Organisation & Management Theory - Week 11

Many organisation and management theories have been suggested by various theorists. Contingency theory is a behavioural theory that suggests there is no best way to organise a business, to lead a company or to make decisions. Instead the course of action is dependent (contingent) on the internel and external situation. Several contingency approaches were developed in the late 1950s (Joan Woodward 1958) suggested that technology directly influences differences in organisational attributes e.g. span of control, centralisation of authority and the forming of rules and procedures. These theories suggested that (Weber's bureaucracy 1930s) and (Taylor's scientific management 1911) theories had failed because they neglected the fact that management style and organisational structure were influenced by various aspects of the environment i.e. contingency factors. Therefore there is no "one best way" for leadership.

Systems Theory (Fredrick Winslow Taylor 1911) involved the study of human behaviour at work using a systematic approach. Taylor studied human characteristics, social environment, task, physical environment, capacity speed, durability, cost and there interaction with each other. Taylor's overal objective was to remove human variablity and he worked to achieve his goal of making work behaviour predictable so that maximum output could be achieved. Taylor strongly believed that humans are mainly motivated by money so he relied on monetary incentive systems.

Case Study To Demonstrate The Contingency Theory

P&O ferries was one of the top 50 call centres for customer service during 2009. This company thought that they provided good customer service but when they actually listened to calls made to the call centre they realised that they could make more improvements because timing was one of the key service areas measured which needed improvement. As a result the company reviewed and overhauled its IVR system to ensure customers are not kept waiting. The other area they needed improvement on was personalisation of calls. Although the company prided themselves on treating customers as people and not just calls, the results of the benchmarking showed P&O ferries that the interactions were process driven and sounded as if the call centre staff were working from a script. The leadership team have now re-invented their call structure and trained their staff to engage in free flowing conversations with their customers.

This case study relates to the contingency theory put forward by (Joan Woodward 1958) because new rules and procedures were put in place by the leadership team to improve customer satisfaction.

Case study To Demonstrate The Systematic Theory

Specsavers was one of the top 50 call centres for customer service during 2009. This company completely changed its service quality strategy and now measure time to answer calls at different times of the day rather than take a monthly average so that they can provide consistency to their customers. They have also recruited an external agency to give assessments on what sort of service they provide on a regular basis. This systematic theory of Taylor is because they have introduced a new reward scheme awarding a king and queen of service each month based on the way the staff engage and talk to customers.

This case study relates to Taylor's theory because it systematically uses goal setting and rewards to motivate employees.

There are good practices now carried out by both P&O and Specsavers and these companies have improved their customer satisfication in different ways. P&O ferries have invested in training their staff to engage in free flowing conversation with their customers to improve sales and make their customers happy. Specsavers on the other hand have used the reward system of choosing a king and queen of the month based on how their staff also talk and engage their customers. The overall aim is the same for both companies and that is to improve customer satisfaction as well as sales. Happy customers always leads to increase in sales.

The Advantages of Scientific Management

1) Increase in production.
2) Increase in efficiency (in quality & quantity).
3) Improves relationship between employees/employers by creating a friendly environment.
4) Decrease in working hours which leads to decrease in stress improving efficiency.
5) Provides a formal environment & chance to improve social networking.

The Disadvantages of Scientific Management

1) Gives production managers a high level of uncontrolled power.
2) Does not take into account the social context of work and the higher needs of workers.
3) Does not acknowledge the variance between individuals.
4) Tends to regard workers as uninformed.
5) Workers ideas and suggestions are ignored.

Conclusion

Many theories and suggestions have been put forward organisation and management. The general idea is to get the best out of employees and employers use various practices to achieve this. Some employers offer rewards to motivate their staff and others invest in training for their staff to ensure their staff work efficiently and professionally to achieve success for the business.

References:

Contingency Theory [online]. Available from: http://dictionary.bnet.com/definition/contingency+theory.html [Accessed on 11 April 2010].

Scientific Management [online]. Available from: http://en.wikipedia.org/wiki/Scientific_management [Accessed on 11 April 2010].

Frederick Taylor & Scientific Management [online]. Available from: http://www.netmba.com/mgmt/scientific/ [Accessed on 11 April 2010].