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Management Problems

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This essay will discuss three problems within JJs. They are JoeЎЇs centralised power, conflict between Kurt and Marama and ineffective marketing strategy. They will be analysed, by the theory of law, management, social science and marketing on the power and cultureЎЇs perspective, to view how leader exercises the power to effectively manage his business and employees, how power and culture influence the organisationЎЇs operation and how power and culture contribute a companyЎЇs marketing strategy.

The first problem in JJs is JoeЎЇs centralise power without empowerment to subordinates. Executive leader can benefit by a knowledge of power sources in order to influence others to achieve organisational goals. Different power types in organisation lead positive and negative motivations to staff (Bartol, Tein, Matthews & Martin, 2005). Because coercive power emphasises on punishment, staff will have resistant feeling, work passively, lack enthusiasm and even undermine organisational goals attainment. Staff feedback to legitimate, reward, information power is compliance, so staff will behave obediently and make minimum effort to work. As for expert power and referent power, because the powers come from staff admiration to the leader, so staff will be willing to work hard and be devoted to organisational goals. Take an example of JoeЎЇs leader power in JJs. He develops coercive power and intimidates his staff, so his staffs refuse to work more, when there is work to be done. The theory of leadership and power suggests that leaders must be able to recognize powers play in organisation and rely on some or all of them effectively to lead employee.

A limited liability company is a separate legal entity existing under Companies Act 1993. Although a company is owned by shareholders and operated by directors, it has its own identity separate and apart from its shareholders and directors. Therefore, a company is a juristic person, obviously not a human being. As the management of power is relied on directors, Companies Act 1993 indicates ÐŽoa director of a company, when exercising powers or performing duties, must act in good faith and in what the director believes to be the best interests of the companyÐŽ± (Government NZ, n.d., para.131). An example in JJs suggests that Joe, as the director and CEO of company, does not treat JJs as a separate legal entity and excise his powers properly. Joe is JJsЎЇ shareholder as well as Apex shareholder with a 30% shareholding in that Joe gives JJsЎЇ replacing equipment business to Apex, although Apex quots is 20% higher than another companyЎЇs. Company, shareholder, and director are not one. The entity principle indicates that in spite of the directorЎЇs, as a shareholder, dominating position in the company, he should serve for the companyЎЇ interest, due to companyЎЇs separate legal personality.

Organisational structure, which formed and developed by the leader, influences culture. According to Burns (2005), mechanistic structure is small span of control, high formalisation, centralised decision-making, whereas organic structure is wide span of control, low



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