Management Control in Corporate Culture


By

Ritesh Kumar Srivastava
(B.Tech IT)
Associate Consultant IT
ICFAI National College
Gorakhpur
 


'What does corporate culture mean to your organization? How do you ensure that the key features of the culture you want, e.g. work-life balance, career growth, industrial safety and so on, permeate your organization?

Most CEOs want to have strong organization culture and committed and motivated employees. The analysis of control system must be tabulated on gap between desire and reality, based on observation and experience, which often caused by internal & external pressure. ORGANISATIONS more often than not lapse into a 'default' culture. This is often shaped by a few employees who have managed somehow to claim their share of voice within the office and allowed by the vast majority of employees who give in to this situation. Unfortunately, this 'default' culture may not always be what the organization needs to succeed in the near future. Some of the key variables are ::

* RESPECT FOR THE INDIVIDUAL:

Take for example, if a staff has a family relationship problem or is in monetary difficulties, it affects his morale and performance at work. At the same time, staff with problems at work can also bring stress back home. This can end up in a vicious cycle leading to an unhealthy downward spiral in both work and family life. The approach must be to instill true belief and adoption, among all the employees, of key corporate value - that it is the business to offer comprehensive and efficient data recovery services to all clientele through innovation and creativity. The organizational cultures in most companies often reflect the personal values and work ethics of their founders. They are expressed explicitly through the company's core values, vision and mission statements. The culture supports the organization's goals and is inseparable from the leadership style of the CEO. Though the organizational values do not change, every CEO has his/her own interpretation, thus, refreshing the corporate behavior.

"MANY people often wonder why GE is consistently voted the World's Most Respected Company. Some shake their heads in disbelief when they hear we have had less CEO changes, this past century, than the Vatican has had Popes. A key reason for this, I believe, is the GE leadership's ability to create a supportive organizational culture. More importantly, GE is able to consistently and conscientiously evolve this culture to suit the times. One of the first tasks for every new CEO of GE is to study the underlying forces shaping the world at his time, re-shaping 'GE culture' to meet the challenges and opportunities for the next 10-20 years ahead. Currently, GE emphasizes a culture of growth. This has several pillars to it. One is to get all our employees externally focused, re-gearing each and every employee's focus on what the customers need and value. Two is to encourage people to take calculated risks and have the courage to move the company in directions we must go: geographically, technologically and product-wise. Three is to develop personal expertise in a subject or functional area, keeping people in place longer to better serve customers better.

- Colin Low GE Aircraft Engines President, Singapore, Philippines & Vietnam

* Customer Service:

Creating a culture of customer service in organization is a challenged innovation.  There are definite techniques to erasing the old ways of relating to fellow managers and employees and instilling a culture where everyone has both internal and external customers.  This revolves around treating each other with the same amount of respect that you accord the guest and trusting each other to do the job. Organizational cultures exist either consciously or unconsciously, we can choose the culture that we want to work within and transmit to our employees and customers.  A guest can feel a 'culture' within a hotel just as a passenger can tell if the airline is serious about customer service. 

"Successful organizations build strong service cultures to delight their customers, attract and retain their staff, creating strong bonds of loyalty for the future.

"Achieving these results requires world-class training and proven culture-building techniques."
                                                                                                                                                    
Ron Kaufman

The only question that remains is what value do you place on your guests' experience?

Solution occurs in these questions itself …

o Measuring Parameters of Customer services culture in an organization
o What are the technologies improved the customer experience in most companies?
o Is It Possible To Measure or Assess Excellent Customer Service?
o What Common Mistakes Are Made When Choosing Customer Service Metrics?
o What Should Customer Service Training Include?
o What Are The Most Essential Customer Service Skills?
o What Types of Customer Service Situations Should Employees Be Trained in and Prepared For?
o Why is a systems approach so important to improving customer service?
o What's the relationship between "internal customer service" and customer service to paying customers?

* Dedication to work Towards Excellence:

o Relationship with co-workers
o Security of Employment
o Working time
o Interests in job
o Relationship with the Top Management.
o Welfare provisions
o Workload
o Competence of Management.
o Security of employment
o Training & re-training
o Promotion opportunities
o Pay and fringe benefits
o Welfare provisions
o Allowances

* Decentralized business

Decentralization has three general benefits: (1) It encourages motivation and creativity; (2) it allows many minds to work simultaneously on the same problem; and (3) it accommodates flexibility and individualization. The importance of these benefits varies greatly, but they are often especially important in certain industries and business functions. For example, the success of most professional services organizations (such as consulting, software development, and law) hinges on the motivation and creativity of their professionals. Consequently, these organizations are especially good candidates for decentralized decision making. Creativity and innovation are also often particularly important in functions like engineering, sales, product design, and information technology. Here, too, decentralization will often pay off.

Decentralization is the policy of delegating decision-making authority through out an organization, relatively away from a central authority. Some features of a decentralized organization are fewer tiers to the organizational structure, wider span of control, and a bottom-to-top flow of decision-effecting ideas.

In a more decentralized organization, the top executives delegate much of their decision-making authority to lower tiers of the organizational structure. As a correlation, the organization is likely to run on less rigid policies and wider spans of control among each officer of the organization. The wider spans of control also reduce the number of tiers within the organization, giving its structure a flat appearance. One advantage of this structure, if the correct controls are in place, will be the bottom-to-top flow of information, allowing all decisions among any official of the organization to be well informed about lower tier operations. For example, an experienced technician at the lowest tier of an organization might know how to increase the efficiency of the production, the bottom-to-top flow of information can allow for this knowledge to pass up to the executive officers.

The lower the level where decisions are made, the greater is the decentralization. Decentralization is most effective in organizations where subunits are autonomous and costs and profits can be independently measured. The benefits of decentralization include: (1) decisions are made by those who have the most knowledge about local conditions; (2) greater managerial input in decision-making has a desirable motivational effect; and (3) managers have more control over results. The costs of decentralization include: (1) managers have a tendency to look at their division and lose sight of overall company goals; (2) there can be costly duplication of services; and (3) costs of obtaining sufficient information increase.

* TOTAL QUALITY MANAGEMENT

The term "Total Quality Management" is actually a bit misleading. It does mean improving quality (reducing defect rates, meeting products spec's, etc.) and giving quality at least equal, if not higher, priority relative to concerns about volume, cost, and schedule, but it also means much more than that. TQM redefines quality. The new definition might be summed up as: meeting or exceeding the customer's requirements with respect to cost, delivery, product features, and quality. This broad redefinition is markedly different from the traditional business strategy of most American companies. For generations, American management has been driven almost exclusively by short-term profit goals and standardization, focusing on "getting the products out". TQM is driven by opposite long-term growth goals and flexibility, focusing on the "bringing the customer in".

A number of general principles, developed by Deming, Juran, Crosby, and the Japanese, have been adapted by U.S. companies to guide the process of focusing on the new "quality". The main principles are; (1) Customer Satisfaction, (2) Continuous Improvement, (3) Extensive Measurement, and (4) Employee Involvement.

1. CUSTOMER SATISFACTION: the ultimate goal of TQM is to please customers. Meeting or exceeding customer requirements means shifting emphasis from the short-term to the long-term, from the product to the customers-listening to them, adapting to their needs. TQM teaches that customer satisfaction is not only a measure of quality; it is a whole new approach to doing business.

2. CONTINUOUS IMPROVEMENT: American companies have tended to think in very finite, short-term, and programmatic ways. If a problem arises, there must be a program to fix it. End of story. The message of continuous improvement is that, in the global business arena, things are never truly going to be "fixed".

3. EXTENSIVE MEASUREMENT: For customer satisfaction and continuous improvement to be possible, proponents of TQM believe it is essential to measure the results of the company and to perform measurements in radically new ways. In the past, most firms did relatively little serious measurement. When they did, they relied mostly on traditional, short-term financial criteria to measure overall results, and a series of isolated, somewhat haphazard, micro-measures of departments or functions to evaluate internal initiatives.

4. EMPLOYEE INVOLVEMENT: Widespread employee participation in local decision making is central to the logic of TQM. Employees must be empowered to be flexible and make decisions if customers are to be satisfied. They must be able to take action to prevent and solve problems, and be committed to the organization.

TQM leadership from top management

TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed - instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals. These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration.

Actions based on facts

The statistical analysis of engineering and manufacturing facts is an important part of TQM. Facts and analysis provide the basis for planning, review and performance tracking, improvement of operations, and comparison of performance with competitors. The TQM approach is based on the use of objective data, and provides a rational rather than an emotional basis for decision making. The statistical approach to process management in both engineering and manufacturing recognizes that most problems are system-related, and are not caused by particular employees. In practice, data is collected and put in the hands of the people who are in the best position to analyze it and then take the appropriate action to reduce costs and prevent non-conformance. Usually these people are not managers but workers in the process. If the right information is not available, then the analysis, whether it be of shop floor data, or engineering test results, can't take place, errors can't be identified, and so errors can't be corrected.

A TQM culture

It's not easy to introduce TQM. An open, cooperative culture has to be created by management. Employees have to be made to feel that they are responsible for customer satisfaction. They are not going to feel this if they are excluded from the development of visions, strategies, and plans. It's important they participate in these activities. They are unlikely to behave in a responsible way if they see management behaving irresponsibly - saying one thing and doing the opposite.

Product development in a TQM environment

Product development in a TQM environment is very different to product development in a non-TQM environment. Without a TQM approach, product development is usually carried on in a conflictual atmosphere where each department acts independently. Short-term results drive behavior so scrap, changes, work-arounds, waste, and rework are normal practice. Management focuses on supervising individuals, and fire-fighting is necessary and rewarded.

Awards for Quality achievement

The Deming Prize has been awarded annually since 1951 by the Japanese Union of Scientists and Engineers in recognition of outstanding achievement in quality strategy, management and execution. Since 1988 a similar award (the Malcolm Baldrige National Quality Award) has been awarded in the US. Early winners of the Baldrige Award include AT&T (1992), IBM (1990), Milliken (1989), Motorola (1988), Texas Instruments (1992) and Xerox (1989).

* EMPOWERMENT OF PEOPLE:

o ASSESSMENT OF NEEDS -- the first step. This sounds simple, but we are often in too much of a hurry. We implement a solution, sometimes the correct intervention but not always. But we plan, very carefully and cautiously, before making most other investments in process changes and in capital and operating expenditures. We need to do the same for HRD -- implement the appropriate planning. This needs assessment and planning will lead to several possible ways to improve performance. (Of course, one of these is to do nothing! -- we may decide to focus on other activities with greater impact and greater value.)

o PROGRAM DESIGN, DEVELOPMENT & EVALUATION. We need to consider the benefits of any HRD intervention before we just go and do it: What learning will be accomplished? What changes in behavior and performance are expected? Will we get them? And of prime importance -- what is the expected economic cost/benefit of any projected solutions?

o TRAINING & DEVELOPMENT -- acquiring knowledge, developing competencies and skills, and adopting behaviors that improve performance in current jobs, include: adult learning theory and applications, instructional systems design, train-the-trainer programs, and instructional strategies and methods.

o ORGANIZATION DEVELOPMENT -- the diagnosis and design of systems to assist an organization with planning change. OD activities include: change management, team building, learning organizations, management development, quality of work life, and management by objectives, strategic planning, and participative management. organizational restructuring, job redesign, job enrichment, centralization vs. decentralization, changes in the organization's reward structure, process consultation, executive development, action research, third party interventions, and more. We will discuss these in future articles.

o CAREER DEVELOPMENT -- activities and processes for mutual career planning and management between employees and organizations. Changes in our organizations (including downsizing, restructuring, and outsourcing) are resulting in more empowerment for employees. The responsibility for our own career development is downloaded to us. (Translation: career ladders are gone; career development is now the responsibility of the individual.) Later in this series we will explore strategies and tactics to survive and prosper in this new workplace environment.

o ORGANIZATION RESEARCH & PROGRAM EVALUATION -- an exploration of methods to evaluate, justify, and improve on HRD offerings.

o THE HRD PROFESSION(S) AND PROFESSIONAL ORGANIZATIONS -- we plan to list and briefly describe the principal HRD organizations, their missions and goals, and their addresses and contacts.

o PERFORMANCE APPRAISAL --Once a talented individual is brought into an organization, another function of HRM comes into play—creating an environment that will motivate and reward exemplary performance. One way to assess performance is through a formal review on a periodic basis, generally annually, known as a performance appraisal or performance evaluation. Because line managers are in daily contact with the employees and can best measure performance, they are usually the ones who conduct the appraisals. Other evaluators of the employee's performance can include subordinates, peers, group, and self, or a combination of one or more (Mondy and Noe, 1996).

o COMPENSATION AND BENEFITS-- Compensation (payment in the form of hourly wages or annual salaries) and benefits (insurance, pensions, vacation, modified workweek, sick days, stock options, etc.) can be a catch-22 because an employee's performance can be influenced by compensation and benefits, and vice versa. In the ideal situation, employees feel they are paid what they are worth, are rewarded with sufficient benefits, and receive some intrinsic satisfaction (good work environment, interesting work, etc.). Compensation should be legal and ethical, adequate, motivating, fair and equitable, cost-effective, and able to provide employment security (Cherrington, 1995).

o EMPLOYEE AND LABOR RELATIONS--Just as human resource developers make sure employees have proper training, there are groups of employees organized as unions to address and resolve employment-related issues. Unions have been around since the time of the American Revolution (Mondy and Noe, 1996). Those who join unions usually do so for one or both of two reasons— to increase wages and/or to eliminate unfair conditions. Some of the outcomes of union involvement include better medical plans, extended vacation time, and increased wages (Cherrington, 1995).

o SAFETY AND HEALTH--Not only must an organization see to it that employees' rights are not violated, but it must also provide a safe and healthy working environment. Mondy and Noe (1996) define safety as "protecting employees from injuries caused by work-related accidents" and health as keeping "employees free from physical or emotional illness" (p. 432). In order to prevent injury or illness, the Occupational Safety and Health Administration (OSHA) was created in 1970. Through workplace inspections, citations and penalties, and on-site consultations, OSHA seeks to enhance safety and health and to decrease accidents, which lead to decreased productivity and increased operating costs.
 


Ritesh Kumar Srivastava
(B.Tech IT)
Associate Consultant IT
ICFAI National College
Gorakhpur
 

Source: E-mail December 2, 2006

     

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