Relevant Theories of Management and Application - Essay Example

? Relevant Theories of Management and Application al Affilation Organisation or management theory is an instrument that providesdecision makers with a thorough understanding on how to manage their present organization effectively. Organisation theories are shaped in the past and continue to be developed in the present to respond to the changing business environment effectively (Daft 2010).The most prominent organisational theories are scientific management, human relations, bureaucracy, and post bureaucracy theory. Each theory offers managers a unique approach for attaining organisational success. This paper attempts to illustrate the characteristics of different organisational theories and how they were successfully applied by various types of organisation. Nature of Scientific Management Increased efficiency of job performance is the goal of scientific management, which is the pioneering organisational theory. This was introduced by Frederick Taylor in 1909 during the beginning of industrial revolution. Taylor recognised that critical to the success of industrial firms is maximising worker productivity while minimising waste. In effect, Taylor promoted the method of standardising the job of each worker. This is done by having the managers analyse the tasks that are essential for increased efficiency and allowing them to create job designs that will maximise the division of labor. Then, the workers are given full layout of the specific tasks that needs to be accomplished (cited in Watson 1995). Furthermore, scientific management practices also involve strict levels of control. For instance, workers are frequently monitored within arm’s length by their supervisors. Productivity is also calculated based on actual execution. To encourage workers to maximise their efforts, differential bonus system is also given which is believed to make employees extremely exhausted (Watson 1995). According to Taylor (1967), this theory can lead to effective management of organisation since it was first practiced in the industry for about thirty years before it was developed as a theory (cited in Hollway 1991). It is notable that such theory emerged after the significant rise of industrial production, massive proliferation of factories, and heavy investment in machinery. In this context, scientific management theory proved significant for effective mass production. However, the scientific management practices of the 19th century in US and UK factories have compromised the morale of many workers. This then resulted to the formation and strengthening of unions in countries. They asserted that such practices, especially in car factories, have reduced their bodies into human machines by utilising them to the full extent and taking away their right to movement (Hollway 1991). Despite the drawbacks of scientific management theory on employee health and morale, one UK firm has successfully adopted scientific management practices. Hans Chains was one of the world’s famous makers of drive chain. While the organisation applied the systematic division of labor to minimise production cost and improve efficiency, it refused to adopt strict scientific management practices which are detrimental to the health of employees. Rather than giving them differential bonuses, the company implemented a policy in 1896 which allowed workers to work with only 48 hours a week. This is based on the premise that worker productivity is maximised if working hours is reduced (Witzel 2009). Moreover, in 1906, Hans Chains established the first personnel department while in 1917; it was the first firm to develop a committee for managing the shop workers. The company experienced massive success in the field by adopting the effective practices of scientific management and avoiding its drawbacks, such as exploiting the strength of workers to maximise profit (Witzel 2009). Moreover, recent research on large US manufacturing firms showed the application of scientific management practices through the extensive effort to minimise production time and to minimise production cost. Several Japanese firms also recognised the importance of adopting scientific management theory such as Mitsubishi Electric and Nippon Electric (Watson 1995). Nature of Human Relations Theory Researchers behind human relations theory recognised that encouraging workers to participate in work related decision-making is a key to manage an organization effectively. This is in contrast to the principles of scientific management wherein the deciding and controlling power is concentrated in the top management. Elton Mayo (1930), the forerunner of human relations opposed the principle of scientific management by highlighting that there is a best way for getting a job done. He asserted that such principle fails to recognise that workers are a body of dynamic individuals, and managing them based on a single scientific and profit-oriented rule would be ineffective (cited in Crowther & Green 2004). Mayo (1930) has proven the effectiveness of human relations theory based on a study conducted in Hawthorne, an electric company based in Chicago. The study was performed in two stages. In the first stage, Mayo (1930) placed different types of lightning in the workshop to identify the optimal lightning that will maximise worker productivity. Mayo made a peculiar act of telling the workers of the purpose of the study. The findings showed that at various lighting, worker productivity continued to increase, which disqualifies lighting as the reason for their increased productivity. On the other hand, the second stage involved six women who were given higher pay and longer rest period to identify if these have a direct effect on their productivity. The findings showed that worker productivity continued to increase even if the pay and rest were returned to the original state. Mayo found out that the rise in worker productivity was not an effect of work interventions, but a direct result of conducting the study itself (cited in Crowther & Green 2004). The study of Mayo (1930) revealed that it was the concern of the management to improve the work environment of workers which became the source of motivation and increased the productivity of workers; not a result of one best way as coined by Taylor (1911) (cited in Crowther & Green 2004). In contrast to scientific management theory, human relations assert that emotional factors are the most effective determinant of worker productivity. According to Pugh and Hickson (1996) this is manifested by building good communications with workers, encouraging them to actively participate in company activities, and showing actions that will highlight their value and importance (cited in Crowther & Green 2004). Fortune magazine publishes the top 100 American firms which comprise the list of the best American companies to work for. Among these are NetApp, a data storage company, Zappos.com, an online retailer, and Marriott International. Based on the research, these companies adopted human relations practices to manage their organization effectively. Their organisational culture is characterised by fairness and warm relationship among employees. These firms also provide their employees with job tenure and career growth opportunities. Their concern for employees also transcends from their offices to counseling employees in solving personal or family problems (Reece 2013). NetApp is famous for its employee-driven culture, making it part of the world’s best places to work in three consecutive years since 2010 (Grassi 2013).On the other hand, one of the core values of Marriott was also to put a top priority on the welfare of employees by showing utmost respect, giving equal treatment, and providing growth opportunities to all its associates around the world (Marriott International 2013). Nature of Bureaucracy Theory To attain the goal of maximising efficiency, Max Weber (1922) suggested the application of bureaucracy among firms. The theory denotes that an organisation can only function effectively if it follows the six attributes of bureaucracy (cited in Morgan 1989). These are a) the adoption of hierarchical organisational structure where power comes from the top; b) identification of worker’s core competency for an effective division of labor; c) constant regulation of performance based on strict control systems; d) decision making for recruitment and promotion based on well defined rules and policies; e) accountability to the top based on position held or impersonal obligation and finally; f) division of duties on a fixed manner (Morgan 1989). Similar to machines, which are governed by specific instructions, it is asserted that organisations can become efficient by following due process based on a set of laws. This theory is first applied in state governance to efficiently serve the needs of a large and complex society (Morgan 1989). Several firms benefited well from the adoption of a bureaucratic organisation. One of these is United Parcel Services (UPS), the world’s largest distributor of packaged items. Based on bureaucratic theory, UPS has set various rules and regulation, which direct the conduct of all its employees. For instance, UPS drivers are bound to follow 340 specific instructions to ensure that packages are delivered properly and efficiently. This include steps on proper loading, appropriate use of seat belts, and correct handling of keys and steps on proper walking. There are also strict rules for dressing. For instance, uniforms must be clean always; black or brown shoes must be well polished; length of hair should not exceed the uniform collar; and beards should be shaved often (Daft 2007).Even though UPS employees are governed by strict rules; it has over 90% retention rate. This shows the satisfaction of the employees since they are well compensated and treated well by the organization. They also talk to their bosses on a first name basis. Moreover, UPS also gives emphasis on fairness and promotion from within which keeps all employees motivated and loyal (Daft 2007). However, the efficiency of bureaucracy in managing large organisation is only limited during the stable times. Since bureaucratic organisations are highly centralised and hierarchical, it is difficult for a firm to respond to a crisis situation and unstable market condition immediately. For instance, the emergence of high technology has transformed the competition in the package delivery industry into a global scale. To respond to this situation, organisations need to adopt some flexibility and autonomy among its workers which is difficult to do in an organisation that is characterised by high bureaucracy. To operate in a knowledge based industry effectively, UPS managers need to make adjustments on its strict rules and regulation. However, it can still retain the original hierarchy and chain of command when the competition in the industry becomes stable (Daft 2007). Post Bureaucracy Theory The major criticism on firms adopting bureaucracy practices is that plenty of rules and regulations are bound to the employees which make firms less responsive to external challenges. To address this conflict, the theory of post bureaucracy was organised. The attributes of post bureaucratic organisation include; a) information resource sharing; b) close cooperation; c) trust-based relationship; and d) achievement of unity through dialogue instead of merely obeying the opinions of higher ranks (Bradley & Williams 2009). Moreover, post bureaucratic organisation is comprised of three main types which are “inter-organizational networks, network enterprise, and virtual organization” (Bradley & Williams 2009, p. 158). One key characteristic of post bureaucratic firm is that it has lesser boundary wherein the supply chain is comprised of various organisations which are closely working together from the production to distribution of products. Interorganisational networks is manifested in the outsourcing of non core activities such as customer service to external firms having the right expertise such as BPO (Business Process Outsourcing) companies for customer service. On the other hand, Nike exemplifies the network enterprise form of post- bureaucratic organisation. While the company conducts the market research, design and advertising functions internally, the actual production of Nike shoes are carried out by a network of various suppliers in different countries (Bradley & Williams 2009). Conclusion The various forms of management theory, which evolved through history, are very useful guide for decision makers to effectively manage their organisation. Managers need to select which among scientific management theory, human relations, bureaucratic, and post bureaucratic theory best fits their present organisation. In general, scientific management is characterised by focusing on the systematic ways for maximising productivity while human relations focus on investing in the emotional needs of workers as the best way to increase productivity. Bureaucratic firms emphasize the performance of job based on a set of rules. In contrast, post bureaucratic firms are characterised by flexibility, close cooperation, and interconnection among various firms to attain effectiveness and efficiency. Based on the nature of each management theories, and drawing ideas from the firms which have successfully applied each theory, managers today should be able to effectively identify which among the theories can help their business achieved their organisational goals. References Bradley, H, Williams, S, Stephenson C 2009, Business in society, Polity Press, Cambridge. Crowther, D, Green, M 2004, Organisational theory, Chartered Institute of Personnel and Development, London. 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Witzel, M 2009, Management history: text and cases, Routledge, New York. Read More