Management Is The Cornerstone Of Organisational Effectiveness Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The word management comes from the French "menagment" which is the art of conducting and directing. Management is the organizational process that includes strategic planning, setting; objectives, managing resources, deploying the human and financial assets needed to achieve objectives and measuring results. Management is all about attaining the business goal in an effective and efficient manner. Management is not only limited to specific people in the organization and every employee of the organization is supposed to perform certain functions of the management as part of their job.

Management and Organizations:

In this uncertain economic climate, organizations need strong people to manage and lead the staff in accomplishing the business goals. Managers are more than leaders - they are problem solvers, cheerleaders and planners.

In the current scenario, organizations abound in today's society. Groups of individuals constantly join forces to accomplish common goals. Sometimes the goals of the organizations are for profit but other times the goals are more altruistic. But no matter what the aims and goals are all the organizations share two things in common:

"They are made up of people and some people are in charge of these people."

In today's era one of the prime responsibilities of the manager is to channelize the efforts of the employees in attainment of the self goals and also the goals of the organisation. In essence, managers get the job done through other people.

Intricacies of Management:

In today's changing scenario managers are not only responsible for their own performance but also are held responsible for the performance of the group of individuals.

For example as observed in Mc Donalds, the serving time given to serve a customer is three minutes. In a situation where a customer orders a number of products manager steps in and takes the responsibility of completing the order within the time span of three minutes to ensure the deadline of serving a customer within three minutes is met in any given situation. Hence, the performance of the team is not hampered and efficiency of the employees increases with due course of time.

Levels of Management:

Functions of Managers:

Managers do not perform their responsibilities haphazardly .Effective managers master the five basic functions: planning, organising, staffing, leading and controlling.


This step involves defining goals, establishing strategy and developing sub-plans to coordinate activities.


Determining what needs to be done, how it will be done, and who is to do it.


Directing and motivating all involved parties and resolving conflicts.


Monitoring activities to ensure that they are accomplished as planned.

All these functions lead to achieving the organisation's stated purpose. All managers at all levels of every organization perform these functions, but the amount of time the manager spends on each one depends on both the level of management and the specific organisation.

Source: Chapter1, Stephen P. Robbins, Mary Coulter and Nancy Langton, Management, Eighth Canadian Edition.

Copyright 2005 Pearson Education Canada Inc.

Roles performed by managers:

Managers wear many hats. They perform multi facet roles. They are the role model, planner organiser, cheerleader, mentor, problem solver and decision maker- all rolled into one. In the classic book of Henry Mintzberg - The Nature of Managerial Work, the manger performs ten roles. These roles are classified into three categories:

Interpersonal: Figurehead, leader, liaison. This role involves human interaction.

Informational Roles: Monitor, disseminator, spokesperson. This role involves the sharing and analysing of information.

Decisional: Entrepreneur, disturbance handler, resource allocator, negotiator. This role involves decision making.

Refer to Table 1 in the appendix for the Mintzberg's set of Ten Roles.

Essential Factors affecting Organisational Performance:

In this uncertain economic and social climate there are many factors that affect the organisational performance. Here by we would discuss the key essential factors affecting the overall organisational performance. The most essential factors are Leadership, Motivation, Organisational Culture and Knowledge Management.


Leadership is the prime factor affecting the success or failure of organisations. It is the process in which one individual exerts influence over others. . Leadership is a process that enables a person to influence others to achieve a goal and directs an organisation to become rational and consistent. In organisations where there is faith in the leaders, employees will look towards the leaders for almost everything. During drastic change in times, employees will perceive leadership as supportive, concerned and committed to their welfare, while at the same time recognising that tough decisions need to be made. True leadership states that leadership skills can be mastered by people who wish to become leaders. The two very important components of effective leadership: One is belief and confidence in leadership, which is an indicator of employee satisfaction in the organization. The second is effective communication by the leadership in making the employees understand the business strategy, helping them understand and contribute to the achievement of the organisation's business objectives and sharing information about organisation with the employees for their benefit and guidance.

For example: The well known entrepreneur Narayana Murthy turned his small software venture started in 1981 with his friends into a great name on the map of the world. Infosys grew rapidly by leaps and bounds in the 1990's.Narayana Murthy introduced a program through which he distributed the company's profit amongst his employees practicing corporate governance practices. Through this he earned trust, praise and respect. In 1999,it became the first Indian company to be introduced on the Nasdaq Stock Market. By 2000 Infosys made its presence on the globe. Narayana Murthy with his exceptional leadership nurtured the organisation to become one of the most respected across the globe. His strong value systems, high ethical values and a nurturing atmosphere at the organisation lead to the success. Narayana Murthy's leadership style not only had many firsts to his credit but he also championed corporate governance. From the beginning, Narayana Murthy focused on the most challenging market of those times The United States. In order to keep up the pace of growth of Infosys and manage the same he set up a Leadership Institute in Mysore, India. Commenting on the institute, Narayana Murthy said, "It is our vision at Infosys, to create world-class leaders who will be at the forefront of business and technology in today's competitive marketplace.


Motivation is a catalyst to move individuals toward goals. Motivation is the processes that account for an individual's intensity, direction, and persistence of effort toward attaining a goal. According to Lowell "Motivation may be defined more formally as a psychological or internal process initiated by some need, which leads to the activity which will satisfy that need." Motivational factors differ from person to person. According to Abraham Maslow there are five levels of human needs which need to fulfill for individuals at work. According to this theory the needs are structured into a hierarchy which starts at the lowest level of need when it is fully met, would a worker be motivated by the opportunity of having the next need up in the hierarchy satisfied.

According to Herzberg (1987) there are two main factors of motivation: Contextual factors and Descriptive factors. Contextual factors are factors like salaries, working conditions, organisation strategy etc. Descriptive factors are threats, opportunities, competences, sense of belonging etc. Motivation factors that are affective and effective in one employee or in a group of employees may not be affective or effective in others. This is an area where study and feedback will have to be carried out.

For example: The chief executive officer of Starbucks corporation, Howard Schultz, considers that the tip of success in Starbucks is not coffee but employees. Constantly accumulating the working experience of the employees and providing chances of promotion in a company of working partners is the way to operate sustainability. He firmly believes that the spirit of Starbucks is employees and feels honoured about the value of Starbucks employees. For this reason, it is necessary to have a perfect education and training policy for better performance in a company (Michelli, 2006). Starbucks offers an interactive structure that makes personnel instill themselves into their job; hence they can motivate partners to satisfy themselves then achieving a new level of performance.

Organisational Culture:

Since the past 25 years the concept of organisational culture has been widely accepted to understand human systems. It is a valuable analytical tool in its own right. Organisational Culture is the totality of beliefs, customs, traditions and values shared by the members of the organisation. Each aspect of organisational culture can be seen as an important environmental condition affecting the systems and its subsystems. Edgar Schein, one of the theorists of organisational culture, gave a general definition:

"The culture of a group can be defines as: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaption and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. (Schein 373-374)"

The nature of the organisational culture decides the degree to which the desired results from the employees are obtained. The individual perceptions of the members of the organisation determine the various types of organisational culture, individuals with realm of universal truths and are broad enough to accommodate any variety of circumstance. The primary components of organisational culture are:

a) Primary value of the organisation

b) Existing management styles and systems.

These components contribute to the degree to which the desired result from the employees is obtained. The direction in which the organisations move in the future is highly determined by the value system to which the employees support directly or indirectly or by their behaviour. A strong organisational culture contributes to the better performance of the employees. The behaviour of the employees is an analytical tool to determine an effective organisational culture which includes a system of informal rules .Culture helps the organisation to achieve the desired goals. The organisational culture acts as a motivating factor to enhance their own and organisational performance.

For Example: In Hewlett Packard problems several years ago encouraged HP to change its culture; staff are required to formulate three personal and three professional goals each year, and are encouraged to cheer those that meet them, such as getting away early to be with family. Two years into the program, HP reports no loss in productivity despite staff working shorter hours and there is an increased staff retention rate. The program has been marked by the extent to which managers bought in, and modeled it in their personal lives.

Sadri, G., Lees, B. (2001),"Developing corporate culture as a competitive advantage", Journal of Management Development, Vol. 20 No.10, pp.853.

Knowledge Management:

The concept of knowledge management is came into existence in the early 1998, it is a concept in which an organisation deliberately gathers, organizes, shares and analysis its knowledge in terms of resources, documents and people skills. As a result of technology advancement the way we access and share information has changed; in the current scenario many organisations have knowledge management frameworks in place. Knowledge Management has become a valuable business tool; its complexity is often vexing and as a field, will still be under development for a long time to come. Knowledge management will be integrated into the basket of effective management tools. The objective of Knowledge Management is to build and exploit intellectual capital in an effective and profitable manner.

For example: Chester Carlson invented the photocopy machine in 1938.Xerox Corporation came into existence in 1961.Over the years, Xerox diversified into various different businesses, some of these added value to its business model and others which had to be liquidated. In the mid -1990's, the company was repositioned itself as "Document Company" to better reflect its core business. In the 1990's the company started to focus on knowledge management and knowledge sharing initiatives. They started a programme called "Eureka" which captured the tips shared informally by the company's service reps and created a database of tips that could be accessed by reps all over the world. Other initiatives, both internal and commercial, also followed and Xerox was recognized as one of the "Most Admired Knowledge Enterprises in the world".

Obstacles of Organisational Performance:

Change of Management:

Resistance to change is an integral part of human behavior. It can be defined as an individual or group engaging in acts to disrupt an attempt to introduce change. Resistance has many different forms: from disheartenment of change initiatives, lack of trust, lack of co-operation etc. The reasons for resistance are loss of control, threat to status, ambiguity etc. Change of management often results in change in organisational structure, teams and working environments.

For example: As observed in the case study: The Rise and fall of the HP Way:

The owners of HP Bill Hewlett and Dave Packard had a legendary management style that lead to the success of the multi -billion dollar tech giant-it was the HP Way. After the demises of Packard in 1996 and Hewlett in 2001, respectively the times had changed. After the merger of Compaq and HP, it was considered to be the end of HP Way. As proclaimed by one of the employees Carl Cottrell "HP Way was the way of life. We used to eat, sleep and breathe HP". In 1999, Carly Fiorina, former head of HP's European division was hired as the Chairman and CEO of HP. She was unaware of the HP Way. She had a different style of management. She was accused of mishandling layoffs, valuing profits more than the employees and creating a "cult of personality". There was a wave of fear among the employees that did not occur before. Even the former employees had complete disregard for her way of handling the company.

This is a true example of how change of management resulted into negative impacts within the company.

Lack of Communication:

Effective communication is the life line of every organisation. Employee morale, performance, trust are directly influenced by communication. Effective communication can boost up the execution of business strategy, maximize efficiency and company operations contributing to the overall success of the organisation. Communication is the only way for information to be effectively spread throughout the organisations so that everybody can be informed to the degree that they required to achieve their goals. As seen in the case of Lehman Brothers the main reason for the downfall of Lehman brothers was the lack of communication between the regulatory bodies the SEC and the FRBNY. These regulatory bodies failed to share the information about Lehman's liquidity and Lehman's encumbered collateral in its liquidity pool. The regulators were not fully engaged and did not direct Lehman Brother's to alter the conduct which ultimately led to ruining the organisation.

Recommendations to overcome the obstacles to enhance the organisational performance:

Identification of Activities:

In order to have an effective organising process, the management must identify the series of tasks to be carried out to achieve the business objectives. It is important to take care of all the main and interrelated activities. It is important to keep in mind the objectives to be achieved when identifying the tasks to be performed. The total workload should be divided into tasks that can be logically performed by skilled individuals.

Adam Smith's wealth of the nation opens with a full passage on the specialization of labour in manufacturing of pins."One draws the wire, another straightens it, the third cuts it, a fourth points it, a fifth grinds it at top fro receiving the head."Ten men working in this fashion made 48000pins in one day , but if they are working separately they end on producing just 20 pins in a day. The greatest advantage is the division of objectives into small tasks that increases the performance.

Employee Engagement:

According to one of the research the employee satisfaction is linked to customer satisfaction the ultimately lead to the success of the organisation. In 2007, Towers Perrin conducted a survey with 90,000 employees worldwide they found that there is direct correlation in the company's financial performance and employee engagement levels. Employee engagement acts as an common thread between the senior management and employees giving them the trust that the senior management is sincerely interested in their well being. As seen in the case study of The Rise And Fall of HP Way: At HP the it was all about "integrity" "trust" and "team". HP had a business strategy of helping its employees how their work contributes to the overall success but also asking their feedback which gave the company an opportunity to factor their inputs into the business decisions. HP has a trend of taking formal feedback through the annual voice of the workforce global survey and regular pulse surveys on specific issues. The owners of HP roamed around the halls, talking with their employees about their projects, how employees put on annual skits where they ribbed their bosses including Bill and Dave; how co-workers were reassigned to new jobs rather than fired; how the company for a time implemented a shortened work week for all employees so certain individuals would not lose their jobs.

Hence, as we know rest is all history how this company grow to becomea multi-billion dollar tech giant.

Performance Appraisal:

Performance appraisal processes are one of the centre pillars of the performance management which is directly proportional to the organisational performance. Performance appraisal has a direct impact on the organisational performance. Appraisal contribute to employee satisfaction which in turn contribute to their improved performance. Performance appraisal not only contributes to the achievement of organisational goals but also facilitates the optimal use of the organisational resources. It also increases the degree of commitment of the employee. It acts as a motivational tool to communicating the performance expectations to the employees and giving them feedback. As observed there are various tools to measure the performance appraisal for example: Hp uses Management by Objectives (MBO) . As a appraisal system it starts with job description and job planning. It involves the co-operation between the management and the employee. The performance plan created by manager and the employee is then used in the performance evaluation process. HP was able to use MBO to support the culture that it promotes and to encourage the employees to take initiative in performance planning. MBO Is an effective tool in empowering employees and making sure that they perform to their best ability. Hence, this also helps HP to abide by is HP Way philosophy.

In this economic climate and changing times the management plays an important in the organisations in moulding the employees to the success of the organisations objectives and goals. Management is the soul of the organisation. Management comprises of people that lead, guide and shape the organisation. Management is the organisations co-ordinate all the activities in the organisation to achieve the clearly defined objectives. Management is required to increase the effectiveness of the organisation as a whole. Management works for the benefit of the employees and the organisation to achieve the it respective goals at the same time.

Management brings the factors of systematic labour, leadership and predicting in the controlling of decisions. As mentioned management has five functions: planning, organising, staffing, leading and controlling. Management is the bridge between employees and proprietors. Managers act as first point of contact for the clients and employees. Without management, there would be no one to deal with the issues that arise in businesses.

Flat management structures are not very successful in large organisations on contrary to that of small companies. When a company reaches an entity it is difficult to survive with a flat structure as it tends on resulting into negative impact on productivity with loss of control. These structures are not applicable in organisations that are geographically distributed due a number of reasons like management of suppliers, assigning tasks according to the constraints and priorities, smooth execution of day to day functions and activities of the organisations etc.

The role of management is critical to the success of the organisation. The factors of management that contribute to the success of the organisations are goal setting, leadership, delegation skills.

For instance, as we have observed in the case of Citibank after the massive downsizing there was fear and low morale among the employees. Due to competitive forces and the uncertainties prevailing in the times Citibank was undergoing change and reorganization. It was involved in ongoing mergers and acquisitions. But in the difficult times the management of the company did not give off on the employees it developed a theory "Love not Fear".

Due to the mergers activities the Internal Information Systems department went through job cuts and layoffs. One of the large departments lost 25% of their workforce as a result of these activities. The management of this particular department played a very crucial role in keeping the rest of the employees which were left motivated and united.

In order to do so the management reorganized employees into a "work team "structure and focused them on key internal business units. But in spite of all the efforts there were concerns on performance, poor levels of teamwork, finger pointing and blame fixing and disorganised approaches of servicing the business unit customers. There was a wave of mistrust among the management and the co-workers.

They used consultants from the Inner Work Company to meet the Chief Information Officer and the Department manager over the concerns. The consultants then used the Transformation Project approach to design a solution over a six-month time span. They formulated strategy of encouraging and motivating the Department management first. In order to define and guide the effort they encouraged the Department managers to organise small leadership team, called the "Guidance Team". Then they developed a three day off site program to deliver a integrated curriculum of Self Change, Team Change and Business Change programs. In order to give deep understanding and learning of the program and accelerate the "turn around" process four one-day monthly training sessions were held onsite.

After this initiative came into place they had factors to measure the success. These measures involved twelve key behavioural aspects of individuals and team performance. They had also assigned three business measures: reduction in software development time; increase in mainframe system uptime; increase in work time productivity.

There were concerns about various issues that may arise like resolving conflicts between key people, stress, and life balance coaching, facilitation of identifying and resolving the customer concerns improvement activities on two key processes. Hence, the Inner Work had to provide coaching on needed basis through a six-month period.

Results of the Initiative:

The launch of the program received an awe-inspiring response of 75% of the department participating in the program. In due course of six months the department experienced a huge up gradation in their performance internally and with their business unit customers. There was a paradigm shift in the culture of the department the attitudes of the surviving people shifted from "we are the survivors" to "we can make things happen". Inner Work consultants also created a workplace community in which they had social outings and numerous other projects.

There were numerous enhancements in the behavioural changes and business results , which were commendable.

•76% increase in trust levels

• 32% - 85% increases in various measures of team effectiveness (problem solving, team cohesion,

team communication, risk-taking, team accountability, conflict resolution, team support, customer


• 48% increase in open, honest communication (a key factor on building trust)

• 75% increase in personal power / ability to respond to change

• 68% increase in personal emotional mastery

• 65% reduction in stress

• 75% increase in commitment to the organization

• 75% reduction in cycle time for software development;

• an increase in mainframe system uptime from 92% to 99%;

• 33% - 50% increase in work team productivity

Hence,this depicts that the management works a s the soul of the organisation .Just by the initiatives of the department manager not only were able to achieve their business objectives and goals were even able to align them with the expectation of the employees , giving them new hope, high morale , trust to continue as inspired to people to the accomplishment of their objectives and goals.