Freeman-Brown’s Interaction with the External Environment
Organizations regularly use and develop internal resources and are influenced by their external environment. Therefore, managers need to have continuous control over the factors of external and internal environments. The external environment of an organization “includes the factors outside its boundaries that affect its performance,” over which managers have little control (Lussier, 2019, p. 93). Thus, managers have to align the internal environment with the changes in the external environment, often changing the culture, goals, and priorities of the organization.
General Systems Theory views organizations as open systems, whereas Complexity Theory regards them as complex adaptive systems. Open system organization interacts with and is influenced by the external environment. For instance, many contemporary companies appeal to customers and suppliers for feedback and ideas for improvement and innovation, while sometimes, they have to change their policies under pressure.
In complex adaptive systems, “spontaneous order emerges out of chaos through self-organization” (Scott & Lewis, 2017, p. 2360). Complexity theory emphasizes the importance of continuous change and the need to adapt, stressing the fact that minor events might call for radical changes. Organizations of the 21st century should not only adapt to constant change but also provide favorable conditions for its members in ever-evolving situations and a highly dynamic environment. Effective organizational performance requires management to ensure conditions for learning and creativity, to support bureaucratic needs, and to make the organization ready to adapt to radical changes (Van Wart, 2017).
Freeman-Brown Private School (FBPS) failed to function effectively as an open system at the time of its closure. The open system approach assumes the successful interaction of the organization with its customers, students’ parents, in this case. However, FBPS ignored the concerns of the parents about the school’s financial state and their suggestions for improvement of the situation, i.e., raise in tuition costs. Additionally, the school’s management was not transparent, as it confused the parents about the real state of affairs and did not notify them of the campus closure in a timely manner. As a complex adaptive system, FBPS was not flexible enough to adapt to the economic crisis affecting the education sector. Whereas measures were taken to change the strategic direction of the school, the Caudill management did not debate whether the change was necessary, considering the school’s achievements and its role in the community.
The Internal Environment of FBPS
The organization’s internal environment “includes the factors that affect its performance from within its boundaries” (Lussier, 2019, p. 167). The internal factors are under the organization’s control and include mission, management, and culture, resources, structure, and systems process. Mission is the organization’s purpose or reason for existence, its distinction from competitors. Effective management and culture are based on shared values, beliefs, and assumptions, which define the behavior of the organization’s members. Resources include human, financial, physical, and informational, where human resources are the most significant, as people help an organization achieve its mission with the help of the other three resources. Structure means the division of an organization’s resources into groups or departments with specific roles, i.e., finance and production. Finally, the system process is a way to transform inputs into outputs during the production or delivery of goods and services (Lussier, 2019).
Based on the theoretical approach to internal environments and the circumstances of the given case, I might assume that the organizational culture and climate of FBPS was ineffective at the time of closure of the two campuses. Even though the school had a brilliant reputation for its highly performing environment and rigorous curriculum, the management failed to maintain a positive work climate. The organization’s culture began to decline as Caudill began closing campuses on very short notice, so the school faculty and staff had difficulty finding new jobs and, therefore, felt betrayed and abandoned.
Evaluation of Caudill’s Decision
The decision of Dr. Murphy and Caudill to close the campuses was not effective or reasonable in the particular case, as they did not take into consideration the reputation and achievements of the school, the efforts of its faculty, and its role in the community, while they also did not succeed in adapting to the economic situation. The issue was probably aggravated by the financial instability of the parent company, rather than the school itself.
The process of the closure was not going smoothly, because the parents and the faculty were shocked by the news and, especially, by the poor treatment and confusion caused by Dr. Murphy and Caudill. Moreover, the incident with the e-mail of 2013, notifying the parents of the alleged closure, resulted in the lack of trust in the school’s management. All the future attempts of the management to reclaim credibility failed because of their secret plan to close the campuses anyway.
Social Responsibility and the Impact on Stakeholders
Social responsibility is a “conscious effort to operate in a manner that creates a win-win situation for all stakeholders” (Lussier, 2019, p. 207). Today, organizations have social responsibility before their stakeholders, i.e., customers, the public, and the media, and are expected to help solve major problems of the world. In theory, the FBPS had to be socially responsible, because the stakeholders expected it to be; however, it was not. The FBPS, the parents, and the school’s faculty and staff are the stakeholders in this case study who were negatively affected by the poor management of Caudill and their lack of social responsibility. The FBPS lost its excellent reputation, its students, and its faculty and staff. The closure of the campuses meant that parents had to either find new schools for their children, which was difficult due to the late notice or to let them on a 50-miles ride twice a day to get to the remaining campus and back. The school’s faculty was presented with a similar problem, as they were not informed about the closures on time, which prevented them from finding a new teaching job.
Management Theories
According to the classical theory of Max Weber, involving a bureaucratic approach, an organization “works well, by relying on logic, order, and legitimate authority,” and “people are selected for their jobs based on their competency” (Schermerhorn, 2017, p. 25). Following this approach, the FBPS would keep their competent principal, who managed the school effectively before the reorganization and had the legitimate authority and respect of the faculty and the parents. The principal would have followed the instructions for the closure and would have notified the teachers and the parents on time, preventing the shock and confusion. The human relations approach of Elton Mayo suggested that the manager’s treatment of people affects their performance (Lussier, 2019). Thus, Dr. Murphy would have thought about the difficulties of the job search for the faculty after the closure, as well as the situation of the parents and the students. In the given circumstances, Dr. Murphy might have accepted the offer from the parents to raise the tuition fees to prevent the school from closing. Modern management approach by Henri Fayol distinguished five duties, such as foresight, organization, command, coordination, and control, and suggested them as guides for managers. If these duties were followed by Dr. Murphy, the closure of the school would not have been necessary in the first place, as she would have foreseen the negative outcomes of the closure and would have taken action to avoid it.
Goals and Recommendations for the Future Direction of the FBPS
As a short-term goal, I would suggest the improvement of organizational culture and organizational climate in the remaining Richmond and North Richmond campuses in order to improve organizational efficiency and performance. As a long-term goal, I would recommend turning the FBPS into a complex adaptive system gradually, that would react adequately to a possible future crisis and prevent any further closures.
In order to meet the aforementioned goals, the management of the FBPS should be reorganized in a way where four management functions are assigned to specific competent professionals. Firstly, the top-management of Caudill should be in charge of planning and controlling on the way to a complex adaptive system. Secondly, the FBPS managers should be responsible for organizing function, coordinating tasks, and distributing resources. Finally, the managers of each campus should take care of the leading function to inform the employees about the goals and motivate them to reach those goals.
References
Lussier, R. (2017). Management fundamentals: Concepts, applications, and skill development (8th ed). Newbury Park, CA: Sage.
Schermerhorn, J. R. (2017). Exploring management (6th ed.). New York, NY: John Wiley & Sons.
Scott, C. & Lewis, L. (Eds.). (2017). International encyclopedia of organizational communication. New York, NY: John Wiley & Sons.
Van Wart, M. (2017). Leadership in public organizations: An introduction (3rd ed.). New York, NY: Routledge.