The Various Challenges face by the Management of Today and that of the Future

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As the twenty first century approaches, the complexity of managerial environment would require a complete overhaul of management functions, roles and skills in order to successfully meet the challenges that such complexity will pose. Elizabeth Kanter has suggested five key elements that are expected to be an integral part of the change process. These are:

1. Greater number and variety of channels for taking action and exerting influence.

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2. Relationships shifting from the vertical to horizontal, from chain of command to peer network.

3. The distinction between emanagers and those managed is diminishing.

4. External relationships are increasingly important as sources of internal power and influence.

5. Career development is less intelligible.

The most important ways in which the application of managerial functions is expected to change may include the following:

The employee participation in the decision making process will increase. Employees will be encouraged to form their own teams and operate more independently in terms of their efforts in planning, organizing, leading and controlling.

The employees will be encouraged to participate in goal setting within the general framework of organizational mission. There will be increased delegation of authority. Middle management layers may be eliminated.

The leading function will be less of a power play and will be more of assisting, facilitating and encouraging. The controlling function will be less rigid and there will be increased emphasis on self control. If everyone knows what he has to do and does it well, the controlling function becomes less significant.

The last decade has been a witness to changes that can be considered as revolutionary rather than evolutionary. Collapse of the Soviet Union, other political changes in Eastern Europe, advent of powerful computers affecting the information technology, telecommunications technology, economic changes in India and China, phenomenal growth of multinational and transnational companies, have all posed serious threats and opportunities for the managers of today. Change is a challenge to status quo and it does add to complexity. However, managers must adapt to change so that they will be able to “thrive on chaos”.

Some of the challenges facing the management of tomorrow are.

1. Internationalization of business:

The world has truly become a global village. Even though the national boundaries remain, the economic boundaries are fast disappearing. Three regions are emerging as centres of economic power.

The Western European countries have joined together to form an economic zone, known as European Economic Community (EEC) where there will be no boundaries for free flow of capital and goods.

The Euro-dollar is expected to become a common currency. With the fall of Communism, some Eastern European countries may also join this common market. Then, there is an economic bondage among United States, Canada and Mexico in the form of North American Free Trade Agreement (NAFTA), creating a free trade zone among them. Some other South America countries may also become a party to this agreement.

Countries of Pacific Rim, led by Japan have already exhibited considerable economic influence in the global market. India and China are expecting to be the economic giants of tomorrow.

Accordingly, managers are no longer confined to myopic thinking of serving the domestic market only. They must develop and maintain a global perspective. They must learn to cope with the challenge of learning to operate in diverse cultural settings.

2. Transition from an industrial to a knowledge based society:

Knowledge is the most powerful strategic tool of successful organizations. Knowledge of changing technology assists in creating new products, processes or services. Knowledge about customers can also give an organization a competitive edge. Industrial economies will be more and more dominated by computers and robotics so that more skilled labour will be required for service-dominated economy.

Accordingly, knowledge about all aspects of environment at an international level will become very crucial, for survival and growth of the company and the skilled labour will have to be knowledge based to be innovative to meet the challenge of competition.

3. Technological changes:

Changes in technology in practically all industries have been dynamic and managers must be prepared to adapt to these changes and be innovative to maintain their strategic advantage.

New technological developments such as cellular phones, laptop computers, satellite communications, and electronic networks for on-line communication, fax machines, robotics, computer-aided designs and computer-aided manufacturing have been instrumental in improvements in product technology, process technology and information technology.

These and other fast and explosive technological developments have posed strong challenges for the managers of the future and by understanding how to create and apply new technology, managers can formulate winning business strategies.

4. Diversity in the work force:

As the international economy increases competitive pressures, the organizations must draw on the skills of the workers irrespective of their race, culture, creed or sex. The demography of the work force is changing and will continue to change. A high percentage of work force of the future in America will consist of women and ethnic minorities.

It is expected that by the year 2005, half of all labour force entrants will be women and more than one-third will be Hispanics and African Americans. Management will have to face the challenge of bringing the people of different backgrounds, cultures and values into cohesive work teams.

India is also becoming a more mobile country where workers from Punjab are employed in textile mills of Gujarat and Bengalis are employed in the power plants of Madhya Pradesh. More and more women are joining the work force. Management is learning to cope with different cultural values of workers from various provinces within the country.

Managing diversity means enabling a heterogeneous work force to perform to its potential in an equitable work environment where no one group or individual has an unfair advantage or disadvantage.

5. Ethics and social responsibility:

Ethics are more personal in nature and are primarily formed by cultural, religious and family influences. They provide the insight for differentiating between what is right and what is wrong in terms of standards set by the person himself and by society. Social responsibility refers to the obligations of the organization to protect and/or enhance the society in which it functions.

A senior minister of Indian Government, for example, once visited New York on official business. He travelled by Air India in Business Class. On his return trip, he was informed by Air India officials that he was being upgraded to First Class. This was customary for all cabinet ministers. However, this minister refused the upgrade on grounds of personal ethics. (This incident is known to the author).

Similarly, a major defence contractor in America, Martin Marietta Company was due to file a bid on a lucrative government bid. Two days before the due date, the president of the company received an anonymous package which contained the bid of one of its competitors which was lower than its own.

In the light of this information, the president could have changed his company’s bid to a lower value. But he did not. The information was turned over to the government instead. The company lost the bid but the president felt that it was more important for the company to be ethically and socially responsible than the financial benefits in the short run.

The increasing competition for global resources and markets in the coming years will severely test the social and ethical integrity of the management. To cope with different cultural values and to some degree different ethical concepts will be highly challenging to the management of the future. For example, bribery in some countries may be considered highly unethical while in other countries it may be socially acceptable and a way of doing business.

6. Vision:

Managers of tomorrow may not only basically be doers but also be thinkers and visionaries. They must anticipate the world of future and be fully prepared to meet it. They should also contribute in making the world of future and position their organizations in strategically significant spots in such a world.

For example, Fred Smith, founder and CEO (Chief Executive Officer) of Federal Express looked beyond today and saw “what could be” and in doing so changed the world of courier service. IBM got into financial difficulties because it was less visionary about the increased customer demand for personal computers and the transition from main frame computers to lap top computers.


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