Traditional Management Model vs. Modern Management Model

The world economy increasing becomes globalization, which lead to broad mixture of local, national and global markets and organizations, due to different ethic, values and cultures, even both parties speak same language, there still could lead misunderstanding, therefore today’s managers face more challenges, such as understanding the changing trends in the market, how to maintain beneficial interpersonal relationship with employees and clients, concerning  about business ethics and corporate social responsibility surround managerial actions. And the turbulent global environment push managers spend more time crossing borders to conduct business, it is necessary to understand how to communicate effectively with people in different cultures to fulfill the organization’s missions and create values for the stakeholders.

Traditional top-bottom management model was successful in the 20th century, however managerial hierarchies and traditional approaches may impose heavy costs on the business that would become administrative burden in future. Moreover, business and environmental changes occurred at a slow pace in the past which was easy for managers to deal with, however today’s market changes at a fast rate,  the development of technologies also aggravate market competition, the traditional hierarchical management need a long time to response the market changes, which could not give managers enough freedom to plan and organize their works. Therefore, in order to adapt to ever changing business environment, it is critical to improve the structures of the company and global management approaches, come up with strategies which enable business cope with the changes in the external and internal environments.

Comparing Traditional Management Model and Modern Management Model

The purpose of this section is through comparing the differences between traditional organization and modern organization to identify the problems in traditional management model, discuss why traditional management model cannot meet the needs of global business management.

Traditional Organization Management

The structure of traditional organization like the military system, which is hierarchical, organized and discipled. The power flows vertically and upward, the employees are departmentalized and follow a chain of command. Each department has its own rules and regulations, the superior of the department who is responsible to report to the managers. Every employee strictly follows the business strategies, has own job description and accountability to the superior, therefore traditional organization structure is likely fixed and rigid in general.

For the traditional management model, it could be the advantage that structure of the organization is simple to design and operation, it is easy for the employees understand their authority and responsibility. Moreover, due to the chain of command from top level to subordinate level, the employees have fixed responsibility who are responsible to their direct superior, it could reduce the probability of conflict and maintain discipline in a line organization. However, due to the hierarchy management model was developed in industrial age, the system of decision makers, executives, managers and employees worked well when the companies operated in relative isolation from the rest of world and manufactured physical products. By contrast, today increasing number companies become globalized, they not only produce physical products but also sell ideas, which would encounter disadvantages when using traditional management model.

Because the traditional organization has many layers of management, all the people need time to weigh up and coordinate the issues, it would be taken long time to make decision, therefore many managers may feel their opinions is being ignored. Moreover, in terms of interpersonal communication, the message easily get distortion when directives move through a traditional hierarchy organization. Because each supervisor or manger may interpret the words in different way, until the message reach employees, it may be different from the original intention. Furthermore, in terms of manager competence, in traditional management model, the authority is assigned to the position rather than the individual, which require constant check the effectiveness of individuals in various positions to see if they have actual ability to fulfill the job. In addition, the traditional management likely pay more attention to company’s goals and objectives, emphasis increasing sales or profits to please the shareholders, which may lead the company neglect social responsibility and business sustainable development.

Modern Organization Management

In order to suit for rapid innovation and growing technology industry, the modern organization management more focus on networking and collaborating, emphasized on dynamic nature of communication and importance of integration of individual and organizational interests, which largely depends on soft skill development such as consensus building, tacit knowledge,  experience, learning, intuition, self-confidence, flexibility, prioritization of problems, working under pressure and ambiguity tolerance.

Comparing Traditional and Modern Management models

The main difference between traditional organization and modern organization in several aspects.

  • Stability: Traditional organizations usually are stable in business activities and progress, while modern organizations are more dynamic with multiple business strategy, which need multiple process to deal with constant changes.
  • Flexibility: In traditional organization, its structure is usually fixed, the strategy is planned, and the management is inflexible. While the modern organization, they need always improve the workflow, update its competitive edges, and the employees are required to promote the skills and knowledge to connect with the market and changings.
  • Teamwork: The flow of traditional business is ‘tall hierarchy’, which focus on individual responsibility and obey to his superior, while modern one is ‘flat hierarchy’, which more focus on teamwork and cooperation, its collaborative working mode would more conducive to brainstorming and help the companies improve work efficiency and make marketing strategy.
  • Stimulate morale: Modern organization management enable employees give more freedom and flexibility to fulfill their works, which are beneficial to mobilize enthusiasm of the staffs.
  • Management policy: In traditional business, the management policies are conservative, which usually follow traditional rules and regulation, make static workflow model to maintain business strategy and employee management system. While modern management model would do modification such as rescheduling, flexible entity management, dynamic business strategy.

From above analysis, we can find the context of modern management emphasis on how individual contribute to the organization and corporate performance, the chief executives pay more attention on retaining control of organization, its performance of is decided by the financial returns and share price of the organization. Moreover, the modern organization reflects the principles related to total quality management, such as learning organization, high performance organization and balanced score cards, so it could be the challenge to traditional management model.

Through the comparing, it is clear traditional management model has its limitations and may not meet the needs of global economic development, in the perspective of modern management, due to the various social, legal, political, technical and economic factors, the effective coordination and cooperation depends on different organizational relationships. With globalization, in modern organization more and more managers are working with colleagues from around the world, the context of global management involves culture environment management, organizational environment management and situational contingencies, to build global management skills, which not only require the managerial competence such as planning, organizing, coordinating, controlling, but also need develop multicultural competence to understand and work effectively across culture, therefore it is necessary to understand the context of global management and improve cross-border effectiveness to accomplish global corporate objectives.

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