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Reengineering the motivation to work

Focus on management history Reengineering the motivation to work

Dayr Reis University of Wisconsin, La Crosse, Wisconsin, USA Leticia Pena ? University of Wisconsin, La Crosse, Wisconsin, USA


TQM, Motivation, Scientific management, Human relations

How can we motivate people to work? How can we create a situation in which people can achieve their personal goals while fulfilling the goals of the organization? Historically there have been two major approaches to solving the motivation puzzle. Management can motivate people to work by fear, by being tough. Or it can motivate people by understanding, by being good. The authors argue that in spite of some diversions, these two paths to motivation have been vying for managers' attention throughout the years. The modern approaches ± total quality management (TQM) and business process reengineering (BPR) ± although more subtle and sophisticated than earlier predecessors, still represent these two opposite positions of the motivation pendulum. In a first section, corresponding approximately to the 1900-1970s period, the article gives an historical perspective on motivation in work organizations, with the ``be tough'' and ``be good'' approaches occupying the center of the management stage, while relevant diversions and qualifications serve as the background. In a second section, covering the 1980s and 1990s, the paper analyzes the impact of TQM and BPR on people's motivation to work. In the final section, the authors draw conclusions and offer a vision of the new frontier after TQM and BPR.


Centers on motivation in work organizations, yesterday, today and tomorrow. To retain qualified employees in an organization and to maintain a satisfactory type of role performance, people's experiences in the system must be rewarding, particularly if they have freedom to move in and out of organizations. Motivating people to work in the twenty-first century with theories conceived in the 1800s and early 1900s is likely to be infeasible. After reviewing the major events in the management history of the last 100 years, the authors try to distill the knowledge that will help illuminate the motivation path for present and future managers. The core message is that managers should reconsider the outdated motivational patterns utilized to maintain role performance in organizations. The authors propose a fresh motivation formula for the twenty-first century, based on ``friendship, work and respect''.

Motivating people to work: historical perspective
``Be tough'' or the forces of darkness
Starting in the early 1900s, the forces of darkness proposed and used their theory first. To motivate people to work, they
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Management Decision 39/8 [2001] 666±675 # MCB University Press [ISSN 0025-1747]

postulated that management should be tough. This traditional form of motivation, and the one that seems to come easiest to most managers, emphasizes such processes as centralized authority, rules and regulations, division of labor, clear separation of staff and line employees, planning and control (usually more control than planning), detailed record keeping, specialization, expertise and so on. This view of organizations is common to three movements: the scientific management and classical management schools, and the bureaucratic movement. Their more eminent proponents were Frederick Taylor (USA), Henry Fayol (France) and Max Weber (Germany), respectively. Together, these schools of thought have become known as machine theory of organization or mechanistic theory. In machine theory, people are considered adjuncts to machines. Machine theory assumes that people work primarily to earn money. Therefore, people will work only if driven by fear of losing their jobs, and they will try to get away with doing as little as they can. To prevent them from doing so, there must be close supervision. Management must tell every employee exactly what to do every minute of the day. It must spell out every rule and give the worker the narrowest possible range for discretion. Rules are promulgated just to show who is boss. Individuals are kept busy to prevent trouble. Labor, so goes the theory, can be bought and sold just like any other ``commodity'' and can be treated in the same way. The ``be tough'' approach provides no incentive for workers doing more than the bare minimum. However, there is a great deal of employee satisfaction in making management look silly. Both sides spend enormous amounts of energy trying to outsmart the other. Productivity and creativity are usurped by politics as the predominant activity.

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Many factors intruded to make machine theory loose relevance. As the technology increased in complexity, labor became a more critical factor. It took longer to train people as more specialized skills were needed. Furthermore, labor turnover became expensive and recruitment more selective and lengthy. In brief, labor's power increased, oftentimes helped by unions. Management then responded by talking about a cooperative system between management and labor. Thus, machine theory began to lose some of its shine.

``Be good'' or the forces of light

As stated earlier, machine theory was not prepared to deal with the rapid market and technological changes of turbulent business environments. In addition, political, social, and cultural changes required for new patterns of leadership for authoritarian styles no longer became easily accepted. Although bureaucracy had always been a dirty word among scholars, it was not until 1938 that the forces of light counterattacked the forces of darkness. This happened when Chester Barnard published his seminal work entitled The Functions of the Executive (Barnard, 1938). In the book, Barnard argued that organizations are cooperative systems, and surprisingly, that authority best comes from below rather than from above. One year later, another influential work was published by Roethlisberger and Dickson entitled Management and the Worker (Roethlisberger and Dickson, 1939). The book described the first significant empirical study published of productivity and social relations, informal groups, and work restriction norms at the Hawthorne plant of the Western Electric Company. The value of decent, humane leadership was stressed in the book. With the threat of labor unrest and the Great Depression upon them, the founders of the human relations movement were arriving just in time. In this context, the ``be good'' approach, or the human relations school of management was born. After the Second World War, this school of thought came into its own, building on the work of Barnard, and the Hawthorne studies sponsored by Harvard University and directed by Elton Mayo. The forces of light contended that management should be good in order to motivate people to work. It put people in the organization equation. It emphasized delegation of authority, employee autonomy, trust and openness, interpersonal dynamics, and cooperation instead of competition. It was based on the study of the biological sciences rather than engineering systems. Later, this

school would be known as the organic theory of management. The ``be good'' approach sought to raise employee morale by providing good working conditions, fringe benefits, employee services, high wages, with decent and fair supervision. The assumption behind this approach was that if management was good to employees, they would work harder out of loyalty and gratitude. The development of satisfied employees, in turn, would result in a more dedicated workforce willing to work harder. However, the assumption that satisfied employees work harder was never confirmed by research. In the words of March and Simon:
. . . satisfied workers are motivated to participate but not necessarily to produce (March and Simon, 1958).

The progress of human relations

In the 1950s and 1960s, the human relations movement made enormous progress and enlisted many followers. In America, universities placed great emphasis on employee-centered aspects of leadership. For example, Bennis (1966) and Bennis and Slater (1968) argued that rapidly changing technologies and turbulent environments would require innovative decentralized organizations composed of temporary groups and leadership exhibiting flexible role assignments and following a democratic managerial style. Similarly, in England, the Tavistock Institute focused its research on the relationship between type of task and group preference. The first important study of the Tavistock Institute, conducted among coal miners, showed that job simplification and specialization did not work under conditions of uncertainty and non-routine tasks (Trist et al., 1963). These advancements proved that the forces of light were winning. Eminent scholars like Rensis Likert, Douglas McGregor, Chris Argyris, Frederick Herzberg, Robert Blake and Jane Mouton, Edgar Schein, and others carried on the work initiated by Barnard and other human relations predecessors.

The forces of darkness come back

Meanwhile, somewhere in another part of the management jungle, the machine theorists were replenishing their armies with new weaponry and preparing to attack the forces of light. First came the operational researchers or management scientists, with their linear programming algorithms, PERT systems, and cost-benefit analyses. They carried scientific management thought to its fullest and were welcomed by academia and

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practitioners alike. Their work continues to this day, helped by computer scientists and information systems experts. Then came Max Weber's writings about bureaucracy. Although his writings were first published in German in the 1910s, the English translation by Talcott Parsons appeared in the USA in 1947 (Weber, 1947). Gradually, studies began to show that bureaucracy could be useful to organizations. For example, studies showed that bureaucratic organizations could change faster than non-bureaucratic ones; that morale could be higher with clear evidence of bureaucracy; and that bureaucracy could effectively rid organizations of favoritism, arbitrary authority, discrimination and incompetence. In reality, studies have shown that job security arising from bureaucratic structures promotes more innovation too! Bureaucracy goes on unabated today, much more sophisticated of course, disguised within flatter organizations, employee empowerment and other slogans, depending on the prevailing ``theory of the month''. Why do bureaucrats and bureaucracies seem to perpetuate themselves, one may ask. We suspect that managers and administrators still like bureaucratic systems and would not know how to retain control without them.

of thought ± the decision-making school ± more concerned with how people make decisions in organizations and the managerial implications of limited rationality. If employees were so limited, managers needed to control the premises of employee decisions rather than giving them direct orders. Leadership could function best through indirect means such as changing the premises on which decisions are made, while giving the impression that the subordinate is making the decision when he (she) only has been switched to a different set of alternatives. This same idea is known as employee empowerment today.

By the 1950s political scientists also began to argue that organizational theorists were neglecting important variables, like power and conflict. Their observation infiltrated both schools ± machine theory and human relations. While proponents of the human relations school acknowledged that conflict could be healthy and even creative, and redefined power as influence, the followers of bureaucracy argued that the bureaucratic structure was there to resolve questions of power and to keep conflicts out. They just absorbed the new knowledge as some new spice to be thrown into the pot. Adepts of both schools of thought were also puzzled by the compelling idea of ``limits of rationality'', first found in the work of James March and Herbert Simon in their book entitled Organizations (March and Simon, 1958). This concept argued that human beings are so limited in intelligence, reasoning, information, time available, and prioritizing that they seize on the first acceptable alternative when making decisions, thus demonstrating so-called ``cognitive limits of rationality''. According to March and Simon, human beings try to satisfice instead of optimizing their decisions. The limits of rationality concept helped to start a new line

Important diversions: power, conflict and the limits of rationality

While the forces of light (human relations) and the forces of darkness (machine theory) were trying to defeat each other, some wise people thought there could be some kind of peace process and reconciliation between the two camps. Joan Woodward, for example, conducted research on the classical principles of management in England between 1955 and 1964 (Woodward, 1965). In her survey of 100 firms in south Essex, she was able to link organizational structure to technology. She found that bureaucracy was the best form of organizational structure for routine operations. On the other hand, temporary work groups, decentralization and emphasis on interpersonal processes worked best for non-routine operations. The human relations school had to accept that openness and trust, while good things in themselves, might not have any impact in some work situations. Similarly, the admirers of bureaucracy had to acknowledge that research and development units that depend on scientific talent, for example, had to be run differently from mass production units. One of the first instances where the environment is considered an important variable of the organization equation is found in the work of Burns and Stalker (1961) entitled, The Management of Innovation. In this book, the authors distinguished organic versus mechanistic systems. They found that a mechanistic type of organization was appropriate for stable conditions while the organic type was better suited to changing conditions. Like Burns and Stalker, researchers from the other side of the Atlantic were comfortable with the idea that organizations are socio-technical systems, as first described in a book by Emery and Trist (1960). The Tavistock Institute was instrumental in disseminating the concept of organizations as socio-technical systems.

More qualifications: technology, environment and systems

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This school of management sought to reconcile machine theory and human relations. Its appeal was short-lived, perhaps because it was aligned more with employee rather than employer concerns. In America, Lawrence and Lorch (1967) and Thompson (1967) also recognized the importance of the environment in organizations. Lawrence and Lorch (1967) introduced the concepts of differentiation and integration. They found that firms performed best when the differences between units were maximized, as long as the integrating mechanisms were neither strongly bureaucratic nor laissez-faire. Thompson (1967), on the other hand, discovered an imbalance between ability and authority that caused bureaucratic dysfunctions. A final resolution of the conflict between human relations and machine theory was crystallized in systems theory (Von Bertalanffy, 1956). All schools of thought agreed that organizations were systems, i.e. open systems. The system concept is appealing. Everything is related to everything. Every unit takes in resources, transforms them, and sends them out, thus interacting with the larger system. The psychological, sociological, and cultural aspects of units also interact. However appealing and simple the concept seems to be, systems theory remains vague and too theoretical. It has failed to give practical prescriptions on how to motivate people to work. Perhaps that was not its purpose. Whether people like or do not like to work, organizations, nevertheless, remain systems.


Sometimes problems can be solved through good human relations, by changing the premises on which decisions are made, by changing the structure of organization, or sometimes through good leadership.

The 1980s and 1990s: enter total quality management and reengineering
In the beginning of the 1980s American business began to falter. Productivity decreased, quality of products and services deteriorated, and the trade deficit began to rise. For the first time, America was finding it very difficult to compete with Japan and other industrialized countries. The work environment was changing rapidly. In this dynamic context, motivation theory had to change too, or at least be perceived as a novel theory with a new message of hope. Motivating people to work in the last two decades of the millennium and beyond with theories conceived in the 1800s and early 1900s was not working. A new message was ready to be delivered and Dr W. Edwards Deming was the emerging messenger who transplanted it from Japan to America. The TQM crusade took root in the USA with the airing of an NBC televised program in 1980 entitled ``If Japan can, why can't we?''. This widely viewed program revealed Deming's key role in the development of Japanese quality three decades earlier, since the late 1940s. Thereafter, his name became a household word among corporate executives in America and throughout the world. From 1980 until his death in 1993, Deming's leadership and expertise helped to modernize many American companies' approach to quality and, ultimately, to management, including Ford Motor Company, General Motors, and Procter & Gamble. The TQM movement was not the work of one individual. Many other quality gurus like Joseph Juran, Phil Crosby, Armand Feigenbaum, Genichi Taguchi, Kaoru Ishikawa, Masaaki Imai, Ohno Taiichi, Shigeo Shingo, Johnson Edosomwan, and Richard Schonberger helped Deming spread the message of hope of the quality management crusade. TQM contained many of the tenets of the human relations school, enough to be considered a true inheritor of the ``be good'' approach. It preached decent treatment of people, elimination of quotas and slogans, true employee empowerment and so on. According to TQM, improvement should be pursued gradually and continuously.

Motivation in work organizations: summary of implications before the 1980s
Let us summarize the prescriptions for management offered by organization theorists before the 1980s. . A great deal of variance in a firm's behavior depends on the environment. . If work is predictable and routine, managers should try bureaucracy. . If work is non-routine and uncertainty abounds, managers should try a form of management that emphasizes autonomy, temporary groups, multiple lines of authority, responsibility, and democratic values. Confusion might work too! . It is difficult to know what good leadership is. It depends on the nature of the task, size of the group, length of time the group has existed, type of personnel within the group, their relationships with each other, and the existing amount of group pressure.

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Furthermore, Deming's philosophy of management retained much of the sociotechnical systems school. Everybody, from the top to the shop floor was supposed to participate, to experiment with how his or her work was organized. This collaboration required employees to meet with their colleagues regularly to discuss changes and to monitor the effects of the changes. Both Deming and the socio-technical systems pioneers wanted work to be rich and exciting, challenging and enjoyable, with management offering trust and security. It seemed that the forces of light were winning again, at least for some time. The dialectic pendulum that had invariably oscillated between the ``be tough'' and the ``be good'' positions was now approaching the latter. Throughout the 1980s, the TQM and sociotechnical systems concepts were implemented in many companies in America and abroad. However, the pendulum soon changed its position. During President Bush's recession years, the quality movement lost influence. Quality management essentially became quality control, and macho managers fired their employees who had poor quality measurements. The forces of light were under siege again. Were the forces of darkness ready to offer a new alternative?

encouraged to reengineer. To survive, they had to make themselves more attractive to foreign capital. Following the prescriptions of reengineering proponents, high profile companies introduced dramatic and ruthless change programs. As is wont to happen, other companies imitated the leaders' behavior. All of these companies also associated a reduction of their labor force with the changes they were making. The reengineering message was delivered by respected academics and consultants, who spread it through books and articles in reputable management journals such as Harvard Business Review, and public lectures (Davenport, 1992). According to their champions, reengineering was to be adopted without delay. In the words of one management guru, Peter Drucker, ``Reengineering is new and it has to be done'' (Hammer, 1990). The response of Wall Street and the financial sector was that reengineering was the right strategy for business and for shareholders.

Early successes: healthy reengineering projects

Reengineering: the rise and spread of a promising idea

Reengineering seemed simple, logical, and practical. It was defined by its proponents as the radical redesign of a company's business processes, reinventing the way the business operates to meet the demands of a modern economy. Its focus centered on work processes. The benefits would come from streamlining or removing bureaucratic procedures and improving efficiency through better, more comprehensive work processes. This also would increase job satisfaction through the creation of multi-skilled teams who accepted considerable responsibility. Although the originators of reengineering always insisted that reengineering was about rethinking work, not eliminating jobs, managers equated reengineering with downsizing. Reverting to an earlier analogy, the idea was stolen by the forces of darkness as a new weapon against the forces of light. American managers' perception of the business and economic situation in the early 1990s made them keenly interested in the reengineering message. As gloomy predictions and warnings in the press and in management literature of catastrophic consequences of the new global market increased, American businesses were

In the early 1990s, management journals everywhere were reporting successful reengineering projects. Consultants were making vast sums of money. A survey of how the US business community viewed reengineering found that manufacturing had launched more reengineering projects than any other industry, with health care not far behind. According to the survey, 81 percent of the companies in the study had at least one reengineering project underway, with most information systems managers pleased with their organization's reengineering efforts. In addition, chief executives were not disappointed with the results they were getting thus far. This early enthusiasm was also documented in a report published by the Boston Consulting Group. The report described that a key component of reengineering is redefinition of what it means to be a manager, a transformation from command and control, top-down management, to leadership based on building internal capabilities and linking them to customer needs (Boston Consulting Group, 1993). Many healthy reengineering projects took place between 1991 and 1994. For example, one video company reinvented its order fulfillment system and restored customer satisfaction. From summer 1991 to early 1993, the reengineering team achieved a zero defect ratio, surpassing its goal of reducing the cost of errors by $1.6 million. Four

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full-time positions were also eliminated. One of the displaced workers, the reengineering team leader, then became an internal reengineering consultant with the parent company. Another dislocated employee received an attractive early retirement, while the other two employees were redeployed to different divisions of the same company. Notice, in this instance, people were being treated with respect. Those displaced by reengineering were provided with a soft landing (Bambarger, 1994). Another successful implementation of reengineering occurred in late 1991, when a major aircraft contractor inaugurated a reengineering program for the assembly of a military cargo plane. The program shortened the time required to put one of the aircrafts together and reduced drastically the number of defects in the final product. The time spent correcting mistakes experienced spectacular decline, plunging from 8,625 hours at the beginning, to a mere 611 hours 16 months later. From this procedure alone, the company estimated cost savings of $1 million per plane. The company declared that there had been no reduction in the work force, though despite of the added responsibilities, the amount of overtime had fallen significantly (McCloud, 1993). These and several others are examples of healthy reengineering. It is important to keep in mind that the originators of reengineering never encouraged its use to save costs. However, messages get distorted as they are transmitted and reengineering became synonymous with downsizing. Unfortunately, the message wanted and understood by industry in the United States was not improvement through reorganization, but reduced costs through cutting labor. One could say that the downfall of reengineering started when the first manager, running out of ideas, fired the first employee.

dealing with fear and anxiety throughout the organization, managing resistance to change by the workforce and managers, changing job functions and career paths. Another doubt appeared that same year, when the McKinsey Quarterly published an article on how to make reengineering really work (Hall et al., 1994). The article was based on the study of reengineering projects in more than 100 companies. It concluded that too many companies were squandering attention and resources on projects that failed. A more detailed analysis of 20 cases showed that reengineering was having little measurable impact on the business unit primarily due to projects aimed at processes too narrowly defined that subsequently had little impact on overall performance. According to the article, successful reengineering projects required both considerable depth and breadth for major positive results to appear. In this early period, the problem was seen as poor definition of reengineering needs and poor implementation by consultants. Neither the consultants nor managers were questioning the approach itself.

Continuing downhill and picking up speed!

Mediocre results: where is the beef?

In September 1994, a CSC Index Survey published in Information Week, canvassed 600 senior managers of large corporations in the USA and Europe. Sixty-nine percent of the North American managers and 75 percent of the European managers reported at least one reengineering project. Satisfaction with results of this cohort was mixed. Although 16 percent claimed excellent results and another 7 percent claimed good results, more than 40 percent reported mediocre to marginal results, and another 25 percent said their projects had failed. According to CSC Index, some of the greatest challenges were

With every passing year, fewer and fewer projects appeared to be producing the desired results. Many pioneering companies were left with a demoralized workforce, with increased rather than reduced costs, with processes more difficult to manage than the old structures, and with large consulting bills. The term ``reengineering'' was rapidly losing its original meaning even though every major company was claiming to use reengineering irrespective of how or what they were changing. One CEO, for example, even said with great satisfaction, that his company ``reengineered'' its employees' coffee whitener from cream to milk (The Economist, 1994). In sum, many reengineering programs had little to do with radical rethinking of a company's business processes. Instead, they were solely directed at cutting costs (Katz, 1995). Furthermore, additional doubts about the effectiveness of reengineering began to surface. One survey reported that 68 percent of senior executives polled were experiencing unanticipated problems with reengineering. The article concluded that much of the disappointment came from setting unrealistic targets. It also pointed out that nobody knew whether reengineering programs raised revenues and profits in the long term. On the contrary, available evidence was showing that reengineering took longer than expected, involved more

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resources than available, and presented problems no one anticipated (Barr, 1995). Before too long, additional evidence began to confirm that reduction in the size of labor forces ± business anorexia ± had not necessarily improved profits (De Meuse, 1995). After a three-year period, firms who engaged in anorexic behavior had ended up with lower profit margins and a poorer return on assets and equity compared to equivalent firms that did not downsize. The dieting had created a cynical and demoralized workforce. Furthermore, an ISR survey of more than 350,000 employees in the USA published in the Personnel Journal showed that the percentage of employees worried about being laid off had increased from 20 to 24 percent between 1991 to 1995 (ISR, 1995). It also seemed that newly lean companies had to replace lost staff functions with expensive consultants. The added cost of consultants was verified in October 1995, when the Boston Globe published an article by Edward Deevy, noting that American business was paying consulting firms about $20 billion a year for poor advice (Deevy, 1995). Where was the beef?

Similarly, TQM provided a carrot and a stick. The carrot was decent treatment of people, elimination of quotas, employee empowerment, teamwork, bottom-up decision making and so on. According to Deming's chain reaction, high quality and low cost products would then capture the global market and the company would survive and be able to provide more jobs. The stick was very real: the loss of jobs if the firm does not improve quality since it would be unable to compete. Continuing the analogy, could we not conclude that reengineering concentrated on sticks and forgot the carrots? Top-down decision making, ambiguous opportunities for personal development and learning, unstable work relationships and dissatisfaction of providing quality service to customers primarily reflect sticks, not carrots. Could it be, in effect, that reengineering has lacked respect for people?

The problems with downsizing

Why did reengineering fail?

Tom Davenport, one of the gurus of reengineering, proposed an answer in the article entitled ``Why reengineering failed: the fad that forgot people'' (Davenport, 1996). In his words, ``reengineering treated people inside company as if they were just so many bits and bytes, interchangeable parts to be reengineered''. Thus, the case against reengineering based on its lack of concern for people and its takeover by managers who wished to downsize and reduce their staff numbers was made explicit by an earlier proponent. Notice here, that theories of motivation might offer an important observation. Simply stated, motivation theories in general present a carrot and a stick. Tracing the major movements in management history, we can say that an analysis of machine theory produced a carrot ± incentive pay and promotions for those who produce above the norm, and a stick ± the omnipresent threat to fire people if they do not perform. The human relations movement also had a carrot and a stick. Its carrot translated into all the good things the employee would receive for hard work, given a docile, wellintentioned and knowledgeable workforce. Its stick could be summarized in the phrase: ``If you do not help raise the profit margin through empowerment, your gifts will be taken away.''

The problems with downsizing can best be appreciated through another analogy along with stories and surveys of actual cases as noted below. Using another analogy, the proponents of downsizing joined efforts with the forces of darkness arguing very effectively that organizations are like people: as they get older and more successful, they put on fat. Just as the remedy for fat people is diet and exercise; the remedy for fat organizations ought to be downsizing. In one company, the reengineering effort was undertaken in a top-down manner, with employees having no say in whether to undertake reengineering, whether to participate or what areas would be candidates for change. To accomplish the ``reengineering'', the company created a team of each of the company's five facilities. The company's director of human resources referred to this group as a ``tiger team'' and explained: ``This is an army term for a group that goes and blitzes the area. The team is composed of the brightest and the best. They are given carte blanche at reorganizing'' (McCloud, 1994). ``The way to reengineer is to do it, not think about it, plan it, or discuss it'' (Hammer and Champy, 1993). This message from the founders of reengineering was misunderstood by the macho manager, who had never believed all that soft ``look after the people stuff'', recommended by behavioral scientists and the be good approach defenders. Management then called in the consultants to do the dirty job of firing people. Downsizing required no special theory or methodology. The consulting firms were

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selling their old traditional methods repacked as reengineering. Everybody was now getting on the bandwagon. Few consultants had a great deal of experience of advising on organizational change. Consulting firms were expanding to satisfy the new demand and their recruits were young men and women straight off MBA programs. They had little feeling for people. They may have regarded human relations strategies such as participation and communications a waste of time and money. They thought that reengineering was like introducing new machines to the shop floor. Davenport suggests that the reason some companies made staff redundant was to pay the enormous bills of the consultants they brought in (Davenport, 1996). Survey after survey was showing that very few companies were achieving the desired results in cost reduction, increased productivity, efficient decision making, and even increased cash flow or short-term profits (Chu et al., 1997). Managers forgot that the objective of reengineering was to make organizations more effective, not more anemic. Many companies were making across the board cuts in personnel ± the ``grenade'' type of reduction, a colorful designation used by Dr Kim Cameron, a professor of Organizational Behavior at the University of Michigan. Key employees who contributed to the corporate memory and personal business contacts were let go. Knowledge about organization's culture, beliefs, values, and the irreplaceable network for personal business contacts were lost forever when those senior employees were made redundant by the collective stupidity of a group of managers obsessed with the metaphor of the anorexic dinosaur. Layoffs often resulted in lost expertise, which is costly to replace. Problem solving and innovation are also intensely social endeavor as well as an economic process. Downsizing breaks the network of individual relationships used to work out strategic linkages. Anorexic firms were not only failing to achieve their economic objectives of lower costs and higher profits but also experiencing other serious problems. In a study by the Goldhirsch Group, Inc., it was found that the resulting overwork had detrimental effects on the interviewed companies. About 40 percent of the respondents reported that they were having difficulties meeting schedules. Also, 71 percent of the downsized companies' employees were suffering from stress related to the increased workload demanded by their jobs.

In another survey by the American Management Association, it was found that 83 percent of employees working in downsized firms had decreased morale. Also, 20 percent of downsized companies reported noticeably increased error rates as well as higher rates of turnover and absenteeism. One of management's favorite sites for testing the reengineering ``grenades'' of downsizing was the customer service area. As one employee rightfully observed, a downsized demoralized customer service staff, where it continues to exist, will be unable to deal with the situation. Inevitably, there will be fewer people answering more complaints from angrier customers. Management forgot the employee, the customer, and quality. Between 1993 and 1995, Sears, AT&T, IBM, Boeing, and Xerox alone eliminated over 250,000 jobs. By 1996 however, 60 percent of the companies that engaged in anorexic behavior ended up hiring back the same number of workers that they had originally laid off. As is well known, diet pills have been an easy shortcut to quick weight loss. But these amphetamines reduce appetite only temporarily. After some time, the appetite returns and the body regains back all the lost weight, plus more. What is even worse, the patient is left with the problem of trying to get off the drug without gaining more weight! The same happened with downsizing. Although the difficulties of anorexia were becoming apparent, management got addicted to the habit to the degree that downsizing still goes on unabated. While the middle layers of management have almost disappeared, the top and the bottom have become much heavier. Like a balloon, if you squeeze the middle, the top and bottom get more and more inflated, unless the balloon blows up!

Beyond TQM and reengineering: making peace with people
High quality no longer translates easily into gains in profitability or market share. Instead, quality has become the price of admission to the marketplace. Rethinking business processes alone through reengineering will not guarantee success either. Customer focus is the critical issue. Satisfying the customer is the only safe path to success. However, dissatisfied employees cannot satisfy their customers. We need to fully understand the impact of what managers do to motivate people to work, on the social contract within the organization. The following are some of the important

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issues for any theory of motivation in work organizations.

Customer satisfaction and satisfied employees

All of us in organizations need to be working for the customer. Reengineering, TQM, or any other approach should be driven by one goal: satisfying the customer. The ultimate success depends on the people who do the work and on how well they can be motivated to be creative and to apply detailed knowledge to do their job. Dissatisfied doctors and nurses cannot satisfy their patients. Dissatisfied teachers cannot satisfy their students. Dissatisfied flight attendants cannot satisfy their passengers. Dissatisfied parents cannot satisfy their children. It has to be a two-way street. It is as simple as that. How do you convince people in organizations to support reengineering, TQM or other change program? One cannot force someone to be motivated. Conviction comes from within. The key is to remove barriers to motivation, rather than try and motivate. Understanding is the only thing holding an organization together when line control is taken away. It is understanding, not training, or coaching or teaching. Managers need to try to understand the people they work with and viceversa. Try making peace. Try making friends.

fear of change lies at the top. A Cranfield report on change shows that 90 percent of change initiatives are sabotaged by the board before even taking off, due to their own fears (Conn et al., 1996). Employees also fear change. Surveys show that at the beginning of a change program, 60 to 80 percent of employees are scared and/or cynical. After undertaking the program, those feelings can rise to between 90 to 95 percent!

How to counteract fear

It is important to distinguish between paralyzing fear ± fear that causes inertia ± and fear that makes one act. Where possible, one should try to convert paralysis into action. Deming's advice was to drive out fear. How? Try understanding. Try genuine friendship. Try starting and closing each team meeting with a simple question like ``What is on your mind?'' Try showing respect for people.

Language and understanding

Language is crucial for understanding people in organizations. People often think they are speaking the same language although that may not be the case. Motorola found six different business languages and 27 natural languages in their organization. They created a handbook of basic terms which everyone could understand and use to support collaboration.

Change and resistance to change

The success of any change depends on the willingness of employees to accept it with enthusiasm and implement it with care. Yet, business changes at times are undertaken without understanding how the human element influences the success or failure of a project. Frequently, companies develop impressive technical plans and simply assume that the change ± technical or organizational ± will occur. The difficult and often neglected part of such initiatives is leading and managing behavioral change with those persons who interface with the new technology or the new initiatives. People may have their own ideas about what should change, and frequently its success revolves around someone else changing, not them. Too often, management ignores human resistance issues and the need to address them in the implementation plan. When that happens, people who are targets of the change end up spending their time and energy figuring out how to stop the change, or change it until it looks like something they can live with. Why do people resist change?

A checklist: is your company's culture right for change?





Change and fear


Many people fear the unknown and change is always loaded with uncertainty. The greatest

If your organization is still using functional/vertical hierarchies instead of self-directed work teams, truly empowered to make changes, it is not ready for change. If communication in your organization is still flowing downwards instead of going 360 degrees in all directions, it is not ready for change. If customer requirements are being inferred from top or senior managers instead of being incorporated through quality function deployment, your organization is not ready for change. If your organization is still recognizing and rewarding only individual performance instead of teamwork and collaboration, it is not ready for change. If your organization is still using only measures that are focused on financial performance instead of customer value, customer satisfaction and retention, the organization is not ready for change. If measures in your organization are still monitored by accountants and senior managers instead of teams and process

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owners, the organization is not ready for change. If goal setting in your organization is maintenance oriented instead of renewal oriented, the organization is not ready for change. If managers in your organization do not set the example by truly working hard ± not merely shuffling papers and stamping other people's work ± the organization is not ready for change. True change will happen the day when organizations will motivate people to work by using a simple formula:

Effective change = f(friendship, work, and respect for people).

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Deevy, E. (1995), ``Get rid of experts, not workers'', The Boston Globe, 24 October. De Meuse, K. (1994), Human Resources Management, Vol. 33 No. 4. (The) Economist, (1994), 5 November. Emery, F.E. and Trist, E. (1960), ``Socio-technical systems'', Management Science Models and Techniques, London, Pergamon Press, Vol. 1. Hall, E.A., Rosenthal, J. and Wade, J. (1994), ``How to make reengineering really work'', McKinsey Quarterly, No. 2. Hammer, M. (1990), ``Reengineering work: don't automate, obliterate'', Harvard Business Review, Vol. 68 No. 4, July, pp. 104-12. Hammer, M. and Champy, J. (1993), Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business, New York, NY. ISR (1995), Personnel Journal, September. Katz, R. (1995) ``Is reengineering already dead?'', Quality Digest, January. Lawrence, P. and Lorch, J. (1967), Organizations and Environment, Harvard University Press, Cambridge, MA. March, J. and Simon, H. (1958), Organizations, John Wiley & Sons, New York, NY. McCloud, J. (1993), ``McDonnell Douglas saves over $1,000,000 per plane with reengineering effort'', Industrial Engineering, October, pp. 27-30. McCloud, J. (1994), ``Changing customer demands as impetus for BPR at Schlage Lock Company'', Industrial Engineering, June, pp. 30, 31, and 34. Roethlisberger, F.J. and Dickson, W.J. (1939), Management and The Worker, Harvard University Press, Cambridge, MA. Thompson, J. (1967), Organizations in Action, McGraw-Hill Book Company, New York, NY. Trist, E.L., Higgin, G.W., Murray, H. and Pollock, A.B. (1963), Organizational Choice, Tavistock Publications, London. Von Bertalanffy, L. (1956), ``General systems theory'', General Systems, Yearbook of the Society for the Advancement of General System Theory, Vol. V No. 1, pp. 1-10. Weber, M. (1947), The Theory of Social and Economic Organizations, translated by Talcott Parsons and A.M. Henderson, Free Press, New York, NY. Woodward, J. (1965), Industrial Organizations: Theory and Practice, Oxford University Press, London.

Application questions
1 How is it possible to change a company's motivational strategy from one based on mechanistic theory to one based on organic theory? 2 What is your experience of organizational change and reengineering? Which parts of the process were seen as a success or a failure, and why?

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