Posted: May 24th, 2022

Analyzing the Practice of Management

FOX Case Study

Analyzing the Practice of Management:

A case study discussion of the Fox Relocation Management Corporation

There is an ancient Greek aphorism, “Know thyself.” Nowhere is this statement truer than in analyzing the role management plays in a company. Every leader of an organization seeks to define his or her role and address the issues of the day as well as those that will inevitably arise. An academic approach to management theory allows for calibrations of structure, culture and client focus that can allow a company to focus. This paper will focus on the Fox Relocation Management Corporation and how its CEO Gretchen Fox directs and organizes the business with the goal of providing a better understanding of management theory.

In Drucker’s pivotal essay “The Practice of Management” the fundamental managerial skill of feedback analysis is held up as a critical commodity. One can see from Gretchen’s progress from a one person business over the past 11 years to her project reaching its current size. Yet while there have been positives there are areas where feedback would have helped. The positive is creating a clearly articulated vision and possessing the skills and the resolve to recruit and develop followers who are committed to carrying out the vision and having the ability to see the bigger picture and maintaining a balance between high level strategies and front line tactics. Yet, Gretchen failed to see the risk of established a centralized organization where power and influence spread out from a key figure. This led to the historical organization no longer being adapted to the continually growing business resulting in a new working structure to answer the challenges the company has to face.

Another major component of Drucker’s analysis is the management of relationships and how these interactions influence the manager. If one argues that the role of manager is socially constructed and by assuming the role it shapes one’s thinking, feeling and acting, Gretchen Fox will experience significant personal changes in her social function in the organization. How she defines herself will influence the culture and people around her, especially in regards to their attachment to the organization, to their work and to others. Understanding, experiencing and feeling in an organizational context allows people to develop multiple forms of attachment. The decision to move towards a less-centralized organizational structure will force employees to be loyal to the company and not to her personally. These changes will be done to enhance the functioning of company personnel and strengthen their dedication, yet how they interact with each other and with Gretchen Fox is a key component of such a change according to Drucker. Drucker emphasizes that change is not to be feard but understood in order for management to help grow and motivate a company. To keep the family culture, the idea is to clone the original cell as much as needed to face the increase in customer’s demands. In order to do so, the self-managed concept might very well be the most accurate answer.

Empowering the employees gives them control and gives their jobs meaning.

When employees are involved in the creation and progress of their operations, they are more interested in their jobs. Also, they are more likely to remain involved and committed to their work. This creates a work environment where the employees know their mission and have a vested interest in its success. Supervisors then have more time to focus on being creative and innovative. The use of self-managed teams’ programs generally improves organizational effectiveness. It can produce greater satisfaction, reduced costs, it help getting closer to customers, have very few layers of managerial bureaucracy, shorter time to answer to market demands as well as faster and better decision-making. In short, the changes being undertaken by Gretchen Fox can be analyzed using Drucker’s framework. It is important that the management and structural changes utilize self-analysis to achieve the best outcome for the company as well as its employees.

One of the classic structures of management theory is to divide executives into Type X and Y style managers. Theory X and Theory Y represent two sets of assumptions about human nature and human behavior that are relevant to the practice of management. Theory X represents a negative view of human nature that assumes individuals generally dislike work, are irresponsible and require close supervision to do their jobs. Theory Y denotes a positive view of human nature and assumes individuals are generally industrious, creative, and able to assume responsibility and exercise self-control in their jobs. All of this theory comes out of the work of Douglas McGregor who in the 1950’s criticized the management theory framework as inadequate for the realities of the workplace. He believed that the assumptions underlying it represented a negative view of human nature and that another approach to management based on an entirely different set of assumptions was needed. McGregor laid out his ideas in his classic 1957 article “The Human Side of Enterprise” and the 1960 book of the same name, in which he introduced what came to be called the new humanism. A further assumption often mistakenly made by management is that workers do not want responsibility and desire explicit direction. Additionally, individuals are assumed to put their individual concerns above that of the organization for which they work and to resist change, valuing security more than other considerations at work. Finally, human beings are assumed to be easily manipulated and controlled. Once these traditional structures are seen to be based on faulty premises, McGregor’s conceptualization of management style is extremely valuable for evaluating management style, employee involvement, and worker motivation. Empirical evidence concerning the validity of Theory X and Theory Y, however, have been mixed. Some writers suggested that organizations implementing Theory Y tended to revert back to Theory X in tough economic times.Others suggested that Theory Y was not always more effective than Theory X, but that the contingencies of each managerial situation determined which of the approaches was more appropriate. So what type of company is Fox Management?

It can be surmised from the materials provided that Gretchen Fox has a Theory X management style. Starting out as a single operator and growing the business, all final decisions are made by her or her inner circle of close family members. Furthermore, the current structure has resulted in employees in the middle layers feeling that they have insufficient input. This has led to dysfunctional competition and jostling for the support of Gretchen Fox. The organization is dependent on the ability and judgment of the central power, which if weak then the organization will struggle. For Fox to continue growing, it needs to adopt new management structure based on employee initiative and self-control. This arthritic decision making style has led the company to its current situation where it is looking to switch over after more than a decade to a more Theory Y style to continue growing. Yet even within this change, there is variability, what must be done is ensure that performance evaluation is established to promote on merit rather than connections or time in the company. Although the conceptual linkages between Theory X and Theory Y assumptions and managerial styles are straightforward, research has not clearly demonstrated that the relationship between these assumptions and managers’ styles of planning, organizing, leading, and controlling is consistent with McGregor’s ideas.

The four major elements of any management process are effectiveness, efficiency, internal control and policy compliance. This entire process must be continuously evaluated and re-evaluated to ensure that a company is always progressing and becoming better. It is clear that Fox Management has not historically employed all 4 elements of this structure. The effectiveness of a process or management style is the extent to which it yields results. Clearly, Fox has been an extremely lucrative company with tremendous expansion from one individual to its current size. One example of the utility of the current structure at least historically is the growth of client projects within such a short period of time. One element where Fox Management has historically been weak is structural efficiency which is common to a quickly growing company. This can be seen in employees describing an ambiguous reporting structure and often sending emails to various superiors with conflicting answers. Fox as it has historically not had much of a self-analyzing structure will need to significantly improve its efficiency as it seeks to expand its size and geographically scale. The third element is internal control, meaning both service quality as well as uniformity of service. This element in the past has been maintained at Fox by keeping the same small cadre of decision makers and clients. With the new business structure, it will be critical in the initial phase that significant self-analysis be conducted to ensure that quality does not change with new personnel, new clients and an evolving business plan. Having defined company roles such as CEO, etc. with clearly defined responsibilities will facilitate designing and implementing effective internal control. Gretchen Fox will transition from day-to-day control to setting the tone that affects integrity and ethics and other factors of a positive control environment. Like in any large company, the chief executive fulfills this duty by providing leadership and direction to senior managers and reviewing the way they’re controlling the business. This will provide a cascading framework of control and management that will improve the current difficulties of the middle section of the company. The last element of management that remains to be seen as Fox transitions away from its old structure is that of policy compliance. One of the most difficult transitions for a company is moving away from a successful plan laid down by a charismatic CEO that has been in place for decades. To do so effectively, employees at all levels of the company will need to buy in to the Theory Y framework which at times requires that to put more effort into their work. In short, for Fox Management to become the company it wants to be in the future significant changes must be undertaken which impact the four elements of management in various ways.

Without a doubt Fox Management uses strategic planning. Strategic planning is a management tool which can help an organization do a better job – to focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization’s direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. Looking at Fox’s plans to implement a new structure in the year’s ahead is an example of strategic planning. The process is strategic because it involves preparing the best way to respond to the circumstances of the organization’s environment, whether or not its circumstances are known in advance; nonprofits often must respond to dynamic and even hostile environments. Being strategic, then, means being clearr bout the organization’s objectives, being aware of the organization’s resources, and incorporating both into being consciously responsive to a dynamic environment. The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to achieving those goals. The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the environment in which the organization will be working in the future. Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are more important than others – and that much of the strategy lies in making the tough decisions about what is most important to achieving organizational success. To look at Fox’s plans for the future and the company it wants to become is to recognize that they are anticipating a future environment. This means that over time, the organization must stay abreast of changes in order to make the best decisions it can at any given point – it must manage, as well as plan, strategically. Strategic planning has also been described as a tool – but it is not a substitute for the exercise of judgment by leadership.

The final issue to be addressed in understanding the management of Gretchen Fox is the use of control. This concept can be understood as the setting of certain standards, measuring their execution and correcting performance when it varies. Setting the proper standards or control limits is a problem in many companies and Fox is no different. Some theorists have proposed that workers be allowed to set their own standards, on the assumption that when people establish their own goals, they are more apt to accept and achieve them. Yet it is apparent that at Fox different employees perform differently as no top down rules have been provided. Standards should be as precise as possible and communicated to all persons concerned. Moreover, communication alone is not sufficient; understanding is necessary especially as a company becomes more decentralized. Fox must establish the proper balance of top down design and regional variation to reach the correct balancing point of control. Yet, There is a danger, however, that we may measure characteristics that do not represent effective performance (as in the case of the speaker who requested that all of the people who could not hear what he was saying should raise their hands), or that improper information may be communicated.

The perfect control system would be outlined if every possible variation of input could be anticipated and if the system would operate as predicted. This kind of planning is neither realistic, economical, nor feasible for most business systems. If it were feasible, planning requirements would be so complex that the system would be out of date before it could be operated. Therefore, we design control into systems. This requires more thought in the systems design but allows more flexibility of operations and makes it possible to operate a system using unpredictable components and undetermined input. Still, the design and effective operation of control are not without problems. The objective of the system is to perform some specified function. The purpose of organizational control is to see that the specified function is achieved; the objective of operational control is to ensure that variations in daily output are maintained within prescribed limits. It is one thing to design a system that contains all of the elements of control, and quite another to make it operate true to the best objectives of design. Operating “in control” or “with plan” does not guarantee optimum performance. For example, the plan may not make the best use of the inputs of materials, energy, or information — in other words, the system may not be designed to operate efficiently. Some of the more typical problems relating to control include the difficulty of measurement, the problem of timing information flow, and the setting of proper standards.

When objectives are not limited to quantitative output as in the case of a consulting firm like Fox Management, the measurement of system effectiveness is difficult to make. Many of the characteristics pertaining to output do not lend themselves to quantitative measurement. This is true particularly when inputs of human energy cannot be related directly to output. Subjective inputs may be transferred into numerical data, but there is always the danger of an incorrect appraisal and transfer, and the danger that the analyst may assume undue confidence in such data after they have been quantified. Quantifying human behavior, despite its extreme difficulty, subjectivity, and imprecision in relation to measuring physical characteristics is the most prevalent and important measurement made in large systems. The behavior of individuals ultimately dictates the success or failure of every man-made system. Fox will need to address all of these issues to establish a workable system of quality control in the years ahead.

To conclude, Fox Management is a company in transition. As it gradually moves away from a Theory X to a Theory Y management style in order to decentralize and expand, it will find itself forced to more clearly defined its organizational structure and implement quality standards and controls. Though a difficult phase, this process will result in a more streamlined and efficient company in the long run that will be better able to handle the challenges of the years ahead.

Resources:

Dean, J. And Bowen, D. 1994. Management theory and total quality. Academy of Management Review. 3(392-418.)

Gomez-Mejia, L., Balkin, D. And Cardy, R. 2008. Management: People, Performance, Change (3rd edition). New York, NY: McGraw Hill.

Johnson, R. 1976. Management, systems and society: an introduction. Pacific Palisades, CA: Goodyear Publishing.

Koontz, H. 1961. The management theory jungle. J of the Academy of Management. 4(3).

Mockler, R. 1970. Readings in Management Control. New York: Appleton-Century-Crofts.

Schermerhorn, J. 2011. Introduction to Management. New York: Wiley.

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