Unit 1 3

Understanding Management 70
MASTERING THE MANAGEMENT SYSTEM 5
MANAGEMENT SYSTEM 5
Skill, competencies and knowledge of successful manager 8
Managerial skills: 8
Technical skills 8
Interpersonal skills 8
Conceptual skills 8
Diagnostic skills 8
Communication skills 9
Decision-Making skills 9
Time Management skills 9

The competencies and knowledge of successful manager are:- 9

Provide high-impact performance feedback: 9
Focus on employees’ career development needs: 10
Maximize your leadership strengths: 10
Advocate organizational changes necessary for developing and keeping top talent: 10
Delegation 10
Self-development 10
Patience 10
Management Thoughts 11

Unit 2 12
Approaches to Empowerment: 13

Unit 3 13
Team Building Process 13
Barriers to effective team building 16

Unit 4 17
Outsourcing Models: 17
Impact of Outsourcing in Organizational Effectiveness 18

Unit 5 20
Effective Corporate Rating System 20

Unit 6 23
Concept of organizational culture 23
A Framework for Examining Culture 70

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 Cross Cultural Management 70

Unit 7 37
Emerging Leadership Issues 37

Unit 8: CONFLICT 39
Conflict Resolution Techniques 39
Techniques to Effective Negotiation 43

Unit 9 45
Joseph Juran in quality management 45
What is Total Quality Management 47
Total Quality Management 47
Edward Deming in Quality Management 49
Six Sigma 52
Implication of Six Sigma: 57
Option 1: Implement a Six Sigma Program or Initiative 57
Option 2: Create a Six Sigma Infrastructure 58

Unit 10: Knowledge and Talent Management 59

An integration of thought on Knowledge Management 59
Barriers to Implement Knowledge Management in Organization 62
ORGANIZATION AS A TALENT FACTORY 63

Unit 11 68
What is Corporate Governance? 68
Role of Knowledge Management 69
Empowering Organizational Leadership In 21st Century. 70

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Unit 1

Understanding Management
Every day, managers solve difficult problems, turn organization around and achieve impressive
goals. To be a successful, every organization needs good managers.
What characteristic do all good managers have in common? They get things done thought
their organizations. Managers are the executive function of the organization, responsible for
building and coordinating an entire system rather than performing specific tasks. That is, rather
than doing all the work themselves, good managers create the systems and condition that
enable other to perform those tasks.
Thus, definition of management is as follows:
● Management is the attainment of organizational goals in a effective and efficiency
manner through planning, organizing, leading, and controlling organizational resources.
● Management is an important element in every organizational activities and plan for the
future. It adapts the organization to its environment and shapes the organization to make
it more suitable to the organization.
● According to the F.W Taylor “Management is the art of ‘knowing what you want to do’
and then seeing that it is done in the best and cheapest way.”
● According to the George Terry “Management as a process ‘consisting of planning
organizing, actuating and controlling performed to determine and accomplish the
objective’ by the use of people and resources.”
This definition holds two important ideas: (1) the four function of planning organizing , leading,
and controlling and (2) the attainment of organization goal in effective and efficient manner.

The four Management function:

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Planning
Planning means identifying goal for future organizational performance and deciding on
the tasks and use of resources needed to attain them.

Organizing
Organizing typically follows planning and reflects how the organization tries to
accomplish the plan. Organizing involves assigning tasks, grouping tasks into
departments, delegating authority and allocating resources across the organization.

Leading
Leading is the use of influence to motivate employer to achieve organizational goal.
Leading involves motivating entire departments and division as well as those individual
working immediately with the manager. Many managers working g quietly in both large
and small organizations around the world also provide stronger leadership within
departments, teams, nonprofit organization and small business.

Controlling
Controlling is the fourth function in the management process. Controlling means
monitoring employees’ activities, determining whether the organization is on target
toward its goal, and making corrections as necessary. Managers must ensure that the
organization is moving toward its goal trends towards empowerment and trust of
employees have led many companies to place less emphasis on top-down control and
move emphasis on training employees to monitor and correct themselves.

Managerial skills

Technical skill
A person knowledge and ability to make effective use of any process or technical skills.
For eg: Engineer, lawyer, doctor, accountant etc.

Human skills
An individual ability to cooperate with other members of the organization and work
effectively in team.
For eg : Interpersonal relationship solving people’s problem.

Conceptual skills
Ability of an individual to an analyze complex situation and to rationally process and
interpret available information.
For eg: Idea generation and analytical process of information.

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MASTERING THE MANAGEMENT SYSTEM

MANAGEMENT SYSTEM
Management system is itself challenging for organization. Management system try to operate
the management organization smoothly and accepting the challenge and make possible
solution and try to operate the operation smoothly without difficulties.
Mastering the management system focus on operational concerns with long-term strategic
priorities. Successful strategy execution has two basic principle rules.
1.Understand the management cycle that links strategy and operations.
2. Tools to apply at each stage of cycle.
In this article, Kaplan, of Harvard Business School, and Norton, founder and director of
palladium group, explain how effectively manage both strategy and operations by linking them
tightly in closed loop management system. This management system comprises following
stage.

The system comprises five stages

1. Develop the strategy

2. Translate the strategy

3. Plan operation

4. Monitor and learn

5. Test and Adapt the strategy

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 1. Develop the strategy
The management system cycle begins with articulating the company’s strategy. This usually takes place at
the annual offsite meeting during which the management team either incrementally improves an
existing strategy or, on occasion, introduces an entirely new one. This strategy generally have three
to five year of useful life.
a. Define mission
b. Define vision
c. Define organization values
d. Formulate strategy

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 2. Translate the strategy
Once the strategy has been formulated, manager need to translate it into objective and measures that can be
clearly communicated to all units and employees.
The strategy map provides a powerful tool for visualizing the strategy as a chain of cause and effect
relationship among strategic objective.

a. Define strategic objective and theme

b. Select measures and targets
c. Select strategic initiatives

3. Plan operation
In this stage company develops an operational plan that lays out the actions that will accomplish its strategic
objectives. This stage start with priorities for process improvement projects, followed by preparing a
detailed sales plan, a resource capacity plan, and operating and capital budget.

4. Monitor and Learn

As a company implement their strategic and operational plans, they need to arrange meeting and learn from
the result. The manager need to arrange three types of meeting.

a. Operational review
b. Strategy review
c. Strategy testing and adapting.

And these meeting review focus on

a. Information requirements
b. Frequency
c. Attendees
d. Focus
e. Goal

5. Test and adapt the strategy

From time to time manager will discover that some of the assumptions underlying their strategy are flawed
or obsolete. When that happens, managers need to rigorously reexamine their strategy and adapt it,
deciding whether incremental improvement will suffice or whether they need a new, transformation
strategy. This process closes the loop of the management system.

It’s helps in
a. Statistical analysis

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b. Cost and profitability reports

Skill, competencies and knowledge of successful manager

Managerial skills:
In addition to fulfilling numerous roles, manager also need a number of specific skills if they are to
succeed. The most fundamental management skills are technical, interpersonal, conceptual, diagnostic,
communication, decision-making and time management skills.

Technical skills
Technical skills are the skills necessary to accomplish or understand the specific kind of work being done
in an organization. Technical skills are especially important for first line managers. These managers spend
much of their time training subordinates and answering question about work-related problems. They must
know how to perform the task assigned to those they supervise if they are to be effective manager.

Interpersonal skills
Managers spend considerable time interacting with people both inside and outside the organization. For
obvious reason, then, the manger also needs interpersonal skills-the ability to communicate with,
understand, and motivate both individual and groups. As a manger climbs the organization ladder, he or
she must be able to get along the subordinates, peers and those at higher level of the organization.
Because of the multitude of roles that managers must fulfill, a manager must also be able to work with
suppliers, customers, investors, and other outside of the organization.

Conceptual skills
Conceptual skills depend on the manager’s ability to think in the abstract .Managers need the mental
capacity to understand the overall workings of the organization and its environment, to grasp how all the
parts of the organization fit together, and to view the organization in a holistic manner. This allows to
think strategically, to see the big picture and to make broad based decisions that serve the overall
organization.

Diagnostic skills
Successful managers also possess diagnostic skills, or skills that enable a manager to visualize the most
appropriate response to a situation. A physician diagnoses a patient illness by analyzing symptoms and
determining that probable cause. Similarly, a manger can diagnosis and analyze a problem in the
organization by studying its symptoms and then developing a solution. When the original starbucks failed
to make success of the business, Howard Schultz took over, reoriented the business away from mail order,

8
and moved it into retail coffee outlets. His diagnostic skills enabled him to understand both why the
current business model was not working and how to construct a better one.

Communication skills
Communication skills refer to the manager’s abilities both to effectively convey ideas and information to
other and to effectively receive ideas and information from others. These skills enable a manger to
transmit ideas to subordinates so that they what is expected to coordinate work with peers and colleagues
so that they work well together, and to keep high level of managers informed about what is going on. In
addition, communication skills help the manger listen to what others say and to understand real meaning
behind e-mails, letters, reports and other written communication.

Decision-Making skills
Effective managers also have good decision-making skills. Decision making skills refer to the manager’s
ability to correctly recognize and define problems and opportunities and to then select a appropriate
course of action to solve problems and capitalize on opportunities. No manager make the right decision
all the time .However, effective manager make good decisions most of the time. And, when they do make
a bad decision, they usually recognize their mistake quickly and then make good decision to recover with
little cost or damage to the organization as possible.

Time Management skills

Finally, effective managers usually have good time management skills. Time management skills refer to
the manager’s ability to prioritize work, to work efficiently, and to delegate appropriately. As already
noted, managers face many different pressures and challenges. It is easy for manager to get bogged down
doing work they can easily be postponed or delegated to others when this happens, unfortunately, more
pressing and higher-priority work may be neglected.

The competencies and knowledge of successful manager are:-

Understand multigenerational workforce trends:
Baby Boomers, who once dominated the workforce, now are beginning to retire. Our youngest
employees, the Millennials, soon will be the largest cohort in the workforce and have very different work
styles than previous generations. Effective managers understand the needs of the different generations and
adapt accordingly.

Provide high-impact performance feedback:

To help employees to develop to their full potential, effective managers know how to provide frequent
positive and constructive feedback in a way that motivates both under-performing and high-performing
employees.

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Focus on employees’ career development needs:
A key reason high-performing employees stay at their jobs is because they have the opportunity to learn
and grow. Effective managers develop career development plans with their employees and follow up to
ensure the plans are implemented.

Maximize your leadership strengths:

A strengths-based management style ensures that managers are aware of their own strengths and interact
with employees and the leadership team in a way that capitalizes on their own strengths. Effective
managers are also aware of their employees’ strengths and consciously create development opportunities
that maximize employees’ strengths.

Advocate organizational changes necessary for developing and keeping top

talent:
Organizations often need to make adaptations in their structure and policies in order to develop and keep
a high-achieving workforce. Effective managers are skilled at helping senior management understand the
need to make changes that satisfy employee needs and create a thriving organization.

Delegation
As the manager of the team you are unable to achieve all your objectives by yourself. The greatest
managers know how to tap into the power and strengths of people in their teams. They are then able to
delegate effectively to those they know will get the job done. All delegation must be clear and supported
by the manager. Delegation is not abdication and the manager must always have a back-up plan in case
things do not turn out as expected as they are still ultimately responsible.

Self-development
No manager is the finished article. Constant personal development and flexibility of behavior will help
ordinary managers to be great managers. Be open to a variety of opportunities to learn new things. You
may find that the people within your team provide many learning situations. Getting involved with local
voluntary and community groups enable you pick up more experience and how management skills can be
honed in different circumstances. It’s also an ideal way to give back and contribute to your own
community. This is a great way to set an example to others who might be considering this option.

Patience
People do not always behave as expected or as you would like. Developing patience and getting to know
people will reap rewards in the long term. Sometimes people just need time and space to develop their
own ways of doing things. Just because you have developed one way, does not mean this will be the best
for your employee. So develop a level of tolerance just beyond your normal patience levels to give people
the chance to develop.

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Management Thoughts
Management in all business areas and organizational activities is the act of getting people
together to accomplish desired goals and objectives efficiently and effectively.

Management comprises planning, organizing, staffing, leading or directing and controlling an

organization (a group of one or more people or entities) or efforts for the purpose of
accomplishing a goal. Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological resources and natural resources.

The diagram given under represents the most important contribution to the modern man-agement
thoughts. Only few important pioneers have been listed. Vertical columns represent the broad
divisions. Some pioneers of management thoughts made the contribution in more than one field
(e.g. Taylor). Here we are dealing only some of those ideas that have made important role to the
management thoughts.

Management being very wide and comprehensive subject, developed since civilization, and the
present state has been achieved gradually. Management thoughts have been developed very

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slowly and managers are working since centuries. But the actual development in the field of
management has taken place in last one hundred years only

With the increasing growth and size of organizations, there is need for more efficient man-agers.
Depending upon the efficiency of the management some companies have grown, whereas others
have stagnated or even been eliminated.

It is very difficult to write detailed description on the development of management thoughts,

since much work has gone unnoticed and unrecorded. Whereas, writers on management have
been very few. Here only the most important thoughts are covered.

These pioneers laid the foundation of modern management.

Development of Management Science can be studied in 3 categories:

1. Functional Approach, which includes work of Fayol,

2. Scientific Management approach, which includes the work of Taylor, Gilbreth and Gantt.

3. Human Relations approach, which includes the work of Mayo, Owen and Follet.

Unit 2
Concept of Empowerment
Empowerment refers to the delegation of some authority and responsibility to employees and
involving them in the decision-making process, not in mere job activities, but rather at all the
levels of management. Empowerment is the concept in management that if employees are given

12
information, resources, and opportunity at the same time as being held responsible for their job
outcomes, then they will be more productive and have higher job satisfaction. It is important to
understand that a company cannot implement empowerment itself - instead, management creates
the right environment so that empowerment can take place.

Approaches to Empowerment:
The real problem is, in fact, how to empower employees. Like other behavioural problems, the
researchers have studied the problem and have suggested five broad approaches to
empowerment.

These are:
1. Helping employees achieve job mastery. (Giving proper training, coaching, and guided
experience that will result in initial successes)

2. Allowing more control. (Giving them discretion over job performance and then holding them
accountable for outcome)

3. Providing successful role models. (Allowing them observe peers who have already performed
successfully on their jobs)

4. Using social reinforcement and persuasion. (Giving praise, encouragement, and verbal
feedback designed to raise self-confidence)

5. Giving emotional support. (Providing reduction of stress and anxiety through better definition,
task assistance, and honest caring)

Unit 3

Team Building Process

Psychologist Bruce Tuckman first came up with the memorable phrase "forming, storming,
norming, and performing" in his 1965 article, "Developmental Sequence in Small Groups." He
used it to describe the path that most teams follow on their way to high performance. Later, he
added a fifth stage, "adjourning" (which is sometimes known as "mourning").

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Let's look at each stage in more detail.

Stage 1: Forming

The "forming" stage takes place when the team first meets each other. In this first meeting, team
members are introduced to each. They share information about their backgrounds, interests and
experience and form first impressions of each other. They learn about the project they will be
working on, discuss the project's objectives/goals and start to think about what role they will play
on the project team. They are not yet working on the project. They are, effectively, "feeling each
other out" and finding their way around how they might work together.

During this initial stage of team growth, it is important for the team leader to be very clear about
team goals and provide clear direction regarding the project. The team leader should ensure that
all of the members are involved in determining team roles and responsibilities and should work
with the team to help them establish how they will work together ("team norms"). The team is
dependent on the team leader to guide them.

Stage 2: Storming

As the team begins to work together, they move into the "storming" stage. This stage is not
avoidable; every team - most especially a new team who has never worked together before - goes
through this part of developing as a team. In this stage, the team members compete with each
other for status and for acceptance of their ideas. They have different opinions on what should be
done and how it should be done - which causes conflict within the team. As they go progress
through this stage, with the guidance of the team leader, they learn how to solve problems
together, function both independently and together as a team, and settle into roles and
responsibilities on the team. For team members who do not like conflict, this is a difficult stage
to go through.

The team leader needs to be adept at facilitating the team through this stage - ensuring the team
members learn to listen to each other and respect their differences and ideas. This includes not
allowing any one team member to control all conversations and to facilitate contributions from
all members of the team. The team leader will need to coach some team members to be more
assertive and other team members on how to be more effective listeners.

This stage will come to a closure when the team becomes more accepting of each other and
learns how to work together for the good of the project. At this point, the team leader should start
transitioning some decision making to the team to allow them more independence, but still stay
involved to resolve any conflicts as quickly as possible.

Some teams, however, do not move beyond this stage and the entire project is spent in conflict
and low morale and motivation, making it difficult to get the project completed. Usually teams
comprised of members who are professionally immature will have a difficult time getting past
this stage.

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Stage 3: Norming

When the team moves into the "norming" stage, they are beginning to work more effectively as a
team. They are no longer focused on their individual goals, but rather are focused on developing
a way of working together (processes and procedures). They respect each other's opinions and
value their differences. They begin to see the value in those differences on the team. Working
together as a team seems more natural. In this stage, the team has agreed on their team rules for
working together, how they will share information and resolve team conflict, and what tools and
processes they will use to get the job done. The team members begin to trust each other and
actively seek each other out for assistance and input. Rather than compete against each other,
they are now helping each other to work toward a common goal. The team members also start to
make significant progress on the project as they begin working together more effectively.

In this stage, the team leader may not be as involved in decision making and problem solving
since the team members are working better together and can take on more responsibility in these
areas. The team has greater self-direction and is able to resolve issues and conflict as a group. On
occasion, however, the team leader may step in to move things along if the team gets stuck. The
team leader should always ensure that the team members are working collaboratively and may
begin to function as a coach to the members of the team.

Stage 4: Performing

In the "performing" stage, teams are functioning at a very high level. The focus is on reaching
the goal as a group. The team members have gotten to know each other, trust each other and rely
on each other.

Not every team makes it to this level of team growth; some teams stop at Stage 3: Norming. The
highly performing team functions without oversight and the members have become
interdependent. The team is highly motivated to get the job done. They can make decisions and
problem solve quickly and effectively. When they disagree, the team members can work through
it and come to consensus without interrupting the project's progress. If there needs to be a change
in team processes - the team will come to agreement on changing processes on their own without
reliance on the team leader.

In this stage, the team leader is not involved in decision making, problem solving or other such
activities involving the day-to-day work of the team. The team members work effectively as a
group and do not need the oversight that is required at the other stages. The team leader will
continue to monitor the progress of the team and celebrate milestone achievements with the team
to continue to build team camaraderie. The team leader will also serve as the gateway when
decisions need to be reached at a higher level within the organisation.

Even in this stage, there is a possibility that the team may revert back to another stage. For
example, it is possible for the team to revert back to the "storming" stage if one of the members
starts working independently. Or, the team could revert back to the "forming" stage if a new
member joins the team. If there are significant changes that throw a wrench into the works, it is

15
possible for the team to revert back to an earlier stage until they are able to manage through the
change.

Stage 5: Adjourning

In the "adjourning" stage the project is coming to an end and the team members are moving off
into different directions. This stage looks at the team from the perspective of the well-being of
the team rather than from the perspective of managing a team through the original four stages of
team growth.

The team leader should ensure that there is time for the team to celebrate the success of the
project and capture best practices for future use. (Or, if it was not a successful project - to
evaluate what happened and capture lessons learned for future projects). This also provides the
team the opportunity to say good-bye to each other and wish each other luck as they pursue their
next endeavour. It is likely that any group that reached Stage 4: Performing will keep in touch
with each other as they have become a very close knit group and there will be sadness at
separating and moving on to other projects independently.

Barriers to effective team building

1) Poor Communication
Poor communication can be possible barriers in effective team building. Therefore, team
members should prior open communication by using daily team meetings to ensure everyone is
on the same page and start communication between coworkers.

2) Unclear Goals
A work team is created to achieve certain organizational goal. When those goals are not
presented clearly by management, or by the individual responsibilities of each team member in
achieving those goals are unclear, then the team cannot work effectively.

3) Lack of Managerial Involvement

Manager creates team of qualified staff members in order to complete predetermined tasks or
projects. Since, every team needs a leader, and when the leader is not present efficiently, and
then the team will not be able to properly develop.

4) Organizational goal Vs. Individuals goal

Team members should prior organizational goal in comparison to individual’s goal in order to
develop effective team. For the maximum output, the team members must think of their team
first and everything else should come later. One has to respect his team as well as his
organization to expect the same in return.

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5) Lack of freedom and responsibility
Creating a team and failing to give them the freedom and authority to act is like teaching a
person to ride a bicycle, giving them a bike, but then telling them they can ride only in the house.
Team members should have given freedom and responsibility for increasing their efficiency such
that team’s goal is achieved.

Jyoti Thapa 3.3 Managing multicultural teams

Unit 4
Outsourcing Models:
In a bid to cut operational costs while growing their business, companies these days rely on
outsourced help.

Outsourcing is an arrangement where a company delegates internal roles or services to a third-

party firm. The setup differs from one company to another, depending on their needs and goals.
If you are planning to outsource some of your business operations, it is important that you
understand how each outsourcing model works in order to maximize the benefits and mitigate
potential risks.

Let’s Define Outsourcing Models

Generally speaking, you can define outsourcing based on what is being outsourced and how the
service is delivered. Below are the five common outsourcing models.

1. Staff augmentation

Sometimes, companies outsource because they need more skilled people but don’t necessarily
need their services full time, or don’t have the resources to pay for it. This is where staff
augmentation comes in. This model is usually used when a company decides to offer add-on
services that they currently lack, e.g. support services for market expansion.

1. Project-based outsourcing

As the name suggests, project-based outsourcing applies to companies with one-off or irregular
projects. Often, these projects are of low to medium complexity and have well-defined

17
requirements and deliverables. Companies outsource these projects so they can have a dedicated
team to take on the job, causing little to no disruption to their regular operations.

1. Out-tasking/Contracting
This approach involves the transfer of a specific process or service from a company to the
outsourcing partner. Out-tasking engagements are best for business owners who wish to keep
control over the process being outsourced. It may involve licensing, wherein the buyer obtains
permission to use the other company’s intellectual property, or contracting, wherein the external
supplier performs a set of tasks or manages a group of processes for the buyer. Contracting is
somewhat similar to staff augmentation in that labour is used on an hourly, daily, weekly,
monthly or yearly basis.

1. Managed services
Managed services refer to the proactive management of backend office functions or
infrastructure by a third party on behalf of a company. In other words, a managed service
provider (MSP) assumes all ongoing responsibility for handling, monitoring and problem solving
for selected business functions. Managed services are common for IT functions, but this may
also include outsourcing of HR activities, daily operations and production support.

1. Offshoring
In this outsourcing model, a company locates its own dedicated resources in another country. A
good example of this are Australian companies relocating their contact centres in the Philippines.
This allows them to leverage top talents at a relatively lower price, while maintaining control
over their process and service delivery. Offshoring also allows companies to get closer to their
clients and to gain access to new market opportunities.

Choosing an outsourcing model that fits your business can give you the flexibility and
capability to achieve your goals and sustain your growth over time. More importantly, the
success of an outsourcing project depends on the third party you work with – so choose only the
best outsourcing partner.

Impact of Outsourcing in Organizational Effectiveness

Outsourcing is contracting with another company or person to do a particular function. Almost
every organization outsources in some way. It is the process of engaging a third party individual
or organization outside of your company, either locally or internationally, to handle certain
business activities for you. It is a common business practice that allows companies of all sizes to
grow as and when they need it, without major risk or investment. Typically, the function being
outsourced is considered non-core to the business.

Once the task is outsourced to the service provider, he will take the responsibility of carrying out
the tasks and maintaining the organization’s assets. However prior to outsourcing any component

18
of your business to a third-party vendor, it is essential to understand the advantages and
disadvantages of outsourcing. Although outsourcing presents a variety of benefits to your
organization, it could also pose difficulties if not outsourced to the right service provider.

Every organization engages in one form of outsourcing or other, be it manufacturing services,

information technology, management services, product engineering, and research process or
marketing services. The choice of what functions to outsource and which to keep in-house is
based on the need to develop skills, invest in resources, and stay abreast of evolving technology
in any areas kept in-house.

Outsourcing is often undertaken to provide enterprises a competitive advantage by delegating

business process to external agencies and realizing the benefits of low labor, better quality and
improved innovation. While this provides a good picture of the fair side of the coin, most
managers however need to grope with the possible shortcoming of the process and the
corresponding impact on the company's core processes.

Some of the positive impacts of outsourcing in organizational effectiveness are as follows:

• Access to skilled expertise:

The right kind of person or human resource might be in need by the organization for the
particular position that may be on contract basis for certain time being. And outsourcing can be
useful in such situation to locate right kind of skilled expertise. European football clubs buy and
sell their player on loan or on contract basis in order to meet their target through that transfer as
players can fulfill the position required. Same thing goes for the organization also.

• Focus on core activities:

Workload increases with additional non core functions and the quality of core activities suffers
as the business grows. Outsourcing is such a scenario to a third party plays an important role by
allowing key resources to focus on primary business tasks. For example: in Nepal banking
sectors hire such person from outsourcing to do basic filing work that is essential for department
managers.

• Better risk management:

Outsourcing will allow one to share any associated risks with one’s outsourcing partners thereby
reducing the burden. For example: by outsourcing to a competent outsourcing partner one can
reduce the risk involved in having the same task done in- house by the staff that may not be as
competent in that field.

• Staffing flexibility:

Outsourcing certain independent tasks, allows the business to maintain a financial flexibility
when there is an uncertainty in demand. There will be low management cost and no training

19
needed. For example: outsourcing of security guard in any organization in Nepal requires no
training and low management cost.

• Cut cost and save big:

When a particular type of work is outsourced, then the company or organization does not require
hiring skilled people for it. There will also be no need for arranging for training programmes for
the same. The work will be handed over to people who are already experts in that trade. This will
also bring in efficiency and quality in the work.

One does not need to spend extra on developing infrastructure. When the work is outsource, the
partner who takes over the outsourced work, make necessary infrastructural changes, as per the
requirement of the work.

However there are some disadvantages of outsourcing for the organization if not managed
properly and wrong human resource or expertise is selected. Some of them can be:

• Possible loss of control over a company's business processes

• Problems related to quality and turnaround time

• Sluggish response times coupled with slow issue resolutions

• Lower than expected realization of benefits and results

• Issues pertaining to lingual accent variation

• An irate customer base coupled with enraged employee unions

Unit 5

Namrata Khanal 5.1 Concept and Domains of corporate governance

Effective Corporate Rating System

With increasing emphasis being placed on CG across the globe, it is not surprising that a number
of governance rating systems have been developed. The ratings will be useful to the governments
in identifying the perceived levels of CG in their country whose companies may be competing
for limited foreign investment. In emerging market countries in particular, those companies with

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a strong CG infrastructure will be less subject to cronyism and its attendant effects on corporate
wealth. These companies would tend to be more transparent and accountable, and hence, more
attractive to foreign investors. This is because a company with good CG is generally perceived as
more attractive to investors than one without.
CG rating systems should provide a useful indication of the CG environment in specific
countries, and in individual companies within those countries. Such rating systems will provide a
useful “benchmarks” for the majority of investors who identify good CG with a well-run and
well-managed company. These systems are based on what is known as the scorecard: The CG
rating systems scorecard should:

· Facilitate the work of analysts and investors through a systematic and easy overview of
all relevant issues of good governance.
· Enable companies to easily assess the ‘reach’ and the ‘quality’ of their own governance
situation.
· Allow setting of minimum scores by investors for governance as part of general
investment politics.
· Enable comparisons across-industries and across-countries.
· Be readily available to all interested parties via the Internet.
· Ensure high degrees of usage: the completion of the Scorecard via programmed tools
(MS Excel) should therefore be possible.

Corporate rating is indicative and done for the enterprise that pays for it. It is not meant to aid
investors to take investment decisions. At the end of the rating process, the system produces the
“total score,” say out of hundred, that is further segmented to ranges of performance (%s) to
categorize enterprises as excellent, very good, good, etc. These ratings can be used for making
proxy voting decisions and screening portfolios for investment risks. In the following section, we
present a brief discussion of the most popular effective corporate rating system categories.

Category 1: Board Structure and Accountability

The simple fact that the board and executives structure exists on the scoreboard rating system is
in itself a positive sign as it ensures some kind of improvements and adjustments after each

21
report card is issued for the company. The following topics are usually considered in this
category:
· independence of board members;
· board size;
· board attendance;
· chairman/CEO separation;
· directors serving on boards of other companies;
· composition of audit, nomination and compensation committees;
· annual election of the board of directors;
· disclosure of CG guidelines and code of conducts and ethics; and
· share ownership of executive directors.
Rating agencies evaluate firms with more independent (no affiliated) board members higher than
firms with less independent board members. Independent board members may be more critical
towards ethical and fraud issues, as well as restructuring activities than dependent members.
However, it is questionable whether more independent board members would improve firm
performance. More disclosure of CG guidelines, codes of conduct and ethics by a firm generally
means a higher ranking.

Category 2: Executive and Director Compensation

In this category, the following topics are rated:
· level and form of compensation;
· performance evaluation criteria;
· independence and integrity of compensation setting process;
· shareholder approval of compensation policy;
· pension plans;
· option repricing policy;
· directors and executives are subject to stock ownership guidelines;
· presence of company loans to employees.
Fixed and variable compensation policies and practices that reward management with little
regard to for shareholder interest indicate weak, ineffective board. When long-term
compensation is tied to shareholder returns then it is considered good governance. Recently,

22
many CEOs salaries exceeded the one million dollar barrier and their compensation plans
include bonus and variable pays in form of stocks and stock options. Such conditions are a recipe
for bad governance. This category is not examined thoroughly in any of the four rating systems.
In our view, a compensation plan should be related to the corporate performance and
performance of peer companies.

Category 3: Audit
The crucial issue in this category is the audit committee: who appoints it, its mandate, and its
authority? Are the members of the audit committee independent and do they discuss financial
issues on a regular basis with the external auditor?

Category 4: Shareholder Rights and Takeover Practice

In this category, the following issues are considered:
· one-share,
· one-vote system;
· a simple majority vote of shareholders is required to amend the charter or bylaws;
· shareholders may call special meetings;
· shareholders may act by written consent.
Takeover is the mechanism to control enterprises. The rating of this category is based on public
data, which rarely represent this activity. Also, it is difficult to rate enterprises based on an
assumption that never took place, i.e., takeover did not happen. One important point to rate here
is that corporate laws varies from one state to another and from one country to another, and it is
unfair to measure or rate corporate by the same yardstick.

Unit 6
Concept of organizational culture
Organizational Culture
Organizational culture can be viewed as an important concept in
organizational psychology and social psychology. It is important to

23
define organizational culture.

Organizational Culture Definition:

What is organizational culture? There are many possible definitions

of organizational culture. Below is one organizational culture definition:

Organizational culture reflects the values, beliefs, and norms that

characterize an organization as a whole.

This definition suggests that organizational culture reflects what is

common, typical, and general for the organization. Values, beliefs, and
behaviours that are uncommon in the organization, or specific to a
particular subgroup within an organization, would not be considered to
be part of the culture of the organization.

Elements of Organizational Culture:

There are many possible elements of organizational culture. The above

definition includes three of the elements of organizational culture.

Organizational Values. Values reflect what we feel is important.

Organizations may have core values that reflect what is important in the
organization. These values may be guiding principles of behavior for all
members in the organization. The core values may be stated on the
organization's website. For example, an organization could state that
their core values are creativity, humor, integrity, dedication, mutual
respect, kindness, and contribution to society.

Organizational Beliefs. Beliefs that are part of an organization's

culture may include beliefs about the best ways to achieve certain goals
such as increasing productivity and job motivation. For example, an
organization may convey the belief that the expression of humor in the
workplace is an effective way to increase productivity and job
motivation.

Organizational Norms. Norms reflect the typical and accepted

behaviors in an organization. They may reflect the values and beliefs
of the organization. They may reflect how certain tasks are generally
expected to be accomplished, the attributes of the work environment,
the typical ways that people communicate in the organization, and the
typical leadership styles in the organization. For example, the work
environment of a company may be described as relaxed, cheerful, and

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pleasant. Moreover, the organization may have a participative decision
making process in which many people in the organization are able to
express their views concerning important decisions. Also, an
organization may have many meetings to discuss ideas.

The Importance of the Organizational Culture Concept

Organizational culture may be an important concept for a few reasons.

First, understanding the culture of an organization may be helpful for
applicants. They may have a better idea about whether they would like
to work for a company. Second, understanding the culture of an
organization may help in training new employees. Third, understanding
organizational culture may help leaders to identify possible sources of
problems in the organization.

Organizational Culture and Leadership

There may be at least three ways in which leadership is important with

respect to organizational culture. First, a leader of an organization may
play an important role in identifying the elements of the organization's
culture. The leader could make a list of the organization's current
values, beliefs, and norms. Second, after identifying the current
elements of the organization's culture, the leader can make evaluations
of the elements of organizational culture that may be negative. The
leader could make a list of the specific values, beliefs, and norms that
may contribute to major problems in the organization (e.g., a lack of job
motivation). Third, after identifying the possible negative elements, the
leader could develop strategies to foster a positive organizational
culture change. The leader could make a list of the elements of a more
ideal culture, develop specific ways to communicate the changes, and
develop techniques to motivate people to adopt the new culture.

Organizational Culture Change

There may be many reasons why the culture of an organization needs

to be changed. These reasons may include lack of moral, lack of job
motivation, lack of job meaning, and changes in the business (e.g., the
development of a new product) that would require a change in the way
things are done in the organization.
For example, there may be too much micromanagement in a company.
It may be better if employees had more autonomy. This may increase
morale. Sherman (1989) found that unit morale was positively
correlated with autonomy. Because this finding is correlational, we

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cannot make causal conclusions.
This process of culture change should involve all members of the
organization. This process of culture change could involve surveys in
which members describe specific elements of the organizational culture
that members view as negative.

Culture vs Organizational Culture.

Although the concept of organizational culture is similar to the concept
of culture (e.g., the elements of culture may be similar to the elements
of organizational culture), it is important to make a distinction between
the two concepts. There may be a few ways in which these concepts
may be different. First, organizational culture may be more formal than
culture. Some organizations may have a significant part of their culture
in written form. For example, they may have the core values stated on
the website, and the values, beliefs, and norms of the organization may
be indicated in employee manuals. In contrast, much of the values,
beliefs, and norms that are a reflection of a culture may be unwritten.
Second, there may be less consistency between elements of
organizational culture than elements of culture. Some of the elements
of organizational culture that are in written form may be inconsistent
with certain norms observed in the organization. In contrast, many of
the norms of a culture may simply reflect the values of the culture.

A Framework for Examining Culture

Strategy and culture are among the primary levers at top leaders’ disposal in their never-ending
quest to maintain organizational viability and effectiveness. Strategy offers a formal logic for the
company’s goals and orients people around them. Culture expresses goals through values and
beliefs and guides activity through shared assumptions and group norms.
Strategy provides clarity and focus for collective action and decision making. It relies on plans
and sets of choices to mobilize people and can often be enforced by both concrete rewards for
achieving goals and consequences for failing to do so. Ideally, it also incorporates adaptive
elements that can scan and analyze the external environment and sense when changes are
required to maintain continuity and growth. Leadership goes hand-in-hand with strategy
formation, and most leaders understand the fundamentals. Culture, however, is a more elusive
lever, because much of it is anchored in unspoken behaviors, mindsets, and social patterns.
For better and worse, culture and leadership are inextricably linked. Founders and influential
leaders often set new cultures in motion and imprint values and assumptions that persist for
decades. Over time an organization’s leaders can also shape culture, through both conscious and
unconscious actions (sometimes with unintended consequences). The best leaders we have

26
observed are fully aware of the multiple cultures within which they are embedded, can sense
when change is required, and can deftly influence the process.
Unfortunately, in our experience it is far more common for leaders seeking to build high-
performing organizations to be confounded by culture. Indeed, many either let it go unmanaged
or relegate it to the HR function, where it becomes a secondary concern for the business. They
may lay out detailed, thoughtful plans for strategy and execution, but because they don’t
understand culture’s power and dynamics, their plans go off the rails. As someone once said,
culture eats strategy for breakfast.
It doesn’t have to be that way. Our work suggests that culture can, in fact, be managed. The first
and most important step leaders can take to maximize its value and minimize its risks is to
become fully aware of how it works. By integrating findings from more than 100 of the most
commonly used social and behavioral models, we have identified eight styles that distinguish a
culture and can be measured. (We gratefully acknowledge the rich history of cultural studies—
going all the way back to the earliest explorations of human nature—on which our work builds.)
Using this framework, leaders can model the impact of culture on their business and assess its
alignment with strategy. We also suggest how culture can help them achieve change and build
organizations that thrive in even the most trying times.

Defining Culture
Culture is the tacit social order of an organization: It shapes attitudes and behaviors in wide-
ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted, or
rejected within a group. When properly aligned with personal values, drives, and needs, culture
can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s
capacity to thrive.
Culture can also evolve flexibly and autonomously in response to changing opportunities and
demands. Whereas strategy is typically determined by the C-suite, culture can fluidly blend the
intentions of top leaders with the knowledge and experiences of frontline employees.
As someone once said, culture eats strategy for breakfast.
The academic literature on the subject is vast. Our review of it revealed many formal definitions
of organizational culture and a variety of models and methods for assessing it. Numerous
processes exist for creating and changing it. Agreement on specifics is sparse across these
definitions, models, and methods, but through a synthesis of seminal work by Edgar Schein,
Shalom Schwartz, Geert Hofstede, and other leading scholars, we have identified four generally
accepted attributes:

Shared.
Culture is a group phenomenon. It cannot exist solely within a single person, nor is it simply the
average of individual characteristics. It resides in shared behaviors, values, and assumptions and

27
is most commonly experienced through the norms and expectations of a group—that is, the
unwritten rules.

Pervasive.
Culture permeates multiple levels and applies very broadly in an organization; sometimes it is
even conflated with the organization itself. It is manifest in collective behaviors, physical
environments, group rituals, visible symbols, stories, and legends. Other aspects of culture are
unseen, such as mindsets, motivations, unspoken assumptions, and what David Rooke and
William Torbert refer to as “action logics” (mental models of how to interpret and respond to the
world around you).

Enduring.
Culture can direct the thoughts and actions of group members over the long term. It develops
through critical events in the collective life and learning of a group. Its endurance is explained in
part by the attraction-selection-attrition model first introduced by Benjamin Schneider: People
are drawn to organizations with characteristics similar to their own; organizations are more likely
to select individuals who seem to “fit in”; and over time those who don’t fit in tend to leave.
Thus culture becomes a self-reinforcing social pattern that grows increasingly resistant to change
and outside influences.

Implicit.
An important and often overlooked aspect of culture is that despite its subliminal nature, people
are effectively hardwired to recognize and respond to it instinctively. It acts as a kind of silent
language. Shalom Schwartz and E.O. Wilson have shown through their research how
evolutionary processes shaped human capacity; because the ability to sense and respond to
culture is universal, certain themes should be expected to recur across the many models,
definitions, and studies in the field. That is exactly what we have discovered in our research over
the past few decades.

Eight Distinct Culture Styles

Our review of the literature for commonalities and central concepts revealed two primary
dimensions that apply regardless of organization type, size, industry, or geography: people
interactions and response to change. Understanding a company’s culture requires determining
where it falls along these two dimensions.

People interactions.
An organization’s orientation toward people interactions and coordination will fall on a spectrum
from highly independent to highly interdependent. Cultures that lean toward the former place
greater value on autonomy, individual action, and competition. Those that lean toward the latter

28
emphasize integration, managing relationships, and coordinating group effort. People in such
cultures tend to collaborate and to see success through the lens of the group.

Response to change
Whereas some cultures emphasize stability—prioritizing consistency, predictability, and
maintenance of the status quo—others emphasize flexibility, adaptability, and receptiveness to
change. Those that favor stability tend to follow rules, use control structures such as seniority-
based staffing, reinforce hierarchy, and strive for efficiency. Those that favor flexibility tend to
prioritize innovation, openness, diversity, and a longer-term orientation. (Kim Cameron, Robert
Quinn, and Robert Ernest are among the researchers who employ similar dimensions in their
culture frameworks.)

By applying this fundamental insight about the dimensions of people interactions and response to
change, we have identified eight styles that apply to both organizational cultures and individual
leaders. Researchers at Spencer Stuart (including two of this article’s authors) have
interdependently studied and refined this list of styles across both levels over the past two
decades.
Caring focuses on relationships and mutual trust. Work environments are warm, collaborative,
and welcoming places where people help and support one another. Employees are united by
loyalty; leaders emphasize sincerity, teamwork, and positive relationships.
Purpose is exemplified by idealism and altruism. Work environments are tolerant,
compassionate places where people try to do good for the long-term future of the world.
Employees are united by a focus on sustainability and global communities; leaders emphasize
shared ideals and contributing to a greater cause.
Learning is characterized by exploration, expansiveness, and creativity. Work environments are
inventive and open-minded places where people spark new ideas and explore alternatives.
Employees are united by curiosity; leaders emphasize innovation, knowledge, and adventure.
Enjoyment is expressed through fun and excitement. Work environments are lighthearted places
where people tend to do what makes them happy. Employees are united by playfulness and
stimulation; leaders emphasize spontaneity and a sense of humor.
Results is characterized by achievement and winning. Work environments are outcome-oriented
and merit-based places where people aspire to achieve top performance. Employees are united by
a drive for capability and success; leaders emphasize goal accomplishment.
Authority is defined by strength, decisiveness, and boldness. Work environments are competitive
places where people strive to gain personal advantage. Employees are united by strong control;
leaders emphasize confidence and dominance.
Safety is defined by planning, caution, and preparedness. Work environments are predictable
places where people are risk-conscious and think things through carefully. Employees are united

29
by a desire to feel protected and anticipate change; leaders emphasize being realistic and
planning ahead.
Order is focused on respect, structure, and shared norms. Work environments are methodical
places where people tend to play by the rules and want to fit in. Employees are united by
cooperation; leaders emphasize shared procedures and time-honored customs.
These eight styles fit into our integrated culture framework according to the degree to which they
reflect independence or interdependence (people interactions) and flexibility or stability
(response to change). Styles that are adjacent in the framework, such
as safety and order, frequently coexist within organizations and their people. In contrast, styles
that are located across from each other, such as safety and learning, are less likely to be found
together and require more organizational energy to maintain simultaneously. Each style has
advantages and disadvantages, and no style is inherently better than another. An organizational
culture can be defined by the absolute and relative strengths of each of the eight and by the
degree of employee agreement about which styles characterize the organization. A powerful
feature of this framework, which differentiates it from other models, is that it can also be used to
define individuals’ styles and the values of leaders and employees.

Integrated Culture: The Framework

On the basis of decades of experience analyzing organizations, executives, and employees, we
developed a rigorous, comprehensive model to identify the key attributes of both group culture
and individual leadership styles. Eight characteristics emerge when we map cultures along two
dimensions: how people interact (independence to interdependence) and their response to change
(flexibility to stability). The relative salience of these eight styles differs across organizations,
though nearly all are strongly characterized by results and caring.
The spatial relationships are important. Proximate styles, such
as safety and order,or learning and enjoyment, will coexist more easily than styles that are far
apart on the chart, such as authority and purpose, or safety and learning. Achieving a culture
of authority often means gaining the advantages (and living with the disadvantages) of that
culture but missing out on the advantages (and avoiding the disadvantages) of a culture
of purpose.

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Inherent in the framework are fundamental trade-offs. Although each style can be beneficial,
natural constraints and competing demands force difficult choices about which values to
emphasize and how people are expected to behave. It is common to find organizations with
cultures that emphasize both results and caring, but this combination can be confusing to
employees. Are they expected to optimize individual goals and strive for outcomes at all costs, or
should they work as a team and emphasize collaboration and shared success? The nature of the
work itself, the business strategy, or the design of the organization may make it difficult for
employees to be equally results focused and caring.
In contrast, a culture that emphasizes caring and order encourages a work environment in which
teamwork, trust, and respect are paramount. The two styles are mutually reinforcing, which can
be beneficial but can also present challenges. The benefits are strong loyalty, retention of talent,
lack of conflict, and high levels of engagement. The challenges are a tendency toward
groupthink, reliance on consensus-based decisions, avoidance of difficult issues, and a calcified
sense of “us versus them.” Leaders who are more focused on results and learning may find the
combination of caring and order stifling when they seek to drive entrepreneurship and change.
Savvy leaders make use of existing cultural strengths and have a nuanced understanding of how
to initiate change. They might rely on the participative nature of a culture focused
on caring and order to engage team members and simultaneously identify a learning-oriented
“insider” who has the trust of his or her peers to advocate for change through relationship
networks.

Integrated Culture: Leader Statements

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Top leaders and founders often express cultural sentiments within the public domain, either
intentionally or unintentionally. Such statements can provide important clues to how these
leaders are thinking about and leading their organizations’ cultures.

The eight styles can be used to diagnose and describe highly complex and diverse behavioral
patterns in a culture and to model how likely an individual leader is to align with and shape that
culture. Using this framework and multilevel approach, managers can:
● Understand their organization’s culture and assess its intended and unintended effects
● Evaluate the level of consistency in employees’ views of the culture
● Identify subcultures that may account for higher or lower group performance
● Pinpoint differences between legacy cultures during mergers and acquisitions
● Rapidly orient new executives to the culture they are joining and help them determine the
most effective way to lead employees
● Measure the degree of alignment between individual leadership styles and organizational
culture to determine what impact a leader might have
● Design an aspiration culture and communicate the changes necessary to achieve it

The Link Between Culture and Outcomes

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Our research and practical experience have shown that when you are evaluating how culture
affects outcomes, the context in which the organization operates—geographic region, industry,
strategy, leadership, and company structure—matters, as does the strength of the culture.
(See “Context, Conditions, and Culture.”) What worked in the past may no longer work in the
future, and what worked for one company may not work for another.
We have arrived at the following insights:
When aligned with strategy and leadership, a strong culture drives positive organizational
outcomes.
Consider the case of a best-in-class retailer headquartered in the United States. The company had
viewed its first priority as providing top-notch customer service. It accomplished this with a
simple rule—Do right by the customer—that encouraged employees to use their judgment when
providing service. A core HR training practice was to help every salesperson see customer
interactions as an opportunity to create “service stories that become legendary.” Employees were
reminded to define service from the customer’s perspective, to constantly engage customers with
questions geared toward understanding their specific needs and preferences, and to go beyond
their expectations.
In measuring the culture of this company, we found that like many other large retailers, it was
characterized primarily by a combination of results and caring. Unlike many other retailers,
however, it had a culture that was also very flexible, learningoriented, and focused
on purpose. As one top executive explained, “We have freedom as long as we take good care of
the customer.”
Furthermore, the company’s values and norms were very clear to everyone and consistently
shared throughout the organization. As the retailer expanded into new segments and geographies
over the years, the leadership strove to maintain an intense customer focus without diluting its
cherished culture. Although the company had historically focused on developing leaders from
within—who were natural culture carriers—recruiting outsiders became necessary as it grew.
The company preserved its culture through this change by carefully assessing new leaders and
designing an on boarding process that reinforced core values and norms.
Culture is a powerful differentiator for this company because it is strongly aligned with strategy
and leadership. Delivering outstanding customer service requires a culture and a mindset that
emphasize achievement, impeccable service, and problem solving through autonomy and
inventiveness. Not surprisingly, those qualities have led to a variety of positive outcomes for the
company, including robust growth and international expansion, numerous customer service
awards, and frequent appearances on lists of the best companies to work for.
Selecting or developing leaders for the future requires a forward-looking strategy and culture.
The chief executive of an agriculture business was planning to retire, spurring rumors about a
hostile takeover. The CEO was actively grooming a successor, an insider who had been with the
company for more than 20 years. Our analysis revealed an organizational culture that strongly
emphasized caring and purpose. As one leader reflected, “You feel like part of a large family
when you become an employee at this company.”

33
The potential successor understood the culture but was far more risk-averse (safety) and
respectful of traditions (order) than the rest of the company. Given the takeover rumors, top
leaders and managers told the CEO that they believed the company needed to take a more
aggressive and action-oriented stance in the future. The board decided to consider the internal
candidate alongside people from outside the company.
Cultural dynamics are a frequently overlooked factor in post merger performance.
Three external candidates emerged: one who was aligned with the current culture (purpose), one
who would be a risk taker and innovative (learning), and one who was hard-driving and
competitive (authority). After considerable deliberation, the board chose the highly competitive
leader with the authority style. Soon afterward an activist investor attempted a hostile takeover,
and the new CEO was able to navigate through the precarious situation, keep the company
independent, and simultaneously begin to restructure in preparation for growth.
In a merger, designing a new culture on the basis of complementary strengths can speed up
integration and create more value over time.
Mergers and acquisitions can either create or destroy value. Numerous studies have shown that
cultural dynamics represent one of the greatest yet most frequently overlooked determinants of
integration success and postmerger performance.
For example, senior leaders from two merging international food retailers had invested heavily in
their organizations’ cultures and wanted to preserve their unique strengths and distinct heritages.
An assessment of the cultures revealed shared values and areas of compatibility that could
provide a foundation for the combined culture, along with important differences for which
leaders would have to plan: Both companies emphasized results, caring, and order and valued
high-quality food, good service, treating employees fairly, and maintaining a local mindset. But
one operated in a more top-down manner and scored much higher on authority, especially in the
behavior of leaders.
Because both companies valued teamwork and investments in the local community, the leaders
prioritized caring and purpose. At the same time, their strategy required that they shift from top-
down authority to a learning style that would encourage innovation in new-store formats and
online retailing. As one senior leader said of the strategic aspiration, “We need to dare to do
things differently, not play by the old rule books.”
Once they had agreed on a culture, a rigorous assessment process identified leaders at both
organizations whose personal style and values would allow them to serve as bridges to and
champions for it. Then a program was launched to promote cultural alignment within 30 top
teams, with an emphasis on clarifying priorities, making authentic connections, and developing
team norms that would bring the new culture to life.
Finally, structural elements of the new organization were redesigned with culture in mind. A
model for leadership was developed that encompassed recruitment, talent assessment, training
and development, performance management, reward systems, and promotions. Such design
considerations are often overlooked during organizational change, but if systems and structures
don’t align with cultural and leadership imperatives, progress can be derailed.

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In a dynamic, uncertain environment, in which organizations must be more agile, learning gains
importance.
It’s not surprising that results is the most common culture style among all the companies we
have studied. Yet during a decade of helping leaders design aspiration cultures, we have seen a
clear trend toward prioritizing learning to promote innovation and agility as businesses respond
to increasingly less predictable and more complex environments. And although learning ranks
fourth within our broader database, small companies (200 employees or fewer) and those in
newer industries (such as software, technology, and wireless equipment) accord it higher values.
Consider one Silicon Valley–based technology company we worked with. Though it had built a
strong business and invested in unique technology and top engineering talent, its revenue growth
was starting to decline as newer, nimbler competitors made strides in a field exploding with
innovation and business model disruption. Company leaders viewed the culture as a
differentiator for the business and decided to diagnose, strengthen, and evolve it. We found a
culture that was intensely resultsfocused, team based (caring), and exploratory (a combination
of enjoyment and learning).
After examining the overall business strategy and gaining input from employees, leaders aimed
for a culture that was even more focused on learning and adopted our framework as a new
language for the organization in its daily work. They initiated conversations between managers
and employees about how to emphasize innovation and exploration. Although it takes time to
change a culture, we found that the company had made notable progress just one year later. And
even as it prepared for an impending sale amid ever greater competition and consolidation,
employee engagement scores were on the rise.
A strong culture can be a significant liability when it is misaligned with strategy.
We studied a Europe-based industrial services organization whose industry began to experience
rapid and unprecedented changes in customer expectations, regulatory demands, and competitive
dynamics. The company’s strategy, which had historically emphasized cost leadership, needed to
shift toward greater service differentiation in response. But its strong culture presented a
roadblock to success.
We diagnosed the culture as highly results oriented, caring, and order seeking, with a top-down
emphasis on authority. The company’s leaders decided to shape it to be much more purpose-
driven, enabling, open, and team based, which would entail an increase in caring along
with learning and purpose and a decrease in authority and results.
This shift was particularly challenging because the current culture had served the organization
well for many years, while the industry emphasized efficiency and results. Most managers still
viewed it as a strength and fought to preserve it, threatening success for the new strategic
direction.
Cultural change is daunting for any organization, but as this company realized, it’s not
impossible. The CEO introduced new leadership development and team coaching programs and
training opportunities that would help leaders feel more comfortable with cultural evolution.
When people departed, the company carefully selected new leaders who would provide
supporting values, such as caring,and increased the emphasis on a shared purpose. The benefits

35
of this strategic and cultural shift took the form of an increasingly diverse array of integrated
service offerings and strong growth, particularly in emerging markets.

Cross Cultural Management

Concept

Cross-cultural management is the study of management in a cross-cultural context. It includes

the study of the influence of societal culture on managers and management practice as well as the
study of the cultural orientations of individual managers and organization members. At the
individual level the values, cognitive structures, and reactions of individuals to their cultural
context and experience figure prominently. Contributing disciplines include cross-cultural
psychology, sociology, and anthropology as well as the broader disciplines of management and
organizational behavior and the related area of international human resource management.
General topic areas include the cultural context in which management must take place, the
various roles of the international manager, and the influence of culture on organizational
structure and processes, and management across nations and cultures.

Cross cultural management involves managing work teams in ways that considers the differences
in cultures, practices and preferences of consumers in a global or international business context.
Many businesses have to learn to modify or adapt their approaches in order to compete on a level
in fields no longer bound by physical geography with online interactions more common in
business and other situations. While international business dealings go back hundreds of years,
intercultural interactions have increased in importance with more people having access to wider
markets with new technology. Not only does wireless technology shrink the world and help with
faster interactions across the seas, but travel has also become faster and easier, so many people
must know how to interact in different cultural contexts.

Many professions other than business also need to include cross cultural management as part of
their training or curricula. For instance, academics who plan to work in different cultural
situations whether at home or abroad must have effective communication skills to prevent
misunderstandings and remain respectful to those with whom they hope to work.

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Communication holds value in any profession, so learning to communicate across various
cultural contexts and situations has become essential in any field.

Functions of Cross cultural Management

➢ Recruiting candidates that can be effective in cross-cultural environments

➢ Handling differing regulatory environments for business
➢ Training employees to handle intercultural communication issues
➢ Facilitating cross-cultural teams
➢ Aligning HR policies and procedures across corporate entities in different nations

Importance of Cross cultural Management

➢ Understanding workplace relationships
➢ Being able to communicate with diverse backgrounds customers
➢ Understand different channels of communication
➢ How to tackle and treat colleagues and customers from different diverse backgrounds
➢ Know the cause and deal with cross cultural misunderstandings

Unit 7
Prashant Regmi 7.1 Transformational leadership and transactional leadership

Emerging Leadership Issues

Leadership is the skill or art of influencing and inspiring the behavior of others in accordance
with requirement. Manager involve in corporate organizations face many contemporary issues
while devoting their service. Some of the common issues in leadership are follows:

1. Emotional Intelligence and Leadership:

The act of knowing, understanding, and responding to emotions, overcoming stress in the
moment, and being aware of how one's words and actions affect others, is described as
emotional intelligence. It is the ability to understand and manage an individual's own
emotions and those of the people around him. Individuals with a high degree of
emotional intelligence know their feeling, meaning of emotions, and effect of emotions

37
 on other people. A leader having emotional intelligence will be successful. An emotional
intelligent manager can control and calmly assesses the situation even he is under stress.
The main attributes of emotional intelligence involve self-awareness, self-management,
self-motivation, empathy, and social skills.

2. Moral Leadership:
Moral leaders aim to serve for the organization and employees. They tend to develop the
working capability of subordinates instead of their own skills. They are always
characterized by a deep sense of ethics, driven by core ideals such as justice and equity
and are motivated by organizational objectives. They know how to manage morality.
They are visionary and affect personal change. They have a highly developed sense of
emotional intelligence and master key social skills. They work to overcome obstacles and
are skilled at the art of consultation. They build consensus, navigate diversity and
establish unity. They support employees for better working environment, proper division
of work, fair incentives and career development.
3. Team Leadership:
Team leadership is considered with the challenges of being an effective team leader. A
team leader is someone who provides direction, instructions and guidance to a group of
individuals for the purpose of achieving a certain goal. An effective leader will know his
team member strengths, weaknesses and motivations. Team leaders serve various roles in
an organization. Their job is to get tasks done by using all of the resources including team
members. The major role of team leader is to develop team work strategy, manage
training programs, communicate clear instruction, manage day to day operation, and get
feedback of team performance. The concept of team leadership is getting popular.

4. Cross-culture Leadership:
This issue focuses that culture is an important situational factors determining leadership
style. Leaders are constrained by the expectation of cultural condition of their followers.
They cannot choose their own style without considering cultural value of others. Most
leadership theories are developed in USA and western European countries. It is the
reason that they have cultural biases. They need to be adjusted to suit national culture. A
successful leader is one who can honor and respect culture value of all the subordinates.
The concept of cross-culture leadership is gaining popularity due to the development of
social, economic and cultural globalization.

5. Mutual Influence:
This issue considers that mutual influence on behavior of the leader and followers show
the leadership effectiveness. Leader and followers interact with one another. They share
opinions, views, information, experience, and knowledge to each other while solving
complex problems. This philosophy of leadership emphasizes that creativity is not only

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 part of leader. Subordinates also have creativity in their own area of functions. They can
share important knowledge and information which will be supportive for rational
decision. Therefore, in mutual influence approach of leadership, leaders influence
followers and followers also influence leaders. It implies mutual influence.

Hence, the above points explain the various contemporary issues in leadership. A
manager has to be proactive with the above issues so as to influence and inspire the
behavior of others in order to achieve common objectives.

Unit 8: CONFLICT

Conflict refers to some form of friction, or discord arising within a group when the beliefs or
actions of one or more members of the group are either resisted by or unacceptable to one or
more members of another group. Conflict can arise between members of the same group, known
as intragroup conflict, or it can occur between members of two or more groups, and involve
violence, interpersonal discord conflict. Conflict in groups often follows a specific course.
Routine group interaction is first disrupted by an initial conflict, often caused by differences of
opinion, disagreements between members, or scarcity of resources Conflict is a difference of
ideas or opinions. In a team consisting of people from different backgrounds and with different
skills and experience, it is likely that you will experience some form of conflict.

Conflict Resolution Techniques

Some of the conflict resolution techniques are as follows

1. Withdraw/Avoid
2. Smooth/Accommodate
3. Compromise/Reconcile
4. Force/Direct
5. Collaborate/Problem Solve

Now let’s discuss each of them in detail.

1. Withdraw/Avoid

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In this conflict resolution technique, you avoid the conflict or simply retreat. You let this issue
resolve itself.

You can use this technique in the following cases:

● When stakes are low.

● The stakeholders involved in the conflict are not important.
● The issue is not worth investing your time.
● The issue will disappear on its own after some time.
● When there is a heated argument among parties and you want to give them some cooling
time.
● When there is limited or no information available about the conflict.

Advantages:

This technique saves precious time you can invest in other productive activities.

Disadvantages:

It may weaken your position as a project manager and negatively affect your relationships.

There is a dispute with this conflict resolution technique: Some experts say this is not a conflict
resolution technique because when the conflict arises you simply avoid it, no action is taken from
your side. Escaping is not a solution.

2. Smooth/Accommodate

Here, you will find areas of agreement, and try to smooth the situation. This technique helps you
avoid a tough discussion.

In smoothing, you give more concerns to other parties rather than yours. Here you try to
downplay the situation and behave like the problem never existed.

This technique can be used in the following cases:

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 ● When you are very busy and have no time.
● You need a temporary solution to the problem.

Advantages:

This technique can conciliate the situation, bring harmony, create goodwill, and give you
sufficient time to find a permanent solution.

Disadvantages:

Since you’re giving more concerns to other parties, they may try to take advantage of it.

The other disadvantage is that it may weaken your position as an authoritative leader. Therefore,
you should avoid using this technique to solve issues.

3. Compromise/Reconcile

Here you take suggestions from both sides and try to make a compromise. Both parties involved
in the conflict gain something, so this solution partially satisfies both parties.

You may use this technique in the following cases:

● All parties involved in the conflict need to win.

● You have an equal relationship with them.
● When collaborative and forcing techniques do not work.
● When you need a temporary solution to move forward quickly.

Advantages:

This technique brings a faster result, lowers the stress, and keeps all parties cool. In the
meantime, you can search for a permanent solution.

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Disadvantages:

This technique does not bring trust in the long run, and the conflict could resurface at any time.

4. Force/Direct

Here you agree with one party’s viewpoint and enforce their wishes. This is a win-lose situation
and risks demoralizing team members.

You can use this technique in the following cases:

● You need a quick solution.

● When stakes are high and you need an immediate solution.
● When you know one party is right and don’t have time to investigate.
● The stakeholders involved in the conflict and not very important.
● The relationship with them is not important.

Advantages:

Provides a quick solution to the problem.

Disadvantages:

You may lose the opportunity gained from the opposing party’s viewpoint. Also, it may
negatively affect your impression on your team members.

5. Collaborate/Problem Solve

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In this technique, you will discuss the issue with all parties to find a solution considering
multiple viewpoints and agreed upon by all.

You may use this technique in the following cases:

● When you want to incorporate multiple views.

● The people involved in the conflict are very influential.
● When a consensus is required.
● When you want to distribute the responsibility equally to all parties.

Advantages:

Brings consensus, commitment, and shared responsibility for the outcome. This technique is
considered a win-win approach.

Disadvantage:

Takes time and effort, so it cannot be used when you’re short on time and need a quick solution.

Techniques to Effective Negotiation

Negotiation is a technique by which people settle differences. It is the process by which
compromise or agreement is reached while avoiding argument, dispute and conflicts in
management. Here we are talking about management and its conflict handling so that generally it
consists of two parties, employee and the manager (negotiator).
In any disagreement, individuals understandably aim to achieve the best possible outcome for
their position. However, the principles of fairness, seeking mutual benefits and maintaining a
relationship are the keys to the successful outcomes. Negotiation is equally required for both
startup and running organization. Employ may not be ready all the time for the adaptation of
change which results conflict then at that time manager must play hero to figure it out through
negotiation.
Starting a business requires quite literally, hundreds of negotiations in subject matter such as
how to run, what are the costs and human resources, whom to hand the job, what should we
acquire ,etc. For most of that it comes through effort and experience of a skillful negotiator. One
must have preparation, discussion, goal clarification, negotiate towards a win-win outcome,

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agreement and implementation of a course of action. Here are ten tactics that can make a
manager better, more confident negotiator on behalf of business houses.
Negotiation Techniques:
1. Prepare
To make an effective negotiation the manager firstly requires to start himself, make sure you
are clear on what you want out of agreement. Research the other side to better understand
their need as well as their strength and weaknesses. Enlist help from experts such as
accountant, psychologist, motivator, etc.
2. Pay attention to timing
Timing is important in any negotiation. A good manager must have good capacity to watch
over mistakes and goods and also have to be sure he won’t make any mistakes as a result of
quick response. One must know what to ask for, but also be sensitive to when you ask for it.
Everything should be done within its best possible time. Be careful not to take too long as
well to negotiate, otherwise other may get suffer till that time.
3. Leave behind your ego
An ego can make situation worse than ever before. Manager should treat his employs as
helpers and friends. Ego itself creates conflict in business houses therefore, ego is
condemned to come in between work. Negotiations will success only if both parties
compromise and agree in one and don’t expect for credit to something good.
4. Ramp up your listening skill
A good listening can make every negotiation effective. Negotiation comes to effect when
negotiators are quiet listeners who patiently let others to have the floor while they make their
case. When there is no interrupt both parties can clarify each other’s point and come on
decision. or good for employ and business to do so
5. If you don’t ask, you don’t get
Another tenet of negotiation is, “Go high, or go home.” It’s a situation to take or leave it.
Generally we understand silence as agreement. Speaking up is the best way to make
negotiation effective. If manager don’t ask for what he want then the conflict never ends.
Similarly another party must ask too to have what he want and get solution to his
disagreement. Manager must be clear about what he want him to be done by others and what
factor can drive them to negotiate either psychological or economical term.
6. Anticipate compromise
Sometimes compromise becomes the last option to both. For effective negotiation manager
must stick to his preparation and should expect to make concession and plan that they might
be. One should never take the first offer quickly, even if better and best idea, because both
have to be ware about future consequences. Since negotiation is better to stick for long term.
7. Offer and expect comment
When manager make an offer and expect comment, that type of negotiation becomes
effective. During negotiation they are allowed to try own best to explain about dispute. When

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 solution is on the top of needle, manager is suggested to make offer and settle down. This
type of negotiation is generally effective in salary and promotional dispute shot outs.

8. Don’t absorb their problem

When dispute comes under personal reasons of staffs, they want manager to absorb them. At
that time if the manager tries to understand problem without getting in to his shoe and
suggest them an idea to deal with, dispute is resolved. For instant, if there is financial
problem, suggest him a place or way to mount money from.
9. Stick to your principles
If both the parties stick to their principles, negotiation may take time but it becomes
effective. None of them will get hurt instead both would get satisfaction till the long run.
They are well known to each other’s position and responsibilities, holding principles to their
back will support negotiation to be more effective and logical.
10. Close with confirmation
When negotiation is done, it is not left just as it is. Negotiation is done between two parties
but there may be number of persons. So, at the very last moment, confirmation is required,
whether all of them agree to the outcome of meeting or not. If yes then only negotiation
values but if not, it may cause problems in the future.

Raj kumar Goley 8.3 Effective change management process

Unit 9

Rama Thapa Magar 9.1 Philosophy of quality management

Joseph Juran in quality management

Joseph Juran(1904-2008) was a pioneer in the study of quality control. Juran made very
significant contributions to the importance of quality control in all aspects. Juran, like Deming,
was invited to Japan in 1954 by the Union of Japanese Scientists and Engineers (JUSE). His
lectures introduced the management dimensions of planning, organizing, and controlling and
focused on the responsibility of management to achieve quality and the need for setting goals.

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According to Juran, quality means that a product meets customer needs leading to customer
satisfaction, and quality also means all of the activities in which a business engages in, to ensure
that the product meets customer needs. Total quality management is defined as a continuous
effort by the management as well as employees of a particular organization to ensure long term
customer loyalty and customer satisfaction
Juran takes a holistic approach to quality and his concept of quality revolves around what is
called a quality trilogy, which is composed of quality planning, quality control and quality
improvement.
Quality planning
● Identify who are the customer
● Determine the needs of those customers.
● Translate those needs into our language
● Develop a product that can respond to those needs.
● Optimize the product features so as to meet our needs and customer needs
Quality improvement
● Develop a process which is able to produce the product
● Optimize the process
Quality control
● Prove that the process can produce the product under operating condition with minimal
inspection
● Transfer the process to operation.
Juran defines quality as fitness for use in terms of design, conformance, availability, safety, and
field use. Thus, his concept more closely incorporates the viewpoint of customer. He is prepared
to measure everything and relies on systems and problem-solving techniques. Unlike Deming, he
focuses on top-down management and technical methods rather than worker pride and
satisfaction.
Juran’s 10 steps to quality improvement are:
1. Build awareness of opportunity to improve.
2. Set-goals for improvement.
3. Organize to reach goals.
4. Provide training
5. Carryout projects to solve problems.
6. Report progress
7. Give recognition
8. Communicate results
9. Keep score
10. Maintain momentum by making annual improvement part of the regular systems and
processes of the company.

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What is Total Quality Management
When you buy something new, you have certain expectations. You expect that product to be in
excellent condition. You also expect to be able to use the product for a specific period of time.
When customer's needs are met, they are more likely to use or buy a product repeatedly.
No one wants to spend their money on a bad product. Many companies are finding ways to
improve customer satisfaction. Companies that use a total quality management (TQM)
approach do their best to meet customer expectations by continuously improving all aspects of
their operation and, therefore, increasing customer satisfaction.

Total Quality Management

The issue of improving the quality of or creating quality products is not a new concept. In the
1920's, Dr. W. Shewhart applied statistical theory to quality control in order to decrease the
percentage of faulty products made.
The next big milestone occurred in the 1940's. Thanks to the advice of consultants like W.
Edward Deming and Joseph M. Juran, Japanese companies were able to improve their products
and improve their processes as well. The Japanese became so proficient at quality management
that their success was a catalyst for Western companies to adopt the philosophy and practices.
The 1980's is the point at which TQM becomes popular, especially for United States (U.S.)
companies. There was a wave of U.S. companies adopting TQM philosophies so that they were
able to compete with Japanese products internationally as well as nationally. Prior to U.S.
companies adopting TQM philosophies, Japanese products were so superior to U.S. products that
quality control became a national issue in the U.S.
Philip Crosby is another major contributor to the quality movement. In 1979, he left ITT
(International Telephone and Telegraph) and wrote his book, Quality is Free, in which he argues
that dollars spent on quality and the attention paid to it always return greater benefits than the
costs expended on them. Whereas Deming and Juran emphasized the sacrifice required for a
quality commitment, Crosby takes a less philosophical and more practical approach, asserting
instead that high quality is relatively easy and inexpensive in the long run.

Crosby is the only American quality expert without a doctorate. He is responsible for the zero
defects program, which emphasizes “doing it right the first time,” (DIRFT) with 100 percent
acceptable output. Unlike Deming and Juran, Crosby argues that quality is always cost effective.
Like Deming and Juran, Crosby does not place the blame on workers, but on management.

Crosby also developed a 14‐point program, which is again more practical than philosophical. It
provides managers with actual concepts that can help them manage productivity and quality. His
program is built around four Absolutes of Quality Management:

1. Quality must be viewed as conformance to specifications. If a product meets design

specifications, then it is a high‐quality product.

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 2. Quality should be achieved through the prevention of defects rather than inspection after
the production process is complete.
3. According to Crosby, the traditional quality control approach taken by American firms is
not cost effective. Instead, production workers should be granted the authority and
responsibility to ensure that quality goods or services are produced at every step of the
process.
4. Managers need to demonstrate that a higher standard of performance can lead to
perfection—to zero defects. Crosby believed that the company goal should be zero
defects.
5. Quality should be measured by the price of nonconformity. Crosby contends that the
costs associated with achieving quality should be part of a company's financial system.

The Fourteen Steps to Quality Improvement

1. Management Commitment

Make it clear that management is committed to quality.

2. Quality Improvement Teams

Form Quality Improvement Teams with senior representatives from each department.

3. Measure Processes

Measure processes to determine where current and potential quality problems lie.

4. Cost of Quality

Evaluate the cost of quality and explain its use as a management tool.

5. Quality Awareness

Raise the quality awareness and personal concern of all employees.

6. Correct Problems

Take actions to correct problems identified through previous steps.

7. Monitor Progress

Establish progress monitoring for the improvement process.

8. Train Supervisors

Train supervisors to actively carry out their part of the quality improvement program.

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9. Zero Defects Day

Hold a Zero Defects Day to reaffirm management commitment.

10. Establish Improvement Goals

Encourage individuals to establish improvement goals for themselves and their group.

11. Remove Fear

Encourage employees to tell management about obstacles to improving quality.

12. Recognize

Recognize and appreciate those who participate.

13. Quality Councils

Establish Quality Councils to communicate on a regular basis.

14. Repeat the Cycle

Do it all over again to emphasize that the quality improvement process never ends.

Quality is “conformance to requirements”

(Philip B. Crosby

Edward Deming in Quality Management

Total Quality Management (TQM) is an approach in serving customers and it involves totally re-
engineering process and system to products and services in the way the customers expect while
considering the needs of employees and relationships with suppliers.

The TQM approach began as the means of repairing damage Japan

faced during Second World War and beyond. Dr. Willam Edward Deming developed these
approaches of quality management. He has a huge contribution on developing the concept of quality
management. He was born on 14th Oct, 1900 at Siour city of Lowa. He completed his engineering
degree at Wyoming in 1921. After that, he went to Colorado for his master degree and completed it
in 1925. He completed his PhD in Mathematical Physics from Yale. He died on 20 Dec, 1993.
Deming works with Japanese automobiles manufacture to improve the quality of their product in an
effort to gain a competitive organized industry. He derived the first philosophy and method that
allowed individuals and organization to plan and continuously improve themselves, their

49
relationships, processes, product and services. His philosophy result discovered the 14 points of
TQM. They are,

1. Create constancy of purpose toward improvement of product and services, with the aim of
becoming competitive, staying in business and providing jobs.
2. Adopt the new philosophy, Western management must awaken to challenge, must learn their
responsibilities and take on leadership for change.
3. Cease dependence on mass inspection. Build quality into the product from the start.
4. End the business of awarding business on the basis of price tag alone. Instead, minimize total
cost. Move towards a single supplier for any item, based on a long-term relationship of
loyalty and trust.
5. Improve constantly and forever the system of production and services to improve quality and
reduce waste.
6. Institute training and retraining.
7. Institute leadership. The aim of supervision should be to lead and help people to do better
job.
8. Drive out fear so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales and production
must work as a team, to foresee and solve problems of production.
10. Eliminate slogans, exhortations and targets for the workforce as they do not necessarily
achieve their aims.
11. Eliminate numerical quotas in order to take account of quality and methods, rather than just
numbers.
12. Remove barriers to pride of workmanship.
13. Institute a vigorous program of education and re-training for both the management and the
workforce.
14. Take action to accomplish the transformation. Management and workforce must work
together.
Deming’s seven deadly diseases of management
1. Lack of constancy of purpose to plan products and services that will have a market and keep
the company afloat.
2. An emphasis on short term profits and short term thinking, fed by fear of unfriendly
takeover, and by demand from bankers and owners for dividends.
3. Evaluation of performance and annual reviews.
4. Mobility of managers and job hoping.
5. Management by use only of available data.
6. High medical costs.
7. High costs of liability.

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 Deming said that effective management and a commitment to quality were needed to combat
these seven deadly diseases. He emphasized the importance of communicating quality messages
to all staff and building a belief in total quantity management.

PDCA (The Deming Wheel)

His points of TQM can be summed up by saying that management must redesign their
processing system to PLAN, DO, CHECK and ACT.

PLAN

ACT DO

CHECK

Fig 9.1 PDCA Cycle

The PDCA (plan-do-check-act) cycle consists of four steps or stages which must be gone through to get from
‘problem faced’ to ‘problem solved’. Repetition of these steps forms a cycle of continual improvement,

Plan : Deming councils that business should design quality products and services that customer want, develop
process and system that reduce waste and increase quality and decrease the cost of production.

Do : The business must do the work by putting the plan into action as processing system is running
they must continuously seek ways to do things better.

Check : The way of service customers are getting should be kept on mind along with the service.
Checks points are monitor changes that need to take place. Changes like replacing barriers to quality
by providing employees with the tools needed to do the job rightly and in time. The way of
providing service should be systematic.

Act : After all of above, finally manager take an action. Management may make changes and the
organization get the greatest benefit from those changes.

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These total quality management concepts can be put into place by any organization to more
effectively implement total quality management. As a total quantity management philosophy,
Willam Edwards Deming’s work is foundational to TQM and it successor, quality management
system.

Six Sigma
Six Sigma (6σ) is a set of techniques and tools for process improvement. It seeks to improve the
quality of the output of a process by identifying and removing the causes of defects and
minimizing variability in manufacturing and business processes. It helps us focusing on
developing and delivering near-perfect products and services.

six sigma was developed in the 1980s for Motorola. The tool can be used by manufacturing or
service organizations. The six sigma method tries to eliminate mistakes. Although firms rarely
obtain six sigma quality, it does provide a challenging target. Sigma refers to standard deviation,
so a six sigma defect rate is 6 standard deviations above the mean rate; 1 sigma quality would
produce 690,000 errors per million items. Three sigma is challenging – 66,000 errors per million.
Six sigma is obtained when a firm produces a mere 3.4 mistakes per million. Implementing six
sigma requires making corrections until errors virtually disappear. At GE, the technique has
saved the firm $8 billion in three years. GE is now teaching its customers, including Walmart
and Dell, about the approach. Features of Six Sigma

● Six Sigma's aim is to eliminate waste and inefficiency, thereby increasing customer
satisfaction by delivering what the customer is expecting.
● Six Sigma follows a structured methodology, and has defined roles for the participants.
● Six Sigma is a data driven methodology, and requires accurate data collection for the
processes being analyzed.
● Six Sigma is about putting results on Financial Statements.
● Six Sigma is a business-driven, multi-dimensional structured approach for
❖ Improving Processes
❖ Lowering Defects
❖ Reducing process variability

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❖ Reducing costs
❖ Increasing customer satisfaction
❖ Increased profits
The word Sigma is a statistical term that measures how far a given process deviates from
perfection. The central idea behind Six Sigma: If you can measure how many "defects" you have
in a process, you can systematically figure out how to eliminate them and get as close to "zero
defects" as possible and specifically it means a failure rate of 3.4 parts per million or 99.9997%
perfect.

Key Concepts of Six Sigma

At its core, Six Sigma revolves around a few key concepts.

∙ Critical to Quality: Attributes most important to the customer.

∙ Defect: Failing to deliver what the customer wants.

∙ Process Capability: What your process can deliver.

∙ Stable Operations: Ensuring consistent, predictable processes to improve what the customer
sees and feels.

∙ Variation: What the customer sees and feels.

∙ Design for Six Sigma: Designing to meet customer needs and process capability.

Our Customers Feel the Variance, Not the Mean. So Six Sigma focuses first on reducing
process variation and then on improving the process capability.

Myths about Six Sigma

There are several myths and misunderstandings surrounding Six Sigma. Some of them are given
below:

∙ Six Sigma is only concerned with reducing defects.

∙ Six Sigma is a process for production or engineering.

∙ Six Sigma cannot be applied to engineering activities.

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∙ Six Sigma uses difficult-to-understand statistics.

∙ Six Sigma is just training.

Benefits of Six Sigma

Six Sigma offers six major benefits that attract companies:

∙ Generates sustained success

∙ Sets a performance goal for everyone

∙ Enhances value to customers

∙ Accelerates the rate of improvement

∙ Promotes learning and cross-pollination

∙ Executes strategic change

Key Elements

There are three key elements of Six Sigma Process Improvement:

∙ Customers

∙ Processes

∙ Employees

The Customers

Customers define quality. They expect performance, reliability, competitive prices, on-time
delivery, service, clear and correct transaction processing and more. This means it is important to
provide what the customers need to gain customer delight.

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The Processes

Defining processes as well as defining their metrics and measures is the central aspect of Six
Sigma. In a business, the quality should be looked from the customer’s perspective and so we
must look at a defined process from the outside-in. By understanding the transaction lifecycle
from the customer's needs and processes, we can discover what they are seeing and feeling. This
gives a chance to identify weak areas with in a process and then we can improve them.

The Employees

A company must involve all its employees in the Six Sigma program. Company must provide
opportunities and incentives for employees to focus their talents and ability to satisfy customers.
It is important to Six Sigma that all the team members should have a well-defined role with
measurable objectives.

Methodology

Six Sigma has two key methodologies:

∙ DMAIC: It refers to a data-driven quality strategy for improving processes. This methodology
is used to improve an existing business process.

∙ DMADV: It refers to a data-driven quality strategy for designing products and processes. This
methodology is used to create new product designs or process designs in such a way that it
results in a more predictable, mature and defect free performance.

There is one more methodology called DFSS - Design For Six Sigma. DFSS is a data
driven quality strategy for designing or redesigning a product or service from the ground up.
Sometimes a DMAIC project may turn into a DFSS project because the process in question
requires complete redesign to bring about the desired degree of improvement.

DMAIC Methodology

∙ Define: Define the problem or project goal that needs to be addressed.

∙ Measure: Measure the problem and process from which it was produced.

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∙ Analyze: Analyze data and process to determine root cause of defects and opportunities.

∙ Improve: Improve the process by finding solutions to fix, diminish, and prevent future
problems. ∙ Control: Implement, control, and sustain the improvement solutions to keep the
process on the new course.

DMADV Methodology

This methodology consists of five steps:

∙ Define: Define the Problem or Project Goal that needs to be addressed.

∙ Measure: Measure and determine customers’ needs and specifications.

∙ Analyze: Analyze the process to meet the customer needs.

∙ Design: Design a process that will meet customers’ needs.

∙ Verify: Verify the design performance and ability to meet customer needs.

DFSS Methodology

DFSS is a separate and emerging discipline related to Six Sigma quality processes. This is a
systematic methodology utilizing tools, training, and measurements to enable us to design
products and processes that meet customer expectations and can be produced at Six Sigma
Quality levels. This methodology can have the following five steps.

∙ Define: Define what the customers want, or what they do not want.

∙ Identify: Identify the customer and the project.

∙ Design: Design a process that meets customers’ needs.

∙ Optimize: Determine process capability and optimize the design.

∙ Verify: Test, verify, and validate the design.

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Implication of Six Sigma:
Six Sigma implementation strategies can vary significantly between organizations, depending
on their distinct culture and strategic business goals.

After deciding to implement Six Sigma, an organization has two basic options:

Option 1: Implement a Six Sigma program or initiative

Option 2: Create a Six Sigma infrastructure

Option 1: Implement a Six Sigma Program or Initiative

With this approach, certain employees (practitioners) are taught the statistical tools from time to
time and asked to apply a tool on the job when needed. The practitioners might then consult a
statistician if they need help. Successes within an organization might occur; however, these
successes do not build upon each other to encourage additional and better use of the tools and
overall methodology.

When organizations implement Six Sigma as a program or initiative, it often appears that they
only have added, in an unstructured fashion, a few new tools to their toolbox through training
classes. A possible extension of this approach is to apply the tools as needed to assigned
projects. However, the selection, management, and execution of projects are not typically an
integral part of the organization.

These projects, which often are created at a low level within the organization, do not have the
blessing of upper management; hence, resistance is often encountered when the best solution
directly affects another group that does not have buy-in to the project. In addition, there typically
is no one assigned to champion projects across organizational boundaries and facilitate change.

A program or initiative does not usually create an infrastructure that leads to bottom-line benefits
through projects tied to the strategic goals of the organization. Six Sigma then risks becoming
the “flavor of the month” and will not capture the buy-in necessary to reap a large return on the
investment in training.

Even if great accomplishments occur through the individual use of statistical tools within
organizations, there is often a lack of visibility of the benefits to upper management. A typical
missing element for success with this approach is management buy-in. Because of this lack of
visibility, practitioners often have to fight for funds and may be eliminated whenever the times
get rough financially.

Effective use of statistical tools often does not get recognized and the overall company culture is
not affected. For true success, executive-level support is needed that asks the right questions
and leads to the wise application of statistical tools and other Six Sigma methodologies across
organizational boundaries.

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Option 2: Create a Six Sigma Infrastructure
Instead of focusing on the individual tools, it is best when Six Sigma training provides a process-
oriented approach that teaches practitioners a methodology to select the right tool, at the right
time, for a predefined project. Training of Six Sigma practitioners utilizing this approach typically
consists of four weeks of instruction over four months, where students work on their projects
during the three weeks between sessions.

Deploying Six Sigma as a business strategy through projects instead of tools is the more
effective way to benefit from the time and money invested in Six Sigma training. Consider the
following benefits of Six Sigma deployment via projects that have executive management
support:

● Offers bigger impact through projects tied to bottom-line results

● Utilizes the tools in a more focused and productive way

● Provides a process/strategy for project management that can be studied and improved

● Increases communications between management and practitioners via project

presentations

● Facilitates the detailed understanding of critical business processes

● Gives employees and management views of how statistical tools can be of significant
value to organizations

● Deploys Six Sigma with a closed-loop approach, creating time for auditing and
incorporating lessons learned into an overall business strategy

A project-based approach relies heavily on a sound project selection process. Projects should
be selected that meet the goals of an organization’s business strategy. Six Sigma can then be
utilized as a road map to effectively meet those goals.

Initially, companies might have projects that are too large or perhaps are not chosen because of
their strategic impact to the bottom line. Frustration with the first set of projects can be vital
experience that motivates improvement in the second phase.

Six Sigma is a long-term commitment. Treating deployment as a process allows objective

analysis of all aspects of the process, including project selection and scoping. Utilizing lessons
learned and incorporating them into subsequent waves of an implementation plan creates a
closed feedback loop and real dramatic bottom-line benefits if the organization invests the time
and executive energy necessary to implement Six Sigma as a business strategy!

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 Unit 10: Knowledge and Talent Management

An integration of thought on Knowledge Management

1.1 Introduction

The last decade has seen an increased focus on knowledge creation and knowledge deployment
in organization .Broadly, this stream of thought suggests that organization should focus on better
utilizing their intellectual capacity by improving knowledge flows among members. The goal is
achieving a competitive advantage via effective knowledge deployment. Knowledge is broadly
defined as credible information that is of potential value to an organization. On the inbound side
of the knowledge management(KM) process ( i.e. knowledge creation),the focus is on generation
and dissemination of information ,developing a shared understanding of the information ,filtering
shared understanding into degrees of potential value and storing valuable wisdom within the
confines of an accessible organizational mechanism . As such ,on the outbound side of KM
process ,the focus is on leveraging an organization collective wisdom to achieve improved
responsiveness(e.g. customer ,competitor,supplier,internal responsiveness) ultimately enhance
performance( customer, internal process ,innovation,learning,and financial performance.

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Knowledge Management (KM) comprises a range of practices used in an organization to
identify, create, represent, distribute and enable adoption of insights and experiences. In other
words, Knowledge Management is a process that, continuously and systematically, transfers
knowledge from individuals and teams, who generate them, to the brain of the organization for
the benefit of the entire organization. Prof. Gopinath defines the Knowledge Management in
three different views:
• Knowledge Management is a right principle for right application and right use.
• Knowledge Management is a field of handling knowledge in different stages. It focuses around
creation, capturing, nurturing, documenting, disseminating, absorbing and conserving for
development of human resources.
• Knowledge Management is a process of enriching human resource, material resource and
environment (organization’s environment, work environment) preservation.

R. Gregory Wenig (1998) defines KM from organizational perspective. According to his

definition, Knowledge Management for the organization consists of activities focused on the
organization gaining knowledge from its own experience and from the experience of others, and
on the judicious application of that knowledge to fulfill the mission of the organization.

Thus, Knowledge Management can be defined as a systematic process that creates captures,
shares, and analyzes knowledge in ways that directly improve organizational performance. It
comprises a range of strategies and practices used in an organization to identify, create, represent
,distribute ,and enable the adoption of insights and experiences. It is the ability to get the right
information to the right people at the right time, and in the right place, so that an organization
can be operated smoothly and effectively.

1.2 Knowledge management as discipline

Knowledge is created by humans. Yet human resources are not made to work forever in an
organisation. At a certain stage they will exit the organisation. It is important for retiring
employees to share the knowledge they have (Liebowitz, 2012). Stam (2009) holds the view that
KM can be seen as a tool for risk management to reduce the risk of losing critical knowledge.
Rudawska (2013) and Thomas and Underwood (2015) mention that KM serves as a strategy to

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organise, facilitate and manage knowledge within the organisation by providing systematic
processes and techniques to capture, transfer and retain knowledge and to reduce the impact of
knowledge loss caused by departing employees. Accordingly, organisations that are not applying
KM and experience a high staff turnover will fail to compete and to produce a product or service
of high quality (Ahmed, Fiaz & Shoaib, 2015). KM enables organisations not to reinvent
solutions and keeps the organisation focused on producing high-quality products and good
service (Sołtysik-Piorunkiewicz, 2015). Historically, KM has been perceived as belonging to the
field of information technology (Whelan et al., 2010). However, Sołtysik-Piorunkiewicz (2015)
argues that KM has established itself as a discipline and uses various approaches, ranging from
human-centric to information technology. The goal is to create, share, transfer and retain
knowledge within the organisation for future use. Furthermore, Ahmed et al. (2015, knowledge
management section) state that KM deals with "connecting people to people and people and
people to information". However, they emphasise that KM is more on the human administrative
side when compared to other fields such as engineering and information technology.

The literature shows that the term KM is defined as processes and practices used to identify,
create, acquire, capture and share knowledge for the purpose of enhancing individual learning
and organisational performance (Armstrong, 2009; Mullins & Christy, 2013). Patel and
Gorvadiya (2014) define KM as a process for creating, sharing and using knowledge in order to
gain and sustain competitiveness. In addition, Sarkar (2013) asserts that KM is an enabler for
organisations to store information and knowledge and to permit employees to gain access to it,
thereby obtaining critical information and best practices.

1.3 Conclusion

The right knowledge at the right time in the format and in an accessible form is clearly an
invaluable asset to an organization. However effectively and efficiently balancing the need for
and value of knowledge with the potential information overload the most organization face can
only be done by incorporating KM at all levels. As such KM should be treated as an explicit,
long-term organizational concern. It should be reflected in the vision, guiding
principles,mission,objectives,strategy and activities of the organization.Additionally,KM issues
within the broad areas of learning culture and climate ,information processing, knowledge

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building, organizational memory knowledge deployment responsiveness and performance should
be fruitful for our understanding of the powerful aspects of KM to organizations.

Barriers to Implement Knowledge Management in Organization

Knowledge management is a multi-disciplinary approach to attain organizational goals by

making efficient use of knowledge in an organization. It is regarded as the most valuable assets
of the organization which promotes innovation, cultural change and improves business decision
making process. In order to achieve maximum benefits from intellectual capital it should be
executed and put into practice in a proper manner. It build more collaborative environment, cut
down on duplication of effort and encourage knowledge sharing in an organization that leads to
considerable saving in terms of time and money. But at the time of implementation of knowledge
management, organization encountered many barriers.

According to Richter and Derballa (2006), the main difficulty in incorporating knowledge
management in an organization includes three dimensions that are technology, organization and
human factor.

Category Barriers
Technology Lacking acceptance
Technology Information overload and redundancies
Technology Missing instruments for integrated planning and evaluation
Organization Linguistic problems
Organization Lack of time
Organization Unfavorable company- and knowledge culture
Organization Missing or diverging goals
Human Cultural influences
Human Personal fears and uncertainties
Human Inadequate motivation
Source: Richter and Derballa (2006)

Some of the major barriers include:

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 ● Lack of specific integration of KM strategy and sharing initiatives into company’s goals
and strategic approach;
● Being short of, leadership and managerial direction at the time of disseminating the
values and benefits of knowledge sharing practices;
● Lack of transparent rewards and recognition system to encourage employee to share their
knowledge and information;
● Not having successfully addressing the cultural change issue in knowledge sharing
practices;
● Ineffective Organizational design and structures slow down sharing practices and flow of
transferring information;
● Reluctance to use IT system because of lack of acquaintance and experience;
● Lack of integration of IT system and processes obstruct work routine and communication
flows
● Mismatch between individuals’ need requirements and integrated IT systems and
processes in restricting information sharing practices;
● Lack of trust in the accuracy and credibility of knowledge due to unreliable sources;
● Low awareness and realization of the value and benefits of possessed knowledge to
others;
In ensuring the proper incorporation of knowledge management in organization the KM team
must be focused on the aspect of organizational change and must develop programs to reach out
to individuals involved. The programs must include, among others, advocacy, communications,
training, policies and procedures, and incentives. They must also include knowledge
proficiencies, a comprehensive measurement system, and the creation of an organizational team
to lead and support the knowledge management effort. The leadership of an organization must be
combined with a culture based on sharing.

ORGANIZATION AS A TALENT FACTORY

Organizations are human associations. They are established to achieve goals. They have
structure. They have technology. They are complex. They operate in a dynamic way. According

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to Ricky Griffin, Organization is a group of people working together in structured and
coordinated fashion to achieve a set of goals. For our purpose, organization can be defined that
organization is a system composed of people, structure and technology for achieving common
goals in a dynamic environment.
Organization goals, an organization is goal oriented .Goals provide direction about what is to be
done. They guide the actions of the organization. They are the focal point for using resources.
They are end results to be achieved. They serve as standard for measuring performance. All
activities of an organization are aimed to achievement of goals. Goals without action are dreams.
According to Ivancevich, Donnelly and Gibson: Organizational goals are the broad aims which
serve as a guide for action.
Effective goals should cover key result areas. They should be “SMART”(S-specific, M-
Measurable, A-Acceptable, R-Realistic, T-Time bound).
Goals are end results to be achieved by organizations. They direct their activities. They should be
formulated carefully. Goals should be specific and stated clearly for their clear understanding by
all. They should also be measurable acceptable, realistic and time bound.
The goal formation process in organization consists of three steps. (1)Environmentally scanning,
(2) Formation of overall goals.(3)Formation of specific goals.
The important factors affecting goal formation in organizations are: organization size, nature of
organization, level of management, organization culture, environmental process, and situation.
The approaches to goal formation are:
1. Top- down approach-It is management drive.
Top level managers determine the goals for sub-ordinates. The assumption is that overall
corporate goals should direct the goal formation process at middle and lower levels.
2. Bottom up approach-

Middle and lower level managers set goals and present them to top level managers. The
assumption is that need information from sub- ordinates for overall goal formation.
Participation, motivation and commitment from sub-ordinates is ensured for goal
formation.

3. Management by objectives (MBO)approach

It is driven by both management and sub- ordinates. MBO is used as an approach to goal
formation. Superior and sub- ordinates jointly set times bound measurable goals. The
responsibilities for each individual in terms of expected results are defined. Actions plan
are developed .Sub- ordinates performance is periodically evaluated in terms of goal
achievement. Feed back about performance is provided to sub-ordinates. Rewards are
allocated on the basis of performance. The steps in MBO approach to goal formation are

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 collaborating goal setting action plan development, periodic review of performance,
performance appraisal.
Organization is goal oriented, change in goals occur due to goal succession. Goal succession
refers to conscious attempt by management to adopt new goals. Such change in goals is done
consciously and intentionally to adopt the organization to changing environment.
Goal succession is intentional change in goal, change in environmental forces, necessitates goal
succession. Goals are reviewed and modified periodically for environmental adaptation.
Goal succession is needed because of environmental adaptation, unachievable goals, original
goals achieved.
To achieve the organization goal, we should have talented manpower. We should know about
process and function of management. Process is a systematic way of doing things, management
is process. Functions constitute the essence of management process. The management functions
consist of planning, organizing, staffing, leading and controlling.
They should have talented skilled manpower. Skill Is ability to perform a particular task. The
skills are technical skills, human skills, and conceptual skills.
Organization needs talent management systems. Talent management from a different direction,
they both maintained a twin focus a functionally (rigorous talent process that support strategic
and cultural objectives) and Vitality (management emotional commitment which is reflected in
daily actions ( A/c to Jay A Cogner).
Generally, there are two approaches to study the talent management, exclusive and inclusive.
The exclusive approach views talented employees as an elite subset of the organization,
employees as they exhibit a drive to excel a catalytic learning capability, an enterprising spirit
and a dynamic sensor. The inclusive approach is based on the ‘Egalitarian’ principle that talent is
inherent in each person.
A/c to Ichniowski et.al., Talent management shown that implementing practices in bundles
across HR practices can enable a synergetic, combined effect on performance. Talent
management has become a salient and sustained concern of CEO, and HR managers primarily
due to ongoing fears about perceived skills gap for key job roles, an aging work force and the
ability of talented employees. These challenges have put pressure on the HR professionals to
play a critical in determining whether their organizations talent management philosophy and
bundle of HR practices should be exclusive and inclusive with later approach, entailing
providing different resources to talent segments, having a disproportionate strategic impact on
organizational outcome.

A/c to Marian crawley and Akram : Organization and managers in the tourism and hospitality,
industry face real challenges, in recruiting developing and maintaining a committed competent
,well-managed and well motivated work force which is focused on offering a a high quality
product to the increasing demanding and discerning customer(Nickson,2007).This requires the
implementation of talent management i.e. the process of identifying ,securing, developing and

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managing relevant talent which is important to meet the organizational long term strategic needs
and to ensure short term productivity (nilson and Ellstron 2012).The functionally and vitality of
company’s talent management processes ,determine how well the company can grooms its high
potential employees to fill strategic management roles.(Ready and Cogners,2007).

A/c to Michaela sirkova and et al, Management of HR processes in the specific context of
selected area. The passion for commitment must come from the top and must keep into the
culture. A/c to Ready and Cogner, 2007, the dynamism of a company’s talent management
process come from three defining characteristics namely commitment, engagement and
accountability. Fostering commitment begins with new hire and continues through a person’s
career.

A/c to D A ready, Talent Factory means management development, Business performance,

strategy planning, Human resources strategies.

A/c to Ayush Rai and et al---,(1) Major problems in having talent for key roles.

-Insufficient pipeline of high potential employees to fill strategic positions.

-Processes out of sync. With the requirement of the company.

-Business loses out an opportunity to expand due to insufficient talent to support growth
strategies.
(2) Importance on both managing and building talent.
- Functionality-Processes to support strategic and cultural objectives.
-Vitality- Emotional commitment by management result.
-takes no time in finding strong potential candidates for key roles while many organization lose
out due to lack of talent.
(3)Talent management tied to strategic growth, eg. Focus on emerging markets.
-Technology enables tracking the internal talent of the organization.
-Focus rewards and recognition system.
(4)Challenging assignments to first time manager to prepare them for bigger role.
-Formal training and development programs like executive education programs.
-Rotational roles in different vertical of business.
-Importance to hiring process which is very detailed and meticulous.
(5)Fostering commitment.
(6)Ensuring accountability.

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_Talent factories held all stakeholders accountable for doing their part.
-All managers held on accountable for identifying and developing firm’s current and future
leaders.
(7) Collective management conferences where employees learn about companies’ strategic
objectives and operations around the world.
-Great organization don’t just manage their talent, they make their companies talent factories.

Talent factories share two characteristics-Their talent management processes have high
functionality, what you do, do well.
Processes can be benchmarked but it is impossible to copy session, while functionality is fit for
purpose (one size does not fit all.
-The second characteristics, the second weapon is Vitality.
- Vitality is universal and characterized by three hall marks; Commitment, Engagement,
Accountability.
-New research shows that how to attract and retain the best employees in developing economies,
winning the race for talent in Emerging market.
A talent factory consists of one or more employees whose responsibility is to recruit, hire and
retain strong talent with in a company. Essentially, it is a strong well functioning, recruiting
team. We call it a talent factory because we are creating a ‘factor like’ feel as we continue to
provide strong talent and grow the company.
What does it mean a talent factory?
1) The secret weapon to securing internal talent is to focus a talent management processes
on a specific strategic outcome and to embed passion for development in the organization
culture.
2) The vitality of an organization is a product of commitment, engagement and
accountability.
3) Ultimately, talent management is not just a leadership responsibility, it is core business
practice.
4) While the upfront costs of creating HR processes and aggressive development initiatives
may be daunting for some cost of not building a talent factory significantly impede
organizational growth and success.

Shreekrishna Sagar Chapagain 10.4 Managing talents for competitive advantage

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Unit 11

Sonika Shakya 11.1 Management environment

What is Corporate Governance?

Corporate Governance refers to the way a corporation is governed. It is the technique by which
companies are directed and managed. It means carrying the business as per the stakeholders’
desires. It is actually conducted by the board of Directors and the concerned committees for the
company’s stakeholders benefit. It is all about balancing individual and societal goals, as well
as, economic and social goals.
Corporate Governance is the interaction between various participants (shareholders, board of
directors, and company’s management) in shaping corporation’s performance and the way it is
proceeding towards. The relationship between the owners and the managers in an organization
must be healthy and there should be no conflict between the two. The owners must see that
individual’s actual performance is according to the standard performance. These dimensions of
corporate governance should not be overlooked.
Corporate Governance deals with the manner the providers of finance guarantee themselves of
getting a fair return on their investment. Corporate Governance clearly distinguishes between
the owners and the managers. The managers are the deciding authority. In modern
corporations, the functions/ tasks of owners and managers should be clearly defined, rather,
harmonizing.
Corporate Governance deals with determining ways to take effective strategic decisions. It gives
ultimate authority and complete responsibility to the Board of Directors. In today’s market-
oriented economy, the need for corporate governance arises. Also, efficiency as well as
globalization are significant factors urging corporate governance. Corporate Governance is
essential to develop added value to the stakeholders.
Corporate Governance ensures transparency which ensures strong and balanced economic
development. This also ensures that the interests of all shareholders (majority as well as
minority shareholders) are safeguarded. It ensures that all shareholders fully exercise their
rights and that the organization fully recognizes their rights.
Corporate Governance has a broad scope. It includes both social and institutional aspects.
Corporate Governance encourages a trustworthy, moral, as well as ethical environment.

Benefits of Corporate Governance

1. Good corporate governance ensures corporate success and economic growth. 2. Strong
corporate governance maintains investors’ confidence, as a result of which, company
can raise capital efficiently and effectively. 3. It lowers the capital cost. 4. There is a positive
impact on the share price. 5. It provides proper inducement to the owners as well as managers

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to achieve objectives that
are in interests of the shareholders and the organization. 6. Good corporate governance
also minimizes wastages, corruption, risks and
mismanagement. 7. It helps in brand formation and development. 8. It ensures organization
in managed in a manner that fits the best interests of all.

Role of Knowledge Management

The globalization has brought many modern trends, and companies have the task to adapt them
as quickly, easily and painlessly they can in order to survive in the competitive market. The vital
strategic resource today is the knowledge (individual and organizational).

KM is a systematic process of identifying, creating, capturing, acquiring, storing, sharing,

organizing, transferring, sustaining, retrieving, renewing, evaluating and utilizing both explicit
and implicit forms of knowledge at individual, group, organizational and community level.

According to Ouintas et al (1997) “KM is an integrated approach to discover, develop, utilize,

deliver, and absorb knowledge inside and outside the organization through an appropriate
management process to meet current and future needs”

The role of knowledge management in an organization:-

➢ Increase competitiveness: KM is the key source of competitiveness because KM helps to

find out existing knowledge within an organization and let the management team of an
organization to acquire required knowledge to operate the organization more efficiently.
➢ Enhancement of productivity: KM ensure the possible of fewer repeated mistakes by
sharing cause of such mistake which directly help the employees as well as organization to
enhance productivity.
➢ Encourage innovation: KM encourage employees to flow their ideas freely through the
company to get an innovative idea(s). Which might help the organization run more efficiently.
➢ Effective decision-making: In KM process knowledge is identify, gather, store and easily
accessible, so the employees can quickly find all the information they need, it help every level
of employees (especially supervisors & managers) to take effective decision quickly.

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➢ Involvement of employees: KM lets the employees to share their ideas, views, possible
solution for a particular problem, so directly & indirectly employees are involve in every level
of planning, decision making and in other managerial activates.
➢ Increase internal communication & team work: Knowledge is share continuously within
an organization which help to build an effective internal communication and create favorable
situation for team work.

Susmita Tamang 11.4 Mentoring in organization

39 Yajula Dangol(done) 11.5 Empowerment and organizational change

Empowering Organizational Leadership In 21st Century.

Employee empowerment is the process of giving front-line employees the authority to make
decisions once reserved only for managers. It has become an important topic in early 21st
century leadership as coaching style management has become more commonplace. Companies
are generally operating with less authoritarian-style management and trying to get employees
actively involved in business processes
Empowerment closely aligns with the leadership topic of delegation. Delegation is leaders giving
subordinates tasks to complete and timelines in which to complete them. Delegation has
generally been around longer than empowerment. Empowerment is more about trusting
employees to make decisions in customer service situations or other front-end situations when a
manager is not available. In essence, delegation is typically more task-based while empowerment
is more authority and decision-based

Empowerment Benefits
Companies and leaders have increasingly implemented empowerment because of the benefits of
empowered employees. Employees typically feel a stronger sense of ownership and worth when
entrusted to make important decisions. This, in turn, makes them more productive in their roles.
Customer benefits are also important. Customers who are angry or seeking resolution for a
problem typically want that problem dealt with as quickly as possible and get frustrated when
told that a manager is not available to help them and they will have to wait.
Following are a few things leaders can do to build an environment that empowers people.

1. Give power to those who have demonstrated the capacity to handle the responsibility.
2. Create a favourable environment in which people are encouraged to grow their skills.

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 3. Don’t second-guess others’ decisions and ideas unless it’s absolutely necessary. This
only undermines their confidence and keeps them from sharing future ideas with you.
4. Give people discretion and autonomy over their tasks and resources.

11.7 Quality Issues of Organization

Organization can be manufacturing or service providing. Similarly, the quality issues in
manufacturing organization and service providing organization are different. They are listed
below:

A. Manufacturing Organization
1. Skilled Employees: Having technical skills.
2. Quality Raw Materials: Best materials at cheap price to maintain cost of product.
3. Production Technology: Use of Advance Technology to minimize defects.
4. Market Research in Demand Purchase: Addressing changing needs and preferences.
5. Product Design: Outlook of product and Packaging.
6. Before and After Sales Service: Home delivery, guarantee, warranty.

B. Service Providing Organization

1. Competent Human Resources: Having good Communication Skills, Interpersonal Skills.
2. Promptness of Service: Quick Service saves time of customers.
3. Reliability Completeness: Reliable and effective service.
4. Maintaining Customer Relationship: To get necessary feedbacks and required changes.
5. Addressing Changing Customer Needs: Providing desirable Services.
6. Serviceability Knowledge of Server

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