Managerial Theories of the 21st Century
Businesses are all around; they compile the backbone of society’s configuration. Without the innovations and opportunities that are brought by these companies, lifestyle, as we know it, would be a shadow of how it is today. Due to the importance of all businesses to the human race, it is vital that they are nurtured. The majority of businesses are profit driven and in order to achieve this they must have a sound internal managerial structure. As a result, many theories and concepts have arisen throughout the years to aid the management side of an organisation. The by product of such theories and concepts are, fundamentally, to get the maximum output from employees whilst creating a sense of cohesion and serenity. This essay will be looking at such theories and their importance to companies drive for success.
The global market is made up of a web of sub sectors. Businesses are competing with one another in these respective sectors to gain the largest market share. Examples of sectors include fast food, clothing, banking etc. However it is not just the managerial running of a company that defines its success. There are external factors that can influence the policies and decision making of businesses therefore, in order to compete they must be adopt a flexible approach to the demand of the market. These external factors are ever changing and therefore, it is important that that he are monitored and responded too accordingly by the business. An example of a business response to its environment was in the case of Northern Rock where the Bank Borrowed 26 billion pounds as a result of the subprime crisis in North America.
A Tool that can be used to monitor these external changes is a PEST analysis. A PEST analysis is an element of external analysis when performing market research and gives an overview of the different macro-environmental aspects that the company has to take into consideration (2). This form of analysis looks at the Political, Environmental, Social and Technological factors.
Fig.1
Political
• Trading Policies
• Funding and Grants
• Local and International Pressure Groups
• Government Policies
• Wars and Conflict
• Elections
• Terrorism
Social
• Consumer attitudes
• Media views
• Brand image
• Law changes
• Demographics
• Ethnic/religious factors
• Living standards
• Health
Economic
• Local and overseas economies trends
• Taxation trends
• Job growth/unemployment
• Interest and Exchange rates
• Inflation
• Tariffs
• Disposable income
Technological
• Competing Technological development
• Information and communications
• Innovations
• New discoveries
• Internet
• Technology patents
• Research funding
Fig.1 shows some external factors influencing businesses decision making when producing their products.
A PESTLE analysis is a macro environmental framework used to understand the impact of the external factors on the organization. PESTLE stands for "Political, Economic, Social, Technological, Legal and Environment” factors.
...he company which suggests that if you examine managerial styles and work to improve employee satisfaction there will be a correlational increase in productivity and retention. It suggests that perhaps people leave companies not because they are unsatisfied with their work or pay, but rather, because they are unsatisfied with their manager. While this idea might seem brash, it is a significant point being made that suggests that in order to see improvement you need to revamp a program or company from the top. Having worked as both an entry level worker and a managerial supervisor, I can testify to the importance of manager support, appreciation, and feedback and how this impacts your role in the company. Seeking out the strengths in employees, though it seems so obvious in theory, is a revolutionary way to transform the work environment and employee morale.
In business, companies are able to control many of the factors that will improve or impair their business strategy, but some factors are beyond their control. These external factors are beyond the company’s ability to control. This external market environment consist of four primary areas: economic environment, technological environment, political and legal environment, and cultural and social environment (Perreault, Cannon, & McCarthy, 2015, p. 62). By performing a PEST Analysis each of these major areas can be explored.
In this assignment, both control in the workplace and work satisfaction dimensions will be analysed at length. Relating them both to the case study of the Sports Direct Company and other relevant organisational theories; such as scientific management. Sports Direct was founded in 1982 by Michael Ashley in Maidenhead. In 18 years, ‘Mike’ Ashley expanded internationally opening stores in Belgium, and just seven years later listed his company on the London stock exchange. It was that listing that really kick-started Sports Directs’ exponential growth. 2 years later in 2009, Sports Direct established market leadership after their sales exceeded £1.0bn (Sports Direct, no date given). This information presents Mike Ashley as an entrepreneurial genius,
Changes in interest rates, exchange rates, technology and the law are all external factors, which can affect a firm. These factors can affect the firms’ costs or the market as a whole. Changes that take place in the external environment can be evaluated and analysed by using a PEST analysis.
PEST Analysis of Sony Pest analysis is another marketing tool. Pest analysis examines the changes in the marketplace caused by political, economic, social and. technological factors. Political factors change from one party to another who are in control. The sand is a sand. For example, rises in private healthcare and privatisations.
Since the end of the 19th century, when factory manufacturing became widespread and the size of organisations increased, people have been looking for ways to motivate employees and improve productivity. A need for management ideas arise which lead to classical contributors such as Frederick Taylor and Henri Fayol generating management theories such as Taylor’ Scientific Management and Fayol’s Administrative Management. In the late 1920’s and early 1930’s the Hawthorne studies were conducted where Elton Mayo was the predominate figure and contributed to the Behavioural viewpoint. This brought about a Human Relations Movement which included Douglas McGregor’s Theory X and Theory Y approach. Similarities and differences can be found between the theories due to the relevant time period they were implemented, the motives or goal of the theory and how they view organisations. However the use of contingency theory can help negate the dissimilarities which occur as it allows the relevant elements from each theory to be applied to specific situations.
Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation, and can in addition to SWOT and Porter's Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that company's performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.
A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector:
PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project.product, or service etc.
This need rises through the bottom lower level having basic needs of physiological needs related to food, water and biological needs, and grows into Safety needs (pain, overcoming, stress, uncertainties and danger), next up are Social needs related to human association and interaction. This is followed by Esteem needs (appreciation from others, importance and respect) and to the topmost need on the triangle, hierarchy-Self-Actualization related to human’s desire to for acquiring more skills, consideration for challenges and individual behavior to attain desirable goals. It can be seen that the individual remains the center focus of Maslow‘s theory and concerned with the individual’s relationship with families, colleagues and friends(Datta, 2010). In practice, the high order needs will only be of importance when the lower order needs related to biological and physiological need are met. Managers in the Oil and Gas companies in Nigeria have to concentrate to fulfil these lower needs of the team in order to get the best out of the team. These needs remain significant to the high-performing teams as they seek to improve productivity and influence organisational performance leading to high performance, this area Chip Conley the founder of popular hotel chain went ahead to adopt this theory in order to transform his business, he did this by paying more attention to the required areas that impact on the workers productivity (Pattison, 2010), this act alone proved the need to pay adequate attention to the team’s needs. For the High-performing team within the Oil and Gas companies in Nigeria, this theory is of great essence as it helps the manager to better understand and address the
In the twenty first century, leaders are required to build a greater impression in which people believe in strategy, trust in management decisions, and trust in their work. Once people believe in management choice, there will be enthusiasm inside an organisation. Such an environment helps the organisation growing or flourish. A doing well leaders create a surroundings in cooperation inside and outside the organisation. (Subir chowdbhury management, 21c financial times prentice hall (2000)
There are several theories that examine an organization and it’s approach to managing work in an effort to develop efficiency and increase production. Two classical approaches to management are Taylor’s scientific management theory and Weber's bureaucratic management theory. Both men are considered pioneers of in the study of management.
Although it maximized efficiency and productivity but its main limitation was ignoring human aspects of employment. This is manifested in the following:
In the 21st century they consist of various barriers that prevent managers and leaders from achieving their goals and improving their organizations work. Managers constantly try tackle this issues that drive towards lowering productivity. Challenges of management include :