The Evolution of New Approach to Management

Management Thinking
Success accrues to those who learn how

Chapter 2
 To be leaders
 To Initiate change
 To participate in and create organizations
– with fewer managers
– With less hierarchy that can change quickly

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2

Management and Organization Historical Perspective

 Management philosophies and organization  Provides a context or environment

forms change over time to meet new needs  Develops an understanding of societal impact
 Achieves strategic thinking
 Improves conceptual skills
 Some ideas and practices from the past are
still relevant and applicable to management
 Social, political, and economic forces have
today
influenced organizations and the practice of
management

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3 4

Forces Influencing
Organizations and Management Management Perspectives Over Time
Exhibit 2.1, p.44

2000
 Social Forces - values, needs, and The Technology-Driven Workplace
1990 2010
standards of behavior The Learning Organization
1980 2010
Total Quality Management
2000
 Political Forces - influence of political and Contingency Views
1970
legal institutions on people & organizations 1950 2000
Systems Theory
2000
1940
Management Science Perspective
 Economic Forces - forces that affect the 1930 1990
availability, production, & distribution of a Humanistic Perspective
1990
society’s resources among competing users Classical
1890
1940
1870 2010
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1
 Classical Perspective: 3000 B.C. Scientific Management: Taylor 1856-1915

General Approach
● Rational, scientific approach to  Developed standard method for performing each
job.
management – make organizations  Selected workers with appropriate abilities for
efficient operating machines each job.
 Trained workers in standard method.
● Scientific Management  Supported workers by planning work and
● Bureaucratic Organizations eliminating interruptions.
 Provided wage incentives to workers for
● Administrative Principles increased output.

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7 8

Scientific Management Bureaucracy Organizations

Contributions  Max Weber 1864-1920

 Demonstrated the importance of compensation for performance.
 Initiated the careful study of tasks and jobs.  Prior to Bureaucracy Organizations
 Demonstrated the importance of personnel and their training . – European employees were loyal to a single individual
rather than to the organization or its mission
Criticisms
 Did not appreciate social context of work and higher needs of – Resources used to realize individual desires rather
workers. than organizational goals
 Did not acknowledge variance among individuals.
 Tended to regard workers as uninformed and ignored their ideas
 Systematic approach –looked at organization
as a whole
Ethical Dilemma: The Supervisor

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Bureaucracy Organizations Administrative Principles

Division of labor
with Clear definitions of
authority and responsibility
 Contributors: Henri Fayol, Mary Parker,
Personnel are selected
and promoted based Positions organized
and Chester I. Barnard
on technical in a hierarchy of authority
qualifications  Focus:
– Organization rather than the individual
Managers subject to
– Delineated the management functions of
Administrative acts Rules and procedures
that will ensure reliable
planning, organizing, commanding,
and decisions recorded
in writing predictable behavior coordinating, and controlling
Management separate
from the ownership
of the organization
Exhibit 2.3, p. 49

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2
 Henri Fayol 1841-1925 Mary Parker Follett 1868-1933
14 General Principles of Management

 Importance of common super-ordinate goals for

 Division of labor  Centralization reducing conflict in organizations
 Authority  Scalar chain – Popular with businesspeople of her day
– Overlooked by management scholars
 Discipline  Order
– Contrast to scientific management
 Unity of command  Equity – Reemerging as applicable in dealing with rapid change in
 Unity of direction  Stability and global environment

 Subordination of tenure of staff

 Leadership – importance of people vs. engineering
individual interest  Initiative techniques
 Remuneration  Esprit de corps
Ethics - Power - Empowerment
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13 14

Chester Barnard 1886-1961 Humanistic Perspective

 Informal Organization Emphasized understanding human behavior,

– Cliques needs, and attitudes in the workplace
– Naturally occurring social groupings

● Human Relations Movement

 Acceptance Theory of Authority
● Human Resources Perspective
– Free will
– Can choose to follow management orders ● Behavioral Sciences Approach

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15 16

Human Relations Movement Hawthorne Studies

Emphasized satisfaction of employees’  Ten year study

 Four experimental & three control groups
basic needs as the key to increased  Five different tests
 Test pointed to factors other than illumination for
worker productivity 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
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3
 Abraham Maslow’s
Human Resource Perspective Hierarchy of Needs 1908-1970

Suggests jobs should be designed to meet

higher-level needs by allowing workers to Self-
actualization
use their full potential Esteem
Belongingness Chapter 16 – Maslow in more detail

Safety

Physiological
Based on needs satisfaction
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19 20

Douglas McGregor
Theory X & Y 1906-1964 Douglas McGregor Theory X & Y
Theory X Assumptions Theory Y Assumptions

 Dislike work –will avoid it  Do not dislike work

 Few companies today still use Theory X
 Must be coerced,  Self direction and self
controlled, directed, or control
threatened with  Seek responsibility  Many are trying Theory Y techniques
punishment  Imagination, creativity
 Prefer direction, avoid widely distributed
responsibility, little  Intellectual potential
ambition, want security only partially utilized
Experiential Exercise: Theory X and Theory Y Scale

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Behavioral Sciences Approach Management Science Perspective

Sub-field of the Humanistic Management Perspective

 Applies social science in an organizational  Emerged after WW II

context  Applied mathematics, statistics, and other
 Draws from economics, psychology, quantitative techniques to managerial
sociology, anthropology, and other problems
disciplines  Operations Research – mathematical modeling
 Operations Management – specializes in physical
– Understand employee behavior and interaction
production of goods or services
in an organizational setting
 Information Technology – reflected in management
– OD – Organization Development information systems
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4
 Recent Historical Trends Systems View of Organizations

● Systems Theory

● Contingency View

● Total Quality Management (TQM)

Exhibit 2.5, p. 58

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25 26

Contingency View of Management Elements of a Learning Organization

Team-Based Structure

Learning
Exhibit 2.6, p. 59
Organization
Empowered Open
Successful resolution of organizational problems is thought to Employees Information
depend on managers’ identification of key variations in the
situation at hand
Exhibit 2.7, p. 61

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27 28

Types of E-Commerce

Business-to-Consumer B2C
Selling Products and
Services Online

Consumer-to-Consumer C2C
Business-to-Business B2B Electronic Markets
Transactions Between Created by Web-Based
Organizations Intermediaries
Exhibit 2.8, p. 63

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