Management is described as the process of ‘getting things done through other people’. This is accomplished in organisations, industries, and business enterprises where large numbers of people are employed to achieve corporate goals. Managers collectively are the bosses, invariably paid very well, and/or rewarded with equity in the firm with a share of the profits. The top management agree on the objectives, and the strategies and tactics, to achieve the goals they set for the enterprise they lead, by employing a large workforce to produce the goods, and provide the services for consumers the world over.
Management theory with concern for how to get the most out of front line workers in industrial and commercial concerns became very much a twentieth century phenomenon. Earlier, following the industrial revolution, large concentrations of workers were needed in mills and factories to mass produce goods which replaced agricultural and craft work hitherto produced in small rural family or communal units. In those days the managers were authoritarian and tyrannical when slave labour or indentured labour including child labour at starvation wages could be deployed at the behest of the ruling, capitalist class.
The world has changed since, and owners of capital can no longer treat labour as a disposable commodity. Trade Unions, Communism, and universal education along with worldwide markets meant that the old methods of almost forced, repetitive back-breaking labour of the ‘dark satanic mills’ could no longer be sustained. New disciplines like economics, psychology and sociology sprang up. These social sciences were called upon to build theories of management and organisational behaviour that would explain and help understand the dynamics of an ever more sophisticated and demanding workforce.
Early theories of management exemplified by the work of Frederick Winslow Taylor had been described colloquially as the ‘carrot and stick’ approach. Taylor coined the term ‘scientific management’ for his theory which was later simply referred to as ‘Taylorism’. He sought to break down tasks to their simplest elements so that an assembly line robot could perform them without any need for thinking. All brain work was to be removed from the shop floor and handled by managers alone. Taylorism is explained as the ‘decoupling of the labour process from the skills of the workforce’ and defined as ‘management strategies that are based upon the separation of conception from execution’. This approach worked well with early immigrants to the US with hardly any facility with the English language, and a limited social, or communal life, but proved less effective with future generations.
However, in automated plants using very high tech solutions for 24-hour routine work with little or no human input, the principle still applies. Researchers acknowledge that McDonalds and outsourced call centres (customer service operations) use such strategies and can claim success by ensuring ‘predictability and controllability’. An up to date example of scientific management still in operation is the report by Malcolm Moore headed ‘Bullies in China’s Shops’ (The Daily Telegraph, 6th March 2010). He describes the working conditions as ‘inhumane’ of 38,000 workers living in dormitories who work for one of 102 factories belonging to either Foxconn, Quanta or Pegatron, all Chinese companies who are suppliers of USA’s Apple products (e.g. iPhone) for the world market. Strangely enough it is these supplier companies that increasingly ‘come up with new designs and technology’ and ‘are at the cutting edge’ (op. cit.). The Chinese workers today appear to use their brains even without the ‘human relations’ approach!
Elton Mayo’s Hawthorne plant experiments (1927-32) conducted at the Western Electric plant in Cicero Illinois gave rise to a theory as a departure from Taylorism which came to be known as the Human Relations school by its many followers. Douglas McGregor called Taylorism and similar top down command and control approaches to management of labour, Theory X, and proposed instead Theory Y giving the employees more autonomy and discretion at work following the Human Relations approach of Elton Mayo. Mayo’s experiments involved the changing of illumination, changing the hours of work, and giving more or less breaks, which all resulted in the workers producing more with each intervention. The ‘Hawthorne effect’ has been summarised as employees becoming more productive because they knew they were being sympathetically observed by prestigious people who happened to be social scientists. These experiments proved that ‘an increase in worker productivity was produced by the psychological stimulus of being singled out, involved, and made to feel important’.
The conclusion is that the ‘Hawthorne researchers… identified the importance of the ‘human factor’ in organizations (which) meant that workers were now recognized as having social needs and interests such that they could no longer be regarded as the economically motivated automatons envisaged by Taylorism’. It has to be noted however, that there were 19th century industrialists with Quaker backgrounds, who met their workers’ ‘moral and social needs’ by providing housing, places of worship, and other communal amenities. The Cadbury Chocolate Factory Bournville plant in the UK is a case in point. To be included in the Human Relations school is work of the Tavistock Institute in London which undertook to study the work of coal miners. They too understood that job simplification and specialization did not increase productivity but giving more autonomy to the work group in organising their work shift, did produce better results. Under conditions of uncertainty when engaged on non-routine tasks ‘semi-autonomous’ work groups fared better than isolated individual workers.
Another theory not exclusively applicable to management, but was a general psychological theory which supported the Human Relations school, was Abraham Maslow’s Hierarchy of Needs. McGregor labelled it Theory Z. Put simply, it can be visualized as a pyramid with its broad base starting with Physiological needs (lowest), which had to be satisfied first before requiring attention to Safety needs, followed by Love/affiliation needs, then Esteem needs, and at the highest point, Self-actualization needs.
A firm which had presumably subscribed to classical theories of worker motivation but found it unworkable to its cost was Iceland Frozen Foods (The Sunday Times 8th March 2009). Four years before the turnaround, morale of workers in the firm was ‘at rock bottom after 40% of staff at the Deeside head office was made redundant’. With a change of tactics the CEO, Malcolm Walker was able to get the workforce to have ‘confidence in the leadership skills of the senior management team giving a top score of 73%’. As the basic needs of employees for fair wages, reasonable hours at work, paid holidays, non-discrimination (sex, race, disability etc.) i.e. equal opportunities, are respected (now legally enforced), workers will look for Maslowian higher order needs to be satisfied through their day to day work. This was what Iceland Frozen Foods was able to provide their workforce after a switch to the Human Relations model of treating employees.
Malcolm Walker nicknamed ‘the king of cool’ initiated measures to provide his workers with opportunities to achieve promotions by working hard and using their brains. For example, a shop floor worker who became a home delivery driver achieved the promotion to the position of senior supervisor within just a few years and is quoted in the article speaking approvingly of his boss. It is reported that staff at Iceland Frozen Foods don’t feel under too much pressure… and don’t tend to suffer from work-related stresses. A survey of a representative sample of UK companies revealed that Iceland Frozen Foods was voted by a workforce of over 17,000 men and women as the third most successful company compared with all other companies in motivating them to achieve their best at work. Here is a good example of human relations at work and providing solid support for the movement.
Another example which throws up a different aspect of human relations theory comes from the current trend towards globalization. The Euro Disneyland, a ‘transplanted American theme park’ near Paris lost $34 million over the first six months since it opened in April 1992. Even before it opened there was strong local opposition that it threatened French cultural sensitivities. A strict employee dress code and the outlawing of wine in the park (sacred to the French), among other things, angered the Parisians. Eisner, the CEO of the parent company in the USA, who could speak French and had a French wife, and also a recipient of many awards from the French government, still failed to make Euro Disney a going concern.
The turnaround came when ‘Eisner learned to recognize French cultural traditions and quality of life, rather than focus exclusively on American business interests, revenues and earnings at the expense of the underlying French culture’. Relaxing the rigid rules, removing the American-style hot dog carts, appointing local managers, and deciding to use French language at the park, were essential components of its later success. The conclusion is inescapable that both ‘carrot and stick’ approaches still appear to work if the conditions are right for either approach.