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Efficiency, effectiveness and profitability became the most favorable terms describing successful organizational efforts since early days of organized endeavors. Along with the commencement of Enlightenment, industrial revolution and the emergence of capitalist economic organizations these terms became the mainstream benchmarks for evaluating profit-oriented organizations and their economic performance. Today their meanings is elevated to new heights through globalization and effects the global exchanges and the stock markets exert on our culture.
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Since organization(s) can be defined as "a consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or a set of goals" (Willmott pg 27) it should be safe to assume that organizations genuinely serve the best interests of all its members whether they are the principals, shareholders, managers or employees. After all they form the same social group and share a common vision and purpose. Sadly, this appears to be far from the truth when examining majority of profit-oriented organizations through news reports, case studies, employee sentiment or personal experiences.
This essay will examine the reasons for the underlying conflicts of priorities and interests existing between the organizational leaders (principals and managers) and followers (employees) utilizing Organizational Behavior theories and analytical frameworks of insecurity, identity, power, inequality, knowledge and freedom. It will demonstrate that the profit oriented organizations, by definition, cannot genuinely serve interest of employees. Prevailing class struggle (as defined by Marx) between the members who socially construct organizations will continue for as long as efficiency, effectiveness and profitability remain key benchmarks of organizational performance and the primary reasons for creation of capitalist economic organizations.
The essay will define what an organization is, what its purpose is, and who the members are. It will then employ classical theories of Marx and Maslov and the concept of instrumental rationality to explore the core, underlying reasons for conflicts of interests and differences of priorities existing between organizational members. It will examine the relationship between leaders and followers within the organizational structure as well as the influence of individual needs and personal agendas on social construction of organizations and conflicts emerging from these relations. The concepts of bureaucratic and hierarchical structures (Weber) will be introduced as well as evolution of systems of control from scientific management (Smith, Taylor) to human relationship model (Herzberg, McGregor, du Guy) to explain how the systems of control and exploitation evolved over time to becoming even more intrusive by tapping into the psychological domain of employees (through creation of corporate culture, institualization and hegemony.)
Organizations and their purpose
It is important to begin by stating that there are many types of organizations in existence, some of which are focused on outcomes other than profit making, such as non-for-profit, government, military or social organizations. These organizations will be outside of the scope of this essay as it will focus primarily on profit-oriented, "capitalist economic organizations" (Willmott 305) to clearly illustrate conflicts and difference of priorities existing within them since these organizations are the primary driving force of modern, advanced capitalist economies and the most common organizational entities in existence.
A mainstream, definition of organization was already presented earlier. It clearly states the purpose of an organization as "achievement of common goal or set of goals." (Willmott pg 27) This definition serves well to broadly describe organizations whether they are profit or non-for-profit oriented. To define "capitalist economic organizations" we need to add that they are created primarily for the purpose of wealth accumulation and should be further defined with the modernist definition as "well designed and managed [â€¦] systems of decision and action driven by norms of rationality, efficiency and effectiveness for stated purposes" (Hatch and Cunliffe pg14)
Insecurity, inequality and freedom
Always on Time
Marked to Standard
Possibly the most central is the conflict of economic inequality when discussing organizations. It is deeply engrained into fundamental aspect of free capitalism itself. After all the need for wealth accumulation propels the entire system forward. Inequality and competition furthermore dictate labor wages and work rules. When employee accepts a job offer from an employer he gives up certain choices and rights and accepts the ones imposed by the employer (or organization). (GREY 50) In the process he also submits time, experience and knowledge to the organization in exchange for an agreed sum of money.
Capitalist economic organizations are created by owners of capital who combine their capital and resources with labor transforming it into instruments of production of sellable commodities. (Willmott 305) with a clear purpose of obtaining a return on their investment. Knowing that "In liberal capitalism, the owners of the business organization (the 'shareholders') and its controllers and enactors (management) are, broadly speaking, concerned to maximize profit at the minimum cost. " (Willmott pg 145-6) it can be assumed that the rights and rules they impose serve to represent organization's best interest and are generally designed to exploit employee's time, experience and knowledge as oppose to representing his best interests.
This ultimately creates feelings of insecurity and alienation or "disenfranchising of worker from the product of their work efforts." (HATCH 29) because "labor is defined as cost of production, rather than as means to achieve a collective purpose" (Hatch 29). Thus conflict of interests and difference of priorities arise between the employer and the employed. The owners of capitalist economic organizations will always try to obtain a higher return on their invested capital by looking for ways to reduce the cost of labor, primarily by designing systems of control and manipulating the workforce to achieve this goal. "In capitalism, the planning, division and coordination of work are intended to ensure control of the workers in a process that is alienating and explorative. [â€¦] in order to get the maximum application at a minimum cost." (Willmott pg 145)
This exploitive, often dehumanizing process is evident especially when analyzing early perspectives on labor management techniques as presented by Smith and Taylor. In 1776, nearly 250 years ago, Adam Smith theorized in his groundbreaking and still influential today An Inquiry into the Nature and Causes of the Wealth of Nations that the division of labor is primarily responsible for increased production while wages are dictated by the competition among laborers. (XXX XX) It is hard to determine whether his work set the tone of operations (a self-fulfilling prophecy) for future generations of capitalist economic organizations or if he nearly made an early observations into the nature of such wealth accumulating entities, but his theories clearly removed the interest of employees from the agenda of the organizational leaders by accepting the view of the employees as merely providing the raw power necessary to move the organization forward in the most effective way. (YYY 23)
This notion is further reinforced by Frederic Taylor and introduction of Scientific Management in 1880s in which jobs were purposely mechanized and de-skilled (WILLMOTT 310) partially to maximize the efficiency of work but also to create cheap, disposable labor which could replace complex skills with simple tasks that almost anyone could perform with little training. In other words workers were seen merely as an "appendage to the machine" (WILLMOTT 311). Some argue that Taylor paid no attention to complex issues of motivation (WILLMOTT 309) while others believe the scientific management was designed precisely to overcome such issues and eradicate them. (Gray 46-47). Regardless, following Smith and Taylor theories it was generally accepted that pay increase would compensate for repetitive, narrowly drawn tasks (WILLMOTT 309) while favourism and despotism were primary means and widely used solutions for increasing motivation and securing employee productivity (Willmot 310)
Surely, exploiting labor and maximizing profit with scientific management methods offered maximum efficiency, effectiveness and profitability at that time without much concern for human rights. It is perhaps because human rights didn't evolve as quickly as the capitalist economic organizations did developing new strategies for organizing and managing labor. Capitalists could get away with inhumane treatment of employees as there was apparently no fear of workers rebellion that could potentially jeopardize the operations. One of explanation for it is that the needs of early developing economies, and therefore their members, fall within the lowest levels of Maslow's Hierarchy of Needs. And as Maslow bests puts it himself "Motivation: it is about fulfilling human needs" (WIllmott 45). Therefore as long as needs were nominal and pressing (dictated by the poverty) the esteem and self-actualization (including "respect by others") which stand higher within the pyramid of needs could be temporarily ignored.
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It must be understood that capitalist economic organizations are instrumental rationality entities for increasing profits and accumulating wealth. "An instrumentally rational organization or a person is concerned primarily, if not exclusively, with the most efficient means to achieve specific ends or objectives. [â€¦] One might suggest, for example, that private companies are preoccupied with the best means to increase profits" (WILLMOTT 30). For that reason employee needs and interests are of minimal concern for as long as organizations are able to get away with it, that is, until employee revolt through "sabotage, poor quality of work, high staff turnover, or absenteeism" (GREY 49) or otherwise interfere with the main organizational objective - the wealth accumulation.
Marx captured the underlying conflict of priorities within capitalism in his 1876 work Das Kapital. He proposes that due to the existing market competition, organization(s) "profitability depends upon the organization and control of work activity. [â€¦] Since labor is a large component of the costs of production, capitalists pressure laborers to work more efficiently (or at least more cheaply), which is achieved by continuously imposing new forms of managerial control on work process" (Hatch 29) while managers are "encouraged to treat labor like any other raw material, that is, to exploit it for its economic value" (HATCH 29)
Degrading human work to the level of raw resource has its limits however. It lowers employee motivation and emotional wellbeing quickly. Workers subjected to scientific management experienced it as "alien and degrading as they removed individuality and minimized the scope for exercising discretion and creativity" (Willmott 310) and perceived this form of control as "politically and socially divisive weapon that posed a threat to their sense of identity, solidarity and interests" (Willmott 310)
To promote their own interests and priorities in as organized, instrumentally rational way as the capitalists did, workers started forming labor unions (first of them, Knights of Labor was formed just four years after Marx works were published (Wikipedia)). Labor unions agenda was to propagate ideas such as "work to rule" and other, often disruptive forms of sabotage and tactics aimed to "disrupt the organization in pursuit of union aim" (Grey 29).
Again the underlying reasons for these actions were foreseen by Marx. He proposed that "since profit is generated by combination of labor and capital, each side naturally, can reasonably claim that the surplus should belong to them." (HATCH 29) and each side feel strongly entitled to their own rights which creates conflicts of priorities and interests existing between the organizational leaders (principals and managers) and followers (employees.)
It could be argued that any further advancements in organizational theory and creation of different management styles (such as Human Relations Theory) is nothing more than just an elaborate tactical move on the part of owners and managers to appear more humane in their applications of power and control (Grey 47). The change from scientific management is also facilitated by the necessity of evolving society (rise on Maslow's pyramid of needs) and evolving human rights movements.
This statement is easily supported by observing that even though scientific management method is frowned upon and considered primitive and inhumane by today's standards (ZZZZZ ZZ), it is still a predominant form of labor control in many areas of the world (especially the developing countries such as China, Malaysia, Turkey, India, etc.) favored by many international organizations (most famously Foxconn) where working conditions and management style didn't evolve much beyond 1900s. This is because it didn't have to. The economic inequality is so enormous in those countries, while human right are constantly subverted by political regimes and socio-economic conditions that scientific management continues to be most efficient, effective and profitable form of labor control.
POWER, IDENTITY AND KNOWLEDGE WITHIN ORGANIZATIONAL STRUCTURE
The earlier definition of an organization addresses mostly the "formal" aspects of organizations. What fails to be addressed, and which has equally profound effect on organizational conflicts are the "informal" aspects of organizations which deal with power, identity and control of knowledge. This, of course, refers to the "Iceberg" view of the organizations where often easily observable and available things are only a tip of an iceberg, with deeper issues and conflicts hidden underneath a visible surface.
This is because organizations are as complex as people (members) who form and participate in them. They should not be perceived just as synthetic "systems of decision and action" because all organizations are based on human interaction. They are socially constructed and therefore subjected to conflicting individual priorities, needs, motivations, prejudices, anxieties, emotional contexts and politics. In another words "Conflict is an inevitable aspect of organizing" (Hatch 279). Such conflicts, in addition to previously described Marxist class struggle results in continuous power play across all organizational levels (vertically and laterally) and within all organizational groups and subcultures further causing the disconnect between members and primary organizational goals (efficiency, effectives and profitability.)
Even though it could be argued that these issues are more of a reversal to the question whether organizations can genuinely serve the interests of employees (in this case employees are often preoccupied with their own agenda more than with organizational goals) but it must be understood that organizational structure and environment are facilitating these conflicts. Additionally, such conflicts negatively affect interests of all the members within organizations, not just the conflict of the management versus the employees.
To look beyond the modernist perspective and to include these "informal" aspects of organizational culture and conflicts into the analysis a symbolic interpretivists perspective on organizations should be taken which perceives organizations as socially constructed realities, "continually constructed and reconstructed by their members through symbolically mediated interaction" (Hatch and Cunliffe pg14), placing additional emphasis on emotions and experiences as relevant factors of their evaluation (Hatch pg15)
Conflicts of power, identity and knowledge resonates through all levels of organizational bureaucracy partially due to autocratic management and the use of disciplinary power. Since management was introduced by capitalist owners who were looking for ways to control their workers efficiency it was up to managers to decide "when, where and how labor was to be deployed, in an effort to improve its reliability and productivity." (WILLMOTT 306)
Since management represent and enforces (by disciplinary power) the ideologies and interest of the owners, in what Marx defines as "power as domination" (HATCH 265) they are perceived as authoritarian, elitist group within organizations in terms of pay, status and function. (WILLMOTT 299) They also exercise legitimate power within organizations which is embedded within organizational structure and hierarchy and hold organizations together by use of authority as observed by Weber (Hatch 251). This certainly implies conflict between managers and workers. But managers also aim to maximize their own power relative to other members within the organization (Hatch 255). They do this by developing personal networks, controlling and distorting information, promoting loyal subordinates and controlling decision making criteria. (Hatch 256)
Pfeffer argued that "individuals or departments derive power from the ability to provide something that organization needs, for example, a high level of performance, an irreplaceable skill, an ability to solve critical problems or obtain scarce resources" (Hatch 257). This is because power is rational and span outside of boundaries of formal hierarchy. Sources of power can be found in "personal characteristics (a charismatic personality), expertise (skills, knowledge, or information needed by others), coercion (the threat or use of force), control of scarce and critical material resources (budgets, raw materials, technology, physical space), ability to apply normative sanctions (informal rules and expectations set up by cultural assumptions and values) and opportunity (access to powerful persons)" (Hatch 254)
They arise between different individuals, groups and subcultures and
and it occurs when activities of one
"Struggle between two or more groups in an organization [â€¦] centered on some state or condition that favors one group over others and occurs when the activities of one group are perceived as interfering with the outcomes or efforts of other groups" (Hatch 279) certainly exist within organizations.
Robert Dahl defines power as "A has power over B to extend that he can get B to do something that B would not otherwise do" (Hatch 254)
it makes sense to perceive this group as representing different interests and enforcing different priorities then employees would. Marx defined
Organizional Control, conflict and power
and other theories (like McGregor's theory X)
Since different ontologies or perspectives of organizational theory (Modern, Symbolic Interpretivism or Postmodern) can be used to analyze organization(s) depending on what aspect of organization(s) is in focus and depending on the context, this essay will accept a "concept view" (Willmott 28) of organization(s). "In doing so, we acknowledge the meaning of organization(s) to be multiple and contested" (Willmott 28)
More recently, only about a decade or so ago (bestcompanies to work for was established in 2003), employee satisfaction and 'Workplace Engagement' were terms that finally entered a mainstream lexicon and gained some wider recognition.
Rudy home 312 492 7839
Lastly some significance will be given to organizations that attempt to minimize the conflict by trying to empower employees and offering socio-economic incentives as means tending to the needs of their employees and scrutinize whether such actions are genuine or aimed to create more elaborate and evolved form of control organizations exert on their employees.
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