Development of Theory in Management - Essay Example

4 September 2007 Development of Theory in Management To Messrs Whitebread and Wells: Your recent letter which appeared inmy company's journal was a blanket rejection of current methods of management, but although you are very matter of fact in your statements, you have given no explanation of how you arrived at your conclusions. You speak of "flavor-of-the-month" theories, but you have not presented either those theories or the ones introduced at the beginning of the twentieth century which have evolved over the years to establish a basis for management in the twenty-first century. In the global marketplace, with advances in technology growing beyond expectations and necessitating change, can management possibly be a simple matter of maintaining discipline and telling people what to do, as you note in your letter Such an attitude does not take into consideration the various factors that comprise management requirements for a profitable business in a changing world economy. Exactly what is a "real" manager What should we call managers who work with their staff and learn from them as well-"invalid," "false," or "imitation," as opposed to "real" Are academics and management consultants actually determining current management methods or is the method determined by what is increasing profitability in all areas of an organisation based on cooperation among staff and knowledge of their customer base Three of the most influential theorists in management at the beginning of the twentieth century were Frederick Taylor, Elton Mayo and Henri Fayol. Taylor applied scientific management using time and motion studies, with managers as observers who did not include workers in decision-making. His method, according to Sansone, was said to dehumanise workers. He set up a new effort of structure over people as a variable to improve performance rather than merely using discipline to increase production. Taylor believed managers should be thinkers, and that workers had to be guided by them. Taylor and Fayol had similar ideas, with what has been called respectively Scientific Management and Administration Management, but Mayo was more concerned with the human side of business. His style was called the Human Relations approach (Sandrone). Mayo performed what he called Hawthorne experiments from 1927 to 1932 to examine effects of fatigue and monotony on work conditions and job productivity (Accel Team). By choosing two female workers and allowing them to pick four more, he set up his experiment. He assigned a manager who was more an observer than disciplinarian to study the group and make changes, discussing and explaining them to the group in advance. Variables such as rest breaks, work hours, temperature and humidity were studied. The surprising result for Mayo was that the employees who were included in decisions about working conditions produced more, no matter what the final working schedule was, because they had formed a team. This breakthrough is taken for granted now, but teamwork in an organisation was unknown at that time. According to Accel, Mayo's experiment showed the following reason for its success: The experimental group had considerable freedom of movement . . . . Under these conditions they developed an increased sense of responsibility and instead of discipline from higher authority being imposed, it came from within the group. (Accel Team 6.4) Henri Fayol was a French management theorist who focused on management as fulfilling 5 principal roles: plan, organise, command, coordinate and control, and 14 principles of management in a hierarchal format (Marino). His ideas closely followed those of socialist Max Weber. Fayol was a successful senior manager who applied his formula for controlling his staff, and this formula is still actively practised today. Below are Fayol's 14 principles of administration (Overview 5) Specialization/division of labor Centralisation Authority with responsibility Scalar chain/line of authority Discipline Order Unity of command Equity Unity of direction Stability of tenure Subordination of individual interest Initiative to the general interest Remuneration of staff Esprit de corps Your letter indicates that you believe in subordination of individual interest to the general interest, and, in this respect, most of Fayol's principles apply. However, even he, unlike Weber, believed that personal effort and team dynamics were part of an "ideal" organisation. Although his system is said to maintain order through "common sense," its weaknesses have become evident in the present-day global marketplace, as portrayed in ASDA/Wal-Mart's unsuccessful bid for market share in the UK against Tesca (ASDA/Wal-Mart: Market Share). Not only management theory but also management training is necessary in a marketplace that changes day by day. You imply in your letter that the ability to be a manager is inherent, something you are born with. If that is the case, what are the characteristics that mark a person for leadership without effort You cannot make such a statement with nothing to back it up. One of the so-called "buzzwords" that you refer to might be "change management." This is a twenty-first century focus that relates strongly to Elton Mayo's belief in the human relations aspect of management. Because change in an organisation is inevitable in a global marketplace, it is important for managers to be aware of not only changes but also how those changes will affect the workplace and to know enough about the employees under their command to be able to interact and encourage new ideas and suggestions (Change Management). In comparing two UK companies, one applying the principles of change management and the other more concerned about profits and prices than employee and customer satisfaction, it becomes obvious that rigidity and discipline are not the most successful ways to increase market share. According to your letter, management theory has no place in an organisation. How then do you explain why Tesco, a supermarket which applies theory to create a management strategy that involves its entire workforce and the customers it serves is so successful in the United Kingdom. Tesco operates supermarkets in 10 countries and has a market lead in 6, including the United Kingdom. They are a forward-looking organisation with growth a major component. Their managerial system follows that of Mayo's system with not only integration of employees in decision-making but also studying the needs of customers and training managers to be knowledgeable about the company. For them, the needs and priorities of local customers take precedence (Tesco CSR). Tesco holds its position as a top organisation in the UK and is continuing to grow with expansion to non-food items putting them in direct competition with other super stores. Its competitor ASDA/Wal-Mart is staying with prices as the bottom line rather than the loyalty schemes of other large supermarket organisations and is having problems in the marketplace as a result. Some of the barriers for ASDA/Wal-Mart are planning laws in the UK. Another area in which ASDA/Wal-Mart is weak is its assumption that low prices are what drive UK customers. The company shows an increasing push for profits by ignoring employee satisfaction and appointing managers who are expected to put ASDA's hierarchy above concern for staff. This is close to your premise about management, but why then are other organisations showing more success than ASDA/Wal-Mart in the United Kingdom A study of successful businesses in the UK such as Tesco and Ikea UK as well as British Airways and Lloyd's, especially in how they use the Internet, indicates far more attention to employee and customer satisfaction. The result is that these organisations are at the top in marketing. ASDA/Wal-Mart's hierarchal methods have decreased their popularity in the United Kingdom (ASDA/Wal-Mart). It would appear that your letter is extremely limited in trying to show that managers do not need training or management theory. You have not addressed Internet and electronic marketing where a prospective employee who has no training in electronics will never be chosen as a manager in the first place. This is the case as well on the production floor where computers are used in all aspects of production. Are you familiar with another "buzzword" called mass customisation It targets the customers by promising them a unique product, built to their specifications. The system requires information technology and high-level business planning to develop capacity management (Citrin). Ikea UK utilises mass customisation with its home furnishing products. Conclusion The final conclusion to be reached in an analysis of your letter is that it fails to give proof of what you are saying. For instance: Why is every major organisation mesmerised by "management theory" Why Because it works as shown in the above responses to your letter. You have asked the question, but you have not answered it. Haven't generations of managers done well by learning on the job That may be but it takes more than common sense to learn the technology needed in today's businesses. It would appear that you are limited in your vision of what a manager should be. According to you, a manager is not appointed, trained or promoted. A manager simply is. Academics and management consultants are trying to build their reputations. Are you implying that academics should not explore the business world and what does or does not work Why would a Business major exist if not to study the industry The bottom line here is that early pioneers of management theory offered various ways to improve business output, and their ideas have continued to influence business leadership today. An endless supply of new gurus spin off new batches of buzzwords. Of course it is impossible to apply every suggestion made by theorists, but it becomes evident that certain ideas follow certain paths, and each tends to follow one of the early theorists. In this respect, nothing is new; just improved. Managers maintain discipline and tell people what to do. It would appear obvious that successful managers do more than this. They study various ways to make their teams more efficient, but the key word here is "team." You have either got what it takes or you haven't. This is a difficult premise to accept. It is probably true that some people have more inherent leadership qualities than other people and perhaps these qualities can be developed, but making it in the business world is hard work, not something that just happens without effort. As noted above, the reasons why your letter lacks substance should be evident. You have actually presented an outline of your own opinions, and it would be interesting to hear your counter-arguments regarding the points that have been made throughout this letter, with relevant sources to prove your line of reasoning. Please note Works Cited page for further information on the points I have tried to make. 1) We live in a global economy and technology is changing so quickly, we must stay up to date. 2) Frederick Taylor, Elton Mayo and Henri Fayol have been ongoing influences on management theory from the beginning of the twentieth century. 3) Success in today's marketplace depends on teamwork within the organisation and knowledge regarding customer needs outside the organisation. 4) Information technology is necessary in the global marketplace with major companies expanding throughout the world. Works Cited Accel Team. "Elton Mayo's Hawthorne Experiment."). ACCEL. 2007. 1 September 2007. http://www.accel-team.com/motivation/hawthorne_02.html ASDA/Wal-Mart: A Corporate Profile." 2004. Corporate Watch UK. 1 September 2007. http://www.corporatewatch.org.uk/lid=800#history "Change Management." n.d. teamtechnology.co.uk. 1 September 2007. http://www.teamtechnology.co.uk/changemanagement.html Citrin, Sarah. "Capacity Planning: A Tactical Decision with Strategic Impact." 2006. Insight. 2 September 2007. http://www.insight-mss.com/_whitepapers/file=CapacityArticle020703.htm. Marino, Vincent. "The General Management Principles as Summarised by Fayol." 12manage. Last updated 26 August 2007. 1 September 2007. http://www.12manage.com/methods_fayol_14_principles_of_management.html "An Overview of Management Theory." 2001. kernsanalysis.com. 2 September 2007, pp. 1-7. http://kernsanalysis.com/sjsu/ise250/history.htm Sandrone, Vincenzo. "F.W. Taylor & Scientific Management." 1997. Management Resources. 1 September 2007. http://www.skymark.com/resources/leaders/taylor.asp Tesco CSR. "Every Little Helps." 2003. Tesco. 1 September 2007. http://www.tesco.com/everyLittleHelps/downloads/TescoCSRreview0203.pdf Read More