It is not a secret that ownership, governance, and management are among the priority components in managing an organization. Each of them is interconnected with the other and represents a single whole in the process of competent, correct, and effective leadership and administration within a firm. Accordingly, this aspect is most clearly and fully revealed by the example of the case of Pike River Coal Limited. Ownership, governance, and management in the context of Pike River Coal Limited’s case are the main emphasis of this paper.
Ownership
In a general sense, ownership is one of the cornerstones of leadership in terms of decisiveness, solving a wide range of problems together, and owning the consequences of actions. For instance, responsibility, internal standards, depth, and flexibility are the basic principles on which ownership in Pike River Coal Limited is often built. Ownership is a way to minimize conflicts and information asymmetry and promote the development of long-term corporate strategies (Baltrunaite et al., 2022). According to Grensing-Pophal (2018), ownership indicates responsibility for a department, project, or initiative. This way, owners take full responsibility for their actions and deeds, realize potential risks and consequences, and oversee the entire effort (Duhaime et al., 2021). Hence, one should comprehend that an initiative comes from internal motivation. In other words, it is moving forward without permission or direction from the outside. Furthermore, ownership involves active and continuous attempts to achieve the set goals.
Consequently, ownership involves taking responsibility for results without shifting it to a system, circumstances, or management, acting proactively, anticipating possible difficulties, operating boldly, offering alternative solutions, and doing work conscientiously. Ownership refers to an organization’s business or a separate process, or function, as its own—the same attitude to the workspace, equipment, and inventory. This concept implies actions based on internal standards, which are crystallized from experience and correlate with reality but are not limited by external dogmas and authorities. The same internal standards serve to evaluate performance and stimulate self-improvement. They are a powerful anchor in the storm of uncertainty. Ownership permits one to look “at the root of a problem,” trying to find causes and offer a rational, purposeful solution. Working independently, in groups, resorting to authorities, using administrative resources and powers, or neglecting the status if appropriate will allow one to solve an issue faster and more economically.
Governance
Governance is the strategic management of a firm and the relationship between authorities (owners, shareholders, board of directors, and management board). Often, this term means when managers come together to make important decisions about the company’s future and its direction as a whole (Eisenstein, 2021). It is noteworthy that governance mainly concentrates on creating an organizational environment and balancing the interests of an organization’s stakeholders (Duhaime et al., 2021). Governance, unlike management, is the basic principles, rules, and standards of the power system in Pike River Coal Limited, which all managers, including the supreme body approving these regulations, are obliged to comply with. Moreover, it controls connections between the management bodies, not between a management body and a subordinate. The critical relationship regulated by governance is the relationship between ownership and managerial positions regarding their distribution of authority and responsibility (Castrillón, 2021). In addition, governance implies a mandatory separation of powers and not the concentration of all power in one person like owner or manager (Castrillón, 2021). A circle rather schematizes governance, and management is a triangle with the top up.
Therefore, governance systems set the parameters according to which management and administration systems function. Governance determines how power is distributed and shared, policies are formulated, and priorities and accountability of stakeholders are established (Concept of governance, n.d.). Governance sets norms, strategic vision, and direction and formulates high-level goals and policies. It oversees an organization’s management and performance to ensure that it acts in the public’s best interests and, more specifically, the stakeholders following its mission. Governance directs and oversees administration to ensure that a firm achieves the set goals and results and acts prudently, ethically, and legally.
Management
Management is a company’s operational management and its structural units’ interaction. In other words, all processes and relationships in Pike River Coal Limited at the level of a CEO and above are governance; everything below is management. Management and its functions aim to achieve an organization’s goals within the framework of the model and methodology established by management (Tucci, 2022). In brief, management is all about making decisions to implement policies. While a board of directors is the core of governance, managers, and executives are part of management. Management concept covers planning, implementation, and monitoring processes to achieve the desired results. Management includes processes, structures, and arrangements designed to mobilize and transform available physical, human and financial resources to achieve concrete results (Concept of governance, n.d.). Additionally, it refers to individuals or groups of individuals authorized to achieve specified outcomes. Management supervises an organization in accordance with the broad goals and directions set by an authority. It implements solutions in the context of a mission and strategic vision, makes operational decisions and policies, and informs and educates leaders (government bodies).
Influencing the Functions of Management
It should be assumed that ownership can influence management functions in terms of transforming competitive actions. In this case, efforts should be directed toward taking a leading position in the market and increasing revenue (Yang & Meyer, 2019). In particular, owners should attend annual general meetings, and senior management should be free to pursue the company’s interests. Additionally, a competent and correct separation of the functions of ownership and management of the organization is considered appropriate. Accordingly, governance can change the style of management based on such principles as fairness, coherence, efficiency accountability, strategic vision, transparency, and much more. Based on this, this type of management loses its former rigidity, detail, and regularity; it is based on horizontal rather than vertical connections. Hence, implemented through negotiations, it can more effectively meet stakeholders’ needs and develop meaningful solutions for the company’s future.
Finally, management can influence the methods, forms, and styles of management in the organization due to the competent leadership of socio-economic factors. In addition, this will allow us to solve current and strategic tasks aimed directly at developing and creating economic stability for the company. The ability to effectively manage all processes helps to direct the organization’s development in the right direction, develop a policy of harmony, and effectively function both external and internal elements of the enterprise.
Contributing to the Industrial Disaster in 2010
Taking into account the emergency situation, ownership, governance, and management together could contribute to mitigating problems through a structural approach using these strategies and tactics. It is no secret that the impact of extreme events on a company’s performance indicators on their stability during crisis periods largely determines a firm’s further development. How it will develop depends primarily on the management methods used in an organization. A structural approach in operating with three concepts can ensure minimal damage and maximum profit for the company for 2010, regardless of the external factors affecting it.
The tasks that arise for a company’s management at any level under the influence of extreme external factors on it primarily consist of maintaining a team’s stable activity, fulfilling essential obligations to its partners, customers, creditors, and other counterparties, and preserving core assets. As a rule, in the daily mode, the main goal and meaning of a firm’s activities is the progressive development of its business, increasing the value of its assets, as well as optimizing the risk-return ratio, while the purpose of managing a corporation in emergencies is to preserve the basic structure of the business and its core assets. Accordingly, in a crisis, ownership, governance, and management allow one to consider some stress scenarios of managing a company and its withdrawal from an emergency.
Conclusion
Thus, summarizing the above, it is necessary to state that ownership, governance, and management, based on the example of Pike River Coal Limited, are three interrelated and interdependent concepts without which effective management of an organization is impossible. In a general sense, ownership implies responsibility for something, awareness, and control of potential risks and consequences. In turn, governance is a strategy when leadership jointly seeks to resolve urgent problems and difficulties. Management is the management of the company and the interaction of its structures that work on implementing plans and projects and achieving the company’s goals and objectives set by higher management.
References
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Castrillón, M.A.G. (2021). The concept of corporate governance. Revista Científica “Visión de Futuro”, 25(2), 178-194. Web.
Concept of governance. (n.d.). IBE-UNESCO. Web.
Duhaime, I. M., Hitt, M. A., Lyles, M. A. (2021). Strategic management: State of the field and its future. Oxford University Press. Web.
Eisenstein, L. (2021). The difference between governance and management. Boardeffect. Web.
Grensing-Pophal, L. (2018). What is ‘ownership’? HR Daily Advisor. Web.
Tucci, L. (2022). Strategic management. Web.
Yang, W., & Meyer, K. E. (2019). How does ownership influence business growth? A competitive dynamics perspective. International Business Review, 28(5), 1-12. Web.