Classical and Contemporary Management Theories, Current Trends in Customer Management Practices - Literature review Example

MANAGEMENT PRACTICES IN CUSTOMER SERVICE by Student’s Name Code + Course Name Professor’s Name University Name City, State Date Table of Contents Table of Contents 2 Introduction 3 Classical Management Theory 3 Contemporary Management Theory 4 A Compromise Approach 5 The Current Trends in Customer Management Practices 5 Conclusion 8 References 10 Introduction Classical Management Theory The classical theories in management were developed as early as during the age of industrial revolution and were majorly skewed towards the improvement of productivity and efficiency rather than the prevalent differences exhibited by the workers (Jelonek, 2015). In principle, the author observes that whereas classical management theories are more inclined towards the maximization of consumer benefits, they are, at the same time wired to deliver value to stakeholders in a manner that is fair and consistent. According to Burnett (2008), this approach to management is favored in that it is widely pegged on hierarchy of organizational structure which outlines the objectives and responsibilities of managers at each executive level. In addition, he notes that the classical management approach is widely seen to favor division of labor which in turn not only reduces expenses but optimizes individual employee performance. Whereas such classical management models remain overly relevant, modern researchers argue that approaches that are more progressive will, oftentimes, come in handy where managers take note of the useful insights coming from employees and consequently make suggestions for a review of the existing systems. Further, this approach to management has also been known to guarantee effective making of critical decisions especially at the departmental levels (Spicuzza, 2012). On the other hand, Jelonek (2015) cautions that the classical approach to management is seen as restrictive in that it reduces overall staff motivation; limits the chances for creativity and growth accordingly abhors the important spirit of teamwork. The author further argues that this approach fails to meet the desires and needs of workers in the contemporary business environment where diversity is the order of the day. Contemporary Management Theory According to Jelonek (2015), the contemporary management theory is more inclined towards the individuals in a given workplace rather than the procedures, processes and rules governing organizational operations. Rather than have directions flowing directly from the top management to the juniors, the contemporary theory of management provides for a closer engagement between employees and the organization’s management especially when making important decisions. Agrawal & Berg (2009) point out that the good thing with this approach is that it seeks to provide a rare chance for individual employees to feel valued and motivated which in the long run translates to increased productivity. Basically, this approach is aimed at creating a fulfilling and productive workforce that has a sense of ownership and belonging with regard to the host organizations. Spicuzza (2012) observes that many organizations continue to embrace this approach owing to its innate potential to raise productivity as well as boost staff retention rates. This is because a positive attitude among employees can easily be harnessed for the company’s good over a short period of time. However, many scholars observe that a considerable number of organizations remain overly cautious in adopting this approach as it presents an imminent danger of employees making decisions on basis of personal emotions and unsubstantiated opinions even in scenarios where the available hard data proves otherwise (Berfenfeldt, 2010). This is even rather complex since it becomes quite an uphill task to reprimand or to fire such employees in whom the organization has already invested heavily. A Compromise Approach In sum, the two theories represent two divergent views on management that can as well be placed at the opposite ends of a larger spectrum. Whereas one view is keen on the workers as a means through which work is done to realize tangible results, the other is keen on organizational development with specific focus on employee behavior and motivation. Oftentimes, most companies find a combination of the two theories more acceptable in organizational management (Agrawal & Berg, 2009). The Current Trends in Customer Management Practices In the present-day digital world, the game of customer engagement is becoming more fluid owing to the rapid technological developments (Slaats, 2013). Consequently, for organizations to remain on top of their game, there is need for them to recognize the new dynamics and leverage on them to retain customer base. According to Hesselbein & Goldsmith (2006), many scholars opine than the warfront for customers has never been so complicated and competitive; a phenomenon that is linked to three forces: Technological changes – Courtesy of rapid adoption of technology, consumers have never before been as smarter as they’re today; prompting fundamental changes in the world of business. This is because customers can access as much information, from online channels, as possible when making a decision to purchase. The technological trends have proved to be highly disruptive as they create interwoven business risks and opportunities as well. Shift in customer behavior- Just like technology, customer demographics and attitudes are quickly changing with increased demands for corporate social responsibility and business transparency, observes Berfenfeldt (2010). According to the author, if a recent report by an Institute of Customer Service is anything to go by, then most consumers face far mush less problems in purchasing products they need than it was a decade ago and are even more sensitive to complaints when they feel that their expectations have not been met. Increased competition – As new and potential competitors make their entry into the existing markets, some are taking advantage of globalization to alter market dynamics through platforms provided by Apple, Google, Amazon etc. A typical case is Kodak that slid into bankruptcy after failing to put up with the emergence of digital film business (Slaats, 2013). All in all, it is the combination of the three forces that have pressurized industries, world over, to prioritize overhaul of their existing marketing and operational strategies. Nonetheless, a significant number of critical scholars have openly come out to contest the extent to which the business operating models have changed (Saylor Foundation, 2013). This group observes that even the companies using the most sophisticated and superb technology continue to rely on the traditional customer lenses in the quest to effectively address customer needs. Even at a time when customer service is seen as a strategic goal in meeting organizational objectives, a good proportion of companies does not seem keen to leverage on it, notes Slaats (2013). The author gives this as the reason why most companies remain extremely bullish in entrenching customer service in their operations with a whopping 75% of business executives, who believe that their respective companies are already doing way better when compared to their peers. Apparently, what the biggest proportion of these executives fail to acknowledge is the fact that the consumer ultimately defines the excellence in customer service at the end of the day. Most consumers view good customer service as one in which, there is there is consistent engagement over a given period of time (Pahlavanzadeh, 2011). In the same vein, the consumers expect deliberate personalization to enhance great customer experience, interaction channels notwithstanding. The large number of companies that believe are offering great customer experience aside, ostensibly the lion’s share of these companies have greatly failed to grasp the impact and importance of exceptional customer experience as one of the undisputable strategic weapons (Agrawal & Berg, 2009). The pair argues that this is because such organizations, view customer service more often through the lens of merely retaining the customer numbers but less of a valuable asset to facilitate differentiation and consequently boost revenue growth while at the same time sustaining customer engagement and loyalty (Burnett, 2008). Moreover, the author argues that the continued lack of a clear and defined vision has been known to eat into other segments such as boosting product sales, building and sustaining brand equity, improving products as well as marketing strategies and effective capturing of customer voice so as to drive strategy. Documented studies have shown, beyond reasonable doubt, that companies that rely on great customer service in embedding their respective mission are likely to operate at a greater efficiency than their peers who do not (Saylor Foundation, 2013). It, therefore, follows that the retaining of customers is a key factor for companies that rely on recurrent revenues to sustain their businesses. Felix (2015) explains that organizations that are less concerned with the role played by internal staff in enhancing the percentage of customer advocates continue to miss on the bigger picture in the idea of brand differentiation. He further observes that any successful organization keen on customer service understands how critical agents are in not only creating but also maintaining an excellent customer experience. Agents frustrated by insufficient support tools may not feel valued and this may end up reflecting on their demeanor and the resultant seismic effects deal a blow to the customer perception of the particular company or organization. The situation may even be much dire for organizations whose executives have a tendency to boast of making progress in the positive direction (Pahlavanzadeh, 2011). It is worth noting that, such companies also fail to use the lens of employee satisfaction in interrogating the concept of effective customer service. Conclusion In sum, a 1960s Chief Executive Officer would most likely be amazed at the level of customer service engagement and real-time supply chains offered by the modern-day organizations. However, he or she would, at the same time, find many of today's management practices a little changed from those that were used by a generation or two ago. This would be evident from the casual manner, attitude wise, in which most of the companies and organizations have handled the delicate aspect of customer service. Arguably, the blatant negligence of customer agents and internal employees cannot be solely tied to technological advancements and subsequently this would call for more than just innovative minds. In the long run, organizations may ultimately be forced to intelligently review and engage both classical and contemporary management theories in the pursuit for memorable customer experiences that may as well dictate market competitiveness and hence business survival. References Agrawal, G. K. & Berg, D., 2009. The Development of Services in Customer Relationship Management (CRM) Environment from ‘Technology’ Perspective. J. Service Science & Management, 2009, 2: 432-438. {Available} www.SciRP.org/journal/jssm Berfenfeldt, J., 2010. Customer Relationship Management. Lulea University of Technology Burnett, J., 2008. Core Concepts of Marketing. Jacobs Foundation, Zurich, Switzerland Felix, E.A., 2015. Bank Customers Management System. International Journal of Scientific & Technology Research Hesselbein, F. & Goldsmith, M., 2006. The Leader of the Future 2: Visions, Strategies, and Practices for the New Era. Leader to Leader Institute, A Wiley Imprint 989 Market Street, San Francisco Jelonek, D., 2015. The Evolution of Customer Relationship Management System. The International Scientific Conference, Czech Republic Pahlavanzadeh, S., 2011. A critical analysis of Customer Relationship Management from strategic perspective. 2010 International Conference on E-business, Management and Economics IPEDR vol.3 (2011) IACSIT Press, Hong Kong Saylor Foundation, 2013. Historical and Contemporary Theories of Management. The Saylor Foundation Slaats, T., 2013. The Digital Transformation of Customer Services: Our Point of View. Deloitte Touche Tohmatsu Limited Spicuzza, J. F., 2012. A Customer Service Approach to Advising: Theory and Application. University of Tennessee, Knoxville Read More