management and human relations

Management is described as the process of “letting other people do things”. This is accomplished in organizations, industries, and business enterprises that employ large numbers of people to achieve business goals. Managers are collectively the bosses who are invariably very well paid and/or rewarded with equity in the company with a share of the profits. The top management agrees on the goals as well as the strategies and tactics to achieve the goals they have set for the company they run by employing a large workforce to manufacture the goods and provide services to consumers provide to the whole world.

Management theory, about how to get the best out of front-line workers in industrial and commercial enterprises, became a 20th-century phenomenon. Earlier, after the Industrial Revolution, large concentrations of workers in mills and factories were required to mass-produce goods, replacing agricultural and artisanal labor hitherto produced in small rural families or communal units. At that time managers were authoritarian and tyrannical when forced labor or forced labor, including child labor, could be used at starvation wages at the behest of the capitalist ruling class.

Since then the world has changed and owners of capital can no longer treat labor as disposable. Unions, communism and education, and global markets meant that the old methods of almost forced, repetitive, backbreaking “dark satanic mills” could no longer be sustained. New disciplines such as economics, psychology and sociology emerged. These social sciences were challenged to develop theories of managerial and organizational behavior that would explain and help understand the dynamics of an increasingly sophisticated and demanding workforce.

Early management theories, exemplified by the work of Frederick Winslow Taylor, were colloquially described as a “carrot and stick” approach. Taylor coined the term “scientific management” for his theory, which was later referred to simply as “Taylorism”. He tried to break down tasks into their simplest elements so that an assembly line robot could perform them without thinking. All brainwork should be removed from the workshop and left to managers alone. Taylorism is explained as “decoupling the work process from the skills of the workforce” and defined as “management strategies based on the separation of conception and execution”. This approach worked well with early immigrants to the US who had little command of the English language and had limited social or community life, but proved less effective with future generations.

However, the principle still applies in automated plants that use very high-tech solutions for 24-hour routine jobs with little or no human intervention. Researchers concede that McDonald’s and outsourced call centers (customer service operations) can employ such strategies and claim success by ensuring “predictability and controllability.” A recent example of scientific management still in operation is Malcolm Moore’s report entitled “Bullys in China’s Shops” (The Daily Telegraph, March 6, 2010). He describes the working conditions of 38,000 workers living in dormitories and working for one of 102 factories belonging to either Foxconn, Quanta or Pegatron, all Chinese companies that make US Apple products (e.g. iPhone) for the global market. Oddly enough, it is these supplier companies that are increasingly “come up with new designs and technologies” and “have their finger on the pulse” (ibid.). Today’s Chinese workers seem to be using their brains even without the “human relations” approach!

Elton Mayo’s Hawthorne plant experiments (1927-32), conducted at the Western Electric plant in Cicero, Illinois, led to a theory as a departure from Taylorism that came to be known by its many adherents as the school of human relations. Douglas McGregor dubbed Taylorism and similar top-down command-and-control approaches to work management Theory X, instead proposing that Theory Y gives employees greater autonomy and discretion at work by borrowing Elton Mayo’s human relations approach follows. Mayo’s experiments included changing the lighting, changing work hours, and taking more or less breaks, resulting in workers producing more with each intervention. The “Hawthorne Effect” has been summarized as employees becoming more productive because they knew they were being watched benevolently by respected people who happened to be social scientists. These experiments proved that “an increase in labor productivity was induced by the psychological stimulus of being singled out, being involved, and feeling important.”

The conclusion is that the ‘Hawthorne researchers … identified the importance of the ‘human factor’ in organizations (leading to workers being now recognized as having social needs and interests, that they were no longer viewed as economically motivated automatons could be provided for by Taylorism.” It must be noted, however, that in the 19th century there were Quaker industrialists who met the “moral and social needs” of their workers by providing housing, places of worship, and other communal amenities .The Cadbury Chocolate Factory plant in Bournville in the UK is a case in point.The Human Relations School is set to take up work from the Tavistock Institute in London,which has undertaken to study the work of miners.They, too, understood that Labor simplification and specialization does not increase productivity refused, but gave the working group more autonomy in organizing their work shifts and achieved better results. Under conditions of uncertainty when engaged in non-routine tasks, “semi-autonomous” work teams performed better than isolated lone workers.

Another theory that was not exclusively applicable to management but was a general psychological theory supporting the human relations school was Abraham Maslow’s Hierarchy of Needs. McGregor referred to it as Theory Z. Put simply, it can be represented as a pyramid with its broad base beginning with the physiological needs (lowest) that had to be satisfied first, before attention had to be turned to safety needs, followed by needs for love/belonging and then for appreciation needs and at the highest level self-actualization needs.

One company that may have subscribed to the classic theories of employee motivation but found them unfeasible at their expense was Iceland Frozen Foods (The Sunday Times, March 8, 2009). Four years before reunification, the company’s morale was “at rock bottom after 40% of the staff at Deeside headquarters were laid off”. With a change of tactics, CEO Malcolm Walker managed to get the workforce to “have confidence in the leadership abilities of the senior management team, which achieved a top score of 73%.” Since workers’ basic needs of fair wages, decent working hours, paid holidays, non-discrimination (gender, race, disability, etc.) i.e. equal opportunity are respected (now enforced by law), workers will seek higher-order Maslovian needs with their daily work be satisfied. This is what Iceland Frozen Foods was able to offer its employees after moving to the human relations model of treating employees.

Malcolm Walker, nicknamed the “King of Cool”, initiated measures to give his workers the opportunity to advance through hard work and use of their wits. For example, a factory worker who became a home delivery driver managed to rise to the rank of senior supervisor within a few years and is quoted appreciatively in the article about his boss. It is reported that Iceland Frozen Foods employees do not feel under too much pressure… and do not suffer from work-related stress. A survey of a representative sample of UK businesses found that Iceland Frozen Foods was voted the third most successful company in terms of motivation to do their best at work, compared to all other companies, by a workforce of over 17,000 men and women. Here is a good example of how human relationships work and solidly support the movement.

Another example that raises a different aspect of human relations theory comes from the current trend toward globalization. Euro Disneyland, a “transplanted American theme park” near Paris, lost $34 million in the first six months since it opened in April 1992. Even before its opening there was strong local opposition that it threatened French cultural sensibilities. Among other things, a strict dress code for employees and the ban on wine in the park (sacred by the French) angered the Parisians. Eisner, the CEO of the parent company in the USA, who could speak French and had a French wife, and who had also received numerous awards from the French government, was unable to get Euro Disney to continue.

The turning point came when “Eisner learned to appreciate French cultural traditions and quality of life, rather than focusing solely on American business interests, revenue, and earnings at the expense of underlying French culture.” Relaxing the strict rules, getting rid of the American-style hot dog carts, appointing local managers, and deciding to use the French language in the park were integral parts of its eventual success. The conclusion is inevitable that both “carrot-and-stick” approaches still seem to work when the conditions for either approach are right.