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Issues/Problems within a Company

Rogelio Nava

South Texas College

Dr. Patricia M Blanco

Abstract

Companies will always have their struggles and knowing how to fix problems is

leaderships role. With the Foundational Theorist it can help managers and employees solve many

problems within the company. Teamwork and rules are steps employees need to follow to

succeed in any organization but knowing whether to stay a follower or wanting to lead is

important for employees to know. Most companies start a business without a management plan

put into place, and reading Fayol, Weber, and Mayo could help new and existing business.

Keywords: Henri Fayol, Max Weber, Elton Mayo, and Business Strategies
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Issues/Problems within a Company

Business is more than just employees and managers working day in and day out. Most

small businesses are run by families and friends but working with family can be a risky decision.

Not every family owned business be successful like “Hanna Andersson”. Most companies just

need to improve their management skills and styles, and the five foundational theorist and

developing leadership skills can help companies succeed. Henri Fayol’s Administrative theory,

Max Weber Bureaucratic theory, and Elton Mayo’s Human relations theory can help any business

with problems but developing leadership skills will help managers and leaders understand where

they can improve themselves.

Literature Review

Management theories and developing leadership skills can help businesses understand

where they need improvement and can be used as a guide to help along the way. The

Administrative theory by Henri Fayol has a 14-step guide to better understand the companies

needs and how to properly motivate employees. Most small businesses are unaware of the help

that Principles of Management can provide when it comes establishing a standard for the

company. As stated in (Achinivu Godwin, 2017), “It refers to a broad and general guideline that

provides a blueprint for decision-making in an organization.”. The 14-step guide can help those

that have little to no experience when it come managing a company or employees.

Henri Fayol didn’t start in a management position, nor did he create the 14-steps of

Principles of Management with a failing outcome. Fayol created the 14-steps after his time as a

Director of a mining company, and during his time as a leader he led the company from failing to

a successful company. Fayol’s 14 Principles of Management consist of Division of Labor,

Authority/Responsibility, Discipline, Unity of Command, Unity of Direction, Subordination of

Individual Interest, Remuneration, Centralization, Line of Authority, Order, Equity, Stability of

Tenure, Initiative, and Esprit de Corps.

With the use of Division of Labor is making sure employees have a certain role so they

don’t feel overwhelmed with too much work. Employees that are over worked will tend to slow

the production of work needed to create a profit. When employees are able to focus on one task

at a time the success rate is a lot higher. Of course, when it comes to multiple employees

(Departments) conducting the same task there will be some employees that are slower or will

cause problems for the company. For example, “not all people in the department will carry out

the same job, someone can be assigned to carry out bank duties, another prepares vouchers,

while others could be in charge of disbursements.”[ CITATION Ach17 \l 1033 ]. Most companies

use division of labor but don’t understand the term or how it should be properly used. Companies

like to insert “Other Duties as Assigned” in job description and this will allow them to ask more

from their employees and cause more stress.

Managers and employees need to be aware of their roles in the company, because it’s not

a place for social gatherings. This is where “Authority/Responsibility & Discipline” play an

important role in every company. Managers need to have authority when it comes to leading

employees and ensuring the goals of the company are being completed. Authority is important in

a company but where most businesses go wrong is, they tend to have too many managers with

the same level of authority. For example, “the Post Office has many managers that each expect

employees to follow their directions, even when it conflicts with other managers task”. With

multiple managers with entrusted authority the employees can lose focus on important task and

cause more problems.

Discipline is one of the major roles needed for any company to succeed and it can be the

lack of discipline that can cause customers to quit business transactions and employees not care

about work anymore. As stated in [ CITATION Ach17 \l 1033 ], “It is often a part of the core

values of an organization in form of good conduct, respectful interactions, proper dress code,

etc.”. Discipline is something that needs to be conducted all the time, when people are only

discipline some of the time it can lead to no discipline. When there’s employees with a lack of

discipline towards the company it can cause others to conduct the same behavior. Once a

company sets a standard it’s up to the managers to uphold those standards and ensure those that

don’t comply are punished accordingly.

Companies need to be aware that some main problems are caused because of too many

managers and too many goals that need to be achieved by one group. The Unity of Command

and Direction can help companies understand why having too many managers is a problem, and

the Unity of Direction will help companies learn where their focus needs to be to complete a

task. For example, “If an employee gets orders from two superiors at the same time, then the

principle of unity of command is breached.”[ CITATION Ach17 \l 1033 ]. With the Unity of

Direction its bests used when only one path is available for employees to follow. As stated in

[ CITATION Unk3 \l 1033 ], “Each unit or group has only one boss and follows one plan so that

work is coordinated.”. With one goal in mind the employees won’t feel overwhelmed and

stressed and they will conduct their work efficiently and effectively.

Fayol’s rule of Subordination of Individual Interest to Organization’s Interest is important

for companies to understand, because this rule will have employee put the company’s interest

first above their own. Some employees apply for jobs just to receive experience and venture on

to better opportunities. The employers need to be aware of who they hire, but either way during
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an interview people will say positive things to receive the job. It’s up to management to be able

to distinguish which applicates are there for the long run. [ CITATION Unk3 \l 1033 ] states,

“The interests of one person should never take precedence over what is best for the company as a

whole.”. Applicates need to be aware of the companies that hire those to gain experience and lets

them move on. The best example of a company that hires people to gain experience is The

Goodwill.

With the Remuneration rule most people won’t understand what the term means, because

it’s not used in common everyday language. The term Remuneration means, “Paid to employees

should be fair, reasonable, satisfactory to both employer & employees, and rewarding their

efforts”[ CITATION Unk3 \l 1033 ]. Some employers will take advantage of the need of jobs and

only pay the bare minimum without looking at the areas cost of living. Employees will work

better knowing that they are being compensated properly. When employees want a pay raise the

managers need to be compensated as well, because employees shouldn’t be paid more than the

managers unless it’s a commission based job. In the commission-based job employees could

receive more income than the manager.

With the Centralization of decision making it can put a great deal of power to either the

manager or employees. Managers can be trusted with certain levels of authority, but when it

comes to employees, they can’t always have the same authority as managers. Not every

employee has the same work ethic and trusting task to low ethical workers can slow production

and cause profit loss. For example, “leader will give a lot of authority to his subordinates, but

what happens if these subordinates are only mediocre?”[ CITATION Dan02 \l 1033 ]. The

company should also have a clear chain of command one that employees can remember, because

when the chain of command is unreachable employees will either stop working or worse make
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their own decisions. With multiple managers it can be hard to establish a proper chain of

command, because managers could possibly fight other managers about seniority level.

Orderliness and Equity are things employees need to strive in the workplace and ensure

the task get done properly. With an orderly work area, the job will have less accidents and the

items being looked for will always be found. Equity will ensure that every employee is being

treated fairly and no favoritism or nepotism is being conducted in the company. These rules are

put into place to ensure employees are being supplied with the proper equipment to complete the

task, and Equity can also be maintained by having employee surveys to review managers work

ethic.

Companies need to have a plan to have a low turnover rate when it comes to employees,

because with a high turnover rate employees don’t get a chance to fully learn the job duties. If

the company is conducting a positive work environment the turnover rate should be low. When

companies have a low rate, the employees should be compensated for be loyal and staying with

the company. Some companies need to use different programs to help keep employees in the

organization such as initiatives. With initiatives it will increase sales and give extra income or

other prizes to employees. When employee satisfaction is high, they will strive to do better in the

work environment.

With all of Henri Fayol’s steps put into play the final step is the goal of every company,

and that’s “Esprit de Corps: Harmony and team spirit across the organization builds morale and

unity.” [ CITATION Unk3 \l 1033 ]. With harmony in the company it will show that everyone’s a

team player. When employees feel a part of the company, they will strive to ensure the company

is being led in the right direction. Conducting weekly meetings can keep employees on a one-

track mind and allow them to ask any questions they might have.
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Another theorist an organization could follow is Elton Mayo and his Human Relations

Theory. Human relations are what every organization needs, because when employees show a

lack of interest in their work or coworkers the productivity could drop. Mayo believes in working

in groups, and this could help with completing task for the organization. Mayo’s research will let

organizations understand why employees continue to work when it comes to being a part of a

team. Work conditions can be low but when everyone gets along the work productivity will

continue. As stated in [ CITATION Ern59 \l 1033 ], “The relationship of rulers or managers as

one to groups rather than to individuals, the need for recognition, security and a sense of

belonging as more important in determining morale than physical conditions of work.”. In some

cases, employees will find a way to work together to complete a task no matter the working

conditions. In the Military there’s a saying that helps soldiers get through the day or any hard

situations, and that’s “False motivation is better than no motivation.”. Everyday soldiers undergo

hard working conditions, but unlike in civilian life they can’t quit and move on they signed up to

complete a term of service whether it be two years or twenty years.

Mayo may have understood the relationship between workers and work conditions, but

he didn’t learn about these relationships following office workers but industrial workers with

hard working conditions. Employers don’t realize that working conditions could drive workers

away but dealing with the wrong crowd at work every day can cause other problems and the

turnover rate will be high. As managers understanding why employees can and can’t handle work

conditions is very important. Managers and employees need to understand each other’s roles and

doing so will have them understanding why working condition are either good or bad.

Some people state that when using Elton Mayo’s Human Relations theory, they should

also incorporate Max Weber’s Bureaucratic theory in the organization. Weber believed in rules
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and order in the organization, and it’s true that companies do need to have rules but also need to

be open to new strategies. Weber uses a metaphor “Iron Cage” that is like the rules everyone has

to follow during their time in an organization. Rules and standards are necessary in organizations

to succeed, but when rules are to strict employees will lose focus on the companies’ goals. For

example, “Bureaucracy is necessary to support progress, but at the same time it is

uninspiring.”[ CITATION Rog16 \l 1033 ]. That’s why a mixer of Weber and Mayo could give

managers and employees a good balance between both. Understanding that rules need to be

followed and that working as a team get workout for everyone.

Every organization needs help when it comes to management or employee improvement,

but a company that could benefit from looking over these theories is Elizondo Mortuary &

Cremation. This company was created in 2006 and has moved locations twice but still manages

to be competition for other similar business’s despite their problems. Reading over some of the

theorist management styles can help them change for the better and continue to be competition in

the future. Some changes the company could use is change in Leadership Styles, Family

Relationships and Work, Discounted/Service Fees, Attendance/Presence, and COVID-19 Safety

Procedures and Regulations.

Communication is key to a business because when everyone is aware of all that needs to

complete the employees can work together. Leadership needs to understand that their

management styles need to change to better help understand employees and any problems the

company might by having. The business being family owned can cause problems both in and out

of the work area. As managers or owners of the business, they need to understand that while at

work family matters should wait till after the workday. The business also hands out discounts to

multiple people, this could be a problem in the long run. With multiple discounts being handed
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out to everyone customers will continue to come, but that’s profit the company is losing.

Discounts should only be offered if the customer is a loyal customer that also refers others to the

business.

The Company has problems with attendance/presence, this could also be a factor of profit

loss. In a family runed business employees believe they can come and go as they please.

Management needs to be the standard and enforce it to their employees that coming to work and

staying during the workday is important. If managers leave when they want the employee moral

will be low and the upselling of the services will also be low. This year has been hard on most

companies with the COVID-19 Disease, companies needed to change the way they normally run

and have new safety standards. The business can’t be like other businesses that can turn people

away for having the disease, because the competitors will gladly accept the business. The

business needs to be aware of the new safety standards from the CDC to ensure employees or

customer don’t spread the disease.

Elton Mayo’s Human Relations theory will help with building trust with teamwork and

ensuring everyone has a voice. There’re times where managers aren’t aware of what needs to be

changed within the company and with the help from employees can work on fixing problems for

the better. Max Weber’s Bureaucratic Theory can be used in this company to set standards for

employees and managers to follow. The company doesn’t have to set it where it feels like an

“Iron Cage”, just strict enough to help the company. Henri Fayol’s Administrative Theory is best

used for new businesses without a plan for employees and managers, but it’s never too late for a

company to check if they are missing a step in their business.

These theorists are helpful to every organization, but the first step is believing that there’s

a problem that needs to be fixed. The steps they offer are to help both the company and
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employees, and changes should be looked at to keep up with the times. Elizondo Mortuary &

Cremation still makes a profit but with the changes noted they could expand and grow further.

Doing business with family is always tricky but if everyone understands the Foundational

Theories, they could work together no matter what problems come forth.
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References

Achinivu Godwin, O. E. (2017). Application of the Henri Fayol Principles of Management in

Startup Organizations. Journal of Business and Management.

Dale, E. (1959). Some Foundations of Organization Theory. California Management Review.

Daniel A. Wren, A. G. (2002). The foundations of Henri Fayol’s administrative theory.

Management Decision.

Smith, R. (2016). Bureaucracy as Innovation. Research Technology Management.

Unknown. (n.d.). Principles of Management.