Business Ethics Assignment: Management & Organisational Performance- A Perspective From Structure/Agency Debate
Task: The topic on which you are supposed to prepare a report on current business ethics assignment is “Management and organisational performance: A perspective from the structure/agency debate”.
There is either ‘agency’ approach or ‘structural’ approach as noted in the present context of business ethics assignmentwhile discussing social phenomena such as power of managers to affect organizational performance. Agency approach revolves around human subjectivity and within a defined context at an individual level. It deals with individual’s experience and action regarding intersubjective world and covers local subjective situations. For instance, this approach is used to focus on workplace. Methodology such as ethnography and phenomenology are included in this approach.
On the other hand, structural approach is another form of social research that deals with broader range of techniques in order to assess political and economical factors such as mass communication, language, wealth and power. However, here ‘agency’ approach is used with the aim to discuss whether it is in the power of a manager to determine the direction and performance of an organization or whether the manager is constrained by the system and process set by the organization.According toFellenz and Martin, (2017), modern research on organizational behaviour and role of management have changed a lot in this twenty first century.The power of managers can impact the organizational behaviour and employees’ performance through constructive feedbacks and positive motivations. Though with passing time there are changes, development and complexity in managerial responsibility and its effects on organizations.Leadership influences culture, value, employee motivation and overall organizational changes. However, it remains a debatable topic whether it is manager who determine the organizational performance or it is the supreme body of organization who has the ultimate power. However, there are three pivotal issues regarding this debatable topic and these three key issues are ethics and corporate social responsibility (CSR), globalization and culture and competitive pressure and organizational change.Though managers are those who face ground level issues and deals with those staying in the field and thus they have the real understanding and experience that are required to maintain the performance of an organization. However, it is the executive committee or the organization itself, who makes the choices among alternative actions or often inaction.
Issues With Ethics and Corporate Social Responsibility
According toAgudelo, Jóhannsdóttir and Davídsdóttir, (2019), companies or business organizations are gaining their profits from society through using valuable resources from environment. Therefore, they must have responsibility towards this society and environment. Corporate Social Responsibility or CSR is considered as a business model, where business organizations perform ethical and charitable jobs for the wellbeing of the society. These ethical practices and policies undertaken by business organizations have positive influence on the society. Even, nowadays consumers are more concerns about the CSR rating of a company or organization while they are investing on a service or product of that particular company. This indicates that ethics and Corporate Social Responsibility is not only for the betterment of the society or environment, rather this CSR practices and policies determine the brand value of a business organization which has direct impact on financial profit of that organization.
Therefore, according toAbbas, (2020), it is the responsibility of the managersof a business organization to mitigate the issues related to moral obligations and which can affect the business. Thus, Corporate Social Responsibility is considered as the commitment and obligation of managers to adopt action plans in order to improve society’s welfare along with their own interests related to organizational benefits. On the other hand, as stated byDe Roeck and Farooq, (2018), though managers are familiar with the ground level situation, it is the responsibility of the organization to make strategic action plans even regarding Corporate Social Responsibility (CSR) as it has direct impact on business profit and brand value. However, according to my personal organizational experience, decisions regarding organizational ethics and Corporate Social Responsibility (CSR) is often taken by the board of directors and the C-suite executives of the business organization as they are expected to act as the socially responsible.Even, CSR strategy is made by these C-suite executives and the board of directors who are considered as soul organization (Bromley and Meyer, 2021). However, these strategic CSR plans are finally executed through the managers of the business organization, though these managers have not direct role in decision making regarding organizational ethics or company’s Corporate Social Responsibility.
Issues With Globalization and Culture
As stated byNosova, (2017), the process of interconnectedness of global people or global consumers with a business organization is considered as globalization of business. According toWaddington, (2018), business organizations can identify comparatively lower cost ways to manufacture their products or services with the help of globalizations. Besides the financial profits of business organizations, globalization is even proved to be profitable for the consumers also as it creates and increases global competition beyond the regional boundaries and it causes a fall in the prices of the products and services. Thus, this whole process of globalization creates a wider variety of choices for the consumers. As stated byStiglitz, (2017), wide variety of choices and having lowered costs help the global consumers of not only developing countries, but also the consumers of developed countries to meet their needs in less money.
According toBerger Walliser and Scott, (2018), due to the need of globalization, management needs to expand their responsibility and roles in order to cross the regional boundaries and to reach to the global market place. As globalization increases organizational production even beyond the regional marketplace, therefore, hiring more employees and posting or transferring the employees in international locations are unavoidable. All these processes are considered to be the managerial implications of globalization for a business organization.
On contrary, Nikolova, Rodionov and Afanasyeva, (2017), stated, as globalization is not only the matter confined within a business organization and its primary location, rather it is about expanding over the global market place, spreading of products, services and information, upgrading modern technologies and creating more jobs across conventional boarders. As even international institutions play important roles in globalization which includes various global issues depending on different countries. Therefore, it is the responsibility of the board directors and C-suite executives who represent the business organization in a global platform to manage the issues relating to globalization. According to my previous experience, though the major field works and the supervision related to globalization of a business organization are done by the managers, but the important strategic decisions are made by the organization itself through its board of directors and executive personals.
The combining result of shared belief and values is considered as culture within an organization. This organizational culture determines how to behave within a business organization in order to establish effective communication among all the employees, staffs and managers and ultimately to shape employees’ behaviour, understandings and perceptions. Organization’s culture is influenced by some key factors such as leadership style, management style, organization’s structure, system and process through which an organization’s performance is carried out and the behaviour of employees and employers. The norms and values of a business organization is influenced by a strong organizational culture. A strong and effective organizational culture impacts on the mission, vision and ethics of a business organization or a company. Therefore, it is clear that organizational culture decides how a business organization should run and how it can be potentially different from its other competitors. It indicates that organizational culture has great impact on a business organization’s internal communication, capability of risk taking, financial growth, level of expanding over national boarder and innovation in production.
According toBerger Walliser and Scott, (2018), it is organization culture which decides a business organization’s internal structure that is directly related to sustainable competitive success of a business organization or a company. Therefore, strategic factors related to organizational culture are decided by the organization itself. The C-suite executives and the board of directors make strategic action plans with the aim to get sustainable competitive success not only within a particular nation, rather at a global business platform.
On the other hand, as stated byLubis and Hanum, (2020), managers are the individuals who understand the employees and staffs along with their skills, experience, knowledge and capability. Even managers regularly deal with the issues that a business organization is going through. Therefore, managers are the persons who should create and manage organizational culture according to the existing organizational issues and capabilities of the employees. However, from my previous experience I noticed that organization itself, rather it is better to say that the board of directors, company CEO and C-suite executives are the ones who make strategic decisions regarding fixing an organizational culture. Furthermore, they deploy the responsibility on the managers to maintain and to supervise these decided action plans. It indicates that every strategic decision is made by the individuals who are in the top position of a company or a business organization and then they impose the responsibility to follow their decisions on the managers. It indicates that managers have no power to determine the direction and performance of a business organization or a company, rather managers are constrained by the organizational process and system.
Competitive Pressure and Organizational Change
The level of competition that a business organization faces occurred by the presence of enough substitute products and services in the market is considered as competitive pressure. A company’s competitive pressure is reflected in its business activities and business performance. Competitive pressure has a great effect on a business organization’s incentives to manage process upgradation and product innovations in order to get sustainable competitive success. Competitive pressure occurs from the new entrants in the market. However, according toDubey etal., (2018), a business organization can beat such competitive pressure by following some simple yet important steps. Such steps are identifying the existing competitors and understanding their business strategies, upgrading with the knowledge of new entrants in the market, understanding the expectations and capabilities of the target customers, identifying the differences that a company holds, targeting new markets and expanding even across national boarders and creating a great brand value which reflects the company’s intention to look after its existing customers and company’s CSR activities.
As stated byKorman, Quaquebeke and Tröster, (2021), all these steps can not be done perfectly neither only by the managers or only by the executives or board of directors. Rather, in order to beat the competitive pressure by following these steps, the organization needs both the executive rank personnel and directors along with the management team. On contrary, Holbeche, (2018), suggested that as competitive pressure can affect the business directly, therefore, it must be the soul decision made by the board of directors and the C-suite executives. Furthermore, they should convey the instructions and action plans to the managers in order to maintain and supervise the performance lead by the direction of the board members. Even I learned from my experience, that business organizations beat their competitive pressureswith the decisions and action plans made by the executives and by the board of directors which are finally followed and performed by the managers of that organizations.
As stated byCameron and Green, (2019), in order to get potential competitive success which would be sustainable, every business organization needs a strategic organizational change that must be decided and taken by the executives, but with the ground level suggestions collected from the managers.I noticed while working in my previous organization, that when the organization needs remedial changes or people centric organizational changes, the board of directors involve the managers to set strategic changes. However, the sole decision regarding structural change and transformational change, executives and board of directors take the decision themselves.
The collection of general rules and ideas to manage a business or an organization is considered as management theories and practices. It focuses on the jobs and responsibilities of the managers for performing better in to bring sustainable competitive success to the company. In order to bring success towards an organization, managerial responsibilities revolve around some major factors such as ethics and corporate social responsibility (CSR), globalization and culture and competitive pressure and organizational change. Managers are professionally trained to look after these issues. Even, managers have practical knowledge and experience regarding ground level issues and capabilities of their employees’. However, in reality, major decisions and strategic action plans are set by the board of directors and the C-suite executives of the organization. Often organization involves the managers to identify and understand the ground level reality and employees’ capability, prior taking a decision. However, the final decision is made by the executives and the directors where there are no pivotal roles for the managers to take any decision. It indicates that managers have no real power to determine the direction and performance of an organization, except following the organizational system and process made by the C-suite executives and the board of directors.
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