OrganizationalManagement: Review Questions
Q1 Allorganisations are established for a reason, and all need income tofunction. The ability to generate sufficient income to cover expensesand maintain activities allows the organisation to continue itsexistence. However, making a profit is not the reason for theorganisation to exist, nor is it the purpose of the organisation.Reasons for organisations to exist may be classed as either Personal,Economic or Social. Select three organisations and explain how theycan be classified as one of the above list. Each organisation mustcover a different reason. (6marks)
Economic:Pfizer is an example of organisations that exists for economicreasons. Pfizer is an American pharmaceutical and biochemical firmwith its principal subsidiary in the UK. The organisation wasestablished in order to create products to supply in the market andin the process offer economic gain to the founders through profits.The core purpose of such an organisation is to create profits. As aNYSE-listed firm, the core purpose of the firm is to given returns oninvestments to all shareholders. Again, given that the organisationpays taxes, it further achieves economic goals by paying taxes andalso offering employment to people. However, other reasons maybeidentified through the firm’s operations over time.
Social:The Red Cross is a global humanitarian organisation that exists forsocial reasons. The organisation with branches in nearly allcountries around the world is dedicated in offering humanitarianassistance in terms of crisis, accidents and other needy situations.The core function of the organisation is to create social change incommunities. Consequently, the organisation has been most active inregions and countries that oftentimes face strife, disasters and evenconflict. For instance, the organisation was very active in Haitiwhen the country was faced with humanitarian crisis following anearthquake. Red Cross was there to offer humanitarian aid to affectedpopulation in terms of shelter, food and basic support to help thepeople re-establish their lives again (Red Cross, 2015).
PersonalTrust fund. A trust fund is an organisation that is created forpersonal reasons. Such an organisation is created by a grantor and isoperated by one or a group of trustees who manage the fund in aspecified manner. The beneficiary of the trust fund receive benefitsfrom the fund though stipends or income after attaining a certain ageor after a specified event.
Q2 Forone of your selected organisations explain how a manager or managersfulfil Mintzberg’s Managerial roles, refer to table 1.1 of the textbook. Please note there are three categories of roles and 10 roles toexplain. (10marks)
Mintzberg’sidentifies 10 roles of managers under three categories Robbins,De-Cenzo & Coutler, 2013).
Underthis category, there are the roles of figurehead, leader and liaison.For an organisation such as Red Cross, the management team playsdifferent roles at the interpersonal level.
Leader:as a leader, a manager directs and motivates his subordinates. Thisinvolves giving the subordinates a needed mindset to perform theirduties by also providing training. For Red Cross, the organisationheavily relies on volunteers from various locations. For thesevolunteers to be effective in pushing towards attainment of theorganisational goals and objectives of providing humanitarianassistance to needy people such as those affected by Hurricane Sandy,there is need for intensive training. Employees are trained on simpleskills such as providing first aid.
Liaison:Managers act as the point of contact between the organisation and theoutside world. This means that the manager is required to network andidentify informers and other sources of information from the outsideworld. For managers, such contact with the outside world maybeinvolve public announcement by Red Cross to identify needy person incases of humanitarian crisis.
Monitor:This role requires managers to handle communication and informationboth from internal and external sources to understand theorganisations environment. This means that Red Cross managers have toorganize ways to receive reports and even organize meetings thoughwhich they can be briefed.
Disseminator:This role requires managers to receive information, interpret it andintegrate it into organisational operations. For instance, for theRed Cross, weather report warnings on hurricanes and Tornadoes in onestate in the US should see the state divisional head manager put intomotion procedures that will put the organisation into readiness bygiving needed orders.
Spokesperson:The manager is responsible for offering media briefing andcontrolling outbound information about the organisation.
Entrepreneur:The manager is responsible for initiating new projects, identifyingnew business opportunities and driving business development. For RedCross, the managers are tasked with identifying among others incomegenerating activities for its beneficiaries to be self reliant in thelong term. Additionally, the manager is responsible for identifyingfunding opportunities.
Disturbancehandler: The manager resolves crisis. For instance, the employeedisputes should be handled by the manger.
Resourceallocator: Under this role, the manager sets roles, budget, setspriorities and schedules. From the many people in need ofhumanitarian help, managers at Red Cross have to prioritize.
Negotiator:Managers at Red Cross negotiate on behalf of the organisation withsuppliers, donors and its employee unions.
Q3 Usingone of the organisations you identified earlier discuss how thisorganisation displays examples of efficiency andeffectiveness. (6marks)
Efficiencyand effectiveness are important pillars in management that areoftentimes used together. Effectiveness refers to ability to deliverresults while efficiency refers to the amount of time and resourcestake to deliver results. At Pfizer, the management realized that theeffectiveness of top tier “Harvard MBA staff” was wasting theirtime on non essential chores that were part of their job descriptionbut not the main reason for hiring them. To increase theireffectiveness in terms of developing needed strategies andinnovating, the firm chose to eliminate the non essential chores suchas making power points and research by outsourcing them. This ensuresthat the top tier staffs are effective in delivering what reallymatters, innovation and strategic decisions. Outsourcing thesenon-essential tasks to a third party also reduced the amount of timeneeded to complete them. This way, the firm achieves effectiveness inthat employees produce what they are needed to produce and what theyare best suited and competent at producing while the supporting tasksthat they face in delivering their core output are outsourced.Outsourcing such ensures lesser time and resources are utilized.
Anotherapproach through which Pfizer pursues efficiency and efficiency isthrough energy use. The firm is cutting back on manufacturingprocesses and procedures that are energy intensive and replacing themwith newer ones which are energy efficient. For instance,introduction of a software program to test steam loss provided byArmstrong International enabled the firm to save on manufacturingcosts amounting to $479,000 in the first year out of an initial costinvestment of $110,000 (Energy efficiency, n.d).
Q4 a)DiscusshowtheGeneralenvironmentimpactson one of your chosen organisations. (see q 1) (5marks)
Pfizeroperates in the multibillion pharmaceutical industry. The generalenvironment of this industry is dynamic which affects the firm’sstrategy.
Political/legal:Governments have adopted the recognition of generic drugs as opposedto branded drugs after expiry of patent period. Government regulationalso affects protection of patents through intellectual propertylaws. Government regulation through FDA also affects business. Pfizerhas been slapped with several fines over flouting stringent laws ontesting of new drugs.
Economically,the global economic fluctuations have affected operations of the firmas it has numerous branches across the world such as Philippines andDubai. Fluctuations of the dollar also affect the firm’s operationsin the global market.
Socio-cultural:Pfizer has faced change in socio-cultural trends globally. There isan increased focus on herbal medicines and herbal remedies thatreplace pharmaceutical drugs. Additionally, individuals have come toaccept better generic medicine as opposed to branded drugs therebyshrinking growth in the industry.
Technologically,the firm is faced with rapid technological growth. This aids intesting drugs and operations. On other hand, rapid technologicalchange means that innovations such as manufacturing lines getobsolete more rapidly which increases costs to the firm.
b)Discuss how the Specific environment also impacts thisorganisation. (5 marks)
Thespecific environment includes customers, competitors, suppliers,industry regulation, and advocacy groups.
Customers:changes in health insurance policies adopted by governments andindividuals. A growing number of people is opting for private healthinsurance cover which affects the relationship between Pfizer andhealthcare insurance providers.
Competitors:the firm faces stiff competition from other major pharmaceuticalssuch as GlaxoSmithKline. Other alternatives include generic medicineand herbal medication especially from the Asian region.
Suppliers:Pfizer relies on wide range of suppliers. Sourcing from a smallnumber of suppliers gives the suppliers immense bargaining powerwhich is disadvantageous to the firm. On the other hand, sourcingfrom many suppliers reduces the supplier bargaining power butincreases supplier management costs. The firm has also enacted asupplier diversity program administered by Pfizer`sGlobal Procurement that ensures that its suppliers, as stakeholders,are diverse (Pfizer supplier diversity program, 2015). Strictregulation of suppliers is also enforced to ensure quality products.
Industryregulation: the pharmaceutical industry is strictly controlled byrelevant government agencies. In the UK, it is controlled byMedicines and Healthcare products Regulatory Agency while in the USit is the Food and Drug Administration (FDA). Research by thesebodies influence the testing and marketing approaches used by Pfizer.
Q5. Theefficiency and effectiveness of an organisation can be affected bythe manner in which resources are used and the culture of theorganisation. For one of your chosen organisations discuss itsculture and the resources it has available within theorganisation. (10marks)
Pfizerhas developed a unique culture that is guided by the phrase “ownit” which is actually an abbreviation from key concepts of theorganisation’s culture. The phrase alone as a concept and messagethat employees are expected to live by. One way of owning Pfizer isallowing top tier employees to deliver quality over quantity andmaking critical decisions. The organisation requires that employeescan delegate some tasks to a third party located in India. Theapproach allows these employees to describe what tasks they wantfulfilled by the outsourcing firm and get them done in a relativelyshorter time. This is a critical component of the firm’s culturethat encourages employees to own the business by seizingopportunities to try out new ideas, to take risks and be accountablefor their decisions. This concept of owning the business is furtherstrengthened by the name “colleague” which is used by allemployees to refer to one another. It fosters a culture oftogetherness and unity in direction. The culture also calls for longterm strategies informed by new ideas. The other cultural aspect atPfizer pertains to confronting corrosive and self serving behavioursamongst employees. The firm is very clear on this and clearly states“No jerks”. The other concept is having impactful results on timeand maintaining integrity. Trust is also emphasized as a culturalpillar as it encourages “colleagues” to engage in constructivedebates aimed at ensuring one another’s success (Working at Pfizer,2015).
The“own it” approach places immense resources on the hands ofemployees in a relatively flat structure that gives power to thepeople as opposed to the positions they hold or the tasks theyperform. The company website, Hong Kong division clearly states that“Our people-oriented culture is rooted in trust, openness, teamworkand professionalism” (Working at Pfizer, 2015). The firm investsheavily in employee training by collaborating with Ivy Leagueinstitutions to gain access to the best talents in the field. Thecollaboration also ensures continuous learning for its workforce andwhich reinforces self improvement and personal development.
Q6 Discusshow your organisations use either or both task focused and peoplefocused approaches.(ToanswerthisquestionreadtheHistoryModuleafterChapter1inyourtextbook)(8marks).
Pfizeris highly people-focussed as shown by its organisational culture andorganisation processes. The firm understands that how its employeesrelate with one another and function in and outside the workplaceaffects the organisation and that everything is related. Itrecognizes the need to treat its employees well in order to powerinnovation and creativity. The firm also ensures that the HRfunctions of the firm are geared towards realizing organisationalgoals. This way, the firm recruits some of the best talents from thefield as well as offering intensive training for its employees. Thefirm holds regular workshops and training sessions in all itsfacilities to ensure ideas flow seamlessly.
ThePfizer idea farm program ensures that all the firm’s employees havean equal opportunity to present their ideas without fear that suchideas can be shot down by their seniors. The program also creates abetter advanced process through knowledge can be shared and stored ina secure manner.
Thepeople-orientation approach ensures that the strength of theorganisation is placed on the people and not tasks. This gives theorganisation more flexibility in responding to the dynamic businessenvironment. Experts in management note that managing change requiresa change in the mindset of the people and not necessarily a change intasks and processes. To actually achieve change and move theorganisation forward, then the firm should invest more in people tohelp them anticipate change and even build contingencies in theirplanning processes (Griffin & Moorhead 2013).
Q7 Forone of your chosen organisations select a problem it faces anddemonstrate the use of the decision making problem solvingsteps. (8marks)
Pfizeroperates in the biochemical and pharmaceutical industry that has aunique environment. The firm faces the challenge of reliance onpatents that usually have an expiration date. Consequently, the firmneeds continuous innovation to develop new products within specifiedtimelines. The firm also has a huge workforce numbering over 86,000globally meaning that sourcing ideas and harnessing creativity ofsuch a huge workforce presented a problem which the firm recognizedneeded to be addressed (step 1). To address this problem, the nextlogical step was to examine the decision making criteria (step 2).This means identifying the s that the solution would change. The nextstep was assessing the weights attached to these variables. Forinstance, the particular case of Pfizer must have factored in variousaspects needed to harness creativity such as brainstorming, feedback,scope, security or confidentiality required among others and weightedthese aspects in order of relevance (step 3). Based on the weightedaspects, different alternatives were identified. In this case, Pfizerhad to choose between traditional flowcharts and presentations andeven branded software packages that promise to support innovation(step 4). Currently, there are various programs in the market such asIBM’s Idea Farm, OneDesk, Zoho Projects, Exago Innovation amongothers (TopIdea, 2015).Each of the available options has to be compared with weaknesses andstrengths clearly identified (step 5). After comparing the availableoptions, Pfizer opted for a customized Idea Farm package (step 6)which was implemented beginning year 2008 (step 7) and is constantlyunder evaluation (step 8). The application allows employees tosuggest ideas on addressing specific challenges and receive insightfrom across the board in very cost effective manner.
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