This week's food for thought

My Managements Principles classes are a bit dull, if I may say so myself. Do not get me the wrong, the subject is interesting, but the materials we have to learn about are most of the times are daunting, what more when the lecturer himself is much too talkative. It still is a fun thing to know about, at least I got a break from all those Economics concepts. I guess, to be put down into words, I would have to say that learning Management is more or less is the same as Economics in the sense that both of them requires me to be logical and analytical. They will force me to read all those theories, both new and old, then I need to see them through, observe their limitations as well as attempting to put them into place whenever possible.  

The above was my notes during my previous seminar. One of the questions being discussed was about Human Resource Management (HRM). To start off, the lecturer drew this on the board, saying that these are the two main notions on the topic which opposes one another, Marx vs Adam Smith. To briefly summarize what their clash of ideas:

1. Adam Smith had stated that the workers always look for the best jobs and the best wages. Karl Marx was of the opinion that a labour- wage war will break down the society and lead to the downfall of the economic composition.

2. Adam Smith believed in the liberty of all individuals through a capitalistic approach. On the contrary, Karl believed that Socialism will replace capitalism.

3. Adam Smith was of the opinion that each person has the right to pursue happiness and he has to take that in his own hands to advance within the society. In Karl Marx’s opinion, when a person betters himself he is not improving but endangering the society

So here we have one of biggest issues mankind have been debating about throughout the whole of their existence; the question of whether control brings more harm than good, or is it simply is overrated?

They say humans do not always know what is good for them, thus there arises a need for an external force, a third party to jump in and do it for them. Such is a simple way of expressing the basis of a need for a governing body. It exists to create policies that help shape a better way of living, that is the ultimate objective. Hence the next question which comes to mind is how would it be achieved? What sort of a strategy ought to be employed given our limited resources? 

In a more Economic sense, a company's manager has two main options. One is to be a real manager that does what a manager is supposed to do, to manage his employees. The manager leads his men by dividing them by the tasks assigned to them. In a way it is more of a divide and conquer strategy, one could say. This was exactly the notion written by Adam Smith in his Wealth of Nation when he told us about how division of labor would inevitably result in higher level of efficiency, then F.W. Taylor further elaborated that this practice would then lead to higher profitability as it helps to reduce the company's costs. So the basic idea is to have the right person to be doing the right task, this is how productivity can be made to increase.

The other available option for the manager is to acknowledge the fact that labor is indeed humans just like him which in turn means that they do have hearts of their own. Thus the focus on Human Resource arises. It is how to effectively use of human resource to enhance operational performance. By recognizing the fact that his labor are humans too, it is wise for the manager to build a strong relation with them in order to make them feel more belonged to the company. This method is a trickier than the first option because dealing with humans is more complicated. The company then ought to come up with suitable strategies such as providing fringe benefits or sorts. 

To be honest, the second option sure sounds more of an ethical practice. But nevertheless, how would a company's management know what is best for their workers? The information asymmetry prevents those on the top from seeing the bigger picture, which was why many argue that the best option is to strike a balance between the two options above. This way the governing body should more or less be able to obtain more information on how best to encourage their employees to be more productive. By integrating those two, a company should be able to create a fairly conducive working atmosphere, given that all other factors be them internal or external remain unchanged, ceteris paribus. Unfortunately, you know what they say, the bigger the assumptions being made, the bigger is the question mark at the end of the sentence.

I leave the rest to you.......