Practical Business Management

Introduction

In this day and age, the world is shrinking rapidly.  Globalization is not just a trend, but it is something that we constantly take part in everyday, from what we watch on TV to where we buy our food. Because the world is becoming smaller and smaller, it is now more important to make most of the opportunities that are given to us because of the vastness of the world market.

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These opportunities mean that we are not just competing against our neighbors in our houses or our colleagues; we are also competing against multinational companies and talented individuals from all over the world.  Therefore, we have to be able to learn how to be competitive but focused on achieving success, while remembering the need to make the most of how we are able to do things.

Body

One of the best ways to do this is by looking at how one manages one’s business.  Management is defined as getting things done through people (Barrett 2003). Business management is one of the most important things that one will learn as he finds ways to work and grow in this challenging and difficult world.  This knowledge of business and how to manage time, people and resources is defined as a way of being able to differentiate certain theories and determine whether they can be used in the situation that requires knowledge of the business at hand.

Some of the more well-known theories are those that actually came, not from the field of commerce, but from the field of psychology.  One of the more well-known ones is that of Frederick  Taylor.  In  1911, he published the book The Principles of Scientific Management.  He believed that the working relationship in one’s occupation or course of business could best be strengthened by establishing a solid partnership between a well-trained management arm and a cooperative workforce.   He was one of the first people treated the study of management  as an academic discipline, one that could be analyzed and perfected in order to achieve better results.

He believed that if workers could be guided, trained and taught meticulously, this would result in an improvement over a system where they were just left to fend for themselves and to learn how to work solely on their own.  Frederick Taylor was a believer that the workforce was not capable of thinking on their own; this meant that it was up to management to plan, execute and enforce certain standards that would ensure the effectiveness of the work force.  Because for him, the importance of management having a direct hand in ensuring that the worker was able to achieve what he was set to do in the first place. There were four key components to the Taylor principle:

1. Conduct a scientific study of tasks performed, instead of simply providing and relying on standard operating procedures.
2. Train each individual worker exhaustively. Don’t leave them alone.
3. Give detailed and specific instructions.
4. Divide work equally between workers and managers, so that managers will be compelled to make use of scientific management.

Taylor’s principles were widely accepted by the general public. Harvard University, the first to offer a post-graduate degree in business management, eve  based their freshman year curriculum on his works.  Throughout the world, there was a movement where Taylor’s teachings on discipline began to have an influence over the world (Kanigel 2005)

Some years later, there was another theory that came about from the studies of Elton Mayo, who was a sociologist.  He believed that the how good management was depended on how well he could be able to manage the informal work environment of the organization and the place of business itself.  The more important that a certain person felt, the more he was likely to excel and perform.

This meant that management had to make the working environment in such a way that the informal communication of the group took place in a happy, encouraging and enjoyable way. This meant that everyone had to feel that they belonged to a group in order for them to succeed in working together. It was not about the money; of course money was important but more important was the fact that the individual worker need to  belong.  How smaller groups function within an organization determined the performance of the entire organization itself (Cole 2003).

For several years, these were the two dominating management theories: Taylor’s principles, and Mayo’s informal workgroups.    Several years later, another theory gained popularity, this time from the field of psychology. This was Abraham Maslow’s concept of the hierarchy of needs.  He believed that in order to ensure effectiveness of an individual’s performance, you had to realize that every person had a certain hierarchy of needs.

It was often seen in terms of a pyramid.  The first level of the hierarchy of needs, and the lower levels were actually the needs of the body, while the ones in the higher apex of the pyramid were psychological.  The realization of the higher needs will only come when the needs of the first level are met.  One needs to be well fed and he also has to feel safe before he can work or even realize the importance of love, esteem and self actualization.

The third layer of the pyramid was about social needs, belonging and acceptance.  Esteem talks about his need to believe in himself before he can begin to see the need to fulfill his potential, based on the described traits of self-actualization.  This was what moved people to work, and management had to make sure that the workers were provided the basics before they could even begin to think about the potential to fulfill the other needs that were more important to the organization (Cole 2003).

Frederick Herzberg had a popular theory that was actually similar to Maslow’s theory.  It was known as the motivation-hygiene theory.  Herzberg believed that job satisfaction and job dissatisfaction were actually not related to each other. There were factors or characteristics that led to job satisfaction and made a person enjoy his work. There were other separate and distinct factors that led to job dissatisfaction.

This meant that just because a person was very satisfied with his job, that did not mean that he was not dissatisfied with certain aspects of it also.  This meant that management had to be aware of both sets of these factors.  If the manager was not careful, then the environment created by the mixing of satisfied and unsatisfied workers could lead to difficulty for the manager and the organization in the future (Cole 2003).

It is important to see how these theories are actually used by companies today, as well as other agencies like the government.  That way we can see if they are really effective.

In the private sector, one particular case that one could look at is General Motors. General Motors before was one of America’s leading car companies, second to Ford.  It was actually composed of several car companies that were bought by William Crapo Durant back in 1904. Back in 1914, it was the second biggest car company in the US. At the time, it was Taylor’s theory of scientific management that was used by most companies, and the car company is one of those that may have made use of his theory.  For almost 80 years, General Motors rose to become the fourth biggest car company in the world.

Among the other big car companies based in the US like Ford or Chrysler, the internal structure of how General Motors managed its organization and its workforce was very traditional. Employees were always expected to follow the boss strictly. They were never to ask questions and to never give negative opinions. Those who were negative or who gave feedback or input were not considered as “team players”.  Orders were always going from the top down, and there was never a sense that the workers were able to contribute to the decision making process.

In General Motors, if it led to saving money, it was an excellent idea. Forget quality, worker satisfaction or being able to make new ideas work for the company.  This would eventually lead to the downfall of General Motors.  In 1991, they announced mass cutbacks. This meant that people were being fired because the company was losing money. This meant that half of their workforce was losing their jobs (Monks 2000).

In the public sector, one can look at the National Hurricane Center.  It issues so many warnings that it costs millions of dollars in evacuation, shelter and other expenses. Businesses lose lots of money when they are forced to close and when their areas of business are also evacuated.   But after Hurricane Katrina, the Miami Herald conducted a study.  Of the 29 hurricanes that took place after Hurricane Andrew in 1992, about ¾ of the warning areas per storm were not touched at all by hurricanes. This is why certain businesses prefer to hire private meteorological firms to confirm the weather after warnings given by the National Hurricane Center.

The internal communication of the National Hurricane Center is also one where the head meteorologists are the bosses, and they just relay the information.  Of course, it’s better to be safe than sorry. But instead of taking time to verify the strength of the hurricanes, especially based on past experience, the younger members of the Hurricane Center are just told to relay the information to the community immediately,  and make sure that evacuation takes place. Also, there is the fact that there is a system where the center “reprimands” employees for wrong information, and it becomes the topic of news. This means that there is a problem with how the internal company manages the workers and makes sure that they work together.

Conclusion

From these two models,    it is safe to see that neither of them is able to make use of a specific management technique to the best of their abilities. They do not know how to balance Taylor’s rigidness, Mayo’s openness, Maslow’s understanding of human nature, or Herzberg’s balance of negative and positive situations in the workplace.  It can be seen that in both cases, it is generally communication from the top down that is preferred, and that input or feedback from the worker is not only discouraged but is looked down on.

Because of this, it is now even more important for them to understand that in this day and age, managing one’s business requires an ability to analyze the current situation both inside and outside the business, and the external factors that would also affect business. We learned from Taylor that there has to be an appreciation for the need to check and manage the workers in a thorough and disciplined way. They should, or all businesses, should also see the value of Mayo’s analysis of how informal communication affects workers as well.

They would also be wise to make sure that the needs of both management and the worker is met, so that there can be goals that can be achieved because the worker sees the value in the work he does. And finally, the manager has to know that there is no perfect working environment; like what Herzberg said, there are always good things and bad things. What is important is that the manager does everything he can to make sure that the positives are more than the negatives, so that the worker can experience job satisfaction and do the job well.

With that, these management theories are really important in this time of economic crisis and competition.  We have to be able to make ourselves good managers of businesses by looking at the past, working well with our present and keeping an eye out for the future.

Bibliography

Cole, G.A (2003). Management Theory and Practice.  London: Thomson
Learning, pp. 78-87, 103-116

Kanigel, Robert (2005). The One Best Way: Frederick Winslow Taylor and the Enigma of Efficiency. Massachusetts: MIT Press, pp.40-55.

Maslow, Abraham (1987). Motivation and Personality.  Harper Collins, pp. 4-8.

Monks, Robert A.G (2000). General Motors: A Corporate Governance Case Study  – Available from <http://www.ragm.com/books/corp_gov/cases/cs_gm.html> [Accessed December 4 2008]

The Miami Herald – The National Hurricane Center: Memorandum issued To William Proenza. < http://media.miamiherald.com/smedia/2007/06/16/00/proenza.source.prod_affiliate.56.pdf >  [Accessed December 4 2008]

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