PGBM02 Role of Manager in Management of Organisational Performance Assessment Answer
PGBM02 Managing and Leading People
Critically outline the role of the manager in the effective management of organisational performance.
Company or any kind of business organisation's growth mainly depends upon the management body, which more or less controls all variety of activities of the company. Thus in this report, we will discuss the role of the manager in the success of the company as well as the ineffective management process of the performance of the company. The managers play many essential roles like management of labours, solving any kind of issues between the employees, successful implementation of any type of effective strategy made by the company for the ultimate growth, always demands the support of managers. Behind a successful company, there must be a considerable amount of contribution present of a skilful and experienced manager. Thus, it is utmost important to understand the value and role of the manager with the help of critical review.
Concept of effective organisational performance with examples
The idea of organisational performance revolves around the analysis of the performance of the company compared to its goals and objectives. When stated simply, the real results and outputs of the company are compared with the intended and estimated outputs for determining the performance of the organisation. In the case of corporate organisations, there are three primary outcomes that are analysed to assess company performance (Baker and Sinkula, 2015). They are the financial performance, shareholder value performance and market performance. In some exceptional cases, an additional fourth outcome is also analysed known as production capacity performance. Company professionals like managers and executive officers often include strategic planners to determine organisational performances. The concept of effective organisational performance is quite similar to the concept of organisational effectiveness, although the later has a much broader area of operation. The successful activity of an organised group of people to perform a particular task or function can be called as organisational performance and is referred to as achievement of successful outcomes.
This outcome of the organisational performance consists of measurements of a company’s operation and policies related to its finance and economy. This performance is directly linked to the profit of the company after the end of a financial year and measured through the return of assets and return of investments. Additionally, the value added to the organisation can also be a determination of the financial performance of the company.
This outcome is judged by the measure of the market popularity and demand of the company’s product in the market place. This can be calculated through the increase of the company’s market shares and the boost in the sales due to product upgrade. When the assessment is done about a specific product of the company it is known as product market performance instead of the market performance.
Shareholder Value Performance
This outcome is judged by the benefits and profits of the shareholders due to the sales of the company in the market. This outcome is considered the most important measure of organisational performance as it ensures how much the shareholders of the company were enriched by the performance of the company (Katsikeas et al., 2016). The company's market capitalisation is the accurate measure of the shareholder value in the market. The top management of a company always prioritises the shareholder value performance in a free market capitalist system.
In order to achieve better organisational performance, companies adopt various strategies in the competitive market. They are the proper usage of the human resource department of the company, focusing on education and growth of the employees, prioritising the requirements of the customers, focusing on the product and service quality of the organisation and using latest and state-of-the-art technology to run business operations. As these five major strategies are useful in improving the organisational performance, company managers and leaders always utilise these strategies in an effective manner to improve the market performance, shareholder value performance and financial performance of the company. Companies like Apple and Google mostly focus on the quality of products and services of their company and concentrate on market performance above all others while companies like General Electric and Accenture are more inclined on the improvement of the financial performance of their organisation through the increased return of investment.
Different managerial roles for managing organisational performance from theoretical perspectives
Henry Mintzberg is mainly a Canadian management expert who wrote many books over the manager and their roles in the company. According to them, the role of the manager can be divided into three categories like interpersonal, the informational, and the decisional category (Mintzberg, 2015). They also said that an ideal manager must have the six qualities like, a reasonable processing power, which will help him to do a lot of work under the pressure of time, manager’s startup activity, and subsequent actions should be fragmented and must be short. An ideal manager also should avoid reference type of books for knowledge and should prefer the experience and communication, the manager should be bright in talks as in meetings or in any kind of other conversations, and they should keep themselves involved in any kind of preparatory decisions (Mintzberg, 2017).
- Interpersonal role: This means the useful communication role between manager and subordinators or other managers, the customers, the works council board, and with the suppliers. A manager is the head of the department, and it is expected that he must perform the symbolic duties as the manager represents the whole company internally as well as externally in all events as well as in formats. The other leading role of the manager is to be an ideal leader in all sort of ways; he must lead his team of the department from the front and with proper experience and with guidance should perform some motivational speeches in order to motivate the members.
- Informational role: According to Mintzberg, the manager also plays an essential role in processing or analysing any kind of information. Sometimes, the manager work as a communication medium between the upper order employees and the lower order employees, where the manager must have the feature of filtering information before passing it from one group to another, in order to keep the balance between the groups of the employees which is beneficial for the company in term of time. As a monitor of the department manager collects all the internal as well as the external information that is related to the organisation and its future. By the quality of information filtering the manager works as-as disseminator, who transmits the necessary and harmless information from one group to another or from the board of council to the normal employees.
- Decision-making: According to Mintzberg, a manager plays a vital role in any kind of decision-making session of the company. In addition, the manager should have the firm and evident mentality to give a clear perspective with proper explanation, which will be helpful in the strategy making or any kind of decision taking a session of the company. They can perform this role in many aspects as from the leader aspect where the manager takes the last and final decision about any kind of discussion in his own department, with his knowledge and experience. He also plays a vital role in the recruitment session by giving essential decisions and in the case related to the entrepreneur. The manager also takes essential decisions in bargaining sessions or in the session were dealing with the clients take place. This decision-making capability can also be used in any kind of negotiation related events for the welfare of the company.
Analysis of skills and competencies required by managers for managing organisational performance
According to Henry Mintzberg, the individual skills of the managers may not have a role in the company’s success. However, active managers update themselves according to various protocols for action and manager should have the adaptability skill through which he can adopt any kind of role or others in any tough situation. Mainly the difference in the skill of the manager of the company plays a significant role in the success rate differentiation of those two companies. According to Robert Katz (Shamsi, 2017), there are three types of skills are present, these are as follows,
- Technical skill: This skill involves the specific skill, which gives the manager the auto ability and knowledge and experience to use a variety of techniques to achieve any kind of objectives or to mitigate any kind of issues (MAURYA et al., 2017). This skill not only include the skills to operate any kind of machine or software related skills but also a skill which will help to boost up the sale and also will help to design different types of useful services and products and the products according to market design.
- Conceptual skills: This type of skills involve the proper knowledge of the manager, which gives the ability to think in abstract ways as well as in an innovative way too for the welfare of the company too. With this skill, the manager becomes able to create any kind of concept and can diagnose that quickly, and after that, if problems found then have the capability to solve that with ease. This kind of skill can help in the prediction related cases where manager predicts any kind of hurdles upon his department or upon the company.
- Human or interpersonal skills: This type of skill gives the ability to the manager with which he can interact with all type of people comfortably and can solve their issues too. This type of skill also helps the manager to use the full [potentiality from each employee by simply motivating them in order to achieve a better result.
Apart from the all mentioned skills, some other skills also must be present like good planning skill which make the manager able to make a good plan for the success of the company and which will be accepted heartily by all the employees and company also can support that financially without any problem. After that skill of communication, quick decision-making ability, problem-solving ability and the skill to motivate any employee or others to get better result should be present in an ideal manager.
A company can get an immense amount of competitive advantage over all of its competitors by just having an ideal manager or managers. Managers having those skills who can perform all of the roles mentioned previously can be the key thing behind the whole success rate of the company. As alone the manager can deal with, also can solve any kinds of issues, and contributes with his great thoughts about the proliferative strategy of the company, which will help immensely to beat the rival companies who do not have that much of potential manager. Some companies like Network Capital Funding Corporation of California, Coldwell Banker of New Jersey, Century 21 of New Jersey, and etc. are leading their respective markets as well as industries just having the quality managers, which simply the rival companies do not have (Century21, 2019; Becca, 2019; Coldwellbanker,.2019). This kind of example is present in a number, and it is also clarified that if a quality leader is present, then the growth of the whole team is just a matter of time. These quality managers lead the different departments of the company as well as lead the whole company and eventually decide the future of the company and the profit level of the company.
Methods used by managers in managing organisational performance
There is one element that helps in increasing company profit is reducing the overhead costs thus ensuring improved organisational performance. There are many things, which are included in these overhead costs such as rent, maintenance cost, utilities and the supplies of office. Organisations can quickly reduce the overhead cost by merely cutting down the utility cost. For example, Woolworths Companies follow this strategy to reduce the overhead cost of the business. Any organisation can quickly bring in an energy consultant and a development strategy to reduce the overhead cost within a year. The Tesco Plccuts down the utility cost to reduce the overhead cost. After cutting down the utility cost, any organisation assesses the energy cost reduction (Woolworths, 2019). It is done to make sure that the company is able to meet with its organizational objectives.
Profit margin is another tool through which the manager of an organisation manages the organisational performance. This profit margin method helps the company to implement organisational management by raising the profit of the organisation. Increase in sales can generate additional profit. The profit of the organisation can also be increased by reducing the manufacturing costs. As for example, the lean workflow process helps Asda to evaluate its manufacturing methods. This can also develop the cost-efficient system of the company. This process itself can be called the performance management system. This also helps the productivity and profitability of the organisation.
Some managers of the organisation evaluate the SWOT analysis to assess the complete market place. This also helps the company to assess the strengths, weakness, opportunities and threats. This analysis can be done on a specific marketing plan. This SWOT analysis is also done on the overall performance of the company. For example, the Tesco Plc enjoys the leading position in the retail industry of the UK (Statista, 2019). This company also offers a wide range of products, which are essential. These are the strengths of the company. The weakness of the company is that the inefficient CSR strategy which is preventing the company to reduce down the food waste (Detrick, 2018). The level of debt is increasing. In the healthy food sector, this company has a huge opportunity. Another opportunity for this company is increased sales revenue. The growing rate of unemployment is also a threat to this company. The instability of the UK economy post Brexit is also a threat to this company.
The growth of any company can also ensure organisational performance and vice versa. This factor should be planned and monitored carefully that could also help it in dealing with adverse situations (Hodges, 2016). The growth factor in performance management also helps the company to expand. The growth of the company also helps the organisation to increase productivity and profitability. This also assists the company to recruit more staffs for various departments. In this way, the workload also increases. The pressure is mitigated in the workplace. The organisational learning process is also significant for managing performance management. For instance, Asda follows this strategy to grow the business worldwide.
Recommendations for further improvement in the practice
The management of many SMEs Companies should employ some strategies through which they can quickly reduce the operation cost. The management of these two companies should also engage more suppliers to reduce domination. Organisations should apply a new strategy, and in this strategy, they should include the number of staffs. The business experts of various companies should also offer many relevant policies, which will attract many foreign investors and trade partners. The management of these companies should communicate with the employees clearly about the objectives of the companies in the near future and how they should apply the objective. For example, The Tesco Plc should also encourage the approach of open communication with all the suppliers and consumers. This will help the employees of this company to understand the business activities properly.
In short-term recommendation, for example, Asda should invest more in the implementation of CSR polcicies. This company should also include a formulation of CSR strategies in short-term regulation. This will sustain the brand value of these companies. In the long-term recommendation, Asda should enhance the experience of enjoyable shopping. In the long-term recommendation, these two companies should invest more. In this way, these two companies can diversify the business. Asda needs to implement a structured model. This company should stop investing in other sectors and start investing in the sick unit of this company. This company should also shut down the units, which are not making profits. Asda should apply a new strategy, and in this strategy, they should include the number of staffs.
These companies need to employ some strategies through which they can quickly reduce the operation cost. The management of these two companies should also engage more suppliers to reduce domination. Companies should build the policy, which is customer-centric. The focus of these two companies should be on existing customers. For example, both Woolworths and Coles should keep the price very competitive, which will compete with other companies (French and Rees, 2016).
The companies need to manage the profit margin because this profit margin method helps the company to implement organisational management by raising the profit of the organisation. Increase in sales can generate additional profit. The profit of the organisation can also be increased by lowering the cost of manufacturing and the shipping of products to the clients. For instance, Asda should focus more on online services because most of the traffics come from online. This will help to attract new customers, and in this way, the company can easily create a new customer base. The Tesco Plcneeds to manage the resources so that this company can build a well-known customer brand. The Tesco Plcneeds to implement a structured model. This company should stop investing in other sectors and start investing in the sick unit of this company(Woolworths, 2019). This company should also shut down the units, which are not making profits.
Thus, in this report, we discussed the role of the managers and the skills of the manager, which should be present inside any kind of ideal manager. The managers of various departments eventually set the future of the company and directly or indirectly decide the position of the respective company among the other rival or competitor companies inside the industry. Thus after studying this report, anyone will consider a good and potential manager as a critical material behind the success of the company and behind the peaceful and maintained environment inside the company premises. This report also gives us detailed knowledge about the qualities of a kind and potential manager and about his management duties or roles. Hence, at last, any company should treat their good managers as a valuable asset of them, as they play a crucial role in the success of the company.