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Management Practices and Business Culture in Nepal

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Management is the art of getting things done through others. It is the process of completing managerial functions. All activities and procedures that managers follow to perform managerial functions are collectively known as management practice. In Nepal, management practices are still in their traditional forms. Many business organizations are family owned and, therefore, there is lack of a professional management system. They are unable to develop a corporate culture. In government offices, management practice is affected by bureaucracy. Government employees lay unnecessary emphasis on rules, regulations, procedures and legal formalities while providing service to the people. And at times they tend to interpret government rules and policies differently so a to shy away from their responsibilities. However, some organizations like banking, insurance, hotel, airlines, communication, joint venture and multinational companies are in the process of introducing modern management systems because of the development of competitive environment. The following are the common practices found in Nepalese organizations.

Planning practices

Planning in Nepalese enterprises is based on age old traditions. Many managers do not consider past achievements and reliable data to prepare plans. They prepare plans on the basis of their personal intuition and judgement. They prepare plans only to meet short term objectives of the formulated without analyzing the impact of environment. SWOT analysis is not taken into consideration. The major problem in Nepalese organizations is to implement the plans. Plans are prepared by the top level management without incorporating the opinions and suggestions of subordinates. Therefore, subordinates feel irresponsible to implement plans. Besides, supervision and evaluation of the progress of work are hardly taken seriously. However, entry of multinational companies and the entry of Nepal into the World Trade Organization have compelled Nepalese managers to prepare realistic plans and implement them effectively. 

Decision making practices

There is centralized decision making practice in many Nepalese organizations. Decisions are taken by the top level management without participation of the subordinates. The top level managers do not want to delegate the decision making authority to the subordinate levels. They do not trust their subordinates even if they are capable and sincere. Subordinates are enforced to implement the decisions without proper instructions and guidance. Generally in private organizations, decision is taken on family pressure whereas in government organizations it is taken on political pressure. Quantitative tools for decision making are rarely found in practice. In the decision making process, more importance is given to fulfill individual interest rather than organizational interests. Many managers do not take decisions in time. They take decisions only in emergency situations. In government organizations committee are formed to solve the problems, but the committees recommendations are rarely implemented. However, with the development of competitive environment in business, managers of some private enterprises have started to consider both qualitative and quantitative aspects of decisions. As far as possible they try to take rational decisions. 

Organizing practices

Many Nepalese organizations have traditional vertical organizational structure. In development projects, matrix structure is also practiced. Organizational structure is divided into different departments on the basis of functions. There is a division of work, but authority and responsibility is not clearly defined. Authority is highly centralized. Decisions are delayed due to improper delegation of authority. Lack of accountability among the members has resulted in wastage of organizational resources and efforts. The concept of teamwork and group effort is not developed. There is no proper coordination among members of different departments. However, after the entry of joint venture and multinational companies, the organizing practices have changed and improved in Nepalese organizations. 

Human resource management practice

Human resource management practice of Nepal is in its traditional form. Many organizations still do not prepare human resources plan. The manpower requirement is estimated either on past experience or on ad hoc basis. There is no proper system of job analysis and job description in many organizations. 

In private organizations, the main source of recruitment is relatives and friends. In corporate houses, there is a system of publishing advertisements for recruitment of staff, but for appointments, importance is given to reference and recommendations. In government offices, the Public Service Commission openly announces vacancies for recruitment. It selects employees on the basis of written test and interview. However, in public enterprises the top level management is appointed on the basis of political ideology. Similarly, junior level staffs are also appointed on political pressure. 

In many organization, experience, interest and skill of the staff are generally not taken into consideration for placement in the job. However, in corporate organization the concept of placement of right person to the right job is practiced. Similarly, emphasis is not given to development of human resource skills. Development programs like training, workshop, seminar etc are rarely organized. 

Scientific method of performance appraisal is not properly adopted. Evaluations of employees depends on the manager's judgement and recommendation.

Leadership practices

In Nepal, many organizations practice autocratic leadership style. There is a system of centralized authority structure. Top level managers do not believe on the efficiency and skills of their subordinates. The decision making authority is not delegated to the lower level. Therefore, there is lack of motivation among the staff. 

In private organizations, family members manage the business; therefore, there is a highly centralized authority and control. They have not given decision making authority to their employees. In public enterprises, leadership pattern is affected by political structure. There is lack of coordination, two way communication team work and group effort. The top level management is changed when government changes. Therefore, managers do not feel responsible and accountable to accomplish organizational goals. Government offices of Nepal have a bureaucratic structure; therefore, decision making authority is centralized in the top level. Lower level staff is responsible only in implementing the decisions taken by the top level authority. However, corporate houses established under joint venture, and multinational companies have, to some extent, laid emphasis on participative management. They involve their subordinates in the decision making and problem solving processes. They also emphasize on teamwork and group effort to meet organizational objectives. 

Controlling practice

Many managers in Nepal have a traditional view of control. They view control as a tool to issue threats and penalize employees. Control mechanisms are not based on plans. Setting rational standards and measuring actual performances against the predetermined standard is rarely practiced. In government offices, the annual budget is regarded as pre control, while the final audit is regarded as financial control. Application of modern control tools like BEP, PERT | CPM and, ratio analysis is rarely found in practice. More emphasis is laid on post control rather than pre control. Managers do not show seriousness in quality control. Control is regarded as the responsibility of the top management due to the highly centralized authority structure. Management audit and performance audit is not in practice. 


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