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Business in today's world has become an extremely competitive force changing continuously at a rapid rate. Working in the 21th century requires dealing with a dynamic environment with people that have diverse needs. Every business organisation needs to be managed, and hence there is a need for managers. Even years back there was a diverse need for management of organisations. There have been people who have tried to study management so as to make the most efficient and effective use of their resources. There have been scientific methods, and similarly there have been methods based on people's behaviour. Organisations nowadays use these methods in their business management.
Harold Koontz and Heinz Weihrich refer to management as 'The process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.'(CBSE, 2007) Management has been referred to as an art and a science, some people even call it a profession. With the different levels within the organisation, management becomes a difficult process. Top management, middle management and operational management have to work together in order for the organisation to be efficient and effective. Hence co-ordination can be considered as the essence of management. Planning, organising, staffing, directing and controlling are the key functions of management that work together to fulfil the organisational, social and personal objectives.(CBSE, 2007)
Management has been divided into two schools, Scientific School of Management and Behaviourist School of Management. The main objective of Scientific Management is to increase the economic efficiency. The core of Scientific Management was developed by Frederick Winslow Taylor. Once the base was set, other researchers like Henry Gantt and Max Weber along with Henri Fayol came and built on top of it. Scientific methods were introduced into management to get a general framework so as to make it easier to analyse the problems. Behaviourist Management on the other hand, studies the behaviour of the people in the organisation and finds different way to improve the behaviour of the employees and managers towards each other to be efficient and effective. Elton Mayo is the founder of Human Relations Management (Behaviourist Management) and is supported by Abraham Maslow and Douglas McGregor along with Mary Parker Follett, all of whom contributed towards Human Relations Management.
Frederick Winslow Taylor (1856-1915) is regarded as the father of Scientific Management and was one of the first management specialists. Scientific Management is sometimes referred to as Taylorism. Taylor believed that there was always 'One Best Way' of getting the work done. Frederick Winslow Taylor, also known as F.W.Taylor, developed different studies namely - Time Study, Motion Study, Fatigue Study, and Method Study. By profession an American Mechanical Engineer, F.W. Taylor introduced Scientific Management in opposition to The Rule of Thumb. He is also known for the introduction of the Differential Piece Wage System. (CBSE, 2007)
Max Weber (1864-1920), a German student and sociologist, came up with another approach to the scientific management. Although he wasn't the first one to use the word bureaucracy, he explained many of the features that we use in the present world. The term bureaucracy, previously known as rational-legal authority, refers to six characteristics laid forward by Weber. He believed that instead of being loyal to a particular superior, an employee should be faithful to the organisation. His characteristics state out the fact that the management should have some rules laid out and those should be followed consistently. Another one of the characteristics states out that an employee should be selected based on the knowledge and skill present, rather than personal relationships. According to Weber an authority should not be based on a person's personality, rather the authority should be attached to the job as it would be passed on from one person to another over time. (Cutajar, 2010)
George Elton Mayo (1880-1949), born in Australia, is often regarded as the founder of the Human Relations Movement (Behaviourist Management) as well as of the industrial sociology. In 1926, 4 years after immigrating to USA, Mayo became the Director of the Department of Industrial Research at Harvard University. His belief was that the organisations mainly existed to serve and satisfy the human needs and that the organisations needed the people as much as the people need the organisations. Elton Mayo is known for the Hawthorne Studies that were conducted between 1924 and 1932 at the Western Electric Company's Hawthorne Plant that was situated near Chicago. First series of tests were conducted with lowered illumination level and supervision and it was noticed that output increased in both the cases. But the researchers couldn't explain this increase and this led to the Relay Assembly Test Room experiments (RAT Room Tests) where 6 female employees were selected and were isolated from all the other employees and their daily job routine. The work assigned didn't require machinery and around 10 changes in total were made. All changes increased level of output. Later when original settings were restored, output went up to highest level ever recorded. The Hawthorne Studies showed that a social system had emerged, esprit de corps. The informal organisation was discovered as well along with the fact that workers worked better when in communication with the supervisors and when under supervision. (Donnelly, 2009)
Douglas McGregor (1906-1964) added another chapter in the Behaviourist School of Management. By profession a famous American psychologist, McGregor introduced Theory X and Theory Y as two sets of assumptions about the human behaviour and nature in relation with management. Theory X represented a negative view of the human nature with the assumptions that people, in general, are naturally irresponsible for their work and require constant supervision in their jobs. On the other hand, Theory Y represented a positive view of the human nature with the assumptions that people, in general, are creative, hard-working and responsible. According to Theory X, people try to avoid responsibility whenever they can and hence require heavy supervision. A Theory X manager believes that the employees are least interested in working and that large incentives are required in order to get the work done. Theory X usually leads to Diseconomies of Scale in the organisations. Whereas according to Theory Y, people enjoyed their work and duties. These people are talented and creative and are always ready to get the work done. Theory Y managers create a friendly environment and earn the trust of the employees. Employees even have a say in couple of the decisions of the organisation. A Theory Y manager is under a lot less pressure than a Theory X manager. (Wikipedia, 2010)
One of the main drawbacks that both, The Scientific Management and Behaviourist Management, had was that they both focused on the lower levels of the organisations and didn't give much importance to the middle level and the top level of the organisation. In Scientific Management the people were treated as machines and this usually created a level of dissatisfaction among the employees, whereas in Behaviourist Management the entire importance was given to the Human relations and all the other aspects were totally ignored. Another aspect of the Behaviourist Management that was overlooked was that an organisation consists of diverse group of people that have diverse needs. It is almost impossible to keep everyone in the organisation happy, Conflicts and arguments usually tend to rise among the employees. Similarly in the Scientific Management, the assumption of F.W. Taylor that there always is 'One Best Way' of getting the thing done is wrong since the same thing could be done different ways and the same level of output could be achieved according to the time and motion of the employees. In Scientific Management, There was a loss of skill and decrease in creativity as employees would just do the same task over and over leading to specialisation. In Behaviourist Management, The employees were tricked into believing that they were part of the decision making of the organisation.
On the lighter side, both the Management Schools worked towards efficient utilization of their resources. Scientific Management focused on getting the work done and how the task is being carried out so as to take the least amount of time possible. Behaviourist Management, on the other hand, Relied on better communication between the superiors and the subordinates and focused on making better relationships among the employees since this would create a better environment for the work to be carried out which in turn will increase production. Direct rewards and incentives were provided in Scientific Management so as to increase the output produced. The Scientific Management is responsible for creating a formal chain of command whereas the informal chain of command immerged from within the Behaviourist Management. The Scientific Management as well as the Behaviourist Management had an important objective of developing every branch of the business to its highest state of excellence. This way each of the employees would be developed in a way to reach their highest potential.
Case Study: McDonalds
The Scientific Management principles are being applied by McDonalds in business operations so as to achieve the organisational goals. McDonald's uses many effective ways to encourage employees including wage and promotion programs, hard word, dedication, motivation and results. There are recognised and rewarded from time to time. From a simple encouragement for doing a small job to a diner-wide recognition through 'Employee of the Month' program. Other incentives like gift certificates, merchandise, and free food are provided along with incentive pay system. Higher wages are paid in accordance with the performance of the employees. Long term incentives are also provided to those that have shown sustained performance. (The Scientific Management Theory)
From the above case study it can be seen that Scientific Management is still used in the 21st century. The movement of the workers has been constrained to minimum steps so as to enable maximum efficiency. The employees in McDonalds are encouraged by using different incentives and their needs are fulfilled as well. Higher wages paid according to performance level is an example of the Differential Piece Wage System introduced by Taylor. Also the company is satisfying the employee needs by providing rewards and recognition. This is an example of Maslow's Theory of Human Relations movement.
From the above discussions it can be seen that management is one of the main aspects of an organisation. It is required for the efficient and effective flow of operations constantly. Scientific Management is still being using in the present world side by side with Behaviourist Management but both have their set of drawbacks that are hard to overlook. Taylorism introduced many aspects that increased level of output but was ignorant of the human needs and that people weren't machine. Similarly for the Behaviourist Management, the human nature was given complete important. In today's world neither of these Management can survive without the other coz of the dynamic environment. If complete concentration is given to getting the work done than the Employee Turnover Ratio will go up and if concentration is given to human relations then that company won't be as efficient. Hence a balance is needed between both in an organisation.