Hey Managers, your employees aren’t machines! A little social encouragement might just increase productivity…

Here are some concepts from chapter 3 of Scott and Davis’ Organizations and Organizing.  Running your organization as a natural system can build social cohesion among participants and encourage everyone to work for the good of the company.

“Hawthorne Studies” (pg. 64-65)  In chapter 3, Mayo summarizes the studies done during the 1920s at the Hawthorne electric plant outside of Chicago.  Mayo’s work grew out of Scientific Management, but dealt more with how physical and psychological factors affected maximum productivity.  The Hawthorne studies were set up to determine the optimal lighting for a telephone relay equipment line.  Researchers were confused by the results because production levels rose when light was diminished and increased.  When the researchers asked the workers what was going on, they found that, “the workers were so pleased to be singled out for attention that they had tried to do the best they could for the researchers and the company” (65).  This “Hawthorne effect” shows us that receiving attention motivates workers.  Individuals are not “rational economic actors”.  Workers act with multiple motives and values, including feelings, sentiments, facts, and interests.

These studies demonstrated the importance of informal organization.  Workers act as members of social groups, thus are motivated more by social encouragement rather than economic.  Mayo concluded that industrialism was unstable and lacked social cohesion.  Informal structure improved social cohesion and thus led to maximum productivity.  Human relations, psychological encouragement, and informal organization are necessary if an organization is to perform optimally.

Inducing Cooperation” (pgs. 70-71)   In chapter 3, Barnard discusses organizations as cooperative systems that integrate contributions from all participants.  Individuals must cooperate in order to contribute to the organizations and often need to be encouraged to do so.  Barnard mentions incentives such as material awards, distinction (like the attention given in the Hawthorne studies), prestige, and power that can be used to induce cooperation.

Without cooperation, organizations cannot survive.  This is because “goals are imposed from the top down while their attainment depends on the willing compliance form the bottom up” (70).  Barnard’s conception of authority explains that goals can be chosen by higher management, but those goals cannot be carried out unless the individual workers cooperate and do their jobs.  Authority is thus subject to those who receive orders.  This is why inducing cooperation is so important.  Barnard believed, as the Hawthorne studies showed, that nonmaterial, informal, and interpersonal incentives were better fit to induce cooperation than material rewards.  Informal organization socially facilitates these incentives and is essential to the successful operation of formal organizations.

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2 Responses

  1. Are there any organizations in particular you can think of that utilize a strong informal system in order to promote production? An obvious one for me is Google. Can you think of any others?

  2. Gore Associates. Netflix. I would check Marvin Weisbord’s book on High Performing Workplaces. Trader Joe’s? maybe

    Good question. If we find them, let me know as I am always looking for more interesting examples of firms or organizations to have to discuss these kinds of issues.

    By the way, for anyone out there, EJ’s post is an example of model concepts written from the Davis and Scott’s Organizations and Organizing book.

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