Managers often need to understand, predict, and control events that serve as a competitive advantage to their organization, such as awareness of self-organizing processes that may increase the probability of successful transformations in organizations.
Theories on management continue to develop and more leaders and managers are finding these ideas to be useful tools as they learn to lead their organizations more effectively.With the increasing complexity of modern organizations and the uncertainty of the environments that organizations face, managing organizational systems has become a job ridden with problems in the work environment. Having the knowledge of organizational management are essential in meeting the demands of a complex environment (Cooper and Schindler, 2003). Thus, this paper examines organizational management theories and concepts as it relates to Ameriquest Mortgage Company.The organizational hierarchy, including the structure of roles and responsibilities, is an important element of the management subsystem. This subsystem is highly influenced by the technology of the organization and also included management practices, policies and rules, the ways in which decision get mate, the system of rewards and penalties, and many other things which facilitate the process of management.
Top down control and uniformity are but two of many fractals that characterize our factory model of traditional organizations.While we are beginning to see changes in some of these patterns, few would argue that they were not typical of our industrial organizational systems, and they are likely still the predominant paradigm in organizational systems today. Organizations merge in different eras, and organizational culture is the product of strategic leadership. Managers frequently miss the significance of changing external conditions.
Effective organizational change begins with the executives on the top leadership team, and consensus among team members increases their commitment to implement a strategy.It is not enough to make good strategic decisions they must be implemented effectively successful. Schein (1992) posits that “the more dynamic the external environment, the more likely it is that some elements of culture will become maladaptive, and the more necessary it will therefore be for leadership to actively hasten the process of cultural evolution and change” (p. 296). Complex new behavior that is dependent on employees’ goodwill requires stimulating and supportive structures and processes. Organization in Study Ameriquest Mortgage is a mortgage company located in Orange County, California.
It used to be one of US’ largest subprime lenders. However, on August 31, 2007, ACC Capital Holdings decided to close Ameriquest. As of May 2007, Ameriquest has a work force of approximately 250 employees. However, in May 2006, Ameriquest underwent a massive layoff that included the Vice President and some other eleven employees. Ameriquest is selected for this particular paper because of these records.
First, we discuss management and leadership concepts such as leadership roles and responsibilities, the difference between management and leadership, and the four functions of management.Then we try to connect these concepts to Ameriquest’s dilemma by seeking out strategic actions that could have prevented Ameriquest’s closure. Leadership Roles A number of management theorists don’t buy the argument that leadership is the key factor in determining an organization’s success. They assert that a winning a culture, or efficient work processes, or any number of other ancillary attributes are the sine qua nons for success. Indeed, it is agreeable that those things are important. But leadership takes precedence over everything else.
Leadership matters.And it matters more in times of uncertainty than in times of stability. Leadership is not contained in a gene any more or any less than other pursuits. Leadership is not a place, it’s not a position, and it’s not a secret code that can’t be deciphered by ordinary people. Leadership is an observable set of skills and abilities.
Leadership is no longer limited to a handful of executives at the top level of an organization. Leadership takes precedence because of the fact that leaders are the people who decide what needs to be done and the ones who make things happen.Another reason is that it’s the leaders who create the cultures and use the tools. In a broad sense, leaders stage revolutions. They are constantly challenging the status quo and looking around to see if they are doing the right things, or if those things can be done better or smarter.
And most importantly, leaders spot something that needs to be changes, they do something about it. In more concrete terms, they do two specific things:• See reality — size up the current situation as it really is, not as it used to be or as they would like it to be, and• Mobilize the appropriate responsesThis is a lot harder than it sounds. Seeing reality requires leaders to remove filters that screen out the things they might not want to see, acknowledge their own and their companies’ shortcomings, and accept the need for change. Management vs. Leadership Contrary to most people think, leadership and management are two distinctive things.
Each has its own systems of action, function and characteristic activities. But both are, of course, necessary for success in an increasingly complex and volatile environment.No one can say that leadership is better than management nor that leadership is a replacement for it. Dozens of people can play important leadership roles in a business organization.
But while improving their ability to lead, companies should remember that strong leadership with weak management is not better, and is sometimes, actually worse than the reverse. The real challenge is to combine strong leadership and strong management and use each to balance the other. Not everyone can be good at both leading and managing.Others are better off as managers but they cannot necessarily be labeled as strong leaders. Others, on the other hand, can have great leadership skill but find it difficult to manage. Smart companies value both kinds of people and work hard to make them a part of the team.
But when it comes to preparing people for executive jobs, such companies tend to ignore the recent literature that says people cannot manage and lead. Thus, companies should understand the fundamental difference between leadership and management. Management is about coping with complexity.Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations.
Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Good management brings a degree of order and consistency to key dimensions like the quality and profitability of products. Leadership, by contrast, is about coping with change. Part of the reason it has become so important in recent years is that the business world has become more competitive and more volatile.
Faster technological change, greater international competition, the deregulation of markets, overcapacity in capital-intensive industries, an unstable oil cartel, raiders with junk bonds, and the changing demographics of the work force are among the many factors that have contributed to this shift. The net result is that doing what was done yesterday, or doing it 5% better, is no longer a formula for success. Major changes are more and more necessary to survive and compete effectively in this new environment. More change always demands more leadership.
As most companies do, Ameriquest might have a misconception on some of these ideas about organizational management. Thus, it is best for them to bear in mind a few things to balance the difference between management and leadership. To manage complexity, most companies begin by planning and budgeting as we are all sure is what Ameriquest might have done. However, leading an organization begins by setting a direction. That is, developing a vision of the future along with strategies for producing the changes needed to achieve that vision.To achieve its plan, the company should consider organizing and staffing — creating an organizational structure and set of jobs for accomplishing plan requirements, staffing the jobs with qualified individuals, communicating the plan to those people, delegating responsibility for carrying out the plan, and devising systems to monitor implementation.
The equivalent leadership activity for this is aligning people. This means communicating the new direction to those who can create collations that understand the vision and are committed to its achievement.Finally, management ensures plan accomplishment by controlling and problem solving—monitoring results versus the plan in some detail, both formally and informally, by means of reports, meetings, and other tools; identifying deviations; and then planning and organizing to solve the problems. But for leadership, achieving a vision requires motivating and inspiring— keeping people moving in the right direction, despite major obstacles to change, by appealing to basic but often untapped human needs, values, and emotions.
