Page 152 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes Since, according to Taylor, the worker does not possess creative ability let alone intelligence
and wisdom, the elements of a human-oriented management system which promotes sound
industrial relations such as communication, consultation and participation, found no place
in the theory. The hallmarks of organizations based on this model are centralized and clear
lines of authority, a high degree of specialization, a distinct division of labour, and numerous
rules pertaining to authority and responsibility, and close supervision. This concept of
management can be seen as an ideal breeding ground for an industrial relations system
based on conflict rather than on cooperation.
The opposite theory, appropriately styled the human relations school, had as one of its
earliest and greatest exponents, Douglas McGregor. He gave an impetus to the development
of a management theory which focused on the human being as a part of an enterprise that,
in turn, was viewed as a biological system, rather than as a machine. Human relations, trust,
delegation of authority, etc. were some of the features of this theory. In the preface to his
classic The Human Side of Enterprise, Douglas McGregor, underlined the necessity to learn
about the utilization of talent about the creation of an organizational climate conducive to
human growth. This volume is an attempt to substantiate the thesis that the human side of
enterprise is all of a piece that the theoretical assumptions management holds about controlling.
Its human resources determine the whole character of the enterprise. They also determine
the quality of its successive generations of management.
Two basic realities of an organization in McGregor’s model is the dependence of every
manager on people under him and the potential of people to be developed to match
organizational goals. He, therefore postulated that people are not by nature resistant to
change in an organization, and that people have the potential to be developed and to
shoulder responsibility. As such, management’s main task is to organize business in such
a way as to match people’s goals with organizational ones. McGregor believed that the
dynamism for organizational growth is found in the employees of the organization. It could
be said that in McGregor’s Theory Y (as it is called) is to be found the essence of human-
oriented management and workplace industrial relations systems. The events noted in the
succeeding paragraphs which are compelling enterprises to pay greater attention to the
human factor in management, serve to vindicate McGregor’s basic theory propounded as far
back as 1960, if not earlier.

However, subject to exceptions (such as Japan in Asia) most large enterprises continued to
be dominated by hierarchies. This is reflected in the classic “Strategy, Structure, Systems”
(the three Ss) of modern corporations, widely expressed by two writers:
“Structure follows strategy and systems support structure. Few aphorisms have penetrated
western business thinking as deeply as these two. Not only do they influence the architecture
of today’s largest corporations but they also define the role that top corporate managers
play.”

As explained by Bartlett and Ghoshal, “in this concept of an enterprise top level managers
see themselves as the designers of strategy, the architects of structure, and the managers of
systems. The impact of the three S’s was to create a management system which minimized
the idiosyncrasies of human behaviour, emphasized discipline, focus and control, and led to
the view that people were “replaceable parts”.
The basic flaw - particularly in the context of today’s globalized environment of this concept
is that it stifled the scarcest resource available to an enterprise: The knowledge, creativity
and skills of people. Successful enterprises have now moved away from this corporate
design, and their philosophy, which has transformed corporations enabling them to compete
in the new competitive environment, consists of the following:
First, they place less emphasis on following a clear strategic plan than on building a rich,
engaging corporate purpose. Next, they focus less on formal structural design and more on
effective management processes. Finally, they are less concerned with controlling employees’

146 LOVELY PROFESSIONAL UNIVERSITY