Twopotential buyers have approached Forsyth Travel about acquiring the company.
The first company; Kaye’s Travel uses a very scientific approach to theirmanagement style, in which they focus on efficiency and profitability. On theother hand, the second company; Sunsoft, manages their company using a morehuman relations approach which is a more relaxed approach to the management ofthe company’s employees. This essay is going to discuss and analyse whichcompany should acquire Forsyth Travel under the optimum management style thatwould benefit them the most. Scientific management is a strict style ofmanagement in which employees are trained to undergo tasks in an extremelyspecific manner to gain the optimum level of efficiency and therefore optimumlevel of profitability. The human relations management style is essentially theopposite of scientific management, even though it’s goal is to achieve highefficiency, employees work as a team to complete tasks and they can engage indecision 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 oneemployee excluding themselves (Julia and Tim). Forsyth Travel, if they chooseto be acquired by one of the two companies, should chose Sunsoft because oftheir human relations management style.Scientificmanagement is a strict management style used by companies that focuses onoptimising efficiency and profitability by training employees to conduct tasksin a way that allows the task to be completed at the maximum level ofefficiency. The main person to come up with the theory of scientific managementwas F.W. Taylor (1856-1915) in 1911, he is also known as the ‘father ofscientific management’ (Phillips, S.
2015, P.45). Taylor came up with thetheory of scientific management when he conducted several time and motionstudies/experiments in which he realised there is only ‘one best way’ tocomplete certain tasks in which the absolute maximum level of efficiency isreached.
The ‘one best way’ to complete certain tasks is one of the main rulesof scientific management. In F.W.
Taylor’s book The Principles of ScientificManagement he states, “The principal object of management should be to securemaximum 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 highamounts of dividends paid to the company as well as creating a sustainablestate of high productivity for the company that will make the increased dividendslast long term. Maximum prosperity for the employee includes the worker doingtheir job at the highest level of efficiency that suits their abilities inorder for them to gain the highest wages possible. F.W.
Taylors principles ledto a new system in which workers are paid for their output instead of theirtime, this system is famously known as the ‘piece-rate system’. The ‘piece-ratesystem’ played a large part in the early development of scientific managementas it created motivation/incentives for workers to achieve their maximum workoutput which benefits them as they gain higher wages, and this also benefitsthe employer as they gain higher output levels which will lead to higherprofits for the company. To achieve these higher outputs and productivitylevels each worker will be allocated a specific job that best suits thatindividuals skills and abilitiesOnthe 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 onthe human relations theory of management during the time he was conductingexperiments researching further into the theory of scientific management. Theseexperiments are famously known as the Hawthorne experiments (Phillips, S. 2015,P.
53-55). There were four main phases to the Hawthorne experiments, theillumination experiments, the relay assembly test room, the interviewingprogramme and the bank writing observation room. The illumination experimentsaimed to discover whether the intensity of lighting in the work place affectedworkers productivity levels, the results of this test concluded that there wasno apparent relationship between production and level of lighting however inthe control group where the lighting remained unchanged, productivityincreased.
This lead to more experiments focused on factors of workerproductivity. The second phase of the Hawthorne experiment was the relayassembly test rooms, in which it was discovered that workers gained higherproductivity levels due to the increased amount of attention given to them bytheir managers. During the interviewing programme approximately 20,000interviews were conducted into further research the impact that worksupervision had on levels of production. The final phase of the Hawthorneexperiment was the bank writing observation room, which was fourteen men in abank writing room, in which it was observed that natural leaders formed, andsub-groups were also formed, however, the group decided on a lower level ofoutput because pressures on individual workers were so high. This final phaseshowed researchers that output/production levels to be optimised it isimportant for employees to have a strong and respectful relationship with theirsuperiors/managers, as the attention increases production levels (Phillips, S.
2015, P.53-55). TheoryX and Y is a theory created by Douglas McGregor in the 1960’s that assumes twodifferent types of workers in the perspective of the manager of a company. Thetwo types of workers are categorised under the two theory’s X and Y. Theory Xassumes that employees dislike work, have low ambitions and avoidresponsibility therefore managers tend to reward employees because of goodperformance and they tend to discipline workers with poor performance levels. Workersthat shows traits of theory X are managed scientifically as the piece-ratesystem used in scientific management works on theory X workers because they arepaid regarding their output levels (performance levels) therefore if they underperformthey will not receive their maximum wages possible (McGregor, D, 1960). TheoryY 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 owninitiative and when they are allowed more responsibility and better workrelationships with their superiors. Workers that show traits of theory Y aremanaged using a human relations approach because it allows them to have moreresponsibilities within their jobs. In relations to Forsyth Travel and the twocompanies that are interested in acquiring the business, Kaye’s Travel willassume that the employees of Forsyth Travel will have the traits associatedwith theory X and Sunsoft will assume they have traits associated with theory Y. IfForsyth Travel are acquired by Kaye’s Travel, the benefits would be that themanagers will have more control over the employees which therefore means theywill have good control over production, however in Forsyth Travel’s case thisisn’t as relevant because they offer a service, not a product that needsphysically producing. Scientific management is more beneficial for companiesthat produce products as the management style allows employees to controlproduction well using the piece-rate system mentioned earlier in this essay. Alarge benefit of them being acquired by Kaye’s Travel is that decision makingwill be very fast due to management making all the major decisions which willsave time for the company. Another benefit is that under the management ofKaye’s Travel Forsyth Travel will have maximum utilisation of resources whichin theory will lead to optimal output possible. There are also severaldisadvantages 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 companythey founded.
Another disadvantage is that this style of management may causehigh stress levels for the Forsyth Travel employees due to the piece-ratesystem in which employees are punished for low productivity levels. The highstress may cause the Forsyth Travel employees to regret choosing Kaye’s Travelor in extreme cases may even cause employees to resign because they do not likethe new management styles. Scientific management also can cause employees tobecome de-motivated due to the strict rules that only monitors theirperformance, this can also cause employees to feel alienated and unworthy asthey do not have strong relationships with their superiors (Wisestep, 2018).If Forsyth Travel are acquired by Sunsoft, there willbe many benefits for them that will come from Sunsoft’s human relationsmanagement style.
For example, the management style creates a strong ‘teamspirit’ within a company due to employees having strong, friendly relationshipswith their superiors/managers. This effect creates motivation for employees becausethey feel like they are very wanted and respected by their managers, unlikescientific management, in which people feel the opposite ways e.g. unwanted andunworthy (Bradley, J, 2018). One of the largest problems with the humanrelations management approach is the unpredictability of workplace and employeebehavior (Quizlet, 2017). The unpredictability can make it extremely hard for companiesto predict productivity and output levels because there isn’t a specific way tocomplete every task like there is under a scientific style of management,therefore it is hard for companies to gain very accurate predictions.
Humanrelations management style will be much more effective and beneficial toForsyth Travel because of the industry they are in. Forsyth Travel are in the holiday/travelindustry therefore they don’t physically create a product, as they offer aservice; an apartment complex in Norway available for tourists to rent out fora certain time period. This means that Kaye’s Travel will not be very effectivefor this industry as they use a scientific management style.
Sunsoft will be abetter company to acquire Forsyth Travel because the human relations managementapproach will allow the current Forsyth Travel employees to still engage indecision making for the company that they founded and it will also allow themto be involved with the new managers that acquired them, however if they areacquired by Kaye’s Travel under a scientific management style then will losecontrol of the business they founded, which is something that Julia and Timwould probably dislike. In this paragraph, real life examples of bothmanagement styles will be analysed. An example of scientificmanagement being used by a large company is Amazon, Inc, (AMZN). They usescientific management within their UK and US warehouses. The BBC panoramadocumentary; Amazon: The Truth Behind the Click (2013), follows a new employeeat Amazons delivery warehouse in Swansea.
It shows how strict the managementrules are for warehouse employees, for example, employees are only allowedthree strikes before being fired from their jobs, they will receive strikes bybeing late or missing a shift. Amazon employees also must meet specific targetswithin a certain time limit. This method causes high levels of stress on theiremployees 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 hasrevealed that scientific management can ‘yield high short-term gains’ howeversustainable gains are ‘founded on managers who exemplify integrity, inspirationand kindness’ (W.F. Baker, 2015), these traits have been utilized in the humanrelations management style. An example of human relations management being usedby a large company is Cadbury (CBY), who are known for making their employeesinterests a main priority in their company. Cadbury believes that the maincomponent of success for their them is the ‘commitment and performances’ oftheir employees and they acknowledge that their employees are very ‘important’for achieving their goals (UK Essays, 2015).
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