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Toward a revival of principles of management.

Toward a Revival of the Principles of Management

During a recent television documentary touting the extraordinary success of Honda's automobile manufacturing plant in Marysville, Ohio, a Japaniese Honda executive said that, "When it comes to management, Americans do not practice what they preach."

Further comments by the Honda executive indicated that the United States has progressively dismantled and discarded the principles of management which Americans taught to the Japanese during the years of occupation following World War II. The Japanese, it seems, have spent the intervening years polishing and refining the principles. From the Honda executive's perspective, the Americans have lost their competitive advantage because they abandoned the principles they formerly taught. The Japanese, on the other hand, have gained the advantage because they have adhered to them.

The Honda executive's implication was that American management has no beacons to guide it in the practice of management--that the discipline of management in the United States has become a hodgepodge of disconnected and uncoordinated sets of generalized theory which have no meaningful structure in the sense of a unified set of principles. Consequently, American managers are chronic followers of "how-to" panaceas and "quick-fixc paradigms.

Incongruous as it may sound, the principles being referred to are Henri Fayol's principles of management (see sidebar). These principles, although expressed in other than axiomatic form, were extremely popular in the United States from the 1930s through the 1960s.

Even a cursory analsys of Japanese management shows just how precisely their practice and style are related to Fayol's classical principles. Indeed, evident in the prodigious literary output which marks the findings of those management researchers who compare Japanese and American management styles is the revelation that the Japanese are astute practitioners of Fayol's principles. The JIT (Just in Time) precepts of Japanese inventory management are monuments to the principle of order. The integration of human labor and robotics, the advanced approaches to assembly line balancing, and the quality and production control mechanisms that characterize Japanese manufacturing represent the epitome of the principle of division of work (or specialization).

The use of quality circles, disciplinary training, exercise sessions and other group interaction activities common to the Japanese management style conform remarkably to the conceptual intent of the principle of esprit de corps. The cross training, job transfer and lower level decision-making authority granted to employees at the operations level in Japanese manufacturing adhere unerringly to the principle of initiative. And the list goes on.

For the reader who might find it difficult to accept the fact that the principles of management have been purged from the mainstream of management taught here in the United States, it might be interesting to consider a recent poll taken by the author. Of 3,747 American managers and supervisors, representing companies which ranged from small business organizations to some of the largest Fortune 500 companies in America, less than four percent were able to name more than one principle. Less than two percent were able to explain the significance and meaning of a principle once it was identified.

Faring only slightly better than the managers and supervisors, were 872 MBA students who were also polled. Less than six percent of these students, many of whom possessed degrees from some of the most prestigious and best known univresities in the nation, were able to name more than one principle. Less than three percent were able to explain a principle once it was identified.

The foregoing findings are interesting when it is considered that practically every collegiate business program in the United States requires its students to take a course entitled, "Principles of Management." But even here, the principles are slighted. For example, a review of 122 recently published textbooks, designed to be used in "principles of management" courses, reveals that practically every text dismissed the principles of management as being inappropriate for modern day use. In those few texts where the principles were given more than a cursory listing, the explanations and definitions that accompanied them were frequently so generalized and distorted that they barely represented the essence which Fayol's principles attempted to convey.

The purging of Fayol's principles from the mainstream of management thought here in the United States is a rather peculiar phenomenon, especially when it is considered that the discipline of management grew and evolved from the precepts of the principles; that the functions of management were established by the principles (i.e., planning, organizing, staffing, directing and controlling); that the principles were the guiding beacons for the practice of management here in the United States for nearly four decades prior to the 1960s; and that during the reign of the principles, the United States initiated a productive output which led to a standard of living never before experienced by a society.

Why, then, did the principles of management lose favor here in the United States? A major part of the problem stems from the fact that the principles have never really been published in axiomatic form (see sidebar). In the fashion of his time, Fayol stated the principles in a generalized and somewhat stilted prose rather than in axiomatic form, and as a result, many American academicians and practitioners began to view the principles as mere expressions of Fayol's personal beliefs rather than expressions of fundamental truths.

The most serious problem relating to the fall of the principles, however, has to do with teh fact that the principles are not mutually exclusive, i.e., situational synergism cannot be obtained by the application of one principle to the total exclusion of the other principles. The lack of mutual exclusiveness has made the principles vulnerable to those who are ideologically opposed to their content or to those who have become disenchanted when the application of any one of the principles did not yield a desired result. In effect, the lack of mutual exclusiveness among the principles has made them vulnerable to divide-and-conquer tactics. By attacking them one by one, especially in the absence of axiomatic form, opponents have been able to cast aspersions on a number of the principles.

Within the context of historical significance, the principle of division of work appears to be the first principle to be victimized by divide-and-conquer tactics. This principle, renamed "efficiency" by misguided theorists, has been subjected to repeated assaults by academicians here in the United States. The assaults began in earnest in the 1940s and gained full steam in the 1960s. It was argued that specialization tests only the skin-surface abilities of employees, fosters blue-collar blues, retards employee development, threatens the psychological well-being of the worker and is an immoral inhibitor to the growth needs of the employee. The principle, it was further argued, fosters a man-machine model wherein employees are perceived and treated as extensions of the machine rather than the machine as the extension of man.

The next principle to come under attack was the principle of unity of command. Opponents of this principle argued that command should be based upon expertise rather than appointed hierarchic position. In specific terms, the argument involved the merits of functional authority versus the merits of line authority. The proponents of functional authority, including no less a theorist than Frederick W. Taylor, believed that expertise should prevail over appointed hierarchic position regardless of whether one employee might be subjected to the command of more than one authority at the same time. Thus, the accountant should exercise authority over those who use financial data but who have no expertise in financial control; the engineer should exercise authority over those who use engineering services but who have no expertise in engineering; etc. (Shades of matrix organizational structure!)

Following the assault upon the principle of unity of command was an attack upon the principle of span of control. Here, it was argued, there is no absolute equation, from the standpoint of validity and reliability that can specifically predict just how many employees one manager can effectively supervise. Neither is there an equation that can accurately define the number of hierarchic levels that ought to exist in the organization. Without such equations, it was concluded, the principle is of limited use.

The next assault was upon the principle of order. The opponents of this principle felt that the contingencies that arise in the workplace make it virtually impossible to develop standards that would optimize the coordination and arrangement of an organization's resources. In many instances, it was argued, the variables of the workplace may be so difficult and costly to measure, arrange and coordinate that the maximization of "order" would actually be counter-productive to the economic aims of the organization. Hence, it was concluded, this principle is also limited with respect to practical use and importance.

The attacks upon the foregoing principles, as well as others, were unintentionally reinforced by Herbert A. Simon's book, "Administrative Behavior." In his book, Simon argued that contingency situations arise in the organization that can result in incompatibility between the principles if the application of any one of them is treated as a mutually exclusive event. In essence, Simon argued that the application of any single principle demands consideration of its impact on the other principles if incompatibility is to be minimized, i.e., that the principles are not mutually exclusive. More specifically, he argued that the perceived advantage derived from the application of one principle can be negated or eliminated by disadvantages which arise when the rest of the principles influenced by such an application are ignored. By defining the principles as criteria for describing and diagnosing administrative situations, Simon put it this way: "A valid approach to the study of administration requires that all the relative diagnostic criteria be identified; that each administrative situation be analyzed in terms of the entire set of criteria; and that research be instituted to determine how weights can be assigned to the several criteria when they are mutually incompatible."

By his analysis, Simon did not intend that the principles be scrapped. To the contrary, hebfelt that their essence need only be augmented by optimal proportioning (or weighting) to attain a synergistic integration which would be useful in the construction of an administrative (or management) theory. Instead of accepting Simon's challenge for research in this area, many theorists preferred to interpret his analysis as a rejection of the principles. Joining the ranks of the opponents of the principles previously elaborated upon, these theorists began a full scale assault upon all the principles.

Slowly but inexorably, the tenets of needs theory, job enrichment and other motivational panaceas began to usurp the authority of the principles. By the late 1960s, a romanticized, ideological version of management had begun to emerge-employees ought not to be disciplined, they should be counseled; equality is more important than equity; the rights of the organization are less important than the rights of the individual or the rights of special interest groups; rewards on the basis of seniority are just as important as those based on merit; satisficing is a more practical goal than optimization; order is not as important as flexibility; matrix organizational structure ought to be revived (it doesn't matter that such structures have been marked by failure for over half a century); structured standards and incentives are restrictive and demeaning to employees; and on and on with one usurpation of the principles following another until finally they were replaced by precepts that were almost opposite the original precepts of the principles.

The unfortunate consequence of the divide-and-conquer tactics employed to discredit Fayol's principles is that the baby was thrown out with the bath water. While it is true that any one of the principles can be applied disproportionately, this does not mean that the principle itself is invalid. Specialization, for example, is a part of the natural order. A world without specialization would be a backwards world indeed, e.g., no doctors, no lawyers, no professors, no quarterbacks, no compensation specialists, no draftsmen, no managers, etc. (Even ants are specialized with respect to function.) The truth of the matter is that there are natural limits to the amounts of knowledge, information, and skills that one human being can assimilate and apply constructively in his or her lifetime. It is inevitable that a person will differentiate and concentrate upon the personal strengths and abilities that will provide the greatest survival value within the constraints imposed by these natural limits. In this sense, all human beings specialize in one way or another. Likewise for organizations.

To cast away or reject a principle of truth because of some romanticized ideological tenet or because mutual exclusiveness does not exist among a complex set of interactive agents, is not only illogical but is a threat to the foundations upon which the discipline of management is based. Indeed, even though the principles may not be mutually exclusive, anyone who has ever tested the principle of division of work in a controlled research environment, wherein the elements of the other principles are held constant, knows full well that the principle holds true. Likewise for the other principles--especially when tested within the context of their axiomatic form. The problem, then, is not in the principles themselves. It lies, as Simon argued, in the proportion to which one principle is applied in accordance with the proportion to which each of the other principles is applied, given a particular situation.

The question of optimal proportion and synergistic integration is a serious one. So serious, as a matter of fact, that Henri Fayol, even before Simon pointed out the problem, repeatedly cautioned managers to be aware of proportion in the application of the principles. It is toward the resolution of the problem of proportion and integration in the application of the principles that the Japanese have excelled. Whether by intuition or objective analysis, they have done with the principles what we in the United States have failed to do. The results of the Japanese application, of course, have been incredible when viewed within the context of the economic impact that this small island nation has had on the rest of the world.

Every discipline, if it is to qualify as a discipline, must possess a body of knowledge that is undergirded by a network of supporting principles, axioms, or laws. It is unfortunate that the undergirding provided by the principles of management has been ignored or de-emphasied here in the United States--not because of the invalidity of the principles but because it was apparently more convenient to circumvent the problem of proportion and integration by accepting tenets of speculative value rather than to accept the challenge and the research necessary to resolve the problem.

In view of the continuing quality and productivity problems of U.S. business-esbusiness; the large number of business failures each year; the poor financial condition of many of our major corporations; the decline of major industries; the continuous problem in people management; etc., perhaps it is time for management to truly emulate the Japanese by reconsidering the principles of management and to reassess the problem of proportion and integration in their application. By solving the problem, management might get off its current kick of managing primarily for human relations effectiveness and return again to managing for business effectiveness, or, as Peter Drucker put it, "to strive for the best possible economic results from the resources currently employed or available."

A return to the principles will not detract from the strong inclination toward improving the quality of work life for American workers. To the contrary, such direction is practically dictated when the principles are applied in synergistic proportion. The question of business effectiveness is not one of de-emphasizing the importance of the human element in the work environment but rather it is in the emphasis on what is ultimately best for both the organization and the people who comprise it. To this end, the principles emphasize proaction rather than reaction; optimization rather than satisficing; objectives rather than estimations; incentives rather than cost of living doles; opportunities rather than guarantees; tenure rather than socializing; consensus rather than rule; merit rather than seniority; responsibility rather than accountability; decisiveness rather then hedging; contribution rather than interaction; information generation rather than data manipulation, etc.

Certainly a return to the principles of management will not provide a panacea for all the problems of American management. Nonetheless, the success of the Japanese in their synergistic application of the principles indicates that it might be a significant step in the right direction.

Earnest R. Archer, Ph.D., P.E. is a professor of Management in the school of Business Administration at Winthrop College.
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Author:Archer, Earnest R.
Publication:Industrial Management
Date:Jan 1, 1990
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