The Transition Of Fordism To Post Fordism Commerce Essay

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Everything starts as an evolution from simple to complex, with a need of development towards a better system being defined on different levels from personal (psychological), to social, economical, financial, political status within society.

Production and consumption has been the base of evolution within any industry where the human factor was seen as a determinant factor within any economical environment.

We could say that everything is related to how we can find the most efficient and effective mean of running any organization.

A big part of classical approaches to organizational management beside early organizational theories, were formed to predict and control behaviour within organizations. They emerged in the early part of the twentieth century and were created based on military and Catholic Church history. Focused on a strict control of workers under an absolute chain of command having a predictability of human behaviour combined with a unidirectional downward influence these will become the base of management theories.

In order to get high result in the mass production, in the early years, the main focus was on product methodology and manufacturing not on people motivation. Retention was not seen as an important factor at the workers� level. In the late 1800, most of the theories started from the scientific management with Frederick Taylor (1856-1915), Lillian Gilbreth (1878-1972 ), Henry Gant, continued by administrative theories by Henry Fayol (1841-1925) followed by Max Weber`s theory of bureaucracy and many others.

In scientific management, Frederick W Taylor was saying, that the managers and not the workers are the ones to determine how the work is to be done. Some of the main underlying themes were: managers are intelligent and workers should be ignorant; workers are being motivated only by wages; a maximum effort is equally rewarded by higher wages; managers are the only ones responsible for the planning, training and evaluation.

In the administrative theory (Fayol) were formed five elements of management: planning, organization, command, coordination and control. The main idea was to keep machine functioning effectively and replace quickly and efficiently any sector from any part of the production process that did not contribute to the objectives. A different attitude towards the worker was taking form. The workers were being motivated by more than money. A new uniform equitable payment system was formed, which motivates the workers in order to contribute to a better organizational success.

. Max Webber (1864-1920) did try to describe an ideal or pure form of an organizational structure which could function having a general policy along with specific commands. He was making some point on the hierarchy of a company, every detail needed to be recorded, specialized training, rules, etc. This new system of details/ rules written/recorded did make a legally/officially step in defining the management as an authority that was trying to to run the companies in a effective and efficient way. A new theory was introduced, behavioural management, having a different approach to motivation. This was studying how the managers should behave in order to motivate workers to achieve better performance. A high shift from pure mechanical and economical view of the worker`s motivation and recognition to a social relationship, was happening during Hawthorne period (1930`s). The worker started to have a better value in the eyes of the management. The worker could analyze and improve the job, had relevant knowledge of the task, therefore direct control of the task.

All these theories were present during the life of Henry Ford (1863-1947). He started his company in 1903, producing three cars (three workers allocated to produced one vehicle) a day. Due to growing demand, Ford built a factory which was using standardized interchangeable parts and a conveyor-belt based assembly line ready to produce a car in 93 minutes, producing almost a million cars a year. The complexity of his company was reaching high levels incorporating glass factory, steel mill and the first car assembly line.

Ford had started to create a new human resources management style to suit his business. Fordism was all about accumulation, a well connected relation between mass production and mass consumption. The production methods were very direct, standard and simple with specific segmented tasks. Nothing is particularly hard if you divide it into small jobs. In the scientific management, the focus was on the way work was done, in the best way, by improving the methods used by employees. The common part of both management styles were the mechanisation, fragmentation and specialisation of work and the lack of intellectual (skilled) content of workers systems. Ford was separating very clearly the human emotion from the practical side, whereby he was using `humans as instruments or machines to be manipulated by their leaders` (Hersey p.84). Ford was clearly focusing on mass production methods (a combination between assembly line, single purpose machine tools and standardized products). He was not interested in retaining people, because he was using semiskilled or unskilled workers who could be easily replaceable. Ford moved to a new type of management by including a hierarchical authority and technical control. Due to the market, the goods that they were produce were low-quality, low value and in a very high volume. The workers were poorly motivated, bored of repetitive tasks, which lead the company to have a high labour turnover and absenteeism. Ford was using methods like no creativity, work defragmented with minimal tasks for employees, monotony with the line production, associated with an increase of the production quotas. Due to this, people were losing interest in work, point where, he tries to retain his workers doubling the wage of each worker to 5 dollars a day, in order to win their loyalty and improve their efficiency. This type of management model was used across industry in different industries.

It was only at the beginning of 1970 when the new methods and models of human resources were born which defined a new era called Post Fordism. The beginning of a great crisis of capitalism, started to appear with issues like unemployment, a growth in public deficits, third war, high world debts, an inflation that forced the golden era to move towards a new period of forced restructuring.

New theories in motivation and retention start to take a different form. There are new sublevels to the production changes such as hard and new technologies, organisational, labour and industrial relations, work force profile and a new work culture, small-batch production, economies of scope, specialized products and more different specialised types of jobs.

The idea of mass production, which was a characteristic of the previous period of capitalism, came very close to an end. The society was moving towards a new stage to create new institution which would embrace flexibility as opposed to the previous period�s rigidity.

Some of the attributes that are characterising the Post-Fordism are the globalization of financial markets, new information technologies, the rise of the service and the white-collar worker, the feminization of the work force. A very common phrase from Henry Ford, `people can have the model T in any colour �so long as it`s black` , changed dramatically during Post Fordism in to �You can have whatever colour, and any model, you want, when you want it� proving once more the fact that flexible specialisation changed radically in marketing strategy of the companies. Compare to Fordism era, firms started producing new products which could cover a more extended market, searching for a more complex group of consumers. From a mass market, the market was changing its format to smaller types, groups which are interested in different goods like luxury or custom type. It was a moving production type, from scale to scope. This was defined by the economic and politic changes that push society to a new point, globalisation period, where the western world moved towards second- and third-world countries, where production would be much cheaper. A new manufacturing stage, just-in-time, was forming due to the new information technologies like the advancement in computer technologies which was used in machines and operations. A new step was made in changing the size and the adaptability of the companies, making once more a difference in the firms� strategy � integration instead of fragmentation, which characterised Fordism. New types of small and medium firms were becoming more specialised in producing part of final products. They were increasing the competition pushing the quality of final product to better levels, becoming easily, part of a chain stage from raw material to a final product. At this point everything was all about creating better, high quality. The workforce took a complex turn forming new types of employees from permanent, part-time, temporary, self employed, home workers to different type of contractors which help them to become more motivated in their work environment. The connectivity system between the employers and employees was changing from command control to a more educated communication level. During the Fordism there were strong divided social classes based more on the financial status, but in Post-Fordism more and more social clases based on gender, race, culture, religion were taking birth. The possibility of small, medium firms and workshops became important. They started to produce goods of high quality which triggered the need for well paid highly skilled workers. Compared with the Fordism era, the education of the worker changed radically, from unskilled to highly skilled through semiskilled and skilled levels.

New departments within the company (human resources departments) took over this challenge of improving the way in which organizations and people are managed. The Human Resources were dealing with education, training, skills, commitment of it work-force, information about the organization, safety and security information, general policies and procedures, job duties and responsibilities. Comparing to the Hard model that Ford was using, where the connection between management and work force was poor, the Soft model changed completely the attitude of the employers towards the employees. This will have a strong effect on improving productivity, profitability, the nature and conditions of work (health and safety), commitment to the companies and many more. In Post Fordism era the employer is interested in well educated workers, (unidirectional knowledge, expert in the field), which he/she can trust. Nowadays, this interest becomes higher (depending on level of positions) in people with multidirectional knowledge, capable to adapt and perform with high results in different environments. This becomes a main reason for companies to adopt policies and strategies, to offer employment security and future career prospects beside an extensive training and development of the staff in order to retain and motivate employees (on many levels). By doing that, the employee, compare to Post �Fordism (where the worker was anytime disposable), was defined as an asset (thru their own knowledge and experience) to the company. Another point was been made by changing the way in which the employees were involved directly in running the company (marketing, economic, finance, strategy) by giving them bigger responsibilities. Some of the employees were encouraged to use their entrepreneurial attitudes, something that was changed from Fordism were the attention was focused on a unidirectional command, from managers to workers only. The participation and involvement of the employees into the financial performance of the company was made through constant meetings where the employers was presenting the goals of the organization as a common direction and the employees together with the employer discussed the performance evaluations, appraisal, information about the way in which employees could change in order to improve their performance.

Theories were developed in the Post-Fordism era by Abraham H. Maslow, Frederick Herzberg, Clayton P Alderfer, Douglas McGregor, John Stacey Adams and many others in order to improve the way in which employees could improve as a whole life cycle their professional and personal lives in the same time. In order to improve and to benefit from it, retention and motivation had to be well defined through psychology.

A point was made by making the difference between positive and negative, intrinsic and extrinsic motivation. The positive and the negative motivation were related to the enjoyment, optimism or the undesirable attitude in which we swim towards the task that we were assigned with; followed by the consequences. The intrinsic (the one that refers to the motivation that comes from inside such as personal goals, values, morals, happiness, willingness and eagerness to learn, physiological, social needs, etc) and extrinsic (money, people around you, good grades, rewards, etc) motivation started to provide more insights in why we behave in certain ways in different environments. Another theory in psychology was the Maslow`s hierarchy of needs.

Personal growth and fulfilment

Achievement, status, responsibility, reputation

Family, affection, relationships, work group

Protection/security, order, law, limits, stability, insurance

Basic life needs � air, food, water, sleep, shelter, warmth

Maslow theory focused mainly on human study, on how people behave in their lives (personally or professionally) based on environment, affected sometimes by different types of motivation. This pyramid of needs was prioritised and treated level by level. That was proving that the human is in continuous self development and grows based on opportunities that arise in one�s life. Having strong motivators such as justice, truth, wisdom and meaning will provide the access to good life experiences, happiness and harmony.

The Two Factor Theory belonging to Herzberg`s motivation-hygiene theory made a very clear point in the way the satisfaction and dissatisfaction acted independent of one other.

His theory was based on a study made on employees (203 American accountants and engineers in Pittsburgh) within different work environments, which were included in his book The Motivation to Work (1959). Herzberg was saying that the employer`s management team had to give hygiene factors in order to avoid the employee dissatisfaction along with intrinsic factors so that the employees will be satisfied with their own work environment (relationship between the job one is asked to do and the conditions in which one is expected to work).

Douglas McGregor formulates a new model named Theory X and Theory Y. In the first one, theory X, he was presuming that the workers need to be supervised because they were lazy, with little ambition, ready to avoid responsibility. On the other side, Theory Y, was opposite. Here the employers enjoyed to work mentally and physically, ready to accept responsibility, exercising self-control and a self-direction in task completion. Theory X was more suitable for mass manufacturing, close to production workers. Theory Y was used in professional Services, in departments with skilled and highly skilled workers (managers/professionals).

The main point that comes from these theories is that motivation comes from within and if the worker is feeling fulfilled, than the output of work is improving radically - �if employees are happy and satisfied, profitability will increase on its own�.

Over the last 20 years the job market has become complex. Employees are becoming more aware of their rights therefore they will research more the nature (structural, strategically, location, financially, job security, opportunities, family/personal time, etc) of the company. Reasons such as no growth opportunity, no rewarding salary, no professional improvement, no personal life, unusual physical strains, disrespectful attitudes towards employees from management (seniors) levels, were issues needed to be solved by HR departments. In order to foreseen problems like these the firms need to embrace good retention strategies such as hiring the right professionals for the right positions, a good level of communication within the company, clear goals (expectations) of the company and employees as well, long-term incentives plans, a well reward system in place, recognition in different forms, benefit packages, sometimes more responsibility, good compensation packages, a well balance between work and personal life, etc. A well developed human resources department has the role in risk reduction within organizations. This becomes a two way road because, by motivating the employee, positive effects can be seen in saving money in replacing or recruiting new employees (there are costs in retraining, time wasted in new employee accommodation within role/company).

We live in a modern society ready to evolve and change according to any challenge that lies ahead. This has been proved by the way in which so many industries have been affected by economic, financial, social, political situations, pushing production lines, technologies, management theories, internal and international markets (globalization) and marketing strategies to continuous development.

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