The Evolution of Management Thinking

Chapter 2

New Approach to Management

Success accrues to those who learn how To be leaders To Initiate change To participate in and create organizations
with fewer managers
With less hierarchy that can change quickly

Management 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

Historical 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

Forces Influencing 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 societys resources among competing users

Management Perspectives Over Time

Exhibit 2.1, p.44

The Technology-Driven Workplace The Learning Organization

2000 2010 2010 2000 2000 2000

1990

Total Quality Management Contingency Views 1950 Systems Theory 1940 Management Science Perspective 1930 Humanistic Perspective 1890 Classical 1870 1970

1980

1990 1990 1940 2010

Classical Perspective: 3000 B.C.

Rational, scientific approach to management make organizations efficient operating machines Scientific Management Bureaucratic Organizations Administrative Principles

Scientific 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.

Scientific 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

Bureaucracy 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

Ethical Dilemma: The Supervisor

Bureaucracy Organizations
Division of labor with Clear definitions of authority and responsibility
Personnel are selected and promoted based on technical qualifications Positions organized in a hierarchy of authority

Administrative acts and decisions recorded in writing Management separate from the ownership of the organization

Managers subject to Rules and procedures that will ensure reliable predictable behavior

Exhibit 2.3, p. 49

Administrative Principles

Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard Focus: Organization rather than the individual Delineated the management functions of planning, organizing, commanding, coordinating, and controlling

Henri Fayol 1841-1925

14 General Principles of Management

Division of labor Authority Discipline Unity of command Unity of direction Subordination of individual interest Remuneration

Centralization Scalar chain Order Equity Stability and tenure of staff Initiative Esprit de corps

Mary Parker Follett 18681933

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 Ethics - Power - in with rapid change Empowerment global environment

Leadership importance of people vs.

Chester Barnard 1886-1961

Informal Organization
Cliques Naturally occurring social groupings

Acceptance Theory of Authority

Free will Can choose to follow management orders

Humanistic Perspective
Emphasized understanding human behavior, needs, and attitudes in the workplace

Human Relations Movement

Human Resources Perspective

Behavioral Sciences Approach

Human Relations Movement

Emphasized satisfaction of
employees basic needs as the key to increased worker productivity

Hawthorne Studies

Ten year study 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

Human Resource Perspective

Suggests jobs should be
designed to meet higher-level needs by allowing workers to use their full potential

Abraham Maslows Hierarchy of Needs

1908-1970
Selfactualization Esteem Belongingness

Safety
Physiological
Based on needs satisfaction

Douglas McGregor 1906-1964 Theory X & Y

Theory X Assumptions

Dislike work will avoid it Must be coerced, controlled, directed, or threatened with punishment Prefer direction, avoid responsibility, little ambition, want security

Theory Y Assumptions

Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely distributed Intellectual potential only partially utilized

Douglas McGregor Theory X&Y

Few companies today still

use Theory X
Many are trying Theory Y

techniques
Experiential Exercise: Theory X and Theory Y Scale

Behavioral Sciences Approach

Sub-field of the Humanistic Management Perspective

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

Management 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

Recent Historical Trends

Systems Theory Contingency View Total Quality Management (TQM)

Systems View of Organizations

Exhibit 2.5, p. 58

Contingency 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 Organization

Team-Based Structure

Learning Organization Empowered Employees Open Information

Exhibit 2.7, p. 61

Types 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