Managerial Theory in the Online World

The uses of science, managerial skill, and bureaucracy have been used to mold the management process and organizational structure seen in today’s organizations.  Ideologies presented themselves in a diverse set of industries in the 1800s and 1900s are still relevant in today’s technology driven world. To see the theories of Fredrick W. Taylor, Henri Fayol, and Max Weber let’s speak to someone who’s running a technology company in today’s ever-changing environment. Scott K. Curry (pictured left) is the founder and CEO of Scott’s Marketplace.com, an online start-up company focused on providing a platform for consumers to shop local businesses.

 

THE INTERVIEW

1.     According to an historical managerial theorist, there are six qualities that determine managerial ability (physical qualities, mental qualities, moral qualities, general education, special knowledge, and experience). What is your thought on the importance of these?

Scott: The moral authority trumps all. Because if you guided by the principle of morals your treatment of your employees, customers, partners, investors will all be executed in the “right way to do business.” And, you’re meeting, if not exceeding those individuals’ expectations.

What about special knowledge, especially in your industry? 

 

Scott:  I think you hire special knowledge. If there’s a skill that I’m looking for, I will hire someone for that skill. I don’t think that special knowledge determines managerial ability. A lot of business owners and managers is driven by intuition, gut, feel, and by your moral compass.  A special knowledge or special ideal may be the infancy or beginning of a company, but you can’t retain that special knowledge.  You have to transfer that special knowledge to your employees and empower them. One single person cannot hold the special knowledge that enables a company to grow and create riches. It takes a team.

2.     Fayol also “contended that managers of small firms need relatively more technical ability than their counterparts in larger firms…” Does this mindset coincide with your professional experience? (Wren)

Scott: I would argue that in a smaller firm, like mine, a business owner’s technical knowledge needs to be broader and probably have less depth than in a larger company.   

Why?

Scott:  Because in a small firm there are fewer people that need to cover more territory vs. a larger firm that don’t need to cover as much territory. Individuals in a small firm have a larger knowledge base. You need to understand more.  In my company, I’m hiring people to take on two or three responsibilities. I look for people that who have a desire to learn and want to be on the cutting-edge and the status quo is not good enough.

3.     In your company, how hard is it to accomplish a “unity of direction”?  Meaning, “one head and one plan for a group of activities having the same objective”? (Wren)

Scott:  I think it’s very easy. In a smaller organization, your assumption as a business owner is that your team is on the same page. The collaboration should be very short and succinct and you execute on that objective. The intimacy of a smaller company allows for more collaboration and awareness for what you’re doing. In my company, we have clearly identified who our target customer is. So, everything we do is built around our customer needs and solving their problems.  That’s our one direction.

4.     Talk a little about how you, as a manager, encourage employees to put the company ahead of their own interests?

Scott: I always talk about what we’re doing as a team and a team can only succeed if all members of the team are on the same page and working on the same goals. And, working together as a team we all individually succeed.

To follow up, how do you handle employees who do put their interests above the company’s interests?

Scott: They either learn that it’s a team collaborative environment or their no longer with the company. It’s that important to our culture and that’s how we’ll be successful.

5.     As a tech startup, how hard is it to find the right fit for a particular position? And, if determined not to be the right fit, how do you handle that situation?

Scott:  It is very difficult to find the right fit because a lot of what we’re doing and what we need to have done…there’s a very small pool of people that can do it. So, if we’re unable to find those people in the job market ask the employees to become knowledgeable in the area that we need, which contributes to the area of professional growth.

6.      How do you continually strive to improve as a company?

Scott: We have specific measurements that we gauge. Like, customer adoption, social channels, etc. But, there’s also an innate believe that we want to be the best at what we do. And, there’s an innate drive to make that happen, by the employee and by the company.

7.     One of the great historical management theorists suggested the “real potential for increased output was not ‘working harder,’ but ‘working smarter.’” Do you agree with this thought and how do you implement this philosophy in your company?

Scott:  I do believe in that. The way we enable that to happen is by providing a flexible work environment. So employees are allowed to work the hours that ‘they’ are the most productive.

8.     As your company has grown, have you had the need to add bureaucracy or more rules to increase efficiency?

Scott:  Yes, I think it’s inevitable. There’s a balance of trying to create that flexibility and autonomy, but it still has to exist within some sort of defined framework. And it constantly changes and it will always change.

9.     What role does bureaucracy play in your organization?

Scott:  There’s internal and external bureaucracy. From an internal perspective we try to have as little bureaucracy as possible. I firmly that bureaucracy stifles companies. People should be empowered to make decisions.  From an external perspective, it’s your job as a manager to find the resources out there that limit bureaucracy so you can be as productive as you possibly can. It takes time, energy and resources to figure that out. But, I think it should a principle or value to remove bureaucracy, not add to it.

THE ASSESSMENT

After talking with Mr. Curry, it is evident that his managerial philosophy aligns more with that of Henri Fayol and Fredrick W. Taylor.  As a firm believer in teamwork, Mr. Curry relies a great deal on the strengths of his employees and empowers them to utilize their knowledge base to make decision in the best interest of the company. By instilling confidence in his “team,” he is structuring his company for long tenured human capital. Thus, adopting Fayol’s principle of stability of tenure of personnel.

Curry stressed importance of collaboration and team cohesiveness, which aligns itself with Fayol’s unity of direction principle. With a team of nine, coordination is more simplistic than in a larger enterprise. However, the principle still remains true. Curry delivers the main mission of the company to his employees giving them one plan and a platform for organizational structure and coordination.

As a startup, managing cash flow is vital. The company must pool available resources to get the job done.  In some cases, one individual is performing the work of two or three persons. So putting the right people in the right positions is critical.  And, to make the task harder, Curry must use foresight to predict what resources he may need based on the ever-changing technology landscape to stay competitive. These approaches and managerial aptitude is consistent with the Fayol’s order principle and Taylor’s philosophy of business as “a system of human cooperation that will be successful only if all concerned work [is] toward a common goal” (Wren, p. 125).

In speaking with Curry, his company culture breeds the “attitude is everything” mantra. He hires individuals that are not satisfied with the status quo and who will “work smarter, not harder.” This mindset applies to both Fayol and Taylor.  In this type of environment, employees will constantly seek improvements and innovate as they have a “will to achieve”.  Like Taylor, Curry and his employees are the definition of “first-class workers” with their “will to get there.”

Whether it’s internally or externally, Scott’s Marketplace.com is a contrarian to the bureaucratic rigor proposed by Max Weber.  At every turn during the interview Curry is clearly resolute in breaking down the barriers of bureaucracy, not building them.  He does not divide his employees into clearly defined positions and encourages employees to find alternatives to formal rules and controls. His directives are not anarchical, but affirmative in nature to champion efficiency, growth, and performance.

Who would have guessed that the theories created in the coalfields or steel mills almost 100 years ago could be applicable to the fast-paced online world? But, as Mr. Curry of Scott’s Marketplace.com has shown, the principles and theories of Taylor, Fayol, and Weber are alive and working…in cyber space.