Business Process Outsourcing - Is it Good Or Not?
July 17, 2008
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By Vishal Verma
Average outlook of a nation which is outsourcing services:
They are stealing our jobs
We don't want to outsource, as it leads to lesser jobs in our nation.
They took our jobs away.
This would be the thought process or outlook of a nation which is outsourcing services to other nations.
Well, I would like to show you different point of view.
Before we do that, for the readers who are new to this, let us understand what is outsourcing.
What is Outsourcing?
Outsourcing does not necessarily mean delegating work to some other nation.
Outsourcing: Contracting some or all call center services to an outside company.
OnShore: Onshore outsourcing is outsourcing within nearby region or the same country.
Offshore: Offshore outsourcing is outsourcing beyond your country.
I would say Outsourcing is transfer or delegation of services to an external service provider and day-to-day management of a business process. You would have heard many companies outsourced their customer support, technical support, help desk, email support, chat support, data entry job to an outsourced nation.This can be called delegation of services.
Benefits of Outsourcing?
The benefits of outsourcing of course are variable, dependent upon the nature and situation of the organization. However, the following is a list of common reasons why outsourcing is undertaken:
- Cost Advantages: This by large has been the major driving force behind outsourcing. Business Process outsourcing provides huge difference in costing, thus saving a lot of resources for expansion of the core job.
- Greater flexibility and ability to define the requisite service more readily.
- New spectrum of Global market: Organization can now market their products and services to Global market and provide support to customer base throughout the world which they cannot do on their own or do not have the domain expertise.
- Specific supplier benefits. For example, better security, continuity, etc.
- Increased productivity.
- Higher quality service due to focus of the supplier.
- Improved internal management disciplines resulting from the exercise itself.
- Increased customer satisfaction: While the Outsource call centers focus on the non-core departments, the outsourcing company can focus more on their core process which could lead to much happier customer base.
By employing skilled manpower in larger numbers at lower costs companies can really increase their productivity. This in turn would result in better customer satisfaction and increased profitability.
Now that we have defined outsourcing and its benefits, let us proceed to our main discussion.
Is it good or bad? Now naturally, when we say good or bad, good to one could be bad to another.
But, what we are trying to find out today is, whether outsourcing is good for both the nations? Outsourcing and outsourced nation. Well, initially nations that started outsourcing their jobs, they felt that outsourcing their jobs offshore leads to lesser jobs for them. In fact many people lost their jobs initially.
Primarily, in the early days of outsourcing, people who were associated with website development, customer service, customer helpdesk, technical support, etc lost their jobs. These jobs were outsourced to offshore call centers because of the cost factor. The citizens of outsourcing nations had initial problems dealing with difference in accent of the call center representatives in outsourced nations. Slowly and gradually major companies realised that it is better to have 2 tier support.
- Outsource lower level support to outsourced nations.
- Have onshore solutions for higher level support.
This strategy was adopted by many companies which lead to a higher customer satisfaction ratio.
Well, we have spoken about inbound call center services, now let us talk about outbound call center services. Before that, let me explain you the difference between the both.
Call Center: A term that generally refers to inbound centers, outbound centers, help desks, information lines or customer service centers, regardless of how they are organized or what types of transactions they handle.
Inbound call center: Call center services that support calls received from a customer. Inbound call center calls typically include customer support and help desk calls.
Outbound call center: Call center services that consist of calls made by a company representative out to customers. Outbound call center calls are primarily telemarketing calls.
Now that you know the meaning and definitions of both, let us discuss the topic further.
Out bound call centers also followed the same stream. Initially companies outsourced as much as they could to offshore, but slowly and gradually most of the companies learnt that it is better to follow blended outsourcing. Blended outsourcing, that is a new term. Let us discuss what it is.
Blended outsourcing means outsourcing a part of the process to offshore call centers and the rest to onshore call centers. This Blended outsourcing approach has some major benefits.
- There are many services which are legally not allowed to be outsourced offshore. Utilizing the benefits of Blended outsourcing, this can be managed very effectively.
- The low cost services can be outsourced to offshore call centers, whereas the higher cost services can be outsourced to onshore call centers.
- The blended outsourcing leads to better customer satisfaction.
Well, now you would agree that Outsourcing is Good for both, outsourced nation and outsourcing nation if managed properly.
End2End Consultant is a Business process outsourcing company providing BPO Solutions to global clients with an excellent track record of beneficial outsourcing. We have successfully managed customer service and technical support operations for many companies based in different parts of the globe.
The Two Most Important Outsourcing Metrics
July 8, 2008
By Sam Miller
For decades, outsourcing has been around and yet it was not really a part of the daily business vocabulary. However, nowadays, it is already safe to say that outsourcing has become a household terminology. But what is outsourcing and what are the outsourcing metrics that companies should know before working with outsourcers? Outsourcing is more of a business strategy or approach. This is not like a partnership because this involves two separate organizations. One is the client and one is the outsourcer. The client's role is to give business to the outsourcer. On the other hand, the outsourcer is a specialist on a particular service that the client needs.
For example, a large company does not have its own payroll and accounting system or department. What it will do is contact a firm that will do its payroll and accounting job. The company pays this payroll organization for these services. To the employee's mind, it was the company that processed his payroll. Little does he know that it was a third party organization. Outsourcing is also very common in manufacturing. The most common example would be the industry of shoes and apparel. Many people believe that the shoes they buy, let us say Brand Y, is really manufactured by Brand Y. Consumers do not know that the Brandy Y shoes they are buying are not even made in the United States, but in another country. The actual manufacturer of the shoes is another company, but the manufacturing standards are based on Brand Y's quality standards.
Outsourcing is a good business strategy so a company can spend more time managing its actual strengths. For example, some companies, like shampoo brands, need to focus on research instead of manufacturing. Others, like electronics companies, also have to do the same. Some corporate organizations also find it a hassle to maintain its own payroll and hiring departments so they contract others to do it for them.
One of the key metrics in outsourcing is process. There has to be a clear and definite process as to how the work needs to be done. The process should also include methodologies on the work that is specified, tools needed, and other things that will impact production. In essence, the process metric should also have several breakdowns, like training and quality. This is a way to ensure that the employees hired are equipped with the necessary tools they need-not only physically, but also mentally-to perform the job at their best form.
Another metric that that should always be included is the People Metric. This metric deals with the development of people and this starts from the hiring process. Any organization that decides to outsource part of its department or task should clearly indicate to the outsourcer what it needs. The skill set of the employees needed to perform the job should be well defined. The experience needed should also be clear. In general, the employee should be profiled to fit the needs of the job. There may be more outsourcing metrics, but these two are the most important.
If you are interested in outsourcing metrics, check this web-site to learn more about outsourcing kpi.
Call Center Training, Is a Must
July 1, 2008
By Hani Masgidi
The remarkable growth of Call Center Industry has ushered to the opening of Call Center Training schools. Training schools may be accessed on line where all claim to be best in the field. There are two constants in the area of training; one is that training costs and it is actually consuming large portion of call center's resources; two is the accounting of the result of the training, there must be an improvement in the performance that would justify the resources spent.
Training is made so as to improve and further develop the performance of an agent. The training satisfies two areas such the personal and individual professional growth of the agent and his delivery of good productivity to the company. With good training, the call center should expect the following results:
- Agents could handle themselves more professionally and with confidence.
- New hires could no longer be distinguished from the experienced agent.
- Better customer satisfaction.
- Better productivity.
Training is not a one time deal, it is continuous. It is an indispensable tool that would help to keep the performance of agents on target. Best agents are those that have both the training and the experience. A call center agent is developed as he faces and handles the widest set of situations in the day to day performance of his job. But an experienced and consistently trained agent performs best. Good training provides additional knowledge and confidence to the agent. An effective training is one that derives its training objectives from the business objectives. There are two truths with training; it could only claim to be effective when the results are seen and it is a continuing program.
Training is a part of growth and development resulting to a better performing individual. Here are some good reasons why a call center executive should be an advocate of continuous training:
1. It boosts morale. An agent would feel motivated will the newly acquired knowledge and added skills.
2. It costs less than recruiting and hiring. Call centers have the reputation of having the greatest turn over and this could be reduced if not eliminated through training.
3. Training stimulates the desire of an individual to improve.
4. Training keeps the pace with the rapidly changing technology.
5. It develops teamwork and thus results to better productivity.
6. Training is an investment that returns many times over. Because it raises morale it directly boosts efficiency and therefore productivity.
7. Training raises the rookie to a professional. Investing in training your staff or agents gives the feeling of being valued that could help build their loyalty to the company.
8. It eliminates stress. A good training provides agents with the skills and tools needed to handle stressful situations, especially in dealing with angry customers.
Considering all of these, management and supervisors can rest assured that the call center operation will run smoothly and customers will be satisfied with the service they receive from a motivated call center agent. All Center training is not mere compliance to a system; it is an essential part of development and an absolute requirement, just like computers and head sets to a call center.
Copyright (c) 2008 Hani Masgidi
Call Center Hiring and Staffing
June 15, 2008
By Hani Masgidi
Call centre business has a reputation of being one of the industries that has high hiring and firing turnover and likewise, the mindset of the people available in industry is nurtured on the same philosophy. They are not much concerned about frequent switching like other careers where it goes against you. Finding and retaining right people for the call centre is a well known dilemma, as there are certain shortcomings which are attached with this particular business, so, all the measures can only contribute in reducing them and that's the maximum achievable when it comes to call centre hiring and training.
Retention is highly recommended, go an extra mile to retain an agent who is a part of your call centre, he has prequalified, has got-on with the things and you are also able to evaluate his abilities. Make a correct judgment about the skills of the person and offer all that which the person expects by way of any of your company intelligence. Changing people is a never ending story for call centers; the need of the hour is to change minds of the same people. Recognize their needs and address them instead of preferring aggressive hiring and firing. You have already invested in their training, up gradation and grooming.
If for one reason or another, you are to hire call centre agents, make it a real task for yourself. Do a lot of homework about the interviews and selection strategy. Conduct an in-house meeting with Managers and supervisors to evolve an efficient and effective evaluation procedure that can end-up in picking right people for the job. Look for the accent first of all, that's the biggest selling-point.
Your second priority should be the evaluation of overall personality, find-out the sense of responsibility with the body language and the way of responding to questions. Put some of stupid questions across and detect the patience of the person, if he keeps his nerves cool and come up with respectable reply, go for this person. He/she will sustain.
Through cross questioning, bring-out the internal road map of the person about his pursuits of career. Get an idea about his endeavors and expectations. Ask him about any ideal call centers' pre-exquisites, this way he will give you his picture about the call centre he wants to join and what things will satisfy him in the long run. Never trash the interview assessment, make it most important document in the lifecycle of that particular agent.
Regardless of the facts elaborated in the article, time 7 again, the only short-cut to get good call centre agents is the experience. Nothing else can do it for you as good as this. So behave maturely, improve communication, enhance flexibility in overall decorum, and facilitate your agents to maximum extent, so that they can be at peace of mind to make effective sales or to offer quality customer service. Time has changed for the employee and employer, now both have to understand each other to fall into long-term relationship, so care for your agents and get care in turn and it works.
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How To Improve Call Center Effectiveness
June 13, 2008
One thing that customer service call centers dread is customer backlash and this is something that is becoming all too common for call centers all over the world. Disgruntled customers choose to do business with a rival instead of you because you could not offer them the after-sales service that you promised. When customers consider their trust to be breached their reactions include a poor perception of your company, reduced likelihood of doing business with your company, and almost no chance of recommending your company to a friend.
Customer call centers invite trouble when they deviate from the maxim that an existing customer who has paid good money deserves respect; ironically most businesses are aware that it's easier to retain a customer than go for a new one.
Poor customer perception of business call centers is not industry-specific. Its spread across industries covering businesses of all sizes. Too often, businesses lose sight of customer requirements and in an effort to improve operational efficiencies they cut corners and try to reduce costs. This affects call center performance.
If you are running a call center, you should know where the trouble lies; here are some of the issues that are pet customer peeves
Having to make more than one call and then talking to more than one customer representative
Having to stay on hold, deal with IVRs and a menu that is anything but easy to use.
The absence of dedicated executives, so that each call is a new beginning where the problem has to be explained afresh.
Poorly trained executives who more often than not escalate the issue to their seniors while you are put on hold.
If you wish to improve your customer's experience when interacting with your call center, here are a few things that you need to understand -
Time and effort devoted to offering customer service should not be viewed as an avoidable cost, also your call center is not a cost center it is a profit center which if run properly will get you a very quick ROI on what you put into it. It also means that you have to select your call center
A successfully closed issue helps a great deal in retaining a customer.
Only trained staff can deliver consistent results so focus on training the staff, quality control. Attrition can prove to be a drain on your resources so work on retaining the experienced and talented staff.
Remember there are a lot of intangibles and trifles that lead to improved customer call center performance which in turn enables you to achieve sales conversions. Empathize with your customer and you will be handsomely rewarded for it. Do not forget that it also means that you have to carefully select your call center
Piyush Bakshi is a full-time content provider working with Gate58 which owns http://www.vendordemo.com
Call Center Operators Begin To Work At Home
June 3, 2008
By: Todd Cardin
If you ask any answering service owner what the biggest challenge that they face today almost all would answer employees. For a number of years employers have tried a number of methods to find a desirable employees to work in what is sometimes less than desirable circumstances. Today technology has delivered these answering service owners a new alternative; the stay at home operator.
Thanks to VoIP services it is very easy for an answering service operator to log on and work off premise with the same advantages as an operator has in the war room of the call center. There are several advantages to such technology and call centers who have implemented these advances are seeing major changes. Some of these answering services virtually had to beg for employees and the pickings were slim. Now these same businesses actually have a waiting list for employees, with highly qualified candidates.
Another advantage to the stay at home operator is that it allows the answering service to be able to fill peak time periods and cover absenteeism more efficiently. The answering service now has alternatives when there are weather related emergencies as well as filling those difficult to handle shifts. There are offices that will staff overnight shifts with work at home operators.
Still other offices have been slow to embrace this type of technology while other offices reluctantly use this technology only for emergencies or supervisory tasks. There is a general misconception that these operators are more difficult to supervise and that the only way to run a call center is from a centralized location. With the advanced statistical reporting capabilities that most answering services possess, coupled with voice recording technology these employees are as easy to supervise as they would be in your office.
As the answering services that utilize at home operators continue to flourish, others are following their lead. At home operators now make up the fastest growing segment of employees in the answering service industry. In addition this new trend seems to be an alternative to overseas outsourcing. With the advantages offered to work at home operators, answering service owners and the industry as a whole, stay at home agents seem to be the trend of the future.
About the Author
Todd Cardin is the east coast marketing team leader for Specialty Answering Service. For more information about Specialty Answering Service, please visit http://www.specialtyansweringservice.net and explore our services.
Following are some random thoughts on the management life:
June 2, 2008
Steve Wyrostek MBA, BA
Matching - One of the most gratifying aspects of management is correctly matching people to positions or tasks. To attain this perfect union is no small achievement. In fact, matching requires a great deal of active thought. Pick up a copy of The Godfather to read a passage that provides a clear description of this process in action.
It's the part where the capo, Clemenza, was trying to decide which button man should be given a chance at better things- in this case, to assist on a hit. The passage describes the intricate thought process Clemenza goes through to make the perfect match of task and worker. Finally, after he decides on the right person, "Clemenza felt the relief of a conscientious administrator who has solved a knotty personnel problem."
Stand for your employee's success. This seems obvious but I feel at times the insecurity of managers can knowingly or unknowingly sabotage this practice. For a manager, this means properly matching task and person, removing obstacles, providing thoughtful guidance and giving proper credit at all times. Placing your employees in a constant position to achieve success helps them, the company, and you. Stand for your employee's success. Always.
Keep your superior standards realistic. I used to cringe when a manager would say, Well, my employees have to walk on water to achieve a superior ranking. Come on! Try not to suffocate talent by being too lazy to perform the observation required to recognize it. Superior performance is all around us. Let's seek out ways to notice and reward it.
Maintain confidentiality. I once had an employee who thanked me because something she told me in confidence didn't get around the office. She thanked me! That was the easiest thank you I ever earned. I always thought a good rule was never to mention employee issues- even if the employee didn't request confidentiality. A good example of this is when an employee would tell me she was pregnant. I would always ask if it was public knowledge and if not, when it would be public knowledge. Even then, I never would say anything until someone else mentioned it to me.
This especially extends to personnel issues. For example, I know managers who would tell other employees that one of their peers was on a performance improvement plan! It's bad enough that's a serious confidentiality breech but it's also the beginning of the worst kind of cancer- the kind that kills morale.
Don't be afraid of upward delegation. You may have to do your job! Just learn to differentiate your job from hers. If an employee asks you to do something you feel she should do, suggest that's how you feel- it may be a stretch for her, it may not be her job but she needs to do it. However, if she comes to you with something that's your job- do it. For example, if she needs help in obstacle removing at your level- that's your job, not hers!
Always assume that all confidences will be broken. If you tell someone that you heard so and so is getting a new job and ask that someone not to repeat it, assume it will be repeated three times. The naiveté I've seen in managers who assume if they say something is in confidence it actually stays in confidence has always surprised me. The practice to consider here? Refrain from saying anything you're not comfortable with everyone knowing.
Always assume your emails will be seen by everyone. A great example of a manager not being mindful of this was Mike Brown, the head of FEMA. When the emails he wrote in the immediate aftermath of Katrina were released, their content made him look like an insensitive chowder head. He came across detached and frivolous in the midst of a crisis.
Management is a noble profession. Let's maintain and even elevate it through thoughtful blending of the management stew.
Steve Wyrostek MBA, BA
President- Gentle Ears, Inc.
steve@gentleears.com
http://www.gentleears.com
Member HRMAC, SHRM, ASTD, Association Forum of
Gentle Ears- Where Listening and Learning Embrace
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The Ethics of Outsourcing Customer Service
May 29, 2008
Stop working so hard trying to improve your call center performance, use call center games to achieve extraordinary
Alma schools may privatize custodial services - Morning Sun
The district is looking at a budget deficit of $176,000 this year and a shortfall of more than $400,000 in 2008-09. Board of Education members are searching for ways to save money that "do not affect the kids or the classrooms," Superintendent Don
The Ethics Of Outsourcing Customer Service - NBC 10
It's a familiar scenario: A product you purchased recently has developed a problem, so you call the company's toll-free number and are connected to a "customer service associate" in India or the Philippines. You describe your problem but have a hard
WNS Announces Partnership with ESI to Develop Real-Time CRM Solution - MSN MoneyCentral
WNS (Holdings) Limited WNS , a leading provider of global business process outsourcing (BPO) services, today announced a strategic partnership with Exchange Solutions Inc. (ESI), which creates and hosts interactive sales and marketing solutions
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Indian outsourcing companies like Infosys, TCS and Wipro are getting bigger and bigger, and Indian pharma companies like Ranbaxy and Dr. Reddy’s are expanding in the West. But not everybody in India is buying the hype that success stories like
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Stop working so hard trying to improve your call center performance, use call center games to achieve extraordinary
Gag It!
May 26, 2008
Funny Gags to keep the unexpected alive!
Jody Urquhart
If you want to have more fun and literally save your sanity just and look for ways to be a bit offbeat and do the unexpected. Do something that makes no sense at all, that’s throws off people’s expectations (and puts them in the moment, which is stress free). Remember the key to any humor or practical joke is to establish your competency first. I suggest you try any of the below fun things with people you know well.
For those of you who take yourself seriously or are skeptical here is why doing the unexpected literally saves your sanity:
Doing the Unexpected, Silly and sometimes outright Ridiculous:
- Puts you and others in the present moment (which is stress free)
- It balances your perspective
- Literally forces you to lighten up and not take things so seriously
- Produces Humor which makes you laugh, which has hundreds of positive benefits
- Increases creativity
- Allows you to play as an adult
- Mixes work with pleasure
The unknown freaks a lot of people out (me included) so just be cautious especially in the beginning.
Give yourself permission to take a risk, do the semi ridiculous and see what happens. If you feel silly remember that’s the whole point, so lighten up!
Here is an exhaustive list of unexpected things you can do to create unexpected fun. Some of them are rather prank- like and some are just plain funny
- Make up a word… and keep throwing it in now and again and see what people do. Or finish every sentence with blah, blah, blah
- Write someone a note to meet you outside in 10 minutes but don’t sign the note
- Wear something weird on the weekend. Mini skirt and leg warmers, if you’re a man
- Go up to someone and say” I support you no matter what other people are saying”
- Page yourself over the intercom and recognize what a great job you have been doing
- Walk around in circles around your office –look very perplexed People will wonder what you are doing.
- Add items to someone's written reminder list (-i.e. buy condoms)
- Make noises when people walk by
- Stand really close to people, stare at them and walk away
- Stand really close to someone and say…Did you do anything in the last week you would like to confess to? Do you have anything to tell me? Are you sure?
- Put outrageous price tags on office equipment. (i.e. - $30,000 for a computer mouse)
- March up to someone and tell them they need to help you with something and say. “If we don’t get this done right away were both completely screwed”
- Say there is a new sexual harassment policy that says you’re not allowed to make eye contact at work
- When someone wins an award the next day send out a memo to say the award has been discontinued
- Go up to a complete stranger and ask if you can have your photo taken with them
- Get some water guns
- Get up, jog on the spot for 10 seconds and then sit down again.
- Go up to a cashier and tell them your dog told you bad things were going to happen today and they should be prepared
- Give away your place in line. In a long line at the grocery store, I was second in line, I looked to the last guy in line and said “Heah, come here… “He sheepishly walks over, I said “here you can have my place in line”, and I went and stood at the back of the line. He was speechless and so was everyone else. Just for Fun!
- Make a funny face
- Be unreasonable. When your spouse says lets go to Costco say, I can’t possibly go there until I get my hair highlighted. (It makes no sense and that’s the point).
- Stand up at your desk and spell your name with your hips- do it right now we dare you
- Fill a phone booth with people
- Take an invisible dog for a walk
- Talk only in famous catchphrases from movies.
- Verbally Abuse your office furniture
- Stand facing the corner at work until someone asks you why
- Yell to someone, “here catch…”and throw an invisible ball
- Run franticly down the hallway
- Cut out photos and paste them on Popsicle sticks and have a puppet show
- Fake an accent
- Laugh out loud for no reason
- Write your name in permanent marker on all your underwear
- Break into a friend's house and clean it
- Give names to your body parts
- Kiss your elbow, if you can.
- Lay a long straight line of masking tape on the floor. Now spin around really fast then try walking on the masking tape.
- Let helium balloons float to the roof and throw stuff at it to pop it
- When someone comes out of the bathroom ask them if they washed up
- When someone talks to you say I know you are but what am I?
- Repeat everything someone says
- Make random observational comments (“I love pastrami” OR “Dryer Lint tastes bad”)
- Run up to someone holding your throat and say I swallowed a paperclip
- As soon as someone starts talking to you start talking at the same time
- When talking on the phone, start pressing the buttons
- Write a memo to someone and use horble spelling
- Walk into work and announce “I don’t know where I am”
- Speak excruciating slow
- Walk into a restaurant and order something not on the menu
- Tape a post it note on your back saying funny things
- Wear 3 outfits all at the same time
- Make a trash can a basketball hoop
- Using heavy duty packing tape- tape someone to the wall
- Sit at your desk with your left arm sticking out until it goes numb
- Snap your fingers for no reason
- Make the most trivial or confusing complaint to a coworker.
- Talk in circles
- Keep saying… “Like I said” and says the same thing over again
- Turn on the T.V. put it on mute and make up dialogue
- Every so often pretend to trip on an 'invisible' wire
- Find some crutches and pretend to have a broken leg
- Ask someone what there goal in life is and laugh hysterically (make sure you know the person well)
- Collecting all bad news from newspapers and making a ritual campfire to burn
- Have a lemonade sale at work
- Greet someone with “Happy Tuesday” when it’s Thursday
- Get food all over your face at lunch and don’t wipe it off
- Leave copious amounts of jujubes with your tip at an upscale dining establishment
- Bring your old clothes to work and give them to people
- Make gingerbread men and decorate them so they look dangerous
- Name every item in your workspace an odd name
- In the cafeteria dare someone to eat Jello without utensils
- Wear a tiara to work
It's a good idea to obey all the rules when you're young just so you'll have the strength to break them when you're old.
-Mark Twain
Jody Urquhart is a professional speaker who for the last ten years has motivated and inspired professionals to use humor to change there lives. Please contact us to see how we can recognize and inspire professionals at your next event.
Finding Your Business Management Style
May 24, 2008
By Nazir Daud
Business management combines an interesting mix of theory and practice, and it is a particularly good topic for management and entrepreneurial types to study. Finding a business management style that suits your personality and the nature of your business is both important and worthy of time investment, as being self-aware and being able to identify strengths and weaknesses of various approaches will enable more effective personal development and ultimately more effective management.
While many have their own individual business management styles, these are traditionally broadly categorized into three main classes of business management approaches.
Autocratic Management
Firstly, there is what has come to be known as the autocratic approach to management, which installs more trust in the leadership as opposed to the individual staff. This involves pulling rank and leaves employees in no doubt as to whom the management is or what decisions are being made. Rather than engaging employees within the decision making process, this business management style typically concerns businesses that require direct, effective leadership to produce results, often under pressure of working in a tough environment. Upon hearing the term autocratic, many tend to visualize a dictatorial approach to management. While that is perhaps the case, it is seldom as strict as this and it is often a necessary management style, for example in the armed forces or in a high-paced trading environment, where there is no margin for deliberation and group consideration.
Democratic Management
Alternatively, there is a business management style known as the democratic style, where employees are effectively engaged in consultation before decisions are made. While some consider this to be more motivating and more enjoyable to work under, it does nevertheless have its own disadvantages. Giving employees a say may undermine the authority of the management, and may ultimately cause inefficiencies in the decision making process. It is also time intensive, and perhaps not as effective in larger organizations with thousands of employees. While of course at a board room level this kind of decision making goes on everyday, it's one that works most effectively in slower paced business where decisions can be fully deliberated and considered.
Laissez Fair Management
An alternative to those two business management styles and the third main category is what's known as the laissez fair management style. This is by definition a more hands-off approach to management, which puts the trust of running the business within the hands of employees themselves, and allows a greater degree of autonomy than would otherwise be the case. While this is strong in creative industries, some business people find that this style of management can lead to a fragmented approach to doing business and is less organized and perhaps less professional.
Whichever business management style you liken yourself to; there are advantages and disadvantages of that approach. What's important is not that you recognize which of these categories you fall under, but rather that you're aware of the improvements that can be made to make your management more effective and efficient while also improving the relationships you share with employees at all levels of the organization.
Naz Daud is the founder of CityLocal. This Franchise Opportunity & Business Directory is for people who would like to work from home and be their own boss.
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