potential buyers have approached Forsyth Travel about acquiring the company.
The first company; Kaye’s Travel uses a very scientific approach to their
management style, in which they focus on efficiency and profitability. On the
other hand, the second company; Sunsoft, manages their company using a more
human relations approach which is a more relaxed approach to the management of
the company’s employees. This essay is going to discuss and analyse which
company should acquire Forsyth Travel under the optimum management style that
would benefit them the most. Scientific management is a strict style of
management in which employees are trained to undergo tasks in an extremely
specific manner to gain the optimum level of efficiency and therefore optimum
level of profitability. The human relations management style is essentially the
opposite of scientific management, even though it’s goal is to achieve high
efficiency, employees work as a team to complete tasks and they can engage in
decision making. Forsyth Travel was founded in 2015 by Julia and Tim Forsyth.
They are a relatively small business that own one apartment complex in Bergen,
Norway which they sell as holiday apartments to tourists. They only have one
employee excluding themselves (Julia and Tim). Forsyth Travel, if they choose
to be acquired by one of the two companies, should chose Sunsoft because of
their human relations management style.
management is a strict management style used by companies that focuses on
optimising efficiency and profitability by training employees to conduct tasks
in a way that allows the task to be completed at the maximum level of
efficiency. The main person to come up with the theory of scientific management
was F.W. Taylor (1856-1915) in 1911, he is also known as the ‘father of
scientific management’ (Phillips, S. 2015, P.45). Taylor came up with the
theory of scientific management when he conducted several time and motion
studies/experiments in which he realised there is only ‘one best way’ to
complete certain tasks in which the absolute maximum level of efficiency is
reached. The ‘one best way’ to complete certain tasks is one of the main rules
of scientific management. In F.W. Taylor’s book The Principles of Scientific
Management he states, “The principal object of management should be to secure
maximum prosperity for the employer, coupled with maximum prosperity for each employee”
(Taylor, F.W, 1911, p.7). Maximum prosperity for the employer is defined as high
amounts of dividends paid to the company as well as creating a sustainable
state of high productivity for the company that will make the increased dividends
last long term. Maximum prosperity for the employee includes the worker doing
their job at the highest level of efficiency that suits their abilities in
order for them to gain the highest wages possible. F.W. Taylors principles led
to a new system in which workers are paid for their output instead of their
time, this system is famously known as the ‘piece-rate system’. The ‘piece-rate
system’ played a large part in the early development of scientific management
as it created motivation/incentives for workers to achieve their maximum work
output which benefits them as they gain higher wages, and this also benefits
the employer as they gain higher output levels which will lead to higher
profits for the company. To achieve these higher outputs and productivity
levels each worker will be allocated a specific job that best suits that
individuals skills and abilities
the other hand, the human relations management approach is focused on teamwork,
job satisfaction and relationships between workers and managers. G.E. Mayo (1880-1949)
is considered the main developer of human relations management. He stumbled on
the human relations theory of management during the time he was conducting
experiments researching further into the theory of scientific management. These
experiments are famously known as the Hawthorne experiments (Phillips, S. 2015,
P.53-55). There were four main phases to the Hawthorne experiments, the
illumination experiments, the relay assembly test room, the interviewing
programme and the bank writing observation room. The illumination experiments
aimed to discover whether the intensity of lighting in the work place affected
workers productivity levels, the results of this test concluded that there was
no apparent relationship between production and level of lighting however in
the control group where the lighting remained unchanged, productivity
increased. This lead to more experiments focused on factors of worker
productivity. The second phase of the Hawthorne experiment was the relay
assembly test rooms, in which it was discovered that workers gained higher
productivity levels due to the increased amount of attention given to them by
their managers. During the interviewing programme approximately 20,000
interviews were conducted into further research the impact that work
supervision had on levels of production. The final phase of the Hawthorne
experiment was the bank writing observation room, which was fourteen men in a
bank writing room, in which it was observed that natural leaders formed, and
sub-groups were also formed, however, the group decided on a lower level of
output because pressures on individual workers were so high. This final phase
showed researchers that output/production levels to be optimised it is
important for employees to have a strong and respectful relationship with their
superiors/managers, as the attention increases production levels (Phillips, S.
X and Y is a theory created by Douglas McGregor in the 1960’s that assumes two
different types of workers in the perspective of the manager of a company. The
two types of workers are categorised under the two theory’s X and Y. Theory X
assumes that employees dislike work, have low ambitions and avoid
responsibility therefore managers tend to reward employees because of good
performance and they tend to discipline workers with poor performance levels. Workers
that shows traits of theory X are managed scientifically as the piece-rate
system used in scientific management works on theory X workers because they are
paid regarding their output levels (performance levels) therefore if they underperform
they will not receive their maximum wages possible (McGregor, D, 1960). Theory
Y assumes that employees enjoy the challenges of work and are very self-motivated.
It says that workers are motivated by being allowed to work using their own
initiative and when they are allowed more responsibility and better work
relationships with their superiors. Workers that show traits of theory Y are
managed using a human relations approach because it allows them to have more
responsibilities within their jobs. In relations to Forsyth Travel and the two
companies that are interested in acquiring the business, Kaye’s Travel will
assume that the employees of Forsyth Travel will have the traits associated
with theory X and Sunsoft will assume they have traits associated with theory Y.
Forsyth Travel are acquired by Kaye’s Travel, the benefits would be that the
managers will have more control over the employees which therefore means they
will have good control over production, however in Forsyth Travel’s case this
isn’t as relevant because they offer a service, not a product that needs
physically producing. Scientific management is more beneficial for companies
that produce products as the management style allows employees to control
production well using the piece-rate system mentioned earlier in this essay. A
large benefit of them being acquired by Kaye’s Travel is that decision making
will be very fast due to management making all the major decisions which will
save time for the company. Another benefit is that under the management of
Kaye’s Travel Forsyth Travel will have maximum utilisation of resources which
in theory will lead to optimal output possible. There are also several
disadvantages that come with Forsyth Travel being acquired by Kaye’s Travel,
for example, management will take full control of them which means the owners
(Julia and Tim) will not be able to make important decisions for the company
they founded. Another disadvantage is that this style of management may cause
high stress levels for the Forsyth Travel employees due to the piece-rate
system in which employees are punished for low productivity levels. The high
stress may cause the Forsyth Travel employees to regret choosing Kaye’s Travel
or in extreme cases may even cause employees to resign because they do not like
the new management styles. Scientific management also can cause employees to
become de-motivated due to the strict rules that only monitors their
performance, this can also cause employees to feel alienated and unworthy as
they do not have strong relationships with their superiors (Wisestep, 2018).
If Forsyth Travel are acquired by Sunsoft, there will
be many benefits for them that will come from Sunsoft’s human relations
management style. For example, the management style creates a strong ‘team
spirit’ within a company due to employees having strong, friendly relationships
with their superiors/managers. This effect creates motivation for employees because
they feel like they are very wanted and respected by their managers, unlike
scientific management, in which people feel the opposite ways e.g. unwanted and
unworthy (Bradley, J, 2018). One of the largest problems with the human
relations management approach is the unpredictability of workplace and employee
behavior (Quizlet, 2017). The unpredictability can make it extremely hard for companies
to predict productivity and output levels because there isn’t a specific way to
complete every task like there is under a scientific style of management,
therefore it is hard for companies to gain very accurate predictions. Human
relations management style will be much more effective and beneficial to
Forsyth Travel because of the industry they are in. Forsyth Travel are in the holiday/travel
industry therefore they don’t physically create a product, as they offer a
service; an apartment complex in Norway available for tourists to rent out for
a certain time period. This means that Kaye’s Travel will not be very effective
for this industry as they use a scientific management style. Sunsoft will be a
better company to acquire Forsyth Travel because the human relations management
approach will allow the current Forsyth Travel employees to still engage in
decision making for the company that they founded and it will also allow them
to be involved with the new managers that acquired them, however if they are
acquired by Kaye’s Travel under a scientific management style then will lose
control of the business they founded, which is something that Julia and Tim
would probably dislike.
In this paragraph, real life examples of both
management styles will be analysed. An example of scientific
management being used by a large company is Amazon, Inc, (AMZN). They use
scientific management within their UK and US warehouses. The BBC panorama
documentary; Amazon: The Truth Behind the Click (2013), follows a new employee
at Amazons delivery warehouse in Swansea. It shows how strict the management
rules are for warehouse employees, for example, employees are only allowed
three strikes before being fired from their jobs, they will receive strikes by
being late or missing a shift. Amazon employees also must meet specific targets
within a certain time limit. This method causes high levels of stress on their
employees which has been proven to be bad for their health in the long term.
According to W.F. Baker (2015) Amazons workplace has been viewed as a
“bruising, thrilling workplace” and further research into the topic has
revealed that scientific management can ‘yield high short-term gains’ however
sustainable gains are ‘founded on managers who exemplify integrity, inspiration
and kindness’ (W.F. Baker, 2015), these traits have been utilized in the human
relations management style. An example of human relations management being used
by a large company is Cadbury (CBY), who are known for making their employees
interests a main priority in their company. Cadbury believes that the main
component of success for their them is the ‘commitment and performances’ of
their employees and they acknowledge that their employees are very ‘important’
for achieving their goals (UK Essays, 2015).
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