Management is a broad subject and time has been spent to analyse it.
The study of organisations and their management, therefore, has to proceed on a broad front.
No single approach provides all answers. It is the comparative study of the different approaches, which will yield benefits to the manager.
A central part of the study of the organisation and management is the development of management thinking and what may be termed management theory.
The application of theory brings about change in actual behaviour.
Managers reading the work of leading writers on the subject might see in their ideas a message about how they should behave.
There are different ways of categorising the various approaches elaborated by school of management theory (Figure 1).
The following two theories will be looked at in order to spot the problems caused by the management at Aussieco.
1. Classical theory
2. Human relations theory
According to the classical writers thought the main emphasis goes on the planning of the work, the technical requirements of the organisation, principles of management and the assumption of rational and logical behaviour.
A clear understanding of the purpose of an organisation is seen as essential to recognise how the company works and how its methods of working can be improved.
Identification of general objectives would lead to the clarification of responsibilities and purposes at all levels of the organisation.
Many of the classical writers were concerned with the improvement of management structure as a mean of increasing productivity.
Comparing the Classical writers thought with the actual management structure at Aussieco will prove the unstable and badly structured companys position.
Aussieco is an Australian company established in1962.
The owner has been able to retain full control and ownership, acting as chairman and chief executive officer since the foundation of the business.
Although he makes most final decisions, he is not involved with the daily running of the company.
The executive managing director is the owners nephew. He is a neo-graduate with no industrial experience, completely unsuitable to cover this position.
The key person of the organisation is the general manager. His role consists of organising and supervising five subordinate sectors: administration, programming, production, design and development and sales and service.
The production manager is the busiest figure of the company, although the lowest paid.
The production supervisor has a little knowledge of the day-to-day tasks of his subordinates.
Personnel management is incompetent and unable to hire the right staff.
Personnel managers negligence brought the company to deal with a secretary for the drawing office who had never seen drawing before; a programmer with no experience of working with the program used in production and several others problems.
The picture described above underlines the bad situation the company is facing.
Emphasis on purpose, formal structure, hierarchy of management are far away from being properly defined. Moreover, clarification of managers responsibilities is very confusing.
Human Relations Theory
The main emphasis of the classical writers was based on structure and formal organisation.
During 1920s, years of great depression, larger attention began to be paid to the social factor and to the employees behaviour within the organisation rather than the organisation structure itself. This is what the human relation theory is about.
Human relation at Aussieco is a big issue.
The ideas concerning the importance of work groups, communications, motivation and job design are totally missing.
Staff finds little to be proud of in belonging to the company. The all process is driven by fear. The lack of communication is so high that employees are afraid to say or do something scared of loosing their job.
Workshops, the heart of the company, are unsafe and unhealthy places to work in.
They are open, with no doors, cluttered and filthy.
The tin roofs are without insulation and leak during heavy rains; buckets must be strategically placed to catch the water.
Management is not concerned at all about employees morale, the only worries are the operation and maintenance of the machines.
Promotions and bonuses are two words not very familiar at the company.
The organisation appears reluctant to promote its own staff.
Bonuses are sometimes paid at Christmas, depending on the profitability and the whim of the owner.
Human relation writers demonstrated that people go to work to satisfy a complexity of needs and not simply for monetary reward.
The verb run is very often used in the case study to emphasise the employees desire to run away from the company as soon as they can.
Figure 1-Approaches to organisation and management
People management problem and management style
People management at Aussieco was poor and incompetent.
The lack of guidance, motivation, communication and group activities have brought the company being declared bankrupt.
Beyond the money, people expect more out of their work. They wish to contribute, to see that their contribution is making a difference. Employees are willing to learn, to grow and mainly they want to feel that they are part of a successful enterprise.
Workers deserve to know why they are doing something, they need input and accessibility to their managers.
The expression management style has a particular meaning in employee relations.
Style is used in a global way to refer to management overall approach to handling the relationship between the organisation and its employees.
A basic scheme of management styles was devised by Alan Fox , who drew a fundamental distinction between two contrasting management frames of reference: unitarist and pluralist.
Managers with a unitarist frame of reference make the assumption that an organisation is basically integrated and harmonious whole. At heart all organisational members, both management and employees, are seen to have a common purpose: the success of the company.
Conversely, with pluralist managers the organisation is assumed to consist of a number of competing groups, all of whom have different interest to pursue.
As such, there is always some potential for conflict.
A more recent and rather different method of describing styles is the one developed by John Purcell (1987).
He points out that style in employee relations can be much more a matter of strategy and policy. Therefore, management can focus on either one or both of two different aspects of the relationship between an organisation and its employees.
These are quite different dimensions of the relationship, and each one can be thought of as a continuum along which there is a range of behavioural options. (Figure 2)
Figure 2-Purcell’s scheme for mapping management style
The individual dimension, at one end, is concerned with the extent to which employees and individuals are regarded as important within the organisation and, at the other extreme, there are firms who are said to adopt a labour control focus. Employees tend to be viewed simply as one of the overhead costs of the business.
In the middle of the continuum is what Purcell calls paternalist focus.
Although there is a little emphasis on employee development and career progression, these firms have a strong sense of social responsibility and caring towards individuals.
The collectivist dimension describes the extent to which an organisation adopts the idea that employees should be involved in decisions that affect them.
At the end of the continuum are firms with an unitarist focus, where the word is used very much the same way as in Foxs scheme.
At the other end are firms with a co-operative focus, which involves very strong attempts to build constructing working relationship with collective organisations of employees, and to involve them in a wide range of decisions.
In the middle are firms who are said to have adversarial focus.
It emphasises managerial prerogatives and strict attention is paid to agreements and procedures.
The individual dimension, focused on employee development, is the line that the new management should follow in order to get the best results.
Managers should strongly emphasise the importance of each employee as organisational resource.
The fact that many people voluntary work unpaid overtime at Intech when a job needs completion or a new project is at a crucial stage is determined by the fact that beyond the money people wish to contribute. Therefore encouragement and help must be involved in the new organisation.
Resistance to change and management behaviour
Despite the potential positive outcomes, changes are often resisted at organisational level.
Resistance to change appears to be a common phenomenon, it can take many forms and it may be difficult to identify the exact reason for the opposition.
Some common reasons for individual resistance to change within the organisations can be categorised under the following headings.
? Habit. People tend to respond to situations in an established manner.
Habits may serve as a means of comfort and security and as a guide for easy decision making.
? Economic implications. People tend to resist changes that are perceived as reducing their pay or their rewards or seen as an increase in work for the same level of pay.
? Loss of freedom. There will be resistance if alterations are seen as likely to prove inconvenient, make life more difficult and reduce freedom of action.
? Security in the past. There is the tendency in some people to see security in the past and any changes may be frightening.
? Fear of the unknown. Changes tend to generate in people anxiety and fear. Transformations in the organisation may represent a degree of uncertainty.
Although organisations have to adapt to their environment, they may set up defences against changes and they prefer to concentrate on the routine things they perform well. Some of the main reasons for organisational resistance against change are described below.
? Maintaining stability. Organisations tend to maintain stability and predictability. It is very important in order to keep a formal organisation structure, rules establishment and definition of assigned responsibilities and duties.
? Investment in resources. Changes may require large resources that may already be committed to investments in other areas.
? Threats to power or influence. Change may be seen as a threat to the power or influence to a certain groups within the organisation, such as their control over decisions, resources or information.
In order to solve the problems that may occur, as a consequence of the new implementation, managers should comply with the following factors.
? Consultation and participation.
The managers should attempt to solicit the co-operation of staff and help them to feel that decisions that are taken are in their own interest.
This comes from a high level of consultation and encouragement for staff to participate in the decision making process.
Motivation is an important aspect in the operation of a control system.
Lack of positive motivation can lead to frustrated behaviour resulting in lack of commitment and poor job performance.
? Organisation structure.
The structure of an organisation can affect the implementation of control system.
Organisation structure can be distinguished in terms of two divergent system of management practice, the mechanic and the organic system.
The first is a more rigid structure and is appropriate to relatively stable conditions. It is characterised by a clear hierarchical structure of authority and closely defined duties and responsibility.
The organic system, however, is amore fluid structure and happens to be required for conditions of change and for uncertain environmental influences.
This system is characterised by a network structure of control, authority and communication, the continual adjustment and redefinition of jobs.
? Leadership style and system of management.
The style of managerial leadership is a function of the managers attitudes towards people and assumptions about human nature and behaviour, for example McGregors Theory X and Y .
The main point of Theory X is direction and control through a centralised system of organisation and the exercise of authority.
By contrast, Theory Y is based on the principle of the integration of individual and organisational goals.
? Management and objectives.
A system of management by objectives may allow staff to accept greater responsibility and to make a higher level of personal contribution.
The main features of management by objectives are the setting of objectives; the specification of jobs; identification of key result areas; agreement of standard of performance; control, review and adjustment of objectives.
One of the most important factors in a successful implementation of organisational change is the style of managerial behaviour.
In certain situations and with selected members of staff, it may be necessary for management to make use of hierarchical authority and to attempt to impose change through a coercive and autocratic style of behaviour.
In most case, however, the introduction of change is more likely to be effective with an involving style of management behaviour. If the staff is kept fully informed of proposal, are encouraged to adopt a positive attitude and have personal involvement, there is a greater likelihood of their acceptance of the change.
Change in culture at Aussieco and consequent problems
A popular and simple way of defining culture is how things are done around here .
For example, Atkinson explains organisational culture as reflecting the underlying assumptions about the way work is performed, and what behaviour and actions are encouraged and discouraged.
Culture helps to explain why different groups of people perceive things in their own way and perform things differently from others groups .
Align culture within an organisation is clearly an important ingredient of effective organisational performance.
At the heart of organisation development and improved performance is the need for effective management.
It is the role of the management to act as an integrating activity and to co-ordinate, guide and direct the efforts of members towards the achievement of goals.
The pervasive nature of culture as how things are done around here, common values and beliefs will have a significant effect on organisational processes such as decision making, design of structure, group behaviour, motivation and job satisfaction.
Brown suggests that organisational culture can be a powerful tool to improve performance and the key to effective leadership and organisational development.
However, it is important that effective leadership and workable organisation design and development programmes must be based on sensitivity and understanding of culture. Moreover management should create a climate in which people are motivated to work willingly and effectively.
Management have to pull Aussieco employees in the same direction Intech staff goes and their contribution should fit together to produce a whole.
If these requirements are not met, managers are misdirected and their efforts are wasted.
The unequal nature of organisational life of Aussieco and Intech could cause difficulties.
It may be expected that Aussieco will affect the healthy organisational environment at Intech; spoil the harmony in working relationship, loyalty and commitment to the goals and objectives of the organisation.
Conflicts could emerge as a consequence of poor communication or personality clashes.
Divergences among competing groups may be seen as inevitable. Conflict is a feature of the unequal nature of organisational life and a means of bringing about change .
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Cascio W. (1998) Managing Human Resources, McGraw Hill
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