Introduction
Organizations across the globe pursue different managerial styles. Consequently organizations differ in the manner they undertake their operations and the way they handle their employees. Obviously this results in a difference in organizational performance at various functional levels.
The current business world demands a lot of shrewdness in the manner managers manage their organizations’ operations because the current business environment is very demanding, volatile and unpredictable (King 1997, p. 223).
However, a number of organizations are still known to lag behind in light of these changes and many still adopt archaic organizational practices. This study will explore organizations and managerial practices through a case study of two companies namely Watson’s Engine Components and H&M Consulting.
Watson’s Engine Components essentially deals in the manufacture of vehicle spare parts and operates in the Northeastern part of England. It employs approximately 200 people with a majority of them being semiskilled while the rest are categorized into groups of clerical workers, technical staff, and managers (in the order of the number of employees in each group).
Unlike Watson Engine Components, H&M consulting operates globally. The Company is essentially a global management, engineering and development consultancy firm which has a market presence in over 120 countries around the globe.
The company was born as a result of the merger between two companies in the year 1989 (a process which has seen the organization grow in leaps and bounds). When critically analyzed, the company has grown organically through an increase in its human resource staff and in operations (through the acquisition of new businesses). Complimentary to the spirit of growth, the company recently embarked on an effort to empower its functional areas through the acquisition of auxiliary companies across the globe.
This included the acquisition of an environmental plant in Netherlands, an educational consultancy in Romania, and a power engineering plant in USA; all of which constitute three additional plants meant to reinforce its foothold in the market (and at the same time increase its overall operational efficiency). The company is currently home to more than 13,000 employees who essentially work on a number of projects around the globe, ranging from health, educational, consultancy and the likes.
Considering the above company profiles, as mentioned earlier, this study seeks to evaluate the two organizations with respect to their managerial practices, organizational structures, teams/team working, and organizational culture.
These four functional areas will constitute the body of this study and the analysis will be done systematically to gain a comprehensive insight into how both companies undertake their organizational and managerial practices so that we have a clear understanding of organizational nature and managerial practices.
Organizational Design and Structure
Organizational design and structures essentially determine how organizations operate, with regards to communication channels, operational practices, human resource structures and the likes. Lilly (2005) explains that organizational design is normally affected by the organizational structure and managers can only change their organizational designs if they can first change their organizational structures.
Watson’s organizational design and structure is symbolic of an archaic organizational structure where power is highly vested on managers and directors. This structure is common in family businesses which the company is representative of. It is therefore correct to note that the organizational design is highly formalized and hierarchical which is also representative of an old-fashioned hierarchical structure (Lilly 2005, p. 2).
Moreover, the manner of managerial succession emphasizes the formal and hierarchical nature of the organizational design because it is documented that the company’s manager, Gordon Watson, is to leave his position to his good friend John Smith upon retirement. This is to say that the manner in which the organization appoints its managers is very internal and done in closed doors.
This symbolizes a very formal and uncompetitive recruitment process that is characteristic of old-fashioned organizational designs (Lilly 2005, p. 2). In this type of organizational structure, employees do not have much say in the organization because the management wields a lot of power over them. The type of communication that is synonymous to this organization is top-down where all forms of communication streams from the management downwards (Lilly 2005, p. 2).
On the contrary, H&M consulting has a very flexible organization design where the employees have a say in the way the company is managed. This is representative of modern-day organizational designs where management is less formal and less bureaucratic (Lilly 2005, p. 2).
This is the reason why the company is more efficient than Watson Company, H&M’s organizational design therefore supports the bottom-top organizational structure where control is also given to lower-level managers and employees to make important decisions in the organization. This decentralized manner of management has its own advantages which gives the company a commendable organizational performance when compared to Watson Company.
Watson Company is also highly formalized in terms of its departmentalization strategy. In other words, there is very little movement and communication of employees from one department to the other. Moreover, before any communication occurs, it is said that management has to be in the middle of it. This means that the various departments of the company are less coordinated and augmented than they should be.
The opposite scenario is evidenced of H&M Consulting Company where its various departments are highly coordinated since there is free movement of employees and free communication of employees among various teams. This is to suggest that it is much easier for tasks to be completed more effectively and efficiently in the organization than most conventional companies or organizations with a highly formalized departmentalization strategy would do.
In terms of work specialization, Watson Company has a high level of specialization within various departments which is openly seen to hinder the movement of workers from one department to the other. This fact is supported by evidence which suggest that employees find it difficult to move from one department to the other because they lack the skills to do so.
However, its organizational design supports the breakdown of various processes into various steps, but a lack of flexibility within these processes hinders efficiency from being realized. This is the reason why the organization experiences extensive delays in delivering their products in time and it is also the reason why some employees are seen to have too much time on their hands while others are seen to be overworked and overburdened.
On the contrary, H&M Consulting Company does not have a high sense of specialization because employees from one department can easily work in another. This easy employee mobility is facilitated by the fact that the employees are trained to function in almost every functional area of the organization. Watson Company has failed in this task. Instead, its employees are only knowledgeable on how to work in one department.
Teams and Team working
Most companies today have appreciated the importance of teams and team working because they significantly improve the productivity and efficiency of given organizational processes (Team-wise 2010, p. 3).
However, this benefit is only realized on the surface because many organizations appreciate the importance of team building because of it deep-seated benefits. Comprehensively, they include the enhancement of employee relationships, the sharing of positive relational experiences, an appreciation of team strengths and talents (among others) (Team-wise 2010, p. 3).
Watson Company fails to enjoy these advantages because it has not completely embraced the concept of teamwork and so it still faces significant challenges dealing with employee retention, high employee turnover and the likes. Moreover, it is documented that its employees are not appropriately motivated through incentives (a benefit which is derived from an employment of the team building concept).
Though there are still significant challenges experienced by various organizations in making respective teams work in synchrony and harmony with one another; various researchers have not shied away from developing theories that touch on the functioning of teams.
One such theory is the Maslow’s hierarchy of needs where it is suggested that employees are always in the question of wanting something while their “wanting” is totally dependent on what they have at a given point in time (Team-wise 2010, p. 3). This analysis implies that employees are often motivated by given levels of needs and when they have them, they desire a higher level of need (Team-wise 2010, p. 3).
Maslow categorized these needs in five levels and they include physiological needs, safety needs, social needs, esteem needs and self-actualization needs. This theory can be applied in the organizational context and more especially with regards to Watson Company’s situation which is characterized by significant human resource challenges. To properly motivate its employees and ensure there is a low employee turnover, it needs to apply the Maslow’s hierarchy of needs concept.
Watson Company does not have a strong concept of team working, partly because of the lack of technological facilities to compliment the functioning of various team activities. For example, it was suggested by one of the company’s managers that the company should employ computer-aided techniques to augment the functioning of various departments. H&M consulting on the other hand has a very elaborate team working platform which is comprehensively aided by computer technologies.
It is documented that the company has a proper network to augment the functions of its project teams because the team members are endowed with various skills that when pooled together, create a massive production machine. This is the reason why the company has been evidenced to accomplish given tasks within the required time, while Watson Company has been known to be synonymous with delays and a lack of production of quality goods.
Leadership and Management Approaches
Leadership and management approaches are two different concepts because leaders are not necessarily managers and in the same manner, managers are not necessarily leaders. Highly performing organizations are known to embrace the two concepts because they are very essential in the proper functioning of teams and in the proper running of the organization (Changing Minds 2011, p. 1).
The leadership approach adopted by H&M Company is a participative leadership approach where employees are essentially included in the decision-making process of the company (Changing Minds 2011, p. 1). This type of leadership approach is often associated with a high commitment from the employees because they are included in the formulation of given policies and practices within the organization.
This leadership approach is also associated with high levels of collaboration, as opposed to competition, because when employees collaboratively make decisions, they enhance social commitment and therefore employee buy-in is enhanced (Changing Minds 2011, p. 1). Moreover, this type of leadership approach basically leads to the formulation of comprehensive and well-informed decisions.
This is the reason why H&M Company has managed to achieve high standards of performance when compared to Watson Company because the company is not known to make autocratic decisions which eventually causes employee contempt, thereby leading to low productivity (Merell 1976, p. 29). Moreover, H&M Company is seen to adopt the management by objective (MBO) approach which is complimentary to the participative leadership approach.
Management by objectives entails the comprehensive (employee included) formulation of objectives and the devising of respective channels through which the organization can attain the objectives, through a comprehensive decision-making process (Lipsitz 1973, p. 112). If the employees are engaged throughout these entire processes, then it becomes easy to count on their commitment towards ensuring the objectives are achieved.
Though different companies are known to cede control to their employees in variable quantities, the management of H&M Consulting is seen to restrict its influence on its employees to coaching and advising. This strategy gives enough room for the company’s project teams to work autonomously without much managerial control. This strategy also gives enough room for project managers to be creative and more productive than they would be in a highly managed and surveyed environment.
Watson Company on the other hand adopts an autocratic leadership style that gives the company’s managements a very wide and strong sphere of control. This strategy prevents employees from properly working in autonomy because they are at the mercy of their managers. Moreover, chances of employee creativity being embraced throughout the organization is also very minimal and this leads to a lack of production of quality goods
Organizational Culture
An organization’s organizational culture encompasses a number of functional areas of the organization including the psychology, attitudes, beliefs, and values that guide the employees and management of the company (Martin 2002, p. 1). Comprehensively, it defines the values and norms that have been practiced in the organization for a long time.
H&M’s organizational culture is enshrined in ethical principles because it is cognizant of the need to operate within high realms of integrity and accountability among all organizational stakeholders. The company’s organizational culture is very strong because there is a high augmentation of employee behavior and the company’s principles and values (Laird 2010, p. 209).
This can be evidenced from the fact that the organization behaves like a well-oiled machine with very minimal challenges in operations and implementation of organizational principles. The company’s organizational culture is also holistic, in that, it encompasses the interests of all stakeholders because all employees are supposed to ensure customer satisfaction, professional excellence, commercial success and employee fulfillment. These operational principles are enshrined in the mission statement of the company.
Moreover, the values of the company are also complimentary to its mission because it is also enshrined on principles of professionalism and ethics. This fact is affirmed by two of the company’s values which are integrity and excellence. The other company values are progress, respect and drive.
These values tend to exhibit the fact that the organization strives to stay relevant by employing adaptive strategies that will change its processes to be relevant to the business environment. Evidence of this fact is affirmed by the company’s’ employment of computer aided techniques to improve project team performance.
Watson Company on the other hand has a very weak organizational culture in the sense that there is very little alignment of the organizational practices with the values and mission of the organization (Laird 2010, p. 209). Comprehensively, we can see that the organization faces significant delays in dealing with its current and future orders (customer dissatisfaction).
The company also faces human resources challenges, in the sense that, it is characterized by high employee turnover and most of the existing employees are working in sheer contempt of its management. This has consequently led to the development of poor quality products which are also likely to result in more contempt for the company by its customers.
Conclusion
Every organization has its own distinct way in which it carries out its affairs. This study establishes that the managerial approaches adopted by H&M Company are quite superior to Watson’s and this is the reason why it enjoys more productivity and high acclamation than Watson.
This is supported by evidence from the study which suggests that the company has a very comprehensive and facilitative organizational design that incorporates proper communication channels, less formalization, less departmentalization, less specialization and such like variables. The organization is also seen to have a highly effective team working environment characterized by high performing project teams.
The company has a participative leadership approach and its managerial style is best conceptualized through the management by objective (MBO) strategy where employee and managers alike are engaged in the overall formulation of the company’s goals. The company’s organizational culture is also very strong, in the sense that, the company’s employees believe in it and therefore their actions and behaviors are complimentary to the company’s mission and values.
The same comments cannot be said of Watson because the company has a very rigid and bureaucratic organizational design that vests a lot of power on the managers and this gives little opportunity for lower-level employees to voice their concerns. The organizational design is therefore highly formalized, highly specialized (leading to low mobility of workers), highly bureaucratic and top-down in nature. This organizational design is the main problem for the company.
The managerial style is also autocratic, therefore leading to the high level of contempt employees have of the company. There is also little evidence to suggest that teams (or the concept of team working) are employed in the company and therefore, very little progress is made in this regard. This fact is supported by little evidence of collaboration and coordination among employee functions. The organizational culture is also not supportive or well augmented with the values of the company.
This is because there is evidence of the production of poor quality goods, employee dissatisfaction (from employee turnover) and the late production of goods (compounded by the fact that the organization cannot effectively deal with its current or future orders). These factors comprehensively support the fact that H&M Company adopts better managerial practices than Watson and this is why the company experiences higher levels of organizational performance.
References
Changing Minds. (2011) Participative Leadership. Web.
King, S. (1997) Lessons from the Recession: A Management and Communication Perspective. New York, SUNY Press.
Laird, L. (2010) Organizational Culture in Action: A Cultural Analysis Workbook. London, SAGE.
Lilly, M. (2005) Six Key Elements in Organizational Design. Web.
Lipsitz, L. (1973) Introduction to the Systems Approach. London, Educational Technology.
Martin, J. (2002) Organizational Culture: Mapping the Terrain. London, SAGE.
Merell. D. (1976) Managerial Styles. Web.
Team-wise. (2010) Theory. Web.