After I had graduated from the State University of New York, specialising in Business Administration, I chose to further my knowledge of management by completing my Master’s Degree in International Management. I am currently studying to be an Investment Advisor with CISI. In my free time I enjoy writing, photography, philosophy and modern art.
Managing People in Organizations
The word ‘manage’ comes from the Italian word maneggiare, which means ‘to handle’. The French word mesnagement (later ménagement) influenced the development in the meaning of the English word ‘management’ in the 17th and 18th centuries (Oxford English Dictionary). As a discipline, management includes planning, organizing, controlling and directing the organization’s actions and processes in order to increase its efficiency. The concept of management and the basic interpretation of what it meant in the early years were based on General Sun Tzu’s writing in the “Art of War”, Niccolo Machiavelli’s ideas in “The Prince” and on Adam Smith’s main theories. The next wave of development of management as a discipline took place in the 19th century, in what is now known as the ‘Classical Approach’. It was further established and developed by Frederick Taylor’s ‘Scientific Approach’, Henry Fayol’s ‘Administrative Approach’ and Max Weber’s ‘Bureaucratic Organization’. Next in the development of management theories was the ‘Behavioural Approach’, the main point of which was that companies were made up of people and therefore management needed to understand people’s behaviour and feelings from a psychological perspective (this approach is now also called the ‘Humanistic Approach’). The main proponents of this approach were Mary Parker Follett, Elton Mayo, Abraham Maslow and Douglas McGregor.
The purpose of this essay is to establish whether there can be universal management techniques and how globalization and internationalization have influenced the development of management thought.
The early approach to management was first established by the Chinese General Sun Tzu in the strategic military book, ‘Art of War’. Later it was reviewed and used as the basis for certain management styles. The book’s main point was that in order to defeat the foe (in management this refers to the competitor) we should know his/her main strengths and weaknesses. In other words: know the market and competitors in order to be able to compete with and defeat them. Niccolo Machiavelli expressed his views on controlling people in the book, ‘The Prince’. He stated that every person is driven by his/her own interests and will act accordingly in order to fulfill personal needs and goals. Therefore, in order to maintain control, fear and power must be used and applied. Adam Smith in the ‘Wealth of Nations’ maintained that the key to success lay in the specialisation of labour. In other words, everyone should do what he or she does best. This would result in better quality and the more efficient use of resources (mainly human).
The next wave of management development, known as the Classical Approach, emerged during the 19th century and was based on three main theories: F Taylor’s Scientific Management, H. Fayol’s Administrative Theory and M. Weber’s Bureaucratic Approach. Taylor’s scientific method stated that a standard method of performing tasks must be developed, employees should be trained accordingly, the appropriate tools must be available and employees should be assigned to the tasks they are good at. The main motivation was that wages of employees would increase when their output increased. The disadvantages of this method were that employees were demotivated by their inability to improve their competence in other areas and were not able to be innovative in performing their tasks.
Fayol’s Administrative principle dealt with both managers and workers and had four main ideas: division of work or specialisation, unity of command (the worker could receive commands from only the supervisor), unity of direction (where similar tasks were supervised by one manager) and the scalar chain or the organizational hierarchy. The Administrative method highlighted five main elements that a manager should fulfill: planning, organizing, controlling, coordinating, and leading. Max Weber’s Bureaucratic organization’s theory concentrated on the fact that there must be clear and strong authority and a well-structured hierarchy in the organization. All employees must be assigned to their positions according to their level of competency and skill. Promotion is the main motivator in the Bureaucratic approach.
The Human Resource or Behavioural approach was developed by three gurus: Elton Mayo, Abraham Maslow and Douglas McGregor. After several studies, Mayo proved that the productivity of the individual can be increased with good treatment and a better work environment. Maslow described a hierarchy of needs that everyone experiences. The value of this is that managers can understand the level the employee is at and motivate the employee according to his/her needs. The hierarchy of needs has five levels: biological and psychological needs (possible motivator: good work environment, salary), safety needs (possible motivator: benefits, stability), belongingness and loving needs (possible motivator: co-workers, groups, clients), self esteem (possible motivator: recognition of status) and self-actualization (possible motivator: advancement). McGregor’s Theory X and Theory Y is his approach to management. Theory X states that all employees are lazy and have to be strictly controlled in order to fulfill their tasks while, conversely, Theory Y states that employees are self-motivated and creative and should be trusted in their decisions and work.
As has been described, management as a discipline has developed over the years. The main ideas behind theories of management have become more humanistic and have focused on the motivation of employees, rather than strictly controlling each of their moves. Globalization has encouraged the flow of information. There cannot be any universal management technique, since the choice of management style depends on the business and its employees. For example, in some industries, Theory X will work well while in others, the application of this management style would simply demotivate the employees and decrease productivity.
The fundamentals of management techniques before and up to the beginning of the 20th century have been highlighted, but management approaches continue to evolve because of changes in society, politics or economics. Ideas of management are directly influenced by changes in the external environment; in order to predict what management style and technique will probably be successful in the future, we have to be aware of crucial changes in the external environment that have taken place since the beginning of the 20th century and what environmental factors are influencing present-day management techniques.
One of the biggest changes in the political world was the opening of borders in the EU. The formation of the Common Market was a step towards globalization and internationalization in Europe. This political change led to economic changes since it promoted travelling and the movement of labour. It also encouraged the free flow and transfer of information and goods. Globalization has influenced society in that it has encouraged the acceptance of other cultures as well as cooperation; this has led to the integration and cooperation of businesses.
Social changes have evolved in the face of the “death of middle class”. This does not refer to literal death but to a transferring of people from the middle class to either a higher or lower class. In the 20th century, the middle class was the biggest and therefore the most influential group. Nowadays, there is an unequal distribution of the population between high and low classes with no middle class as such.
Another social change has been the rise of individualism and the empowerment of the individual as a result of people becoming more educated, experienced and competent. Therefore the needs and desires of society as a whole have increased. In the workplace, individuals are motivated by being trusted in decision making and involved in the process. They are also motivated by being given the freedom to be creative rather than by being in a strictly controlled environment.
Society has been hugely affected by the rapid development in technology. People’s use of technology has escalated and the creation of social networks, such as Facebook, MySpace and Twitter has allowed fast and effective exchange of information and the creation of online social groups. People now can fulfill their need for social belonging just by signing onto one of these networks. Advancements in technology during the last few years have permitted fast, cheap and effective communication so that people in locations all over the world can connect and hold video-conferences. Electronic signatures mean that it takes less time to authorise documents. The most important trend in the development of technology is that technology has become user-friendly and now anyone with merely a basic knowledge of how to use a computer can learn how to use new programmes. This makes rapid technological development and adaptation to modern society easier than ever. In the 20th century, only highly skilled professionals knew how to use computers. Now every person, without needing to attend special classes, can learn how to use almost any programme.
As for the environment, nowadays people have become much more aware of the threats to the ecology and nature. The increase in the number of “green” organizations and movements has been rapid, indicating that people are becoming more educated and responsible with regard to the ecological environment.
Considering the increasing globalization of our world, I think that the most productive and suitable management technique would be using cross-cultural teams. Employees could share knowledge and use their different professional skills to achieve a common goal. However, this, again, would depend on the industry.