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Hierarchical Structure and CSR Policies

Discuss how the hierarchical structure of MBFS could assist or hinder the board in assimilating recommendations.

Introduction

Hierarchical structure refers to the organizational structure that involves establishing clear and comprehensive authority for work and departments and managers are given authority based on their management levels. Examples of the authority given to the managers include the power to allocate resources, order and delegate duties to their subordinates, rewarding employees, and punishing bad behaviors in the organization. Most large organizations have been moving from the traditional hierarchy to team approach or networks of outside suppliers and only small businesses use hierarchical structure (Karen, 2015). Application of hierarchical structure in an organization is characterized by various benefits and shortcomings that have different impacts on the organization’s goals, for example, assimilating recommendations. The paper will discuss some of the ways through which hierarchical structure of Major Banking and Financial Services PLC (MBFS) could assist or hinder the organization’s board in assimilating recommendations.

Hierarchical structure of MBFS assists the company’s board to assimilate recommendations by establishing clear authority for each board member in assimilating the recommendations. Having clear definition of each manager’s roles in assimilation of recommendations helps to avoid confusion within the boundaries of managers plus the chain of command. The feature is also necessary when making decisions and handling disagreements when assimilating the recommendations. Clear definition of managers’ roles also helps to manage subordinate hesitations by giving chairperson of the board power to order the board members and expect compliance (Kucharska and Kowalczyk, 2019). Hierarchical structure of MBFS is important for taking the pressure off the entry-level workers in the team since the power of decision-making is consolidated at the top of board executives. The board executives, through the chairpersons are responsible for making the team decisions that would affect all the board members under the consultation of senior leadership. Therefore, the junior workers are only left with the challenge of meeting the required deadlines without having the pressure to make decisions.

Hierarchical structure assists MBFS’ board to assimilate recommendations by establishing clear communication lines. According to Simpson et al. (2013), the clear lines of communication are essential for creating effective relationship between the board executives and the board members. Such effective relationships are crucial for limiting the constraints in decision-making during assimilation of recommendations. Clear lines of communication also helps to recognize the board chairperson as the committee spokesperson and the board members are expected to report to the board chair for directives on how the recommendations should be assimilated (Sinha, 2021). Therefore, having clear lines of communication among the MBFS’ board members serves as the unifying factor between the members, which contribute to proper coordination of board activities.

Hierarchical structure assists MBFS’ board to assimilate recommendations by giving clear results. According to Sinha (2021), hierarchical structure makes it easier to organize the board members based on their job categories in order to allow the members with similar roles share resources allocated by the chairperson. On the other hand, board chairperson finds it easier to coordinate similar efforts for greater effects during assimilation of recommendations to set stage for efficient operations and cost saving during the process. Hierarchical structure is also important for eliminating the possible issues of indecisiveness during the recommendations’ assimilation. Hierarchical structure places one person, preferably the board chairperson at the important position of making decisions (Karen, 2015). Such features provide a clear channel of communication about the responsibilities of each board member in assimilation of recommendations. The design also makes it easier for the board members to trace the progress of ongoing activities during assimilation of recommendations, the project status, and the quality of work under progress.

In addition, hierarchical structure of MBFS assists the company’s board to assimilate recommendations by identifying the possible places where duplication could exist. MBFS applies hierarchical structure to identify the teams that share resources and the job responsibilities that overlap among the board members, which would likely increase the cost of assimilating recommendations in the company. Minimizing overlapping responsibilities and the cost of assimilating recommendations to create more efficiencies within the organization’s financial profile, hence; setting the stage for successful implementation of recommendations (David and Shahla, 2018). On the other hand, hierarchical structure of MBFS allows specialization of board members and causing the board executives to be responsible for various tasks that would eventually accumulate to successful assimilation of recommendations. For example, hierarchical structure allows one of the board executives to be responsible for communicating the progress of assimilating recommendations while the other executive could be responsible for allocating the required human resource to ensure a successful assimilation process in the company. Having the hierarchical structure in MBFS also allows the board executives to divide responsibilities among the board members in logical ways to create additional layer of efficiencies in the assimilation process.

However, hierarchical structure could also hinder MBFS’ board to assimilate recommendations through various ways, for example, the structure could promote isolated and siloed thinking. The fact that hierarchical structure allows board members to work together does not mean that the structure could not isolate the members from other group activities, hence; minimizing cooperation and communication among the board members (Simpson et al., 2013). The board members could disagree on certain board matters and such disagreements could hinder assimilation of recommendations. The structure also allows the board members to prioritize their own interests or agendas ahead of the company’s goals when assimilating the recommendations.

Moreover, hierarchical structure hinders assimilation of recommendations by promoting power centralization. Hierarchical structure is associated with power centralization at the top leadership position and such centralized power is likely to cause various problems such as ineffective decision-making. Most of the activities that constitute assimilation of recommendations could be hindered if the board chairperson is caught up in daily operations Croft et al. (2012). The most appropriate decisions about assimilation of recommendations are best made when issues are left with the board chairperson instead of assigning the juniors or board members. Hierarchical structure also delays the process of assimilating recommendations due to the growing hierarchy as the structure grows. Bureaucracies are common in hierarchical structures and the concept is often characterized by slowed decision-making and lumbering communication among the board members. According to Simpson et al. (2013), communication requests in hierarchical structures have to travel up and down based on the chain of command and such channel of communication delays the process of assimilating recommendations in MBFS’ board.

Hierarchical structure of MBFS may also hinder the board in assimilating recommendations by causing lack of collaboration among the board members since the members are likely to stay within the defined structure. Hierarchical structure of MBFS also makes it difficult for the board members to successfully collaborate outside the team silo. The board members are also likely to stick together and compete for power instead of working together as a team to advance the mission and objectives of the company in assimilating recommendations. Hierarchical structure might also hinder assimilation of recommendations by causing the top board executives to become territorial about their power and influence within the organization (Croft et al., 2012). The top executives tend to defend their chairpersons while intimidating the junior members, hence; discouraging the members from putting more efforts in the assimilation of recommendations. The top executives might also approach every situation in the organization from the perspectives of their roles instead of looking the team issues with a clear mind. Such perspectives tend to cause power wrangles and competition among the top executives, which could be destructive for team progress.

Hierarchical structure of MBFS could also hinder the board in assimilating recommendations by minimizing internal innovation. According to Borghesi et al. (2019), even though hierarchical structures are associated with clear reporting structures that keep communication moving, the structure contributes to rigid communication and engagement structures that could limit innovation among the team members. For example, junior members could be discouraged if their innovative ideas are rejected by the top leadership of the team. On the other hand, accepting the innovative ideas could lead to detrimental impacts on the organization’s future revenues. Therefore, it would be necessary for the board members to share ideas for successful assimilation of recommendations. The structure could also hinder assimilation of recommendations by creating communication barriers since the junior members are not permitted to skip layers within the chain of command (Sinha, 2021). Therefore, workers could be completely discouraged from communicating to their supervisors due to lack of trust. Junior board members could also create their own jargons to interfere with internal communication within the team since it would not be necessary to withhold information that would benefit the senior leadership.

Hierarchical structure of MBFS is also likely to create tension among the board members due to unequal treatment. Hierarchical structures are characterized by pyramid at the top and the bottom point and those at the top of a pyramid are respected more than those ate the bottom. Such unequal treatment of top leadership and the common board members demotivates the junior members since they are less respected (Croft et al., 2012). Some of the board members may also decide to quit the group activities and such issues could create problematic situations, especially when the highly-skilled members quit the board. Unequal treatment might also discourage the junior members from actively contributing towards the project success, especially when the top leaderships are rewarded more than what was earned.

Conclusion

In conclusion, hierarchical structure of MBFS remains important for assisting the organization successfully assimilate the recommendations. However, the benefits and shortcomings of the structure mainly revolves around communication, collaboration, and innovation. Therefore, the company should implement various strategies to handle the potential shortcomings that might hinder assimilation of recommendations. Failure to deal with the shortcomings would automatically hinder the assimilation process since the board members will be siloed into their specific roles and discouraged from contributing towards the project success.

 

 

Explain the differing expectations of internal and external stakeholders in relation to the introduction of CSR policies and how their interests will be affected. Include in your answer an evaluation of the levels of interest, and the respective impact of each stakeholder grouping on the CSR policy

Introduction

Stakeholders play significant roles in the organization’s decision-making process and engaging the CSR policies. The choice of stakeholders on the CSR policies also has significant impacts on the community’s economic development based on the CSR projects that are associated with the designed policies. The two groups of stakeholders (internal and external stakeholders) have specific roles, responsibilities, and rights in the business including the CSR policies. Internal stakeholders include the employees, board members, company owners, donors, and volunteers while the external stakeholders include customers, clients, business partners, and suppliers, and shareholders (Karen, 2015). The two groups have different expectations in CSR policies. The paper aims to explain the differing expectations of internal and external stakeholders in relation to the introduction of CSR policies and how their interests will be affected using the stakeholder theory.

Background Information of Stakeholder Theory

The stakeholder theory has various strengths and weaknesses in addressing the issues related to low-wages and poor workplace conditions. However, according to GGG, classifying the stakeholders in a business has moral import and significant outcomes in ensuring that the stakeholders’ challenges are promptly identified and treated accordingly. Human resource departments of various organizations have applied the stakeholder theory to increase and advance their awareness of all activities that negatively affect the stakeholders’ interests (David and Shahla, 2018). Having advanced understanding of the stakeholders’ needs is also important for minimizing disappointments to all parties involved in a business, for example, by acknowledging the centrality of moral content in business decision-making. Therefore, stakeholder theory is important for holding the universal appeal of morality attribution to both stakeholders and the organization’s top management.

External Stakeholders

Customers and Clients

Customers and clients have the highest expectations from the CSR policies. Customers expect the CSR policies to protect labor rights responsibilities, ethical responsibilities, human rights responsibilities, and environmental responsibilities. However, customers and clients expect the least impacts of CSR policies on social responsibilities (Croft et al., 2012). Therefore, customers and clients expect the CSR policies to encourage organizations to allocate most of their resources in ensuring protection of labor rights responsibilities, ethical responsibilities, human rights responsibilities, and environmental responsibilities. Customers and clients also expect the CSR policies to promote quick response, personalized experience, prompt solutions to their problems, listening to their complaints and interests.

Suppliers

Suppliers expect to pursue excellence in product and services quality, provide the appropriate information about the products and services, and efficiently deliver products to customers having considered the customers’ safety and comfort.

Business Partners

Business partners are expected to maintain fair, just, and transparent relationships while conducting transactions with integrity. Business partners are also expected to comply with the laws and regulations in the countries where the business has influence in order to maintain fair competition (Borghesi et al., 2019). Business partners are also expected to act in accordance with the CSR policies for human rights responsibilities, environmental rights responsibilities, and other important elements when undertaking the procurement activities.

Internal Stakeholders

Employees

Employees expect the CSR policies to promote meaningful work and encourage the employers to have clear understanding of their values and contributions towards a sustainable global economy. Employees also expect active participation in the future organization’s direction through actions and participation in decision-making.

Business Owners or Employers

Employers are expected to leverage employees’ commitment and engagement in the organization’s CSR strategies. Employers are also expected uphold integrity within the organization, protect the employees’ welfare, properly remunerate the required workforce, promote a diversified workforce, and listen to employees’ complaints.

Conflict of Interest

Interests of the stakeholders are also likely to be affected by the CSR policies, hence; contributing to conflict of interests among the stakeholders. For example, suppliers are expected by the CSR policies to prohibit the employees’ roles that may cause harm to the interest of an organization while gaining personal interests. Suppliers are also expected to conduct their businesses properly with the business partners by considering various forms of relationships such as employment, ownership, and management (Amy Yeo Chu May et al., 2021). Employers are also expected to avoid close family members or close friends of their employees, and even avoid suspicion as an illicit activity. On the other hand, suppliers are expected to report to the relevant authority any illicit activity or inappropriate requests from employees without responding to such requests.

Conclusion

In conclusion, the ability of managers to create sufficient wealth and satisfy the primary stakeholders is important to maintain firm’s survival and success. The support of every stakeholder is also important for ensuring successful operations of an organization. Therefore, organizations are required to identify and integrate the crucial social issues affecting the primary stakeholders, organizational policies, and human resource management practices. Both internal and external stakeholders should have dyadic relationships between them and the firm to ensure successful operations of the firm. CSR policies are necessary to define the roles of each stakeholder, expectations from each stakeholder, and the organization’s policies, processes, and practices towards the group of stakeholders.

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