Market-Based Management Principles
Vision
The foremost principle of market-based management is vision. The vision helps determine strategies the organization implements in creating long-term value in market and customer management. The success of a company in the market lies in institutionalization of strategies that create value (Block, Wood, & Barnett II 2002).
Vision, provides guidelines for the company on how to create sustained value and adaptability in the dynamic market. Vision outlines strategies a company should take to improve market and product development. Critical analysis of the vision by the organization provides ways the company can use to meet and carry out activities efficiently and effectively.
Individual talents and skills can be harnessed to make the organization a market leader in situations whereby the vision is a motivator to the employees. The institution of visions that are morally accepted by the organization can increase employees' loyalty and productivity. Having clear visions necessitates employees to ensure they are well placed in positions that will utilize their skills and talents to increase the profitability and productivity of the organization. In addition, focusing on the accomplishment of the vision leads to easier realization of the vision.
Knowledge Process
A firm is likely to succeed by having useful knowledge of the market. Knowledge process entails the acquisition, creation and application of relevant employee skills and abilities to measure employee and organizational profitability. The use of market knowledge while accepting challenges increases the knowledge base of a firm in the market (Minkler, 1993). Basic markets mechanisms such as prices, profits and loses are efficient in creating useful knowledge of the market. Additionally, estimation of business productivity and enhancing organizational knowledge helps in increasing organizational market knowledge.
Furthermore, property rights are necessary parts in the creation of organizational market knowledge. Without clear and well defined property rights, it is a herculean task to access reliable information regarding market prices and conditions. For the business to have greater success in the market, they require extensive target market knowledge and strategies to use in capturing the market. Besides, customer reactions and profit mechanisms provide feedbacks that enable the organizations to analyze and improve their knowledge about the market performance. Having the right knowledge base about the market ensures prosperity of the organization in any competitive market.
Decision Rights
Giving first priority to individuals with the required professionalism and authority helps the organization make right decisions regarding organization requirements and needs. This ensures accountability of individuals in cases where the decisions made have negative impacts on the organization. Encouraging employees to take challenging tests involving organizational decision making helps them make good decisions.
Sautet in his book, An Entrepreneurial Theory of the Firm ascertains that investing in trainings regarding decision-making help employees make good decisions. Good decision-making facilitates the growth of the organization. In addition, organizations promoting the institution of fair rules regarding decision-making allow employees to air their plights leading to right decision making by the organization (Sautet 2000).
Advocating for equality in organizational decision-making may bring about good decision making among the company's employees. Having qualified individuals based on their interests, values, and capabilities may additionally. In particular, promoting fiscal responsibility of workers and removing communication barriers cultivates a culture of good decision making within the organization. Subsequently, conducting research and policy analysis, offers education to employees on how to make good decisions.
Incentives
Rewarding employees in accordance to their productivity and value they bring to the company is the other principle of market-based management. To increase employees' loyalty to the organization and general market society, the organizations is required to give out incentives to them (Taylor, 2000). Issuing incentives makes the employees feel valued by the organization which could increase workers morale and productivity. Incentives are great motivation to the workers and helps employees realize their full potentials and get work satisfaction. Providing financial measures such as variable charging, tax reductions, and other benefits to employees can lead to greater impacts in workers' productivity to the organization. The likely impact of giving workers rewards and incentives for exemplary performance is likely to increase workers contentment with their duties leading to reduced work challenges.
Virtue and Talents
Virtues are set standards for the estimation of polices, work conduct, norms of behavior and building values that guide individual worker action. These set standards help the organization employ individuals with the required values, talents and skills. Workers integrity by conducting all business affairs lawfully and with honesty ensures compliance with the set code of conduct. The compliance with the set code of conducts...
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