From about 1880 to 1910, the economy in the United States enjoyed great expansion. The expansion has ignored the workers and the idea of organization is social Darwinism. That is only the fittest organizations to the functions can survive (Spenser,1870). Later, the new thought movement had advanced the idea by arguing that the organizations that are most efficient can survive. The fitness ideology for sheer initiative and fighting spirit is replaced by Taylor’s scientific management theory in 1911.
Taylor’s Scientific Management
Key research question is how to design organizations in the most efficient way?
Taylor’s main idea is that cooperation between capital and labor brings the success to the organizations. He focuses not purely on how to divide the profit pie created by the organizations, but on how to create a larger pie for both employees and employers. In this sense, employees and employers have aligned interest. High profit for firm means high wages for employees. The function for managers is to train workers to gain maximum productivity. Therefore, the role of manager is important in set up formal organizations because informal organizations are inefficient, featured with soldering.
The managers can achieve the efficient management by designing the tasks in a way that workers’ ability can be fully utilized. The theory had been applied by Henry Ford, who successfully changed the organizational process of Ford company and improved the productivity of Ford company.
Contribution:
1) Taylorism opens the way to understand management in a scientific way and is the starting point for research in management area.
2) Reveal the paradox : on the one hand, formal structures subject to calculable manipulation (rational system); on the other hand, social structures imbedded in an institutional matrix (natural system). How to understand the informal structures of organizations has led to institutional school.
Critics:
1) Dehumanization: It totally ignores the role of workers and treated them as robots.
2) Undersocialized: workers are not just motivated by financial gains. An empirical example is Hwarthon experiment, where workers are motivated by the attentions they are given. This later develop the human relation school.
Manipulation and Natural cooperation
Refusing Taylor’s idea that workers are robots and workers tend to pursue their own goal without control from the managers, Dale Carnegie (1926) and Elton Mayo (1930) emphasize that people have the desire to stand well with their fellows and have instinctive incentives to collaborate with other people, as long as they share the same goals. Therefore, the function of the managers turned to persuade and propaganda workers with common goals and values.
Starting point of management theory:Bernard’s view of organizations
Bernard started a relatively formal organization theory by developing on Mayo’s (1930) idea that organizations are cooperative systems. He focused on the Bell System, which was the first to emphasize the cooperative nature of the organizations and treat workers decently. However, during the Depression, workers and investors were treated quite differently, as AT&T managed to keep dividend but laid out a great many workers. He examined several aspects of the organizations.
Assumptions: 1) Actors have incentive to cooperate. 2) Organizations exists with three key elements – communication, willingness to serve and common purpose.
Propositions:
1) Organizations are production and adaptive social systems.
2) Formal and informal structures are interdependent and primary function of
3) the executives are to devise and promulgate moral visions of the organizations’ missions to achieve the commitment of the participants not to design the efficient organizations.
4) Bernard assumes that organization is able to satisfy the motives of individuals. If an organization satisfies the motives of its members, while attaining its explicit goals, cooperation among its members will last.
Contribution:
1) The executives making decisions with conflict. This leads to decision making school
Critics:
1) Ignore the conflict part
2) Ignore the human relationship part, which leads to the development of human relation school
Human relationship school
This school starts from Hawthorne study, where workers’ productivities were improved when managers gave them attention and separate them from other group members. The main argument is that good leadership is the core for good management. Good leadership leads to high morale, low turnover and absenteeism. Researchers in the Ohio State university tended to find the trait for leadership (1945) and they believed leaders could be trained. Another group of researchers focus on changing the general environment of the organization. Likert’s Theory X (managers believe the workers hate their jobs and use heavy negative sanctions) and Theory Y (managers assume employees will be responsible and achieve common goals to gain individual goals and managers should arrange things for people to achieve common and individual goals) demonstrate two possible group relation model.
References:
Perrow, Charles, Albert John Reiss, and Harold L. Wilensky. Complex organizations: A critical essay. Vol. 3. New York: McGraw-Hill, 1986.
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