Comparison of Management Theories

INTRODUCTION

This paper aims to draw comparison between two major management theories namely; Scientific Management introduced by Federick Taylor and the Neo classical views of Human Relations Approach. Both schools of thoughts are drafted to identify and increase the potential of an organization. However both are dissimilar in their ways and means they seek to maximize business potential. Taylorism or Scientific Management can be said to be an approach that is circled around improving worker by means of strict management and technical methods. While according to Daft (2006), “the Human Relations approach narrows its focus on the worker and lays emphasis on a better and stronger worker relationship, recognition and achievement are seen as stimulants for increased productivity”.

This piece will aim to introduce and describe each methods of management and spot the reasons or push behind these thoughts. A list of several theories that are correlated with Scientific Management or the Human Relations Approach will be carefully evaluated as well. Lastly, this piece will take into consideration, the position of each of the management models in the contemporary business environment before agreeing or disagreeing on the extent to which the Human Resource Approach brings progress and development over Taylor’s principles if Scientific Management in relations to how management and work can be effectively and efficiently carried out.

RESEACH FINDINGS

Traditionally, the principles of scientific management have had positive effect on the industry and thus have gained considerable support. Grimes (2006) identified Adams Smith as one of the main contributors of this model in the 18th century. He saw specialization as the, “means by which a worker can be made efficient and gave more emphasis on the practice of division of labor, singling out tasks and managing the worker on these task” (Grimes, 2006). In the 20th century, Federic Taylor made a big impact in the field of managerial studies, aided by his book “Principles of Scientific Management” that was published in 1911. In his book, he took steps to popularize the scientific model to a very great extent, consequently this “earned him a great deal of respect that he became famous and was crowned the pioneer of scientific management” (Daft, 2006).

Taylor performed groundbreaking studies in an effort to improve workplace productivity. He believed that workers were incapable of managing themselves and productivity could only be achieved if a more intelligent man (the manager) directed their every move. In doing so he removed all responsibility for the design and planning of work from those who perform it, and placed it in the hands of the managers whose role was focused on extracting the maximum effort from the worker. Taylor believed managers placed too much emphasis on productivity and not enough on the processes by which the work was done and this led to wastage in human effort. Taylor performed a series of studies scrutinising workers to discover the most efficient techniques (Freedman, 1992).

In one study, Taylor analysed the efficiency of shovelling. In addition to worker technique, optimum shovel loads were calculated and shovels were redesigned for each material. Workers could now shift greater loads for a longer duration with less fatigue. This ‘Science of Shovelling’ allowed for a dramatic reduction in factory staff whilst maintaining productivity (NetMBA.com, 2000). Productivity may have been increased, but at the expense of the employees. In contrast to the Human Relations Approach there was practically no regard for the employees themselves. Taylor’s principles of Scientific Management had replaced skilled labour with unskilled labour and workers were selected on strength, speed and not much else (Taylor, 1911). Where the Human Relations approach promotes employee empowerment, the scientific approach reduces the employee to a series of repetitive tasks and strips them of any sense of worth (Taylor, 1911).

Despite the disregard for the worker, the timing of Taylor’s principles of Scientific Management was perfect. Large manufacturing businesses such as Ford and General Motors were experiencing rapid expansion and were looking to management methods to increase output and focus the efficiency of their workers. Many of Taylor’s principles were adopted in factory production and throughout the 20th century the application of scientific principles had a marked affect on productivity. Ironically, as a result of increased production, the general standard of living improved and so did worker dissatisfaction with the method. Union-management and a popular interest in the ‘human factor’ (by behavioural scientists) resulted in a productivity slowdown. This prompted organisations to relocate their work force to developing countries with cheaper labour, a mirror of the original conditions that allowed scientific management to thrive in the west (Oman, 2000). Organisations were now looking to new management methods to satisfy the increasing needs of their workforce and regain productivity and many found it in the form of the Human Relations Approach (Wilson 1990).

The Human Relations Approach represents a significant departure from the automated and dehumanized approach of Scientific Management. Where Scientific Management concentrates on technique and output, the Human Relations Approach focuses on the individual and organisational change through human interactions (Baldridge 1972). It challenges the concept of managers think and workers do and places teamwork and motivation at the heart of any productive organisation (Daft 2006).

An early contributor to Human-Relations theory is Mary Parker Follett who added a humanistic dimension to the study of organisations. Follet placed more value on people rather than techniques and believed that organisations had a social responsibility to their workers. Many of her ideas on conflict resolution, inclusivity and worker empowerment continue to be used in modern management today (Tonn 2003). Another contributor to the theory was Chester Barnard who believed organisations were systems of co-ordinated human activity. Barnard had an alternative view to the Scientific Management perspective of a manager as someone who gives orders. Instead, Barnard believed in the manager as a leader whose role was to promote workplace harmony and ensure the workforce cooperated productively (Hoopes, 2002). The person most associated with the Human Relations Approach is Elton Mayo, a Harvard University professor. In the 1920s Mayo was performing a series of studies called the Hawthorn Studies. The results of these studies challenged the principles of Scientific Management and marked the beginning of the Human Relations Movement (from which we derive the Human Relations Approach) (Grimes 2006).

The Hawthorn Studies (named after the factory where they took place) investigated a variety of working conditions and their effect on productivity. One of these studies, the Relay Assembly Test Room, focused on a small group (referred to as a primary working group) consisting of six women. The group’s productivity was monitored under a multitude of changing conditions and the studies revealed that output generally increased whenever a variable was altered. This was regardless of whether the variable adjustment was positive or negative. It was concluded that the size of the group itself had played a factor in the improvement. It appeared the group had developed the ability to self-motivate (Anonymous, 2007: Section 3). It was also suggested that the study itself had contributed to the increase. This phenomenon has come to be known as the Hawthorn Effect where productivity improves if a group or individual perceives they are receiving interest from management (Daft, 2006). The Bank Wiring Observation Room Study, revealed that a normal working group (this time there were fifteen people) falsified output records, opposed management change and deliberately engaged in ‘soldiering’, inhibiting their production and output to avoid increased productivity targets (Anonymous, 2007: Section 3).

The Hawthorne Studies popularised the Human Relations Movement and the results of their discoveries can be seen in modern management. Many of today’s successful organisations have efficiently implemented primary working groups (more commonly referred to as teams) and moved away from the larger normal working groups. Effective managers are more like leaders who facilitate a two-way channel between the upper and lower levels in the organisation and managers more actively demonstrate interest in their teams through regular employee reviews and appraisals. This Human Relations approach to the design of work and management benefits both the organisation and the employee through a better understanding of collective goals, concerns and ideas. Employees are more than simple machines set to perform mechanical tasks; they are the organisations’ best hope for success. The business environment is changing. The Industrial era has given way to what economic expert Charles Goldfinger refers to as an intangible economy where knowledge, brand and ideas are traded (Highdeal, 2002). In this new economy the potential of the employee is an organisation’s greatest asset and ‘tapping in’ to this potential is a major concern. Employees must be encouraged to achieve their maximum and motivation is the key.

In 1943, Abraham Maslow produced a theory of motivation based on studies into human behaviour. His Hierarchy of Needs focused on basic needs inherent to all individuals and arranged them by importance in the order of physiological, safety, love and belonging, esteem, self-actualisation. The theory suggested that each need must be satisfied before the following need becomes a motivation. At the most basic level are the physiological needs required to sustain life, such as the need to eat food. Following this, we all desire to be safe and secure (Grimes 2006). The Scientific Management approach to worker job design only fulfils these two basic needs. In fact, it plays on them, for workers at the time had no further motivation available to them and tolerated the restricted and monotonous working conditions so they could provide food and shelter to themselves and their families. The Human Relations Approach to worker job design continues to address Maslow’s theory of needs and picks up where the scientific approach leaves off. The emphasis on social groups satisfies the love and belonging and improves production through increased employee output. The esteem need is satisfied by a more attentive management approach (or the Hawthorn Effect). Finally, self-actualisation is accomplished through the setting and achieving of personal goals that represent improvement and progression for the worker and the business (Grimes 2006).

Frederick Herzberg, a major influence in modern motivation theory and creator of the Motivator-Hygiene theory. Herzberg suggests:

“The growth or motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility and growth of advancement. The dissatisfaction-avoidance or hygiene … factors that are extrinsic to the job include: company policy and administration, supervision, interpersonal relationships, working conditions, salary, status and security.”

(Herzberg, 1987: 9)

It is interesting to note that the dissatisfaction factors echo the core principles of Scientific Management. These include supervision (by managers), working conditions, salary (wage incentives) and status (managers are superior to workers).

The research referenced by Hertzberg is shown in Appendix A. The diagram shows the composite results of research involving 1,685 employees in a variety of different careers over 12 different investigations. Clearly, motivation is a key contributor to employee job satisfaction in present day business and should be considered in the design of work and management of staff. The principles of Scientific Management consider the incentive of salary as a sole motivator which, according to the diagram in Appendix A, represents only a small area of modern day motivation (Hertzberg 1987).

So if workers are motivated, appreciated and rewarded, and if they are given opportunity, responsibility and recognition, will they really innovate and become more productive? Does a Human Relations Approach to job design really demonstrate an improvement over job design based on the principles of Scientific Management? The answers can be found in the workplace practices of some of the most successful businesses today that have employed the Human Relations Approach to stunning effect.

Only 9 years ago Larry Page and Sergey Brin, Stanford University graduates started Google in a garage (Raphael, 2003). Now Google boasts a global collection of sales and engineering offices and over 6,800 employees (Carr, 2006). Page and Brin don’t just buy into the concept that a better workforce management means better business, they actively preach it. One employee states “Larry and Sergey are sometimes more interested in the people here than the product.” When recruiting they seek out team players and ensure a suite of benefits immediately await those they employee (Raphael, 2003). Fortune magazine lists Google as number 1 in their 100 Best Companies to Work For 2007 and lists a few of the many benefits including “free meals, swimming spa, and free doctors onsite” (CNN Money.com 2007). Google gets approximately 1,300 résumés a day but still has trouble finding the right staff (CNN Money.com, 2007). You need brains, motivation and great ideas to get a job at Google but in return you receive flexibility, appreciation and absolute trust to fulfill your job in the way you feel best. Google’s revenue was $6,138 million in 2005, it dominates cyberspace and is now a serious competitor to Microsoft (CNN Money.com, 2007).

Another of Fortune magazine’s 100 Best Companies to Work For is Starbucks Coffee. Starbucks (2007) has “always figured that putting people before products just made good common sense.” Their mission statement lists six guiding principles most of which re-enforce their Human Relations Approach. Top of the list is their desire to “Provide a great work environment and treat each other with respect and dignity.” (2007). Employees are referred to as ‘Partners’ and are offered a range of benefits including bonuses, health coverage, tuition fees, a share option scheme and significant discounts (Starbucks 2006). Starbucks also believes in promotion and recruiting from within. This combination of factors results in a staff turnover of just 15% as opposed to competitors 30%. All ‘partners’, regardless of rank are encouraged to spend time in store. Gordon Lyle, UK HR director at Starbucks claims to have spent three months on the shop floor (Personneltoday.com 2007). This is a far cry from the principles of Scientific Management which promoted a clear division between management and worker.

The business environment has changed significantly since the principles of Scientific Management were first implemented. Arguably, the principles were successfully applied to large scale, labour heavy, manufacturing but the manufacturing industry now produces shorter product runs with an ever changing variation of products. In addition, precision machinery now performs many of the tasks that used to be accomplished by the worker assembly line. It is possible that factory-based industries may benefit from the control and predictability of a standardised, procedure-based system but changes in legislation, worker rights and social influence all demand a more Human Relations Approach.

The principles of Scientific Management are outdated. This became evident in the 1980s when General Motors lost significant market share. The loss was blamed on outdated management methods yet these were the same methods that contributed to the success of General Motors when they so readily adopted the principles of Scientific Management some fifty years previously. As a consequence, General Motors had to undertake a critical reorganisation and management was replaced by a new team with a fresher approach (Oman, 2000).

Modern management can no longer focus solely on the organisation. Improvements in the standard of living and more plentiful job markets mean that employees are less concerned about job loss. If their needs are not met, they are more likely to change their job, leaving the organisation and taking their ‘potential’ with them. It is no longer enough to believe that motivation is dependent on the ‘carrot’ of performance-based salary incentives or that productivity is dependent on aggressive management and direction. Employees are now seeking other levels of reward within their roles. Achievement, advancement and responsibility represent core needs and elements of these must be built into the design of work and management. Modern organisations, such as Starbucks, have proved these concepts to be true and demonstrate contented staff and happier customers.

Organisations now operate in a new Intangible Economy that relies on an entirely different set of production factors including worker knowledge, teamwork, positive input, innovation and speed to market (Wikipedia, 2007). Google has dominated cyberspace by realising the importance of these fundamental concepts and implementing a workplace culture to support them. Taylor stated “…the best management is a true science, resting upon clearly defined laws, rules, and principles…” (1911) but in today’s business climate it is proved that a more humanistic approach can produce superior results.

There are many success stories where modern businesses have strategically implemented the Human Relations Approach to great advantage, but modern business is not the reason for its success. The Human Relations Approach is not reliant on social, political or economic climate; its roots are embedded in a clear understanding of the human psyche, what motivates us, compels us and satisfies our needs. The principles of Scientific Management had no reference to these needs and can therefore never satisfy or motivate the workforce to the same degree. From this we can conclude that the Human Relations Approach to the design of work and management of people represents a significant improvement over work designed and managed according to the principles of Scientific Management.