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n any organization, management and leadership comes with a certain level of power. There are five main types of power in business: coercive, expert, legitimate, referent and reward. Many leaders use just one type of power, but the most effective way to use these powers is to implement a balanced combination of the positive types.

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In any organization, management and leadership comes with a certain level of power. There are five main types of power in business: coercive, expert, legitimate, referent and reward. Many leaders use just one type of power, but the most effective way to use these powers is to implement a balanced combination of the positive types.

Coercive

Coercive power is gained through the fear of employees. A coercive leader uses threats and punishments to coerce his employees to carry out tasks. The type of threats a coercive leader uses includes demotion, denied privileges, poor performance reviews, and termination. While coercive power may be effective, at least temporarily, this type of power is typically unhealthy and inappropriate. It commonly results in fearful staff, an uncomfortable work environment, low morale, and high employee turnover rates.

Expert

Expert power is gained through a leader's particular knowledge, experience and skills. An expert leader uses her expertise, credibility, decisiveness and confidence to solve challenging problems, help employees stay on track with tasks, and lead employees to success. Expert power is beneficial for building a positive reputation, regardless of title or position in the company. Credibility is an important part of expert power, and employees will not follow an expert leader who doesn't have it.

Legitimate

Legitimate power is gained by holding a place of power in the organization. A legitimate leader uses his position in the organizational structure and social hierarchy to convince others of his right to lead and control. While legitimate power is effective, this type of power is more of an illusion, as employees will only follow the legitimate leader while he is in a powerful position. The power is not with the individual, but with the position he holds.

Referent

Referent power is gained by trust, respect, admiration, charm and appeal. A referent leader is extremely likeable and is a type of celebrity within the organization. This type of leader uses her celebrity to influence employees in whatever way she wants. Referent power is somewhat unstable; the power is dependent on the personal feelings of employees and how an employee identifies with the leader. These feelings are subject to change, causing the power to be taken away quickly.

Reward

Reward power is gained by the ability to reward favorable work. A rewarding leader uses his ability to reward employees to encourage the completion of tasks. A rewarding leader not only rewards through gifts, but also by privately or publically praising employees for successful work. While reward power is effective and positive, rewarding leaders face the obstacle of not being able to use rewards long-term. The rewards also must meet the expectation of the employee or the power eventually fades.

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In any organization, management and leadership comes with a certain level of power. There are five main types of power in business: coercive, expert, legitimate, referent and reward. Many leaders use just one type of power, but the most effective way to use these powers is to implement a balanced combination of the positive types.

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The key to an effective workplace employee motivation strategy is to provide a range of incentives that will appeal to different personalities. While one individual may be highly money motivated another may find job satisfaction or creative opportunities as more powerful factors.

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Untitled Document

Many employees have different motivations for coming to work and doing a good job, and it's up to you to get the most out of all of them. One of the most obvious motivational strategies is of course money, whether in the form of pay increases or bonuses.

However, these may be neither necessary - nor always the best type of reward. Once offered, cash bonuses can come to be expected and quickly forgotten, especially if they are the only recognition employees receive.

On a teamwork basis
Frequent, positive feedback provided within an enjoyable team-oriented environment, makes a tremendous difference in employees' sense of being valued. With or without financial rewards, these cultural aspects of the workplace make an excellent morale raising investment in your staff and business.

This applies even in a strictly goal driven environment such as sales or investment banking. Strive to maintain an enjoyable, family-orientated atmosphere in which all employees focus on achieving team goals.

Recognise and reward good work
Praising employees for achieving their goals is important in maintaining an enjoyable work environment. Appreciation can range from positive feedback to small rewards and tokens.

A policy of recognising and rewarding success helps to inspire employees to work toward achievements. Staff will know that their contributions are valued and that management is confident in their capabilities.

Such a policy also inspires greater creativity and initiative by providing freedom to think outside of the box and know that it will be acknowledged. One way to further stimulate employees' creativity and confidence is to support continual education through classes, seminars, subscriptions and memberships.

If the strategy is unsuccessful
While encouraging creativity and rewarding success may come somewhat easily, it may be more difficult to spot why it isn't working.

Some of the signs are:

Reluctance to share ideas

A drop in productivity

Increase in absenteeism

Persistent low morale

In all of these cases positive reinforcement is even more critical. You might even invite your own employees to work out a better way of achieving a motivational strategy. In this case, employees will feel further inspired and trusted.

The financial incentive
Monetary incentives and rewards can be part of your employee recognition program - but these still need to fit within the right culture. Direct reward for certain levels of success can actually lead to lack of cohesiveness and teamwork - especially if others feel they are missing out.

In addition to direct cash bonuses, overall profit-sharing plans or share options are also a way of rewarding and retaining staff. The advantage here is that the financial benefits are measurable and objective.

Financial incentives and rewards can be true motivators, but only when combined with ongoing verbal recognition and support.

Be responsible for a motivated workforce
Whether it is a football team, or a trading floor - motivation is the responsibility of management

The key to an effective workplace employee motivation strategy is to provide a range of incentives that will appeal to different personalities. While one individual may be highly money motivated another may find job satisfaction or creative opportunities as more powerful factors.

As a general rule excessive competition destroys morale. When teams work towards a shared goal they become more motivated. Perceived inequality of treatment leads to resentment, low morale and lack of self-motivation. More time is spent at work than anywhere else, so creating a professional, positive, social environment which people enjoy coming to everyday will make an encouraging difference to the workplace.

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What are the main employee motivation strategies? | Monster.co.uk

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Untitled Document Many employees have different motivations for coming to work and doing a good job, and it's up to you to get the most out of all of them. One of the most obvious motivational strategies is of course money, whether in the form of pay increases or bonuses.

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The Human Resources department of an organization works for the organization and will always do what is in the best interest of the organization. If an employee goes up against Human Resources, they are going to do whatever it takes to protect the integrity of the organization.  The main purposes of Human Resources are: Recruiting, Selection, Training and Performance appraisal.

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Organization Management Culture- Module 5

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Organization Management Culture- Module 5

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Understanding organizational structure can help employees and supervisors understand their place in the organization.  What type of structure is better depends on the type of organization and the people within the organization.  The culture of an organization is not something that is written down when the organization is founded but created over time and is often thought of as the organization's facade. Organizations almost always have these things in common: adaptability, involvement, and a clear mission.  Cultures can change when new management and/or leadership is brought in, but often it is deeply entrenched in the organization.

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When leading employees, one is remember that you are one of them. You are no different when achieving the desired goal. You are simply leading the pack to the end result.

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Risks of International Business- Module 3

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Risks of International Business- Module 3

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While most people think the biggest risk for doing international business is the economy, according to the WEF, the says that interstate conflict, extreme weather events, failure of national governance, state collapse or crisis, unemployment or underemployment are the five biggest risks for global business. Speaking of failure of national governance, France is in a bit of a political discourse as they are int he middle of an election for a new president. Now the country is not failing in their government, but there is much tension between the two candidates and with the citizens themselves.

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Financial and economic crises are no longer the world's biggest threats. In 2015, geopolitical tensions and societal instability dominate the World Economic Forum's list of top global risks.

Multinational companies especially are likely to factor the shift in the global risk landscape into their forecasts, annual operational objectives, and strategic plans, said Jim Traut, CPA, CGMA, an enterprise risk management consultant and president of Traut Consulting.

As former head of enterprise risk management at a Fortune 100 company, Traut regularly distilled the WEF's annual list of top global risks into a briefing for the multinational's board of directors. Boiling down the 2015 list in a similar way, Traut zeroed in on how he sees the changes affecting business.

"In 2008 and 2009, the world was unified; certainly the central banks [were]; everybody was working together," Traut said. "Now, it feels like a lot of individual countries. [The US] is doing what we want to do. The Canadians are doing what they want to do. The Russians do what they want to do. It's worth thinking about [enterprise risk management] from the level of instability that's out there."

The global risk landscape the WEF lays out for 2015 shows interstate conflict as the most likely global risk and also one of the five risks with the biggest potential impact. The four other most likely global risks are:

Extreme weather events.

Failure of national governance.

State collapse or crisis.

Unemployment or underemployment.

Except for water crises, which the WEF determined is the global risk with the biggest impact, much of what threatens the world most in 2015 could trigger central bank policies specific to individual countries, Traut said. For multinationals with international supply chains, he said, that means fluctuating costs of currencies is a big risk.
Case in point: the Russian rouble
Renewed fighting between pro-Russian rebels and Ukrainian military forces in eastern Ukraine ended a cease fire and prompted NATO ambassadors to meet. The long-simmering interstate conflict flared up at a time when falling crude prices had already helped lower the sovereign credit rating of Russia, a country heavily dependent on oil and gas exports and vulnerable to energy price shocks, the WEF's sixth biggest risk by impact this year.

Russia's central bank recently changed regulations and decided to use lenders' credit scores and securities from before March 1st 2014, a date that precedes Russia's incursion into formerly Ukrainian Crimea. That regulatory change made it easier for Russian lenders to meet capital requirements when Standard & Poor's downgraded Russia's sovereign credit rating to below investment grade. Still, the rouble fluctuated heavily following the downgrade.

Considering that the euro has been dropping in value and the US dollar has been getting stronger, Traut said, "if you're an international company, you've got to be thinking [whether you are] sourcing in roubles, [US] dollars, [British] pounds, or euros." The decision could mean significant changes in the cost to manufacture, he added.
Six ways to manage potential threats
Several of the WEF's top global risks, which leaders from business, academia, and politics helped establish, overlap with the highest global concerns executives voiced in a 2014 WEF survey.

Fiscal crises in key economies topped the list of highest concerns for doing business, followed by failure of a major financial mechanism or institution. The effects of an oil price shock on the global economy ranked third. Liquidity crises came in fourth, and profound political and social instability was fifth.

To manage potential threats, companies worldwide use the WEF information to:

Develop scenarios.

Prepare crisis exercises.

Assess vulnerabilities and their potential for cascade effects.

Inform "sense-making" exercises in crisis situations.

Train top decision-makers.

Model risk external to the direct business environment.

Related CGMA Magazine content:
" Five Likely Threats That Should Keep Global Leaders Up at Night ": Threats that were keeping top experts and high-level leaders up at night in 2013 were the risks that are beyond any one company or even one nation to handle. A report from the 2013 World Economic Forum listed the most likely threats with the biggest damage potential.

" Five Ways to More Effectively Manage Supply-Chain Risk ": Most companies consider managing supply-chain risks important, but that doesn't mean they're all good at it. Here are five ways to boost your company's supply-chain risk management.

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Financial and economic crises are no longer the world's biggest threats. In 2015, geopolitical tensions and societal instability dominate the World Economic Forum's list of top global risks. Multinational companies especially are likely to factor the shift in the global risk landscape into their forecasts, annual operational objectives, and strategic plans, said Jim Traut, CPA, CGMA, an enterprise risk management consultant and president of Traut Consulting.

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In the business world, the rule of ethics is like a two-way street. You either make the right decision that benefits the company. Or make a wrong decision that destroys the reputation/ integrity of the company name. Everyone in the business world knows of the Enron scandal that lasted about 12 years. One bad seed planted creates a field of rotten potential, which is exactly what Enron was; a huge corporation flies and scandal. They put the company's integrity along with stockholders money in a giant shredder after the first tip of their lying hat.

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This pictures depicts the functions of management perfectly. It shows how one function leads into another. You cannot be an efficient and/or effective manager without all of these things. One cannot be an effective and/or efficient manager if they believe that they skip a function. One must follow the steps of the functions to be a successful manager.

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As the picture states, data is just the facts as they are, whereas information gives meaning to the data. One, like myself, just think that data and information are more like the chicken and the egg scenario. They seem like one-in-the-same, but if you really do think about it; you need information to tell you what the data actually is.

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Production management deals with manufacturing of products like (computer, car, etc) while operations management cover both products and services. Production and operations management are difference in the sense of output, usage of output, classification of work, and customer contact.  Also the strategic management process for the two contrast each other by their competitive analysis, goal setting, strategy formulation, and implementation.

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Production and Operations Management - Meaning and Important Concepts

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Production and operations management talks about applying business organization and management concepts in creation of goods and services.

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In a real sense, the pyramid goes Leader, then Manager, and then Subordinate. A leader sees a vision, makes the plan, then hands it off to the manager to accomplish with the subordinates. Managing is about power and control, whereas leading sees the people and focuses on the long-term goals. Even though both roles want to accomplish the goal, leaders want more teamwork, whereas managers want to just get the job done as quickly and efficiently as possible.

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In high school I managed my football and gymnastics teams. In that role, I encouraged, supported, guided, and directed my fellow teammates. I never told them what to do , I merely supported when they unsure of themselves, and guided them to try something new or assisted them when trying something new. The office manager at my work doesn't step into her role until upper management needs her to interview an applicant or when the owners are out of the office and a client asks to speak to a manger. She is just a regular agent until the owners need her to fill the role of office manager.  Realistically, management is all about the control and regulation of resources. A leader is good at handling the tangible and intangible needs of the people under their charge.

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What's the difference of management vs leadership?

People sometimes use the terms management and leadership interchangeably, without paying attention to the important differences between them. While managers are often in a leadership role, they may not necessarily go about their jobs as a leader (even if it would be better if they did).

Some leaders are not responsible for managing staff, but instead charged with creating and maintaining a shared vision and motivation amongst a team.

While the difference might be subtle, if we take some time to think about what it means to manage, and what it means to lead, the insight can help us do a better job of both. Let's look to how the differences of management vs leadership:

Managing:

Webster's, useful book that it is, defines management as "the act or manner of managing; handling, direction, or control." Realistically, management is all about the control and regulation of resources. Sometimes those resources fall in the politically correct (and slightly troubling) category of "Human Capital"

"Human capital", also known as people, is the real realm of the leader. The leader is good at handling the tangible and intangible needs of the people under their charge. The manager is tasked with making sure that the all the groups resources, including the people, get the job done. In management vs leadership, the manager is more directly charged with getting the job done, rather than seeing to the team on the whole.

As you can see, leaders can often be managers, but some managers forget to be leaders by minding the well-being and development of their team. The key to management vs leadership is being aware of the more abstract elements of leading people.

Making the step to leadership:

Of course, it's not impossible for a manager to become a leader. The differences of management vs leadership are subtle. Sometimes it just takes being aware of what they need to do to fulfill their responsibilities as a leader. Managers can become effective leaders by keeping the following people-oriented tasks on their radar:

Morale: Being aware of your teams morale (and staying active in keeping it high) is one of the defining traits of a leadership. Working toward good morale will move you solidly in the direction of being leader.

Empowerment: Making an investment in the tools for your team to get their job down isn't just good project management; it shows a respect and a concern for them as individuals. Making it easier for your team to do their job helps motivate them and keep things running smoothly.

Scheduling: As a manager you have responsibility over timelines, but the awareness of how the affect the human element is the mark of a leader. Managers can easily see milestones and deadlines; leaders have to worry about the intangibles of how those deadlines affect teams.

Team-building: Working to build a team with people who not only work effectively on their own, but together, is one of the greatest assets of a leader. By focusing each person's strengths, and mitigating their weaknesses, the leader can get much more out of the team.

Sense of Fit: For teams to be very effective, every member of the group needs to feel as if they have a role to fulfill that matches their interests. By providing that fit between the needs of the team and the skills of the individual, everyone performs up to their potential. Additionally, showing them how their skills contribute to group success makes bring pride in what they can provide, making them more likely to shine.

How to make the jump from manager to leader:

Sometimes we get promoted into the responsibility of leadership and we never really signed up for it. That's OK though, because so long as we keep aware of what we need to do, and constantly strive to improve, the jump to leadership isn't hard. Remember the differences of management vs leadership and look at these steps:

Steps to take:

Assess your role: The more aware you are of what you are trying to achieve, the more you will orient yourself towards achieving it. The constant reinforcement can help keep you on track.

Consider the environment: In the same way that it helps to know yourself, it also helps to be aware of the environment you are trying to work in. Remember what can cause problems and what can be of help, and then play to those rules.

Make an inventory of your strengths and weaknesses: Being honest with ourselves helps make it possible to play to our strengths and mitigate weaknesses. By keeping very aware of our talents and our goals, we can combine them successfully.

Develop a long term plan: A series of short-term, attainable goals make progress easier. By knowing what you are trying to achieve, we have a much easier time making progress and doing the best thing to get to where we want to go. Without a definite plan, we can end up wandering without direction, wasting opportunities to grow.

Use your plan to evaluate your actions: We make decisions out of habit, instinct and practice. That works great if we are content with the way we solve problems now, but if we are trying to change, we need to be intentional about what we do. Using your awareness of what you want to be, and what your strengths and weaknesses are (see above), you can decide what course of action reflects the leader you want to be, and you can act accordingly. The key is to run through that list mentally every time you confront a problem. Consider the definition of what it means to be an active leader, and determine whether you are fulfilling them or not. That quick meditation can keep you on target until leadership skills become habit.

If you're interested in learning more about leadership, please sign up for our newsletter!
Move away from management vs leadership, and do them both by learning to lead effectively with these leadership styles

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Leadership Toolbox: Management vs Leadership

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People sometimes use the terms management and leadership interchangeably, without paying attention to the important differences between them. While managers are often in a leadership role, they may not necessarily go about their jobs as a leader (even if it would be better if they did).

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Formal and informal groups relate to my job. By working at an insurance agency, which is different than an insurance company being that we contract through insurance companies to bring them the business. We do all lines of insurance, meaning commercial, personal, health, life, disability, professional E&O, etc. Our office is divided by commercial and personal insurance. Those divisions are formal groups, whereas the commercial lines, personal lines, upper management, and accounting work with me in an informal group, as I work on different projects with them. I personally like working in an informal group because they come to me when they have a project that they need assistance on. Management never sets me up with anybody. Each individual comes to me when needed.

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From a organizational point of view, there are basically two types of groups. These are formal groups and informal groups.

Formal Groups

An group is formal when it is purposely designed to accomplish an organizational objective or task. It is created via formal authority for some defined purpose.

A formal group can be a command group or a functional group that is relatively permanent is composed of managers and their subordinates who meet regularly to discuss general and specific ideas to improve product or service.

The formal groups usually work under a single supervisor, even though the structure of these groups may vary. For example, in one form of group such as in production, the members of the work group depend on each other as well as on the supervisor and in another form of group, such as sales force, the members of the group work fairly independently and their common contact may be the district sales manager.

Other types of formal groups include task forces and committees. The task forces are temporary in nature and are set up for some special projects. The committees can be permanent, such as a planning committee, a finance committee or a budget committee and may become an integral part of the organizational structure.

A committee can also be temporary such as a special task force that is set up for a particular purpose and is then disbanded when the purpose is achieved. For example, the committee to reelect the President is temporary in nature and is disbanded after the election.

Informal Groups

Whereas formal groups are established by organizations to achieve some specific objectives, informal groups are formed by the members of such groups by themselves. They emerge naturally, in response to the common interests of organizational members. They are formed spontaneously, without any formal designation, and with common interests such as self-defense, work assistance and social interaction.

They exist outside the formal authority system and without any set rigid rules. Though officially unrecognized, they exist in the shadow of the formal structure as a network of personal and social relations that must be understood and respected by the management.

Informal work groups are based upon socio-psychological support and reasoning and depend upon member's interaction, communication, personal likings and dislikings and social contacts within as well as outside the organization. How powerful these informal groups can be seen from the fact that if one member of the group is fired, sometimes all workers go on strike in support of that member of the group.

The bonds between members are very strong and bring in a sense of belonging and togetherness. This togetherness can have a powerful influence on productivity and job satisfaction, since employees motivate each other and share each others burden by training those who are new and by looking up to old timers for guidance, advice and assistance.

Informal groups may have their own leaders and followers, group goals, social roles and working patterns. They have their own unwritten rules and a code of conduct that every member implicitly accepts.

The leadership of the informal groups develops from within rather than a formal election. An individual, who is working in a group for a long time and has a good rapport with other members, may emerge as a leader due to his technical expertise and his seniority. For any problem within the group, either technical or social, the members would go to this leader rather than the formally assigned supervisor.

Some other aspects of Informal Groups are as follows:

Group Norms: Parallel to performance and other standards established by the formal organizational structure, the informal groups have their own norms as rules of conduct and a standard of behavior that is expected of all members.

Groups Roles: There is an unwritten assignment within the group as to which task will be done by whom and under what conditions. Some job roles are assigned by the management by matching the job description with the person's qualifications and some other roles develop within the group. For example, some members may informally be technical advisors to others as to how to do the job better and others may act as arbitrators in social problems or other differences that may arise among members.

Group Goals: The goal of the informal group, whether it be profitability that conflicts with the organizational goals or customer service which is in accord, heavily influences productivity. It is necessary to integrate the group goals with the organizational goals for the purpose of improvement and success.

Leadership: The informal leader emerges from the group either because of his personal charisma, his social status or his technical expertise. He is not formally elected but is accepted in the minds and hearts of the workers. These leaders influence the behavior of others and remain leaders as long as they are sincere to the group interests.

Group Cohesiveness: Cohesiveness refers to the degree and strength of interpersonal attraction among members of the group. High degree of cohesion is highly motivating in achieving the group goals. Members help each other and support each other. The degree of cohesiveness depends upon the commonness of the perceived group goal, the size of the group and the ability of the group leader to facilitate cohesion. Group cohesion also has synergetic effects where, together they produce much more by the collective efforts than the sum product of the individual efforts.

Informal groups are powerful instruments in all organizations and sometimes can make a difference between success and failure. A cooperative group makes supervision easier, thus lengthening the effective span of management. The group is also there to make sure that the basic principles of the formal organization are not violated.

For example, if a manager misuses his authority and promotes an unqualified person, the informal group may use its influence in making sure that it does not happen. The informal group also serves as an additional channel of communication to the management about conditions of work when such information may not be available through official channels.

One problem with an informal group is that it is primarily centered towards human elements, that can be highly unpredictable affecting the smooth operations of the organization. Due to rules and procedures being unwritten, they can change from situation to situation. Also the informal group can be considered subversive in nature if their goals conflict with the forma! organizational goals.

In such situations, managers often view them with doubt and suspicion. They tend to see informal groups as potentially harmful to the formal organization. For that reason, some managers seek the support of informal groups and their leaders in order to reduce such a threat. They tend to view such informal groups as valid, stable, and structurally sound and hence show consideration and respect for their existence and their views.

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Types of Groups (Formal and Informal) | Management Study HQ

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From a organizational point of view, there are basically two types of groups. These are formal groups and informal groups. An group is formal when it is purposely designed to accomplish an organizational objective or task. It is created via formal authority for some defined purpose.

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This article breaks down the "ins and outs" of informal communication. What I seem to forget is the difference between informal, formal, verbal, and non-verbal communication. Informal communication is communicating through instant messaging, email, etc. While informal and non-verbal communication seem to be one-in-the-same, non-verbal is more of gestures, tone of voice, more literal non-verbal communication. Whereas informal communication is that of communicating, just not face-to-face. Informal communication, such as email, is becoming more popular so to have a paper trail to be able to go back to should the need arise.

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Informal communication refers to interchange of TOOLKIT-5 information unofficially. This communication is based on informal relations (like friendship, membership of the same club, the same place of birth, etc.) and, therefore, is free from all the organisational formalities.

The exchange of informal messages usually takes place on the occasion of community meals, social occasions, parties, etc. On such occasions, the superiors gather such information from their subordinates as may be difficult to get through formal communication. Such communication includes comments, suggestions, etc.

Under this, communication takes place through gesticulation, moving of head, smiling and by remaining quiet. For example, a superior wants to complain against his subordinate to his higher officer and at the same time he is afraid of giving it in writing. This can be conveyed to the higher officer through informal communication, say during the course of a conversation.

Informal communication is also called grapevine communication because there is no definite channel of communication. Under it some information passes through many individuals and covers a long distance making its origin obscure. This is exactly like a grapevine where it is difficult to find the beginning and the end.
Characteristics Informal or grapevine communication has the following characteristics: (1) Formation through Social Relations:
This communication is born out of social relations who mean that it is beyond the restrictions of the organisation. No superior-subordinate relationship figures therein. A more sociable superior can gather much information through this channel.

(2) Two types of Information:

Through this communication, information about the work and the individual can be collected.

Since it is beyond the restrictions of the organisation, it follows no definite channel. Like a grapevine, it moves in a zigzag manner.

(4) Possibility of Rumour and Distortion:

Responsibility for the true or false nature of communication does not lie on any individual and, therefore, not much attention is paid to its meaning while communicating. Consequently, the rumours keep floating.

Informal communication makes news spread like wildfire. Not only this, people start adding something of their own which sometimes changes the real meaning of the communication.
Advantages
The informal channel of communication has the following advantages:

(1) Fast and Effective Communication:

Under this communication, the messages move fast and their effect is equally great on the people.

Informal communication is done in a free environment. Free environment means that there is no pressure of any office-big or small. The reactions of the employees can easily be collected.

(3) Better Human Relations:

Informal communication saves the employees from tension. Freedom from tension helps the establishment of better human relations. This also affects the formal communication.

(4) Easy Solution of the Difficult Problems:

There are many problems which cannot be solved with the help of formal communication. There is more freedom in informal communication which helps the solution of difficult problems.

(5) Satisfying the Social Needs of the Workers:

Everybody wants good relations with the high officers at the place of his work. Such relations give satisfaction to the employees and they feel proud. But this can be possible only with the help of the informal communication.
Limitations
The defects or limitations of the informal communication are as under:

(1) Unsystematic Communication:

This communication is absolutely unsystematic and it is not necessary that information reaches the person concerned.

(2) Unreliable Information:

Most of the information received through this communication is undependable and no important decision can be taken on its basis.

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Informal communication refers to interchange of TOOLKIT-5 information unofficially. This communication is based on informal relations (like friendship, membership of the same club, the same place of birth, etc.) and, therefore, is free from all the organisational formalities. The exchange of informal messages usually takes place on the occasion of community meals, social occasions, parties, ...

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"The second most important factor in a manager's ability to motivate employees is creating a work environment and organizational culture that fosters employee motivation and engagement." This statement could not be any more truer. I consider productivity and motivation one in the same; if one feels motivated they are more productive. When one is productive, they feel motivated to finish the job. My office has a "today's hit" radio station that plays, pastel colored walls, and greenery that floods the lobby. There are times that I jam out to song, or just look at a plant and think about something other then work for a minute. But those are everyday things. Our company is not one to celebrate Casual Friday, unless of a major holiday or when the owners are out of town. When casual Friday comes around, everyone is so much more positive and excited with the day. We also have company potlucks, though again only when a major holiday comes around, which is five times a year, or when the Bulldog vs Gator game is upon us (which is another big motivating factor). If the company would change up the music or get some different pictures on the wall, I would feel more motivated to get the job done.

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After the New Year, management has the entire office come together for a "Word" meeting. This meeting is one where each employee must come up with a work that they will work by to achieve more greatness than they did in the previous year. For example, when I first started working at the company, my word of the year was 'Consistency'; being that I was still fairly new at the start of the New Year, I wanted to show my fellow co-workers that I was to try to be consistent with my work and make less mistakes. With this New Year, my word is 'Patience', which I think fits perfectly with my position of answering phones, greeting cliental, doing all of my receptionist duties, and now with becoming the accounting assistant, I definitely look at my word at least four times a day to remind myself to a breathe. Being in a customer service industry, management's main focus is the client, which is understandable, though at the expense of your employee's sanity is stretching it a bit. When management fills a position, they throw that new person right into the mosh pit without taking the time to really train them. I have seen countless new employees come in on a Monday and leave that same Wednesday, because they are just too overwhelmed with the job. I too was overwhelmed when I first started this position and even thought about quitting after the second day, but even in all the stress, I am glad I toughed it out and stayed. Sometimes I just want to tell management that they need to take it slow.

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How often have you heard somebody - a new CEO, a journalist, a management consultant, a leadership guru, a fellow employee - talk about the urgent need to change the culture? They want to make it world-class. To dispense with all the nonsense and negativity that annoys employees and stops good intentions from growing into progress. To bring about an entirely different approach, starting immediately.

These culture critiques are as common as complaints about the weather - and about as effective. How frequently have you seen high-minded aspirations to "change the culture" actually manage to modify the way that people behave and the way in which they work? And how often have you seen noticeable long-term improvements?

What Is Corporate Culture?

At its worst, culture can be a drag on productivity. At its best, it is an emotional energizer. Here's how companies can use it to gain a competitive advantage.

If the answer to these last two questions is "rarely," it wouldn't surprise us. We don't believe that swift, wholesale culture change is possible - or even desirable. After all, a company's culture is its basic personality, the essence of how its people interact and work. However, it is an elusively complex entity that survives and evolves mostly through gradual shifts in leadership, strategy, and other circumstances. We find the most useful definition is also the simplest: Culture is the self-sustaining pattern of behavior that determines how things are done.

Made of instinctive, repetitive habits and emotional responses, culture can't be copied or easily pinned down. Corporate cultures are constantly self-renewing and slowly evolving: What people feel, think, and believe is reflected and shaped by the way they go about their business. Formal efforts to change a culture (to replace it with something entirely new and different) seldom manage to get to the heart of what motivates people, what makes them tick. Strongly worded memos from on high are deleted within hours. You can plaster the walls with large banners proclaiming new values, but people will go about their days, right beneath those signs, continuing with the habits that are familiar and comfortable.

But this inherent complexity shouldn't deter leaders from trying to use culture as a lever. If you cannot simply replace the entire machine, work on realigning some of the more useful cogs. The name of the game is making use of what you cannot change by using some of the emotional forces within your current culture differently.

Three dimensions of corporate culture affect its alignment: symbolic reminders (artifacts that are entirely visible), keystone behaviors (recurring acts that trigger other behaviors and that are both visible and invisible), and mind-sets (attitudes and beliefs that are widely shared but exclusively invisible). Of these, behaviors are the most powerful determinant of real change. What people actually do matters more than what they say or believe. And so to obtain more positive influences from your cultural situation, you should start working on changing the most critical behaviors - the mind-sets will follow. Over time, altered behavior patterns and habits can produce better results.

You may be asking: If it is so hard to change culture, why should we even bother to try? Because an organization's current culture contains several reservoirs of emotional energy and influence. Executives who work with them can greatly accelerate strategic and operating imperatives. When positive culture forces and strategic priorities are in sync, companies can draw energy from the way people feel. This accelerates a company's movement to gain competitive advantage, or regain advantages that have been lost.

Research shows that companies that use a few specific cultural catalysts - that is to say, those that use informal emotional approaches to influencing behavior - are significantly more likely to experience change that lasts. Of the companies that reported consciously using elements of their culture in Strategy&'s 2013 Global Culture & Change Management Survey, 70 percent said their firms achieved sustainable improvement in organizational pride and emotional commitment. That compares with 35 percent for firms that didn't use culture as a lever. Although there is no magic formula, no brilliant algorithm, no numerical equation that will guarantee results, we have gleaned some valuable insights through decades of research and observation at dozens of enterprises, including some of the most successful companies in the world. By adopting the following principles, your organization can learn to deploy and improve its culture in a manner that will increase the odds of financial and operational success.

1. Work with and within your current cultural situations. Deeply embedded cultures cannot be replaced with simple upgrades, or even with major overhaul efforts. Nor can your culture be swapped out for a new one as though it were an operating system or a CPU. To a degree, your current cultural situation just is what it is - and it contains components that provide natural advantages to companies as well as components that may act as brakes. We've never seen a culture that is all bad, or one that is all good. To work with your culture effectively, therefore, you must understand it, recognize which traits are preeminent and consistent, and discern under what types of conditions these traits are likely to be a help or a hindrance. Put another way, there's both a yin and a yang to cultural traits.

For example, a European pharmaceutical company with a solid product development pipeline had a tendency to be inward-looking. It had great execution capabilities and an excellent record of compliance with regulators around the world. However, when new products were ready to be launched, the company had a hard time marketing them to physicians and healthcare providers. Rather than bemoaning the company's ingrained insularity - for example, its collective tendency to value the opinions of internal colleagues more than those of outside experts - the leaders decided to use this feature of its culture to its advantage. They set up a program through which employees were acknowledged and rewarded by colleagues for "going the extra mile" to support customers. By recognizing a new kind of internal authoritativeness, the company tapped a powerful emotional trigger already in place, and engendered a new (and strategically important) behavior in its sales force.

2. Change behaviors, and mind-sets will follow. It is a commonly held view that behavioral change follows mental shifts, as surely as night follows day. This is why organizations often try to change mind-sets (and ultimately behavior) by communicating values and putting them in glossy brochures. This technique didn't work well for Enron, where accounting fraud and scandal were part of everyday practice, even as the company's espoused values of excellence, respect, integrity, and communication were carved into the marble floor of the atrium of its global headquarters in Houston. In reality, culture is much more a matter of doing than of saying. Trying to change a culture purely through top-down messaging, training and development programs, and identifiable cues seldom changes people's beliefs or behaviors. In fact, neuroscience research suggests that people act their way into believing rather than thinking their way into acting. Changes to key behaviors - changes that are tangible, actionable, repeatable, observable, and measurable - are thus a good place to start. Some good examples of behavior change, which we've observed at a number of companies, relate to empowerment (reducing the number of approvals needed for decisions), collaboration (setting up easy ways to convene joint projects), and interpersonal relations (devising mutually respectful practices for raising contentious issues or grievances).

Neuroscience research suggests that people act their way into believing rather than thinking their way into acting.

A telecommunications company was seeking to improve its customer service. Rather than trying to influence mind-sets by, for example, posting signs urging employees to be polite to disgruntled customers, or having employees undergo empathy training, the company focused on what psychologists call a "precursor behavior" - a seemingly innocuous behavior that reliably precedes the occurrence of problem behavior. Leaders had noticed that poor teaming led to poor customer service, so the company rolled out a plan to encourage better and more effective teaming within call centers. To accomplish this, they set up regular design sessions for improving practices. When employees felt they were part of a happy team, and sensed a greater level of support from colleagues, they began treating their customers better.

In another example, a resources company in the Middle East was seeking to make its workplace safer. Rather than erect placards threatening workers with consequences, the company focused on a relatively basic precursor behavior: housekeeping. It organized a litter drive. Picking up trash as a team helped employees take greater pride in the workplace, which engendered a greater sense of care for fellow employees and made them more likely to speak up when they noticed an unsafe situation. Changed behavior, changed mind-set.

3. Focus on a critical few behaviors. Conventional wisdom advocates a comprehensive approach - everybody should change everything that's not perfect! But companies must be rigorously selective when it comes to picking behaviors. The key is to focus on what we call "the critical few," a small number of important behaviors that would have great impact if put into practice by a significant number of people. Discern a few things people do throughout the company that positively affect business performance - for example, ways of starting meetings or talking with customers. Make sure those are aligned with the company's overall strategy. Also check that people feel good about doing these things, so that you tap into emotional commitment. Then codify them: Translate those critical behaviors into simple, practical steps that people can take every day. Next, select groups of employees who are primed for these few behaviors, those who will respond strongly to the new behaviors and who are likely to implement and spread them.

At an Asian banking company, rapid inorganic growth had led to diverse ways of working across different units and geographies. To focus on improving teaming, customer outcomes, and the ability to realize synergies, the CEO and leadership embarked on a culture-led evolution program. They targeted just three critical behaviors: taking extra steps to delight customers, valuing performance over seniority, and backing up and supporting one another. They then converted these three general behaviors into specifics for each part of the company. Delighting customers, for instance, was translated into frontline staff collaborating with other colleagues to solve client problems and prioritizing the implementation of process improvements that affected customer outcomes. For all three behaviors, leadership recognized and celebrated examples in which people made an extraordinary effort. Senior leaders acted as role models, explicitly modeling these three new behaviors. The company also identified influential frontline, client-facing employees who could demonstrate these new behaviors in action.

4. Deploy your authentic informal leaders. Authority, which is conferred by a formal position, should not be confused with leadership. Leadership is a natural attribute, exercised and displayed informally without regard to title or position in the organizational chart. Because authentic informal leaders, who are found in every organization, are often not recognized as such, they are frequently overlooked and underused when it comes to driving culture. It is possible to identify such leaders through interviews, surveys, and tools such as organizational network analysis, which allow companies to construct maps of complex internal social relations by analyzing email statistics and meeting records. Once identified, these leaders can become powerful allies who can influence behavior through "showing by doing." In fact, when companies map out their organizations, they can identify leaders who exhibit different core leadership strengths (see "Four Types of Authentic Informal Leaders").

Four Types of Authentic Informal Leaders

Every organization has people who influence and energize others without relying on their title or formal position in the hierarchy to do so. We call them "authentic informal leaders." They are a powerful resource in spreading a critical few behaviors from the bottom up. Among the many types of informal leaders present in organizations, the following are seen most frequently.

Pride builders are master motivators of other people, and catalysts for improvement around them. Often found in the role of line manager, they understand the motivations of those with whom they work. They know how to foster a sense of excellence among others. They can be found at every level of a hierarchy; some of the most effective pride builders are close to the front line, where they can interact directly with customers as well as employees. Pride builders often have powerful insights about the culture and about what behaviors are likely to lead to improvement.

Exemplars are role models. They bring vital behaviors or skills to life, and others pay attention to them. They are well respected and are effective peer influencers in the middle and senior management cohorts.

Networkers are hubs of personal communication within the organization. They know many people, and communicate freely and openly with them. They serve as links among people who might not otherwise share information or ideas. If you want to see an idea travel virally through an enterprise, enlist your networkers.

Early adopters enthusiastically latch onto and experiment with new technologies, processes, and ways of working. Involve them in your performance pilots, or whenever you are trying to demonstrate impact quickly.

At one major oil company, an informal leader named Osama became known as the "turbo-collaborator." His role gave him very little formal influence. But when he began working at the refinery, he walked the plant with the engineers, maintenance technicians, and operators, and took copious notes. As a result, he knew everyone and developed relationships across disciplines. Whenever somebody wanted to know how the place really worked, they would speak to Osama - who would either have the answer in his notebook or know precisely the right person to ask. When the company formed a buddy program between operations and maintenance aimed at using greater collaboration to improve plant reliability, it knew it needed Osama at the heart of it. He connected people, defined templates to encourage collaboration, and captured success stories. Identifying, engaging, and nurturing such informal leaders allows companies to harness their talents and further the company's transformation efforts.

5. Don't let your formal leaders off the hook. Most organizations tend to shunt culture into the silo of human resources professionals. But leaders in all parts of the company are critical in safeguarding and championing desired behaviors, energizing personal feelings, and reinforcing cultural alignment. The signaling of emotional commitment sets the tone for others to follow. If staff members see a disconnect between the culture an organization promulgates and the one its formal leadership follows, they'll disengage quickly from the advertised culture and simply mimic their seniors' behavior. The people at the top have to demonstrate the change they want to see. Here, too, the critical few come into play. A handful of the right kind of leaders have to be on board to start the process.

When Jim Rogers was CEO of GE Motors in Fort Wayne, Ind., he became frustrated because his senior leadership group of more than 15 leaders seldom functioned together as a "real team." As described by Jon Katzenbach and Douglas K. Smith in The Wisdom of Teams: Creating the High-Performance Organization (Harvard Business School Press, 1993), a real team is one with a high level of emotional commitment; the leadership role shifts easily among the members depending on their skills and experience and the challenges of the moment, rather than on any hierarchical positions. Team members hold one another accountable for the quality of their collective work. Interestingly, at GE Motors the senior leadership group members often demonstrated real team capabilities in running their individual business units and functions. So Rogers decided to find ways to break them into subteams of three or four members to address specific cross-organizational issues facing the larger group. Over time, he mixed the subgroupings to match emerging issues. By working in different subgroup settings, the executives developed camaraderie, which in turn improved the effectiveness of the group as a whole.

6. Link behaviors to business objectives. When people talk about feelings, motivations, and values - all of which are vital elements of strong cultures - the conversation can often veer into abstractions. It may then range far afield of what it takes to succeed in the market. Too many employees walk away from culture-focused town halls or values discussions wondering how the advice on how to be a better person actually translates into the work they do. To avoid this disconnect, offer tangible, well-defined examples of how cultural interventions lead to improved performance and financial outcomes. Select behaviors that are aimed specifically at improving business performance and can be measured over time.

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An oil company's drive to reduce maintenance costs at an industrial installation highlights the importance of such an approach. The critical few behaviors included empowerment and good decision making. One of the company's exemplars (employees who lead by example) decided it would be a smart move to make costs visible to workers. So he placed price tags on various pieces of machinery. These cues inspired behavioral changes related to decisions about whether to repair or replace equipment. Workers and managers began to recommend fixing expensive equipment rather than replacing it. The company celebrated and publicized cost savings identified by employees. The behaviors led to a change in focus and mind-set. When an employee noticed that fans were cooling the machinery during the winter, he felt empowered to call it out, and ask whether it was necessary to do so. It turned out that it wasn't - and the company saved US$750,000 annually in power costs as a result.

7. Demonstrate impact quickly. We live in an age of notoriously short attention spans. That applies as much to organizational culture as it does to people's media consumption habits. When people hear about new high-profile initiatives and efforts, and then don't see any activity related to them for several months, they'll disengage and grow cynical. That's why it is extremely important to showcase the impact of cultural efforts on business results as quickly as possible. One effective method of doing so is to stage performance pilots - that is, high-profile demonstration projects. Pilots are relatively low-risk efforts that introduce specific behaviors that can then be evaluated and assessed. They often rely on a dashboard that defines desired impacts, the tactics used, and the specific metrics to be employed.

When Bell Canada first explored using new behaviors at the front line to improve its customer service and profitability, there were many more skeptics than believers within the leadership ranks. There simply wasn't any numerical proof that the tactics would work. So CEO Michael Sabia decided to set up a pilot test in a sales unit near Toronto. The sponsors of the test blocked out a tight time frame of eight months, and developed realistic ways of measuring behavior change, customer reactions, and actual sales and margin performance. Armed with positive results in these areas - a 29 percent increase in customer satisfaction in retail stores, a 31 percent increase in revenue per call at call centers - the company went on to accelerate the expansion of these efforts across the front line in different geographies, functions, and businesses.

8. Use cross-organizational methods to go viral. Ideas can spread virally across organizational departments and functions, as well as from the top down and from the bottom up. One powerful way to spread ideas is through social media: blogs, Facebook or LinkedIn posts, and tweets - not from senior management, but from some of the authentic informal leaders mentioned in Principle 4.

By now it is well established that social media can be more effective at spreading information, news, and music than traditional modes of distribution. The same holds with critical behaviors. People are often more receptive to changes in "the way we do things around here" when those changes are recommended or shared by friends, colleagues, and other associates. This kind of credible social proof is more compelling than similar testimonials from someone whose job it is to sell something.

Just as there is an art to making content go viral, there's a craft to making behavior go viral. For example, in a model that we have tested successfully in several situations, a company starts with a few carefully chosen groups of 12 to 15 informal leaders in three or four different parts of the business. After several weeks, an additional 10 to 15 groups of informal leaders are set up in every business unit. After about three months, the existing groups are encouraged to expand and bring in new people. After another three to six months have passed, the groups become more autonomous, allowed to control their own expansion. Meanwhile, the company facilitates connections among groups to share learning and insights. As behavior spreads, company leaders see increased performance as well as peer and leadership recognition.

9. Align programmatic efforts with behaviors. We've emphasized the role that informal leaders can play in helping ideas go viral. But it's also important to match the new cultural direction with existing ways of doing business. Informal mechanisms and cultural interventions must complement and integrate with the more common formal organization components, not work at cross-purposes. By providing the structure in which people work - through disciplines such as organization design, analytics, human resources, and lean process improvement - the formal organization provides a rational motivation for employee actions, while the informal organization enables the emotional commitment that characterizes peak performance.

The U.S. Marine Corps provides a classic example of integrating formal and informal leadership efforts. The "rule of three" dictates how the Marines design their organizations and projects and how they execute in a hierarchy. (Three squads form into one of three divisions, which form one of three battalions.) The formal leaders of those units are expected to know the intent of the officer two levels above them - and to call out any order or situation they perceive to be incoherent or in conflict with that intent. But there are also informal leaders: Each of the four members of a frontline rifle team is prepared (and expected) to take the lead whenever the formal leader is disabled or loses the high-ground position. This means that the informal leaders also need to know the intent of that officer two levels above. Integrating informal norms with the formal structures helps enable the timely battlefield adjustments that have served the Marine Corps well for more than 200 years.

10. Actively manage your cultural situation over time. Companies that have had great success working with culture - we call them "culture superstars" - actively monitor, manage, care for, and update their cultural forces. Why? As we noted at the outset, when aligned with strategic and operating priorities, culture can provide hidden sources of energy and motivation that can accelerate changes faster than formal processes and programs. Even if you have a highly effective culture today, it may not be good enough for tomorrow.

Southwest Airlines stands as an example of a battle-tested company in which culture has been managed over time. Famous for its long-term success in an industry where even the largest players routinely fail, Southwest for 40 years has been energized by a deep sense of pride among all employees. Southwest has found that constructing an environment that puts its employees first - above customers and owners - fosters a sense of emotional commitment and pride that delivers excellent customer service. But at Southwest, the work on culture is never completed. Just as the airline's strategy, tactics, and technologies have evolved to cope with a changing external environment, specific HR practices, including informal behaviors, have shifted over time.

Living in Your Culture

Although challenging, multidimensional, and often difficult to deal with, a company's cultural situation constitutes a powerful set of emotional resources. As is the case with other resources - human, technological, financial - it is incumbent upon leaders to strive to get the most value out of it.

To a degree, culture can be compared to natural forces such as winds and tides. These elements are there in the background, sometimes unnoticed, sometimes obvious. Endowed with immense power, they can waylay plans and inhibit progress. They can't really be tamed or fundamentally altered. But if you respect them and understand how to make the most of them, if you work with them and tap into their hidden power, they can become a source of energy and provide powerful assistance.

The best way to start is to ask yourself a series of questions. What are the most important emotional forces that determine what your people do? What few behavior changes would matter most in meeting strategic and operational imperatives? Who are the authentic informal leaders you can enlist? And what can you and your fellow senior leaders do differently to signal and reinforce those critical behaviors?

Of course, you shouldn't plan for dramatic results overnight. Expect an evolution, not a revolution. One of the challenges of working with culture is that, as we've noted, it changes gradually - often too slowly for leaders facing fast-moving competitors. That's the bad news. The good news? If you approach culture with respect and intelligence, as a milieu in which you and your enterprise live, you can use it to accelerate your competitive momentum. There's no better time than the present to start.

Reprint No. 16105

Author Profiles:

Jon Katzenbach is an acclaimed advisor to executives for Strategy&, PwC's strategy consulting group. He is a managing director with PwC US, based in New York, and founder of the Katzenbach Center, Strategy&'s global institute on organizational culture and leadership. He is a best-selling author on organizational culture, leadership, and teaming; his books include The Wisdom of Teams (with Douglas K. Smith; Harvard Business School Press, 1993) and Leading Outside the Lines (with Zia Khan; Jossey-Bass, 2010).

Carolin Oelschlegel is a director of the Katzenbach Center for Strategy&. She leads the global operations of the center and advises clients around the world on culture and leadership topics. Based in San Francisco, she is a director with PwC US.

James Thomas is a thought leader in organizational culture with Strategy&. He is the Middle East lead of the Katzenbach Center and an expert in culture and organizational topics. Based in Dubai, he is a partner with PwC Middle East.

Also contributing to this article were Strategy& specialists Varya Davidson (partner with PwC Australia), Kenji Mitsui (partner with PwC Japan), Henning Hagen and Rutger von Post (principals with PwC US), and Shona Especkerman (senior manager with PwC Malaysia).

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Jon Katzenbach, Carolin Oelschlegel, and James Thomas

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How often have you heard somebody - a new CEO, a journalist, a management consultant, a leadership guru, a fellow employee - talk about the urgent need to change the culture? They want to make it world-class. To dispense with all the nonsense and negativity that annoys employees and stops good intentions from growing into progress.

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This again relates to my current job position. Being that insurance is a fast moving industry, everyone wants everything yesterday, and some even think that they are the only one's that we attend to. When something goes array, such as payment was taken though the insured hasn't received any forms, or someone called for a quote and hasn't heard back from the agent in over a week is something that happens more often that it should. Management wants too make sure that the client is happy; "if the client is happy then we stay in business.", as management puts it. No one cares to stop and ask, "Well why did this happen in the first place?" Being that we are a family-owned corporation, with only eight agents, and over a thousand cliental, some things are bound to go wrong. But not getting back with someone about a quote for over a week is just not right. It's always go, go, go and don't ask questions. Much of the time, agents are just too busy to remember what they were doing before they got caught up in a busy mess, but whenever I get swamped, I make sure to finish what I was doing before I got busy. Then I move onto a priority and go down a list to make sure that everything gets done before the end of the day.

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This topic and article speak volumes to where I am in my current work position. I am a receptionist for an insurance agency, who has also "taken on" the task of being the accounting assistant. The reason for the quotations is because I was never officially offered the position or asked if I was comfortable doing it. I've gone from entering simple commission statements to doing all of the accounts payable work. My manager doesn't understand that she cannot just "dump", if you will, most, if not all, of the accounting work, while I am handling my actual job (that I am getting paid for) on top of that. She is not grasping my communicative queues and is not listening when I tel her that I am already swamped as she gives me more accounting work.  As stated in this article, "A major factor is the failure of organizations to assure that the supervisors and managers know how to delegate effectively.  Often, managers think that they are delegating when they assign tasks to employees. Sometimes this is merely dumping on people." Those statements are exactly what I am going through on daily basis. I enjoy my job, but not when I am up all night with anxiety for the next day.

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Managers have some tasks that they need to do, but their primary job is to make sure that others are doing what they have been assigned to accomplish the mission and goals of the organization. Effective managers know what responsibilities to delegate to allow themselves time to plan, to collaborate with others in the organization, and to monitor the performance of their employees, making sure to give them adequate feedback and development opportunities.

Often, managers think that they are delegating when they assign tasks to employees. Sometimes this is merely dumping on people. Real delegation is assigning responsibility for outcomes along with the authority to do what is needed to produce the desired results.

Why is this not done well in most organizations? A major factor is the failure of organizations to assure that the supervisors and managers know how to delegate effectively. Many managers have never received training in delegation.

Other reasons why managers do not delegate as much as they could include:

The belief that employees cannot do the job as well as the manager can.

The belief that it takes less time to do the work than it takes to delegate the responsibility.

Lack of trust in employees' motivation and commitment to quality.

The need to make one's self indispensable.

The enjoyment of doing the work one's self.

Guilt associated with giving more work to an overworked staff.

Some reasons for not delegating are legitimate. For example, if an organization is understaffed or managers have no one reporting to them, obviously it is very difficult to delegate responsibilities. However, most such arguments do not stand up to rational analysis. Managers need to delegate because they are not supposed to do all of the work themselves. They need to interact with other managers about goals; plan for possible changes in economic conditions, competitive factors and the like; and communicate with other managers about how to improve operations and develop new strategies. In addition, managers need to devote time to their own development through training and by keeping up with technology and other innovations relevant to their industry and their organization.
Managers are responsible for developing their employees to ensure that they are well trained, to identify future leaders, and to prepare their own successor when they move up or move on to other organizations. Delegating responsibility is a powerful statement to employees about how much they are trusted and how competent and valued they are considered to be to the company.

Delegator's Dozen: A Preparation Checklist

1. Keep a delegation attitude. Ask yourself frequently: "Who else could do this?" Question every task, particularly those you have done for years.

2. Define the desired outcome. Ask: "What is the result I want accomplished?" Learn to assign responsibility for achieving results rather than unloading tasks.

3. Select the person. Consider more than one criterion when choosing to whom to delegate something. Some things to consider: Who has experience and skills? (Be careful not to overload this person.) Who needs to learn how to handle this responsibility? Who has the time to accept this responsibility? Who would like to have this opportunity?

4. Get input from others. Ask for ideas about what to change, who to involve and how to define the results. Consult one's own team, other managers who interact with the team, one's boss and customers.

5. Assign the responsibility and define the time factors. What is the deadline? When will you want progress reports?

6. Provide training and guidance. Does the person need training before assuming this responsibility? What guidance will they need to succeed? Remember to allow them freedom for independent thinking.

7. Define the authority level. How much power will they need? What kinds of power? Who else needs to know that this person has the authority to act? Be sure to inform them to assure cooperation with the employee.

8. Agree about the control process. What kinds of controls are needed? How can one feel in control and still empower employees to act independently?

9. Monitor progress. Pay attention and maintain control of the situation. Managers are still responsible for the success or failure of this person and for achieving the desired results.

10. Provide feedback. Stay in touch, giving plenty of positive reinforcement and coaching when needed.

11. Identify the lessons learned. What did the employee learn? What did you learn? Often, the person with the new responsibility will figure out better ways to get things done and such improvements need to be identified, documented and shared.

12. Evaluate performance. Give the person helpful feedback. What did they do well? Where can they improve? How can the results be improved? How can the manager do a better job of helping them succeed?

Once managers have prepared to delegate certain responsibilities, the next step is to communicate with the person or person chosen to handle the newly assigned responsibility. Following is a four-part communication process that can help ensure successful delegation.

Meet face to face without time pressure. This is very important communication, and face-to-face interaction is the approach most likely to convey the message that this discussion is important. Make arrangements so that you are not interrupted. Explain why the person was selected for the assignment and what results need to be achieved. Remember, you are assigning responsibility for producing outcomes-not just performing tasks. Encourage the other to ask questions. This needs to be a dialogue, not a monologue. Be sure to agree about timing and the control process by the end of the discussion.

Confirm employees' understanding and commitment. This is a common failure in delegation discussions. It is very important for managers to confirm that those to whom they've delegated responsibility have understood what they need to know; ask them to restate what has been said. Asking, "Do you understand?" almost always elicits the answers "Yes" or "I think so" even if the employee is totally confused. Do not, however, come across as testing them. Instead, say, "I want to be sure that I have communicated what I have intended to communicate. Will you please tell me what you have heard so far?" This communicates that you want to make sure that you have communicated without suggesting anything negative about the other's listening abilities.

Define employee's authority level. What kind of power will the person need to accomplish the results? Inform whoever else needs to know that you have delegated this responsibility to ensure their cooperation with the employee.

Follow up and provide coaching and guidance if needed. Don't abandon the person. You are delegating, not abdicating. Be available for questions and to help resolve resistance from others. But remember not to look over the shoulders of those to whom you have delegated responsibility. Instead, provide feedback to reinforce what has been done well and to help them learn when they make mistakes or encounter problems that require learning. Mark the calendar for checkpoint dates and updates on progress.

Sam R. Lloyd is president of the training firm SuccessSystems, Inc. and author of the book Accountability: Managing for Maximum Results (Course Technology (Thomson, 2002).
Adapted with permission from SuccessSystems, Inc. © 2012. SuccessSystems, Inc. All Rights Reserved.

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Managers Must Delegate Effectively to Develop Employees

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Effective managers know what responsibilities to delegate in order to accomplish the mission and goals of the organization.

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I found this picture helpful when deciding how to interpret the managerial decision making process. What some don't know id the fourth step, evaluating alternative courses of action, includes so many different approaches, such as the legal aspect as well s the financial aspect. Most people don't think that making managerial decisions has anything to do with the legality side of business, but if a manger needs to terminate a position, they need to make sure that all of the proper paperwork is in order, W-2 forms be sent to a correct address, and that they terminated employee receives the correct amount of pay, up until their termination. The financial aspect of it is something I see far too often at my place of business; working in the insurance industry I see many cancellation notices for non-payment of premiums. When one our clients forgets to pay, the owner charges the payment to the company credit card, in order to keep that client. Obviously, the company does that with trusted clients.

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This article really breaks the difference between multi and transnational. When I first heard about the two, I thought of the two switched, if you will. I thought that multinational did not have centralized management system. When I think of the word multi, I think of multipurpose or multitask, which you would think doesn't have any centralization whatsoever. Being that multinational companies face challenges because of their centralized management system, it is hard to remember that they don't have much freedom, whereas transnational companies do because they do not have a centralized system, they are able to receive more business in the markets that they are in.

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Main Difference - Multinational vs. Transnational

Both multinational and transnational are more or less similar in meaning, and some scholars use these two terms interchangeably. However, there is a small difference between multinational and transnational. Multinational, as the term suggests, operates in many countries. The main difference between multinational and transnational enterprises is that multinational enterprises have a centralized management system which cannot be seen in transnational enterprise. However, both multinational and transnational companies have foreign affiliates and operate around the world. Let us look at the difference between multinational and transnational, in detail here.

What is Multinational

Multi means many and national means the state. Many states mean that these types of companies operate in more than one country at the same time. Multinational enterprise is strongly supported by the emergence of free liberalism and free market concepts. A company may start in one country, and may spread to other foreign countries, expanding their investments. Thus, a national industry becomes a multinational company. The significance of this type of companies is that though it spreads to many other countries, there will be a centralized management system, and the main decisions will always be taken by the home company. The other foreign corporations will be subsidiaries of the home company. When we think of the business environment of a multinational company, it may engage in exporting and importing goods and services, buying and selling license in foreign markets, contract manufacturing, etc.

What is Transnational

Transnational corporations are something similar to multinational companies, but there is a small difference. Transnational corporations also operate in many countries, and there isn't a centralized management system. These companies might start in one country, and later on they might expand to other nations as well. However, they do not have a home company to manage them and will start as a new company. So, a transnational company does not have subsidiaries. Since there isn't a centralized management system, a transnational company may take decisions suitable to the operating context. They also may not be loyal to the operating country's value system but only will look into their expansion of businesses, since they may have no connection with the particular country. Transnational companies are there all around the world, and they operate truly at the global level.

Difference between Multinational and Transnational

Definition

Multinational companies operate in more than one country and have a centralized management system.

Transnational companies have many companies around the world but do not have a centralized management system.

Operations

Multinational companies own a home company and its subsidiaries.

Transnational companies do not have subsidiaries but just many companies.

Local Response

Since multinational companies have a centralized management system, there will be some barriers in decision making.

Transnational companies are able to gain more interest in the local markets where they maintain their own systems.
Image Courtesy: "Microsoft CES 2009″ by Ben Franske - Own work. (GFDL) via Commons "Kopenhagen Mai 2009 PD 486″ by Dornum72 - Own work. (CC BY-SA 3.0) via Commons

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Both multinational and transnational are more or less similar in meaning, and some scholars use these two terms interchangeably. However, there is a small difference between multinational and transnational. Multinational, as the term suggests, operates in many countries. The main difference between multinational and transnational enterprises is that multinational enterprises have a centralized management system which cannot be seen in transnational enterprise.

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Gender Diversity in the Workplace Module 2

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Gender Diversity in the Workplace Module 2

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This picture really is worth a thousand words. There are an increasing number of mothers returning to the workforce. This picture represents how mothers are able to balance work and family life, and do so in a non-binding way. This mother also represents the fact that her family comes first, as her child is held higher than the briefcase full of work. Although she is working, she continues to look at her child as first priority.

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The reason behind attaching the article is because it goes in depth about learning and growing into a more accepting person.  "Spending time with culturally diverse co-workers can slowly break down the subconscious barriers of ethnocentrism and xenophobia, encouraging employees to be more well-rounded members of society." Not only do you grow as a person morally, but you become a better person socially. I unfortunately work in an office where the owners are fearful of a certain races and religions, and show it by starting a starting stories with either the color of their skin or religion. I also grew up with my father's side being extremely racist to the point that if anyone were to date a non-white person, they were frowned upon. It is very hard not to see color when you are surrounded racism

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black and white 88 image by Nathalie P from Fotolia.com

More than 25 million people working in the U.S. are foreign-born, and data suggest that in less than three decades, the country will be a truly pluralistic society with no single group holding a majority. If you expect your company to compete and succeed in this new world order, you need to take a close look at the advantages and disadvantages of diversity in the workplace.

Advantage: Better Financial Results

Numerous studies have found that companies with diverse teams are more profitable than homogenous businesses. A 2015 McKinsey report on public companies noted that those with the most ethnic and racial diversity in their management were 35 percent more likely to be financially successful.

Advantage: Global-Level Competition

Millions of Americans are employed by foreign-owned companies. We live in a global economy, and the companies that consistently top the Fortune 500 list are global in nature. Companies need to employ people who represent diverse populations and points of view to compete on this world stage. What sells in small-town America may not fly in the cities of the United Arab Emirates. On the other hand, if you understand the culture and the economies of each, maybe it will.

Advantage: Fact-Based Decision-Making

Studies have found that diverse groups tend to focus on facts when making decisions. They look beyond old-school ways of thinking and examine and re-examine facts to remain objective, thus making better decisions for their company. Nonhomogeneous groups are more able than homogenous groups to identify their biases and work to keep them at bay when making important business decisions.

Advantage: Creative and Innovative Thinking

If everyone acts and thinks alike, you're likely to see the same-old, same-old when it comes to approaches to products, distribution, marketing, management and sales. However, when several people approach problems and challenges from varied perspectives, you'll discover more creative solutions. Research suggests that diversity increases innovation and improves market growth.

Advantage: Cross-Cultural Understanding

While homogenous groups may naturally get along better, in an increasingly diverse world, cross-cultural understanding creates a better working environment and a better world. Rather than relying on a crutch of old world prejudices and misconceptions, diverse work groups improve internal climates and external results for businesses.

Disadvantage: Difficulty in Transitioning

If your company is just beginning to recognize the potential of diversification, there will likely be challenges to creating a more diverse work environment. Old ways of thinking and entrenched prejudices may hinder your efforts and create tension and conflict. Additionally, as cultures collide, there may be misinterpretations of meanings. What's funny to one culture may be considered disrespectful to another. Management needs to buy in and educate employees across the board if workplace diversity is to have its first measure of success.

Disadvantage: Short-Term Cost Outlay

Depending on how long you've been in business, you may have already learned a great deal about accommodations in the workplace. Just as the Americans with Disabilities Act brought significant changes to some businesses at a financial cost, so will diversity require some flexibility. For example, if you have employees who are practicing Muslims, you'll need to give them time and space for daily prayer. Transgender employees may need their own bathrooms. As your employees become more diverse, you may face associated costs that you hadn't considered.

Although the transition to a diverse workplace can be difficult, employers across the country and the globe are making moves to diversify. They're finding it's worth the effort and the investment and that the results are both morally and financially rewarding.

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Advantages and Disadvantages of Diversity in Workplace

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More than 25 million people working in the U.S. are foreign-born, and data suggest that in less than three decades, the country will be a truly pluralistic society with no single group holding a majority.

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I found this cartoon too funny not to share. It shows that if management rewards an employee after they do something good or even doing their job correctly every time they do it correctly, then both parties aren't affected by it.  Rewards are nice but only when truly deserved and in moderation.

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Communication in the Workplace - Module 1

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Communication in the Workplace - Module 1

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This article may be on the shorter side, but it screams with information about why communication is vital not only in the workplace, but when transacting business in the world. My job title has changed in the last few months from receptionist to Receptionist/Accounting Assistant. Juggling both jobs is not only challenging, but my boss doesn't seem to be listening to me when I say that I am frustrated (being the I'm handling the receptionist part of the job), while also learning the accounting aspect of the job. My boss doesn't catch my verbal queues and tone changes, which makes the job a little more frustrating.

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What Are the Benefits of Effective Communication in the Workplace?

Good communication matters at work because few jobs are solo acts. It takes communication to work on a team, and even people working alone have to report to their bosses. If you run a business, you have to tell employees what's expected of them. Bad communication leads to errors, failure and sometimes lawsuits. Effective communication helps prevent them.

Building a Team

Effective, honest communication can bind employees together. If the staff are talking with each other on the job, that's a major step towards building a good team. Employees who look forward to talking with their colleagues are more enthused about coming to work. If they know they can talk to the boss about problems and that the boss will listen, that binds them to the company. Good communication builds teams and increases employee loyalty.

Making Things Clear

Confusing instructions and unclear guidelines are bad for everyone. When communicating with employees, managers have to be clear about what they want and expect. That applies whether the communication is through meetings, instructions, performance reviews or employee handbooks. If workers understand their duties and responsibilities, everything flows more smoothly.

Managing Diversity

Good communication is even more important if the workforce is diverse. With a mix of races, nationalities, genders or faiths on the job, it's easy for people to accidentally offend each other. If promotion and employee review rules aren't clear, minority workers may feel they've been discriminated against. Policies that clearly spell out how the company applies rewards and penalties can clear things up. Clear guidelines telling employees how to treat each other helps avoid unwanted conflict.

Dealing With Problems

Bad communication causes all sorts of problems. Two employees receive conflicting instructions. HR issues a warning without finding out what the real issues are. A supervisor doesn't respond to questions or avoids discussing employee issues. These are all examples of poor communication. Good communication skills can resolve the problems, or better yet prevent them from developing in the first place.

Surviving Catastrophe

When the going gets tough, employees get nervous. Will they have a paycheck in six months? How long should they wait before jumping ship? Is the boss leveling with them about how bad things are? If management fudges the facts or ducks discussion, it can kill employees' faith in the company. Talking honestly about the situation can strengthen their trust. The best companies don't wait until disaster strikes to start communicating. If the company's been honest and communicating effectively all along, they have a valuable reservoir of trust built up.

About the Author

Over the course of his career, Fraser Sherman has reported on local governments, written about how to start a business and published four books of film reference. He lives in Durham NC with his awesome wife and two wonderful dogs.

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What Are the Benefits of Effective Communication in the Workplace?

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Good communication matters at work because few jobs are solo acts. It takes communication to work on a team, and even people working alone have to report to their bosses. If you run a business, you have to tell employees what's expected of them. Bad communication leads to errors, failure and sometimes lawsuits.