Corporate Stakeholder - Essay Example

QUESTION Stakeholders "A corporate stakeholder is a party who affects, or can be affected by, the company's actions" (Wikipedia, 2008). Examples of stakeholders in the maritime industry include employees of marine education, marine services, marine supply, ports, recreation, research, shipbuilding or ship repair; communities involved in these activities (local and national); shareholders of a maritime company; investors in that company; the government; schools; suppliers to the maritime company; labor unions; government regulatory agencies; the public at large; industry trade groups; professional maritime organizations; NGOs and advocacy groups; prospective customers; prospective employees; and competitors (Wikipedia, 2008; MindTools, 2008; and Boutelle, 2006). The Management Process "The management process consists of a series of well-known steps: Data collection, Assessment, Planning, Implementation, and Evaluation" (J Midwifery Women's Health, 2003). Those in the maritime industry must perform each and every one of these steps in the management process when they are applying the management process to their business, just like any other industry. It is not just those who work in the industry who must adhere to the process, but all stakeholders partake in at least a portion of it (Farmer and Richman, 1966). For instance, if a ship repair yard wishes to reduce its costs, it would start with Step 1 of the process: Data Collection. This data would include items such as inventory, scraps, salvageable materials, as well as a wide array of data on costs and profits associated with those items. Even though the management team is the entity responsible for implementing this step and those that follow, stakeholders play a role as well. For instance, company employees can share valuable data for management to collect during the process of Step 1. Once the data has been collected, then the ship repair yard could move on to Step 2: Assessment. This is the part where the management team would take a good look at the data and analyze it. In this example, the management team would find out why the repair yard's costs were so high. Feedback from a variety of stakeholders could be analyzed during this step. For example, feedback from customers would be particularly valuable to the management team during this phase of the process. Perhaps customers think the prices are already too high, so management would know to avoid raising prices if at all possible. After this step has been completed, it would be time for Step 3: Planning. This is where the management team at the repair yard would take the knowledge they obtained in Step 2 and plan how to fix the problem. For instance, if they found out that they were spending too much on certain types of repair jobs, but not pulling in enough profit to justify those expenses, they could plan to turn those types of repair jobs away in the future or raise the prices for those types of repair jobs for the customer. Once again, customer feedback would be invaluable at this point. Investors should also have a say in this part of the process. Next is Step 4: Implementation. This is the most important step of all, because no plan is any good at all if it is not set into motion. In this particular example, this would be the step where the management team would change the prices for the repair jobs they had found to be too expensive. This step affects all stakeholders, as they are being introduced to a completely new process that will take some form of adjustment on their part. The final step is Step 5: Evaluation. This is where management takes a look to see how well the management process is working. In this step, the aforementioned repair yard would see how well customers reacted to the price change and make adjustments if necessary. Once again, all stakeholders are involved in this particular phase of the management process (Oakes, Townley and Cooper, 1998). QUESTION 2 Given is that Ricardo Semler considers the challenge of management is to create an environment where people look forward to coming to work in the morning and that The literature suggests that organisations are changing from a top-down, autocratic management driven style to a more flexible, team and service oriented approach. The goal in this portion of the essay is to respond to these two comments by way of a discussion. Comment #1 According to Wikipedia: Ricardo Semler (born 1959 in So Paulo) is the CEO and majority owner of Semco SA, a Brazilian company best known for its radical form of industrial democracy and corporate re-engineering. Under his ownership, revenue has grown from $4 million US in 1982 to $212 million in 2003 and his innovative business management policies have attracted widespread interest around the world. TIME featured him among its Global 100 young leaders profile series published in 1994 while the World Economic Forum also nominated him. The Wall Street Journal America Economia, the Wall Street Journal's Latin American magazine, named him Latin American businessman of the year in 1990 and he was named Brazilian businessman of the year in 1990 and 1992. (2008) Semler had a serious fainting spell when he was 25 and it inspired him to achieve a greater work-life balance for not only himself, but for his employees. He is big on achieving this harmony. One example is that "he founded the Lumiar School, a democratic school where children aged from 2-10 learn only about things that interest them" and another one is that he, "is also building a 20 room luxury eco-tourist resort, in much the same way he has built his other companies. He is getting locals to decide upon the design, and participate not only in the decision making process, but also in the process of building" (Wikipedia, 2008). Creating an environment where people look forward to come to work in the morning is what Semler believes the challenge of management is. The major drawback of the notion is that this concept is in stark misalignment with traditional management concepts that tend to favor the company or management over the employee, whether the company is open about it or not. However, with regard to basic logic, it makes perfect sense. After all, why would an employee who dislikes his job or dislikes coming in to the workplace continue to do so time after time This type of employee would also have diminished productivity, which is certainly something that any management team could do without. At least one of the major goals of management should be to have happy and healthy employees who operate at high levels of productivity. Semler's concept makes that possible (Toulson and Smith, 1994). Comment #2 The literature suggests that organisations are changing from a top-down, autocratic management driven style to a more flexible, team and service oriented approach. This trend is towards contemporary management, which is explained in detail below. "Contemporary theories of management tend to account for and help interpret the rapidly changing nature of today's organizational environments. As before in management history, these theories are prevalent in other sciences as well" (McNamara, 2008). Three of these popular theories are the contingency theory, the systems theory, and the chaos theory. "Contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it's the approach that 'it depends'" (McNamara, 2008). For instance, a shipping company may choose to adopt the autocratic style, while a maritime company with a more customer-service centered approach may choose a participative and facilitative type of leadership style instead. Systems theory is based on the definition of systems itself; that is, "A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. A system can be looked at as having inputs, processes, outputs and outcomes. Systems share feedback among each of these four aspects of the systems" (McNamara, 2008). For example, the maritime shipping industry is a system. If one removes the ship from the picture, there is no longer a system. According to McNamara: Let's look at an organization. Inputs would include resources such as raw materials, money, technologies and people. These inputs go through a process where they're planned, organized, motivated and controlled, ultimately to meet the organization's goals. Outputs would be products or services to a market. Outcomes would be, e.g., enhanced quality of life or productivity for customers/clients, productivity. Feedback would be information from human resources carrying out the process, customers/clients using the products, etc. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies. This overall system framework applies to any system, including subsystems (departments, programs, etc.) in the overall organization. (2008) Chaos theory operates on the notion that events are hardly ever controlled. This theory is based on the idea that, as organizations grow, they become more complex and vulnerable to catastrophic events. As this happens, the organization must expend more energy in order to sustain the complexity. As energy is expended, organizations strive to apply more structure so that they may remain stable. "This trend continues until the system splits, combines with another complex system or falls apart entirely. Sound familiar This trend is what many see as the trend in life, in organizations and the world in general" (McNamara, 2008). QUESTION 3 The Overall Organizational Culture The aim of this portion of the paper is to select any organization involved in the maritime industry to use as a basis to answer a couple of questions. The maritime industry organization chosen for this purpose was Maersk Line, Limited. A thorough profile of the culture of this organization will be discussed, including a description of the overall organizational culture, identification and discussion of any areas that have a subculture distinctive from the rest of the organization, how the writer sees the organization culture developing, and identification and discussion of the influences that will shape the organizational culture. According to their website, "Maersk Line, Limited has logged more than 400 ship-years of success across all areas of vessel operations and support services. We have demonstrated experience managing ship repairs and major overhauls at ports around the world. Our scalable, comprehensive suite of services enhances operational capability and cost-effectiveness for our customers" (Maersk Line, Limited, 2008). The United States Department of Defense regularly relies on Maersk Line, Limited contracts to supply ammunition vessels; auxiliary general ocean surveillance; fast sealift support; large, medium-speed roll-on/roll-off vessels, maritime prepositioned vessels, and seaports. Also according to their website, "Our proven competency enables us to consistently provide best value to our customers, as demonstrated in part by our: Extensive work with ABS, DNV, Lloyd's Register vessel classification organizations; close operational working relationship with the U.S. Coast Guard; and certifications with ISM Code for Safety, ISO-9001:2000 for Quality, and ISO-14001:2004 for Environmental Management programs" (Maersk Line, Limited, 2008). According to their corporate website: Comprehensive quality management and risk management go hand in hand. Understanding the technical, quality, and reporting requirements of SeaPort-e enables TEAM MLL to put into place an integrated approach based on a quality management system that leverages ISO 9001 repeatable processes and applicable metrics and measurement methodologies that tailor a program to your needs. Our comprehensive quality program, coupled with our risk management environment, will result in task order progress and performance visibility and mission success. Assuring delivery of high quality associated support services will be a critical aspect of the SeaPort-e program. We understand that contractor failure to apply rigorous quality standards results in delays, significant variations from cost estimates, and compromised mission capability. Quality management and standards must be applied at all levels of support under this effort. (2008) Quality insurance is at the very heart of Maersk Line Limited's culture. They strive to "accommodate dynamic requirements, geographical distribution, and a wide variety of services with high standards" (Maersk Line, Limited, 2008). In addition, the company plans to evaluate the progress of their initiatives on occasion and make any adjustments that are necessary to ensure that they are meeting the highest quality standards at all times (Maersk Line Limited, 2008). "MLL's corporate quality processes provide a customer-focused culture that results in satisfying customer requirements and providing on-time, on-target professional services and solutions. MLL has established a corporate Quality Environmental Safety Security (QESS) office to initiate and manage quality initiatives and certifications across MLL and our federal contracts. This office initiated a quality management system that is now certified to the International Standards Organization (ISO) 9001 standard" (Maersk Line Limited, 2008). ISO standards have been met by Maersk Line Limited thanks to their Quality Management System, or QMS, which has provided an approach to evaluating program performance quality and projects' adherence to standards, processes, and procedures that is both systematic and planned. Since this process is phased, they are now able to identify trends, manage changes, tell what is causing problems at the root, decide what actions to take, and begin performance improvement (Maersk Line Limited, 2008). "TEAM MLL will monitor, measure, and report on performance of processes against any established SLAs and performance thresholds. Coordinated management decisions will be based upon factual data, and careful review of data trends will provide for early identification of performance-related issues and enable risk mitigation efforts to be implemented before a process or performance breakdown event occurs that could result in a quality problem. Schedule monitoring is performed and reported so that appropriate adjustments can be made to ensure the associated program requirements are met" (Maersk Line Limited, 2008). Performance data will be made available to SeaPort-e because of regular reporting and the reviews that are associated. This data will then be used in the performance improvement process. Performance will continuously improve, customer satisfaction will be enhanced and mission risk will be mitigated thanks to the careful monitoring and performance data measurement, as well as through the reports and reviews that allow for the analysis of this data. A web-based portal will be used in order to promote open discussion and aid in managing the team. In addition, this portal will be used as a means to advertise opportunities, develop reports, post documents, post reference, schedule meetings, update status, and the like (Maersk Line Limited, 2008). "Bringing our proven quality methodologies and ISO 9001 repeatable processes to the SeaPort-e environment will create a comprehensive quality system in which SeaPort-e can have confidence that delivered systems and services meet exacting standards and that TEAM MLL will not only meet requirements but will also continuously improve services and efficiencies. Our focus is on your satisfaction" (Maersk Line Limited, 2008). How the Organizational Culture is Developing The culture at Maersk Line Limited is developing around the customer. They attempt to place all of their efforts on their customers, so it is only natural that the culture of the organization will adjust to meet this particular need. According to McNamara: Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors. Members of an organization soon come to sense the particular culture of an organization. Culture is one of those terms that's difficult to express distinctly, but everyone knows it when they sense it. For example, the culture of a large, for-profit corporation is quite different than that of a hospital which is quite different that that of a university. You can tell the culture of an organization by looking at the arrangement of furniture, what they brag about, what members wear, etc. -- similar to what you can use to get a feeling about someone's personality. (McNamara, 2007) Corporate culture can be considered a system and, as such, has various components in the form of inputs and outputs. "Inputs include feedback from, e.g., society, professions, laws, stories, heroes, values on competition or service, etc. The process is based on our assumptions, values and norms, e.g., our values on money, time, facilities, space and people. Outputs or effects of our culture are, e.g., organizational behaviors, technologies, strategies, image, products, services, appearance, etc" (McNamara, 2007). Four different types of organizational cultures have been identified by Jeffrey Sonnenfield: Academy, Baseball Team, Club, and Fortress. In the Academy culture, the organization provides a stable work environment and employees tend to be highly skilled and work for the organization for a long time. They also have a tendency to work their way up the corporate ladder. This type of culture can be seen in organizations such as hospitals, universities, and large corporations. This is the organizational culture closest to what can be seen at Maersk Line Limited. In organizations with the Baseball Team Culture, employees are extremely valued because they have highly prized skills and are in great demand within their given industry. This means that it would be easy for them to get a job at any organization that they choose. This type of culture can be seen in organizations such as advertising and investment banking. In organizations with the Club Culture, employees desire to fit in with the group over anything else. Employees typically start at entry level and work their way up the corporate ladder, especially since this type of organization tends to promote from within rather than hiring outside candidates for higher positions. This type of culture can be seen in organizations such as law firms and the military. In organizations with the Fortress Culture, employees consistently walk on eggshells not knowing if they are going to be laid off or not. This can be seen in organizations that undergo massive reorganization or similar change. Many opportunities exist for employees who have timely and specified skills. This type of culture can be seen in organizations such as large car companies and savings and loan companies (McNamara, 2007 and De La Pedraja, 1994). QUESTION 4 The statement 'You cannot control what you cannot measure' can be directly linked to the planning and control processes. The purpose of this section of the paper is to explain how. It is essential that company plans support the company control system, but very few managers realize this. Controls should change when goals, missions, objectives, plans, and strategies change, although this is often not the case. This error usually occurs at the top of the organization, but can be experienced at all levels. "Often, too, the standards of the control systems are derived from previous years budgets rather than from current objectives of company plans The result is that employees at lower levels are simply given "numbers to make" based on factors of which they have little knowledge and over which they have practically no influence" (Accel Team, 2008; Columbia Encyclopedia, 2007 and Preece, Steven, and Steven, 1999). The following chart shows the planning-control relationship: (Accel Team, 2008) Although most managers believe that the full planning process must take place before the control process can begin, the above diagram shows one that this is not true. Instead, there are interrelationships that exist between the processes of planning and control. "After objectives are set in the first step of the planning process, appropriate standards should be developed for them. Standards are units of measurement established to serve as a reference base and are useful in determining time lines, sequences of activities, scheduling, and allocation of resources. For example, if objectives are set and work is planned for 18 people on an assembly line, standards or reasonable expectations of performance from each person then need to be clearly established" (Accel Team, 2008). The final step of the control process, which is taking corrective action, is the second interaction that occurs between planning and control. Typically, when this time comes, managers choose to either alter the plan or change the objectives. Although they tend to not want to do either of these things, they need to if they wish to promote a positive motivational climate. This is true because assumptions give one objectives and standards, but if those assumptions are incorrect, then the objectives and standards will have to be adjusted accordingly. Also, if objectives and standards have fallen short, yet the assumptions are true, that typically means that the plan needs to be altered (Accel Team, 2008). "Planning and organizing are two management functions that have been popular research areas in recent years. Control, the third well-known management function, has received surprisingly little attention. This is perhaps because the task side of control is noticed and the behavioral or human side is largely overlooked. But as previously noted, managers should carefully consider the behavioral aspects of the process when designing a control system if employees are to be motivated to accomplish assigned tasks" (Accel Team, 2008). References Boutelle, Jonathan. (2006). Understanding organizational stakeholders for design success. Boxes and Arrows. Available from: http://www.boxesandarrows.com/view/understanding_organizational_stakeholders_for_design_success Critical thinking and the management process. (2003). J Midwifery Womens Health 48(6): 398-406. De La Pedraja, Rene. (1994). A historical dictionary of the U.S. Merchant marine and shipping industry: Since the introduction of steam. Greenwood Press Farmer, Richard N. and Barry M. Richman. (1966). International business: An operational theory. Richard D. Irwin. McNamara, Carter. (2008). Brief overview of contemporary theories in management. Management Help. Available from: http://www.managementhelp.org/mgmnt/cntmpory.htm The management planning process. (2008). Accel Team. Available from: http://www.accel-team.com/control_systems/h_control_01.html Maritime. Maersk Line, Limited. http://www.maersklinelimited.com/mll/maritime/index.asp McNamara, Carter. (2007). Organizational culture. Available from: http://www.managementhelp.org/org_thry/culture/culture.htm Oakes, Leslie S.; Barbara Townley; and David J. Cooper. (1998). Business planning as pedagogy: Language and control in a changing institutional field. Administrative Science Quarterly, Vol. 43. Preece, David; Gordon Steven; and Valerie Steven. (1999). Work, change, and competition: Managing for Bass. Routledge. Quality Assurance. (2008). Maersk Line, Limited. Available from: http://www.mllseaporte.com/quality_assurance.html Ricardo Semler. (2008). Wikipedia. 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