The administrative principles as an approach to management was very powerful and gave organisations fundamental new skills for establishment high productivity and effective treatment of employees (Samson & Daft, 2005). This essay will discuss some theories from contributors to this approach included Henri Fayol, Mary Parker Follett and Chester I. Barnard. It will also examine how they are applied in a New Zealand organisation which is called Fisher & Paykel.
Firstly, this essay will show two of Fayol’s 14 general principles which are ‘scalar chain of authority’ and ‘initiative’, and how the organisation has utilised this concept.Secondly, Follett’s enactive approach will be examined. Lastly, this essay will take a closer look at how ‘zone of indifference’ and ‘acceptance theory of authority’ (both are Barnard’s theory) applied in Fisher & Paykel. Looking in detail at the applications of these three contributors’ theories, this essay will suggest that administrative management has contributed the most to contemporary organisational practice.
As one of New Zealand’s largest organisations, Fisher & Paykel is a successful and innovative manufacturer of household appliances, that has grown significantly since its humble beginnings in 1934 (Hansen & Hunter, 2005).Overall, this essay will discuss how administrative management is applied in Fisher & Pakel, and why it has been believed in contributed the most to contemporary organisational practice. The roots of modern-day organizations can be traced back at least 2000 years to models of Chinese military hierarchy. However, one of the first people to capture on paper the processes and practices of organisations was Henri Fayol (1841–1925), a mining engineer and manager by profession (Middleton, 2002).Fayol defined the nature and working patterns of the twentieth-century organization in his book, General and Industrial Management, published in 1916. In it, he laid down what he called 14 principles of management.
Fayol’s concept of a Scalar chain is in essence an established hierarchical structure incorporating all employees of an organisation (Samson & Daft, 2005). This principle is extremely relevant to Fisher and Paykel who have unmistakably established a Scalar chain of authority.The 2008 Organisational chart for Fisher and Paykel (Finance) includes every employee and each employee only has one boss. This relationship runs throughout Fisher and Paykel Finance from the workers in the call centre to the Managing Director Alastair Macfarlane (F&P Finance org chart, 2007).
Henri Fayol based his administrative principles largely on past experiences (Samson & Daft, 2005). He saw the need to allow workers and managers the freedom to think for themselves and to show initiative, within the constraints of discipline (Knights & Willmott, 2007; Miner, 1995).Hansen and Hunter (2005) describe a situation back in the 1950’s where Fisher & Paykel realised the potential of allowing initiative to grow. For the first time, in 1950, Fisher & Paykel decided to employ their own talented local engineers. Although this may have seemed to be a risk initially, within a short period of time, these engineers had designed their very own product as well as upgrading the existing conveyor belts to maximise efficiency.
This simple example illustrates that allowing workers the freedom to express their inner ability and think creatively can lead to great success.Therefore, ‘scalar chain of authority’ and ‘intiative’ are applied in Fisher & Paykel and they are great contributions made by Henri Foyal to the organisational practice. Mary Parker Follett (1868-1933), a relatively unknown pioneer of management, had some extraordinary insights into the idea that managerial action is central to the whole process of managing organizations (Rodrigo, 2004). The idea is centred upon the notion that action implies ‘enaction’.
In other words, when we do something we immediately create something else and that something else inevitably affects what we do next.Formulated in a different way, Follett’s view of cognition is that people receive stimuli as a result of their own activity. “Our heritage dates to the 1930s with the manufacture of designs made under licence. The pioneering spirit established by the founders encouraged a culture that challenged conventional appliance design and production systems.
By making appliances under licence we determined that we were only destined to make a more expensive version of others’ products. We couldn’t generate economies of scale so we had to find other ways of creating a point of difference in our markets (About Us. 2006)”. Such a view, expressed back in the 1920s, is identical to that expressed much more recently by authors in the field of the cognitive sciences (Varela et al. , 1991) and in the organization sciences (von Krogh and Roos, 1995).
Weick (1995) claims that Follett was the first author to study and apply an ‘enactive’ approach to cognition in organizations: The activity of the individual is only in a certain sense caused by the stimulus of the situation because that activity is itself helping to produce the situation, which causes the activity of the individual.In other words, behaviour is a relating not of ‘subject’ and ‘object’ but of two activities. In talking of the behaviour process we have to give up the expression ‘act on’ (subject acts on object, object acts on subject); in that process the central fact is the meeting and interpenetrating of activities. Hence, Follett was a great contributor who made valuable contributions to contemporary organisational practice. Chester I.
Barnard (1886-1961) discussed his theories on management in his book, The Functions of the Executive.One of his best known contribution is ‘zone of indifference’. He (1938) stated that if all the orders for actions reasonably practicable be arranged in the order of their acceptability to the person affected, it may be conceived that there are a number which are clearly unacceptable, that is, which certainly will not be obeyed; there is another group somewhat more or less on the neutral line, that is, either barely acceptable or barely unacceptable; and a third group unquestionably acceptable. This last group lies within the zone of indifference.The person affected will accept orders lying within this zone and is relatively indifferent as to what the order is so far as the question of authority is concerned. Such an order lies within the range that in a general way was anticipated at time of undertaking the connection with the organization.
“Being a leader sometimes means having to make the hard decisions - and what a hard call John Bongard had to make in April when he told his employees that 1000 of them were going to lose their jobs”, John Bongard (2008) who is the managing director from Fisher & Paykel Appliances said.Another significant contribution was the acceptance theory of authority, which states that people have free will and can choose whether to follow management orders (Samson & Daft, 2005). The acceptance theory depends on four conditions: firstly, employees must understand what the manager wants them to do; secondly, employees must be able to comply with the directive; thirdly, employees must think that the directive is in keeping with organizational objectives. lastly, employees must think the directive is not contrary to their personal goals.Under Bongard’s leadership, the whiteware maker has posted record profits as it expanded to markets beyond Australasia.
The tough times are unlikely to go away anytime soon - if at all - but in making that hard call in April, Bongard might have helped ensure Fisher & Paykel remains an iconic New Zealand company for at least a few more generations(Brian Fallow, 2008). In conclusion, this essay has considerd to some theories of three contributors who are Henri Foyal, Mary Parker Follett and Chester I.Barnard in administrative principles approach. Examining in particular , the ‘scalar chain fo authority’, ‘initiative’, ‘enactive approach’, ‘zone of indifference’ and ‘acceptance theory of authority’, evidence presented here demonstrates that four out of five of them are being applied in Fisher & Paykel. Interestingly, this essay illustrates that not all of their theories always work. However, it has enough evidence to show that “administrative principles approach is just as relevant now as they were a century ago.Overall, I can conclude that administrative management has significantly contributed the most to contemporary organisational practice; in paticular, as discovered by this investigation,
