Business Organizations - Essay Example

?Business Organisations Table of Contents Table of Contents 2 0 ical School of Organisation and Management 3 2.0 Applicability and Relevance of the ‘School of Thought’ in the Modern Era 7 3.0 Challenges Currently Facing by the UK Management 8 References 10 1.0 Classical School of Organisation and Management In the modern perspective, “management” is perceived as science as well as an art, which provides a systematic, competitive and highly efficient outlook to the existence of the organisation. However, the development of the modern insights regarding organisational management has witnessed various changes due to the intrusion of various models and thoughts which are comprehensively termed as the Classical Schools of Management. Classical school of management came to light in 20th century. The classical school of organisation and management thought was mainly focussed on the overall development of organisations. It comprises of three theories of management, i.e. the ‘Scientific Management Theory’, the ‘Bureaucracy Theory’ and the ‘Administrative Management Theory’. The ‘Scientific Management Theory’ is based on well developed, specifically defined and definite principles of management. Such theories are often observed to assist the effectiveness of management in the organizations in its current status and in future as well (Agarwal, 1983). In the scientific management theory, managers are responsible for enhancing the productivity of the organisation. This theory was introduced by Frederick Winslow Taylor, who is regarded as the “Father of Scientific Management”. This theory was mainly concerned with its implication in the American Economy when it faced limited competitive productivity along with GNP growth. Subsequently, four principles of “Scientific Management” were developed by Taylor. These are as follows: The development of scientific management methodologies The responsibility must be there on the part of managers while selecting, developing as well as training the employee There must be cooperation from managers towards employees in order to make assure the methods of ‘Scientific Management’ It is important for manager to get involved in the task assigned to the employees which in turn shall strengthen the employer-employee relationship All of these four principles significantly support the managers to resolve problems related to the productivity of the organisation. With its virtues, these principles became extremely popular in the organisations of America which later influenced the business sector of Europe as well (Hartman, n.d). The “Bureaucratic Theory” was put forward by Max Weber which largely influenced the management philosophy of organisations in the 20th century with its emphasis on the organisational structure (Agarwal, 1983). According to the assumptions of the theory, the higher level authority would control and supervise the lower level in the hierarchy; the employees in the organisation must have requisite skill to be expertise in a definite task as per the ‘division of labour’. Moreover, the ‘rules and regulations’ in the organisation must be in a standard manner in order to facilitate coordination. There must also be ‘impersonal relationship to be existed in between managers and employees’ so as to develop logical decision making process in the organisation. The competency level needs to be high as this would facilitate to remove biasness while hiring in addition to promoting the employees. It is essentials for an organisation to maintain the complete records of the entire activities in the organisation (Hartman, n.d). The “Administrative Theory” was proposed by Henri Fayol. This theory was later recognised as Management Process School as it entails that management is a continuous process that can be evaluated by its functions. Because of the fact that the theory considers almost every aspect of management, it was able to gain relevance in all levels of management and in different types of organisations (Agarwal, 1983). In this theory, Fayol had developed fourteen principles which were related to management which included ‘division of work’, ‘authority and responsibility’, ‘discipline’, ‘unity of command’, ‘unity of direction’, ‘subordination of individual interest to general interest’, ‘remuneration of personnel’, ‘centralization’, ‘scalar chain’, ‘order’, ‘equity’, ‘stability and tenure of personnel’, ‘initiative’ and at last ‘esprit de corps’ (Hartman, n.d). The first principle of ‘division of work’ implies distributing the work among the employees may result in better efforts. ‘Authority and responsibility’ in the theory means that the managers have the right to instruct their subordinates and as a result responsibility is developed among the managers. ‘Discipline’ results in the respect and obedience between the management and the employees towards each other based on certain agreement. ‘Unity of command’ refers to the orders given to the employees from the higher authorities. ‘Unity of direction’ means activities in the organisation focussed on developing central authority along with the flow of direction. ‘Subordination of individual interest to general interest’ refers to as the interests of an individual or group of employees which tend to be inferior to the organisational interests. ‘Remuneration of personnel’ states that there must be satisfactory remuneration policies for every individual working for the organisation. ‘Centralization’ means the best use of manpower in an organisation (Hartman, n.d). In the “Scalar Chain”, it is referred that the organisation’s chain of authority comes down from the highest level to the lower level. The term ‘Order’ in this theory states that appropriate personnel as well as materials are essential for smooth functioning of the organisation. Furthermore, according to the theory, there must be ‘equity’ in organisation as it results in the effective accumulation of both justice and organisational functions. It is also necessary to retain stable workforce as it may lead to maximum productivity in the organisation as the organisation growth is based on the stability of the workforce. ‘Initiative’ depicts that in making successful organisations there must be effective contribution from the part of employees. Last but not the least, ‘esprit de corps’ states that effective communication must exists in an organisation in order to build team spirit among the employees and other members (Hartman, n.d). 2.0 Applicability and Relevance of the ‘School of Thought’ in the Modern Era The ‘School of Thought’ is applicable for the study of management in the organisation. This thought is based on different employees working with different organisations. The school of management is still relevant and are followed in contemporary business organisations. Scientific management theory has different effective principles that are considered as valid in the organisation’s management process. Thus, the influence of this theory was great in the 20th century (Reference for Business, 2011). Scientific management theory assists the organisation to enhance its productivity in the 21st century. This theory provides various incentive schemes which were extensively studied and used by the organisations. In the present scenario due to the application of this theory there was a continuous improvement in the working conditions of the organisations (Lucey, 2004). Due to its contributions in several areas of management practices, such as human resource and technological aspects it is termed valid in today’s organisations. Bureaucratic theory also has great influence on the organisational operations, i.e. while taking various decisions related to the management. In administrative theory, the principles of Fayol are relevant in the principles and process of management. These principles provide greater value when applied to the management theory of an organisation (Reference for Business, 2011). Though these theories have been criticised but they are in great use in modern scenario due to its strong theoretical explanation between human resources and organisations. 3.0 Challenges Currently Facing by the UK Management In the present scenario, business organisations face several challenges while managing its functions in a competitive and systematic manner. These challenges can be observed in various industries and relate to various issues of management. Four challenges act as a major role in the financial service organisation in UK and those may include regulatory issues, human capital, innovation as well as business models and growth (Neely & Adams, 2011). Notably, the front line managers face various challenges while handling the human resources of an organisation. The front line managers are bestowed with the task of human resource managers, such as dealing with absenteeism, discrimination and harassment, interpersonal relationship with employees, incentives as well as conflict resolution. Thus, it emerges as a great challenge on the part of front line managers to handle such situations in the competitive environment (Business Link, n.d). Program Managers also face various challenges in business functions as it rise into a conflicting situation due to misbalance. These challenges can be identified in terms of recruiting, hiring and developing the employees’ skills in order to develop the future performance of the company. Moreover, the rapid change in organisations may lead to strong leadership approach from the part of manager. The sudden change management can also be identified as a great challenging task for the employees. As a consequence the employee turnover rises and the management faces challenges in retaining their employees (Wilton, 2010). In the modern context, the generation X and generation Y employees (i.e. the employees belonging to the young generation) are marked as essential to provide competitive growth to the organisation. But in the realistic practices, it is quite difficult to retain the employees of generation X and generation Y. Thus, it becomes a difficult task for the managers to implement such methods so as to hold these employees in the organisation for long (Wilton, 2010). In order to increase the productivity of organisations, managers often provide training facilities to the employees with the purpose to develop their skills. It is in this context that the implication of classical management theories emerges as a challenging task for the managers in the modern perspective. The contribution of the management and the employees of an organisation are considerably significant to increase the efficacy of the organisational operations. With every organisation striving for development and efficacy, the modern business environment is expected to grow more competitive and complex. However, the execution of such management principles and processes can also be recognised as a challenging task for the management in the modern context (Wilton, 2010). References Agarwal, D. R., 1983. Organization and Management. Tata McGraw-Hill Education. Business Link, No Date. Problems Faced By Front-Line Managers. Supporting Front-Line Managers. [Online] Available at: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1084186734&type=RESOURCES [Accessed March 25, 2011]. Hartman, W. S., No Date. The Classical School. Management Theory. [Online] Available at: http://www.aom-iaom.org/article_hartman.pdf [Accessed March 25, 2011]. Lucey, T., 2004. Elst Mis 9e. Cengage Learning EMEA. Neely, A. & Adams, R., 2011. What Are the Challenges Facing Managers Today In the UK? Cranfield University. [Online] Available at: http://www.som.cranfield.ac.uk/som/som_applications/somapps/contentpreview.aspx?pageid=13273&apptype=think&article=229 [Accessed March 25, 2011]. Reference for Business, 2011. The Classical School. Management Thought. [Online] Available at: http://www.referenceforbusiness.com/management/Log-Mar/Management-Thought.html [Accessed March 25, 2011]. Wilton, N., 2010. An Introduction to Human Resource Management. SAGE Publications Ltd. Read More