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With Reference to Specific Business Examples Reported In The U.K Business Press, Critically Evaluate The Effectiveness Of Participative Decision - Making.

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With Reference to Specific Business Examples Reported In The U.K Business Press, Critically Evaluate The Effectiveness Of Participative Decision - Making. Name: Rupal Patel Module Code: 4HRB601 Student Number: 01073225B Date: 18/11/04 Subject: Managing Business Organisations Word Count: 2591 Module Leader: Amanda Rose Seminar Tutor: Amanda Rose In the business world today, there are a number of decision-making techniques that management can apply, to help improve the quality of the final outcome. One of them being Participative Decision Making (PDM). The following essay is based on critically evaluating the effectiveness of PDM, with reference to specific business examples reported in the UK business press. In order to do this, it is necessary to gain background knowledge of PDM, including how it came to arise and its positive and negative attributes. The business examples will be incorporated in order to support both aspects. Once this is established, it will help to form an overall critical evaluation of the effectiveness of PDM. The founder of Participative Management (PM) can be associated with Dr Alfred J. Marrow (1947), who was the CEO of the Harwood apparel manufacturing company.1 He observed that the company's workforce consisted of poorly educated young women, thus resulting in low productivity levels, and in effect, kept declining nearly 25% every time a change was introduced. Due to this, there became great concerns regarding the causes of the workforce behaviour and how to improve it. As a psychologist, Dr Marrow and his colleagues discovered a positive relationship arising between productivity levels and the amount of decision-making employees held. In general, if employees were given the opportunity to make meaningful decisions regarding their own work, then this would lead to nearly a 14% increase in productivity levels. ...read more.


Also in order to strengthen the employees' commitment to manufacturing only the best products, production workers were made into marketing emissaries for the company's product. This would anticipate to have had a knock on effect as the workers would hopefully have a greater sense of responsibility for output, after having formed personal relationships with customers and dealers. Another aspect the company had adopted was to encourage employee involvement in retaining customer relationships and examining product-quality feedback. Overall, by allowing its employees to maintain more responsibilities and with the additional training, this had hopefully set them up for their new roles. The results produced seem clear that Deere & Company has benefited from these new changes involving the employees, as it has helped to overcome the challenges they initially faced. A more recent example of the positive effects of PDM is noted in the recent turmoil of British Airways (BA), where employees were never given a say in decision making and thus resorted in strike action and a contempt for the company. The CEO, Rod Eddington, finally changed the structure to incorporate a wider influential say with his employees, in effect applying the features of PM, which has overall helped to improve the situation they faced. Now we turn our attention to the other side of PDM, which views it as not working in all situations. It can be presumed, that it is the very strengths of a group that are also its weaknesses. In one sense the outcome of group decisions can be of lower quality than individual decisions, as they may be affected by the group members' attempts to retain friendly relationships among themselves. ...read more.


However PM, when applied to certain situations, can be viewed as being effective and to obtain better results management can apply a contingency approach. For example, whilst attempting to solve problems, the type of interaction or quality of communication between managers and employees can strongly influence the effectiveness of participation. The key elements required for an effective participation is a constructive interaction that emphasises cooperation and respect, in comparison to competition and defensiveness. In relation to complex tasks, it is vital to formulate mechanisms to improve communication effectiveness. In conclusion, looking at the arguments of PDM, it seems the benefits of PDM far outweigh the drawbacks. The main advantage is that PDM emphasises that each individual can provide a significant involvement in reaching the organisations aims. From a management perspective, all the positive and negative attributes of PDM must be weighed, factoring in unique organisational situations. Thus businesses should only use a group authority to make decisions, only at times, when the advantages of implementing it, outweigh the disadvantages. It is vital to acknowledge that the effectiveness of PDM will depend upon factors such as the design of work, the level of trust between management and employees, and the employee's willingness to participate which will all have a profound influence on it. However, as previously mentioned, to maximise the efficiency of PM, employees should be fully trained, prepared, and interested in participating. I feel that overall PDM is effective in certain situations, however the process of implementing it must be monitored and managed well by top management. This can be supported by recent business examples, such as BA, who are now adopting a PDM approach, so as to successfully compete in the global economy. ...read more.

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