How can effective management provide a better business environment that benefits all parties, including employees, employers, and customers?

Building on the themes discussed in the paper from this week, discuss the following issue from your own personal perspective.  Draw on your own experience and knowledge. Put yourself in the shoes of both an employer and employee.

  • How can effective management provide a better business environment that benefits all parties, including employees, employers, and customers?  How does this compare to situations in which self-employed individuals conduct business on their own without management policies

I have always worked for large consulting firms (number of employees > 10,000). I report to middle management, but being in the industry for more than 10 years now, I have fair amount of idea how the industry more or less functions, although I have no knowledge of what goes on in board meetings or among the organizational leadership. But I will try to answer the questions with the knowledge I have.

            As an employer the leadership or the executives need to consider employees, customers,, shareholders. The number of stakeholders are more in case of a bigger publicly listed company. While the leadership tries to attract the best talents, wants to provide great service to customers and in result create wealth for the shareholders, they means they choose do not always produce the results they intend.

            I started working in the year 2007, so I do not have much experience before financial crisis, but after 2008 I noticed the Organizations I worked for focused more on cost savings from every possible angle. And intense competition from competitors put a pressure on profits too. The leadership incentives the sales team based on the profits the company can make, and that has made the middle management shift the focus from product quality or customer satisfaction, and they are more focused on short term profit from projects.

            In Code of Conduct of any organization the leadership talks about putting customers first and leadership should stick to it. Incentivizing the employees per their role based contribution is a good way to go. The leadership or management team should promote a transparent environment where employees and customers can provide feedback directly to improve the work environment and the experience. Revenue and profit should not be prime focal point, businesses or organizations should focus on providing great service and as a result of that service the business would grow and generate more revenue.

            Leadership often implement internal audits to make sure best practices are being performed, there should be another filtering system to find out if customer is being manipulated or exploited by the sales team for bigger bonus, or they should change the incentive system and it should not be revenue linked. That way the management team can make sure that customer is not being exploited, over promised and employees are not being exploited or pressurized to complete 10 days’ work in 5 days to increase profit. But this might result in slower growth of business and slower wealth generation for shareholders, but the management team will have to manage expectation of everyone involved.

Small business owners or self-employed people can stick to ethics and value avoiding any conflict or confrontation. If I as a self-employed person want to serve my customer the best way possible, there is no one to stop me from that. I see managers try to over sell and take advantage of ignorance of customer to generate more revenue, and it happens in my profession. I think self-employed person can easily avoid such wrong doings, eventually the customer might understand and gain trust and as a result the small business or self-employed person will gain more business. Since there are less stakeholders, no shareholders or managers to report to, it is probably easier to be ethical without feeling pressured. But, I understand there will always be a pressure of generating profit to cover the bills.

            Since there won’t be any leadership or management, there will be no audit or check either. And that make it easier for the self- employed person to be unethical. But it shows how shortsighted the person might be. Who does not care about building a long term relation with the customer or may be does not care for return customers. So, any self-employed person, should be ethical but then whether or not he will be, that is totally up to him. But with current systems where customers can post reviews, such as Angie’ List or Yelp, it is better for the self-employed persons to be ethical to gain business, bad ethics will attract bad feedback and in result that will impact business negatively.

Author: pachubabu

I love trying different cuisine, hiking, travelling and blogging about personal finance ,investing & health/fitness