Chapter Two

Traditional and
Contemporary
Issues and
Challenges

Learning Objectives
After studying this chapter, you should be able to:
1.

Summarize and evaluate the classical perspective on

management, including scientific and administrative management,
and note its relevance to contemporary managers.

2.

Summarize and evaluate the behavioral perspective on

management, including the Hawthorne studies, human relations
movement, and organizational behavior, and note its relevance to
contemporary managers.

3.

Summarize and evaluate the quantitative perspective on

management, including management science and operations
management, and note its relevance to contemporary managers.

4.

Discuss the systems and contingency approaches to

management and explain their potential for integrating the other
areas of management.

Case
You are a management
consultant and is
required to recommend
ways to increase the low
productivity of Bapcos
workers at oil processing
department.

How to increase productivity?

Find ways to
increase the
efficiency of the
individual
workers and the
whole
orgnisation

Find ways to
understand
individuals
behavior,
groups and
teams, to
motivate them
and effectively
lead them

Find ways to
improve the
operation,
decision making
and resource
allocation

How to increase productivity?

Find ways to
increase the
efficiency of the
individual
workers and the
whole
orgnisation

Classical

Find ways to
understand
individuals
behavior,
groups and
teams, to
motivate them
and effectively
lead them

Find ways to
improve the
operation,
decision making
and resource
allocation

Behavioral

Quantitative

Management Perspective

Classical
Management
Perspectives

Behavioral
Management
Perspectives

Quantitative
Management
Perspectives

Universal Mgt Perspective: One best way

Management Perspectives
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling

Behavioral
Management
Perspectives
Insights for motivating performance
and understanding
individual behavior,
groups and teams,
and leadership

Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations

An Integrative
Framework of
Management
Perspectives

Universal
Management
Perspectives

Systems Approach
Recognition of internal
interdependencies
Recognition of
environmental influences
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling

Contingency Perspective
Recognition of the situational
nature of management
Response to particular
characteristics of situation
Behavioral
Management
Perspectives
Insights for motivating performance
and understanding
individual behavior,
groups and teams,
and leadership

Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations

Effective and efficient management

THE MANAGEMENT PERSPECTIVE

THE UNIVERSAL MANAGEMENT PERSPECTIVE

Classical
Scientific Management
Administrative Management
Behavioral
Hawthorn Study
The Human Relations Movement
Organizational Behavior
Quantitative
Management Science
Operation Management
INTEGRATING PERSPECTIVES FOR MANAGERS

System Approach
Contingency Theory

Classical Management
Branches
Scientific Management
Increasing the efficiency
of the individual worker
Administrative
Management
Focuses on managing the
total organization

Scientific Management
Perspective

Fredrick Taylor

Henry Gantt

Frank and Lillian Gilbreth

Harrington Emerson

Fredrick Taylor
Soldiering Employees deliberately working at a
slow pace

To increase the efficiency of the individual

worker
Redesigned Jobs: Observe, Select, Train , Implement PPS
Piecework pay system Any work that is produced above
the target level of output will be paid by the piece
Rest periods

Frank and Lillian Gilbreth

(Husband and Wife) Industrial engineers
Frank

Bricklaying
Standardization of Materials
Procedures to perform the job
Result- Increase output by 200%

Lillian

Industrial psychology + Personnel mgt

Both

Cheaper by the Dozen

Henry Gantt
Developed other
techniques,
including the Gantt
chart, to improve
working efficiency
through
planning/scheduling

Henry Gantt A scheduling Devise

Week 1

Completed
Planned
1. Design
2. Purchase Parts
3. Fabricate Bodies
4. Fabricate Frames
5. Build Drive Trains
6. Assemble Carts
7. Test Carts

Week 2
4

Week 3

Week 4

5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26

Harrington Emerson
Consultant -1910
Interstate Commerce
Commission
By using Scientific management
railroads could save $1 million a
day
Advocated job specialization in
both managerial and operating
jobs.

How would the scientific mgt scholars

improve the productivity of workers at
Bapco?

Fredrick Taylor

Henry Gantt

Frank and Lillian Gilbreth

Harrington Emerson

How would the following scientific management

scholars improve the productivity of workers at
Bapco?

Fredrick Taylor

Henry Gantt

Frank and
Lillian Gilbreth

Harrington
Emerson

Classical Management
Branches
Scientific Management
Increasing the efficiency of
the individual worker
Administrative
Management
Focuses on managing the
total organization

Administrative Management
Focuses on managing the total
organization
Henry Fayol,
Max Weber
Chester Barnard
Lyndall Urwick

Administrative Management Perspective

Henry Fayol

Chester Bernard

Max Weber

Lyndal Urwick

Henri Fayol
French industrialist

Systematize the
practice of

management

Identified managerial
functions

Max Weber
German Sociologist
Bureaucratic
Structure
guidelines for
structuring the
organization in the
most efficient way

Chester Barnard
The Functions of the
Executive- book

Subordinates Acceptance of
Authority
= f (understands it;
able to comply with it;
views it as appropriate)

Lyndall Urwick

Scientific Mgt + Administrative

Mgt

Advanced our thinking managerial

functions and managerial
effectiveness
No specific new contributions but
rather the integration of the
previous theories

Administrative Management Perspective

Henry
Fayol

Max
Weber

Chester
Bernard

Lyndal
Urwick

Contributions

Limitations

Foundations

- Is it appropriate now

Identified
processes, skills,
functions

- Is it universal

mgt valid subject

of scientific inquiry

- Is it right to treat
employees as tools

The Behavioral Management

Perspective
Placed emphasis on
individual attitudes
and behaviors and
on group
processes and
recognized the
importance of
behavioral
processes in the
work place.

Branches of Behavioral Mgt

Perspective
Hawthorne Studies

The Human Relations

Movement
Organizational
Behavior

Hawthorn Studies
Years 1927-1932
Founder
Elton Mayo & Colleagues
Place Western Electric

Lighting Experiment
Piecework Incentive Pay
Interview program

Hawthorn Studies - Findings

Importance of Human
Element
Recognition - Feeling
important
Belonging to a group
relationships

The Human Relations

Movement
Proposed that workers
respond primarily to the
social context of the
workplace, including
social conditioning,
group norms, and
interpersonal dynamics

Maslows Hierarchy of
Need
McGregor Theory X &
Y

Maslows Hierarchy of Needs

Self-actualization needs
Esteem needs
Social needs
Safety needs
Physiological needs

Behavioral Theory on How Employees Behave Toward Work pessimistic

Employees
dislike work.
are irresponsible.
lack ambition.
resist change.

Another Theory on How Employees Behave

Optimistic

Employees are
willing to work.
self directed.
accept responsibility.
creative.
self-controlled

Organizational Behavior
Psychology, sociology,
anthropology,
economics, and
medicine.
Individual + Group +
organizational processes
Stress, motivation, group
dynamics, interpersonal
conflict, job satisfaction,
organizational politics

Contributions
+ Challenged
thinking
+ Insights into
- motivation
- group dynamics
- interpersonal
processes in

Limitations
- Prediction of
human behavior
- Adaptation
- Communication

The Quantitative Management

Perspective
Decision making,
mathematical models,
use of computers
Management
Science
Operations
Management

The Quantitative Management

Perspective

Management Science

Focuses specifically on the

development of mathematical
models (simplified representation
of a system, process, or a
relationship)

Operations Management
Applies quantitative techniques
(mgt science) to management to
help the organization produces
goods and services more
efficiently and to run the operation
Inventory Mgt
Linear Programming

Mgt Science and Operations

Management

Mgt Science and Operations

Management

Mgt Science and Operations

Management

BEQ = FC / (TC-VC)
Development mathematical equation
Application of Mathematical Equation using BEQ to determine
the minimum quantity that must be produced to cover all the
costs

Contributions
Techniques to assist
in decision making

Awareness of
complex
organizational
processes

Planning and
controlling

Limitations
- Not fully able to
predict human
behavior
- Costs vs. other
skills
- Assumptions

Are the three

management
perspectives
contradictory or
complimentary

Integrating Perspectives for

Managers
A complete
understanding of
management requires an
appreciation of, classical,
behavioral, and
quantitative approaches.
The systems
perspectives and
Contingency
perspectives

An Integrative Framework of
Management Perspectives
Systems Approach
Recognition
of internal
interdependencies
Recognition of
environmental influences
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling

Contingency Perspective
Recognition
of the situational
nature of management
Response to particular
characteristics of situation
Behavioral
Management
Perspectives
Insights for motivating performance
and understanding
individual behavior,
groups and teams,
and leadership

Effective and efficient management

Copyright Houghton Mifflin Company. All rights reserved.

Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations

The Systems Perspective

of Organizations

Inputs from

the
environment:
material inputs,
human inputs,
financial inputs, and
information inputs.

Transform
ation
Process:
technology,
operating
systems,
administrative
systems, and
control systems

Feedback

Outputs

into
the environment:
products/services,
profits/losses,
employee behaviors,
and information
outputs

Match the example with the appropriate concept that

illustrates it: Open system, Closed System, Subsystem,
Synergy, Entropy
Hewlett-Packard and Compaq is merger is based on the notion that
working together in a cooperative and coordinated fashion will benefit
the two companies more than working alone.
IN ALBA, a decision that was taken by the production department to
lower he quality of the materials used will effect the Finance and
marketing departments. There is an autonomy for each department, but
decisions of one department affects the others. This is because the
departments are -------------.
One of the reasons attributed to the failure of Bahrain Cinema Company
in the 80s was that they ignore the effect of the of VCRs (videos) on
their demand.
UOB monitors the quality of its services by requiring students to
evaluate their instructors and the subject.
The main reason attributed to ENRONs failure is overlooking a simple
process of checking the money used versus the quota of their brokers.

The System Perspective Concepts

Open system
Closed systems
Subsystem
Synergy
Entropy

Open System

An
organizational
system that
interacts with
its
environment

Closed System

An organizational
system that
doesnt interacts
with its
environment

Subsystem

A system
within
another
broader
system

Synergy
Synergy two or
more
subsystems
working together
may often be
more successful
then working
alone

Entropy

A normal
process
leading to
system
decline

Contingency vs. Universals

Universal perspective:
tempting to identify one

best way.

Contingency perspective:

depending on
elements in that situation.

Figure 2.5: The Emergence of

Modern Management
Perspectives

Copyright Houghton Mifflin Company. All rights reserved.

Contemporary Mgt Challenges

Labor shortage
Management of diversified workforce
Values, goals and beliefs of the new generation
workforce

Management of change

Organizational Structure

Information Technology

Globalization and its effect

Ethics and social responsibility

Quality & its importance for competitiveness

Service Economy

 Labor Shortage
Advancement in technology
Demand for technology-related employees (salaries)
Effect on Lower-skills jobs

Management of Diversified Workforce

Differences among people
Internationalization factor
Difficulty in management

Values, Goals and Beliefs of the New

Generation Workforce

Less devoted to long-term career prospects

Less to Conformity and uniformity
How to attract and motivate
Flexibility

 Management of Change
Rapid and constant environment change
Change is an opportunity

New Technology

Internet, e-business, e-government, Information technology

Investment in technology
Employee-privacy
Decision-making quality
Physical or virtual offices

Organization Structure
Webers bureaucratic structure
Now, Flat structure

 Globalization
Role of government in business
Behavioral processes vary widely
Values and beliefs of Bahraini vs. Japanese employee

Ethics and Social Responsibility

Business scandals
Increased contributions to social issues

Quality
Used as a base for competition
Quality and productivity

Service Economy
Traditionally, manufacturer
Now, half of GDP of USA from service industries