Management Practices

If you walk down the aisle of the business section in your local bookstore, you’ll find hundreds of books that ex-plain precisely what companies need to do to be successful. Unfortunately, the best-selling business books tend to be faddish, changing dramatically every few years. One thing that hasn’t changed, though, is the importance of good people and good management: companies can’t succeed for long without them.

Companies that invest in their people will create long-lasting competitive advantages that are difficult for other companies to duplicate. Employment security is the ultimate form of commitment companies can make to their workers.

If employees are the basis for a company’s competitive advantage, and those employees have employment security, then the company needs to aggressively recruit and selectively screen applicants in order to hire the most talented employees available. Self-managed teams are responsible for their own hiring, purchasing, job assignments, and production.

High wages are needed to attract and retain talented workers and to indicate that the organization values its workers. Like a high-tech company that spends millions of dollars to upgrade computers or research and development labs, a company whose competitive advantage is based on its people must invest in the training and skill development of its people.

A company should treat everyone, no matter what the job, as equal. If employees are to make decisions that are good for the long-term health and success of the company, they need to be given information about costs, finances, productivity, development times, and strategies that was previously known only by company managers.

Great management practices impact competitive advantage.