Measuring Effective Management in Business

Measuring Effective Management in Business

            In the global market place, business has changed the expectation of its managers. This paper will look at these changes. We will also ask what are the key metrics and how can they be measured?

Measuring Effective Management in Business is an expansion of the previous work by the same author entitled Changes in Business Management (Mayo, 2012). In the previous work, an explanation of the topic, a minimal hypothesis, and brief research method were established. This paper includes a more substantial hypothesis and research methodology. In addition, a complete analysis of the research and conclusion are expounded upon to complete the study of measuring the effectiveness business managers in today's global market place.

            Managers no longer simply manage employees or processes.  They are now required to provide a leadership aspect to the employees they are responsible for.  This requires them inspire, motivate and challenge employees to work together toward a common goal. In fact, when viewed from the proper perspective this issue is very complex. Machida and Schaubroeck present in their article (Machida & Schaubroeck, 2012), "We argue that the role of self-efficacy in leader development is more complex than traditionally considered. The article also addresses influences of a contextual factors and other individual differences on a leader's self-efficacy." (para. 1)

            In times past, managers were responsible for insuring processes, policies, and procedures were followed.  A manager at a factory that made shirts was responsible to insure policies were followed and quality products were produced.  Now managers must inspire, motivate and challenge the employees to make quality products, meet production quotas and insure a low turnover ratio among employees.

            The element of leadership has been added to the role of manager for three reasons.  First, previous experience has shown that natural leaders are better at inspiring their team to perform at high levels. Sahertian and Frisdiantara hypothesizes that the (Sahertian, P., & Frisdiantara, C.. (2012)," relationship-oriented leadership affects employees' collective efficacy in the organization.".(Para 1)  Second, The growing global economy has placed new pressures on companies to produce a higher quantity at a lower price, thus a employees must work at peak performance while on the job.  Third, recent generations added to the workforce are working for more than a paycheck.  They need a reason to be there and a reason to work consistently at high levels.  Leadership is required to provide this support.  When describing the leaders that employees are looking for, Shweta asks (Shweta, 2012)," Where are the leaders whom we can look up to? Where are the leaders who were truly held accountable? Where are our role models?"(Para. 2).
            To be considered for a management position you must display a level of leadership or you will not be a successful manager.  This includes the ability not only manage your own emotions but the emotions of others as stated by Humphrey as he cites the following areas of research needed for successful leadership, Humphrey, R.. (2012),

            Leaders use emotional labor to regulate their own emotions and to manage the moods,      job attitudes, and performance of their followers. Researchers need to examine how   emotional labor is related to (i) leadership styles, (ii) leader and subordinate stress and             well-being, (iii) leader authenticity and character, and (iv) leader effectiveness. (Abstract)

The manager position no longer consists of managing processes and procedures. You must now effectively manage people.

Explanation of Topic Selection

            This topic was selected because of the ever changing paradigm in business culture.  While most larger companies incorporate leadership training in their management training often managers of smaller companies and recent graduates of lack training in the leadership aspect.  However, leadership qualities are still expected from managers at every level.  This is a source of frustration among new and younger leaders.  From this frustration has arisen a debate of whether leaders are naturally gifted in this area or if they can be taught to be good leaders.  Instead this should be judged on a leaders ability to insure that their employee have a high proximal development, especially as it related to change in an organization.  Franklin argues that (Franklin, J., 2012), " The construct of having individuals paired with more capable others will be invaluable to the process of communicating, convincing, and finally the accepting of change; and should be fully utilized by organizational leaders as they engage within their Communities of Practice (groups with common goals)" (Conc.)  Coupled with a high Zone of Proximal Learning is the measure of an employees and managers self-efficacy. Bandura writes about this extensively. He takes the discussion of self-efficacy to a higher level as he explains, (Bandura, 1988) "Social cognitive theory explains psychosocial functioning in terms of triadic reciprocal causation. In this causal model, behaviour, [sic] cognitive and other personal factors and environmental events all operate as interacting determinants that influence each other bidirectionally." (pg. 275)  Self efficacy, he believes will be able to show a leaders true abilities and allow them to effectively lead their team.

Hypothesis

            In today's business culture a traditional view of management in which managers oversee and monitor people and processes is no longer the standard norm or considered effective.  Successful managers in business today implore more leadership skills than managerial skills.  McHale emphasizes (McHale, 2012),"the importance of using a strengths-based approach to motivate and inspire the team" is a great approach to leadership.  Today's managers must effectively inspire, motivate, and lead teams of individuals to achieve high production and high quality standards on a consistent basis.

            To find a strengths-based approach that encompasses the complexity of all the issues managers face Bandura uses self-efficacy to describe all of the components necessary to measure these areas in his commentary, (Bandura, 2012),

This commentary addresses the functional properties of perceived self-efficacy in the context of a set of studies contending that belief in one's capabilities has debilitating or null effects. It encompasses four theoretical orientations. These include social cognitive theory rooted in an agentic perspective, control theory grounded in a cybernetic model, and trait self-efficacy theory and Big Five theory based on a decontextualized trait model. Critical analyses of the studies in question document their failure to fulfill key theoretical, methodological, analytical, and construct assessment requirements. (Para. 1)

          
             A measure of someone's self -efficacy is based in the study of four major Social-Psychology Theories. The measure of a manager's self-efficacy also includes the measure of employee expectations. Sahertian and Frisdiantara state that this is an important factor often overlooked in leadership research, (Sahertian, P., & Frisdiantara, C.. (2012),

Research in leadership has not given serious attention to employee expectation with an emphasis on the mediation of the impact of objectives to behavior. One important employee expectation is the belief in individuals' capabilities, which can produce sufficient progress and performance outcomes

 
            The hypothesis of this study will conclude that using an appropriate self-efficacy measurement will provided an effective measurement of a leaders current and future abilities. A measure of self- efficacy will provide a strengths-based approach which is suggested as McHale (2012) as essential. It will also address the manager and employee expectations notes by Sahertian and Frisdiantara (2012) as significant.

Research

            The research in this study will use scholarly journals to assess the three key areas of change in management previously established. It will also seek to answer the question, can a measurement of self-efficacy determine if a manager is currently effective or has the potential to be effective in a management role?  An example of effective self-efficacy measuring tool is the Leader Self and Means Efficacy used to measure leadership by Hannah, Avolio, Walumbwa, & Chan,.  The (Hannah, S., Avolio, B., Walumbwa, F., & Chan, A.,2012), "Leader Self and Means Efficacy (LSME) is conceptualized as leaders' level of perceived capability to self-regulate their thoughts and motivation, draw from means in their environment, and act successfully across a span of leader challenges and tasks in their current context." (Abstract). We will not look at specific models for testing self-efficacy. That is not included in the scope of this study. We will focus on the effects of proper self-efficacy models being used and their results as an effective tool in measuring a leaders ability and success.

Discussion

            The measure of a managers self-efficacy takes away the pretences and perceptions of the manager. The self-efficacy is a measure of one's perceived abilities authentically. This is imperative to establish transparency and effectively measure a mangers self-efficacy as indicated by Peus, C., Wesche, J., Streicher, B., Braun, S., & Frey, D. when they state (Peus, C., Wesche, J., Streicher, B., Braun, S., & Frey, D., 2012),  "presenting one's authentic self to others, as captured in the component of relational transparency also presupposes that one knows one's values and strengths as well as weaknesses." (pg. 333) A measure of one's self-efficacy takes this transparency one step further because it goes beyond the managers self perceptions.

            The concern with using other models such as self-directed success as a measuring tool is the lack of consistency. This tool measures from a mangers self-perception. It requires the manager to determine the amount of study, practice, and self learning needed to establish competency. Bandura establishes the fallacies of this when discussing this topic he states (Bandura 1988), "If people have had sufficient practice to convince themselves of their new effectiveness, they apply the skills they have been taught weakly and inconsistently. They rapidly abandon their skills when they fail to get the quick results or when they experience difficulties."(pg. 277) To be successful and to measure success in managers we must go beyond self-perceptions and self-directed success. Measuring a mangers self-efficacy has been shown to succeed as a predictor of how a manger is performing and their ability level. Bandura explains (Bandura 1988), "People with a strong sense of efficacy focus their attention on how to master tasks. Those plagues by self-doubts dwell on all the things that can go wrong."(pg. 280) This is much more than a positive mental attitude as complex situations arise. When the effects of self -efficacy in managers are applied to the specific concerns in the current global marketplace they will produce sufficient differences to offset hindrances to implementation.

Motivating employees.

            A strong self-efficacy maintained by a manger will result in employees with a greater belief in that manager. The self-efficacy then multiplies itself in their efforts. Bandura explains this when he states (Bandura 1988)

The stronger the belief in their capabilities, the greater and more persistent are their efforts. When faced with difficulties, people who have self-doubts about their capabilities reduce their efforts and settle for mediocre solutions or give up altogether, whereas those who have a strong belief in their capabilities exert greater effort to master the challenge.(pg. 283-284)

   

A business owner would benefit greatly from an investment in a study in the measurement of their managers self-efficacy. This would result in a manager that is more effective and can also motivate employees by enhancing their self-efficacy. 

Reduction in costs.

            A concern among business owners in a global marketplace is the ability to reduce costs. Maximum efficiency is leading cost cutting measure. Sahertian and Frisdiantara conclude that self-efficacy of not only managers but employees contribute in this area (Sahertian, P., & Frisdiantara, C. 2012), "Meanwhile, employees' personal self-efficacy can predict their commitment to the collaboration with the customer. Relationship-oriented leadership can also directly and indirectly affect employees' commitment to the organizational mission and the improvement of effective performance." (abstract) Business owners value employees that are committed to the mission of their business. These owners pay consultants a significant amount to insure that they have a direct established mission. This investment would be increased if all of their employees valued this mission. If every manager and employee gain improved performance, this would result with increased production and fewer quality control issues.

Collective efficacy.

            High levels of self-efficacy are desired in managers. In his study, Domsch concluded that the levels of efficacy in leaders directly affect those they manage directly and indirectly. He studied the efficacy of elementary principles and the impact on both the teachers and students at each school. His study found (Domsch, n.d.), " Significant effects were found in teacher efficacy means for both enrollment and socio-economic level of schools. Teachers had higher efficacy in schools with smaller enrollments and lower student socio-economic levels." Outside factors such as enrollment and socio-economic levels did not have effect on the study. A leaders self-efficacy was greater factor in determining the efficacy of the employees and students. This has such a great impact that Domsch goes on to tell (Domsch, n.d.), " principal efficacy scores tended to trend positively with student achievement scores. The study found support for the use of efficacy scales as formative assessment tools for administrators and teachers." Efficacy scales in this study showed that the principle or manager raised the overall efficacy of the entire school.

Conclusion

            In the global marketplace, pressure has increased for business to be more productive and profitable. As a result, this pressure has been passed to managers with the business. This paper has established that a predetermining of a mangers ability can be found in a measure of their self-efficacy. Self-efficacy can be measured by assessment tools such as the Leader Self and Means Efficacy and other industry specific efficacy assessment.

            A managers with high self-efficacy can motivate their employees, reduce business costs, and raise the level of efficacy of their employees. To be successful in the global marketplace a business investment of studying their managers self-efficacy would be beneficial to the bottom line of the business.  This would also produce a strong business that could adapt to turbulent marketplace conditions with the ability to adapt and change as needed to remain profitable.

References:

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Domsch, G.. A study investigating relationships between elementary principals' and teachers' self-efficacy and student achievement. Ed.D. dissertation, Saint Louis University, United States -- Missouri. Retrieved July 6, 2012.

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