Participative Management Today's International World of Business Term Paper

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Participative Management

Today's international world of business is too complex and competitive for an authoritative approach to management. In order to succeed, companies need the support and expertise of its employees. Businesses are being redesigned to be flatter, so decisions are made by people close to the action. A more loosely created organizational structure can quickly adapt to changing business conditions and current projects. Overall, this belief in employee involvement is called participative management. It has been discussed and implemented for many years by scores of corporations, since empowered employees will feel better about their jobs and be more productive.

The foundation of participative management is recognized as early as the late 1920s with the work of Elton Mayo, whose basic thesis was that "our understanding of human problems of civilization should be at least equal to our understanding of its material problems." In the absence of such understanding, the whole industrial structure is liable to destruction or decay. He further argued that with the industrialization of society, no improvement had come in the social status of the worker. Once employees had had skilled jobs with necessary social functions, but now they were dispossessed of decisions over their work. As a result, their important functions passed to scientists and financiers.

At the Hawthorne Works of the Western Electric Company in Cicero, Illinois, Mayo conducted studies that concluded changes in output could be attributed to changes not only in work conditions but also personnel attitudes and social relations. He discovered that job satisfaction increased by employee participation in decisions rather than through short-term incentives.

Kurt Lewin's Frontiers in Group Dynamics in 1947 was another step in the participative management timeline. Lewin is universally recognized as the founder of modern social psychology. He pioneered the use of theory, using experimentation to test hypotheses, and placed significance on group dynamics and action research. He developed the Research Center on Group Dynamics, with six principles in mind:

(1) Group productivity: why was it that groups are so ineffective in getting things done? (2) Communication: how influence is spread throughout a group. (3) Social perception: how a person's group affected the way they perceived social events.

(4) Intergroup relations. (5) Group membership: how individuals adjust to these conditions. (6) Training leaders: improving the functioning of groups (T-groups).

Lewin's theories interconnected the individual, organization and environment, stressing that one could not be understood without referring to the other. His Action Research Model offered the first hands-on application of theory to organization change processes. Lewin "training group" or "T-group" involved assembling groups of about ten participants, who acquired a better understanding about group dynamics and processes by observing and discussing their own group behavior. The T-group idea, which resulted in a very productive means for both learning and behavioral change, developed into the National Training Laboratories (NTL). The NTL has since become a highly influential research and training organization. Further, the T-group concept has evolved in several directions including encounter groups and sensitivity training as well as many of today's team-building techniques.

In 1960, Massachusetts Institute of Technology professor Douglas McGregor, who was one of Lewin's associates, published The Human Side of Enterprise. Here he delineated a pair of conflicting theories of management based on human nature. "Theory X" believes that humans are biologically passive, self-centered and indolent and thus require active control and management to encourage productivity. Conversely, "Theory Y" believes that humans are inherently motivated to personally develop and do their best. They will show the most productivity in their behavior and actions if given the maximum amount of responsibility for their own work. McGregor recognized the reality of Theory X, but said that it is the result of over-controlling management rather than the proof of its necessity. He suggested changing the traditional Theory X-style of management practices to provide more individual responsibility. In short:

Theory X Managers assume the average worker is gullible and not very bright.

is indifferent to the organization's needs.

dislikes work.

is motivated only by financial incentives.

must be closely supervised.

Theory Y Managers assume the average worker:

feels work is natural.

can enjoy work.

is motivated by the desire to do a good job.

might do a better job if control is minimized.

has potential for development and advancement.

Recently, the increase in participative management signals a growing understanding among U.S. companies that a high productivity/high wage economy demands new relationships between labor and management. This relationship promotes a way to share gains and organize work that more completely develops and gains from the expertise and support of employees. The emphasis is on production-oriented or service-providing organizations where issues of worker motivation and satisfaction in addition to product and service quality and productivity are most vital to overall success.

The developing interest in participative management styles is due to a number of changing factors in the world at large. The first of these is the dramatic increase in competition. Starting in the 1980s and expanding over the next decades, it has become clearly recognized that better management practices -- consisting of superior quality organizational systems -- and better employee relations, integrated design and production teams, result in a competitive advantage (Lawler, 1996). Similarly, growing concerns about societal accountability will alter management direction (Collin, 1997).

At first, the United States followed the lead of other countries such as Japan with group-work, team-consciousness, quality circles and decision processes. Collaborative problem solving or team building groups were praised as positive approaches for enhancing communication and coordination within complex organizations so that production levels and quality could continually increase.

With experience, however, researchers began to recognize that participative management and employee involvement needed to be designed as a complete organizational model instead of in an imitative and piecemeal manner (Lawler, 2001). U.S. firms realized they had to completely support participatory work methodology to ever regain economic prominence in the global economy.

Along with the increased global competition has come a gradually changing philosophy of labor/management relationships. It is being recognized that employees have a right to play a major role in decision-making processes that impact their lives. It is necessary to persuade those who do not subscribe to the positive view of participatory democracy or to the benefits of direct participation in the workplace to change their views.

This philosophy goes hand-in-hand with the research that shows how individuals who participate in making their own decisions have a greater stake in carrying these out. In addition, Ackoff (1999) asserts that employees at all levels, but particularly those in the lower half of U.S. organizations, have become increasingly disturbed by the inconsistency of living in a society "dedicated to the pursuit of democracy but working in organizations that are as autocratic as fascist dictatorships." Companies have to be considered systems with all the complex, integrated factors such systems entail.

Ackoff compares the differences between traditional thinking and his systems approach, the same as that between analysis and synthesis. He asserts that analysis, or an explanation of how pieces of a system work, has long been the preeminent Western mode of thought. Synthesis is required to comprehend the "why" of a system and the interactions among the many parts as they work together. Recognizing the results of seeing the organization as a system leads to a belief that cooperation is more effective than internal competition in promoting a company's success by increased productivity.

Progressive companies are now understanding that communication is one of the most important aspects of participative management. Since 1991, I have been with Teachers Insurance and Annuity Association -- College Retirement Equity Funds in New York. Presently, my position is as xxx and my responsibilities include. During my years at Teachers Insurance, I have regularly seen the value of Team Building, or developing a team attitude by displaying a willingness to help other units, work overtime when needed and continually learn new tasks. Further, I have seen the positive impact that Communication has had on employee motivation and morale. I try my best to be a persuasive communicator with well-developed presentation skills. In addition, I do all that I can to have productive relationships with colleagues, customers and staff at all levels.

In The Communication Coach, business leaders provide examples of the various ways that organizations can improve two-way communication. Many of these communication recommendations I have either personally followed or have motivated me when followed by my own administrator. Time and time again, I have seen how important it is for individuals to be able to express themselves and be understood and accepted by others. As Tobe says (p.3), "When the capacity to use your creativity and imagination is harnessed and used to enhance your communication skills in business, you will find an amazing tool that can literally make you more money, change the way you manage your internal and external clients ... " One of the most important suggestions in Tobe's book is:

Be a skilled listener: Studies indicate that 70% of what individuals hear is misunderstood or misinterpreted. While…

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