The analysis of this case is being taken from the perspective of an organizational development (OD) consultant.
The case highlights the importance of management to attain organizational goals. It emphasizes the value of management theories and approaches to effectively manage an organization, thus, enabling it to attain its vision and mission.
There are at least five management issues that confront the Business Winners Training and Videos (BWTV). These issues require immediate resolution to enable the company to sustain its growth according to the expectations of Mr. Robert Parker, owner of BWTV:
The Capability of the General Manager to Lead BWTV
Joseph, the newly appointed General Manager of BWTV, must squarely face this issue. As General Manager, he is accountable for the performance of the company to achieve its goals. Joseph will have profit and loss (P & L) responsibilities and must therefore make sure that everybody in the organization does the right things right efficiently to be effective contributors to the company’s profitability and growth.
Case facts reveal that Joseph has a good grasp of his responsibilities as General Manager of BWTV. His apprehensions and curiosity on some management issues point to the fact that he knows what it takes to manage an organization. For instance, Joseph immediately sensed that the company is disorganized by observing the staff and asking diagnostic questions.
Davidson and Griffin (2006, quoted in Katz 1974) cites diagnostic skills as one of the essential skills that a manager should posses to operate an organization effectively. Communication, decision-making, time management, technical, interpersonal and conceptual skills form the rest of the skills set that Joseph must posses. These are necessary skills that Joseph must have for him to competently perform his interpersonal, informational and decisional roles.
The case reveals that Joseph is uncertain if he has what it takes to manage BWTV considering that he had only supervised a few people. He is not sure if he has the necessary managerial skills to manage the company. De Bono and Heller (n.d.) emphasizes that the fundamentals of business and management are universal, making them applicable to all organizations, big or small. They believe that the growth of a company hinges on the ability of the manager to translate his ideas into effective action. Joseph must, therefore, put his best foot forward and translate his thoughts into action. The owner of the company has full trust in him and that is a good starting point.
Managerial Theories Adopted by BWTV
Management theories can lay down the foundation of a successful business and Davidson and Griffin (2006) recognized the importance of knowing and understanding the history of management theory to draw lessons from the past and help move on to the future.
According to Daft (1998), the classical management perspective started the modern era of management theory during the early part of the 1900s. Various authors say that scientific management and administrative management compose this management perspective. The authors noted that the focus of scientific management is on the individual while administrative management concentrates on the organization.
The website El Rincon Del Vago (n.d.) and Davidson and Griffin (2006) cited the principles of management that Henri Fayol developed as one of the major contributions of the classical management perspective to management thought that continue to be observed even by the managers of today. The 14 management principles include division of labor, authority, unity of command, subordination of individuals to the common good, remuneration, centralization, scalar chain, order, equity, stability, initiative and esprit de corps.
Another valuable contribution of the classical management perspective came from the proponents of scientific management. Davidson and Griffin (2006) and the website El Rincon Del Vago (n.d.) documented the contribution of Frederick W. Taylor in improving production efficiency through his principles of scientific management.
Other theories evolved from the classical management perspective. One of these theories represents the behavioral management perspective. The Hawthorne Studies, according to Daft (1998), proved that the favorable treatment of people in the workplace increased motivation and productivity. The study laid the foundation for other works in learning more about leadership, motivation and human resource management which continue to be a major concern of today’s managers.
World War II gave birth to the quantitative management perspective. Large companies during the post-war period adopted quantitative techniques adopted by the military for the effective management of resources.
Daft (1998) noted that the classical management perspective worked well in the United States during the 1950s to 1960s. He attributed the success of this management perspective to World War II which shuttered the economies of Japan and Europe, leaving the playing field to the North Americans.
The 1980s according to Daft (1998) created a paradigm shift in management as companies changed corporate cultures. Companies began to value leaner organizations, flexibility and the capability to serve customers fast. This was the period when the management perspective shifted from the classical to the contingency management perspective which belongs to the domain of the contemporary management theory. The paradigm shift became necessary to address the changes in the rapidly changing business environment. Such changes include, among others, globalization, advances in technology and communications, and diversity. Organizations also started to be concerned about ethics and social responsibility as it started to have a public face as a corporate citizen.
The shift from the older management approaches does not necessarily mean that they have no value to the companies today. Davidson and Griffin (2006) explains that the contemporary management theory seeks to integrate the valuable elements of the classical, behavioral and qualitative management perspectives through the systems theory and the contingency theory.
The challenge now for companies is how to successfully blend the theories by drawing lessons from the past and adopt to a management style that will drive the organization to effectively accomplish its mission and realize its vision.
With the mention of DVDs in the case, BWTV is obviously a company that started after the 1980s. The company should, therefore, be concerned about the contemporary challenges that it must face to operate viably and effectively.
Joseph’s interest in knowing the managerial theory that BWTV is currently adopting indicates that he is on the right track.
BWTV’s Internal and External Environment
The organizational environment contains forces that operate around an organization and have potential impact on the operations and resources of the company. Davidson and Griffin (2006) explained that a company has its internal and external environment. The external environment is defined to be anything outside of the organization while the internal environment refers to the conditions and forces within the organization.
Organizations can manage the internal environment more effectively because they are in direct control of the conditions and forces within the organzition. The external environment, on the other hand, represents forces that cannot be controlled by the organziation. Environmental uncertainties posed by the external environment can only be managed but not controlled by an organization.
The extenal forces have been categorized by David (2001) into (1) economic forces, (2) social, cultural, demographic and environmental forces, (3) political, governmental and legal forces, (4) technological forces, and (5) competitive forces. Davidson and Griffin (2006) included international dimension as the sixth force and collectively termed these forces as the general environment which is one of the layers of the external environment.
The other layer, according to Davidson and Griffin (2006) is the task envrironment which is composed of the cumpetitors, customers, suppliers, regulators and strategic alliances.
David (2001) stated that changes in external forces will lead to changes in customer demand for products and services and will, likewise, affect product development, positioning and market segmentation. He prescribes that companies should formulate effective strategies that will address the opportunities and threats in the external environment.
Davidson and Griffin (2006) said that the environments wherin an organization operates can be examined within the perspective of environmental change and complexity, competitive forces and environmental chaos. They believe that the best way for organizations to adapt to their environments is to effectively manage information in their environment, formulate strategic responses to opportunities and threats by considering mergers, takeovers, acquisitons and alliances as potential strategic responses, and evaluate the structure of the organziation while checking it for flexibility.
David (2001) recommends the conduct of an audit of the internal environment to identify the strenghts, weaknesses, opportunities and threats to an organization. He proposes to use the TOWS (Threats, Opportunities, Weakness, Opportunities) matrix for an organization to have an inventory of their TOWS to arrive at the most effective combination of strategies which he classified into four: (1) SO, (2) WO, (3) ST and (4) WT.
He recommends the use of the SO strategy to capitalize on the firm’s strengths in order to exploit external opportunities. WO will allow the company to improve on its internal weaknesses while in the process of taking on external opportunities. Companies can use its strengths to avoid or reduce the impact of external threats by employing ST strategies. Finally, WT strategies can be used to reduce internal weaknesses and avoid enviromental threats.
The task of environmental scanning and strategy formulation should be complemented by the establishment of a corporate culture that will enhance its capability to adapt to its external environment and in achieving internal integration. Corporate or organizational culture is defined by Davidson and Griffin (2006) as the set of values that defines the beliefs and values of the organization, how it does things and the values it deems to be important.
Joseph has taken the first step to steer BWTV in the right direction. His curisity on the enviroment in which the company operates and its culture. He already started to be inquisitive on the competitors and clients of BWTV and the forces at play in its environment. BWTV must now begin to scan the enviroment and formulate the appropriate strategies and ensure that the structure of the organization fits the environment to effectively manage such environment.
The Public Face of BWTV as a Corporate Citizen
Organizations today acknowledge that they must be concerned with having a credible public face by exercising coporate social responsibility (CSR). May and Khare (2007, quoted in WBSCD, 2000) defines CSR as the continuing commitment by business to adhere to ethical practices and contribute to economic development while improving the quality of life of its employees and their families as well as other people in the community where the company operates.
The authors noted that organizations preactice CSR by leading initiatives in environmental protection, philanthropy, social services, urban development and improvement of the working environment.
The keywords in the above definition of CSR is ethical practices. Ethics is defined by Davidson and Griffin (2006) as the personal beliefs that defines the behavior or action of an individual to be either right or wrong. Personal ethics is the starting point of good ethics in an organization. Top management must, therefore, the role models of good ethical behavior.
The public face of the organization and how it responds to its corporate social responsibility will definitely affect how its customers will patronize the products and services of the company. People will naturally go for companies that support the community and those that look after the well-being of individuals in the society where the company operates.
The case discloses that a least one employee in BWTV is concerned about CSR. The accountant has recommend to Mr. Parker that he start to become socially responsible. One of the best ways to inform the public that the company has good ethics and values CSR is to follow the prescription of David (2001) to put the company’s concern for public image and its employees in the mission statement. Joseph has this opportunity considering that the crafting of a strategic plan is one of his mandates from Mr. Parker.
Putting the Pieces Together – How should BWTV Plan
Joseph should start acoomplishing the task of getting organized with a corporate plan. David (2001) defines corporate planning, which he says is synonimous to strategic management, as the process of integrating management, marketing, operations, research and dvelopment, information and other systems to achieve the company’s goals. Corporate plans steer the dirction of the company and makes each memember of the organization pull in the same direction.
The starting point of planning is goal setting. The chief architect of the plan should know the mission or goals of the company. The plan could be short-term or long term, depending on the planning horizon defined by top management. Planning is the first role that Joseph must perform in order to accomplish his other roles of leading, organizing and controlling.
In order to execute the plan, the company must be organized in such a way that its strategies or plans can be fully achieved. In the design of the organization, Joseph must adhere to the principles of a good organization which among others, include unity of command and a good flow of communications which according to Gibson, Ivancevich and Donnelly (2000), should flow upward, downward, horizontally and diagonally.
Joseph must also be concerned about putting systems of monitoring and control in place. This is to ensure that the goals are met at a timeframe specified in the plan. It is only through feedback that the company will know the status of its plans and programs. It is in control systems, on the other hand, that the company will be able to ensure that everyone conforms to standards to avoid wasting the resources of the company and avoid unethical practices that can lead to losses and bad company image.
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