Comparison between Traditional and Modern Management Model in Global Context

3589 words (14 pages) Business Assignment

24th Sep 2020 Business Assignment Reference this

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Introduction

The world economy increasing becomes globalization, which lead to broad mixture of local, national and global markets and organizations, due to different ethic, values and cultures, even both parties speak same language, there still could lead misunderstanding, therefore today’s managers face more challenges, such as understanding the changing trends in the market, how to maintain beneficial interpersonal relationship with employees and clients, concerning  about business ethics and corporate social responsibility surround managerial actions. And the turbulent global environment push managers spend more time crossing borders to conduct business, it is necessary to understand how to communicate effectively with people in different cultures to fulfill the organization’s missions and create values for the stakeholders (Matthews & Thakkar 2012). Traditional top-bottom management model was successful in the 20th century, however managerial hierarchies and traditional approaches may impose heavy costs on the business that would become administrative burden in future. Moreover, business and environmental changes occurred at a slow pace in the past which was easy for managers to deal with, however today’s market changes at a fast rate,  the development of technologies also aggravate market competition, the traditional hierarchical management need a long time to response the market changes, which could not give managers enough freedom to plan and organize their works. Therefore, in order to adapt to ever changing business environment, it is critical to improve the structures of the company and global management approaches, come up with strategies which enable business cope with the changes in the external and internal environments (Strielkowski et al. 2016).

The purpose of this essay is through comparing the differences between traditional organization and modern organization to identify the problems in traditional management model, discuss why traditional management model cannot meet the needs of global business management. In addition, connect with personal working experiences and practices to identify several challenges in Chinese regional organizational culture, explore how to improve global business management, and apply the learnings on personal future career planning.

Comparing traditional management model and modern organization management

Traditional organization management

The structure of traditional organization like the military system, which is hierarchical, organized and discipled. The power flows vertically and upward, the employees are departmentalized and follow a chain of command. Each department has its own rules and regulations, the superior of the department who is responsible to report to the managers. Every employee strictly follows the business strategies, has own job description and accountability to the superior, therefore traditional organization structure is likely fixed and rigid in general (Jahan 2016).

The critical analysis of traditional management model

For the traditional management model, it could be the advantage that structure of the organization is simple to design and operation, it is easy for the employees understand their authority and responsibility. Moreover, due to the chain of command from top level to subordinate level, the employees have fixed responsibility who are responsible to their direct superior, it could reduce the probability of conflict and maintain discipline in a line organization (Chimoriya 2015). However, due to the hierarchy management model was developed in industrial age, the system of decision makers, executives, managers and employees worked well when the companies operated in relative isolation from the rest of world and manufactured physical products. By contrast, today increasing companies become globalization, they not only produce physical products but also sell ideas, which would encounter disadvantages when using traditional management model. Johnston (2016) argued that because the traditional organization has many layers of management, all the people need time to weigh up and coordinate the issues, it would be taken long time to make decision, therefore many managers may feel their opinions is being ignored. Moreover, in terms of interpersonal communication, the message easily get distortion when directives move through a traditional hierarchy organization. Because each supervisor or manger may interpret the words in different way, until the message reach employees, it may be different from the original intention. Furthermore, in terms of manager competence, in traditional management model, the authority is assigned to the position rather than the individual, which require constant check the effectiveness of individuals in various positions to see if they have actual ability to fulfill the job. In addition, the traditional management likely pay more attention to company’s goals and objectives, emphasis increasing sales or profits to please the shareholders, which may lead the company neglect social responsibility and business sustainable development.

Modern organization management

Haque and Rehman (2014) claimed that in order to suit for rapid innovation and growing technology industry, the modern organization management more focus on networking and collaborating, emphasized on dynamic nature of communication and importance of integration of individual and organizational interests, which largely depends on soft skill development such as consensus building, tacit knowledge,  experience, learning, intuition, self-confidence, flexibility, prioritization of problems, working under pressure and ambiguity tolerance ( Griffith & Hoppner 2013).

Comparing two management model

Jahan (2016) highlighted that the main difference between traditional organization and modern organization in several aspects.

  • Stability: Traditional organizations usually are stable in business activities and progress, while modern organizations are more dynamic with multiple business strategy, which need multiple process to deal with constant changes.
  • Flexibility: In traditional organization, its structure is usually fixed, the strategy is planned, and the management is inflexible. While the modern organization, they need always improve the workflow, update its competitive edges, and the employees are required to promote the skills and knowledge to connect with the market and changings.
  • Teamwork: The flow of traditional business is ‘tall hierarchy’, which focus on individual responsibility and obey to his superior, while modern one is ‘flat hierarchy’, which more focus on teamwork and cooperation, its collaborative working mode would more conducive to brainstorming and help the companies improve work efficiency and make marketing strategy.
  • Stimulate morale: Modern organization management enable employees give more freedom and flexibility to fulfill their works, which are beneficial to mobilize enthusiasm of the staffs.
  • Management policy: In traditional business, the management policies are conservative, which usually follow traditional rules and regulation, make static workflow model to maintain business strategy and employee management system. While modern management model would do modification such as rescheduling, flexible entity management, dynamic business strategy.

From above analysis, we can find the context of modern management emphasis on how individual contribute to the organization and corporate performance, the chief executives pay more attention on retaining control of organization, its performance of is decided by the financial returns and share price of the organization. Moreover, the modern organization reflects the principles related to total quality management, such as learning organization, high performance organization and balance score cards, so it could be the challenge to traditional management model (Weymes 2004).

Through the comparing, it is clear traditional management model has its limitations and may not meet the needs of global economic development, in the perspective of modern management, due to the various social, legal, political, technical and economic factors, the effective coordination and cooperation depends on different organizational relationships (Haque & Rehman 2014). With globalization, in modern organization more and more managers are working with colleagues from around the world, the context of global management involves culture environment management, organizational environment management and situational contingencies, to build global management skills, which not only require the managerial competence such as planning, organizing, coordinating, controlling, but also need develop multicultural competence to understand and work effectively across culture (Deng & Gibson 2009), therefore it is necessary to understand the context of global management and improve cross-border effectiveness to accomplish global corporate objectives.

Reflection: The managerial challenges in Chinese organizational culture

Lockett (1988) argued that national and organizational cultures was usually taken as important factors to determine the shape of organizations, as well as their performance and problems. In pratical management, organizational culture is often presented as a matter of values. Tsui et al. (2006) talked about in the time of China’s planned economy, the central government usually developed a national plan, then decomposed into a set of targets and orders for specific organizations. In this kind of institutional framework, state-owned firms took orders from the planning authorities, that make them difficult being an independent decision-making unit different from Western organizational setting. The central plan aims to curb opportunism and allocate resources through bureaucratic control. Therefore, the mission of state-owned firms in planned economy was to fulfill the production quotas and adhere to ‘plan’. Due to the government allocated the resource, control technology and responsible for market sales, that make corporations less concerned about innovation, customers and outcomes. Although after economic reform and opening-up, China has undergone a transition from planned economy to market-oriented economy, many state-owned corporations had been ‘privatized’ and become more efficient to confront the fierce market competition and globalization, some organizations still remain the hierarchy culture and traditional management model, the legacy of tradition may makes them difficult to adopt modern management practices.

After I graduated from Shanghai Theater Academy, I had an internship in Shanghai TV Station, worked as an editor assistant. In order to be in line with international standards and cooperate with other institutions, as a state-owned TV program production and distribution organization, Shanghai TV station have made lots of reformations in management system, but still influenced by traditional management model and Chinese organizational culture. Lockett claimed that Chinese culture is taken as a set of core values that underlie social interaction among Chinese people, according to my observation, there are several main features in the workplace. First, show the respect for age and hierarchical position. Due to influenced by Chinese traditional mainstream culture and Confucianism, Chinese traditional cultural values such as harmony, courtesy, loyalty and filial piety was deeply rooted in people’ practice. And hierarchy organizational structure also reinforces this behavior. In Chinese workplace, the employees prefer to have a single, clear and unified vision, transmitted through a single voice established by the leader, comparing with Western leadership more focus on professional competence which emphasizes the ability to accomplish the task, Chinese leadership more emphasizes seniority and experience, they are willing to through personal integrity to win the trust and respect of the followers. Another feature is group orientation which means the relative importance of group as opposed to individual orientations (Lockett). Comparing Western culture more focus on individual, Chinese culture tend to emphasize on human society. Family management model and collective value play an important role in practice, sometimes that requires employee should scarify personal interests for collective interests in Chinese workplace. Moreover, ‘Face’ is another important feature in social interaction, Ho (cited in Lockett) claimed that the essence of ‘Face’ is the recognition of one’s social standing and position by others. Losing face is more important to a Chinese manager than to a Western one, which means they pay more attention to attain certain position and be recognized by others, while individual recognition through pay may be less important. Furthermore, relationship is another important feature in Chinese organizations. Relationship combines with reciprocity thus lead to ‘guanxi’, which translates best as connections in Chinese term, developing mutual relationship play a major role in practice. Comparing Western organizational management emphasizes on policies, norms and regulations, Chinese management prefer through personal interactions to solve complex issues and problems.

Some problems in Chinese management

Due to Chinese specific organizational culture and traditional management, it may lead to problems in modern management. In many Chinese organizations, inadequate integration of differentiated activities results in decisions tend to be passed between higher levels and organizational hierarchy is overloaded, which lead to duplication of effort and friction between staffs and managers due to unclear responsibility (Lockett). For example, in my work, to plan a TV program, first I  need to consult with and report to my superiors for approval, then discuss with the leader of different departments such as shooting team, production department and coordination department, next the superior of different department can assign works to specific staffs to carry out, the complex workflow make my job inefficient and the information easily cause misunderstanding or communication problems in the transmit process. Moreover, I found different organizational objectives also make challenge to managers. When communicate with other international institutions, different from some foreign TV stations pay more attention to audience’s preference and market orientation, which obviously may make more profit. By contrast, Chinese state-owned corporation likely less focus on external adaption values such as customer orientation and innovation. For example, a main task of Shanghai TV station still focuses on political propaganda. In addition, some Chinese culture such as respect for age and hierarchy also inhibit technical and organizational innovation, that may easily lose competitive edges in market economy. And the organization lack of vitality and competitiveness also may cause employee deficiency of motivation and engagement. Furthermore, Chinese management pays attention to interpersonal relationship such as guanxi, which conflicts with the institutionalization and legalization of modern organization management, that is not conductive to develop corporation social responsibility.

Managerial Application

Denison & Mishra (cited in Tsui et al.2006) claimed that it is a critical way for the companies to integrate internal process and to adapt to external environmental conditions, which contributed to organizational effectiveness, associate with support of firm performance and employee attitudes. Due to the modern workplace is changing and become globalization, the traditional management approach is gradually evolving into collaborative approach that empower employees have more initiative, as a global manager, first, I think it is necessary to develop an open and creative culture in organization (Jartese 2013). O'Reilly and Chatman (cited in Tsui et al.2006) asserted that organizational culture through building strong employee commitment to influence performance and outcomes, the organization with a strong integrated culture will make it easier for its employees to conform with the requirements and express a higher level of commitment to the organization than employees in a hierarchy culture due to shared values among themselves. Second, different from traditional management, as global manger should be a collaborative leader. For example, I will encourage equal participation across all level to develop solutions from the best ideas of the group, and by brainstorming for develop creative ideas to solve problems. Pay more attention to the way of communication with different people with various cultural backgrounds, respect individual culture and customs, avoid stereotyping and generalizations. And in term of resource allocation, different from traditional management which resource allocation is usually reactive, employee must be approved by upper managers before deployment. Collaborative leader creates a collaborative environment based on trust, resource could be delivered proactively, through providing resources and allocating time quickly, that enable employees promote work efficiency. In addition, as a global manager, it is important to understand the type of organization I work with, find the solutions to deal with different work environment and implication of these solutions for management practice. Through understanding the mission and values to help develop organization’s initial strategy and consider interests of different stakeholders such as investors, customers and employees, pay attention to business ethics, in order to promote business sustainable development.

Conclusion

The essay through comparing traditional and modern management model in global context and identify the problems in Chinese management practice to reflect the importance of global management. As a global manager it is necessary to understand different culture norms and cross culture boundary to cooperate with teams that based on different places, through build mutual trust and strong commitment with team members to help organization to face the challenges of global business environment.

 References

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