Management and Human Relations

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Management and Human Relations

Management is described as the process of ‘getting things done through other people’. This is achieved in organizations, industries and business enterprises where large numbers of people are employed to achieve business goals. Managers collectively are the boss, always very well paid, and/or rewarded with equity in the company with a share of the profit. The top management agrees on the objectives, and the strategies and tactics, to achieve the goals they set for the enterprise they lead, by using a large workforce to produce the goods and provide the services for consumers around the world.

Management theory concerned with how to get the most out of frontline workers in industrial and commercial affairs became very much a twentieth century phenomenon. Rather, after the industrial revolution, large concentrations of workers were needed in mills and factories to mass produce goods that replaced agricultural and craft work hitherto produced in small rural families as communal units. In those days the managers were authoritarian and tyrannical when slave labor or indentured labor including child labor could be employed on starvation wages at the behest of the ruling, capitalist class.

The world has since changed, and owners of capital can no longer treat labor as a disposable commodity. Unions, communism, and universal education along with global markets meant that the old methods of almost forced, repetitive backbreaking labor of the ‘dark satanic mills’ could no longer be sustained. New disciplines such as economics, psychology and sociology emerged. These social sciences were called upon to build theories of management and organizational behavior that explain and help understand the dynamics of an increasingly sophisticated and demanding workforce.

Early theories of management, exemplified by the work of Frederick Winslow Taylor, were colloquially described as the ‘carrot and stick’ approach. Taylor coined the term ‘scientific management’ for his theory which was later commonly referred to as ‘Taylorism’. He sought to break tasks down to their simplest elements so that an assembly line robot could perform them without having to think. All brain work would be taken off the shop floor and handled only by managers. Taylorism is explained as the ‘decoupling of the labor process from the skills of the workers’ and defined as ‘management strategies that are based on the separation of conception from execution’. This approach worked well with early immigrants to the US with barely a facility with the English language, and a limited social, or community life, but proved less effective with future generations.

However, in automated plants that use very high-tech solutions for 24-hour routine work with little or no human input, the principle still applies. Researchers recognize that McDonalds and outsourced call centers (customer service operations) use such strategies and can claim success by ensuring ‘predictability and controllability’. A current example of scientific management still in effect is Malcolm Moore’s report entitled ‘Bullies in China’s Shops’ (The Daily Telegraph, 6 March 2010). He describes the working conditions as ‘inhuman’ of 38,000 workers living in dormitories who work for one of the 102 factories belonging to either Foxconn, Quanta or Pegatron, all Chinese companies that are suppliers of ‘ e USA’s Apple products (eg 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 forefront’ (op. cit.). The Chinese workers today seem to be using 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 that 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 labor management, Theory X, and instead proposed Theory Y to give employees more autonomy and discretion at work following Elton Mayo’s Human Relations approach. Mayo’s experiments involved changing the lighting, changing the working hours and giving more or less breaks, all of which resulted in the workers producing more with each intervention. The ‘Hawthorne effect’ has been summed up as employees becoming more productive because they knew they were perceived sympathetically by prestigious people who happened to be social scientists. These experiments proved that ‘an increase in the worker’s 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, so that they were no longer regarded as economically motivated automatons could be coined by Taylorism’. However, it should be noted that there were 19th century industrialists with Quaker backgrounds, who met the ‘moral and social needs’ of their workers by providing housing, places of worship and other communal facilities. The Cadbury Chocolate Factory Bournville plant in the United Kingdom is an example. To be included in the Human Relations school is the work of the Tavistock Institute in London, which undertakes to study the work of coal miners. They also understood that work simplification and specialization did not increase productivity, but gave the work group more autonomy in organizing their work shift, did yield better results. Under conditions of uncertainty, when engaged in non-routine tasks, ‘semi-autonomous’ work groups fared better than isolated individual workers.

Another theory that was not only applicable to management but was a general psychological theory that supported the Human Relations school was Abraham Maslow’s Hierarchy of Needs. McGregor labeled it Theory Z. Simply put, it can be visualized as a pyramid with its broad base starting with Physiological Needs (lowest), which had to be satisfied first before addressing Safety Needs, followed by Love/Affiliation Needs, then Esteem needs, and at the highest point, Self-actualization needs.

A company that had probably subscribed to classic theories of worker motivation but found it not working to their cost was Iceland Frozen Foods (The Sunday Times 8th March 2009). Four years before the turnaround, worker morale in the company was ‘rock bottom after 40% of the workforce at the Deeside head office was made redundant’. With a change of tactics, the CEO, Malcolm Walker was able to get the staff to have confidence in the leadership skills of the senior management team who gave a top score of 73%. Because the basic needs of workers for fair wages, reasonable hours at work, paid holidays, non-discrimination (gender, race, disability, etc.), i.e. equal opportunities, are respected (now legally enforced), workers will look for higher order Maslowian needs. to be satisfied by their daily work. This was what Iceland Frozen Foods was able to provide their staff after switching to the Human Relations model of treating employees.

Nicknamed ‘the king of the cool’, Malcolm Walker initiated measures to give his workers opportunities to achieve promotions by working hard and using their brains. For example, a floor worker who became a home delivery driver achieved 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 do not feel under too much pressure… and do not tend to suffer from work-related stress. 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 to all other companies in motivating them to achieve their best on the work Here is a good example of human relations at work and providing solid support for the movement.

Another example that raises another 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 in the first six months since it opened in April 1992. Even before it opened there was strong local opposition that threatened French cultural sensibilities. A strict dress code for employees and the banning of wine in the park (sacred to the French), angered the Parisians among others. Eisner, the CEO of the parent company in the US, who knew French and had a French wife, as well as 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, instead of focusing solely on American business interests, revenue 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 in the park were essential components of the later success. The conclusion is inescapable that both ‘carrot and stick’ approaches still seem to work if the conditions for both approaches are right.

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