Business Organizations and Management: The Flexible Firm and Case Study about Executive pay


PART A: Business Organizations and Management

Organizational development has been one of the most common features of businesses. This is due to the fact that the aim of business is to expand in capacity and performance and also make profits. This is in regards to the fact that a business that is not growing is exposed to the risk of failure, which will be detrimental to the owners as well as other stakeholders that depend on the business in one way or another. However, business growth has also not been an easy aspect as it requires the management of the business to accept change in the business. This is because growth is part of the change and that it is due to the adoption of certain forms of change that the growth of the company is developed. For all these aspects to develop, it demands the business to be flexible. However, flexibility is a business concept that is often misunderstood in most instances, as it is confused with the lack of clear decision-making structures. This paper discusses the meaning of flexibility in business.


In understanding the meaning and essence of flexibility, it is critical to comprehend why the business needs to be flexible. Rigidity is an aspect that has retarded the growth of most businesses. For instance, it becomes essential for the business to adjust to the modern trends in business so that it can be able to counter the competition that is advanced by their competitors. However, this becomes tough when the business is not ready to depart from their operating traditions; even after knowing that their culture cannot assist them maintain the pressure put on them by the competition in the market (Decker, 98).

The need for flexibility also manifests itself during changes in the legal-political environment. This is a situation where the regulations that are set by the state that govern the business are changed, thereby demanding the business also to adjust so that it can operate within the required legal frameworks and as per the resulting direction (Hoang, 143). A business that is not flexible cannot easily make such adjustments. This leads us to the question ion what flexibility is. From these illustrations, flexibility manifests itself as the ability of a business entity to positively respond to any variations in their environment, so that it can suit the resultant conditions and in improving its production capacity. It entails the ease with which new employees can be admitted to the company, the ease of accepting new clients and the ease with which the business can open another production center. There are bigger forms of change that normally takes place in business, where of course the demand for flexibility is large.

Critics of the concept of a flexible firm argue that the importance of them flexibility is being over-emphasized, not recognizing the position it puts the organization regarding management (Hoang, 168). In light to this, the critics imply to the fact that an entity whose organization is not high, and is subject to failure in times of calamities. The structures will not be able to deal with the concerns that can arise in such times, thereby portraying the organization as a feeble one.

 Regardless of the stance that an organization takes, the flexibility of an organization depends on whether the said organization will be willing to make or accommodate any changes in the course of its progress. This will also depend on the strategic objectives that have been laid down by the management, as the process of obtaining them may demand a state of flexibility or rigidity. It is, therefore, critical for the management to make this assessment before deciding on what a style to adopt.

 PART B: The Flexible Firm and Case Study about Executive pay


 The issues of salaries and regulations have for an as long time been a crucial topic in several industries. It has attracted public attention from the fact that reflects the competence, integrity and the rationale employed by the remuneration commissions, which are in most cases wrong as the decisions they make are normally controversial. One of the rising concerns is that over the payment of various groups, especially the top executives. The question that arises is the amounts that are supposed to be advanced to them and the criteria that are used to justify these amounts.

 In the real sense, the top executives of companies are paid high salaries because of the post they hold and not the amount of work they do. In regards to this, it has become a common phenomenon for salary advancement to be based on the class of a person, while performance is no longer a factor. This is out rightly a dangerous trend, considering the fact that the objective of the production and service sectors are to enhance productivity. This concept will, therefore, require compensation to be based on value and productivity. If this were not the case, then people will be struggling to get into positions rather than being productive in a bid to earn good salaries (Block, 213). Therefore, the rising trend where positions are being used as grounds used to determine a person’s pay is not justifiable, and efforts should be done in looking for a better approach that is attached to value. The fact that they address the issues regarding the issues of other employees should therefore not be used as grounds for an increment in their pay.

 Question 2

 The second approach that has been arguing out as the basis for determining the level of pay for executives is that of shareholding. In this approach, some shares held in the organization is factored in the salary scale. It is critical to observe that shareholding reflects a person’s contribution to an organization, and it is the effort of the individual that gives them the contribution in supporting the activities and operations of the business. This aspect suggests that it is only fair for a person to be rewarded according to the level of dedication they have put in an entity. On the same note, using shareholding as the basis for determining executive pay is more justifiable (Block, 213). However, care should be taken not to over-rely on this approach as other shareholders whose contribution is not very significant may be demoralized, thereby losing their dedication to the organization. This is bound to happen if the organization lacks clear structures that govern remuneration.

 It is clear that the issue of salary determination is rather a complicating matter in several organizations. The approaches that are used to determine the payment of members of staff lack objectivity, and, as a result, the employees and particular members of staff are not remunerated as required. It is, therefore, critical for appropriate methods to be put in place in ensuring that each and every employee in an organization gets what they deserve.