Economics, Strategic and Financial Management Blog

There are many reasons why people work for an organization? It is undeniable that money, or other financial rewards, play a key role in motivating people in the workplace. It is widely accepted that poor or low pay acts as a de-motivator. Someone who feels undervalued or under-paid may soon leave to find better-paid employment. There is a wide variety of ways in which a business can offer money (or “financial rewards”) as part of the “ pay package ”, including: Salaries: fixed amounts per month or year for performing a role; these are common for most managerial positions. Benefits: very common in businesses of all kinds; these include staff discounts, contributions to travel costs, staff uniforms etc. Time-rate pay: pay based on time worked; very common in small businesses where employees are paid per hour. Piece-rate pay:  pay per item produced – becoming less common   Commission: payment based on the value of sales achieved.   pe...

Motivation plays a critical role in achieving goals and business objectives. It affects performance both for companies operating a team-based environment and those whose employees work independently. Making sure each employee’s workplace goals and values align with the organization’s mission and vision is important for creating and maintaining a high level of motivation. This can lead to higher productivity, improved work quality and financial gain across all departments. Motivation has become increasingly important for organizations and companies of all sizes that want to reach their organizational objectives in a competitive marketplace. Top performers consistently provide high-quality work; maintain a high level of productivity and overcome obstacles or challenges . Helping all employees maintain a high level of motivation can help keep employees committed to working hard and contributing as much value as possible to the organization . Needs of motivation can be explained in t...

Concept of Motivation Motivation   in management is the process through which managers build the desire to be productive and effective in their employees . Internal and  external factors that stimulate desire and  energy  in people to be continually interested and committed to a  job, role  or subject, or to make an effort to attain goal. There are many ways to motivate employees. Motivation  results  from the interaction of both conscious and unconscious  factors  such as the ·          Intensity of desire or need, ·          Incentive   or reward value   of the goal, and ·          Expectation  of the  individual .  Managers who want to encourage productivity should work to ensure that employees: ·          feel that the work they do has ...

D. Contemporary management approaches : Classical, Behavioral and scientific management approaches tend to focus more on the internal workings of organizations. The contributions of each school's of thought are still being applied today. However both researchers and practitioners are now giving more attention to interaction of the organizations with their external environment. The contemporary approaches to management include: 1.                 The Systems Theory 2.                 The Contingency Theory a. Contingency theory of management Contingency theorists argue that each organizational circumstance is unique and as a result management approaches should be selected and applied based on the specific situation at hand. The contingency theory therefore supports the view that "there is no one best way to manage" and em...

C. Behavioral approach of management: As explained earlier the classical management approaches, and in particular scientific management, were criticized for being mechanistic and dehumanizing in nature and none emphasized human behavior in organizations. The behavioral approaches to management demonstrate that job satisfaction through effective leadership and motivation influences organizational performance . Behavioral approaches to management therefore attempted to understand the "human aspects" in organizations and the main contributions to this approach are: 1.       The Hawthorne studies The Hawthorne studies were named so because they were conducted at the Western Electric's Hawthorne plant near Chicago . The management of the company hired a team of Harvard researchers led by Elton Mayo and Fritz Roethlisberger to find the main physical working conditions (starting with lighting) which might be affecting workers' efficiency and productivi...

B. Scientific Approach of Management: The scientific approach of management was suggested by Frederick Winslow Taylor in the 20 th century. Scientific management implies “application of scientific principles for studying and identifying management problems” . According to Taylor , if work is analyzed scientifically, it is possible to find one best way to do it. Scientific management implies application of scientific principles for studying and identifying management problems. Taylor proposed 4 principle of scientific management which is described as below: 1.       science, not rule of thumb In the earlier days of the industrial revolution, managers used to apply personal judgment to solve the problems they confronted during their work. This is referred to as ‘rule of thumb’ . However, this method was suffered from the limitation of trial and error approach . Hence Taylor suggested the development and use of scientific methods to: ·  ...

Theories of Management A. Early Management Theory/ Administrative Management school of thought: Today's managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago? Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice . But early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building the foundations of modern management theory. Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Fayol's principles are listed below: ·          Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient. ·   ...

Levels of management What is Management? Management is the process of ensuring that an organization or company is able to operate in both the immediate and near future . Management in business and organizations is the function that coordinates the efforts of people to accomplish goals and objectives using available resources efficiently and effectively . Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or initiative to accomplish a goal. Managers are charged with making decisions that will impact an organization on every level. Who is Manager? A Manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary . It is more important for the manager to know how to manage the workers than to know how to do their work well. Functions of a manager are as: ·        ...

Importance / Need / Significance of Organization/Management A sound organization contributes greatly to continuity, growth and development of an enterprise in the following ways: 1. It Facilitated Administration and management:   A properly designed organization facilitates both management and operation of the enterprise by helping in its smooth functioning through various factors, such as well-defined areas of work for employees; effective delegation and decentralization of authority; clear mutual relationships; good communication network; coordination of the activities of individuals, groups and units, adequate and control. 2. It Help in the Growth of Enterprise :  A sound organization structure is flexible enough to accommodate future changes with regard to growth expansion and diversification of enterprise’s activities. Besides, certain organization practices are developed which lead the business enterprise to expand and diversify. 3. It Ensures Optimum U...