Business Organization Management - Essay Example

Name Instructor Course Date Business Organization Management Introduction Achieving the ultimate goals of any business organization is determined by the overall management of the given organization. Management is defined as an act of coordinating the man power in an organization so as to achieve the desired objectives and goals using the available resources effectively and efficiently. The latter comprises of organizing, staffing, planning, controlling, leading and directing an organization for the purpose of accomplishing the ultimate goals (Nieuwenhuizen, Rossouw & Badenhorst 322). Theoretical overview of management defines it as the manipulation of man power of an enterprise to drive the success of the given organization. Historic development of early writing and double entry book keeping enabled management of organizations in early centuries. The Modern Portfolio Theory General ideas of how to manage a business organization are being drawn from the most reliable theories. In this report concerning the project work, I developed a keen interest in modern portfolio theory that was being developed by Harry Markowitz (Francis, Jack & Dongcheol 567). It was put forward in early 1970 basing on the strategic management that would have led to the growth and development of business enterprises for the purpose of generating a maximum ideal profit. The theory argues that an organization improvising growth strategies guarantees itself a high market share. The portfolio’s theory operates under the division technique in which an organization is independent from the market scale and the management is not determined by the variations in the market demand. Under this theory, an organization is expected to develop strategies that will enable it to coordinate the resources and the human efforts that are available in the organization. Evaluation of the strategies is done from time to time to determine the effectiveness of the method used in coming up with the strategies. A Business Organization Working under the Portfolio’s Theory A business organization working under this theory follows the strategy formation process. The management committee should evaluate the efforts and resources of the organization and compare them with that one of the close competitor. During this analysis, either the external and internal or the macro and micro environments are put into consideration. The managerial staff organizes a team that will decide on the long and short term objectives of the organization. Implementation plans are then laid down in achieving the business enterprise objectives. On the completion of the evaluation, the appropriate choice of the strategies is made basing on the feasibility, suitability and acceptability of the strategy (Francis, Jack & Dongcheol 288). The company outlines the competitive advantage on how the organization is supposed to produce its goods so as to out do the ones produced by the competitor. This enables the company to gain profits from the business because of the double marketing, a technique used in absorbing the competitor’s market and making it to be yours. The major task played by the management lies under the evaluation of the strategy. The management is expected to determine the suitability of the strategy. The strategy is evaluated basing on its rationality in addressing the mission, reflection of the organization’s capabilities and the economic sense relayed (Francis, Jack & Dongcheol 292). The analysis would base on the strength, opportunity, weakness and threat. Another factor under evaluation is the feasibity of the strategy. This one is concerned with the resources of the organization and their ability in implementing the strategy. The resources under consideration include the capital, man power, expertise and the market access. The break even analysis is one of the methods that are used in evaluating the feasibility of the strategy. The final factor under evaluation is the acceptability of the strategy. Under this factor, a great concern is raised on the expectation of the stakeholders. The risk in the process of profit making depends on the consequences and probability of failure. The evaluation tools normally include the stakeholder mapping and what-if analysis. The final process under the strategy management is the implementation process. The products and services that can satisfy the strategy may receive an investment and those that cannot, must be fully addressed basing on their shortcomings. The strategy implementation process involves forming an alliance with other firms so as to fill the legal or capability gaps, making an investment on internal development and finally, acquisition of the products or firms. However, the main elements of strategic implementation include organizing, employing management procedures and organizing (Francis, Jack & Dongcheol 295). Implementation of a strategy require organizational changes such as merging existing units, creation of new units and switching from geographical structure to the one dealing with functionality. Resourcing involves implementation of budget shifts and capital expenditure. Change management and alignment comprises of implementing as strategy with a sole intention of ripple crossing an organization. Efforts made in improvising the argument of the portfolio’s theory have resulted in big business failures. The reason behind this is that the theory relies so much on the perfection of a business management rather than the current trends in the business world. The theory relies so much on the oligopoly market which rarely exists in the world market. A Business Organization under Practical Conditions In real life circumstances, the business organization management is based on the team work. This are the managerial groups that are normally formed in an organization with the sole intention of coming up with ideas that can be profitable to the organization. More than two teams are being formed and topic of discussion is specified basing on the current trends and the challenges facing the business. The teams can come up with the ideas basing on the best understanding of the history of the organization. After the teams have analyzed their combined ideas, the managerial committee points out the best ideas that can be implemented by the organization (Rees & Christine 321). However, what are most important are the major objectives that are formulated prior to the teamwork. The generated ideas are being valued on the basis of their fitness in satisfying the business objectives as well as overcoming the challenges facing the business. The major ideology that any business works under is the fact of maintaining the normal running of the business but not entirely on the intension of making profits as discussed in the strategic management. However, normal business organization also improvises the use of strategy development technique. The strategies developed must be realistic and they are supposed to reflect on the current condition of the business enterprise. In the process of coming up with ideas, the teams develop their own strategies that align each business idea. These strategies are being developed under certain limitations which are realistic in real life situations. Analysis of the strategies is made after the outcome and if the strategies worked in the process of improvising ideas, they are documented in written form and necessary references can be made in near future for the purpose of formulation of ideas (Cole 321). In the general management of the organization, individuals with required skills and knowledge are appointed to executive position in the management system. The positions include the general manager and the departmental managers. The general manager plays the role of supervising activities of the business organization. He oversees the general performance of the company and points out the problems facing the business organization. Departmental managers work at departmental levels where individuals are assigned specific line of duty. They play the role of supervising those workers under the development and filing daily report of the department. The instance above applies to only big business organization. Medium and small business organizations do not have such complicated management systems and they tend to rely so much on the immediate market trends and short term strategies. Analysis of the strategies is not done by the small business organization and they tend to assume the whole procedure (Nieuwenhuizen, Rossouw & Badenhorst 329). Managerial and visionary leaders are required in the process of decision making. Incase the sole purpose of the business is to make profits, then strategic leaders can as well be involved in the process of decision making. Analysis of the market and availability of market gaps is what most businesses rely on when it comes to decision making and implementation process of ideas. Differences between Theoretical and Practical Business Organizations When analysis was made basing on the comparison of the two business management structures, there was a big difference between the two. However, the differences were based on the managerial overview of the strategy formulation process and the ultimate goals of each managerial structure. Apart from the differences realized, the two have common methods of handling strategies and the only difference in the formulation of strategies was that, the one for the practical management was more realistic as compared to the one under the portfolio’s modern theory (Cole 456). The practical business organization makes use of visionary, managerial and strategic leaders in their management. However, this was not applicable for the business organization which operates under the portfolio’s theory because it only made use of the strategic leaders in the management of the latter. The theoretical business appoints perfect managers who can drive the business towards getting profits. They are also assigned roles which a normal person cannot play at realistic conditions. The practical business organization tends to meet the normal market requirements. For example, practical businesses are flexible in a manner that they can fit in any market. The most existing markets in the world are the monopoly and the perfect competition markets (Blackwell 1996). On the other hand, theoretical businesses are rigid with the sole intention of outdoing the competitor so as to make extraordinary profits. They can, however, only exist in the oligopoly markets which can rarely be found around the globe. The conditions for the theoretical businesses cannot be met under normal life circumstances and they tend to deviate from reality. The latter assumes existence of only two business enterprises in the market and strategies implemented by one depends on the other. Another big difference between the two organizations was based on the managerial systems that each one of them employs. For the practical business organization, they make use of team work in the management of the business (Blackwell 1996). Decisions and strategies developed come from the group and not an individual. On the other hand, the theoretical business organization assumes the role of decision making and relies only on strategy development. The strategic leader is given the responsibility of coming up with effective strategies that can be implemented by the organization. However, this deviates from reality and there is no way a person can be expected to be perfect to an extent of driving the organization’s activities alone. Recommendation Basing on the above detailed discussion, my proposal is that any business idea must be implemented through realistic process. For those people who want to start their own business are supposed to observe the accepted protocol of business management rules and regulations. A penalty must be charged to those who cannot follow the rules and most prosperous business enterprises must get maximum support from the local authorities. In addition, individuals who are financially stable and have an intention of exercising the theoretical business behavior must be discouraged. Such individuals have an ill intention of exercising the monopoly or oligopoly powers over the others. This may end up eliminating potential business ventures from exploiting the market gaps and may lead to decline of the economic scale in the given country. Policies that are passed by the government concerning business development must be implemented to regulate the overexploitation of the country’s resources by the foreign bodies. For example, foreign countries may continuously import the man power from the country. The exporting country may end up having no man power and this may negatively impact on a country’s economic. Acceptable management models must be put in place to ensure proper management of the business organization. This will result into fruitful achievements of the ultimate goals of the company and the country at large. A company making use of the right management model will encounter fewer problems in utilizing the available resources and man power in achieving the desired goals as compared to the one which adopts a wrong model which may lead to closure of the business. For example, making use of the strategic management model in a perfect competitive market may lead to business failures due to the unbearable requirements needed in the implementation of the model. Conclusion The discussion above has reflected on the ideal and real businesses organization. It has also given more details concerning the management of each and the type of management model employed in each case. The strength and weakness of each business management have also been analyzed. Comparisons made between the two management systems show a big difference that lies between the ideal and real management. The discussion has gone further giving the benefits of choosing the real management systems as compared to the theoretical one explaining their respective applicability. In addition to what has been discussed, governments are expected to organize for the appropriate educational programs that will enable people to bring up young business people who can perfectly handle businesses in terms of the management. This will raise the economy of the respective countries and the world at large. The government should also form policies that will counter the existence of black markets in the economy. This will enable the normal running of the business without the deviation of the customers. Finally, countries around the globe must work together and tackle the common challenges facing them as a block. Work Cited Nieuwenhuizen, C, D Rossouw, and J A. Badenhorst. Business Management: A Contemporary Approach. Cape Town, South Africa: Juta, 2008. Print. Francis, Jack C, and Dongcheol Kim. Modern Portfolio Theory: Foundations, Analysis, and New Developments + Website. Hoboken, N.J: Wiley, 2013. Internet resource. Cole, G A. Strategic Management: Theory and Practice. London: Thomson Learning, 1997. Print. Blackwell, Willey. "Strategic Management Techniques: The Voice of the business ventures." Tulsa studies of women in the business world. 15.1 (1996): 41-50. Print. Rees, W D, and Christine Porter. Skills of Management. London: Cengage Learning, 2008. Print. Read More