Management Challenges in the 21st Century


The traditional management education and training relies heavily on left-brain thinking, deductive reasoning and analytical thinking. The managers of the future require a different set of skills based on the functioning of the right-brain like holistic or systems thinking, intuitive problem-solving and value-driven decision-making. While state parastatals could benefit from a number of these corporate lessons, readers should be clear about the many ways in which government agencies differ from corporate entities. In the corporate world, a single metric – profits – surpasses all others in importance.

By contrast, a government organization must achieve success across a wide spectrum of activities.

There is no equivalent to the simplifying discipline of a corporate balance sheet. Corporations must adapt or risk bankruptcy, and publicly held companies are accountable to shareholders who scrutinize their performance and profitability each quarter. These factors present strong incentives for corporations to invest in and drive change. The government organisations, in contrast, adapts only because of the will of its leaders and staff.

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If it dawdles, it does not come under threat of bankruptcy or risk the ire of shareholders. However, the consequences of strategic failure at the parastatals can be far greater than that of a corporation.

The Evolutionary Context

The best minds in management were thoughtful and precise in identifying the management challenges of the 21st century. However there is nothing entirely new in the list of challenges. Most of them are part of the new and emerging paradigm in management, discussed and debated in the growing management literature on this subject.

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However what is lacking in the discussion is a clear and precise understanding of the change or evolutionary transition which humanity as a whole is going through. In other words, first we have to understand and identify clearly the evolutionary challenges facing future humanity as a whole and based on this understanding, we have to figure out what will be its implications for business and management. As the intuitive and evolutionary thinkers like Sri Aurobindo and Teil-hard-de-Chardin have pointed out, the main evolutionary challenge facing humanity is the growth of consciousness from the rational, divisive and analytical consciousness of the mind towards the unitive, holistic and intuitive consciousness of the Sprit.

The ultimate goal of this evolution is towards the creation or establishment of a Global Consciousness, wherein humanity discovers its inner spiritual unity. Sri Aurobindo called this higher consciousness as the “Gnostic” or “supramental” consciousness and Teil-hard-de-Chardin named it as the “Omega Point” beyond the rational mind. This is the deeper and inner significance of the present trends towards globalisation, which is moving towards, not exactly a global society or a global government, but a global consciousness. The path to this global consciousness is through a system of values, education and culture which leads to a moral, psychological and spiritual development of the individual and collectivity. When this global consciousness expresses itself in the outer life it will lead to a global civilization, governed and united by the principle of a free, rich, harmonious and mutually complementing diversity.

This is the inner imperative of the future evolution of mankind. In the external world, the main thrust of the evolutionary drive of Nature seems to be towards greater distributive justice which means greater diffusion of knowledge, power, wealth and culture into the masses, especially those who are suppressed or exploited in the previous cycles of evolution. This evolutionary thrust is expressing itself in the emerging society through the following movements: 1. Increasing empowerment and participation of woman, with more and more woman entering into the professional world and raising to leadership position. 2. Greater empowerment and participation of those workers in the lower levels of the corporate hierarchy. 3. Thrust towards inclusive growth, economic upliftment of the poorer section of the society, people participation in development, and a greater focus on minorities.

The Integral View

These are the inner and outer evolutionary imperatives of the future. Those individuals or groups organisations, communities or nations who are able to successfully achieve or implement this evolutionary transition will gain evolutionary advantage over others and will be the leaders of the future. What are the implications of this future evolutionary imperative for business and management? First, in the domain of vision, mission and values organizations have to discover a higher purpose which can inspire and trigger this higher evolution within the organisation. Second, in the domain of Human Resources Development, there must be a greater attention to the development of the moral, aesthetic, intuitive and spiritual faculties and potentialities of employees which will lead to their higher evolution.

Third, in the domain of Organisational Development, creating a corporate environment and culture which felicitates this higher evolution among employees and also helps them to express this inner and higher growth in the outer life. In this task, building consciously an organizational community governed by the values of French revolution: liberty, equality and fraternity, will be a great help. This means reinventing the values of democracy at the organizational level. In this task, the corporate world can perhaps do a better job than the political world because of two reasons: first, in our modern age the world of business is much more dynamic, efficient and innovative, with a much greater capacity for organisation and execution than the world of politics; second it is easier to implement or organise the triple values in the smaller space of an organization than on the larger scale in a nation.

However, the key to a practical synthesis of the triple value lies in the third, Fraternity or more specifically an inner fraternity in the mind, heart and soul of people or in other words, unity of consciousness. Fourth, in the domain of corporate social responsibility, there must be a greater integration of the corporation with the community, which means a more creative deployment of the expertise and resources of the corporation for the development of the surrounding community as a whole. Fifth, in the domain of sustainability a more integral attunement of the corporate life with the laws and way of Nature in the physical as well as psychological and spiritual dimensions

Challenges of Management in the 21st Century

Corporate executives emphasize the need for a clear, shared vision; a strong organizational culture; ways of doing business that leverage the size and reach of the company; and an institutionalized process that ensures the alignment of the corporation’s vision and its widely dispersed activities. Hierarchical, highly centralized, command-and control models no longer work for most global organizations. Such models reduce speed and agility, hinder innovation and prevent valuable collaboration. Yet, many companies take advantage of their large size, scope and reach.

i) Enterprise Mobility

Since the inception of Apple’s App Store in 2008, the concept of enterprise mobility has evolved from a nice-to-have novelty into an essential part of doing business. Increasingly, organizations in a broad cross section of markets – financial services, pharmaceuticals and life sciences, consumer products, education, automotive, and manufacturing among them – are seeing the value of mobilizing enterprise information and making it available to customers, employees, and partners. These organizations are making smart phones and tablet devices an important part of their sales, marketing, operations, and human resource strategies by developing customer – facing mobile applications that drive revenue growth, build customer loyalty, and strengthen brand awareness. They’re also creating internally focused applications that aim to improve employee and partner efficiency, communication, and productivity.

These initiatives have taken many different forms and met with varying degrees of success, but they illustrate that organizations are taking enterprise mobility seriously. With application downloads expected to top 44 billion by 20161, they’re wise to do so. Enterprises are also leveraging mobility to improve internal operations, strengthen partner ties, and boost employee productivity. Driven by explosive growth in smart phone and tablet sales, enterprise mobility has become an essential part of business. Organizations across industries are developing internal- and external-facing mobile applications that drive revenue, build brand loyalty, strengthen communication with partners, and enhance employee productivity. Companies that have aggressively embraced enterprise mobility are seeing an impressive return on their investment. The rapid and ongoing rollout of new smart phone and tablet devices is driving new customers into the market, but also forces developers to build mobile applications for multiple platforms and device types. Keeping pace in this market requires an agile, flexible, and iterative approach to application development.

In-house development is a complex, expensive, and time consuming process that requires coding in multiple languages, extensive testing on different platforms, and dedicated resources for ongoing updates and maintenance. Mobile web isn’t a viable option for addressing these challenges: security is weak, user interface suboptimal, and functionality limited.

ii) Individual and Leadership Challenges

Globalisation, the war for talent, digital communications, societal changes, the changing shape of organisations, and the aspirations of the next generation are all challenging 21st Century leaders in new ways. The quest for more sustainable and ethical organisations prompted by the business scandals of the nineties and the growing realisation that we cannot continue to raid our world’s natural resources without considering its future sustainability are also putting extraordinary pressures on today’s leaders to perform against a range of criteria which go far beyond those of successful business performance. Measuring leadership success must increasingly now include questions of the longer term common good: socially, ethically and globally, at the same time as responding to the pace of change in a world where today’s ideas might already be doomed to obsolescence.

It is no longer enough to stimulate followers through heroic gestures and charisma alone. 21st Century visionary leaders focus on growing deep organisational engagement amongst their followers, and on generating a shared and common understanding of a dynamic and evolving vision for the future. Visioning today is no longer the static or solitary activity it once was. No longer is it the sole prerogative of the top team. Looking beyond the organisation’s immediate environment into the world to help people to imagine the future, and then converting this image into an exciting destination means developing a climate in which ideas are shared and co-created. It means using all available antennae and tapping into all available networks to continually create new knowledge inside the organisation. This knowledge includes understanding trends and shifts in society, technology, markets and people, looking for tipping points and spotting them early, assessing the speed and destination of these changes, and then of course interpreting these to determine how they will affect the organisation and its purpose over time. Visioning alone though, is not enough.

Authenticity is another concept long debated by philosophers and psychologists amongst others, but one that is relatively new to the mainstream study of leadership, although interest in it is growing fast. To be truly authentic, however, also requires a deep understanding how our identity has been shaped by the societal norms around us, a rejection of the pressures to behave as others want us to, and a refusal to display feelings we do not really feel. Fortunately our appetite for filling our workplaces with cultish rituals to be followed blindly and evangelistically is now virtually.

Achieving authenticity in a world where our identities are created for us by a mass market media and the immediacy of the internet is not easy. It requires courage, self knowledge, compassion and strong personal conviction. Those who work towards this goal, however, confirm that they find themselves happier in their working relationships, more successful as leaders, and more able to engage and inspire their followers. For the 21st Century leader this is felt to be one of the most challenging but also one of the most important qualities a leader can aspire to.

Perhaps one of the most marked shifts in thinking about leadership for the 21st Century is the renewed emphasis we are now placing on mentoring and team development, as well as on growing the next generation of leaders. Many 21st Century leaders aim to try to spend more time with their teams to understand their aspirations and to identify the areas in which they need intervention, mentoring and direction. Others see their leadership roles as being about unlocking the potential of their followers, and helping them deliver without micromanaging.

iii) Change Management

Organizational change normally involves some threat, real or perceived, of personal loss for those involved. This threat may vary from job security to simply the disruption of an established routine. Furthermore, there may be tradeoffs between the long and short run. As an individual, I may clearly perceive that a particular proposed change is, in the long run, in my own best interests, and I may be very interested in seeing it happen, yet I may have short-run concerns that lead me to oppose particular aspects of the change or even the entire change project. The rate of change is escalating in virtually all organizations. The pressure is intense on anybody connected with the business world to focus time and attention on understanding the forces driving the changing environment and develop or implement the information systems needed to support the altered environment. One of the most difficult problems organizations face is dealing with change. In today’s rapidly changing, highly competitive environment, the ability to change rapidly, efficiently, and almost continually will distinguish the winners from the losers.

Many organizations will disappear because they find themselves unable to adapt. Furthermore, many of the pressures for change in organizations are independent of technologic change. This means that informaticians working for change are doing so in organizations which are already highly stressed by other pressures. Major organizational changes typically involve many different types and levels of personal loss for the people in the organization. For example, change always requires the effort to learn the new, which is a loss in terms of time and energy that could have been used elsewhere. Although some may welcome the learning opportunity, many of us don’t want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful advantages to the proposed change.

Upgrading to new software is a common example, in which the future benefits may not be seen as sufficient to outweigh the short-term investment required to learn the new programs. Second, people want to feel good about themselves. Ideally, people are able to take pride in their work, feel responsible for a job well done, feel they are part of a high-quality enterprise, and feel that their time has some significance. In many work situations, the work itself and the organizational culture make it difficult for people to feel good about themselves. In these poorer situations, people usually invent strategies to help them feel better about themselves, and these strategies involve getting some sense of control, belongingness, and significance out of their work. Sometimes this involves opposition to management, on the assumption that management is always up to no good. More commonly, the worker-management relationships are not completely alienated. Still, the workers’ strategies for achieving “good” feelings are unknown to or quite misunderstood by management.

Therefore, change initiatives, unknowingly and unintentionally, threaten to cause the workers serious personal loss. Not surprisingly, the workers resist and do all they can to sabotage such change initiatives. Third, change initiatives often require large losses for middle managers. Generally, people perceive that information systems increase the ability of top executives to know more about what is going on and to exert more direct control. This means a serious loss of personal and organizational significance for the middle manager. Sometimes middle managers fight this loss. Any significant organizational change involves changing habits, which is, changing the way we actually do our work. This usually involves changes in the way we interact, both with people and our tools.

New systems require us to learn a new set of behaviours. Resistance to change is an ongoing problem. At both the individual and the organizational levels, resistance to change impairs concerted efforts to improve performance. Many corporate change efforts have been initiated at tremendous cost only to be halted by resistance among the organization’s employees. Organizations as a whole also manifest behaviour similar to that of individuals when faced with the need to change. The relationship between individual and organizational resistance to change is important. An organization is a complex system of relationships between people, leaders, technologies, and work processes.

From this interaction emerge organizational behaviour, culture, and performance. These emergent properties and behaviours are tightly linked in two directions to the lower-level interactions. Organizational resistance to change is an emergent property, and individual resistance to change can give rise to organizational resistance. A self-reinforcing loop of increasing resistance can develop as individuals create a environment in which resistance to change is the norm. That environment in turn encourages increased resistance to change among individual employees. The self-reinforcing nature of this loop can be tremendously powerful, defeating repeated attempts to break out of it.

iv) Manpower Management

Parallel with the changes in the global arena, the qualifications of the workforce has been changed. The changes of the workforce required a shift from traditional personnel management to human resource management. With the evolution of HRM, this field has gained a more strategic perspective in practice. Human resources have started to be seen as an inimitable and most valuable factor for organizations to gain competitive advantage. With this perspective, HRM departments has gained more importance and become strategic players in the organization. Today, the new HRM requires being strategic partner in the organization by aligning all the HR functions with the mission, vision and strategies of the organization.

Considering this, it is possible to say that high quality workforce can create this advantage. The change that has most impacted organizations in the past decade has been the increasing realization that human resources of an organization are the primary source of competitive advantage. It is now accepted that high qualified employees in the organization and the way how they are managed is very important to gain competitive advantage.

HRM must change as the business environment and the world in which it operates changes. Parallel to these changes in technology, globalization and dynamics of labour market, the way to manage human resources has changed. HRM managers have moved from handling simple personnel issues to making a strategic contribution to the future directions and development of the organization. With the evolution of HRM function from traditional to strategic, its roles and importance has gained more attention. The HR function and its process now have become more strategic and HR managers have been a part of the top management team.

This strategic approach to HRM has led this function to be involved in strategic planning and decision making processes by coordinating all human functions for employees. Aligning the strategies of the organization with the HR functions has become the essential part of gaining competitive advantage. The role of the HR for the 21st century is named as strategically reactive in business strategy implementation through supporting the long term strategies with the necessary employee qualifications and developing the cultural and technical capabilities required for the strategies of the organization.

The need for managing the employees strategically in the 21st century also requires the management and the organization structure to be more flexible. The work system has started to change with autonomous work groups with high qualified workforces, outsourcing some of the operational HR functions, downsizing, delayering, employee participation to the decision systems, high wages for the high qualified human resources, virtual and network organizations.

21st century HR requires factors like; increased centrality of people to organizational success, focus on whole systems and integrated solutions, strategic alignment and impact, capacity for change. These factors are described below briefly: * Increased Centrality of People to Organizational Success: Undoubtedly the most powerful force affecting the evolution of HRM is the increased centrality of people to organizational success. The emergence of resource based views of organizations has placed increasing importance on intellectual and social capital. * Focus on Whole Systems and Integrated Solutions: It is clear that HRM has become increasingly systematic during their evolutions. With the strategic proactive role of HRM, the challenge for HRM is to continue to develop innovative systems by focusing on the integrated functions and systems of organization.

* Strategic Alignment and Impact: 21st century HR has become more integrated by its measurement efforts and it is expected that the importance of these efforts will increase in the coming years. This is all being driven by increased pressure to work on issues that are most important to the business and to provide organizational leaders with understandable information that helps them to make better and more strategic decisions about the workforce. Ultimately, it is essential to work together to enhance HR’s capacity to contribute to organizational and financial performance. * Capacity for Change: Today’s organizations must thrive in complex and unpredictable environments and must be extremely agile. This demands the development and implementation of structures and processes that facilitate incremental change.

The new human resources management for the 21st century should play a strategic role by contributing the strategy formulation process and being a strategic partner during the implementation of these strategies. The HR practices should be designed consistent with the strategies of the organization taking into consideration the essential HR needs. In parallel with these, organizations can be able to be more flexible, flat and agile in
rder to struggle with the changes in the competitive environment by gaining competitive advantage with their HR assets.

HR professionals need to lead flatter organizations by encouraging individuals to exercise more initiative, autonomy and accountability by providing tools and techniques that improve their effectiveness and by enabling the acquisition of critical competencies through continuous learning opportunities (Schoonover, 2010).

Cite this page

Management Challenges in the 21st Century. (2017, Feb 02). Retrieved from

Management Challenges in the 21st Century

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