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Managing in a volatile environment

It is common knowledge that currently every aspect of life, be it business, politics, society, and organisations in society, are being exposed to volatile changes and challenges. How does one manage the organisations and institutions in a volatile environment?  Drucker (2002) describe the volatile environment by referring to, amongst others, two important aspects, namely the next society and the way forward – how to manage in this volatile environment.

According to business and management analysts, facilitators, consultants and practitioners, every aspect of life, be it business, politics, society, and organisations in society, are being exposed to volatile changes and challenges – volatile in the sense that nothing is predictable or cannot be predicted in terms of the next level of changes and challenges. The question however is: What are these changes and challenges and how does one manage the organisations and institutions in a volatile environment?  There may be many suggestions to manage these institutions in a volatile environment, but it is perhaps worthwhile to consider Peter Drucker’s suggestions in his book: Managing in a modern society (2002).

The author, Peter Drucker (2002), describes managing in the next society by referring to the following changes and challenges: information society, new business opportunities, the changing world economy and the next society. He identifies the following reasons which contributed to the volatile environment in general, namely, the exploding world of the Internet, from Computer Literacy to Information Literacy, the CEO in the New Millennium and the Next Society. For the purpose of this article it may be worthwhile to revisit Drucker’s discussion on two aspects, namely: the next society and the way forward.

Drucker identified a dominant factor in the Next Society – the rapid growth in older populations and the raped shrinking of the younger generation. Another dominant factor will be a knowledge society with three main characteristics: borderlessness, upward mobility and the potential for failure as well as success. The knowledge society will be a highly competitive society. Against this background it is important to consider the role and position of top management in companies. On the one hand it seems that top management is currently operating as an extension of operation management only. On the other hand, the jobs of top management should be to balance the demands on business being made for both short-term and long term results. However, it should be determined, amongst others, what management should do to be prepared for the changes and challenges of the next generation, the next society.

Aspects of the new society in which top management is functioning is, amongst others: new demographics, a country of immigrants, and the end of the single market, The New Workforce, and Will Corporation Survive?

Going forward? Bearing the aspects mentioned above in mind, the question may be asked: What are responsibilities of top management in organisations in this volatile environment going forward? According to Drucker the future of Top Management is vested in a balance of the three dimensions of the corporation as an economic organisation, as a human organisation and as a social organisation. He describes the way ahead for top management to focus in the following areas: The future Corporation, People policies, Outside Information, Change Agents, and big ideas to be competitive and successful in the new society.

How can top managers manage the future? To be able to manage the areas mentioned above in the future, top management should rethink, revisit, re-energise and revitalise the principles of management, their management approaches, skills, roles and functions. By doing this, top management should be able to determine why they manage their organisation, how they do it and what should be the results (Sinek, 2009).  Another benefit of rethinking, revisiting, re-energising and revitalising the position and role of top management, could be that it provides opportunity to transform their organisations; to create new opportunities to adjust the way in which they manage their organisations: the changes and challenges of the volatile business environment. Furthermore, it will inspire employees to be part of the organisations and to develop amongst others, new institutions, new management theories, policies, functions, skills and roles to be able to manage the challenges in their organisations in the ever changing, volatile business environment – the next society.

In summary: Top managers should be informed regarding above-mentioned information to transform themselves from their operational role to a more exciting and creative role to restructure and revitalise their organisations; to focus on why the business exists, how do it survive and what are they doing to be able to manage the changes and challenges in the volatile environment – the next society successfully.  

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