The Woodbury Car Company has recently completed its 100 years of success. The case takes into consideration the efforts of restructuring made by the company at three time periods.
1915
At the beginning of its operations, the company was a new entrant into the business world with Ford Motors by Henry Ford as its direct competitor. Due to the inexperience, the business was structured in a way where the power was centralized and organizations were viewed as machines. The “machine metaphor” described the actual structure of the organization (Mondy, Noe & Gowan, 2005). This metaphor is based on the fact that a consistent performance is expected, while the management feeds the instructions. Each part, which includes the employees, management, and other resources must act according to their prescribed functions producing the expected results. The success of Woodbury was based on this metaphor where the whole organization worked together as a machine. The control of the company was with the top management, which dictated the requirements of the tasks and activities to be done to the lower management who were responsible to pass on the direction to the line managers. Employees were directly supervised by the line managers and had to report each and every task and problem to them. In case of emergency or an issue, the line managers had to report to their seniors who would contact the top management (Thompson, 1917). No change could be conducted or any decision made by the line managers or the employees themselves. The motivational factor for employees was the monetary reward. No flexibility in working hours as the employees were supposed to provide the expected output at any cost. The employees were perceived as machine parts that work in complete collaboration to produce the desired results for the organization. The company successfully executed the management theory by Henry Fayol which includes: planning, organizing, commanding, coordinating and controlling (Robbins & Judge, 2007). The management theory stated that it is the management’s duty to plan for each and every process, organize the resources to collaborate together and command the activity directly. Further, the management must make sure that the subordinates collaborate together by keeping them in control. The employees perceived the upper management as working in a bureaucratic manner. As the control rested with authority in the company, the employees had to pass through the hierarchy to communicate. The ‘theory of bureaucracy’ as given by Max Weber defined the relation between the upper management and employees in Woodbury (Mondy, Noe & Gowan, 2005). The power structure by Fayol was fully exercised in the company with central power with the upper management that was dictated from top to bottom in a hierarchical manner given by Weber. This strict exercise of authority was the key to survival in the new industry.
1965
After the passage of five decades, the company has faced enough troughs and crests building its name in the industry. Being a direct competitor of Ford Motors ever since its inception, the company has treated the employees as a resource that required to be exploited to full potential. But the time changed and hence, the need to evaluate the workplace arose. The company was lacking in one aspect: treating the employees as machine parts led to complete negation of employees as humans. Hence, the upper management decided to restructure the organization according to the study conducted by Elton Mayo and Roethlisberger known as the Hawthorne study; it emphasized the socio-psychological aspects of human behavior that ought to be taken into consideration by the employers. Workers were no longer motivated by monetary rewards; they required attention and recognition for their work from their managers and fancied group involvement. This same phenomenon had been stated in the Maslow’s hierarchy of needs which stated that every individual has certain needs and when one need is fulfilled then the person is motivated to achieve the next need. So, when the physiological needs (including money, food and shelter) have been fulfilled, they look forward to safety needs, then social needs which can only be fulfilled by working in groups and interacting with other employees. Next comes the self-esteem needs which is what the employees look forward to. They wanted to get involved and be recognized as an asset to company. Hence, the new workplace setting changed where communication was from bottom to top i.e. the employees suggested and passed on information to the management about what was actually taking place and required to be changed (Thompson, 1917). The management involved subordinates and non-monetary rewards were given. Taylor’s theory of scientific management was used in the company where employees were encouraged to replace the traditional methods with efficient methods that could save time and resources. The workers were specifically trained and their capabilities were matched to the job and the managers supervised the employees’ work while giving them responsibility. Earlier, the employees were treated according to McGregor’s Theory X which believed that employees need to be controlled, instructed, supervised and only money could motivate them (Robbins & Judge, 2007). But now, Theory Y represented the behavior of management towards employees. The power vested with the management, but some power was delegated to the employees to decide on-spot issues and they were considered to be humans who could take responsibility and are creative when they are given control.
After the completion of a 100 successful years in business, the management has realized that further restructuring is required. The organizations are no more viewed as machines, rather, they are like actual living organisms that are affected by the environment, and have a living system which starts from birth to growth, reaches maturity and then die if further research is not executed. Only the fittest tends to survive and for this purpose, adaptation and evolution is a must during the life cycle of the organization. Woodbury has reached its stage of maturity where it grabs the major share of the market and hence, from this point forward, it must strive to make sure that rather than declining, it has to maintain this stage. Our employees are our asset and the most significant factor which defines the competitive edge over the rivalry. The communication and structure is based on the principles of Social Network Analysis as social relations are given more significance. The power has been completely delegated to those who are directly related to the work and they are held accountable. Cross-communication is encouraged and the human resource department work to manage the human-related issues in the organization (Mondy, Noe & Gowan, 2005). The employees are encouraged to attend the quarterly board meetings and their involvement in decision making is a must because they provide the most accurate information regarding the needs and demands of the company business. All the components of the business work together to make the system work with complete freedom to socially interact. The employees are provided the opportunity to build, and develop.
References
Mondy, R., Noe, R., & Gowan, M. (2005). Human resource management. Upper Saddle River, N.J.: Pearson Prentice Hall.
Robbins, S., & Judge, T. (2007). Organizational behavior. Upper Saddle River, N.J.: Pearson/Prentice Hall.
Thompson, C. (1917). The theory and practice of scientific management. Boston: Houghton Mifflin.
