Tuesday, December 31, 2013

ABC of Individual


ACCA - F1   ACCOUNTANT  IN  BUSINESS


Individuals create social societies wherever they go. Human are social creature. Unlike other resources of an organisation human, have emotions. Where other resources are consumed in process of achieving an organisation goals, human enhance its capability and competency to deal with changes and earn reward in various form to fulfill his needs and desires.

 It's hard to have control upon human resources (customers, employees/employers and stakeholders), which is part of/known as intellectual capital of an organisation or is also known as human assets. Whatever they are called and no matter in this advanced technological world where some literature talks about automaton (man turned to machine), economist still believed capital and workforce are core resources of an organisation. So, an individual's (A)attitude, (B)behaviour and (C)consequences of action plays an important role in the success of an organisation.

No two human is identical in behaviour. Provided same circumstances individuals can take different approach to fit in. Broadly, individual's behaviour can be classified as assertive, aggressive and passive.
Assertive behavior enables a person to act in his own best interests, to stand up for himself without undue anxiety, to express his honest felling comfortably, or to exercise his own rights without denying the rights of others. (Calberti and Emmons 1974)
Aggressive behavior is reactionary and impulsive behavior that often results in breaking household rules or the law; aggressive behavior is violent and unpredictable. Hostile or coercive words or actions that communicate disrespect towards others constitutes aggressive behaviour.
Passive behavior involves failing to express our wants, needs or feelings or communicating them in an indirect or apologetic way. When we fail to communicate our concerns or wishes, or express them in a hesitant, joking or self-depreciating way, other people will not know how we feel or will misinterpret our actions. As passive responders we allow others to 'walk over us' (the doormat syndrome). We allow our rights to be violated in the belief that we have fewer rights, or more responsibilities than others, and that we have less personal worth than they do. 

The role of an individual in an organisation is defined by individual's competency, ability, perception, personality, response to stress and attitudes.




Monday, December 30, 2013

Leadership Styles



Ashridge management school highlighted four distinct management practices. They are autocratic (sell), persuasive (tell), participative (consult) and democratic (join). Each practice is has its own advantages and disadvantages. Different practice fosters under different business environment. It is unlikely that all stated practices fit given environment. The table below captures advantages and disadvantages of different styles.

Autocratic (Sell)
Persuasive (Tell)
Participative (Consult)
Democratic (Join)
Advantages
Quick decision making
Enhance efficiency of repetitive task
Quick decision
Team motivation
Enhance performance
Team involvement in decision making
agreement in decision making
Team inspiration
Enhanced performance
Committed team
Consensus in decision
Encourage upward communication

Disadvantages
One way communication
Does not encourage initiative
One way motivational communication
Does not encourage initiative
Time consuming
Consensus ossification
Myopic decision
Undermines manager's power
Reduced quality
Time consuming

 
Black and Mouton Managerial Grid: The Managerial Grid is based on two behavioral dimensions:
  • Concern for People – This is the degree to which a leader considers the needs of team members, their interests, and areas of personal development when deciding how best to accomplish a task.
  • Concern for Production – This is the degree to which a leader emphasizes concrete objectives, organizational efficiency and high productivity when deciding how best to accomplish a task.
Impoverished (poor) Leadership – Low Production/Low People - Disorganized
Country Club Leadership – High People/Low Production - focus on members
Produce or Perish Leadership – High Production/Low People - autocratic nature
Middle-of-the-Road Leadership – Medium Production/Medium People - balanced approach
Team Leadership – High Production/High People - focus theory Y


Adair's Action centered leadership: The three parts of Adair's Action-Centered Leadership model are commonly represented by three overlapping circles, which is a trademark belonging to John Adair. According to John Adair achieving the task, managing the team and managing individual are three core responsibilities of manager. Each circle represent the one of above mentioned task.



Friday, December 27, 2013

Manager as Leader (Leadership Theories)


ACCA - F1   ACCOUNTANT  IN  BUSINESS


Manager is able to influence his fellow subordinate by supervising and leading the task. Therefore, we need to learn the traits of a good supervisor and a good leader and some theories related to leadership and supervision styles.
French and Raven identified five distinct types of power an individual can enjoy. They are coercive, reward, referent (influential), legitimate and expert power. Managers have the limited discretionary right to decide on using these powers to influence the productivity (output) of the process or task. Managers use these powers in different combination to optimize the efficiency of their decision making process. Example; a manager can exert intense pressure knowing the categorizing his subordinate under 'Theory X'.

Theories of Leadership  

Trait theory: This theory focused on the attributes that differentiate leaders with non-leaders. Conscientiousness, openness, charisma, intelligence, creativity, interpersonal skills, decision making are some of the common characters that separates leaders from non -leaders.
Situational approach: The fundamental underpinning of the situational leadership theory is that there is no single "best" style of leadership. Effective leadership is task-relevant, and the most successful leaders are those that adapt their leadership style to the maturity of the individual or group they are attempting to lead or influence.
Contingency approach: This approach deals with finding the match between style of leader and situation confronted. The effectiveness of a given pattern of leader behavior is contingent upon the demands imposed by the situation.
Transformational leadership (Bennis): An example of contingency theory is Transformational leadership. Bennis argued that there is no right way to lead. According to him leader should demonstrate capacity to manage attention (vision) of group, meaning vision (communication) effectively, trust (honesty) within group and self (own strength and weakness)
Leadership to mobilize (Heifetz):  This is also an example of contingency approach of leadership. According to Heifetz leaders facilitates people to face reality and mobilize change. He believes leaders provide direction but do not have to offer definite answer and mobilize people to tackle the tough challenges for themselves. He further added leaders may simply emerge rather than being formally appointed by the organisation. This is referred as 'dispersed leadership'.
Managing Change (Kotter): Kotter identified eight steps, which leads to changes in an organisation. Increase urgency, build guiding teams, get the vision right, communication for buy-in, enable action, create short-term wins, don't let-up and make it stick.

 

Thursday, December 26, 2013

Managerial role in organisation


ACCA - F1   ACCOUNTANT  IN  BUSINESS


Management practice sets fundamentals for establishing cultural identity of an organisation. Manager's role is to help preserve (the good practice) and promote (induction of new techniques) existing cultural settings to generate optimal output for the organisation. For this, we see three different approaches adopted by organisation, which describes the role of manager.

The industrial revolution 1913

A century ago, for the first time Ford motors introduced assembly line. It revolutionized the automotive industry and in no time, the style spread throughout other industry. In increased productivity for same labour input decreased unit price  and increased benefit to employees. (While the Model T created a seismic shift in mobility, it was the automotive assembly line that allowed for that shift. The Ford assembly line was developed 100 years ago in 1913, to help mass produce the T.)

Classical school : 

In 1911 Frederick W. Taylor introduced scientific management technique which focus on the task to increase productivity from individual employees. Money was the key motivating factor. Other contributor of Classical approach Henry Fayol focused on role of manager. According to him manager should focus on planning, organising, commanding, coordinating and controlling to increase productivity. By then, Max Weber suggested bureaucratic approach of management.

Mooney and Reiley set out three common principles in Classical Approach which are:
The principle of coordination : the must have for employee to work together with unity of command, the exercise of authority, and the require for discipline;
The scalar principle : the hierarchy of organization, the duties need to be graded, and the delegation of works;
The functional principle: a well defined specialization of works and the clear distinction between different kinds of duties.

Human relationship school: 

The first approach of this study focus on  productivity in relation to  variables such as employee morale, dynamics of group worker, the supervision method, relationship between workers, the behavioural principles of motivation. The importance of human relationship in an organisation is the central issue. If focus on group culture. This focus on collaboration of different units/individuals to cancel the bottleneck effect, which would otherwise, has existed. The second approach is Edward Mcgregor's  Theory X and Theory Y. Here Theory X refers to those group and individuals who needs strict rules and guiding force because of their dislike to work whereas Theory Y refers to individuals and groups who are self organised and motivated and seek responsibility to optimize productivity.

The Modern approach by Peter Drucker and Mintzberg:

According to Peter Drucker manager job is divided into five basic tasks. They are:
Set objectives
Organise
Motivation and Communication
Measures
Develop people

According to Mintzberg manager's job is divided into 10 sub-headings under 3 headings. They are:
Informational: Monitor, (Communicator) Disseminator and Spokesperson
Interpersonal: Figurehead, Leader and Liaison (within and outside organisation)
Decisional: (Intrapreneural) Entrepreneur, Disturbance handler, Resource allocator and Negotiator

Wednesday, December 25, 2013

Organisational Culture


ACCA - F1   ACCOUNTANT  IN  BUSINESS


Culture is arts and other manifestations (event, action or thing that exists or is happening) of human intellectual achievement regarded collectively. It is reflected in norms, believes and behaviour. Every company has their own cultural values, which guides their performance towards goal achievement. An organisation is a group of people working together to create harmonized mechanism. This harmonized mechanism of an organisation can be simply presented by the cultural web.

Cultural web consist of seven elements. The paradigm, organisational structure, power structure, control system, rituals, symbols and stories/myths. At the heart of the cultural structure lies the organisational paradigm. It refers to the pattern of other elements over time and the shared values adopted from establishment of organisation.

Organisational structure reflects how every functional/divisional unit co-ordinate to achieve shared goal. This is closely linked to power structure. The power structure describes the discretion of key personnel that is authorised from the board. Power system is affected by control system. Power system reflects the rights of key personnel and the control system represents the responsibilities. The control mechanism can be rigid or flexible. The approach adopted connects to the discretion provided to the management.

Rituals and routines represent the way things goes in usual organisational environment. It is accompanied by the symbols. Symbol means all the symbolic element of the firm including title, logo and dress code. Lastly, stories and myths are words from the past activities of the organisation that passes form one employee to other. 

There exists different practice in the business organisation. It can be a bureaucratic, autocratic, democratic or technocratic. It gives an idea how power and control is divided between the employees.

Culture of organisation changes over time. With time, organisation shift from one paradigm to another. This is called the paradigm shift. Different elements in business environment can trigger the need to shift the paradigm. E.g. Takeover or National harmonization process.

There are different ways to view cultural dimension. They are individual or collectivism, bureaucracy or democracy, masculinity or femininity and long term or short term. Further, the place of origin of the individuals can play an important role in defining their action and cultural dimension.