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Amelioration and formalization

Now we can return to systematic and scientific management. Systematic management by the amelioration and formalization of the flows of information in the organization succeeds in increasing the accountability of decision makers toward each other and toward the stakeholders. This involves mainly decisions of the first type. The amelioration of information flows also allows top managers to coordinate and control more effectively the processes within the organization that are under the direct supervision of lower managers.

Scientific management focuses its efforts on making decisions of the second type as efficiently as possible by creating conditions in which decisions of the second type are most easily, ideally almost automatically, aligned with the relevant decisions of the first type and in which the alignment as well as the execution of the decisions of the second type can be effectively controlled. Moreover, the level at which it becomes necessary to make decisions of the first type had to be put as high as possible in the organization.

This last aim could be achieved by changes in the organizational structure and also by the introduction of new process technologies that increasingly took away from employees at lower levels the need to make any decisions at all. In the five categories of the Taylorian system that Nelson distinguishes, we recognize both these aspects. In the terminology we are using, the planning department (the second category) could be described as the instrument to determine secondary criteria and to align secondary criteria with primary criteria. Taylor’s functional foreman, in fact, demoted the foreman to a maker of decisions of the second type.

The speed boss was only concerned with speed, the disciplinarian only with discipline, and so forth. Furthermore, time and motion studies (the fourth category) served the determination of secondary criteria, and incentive wage systems (the fifth) again aligned these with the primary criteria. Although Taylor regularly protested that his system did not aim to convert the workforce into mindless automata, it is evident that he aimed at putting the level at which primary criteria are translated in secondary criteria as high as possible in the organization and also at centralizing power in the organization as much as possible.

It is not surprising that (lower) management counted among his fiercest opponents. Against Marxist or, at least, “radical” authors such as Braverman, who argued that Taylorism was mainly a means of controlling the workers, expropriating their skills to management and the value of their labor to the owners, Nelson stressed the fact that in many instances, management opposed the introduction of systematic management because it seemed to devalue their skills as craftsmen of decision making or to remove most of the possibilities of using these skills-in ad hoc management.

Before proceeding to the cases, it is useful to summarize the main findings described in this section and focus, as we proposed, on the characteristics of the decisions, distinguishing It is possible to reduce the complex of systematic and scientific management ideas to four parts, the first two of which form the essence of systematic management and the last two of scientific management: 1. Improvement and formalization of information streams so as to make decision makers more accountable for decisions of the first type.

2. Use of the improved information to better coordinate and control the operations of the organization as a whole and especially middle and lower management. 3. Creating conditions (eg, by setting up a planning department) that allow decisions of the second type to be aligned with the relevant decisions of the first type and that allow the alignment as well as the execution of the decisions of the second type to be controlled effectively.

To put the level at which it becomes necessary to make decisions of the first type as high as possible in the organization. Although most technological innovation is aimed at increasing the efficiency of the process or the quality of the products, technological innovation can serve each of these four parts. The first two parts are mainly supported by office technology (communication and data-processing technology). It means that in service industries, office technology can both serve the primary process and the internal information system of the organization.

Data processing technology, such as punched-card technology, could clearly serve to improve information streams within the firm and improve control. And above, we already explained that in general technology (not just office technology but also process technologies in industrial firms) could serve to increase the control of the operations on the basis of secondary criteria and allow primary decisions to be more exclusively reserved to the higher echelons of the organization.

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