Management

Part I: Introduction
Ch. 2. The evolution of
management

Dan Lungescu, PhD, assistant professor,

Irina Salan, PhD student, teaching assistant
2011-2012

Course outline
Management
Part I: Introduction
Part II: Planning
Part III: Organizing
Part IV: Leading

Part V: Controlling

Part I outline
Management
Part I: Introduction

Ch. 1. Managers job

Ch. 2. The evolution of management
Ch. 3. Organizational environments
Ch. 4. Social responsibility and ethics

Learning objectives
After studying this chapter, you should be able to:
Identify several early innovative management practices and
explain the basic evolution of management theories.
Trace the preclassical contributions to the field of management.
Explain the major approaches within the classical viewpoint of
management.
Describe the major developments contributing to the
establishment of the behavioral viewpoint.
Explain the major approaches within the quantitative viewpoint.
Discuss the relevance of systems theory and contingency theory
to the field of management.
Explain how management in Japan influenced the emerging
Theory Z viewpoint of management.
Explain how current knowledge about management is the result
of innovative processes involving many management pioneers.

Chapter 2 outline
A. The major viewpoints
B. Early management
C. The birth of management ideas

D. Classical viewpoint
E. Behavioral viewpoint
F. Quantitative viewpoint
G. Contemporary viewpoints

A. The major viewpoints

Management theory
Preclassical
contributors

Classical
viewpoint

Behavioral
viewpoint

Quantitative
viewpoint

Contemporary
viewpoints

Scientific
Management

Early
behaviorists

Management
science

Systems theory

Bureaucratic
Management

Hawthorne
studies

Operations
management

Contingency
theory

Administrative
Management

Human
Relations
movement

Management
information
systems

Emerging
views

Behavioral
science
approach

Outline A. The major viewpoints

B. Early management
Early management
Before the Industrial Revolution (England, 18th century).
Beginnings: thousands of years back in time.

Key decisions were made by a central authority such as a

king.
Organizations managed on a basis of a ruler's divine right,
a church's use of dogma, or the military's use of discipline.
Little need to develop and record a formal body of
management.
Early ideas of management tended to reappear or be
reinvented sporadically in one culture after another.
Political, religious, and economic beliefs did not allow
business organizations to develop to any degree.
Outline B. Early management

Early management (2)

Sumerians
Egyptians
Babylonians
Greeks
Romans
Chinese
Venetians
3000
BC

2500
BC

2000
BC

1500
BC

1000
BC

500
BC

AD
1

AD
500

AD
1000

AD
1500

Sumerians: used written rules and regulations for governance.

Egyptians: used management practices to construct pyramids.
Babylonians: used extensive set of laws and policies for governance.
Greeks: used different governing systems for cities and state.
Romans: used organization structure for communication and control.
Chinese: used extensive organization structure for government agencies
and the arts.
Venetians: organization design and planning concepts to control the seas.
Outline B. Early management (2)

Early management concepts

Hierarchy

Chinese bureaucracy (1000 BC) fully developed into a

hierarchy of officials based upon a merit rating system.
Rule of ten
An Egyptian practice of allocating around 10 servants to each
supervisor.
Span of control. Hierarchy of authority

The Hebrews under Moses, then the ancient Roman army:

the concepts of span of control and a hierarchy of authority.
Specialization of labor. Departmentalization. Delegation
Ancient Greeks: Aristotle (in his Politics) commented on the
value of specialization of labor, departmentalization, and
delegation of authority, among other managerial concepts.
Outline B. Early management Early management concepts

Machiavelism
Niccol Machiavelli: The Prince (1513)
An exposition on how to rule successfully by gaining and holding
power.
His comments on the nature of people reflects a set of assumptions
which sounds like an early version of what was much later referred
to as Theory X management.

Whoever desires to found a state and give it laws, must

start with the assumption that all men are bad and ever
ready to display their vicious nature, whenever they may find
occasion for it.

Outline B. Early management Machiavelism

Cottage industry
Skilled non-agricultural work was performed by craft-workers
who, using relatively simple, all-purpose tools, produced an
entire product, such as a chair or a watch, and sold it directly
to individual consumers.

Cottage industry
Merchants sent material to homes where the families spun, bleached,
or dyed the cloth before returning it to the merchant to sell.
Outline B. Early management Cottage industry

Industrial revolution
First workable steam engine (James Watt):

Muscle power replaced with machine power.

Power engines housed in a central factory location
workers left cottages to go to work in factories.
Steam power lower production costs, expanded markets
for more cheaply priced and more available goods.
Expanding market more workers, more machines, and a
larger scale of production on a regular basis increasing
need to find methods of organizing and directing.
Governing way of government, church, or military
replaced by a new philosophy: capitalism (laissez-faire
economics).
Outline B. Early management Industrial revolution

C. The birth of management ideas

Robert Owen (1771-1858, British entrepreneur)
Recognized the importance of human resources.
Became interested in the working and living conditions of his
employees upgraded streets, houses, sanitation,
educational system.
Charles Babbage (1792-1871, English mathematician)
The father of modern computing (first practical mechanical
calculator and a prototype of modern computers); predicted
the specialization of mental work; suggested profit sharing.

Henry R. Towne (1844-1924, American engineer)

Outlined the importance of management as a science and
called for the development of management principles.

Outline C. The birth of management ideas

D. Classical viewpoint
Classical viewpoint
A perspective on management that emphasizes finding ways to
manage work and organizations more efficiently.

I. Scientific management (USA)

II. Bureaucratic management (Germany)
III. Administrative management (France)

Outline D. Classical viewpoint

Classical
organizational
theory

I. Scientific management
Scientific management
An approach that emphasizes the scientific study of work methods
in order to improve worker efficiency.

Major representatives:
1. Frederick Winslow Taylor [1856-1915]
2. Frank and Lillian Gilbreth [1868-1924 / 1878-1972]
3. Henry Laurence Gantt [1861-1919]
4. Harrington Emerson [1853-1931]
Outline D. Classical viewpoint I. Scientific management

1. Frederick Winslow Taylor

The father of scientific management
Mechanical engineer, then management consultant.
Sought to improve industrial efficiency (the efficiency of the
operative employee).
1911: The principles of scientific management.
1914: Shop management.

The principles of scientific management

1. Scientifically study each part of a task and develop the best
method for performing the task.
2. Carefully select workers and train them to perform the task by
using the scientifically developed method.
3. Cooperate fully with workers to ensure that they use the proper
method.
4. Divide work and responsibility so that management is
responsible for planning work methods using scientific principles
and workers are responsible for executing the work accordingly.
Outline D. Classical viewpoint I. Scientific management 1. Frederick Winslow Taylor

2. Frank & Lillian Gilbreth

Frank & Lillian Gilbreth
Proposed using motion studies to streamline
the bricklaying process.
Designed special scaffolding for different types
of jobs.
Reduced the motions involved in bricklaying
from 18 to 4 workers increased the number
of bricks laid per day from 1000 to 2700 with
no increase in physical exertion.
Isolated 17 basic motions therbligs.
Lillians doctoral thesis: The psychology of
management a pioneer in this field.

Outline D. Classical viewpoint I. Scientific management 2. Frank & Lillian Gilbreth

3. Henry Laurence Gantt

Henry Laurence Gantt
Worked with Taylor in several companies
independent consultant.
Gantt chart: a graphic aid to planning,
scheduling, and control.
A unique pay incentive system (not only for
workers but also for their supervisors).
Gantt chart software:

GanttProject (free)
Microsoft Project
ConceptDraw PROJECT
SmartDraw
Gant Chart Software
Project KickStart
Outline D. Classical viewpoint I. Scientific management 3. Henry L. Gantt

Gantt chart: Excel file

http://www.vertex42.com/ExcelTemplates/excel-gantt-chart.html
Outline D. Classical viewpoint I. Scientific management 3. H.L. Gantt Excel Gantt chart

II. Bureaucratic management

Bureaucratic management
An approach that emphasizes the need for organizations to operate
in a rational manner rather than relying on the arbitrary whims of
owners and managers.

Max Weber [1864-1920]

German economist and lawyer.
One of the originators of sociology.
Devoted his attention to the organization itself
as an object of study. Did not directly deal with
task-level issues.
Concerned with designing a structure of
authority-activity relationships which would
facilitate the attainment of organizational goals.
He developed the concept of bureaucracy as an
ideal type of organization.
Outline D. Classical viewpoint II. Bureaucratic management

Max Weber
Contribution
Did not invent the bureaucratic form of
organization, merely described it in detail and
showed why it was superior to previous types of
systems such as monarchies and dictatorships.

Experience tends universally to show that the purely

bureaucratic type of administrative organization [...] is, from
a purely technical point of view, capable of attaining the
highest degree of efficiency and is in this sense formally the
most rational known means of carrying out imperative
control over human beings. It is superior to any other form in
precision, in stability, in the stringency of its discipline, and in
its reliability
Outline D. Classical viewpoint II. Bureaucratic management Max Weber

Bureaucracy
Bureaucracy
The structure and set of regulations in place to control activity,
usually in large organizations and government.

Core features of bureaucracy

Standardized procedures (rule-following).

Formal division of responsibility.
Hierarchy.
Impersonal relationships.
in detail

In practice the interpretation and execution of policy can lead

to informal influence.
Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy

Characteristics of bureaucracy
Specialization of labor
Jobs are broken down into routine, well-defined tasks so that
members know what is expected of them and can become
extremely competent at their particular subset of tasks.

Formal rules and procedures

Written rules and procedures specify the behaviors desired from
members, facilitate coordination and ensure uniformity.

Impersonality
Rules, procedures, and sanctions are applied uniformly regardless of
individual personalities and personal considerations.
Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy Characteristics

Characteristics of bureaucracy (2)

Well-defined hierarchy
Multiple levels of positions, with carefully determined reporting
relationships among levels, provide supervision of lower offices by
higher ones.

Career advancement based on merit

Selection and promotion are based on the qualifications and
performance.

Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy Characteristics (2)

III. Administrative management

Administrative management
An approach that focuses on principles that can be used by
managers to coordinate the internal activities of organizations.

Major representatives:
1. Henry Fayol [1841-1925]

2. Chester Barnard [1886-1961]

Outline D. Classical viewpoint III. Administrative management

Henri Fayol
Henri Fayol [1841-1925]
French industrialist, mining engineer Managing
Director of a large coal and iron company.
Focused on organization-level issues (problems facing
general managers in upper management positions).
1916: General and industrial management
[Administration industrielle et gnrale].

Functions of
management
1. Planning
2. Organizing
3. Commanding
4. Coordinating
5. Controlling

Enterprises
functions

Principles of
management

1. Production
2. Financial
3. Accounting
4. Commercial
5. Security
6. Administrative

[14 principles
within
4 major areas]

Outline D. Classical viewpoint III. Administrative management Henri Fayol

Fayols 4 major areas

Departmentalization
Not only should jobs be broken down into their smallest components
(specialization), but also an organization should be broken down into a
series of specialized departments.

Scalar process
A hierarchy of authority.

Span of control
A person could usually only control five or six people.

Line and staff

To allocate to the manager a staff person (or group) who was an expert in a
specialized area and could provide advice and counsel to the manager.
Outline D. Classical viewpoint III. Administrative management Henri Fayol Areas

Fayols principles of management

Specialization of labor
Encourages continuous improvement in skills and the development of
improvements in methods.

Authority
The right to give orders and the power to exact obedience.

Discipline
No slacking, bending of rules. The workers should be obedient and
respectful of the organization.

Unity of command
Each employee has one and only one boss.

Unity of direction
A single mind generates a single plan and all play their part in that plan.
Outline D. Classical viewpoint III. Administrative management Henri Fayol Principles

Fayols principles of mg. (2)

Subordination of individual interests
When at work, only work things should be pursued or thought about.

Remuneration
Employees receive fair payment for services, not what the company can get
away with.

Centralization
Consolidation of management functions. Decisions are made from the top.

Chain of superiors (line of authority)

Formal chain of command running from top to bottom of the organization,
like military.

Order
All materials and personnel have a prescribed place, and they must remain
there.
Outline D. Classical viewpoint III. Administrative management Henri Fayol Principles (2)

Fayols principles of mg. (3)

Equity
Equality of treatment (but not necessarily identical treatment).

Personnel tenure
Limited turnover of personnel. Lifetime employment for good workers.

Initiative
Thinking out a plan and do what it takes to make it happen.

Esprit de corps
Harmony, cohesion among personnel. It's a great source of strength in the
organization. For promoting esprit de corps, the principle of unity of
command should be observed and the dangers of divide and rule and the
abuse of written communication should be avoided.
Outline D. Classical viewpoint III. Administrative management Henri Fayol Principles (3)

E. Behavioral viewpoint
Behavioral viewpoint
Developed as a school of thought in reaction to the cold,
impersonal work place of the Classical viewpoint (Traditional
management - TM).

Traditional management
Focused on technological and structural considerations.
Classical theorists generally viewed individuals as mechanisms of
production. They were primarily interested in finding ways for
organizations to use these productive mechanisms more efficiently.
Dysfunctional consequences of TM:
Job dissatisfaction and low employee motivation.
Displacement of organizational goals.
Labor-management conflict.
Inability to respond to changing conditions.
Customer/client dissatisfaction
Outline E. Behavioral viewpoint

Behavioral viewpoint (2)

Behavioral viewpoint
A perspective on management that emphasizes the importance of
attempting to understand the various factors that affect human
behavior in organizations.

Development:
I. The early behaviorists
II. The Hawthorne studies
III. The Human Relations movement
IV. The more contemporary behavioral science approach
Outline E. Behavioral viewpoint (2)

I. Early behaviorists
Early behaviorists
The first authors that began to offer alternatives to the emphasis on
engineering that characterized the scientific management
approach.

1. Hugo Mnsterberg

2. Mary Parker Follett

Outline E. Behavioral viewpoint I. Early behaviorists

1. Hugo Mnsterberg
Hugo Mnsterberg [1863-1916]
German psychologist.
Ph.D. in psychology and a medical degree.
1913: Psychology and industrial efficiency
psychologists could help industry in 3 major
ways:
1. Studying jobs and finding ways of identifying
the individuals who are best suited to
particular jobs.
2. Identifying the psychological conditions under
which individuals are likely to do their best
work.
3. Developing strategies that would influence
employees to behave in ways that are
compatible with management interests.
The father of industrial psychology.
Outline E. Behavioral viewpoint I. Early behaviorists 1. Hugo Mnstergerb

2. Mary Parker Follett

Mary Parker Follett [1868-1933]
American, political science.
Social worker who become interested in
employment and workplace issues.
Focused on group dynamics in her work and
writings.
Pioneering ideas on power sharing, conflict
resolution, integration of organizational systems.
Members of organizations are continually
influenced by the groups within which they
operates groups have the capacity to exercise
control over themselves and their own activities.

Outline E. Behavioral viewpoint I. Early behaviorists 2. Mary Parker Follett

II. Hawthorne studies

Hawthorne studies
A group of studies conducted at the Hawthorne plant of the
Western Electric Company during the late 1920s and early 1930s
whose results ultimately led to the human relations view of
management.

Four key research projects:

1. The illumination studies
2. The relay assembly room tests
3. The interviewing program
4. The bank wiring room study
Outline E. Behavioral viewpoint II. Hawthorne studies

1. The illumination studies

Objective
Examining the effect of illumination on worker productivity.

Previous research
Improved lighting led to improved performance.

Failure (abandoned in 1927)

Illumination seemed to only have a minor influence on output.
Other psychological variables were probably involved.

Ending
A new series of studies were begun in the relay assembly test room.
Outline E. Behavioral viewpoint II. Hawthorne studies 1. The illumination studies

high

The illumination studies: results

productivity

experimental group: actual

control group: actual

low

control group: expected

experimental group: expected

low

high
amount of light reduction

Outline E. Behavioral viewpoint II. Hawthorne studies 1. The illumination studies: Results

2. The relay assembly room test

Participants
Five women relay assemblers, one layout operator, and an observerexperimenter.

Changes made in working conditions and incentive plans

1. Rest periods added, work week shortened from 5-1/2 days to 5
days, free refreshments and lunches.
2. Rest pauses and free food removed, the work week returned to
its original length.

Result
Despite all of these changes (even the restrictive ones), the general
trend was for greater output than ever before. The results, like
those of the illumination studies, appeared to make little sense.
Outline E. Behavioral viewpoint II. Hawthorne studies 2. The relay assembly room test

3. The interviewing program

George Elton Mayo [1880-1949]

The founder of Human Relations movement.

Professor at Harvard University.
1930: The interviewing program.
1933: The social problems of an industrialised civilization.

The interviewer's job

To get the workers to express what was on their minds to listen to the
person and summarize from time to time what had been said; no advice
was to be given. The average length of each interview was 1-1/2 hours.

Results
1. Just talking about a problem appeared to act as an emotional release
that seemed to make the workers feel better even though their situation
had not changed.
2. The worker should not be thought of as an isolated individual, but as a
member of a group or groups.
Outline E. Behavioral viewpoint II. Hawthorne studies 3. The interviewing program

4. The bank wiring room study

Objective
To better understand what had happened in the relay assembly test room.

Participants
1. Nine wiremen, three solder men, and two inspectors, placed in a special
observation room.
2. An observer who kept records and an interviewer who tried to sense the
workers' attitudes, thoughts, and feelings.

Changes
Wage payments were based on a group incentive plan which rewarded each
worker on the basis of the group's total output.

Results
Workers had a definite notion of a proper day's work - wiring about two
units per day.
The observer was regarded with some distrust.
Outline E. Behavioral viewpoint II. Hawthorne studies 4. The bank wiring room study

Hawthorne studies: conclusions

Hawthorne effect
The reaction of people to the experiment itself instead of to the planned
change.

Informal organization
Social organization formed by employees to provide the social benefits not
provided by the company's formal organization.

Main contributions
Workers are not so much driven by pay and working conditions as by
psychological needs which can be satisfied by belonging to a work group.
People feel more positive about their work when they have a chance to
participate in decisions regarding that work.
Concern by the supervisor for the workers' needs and recognition of their
contribution to the production process make workers feel more positive
about the organization and more willing to perform at a high level.
Outline E. Behavioral viewpoint II. Hawthorne studies 4. The bank wiring room study

III. Human Relations movement

Directions provided by the Hawthorne studies
1. Emphasis was placed on building more collaborative and
cooperative relationships between supervisors and workers.
2. Managers now needed social skills in addition to technical skills.
3. Managers required a better understanding of how to make
workers feel more satisfied with their jobs.

1. Abraham Maslow

2. Douglas McGregor

Outline E. Behavioral viewpoint III. Human relations movement

1. Abraham Maslow
Abraham Maslow [1908-1970]
American, Ph.D. in psychology, chairman of the
psychology department at Brandeis University.

The theory of the hierarchy of needs 3

assumptions about human nature:
1. Human beings have needs that are never
completely satisfied.
2. Human action is aimed at fulfilling the needs
that are unsatisfied at a given point in time.
3. Needs fit into a somewhat predictable
hierarchy, ranging from basic to higher-level
needs.

selfactualization
esteem
belongingness
safety
physiological

Outline E. Behavioral viewpoint III. Human relations movement 1. Abraham Maslow

2. Douglas McGregor
Douglas McGregor [1906-1964]
Ph.D. at Harvard, professor of industrial
management at the Massachusetts Institute of
Technology.
He developed the concept of Theory X versus
Theory Y, a dichotomy dealing with the possible
assumptions that managers make about workers.
These 2 theories describe managers attitudes
towards employees, and not employee behavior!

Theory X assumptions
Theory Y assumptions
Outline E. Behavioral viewpoint III. Human relations movement 2. Douglas McGregor

Theory X assumptions

1. The average person dislikes work and will try to avoid it.
2. Most people need to be coerced, controlled, directed, and
threatened with punishment to get them to work toward
organizational goals.
3. The average person wants to be directed, shuns
responsibility, has little ambition, and seeks security above
all.

Outline E. Behavioral viewpoint III. Human relations movement 2. D. McGregor Theory X

Theory Y assumptions
1. Most people do not inherently dislike work; the physical and
mental effort involved is as natural as play or rest.
2. People will exercise self-direction and self-control to reach goals
to which they are committed; external control and threat of
punishment are not the only means for ensuring effort toward
goals.
3. Commitment to goals is a function of the rewards available,
particularly rewards that satisfy esteem and self-actualization
needs.
4. When conditions are favorable, the average person learns not
only to accept but also to seek responsibility.
5. Many people have the capacity to exercise a high degree of
creativity and innovation in solving organizational problems.
6. The intellectual potential of most individuals is only partially
utilized in most organizations.
Outline E. Behavioral viewpoint III. Human relations movement 2. D. McGregor Theory Y

IV. Behavioral science approach

Behavioral science
An approach that emphasizes scientific research as the basis for
developing theories about human behavior in organizations that
can be used to establish practical guidelines for managers.

Frederick Herzberg [19232000]

Organizational behavior
Takes a holistic view of behavior by considering individual, group,
and organization processes.
Outline E. Behavioral viewpoint IV. Behavioral science approach

Frederick Herzberg
Frederick Herzberg [19232000]
American psychologist.
2 major contributions:
1. Work enrichment.
2. Two factor theory (Motivator-hygiene theory; 1959).

Two factor theory

2 kinds of factors:
1. Motivator factors: increase satisfaction (achievement,
recognition, work itself, responsibility, promotion, growth).
2. Hygiene factors: decrease dissatisfaction (pay and benefits,
company policy and administration, relationships with coworkers, physical environment, supervision, job security).
Outline E. Behavioral viewpoint IV. Behavioral science approach Frederick Herzberg

F. Quantitative viewpoint
Quantitative viewpoint
Focuses on the use of mathematics, statistics, and information aids
to support managerial decision making and organizational
effectiveness.

Three main branches have evolved:

1. Management science (operations research)
2. Operations management
3. Management information systems

Outline F. Quantitative viewpoint

Quantitative viewpoint branches

Management science (Operations research)
An approach aimed at increasing decision effectiveness through the
use of sophisticated mathematical models and statistical methods.

Operations management
The function, or field of expertise, that is primarily responsible for
managing the production and delivery of an organizations products
and services.

Management information systems

The field of management that focuses on designing and
implementing computer-based information systems for use by
management.
Outline F. Quantitative viewpoint Branches

G. Contemporary viewpoints
Contemporary viewpoints
Major innovations in ways of thinking about management.

Two of the most important contemporary viewpoints :

I. Systems theory
II. Contingency theory

Today: III. Emerging views

Outline G. Contemporary viewpoints

I. Systems theory
Systems theory
An approach based on the notion that organizations can be
visualized as systems.

System
A set of interrelated parts that operate as a whole in pursuit of
common goals.

Organizational systems components

1.
2.
3.
4.

Inputs
Transformation processes
Outputs
Feedback

Outline G. Contemporary viewpoints I. Systems theory

Organizational systems components

Outputs
The products, services, and other outcomes produced by the
organization.

Inputs
The various human, material, financial, equipment, and
informational resources required to produce goods and services.

Transformation processes
The organizations managerial and technological abilities that are
applied to convert inputs into outputs.

Feedback
Information about results and organizational status relative to the
environment.
Outline G. Contemporary viewpoints I. Systems theory Organizational systems components

A systems view of organizations

Resources:
Human
Materials
Equipment
Financial
Informational

Inputs

Managerial and
technological abilities:
Planning
Organizing
Leading
Controlling
Technology

Outcomes:
Products and services
Profits and losses
Employee growth and
satisfaction

Transformation
process

Outputs

Feedback from environment

Information about:
Results
Organizational status
Outline G. Contemporary viewpoints I. Systems theory A systems view of organizations

System theorys advantages

It can analyze systems at different levels.
It provides a framework for assessing how well the various
parts of an organization interact to achieve a common
purpose.
It emphasizes that a change in one part of the system may
affect other parts.
It considers how an organization interacts with its
environment the factors outside the organization that
can affect its operations an organization needs to
operate as an open system.

Outline G. Contemporary viewpoints I. Systems theory System theorys advantages

Open systems
Open system
A system that operates in continual interaction with its
environment.

Closed system
A system that does little or no interacting with its environment and
receives little feedback.

3 major characteristics of open systems

1. Negative entropy.
2. Differentiation.
3. Synergy.
Outline G. Contemporary viewpoints I. Systems theory Open systems

Open systems characteristics

Entropy
The tendency of systems to decay over time.

Negative entropy
The ability to bring in new energy, in the form of inputs and
feedback from the environment, in order to delay or arrest entropy.

Differenciation
The tendency of open systems to become more complex.

Synergy
The ability of the whole to equal more than the sum of its parts.
Outline G. Contemporary viewpoints I. Systems theory Open systems Characteristics

II. Contingency theory

Contingency theory
A viewpoint that argues that appropriate managerial action
depends on the particular parameters of the situation.

Areas of contingency
The contingency approach applies particularly in such areas as:
Environmental factors.
Strategy.
Organizational design.
Technology.
Leadership

Outline G. Contemporary viewpoints II. Contingency theory

Contingency theory (2)

Contingency view
Appropriate managerial action
depends on the situation.

Universal view
Same managerial
principles apply to
every situation.

Situation
2

Situation
1

Outline G. Contemporary viewpoints II. Contingency theory (2)

Situation
3

III. Emerging views

Everging views
Management is a complex endeavor
Innovative approaches are constantly needed to help advance the
knowledge base
Some new approaches develop into major viewpoints when
research and managerial practice show that they are effective.

Japanese management
An approach that focuses on aspects of management in Japan that
may be appropriate for adoption in the United States.

Outline G. Contemporary viewpoints III. Emerging views

Theory Z
Theory Z
A concept that combines positive aspects of American and Japanese
management into a modified approach aimed at increasing US
managerial effectiveness while remaining compatible with the
norms and values of American society and culture.

Author: William Ouchi [born 1943]

Companies that have adopted aspects of Theory Z:

General Motors, Ford, Hewlett-Packard, Intel
Outline G. Contemporary viewpoints III. Emerging views Theory Z

Theory Z (2)

Type A (American)

Type Z (modified American)

Short-term employment
Long-term employment
Individual DM
Consensual decision making
Individual responsibility
Individual responsibility
Rapid evaluation and
Slow evaluation and promotion
promotion
Implicit, informal control with
Explicit, formalized control
explicit, formalized measures
Specialized career path
Moderately specialized career path
Segmented concern
Holistic concern, including family

Type J (Japanese)
Lifetime employment
Consensual DM
Collective responsibility
Slow evaluation and
promotion
Implicit, informal control
Nonspecialized career path
Holistic concern

Outline G. Contemporary viewpoints III. Emerging views Theory Z (2)

Dan Lungescu, PhD, assistant professor ,

Irina Salan, PhD student, teaching assistant
2011-2012