The purpose of this essay is to gain an insight on following terms; bureaucracy and sustainable workforce and their importance in today’s business environment. Also, we get to evaluate the effectiveness of bureaucracy and an alternative form of management approach (start-up approach) in creating a sustainable workforce while providing real-life business examples. Bureaucracy and sustainable workplace are inevitable since today’s employees are not illiterate but skilled. Competitive advantage does not come from sheer size but stems from innovation, communication is not tortuous but instantaneous, and the pace of change is not glacial but hypersonic and to succeed in business various start-ups have to be launched and employees given the freedom to chase their dreams.
The author of Peter Principle Laurence J. Peter once said that bureaucracy defends the status quo before the quo loses its status. Bureaucracy can be termed as a necessary outcome of complex businesses operations in complicated regulatory and international environments and is a tax on human success. Bureaucracy is insular meaning, it makes distinctions between outsiders and insiders and is characterised by a reluctance to include external shareholders for various missions such as the critical tasks. Bureaucracy hinders risk-taking, inhibits creativity and weakens initiatives.
According to Tunwall, & Stutzman, (2017), sustainable workforce refers to a work environment that supports and cares for the employees’ welfare and their energies, skills and talents are not overly deployed to meet employers’ economic success. Additionally, they are not faced with relentless and excessive workload all year round, and during a crisis, employees are allowed to recover and look for resources needed to serve in future.
In a study done by Soto-Acosta, Cismaru, Vătămănescu, & Ciochină (2016) stated that, for the business environment to flourish, there should be a bureaucracy system and sustainable workforce and this enables employees to perform in requisite work demands. Additionally, it leads to increased cohesion among employees, improved commitment towards a common objective enhances resilience, and promotes knowledge sharing.
Increasing the employees’ authority and their upside ensures their additional role is not seen as a burden. Additionally, granting employees stock without increasing their power makes them feel inferior. At Haier, employees are expected to self-manage themselves and their freedoms enshrined in the following rights; strategy, people and distribution. These rights bound every employee with a sense of accountability. Compensation is directly proportional to the performance of the business and is tied to the following thresholds; baseline, where increased quarterly earnings beyond the base target, leads to employees receiving a bonus equivalent to that amount. Value adjusted system where in case the employee gets a midpoint objective between the principal goals and quarterly baseline, the employees’ bonus is doubled and value-added system annual target where in case the employees beat the set annual target, there are eligible for sharing profits. This combination of dividends, profit sharing and bonuses gives employees a chance to receive huge payouts (Smyth, Pit & Hansen, 2018).
Barriers of bureaucracy and sustainable workforce at Haier include; employees have zero tolerance to incompetent officials, and if an employee fails to meet his or her target for a couple of months in a row, change of leadership is automatically done. If the employees are meeting the baseline targets but not the value adjusted system targets, the existing leader is ruled out, and new leaders are chosen (Dibie, 2018). However, poor performing leaders face a hostile takeover. Performance information of each employee is transparent; therefore it is easy to spot takeover chances.
For centuries, most firms have optimised their operations and recently digitised their operating models (Oprea, 2018). Vital as it is, Haier has humanised its management model. This was done to encourage employees to be businessmen and realise their potential. Haier’s business model is empowering and energising and frees human beings from the constraints of bureaucracy. Bureaucracies are usually conservative, and Haier by disparity has turned the entire firm into a start-up factory. There are three procedures taken during the business launch at Haier. The first is, an internal businessman posts a suggestion online and invites people to like it. Secondly, the online leader invites outsiders and insiders to explore the opportunity. Thirdly, the would-be businessmen pitch these ideas at roadshows which connect online leaders to the local entrepreneurs and employees of the investment platform.
In a start-up, employees tend to think they are owners of the firm since they have equity in the business as some would have risked their capital in the venture. Every employee in Haier is a separate legal body and are tasked with judging the merits of the new ideas pitched, and this often requires funding from the firm’s venture capital shareholders before agreeing to donate internal resources. Start-up employees have a degree of independence and cannot blame anyone in case things go wrong. It is this combination of accountability and freedom that give start-ups their competitive advantage (Oprea, 2018).
A study of 780 U.S. firms published by the National Bureau of Economic Research examined the relationship between freedom, voluntary bonus rates and knowledge sharing among employees and concluded that they had no significant effect on turnover rates. Including employees in the distribution, development and administrative unit using the start-up model, Haier gains leverage in increased bargaining power and avoids the risks of bureaucratic constraints. Some look at the startup model as an antidote; however, firms such as Didi Chixing, Airbnb, Uber and Farfetch receive a huge press following while other companies account for a fraction of their economies. Therefore, it is imperative to conclude that startups are critical to any organisational success in terms of improving the sustainable workforce.
In conclusion , Investing in a sustainable workforce governed with bureaucratic restrictions should be considered a venture that will save a firm in the future in terms of natural resources and increased employee productivity hence ensuring business continuity. Bureaucracy increases scale efficiency with clear lines of power through standardised units and specialised tasks; however, it varies across cultures industries and political systems. Bureaucracy is evident in large firms which dominate the economy. Viewing bureaucracy and sustainable workforce as a competitive liability is a valuable path since employees can directly be accountable to consumers through the zero-distance policy and can be viewed as an open system of users and innovators, can be energetic businessmen and shareholders replaced in the formal hierarchy. Turning employees into owners through the start-up model ensures employees have the autonomy and accountability in the business and this can lead to a massive turnover rate of sales and increase the business leverage in terms of bargaining power and gaining competitive advantage.
References
- Dibie, R. (2018). Public Management and Sustainable Development in Nigeria: Military–Bureaucracy Relationship. Routledge.
- Oprea, R. A. (2018). A discontinuous model simulation for train start-up dynamics. Australian Journal of Mechanical Engineering, 16(2), 139-146.
- Smyth, J., Pit, S. W., & Hansen, V. (2018). Can the work ability model provide a useful explanatory framework to understand sustainable employability amongst general practitioners: a qualitative study. Human resources for health, 16(1), 32.
- Soto-Acosta, P., Cismaru, D. M., Vătămănescu, E. M., & Ciochină, R. (2016). Sustainable entrepreneurship in SMEs: A business performance perspective. Sustainability, 8(4), 342.
- Tunwall, T. K., & Stutzman, M. L. (2017). Sustainability of the workforce human resource influence. GSTF Journal of Law and Social Sciences (JLSS), 1(1).