Discuss about the Critical Analysis of an Article.
The relevant thesis statement for this article would be:
Reasons for the low productivity of New Zealand’s industries is the developing management capabilities for enhancing the performance of industries, so that the economy of New Zealand growth.
The strengths of this article include an elaborate listing of issued considered as critical by the Chief Executives for different sectors (Public, Private, Not-for-Profit) and industries operating in New Zealand, identification of reasons for the poor growth of industries, listing of reasons for the brain-drain in New Zealand and identification of different categories of managerial capabilities required by managers of New Zealand (Hutchison and Boxall, 2014). Three categories have been identified for enhancing management of organizations: managing situations related to uncertainty & renewal of business model, handling business partners & stakeholders and handling human resources & the limited internal resources possessed by the organization.
The weaknesses of the article include a response from a limited number of respondents, selecting only one respondent from an organization and the entire data provided in this article is descriptive. The article does not explore the extent of managerial capabilities possessed by the managers of New Zealand that have been identified in this article and how they can use those capabilities to their advantage in challenging scenarios. Rather, it only provides the managerial capabilities required in New Zealand.
In my viewpoint, it is easier to enlist the managerial calibre and talent that is required to improve the performance of different industries, but it is very difficult to measure and represent the managerial capabilities possessed by different levels of managers in quantitative form. It is very important to make a list of most challenging situations and key risks encountered by different industries in order to address or tackle them in a better way. Likert scale is an effective tool for rating the intensity of different challenges and risks.
Yes, I do agree with the thesis statement because management plays the most important role in streamlining the performance of an organization operating within a particular industry and improving its efficiency/ productivity. There are different levels of management that take decisions for the smooth functioning of an organization. For example, strategic decision making related to issues that have long-term implications for the organizational structure, broadening the product/ service categories, supply chain, targeting new market segments etc. is done by the upper management. Tactical decision making related to issues like short-term sales targets, staff management, marketing techniques etc. is done by the middle level management. Operational decision making regarding the day-to-day activities taking place in an organization is done by the front-liners or the low-level managers.
Entrepreneurship can be defined as the ability of the management to run a business with the available resources and making business decisions on the basis of present market scenario and future uncertainties. A good management runs a business while accepting all the challenges, anticipates risks and learns from the mistakes make by the organization itself and other organizations in the same/ different industry. Innovation is the key to succeeding in today’s competitive environment. It is about efficient utilization of the available resources and making appropriate decisions that help an organization to earn maximum profits. The organization needs to exploit all the available opportunities that lead to success. For every organization selling products or services or both, it is very important to have knowledge about the market (trending techniques/ technologies, market size, the scope of profitability/ growth, pricing trends etc.) and the customer base. These days it is very important to create an excellent customer experience (Mastrini, 2008).
Every organization should do a PEST analysis to understand all the external factors that impact the organization’s decision making. This analysis takes into account the Political (political stability, level of democracy, the attitude of government towards trade, laws related to wages, consumer laws, trade regulations, laws related to taxes etc.), Economic (employment level, purchasing power, income distribution, inflation rate etc.), Socio-Cultural (demographic factors, standard of living, lifestyle, traditional values, beliefs etc.) and Technological factors (investment in R & D, introduction of new operational techniques, acceptance of new technologies etc.).
Every organization is accountable to its shareholders and primary/ secondary stakeholders. Stakeholders include everyone who is associated with the organization in a direct or indirect way. Primary stakeholders include existing customers, employees of the organization, suppliers of raw materials/ machinery, financial investors etc. The organization’s decisions and operations have a direct impact on these stakeholders. Secondary stakeholders include media groups, governmental/ non-governmental agencies, pressure groups, general society etc (Matheson and Oxley, 2007). An organization needs to create value for its stakeholders as well as shareholders and win their trust for the maintenance of brand image and sustenance of market share.
In today’s market where there is so much competition among the brands, it is important for an organization to make strategic decisions in order to gain an edge over their rivals. An organization can create a leadership in the market by means of pricing techniques or by using differentiating factors like quality, customer service and innovation that serve as the USP of the organization. This helps in creating a unique perceived value for the customer base. Competitive advantage can be attained by utilizing the key strengths possessed by the organization like availability of resources (land, capital, labour, infrastructure, raw materials etc.) and core competencies possessed by the organization- supply chain management, inventory management, manpower management, superior technology and strong organizational structure. Gaining a competitive advantage guarantees a better quality of products/ services, improved overall efficiency, and greater revenue generation (Morison and McMullan, 2013).
It is critical to analyse the existing competitors within a particular industry on the basis of their strengths and weaknesses. This helps to envision the future risks, challenges, and opportunities. Analysis of existing competitors can be done with the help of information related to their capital investments, adopted marketing techniques, website, product/ service portfolio, CSR initiatives, investment in R & D etc. This analysis can serve as a base for the formulation of organizational strategies along with their implementation and evaluation (Matheson and Oxley, 2007). It is equally important to keep a check on the development of potential competitors in the given industry.
It is the management of the organization that decides how the different departments of the organization should interact. The management is responsible for planning, organizing/ implementing, monitoring and controlling in order to achieve the organization’s objectives. It is the responsibility of the management to analyse the market trends, availability of internal resources, external factors affecting the business of the organization, level of competition within the industry in which the organization operates, the level of support from the stakeholders etc. and then formulate strategies. In an organization, it is important to design strategies related to sales target, operations, supply chain management, financial investments, marketing & promotions, human resources and technology up gradation (Mastrini, 2008). The management is responsible for the assessment of opportunities and threats that may arise in future. Strategies need to be formulated in such a way that the organization gets a competitive advantage while keeping in consideration the strengths and weaknesses of the organization. Thus the vision of the management and their strategies can make an organization productive, successful and profitable.
Every organization follows a business model that encompasses its target market segments, a list of products/ services offered by the organization, production techniques, distribution & networking techniques, the industry it operates in, methods of revenue generations and initiatives were taken to improve customer experience. Regular changes are made in these elements to keep pace with the dynamic market. Organizations that are known for their success story like Google, Blackrock, Starbucks, BMW, Coca-Cola, Amazon, FedEx, Vodafone, IKEA, E-Bay, Samsung, Apple, Nike etc. have continued to rule the markets due to their innovation and restructuring of their business model (Mastrini, 2008). Zara, Revlon, and L’Oreal have established themselves as innovative brands because of their innovative and fast-changing product portfolio. They keep on introducing new products while keeping the customer preferences into consideration. DELL makes use of JIT (Just in Time) strategy to reduce inventory costs. Several companies like BlackBerry, Atari, and Blockbuster Video Kodak etc. failed to adapt to the changing market demands and explore the available opportunities. Innovation and restructuring of the business model take place at different levels:
Resilience- Minor changes take place at the organizational level so that the organization does not go out of the business. Changes are made in terms of procedures, processes, and culture in order to survive the changes happening at the industrial level.
Renewal- Changes are introduced in the functioning of an organization with the motive of gaining a competitive advantage. Major changes are made in the existing business model (Morison and McMullan, 2013).
Revolution- An organization makes use of available human resources, R & D resources, financial resources and market knowledge to implement innovative ideas that lead to a shift in the fundamental operations and functions of the entire industry. This impacts the entire industry and helps an organization to become the market leader.
Conclusion:
While concluding the analysis of this article, we can say that the management plays a crucial role in determining the productivity and performance of the organization irrespective of the uncertainties, risks, and challenging market scenarios. Management is the defining factor for any organization. With the help of innovation, proper utilization of available human resources, market knowledge, proper utilization of resources and streamlined organizational operations, and the management of an organization can create a success story irrespective of its size. The management should make use of marketing tools to promote the interests of the organizations, gain support/ trust of stakeholders and to achieve the strategic goals (Ofili, 2014). Human Resource is the most important asset for an organization. Regardless of the size of the organization and the industry in which it operates, human resources can help in achieving competitive advantage. The HR department has a very important role to play in an organization. Their role includes the hiring of new employees, training them as per their role in the organization, enforcing company policies/ procedures, monitoring their performance, providing compensation as per their performance, motivating the employees, helping the employees in job satisfaction, retention of employees, ensuring workplace security, handling conflicts etc. There should be no shortage of manpower or surplus manpower. The strategies formulated by the HR department should be aligned with the mission, vision, values and culture of the organization. The HR department is responsible for enhancing the efficiency and productivity of employees, which in turn would lead to greater ROI (Return on Investment) and profits (Ofili, 2014).
References
Hutchison, A. and Boxall, P. (2014). The critical challenges facing New Zealand’s chief executives: implications for management skills. Asia Pacific Journal of Human Resources, 52(1), pp.23-41.
Mastrini, G. (2008). Developing Countries and the Challenges Facing Commercial Culture. Television & New Media, 10(1), pp.96-99.
Matheson, T. and Oxley, L. (2007). Convergence in Productivity Across Industries: Some Results for New Zealand and Australia. International Review of Applied Economics, 21(1), pp.55-73.
Morison, S. and McMullan, C. (2013). Preparing for the future: challenges and opportunities for management and leadership skills. BDJ, 214(1), pp.E2-E2.
Ofili, O. (2014). Challenges Facing Entrepreneurship in Nigeria. IJBM, 9(12).
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