How Reinsurance Companies are Taxed?
The coronavirus pandemic has brought the focus on to the operations of the insurance as well as the reinsurance sector. The performance of this sector was considered to be key in order to ensure that the economies of many countries stay afloat during this period. It is for this reason that the taxation of reinsurance […]
Vulture Capitalism: An Introduction
The fall of American giants such as Sears and Toys R Us has brought the focus back on vulture capitalists. People react negatively when they hear about private equity firms who have profited off the misery of other weaker firms. This is the reason why they have coined a derogatory term for the companies. This […]
Is Government Mandated Maternity Leave Really a Solution?
Maternity laws around the world have become increasingly progressive. In many countries, labour laws mandate that all women employees be provided 26 weeks of paid leave during maternity. This law is being forcefully enforced in many countries of the world. However, is it really a solution? The reality is that forced government intervention is never […]
What is Interpersonal Relationship ? – Meaning and Important Concepts
A strong bond between two or more people refers to interpersonal relationship. Attraction between individuals brings them close to each other and eventually results in a strong interpersonal relationship. Forms of Interpersonal relationship An interpersonal relationship can develop between any of the following: Individuals working together in the same organization. People working in the same […]
Extracting the best from a Team
All individuals with a similar attitude and interest come together on a common platform to form a team. It is not always that an individual alone is capable of doing a task; sometimes he needs the guidance and suggestions of others as well. You need a team to accomplish a complicated task where every team […]
In many organizations, it is often the practice to give autonomy to many teams and let them take the decisions that affect their day to day affairs as well as some strategic issues. These are the so-called self-directed teams that exist in all organizations where the managers of these teams take the decisions regarding the management of the team with greater autonomy than the other teams.
These self-directed teams are liked by many managers since there is greater freedom and greater say over their affairs and the rank and file employees also like these teams because it gives them greater control over their work. However, senior management in most cases does not like to cede autonomy and hence there is often a tussle going on between senior management and middle management as far as these self-directed teams and their functioning goes.
The previous articles have discussed how many transnational corporations cede autonomy to regional and divisional heads and let them run their regions or divisions as they see fit. It is the case that within these divisions and regions there is often the tendency to not pass the autonomy down the ranks and instead be as authoritarian as possible. This is indeed a travesty but something which happens in practice in many organizations.
The standard defense that the senior managers in these divisions and regions offer is that the passing down of the autonomy to the rank and file might not be practically possible given the lack of strategic focus and direction that individual teams have which makes them take orders instead of deciding for themselves.
Of course, the intra-organizational tussles that go on between the senior management and the rank and file employees along with the middle managers might make for interesting gossip but in reality these tussles have negative effects on the organizational fabric.
Hence, a possible solution to this issue would be to ensure that sufficient autonomy is ceded to the middle managers without compromising on the strategic imperatives. This can be done if the decision making is decentralized in some functions like HR, Admin, Finance, Operations and Project Management and Project Delivery and at the same time retain control over the overall strategic direction and focus that the company must take.
Though this solution might sound simplistic, in reality this is something that has been actualized in many organizations especially in Fidelity and Unilever where functional and divisional heads as well as regional heads take decisions regarding these activities without interference from the higher ups.
Though there are bound to be some issues that crop up from time to time because of this arrangement, there are some positive benefits to this arrangement. These benefits are to do with the way in which the regional and divisional autonomy manifests in better decisions made about the day to day operations based on local conditions instead of centralized decision making that is top down and done without knowledge of ground realities.
In conclusion, decision making in self-directed teams must be encouraged without ceding complete control over the larger areas of policy and strategy. This can be actualized with some deft planning of the organizational structure and reorienting the organizational culture.
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