Significance of Understanding of Motivation and Its Impact on Organizational Performance - Essay Example

A Management Essay Table of Contents Table of Contents 2 Introduction 3 Significance of understanding of motivation and its impact on organizational performance 3 Manner of change in Organizational Environments in 21st Century 4 Key Mechanisms for Improvement of Innovation and Creativity in Organizations 6 Evaluation of Improvement in Creativity and Innovation 9 Conclusion 10 Bibliography 11 Introduction The current paper would reflect upon key parameters, where it would firstly try to understand the importance of generating motivation in an organization and the impact of motivational factors on business performance. It would also throw light on different types of environmental changes that have occurred in organizations with the advent of 21st century. Finally, the paper would attempt to elaborate on the key elements required to foster innovation and creativity by considering potential organizational examples in order to evaluate success generated through such endeavours. Significance of understanding of motivation and its impact on organizational performance It is observed that in the present day workplace, the need for motivating employees is not optimally recognised, which adversely affects their productivity and performance. It is required for the business managers to understand and generate due importance towards the element of motivation, such that an individual or group members can be motivated to use their optimal capacity in generating needed organizational growth. The responsibility of the organizational manager is to help identify the factors that would contribute in motivating the workers both individually and in groups so as to meet the desired objectives (U.S, 2013). Organizational managers are required to identify motivational factors that not only help in enhancing organizational productivity, but also in creating a positive and encouraging work environment. In order to motivate the employees in a potential manner, the manager is required to effectively understand their needs and wants (Campbell (III.), 2007). Knowledge gained from such observations would help to design the financial and non-financial motivators. The organizational managers are required to aptly understand the need to rightly reward and recognise potential of the people, which would in turn enhance mindset of the members for adding value to the organization (Bessell, et al., 2012). In a study based on the telecommunication and banking industry of Pakistan and other organizations based in Africa, the impact of motivational factors like, recognizing the capabilities and potentials of employees and empowering them in taking key organizational decisions, on the organisational performances are studied. A model is described relating to analysis of the above relationship, which is presented as follows. (Manzoor, 2012) From the study conducted related to the above organizations, it is observed that a positive relationship is established between the parameters of employee motivation and organizational performance. A highly motivated workforce is observed to work in a committed and productive fashion in the organization, which leads to growth in business profits, thereby augmenting efficiency and performance levels therein. On the contrary, the practice of restraining employees from taking key organizational decisions tends to affect their will to excel and hence, affects performance of the organization (Manzoor, 2012). Motivating employees by encouraging them to actively participate in key decision making functions contributes towards helping the employees explore their optimal potentials for achieving organizational objectives. Furthermore, the activity of empowering employees also enhances the level of accountability and responsibility involved, thereby generating organizational growth and business productivity (Liu, 2008). Generation of employee empowerment to take key organizational decisions improves the level of employee satisfaction in decisions taken and implemented by them, which can enhance organizational growth. Also, motivation generated through employee empowerment is observed to offer greater customer satisfaction, as decisions are taken readily to generate effective solutions (Dobre, 2013). Manner of change in Organizational Environments in 21st Century The business organizations operating in the 21st century are reflecting relentless changes in the pattern of the existing organizational environment. On the macro front, it is observed that dynamism related to continuous influx in consumer demand is compelling organizations to largely differentiate in the mode of producing product and services in order to counter potential competition (DiMaggio, 2001). The existence of shorter life span of commodities produced is demanding organizations to operate in a more responsible and proactive manner for sustaining its position in the consumer market. Moreover, with the advent of globalization, different stakeholders to a business spread worldwide happen to impact on business operations in an interconnected fashion (Beer, 2002). Thus, a change in the level of competition and consumer demand in one marketplace tends to spontaneously affect the same in other marketplaces. As a result, business organizations must formulate strategic plans and policies to function effectively. On the internal or micro front, it is observed that organizational employees in the 21st century strive for individual career and financial growth and hence, focus on enhancing their levels of expertise and competency involved so as to attain more lucrative work positions. Consequently, a stable and durable work culture is continuously changing to reflect flexibility and dynamism, which in turn impose considerable challenge on the organizational managers to facilitate sustenance of the productive and talented workforce (Sarlak, 2010). The like changes in the organizational environment are thus forcing organizations to focus on innovating the existing business and operational processes so that the same would contribute in augmenting the level of competitive advantage experienced. Along with innovation and creativity, the modern organizations are also found to operate based on the fulfilment of set objectives, purposes and tasks (Sarlak, 2010b). As a consequence, organizational strategies and directions are built on grounds of set purposes, which render implementation of the same more rationalistic in nature. Similarly, changes in the organizational environment also calls for growth of democratic and participative leadership, such that the leaders operate based on collective opinion of the internal and external stakeholders (Hotes, 2011). The above practices, thus, contribute in reducing the level of uncertainty and also of restraints generated from stakeholders in bringing about needed organizational changes so as to counter potential competition. Also, business organizations of the 21st century are observed to make their way to uncharted territories in order to try their hands on new possibilities. This helps in market development functions and develops the level of competitive advantage. Finally, these organizations are concentrating upon learning to effectively empathize with the changing needs and wants of customers. Gaining an effective understanding of the perceptual and behavioural changes in customers contribute in enhancing ability of the organizations to innovate the right kind of product or service as it would enhance the level of customer satisfaction (Yeramyan, 2011). Key Mechanisms for Improvement of Innovation and Creativity in Organizations One of the significant mechanisms incorporated by business organizations in order to foster an environment of innovation and creativity is that of encouraging and promoting innovation in every organisational activity. In such organizations, innovation acts as the true character that is not restricted or limited to research and development based activities solely. In such organizations, the organizational managers aim to link the tacit and explicit knowledge contents for enhancing the existing organizational processes and activities, thereby helping to develop their strategic competence base (McMaster, 2007). Organizations such as, Hewlett-Packard, operate on the basis of a philosophy, where the elements related to innovation are integrated with the organizational and social needs and objectives, such that innovation and creativity pursued through the employment of organizational resources are able to improve the level of strategic and social competence (Zell, 2007). An enhanced model for creativity and innovation is presented herewith that throws light on the manner in which financial resources gained from the customers through the fulfilment of mainstream activities contribute towards augmenting the level of innovative competence of an organization. (Lawson & Samson, 2001) A growth in the level of complexity in the external business environment poses a challenge to business organizations in rightly planning for the development of innovative and creative pursuits in different business sectors. The above model of innovation reflects on the existence of innovation capability that contributes in identification of innovation opportunities, which in turn help in forming new products and processes that are able to generate potential benefits to the different business stakeholders (Lawson & Samson, 2001). New products and processes developed are generated in the mainstream in order to contribute in growth of the revenue stream. To quote an example in this context, the case of Dell Computers can be considered that focuses on the integration of mainstream management strategies with innovation capabilities in order to sustain its long-term stand in the competitive marketplace. The above integration has contributed in the development of potentially affordable and high quality computer products and peripherals, which helps to meet needs of the customers (Owens, 2011). The case of Cisco Systems also calls for effective evaluation as the integration generated between innovation capability and mainstream business activities has helped the company to gain considerable market leadership, surpassing Microsoft. Cisco operates by way of incorporating innovation as a core business and organizational element, where the same is undertaken to meet changing needs of the global consumer base. The fostering and development of innovation and creativity is done by Cisco by clearly differentiating between the elements of newstream and that of mainstream based business activities (West & Sacramento, 2006). This practice has helped the company in identifying the level of core competence such that it tends to synchronize the organizational resources for development of the research and development arm. On the other hand, the company through the use of its assets and stock base tends to procure emerging technologies and potential companies based on the process of acquisition and development of business partnerships. Through the above activity, the organization aims to enhance its innovative competence and capability so as to help in the sustenance of its market leadership position. Furthermore, innovative capabilities relating to Cisco is observed in the manner in which it focuses on the development of outsourcing activities, where the various equipments and technological parts are obtained from different supply chain firms (OKeeffe, 2013). The company management is also considered to be the pioneer in encouraging the growth of online collaboration with its different stakeholders like, customers and suppliers, in order to facilitate greater amount of activities related to knowledge transfer. Inputs gained from the different stakeholders are incorporated to develop new products and technologies for the purpose of meeting the changing consumer needs. The above activity also supports business process innovation such that the orders generated by customers are directly channelized to the suppliers without requiring interference of the company and the subsidiaries (Lee, 2000). As a result, innovation generated in the above aspect contributes in not only emergence of the virtual organization, but also in minimization of existing business costs. Innovation developed on the above accord helps to generate quality products for the different consumers at an affordable price range (Mitchell & Spencer, 2012). Another case for the study of mechanisms for developing innovation and creativity relates to Apple Inc. It is observed that the management body of Apple Inc. has focused on the development of a creativity circle such that the same can help in designing a new organizational structure for promoting innovation and creativity therein. The development of the creative circle works upon identification and promotion of such key skills and abilities that enhance the organisation’s technological competence. Similarly, the business organization also recognises such roles that would assist in employing creativity in order to design new products and services. Other key elements relate to the development of creativity maps that helps in identification of innovation and creativity opportunities as well as allocates resources and competencies to fulfil such objectives. Conducting innovation audit from time to time is also considered as an ideal process to understand efficacy of the innovation pursued in generating the needed value addition both at the individual and organizational level (Nussbaum, 2013). A case relating to a Finnish Telecommunication Company is analysed related to the parameter of innovation, where innovation was linked to expertise and capability at the individual level, as opposed to gaining a collective expertise and thought process. Changes brought about in the organization relate to the requirement of developing collective creativity, where the organizational managers were inclined towards evaluating perceptions of the employees in association with innovation and had incorporated motivational tools to encourage employees to incorporate and develop needed creativity (Parjanen, 2012). Similarly, the management also concentrated on the development of different sub-cultures so as to generate the required organizational creativity in a unified fashion. The above process had contributed in creation of a work environment, which supports the act of fostering innovation and creativity (Ministry of Education, 2010). The same is reflected in the following diagram. (Parjanen, 2012) Evaluation of Improvement in Creativity and Innovation The evaluation of successful innovation and creativity relating to Cisco and Apple Inc. can be done based on analysis of growth observed in revenue and profitability as well as enhancement of the company’s stock position in a particular period of time. It is observed that along the period from 1995 to 2000, the annual average growth rate of revenue amounted to 55 percent. Furthermore, evaluation of the market value of individual employees in Cisco during the 2001 period amounted to $3.4 million, which was higher than the general market value of employees recorded during that period amounting to $0.8 million. In addition to that, market-to-book ratio of the stocks for Cisco during 2001 was 3.9 times as compared to the industry average of 3.6 times. The above parameters, therefore, significantly reflect on the impact of creativity and innovation in generating success for the organization (Lawson & Samson, 2001). Relating to the case of Apple Inc., evaluation of the success of innovation and creativity pursued is apparent through the growth in revenue by approximately 450 percent in a span of eight years, ranging from 2000 to 2008. Hence, although the company recorded around $8 billion as revenue during 2000, the same reached a figure of $37.5 billion for the 2008 period. On the other hand, net profit of Apple Inc. for the period of 2000 amounted to $800 million, which had increased to a record figure of $6 billion during 2008. In terms of percentage, the net profit tended to attain a hike of around 1700 percent in a span of 10 years. The above data sets indicate the impact of innovation and creativity in generating organizational success (Al-Rubaie, n.d.). Conclusion The paper conducts research associated with different issues, where it tends to understand the need to generate motivation and the role of motivational factors while influencing and enhancing capabilities, skills and productivity of the labour force involved. Furthermore, the current paper also evaluates the changes that had taken place in the organizational environment, after advent of the 21st Century. 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