Understanding the Business Environment

This article discusses the evolution of management and leadership in the business environment, starting from the industrial revolution. It explores the different phases of management theory and the role of psychology and sociology in neoclassical theory. The article also discusses the future of management and leadership in the dynamic market, emphasizing the need for decentralized controls and proactive approaches.

Running Head: UNDERSTANDING THE BUSINESS ENVIRONMENT
Understanding the business environment
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UNDERSTANDING THE BUSINESS ENVIRONMENT
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Introduction
Leadership and management are the two practices, which are responsible for the success of both
organizations as well as individuals. Leadership is a procedure, which help the individual to
influence other individuals in order to achieve the organization objective. It is also considered as
the direction, which leads the organization towards success by connecting strong desire with
willpower on the same platform (Lunenburg, 2011). Management is considered as the platform
on which all the available resources of the organization are brought together to give desirable
outputs. Both these concepts are the gift of the industrial revolution because it was the time
where people truly felt the power of both these concepts. Although both these concept were
present in the world before industrial revolution but were in the shaded form (Sharma and Jain,
2013). It was the industrial revolution, which brought life to both these concepts and formed it as
important part of the individual on the global level.
Evolution of management and leadership
Evolution of management came into existence right from the days when era of living in-group
started within the people. According to the old history, it has been found that the individual,
which were stronger, used to organize the people into groups on the base of their cleverness,
physical build and mental abilities. Indication related to principle management can be seen in the
ancient Greek in their public life, Institute of military forces and association of Roman Catholic
Church. Therefore, it is evident that management is present in the world from the beginning of
civilization in some type (Vittikh, 2015). Due to industrial revolution, management went to
tremendous change in their theories related to management, which has become the incredible
part of the business world. It started with the formation of formal theories of management and go
on modifying these theories. It is also recognized as the base or foundation of modern
management theories and practice. A lot has been improved in management related to their
pattern which has diluted the power of authority in the present time. In past management, focus
was mainly on resources related to the organization and the motivation level of the employee
was not so good (Christofakis, Tassopoulos, and Moukas, 2013). Now management has
continuously changed their focus on employees, which has created a work environment, which is
full of motivation.

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Evolution of management is mainly divided into four important phases like pre-scientific
management, classical theory, Neoclassical theory and then Modern theory.
Pre-scientific management period
In the middle of 18th century, industrial revolution had influenced the management pattern. A
complete change in the approach of manufacturing, instrument and equipment, and capital style
can be easily observed which is considered as the impact of this industrial revolution. It has
brought change in the working style of the employee (Prudskiy and Oshepkov, 2015). Earlier
employee had to wait for work but now workers went to job, which is considered as factory
system. Under this approach all, the resources were offered to the businessperson so that they
can bring best result out of it in the form of a specific objective. These alterations had brought
various change in the arena of management. Slowly management started transforming from
traditional style into scientific style with the help of new scientific approaches.
Classical theory
Start of scientific management occurred in late 19th century when various researchers started
focusing on the science part of the management like Taylor and Gantt. These people are also
considered as the founding father of scientific management (Witharana et al., 2012). In History,
this period was also known as the period in which entire traditional management was challenged
with the scientific approaches. In this era, management principle was refined and reformed.
Neoclassical Theory:
This theory is also the result of industrial experiment in which things associated
with management were improved, value-added and protracted. The focus of
classical theory was on job descriptions along with the organization of physical
resources (Bell et al., 2010). While neoclassical theory was focused on people and
their group relationships in the workplace. In addition to this, this theory also
explored the relation of psychology and sociology with the individual and their
behavior at the working place
The neo- classical theory pointed out the role of psychology and sociology in the
understanding of individual and group behaviour in an organization.

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Leadership is considered to be present in the world from eras of human life. It is also considered
as one of the world ancient fascinations in which competition raised due to emergence of
civilization. In addition to this, leadership is also connected with no culture restrictions. It is
believed that leadership is present in the world from almost 5000 years in the form of ancient
Egyptian symbols and have consistently introduced their presence in community which includes
priest, prophets, poets and so on (Holloway, 2012). It has been found that leadership is
continuously working on exploring modern patterns. Even the introduction of world leader in the
world is around 1300 year old and research on this leader word began in 1930. In addition to this,
from many years various form of leadership has been defined in both theories as well as in the
form of practitioners. Exploring leadership concept is not easy because every single scholar have
defined leadership in their own format. It can be said that there is no standard or model, which
can offer satisfactory leadership explanation within single quote. Still, people are confused
whether leadership is a position or behavioral pattern, mixture of things or comprises every
single relation that connects (Metcalf and Benn, 2013). It has been found that various scholars
are trying to connect leadership with the present world with the help of result-oriented patter in
this situation. After exploring various theories and models linked with the leadership, it can be
said that leadership is currently linked with a single person in terms of position and heroic leader.
It helped in exploring various leadership new theories related to leadership like transformational,
heroic, charismatic and so on. Among which transformational leadership theory is considered as
most population theory in the leadership stream (Acemoglu and Jackson, 2014). In addition to
this, continuous progress can be observed in the community with this approach in order to see
improvement in the thinking proves.
Future of management and leadership
As per the study, it has been found that the future of management and leadership has completely
changed. In this dynamic model of business environment, the old approaches of both leadership
and management has completely changed from traditional approach that is more practical. In
leadership approach now things are more dependent on a few people who are sitting on the top
position of the organizations. The present world is more complex, volatile and dynamic so it is
very difficult to use centric control approach. In addition to this leadership it totally dependent on
decentralized controls and networking through people (Krasikova, Green and LeBreton, 2013).

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Currently, time and resource management is not easy for one individual or few individuals and
are continuously in need of data, which are connected with the organization performance,
economic environment and competition in the market.
Leadership has been considered as top-down game, which is being played from nearly 100 years.
It is the industrial revolution, which has offered scale to this concept. From the study, it has been
found that managing capability of a person is up to handle 15 people. This has forced the
organization to introduce a new layer in the form of management (McCleskey, 2014). Currently,
the market is in uncertain speed and therefore it is not advisable to use old slow hierarchy.
Instead of this, there is a huge demand for quick based market decisions.
For leadership, 21th century is considered as the era of removing variations present in the
business world. Current there is no place for stable decision and therefore leadership is always in
a continuous journey in the form of change in approaches, behavior choice and guidelines. There
is very less hope associated with a stable change in the business market. In fact, leaders have to
adopt a constant change approach in order to become effective in the business world (Day and
Antonakis, 2013). Soon the era of leadership will enter into new phase in which business
planning will be replaced with intelligence actions. In this situation, the leadership has to make
use of a proactive approach in order to prepare them for multi-action forces. Currently, leaders
cannot become totally dependent on static approach and procedure. Instead of this leader must
focus on developing new abilities for learning and must push themselves to think out of the box
and generate a new landscape in the form of an agile system.
At present modern management, aspects are not more connected with the classical and human
resource quantitative methods as compared to old traditional management approaches. In
addition, modern management approach has explored that each theoretical approach has some
limitations in their implementations (Wuyts et al., 2014). Modern management provides a
valuable intuitions, which helps in resolving very complex problems, present in today's business
world. Modern management approach is also connected with the self-motivated management
aspects. Modern management helps in identifying the difficulties and variation present within the
business world with the help of scientific techniques. In addition, modern management has
focused their area of interest on people as compared to resources in terms of change in abilities
and skills, employee orientation, overtime associated with the employee. At present management

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has identified the variation present within the people and there came up with an idea that same
kind of approaches cannot be implemented on the people and therefore management is in need of
a connected approach need and demand in the business market (Birkinshaw et al., 2014). Modern
management has focused their interest on managerial strategies instead of focusing on theories
because theories provide those aspects, which are related to a stable business environment and
therefore has very less impacted on the present business world. The main theme behind the
modern management approach in 21th century is committed towards continuous improvement in
procedures and high-end quality. At present management is seen more as a learning approach
instead of a combination of complex theories and aspects.
It has been seen that management aspects have evolved in a different pattern in 21th century
along with new dimensions. In addition to this, rise of new technologies, global market
approaches and no boundary trades have displayed various challenges for the traditional
management. In addition to this, it has also offered an opportunity to these traditional
management approaches to transform themselves into number game format or pattern (Joubert et
al., 2016). Quantitative game pattern is able to connect all the aspects like culture, lifestyle and
connect them with the new trend of management. At present, management is more connected to
service-oriented as compared to product oriented. External and internal business environment has
forced management to adopt a scientific approach instead of traditional approaches.
Conclusion
Present business world is completed different from old one and the theories, which was
important part of the business at that time has become outdated at present. In past leadership and
management were more focused towards the aspects which are connected with material and cash
flow. Because of industrial revolution, administration went to marvelous change in the procedure
of several management concepts, which developed the unbelievable portion of the occupational
world. It started with the construction of approved philosophies of management and go on
altering these philosophies. Traditional theories are identified as the base or groundwork of
modern management theories and repetition. A lot has been enhanced in management relay to
their design, which has thinned the influence of expert in current time. However, at present
things have completely changed, leadership and management approach are more focused towards
the aspects, which are connected to the people. The current world is more unstable and vibrant

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thus it is very problematic to use centric control methodology. In adding to this leadership, it
completely reliant on distributed panels and interacting through people. Present management is
more interested in connecting the behavioural and classical setup of the people with the business
world.
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