Evolution of Management Thought Part 1 Meeting the Challenges of the 21st Century Chapter 2 Evolution of Management Thought

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. 5 6 7 8 The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Environmental Factors Influencing Management Thought Economic Influences The availability, production, and distribution of resources within a society. Social Influences The aspects of a culture that influence interpersonal relationships. Political Influences The impact of political institutions on individuals and organizations.

Environmental Factors Influencing Management Thought (cont’d) Technological Influences The advances and refinements in any of the devices that are used in conjunction with conducting business. Global Influences The pressures to improve quality, productivity, and costs as organizations attempt to compete in the worldwide marketplace.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Figure 2.1 Chronological Development of Management Perspectives

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Figure 2.2 Subfields of the Classical Perspective on Management Focuses on the individual worker’s productivity Focuses on the overall organizational system Focuses on the functions of management

Scientific Management: Taylor Frederick W. Taylor (1856-1915) Father of “Scientific Management. attempted to define “the one best way” to perform every task through systematic study and other scientific methods. believed that improved management practices lead to improved productivity. Three areas of focus: Task Performance Supervision Motivation

Task Performance Scientific management incorporates basic expectations of management, including: Development of work standards Selection of workers Training of workers Support of workers

Motivation Taylor believed money was the way to motivate workers to their fullest capabilities. He advocated a piecework system in which worker’s pay was tied to their output. Workers who met a standard level of production were paid a standard wage rate. Workers whose production exceeded the standard were paid at a higher rate for all of their production output.

Supervision Taylor felt that a single supervisor could not be an expert at all tasks. As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor. This became known as “Functional Foremanship.”

Scientific Management: The Gilbreths Frank Gilbreth Specialized in time and motion studies to determine the most efficient way to perform tasks. Used motion pictures of bricklayers to identified work elements (therbligs) such as lifting and grasping. Lillian Gilbreth A strong proponent of better working conditions as a means of improving efficiency and productivity. Favored standard days with scheduled lunch breaks and rest periods for workers. Strived for removal of unsafe working conditions and the abolition of child labor.

Administrative Management: Fayol Henri Fayol (1841–1925) First recognized that successful managers had to understand the basic managerial functions. Developed a set of 14 general principles of management. Fayol’s managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.

Authority and responsibility Discipline Unity of command Table 2.1 Fayol’s General Principles of Management Division of work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual interest to the common good Remuneration of personnel Centralization Scalar chain Order Equity Stability Initiative Esprit de corps Source: Based on Henri Fayol, General and Industrial Management, trans. Constana Storrs (London: Pittman & Sons, 1949).

Bureaucratic Management Focuses on the overall organizational system. Bureaucratic management is based upon: Firm rules Policies and procedures A fixed hierarchy A clear division of labor

Bureaucratic Management: Weber Max Weber (1864–1920) A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behavior—the approach to management now referred to as “bureaucracy.” Division of labor Hierarchy of authority Rules and procedures Impersonality Employee selection and promotion

Weber’s Forms of Authority Traditional authority Subordinate obedience based upon custom or tradition (e.g., kings, queens, chiefs). Charismatic authority Subordinates voluntarily comply with a leader because of his or her special personal qualities or abilities (e.g., Martin Luther King, Gandhi). Rational-legal authority Subordinate obedience based upon the position held by superiors within the organization (e.g., police officers, executives, supervisors).

Table 2.2 Weber’s Three Types of Authority Type Description Traditional Subordinate obedience based upon custom or tradition Charismatic Subordinate obedience based upon special personal qualities associated with certain social reformers, political leaders, religious leaders, or organizational leaders Rational–legal Subordinate obedience based upon the position held by superiors within the organization

Figure 2.3 Bureaucratic Hierarchical Power Structure

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Classical Perspective Behavioral Perspective Classical versus Behavioral Perspective vs. Classical Perspective Behavioral Perspective Focused on rational behavior Acknowledged the importance of human behavior

Behavioral Perspective Followed the classical perspective in the development of management thought. Acknowledged the importance of human behavior in shaping management style Is associated with: Mary Parker Follett Elton Mayo Douglas McGregor Chester Barnard

Mary Parker Follett Concluded that a key to effective management was coordination. Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people. Believed that management is a continuous, dynamic process. Felt that the best decisions would be made by people who were closest to the situation.

Follett on Effective Work Groups Four principles of coordination to promote effective work groups: Coordination requires that people be in direct contact with one another. Coordination is essential during the initial stages of any endeavor. Coordination must address all factors and phases of any endeavor. Coordination is a continuous, ongoing process.

Elton Mayo Conducted the famous Hawthorne Experiments. “Hawthorne Effect” Productivity increased because attention was paid to the workers in the experiment. Phenomenon whereby individual or group performance is influenced by human behavior factors. His work represents the transition from scientific management to the early human relations movement.

Douglas McGregor Proposed the Theory X and Theory Y styles of management. Theory X managers perceive that their subordinates have an inherent dislike of work and will avoid it if at all possible. Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.

Table 2.3 Comparison of Theory X and Theory Y Assumptions Factor Theory X Assumptions Theory Y Assumptions Employee attitude Employees dislike work and. Employees enjoy work and toward work will avoid it if at all possible. will actively seek it. Management view Employees must be directed, Employees are self-motivated of direction coerced, controlled, or threatened and self-directed toward achieving to get them to put forth adequate effort. organizational goals. Employee view Employees wish to avoid responsibility; Employees seek responsibility; of direction they prefer to be directed and told what they wish to use their creativity, to do and how to do it. imagination, and ingenuity in performing their jobs. Management style Authoritarian style of management Participatory style of management

Chester Barnard Felt that executives serve two primary functions: Must establish and maintain a communications system among employees. Must establish the objectives of the organization and motivate employees. Developed an acceptance theory of authority: Authority of a manager flows from the ability of subordinates to accept or reject an order from the manager once they: Comprehend what the order requires of them. Review the order’s consistency with organization goals. Perceive a personal benefit in obeying the order.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

The Quantitative Perspective Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. This approach has four basic characteristics: A decision-making focus Development of measurable criteria Formulation of a quantitative model The use of computers

The Quantitative Perspective (cont’d) Decision-Making Focus The primary focus of the quantitative approach is on problems or situations that require direct action, or a decision, on the part of management. Measurable Criteria The decision-making process requires that the decision maker select some alternative course of action. The alternatives must be compared on the basis of measurable criteria.

The Quantitative Perspective (cont’d) Quantitative Model To assess the likely impact of each alternative on the stated criteria, a quantitative model of the decision situation must be formulated. Computers Computers are quite useful in the problem-solving process.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Figure 2.4 Basic Structure of Systems

Systems Perspective An approach to problem solving based on an understanding of the basic structure of systems. Environmental interaction Open systems must interact with the external environment to survive. Closed systems do not interact with the environment. Synergy: when all subsystems work together making the whole greater than the sum of its parts. Entropy: the tendency for systems to decay over time.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

The Contingency Perspective A view that proposes that there is no one best approach to management for all situations. Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation. This requires managers to identify the key contingencies in a given situation.

Figure 2.5 Blending Components into a Contingency Perspective

An Example of the Contingency Perspective Joan Woodward’s Research Discovered that a particular management style is affected by the organization’s technology. Identified and described three different types of technology: Small-batch technology Mass-production technology Continuous-process technology

Table 2.4 Production Technology Examples Production Technology Examples Small-batch Custom fabrication machine shop, technology manufacturer of neon advertising signs, print shop specializing in personal business cards, trophy-engraving shop Mass-production Manufacturer of automobiles, manufacturer technology of refrigerators, manufacturer of hair dryers, manufacturer of pencils Continuous-process Oil refinery, flour mill, soft drink bottler, technology chemical processor

Information Technology and Management Style Information technology can facilitate the use of a particular management style. Classical Perspective Quantitative/ Systems Perspectives Facilitated by communications equipment Facilitated by advanced computers (ERP)

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 6 7 8 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. The systems perspective building blocks and their interactions. The nature of the contingency perspective of management. The future issues that will affect the further development of management thought.

Future Issues: Diversity, Globalization, Quality, and Sustainability Heightened concern for diversity initiatives within the workplace and within management Adoption of the concept of workers as decision makers, problem solvers, and team players Creation of a focus on and commitment to the concept of quality (The successes of the Japanese management style – total quality control). Concern over the depletion of natural resources and the degradation of environment, result in the practice of creating less waste and recycling materials when and where possible.

Management in the 21st Century William Ouchi’s Theory Z Japanese-style approach to management developed by William Ouchi Advocates trusting employees and making them feel like an integral part of the organization. Based on the assumption that once a trusting relationship with workers is established, production will increase.

Future Leaders Must: Be thoroughly schooled in the different management perspectives. Understand the various influences that will have a continuing effect on management thinking Be aware of how key business environment variables relate to their organization. Know which elements to select from the various management perspectives that are appropriate for their situation. Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete.