Evolution of Management Theories Evolution of Management Theories

Learning Outcomes Understand how historical forces influences the practice of management. Identify and explain major developments in the evolution of management thought. Describe the major components of the classical and humanistic management perspectives. Discuss the management science perspective and its current use in organizations. Explain the major concepts of systems theory, the contingency view, and total quality management. Explain what a learning organization is and why this approach has become important in recent years.

Are You a New-Style or an Old-Style Manager? Management and managers are undergoing tremendous change. Past strategies are no longer effective in today’s dynamic business environment. History provides perspective and a broader view. Manager can find patterns and insight from history.

Management and Organization Managers must “see the big picture” Social Forces: culture and values Political Forces: political and legal institutions and systems Economic Forces: availability and distribution of resources Mangers must face environmental turbulence

Management Perspectives Over Time

Classical Perspective The early study of management. 19th – late 20th Century Scientific Management Bureaucratic Organizations Administrative Principles Very powerful, gave companies fundamental skills for high productivity.

Scientific Management Frederick Winslow Taylor (1856-1915), father of scientific management Focus on improving efficiency and labor productivity Workers could be retooled like machines Managers would need to change Incentive systems for meeting standards Others added to the theories Lillian M. Gilbreth added a human component

Scientific Management at UPS “Each job has a policy manual detailing the rules that a person needs to follow to ensure efficiency. Drivers are told to walk to a customer’s door at a brisk pace of 3 feet per second, carrying the package in the right hand and clipboard in the left. They should knock on the door so as not to lose valuable seconds searching for a doorbell.” Michael Eskew Chairman and CEO, UPS

Characteristics of Scientific Management

Bureaucratic Organizations Max Weber (1864-1920), a German theorist introduced the bureaucratic theories Rational authority—more efficient and adaptable to change Selection and advancement would be focused on competence and technical qualifications The term bureaucracy has taken on a negative tone, associated with endless “red tape”

Characteristics of Weberian Bureaucracy

Bureaucratic Continuum LOW MIDRANGE HIGH

Potential Benefits of Bureaucracy Most effective when: Large amounts of standard information have to be processed The needs of the customer are known and are unlikely to change The technology is routine and stable The organization has to coordinate the activities of employees in order to deliver a standardized service/product to the customer

Potential Costs of Bureaucracy Protection of authority Slow decision making Rigid rules and red tape Incompatible with changing technology Incompatible with 21st century workers’ values

Administrative Principles Henri Fayol (1841-1925), French mining engineer and other contributors led the ideas Fayol wrote down his own management practices In the text, General and Industrial Management; 14 general principles were outlined Several of the principles include: Unity of Command Division of Work Unity of Direction Scalar Chain Fayol identified five functions of management: Planning, Organizing, Commanding, Coordinating, and Controlling

Humanistic Perspective Led by Mary Parker Follett and Chester Barnard Importance of understanding human behaviors: needs, attitudes and social interactions Human Relations Movement Human Resources Perspective Behavioral Sciences

Mary Parker Follett’s Contributions Managers need to communicate with workers Workers should participate in solving problems Goal: Improve Coordination Managers need to establish good working relationships with employees

Barnard’s Contributions People should continuously communicate and cooperate with one another. Acceptance theory of authority holds that employees have free will and, thus, choose whether to follow management’s orders. Employees will follow orders if they: Understand what is required Believe the orders are consistent with organization goals See positive benefits to themselves in carrying out the orders

Human Relations Movement Control comes from the individual worker rather than authoritarian control The Hawthorne studies found increased output due to managers’ better treatment of employees Productivity increased from feelings of importance? Money mattered too? Created a focus on positive treatment of employees

Human Resources Perspective Focus on job tasks and theories of motivation Reduce dehumanizing or demeaning work Allow workers to use full potential Main contributors: Abraham Maslow and Douglas McGregor Maslow’s Hierarchy of Needs McGregor’s Theory X/Theory Y Perspective came from the idea that cows gave more milk when they were more satisfied

Theory X and Theory Y

Behavioral Sciences Approach Scientific methods that draw from sociology, psychology, anthropology, economics and other disciplines Focus on human behavior and interaction Organizational development came from behavioral sciences approach Applied behavioral sciences to improve organizational health and effectiveness

Management Science Perspective Developed to meet changing and dynamic environment created from WWII Engaged mathematics, statistics and quantitative techniques to aid in decision making Increased study of management led by Peter Drucker Use of technology and programming for optimizing operations Introduced new subsets of management: Operations Research Operations Management Information Technology

Recent Historical Trends Systems Theory. A holistic view of management as a interrelated parts to achieve a common purpose. Contingency View. Successful resolution of organizational problems depends on situations. Total Quality Management. Management of the total organization to deliver quality.

The Systems View of Organizations

Contingency View of Management

Total Quality Management W. Edward Deming, known as the father of the quality movement US initially scoffed at Deming During the 1908s and 1990s, quality became a focus to meet global competition Four key elements of quality management: Employee involvement Focus on customer Benchmarking Continuous improvement