Challenges of management in OB

Challenges and Opportunities of Organizational Behavior

The following are some of the significant problems:

 Improving People Skills

 Improving Quality and Productivity

 Managing Workforce Diversity

 Responding to Globalization

 Empowering People

 Coping with Temporariness

 Stimulating Innovation and Change

 Emergence of the e-organization

 Improving Ethical Behavior

Improving People Skills:

Technological changes, structural changes, environmental changes are accelerated at a faster rate in
business field. Unless employees and executives are equipped to possess the required skills to adapt
those changes, the achievement of the targeted goals cannot be achieved in time. There two different
categories of skills – managerial skills and technical skills. Some of the managerial skills include listening
skills, motivating skills, planning and organizing skills, leading skills, problem solving skill, decision
making skills etc.

These skills can be enhanced by organizing a series of training and development programmes, career
development programmes, induction and socialization etc.

Implications for Managers: Designing an effective performance appraisal system with built-in training
facilities will help upgrade the skills of the employees to cope up the demands of the external
environment. The lower level cadre in management is required to possess more of technical skills. As
they move towards upward direction, their roles will be remarkably changed and expected to have more
of human relations and conceptual skills.
Improving Quality and Productivity:

Quality is the extent to which the customers or users believe the product or service surpasses their
needs and expectations. For example, a customer who purchases an automobile has certain
expectation, one of which is that the automobile engine will start when it is turned on. If the engine fails
to start, the customer’s expectations will not have been met and the customer will perceive the quality
of the car as poor. Deming defined quality as a predictable degree of uniformity and dependability, at
low cost and suited to the market. Juran defined it as fitness for use. The key dimensions of quality as
follows.

 Performance: Primary operating characteristics of a product such as signal coverage, audio

quality, display quality etc.

 Features: Secondary characteristics, added features, such as calculators, and alarm clock

features in hand phone

 Conformance: Meeting specifications or industry standards, workmanship of the degree to

which a product’s design or operating characteristics match preestablished standards

 Reliability: The probability of a product’s failing within t a specified period of time

 Durability: It is a measure of product’s life having both economic and technical dimension

 Services: Resolution of problem and complaints, ease of repair

 Response: Human to human interface, such as the courtesy of the dealer

 Aesthetics: Sensory characteristics such exterior finish

 Reputations: Past performance and other intangibles, such as being ranked first.

More and more managers are confronting to meet the challenges to fulfill the specific requirements of
customers. In order to improve quality and productivity, they are implementing programs like total
quality management and reengineering programs that require extensive employee involvement.

Total Quality Management (TQM): It is a philosophy of management that is driven by the constant
attainment of customer satisfaction through the continuous improvement of all organizational process.
The component of TQM are (a) intense focus of the customer

(b) concern for continual improvement (c) improvement in the quality of everything the organization
does (d) accurate measurement and (e) empowerment of employees.
Reengineering: This refers to discrete initiatives that are intended to achieve radically redesigned and
improved work process in a bounded time frame. Business Process Reengineering employees a
structural methodology that reduces work process to their essential composite activist and provides cost
performance matrices to facilitate a business case for dramatic improvements. Both functional and
cross-functional processes are evaluated through workflow analysis and activity based costing. In many
cases, the application of new technology and industries best practices will enable quantum
improvement in an organization’s cost and performance.

Implications for Managers: Today’s managers understand that any efforts to improve quality and
productivity must influence their employees. These employees will not only be a major force in carrying
out changes, but increasingly will participate actively in planning those changes. Managers will put
maximum effort in meeting the customer’s requirements by involving everyone from all the levels and
across all functions. Regular communications (both formally and informally) with all the staff at all levels
is must.

Two way communications at all levels must be promoted. Identifying training needs and relating them
with individual capabilities and requirements is must. Top management’s participation and commitment
and a culture of continuous improvement must be established.

Managing Workforce Diversity:

This refers to employing different categories of employees who are heterogeneous in terms of gender,
race, ethnicity, relation, community, physically disadvantaged, homosexuals, elderly people etc. The
primary reason to employ heterogeneous category of employees is to tap the talents and potentialities,
harnessing the innovativeness, obtaining synergetic effect among the divorce workforce. In general,
employees wanted to retain their individual and cultural identity, values and life styles even though they
are working in the same organization with common rules and regulations. The major challenge for
organizations is to become more accommodating to diverse groups of people by addressing their
different life styles, family needs and work styles.

Implications for Managers: Managers have to shift their philosophy from treating everyone alike to
recognizing individual differences and responding to those differences in ways that will ensure employee
retention and greater productivity while, at the same time not discriminating. If work force diversity is
managed more effectively, the management is likely to acquire more benefits such as creativity and
innovation as well as improving decision making skills by providing different perspectives on problems. If
diversity is not managed properly and showed biases to favor only a few categories of employees, there
is potential for higher turnover, more difficulty in communicating and more interpersonal conflicts.
Responding to Globalization:

Today’s business is mostly market driven; wherever the demands exist irrespective of distance,
locations, climatic conditions, the business operations are expanded to gain their market share and to
remain in the top rank etc. Business operations are no longer restricted to a particular locality or region.
Company’s products or services are spreading across the nations using mass communication, internet,
faster transportation etc. An Australian wine producer now sells more wine through the Internet than
through outlets across the country. More than 95% of Nokia hand phones are being sold outside of their
home country Finland. Japanese cars are being sold in different parts of globe. Sri Lankan tea is exported
to many cities across the globe. Executives of Multinational Corporation are very mobile and move from
one subsidiary to another more frequently.

Implications for Managers: Globalization affects a managerial skills in at least two ways: i) an Expatriate
manager have to manage a workforce that is likely to have very different needs, aspirations and
attitudes from the ones that they are used to manage in their home countries. ii) Understanding the
culture of local people and how it has shaped them and accordingly learn to adapt ones management
style to these differences is very critical for the success of business operations. One of the main
personality traits required for expatriate managers is to have sensitivity to understand the individual
differences among people and exhibit tolerance to it.

Empowering People

The main issue is delegating more power and responsibility to the lower level cadre of employees and
assigning more freedom to make choices about their schedules, operations, procedures and the method
of solving their work-related problems. Encouraging the employees to participate in work related
decision will sizably enhance their commitment at work. Empowerment is defined as putting employees
in charge of what they do by eliciting some sort of ownership in them. Managers are doing considerably
further by allowing employees full control of their work. An increasing number of organizations are
using self-managed teams, where workers operate largely without boss. Due to the implementation of
empowerment concepts across all the levels, the relationship between managers and the employees is
reshaped. Managers will act as coaches, advisors, sponsors, facilitators and help their subordinates to do
their task with minimal guidance.

Implications for Manager: The executive must learn to delegate their tasks to the subordinates and
make them more responsible in their work. And in so doing, managers have to learn how to give up
control and employees have to learn how to take responsibility for their work and make appropriate
decision. If all the employees are empowered, it drastically changes the type of leadership styles, power
relationships, the way work is designed and the way organizations are structured.
Coping with ‘Temporariness”

In recent times, the Product life cycles are slimming, the methods of operations are improving, and
fashions are changing very fast. In those days, the managers needed to introduce major change
programs once or twice a decade. Today, change is an ongoing activity for most managers. The concept
of continuous improvement implies constant change. In yester years, there used to be a long period of
stability and occasionally interrupted by short period of change, but at present the change process is an
ongoing activity due to competitiveness in developing new products and services with better features.
Everyone in the organization faces today is one of permanent temporariness. The actual jobs that
workers perform are in a permanent state of flux. So, workers need to continually update their
knowledge and skills to perform new job requirements.

Implications for Manager: Managers and employees must learn to cope with temporariness. They have
to learn to live with flexibility, spontaneity, and unpredictability. The knowledge of Organizational
Behavior will help understand better the current state of a work world of continual change, the methods
of overcoming resistance to change process, the ways of creating a better organizational culture that
facilitates change process etc.

Stimulating Innovation and Change

Today’s successful organizations must foster innovation and be proficient in the art of change; otherwise
they will become candidates for extinction in due course of time and vanished from their field of
business. Victory will go to those organizations that maintain flexibility, continually improve their
quality, and beat the competition to the market place with a constant stream of innovative products and
services. For example, Compaq succeeded by creating more powerful personal computers for the same
or less money than IBNM or Apple, and by putting their products to market quicker than the bigger
competitors. Amazon.com is putting a lot of independent bookstores out of business as it proves you
can successfully sell books from an Internet website.

Implications for Managers: Some of the basic functions of business are being displaced due to the
advent of a new systems and procedures. For example – books are being sold only through internet.
Internet selling an organization’s employees can be the impetus for innovation and change; otherwise
they can be a major hindrance. The challenge for managers is to stimulate employee creativity and
tolerance for change.
Emergence of E-Organization

E- Commerce: It refers to the business operations involving electronic mode of transactions. It

encompasses presenting products on websites and filling order. The vast majority of articles and media
attention given to using the Internet in business are directed at on-line shopping. In this process, the
marketing and selling of goods and services are being carried out over the Internet. In e-commerce, the
following activities are being taken place quite often - the tremendous numbers of people who are
shopping on the Internet, business houses are setting up websites where they can sell goods, conducting
the following transactions such as getting paid and fulfilling orders. It is a dramatic change in the way a
company relates to its customers. At present e-commerce is exploding. Globally, e-commerce spending
was increasing at a tremendous rate from US$ 111 billion in 1999 to US$ 1.3 trillion by 2003.

E-business: It refers to the full breadth of activities included in a successful Internet based enterprise. As
such, e-commerce is a subset of e-business. E-business includes developing strategies for running
Internet-based companies, creating integrated supply chains, collaborating with partners to
electronically coordinate design and production, identifying a different kind of leader to run a ‘virtual’
business, finding skilled people to build and operate intranets and websites, and running the back room
or the administrative side. E-business includes the creation of new markets and customers, but it’s also
concerned with the optimum ways to combine Computers, the Web and Application Software. A sizable
number of multinational corporations are selling goods and services via the Internet.

Growth rate of e-business: The application of Internet operations are initially covers a small part of the
business. At this point, their e-commerce operations are secondary to their traditional business. An
increasingly popular application of e-business is merely using the Internet to better manage an ongoing
business. Later, there are millions of firms that are now selling anything over the Internet, but they are
using e-business applications to improve communications with internal and external stakeholders and to
better perform traditional business functions. Some companies are putting maximum effort in improving
its internal efficiency and providing support to its wide-reaching dealer network and to on-line sellers by
crating a shared and integrated network. The companies wanted to make creasing

E-Organizations: This embraces e-commerce and e-business. State and central governments, municipal
corporations are using the Internet for extending all the public utility services more efficiently through
internet.

Implications for Managers: The employees must acquire skills, knowledge, attitudes in learning new
technology, overcoming any resistance
Improving Ethical behavior:

The complexity in business operations is forcing the workforce to face ethical dilemmas, where they are
required to define right and wrong conduct in order to complete their assigned activities. For example,
Should the employees of chemical company blow the whistle if they uncover the discharging its
untreated effluents into the river are polluting its water resources? Do managers give an inflated
performance evaluation to an employee they like, knowing that such an evaluation could save that
employee’s job? The ground rules governing the constituents of good ethical behavior has not been
clearly defined. Differentiating right things from wrong behavior has become more blurred. Following
unethical practices have become a common practice such as successful executives who use insider
information for personal financial gain, employees in competitor business participating in massive cover-
ups of defective products etc.

Implications for Managers: Managers must evolve code of ethics to guide employees through ethical
dilemmas. Organizing seminars, workshops, training programs will help improve ethical behavior of
employees. Retaining consultants, lawyers, voluntary service organizations to assist the company in
dealing with ethical issues will ensure positive ethical behavior. Managers need to create an ethically
healthy climate for his employees where they can do their work productively and confront a minimal
degree of ambiguity regarding what constitutes right and wrong behavior.