Managerial process can be described as a series of five stages which are related to the development of a strategy and its implementation. This paper is aimed at discussing each of these stages in greater detail. Moreover, one should evaluate the role played by corporate governance.
This issue can be better examined by looking at the actions of a specific company, namely General Electric at the time when this organization had to undergo rapid transformation. This example can be helpful for understanding managerial process. These are the main questions that should be analyzed.
At first, it is important to mention the development of the strategic vision. At this point, the management should identify the long-term goals of an enterprise. In other words, they have to describe an idealized version of a company (Rumsey, 2012, p. 380).
This stage was critical for the development of General Electric. At that time, managers, stockholders, and board of directors had to determine how the stagnant company could transform itself (Macey, 2008, p. 10).
For instance, the company had to become the world leading producer of electronics (Macey, 2008, p. 10). Moreover, it had to gain leadership in other markets. This vision shaped later policies developed by this corporation.
The second stage involves setting specific objectives. At this point, it is necessary to identify a set of realistic and measurable goals that a business should attain within a specific period (Thompson et al., 2013). One can say that the effective corporate governance of General Electric took an active part in this process. In particular, stockholders and managers needed to set standards for financial performance of a company.
Their objectives were related to the following aspects:
- the profitability of each division;
- labor expenses;
- net revenues,
- growth rates (Macey, 2008, p. 10).
Additionally, they concentrated on such a criterion as the volume of production. Certainly, Jack Welch, who was the CEO of General Electric, was the main decision-maker at this stage. Nevertheless, he had to coordinate his efforts with the board of directors.
One can say that the interests of stockholders were the top-priority for senior executives, including Jack Welch. So, corporate governance is vital for the accountability of senior executives. This is the main argument that can be put forward.
Furthermore, it is critical to remember about the development of a strategy. This means that senior executives have to identify the actions that should be taken in order to achieve the objectives and vision. The strategy adopted by General Electric consisted of several steps.
For instance, it was necessary to eliminate bureaucratic structures, increase the motivation of employees, and reward those people who contributed to the increased profitability of the enterprise (Boudreau & Jesuthasan, 2011, p. 10). Overall, this part of the managerial process is the most important activity because it affects every business process within an organization. This is one of the main points that can be made.
One should also pay attention to the implementation of strategy. At this point, business administrators have to test the validity of their policies and their relevance to the needs of the company.
When speaking about General Electric, one should mention that Jack Welch and his supporters were responsible for this task (Boudreau & Jesuthasan, 2011, p. 10). In turn, the board of directors had to make sure that his policies were consistent with the interests of shareholders (Macey, 2008, p. 10). This was the main tasks that the board of directors was responsible for.
Managerial process also includes such activities as monitoring and evaluation of performance. These activities are aimed at determining the extent to which the strategies of the management attained the expected results. They look at such indicators as financial performance, time-efficiency, productivity, and other criteria. This assessment can be used to modify the strategies of senior executives.
The performance of Jack Welch was also closely monitored. People, who represented corporate governance, focused on profitability of General Electric, its compliance with legal norms, and the volume of production (Boudreau & Jesuthasan, 2011).
To some degree, corporate governance can be regarded as a system of checks and balances that prevents a leader from taking wrong decisions. These examples show that corporate governance is relevant to every stage of the managerial process.
Overall, one can argue that managerial process can be viewed as interrelated activities that have to be sequenced in a certain way. It is aimed at implementing the most optimal strategies that enhance the productivity of a firm. Such a mechanism as corporate governance is supposed to protect the interests of various stakeholders. Much attention is usually paid to the needs of investors and owners.
This situation could be observed in General Electric at the time when it had to undergo dramatic changes. One can say that corporate governance is vital for the sustainability of any enterprise because it helps the management avoid various pitfalls. This is the main aspect that can be identified.
Reference List
Boudreau, J., & Jesuthasan, R. (2011). Transformative HR: How Great Companies Use Evidence-Based Change for Sustainable Advantage. New York, NY: John Wiley & Sons.
Macey, J. (2008). Corporate Governance: Promises Kept, Promises Broken. Princeton, NJ: Princeton University Press.
Rumsey, M. (2012). The Oxford Handbook of Leadership. Oxford: Oxford University Press.
Thompson, A., Peteraf, M., Gamble, A., & Stickland, A. (2013). Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New York, NY: McGraw-Hill Education.