This article throws light upon the ten main challenges faced by managers in an organisation. The challenges are: 1. Globalisation 2. Quality and Productivity 3. Ownership 4. Environment 5. Strategy Formulation 6. Ethics and Social Responsibility 7. Workforce Diversity 8. Change 9. Empowerment 10. Information Technology.
Challenge # 1. Globalisation:
Almost all home companies face the challenge of competition with their international counterparts. Small retailers, big manufacturers, all are competing with the international products. It has resulted in greater complexities, greater economic and political risk and uncertainty. The problems of internationalization are faced in the fields of goods and services, finance, human resource and advertising. An important question that managers have to answer, therefore, is “Should we focus on globalisation or regionalism?”
“Globalisation means that activities be managed from an overall global perspective as part of an integrated system. Regionalism involves managing within each region with less regard for the overall organisation”. It is observed that most companies manage their finance and manufacturing activities at the global level and human resource and advertising at the regional level.
Challenge # 2. Quality and Productivity:
Companies compete with international competitors with respect to quality and productivity of goods and services. Successful companies have been able to maintain and enhance the quality of goods and services with fewer resources (productivity). Managers must, therefore, focus on producing more and better with fewer resources.
Quality is “the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs”. Productivity is “an economic measure of efficiency that summaries the value of outputs relative to the value of the inputs used to create them”. Quality and productivity are important determinants of business that affect its success.
Challenge # 3. Ownership:
Another area that concerns managers is ownership. Large foreign investors are buying stocks of home companies and ownership can be transferred in their hands. Profitability and productivity, thus, may suffer.
Challenge # 4. Environment:
Environment is changing at a fast rate. Organisations have to change with the competitive environment to maintain their customers. Managers should develop deep understanding of the internal and external environmental factors and their application to business operations.
Challenge # 5. Strategy Formulation:
Just as everything around is constantly changing, business firms must watch the strategies and strategic management. Strategies keep changing according to environmental changes. “Strategic management is a way of approaching business opportunities and challenges—it is a comprehensive and ongoing management process aimed at formulating and implementing effective strategies.”
It keeps managers constantly involved and promotes healthy interaction between the organisation and the environment. Managers who frame effective strategies will remain in the market and those who fail to do so will leave the market. Strategy formulation, therefore, requires constant attention of contemporary managers.
Challenge # 6. Ethics and Social Responsibility:
Firms which do not adhere to ethical standards and social responsibilities are not accepted by the society. It is, therefore, a challenge for managers to define relationships with the social environment. Organization that violates social expectations has the risk of legal interference, loss of goodwill and even loss of business.
Challenge # 7. Workforce Diversity:
Diversity in the workforce exists when members differ along dimensions like race, colour, caste, creed, nationality, gender etc. Traditionally, organisations were managed by workforce with no or very little diversity, like all men, all whites or all Indians but today almost all organisations experience tremendous change in the composition of workforce. Firms employ people from diverse sets of cultural, social, economic and ethical backgrounds at almost every organisational level.
Though diversity offers competitive advantage in terms of cost, resource acquisition, marketing, creativity, problem-solving and systems flexibility, it also becomes a source of conflict in many organisations. People native to the organisation may not readily accept to work with people of other cultural backgrounds.
Even if they agree to do so, there may arise a fear, distrust or individual prejudices in the work environment. If the Indian manager praises the U.S. worker publically, it may create unhappiness amongst the Indian workers.
The organisations, therefore, face the challenge of addressing a variety of issues, opportunities and problems created by the diverse workforce. In the globalized world, diversity cannot be avoided. Managers have to radically devise means to overcome the problems of diversity. Though largely it has been done, problems, if any, have to be overcome.
Challenge # 8. Change:
Change is a continuous process. If firms want to compete in the complex, dynamic and diverse environment as they are facing today, where expectations from managers and their organisations are on an ever increase, they must accept the changes that confront their every day life.
Firms which do not change their operations with the changing environment (internal and external) may have to close their operations. Managers have to continuously respond to change and look to future with hope and optimism.
Challenge # 9. Empowerment:
Though management is ‘the art of getting things done through others,’ the others/subordinates will not do things if they have to merely carry out the orders and instructions of managers. Workers want more information about the organisation to perform and control their jobs. Participative decision-making and formation of groups and work teams help in fulfillment of individual, group and organisational goals.
The basic requirement, therefore, is to communicate with the external environment and their workforce. Communication is a major task of managers today. They must convey organisational goals to individuals and understand their individual goals, in turn. Failure to do so will result in loss of empowerment. This will affect organisational goals, both quantitative and qualitative.
Challenge # 10. Information Technology:
Information technology “refers to the resources used by an organisation to manage information that it needs to carry out its mission”. Information is an important part of communication and managers have to be careful in selecting the amount and type of information (out of the large quantity of information available) for carrying out the business operations. Lack of control over use of information can result in lack of control over business operations.
Managers have to carefully collect the right information, use it effectively and ensure that right information is leaving the organisation to enter the environment. Management Information System (MIS) has largely taken care of this.