Organizations in the modern global business environment are highly concerned with maximizing efficiency, reduction of production and operations cost as well as increasing profitability and gaining sustainability. These concerns are shaped by the evolution of various management theories in the 20th century that have contributed to different organizational management systems and styles in the modern business environment. The two management theories that will be considered in this paper include the scientific management theory developed by Fredrick Taylor and the human relations school of thought initiated by Elton Mayo. Both schools of thought were developed to provide managers with the best approaches to ensure increased productivity at the workplace through the management of the workforce. However, the theories evolved in different instances and applied different approaches to achieving efficiency and productivity in the organization. Therefore, the modern organizations take advantage of these different approaches to management of employees depending on their culture and organizational goals.
According to Mayhew (2017), the organization’s workforce (the employees) provides the main asset regarding skills suitable for increasing performance and resulting in organizational success. Therefore, the paper will focus on the literature review of the two schools of thought based on their evolution and differences and also seek to discuss the application of the theories in modern organizations. Furthermore, the literature review and the discussions will be significant towards developing the conclusion for the appropriate decision to be taken by Forsyth Travel management based on which company would be appropriate to offer a buyout between Kaye’s Travel and Sunsoft Travel.
The evolution of the modern management style and approaches were initiated towards the end of the nineteenth century and around the start of the twentieth century following the industrial revolution. One of the most prominent management theories was designed by Fredrick W. Taylor was also known as the father of Scientific Management. While working and focusing on advancing his career at the Bethlehem Steel company in the United States, Taylor designed an experiment with the primary goal of improving production efficiency and ensuring the reduction in cost. Therefore, Taylor developed the scientific management principles as a replacement for the traditional rule of thumb approach through the application of the application of the scientific methods to develop the best design and rationale for optimizing the productivity and achieving profitability. The four principles of scientific management are the most important facets of the design.
The first principle involves the development of a scientific method for every element of work to ensure the identification and elimination of all the factors causing interference (Taylor, 1911, p.24). Secondly, Taylor developed the principle of scientific based selection and training of the workforce to ensure the improvement of their skills for the intended work. In the process of the establishment of the second principle it was discovered that some workers were more efficient than others; therefore, Taylor (1911, p. 25) developed a reward system to ensure the high performing workers were highly motivated. Thirdly, the principle of cooperation between the top management and the workforce was developed to ensure that the theoretical provisions of the scientific management theory were transferred into practice through the management and the workforce working hand in hand to achieve the organizational goals (Taylor, 1911, p.26). Lastly, the principle of effective division of work between the workforce and the management ensured that workers could undertake their responsibilities without support from the management. Therefore, the evolution of the scientific approach to management ensured that the process of production followed a systematic flow and was well calculated, premeditated and accounted to ensure the reduction in wastage and efficient use of resources. Scientific management theory ensures the work sharing and changes in workforce attitude as the means for achieving organizational success.
On the other hand, human relations theory evolved between the 1920s to the 1930s based on the findings gained from the experimental studies conducted by Elton Mayo at one of the Western Electric Company plants called Hawthorne. The human relation approach to management was initiated as a response to the failures experienced from the scientific management principles specifically through the rejection of the systematic, mechanistic and biological principles of management. Therefore, the human relations theory focused on the implementation of the management principles on the workforce through focusing and dealing with them as socio-physiological beings and not as machines (Mayo, 2014, p. 15). Based on the human relations theory, the workforce in the organization are treated as human beings through the implementation of three primary principles including individual employee, the informal organization, and the participative management approach. Firstly, according to Mayo (2014, p.18), the workforce within an organization provides the most valuable asset based on their skills and knowledge of undertaking the organizational responsibilities, therefore treating them well and with respect translates to high productivity. The recognition and the appreciation of the workforce improve their motivation and determination to achieve the organizational goals. Secondly, Mayo (2014, p. 24), highlights that the informal setting of an organization incorporates the informal social aspects in dealing with the workforces, therefore, instilling the sense of belonging, being accepted and being valued by the organization.
The application of the human relations theory into the organizational management structure involves the development of informal groups within the workforce to foster quality relationships while serving as a supplementary tool for strengthening the formal organizational needs. Furthermore, the informal social settings provide a good mechanism for building effective communication channels between the workforce and the management through a relation-oriented approach suitable for achieving high productivity and success. Lastly, the participative management pillar of human relations theory requires that the workforce should be involved in the decision-making processes of the organization through incorporating their needs, feelings, and contributions. The involvement of the employees in the decision-making processes ensures the development of effective decisions suitable for progress and growth of the organization. Therefore, the theory of human relations as developed by Elton Mayo focused on the achievement of employee satisfaction through treating them as human and creating an informal working environment for effective communication and appropriate decision-making.
The two schools of thoughts, therefore, have differences that can be important for influencing the decisions made by the organizational managers on the type of the approach suitable for their organization. The first significant difference can be spotted based on the treatment of the employees in an organization. While the scientific management theory by Fredrick Taylor focuses on the treatment of the workforce as machines to achieve the organizational goals, the human relations approach by Elton Mayo focuses on the treatment of the workforce as human beings to gain their full potential in achieving organizational goals (Bauer, 2011, n.p). Moreover, the scientific management approach employs the use of incentives to achieve increased productivity through a task-oriented leadership mechanism. On the contrary, the human relation theory provides that the organizational output through improved productivity is gained through promoting quality and healthy relationships within the workforce through the use of a relation-oriented leadership style which creates a teamwork approach to accomplishing a task. Furthermore, the scientific management theory provision is strict on the development and enforcement of rules and policies which must be followed by the workforce to achieve a predetermined organizational objective.
On the contrary, the human relations theory encourages a participative approach to arriving at the organizational objectives through involving the workforce in the decision-making processes (Bauer, 2011, n.p). Another important difference between the two schools of thought involves the approach to work mechanisms. While the scientific management theory promotes individuality in accomplishing tasks through rewarding the best performers, the human relations approach encourages a collective approach to arriving at the objectives of the organization through teamwork and development of good relationships among the workforce. Therefore, in every aspect, the human relations theory was developed to correct the problems created through the application scientific management theory in the organizational management and leadership style.
Regardless of the noted differences between the two schools of thought in the management of organizations, they have a similar contribution to the management practices within the organizations. Both the Scientific management approach and the human relations approach to organizational management focuses on the development and implementation of the best management principles suitable for improving the workforce motivation and determination to achieving the organizational objectives (Bauer, 2011, n.p). Therefore, the common link between the two schools of thought involves increasing the level of workforce productivity and achieve the organizational outputs. Based on the Fredrick Taylors approach to workforce management, the employees are provided with specific tasks and are well trained to accomplish the tasks in line with the organizational requirements. Furthermore, the employees are provided with incentives to work as a motivational factor to help in the accomplishment of the tasks. Similarly, the Elton Mayo’s “Hawthorne effect” focuses on the group-oriented process of achieving the organizational task while at the same time are motivated and encouraged to do the job and meet the organizational objectives. Hence, the application of both schools of thoughts in different organizations is significant for the achievement of organizational objectives and outcomes.
Consequently, the application and adoption of these management styles have been taken up by modern organizations especially the organizations focusing on high output as the means to achieve productivity and profitability. Most modern organizations especially involved in the manufacturing and production industry highly apply the scientific management theory as the basis for achieving high productivity. According to Uddin and Hossain (2015, p. 580), one of the highly recognized modern day organizations applying the scientific management principles in its management of the workforce is McDonald’s restaurants. McDonald’s has implemented four dimensions of the scientific management theory through focusing on efficiency to achieve optimization, profit maximization through accountability and calculability, high predictability through standards and effective training to ensure task accomplishment (Uddin and Hossain, 2015, p. 580).
The application of the standardized process in business management by McDonald’s has made them the world leading food chain store on a global scale. Similarly to McDonald,s Kaye’s Travel, a potential buyer of Forsyth Travel, employs a standardized approach to the management of its employees. Furthermore, the application of the scientific management theory and principles has ensured that no matter the location of the McDonalds stores, they apply the same methods in the accomplishment of tasks by the workforce. Similarly, larger manufacturing companies including Toyota and Ford have also been successful in the application of Taylor’s approach to achieving high productivity. However, Uddin and Hossain (2015, p. 580), notes that recent studies have indicated that more and more employees are interested in being part of organizations which appreciate them as well as their contribution in the organizational development. Therefore, various studies have recognized the significance of the modern organizations such as McDonald’s, Toyota and Ford to engage in the introduction of human factors into the scientific management approaches for improved success in the modern business environment.
On the other hand, most organizations involved in the service industry highly focus on the use of human relations theory as the means of achieving high productivity from the workforce and improving profitability. According to La (2018, n.p), one of the prominent modern day companies applying the human relations approach to management of the workforce is Google Inc. Google Inc. has achieved success through the belief based on the belief that their employees are the most valuable resource to the organization through their dedication to make the customers happy. Therefore, in return Google Inc. focuses on making their employees happy through providing a fun and relaxed working environment suitable for developing a close relationship and achieving a teamwork approach to accomplishing tasks. Similar to the Google’s Inc. approach Sunsoft employs a softer and flexible management style as well as engaging their employees in the decision-making processes. Furthermore, La (2018, n.p) notes that the Google Inc reward system involves learning opportunities, health care insurance, meals, being involved in global fun activities as well as being involved in leadership and strategic decision-making opportunities in the company, thereby, ensuring the employees are appreciated and valued. In return the Google Inc. workforce become more devoted, develop new levels of creativity and achieve high productivity in the process. Furthermore, teamwork and effective communication in the workplace have been attributed as the primary factors for the success of becoming the second best brand in the most valuable brands in the world. Therefore, following the Google’s Inc. approach to business can be influential for companies in the service industry to adopt the human relationship model to ensure increased support, high satisfaction and productivity of the workforce.
In conclusion, based on the literature review and the discussion of the modern day organizations application of different management styles, Kaye’s Travel applies the scientific management theory to the management of its workforce while Sunsoft applies the human relations approach to workforce management. Taking into consideration the initial research undertaken on the two potential buyers, Kaye’s Travel and Sunsoft, it is indicated that “Kaye’s Travel is run efficiently and mechanistically with clear lines of demarcation about jobs, timekeeping and absence and apply a top-down management approach.” The management style employed by Kaye’s travel involve consist of the scientific management principles as described by Fredrick Taylor’s approach which is based on a systematic and standardized approach to achieving productivity. On the other hand, it is indicated that “Sunsoft is more concerned with the results than the methods used, leading to the creation of a more relaxed approach to the management of the employees and also focuses on encouraging employee participation in decision-making.” Therefore, Sunsoft employs the human relations model to the management of its workforce.
Since Kaye’s Travel employs the use of the scientific management theory, the acquisition of the Forsyth Travel by the company will result into a change in the management style through the introduction of standards to ensure incorporate standards and procedures in the manner in which Forsyth Travel will undertake their business. Therefore, the Julia and Tim will be forced to adopt the changes into the business as provided by the top management of Kaye’s Travel. Furthermore, the reward system in the under Kaye’s Travel will deny Tim of salaries since he works from home and does not contribute much to the daily activities of the company. On the other hand, the acquisition of Forsyth Travel by Sunsoft will be significant for the growth of the company and will not involve several changes. Already, Forsyth Travel employs a similar approach used by Sunsoft through using softer and flexible approach to management. For instance, allowing Tim to work from home provides him with the flexibility of stay at home to watch the kids and work at the same time.
Additionally, Forsyth Travel allows the participation of employees in the decision making process. For instance, Tim and Julia have been impressed by the contribution of Lee into the business; therefore, they have involved him in the discussion and decision-making process in the potential buyout. Furthermore, the use of human relation approach by Sunsoft will significantly improve the performance of Forsyth Travel since the business is in the service industry similarly to Google Inc. Therefore, the acquisition of Forsyth Travel by Sunsoft will be the most appropriate choice based on the similarities in management styles through the application of the human relations theory.
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- Bauer, T., 2011. Compare and contrast scientific management and human relations theory. Available at: https://www.grin.com/document/205705 [Accessed 20 January 2018].
- Frederick, T., 1911. The principles of scientific management. USA: Harper& Brothers.
- La, L. (2018). Human Relations – Hawthorne experiments. [online] Academia.edu. Available at: https://www.academia.edu/4112949/Human_Relations_-_Hawthorne_experiments [Accessed 20 Jan. 2018].
- Mayhew, R., 2017. Importance of Employee Performance in Business Organizations. [Online] Available at: http://smallbusiness.chron.com/importance-employee-performance-business-organizations-1967.html [Accessed 20 January 2018]
- Mayo, E., 2014. The social problems of an industrial civilisation. Routledge.
- Uddin, N. and Hossain, F., 2015. Evolution of modern management through Taylorism: An adjustment of scientific management comprising behavioral science. Procedia Computer Science, 62, pp.578-584.