Recent Trends in Management

Recent trends in management refer to the latest managerial practices that managers use to effectively
manage their employees. As the market situation evolves, the managerial trends also evolve and change.
These changes are subject to the market conditions of that time period. The most popular recent trends
in management are Total Quality Management, Risk Management, Crisis Management etc. Let’s
understand in detail the following topics:

Total Quality Management

All business management principles unanimously agree on the importance of quality. One can measure
the success of an organization from the quality of its goods and services. Due to the importance of this
factor, total quality management has gained vast prominence over the years. Managers strive to
maintain the highest quality standards to meet their market competition.

mportance of Quality Mangement

Quality is one of the most important factors determining the success of a business. Customers always
consider the quality of a business’s goods and services while purchasing them. In fact, in some cases,
quality gets prominence over price as well.

Good quality of products always gives every organization a strong edge over its competitors. It also
rewards the business with customer patronage, word of mouth and goodwill. It is because of these
benefits that total quality management has become so important.

Principles of Total Quality Management

Total quality management (TQM) helps an organization improve its internal functioning and customer
satisfaction. The entire system of TQM rests on the following basic principles:

1. Management of quality is possible

The first principle of TQM is that an organization can always manage quality. Unlike external factors, it is
completely possible to control the quality of goods and services. TQM makes this possible even in large
companies that deal with huge amounts of production.

2. Processes are the problem, not people

If any process is causing problems, the focus of managers must first be on correcting it. They must not,
instead, think of simply hiring new workers. They should correct the process first and only then train
their employees to adapt.

3. Look for the cure instead of treating symptoms

Managers often make the mistake of addressing problems by just remedying them in the short term.
They should, however, go to the root cause and eradicate the source of the problem itself.

For example, imagine that a company faces problems with transporting its goods to certain areas. In
such cases, managers should see whether their problem relates to the entire process of shipping in
general.

4. Each employee is responsible for quality management

TQM places the burden of maintaining quality standards on every employee of an organization. From
line workers in factories to top-level executives, everybody plays a large role here.

5. Quality should be measurable

Managers should always be able to measure and quantify their quality standards. Failure to do so makes
it difficult to see achievable results clearly. TQM helps in this regard by employing statistics to measure
quality standards.

6. Quality improvements must keep happening

TQM says that quality management is never a temporary phase that ends when it achieves its targets. It
is, in fact, a permanent process that happens all the time.

It is always possible to improve quality more than its present standards. Managers must strive to keep
improving quality constantly.

7. Quality helps in the long-term

TQM is not a quick fix that can cure quality defects immediately. It is a long-term investment that often
shows results in the future only. Managers must keep an open mind and long-term vision while
implementing it.

Risk Management

The concept of risk management originates from the business of insurance. It has assumed significance
over the years as an important function of management. It basically consists of five processes that aim to
mitigate business losses. No organization can completely eliminate risks but it is certainly possible to
prepare for them.

ArrowArrow

ArrowArrow

Introduction to Concepts of Management and its Characteristics

Characteristics of Management

Management as Art

Risk Management

Risk management basically means the identification and mitigation of losses. It is a systematic process by
which an organization identifies, analyzes, prepares and reduces losses.

Apart from that, it also focuses on helping a business find profitable opportunities. Every business
organization faces an unavoidable influence from its external and internal environments.
Management of risks reduces the chances of such factors affecting an organization negatively. Managers
can either avoid or reduce risk or even transfer it to another entity.

Management of risks has, these days, become an inherent part of decision making and planning.
Employees at all levels, from top management to lower levels, have to deal with risks.

This, in turn, implies that risks can affect all aspects of an organization’s management. Hence, knowledge
of risk management is crucial for every organization.

Characteristics of Risk Management

Risk management is a systematic process that deals with the problem of uncertainty. It is an important
discipline under the broad subject of management.

Secondly, one can also refer to it for responding to undesirable events. In this regard, it helps in
preparing for worst-case scenarios.

Lastly, it is also a system that helps in making choices. It provides various alternatives and approaches to
help managers select one that has minimum chances of losses.

Risk Management Process

Management of risks involves the following five key steps:

Step 1: Establishing the Context

Before dealing with risks, managers must be able to understand and identify them clearly. In order to do
this, they first need to comprehend the context in which the risks arise.

In other words, managers need to figure which environment their business functions in and what risks
may arise therein. They should also be aware of their organization’s functions, goals and core activities.
Step 2: Identifying the Loss

After understanding the context, managers should list down all possible risks that may arise. This will
depend on the nature of the organization’s business, its environment, etc. For example, a company
manufacturing chemicals may face the risk of leakage from its production units.

Risks can be of four types.

Firstly, physical risks are those which involve an organization’s physical (tangible) assets and
environmental factors.

Secondly, Financial risks include the likes of insurance costs, payment of damages, loans, taxes, etc.

Thirdly, risks may also be ethical if they involve harm in the nature of one’s beliefs or reputation.

Finally, there can also be legal risks which arise from laws and regulations.

Step 3: Analysing and Evaluating Risks

Every organization faces several kinds of risks but the chances of them occurring differ in every case.
Managers should analyze each possible risk individually and evaluate the chances of it happening. This is
because they have to accord more importance to serious risks than less serious ones.

A business often incurs financial expenses for mitigating risks. For example, payment of insurance
premium, costs of hiring security personnel, etc.

The greater the chances of a risk occurring, the greater will be its cost of mitigation. Analysis of risks,
thus, helps in realizing how expensive it will be to prepare for a risk.
Managers can take the help of a ‘likelihood scale’ to fix the chances of risks occurring. This scale basically
ranks risks on the likelihood of them causing losses. They can even rank risks in terms of priorities for this
purpose.

Step 4: Treating the Risks

After identifying and analyzing risks, managers next have to treat them. This process can include avoiding
risks altogether. Alternatively, it is also possible to reduce the possible impact of a risk.

For example, a factory can deploy safety measures and equipment to prevent injuries to its workers.

One can even transfer risks to other entities. This process includes the use of contracts and notices to
shift any possible liability on others.

For example, shopping malls often shift the responsibilities of parked vehicles on their owners in case
any damage occurs.

Step 5: Monitoring and Reviewing Risks

Monitoring and reviewing of risks is a continuous process. Managers need to keep checking the
likelihood of risks occurring. They must also regularly follow up on their risk prevention strategies. This
step is important because risks are inevitable and they never remain static.

Crisis Management

One can never predict when a tragedy may strike. We can plan and try to prevent mishaps but they can
still happen. Crisis management in such conditions is one of the most important functions of managers.
They must always be able to rebuild their organization after a crisis occurs.

Crisis Management

A crisis is basically any mishap, tragedy or ill event that carries negative effects. It causes damage to an
organization, its members, its business or customers. It can even affect an organization’s reputation and
legal or financial position.
As the expression suggests, crisis management is simply the act of handling a crisis effectively. It refers to
the response of an organization to an incident that can affect it negatively.

crisis management

A business can anticipate crisis situations that may strike it but it can never completely prevent them. It
is practically impossible to prohibit tragedies from occurring. Each kind of tragedy carries unique effects.

Not all crisis situations have common features. Hence, managers have to understand each possible crisis
and deal with it differently.

Crisis Management and Risk Management

Crisis and risk management may sound similar but there are some stark differences between the two
terms. Thus, it is wrong to use them interchangeably.

The main difference between crisis management and risk management is the time when they occur.
Crisis management takes place after an untoward incident occurs. It basically relates to the damage
control measures that managers implement.

On the other hand, risk management includes anticipating crisis situations. It also requires managers to
find ways in which they can reduce risks. A good risk management exercise will not only reduce risks but
also try to prevent it completely.

Good managers will be able to perform both crises as well as risk management effectively. They should
anticipate all possible risks and also resolve them if they crop up.

Types of Crisis

As we saw above, no two crisis situations are always the same. Each tragedy has its own attributes and
one has to resolve them all accordingly.
In order to achieve this aim, managers must be able to understand every possible crisis situation. The
following are some of the most common types of crisis a business organization can face:

a) Natural Disasters

Natural disasters are basically ‘acts of God’ that occur naturally. Environment causes are generally
responsible for them. These include earthquakes, floods, tsunamis, storms, droughts, etc.

They affect human life as well as property. These kinds of disasters are almost always unpredictable and,
hence, more difficult to prevent.

b) Confrontational Crisis

This kind of crisis occurs when two groups clash due to opposing interests. These groups may be
businesses, workers’ unions, and even governments.

Their conflicting interests lead to a crisis that managers have to deal with. For example, protests,
boycotts, sit-ins, blockades, and threats occur in such situations.

c) Technological Crisis

Human application of science and technology causes a crisis of this kind. Disasters like nuclear leaks are
unpredictable until the science behind them is fully clear.

d) Organizational Misdeeds

Sometimes an organization’s management may take decisions that are not proper and informed. This can
often lead to unpredictable incidents. Managers must make sure that they always back each decision
with adequate precautions.

e) Rumours
False information or rumours about an organization can damage its reputation and goodwill. For
example, a company’s rival may spread misinformation about its products being toxic and poisonous.

f) Workplace Violence

Violence amongst workers can also be a common kind of crisis. The management must deal with such
problems very delicately.

Resistance to Change

One of the most important tasks of managers is to facilitate changes smoothly. Change is always
inevitable but so is resistance to change. It is basic human nature of people to try and keep their
methods and customs constant. This is where change management comes into play. An organization
always must strive to adapt to change if it wants to be successful.

Introduction to Resistance to Change

Change is basically a variation in pre-existing methods, customs, and conventions. Since all organizations
function in dynamic environments, they constantly have to change themselves to succeed.

Change management contains several strategies that help in facilitating the smooth adoption of such
changes.

One of the most important facets of change management is resistance to change. It is simply human
nature to counteract any changes and maintain the status quo.

But since change is inevitable, instead of resisting changes the organization must try to implement them
with minimum hassle.

Resistance to change may be either overt or implicit. For example, employees may react to a change in
policies with outright rejection and protests.
They may even refrain from showing disapproval expressly, but they may do so implicitly by not
accepting changes. Managers must understand these problems and help the employees adopt these
changes smoothly.

resistance to change

Reasons for Resistance to Change

In order to facilitate transitions and changes, managers must first be able to identify the exact reason for
resistance. Such resistance to change is common in all organizations. The following are some common
reasons for this:

People generally find it convenient to continue doing something as they have always been doing. Making
them learn something new is difficult.

Changes always bring about alterations in a person’s duties, powers, and influence. Hence, the people to
whom such changes will affect negatively will always resist.

People who are adamant on maintaining customs instead of taking risks and doing new things will always
resist changes. This can happen either due to their insecurities or lack of creativity and will.

Home > Business Management & Entrepreneurship > Recent Trends in Management > Change Through
Management Hierarchy

Recent Trends in Management

Change Through Management Hierarchy

It is usually the top level of a management hierarchy that makes the most important changes in any
organization. The lower level only implements these changes. Such a hierarchy often misses out small
and minute details of planning. Managers must, hence, understand how to plan for changes under such
conditions.

Management Hierarchy

The term management hierarchy basically refers to a structure of superior and subordinate rankings.
Almost every small and large organization follows this structure. Under this hierarchy, members of an
organization follow a fixed chain of command.
management-hierarchy

In a management hierarchy, it is always the top-level executives who decide all important matters. For
example, in a company, this would include the board of directors. Thus, they are the ones who take all
the major decisions.

In the next level, managers and executives simply implement plans that the top level makes. They take
only small and simple decisions in order to enforce those plans.

In other words, they do not really play a big role in enforcing changes. Under such structures, it is
common for finer details of changes to get left out.

For example, let’s say a company’s board decides to revamp its business by adopting the latest
technology available. The board will inform the management of this decision and leave its
implementation to them.

In such cases, the management will have to consider finer details that the board is likely to leave out.
This includes details like the purchase of new machinery, termination of certain employees, training of
workers, etc.

Changes under Management Hierarchies

As we saw above, it is difficult to implement big changes under a management hierarchy structure.
Organizations can adopt several effective measures to resolve this problem.

One of the simplest solutions to this problem is to maintain a specialized planning unit. This unit is
responsible for planning each and every finer detail of management. The unit can contain members from
all levels of management for facilitating smooth implementation of changes.
Another effective strategy is to involve an external management consultant. These consultants are
professionals who use their skills and expertise to suggest ways of implementing changes successfully.
People are often less likely to resist changes when they are enforced and managed by outsiders.

Lewin’s Three-Step Model

American psychologist Kurt Lewin has also suggested an effective strategy to implement changes in
hierarchical structures. According to him, changes involve three steps.

Firstly, the organization should try to unfreeze the status quo, i.e. the prevailing state of affairs. This step
requires the organization to clearly identify the status quo and declare that it will no longer be in effect.
All concerned members of the organization must know and understand this.

Secondly, the management must now find effective ways to change the status quo. This involves
identification of methods to implement the changes. These methods should be practical and
implementable.

Finally, the last step requires freezing of the new status quo. The management should, thus, ensure
smooth facilitation of the changes. It must find ways to make the employees refrain from resisting
against the proposed changes.

Action Research

Action research is the process of evaluating the implementation of changes. Under this method,
managers use a scientific approach to understand how plans are working. They may use figures,
statistics, feedback and opinions of employees for this purpose.

Action research basically involves steps like diagnosis, feedback, action, and evaluation. A scientific
approach like this helps in smooth implementation of changes. Furthermore, it plays an even bigger role
in hierarchical structures where mistakes are more common.

Concept of Change Management

Change is often said to be the only constant in one’s life. This statement holds true for business
organizations as well. External and internal factors almost always lead to changes in the way things
happen. One of the most important tasks of managers is to implement these changes smoothly. We refer
to this process as change management.

Change Management

Changes in its external and internal environment constantly affect every business’s activities. These
changes can happen either at individual levels or at the organizational level. Furthermore, it affects
employees as well as managers. It is also basic human nature to resist changes, especially drastic ones.

change management

Since an organization’s success depends on how well it adapts to change, management of these
situations is crucial. This is where change management comes into play.

Preventing changes is not always possible as they are inevitable sometimes. However, it is possible to
plan for changes and overcome them. The management must always strive to ensure changes happen
smoothly. The organization and its members must not find changes too drastic.

Meaning of Change

Change is basically a variation in the common way of doing things. Whenever people perform a task in a
certain way, they get accustomed to them. They develop methods which they can implement routinely
to achieve these tasks. Any variation in these methods is nothing but change.

Changes may be either natural or reactive. Natural changes generally occur routinely in the ordinary
course of business. For example, the effects of the growth of an organization lead to changes in
management styles.

On the contrary, reactive changes happen as a reaction to the organization’s policies or its environment.
For example, whenever a firm adopts new technologies in production, its workers will have to adapt to
them.
Management of Change

Every good manager must be able to anticipate predictable changes. Apart from that, he should also be
able to smoothly incorporate these changes into the organization. This is basically the entire aim of
change management.

Change is always inevitable; one can never completely prevent it. Managers can either wait for changes
to occur or they can anticipate them and act in advance. A good manager will always do the latter.

This process generally requires a thorough understanding of factors that affect changes. This is because
external and internal factors are solely responsible for effecting changes.

Causes of Change

Changes affecting an organization are basically the result of its environment. Both, external as well as
internal factors play a huge role here. Hence, managers need to understand all types of changes possible
under these two classifications.

External factors

These factors always lie outside an organization. Neither the organization itself nor its members are
responsible for them. However, they always feel the effect of these factors. Some of these factors
include:

Economic factors: Access to resources, market demand, competition, inflation, interest rates, etc.

Technology: The growth of technology always forces an organization to adapt. For example, the
discovery of new production methods.

Politics: Policies of a government change routinely. Even the government itself changes every term.
These factors play a large role in the external environment.

Other factors: Factors like urbanization, education, cultural changes, change in social mindset, etc. also
affect every business organization.

Internal factors
Sometimes changes can also occur internally. An organization and its own members are responsible for
these changes. For example, the top management of a company might decide to diversify its business.
This decision will lead to several changes in which the company functions.

Similarly, other internal factors include:

Changes in personnel due to hiring, termination of employment, retirement, promotion, etc.

Change of functional policy decisions like holidays, work hours, paid leaves, etc.

Changes affecting physical facilities like usage of alternative raw materials or adaptation to new
machinery.