the challenges facing management today and tomorrow · management challenges in the 21st century...

The Challenges Facing Management Today and Tomorrow

The Challenges Facing Management Today and TomorrowNgige, Chigbo D.

THE CHALLENGES FACING MANAGEMENT TODAYAND TOMORROW

Ngige, Chigbo D.Chukwuemeka Odumegwu Ojukwu University

ABSTRACT

Management challenges in the 21st century looks afresh at contemporary and the future ofmanagement thinking and practice. The challenges revolves around two fundamental issues thatare occurring simultaneously; the changes in the world economy, and shifts in the practice ofmanagement. These developments both in developing and the developed countries are crucial inexploring and understanding the challenges of the future. This paper focuses on the key questionsfor all organizations; what are the new challenges or realities? What new policies andmanagement responses are required of companies and executives in order to deal with thesechallenges. With this in mind, this paper offers a number of strategies - both proactive andotherwise - on how managers can respond or be more responsive to these challenges facingmanagement today and tomorrow.

Keywords: Management, Knowledge, Workers, Outsourcing, Globalization

INTRODUCTIONManagement is a child of the last two centuries,that is, the 19th and 20th centuries. During theearly part of the 20th century most Europeansand Asians, were still very skeptical aboutmanagement. For instance, when in 1924 MaryParker Follet gave a management seminar at theOxford University, London, they cajoled herand made mockery of her, thinking that she isjust bringing to them another importantAmerican fad. And in those years, thecommunist countries too were quite certain thatmanagement was a capitalist invention whichhas absolutely no meaning for them - and wasindeed totally incompatible with anything thatcould be called “Socialist” or “Marxist”. Thesepeople and countries were still very skepticalabout management then because it wassomething that fitted others, but had very littlerelevance to them, their own companies andinstitutions and their own countries. As socialinstitutions go (i.e. in the early part of the 20thcentury), management is thus a mere infant still.

But this child has been growing up very, veryfast. Few people today would doubt thatmanagement is essential. Indeed, even in China,where under Mao management was clearlytaboo, there is now a sharp shift. Today,

management and managers are the essential keyresource for economic and social development.Management is a factor of production and aneconomic resource, and the arts and sciences ofmanagement appear to provide the bestopportunity for increase in productivity. Thevast majority of productivity improvements(60%) are within the purview of assertive,innovative, entrepreneurial managersfunctioning in their role as productivity catalysts(Heizer and Render, 1991).

However, with this acceptance of managementas a key function in society have come ever-increasing demands/challenges on the manager.Thus, the challenges facing management todayand tomorrow illustrate the rapid change andunpredictability that all managers face today incontemporary times and in the future. Mostorganizations have survived and thrived becauseof the remarkable management talent of theirmanagers and management. Hence, managersand management can have the most remarkableeffects on organizations if they take intocognizance these issues/challenges facingmanagement today and tomorrow. Conversely,businesses with untrained and unrepentant staffto cope with these challenges will lose marketshare and will ultimately be chased out of

120 COOU Interdisciplinary Research Journal

The Challenges Facing Management Today and TomorrowEzeaku, Stella .N., Ohamobi, Ifunaya .N.Ngige, Chigbo D.Ezeaku, Stella .N., Ohamobi, Ifunaya .N.Ngige, Chigbo D.

business by their competitors. Nevertheless, theeffect of good management in coping with thesechallenges on companies is nothing short ofremarkable.

Organizations today thus need to grapple with anumber of revolutionary forces/challenges;boosting the productivity of resources,employing resources where results are, stayingahead and coping with change/acceleratingproduct and technological changes, motivatingknowledge workers/disenchanted employees orrather trends towards knowledge workers andthe information age, and globalized competition.Challenges like these have changed the playingfield on which firms must compete. Inparticular, they have dramatically increased theneed for firms to be responsive, flexible, andcapable of competing and reacting rapidly in aglobal marketplace.

With that in mind, it is against this backgroundthat this paper explores the challenges facingmanagement today and tomorrow in order toidentify how managers can respond or be moreresponsive to these challenges in order to drivetheir organizations to a stellar performance.

THE CHALLENGE OF BOOSTING/INCREASING THE PRODUCTIVITY OFRESOURCESThe management challenge today, andincreasingly the management challenge oftomorrow will centre on boosting theproductivity of resources. In nineteenth centuryliberal capitalism, it was believed that resourcesdeveloped themselves and are allocated by the“invisible hand”. In nineteenth centurysocialism and twentieth century communism, itis believed that the development of resources isa function of the system - which is another formof the “invisible hand”. We know better today,i.e. in the 21st century. Resources are developedby managers, are allocated by managers andmanagers are responsible for their productivity.It is above all productivity which is the firstmission of management and its firstresponsibility. And the management challenge

today, and increasingly the managementchallenge of tomorrow will centre on theproductivity of resources.

Resources are not made by nature. They aremade by man. And this is particularly true oftwo key resources - the human being andcapital. Indeed, the human being as such is notresource. He becomes a resource only if trained,developed and allocated to productive work.This is the central challenge of management. Itis particularly important in developingcountries. It is the essence of being a developingcountry that effective, productive, competentpeople are in very short supply. One of thecentral management challenges in a developingcountry is development of people into humanresource - a task of training, of developing, ofmanaging.

In many ways, capital is perhaps even morecrucial, especially in developing countries, thanthe human resource. And capital can only beobtained by providing a surplus from today’sproduction over today’s costs - otherwise,capital formation cannot take place. Capitalformation may be the crucial factor in thedevelopment of the developing countries. It isalso the crucial factor in the continuingprosperity of the developed countries.

In this regard, everyone knows that there are nojobs unless we can invest in substantial amountof capital. Even in developing countries, inwhich a good deal of activity is, and should be,labour intensive, the capital cost of a new job isvery high and is going up rapidly. In fact, youmay well say that the greatest drawback, thegreatest weakness and thus the greatestchallenge of developing countries in theirdesperate search for employment opportunities,is lack of enough capital to create jobs (Drucker,2001). The consumer demand is there - what islacking is the capital to create the jobs which inturn would create the goods to satisfy consumerdemand. Thus, one of the challenges facingmanagement today and tomorrow, is the need of



our society for adequate capital formation forthe jobs of tomorrow.

THE CHALLENGE OF EMPLOYINGRESOURCES WHERE THE RESULTSARE - MEANING THAT MANAGEMENT,BOTH IN DEVELOPING AND INDEVELOPED COUNTRIES, WILL HAVETO LEARN TO MANAGE PRODUCTIONSHARING/OUTSOURCINGIn all developed countries, there is a majorshortage of people to do the traditional jobs -especially traditional labour-intensivemanufacturing jobs. It is a matter of wage costprimarily and also a matter of the availability ofpeople. This is because birth rates in thedeveloped countries are so very low, andbecause so many of the young people in thedeveloped countries go in for higher educationand thus become basically disqualified fortraditional work.

In all developing countries, on the other hand,we face about two decades during which therewill be an incredibly large supply of youngpeople qualified for little but the traditionallabour-intensive jobs in manufacturing. And inmost of the developing countries, the only waythese young people can possibly findemployment is in manufacturing for export.Only a very few countries - India, Brazil,Nigeria- may be amongst them - in which thereis a potential domestic market large enough toabsorb the output of the masses of new youngworkers, workers who need jobs and who areeasily trainable for the traditional manufacturingwork. In the rest of the world manufacturingjobs and jobs in export industries, will meanincreasingly that the world will see a newpattern of economic integration - a patterncalled production sharing or outsourcing.Production sharing/outsourcing is the delegationof production processes or services to anexternal vendor who owns and manages theseprocesses, based upon defined performancemetrics. Thus, while productionsharing/outsourcing was initially seen as a costreduction tool and as a matter of the availabilityof people with a clearly defined and limited

scope, today it is increasingly regarded as ameans of achieving a marked change inorganizational performance, agility andcustomer service (Barrar and Gervais, 2006); inother words, as a source of competitiveadvantage. You already see productionsharing/outsourcing all around you. Here is thelarge European textile manufacturer, aGerman/Dutch company, who spins, weavesand dyes in the common market and thenairfreights the cloth to such countries asMorocco or Algeria or Thailand, where thecloth is converted into suits and shirts and rugsand beddings, to be airfreighted back and sold inthe common market. There is the Americanshoe retailer - the largest shoe retailer in theworld, perhaps. The hides to make the leathertend to be American, if only because Americahas the largest livestock population. They arebeing shipped to Brazil to be tanned and madeinto leather there, to be shipped to such placesas Haiti and the British Virgin Islands wherethey are being made into shoes, to be assembledinto finished shoes in Puerto Rico, for sale inthe American market and for export to Europe.And so it goes - with the electronic industryperhaps the foremost practitioner of “productionsharing”/outsourcing.

Increasingly, managers will have to learn cumface the challenge of managing a system underwhich the developing countries will findemployment for their abundant resources ofyoung trainable people in production for exportin those stages of production that are labourintensive; while the developed countries willfurnish management technology and capital and,above all, the markets.

In view of this, the multinational company oftomorrow will be a marketing company ratherthan a manufacturing company. It will sellwhere the markets are, and this means primarilyin the developed countries, and also in thedeveloping countries. But it will have the goodsmade where the workforce is - that is in thedeveloping countries. And thus, productionsharing will increasingly become a majormanagerial challenge - both in the developed

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and in the developing countries - and one thatrequires close cooperation between the two.

THE CHALLENGE OF STAYING AHEADAND COPING WITH CHANGEFrequent change will be the rule in tomorrow’senvironment. This means that theorganization/business environment of today andtomorrow will face increasing turbulence. Adynamic, unpredictable, expanding, fluctuatingenvironment is a turbulent environment. It is anenvironment marked by changes. It is anenvironment in which the information receivedby the organization is often contradictory. Thebest estimates that management can make of thefuture are really only “guesstimates” and getobsolete fairly quickly since the environmenttakes unpredictable turns. It is an environmentin which the ability to take calculated risks inthe face of uncertainty is vital. In this regard,rapid technological advances, politicalinstability and key resource shortages in somecountries are examples of the kinds of changesthat are likely to occur more frequently in thefuture. Thus managers and management oftoday and tomorrow must develop strategies ofstaying ahead of change and for coping withchange. They must encourage learning amongtheir people in what is referred to as a learningorganization, engender ICT - informationrevolution whereby not only data are valued butalso concepts, and develop agility in copingwith change.

A learning organization is one that continuallyimproves by rapidly creating and refining thecapabilities required for future success (Wickand Leon, 1995: 299-311). In a learningorganization, employees are engaged inidentifying and solving problems, enabling theorganization to continuously experiment,change and improve. In this manner, theorganization can increase its capacity to grow,learn and achieve its purpose. Thus, in thelearning organization, all employees look forproblems, such as understanding specialcustomer needs. Employees also solveproblems; which means putting things together

in unique ways to meet customer needs. Alearning organization promotes exchange ofinformation among employees which creates amore knowledgeable workforce. It exhibitsflexibility because employees accept and adaptto new ideas and changes through a sharedvision. Nevertheless, today’s increased pace ofchange is thus one reason the learningorganization is popular. The corporation that isable to quickly shape and motivate their workersis better able to transform its work practices tokeep pace with the constantly changingenvironment.

Furthermore, today and tomorrow’s managersmust also face the challenge of the frequentchanges in the environment (which can createpsychologically, great tension and stress for themanager) by developing agility in coping withthese changes. The manager must thus developplanning strategies that are flexible enough toallow for frequent changes in direction whilestill accomplishing organizational objectives.Thus, confidence and enthusiasm for a givencourse of action must be maintained whileknowing that the plan may be obsolete before itcan be fully carried out. Maintaining the balancebetween enough stability to pursue plans whileremaining flexible enough to make changeswhen necessary will be more difficult than everbefore.

THE CHALLENGE OF MOTIVATINGKNOWLEDGE WORKERS CUMDISENCHANTED EMPLOYEESToday and tomorrow’s organizations arepopulated by knowledge workers. Knowledgeworkers are workers that possess high talent,high calibre knowledge, skills, abilities andexpertise in performing their jobs. Put inanother way, they are workers with a highdegree of knowledge management abilities.Knowledge management is concerned withstoring and sharing the wisdom, understandingand expertise accumulated in an organizationabout its processes, techniques and operations.To Tan (2000: 10-11) it is the process ofsystematically and actively managing and



leveraging the stores of knowledge in anorganization. Thus, the growing emphasis onhuman capital/knowledge workers or ratherknowledge management - i.e. the knowledge,training, skills and expertise of a firm’s workers- at the expense of physical capital likeequipment, machinery, and the physical plantare increasingly the order of the day incontemporary organizations.

Consequently, due to the predominance ofknowledge workers in contemporaryorganizations, managers and management needto face the challenge of motivating this type ofemployees otherwise termed disenchantedemployees. Thus, for managers, the challenge ofincreasing human capital is that “knowledgeworkers” must be managed differently thanwere those of previous generations. The centreof gravity in employment is shifting fast frommanual and clerical workers to knowledgeworkers, who resist the command and controlmodel that business took from the military about100 years ago. Knowledge workers cannot justbe ordered around and closely monitored. Newmanagement skills will be required, and thebehavioural side of managing will become moreimportant.

In other words, many of the “new generation” ofemployees will be more difficult to motivatethan their predecessors. This is in part the resultof a change in value systems coupled withgreater knowledge management and risingeducational levels. In view of this, greaterskepticism concerning large organizations andless reverence for authority figures will be morecommon; unquestioning acceptance of rules andregulations will be less likely. While presentinga problem for managers these employees canalso be the source of much creativity andaccomplishment. If their potential can betapped, many can become significantorganizational contributors and organizationalhigh flyers.

Nevertheless, the solution to cope with thischallenge is the creation of a “community”within the organization that changes the workers

traditional role. This approach includes the useof participative decision-making, jobenrichment, and a deemphasis of traditionalbureaucratic controls. This new approach doesnot mean that all workers “do their own thing”with little or no direction. Instead, mutuallydeveloped goals are established. These thenbecome the basis against which employees areevaluated.

THE POLITICAL CHALLENGEThe need to deal with or rather to cope with thechallenge of conflicting interest groups withinor outside organizations, will mean that todayand tomorrow’s manager must sharpen his orher political skills. This means that to cope withthe political challenge within/outsideorganizations managers must be politicallysavvy.

Thus, as group confrontation becomes a moreestablished way of dealing withgrievances/disputes, managers will have morefrequent contact with special-interestorganizations - like consumer unions or interestgroups and trade unions. Rarely can a purelyfactual, rational approach solve the problemspresented by such organizations. Consequently,such political activity as developing coalitions,engaging in delaying tactics, face-savings,restating issues and making temporaryconcessions may be used more frequently bysuccessful managers in the future.

THE CHALLENGE OF GLOBALIZATIONGlobalization is the tendency of firms to extendtheir sales or manufacturing to new marketsabroad. It thus refers to processes that promoteworldwide exchanges of national and culturalresources; and it entails the promotion andexpansion of the global movement of people,goods and ideas. Globalization engenderseconomic growth for corporations andcountries, and it involves a country’sparticipation in, and integration with, the globaleconomy. This means that the world economy isfastly becoming a global village; i.e. anincreasingly interrelated, interdependent andinterconnected world economy, especially in

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terms of trade and investments. In particular,advances in transportation andtelecommunications infrastructure, including therise of the Internet, are major factors inglobalization and precipitate furtherinterdependence of economic and culturalactivities (Guyford, 1972: 1-3). For businesseseverywhere, the rate of globalization in the pastfew years has been nothing short ofphenomenal.

Globalization of markets and manufacturing isimportant, in part because it has vastly increasedinternational competition. Throughout theworld, firms that formerly competed only withlocal firms - from airlines to car makers tobanks - have discovered they must now face anonslaught of new foreign competitors. Manyfirms have successfully responded to this newinternational environment, while others havefailed.

In view of this, the worldwide corporation in the21st century or rather of today and tomorrow,including those in the manufacturing sector ofthe Nigerian economy are now confronted withthe rapid globalization of markets andcompetition. Thus, managers and managementsof contemporary organizations are developingstrategies to cope with and overcome thischallenge of rapid globalization of markets andincreased competition. To stay afloat in thefierce economic competition of the worldmarketplace, they must build multilateralbusiness networks, and introduce newmanagement philosophies like Business ProcessRe-engineering (BPR) and Total QualityManagement (TQM).

The development of information technology, theglobalization of the markets and the networkingof the economy have all contributed changes inthe competitive and operational environment ofcompanies; thus the increasing importance ofthe growing proliferation of partnershiprelations - multilateral business networks(Arnzen and Brownfield, 1992: 50). Multilateralbusiness or enterprise network is a firm’s

alliance formed with other businesses to achievemutually beneficial goals. It is the process ofestablishing a mutually beneficial relationshipwith other business people and potential clientsand/or customers. Alliances or multilateralbusiness networks are coalignments between allstakeholders in an industry to expandopportunities for performance. In other words,they are coalignments between two or morefirms in which the partners hope to learn andacquire from each other the technologies,products, or rather flow of information, skills,and knowledge that are not otherwise availableto competitors.

BPR, on the other hand, is the fundamentalrethinking and radical redesign of businessprocesses to achieve dramatic improvements incritical contemporary measures of performance,such as cost, quality, service and speed. BPRmeans that organizations have to reengineertheir processes, i.e. reinvent the way they dothings or rather offer a particular product orservice in order to remain competitive and stayafloat in the fierce economic competition of themarketplace engendered by globalization.

TQM is thus an organization wide approach thatfocuses on quality as a very important goal.TQM conveys a vertical approach to quality inan organization, i.e. quality is a matter ofconcern for everybody from the Board ofDirectors down to the humblest employee. Thebasis of the TQM approach is the understandingthat all employees and organizational unitsshould be working harmoniously to satisfy thecustomer. Since the customer’s needs are inconstant flux, the organization must strive tocontinuously improve its systems and practices.

CONCLUSIONThe challenges facing management today andtomorrow look fresh at the future ofmanagement thinking and practice. The contentrevolves around two contemporary issues thatare occurring simultaneously; changes in theworld economy and shifts in the practice ofmanagement. These developments in the



developing and developed countries are crucialin exploring and understanding the challengesof the future. And the new realities or rather thefundamental challenges facing managementtoday and tomorrow are - the issue of thedevelopment, the allocation and the productivityof resources, the challenge of employingresources where the results are, the issue ofstaying ahead and coping with change, the issueof motivating knowledge workers/disenchantedemployees, political challenge, andGlobalization. This paper thus offers a prescientand informed analysis that will help everyexecutive to build a proactive strategy for thefuture.

REFERENCESArnzen, B. and Brownfield, S. (1992), “A

Learning Alliance between Business andBusiness Schools: Executive Educationas a Platform for Partnership”,California Management Review, Fall.

Barrar, P. and Gervais, R. (2006), GlobalOutsourcing Strategies: An InternationalReference on Effective OutsourcingRelationships, Hamphshire: GowerPublishing Limited.

Drucker, P. F. (2001), Management Challengesfor the 21st Century, London:HarperCollins.

Guyford, S. H. (1996), “Science Systems andSociety”, Journal of Cybernetics, 2 (3).

Heizer, J. and Render, B. (1991), Productionand Operations Management, Boston,Masachussets: Allyn and Bacon.

Tan, J. (2000), “Knowledge Management- JustMore Buzzwords?”, British Journal ofAdministrative Management,March/April.

Wick, C. W. and Leon, L. S. (1995), “Creating aLearning Organization: From Ideas toAction”, Human Resource Management,Summer.

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