Criticisms Of Management Cornerstones Of Organisational Effectiveness Commerce Essay


In this globalized world, Organisations face intense challenges as they are required to generate more revenue than yester years. Every organisation wants to see an increment in their revenue and with the ever changing nature of business environment it becomes difficult for the organisations. In order to achieve the objective of maximizing revenue, it's very important for an organisation to manage its resources efficiently whether it is raw materials, technical resources or people. Management is nothing but a process of achieving effectiveness in an organisation in changing environment by balancing efficiency and equity and ensuring optimum utilisation of available resources. Management is about getting things done. Organizations can be viewed as systems and management is the human action, including design, to facilitate the production of useful outcomes from a system. Management comprises of organizing, planning, controlling, and directing the firm's resources to achieve the policy's objectives. It is the responsibility of management to ensure that the company is making profit, resources are utilised optimally and the employees are satisfied with their job. A manager's task involves planning for the future by anticipating changes in the external environment, organising people and allocating resources to them and motivating them to attain organisational goals. Good management is essential for any type of organisation, be it an industrial firm, government agency or a non- profit organization.

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1. Leadership: Leadership is the art of motivating a group of people to act towards achieving a common goal. It is the process in which one individual exerts influence over others. Leadership is a power that grows out of personal characteristics such as charisma, expertise and interpersonal skills. Leadership is about "doing the right things". It's about effectiveness. There is often a debate if Leaders are born or made. Well Leadership is a quality that comes from experience and learning. Now-a-days Leadership has become a crucial factor on which the success of an organization depends that's why many companies in U.S are switching to the self managing teams to deal with the changing nature of business environment.

A leader is the inspiration and director of the action. A leader is a motivator, dominator, director and a controller. A leader is the one who directs the actions of the team members. He should have a never say die attitude because if he gives up then the entire team will collapse. A person may be appointed as a leader or may be elected by a group of people. Leaders play a crucial role in standardizing the performance of his team. Leaders can influence others to perform beyond expectations. Leaders are also called as agents of change. A leader must have the ability to only think about succeeding and concentrating on the task at hand. He should never think about failing and must keep a positive mentality. A leader must have good interpersonal skills. He must be able to deal with the conflict that could arise between team members. The leaders must know their personal strengths and weaknesses as well as their team members. By knowing this, the leader will know how to motivate the team players in order to get the best out of him. A leader must be open to feedback. He should be able to give feedback to his players and also be open to feedback from them." Leadership is all about understanding your team and directing their skills to achieve the goals of the team", these are words said by Paolo Maldini, former AC Milan Football Club Captain who has played more than 800 matches for his club and has been the captain of the second most successful European club for over 10 years.

The case study of the virtual team in ComCorp shows how important Leadership is, in the performance of an organisation. Comcorp was a high-tech computer networking industry which was challenged by the turmoil associated with deregulation of the telecommunications industry and decreased capital expenditure on buying computers. ComCorp's revenue was declining and there was immense pressure on the company to downsize its operation. A virtual team was formed to solve major problems, and make decisions. The challenge for the virtual team was to rebuild the credibility of the team at a time where every sector of the department was closely examined as ComCorp was looking to reduce the cost. And because of effective leadership, it was possible for the Virtual team to become successful. The team were able to build the credibility of the organisation and adjust with the fast changing environment.

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2. Team Work: Teamwork is defined by Scarnati (2001, p. 5) "as a cooperative process that allows ordinary people to achieve extraordinary results". Teams and teamwork help to promote deep learning that occurs through interaction, problem solving, dialogue, cooperation and collaboration (Johnson & Johnson, 1995). Teamwork replies upon individuals working together in a cooperative environment to achieve common team goals through sharing knowledge and skills. Successful teamwork relies upon synergism existing between all team members creating an environment where they are all willing to contribute and participate in order to promote and nurture a positive, effective team environment. The highest priority for team members is achieving the team's goals. There may be team members who have strong personalities, possess highly specialized skills, and commit themselves to a variety of personal objectives-but the most important thing is the success of the group. To function effectively, members of a team must be flexible, trust one another, and wholeheartedly support every member of the group in its progress toward achieving its goals. When team members work well together, collaboration is a big advantage People want to work well together and support one another because they identify with the team. They want the team to succeed. Individual competitiveness is reduced. To succeed at a particular task everyone involved needs to combine their efforts. In an organisation, in every sector there are teams. These can be the HR team, IT team, Operations team, Finance, Logistics etc. Every individual does not have the same level of skills and knowledge. Hence by working in a team, the knowledge can be shared & members can learn from each other. Tasks can be assigned on the basis of skills and knowledge. For instance, if a team have been given the task of doing a research on a company's failing product and to prepare a report explaining the reasons for the failure, players who have good knowledge about the product can do the research work and players who have good report making skills can prepare the report. In 2007/08, when Manchester United won the UEFA Champions league, Sir Alex Ferguson said that It was only because of the team work that they won the title. He said every player knew his as well as others role, strength and weaknesses. In short TEAM can be defined as Together Everyone Achieves More.

The case study of the students in the multimedia course at Edith Cowan University shows how important is teamwork in an organisation. One team was highly successful in developing a quality product while the other team was not. The members of the team which was successful understood the purpose of forming a team and shared their goals. They were committed to the team success. The members were unified and shared strong values and beliefs. On the other hand, the members of the unsuccessful team were not unified, they dint share goals and practices. There was a lack of co-operation and a feeling of disempowerment. Team members showed little consideration for each other and dint support each other. There was no respect for each other's feelings leading to failure of the team.

3. Motivation: Organisation is made up of people. If one has to ensure that an organisation performs effectively he/ she has to make sure that employees perform effectively. Motivation is to stimulate desire in people to continuously perform in a job or role & to exert persistent effort in attaining a goal. Motivation releases pressure on the employees.

An organisation has to engage its employees in its operations and activities to achieve a highly productive business. Hence, Motivation of employees plays a significant role in the success of an organisation. If we look at the achievement of companies like Google, Apple & Microsoft, we can say the company is successful because its employees are motivated and happy in what they are doing. Motivation is a process that is initiated by a physiological or psychological deficiency or need, which triggers a specific behaviour or drive in order to achieve a goal or incentive. Theodore Roosevelt once said that "People ask the difference between a leader and a boss. The leader works in the open, and the boss in covert. The leader leads, and the boss drives." All employees are not same in terms of their working style & capabilities. They have to be handled effectively to get the best out of them. For some employees motivation can be appreciation, for some it can be recognition or some need monetary benefits. An employee or a team in an organisation know what their goals are, Motivation is a push to achieve their goals. Well know about the great Indian Cricketer Sachin Tendulkar, he was left out of the team in the year 2006 because of his bad performance but when he got the opportunity to play again, he performed brilliantly to slam his critics. When interviewed, he said that it was the motivation from his family and his team members that gave him the confidence and the strength to prove himself. And no doubt, He is the regarded as one of the best cricketers of all time.

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The case study of Barclays PLC shows how Motivation can play an important role in smooth functioning of an organisation. Barclays PLC, a global financial services provider acquired Lehman Brothers in 2008.The integration of the US businesses of the Lehmann Brothers was done quickly which lead to resignation of many Lehman Brothers employees. The organisation cultures of both the companies were different. The Lehmann Brothers staff was not very happy as their company was acquired by a similar financial services provider. Lehman staff was de-motivated because of the failure of the bank but the integration of the Lehman staff into the Barclays business also placed a large uncertainty in the staff. There was uncertainty in terms of their role in the new organisation (Barclays). From this case study, we see that motivating the employees in an important factor in maintaining effective performance of an organisation. Barclays PLC did not motivate the Lehmann staff properly which lead to dissatisfaction and also departure of many employees. If Barclays would have motivated the Lehmann staff by involving them in management and by explaining their role it would have been a different story. Motivation increases the organisational commitment of the employees. Barclays' leaders should have focused on initiating actions that would lead to increase organisational commitment from Lehman staff. It's not only the leaders and the managers that can who can motivate employees; employees at the same levels can also motivate each other.

4. Knowledge Management: Knowledge Management is a set of business processes developed in an organisation to create, store, transfer and apply knowledge. In simple words, it is the process by which an organisation manages data and information. Now-a-days knowledge management is becoming widely accepted however few managers today are fully capable of developing and leveraging critical organizational knowledge to improve their performance. Many organisations have become so vast and complex that their knowledge is fragmented, difficult to locate and share, and hence inconsistent or not used at all. In today's rapidly changing environment, even knowledge and expertise that can be shared is often made obsolete. Knowledge Management comprises a range of practices used to identify, sort and distribute data throughout the organisation. Knowledge Management is the best way for organizations to gain and sustain competitive advantage in the knowledge-based economy.

Knowledge management means different things to different people. It's basically a "a conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance". Knowledge management refers to the ability to develop, share, deposit, extract, and deliver knowledge such that it may be retrieved and used to make decisions or to support the processes". Effective knowledge management translates into competitive advantage and profits.

Most managers of organizations today do not know what specific kinds of

knowledge the individuals in their organization know. As firms become larger,

more knowledge intensive, and more globally dispersed, the need for their managers to

"know what we know" is becoming acute.

Knowledge Management has four stages and each stage adds value to the data and information as they are transformed into useful knowledge.

Knowledge Acquisition - Knowledge acquisition includes the collection, analysis, modelling and validation of knowledge. Knowledge are of two types namely tacit knowledge and explicit knowledge. Tacit knowledge are intangible like experience, learning, skills etc. Explicit knowledge is a tangible like reports, presentations, documents etc.

Knowledge storage - Knowledge storage is the process of storing the knowledge i.e both tacit and explicit so that it can be sorted, structured and analyzed. Organisations use databases and document management systems for knowledge storage.

Knowledge Dissemination - Knowledge Dissemination is the process of distributing the knowledge after structuring and analysing. Organisation use portals, blogs, search engines and email reports for disseminating the knowledge.

Knowledge Application - Knowledge Application is about implementing new practices, developing new products and services using the knowledge which was acquired, store and disseminated.

Let's have a look at a case study of Skandinaviska Enskilda Banken (SEB) to understand the importance of knowledge management in financial services. SEB a North-European financial group for corporate customers, institutions and private individuals with headquarters in Stockholm, Sweden. SEB's objective was to understand better how the bank could use the knowledge of its employees, and then determine if that knowledge was capable of fulfilling the business goals. Before the year 1998, every area of business within the bank had its own procedure for developing and analysing its Human Resource skills. A companywide competency development brought together best practices in HR across the bank which has been contributed to the success of the bank to a great extent.

5. Human Resource Management: Human Resource Management (HRM) is the function within an organisation that focuses on recruitment, management of, and to provide the direction for the people who work in the organisation. Human Resource Management is the function that deals with issues related to people like recruitment, performance management, employee motivation, compensation and training.

85% of all firms in UK are service based. Service is delivered by the people. It is very important that the company selects the right people and gives them the right kind of training in order to make sure that the employees deliver the right type of service.

Now that we have discussed the factors that determine the successful performance of work organisations, we will also have a look at the barriers to effective performance of an organisation and how we can overcome them.

Cultural Differences: Organisational culture is the way work is performed in a particular organisation. It can also be defined as the the collection of traditions, values, beliefs, and attitudes in an organisation. For some organizations, Culture is the glue that holds an organisation together and for some it is a compass that provides direction. It's said that culture in an organisation is an outcome of development over the years whose seeds are sown at the time when the organisation comes into existence. The culture of an organisation directly influences its decision and actions.

Culture becomes an obstacle in the performance of an organisation when an organisation looks for expansion. Let's have a look at a case study that shows cultural clash within an organisation. The case study is about Siemens. Siemens's Chief Executive Klaus Kleinfeld took over the Munich electronics and engineering and expanded both sales and profits faster than GE in 2006. But instead of employees praising him, they were angry and were demonstrating outside his window. The reason why they were unhappy was because Kleinsfield was trying to change their working culture. This shows that how culture can be an obstacle in the effective performance of an organisation.

Lack of Communication: Effective communication is an important element of efficient organisational performance. Many problems arise because of the lack of effective communication. Just like in any relationship, Communication is the key to a strong business relationship. This can be relationship between business and the customer or between different employees in the organisation. In many organisations, employees at the lower level do not know what's going on in the organisation as the management does not communicate with them effectively. A lack of workplace communication can lead to such things as gossip, resentment and high staff turnover. There is lot of emphasis given to Coaching in many organisations as it is a two way communication in which both the parties share their knowledge, understanding and practices. However, in countries like India & China there are organisations that do not encourage a two way communication. It can put the employee in trouble if he/ she give some negative feedback about the manager or any senior level employee. Also, the way in which people communicate can be the cause of ineffective communication. Even if the person with the information thinks that he/she has shared the information with all of the right people, this may not be true. Some people are better with their communication compared to others and when someone who struggles to explain the necessary information, this causes a problem. 

Lack of motivation: Motivation is the key factor in the performance of an organisation. We all say that technology and proper management are essential factors for the successful performance of an organisation but the most important factor are the employees. Organisations are run by people. People are the face of organisations. If the employees are contented then the organisation will be successful. It has been found in recent surveys that many employees who are paid very well are still not satisfied because of reasons like monotonous work, no challenges, improper supervision and lack of appreciation and recognition. Many people don't get motivated just by high salary and incentives, some people need recognition. For some a pat on the back is enough.

It has been observed that in a multinational Telecom company like Hutchison 3G, motivation determines performance of employees and in turn the performance of the organisation. In their contact centre based in Mumbai, there were 15 teams in the Contract Customer Service Department. There was a team of 12 new employees. All these employees were just 5 to 6 months old in the system and their team was the best performing team from last 2 months. All the other teams were quite tenured but were not able to match their performance. The salaries of the new employees were 25%to 35% less than the tenured ones. When the performing team was interviewed on winning the best team award, they said that their Team Leader is very supportive and motivating and this pushes them to perform well. Also they are self motivated as they want to be recognised. Hence we can say that Motivation is a very important determinant of the performance of an organisation.

Recommendations to deal with the obstacles:

Culture Management: Culture is an important factor in an organisation that has to be effectively managed to ensure smooth it's functioning. If not managed well, it can be a big obstacle in the operations of an organisation. In his book, Organizational Culture and Leadership, the cultural theorist Edgar H. Schein writes: "Culture not only explains many organizational phenomena. It is also something that leaders can manipulate to create a more effective organization." Schein emphasizes that culture can be actively utilised to achieve corporate aims.

Culture can become a big barrier when mergers and acquisitions take place. When two organisations that have different cultures merge then it's difficult to manage the culture because no company wants to change their culture because it's their way to work, their beliefs, attitudes and their behaviour. In the case study of Barclays PLC's acquisition of Lehmann brothers, we says that when Barclays acquired Lehmann there was a clash of culture and it was not managed well by the management which lead to dissatisfaction and also resignation of many employees which badly affected Barclays PLC.

Effective Communication: A manager should make sure one's communication style is effective and positive. If there are any problems, employees should communicate those problems to the supervisors or to the managers in order for the organisation to take measures to fix the problem. Any problem that exists should be communicated to both among the employees and up to supervisors. The atmosphere inside the company should be encouraging for effective communication so that employees realize how important communication is for each staff member and to the company in general. It is very important for communication to be 'two ways', as employees should not only listen, but always have an opportunity, and be encouraged to ask questions, discuss and express own ideas. Feedback mechanisms and sharing of best practices should be an integral part of organizational performance, and performance management system in particular. Management, both higher and lower, should hold regular staff meetings. Regular meetings that encourage input on various issues from all staff members can be an effective way to improve workplace communication. These meetings makes the staff believe that their opinions are valued, which makes them more likely to share their concerns and views. It is also advisable to schedule employee reviews regularly. Regular reviews can be a good opportunity for supervisors and managers to know from the staff the issues affecting their jobs and the workplace. Also while communicating; management needs to minimize the middlemen to make sure that the quality of communication is unaffected.

Proper Motivation: There is a saying "Where there is a will, there is a way". Motivation is the mother of will. With proper motivation one can give rise to a desire to achieve. Many big companies are focusing on employee motivation to achieve their corporate goals. Manager and senior employees should give more responsibilities to the employees to make sure that their task doesn't become monotonous. Employee who is not up to the mark should be shown motivational videos. Managers should regularly speak to them to find out the reason why employees are not performing well and should be motivated accordingly. Employees who get motivated by monetary benefits should be given proper performance based incentives, pay raise and other perquisites. Recreational facilities are also a great way to motivate employees as many employees get bored of their daily work. For some employees, appreciation in front of colleagues and management is enough.

"Management is the cornerstone of organisational effectiveness, and the integrating activity that permeates every facet of the operations of the organisation". Well how true is this statement. In a recent survey conducted in UK's various companies, it was found that less than 40% of employees are satisfied with the management. Not only in UK, It has been observed in developing countries like India that employees of many companies are not contended with their senior management. Many employees complaint that their managers are biased, non co-operative and demanding. Many organisations are still performing well thought the management is not quite efficient. So what is leading the organisations to perform well? It's the Motivation factor that is driving the spirit in the employees. Management, no doubt, is an important factor which contributes to the success of an organisation however it is not the cornerstone of organisational effectiveness. Motivation is the factor that drives an individual to perform in order to achieve certain targets. Motivation can be of types- Extrinsic motivation & intrinsic motivation. Extrinsic motivation is related to tangible rewards like job security, salary, incentives, promotion and working conditions. Intrinsic motivation is related to psychological rewards like opportunity to grow, appreciation and challenges to perform. Every employee is different. Some employees can be motivated by tangible rewards while some just need a word of appreciation.

Outside workplace, employees make important decisions every day. They vote on community issues, they teach their children, they buy new things for their house for their children but at work, how many people are allowed to take their own decisions about their work? How many employees have input into how they do their own jobs, lead a team, find out what their customers need or make decisions about what will be better for their customers? The case study of RL Wolfe shows that nowadays people don't like to work under management. Now day's employees want to be self dependent. They want to take their own decisions. They perform well when they are self directed as there is a better sense of responsibilities and targets. The employees' prefer an open system to ensure continuous improvement and ensure adaptability. Employees must be involved in determining their own job responsibilities and thereby in designing the processes used in the organisation. Management only defines the essentials of processes, leaving task, roles and policies broad and open ended. In self directed teams, workers enjoy because they get to learn and develop skills as there is an increased involvement in decision making and problem solving. Self directed teams are formed on the basis of equality and equity values, leading to flat organisations, few numbers of levels, and a blurred line between management and the workforce. Trust is a key factor here, resulting in less oversight of workers.