Introduction
The paper is intended to develop a report about different management styles in the context of industrial or employment relations to compare it with the sophisticated paternalist/ HRM (Human Resource Management) approach. The management styles in employment relations may be different from how it is taken or considered. The preferences and choices of the organization directly impact on its strategies to develop a relationship with its employees (Miller, 1987).
The preferences are usually aligned with the dominants of the organization that is directly involved in decision making process of the organization. These preferences of the dominants directly result in the adoption of one of the approaches include unitary and pluralist. The unitary approach means the organization stresses on the integrated and harmonized system, where all employees are considered as a single team sharing common goals. However, the pluralist approach leads the organization to recognized employees in different groups, and teams and the conflict may exist between the employees and employers. In line with this employment relation discussion, the paper is going to analyze and assess different management styles towards employment relation to comparing them with HRM approach. The paper will also identify the limits and potentials of each management style and employee relation approach to employees and employers.
Managerial Styles Towards Industrial Relations
The unitary and pluralist are the broader employee relation approaches as they can further be classified into different management styles in employee relations. Pluralist does not only mean the conflicts, but it can also stress upon the collaboration and teamwork between the interest group. Same as a pluralist, Unitary can also have different meanings such as sharing common agenda between employees and employer is not necessary. Many studies have argued that the external factors impact on the policies and strategies for employee relations, however, on the same side; the internal factors are also possessed the greater importance. These internal factors can include the size of the organization, type of ownership, locations, culture and structure of organization, etc (Gennard & Judge, 2005).
Two dimensions of management style have widely been identified and discussed in clarifying the meaning of different management styles in employee relation. These two dimensions include Individualism and Collectivism. Individualism is the dimension of management styles in which the policies for personnel are mainly focused on the individual workers’ rights, abilities, and capabilities. On the other hand, the collectivism is the dimension in the policies of management directly focuses towards encouraging the employees to provide their collective engagement in the decision making of the management (Gennard & Judge, 2005).
The organization can experience both dimensions at the same time. Management style is a choice of the dominants that is directly linked to the policy of the business. Purcell and Sisson (1983) have identified five management styles to classify Unitary and pluralist. These five styles of management include Authoritarian, Paternalists, Consultative, Constitutional, and Opportunists.
Sophisticated Paternalistic vs. Authoritarian Style of Human Resource Management
Sophisticated paternalistic style, as the name implies, refers to a leader’s approach to his subordinates that is similar to the approach that a father adopts towards treating his offspring (Shong, 2008; Gupta, 2007). Before conducting a critical comparison between both the styles under discussion in this section, it is important to develop the basic understanding of the authoritarian approach to human resource management.
The leader acting in authoritarian leadership style controls all the matters relating to his organization. He has the sole authority to finalize all the decisions and manage all the business process at his discretion. No one else is delegated to take actions or decision without taking him into confidence. In other words, all the affairs need to be reported to him (Dessler, 2005). Human resource management at The New York Times (newspaper) and The Helmsley Hotel Chain and the leadership style of Steve Jobs are some of the most evident examples of this management approach that assert total command and control over their employees and dictate their actions (Bright Hub, 2016).
Both the underlying styles of HRM have certain characteristics common to them such as command, control, authority, and decision making power. However, due to over-emphasis on command and control, autocratic management styles neglects the importance of collaboration that is essentially required in the modern scenario of business due to modern organization’s being mostly based on team-based structure. It also overlooks ‘care’ that is a special attribute of paternalistic approach due to the philosophy of ‘paternal care’ associated with that. Hence, paternalistic style of Human Resource Management is more in consonance with contemporary ideas of ethical leadership pioneered by Freeman (ref. “Freeman’s Stakeholder Theory”) who regards employees as one of the most important stakeholders. So they deserve care on the part of management; and Leadership at Walmart is a living example of treating employees with a high degree of care (Lee, 2001). Therefore, despite some similarities, sophisticated paternalistic HRM is at divergence from the authoritarian style.
Sophisticated Paternalist vs. Consultative Style of Human Resource Management
The consultative style is also one of the most popular ways of managing people in the modern context of organizational behavior. A consultative manager pays more attention to end-results of a task being undertaken than asserting his command and control. Like authoritarian or directive leader, he also holds complete control on decision making process. Still, he pays attention to, respects, and also puts in practice (if found practical) the input on the part of members of his team (Gupta, 2007). Stephen Tindall, who founded ‘The Warehouse’ to revolutionize the grocery retail in New Zealand, had the elements of being a consultative leader (Get Frank, n.d.).
There are both similarities and disparities between paternalistic and consultative HRM approaches. For example, managers of both categories hold authority and decision making power. Unlike authoritarian leaders, both like to create an atmosphere of collaboration and cooperation. Furthermore, both of them are a strong believer of team-effort and prefer objectivity to a subjective approach to any matter. They finalize decisions after proper consultation (this is rather a prominent characteristic of consultative management).
However, a paternalistic leader chooses to act as a team member due to his humility and care that he has for his workforce despite having a solid grip on the matters that he undertakes. On the other hand, the reason for a consultative leader behind his consultation is usually his lack of knowledge. He largely relies on the expert opinions of his team member, so he lacks fatherly impression that is special characteristics of a paternalistic leader.
Stephen Tindall (mentioned above) was, no doubt, a great leader deserving to be categorized as a paternalistic leader. Still, the following words provide some insight into consultative aspect of his personality:
“I’ve never had a style of telling people what to do. It’s about always finding people that know more than I do and working closely with them. Using the best possible talent you can to build companies.” (Get Frank, n.d.)
Sophisticated Paternalist vs. Constitutional Style of Human Resource Management
The management in sophisticated paternalist HRM approach is completely different from constitutional management style. Where, the management considered itself as progressive and enlightened in sophisticated paternalist management style, and the trade unions are taken as unrelated, on the other side, the constitutional approach focuses on the formal relationship between the management and trade unions. The constitutional approach emphasized on balancing of power between the managements and trade unions (Purcell & Sisson, 1983). The constitutional organization is one of the types of modern organizations (Farnham, 2000). The constitutional style is more similar to consultative, but it also focuses on the formal relations between two major powers of the industries. The presence of trade unions is recognized in constitutional style with the development of the formal relationship. It shows that sophisticated paternalist is completely different from constitutional (Gennard & Judge, 2005).
In a sophisticated paternalist organization, the management usually focuses on the social characteristics of its employees. In such system, the managements do not waste their time in granting that their employees accept the objectives of the organization but they more focus on motivating their employees to work making them happy and satisfy (Stewart, 1999). One of the major aspects of paternalist is that the management is more attentive to make employees motivate to participate in decision making. The level of two dimensions is also different in constitutional style as compared to sophisticated paternalist. The individualism is high, and collectivism is low in a paternalist while, individualism is low, and collectivism is moderate to high in constitutional style (Bendix, 2010).
Sophisticated Paternalist vs. Opportunist Style of Human Resource Management
The opportunist organizations adopt the management style based on the circumstances in locals. In comparison to sophisticated paternalist, opportunist style usually determines the appropriateness of recognizing the trade unions (Purcell & Sisson, 1983). In line with this approach, the management focuses on the profitability of unit rather than the whole network and therefore, the large companies are more emphasized by opportunist Human Resource Management style to develop employee relation at subsidiary level (Gennard & Judge, 2005).
Other than the recognition of the trade unions, the opportunist style also emphasizes on the engagement of the employees in the organizational decision making to which extent is needed. In general, it can be said that the opportunist style is opposite to paternalist. The organization is completely controlled in the sophisticated paternalist system, where, it is completely flexible and lacking rules and control in opportunists. The level of collectivism is very high in opportunists as compared to no collectivism in paternalist. Both the styles of HRM, in general, possess completely different sets of characteristics regarding employee relations, union involvement, control, and power. One of the major differences between the two styles is the employee retention. The retention is low in opportunist organizations as compared to high retention in paternalist. For example, the management styles and Human Resource Management are conservative and controlled in New Zealand. Therefore, the employment rate is high there, and employment turnover is low.
Limits and Potentials of Sophisticated Paternalist
There are many limitations and constraints of sophisticated paternalist to both employers and employees. If the management is failed to develop the loyalty based relations, the paternalist Human Resource Management practices result in the low motivation of the staff. In addition to this, the happiness and satisfaction of employees are limited to the good decisions, and they can be dissatisfied if the decision is not accounted of their interests. As the paternalist Human Resource Management approach lacks flexibility and mobility, therefore, the employer can face the lack of creativity and innovation that can reduce the efficiency of the organization. It is not possible for the individual to bring a set of new ideas. It is the major reason for why the modern organizations are more involved in constitutional and standard management style for high collectivism to increase the innovation of the company. For example, Google is one of the leading, successful and largest multinational organizations that is completely focused on collectivism and teamwork for high creativity and innovation (net Competition, n.d.).
Other than the limitations, there can be many significance and potentials of sophisticated paternalist to both the employers and employees. First of all, the management style in sophisticated paternalist can result in the decrease in the rate of employee absenteeism and employee turnover and can increase the employee retention as it focuses on making the employees happy and satisfy. In the contemporary business world, it becomes very important to retain employees to increase and improve the organizational efficiency. The role of management is obvious in the employee retention; therefore, it is one of the major significance of this HRM approach. It is also potential for employees to take long term relationship and employment within the organization along with having importance for their interests and feedbacks in the decision making. One of the major potentials or significance of paternalism is that the employers enjoy the complete control of the organization and employees within strictly and bureaucratic structure. It means the organization is completely based on well-designed rules and policies. It is an ideal condition for the employers to control the organization fully and enjoy great powers.
Conclusion
References
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