Management Theories and Foundation It Gives - Assignment Example

Field Study I. Introduction For this report, I chose to interview a home & business loan manager of the National Australian Bank. The National Australian Bank offers international financial services to Australia, the United Kingdom, New Zealand, the Americas, the United States, and in Asia. Their services is not limited to retail financial services because they have a subsidiary, nabCapital, that offers institutional banking as well as capital markets services to both local and international clients (NAB Website, 2008). The key principles of the National Australian Bank is to create and deliver "superior value" to all company stakeholders such as the shareholders, customers, employees, and the community. The company also takes ownership and accountability for their actions. Teamwork and collaboration across the whole organization is expected. The person I interviewed is Berrin Emine Kuzucu who works at the Glenroy Branch in Victoria.I decided to interview Ms. Kuzucu because she works in an industry I am personally interested in. I want to work in the financial industry after graduation. Ms. Emine Kuzucu is a relative and the interview was carried out at her workplace during her lunch break. This paper will look at the discrepancy between management theory and actual management practices in the workplace. It will also delve into how company management can significantly affect the organization's core objectives and its ability to meet its goals. Some organizational practices that will be discussed include: (1) Planning The degree of risk that plans should contain Identifying whether plans should be implemented individually or in teams The degree of environmental scanning (2) Organizing The amount of autonomy that should be designed in an employee's job description Identifying whether plans should be implemented individually or in teams The degree to which department managers interact with each other (3) Leading The degree to which managers should be concerned with increasing employee job satisfaction The type of leadership style that is most appropriate Whether disagreements – even the constructive ones – should be removed (4) Controlling Whether to impose external control or allow employees to monitor their own actions Identifying the criteria that should be emphasized in performance evaluators Identifying repercussions when budget is exceeded II. Key Findings National Australian Bank is large International Corporation with branches in different continents. Its main operations are concentrated in Australia and neighboring countries. With various branches across the country, it is clear that the bank will have numerous managers functioning on various capacities. The large number of talented manpower in the financial industry also makes it difficult for aspiring mid-level branch managers to climb up the corporate ladder (NAB Website, 2008). For example, Ms. Kuzucu, the manager I interviewed is a home and business loan manager. She ranks below the branch manager and she is in the same level as other managers within the branch. Becoming a branch manager will be tough because she will need to compete in terms of performance with the other managers within the branch and those working in nearby branches. Despite these challenges, I got the impression that employees can expect career growth within the company if they show good performance based on the interview. I believe that career growth is a motivation for employees and managers alike so they strive to develop management skills and interpersonal skills. Training and development is encouraged by the managers. They help employees know about company policies, procedures, and culture. Through this, everyone will be able to work smoothly and efficiently. But though there are discrepancies between management theory and practice, it is also important to realize that in some cases, management practices in the actual workplace are adapted to help managers cope with the unique situations in their own workplace. The next section will talk about the discrepancy between theory and practice. III. Theory and Practice The interview with Ms. Kuzucu provided me with an in-depth view of what it’s like to work in the actual business environment. There is always a discrepancy between what "should" be done based on theories and what actually occurs in the workplace. However, it is only to be expected because an actual business needs to deal with customer demands and internal challenges in real time. There are cases when procedures are disregarded for the sake of convenience. And errors can occur because of human error or technical issues. But though actual practice might divert from management theories in some instances, its core foundation is still based on this. But the opposite is also true because books refer to case studies and strategies being implemented by various businesses and conduct research on it later. Whatever the case though, every management procedure follows the same steps including: planning, organizing, leading, and controlling (Robbins & Coulter, 2004). Below are the definitions, theories, and practices of each step. It will be compared and contrasted with the actual strategies implemented by Ms. Kuzucu, a manager from the National Australian Bank. A. Planning This phase involves defining the organizational goals, establishing the overall strategy, and developing a set of plans that will coordinate various organizational tasks (Robbins & Coulter, 2004). Planning can be formal or informal and every manager engages in some sort of planning in his everyday task. When you use the term "planning", it connotes formal planning but beyond that, informal planning helps the company achieve its everyday goals. There are basically three approaches to setting goals including traditional goal setting, means-end chain, and management-by-objectives. Traditional goal setting –goals are created at the top level. Then it will be broken down into sub-goals for each level and each department in the organization. Means-end chain – this is an integrated network of goals. The accomplishment of goals at one level will set the stage for the achievement of goals at the next level. Management-by-objectives – a system in which performance goals are determined by both the manager and their employees. The progress towards achieving goals is regularly reviewed and rewards will be given on the basis of progress (Robbins & Coulter, 2004). Every organization adapts one form of goal-setting or the other. In the National Australian Bank in particular, I have observed that the company uses traditional goal setting. That is, the senior management at the head office will determine the bank's objectives and each branch will need to comply with its requirements. But on the branch level, the goal setting method being adapted is more of a management-by-objectives type. This is because the performance progress is regularly reviewed and both managers and employees will be compensated for their work. In addition, the Ms. Kuzucu and other branch managers are interacting with employees regularly. They are able to help mentor these employees and answer their concerns. According to Ms. Kuzucu, she makes it a point to categorize tasks from the most urgent to the least urgent everyday. This simple example shows how planning in a micro scale is actually conducted. This is opposed to the macro scale derived from books. B. Organizing Organizing is basically the process of creating an organizational structure. There are various concepts that need to be understood in the organizational structure because it will have a great impact on the management practices and the decision-making process of the company. Two main organizational forms exist today namely the mechanistic organization and the organic organization. The Mechanistic organization is an organizational design that is rigid and tightly controlled at the top. Meanwhile, the organic organization is a highly adaptive organization that is flexible and can easily cope with changes in the external environment (Robbins & Coulter, 2004). The National Australian Bank, with it's over 150 years in business, can be described as a mechanistic organization. This is particularly because the nature of the business requires it to use this structure. Any change initiative must come from top management and trickle down to various departments and branches. There is also a pre-defined set of responsibilities that a person will handle upon joining the company. For example, if the employee is designated as a loans officer, he will not interfere with the job of the investment banker. A structure should be designed to support the effective accomplishments of organizational goals. Some available structures include simple structure, functional structure, divisional structures, team-based structures, matrix structures, and project structures. Simple structure – this is an organizational design with wide span to control, low departmentalization, centralized authority, and minimum formalization. Functional structure – a design that groups related specialties together. It's the approach of departmentalization. For example, companies have various divisions such as accounting, marketing, human resources, and research and development. Divisional structure – this is a structure made up of separate semi-autonomous units. In this design, the division has limited autonomy because there are managers responsible for division performance. The manager has strategic and operations authority over the unit. Team-based structure – this is a design wherein the whole organization is made up of work teams. Matrix structure – it assigns specialist from various departments to work on projects. Project structure – it is a structure wherein employees will continually work on various projects. Managers have little control over this situation because the organizational structure has been determined by the top management of the company. They need to adapt their leadership style and controlling process depending on the structure stated above. For the National Bank of Australia, the organizational structure appears as a functional structure. Employees are divided into functional groups. You can observe that Ms. Kuzucu is with the home and business loans division, for example. Meanwhile, there are also managers who handle credit cards, investments, and other financial functions in the bank. However, the company also makes use of divisional structure as it has various business units dealing with foreign investments and international trading. This section will not be analyzed as it has little impact on the field study and research paper. C. Leading For this study, I want to put particular focus on leadership styles which include autocratic style, democratic style, and laissez-faire style. Below are the definitions of each: Autocratic Style – leader who centralizes authority, dictate work methods, make unilateral decision, and limit the participation of the employees. Democratic Style – leaders who involve employees in the decision-making process. They encourage employees through delegating tasks and responsibilities. Feedback is used as an opportunity to coach employees as well. Laissez-faire style – leader who give complete freedom to the group for the decisions-making process. The group is also free to complete the assigned tasks the best way it sees fit. I believe that the democratic style of leadership is best for the financial industry particularly with Ms. Kuzucu as a home and business loan manager. The main task of the department is to assess the loan applicants and determine if they are suitable to get approval for their loans. She needs to train employees to know how to assess the capability of borrowers to make repayments. Leadership through example, mentoring, and motivation are some of the management techniques used by Ms. Kuzucu. She is able to inspire employees by letting them understand the impact the National Australian Bank has on the lives of its clients. She is happy when the bank is able to help borrowers make their financial dreams come true and she shares it with her subordinates. D. Controlling Control is defined as the process of monitoring activities to make sure that they are being performed as planned (Bretag, 2007). Managers won't know if their departments are really performing well unless they evaluate the activities and compare its results with the desired standards. An effective control system ensures that activities will be completed according to the original plan. Some control systems that can be used include: Feedforward control – this focus on preventive strategies as it aims to stop problems even before it begins. It takes place in advance of the actual activity. Concurrent control – a type of control that takes place while work is in progress Feedback control – the type of control that takes place after the work activity has been done (Robbins & Coulter, 2004) In the financial services department, I believe that all the three types of controls are used. But with my interview with Ms. Kuzucu, I have observed that the company she worked for focused more on feedforward and concurrent control systems. As a feedforward control measure, the National Australian Bank carefully screens its applicants in order to get the most suitable candidates. In addition, trainings are support is also available so that employees will know how to handle various situations in the bank. On the other hand, the concurrent control system is mainly the responsibility of the managers. In the case of Ms. Kuzucu, she relies on mentoring and coaching to help the employees know about company policies and procedures. As a manager, she leads by example as well because she believes that being a good role model is essential for the continual smooth operations of the business. IV. Research Findings The National Australian Bank branch in Glenroy Branch, Victoria does not exactly follow all its management practices by the book. After all, financial establishments are in the business of serving customer's unique needs. The company sometimes needs to adapt other strategies to become more efficient in the branch. I believe that the manager I interviewed, Berrin Emine Kuzucu, is using appropriate management skills to handle organizational tasks and handle employees. In everyday operations, emphasis should be given to planning and leadership. "Planning" in this case doesn’t necessarily connote formal planning. Take the case of our interviewee, Ms. Kuzucu, her everyday plan is to prioritize the most urgent tasks before handing the least urgent tasks. I believe that this type of technique help make the company more efficient. On the other hand, most formal management practices are actually derived from the actual workplace so it is not surprising that a lot of theories found in books are actually practiced in the real business environment. Among the leadership practices I observed that were "by the book" include leading by example, mentoring, and employee motivation. Ms. Kuzucu gives knowledge, encouragement, and mentoring to her employees through role modeling. She lets the employees see her dedication to the work and she inspires them to strive for career growth. In addition, she wants employees to find satisfaction in their job by pointing out the positive difference they make to client's life every time they approve a business loan or home loan application. Through these methods, she is able to effectively make employees feel important to the organization. V. Reflective Discussions Various management skills were utilized for this study. In doing the field research, the group was able to work together to find an appropriate interviewee, research on management theories, and compare actual practices to theories found in books. I believe that in order to understand our group dynamics better, it is essential to look at the real meaning of a group. A group is basically a grouping of people working on a common project with similar objectives. The group can either have an autocratic characteristic, a democratic characteristic, or a laissez-faire characteristic (Blair, n.d). Our field study group has more of a democratic and laissez-faire characteristic. Each member fulfilled his own task that was assigned. Cooperation and coordination was the key to the success of this project. In today's business environment where teamwork is the key to success, being able to form management and interpersonal skills early on can contribute to our success after school. But success did not come without problems as well. Our group has its own strengths and weaknesses. For example, we have problems about delegating tasks and time management. We struggled to meet the deadline we set for the group on each section. But this weakness was compensated by our dedication to finish the report. Some of the skills that were practiced in this endeavor include managerial skills and interpersonal skills. Since the group has a self-managing characteristic, the group undertook the function of a collective "group leader" (Blair, n.d). The field research activity is a success for our group because we were able to effectively collaborate as a team. I believe that this is an important experience that will help us even outside the academic environment. VI. Conclusion The field study has helped us understand how management theories are practiced in the workplace. Management is basically composed of four sub-categories including planning, organizing, leading, and controlling. Based on the field study, I believe that each of these steps is equally essential in its own way because one cannot be successful without the other. However, I have observed that emphasis should be given to only one of the management steps in the workplace. For example, it is difficult to plan and lead at the same time. Planning should come before organizing; likewise, leadership should also come before controlling. For everyday operations, I believe that leading is the most essential. This is because decisions need to be made and products or services need to be served to the customers (Bretag, 2007). The process can only be done if there is an effective structure and a good leader who will direct the employees. Planning and organizing are processes that should merely be done before actual operations. Learning about management theories is highly essential because it gives the manager the necessary foundation he needs once he becomes a leader. But ultimately, I believe that it is not necessary to practice every management theory or stick strictly with one theory. In the real business environment, challenges are constant and adapting to the market situation by combining several strategies or disregarding some theories altogether are necessary. After all, technical innovations are constantly being made and this can cause a new management "theory" to be developed. References: Blair, G. (n.d). "Groups that Work". Retrieved September 10, 2008 from University of Edinburg Website: http://www.see.ed.ac.uk/~gerard/Management/art0.html Bratol. (2007). Management Foundations, 2e. McGraw-Hill Australia Bretag. (2007). Communication Skills for International Students in Business. McGraw-Hill Australia Robbins S. & Coulter, M. (2004). Management, 7e. Prentice Hall Australia. Read More