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Taylorism and Scientific Management: Work Design Influences
Taylorism and Scientific Management: Work Design Influences The origin of modern management consulting dates back to the early 1900s when Frederick Winslow Taylor, an American mechanical engineer published his work, The Principles of Scientific Management. In his study, Taylor argued that scientific management consisted in devising the one best way to complete a task and then ensuring the workman closely followed the rules, by supervision and incentives. This essay will primarily attempt to discus a proposition that Scientific Management in the 21st century dominates the work design within large firms. Starting with what scientific management is and how it evolved, we will analyze some modern day examples of firms that have adopted Taylorist approach in their businesses. Further, we will highlight both strengths and weaknesses of this approach and also touch base with the works of other authors in the similar domain. Evolution of Scientific Management Adam Smith, the father of Economics, originally developed scientific management in the 1800s. Interested in a factory that operated and produced pins at the rate of 20 pins per employees per day, he applied division of labour i.e. breaking down of complex tasks into numerous simple tasks. As a result of this change, each employee produced 4800 pins per day, a staggering 23900% increase in productivity. However, the greatest breakthrough in scientific management came during the industrial revolution when factories were only focussed on mass production. Workers were trained through lengthy apprenticeships and followed Rules of Thumb i.e. they enjoyed much initiative and control on how their tasks were completed. Also, there was a need to systemize managerial practices. It was here when Taylor, an advisor at the Bethlehem Steel plant, started working towards improving worker productivity after observing gross inefficiencies during his contact with the steel workers. He conducted time st udy and measured performance standards to calculate a full, fair days standard for each task and then emphasized on selection of workers who could meet those standards when motivated by the differential piece rate system. In his book, Taylor (1967, p.10) states prosperity for the employer cannot exist through a long term of years unless it is accompanied by prosperity for the employee, and vice versa; and that it is possible to give the workman what he most wants high wages and the employer what he wants a lower labour cost for his manufacturers. Taylor further suggests that maximum prosperity for a worker can exist only when he has reached his highest state of efficiency and to implement scientific management, the management had to assume much larger share of the responsibility for result rather than the worker and that a managers job is to tell employees what to do and a workers job is to do what they are told and get paid accordingly. Taylor, through various experiment, proposed the four principles of scientific management. First, replace rule-of-thumb work methods with methods based on a scientific study of the tasks. Second, scientifically select, train, and develop each worker rather than passively leaving them to train themselves. Third, cooperate with the workers to ensure that the scientifically developed methods are being followed. And finally, divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks (Taylor, 1967). Taylorism in Industry The First major firm to adopt the principles of scientific management was the Ford Motor Company in 1914. Henry ford believed that the more cars they produce, the more they can sell. His main objective was to mass-produce. Hence he built an assembly-line system, with a constantly moving conveyor belt and minute subdivision of labour. Through subdivision, a complex task was broken into a series of simple tasks for which workers had instructions on how to do it and when to do it. Taylors system insured the most efficient work process was selected and standardized. This way, Ford could employ staff for as cheap as possible and yet keep the quality and efficiency at a satisfactory level. The difference in the productivity levels was striking. Before the assembly line was setup, each car chassis was assembled by one man, taking a time of about twelve and a half hours. Later, with standardization and sub division, the total labour time was reduced to ninety-three minutes per car. This movement of Ford was given the name of Fordism. Taylorism in the 21st century In the 21st century, you can hardly find a successful business enterprise that does not implement the principles of scientific management. It is not that managers study Taylorism before adopting it; in fact these methods of working are so logical that its quite natural to base an efficient business on these principles. McDonalds, the worlds largest chain of fast food restaurants can be seen as a major implementer of scientific management. They have setup their business on the similar lines of a what Henry Ford did to his manufacturing plant, by implementing a human assembly line, where they use food items instead of car parts, and churn out Fast Food instead of automobiles. They follow the highest levels of standardization and sub division. George Ritzer (1996) in his book, The McDonaldization of Society says that the impact of Taylors time and motion studies is very strongly felt at McDonalds. He reiterates Taylors philosophy that the most efficient ways of performing a task has been codified and taught to managers, who further explain to workers. The degree of standardization at McDonalds can be perceived when Ritzer (1996, p.46) mentions, For instance, hamburger chains strive to discover and implement the one best way to grill hamburgers, cook French fries, prepare shakes, process customers, and the rest. One of the major characteristics of Taylorism was the separation of planning, designing and decision making unit of a firm from the production unit. Braverman (1974) supports this attribute of Taylorism in his claim that the production unit operates like a hand that is watched, controlled and corrected by a distant brain, i.e. the management unit. This aspect of Taylorism is very evident in the design of a firms customer care call center. Companies operating in one part of the world often setup/outsource their customer service call centers into countries in another part. For example, an organization based in the UK has its service call center setup in India where labour is very cheap and government policies are favorable. The workers, who may not be skilled, are trained to repeat ad infinitum the same scripted words over and over again and function as a human assembly line. While manufacturing may be moving away from Taylorism, for reasons we will see in the later part of the essay, but the service sector is readily embracing it (Batt Moynihan, 2002). Limitations However, adapting such high levels of standardization and division of labour has some serious limitations. Performing the same simple task, over and over again makes a workers life monotonous and boring. The worker in such an environment is as good as a robotic arm. Ritzer (1996, p.110) criticizes Taylor by stating, Taylors attitude is one precursor to the contemporary effort to reduce human activities to robot-like actions so that humans can actually be replaced by robots. Because Taylor did not have Robots at his disposal, all he could do was hire humans, then dictate to them in great detail what they were to do on the job. To illustrate this further, a Taylorist environment is analogous to software development. Software applications are developed by programmers who write the program code and machines that execute the code and generate output. By giving detailed instructions to workers on what to do and when to do, managers act as programmers and workers as mere machines that execu te the given instructions and generate output. They are not allowed to apply their ideas or exercise any kind of control. As a critique to McDonalds highly scientific and standardized approach, Ritzer (1996, p.15) states that People have the potential to be far more thoughtful, skillful and creative, and well rounded than they are now. If the world were less McDonaldized, people would be better to live up to their human potential. Braverman (1974) substantiates this claim in his statement, Taylorism dominates the world of production; the practitioners of human relations and industrial psychology are the maintenance crew for the human machinery. Hence, in such a work environment, it is hard to motivate employees since money is not always a motivating factor. Some people work for reasons other than financial reward. Also, workers are not homogeneous in their attitudes, work and personality. So the one best way may not be the best for all. By following this approach, firms are de-skilling workers and encouraging them to underperform. Another limitation of the Taylorist approach was that it inspired bureaucracy. According to Warring (1992, p.206), by centralizing power with managers, separating planning from performance, and specializing tasks, firms were encouraging excessive bureaucracy. Managers did not visit the production floor and were thus ignorant of many production matters. They manipulated people like any other factor of production. There was thus a quest to develop an alternative to Taylorism, which called for a stop to treating employees as factors of production, and begin treating them as respected members of community. Human Relation Management The limitations of Taylorism along with practical problems caused by it led to the birth of the human relations school of thought. The movement was established by Elton Mayo, when he conducted a series of behavioral experiments called the Hawthorne Experiments (1924-1933). Two-way communication was encouraged i.e. from worker to chief executive and vice versa for effective management. McGregor (1960) in his book Management and Scientific Knowledge argues that the human relations school is a movement forward from Taylor by inculcating social science into scientific management. He advocated the contribution of social science towards greater productivity in the firm and stated that without predicting human behavior, the control over workers was even harder. He suggested that incentive structure for employee motivation should be aligned with human nature and also claimed that Taylor did not care about ethical values. Conclusion While its is not quite clear that Taylor did not care about ethics and worker motivation as he himself was once a worker at the steel plant. He had also given the idea of setting up suggestion boxes for workers on the shop floor. His main emphasis was on finding the best man for a particular task and motivating him through an incentive structure. Manufacturing today, is moving away from Taylorism. Customers now have more specialized and customized interests. They are willing to pay extra for quality and a differentiated product. Hence, the interest in mass production is declining. Also, with the advent of technology, firms can afford to be more flexible in their production process and reduce the involvement of humans in Repetitive tasks that do not require skill. It is difficult to summarize if Taylorism in its exact sense is dominantly implemented in the 21st century. Just like Henry Ford, Firms have interpreted and modified the scientific management principles in ways to suit their style of business, however, the crux of their efficient existence lies in the principles stated by Taylor. References Batt, R., Moynihan, L. M. (2002). The viability of alternative call center production models. Human Resource Management Journal, 12, 14_/34. Harry Braverman book was Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century McGregor, D., (1960) Chapter 1, Management and scientific knowledge. from McGregor, D., The Human Side of Enterprise. pp.3-15, McGraw-Hill Companies Nelson, D. (1992), Epilogue, in D. Nelson (ed.), A Mental Revolution: Scientific Management since Taylor, Columbus, OH: Ohio State University Press, 237-40 Ritzer, George. (1996) The McDonaldization Of Society. Pine Forge Press Taylor, F.W. (1923).ÃâÃ The Principles of Scientific Management.ÃâÃ New York: Harper Warring, SP., Peter Drucker, MBO, and the Corporatist Critique of Scientific Management. In: D. Nelson, ed.1992. A Mental Revolution. Columbus, OH: Ohio State University Press. Ch. 9. Achieving Competitive Advantage: IKEA Case Study Achieving Competitive Advantage: IKEA Case Study Strategic business units in IKEA Each country is a strategic business unit in IKEA as they are all a part of the organisation but for which there is a distinct external market for goods or services and distinct competitors that is different from another SBU. Also, the financial performance of each country can be clearly evaluated. From the case, it can be noted that each SBU faced the same class of customer the class, but customer behaviors in each SBU are different. For instance the American had a different set f measurement system. Therefore, each SBU needed to tailor its product and service and have particular business strategies in order to satisfy distinct needs in each market segment. Porter (1980) asserts there are basic businesses strategies differentiation, cost leadership, and focus and a company performs best by choosing one strategy on which to concentrate. However, many researchers feel a combination of these strategies (hybrid strategy) may offer a company the best chance to achieve a competitive advantage (Cross, 1999; Karnani, 1984; Miller and Friesen, 1986;; Miller, 1992;). There is much debate as to whether or not a company can have a differentiation and low-cost leadership strategy at the same time (Helms et al., 1997). Porter felt differentiation and cost-leadership were mutually exclusive (Helms et al., 1997). However, research shows this is not the case (Kumar et al. 1997). This case study is an example of how IKEA employed a hybrid strategy and successfully maximize its competitive advantages. Generic strategies can be successfully linked to IKEA performance through the use of key strategic practice. IKEA positioned itself as both a cost leader as well as differentiator. It distinguish itself from its competitor by providing a better shopping experience, a new concept of lifestyle, a wider range of product, a simultaneous service which involved customers participation. As customer have to delivery and assemble the flat packed furniture by themselves, this unique delivery system also partly contributed to IKEAS low cost strategy. Differentiation Differentiation is one of Porters key business strategies. When using this strategy, a company focuses its efforts on providing a unique product or service (Hyatt, 2001; Porter, 1980). IKEA managed to distinguish itself from other furniture merchants by successfully making its customers around the world believe that instead of selling furniture, it was selling a lifestyle by offering a much wider range of home products. It has been commented by Retail Consultant Bryan Roberts that there were other retailers offer affordable furniture, but there is no one else who offer the whole concept in the big shed. In fact, there were 7000 products from kitchen cabinets to candlestick. Thus, the focused diversified production choice is a decisive advantage. And: Hybrid Strategy With a Hybrid strategy, IKEA was simultaneously achieving differentiation and a price lower than competitors which enables it to achieve greater volumes. It counterbalances the risk of just using one generic competitive strategy, such as the loyalty problems caused y cost leadership strategies (Cross, 1999). In fact, it has been found out that when an organization follows a hybrid strategy, they exhibit higher performance than those following either cost leadership or differentiation alone (Kumar et al. 1997). Similarly in their research on the UK wine industry, (Richardson and Dennis, 2003) found the hybrid focused differentiation approach was best for niche segments. (Spanos et al., 2004) studied the Greek manufacturing industry and found hybrid strategies were preferable to pure strategies. and how they can be applied to the case. You dont do so with every argument however, sometimes you simply offer opinions such as: These product differentiations fulfilled customer need and involves tailoring the product or service to the customer. This allows IKEA to capture market share. The differentiation strategy is effectively implemented as IKEA provides unique and superior value to the customer through product quality. Also, the message of differentiation reached its clients (McCracken, 2002). It s vital to the effectiveness of the strategy as the customers perceptions of the company are important (Berthoff, 2002). These senses of differentiation created strong brand loyalty among IKEA customers and lower their price sensitivity. This helps to insulate IKEA from competitive rivalry. Second, the lack of perceived acceptable alternatives with comparable combinations of features and costs increases the IKEAs power over customers. Third, with the existing customer loyalty, potential competitors need to overcome the attractive uniqueness of IKEA product so it creates substantial entry barriers. While some researchers suggested that when using differentiation, firms must be prepared to add a premium to the cost (Hyatt, 2001), as customers perceive the product or service as unique, they are loyal to the company and willing to pay the higher price for its products (Cross, 1999), price therefore is not the main focus, IKEA went for a different approach. It employed a hybrid strategy which combined differentiation and low cost and focus strategy. Which, whilst they cite references do not offer justification and support for the views that you are expressing. And in other places you merely summarise the theory without providing clear linkages to how this relates to the case such as in saying: Sustainable competitive advantage Sustainable competitive advantage can be achieved through the following methods. Achieving Low Prices Operate with lower margins Develop a unique cost structure Create efficiency in Organizational capabilities Focus on market segments with low expectations Achieving Sustainable Differentiation Create difficulties of imitation Create a situation of imperfect mobility Establish a lower cost position Establishing Strategic Lock-In Size or market dominance First-mover dominance Self-reinforcing commitment Insistence on preservation of position Paraphrasing or summarising the theory is not, on its own, proof that you know how to apply it in a practical situation such as the case study. Be careful of simply offering assertions and opinions you need to cite evidence and draw in facts from the case, compare and contrast them to the models and frameworks from the course and then draw strategic conclusions from that process. When you actually try to apply the concepts explicitly such as in saying: The CAGE Framework The CAGE of Distance framework can be applied in this case study of IKEA in a large extends. The four dimension of distance namely cultural distance administrative and political distance, geographic distance and economic distance between the Sweden and its foreign markets indicated how different is the foreign market and what strategy should IKEA adapt accordingly (Ross, 1999). It has been illustrated by the IKEAs difficulties in reaching the California Hispanic market. Hispanic is geographically far away from Sweden, socially different in term of having larger family size and different color preference. Also there was economically different. Thus IKEA designers need to customize product and pricing strategy according to the particular market needs. The result is more seats were added to dining tables and sofa. Showroom color was warmed to avoid the more subdued Scandinavian palette. you are demonstrating a level of understanding and application of some of the marketing concepts in this response that is at least the sort of thing we are expecting from a postgraduate student at this point in your studies, and sometimes even better than expected. These demonstrate an understanding of the concepts that is appropriate and explicit. Whilst the way that the concepts have been described and applied is really sound, and I was pleased to see the use of a wide range of concepts but remember that you need to use them to analyse (explain and interpret) rather than simply to observe and comment and throw in some course references as headings or citations such as in saying: Strategic position Strategic capability Internally, some strength of IKEA can be identified in the case. IKEAs core competences lay on it low cost distribution system and innovation product design which ease manufacture and distribution which enable the organization to become cost leadership. Besides, with the company creative flair, strong capability in research and product engineering, IKEA can put its differentiation strategy into practised effectively. Macro Environments Externally, IKEA was benefited from the opportunities identified below. Economically, the growing size of the world middle class especially in China, India and Russia implies that there will be an increasing need of IKEAs product (contemporary household furniture with value of money). Also the growing wealth with the worlds population means middle class with higher purchasing power. Socially, the fact that the new emerge middle class are more aware of their home design present an opportunity for IKEA to expand. In conclusion, it e be seen that IKEA has successfully generated strategic choices that utilized its strength to take advantage of opportunities The difference between analysis and commentary is the capacity to interpret and make explicit what the facts are telling you. Commentary on the other hand describes what you see and asserts (rather than proves or demonstrates) a set of conclusions. So, if you take the wide range of course concepts that you are obviously familiar with and compare and contrast a little more explicitly facts and evidence from the case itself, it will make your arguments flow much more directly, and more reasoned conclusions emerge. From time to time, what you offer here is like an explanation of the theory and an assertion that X is true at IKEA! without always providing specific evidence and analysis to substantiate the comments. Understanding how you get to conclusions from your analysis is as important as setting out what the conclusions are. However while it strikes me that your observations about could use some more reasoning your other answers are sound and reflect a good understanding of strategy . Overall, this is well-structured and laid out piece of work and offers a clear indication of your emerging understanding of this subject and ability to apply it in practice good work.