Analysis of Management Practices - Literature review Example

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Analysis of Management Practices

As pointed out by Laloux (2015), various organisations in attempts to redefine their performance and productivity, have already restructured their management systems and also employed new management practices. Some of the newly employed techniques include; Human Capital Management, Customer Relations Management, and Agile project management. If properly implemented, companies hope to manage its workforce efficiently, manage projects, improve customer relations and also rip maximum benefits.

Human Capital Management

The labour force in an organisation is its most valued asset. It is through people that there is the invention of new cost reduction strategies, delivery of quality services and the establishment of a beneficial customer-business relationship. Most of the existing organisations attribute the improved success to their staff regardless of the resources employed during production. As highlighted by Lombardi & Laurano (2013), the trend in today’s economy makes it hard for an organisation to determine what to expect in future. As a result, institutions are pushed into employing strategies that will improve their operations. Human Capital Management does not entail rebranding or changing names when an agency fails to perform, but as defined by Kucharcíková, Tokarcíková, & Blašková (2014).

HCM is concerned with the strategic management of an organisation’s workforce whose agenda is to meet organisational goals. It assists in the efficient achievement of corporate objectives by using human capital. HCM improves an organisation’s output by integrating strategies that influence their performance. In its application, HCM is applied when managing the talents of employees (developing and nurturing). It also assists in the workforce deployment-personnel are deployed to departments that are in line with their area of expertise. One can, therefore, note its significant role in improving the employees’ effectiveness whereby they will be able to contribute positively towards the system thus maximising productivity.

Challenges

Human Capital Management can be considered not only as an opportunity but also a challenge to the organisation. It is challenging to identify reliable information to work with and effectively evaluate input of people while maximising on it. As much as a motivated workforce can translate to positive outcomes, it is hard for the managers to realise it practically. Without proper metrics, it is almost impossible to gauge how an organisation needs to invest in training and management of its staff. The management needs to calculate the input of the labour force towards meeting their set objectives. Similarly, institutions cannot effectively manage human capital without appropriately measuring techniques put in place. It is, therefore, essential for the organisation to identify suitable strategies to use when gauging the potential of their workforce.

Customer Relation Management

With customer relationship at the centre of any business in progress, the management can choose CRM strategy as the best alternative for handling such issues (Papachristos, 2016). The success of a business depends on the promptness and innovative strategies managers adopt to meet the customer’s needs since good results are connected to a good business-customer relation. With the help of CRM, the producer gets to learn about the client's behaviour (Mohammed & Rashid, 2014). After all, most organisations struggle to satisfy the customer and make them comfortable. CRM can be viewed as a strategy for piecing together vital customer information, market trends, and the responses. As a new strategy in e-commerce, CRM is helpful in the marketing of businesses, notably through the internet. CRM eases the management of databases for companies and at the same time customers save time when shopping for goods from their preferred stores. It integrates processes, involved functions and the external factors (network, location) to serve the targeted clients and at the same time increasing a business’ profit.

Challenges

However, CRM like any strategy does have challenges that can hinder its success. The use of technology and customer experience to improve a business can significantly affect the application of CRM if the obtained information is not well utilised. The correct interpretation of the collected information is critical in meeting the client’s needs. Additionally, when implementing CRM as a strategy, corporates needs to ascertain that their tools are efficient, and it is not all about technology. It is important to acknowledge that this is a long-term project and needs constant monitoring and maintenance for the customer to realise the maximum benefits and also for securing the business’ future (Kubi & Doku, 2010).

Agile Project Management

Projects have important roles to play with regards to the regularly experienced changes in the companies. It is more of a challenge for corporate managers to keep tabs or provide a supervisory role on the ongoing projects. Views and ideas concerning a project are assessed and summarised in portfolios. From this, the team concerned gets to decide which projects to focus on and which ones to be shelved. The strategy used in decision making should be able to handle and appropriately note the forthcoming information and ideas on the project. As a result, the manager will have a clear picture of what consequences their decisions will have on the project (Schwaber, 2004. In their quest for better performance and continuous delivery of products, organisations tend to go for agile project management as a preferred method for decision making and project management. This type of project management is tasked with the development of software that will increase cooperation and the efficiency of stakeholders. It is among the most interactive and flexible approaches to project management. It is implemented by institutions that intend to develop their plans rapidly.

Challenges

At times, this approach of project management can be tricky to apply especially in large scale project management since its design is well suited for medium and small projects. It can result to the sub-division responsibilities to various groups. It can present a challenge for the management team since these groups will need supervisors thus raising concerns on the division of authority. As outlined by Schwaber (2004), it can be hard initiating a project under this approach due to the setup and numerous procedures required. Additionally, using this system can be difficult when constant changes are applied during the phases of the project. This can be witnessed when trying to gauge and value the project’s progress. It is because there are no set guidelines that determine the progress but its rather assessed by comparing it to the past or the future.

MANAGEMENT PRACTICES

Human Capital Management

In modern companies, it is observed that it is a trend to have the organizational structure changed once emerging issues as well as opportunities are identified. In response to competition as well as increased customer demands for personalized products and services, it is the duty of the organizations at hand to ensure that their operations are not only in line with organizational performance goals, but also sustainable within the industry they operate in. To guarantee a reliable and operational approach to these contemporary needs, human capital management is considered an inevitable concept to ensure reliable and sustainable business performance.

To modern organizations, external factors are uncontrollable especially in the sector of promoting new products and services. As a result of the need to develop a robust business model and sustainability within the business, organizations are required to develop employees through training and preparation of emerging issues. As a result of increasing competition amongst businesses, employees are trained not only on the execution part, but also in the ethical aspect of performance. Through ethics, employees within an organization are expected to meet a certain minimum qualification in terms of how they serve clients, how they handle workplace conflicts, ways of improving their output, management of time, and showing high level of commitment in promoting organizational vision and working towards organizational excellence.

Training and development has been part of human capital management in that it takes into account the potential worth of an employee. By training and development, skills are developed at a cost that the organization must benefit from. Therefore, while organizations aim at ensuring that their employees are up to speed with industry and sector demands, the organization must ensure a reliable approach to retaining employees. Trained and developed employees are considered a capital for the organization in that they execute the functional aspect of the duties. To the organization, a well-structured employee program ensure that each employee is trained to perfect their role within the organization while at the same time ensuring the compensation of the employee is sustainable and competitive enough to prevent competing organizations from poaching employees (Scott‐Ladd, & Chan, 2004).

On ethics and compliance with best practice, organizations use the human capital management concept to ensure that their employees are performing in accordance to the best industry standards. The merit of this approach is to ensure that employees support the business model of the organization while at the same time avoiding corporate litigations from unethical approaches to work execution (Bontis, & Fitz-Enz, 2002). To the organization, human capital management ensures that compliance is not only achieved through policy statements, but also through developments of the best working practices that coincide with the mission, vision, and goals of the institution at hand (Kruppke, Otto, & Gontard, 2006). Additionally, due to unethical practices within the business environment and historical outcomes of these unethical practices, organizations seek to ensure that costs associated with legal proceedings from unethical practices are avoided at all times. Incurrence of these costs is detrimental to the progress of the organization given fines can be associated with the legal proceedings for addressing the underlying facts of the unethical practices (Kruppke, Otto, & Gontard, 2006).

In terms of industry performance, organizations couple human capital management with customer relations management. The role of human capital is to carry out the organizational activities aimed at promoting the business model of the organization. On the other hand, the role of human capital management is to ensure that internal activities are in line with the market demands. Relating to human capital management, it is the duty of an organization to ensure that it relates well with its target market. Customer relations management sustains the business focus of a company. Through the identifying different cohorts of customers, information systems are established and deployed within the organization to sustain a communication platform for offering both support, communicating new products and services, addressing complaints, offering after service support, and managing support systems for assisted and customer self-service (Baron, & Armstrong, 2007).

Customer Relations Management

The merit of customer relations management within the organization is associated with brand recognition and loyalty development. Brand recognition is majorly associated with activities that lead to the acceptance of products and services while loyalty development is related with customers’ endorsement of the products. Customer endorsement of products and services drives customer loyalty. Nonetheless, besides promotion approaches, customer loyalty through customer relations management is achieved by considering loyalty programs that enhance customer inclusion to the business model. For instance, when considering the amount of products and services purchased, organizations aim at ensuring that they can drive a higher record of sales (Baron, & Armstrong, 2007).

Loyalty programs are applied to reward return clients while also promoting repeat purchases with the same business. Loyalty programs include reward points for all purchases as well as cash discounts on certain products. In addition, while loyalty programs establish a business relationship between entities, they are specifically created to reflect the benefits of increased customer participation in developing the business model and sustaining its business ambitions. Increased sales and repeat purchases are measures of establishing whether or not, an organization’s customer relations management strategy works. For customer relations management to work, and organization must be able to showcase how and by what extend the strategy works. On the other hand, organizations with a poor customer relations management suffer from two levels of challenges.

Firstly, an organization without a proper outline of its business priorities suffer from financial problems associated with poor focus. Meeting the objectives and sustaining business goals is particularly problematic for poor customer focus. As a result, organizations that do not establish a proper customer relations management incur losses in terms of underperformance as compared to industry competitors with a more focused approach (Romano, 2000). On the other hand, organizations with a poor customer relations management approach incur losses in terms of high customer turnover. To the organization, promotional strategies may fail to contain the challenges of appealing to every customer. Due to lack of focused approach, it is also observed that these organizations suffer financial challenges of reacting to customer trends. When customers identify a new product within the market, they react in terms of appeal, price, quality, and availability. Competing products and services influence limited focus of customers on one product and widen the options available for the customers (Silvain, & Pluche, 2007). As a result, organizations that do not proactively establish a sustainable promotional approach, theirs is the duty of repairing damage which most customers do not find appealing.

Secondly, due to increased options for customers, poor focus results to increased competitors: power. Competitors with too much power due to established sustainable market share prevent others from entry. However, for already existing businesses with poor focus, their ability to launch new products and services is limited to the dynamics of the market. With powerful organizations taking a substantial market share, unfocused business models lack the traction to guarantee sustainable market share for new products. Therefore, part of customer relations management is to ensure that organizations have a chance in planning and launching new products that existing alternatives may not prevent from achieving sustainable market share (Silvain, & Pluche, 2007).

Internal operations are related to internal tasks and the mission of the organization at hand. Employees and their duties serve a specific role of ensuring that costs are managed properly by establishing resource management programs. However, the entirety of organizational operations relies on time management and interaction of resources to produce a sustainable business model (Bhatt, 2001).

Agile Project Management

Agile Project management is a concept associated with increasing internal activities as well as differing corporate goals. To serve the organization, agile project management ensures that minimal resource misallocation is achieved while boosting output from specific pro-business operations. To limit wastage of resources, it is observed that agile project management promotes lean production limiting costs of inventory management (Schwaber, 2004). Contemporary managers are given the task of ensuring that their organizations meet specific performance goals. In addition, market and industry competition exert pressure on the management to deliver results.

Due to the advantages of agile project management, it is observed that industry wide changes in the approach to production have resulted to the closure of companies that cannot keep up. In addition, due to the lack of deployment plans, development of management frameworks continues to fail many organizations. However, in order to address the problem, agile project management is considered handy in delivering a structured approach to management. In order to increase output, organizations have considered lowering costs an option and also a working strategy. However, due to lowered costs, organizations are able to reinvest the preserved funds in diversifying their businesses. Nonetheless, there is continued lack of disposable resources to enable the organizations the realization of their managerial duties. In order to manage the available resources, management considered agile project management, firstly for its resource-saving ability.

As a resource-saving strategy, agile project management ensures that projects limit their spending and also delivered the best value of their missions. In order to achieve high returns in production, agile project management proposes that management should consider lowering costs or production and increase their output. To lower costs, organizations have the options of automating their production lines, they can change target consumers, and they can acquire cash discounts from suppliers if they purchased materials in bulk. To increase production is agile project management relates to lean production where timely production of products goes hand in hand with demand. Concepts such as order-to-make are associated with lean production which is one among the strategies of agile project management. The concept indicates to management that they can preserve resources by making products that coincide with demand. Hence, this approach keeps a low inventory and cuts down on inventory management costs.

Utilization of resources is an advantageous outcome of using agile project management. In order to ensure that management achieved their best returns of investment, their operations must be conducted within the best ethical standards and minimum costs of production. Through the production costs, available resources are used economically to return the highest value to the investment. Through time management, recycling of materials, tapping of natural energy, and proper use of communication channels to promote and sell the developed products reduces the costs of production to boost a company’s performance and competitive power which management thrives to achieve.

Conclusion

The combined effect of agile project management, human capital management, and customer relations management is the economic effect of reduced costs of production, increased customer loyalty & market share, and increased control of internal & external factors or production. To organizations, these management roles and strategies ensure that business activities lead to the highest returns on investment. Limiting of costs and increase of output are among the major goals of combining managerial concepts to deal with the unstable market trends such as customer behavior and competition. Since the market and industry movements are normally predictable but largely uncontrollable, management practices aim at influencing a platform where both the current issues and the future emerging trends can be viewed as both opportunities as well as challenged to drive an increasing organizational output/performance. As customer behaviors changes, there is also a need for proactive approach in the development of managerial departments. The management of costs and the increase of output measures the efficiency of management. As a result, management bodies must apply favorable concepts of management to create value for investors, to sustain production, and utilize resources properly.