The Evolution of The Evolution of Management ThinkingManagement Thinking

Cha

pter

2

New Approach to New Approach to ManagementManagement

SuccessSuccess accrues to those who learn how accrues to those who learn how To be leadersTo be leaders To Initiate changeTo Initiate change To participate in and create organizations To participate in and create organizations

with fewer managers with fewer managers With less hierarchy that can change quicklyWith less hierarchy that can change quickly

Management and Management and OrganizationOrganization

Management philosophies and Management philosophies and organization forms change over time to organization forms change over time to meet new needsmeet new needs

Some ideas and practices from the Some ideas and practices from the past are still relevant and applicable to past are still relevant and applicable to management todaymanagement today

Historical PerspectiveHistorical Perspective

Provides a context or environmentProvides a context or environment Develops an understanding of societal Develops an understanding of societal

impactimpact Achieves strategic thinkingAchieves strategic thinking Improves conceptual skillsImproves conceptual skills Social, political, and economic forces have Social, political, and economic forces have

influenced organizations and the practice of influenced organizations and the practice of managementmanagement

Forces Influencing Forces Influencing

Organizations and ManagementOrganizations and Management Social ForcesSocial Forces - values, needs, and - values, needs, and

standards of behaviorstandards of behavior

Political ForcesPolitical Forces - influence of political and - influence of political and legal institutions on people & organizationslegal institutions on people & organizations

Economic ForcesEconomic Forces - forces that affect the - forces that affect the availability, production, & distribution of a availability, production, & distribution of a society’s resources among competing userssociety’s resources among competing users

Management Perspectives Over TimeManagement Perspectives Over Time

1930Humanistic Perspective

19901890Classical 1940

1950

2000Systems Theory

2000

2010

The Technology-Driven Workplace

1990

2010The Learning Organization

1970Contingency Views

2000

1980Total Quality Management

2000

1940Management Science Perspective

1990

20101870

Exhibit 2.1, p.44

Classical Perspective: 3000 Classical Perspective: 3000 B.C.B.C.

● Rational, scientific approach to Rational, scientific approach to management – make organizations management – make organizations efficient operating machines efficient operating machines

● Scientific ManagementScientific Management● Bureaucratic OrganizationsBureaucratic Organizations● Administrative PrinciplesAdministrative Principles

Scientific Management: Taylor 1856-1915Scientific Management: Taylor 1856-1915

General ApproachGeneral Approach Developed standard method for Developed standard method for

performing each job.performing each job. Selected workers with appropriate Selected workers with appropriate

abilities for each job.abilities for each job. Trained workers in standard method.Trained workers in standard method. Supported workers by planning work Supported workers by planning work

and eliminating interruptions.and eliminating interruptions. Provided wage incentives to workers Provided wage incentives to workers

for increased outputfor increased output..

Scientific ManagementScientific ManagementContributionsContributions Demonstrated the importance of compensation for Demonstrated the importance of compensation for

performance.performance. Initiated the careful study of tasks and jobs.Initiated the careful study of tasks and jobs. Demonstrated the importance of personnel and their Demonstrated the importance of personnel and their

training.training.

CriticismsCriticisms Did not appreciate social context of work and higher Did not appreciate social context of work and higher

needs of workers.needs of workers. Did not acknowledge variance among individuals.Did not acknowledge variance among individuals. Tended to regard workers as uninformed and Tended to regard workers as uninformed and

ignored their ideasignored their ideas

Bureaucracy OrganizationsBureaucracy Organizations Max Weber 1864-1920Max Weber 1864-1920 Prior to Bureaucracy OrganizationsPrior to Bureaucracy Organizations

European employees were loyal to a European employees were loyal to a single individual rather than to the single individual rather than to the organization or its missionorganization or its mission

Resources used to realize individual Resources used to realize individual desires rather than organizational desires rather than organizational goalsgoals

Systematic approach –looked at Systematic approach –looked at organization as a wholeorganization as a whole

Ethical Dilemma: The Supervisor

Bureaucracy OrganizationsBureaucracy Organizations

Positions organized in a hierarchy of authority

Managers subject to Rules and procedures

that will ensure reliable predictable behavior

Personnel are selected and promoted based

on technical qualifications

Administrative acts and decisions recorded

in writing

Management separate from the ownership of the organization

Division of labor with Clear definitions of

authority and responsibility

Exhibit 2.3, p. 49

Administrative PrinciplesAdministrative Principles ContributorsContributors: Henri Fayol, Mary Parker, and : Henri Fayol, Mary Parker, and

Chester I. BarnardChester I. Barnard FocusFocus: :

Organization rather than the individualOrganization rather than the individual Delineated the management functions of Delineated the management functions of

planning, organizing, commanding, planning, organizing, commanding, coordinating, and controllingcoordinating, and controlling

Henri Fayol 1841-1925Henri Fayol 1841-1925

Division of laborDivision of labor AuthorityAuthority DisciplineDiscipline Unity of commandUnity of command Unity of directionUnity of direction Subordination of Subordination of

individual interest individual interest RemunerationRemuneration

Division of laborDivision of labor AuthorityAuthority DisciplineDiscipline Unity of commandUnity of command Unity of directionUnity of direction Subordination of Subordination of

individual interest individual interest RemunerationRemuneration

CentralizationCentralization Scalar chainScalar chain OrderOrder EquityEquity Stability and tenure Stability and tenure

of staffof staff InitiativeInitiative Esprit de corpsEsprit de corps

CentralizationCentralization Scalar chainScalar chain OrderOrder EquityEquity Stability and tenure Stability and tenure

of staffof staff InitiativeInitiative Esprit de corpsEsprit de corps

14 General Principles of Management

Mary Parker Follett 1868-Mary Parker Follett 1868-19331933

Importance of common super-ordinate Importance of common super-ordinate goals for reducing conflict in organizationsgoals for reducing conflict in organizations Popular with businesspeople of her dayPopular with businesspeople of her day Overlooked by management scholarsOverlooked by management scholars Contrast to scientific managementContrast to scientific management Reemerging as applicable in dealing Reemerging as applicable in dealing

with rapid change in global with rapid change in global environmentenvironment

Leadership – importance of people vs. Leadership – importance of people vs. engineering techniquesengineering techniques

Ethics - Power - Empowerment

Chester Barnard 1886-1961Chester Barnard 1886-1961

Informal OrganizationInformal Organization CliquesCliques Naturally occurring social groupingsNaturally occurring social groupings

Acceptance Theory of AuthorityAcceptance Theory of Authority Free willFree will Can choose to follow management ordersCan choose to follow management orders

Humanistic PerspectiveHumanistic Perspective

Emphasized understanding Emphasized understanding human behavior, needs, and human behavior, needs, and attitudes in the workplaceattitudes in the workplace

●Human Relations MovementHuman Relations Movement

●Human Resources PerspectiveHuman Resources Perspective

●Behavioral Sciences ApproachBehavioral Sciences Approach

Human Relations Human Relations MovementMovement

Emphasized satisfaction of Emphasized satisfaction of

employees’ basic needs as employees’ basic needs as

the key to increased worker the key to increased worker

productivityproductivity

Hawthorne StudiesHawthorne Studies Ten year studyTen year study Four experimental & three control groupsFour experimental & three control groups Five different testsFive different tests Test pointed to factors other than Test pointed to factors other than

illumination for productivityillumination for productivity 1st Relay Assembly Test Room experiment, 1st Relay Assembly Test Room experiment,

was controversial, test lasted 6 yearswas controversial, test lasted 6 years Interpretation, money not cause of Interpretation, money not cause of

increased outputincreased output Factor that increased output, Factor that increased output, Human Human

RelationsRelations

Human Resource Human Resource PerspectivePerspective

Suggests jobs should be Suggests jobs should be

designed to meet higher-level designed to meet higher-level

needs by allowing workers to needs by allowing workers to

use their full potentialuse their full potential

Physiological

Safety

Belongingness

Esteem

Self-actualization

Abraham Maslow’s Hierarchy of Needs

Based on needs satisfaction

1908-1970

Dislike work –will avoid itDislike work –will avoid it Must be coerced, controlled, Must be coerced, controlled,

directed, or threatened with directed, or threatened with punishment punishment

Prefer direction, avoid Prefer direction, avoid responsibility, little ambition, want responsibility, little ambition, want securitysecurity

Do not dislike workDo not dislike work Self direction and self controlSelf direction and self control Seek responsibilitySeek responsibility Imagination, creativity widely Imagination, creativity widely

distributeddistributed Intellectual potential only Intellectual potential only

partially utilizedpartially utilized

Douglas McGregor Douglas McGregor Theory X & YTheory X & Y

Theory X Assumptions

Theory Y Assumptions

1906-1964

Douglas McGregor Theory Douglas McGregor Theory X & YX & Y

Few companies today still use Few companies today still use Theory XTheory X

Many are trying Theory Y Many are trying Theory Y techniquestechniques

Experiential Exercise: Theory X and Theory Y Scale

Behavioral Sciences ApproachBehavioral Sciences Approach

Applies social science in an Applies social science in an organizational contextorganizational context

Draws from economics, psychology, Draws from economics, psychology, sociology, anthropology, and other sociology, anthropology, and other disciplinesdisciplines Understand employee behavior and Understand employee behavior and

interaction in an organizational settinginteraction in an organizational setting OD – Organization DevelopmentOD – Organization Development

Sub-field of the Humanistic Management Perspective

Management Science PerspectiveManagement Science Perspective

Emerged after WW IIEmerged after WW II Applied mathematics, statistics, and other Applied mathematics, statistics, and other

quantitative techniques to managerial problemsquantitative techniques to managerial problems Operations Research – mathematical modelingOperations Research – mathematical modeling Operations Management – specializes in Operations Management – specializes in

physical production of goods or servicesphysical production of goods or services Information Technology – reflected in Information Technology – reflected in

management information systemsmanagement information systems

Recent Historical TrendsRecent Historical Trends

● Systems TheorySystems Theory

● Contingency ViewContingency View

● Total Quality Management (TQM)Total Quality Management (TQM)

Systems View of OrganizationsSystems View of Organizations

Exhibit 2.5, p. 58

Contingency View of ManagementContingency View of Management

Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

Elements of a Learning Elements of a Learning OrganizationOrganization

Learning Organization

Open Information

Empowered Employees

Team-Based Structure

Exhibit 2.7, p. 61

Types of E-CommerceTypes of E-Commerce

Business-to-Consumer B2C Selling Products and

Services Online

Business-to-Business B2B Transactions Between

Organizations

Consumer-to-Consumer C2C Electronic Markets

Created by Web-Based Intermediaries

Exhibit 2.8, p. 63