Introduction
Market based management (MBM) is a comprehensive philosophy to business administration (Gable & Ellig, 1993). Charles Koch created the idea. MBM incorporates hypothesis and practice and trains corporations to tackle with the hurdles of growth and change. The fundamental nature of market based management idea is developing authentic and reliable value for consumers and society (Gable & Ellig, 1993).
It enhances creativity that generates value by ensuring that the community has an enhanced welfare. Value creation necessitates consuming smaller amount of resources and offering consumers with goods and services with an improved value. Through this, a corporation can allocate more resources to meet other wants in a community.
The MBM philosophy allows workers to continually search for prospects to advance and grow (Best, 2009). Entrenched in guiding ideologies such as honesty, modesty, and admiration, market based management framework tries to convey some of the mechanism of the free market into corporations.
By doing so, it creates a conviction that freedom is an influential tool for enhancing happiness, discovery, and development (Best, 2009). In this article, a concept from MBM is selected and analyzed. As such, the article highlights how the concept can be applied in contemporary organizations.
Knowledge business
Market based management upholds a number concepts in its framework. The concepts include integrity, compliance, value creation, principled entrepreneurship, customer focus, knowledge, change, humility, respect, and fulfillment (Gable & Ellig, 1993).
In this article, generation and communication of knowledge is highlighted. Successful corporations ought to exploit the huge and diffused workforce’s knowledge. Specific individuals should come up with choices based on information gathered from all the employees.
For a number of corporations, obtaining appropriate information into the hands of the decision makers represents the dissimilarity between prosperity and failure. Corporations must always be ready to react to shifting customer needs hasty innovations of rivals. To do so, a corporation must adopt new approaches of expecting, determining, and communicating consumer desires to all employees in the firm.
As such, everyone within the organization needs to redefine the approach through which tasks is undertaken. Currently, it is no longer appropriate for workers to come to work daily and undertake their assigned duties. Employees should always strive to identify what they can do to generate the most value for clients.
A number of organizations have acknowledged that their dealings should always be geared towards knowledge business. In the business of coming up and conveying knowledge, market-based frameworks have foremost reward compared to command-based frameworks.
Based on the illustrations in the attached document, it is apparent that the success of the top successful organizations is attributed to their ability to generate and share knowledge (Gable & Ellig, 1993).
In the current competitive markets, organizations must implement several changes to cushion their businesses from their rivals. Because changes have always affected the manner in which organizations offer their services or products, innovation will be evidenced from how the they will use their knowledge to tackle the daring challenges.
For instance, troubled companies should either choose to augment their competencies using the existing knowledge or adopt radical technologies that make the existing knowledge outdated (Gable & Ellig, 1993).
By regularly coming up with knowledge and sharing it with the workforce, organizations may acquire new market shares, come up with new services and products, gain competitive advantage over their rivals, and gain more profits.
One of the corporations that should be applying MBM practices is BlackBerry. Before apple and android phone manufacturers dominated the market, BlackBerry was a popular phone maker in the American and European markets (Best, 2009). Their success was made possible by the company’s ability to produce customer-valued gadgets. Of late, the company has been recording billons of loses that has affected its market share.
A number of financial analysts assert that the corporation will soon shut down its operations if its executive fails to take drastic measures to turn around the company. The company’s failure is attributed to its inability to put into practice the market-based management concepts (Best, 2009). Before its downfall, the corporation failed to predict that clients have the ability to steer the Smartphone revolution.
Therefore, for the company to have a successful turnaround it must embrace MBM practices. Through this, the company should always yearn to acquire appropriate knowledge and continually communicate the knowledge to its employees while taking up the daring processes. With appropriate knowledge, the company and its employees will be informed of the ever-changing customer needs. Ultimately, this will lead to beneficial action.
Relationship between the concept and values theory
With respect to value theory, the above MBM concept would create economic value in the long term. Knowledge creation and sharing is very vital for all managers. Major means through which knowledge creation and sharing add value to organizations have been identified. The above concept enhances decision-making capabilities, enhances learning, and, encourages cultural transformations and innovation.
As such, shared data can enable executives and managers with huge Data can offer managers with vast information. To process this information during decision making process has proved a challenged for most managers.
To overcome these challenges, managers should adopt appropriate knowledge management systems. Through this, they can be able to discuss about the best practices, success, and failures from different people from outside or within the organization with ease. By doing so, managers add value to their organizations by making improved and informed decisions.
Similarly, the concept adds value to organization by creating a learning culture. The culture ensures that employees always evaluate their skills, their units, and their corporation with the aim of improving them to meet the ever-changing customer needs. Subsequent to every significant occasion, employees should evaluate assignments, recognize achievements and failures, and look for ways to improve their productivity.
The above approach can be achieved by implementing MBM practices. MBM approach captures learning from practice and creates knowledge, which can be exploited to make operations that are more efficient.
In addition, the concept can add value to organization by encouraging cultural transformations and innovation. Actively acquiring and sharing knowledge within a corporation will inspire cultural change and creativity by encouraging the employees to share ideas.
The above ideas can help the organizations overcome market challenges, streamline productivity, surpass customer satisfaction, and gain a competitive advantage against their competitors.
With regard to the above illustrations, it is apparent that generating and sharing knowledge has numerous implications and relevancies for 21st century managers. In the current competitive markets, organizations must predict their clients’ future needs and their competitors’ plans. The above predictions cannot be possible if knowledge is not generated and shared freely among the workforce.
To do so, a corporation must adopt new approaches of expecting, determining, and communicating consumer desires to all employees in the firm. As such, everyone within the organization needs to redefine the approach through which tasks is undertaken (Koch, 2006). Therefore, companies that will adopt this approach will be better prepared for tomorrow’s challenges.
Competitors will outweigh companies that will fail to adopt the concept. Because changes have always affected the manner in which organizations offer their services or products, innovation will be evidenced from how the companies will use their knowledge to tackle the daring challenges.
Conclusion/summary
In conclusion, it should be noted that MBM incorporates hypothesis and practice and trains corporations to tackle with the hurdles of growth and change. The fundamental nature of market based management idea is developing authentic and reliable value for consumers and society. It enhances creativity that generates value by ensuring that the community has an enhanced welfare.
Value creation necessitates consuming smaller amount of resources and offering consumers with goods and services with an improved value. Corporations must always be ready to react to shifting customer needs hasty innovations of rivals. To do so, a corporation must adopt new approaches of expecting, determining, and communicating consumer desires to all employees in the firm.
As such, everyone within the organization needs to redefine the approach through which tasks is undertaken. By habitually coming up with knowledge and sharing it with the employees, corporations will acquire new market shares, come up with new services and products, gain competitive advantage over their rivals, and gain more profits. Knowledge creation and sharing is very vital for all managers.
Major means through which knowledge creation and sharing add value to organizations have been identified. Knowledge creation and sharing enhances decision-making capabilities, enhances learning, and, encourages cultural transformations and innovation.
References
Best, R. J. (2009). Market-based management (5th ed.). Upper Saddle River, N.J.: Pearson Education.
Gable, W. E., & Ellig, J. (1993).Introduction to market-based management. Fairfax, Va.: Center for Market Processes.
Koch, C. G. (2006). Market based management: the science of human action applied in the organization. Albany, Tex.: Bright Sky Press.