Another aspect of this desire for control can be seen in the work of Frederick Taylor, who developed his own for of scientific management. Taylor’s work stemmed from his observations around the different efficiencies displayed by the workers at the Bethlehem Steel Company. Taylor believed that these efficiencies were not due to random chance, and in fact were inherent to the way the workers approached the job. As such, Taylor carried out a study of the various workers, finding that those who, for example, used certain types of coal shovels were more efficient than others. This led Taylor to devise a system of rules for the workers, allowing managers to effectively instruct workers in the most efficient way to perform each job. Whilst Taylor envisioned that these time and motion studies of workers would led to companies needing less workers, and hence paying the best workers a premium for their service, scientific management was largely appropriated by other managers as a method of accomplishing the same amount of work with fewer workers still being paid at the same rate (Cole, 2003).
A large part of this development is rooted in Henry Ford’s approach to production. Ford believed that workers performing a repetitive task would tend to work as slowly as they could without being punished, something which Ford termed ‘soldiering’ (Buchanan and Huczynski, 2006). Ford also believed that, when working in a group, workers would tend to work as fast as the slowest member of the group, indicating that workers valued their own well being ahead of the well being of their employer. As such, Ford developed the ‘Fordist’ approach to management, through his experiences of managing the Ford Motor Company. This was similar to Taylor’s approach, except that it further broke down the workload so that each worker did a separate task. This prevented workers from matching their speeds to each other, and also made it much easier for managers to monitor and control individual work rates, and hence maximise the productivity of a business (Mullins, 2004).
The concepts of the division of labour and scientific management strongly depended upon the fact that businesses tended to employ a large number of workers. This issue led Ronald Coase (1937) to investigate why economies were increasingly becoming dominated by large organisations, instead of being dominated by independent tradesmen who contracted with each other. For example, why would a car manufacturing company exist when different individuals could potentially make all the different parts, and then sell them to another individual who assembled the final machine? Coase started his analysis by looking at why entrepreneurs chose to hire people to work for them, instead of contracting out ever single task. Coase concluded that organisations began to exist when the costs of conducting a transaction, such as producing a part for a car, could be carried out cheaper by people employed within the firm that they could by individuals operating in the market. At this point, it makes more sense for businesses to hire people, and hence defines the shape of the firm (Williamson, 1981). This analysis is the basis for the transaction cost analysis of the firm, which was another key aspect of the classical theories of management.
Human Relations Theory
Human relations theory is largely seen to have been born as a result of the Hawthorne experiments which Elton Mayo conducted at the Western Electrical Company. However, as discussed above, the so called “Hawthorne Effect” was not foreseen by the study. Instead, the Western Electrical Company wished to show that a greater level of illumination in a working area improved productivity, hence encouraging employers to spend more money on electricity from the company. However, the results of the study showed that any changes in light levels tended to increase productivity levels, and the productivity level also increased significantly within the control group. This was completely the opposite of what Mayo expected, and created an entirely new branch of management theory. When workers were being observed and included in the research, they felt more important and valued by the company. As a result, their productivity levels went up significantly. This represented a significant departure from classical theories, as it went against the notion that management needed to control workers, and remove their autonomy at every step (Porter and Bigley, 1995).
Another important part of human relations theory came from the other one of Mayo’s experiments: the bank wiring experiment. This experiment involved monitoring the production of a group of workers who were working as a group to produce electrical components. This investigation showed that, as believed by Ford, the group as a whole decided on the level of production, purposely failing to produce their maximum output in spite of the potential bonus which was offered by management. This indicated that factors such as peer pressure, and the desire for harmony within the group, overrode any economic considerations which the workers held (Porter and Bigley, 1995). This study also first drew management theorists’ focus to the informal aspect of the organisation, and the important role that it played in productivity. As a result, Mayo argued that managers needed to encourage good communication with workers and develop a connection with their employees, which runs counter to Taylor and Ford’s claims that managers needed to focus on organisational goals and completely control the workers. Mayo argued that Taylor and Ford’s techniques would boost productivity, but only to a certain level. In order to go above this level, workers needed to feel that they were valued more than simply on a monetary basis. The concept that managers need to become involved with workers at a more individual level is at the core of human relations theory, and is what differentiates it from classical management theory (Lamberton and Minor-Evans, 2006).
Following this research, Abraham Maslow wanted to determine what it was that made the most successful people perform as they did, even when they were not given individual attention by managers as Mayo argued. His study, based on examining “exemplary people” (Lamberton and Minor-Evans, 2006) was not true empirical research, rather he simply looked to group people into certain types according to the needs they expressed, and how they behaved once said needs were filled. This led to Maslow’s famous hierarchy of needs, a pyramid running from physiological needs such as food and shelter, going right up to psychological needs such as behaviour and self actualisation. Maslow argued that the lower needs had to be met first, and that once the lower needs are met they fail to motivate people. This helped to put a framework onto Mayo’s work: the Hawthorne Effect was due to the study meeting the belonging needs of the participants; hence the participants were motivated to perform better. However, there are also some examples of individuals who have sacrificed their lower level needs to fulfil their higher ones such as Ghandi, who sacrificed security to achieve self actualisation. In addition, Maslow claimed that once people had reached the higher levels, they wouldn’t abandon their higher level needs even if their lower ones were threatened. This explains why many successful businessmen carry on working even after a health scare, as they continue to value the belonging and esteem needs they achieve from their work, even if it threatens their health.
Systems Theory
Systems theory is largely associated with the behavioural approach, which was developed to its fullest extent by Richard Cyert and James March working at Carnegie Mellon University. As such, systems theory is now often referred to as the “Carnegie School” of thinking. This approach moved beyond simply looking at the boundaries of the firm, or how control is exercised within the firm, and looked at how decisions were taken within firms. This was driven by Herbert Simon’s desire to explain how people behaved in uncertain working environments and situations. Simon argued that people only had limited cognitive ability to examine and analyse situations, and hence their decisions in complicated situations would be solely driven by “bounded rationality”. This implies that decisions within a firm would be made according to systems designed to help individuals and groups attain what they felt were realistic goals. Cyert and March took this further, claiming that different groups within a firm will have their own goals, which will often conflict. As such, the overall behaviour of the firm will depend upon the systems used to resolve these conflicts (Cyert and March, 1992).
Another key systems theory was developed by Kurt Lewin, based on looking at how individuals changed, and which forces would dominate in any change environment. Lewin was unhappy with existing models of conflict resolution, learning and other issues, and argued that any changes in an individual would occur when their existing situation and “life space” cam into contact with external stimuli. The extent to which change would occur would depend on the extent to which the external stimuli were accepted. Lewin then applied these principles to issues such as group conflict, learning and morale, showing that many of the beliefs of the time were actually misconceptions. As such, Lewin used a combination of theory, mathematics and reasoning to define his force field approach, which provided a systematic method of determining the causes of behaviour, both within a group or simply for individuals. Force field analysis was one of the most influential of the systems theories, and allowed people to look at the factors forces influencing a situation, and manipulate them to achieve a desired goal (Mullins, 2004).
Contingency Theory
Contingency theory largely developed in response to manager’s dissatisfaction with the large number of theories in existence, and the fact that no theory had been shown to work well in all situations. As such, researcher began to look for the reasons different approaches behaved in different ways. This led to Hersey and Blanchard’s situational theory, which argued that leaders should adopt different behaviours depending on the situation they found themselves in. This approach was furthered by Douglas McGregor, who examined the development of the western economies following the rise of authoritarianism in World War II, and communism afterwards. With the Nazi and Soviet economies having proved highly productive, McGregor aimed to challenge the prevailing view that democratic leadership was best, claiming that managers would adopt different approaches, contingent on how they perceived their staff. This led to the famous Theory X - Theory Y approach. Theory X is adopted by managers when they believe that their workers are lazy and soldiering, hence they use Taylorist and Fordist management techniques. In contrast, Theory Y is adopted by managers who believe that their workers are inherently motivated to work, hence they attempt to use a human relations management approach to boost said motivation further. McGregor saw the two theories as being truly contingent on management styles, and did not propose either version to be superior (McGregor, 2006). Further to this, William Ouchi (1981) added a third contingent theory: Theory Z. This is based on the style of management used in Japan, where manager believe that jobs should be provided for life, and employee wellbeing should be a key focus of the employer. As such, Theory Z practitioners tended to make their employment more stable, and hence have higher productivity and morale (Ouchi, 1981).
Fred Fiedler (1967) applied a similar approach to his analysis of leadership, which had long been dominated by the conflict between autocratic and democratic styles. Whilst most academics were strongly in favour of one or the other style, Fiedler disagreed, and claimed that the best style would be determined by the style of the leader and the nature of the situation. Fiedler analysed the leadership styles of various companies, and also those prevalent in the US Navy. Using the least preferred co-worker scale, Fiedler defined whether leaders were more oriented by completing tasks or by maintaining relationships. Fiedler then defined the favourableness of the situation, and hence created a contingent scale to determine in what conditions each style of leadership would be most effective. Whilst this approach has been criticised for a lack of flexibility, and largely superseded by transformational leadership, it was a key step in developing the view that there was no one best style of leadership (Mullins, 2004).
Conclusion
Whilst it is true that a large part of management theory has been developed to help explain the issues faced by managers over the years, a significant proportion of theory has also been developed as a result of deficiencies in previous theories, or in some cases completely by accident. Some of the most well know theories have been developed as a result of deliberate attempts to explain or manage results, including Taylor’s scientific management and Lewin’s force field analysis. However, other extremely influential theories have developed almost entirely by chance, such as Elton Mayo’s human relations theory. Yet more theories have been developed to cope with the discrepancies in and issues with existing theories, such as the contingency theories which aimed to overcome the shortcomings of the classical theories.
This indicates that management theory has not been developed solely in response to the problems faced by managers, but rather a significant portion of it has been developed as an academic exercise by theorists keen to advance their own ideas. In addition, a significant proportion has been developed opportunistically, using data from experiments which were designed to measure something different. As such, this would tend to debunk any arguments that management theory is developed in a wholly rigorous or scientific way. However, the volume of evidence from this study does tend to show that the majority of theory has been developed in response to the problems faced by managers, even if those problems are occasionally rooted in existing theories.
References
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Buchanan, D. and Huczynski, A. (2006) Organizational Behaviour: An Introductory Text. Financial Times / Prentice Hall.
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Coase, R. H. (1937) The Nature of the Firm. Economica; Vol. 4, Issue 16, p. 386-405.
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Cole, G. A. (2003) Management Theory and Practice: 6th Edition. Thomson Learning.
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Cyert, R. and March, J. (1992) A Behavioral Theory of the Firm. Blackwell Publishing.
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Lamberton, L. and Minor-Evans, L. (2006) Human Relations. McGraw-Hill.
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Mcgregor, D. (2006) The Human Side of Enterprise, Annotated Edition. McGraw-Hill Professional.
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Mullins, L. (2004) Management and Organisational Behaviour. Financial Times / Prentice Hall.
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Ouchi, W. G. (1981) Theory Z: how American business can meet the Japanese challenge. Addison Wesley.
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Porter, L. W. and Bigley, G. A. (1995) Human Relations: Theory and Developments. Ashgate Publishing.
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Swedberg, R. (1998) Max Weber and the Idea of Economic Sociology. Princeton: Princeton University Press.
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Williamson, O. E. (1981) The Economics of Organization: The Transaction Cost Approach. The American Journal of Sociology; Vol. 87, Issue 3, p, 548-577.
