Foundations of Management Organizational Internal Communication

Question: Describe about the Foundations of Management for Organizational Internal Communication. Answer: Introduction The purpose of this paper is to emphasize the importance of information in business decision-making. In this era of competitiveness, an organization needs to strengthen their internal and external communication in order to gain superiority in market. Therefore, it is highly important to maintain information flow with the internal and external stakeholders (Shockley-Zalabak 2011). The focus of this paper is to identify three examples of business disaster due to lack of information flow. In order to maintain information flow, it is highly important to understand the need of stakeholders and the frequency with which information needs to be delivered. Inadequate information flow creates dilemma among the stakeholders of an organization. Discussion Information plays a major role in maintaining business sustainability. Inadequate information has a negative impact on the decision-making of a business. For example, Lehman Brothers, a financial service provider firm has declared bankruptcy in 2008 due to lack of information (Lehman.com 2016). Apart from that, Enron Corporation is another example of business disaster due to lack of information. The largest an energy-trading company has declared as bankrupt in 2001 (News.bbc.co.uk 2016). The third example in this case is Woolworths has recently declared a record of annual loss of AUS $2.1 billion (BBC News 2016). The above discussed cased are due to lack of information flow within the stakeholders. Case 1: Lehman Brothers Bankruptcy In this case, the company was unable to maintain the information flow among the stakeholders. The major issue of the company was inadequate information about the mortgage crisis. The company was unable to maintain organizational data, which was highly important in order to take organizational decision. During the final phase, the company has implemented cost-cutting approaches through reducing workforce (van Osch, Steinfield and Balogh 2015). However, the company could have improved communication among the employees in order to recover the critical situation. Here, management theory of Elton Mayo would be the most relevant to discuss the massive failure of the company. According to this theory, employees need motivation in order to achieve their objectives in an efficient manner (Holmberg and Hellsten 2016). On the other hand, financial motivation is not only the motivational tool, which management of an organization can implement. Instead, the company should communicate with the emp loyees in order to motivate the workforce in an efficient manner. In case of Lehman Brothers, the company was already facing difficulties due to inadequate information. On the top of it, the company had implemented cost-cutting strategies by reducing workforce. Therefore, it can be said that the approach of the company was wrong (Cooren 2016). The company would have allowed the employees to share their viewpoint and decisions in order to overcome the situation. Additionally, the company would have shared necessary information with the workforce in order to reduce dilemma among the workforce. Mayos management theory has four combinations with which management can evaluate the workforce. The first dimension consists of employees with low cohesiveness and norms, which makes the workforce ineffective to handle critical situation. The second combination is low cohesiveness and high norms. Here, some employees can perform as per the organizational requirements (Karanges et al. 2015). The third combination is high cohesiveness and low norms. Here, some employees create a negative environment, which prevents others to perform. The fourth combination is high norms and cohesiveness. Here, employees can work collaboratively in order to achieve broad organizational objectives. Lehman Brothers would have understood the nature of workforce in order to improve information flow within the organization. When it comes to the relationship between the managers, the company fails to maintain collaborative management approach. Therefore, it was difficult for the company to understand requirement of the stakeholders. Moreover, managers of an organization should have sufficient control among the workforce (Alvarez, Bauer and Eger 2015). However, in case of Lehman Brothers, managers were unable to maintain sufficient information flow for which control among the workforce was weak. Case 2: Enron Files for Bankruptcy Enron was an energy-trading company, which was formed after the merge up of two gas companies such as Internorth and Houston Natural Gas. Under leadership of the CEO Kenneth Lay, the company had achieved lot of success in the year 2000. In this fiscal year, the company was in the seventh position among 500 US companies. The company had 21000 employees in this year and the annual revenue of the company was $111 billion. However, the companys stock price had dropped from $90.75 to $0.26 (News.bbc.co.uk 2016). Here, the company has misled the employees regarding the financial stability of the company. The company had also misled the investors regarding their financial weaknesses. In case of this company, employees were the shareholders and therefore, it can be said that the company has misled both the investors and employees, which led the company towards failure (Stahl 2016). Apart from that, the company had destroyed organizational documents in order to avoid legal consequences. After reviewing the business case, it can be said that inadequate information flow was the major issue for which the company had declared as bankrupt. In this scenario, Maslow human needs theory would be the most relevant theoretical discussion. According to this theory, management should empower motivation of the workforce through five dimensions. The goal of the management should provide adequate information to the workforce in order to achieve organizational goal. During the crisis period, the company would have communicated with the workforce and investors in an appropriate manner (Botana and Neto 2015). The employees were unable to understand the rationale behind rapid change in business process. When it comes to the employees, they were unable to accept the changes in management structure. Therefore, they were unable to reach to the self-actualization stage of Maslow hierarchy of need. The company would have communicated with the employees regarding the probable issues that the com pany was facing. In this manner, the company would be able to encourage the employees to give valuable recommendation to the company. A good flow of information and communication would allow the company to work collaboratively. Therefore, it can be said that the reason behind Enrons bankruptcy was lack of information flow among the stakeholders. Case 3: Woolworths Disaster Woolworths is the biggest supermarket chain of Australian market, which recorded a loss of AU $1.2 billion. However, in previous year the annual profit of the company was AU$ 2.1 billion. The reason behind this massive fall in sales figure was organizational communication. In this industry, it is highly important to work collaboratively in order to achieve overall organizational goal. In retail industry, employees should have proper information regarding store layout and products as well. In this manner, employees will be able to provide adequate information to the consumers (Shockley-Zalabak 2011). The downfall in annual profit was caused by the low managerial control. Therefore, Fayols principles would be the most effective theoretical framework to discuss the business scenario of Woolworths. In order to handle critical situation, managers of an organization should understand skills and abilities of the employees. According to the first element of Fayols theory, managers should hav e proper understanding regarding the work division. Authority is another element of this theoretical framework through which managers should have adequate command over the workforce. In case of Woolworths, the managers were unable to control the workforce for which they were unable to perform according to the performance benchmark. According to the discipline dimension, employees need a direct supervisor in order to work according to the requirements. In this manner, the company would be able to comply with the organizational policies and procedures, which is highly important for maintaining business sustainability (Holmberg and Hellsten 2016). In order to conduct efficient organizational decision, managers should understand the ability of the workforce. The leaders are solely responsible to allocate job role to the employees. Therefore, employee information is what managers require in order to take the final decision. However, in Woolworths, the managers were unable to understand t he key characteristics of the employees. Another element of this theoretical framework is remuneration (Karanges et al. 2015). In order to empower performance quality of the workforce, organization should provide satisfactory remuneration to the workforce. Apart from delivering information to the workforce, it is highly important to focus on employee motivation. On the other hand, an organization should provide adequate information to the employee in order to influence motivation positively (Cooren 2016). Therefore, it can be said that lack of information to the employees and lack of information regarding the key characteristics about employee performance was two major reasons for sales drop of the company. Conclusion While concluding, it can be said that information flow is the key success factor for organizations. In order to maintain efficient information flow, an organization should focus on the organizational culture. In this paper, three business cases have been evaluated, where the reason behind business disaster is lack of information flow. After conducting the evaluation, it can be said that managers should communicate with the external and internal stakeholders in order to provide adequate organizational information. Reference list Alvarez, W., Bauer, J.C. and Eger, E.K., 2015. (Making a) Difference in the Organizational Communication Undergraduate Course.Management Communication Quarterly, p.0893318915571352 BBC News. 2016. 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