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Market Based Management Practices Within The 21st Century Workplace

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Market-Based Management Practices in the 21st Century Workplace Market-Based Management is a management philosophy that stems from the premise that organizational value can be achieved through applying external “free-society” market principles.
This philosophy “shares some similarities with total quality management, just-in-time inventory control, and other currently popular management practices” (Gable & Ellig, 1993, p. 6) by helping organizations “tap the dispersed and tacit knowledge of many employees” (Gable &
Ellig, 1993, p. 6). According to Mujtaba (2008), “ market-based management theory is a framework that takes the concept of the free enterprise market place, where numerous buyers and sellers compete for business and…show more content…
Command-oriented thinking is similar to one aspect of scientific management in that planning is controlled by one central authority that is then commanded down to follow (Mujtaba, 2007). Market process analysis consists of a highly complex process which draws from markets facilitating economic growth and social progress through six elements of the market system (Gable & Ellig, 1993).
Market-Based Management 3
Elements of Market Systems Gable and Ellig (1993) found the six elements of market systems to consist of “division of labor, property rights, rules of just conduct, the price system, free flow of ideas, and market incentives” (p. 8). Each of these elements can be incorporated within an organization as a market-based management approach. As presented by Gable and Ellig (2008, p.8), Table 1 shows the correlation of the six elements of market systems within organizations.
Table 1 – Element of Market Systems and Organizations
Market Economy Organization Division of Labor Mission System Property Rights Roles and Responsibilities Rules of Just Conduct Values and Culture Price System Internal Markets Free Flow of Ideas Open Communication Market Incentives Compensation and Motivation Market based management is based on the belief that when these elements are “spread throughout the organization, the organization‟s resources can and will create value over the long term by being responsive to the needs of the
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