Business practice: theory and development Flashcards
What was the root of creativity and innovation?
The British industrial revolution (1730-1850)
because of:
- availability of skills and knowledge combined with a social system that encouraged the cross-fertilisation of new ideas
- growing pool of entrepeneurs
- banking systems that support investment funding
- abundance of raw materials
- labour force for emerging factories in developing towns
- well kept road and canal system for movement of trade
- British government passing legislation supporting new business ventures and protecting innovations
What was the new way of organising work?
Adam smith (1776)
- distribution of task to worker output, could increase efficiency.
- but dominance of trial and error and rule-of-thumb approach.
What are the three complementary approach, in the search for the best practice?
Max Weber In Germany
Fredrick Taylor in USA (1856-1917) break down task to single components, reduces skill requirements/training, precise measurements, payment by results, separate design fro execution.
Henri Fayol in France (1863-1947) combined continuous flow and assembly line with principles of sic-fi management.
Summarise the “one best way” approach
- sieved employees as automatons (machine approach)
- assumed monetary rewards are primary motivation to work
- ignored the psychological needs and capabilities of workers
What was the Hawthorne study and experiments?
the initial focus was on how the work environment affects productivity.
The hawthorne illumination experiments:
- in house experiments 1927-32
- aim to determine relationship between light intensities and productivity
- test group increased productivity regardless of change to light, it was because they were being watched (observed)
= human factor rather than physical working conditions determine satisfaction and performance.
What were the ban-wiring room experiments?
Small group of male workers:
- producing electrical components, informal norms around production targets.
- enforced by gang leader and peer pressure
- employees were not solely motivated by economic drivers, but by soils pressures, peer group and informal side of the org. rather than formal rules and hierarchy.
What are the socio-technical system (STS)?
Mechanism of coal mining (1950s):
- long-wall method (assembly line) increased efficiency
- but fell in productivity
= the new arrangements destroyed informal fabric of social relations, need to combine human needs and technical efficiency.
was composed of:
- technical system and the social system, both were needed.
What is the contingency theory?
originated in 1970: more influential than the classical or HR approach.
- rejects the one best way approach and argues that the best way to organise it is based on the circumstances.
- the structure and operation of an organisation is dependent (contingent) on the situational variable it faces (environment, technology and size)
what are the pros and cons with the contingency theory?
Strength:
- identified the importance of the relationship between the organisation and contingent circumstances
weakness:
- encourages the view that there is a key situational variable which will determine the survival of an organisation
What are the three unifying themes in this topic?
- organisations are open systems
- organisational structure is dependent upon the particular circumstances, situational variables faced by each organisation
- there is no one best way for all organisations bit rather a “One best way” for each organisation.
what happened in the 1980 with America and Japan?
1980:
- american productivity and internal competitiveness declined.
- Japanese success in automobile, electronic, computer and machine tool sectors.
- Japanisation (Womach et al , 1990) highlight problems of the western short term profit orientation
- flexibility was seen as central
- need for entrepreneurs and change masters
What was the response to this in 1980-1990?
- the rise of Guru consultants such as Tom Peters and Kanter.
- western-oriented approach to excellence, reshaped individualism for competitive success
- book of influence: in the search for excellence
What are the key attributes for a successful company according to Peters and Waterman (1982)?
- a bias for action
- close to the customer
- autonomy and entrepreneurship
- productivity through people
- hands on and value driven
- stick to the knitting
- simple form, lean staff
- simultaneous loose-tight properties
What does Jackson argue about the guru literature trend amongst organisations?
- The rational approach: fits needs of management
- structural approach: ideas seen to serve the political-social and economic context of the time (instability?)
- institutional and distancing approach: during uncertainty pressures for organisations to imitate each other, creating isomorphic tendencies
- the charismatic approach: look to charismatic guru for guidance (Jackson, 2001)
What was Kanter’s Ideas?
- need to create flatter, responsive and less complex organisations
- contract out some functions, develop strategic alliances to pool resources, share ideas and info
- unleash individualism through empowerment and employee involvement, encourage innovation and entrepreneurship, promote flexibility and partnership
- be fast, flexible and friendly
