EFD Ltd is a cross-listed electric power distribution company. The company is planning to diversify into renewable and
clean energy sources. When JL took over as CEO in 2020, EFD was a traditional, hierarchical, command-and-control
workplace – a bureaucratic organisation. This is one of the few businesses in the region that is still able to operate a
traditional company that provides control and stability. At the top of the organisational structure (below the board of
directors) is the CEO and senior management. In the middle of the structure are middle managers and lower-level
managers and at the broad base are employees. At EFD, top management make all the major decisions which are
communicated to middle-level and low-level management. These managers must then implement the decisions among the
rank-and-file workers. However, input is required or solicited from employees though ultimate authority rests with top
management.
Through a preliminary study report on current management practices at EFD, JL is amazed by the primary advantage of a
traditional organisation structure in 21st Century. It keeps decision-making authority in the hands of a few people within
the business and in doing so, it eliminates confusion among employees about who is in charge and provides a clear
message about what workers are expected to accomplish in the performance of their duties. Other key findings of the
study are as follows:
- A bureaucratic context as found in EFD is characterised by job specialisation which enables employees to have a
well-defined rules of productivity.
- When the bureaucratic approach is implemented effectively, the impersonal nature of interactions that are
established leads to a number of benefits. Equality is emphasised and stressed; friendships do not influence
decisions that are made; and, the rules and regulations ensure that there are precise instructions for job functions
and expectations.
- Top managers in this company are in a position to make tough decisions although guided by efforts of the
respective workforce.
- Employees are empowered to make decisions without fear of the consequences as the decisions they make
correspond to what the managers want.
- The lines of communication are open, giving the organisation an opportunity to develop, and involving all the
employees in the decision making process.
- The idea of job specialisation brings some benefits to the organisation as it generates efficient, repetitive
workflow.
- Each department has particular powers enabling managers to monitor their employees more easily and ensuring
that they stick to their tasks.
- The employees are conversant of what is expected of them and what their powers are within the organisation.
- The managers are organised into hierarchical levels where each level of management is in charge of its
employees and overall performance.
- Bureaucratic power is extremely autocratic and strict observance to rules may prevent the implementation of
appropriate measures required to accomplish organisational objectives.
- Employees hired get promoted based on their unskillfulness – a proficient manager will continue to be promoted
until the moment they are incapable thus remaining to that position until they retire or die.
- Due to the applicable rules and regulations, there is less autonomy to act or make personal decisions.
- Adapting to change in this type of organisation is very challenging – it takes time to come up with new rules,
regulations and strategies to the new contexts that have transformed.
- The employment to an office and the management of the various levels in this organisation are based exclusively
on the grounds of technical proficiency.
- Bureaucratic rules and regulations seem to be obstructive when unexpected situations occur.
- In a subsequent strategy meeting with all the managers, JL makes the following observations:
- That there are certain elements of management which are timeless, but environmental shifts also influence the
practice of management.
- That in recent years, rapid environmental changes have caused a fundamental transformation in what is required
of effective managers.
- Technological advances such as social media and mobile apps, the rise of virtual work, global market forces, the
growing threat of cybercrime, and shifting employee and customer expectations have led to a decline in
organisational hierarchies and more empowered workers which calls for a new approach to management that
may be quite different from managing in the past.
A decision is made during the meeting that instead of trying to promote ideas and innovations through traditional
structures, EFD should align its structure in such a way that ideas and innovations can prosper. A committee of five
members drawn from the three levels management is formed to study the shift from the traditional management approach
to the new management competencies that are essential in today’s environment.
Required:
As a member of the strategy committee you are required to provide data by answering the following questions that relate
to your terms of reference and in the context of the above case:
(a) Through secondary research, identify and explain five management competencies that are becoming crucial in
today’s face-paced and rapidly changing world.
(b) Compare and contrast Max Weber’s bureaucratic theory and systems thinking in the context of management of
an organisation.
(c) Illustrate the process of how managers use resources to attain organisational goals through the functions of
planning, organising, leading and controlling and briefly explain each function.
(d) Advise the CEO of EFD on sources of leader power and the tactics that leaders use to influence others especially
in time of organisational change.
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