Managerial Prerogative

Managerial Prerogative Has Gone Too Far? Whenever an organization is founded and the objectives for its existence have been established, the founders and management of said organization are expected to ensure the continuity, viability, and resilience of the enterprise. This is done via the allocation of needed resources (i.e. capital, human, financial, etc.) and formulation of strategies in order to achieved set and target organizational goals. Once operational, there are other duties, responsibilities, accountabilities, rights and privileges management can and must exercise to achieve continued operational success and efficiency.

One of these management principles or concepts is known as managerial prerogative, which "includes the right to organize operations and methods of working, issue detailed instructions on the circumstances in which work is performed, and take in matters relating to working hours in so far as these are not rigidly regulated by collective agreement (Eurofound, 2009)." Often, managerial prerogative is institutionalized in organizational policies and protected by statutes and regulations.

However, there have been cases whereby managerial prerogative has been abused or used to cover up the inefficiencies and poor decision-making of the powers that be in the organization. These cases are proofs that managerial prerogative has gone too far and need to be curtailed before it cause undue harm to the organization and the members therein or to the point of breaking the law.

Managerial prerogative is a right and privilege of any employer to regulate all aspects of the organization, but like all rights and privileges, it is not absolute. Further, since managerial prerogative is protected by statues and regulations, "it follows that [it] extends only to constitutionally permissible managerial objectives (Rosenthal, 2008, p.

39)." Aside from the protection this right has based on law, there is the "managerial justification for prerogative resting upon property-rights ownership which must be protected and upon legal enactment which does in fact make them (the management) responsible for the company's activities (Storey, 1983, p. 105)." Certainly, if this prerogative is not exercised by the management of the organization and the entity falters, then those at the helm thereof are responsible and answerable should the organization goes down.

But as earlier mentioned, managerial prerogative as an employer right and privilege is not absolute. For instance, it is not possible for an employee to place at another person's disposal or surrender, through the contract of employment, his or her essential personal fundamental rights as granted constitutionally. These essential rights apply, inter alia, to life, health and, to a certain extent, personal liberty. (Eurofound, 2009) Thus, management in any organization should do well to know the limits to their managerial prerogative to avoid brushing with certain provisions of the law.

Unfortunately, managerial prerogative has been used several times as an excuse to the decisions made by and in the organization. By using managerial prerogative in covering up for some decisions made, it is clear that an abuse has taken place and the use of the right has gone too far. For instance, it is not unheard of especially during economic crisis or recession to lay-off employees to "supposedly" ensure the continuity of the business.

When this decision by management is questioned, the first defense management puts up is that "it is a management prerogative to do so!" Whenever radical changes are instituted in an organization and the changes are faced with resistance; instead of managing the resistance, the response would always be "management prerogative." In such circumstances, both human nature and differing interests between the employed and the employer give rise to a situation in which an abuse of power is not only possible, but highly likely (Wheeler, Klaas, & Mahony, 2004).

Despite the possible or probable abuse of power, infringement on the rights of others, and/or non-compliance with laws, management always fall back on managerial prerogative that it has become a mantra to cover up inefficiencies. Management of any organization should know and understand that in the same manner as managerial prerogative is not absolute, it also does not give them a carte blanche to run the organization the way they want without due diligence and accountability.

It is through this callous approach on the use of managerial prerogative that saw the downfall and criminal prosecution of C-level executives involve in some of the greatest financial and accounting frauds and scandals in corporate history. Companies such as Enron, Tyco, and others have used as one of their defenses managerial prerogative to rationalize the decisions they made that saw the downfall of their organizations.

Whilst the managerial prerogative has maintained unilateral powers for one party we can observe that courts are beginning to impose obligations on the employer to exercise these unilateral rights consistently with the principle of good faith and to avoid arbitrary and capricious results (Ellis, 2008). Aside from this, criminal prosecutions have also been done to send notice to those bent on abusing their managerial prerogative.

These constantly serve as a reminder to those in management that managerial prerogative is basically a right and privilege that should be exercised diligently for the good of the organization and the stakeholders involved thereof; anything extraordinarily unsound is both unethical and illegal. Bibliography: Bado, J. & Logue, J. (1991). Hard hats and hard decisions: The evolving role in employee-owned firms. Employee Ownership Law and Finance, 4: 1-19. Retrieved May 13, 2011 from http://dept.kent.edu/oeoc/OEOCLibrary/Preprints/BadoLogueHardHatsAndHardDecisions1991.pdf Ellis, A. (2008).

The strain between managerial prerogative and contractual principles in English labour law. Retrieved May 13, 2011 from http://www.workplacebullying.co.uk/manperog.html European Foundation for the Improvement of Living.