Classical Management Theories in Contemporary Management

In this essay I plan to show what consequences there are from a separation of ownership from control and what effects could occur as a result. I will be arguing whether managers are worth the cost of hiring, to the business as a whole, giving examples of problems that may arise in these types of situations and what impact they can cause. The separation of ownership in large firms is when the owners appoint paid managers to run their businesses, causing ownership to be divorced from control. Diseconomies of scale are the forces that cause larger firms to produce goods and services at increased per-unit costs.

As companies continue to try to come up with a plan for remaining profitable, some are overlooking one of their best opportunities due to their short sightedness and obsession for short term gain. It is the very asset which most firms claim is their most important and the one which provides them their competitive advantage. It is also, in some companies, the asset which is most mistreated and neglected as it is the most costly. It is the company’s employees. I don’t know of any company which would not state that employees and their knowledge of the company, its products and services, processes,

b) ESOP’s: Incentives that allow the employees to buy the share of the firm they are working at lower rates which creates the sense of ownership.

This allows the owner to get out of the company peacefully. Also, this would encourage the employees to work better because they would want to try to create the best product they can. Finally, this is tax exempt, which would allow the employee to pay taxes as they sell their stock.

Employee-owned companies exist for a variety of reasons, from the personal vision of an owner to management and employee buy-outs, a way out of family succession problems or employees responding to closure threats. The evidence is that companies with high levels of employee ownership outperform others, and the government has demonstrated through

Most important, the employees can earn stock, which gives them voice within the company to make pertinent decisions.

When we talk to our employees, it is about telling and sharing and validating the direction of the company. We are very open in this regards. So, we instead ask them what the problems are in the workings of the company, not what’s good about the company. I think that’s what culturally makes people feel more ownership towards the company.

Since employees are given a share of the company after one year, they are treated like shareholders. They work with the owners, who listen to and consider all employee input into the operations. Because employees are shareholders, they work hard to make the company as successful as possible.

Employers who view employees as assets generally have in mind the goal of getting the job done as cheaply as possible, much in the way a firm would seek to purchase equipment (get the best vehicle for deliveries and at the lowest price). Employers who view employees as investors create more of a “team” atmosphere, where the employees work towards the organization’s mission/goals by investing their time and resources in exchange for pay and benefits. It is appropriate to view employees as investors when the firm’s goal is to give employees a return on their personal investment (time, resources, and energy)

Adam is assigned the task of increasing productivity at Guitarras Dominguez while Salvador takes pride in the craftsmanship of 3the work. Adam is unsatisfied with the production rates of Guitarras Dominguez and shows Salvador his solutions to the issues of low production, which Salvador refuses to acknowledge and emphasizes that they would not lower their standards just to meet a quota (Daft, 2014). They do not see the full potential to their working alongside each other.

They need to be treated as an investment, i.e., treating everyone with fairness, dignity and where values and ideas respected. Empowering employees to be independent and share their ideas makes them truly believe in the company. Employees tend to be loyal and committed; ambassadors to the success of the company. An empowering leadership team within any organization is the key to success and a self-promoting leader will not work.

In psychology, ownership is the feeling that something is yours. People can feel ownership about a variety of things, material and immaterial in nature. Is there a way organizations can benefit from higher employee engagement, increased financial performance and lower turnover, simply by increasing feelings of ownership? In mid 1970s, the USA carried out the Employee Stock Ownership Plans. The thought behind this project was that if employees held some shares of the company, it would enhance their sense of responsibility toward the enterprise and activate their positive attitude toward the work. Interestingly, researchers found that there were no significant differences in organizational performance between an enterprise which adopted

In some of the scenarios shares of the company can be purchased by the employees and they can also become shareholders.

Define and discuss the different theories of management, using practical examples from your experience or knowledge. Compare classical management theory to any contemporary.

The definition of ‘management’ is controversial and subject to much debate. There have been many contradictory views on what the term ‘management’ means and accordingly how one should correctly manage an organisation. These theories have been put forward by several highly regarded management scholars over time. By taking into account past knowledge and contemporary views on management, we are able to ‘’explore how thinking has changed through time’’. (Brooks, 2006). Moreover, businesses have, and can continue to be able to adapt these theories and put them into practice. Successfully applying correct management practices is especially vital in a global business environment which is becoming very competitive. ‘’Most management theories, even those that do not resonate comfortably with the prevailing mood, have attractive and valid elements to them.’’ (Robinson, 2005). For example, some of these theories can be seen flourishing in fast food chains like McDonalds.