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Rational and Natural Theories of Management
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Rational Theories Assumptions The underlying assumption of the rational management theory states that people act and make decisions according to fundamentally rational and calculative thought processes. Workers being paid on a piece-rate system figured out ways to limit the amount of work they put in while still being satisfied by their compensation, developing such practices as quota restriction and goldbricking. This demonstrated that people possess an inherent aversion to working more than they have to, especially given a system in which the compensation does not justify the extra effort. This differs from the high commitment practices proposed to exist by natural motivational theorists, in which people are supposedly willing to put in additional levels of effort despite not necessarily being adequately compensated. Rewards and Punishment According to Theory X, people are inherently self-centered. Implementing these practices in the work places involves creating an environment where the job becomes routine and secure so that workers and seamlessly carry out their duties. In these approaches to management, another person or a machine assumes the responsibility for the workers and forces people to work through a system of controls. Unlike McGregor's Theory Y where workers are given the freedom to be creative and self-manage, In contrast to the self-management in natural systems, simple control requires the attentive oversight of a supervisor to keep workers in line. The foreman assumes responsibility for all of the workers and is directly involved with the entire process: initiating the direction of the worker, evaluating their performance, and administering a disciplinary or rewarding response. Because simple control requires the full oversight of the foramen, it is best implemented in small firms where a person can have direct involvement from start to finish. Technical Control Technical control implements a rational system of management by means of a physical device such as a machine or computer software. Instead of relying on managers to tell workers their duties, machines direct the pace of production, enabling an impersonal implementation of the direction of work through an external device. This eliminates the need for skilled laborers and makes it easy to identify the weak link in the process. In contrast to the free flowing creativity and relaxed natural systems, technical control creates a work pattern that is consistent routine where workers are motivated to keep up with the automated pace. Technical control is effective when work is relatively repetitive and when production is too broad for a supervisor to monitor through direct observation. The most famous example of technical control is Fordism in which workers were paid relatively high wages while turning out a mass production of cars. Bureaucratic Control Bureaucratic control involves the creation of rule systems that clearly defined how perform a task. Rational theory is implemented because jobs are earned by merit and decisions are made through enforced rules ). Workers are punished by their authorities in the chain of command and have explicit consequences for their failure to perform. Workers are motivated through career incentives such as an up-or-out system or tournament system in which they are rewarded and promoted based on performance. While natural systems allow for flexible job design and rotation, this approach allows for the potential upward mobility where skill retention and dedication are rewarded. Furthermore, the bureaucratic control shields against recession and younger competition thereby assuring job security. Limitations Rational systems of management have been proven to be effective such as in fast food chains such as McDonald's where employee efficiency is maximized by employing Taylor’s theories of scientific management. However, flaws in the assumptions of the system and implementation in organizations illustrate the limitations of rational systems. Workforce and Organization Type Rational systems are limited by the types of organizations and workers the theory may apply to. Not all workers are motivated by reward alone. For example in the non-profit sector, Leete shows that wage dispersion and motivation show a different relationship than in the private sector. Consequently, one can conclude that rational theories which rely on employees’ regard for punishment and reward do not fit institutions, such as non-profits, where production and effort are not correlated with compensation. The workers that operate in these environments are motivated by intrinsic factors that better fit natural systems of management. Thus, one can conclude that the assumption that workers are work averse and compensation maximizing limits the set of workers rational theories may apply. Implementing Rational Theories Rational systems are also limited by structural factors. For example, Roy explains how workers may shirk through quota restriction and goldbricking within the confines of a control-based environment despite management’s efforts to optimize efficiency. The use of such employee led adjustments is much more common in natural systems of management where employees are encouraged to take ownership. Natural Theories Assumptions The natural system of management emphasizes the higher order needs that humans have, the desire for teamwork and autonomy, and the ineffectiveness of relying solely on wage incentives. Higher Order Needs The natural system assumes that people have higher order needs, which contrasts with the rational theory that suggests people dislike work and only respond to rewards and punishment. According to McGregor’s Theory Y, human behavior is based on satisfying a hierarchy of needs: physiological, safety, social, ego, and self-fulfillment. Physiological needs are the lowest and most important level. These fundamental requirements include food, rest, shelter, and exercise. After physiological needs are satisfied, employees can focus on safety needs, which include “protection against danger, threat, deprivation.” Because of structural changes in social order, the workplace is more fluid and adaptive according to Mayo. As a result, individual employees have lost their sense of stability and security, which can be provided by membership in a group. However, if teams continuously change within jobs, then employees feel anxious, empty, and irrational and become harder to work with. Unlike the rational theory of motivation, people are not driven toward economic interests under the natural system. For instance, the straight piecework system pays employees based on each unit of their output. Based on studies such as the Bank Wiring Observation Room, using a piece rate incentive system does not lead to higher production. Additionally, Malone argues that the delegation of responsibility is mutually beneficial because it gives employees creative control and increasing productivity for the organization as many people can work collaboratively to solve a problem. Participative Management This involve consulting employees through the decision making process. Markowitz argues that this boosts employees’ morale and commitment to the organization, subsequently increasing productivity. Furthermore, Denison provides empirical evidence demonstrating that employee participation is correlated with better organizational performance. It is important to note that this stands in contract to Graham’s rationalist view that kaizen, a participative management style used in Japan, does not engage employees’ minds in the decision making process. Graham, however, only examines one specific and flawed participative management style that only allows limited input from employees. Google’s investments in family care, food, and professional development cover all levels of McGregor’s hierarchy of needs. Moreover, since employees are autonomous and creative, they are more skilled, scarcer, and require higher wages than otherwise required under rational practices. Since not all work functions require skilled labor for optimal output, natural systems may over compensate as was the case in the Volvo factory that employed engineers on its assembly line.<ref name="Dobbin 9 26" /> By examining the limitations of both natural and rational systems together one can conclude that the proper system to employ is determined by the nature of the work to be completed. See Also
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