Management Review

MANAGEMENT REASSESSED

BY Nasrin Azadeh

Dec 2006

Strategic thinking is an important attribute for managers to organize and review where the organization is heading; revising objectives and the willingness to change planned actions to other unanticipated courses of action could be just as important as long-term planning. With this assumption I challenge to elaborate on developing efficiency in managing human resources based on converging benefits for all stakeholders. I then explain the importance of organizational learning to create an enabling environment for actors. Further thoughts on accountability and risk taking measures essential to reach intended objectives are projected. Finally I conclude that more power is allocated to law as social actors join forces both with officials and economic actors to constraint conducts of business firms in their attempt to highlight environmental factors and regulate social responsibilities.


Human Resources Management

Strategic approach describe major phases involving human resource management by communicating feedbacks from environmental factors that provide inputs into the system to follow dynamic interactivities toward the processes of throughputs in order to ultimately accomplish outputs that is constantly evaluated against intended results. Through strategic reading managing HRs entails innovation, development and foresight in maintaining, optimizing and delivering higher standard of living for human resources in organisations, and business systems to bring about efficiency and effective use of such strategic resource. Managing HRs has to be attentive and recognize impacts of both internal and external environment in which the organisation performs which is relevant to achieve intended objectives.

Initiatives to converge benefits for all stakeholders including the society within a regulated and rational framework facilitate management efforts. Pursuing responsive, responsible and solution finding environment for all involved creates enabling organisations or business entities in which the sense of belonging is highly valued and strengthened as essential element of organisational development. Organisational development justifies policies for project performance that adds value to what already has been done as well as identifying where capacities need to be further developed. Environmental feedbacks are important for adjustments and accomplishing planned objectives.

In a bigger picture economic, social and political organisations and their workforce are part of social system where their interests have to be fulfilled in order for the system to survive and develop. In an open system where these interests contradict, there are crucial points of intense activities for the management to focus on monitoring, evaluation and planning intervention. That is to say devising strategic, tactical and operational planning that brings interests’ of stakeholders closer and creating maximum benefits for society, individuals as well as organisations.


Organisational Learning

In the past decades significant social, intellectual, and technological changes have occurred with that the routines of professional life in business, and other domains being affected by the combination of new technologies and new management techniques. The internal cultures of organizations have also changed accordingly, usually in ways that make them more efficient and effective. These imply to growing need of organisations to engage in continuous learning to acquire higher capacity, skills and motivation to compete for bigger shares.

Consistency is a crucial element of the theory of increasing productivity; people should evaluate options in a consistent manner taking into account the value and probability of expected outcomes. One study seeking evidence for the effects that education, professional qualifications, and task-specific training gather on the degree of consistency of judgement found that consistency is an issue of knowledge and conceptual understanding. Perhaps less appreciated but no less important is the fact that generic skills such as communication, technical know-how, literacy and numeracy are correlated with educational attainment and professional qualifications (Leitch Review of Skills 2005).

Lack of skilled human resources affects performance and productivity from many angles. Britain's business leaders have recognised the urgency of the task. A recent survey by Lloyds TSB found that problems recruiting qualified staff were causing more boardroom headaches than either the threat of terror attacks or bird flu. And 48% of Britain's largest 2,000 companies said they were experiencing difficulties recruiting qualified workers (BBC, 2006). Leitch was alarming to report that the average French worker has become 20% more productive per hour than their British counterpart. In Germany they are 13% ahead. According to the Sector Skills Development Agency the UK is currently about the fourth or fifth largest economy in the world but in terms of human capital we languish in 17th place.
Some of the good practice that has been mentioned in recent work on performance assessment is the need to align organisational incentives with learning, and adapt in the light of that learning. Further challenge is to build on individual competency which means developing and adapting management systems and processes so that they too evolve in the light of what we are learning about them. This requires an ability and skills to scrutinize and make sense of what is going on outside of the organisation and become more porous to the political, economic and social processes in which performance is immersed (Oxfam GB, 2005).

While organizations aiming to devise good practices, organisational learning has emerged as one way to live up to expectations and needs. Major contributions on learning organisations are the outcome of dynamic thoughts of businesses and private sector, but group learning will equally apply to the interest of public sector. Individuals are considered to be the main topic of management studies since they are the agent of changes that are to be organized and regulated. Sensible suggestions and skills in managing agent of changes as representatives of group dynamics leads the organization or the system toward intended outcomes. As it is suggested we are creatures not of habit, but of context. Therefore optimizing behaviour and relation has to come along with contextual improvement. In general, group is the immediate reflection of changes that individuals are about to exert.

Family, classmate, or intentionally organised group they all project changes of behaviour based on group reactions. Group reactions in their turn are strongly influenced by some members of the groups that sometime take the role of gatekeepers. However studies show that intended changes are facilitated to make their ways in small discussion groups by building consensus rather than one member preaching for the rest. The method was widely used to change the behaviour of productive industrial workers, elevate skills and encourage trends and ultimately changing individual’s aspirations and patterns.

There are significant factors that need to be regulated in dynamics of group formation in order to sustain intended outcomes. It is important that members of the group have strong sense of belonging to the group. The scale of attraction and sense of belonging is motivating factor for the group to influence its members. Individuals with higher influence are often those positioned in higher status. But in the process of making changes initiatives in a group discussion, the ethics of tactics that raise emotions must be questioned. The creation of a hostile, emotionally charged atmosphere infringes on the right of members to obtain information and make their own decisions.

Organizations are clear about wanting staff to feel they are respected and supported, finance and processes well managed, and wanting to get things done more quickly, simply and effectively. This will require everyone looking at how they do things and a serious effort to reduce bureaucracy. Finally, and above all we want everyone who come in contact with the organisation to be inspired to do more (Oxfam GB, 2006). Setting goals for the efficiency, effectiveness and equity of organisation is a legitimate focus for policy making. In order for managers to meet these goals methods must be developed to set realistic achievement targets, to measure progress towards these targets and, ultimately, for managers to be held accountable for their actions in achieving targets.

Nevertheless, as with any measure of progress, judgment plays a role in interpreting the indicators, and supplemental, qualitative discussion around the results that will be needed. Consistent feedbacks from operational experience into knowledge of what works and why makes that knowledge widely available for the process of decision making in different level. The World Bank asked the question to what extent it's monitoring and evaluation (M&E) systems provide staff with the information they need to better manage for results. Policies and procedures are instituted to manage better results with staff better clear about how to use performance information in their day-to-day work translate into improved practices at the operational level (World Bank, 2006). Strengthening incentives for staff and providing a training and communications program for all levels of management as well as staff to encourage the use of M&E information.




Accountability & Risk Management

Mutual accountability has come to be seen by many as a fundamental dimension of the good functioning of different kinds of institutions, from governments to private businesses, from NGOs to international institutions. In general terms, accountability denotes the mechanisms through which people entrusted with power are kept under check to make sure that they use their power fairly, and that they duly carry out the functions for which the power was originally entrusted (DFID, 2005). Two key components of accountability: answerability - the obligation of power-holders to justify their decisions and actions - and enforceability - the existence of mechanisms for punishing poor performance or non-compliance (Schedler 1999). Answerability requires the availability of information which can be analysed by external actors to monitor and assess the performance of power-holders, and the related capacity to carry out such analyses.

Enforceability requires the existence of mechanisms for sanctioning lack of compliance or poor performance with regard to commitments or responsibilities of power-holders. It could also include, however, positive rewards for good performance and compliance.

Therefore, the availability and use of information, the existing mechanisms for monitoring performance, and the existence of adequate incentives (rewards / sanctions) for compliance are three key determinants of the functioning of accountability mechanisms. Mutual accountability and reciprocal commitments imply shared responsibility for the outcomes and impact of organisations on the society as a whole.

Whether employees have voice at work is determined, in large part, by employers' decisions as to whether to adopt a voice regime where they are unconstrained by the law. Capacity building will help to perform sound management including the accountability of institutions to those they serve. The ability of institutions to help or harm people revolves around the quality of institutional interactions with people at all levels. Building capacity will enable people to make their interests known and taken into account. By increasing their voice and expressing their preferences more vividly they ensure that institutions truly respond to their needs. They will then have the means to provide feedback to institutions to enhance productivity and economic growth.

Lack of resources and feedbacks weaken accountability, legitimacy and learning as well as capability to bring about effective changes in system being private or public. On the other hand, institutional constraints on decision making as rational choices have dynamic effects on the balance of power among social forces. These constraints reflected in the rational behind formation of social entities. One study found that when the rational choices of actors are constrained by a variety of normative and institutional constraints economic performance in societies is enhanced. These productive decisions are not made in vacuum emanating from dissatisfy minds of managers constraint by various interference.

With growing uncertainties, regular, reliable and informative feedbacks are necessary tools for managers to rationalize decision making and pursue subsequent adjustments. Risks are increasing as actors external to corporations are gaining power. In particular, financial and non-financial rating agencies, the media, regulators, and institutional investors have each, in their own way, taken control away from managers and added to the complexity of the risk that are facing organisations.

The effective translation into practice of risk management strategies needs to address the complex and often contradictory issues facing organisations. The risk management strategies of organizations need to take into account several steps that include alternative procedures, working out predetermined scenarios for risk aversion, continuous assessment to minimize the likelihood or development of risks, sharing or transferring to third party and finally developing tolerance and adaptability to new situations when risks occur.

Ultimately it should be noted that people are surprisingly risk-averse, preferring the certainty of a low return as opposed to the uncertain prospect of a much higher return. The role of management is substantially elevated particularly for their initiative in making decisions for their willingness to take risks. Managers occupy chairs for their ability or skills in making rational choices through managed risks. Their constant craving for development stems from dissatisfaction with status que that drives them to enterprise more risky decisions than other actors.


Power to Law

Assessing economic consequences of organizations is relevant to functional and healthy legal institutions that build on expectations for future stability. As such, economic assessment suggests rich dynamic interactions between economic and political change that includes a positive feedback loop between democracy and economic development. This demonstrates the fact that where more democracy consolidates and become stable, income grows more rapidly which in return feeds into more democratic stability. In developing countries studies show that discourse of good governance are informed by policies with more concerns for international law and fiscal caution, rather than responsiveness to demands of private sector. As such key player’s objectives contradict with the theory and practice of development, because it reflects the direction of law making with different priorities of that of citizens.

Although laws are considered as external factors and components of organisational environment but mutual interaction between economy and law, and power overlapping has been prevailing. Shareholders and social actors pressing to take part in decision making that is set to challenge big businesses have increasingly endorsed constraint laws that work to regulate shortcomings. By joining the forces to legalize norms and rules they ultimately become partners of the governing body. Their expertise and ways of communication to their supporters are mechanism for sustaining rules and regulations. An overwhelming 91% of those interviewed in annual Mori Poll in 2005 suggest that public policy and governments should encourage businesses to take their responsibilities more seriously, and to work to improve the social impacts of their products and services and stated that this will affect their choice of which products or service to buy.

Moreover, large businesses today are owned by shareholders raising voices as part of such economic networks where actual founders or executive managers do not any more control a majority of votes in the board as it was traditionally done. People in their role as investors challenge the agenda of what is the best interest of the organisation with emphasis on ethical values, environmental concerns. They have changed management objectives to the betterment of society and environment by endorsing restrictive rules and regulations and ultimately questioning the reputation of big businesses if they delay to adopt environment friendly social policies. As a result social actors and activist shareholders are essential advisors of many board rooms, and increasing numbers of corporations are taking their agenda into account in making business decisions.

Campaign initiatives alike have turned to a comprehensive political, regulatory, legal and economic initiatives that instigate a great deal of pressure on management through naming and shaming, filing legal action or boycotting products and ultimately enforcing intended constraints. These interferences can seriously damage reputation of firms by critical reports released which then opens to financial market as a result of poor performance or failings in environmental management. Increasing preoccupations of management on winning public trust has grown so important that it has led to new priorities in management with unprecedented concerns for managing risks to their reputation including additional budget allocation. That is to say that processes of legal action and institutions reciprocally shape and are shaped by economic action.

The four ‘ways of life’ identified by Douglas’ Cultural Theory draw comprehensive picture of forces active in the society that include: civil society (fatalists), government (hierarchists), civil movements and NGOs (ethicists) and the private sector (entrepreneurs). Those engaged in the government way of life and those who are driven by ethical principles are keen on control and regulation. They believe they know best (Allan, 2005).

Because rules and legality are socially constructed, it likewise affects the economy through a multi-dimensional set of social mechanisms, rather than by calculations of benefits only. Similarly, law helps constitute not just economic interests, strategies and power, but also everyday economic meanings, identities, roles, relationships and structures, and norms, values, ideas and ideals, including the concept of economic rationality itself.

Having said that the conclusion will drive us to the fact that the more we assume and elaborate on power to people be it social actors or shareholders, the more we elevate and extend the power of regulators and rule makers. It introduces the functioning of yet another positive feedback loop in escalation of constraint orders. The complexity of social machinery in democratic environments has functioned in a way to devolve more power to rules and regulations in every corner. These democratic practices are extending further. Ever more power lies in law. Law abiding democratic governance will exercise increasing power in future over private entities. At present more political and social actors in advance economies advocate for rule–resource institutional framework rather than liberation.



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