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This essay is about the CEO's burden. CEOs are the pinnacle of the management system and hence posses the power to control the whole organization but they also have the responsibility to fulfil the goals of the organization. This essay reveals the responsibility of the CEOs and their strategy towards achieving organizational goal.
Organization is a non living thing which doesn't have a brain of its own to think or to reason so actually organization has no goals only people have goals. Therefore the organizational goals are recognized by people, either individually or collectively. A CEO can collectively agree on a particular course of action which may be known as organizational goal but in reality these goals are the goals of the CEO who primarily determined it. Organizational goals are the reason and purpose the organization is formed for. These goals differ from one organization to another therefore organizational goal decide the character of its input and outputs, the sequence of deeds through which the outputs are achieved, and the relations with its external environment. The performance and effectiveness of an organization is appraised by the level to which an organization is successful in realizing its goals.
Goals can be informal and formal. Informal goals are the personal goals of a CEO but a formal goal is the officially stated goals of an organization. For example if the CEO of British Airways wants to lower the price of tickets and increase the number of flights to satisfy the needs of customer and attract more customer then it is a formal goal because it is also the goal of the organization but if his/her goals are to earn high wages, to gain social satisfaction and to achieve status then it is considered to be an informal goal. If the personal goal (informal goal) and the organizational goal (formal goal) conflict with each other then the performance of the organization is likely to suffer. As a result a CEO should never let his/her personal goal conflict with the organizational goal rather he/she should persuade their own goals by contributing to the goals of the organization.
In order to be a successful CEO he/she needs to have a strategy. Strategy is a powerful tools of a CEO because it helps the CEO to make his/her employee to co-operate together in order to achieve the benefits of mutual reinforcement. Secondly strategy helps to tackle the effects of changing environmental conditions. However before making a strategy a CEO needs to know the type of organization he/she is in.
If the CEO is of a public organization then his/her strategy is governed by broader public issues such as politics, monopoly supply ,bureaucracy and the battle for resources from the government to fund the activities of the organization as it is an unprofitable organizational. CEO's strategy needs to reflect the values held by the organizations concerned. Implementing strategy is slow as decision making in such organizations is slow and more complex so the CEO needs to have patience.
If the CEO is of a private organization then his/her strategy should be to attract more customer, increase the revenue, and create a good-will of the company as its main objective is to earn more profit, be monopolistic and survive in the competitive market for longer period. Implementing strategy is fast as decision making in such organization is quick and are less complex compared to public organizations.
To make a strategy a CEO needs to do the SWOT analysis of his/her organization to know what the situation of the organization is, in the environmental setting. SWOT analysis is the acronym for the analysis of strength and weakness of organization following the formulation of objectives and to threats and opportunities in the process of strategic change; Ansoff H. I. (1969).
Strength- it is the positive aspect of the company which needs to be exploited. We can find the strength of the company by its present market position, size, structure, managerial expertise, physical or financial resources, staffing, and image of reputation. By finding opportunities which match its strength the organization can optimise the effects of synergy. Here the CEO can use the strength of the organization to his/her favour to make a strategy to attract more customers.
Weakness- it is the negative aspect of the company which needs to be corrected. Weakness of a company is most evident when it operates within a particular narrow market, limited accommodation or outdated equipment, a high proportion of fixed costs, a high proportion of fixed costs, a bureaucratic structure, a high level of customer complaints or a shortage of key managerial staff. Here the CEO needs to address the weakness and make a strategy to correct the weakness of the organization.
Opportunities- due to the nature of change in the external environment it gives rise to favourable conditions is known as opportunities. The CEO needs to be responsive towards change and he/she needs to be sensitive to the problems of business strategy. Its examples are new markets, technology advances, improved economic factors, failure of competitors. Opportunities provide the CEO a chance to offer new or to develop existing products, facilities or services.
Threats- threats are the unfavourable condition which arises when external developments are likely to endanger the operations and effectiveness of the organization. The examples of threats can be the introduction of a radically new product of competitors, changes in legislation, political or economic unrest, changing social conditions and the actions of pressure groups. A CEO needs to be responsive to the changes and make a strategy to face them and deal with them.
For the second, third, fourth, fifth and sixth question the answer must be yes because this proves how good the CEO is in making strategies by recognising the weakness and continually improving its efficiency and productivity, by recognising the threats from other competitors, by making plans to penetrate new markets, by making a good-will of their company and give special privileges to the loyal customer.
Organization plays a vital role in the lives of us all because we need the goods and services created and supplied by it, including the creation and distribution of wealth. It makes a huge contribution to the quality of life and to the well-being of the community. On the other hand the economic efficiency of the organization is affected by variables like government, social, technical and cultural. In some cases organization may affect our quality of life and well-being to tackle the variables in order to achieve its goals. Therefore to protect the community from unlawful practices social responsibility of organization was formed and now government has legislation on such matters. The legislations imposed by the government are employment protection, equal opportunities, companies' acts, consumer law, product liability and safeguarding the environment. If the CEO of an organization fails to follow social responsibility of the organization then he/ she may have to face serious consequences. Therefore the responsibility of a CEO is to follow the social responsibilities of the organization while earning profits for the organization.
For the first question the answer is yes because it is the responsibility of the CEO to provide profitable goods and services which helps to increase the revenue as it is the source that the keeps the organization running. And for the last question the answers is yes because it is the responsibility of the CEO to check if the policies, plans and strategies are working well and are up to date. If not then he/she should revise it and make new policies, plans and strategies.
Therefore the burden of the CEO here is to follow the corporate social responsibility and as well as earn revenue for the organization.
Nature of management, Management behaviour and Effectiveness
There are different types of management styles and they are Authoritarian style, Authoritative style, Democratic style, Afflictive style, Permissive style, Indifferent style Coaching style, Pacesetting style, Visionary style, Bureaucratic style, Defensive style. These styles of management help to determine the nature, behaviour and effectiveness of the management.
Let's say that the CEO decides to take the democratic style of management. The democratic style of management is all about interacting with the employees and giving much freedom as possible. Here the CEO will try to achieve organizational goal by consensus and employee participation. Therefore the nature of the management under such management style would be to seek ideas from their employees in achieving organizational goal. Here employees don't follow the orders of the CEO blindly but give their own views on how to achieve the goals. The behaviour of such management is democratic and CEO following democratic style will try to get opinions of their employee on serious issues. This style of management will make the employee to think that they are the integral part of the organization and have a sense of responsibility towards the organization as their ideas are also being used in the achievement in organizational goals. Therefore this style reduces the risk of employee rebellion and helps the organization to run smoothly and efficiently.
Likewise let us say that the CEO decides to use the Authoritarian style of management. The Authoritarian style of management is a coercive style of management where CEOs demand immediate compliance from their employees. Here the CEO will be saying "Just do as I say". The nature of manage under this style is very rigid as everybody will have to do whatever the management says. Employees just follow the orders of the CEO blindly no questions asked. The behaviour of the management under this style is very strict. Here the management or CEO expects their employees to do whatever they are told to do. This style may be suitable in crisis situation and in military but in modern business scenario this style of management can't survive because employees will be demotivated and rebel against the management which will lead to inefficiency of work and desired organization cannot be achieved.
Here the burden of the CEO is to choose the correct style of management for his/her organization that leads to increase in employee motivation, job satisfaction and discard the management style that leads to job dissatisfaction and rebellion against the management.
In 1992 McCrae and John grouped the many observed traits into a much smaller number of cluster or 'super traits' known as the big five. It refers to the traits cluster that comes into view time after time to incarcerate most important personality traits: Openness, Conscientiousness, extraversion, agreeableness and neuroticism. These traits help us to find the true nature of a leader. According to the openness trait if the leader is creative, open-minded and intellectual then he/she is an Explorer and if the openness trait says that the leader is unimaginative, disinterested and narrow-minded then he/she is a Preserver. Similarly, if the conscientiousness trait says that the leader is dutiful, achievement oriented and self-disciplined then he/she is a Focused leader but if the conscientiousness trait says that the leader is frivolous, irresponsible and disorganised then he/she is a Flexible leader. In the same way, if the extraversion trait says that the leader is gregarious, warm and positive then he/she is an Extravert leader and if the extraversion trait says that the leader is quiet, reserved and shy then he/she is a Introvert leader. Correspondingly, if the agreeableness trait says that the leader is straightforward, complaint and sympathetic then he/she is an Adapter and if the agreeableness trait says that the leader is quarrelsome, oppositional and unfeeling then he/she is a Challenger. Equally, if the neuroticism trait says that the leader is anxious, depressed and self-conscious then he/she is a Reactive leader and if the neuroticism trait says that the leader is calm, contented and self-assured the he/she is considered to be a Resilient leader. According to the big five trait clusters a CEO can have any kind of leadership qualities among the ten leadership types.
According to James Burns (1978); there are two types of leader transactional and transformational leaders. A transactional leader treats his leadership as an exchange which means giving his/her followers what they want if they do what he desires. Therefore if a CEO is a transactional leader then he/she will reward or give anything to their employee like increment in salary, security in job, etc if the employee does what he/she is told to do. A transformational leader is a leader who treats leadership as matter of motivation and commitment, inspiring followers by alluring to higher ethics and moral standards. A transformational leader is also known as a charismatic leader. So, if the CEO is a transformational leader then he/she will motivate the employees to achieve the organizational goals by articulating an attractive vision for the organization, reinforcing the values in that vision and empowering them to come up with new and creative ideas to get the goals.
It is one of the most important qualities of a leader or a successful CEO which makes his/her follower/employee to achieve organizational goal. It refers to the forces within that provoke and maintain the commitment of the follower/employee to a course of action. Motivation creates a psychological contract between the leader/CEO and the follower/employee.
There are a lot of motivation theories like the Maslow's hierarchy of needs theory, Clayton Alderfer - ERG theory, Frederick Herzberg - two factor theories, Douglas McGregor - Theory X or Theory Y, Expectancy theory, J. Stacey Adams - Equity theory and Edwin A. Locke - Goal-setting theory.
For example let us say a CEO followed Maslow's hierarchy of needs theory to motivate his/her employee. According to Maslow's hierarchy of needs people have different level of needs and he has based the basic needs at the bottom and higher needs at the top. According to Maslow people tend to fulfil their basic needs first and move up towards the higher needs as the needs get fulfilled. At the bottom is the physiological need which is basically the needs that people need to survive like food, sex, salary, sleep, etc. So to motivate his/her employee the CEO needs to fulfil these needs. As these needs get realised the employee is no longer motivated towards the goal by simply fulfilling their physiological needs so the CEO needs to satisfy the safety needs of the employee to motivate them for example giving job security, etc. As they gain safety needs they tend to seek higher need which is love and belongingness need. Therefore to motivate them the CEO needs to give care, love and acknowledge their effort in order to motivate further. When this need is also fulfilled then the employee wants to fulfil their Esteem needs. A CEO can help an employee to fulfil his/her esteem needs by raising their salary, giving promotion, giving recognition for their hard work, etc and this will motivate them to work even harder towards achieving the organizational goals. At the top of the hierarchy is the self actualisation need which needs to be fulfilled to motivate the employee. This need can be fulfilled by the CEO by giving his/her employee freedom in their work less restriction so they can realise their potential.
From the above we know that a CEO has the responsibility to get the desired goal by making strategies following the suitable management style, by motivating the staff using the suitable motivational theories and by leading the staff by using the correct leadership style. This decision making and implementation of the decision of the CEO at the right time is the burden of the CEO.