Companies with happy and engaged workers are typically more successful than others. Management practices are largely responsible for building a productive workforce, which gives the company a competitive advantage. Bureaucratic management is defined as “the exercise of control on the basis of knowledge.” The aim of bureaucracy is not to protect authority but to achieve goals in the most efficient way possible. Review the management practices discussed in Exhibit 1.7 in MGMT, and write a report on how they might be applied in the workforce. Describe how bureaucratic management might create a competitive edge. Where possible, provide examples of your own experience with these practices. Your report should be 1 page in length.
Exhibit 1.7
1. Employment Security—Employment security is the ultimate form of commitment companies can make to their workers. Employees can innovate and increase company productivity without fearing the loss of their jobs.
2. Selective Hiring—If employees are the basis for a company's competitive advantage and those employees have employment security, then the company needs to aggressively recruit and selectively screen applicants in order to hire the most talented employees available.
3. Self-Managed Teams and Decentralization—Self-managed teams are responsible for their own hiring, purchasing, job assignments, and production. Self-managed teams can often produce enormous increases in productivity through increased employee commitment and creativity. Decentralization allows employees who are closest to (and most knowledgeable about) problems, production, and customers to make timely decisions. Decentralization increases employee satisfaction and commitment.
4. High Wages Contingent on Organizational Performance—High wages are needed to attract and retain talented workers and to indicate that the organization values its workers. Employees, like company founders, shareholders, and managers, need to share in the financial rewards when the company is successful. Why? Because employees who have a financial stake in their companies are more likely to take a long-run view of the business and think like business owners.
5. Training and Skill Development—Like a high-tech company that spends millions of dollars to upgrade computers or research and development labs, a company whose competitive advantage is based on its people must invest in the training and skill development of its people.
6. Reduction of Status Differences—A company should treat everyone, no matter what the job, as equal. There are no reserved parking spaces. Everyone eats in the same cafeteria and has similar benefits. The result: improved communication as employees focus on problems and solutions rather than on how they are less valued than managers.
7. Sharing Information—If employees are to make decisions that are good for the long-term health and success of the company, they need to be given information about costs, finances, productivity, development times, and strategies that was previously known only by company managers.