and identify the consequences of the style to themselves and to the organization. Corporate Governance and organizational performance To understand the better functioning of a corporation one must know about the corporate governance which is identified as a field in economics that examines how to secure efficient running of organization by the utilization of incentive mechanisms, such as agreements, organizational designs and legislation. This is often limited to the question of improving financial performance, for example, how the corporate owners can secure/motivate that the corporate managers will deliver a competitive rate of return. It is the system by which business corporations are directed and controlled. More to our concern is about organizational performance related to its human capital. The world is becoming a global village. Firms are getting larger and larger day by day. There was a cartoon shown in the past which depicted that Unilever is now opting for the moon as its market just because it has managed to foster all boundaries of the globe. The evidence is low as very few business topics attract as much public attention as the paychecks of top executive officers in the largest companies. Leadership is considered as the most vital part of any organization and assessing companies with strong leadership or evaluating through the leadership approach is also a better notion as it is the leader who guides or enlightens the path to glory of the organization. A leader is one who gives a clear vision for an organization to make a better future. That is to say that the leader looks upon the bigger picture and long term goals. The leader is like an eagle that flies high enough to take a complete view of what there is and what is coming, but not too high to get its eyes off its prey. This enables a broad yet focused view. Leadership is also subject to past history of the individual being involved as the case was with Winston Churchill and Adolf Hitler. Where Winston belonged to a background where he was groomed in Love and affection and the opposite was the case with Hitler. Thus creating two vast differences that Hitler was more towards Hatred and Winston being close to love. Hitler, thereby, pursued racial policies and Churchill went against him. Both were Situational leaders and both nevertheless both failed as situational leadership tends to diminish as time passes. As far as heredity is concerned there can never be a better example than the Holy Prophet Hazrat Mohammad Mustafa P.B.U.H. who left behind him five generation of leaders. Here such an observation is no where to be seen as most inheritors fail to learn and understand their Gurus, making amendments to the system. Relationship management is a key fundamental in the success of a leader. A good leader needs to be empathetic such that the follower needs not to hide any backlogs being witnessed. The leader is held accountable to all who are affected by his work or decisions. Suppose that a company launches a new product line that is very fruitful to the firm and its customers, there may be case that its make up is somehow affecting those living nearby the production facility. Coming ahead we have the monetary approach that enables the stakeholder to understand the company performance. Economies of scale are achieved when a firm has its average cost reduced primarily due to increased output levels. Economies of scope provide a generic view for multi-product firm. Financial institutions have products that are spread over transaction services such as deposits, loans, funds management, etc. In today's competitive banking sector, economies of scale and scope are a mandatory requirement to survive. The answer to this issue is the diversification of product and geographical portfolio which is attained by means of a merger. For example, when merged with another institution, a bank increases the length of its reach to the masses. There might be a factor of redundancy; however, the benefit to the cost is quite high. At this point in time, it is very important to have known that are the economies affecting actually long run or short run in essence. Whilst analyzing the technological progressions, it is also important to have known fact about the process and product innovations; the former can be defined as responsible for the cost reduction of existing product, while the later is increasing the value of an existing product. Further the things to be addressed are ventures that make companies engage into fruitful activities and sometimes these do defer from truce as the impact on the financial statements is great and people failing to understand the scenario do fall into this puzzle. It is important to assess mergers also as they help the organizations in many ways. The reason behind this strategic alliance between the companies is not a single one in fact there are many. Companies engage in these activities to benefit more and reduce the risk involved with competition and failure. Here are a few advantages which the companies seek in order to maintain growth and expansion due to a Venture. Risk is shared because as the companies form a venture the organizations pool their resources and therefore if a company bears a loss then the pooled capital will decrease not the company's. By forming a joint venture a company can easily expand their business and could possibly cover more market share in the market. This is because the company has more resources, greater capacity, a better distribution channel A joint venture also makes a company more flexible because a joint venture are formed for a limited life span and also it only covers part of company's processes, therefore joint ventures limits both the company's commitment and the business' exposure in the existing market. Joint ventures are also very advantageous in creating a more globalize world which might cause countries to decrease the imposition of legal laws on foreign businesses. The joint venture could earn more profits if a venture is operated in a more formal and an organized pattern. However true evaluation is based upon the fact that how firms cope up with the problems they face that are as follows. Due to different corporate cultures and management styles colliding the joint ventures result in poor co-operations, poor integration between workers, bad communication etc Each member of the venture has different plans to operate the joint ventures which cause conflicts between the members. By forming a joint venture the business objects and plans are exposed to the other members in the joint ventures which could cause the company to expect competition between the members in the future. Companies that take care of the above situations and do practice management of change are no doubt in a very strong position to overcome any problem they face. The next step I would like to comment upon is the SWOT analysis technique. SWOT analysis essentially organizes and analyzes the internal (Strengths and Weaknesses) and external (Opportunities and Threats) factors faced by an organization and these are merged to form the TWOS matrix that eventually formulates strategies by means of the combination of internal and external forces. Here, it is worth-mentioning that internal forces are the controllable while the external forces are the uncontrollable variables in an organization. Furthermore, the internal forces can be influenced by the organization itself, while the external forces cannot be influenced by the same. The other in line is the Porter's Generic Strategy. Porter's Generic Strategy Model is a framework that provides logical generic strategies that can be put into place in any form of business based on the parameters of market competition and market scope. As the inputs are given of these two parameters, a strategy is proposed based on these two that can be implemented, is logical, and practical. Implementation of strategies Another important factor to be considered is the formulation and implementation of the strategies involved. Here the point is that if it is to be known that how a company has formulated its plan and is the human capital coherent with it. Once the strategies have been formulated and proposed, there is an essential step prior to the implementation and i.e. the evaluation of strategies that have been proposed. Strategic Evaluation is also essential because it checks whether or not the proposed strategies are aligned with the organization's long term goals and objectives. It basically checks for the presence and evaluates the proposals for three variables that are: Suitability Acceptability Feasibility Suitability checks whether the proposal are suitable or not i.e. suitable to the organizational image, the strategic mission and vision of the organization, and of course suitable with the organizational goals and cultural values. Acceptability is all about the level of acceptance of the proposal in terms of the management, and all stakeholders accepting these proposals. The stakeholders mainly include, but are not limited to, employees, customers, suppliers, and investors. Similarly, Feasibility is more of a financial aspect that can aid the finance functions accept this project and have the resources for its implementation or not. This analysis of company performance relates to the objectivity principal. Companies can become larger in many ways. By offering existing products or services to new customers in new areas a company can attract more customers and add to its benefits. For example, expanding service areas to include other neighborhoods, cities, provinces or countries is a good strategy to increase the sales. A firm can include new ways of reaching these markets, via mail order or the Internet. There is considerable support available to help a firm if it wishes to export internationally. Another important aspect is having the right type of product and business Company and market research Talking about company performance researching the market base is also a good strategy. Search for items similar to those the firm wants to sell, and evaluate opportunities. Study the number of bidders and buyers, final prices, the number of competitors and the selling features of competitors promote. Higher sales value sometimes the best move for any business is to focus less on generating new customers and more on better meeting the needs of the ones they already have. The goal may be either to have existing clients purchase more frequently or to increase the size of each sale. This technique if practiced well by an organization brings in good result. The Case for Chevron Chevron has boosted its capital expenditure scheme in order to achieve a greater share of the world market. In doing so, it will expand its horizon and may look to produce something technically more efficient as fuel. If chevron succeeds then its stakeholders will enjoy the fruits of their sweet plant. The article states that chevron is moving 50% of its budget into construction which shows that in future it would be producing on a much larger scale and would achieve technical economies of scale associated with greater production and such vast R & D. The decision is based upon the previous experience which has led them to the installation of new plants and construction. The contrary firm has to curb its expenditure due to rising costs. Technically this firm is not able to achieve economies of scale and its cost are rising such that it is not able to meet the demand at the given costs so it has to reduce the expenditure and focus on other aspects rather than Capital construction and project development. Since chevron caters to the world it should consider exchange rates as whether it would facilitate its cause or the exchange rates might deteriorate its standings. The problems associated would be that as the size increases the taxation affects and so does the labor conflict. It would necessary to have ample human resources in order to cope up with the increased equipment. Projects chosen must be certified by the local authorities and in future they may not be the cause of any external cost affecting the economy. Conclusion These were some of the ways to critically analyze organizational performance and yet there are many more internal growth of an organization is also an important context which caters to employee management techniques but I chose external assessment for both critical and straightforward approaches for organizational performance measurement. Bibliography 1. Angelo Kinicki, Robert Kreitner (2004) Organizational Behavior McGraw hill 2. David J Ketchen, Donald D Bergh (2006) Research Methodology in Strategy and Management, Volume 3 (Research Methodology in Strategy and Management) JAI Press; 3. Goldschmid, Harvey J., H. Michael Mann, and J. Fred Weston, eds., 1974, Industrial Concentration: The New Learning, Boston, MA: Little, Brown and Company. 4. Hill, T. and Westbrook, R. (1997) SWOT analysis: it's time for a product recall. Long Range Planning. 30(1): 46-52. 5. Holmstrom, Bengt and Steven N. Kaplan, 2001, "Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s," Journal of Economic Perspectives, 15 (No. 2, Spring), 121-144. 6. John W. Creswell (2002) Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, Sage Publications, Inc 7. Khurana, Rakesh. (2002b) Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs. Princeton University Press. 8. Loughran, Tim and Anand M. Vijh, 1997, "Do Long-Term Shareholders Benefit from Capital Acquisitions" Journal of Finance, 52 (No. 5, December), 1765-1790. 9. Mintzberg, H. (1990) The design school: Reconsidering the basic premise of strategic management. Strategic Management Journal. 11: 171-95. 10. Ward, Ralph D (2003) Saving the corporate board: why boards fail and how to fix them. Hoboken, N.J: J. Wiley. Read More