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Importance of People to an Organization’s Business Success: Analytical Essay
Introduction
For an organization, people act as an important asset that helps the entity capitalize on its strengths and eliminate its weaknesses as much as possible (Kerr, 2017). An organization’s business success is largely dependent on its people who provide their services differently as stakeholders. Therefore, to elaborate on the importance of people to an organization’s business success, it is imperative to examine how different groups of people stakeholders play their contribution. People are divided into two categories: internal and external. The focus of this essay is mainly to elaborate on the reasons for which internal people (managers and employees) are important in making an organization successful in its business. Others argue that technology is the future for organizations any people within can simply be replaced by advanced technology that can-do tasks efficiently, cheaply and productive. (Corporate Finance Institute, 2014)
1
investors play an important role in an organization’s success because they provide the necessary financial support which the firm needs for various reasons including financing daily business activities or working capital operation, etc. As people, investors contribute to an organization’s business success by providing the money to pursue value-adding projects and exploit different market opportunities and deal with competitive pressures and threats. Furthermore, by investing heavily in an organization, investors play an integral role because they have a financial stake in the success or failure of the business. Therefore, investors also contribute by sharing their ideas and growth prospects. Investors are also important to organizations because they bring their professional connections/contacts and non-financial resources to help the business meet industry-specific challenges. For every business organization, investors are also important because, with their voting rights, investors appoint the highly qualified board of directors capable enough to deal with all business aspects (such as corporate governance, making a viable business decision, and appointment of senior management, etc.). (Fox and Lorsch, 2012), (Corporate Finance Institute, 2014)
2
For an organization, consumers play an important role in their business success because consumers are the people who purchase the final product of an organization. Consumers help an organization become successful by purchasing its products and help the business generate more profits to cover operating costs and expenses. Consumers are also important to an organization’s business success when such people recommend the products to other people in the same target market. Due to this word-of-mouth recommendation by consumers, organizations save more on their advertising expenses that, in turn, generate profits. (Corporate Finance Institute, 2014)
3
In an organization, managers are important because they organize, control, and direct financial and non-financial resources (such as human capital and assets) to make the firm successful (Economy, 2013). Managers also play an integral role in an organization’s business success because they design such policies, rules, procedures, and internal controls with which an organization achieves its full corporate potential in producing products and services that address and satisfy all stakeholders (investors and consumers) (Suleman, 2013). Managers also make organizations successful by recruiting and selecting only talented people.
Managers control employees’ productivity, actively engage them in corporate decisions, and keep them encouraged to create real-value and contribute to business success (Heathfield, 2018). Managers act as a bridge between senior management and middle/lower-level employees (Reh, 2019). So, managers are important in an organization to enforce and implement the decisions made by senior management. Managers contribute to organizational success by promoting a positive working environment so that every workplace member is geared towards the achievement of commonly shared corporate objectives. For this, managers design performance measures and reward high-performers. They promote collaborative efforts within teams so that all organizational resources work in alignment with each other towards success.
4
Internally, employees are the most important asset an organization has. They contribute to an organization’s business success by bringing their skill set, knowledge, and experience to the workplace and work productively towards the achievement of pre-established and commonly shared corporate goals and objectives (Alton, 2015). By designing innovative products, features, and services, employees contribute to organizational success. Furthermore, employees help an organization grow its business by consistently engaging in Research and Development efforts, and promoting what the business offers to the target market. Employees are important to an organization because they are the basic bridge that links the organization with its customer base (Ryan, 2016). Employees give up their personal lives and leisure time to work for their organization. Employees make industrious efforts to increase customer satisfaction by interacting directly with the target market to help the business grow.
Employees contribute heavily to an organization’s business success by collecting knowledge about customers’ experience and transform their experience-based feedback to re-create creative products, features, and services (Levine, 2018). Apart from this, employees are considered an important asset to an organization for the reason that they enable the business to exploit and make a profit from under-served and un-served market areas. This is so because employees look for, identify and work on such opportunities that are not easily observed by competitors. Eventually, employees make their organizations successful by working hard to grow within new marketplaces.
As customers are the main source of operating income for organizations, employees play an important role in this area as well. There are times when consumers become dissatisfied and are not happy. They are ready to switch to competing brands the moment their needs and concerns are addressed by business rivals. Employees are important in an organization because apart from turning potential customers into regular consumers, employees make distinguished efforts to retain the customer base (Ryan, 2016). Before customers switch their purchases, employees come forward and interact with customers to know about their reasons for dissatisfaction. This way, employees are important for organizational business success as they handle customer complaints and feedback to serve customers better than before. Management theories all require employees to be effective and technology cant simply be managed as technologies do, management theories such as Douglas McGregor Y Theory argue that employees are a vital asset to any company or organization and with proper management employees will achieve an organization’s goal and objective that technology can. (Wood, 2018)
Others argue that in an organization business automation will be better than employees for a variety of reasons. Financially, automation helps organizations become more successful in boosting their profitability because automation replaces human labor. As a result, automation reduces operating expenses associated with employee payroll that improves the bottom-line (Uzialko, 2019). Consequently, an organization can save more on their costs and invests the proceeds in exploiting growth opportunities and pursue value-adding projects to create stakeholder value.
Apart from this, automation is better than employees because the possibility of human errors is minimized. Furthermore, automation can help reduce wrongdoings and fraudulent activities making it far better than employees. Automation is more important than employees because the former can achieve higher productivity within less time than employees who can do the same amount of work in more time. Automation can do more jobs at the same time. Automation can help an organization achieve more targets and efficiencies by performing the same job in less time. As a result, the operating costs associated with utility bills are minimized when employees are replaced by business automation.
Moreover, the use of automation is better than employees because automation reduces the need for covering losses associated with occupational health and safety. With automation, an organization can reduce the possibility of accidents in the workplace. Automation is also better than employees in a way that the former does the same work once while the latter needs to perform repetitive tasks in case of errors and mistakes (Uzialko, 2019). Therefore, automation is better than employees because automation can continue performing repetitive tasks without any exhaustion. In other words, automation is better in making it possible to achieve more output and productivity without any delay and fatigue. Employees that are free from repetitive tasks can divert their attention to more critical business aspects (Uzialko, 2019). Additionally, automation is better than employees because automation can collect information and knowledge in an instant and can generate reports in a blink of an eye so that viable business decisions could be made on time.
But as discussed, the human element will always be required to achieve certain tasks such as the interaction between customers and employees, and some complex tasks within an organization can simply be done better with people within an organization. Unlike automation Employees can be scaled through the organization with essential knowledge and flexibility that the competitor doesn’t have, machines and technology can’t be promoted throughout an organization, they don’t retain any special skills or knowledge and competitors can acquire the same automation you possess and out-compete the organization.
Conclusion
People are important to an organization all stakeholders make an important part of an organization employees are the most important stakeholder with an organization or company and without them a company would seize to function customers, management and investors are also pole that organization needs to thrive managers are essential to the internal systems of an organization, investors finance companies and organization and customers finance business by purchasing goods and services and keeping organizations alive. Others argue some of the stakeholders and people within an organization can be replaced in the future with technology for an even more efficient and profitable organization, but employees will always play a vital role in the coming future.
References
- Corporate Finance Institute. (2014). Stakeholder – Learn About the Different Types of Stakeholders. [online] Available at: https://corporatefinanceinstitute.com/resources/knowledge/finance/stakeholder/.
- Alton, L., 2015. How Employees Make or Break Business Success (And How You Can Lead the Way). [Online] Available at: https://www.business.com/articles/how-employees-make-or-break-business-success-and-how-you-can-lead-the-way/.
- Economy, P., 2013. 7 Things Every Great Boss Should Do. [Online] Available at: https://www.inc.com/peter-economy/7-things-every-great-boss-should-do.html.
- Heathfield, S.M., 2018. Tips for Effective Management Success. [Online] Available at: https://www.thebalancecareers.com/tips-for-effective-management-success-1916728.
- Kerr, J., 2017. Your People Are Your Most Important Asset. [Online] Available at: https://www.inc.com/james-kerr/your-people-are-your-most-important-asset.html.
- Levine, S.R., 2018. Motivated Employees Are Key To Your Company’s Success In The Digital Age. [Online] Available at: https://www.forbes.com/sites/forbesinsights/2018/03/12/motivated-employees-are-key-to-your-companys-success-in-the-digital-age/#3da5edca2ddc.
- Reh, J., 2019. The Role and Responsibilities of a Manager. [Online] Available at: https://www.thebalancecareers.com/what-is-a-manager-2276096
- Ryan, L., 2016. Five Reasons Employees Are More Important Than Customers. [Online] Available at: https://www.forbes.com/sites/lizryan/2016/11/01/five-reasons-employees-are-more-important-than-customers/#4c89d8f0db3e.
- Suleman, R., 2013. Why Managers Are So Important to Business Success. [Online] Available at: https://www.tlnt.com/why-managers-are-so-important-to-business-success/.
- Uzialko, A.C., 2019. Workplace Automation is Everywhere, and It’s Not Just About Robots. [Online] Available at: https://www.businessnewsdaily.com/9835-automation-tech-workforce.html.
- Fox, J. and Lorsch, J.W. (2012). What Good Are Shareholders? [online] Harvard Business Review. Available at: https://hbr.org/2012/07/what-good-are-shareholders.
- Wood, S. (2018). Where it All Began: The Origin of Management Theory | Great Managers. [online] Great Managers. Available at: https://www.greatmanagers.com.au/management-theory-origin/.
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