The Business Book

(Joyce) #1

a brain attached?” Output may have
increased, but so too did conflict
between management and staff.
Working conditions were poor and
businesses ignored the sociological
context of work—productivity
mattered more than people.

Studying people
In the 1920s a new influence on
business thinking emerged—the
Human Relations Movement of
behavioral studies. Through the
work of psychologists Elton Mayo
and Abraham Maslow, businesses
began to recognize the value of
human relations. Workers were no
longer seen as simply “cogs in the
machine,” but as individuals with
unique needs. Managers still
focused on efficiency, but realized
that workers were more productive
when their social and emotional
needs were taken care of. For the
first time, job design, workplace
environments, teamwork,
remuneration, and nonfinancial
benefits were all considered
important to staff motivation.
In the period following World
War II, business practice shifted
again. Wartime innovation had
yielded significant technological
advances that could be applied
to commerce. Managers began to
utilize quantitative analysis, and

were able to make use of computers
to help solve operational problems.
Human relations were not forgotten,
but in management thinking,
measurability returned to the fore.

Global brands
The postwar period saw the
growth of multinationals and
conglomerates—businesses with
multiple and diverse interests
across the globe. The war had made
the world seem smaller, and had
paved the way for the global brand.
These newly emerging global
brands grew as a result of a media
revolution—television, magazines,
and newspapers gave businesses

the means to reach a mass
audience. Businesses had always
used advertising to inform
customers about products and to
persuade them to buy, but mass
media provided the platform for
a new, and much broader, field—
marketing. In the 1940s US
advertising executive Rosser Reeves
promoted the value of a Unique
Selling Proposition. By the 1960s,
marketing methods had shifted
from simply telling customers about
products to listening to what
customers wanted, and adapting
products and services to suit that.
Initially, marketing had its critics.
In the early 1960s hype about the
product became more important
than quality, and customers grew
dissatisfied with empty claims.
This, and competition from
Japanese manufacturers, had
Western companies embracing a
new form of business thinking:
Total Quality Management (TQM)
and Zero Defects management.
Guided by management theorists,
such as W. Edwards Demming and
Philip B. Crosby, quality was seen
as the responsibility of the entire
company, not just those on the
production line. Combining Human
Relations thinking and the
customer-focused approach of
marketing, many companies ❯❯


Entrepreneurship is about
survival, which nurtures
creative thinking. Business
is not financial science, it’s
about trading—buying
and selling.
Anita Roddick
UK entrepreneur (1942–2007)
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