Managing people and organizations in changing contexts thing new;often,however,the latest fad is little more than 'old wine in new bottles',which usually turns into something quite disappointing. One good example is Case 1.1 on human relations,which is in the Review questions'section at the end of this chapter,the basis of modern human resource management rests on many of its assumptions and stud- ies,which have continued to disappoint business leaders,judging by the lack of credibility of the HR function in most organizations Finally,I have set out a framework for the book.This framework is based on the ideas that management is practised at different levels and in changing contexts.Above all else,however,management has to pro duce change and innovation,for without these characteristics organiza- tions are destined to go into a terminal decline.Given the importance of organizations to our economic success and social well-being,making effective managers is one of the key goals of advanced industrial soci- eties;the remainder of this book is aimed at helping you in this regard. Review questions Multiple-choice questions 1.1 The study of management is based on which one of the fo lowing characteristics? A The need to understand the difference between pri- vate and public sector work practices B Understanding the context in which management is practised and how this context changes over time. The role of management gurus and their ability to shif the dominant managerial mindset. D The routines and structures that make up an organiza- tion. 1.2 Which one of the following is the main criticism of univer- salism? A It is too abstract to work in practice. B It stems from predominantly US theorists. C It is seen as a fad and lacks concrete evidence D It assumes that practices developed in one context can be applied in all contexts. 1.3 For which of the following reasons was co-determination in Germany not popular with US business and political leaders? A It directly contradicted the American belief in man- agement's right to manage and hierarchical control
22 Managing people and organizations in changing contexts thing new; often, however, the latest fad is little more than ‘old wine in new bottles’, which usually turns into something quite disappointing. One good example is Case 1.1 on human relations, which is in the ‘Review questions’ section at the end of this chapter; the basis of modern human resource management rests on many of its assumptions and studies, which have continued to disappoint business leaders, judging by the lack of credibility of the HR function in most organizations. Finally, I have set out a framework for the book. This framework is based on the ideas that management is practised at different levels and in changing contexts. Above all else, however, management has to produce change and innovation, for without these characteristics organizations are destined to go into a terminal decline. Given the importance of organizations to our economic success and social well-being, making effective managers is one of the key goals of advanced industrial societies; the remainder of this book is aimed at helping you in this regard. Review questions Multiple-choice questions 1.1 The study of management is based on which one of the following characteristics? A The need to understand the difference between private and public sector work practices. B Understanding the context in which management is practised and how this context changes over time. C The role of management gurus and their ability to shift the dominant managerial mindset. D The routines and structures that make up an organization. 1.2 Which one of the following is the main criticism of universalism? A It is too abstract to work in practice. B It stems from predominantly US theorists. C It is seen as a fad and lacks concrete evidence. D It assumes that practices developed in one context can be applied in all contexts. 1.3 For which of the following reasons was co-determination in Germany not popular with US business and political leaders? A It directly contradicted the American belief in management’s right to manage and hierarchical control
Chapter I An introduction to managing people in changing contexts 23 B It meant a loss of US control over German worker rela- tions. C It threatened the US economy for German workers to have consultation rights. D The US government did not want the German econo my to grow. 1.4 Which one of the following provides the best definition of a'mindset'? AA biased point of view. B A way of thinking and seeing that is based on one's val- ues and attitudes C A fully articulated truth. D A constant state of change 1.5 Which one of the following explains how particular mind- sets become fashionable in management thinking? A Economic success of a country B Promotion of the most up-to-date theory. C International conferences on new management prac- tices. D A positive response from the workforce to the applica- tion of new ideas in management. 1.6 Which one of the following is a characteristic of Taylorist and Fordist methods of production? A Close levels of personal supervision B High levels of productivity. C An emphasis on consultation with workers. D Flexible production systems. 1.7 Which one of the following explains the backlash against 'top-down'control in industry? A rise in living standards. B The rise of trade unions. C The changing nature of work. D An international anti-US feeling True or false questions 1.8 Managers don't trust theory because it doesn't fit in with their experience of practice.T or F? 1.9 Relativism in management knowledge and practice means that there is a single best way of managing that can be applied in all circumstances.T or F?
B It meant a loss of US control over German worker relations. C It threatened the US economy for German workers to have consultation rights. D The US government did not want the German economy to grow. 1.4 Which one of the following provides the best definition of a ‘mindset’? A A biased point of view. B A way of thinking and seeing that is based on one’s values and attitudes. C A fully articulated truth. D A constant state of change. 1.5 Which one of the following explains how particular mindsets become fashionable in management thinking? A Economic success of a country. B Promotion of the most up-to-date theory. C International conferences on new management practices. D A positive response from the workforce to the application of new ideas in management. 1.6 Which one of the following is a characteristic of Taylorist and Fordist methods of production? A Close levels of personal supervision. B High levels of productivity. C An emphasis on consultation with workers. D Flexible production systems. 1.7 Which one of the following explains the backlash against ‘top-down’ control in industry? A A rise in living standards. B The rise of trade unions. C The changing nature of work. D An international anti-US feeling. True or false questions 1.8 Managers don’t trust theory because it doesn’t fit in with their experience of practice. T or F? 1.9 Relativism in management knowledge and practice means that there is a single best way of managing that can be applied in all circumstances. T or F? Chapter 1 An introduction to managing people in changing contexts 23
Managing people and organizations in changing contexts 1.10 There is no middle ground between a universalist and relativist position.T or F? 1.11 The major difference between a mechanical and organic mindset is their opinion of the external environment of business and the ability to respond to outside influences.T or F? 1.12 The American model of management,although it has its critics,is broadly successful in most countries.T or F? 1.13 Japanese management models are characteristically bottom up'and give workers a great deal of say in how they are managed.T or F? 1.14 Richard Pascale's claim that'nothing fails like success'in business is a form of relativist thinking.T or F? 1.15 The mechanical model of management is no longer appli- cable to modern business.T or F? Case I.I:The development of human relations,organizational behaviour and the role of academic gurus Elton Mayo,the man who'inspired orga reduce conflict among workers and nizational behaviour courses .around emplovers in Oueensland.his adopted the world'(Hoopes,2003),was of state,he wrote a book,published in Scottish descent but grew up in Australia 1919,entitled Democracy and Freedom, in the early 1900s.He attempted and which warned against greedy employers failed a medical education in Adelaide. and class-conscious workers and their Edinburgh and London,but came to unions pursuing their self-interests study economics and philosophy in Rather than see such a conflict of inter- Australia and was appointed toa ests as a naturally occurring phenome- ship in Queensland.How did this itiner non during the early factory system,he ant 'failure',with a rather conventional described it in psychoanalytical terms as education,come to have such a huge unconscious phobias.He proposed that influence on the study and practice of the parties should act together to management for decades after his death achieve a common social purpose in1949? through industrial cooperation and,in Through a series of accidental meet- doing so,provide an alternative to polit- ings,Mayo became interested in the ical democracy.Intelligent managers, newly emerging discipline of psycholo he argued,could,through therapeutic gy and psychotherapy and,following techniques and by allowing workers self-study,became Australia's first prac- greater participation at work,promote tising psychoanalyst.Because of previ social harmony,not only in industry but ously formed interests in helping also in society at large.His message to
1.10 There is no middle ground between a universalist and relativist position. T or F? 1.11 The major difference between a mechanical and organic mindset is their opinion of the external environment of business and the ability to respond to outside influences. T or F? 1.12 The American model of management, although it has its critics, is broadly successful in most countries. T or F? 1.13 Japanese management models are characteristically ‘bottom up’ and give workers a great deal of say in how they are managed. T or F? 1.14 Richard Pascale’s claim that ‘nothing fails like success’ in business is a form of relativist thinking. T or F? 1.15 The mechanical model of management is no longer applicable to modern business. T or F? 24 Managing people and organizations in changing contexts Elton Mayo, the man who ‘inspired organizational behaviour courses . around the world’ (Hoopes, 2003), was of Scottish descent but grew up in Australia in the early 1900s. He attempted and failed a medical education in Adelaide, Edinburgh and London, but came to study economics and philosophy in Australia and was appointed to a lectureship in Queensland. How did this itinerant ‘failure’, with a rather conventional education, come to have such a huge influence on the study and practice of management for decades after his death in 1949? Through a series of accidental meetings, Mayo became interested in the newly emerging discipline of psychology and psychotherapy and, following self-study, became Australia’s first practising psychoanalyst. Because of previously formed interests in helping reduce conflict among workers and employers in Queensland, his adopted state, he wrote a book, published in 1919, entitled Democracy and Freedom, which warned against greedy employers and class-conscious workers and their unions pursuing their self-interests. Rather than see such a conflict of interests as a naturally occurring phenomenon during the early factory system, he described it in psychoanalytical terms as unconscious phobias. He proposed that the parties should act together to achieve a common social purpose through industrial cooperation and, in doing so, provide an alternative to political democracy. Intelligent managers, he argued, could, through therapeutic techniques and by allowing workers greater participation at work, promote social harmony, not only in industry but also in society at large. His message to Case 1.1: The development of human relations, organizational behaviour and the role of academic gurus
Chapter I An introduction to managing people in changing contexts 25 the world became the importance of the This work began as a study of the effects human factor in an age that was domi- of scientific management ideas on work- nated by the teachings of organizations er productivity and,in particular,the as machines and the role of technology influence of natural or artificial lighting in transforming work and industrial on worker output.However,manipula enterprises. tion of these variables seemed to have no Mayo decided to leave Australia in effect.George Pennock.Hawthorne's 1922 to return to London but,running technical superintendent who conducted out of money,ended up in California. these experiments.began to make other Through personal charm,and an acute changes by introducing rest breaks sense of opportunity,he managed to shorter hours and mid-morning meals secure a research position with the influ- Eventually,Pennock decided to set up an ential Social Science Research Council, experiment by isolating five girls in the albeit aided by some rather dubious ref- now famous 'Relay Assembly Test Room erences he had created for himself. (RATR).Pennock asked them to work at Through his heightened sense of net- a comfortable pace,and examined the working as a way of getting career devel- effects of changes in work conditions on opment,Mayo moved to the Wharton their output.At the same time,however, Business School and then to Har rvard.By he also introduced a strong.group-based cultivating the attentions of its Dean economic incentive.The five girls were Walter Donham,Mayo managed to estab- separated from the main hall,where 100 lish himself at Harvard Busi ess School or so workers were employed and paid Once there he introduced his ideas on on a departmental-wide system:what psychotherapy into the curriculum and individuals produced here didn't have the notion that the manager's main mis much effect on individual earnings sion was to produce social harmony in Following a series of experimental industry.While at Harvard he secured changes to heating,lighting,length of some grant funds,which he used to culti working day,rest-breaks,etc.,productivi vate a group of gifted young researchers. ty rose in the RATR by approximately 10 who collectively became known as the per cent. 'Harvard human relations group' He The girls in the RATR had no supervi- also made key connections with an sor.but Pennock introduced an observer anthropologist,W.Lloyd Warner,a statis- called Homan Hilbarger,who initially tician,T.N.Whitehead,and a biologist, became friendly with the girls,but gradu- Lawrence Henderson.This group would ally began to annoy them by making have an enormous influence on the advances and unwanted remarks.Later progress of American industry and busi- on,Hilbarger created further problems ness education. when he overheard two of the girls dis- The most famous of their projects was ssing whether they would hold back the so-called Hawthorne experiments, their effort or go flat out.He told begun in 1926-27 in the Western Electric Pennock,who replaced them immediate- subsidiary of AT&T,near Cicero,Illinois ly.The result was record output levels
Chapter 1 An introduction to managing people in changing contexts 25 the world became the importance of the human factor in an age that was dominated by the teachings of organizations as machines and the role of technology in transforming work and industrial enterprises. Mayo decided to leave Australia in 1922 to return to London but, running out of money, ended up in California. Through personal charm, and an acute sense of opportunity, he managed to secure a research position with the influential Social Science Research Council, albeit aided by some rather dubious references he had created for himself. Through his heightened sense of networking as a way of getting career development, Mayo moved to the Wharton Business School and then to Harvard. By cultivating the attentions of its Dean, Walter Donham, Mayo managed to establish himself at Harvard Business School. Once there he introduced his ideas on psychotherapy into the curriculum and the notion that the manager’s main mission was to produce social harmony in industry. While at Harvard he secured some grant funds, which he used to cultivate a group of gifted young researchers, who collectively became known as the ‘Harvard human relations group’. He also made key connections with an anthropologist, W. Lloyd Warner, a statistician, T. N. Whitehead, and a biologist, Lawrence Henderson. This group would have an enormous influence on the progress of American industry and business education. The most famous of their projects was the so-called Hawthorne experiments, begun in 1926–27 in the Western Electric subsidiary of AT&T, near Cicero, Illinois. This work began as a study of the effects of scientific management ideas on worker productivity and, in particular, the influence of natural or artificial lighting on worker output. However, manipulation of these variables seemed to have no effect. George Pennock, Hawthorne’s technical superintendent who conducted these experiments, began to make other changes by introducing rest breaks, shorter hours and mid-morning meals. Eventually, Pennock decided to set up an experiment by isolating five girls in the now famous ‘Relay Assembly Test Room’ (RATR). Pennock asked them to work at a comfortable pace, and examined the effects of changes in work conditions on their output. At the same time, however, he also introduced a strong, group-based economic incentive. The five girls were separated from the main hall, where 100 or so workers were employed and paid on a departmental-wide system; what individuals produced here didn’t have much effect on individual earnings. Following a series of experimental changes to heating, lighting, length of working day, rest-breaks, etc., productivity rose in the RATR by approximately 10 per cent. The girls in the RATR had no supervisor, but Pennock introduced an observer called Homan Hilbarger, who initially became friendly with the girls, but gradually began to annoy them by making advances and unwanted remarks. Later on, Hilbarger created further problems when he overheard two of the girls discussing whether they would hold back their effort or go flat out. He told Pennock, who replaced them immediately. The result was record output levels
36 Managing people and organizations in changing contexts Pennock couldn't understand what the workers and use these interviews as a cause of the improvements were-the valve for emotional release.However,he small group effect,lunches,rest periods soon lost interest in the actual experi- or whate er.He chose to reject the expla mental side and gave control of the pro nation of higher output for higher pay gramme to some of his junior colleagues for reasons we can only speculate on. who set up another experiment.the Meanwhile Mayo came across these Bank Wiring Test Room.This experi- experiments as the result of an invitation ment used more rigorous techniques of from the Personnel Director.following a observation and found evidence that talk Mayo had given in New York.He was totally contradicted Mayo's theses. asked to comment on what pennock had However,Mayo chose not to report the found,and this he did with unbounded Bank Wiring Test Room in the book he glee.Scarcely could he believe that he persuaded the Western Electric Company had come across a set of experiments that to sponsor,the 1933 edition of the Human confirmed his thesis that men and Problems of an Industrial Civilisation.In this women could use work as the basis for book Mayo devoted only 40 pages to creating social harmony and quickly set Hawthorne,but described it in eulogizing about reinterpreting the 'data'to fit in terms-as a near-utopia in which the girls with his prior ideas.Mayo originally were never under pressure.Therapeutc analysed the conflict that emerged in the supervision had managed to create har- group through neurosis,but when he mony among a group that subordinated returned in 1928.Pennock had tem- its own self-interests in favour of the right porarily returned the improved working to participate in the greater good of the conditions of the RATR to their original group.To create such communities state by removing all previous benefits practice was the job of the new breed of Productivity rose yet a again,and Mayo managers trained in psychotherapy.The expecting the opposite to occur,was pre- result would be a form of industrial sented with the task of explaining this democracy in which unreasonable demo- unwanted result. cratic conflict would be removed from Mavo turned to the now famous theory the industrial landscape that the more sympathetic supervision A subsequent and much larger and counselling in the RATR,aided by account of the Hawthorne experiments the observer Hilbarger.had helped the by his acolytes,Roethlisberger and workgroup establish a group spirit,a Dickson,was written in such a manner as sense of belonging and sense of working to confirm much of what Mayo had sug- for each other that could not be easilv gested,preserving the idea that human demolished by removing external condi- relations should be concerned with the tions.He also castigated scientific man explanation of group dynamics and out- agement explanations for being unable put changes,and not the more obvious to explain these rises in output.He went scientific management explanations of on to train supervisors in social therapy pay and rewards(though they did recog- techniques so that they could interview nize pay as a contributory factor).From
26 Managing people and organizations in changing contexts Pennock couldn’t understand what the cause of the improvements were – the small group effect, lunches, rest periods or whatever. He chose to reject the explanation of higher output for higher pay for reasons we can only speculate on. Meanwhile Mayo came across these experiments as the result of an invitation from the Personnel Director, following a talk Mayo had given in New York. He was asked to comment on what Pennock had found, and this he did with unbounded glee. Scarcely could he believe that he had come across a set of experiments that confirmed his thesis that men and women could use work as the basis for creating social harmony and quickly set about reinterpreting the ‘data’ to fit in with his prior ideas. Mayo originally analysed the conflict that emerged in the group through neurosis, but when he returned in 1928, Pennock had temporarily returned the improved working conditions of the RATR to their original state by removing all previous benefits. Productivity rose yet again, and Mayo, expecting the opposite to occur, was presented with the task of explaining this unwanted result. Mayo turned to the now famous theory that the more sympathetic supervision and counselling in the RATR, aided by the observer Hilbarger, had helped the workgroup establish a group spirit, a sense of belonging and sense of working for each other that could not be easily demolished by removing external conditions. He also castigated scientific management explanations for being unable to explain these rises in output. He went on to train supervisors in social therapy techniques so that they could interview workers and use these interviews as a valve for emotional release. However, he soon lost interest in the actual experimental side and gave control of the programme to some of his junior colleagues, who set up another experiment, the Bank Wiring Test Room. This experiment used more rigorous techniques of observation and found evidence that totally contradicted Mayo’s theses. However, Mayo chose not to report the Bank Wiring Test Room in the book he persuaded the Western Electric Company to sponsor, the 1933 edition of the Human Problems of an Industrial Civilisation. In this book Mayo devoted only 40 pages to Hawthorne, but described it in eulogizing terms – as a near-utopia in which the girls were never under pressure. Therapeutic supervision had managed to create harmony among a group that subordinated its own self-interests in favour of the right to participate in the greater good of the group. To create such communities of practice was the job of the new breed of managers trained in psychotherapy. The result would be a form of industrial democracy in which unreasonable democratic conflict would be removed from the industrial landscape. A subsequent, and much larger, account of the Hawthorne experiments by his acolytes, Roethlisberger and Dickson, was written in such a manner as to confirm much of what Mayo had suggested, preserving the idea that human relations should be concerned with the explanation of group dynamics and output changes, and not the more obvious scientific management explanations of pay and rewards (though they did recognize pay as a contributory factor). From