Explaining Management Using Classical and Other Management Theories - Case Study Example

Running Head: BUSINESS MANAGEMENT PRACTICE Business Management Practice in Public and Private sectors Name Institution Date Explaining Management Using Classical Management Theory Classical management theories are based on autocratic leadership where manager are the decision makers. According to these theories, objectives and set goals in any organization cannot be achieved without controlling and guiding the workforce. To develop an organizational culture, the managers determine what is right or is to be done and command movers from top to bottom where they are executed. The idea behind this is that workers are some form of machines that must be controlled if efficiency and productivity are to be achieved successfully. This has been done mainly in the public sector where those at the top make decisions without necessarily involving those in the lower positions such as social workers. The managers are presumed to have all the require skills and knowledge to perform various tasks aimed at achieving the highest mark of productivity (Von Hippel, 2005). Classical theories divide the management structure into three management levels which include, top management, middle management and supervisors. The top management is basically involved with organization and controlling. It is at this level that long-term strategic plans aimed at achieving organizational objectives are set. the middle management is involved with controlling any activity being undertaken by the supervisors. Formulation of policies and plans at the department level is done by this group of managers. The supervisors see to it that commands are executed. They take commands from the management and are in charge of every day to day activity. All these categories of people are important if the business has to realize its full potential as indicated by the aims and objectives. According to Taylor’s management theory, the organizations of a company are achieved through division of labor where each individual is assigned a task in accordance with their skills, knowledge and capability (Taylor & Francis, 2009). The tasks assigned are repetitive such that individuals become very efficient in conducting these tasks. Organizational goals and objectives are achieved when these tasks are executed effectively. A complex task is divided into simpler tasks that are easily executed. Due to this, workers are not required to have complex skills thus lowering the operation cost bearing in mind that employing a more educated person would mean a higher pay. In addition, this would speed up activities thus increasing productivity which is a core objective in business. Through the control, an organizational culture is developed. Fayol on the other hand views management as a controlling, organizing and planning process. The managers organize and plan activities to be carried out. They exercise control on employees to ensure that they conduct their duties as expected. In a changing business environment, organizing and controlling is not all that matters. Team work has been recognized to be of great value and managers must have the necessary leadership skills to keep the business moving ahead. The experiences and interests of all stakeholders in an organization be it public or private determine its organizational culture. The members of an organization form a certain perception of the organization and expect anyone who joins the organization later to behave or respond to issues in a certain manner. According to Lewis (1998), organizational culture includes norms, feelings, values, rules and organizational structure. The rules and norms influence people’s behavior to ensure that they act in a given manner aimed at achieving organizational objectives. For instance, the public hospitals have different levels of management. Casual workers are accountable to their supervisors who delegates duties and inspect the performance. Failure to act as expected results to loss of one’s position. Every supervisor then reports to middle managers who also see to it that supervisors conduct themselves as expected. Each employee has some defined duties that he or she must accomplish. The public sector operates within an environment where market is of major concern and workers are treated as machines that need to be controlled to act in a given manner. In the private sector, individuals are indoctrinated to align their interests with the objectives of the company. The culture in this sector includes intellectual honest which drives the managers to making right and accurate decisions. This sector emphasizes on quality rather than quantity of employees and requires employees to give their best for objectives to be met. Governance is through an inclusive approach where every stakeholder is important and their ideas relevant in decision making (Von Hippel, 2005). The culture in private sector is to a greater extent determined by a combination of all stakeholders unlike in private sector where rules, norms and values are set from the management level. Employees must have a positive attitude if the objectives have to be met. This is achieved by taking into consideration their own interests and development goals. In the private sector, this is achieved through brainstorming and allowing them to be part of the decision making process. In both private and private sector, motivation is a key to gaining the support of employees. This is achieved through rewarding, training and timely pay. Knowledge shairing has become a very important action for an organization to realize effective management which is relevant to their culture. Disagreement on the basic mission always affects the organization negatively such as is the case of World Bank. Motivation team-work and empowerment go a long way in influence the attitude of the workforce towards the job they have been offered. This is achieved through effective team management where everyone is considered as important in attaining organizational goals and objectives. In the public sector, managers align the activities of the organization with customer needs and not necessarily their demands. The management only need to know the condition of the citizen and then determine the needs (McKevitt & Lawton, 2001). However, in the private sector, the greatest concern is consumer satisfaction. Norms and values are therefore aligned with these demands. The norms in public sector are in accord with government’s agenda, differential information and the professional code of ethics. If these are followed to the mark, then the objectives of the organization are met. Corporate social responsibility Corporate social responsibility (CSR) refers to the relationship existing between the corporation and all its stakeholders including the community, employees, their customers, competitors, suppliers, the investors and the government. It’s usually concerned with maintenance and creation of employment, the financial performance, human rights, environmental responsibility, employees’ relations and community outreach investment. Business ethics is the employment of certain codes of behavior that govern the morals and principles used in solving the problems arising in the business enterprise. The growing interest in upholding CSR and business ethics in the private and public sectors have contributed greatly in promotion of human rights in corporations and labor market when dealing with the environmental and social practices. Though the private sector mainly focuses on profit maximization they have lately embraced community based activities since they are inseparable to their success (Maylor, 2005). Corporations are engaging in community based activities to gain customer loyalty and familiarize the public to the services and products they offer. A good example is the shell Foundations in South Africa. They built an Early Learning Centre that focus on educating the children in the community as well as developing new skills for adults. It has been observed that majority of the corporations focus on establishing adult education facilities and HIV and AIDS programs as their CSR projects. Businesses embrace CSR and business ethics since they determine the failure or success of the business in the current business market. CSR aids in decision making and forecasting the business performance. It also determines the number and kind of investors in an organization since the investors base their decision to invest on the financial, environment and social performance criteria. A research carried out on the United Nations organization shows that they embrace CSR and business ethics so that they can maximize their expected positive social outcomes since they mostly deal with business activities that directly affect the community. Another company that embraces CSR practice is the Vietnamese garment and footwear industries since it has greatly contributed in increasing their national competitiveness. The company proper utilization of the information given in trainings offered by the Vietnamese Chamber of Commerce and Industries on CSR have enabled them to compete effectively with the foreign investors who are well equipped with expertise knowledge in production and technological development. The businesses in the developing countries are facing a great challenge of coping with the high competition by the foreign investors. This is because for a long period of time these companies have been facing a difficulty in balancing between strategic planning and putting the stakeholders into consideration. The private sector mainly focused on profit maximization since they believed that the public sector was responsible of the environmental and social issues affecting the society. They have currently incorporated CSR and business ethics policies so that they can be secured in the market. A good example is the coca-Cola Company which has reduced the water use ratio through the implementation of the waste water reuse strategy. In Austria, they have opened a recycling plant which have added value to the society and stakeholders by bringing forth the issue of “Going Green”. Majority of the countries have observed that corruption on business enterprises and other sectors of the economy have greatly contributed in undermining equitable development, economic growth and political stability. They have therefore embarked on promoting CSR and business ethics in the public sectors which is greatly affected. It is also expected that the next generation should carry out the hemispheric anti-corruption initiative by encouraging employment of transparent, clear and rules-based business ethical activities in the civil society and the private sector. Most of the private sector companies have considered CSR and business ethics as the steering forces to globalization. The emergence of a wide global market has provoked the exporters and the multinational companies to deal with a variety of vices in the businesses so that they have a large competitive advantage over their competitors. Bribery is one vice that have for a long period shadowed businesses and has to be dealt with as a means of reducing the risks hindering the company from globalization (McKevitt & Lawton, 2001). Private companies have also considered decentralization of management responsibility by reducing control and supervision in organizations. A good example is the IBM Company which has reduced supervision by the management by 50% and has embarked on controlling the behavior of the employees, understanding their responsibilities to the society and upholding the human rights. Both the private and public companies have reduced the moral scandals and disasters due to use codes of ethics and interest in CSR. This has helped in reducing the mistakes in judgment in many organizations which has a positive impact in profit maximization and company development. Implementation of environmental responsibility has led to tremendous development of chemical industries. Majority of these Companies ignored human welfare due to lack value-based program to assist in reducing the rate of environmental pollution by these industries. A good example is the Exxon Valdez disaster that caused catastrophic oil pollution at the coast of Alaska costing the country the lives many water organisms. This led to the Valdez principles which have been implemented in an attempt to protect the environment from chemical pollution. The public sectors industries have also worked on reduction of environmental pollution through establishment of recycling services and use of chemicals that are less harmful to human health. In conclusion, though the public and private sectors apply different management structures, their role is to ensure that the goals and objectives of the organization are adequately met. Private sectors concentrate more on customer demands and align their culture with this. On the other hand, public sectors rely on public concerns and determine the need of their citizens from these concerns. Any action undertaken is hence directed to meeting these needs thus meeting their objectives. Corporate social responsibility cannot be ignored in the quest for success. Most of the organizations have given attention to CRS and business ethics so that they can gain competitive advantage over their competitors. Majority of the corporations in the developing and developed countries use these policies to gain popularity thus paving way for future development. Although community based activities are associated with the public sector, the private sectors have incorporated it in their management strategies so that they can attract a large market which can enable them to conquer the foreign investors. References Von Hippel, E. (2005). Democratizing Innovation. Cambridge, MA, MIT Press. McKevitt, D. and Lawton, A. (2001). Public sector management: theory, critique and practice. London: SAGE publications Ltd. Maylor, H. (2005) Project Management, 3rd Edition. New York: Pearson Education. Taylor & Francis (2009), Behavior Management, Journal of Organizational Behavior Management, 2(12), 34-67 Read More