Ch 2 - The Evolution of Management Theory

7/31/2019 Ch 2 - The Evolution of Management Theory

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The Evolution of Management Theory

Why study management theory?Theories provide a stable focus for

understanding what we experience

Theories enable us to communicate efficientlyand thus move into more and more complex

relationships with other people

They help us to keep learning about our world(When theories dont match our experiences,

Globalizations, Internet)


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Early thinking about Management

Chinese philosopher Sun Tzus dictums

1. When the enemy advances, we retreat!

2. When the enemy halts, we harass!

3. When the enemy seeks to avoid battle, we

attack!

4. When the enemy retreats, we pursue!


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Early thinking about Management Machiavelli (1531)

An organization is more stable if members have the rightto express their differences and solve their conflicts withinit

While one person can begin an organization, it is lastingwhen it is left in the care of many and when many desire tomaintain it.

A weak manager can follow a strong one, but not another

weak one and maintain authority. A manager seeking to change an established organization

should retain at least a shadow of the ancient customs.


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Schools of Management Scientific Management

Need to increase productivity

Classical Organization Theory School

Need to find guidelines for managing such complex

organizations as factories

The Behavioural School

Emerged partly because the classical approach did not achievesufficient production efficiency and workplace harmony

The Management Science School

Approaching management problems through the use of

mathematical techniques for their modeling, analysis and

solution

The systems approach

View of the organization as a unified, directed system of

interrelated parts


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Scientific Management Fredrick Winslow Taylor

Was an American mechanical engineerwho sought to improve industrial

efficiency

The father of scientific management

Published Principles of Scientific

Management(1911)

The theory of scientific management:

Using scientific methods to define the one best

way for a job to be done

Putting the right person on the job with the

correct tools and equipment

Having a standardized method of doing the job

Providing an economic incentive to the worker


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Limitations of scientific management theory

Workers were treated as machines and not humans) Management stereotyped workers and did not allow themto prove their skills in other areas.

Workers were not allowed to form innovative ways toperform their tasks.

Workers and unions began to oppose the approach ofincreasing productivity as they feared that working harderor faster would lead to layoffs.

Criticism of speed up conditions that placed unduepressures on employees to perform at faster and fasterlevels.

Emphasis on productivity lead some managers to exploitboth workers and customers

Lead to pattern of suspicion and mistrust


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Henry L. Gantt

Industrial Efficiency: Industrial efficiency canonly be produced by the application of scientificanalysis to all aspects of the work in progress.The industrial management role is to improve thesystem by eliminating chance and accidents.

The Task And Bonus System: He linked thebonus paid to managers to how well they taughttheir employees to improve performance.

The social responsibility of business: Hebelieved that businesses have obligations to thewelfare of society that they operate in.

Abandoned the differential rate system as havingtoo little motivational impact

Every worker who finished a days assignedwork load win a 50 cent bones.

Contributors to Scientific Management Theory


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Henry L. Gantt (cont)

The supervisor would earn a bonus for eachworker who reached the daily standard plus anextra bonus if all the workers reached it.

Every workers progress was rated publicly andrecorded on individual bar charts

Gantt originated a charting system for productionscheduling which became the basis for Program

(or Project) Evaluation and Review Technique(PERT) and Critical Path Method (CPM)


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The Gilberths

Frank B. and Lillian M. Gilberth They saw their approach as more concerned withworkers' welfare than Taylorism, which workersthemselves often perceived as primarily concernedwith profit.

This difference led to a personal rift between Taylorand the Gilbreths which, after Taylor's death, turnedinto a feud between the Gilbreths and Taylor'sfollowers.

Collaborated on fatigue and motion studies andfocused on ways of promoting the individual workerswelfare.



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The ultimate aim of scientific management was to helpworkers reach their full potential as human beings

Motion and fatigue were intertwined every motionthat was eliminated reduced fatigue.

Using motion pictures cameras, they tried to find themost economical motions for each task in order to

upgrade performance and reduce fatigue They argued that motion study would raise worker

morale because of its obvious physical benefit andbecause it demonstrated managements concern forworker



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Classical Organization Theory School

Classical organization theory grew out of

the need to find guidelines for managing

such complex organizations as factories

Max Weber

Developed a theory of authority based on

an ideal type of organization (bureaucracy)

Emphasized rationality, predictability,

impersonality, technical competence,

and authoritarianism.

He stressed on technical competence

and performance evaluations to be made

entirely on the basis of merit.

German political

economist andsociologist


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14 principles of Henry Fayol

1 Division of workthe emphasis was onspecialisation for greater efficiency. Thishas been replaced by high levels of multi-skilling.

2 Authoritythe right to issuecommands. This must go along with theresponsibility for the consequences.

3 Disciplineemployees will only obeyorders if management provides goodleadership.


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14 principles of Henry Fayol 4 Unity of commandNo man can be the slave of two

masters. 5 Unity of directionwhile there is always the risk ofrigidity, there must be a unity of purpose and goal congruence.The plan must be agreed and have support at all levels.Communication is very important, both up and down thehierarchy.

6 Subordination of the individual interest to the corporategood. The goals of the firm are always paramount. There can beno room for loose cannons on deck.

7 RemunerationFayol was a pragmatist. He argued fromempirical evidence and ultimately conceded that there is no suchthing as a perfect system. Sixty years later, Charles Handyemphasised that money was a precise, uniquely quantifiablemotivator.


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8 Centralisation/decentralisationwhatever wasappropriate.

9 Scalar chaina hierarchy was necessary forcommunication, but it should not be rigid, nor should itpreclude/prevent horizontal communication.

10 OrderFayol advocated both material and socialorder. It is possible in the former he anticipated the ideasof MRP and JIT, essential to businesses of all sizes. Thelatter suggests an almost Darwinian approach to

recruitment. While the selection of good people is ideal,often a small business may not have the option. It will beunable to sustain passengers. What it will do is makepeople grow.


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11 EquityThis is essential anddeveloped by a combination of justice andunderstanding. Townsend once wroteEverybody must be judged on his

performance, not on his looks, manners,personality or connections.

12 Stability of tenureSuccess tends togo with more stable managerial structures.There is certainly no place in the small,battling business for the frustrated chessplayer.


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13 Initiative - Close to this must befreedom to think and the ability to see

beyond the existing horizon.

14 Esprit de corpsMorale must be

fostered and to survive, a small company

must have high morale at all times. This

means that the talent at the top must have

the ideas, as well as the ability to pullpeople along with him. Successful ideas can

fail if the ability to lead people is absent.


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MaryParkerFollett

Built on the basis framework of the classical school

She introduced many new elements especially in the

area of human relations and organizational structure. She believed that no one could become a whole

person except as a member of a group

Human beings grew through their relationships with

others in organizations (Believed in power of groups) She called management the art of getting things done

through people.

Her holistic model of control took into account not

just individuals and groups but the effects ofenvironment factors as politics, economics andbiology


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Chester I. Barnard

People come together in formal organizations to achieve ends theycannot accomplish working alone.

But as they pursue the organization's goals, they must also satisfy their

individual needs

Barnard taught that the three top functions of the executive were to

(l) establish and maintain an effective communication system,

(2) hire and retain effective personnel, and

(3) motivate those personnel.

The acceptance of authority depends on four conditions.

(1.) Employees must understand what the manager wants them to do.

(2.) Employees must be able to comply with the directive.

(3.) Employees must think that the directive is in keeping with

organizational objectives. (4.) Employees must think that the directive is not contrary to their

personal goals.

Central thesis: An organization can operate efficiently and survive onlywhen the organizations goals are kept in balance with the aims andneeds of the individuals working for it.


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Bernard asked the managers to understand

employees zone of indifference i.e. what

the employee would do without questioningthe managers authority

The more activities that fell within an

employee's zone of indifference, thesmoother and more cooperative an

organization would be.


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THE BEHAVIOURAL SCHOOL: THE

ORGANIZATION IS PEOPLE This school emerged partly because the classical

approach did not achieve sufficient production

efficiency and workplace harmony

People always do not follow a predicted orexpected patterns of behaviour

The Human Relations Movement

Human relations the ways in which managersinteract with their employees

The Hawthorne experiments


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The Hawthorne Studies A series of productivity experiments conducted at Western

Electric from 1927 to 1932 (Elton Mayo) Relationship between lightning and productivity

Experiment 1: Unequal lightning

Experiment 2: Small groups in control rooms

Higher wages, flexible work schedules and rest hours,shortened work day and week

Experimental findings

Productivity unexpectedly increased under imposed

adverse working conditions. Research conclusion

.


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The experiment

6 women from an assembly line

Segregated them from the rest of the factory

Put them under the eye of a supervisor (afriendly observer)

Made frequent changes to their working

conditions Always discussed and explained the

changes in advance


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The changes

Changed the hours in the working week and

in the working day

Increased and decreased the number ofwork breaks and the time of the lunch hour

Occasionally he would return the women to

their original, harder working conditions


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Research conclusion

Work is a group activity. The social world of an adult is primarily patterned by their

work activity.

The need for recognition, security and belonging is moreimportant than physical conditions of the work

environment. A complaint is commonly a symptom manifesting

disturbance of an individuals current position.

An employee is a person whose attitudes and effectivenessare conditioned by social demands from both outside and

inside work environment. Social norms, group standards and attitudes more

strongly influence individual output and workbehavior than do monetary incentives


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The Management Science School Originated in Great Britain during war

Based on numbers

Operations research teams consisting of Mathematicians,Physicians and other scientists)

OR procedures were used for civil purposes after the world

war II and were called the Management Science School Use of computers and communication devises helped to its

popularity

Criticism

It pays less attention to relationships in the organizations It emphasis only the aspects of organization that can be

captured in numbers, missing the importance of people andrelationships.


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The Systems Approach

What is a System?

A collection of parts that operate interdependently toachieve a common purpose.

This approach views the organization as a unified,purposeful system composed of interrelated parts.

It gives managers a way of looking at the

organization as a whole and as a part of the larger,external environment

It believes that activity of one segment of anorganizations affects the other.

Manufacturing Vs Marketing Systems managers grasp the importance of webs

of business relationships


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The Systems Approach

System Defined

A set of interrelated and interdependent parts

arranged in a manner that produces a unified

whole.

Basic Types of SystemsClosed systems

Are not influenced by and do not interact with their

environment (all system input and output is internal)

Open systems

Dynamically interact to their environments by taking

in inputs and transforming them into outputs that are

distributed into their environments


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Implications of the Systems Approach

Coordination of the organizations parts is

essential for proper functioning of the entire

organization.

Decisions and actions taken in one area of

the organization will have an effect in other

areas of the organization.

Organizations are not self-contained and,therefore, must adapt to changes in their

external environment.


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The Contingency Approach

Also sometimes called the situational approach.

There is no one universally applicable set of

management principles (rules) by which to

manage organizations.Organizations are individually different, face

different situations (contingency variables), and

require different ways of managing.


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The Contingency Approach

The situational approach to managementthat replaces more simplistic systems andintegrates much of management theory

Four popular contingency variables

Organization size (coordination)

Routineness of task technology (taskcomplexity dictates structure)

Environmental uncertainty (changemanagement)

Individual differences (managerial styles ,motivational techniques, and job design)


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Lessons from the Contingency Approach

Approach emphasizes situational

appropriateness rather than rigid adherence to

universal principles.Approach creates the impression that an

organization is captive to its environment.

Approach has been criticized for creating the

impression that an organization is a captive of

its environment.


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Current Trends and Issues

Globalization

Ethics

Workforce Diversity

E-business

Knowledge Management

Learning Organizations

Quality Management


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Current Trends and Issues (contd)

GlobalizationManagement in international organizations

Political and cultural challenges of operating in

a global market

Ethics

Increased emphasis on ethics education in

college curriculumsIncreased creation and use of codes of ethics by

businesses


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Workforce Diversity

Increasing heterogeneity in the workforce

More gender, minority, ethnic, and other

forms of diversity in employeesAging workforce

Older employees who work longer and not

retireIncreased demand for products and services

related to aging


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E-Business (Electronic Business)The work preformed by an organization using

electronic linkages to its key constituencies

E-commerce: the sales and marketingcomponent of an e-business

Categories of E-Businesses

E-business enhanced organization

E-business enabled organization

Total e-business organization


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Knowledge Management

The cultivation of a learning culture where

organizational members systematically gather andshare knowledge with others in order to achieve

better performance.

Learning Organization

An organization that has developed the capacity to

continuously learn, adapt, and change.


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Quality Management

A philosophy of management driven by continual

improvement in the quality of work processes andresponding to customer needs and expectations

Inspired by the total quality management (TQM)

Ideas of Deming and Juran

Quality is not directly related to cost.

Ch 2 - The Evolution of Management Theory

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