Chapter 2 the evolution of management thinking

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

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
2

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

3

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

4

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
society’s resources among competing users
5

Management Perspectives Over Time
Exhibit 2.1, p.44

2000
The Technology-Driven Workplace
1990 2010
The Learning Organization
1980 2010
Total Quality Management
2000
1970
Contingency Views
1950 2000
Systems Theory
2000
1940
Management Science Perspective
1930 1990
Humanistic Perspective
1890 1990
Classical
1940 2010
1870
6

Classical Perspective: 3000 B.C.

● Rational, scientific approach to
management – make organizations
efficient operating machines
● Scientific Management
● Bureaucratic Organizations
● Administrative Principles
7

Scientific Management:
Frederick 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.

8

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

9

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

10

Bureaucracy Organizations

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

Managers subject to
Administrative acts Rules and procedures
and decisions recorded that will ensure reliable
in writing predictable behavior
Management separate
from the ownership
of the organization
Exhibit 2.3, p. 49

11

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)

12

Henri Fayol 1841-1925
14 General Principles of Management

 Division of labor  Centralization
 Authority  Scalar chain
 Discipline  Order
 Unity of command  Equity
 Unity of direction  Stability and
 Subordination of tenure of staff
individual interest  Initiative
 Remuneration  Esprit de corps
13

Mary Parker Follett 1868-1933

 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 with rapid change in
global environment

 Leadership – importance of people vs. engineering
techniques
Ethics - Power - Empowerment
14

Chester Barnard 1886-1961

 Informal Organization
– Cliques
– Naturally occurring social groupings

 Acceptance Theory of Authority
– Free will
– Can choose to follow management orders

15

Humanistic Perspective

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

●Human Relations Movement
●Human Resources Perspective
●Behavioral Sciences Approach

16

Human Relations Movement

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

17

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
18

Human Resource Perspective

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

19

Abraham Maslow’s
Hierarchy of Needs 1908-1970

Self-
actualization
Esteem
Belongingness Chapter 16 – Maslow in more detail

Safety
Physiological
Based on needs satisfaction
20

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

 Dislike work –will avoid it  Do not dislike work
 Must be coerced,  Self direction and self
controlled, directed, or control
threatened with  Seek responsibility
punishment  Imagination, creativity
 Prefer direction, avoid widely distributed
responsibility, little  Intellectual potential
ambition, want security only partially utilized
21

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

22

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
23

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
24

Recent Historical Trends

● Systems Theory

● Contingency View

● Total Quality Management (TQM)

25

Systems Theory

 Open systems that are characterized by
entropy, synergy and subsystem
interdependence
 System – a set of interrelated parts that
function as a whole to achieve a common
purpose

26

Systems View of Organizations

Exhibit 2.5, p. 58
27

Contingency View of Management

Exhibit 2.6, p. 59

Successful resolution of organizational problems is thought to
depend on managers’ identification of key variations in the
situation at hand

28

Total Quality Management

 W.Edwards Deming – “father of the quality
movement”
 A concept that focuses on managing the total
organization to delivery quality to customers
– Employee involvement
– Focus on the customer
– Benchmarking
– Continuous improvement

29

Learning Organizations

 An organization in which everyone is
engaged in identifying and solving problems,
enabling the organization to continuously
experiment, improve and increase its
capability.

30

Elements of a Learning Organization
Team-Based Structure

Learning
Organization
Empowered Open
Employees Information

Exhibit 2.7, p. 61

31

Technology-Driven Workplace

 E-Business – work an organization does by
using electronic linkages

 E-Commerce – business exchanges or
transactions done electronically

32

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

33

Chapter 2 the evolution of management thinking

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