Relationship Between Management And The Organisation Commerce Essay

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The relationship between management and the organisation is of utmost importance in determining the organisations' success or failure. Good leaders will contribute to a healthy working environment hence leading to a good business performance.

This report highlights the importance of recruitment and selection of prospect leaders within the organisation. For example, the implementation of the various techniques available during the selection stage, as indicated in Appendix (i), in order to enable the ideal choice of candidate to be appointed for the job.

It also emphasises the importance of the leadership role in creating and developing an appropriate environment at the place of work. This will establish how a good leader accomplishes a good balance of the held knowledge and skills in order to be successful across the organisation.

The main objective for an organisation is to achieve the set goals and that the new product development plan is well administered. Top management can utilize this plan in order to promote innovative products and to keep up to date with the financial services environment.

Furthermore, the report will evaluate any possible impact of the decisions made in the recruitment and selection process upon the stakeholders, market place and the organisation's outcomes.

To ensure ongoing successful business performance, effective leaders will need to continue improving their knowledge and leadership skills through constant training and experiences.

2. Contents

2.1 Question 1: Recruitment and selection of future leaders

2.1.1 Introduction

Today's competitive labour market is making more difficult for financial services organisations to find, recruit and select talented people for the vacant position. There are fewer qualified applicants available and hence the competition for talent is increasing. This shortage of candidates makes it important for organisations to be able to successfully attract, select, and retain quality candidates by offering an attractive remuneration package. Candidates can afford to be choosy when searching for a job because there's a large number of job opportunities currently available in the labour market. They tend to look for various benefits, career development and an environment in which they can learn and thrive.

The recruitment and selection strategy for financial institutions, as indicated in Appendix (i), does not vary too much from any major corporation with a large number of branch locations. For example, a research was conducted to find out how a centralized approach to recruitment is ensuring the HSBC's employees across the US not only to meet expectations, but to 'live the HSBC brand'. At the time of employment, new candidate signs a confidentiality agreement and a certificate of compliance. HSBC rely heavily on prior industry knowledge, work experience and the ability to deliver an existing client network specific to certain positions. Therefore, HSBC is looking for individuals with the ability to be successful and to thrive by demonstrating the brand values in a high-performance culture with aspirations as an employer of choice. In order to ensure the integrity of potential new employees, HSBC utilizes various forms of pre-employment testing including credit checks, drug tests, criminal background checks with fingerprinting, verification of education and employment history, as well as Insurance licensing verification, where appropriate.

It is significant to recruit the right staff since labour represents a high proportion of the organisation's costs. Poor selection can have an impact upon their stakeholders such as customers, staff, shareholders as well as on the profit margin of the organisation itself. Therefore, recruitment and selection are to take the best decision in the interest of the organisation.

It is of utmost important within all processes of recruitment and selection to have a sound knowledge of relevant legislation, in particular, discrimination in order to ensure fair treatment. Therefore, it is illegal to discriminate against people on the basis of sexual orientation, gender, religion, race, beliefs, disability and age.

2.1.2 Findings

Most realistic candidates are likely to possess characteristics such as "integrity" as well as a number of factors that will distinguish the best candidate. Commonly, the required characteristics that are listed, conflict with each other. For example, organisations often say that they want their leaders to be both decisive and consultative. These are both important qualities, but there is a risk that they can neutralize each other as a guide to choose the best candidate. Similarly, it is common to find organisations who say they want leaders who are especially proficient at being active externally such as dealing with clients, shareholders, the media and the community and also be dynamic internally when motivating people and managing the organisation's affairs. Many organisations make lists of the desirable characteristics of a leader in a job description, however failing to recognise that the best set of attitudes, skills and behaviours depend on various factors including the organisation's culture, the specific opportunities and the needs that the organisation faces.

For example, an article highlights a study on the efficiency of conducting a recruitment process in house as applied in the business of Sainsbury's, a food retailer as well as a financial services organisation. The use of this strategy is very cost effective since it provides proper selection of employees according to their personalities and skills that are essential for the operation of the business. Sainsbury's mentions reviews of recruitment and selection process in order to facilitate application and selection procedures for candidates, and the use of online recruitments for the continuation of the project.

It is hard to hold a leader accountable if there is not a clear understanding of the role. Therefore it would be better for all concerned to know in advance what the real expectations are. This seems to be obvious however it is widely ignored in practice. In many organisations and in many countries people are appointed to managerial positions without detailed consideration of the requirements of the role. Many organisations seem to focus mostly on the qualities of candidates, based on a very general job description, rather than establishing priorities among the characteristics needed for the vacant position.

Good leaders inspire others to get things done and lead by example. According to Drucker (1977) the one contribution a manager is expected to make is to give subordinates a vision and ability to perform. So what attributes does it take to achieve this? What are the qualities of a good leader?

Future leaders need to be proactive rather than reactive in order to anticipate what is required, plan ahead to avoid disruption, get things done, employ the right members of the team at the right time and encourage enthusiasm and seeking team participation.

Leaders should know themselves and aware of their strengths and weaknesses as well as the strengths and weaknesses of their team. They need to inspire people to be the best they can be by being a mentor.

A good leader bring together the right people to obtain different points of view, highlight weakness in their team and suggest training to improve those weaknesses. Leaders go the extra mile, for example, it may be giving a member of the team their support over a personal issue, or putting in extra hours to get the job done.

True leaders know their limits and may make the ultimate decision based on relevant information gathered from trusted sources. They need to be visionaries. Through experience, they are able to see creative solutions and constantly seeking and identifying new possibilities and looking for ways to progress those possibilities. In other words, they need to have a track record of generating business and managing people well.

A good leader should focus on preserving the organisation's historical culture against changing the culture to adapt and meet new challenges of the marketplace. Change within a company is what keeps it fresh above its competitors and away from bankruptcy therefore leaders need to adapt easily see change as a challenge.

How do organisations sort through all these different factors and define what makes someone a successful leader before he or she even enters the company? By understanding the different requirements for each role, organisations can recruit effectively, accelerate leadership willingness and build the strength necessary for a high-performance organisation.

For example, the aim of APS Bank Ltd is to select, recruit and retain the best candidates for its vacant post. It operates its recruitment procedures within the framework of the Collective Agreement signed with the Malta Union of Bank Employees (MUBE).The Bank selects its staff on the basis of recruitment criteria that are published in the local media and on the Bank's website from time to time. Appointment is made only after a satisfactory medical examination.

The selection procedure is a two-stage process. The first stage is based on an assessment of information submitted by candidates in their application aligned with the Bank's recruitment criteria for the position. As a result of this process the most suitable candidates are short-listed for the second phase.

In the second stage, the Bank calls short-listed candidates to participate in interviews and other standard recruitment and selection methods including testing and assessment centres.  APS Bank employs professional and up to date assessment methods, including standard testing materials from market leaders in this field.

Applicant's data will be kept on file for future reference and will be destroyed after a period of one year, unless the applicant chooses to maintain the information updated.  The respective data will be kept for recruitment and selection purposes only

2.1.3 Conclusion

Better recruitment and selection strategies will result in successful organisational outcome since selection systems can influence bottom-line business performance. The more effectively the organisation recruit and select leaders, the more likely they are to employ and retain satisfied employees. Hence, investing in the development of a comprehensive and suitable selection system is money well spent.

2.1.4 Recommendations

It's important to establish a competency model that reflects the attributes and skills of successful leaders as defined by the company culture. Organisations need to clearly define the competencies and qualities required for their organisation and job roles to determine which candidates are best-fit.

It is of utmost importance to follow a defined procedure that has been developed by way of best practice in order to ensure that the best person is chosen. Thus, increase in the level of neutrality into that procedure avoids wrong decisions which might be very costly for organisations due to recruitment, inductions, training and existing costs of the failed selection and costs of replacement.

Recruiting effectively and having the right training and development programs in place can improve skills and promote leadership ability. Having the right team in an organisation with fully motivated staff and great leadership qualities can only enhance the organisation's reputation, productivity and performance.

2.2 Question 2: The importance of the leadership role in relation to the organisational culture

2.2.1 Introduction

Leadership involves the coordination and guidance of people's activities and their efforts towards achieving the goals and objectives of the organisation. It is about determination, personality and intrinsic capability at the right time for a particular competitive situation. Many future leaders in any organisations need to answer some questions in order to be successful such as, what is the organisation's vision? What are the organisations' current capabilities? How effectively is communication?

Today, leadership is associated with the concept of teamwork rather than with orders and control since it is the main element for effective organisational performance. For this to happen, a leader should adopt an open leadership culture through the organisation where people are encouraged to take personal responsibility and are not afraid to speak up with new ideas or take risks. Organisations interested in developing effective leaders often use studies, which have been conducted to understand leadership nature, as the basis for leadership development activities.

2.2.2 Findings

Attention needs to be given to the criteria for leadership effectiveness and to the leadership development. For example, Mr Cassar, First Executive Vice President and Chief Financial Officer of FIMBank plc said that, previously, metrics focused on employee turnover, recruitment, staff retention and training and development. However, they are now more aligned to business strategy and the personal goals set. This is done through a Performance Management Strategy such as the 360 degrees feedback and the use of balanced scorecards

Leaders of the future will face new expectations and will need to learn new set of skills. For example, there are many factors that could influence the type of culture and structure of the organisation including, the history of the organisation, the size, the technology available, the goals and objectives and the environment in which the organisation operates. A good leader needs to create a culture to achieve organisation's goals such as mission statement and the main strategic goals of the organisation.

Due to its complex nature there are many alternative ways of analysing leadership. Leadership may be observed in terms of the qualities or traits approach; the functional or group approach; as a behavioural category; styles of leadership; through the situational approach and contingency models and the distinction between transactional or transformational leadership.

Leadership involves influencing others to act in order to achieve goals. Therefore, leaders rely on five types of power to influence others including legitimate, reward, coercive, referent and expert. Effective use of power for the long term results in followers who will be committed to the leader's goals and objectives. The improper use of power may result in simple agreement or even resistance.

Traits consist of the personal characteristics of individuals, including their physical, social and personal attributes that distinguish leaders form nonleaders. These traits focus on the person in the job and not on the job itself. It is often associated with ethical leadership including, honesty, trustworthiness and integrity. In this regard, the leader's role is to guide the human potential of the organisation's stakeholders in order to achieve organisational goals. The leader must employ the authority and recognising the knowledge needed to implement this authority throughout the organisation and its environment. If the culture allows the organisation to learn and grow within its environment, leadership may be largely inspirational. On the other hand, if the culture does not support organisational learning and growth within that environment, then manipulative leadership would be necessary. Leaders must make their roles as integrity supporters or otherwise their examples will be lost in the pressures of day-to-day life.

Behavioural models of leadership provide a way of identifying effective leaders by their actions. The Theory X and Theory Y model states that leaders' behaviours reflect their basic assumptions about people. Theory X and Theory Y represent two different ways that leaders view their subordinates and therefore manage them. They provide the basis for developing the importance of leadership style such as Autocratic, participative, democratic and laissez-faire. Although democratic is viewed as the ideal leadership style to strive for, all team leaders need to be aware of the most appropriate and effective leadership style to use according to the situation with which they are faced , since changing the leadership style can be quite a complex process.

Transformational leadership is a process of generating motivation and commitment, creating a vision for transforming the performance of the organisation and express confidence in followers. Additionally, transformational leaders are willing to change the organisational culture while transactional leaders tend to operate within the limits of the organisation as well as within the existing culture.

How will a good leader achieve a good balance of the skills in order to be successful across the organisation? There are many variables affecting leadership effectiveness. The main aspects to be considered are the group and the work environment. In the successful acquisition, leaders must follow rules in order to prosper in today's changing environment. Peter Drucker in his book 'Managing in a Time of Great Change' identified what he called the 'Five Deadly Business Sins' that examines common ease on organizational effectiveness as well as came across at different ways businesses can cut costs while actually improving workforce motivation. (Drucker, 1995)

Leaders make things happen by knowing the organisation's objectives and having a plan how to achieve them, building a team committed to achieving the set objectives and helping each team member to give their best efforts.

Good leadership principles must cascade down through the whole organisation. This means that when leading an organisation a leader must check that the processes for managing, communicating and developing people are in place and working properly.

Management must modify the planning activities to encourage goal congruence at all management levels. Goal congruence is achieved because leaders either agree with the goals or decide to put the goals in front of their own personal preferences. Without goal congruence, without unity of purpose, a team is simply more likely to fail than to succeed. To achieve goal congruence personnel cannot be viewed as people sharing the same goal, but also as people striving for such rewards such as power, security, survival, and autonomy. There are many factors influencing goal congruence including, external factors such as attitudes of society and internal factors such as culture and management style. While profit maximization has long been considered as an important goal of the firm, in reality, organisations pursue range of goals. For example an organisation may emphasizing that organisational performance can be measured in the following areas such as profitability, market position, product leadership, personnel development, social responsibility, and a balance between short-and long term goals. . Everyone needs to clearly understand the risks, the reward, the goals of the business and the effort required, and be willing to do their part to make it happen. Therefore, it important that the organisation's corporate goals can be communicated by budgets, organization charts, and job descriptions. In fact budgets may be considered as the key mechanism and an important medium of communication at all levels of the organisation.

Keeping followers motivated and committed in a time of constant change, means that leaders must be able to create organisational cultures that promote not only performance but also a sense of pride. Due to the fact that cultures develop over many years and are usually inherent, they can be difficult to change. It has been observed that it is easier to change behaviour by changing processes and systems in an organisation rather than to change people's attitudes.

2.2.3 Conclusion

There is no one best form of style of leadership. The most successful form of leadership behaviour is a product of the total leadership situations. In between these extremes, ethical leadership balances achieving the organisational aspirations that are realistically attainable at this time with developing the organisational culture over time. The specific culture required, and the challenges it must face, will be suggested by the nature of its essential social responsibility and dynamics of its larger community.

2.2.4 Recommendations

Leaders of the future will need to work within less hierarchical based systems of command and control. The ideal is to inspire others as a steward of the vision, values, and excellence of the organisation, as reflected in its culture. Without proper leadership skills, a leader may not be able to manage a large team and drive them to achieve the objectives. It has been recommended that different styles of leadership are necessary to maintain or implement change in the organisational culture that is optimal for it to survive and thrive within the organisation's context.


2.3 Question 3

2.3.1 Introduction

Leaders affect innovation through organisational design and must create appropriate organisational environments to suit the different innovation processes. The primary challenges for organisational leaders in promoting innovation are:

Recognise and develop appropriate leadership for different stages of the innovation process and

create an organisational contexts that support complete innovation processes of different degrees of novelty.

A primary challenge for organisational leaders in promoting innovation is:

Recognise and develop appropriate leadership for the different stages of the innovation process. How leaders are selected, supported, evaluated, motivated and developed is likely to differ depending upon the stage of the innovation process they Are responsible for . for instance, transformational leadership skills may be more useful in early stage innovation activity such as R & D and product development, but transactional leadership skills are also essential to the smooth functioning of commercial ism

Drucker goes on to suggest key area in which objectives should be set in terms of performance and results, innovations: for example: innovations to reach marketing goals; developments arising from technological advancements; new processes and improvements in all major areas of organisational activity

The importance of innovation:

Mann draws attention to innovation as the key to long term success and what leaders of best practice organisations do that is different, they

1. Ensure they have a vision, mission and strategy that are known and understood

2. oversea the setting of demanding but realistic targets

3. set examples in generating an open, communicative management style.

4. champion a culture conductive to learning and continuous improvement

5. distribute leadership responsibilities with the necessary authority, training and resources.

Lucas reports on the crutial role of managers as the single most important factor in the success of innovation initiatives. This requires a leader and team with the ability and passion to turn ideas into business reality. Manager need to be willing to give agenda time and innovation.

Organisational innovativeness encompasses the ability to nurture and use natural creativity, develop new ideas and bring them to life.

A key factor in organisational effectiveness is the successful management of change and innovation and the concept of learning organisation. One particular approach to improved organisational effectiveness is total quality management TQM . the successful organisation should as a matter of policy be constantly seeking opportunities to improve the quality of its product and or services and processes.

2.3.2 Findings

2.3.3 Conclusion

2.3.4 Recommendations

3. Conclusion

4. Recommendations

5. Bibliography

5.1 Books

Mullins, L J (2010) Management and Organisational Behaviour, 9 th edition, FT Prentice Hall.

Croft, L and Norton, A (2007) 'Human Resource management and people resourcing', Organisation Management in Financial Services, Edinburgh, CAPDM, pp. 7- 17.

Hellriegel, D and Jackson, S E and Slocum, J W (2002) Management: A Competency- Based Approach, 9 th edition, TL South Western.

Kotler, P and Armstrond, G (2004), Principles of Marketing, 10 th edition, P Prentice Hall.

5.2 Publications

Elwes, J (2011) 'The right kind of innovation', Financial World, Banks: not out of the woods, pp 12-13.

5.3 Internet websites

Maister, D (2007) Selecting A Leader: Do We Know What We Want?,

Qualities of A good Leader, leader-991029.html (accessed 24 June 2009)

Goal congruence approach under advanced Strategic planning, (accessed 8 August 2009)

ACAS. (2007) Recruitment and induction [online]. Advisory booklet. London:

GALLAGHER, N. and O`LEARY, D. (2007) Recruitment 2020: how recruitment is changing and why it matters. [London]:  (accesses 26 April 2007)

TAYLOR, S. (2010) Resourcing and talent management. 5th ed. London: Chartered Institute of Personnel and Development, (accesses September 2010)

A Global view of Local Bank (accessed October 2006)

How to avoid Hiring mistakes ( accessed October 2006)

5.4 Journal articles

COTTELL, C. (2009) Snowed under. Recruiter. 16 September. pp27-28.

RANKIN, N. (2009) Using corporate websites for recruitment: the 2009 IRS survey. IRS Employment Review. No 926, 3 August. 15pp.

SUFF, R. (2009) Monitoring equality and diversity in recruitment: the 2009 IRS survey. IRS Employment Review. No 931, 19 October. 12pp. 

Gidley, Jo. Strategic HR Review, 2008, Vol. 7 Issue 4, p50-51, 2p, 1 Black and White Photograph

6. Appendices

6.1 Appendix (i)

The process of recruitment and selection is necessary in order to deal effectively with equal opportunity issues, to hire the right people either internally or externally, to minimize cost and mostly important to identify insignificant candidates before they are hired. The recruitment process results from the identification of a need for an employee after conducting the HR planning process. It consists of different stages, including;

Job analysis

Job description

Person specification

Compety based specifications

Job advertisement

Job Analysis is the process used to collect information about the duties, responsibilities, necessary skills and work environment of a particular job. It is the examination of what the potential leader will be required to manage a team. For example, a Branch Manager which is considered to be the leader of a branch will be responsible to plan, organise and control operations of the Branch including the smooth running of the daily activities, ensuring consistent application of the systems and procedures, and promoting investments and other initiatives that will enhance the business.

Leaders are persons who have a sense of direction for the purpose of their work. They have an ability to inspire others to move forward together to achieve this vision. Leaders can work effectively at all levels of an organisation. They also have a strong foundation of values, and respect others. Not everyone has the same mix or the same strengths. Leaders possess a variety of values, characteristics and skills such as inspire others to act, manage conflict effectively, have the ability to use data and information and put it into meaningful action, have the ability to think and plan for the long term and know how and when to delegate responsibility and authority

Job Description is a written statement of activities, tasks and responsibilities of a specific position. A job description involve:

Job title e.g Branch Manager

Job grade e.g Manager II

Reporting lines - to whom employee reports e.g. Senior Manager (Operations) or Head (Operations)

Main ares of responsibilities e.g. a Branch Manager is responsible;

To manage the branch and ensure that procedures are constantly applied and adhered to.

To ensure that the highest level of service is offered to the customers by staff members and automated systems such as ATMs.

To manage the branch's sales function and actively promote cross-selling and up-selling of the products and services to existing and potential customers.

Resources controlled

Specific responsibilities: for example;

To ensure the optimal deployment of staff members and that clear targets and objectives are assigned and communicated appropriately.

To facilitate personal development of staff members through "on the job" and formal training.

To appraise the performance of subordinates and ensure that assessments are carried out on time.

To submit any reports/manage any projects or activities as may be directed by the Head (Operations) from time to time.

Limits of authority- what employee may or may not decide e.g. Evaluating advances proposals.

Working conditions - working hours and remuneration. E.g. working 40 hours per week and on a 6 day week schedule.

Person specification outline the competencies needed to perform the job effectively, that is, what is expexcted from the person who will best be able to fill the vacant position, for example, attainments, interests and special aptitudes. Competency frameworks may be substituted for job or person specifications but these should include an indication of roles and responsibilities.Today financial services organisations are moving towards a competency-based specification, including skills and knowledge, for example report writing, level of experience and development potential.

The Internet allows organisations to reach a large number of candidates easily and efficiently. Even though it is considered to be a new recruiting tool, traditional methods such as newspaper advertising are still the preferred advertising medium and widely used for recruitment. The advertisement must attract highly qualified candidates and should be based on simple marketing techniques that are easy to use. It should provide relevant details about the vacancy. An ideal advert should contain job description and person specification as well as the following information:

Organisation's name, job location and business;

Nature of the job; e.g. Branch Manager

Title of the person to whom jobholder reports; e.g. reporting to the Head (Operations)

Qualifications and experience required;

Salary range and further details on the remuneration package;

Length of appointment e.g. for an indefinite period or for a definite period of two years.

Manner of application; e.g. all applications must include a detailed CV and will be acknowledged and treated in strict confidence.

Closing date for applications.

Once candidates are identified, the organisation can begin the selection process. This includes collecting, measuring, and evaluating information about candidates' qualifications, expertise and experiences for the position. Many organisations use employment agencies or professional organisations for candidates with specialized skills, abilities, or knowledge to fill managerial/professional jobs.

Organisations use these processes to increase the probability of hiring individuals who possess the right skills and abilities and to be successful at their jobs. The selection process includes the following stages:

Application form

Long and short listing