Four Functions of the Management
It is believed that the management of any organization has to perform four functions: planning, organizing, leading, and controlling. On the basis of this case study, we can draw several examples of how these functions are fulfilled in SOL Group. However, it should be taken into consideration that these functions are often intertwined with one another. In such a company as SOL, the main function of the management is organization of the workforce. The personnel of this enterprise are divided into self-governed teams whose members are. Most likely, this business model is the key to the company’s success in the market. Another important function of the management in this organization is controlling. In this case, we need to speak mostly about establishing performance benchmarks and conducting customer surveys. Each member of the staff has the so-called “quality passport” which is updated each month. This document is the main assessment tool, used by the management to control and evaluate performance.
Leading is an indispensible component of management. In SOL, the role of leader is played by the CEO of this organization, Liisa Joronen. First of all, she provides a powerful stimulus to the employees by empowering them and allowing them to improve their professional and personal skills (Imperata 1997, p 1). In this way, the management encourages employees to set ambitious targets and reach these targets. Leadership in this organization is mostly based on trust and mutual respect. The only managerial function, which has not been mentioned in the case study, is planning. This limitation can be explained by the fact that this enterprise operates in the service sector, where companies do not have to determine the volume of output and the demand for the product. Again their main duty is to organize workforce.
Elements of “new workplace” in SOL
Overall, Soul Group can be characterized the so-called “new workplace”. In order to illustrate this point, we need o discuss some elements of organizational policies. First of all, we need to speak about employee empowerment, which means that people, who work for this enterprise receive a high degree of autonomy. They are not continuously monitored by the supervisors, and this monitoring is usually not conspicuous. The management believes that customer ratings are the best way of supervising and assessing the employees’ performance (Imperata 1997, p 1). Decentralization of responsibilities is one of the key strategies, adopted by Liisa Joronen. The company consists of self-managed teams, consisting 50 cleaners. The thing is that the managers of these teams can draw up their own budget and hire their candidates; more importantly, they do not have to continuously ask permission of the top-management (Imperata, 1997). Such approach is a typical property of a modern workplace.
Another managerial strategy which indicates at SOL’s modernity is the increasing use of information technologies. This company greatly relies on Intranet where they store information about customers, financial performance of the enterprise. Liisa Joronen points out that they have practically no room for paper, and virtually every kind of document has been computerized (Imperata 1997, p 1). Again, we should emphasize an idea that modern companies are becoming more and more computerized because IT-based tool allow more reliable exchange of information, and contribute to better teamwork. This is another reason why we can call SOL a new workplace.
However, the most important detail is the increasing customer focus and emphasis on quality. It should be taken into account that the management of this company adopted a philosophy according to which “there are no low-skilled jobs” (Imperata, 1997). The employees of this enterprise receive training in budgeting, time management, and peoples skills. This evidence indicates that SOL is a good example of a modern company which tries to improve each of its business processes by using modern technologies and involving workers into the decision-making. Again, we need to emphasize an idea that such approach can rarely be found among companies that specialize in industrial cleaning. This is why SOL is at the forefront of this industry.
Efficiency and Effectiveness of the Organization
In order to evaluate the efficiency and effectiveness of SOL group, we must first single out the distinctions between these notions. The term efficiency primarily refers to quantitative performance of an enterprise. To measure it, one should refer to such information as profitability, market share, the volume of output, and so forth. In turn, such concept as effectiveness can be applied mostly to qualitative performance. In this case, the researcher should pay attention mostly to the degree of customer satisfaction and employee retention.
When speaking about the efficiency of SOL group, we need to say during 2009 this enterprise earned 157 million Euros (SOL, 2010, unpaged). Additionally, it is a leading operator in Finland, and other organizations cannot withstand its competition. More importantly, its national market share has reached the mark of fifty per cent. This numerical data suggests that the policies, implemented by the management, have not been in vain. Nevertheless, we cannot give a definitive answer about the firm’s efficiency on the basis of the case study and the website because they do not provide information about the return on investment, liquidity ratio, EBIT (Earnings Before Interests and Taxes). Each of these criteria is helpful for the assessment of efficiency.
The effectiveness of this company is more difficult to evaluate mostly due to the reasons that there are few measurement tools for this parameter. Under the circumstances, we need to look at such criteria as internal operations, customer satisfaction, and the relations with employees. The most important is that during the period between 1992 and 1997 the company has enlarged its client base by more than fifty percent (Imperata, 1997). It should be kept in mind that industrial cleaning is one of those industries where the company cannot assume leadership only be setting low prices. The thing is that SOL’s customers are primarily concerned with the quality of their services, rather than cheapness. Another indicator of effectiveness is the number of employees. In 1992, the company employed 2,000 people, whereas in 1997 this number constituted 3,500 people (Imperata, 1997). This percentage change proves that SOL appears to be attractive to potential candidates. In part, it can be explained by the fact that they have opportunity for professional growth and independent decision-making. This example demonstrates that the HR strategy, adopted by Liisa Joronen turned to be very effective. Judging from this facts, we can argue that SOL Group is a good example of how new managerial trends can improve the functioning of organization.
Reference List
Imperata G. (1997). Dirty Business, Bright Ideas. Fast Company Magazine. Web.
SOL Group. (2010). The Official Website. Web.