Chap 2

1. Classical management approaches

a. Scientific management
b. Administrative principles
c. Bureaucratic organization
2. Behavioral Management Approaches
a. Follett’s organizations as communities
b. The Hawthorne studies
c. Maslow’s theory of human needs
d. McGregor’s Theory X and Theory Y
e. Argyris’s theory of adult personality
3. Modern Management Foundations
a. Quantitative analysis and tools
b. Organization as systems
c. Contingency thinking
d. Quality management
e. Knowledge management and organizational learning
f. Evidence-based management
CLASSICAL MANAGEMENT APPROACHES: assumes that people are rational in taking opportunities to
achieve personal and monetary gain
I. Sciencetific management: emphasizes careful selection and training of workers and supervisory support.
It comes with 4 guiding principles:
- A “science” that includes rules of motion, standardized work implements, and proper working conditions.
- Carefully selection of workers with the right abilities.
- Carefully training workers to do the job and proper incentives to cooperate with job “science.”
- Supporting workers by planning and by smoothing the jobs.
Motion study means reducing a task to its basic physical motions. It is encourage that wasted activities in a task
should be eliminated in order to improve efficiency
Insights from scientific management approach:
- Advances of job design,
- Work standards, and incentive wage plans.
II. Administrative Principles
Fayol identifies the five “rules” of management:
1. Foresight—to complete a plan for the future
2. Organization—to provide and allocate resources to implement the plan
3. Command—to lead and evaluate workers to get the best work
4. Coordination—to fit diverse efforts and to ensure information is shared and problems are solved
5. Control—to make sure things happen according to plan and to take necessary corrective action
 The foundation for the 4 functions of management
Principles to guide managers including:
- Scalar chain principle—a clear and unbroken line of communication from the top to the bottom in the
organization. So that information can be shared and transparency of a business is secured
- Unity of command principle—each person should receive orders from only one boss in order to avoid
confusion and power overlapping
- Unity of direction principle—one person should be in charge of all activities that have the same performance
objective
III. Bureaucratic Organization: a rational and efficient form of organization founded on logic, order, and legitimate
authority. His ideas developed after noticing organizations performed poorly since people holding positions of
authority not because of their capabilities, but because of their “privileged” social status. So according to Weber’s
approach, people with ability will take authority and be in charge. A whole organization will be run based on a
hierarchy structure where managers give out order to their lower level and then it is passed on to the subordinates.
The characteristics of bureaucratic organization are:
- Clear division of labor: Jobs are well defined, and workers become highly skilled at performing them
- Clear hierarchy of authority: Authority and responsibility are well defined for each position, and employees
know who they report to
- Formal rules and procedures: established written guidelines and written files are kept for historical record
- Impersonality: Rules and procedures are impartially and uniformly applied, with no one receiving special
treatment
- Careers based on merit: Workers are selected and promoted on ability, competency, and performance
BEHAVIORAL MANAGEMENT APPROACHES: assume that people are social and self-actualizing,
responding to group pressures, and searching for personal fulfillment.
- Follett’s notion of organizations as communities
- The Hawthorne studies
- Maslow’s theory of human needs
- Douglas McGregor
- Chris Argyris
I. Follett’s Organizations as Communities
Organizations as “communities”: managers and workers labor in harmony without one party dominating the other,
and with the freedom reconcile conflicts and differences, the respect for the experience and knowledge of workers,
warned against the dangers of too much hierarchy
Based on Follet’s study, there are insights that are still helpful:
6. Emphasis on employee ownership in order to enhance their commitment
7. Business problems involve a variety of factors that are in relationship to one another
8. And private profits should always be considered vis-à-vis the public good: ethics and CSR
II. The Hawthorne Studies: people’s feelings, attitudes, and relationships with coworkers affected their work, and
that groups were important influences on individuals
Social setting and human relation affect productivity: pleasant social interactions with one another and received
special attention that made employees feel important
Members would restrict their output to avoid the displeasure of the group -> groups have strong negative/ positive
influences on individual productivity
Hawthorne effect: the tendency of people who are singled out for special attention to perform as anticipated
because of expectations created by the situation
III. Maslow’s Theory of Human Needs
Maslow’s theory is based on two underlying principles:
9. Deficit principle—a satisfied need is not a motivator of behavior. It means people act to satisfy “desired”
needs, a deficit
10. Progression principle—a need at any level is activated only when the next-lower-level need is satisfied
IV. McGregor’s Theory X and Theory Y
managers holding Theory X assumes that those who work for them generally dislike work, lack ambition, are
irresponsible, are resistant to change, and prefer to be led rather than to lead
Theory Y assumes that manager believes people are willing to work, capable of self-control, willing to accept
responsibility, imaginative and creative, and capable of self-direction

V. Argyris’s Theory of Adult Personality

Managers who treat people positively and as responsible adults will achieve the highest productivity. Theory is
contradict to the classical management approaches:
V. In scientific management, people will work more efficiently as tasks become simpler and better defined.
Argyris believes that this limits opportunities for self-actualization
 VI. In Weber’s bureaucracy, people work in a clear hierarchy of authority. Argyris worries that this creates
dependent, passive workers
VII. In Fayol’s administrative principles, the concept of unity of direction assumes that efficiency will increase
when a person’s work is planned and directed by a supervisor. Argyris suggests that this creates
conditions for psychological failure.
MODERN MANAGEMENT FOUNDATIONS
I. Quantitative Analysis and Tools

Managers mine data in order to make decisions --> analytics: the systematic analysis of large databases to solve
problems and make informed decisions.

Organizations as Systems

One company achieves great things by combining resources and the contributions of many individuals to achieve a
common purpose.

Subsystems are formed which are interrelated to each other

 High performance occurs only when each subsystem both performs its tasks well and works well in
cooperation with others

II. Contingency Thinking

Contingency thinking matches responses with problems and opportunities specific to different people and settings

 The contingency perspective tries to help managers understand situational differences and respond to them
in ways that fit their characteristics.

III. Quality Management

TQM makes quality principles part of the organization’s strategic objectives, applying them to all aspects of
operations. TQM approaches begin with the total quality commitment applies to every subsystem in an organization

 Measure and control the quality of the whole open system from the inputs to outputs as well as the
feedback which contributes to the improvement of input resources

Continuous improvement: always looking for new ways to improve on current performance.

ISO certification is a global quality benchmark that businesses want to achieve in order to define their quality level

IV. Knowledge Management and Organizational Learning

Knowledge management describes the processes through which organizations use information technology to
develop, organize, and share knowledge to achieve performance success

Intellectual assets such as patent, intellectual property rights, trade secrets, etc. need to be well managed and
continually enhanced

A learning organization is the one that people, values, and systems continuously change and improve its
performance based upon experience
  Help all members to learn through information sharing, teamwork, empowerment, and participation.

V. Evidence-Based Management

Evidence-based management means making management decisions based on what really works rather than on
things that sound good but lack of empirical proof.

Four sources of information:

VIII. Practitioner expertise and judgment: knowledge and past experience

IX. Evidence from the local context
X. Critical evaluation of the best available evidence
XI. Perspectives of those people who might be affected by the decision