Management Report

Management Report.............................................................................................. 1
Introduction........................................................................................................ 3
Contemporary Management Issue......................................................................3
Leading and Managing Today..........................................................................4
Planning and Change Management in Unstable Economic State.....................4
Leading and Managing in the Future...............................................................5
Managements response to the unstable state of economy...............................5
Management Skills Required to Respond Well....................................................6
Conclusion.......................................................................................................... 8
References.......................................................................................................... 9

Introduction
Research studies have suggested that the business environment is getting highly
competitive and businesses are striving hard to meet the demands of this rapidly
changing business environment (Griffin, 2011). Management today face a
number of challenges due to the significant influence of the business
environment on their role and responsibilities in an organisation. It is their
responsibility to ensure that business processes are running smoothly, and the
people working in the organisation are satisfied with their working conditions. It
is not an easy task and management today continue to struggle to identify the
most

competent

way

of

leading

their

organisation

toward

enhanced

competitiveness. According to the contingency perspective, the technique

adopted by management to deal with a particular challenge is contingent on the
unique characteristics of that situation (Lussier, 2011). Every challenge is
different and management adopt different strategies to deal with different
contemporary issues.

Contemporary Management Issue

The findings of the literature suggest that there are a number of contemporary
issues

that

management

continuously

deal

with

today.

These

include

globalisation, ethics and social responsibility, quality, minimum wages, managing

diversity, changing workplace environment, legal responsibilities and economic
conditions (Griffin, 2011). Researchers identified that the economic recession of
2008 resulted in a major challenge for management and many businesses are
still on the path of recovery (Griffin, 2013). Some managers saw it as an
opportunity to cut the cost of their business processes, restructure their business
operations and modify their overall business strategies (Griffin, 2013). Many
businesses such as: Marks and Spencer, British Airways, Jaguar, Honda, Lloyds,
and Royal Bank of Scotland, to name a few, are struggling to maintain their
position in this unpredictable economic state and some businesses even failed to
survive at all - Woolworths, Borders, Land of Leather, etc. (Wood, 2010). It is
clear that in order to effectively deal with the contemporary challenge of
fluctuating economic states, managers must undertake competent leadership
and approaches to lead and manage the future.

Leading and Managing Today

Research studies have suggested that leading in an unpredictable economic
condition is not a small challenge for management however, they can effectively
handle this contemporary issue with the help of transformational approaches to
leadership (Griffin, 2011; 2013). Transformational leadership has been identified
by researchers as an effective way of improving cost effectiveness and
productivity of an organisation in such situations. According to Bass (1982,
Winkler, 2010, p.40) transformational leaders raises the subordinates level of
need (Maslows scale) and energises the subordinate into accomplishments
beyond the subordinates original expectations that may transcend the
subordinates self interests. They lead employees with the help of emotional
intelligence that allow them to identify the emotional as well as basic needs of
employees that on fulfilling will motivate them to perform better for the growth
of the organisation. They basically motivate in accordance to the Maslows
theory of hierarchy of needs which places human needs in an ascending order,
starting from the basic physiological needs followed by safety, acceptance
needs, esteem and need for self actualisation (Koontz, 2010). Transformational
leaders motivate through intrinsic rewards such as training, support and
opportunities to grow. Research studies have identified intrinsic rewards as
motivational and they successfully support management in attaining a higher
level of commitment. Furthermore, transformational leaders use effective
communication strategies to improve employee involvement so that employees
feel valued and perform better. Leading and managing through transformational
leadership

in

an

unstable

economic

state

today

proficiently

supports

organisations in attaining their long term goals.

Planning and Change Management in Unstable Economic State
According to Dessler and Philips (2008), transformational leadership style in the
unstable

economic

state

can

effectively

help

management,

improve

innovativeness of their business processes and create opportunities for the

organisation. Ciarrochi and Mayer (2013) suggested that management requires
emotional intelligence to make competent decisions, as it improves their ability
of decision making. The theory of emotional intelligence suggests that emotional
intelligence is the ability of an individual to manage ones emotions through
communication, understand them and use them to manage and motivate others
(Wharam, 2009). Wharam (2009) stated that emotional intelligence allows
management to plan business strategies effectively, implement changes without
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facing conflicts, be productive, utilise employee skills and emotions to be

innovative and improve cost effectiveness through competent lean management
of business operations. This approach to planning and change management
represents Maslows theory of self actualisation, which suggests a growth
oriented focus drives productivity and performance (Kaur, 2013). In an unstable
economic state, managements motive is to lead their organisation toward
success, which they then communicate to employees with the help of emotional
intelligence, who in return perform better for their personal and professional
growth.
Transformational leaders make effective decisions because they are based on
sound evidences such as financial performance, and objective inputs (Van
Knippenberg, 2013). When transformational leaders use input data that is not
influenced by their own beliefs and judgments, such decisions have high
probability to be accepted by the followers and are effectual in the long term.
Moreover, such decisions, improve a leaders relationship with his followers or
employees

(Van

Knippenberg,

2013).

The

literature

suggests

that

transformational leaders make effective long term decisions, as their decisions

are flexible that can be modified in accordance to the needs of the situation.
Their decisions are easily accepted by their followers, as they trust that their
leader will lead them effectively through every situation (Bass and Riggio, 2005).
Transformational leaders have the ability to turn challenging situations into an
opportunity to progress through effective decision making ability.
Leading and Managing in the Future
The literature suggests that adopting an appropriate leadership style supports
management in leading and managing the future of their employees and
organisation effectively (Griffiin, 2013). Transformational leaders can effectively
manage positive organisational culture for future growth through effective
communication that promotes team performance and improves job satisfaction
levels. Keeping employees satisfied in an unstable economic environment is a
major task for management that can be effectively handled by direct
communication (Anderson and Anderson, 2010).
Direct communication allows management to understand the needs of their
employees who are the backbone of the organisation and play an influential role
in the success of the organisation (Godall et al., 2009). This approach basically
mirrors the social exchange theory that suggests that interactions allow people
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or management in case of organisational context to maximise the impact of

rewards and improve cost effectiveness of business process and changes in
future by exchanging information and understanding the expectations of
employees

from

their

management.

Direct

communication

also

allows

management to reduce uncertainties associated with the future.

The theory of uncertainty reduction in organisational context suggests that
management can reduce uncertainties in employees by communicating the
present economic situation, expected behaviour and their role in supporting
organisations in this situation (Godall et al., 2009). It is clear that economic
instability also creates a number of challenges for employees and by designing
competent reward strategies they can motivate them to perform better for the
global success of the business. Moreover, leading and managing future through
motivation and support allows management to improve long term sustainability
of business by attaining organisation objectives through improved teamwork and
to meet their corporate social responsibility of being considerate towards the
society they work in and with the people they work.

Managements response to the unstable state of economy

Research studies suggest that organisational theory supports management in
tackling contemporary management issues like unstable state of the economy,
as it allows them to improve their operational structures through significant
contribution (McAuley, et al, 2007). The scientific management approach
suggests that management can effectively respond to contemporary challenges
by creating mutual trust between them and employees. The administrative
approach suggests that management can improve organisational structures to
deal with the issues of the unstable state of the economy by improving
coordination

of

business

process,

training

employees

and

planning

for

uncertainties beforehand. Management of many organisations dealt with the

unstable state of the economy by reducing the working hours of employees,
improving the business structure to improve their cost effectiveness and
encouraging employees with the help of intrinsic rewards such as opportunities
for personal and professional growth instead of monetary rewards (Bertocci,
2009). The management approach adopted by leaders depends on their
leadership style; however, effective approaches to deal with the unstable
economic state would include scientific management approach and the human
relations approach.
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The

scientific

management

approach

improves

efficiency,

progress,

and

performance. It provides cost-effectiveness and support in providing better

working and living standard. The best example of a company that adopted this
approach to manage the adverse effects of unstable economic state is Marks and
Spencer, as they not only managed their business operations, but also improved
their image as a socially responsible corporate (M&S Annual Report, 2013). On
the other hand, human relations approach focuses on improving relationships in
the workplace for improving the productivity of the organisation by making an
effective use of emotional intelligence (Hodgetts and Hegar, 2007). The literature
suggests that management can use a single approach to manage challenges or
they can use more than one in combination for improved performance.

Management Skills Required to Respond Well

According to Lussier (2011), management skills required to deal with a challenge
depends on the requirements of the situation. Therefore, in order to respond well
to the challenges of the unstable state of the economy and to yield maximum
benefits through the adopted leadership style and management approach
managers must be able to communicate effectively. Effective communication
allows them to understand the needs of the employees and resolve conflicts
effectively; coordinate tasks and to respond to the needs accurately. Managers
must be empathetic to understand the emotional side of the tasks; however, at
the same time they must effectively consider the technical demands of the tasks
to ensure smooth running of business processes (Daft and Marcic, 2012).
Managers must lead with a goal oriented approach that allows them to ensure
that all the resources required for growth are available.
Management must have the ability to remove uncertainty in order to improve
performance of employees. They must have task delegation ability in order to
share responsibilities with the employees and make them feel valuable by
empowering them. They must be good assessors so that they can measure the
effectiveness of their management approach effectively. Managers must be
effective leaders. They must be persuasive, charismatic, influencing, motivating,
patient, punctual and visionary. All these skills will enable management to
competently manage organisations in an unstable economic environment.

Conclusion
It can be concluded that in order to handle the difficulties created by an unstable
economy state for the management, managers will have to lead their
organisation towards success by adopting an effective leadership style and a
competent

management

approach.

They

will

have

to

keep

employees

encouraged and motivated to ensure that they continue to perform efficiently in

the long term as the economic situations are highly unpredictable. Managers
require a number of skills to respond well but the key skills can be considered as
effective communication, goal- oriented approaches and emotional intelligence
that will support them in managing employees and yielding maximum benefits
for the organisation.

References
Anderson, D. and Anderson, L. (2010) Beyond Change Management, 2nd edn,
CA, Pfeffer.
Bass, B. M. and Riggio, R. E. (2005) Transformational Leadership, New Jersey,
Psychology Press.
Bertocci, D. I. (2009) Leadership in Organisations,

NY, University Press of

USA.
Ciarrochi, J. and Mayer, J. (2013) Applying Emotional Intelligence,

East

Sussex, PSY Press.

Daft, R. and Marcic, D. (2012) Understanding Management, USA, Cengage.
Dessler, g. and Phillips, J. (2008) Managing Now, USA, Houghton Mifflin.
Godall, H., Godall, S. and Schiefelbein, J. (2009) Business and Professional
Communication in Global Workplace, USA, Cengage.
Griffin, R. (2011) Fundamental of Management, USA, Cengage.
Griffin, R. (2013) Fundamentals of Management, 7th edn, USA, Cengage.
Hodgetts, R. and Hegar, K. (2007) Modern Human Relations at Work, USA,
Cengage.
Kaur, A. (2013) Maslows Need Hierarchy Theory: Applications and Criticisms,
Global Journal of Management and Business Studies, 3 (10), pp. 1061-1064.
Koontz, H. (2010) Essentials of Management, 8th edn, New Delhi, Tata
McGraw Hill.
Lussier, R. (2011) Management Fundamentals, USA, Cengage.
Marks and Spencer Annual Report (201) [Online], Available

at:

www.marksandspencer.com [Accessed 15 April 2014].

McAuley, J., Duberley, J. and Johnson, P. (2007) Organisation Theory, UK,
Pearson.
Van Knippenberg, D. (2013) Leadership and Decision Making: Defining a Field,
London, Routledge.
Wharam, J. (2009) Emotional Intelligence, UK, John Hunt Publishing.
Winkler, I. (2010) Contemporary Leadership Thoeries, Germany, Springer.
Wood, Z. (2010) UK recession: winners and losers [Online], Available at:
www.theguardian.com [Accessed 16 April, 2014].

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