Organizations and Types of Relationships

Organizations today live in highly dynamic environments. Essentially the existence and growth of the business is dependent upon several external and internal factors such as highly segmented geographical markets, aggressive competition and shorter life cycle. These and many more factors exert a lot of pressure on the Organizations to innovate both in terms of its product offering as well as in its organizational development and ways of conducting business. Revenue and profits do form the primary basis of its business transactions. However in the long term growth perspective Organizations have got to be able to manage both external and internal relationships on the basis of the values and culture on which it is founded. Share Holders Gone are the days when share holders were a community content with the returns they received from the Company and went along with whatever the Managements thought good. Managements today are seen becoming increasingly answerable to the share holders.

Recently we have seen several cases where CEOs of the Companies having been voted out by the share holders for not falling in line with the thought process of the Organization and the share holders. We saw major changes in Hewlett Packard wherein the shareholders took the call to change the management and the strategic approach of the Company to business.

Organizations today exist in a situation which demands that they extend products and services as well as keep investing into building products and technology for tomorrow. If the business needs to exist and grow there is no option but to invest into the future. Therefore the shareholders take the centre stage when it comes to approval of and financing the Organisational business and growth plans. Shareholders today are aggressive demanding that the Organization walk the talk when it comes to the bottom line as well as in terms of its culture. Brands like IBM, HP and GE etc are more vulnerable to the stake holders as well as to the public as an Organization. These and other Corporate are using internet, Multimedia and websites to speak to the investors and extend the relationship with the share holders and investors. Internet platform allows the corporate open up relationship with the share holder community on an interactive basis thus giving the Company the control on how to manage the relationship as well as build investor confidence.

For Companies that are looking for investments to fuel their growth engines, there exists a need to demonstrate and cultivate the right corporate image and capability besides the past performance figures which alone will not help attract investors. Companies are therefore engage in Public relations as well as corporate communications to reach out to the prospective investor public as well as institutions to build the right kind of corporate image. Image building and relationship building become the long term strategy of the corporate communications of the Organization.

Social Responsibility

In the recent times the social responsibility and attitude of the Companies towards their responsibilities is becoming more and more visible and public. NGOs and specific interest groups are taking the lead in keeping track of and benchmarking social responsibility performance of the Corporate thus making them accountable. The brand image of the Organization is definitely affected by the way it is managing its social responsibility with the community, investors as well as policy makers being active participants as watchdogs.

Organizations have had to engage with the communities by way of participative activities as well as using communication strategies and by maintaining and managing relationship to be able to get across the right perspective as well as the right information. The recent example of GAP having had to withdraw from sourcing clothing from Indian Companies and suppliers who engaged child labour in the production lines is an ideal example which showcased the power of the community and the stake holders forcing the Company to take immediate action and use its relationship to project the right image for itself. The recent oil spill of BP in the west coast is another ideal case for study of how BP manages the relationship with the Govt, with its share holders, with the affected communities as well as manage its social responsibility.

Organizations and Relationship Marketing

Traditionally with Organizations the customers belonged to and were the responsibility of the Marketing Department alone. Organizations probably had too many constraints on meeting the demands and were saddled with limited product range that did not require them to look out and reach out to the Customer. However with evolution of technology, mass production processes as well as expanding geographical markets, the Organizations began to realize the need to reorient their understanding of the business and the way to manage the business. To a large extent we can very well say that the Customer Relationship Marketing did not originate only in the marketing department. It developed as an Organizational approach and management thought. Management experts and Organizations have come a long way in terms of their outlook to the internal and external environment. Today Organizations have begun to understand and recognize the relationship that exists between the Stockholders, the Employees and the Customers who provide the reason as well as the resources for the Organization to exist and grow.

There exists a mutually inclusive relationship between all the three factors. Organizations need to manage the relationship dynamics on all the three fronts. This understanding has further brought about the Management thought and approach to orient and imbibe Relationship Marketing as an Organizational Philosophy.

An Organization does not recognize the customer in the market to be the only stake holder in its relationships. The Company has ongoing relationships both internally as well as externally at many levels and tiers. The Company strives to build excellent and long term relationships with its strategic suppliers as well as the intermediaries important for its business. Sales and Distribution partners including whole sales, channel partners as well as point of sale retailers form a part of the chain which needs to be handled via the relationship platform.

The number of relationships that the Organization is required to manage are spread over several areas. Ongoing Relationship Management with Current Employees as well as prospective employees becomes very important for the Organization as the Human resource is a key resource for its business. Besides the employees, suppliers, as well as the Customers and intermediaries, the Organization has a relationship that needs to be managed with the public, Government as well as media too.

Therefore it should be very clearly understood that Relationship Marketing is a business philosophy and not a marketing strategy. Of course Marketing strategy and plans are built around this Organizational philosophy and value of Relationship Marketing.

Managements have successfully adapted to the concept of internal and external Relationship Marketing and have benefited immensely from it. Internally the concept of internal customer has yielded tremendous advantageous and brought about efficiencies in operations. TQM, JIT, Six Sigma philosophies have been successfully implemented thanks to the fundamental concept of internal customers and customer satisfaction.

Apart from marketing and sales functions which are exposed to the Customers and markets and hence need to be sensitized and oriented towards relationship management, the Organizations have realized the need to sensitize the other departments including Finance, HR, Technical Service, Customer Service as well as the Product Development and legal departments towards relationship Management with he customers. This orientation has benefited the Organizations immensely besides changing the service dynamics for the customers.

Importance of Motivation

Motivation is a very important for an organization because of the following benefits it provides:-

1. Puts human resources into action

   Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources.

2. Improves level of efficiency of employees

   The level of a subordinate or a employee does not only depend upon his qualifications and abilities. For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result into-

   1. Increase in productivity,
   2. Reducing cost of operations, and
   3. Improving overall efficiency.

3. Leads to achievement of organizational goals

   The goals of an enterprise can be achieved only when the following factors take place :-

   1. There is best possible utilization of resources,
   2. There is a co-operative work environment,
   3. The employees are goal-directed and they act in a purposive manner,
   4. Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation.

4. Builds friendly relationship

   Motivation is an important factor which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things:

   1. Monetary and non-monetary incentives,
   2. Promotion opportunities for employees,
   3. Disincentives for inefficient employees.

   In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a manager. This would help in:

   1. Effective co-operation which brings stability,
   2. Industrial dispute and unrest in employees will reduce,
   3. The employees will be adaptable to the changes and there will be no resistance to the change,
   4. This will help in providing a smooth and sound concern in which individual interests will coincide with the organizational interests,
   5. This will result in profit maximization through increased productivity.

5. Leads to stability of work force

   Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. This will lead to a good public image in the market which will attract competent and qualified people into a concern. As it is said, “Old is gold” which suffices with the role of motivation here, the older the people, more the experience and their adjustment into a concern which can be of benefit to the enterprise.

From the above discussion, we can say that motivation is an internal feeling which can be understood only by manager since he is in close contact with the employees. Needs, wants and desires are inter-related and they are the driving force to act. These needs can be understood by the manager and he can frame motivation plans accordingly. We can say that motivation therefore is a continuous process since motivation process is based on needs which are unlimited. The process has to be continued throughout.

We can summarize by saying that motivation is important both to an individual and a business. Motivation is important to an individual as:

1. Motivation will help him achieve his personal goals.
2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of individual.
4. An individual would always gain by working with a dynamic team.

Similarly, motivation is important to a business as:

1. The more motivated the employees are, the more empowered the team is.
2. The more is the team work and individual employee contribution, more profitable and successful is the business.
3. During period of amendments, there will be more adaptability and creativity.
4. Motivation will lead to an optimistic and challenging attitude at work place.

Motivation Incentives – Incentives to motivate employees

Incentive is an act or promise for greater action. It is also called as a stimulus to greater action. Incentives are something which are given in addition to wagers. It means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody acts without a purpose behind. Therefore, a hope for a reward is a powerful incentive to motivate employees. Besides monetary incentive, there are some other stimuli which can drive a person to better. This will include job satisfaction, job security, job promotion, and pride for accomplishment. Therefore, incentives really can sometimes work to accomplish the goals of a concern. The need of incentives can be many:-

1. To increase productivity,
2. To drive or arouse a stimulus work,
3. To enhance commitment in work performance,
4. To psychologically satisfy a person which leads to job satisfaction,
5. To shape the behavior or outlook of subordinate towards work,
6. To inculcate zeal and enthusiasm towards work,
7. To get the maximum of their capabilities so that they are exploited and utilized maximally.

Therefore, management has to offer the following two categories of incentives to motivate employees:-

1. Monetary incentives- Those incentives which satisfy the subordinates by providing them rewards in terms of rupees. Money has been recognized as a chief source of satisfying the needs of people. Money is also helpful to satisfy the social needs by possessing various material items. Therefore, money not only satisfies psychological needs but also the security and social needs. Therefore, in many factories, various wage plans and bonus schemes are introduced to motivate and stimulate the people to work.
2. Non-monetary incentives- Besides the monetary incentives, there are certain non-financial incentives which can satisfy the ego and self- actualization needs of employees. The incentives which cannot be measured in terms of money are under the category of “Non- monetary incentives”. Whenever a manager has to satisfy the psychological needs of the subordinates, he makes use of non-financial incentives. Non- financial incentives can be of the following types:-
   1. Security of service- Job security is an incentive which provides great motivation to employees. If his job is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps since he is very far off from mental tension and he can give his best to the enterprise.
   2. Praise or recognition- The praise or recognition is another non- financial incentive which satisfies the ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The employees will respond more to praise and try to give the best of their abilities to a concern.
   3. Suggestion scheme- The organization should look forward to taking suggestions and inviting suggestion schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be done by publishing various articles written by employees to improve the work environment which can be published in various magazines of the company. This also is helpful to motivate the employees to feel important and they can also be in search for innovative methods which can be applied for better work methods. This ultimately helps in growing a concern and adapting new methods of operations.
   4. Job enrichment- Job enrichment is another non- monetary incentive in which the job of a worker can be enriched. This can be done by increasing his responsibilities, giving him an important designation, increasing the content and nature of the work. This way efficient worker can get challenging jobs in which they can prove their worth. This also helps in the greatest motivation of the efficient employees.
   5. Promotion opportunities- Promotion is an effective tool to increase the spirit to work in a concern. If the employees are provided opportunities for the advancement and growth, they feel satisfied and contented and they become more committed to the organization.

   The above non- financial tools can be framed effectively by giving due concentration to the role of employees. A combination of financial and non- financial incentives help together in bringing motivation and zeal to work in a concern.

Positive Incentives

Positive incentives are those incentives which provide a positive assurance for fulfilling the needs and wants. Positive incentives generally have an optimistic attitude behind and they are generally given to satisfy the psychological requirements of employees. For example-promotion, praise, recognition, perks and allowances, etc. It is positive by nature.

Negative Incentives

Negative incentives are those whose purpose is to correct the mistakes or defaults of employees. The purpose is to rectify mistakes in order to get effective results. Negative incentive is generally resorted to when positive incentive does not works and a psychological set back has to be given to employees. It is negative by nature. For example- demotion, transfer, fines, penalties.

Maslow’s Need Hierarchy Model

Human behavior is goal-directed. Motivation cause goal-directed behaviour. It is through motivation that needs can be handled and tackled purposely. This can be understood by understanding the hierarchy of needs by manager. The needs of individual serves as a driving force in human behaviour. Therefore, a manager must understand the “hierarchy of needs”. Maslow has proposed “The Need Hierarchy Model”. Self-actualization Needs Esteem Needs Social Needs Security Needs Physiological Needs FIGURE – Maslow’s Need Hierarchy Model

The needs have been classified into the following in order:

1. Physiological needs- These are the basic needs of an individual which includes food, clothing, shelter, air, water, etc. These needs relate to the survival and maintenance of human life.
2. Safety needs- These needs are also important for human beings. Everybody wants job security, protection against danger, safety of property, etc.
3. Social needs- These needs emerge from society. Man is a social animal. These needs become important. For example- love, affection, belongingness, friendship, conversation, etc.
4. Esteem needs- These needs relate to desire for self-respect, recognition and respect from others.
5. Self-actualization needs- These are the needs of the highest order and these needs are found in those person whose previous four needs are satisfied. This will include need for social service, meditation.

What is Motivation ?

Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behaviour can be – desire for money success recognition job-satisfaction team work, etc

One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-

1. A felt need or drive
2. A stimulus in which needs have to be aroused
3. When needs are satisfied, the satisfaction or accomplishment of goals.

Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the individuals have to be tackled by framing an incentive plan.

Disadvantages of Planning

Internal Limitations

There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.

1. Rigidity

   1. Planning has tendency to make administration inflexible.
   2. Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
   3. There is no scope for individual freedom.
   4. The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
   5. Planning therefore introduces inelasticity and discourages individual initiative and experimentation.

    

    

2. Misdirected Planning

   1. Planning may be used to serve individual interests rather than the interest of the enterprise.
   2. Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
   3. Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.

    

    

3. Time consuming

    

   1. Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
   2. Therefore planning is not suitable during emergency or crisis when quick decisions are required.

    

    

4. Probability in planning

   1. Planning is based on forecasts which are mere estimates about future.
   2. These estimates may prove to be inexact due to the uncertainty of future.
   3. Any change in the anticipated situation may render plans ineffective.
   4. Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
   5. Thus, excessive reliance on plans may prove to be fatal.

    

    

5. False sense of security

   1. Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
   2. Managers assume that as long as they work as per plans, it is satisfactory.
   3. Therefore they fail to take up timely actions and an opportunity is lost.
   4. Employees are more concerned about fulfillment of plan performance rather than any kind of change.

    

    

6. Expensive

   1. Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
   2. According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’

    

External Limitations of Planning

1. Political Climate- Change of government from Congress to some other political party, etc.
2. Labour Union- Strikes, lockouts, agitations.
3. Technological changes- Modern techniques and equipments, computerization.
4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
5. Natural Calamities- Earthquakes and floods.
6. Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.

Characteristics of Planning

1. Planning is goal-oriented.

   1. Planning is made to achieve desired objective of business.
   2. The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
   3. Planning identifies the action that would lead to desired goals quickly & economically.
   4. It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching diesel models.
2. 
   

   Planning is looking ahead.

   1. Planning is done for future.
   2. It requires peeping in future, analyzing it and predicting it.
   3. Thus planning is based on forecasting.
   4. A plan is a synthesis of forecast.
   5. It is a mental predisposition for things to happen in future.
3. 
   

   Planning is an intellectual process.

   1. Planning is a mental exercise involving creative thinking, sound judgement and imagination.
   2. It is not a mere guesswork but a rotational thinking.
   3. A manager can prepare sound plans only if he has sound judgement, foresight and imagination.
   4. Planning is always based on goals, facts and considered estimates.
4. 
   

   Planning involves choice & decision making.

   1. Planning essentially involves choice among various alternatives.
   2. Therefore, if there is only one possible course of action, there is no need planning because there is no choice.
   3. Thus, decision making is an integral part of planning.
   4. A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.
5. 
   

   Planning is the primary function of management / Primacy of Planning.

   1. Planning lays foundation for other functions of management.
   2. It serves as a guide for organizing, staffing, directing and controlling.
   3. All the functions of management are performed within the framework of plans laid out.
   4. Therefore planning is the basic or fundamental function of management.
6. 
   

   Planning is a Continuous Process.

   1. Planning is a never ending function due to the dynamic business environment.
   2. Plans are also prepared for specific period f time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.
   3. Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to be tackled by planning effectively.
7. 
   

   Planning is all Pervasive.

   1. It is required at all levels of management and in all departments of enterprise.
   2. Of course, the scope of planning may differ from one level to another.
   3. The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same.
8. 
   

   Planning is designed for efficiency.

   1. Planning leads to accompishment of objectives at the minimum possible cost.
   2. It avoids wastage of resources and ensures adequate and optimum utilization of resources.
   3. A plan is worthless or useless if it does not value the cost incurred on it.
   4. Therefore planning must lead to saving of time, effort and money.
   5. Planning leads to proper utilization of men, money, materials, methods and machines.

9. Planning is Flexible.

   1. Planning is done for the future.
   2. Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt. policies etc.
   3. Under changed circumstances, the original plan of action must be revised and updated to male it more practical.

The Power of Customer Feedback

First, a plea: please don’t keep your marketing insight languishing in a silo, away from your core business processes. The technology exists to generate real business value from this often-untapped information, so take advantage of the opportunity to link this valuable asset—knowledge about customers—to the rest of your business.

By fully embracing your customer-feedback program, you can achieve transparency into customer attitudes and learn important truths about today’s buying behavior and the evolving attitudes that will determine future buying behavior.

A comprehensive understanding of customer attitudes enables you to build processes to prevent customer churn and drive cross-selling opportunities. The marketing department can use a customer-feedback program to drive tailored marketing campaigns and strengthen the relationship between your brand and your customers.

These programs are not just about making customers happy; they can also deliver real commercial value.

Communicate for engagement

By implementing a feedback program, you initiate a conversation with your customers, helping them to become truly entrenched in your brand—from product creation to problem resolution.

Such increased engagement forms far tighter purchasing relationships and builds significant brand value. Constant, relevant communication also provides an excellent platform for the creation of personalized, relevant promotions, creating a win-win that further builds the relationship. Better still, you will be able to make better-informed business decisions when you capture customer experiences and embed that insight into your business.

Learn how to share

This all seems ideal, but few organizations today have created the tightly integrated framework required to truly maximize the value of customer conversations across the company. In many cases, feedback data sits in a series of silos. Keeping it completely separate from other customer data reduces its value to little more than “mildly interesting.”

The lack of visibility into customer data by the marketing team means that, irrespective of investments in customer relationship management (CRM) and marketing resource management (MRM), Marketing’s interaction with the business remains, at best, a sporadic provision of leads to the sales team.

Time is of the essence

Timing is crucial in getting the most from the feedback you gather. If one of your customers has a poor experience with your contact center and defects to the competition, there is little point in contacting that customer three months later. The moment has passed, and the opportunity has been missed. Had you gained insight into that customer’s attitude when the problem occurred, with alerts to the relevant customer complaint team, the issue could likely have been resolved immediately, and the defection avoided.

Volumes of evidence show increased loyalty among customers whose issues were resolved successfully. Improved customer retention and increased loyalty—what’s not to like?

Marketing harnesses customer insight

Timely, focused surveys can transform the speed, relevance, and value of product-development campaigns and foster unprecedented customer loyalty and commitment. The information derived from surveys is critical to infusing the value of customer attitudes directly into your business.

Consider this example, in which loyal customers shared their experiences to great effect. Egg, the world’s largest online-only bank (now a Citigroup division), used its feedback program to develop an innovative new product in five weeks—compared with an industry standard of around 12 months.

Egg surveyed 30,000 customers about the customer proposition being contemplated. A key success factor was the familiarity of Egg’s customers with regular personalized online contact. The company had been using online surveying technology for five years to manage the customer experience. The customized nature of these surveys, which included customers’ names and recent activities, led to higher response rates.

Building a program that enables you to continually take your customers’ pulse and build an ongoing dialogue in times of trouble is crucial for aligning your business with your customers’ attitudes. To avoid generic feedback that you can’t act on, ensure that this “pulse-check” happens in conjunction with key customer interactions. For example, a retailer feedback request might coincide with a purchase, return, or contact center inquiry. With the right tools and approach, an alert system ensures immediate action to avoid customer defection and resolve customer dissatisfaction.

It is only by combining a real-time understanding of customer attitude with business processes that you can fully enjoy the benefits of creating a customer dialogue. Banish your silos, and reap the rewards of sharing feedback across your entire business.