Challenges Leaders Must Overcome to Promote People-Based Management Models in the Economical Crisis

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  • Topic: Financial crisis, Crisis, Financial crisis of 2007–2010
  • Pages : 5 (1588 words )
  • Download(s) : 130
  • Published : March 24, 2013
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Challenges Leaders must overcome to Promote People-Based Management Models in the Economical Crisis

The nature and nurture of today's generation of managers differs in many respects from previous times. People are taking responsibility earlier, and these relative youngsters are more outspoken, more open to new ideas, more articulate, and more likely to move to other employers if the opportunities or the environment look better. Those relative youngsters being already strong and successful business sharks are easy to be lost if not appreciated in difficult times as economical hardship as well. Several publicists have explained the meaning of people-based business as "giving people the knowledge, skills and encouragement to take responsibility for the quality of their own work." As the electronic giant killers (e.g. GE) have shown, with such people you can have your cake and eat it, applying soft principles with hard methods to create a people-based business that is both enjoyable and vastly rewarding. [1.,2.]

People based management in economical crisis: advantages and challenges

Surviving in economical crisis is not an easy task to do. Organizations have to face rapid decreases in profitability; employees see sharply increasing numbers of unemployment and society feels fear and uncertainty about the future. Investment growth is slowly situated with depression growth. There are no easy answers how to survive this economical cycle better, but still the simple truth exists: appreciation of individual is a basic cell on which to stick on. Who else builds the organization and is a part of surrounding society if not the individual? First of all, organizations’ appreciation of its people during financial hardships brings a great loyalty from employees afterwards. Being able to see the picture in a long term, not only creating massive release and panic in their employees will increase the profitability of the company in the longer term. Secondly, giving greater power to people to take responsibility of their work and encouraging them to participate in the development of their organization brings more benefits then one can imagine afterwards. As stated at General Electric in the US, Chairman Jack Welch argument is that the short-term thinking damages the long-term interests of a company, not only by the actions it encourages, but because it undermines people-based management. People who are expected to respond only to orders will eventually act accordingly - like human machines. [1.] Employee 'empowerment' isn't just a matter of delegating job authority to the job-holders. It means that 'everyone can take action to enhance his or her work, either in personal or organisational terms'. Instead of the traditional bureaucracy, with its emphasis on control, standardisation and obedience, empowerment can only thrive in the liberated surround of innovation, flexibility, commitment, zero defects and continuous improvement. The increasing need of knowledge and creativity, of innovation thinking, with a current control puts conditions to the individual and group liberty extinctions, the autonomy of independent decision making. Using these new possibilities in order to achieve the organizational purposes requires the presence on the human capital of some proper qualities and motivations. Increase of the self-control and self-discipline role in the working process changes the rapport of different motivation methods for the human capital; and they bring nothing as benefits to organization: both in financial and social ways. [3.,4.] In the research where Watson Wyatt (2008) surveyed senior communicators in companies across a broad range of industries to learn how they are communicating with employees relative to the financial crisis roughly 70 % of respondents were increasing communication to ease employee anxiety. Companies also were seeking to manage change and build employee trust. As business closings and layoffs dominate the...
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