This article throws light upon the top four measures which help to ensure success of the organisation. The measures are: 1. Maintain Good Relations with the Stakeholders 2. Motivate the Employees 3. Develop Plans to Achieve the Objectives 4. Define the Authority and Responsibility of Managers.
Measure # 1. Maintain Good Relations with the Stakeholders:
Stakeholders have important role to play in the success of an organisation. They can provide useful guidelines to directors regarding company’s strategic plans and policies. For this, they have to know companies’ operations in complete transparency.
This means following the principles of corporate governance. If the directors feel that stakeholders have no knowledge of company and that directors themselves are the best persons to take organisational decisions, this may not always work in the best interest of the company. They may, in-fact, use company information for maximising their personal interests.
Measure # 2. Motivate the Employees:
It is important for success of an organisation to have a committed team of employees, motivated to work for the cause of the organisation. A committed workforce helps in making strategic plans and adapt to the changing environmental variables.
The following components promote a committed and dedicated workforce:
It is the foresightedness of the entrepreneur who sees an opportunity in the business. He has an idea which can be converted into a workable exercise which may be to provide service to the society. The entrepreneur sees an opportunity in the market which he wants to exploit to achieve success for the common good. Entrepreneur’s vision is the seedbed of organisational success.
Mission gives shape to the organisation’s vision. It is a specific term that explains why an organisation exists. “A mission statement is a broad declaration of the basic, unique purpose and scope of operations that distinguishes the organisation from others of its type”. A mission is thus, more specific than the vision.
(x) It provides reason to organisation’s existence.
(y) It promotes creativity and innovativeness of organisational members,
(z) It helps outsiders (Government, suppliers, creditors etc.) to know the organisation’s internal functioning.
A study revealed the following components of the mission statements (all or some):
1. Customers of the organisation.
2. Products or services provided by the organisation.
3. Location of the organisation.
4. Technology adopted by the organisation.
5. The organisation’s concern for survival, i.e., its commitment to economic objectives.
6. The basic philosophy, beliefs, values and aspirations of the organisation.
7. Self-concept, i.e., organisation’s strengths and competitive advantages.
8. Concern for public image i.e., organisation’s present and prospective responsibilities towards public.
9. Concern for employees by paying them adequate compensation according to their abilities, skills and contribution towards organisational operations.
Mission statement is a document that communicates the corporate philosophy, identity and image to members of the organisation. It also helps the society to know what the organisation is when they are dealing with it.
A mission statement must, therefore, have the following features:
1. Mission should be clear so that it is easily understood
2. It should have achievable standards; neither too high nor too low
3. It should be precise; neither too narrow to limit organisation’s activities nor too broad to make it vague.
Mission, thus, sets standards for employees’ behaviour and gives responsibility to directors to look after interests of the stakeholders. It contains the basic values and beliefs of the company.
Goals are more specific than mission and cover the financial and non-financial areas of organisational operations. They refer to non-measurable future ends and are broader than objectives. They are broadly framed for various functional areas like, operations, market share, productivity, human resource development, finance etc.
Objectives refer to specific, measurable ends. They are identifiable goals towards which organisational activities are directed. They are the end results of the organisation’s operations. Objectives are the specific targets or standards against which actual performance can be measured. “It is a future target or end result that an organisation wishes to achieve.” Planning is meaningless if objectives are not framed. Objectives serve as guide to planning i.e., planning is directed towards specific objectives.
Production target of 1,000 units every month or profit after tax of Rs. 100 lakh every year are the specific and measurable goals or objectives which can be estimated and verified. These four broad components of creating a committed workforce and thereby ensuring organisational success can be ensured by judiciously adopting the principles of corporate governance.
Measure # 3. Develop Plans to Achieve the Objectives:
Plans are made to achieve the vision, mission, goals and objectives of the organisation. Planners must conduct a thorough market research before framing plans. “What potential customers say they are going to do and what they end up doing may be two different things.”
Plans should, therefore, forecast the market requirements through a well conducted market research. Best laid plans may turn out to be failures if they are not implemented properly in the organisation. It is important, therefore, that plans are acceptable not only to those who frame them but also to those who implement them.
The acceptability of plans increases if subordinates participate in the planning process. Many organisations allow participation in planning as it promotes group decision-making. Managers obtain ideas/suggestions from subordinates of different departments at different levels and finalize the plans. Participative planning promotes good ideas and creates obligation on the part of managers to control the planning activities.
This requires transparency in organisational operations. Transparency promotes the feeling of oneness amongst employees and they feel everybody is being treated fairly and equally. This requires resorting to the principles of good corporate governance.
Measure # 4. Define the Authority and Responsibility of Managers:
The authority and responsibility of managers should be well-defined to avoid overlapping of tasks. They know what they have to do without encroaching upon others’ authority. Building cross functional teams can avoid overlapping and lead to multitasking in the organisation. Norms for every team should be set so that ethical climate can prevail in the organisation. Erring employees are afraid of losing their jobs and, therefore, conform to ethical practices.
1. Directors should empower the employees to make their own decisions. A climate of total quality management (TQM) and quality circles empowers the workers with the support of top managers and improves the quality of business operations.
2. Directors should give authority to people down the scalar chain along with responsibility and define the critical points of control to ensure that managers use authority within the defined limits of discretion. Standards should be framed for comparison and deviations should be checked from time to time.
3. Full trust and faith should be developed amongst directors and employees so that both work for the benefit of each other. This reduces the turnover rate and saves huge cost of attracting (recruitment and selection) and retaining (training and compensation) the employees. This creates an environment of creativity and innovativeness where employees take challenging tasks to promote organisational success.
Corporate governance helps in self-regulation and achieve the above parameters of organisational success. It is “a system and a process, consistent with principles and practices which are used by the corporate firms of a free and open society. It assigns final authority and full responsibility of managing the firm to the Board of Directors of the firm”.
A free and open society works in the interest of people and creates a strong economy. It promotes self-regulation through corporate governance which stops formation of cartels and promotes healthy competition in the society. It works in the maximum interest of the consumers who get the best of products at the best price.