When Governments Fail…

This past Monday, Iceland’s coalition government collapsed amid public outcry of the government’s failure to effectively bail out their broken financial system.  Simply put, Iceland did not have deep enough pockets like the US did to provide some sort of recovery program for its banks and other financial institutions.  Although those are some of the more specific reasons as to why this organization failed, upon coming across this story, I was curious to see if I could draw parallels to some of the things we’ve discussed in class…hopefully it’s successful.

Now, I find it very unsettling that while a government fails, organizations (more specifically, corporations), prosper.  This is even more concerning in the case of Iceland, which to date, had the oldest functioning legislature in the world, founded in 930 AD.  So why are large corporations, such as Walmart, seemingly easier to run and maintain than small (democratic) governments? While I acknowledge that these two types of organizations are very different from each other, on the highest level, they share characteristics of functioning rational organizations such as formality and goal specificity.

Right, wrong, or indifferent, maybe there is something that Iceland’s government, (which I’m sure considered itself to be a rational organization with high levels of formality and goal specificity) could learn from the way in which Walmart operates as a rational organization.  I’ll preface this with the fact that I have very little knowledge about Iceland’s former coalition government to begin with, so bear with me.

We learn from Ehrenreich’s Nickel and Dimed that the school of thought that most closely aligns with Walmart’s organizational characteristics is (arguably) that of Taylor’s scientific management.  Although Nickel and Dimed points out that Walmart’s implementation of this system is not without its flaws, it is necessary to point out that during the course of its existence, Walmart has learned how to effectively manage 2,100,000 employees.  To place that number into perspective, the population of Iceland is 304,367…Walmart employs almost SEVEN TIMES the total amount of people who live in Iceland.  Although running an organization successfully under a rational organization system goes far beyond sheer size of the workforce or population, this is an interesting fact to point out.  Maybe, just maybe, Iceland’s new government should try to implement aspects of Taylor’s scientific management, such as closer re-evaluation of the effectiveness of certain institutions and their fiscal feasibility.  Maybe this is just naïveté on my part to think that a government as an organization can implement principles that Taylor intended for industrial improvement, but hey, because their former government failed, maybe they could consider alternative approaches to ensure their government does not collapse again.


WalMart – Industrial Peace?

In true Borat fasion –

WalMart employees are clearly the happiness employees on the planet……NOT!!!!!!!!!!!!!!!!!!!!!!!!

It is more than clear through the picture painted by Barbara Ehrenreich that WalMart employees probably don’t top the charts in employee satisfaction.  They seemed miserable with their wages, mindless tasks, and especially their incompetent managers, like our friend Howard.  If you think that you were surprised at the unhappiness of the WalMart workers in “Nickel and Dimed”, imagine the shock that Frederick Taylor would have felt.

Frederick W. Taylor is the father  of scientific management.  Taylor insisted that you could scientifically analyze all tasks being done in an organization and figure out better or different ways to accomplish those tasks in an effort to realize maximum efficiency.  You could also analyse the skills and talents of an organization’s employees and assign them each to specific tasks according to those talents – again in an effort to maximize efficiency.  Once workeres were all working at maximum efficiency, an era of industrial peace would come over the organization as workers working at maximum efficiency and producing maximum profits would ‘surely’ be paid top wages by their employers.  Now, while WalMart may not be the ‘perfect’ example of this theory, as they surely don’t scientifically analyze their employees talents and assign them to jobs according, but they have certainly simplified job functions enough to allow employees to specialize at a very specific job, that they would then be able to complete extremely efficiently.

Yet, something seems to have gone seriously wrong.  It’s true that the more Barbara worked the more efficiently and quickly she could put away clothes, but as time went on she seemed to become more and more dissatisfied with her job.  Much of Barbara’s, and her fellow employee’s, dissastisfaction seemed to have come from extremely low wages they were getting paid.  If you buy into Taylor’s theory, then the WalMart employees who are certainly working efficiently on their mindless tasks should be making a hefty sum of money in reward for their expertise.  That is absolutely not the case.

Just to put things in perspective…..For the sake of this example let’s say you are a single mother with one child working 40 hours/week at WalMart making minimum wage ($7.25 in PA as of July 2009).  According to the living wage calculator (Living Wage Calculator) in Union County, Pennsylvania (the country Lewisburg is in if you didn’t know) a living wage for one adult and one child is $13.87 – significantly higher than minimum wage.

Now, it’s clear that Taylor’s theory sure isn’t holding true – but why?  My answer – good business sense.  If WalMart can be one of the most profitable and largest corporations in the United States without paying their employees a living wage AND maintaining the amount of employees they need to operate, why on Earth would they pay them any more?  True these workers are working at maximum efficiency and helping to bring in profits for mother WalMart, but WalMart really has n0 incentive to raise salaries.  What can be done about this? You tell me…..

Psychological Theories Tied to Attitudes Within Organizations

The selection we read from Nickel and Dimed sparked an interesting idea in reference to one of my annotated bibliography concepts we received back in class. One of my concepts related to a point that Scott and Davis made in chapter 2 about the influence an organization can have over an individual. They discuss how formalized organizations seem to legitimize certain behaviors, and that “subjects placed in an ambiguous situation were much more likely to accept influence from another when that person was defined as holding a specified organizational position” (Scott and Davis, pg. 39). I have taken a few psychology courses, and this idea is one that psychologists seem to unanimously support. According to social scientists who study this phenomenon, it explains the behavior of individuals in organizations ranging from a group of high school students to members of the KKK. The shock experiment carried out by Stanley Milgram at Yale University is one example of a study that supports this concept. (I know I have yet to make a connection to the Nickel and Dimed reading…I’m getting there.)
A very real life, recent example of this occurred at a little company I interned for this summer…Merrill Lynch. On one hand it was unfortunate to be there during such a tumultuous time, but it was also fascinating to witness first hand the way this psychological phenomenon led to the downfall of a major organization. People became so complacent to hide behind the name of a big company that no one ever bothered to stop and ask “Wait…should we really be supporting the lending of money to people who have showed no evidence that they can EVER pay it back?” High level executives turned a blind eye to corruption, greed, and deceit; all because they felt their actions were protected and legitimized by the comfort of the organization.
To me, it is fascinating to think about how Walmart can be applied to this phenomenon. The way Barbara openly describes the menial, tedious tasks that she finds herself thrown into at Walmart would seem to be a rebellion against the phenomenon. Her mere acknowledgement that the organization she was a part of was trivial to her in some way suggests that we do not always feel legitimized by the presence of authority and organization. However, she did complete the tasks, so does that shoot down my theory of disproval? What are the requirements for behavior that supports what Scott and Davis were referring to: actual beliefs, just the actions, or a combination of both? I make this case with the recognition that Barbara is not representative of all Walmart employees, but that her feelings towards her tasks at her job can absolutely be applied elsewhere.
Although Barbara’s reaction to her tasks at Walmart do reflect some sort of rebellion against authority, they do not do so in a productive, inspirational way. As young adults entering the workforce, we are constantly encouraged to challenge (respectfully and constructively) authority in hopes of bettering the organization with which we become a part. Had she ever made one recommendation for how they might make Walmart a better or more “legitimized” place to work, I would applaud her hesitation to accept the trivial tasks. All she did, however, was criticize the way things were done and indirectly insult essentially everything about the environment of the organization. It is an entertaining read, for sure, but it lacks the inspiration that one might hope to find in a reading that was so centered on what was wrong with an organization.