Mismanagement

Mismanagement in Today’s Enterprises

Mismanagement has become the standard in today’s enterprises. It is defined as a failure to handle the management functions of organizing, planning, and controlling. Mismanagement can be passive, involving senior management’s failure to control or plan. It can also present itself in an active form which entails ineffective control, inadequate decisions and bad control. Managers at the highest levels are expected to do their jobs diligently, but this is not always the case. Mismanagement by top leaders has brought organizations to their knees. BHS, one of the most profitable organizations in the world was run down by incompetent management. Despite having various measures in place, the management developed ways of surpassing the systems and making decisions that eventually drove the company out of business. The research paper focuses on how the management of BHS brought it down. Some of the major causes of the collapse of the company such as training, hiring, development and succession of leadership, corporate culture and performance management methods are discussed. Furthermore, the paper goes ahead to recommend some of the policies the company should have developed to ensure its survival.

Contents

1.0. Introduction 4

2.0. How Human Management Crashed BHS 4

2.1. Rewards and Credit 4

2.2. Training 5

2.3. Hiring 5

2.4. The Performance Management Method 6

2.5. Corporate Culture 6

2.6. The Development and Succession of Leadership 7

2.7. Retention 7

2.8. Assessment of the risks 8

2.9. Mismanagement of funds 8

3.0. Conclusion 9

4.0. Recommendations 9

5.0.

References

11

How Human Management Crashed BHS

In many instances, there have been cases of employees failing to do what is expected of them and eventually leading to poor management. Poor management has been the cause of management failure, and BHS is among these companies which had gone through the same experience (Jeston & Nelis, 2014). It has been found the company lost nearly $156 million per week due to poor managerial skills applied in the enterprise. The long-term effects of the root causes which results in the current situation within the firm could cost it hundred billion dollars if not attended as soon as possible. The primary failure was well known by the company even before some actions were done and those who were close to the problem indicated that the firm took important measures to cover up the truth and also distort the scope of the problem. Being unable to act on the issue in the manner which is steady with the firm’s brands and services is similar to what went on in Enron (Pettinger, 2013). When BHS company, rewarded the managers in inappropriate manner for such containment in regards to the sustain the quality of the product came up with an incentive for all who were involved in the matter to ignore the truth and also deny that the issue was there. The workers who are skilled and is focus to the balance prizes and also performance evaluation schemes could have made the circumstance worse.

Rewards and Credit

Employee rewards and credit is the formal or informal acknowledgement of a team or person’s business results, effort or behavior that are in line with the values and goals of the organization. Appreciation is a fundamental human need as people would like to be valued and respect for their efforts in their work. Recognition and rewards enhances work relationships, retention of employees, satisfaction and increased individual productivity. At the same time, reward process assists in gathering the ideas about the issues that affect employees in their places of work (Bamberger, Biron, and Meshoulam, 2014). It is paramount to credit workers who are very successful in getting the administration to the instant action on the issue which is negative (Aswathappa, 2013). BHS had put in place a system of rewards for employees and the managers. However, the managers rewarded themselves huge bonuses that affected the profits of the company. In addition, no proper reward structure was developed. There were no yardsticks for measuring employee performance.

Training

The Occupational Safety and Health Administration (OSHA) promulgated various standards that require employers to train employees on the health and safety aspects of their jobs. OSHA believes that training is an important part of an employee’s health and safety program that protects workers from illnesses and injuries. BHS firm did not train its workforce on proper safety regulations and as a result broke the law. In addition, the company put the safety and health of its employees at risk and would have been liable had they been sued for damages. The aim of training is to ensure that workforce get enough skills to handle their duties in an organization (Tucker, et al., 2014).

Hiring

Hiring is an important process to any organization as it determines the direction the firm will follow. Hiring involves the process of selecting the best candidates for a particular job. The Human resource department at BHS had issues with their hiring process. The interviews conducted as well as the selection of candidates were not transparent. The employees who were brought in to propel the organization to greater heights were the same who brought it down. The HR department hired people who could not challenge the status quo. They observed as rules were broken by the top management and did nothing. They were too afraid to stand up to the manager for fear of victimization. In addition, the inexperience of the hired employees also contributed to the firm’s fall from grace. Majority of the employees did not have the knowledge to handle challenging situations they faced. The training that was offered to the employees also turned out to be ineffective due to the talent hired. They were not of quality and even training could not bring them to the level required by the company.

The Performance Management Method

The main aim of performance administration process is to evaluate the performance of workers. Performance measurement within the firm is aimed at identifying behavior issues and attempting to correct the before they get out of hand. We can find that if the performance evaluation scheme involved the performance factors in examining the responsiveness to the contrary ideas, we are sure that BHS could be in a better position as at now. The process of performance appraisal within the firm was poorly designed. The company did not generate a report to indicate to them the errors which were within the company. Its high-level trust of its employees went too far to the extent that employees became negligent in their duties. The human resources manager created some complex parameters that affected employees and did not inform the senior management of the impending issue before they got out of control.

Corporate Culture

Organizational culture plays a significant role ensuring that people’s behavior is driven towards the core values and principles of an organization (Klein, 2011). The human resource manager of BHS Company failed to evaluate or even scrutinize the corporate culture which led to misalignment between the company’s and employees’ goals and objectives. The business culture of BHS was so prejudiced towards the positive ideas that the workers overlooked important security problems that caused loss of the company’s property (Kumar, 2014). The culture with the corporate office was not strictly monitored but it was assumed that it was aligned.

The Development and Succession of Leadership

The development and succession of leadership aims at ensuring that enough number of leaders with relevant skills and experience are put in the central leadership positions. We find that the leadership promotion and development approaches failed to develop and promote leaders who were in a position to tackle and face the issues and also make sophisticated decisions at BHS (Kourdi, 2015). The leadership of BHS was outdated and it came up with the wrong kind of leaders who had old-fashioned ideas. They were not able to successfully operate and transform the industry. This not only gave BHS competitors an upper hand but also threatened the survival of BHS which was not innovative enough to become the leader in the industry.

Retention

Retention means to find and keep the top performing employees who are oriented to perform at the highest levels. These leaders are in the position to tackle global issues and enable the firm to outdo its rivals within the market (Elnaga,& Imran, 2013). However, what was significant at BHS Company was its inability to identify and retain individuals who could bring up issues and solve the problems within the company. Employee retention involves a variety of activities aimed at ensuring employees are satisfied in their jobs. Open communication, promotion from within the company, employee development, financial rewards and communication of business mission among others are some of the ways to retain employees. Unfortunately, BHS did not value its members of staff and it lost some of its best talents to competitors.

Assessment of the risks

Many human resource departments do not evaluate the risks which are aimed at identification and calculation of the risks that are caused by employees who cannot complete their duties effectively (Mullins, 2007). The HR of BHS firm did not work hand in hand with the risk assessment team and develop the ability to find the revenue effects of key error of human resource, high rates of turnover among employees and also the high incidence of hiring failure. The human resource of BHS firm should have cooperated with the assessment team to ensure that workers were in a position to scheme the expenses of ignoring the product collapse ideas. Identification and measurement of risks would have helped the company to come up with strategies aimed at minimizing or eliminating the risks altogether.

Mismanagement of funds

Funds are the resources which are needed by the firm to run its daily and future operations. The management of funds should be put in the hands of individuals who are trustworthy and incorruptible (Jim and Shinde, 2015). The failure of BHS was a clear indication that there were not adequate internal control systems to control the management of funds. For instance, the funds allocated for staff appraisal and also the money intended for conducting the interviews for the recruitment of new staff were channeled into other activities. As a result, the staff was not appraised and the organization was not in a position to determine the performance levels of every employee. We also find that competent workforce was not hired due to inadequate resources aimed at identifying, recruiting and training the best talent available in the market.

Conclusion

The failure of BHS is not as a result of one person’s mistake but due to interconnected failures from several departments. The company was filled with incompetent staff members, starting from the top management until the low-level employees. The administration failed to meet the standards required to operate a multinational firm through adoption of poor policies and lack of accountability. Employees at the organization were poorly trained, motivated and lacked leadership. Staff members are the most important people in any organization. Once they fail in their duties, an organization is always doomed to fail as in the case of BHS. The lack of internal control strategies is what was majorly lacking and the leadership ought to have brought in experts such as external auditors to help them in organizing the activities and operations of the business.

Recommendations

The process of performance appraisal with the firm was poorly designed in that they did not find the report to indicate to them the errors which were within the company. The company should have considered developing a proper performance appraisal framework that could accurately measure and evaluate the performance of every employee. Due to inadequate risk assessment tools, the human resource of BHS firm should have cooperated with the evaluation team to make sure that employees were in the position of calculating the costs of ignoring the product failure ideas. The human resource manager of the BHS firm should measure or even monitor the corporate culture which leads to alignment. In addition, they should ensure that the corporate culture is communicated to every employee and that their goals are in line with that of the organization.

While training managers the BHS should concentrate more on developing skills and knowledge that are relevant to steering the operations of the company. All employees should also be trained on health and safety measures to reduce the risks of injury or illness at work. During its recruitment process, the company should scrutinize and select the best talent rather than hiring mediocre employees who do not bring in new ideas on how to manage the firm. Majority of the issues which were brought in were as a result of the failures of the human resource department. Thus, it is important that the organization does a clean-up of the department and replace the incompetent employees with experienced and energetic individuals who can work together as a team.

References

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Bamberger, P.A., Biron, M. and Meshoulam, I., 2014. Human resource strategy: Formulation implementation, and impact. Routledge.

Elnaga, A., & Imran, A. (2013). The effect of training on employee performance. European Journal of Business and Management, 5(4), 137-147.

Jeston, J., & Nelis, J. (2014). Business process management. Routledge.

Jim, S. and Shinde, J.S., 2015. Crisis management at Toyota. Advances in Management, 8(2), p.16.

Klein, A., 2011. Corporate culture: its value as a resource for competitive advantage. Journal of Business Strategy, 32(2), pp.21-28.

Kourdi, J. (2015). Business strategy: a guide to effective decision-making. PublicAffairs.

Kumar, N.P., 2014. Human resource management in future an obstacle of champion of globalization. Human Resource Management, 1(1), pp.49-57.

Mullins, L. J. (2007). Management and organisational behaviour. Pearson Education.

Muratbekova-Touron, M. and Pinot de Villechenon, F., 2013. A BRIC MNE’s subsidiary in France: human resource management in adaptive mode. Journal of Business Strategy, 34(5), pp.48-53.

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Tucker, A. L., Heisler, W. S., & Janisse, L. D. (2014). Organizational factors that contribute to operational failures in hospitals.