In this paper the changing paradigm in management thought and approach to organizational change and cultural has been analyzed. A new approach to redesigning of organizational culture has been recommended by the authors. The new approach has been termed as Management by Values (MBV).
The authors Shimon L. Dolan and Salvador Garcia have written a book titled 'Managing by Values' and the paper under review is titled 'Managing by Values 'Cultural redesign for strategic organizational change at the dawn of the twenty first century' is based on the book. The philosophy behind management of organizations essentially the approaches of Management by Instructions (MBI) and Management by Objectives (MBO) have become redundant in the present times. Therefore there is a need to reassess the guiding cultural principles that govern the functioning of organizations in the 21st century.
The authors believe that the complexities of global business conditions are better addressed by the principles of Management by Values (MBV) than by Management by Instructions (MBI) and Management by Objectives (MBO). MBV proposes to redesign cultural dynamics in an organization. The idea has been around academic circles since the middle of the twentieth century. MBV is all encompassing by including ethical and ecological issues for strategic leadership decisions and the other organizational activities.
MBV is defined as a strategic leadership tool that has three purposes particularly that of simplifying, guiding and securing commitment all across. The culture of the company thereby evolves by values, symbols and concepts that drive the functioning of the organizations. MBV evolved gradually from MBI to MBO and then finally to the MBV concept. The evolution was required by the four needs of giving quality and satisfaction to the customers, the need for professionalism, and the need for evolution from 'BOSS' to leader or facilitator and finally the need for having flatter organizational structures.
The authors also have vividly answered the concept of vagueness that is often attributed to a talk about 'Values'. They have rationalized that values tell what things should be, like a talk about quality coming first, the values give birth to objectives which tell what an organization is going to achieve like complying to International Organizational Standards (ISO) certifications and finally there comes reality which is what the organization has achieved and it is represented in the form of issue of official quality certifications.
Finally, the authors accept that MBV may sound to be chaotic in nature but they rationalize that company is itself a chaotic system and an open system is highly unpredictable. Under such systems 'values' turn out to be enablers that help in strategic vision of the organization that lead to long term growth. Values also help is shaping organizational cultures' that is sustainable and effective.
A Smaller Slice of the Pie (Issues and Solutions)
The case is about a company named Allworld Foods, an iconic brand in Australian Food Company. The company grew from strength to strength and was an undisputed leader of the market unless things went wrong. It was a strong market leader during 100 years with many a success stories with many situations when it had emerged as winner. The case happened about 10 years ago when Allworld Foods's major competitor Smith's was bought out by a private equity firm Mercury Consolidated. The problems in the case can be identified as under:
1. Allworld Foods was unfazed with the growth and the emergence appearance of its major competitor.
2. The company stuck to its 'weather the storm' strategy that of increasing aggressive advertising and increased pricing.
3. In two years dividends were down, and customers were not coming back.
4. Staff was utterly de-motivated.
5. Customers were unhappy with surveys revealing increased dissatisfaction with the services and the products.
The weather the storm policy of the company seems to have taken the customer for granted. The customers are moving away because there are better alternatives available.
The solutions to the case can be sought in the Management by Values (MBV). The management of the company needs to look at the following:
1. The need for quality and customer orientation: The competitive conditions have required the company to add value to the productive processes to ensure that the customer is extremely satisfied with the price as the value for the product quality that is provided (Dolan and Garcia, 2002). The company should start changing the pricing strategy instead of aggressive pricing to compassionate method of pricing which world give value for many to the customer.
2. The need for greater professionalism: The employees need to be treated as mature individuals who can determine their own performance criteria and promote them to be autonomous, flexible and committed employees. (Dolan and Garcia, 2002). The employees need to be empowered to think creatively.
3. The need for transformational leaders: Allworld's Foods should take a leaf out of the Hewlett Packard, which said, 'a boss should be the facilitator of the success of his colleagues' (Dolan and Garcia, 2002). As (Bass, 1996) propounded that a leader should not lose sight of its essential characteristics, the capacity to inspire, to channel the efforts and to hold together teams of professionals.
4. The need to have flatter and agile organizations: The Company should do away with the bureaucratic structures with too many watertight compartments. There should be flatter structure to empower all the employees to freely participate in the organizational development (Dolan and Garcia, 2002). The management of Allworlds needs to straighten up the things with larger participation of the employees.
5. Restructuring Values: Quality and price are the two areas to be restructured. The Allworld's case is that of need for change in a high energy chaotic system where change in the order is a must. As told by (Flower, 1993) in the kingdom of chaos anything and everything may happen and strange attractor may come into play.
In this every changing organizations system value based management within the organization in handling the employees and out of the organization the customers are the only way to succeed and sustain.
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