Abstract
Today’s business and society need to survive amongst the challenges of globalisation, digitisation, changing capitalism and, disruptive fast-paced innovation. The known management tools and procedures that handle the problems of efficiency and scale are no longer sufficient. Therefore, future management must innovate more in areas such as adaptability, improved stakeholder management, fast knowledge creation and sharing, and self-management. In this blog, I am discussing how the future of management may unfold by explaining the challenges in today’s business management and by analysing management areas that need rapid innovation to address these challenges. I mention a framework to adopt, that integrates the evolving management models of global leadership, stakeholder management, and transformational leadership as some examples of management models that will impact the innovation in management practices in the coming decades. I also discuss how the future management changes will bring a positive social change.
Management, Today and In The Past
Management is multi-functional, and amongst many functions that management serves, some are about setting strategy, policies, mission, vision and, objectives. Scientific management serves the functions of organising, planning, coordinating and, directing the resources for efficient use to achieve the set goals. These features of management and the innovations to handle efficiency and scale have existed for many decades (Hamel, 2009). Per Hamel (2009), the evolution of management has traced an S-curve, and most of the recent breakthrough in management occurred decades ago. Therefore, there are a need and an opportunity to learn from the evolution of management, leading to the discussion on the future innovations in management.
Management evolved from the need to organise and divide labour for scale and efficiency. The original ways of organisation ceased to be relevant and progressed along an evolutionary spectrum. First, thousands of years ago, human societies organised into small tribes and army, to benefit from the division of labour, and to achieve daily short term objectives. Such organisations helped the communities perform in chaotic environments, mostly under the authority of a chief. Second, hierarchical organisations such as an army came into existence to achieve longer term goals of empire building and centralised power.Third, the industrial revolution introduced new challenges that demanded evolution in management to control production, innovation and, corporation profit and competition. Management evolved to be more scientific in planning, co-ordination and, resource management to achieve accountability. Fourth, capitalism and other newer economic models influenced diversity, multicultural, flexibility, collaboration and empowered styles of management. Capitalism also initiated concepts of stakeholder management instead of shareholder management. Today’s management practices though still heavily influenced by these practices are in need of innovation to handle the challenges of the 21st century.
Position and Purpose
Today’s business management needs to survive the challenges of globalisation, digitisation, changing capitalism, knowledge-based economy, constant organisational changes and, disruptive fast-paced innovations. Society is viewing corporations as lacking passion and purpose. These challenges indicate that today’s management practices have outlived in many organisations such as non-profits, public schools, government offices and private multinational companies. Therefore, future management must innovate in the areas of adaptability, improved stakeholder management, fast knowledge creation and sharing, and transformational leadership. Future innovations in these management areas will help make organisations a better place to work together, where team members are encouraged to create knowledge while nurturing their talents and achieving their aspirations for the betterment of the society.
The Problems Facing Today’s Management
Managers today face a new set of challenges due to an ever-changing volatile business environment and societal needs. There is no one management model to meet the growing needs of organisations and society. I believe the future management will unfold to address the six critical challenges. First, the challenges from a free-market globalisation. Second, the impact of technological and digitisation revolution on managing production and groups. Third, the need to regulate neoliberal capitalism. Fourth, the new management requirements from an open and knowledge-based economy. Fifth, the effect of constant organisational changes on the motivation and performance of teams. Sixth, the increase in competition and the impact on society from disruptive fast-paced innovations.
The Impact of Globalisation
The advancement of science and digital technologies has significantly reduced the cost of transportation and communication, making globalisation possible (Shangquan, 2000). Globalisation has forced innovations such as electronic payment systems making possible payment for services and goods from anywhere in the world. If companies can reduce shipping costs and implement e-payments, then foreign companies can compete with local players in many countries. Therefore, organisational competition has become bigger than ever. International company access to local markets increases competition in attracting consumers of a domestic market. Due to globalisation, innovation can be adopted quickly by many new entrants in a different local market and capture the market. Managers and leaders have the challenge of ensuring their organisations and working processes can adapt seamlessly to the needs of globalisation and fast-paced production.
Globalisation requires workforce and skills from across the world. Therefore, globalisation has resulted in a common phenomenon of having teams split across countries. Global teams are generating new knowledge at a fast pace, and global teams bring in the challenges of physical, cultural and temporal disparity (Ocker, Huang, Benbunan-Fich, & Hiltz, 2009). Managers and leaders face the challenges of managing across different cultures and time zones. Managers should also be aware of the skill set available in various portions of the global team and adequately invest in resources to get the maximum return on investment from the team. Leaders and managers should also ensure knowledge sharing across members of the global team.
The Impact of Digitisation
Digitisation has enabled organisations and businesses to create new knowledge and products at a faster pace than ever before. This fast-paced global environment requires creativity to manage new organisational competition challenges. Digitisation has brought in new disruptive technology that requires established businesses to rethink their existing work processes. Organisations depend on managers to find innovative techniques to manage productivity in a fast-paced, knowledge-rich and frequently changing global teams.
New technological advances are changing the way businesses compete. Product manufacturing and the work processes will need to change to compete in the era of such technological advances. There have been numerous digital and process innovations in supply chain delivery of many industries to make globalisation possible and to reap the benefits of globalisation. Industrial production, for instance, now integrates production of different machinery parts in many countries and are then assembled for delivery closer to their destination market. Therefore, the nature of work has changed significantly and is continuing to change with disruptive digital revolution. Digitisation has evolved rapidly to communicate 24 hours and seven days a week (24/7 mode) and thus the need for management to implement and support 24/7 mode operating teams. Managers and leaders are also expected to handle a continuous flow of information from multiple non-traditional sources such as social media, electronic forums and electronic blogs.
The Impact of Changing Capitalism On an Equal Society
Many economically emerging countries follow a form of the neoliberal capitalism. Corporations continue to gain from supporting the open market trade policies of capitalism. Neoliberal capitalism is an ideology that emphasises, among other things, the pursuit of self-interest, competition, market exchange, consumerism, and using a profit/loss criterion to make decisions in organisations (George, 2014). However, modern capitalism practices have failed to take the fairness principles of the neoliberal form of capitalism. This fairness prediction from Adam Smith is not observed in today’s free market capitalism, as proved by the recent 2008 economic collapse. Countries are exploring variations of capitalism, yet, are struggling to create economic growth for all sections of their societies.
There are many examples of cash-rich American companies making decisions for short-term gains at the cost of harming the economy in the long term. Private corporate investment in product development and research is the fundamental purpose of modern capitalism. The core purpose of modern capitalism seems lost, and therefore the accountability in stakeholder management needs improvement. The wealth owned by the top 0.1% in the USA has increased from 7% in 1978 to 22% in 2012, while the wealth of the bottom 90% has not grown (Saez & Zucman, 2014). Therefore, modern capitalism has generated wealth with a significant income disparity, and management needs to regulate to ensure a just, yet productive society.
The Effects of Constant Organisational Changes on Teams
Constant organisational changes are inevitable in today’s global, digital, fast-paced economy. Such constant changes can cause chaos and lack of direction in groups. Managers and leaders have the challenge of communicating organisational shifts in a purposeful manner to reduce the chaos that comes with the changes. Management changes are not avoidable; therefore, the best strategy is to be prepared for changes and invest in a culture of adaptability.
Some organisation changes can be seamless, especially when they happen at the tail-end of a product release or in a foreseen acquisition or merger. However, some changes are perceived as unexpected and dramatic, with no succession plan in place. Often, chaos exists due to an unexpected and sudden change in management. Such a change brings out many unknown questions and insecurity feelings in the minds of team members. Disruption in business needs also requires quick unplanned management changes, as disruption can indicate a shift in the company’s production strategy, requiring new skills and expertise.
The New Requirements of a Knowledge-Based Economy
Knowledge sharing is an approach to identifying, acquiring, applying, creating, developing, preserving and measuring the awareness of the organisation (Alrawi, Hamdan, Al-Taie, & Ibrahim, 2013). By identifying that a team’s knowledge is created at the individual level and transferred upward to teams, groups, departments, and ultimately to the whole of the society, managers must motivate people to create and transfer the team’s knowledge (Turner & Petrunin, 2015). In today’s knowledge-based economy, the information cannot be forced to flow in a hierarchical and top-down way. Therefore, managers and leaders have the challenge to ensure as little bottlenecks as possible for the flow of created knowledge, within the organisation.
The Effects of The Disruptive Fast-Paced Innovations on The Society
Innovation and disruption have often been considered an ongoing process. However, combined with the fast-paced globalisation and digital communication revolution, innovations and disruptions impact the business and societies at a much faster rate than ever before. For example, because of the disruption the Apple iPhone posed, there were significant effects on the supporting industries as well (Butler & Martin, 2016). Butler and Martin (2016) mention that the biggest impact from the disruptive iPhone was on the cellular service providers having to handle the unique challenges of providing bandwidth for data. Such disruptions in the mobile industry are fast reaching every corner of the world. Disruptive innovations also seek new skilled workforce, at times making current skills less useful. Therefore, management innovators and practitioners should guide practices to keep up with the pace of disruption and thereby bring a positive social change.
The Future of Management For The Betterment of Society (The TASK Framework)
The management of the future must unfold today’s needs and innovate with a framework of four primary focus areas. First, management must focus on improved stakeholder (S) management that reemphasizes purpose, trust and community involvement. Second, knowledge (K) management is essential in today’s knowledge-based economy. Third, adaptability (A) is necessary to reduce the rigid hierarchical organisation structure along with the ability to manage diverse, multicultural, multigenerational and physically dispersed global teams. Fourth, transformational (T) leadership redefines leading by example principles and promotes active leadership. Innovations in this (TASK) framework of management will help make organisations a better place to work together, where team members are encouraged to create knowledge while nurturing their talents and achieving their aspirations for the betterment of the society.
Transformational Leadership
Future management requires leaders and managers to lead by example and reestablish the strong sense of purpose, trust and collaboration. Grant (2012) proposes that transformational leadership is most effective in motivating followers when they interact with the beneficiaries of their work. Transformational leadership is appropriate in the context of globalised markets, where there is increasing diffusion of goods, services, values and technologies globally, which results in the convergence of societies toward a uniform pattern of economic, political and cultural organisation (Sayyadi Ghasabeh, Soosay, & Reaiche, 2015). Therefore transformational leadership evolves beyond leadership trait theory, behavioural theory and situational theory to accomplish the needs of today’s global digital organisations via influence, motivation, individual attention and emphatic stimulation.
Leaders and managers should understand the shared-identity of international teams and ensure clear deliverable commitments from different parts of the global team. Managers should also be aware of the expertise skill set available in various portions of the global team and adequately invest in resources to get the maximum return on investment in the age of fast-paced disruptive innovations.
Adaptability to Manage Diverse and Global Organisations
Managers need to deal with increased competition due to globalisation. Also, managers need to manage diverse, multicultural and physically disperse teams. The Global Leadership Model (GLM) supports the ability of managers and leaders to develop peak performance through the talent and potential of a diverse set of people, organisations and societies (Dunn, Lafferty, & Alford, 2012). Per the GLM, global leaders can produce favourable results across task, relationship, awareness and purpose domains to reach the highest levels of leadership across six multiple bits of intelligence required to manage diverse teams (Dunn, Lafferty, & Alford, 2012). Managers should grow to be Third Culture Individuals (TCI) to understand the shared-identity of global, multicultural teams and ensure clear deliverable commitments from different parts of the global team. The managers of the future must continue to practice the adaptability attributes of agility, openness, autonomy, versatility, nonrigidity, compromise, contingency and amiability (Sushil, 1997). Leaders and managers need to practice complexity theory to adapt to the chaos caused by constant organisation changes.
Stakeholder Management
The drawbacks of economic inequality created by neoliberal capitalism along with the lack of trust, and the perception of lack of purpose in the objectives of corporations call for a need to reemphasize stakeholder management. There is conceptual agreement that managers should proactively address stakeholder interests, yet little has been done to identify which stakeholder interests should be attended to and what managers should do to address them (Berman, Wicks, Kotha, & Jones, 1999). There are five major stakeholders – customers, employees, shareholders, community relations and workplace environment, whose consistent management will ensure purposeful and sustainable performant outcomes for an organisation. Organisations that respect the interest of stakeholders are better able to motivate their employees, business partners and also customers to contribute to the success of the group.
Knowledge Management
Organisations will continue to evolve to be learning organisations. Knowledge created in groups is now a priceless commodity, so are the creators of such knowledge. When the management of the team and employees share the same values, perceptions, and they internalise these values, the relationship between the leader and staff will be healthy (Alrawi, Hamdan, Al-Taie, & Ibrahim, 2013). An organisation’s culture in which the operations factors of knowledge can come to its maximum advantages lays its focus on the stimulation and exploitation of the creativity of its employees (Alrawi et al., 2013). Therefore, future managers and leaders must ensure an environment where knowledge creation and sharing is encouraged. Such an environment can be created by providing trust amongst team members and, reducing hierarchical barriers to communication.
Conclusion
Today’s management practices have outlived in the challenging context of globalisation, digitisation, changing capitalism, knowledge-based economy, constant organisational changes and, disruptive fast-paced innovations. The role of leaders and managers has evolved in the globalisation era. The changes are needed because of the attributes of organisations such as diverse, always changing, physically apart, and culturally different. Managers and leaders have the problem of ensuring their teams and working processes can adapt seamlessly to the growing needs of globalisation and fast-paced production. Managers and leaders can adopt numerous business strategies to cope with fast-paced disruptive innovation, mergers and acquisitions. Managers should communicate the shared-identity of global teams, create forums for encouraging sharing of generated knowledge and invest in identifying and growing team member’s skills. Therefore, future management must adopt the TASK framework and practice the areas of adaptability, improved stakeholder management, knowledge management, and transformational leadership.
Per the TASK framework, management must first focus on practising improved stakeholder (S) management that reemphasizes purpose, trust and community involvement. Second, knowledge (K) management is essential in today’s knowledge-based economy. Third, adaptability (A) is necessary to reduce the rigid hierarchical organisation structure along with the ability to manage diverse, multicultural, multigenerational and physically dispersed global teams. Fourth, transformational (T) leadership redefines leading by example principles and decisive leadership. Practising the TASK framework of management will help make organisations a better place to work together, where team members are encouraged to create knowledge while nurturing their talents and achieving their aspirations for the betterment of the global society.
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