Meso and Moral Perspectives, Analysis of Hip Cafe - Case Study Example

M&O Questions Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date We are the Owners Focus on alternative ownership structure began with the failure of investor owned enterprises during the 2007 economic depression. Employee owned businesses have been viewed in many quarters as a cure to the cancer in capitalism. In employee ownership structures employee wholly or partially own the business. In employee ownership more capitalist are created meaning that the company has more checks and balances to arrest the moral decline found in free market economics. The idea of employees becoming owners aligns the employee’s goals with that of the organization one of the aims of M&O theory. The “We are the owners” approach may help to cure the problem of greed , malfeasance and fraud that affect modern business. The long-term focus of employee owned organizations means they are unlikely to engage in unethical business activities that bring short terms gains but are detrimental to the long-term survival of the firm. According to Wills and Lincoln (2011), employee owned organizations are more conservative and favor long-term responses to changing demand conditions. It has been shown that employee owned organizations are more focused on ensuring they operate efficiently making as much cost saving as possible. Wills and Lincoln (2011) argue that employee owners are more interested in seeing their business survive in the long-term as it means the capital they have invested is secure and they will continue receiving benefits in the future. Therefore, the employees are vigilant and mindful of the decision of the company and how they may affect the survival of their investment. Blair, Kruse and Blasi (2000) show that employee ownership has the effect of creating an additional layer of checks and balances that ensure corporate decisions are prudent. In the present business environment competition for the recruitment and retention of the most talented employees is very intense. Companies that have adopted the owner employee structure are at advantage over convectional firm in the war for the best talent. According to Kramer (2008) the positive organizational studies employee are likely to be attracted and retained in organizations where they have a greater sense of belonging. The key to attracting the best talent in employee owned organization is that they offer more benefits including a share of the profits and increased job security. On the other hand employee are more likely to remain longer in organizations that they partially own than in other organizations. Consequently, employee owner organizations are unlikely to be faced with the problem of high employee turnover that is a common problem in contemporary organizations. Employee engagement and commitment to their work is one of the most significant objectives of M&O theory and practice. Mcleod and Clarke (2009) defines employee commitment as the an employee attitude were they are committed and motivated to contribute to the organization’s goals while enhancing their own well-being. It can be automatically assumed that an employee’s stake in an enterprise will cause greater commitment to the goals of that enterprise. According to Mcleod and Clarke (2009), the most significant outcome of employee ownership is an extra commitment from employees. Other than employee commitment, ownership brings about greater employee engagement. Michie and Oughton (2003) support the idea that collective ownership in a company provides the optimum conditions for the greatest employee commitment and engagement to grow. According to Mcleod and Clarke (2009), employee ownership drives employee engagement in a number of ways. First, it provides a line of sight between an organization's objectives and the job of the employee. This is the building block of an explicit organizational culture that is focused on improving the firm’s performance. Secondly, managers in the employee owned organization have no choice but to show appreciation for the effort and contribution of everyone in the organization. They also have to be efficient and effective in organizing work to make sure every employed is equipped and supported in carrying out their duty for the organization. This facilitates a condition where the employee feels valued by the organization. Thirdly, one of the most important factors in building employee commitment is ensuring their ideas and opinions are considered in decision making. In owner employee organizations, employee have a say at the both the executive level of decision making and even in the functional level of decision making (Blasi et al 2010). Where employees are owners they show a greater commitment to the joint sharing of problems and their joint solution. Finally, employee owners believe their organization is living up to its values and moral norms and therefore there is a feeling of trust and sense of integrity grows (Bryson and Freeman 2010). This link to employee engagement is important as it influences various metrics used to measure the success of a company. Mclead and Clarke (2009) asserts that employee engagement is linked to improved business performance, customer focus, innovation, reduced from work, lower rates of staff turnover and reduced accidents in the workplace. Despite the advantages, employee ownership also has a number of pitfalls. First, the employee becomes overexposed to the risk of the company failing. If for example the company collapses the employee loses both his job and his investment. On the other hand poor performance by the company may lead to falling morale among the employees (Blasi et al 2010). Secondly, employees are exposed to the risk of their investment fluctuating in value in case the organizations share price decreases. Thirdly, employee owned businesses experience a larger number of institutional barriers compared to other forms of business ownership. According to Blasi et al (2010), an employee owned organizations experience difficulties in securing financing from banking institutions. This difficulty has been credited to the fact that these organizations are constantly in the search for funds to expand. Employee owner organizations are also confronted by the Free rider effect problem. Some employees make a minimal contribution to the organization's performance but continue to receive salaries and capital gains (Blasi et al 2010). This problem is compounded by the fact that once an employee becomes an owner it is more difficult to fire them for poor performance. Thus, most employees owned organization pay their employees more than they have contributed to the organization's performance. In summary, employee owned organizations can provide a solution to contemporary problems facing the management of the organization. First, this ownership structure enables companies tackle the problems of ethics by making businesses have a longer-term focus in their operation. Secondly, employee ownership puts in place conditions that ensure optimum performance of employee mostly through employee commitment and engagement. Meso and Moral Perspectives Organizational theory can be improved by looking at issues from a Meso and moral perspective. The morality of decision making and the decisions made is one of the issues facing contemporary organizations. A cross disciplinary approach to the problem of decision making can enable organizations makes effective moral decisions. An approach grounded in positive organizational studies and mindful of philosophical contribution has been cited in (Payne & Giacalone 1990) is being effective in ensuring that organizations make ethical decisions at the Meso –level. By knowing why organizations flourish one is able to understand, encourage and teach moral courage in decision making. Self efficacy or the perceived ability to control a decision has been associated with increased courage among employees to tackle ethical challenges. Where organizations make sure their employee have sense of control over ethical decision making they are able to more checks and balances for ethical decision making to come into place. However, self-efficacy built this way has a major weakness as it does not consider environmental variables in decision making. An approach to decision making that incorporates the philosophical notions of avoiding causing undeserved harm and unnecessary suffering with Positive organizational studies (POS) would be more effective in ensuring morality is upheld in organizational decision making. Although the increase of positivity in organizations is observed through positive behavior intervention their effect are limited when it comes to ethical decision making. By combining positive organizational studies and philosophical values an appropriate Meso approach to moral issues in organizational decision making can be developed. Why new Ideas are impossible in practice There are various reasons why exciting ideas to improve management and organizational practice fail while they are applied in the field. Where dysfunctional companies are operating successfully they see no need to adopt new management ideas and theories. McCardle cites two common impediments to the application of new ideas in management practice, these are: the founder effect and structural inertia. The founder effect is concerned with the failure of an organization to adopt new ideas because they are against the company founder’s principle. In most organizations the founders domination of decision making frustrates professional trained and talented people who are involved in the decision making process. Organizations dominated by the founders are characterized by quick decision making with no regard for the input of others. In founder dominated organizations nepotism/cronyism is rampant meaning that the role of management teams is to support the ideas of the chief decision maker. The second factor that makes it hard for new ideas to be applied in an organization is organizational inertia. Most organizations prefer to stay on their current trajectory and are wary of any diversions. Organizational inertia is summed up into resource rigidity and routine rigidity. Resource rigidity refers to the reluctance of an organization to invest in new ideas while routine rigidity is where organizations is reluctant to change its routine, For an organization to accept new ideas organizational inertia must be overcome. In conclusion, organizational inertia and founder’s effect are common impediments to the success of new ideas in organizations. Café Hip Case study The biggest problem facing Hip café is poor interdepartmental coordination and collaboration. According to Jones (2010), it is the role of organizational leaders to make sure that different departments in an organization collaborate successfully. However, in most instances departments exist in competition with each other. In most instances the organizational leadership promotes competitive behavior between departments by measuring the performance of each department separately (Wankhade 2011). This is the case at café Hip where, the kitchen department is always leading in performance. The leadership at Café Hip always overlooks the mistakes of the Kitchen department as they are they are the best performing department. Among the critical issues that needs to be addressed in café Hip is the method of measuring performance, where the restaurant's performance should be measured as a whole (Abdel-Maksoud et al 2010). Secondly, the issue of diversity management should be addressed. The kitchen staff seems to be unaware that they are working with people of different ages, racial background and sexual orientation whose diversity they should respect (Hansen 2010). Thirdly, the issue of insubordination should be addressed as the Kitchen staff does not respect the authority of Michelle Cook the food and beverage manager. By ensuring the proper chain of command is followed, Ritchie’s power would be reduced. One of the ways that the problem at café Hip can be solved is by use of a balanced measure of performance (Abdel-Maksoud et al 2010). This in effect will enable the contribution of the floor staff is recognized. Secondly, the organization should cultivate shared understanding of the organizational overall goal. If both the floor and kitchen staff at cafe Hip realized they were working towards a common organizational goal then collaboration among them would improve (Garg and Rastogi 2006). Finally, the café Hip can organize joint training and team building activities involving the two departments. One way that café hip can ensure the turnover of its floor staff goes down is to ensure that they are motivated to do their jobs. According to the equity theory pay can be a significant motivator to low skilled employees, especially if it is favorably comparable with other employers in the industry (Carraher 2011). Secondly, encouraging employees and their friends to apply for a position at the restaurant is another factor that can enable the floor employee handle the stress associated with this high performance environment (Abdel-Maksoud et al 2010). Requiring all employees to observe a code of conduct that ensures they treat others with respect would also be an effective way of solving the problem in café Hip. References Abdel-Maksoud, A., Cerbioni, F., Ricceri, F., & Velayutham, S. (2010). Employee morale, non-financial performance measures, deployment of innovative managerial practices and shop-floor involvement in Italian manufacturing firms. The British Accounting Review, 42(1), 36-55. Blair, M. M.; Kruse, D. and Blasi, J. (2000). In The New Relationship: Human Capital in the American Corporation. Blair, M.M. & Kochan, T.A. (Eds). Employee Ownership: An Unstable Form or a Stabilising Force? Brookings Institution Press. Blasi, J.; Freeman. R. B.; Mackin, C.; and Kruse, D. L. (2010). Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance. In: Kruse, D. L.; Freeman. R. B.; Blasi, J. (2010) Shared Capitalism Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options. University of Chicago Press Bryson, A. and Freeman, R. (2010). NBER Working Paper 14235. How Does Shared Capitalism Affect Economic Performance in the United Kingdom? Industrial and Labor Relations Review, vol 52(2). Carraher, S. M. (2011). Turnover prediction using attitudes towards benefits, pay, and pay satisfaction among employees and entrepreneurs in Estonia, Latvia, and Lithuania. Baltic Journal of Management, 6(1), 25-52. Garg, P., & Rastogi, R. (2006). New model of job design: motivating employees' performance. Journal of Management Development, 25(6), 572-587. Hansen, K. (2010). Diversity Politics and Diversity Management in Organizations. In GenderChange in Academia (pp. 363-375). VS Verlag für Sozialwissenschaften. Jones, G. R. (2010). Organizational theory, design, and change. Upper Saddle River, NJ: Prentice Hall. Kramer, B. (2008). Employee ownership and participation effects on firm outcomes. The City University of New York. MacLeod, D. and Clarke, N. (2009) Engaging for success: enhancing performance through employee engagement. Department for Business Innovation and Skills. Available via: http://www.bis.gov.uk/files/file52215.pdf Michie, J. and Oughton, C. (2003). HRM, Employee Share Ownership and Corporate Performance. Research and Practice in Human Resource Management, 11(1), 15-36. Wills, J., & Lincoln, A. (2011). Filling the vacuum in new management practice? Lessons from US employee-owned firms. Environment and Planning A, 31(8), 1497-1512. Read More