Successful Business Management Practice - Case Study Example

1. Introduction There are various differences between practices used by management personnel in a new workplace than the practices used in past. It is worth mentioning that organisations have to face unlimited challenges in today’s external business conditions because the competition has been increasing due to continued entrance of new enterprises in corporate arena. For instance, the business organisations initially used to adopt vertical – functional managerial structure but now they have inclination to transform their units into divisional, matrix, virtual, network or horizontal structures. More specifically, the new organisations have forgone the idea of individual accountability, rather have willingness to adopt Total Quality Management principles such as team based working environment, experimentation, continuous learning, benchmarking, reduced cycle time and others etc. The role of communication and information sharing has increased tremendously among business organisations because the managers strongly believe that they are operating in a complex world of globalisation, where they have to grapple with challenges at every stage. This report will critically evaluate the notion that successful business management usually requires the implementation of an appropriate management structure and culture together with effective methods of managing the behaviour and attitude of the business workforce. The researcher will use classical management theories to support above mentioned statement as well as will provide examples of multinational organisations that have implemented classical model of management. It is worth mentioning that classical approach does not focus on creation of flexible organisational culture and employee empowerment; therefore, it has received various criticisms by modern business management experts and theorists who emphasise on adaptability, change management, decentralisation, experimentation and collaborative approach as new workplace principles. In addition, the report will also include a discussion on the approach of public and private sector entities towards the ideas of corporate social responsibility / corporate philanthropy and business ethics. 2. Part A The importance of management and organisational culture could not be denied in contemporary business environment because discrimination free and shared value based culture produces a satisfied pool of employees. It should be mentioned that the more satisfied the employees are, the higher their job commitment, morale, confidence and trust over their recruiters. Classical model of business management has thrown light over the fair treatment of employees as well as providing employees the just compensation and remuneration. In fact, this motivates workers because they are being valued; and they put greater efforts to showcase their best potential (Koontz, 1980). As far as the implementation of management structure is concerned, it should be highlighted that employers must have a centralised structure and managerial hierarchy so that the strategic planners could make appropriate decisions according to their assessment, evaluation, understanding, experience and knowledge. The policy makers are actually the smartest personnel who define organisational mission vision short term and long term goals and objectives. In addition, they also define the strategies that are followed to achieve those goals and targets. Therefore, classical model of management has endorsed that decision -making should be specifically for top management. For instance, classical model supports the use of authority, stability and control within an organisational setting because it is essential to maintain decorum and discipline. Also, it should not be confused that employees could make friendships and relationships with their co-workers; however, they have to abide by all organisational laws, rules and regulations and in no way, should become part of dirty politics (Morgan, 1980). The major emphasis of classical model is on result and goal accomplishment. In fact, the approach has supported performance orientation (to a great extent) as well as on employee centered behaviours. This is mainly because the proponents have linked the importance of efficiency and effectiveness with performance and task orientation. In simple words, the higher the financial and monetary gains, the more efficient and effective an organisation is viewed. For instance, the financial results also help gaining the trust of stakeholders as well as enhancing the reputation in the market. Next, the workers also become happy and satisfied with their jobs when employers share the fruits of success in the form of bonuses, commissions, promotions and other tangible financial benefits (Quarto, 2004). In addition, the organisations are more focused towards use of formal and informal communication channels so that they could enhance information sharing, chit chat and communication among employees. Indeed, the interaction among workers leads to relationship building and creation of harmony among workers. As a result, the participation and contribution in business matters increase that, in turn, leads to enhancement in organisational performance. It should not be forgotten that a shared value based and mingling culture is not created with authority, control and strictness. Rather, it is a result of informal opinion sharing at lunch / dinners, in group and open discussions, ceremonies, parties etc. Thenmozhi (n.d). 2.1 - Private Sector Example Chevron is a supranational organisation involved in business of petroleum products and lubricants across the globe. The company has adopted a very strict code of conduct and privacy policy as employees are not permitted to share any information of strategic importance with outsiders. In addition, the company has created a discrimination free and very collaborative organisational culture to strengthen interpersonal relationships among its members. Also, the organisation is decentralised because employees could participate in decision-making process through their suggestions, yet the policies are finalised by directors at the parent company (headquarter in USA) (Chevron Annual Report, 2010).. 2.2 - Public Sector Example In contrast, public sector firms that are owned by government authorities tend to have centralised structures because the employees have no real decision-making authority neither they could participate openly in policy formulation. Instead, the policies are designed and communicated by government, while they have to be implemented by workers at all managerial levels. 3. Part B 3.1 - Corporate Social Responsibility It is worthwhile to mention the fact that organisations have understood the importance of corporate social responsibility and corporate philanthropy that refer to welfare and charity work in the nations where firms operate. For instance, the concept is all about ‘returning to society’ from where organisations offers products and generate profits to maximise shareholders’ wealth. Indeed, CSR initiatives are actually taken to enhance company’s reputation and goodwill in the marketplace. Needless to mention that the real aim of an organisation is to enhance awareness among consumers that it not only values its buyers through production / offering of desired goods and services, but also it values the elements in society through initiating educational, health, charity, and environmental safety programmes. In this way, the organisations could obtain sympathies of societal groups, communities and local publics. For instance, it should be emphasised that CSR programmes are largely initiated mostly by large scale organisations that enjoy extensive financial resources. In contrast, the smaller and medium sized enterprises barely have any CSR or Philanthropy programmes, probably because of their limited budgets, resources and dearth of personnel (Thenmozhi, n.d). 3.2 - Business Ethics Thenmozhi (n.d) has highlighted that Thomas Peters and Waterman (1982) contributed towards the importance of corporate governance through use of ethical theories and moral rights principles. Indeed, the ethical principles should be implemented to ensure transparency and accountability across organisations; thereby making them exemplary in a society. Business ethics refers to principles and actions that are morally correct and that do not involve any discrimination, illicit acts, manipulation and exploitation of employees followed by deception and dishonesty with consumers. For example, organisations are obliged to produce want-satisfying goods and services in a socially responsible way through use of inputs that do not bring any hazard to society. Next, it is responsibility of organisations to fully inform their customers about the benefits and demerits of using a particular product rather hiding defects or side effects. For instance, employees should be trained so that they would behave in a socially responsible manner and would not be involved in any illegal activities. Also, the workers should have courage to disclose any illicit actions of their employers for sake of greater good of greatest number of people. 3.3 - Private Sector Example The author would now like to provide example of Procter and Gamble, which is a multinational corporation indulged in business of consumer products. The company is headquartered in USA and it has more than 250 brands that are offered worldwide. The company has an excellent CSR programme that focuses on almost all major areas such as education, environment, healthcare, community welfare etc. Nevertheless, the corporation also ensures implementation of affirmative action and Equal Employment Opportunity laws to ensure equality among all potential employees. In addition, the company has been focusing to eradicate the possibility of Glass Ceiling against women and minority candidates who wish to advance for excellent future in a multinational organisation. Also, it should be highlighted that Procter & Gamble has developed an environmental safety programme according to which company sets 5-, 10 and 20- year targets about decreasing carbon emissions to protect world from threats of global warming and ozone layer depletion. The initiatives have proven successful because P&G has easily achieved its all targets regarding decline in carbon emissions (Company Annual Report, 2010). Procter and Gamble has also devised an extensive ‘code of conduct’ that targets both employers and employees. According to this code, strategic planners are prohibited to violate any laws and principles that are a part of United Nations Global Compact Act. For instance, the company has zero tolerance policy for those involved in unethical behaviours and actions because it does not compromise on moral rights and ethical values of a society (Company Annual Report, 2010). 3.4 - Public Sector Example Public sector entities are usually owned by the state because they are responsible for public good, such as power, telephone, gas, water, health etc. to society. Also, most of these public sector companies are not-for-profit because they are of strategic importance. Unlike private sector that earn and then offer smaller returns to society through their CSR programmes, public sector enterprises are throughout involved in community welfare and philanthropy as they meet the basic needs of households in a nation. 4. Conclusion In a nut shell, the classical model of business management was produced by Henry Foyel who believed that focus on specialisation will enabled organisations in increasing their efficiency and productivity, which means more output could be produced from fewer units of inputs and hence companies could maximise their financial gains. In addition, the proponents of classical approach also endorsed the idea of authority, stability and control so that workers would become more task – oriented. Indeed, the classical theories have emphasised the result – orientation and performance – based structure because it would facilitate organisations in maximisation of monetary profits. Also, the classical approach emphasises the creation of hierarchies and chain of command in order to ensure stability and control. For instance, the classical theorists are of the view that top managers should have complete authority for decision-making, whereas middle and low level managers should obey and act upon orders of strategic planners. In the light of above, it is worthwhile to mention that it is necessary to implement an appropriate management structure and culture together with effective methods of managing the behaviour and attitude of the business workforce. This is mainly because organisations do not thrive in absence of discipline and code of conduct. Indeed, there must be strict check and balance coupled with flexibility, decentralisation and employee empowerment to create a shared value based organisational culture. Hence, in this way, I would not support 100% implementation of classical model of management; rather it is appropriate to adopt some useful features such as performance-, task- and result-orientation followed by use of verbal communication (informal) and fair treatment with workers at all levels to reduce turnover rates. References Koontz, H. (1980). The management theory jungle revisited. Academy of Management Review, Vol. 5(2), pp. 175-187 Morgan, Gareth (1980). Paradigms, Metaphors, and Puzzle Solving in Organization Theory. Administrative science quarterly Quatro, Scott (2004). New Age or Age Old: Classical Management Theory and Traditional Organized Religion as Underpinnings of the Contemporary Organizational Spirituality Movement. Human Resource Development Review, vol. 3, no. 3, 228-249 Thenmozhi, M. (n.d). Evolution of Management Theory. Indian Institute of Technology Madras Doyle, M. E. and Smith, M. K. (2001) ‘Classical leadership’, the encyclopedia of informal education, http://www.infed.org/leadership/traditional_leadership.htm P&G Annual Report (2010). Annual Financial Report 2010. Procter & Gamble www.pg.com Chevron Annual Report (2010). Annual Financial Report 2010. Chevron www.chevron.com Read More