Impact of Taylorism and Fordism on Contemporary Management Approaches and Practices - Term Paper Example

Impact of Taylorism and Fordism on Contemporary Management Approaches and Practices Total Number of Words: 2,021 Introduction In general, both Taylorism and Fordism had a significant impact in the development of models applicable for work organization (Henderson, 2011, p. 7). Back in 1980s to 1990s, a lot of large-scale manufacturing firms had been using the concept of Taylorism and Fordism in managing work organizations (Henderson, 2011, p. 8). In line with this, the main purpose of this study is to thoroughly discuss the impact of Taylorism and Fordism on contemporary management approaches and practices. There are disadvantages in the application of Taylorism and Fordism framework. For instance, one of the limitations of Taylorism is the absence of autonomy and “lack of flexibility” (Fruijt, 2003, p. 4) which can make jobs become “repetitive” and “boring” (Lucey, 2005, p. 65). On the other hand, Fordism is being criticized for being ineffective when managing business organizations during slow economic growth (Amin, 2003). Even though a lot of modern companies have decided to move away from the use of Taylorism and Fordism when managing people, it is assumed that some forms of management practices and approaches that were introduced under the models of Taylorism and Fordism are still very much applicable in today’s management approaches and practices. To help the readers gain a better understanding of the subject matter, the similarities and differences between Taylorism and Fordism will first be tackled followed by critically analyzing the effects of Taylorism and Fordism on the present-day management approaches and practices. Similarities and Differences between Taylorism and Fordism The models of Taylorism and Fordism were very much applicable in managing large-scale manufacturing firms back in 1980s (Henderson, 2011, p. 8). Furthermore, both models of Taylorism and Fordism focused on how to increase mass production efficiency (Tatli, 2008; Amin, 2003, p. 6; Fruijt, 2003). Considered as a traditional strategy used in management planning, Fordism introduced the concept of “just in case” approach (Alfasi & Portugali, 2004; Amin & Tomaney, 1995, p. 206). In line with this, Fordists’ “just in case” approach is all about stockpiling either parts or finished goods (Waters, 2013, pp. 80 – 81). Likewise, to reduce employees’ turnover rate and work resistance, Henry Ford decided to introduce the need to pay employees a higher wage for their services (i.e. “five dollar day”) (Vidal, 2011). Fordism also requires the need to separate business ownership with management control, decentralization, acknowledgement of labour unions, collective bargaining, and the distribution of wages based on productivity growth among others (Amin, 2003). Also known as “scientific management”, Taylorism expanded the role of managers when it comes to “planning” and “controlling” the business (Skrabec, 2003, p. 4). Specifically the concept of Taylorism aims to improve “labour-productivity” by developing a more ideal work-related method which can result to a more “total planning and control” of work environment, selecting and training the best people who will be assigned to complete a given task, and taking responsibility to plan and prepare work through management control (Frey & Osterioh, 2002, pp. 147 – 148; Lucey, 2005, p. 64). To meet its goal, Taylorism adopted the use of extrinsic motivation to improve the overall performance of a business organization (Frey & Osterioh, 2002, p. 147). In relation to contemporary work approach and practices, there are quite a lot of differences between Fordism and Taylorism. For instance, unlike Taylorism, the application of Fordism theories in contemporary work environment promotes a more efficient mass production (Noon, Blyton and Morrell, 2013, p. 145; Noon and Blyton, 2002, p. 149). On the other hand, even though the concept of Taylorism on contemporary work seems to be perfect, its working condition has be criticized for being uninviting, dehumanizing and unpleasant since workers are required to perform monotonous tasks (Noon, Blyton and Morrell, 2013, p. 143; Lucey, 2005, p. 65; Noon & Blyton, 2002, p. 146). Effects of Taylorism and Fordism on the Present-Day Management Approaches and Practices Since 2000s, globalization has triggered a lot of changes in the development of contemporary management strategies. Even though the concept of Taylorism and Fordism has been criticized for being ineffective in the modern business world (Lucey, 2005, p. 65; Amin, 2003), some parts of these two types of work models are still part of the modern-day management practices. To ensure that the readers will gain better understanding on how Taylorism and Fordism has affected the development of contemporary management approach and practices, the impact of Taylorism will first be tackled followed by discussing the significance of Fordism in modern management. Impact of Taylorism on Contemporary Management Approach and Practices For instance, it was mentioned earlier that Fredrick Taylor’s “scientific management” introduced the need to select and train the best people who can be assigned to complete a given task (Frey & Osterioh, 2002, pp. 147 – 148; Lucey, 2005, p. 64). In reality, the practice of educating and training potential candidates for middle management position is still very much a part of the modern management approach and practices. Based on the study of Greenidge et al. (2012), the recruitment process and training practices of both small and large firms vary from one another in the sense that small-scale businesses are most likely to use informal recruitment strategies and training practices. It simply means that training plays a significant role after the contemporary HR managers have conducted their final recruitment and selection processes (Greenidge et al., 2012; Kalargyrou & Woods, 2011). In general, there are quite a lot of advantages when it comes to extending effective training and development programmes for employees. In relation to the need to increase employees’ job satisfaction, Kalargyrou and Woods (2011) mentioned that the process of conducting an effective training can help increase the quality of customer service. In some cases, increasing the quality of customer service is possible by decreasing employees’ turnover rate (Kalargyrou & Woods, 2011). On the other hand, it is also possible that the process of decreasing employees’ turnover rate could somehow increase organizational performance (Hancock et al., 2013). To further improve the training competencies of modern-day companies, HR managers should promote not only the practice of teamwork and active listening but also inspire and motivate employees to participate in the training programme (Kalargyrou & Woods, 2011). Taylor also gave importance to the concept of management planning and controls (Frey & Osterioh, 2002, pp. 147 – 148; Lucey, 2005, p. 64). In general, the traditional principle of Taylorism on mass production is still very much applicable in fast-food industry (i.e. McDonald’s and Kentucky Fried Chicken (KFC)) (Allan, Bamber, & Timo, 2006). This statement is true in the sense that most of the fast-food industry today requires each employee to perform a more “simplified” and “routinized” jobs (Allan, Bamber, & Timo, 2006, p. 404). Specifically the term “off-shoring” or “offshore outsourcing” is defined as “the practice of outsourcing suppliers to foreign countries” (Ramanathan, 2008, p. 16). Few years after the era of globalization, off-shoring of various services became increasingly dominant (McCann, 2013). To benefit from wage arbitrage, a lot of business people are engaging themselves in offshore outsourcing. To be able to compete in the global markets, capitalization during the era of globalization requires the need to adopt a more flexible management planning and control (Westra, 2010, p. 64). The practice of management planning and control is still very much evident in modern businesses except that the concept of management planning and control in contemporary management approaches require more flexibility as compared to traditional Taylorism (Westra, 2010, p. 64). In line with this, Griffin (2012, p. 444) explained that the process of integrating more flexibility in management control can increase the company’s ability to respond to environmental changes. For instance, having access to a flexible enterprise information system (EIS) will allow the managers to manipulate internal data or perform specific transaction needed by either the business management, customers, or the company’s accredited suppliers (Ross, 2004, p. 756). Through the use of EIS, managers can easily gather internal data which can be use as a guide in decision-making (i.e. financial statement, sales, operational costs, customer service quality, etc.) (Ross, 2004, pp. 750 – 753). Doing so will increase the managers’ ability to effectively plan and control the business operations based on the company’s goal and objectives (Griffin, 2012, p. 444). In general, IT outsourcing which requires the need to share and transfer decision-making authority or management control to external suppliers is a good example of a more flexible management planning and control (Ramanathan, 2008, p. 16). To effectively manage business operations, the application of tactical supply chain system which is designed with more flexibility option is highly recommended (Esmaeilikia et al., 2014). In line with this, Esmaeilikia et al. (2014) explained that the process of designing the supply chain system with more flexibility option can protect the modern businesses from environmental uncertainties. Impact of Fordism on Contemporary Management Approach and Practices Earlier, it was also mentioned that Ford introduced the concept of “just in case” approach (Amin & Tomaney, 1995, p. 206). Although not applicable to production and management planning, Alfasi and Portugali (2004) explained that the concept of just-in-case is still very much applicable in modern urban and regional planning. Based on experience, the practice of stockpiling either parts or finished goods increases the company’s risks of being left out with obsolete items. For this reason, most of companies today refuse to adopt the concept of “just in case” approach in business. With regards to the impact of “just in case” approach in contemporary management approach and practices, most people who adopted the use of “just in case” approach were able to experience and learn about the disadvantages of using this particular planning approach. Instead of stockpiling either parts or finished goods, most business people today strongly support the application of “just-in-time” approach (Alfasi & Portugali, 2004). In doing so, SMEs and large-scale companies are able to reduce not only unnecessary expenses in additional manpower but also unnecessary expenses related to warehousing. Ford introduced the idea of paying employees a higher wage for their services (i.e. “five dollar day”) (Vidal, 2011). In general, the concept of “pay” has inspired a lot of people to examine the significance of paying higher wage and salaries to employees’ overall work performance (Boachie-Mensah & Dogbe, 2011; Makri, Lane, & Gomez-Mejia, 2006). For instance, Boachie-Mensah and Dogbe (2011) conducted an exploratory case study with regards to the impact of using performance-based pay as a motivational tool for increasing the organizational performance. Based on the research findings, Boachie-Mensah and Dogbe (2011) found out that the application of performance-based pay has a limited impact on employees’ performance and that motivational impact of higher salary can negatively affected due to inaccurate performance appraisal. On the contrary, Makri, Lane and Gomez-Mejia (2006) presented empirical evidence suggesting that the use of both outcome- and behavioural-based performance criteria when it comes to rewarding the CEOs can increase their overall market performance. With this in mind, Ford’s “five dollar day” concept has motivated people to think more about whether or not paying employees a higher wage could really motivate them to work better. Conclusion Both Taylorism and Fordism has either a direct or indirect impact to the development of contemporary management approach and practices. Even though Taylorism and Fordism has introduced a lot of concepts which can be use in increasing the overall business performance, some of these concepts are no longer applicable in today’s business world. Although some concepts that were introduced by Taylorism and Fordism are no longer applicable in today’s business world, one cannot deny the fact that some thoughts and ideas that has once shared by both Taylorists and Fordists has indeed opened the eyes of most academic people to test its accuracy and applicability in today’s contemporary business approach. For instance, Taylor emphasized the importance of management planning and controls (Frey & Osterioh, 2002, pp. 147 – 148; Lucey, 2005, p. 64). Due to globalization, the traditional management planning and control strategies are no longer applicable since most contemporary businesses need a more flexible management planning and control system. 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