Wp2001-Human in Organizations.Pdf

The Human in Organizations There’s no Business Like Shoyu Business How many companies can you think of that have been in continuous operation since 1630? How about companies with manufacturing plants in both urban Tokyo and rural Wisconsin? Not getting any easier? Here’s a hint: it manufactures the world’s oldest condiment from fermented soy beans and wheat. Give up? It’s Kikkoman-one of Japan’s oldest and largest companies and known worldwide for its soy sauce (called shoyu in Japanese). Kikkoman soy sauce holds a commanding 50 percent share of the market for oriental bottle sauces in North America and 30 percent share in Japan. To meet worldwide demand (soy sauce is sold in 100 countries around the world), production at Kikkoman has increased tenfold during the past 20 years. In 1997 alone, Kikkoman produced and sold some 116 million gallons of the ebony- colored- liquid-an enormous quantity considering that soy sauce is sprinkled sparingly onto foods to help bring out their natural flavors, not gulped like a soft drink. Another reason this statistic is so impressive is that Kikkoman makes its soy sauce using a method that dates back to the seventeenth century and requires several months of brewing time. Although it relies on traditional, natural ingredients (including a proprietary microorganism to create a culture called Koji) instead of the chemical substitutes used by competitors, Kikkoman is far from ancient in its manufacturing process. Its state-of-the-art manufacturing plants in Walworth, Wisconsin, and the Netherlands use the most modern technology available. In fact, outside of the soy sauce business, Kikkoman is regarded as a world leader in genetic engineering, biotechnology, and biochemistry. Using cell-fusion technology, Kikkoman has even developed an entirely new species of citrus fruit-hardly what you might expect from a company pushing 400 years old. Actually, Kikkoman is unusual in several ways. First, its founder was a woman-incredibly rare for 1600s. Also, unlike most Japanese companies, which produce goods that originated in the United States (e.g. cars and electronic goods), Kikkoman has turned its uniquely Japanese product into a staple found in kitchens around the world. Still, the company adheres to the strongly held Japanese tradition of being loyal to its employees. In fact, Kikkoman’s commitment to treating individual workers like family permeates all aspects of the company’s operations. Interestingly, it was Kikkoman’s adherence to the honored Asian traditions of harmony and loyalty that made it an attractive partner for U.S based companies (e.g. Xerox) expanding into the Japanese and Chinese markets. Today, in large part because of such partnerships, Kikkoman is considered a key player in the world of international business. Despite its long, international reach, Kikkoman is faithful to the countries in which it does business. In the Walworth, Wisconsin, plant, for example, the only items-including both ingredients (mostly soy, wheat, salt, and water) and equipment-that are not procured locally are the specialized items needed to make soy sauce. In addition, Kikkoman has been a generous contributor to the local community, not only in terms of expanding its tax base but also in making contributions to everything from 4-H projects to college scholarships for high-school students. It is obvious that Kikkoman, with roots going back to feudal Japan but also poised on the cutting edge of biotechnology, has taken more than its share of risks over the years. As the ancient Japanese saying goes, “A frog in the well does not know the ocean.” Clearly Kikkoman left the well long ago to explore many different oceans. The more closely you examine the previous case, the clearer it becomes that success involves several factors. At the root of the company’s success is an excellent product, but this is only the beginning. The road to failure is littered with many good products made by poorly managed companies that, as a result, are no longer with us. Kikkoman, however, has been around for such a long time and has had such a great financial success because its commitment to people-its employees, it’s suppliers and its neighbors in the community. In addition, the company has been actively involved in new ventures, pushing the edge of technology and its own influence to the farthest reaches of the globe. This blend of old and new makes Kikkoman a unique and interesting organization in the history of business. Yet, in many ways, at the base of this company’s success lies a key ingredient (not soy!) that is responsible for success in all organizations-people. No matter how good a company’s product or service may be, no matter how far a company’s equipment pushes the cutting edge of technology, there can be no company without people. From the founder to the loyal employees, it’s all about people. In fact, if you’ve ever managed a business, you know that “people problems” can bring down an organization very rapidly. Hence, it makes sense to realize that “the human side of work” is a critical element in the effective functioning – and even basic existence – of organizations. This people-centered orientation forms the basis of the field of organizational behavior, which specializes in the study of human behavior in organizations. 1 1 Jerald Greenberg-Robert A.Baron. 2000. Behavior in Organizations. New jersey. Prentice-Hall, Inc. The Human Relations Movement The human relations movement was a natural response to some of the issues related to scientific management and the under-socialized view of the worker that ignored social aspects of work. The key uniting characteristics of the scientific management theory researchers: Taylor, Weber, and Fayol were the ideas of efficiency produced through either operational, legal, or administrative improvements. One of the principal assumptions was an emphasis on rationality.2 According to scientific management, there was a logic to actions, and formal and knowledge authority were the principal catalysts of workplace motivation. Scientific management tended to downplay the effects of social pressures on human interactions.3 The human relations movement enhanced scientific management because it acknowledged that peoples’ attitudes, perceptions, and desires play a role in their workplace performance. The human relations movement was founded by sociologist George Elton Mayo in the 1930s following a series of experiments known as the Hawthorne studies, which focused on exploring the link between employee satisfaction/wellbeing and workplace productivity. Essentially the Hawthorne studies concluded that when employers take an interest in workers and make decisions based on their natural needs and psychological makeup, productivity increases. They also found that people work best when organized into groups, when they can have effective two-way communication with their leaders, and when leaders communicate and share information freely as part of an overall cohesive decision-making process. 4 The human relations movement is seen as the precursor of the modern human resources function. Before the human relations movement, workers were typically seen as replaceable cogs in organizational systems that put the ultimate value on higher output. 2 Jeffrey A. Sonnenfeld, “Shedding Light on the Hawthorne Studies.” Journalof Occupational Behavior, 1985, 6, 111- 130. 3 Wren, D. A., & Bedeian, A. G. 2009. The evolution of management thought. (6th ed.), New York: Wiley. 4 Roethlisberger, F.J., & Dickson, W.J.(1939). Management and the worker/ Cambridge, MA: Harvard University Press In other words, relationships between workers and management affect employee efficiency. If workers are being analyzed by their boss, they will be more motivated to do well – a phenomenon known as the Hawthorne effect.5 Being part of a group and having a specific responsibility in that group also increased employees' motivation. Workers want to feel that their personal goals align with their team's overall goals and that their work is valuable. Theory X and Theory Y Management professor Douglas McGregor later created Theory X and Theory Y, two opposing perceptions of employee motivation. Here are the basics of the two theories, according to McGregor's 1960 book The Human Side of Enterprise: Theory X: Negative outlook on workers 1. Management is responsible for organizing company components in the interest of economic ends. 2. Managers should direct workers' efforts, motivate them, control their actions and modify their behavior to suit organizational needs. 3. Managers must persuade, reward, punish and control workers to stop passiveness and resistance. Theory Y: Positive outlook on workers 1. Management is responsible for organizing company components in the interest of economic ends. 2. Passiveness or resistance to organizational needs to develop with experience in organizations. 3. Motivation, potential for development, capacity for assuming responsibility and readiness to direct behavior toward organizational goals are naturally instilled in people. 5 Roethlisberger, F.J., & Dickson, W.J.(1939). Management and the worker/ Cambridge, MA: Harvard University Press 4. Above all, management should focus on creating a system where workers can achieve their own goals in line with company objectives. Theory Y shared similarities with the human relations movement, noting that workers can be trusted and are naturally motivated and efficient. However, American psychologist Abraham Maslow had developed a theory of hierarchical needs, which McGregor referred to in his book, to indicate employee incentives to perform well. From lowest to highest in the hierarchy, those are physiological needs, safety needs, social needs, ego needs and self-fulfillment needs. The two theories were important additions to management studies, and the human relations movement progressed by aligning individual needs with organizational needs. What were the results of the human relations movement? The human relations movement was a crucial event in management history and a major contribution to today's style of leading.

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