Does Classic Management Still Have a Place in Today’s Organizations?
The organizational landscape is varied like the physical landscape; eroded and weathered due to shifts caused by elements of globalization and economic change. If any industry can identify with this analogy it’s the manufacturing sector; more specifically, U.S. auto manufacturers. With government bail-outs, sales fluctuations, and down revenues; the automobile manufacturing industry has experienced shifts and re-structuring. Historically, auto manufacturing is the poster-child for classical management; the industry where it began. However, if a company can remain competitive and viable in a changing global market; it will provide the proof that the classical management still belongs in the organizational landscape.
Ford Motor Company is an excellent example of a classical management approach to operations. When founder, Henry Ford designed and developed his assembly line system, the principles of the system were based on Frederick Taylor’s to-down management approach. Top-down management consists of decision-making at the top and then labor performed on the floor. In the early century the approach was revolutionary until globalization. As with many industries, auto makers had to incorporate a global center to business operations in order to stay competitive. Presently, Ford’s business model operates as a “whole” unit model instead of in divisions. The goal is to offer all product lines globally and not as segments (Keegan, 2011). Through the economic recovery period in the country, Ford revealed market projections predicting plans to increase the production rate to 200,000 trucks over the next year (Miller & Matthews, 2013).
Global and economic demands call for a competitive company with employee buy-in and a lean management approach. Home Depot adopted lean management with a literal army training approach to even minute details from inventory control to store management (Grow, Brady, & Ardnt, 2006). Classical management served the Ford Company well, for many years; however, the approach treated the labor force as machines and management was free to make decision with minimal employee consideration. A viable company will be “thinking” and “investigating”, employees will be highly skilled and trained in innovation, not just labor. Such a company will draw in customers and foster loyalty to the brand (Shook, 2008).
Grow, B., Brady, D., and Arndt, M. (2006). Renovating home depot. Bloomburg Businessweek. Retrieved from http://www.businessweek.com/stories/2006-03-05/renovating-home-depot
Keegan, M.C. (2011). What is the Ford Motor Company business model? Houston Chronicle.Retrieved from http://www.smallbusiness.chron.com.
Miller, R., & Matthews, S. (2013). The long, slow, but still-going recovery. Bloomberg Businessweek. (4334), 14-17.
Shook, J. (2008). What is lean management? In Lean Enterprise Institute. Retrieved October 31, 2014 from http://www.lean.org/shook/displayobject.cfm?o=1447.