REPORT ON KEY MANAGEMENT IN AN INNOVATIVE ORGANIZATION

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In today`s competitive business world innovation plays a vital role which decides the growth of the company and makes the company stand alone from their competitors. The main aim of the report is to analyze and understand the important and key management areas in an innovative organization and analyze what the two companies W.L. Gore and Semco has been doing different in relation to these key management areas and to critically consider the relationship between the management actions identified and the organizations characteristics in the two cases indicating the benefits and limitations of adopting such management practices in other organizations.

Introduction

Management:

The management are the people who guide the team in a right path wherein all together working for the same goal of success. They have to work together with Sincerity, Unity, Courage, Communication, Enthusiasm, Strengths, and Secrets of the company to form the ultimate chain of SUCCESS. The manager who runs the team should have proper interaction with each and every team member with proper updates and feedbacks. Also have to take active participation whatever happens within the team and team members. Since the manager knows about each and every member of his team, has to check with the daily metrics where that particular team member is lacking behind and has to make sure that the person has been well trained, again have to check for the daily metrics to give the feedback. Also have to sympathize and empathies with the person having any personal issues as well. Every individual team player also has to develop knowledge, confidence, time management and sincerity to be a part in the growth of the company.

According to the Mintzberg's managerial roles manager should have quality of leader by motivation and activation of subordinates for staffing and for associated duties. Manager has to monitor various activities and to receive wide range of special information to develop the organization. (Buchanan and Huczynski, 2004, p495).

Organization:

An organization is a place where group of people work, together or individually for the same motive and goal of the organization. So to run an organization in a successful manner the management should have some set of rules and norms where every individual has to follow. Every individual should feel responsible for the things happening in the organization and should actively participate in the work given. They should motivate themselves to do the work properly and make use of the benefits given by the company and give benefits to the company in return. These basic keys will be followed in all organization which is running successfully. But now a day it has to be a step ahead with innovation to sustain the success and to bravely face the competitor.

Innovation:

As we all know the only thing that never changes is "change", so everyone needs some change and people are willing to see new things and new ideas. The other name for innovation is creativity which is very important in this competitive world. Innovation is not only one time phenomena but a long process ranging from the generation of a new idea till the phase of its implementation. Hence no matter how marvelous a technological innovation may be, it does not constitute innovation if it creates no pure profit in the market economy. Many books and management experts have predicted a world today of rapidly increasing change and the need for managers to be able to respond in ways that have not been previously imagined. The successful implementation of new ideas in organizations which may either help towards a new product, service or the business process can give the companies today the competitive edge they are seeking. This is critical today for an organization to survive challenges from its competitors or rivals. Hence in this particular world today competitive advantage is likely to arise from organizations that can demonstrate to a customer why they should opt for them, creating the need for innovation in organizations.

The major features of an innovative organization

There are five main key actions which a manager can take to make the organization more innovative.

A1. Solving Problems Innovatively:

All organization has the same motive as to run the business in a successful way, but in today's competitive business world it is made necessary to run the business in an innovative manner like Gore and Semco to stand alone ahead of other companies.Traditionally manager solves a problem if he or she knows about it. He or she will never accept any solution given by others because of ego problems in psychological perspective. They try to impress other by showing they know the real concern of the problem (HAPM, n.d). Hence, here power matters. If manager is more powerful, staffs have to listen. But when it comes to innovative management, problem solving is done by group discussion where everyone will be given a chance to express their own innovative ideas which makes the team members feel that their values are been rewarded.

A2. Communication Gap:

Organizations that follow traditional which is also called mechanist approach may have long hierarchies. As a result information flow will take a longer time and also this may affect the reliability of information received. On the other hand the innovative modern organizations have more flat hierarchies, where information flows easily between individuals.

In an innovative management, hierarchy is cut down to minimum. Instead of five supervisors or managers, management will have two. Most minor decisions will be taken by the employers themselves. Direct communication between employee and supervisor without including middle person since everyone has given the right to express their own innovative ideas and everyone is considered as an asset of the company. To create an innovative organization, every individual in the organization needs to feel responsible for helping to produce the organization's real results.

A3. Decision making:

Decision Making lies at the heart of a successful organization and as such it is important to consider the different decision making processes. It is the processes and systems by which strategic decisions are taken in the organization. Internal organization decision making becomes the centre of attention and stakeholders and leaders receive less emphasis (Rabin et al, 2000: p.549).

Once a decision is taken it is considered as the final decision and cannot be changed all of a sudden, since the process would have been in the next step. The usage of such formal procedures have the advantage of a well-defined process that all participants can follow and know what to expect. At the end of each cycle of the decision making process the organization will have an in depth understanding of the problem from the evaluation stage (Rabin et al, 2000: p.549).

Group decision-making is a better resource than an individual acting alone when the decision requires much research and brainstorming of ideas. Innovative management approach to decision making is that the managers often involve subordinates and encourage them in giving their view point when making decisions. Hence employees feel more valued and trusted by their managers which in turn not only motivates employees but also increases employee morale. This is not seen in the traditional approach to decision making as the manager often makes the decision alone and dictates to subordinates.

A4. Control:

This is the most important key factor which every organization feels difficult to handle. The employees working for the organization are humans and cannot be controlled like machines. They have to be handled in such a way that they are not been hurt and also get the work properly done from them. If such mechanisms does not operate in an organization there is no coordination and control, thus no organization or performance. Therefore if proper management control is done then it is easy for the organization to grow well, because team co-ordination is very important to run any kind of concern. Management also has to motivate the employees with proper co-ordination which ultimately leads to the pathway of success. From a behavioral perspective management control is viewed as a process and not as a set of tools and techniques. In other words implementing a managerial control mechanism in an organization can impact employee behavior (HAPM, n.d).

According to the mechanistic view of organizational control, classical management theories suggest that control is one of the basic functions of management that goes along other management activities such as planning, organizing, commanding and staffing. In other words the control is a mechanism which ensures managers that plans and targets will be achieved (HAPM, n.d).

Tough rules, procedures, performance measures, objectives and other control mechanisms were main reasons for the barriers to innovation.(Dabila,2000).In contrast the new innovative paradigms that view organizations as living beings (John Gattorna) that has fewer rules, fluid structures, and high levels of communication were seen as more flexible and able to grab innovative opportunities more easily (Burns and Stalker, 1961).

However, Burns and Stalker argue that different business environments require different management systems in organizations. The mechanistic traditional approach to management is most suitable for relatively stable environments. However, this structure is not suitable for times of rapid technological and market change. This is because the mechanistic structure is not capable to keep phase with the demand of large scale research and development and the new relationships with the market required under these conditions (Jackson, 2000: p.114).

It is argued that in innovative approach, management is seen more independent, less formal task and employee duties are constantly reviewed. Innovative approach does not have fixed goals like traditional approach. Goals are changeable according to customer demands; attitude (HAPM, n.d).

A5. Process Improvement:

The purpose of process improvement is to eliminate the root causes of performance deficiencies in processes that already exist in the organization. These performances deficiencies may be causing real problems for the organization, or may be preventing it from working as efficiently and effectively as it could. To eliminate these deficiencies a five-step approach is used.

Define

Measure

Analyse

Improve

Control

SPEED

SERVICE

SERVICE

INCREASE STAFFING

PRODUCTIVITY

B. Innovative Management Techniques of Gore and Semco

B1. W.L. Gore and Associates, Inc.:

W. L. Gore & Associates, Inc was founded in 1958. It is a privately-held company headquartered in Newark, Delaware, USA. Gore has built a worldwide reputation for ethics and integrity in its dealings with customers, suppliers, and employees, and for taking a long-term view when assessing business situations for more than 50 years now. The company has around 9000 employees that they call associates and is locates in 30 courtiers. Right from the start Gore has been a team-based, flat lattice organization that favored personal initiative. There are neither traditional organizational charts nor any chains of command. Gore encourages hands on innovation within the organization.

B2. Solving Problems Innovatively in Gore:

At Gore workers set their own production quotas. Employees decide among themselves the best time to come to work. Employees redesign products they make, their work environments, and even formulate their own marketing plans (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Managers run their units with unheard of freedom and determine business strategies without interference from top management. Each division in the company is allowed to set their own salary structure. All financial information is discussed openly and freely. If employees need assistance in making sense of the financials classes are held to assist them in understanding the meaning of the numbers. There are reception desks but no receptionists. There are no secretaries or personal assistants. There are no executive dining rooms and no personalized parking spaces (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

B3. Communication in Gore:

The company has direct face to face communication between everyone. The organization nurtures a culture of innovation and creativity, therefore takes into account the viewpoints of all employees (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

B4. Decision making in Gore:

Gore Company does not have a formal hierarchy and everyone is a leader of their own. However, associates of the organization may propose objectives and activities and then seek agreement and team consensus on objectives (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010). This is a clear example of the innovative approach to management where the manager first consults subordinates before reaching the final decision.

B5. Management Control in Gore:

Company demanded from its employees to follow the basic ethical procedures in doing business and refrain from illegal activities in the organization. With the relaxed management style, company was doing well. According to Bill Gore having a formal management approach may hinder creativity of employees (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

One of the management control mechanisms that the organization use is when recruiting employees. The company used a 'Sponsor' program, in training and measuring employee performance. The sponsor will measure the new employee's performance, and help in motivating and training the employee. The company was not only seen as not been managed, but also as not having any form of structure. Bill Gore referred to this structure as a lattice structure (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Gore case indicates one of the innovative managements where employees are given the freedom to their work by their own. The company believed that the implementation of such kind of management control has a greater influence in innovation, thus leading to successful organizational performance.

B6. SEMCO S.A:

SEMCO S.A, founded by Antonio Semler in 1912, was traditionally managed industrial equipment company. SEMCO is located in Sao Paulo, Brazil. Richard Semler, instituted an employee-friendly and employee empowered management system. SEMCO S.A, manufactures pumps used to empty oil tankers, high volume industrial dish washers, cooling units for air conditioners and various types of industrial mixers for the food industry (Maresco,P & York,C, 2005).

SEMCO was originally founded in 1984 as an entity positioned to provide engineering services and management support to the Department of Defence. The entire business base consisted of government contracts, many of which were set-aside for small business and small minority-owned business concerns. As a result of the expanding business base and the growing number of military acquisition programs during the mid-to-late 1980s, SEMCO continued to grow and diversify (SEMCO, 2010).

B7. Solving Problems Innovatively in SEMCO S.A:

At SEMCO S.A., workers set their own production quotas. Employees decide among themselves the best time to come to work. Employees redesign products they make, their work environments, and even formulate their own marketing plans (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Managers run their units with unheard of freedom and determine business strategies without interference from top management. Each division in the company is allowed to set their own salary structure. All financial information is discussed openly and freely. If employees need assistance in making sense of the financials classes are held to assist them in understanding the meaning of the numbers. There are reception desks but no receptionists. There are no secretaries or personal assistants. There are no executive dining rooms and no personalized parking spaces (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

B8. Communication in SEMCO S.A:

SEMCO does not use a formal organizational chart. The underlying assumption is that workers who know and agree with the objectives of their organization will align themselves into teams necessary to maximize their chances of achieving the team's desired goals. One outcome at SEMCO was the quick elimination of nine layers of management. These positions were determined to have had their genesis in the perceived need for more control that arose at various times in the company's history. Once added to the organization chart, they apparently justified their long-term existence solely by playing on fears of imminent structural collapse if they were removed (Maresco,P & York,C, 2005).

B9. Decision making in SEMCO S.A:

SEMCO managers and workers together make decisions; not just the chairman. One of Ricardo Semler's first undertakings was to throw out all the rules. He reduced the layers of management from twelve to three and reduced the "corporate" staff by more than 75%.

At SEMCO the standard policy is to have no policy. For those whose job requires travel there are no travel restrictions other than using your head. There are no departments, no rules, and no audits. The entire budget system has been simplified. What Semler did was to strip away the blind authoritarianism that diminishes productivity. Workers are self-governing and self-managing. In fact, workers have, in most cases, mastered several jobs (Maresco,P & York,C, 2005).

B10. Management Control in SEMCO S.A:

According to Richard Semler, strategic planning and vision are the often barriers to success. In group of six counselors, all take a six-month turn as acting CEO. Meetings are optional and those who attend make decisions and those who not have to live with it. Designs and specifications are shared. Person who knows more about the subject will chair the meeting (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

Second principle being, the person who claims the responsibility will be given the task. Third, profit sharing for employees and success-oriented compensation for satellite enterprises will spread responsibility across the SEMCO map (Cited in Innovation Module Course Notes (Unpublished), University of Wales, Newport, 2010).

C. Indicating the Benefits and Limitations of adopting such management practices in other organisations

C1.

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