Classical Management Perspective

Classical Management Perspective was constructed based on the management theories proposed by American Frederick Taylor, Frenchman Henri Fayol and German Max Weber. They focused on maximizing productivity and profit for organization. And as a result they did not focus on the human factor. The employees were treated as any other machine or resources, they were replaceable. Managers considered the employees to be lazy and unmotivated, hence they were micro managed with reward-punishment tactics. Bureaucracy gave birth to top down management and communication, where employees were supposed to do whatever they were instructed by supervisors. As a result supervisors mistreated and abused employees. And the organizations failed to maintain productivity and growth.

Human Relations Perspective focuses on what was missing from classical management perspective that is the human factor. The managers treat employee as valuable counterparts, assuming them to be responsible and motivated. Employees are encouraged to share ideas and take part in organizational decision making. And that is how human relationship motivates employees and boosts productivity. This is elaborate form of “Hawthorne effect”, employees enjoy the attention they get from management, they feel cared for and they feel motivated to do more and be more productive.

Human resources perspective is better than human relations perspective. Human relations perspective talked about making employees feel like they are cared for, but that does not make the management actually care about the employees. Human resources perspective was designed to support flat hierarchies, increased employee participation, quality control and teamwork. Employees actually got involved in decision making process along with the management.

System perspective acknowledges an organization to be a system and communication is actually the organization (Eisenberg & Goodall). Communication among participants in an organization help make sense of unpredictable situations. To make an organization exist it is critical to maintain the interactions going. The communication is more important that the message or the meaning. Systems theory focuses on the interdependence of the people / employees in an organization and the outcome of the communication among them.

Cultural perspective is bit different from the systems perspective. It focuses on the climate of the organization. This climate is result of shared values and beliefs, common practices, skills and actions, rules and some organization wide assumptions. Climate is more about the mood employees have and the parameters are diverse, such as satisfaction with the pay, satisfaction with coworkers, supervisor and it is subjective, might vary employee to employee. As Gibb identified the better climate is supportive and lead to member satisfaction.

  • What theoretical perspective did the last organization (I worked for) take towards its workers?

After studying all 5 theories I could see some similarities with the “Cultural perspective” but mostly I could relate with “human resource perspective”. But I think all organizations would be able to relate to or use System or cultural perspective of communication to some extent. So, the organization I am part of or was part of, have cultural and systematic communication. I work in an IT consulting firm and I am part of a team. And as a team member I think we have more of human resource communication day to day.

As part of the team with a manager, we follow a MBO and we have a quality control in place to make sure we deliver quality product. In our regular meetings everyone is encouraged to share status of assignment and share ideas or solutions. So we as employees feel more comfortable and valued. Mostly these are the major similarities. Until the project is over keeping the team in place is also somewhat critical for smooth execution of the project.

For bigger projects we interact with other teams within organization or outside of our own organization, we follow certain protocol but to achieve a common goal, in most of the cases to deliver a product for our common client. And without the interaction, it would be impossible to deliver anything. For example, the applications would integrate with each other and regardless of which organization we belong, the teams working on the projects would have to interact. In this cases, I can see some similarities with system communication.

And when we join the organization we went through onboarding training that gave an overview on the company and the culture. For example, we were specifically told not to make any joke as I work for an MNC and people from different countries and cultures work, so one might find a joke offensive. So my current organization has a culture of not making crude jokes. Or another example from my previous company, being mindful of accent, it was an MNC too and people might find it hard to follow any heavy accent. These are small examples of cultural perspective of communication in organizations.

 

What was it like working within the boundaries of that perspective?

Personally, I have found bureaucracy to be frustrating at times as it slows the processes down. Say for example, I apply for a vacation at it goes to my manager for approval, and unless my vacation days are approved, I cannot use the vacation days that I earn. But I do realize the importance of it, as a manager, it is important for supervisors to make sure that all employees do not go on vacation on same time.

Another example would be I have worked in teams where managers took a top-down approach and team members working in those teams did not have much say. The climate becomes suffocating. And it is hard to change such climate in a team where managers are autocratic. I would not say this was a cultural problem, not all the managers were same in the organization, it depended on the manager mostly.

 

References

Gibb, Jack. (1961). “Defensive Communication.” Journal of Communication, 11, 141-148

Eisenberg, Eric, & Goodall, H. L. Organizational Communication: Balancing Creativity and Constraint. New York: Bedford/St. Martin’s. 2001. Print

 

 

When My Own Expectations Influenced Your Attributions about another Person

Abstract

We often end up making judgements about a coworker. Especially when they join the team. But after working with them we realize the newest team member might not be exactly as we perceived him or her on the first sight. I think it is critical to understand a team member’s strength and weaknesses to build a better working relationship. Although we start with a certain set of expectations but it should evolve with time as we know the person better. And I am aware of the fact that I could be wrong when I make such attributions, the person can prove to be better or worse. So it is essential to have an open mind and not to be egotistical, as Alexia LaFata has said “To be open-minded means to remove your personal biases and prejudices from any situation and completely immerse yourself in another experience.”

 

 

 

When My Own Expectations Influenced Attributions about another Person

I considered many instances and decided to present the one that changed my perception in most profound manner. I work in a team environment and the team size and members vary project to project. I would like to share my experience with a team member from my past project. This specific team member, whom I met over lunch at work. I had known him for a while before he joined my team for a project.

 

What type of expectations did you have and what type of attributions did you end up making?

When I got to know about my soon to be team mate, he was working in another project. And I saw him working really hard on his project. I got to know his academic background and I was impressed, he was pretty good and had impressive grades in university. Actually he was a University topper. In my mind I kind of concluded he was smart and would be super capable resource.

The project was pretty tough, with a tough client, we were working on a difficult application under tight schedule. And the team was fairly new. So we needed strong leads. Leads with knowledge of work, who would be hands on and could train other team members. And we had to work long days.

I expected him to be highly intelligent and diligent in his work. As a lead (that was his role in my project) among all the expectations I expected him to review other team member’s deliverables before sending it to Customer. I was confident that he was capable enough to handle everything and like I mentioned, his academic records and what I observed that he was working hard on previous project, made me attribute these. And a smart person who is hard worker can be a great asset in one team. But here the point to be noted is – he was playing a team lead role, which required knowing the work and essentially reviewing team members work, reporting etc.

And of course there were project specific needs, such as working long hours. Training team members as needed and handling tough project conditions given the fact that we were not working for a happy client.

 

 

In hindsight, how accurate do you think that these attributions were?

               I was partially accurate, I really enjoyed working with him. As I expected him to be smart, he was smart and he understood situation or a problem as expected. But where I was wrong was I expected him to be great at being team lead too. His IQ did not make him diligent enough. The reason I say that, in the initial phase of project he sent out some data / report to customer that was absolutely wrong. I found out about it when I was reviewing and as you can imagine it was already late. In case it is not obvious, it was my mistake to attribute him to be diligent and having confidence on him for being thorough and diligent with his work. I did not work with him before or I did not verify or review his work before. So of course my judgement was wrong. As Jeff Haden mentioned “Great employees are reliable, dependable, proactive, diligent, great leaders, and great followers”. He and I both made mistakes, and I learnt from mistake quickly, as my manager suggested that I review everything before the deliverable goes to customer. And I started doing that. I used to find issue in reporting every day. To be honest I was disappointed with him and myself. Because I was wrong to think he would be a great leader, and he was not quite there yet.

Although I must mention that he was a hard worker and worked really long hours most of the days, and handled the client pretty good. Another area he faced challenge was training and grooming the rookie teammates. I am pretty sure it was not easy to do, but then it was one of the expectation that he would handle that. It wasn’t something I could have a guess, although we got some experienced resources to handle the situation later.

But like I mentioned before, it was a great learning experience for me. And I do this till date, I try to be through with my review. I have understood or rather learned that any resource who was great with studies may not perform same under pressure. And my preconceived notions cannot be an excuse for poor quality of deliverable. I try to not form any judgment or attribute for any resource at the beginning of the project. Having open mind gives me a better chance to really verify before I attribute. I am probably an incremental theorist. As I believe people might behave differently under different circumstances and personalities do change based on situation or experiences one goes through.

 

 

 

References

LaFata, A. (2014, January). The Most Important Quality You Will Ever Have In Your Life Is Being Open-Minded

. Retrieved from https://thoughtcatalog.com/alexia-lafata/2014/01/the-most-important-quality-you-will-ever-have-in-your-life-is-being-open-minded/

Haden, J. (2012, February). 8 Qualities of Remarkable Employees. Retrieved from https://www.inc.com/jeff-haden/the-8-qualities-of-remarkable-employees.html

Gap between CEO salaries and average employee pay

 

 

Abstract

A chief executive officer is the highest ranking officer in a company. As part of his responsibilities he makes final corporate decisions, manages overall business operation that include company finance, resources and communication between board of directors, shareholders and employees. The high pay might seem very much justified with the role and responsibilities a CEO might have. A CEO plays a role of a team leader, and having a leader who is great at team building is essential. CEO is a strategic planner, in any sector businesses are competing against each other, and a CEO makes sure his company comes out at top. Moreover a CEO interacts with board of directors and looks after interest of company stakeholders. So with so many critical responsibilities it is perfectly understandable why CEO’s pay is sky high. But given the fact that CEO pay and average company pay currently stands at 300 to 1 currently is not really motivating fact for employees

Keywords: ceo pay, income inequality

 

 

 

Gap between CEO salaries and average employee pay

Is it ethical for CEOs to be paid so much more than other employees?

It might not be ethical for CEOs to take a huge pay check, as one of the responsibility CEO has to motivate and inspire each and every employee. And an average employee with average pay check might not feel that CEO getting a huge pay check is fair since all the execution is done at ground level. Higher CEO pay demotivates average employee (Seymour, 2016) and CEOs action that demotivates employees is unethical.

Does this practice use a valid reward distribution system?

Given the scenario a company doing extremely well sales and profit wise, a CEO gets a fat pay check, and it is true that CEO motivates and drives the team or the employees to get the success, so she / he deserves recognition. But it is also true that if CEO pay is 300 times of average employee pay (Mackey, 2009) then one average employee might think that his / her work is insignificant and she / he might lose motivation. A CEOs success is very much dependent on each and every employee’s success. And it is crucial that each employees gives 100% to attain success in competitive market. So this reward distribution system is flawed.

Should companies be considering ways to reduce the gap to improve the overall moral of their employees?

The companies should look for a way to reduce the pay gap, and that might mean reducing the CEOs salary, because it might not be possible to increase the pay for each employee. We know that a CEO runs the company and motivates employees. And each productive and successful employee makes CEOs / company’s success a reality. And one of the responsibility CEO has is to motivate each employee and help the company succeed, if that means reducing own pay check, so that is only way to go. The employees might not feel insignificant and if they see CEO taking a pay cut, employees would realize how criticality of being a team player, that might act as a motivator.  Now the question is what a company can do to reduce the pay gap? Reducing the pay of CEO is a simple solution but that might not be considered as win – win solution, as a CEO might walk away with a bigger pay check. A company can consider stock or equity options for all employees including CEO as variable pay. In that was a higher stock price would benefit each employee. But this option might not work out that well in a huge organization. In those organizations CEO’s salary can be capped like it was in Whole Foods (Mackey, 2009). So, CEO’s salary can up as long as employee average salary goes up, that way employees will work for their own pay check and CEO can benefit from the success of the team too.

Do you think CEO and upper management salaries are subject to ethical consideration?

One cannot deny that a paycheck is a huge motivator. And CEO as an individual might follow the money, join a company that offers a bigger pay. But there is another fact that demotivated employees are bound to leave eventually or they would be less productive. And if employees keep on leaving that will increase the cost of hiring, training and company will lose productive days resulting company lose more money. A less productive employee is no better, company loses money there too. So it is always wise to keep you team and keep them motivated to be successful. Above all the responsibilities one CEO has, the most critical is to maximize sales and profit for shareholders. And a company that offers low job satisfaction is not very popular among employees. So if employees do not want to stay or come to the company that means the COE would fail miserably eventually. As John Mackey pointed out employees really do care about the income inequality and pay gap between average employee and CEO (Mackey, 2009), it should be management’s responsibility address the issue that has any negative impact on workforce, so that company can retain better performing resources and build a loyalty. If after being aware of this issue the management decides to leave it on the external equity market and do nothing, then that would be unfair to the employees and unethical.

 

 

 

 

 

 

 

 

References

Mackey, J. (2009, April). Why Sky-High CEO Pay Is Bad Business. Retrieved from https://hbr.org/2009/06/why-high-ceo-pay-is-bad-business

Seymour, K B. (2016, January). High CEO pay demotivates employees. Retrieved from https://www.professionalpensions.com/professional-pensions/news/2443461/high-ceo-pay-demotivates-employees

 

 

 

Give an example of someone you’ve tried to influence lately

Give an example of someone you’ve tried to influence lately.

In my last project I had to influence a team member who was reporting to me. We had a tight delivery situation where every 2 weeks we (as an application implementation team) had to deliver working functionalities. The team member had a module assigned to him and was taking more time to finish than what was allotted to him.

 

Was it an upward, downward, or lateral influence attempt?

               Since I was his lead and he was reporting to me, it was a downward influence attempt

 

Were you successful? Why or why not?

After providing with an approach that would save him time, he was able to deliver in short period of time. So I was successful to influence him to change his approach to save time.

What could you have done to change the outcome? Explain?

               Let me try to provide small description of the situation first. The team member was taking more than 3 days to complete a task, when only one day was allotted for that particular task he was assigned to. One might say, the estimation to complete the task was wrong. That was possible, but given the circumstances, going back to drawing board, re-estimating and changing the deadline was not the option. That would have caused us money and an unhappy customer. Now, our project manager was asking a very valid question “why is he taking so much time?”

I could have just told the team member that we had a deadline to meet and just hurry up. But, I decided to understand his method of executing the task. I found out he was trying to be really thorough, he was stressed too, since he had the deadline in mind, and he was trying to achieve a lot in very short time. And honestly, I did not see anything wrong with being thorough.  But given the situation, we could not have taken more time to finish one task. So, I explained him the situation, and tried to explain the gravity of the situation in hand. Missing deadline had financial and contractual impacts. He understood and agreed. Now that he was on-board, we had to come up with an approach that would not compromise the quality too much. We identified most critical areas or functionalities business would use most of the time and we decided to focus on those areas first to meet deadline. And less used parts, we decided to work on later.

On ideal scenario, we should have bring in another person who would have helped him share his work load and yet maintained quality of deliverable. But bringing in new resource would have costed money and time to train. But in this case, although I successfully influenced him to change the approach, but it was compromise with the quality. Just to mention, later in the project we took care of that part and client was happy with overall quality.

 

Next, give an example of a time when your behavior was influenced? What were your influencing factors?

In the same project I tried to help customer by taking in some requests those were not our deliverable, neither we were under any kind of obligation to deliver those. And I was influenced by my project manager not to bring in any request from customer.

Essentially 2 thongs influenced my decision, not to entertain additional customer requests – we were not getting paid for those extra requests and we still had to meet the initial deadline, our deadline wasn’t going to be extended because of those additional requests

At first I thought about customer and the relation we could have built, but then working for free and missing deadline would not have helped the team with reputation anyway.

The Stressor Factor and situation

The Stressor Factor and situation

I work in an IT consulting firm. As consultants we are often deployed to projects with tight deadline. The technology varies from project to project, each client has his own set of system and specific way of operating business. Due to tight schedules and deadlines resources do not get much time to learn the system or business process, so the learning curve has to be short and steep. Project managers have to maintain profitability so getting more resources or providing training is not possible. Learning new application / system, understanding the business process and understanding what we are required to deliver adds up along with the actual deliverable, resulting in increased workload and long working hours. I have very little to no control over, what I am supposed to deliver and when, as everything is pre-defined. As a team lead I find myself with a team of rookies. They require training, grooming and all extra attention one can imagine. So all these put me under lot of pressure and that often causes stress.

 

How it can be reduced

               The long hours and workload mainly caused due to tight deadlines, short time to learn and very little to no training. So, everything boils down to “lack of time” and less resources. I am aware that whatever solution I suggest might impact the margin or profitability of the project, but since we are focusing on ways to reduce stress I will not worry about profitability for now. First of all, when we form a team we need to consider and allot some time to train them in the technology and business process. Having the knowledge up front will reduce learning curve and boost productivity. And this is not something I alone can do. The management team would have to initiate this change in process. They need to be okay with the impact on timeline / deadline and cost / budget. And the team need to understand the criticality and benefit of upfront training. Along with that they need to understand there will be minimum room for error and on job they are supposed to know the technology and application, so they should not expect too much help.

The management and Organization would have critical roles. As managing timeline of projects, providing training up front would be a cultural change organization wide, that has to be approved by management.

 

Consider the larger picture of stress management in the workplace. How important is it that organizations help employees manage stress?

               In my point of view it is very critical. Stress often impacts health. I can speak from my experience, due to lack of sleep I used to be very irritable most of the time at work and at home. That impacted my relationship with my coworker. It definitely did not help with productivity or quality of my work. Neither did it help me be loyal to my employer, I wanted to get out of the situation as soon as possible. So the fact of the matter is, if organizations can help employees manage stress that will convert into better functioning team, higher productivity from employees and longer retention rate. One more benefit would be, less paid time offs, employees with good health and good mood might decide to show up at work more often that those who are not happy. It is always profitable to keep employees around, as hiring and training new employee is expensive and risky, because you never know the quality of the new hire while hiring. So, there might be some initial increase in expenses for organization to reduce employee stress but in long run the return on investment would be bigger.

 

Is it incumbent upon an employer to help its personnel to deal with stressors that may or may not be related to the workplace itself?

               Employer should be only worrying about stress related to workplace. Although if an employee is stressed some matter that is not linked with workplace, it might impact employer, as the productivity and quality of output from the employee might suffer, but it is hard to determine if employer can do anything about it. Say an employee is going through a divorce or suffered a loss of closed one, may be management can approve some paid time off, and encourage the employee to seek professional help. Employer should provide health insurance to help the employee cover the cost partially or fully. But like I said, it is hard to find out from employee unless we have an observant and compassionate management team. The manager should notice the grieving employee, offer him / her help, listen them out and then provide solution to show them that the employer cares. That is best possible situation for employee in my opinion.

 

Bernard Ebbers: Innovative Leader or Reckless Risk Taker

  1. Being named as one of Network World’s 25 most powerful people in the world of telecom Bernard Ebbers was a successful leader. Ebbers displayed a charm and led staff members to believe in his charisma. He managed to earn personal loyalty and high performance from staff members (Trevino, L. and Brown, M., 2005)

On another side Ebbers expressed impatience and arrogance when asked about WorldCom’s direction (Trevino, L. and Brown, M., 2005). To cut down costs he banned color copies, replaced expensive coffee with vending machine and played with the thermostat to save on electricity bill. Even his encouragement to invest in WorldCom stock raises suspicion as his wealth was invested in stock and for his and WorldCom’s success the higher stock price was critical. These were few examples of Ebbers’s display of destructive deviant behavior.

 

  1. Bernard Webbers earned loyalty and high performance from staffs but he tied the success of the company with the stock price and with the Wall Street expectations. Employees faced his wrath when stock price collapsed due to earning miss (Trevino, L. and Brown, M., 2005). Ebbers did not promote an open or healthy work environment by creating a “no room for error” work environment. And this encouraged Ebbers managers and employees to engage in deviant unethical behavior. Since Ebbers did not care how the numbers were being produced, the employees took unethical means to meet Wall Street’s expectation and saved the stock price.

Ebbers could have been clear about his expectations of followers. Not focusing so much on bottom line, could have communicated with the employees about his expectations, and use the reward system to hold followers accountable for ethical conduct while being productive. He already had a loyal and inspired employee following, all he needed to do was be ethical and fair and focus on long term success rather than short term stock price.

 

  1. Being named as one of the 25 Most Powerful people of Telecom, Ebbers had tremendous success, mixed with charisma and charm. He earned loyalty and high performance from managers and employees. Clearly the inspirational motivation part was combined with idealized influence that came from the charismatic side of transformational leadership. As Conger and Kanungo (1998) proposed Ebbers being a charismatic leader, influenced followers by arousing their personal identification with himself (Pratt, 1998). Ebbers evidently linked the company’s mission with employees’ self-image that included sense of moral virtue (Gecas, 1982).

 

  1. Ebbers tried to virtually finish competition for WorldCom and his strategy was to buy out competitors. To execute the strategy he needed to keep WorldCom’s stock price high. To maintain the stock price it was necessary to meet Wall Street analyst’s expectations. Webbers created so much pressure on his employees to meet the Wall Street numbers that they did what it took, and it took “unethical” means and fraudulent information. Wall Street rewarded such behavior and Ebbers promoted and approved such culture of inflating number and lying in the company.

In my opinion the key managers should not have engaged in wrong doing to please Ebbers and help his agenda. They should have done the right thing, as a result the stock price of WorldCom would have corrected, but Ebbers would not have been able to continue what he was doing. Either way, the result was not going to be anything good. I realize some of the managers would have lost their jobs, but at least by doing the right thing, nobody would have gone to prison.

 

  1. An ethical leader leads with example. Personal and professional ethics influences managers and employees, promoting fairness and open culture. Moreover an ethical leader promotes a reward based culture. These leaders are perceived as honest, trust worthy, fair and someone who takes care of his people. They take decisions considering future, values, stakeholder interest and of course the long term outcome. Promoting reward system usually motivates manager and employees also do the right thing and yet open communication sets the tone for expectation the company has from its employees. So employees know what to do, and they do it without violating ethics.

Ebbers could have promoted ethical and promoted sustainable growth of the company. Setting up correct expectation with Wall Street would have brought price stability in the stock and open communication and rewards would have motivated the managers and employees to do their job better boosting the bottom line without engaging into unethical behavior. WorldCom might have grown slower than it grew originally, but the growth would have been sustainable in long run.

 

 

References

Trevino, L. and Brown, M. (2005). The Role of Leaders in Influencing Unethical Behavior in the Workplace.  In R.E. Kidwell and C.L. Martin (Eds.) Managing Organizational Deviance (pp. 69-96). California: Sage Publications

Conger, J., & Kanungo, R. (1998). Charismatic leadership in organizations. Thousand Oaks, CA: Sage.

Gecas, V. (1982). The self-concept. In R. H. Turner & J. F. Short (Eds.), Annual review of sociology (Vol. 8, pp. 1–33). Palo Alto, CA: Annual Reviews

A New Pair of Eyes

  1. 1. A New Pair of Eyes

Mark started his new role as a closing manager, where he had to record the daily sales, returns, tax, etc. on a worksheet. He had been instructed on how to do this earlier, but the training manager said he could look at any of the previous 30 days sheets done by other managers to use as examples. Mark looked at the previous day’s numbers which Barb had recorded and found an extremely high amount of returns that day, but no receipts for these returns were saved, which he was told is a requirement. Mark immediately thought Barb must be stealing.

What would you do? Which approach would you use, individualistic, communal or both? Explain.

 

 

A combination of both Individualistic and Communal approach would be most beneficial for “A New Pair of Eyes”

When Mark finds out that Barb issued refunds without those required receipts, he should not conclude anything immediately. There could be 4 possibilities –

  1. Barb is stealing
  2. Barb made a mistake and she would be more than willing to correct it
  3. Barb was instructed by her manager to do so
  4. Mark made a wrong assumption or did not have complete training

Keeping in mind Mark is just starting, bringing allegation to another employee who might be a long timer and with a great reputation, would not be smart. If Barb is stealing a large amount as observed by Mark, then chances are she did not start it yesterday, she should have started with smaller amount. Mark should investigate works done by Barb is past and try to find a pattern, if Barb had records of return without receipts.

I understand, Mark has his own set of “To Do” list to get to, and he cannot invest all his time in researching Barb’s work. But I would recommend investing some extra time and finding out a logical conclusion before taking this to higher management, because this might potentially dampen his own reputation.

After doing the research if Mark finds out that Barb had done this before –Mark should approach the “Training manager” and try to find out from him if there is any situation where it is possible to issue refund without receipts and inform him / her that he (Mark) has noticed that there are records by other “Closing managers” where they have issued refunds without receipts. Now there is a possibility that the “Training manager” is Barb’s reporting manager. But that should not be a matter of concern. Because Mark is trying to fix something he knows to be wrong. Mark’s training manager can determine with all the information from Mark if Barb was stealing or if she was told to do so by her supervisor or maybe she made a mistake which could be fixed.

Now it was the scenario where Mark found out multiple instances of Barb issuing refund without receipts, but there could be another possibility that he did not find any more instance. In this scenario too, Mark should approach his training manager and explain his observation and let him decide if it was one time mistake by Barb or if it is possible to issue refund without receipts or may be with supervisor approval.

So this would be my suggested individualistic approach, not concluding anything and digging deeper keeping in mind that Mark has his own work to finish. But here investing time is necessary mainly because there is a learning opportunity ( in case he finds out that refunds can be issued without receipts with supervisor approval or some other scenario) and there is a possibility to fix a problem(in case Barb was doing something wrong causing employer suffer a financial loss). And as bonus he might receive a pat on the back for doing the right thing and being through, without risking his own reputation for being hasty to conclude something that might not be accurate.

Now there is an opportunity to implement communal approach for the company leadership. If Barb was properly doing her work, Mark needed proper training, so leadership should make the training program better to avoid such confusions in future. Or under different scenario, if Barb was stealing, then the leadership should implement better review/ audit process to avoid such misconduct from employees.

Examples of corporates with good CSR

I would like to talk about my favorite company Google LLC, a subsidiary of Alphabet. Inc. A multinational in true sense head quartered in Mountain view, CA, USA. Currently Google operates in more than 40 countries, India, Sweden, UK, Australia, Japan just to name a few.

Google LLC (formerly known as Google Inc.) was founded on 4th September, 1998 by Larry Page and Sergey Brin. Currently Google is led by Sundar Pichai who is CEO and Ruth Porat the CFO.

Besides bringing great products like the search engine, Google maps, Google Earth, Google drive, android, google docs which are mostly free to use, Google has a philanthropic wing “Google.org”. Apart from nurturing an open culture at work, Google supports social causes such as education, creating economic opportunity, social inclusion, response to natural crisis and caring for environment. Being a large organization google uses electricity that is enough to power 200,000 houses, and that is it leave a lot of carbon footprint (Wikipedia). But now all these electricity is sourced from renewable energy sources, reducing carbon footprints in long term. Moreover, Google is using machine learning to reduce electricity usage. Google Cafes uses ugly looking vegetables those supermarkets won’t sell, reducing waste. And Google promotes using bike and hybrid or electric vehicles – that’s another way google demonstrates being ethical and being mindful about environment and reducing waste.

There is a Native American saying “We Do Not Inherit the Earth from Our Ancestors; We Borrow It from Our Children”. Being mindful about environment and reducing waste Google sets a great example for other companies too. And the impact is not only environmental, more renewable energy usage means more jobs are renewable sector, using vegetables that supermarkets won’t sell means reducing waste and supporting farmers Lastly, promoting biking is promoting exercise and good health for google employee. The stakeholders promoting these behaviors sets a great example for other companies and helps the community all around. The community does not only benefit from the great product Google produces, or the job Google creates but the greater impact google has.

P.S: I was thinking about 2 more companies and I think they are worth shout out –

KFC India – I do not eat deep fried chicken anymore, but when they first opened restaurants around Kolkata, India (My city) a decade back, I used to visit. I still remember my first visit, the person at check out with a big smile on face did not speak to me, I was bit surprised for a moment, then when he turned back and started communicating with his coworkers, they were communicating in sign language, I did not need any more clue to figure out that they were people with special abilities. They did not speak but the management / leadership made sure the customer did not have problem placing orders yet, creating job opportunities for specially able people. It touched my heart and I used to visit more. To be honest, I have not visited them in last 6 years.

Dakshana – Monnish Pabrai the managing partner of Pabrai Investment Fund started this non-profit to educate/ coach the students in India who cannot afford their own tuition but smart enough to make it to the best engineering colleges in India. Monnish Pabrai is a software professional turned entrepreneur based in California, USA. Dakshana is based in India, founded in 2007. Checkout their oprating model @ http://dakshana.org/programs/#social-performance

 

 

Reference

Google. (2017, November 17). In Wikipedia, The Free Encyclopedia. Retrieved 03:24, November 25, 2017, from https://en.wikipedia.org/w/index.php?title=Google&oldid=810852439

Gap between CEO salaries and average employee pay

 

Abstract

With invention of steam powered engine, during the industrial revolution there was a massive change in how people worked and how factories functioned. Transition from manual to steam power, invention of machines, expansion of rail roads and boats made the daily commute of a worker possible – all these factors helped the industrial revolution,

Increased size of workforce, People working with machine, fast growth of industry and demand for productivity were few challenges organizations were facing.

And this was the birth time of classical management theories. Max Weber, Henri Fayol, Herbert Simon and Frederick Taylor came up with different theories but in nut shell they tried to addressed concerns such as hierarchy in organization , division of labor, standardized approach to work, centralization and decentralization of authority, separation of personal and work life, identifying the best employees and fair pay for employees.

The foundation of organizational theories are still valid today especially in manufacturing, service, production line industry and have heavy influence on knowledge driven industry sectors such as Tech sector.

Keywords: scientific management, administrative theory, bureaucracy and organizational structure, administrative behavior

 

 

 

Analysis of Influential Organizational Theories

And Finding the Most Influential One

Scientific Management: Frederick W. Taylor (1865 – 1919) a mechanical engineer who stepped into management consulting, saw a huge need for standardization, efficiency and productivity boost in rapidly growing industries. He believed that there is “one best way” of performing a task. And any work process could be broken into small simple and separate tasks. Then each task can be performed by different employees. In the “Hierarchy” designed by him there was a clear chain of command led by the managers, who designed the work process and gave directions to the employees at the bottom of pyramid. He advocated hiring the best talent and providing them best suited opportunity. His belief was to compensate most productive employee accordingly and firing low or nonperformers. One huge problem with his method was, he treated employees as machines. But his scientific management was an impressive methodology to boost productivity and hence profit, so no wonder it was adopted by large mass producers like Ford Motors.

Administrative Theory: Henri Fayol (1841 – 1925) came up with administrative approach that had 2 overall principles. Coordination that was essentially hierarchical pyramid, spoke about a group of employees with routine work, reporting to only one supervisor, and the supervisor having control only over that group. The Specialization or the grouping of organization’s activities was based on formation, purpose, process, customer size and geographical location. Henri Fayol’s administrative theory was severely criticized for being overly simplified by Herbert Simon. (Laegard, & Bindslev, 2006)

Bureaucracy model:  Max Weber (1864-1920) father of sociology also developed a great understanding of bureaucracy. And he defined bureaucracy as a specific administrative structure, which is based on a legal rule-oriented authority (Scott, 1998: 48) and has following features –

Fixed division of labor among participants / employees, Hierarchy of offices, set of general rules that govern performance, Separation of personal life from professional life to avoid favoritism, Selection of personnel on the basis of technical qualification, equal treatment and Employees view employment as career.

His model is followed in both government and private organizations today but it is not perfect as people take advantage or the system and the bureaucratic red tape slows down process. Sometimes rejects anything that is out of the line and that might make the employees feel like they are caged within the rules of the organization.

Theory of Administrative Behavior: Herbert Simon (1916 – 2001) was awarded noble prize for his contribution on business education on a foundation of fundamental studies in economics and behavioral science. (Lindbeck, A., 2014) I feel this is most influential from both historical and managerial perspectives because Simon’s central point was that decision making is the heart of Administration. (Simonsen, 1994). Taylor, Fayol or Weber had given more importance on process, principle and structure of an organization and did not give due importance to the fact the organizations are built with people. And the importance fact is that these people take decisions and the decision run an organization. Simon observed that decision making is a 3 step process –

Intelligence activity or information gathering, recognizing and defining the problem

Design Activity consists finding alternative solutions and impact analysis

Choice activity or the last step includes finalizing choice and implementing it to fix the problem. According to Simon any decision is taken based on values (that is subjective) and facts (which is objective). And according to him there are 2 main types of decisions to be made –

Routine decisions – which is mostly fact based and major decisions or those are not routine – are driven by both value and fact. That is why he concludes it is not possible to take 100% of the time to take rational decision. Herbert Simon has shown administration is a science and not just an art.

How these concepts impacted the development of the current organizational theories

Each of the above stated theory pointed out the importance of productivity increase, hierarchical structure and bureaucracy in organizations. Current organizations are more than just production line or factory. And for these knowledge driven or service industries Simon’ Administrative Behavioral theory is more relevant. In today’s world of information technology data and information are abundant. More and more organizations are moving away from hierarchical organization model to team based model. It is important to form a highly effective and functional team. Each team member should have responsibility, accountability and has to be empowered to take certain decisions. Centralized decision making or in other words if only manager has to take all the decisions in team, then that can cause bottle neck and can slow the team down. As long as each member of the team is aware of the common goal and working towards achieving it, manager can focus on only removing impediments and help the team progress more smoothly. And routine decisions can be automated with help of information technology and that would free up managers time, and manager could better utilize his / her time.

 

References

 

Laegaard, J. & Bindslev, M. (2006). Organizational Theory. Ventus Publishing & Bookboon.com

Scott, Richard W.: Rational, Natural and open Systems, 1998.

Lindbeck, A. (2014): “Herbert A. Simon – Biographical”. Nobelprize.org. Nobel Media AB 2014. 20 Nov 2017. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1978/simon-bio.html

Simonsen, J. (1994). Administrative Behavior. 19 Nov 2017, http://www.jespersimonsen.dk/Downloads/Simon-introduction.pdf

The Hawthorne effect and what it does not tell

In our readings it suggests that individuals tend to change their behavior if they believe they are being observed-this is called the Hawthorne Effect. As Organizational Leaders what does this phenomenon tell you about observed behaviors and those you may not see? How does this impact the broader context of an organization, particularly when trying to gather authentic data on organizational behavior?

 

The Hawthorne effect and what it does not tell –

“Hawthorne effect” is the term coined by Henry A. Landsberger, after analyzing Elton Mayo’s study on worker productivity during 1924 – 1932.

Elton Mayo studied correlation between the lighting on the factory floor and productivity of factory workers of Hawthorne Works near Chicago. Elton Mayo made an observation that change in any physical variable (including lights on factory floor) boosts worker productivity. With this observation he concluded that productivity goes up when worker realizes that he is being noticed or observed.

The study by Elton Mayo produced very compelling results and the organizational leaders will never be able to discount the “Hawthorne Effect” ever in future.

When a worker is part of a study in an organization, is aware that his/her actions are being monitored, he / she is likely to do better. But depending on the circumstances the reason behind the performance might vary. For example if the outcome of the study is a reward of incentive / bonus, workers might try harder. But the reason behind the performance changes when the study outcome is punishment such as “no bonus” or “loss of employment”. In first instance the performance is reward driven and for the later instance it is fear driven.

 

It is hard to conclude reason behind the increased productivity of workers in Elton Mayo’s study. Because

We do not know number of worker participated throughout the study

If anyone was fired or hired during the study

If the compensation was fixed during the study

And there are many more unknown factors, so it is hard to conclude what made those workers feel like they were the chosen ones, was it just the fact that they were aware about the study being conducted or did the management fire all low performers and kept high performers, hence with time the average output kept increasing? Or may be higher productivity was being rewarded with higher bonus, so everyone worked harder. Assuming that no one was hired or fired during the study, did Elton Mayo try to make the workers feel that they are special in some other way, if only making workers feel special increases productivity, and in that case Elton Mayo would have gotten similar result.

 

Impact of Hawthorne effect –

While performing a study, it won’t be possible to ignore the impact of Hawthorne effect. Since it is plausible that workers (if aware about the study) productivity might get a boost. The first logical step might be discounting a part of total productivity during the study. For example – before the study began the total productivity of the group of worker was 100 and during the study it is “100+x”, it might not be accurate to deduct the “x” amount of productivity, considering that is due to “Hawthorne effect”. The reason is, some of the worker might gain skill and experience (with time) resulting in increased productivity “x”. So my point is, it is hard to quantify the exact amount of increased productivity caused by Hawthorne effect. So either the leaders can let the workers know about the study and risk some up / downside of productivity before or after the study which is hard to quantify.

 

Or leadership should not inform the workers or employees about the study. In that case different teams can be formed and later it would be easier to compare data from different teams and go with the best result.