Laissez-faire system - a success story
Laissez-faire system - a success story
Meaning
Laissez-faire .This is an interesting word which I learnt in my college
days and got into my memory ever since. It is pronounced laissee fare and its
meaning is non interference by governments in markets and letting them
function without any regulation.
In the parlance of business, laissez faire system gives least
possible guidance to people working in lower rungs of an organization
and will have control not openly but only through less obvious methods.
In other words it will allow people in lower end of hierarchy to have their
own system to function. As long the goals are met and there is good output,
the ways and means will not be questioned.
There are some situations in some of the industries or work places,
due to political reasons or because of their organizing capacity to
fight for their rights and privileges some forces will tend to take more roles
in the work environment. In such a scenario the individual worker may get
the freedom of choice as far as productivity, work culture, place of work etc.
In such places, the managerial level control are only subtle and in some places
it may also be almost non existent as the supervisory line staff themselves
will start to enjoy the fruits of autonomy and they will lose the moral authority
to question lower level workers.
When such a situation is prevailing in an industry that is a typical
case of 'Laissez-faire ' where there is no control from the top or the higher
level staff gives up the hold voluntarily due to some reasons. Or due to the
realization that non interference is a better option. In government or Public
Sector Units this situation may develop due to the political climate in the
place/state where the office or industry is placed. This may also happen in a
private enterprise because of power tussle within the organization or due to
inner politics.
Ideally any good administration will not allow such a situation to develop or
continue for a long time and as far as possible they will try to tame such a force
within the industry at the earliest. It will be difficult if it is a political development
beyond their control and they will have no other option but to let it have its natural
course. In our country most of the places where such a situation developed the
institution concerned had collapsed.
LIC story
But if there is a place even when such a extra control mechanism developed
the end results are very good and satisfactory, it is the Life Insurance Corporation
of India. The LIC's working style of personnel at the lower end of the tier almost
resembles that of "laissez faire"where they have the utmost freedom to choose their
level of output. But in spite of it the LIC is one of very big success stories in the
Insurance Industry. Even after twenty years of privatization of Insurance LIC
still maintains its numero uno position where the competitors are no way near
it in terms of marketing or administrative performances.
Association in LIC's role
We may attribute the success in the marketing area to the field force of LIC i e
agents and development officers and of course, to the insuring public who would
have trusted a government owned brand more. But what about the servicing area.
How is it possible even on that front LIC is doing very well. The insurance behemoth
is servicing about 31 crore individual policyholders and 11 crore group policyholders
which is humongous. This number is the most by an insurer in the whole world.
Well, here the role of a trade union comes into play. The major trade union of tier 3
and 4 employees AIIEA or All India Insurance corporation of India is
taking up major role in shaping up the working culture of employees.
The all india leaders of this organization started doing this since the 1970s and
1980s where they used to emphasize the importance of a honest day's labour. And by
the 1990s they would tell that struggle or success against private players should start
from every desk. Nowadays, they are taking this aspect a little further and tell the
employees to accompany the customers to the work front i e whenever a customer
comes inside LIC someone has to take care of his/her need till the work is finished.
A good number of employees took these calls of leaders seriously and contributed
their best. I feel, this attitude of union leaders and members worked like a
miracle in the better shaping of LIC in the servicing area. The ever positive and
enthusiastic participation of employees and family like atmosphere and good
camaraderie displayed by officers of the Corporation without displaying their
egos helped the corporation in no small measure. This has been made possible
due to the continuous, tireless and extraordinary work by some great minds in
the trade union at many levels especially at the top. As exceptionally talented and
brilliant people are in control of the reins, LIC has been able to meet all its
challenges and so far nothing had gone wrong for it.
Communication - the key
In the work place at the micro level, the functionaries of AIIEA
are expected to do a tightrope balancing act between the interests
of workers and the organization LIC. While explaining the need to maintain
higher standards as expectations go sky high during modern digital era, they also
have to keep in mind personal opinions and aspirations of workers. The
same trade union which got strengthened due to calls of struggle for better
working conditions, wages etc has to again rally the same workmen to save
the organization by giving more output to match the expectations
in a changed circumstance. While doing so there is always the fear of being
branded as part of administration and not having the interests of workmen.
The danger of being called Labor exploitative would also be there. Here in spite
of all these odds, the balancing act has been done very successfully almost at all
levels without being called names by workers. The key to the success of this act is
exceptional communication at every level and also due to the level of credibility of
leaders. From the working of aiiea a lesson on the importance
of communication is to be learnt in building of any mass organization.
That communication was so total that the Tata institute of fundamental Research
which carried out a survey in the industry had to acknowledge that even at the
lowest levels the workers are aware of the goals of organization which has no
parallel anywhere in the world.
Conclusion
Many economists today including Joseph stiglitz thinks that laissez faire has
failed as an economic model. But in personnel management, experience in LIC
shows that it is a highly successful one.
=====================================================
Meaning
Laissez-faire .This is an interesting word which I learnt in my college
days and got into my memory ever since. It is pronounced laissee fare and its
meaning is non interference by governments in markets and letting them
function without any regulation.
In the parlance of business, laissez faire system gives least
possible guidance to people working in lower rungs of an organization
and will have control not openly but only through less obvious methods.
In other words it will allow people in lower end of hierarchy to have their
own system to function. As long the goals are met and there is good output,
the ways and means will not be questioned.
There are some situations in some of the industries or work places,
due to political reasons or because of their organizing capacity to
fight for their rights and privileges some forces will tend to take more roles
in the work environment. In such a scenario the individual worker may get
the freedom of choice as far as productivity, work culture, place of work etc.
In such places, the managerial level control are only subtle and in some places
it may also be almost non existent as the supervisory line staff themselves
will start to enjoy the fruits of autonomy and they will lose the moral authority
to question lower level workers.
When such a situation is prevailing in an industry that is a typical
case of 'Laissez-faire ' where there is no control from the top or the higher
level staff gives up the hold voluntarily due to some reasons. Or due to the
realization that non interference is a better option. In government or Public
Sector Units this situation may develop due to the political climate in the
place/state where the office or industry is placed. This may also happen in a
private enterprise because of power tussle within the organization or due to
inner politics.
Ideally any good administration will not allow such a situation to develop or
continue for a long time and as far as possible they will try to tame such a force
within the industry at the earliest. It will be difficult if it is a political development
beyond their control and they will have no other option but to let it have its natural
course. In our country most of the places where such a situation developed the
institution concerned had collapsed.
LIC story
But if there is a place even when such a extra control mechanism developed
the end results are very good and satisfactory, it is the Life Insurance Corporation
of India. The LIC's working style of personnel at the lower end of the tier almost
resembles that of "laissez faire"where they have the utmost freedom to choose their
level of output. But in spite of it the LIC is one of very big success stories in the
Insurance Industry. Even after twenty years of privatization of Insurance LIC
still maintains its numero uno position where the competitors are no way near
it in terms of marketing or administrative performances.
Association in LIC's role
We may attribute the success in the marketing area to the field force of LIC i e
agents and development officers and of course, to the insuring public who would
have trusted a government owned brand more. But what about the servicing area.
How is it possible even on that front LIC is doing very well. The insurance behemoth
is servicing about 31 crore individual policyholders and 11 crore group policyholders
which is humongous. This number is the most by an insurer in the whole world.
Well, here the role of a trade union comes into play. The major trade union of tier 3
and 4 employees AIIEA or All India Insurance corporation of India is
taking up major role in shaping up the working culture of employees.
The all india leaders of this organization started doing this since the 1970s and
1980s where they used to emphasize the importance of a honest day's labour. And by
the 1990s they would tell that struggle or success against private players should start
from every desk. Nowadays, they are taking this aspect a little further and tell the
employees to accompany the customers to the work front i e whenever a customer
comes inside LIC someone has to take care of his/her need till the work is finished.
A good number of employees took these calls of leaders seriously and contributed
their best. I feel, this attitude of union leaders and members worked like a
miracle in the better shaping of LIC in the servicing area. The ever positive and
enthusiastic participation of employees and family like atmosphere and good
camaraderie displayed by officers of the Corporation without displaying their
egos helped the corporation in no small measure. This has been made possible
due to the continuous, tireless and extraordinary work by some great minds in
the trade union at many levels especially at the top. As exceptionally talented and
brilliant people are in control of the reins, LIC has been able to meet all its
challenges and so far nothing had gone wrong for it.
Communication - the key
In the work place at the micro level, the functionaries of AIIEA
are expected to do a tightrope balancing act between the interests
of workers and the organization LIC. While explaining the need to maintain
higher standards as expectations go sky high during modern digital era, they also
have to keep in mind personal opinions and aspirations of workers. The
same trade union which got strengthened due to calls of struggle for better
working conditions, wages etc has to again rally the same workmen to save
the organization by giving more output to match the expectations
in a changed circumstance. While doing so there is always the fear of being
branded as part of administration and not having the interests of workmen.
The danger of being called Labor exploitative would also be there. Here in spite
of all these odds, the balancing act has been done very successfully almost at all
levels without being called names by workers. The key to the success of this act is
exceptional communication at every level and also due to the level of credibility of
leaders. From the working of aiiea a lesson on the importance
of communication is to be learnt in building of any mass organization.
That communication was so total that the Tata institute of fundamental Research
which carried out a survey in the industry had to acknowledge that even at the
lowest levels the workers are aware of the goals of organization which has no
parallel anywhere in the world.
Conclusion
Many economists today including Joseph stiglitz thinks that laissez faire has
failed as an economic model. But in personnel management, experience in LIC
shows that it is a highly successful one.
=====================================================
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