Business Is the Art of Predicting the Future and Getting Benefit from It
“The art of predicting the future and getting benefit from it” in business can be narrowed down to one term which is business forecasting. Business forecasting is the backbone of a successful business in every business venture. According to different scholars, the management of business should always make predictions based on overall running of the business, sales and finance handling (Hailey 2007).
Business Forecasting is described as the art and method that can be used by the business owner or shareholders to make a prediction of future business activities basing it on the accuracy of your data. The information obtained can be used in the determination of future trends in finance performance, sales performance and also customer behavior. Most businesses need business forecasting, and usually, they are done on a quarterly basis, but some can prefer forecasts made on a monthly basis (Evans 2009).
Types of Business Future Predictions (Forecasts)
General business outlook. Each and every business needs a forecast to is undertaken. This is mainly to foresee the likely changes that might occur shortly. There are certain conditions that are always present in a community that a certain business operates. Some examples are; controls, population, fiscal policy, political conditions, and the national income. Due to the presence of these factors, it is necessary to make future predictions of the business (Hailey 2007).
Sales forecast. The sales department is a major determinant of success in a company. Due to this reason, sales forecast should be carried out with precaution and due care to gain business success. In every business, sales forecasting is considered as the to notch factor in planning and a major aspect to consider in an organizational setting. Plans and policies made by the business to maximize their profits are obtained from expected sales so whether sales forecast is carried out annually or yearly; it is the main factor to future business plans.
Capital forecast. Every business in operation must have financial plans. Capital should be a factor to be determined to meet present and future needs of business. Forecast based on business capital requirements is a necessity and is considered as the primary step in every organization. Accurate forecasts greatly help an organization to employ capital fully and get optimum returns from their investments (Morlidge 2010).
Major Merits of Future Business Predictions (Forecasts)
Promoting a new business in the market. Making future predictions is one vital factor that has a huge contribution when it comes to setting up of a new business. This is because starting a new business is not as easy as it is perceived by most people because business is subject to risks and uncertainties. By carrying out forecasting, the business promoter finds out if the probability of the business thriving and if the business has high competition. After making these predictions, the business promoter assembled all the necessary resources and based on the forecasting made; the business is subject to success or failure (Morlidge 2010).
Formulation of a plan. Proper business forecasting plays a major role in business planning. Major business plans require proper forecasting in business thus making it an essential aspect in consideration. Therefore, as a business person, it is always important no note that adequate planning, whether long-term or short-term highly depends on forecasting.
Estimation of financial requirements. Estimation of business finances is a major business concern because in running a business, capital is vital. Business finances can be characterized by cash used to start the business, the money stored in the bank and cash used to run the day to day operations of the business. The presence of working and fixed capital is based on sound financial forecasting.
The viability of decisions made by management. Correct management decisions highly depend on the accuracy of forecasts made. As described by various scholars, the administration is a decision-making process, and management has the responsibility of making decisions which are uncertain. In the running of business whether small or large, certain changes might occur, e.g. personnel changes and unforeseen contingencies. Decision making by management is a process that goes on throughout the life of business (Evans 2009). Therefore, forecasting is relied upon in matters of production planning and resource allocation.
Business success. Proper forecasting helps the procurement department of the business to procure the necessary and necessary raw materials based on the business needs and future needs. The accuracy of sales forecasting is essential in making budgets. When a business fails to make accurate sales forecasts, it becomes difficult for the business and management to figure out how much production should be done (Hailey 2007).
As discussed in this paper, prediction of future is a vital step that every business has to undergo. Through future prediction, business is assured to thrive and reach its set limits. Many advantages have been realized by businesses which have taken the step of making good and proper business forecasts. On the other hand, lack of prospects might lead to a drastic failure of business. All the discussed merits are some out of the may many benefits of making future predictions of business.
Evans, Michael K. Practical Business Forecasting. New Jersey: John Wiley & Sons, 2009.
Hailey, Linda. Your Business, Your Future: How to Predict and Harness Growth. Crows Nest, New South Wales: Allen & Unwin, 2007.
Morlidge, Steve. Future Ready: How to Master Business Forecasting. New Jersey: Wiley, 2010.
I hope you enjoyed reading this post on Business Forecasting and Future Predictions. There are many other titles available in the business management dissertation and MBA dissertationcollections that should be of interest to MBA students and academic professionals. There are many dissertation titles that relate to other aspects of business such as strategy, leadership, international business, mergers and acquisitions to name a few. It took a lot of effort to write this post and I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.
MBA Dissertation – Impact of CSR on Business Practice
CSR Corporate Social Responsibility – This MBA dissertation explores the importance of implementing sustainable standards and initiatives in the meeting industry sector. In order to succeed in its aim, the following key aspects have been evaluated: the theoretical framework of sustainability itself and the increasing relevance of sustainability in the meeting industry and the inherent gaps in this; the most commonly implemented sustainable standards in the meeting industry sector and companies’ motives for adopting sustainability standards as well as to find out which factors influence on the organisation’s decision to implementing those initiatives; to define which challenges companies face when they implement sustainable standards.
Finally, to analyse why some companies are not certified yet, which sustainability activities these organisations do and if they plan to get certified with sustainable standards in the future. In contrast to the previous literature, which is suffered from lack of empirical knowledge, this research contributes to existing knowledge by implementing the convergent parallel research design and focusing on motives of the companies for implementing the standards, benefits and challenges faced by companies while implementing those standards, and how the adoption of sustainable initiatives and standards influence on customer loyalty.
The research is based on an analysis of survey with 120 responses from small, medium and large meeting industry companies (13% response rate), and on six (6) semi-structured interviews. The results reveal that the notion of CSR is popular concern among different companies and organisations in the industry. The findings also show that the implementation of sustainable standards becomes a part of the company’s everyday activities. In particular, the results show the implementation of sustainable standards is driven by several motives, such as increasing customer loyalty and satisfaction, ability to access international markets and acknowledging Social Responsibility. In addition, the findings reveal the main benefits of adopting the standards: fewer resources used and cut waste have been defined, while the main challenges are time consuming and expensive prices for certification. Moreover, it is important to highlight that some companies face challenges while implementing the standards such as lack of internal expertise on sustainable standards. It can be concluded, that providing of better and clear guidelines for implementing sustainable standards are needed.
To present the theoretical framework of sustainability and CSR and the increasing relevance of sustainability in the meeting industry and the inherent gaps in this.
To discuss the most commonly implemented sustainable standards in the meeting industry sector.
To conduct a primary research in order to determine the motives of the meeting industry companies to implementing sustainable standards.
To analyse benefits obtained from adopting sustainable standards as well as to find out which challenges the companies face while implement the standards.
To discover how certification with standards influences on customer loyalty and which reporting activities companies undertake or plan to undertake.
To analyse why some companies are not certified yet, which sustainability activities these organisations do and if they plan to get certified with sustainable standards in the future.
Efficient project management has become one of the most popular tools for both private and public organizations as project handlers have sought ways to improve their operations. Project managers seek to achieve success across all sectors when handling a project. Technological advancement, new product development and streamlining of business perspectives are examples of targets set by project managers. During the inception of a project, there is the careful planning, organizing and prioritizing available resources achieving the desired outcome or the projected results in the least. At the inception stage, a project seeks to achieve the set target within minimal time while using the least amount of resources. However, every project manager faces challenges during the implementation of a project. Such challenges arise from the presence of different constraints within project management.
Background of the study
Even though a project manager prefers to achieve success all through, there are instances where resources allocated become minimal. Timeframe awarded to a project may also exceed leading to the scope of a project taking a new approach. Project constraints hinder project success hence the need to address each constraint. Despite the fact that project constraints are not consistent, schedule, resources and quality seem to be popularly present hindering success. The omnipresence of these three constraints has led to the name triple constraints, and this research study will address these constraints discussing how they affect project success (Kendrick, 2009).
Making a project successful within the triple constraint proves to be a challenge for every project manager. Regardless of whether its quality, resources or time, the three elements have the notion of working in tandem manner. Significantly, the absence or scarcity of one of these elements adversely affects the triumphant completion of projects. An efficient project manager comprehends that the main key of achieving success for a project entails the balancing of the triple constraints (Dobson, 2004).
The research methodology involved entails a presenting approach adopted within the study. Careful analysis of the triple constraints will be presented. The analysis will involve illustrations of various ways in which such project constraints affect the successful completion of a project. The approach taken will require meeting the expectations of the constraints of project management. The approach taken requires meeting the expectations of constraints in project management. Such entails the researcher to espouse a comprehensive research methodology enabling the understanding of project constraints adverse effects.
In order to remain consistent with this research, there is the approach of extensive methodologies adopted to assist readers in achieving the required results. There were appropriate considerations of projects that have failed or succeeded. Essential to this study, it is significant for a project manager to identify basic project management aspects in order to determine the purpose of a project. Such allows the understanding of project constraints leading to identifying ways of overcoming the constraints (Russell, 2011).
Project Constraint – Quality and Scope
Functions, features, content and data all constitute the scope of work to be done for any project. In order to achieve quality for any piece of work to be done, a project manager is required to provide a precise and specific statement identifying the desired final result of the project undertaken (Dobson, 2004). Every project should have a well-defined and articulate scope of work. However, it is essential to note that the scope of a project is dependent on the output quality. The output quality is essential since it ensures that a project scope is achievable.
Notable to this research, project scope requires effective planning, use of available resources, and proficient management techniques achieving the set target. Failure to adhere to such aspects will frequently lead to project failure. Mandatory for any project manager, changing the scope halfway through the project is suicidal, and often leads to project failure. Nonetheless, every project requires minor changes that are permissible during implementation in order to ensure success (Kendrick, 2009).
The quality of work done is dependent on a project manager’s understanding of project outcomes. Prior to proceeding on with a project, the client will usually have issued instructions on the expected outcome of an assignment. Nonetheless, several prospects of divergence will ensue regarding the necessity to stabilize around the existent resources. A competent project manager has the ability, and resources to cultivate success among projects undertaken. Organizations need to realize the significance of succeeding in projects as these increases their clientele base.
The project manager should have subdivisions that enable tasks undertaken within an organization (Goodpasture, 2004). There are assorted personnel dealing with the diversified projects. For instance, the manager is responsible for overseeing that the objective of the project is realized. The manager is also responsible for directing vast and significant decisions to avoid project failure. Executing this in a resourceful manner requires the program manager to ensure discipline and order is present among supervisors and other member staff.
Project Constraint – Time and Scheduling
Being the primary consideration, time management should be analyzed to the smallest detail. A competent project manager realizes the essentiality of analyzing the required time, and component to ensure successful completion of a project (Dobson, 2004). After careful analysis, each of the components is broken down in order to assign specified amount of time for handling a particular task. A project undertaken requires such aspects since they allow the estimation of a period with which the project can be undertaken. Apart from the estimation of the project period, resources required are identified to ensure success.
Despite the three constraints having a correlation to one another, time management within a project is seen as a diverse unit. Such view is alongside the realization that proper execution of any project within the allocated time is dependent on circumstances and efficient techniques. Project failure may occur despite the project manager having allocated a specific timeframe for each task. Failure can occur should there be exact resources to handle a project (Goodpasture, 2004). Abrupt emergencies may require the use of more resources in handling scrupulous tasks, leading to limited resources. The limitations of resources will often lead to an extended time-frame for a project risking failure (Russell, 2011).
Most project failures have resulted from undermining time allocated to different tasks. However, this often occurs when a project manager is unfamiliar with tasks undertaken. Failure of a project will frequently arise from unexpected events, risks and uncertainties. If the project manager is deemed to be inexperienced, the rise of potential risks will prolong the previously allocated time. Present in most projects undertaken, there ought to be an effective organization, proper restructuring and estimation techniques. Such will ensure that time is managed in an effective manner reducing the risk of failure for undertaken projects.
Project constraint – Cost and Resources
A competent project manager realizes that success of a project is compliant with the readiness and available resources. Even though time has been allocated to different tasks, it is also essential to allocate needed resources to complete the tasks at hand. However, providing the needed resources requires a project manager to have the capital needed to acquire the necessities. Such aspects require wholesome efforts on all levels of accountability. Ranging from casual workers, permanent employees, middle and top level managers, successful project completion requires collaborated efforts from parties involved. Realizing that resources like manpower are the most essential in achieving success, a resourceful project manager ought to ensure that the needs and requirements of labour present is met. Resources pose as the greatest risk in project failure (Wysocki, 2011). There are variables present like rate of materials, machinery and equipment, labour expenses which determine success or failure of a project.
Depending on market prices, the rate of materials seems to be at a constant change requiring the individual assigned to be per with the new prices. The new prices of different prices lead to subsequent changes in quality. There ought to be available capital to purchase high quality materials. For instance in building constructions, it is paramount to purchase quality materials, and failure to do so has a definite chance of project failure resulting from building collapse (Goodpasture, 2004). The purchase of machinery and equipment is also determined by price ranges within the market. However, in order to ensure success, there needs to be the use of high quality machinery and equipment.
Project running is comparative to embrowning a project plan comprehensive of the scrupulous objectives and missions. In addition, there ought to be a quantification of the assets required, the accounts should be indomitable within a timeline that is set. There is the existence of a variety of gear that is essential in making projects undertaken to be successful. The responsibilities of the manger should be as minimal as possible to avoid exhaustion from too much pressure to perform. Essential to this study, it is essential to identify different project phases and measure the success. However, the project manager should ensure that the manpower available is well taken care of since they are the success of any organization.
The prioritization of the constraints within a project is the foremost task needed to be undertaken by a project manager. In addition to the development of strategies in the management of multiple constraints, it is also instrumental that a project manager effectively maintains communication with the client. This ensures that they are both on the same page and that the client’s expectations are being met. Additionally, any competent project manager must ensure that they have a thorough knowledge of project management skills. This greatly assists them in being able to effectively and efficiently cater for any unforeseen project constraints. The act of balancing a project’s responsibilities is facilitated by the project manager’s ability to chart, analyze and implement it. This is because the project manager is aware of and has experience with a project’s concurrent risks.
Dobson, M, S. (2004). The Triple Constraints in Project Management. Arizona: Management Concepts.
Goodpasture, J, C. (2004). Quantitative methods in project management. Arizona: J. Ross Publishing.
Heldman, K. (2011). PMP Project Management Professional Exam Study Guide. USA: John Wiley & Sons
Kendrick, T. (2009). Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project. Phoenix: AMACOM Div American Mgmt Assn.
Russell, D. (2011). Succeeding in the Project Management Jungle: How to Manage the People Side of Projects. Phoenix: AMACOM Div American Mgmt Assn.
Wysocki, R, K. (2011). Effective Project Management: Traditional, Agile, Extreme. New York: John Wiley & Sons.
Business and management ethics encompasses numerous theories which provide adequate explanations on how moral and ethical issues in business can be addressed. They are important in management of businesses organizations because they set up the outline on which managers should monitor the distinctive operations in their organizations (Hasnas, 2013,112, p47-57). These theories are important in managing entities since they work towards establishing avenues that are important in guiding human beings in their daily activities. Theories like normative theory have been identified to be important in business management and organization control because it offers focus to managers and all other important stakeholders in the entity (Miles, 2012, 108, p285-98).
These theories attend to distinctive aspects in an organization which enables effective running of these entities. They have certain specifications which differentiate them from other theories and aid in outlining their purpose in a business setting. For instance, a theory like the normative theory is identified by its prescriptive nature and its ability to give direction on how certain actions should be done. It is known for its concerns about moral issues in an entity. This differentiates it from other theories like the philosophical ethics theory and many others. This paper therefore is focused towards establishing validity of stakeholder theory as an ethical theory which has been largely used in the business and organizational settings for long (Parmar, Freeman, Harrison, Wicks & Purnell, 2010, p10)
History of Stakeholder Theory
The stakeholder theory is an organization oriented as well as business focused theory which points out importance of shareholders in an entity, the rights that they deserve as well as benefits that they should get. These it explains based on the argument of maximizing shares of the shareholders their access to information as well as control on the issues of the organizations they are having shares in. the theory is said to have been established by Freeman in 1984 in order attend to ethical practices in business management (Purnell & Freeman, 2012, 108, p285-98.)
Understanding this theory it is significant to establish who these stakeholders are and what qualifications one have to be a stakeholder. This is important because it will help in ascertaining whether the arguments that the theory puts forth are valid or not. This in turn helps the study to identify the levels of ethics in this theory (Purnell & Freeman, 2012, 108, p285-98.)
.Stake holders are considered to be individuals or groups that have legal claims in the operation of an organization. These individuals or groups ranges from the local community where the business is situated to its suppliers, the people it employs, people possessing the organization`s stocks, its customers and all parties which plays important part in its existence (Wempe, 2008, 18, p549-53). The coordination of these groups is significant for development and growth of a company. Their interactions and coexistence will possibly determine the extent to which such a business entity can move in terms of prosperity, and it is due to exclusion that freeman noticed in his time that perpetuated development of stakeholder’s theory.
Stakeholder Theory Ethics
The theory can be considered ethical on different ground, first, ethics in the theory is identified by fact that it advocates for consideration of other parties which have important contribution in a firm. In this way it tries to disengage the ancient belief that operations in a business entity are directed towards increasing the profits of the stockholders while ignoring other groups like employees, customers and local community which have numerous parts to play in the well-being of the business. Stakeholder theory stipulates that apart from stockholders other parties should be given adequate attention and their priorities should not be neglected. In this way the theory advocates for selflessness, which is an ethical aspect in the society. It tries to decentralize benefits of businesses to everyone and ensure equity in gains of business outcomes (Parmar, Freeman, Harrison, Wicks & Purnell, 2010, p10). It also has an active campaign against high preferences on profits rather than on their stakeholders who ensure that these profits are generated. It does this by pointing out and explaining the values of every stakeholder in operation and sustenance of a business entity. Every constituency in a business has an important role they play to ensure that the objectives and goal of the firm are met. It is therefore not the efforts of the shareholders which generate quality outcomes in a business but a combination of different parties which serves different purposes. This makes ideas that business is a moral involvement where people who do not work benefit at the expense of those who bear larger part of responsibility to lack relevance (Purnell & Freeman, 2012, 108, p285-98.)
Human beings are not means to an end but rather the end itself, groups` contributions towards prosperity of any entity cannot be considered means to an end. By addressing this fact stakeholder theory is justified as an ethical theory. This is because it tries to address issues of exploitation of human capacities, creativities and potentials in a way that will not be egalitarian (Miles, 2012, 108, p285-98). The theory argues that every stakeholder groups needs to be awarded its share of contribution in promoting future of the entity they are associated with. This becomes ethical since it tries to prevent instance of exploitation and greed which might be making some entities in a business better off while others are getting worse off.
By addressing how operations in modern organizations which do not take interests like basic needs of its stakeholders in accounts is a moral foundation on which this theory is built on. The theory identifies issues such as safety and health of the employees and other stakeholders to be equally important in the process of generating profits for the stakeholders. In this way an ethical working environment is facilitated where activities from economic entities which might be having adverse effects on those who contribute to growth of such an organization can be attended to and compensated adequately (Purnell & Freeman, 2012, 108, p285-98.)
In establishing fundamental moral principle in any business operation the theory advocates for equality in sharing of benefits of a business involvement. It is more directed to the universal moral attribution of human personality which Charles Taylor advocated for in his time. This means that everyone who is actively contributing to any process is bound to be considered relevant and significance participant in the process. Such parties have to receive shares of the outcome of the productive process that they took part in minus any form of exclusion. As a result of this the theory addresses need to ethical appreciation of human agents as important component in production. This he theory explains that it should be on an equal level without any form of inequality (Miles, 2012, 108, p285-98).
Pragmatism also emerges as another reason for the theory to be accepted as an ethical postulation. This is based on notion that, by managing stakeholders the entity is not only operating on ethical grounds but promotes its capacities to succeed since stakeholders are important people that an organization cannot operate without. In the same way world is controlled by principles of ethics and it is these principles that help to create order in all sought of interaction and engagement. This calls for need to establish explanation of the world, what is in it and how it operates. This creates the ethical basis of the theory, since it helps in creating order by establishing what constitutes business management and the expected relations in the business relations.
The theory also calls for coexistence and establishing of strong relationships between the participants of a business organization. This proves ethics in the theory since it implies that there is no business which cans operate in evacuee. In the same way the stakeholders depend on the business is the same way the business relies on the well-being of stakeholders. This makes these two parties to be inseparable hence the need to cordially coexist.
Summary of normative and stakeholder theory
Normative theories basically judges whether an action is moral or immoral based on two aspects and these are the consequences that an action causes as well as based on the characteristics of the actions themselves, their nature and manner in which they are carried out. The theory argues that an action can be right or wrong provide that it is promoting and individual`s long-term gain or it undermines it respectively. This argument is founded on the concept of egoism, these can be personal impersonal or psychological. All of these aspects have a common argument in that they advocates for taking particular decisions and courses in life that benefits one self.
On the contrary the utilitarian aspect argues differently, since it tries to address its concern a way from individualism. In this way it advocates for business decisions and activities to be done in a way that don’t benefit oneself but a greater number of people. Human actions should be directed towards creating the greatest welfare of human person in a universal way so as to ensure that people are at the same level and that others do not get disadvantaged while others are benefiting (Wempe, 2008, 18, p549-53).
Therefore according to normative theory net worth of happiness and well-being of human beings should be given first priority in enacting decisions. People should also be presented with equal opportunities to help them discover their full potentials and also to help the gain from whatever activity they are being involved in. in so doing greater degree of morality and ethics will be achieved.
The martin Friedman’s view that business entities do not have any form of moral obligation or social responsibility if not increasing the profits that they generate in their operations is what is being referred to as shareholder theory. The theory argues that the shareholders are the main drivers of any business entity this calls for needs to be socially responsible to the shareholders and not their exclusion as it happens in most cases. The theory stipulates that business organization will not adequately attend to the society if it starts to concern itself with it. In this way it advocates for a society where the businesses ensure that the only responsibility they have on the society is to ultimately utilize their profits in a way that it does not operate outside set regulations and standards.
Critical analysis of both the normative and the shareholders theories provides imperical evidence can be established the shareholders theory is part of normative theory. This is because normative theory explains the importance of moral action to undertake when making certain decision. In the same way shareholder theory seems to be stressing on the same issue based on what should an organization do so that it does not make profit only but increase welfare of those who contributes to its growth.
Issues identified in the literature
There is issues of diversity in the stakeholder theory, the study realized that more than one variety of stakeholder theory do exist this is clearly presented by Goodpaster in his stakeholder analysis and stake holder synthesis. Therefore goes ahead to refute the idea of using stakeholders issues to introduce ethics in business management activities (Purnell & Freeman, 2012, 108, p285-98.). This issue can be resolved by identifying ethical practices which business institutions are supposed to incorporate in their operations so as to avoid contradictions which arise due to dualism in the theory. The other issue that the study has presented is absence of justifications for certain claims in the theory, this can be seen in Donaldson and Preston`s study which argues that the theory cannot be depended upon since it lacks proper justification for claim and postulations it makes. The other reason that the two give for inability to justify stakeholder theory is fact that the theory itself is a prescription of what is expected in an organizational setting and not description of what should be done to attain the expected ethical standards.
The theory is also divided between instrumental and normative theories. This makes its classification difficult undertaking since it bares characteristics of the two types of theories. It also deals with importance of managers and their contributions in a business. The theory points out reasons as to why stakeholders has to be given attention in an organization due to their financial contributions they make to business as well as other significant contributions. The work also focused on conflict within the stakeholder theory which makes it contradicts itself hence giving validation to the critics’ perspectives on why the theory should be applied as basis of ethics evaluation in an organization (Purnell & Freeman, 2012, 108, p285-98.)
Application of Stakeholder Theory
The theory was widely practiced in Australia in the period after the post-war, this practices was associated with increase and escalation of entities which called for managerial controls. Growth of huge corporations owned by the Americans as well as the increased bureaucracies in these periods to a large extent facilitated the development of this theory and its application. The need for its use was voiced by vast number of stakeholders in Australia at that time that seemed to possess limited influence on issues of management of entities where they were stakeholders (Wempe, 2008, 18, p549-53).
When establishing a theory it is significant to address all the aspects it is advocating for in a clear and precise way. This is to help avoid contradictions an inability to establish ethics in such postulations. Despite this collective inclusion of people who are an important part of a process is significant. This is because it promotes the sense of ownership and ethical values in the operations of such entities.
Hasnas, J 2013, Whither stakeholder theory? A guide for the perplexed Revisited. Journal of Business Ethics, 112, p47-57.
Miles, S 2012, Stakeholder: Essentially contested or just confused? Journal of Business Ethics, Prentice Hall, New York.
Parmar, B, Freeman, R, Harrison, J, Wicks, A &Purnell, 2010, Stakeholder theory: The state of the art. Academy ofManagement Annals, Prentice Hall, New York.
Purnell, L & Freeman, R, 2012, Stakeholder theory, fact/value Dichotomy, and the normative core: How Wall Street stops the ethics Conversation. Journal of Business Ethics, 108, p285-98.
Wempe, B 2008, Understanding the Teparation thesis: Precision after the Decimal point? Business Ethics Quarterly, 18, p549-53.
I hope you enjoyed reading this post on Stakeholder Theory and how it affects business. There are many other titles available in the business management and MBA dissertation collection that should be of interest to MBA students and academic professionals. There are many dissertation titles that relate to other aspects of business such as strategy, leadership, international business, mergers and acquisitions to name a few. It took a lot of effort to write this post and I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.
This article is intended to evaluate the case study on Electron Corporation and highlights main key points pertaining to team building as well as enhancing the effectiveness of team productivity, established team environment and performance. Building of teams and effectiveness of team performance can be derived from various primary attributes (Zaccaro & Klimoski, in press). Teams are firstly needed to successfully contribute their individual efforts because their certain needs and responsibilities will form the basis of the collective success of the team. Secondly, since teams need to operate in complicated and ever changing organizational environments, they need to tackle multiple organizational team characteristics such as conflicting agendas, load of greater information, swift changes in the situations as well as enhanced dynamic changes (Zaccaro, Rittman & Marks 2001).
A small overview of the company includes; Electron is a small manufacturing organization established in 1997 in North of England. It manufactures components for telecommunication division. It employs 150 people along with 90 people in the manufacturing division. It was originally a department of a huge telecommunication organization and the Electron’s team bought the component manufacturing section as a portion of an outsourcing plan presented by the parent company in 2007. Electron has acquired both full time and part-time employees. In 1990s, its management realized that the company was striving for increasing competition and innovation in the industry. So in order to enhance their competition in the market, they have found the need of a more proficient and effective production procedures while emphasizing on enhancing organization’s culture, customer services, improved performance and responsibility and loyalty towards teamwork.
However, the subsequent sections of the assignment involve literature review which will cover the benefits and dysfunctions of teamwork. The Tuckman’s (1965) model of team building is also been employed in relation to the case study which demonstrates how teams must be efficiently formed. Whereas, the last sections will demonstrate the conclusion of the study as well recommendations on how to enhance the team performance more effectively and the steps that need to be taken for creating a subtle team environment.
The use of teams seems to provide several advantages; they may not be the most appropriate tactic for all types of organizations and not all of the organizations face similar and all challenges imposed by the teams. The influence of teamwork (both optimistic and pessimistic) is dependent upon several features such as company’s culture and environment, efficiency of team leadership, company’s efforts etc. Primarily, a team can be described as a small group of people along with a set of performance objectives, who are responsible to a common goal and the attitude they carry themselves mutually responsible (Katzenbach & Smith 1993). This definition explains that organizational teams should be of a manageable size and all of the team members should be accountable to achieve the shared team objectives. Moreover, all of the team members should be mutually responsible towards their activities and the results of those activities.
The Enticement of Working with Teams
The power of team work roots from several factors particularly when teams are employed. Various researchers demonstrated that teams are increasingly being employed as a response to ever increasingly global marketing competition (Heap 1996; Roufaiel & Meissner 1995; Sundstrom, De Meuse & Futrell 1990). Because of this increase in competition, it is also viewed that catering niche markets is also a growing concern. Since, electron emphasizes on enhancing organization’s culture, customer services and improved productivity; as a result, Electron manufacturers not only need to compete on cost but also strive to compete on innovation by establishing distinctive goods and services that could not be countered by the other rivals in the market. However, this will originate a problem where the company is not supposed to rely on mass production as well as economies of scale in the industry.
Most organizations still believe that working with teams is the only answer to this problem (just as Electron did). In their view teams are the source to optimize company’s innovation as employees have increased self-sufficiency, increased involvement and autonomy for making decisions (Harvey, Millet & Smith 1998). The employees no longer need to be guided about what is required to be done. In fact, they are provided with the objectives or develop objectives along with their team leader and then give autonomy to choose the best way in order to accomplish those objectives. Additionally, organizational innovation can also be optimized if teams are able to provide other enticements to the organization the situation in which they operate.
For instance, firstly, teams can optimally utilize human resources since they permit companies to achieve access to a person’s knowledge and capabilities (IRS Employment Review 1995). Albeit, the enhanced intricacy of the companies means that not all the managers know everything regarding each and every facet of the company’s operations. In this circumstance, it is important to utilize knowledge and capabilities of the employees/teams. Secondly, teams can be utilized to optimize company’s learning as employees are capable to design best strategies being suited to their work objectives (Wageman 1997). Thirdly, Teams are also capable to enhance individual’s performance levels and his/her efficiency, thereby establishing a synergy (Katzenbach & Smith 1993). Finally, team work is greatly associated with various numbers of objectives, tasks and additional accountability for each member of the team, which in turn resulted in enhanced job satisfaction, employee motivation and more work commitment. This will also result in lower employee turnover and absenteeism, thus, decreasing company’s costs and enhancing company’s knowledge base (Kirkman & Shapiro 1997).
Dysfunctions or Challenges Accompanied Teamwork
The employment of teams is primarily a change to an organization as well as a developmental procedure. Thus, teams can be easily affected to any challenge that might emerge during an organizational change. Particularly, resistance among employees may occur when they are needed to work along with other employees who are unfamiliar to them. In this way, teams are more likely to have broken established social relationships. This has already done in the Electron when huge number of new employees was hired and was integrated into one of the Electron’s teams. Those workers were new to their team’s values and consensus where they exerted greater challenge to the already existed relationships among the older employees.
In accordance to Bettenhausen (1991), one way to cope this problem is by forming teams. Building of teams will enhance group productivity by enhancing communication, minimizing conflicts and establishing greater bonds and commitment among all the working team members. Resistance among employee can also occur as a result of other factors. For instance, teamwork may need job enlargement where each team member is required to perform his/her conventional role along with his/her team role (IRS Employment Review 1995). In this circumstance, it is essential to minimize their certain responsibilities or to change the structure of their rewards or compensation.
Besides job enlargement, team work is also coherent with autonomy, ownership and additional commitments. Managers frequently perceive that employees must participate in decision making instead of simply being directed of what needs to be done. However, this might be true for certain situations but not for all situations. This will, in turn, may resulted in employee job dissatisfaction, increased employee turnover and/or reduced work productivity. The similar case is also viewed in Electron, when it hired new employees on temporary basis and let the managers to decide who must be hired on as full-time employee. Those workers initially were also unfamiliar with the team procedures and were expected by the managers to know the team’s values and conform and act accordingly to their team’s norms. Teams at Electron started exerting their concertive control over the new individuals which as a result new employees began controlling themselves and those norms and values become rationalized rules for the new members. There is no simple solution for catering such problem; however, training or changing positions can be probable within the company.
Other associated problems with “empowered teams” originate when there is a lack of trust in the team when they are no longer trusted enough to participate in decision making. This will result in teams and organizations losing full potential to accomplish their desired objectives. The situations in which teams are needed to seek consent before executing any idea or timeliness, ownership is likely to reduce. Organizational innovation will also decrease as teams are compelled to suggest ideas that will be likely to accept (Nahavandi & Aranda 1994). Moreover, team members may also perceive that their management is paying insincere respect to their proposed ideas of teamwork which will certainly result in reduced employee morale.
It is also viewed that when teams are involved in making decisions, they take more time than the system they reinstate. This is also needed where team coordination is required and where team members are independent. This issue can be partly cope by the formation of the team, but this also requires continuous training and development of groups teams. Such kind of training can be specifically appropriate for the new hired staff as there may be no established procedures for them to follow. Also, for effective teams, there must be strong coordination among them (Harvey, Millet & Smith 1998). Similarly, the lack of participation in decision making and coordination among employees for building of more strengthened team culture is seen in Electron’s eight teams (red, blue, white, green, silver, aqua, purple and yellow). This is due the fact that the older and long tenured employees have tried to impose strict concertive rules and procedures to conform to the group norms.
In case of organizational environmental changes and developmental initiatives, culture of the organization and environment must also be considered. It must not be perceived that the objectives and values of the individuals are similar to those of their management or congruent even across the entire organization. The attitude of individuals towards teams will demonstrate the success of those teams. If teams need to be executed more successfully, the extension of already existed values must be there (Carr 1992). Therefore, Electron when working with teams also demand shift in attitudes that a company may turn to it when it wants to accomplish a cultural shift, for instance, when it becomes more quality or customer oriented (IRS Employment Review 1995).
Five Team Development Phases as Proposed by Bruce Tuckman
This model as proposed by Bruce Tuckman (1965) tends to highlight and guides the areas where teams can be successful and/or become failure to achieve desired team goals. For forty years, Tuckman’s classical model of team development delivers ease and new perceptions to managers to either charge to run a team or attempt to function within a team while assuring each member that they are not alone and that the uneasiness is a normal part of the team journey towards an efficient and pleasant unit. Tuckman speculates that these stages are essential and unavoidable. In order for the Electron teams to grow, to face the hurdles, to cope up with the problems, to search for solutions, to organize work and to deliver desired outcomes; these five phases can be elaborated as follows.
Phase One: Forming
In this first phase of team building, Electron teams must be formed. Where the attitude of the individual is driven by the desires which are likely to be accepted by the other individuals and prevent any controversy or conflict. Solemn problems and attitudes are prevented and people are required to concentrate on their busy work routines. Individual members also try to gather knowledge regarding each other, regarding the scope of the task and how to reach it. This phase is considered to be an easy stage but prevention of controversies and conflicts mean that not much objective is actually accomplished. The teams will together meet and learn about various opportunities and confront and then agree on objectives and start to tackle the tasks and objectives. Members of the team will quite behave autonomously.
Each team member must concentrate on his/her team leader by accepting the leader’s guidance and authority while maintaining a respectful distant association with other individuals. At this phase, the leader must open two way communications and be ready to reply any of the queries that may come on his/her way; limitations, potency and vulnerabilities must also be tested including those related to the leader.
Phase Two: Storming
Each Electron group then will enter into the next stage where different ideas for competition are considered. The teams address distinct issues such as what kind of problems they need to solve, how they must function autonomously as well as mutually with each other and which leadership model they must accept to follow. Each team member will have the privilege to confront others’ ideas and perceptions. In most cases storming is solved more quickly while in others, most of the teams never leave this phase (this depends on the maturity of the team). Most team members concentrate on the ins and outs to dodge the problems. This second phase is essential for the teams to grow which could be controversial, distasteful and often excruciating to the team members who are opposed to the conflicts. Tolerance of each team member must also be emphasized because without patience, teams will likely to fail.
This stage can be proved destructive for the teams if they are permitted to go out of control. Managers/supervisors of the teams might be more accessible but need to be directive in their professional and decision making attitudes. The teams therefore, will solve the problems and differences and contribute more comfortably with one another. In this way, they cannot be judged and can share their stand points and ideas easily with each other.
Phase Three: Norming
At this phase of team building, Electron managers will set one objective and one mutual plan for the team to accomplish. Some of the members will be motivated to give up their certain ideas in order for the team to effectively function. At this phase, each team member feels his/her commitment to the team and has the aspiration to work towards the success of the team’s objectives.
Phase Four: Performing
It is probable for certain teams to reach to this stage. The high performing teams can be able to work as one unit as they able to identify best approaches to get their job done mutually, comfortably and without irrelevant controversy or the requirement of any external management because they become motivated and knowledgeable by this stage. When the members of the Electron teams are now skilled, independent and experienced, they can tackle the process of decision making without the burden of any supervision (however, supervisors are also directive and participative at this stage but team make more appropriate decisions). The Electron teams must pass through this stage several times because of the global and organizational dynamic changes.
Phase Five: Adjourning (and Transforming)
This stage involves un-forming the groups which sometimes create a sense of loss often feel by the team members. This stage will include ‘dissolution’ which leads to the end of the Electron team members’ roles and responsibilities, the accomplishment of objectives and minimization of reliance. This procedure can be traumatic specifically when the dissolution is not planned. Thus, team members must be acknowledged at this phase that at the successful achievement of the productivity levels and outcomes, teams will be dissolved and that new teams will emerge for new targets.
In order to execute and sustain teams to operate effectively within the organization, sufficient organizational changes are required to be considered as well as various issues required to be catered. Those changes not only influence team members but also the responsibilities and commitments of the supervisors and managers, the organizational framework, work procedures and techniques and employees’ social bonds. That’s why due to the dynamic environmental changes, Electron manufacturers also face multiple challenges which occur as a result of teams’ implementation. However, it is also evident that in case of teams’ implementation, various organizations will not opt for going back to their prior organizational frameworks (IRS Employment Review 1995). Consequently, it is also seen that teams, in spite of the emerging challenges, are capable enough to offer several advantages to firms in the long run.
In case of Electron manufacturers, new hired team members were unknown of the team’s values, norms and consensus that proved greater challenge to the already existed relationships among the older employees. Moreover, managers were also expecting that each new member must be familiar with the procedures and norms of the groups to act accordingly and conform themselves to those groups. However, besides the implementation of their concertive procedures and motivating employees (by providing them rewards), Electron teams still lacking certain key aspects which formed the basis of a strengthened team. Such as two way communication, participation of employees in decision making, lack of trust among team members, sharing of opinions and ideas among each other to resolve any critical issue regarding production and enhancement of work performances and employees’ morale.
Thus, as a result of this, Bruce Tuckman’s (1965) model of team building is employed in the context of Electron manufacturers. According to his model, teams are to be developed step by step by ensuring performance effectiveness in each team building phase. This model consists of five stages i.e. forming, storming, norming, performing and adjourning. This can be concluded as Electron must forge its eight teams in a manner such that each individual must know his/her accountability, change his/her attitude according to the organizational culture so that teams will effectively function with minimum conflicts and controversies (forming). Second, teams must be encouraged to share their wide scope ideas and opinions and can confront the other’s ideas for making better decisions and improved productivity (storming).
Third, Electron managers must establish one objective and direct the team to mutually accomplish the objective which enhances the members’ sense of responsibility towards the team success (norming). Forth, when Electron’s team members become more experienced and capable enough, they will be able to make decisions without any supervisor which in turn, gives employees more autonomy, understanding of each other’s roles, increase employee social relationships, enhance their morale as well as enhance work productivity (performing). Finally, when the production target is successfully achieved, teams will be terminated at the final stage so that new teams will be developed to achieve new production targets with the passage of time and make the organization subtle to dynamic industrial changes with the help of new teams’ formation.
Following are some of the recommendations that can be further considered for making organizational teams more strengthened and intensified.
In accordance to Tuckman’s strength deployment inventory (SDI) model, employees must be nurtured with the help of managers without directing rewards in return. They must be motivated to enhance their self-worth by accomplishing tasks and other significant orders.
Fulk, Bell & Bodie (2011) also employed Tuckman’s five stages of team development to enhance team performance. According to them, the first stage ‘forming’ must also involve hiring and selecting right individuals at the right time who also possess the qualities of solving critical problems, controversies, communication gaps, decision making, setting of plans and goals and organizing tasks within teams.
At the second stage ‘storming’, managers must anticipate to unexpected events that are likely to lead the whole team to the conflicts which are likely to arise as a result of differences in opinions, styles of working and priorities. The managers must be vigilant to take all those conflicts into consideration and encourage teams to take appropriate and productive actions towards mitigating those conflicts.
The third stage ‘norming’ must involve working with teams with specific as well challenging goals and those goals must be present in writing. Here team performance can be enhanced if teams revisit their initial goals, clarification of the goals and the commitments towards those goals.
At the fourth stage ‘performing’, managers must monitor their teams ‘objectives and their feedback on a regular basis in order to enhance teamwork. That feedback must be timely basis as well as concrete to be acted upon.
At the final stage ‘adjourning’ the team members instead of felling a sense of loss, team members must be expected to enjoy their success resulted in successful completion of the task.
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Fulk, H.K. (2011) Team Management by Objectives: Enhancing Developing Teams’ Performance. Journal of Management Policy and Practice, 12(3), 17-26.
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