Stewardship and Governance Assignment Help
- A discussion of key theories of governance that have contributed to organizational effectiveness in general (a minimum of three theories
should be discussed;
- Contributions of stewardship theory in general to effective governance in non-profit and for-profit organizations;
- A discussion of the relationship of a leader's values and beliefs to effective governance in organizations;
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Organizational Effectiveness is the target for overall organizational management in general. Organizational Effectiveness will be catalyzed by numerous organizational parameters in general. Organizational governance is the most important factor that influences the organizational effectiveness in general. Corporate governance is often considered to be facilitator for better economic performance of the organizations. Better corporate governance is the key for the better quality economic development of the organizations. Corporate Governance can be considered as a framework for conducting the business. Corporations are made up of diverse stakeholders viz., the customers, the managers, the organizational employees, the society and government as well. Each of these stakeholders do have their priorities and operational objectives. Corporate governance (Bevir, 2013) is the instrument based on which the organization will function in general and the objective of the corporate governance is to maximize the benefits of each of the stakeholders to the maximum. When there is no such governance system to control the interests of the organizational functionality, the management of the organization will take care of their own benefits and the will enable the operations that can maximize their utility functions, Corporate governance is the moderator of these aspects and the good corporate governance will work for improving the overall organizational effectiveness. A good corporate governance in general will be having two different objectives, the first objective of the corporate governance is to keep up the integrity of different stakeholders in the organization and the second is to generate the best in class value creation to all the stakeholders in the organization. The relationship between different stakeholders of the organization and their relative functionalities will dictate the operational framework of corporate governance. There are numerous theories presenting information about the corporate governance. The following part of the report is about the corporate Governance theories and the implications of the same to the organizational effectiveness and project success in general(Joplin & Muller,2016). There is emphasis on the stewardship theory and its implications to both for profit and not for profit organizational effectiveness (Donaldson, 2013).
Theories of Corporate Governance:
Some of the corporate governance theories that exclusively discuss about the organizational effectiveness are Agency theory, Stewardship theory, Resource Dependency Theory, Stakeholder theory, Transaction Cost Theory and Political theory(Ansell et al., 2016) as well,
Agency theory defines that the relationship between the principals and the agents in the framework of the organizational effective functionality. Principals of the organization are the agents that do have their own interests like shareholders of the company as well as directors of the company. They do hire the people like managers and other employees for performing the organizational functionalities. These stakeholders are agents of the principals. In such a framework of operations, the agency theory indicates that the agents need to act just as per the expectations of the principals. It is required that the agents of the organization need to function with their best interests for the sake of organization. However agency theory indicates that there is always proximity that the agents may exhibit behavior that is of self interest for them, as well there is also possibility that they may be succumbed to the opportunistic behavior and even they may fell short of the quality standards expected by the shareholders. In all such occasions Agency theory indicates the possible control of the situation. It separates the ownership as well as the control functions in the organization. Further, the theory indicates that there is need to employ a framework of rewards and punishment to let the agents work for the organizational requirements in general. The concept is equally applicable both in the case of for profit as well as not for profit organization. In for profit organizations the objectives of the shareholders will be contained in maximizing the profits of the organizations and in not for profit organizations, objectives of functionalities will include meeting the expectations of the organization(Glinkowska& Kaczmarek,2015).
Steward ship theory postulates and emphasizes the presence of the steward for enabling the organizational effectiveness in general. Steward will work for the maximization as well for the protection of the shareholders' wealth. He will enable the same by healthy organizational performance. Steward works on to satisfy and motivate the organizational success; he will do so by enabling better operations and will enable the returns to get maximized. Employees of the organization will be provided with autonomous operational capabilities, however still they will be provided with ownership of the jobs they function and will be enabled to guide them for the best possible outcomes of the organization. In stewardship governance, there is much to do with the employees of the organization, the actual role of the shareholders' will be contained in only guiding but control is limited, stewards believing in motivation and providing the necessary ownership to the stakeholders to deal with the operational functionalities. In this governance model, the shareholders will be trusting and empowering stewards to take up their functionalities(Henssen et al.,2014).
Numerous stakeholders(Micheler,2013) normally will make up the organization and the relationship between these stakeholders will dominate the way the organization does function. The theory believes that the interests of all these shareholders need to collectively work to provide direction to the organizational activities. However still no particular stakeholders interests will be considered to dominate the interests of the others and there is uniform and equal consideration to each of these stakeholders in framing the operational framework for the organization (LeBreton-Miller & Miller,2018).
Other important corporate governance theories (Maroe L Huillier, 2014) include resource dependency theory, where in the operation of the organizations will be guided by the directors who are incharges for different set of resource procurement and the intake of the same will dictate the overall functioning of the organization. Directors will be classified depending on their domain and expertise. Transaction cost theory based governance model believes that the organizational functionality depends on the organizational transactions and there are several contracts exist within the organizational framework to dictate the functionality of the same. The cost of transaction within the organization will be compared with the same while operating outside and the best of the two will be selected for organizational functionality. Political theory supports the government favoring in allocation of the power, rights and privileges of the corporate entities for the organizational benefits in accordance with the corporate favoring.
Implications of the stewardship theory to the effective governance in both for profit as well as not for profit organizations
Stewardship theory and governance model based on this theory is one of the most impactful models for the sake of organizational control and management. When compared with several other models stewardship model believes that it is possible for the organizations to expressively hold the control and can able to function well, when agencies of the organization are provided with the necessary autonomous freedom for operation and rendered with the necessary ownership for the activities they do perform. The model functions well when the stakeholders in the organization do have the necessary commitment for the organization. Further it is also necessary for the organization to have one voice and one direction This can be enabled only when the governance is through steward. Normally the CEO can function as steward in the organization. The success of the governance of this model will depend more on the functionality of CEO, When CEO of the organization do have the necessary commitment for the organization and if is dedicated entity and working for the overall benefits of the organization, then it is more likely that the organization can function well with uniform direction and the governance of such organizations can perform the best outcomes.
The success of the stewardship theory can be achieved only when the right person is there in the board as steward. The skills as well as the attitude and personality of the steward will dictate the overall success of the organization. It is very much believed that the people of the organizations do have intrinsic motivation and it is very likely for them to work for the betterment of the organizational objectives with collective mindedness. The theory believes that the people of the organization by default possess organization oriented mindfulness rather than individualistic attitudes and by right application of the intrinsic motivation they can be enabled to perform the best for the organizational requirements.
Stewardship theory is equally applicable and versatile in meeting the objectives of both for profit as well as not for profit organizations equally. In profit oriented organization the implications to the governance include selection of the right board members and the management. The board members need to possess the necessary capabilities to provide the direction to the organization and at the same time; they are expected to provide the necessary control of the governance implications set for the organization. The objectives of the entire set up will be obviously underlying in imparting the best profits for the organization. The other implications of this model to the not for profit organization will be contained in providing with conformance with the policy and working for execution of the policy. In not for profit organizations the stewardship theory works in this direction to enable the policy objectives to get fulfilled with.
- Broadly speaking that there are several advantage of stewardship model which are unique for this type of governance model and will provide advantages to the operation of the same. Firstly, the key advantage of the model lies in its capacity to harmonize the relations between the owners and the managers. Since the steward is a particular entity possessing the required potency and capabilities to take up the operations of the organization, it is more likely that he can provide the necessary channeling of the vision and the focus of the owners to the executional partners like the managers(Michler,2013).
- The model has unique attribute that is not present in any other model, that the CEO or the steward is unchallenged and expected to have unique potential to take up the objectives of the organization. CEO is the best in class performer and will provide the single handed direction to the organizations to perform better. Also CEO will work for the unity of command and unison in command control of the operations of the organization. Hence Steward has this advantageous and if there is no such steward available, then the governance model can be disaster too.
- The inherent drawbacks of the model are contained in over simplifying the stewardship model. There are numerous practical difficulties in the model; however the model assumes that all the stewards are simpler and stronger. Reality can be different, it is possible that the organizations can have numerous practical problems and they demand diverse skills and expertise which single person as steward may not able to monitor, however still the stewardship assumes the responsibilities as simplified and they are unrealistic too(Muller,2017).
- The theory of the stewardship has much to do with the ego levels of the senior staff; they do reinforce the egos by enabling them as facilitators of the change and positive policy enablers too. However still stewardship model may get biased by delegating the ownership to the respective senior leaders and flexibility and change orientation, dynamism may be sometimes gets hindered in this governance model of operations.
- Not only the CEO as steward, the model by delegating the freedom and autonomy to each of the managers in the organization with potential to act by their own, assumed that they do function as stewards by their own. In this connection, The effectiveness of the governance and the subsequent effectiveness will depend on the efficiency of the other players too. When they have the necessary capacity to function effectively, the model can be successful; otherwise it cannot be successful and will not able to meet its ideal objectives (Nwanji & Howell,2007).
- Principal's assumption and readiness to take up the risk in the organization is very high. At the same time there is much to do with the organization's discretion in the model operations too. It is more an authority-discretion organization rather than self serving model.
- Some of the typical propositions that are needed for steward in functioning in a stewardship model include, the need for higher order needs, intrinsic motivation, capacity to use personal power for the organizational needs, involvement oriented situation related people can become better stewards than the others. People in collectivist culture will become better stewards than others. Low power distance culture augments the applicability of the model also mutual agency relationship will work for improving the quality of performance of the organization. These propositions are not needed in other governance models like Agency or stakeholders theory(Nwanji& Howell,2007).
Leadership values and believes and implications of the same to the Governance models
Leadership values and believes will decide the direction and the profile of governance in the organization. At the outset the first impact of the belief of the leader is contained in selection of the right governance model. When the leader selects the right model for operations, it is more likely that the organization effectiveness will be safe guarded. When the leader is incompetent and could not able to select the right model for its functionality, then it is a disaster(Pande& Ansari,2014). The next important aspect of the beliefs and values is about the position of the leader. If the leader is a owner of the organization and is not direct executioner of the functions, then his involvement is limited to providing the strategic vision for the organization. However if the leader is a steward, there will be more emphasis naturally on materializing and harmonizing the relationship between the owners and the agents of the game. In any case, the organizational vision and mission need to align with the vision and mission of the leader for the organization to perform effectively. When the organization believes in the leadership vision and values, then only it is possible to control effectively the organization functionality and it will be possible to lead towards the ultimate objectives(Schillemans & Bjurstorm, 2019). At the same time, if the organization do not believe in the values of the leader or alternatively if the environment does not align with the values of the leaders, it is quite difficult to function the same. If the leader believes in the autocratic style of functioning and if is working in the entrepreneurial organizational domain, then it leads to a disaster. Hence alignment of the values and beliefs with the organizational objectives, culture and environment is very much required for the sustenance of the organizations in general. In any case, proactive flexible and forward looking attitude of the leader is very much needed in the today's organizational environment. Only with such attitude it will be possible to sustain the leadership and will be possible to attain the ultimate objectives of the organization. In any case, leadership of the organization has much to do with materialization of the ultimate objectives of the organization. In this regard a right leader with right attitude, skills and capabilities needed to take forward the organization towards its ultimate goals(Tricker & Tricker,2015). The right governance can be achieved when leader accepts the governance model and its philosophy. A leader not only just accepts the philosophy and agrees with the concept, but able to facilitate the same. Hence he should have the capabilities to materialize the said governance models in the organization. A leader matching the requirements of the particular governance model only can able to contribute for the organizational effectiveness. Also if the beliefs of the leader facilitates even they can employ a mix of variety of governance structures to formulate an effective multi-level governance structures in the organizations (Biesenthal& Wilden, 2014)
Broadly speaking effectiveness of the organization in realizing the objectives and the goals can be contained by executing effective governance. Only when right fit governance is implemented in the organization, it will be possible to realize the objectives and the aims of the organization. A leader has much to do in this regard, selection of the right governance model and weaving the same for the organizational effectiveness will decide the final outcomes for the organization. Also the organizational leadership value system and believes will dictate the selection of the right model for the organization. A leader with realistic insights and right fit attitude and skills only can facilitate these evolutions and can contribute to the organizational effectiveness in totality.
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