Decision Rights: Bundling Tasks into Jobs and Subunits - Essay Example

Though there are standardized regulations laid by J&J which need to be followed, it is their belief that managers across the world need to be empowered with the decision rights as they understand their local culture best. J&J encourages the lower-level managers to exploit this specific knowledge and are driven by compensation based on the effective utilization of this knowledge and its successful implementation. The other most important advantage that J&J has exploited is that empowering the lower and middle management with decision rights enables the top management to focus their attention on the bigger picture of business such as strategic formulation, the optimal architecture of the business, and effective allocation of resources in business units.

There are numerous environmental changes and pressures that J&J has to encounter. The market in which J&J operates is full of rivals that impose a continuous threat to overpower J&J with the increasing rate of acquisitions and expansion in product lines. Clutter of numerous products and large economies of scale are the results of this competition. The consumer tends to become more knowledgeable over time as he is provided with an array of opportunities; hence to effectively market the product to them is a challenge in this changing environmental scenario. Amidst these challenges, there is no specific organizational change that J&J needs to make. They can cater to these challenges by working harder for more market share, cutting off unnecessary expenses, and developing shareholder value through effective mergers.

The other major challenge is that the field in which J&J operates has numerous governmental regulations, local cultural cues, and requirements of adaptation. This demands J&J to show more flexibility in their multinational operations and leverage authority to the local management as they have a better understanding of the scenario than they have. The decision right should be such that should not only restrict to a particular function but should be relevant to the entire department. The top management structure would remain similar but with more allocation of rights for decision-making. The following chart depicts a particular category of J&J in its international operations. This can be done by the following organizational chart:

With the rising competitive and technological forces, the caseworkers are provided with the primary responsibility of decision making, and this change in organizational architecture from functional format to this would help J&J to effectively cater to the emerging changes (Brickley, Smith and Zimmerman, 371-374).

Executive compensation is a much-debated issue across the world as the executive salaries surge rocketing up the sky and being leaps and bounds ahead of that of subordinates. This has imposed serious questions on the ethics of compensation in corporate culture. There have been numerous proposals being offered by different regulatory bodies, however, there is a trade-off between the compensation and performance.

To accept such a proposal that the executive’s pay shall not exceed 10 times of the lowest-paid employee can have impactful results. Usually, it is seen that the big companies of the World have top executives who have zero correlation between performance and compensation. It is evident from the statistics of World top companies that even though the executive compensation tends to rise significantly, their financial position has deteriorated.

I personally believe that such a proposal should not be accepted. The primary reason is that the executive and top management possess the expertise, experience, and skills unmatched even if they aren’t yielding the best results. There is no parallel to the level of in-depth knowledge they have for the business and a firm grip on it. They are the real strategic assets of the firm, and such a plan would not motivate them to perform at their maximum potential and they would seek alternative job positions. However, a carefully designed compensation plan in which the compensation i.e. awards, bonuses, and salary should be correlated directly with performance would be an effective proposal. Stringent conditions and consequences would be termed if the performance and objectives are not achieved.