Problems expected. The theory of Management By Objectives

Problems that have arisen could be due to the differences
in personalities. The chief executive has a more extraverted personality as he
is “keen” on “rapid expansion” whereas the employees are more conscientiousness
as they are more “cautious” and don’t want to open new offices where there is
risk. Therefore, what we have now is a clash between personalities. (Graham,
2009) It is evident there is now conflict within in the workplace that needs to
be addressed. This is where another issues arises as the conflict is not being
addressed which has resulted in “strained” relationships and, furthermore, the
finance manager resigning. There is a lot of staff turnover happening in the
company which will have a detrimental effect on the company if no action is
taken. Moreover, in order to overcome the issues there is a need to increase
cohesion as it is evident communication has declined which has resulted in the
team falling apart. A meta-analysis found that cohesion is significantly
related to performance in a variety of teams (r = 2.48; Mullen &
Cooper, 1994). Without cohesion there is a lack of communication which also
means no progress being made to come up with a solution to the problems which
is fairly obvious within this team.

There is a problem in the way the change was presented to
the managers. As rapid expansion would be a big change it needs to be presented
to its employees in a steady manner where they can understand why the change is
happening and be on board with the chief executives ideas. Right now, all
managers have different goals and for this reason problems are arising. From a
Social Identity Perspective in order to manage conflict the teams should re-
categorise by creating and emphasising shared organisational goals and rewards.
(Van Knippenberg, 2002) This is important as the goals of the team are very
unclear and by creating superordinate goals it will resolve many issues as
teams will communicate more to obtain the shared goals as they will have a
clear image of what is expected. The theory of Management By Objectives (Weihrich & Mendleson, 1978) states that
employees are generally more committed to goals that they have helped to
create, therefore, it is important the employees take part in implementing the
goals with the chief executive.

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Moreover, to overcome these problems there should be
strategies in place to stop the situation from getting worse. For example, the
employee that is off sick because of stress, there should be a stress policy in
place where she can talk about it and overcome issues.  Furthermore, there is a clear need for
conflict management.  There needs to be
communication, problem solving and then negotiating to come to a common
interest to avoid any conflict which is what is happening in this company. (Rahim,
2002) Another issue is with the management style, a more obliging or
accommodating style is needed this is where two parties cannot agree which is
causing the conflict for instance in this case between the leaders and the
chief executive, therefore, if the chief executive used a more accommodating
leadership style (Blake and Mouton, 1964) some of these issues can be overcome.

Currently the chief executive has a more dominating style,
this is where he is more concerned with his own interests than the teams. For
example he wants rapid expansion. His style is assertive as he is being co-operative
with his teams concerns who believe that the way the business is running is
fine. (Rahim and Buntzman, 1990) A case study that looked at the relationship
between leadership style and job satisfaction found a positive significant
correlation between a dominating style and low job satisfaction. (Ali, 2006) This
provides further proof that the style is ineffective as it will make the team less
satisfied and there will be more staff turnover which is what is already
happening. Therefore, a change of leadership style is a priority. (Rahim
and Buntzman, 1990).

In order to implement changes effectively the manager can
use Lewin’s change management model, to manage change. The team right now is in
the unfreeze stage as they are not motivated by the change so there is a need
for this. The manager needs to promote effective communication and empower the
team to embrace the new change. Then the team will go into the refreeze stage
where you return the organization to a sense of stability.(Lewin,1947)

In conclusion, the problems have arisen due to
conflicting personalities, different goals, leadership style and also the way
the change was being implemented. This resulted in conflict, which did require
communication and a solution, however, it is evident communication was low as
it resulted in the staff becoming stress and leaving the job and leaving. To
address these issues the Chief executive should demonstrate the ways in which
change can actually improve the company and maybe the role of the employees
too. This can be done by meetings and giving data to prove how the change will
be effective. There is a need to emphasise the goals of the company and make
sure everyone is striving to reach the same goals and is clear on what these
goals are. This will then give the employees a more insight of what the future
holds and will make the more comfortable to go ahead with change.