Organization and Management Theory - Report Example

Organization and Management Theory of the of the Table of Contents Introduction 3 Background 3 Objective of the Report 3 Rationale of Report 3 Classical Approach 4 Scientific Management Theory of Frederick W. Taylor 4 Criticism of Taylor’s Approach 4 Administrative Management Theory of Henri Fayol 5 Bureaucratic Management Theory of Max Weber 6 Human Relation Approach 6 Theory of Elton Mayo 6 Douglas McGregor Approach of Theory X and Theory Y 7 Hierarchy of Needs Theory of Abraham Maslow 7 Herzberg’s Two Factor Theory 8 IBM and Classical Approach 9 TCS and the Human Relation Approach 9 Infosys and Human Relation Approach 9 Conclusion and Recommendation 10 References 10 Introduction Background Management theories are referred to the set of ideas or thoughts which set forth common rules of managing an organization or business. Management theory deals with how supervisors and managers relate to the companies in terms of their goals, the execution of objectives, and how to encourage the staffs so that they can do well for the success of the enterprise. The theories of management are implemented by the managers to increase the productivity and to improve the service quality of the organization. They utilized combination of hypothesis in order to execute strategies, depending on the function of organization, and workplace (Koontz & O’Donnell, 1984). Organization theory refers to the study of designs and structures of the organization, relationship of companies with external environment or atmosphere, and the study of behavior of supervisors and managers within organizations. It suggests methods in which the companies can cope up with the rapid change (Lynch, 1983). The organization and management theories which are employed in today’s management are the Human Relation Theory and the Classical Theory. Objective of the Report The objective of this report is to show the various types of management and organizational theories which are applied in the organizations and how these approaches have an effect on the industrial efficiency. It will further focus on the fact that how human nature can be understood in the companies through the application of different human relation approach. Rationale of Report The rationale of the report is that, by applying the classical and human relation approach how companies can maximize their profit and aim for high interest of labor. The report will highlight on the fact that how different approaches of organization and management theories are applied in the companies. Classical Approach Scientific Management Theory of Frederick W. Taylor Frederick Winslow Taylor scrutinized management logically in order to find out the most efficient method to carry out a job i.e. “one best method” to perform the job or work. The main rationale behind the Taylor approach is to develop the industrial efficiency and the main purpose is to maximize the prosperity for every staff (Taylor, 2006). While laboring in steel industry, he scrutinized the occurrence of workforce, deliberately functioning well underneath their capability known as ‘soldering’ (Martinich, 1997). Taylor ascribed soldering to two reasons: the most normally held conviction among employees was that, if they give more production then fewer workforces would be needed and employment would be reduced; if they get remuneration in terms of the quantity generated by them, then they have fear that administration will diminish the per unit pay in case the quantity enhanced. According to him, scientific administration of job was more resourceful than the ‘initiative and incentive’ method of motivating workforce. Taylor executed research, which is named as ‘time studies’ and also called as ‘time & motion studies’ in order to logically determine the most excellent way to execute a job. He make use of the stop watches in order to discover the capability of workers. The approach of scientific management is vital in the modern day management due to the reason that it helps to choose workers with proper capabilities necessitate for each job; encourage workforce by scheduling their task; and exterminate interruptions and provide wage incentives to workers for bigger output (Martinich, 1997). Criticism of Taylor’s Approach The major criticism of this approach is that his remuneration system could dehumanize the place of work as well as reduce employees to little further than drones. Theorist recognized that Taylor’s view of encouraging workforce were narrow and inadequate and also did not identify the variance among the persons. They also argued that his approach did not comprehend the social viewpoint of work as well as higher prerequisite of employees and also disregarded their proposal for any suggestions. It was observed that his approach was not helpful towards dealing with teams or groups. Taylor’s approach is not welcomed or accepted in the prevailing work environment (Griffin & Moorhead, 2009). Administrative Management Theory of Henri Fayol Henri Fayol examined administration in terms of entire process of organizing, commanding, planning, controlling, and coordinating. He made an understandable difference among the managerial and technical skills, as well as created fourteen management principles (Tripathi & Reddy, 2008). Division of labor: It authorize for occupation specialization. It was noticed by Fayol that companies can have exceptionally much specialization contributing towards disadvantaged quality and employee involvement. Authority and Responsibility: He entails both informal and formal power ensuing from extraordinary expertise. Discipline: Reverent and obedient employees are desirable. Line of Authority: It implies to the apparent chain from peak to base of the company, which is also referred as Gang Plank. Centralization: It is referred to the degree to which the authority rests at tremendously top. Agreement of Direction: It is referred to the one arrangement of action in order to direct the firm. Agreement of Command: It means that workforce should have just one boss. Order: Each worker is placed where they encompasses the most importance. Initiative: Initiative should be taken to encourage innovation. Equity: It signifies that all employees should be treated without any biasness in terms of respect and justice. Remuneration of Workforce: The system of payment leads to success. Constancy of Tenure: It signifies that long term service is significant towards growth. General Concern over Individual Concern: The Company takes primacy over individual. Union is Power: It refers to communal understanding and accord among the members of company (Karmakar & Datta, 2012). Bureaucratic Management Theory of Max Weber Max Weber initiated the notion on Bureaucratic organizations. His chief work is based on authority and power like a sociologist. He predicts that firm should be administered on a rational and impersonal basis. This structure of company is termed as Bureaucracy. Companies which rely on the rational authority would be further capable and compliant to transformation. The selection of workers is based on methodical qualification and competence. Companies should depend on such regulations which are not personal and applied evenly to entire workforces. This groundwork allows many companies to become remarkably efficient (Duening & Ivancevich, 2003). Human Relation Approach Theory of Elton Mayo Elton Mayo’s work demonstrated that, if supervisors or firm is concerned about workforce, then it will have an encouraging effect on the enthusiasm or motivation of workforce. The work of Elton Mayo explained that workers frequently work excellent in groups. He exemplified that motivation will be more in workers, provided that they are administered and discussed more about their occupation. The first experiment of Elton Mayo at Hawthorne plant was the ‘illumination study’ which was supposed to test various lighting intensity and these lighting levels influence the productivity of staffs. The next study was the ‘bank wiring room observation study’ which stated that communal groups have a propensity to influence the performance of individual’s work and production. It also lay emphasis on the reality that informal company limits worker behavior within suitable organizational structure. The next one was the ‘interviewing program’ which was carried out to observe connection between worker morale and supervisory practices. Workers expressed their thoughts and ideas and the method is deemed as more considerable than definite results. Elton Mayo believes that productivity would be raised by including workforce in the decision making procedure (Miner, 2007). Douglas McGregor Approach of Theory X and Theory Y Douglas McGregor discussed some basic principles of the human relation approach. The nature of human can be identified with the help of theories of McGregar. He expressed that, in order to understand the nature of an individual, one must ascertain the theoretical hypothesis upon which the performance is based. He states that, there are two objectives: anticipate and control the behavior, and knock unrealized prospective. Hypothesis of Theory X (Classical Theory): The average citizens have an intrinsic loathe of task and will get out of it; the average human being desires to be focused, want to abandon responsibilities, has relatively little ambition, and desires security; most individuals must be controlled, compelled, threatened, and intended for punishment. The major shortcoming of this theory is that, it neither depicts nor explains the nature of human. Hypothesis of Theory Y (Human Relation Theory): Douglas McGregor approach of Theory Y is regarded as more optimistic perception of the human nature. The warning of penalty and external control are not regarded as the only tactics; dedication to thoughts is a meaning of the inducements associated with the achievement of workers. The capability to apply a high level of thoughts and creativeness in the organizational problem’s solution is broadly propagated in population; and the reasonable potentialities of average individuals are underutilized (Miller, 2008). Hierarchy of Needs Theory of Abraham Maslow Abraham Maslow ascertained that the human being is motivated to accomplish certain needs. These needs offer a personal reason that drives the individual towards fulfillment of personal motive. When one desire is fulfilled, people seek to accomplish the next one, and it goes on. The model of Abraham Maslow’s hierarchy of needs is alienated into fundamental needs and growth needs. Once the fundamental or basic needs are satisfied, one can effortlessly attain the need of highest level. The eight stage model of Abraham Maslow is discussed below: Physiological needs: These are the basic needs such as food, drink, shelter, air, warmth, and sleep. Safety needs: The requirement for security, law, stability, and order are termed as safety needs for individuals. Belongingness and love needs: These are the requirement of love and affection from workers at workplace, and family. Esteem needs: Achievement, independence, self-esteem, dominance, mastery, and managerial responsibility are the esteem needs. Cognitive needs: The need of self awareness and knowledge is known as cognitive needs. Aesthetic needs: The need of search and appreciation for beauty is known as aesthetic need. Self-actualization needs: This is known as the growth needs which include self-fulfillment, realizing individual potential, seeking peak experiences and personal growth. Transcendence needs: Assisting others in order to accomplish self actualization (Koontz, 2010). Herzberg’s Two Factor Theory This theory highlights two dissimilar sets of work factors. One set can inspire and satisfy individuals and the other set can just circumvent dissatisfaction. One set is known as motivators or growth factors which are related to satisfaction of occupation and the other set is called hygiene or maintenance factors which is associated with dissatisfaction of occupation. The factors which are responsible for satisfaction are responsibility, achievement, personal advancement, nature of work, and growth. Whereas, the aspects which lead to dissatisfaction are company policies, supervision, work condition, relationship with peers and supervisors, salary, security and status. The conclusion which is drawn by the theory of Herzberg is that job dissatisfaction is not the reverse of job satisfaction. The reverse of satisfaction is termed as ‘no satisfaction’ and that of dissatisfaction or displeasure is ‘no displeasure’. Solving the reason of displeasure is not going to generate satisfaction. In addition, it will not eradicate work dissatisfaction only by adding work satisfaction aspects. For example, if the company comprise of aggressive work atmosphere, then offering promotion to the employees well not generate satisfaction for any human being. At the same time, if there is a healthy and fit work ambiance but the workers are not provided by any satisfaction factors then the job or occupation is still not satisfying. The factors which show the way towards the satisfaction of occupation are separate from those which lead to work dissatisfaction. Hence, if the displeasing work factors are eradicated then it may generate peace though not certainly enhance performance (Sapru, 2008). IBM and Classical Approach IBM has applied classical approach theory and proposes traditional payment plan for its employees. As IBM believes that the money is the primary motivator, the prime means of remuneration are pay and monetarily valuable benefits, for example insurance coverage and retirement plans. They also give awards, performance bonus, commissions, base pay, and other types of earnings to its workforce. Bonuses are interconnected with the contribution of workers and overall performance of business unit. The company also provides generous holidays as well as paid vacations. By applying the classical approach, IBM aims for high interest of labor as well as profit maximization by selecting workers with proper capabilities requisite for each job. However, they do not arrange the family days or kid’s days for their workforce that would add more towards keeping the workers satisfied and happy (Griffin, 2009). TCS and the Human Relation Approach TCS gives same significance for both external and internal sources of employment. The internal sources include promotion, transfer, and upgrading; whereas the external sources include press advertisement, placement agencies, educational institution, E-Recruitment, and outsourcing (Kumar & Prasad, 2013). In the training sessions, TCS gives more significance to the technological skills. Training is provided for each project to improve the efficiency of each workforce. The company follows the human relation approach for its entire business, including its compensation plan. Making teamwork and social networking available inside the company permits the staffs to learn from each other and jointly solve the problem. TCS also proposes compensation for entire public transportation and online medical care facility. Infosys and Human Relation Approach Infosys has successfully applied the human relation approach in its business operation. While employing new employees, the company took enough care to recognize the correct candidate. They employ those candidates who encompass the capability to obtain generic understanding from particular incidents and relate the same in novel situation. The company provides equal value for both behavioral and technical aspects. The training is offered before joining the organization and before each new project. In terms of behavioral aspect, the factors which are covered in behavioral training sessions are leadership and personality. The initial step towards doing performance appraisal is the assessment of personal talents for the works assigned to the workforce. To assess the performance of workforce, different criteria such as quality of task performed by worker, business potential, peer satisfaction, and customer satisfaction are considered. As per the convenience of employees, Infosys follows flexible working time so that the employees feel comfortable with the work schedule. They have also created a family-type environment and demonstrated finest human relation management. By offering training and other facilities to augment their performance and to please them, Infosys is actually trying to add to its industrial effectiveness as satisfied workforce contribute more towards the success of organization (Kumar & Prasad, 2013). Conclusion and Recommendation The main purpose of the report is to explain the different approaches of organization and management theories. It lays emphasis on the fact that how classical and human relation approaches are useful in modern day management of companies. By applying the human relation approach such as providing training, doing performance appraisal, creating a family-type environment, etc, Infosys tried to enhance its industrial effectiveness by taking the best out of their workers. It has been observed that human nature can be understood by the Douglas McGregor approach of Theory Y which is regarded as more optimistic perception of the human nature. By applying the classical approach, IBM aims for high interest of labor as well as profit maximization by selecting workers with proper capabilities requisite for each job. It is recommended that IBM should shift from classical approach to human relation approach because adopting the human relation practice will add more towards keeping the workers satisfied and happy, and ultimately it will result in improved performance of the company. References Duening, T.N., & Ivancevich, D.J. 2003. Management: Principles and Guidelines. New Delhi: Dreamtech Press. Griffin, R. (2009). Management. United States of America: Cengage Learning. Griffin, R., & Moorhead, G. (2009). Organizational Behaviour: Managing People and Organizations. United States of America: Cengage Learning. Karmakar, A., & Datta, B. (2012). Principles and practices of management and business communication. New Delhi: Pearson Education India. Koontz, H., & O’Donnell, C. (1984). Management. New York: McGraw Hill. Koontz, H. (2010). Essentials of Management. New Delhi: Tata McGraw Hill. Kumar, M.S., & Prasad, P.B. (2013). Human resource management practices in multinational companies – A case study in Indian IT Industry. International Journal of Management, 4(5), pp.20-32. Lynch, T.D. (1983). Organization Theory and Management. New York: CRC Press. Martinich, J.S. (1997). Production and Operation Management: An Applied Modern Approach. New Delhi: John Wiley & Sons, Inc. Miller, K. (2008). Organizational communication: Approaches and processes. United States of America: Cengage Learning. Miner, J.B. (2007). Organizational Behaviour 4: From theory to practice. New York: M.E. Sharpe, Inc. Sapru, R.K. (2008). Administrative Theories and Management Thought. New Delhi: Prentice- Hall Pvt. Ltd. Taylor, F.W. (2006). The principles of scientific management. New York: Harper & Brothers. Tripathi, P.C. & Reddy, P.N. (2008). Principles of Management. New York: Tata McGraw- Hill. Read More