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Regardless of the type of the organisation every organisation passes through the times of the unfamiliar challenging and traumatising situations which they might not have ever faced before. At these times organisations or companies are very vulnerable to the continuously fluctuating financial environment. An inability to approach an appropriate strategy or apply a proper management theory might result in huge loss to the company and at worst even collapsing of the company. So, a company should come up with proper management approach. Simply put, management is the system of utilising the limited resources and gaining optimum from it through planning, controlling, leading and commanding.
There are different theories by different management thinkers at different times which are very important in the management process. Not only the theory, but the history of the management is also very important. Some might argue that the history is not relevant to the current contemporary management But it is not so. History is as important as the theories. History provides the understanding and importance of the historical context of management and helps the mangers to avoid the possible mistakes and approach a suitable strategy to tackle problems.
The management theories in the early days were not actually theories; they were more of a random practices and experiences. So to have a proper theory, many management gurus or experts have burrowed many aspects of disciplines from different areas to make a compound or symbiotic management theory a compound theory relating to its supporting disciplines such as mathematics, statistics and behavioural science.(http://www.scribd.com)
Hitt and others (1979) have classified the management theories into three broad main groups which are Classical management theory, Neo classical theory and Modern theory.
Classical management theory is the first school of management theories which was propounded at the early dawn of the twentieth century. This perspective includes two ideas: scientific management and administrative management.
Frederick Winslow Taylor (1856-1915) is considered as the "father of the scientific management." Taylor mainly focused on the connection between the workers and the machines-based production system. Taylor wrote that, "the principle object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for the employee......" (Taylor,1917,p.19). The scientific management theory includes principles and practices that are concerned with the efficiency and systematization of the management. The main four essences of Taylor's scientific management theories are; each employee's job needs to be divided into parts and the scientific and efficient way to do that should be determined, the employees should be properly trained and educated to perform the tasks, there has to be a good co-operation between the managers and the employees to do the jobs more efficiently and there should be division of labour between the mangers and the labours. (Griffin, 2008) However, labour argued that it is only a new way of getting more work from each employee.
Unlike the scientific management, administrative management focuses on the whole management system. The major contributors of administrative management were Henri Fayol (1841-1925), Lyndall Urwick (1891-1983), Max Weber (1864-1920), and Chester Barnard (1886-1961). Henri Fayol was the most popular and most articulate spokesperson. Fayol was the first to indentify the four main specific managerial functions of planning, organising, leading and controlling and is also referred as "the father of modern management theory" (Koontz and Weihrich, 2007)
The classical perspective of management surely had some limitations. The main limitation were the fact that these theories are more appropriate for small and stable organisations but for more bigger and dynamic organisation it is not that appropriate and this theory takes employees as a tool rather than a human.
Whereas the classical school of management viewed organisation and jobs from a more mechanistic point of view, the neo classical management school, in contrast, place more emphasis on the individual level and behavioural aspects of the workplace. The two important schools namely human relation school and behavioural school fall into the neoclassical school of management.
Human relation theory says that the efficiency of the workers depends firstly on the social context of the workplace. Elton Mayo(1880-1949) who was a professor at the Harvard Business School is one of the main theorists to come up with the idea of HRM. He recognised the influence of social attitudes and relationships on the performance which was neglected by the scientific management. Elton Mayo along with his colleagues undertook the famous experiment at the Hawthorne plant. They found out that changing illumination for the test group, shortening workdays, and varying incentives pay system did not seem to explain the changes in the productivity. Mayo then proposed the idea that works are not only concerned with the pay, they are better motivated by social factors such as the interaction, appreciation, self satisfaction, working environment and the feeling towards what they do. "This phenomenon, arising basically from the people being "noticed", has been known as the "Hawthorne effect"." (Koontz and Weihreich, 2007) He also proposed that management that would understand the human behaviour and serve it through such interpersonal skills as motivating, counselling, leading and controlling. According to Mayo, the incentives can only come into action only if the working group formation is satisfied. (Boddy,2002)
The other two main management thinkers who supported the human relation movement were Abraham Maslow (1908-1970) and Douglas McGregor(1906-1964). Maslow's hierarchy of needs suggests that people are motivated by a hierarchy of needs including monetary incentives and social appreciation. Meanwhile, Douglas McGregor explains the two sets of attitudes that managers have towards their workers through theory X and theory Y. see Appendix 1
Modern school of management is the more sophisticated form of the classical and neo classical theories which consider wide areas of human, scientific and administrative aspects.
The given case study of the Muddles Corporation reflects the problems most of the business organisations are facing right now. The glooming financial environment has created confusion among the business companies. For this, the Corporation is approaching different strategies of redundancies and even the pay freeze for a certain time. However, the workers don't seem to be co-operative with the management and the rumours of the management's further steps are only making it worse. Rather than helping out the company to overcome this glooming condition, the workers are less motivated and less dedicated due to the rumours of redundancies and pay freeze. It clearly shows that there have been some problems selecting the proper strategy to tackle this problem.
There is no hard-and-fast rule in management. Even for the same type of problem different management strategies are applied in different corporations. In the case of Muddles corporation Mayo's theory is more relevant than the Taylor's. Taylor's theory sees workers as some sort of machines and something only as a monetary value. But in sensitive condition as in Muddles Corporation it would be even more damaging for the corporation with the Taylor's theory. In such cases a corporation needs the full support, motivation and dedication of the workers. So Mayo's theory might be helpful in this case.
Mayo's theory suggests having a good interaction and good social relationship among the workers and the managers could be beneficial in this case. A better communication among the workers and managers help both the managers and the workers to better understand the problems. A regular interaction with the workers about the problems makes the workers to feel like a part of the company. A feeling of "I am a part of something" always motivates the workers to give their best and even sacrifice something for that. Moreover, a better communication also helps the management to realise the weak points and find the most effective solution. The decisions that a corporation takes should also involve the workers as well. This develops a positive attitude in staffs towards the company and this positive attitude increases the motivation and productivity.
Apart from this, appreciating the workers is very important. Acknowledging them motivates them to make an extra effort. If the corporation can succeed to motivate even only half of the workers then the productivity can rise drastically. The productivity of the company highly depends on the effort each workers put rather than only on the technologies and resources.
Seeing the Muddles Corporation case, it seems that there is a lack of good communication and good relation among the workers and the managers. So maintaining a good relation is very necessary for Muddles Corporation. If it can maintain a good relationship with its workers with the above mentioned methods half of their problems are solved. A good relation makes it totally easy to convince the workers about some discomforts and compromises that both the company and the workers have to face without making them panic and making the condition even worse.
Working in groups might as well be very helpful. A business should re-organise production to encourage greater use of team working and introduce personnel departments to encourage greater manager involvement in looking after employment interests.
The root of the problems in Muddles Corporation is not only the financial downturn. It is the problem inside the company that is the root to all the other problems. A better social, psychological and motivational relationship among the workers and the company is the main solution for the problem in the Muddles Corporation which is also the preventive measures for such problems in future.