Turning the Organizational Pyramid Upside Down

Answer all of the following questions.

In Chapter 7, the case study provided information about how the participative management style produced improved responsiveness to customers’ needs, increased accountability, and more innovative resolutions to business situations than the hierarchical “command and control” structure. Do you agree or disagree? Explain. Use examples outside of the textbook.
Discuss the events leading to UGG/AU becoming leaders in implementing in ERM.
Discuss a specific organization or process that responds better to hierarchical “command and control” structure. Explain the reasons for your example. (Do not use GM or the case study to answer this question.)
Required:

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ANSWER

Turning the Organizational Pyramid Upside Down

Participative Management Style

The participative management style entails all members of the organization working together to make decisions. The participative management style has been an effective leadership style for managers interested in the contribution of the whole team, especially in decision making (Swearingen, 2017). In this form of management, the leader shares all the vital information and allows the members to share ideas about how they can solve their problems. The leaders make the best decision based on the ideas and information presented. The participative management style has been successful in organizations that require little oversight and management. The leaders employ a democratic approach to the engagement of the workforce. I agree with the information about how the participative management style produces improved responsiveness to clients’ needs, more innovative resolutions, and increased accountability than the hierarchical command and control structure.

Ideally, the command and control structure does not encourage the team to share ideas and collaborate through the vertical lines of the management structure. It limits the flexibility of employees, thus preventing sharing of ideas which results in limited innovativeness and responsiveness. Innovation and creativity are two significant benefits of participative management. By allowing the employee teams to have input into decisions, the organizations benefit from the value brought about by the wide choice of options. When all the executives and employees are given a chance to participate in decision-making, there is a high chance that a unique and valid idea will be suggested. British Airways has been good in participative management style. For instance, during the economic downsizing, employees offered suggestions on cutting annual operation costs. The cooperation of personnel within the organization has played a major role in decision-making and innovative ideas that boost development and success.

Events leading to UGG/AU becoming leaders in implementing ERM

Enterprise risk management entails recognizing and strategically addressing the potential events that lead risks to the achievement of strategic objectives and opportunities to build a competitive advantage. With the high capital demands of grain handling infrastructure, the levels of working capital and associated risk in the credit program increased. After the concept of the ERM process was developed, UGG started by assessing and identifying its principal risks (Niehaus, 2017). UGG focused on a quantitative understanding of the potential range of cash flow and earnings derived from ERM, which enabled the company to model a complete range of possible financial outcomes. This offered an analytical tool where the company could identify its requirements for contingent capital with more accuracy.

The company gained a better tool for judging their performance against their plan through assessing the variable conditions such as the improved capacity to respond to changing conditions and an infinitely flexible budget that might have great financial implications. ERM enabled UGG to bring a more disciplined and consistent treatment of risk exposures across the organization (Niehaus, 2017). They were in a better position of resource allocation to ensure that the risks within varying activities and divisions of the company were not undermanaged or over-managed relative to the corporation’s level of risk tolerance.

Team-Based Organizational Structure

The team-based organizational structure would respond better to hierarchical command and control structure. The team-based organizational structure comprises teams that work towards a common goal. They are the more flexible and less hierarchical structure that reinforces decision-making, problem-solving, and teamwork. Ideally, in team-based structures, the employees are put into groups tasked with a project (Wheelan, Åkerlund, and Jacobsson, 2020). The team members support one another and make their decisions based on their expertise to change policies, processes, and procedures. This structure requires less management and minimal overhead since the team members share the leadership and are more fluid than the hierarchical command and control structure.

References

Niehaus, G. (2017). Enterprise risk management and the risk management process. The Palgrave Handbook of Unconventional Risk Transfer (pp. 109-142). Palgrave Macmillan, Cham.

Swearingen, M. H. (2017). Participative management: An analysis of its effect on productivity. Routledge.

Wheelan, S. A., Åkerlund, M., & Jacobsson, C. (2020). Creating effective teams: A guide for members and leaders. Sage Publications.