Over the years, theories of how to manage a venture have been developed that range from measuring everything to focusing on human relations. Some, like Quality Circles, have had a long life while others, like T-groups, have disappeared quickly. Management gurus Edward de Bono and Robert Heller advise that "sound management theories can be the foundation of a successful business," but caution that "if you are looking for ready-made theories that will turn a failing business into a successful one, then you will find the answer will remain elusive and your quest will end in disappointment."
What Doesn't Work:
Management styles influence leadership styles and I would hope that this real-life account, which identifies with Douglas McGregor's 1960s view that some managers believe "employees inherently dislike work, prefer laziness, avoid responsibility, and must be coerced into working hard," is rare; but we know better, don't we.
I entered into the following conversation at a local business I worked for after retiring from teaching. It illustrates how employees react to management that devalues people. It began when I walked into the shop and encountered a group that included Roy- a profit unit manager- and four employees we'll call Shirley, Sammy, Concilia and Rags. They were standing by one of the service bays, talking. Curious, I walked over to join them.
“Bob Allen walked by Diane one day and she didn’t smile so he promptly fired her,” said Roy. “They must have gone through four hundred employees in that place while I was there. He was a tyrant.”
“Well…Ron started telling me off one day,” added Shirley. “I stopped him in the middle of his tirade and threatened to quit if he kept it up.”
“What happened?” asked Sammy.
“He stopped,” she replied.
“That’s the way you had to deal with him,” interjected Roy. “If you stood up to him he wouldn’t try to intimidate you.”
“I’m surprised someone hasn’t gone postie at this place,” added Rags.
By this time, I'd picked up the drift of the conversation, and the obvious reference to the fear tactics used by the general sales manager, Ron Jackman. But I'd also observed that they were using his name in the past tense. “Pardon my ignorance, but is Ron Jackman no longer with us?”
“Nope,” answered Rags. “If he hadn’t left, someone was going to go postie.”
“We used to get a turkey for Christmas every year, but not this year,” said Consilia. “We’re not even having a shop-wide Christmas party this year.”
The conversation continued for some time but Roy's parting comment was telling: "Intimidation just doesn’t work in today’s workforce."
Older Management Theories:
At the turn of the 20th century, the most notable organizations were large and industrialized. Often they included ongoing, routine tasks that manufactured a variety of products. Scientific and technical matters, including careful measurement and specification of activities and results were highly prized. Management tended to be the same. Frederick Taylor developed the scientific management theory which espoused this careful specification and measurement of all organizational tasks. Tasks were standardized as much as possible (e.g. Ford assembly line). Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routine activities.
As Vector Study points out, Max Weber "embellished the scientific management theory with his bureaucratic theory. Weber focused on dividing organizations into hierarchies, establishing strong lines of authority and control. He suggested organizations develop comprehensive and detailed standard operating procedures for all routine tasks."
Eventually, unions and government regulations reacted to the rather dehumanizing effects of these theories. More attention was given to individuals and their unique capabilities in the organization. A major belief was that the organization would prosper if its workers prospered as well. Human Resource departments were added to organizations. The behavioral sciences played a strong role in helping to understand the needs of workers and how the needs of the organization and its workers could be better aligned. Various new theories were spawned, many based on the behavioral sciences.
More Recent Management Approaches:
Between the 1960s and the beginning of the 21st century a host of new theories came and went. There was, for instance, the T-groups theory, that bloomed in the flower power 1960s, and espoused that people are more effective working in groups that are aware of their feelings and sensitive to the feedback of others. In most businesses, people didn’t enjoy opening up and the idea died with disco. A legacy, however, is the concept of having a facilitator lead meetings.
Another 1960s theory was McGregor's Theory X and Y. It was a management style that postulated that people should view work like play and get their reward from freedom and challenge rather than cash. It was never embraced by Type A managers.
In the 1980s there was the Quality Circles theory. It was the answer to the threat of Japanese companies buying the world. It involved small groups of employees, kaizen in Japanese, meeting regularly to discuss ways to improve quality and productivity. It lives on in different forms as a component of the current total quality management and Six Sigma theories.
The 1990s saw the Re-engineering and Flattening theories. During the decade there were at least two dozen books on making business more computer-like by getting rid of inefficiencies, such as having too many people on the payroll. Ultimately, the re-engineering strategy proved too mechanistic as the human cogs in the system bore the brunt of the changes and didn’t get any of the credit. From the re-engineering was created the flattening theory. It was a horizontal structure with fewer employees who were cross-functional and was touted as efficient and good for the bottom line. But employees had to work flat out to make it work.
A more recent human resources theory appeared termed 360 Degree Reviews. The bottom line was that organizations work better if workers also have a chance to review the performance of their bosses. It is still in use but has fallen out of favor in many organizations that find it time consuming and damaging to the egos of managers.
More recent still are the following theories:
- Human Capital theory- it tries to quantify the knowledge and intangible benefits employees add to a company’s value.
- Triple Bottom Line theory- that companies should be working just as hard boosting their environmental and social worth as they do their financial results.
- Project-Based or Action Learning- A learning-by-doing approach in which teams work together on a problem or project to find answers not available through their existing expertise.
People First is Still In:
There are fewer fads around now than there were, probably because organizations have become a lot leaner. But Robert Heller, in his article, Managing People, suggests business "Increase power by dispersing it: encourage creative dissent: build autonomous teams. These are among the watchwords of the alternative management which has been led by the gee-whiz companies of micro-electronics (e.g. Microsoft, Compaq, Dell)."
Sources:
- Andrew Balls. The Flattening of Corporate Management. National Bureau of Economic Research.
- Bureaucratic Management. Vector Study.
- Dean Flmuti and Yunus Kathawaia. Business reengineering: A Revolutionary Management Tool or Fading Fad? Entrepreneur. Winter-Spring 2000.
- Diane M. Alexander. How do 360 Degree Performance Reviews Affect Employee Atitudes, Effectiveness and Performance? University of Rhode Island.
- Dimitrios Litsikakis. Action-Based Projects. Lancaster Iniversity Management School.
- Edward de Bono and Robert Heller, Management Theories. Thinking Managers.
- Ed Batista. T-Groups, Trust, Leadership and Management. Feb. 27, 2007.
- Frederick Winslow Taylor ME, Sc, D. The Principles of Scientific Management. Ibiblio.
- Jin Xiao. Determinants of Salary Growth in Shenzhen China: An Analysis of Formal Education, On -The-Job-Training and Adult Education Within a Three-level Model. Chinese University of Hong Kong. June 6, 2001.
- Management and Motivation: McGregor's Theory X and Y; Ouchi's Theory Z. Management and Work. Aug. 14, 2007.
- Wayne Norman and Chris MacDonald. Getting to the Bottom of "Triple Bottom Line". Business Ethics. Mar. 2003
James Gibson - James Gibson is a retired teacher and small business owner. He is a published writer and has a wide spectrum of interests.
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