Market Based Management
Market Based Management
Koch has stated, “A business firm is not just a piece of society, but a mini-society in its own rights.” I think that this quote summaries the idea of Market-Based Management which is each market is different; therefore, it is necessary to study it and apply the management system that fits best. The concept of Market-Based Management is based on the principle of the free market economy, and applying this system within an organization. According to my understanding, MBM has five key basic components management model that can be made which are Vision, Virtue and Talent, Knowledge Processes, Decision Rights, and Incentives. these principles combine to create a dynamic and positive culture when they are use effectively.
Vision – shaping and creating the long term value or goal for the company which will allow the management to divide labor works and maximize long term profitability. The long term goal is normally the Vision of the company, and should be, to create the greatest value in the shortest time, and maintaining that value by using comparative which lead to competitive advantage, and is the key to keep ahead of the competition and ensure continuous growth and realizing the increased value. Virtue and Talent – hire the right personnel with the right virtues and skills that share the same culture or values of the company which could lead to individual success record. The management needs to make sure that the right people are chosen for the job at hand because in the final analysis, the value to the company should be the ultimate focus of concern. Choosing the right person would ensure the best Planning, Organizing, Leading and Controlling, which are the Four Tasks of Management. Knowledge Processes – create an environment where knowledge sharing is an imperative to team members, and track profitability according to the market in place. The management needs to look at first getting the most knowledgeable people, and if necessary, provide
Koch has stated, “A business firm is not just a piece of society, but a mini-society in its own rights.” I think that this quote summaries the idea of Market-Based Management which is each market is different; therefore, it is necessary to study it and apply the management system that fits best. The concept of Market-Based Management is based on the principle of the free market economy, and applying this system within an organization. According to my understanding, MBM has five key basic components management model that can be made which are Vision, Virtue and Talent, Knowledge Processes, Decision Rights, and Incentives. these principles combine to create a dynamic and positive culture when they are use effectively.
Vision – shaping and creating the long term value or goal for the company which will allow the management to divide labor works and maximize long term profitability. The long term goal is normally the Vision of the company, and should be, to create the greatest value in the shortest time, and maintaining that value by using comparative which lead to competitive advantage, and is the key to keep ahead of the competition and ensure continuous growth and realizing the increased value. Virtue and Talent – hire the right personnel with the right virtues and skills that share the same culture or values of the company which could lead to individual success record. The management needs to make sure that the right people are chosen for the job at hand because in the final analysis, the value to the company should be the ultimate focus of concern. Choosing the right person would ensure the best Planning, Organizing, Leading and Controlling, which are the Four Tasks of Management. Knowledge Processes – create an environment where knowledge sharing is an imperative to team members, and track profitability according to the market in place. The management needs to look at first getting the most knowledgeable people, and if necessary, provide