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Management Theories Essay

1247 words - 5 pages

Management Theories: Application of Theories
Patti Barnett

The purpose of this essay is to write a memo to the manager discussing the application of management theories pertaining to moving toward an employee empowered culture and the theory of penetration pricing. It will also discuss any given issues that resulted in such actions as well as any alternative theory or theories that could have been applied.

Management Theories: Application of Theories
Several companies implement theories of how to make their business run better. Two of those theories include moving toward an employee empowered culture and penetration pricing. Were there any issues that led to these ...view middle of the document...

However, it only concerns the task at hand. In the corporate world, this theory “reflects the values, vision, and leadership style of a given company” (Simon, 2012). It simply creates employee satisfaction and boosts company morale, which results in high productivity and more profits.
An example of an empowered employee (or employees) comes from a company called Nucor Corporation. Nucor, which is based in North Carolina, is a small steel mill that takes the steel from cars, dishwashers, etc., and recycles it to make new steel. In 2011, their plant in Hickman, Arkansas lost power, and what management expected to take at least a week to repair, only took three days (Clark, 2011). This was because three of their own electricians from different plants, a few hours after hearing the news, took on a monstrous task without even being asked. They drove from their plants in Alabama and North Carolina, to the plant in Hickman to repair the damages. It only took them three days since they each worked twenty hour shifts until it was done (Clark, 2011). This action was taken by empowered employees, because Nucor had created a culture with its employees to “adopt a mindset of owner-operators” (Clark, 2011).
As a senior manager of this company, I might have taken it upon myself to travel to Arkansas to survey the damages myself, perhaps with other upper management. This could have in turn, prolonged repairs and cost the company more money.
Another example comes from a small company called Indus League Clothing Limited who rents retail space in malls (Rao, 2009). They too, have adopted the theory of an employee empowered culture. Although no specifics were mentioned as to what led the company to this mindset, the assistant retail manager is very appreciative of the upper management to have enough confidence in him to allow him to make self-governing decisions that would be in the best interest of the business and those employees who work for him. Such empowerment created a pleasant work environment, which promoted better customer service.

Penetration Pricing
A second management theory is called penetration pricing. According to Amy Handlin (2012), this theory involves “setting the price of a product or service as low as possible to facilitate rapid sales”. She also states that it most likely succeeds in large markets versus the smaller ones, when a new product is introduced and is chosen to attain the highest market share.
My belief is that penetration pricing arose when businesses were losing money to their competitors and used it to gain revenue, even though the same service or product was offered. But does penetration pricing really work? In order to answer that question, we need to take a good look at what businesses actually sell: image, innovation, and time savings ("Penetration", 2011).
If image is your primary decision maker, then perhaps you...

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