The current business environment is characterized Critical Essay

Last Updated: 26 Jan 2021
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The current business environment is characterized by a considerable level of uncertainty and therefore businesses have to continuously reengineer their internal processes in order to build and maintain a sustainable competitive advantage.

In this respect, the critical success factor is to build an organizational culture that is built to change. This is a critical consideration because, given the high level of uncertainty, the management in a business organization is no longer in a position to forecast future changes meaningfully.

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Therefore the organizational structure must be flexible enough to absorb unexpected changes. The question that should be answered is how this flexibility can be built into the organizational structure. In this respect, it is the duty of the management to build the right performance management system.

Through this system the management can communicate with the employees regarding which aspects of their work are vital to the strategic focus of the organization. The right performance management system is a critical consideration in terms of addressing issues related to employee motivation and empowerment.

Capital One is empowering its employees through dissemination of information and by maximizing the surface area. This enables the employees to link their work to the strategic focus of the organization (cited in Zairi, 2005).

The fact of the matter is that the management at all levels in Capital One is implementing strategic human resource management. In this manner it is addressing the issues of motivation and empowerment. According to the post-modern theory, business organizations need to maintain the continuous improvement process in order to build a sustainable competitive advantage (cited in Hill & Jones, 2007).

However the development of a sustainable competitive advantage depends on access to human capital. Capital One has devised its human resource management policies in order to develop human capital. Even through it is not directly addressing the issues of motivation and empowerment, its policies are designed to make these issues the top priorities on the management agenda. Job rotation is one of the examples.

According to post-modernism, job descriptions are no longer effective because they create a static organizational structure and therefore do not equip the organization with the abilities to adapt to fast-paced change in the external environment (cited in Besterfield, 2002).

According to the post-modern theory, employees have to be groomed to assume a wide variety of positions so that changing organizational structures will not be a problem for them. We see Capital One addressing this issue through creating leadership capabilities throughout the organization. The company’s recruitment and selection strategies are implemented accordingly.

For example, during the recruitment process, the most important qualification for the candidate is considered to be his ability to lead a change effort. Because of carefully implemented recruitment and selection strategies, the company minimizes the costs associated with training and development (cited in Ross & Perry, 2002).

However the management does communicate with the employees in terms of the extent to which formal training and development programs can be arranged for the employees.

A built-to-change organizational structure cannot be built without addressing the issues of motivation and empowerment. According to post-modernism, employees must be involved in the change management process (cited in Brigham & Ehrhardt, 2007). This facilitates the process of addressing employee resistance to change. The management at Capital One addresses this issue through building an effective communications structure which facilitates the dissemination of mission-critical information.

As mentioned before, this maximizes the level of surface area. Strategy implementation in this regard has been facilitated through the creation of a flat management structure which enables most employees to work in direct touch with the customers. This enables the employees to make the link between their work and the strategic focus of the company because working in direct touch with the customers means that the employees can see in which direction the organization should proceed in terms of customer relationship management (cited in Dess, 2007).

Employee motivation and empowerment is the most critical factor in the post-modernist theory. This is because post-modernism as associated with a sustainable competitive advantage in business emphasizes employee motivation and empowerment.

According to Michael Porter’s theory for strategy formulation, a business organization has three strategies at its disposal in building a competitive advantage: differentiation, cost minimization and quick response (cited in Baschab, 2005).

However, according to the post-modernist theory none of these strategies will lead to the development of a sustainable competitive advantage because they can be easily copied by competitor organizations in a fast-changing external environment.

Therefore, post-modernism in business focuses on the building of a strategically aligned organizational culture as the source of a sustainable competitive advantage. A strategically aligned organizational culture cannot be built without effectively addressing the issues of employee motivation and empowerment.

Employees must be involved in the change management process. In this organizational structure, the issues of employee motivation and empowerment are addressed effectively because they are directly involved in building the strategic focus of the company. This is an example of what we see in Capital One.

This is one of the few American companies to have been able to weather the current crisis because of its focus on the built-to-change organizational structure based in employee motivation and empowerment. The company is not consciously addressing these issues as such.

However because of its strategies in recruitment, selection, job rotation and training and development, it has been able to involve the employees in the constant process of managing change. This has only maximized their productivity as employees are motivated to work for the company because they are empowered to act on behalf of the company.

This has created an organizational structure based in motivation and empowerment which aligns employee interests to organizational interests. This is an example of post-modernism in business.

References

Baschab, John., et al. (2005). The Executive Guide to Information Technology. McGraw Hill/Irwin.

Besterfield, Dale H., et al. (2002). Total Quality Management. McGraw Hill/Irwin.

Brigham, Eugene F., and Michael C. Ehrhardt. (2007). Financial Management: Theory & Practice. South western college pub.

Dess, Gregory G., et al. (2007). Strategic Management: Creating Competitive Advantage.

McGraw Hill/Irwin. Hill, Charles., and Gareth Jones. (2007). Strategic Management Theory: An Integrated Approach. McGraw Hill/Irwin.

Ross, Joel E. and Susan Perry. (2002). Total Quality Management: Text, Cases, Readings. Wiley.

Zairi, Mohamed. (2005). Excellence Toolkit: Delivering Sustainable Performance. eTQM College Publishing House.

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The current business environment is characterized Critical Essay. (2016, Jun 15). Retrieved from https://phdessay.com/the-current-business-environment-is-characterized-2/

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