Process of Managing Organizations

As the world moves through the 21st Century, business is becoming more dependent upon professional managers, who can bring success to an organization.  Issues such as globalization and decentralization adds to the need for organizations to hire flexible managers capable of leading.  A 21st century manager should possess three traits and utilize them to lead organizations: the ability to stimulate change, excellent planning capabilities, and ethics.

What a manager does and how it is done can be categorized by Henri Fayols four functions of management: Planning, Organizing, Leading and Controlling.  Through these functions managers can be catalysts for change or by definition change agents  People who act as catalysts and manage the change process. (Robbins, Bergman, Stagg and Coulter, 2000, p.438)  Whether performing the role of the change agent or not, change is an integral part of a managers job.  Change is An alteration in people, structure or technology. (Robbins et al., 2000, p.437) Change occurs within and around organizations today at an unprecedented speed and complexity. Change poses threats and creates opportunities.  The fact that change creates opportunities is reason why managers need to encourage change.

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What a manager can change falls distinctively into the three categories stated in the definition of change: people, structure, and technology.  The manager can make alterations in these areas in an attempt to adapt to or facilitate change.  The change of people involves changing attitudes, expectations, perceptions and behavior.  These changes are used to help people within organizations to work together more effectively. Changing structure relates to job design, job specialization, hierarchy, formalization and all other organizational structural variables.  These changes are ones that need to be flexible and not static to be adaptable to change. Technological change entails modification of work processes and methods and the introduction of new equipment.  Changes in this area have been enormous especially in the areas of computing and communications.

An organizations environment has both specific and general components, or micro and macro environments. The organization also has its own personality or culture.  This environment and culture can be the generator of forces for change.  Needs from within the organization can stimulate change; these are internal forces for change. Of course, the distinction between external and internal forces is blurred because an internally induced change may be prompted by the perception of an external event. (Barney, 1992, p.755)  Todays organizations are characterized by frequent disruptions to its environment.  New strategy, new technology and change in employee mix or attitudes are all internal factors that can create force for change.

The introduction of new equipment or technology can create the need for change within the workplace.  The staff will need to learn how to use the new equipment and it may affect the duties required of them.  Their jobs may have to be redesigned.  New company strategies, which may involve the change in management practices, enterprise agreements and industrial relations, will create a vast variety of needs for change.  So will the attitudes of the workers.  In fact employee attitudes can create the need for new company strategies in the case of job dissatisfaction, poor team spirit, lack of commitment and job insecurity.

External forces affecting an organization demand change by creating threats and opportunities.  The organization it compelled to respond to these threats and opportunities.  These external forces are apparent in many of the segments of the organizations external environment.  These include political-legal, technological, economic, marketplace and sociocultural dimensions.

The political-legal environment is that which consists of government bodies, pressure groups and laws.  It is pertinent for companies to keep abreast of and change in political environment because these changes can have dramatic effect.  Change in political environment can see legislation introduced that will not make selling or providing a product feasible or somewhat difficult.  There are many political factors and laws that can affect business.  Pricing, competition, fair trade packaging, labeling, advertising, product safety and minimum wages can all affect business.

The marketplace is a major contributor to forces for change.  These forces are created by changes in customer buying needs, expectations and buying habits.  The lifting of import tariffs or market deregulation are other factors.  The technical environment is created by developments of new products or processes that affect an organizations opportunities and operations.  These advancements in technology purvey benefits and impel organizations to change.

The first factor to consider for motivating change deals with whether the organization is facing some obvious need for change, such as increasing competition; pressure on prices; changing customer needs / expectations; advances in technology; reductions in external funding; or regulatory changes (Cummings, 1997, p. 81).  The actual change does not occur until the force for change exceeds that of the force resisting the change.  People who may not necessarily lose from the change still contribute to the force resisting change.  People inherently resist change because change causes uncertainty and ambiguity.  Through good management these uncertainties and ambiguities will be removed and the resistance to change will not be as great.

Planning is A process that involves defining the organizations objectives or goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. (Robbins et al., 2000, p.247)  One of the reasons for planning is to reduce the impact of change.  It does this by creating an environment that is accepting of change and by predicting change.

Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses. (Robbins et al., 2000, p.247)  No amount of planning or anticipation can get rid of change all together. Planning cannot eliminate change.  Changes will happen regardless of what management does.(Robbins et al., 2000, p.437) Planning just enables us to best cope with and manage change.

Change can be modeled by two different metaphors: calm-waters and white-water rapids.  The calm waters model involves unfreezing changing and refreezing; this is also the some as Lewins model of change.  We have seen that planning is a tool that can be used to predict change.  In this environment of predictability the calm waters metaphor is an apt model. The organization is in a stable environment and can anticipate change so it goes through a process of unfreezing, changes implemented to overcome differences and meet new goals, and refreezing to keep changes in effect and return to stable environment.  Total quality management uses this model.  Total quality management is essentially a continuous, incremental change program.  It is compatible with the calm waters metaphor (Robbins et al., 2000, p.454)  Total quality management continually seeks out problems and implements changes as they strive to ever improve their organizations efficiency and effectiveness.

Plans are difficult to develop for a dynamic environment. This calm waters metaphor has become increasingly obsolete as a way of describing the kind of seas that managers in todays organizations have to navigate. (Robbins et al., 2000, p.441)  This calm waters metaphor  is not very helpful to people faced with the detailed task of bringing change about.  Today the white water-rapids metaphor is more prevalent in organizations.  It is a more comprehensive model.  The white water-rapids metaphor depicts change as an ever-present perpetual event.  An organization in white-water rapids is in an uncertain dynamic environment (Barney, 1992, p.757). Disruptions to the status quo may never stop.  Managers in this chaotic world need to respond quickly to every changing condition.

Organizing is defined as The process of creating an organizations structure. (Robbins et al., 2000, p.351) By comparing the definition of organizing to the definition of change we can come to the conclusion that organizing, a function of management, can be a major contributor to the change of an organization through change in structure.  Changing technology may be a contributor to an environment full of uncertainty, although this technology has enabled managers to organize for much greater efficiency and effectiveness.

Work specialization is necessary as jobs become more complex and it also increases efficiency.  Although job specialization does not create an environment that is capable of accepting change.  Managers could adopt a structure of multi-skilling.  This multi-skilling approach will provide the organization with an adaptable workforce.

Decentralization is The handing down of decision-making authority to lower levels in an organization (Robbins et al., 2000, p.359) Decentralization is prevalent in organizations that exist in complex uncertain environments.  An increase in decentralization would create an organization capable of making faster decisions.  This faster decision making ability is far more capable of reacting to change.  This ability to react quickly to change is hence conducive to change.

An organization that is well structured for change is one that is organic.  An organic organization has the structural characteristics mentioned above and others like wide span of control, cross-functional teams, free flow of information and low formalization.  Organic organizations have organizational structure that is highly adaptive and flexible with little work specialization, minimal formalization and little direct supervision of employees. (Robbins et al., 2000, p.362)  Organic structures incorporate the use of teams.  Teams use a much flatter design of management.

The learning organization is the best-structured organization for change.  This is quite apparent in the definition An organization that has developed the continuous capacity to adapt and change because all members take an active role in identifying and resolving work related issues. (Robbins et al., 2000, p.376) To achieve this the organization has a structure that is without boundaries.

Leadership is the ability to influence a group towards the achievement of goals. (Robbins et al., 2000, p.593) Transformational leaders are the style or type of leader best suited to change. They are a style of leaders that entail certain qualities that are conducive to change. These are  individualized consideration, intellectual stimulation and charisma. (Robbins et al., 2000, p.617) Leadership is crucial to facilitate the vision required for an organization to become a learning organization. Leadership can be used to reduce the resistance to change by altering peoples attitudes, expectations, perceptions and behavior through motivation, communication, participation, facilitation, negotiation manipulation and coercion.

Control is The process of monitoring activities to ensure they are being accomplished as planned, and of correcting any significant deviations. (Robbins et al., 2000, p.683) The control of the organization needs to flexible enough to absorb and deal with change. Managers need to move away from bureaucratic style of control to encourage change.  Bureaucratic organizations strain the use of rules, regulations, procedures, policies and hierarchal authority.  For an improved environment for change organizations should use clan or market approach to control.

How do we put the functions of management and the possible changes of organizations into a process of change?  Managers can use the process of reengineering.  A radical redesign of all or part of a companys work processes to improve productivity and financial performance. (Robbins et al., 2000, p.64) Rather than creating an environment for change this method just goes right on in and changes it.  Reengineering is extremely stressful on the organization.  Yet, for all the enormously stressful uncertainty placed on employees, the payoffs from reengineering can be powerful. (Robbins et al., 2000, p.717) An organization that has gone through the reengineering process has experienced and adapted to change and therefore are better experienced to accept and embrace change in the future.

The environment and that we create through change and trying to encourage change is one that is conducive to stimulating innovation.  We need to have flexible structures, good communication, and culture that are relaxed and supportive of new ideas.  An organizations culture can be a prevailing force for innovation or seriously threaten the innovative endeavor. Crucial to the implementation of cultural change is managements ability to use leadership and provide a shared vision of the future.  In a chaotic, dynamic world of change we must be able to come up with new ideas and inventions in order to compete in the global market.  Those who are good innovators are the ones who can gain competitive advantages.

Change and survival are synonymous.  Survival demands change.  Managers must be intuitive and read the current and changing situation surrounding them and make the best decision to coordinate work and apply resources (Graham, 1997, p174). We have discussed what change is, how we depict it and what forces or creates change.  Change implemented correctly can unleash employee creativity and potential, reduce bureaucracy and costs, and provide ongoing improvement for an organization.  Given these benefits it would seem a good idea to encourage change.

Ethics can be defined as a process of evaluating actions according to moral principal of values (Griffin, 2000, p289). Throughout the centuries people were trying to choose between profit and moral. Perhaps, some of them obtain both, but every time it could have roused  ethical issues.  Those issues concern fairness, justice, rightness  or wrongness; as a result it can only be resolved according to ethical standards.

Setting the ethical standards for the way of doing business in corporation is primarily task of    management. Corporations have to maintain the same standards as an individual person and, in addition, corporations, as organizational units, have their own social responsibilities toward customers, employees and society. However, any business should keep its original purpose of functioning – making profit. Balancing the traditional standards of profitability and burden of social responsibilities is not an easy task. In recent years it has been a trend of setting standards of corporate ethics according to high degree of morale.

Unfortunately, cooperation of unethical behavior of a manager with a journalist may lead to an undesirable results. “Early in December 1995, Smart Money’s editor-at-large James J. Cramer wrote an article for his monthly column; Unconventional Wisdom, recommending four  $2 to $6 “orphan” stocks.  Trading records show that at the peak, Cramer’s firm had paper profits of more than  $2 million on the stocks. The gain occurred because he had adopted at least three of the “orphan” sometimes before writing the article. Cramers article said that he was buying one of the stocks but did not disclose that (p. 42). Clearly, neither the management nor the editors had in any way cared of conducting  the ethical behavior and as the result  the innocent investors were hurt.

On the other hand, being ethical can be clever marketing strategy.  Increasingly, consumers are swayed by “non-commercial” factors, such as whether the product harms the environment. Firms such as Ben & Jerry’s, an ice cream maker and Body Shop international, a cosmetics retailer, have enforced their brands by publicizing their ethical standards…Calmins Engine, a maker of diesel engines, made the product greener while lobbing for stricter pollution laws. Du Pont, a leading producer of ozone damaging CFCs, became an early member of anti-CFCs lobby partly because it knew it was well ahead of its rivals in developing alternative. (The Economist, December 1996, p.21)

But ethical self-promotion can backfire. As in the case of  the Body Shop company that was publicly enforced to rephrase a statement that its product were not tasted on animals (Some other companies did that in the past). This accident made many consumers to question Body Shop ethical standards.  Another interesting issue in corporate management is social responsibilities.  Responsibilities can be defined as set of obligations an organization has to protect and enhance the society in which it functions (Griffin, 2000, p. 168). There are a few main components of social responsibilities.

Any business has responsibilities to its customers. The paramount duty in this respect is to provide customers with quality and safe products.  Unfortunately, not all businesses follow this rule. The example of such deception is tobacco industry, which deliberately manipulated with the level of nicotine in cigarettes. Despite of declaration of managers, scrutinize research made it clear that industry tried to maintain the addictive level of nicotine.

The purpose of it was far from humanistic – addicted smokers kept buying cigarettes, making the industry prosperous and profitable. There has been a number of other different customers’ abuses such as sale of fruits with overdosed chemicals, breast implants for women and etc. Though, the responsibilities to its customers are crucial point of management, the way managers treat employees is another parameter of evaluation of companies ethical well-being.  Unfortunately, the most concern of  managers is theirs own job rather than theirs employees.

Another problem is equal employment opportunities for everyone. Although a lot was done to destroy the system that kept women and minorities away from the top management positions, many corporations still rely on white men’s stereotypes and prejudice. Women are considered just as accessories for men and are not treated equally.  In fact, firms attitude toward employees often determines the way employees feel about company. As a rule, corporate code of ethics contains the pattern of behavior, an employer expect from employee.

Another responsibility of the companies’ management is to stockholders.  This usually rises a so called “agent problem” (Dyckman, 1998, p.67).  Managers are in control of the property stockholders. However, the interests of these two groups may not be the same. As manager is looking for more power and prestige, they can tend to be less profitable operations. Also corporate officials may vote for high salaries and bonuses for themselves, decreasing the dividends of stockholders by that.

There is no particular solution for all of these issues. There is only hope that ethical standards and social responsibilities would guide every manager throughout his/her career.  Professional conduct should be governed by a code of ethics that reflects positively on the practitioner and managerial profession. Simply stated, nothing should prevent a manager from maintaining high ethical standards and social responsibility in the quest for high performance and quality.

In conclusion, it is obvious the ability to stimulate change, excellent planning capabilities, and ethics are essential traits a manger should possess and utilize in leading organizations in the 21st Century.  These traits help the manager focus on success for their organization; as well, they are traits subordinates look for in their leader.  By using these traits, a manager can place him/herself on a path that can lead to success.

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