The environment of business

A fault with Fayol’s theory is that he assumes workers are compliant parts of the organisation and can be used for the organisations ends; in reality this cannot always be followed. Argyris (1957) suggested that if Fayol’s principles were followed employees would work in an environment where they would have no control over their working life, working in a passive manner to a short term perspective. This reduces workers to children where their work tends to cause or bring about psychological failure. Clearly this is unhealthy; it would cause a discontent workforce which in turn would affect the efficiency of the team.

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Frederick W Taylor has similar views to Fayol, he believed in the scientific method of job design, where tasks are created at the lowest possible level and staff are recruited to perform these tasks. Its scientific because he formulates tasks structurally and mathematically in order to increase productivity. Jobs were standardised and simplified where workers should conduct a minimum of movements to achieve these goals, this can be considered patronising, similarly to the child-like approach Fayol holds.

Taylor believed this would increase ‘piece work’ which is an incentive payment system which relates bonuses to the level of output which consequently gives the worker satisfaction and motivation. His theory is heavily criticised for being dehumanising and holding a lack of regard for workers psychological needs, which the human relations believe to be of upmost importance. His view is also flawed in that he underestimated the strength of worker alienation. His view is similar to Fayol’s in that his methods are reductionist.

Having said this, his work has had a major impact upon the manufacturing and productivity levels in the early and mid 20th century and there is still evidence today of ‘Tayloristic’ practice in business for example McDonalds, factories and call centres where near similar or identical outputs are required on a near-continuous process. The environment of business is a dynamic one, and many people criticise Fayol’s ‘prescriptive’ approach as flexibility and innovation is necessary for business and he doesn’t account for this.

It is widely believed that the classical school is built upon bureaucratic principles, thus ill equipped to embrace change and are far more suited to repetitive activities and known territory, clearly this is a hindrance as it can make business stale and unexciting. By recognising the need for a dynamic approach organisations have begun to seek people with leadership qualities as opposed to mechanical management or administrative skills. Burns and Stalker (1961) researched into why some companies were able to cope with changes in their environment, specifically dynamism in their product markets, while others were inept and incapable.

They found the successful innovators had developed an ‘organic’ structure whereas those with ‘mechanistic’ approaches were less able to adapt. The classicalist’s main concern was to suggest efficient methods of control and command, how to allocate tasks, reward and structure organisations. Emphasis was placed upon the need for bureaucratic structures and processes. This included clear hierarchal relationships, detailed job descriptions and clear procedures. Weber’s theory was predominated with the importance of bureaucracy; he didn’t support it yet felt it was inevitable due to the constructs of modern society.

He identified three sources of authority; charisma, tradition and rational-legal. In modern industrial society rational-legal is the only legitimate authority; it includes specialisation, hierarchy of authority, system of rules and impersonality. Many disagree with this view and feel this method ignores the role of the ‘charismatic’ figurehead. Chester Bernard 1938, part of the human relations school, viewed authority differently, he believed it was not imposed from above but granted from below.

This is a fundamental difference between the classical theorists who believed the manager had authority over his/her subordinates and the human relations school. Studies have found that the amount of control a person feels they have over a situation can dramatically affect the amount of motivation and commitment. It is viewed by the Human Relations school of thought that people want to be involved in decision making in order to feel valued and respected, some disagree with this and feel the human relations theory overestimates the desire of workers to participate in decision making and occupational self awareness.

It is viewed that this bureaucratic model served workers well in its day, as long as tasks were relatively simple, straight forward and environmentally stable it worked. However, for the last 20 years this theory has become less and less relevant to modern work because the world is rapidly changing, technology is improving, there is global economic competition, an educated and skilled workforce, demanding consumers and many more factors that make this method simply too slow, unresponsive and incapable of change or innovation which are predominate factors in the efficiency and success of a business, (David Osborne and Peter Plastrick 1992).

The human relations theory reject the classicalist’s machine like manner in favour of an emphasis on people which involves the broader issues of motivation, autonomy, trust and openness in managerial and organisational matters. This clearly opposes Fayol’s approach where everything is regimental, ordered and de humanised. Management is frequently defined as ‘achieving results through other people. ‘ Surely therefore an understanding of human behaviour is vital for this to be carried out successfully. Chester Bernard (1938) proposed this theory of organisations, arguing that they were cooperative systems.

He believed that efficiency is how effectively the organisation satisfies the motifs of the individual, if this is a success whilst continuing to reach its explicit goals co-operation amongst workers will last, thus a more efficient work force in the long run; there is more of a focus upon informal organisation. There is more of a focus on the workforce itself being a critical factor in efficiency and organisational success, there is now in modern practise a need to attract, retain and motivate staff to maintain a skilled workforce.

Elton Mayo’s Hawthorne study in the late 1920s, found that motivation to work, productivity and quality of work are all related to the nature of the social relations among the workers and their boss reflecting that output is influenced by social factors, people act better as members of social groups not individuals. The classicalists suggested ‘one best way to manage’ which is known as ‘structural universalism’ they believed their principles of how to manage could be applied to all organisations universally regardless of size, environment and other contextual factors.

The contingency theory disagreed with this idea. It has been recognised in modern business that contextual factors influence the efficiency and effectiveness of managing and organising. This idea originated from Joan Woodward’s research (1965) which found that both the level and type of technology influenced the structure of the unit such as span of control, centralisation of authority and the formulation of rules and procedures.

Further research carried out in the early 1960s and ever since has lead to the rejection of the ‘one best way’ to organise in favour of the view that there are a variety of best ways, each with potential of success or failure. To summarise this theory suggests management practise and other aspects of organisations are dependent upon a variety of internal and external situations. They suggested this is why Taylor’s scientific theory and Weber’s bureaucratic theory failed as it ignored these contingency factors.

The human element in organisational activity is recognised by contingency theorists as a vital influencing factor upon organisations and largely ignored by early classical management theorists. “The best way to organize depends on the nature of the environment to which the organization must relate” (William Richard Scott 2001) Each ‘school’ of management holds a different emphasis and perspective on how a manager should behave. Management cannot be learned, hence the problem with developing and testing theories, there are conflicting ideas because fundamentally we cannot predict human behaviour.

Managers need to recognise that early classical theorists such as Taylor and Fayol remain partially embedded in our collective understanding of management and therefore remain influential in many aspects. They should be aware that a wide variety of styles exist and they might seek to develop flexibility and self awareness if they value and utilise these different styles in different circumstances appropriately. Individuals need to appreciate when leadership qualities such as developing and disseminating are appropriate and alternatively when managerial skills such as negotiation and transaction are required.

References: Argyris and Donald A. Schi?? n (1974) Theory in Practise, Increasing Professional Effectiveness. USA; California, Jossey Bass Inc Ian Brooks. (2006) Organisational Behaviour- Individuals, Groups and Organisation 3rd edition. Spain: Graficas Estella Charles Handy. (1993) Understanding Organisations 4th edition. England; St Ives: Clays Ltd Henry Mintzberg. (1994) The Rise and Fall of Strategic Planning. Great Britain; Dorchester; Dorset Press