The Effects Of Poor Management Strategy On Small Businesses

Anyone who wants to steer an organization safely and successfully into the future needs a strategy, and regardless of the type of organization, a clear strategy increases the likelihood of achieving success.

Management strategies include strategies for goal setting, leadership, business administration and operational activities. It exists because, in the end, organizations can only achieve top performance if they have a clear strategy in place, and the strategy is anchored throughout the company.

Examples of management strategies include;

Delegation:This basic management technique assigns responsibilities to subordinates. Responsibilities are accompanied with the appropriate level of authority to complete tasks.

Strategic planning: It is the process of planning and executing a business strategy.

Performance management: It includes critical activities such as goal setting and performance reviews that give each member of your team well defined direction and feedback.

A good number of factors tend to influence the success or failure of an organization, but poor management strategy may be one of the most significant. Lack of good management strategy can not only have long lasting effects on employee satisfaction and customer satisfaction, but also can carry financial implications that can permanently close a business door.

THE EFFECTS OF POOR MANAGEMENT STRATEGY

• LOW COMPANY MORALE

Low employee morale in your organization can be a result of poor management strategy and it could result to employees complaining to each other and completing their tasks with minimal effort or fail to finish their work assignments on time because of less of team cooperation.

• REDUCED EMPLOYEE PRODUCTIVITY

If management does not clearly define performance expectations or follow up with employees about their levels of productivity, your organization can experience reduced revenues. When employees join your company, they should receive a performance plan with the standards for their positions listed. Regular appraisals help employees to know that the organization is satisfied with their performance.

If management does not set performance standards and follow up with reviews, staff members may not feel appreciated and may continually wonder if they are meeting expected requirements and productivity. Without set standards, management will face a disciplinary challenge when poor work performance eventually does affect productivity.

Poor management strategy can lead to a decrease in profits when employee are not supervised properly and not balancing the company budget. When employees are not rewarded well, they tend to be distracted and they may spend their time looking for other employment and not focusing on reaching the goals of the organization. This causes the company to pay an industry wage for a low output.

• BUSINESS FAILURE

Poor management strategy has caused organizations to permanently close their doors. it can affect the coffers directly too if company funds are mismanaged or the budget is over–extended in comparison with revenues earned. Without sufficient business reserves, you may not be able to absorb consistent losses, and your organization can fail.

• LOSS OF TALENT

The best employees are a valuable asset and no manager wants to lose them. Unfortunately, these high-performing employees are often the quickest to go when management strategies fail to maintain them and not only will highly skilled employees be quicker to leave under poor management, but their time spent searching for other jobs will also sap their own productivity.

A lack of employee talent will put any company at a competitive disadvantage, thus reducing profits in favor of other firms.

• IGNORANCE OF CONSUMER TRENDS AND PREFERENCES

Poor management strategy can cause the customer’s preferences to be neglected and having the assumptions that you know more than the customer can. Oftentimes, companies will struggle for months to solve a problem whose solution might seem obvious to a consumer on the other end. Not taking customer opinions and preferences into account can be costly, mainly due to the lack of sales that comes with being out of touch with what people want.