Discuss some of the tensions inherent in the management of contemporary business

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The essay covers an overview of the business structuring, employee management and culture in contemporary organizations, the possible issues that might occur while managing such an organization. The issue are addressed based on the factors such as knowledge management, leadership style, employee relationships. The different approaches taken to address these issues have also been covered in the essay.

In this 21st century, employment style has been shifted from service workers to knowledge workers. The organizations are gradually moving away from the paradigm of striving for mass productions, hierarchical and bureaucratic organizational structures which aim to control the activities from the centre. The new trend of organizing demands for a more flexible and continuous learning environment to solve the problems through coordinated and self-organized practices. (Daft, R. L. Lewin, A. Y.,1993).There is need for more channels of communication.

Contemporary organisations defined:

"An organization is a system which as, as the attainment of its goal, produces an identifiable something which can be utilized in some way by another system. This means, the output of the organization is, for some other system, an input" as defined by Parsons. The contemporary organizations are considered as a much loosely coupled system with no clear authoritative relationships. Some of the contemporary organizations have been very goal focussed and the objectives are very clearly defined; the business processes and outcome are more dependent on innovation and creativity. There are many porous boundaries that exist within and between the organizations.

There are different forms of contemporary organizations such as the horizontal organization, virtual organization and the Networked organizations.

Tensions inherent in managing contemporary organisations:

The contemporary organizations are seen more as rational projects assuming that only the assets and equity are the factors that generate revenue to them. These companies specify every detail in such a way that every employee is sure of their jobs. More emphasis is given to written procedures. As Burns& stalker, 1961 states, these can be called as 'Mechanistic organizations'. They are focused more on job requirements.

In many contemporary organizations, the management presumes that employees will automatically come forward to work together with each other and their organization. The large organizations recruit a whole bunch of people in order to fit with the organization instead of selecting the employees for specific job (Herriot, 1992) .The business operations has been managed within the organization boundaries. There has been no importance given to knowledge creation, technological innovations and globalization. Generally, the employees' attitudes in the contemporary organizations are very controlled. They tend to avoid taking risks due to the fear of facing failure or lack of jobs. This makes them have low interpersonal skills which In turn affects the organizations in the long run.

Knowledge generally exists in the social networks which has been a major deficit in the organizational structure. Most organizations of the past have been resistant to innovations. The employees in those organizations are assigned with specific set of tasks that get repeated every day. To ensure that these tasks don't get disrupted, innovative ideas are barred (Herbert A.Shepard, 1967).As the process of developing innovative ideas may involve lot of errors and misassumptions in between, the companies have been very careful in not trying this approach. The company follows repeated cycles of input, transformation and output processes which gives no way to developing the knowledge within and outside the organizations. This does not let the company be aware of the feedbacks of its processes which are again essential for it to grow in business.

Because of its flatter structure, even the current companies that demonstrate to be information-based actually resemble the traditional organization structure. In the traditional organizations, the knowledge was restricted to only the top people in such companies. There has been a command and control in every department within the organizations.

Due to very specific processes that have to be followed, the employees in the project teams in those days were not given enough opportunity to shine with their innovative ideas. It tends to concentrate more on the routine decisions rather than the long term strategies. The strategies were very restricted to effective functioning within the departments. As the companies are investing more in the Information technology methodologies only recently, there is a lack of alignment between the business strategies and the IT/strategies of the organization.

Information and communication technology is becoming the backbone of many organizations, replacing a more formal managing structure to achieve wider and coordinating relationships within and between organizations. These developed ways of communications improve the growth and effectiveness of organizations and its external relationships. Information in a company should never be controlled and limited to any specific person. Instead, it should be instrumental for greater effectiveness and should be freely available to any individual at any point of time within the company.

Overcoming the assumption, that an organization can operate effectively only if it is independent, autonomous and has control over its own destiny, the current organizations are facing the opposite way of achieving success through an interactive and social networking business operation globally.

Many companies including non-profit organizations are seeking for strategic alliances and other methods of inter dependencies .The boundaries among them are getting disappeared as they explore more and more inter organization connections and new ventures. Companies emerging as independencies rather than independent companies will be a special feature in this new organization paradigm.

In the old way of organizing structures, the managers attempted to restrict the people and facilities. Where as in the new world, business and influence is based on management and employee relationships. Managers are responsible to shape the energy that flow through the organization's white space. But the most challenging part is how the new organization structure and strategies maps the on-going business processes. There exists a knowledge gap in between the transition stage from the old to the new organization paradigm.

In the current era, there is an increasingly competitive environment due to invent of many new organizations coming up in different sectors and due to the growing consumer demands. On the other hand, the Information technology is also well advanced to support this uncertain business environment. So, the current organizations are expected to adapt to the new business environment. Many companies have started investing in IT either through in house technical employees or outsourcing it to other countries which is more cost -effective.

Advanced technologies alone will not create a informative based organization. Although the companies can invest money in the new technologies to improve the business operations, the managing and employee behaviour style is very difficult to change. This is one of the biggest challenges that these companies face today.

Today's informative based organizations require that even the bottom level employees hold the information required to do specialist jobs . Therefore, the managers and other senior management of these organizations are facing the difficulty to cope up with the today's uncertain environment. They are not provided with any guidance and benefit of theories and models that would shift to a new paradigm. Although the new ways of organizing strategies have come up, many companies are unable to map to these turbulent environments and this itself has emerged as a new strategic plan. The communications has to happen both horizontally as well as vertically in a well balanced manner.

We should also be aware of the fact that decentralisation into different units will be even more critical than it is now. The organizations must follow the approach of having simple, clear and common objectives that translate information into particular actions. Decentralization does not address the issues that occur in a specific area as the control is handed to over to some other person.

Approaches followed to address this issue:

In the traditional organizations, the leadership style used to be very bureaucratic and controlled which are now slowly shifting towards a more open view to use intangible qualities of vision, culture, and information and shared values throughout the organization. It is moving away from a more top down monitoring, vigilant and record keeping to a more shared and horizontal hierarchical environment . (Daft, R. L. Lewin, A. Y., 1993)Hence, it is evident that, steps have already been taken to address the complexities in the current organizations.

However, the opportunities available for an individual in the organization should be plentiful in the current business trends. Therefore, many organizations today are putting their maximum effort to authorise their employees to take decisions efficiently and effectively in order to achieve the organization's goals. Through this delegation process, the problems are identified at earlier and lower levels, such as self-managed teams. This approach will definitely improve the involvement and empowerment of employees with more interest than before.

To maintain the profitability in an organization, the companies need to adopt policies of high quality, in an era of fast-paced change. To do this, information management has to be effective. This ensures that internal and external communications should be cost justified, and create a competitive advantage over other firms. To achieve this, the corporate culture has to be modified to map with the current business climate. Employees and companies should invest time to learn before they expect a return.(Standfield, Ken., 2002).Many flexible contracts have to be utilized to allow staff fluidity to respond to the market needs.

The knowledge workers are responsible for creating the knowledge wealth by exchanging knowledge assets and relationship assets. We should realise that, knowledge managers play a crucial role in making this successful to manage the knowledge workers. They are responsible for managing four different assets. They are knowledge assets, relationship assets, emotional assets and time assets.

There are many consultants who provide specific methods and practices to assist the knowledge workers, managers and executives for better productivity through best knowledge management, and to enable a stable position in the specific target market in which the organization provides services. Because, the players in an information based organization are specialist, they will not be taught to work. But, they will be guided on how best to use the information available (Peter F.Drucker, 1988).The skilled consultants will provide many training programmes based on the employee level such as the top level, middle level or bottom level managers.


The companies should focus more to be functionally flexible in such a way that the employees are multi skilled and are assigned to different roles, depending on the market demands. The organizations should also be financially flexible enough by implementing many resource systems to permit cash flow every time.