Organizational Issues of a Company’s Functioning

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Introduction

Management has become a central issue for consideration in the context of economy within the past decades, as it has been proved to play the key role in the organizational process of any company’s activity. It is known that the main objective of a firm in its overall activity is to satisfy the growing and changing needs of customers who become the precondition of every firm’s existence and provide their competitive advantage, allow its profitability and sustainability.

A firm’s activity in the economic process depends on many factors, and it goes without saying that every firm has to be guided by many considerations in the process of arranging its economic activity. Every economic organization has to take into account the prevailing macro- and microeconomic situation in the country and all over the world (if the company has grown up to an international scale of influence). Thus, it is clear that the activity of a company is influenced by the changing tendencies of the market in which it functions.

Discussion

However, in the recent years an opinion that firms play a much larger role in the process of shaping the consumer demand and the overall market has been voiced. This fact has been almost solely guided by the fact that it is the firm that has to “coordinate and motivate people’s economic activity” (Roberts, 2004, p. 74). Thus, one comes to understanding that the purpose of the firm in the contemporary world is shifting its focus and evolving. As stated by John Roberts (2004), the change that took place recently concerns first of all the structure of an organization and its management process.

“This new model permitted an efficient solution to the incredibly complicated problem of coordinating and motivating large numbers of people carrying out a complex of interrelated activities, often in different locations. It thus allowed giant, multiproduct business organizations to emerge and function effectively on a continental and then global scale. The new design also led to a huge growth in the number of people working as managers and to the emergence of a set of values and norms that mark management as a profession” (Roberts, 2004, p. 1).

Thus, it is clear what the author wants to emphasize by speaking about motivation and creativity in the managerial environment of the innovation model of the firm. One can see that the shift of focus of managerial activity has been changed from imposition and control to coordination and motivation, which proves to be much more efficient a practice than the latter one.

This idea is not voiced only by John Roberts – a genius of management and economics, a world-famous scientist Herbert A. Simon (1995) also admits the change in focus of attention that has recently taken place:

“A large part of the behavior of the system now takes place inside the skins of firms, and does not consist just of market exchanges… most of the actors in a modern economy are employees” (p. 273).

Herbert A. Simon is not alone in paying precise attention to issues of organizing control as a key point in the company’s activity – J.Child also pays much attention to the issue and states that “control is an essential and central process o management yet…it is strangely neglected by many writers on organization” (Child, 2005, p. 111).

The shift of focus of an organization’s management process if unavoidable; this is why the majority of economists have taken up studying the change of paradigm and made certain inferences from that study. Namely, John Child was an active researcher so his opinion is highly authoritative and well-grounded. As Derek Salman Pugh, David J. Hickson (2007) have noted, Child spent much time conducting empirical research in China and the USA to detect the change and the way companies cope with it (p. 17).

The assumptions offered by the authors in the context of convincing and motivating as a primary activity of an organization and the main managerial implication have a great value for students of management department, and personally for me. The fact discussed in the present paper changes the view of the whole management process, its focus and primary aim, thus making a shift towards a more innovative management paradigm. John Roberts himself initially stipulates the purpose of the book he wrote and the way it may be implemented in everyday management practices:

“it offers ways to think about the problem of designing business organizations for performance and growth. Both students of organizations and management and practicing managers can benefit from having an understanding of basic principles of the economics and organization and its application to business enterprises…It also seeks to explain some of the very great changes in actual companies that are creating the new model of the modern firm” (Roberts, 2004, pp. ix-x).

Making a logical inference from the present quotation, it becomes possible to say that the major value of the new assumption lies within the context of organizing the activity of the firm with the help of a new approach to management that is based not on the functional aspect but on the issues of creativity and motivation, which helps to arrange the organizational process within the firm on a more efficient, functional and optimal level. This is undoubtedly a discovery that will help managers of large firms organize the working process on innovative, more engaging and stimulating basis and consequently will lead to the increase in the company’s output as well as the level of the employees’ and customers’ satisfaction.

One can hardly underestimate such a positive perspective, and will hardly refuse from achieving it. Hence, for every student and me personally the discussed objective changes the whole vision of management process and gives it a slightly different sense. The process is retained; however, the ways to achieve the result are chosen in another, more rational way.

Conclusion

As a conclusion, I would like to strongly emphasize the fact that the shift in philosophy of management has been primarily focused on the organizational process based not on control and subordination, but on coordination and motivation, which is an innovation in itself, taking into consideration the fact that this shift also pertains to large multinational companies that were not used to implementing such innovative practices because of the inability to control the complex organizational structure by this means.

However, motivation has been recognized as a powerful tool of arrangement of managerial practices, so every student of management department as well as a practicing manager should do their best to adopt this practice as the guiding principle of their activity in order to succeed in their present or future career.

Bibliography

Child, J. (2005) Organization: contemporary principles and practice. Malden, MA: Blackwell Publishing.

Pugh, D.S., and Hickson, D.J. (2007). Great Writers on Organizations. Ashgate Publishing, Ltd., 313 pp.

Roberts, J. (2004). The Modern Firm. Oxford University Press, 314 pp.

Simon, H. A. (1995). ‘Organizations and Markets’. Journal of Public Administration Research and Theory, 5 (3), pp. 273-294.

Outline

Introduction.
John Roberts’ opinion about the nature of change taking place within a firm.
Herbert Simon’s argument about the central role of employees in the organizational process.
Child’s research on organizational control.
Implications for students of management and practicing managers.
Conclusion.

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Organizational Issues of a Company’s Functioning

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