Management Theory and the Organization - Case Study Example

Management Theory and the Organization Name Institution Date Management Theory and the Organization Introduction Managers in organizations are tasked with organizing human resource, production or operations, financial resources, strategy development and information technology management in achieving the organization’s objectives. Organizational management theory is concerned with studying organizations to identify common issues for solving management problems, maximizing efficiency and meeting stakeholder needs (Pomsuwan, 2007, p.3). These theories provide a basis for which management can base their decisions especially in relation to the interests of various individuals in achieving an organization’s objectives. The issues being faced by Electronics UK are largely caused by worker resistance from adoption of poor management decisions. Organizational theory adopts three perspectives, which are classical, neoclassical and environmental perspectives. These perspectives are used to study organizational behavior and human resource. The issues pertinent to organizational theory fall into three topics, which are management control and resistance, decision making and organizational culture. As organizations developed over time, several theories have developed with competing ideology and varying effectiveness in implementation. These are broadly divided into bureaucracy, rationalization/scientific, and division of labor theories of organizational management. These are used in analyzing issues affecting organizations and in developing solutions for these problems. The Organization Electronics UK is a manufacturer of home audio and DVD equipment operating in the UK as a subsidiary to a large Japanese company. The company is based in the southern region of the country where most electronic manufacturing uses labor-intensive technology as compared to the northern region where predominantly high-technology production is used. Decisions by the Japanese parent company to set up in the UK in the 1990s was based on the strategy to enter into the European market and to take advantage of the relatively absent employment laws in the UK compared to other European markets. Unemployment and other economic conditions in the UK at the time made available cheap labor for the new company and largely determined the location of the firm in a locality with no similar industries. The company operates in the middle range mass market for consumer electronics and subcontracting for production of various parts for other electronics companies. Changes in the UK economy since 1997 have however reduced availability of cheap labor to the company, resulting to the employment of immigrant workers employed through an agency to provide cheap labor for the organization. These changes have brought about the development of several organizational and management issues for the company especially in relation to human resource. The market environment for the company’s product is highly influenced by fluctuating economic conditions. Uncertain market conditions have led to adoption of the Just-In-Time (JIT) production strategy geared towards dealing with fluctuating demand through changing the labor input in the mostly low-tech production system. Important Organizational Issues for the Company Management Control and Worker Resistance Problems The organizational structure in the company is highly bureaucratic and fails to differentiate clearly the responsibilities of the various employee positions as relates to the work in the factory. The top management of the organization has implemented a sophisticated but ineffective system of monitoring and controlling employees towards attaining the production demands in the company. The market environment in which the company operates has had significant changes from the time the company started, which have necessitated changes in the organizational strategy for the company. This places undue pressure on management and workers to keep up with tight deadlines and overtime on short notice, leading to conflicts between human resource and other production factors and delays on customer orders. Historically, the locality in which the company operates has witnessed industrial dispute and worker unrest. Immigrant employees resent their poorer terms of employment compared to those awarded unionized indigenous workers, with some of the agency employees eventually attaining citizenship enabling their permanent employment on union terms. Changes in the labor laws in the UK to conform with those adopted for the Euro-zone in 1997 have led to changes in the worker status, employment terms and employee expectations, resulting in problems that have caused lowered motivation and productivity in the company. Decision Making Demand for the company’s products have decreased owing to market instability and decreasing efficiency in the organization in recent years. Decreased efficiency has been blamed from failure in meeting production deadlines for customer orders caused by the poor performance of human resource in the company. This has have led to a lower market share for the company’s products in the highly competitive market for electronics in the UK. Adoption of the JIT production system has had varied reaction towards the changed working conditions from the organizations workers and management. Both indigenous and agency employed workers have had to work in shifts, with most immigrant agency workers being employed on a temporary basis. The adoption of this system might have been made without adequate consideration of the human resource in the organization. This is mostly so considering other logistics that were omitted relating to inventory management for raw materials and buffer stocks of finished electronic products. The workers are required to work at speed and attain high quality for the products to meet the tight production schedule, but are at times let off when production demands have slackened. This indicates poor organizational planning for the balance between production requirements and human resource employment. Culture Changes in technology in the UK market following research and product development by other electronic producers have resulted to a highly competitive environment for Electronics UK. Product development for the company is conducted by the parent company in Japan, therefore might not be competitively suited for the European market that products from other electronic manufacturers. Some cultural ideologies held by the indigenous employees about their work are in conflict with those of the immigrant workers, which have resulted to decreasing performance of the human resource in the organization. Differences in the cultural backgrounds between indigenous workers and immigrant agency employees have led to differences in their acceptance of the working conditions necessitated by the JIT production system in the organization. Indigenous employees are less willing to work overtime at short notice compared to immigrant employees, which has led to the view by management that the former were poorer workers. Organizational Theories as relates to the company Organizational theories seek to explain and provide understanding on the organization and its structure with the aim of improving on the methods and efficiency used. These theories aim at developing superior methods for creating and managing organizations and understanding the various causes of the situations existing in organizations (Pomsuwan, 2007, p.4). Organizational management theory has evolved beginning the 19th century during the industrial revolution and flourishing in the 20th century. Theories of organization are broadly categorized as ranging from classical theories, to neoclassical theories, then to more recent modern organizational theories. Organizational theory begins with the emergence of modern models of organizations within the concluding portion of the nineteenth century, where the factory system of organization was adopted by manufacturing firms as the cornerstone of productivity characterized by mechanized automation and mass production especially in the textiles industry. During this period, principal management theorists included Robert Owen and Charles Babbage amongst others, emerging as the pre-classical organizational theorists. These theories were built around division of labor and worker specialization to streamline flow of work and tasks structure in organizing industrial production systems. Much of the evolution in management thought however took place in the twentieth century, where the classical school of organizational theorists. Classical organizational theories include the scientific management approach, bureaucratic/administrative management approach and administrative theory. These theories emphasize on the formal concepts relating to management and worker efficiency. The bureaucratic approach by Max Weber focuses on the importance if hierarchy and rules defining procedures for workflow and impartial relationship between management and workers in organizations. The scientific approach by Taylor emphasizes on a mutual relationship based on trust between management and employees. Neoclassical or human relations theories of the early and mid 20th century developed as a reaction to the overly rigid and conformist classical approaches. Neoclassical theories are focused on the functional importance of individual employees in an organization. Neoclassical theories of organizational management focus on social elements of employees within the workplace and disregard issues of human nature and individuality, with increased productivity being a result of higher worker motivation. The main proponents of this human relations movement include Mayo, Roethlisberger, Uris. Modern organizational theories developed in the later half of the 20th and early 21st centuries. They are broadly categorized into contingency theory and the systems approach theory. The contingency theory, unlike classical approaches, views conflict in organizations as being inevitable but manageable and organizations having to evolve in a rational, linear and sequential manner to meet the needs of their strategy in relation to their environment. The systems theory propones that non-linear relationships exist between various organizational variables with changes in one leading to changes in the others, making it difficult for managers to understand each separately (Pomsuwan, 2007, p.7). Management Control and Human Resource Resistance The organizational structure for the company is divided into four departments according to the stage of production for the manufacturing process. These are the auto insertion department for automated production of circuit boards used in other production stages, and three assembly lines. The efficient organization of workflow in the auto insertion department is highly dependent on the high quality requirements on workers, with any errors leading to shutting down of the machinery. The management structure in Electronics UK is largely based on a traditional scientific approach. The managerial structure is highly hierarchical with overt monitoring and surveillance at all times over the performance of the employees. The bureaucratic nature of classical organization theories fail to fit in with contemporary organizations operating in complex global organizations (Mullins, 2007, p.43). The Taylorism approach adopted for the organizational structure is inefficient in ensuring that workers provide their best performance in meeting the company’s goals. The managerial and supervisory structure in the company at the production areas follows a functional foremanship approach in defining responsibilities for lower level managers. The structure places the responsibility of training and developing employee skills on the managers, requiring them to cooperate in the production process, which limits the efficiency of the floor managers by placing them at the same level with the workers. The floor managers are usually less suited for training of the workers, especially while at the same time supervising and managing production line operations. The requirement of virtually all management levels in the organization to be present in the production areas also leads to duplicity of responsibilities, neglecting of some key management functions and lower level of output than that for which they are paid (Buchanan and Huczynski, 2010, p 464). People in highly structured work environments have been found to recent their work and usually perform poorly below their optimum levels. Workers have a high resentment of the constant supervisory surveillance on them, with a high resentment of authority and efforts being made by top management to increase daily production (Bart, 2005, p.14). The consequences attached to failure in meeting the set production standards are considered a public humiliation by the workers, which worsen the already highly oppressive working environment. As relates to classical management practices, natural soldiering has been described as the inherent characteristic of humans towards aversion from exerting effort especially in work, while systematic soldiering is deliberate effort to circumvent the bureaucratic system by refusal to perform adequately. Taylor demonstrated that workers have deep interests in their well-being, thus would be unwilling to work above their normal defined rate of work without receiving extra remuneration (Tompkins, 2005, p.90). The organization’s top management fails to take into consideration these opportunistic self-interest behaviors in workers and management as affects human resource performance and efficiency in the organization. The poor attitude held by the workers for their work decreases the management control in improving employee performance and has led to worker resistance towards the company’s objectives. The labor process theory postulates that employees develop a negative attitude towards work performance if they feel exploited by capitalist management to produce surplus value over the equivalence of their remuneration (Mullins, 2007, p. 124). Worker resistance in the company may manifest in the apathy towards the performance requirements displayed on the screens for daily production targets. The impact of new organizational forms for production in the company, namely the JIT system, has led to increased demands for performance on the workers without an equivalent improvement to their employment terms. Decision making in the organization The formal setting in organizations influence the way in which decisions are made by individuals, with the particular policy-choice decisions made being dependent on the organization’s structure and procedural rules (Buchanan and Huczynski, 2010, p.357). Human beings usually behave differently in a social or organizational setting than they would individually. Organizational structure influences the efficiency of decision-making by determining the distribution of responsibilities, coordination and scheduling of activities. The rational decision-making model in organizational behavior entails making logically sound decisions following a systematic path from problem identification to finding a solution. Bounded rationality is the concept used to explain rational behavior under organizational constraints of knowledge and information availability, individual cognitive abilities and time. Rationality suggests that human behavior and worker motivation in organizations can be predicted and modeled according to environmental conditioning and expected behavior (Srivastava and Chandra, 2011, p.89). This is possible considering that individuals are rational actors and would be influenced by prevailing choices and conditions to take certain decisions with the aim of maximizing satisfaction of their individual and collective goals. Sequential satisfaction of goals is defined by Maslow’s hierachy of needs theory, which states that individuals satisfy their needs hierarchically with lower-order basic needs being satisfied first and higher order needs taking subsequent priority. Considering rationality of decisions by the workers and the management, the organizational choices made in the company have a logical reaction expected from employees. Adoption of policies that make the workers feel oppressed or unfairly treated is bound to elicit resistance and low productivity. Rational decision-making should follow those choices that are preferably better considering the resource constraints and maximizing the goals and ends of the individuals in the organization. In the company, the decisions made are aimed at maximizing the aims of the owners with apparent disregard of the goals held by the employees. Group thinking refers to a psychological phenomenon within a group of individuals where the desire for harmony and conformity results in deviant and irrational decisions. In trying to minimize internal conflict and reach a consensus, workers within the organization will tend to avoid raising controversial issues by resisting individual creativity, independent thinking and uniqueness, thereby decreasing their productivity (Buchanan and Huczynski, 2010, p 325). Organizational Culture in the company This is a system of collective beliefs amongst individuals in the organization that has significant influence on their behavior, attitudes, performance and decision-making (Tompkins, 2005, p.361). The culture prevalent in the company is an authoritarian one stressing on centralized power and discipline amongst workers, which has led to a mechanistic culture in the organization with workers resisting change and innovation. The management wrongly assumes a unitary perspective for the organizations culture with the management being able to control employee commitment and labor productivity. On the contrary, the surface manifestation of the organizations culture shows a differentiated, critical approach with clearly distinct subcultures especially grouping indigenous and immigrant employees as separate. There lacks representation of the various significant employee groups in the company’s management, for instance, immigrant workers and women, while forming the majority, hold no significant managerial positions. This situation undermines the effectiveness of the management in influencing employees collectively. National and regional differences in culture between the parent company and its UK subsidiary also causes ineffectiveness in the leadership practices adopted by top management, which are in conflict with the cultural norms of the various employee groups. Recommendations Contradictory practices by the company’s management in trying to increase control and improve labor productivity are evident in the effort to instill fear through penalties for failure to meet the daily production targets for floor managers and workers. The company should consider adoption of other forms of management control including normalization of the work processes and performance requirement, or self-policing, which have been found to yield better employee motivation and productivity than surveillance. These have been found to work well alongside a participative and organic culture where employees feel important and valued for their contribution to the organization. Employees should be allowed some autonomy in determining the best way for performing the various tasks in work performance. The company should consider integrating contemporary solutions for workflow issues, which include flexible specialization, total quality management and business process re-engineering. These look into the system of work performance and aim at streamlining the work process by analyzing the nature of different jobs to remove unnecessary activities and change inefficient methods. Training is required for many of the workers on the factory floor and for the lower management levels to better equip them for their various workstation demands. As opposed to implementing abrupt organizational change that might face resistance, incrementalism recommends recognition of all values and incorporating negotiation amongst the stakeholders in the organization through progressive adjustment and gradual change (Buchanan and Huczynski, 2010, p 565). This warrants reviewing of the suitability of internal conditions in the company for the adoption of the JIT production system. Federal decentralization has emerged for companies that have operations in different locations, and within the same location for different departments. The management in the company should be streamlined through better defining of the roles and responsibilities for the different managerial and supervisory positions. This will enable clearer definition There lacks legitimacy in the management’s institutionalization of inferior employment terms for agency workers, which affects the quality of human resource accumulated in the company, therefore affecting their output and motivation towards work. De-institutionalization for the company would involve evaluation of the workers and laying off the less effective and unproductive to streamline the labor force in the organization. The integration of the EU social charter in the UK in 1997 legally requires the company to review the employment terms especially for the immigrant workers to bring them to par with indigenous workers under universal Euro-zone terms. Conclusion The situation in the company is characterized by outdated classical organizational perspectives that are not suited for the contemporary operating environment and competitive market. Some decisions adopted by management are in conflict with the interests of the workers and are detrimental to the effective performance of work at the company. Various improvements must be done for the management practices and human resource to ensure improved productivity for the company. As opposed to traditional organizational models assuming worker remuneration as the sole determinant for motivation, contemporary theories recommend sharing of information with subordinate workers and involving them in routine decisions. Increased work satisfaction through expanded employee influence, self-direction and self-control would improve labor productivity in the company. References Buchanan, D. and Huczynski, A. 2010, Organizational Behavior, 7th ed., Edinburgh, England: Pearson Education Limited. Pomsuwan, S. 2007, Organizational Behavior: Theories and Concepts, Bangkok, Thailand: Bangkok University Press Mullins, L. 2007, Management and Organisational Behaviour, Harlow Essex, England: Prentice-Hall, Pearson Educational Publishers. Bart, S. 2005, The Return of Panopticism: Supervision, Subjection and the New Surveillance, Surveillance & Society Journal, 3(1), pp.1-20, Ontario, Canada: Surveillance Studies network. Srivastava, S. and Chandra, K. 2011, Role of Motivation in Higher Productivity, Management Insight Bi-Annual Journal, 7(1), Uttar Pradesh, India: School of Management Sciences Tompkins, J. 2005, Organizational Theory and Public Management, Belmont, California: Wadsworth, Cengage Learning. Read More