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The Evolution of Management Thinking
The Evolution of Management ThinkingCHAPTER 2CHAPTER 2
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Learning ObjectivesLearning Objectives Understand how historical forces influence the practice
of management. Identify and explain major developments in the history
of management thought. Describe the major components of the classical and
humanistic management perspectives. Discuss the management science perspective and its
current use in organizations.
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Learning Objectives (contd.)Learning Objectives (contd.)
Explain the major components of systems theory, the contingency view, and total quality management.
Describe the learning organization and the changes in structure, empowerment, and information sharing that managers make to support it.
Discuss the technology-driven workplace and the role of outsourcing, supply chain management, enterprise resource planning, knowledge management systems, and customer relationship management.
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Management and OrganizationManagement and Organization
Management philosophies and organization forms change over time to meet new needs
Some ideas and practices from the past are still relevant and applicable to management today
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Historical PerspectiveHistorical PerspectiveHistorical PerspectiveHistorical Perspective
Provides a context or environment Develops an understanding of societal impact Achieves strategic thinking Improves conceptual skills Social, political, and economic forces have
influenced organizations and the practice of management
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Forces Influencing Forces Influencing Organizations and Management Organizations and Management
Forces Influencing Forces Influencing Organizations and Management Organizations and Management
Social Forces - values, needs, and standards of behavior
Political Forces - influence of political and legal institutions on people & organizations
Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users
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Management Perspectives Over Time
Exhibit 2.1
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Classical Perspective: 3000 B.C.Classical Perspective: 3000 B.C.
● Rational, scientific approach to management – make organizations efficient operating machines
● Scientific Management● Bureaucratic Organizations● Administrative Principles
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Scientific Management: Taylor 1856-1915Scientific Management: Taylor 1856-1915
General Approach Developed standard method for performing
each job. Selected workers with appropriate abilities for
each job. Trained workers in standard method. Supported workers by planning work and
eliminating interruptions. Provided wage incentives to workers for
increased output.
Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.10
Scientific ManagementScientific Management
Contributions Demonstrated the importance of compensation for performance. Initiated the careful study of tasks and jobs. Demonstrated the importance of personnel and their training.
Criticisms Did not appreciate social context of work and higher needs of
workers. Did not acknowledge variance among individuals. Tended to regard workers as uninformed and ignored their ideas
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Bureaucratic OrganizationsBureaucratic Organizations
Max Weber 1864-1920 Prior to Bureaucracy Organizations
– European employees were loyal to a single individual rather than to the organization or its mission
– Resources used to realize individual desires rather than organizational goals
Systematic approach –looked at organization as a whole
Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.12
Characteristics of Weberian BureaucracyCharacteristics of Weberian Bureaucracy
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
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Administrative PrinciplesAdministrative Principles
Contributors: Henri Fayol, Mary Parker Follett, and Chester I. Barnard
Focus: – Organization rather than the individual– Delineated the management functions of
planning, organizing, commanding, coordinating, and controlling
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Henri Fayol 1841-1925Examples of General Principles of Management
Henri Fayol 1841-1925Examples of General Principles of Management
Division of work Unity of command Unity of direction Scalar chain
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Mary Parker Follett 1868-1933Mary Parker Follett 1868-1933
Importance of common super-ordinate goals for reducing conflict in organizations
– Popular with businesspeople of her day– Overlooked by management scholars– Contrast to scientific management– Reemerging as applicable in dealing with
rapid change in global environment
Leadership – importance of people vs. engineering techniques
Ethics - Power - Empowerment
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Chester Barnard 1886-1961Chester Barnard 1886-1961
Informal Organization– Cliques– Naturally occurring social groupings
Acceptance Theory of Authority– Free will– Can choose to follow management orders
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Humanistic PerspectiveHumanistic Perspective
Emphasized understanding human behavior, needs, and attitudes in the workplace
Human Relations Movement
Human Resources Perspective
Behavioral Sciences Approach
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Human Relations MovementHuman Relations Movement
Emphasized satisfaction of
employees’ basic needs as the key to
increased worker productivity
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Started in 1895 Four experimental & three control groups Five different tests Test pointed to factors other than illumination
for productivity 1st Relay Assembly Test Room experiment,
was controversial, test lasted 6 years Interpretation, money not cause of increased
output Factor that increased output, Human Relations
Hawthorne StudiesHawthorne Studies
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Human Resource PerspectiveHuman Resource Perspective
Suggests jobs should be designed to
meet higher-level needs by allowing
workers to use their full potential
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Abraham Maslow 1908-1970Abraham Maslow 1908-1970
Identified a hierarchy of needs Problems stem from an inability to satisfy
one’s needs
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Dislike work –will avoid it
Must be coerced, controlled, directed, or threatened with punishment
Prefer direction, avoid responsibility, little ambition, want security
Do not dislike work Self direction and self
control Seek responsibility Imagination, creativity
widely distributed Intellectual potential
only partially utilized
Douglas McGregor Theory X & Y1906-1964
Theory X Assumptions Theory Y Assumptions
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Behavioral Sciences ApproachBehavioral Sciences Approach
Applies social science in an organizational context
Draws from economics, psychology, sociology, anthropology, and other disciplines– Understand employee behavior and
interaction in an organizational setting– OD – Organization Development
Sub-field of the Humanistic Management Perspective
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Management Science PerspectiveManagement Science Perspective
Emerged after WW II Applied mathematics, statistics, and other
quantitative techniques to managerial problems Operations Research – mathematical
modeling Operations Management – specializes in
physical production of goods or services Information Technology – reflected in
management information systems
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Recent Historical TrendsRecent Historical Trends
● Systems Theory
● Contingency View
● Total Quality Management (TQM)
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Systems View of OrganizationsSystems View of Organizations
Exhibit 2.5
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Contingency View of ManagementContingency View of Management
Exhibit 2.6
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TQMTQM
Focuses on managing the total organization to deliver quality to customers.
Four significant elements are– Employee involvement– Focus on the customer– Benchmarking– Continuous improvement
Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.29
Elements of a Learning OrganizationElements of a Learning Organization
Learning Organization
Open Information
Empowered Employees
Team-Based Structure
Exhibit 2.7
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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