Excellence organisation should be managed from a unitarist perspective
The industrial revolution which begins in England in the late 18th century (1) had change the structure of a business. Prior to industrialisation, most of the economic activities were based on agriculture which was managed on their own, and so, only simple management technique was necessary. By the 19th century where there was a rapid growth in industrialisation, the management teams faced new challenges where a more complex management technique was required to maintain the industrial relationsÂ Â . Bigger business required more workers; hence there is higher tendency of conflicts occurring between the managers and the workers and also among the workers themselves.
Alan Fox’s (1966) highly influential point of view on the employment relationships described three ideal frames – pluralist, unitarist and radical where people usually just talk about pluralism and unitarism. The core of unitary is that they perceive an organisation as an integrated and harmonious system, viewed as one happy family with a common goal and regard conflicts as a failure (6) where as pluralism involves recognition that stakeholders in an organisation may have different goals and interests (7) and conflict is seen as inevitable. The issue of which type of organisational management frame that is the best arise because of the difference in the people’s opinion. Some people see that business managed by unitarist gives in more profit and increases its efficiency and productivity while others think pluralism gives a better result. The following essay will be discussing a few examples of organisations considered to be excellence and we will look at how these organisations manage their industrial relations.
UNITARY MANAGEMENT EFFECT
Most of the successful and innovative companies which have been studied as human resources management (HRM) models in the USA are non-union and use sophisticated HRM technique targeting the individual employee (Foulkes 1980) (5). This is in line with what Alan Fox had stated an assumption where there are common interests across workers, managers and shareholders (non-union) and applying humanistic approach to conflict resolution which focuses on individual (4).
In the 1890s, Frederick Winslow Taylor of the Bethlehem Steel Company founded a new philosophy of management by applying job specialisation, timed task and paying bonuses as incentive to those who achieved targeted production. This was the beginning of time and motion studies and of the scientific management movement (8). One of the principles of scientific management introduced by Taylor is that they have to heartily cooperate with the men in order to ensure all of the work being done according to the developed principles (9). This principle follows the basic assumption of unitary which is a common interest among workers, managers and other stakeholders. They naturally and therefore ‘should’ work together, hand-in-hand, as one-striving towards shared, mutual goals (10). Taylor’s new method of managing workers and its production brought a significant change to the efficiency, productivity and the earnings of the company. However, the workers thought that by increasing their efficiency and productivity, fewer workers would be needed, and hence redundancies occurred. Then, the company can increase its profit by minimising the cost on wages paid. Taylor has the opposite thoughts and it was proven that when efficiency and productivity increase, more goods can be produced with the existing resources. This means, goods can be produced in a lower cost. With a lower price, the demand for the goods would be increase and hence, more workers are required to meet the demand, not less. It is obvious to see that the scientific management with unitary basic benefited both parties, the company; by having more profit from increasing sales and revenue, and the society; by increasing their purchasing power (11).
ELIMINATING THE NEGATIVE IMPACT OF CONFLICT
Generally, as the term itself, conflict is seen as negative force and unitary believe that it has to be avoided. They regard the negative impacts of conflict can be eliminated by applying unitary method of managing its industrial relation. The deepest underlying cause of conflict is the distribution of wealth and power. For example, the employers and employees have a different interest on wages. Wages-related to employees’ wealth; are part of the employers’ costs which they must seek to minimize. However, they are the main source of employees’ income which of course they want to maximize (12). The misused of power by the manager causes the employees to ‘retaliate’ which will then lead to conflict in industrial relationship.
Strike is one of the examples of resistance by the employees when there are conflicts between them and of course it does affect the economy and society. In April 2010, The British Airways’ cabin crew strike contributed to a slight fall in the number of passengers passing through the six UK airports (13). Another strike in Glasgow in September 2008 due to pay battle causes council services across Scotland to paralyse and affecting more than 40,000 children. Their parents were forced to take time off work or organise emergency childcare as the city’s 169 primary schools and 126 council run nurseries were closed. Bin collections and cemetery services were also affected as workers join the dispute (14). Cooper Tire & Rubber Co. also being in the same boat as British Airways’ when it sank into a second quarter loss as disruptions from a month long strike and hurt net by $9 million, or 15 cents a share in 2005 (15).
In each incident, the root of the problem is the conflict of interest in the organisation. They do not have a common goal and everyone is struggling to ensure that they get what they want. The employees form a union to fight for their right and interests while the managers stay, and hold on to theirs. That is why unitary ways of managing an institution is said to be the best way to adopt to avoid these conflict effects. Trade unions are deemed as unnecessary and conflict is perceived as disruptive (6).
DOES IT FIT ALL MANAGEMENT PROBLEMS?
Managing an institution in a family-like-organisation seems to be healthy and harmony without any disagreement. However, not all organisations are suitable with unitary approach especially when it involves a large number of workers. They may have different degrees of loyalty, commitment and willingness to give their all or withhold some of themselves from absorption into the ‘unitary culture’ (16). Another key feature of unitary is that the employees have to unquestioningly adopt the assumptions, goals and language of management (17). In a very large organisation, the employees especially the semi-skilled and unskilled labour i.e. blue-collar workers have almost zero opportunity to voice out any disagreement and they are expected to follow the goals set by the manager. Therefore, the ‘common goal’ is not based on everyone interest’s, but based on the power that one hold in an organisation.
In 1914, despite a dramatic success for Henry Ford in his Ford Motor Company and for the millions of Americans who could now afford cars, the workers who actually produced the cars on the other hand, suffered from many human and social problem resulted (17). Ford had his own goal; to reduce the cost of production, hence, ignoring other interests. He controlled everything especially the production line and brought him into conflict with managers, who often were fired when they disagreed with him and had caused many talented people left Ford to join other car companies (17). Instead of being unitary, Ford managed his business like a ‘communist’ who use his totalitarian power in the company. His bossy attitude has caused him to face the problem of high worker turn over, absenteeism and discontent. To solve this, he then increased their wages and cut the working hours. Another principle of unitary is seen here; Ford focusing on conflict resolution techniques rather than examining the underlying cause for conflict (17).
It is obvious that the conflict still exists in the organisation even though unitary management was applied in the company. The difference is that, the conflict is not visible as the employees do not have any chance to say a word or their opinion is not being acknowledged.
CONFLICTS AND UNIONISM
Edwards suggests in his book that ‘structural antagonism’ might be a better term than conflict, because conflict can imply that workers and managers are constantly visible at war which in practice they don’t (12). Even though most people regard conflict as negative, in certain cases, it does help in improving the business decision made by the managers as they do not necessarily act rationally and in interest of all members of the organisation.
Conflict arises when there is a disagreement between two parties. In 1964, the Report of the Royal Commission on Trades Unions and Employers Associations (The Donovan Report) recommended pluralism as a pragmatic, effective alternative to the unitarist approach (18). By listening carefully to the opponents, people within the organisation may think deeper about the issues discussed and later, make a better decision. Those who disagree about procedures to accomplish a goal may come up with new and better procedures (19). Or at least, by taking the opinion into consideration, the pros and cons will be discussed, final decision is made together and conflict has been handled efficiently.
If conflict is left without attention, employees are likely to unite and form a union. Trade union is said to be resistive, causing the work to be inefficient, delay in production and affect the society as a whole. On the other hand, most experts agree that unions have had a major impact on the management process in American industry. Interestingly, the union’s impact and the collective bargaining process has on management is often positive (20). We can see that, conflict can be constructive and the family-like environment still can be maintained if conflict is being tackled wisely with every decision is made in the interest of all members.
Toyota shows a good example of excellence organisation with its astounding reputation. Toyota’s annual profit at the end its fiscal year in March 2003, was $8.13 billion- larger than combined earnings of General Motors, Chrysler and Ford, and the biggest annual profit for any auto maker in at least a decade. Its net profit margin is 8.3 times higher than the industry average. It has its own strategy and technique in handling the business called The Toyota Way and creates the ideal environment to implement these techniques and tools by;
fostering an atmosphere of continuous improvement and learning
customer satisfaction i.e. producing quality products
getting the quality right the first time
grooming leaders from within rather than recruiting them from the outside
teaching all employees to become problem solvers
growing together with suppliers and partners for mutual benefit
From what Toyota has done, we can see the mixture of unitary and pluralism. They have a shared vision but the top management allows them to think out of the box to solve the problem they faced. It shows that they allow conflict to exist and the workers are being trained to solve the problem. Toyota has its own strategic weapon made famous to the manufacturing world such as just-in-time, kaizen, one-piece flow, jidoka and heijunka where all these strategic are successfully implemented. Therefore, we can see here that excellence organisation is not necessarily managed by unitarist perspective.
Today, moving towards more competitive business market, most of the excellent organisations are manage by combination of both, the unitary and pluralist. The managers and workers shared a common goal, work as a ‘happy family’ and at the same time allowing conflict to exist. To keep it under control, problem is solved by frequent meeting and discussion so that everyone has a chance to give an opinion in order to achieve the goal. Suggestion box, evaluation form and team work encourage the workers to voice out their opinions and work on what they think is best for the company. Improvement in education system also has been made to develop the culture of teamwork, enhance communication skills and encourage students to be more creative and innovative. So, it can be concluded that the pure unitary management is not relevant anymore and more flexible environment is created to allow everyone to give in their best.