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Introduction
Every business undertaking exhibits a unique management style that helps it to shape organizational behaviour and the employee and employer relationship. Firms all over the globe have to manage their employees effectively so that they can work in a cohesive way to achieve organizational goals and objectives (Kalleberg, 2015). Management style is nothing but the leadership approach that is adopted by leaders to help the organization accomplish the desired goals.
The essay primarily captures the various factors that come into play and influence the management style to establish employee relations in the United Kingdom. The extent to which management style in employment relations is influenced by marketization and financialization has been captured in the essay. Similarly, it also sheds light on the implications of these influences for the organizational personnel.
Management Style
As per Clark (2018), management style is different for different organizations. Management style refers to how a leader leads the firm towards the achievement of its organizational objectives. It tells about the ways how the management gains control over its employees and directs them on the right path. Through different management styles, managers exercise their authority. Different styles help in determining the productivity of the organization and how employees respond to each of the management styles (Clark, 2018).
There are different types of managerial styles used by the management of different organizations. Through autocratic management, the organizations exert the most control over the employees. Through an autocratic management style, instructions are given to the employees. But in this style, all the decision-making power remains with the manager. It is the style that has the least degree of employee involvement (Kollmeyer & Peters, 2018). This style usually results in job dissatisfaction among the employees and a high turnover rate. Due to a lack of motivation, the employees are reluctant to give their best and perform better.
Another type of management style is the democratic style. In this style, the managers include the employees in the decision-making process. According to Thompson (2019), employees are encouraged to give their input and opinion for various purposes. This style of management makes the employees of the organization feel valued (Thompson, 2019). This keeps them motivated and increases their productivity level. This helps the management and employees work hand in hand. Most firm in the United Kingdom follows this type of management style. Such management approaches help the employees to build trust in the management of the organization.
Yet another type of management style is the Laissez-faire style. This approach of management is rarely followed by organizations. It included no interference at all from the management side. The management believes that the employees are extremely skilled to perform all the tasks on their own without any kind of supervision (Chabrak, Craig & David, 2016). It is an approach in which the management delegates the entire work to the employees. In this management style, the employees get the maximum autonomy to perform all their tasks. This helps in increasing the creativity and inn novation level of the employees.
Depending on the hierarchical structure of the organization, the level type of management usually differs. With different management styles, the level of employee participation also differs. In the traditional styles, employees were used as tools to ensure more production. But Cushen & Thompson (2019) said that with the growing importance of employees, leaders have changed their management styles. More focus is given to the participative approach of management where employees get equal opportunities to participate (Cushen & Thompson, 2016). This increase in employee involvement has given the employees a sense of importance which has resulted in better productivity in the organization.
In the firms of the UK, most managers are adopting the participative or democratic approach to management. In such a method, the employees are given equal importance and get the opportunity to voice their opinion while important decisions makings. This has helped in improving employee relations with management (Cushen & Thompson, 2016). This has made decentralized decision-making possible. This approach of the UK managers has helped to run the firms smoothly. It has ensured that the management and employees work together with much cooperation.
Leaders and managers that function in the dynamic work setting come across a wide range of managerial situations on a day-to-day basis. To effectively handle these situations, they employ a management style. Management can be said to be a key ‘actor’ in an employee relationship. In the organizational setting that is prevalent in the United Kingdom, the management style is designed to involve the employees in various organizational processes. For instance, cautious management approaches are being employed so that the employees can be treated fairly.
The role of the management body of an organization is of paramount importance when it comes to forming and maintaining employee relations. It not only strengthens the bond between the employees and the management but also among the employees (Goyer, Clark & Bhankaraully, 2016). The style implemented by the managers moulds the environment of a business entity and helps to minimize friction and encourages cohesion. The impact of Management style can be felt on the employees, the organizational performance, and the sustainability of the business.
But in recent times, a change in the management style of the UK firms is to be seen. The reasons for the change in the management approaches can be due to the growth of globalization and privatization. The changes in the labour market and the global economy can be the reasons behind such changes in management. The decline in the collective representation of the employees is also a reason that facilitates a change in the management approach. Employers nowadays are not willing to recognize trade unions. With the outdating of the democratic management style, employers are exploiting the employees more and more.
Marketization and financialization have major roles to play in influencing the management styles of UK organizations. A shift in the organizations of the United Kingdom towards more market-based firms is another reason for the change in management style (Epstein, 2015). Change in the investment orientation and ways of easy returns is also responsible for the change. Contracting and outsourcing have led to the downsizing of employees.
Marketization
Marketization has become the global trend to bring about reformation in market-based economies. In simple terms, marketization is the increase in the level of competition among various organizations. Marketization refers to the greater use of management principles. Marketization is the way of bringing about a transformation in the legal environment of firms to make them function as per the market standards. Marketization is possible through subsidiary reduction, organizational restructuring, decentralization and at times even privatization. Marketization has brought about more competition among organizations and has given direct control to the hands of the public. Marketization can be in form of competition in price or competition in the quality of goods and services (Allan, Faulconbridge & Thomas, 2019).
Even though the marketization process arises in the external setting of a business undertaking, it has the power to impact the management style and leadership approach that is adopted by managers and leaders. According to Andrea Mary Taberner, marketization impacts the management approach that is implemented at the organizational level and it further impacts the employees and the staff members (Taberner, 2018). The example of the English higher education sector has been used to get a detailed view of marketization and its implication in the business context. As per the findings, the impact of marketization can be felt in the managerial ideology, degree of professionalism, workplace environment and the intensity of work (Taberner, 2018).
Focusing on the marketization strategies will help the organization in remaining competitive. It can benefit the firm in many different ways. Marketization allows firms to compete in the global platform. Marketization increases the competition level at the same time increases the gains.
Financialization
Financialization emphasizes increasing the privileges of the shareholders. It is a way of increasing short-term profits and giving the shareholders extra and quick returns. It focuses on better financial performance and increases in the share prices of shareholders. Other than making money through the selling of goods and services, other ways are taken into account through financialization. It neglects long-term investments and emphasizes better returns in short term (Benassi & Tekeste, 2018). Financialization focuses on increasing the entire organizational competence through the proper utilization of financial resources. Financialization can be brought about through the buyback of shares, overtaking successful companies or selling small companies.
The Financialization process varies from one nation to another such as the United States of America, the United Kingdom, Japan, and Germany. Lapavitsas has defined the process as the systematic transformation of capitalism that has taken place in the past few decades. This process has the power to alter the behaviour of non-financial corporations, employees and banks. (Lapavitsas, 2013. The process of financialization does not just involve financial institutions and financial markets. It also involves various industrial firms that operate in a dynamic business setting (Botzem & Dobusch, 2017, p 4).
As per Batt and Appelbaum, the Financialization process impacts not just the management style that is employed by a business concern but also employment relations (Batt & Appelbaum, 2013).In the business setting of the United Kingdom, financialization can be defined as the pattern of accumulation in which profits are generated through different financial channels instead of depending on the production of an offering. The process has had tremendous consequences for management, and control. It urges the management of firms to focus on strengthening the ‘shareholder value’ so that they can benefit from the business and its business activities (Botzem & Dobusch, 2017, p 4).
Impact of Marketization and Financialization on management style
The implication of marketization and financialization on management style and employee relations cannot be neglected. These factors that operate in the macro setting of an organization in the United Kingdom have severe implications on the approach that is implemented by the concern to carry out the day-to-day activities. In addition to this, it also influences the relationship that is built between the managers or employers and the employees. For example, in the European country, many employees are working on zero-hour contracts so that they can earn a living (Benassi & Tekeste, 2018). Even though this kind of job is considered to be highly insecure, its number is rising and the management is taking the step to control its costs. Most of the workforce in the United Kingdom is employed under zero-hour contracts. The zero-hour contracts have decreased the power of the employees while increasing the same of the employers. Such a step by the management is adversely impacting employment relations in the UK.
Marketing has brought about a change in management style. With marketization, organizations tend to fragment work by applying market principles to a greater extent. Depending on the market testing and market competitiveness, marketization has an impact on the management style of the organization. Marketization is a process that has severe implications on the management style that is adopted by a business undertaking in the dynamic business arena. As marketization increases the level of uncertainty in the evolving business context, the day-to-day management activities and processes get constantly disrupted. In addition to this, the managers have to muddle through while performing their functions. The human resource policies that are employed in the organizational context are altered to a certain degree due to marketization.
Financialization has compelled firms in the United Kingdom to adopt stricter management styles. Financialization has given external shareholders the authority to make decisions regarding internal business and financial matters. Putting the firm under pressure to adopt the strategy of downsizing, the shareholders have been successful in increasing their share prices. But it has become a disadvantage for the employees. Financialization has forced the managers of the UK to announce many layoffs. The different strategies used by the shareholders to maximize their profits have led to the loss of employment of many.
Financialization in the UK has focused mainly to increase the shareholder’s value and increasing the competitiveness of the firm. This has in turn forced the managers to adhere to management strategies like downsizing, off-shoring and outsourcing. Financialization has been a contributor to the increase of low wages among employees and wage stagnation.
Implications for the employees
As management is the key actor in employment relations, any change in the management style has greater implications for the employees. The various macro factors that exist in the external context of a business undertaking are playing a vital role and impact the management style, leadership approach, and employment relationship. This, in turn, is also having a high implication on the organizational personnel that works in business entities. For example, due to the rise in the zero-hour contracts between employers and employees, the employees are at the receiving end (Benassi & Tekeste, 2018). This concept is not just increasing the overall risk of the staff members but it is also increasing the power that lies with the employers. Due to the unstable distribution of power between the employers or management and the employees, they are suffering. As per a news article, in the United Kingdom, many employees are being dismissed unfairly and employers are not following any proper dismissal procedure while terminating them. Such a trend is increasing which is negatively impacting the power and rights of employees in the unpredictable and competitive organizational context.
Marketization and financialization have visible implications for the employees. To get benefit in the short term, most organization forgets to give the required consideration to the long-term benefits. Employees are very important for every organization. Without the employees, the sustenance of an organization becomes impossible. But due to the change in management style because of marketization and financialization, the organizations end up affecting the benefits of the valuable employees. There is a great change in the day-to-day activities of the management. Employees are made to work hard under high levels of pressure unwillingly. With insecure conditions, employees cannot give their best to the work. It decreases the cooperation between the management and the employees.
The influence of marketing on the management style has greater implications on the work performance of the employees. According to Andrea Mary Taberner, the autocratic style of management due to marketization has increased the quantity of work done by the employees. Most of the impact is seen in UK organizations following the modern approach of management than the traditional ones. By being stricter, the managers in the make United Kingdom have been able to make the employees work at their optimum level. It has increased the mechanization of firms. Rather than focusing on intellectual work, the employees are made to focus more on instrumental and physical work (Goyer, Clark & Bhankaraully, 2016). The change in the managerial ideology from democratic to autocratic has benefitted the organization. The performance level of the Organization has increased reasonably.
Though marketization has benefited firms in many ways, it has many negative implications for employees. Instead of a united organization, fragmentation among the employees has been a result of marketization. As the employees are no longer allowed to voice their opinions, aggressiveness among the employees has become a common sight (Taberner, 2018). The level of intensity of work for the employees has also increased due to the tough market competition. Bullying of subordinates by superiors has also become prevalent due to the influence of marketization on the management style of the United Kingdom.
Job insecurity has increased among the employees of the United Kingdom. The declining wages of the employees due to marketization have become a reason for concern. Unequal access to the benefits of employees has also increased. The collective power of the employees to voice their demands is also on the decline. The trade unions are losing their power. The welfare and protection of employees are decreasing, depriving the employees of their rights.
The influence of financialization on the management style has impacted the employees mostly in a negative way. With financialization, organizations in the UK have focused on maximizing the value of shareholders. On a verge of increasing the profits of shareholders, they have put the employees at disadvantage. Due to financialization, firms have started cutting down their cost in all ways possible. To cut costs, the firms have adopted managerial strategies like downsizing, offshoring or outsourcing. Such corporate restructuring has resulted in the job loss of many employees. This has adversely affected the employees negatively by cutting down their source of income.
Financialization has led to the shutdown of startup companies. This affects the employees of the companies. They get deprived of their regular source of income. This makes them face many financial issues.
To enhance the financial position of the organization, firms tend to sell more equities and bonds. Through takeovers and increased share prices, organizations tend to increase the cash flows of the shareholders. By downsizing and work intensification, firms tend to cut down costs. Giving profits to the shareholders, the benefits of the employees are ignored. Downsizing decreases the wage levels, pensions and employee benefits. The employee’s trade unions suffer due to the closure of unions. This deprives the employees of voicing their demands through their respective trade unions.
Another impact of financialization can be seen in form of an increase in the number of jobs offering low pay and fewer employee benefits. To cut the cost of employee wages, more and more work is outsourced. Outsourcing has greatly resulted in low-income jobs. This has increased the rate of wage inequality in the United Kingdom. With such changes in the organisational structure, a large portion of job positions is low-paid while the smaller part has highly paid employees (Batt & Appelbaum, 2013).
The zero-hour contract type of employment is growing more and more in the labour market of the United Kingdom. Be it a retailer or hotel or any other leisure company, most of them are widely using such contracts for the employees. This increases job insecurity among the employees. This has become an easy way for employers to employ more workforce at cheaper rates. But it has highly affected the rights and living conditions of the employees. Such contracts do not even guarantee minimum wages. They also do not pay the employee’s travel expenses and sick pay. When an employee takes a sick leave, the employers extract the amount that it pays to hire another employee from the sick employee. This is something completely unfair on the part of the employees. Zero-hour contracts are simply a way in which employers exploit their employees unreasonably. This is yet another strategy for cutting down the costs of organizations in the United Kingdom. For such contracts, the employees have to suffer due to low pay and are always insecure about their jobs. According to the trade union leaders, Government must find out some ways to outcast such contracts that allow heavy exploitation of the employees.
Conclusion
The democratic form of the management style of UK firms is most effective to ensure a motivated workforce, better productivity and ultimately more revenue for the organization. Marketization and financialization have affected the relationship between employers and employees. It has created an atmosphere of tension in the employment relationship. No matter what changes take place in the external environment, the management must consider the minimum requirements of the employees. They must adopt the right style of management to ensure an effective workforce. Affecting the interests of the employees can affect the overall performance of the organization. The management must adopt strategies like job enrichment, quality work-life, employee engagement and empowerment to make sure they have a satisfied workforce.
The management must ensure that the employees are not deprived of their rights. They must be given a platform to voice their opinion. Employees must be entitled to the deserved pay and benefits. This will help in keeping the employees motivated and help enhance their performance level.
The essay that has been presented here sheds light on various elements that exist in the external business context such as marketization and financialization and their implication on the management style. The scenario that is prevalent in the United Kingdom has been particularly highlighted here. The processes that take place in the external context impact the management and the approach that is used by it to carry out daily business operations. Thus it naturally impacts the employees as well.
For fairness in the workplace, the state must take effective steps. The United Kingdom must make its laws stricter to ensure that no employee is being exploited by any means. Simply blaming marketization and financialization for the negative implications on the employees won’t help. Despite the changes in the market or financial scenario, the management must take responsibility to meet the basic needs of the employees. The changes in the external environment should not affect the internal balance of the organization. Recognizing the trade unions, strengthening the labour laws and offering job security to the employees can help the management to function successfully.
References
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