High Organizational Efficiency
A firm operates in an industry or corporate system to earn a profit. This prime objective is usually achieved by selling products or services. The size of profit is directly and positively correlated with organization’s capital structure and organizational performance. Some studies also suggest that there is a positive correlation between organizational performance and capital structure, as flexible capital structure allows a firm/company/organization to exploit various kinds of economic/corporate opportunities. However, in Chapter 3, of the book, I have learned that high organizational efficiency is linked to a superior strategy, which managers can implement, with great ease, at sub-strategic/tactical level. It emphasizes effective management and optimal exploitation of tangible and intangible resources.
The example of the efficiency and its alignment with the corporate strategy is the logistics process of Wal-Mart. The company is using different efficiency technicians to reduce the cost of loading, driving and routing. Similarity, the management depicts this intention in other department. In result, the company saves $1 billion annually (DeShields).
Potential of a firm’s human resource
The management and optimal use of human resource requires a sub-strategy as managing and exploiting human resource is a highly sensitive process. In the last six decades, organizations have put special emphasis on increasing the potential to have better results; however, the huge investment in human resource, I have learned in Chapter 3, produced mixed results. This compelled firms/companies to revisit the strategy and to identify factors, which were keeping firms from utilizing the potential of a firm’s human resource.
In the strategy of utilizing the human resource, for greater profits, two sub-strategies were incorporated. These two strategies were 1) formation of teams to accomplish identified tasks and 2) reward/responsibility system.
Positive-work deviance
I have learned that in late 80s companies started to devise comprehensive strategies, in which rewards were aligned with performance. Teams were formed after evaluating their potential and based on that potential, they were given not only responsibilities, but also firms offered them rewards. I have learned that must recognize that reward or incentive is a strong motivator. In fact, the contemporary economic system is based on incentive, which excites private sector (firms) to invest in the economy. Therefore, it is natural that firms offer rewards or incentives to increase positive-work deviance. I have also learned that reward system not only increases positive work-deviance, but also adds value to a product or service.
Value Creation
Value Creation is discussed in detail on page 43 of the book. I have learned from studying that section that as the reward theory and strategy evolved, the emphasis, of firms, shifted from production to value creation. In the manufacturing sector, of the economy, value creation has great significance, as it distinguishes one product from another in monopolistically competitive global markets. In the production of service too, value creation has tremendous relevance, as the quality of service makes a service unique.
In the latter section of the chapter, I have learned why it is imperative that this alignment must be methodical. For instance, studies suggest that method of alignment, of rewards with strategies, must be systematic. In fact, it provides a system for aligning. The work environment must be based on sound principles and policies, which are tried and tested. However, these policies must also be flexible, and management can amend them when it seems necessary. Also, such efficient methods and processes, performing a task, must be identified. Then identified goals, a firm should be linked to rewards and management should wait for results to improve the reward policy. It is a standard system, which companies or firms adopt with little alterations (as each firm is unique in structure and capacity).
Reward System & Performance
The end-objective, of any reward system, is a high performance, which correlates with value-creation and higher profits. Value-creation is, in fact, a mean to the end (high profits). Therefore, we can say that ultimately, a firm intends to translate its reward system into the high performance of human resource. If a reward system is not producing desired results, then either the system is faulty, or the reward is not a strong incentive to improve their performance, which is an end-objective of the strategy. The example of perks and rewards can be obtained from struck company. For |Instance, to motivate employees and improve the performance of employees, the company is providing the free stuff every week to employees. Employees choose different coffee product, beans, and many other things. It makes them happy and motivated, which improves their performance (Rella).
Work Cited
DeShields, Jennifer. “A Behind-the-Scenes Look at How Walmart Delivers.” Wal-Mart. Wal-Mart, 2 June 2016. Web. 3 April 2018. https://blog.walmart.com/business/20160602/a-behind-the-scenes-look-at-how-walmart-delivers.
Rella, Emily. “5 killer perks of working at Starbucks.” AOL. AOL, 2 March 2016. Web. 3 April 2018. https://www.aol.com/article/2016/03/02/company-of-the-week-5-killer-perks-of-working-at-starbucks/21321716/.
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