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Development of Management Theories / Chapter 2 An Overview

Pre-classicalcontributions

Classical Management Perspective

Behavioural Management Perspective

Quantitative Management Perspective

Integrating

Perspective

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Classical Management Perspective Chapter 2 An Overview

Scientific Management

Fredrick W.TaylorFrank & Lillian GilbrethHenry GanttHarrington Emerson

Administrative Management

Henri FayolLyndall UrwickMax WeberChester Barnard

Classical Management Perspective Today

Approaches Advocates

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Behavioural Management Perspective (Summary)

Hawthorne

Studies

1927-32

Human Relations

Movement

Theory X

Theory Y

OrganizationalBehaviour

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Theory X and Theory YTheory X Assumptions

1. People dislike work & avoid it.

2. Managers must control,

direct, coerce, & threaten

employees to get them to work.

3. People prefer to be directed and have little ambition.

Theory X Assumptions

1. People dislike work & avoid it.

2. Managers must control,

direct, coerce, & threaten

employees to get them to work.

3. People prefer to be directed and have little ambition.

Theory Y Assumptions

1. People like work.

2. People are internally motivated to reach objectives.

3. People seek & accept responsibility

4. People are innovative

5. People are bright

Theory Y Assumptions

1. People like work.

2. People are internally motivated to reach objectives.

3. People seek & accept responsibility

4. People are innovative

5. People are bright

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Quantitative Management Perspective

Management Science – focuses on models,equations, & similar representations of reality

Operations Management – a form ofapplied management science

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Integrating Perspective for ManagersSystems Approach

- Recognition of internal interdependencies

- Recognition of environmental influences

Contingency Perspective

-Recognition of situational nature of management

- Response to particular characteristics of situation

Classical Management Perspective

Behavioural Management Perspective

Quantitative Management Perspective

Effective & Efficient Management

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The Classical Approaches to Management

Frederick Taylor and Scientific Management wrote “Principles of Scientific Management” there is one best way to do any particular

job it can be ascertained and taught to

employees workers are motivated primarily by money

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Time and Motion Studiestiming each aspect of a job to determine

the actual physical movements that will allow it to be done most efficiently

each job broken down to simple, repetitive tasks

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Henri Fayol and Classical Organization Theory focused on the organization, its

functions, and how it should be organized for greatest efficiency

six categoriestechnical (production, manufacturing)commercial (buying, selling)financial

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security (protecting property and persons)accountingmanagerial (planning, organizing,

commanding, coordinating and controlling)

14 principles experience and sense of proportion

should guide the degree of application of any principle in each particular situation

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Fayol’s 14 Principles of Management Division of Labor Authority Discipline Unity of

Command Unity of Direction Subordination of

the individual to the common good

Remuneration

Centralization Hierarchy Order Equity Stability Initiative Esprit de Corps

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Max Weber and Bureaucracy specialization of labour hierarchy of authority specific selection and promotion criteria adherence to a rigid set of rules “management as a career”

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Bureaucracy Max Weber introduced the notion of

bureaucracy Weber felt organizations could overcome

problems if they were managed on a rational, impersonal basis

Bureaucracy emphasizes rules and regulations clearly defined authority and responsibility, and impersonal decisions

Weber saw bureaucracy as an efficient form of organization

Bureaucracy was designed to maintain equal treatment for customers and employees

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Contributions and Limitations of the Classical Approaches management should be practiced

according to principles that managers can learn

insights too simplistic for today’s complex organizations but provided a valuable start

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The Behavioural Approaches to Management

Elton Mayo and the Human Relations Approach focuses on the interaction of individuals

within groups pays heed to the individuals’ needs, goals,

and expectations group dynamics and motivation The Hawthorne Effect

tendency of workers to increase productivity when management pays attention to them

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Mary Parker Follett and Group Dynamics studies in group dynamics, conflict

management, and political processesJoan Woodward and the Behavioural

Science Approach attempts to incorporate findings of social

scientists, recognizing the complexity of individuals and what interests and motivates them

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no one best way to manage or structure and organizationa pragmatic approach is best

Contributions and Limitations must understand interpersonal relations and

motivate and lead management must reflect the gatherings

and application of reliable and specific information, and also the interactions within the organization

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The Systems Approaches to Management

based on the assumption that an organization is a collection of parts, and that it is primarily concerned with the interactions of those parts

System a collection of individual parts that are

coordinated to accomplish a common purpose

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Chester Barnard and the Systems Approaches wrote “The Functions of the Executive” essential element for success is people’s

willingness to contribute their individual efforts for the benefit of the whole system

Inputs influence on an organization from various

aspects• reactions of suppliers, customers, general public,

shareholders, employees; effects of competition; governmental actions; economic factors

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Transformationprocess or change that occurs as an organization

processes inputs and changes a product or service

Outputsproducts or services produced by an organization

Feedbackreceived directly (information) or indirectly

(observation of customer habits)managers must be alert to feedback from a

multiplicity of sources• then act on the feedback

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Contributions and Limitations emphasizing that decisions made in one

part of an organization will affect other parts, including externallymanagers must think broadly

abstract and not very practicalmanagers must think, respond, and observedaily decision making precludes deep

systems-like analysis

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The Contingency Management Approach

Fremont Ksat, James Rosenzweig and Contingency Management recognizes that the appropriate managerial

response to a particular situation is contingent on the specific characteristics of the situation

Universalist Management Approachpresupposes that for every problem there is a best

answer• the managers task is to find that answer and apply it

universally

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Contingent Factors

kind and size of the organizationnecessity for promptnessseriousness of an errortime

manager’s task is to identify the changes, evaluate their effect, and choose what action to take in the new situation

not all situations are uniquebut similar situations warrant similar action

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Theory Z

Developed in 1981 by William Ouchi amalgamation of Western and Japanese-

style management techniquesnot readily adopted by Western

organizations management not ready to sacrifice

personal goals for good of the company as a whole

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Contemporary Management Writers

Michael Porter and Comparative Advantage four generic strategies

cost leadershipdifferentiationcost focusfocused differentiation

• Cost leadership means achieving lower costs per unit than can be achieved by competitors, while still making a profit

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• Differentiation - practice of providing superior quality• Cost focus - controlling costs in a restricted market

area• Focused differentiation - application of differentiation

in a limited area or in a unique product or service

Tom Peters and Excellence Nine Aspects of Well-Managed Companies

Managing ambiguity and paradoxA bias for actionClose to the customerAutonomy and entrepreneurship

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Productivity through peopleHands-on, value-drivenStick to the knittingSimple form, lean staffLoose-tight properties

Peters further suggests a symbiosis with both domestic and foreign customers

some of the companies identified by Peters actually failed financially

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Peter Drucker and Management for Long-

Term Success search for profit not the major objective of

business management is a specific practice businesses must change with the times three key practices

implement improvement in everything learn to apply and make use of knowledgeinnovate constantly

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W. Edwards Deming, Total Quality Management, and Leadership emphasizes employee involvement,

leadership, and continuous improvement

company role not only to make money, but to stay in business and provide jobs through innovation, constant improvement and maintenance

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Philip B. Crosby and “Zero Defects” new emphasis on quality managers do not have to accept defects as

normaltop management must make the commitment

for zero defectsother managers will follow with focus on all

aspects of quality

if the job is done correctly the first time, the cost of achieving quality is lowest

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The Workplace of Tomorrow

no absolutes - theories will be discarded and new ones formed

changes will determine directioneven if theories are discarded, they

will have some impactmanagers who stay informed and

thus knowledgeable will be successful

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Contemporary Management Challenges

Globalization of businessQuality & productivityOwnershipEthics & social responsibilityWorkforce diversityGreater changeEmpowerment