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How to cite this thesis

Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/ M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved from: https://ujdigispace.uj.ac.za (Accessed: Date).

DIFFERING PERCEPTIONS OF PARTICIPATIVE MANAGEMENT BETWEEN DIFFERING LEVELS OF MANAGEMENT

AT MAKRO SOUTH AFRICA

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136A18 115F

BY

THIERRY PAUL FUCHSLOCH

DISSERTATION

SUBMITTED FOR THE PARTIAL REQUIREMENTS

FOR THE DEGREE

M.COM (BUSINESS MANAGEMENT)

IN THE FACULTY OF

ECONOMIC AND MANAGEMENT SCIENCES

AT

RAND AFRIKAANS UNIVERSITY

STUDY LEADER: PROF. S.G. GOUS

NOVEMBER 1989

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DIFFERING PERCEPTIONS OF PARTICIPATIVE MANAGEMENT BETWEEN DIFFERING LEVELS OF MANAGEMENT

AT MAKRO SOUTH AFRICA

BY

THIERRY PAUL FUCHSLOCH

DISSERTATION

SUBMITTED FOR THE PARTIAL REQUIREMENTS

FOR THE DEGREE

M.COM (BUSINESS MANAGEMENT)

IN THE FACULTY OF

ECONOMIC AND MANAGEMENT SCIENCES

AT

RAND AFRIKAANS UNIVERSITY

STUDY LEADER: PROF. S.G. GOUS

NOVEMBER 1989

11,1. 11E 1,11If, MI1 11,1,11i E 1111, E

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Participative management has been hailed as the strategic choice

to overcoming problems at the workplace. It has become a

buzzword for management in the 1980s, and yet has not become

entrenched far enough in South Africa to say that participative

management practice is, and has been a success.

The 1980s have been witness to major Industrial relations

/developments, which have been not only unprecedented, but also a

'/considerable test on South African managers. In a lot of cases - _

participative management is seen as the medicine for overcoming

poor worker relations at the work place, and furthermore as the

management tool for improving productivity.

The primary emphasis of this report was on researching whether

differences exist in perceptions of participative management,

between differing management levels at Makro South Africa.

Differences in perceptions of participative management would

quite clearly determine the success of any such programme, or

style, implemented.

From the research it has become quite clear that differences do

exist in the understanding, and perception of participative

management between differing management levels at Makro. These

differences were not only evident in the broad definition of

participative management, but also to specific ideas on what

participative management is.

From the study it also became apparent that there were differing

perceptions as regards management's commitment to participative

management within the company, and whether or not the climate

within Makro would be conducive to a participative management

style.

Finally, it was quite clear from the study that Participative

management is vaguely understood, and possibly seen as more than

it actually is; a management style and not some sort of

management tool which when implemented will bring harmony at the

work place with improved productivity.

-iv-

KNIOLAJL_

The author- wishes to acknowledge the assistance of:

Employees at Makro who participated in the

study.

Professor S.G. Gous for his guidance throughout

the dissertation.

-v-

EEE ID I C.:: 1- I (:) NJ

To my parents who have provided me with the opportunities I have

had in my life.

To Kerstin who provided the moral support, and typing expertise

for this dissertation.

-vi

F:E3 0 F DES

CHAPTER ONE - INTRODUCTION

1.1 STATEMENT OF THE PROBLEM 1

1.2 RESEARCH LIMITATIONS 4

1.3 OBJECT OF THE STUDY 5

1.4 DEFINITION OF PERCEPTION 5

1.5 PROCEDURE TO BE FOLLOWED 5

1.6 PLAN OF THE STUDY 6

CHAPTER TWO - LITERATURE STUDY

2.1 WORKER PARTICIPATION - SOME CONSIDERATIONS

2.1.1 EVOLUTION OF MANAGEMENT --

2.1.2 AN HISTORICAL PERSPECTIVE ON PARTICIPATION -- 12

2.1.3 WORKER PARTICIPATION - CURRENT ATTITUDES --

2.1.4 THE TRADE UNION AS A PLAYER -- 21

2.2 HISTORY OF INDUSTRIAL RELATIONS IN SOUTH AFRICA -- 25

2.3 THE LABOUR RELATIONS SYSTEM AFTER 1981 AND ITS

USE 28

2.4 CURRENT INDUSTRIAL RELATIONS PRACTICES AND HOW

THEY AFFECT PARTICIPATION 29

2.4.1 INDUSTRIAL COUNCILS 32

2.4.2 CONCILIATION BOARDS 35

2.4.3 MEDIATION 36

2.4.4 ARBITRATION 36

2.4.5 THE INDUSTRIAL COURT 37

2.4.6 UNFAIR LABOUR PRACTICES 38

2.4.7 STATUS QUO ORDERS 39

2.5 QUALITY CIRCLES 39

2.5.1 APPLICATION IN SOUTH AFRICA 41

2.6 WORKER PARTICIPATION IN YUGOSLAVIA 45

2.6.1 THE ROLE OF THE TRADE UNIONS 48

2.7 WORKER PARTICIPATION IN WEST GERMANY 49

2.7.1 PRINCIPLES OF CODETERMINATION 50

2.7.2 UNION INFLUENCE 51

2.8 PRODUCTIVITY RELATED TO PARTICIPATIVE

MANAGEMENT 53

CHAPTER THREE - RESEARCH METHODOLOGY

3.1 SAMPLE SELECTION 60

3.2 METHOD 60

3.3 SAMPLE SIZE 60

3.4 QUESTIONNAIRE DESIGN 60

3.5 LIMITATIONS 62

3.6 TESTING THE QUESTIONNAIRE 63

CHAPTER FOUR - MAKRO SOUTH AFRICA

4.1 HISTORY OF MAKRO IN SOUTH AFRICA 64

4.2 HUMAN RESOURCES PRACTICE AT MAKRO 65

4.3 UNION INVOLVEMENT DESIRED BY MAKRO 66

CHAPTER FIVE - ANALYSIS OF THE QUESTIONNAIRE AND PRESENTATION

OF RESEARCH RESULTS

5.1 SECTION 1 RESPONDENT DETAILS

5.2 SECTION 2 PERCEPTIONS AS TO THE DEFINITION

OF PARTICIPATIVE MANAGEMENT

5.3 PERCEPTIONS OF HOW PROFIT IS RELATED TO

PARTICIPATIVE MANAGEMENT

5.4 PERCEPTION OF HOW POWER IS RELATED TO

PARTICIPATIVE MANAGEMENT

67

83

87

5.5 VIEWS AND ATTITUDES OF PARTICIPATIVE MANAGEMENT

PRACTICE WITHIN MAKRO -- 92

5.6 VIEW OF THE TRADE UNION AND SHOP STEWARDS BODY

AS PARTICIPANTS IN PARTICIPATIVE MANAGEMENT

PRACTICE -- 101

5.7 VIEWS ON THE EFFECT OF PARTICIPATIVE MANAGEMENT

ON WORKER MOTIVATION -- 105

5.8 PERCEPTION OF THE RIGHTS OF EMPLOYEES RELATED

TO PARTICIPATIVE MANAGEMENT -- 107

5.9 UNDERSTANDING OF TRAINING RELATED TO

PARTICIPATIVE MANAGEMENT PRACTICE -- 111

CHAPTER SIX - CONCLUSION

6.1 CONCLUDING REMARKS ON THE RESEARCH 113

6.2 RECOMMENDATIONS TO MAKRO 118

REFERENCES

120

APPENDIX 1 QUESTIONNAIRE

126

APPENDIX 2 LETTER TO RESPONDENTS 135

L IE3 -T- C=3 F=7 -T- Pi 1E3 L__ FEE E3

17 CODETERMINATION AND PARTICIPATION

INDUSTRIAL RELATIONS SYSTEM BEFORE 1979 25

INDUSTRIAL RELATIONS SYSTEM AFTER 1979 27

BASIC DIFFERENCES BETWEEN JAPANESE AND

WESTERN EMPLOYEE BACKGROUNDS AND RELATIONS

WITH MANAGEMENT

42

FIGURE

FIGURE

FIGURE

FIGURE

FIGURE

FIGURE

1_ I B T- CI) F=7 F I C3 Li FR E...=

-- 70

-- 70

-- 71

-- 71

-- 72

-- 72

1

2

3

4

5

6

HOME LANGUAGE - TOP MANAGEMENT

HOME LANGUAGE - MIDDLE MANAGEMENT

HOME LANGUAGE - SUPERVISORY MANAGEMENT

HOME LANGUAGE - TOTAL SAMPLE

SEXUAL COMPOSITION - SUPERVISORY MANAGEMENT

SEXUAL COMPOSITION - TOTAL SAMPLE

FIGURE 7 AGE GROUPS - TOP MANAGEMENT -- 73

FIGURE 8 AGE GROUPS - MIDDLE MANAGEMENT -- 73

FIGURE 9 AGE GROUPS - SUPERVISORY MANAGEMENT -- 74

FIGURE 10 AGE GROUPS - TOTAL SAMPLE -- 74

FIGURE 11 RACE SUPERVISORY MANAGEMENT -- 75

FIGURE 12 RACE TOTAL SAMPLE -- 75

FIGURE 13 HIGHEST EDUCATIONAL LEVEL - TOP MANAGEMENT -- 76

FIGURE 14 HIGHEST EDUCATIONAL LEVEL - MIDDLE MANAGEM8NT -- 76

FIGURE 15 HIGHEST EDUCATIONAL LEVEL - SUPERVISORY MANAGEMENT -- 77

FIGURE 16 HIGHEST EDUCATIONAL LEVEL - TOTAL SAMPLE -- 77

FIGURE 17 LENGTH OF SERVICE - TOP MANAGEMENT -- 78

FIGURE 18 LENGTH OF SERVICE - MIDDLE MANAGEMENT -- 79

FIGURE 19 LENGTH OF SERVICE - SUPERVISORY MANAGEMENT -- 79

FIGURE 20 LENGTH OF SERVICE - TOTAL SAMPLE -- 79

FIGURE 21 PERCEPTION OF PARTICIPATIVE MANAGEMENT -- 82

FIGURE 22 PROFIT AGAINST PEOPLE -- 85

FIGURE 23 SHARING OF PROFITS -- 86

FIGURE 24 POWER AT THE WORKPLACE -- 90

FIGURE 25 POWER VERSUS POLITICAL RIGHTS -- 91

FIGURE 26 TOP MANAGEMENT COMMITTED TO PARTICIPATIVE MANAGEMENT -- 97

FIGURE 27 IS COMMITMENT NECESSARY -- 98

FIGURE 28 MANAGEMENT STYLE FAVORABLE -- 99

FIGURE 29 COMMITTED YES OR NO - 100

FIGURE 30 PARTICIPATION FOR WHOM - 103

FIGURE 31 UNION AND MANAGEMENT MAKE DECISIONS - 104

FIGURE 32 PARTICIPATION ALLOWS FOR MOTIVATED EMPLOYEES -- 106

FIGURE 33 EMPLOYEES DECIDING ON COMPANY OBJECTIVES -- 108

FIGURE 34 THREATENED TO LOSE YOUR JOB -- 109

FIGURE 35 TRAINING NECESSARY TO PERFORM -- 112

-1--

C F) -T- EEE FR ED r\J EEE --- I NJ -T- FR CE) ID L_J CE3 -T- I CD NJ

1.1 STATEMENT OF THE PROBLEM

Productivity in the 1940s and 1950s meant volume output - the

more the firm could produce the higher its productivity. In the

high demand years of the 1960s and 1970s productivity meant

efficient operations at lower cost. And now, in the 1980s the

terms productivity and quality are used as complementary

concepts to guide the overall improvement efforts of the

organisation. (Landel, 1986:1-3). The question posed by

management today is how do we lower costs and increase product

quality through the unique creative energies of the human

resources. As Raymond Ackerman (1982:20), says "productivity is

trying to do things more efficiently, getting motivated people

to achieve company goals with a feeling of dedication for what

they're doing"

Money plays a very important role and there is no question, the

flexing of muscles of the unions is forcing management to really

sit up and say "hey, am I really paying enough?" (Ackerman,

1982:20)

Managers in South Africa today must realize that the limits on

human collaboration in the organizational setting are not limits / of human nature, but of management ingenuity discovering how to

realize the potential of its human resource. If employees are

lazy, unwilling, indifferent, to take responsibility,

uncreative, or uncooperative, the cause lies with management's

view of the potential of the workers.

-2-

Managers truly believe that he or she is accomplishing just

about all that can be accomplished with the resources that are

available. It's only natural, therefore, that when pressed for

greater output, that most managers will call for better

equipment, new or improved systems, or new or better people.

Yet many senior executives who have provided these requested

investments have been frustrated and dissatisfied. Despite all

inputs, the expected results do not occur. The reason is that a

fundamental point is being overlooked: with rare exceptions,

significant performance improvements cannot be generated by

making an investment in new equipment, new systems, and or new

people. Such improvements require the highest order of

managerial action to process what's available. The answer lies

in managing productivity by way of introducing the management

methods and disciplines to sustain performance improvement.

Although participative management has become a buzzword for

management in the 1980s it has not entrenched itself far enough

yet for us in South Africa to say that participative management

practice is and has been implemented with success. With

increasing costs driven by rampant inflation, political pressure

and sanctions, coupled with increasing labour-union pressure

many organisations have looked toward participative management

practice. South Africa remains, however, a novice at this "new"

management intervention.

-3--

The problems associated with introducing participative

management technology was that some people dismissed it by

saying "That Japanese idea won't work here because our people

aren't sufficiently educated, trained, sophisticated etc,

etc...." (Evans, 1986:9). Clearly there are significant social

and cultural differences between Western and Japanese lives and

it is crucial for South African managers to take cognizance of

them. One cannot plug overseas participative management models

"voetstoots" into the South African Organisation and be sure

that it will bring productivity as well as employee satisfaction

(8ocker and Overgaard, 1983:17).

An understanding of differing perceptions of what participative

management is, and what it means to different people at

differing levels of the organisation, is crucial to the

implementation of any such system. Without a clear

understanding of these differing perceptions organisations have

no clear directive as to what form of participative management

to use and secondly , how to implement it with success.

-4--

1.2 RESEARCH LIMITATIONS

It would be impossible to determine perceptions of participative

management throughout the entire Industry, in a study of this

nature and size, and consequently this study will concentrate on

determining perceptions of:

Top Management - Categories A - E at Makro

Middle Management - Categories F - J at Makro

Supervisory Management - Categories K - L at Makro

In the wholesale Industry, and more specifically at one of the

leading wholesale Companies in South Africa namely Makro (South

Africa)

Random sampling will be used to draw a sample of the population,

which will ensure that each member of the population has an

equal chance of being selected.

1.3 OBJECT OF THE STUDY

The object of this study is to determine whether or not

perceptions differ between the management levels (as defined) at

Makro, and if so, to what degree these differences will

influence the implementation of a participative management

system and culture.

Within this broad objective a closer examination will be made of

specific factors that contribute to differing perceptions of

participative management between said levels of management.

1.4 DEFINITION OF PERCEPTION

For the purposes of this study "perception" will be defined as:

"Knowledge acquired through the senses, and cognition of fact or

truth by the activity of thinking. Any insight or intuitive

judgement of fact or truth".

1.5 PROCEDURE TO BE FOLLOWED

The study will follow the sequence tabled below:

1) Literature Study A literature study will be

undertaken to: a) Discuss and compare current

ideas of participative management.

b) Consider the role of Industrial

relations in participative management.

c) Consider participative

management in other countries.

-6-

2) Empirical Study - A questionnaire will then be

distributed to the management levels, already

mentioned, to gather the necessary data so as to

provide information regarding perceptions of

participative management.

Questionnaires will be distributed as follows:

Top Management 16

Middle Management 19

Supervisory Management - 18

1.6 PLAN OF THE STUDY

CHAPTER ONE - INTRODUCTION

This chapter will be an introduction to the dissertation stating

the problem and forwarding the object of the study.

CHAPTER TWO - LITERATURE STUDY

This chapter will be the literature study of the dissertation

and look specifically at:

The history of management.

What participative management is all about.

The effect of organised labour on

participative management.

Participative management in other countries.

Productivity related to participative

management.

-7-

CHAPTER THREE - RESEARCH METHODOLOGY

This chapter will highlight the questionnaire in terms of how it

was designed and what aspects of participative management it

will be questioning.

CHAPTER FOUR - MAKRO SOUTH AFRICA

This chapter will present a brief synopsis of Makro South

Africa.

CHAPTER FIVE - RESEARCH RESULTS

This chapter will present the results of the analysis of the

questionnaire.

5) CHAPTER SIX - CONCLUSION AND RECOMMENDATIONS

This chapter will present the conclusions of the study.

-8-

G fa F.. 1- — L_ I -1- I- FR AY Li F=2 U D sse'

2.1 WORKER PARTICIPATION - SOME CONSIDERATIONS

2.1.1 Evolution of management

The combined efforts or energy will always be greater than the

separate parts. This is one of the premises upon which

production is built. Today's organisation is a dynamic one,

where the modern manager operates in a dynamic system with

rapidly changing technologies in an increasingly complex

environment. The development of organizational practice is

strongly influenced by these forces.

The evolution of values are also critical in the development of

management thought. Capitalism has evolved, and transformed

itself over time, which has been significantly affected by

changing sociocultural values. A number of historians consider

the changes in religious values and attitudes as an important

basis for the development of the capitalist ethic.

By the mid 1770s Capitalism was well entrenched in Europe. Adam

Smith with his publication in 1776 of "An enquiry into the

nature and causes of the wealth of nations" dominated economic'

thought (kast & Rosenzweig, 1985:29.)

Charles Darwin's concept of the survival of the fittest

propagated that the most capable and resourceful people would

rise to the top of the social hierarchy. It was only natural

that there would be rich and poor classes, and any attempt to

upset this hierarchical order was considered unnatural and

against the best interests of society. (Kast & Rosenzweig, 1985:

15)

-9-

Social Darwinism provided the basic ideology for the

practitioner in the late 19th century and justified the

accumulation of resources and their use for self-interest.

There were those who dissented this Ideology. The most famous

Karl Marx who wrote the Communist Manifesto with Frederick

Engels in 1848, and Das Kapital in 1867. They saw the

Capitalist system as a threat to the social culture and

recommended revolutionary remedies.

Today in the 20th Century, the Capitalist ethic continues to be

acceptable practice, throughout the Western World. In the

1980s, however, there has been concern over continuing reliance

on a laissez faire philosophy and market forces to determine

industrial structure, and economic well being.

Decline in the rate of productivity improvement , high

inflation, severe recession, and high levels of unemployment, in

South Africa, have led to increasing questioning as regards the

effectiveness of a working Capitalist ethic.

There have automatically been significant changes in the

Capitalist Ideology and in societies view the legitimate role of

the manager and the corporation. Heil Broner (Kast &

Rosenzweig, 1985:44) summarises this change "in the concept of

new Capitalism, distinguished by its sense of professional

responsibility, characterised by large-scale technological

units, imbued with a concern for human values, and aware of the

legitimacy of labour and Government as centers of economic

powers, we have an expression, however incomplete, of what

capitalism means that is markedly different from what it meant

to the late nineteenth - or early twentieth - century big

businessmen and considerably different from the lingering

conservative depiction today." (Kast & Rosenzweig, 1985:44)

-1 0-

Today's employee

With the legitimacy of labour we have witnessed

the human resource assuming rights and wants within the

organisation.

Employees today want:

A successful, dynamic, growth oriented business.

A normative culture.

Fair rewards (extrinsic) linked top performance and

contribution.

Ability to contribute and develop to full potential.

Recognition and feeling of personal value / worth.

Quality leadership.

Perceived equal opportunity and equity / fairness.

A clear and meaningful purpose / vision / course.

In South Africa management is generally autocratic in style and

assumptions such as these listed below are made:

Work is inherently distasteful to most people.

Most people are not ambitious, have little desire

for responsibility and must be and prefer to be

directed.

Most people have little capacity for creativity in

solving problems.

Motivation occurs only at the physiological and

safety levels.

Most people must be closely controlled and often

coerced to achieve organizational goals and

objectives. (Coetzee, 1988:1)

In many organisations, formal structured lines of communication

have been the main focus. Too much reliance on content or

loutdated methods and packages which do not apply or fit well

enough into South Africa's requirements is another cause for our

problems.

' Llrthermore, vast amounts of money are being spent by

inexperienced managers, while it can safely be said that human

resource departments are not strong enough.

-12-

In recent times where much emphasis is placed on inter-group

relations and communications, it is often found that lip service

is paid to the bridging of cultural and racial differences.

Changing conditions and circumstances are frequently glossed

over and their effects ignored.

Business leaders and professional consultants should be much

more involved in the change process and to facilitate training

and development. Creativity and problem solving abilities have

been sadly lacking within organisations which has also inhibited

the possibilities of more participative styles of management to

infiltrate the South African Organisation.

2.1.2 An historical perspective on participation

The notion of employee participation has since the early

Twentieth Century received its initial stimulus from the

writings and empirical studies of Frederick Taylor and Elton

Mayo (Roethlisberger and Dickson, 1939:160.)

The Scientific Management approach of Taylor tended to regard

the needs of workers as primarily economic and that only the

physical or mechanical aspects of work were important. Taylor

believed that output of the average worker could be improved

through study and analysis. He made time and motion studies

popular and introduced piece work to reward productive workers.

Although scientific in his approach Taylor received criticism

for his allegedly oversimplified or non scientific approach to

the role of the human element in management. Taylor believed

that workers were generally idle and that only economic

incentives and coercion would make them productive.

-13-

The Hawthorne Studies are regarded as the pioneering work from

which the human relations approach to management developed. The

primary findings of the experiments (in which thirteen variables

including the effects of illumination, length of working day and

length of rest pauses were considered) conducted in the Western

Electric Company were that variables such as style of

supervision and the social pressures from informal work groups

used to gain compliance to group norms, were important factors

influencing work output.

The Hawthorne studies provided scientific verification for the

changing view of many students of industrial organisations in

that the human element was regarded as part of the organisation

over and above capital and machinery.

The studies led to new approach to the study of management.

Management became defined as getting work done through others.

Management training began to concentrate on motivation,

leadership styles, informal groups, job enrichment,

communication, conflict, and resistance to change.

Leadership Studies conducted by Social Scientists have since the

1930s focussed on the differences between the leadership styles,

and have tended to advocate the benefits of participative

leadership styles.

-14-

In 1945 the Ohio State Leadership studies, using a leader

behaviour description questionnaire, analyzed leadership in

numerous types of groups and situations, including Air Force

Commandos, teachers and manufacturing foremen. (Stogdill and

Coons, 1957:1-3)

The Michagan Studies of leadership styles found that supervisors

of high-producing sections at the Prudential Insurance Company,

New Jersey, were significantly more likely to give general

rather than close supervision to their employees and were more

employee-orientated than production-oriented.. (Likert in

katz, Maccoby and Morse (eds.), 1950:62)

Douglas Mcgregor's theory X and theory Y added further impetus

to the human relations movement by differentiating between

theory X or authoritarian type of management (with its negative

assumptions about man's inherent dislike of work, 'requiring him

to be coerced to achieve organisational objectives - a notion

similar to the Taylorian Scientific view and theory Y, which

holds that man seeks responsibility and that work is as natural

as play or rest (McGregor, 1960:33-34).

The more recent Managerial approach of Blake and Mouton

similarly distinguishes between a concern for production, theory

X, and a concern for people, theory Y. (Hersey and Blanchard,

1977:97-100) In the Managerial grid five different types of

leadership are located in four quadrants similar to those

identified by the Ohio State studies. The model is based upon

concern for people on the one axis, and concern for production

on the other. The high concern for both production and concern

for people is considered as an ideal form of participative

management. Excessive concern for either people or production

is seen as an ineffective managerial orientation.

-15-

Many behavioural scientists emphasise the value of more

democratic, less authoritarian, less hierarchically structured

organisations than proposed by traditional protagonists

including Taylor. The manager of the organisation of today, has

become more involved in the management of people, taking

cognizance of the needs of the employee.

2.1.3 Worker participation - current attitudes

The principle underlying worker participation is that the people

who will be affected by decisions should be involved in making

these decisions (Kachelhoffer, 1979:39 ) As such, participation

is linked to the concept of industrial democracy. Whether or

not participation does in practice contribute towards industrial

democracy depends on the nature and degree of worker involvement

in decision making ie. how much involvement does the worker 2

actually have in that decision making exercise?

It is useful to distinguish between consultation, on the one

hand, and co-determination on the other when trying to clarify

what participation means.

Consultation (normally joint consultation) involves an attempt

to influence decision making. In a consultative system, the

responsibility for all decision making remains with management.

A more comprehensive definition is offered by Hovels and Nas,

(1977:119) where joint consultation is defined as, "The

independent formulation of problems concerning any aspect of

management policy by elected members on behalf of workers and

from the point of view of the employees, its discussion with top

management and the attempt to influence top management policy on

such a basis".

Consultation is generally regarded as a weak form of

participation and some writers do not regard it as a form of

participation at all. (Poole, 1978:76)

The main principle of co-determination is that workers enjoy

actual control over and authority for certain decisions (Poole,

1978:79). Bendix, (1978:6) provides a concise view on

co-determination in that "it implies a range of co-decision

rights and makes a decision of the employer dependent on the

consent and approval of employees". As with consultation ,

co-determination may take place on different levels - shop

floor, board, industry, etc. The scope of co-determination may

vary, in terms of the range and activities within which

participation occurs, or in terms of the kinds of decisions that

workers may be involved in. One must distinguish for example,

decision making about aims, goals and ends, from decision making

about means. One would expect under co-determination workers

having decision making powers in matters such as personnel

policy and practices (hiring, firing, redundancies ),

remuneration and working conditions, welfare and socio-economic

issues (health, safety, pension) and so on.

As far as rights that workers enjoy under co-determination are

concerned , they are certainly far stronger than rights under

consultation.

Another distinction that is necessary to make is that of direct

and indirect participation. Direct participation would be

participation of workers in shop-floor, job related decisions,

and indirect participation, through Trade Union representatives.

0

A

0

-17-

HIGH CO-DETERMINATION

DIRECT PARTICIPATION

HIGH CO-DETERMINATION

INDIRECT PARTICIPATION

LOW CO-DETERMINATION

DIRECT PARTICIPATION

LOW CO-DETERMINATION

INDIRECT PARTICIPATION

PARTICIPATION

TABLE 1

The table indicates these two concepts quite well, indicating

that parties to the participative process may elect between

co-determination or consultation irrespective of whether direct

or indirect participation is preferred.

-18-

To make a choice between what form of participation parties will

elect will be preempted by the question "What are the effects of

participation?" Perhaps the question of participation should

be viewed not in terms of its potential threats but rather in

terms of its effects on workers, managers, and the

organisation. Conclusive evidence on participation's effect in

South Africa is meagre however and making a choice of the form

of participation to employ is therefore difficult.

It is often assumed that participation in decision making

implies greater control by workers over aspects of their working

lives and an augmentation of their power vis a vis management.

As Mulder and Wilke, (1970:2) put it, participation has been

assumed to reduce power differences in organisations, and has

been regarded as a form of power equalisation. Power

equalisation is defined as "a process of reduction in the power

differential between people....on two levels in the formal power

hierarchy" (Mulder and Wilke, 1970:22).

Mulder and Wilke, (Mulder and Wilke, 1970:23) have questioned

the assumption that participation reduces the power differences

between workers and managers in that it leads to power

equalisation. In a number of experiments he has shown the

contr'ary takes place - participation leads to power distance

between the two parties. He ascribes the reason for this as

participation seldom involving interaction among equals. The

parties usually involved are unequal in many respects. Firstly

there is a difference in the functions that said parties perform

within the organisation. Those at the higher levels of the

formal authority structure tend to have more information at

their disposal, and more knowledge, than those at the lower

levels, on issues relating to the organisation, financial

resources, the relation between production and technology and so

on. They are therefore in a better position to make decisions

affecting the organisation, and furthermore to justify such

dectsions.

-19-

Mulder and Wilke, (Mulder and Wilke, 1970:29) make

reference to expert power (knowledge information expertise)

which managers, rather than workers have at their disposal.

This expert power, according to Mulder, is potential influence

which through interaction with others may be turned into

effective influence.

Greater participation then, rather than bringing about power

equalisation, enables the ones with more expert power to

increase their effective influence over the participants,

according to Mulder and Wilke. (Mulder and Wilke, 1970:35)

Another factor, not quite as well developed, in Mulder and

Wilkes work, is the difference in motivation. Effective

participation, requires_ strong motivation on the part of both

management and workers. Low motivation, which could be linked

to lack of self confidence, reinforces expert power, and makes

the less powerful more susceptible to being influenced by the

more powerful.

This then is the danger of consultative schemes, that they

depend on the holders of formal power (that is management) for

participation to take place. Therefore if workers have no

formal power it is unlikely that effective participation will be

possible.. An additional danger lies in the mere "appearance of

participation". Im such a situation worker representatives are

satisfied with their councils or committees, because of their

involvement in these. They may claim to be able to influence

decisions, and that they are 'equal partners' with management,

while in fact management remains the sole decision maker and no

real participation takes place (Hovels and Nas, 1977:130)

According to Douwes Dekker (Douwes Dekker, 1973:12) most

managers perceive power to be a fixed sum. That is, any gain on

the part of the workers is experienced as a loss. Management

will then set up pseudo-participation systems to regain control.

(Douwes Dekker, 1973:12)

-20-

However, if power can be shown, through experience, to be an

expandable commodity, the union will not be perceived as a

threat. - A critical distinction to clarify the nature of

worker's participation in decision making is between direct and

indirect participation. In direct participation the emphasis

falls on interaction between the individual worker and his

supervisor, as well as co workers as a means to influence the

way work is carried out. This form ranges from suggestion

schemes to Job enrichment programmes and autonomous work groups

such as quality circles. The latter represents the most

commonly accepted meaning of the labour relations approach to

Industrial Relations. This form of participation is

interaction through a Joint union management body.

The indirect system of workers participation requires ground

rules to govern the interaction and to facilitate the

empowerment of the union and its representatives to ensure the

implications of distance inherent in the hierarchical structure

is narrowed and a near power balance achieved.

Throughout Western society, managers often tend to view

participation as an interference of political ideology in

running the business. Hethy and Mako in their study of workers

participation in Hungarian factories, argue that participation

is a tool by which to strengthen the co-operation of people.

(Hethy and Mako, 1977:1-4)

Hethy and Mako, (1977:4) concluded that the lower level (plant)

and short range (operational) decisions come closer to and more

directly concern the workers' interests than higher level

(company) and long range (strategic) decisions. In other words

the influence of workers and representative bodies decrease as

one moves from short-term to long-term decisions. Decision

making, according to Hethy and Mako, (1977:4) consists of

several phases including problem identification, problem

-21-

analysis, formulating alternative strategies for its solution

choosing

the most

appropriate alternative, actioning the

decision and finally, reviewing. Furthermore Hethy and Mako,

(1977:5)

argue that direct participation tends to occur in

some, but not all the phases of decision making.

An important facet of the decision making variable is the

worker's willingness and ability to participate. This

propensity to participate appears to be dependent on several

factors, particularly the workers assessment of the costs and

benefits of participation. Inevitably worker participation

implies not only participation in management decisions, but also

a share of managerial rights, tasks and responsibilities. (Hethy

and Mako, 1977:1-4)

2.1.4 The trade union as a player

In July 1984 Unisa's School of Business Leadership released the

results of the first phase of Project Free Enterprise. Based on

the data gathered from 3723 questionnaires submitted to the

personnel of 7e of South Africa's leading organisations, these

results identified critical issues for management.

The most important perceptions of the workforce with the most

alarming implications for Business in terms of improving

quality, productivity and employee commitment were:

Businesses are funded from limitless resources of

capital provided largely by banks and government.

Revenues and profits are largely used for management

bonuses and salaries and for government taxes.

-22-

There is little or no understanding of the need for

productivity and for an organisation to generate its

on capital.

Sources for providing increased wages for workers

are seen as paying whites less, increasing product

prices and obtaining loans. -

There is consensus from all levels of the workforce,

including management, that increasing prices is the

most effective way of creating revenue for wage

increases.

Business is seen as being exploitative,

discriminatory and as profiting only (white)

management.

These perceptions are an important contributor to an already

poor quality and productivity record in South Africa. An

important consideration is that quality and productivity

improvement, is effectively nullified by these worker

perceptions. (Executive overview, Project free enterprise

1987:4)

Essentially both quality and productivity are irrelevant to

workers who feel that they do not participate in, or benefit

from, the business system.

The micro analysis enabled the project to determine the

perception of management regarding the major issues that need to

be addressed by the Business sector. The priorities from which

the ultimate four major priorities were formulated were:

1. Management commitment.

2. Participative systems ie. systems such as

quality circles and briefing groups.

-23-

3 Interface management. Managing problems at the

interface level. ie . where management - generally

white, and the workforce - generally black, asian

or coloured, meet.

Monetary reward. ie . increased incentives for

improved performance.

Black advancement.

The business sector's efforts to address the strategic

priorities at the micro level are generally in an early,

exploratory and immature phase of development. The phase is

typically characterised by the search for clear-cut goals,

initial errors in implementation, wastage and a feeling of

crisis. However, constructive action usually achieves quick

results in this phase.

The research revealed that management considered that they had

already laid much of the groundwork for developing the strategic

action plans identified. Nonetheless, the following findings

make it clear that there is much more practical and goal

orientated work to be done.

There is a large discrepancy between the

perceptions of management and workers as to how

much has in fact been achieved.

Management tends to be satisfied with broad,

generic statements of intent, rather than

implementing specific action steps.

Management pays lip service to some important

issues, eq. Black advancement and incentives.

Top and senior management intentions are not

properly communicated down the line or are

disbelieved.

-24--

Some of the basic findings of the study are tabled below. They

are tabled in no specific order of importance.

The exclusion of workers from meaningful participation

undermines the very essence of organisational survival -

quality, productivity and growth.

The most effective means of gaining understanding and

commitment to the process of business, as well as ensuring

personal development, is the encouragement of worker

participation.

The major priority in ensuring that participative systems

work within an organisation is to ensure that they are

viewed and practised as a total philosophy of management.

Management is generally still guilty of totalitarian and

autocratic styles of management that negate or prevent any

meaningful participation by workers in basic processes such

as performance improvement, productivity enhancement, and

decision-making.

Knowledge, awareness and insight are crucial to

participation. The dissemination of information is thus a

key issue in maintaining participative systems.

Much of the success of participative systems depends upon

employees understanding of why a company needs to make

profits in the first place.

It should be noted that participative systems were at no stage

viewed as being participation by workers at the highest levels

of management for the purposes of the study. It was

realistically described as managerial ability and intent to

involve workers in the day to day activities which they need to

perform in order to ensure the efficient and on-going running of

the organisation. (Executive overview, Project free enterprise,

19E17:5-8)

-25-

2.2 HISTORY OF INDUSTRIAL RELATIONS IN SOUTH AFRICA

Before 1979

Before the Wiehahn investigation there were two major laws

controlling I.R. in South Africa. The Industrial Conciliation

Act covered White, Asian, and Coloured workers, whereas the

Black Labour Relations Regulations Act covered Black workers.

INDUSTRIAL BLACK LABOUR I

CONCILIATION I RELATIONS

ACT REGULATIONS ACTI

I I I 'MINISTER OF!

I LABOUR I

1 1

1

NATIONAL INDUSTRIAL'

COUNCIL

1 MINISTER OF I

LABOUR

I I

1 1 1 1 1 IWAGE AGREEMENTS ETC. I I CENTRAL I I

A 1 IBLACK LABOUR'

I BOARD I

1 'TRADE UNION!

I EMPLOYER I / 1 I N

I FEDERATION' IEMPLOYEESkI COMPANY

I I I I LIASON OR A

WORKS

I COMMITTEE

I WHITES I I EMPLOYERS I

I COLOUREDS I

I ASIANS I

T I I BLACKS I

TABLE 2

(TINS ITEMS, 1988:2)

A.

A

-2-

As you can see from this diagram, Whites, Coloureds, and Asians,

under the Industrial Conciliation Act, could belong to a trade

union of their choice. This trade union would represent these

employees when negotiating with employers who belong to the

Employer Federation. This whole system was under the Industrial

Council system with the Minister of labour being the highest

authority.

Blacks however were not covered under the Industrial

Conciliation Act and were not allowed to belong to a registered

trade union. This was not very fair as Blacks make up 70 % of

the South African labour force and they also wanted recognised

union membership. Because Blacks were not covered under the

Industrial Conciliation Act, there was another law called the

Black Labour Relations Regulations Act which was only for

Blacks. (Natrass, 1984:35)

This act allowed Blacks to form either Liaison or Works

Committees, which were seen by the Government as a replacement

for unions. These committees would negotiate with the employer

on all matters and were controlled by the Central Black Labour

Board. These committees however did not really work well as

they were a very poor replacement for proper trade unions.

Trade Unions get their strength from their membership and

independence from the employer, and the liaison/works committees

did not have 'members and were also not independent from

employers and management. Professor Nic Wiehahn recognised the

weakness of the committee system, and he proposed that both the

Industrial Conciliation Act and the Black Labour Relations

Regulation Act be done away with and combined into one law which

would be for all racial groups. (Natrass, 1984:27-28)

-27-

AFTER 1979

I LABOUR RELATIONS ACT I

f 1 I TRADE I I EMPLOYERS I

<.. > I I UNIONS I !FEDERATION !

I I I

!

IEMPLOYEESI IEMPLOYERSI IEMPLOYEESI !EMPLOYERS!

1 1 ! 1 ! I 1 i

White

Asian

White Asian

Black

Coloured

Black Coloured

TABLE 3

(TINS ITEMS, 1988:3)

The new Labour Relations Act came into being in 1981 to replace

the previous two laws. This new act applied to all racial

groups and allows all employees the right to belong to an

external body (trade union), and to be represented by an

internal Works Council within the company which will deal with

smaller areas of dispute. A revised Bill was put before

Parliament in August 1988 and certain amendments suggested by

the National Manpower Commission were adopted in early 1989.

INDUSTRIALI I WORKS I

I COUNCIL I COUNCIL I

A

An

-2B-

So we can see that the Labour Relations Act is the most

important labour law in South Africa today. It grants the right

to all employees, regardless of race, to belong to a trade union

if they choose. The basic purpose of this act is to provide for

the negotiation and settlement of disputes on labour issues

within South Africa.

2.3 THE LABOUR RELATIONS SYSTEM AFTER 1981, AND ITS USE

The Labour Relations Act, or as it was called until the August

1981 amendments, the Industrial Conciliation Act, is the

cornerstone of the South African system of labour relations,

because it provides, through the medium of industrial councils,

the forum within which employer representatives, and employee

representatives can come together to negotiate binding

agreements on wages and conditions of service, enforceable in

terms of South Africa's industrial legislation. In addition,

the Act provides for the registration and regulation of

employer's organisations, trade unions and federations of trade

unions, as well as for mediation, conciliation and arbitration

machinery to settle -disputes which may arise between employers

and employees.

-29-

2.4 CURRENT INDUSTRIAL RELATIONS PRACTICES AND HOW THEY

AFFECT PARTICIPATION

If we tried to give a definition of Industrial Relations we

would say that it has to do with the relationship between an

employer and his employees, which is influe'nced by rules,

guidelines, procedures and laws. The field of I.R. covers many

topics including:

The relationship between trade union and company.

The negotiations between management of a company and

either a trade union or some other employees' body such

as a works council or workers committee.

The situation of strikes by employees or lockouts by

employers (the employer "locks" his employees out of

the work place and decides not to let them work).

The method in which grievance and discipline

situations are handled.

The whole set of laws covering labour setting out:

minimum wages, minimum leave conditions, hours of work.

The law is also vital in setting out the relationship between

employer and employees. In the past 80 years the Government has

passed many laws which have to do with people at work. These

laws cover wages, safety, sick leave, hours of work and many

other subjects. The single most important law in the Industrial

Relations scenario is the LABOUR RELATIONS ACT which governs the

activities of companies and trade unions.

-30-

Among the various forms of participation, some already

mentioned, collective bargaining is the most widespread and the

most generally acceptable in both Industrialised and developing

countries. (Cordova, 1982:195)

Although it is usually carried out by representatives, it may

also involve individual workers in the preparation of the list

of demands, the appointment of negotiators and the ratification

of agreements. Collective bargaining is also a highly flexible

and functional process capable of evolving and adapting to the

most different circumstances.

Most countries havp approached worker's participation from more

than one angle and it has manifested itself in many forms. One

can however consider four forms of participative management as

common practice in most Western countries:

Participation at shop floor level.

Works councils.

Collective bargaining.

Representation on company boards.

The systems of self-governance in industry by means of

collective bargaining between employers and employees has

operated for a number of years in South Africa. The success of

the system, however depends on the voluntary association of

employers and employees into organisations competent to

represent their member's interests.

-31-

Not any trade union or employers organisation can gain

registration under the Act. This is an important factor since

registration confers certain benefits upon the organisation, not

the least of which is the right to become a party to an

industrial council, and thereby negotiate agreements which can

be made binding in law, with criminal sanctions for

contravention.

In order for a trade union or employer's organisation to become

registered, proof has to be furnished to the Industrial

Registrar that the organisation is sufficiently representative

of the interests it seeks to represent, and the organisation

will be registered for the areas and interests in which it is

sufficiently representative.

No union will be registered unless the Registrar is satisfied

that:

The requirements set out in the Act concerning registration

have been complied with;

The constitution of the union is consistent with the Act,

and does not contain provisions which are contrary to the

provisions of any law, or are calculated to hinder the

attainment of the objectives of any law, or are unreason-

able in relation to the members of the public; and

The union has not been formed for the purpose of evading

the provisions of any law, and is not affiliated to any ,

political party. (People and Profits, Dec 1981:15 -16)

-32-

Neither trade unions nor employers' organisations are, however

required by law to become registered, and unregistered trade

unions are therefore not illegal. Unregistered unions have to

however comply to a large degree with the rules and regulations

which apply to registered unions. These rules and regulations

are the following:

The union must furnish the Registrar with a copy of its

constitution, its head office address and the names of

its office bearers and officials.

It must keep proper registers and books of account;

It must notify the Registrar of any changes of con-

stitution;

Its officials may not vote at meetings of its executive

committee;

It is prohibited from affiliating to a political party;

(Peoples and Profits, Dec 1981:15 - 16)

2.4.1 Industrial Councils

An industrial council is a forum within which registered trade

unions and employers meet and bargain in order to formulate an

agreement over conditions of employment.

An industrial council is set up voluntarily by the parties

concerned and, provided the requirements of the Act are complied

with, the council will be registered.

-33-

In all cases the employer and the trade unions parties have an

equal number of votes on the council. Some councils consist of

five or six trade unions and dozens of employer organisations

while others are made up of only one union and one employer.

Some industrial councils have jurisdiction over the entire

country in respect of a particular industry while others have

jurisdiction over only a particular area of the country. It is,

therefore, possible to have several industrial councils for the

clothing industry but by the same token, to have only one for

the engineering industry. This also does not mean that there

could not be several industrial councils for the engineering

industry, if the interested parties concerned decided that they

wanted more than one industrial council. An industrial council

can have its area of jurisdiction extended if there is proof

that the members of the council are sufficiently representative

in the new area.

Industrial councils are financed from small levies paid by

workers and the employers, which pay for the administration of

the council. The primary function of an industrial council is

to maintain industrial peace. It must therefore try to prevent

and settle disputes by the negotiation of agreements. An

industrial council agreement may include provisions covering a

large number of matters listed in the Act. Generally these

agreements include provisions relating to wages, hours of work,

overtime, holiday bonus, fringe benefits, and any other matters

affecting the remuneration or other conditions of employment of

all classes of employees. (Tims Items, No. 1:4)

Industrial council agreements are submitted to the Minister of

Manpower and if gazetted they then become law, and are binding

upon all employers and the employees covered by the jurisdiction

of the council. (Tims Items, No. 1:5)

-34-

It is the function of an industrial council to settle any

disputes arising between employers and employees subject to its

jurisdiction. The constitution of the council will make

provision for the procedure for dealing with such disputes.

The industrial council has a duty to settle disputes between

employers or employers' organisations and employees or trade

unions who are within its registered scope of jurisdiction, even

though they may not necessarily be parties to the council.

The usual practice in an industrial council constitution for

dealing with disputes is to provide for a "cooling off" period

in the event of a deadlock. The council would then hold at

least three further meetings in an attempt to settle the

dispute, with no more than two meetings being held on any one

day. The "cooling off" period would thus last at the very

minimum two days, but could well extend over several weeks or

months. (People and Profits, Dec 1981:17)

If the parties to the dispute are, however, unable to settle,

they may (if they agree to do so) apply to the Minister of

Manpower for the appointment of a mediator or they may decide to

refer the dispute to arbitration. Some industrial councils have

constitutional provisions whereby it is compulsory for

unresolved disputes to be referred to arbitration. (Tims Items

No. 1:5)

If an industrial council is unable to resolve a dispute

concerning an unfair labour practice within 30 days (or any such

further period as the Minister may fix), the dispute must be

referred to the industrial court for determination. (People and

Profits, Dec 1981:18)

-35-

2.4.2 Conciliation Boards

A conciliation board is an ad hoc body consisting of an equal

number of employer and employee representatives. Where no

industrial council exists, a conciliation board may be set up by

the Minister to resolve a particular dispute. -When the board

has completed its task it is discharged. An unregistered trade

union or employers' organisation, representative of the

employers or employees concerned, and which has complied with

various provisions of the Act (such as submitting a copy of its

constitution to the Industrial Registrar), may also apply for

the establishment of a conciliation board. The minister of

Manpower makes the agreements between the parties to a

conciliation board binding, by publishing the agreement in a

Government Gazette. The agreements remain binding for a period

fixed by the Minister (Tims Items, No. 1:5) Failure by the

conciliation board to settle a dispute can open the door to a

legal strike after the correct procedures have been followed.

The parties to the dispute may, however, choose to refer the

dispute to either mediation or arbitration. If a conciliation

board fails to settle a dispute concerning an unfair labour

practice, the matter must be referred to the industrial court

(People and Profits, Dec 1981:17)

-36-

2.4.3 Mediation

An industrial council or conciliation board may request the

Minister to appoint a mediator to assist in settling the

dispute. A mediator is a go-between to effect an agreement

between the two parties. In doing this the mediator has to rely

on persuasion: he has no powers of compulsion and he cannot

impose an agreement upon the parties.

2.4.4 Arbitration

An industrial council or a conciliation board may voluntarily

decide to refer a dispute to arbitration. In the case of a

prescribed essential service, however, arbitration is

compulsory. In addition, some industrial councils provide for

compulsory arbitration in their constitutions. The findings by

the arbitrators in either voluntary or compulsory arbitration,

if these take the form of an award, are binding upon both the

employer and employee parties who were party to the original

dispute, and who are members of the organisations which

instituted arbitration proceedings (Tims Items, No. 1:6)

-37--

2.4.5 The Industrial Court

The industrial court was established by the Labour Relations

Amendment Act of 1979, to replace the former industrial

tribunal, but with considerably extended powers. Further

provisions regarding the composition and function of the court

were made in the Labour Relations Amendment Act of 1980. The

court has jurisdiction in all the provinces of the Republic, and

can conduct a sitting at any place. It has no fixed programmes

of sessions and can sit as frequently as it deems necessary.

(People and Profits, Dec 1981:18)

The functions of the court are:

To decide on issues of conflicts of interest and rights;

To determine whether a labour practice in a specific

instance is unfair or not. Thereby the court will set

precedents which will serve as guidelines for subsequent

cases;

To enquire into and report back on any matters referred to

it by the Minister of Manpower regarding the objects of the

Labour Relations Act; (People and Profits, Dec 1981:18)

-38-

2.4.f Unfair Labour Practices

The concept of unfair labour practices was introduced in the

1979 amendments to the Act. In further amendments made in 1980,

an unfair labour practice is now defined as:

(a) any labour practice or any change in any labour practice,

other than a strike or a lockout which has or may have the

effect that:

any employee or class of employee is or may be unfairly

affected, or their employment opportunities, work

security or physical, economic, moral or social welfare

is or may be prejudiced or jeopardised thereby;

the business of any employer or class of employers is or

may be unfairly affected or disrupted thereby;

labour unrest is or may be created or promoted thereby;

the relationship between employer and employee is or may

be detrimentally affected thereby; or

(b) any other labour practice or any other change in any

labour practice which has or may have an effect which

is similar or related to any effect mentioned in paragraph

(a). (People and Profits, Dec 1981:18)

-39-

2.4.7 Status Quo Orders

Status quo orders are covered in Section 43 of the Act.

Sometimes the settlement of a dispute can be a lengthy process,

causing considerable difficulties to the parties. However, if a

dispute concerns the termination of, or suspension from,

employment of employees, a change in conditions of employment or

an alleged unfair practice, a party can apply to the industrial

court for a status quo order. If granted the status quo order

will compel the party concerned to restore the situation of

conditions which prevailed prior to the outbreak of the dispute.

2.5 QUALITY CIRCLES

Quality Circles have their roots in the concept of improved

motivation through employee participation in the decision-making

process. The Hawthorne experiments in the late 1920s and early

1930s and subsequent studies in America and Japan during the

1940s led to the realization that management should be concerned

with using the companies most important resource, its workforce,

and in so doing capturing the creative and innovative power that

lies within the workforce. (Aft, 1983:356).

-40--

Quality Circles defined by Dessler (Dessler, 1983:93) as a

"Group of 5 to 10 specially trained employees who meet for an

hour once a week for the purpose of spotting and solving

problems in their work area", were then introduced in Japan in

1962. Since its introduction in the West during the early 1970s

the progress of the Quality Circle movement has been relatively

slow. One of the major reasons for such sluggish , performance

has been lack of relevant information, disinterest by management

as a result of bias, preoccupation with cliche thinking as well

as poor management education (Bendix & Rocker, 1982:5).

Quality Circles is a special philosophy and organisations and

management must develop special management skills and attitudes,

before they can be implemented with success. The use of Quality

Circles has to grow out of management's long-term commitment to

increase quality and productivity, and managements realization

that his efforts will require tapping the creative'potential of

every employee. Quality Circles promote a people oriented

management style that respects the intelligence of employees

with the capacity to absorb training and motivation and to use

them constructively, a style that listens to employees

recommendations and recognizes achievements in a personal way

(Evans, 1986:10)

Quite clearly then a productive organisation results from a

participative, quality-focussed, and caring organisation.

Furthermore it is a merging of motivated, trained and involved

people, with the proper quantity and quality of materials,

efficient and effective methods, and the appropriate application

of advanced technology. Within the South African scenario, a

case of economic survival for many organisations, especially

with the pressure of sanctions and in other cases world-wide

competition it is time for our entrepreneurs and leaders to go

back to the drawing board.

-41--

2.5.1 Application In South Africa

Quality Circles arrived on the South African scene some five

years ago. The reception they received were somewhat mixed.

Some dismissed them by saying "That Japanese idea won't work

here because our people aren't sufficiently educated, trained,

sophisticated etc, etc ..." (Evans, 1986:9). That was a nice

and easy way out because it meant that they didn't have to do

anything. The organisation with a vision in South Africa

however, seized upon the concept, and through trial and error

application managed to improve quality and productivity even in

a deteriorating economic climate. This was possible through

ignoring common belief that Quality Circles are, secrets, a

magical new wisdom.

Alien and exotic, management interventions (Bocker and

Overgaard, 1983:17). Their method was through researching the

subject fully, and adapting the approach to their own particular

environment and circumstances, instead of plugging the overseas

mode "Voetstoots" into the system.

Clearly there are significant socio-cultural differences between

western and Japanese industrial lives and it is crucial for

South African managers to take cognizance of them.

-42- BASIC DIFFERENCES BETWEEN JAPANESE AND WESTERN EMPLOYEE

BACKGROUNDS AND RELATIONS WITH MANAGEMENT

JAPAN

WESTERN COUNTRIES

Homogeneous culture in a small country with almost no natural resources.

Deeply ingrained sense of hierarchy, place and obedience to authority.

Prevalence of an ethic of conservation resulting in creating much from little

Guaranteed lifetime employ-ment for most workers.

High work ethic, fast rising productivity.

Extensive pre and post em-ployment orientation pro-grams.

Emphasis is on quality .

B. Distinction between labour and management less impor-tant, because excessive "top-to-bottom" cross trai-ning, job exchanging and career development planning are the norm, closing the gap between management and labour.

9. Decision reached through consensus and participation.

10.QC programs are perceived as natural extensions of training and education.

11.Eagerly seeking workers suggestions.

12.Believing in capacity for responsibility of workers, who seek challenges and exercises self-direction and self-control.

Usually not so homogeneous in larger countries with more resources, particu-larly in the case of the US.

More individu'alistic atti-tude.

Attitudes and habits of wasting, illusions of "abundance".

No such guarantees.

Lower work ethic with sagging productivity.

Very little or no orien-tation.

Emphasis is on cost.

Great distinction between management and labour, little or no employee training and development, therefore managers are more likely to see them-selves as elite corps of decision makers.

Decisions made by relying on"orders from authority" mostly excluding indivi-dual creative thinking.

QC programs are a "new technique" viewed with scepticism and suspicion.

Restricting input of ideas from floor level.

Believing in lack of re-sponsibility, initiative and creativity or workers who "strongly need outer direction".

(BENDIX AND OVERGAARD, 1993:18) TABLE 4

-43--

All too often Western World Quality Circles have been

implemented in isolation. This is probably the major reason

that they have not, in general been as successful as those in

the Far Eastern Countries. Western managers undertake

pilgrimages to Japan in an effort to find out why they were

losing International market share, to their Eastern competitors.

Quality Circles were seen as the magic potion when in fact they

were only part of a total approach to productivity and quality

improvement. In Japan they refer to total quality control or

company wide quality control (CWQC) as opposed to simply Quality

Circles. As John Riddle, (Riddle, 1986:12) General manager of

steel operations at Iscor points out "While Quality Circles are

extremely valuable, they should never be seen as a magic wand

that can be waved to improve financial results on the bottom

line, or a magic tool which will instantly create a productive,

motivated work-force"

Another problem with implementing Quality Circles in South

Africa, as a panacea for all its work life, is that management

have tunnel vision with the concept. Eastman Kodak Chairman,

Fallon (quoted by Rocker and Overgaard, 1983:17) points this out

with the statement "You can't drive a good work force 30 %

harder, but we have found that we could often work 30 or 50 or

even 150 per cent smarter".

International expert Jeff Beardsley (quoted by Daniel, 1983:107)

points out four rules that must be adhered to when dealing with

Quality Circles.

Specific

Conditional

Measurable

Accountable

-44-

Starting Quality Circles means changing organisational be-

haviour and it is therefore crucial that organisations write

down as specifically as possible, and in a way that can be

communicated to others, what their objectives are for Quality

Circles.

Be as specific as you can about your conditions, expectations

and actions, all must be geared to promote commitment, moti-

vation, trust, openness, co-operation and communication.

Management must address the question: What are the limits ?

What is going to happen in this situation ?

The Quality Circles process has the potential of becoming one

of the most viable and effective management processes. But

if progress toward the specifics of rule 1. is not measured,

no one will know what changes are required.

Rules 1, 2, and 3 are pre-requisites for rule 4.

In other words the specificity demanded of rule 1. and the

parameters required of rule 2. will mean little without the

responsibility of rule 3. and the involvement of rule 4. Start

at the top or as high as you can get, teach them how to do it,

teach them how to get involved, teach them how to measure

themselves and to give feedback on how the process is working,

and teach them how to hold themselves accountable for managing

their people (Daniel, 1983:107-111)

-45-

2.6 WORKER PARTICIPATION IN YUGOSLAVIA

Yugoslavia's scheme for worker self-management is the most

comprehensive one operating to date. Unlike Soviet Russia,

Yugoslavia has attempted to introduce self-management based on

Marxist theory before the completion of economic development.

Since the 1950s enterprise level participation has formed the

basis of the entire socio-political system. They have regarded

it as imperative to begin the introduction of works

participation well before the completion of economic

development, in order to nurture the requisite skills and habits

of responsible decision making.

First introduced at the enterprise level in 1950 worker self

management and its associated procedures and structures have

gradually been built up as the foundation of the entire Yugoslav

socio-political system. Codified in the 1974 Federal

constitution and the November 1976 law on associated labour

(Miller, 1978:264)

The first step in operationalising the concept of worker

self-management was the promulgation of the Basic Law on the

Management of State Economic Enterprises in 1950. This laid the

main foundation for the present system administration in

Yugoslav factories. The principal organs established by the Act

were: the workers' council; the management board and the

enterprise director. In each workplace a workers' council,

elected by the entire work force, was to be given overall

responsibility for policy and the general economic activity of

the plant. The workers' council - consisting of between 15 and

120 members, depending on the size of the establishment - in

turn was to elect its own management board of 3 - 11 members to

carry out policy and settle a number of personnel and economic

-46-

matters. The Director was to be elected from the ranks of the

management board and he was to be responsible for the day-to-day

administration of policies which stemmed from the decisions of

the workers' council. However, the original configuration of

workers' self-management gave very little real power to the

workers' council. For example, it had no control over the

distribution of enterprise income. The management board has

some measure of authority, for example, in the selection of

second-level managerial and technical appointments, but the

Director remained the de facto boss of the enterprise with

virtually uninhibited power over working conditions and business

operations. Most importantly, he retained a veto over all

decisions of the other two bodies.

During the two decades which followed the introduction of the

original law many important formal changes were introduced -

some by government fear and the concept of worker

self-management underwent substantial elaboration in the

mid-70s. Very early in the 50s it was realised that as long as

a command-planning system was in force - with its detailed

specification of production, wage and, investment targets for the

indiviudal enterprise - there would be little scope for genuine

worker participation in decision-making. Two changes in

particular should be noted. Direct participation came to the

fore as a supplement to the representative system and greater

autonomy was granted to individual plants than was conceded by

initial legislation. Thus, in an attempt to promote workers'

involvement in decision-making, workers' councils were extended

to middle level management and in 1961 the so called "economic

units" were spawned in an effort to ensure greater freedom of

decision on the shop floor.

At the macro-economic level, economists and politicians alike

realised that worker self-management could have meaning only if

-47-

the workers in an enterprise were made responsible for decisions

which genuinely affected the fortunes of the enterprise and

their on personal livelihood. This would mean the abandonment

of tight central planning and State budgetary tutelage - in

short the establishment of some form of market relations in the

economy (Anglo American Corporation, Occasional Paper, 1984:3)

One of the fundamental goals of the Yugoslav self-management

systems, based on social ownership of the means of production,

is to abolish exploitation (in the capitalist sense) by giving

the workers control over the distribution of "surplus value"

they have created and by rewarding them according to the

value-creating work they have done. Workers are to have a say

in the disposition of investment capital created by their

respective enterprises. A problem regarding participation here

has been the tendency for capital to "leak away" and accumulate

in the banks and various state investment agencies either as

repayments for past loans and credits or as taxes and

assessments of enterprise income where it is disposed of by

"technocratic-managerial" forces beyond the influence of the

worker self-management system. As far as income distribution

policy is concerned there has been, on the one hand, a

substantial increase in the share of enterprise income left at

the disposal of self-management organs while, on the other hand,

there is increasing pressure on these organs to see that

decisions on the structure of distribution of enterprise

earnings are in line with the goals of higher authorities (Anglo

American Corporation, Occasional Paper, 1984:5)

-48-

2.é..1 The Role Of The Trade Unions

The need for trade unions in the Yugoslav system has been a

matter of some debate among Yugoslav officials and scholars ever

since the introduction of meaningful self-management. In a

system where workers or their delegates themselves make the main

decisions on employment policy, wage levels and working

conditions, it has sometimes been argued, the trade unions have

no role to play. In assessing this debate, one has to keep in

mind the chequered history of trade union activities in the

Soviet model which the Yugoslays had initially endeavoured to

follow. Soviet-type trade unions had characteristically

operated as an arm of the state bureaucracy with the primary

function of raising worker productivity and mobilising the

labour force for greater sacrifice. When strikes first began to

appear in Yugoslavia in the late 1950s, the trade unions were

usually found on the "bosses'" side of the barricades, but this

relationship has begun to change.

At the present stage of development of worker self-managment the

trade unions continue to perform the functions of an agent of

governmental policy. As noted, the trade unions' role is built

into the system at various strategic points; to recapitulate, in

the preselection of nominees for management organs and in the

nomination of candidates for workers' council and workers'

control organs, in the initiation and guidance of self-managment

agreements on wage rates and income distribution, in the

provision of backup support to workers' control organs in

locating and eliminating operational shortcommings

197B:166)

-49-

2.7 WORKER PARTICIPATION IN WEST GERMANY

The German labour relations system is known for its strong

worker influence, which pervades all levels of business in the

form of codetermination. The worker influence is precisely

defined and structured, affecting all levels of business, from

the Board of Directors to the assembly line workers. The word

codetermination itself indicates some sort of equality; a

balance between the worker representatives and management.

Employee rights guaranteed by German federal law provide a basis

for equal negotiation strength between worker representatives

and employers. Codetermination guarantees worker

representatives three various types of rights:

right to specific information

right of consultation

approval rights in specific matters

Which codetermination rights are applied under what conditions,

is defined by law. Some examples of the right to specific

information include profit and loss statements, investment

plans, head-count and personnel planning, product planning,

sales figures and planned office area remodeling.

The consultation right is more far reaching than the right to

specific information in that it allows worker representatives to

present suggestions and alternatives. These suggestions or

alternatives must be heard by management but they need not

necessarily be accepted. However, management must get approval

from worker representatives in some matters, such as hiring,

firing and the training of employees. These rights, which are

provided for the employee by virtue of the Works Constitution

Act, assure the employee a right to partly codetermine certain

aspects of the employment relationship. The framework in which

-50-

these various levels of interaction occur, and the interaction

itself, is clearly defined and resulted in German labour law.

2.7.1 Principles Of Codetermination

The adversary approach, which is the cornerstone of the American

labour-management system, is not the foundation block upon which

the codetermination system is built. The German system is a

multifaceted system without equal in the industrial relations

area. On the other hand, the Japanese have developed their

worker influence system within the day-to-day business

activities on all levels. This is referred to as quality

circles, where the employee is provided with an opportunity to

voice his opinion. The Japanese quality circle is not at all

similar to the German system, in which the workers' sphere of

influence is defined by codetermination. The Japanese structure

does not assume the worker is an equal, nor is it a system whose

historical basis is solidly anchored in federal legislation.

To be effective, top management in Germany must deal efficiently

with worker representatives at supervisory board meetings. The

most important function of a supervisory board is to audit the

board of directors. - The board of directors is required under

corporate law to regularly report (at least four times a year)

to the supervisory board as to the company's financial status

(e.g. profit-loss, sales, inventory, new products). The board

of directors is elected by the supervisory board. The

supervisory board is also responsible for an orderly change in

the board of directors' personnel.

When a company has more than DM 20 million in assets, then under

German corporate law the number of supervisory board members

shall be 21. One-third of these members are elected directly by

-51-

the employees. The remaining two-thirds are elected by the

general assembly. The general assembly is comprised of members

elected by the stockholders. Practically, its only function is

to elect supervisory board members. A smoothly operating board

of directors, together with a content supervisory board, has a

direct effect on the quality of the product and the efficiency

of manpower utilization. Work slow-downs, strikes, walkouts do

not exist in Germany. The stability of management and worker

representatives indirectly affects sales, stability in meeting

delivery dates, better quality and increased worker morale.

(Falk, 1902:198).

2.7.2 Union Influence

Although the German unions do not have direct control over the

works councils, they do exert influence over them.

Communication between the unions and the works councils is an

ongoing process. The unions set long-term goals: provide

information on what has been negotiated by other works councils:

provide some job-oriented training: and provide political, legal

and minor financial support.

In addition to works council members, union representatives are

chosen from among the employees to directly represent the

interests of the union within the factory. (In addition to any

other irregular activities which may arise.) In at least one

automobile company, the union representatives have attained a

verbal agreement with management for monthly meetings during

working hours, lasting approximately one hour. However, it must

be noted that the works councils are an autonomous entity, with

respect to the unions.

-52-

In order to attain results at the negotiating table, works

councils often utilize the powers provided under German law.

This power manifests itself in direct and indirect avenues which

are products of the officially promulgated law. The strongest

long-term influence that the works council possesses is over

matters concerning personnel (hiring, firing, transfer). All of

these activities must be approved by the works council. These

are considered collective rights of the works council, which

must be viewed together with those rights provided for the

individual employee under the Works Constitution Act (Falk,

1982:202)

Another powerful right which the works council has is the right

to obtain financial information from the companies, so the

general economic situation of the company can be determined.

The works council's foremost interest is in ascertaining the

economic effect on employees. The Works Constitution Act

mandates that an economic committee be formed comprising works

council appointees and management appointees. The employer must

inform this committee about its economic situation. The law

specifically assures that information about the following five

will be provided:

methods of manufacture and work

the product program

economic situation of the company

production and marketing situation

other circumstances materially affecting the

interests of the employees of the concern

-53-

This quite extensive list provides the works council with the

ability to attain insight into the economic status of the

company. Information that is so obtained must be kept strictly

confidential when the information can negatively affect the

capacity of the concern to compete with others. The company is

obligated to provide information only if this can be done

without risk to the trade secrets of the the company (Falk,

1982:203).

2.8 PRODUCTIVITY RELATED TO PARTICIPATIVE MANAGEMENT

Real productivity improvement in the South African context is

dependent on a variety of factors, many of which are applicable

across the board, others applying to a particular company or

organisation.

Goals should be expressed in realistic criteria followed

by feedback as regards general as well as specific matters.

Participation, at all levels, in terms of decision

making, is important.

Continued pressure, as to achieving organisational

objectives, must be exercised.

As far as these factors are concerned, two pre-requisites are

necessary.

The executive must be committed and dedicated to whatever

objectives have been identified.

Subordinates must have an extraordinary high level of

commitment to keep on responding in a manner that will

actually indicate progress in respect of productivity

improvement. (Van Den Bergh, Sept 1988:6).

-54-

In many organisations managers who are asked to improve their

performance respond with "What's wrong? Aren't we doing a good

job?" Generally, in such organisations, the call for

significant improvement is the signal of something amiss, a

crisis. In fact to make significant and lasting improvement in

productivity, an organisation must strive constantly,

perpetually, for excellence. In such a culture, performance

•improvement is not a fluctuating activity, turned on and off.

It is a central, continuing, and ubiquitous character of company

management.

Seven factors will make the difference between a successful

organisation and one that performs satisfactorily.

Communicate the expectation that constant

improvement is the overriding responsibility for each

manager. The foundation for constant improvement is a

managerial climate in which even- managers who have done

outstandingly well never feel "we have arrived".

Instead, the planning and execution of significant

improvements always occupy a significant share of time

and attention.

Develop the expectation that existing resources must

be fully exploited before seeking additional resources.

Since most managers are not getting the best of what is

available to them, there is plenty that can be done to

get greater returns. Before looking to "more",

managers need to ask: What can we do to get more from

the human and physical resources that we're already

paying for? How can we do a better job of managing

improvement?

-55-

3. Integrate improvement into the regular management

processes. To become long lasting, the management of

improvement must be built into the day-by-day,

week-by-week organisation mechanisms.

4. Integrate performance improvement and management

development. Instead of sending managers off for

training, hoping that they can apply their newfound

skills to getting something accomplished, the

performance improvement process itself can be designed

to develop management's most important skills and

abilities.

5. Create a high performance culture by:

Communicating your expectations for constant

improvement.

Emphasizing better exploitation of current

resources.

Focusing on a few key goals.

6. Provide management methods and disciplines to

sustain improvement by:

Maintaining continued leadership by top

management

Making appropriate help available to key, .

accountable department heads and managers.

Introducing new methods and technology

gradually.

7. Get started on short-term, low-risk, success

projects. (Bobbie & Schaffer, August 1982:25).

-56-

Productivity is often enhanced where people work smarter.

Ultimately, productivity improvement does not mean that fewer

people produce more. A more successful company will have more

work to do and is likely to employ more people. There are of

course, also other ways to make a company more successful.

One can obtain capital at more favourable rates.. One can buy

more efficient machines. One can increase production capacity

or improve the quality or quantity of the physical input

materials.

All these efforts, however, will only increase productivity

marginally, if one neglects labour productivity. One can

describe labour productivity in terms of efficiency and

effectiveness. When an employee is efficient, he/she is doing

things the right way, when an employee is effective he/she is

doing the right things.

Examples of doing things the right way, are carrying out tasks

correctly, doing more than the average or standard, rendering

outputs of a high quality or quantity and restricting wastage

and interruptions.

Doing the right things could refer to increased commitment to

company goals, the development of a positive attitude towards

oneself, the work group and the company, and contributing to

innovative change in the company.

While there is no doubt that companies often pay a great deal of

attention to the efficiency of individuals, their effectiveness

may receive less attention.

This may well be why productivity improvement programmes often

receive a negative response from employees: they see the

-57-

programmes as focussing only on their outputs (doing things

right) and not also on their participation in setting company

goals, in evaluating why goals are too easy/too difficult to

meet, in measuring individual and group work satisfaction and in

creatively improving work processes (doing the right things).

The key factors in dealing with these dimensions of labour

productivity are supervisory and managerial emphasis and

leadership style.

Mature supervisors and managers are willing to share

decision-making with subordinates, because they believe that

employees on the lower levels of the company's status-authority

hierarchy, can contribute to the success of the company.

Less mature line management only strives to have technically

competent and efficient subordinates. We should 'have a closer

look at managerial emphasis and leade'rship style and how they

contribute to organisational climate (Van Wyk, September

1988:18).

In South Africa what ought to be our greatest asset - our

multi-coloured multi-cultured tapestry of people is deemed to be

our greatest problem, our greatest liability.

The differences between us are not seen as advantages but as

reasons to create political boundaries and fences between us.

The similarities are used to create groups with boundaries

around us and power structures to protect these "laagers". Far,

far too many people are living what Thoreau describes as lives

of "quiet desperation". What on earth are we doing wrong and

what is it that the four finalists in the competition have done

right?

-58-

There is a major issue which is worth discussing, that of a

self-created leadership crisis.

In any society or natural group of people about 15 per cent are

achievers and the other 85 per cent conformers. The achiever

wants to lead, perform, excel, make money, do things differently

and make his on individual mark upon the world. He thrives in

a merit society, a free enterprise society and dreams of what

the world or his society will be like when it reaches the

destination he has planned for it. He is a natural leader.

The conformer is a natural follower. He values consistency,

conformity, justice and fairness, seeks security and safety and

happily settles for second place. He is essentially socialistic

and favours a status society.

The tragedy of South Africa is that whites have assumed that the

15/85 per cent rule of thumb applies but on the basis that all

the whites are achievers and all the blacks are conformers or

sheep.

The cost of this awful error has been disastrous.

On the other hand we have amongst the whites a cadre of

outstanding achievers and leaders, which explains why South

Africa, until recently at least, had an international standing

in many fields of human endeavour far more impressive than a

small young country would normally expect to have.

But the other 85 per cent of the whites who have been thrust

into the achiever role are over-promoted, have no followers

amongst the blacks they are expected to lead and are under very

serious threat and therefore stress.

-59-

Hence the high rates of social insecurity and all the

consequences thereof. For the non-whites the impact is equally

serious particularly for the 15 per cent who are natural

leaders. Denied easy access to the institutions which they

would normally dominate - legitimate politics, business, the

church, the universities, they have no alternative but to seek

power and opportunity where they can find it -_Jegitimate or

not. And their's is surely a life of deep frustration and anger

(Hall, 1986:5-6).

f'l CD ID CD CD CE3

3.1 SAMPLE SELECTION

To elicit a high response rate across the range of managers

within Makro, the questionnaire was administered to half (52) of

the managers within the group.

The population consisted of 104 managers. Each person's chance

of being selected was 1/104. After selecting the person, that

person was not returned to the population, so that the chance of

the remaining population was 1/103. This procedure is known as

sampling without replacement.

3.2 METHOD

Random numbers were assigned to the population and any person

who was randomly assigned the number 10 was drawn.

3.3 SAMPLE SIZE

The sample was as large as possible in order to give the

principle of randomness a chance to work. A small sample would

possibly have resulted in a deviant sample. From a research

point of view the sample must have approximately the same

characteristics of the population relevant to the research.

3.4. QUESTIONNAIRE DESIGN

The questionnaire which is presented in appendix 1 was handed

out with a covering letter, presented in appendix 2. This

letter stressed the importance of responding, in that the study

will be more valid and reliable as a result of more responses.

-6i--

The questions in view of the research objectives were divided

into nine sections.

....,,_ 1. Respondent details - questions related to the personal

characteristics of the respondent. (questions

1,2,3,4,5,6,7,8)

Perceptions as to the definition, and acceptable forms of

participative management. (question 9)

Perception of how profit is related to participative

management practice. (questions 16,18)

:-- 4. Perception of how power is related to participative

management practice. (questions 21,24)

Views of attitudes to participative management practice

within Makro. (questions 10,11,12,14,15)

View of the Trade Union, and Shop Steward's Body as

participants in participative management practice.

(questions 13,22)

Views on the effect of participative management on worker

motivation. (question 17)

e. Perception of the rights of employees related to

participative management practice. (questions 19,23)

9. Understanding of training related to participative

management practice. (question 20)

More than one question was asked in six of the none sections to

check for consistancy in responses to specific issues.

-62-

3.5 LIMITATIONS

1. There was no interviewer present to observe the

respondents' non-verbal behaviour or spontaneous responses.

2. There was no control over the order in which respondents

may have answered the questions.

3. There was little control over the environment in which

the questions were completed.

4. Of the 52 questionnaires that were administered only

were returned completed. This represents a response of 737.

38

be

is

MANAGEMENT GROUP ADMINISTERED RETURNED PERCENTAGE

TOP MANAGEMENT 16 12 75%

MIDDLE MANAGEMENT 18 13 73%

SUPERVISORY MANAGEMENT 18 13 73'/.

5. When we draw a random sample we hope that it will

representative, that all the relevant characteristics of the

population will be present in the sample in approximately

the same way they are present in the population. There

never a guarantee of this by way of a random sample.

-63-

3.6 TESTING OF THE QUESTIONNAIRE

The questionnaire was tested on a group of ten people, from

differing levels in the company, prior to it being administered

to the sample. This was to ensure that it was understood, and

complete, in terms of gathering data that was relevant to the

objectives of the study.

-64-

CI-APMR F- DUR — Mf=tKRCI) SIDUTH

4.1 HISTORY OF MAKRO IN SOUTH AFRICA

Makro International, based in Holland, began trading in 1968,

and the concept was so successful that the company looked abroad

for expansion opportunities. At the same time Rennies Holdings

were operating a wholesale business, J•W. Jagger & Co. It was

decided that Jaggers should be phased out and replaced by Makro.

In 1971, the Germiston store was opened, being the first Makro

store in South Africa. Today, Makro has six stores operating

around the country.

In 1987 Makro International sold their 2/3 shares for Makro

South Africa to the Wooltru Group, the remaining 1/3 share was

still held by Rennies. Wooltru bought this in 1988.

The wholesale and retail distribution trade is economically

concentrated and largely dominated by powerful business

corporations which are well established in the market.

Makro S.A. carries a vast range of food, liquor and non-food

items. The product range is extensive and it takes in

everything from tinned baked beans to electrical appliances,

fine wines and this season's fashions.

Makro offers small businesses a unique wholesale service. Makro

clients are mainly small store owners, from corner cafes, to

suburban supermarkets.

Makro's customer base is restricted to eligible businesses,

institutions, organisations and associations. This has always

ensured a degree of exclusivity for Makro customers.

-65-

4.2 HUMAN RESOURCES PRACTICE AT MAKRO

Makro has always, by virtue of its International Origins,

coupled by Management insight, been a progressive company, in

terms of Human resource management practice. The company has

always been an equal opportunity employer and dedicated to the

development of people.

All Makro employees enjoy a range of benefits including:

A Pension fund

Makro medical aid

C Staff purchasing policy

Group life assurance scheme

Housing scheme

F Maternity leave (up to six months)

Study loans

Educational Bursaries

I Privilege day off (one a month)

(Obviously all statutory benefits are included.)

More importantly however, are the benefits related to the growth

of people. Makro is committed to ensuring the continual

upliftment and improvement of staff in a suitable and healthy

environment. All employees are exposed to a career path, with

performance appraisals done twice a year. This process ensures

that the company permits its on people to grow enabling them to

take up the more senior positions in the company as they arise.

Makro also put a great deal of emphasis on the right of

employees to be managed competently, and to this end Makro

ensures that all managers are competent in people management

skills. For those who require training in this regard, Makro

provides a number of management courses.

-66-

4.3 UNION INVOLVEMENT DESIRED BY MAKRO

Makro have always recognised the rights of employees and to this

end have abided by a recognition agreement with the

representative Union CCAWUSA (COMMERCIAL CATERING AND ALLIED

WORKERS UNION OF SOUTH AFRICA) since 1983. Labour Relations

Practice within the company is regarded as critical to the

performance of the business and for this reason Makro place a

great deal of emphasis on Industrial Relations training, and

practice.

All stores have an operative shop stewards body which meet with

management at least once a month, to discuss any issues of

importance.

-67-

C=2 E-4 F: F> -T- EE: F=2 F=7 I <1 FEE F: INJ L__ Y' EE3 DF7 -T- F-1 EEE

NI ID

OF- FR ARCI--1

5.1 SECTION 1 - RESPONDENT DETAILS

Questions one to eight are all related to biographical details

of respondents in terms of:

A Home language

Sex

C Age

Race

level of education

F Length of service with Makro

Position in the Company

Figures one to twenty are percentage representations of this

data. The data is compared within the management groups and

then as a total sample.

Question What is your home language? Refer to figures 1 -

4.

Question Your sex? Refer to figures 5 and 6. Interesting

to note here that only 5.37. of the total

respondents are female, which were

in the Supervisory group.

representative

Question Your age? Refer to figures 7 - 10.

-68-

Question 4: What is your citizenship? All responses to this

were "SOUTH AFRICAN"

Question 5: What is your race? Refer to figures 11 - 12. In

both the top management and middle management

groups there were only whites. In the supervisory

management

Black and

group (Figure 11) there were Coloured

Asian respondents present.

Question What is

achieved?

the highest level of education you have

Refer to figures 13 - 16.

Question Length of service with Makro? Refer to figures 17

20.

Question What is

question

respondent

your current position with Makro? This

was asked to establish in which group the

was for purposes of the analysis.

Makro's

groups for

Management structure falls into three

the purposes of this study:

Group 1: Top Management Categories A - E

Group 2: Middle Management Categories F - J

Group 3: Supervisory Management Categories K - L

Level "A" represents the Managing Director and other Directors

and level "L" represents a department manager (the first level

of management within Makro)

-69-

Consideration of the biographical information related to the

entire group of respondents has brought interesting information

to the fore.

Over half of the respondents are english speaking.

It would have been expected that a great deal of

management staff would have been afrikaans (Dutch) due

to the fact that the Company was originally started by

the Dutch.

The management group is relatively young. 47% of

respondents are between the age of 26 - 35. This is

a reflection of the management scenario within South

Africa, in that it has become increasingly difficult to

find "good managers" which has pushed down the average

ages of managers who are in relatively senoir

positions.

Only 5.37. of the sample are Female, and this in the

supervisory group only. Although many woman have come

back into the job market, in general, due to the ailing

economy, this has not yet manifested itself at Makro.

ENGLISH 66.6

AFRIKAANS 33.3

ENGLISH 84.6

AFRIKAANS 15.4

Pig. 2

-70-

HOME LANGUAGE TOP MANAGEMENT

IN PERCENTAGES

HOME LANGUAGE MIDDLE MANAGEMENT

IN PERCENTAGES

ENGLISH 68,5

it* HINDI 2.6

N. SOTHO 2.6

S. SOTHO 2.6

-7 1-

HOME LANGUAGE SUPERVISORY MANAGEMENT

ENGLISH 53.8

S. SOTHO 7.7

F 1L

IN PERCENTAGES

HOME LANGUAGE TOTAL SAMPLE

AFRIKAANS 23.7

IN PERCENTAGES

-72--

SEXUAL CO\APOSITION SUPERVISORY MANAGEMENT

Fig.

IN PERCENTAGES

SEXUAL COMPOSITION TOTAL SAMPLE

MALE 94.7

FEMALE 5.3

IN PERCENTAGES

-73-

AGE GROUPS TOP MANAGEMENT

T, I , 1g. (

IN PERCENTAGES

_ AGE GROUPS MIDDLE MANAGEMENT

8

IN PERCENTAGES

26 - 35 47.3

Fig. 1_0

16 - 25 2.6

56 - 65 2.6

- 7 4 -

AGE GROUPS SUPERVISORY IVANAGEMENT

16 - 25 7.7

56 - 65 7.7

46 - 55 23

Fig. 9

IN PERCENTAGES

AGE GROUPS TOTAL SAMPLE

IN PERCENTAGES

COLOURED 23.1

Fig, 11

WHITE 76.3

ASIAN 7.9

COLOURED 7.9

BLACK 7.9

Fig. 12

-75-

RACE SUPERVISORY MANAGEMENT

IN PERCENTAGES

RACE TOTAL SAMPLE

IN PERCENTAGES

PATRIC 38.4

DEGREE 7.7

DIPLOMA 53.9

Fig. 14

-76--

HIGHEST EDUCATIONAL LEVEL TOP MANAGEMENT

DIPLOMA 8.4

Fig. 13

IN PERCENTAGES

HIGHEST EDUCATIONAL LEVEL MIDDLE MANAGEMENT

IN PERCENTAGES

-77-

HIGHEST EDUCATIONAL LEVEL SUPERVISORY MANAGEMENT

Fig. 15

H4 PERCENTAGES

HIGHEST EDUCATIONAL LEVEL TOTAL SAMPLE

MATRIC 52.7

STD. 8 10.5

DIPLOMA 26.4 DECREE 10.7

Fig. 16

IN PERCENTAGES

ONE YEAR 16.7

TEN YEARS 8.3

FIVE YEARS 8.3

LESS THAN ONE YEAR 25

FIFTEEN YEARS 8.3

LESS THAN ONE YEAR 15.4

FIFTEEN YEARS 7.7

ONE YEAR 15.4

TEN YEARS 23

FIVE YEARS 38.5

-78-

LENGTH OF SERVICE TOP MANAGEMENT

THREE YEARS 33,3

Fig,

IN PERCENTAGES

LENGTH OF SERVICE MIDDLE MANAGEMENT

Fig. IS

IN PERCENTAGES

TEN YEARS 23.1

THREE YEARS 23.1

LESS THAN ONE YEAR 23

FIFTEEN YEARS 7.7

FIFTEEN YEARS 7.9

TEN YEARS 18.4

THREE YEARS 18.4

LESS THAN ONE YEAR 21

-7 9-

LENGTH OF SERVICE SUPERVISORY MANAGEMENT

FIVE YEARS 15.4

Fig. 19

IN PERCENTAGES

LENGTH OF SERVICE TOTAL SAMPLE

FIVE YEARS 21

20

IN PERCENTAGES

-80-

5.2 SECTION 2 - PERCEPTIONS AS TO THE DEFINITION OF

PARTICIPATIVE MANAGEMENT

Question 9: How do you understand the term "participative

management? This question elicited responses on

options 1, 2 and 3 only (indicated below), from

all respondents. Refer to figure 21

Choices

Managers participate with other managers and

make decisions concerning the company, at all

levels of the company.

Managers and employees participate to make

decisions, concerning the company, at all levels

of the company.

Managers and employees participate to make

decisions, concerning the company, at some levels

of the company.

From figures 21 it can-be seen:

The majority of Top management perceive

participative management as described in option one.

(59%)

The majority of Middle management perceive

participative management as described in option two.

(63%)

The majority of Supervisory management perceive

participative management as described in option three.

(63%)

-81-

Quite clearly there is a distinct difference in perception of

"participative management", in its broadest sense, between the

three levels of management at Makro. This differance in

perception, especially in the broadest sense, of participative

management, will inhibit any attempt of implementing a

participative management system or style without training.

A comment from one respondent in each group will support this

finding.

Top management: "lower levels should not be

involved in decisions which are those of

management, simply for the sake of involvement.

This can divert them and waste time." "All

managers and employees are involved and make a

contribution to those decisions, which: A)

affect their work lives, 13) over which they can

make an influence based on their specific

expertise or experience"

Middle management: "Participation is the major

route to gaining commitment from others. If doing

the job depends on others, then participation

becomes the way. It could also very well lead to

the job being done in the best way: having being

determined by the coalface"

Supervisory management: "I think managers and

other managers must make all decisions and also

get .a feeling from the employees side of view"

-82-

TOP MANAGEMENT EM MiDDLE MANAGEMENT

iaj SUPERVISORY MANAGEMT

Fig. 21

-83--

5.3 SECTION 3 - PERCEPTION OF HOW PROFIT IS RELATED TO

PARTICIPATIVE MANAGEMENT PRACTICE

Question 16: Profit is far more important than people. Refer

to figure 22.

From the graph it can be seen that top management

have in 597. of the cases responded by saying "do

not know". It is important to mention here that

in 427. of those cases respondents indicated on

the questionnaire that profit and people are

interdependent.

Middle management, by 937., disagree with the

statement without any comment.

Supervisory management responded by 317., that

profit is more important than people. This

response is interesting from this group, and can

only be understood in terms of profit satisfying a

security need, in the form of salaries.

Question 18: How do you understand the term participative

management in terms of company profits? Refer to

figure 23.

The question elicited responses to options 1, 2 and 5.

All profits shared equally at all levels.

Profits shared proportionately depending on your

level.

5. Profits shared by shareholders only.

-84-

The response to this question was overwhelming -

907. (from respondents in all three groups) to

option two - "Profits shared proportionately

depending on your level". This response is in

line with the companies policy on incentive

bonuses. These are dependant on year end profits,

and paid proportionately, from level A to level K.

In terms of profit related to participative management practice

there is a difference in perception of the importance of profit

related to people. This is evident in the supervisory group

where 317. perceive profit to be more important than people.

Although profit is not mentioned frequently in the literature,

as the one of the primary aspects related to participative

management, it is critical in any consideration of participative

management, especially in South Africa, where wages have become

an important aspect in an inflationary environment.

It was interesting to note that managers in the supervisory

management group responded, by 317. that profit is more important

than people. This response can be interpreted as this level

appreciating the importance of profit, in that profit meaens

beter saleries, and beter increases. The higher one goes in the

management structure the less important salery becomes, and the

more important recoginition and responsibnility becomes.

Should participative management be introduced it would be

necessary to address profit in terms of what it would mean to

the manager, and to the employee. This would require carefull

thought.

-85-

AGREE FULLY DO NOT KNOW DO NOT AGREE

TOP MANAGEMENT MEI MIDDLE MANAGEMENT

L1 SUPERVISORY MANAGEMT

Fig. 22

OPTION 1 OPTION 2 OPTION 3

SUPERVISORY MANAGEMT

TOP MANAGEMENT Mi MIDDLE MANAGEMENT

- 8 6 -

Fig. 23

FIT

120

93 92 100

80

60

40

20

IN PERCENTAGES

-87-

5.4 SECTION 4 - PERCEPTION OF HOW POWER IS RELATED TO

PARTICIPATIVE MANAGEMENT

Question 21: Participative management at Makro will mean that

management will no longer have power, giving the

employees all the power, and the company will

suffer financially Refer to figure 24.

From figure 24 it is evident that the entire sample responded

"do not agree at all" to this statement.

The overall perception of power is quite clearly understood as

the power to make decisions in this question, as can be

appreciated from some statements that were made by respondents.

A) Top management: 1. "Management must still have

the final say, set the pace and give direction".

2. "Participation does not

mean abdication, but rather an opportunity to be

involved in the decision making process".

3. "Participation runs on a

continuim from total democracy in its purest sense

to some form of tokenism at its worst. My feeling

is that Makro should position itself closer to the

former, with management deciding on the objectives

and employees deciding on how to get there.

8) Middle management: 1. "Management will

ultimately still hold the power, but you will gain

motivation and commitment through the sharing of

ideas.

2. "By managers involving

employees in decision making does not mean that

managers relinquish power or authority. On the

contrary managers become more aware of problems,

ideas etc", and are in a better position to handle

this timeously".

3. "Participative

management is not a question of power, but rather

a management style".

C) Supervisory management: 1. "Managers will

always be there to guide employees and set goals

and objectives to make more profit".

"Participative

management does not mean that the employees will

have the power to decide where the company is

going. Management and employees will participate

in making our business a success".

"Major decisions

will always be the right of management and these

carry the power".

Question 24: Does participative management in operation mean

that the political rights of employees become more

important than the daily running of the business?

Refer to figure 25.

From figure 25 it is appreciated that 97% of all respondents

responded "not at all". Only 87. of respondents in the

supervisory management group responded "do not know".

Quite clearly respondents feel that the political rights of

employees is not of any importance at the work place as can be

appreciated from comments below.

Top management: 1. "Participative

management is about management style. Trade

unions in South Africa is about political,

social and economic issues".

-89-

"This is a business

not a political party".

"Participative

management has nothing to do, in my opinion, with

political rights. Participative management is

within the workforce, and political rights stay

outside".

8: Middle management: 1. "We are in business

to make a profit for our shareholders".

"Political rights

do not play a role in business".

"If employees are

given the opportunity to participate in the

process, it will reduce the need to politicize the

workplace as a means of protest".

C: Supervisory management: 1. "The daily running

of the business is the most important aspect.

Without successful operations there is no

profit and no benefit to employees:.

If politics were

to run our business, a lot of people would be

without a job soon".

"Politics and

business do not mix".

In terms of power, it is quite clear that all groups think

alike. This response was unexpected especially in an

organisational environment that is so volatile in terms of

Industrial Relations.

Should power have been pecreived differently amongst the groups,

it would be very difficult to introduce a participative

management style because power sharing is a prime ingreadient

for it to be a success.

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-92-

5.5 SECTION 5 - VIEWS AND ATTITUDES OF PARTICIPATIVE

MANAGEMENT PRACTICE WITHIN MAKRO

Question 11: Top management are committed to the principle of

participative management (the principle as you

understand it). Refer to figure 26.

From figures 26 it can be seen that there is a difference in

views between the levels of management.

A) Top management believe that there is total

commitment (50% - strongly agree and 507. - agree.

No respondents indicated "disagree"). If one

relates this to their response to question 9,

(58.37. responded that participative management

means: Managers participate with other managers to

make decisions) it can be understood that all

respondents feel that management are committed to

the principle of participative management.

8) Middle management felt that top management are

not committed to the principle of participative

management, by 327.

C) Supervisory management felt, by 16%, that top

management is not committed to the principle of

participative management.

-93--

Question 12: Does top management have to be committed to the

principle of participative management for it to be

a success? Refer to figure 27.

All respondents in the whole sample, excepting two (5.27.) from

the supervisory management group responded "Strongly agree" to

this question, as can be appreciated from figures 37 and 38.

Those two (5.27.) responded with "Agree".

It is clear that there is understanding that for a participative

management style to be effective it requires commitment from top

management.

Question 14 The dominant management style in Makro provides a

favorable environment for participative management

practice. Refer to figure 28.

A) Top management responded, by 917. (507. strongly

agree and 417. agree) that they agreed with this

statement. There were no respondents who felt

that they disagree with this statement.

13) In the middle management group 377. responded

strongly Agree and agree, however a further 567

responded strongly disagree and disagree.

c) In the supervisory management group 46%

responded strongly agree and agree and 317.

strongly disagree and disagree.

-94-

Comments from various respondents will elucidate this finding.

A) Top management 1: "There is an

understanding within management of the importance

of people and their ability to influence the

success or failure of the business".

"We have the right

culture and climate to make it successful".

"Management have

an open door with the M.D. and I believe employees

have an open door with their respective managers".

B) Middle management 1: "The worker's see

management as an elevated bunch of snobs with a

"closed open door policy who like telling a lot

and are low on feedback".

"The management

style is "dominant" and it prevents the idea or

philosophy of encouraging participation".

"There is no

consistency of management styles between the

different stores".

C) Supervisory management 1: "Management and

staff do work together at Makro".

"Suggestions from

staff on the floor are always viewed by management

and sometimes implemented".

"Top management

are willing to understand the problems that staff

have".

-95-

Question 15 If there were to be a participative management

programme at Makro would you be committed to it,

and why would you be? Refer to figure 29.

All respondents in the whole sample except for one (2.6%) in the

top management group, responded "yes" to this question. Quite

clearly therefore, there would be commitment to an operative

participative management programme.

Some comments will support this finding.

A) Top management 1: "Because it

works!".

"Simply because I

believe results are achieved by people, through

people".

"Participation on

a broad basis raises expectations and involves

people who are not qualified or experienced to

have a valid opinion". (this respondent answered

no to the statement).

-9 's-

B) Middle management 1: "It is in the

interest of the company's future".

"By encouraging

and involving all levels of employees you get a

committed workforce".

"Participation

will bring profit and working harmony".

C) Supervisory management 1: "Participation

allows for growth and that is what keeps people

motivated".

2: "It will make

everyone feel a part of the company and people

will feel secure in their jobs".

3. "I will part and

parcel of it because as a manager I can't do the

work without involving my subordinates".

Question 10 How many subordinates report directly to you?

This question was asked to establish whether or not the

respondents are managers, by virtue of having people reporting

to them. All respondents do have people reporting to them. The

least a manager has reporting to him is 1, and the most is 14.

The average is 6.5 for the whole sample.

Clearly there is an understanding throughout the group, that

commitment is a pre-requisite for any participative management

system or style, to be a success, and especially from top

management. There were however different perceptions between

the groups as to the level of commitment, to patricipative

management from managers at Makro. Clearly all managers, at all

levels would, not only gave to be commited, but also be aware of

each others commitment for a participative management style to

be a success.

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-97-

Fig. a

NECESS

AGREE STRONGLY AGREE

120

100 100 100

80

60

40

20

0

15

-98-

TOP MANAGEMENT Mi MIDDLE MANAGEMENT

SUPERVISORY MANAGEMT

IN PERCENTAGES

Fig. 27

-99--

\A‘A

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-100-

Fig. 29

-101-

5.é SECTION 6 - VIEW OF THE TRADE UNION, AND SHOP STEWARDS

BODY AS PARTICIPANTS IN PARTICIPATIVE MANAGEMENT

PRACTICE

Question 13: Who do you believe should be entitled to have

participation in the company? Refer to figure 30.

Top management feel that the shop stewards body

should be entitled to participation to the tune of

67% (337. shop stewards and managers and 347. shop

stewards and employees).

79 Percent of middle managers answered this

question with "Do not know". Important to note is

that 627. of these respondents indicated "all

employees and management should be entitled to

participation", on their questionnaires.

76 percent of supervisory managers feel that shop

stewards should be entitled to participation in

the company (537,. shop stewards and managers and

237. shop stewards and employees)

Question 22: Participative management means that the union,

(through the shop stewards committee) together

'with management make decisions related to the

company. Refer to figure 31.

From the figure 31 it can be seen that 587. of top

management agreed with this statement.

-102-

£1 percent of middle managers responded "did not

know". All these respondents whom responded "do

not know indicated all employees should be

entitled to participation" on their

questionnaire.

69 percent of supervisory managers agreed with

this statement.

Of importance in this section is that the shop stewards body is

perceived as an important decision making body by the top

management group, and even more so by the supervisory management

group. The middle management group do not perceive this to be

the case, but rather point out the importance of participation

for all.

There is obviously confusion between the management groups as to

the role of the shop stewards body in the participative

management system. Organised labour is viewed as an important

aspect of Makro's management ethos, and therefore it is critical

that there is common understanding and perception of the role of

organised labour (through the shop stewards body) in a

participative management system or style.

To achieve this common perception, Makro would not only have to

undertake Industrial Relations training, to enlighten managers

and employees of Industrial Relations practice, but there would

also have to be further training, as to the role that labour

plays in a participative management system or style.

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-104-

Fig. 51

-105-

5.7 SECTION 7 - VIEWS ON THE EFFECT OF PARTICIPATIVE

MANAGEMENT ON WORKER MOTIVATION

Question 17: Participation will allow for an environment in

which employees will be more motivated to do their

work. Refer to figure 32.

All respondents to this question responded "fully agree", as can

be depicted from figure 32.

Common understandimg and perception of the effect of

partivipative management practice on motivation is engouraging

to see. Clearly a participative style or system would only

enhance motivation because accountability and responsibility are

shared by all, to differing degrees, which. are "real"

motivators.

-1 0 1D-

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Fig. 32

-107-

5.8 SECTION 8 - PERCEPTION OF THE RIGHTS OF EMPLOYEES

RELATED TO PARTICIPATIVE MANAGEMENT PRACTICE

Question 19: Do employees have a right to decide on the

companies objectives? Refer to figure 33.

Top management agree with 847., and disagree with

16%

Middle management agree with 937. and disagree with

17%

Supervisory management agree with 307. and disagree

with 70%

Question 23: If Makro were to adopt a participative management

style would you feel threatened that you would

lose your job with the company? Refer to figure

34.

All top management respondents responded "no". No

respondents said "yes".

82 percent of middle management responded "no".

No respondents said "yes". 18 percent responded

indifferent.

77 percent of supervisory management responded

"no". No respondents said "yes". 23 percent

responded indifferent.

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- 109 -

Fig. 34

-110-

Comments from some respondents will elucidate this finding.

A) top management: 1. "I believe in

results and good ones will not result in my losing

my job".

"Participative

management should be seen as an opportunity and

not as a threat".

"As long as I do

my job I am not threatened".

B) Middle management: 1. "My aim is to get

the job done to the best of my ability and this

will never be threatening to me".

"If you push

accountability and autonomy down performanc

increases without threat".

"Participative

management is not a question of power but rather a

management style".

C) Supervisory management: 1. "If accountability

is shared by a whole work group I would feel less

threatened than I do now".

"participation

creates mutual trust and not threats".

"Participative

management should not be biased in any way so that

an employee who is qualified to do his job feels

threatened".

Again there is differing perceptions on the issue of the righrs

of employees, in terms of participating in deciding on company

objectives. It would be necessary to adress this issue proir to

implementing any participative management style, because there

would have to be understanding of what levels, in the compamy,

would become involved in objective setting.

5.9 SECTION 9 - UNDERSTANDING OF TRAINING RELATED TO

PARTICIPATIVE MANAGEMENT PRACTICE

Question 20: Do you believe that you need to be trained in

order to perform in a participative management

environment? Refer to figure 35.

58 Percent of top management believe they need

training to perform in a participative management

environment whilst 42 percent do not.

38 Percent of middle management believe they

require training to preform in a participative

management environment whilst 62% do not.

23 Percent of supervisory management believe they

require training to perform in a participative

management environment whilst 77 percent do not.

In terms of the idea that training is necessary prior to

managers performing well in a participative management

environmant there are widely differing perceptions.

Clearly there is little understanding of what participative

management really is, between levels of management. Furthermore

it goes without saying that managers and employees would have to

be trained to perform efficiently and effectively within a

participative management environment, because it means that

accountability and responsibility are passed down to the lower

levels within the organisation.

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-112-

-113-

G 1-11F) F2 I X G L_LJ I D NJ

6.1 CONCLUDING REMARKS ON THE RESEARCH

From this research project it has become clear that there are

numerous differences in perceptions of participative management

between management levels at Makro South Africa. The primary

emphasis of this report has been to examine the nature, and

pattern of perceptions of participative management. Since it is

difficult to define participative management in a finite

definition it is difficult to draw finite conclusions. It is

possible however to make observations from the empirical data

that was collected and collated.

These findings follow the format in which the questionnaire was

analysed.

Section 1 In terms of the biographical data the

interesting findings were:

The small amount of females within the

management_ structure (only in the supervisory

,group).

The relatively young nature of the management

sample (47.37. of the entire sample is between the

age of 26 - 35).

Section 2 The response to the definition of

participative management was different in all three

groups.

1. Although the question related to the perception

of participative management, in this case was in

general terms, the responses were significantly

different between the management groups.

-114-

Top management quite clearly perceive

participative management to be a management style

shared between management only. Furthermore,

participation in decision making decreases as one

goes lower down the management hierarchy.

Participation by employees is seen to be

time-consuming and an interference in the

direction of the company. Management are seen as

the decision makers in determining the company's

goals and objectives whilst employees are involved

in decisions that affect their work lives.

Middle management perceive participative

management to be a style that permits all

employees to be involved in decision making.

The supervisory group perceive participative

management as a style that allows for

participation by employees in "some" decisions.

Section 3 In terms of the link between profit and

participative - management it is quite clear that all

three groups feel that profits should be shared between

employees depending on their level in the company.

This was to be expected as this is current policy

within the company.

The response to the thought of profit being more

important than people was especially interesting in

that the supervisory group felt by 31% that profit is

more important than people. One would have expected

that -this level would be the least likely to respond

this way. Clearly there is a difference in perception

on this issue between management levels. (refer figure

22)

-115-

Section 4 Perceptions of how power is related to

participative management elicited an almost identical

response from all management groups.

There is clearly common perception of power at

the work place between the management groups.

Management are obviously perceived as the power

holder whether or not participative management is

operative or not.

The political rights of employees are also

clearly not an issue at the workplace,

irrespective of whether or not participative

management is operative or not.

Section 5 This section elicited the most widespread

responses, between the management groups, in the study.

In terms of whether or not top management is

committed to the principle of participative

management, there were widespread responses. Most

significant is that middle management felt by 327.

that they were not committed.

The respondents felt, almost unanimously, that

commitment from top management is necessary for a

participative management programme to be a

success.

The question as to whether or not management

style at Makro was conducive to participative

management also elicited widespread response.

Again middle management felt, by 567. that

management style was not conducive.

-116-

4. Clearly all would be committed to a

participative management style should it be

implemented at Makro. It is important to mention

that this commitment would be in accordance with

the style as each group perceives it. For example

top management would be committed to a

participative style whereby managers decide on

company goals and objectives and employees make

decisions on aspects that affect their work lives.

Section 6 It is clear from the study that the trade

union is perceived, as an important player in the

decision making process, by all groups. This

perception is strongest at the supervisory management

level, and second strongest at the top management

level.

The trade union is perceived as a more

important decision making body than employees in

the company.

Supervisory management would perceive this to

be the case because they are closest to the shop

stewards in their daily responsibilities.

Section 7 The entire sample perceive a positive

correlation between participative management and worker

motivation.

Section 8 In terms of employees having a right to be

involved in making decisions on company objectives

there are two findings.

-117--

1. Top and middle management agree to this whilst

supervisory management disagree by 707.. The

response by top management is contradictory to

their perception of participative management. The

response from the supervisory management group is

linked to the previous section in that because

they feel that the shop stewards body should be

involved in decision making they see no necessity

for employees to be involved in decision making.

They feel that the employees have the shop

stewards to serve their interests.

Section 9 Training related to participative

management was perceived differently by all management

groups.

Top management perceive training as necessary

to be able to perform in a participative

management style whilst supervisory management do

not.

Clearly supervisory management perceive

, participative management as it is, a style, as

opposed to top management who perceive it as a

more complex management tool.

Although mentioned already, it is important to say again that

training would be necessary prior to implementation of any

participative management style or system not only to ensure

common understanding and perception, but also to ensure

commitment.

-118-

6.2 RECOMMENDATIONS TO MAKRO

The object of this study was to determine whether or not

perceptions of participative management differ between differing

levels of management at Makro and whether such differences would

have an impact on the implementation of a participative

management style or system.

To conclude the study, taking cognizance of the research

results, it can be appreciated that perceptions do differ

between differing levels of management at Makro. Furthermore

these differing perceptions would be signifigant enough to

inhibit any attempt of introducing a participative management

style or system at Makro without training.

Although participative management has been around for some time

I feel that it has been greatly misunderstood by South African

managers. All too often it is perceived as some sort of panacea

to overcoming problems at the work place. Furthermore it is

seen to be a finite package implementable in all situations,

which it is not.

It is important to remember six principles upon which

participative management is based before management attempt to

implement it.

-119-

It is a management style, rather than a

management package

There will always be differences in perceptions

of participative management, between differing

people, and with those differing perceptions come

differing expectations between said people.

Top management commitment is critical to the

success of any participative management style, in

whatever form it manifests itself within the

organisation.

It is not necessarily a style which is suitable

for all organisations.

If it is misunderstood or misperceived by

management and employees within an organisation,

it could result is failure rather than success.

Employees have a right to be managed

competently, and if a participative management

,style encroaches this right in any way it should

be disregarded.

-120-

REFERENCES

Ackerman, R. 1982. Productivity: A crisis ahead. I.P.M Manpower

Journal Vol. 12 No. 2 (April)

Aft, L.S. 1983. Productivity: Measurement and improvement

Prentice Hall.

Anglo American

Industrial Relations in Jugoslavia:

Corporation. 1984

Occasional Paper, Industrial Relations

Department. Information unit - Johannesburg.

Bendix, D.W.F. 1978. Limits to co-determination. Industrial demo-

cracy in the Federal Republic of Germany

1945 - 1977. Johannesburg Lex Patria.

Bendix, D.W.F. and Quality Circles as a response to the produc-

Bocker, H.J. 1982. tivity crisis. Manpower Journal - (June).

Bocker, H.J. and Structuring Quality Circles: A management

Overgaard, H.O. 1983. challenge to combat ailing productivity. Lea-

dership and organisational development Journal

Vol. 3 No. 5

-121-

REFERENCES (Cont.)

Bobbie, R. and Want productivity improvement? Manage it

Schaeffer, R. 1982. Administrative management journal Vol. 43

No. 8 (August)

Coetzee, C. 1988. Participative Management: Cure for many

• business problems. Human Resource

management journal. (March)

Cordova, E. 1982. Workers participation in decisions within

enterprises: Recent trends and problems.

International labour review Vol. 121. No. 2.

(March-April)

Daniel, R. 1983. Making quality circles work. Management

journal. (October)

Dessler R. 1983. Improving productivity at work: Motivating

today's employees. Prentice Hall.

Douwes Dekker L.C.G Worker participation as an important process

1973. in the institutionilization of an open plural

society. Johannesburg S.A.I.R.R.

-122-

REFERENCES (cont.)

Evans, P. 198b. Quality Circles: Integrating people and

production: Productivity S.A. Vol. 12

No. 2. (April)

Falk, A. 1982. An American look at German labour rela-

tions: Personnel Journal. (March)

Hall, C. 1989. People Growth: The most rewarding and essen-

tial business commitment. Human Resource Man-

agement Journal. (Yearbook)

Hersey, P. and Management of organisational behaviour,

Blanchard, K. 1977. utilizing human behaviour resources

3rd ed New Jersey. Prentice Hall.

Hethy, L. and

Workers direct participation in decisions

Mako, C.S. 1977. in Hungarian factories: International

labour review Vol 116 No. 7

Hovels, B.W.M, Workers councils in the Netherlands: Some

Nas, P. 1977. findings from an empirical survey. The

Netherlands Journal of sociology.

-123-

REFERENCES (cont.)

Kachelhoffer G.L. Industrial democracy: Employee participation in

1978. the decisions of an undertaking. (In S.M. Smart

(ED) Employee participation: Challenge to man-

agement prerogatives.) Pretoria. Unisa

Kast, E. and Organisation and Management: A systems and

Rosenzweig, J. 1985. and contingency approach. Mcgraw - Hill.

Landel, R. 1986. Managing productivity through people: An

operation perspective. Prentice Hall.

Lickert, R. 1950

(In Katz, D. Maccoby, N. and Morse, N.

(Eds) Productivity, Supervision and Morale

in a situation. University of Michagen.

Survey Research Centre.

Mcgregor, D. 1960. The human side of enterprise. New York.

Miller, R.F. 1978. Worker self-management in Yugoslavia. The

current state of play. Journal of Industrial

Relations (Sept).

-124-

REFERENCES (Cont.)

Mulder, M. and Participation and power equalization Organi-

Wilke, H. 1970. sational behaviour and human performance.

Natrass, J. 1984. The South African economy, its growth and

change: Oxford University Dress: Cape

Town.

People and Profits, Fact sheet No. 95. Labour Relations Act

1981. (Dec.).

Poole, M. 1978. Worker Participation and Industry: London:

Rautledge and Kegan Paul.

Project Free

Economic participation in South

Enterprise, 1987. Africa. Pretoria: Unisa School of

Business Leadership.

Riddel, J. 1986. Management: The driving force: Productivity

S.A. Vol. 12. No. 2. (April)

Roethlisberger, F. Management and the worker

and Dixon, W. 1939. Cumbridge Mass: Harvard Univeristy Press.

Stogdill, R. and

Leader Behaviour: its description

Coons, A. 1957. and measurement. Columbus Ohio

State University. Bureau of business research.

-125-

REFERENCES (cont.)

Tims Items. 1988. Labour Relations edition No. 7. Editorial

Committee: Prof. Luther Backer, Mr. Derek

Weston.

Van Den Bergh, T. Enlightened Leadership enhances productivity

1988. improvements. Human Resources Management

Journal. (Sept.)

-126--

F' FR -T- I CD I -T- I V E.:. rvi P•4 9 EEE Ni EE:NI T-

1-1 EE: EE3 -T- I CD P\A Ni I FR EE:

What is your home language?

ENGLISH

AFRIKAANS

ZULU

TSWANA

N. SOTHO

S. SOTHO

XHOZA

OTHER (INDICATE)

Your sex

MALE

FEMALE

Your age

16 - 25

26 - 35

36 - 45

46 - 55

56 - 65

-127-

What is your citizenship?

BY BIRTH

PRESENTLY

What is your race?

COLOURED

BLACK

WHITE

ASIAN

What is the highest level of education you have achieved?

STD. 6.

STD. 8.

STD. 10.

DIPLOMA.

DEGREE.

Length of service with your company

LESS THAN 1 YR

UP TO 1 YEAR

UP TO 3 YEARS

UP TO 5 YEARS

UP TO 10 YEARS

UP TO 15 YEARS

-128-

What it is your current position at Makro?

POSITION

DEPARTMENT

LOCATION

How do you understand the term "PARTICIPATIVE MANAGEMENT"?

Managers participate with other managers and make decisions concerning the Company, at all levels of the company.

Managers and employees participate to make decisions, concerning the company, at all levels of the company.

Managers and employees participate to make decisions, concerning the company, at SOME levels of the company.

Employees participate and make all decisions, concerning the company, at all levels of the company.

, Shop Stewards and management make all Company decisions, at all levels of the company.

If none of the above; please enter your point of view here.

-129-

10 (a). How many subordinates report directly to you?

NUMBER OF SUBORDINATES

10 (b). Indicate the breakdown of subordinates in terms of sexual and racial composition.

(INDICATE NUMBERS)

ASIAN WHITE BLACK COLOURED

FMFMF M F M

Top Management at Makro are committed to the principle of Participative Management: (the principle as you understand it)

STRONGLY AGREE AGREE NEUTRAL

DO NOT AGREE

STRONGLY DISAGREE

Does Top Management have to be committed to the principle of participative management for it to be a success?

STRONGLY AGREE AGREE NEUTRAL

DO NOT AGREE

STRONGLY DISAGREE

Who do you believe should be entitled to have participation in the Company?

MANAGEMENT ONLY

MANAGEMENT & SHOP STEWARDS

NEUTRAL EMPLOYEES &

SHOP STEWARDS

EMPLOYEES ONLY

-130--

The dominant management style in Makro provides a favorable environment for participative management practice.

STRONGLY AGREE

AGREE NEUTRAL DO NOT AGREE

STRONGLY DISAGREE

State a reason for your answer:

If there were to be a participative management programme at Makro would you be committed to it and why would you be?

YES

NO

State a reason for your answer:

-131-

Profit is far more important than people.

AGREE FULLY

DO NOT KNOW

COMPLETELY DISAGREE

Participation will allow for an environment, in which employees will be more motivated to do their work.

AGREE FULLY

DO NOT KNOW

COMPLETELY DISAGREE

How do you understand the term "participative management" in terms of Company profits?

ALL PROFIT SHARED EQUALLY AT ALL LEVELS

PROFITS SHARED PROPORTIONATELY DEPENDING ON YOUR

LEVEL

PROFITS SHARED BY MANAGEMENT ONLY

PROFITS SHARED BY EMPLOYEES ONLY

PROFITS SHARED BY SHAREHOLDERS

ONLY

-132-

Do Employees have a right to decide on the Company's objectives?

YES COMPLETELY AGREE

MANAGEMENT AND EMPLOYEES DECIDE TOGETHER

NOT AT ALL

Do you believe that you need to be trained in order to perform in a participative management environment.

PERFORM WELL WITHOUT TRAINING

DO NOT KNOW

NEED TO BE TRAINED IN ORDER TO PERFORM

Participative management at Makro will mean that Management will no longer have power, giving the employees all the power, and the Company will suffer financially.

AGREE STRONGLY

DO NOT KNOW

DO NOT AGREE AT ALL

State reason for your answer

-133-

Participative Management means that the Union, (through the shop stewards committee) together with management, make decisions related to the Company.

STRONGLY AGREE

DO NOT KNOW

COMPLETELY DISAGREE

If Makro were to adopt a Participative management style, would you feel threatened that you would lose your job with the Company?

EXTREMELY THREATENED

WOULD NOT FEEL ANY DIFFERENT

NOT THREATENED AT ALL

State reason for your answer

-134-

24. Does participative management, in operation, mean that the political rights of employees become more important than the daily running of the business?

DEFINITELY

DO NOT KNOW i

NOT AT ALL

State a reason for your answer.

THANK YOU

-135-

16 October 1989.

Dear Mr. C. Johnstone

You have been randomly selected to take part in a study at Makro. The study requires you to complete the enclosed questionnaire and return it to me (at Makro Germiston) by no later than the 27th of October 1989.

The study is being done to compare perceptions of "participative Management" within the company. It requires total honesty about the way you interpret the questions, and the strictest confidentiality will be exercised, with your answers.

All levels of management are involved in the study and I will share the results of the study with you, once it is completed in January 1990.

It is very 'important that you complete the questionnaire because the better the response, the more valid and reliable the study will be.

Should you have any questions, or problems, please do not hesitate to contact me at the Germiston Store, at any time, or at home (011) 58-6340.

Thanking you for your participation in this study.

Yours sincerely

THIERRY FUCHSLOCH HUMAN RESOURCES MANAGER - GERM ISTON

858 . 3152 FUCH

300531. 6140

447944

3005316140 EB10 FUCH