Social Influences on Management Theories - Coursework Example

Social influences on management th­­­eories (Name) (Institution) (Course name) (Course code) (Module) (Instructor’s Name) Date of submission Majority of management theories are based on the social context. Usually, it is either the organizational culture that the organisation follows or the social conditions of the communities they operate in. The scope of the social context varies from one author to the other. Hill and Jones (2009) define social forces as “the way in which changing social morals and values affect an industry” (p. 66). Nieuwenhuizen et al (2009) the social environment in business management involves the demographics and the cultural aspects of the society that drive the market. With the impact on the industry, scholars in management and managers in the real world respond by developing theories that fit with the new social environment. It is the intention of this paper to portray how the general social context influences management theories and management decisions in general. Modern day organisations have to be more responsive to the industry dynamics and changes in the market and the industry in general. Daft and Lane (2009) write that “organizations experiment with new ways of managing that more adequately respond to the demands of today’s environment and customers” (p. 50). The authors propose two approaches in responding to such changes namely; learning organization and technology driven workplace. The learning organisation approach is best suited for the purposes of this paper whose scope is only the social environment and not the technological environment. Davidson, Simon, Woods and Griffin (2009) however note that the technology has impacted the social environment which has bounced back on organisational management. They suggest that that the interaction of management theories and social environment should not be treated as if it occurs in space. The learning organisation approach focuses on the ability of the organisation adapting to changes in the social environment. This entails aligning business processes and marketing ideal to the new ways and perceptions in the society. This approach differs from the traditional approach to management in that it is centred on problem solving rather achieving efficiency in business processes. In this respect therefore, all stakeholders in an organization strive to identify problems beforehand and come up with amicable solutions to them. “The learning organisation promotes communication and collaboration so that everyone is engaged in identifying and solving problems” (Daft 2009, p.31). This therefore results to cyclical pattern in which the firm is able to pre-empt problems before they impact negatively on the firm. Therefore, this approach forms the basis to the modern management theories that are heavily influenced by social forces in the environment. Learning in an organisation takes place in a social context (Jarvis, Holford and Griffin 2008). Research shows that tacit knowledge in an organisation is shared and spread through the organisation via social channels. Knowledge sharing platforms such as brainstorming and departmental meetings tend to share and discuss explicit knowledge. However, such meetings do not explore the implicit knowledge held by individual employees either knowingly or unknowingly. The nature and perception of sharing knowledge among employees is basically a function of the social context and their cultural background. It is therefore the role of the organization to create a convenient social environment that matches with the socio-cultural background of the employees in order to induce learning and information sharing as the basis of the learning organisation theory. There are other identified ways which the social forces in the environment come into play in management theory. Hill and Jones (2009) say that changes in moral and ethical values in a society affect the industry and the way of doing business for the players in that particular industry. These changes are usually accompanied by new opportunities and challenges and hence organisations must respond to the challenges and seek ways of exploiting the new opportunities presented. The authors give an example of the global tobacco industry which has been affected by increased consumer awareness of the health issues surrounding smoking and tobacco use. Therefore, any management theory pertaining to this industry will be guided by the recognition of the social developments in this particular industry. Political institutions and political decisions are part and parcel of the social environment. These institutions cannot be separated from the society and hence any political activities with a social dimension must be assessed on how they influence management theories. One of the most obvious political implications on management is the regulation or deregulation of markets. Prior to 1979 for instance, the US aviation industry was strictly regulated. The law discouraged competition in the industry citing safety concerns. The argument here was that cutthroat competition in the industry would compromise safety measures in a bid to cut costs and beat competition. It can thus be assumed that the management theories in use in this particular industry then did not recognize the role of pricing and efficiency in business processes that would lower costs. The emphasis was in the safety of the passengers. However, after deregulation of the industry in 1979, there was complete revolution in management theories especially those that recognised intense government control through industry regulation. Airline players developed new ways to increase passenger carrying capacity in order to cut costs and maintain the same or better level of safety. Competition heightened and a new management mindset was necessary in the airline industry. Mergers and acquisitions became common as airlines sought ways to remain afloat and also lower their administrative and operational costs. Societies are evolving and so do the need for management theories. Sharma discusses M-form societies in her book Management in new age, western windows and eastern doors. She writes that modern societies are characterized by multiplicity of “diverse ideological, structural, cultural language and regional characteristics” (Sharma 2007, p. 31) which have been imported in management theories. Individuals being the building blocks of society also undergo the same. Jarvis, Holford and Griffin (2003) confirm this and say that All aspects of the individual are to some degree a reflection of the social structure. But this is not merely an acquisition or receptive process, since the social self affects the manner in which persons perceive and interpret their experiences in social living…individuals actually modify what is received and it is the changed version that is subsequently transmitted to other people in social interaction (p. 46). It can be deduced from the above statement that developers of management theories are not only inspired by developments in the business world but also in the social environment. They use their social experiences to develop ideas which they modify to suit the management situations. Different societies have different structures and compositions that give different experiences to managers and theory developers. Sharma (2007) says that there are two general categories of theories namely; the homogenous/closed system and the heterogeneous/open system. Open systems recognize the interaction between the environment and the organisation while the closed system tends to ignore this kind of interaction. Consequently, the two approaches often lead to very divergent management theories. In heterogeneous societies, firms either operate within the closed or open system. Where they claim to operate under a closed system, they are somehow influenced by diversity. On the other hand, organisations operating in homogenous societies have no problem in responding to diversity as it is a non issue. For instance, firms operating in strictly Islamic states do not recognize Christian Sabbath day if at all the homogeneity of the workforce matches with that of the society. The society thus bears some authority over organisations. The social structure of authority is often replicated in organisations. The concept of horizontal or vertical organisational structure is borrowed from social organisations (Rouse and Boff 2005). One of Hofstedes cultural dimension that is widely used in management is power distance. Power distance is understood as the degree of inequality in a society and which the people, more so those on the lower side, view as normal. In high power distanced societies, people on the lower side often view the people at the top as omnipotent and whose orders must be followed unquestionably. The power distance in a given society determines the flow of information and authority from the top to the bottom and how they relate. Rouse and Boff (2005) write that “high power distance is consistent with a hierarchical organizational structure” (p.243) where top managers expect to give commands which will be followed to the letter without questioning. In such an organization, employees lack the capacity and confidence to initiate decisions but have to wait for instructions from their seniors. Such organizations rarely give recognition to teamwork processes. The situation is opposite in societies with low power distance. Employees are empowered and are enabled to initiate decisions and consultations and delegations are very common. To such employees, it is within their moral obligation to do what is right without being instructed to do so. The social environment influences the moral and ethical considerations in developing and applying management theories. Organizations often base ‘wrongs’ and ‘rights’ in their business processes on those of the society in which they operate in. while majority of organizational processes have laid down procedures in identifying moral and ethical actions in arising situations, some cases fall under moral and ethical ambiguousness that require the organisation to borrow from the society. Butterfield, Trevino and Weaver (2000) narrate the case of Ford Motors recalling some models from the market. One of the top managers who were overseeing the recall later admitted that the company erred in failing to recall the Ford Pinto from the market because the “work environment” at the company then did not allow such moral and ethical involvement by the society’s standard. However, the same cannot be said of automotive companies. They have been involved in numerous recalls citing major to minor technical problems. A closer look into the automotive industry shows an increase in recalls indicating higher levels of moral and ethical awareness in management. Social problems present business opportunities. Drucker (2007) alleges that problems in the social environment present both challenges and business opportunities. He argues that throughout history since the time of industrialization, businesses and industries have emerged as an attempt to solve problems in the social environment. He notes for instance that the development of condoms around the world has been powered by increased promiscuity and the desire to protect the people from being infected with sexually transmitted diseases. He thus argues that the developments in the social world are core to some business management theories. The case of condom manufacturer captures this argument perfectly. This is because the manufactures of condoms have to keep track on the social perceptions of safe sex and sexuality in general. As such, any models and theories developed from such observations are directly influenced by the social environment. The same case applies to organisations in the fashion industry. Their theories are based on the social environment specifically fashion trends. The cultural and social background of employees in this age of globalisation and transnational operations has gained prominence. This prominence is also witnessed in management theories. The issue of multicultural and cross cultural management is a common topic in modern day management literature. Davidson et al (2009) discuss the importance of respecting and acknowledging the implications of cultural background in different countries on the management style and the expected response from employees and the market alike. Daft (2007) writes that although marketers seem to move more easily towards integrated approaches, managers are somehow torn between integrating operations or developing country specific management theories guided by the social and cultural environment. Therefore as modern societies become more diverse, management theories have to recognise this development in order to be relevant. By doing so, they play their social role as a binding element. Organisations are key social players hence must be fully involved in social endeavours. Corporate social responsibility (CSR) is the term given to such involvement. Conventionally, CSR was viewed as a moral and ethical requirement but this has transformed into a strategic option. Basu and Pallazo (2008) note that scholars in this field such as Porter and Kramer (2002) and Husted (2003) have made attempts to link CSR with profitability and performance. Some firms have taken to utilise CSR activities as corporate advertising and promotion. This way, firms are literally expanding the scope of advertising not only to inform, educate and persuade but also to achieve intrinsic goals of importance to the society. Such activities may include financing or assisting local communities to conserve the environment. This activity markets the corporate brand as green organisation and also benefits the community through conserving the environment. As such, the needs to the society will influence the management decisions of the involved firms. Organisations are social entities. They have to play an active role in the society in order to receive support and for the organisation also to support its market in a mutually beneficial relationship. While societies and social trends are influenced by organisations through their products and services, societies also influence theory on management. Any modern theory that ignores this intricate relationship is doomed to fail. As organisations continue to be more consumer driven, so is the relationship and the influence of the social environment on management theory and practice going to strengthen. References Basu, K. & Palazzo, G. (2008). “Corporate social responsibility: a process model of sensemaking” Academy of management review. 33(1), 122-136 Butterfield, Trevino and Weaver (2000). “Moral awareness in business organisations: influences of issue-related and social context factors” Human relations. 53(7), 981-1018 Daft, R. and Lane, P. (2009). Management. Sydney: Cengage Learning Daft, R. (2009). Organization Theory and Design. Sydney: Cengage Learning Davidson, P., Simon, A., Woods, P. and A. Griffin (2009). Management 4th Australasian Ed., Wiley: Brisbane. Drucker, p. (2007). The essential Drucker. New York: Elsevier Hill, C. & Jones, G. (2009). Strategic management theory: an integrated approach. Sydney: Cengage Learning Jarvis, P., Holford, J. & Griffin, C. (2003). The theory & practice of learning. Sydney: Cengage Learning Nieuwenhusen, C., Badenhorst-Weiss, H., Rossouw, D. Brevis, T. & Cant, M. (2009). Business Management: A Contemporary Approach. New York: Juta and Company Ltd Rouse,W. & Boff, K. (2005). Organizational simulation. New York: John Wiley and Sons Sharma, S. (2007). Management in New Age Western Windows Eastern Doors. London: New Age International Read More