Part One

OVERVIEW

MODULE 1 Contemporary Concepts of Management

Learning Objectives The student after reading this module is expected to: 1. 2. 3. Know the concept of management. Perceive the nuances of various definitions of management Be able to identify the various elements of management and appreciate their operational implications.

1.

Management is the process by which human efforts are coordinated and combined with other resources to accomplished organizational goals and objectives. Mary Parker Folett defines management as the art of getting things done through people.

Management requires an understanding of the economic principle of the division of labor, which breaks down into subtasks, and the coordination of effort, which recognize the subtasks into an efficient and effective whole.

2.

Management is making the most effective use of available resources, whether in form of machines, money or people (men/women). The process of organizing, using, and controlling human activities and other resources toward specific ends.

2.1

Management as concept and process should not be confused with the term management commonly used in labor-management relations. Management in this case refers to the people responsible for the management of an organization, i.e., for directing, planning and running of its operations, for the implementation of its policies and the attainment of its objectives. Management refers to the group of persons responsible for running an organization or directing human activity toward specific ends.

3. 4.

Management is the process of coordinating human, informational, physical and financial resources into accomplish organizational goals Management is the process of coordinating the resources of an organization so as to achieve the primary goals of the organization.

5. 6.

Management is the process of planning, organizing, leading and controlling a businesss financial, physical, human, and information resources in order to achieve its goals Management involves Coordinating the human, material and financial resources toward accomplishing organizational goals effectively and efficiently. Relating the organization to the external environment and responding to societal needs. Developing an organizational climate where people can accomplish their individual and collective goals. Performing certain definable function such as goal setting, planning, assembling resources, organizing, implementing, and controlling. Carrying out various interpersonal, informational, and decisional roles

7. 8. 9. 10. 11. 12.

Management is the process of reaching organizational goals by working with and through people and other organizational resources. Management is the process by which a cooperative group directs actions of others toward common goals. (Massie and Douglas.) Management is the process of working with and trough others to effectively achieve organizational objectives by efficiently using limited resources in a changing environment. (Kreitner.) Management is the coordination of all resources through the process of planning, directing and controlling in order to attain stated objectives. (Sisk) Management is establishing an effective environment for people operating in formal organizational groups. (Koontz and ODonnell.) Management entails activities undertaken by one or more persons in order to coordinate the activities or others in the pursuit of ends that cannot be achieved by any one person (Donnelley, Gibson & Evancevich.) Management is a process imbedded in a system of patterned relationships.

13.

Checkpoints 1. 2. 3. 4. From the various definitions of management, what are the elements of management? Explain Management as a process. Can it consist of a single act? Or is it a series of acts? Can the process be linear with a beginning and an ending? Or it is cyclical? And repetitive? Fashion your own definition of management. Does your concept or definition of management apply to your own company or organization or one you know vicariously or by observation? Elaborate.

MODULE 2 Management Throughout Recorded History

Learning Objectives:
After reading and reflecting on the historical data on management presented in this module, the student is expected to: 1. 2. Appreciate the fact that human beings from the dawn of history knew and practiced what are now called concepts, principles, and practices of management. Recognized the fact that the creation, construction and development of cultures and civilization throughout the ages could not be possible without the knowledge of the concepts, principles and practices of management. 1. Introduction

1.1

Managers should be concerned with historical perspectives. They need to know the facts about what has happened in a similar situation and to relate them to other experiences and other knowledge. Only when they understand the problem environment and how it developed can they fully understand the problem they are trying to solve. Managers search for patterns in the problems they face, and they tend to use learned solutions when those patters recur. Experienced managers have more experiences to draw on than less experienced managers, but all managers can benefit from the history discussed in management books or cases. No manager has enough personal experience to deal with every problem he or she faces. As the rate of change in our society continues to accelerate, more and more new situations will occur that are likely to resemble others that occurred in the past. This allows effective solutions to be repeated and ineffective solutions to be avoided across all of the organizations economic functions: marketing, finance, operations, human resources management, and information management. A successful manager needs to know what worked before, what didnt, and why. You will benefit from knowing the history of management because, as a practicing manager, you dont have to make the same mistakes that your predecessors made. You will be able to consult the appropriate sources to discover what worked and what didnt. You can then decide the best ways of managing yourself. Understanding history gives you basis for acting with your future coworkers and with others who are practicing and studying management now, or who will be in the future. History helps you recognize when to act and when not to. Knowing history helps you identify the common themes that seem to recur. By knowing how issues have been handled in the past, you should also know better how to act now.

1.2

1.3

1.4
1.5

1.6

2.

Precursors of Modern Management Theory

2.1.

Historian Daniel A. Wren observed that management is as old as man. But, as he also points out, only recently has there been scientific interest in the process. This is probably because we have only recently realized that how we manage our resources affects what we get from them and because large business organizations have only existed since the early nineteenth century. However, early civilizations did practice management and in a way not very different from it was done until the late nineteenth and early twentieth centuries. The Chronology that follows lists the major contributions to the practice of management from approximately 5000 B.C. to the late 20th century. To 1776, when Adam Smith described the benefits of the division of labor in The Wealth of Nations, did mass production, which is the foundation of our current economic success, become recognized as possible and desirable. Until the 1800s, there really was no systematic development of management theory, and perhaps only in the mid-1990s did it become useful to the average manager.

2.2.

2.3. 3.

Management Reflects Society 3.1. Management philosophy and its related practices reflect the society within which they exist its culture, its values, its needs the technological, social, political, and economic forces at work in society change, and therefore management has changed and must continue to change. Before the twentieth century, for example, the practice of management was largely authorization and was based on hierarchical organizational structures similar to those developed by the early military forces of the Egyptians, Romans and other ancient societies. The decentralized organizational structure of the Roman Catholic Church slightly modified these structures. As Western society became less agriculturally and more industrially based, its leaders and scholars began to realize that traditional management approaches were unsatisfactory. Entering the twentieth century, some 150 years after the beginning of the industrial revolution and some 35 years after the U.S. economy became industrially based (1865), managers began to ponder all the factors that should be considered in managing and in alternative ways of managing. It is from this point that we pursuer the history of management in detail.

3.2.

3.3. 3.4.

3.5.

4.

Chronology of Organization Theory and Management Practices Approximate Year 5000 B.C. 4000-2000 B.C. Individual or Ethnic Group Sumerians Egyptians Major Managerial Contribution Established written records for both government and commercial use Recognized need for forecasting, planning

organizing, and controlling. Employed inventory practices, sales ledgers, taxes, developed bureaucracy for agriculture and construction, i.e. pyramids; employed fulltime administrators. 4000 B.C. Hebrews Exception principle, departmentation; Ten Commandments; long-range planning, span of control Enforced law for conducting business, including standards for wages and obligations of contractors; Use of witnesses and writing for control; establishment of standards of wages; recognition that responsibility cannot be shifted. Centralization in Organization. During Exodus from Egypt, Jethro, fatherin-law of Moses, urges Moses to delegate authority over the tribes of Israel along hierarchical lines. Concepts of organization, scalar principle, exception principle Recognized need for organization, planning, directing, and controlling Production control and wage incentives Recognized need for systems and standards Principle of Specialization recognized Recognized need for planning, directing, and organizing. Sun Tzus Art of War recognizes the need for hierarchical organization, interorganization communications, and staff planning. Developed the work ethics. Began scientific method for problem solving Enunciation of universality of management. Recognized management as a separate art. Records the first known description of the

2000-1700 B.C.

Babylonians (Hammurabi)

1600 1491

Egyptians Hebrews

1100 600 500

Chinese Nebuchadnezzar Mencius Chinese Sun Tzu

500 400 400

Greeks Socrates Xenophon

advantages of the division of labor when he describes an ancient Greek shoe factory. Cyrus Recognized need for human relations. Use of motion study, layout, and materials handling In The Politics asserts that the specific nature of executive powers and functions cannot be the same for all states (organizations), but must reflect their specific cultural environment Scientific method applied. Use of work methods and tempo Principle of specialization enunciated. Use of staff Developed of factory system for manufacturing armaments, pottery, and textiles; built roads for distribution; organized joint stock companies; used specialized labor, formed guilds; employed an authoritarian organizational structure based on function. Used of job descriptions. Use of job specifications Unity of Command Golden rule. Human relations. Delegation of authority. Decentralized hierarchical structure with centralized strategic control and policies An important pioneering Muslim scholar, explores the administration of essential Islamic government functions, including public financial policy, taxation, and criminal justice, in Kitab al-Kharaj (The Book of Land Taxes). (Year is approximate) Listed traits of a leader. (The Governmental Rules), by al-

360

Aristotle

350

Greeks Plato

325 200

Alexander the Great Romans

175 50 A.D. 20 284 A.D. 300 20th Century 770

Cato Varro Jesus Christ Diocletian Romans Catholic Church Abu Yusuf

900 1058

Alfarabi Al-Ahkam As-Sultaniyyah

Mawardi, examines Islamic constitutional law, theoretical and practical aspects of Muslim political thought and behavior, and the behavior of politicians and administrators in Islamic states. 1093-1100 Ghazali Listed traits of a manager. Emphasizes the role of Islamic creed and teachings for the improvement of administrative and bureaucratic organization in Muslim states, particularly the qualifications and secretaries, in Ihya Ulum ad-Din (The Revival of the Religious Sciences) and Nasihat al-Muluk (Counsel for Kings). (Year is approximate.) Established legal framework for trade & commerce (The Principles of Religious Government), ibn Taymiyyah, the father of Islamic administration, uses the scientific method to out line the principles of administration within the framework of Islam, including the right man for the right job, patronage and the spoils system. (Year is approximate.) Developed double-entry book keeping. An Introduction to History, by Muslim scholar Ibn Khaldun, argues that methods for organizational improvement can be developed through the study of the science of culture. Ibn Khaldun specifically introduces conceptions of formal and informal organization, organizations as natural as organism with limits beyond which they cannot grow, and spirit de corps. Cost accounting practiced. Use of journal entries and ledger. Forms of business organization; work in process accounting used. Cost of accounting; checks and balances for control; numbering of inventoried parts; inter-changed ability of parts; use of

1300 1300

Venetians As-Siyasah Ash-Shariyyah

1340 1377

Luca Pacioli (Genoese) Muqaddimah

1395 1410 1418 1436

Francisco Di Marco Soranzo Brothers Barbarigo Arsenal of Venice, Venetians

personnel management; standardization of parts; inventory control cost control. 1500 1513-1525 Sir Thomas More Niccolo Machiavelli Called for specialization; decried sins of poor management and leadership Principle of unity of command. Reliance on mass consent principle; recognized need for cohesiveness in organization; enunciated leadership qualities. Book of advice to all would be leaders, The Prince, is published five years after its authors death; it will become the progenitor of all how to succeed books that advocate practical rather than moral actions. Source of authority theory; impact of automation. Focused on division of labor & mass production as key to prosperity. Developed capitalism as frame work of economic activity to replace feudalism. Application of principle of specialization of manufacturing; workers control concepts; pay back computations. In The Wealth of Nations, discusses the optimal organization of a pin factory; this becomes the most famous & influential statement of the economic rationale of the factory system and the division of labor. 1785 1799 Thomas Jefferson Eli Whitney Called attention to concept of interchange parts. Scientific method; use of cost accounting and quality control; applied interchangeable parts concept; recognized span of management. Standard operating procedures; specifications; work methods; planning, incentive wages, standard times; standard data; employee Christmas parties bonuses announced at Christmas; mutual employees insurance society; use of audits.

1532

Machiavellis The Prince

1767 1776

Sir James Stewart Adam Smith

1800

James Watt Matthew Boulton Soho, England

1810

Robert Owen New Lanark, Scotland

Need for personnel practices recognized and applied; assumed responsibility for training worker; built clean row homes for workers. One of the first to recognized importance of human resources; improved working conditions; reduced hours of work; raised minimum age of work for children.

1813

Robert Owen

Address to the Superintendents of Manufactories, puts forth the revolutionary idea that managers should pay as much attention to their vital machines (employees) as to their inanimate machines. Analyzing and synchronizing human motions. Improved efficiencies of production using mathematical problem-solving techniques; stressed human resources; used Scientific approach, specialization, division or labor, motion and time study, cost accounting, effect of various colors on employee efficiency. On the Economy of Machinery and Manufactures anticipates many of the motions of the scientific management movement, including basic principles of management such as the division of labor.

1820 1832

James Stuart Mill Charles Babbage

1835

Marshall, Laughin, et. al.

Recognition and discussion of the relative importance of the functions of management. Span of control; unity of command; control of labor and materials; specialization division of labor; wage incentives Principles of organization, communication and information applied to railway.

1850

Mill, et al.

1855

Henry Poor

1855

Daniel C. McCallum

Use of organization chart to show management structure. Application of systematic management to railways. In his annual report as superintendent of the New York and Erie Railroad Company, states his six basic principles of administration; the first was to use internally generated data for managerial purposes. Made motions study of spade use; studied effect of different tools of worker; fatigue study. Established first college course in business management. The manager of an army arsenal, published The Cost of Manufactures and the Administration of Workshops, Public and Private, which asserts that there is a science of administration that is based upon principles discoverable by diligent observation. Art of management; science of administration

1871

W. S. Jevons

1881 1885

Joseph Wharton Henry C. Metcalfe

1886

Henry R. Towne

The Engineer as an Economist, read to the American Society of Mechanical Engineers, encourages the scientific management movement Science of management. Premium plan of wage payment. Scientific management; The science of work and functional management cost system; methods study; time study; Scientific of time and motion study; therbligs micromotions. Task and bonus system; humanistic approach to labor; Gantt charts; managements responsibility for training workers. Becomes the father of the concept of social systems; his societal notions

1891 1900

Frederick Halsey Frederick w. Taylor

Frank B. Gilbert Lillian Gilbert 1901 Henry L. Gantt

1902

Vilfredo Pareto

10

would later be applied by Elton Mayo and the human relationists in an organizational context. 1903 1904 Frederick W. Taylor Frank B. and Lillian Gilbreth Publishes Shop Management Produced many of the pioneering works on time and motion study; scientific management, applied psychology, and twelve children. (Cheaper by the Dozen) Coins and popularizes the term scientific management in his Eastern Rate Case testimony before the interstate Commerce Commission by arguing that railroad rate increases should be denied because the railroads could save a million dollars a day by applying scientific management methods. An associate of F .W. Taylor, then US Supreme Court Justice. Application of psychology to management, industry, and workers. Psychology and Industrial Efficiency calls for the application of psychology to industry. Harrington Emerson 1911 1911 1912 Frederick W. Taylor J.C. Duncan Harrington Emerson Efficiency engineering; principles of efficiency. Publishes The Principles of Scientific Management First college text in management Publishes The Twelve Principles of Efficiency, which puts forth an interdependent but coordinated management system. In his analysis of the working of political parties and labor unions, Political Parties, formulates his iron law of oligarchy: Who says organization, says oligarchy. Criticism of scientific management; reaffirmed initial ideas.

1910

Louis D. Brandeis Frederick .W. Taylor

1910-1913

Hugo Munsterberg

1914

Robert Michels

1915

H. B. Drury

11

R. F. Hoxie F. W. Harris Thomas A. Edison 1916 Henri Fayol France

Criticism of scientific management; reaffirmed initial ideas. Economic lot size model. Devised war game to evade and destroy submarines Five foundation stones of modern management. First complete theory of management; functions of management; principles of management; recognized need for management to be taught in schools. Publishes his General and Industrial Management, the first complete theory of management.

Alexander H. Church

Functional concept of management first American to explain the totality of managerial concepts and relative each component to the whole. Anticipated waiting-line theory. Applied scientific management to office. Recognized need for applying scientific management office Application of psychology to industry. Diverse application of scientific Management. Study of bureaucracy Brought psychology to advertising and personnel management. Structural definition of bureaucracy is published posthumously; it uses an idealtype approach to extrapolate from the real world the central core of features that characterizes the most fully develop form of bureaucratic organization. Developed a philosophy of management.

A.D. Erlang 1917 1918 W. H. Leffingwell C. C. Parsons Ordway Tead 1919 1920 1921 1922 Morris L. Cooke Max Weber Germany Walter D. Scott Max Weber

1923

Oliver Sheldon

12

1924

H. F. Dodge H. G. Romig Walter A. Shewhart

Use of Statistical inference and probability theory in sampling inspection and in quality control by statistical means. Pioneer of controlled and uncontrolled variables and the statistical control of processes. Began at the Hawthorne Works of the Western Electric Company in Chicago; they last until 1932 and led to new thinking about the relationships among work environment, human motivation, and productivity. Various modern statistical methods including chi-square test, Bayesian statistics, sampling theory and design of experiments. In calling for power with as opposed to power over, anticipates the movement toward more participatory management styles. Founder of industrial sociology Human relations in industry and respect for individuals. Statistical foundations of queuing theory. Managerial Philosophy based on individual motivations. Group process approach to solving managerial problems. In Onward Industry (republished in 1939 as The Principles of Organization), show how the newly discovered principles of organization have really been known since ancient times. The Human Problems of an Industrial Civilization is the first major report on the Hawthorne studies, the first significant call for a human relations movement. Notes on the Theory of Organization draws attention to the functional elements of the work of an executive with his mnemonic device POSDCORB.

1924

Hawthorne Studies

1925

Ronald A. Fisher

1926

Mary Parker Follett

1927

Elton Mayo

1928 1930

T. C. Fry Mary P. Follett

1931

James D. Mooney

1933

Elton Mayo

1937

Luther Gulicks

13

1938

Chester Barnard

Theory of organization; sociological aspects of management; need for communication. The Functions of the Executive Managing the Values of the Organization.

1938 1938

P. M. S. Blackett, et al Chester I. Barnard

Operations research. The Functions of the Executive, his sociological analysis of organizations encourages and foreshadows the post war revolution in thinking about organizational behavior. Publish Management and the Worker, the definitive account of the Hawthorne studies. Article Bureaucratic Structure and Personality proclaims that Max Webers ideal-type bureaucracy has inhibiting dysfunctions leading to inefficiency and worse. In The Managerial Revolution, asserts that as the control of large organizations passes from the hands of the owners into the hands of professional administrators, the societys new governing class will be the possessors not of wealth but of technical expertise. Collection consolidation, and correlation of principles of management. Needs hierarchy first appears in his Psychological Review article A Theory of Human Motivation The Proverbs of Administration attacks the principles approach to management for being inconsistent and often inapplicable. Placed emphasis on psychology, social psychology and research in theory; incorporation of an open system theory of organization.

1939

Roethlisberger & Dickson

1940

Robert K. Merton

1941

James Burnham

1943 1943

Lyndall Urwick Abraham Maslow

1946

Herbert A. Simon

1947

Rensis Likert Chris Argyris

14

1947

NTL

National Training Laboratories for Group Development (now called the NTL Institute for Applied Behavioral Science) is established to the research on group dynamics and later, sensitivity training. Administrative Behavior urges that a true scientific method be used in the study of administrative phenomena, that the perspective of logical positivism should be used in dealing with questions of policy making, and that decision making is the true heart of administration. Publishes The Administrative State, which attacks the gospel of efficiency that dominated administrative thinking prior to World War II.

Herbert A. Simon

1948

Dwight Waldo

Lester Coch and John R. P. Note that employees resist change less French, Jr., when the need for it is effectively communicated to them and when the workers are involved in planning the changes. Norbert Wiener Coins the term cybernetics in his book with the same title, which becomes a critical foundation concept for the systems school of organizational theory. Emphasized systems analysis and Claude Shannon information theory in management. In TVA and the Grass Roots, discovers co-optation which he examines how the Tennessee Valley Authority subsumed new external elements into its policymaking process in order to prevent those elements from becoming a threat to the organization. In his Public Administration Review article Power and Administration, finds that power is the lifeblood of administration, and that managers had more than just apply the scientific method to problems -- they had to attain, maintain, and increase their power or risk failing in their mission.

1949

Norbert Wiener

Philip Selznick

Norton E. Long

15

Rufus E. Miles, Jr.,

The Bureau of the Budget first states Miles Law Where you stand depends on where you sit. Air Force Captain first states Murphys Law: If anything can go wring, it will. Founding father of quality movement. They key quality; reducing variation Publishes The Human Group, the first major application of systems to organizational analysis. Company-wide quality cannot be delegated. Reinstroduced managerial statesmanship in managerial thinking. Psychological and social factors in group behavior. Proposes a general model of change consisting of three phases, unfreezing, change, refreezing, in his Field Theory in Social Science; this model becomes the conceptual frame for organization development. Article General Systems Theory: A New Approach to the Unity of Science is published in Human Biology; his concepts will become the intellectual basis for the systems approach to organizational thinking. The Practice of Management, popularizes the concept of management by objectives. Patterns of Industrial Bureaucracy describes three possible responses to a formal bureaucratic structure: mock, where the formal rules are ignored by both management and labor; punishment centered, where management seeks to enforce rules that workers resist; and representative, where rules are both enforced and obeyed.

Edsel Murphy 1950 1950 W. Edwards Deming George C. Homans

1951 1951 1951 1951

Joseph M. Juran Frank Abrahams Benjamin M. Seleckman Elliot Jaques Kurt Lewin

Ludwig von Bertalanffy

1954

Peter Drucker Alvin Gouldner

1955

Herbert Simon Harold J. Levitt Placed emphasis on human behavior in

16

Robert Schlaifer

decision making, viewed as an identifiable, observable, and measurable process; increased attention given to managerial psychology. First profiles The Organization Man, an individual with an organization who accepts its values and finds harmony in conforming to its policies. In the premier issue of Administrative Science Quarterly, article Suggestions for a Sociological Approach to the Theory of Organizations defines an organization as a social system that focuses on the attainment of specific goals and contributes, in turn, to the accomplishment of goals of the larger organization or society itself. Management Science article, General Systems Theory -- The Skeleton of Science, integrates Wieners concept of cybernetics with von Bertalanffys general systems theory; this will become the most quoted introduction to the systems concept of organization. Discovers his law that work expands so as to fill the time available for its completion. Asserts in his first major book, Personality and Organization, that there is an inherent conflict between the personality of a mature adult and the needs of modern organizations. Article The Human Side of Enterprise distills the contending traditional (authoritarian) and humanistic managerial philosophies into Theory X and Theory Y; applies the concept of self-fulfilling prophesies to organizational behavior. Leadership in Administration anticipates many of the 1980s notions of the transformational leadership when he asserts that the function of an institutional leader is to help shape the environment in which the institution operates and to

1956

William H. Merton

Talcott Parsons

Kenneth Boulding

1957

C. Northcote Parkinson

Chris Argyris

Douglas M. McGregor

Philip Selznick

17

define new institutional directions through recruitment, training, and bargaining. Alvin W. Gouldner Cosmopolitan and Locals, identifies two latent social roles that tend to manifest themselves in organizations: cosmopolitans, who have small loyalty to the employing organization, high commitment to specialized skills, and an outer-reference group orientation; and low commitment to specialized skills, and an inner-reference group orientation. Organizations, seek to inventory and classify all that is worth knowing about the behavioral revolution in organization theory. The father of cognitive dissonance theory, writes the Motivating Effect of Cognitive Dissonance, which becomes the theoretical foundation for the inequity theories of motivation. Harvard Business Review article How to Choose a Leadership Pattern describes democratic management and devises a leadership continuum ranging from authoritarian to democratic. Motivations and Maintenance factors in job satisfaction. (with B. Mausner and B.B. Simpleman.) The Science of Mudding Through rejects the rational model of decision making in favor of incrementalism. The Motivation to Work puts forth them motivation-hygiene theory of worker motivation. Postulate that power and politics impact on the formation of organizational goals; their A Behavioral Theory of Organizational Objectives is an early precursor of the power and politics school. Identify five bases of power (expert, referent, reward, legitimate, and coercive) in their article The Bases of Social

1958

March & Simon

Leon Festinger

Robert Tannenbaum & Warren H. Schmidt

1959

Frederick Herzberg

Charles A. Lindblom

Herzberg, Mausner, & Snyderman Cyert and March

John R. P. French & Bertram Raven

18

Power. They argue that managers should not rely on coercive and expert power bases, as they are least effective. 1960 Douglas McGregor Theodore Levitt Theory X and Theory Y The first management theorist to stress marketing as key to successful business management. Presidential Power asserts that the presidents (or any executive) essential power is that of persuasion. The Forest Ranger shows how organizational and professional socialization can develop the will and capacity to conform in employees. Participative Management and Mechanistic and Organic Management styles. LIKERT - new patterns of management. Modern Organization finds that there is an imbalance between ability and authority causing bureaucratic dysfunctions all over the place. The management Theory Jungle describes thinking about management as a semantics jungle. The Management of Innovation articulates the need for different types of management systems (organic and mechanistic) under differing circumstances. New Patterns of Management offers an empirically based defense of participatory management and organization development techniques. Academy of Management Journal Article, Organization Theory: An overview and an Appraisal, articulates the relationship between systems theory and organizations theory and the distinction between micro and macro perspectives in the development of theory.

Richard Neustadt

Herbert Kaufman

1961

Rensis Likert T. Burns & G.M. Stalker Victor A. Thompson

Harold Koontz

Burns and Stalker

Rensis Likert

William G. Scott

19

Amatai Etzioni

A Comparative Analysis of Complex Organizations, argues that organizational effectiveness is affected by the match between an organization's goal structure and its compliance structure. Structure follows Strategy in Organizations. The Organizational Society presents his threefold classification of patterns of organizational accommodation: upwardmobiles, who identify and accept the values and find personal satisfaction off the job; and ambivalents, who want the rewards of organizational life but cant cope with the demands. Formal Organizations: A Comparative Approach, assert that all organizations include both formal and informal element, and that it is impossible to know and understand the true structure of a formal organization without a similar understanding of its parallel informal organization. Administrative Science Quarterly article Sources of Power of Lower Participants in Complex Organizations anticipates the power and politics perspective of organization theory. Developed key principle of decentralization for big corporations. Bucher, Describe the maintenance of order in a hospital as a dynamic process operating within a framework of negotiated contracts among people and groups with different expectations and interests, in The Hospital and Its Negotiated Order. A Behavioral Theory of the Firm, demonstrate that corporations tend to satisfice rather than engage in economically rational profit-maximizing behavior.

1962

Alfred D. Chandler Robert Presthus

Blau and Scott

David Mechanic

1963

Alfred P. Sloan Strauss, Schatzman, Erlich, & Sabshin

Cyert and March

20

R. Cyert J. March 1964 Blake & Mouton

Behavioral analysis of decision making. The Managerial Grid uses a graphic gridiron to explain management styles and their potential impacts on organization development. The Bureaucratic Phenomenon defines a bureaucracy as an organization which cannot correct its behavior by learning from its errors. Publishes his two-volume The Managing of Organizations, a historical analysis of thinking about organizations from ancient times to the present. Corporate Planning The Theory and Practice of Strategic Planning and Strategic Management. Publishes The Scientific Estate, in which he posits that decisional authority flows inexorably from the executive suite to the technical office. Organizational Stress is the first major study of the mental health consequences of organizational role conflict and ambiguity. Edits the huge Handbook of Organizations, which sought to summarize all existing knowledge on organization theory and behavior. Managers educating each other thru Action Learning. The Social Psychology of Organizations, seek to unify the findings of behavioral through open systems theory. That Urge to Achieve. In which he identifies two groups of people: the majority of whom are not concerned about achieving, and the minority who are challenged by the opportunity to achieve. This notion becomes a premise for future motivation studies.

Michel Crozier

Bertram M. Gross

1965

H. Igor Ansoff

Don K. Price

Robert L. Kahn

James G. March

1966

Reg Evans Katz and Kahn

David C. McClelland

21

Warren Bennis

Changing Organizations, sounds the death knell for bureaucratic institutions because they are inadequate for a future that will demand rapid organizational change, participatory management, and the growth of a more professionalized work force. Contingency Theory of Organization. Organization as function of environment and technology. Organizations in Action seeks to close the gap between open and closed systems theory by suggesting that organizations deal with the uncertainty of their environments by creating specific elements designed to cope with the outside world while other elements are able to focus on the rational nature of technical operations. Inside Bureaucracy seek to develop laws and propositions that would aid in predicting the behavior of bureaus and bureaucrats. The New Industrial State asserts that the control of modern corporations has passed to the techno-structure and that this techno-structure is more concerned with stability than profits. Management and Machiavelli, applies Machiavellis political principles (from The Prince) to modern organizational management. Leadership: Managers do things right. Leaders do the right thing. Organizational Intelligence presents the pioneering study of the flow and perception of information in organizations. Propose that the systematic study of group dynamics would advance knowledge of the nature of groups; how they are organized; and relationships among

1967

P. Lawrence J. Lorsch J. Thompson James D. Thompson

Anthony Down

John Kenneth Galbraith

Antonym Jay

1968

Warren Bennis Harold Wilensky

Dorwin Cartwright & Alvin Zander

22

individuals, other groups, and larger institutions. John P. Campbell M. D. Dunnette Effectiveness of T-Group Experiences in Managerial Training and Development, appearing in Psychological Bulletin, provides a critical review of T-group literature. They conclude that an individuals positive feelings about his Tgroup experiences cannot be scientifically measured, nor should they be based entirely on existential grounds. Grapple with the perennial structural issue of whether to design organizations by product or function in their Harvard Business Review article, Organizational Choice: Product vs. Function. Harvard Business Review article One More Time, How Do You Motivate Employees? catapults motivators or satisfiers and hygiene factors into the forefront of organizational motivation theory. Organizational structure, size and technology. Promulgates his principles that in a hierarchy every employee tends to rise to his level of incompetence. Organization and Environment, call for a contingency theory that can deal with the appropriateness of different theories under differing circumstances; they state that organizations must solve the problem of simultaneous differentiation and integration. Life Cycle Theory of Leadership, appearing in Training and Development Journal, asserts that the appropriate leadership style for a given situation depends upon the employees education and experience levels, achievement motivation, and willingness to accept responsibility by the subordinates. Hierarchy of Needs in Motivation.

Walker & Lorsch

Frederick Herzberg

1969

Aston Group Laurence J. Peter

Lawrence & Lorsch

Paul Hersey & Kenneth R. Blanchard

1970

Abraham Maslow

23

Burton Clark

The Distinctive College identifies ways that three colleges created and maintained their distinctiveness through the management of symbols. Articulate the expectancy theories of motivation. People are motivated by calculating how much they want something, how much of it they think they will get, how likely it is their actions will cause them to get it, and how much others in similar circumstances have received. Writes Intervention Theories and Methods, which becomes one of the most widely cited and enduring works on organizational consulting for change that is written from the organizational behavior/organization development perspective. Organizational Learning Developed Druckers MBO as practical methodology Lateral Thinking. Essence of Decision demonstrates the inadequacies of the view that the decisions of a government are made by a single calculating decision maker who has control over the organizations and officials within his government. Groupthink, first published in psychology Today, proposes that group cohesion can lead to the deterioration of effective group decision-making efforts. Ohio, automobile assembly plant calls national attention to the dysfunctions of dehumanized and monotonous work. The Future Executive, asserts that decision making in the future will call for continuous improvisation on a general sense of direction.

John P. Campbell, Marvin D. Dunnette, Edward E. lawler III, & Karl E. Weick, Jr.

Chris Argyris

1971

Chris Argyris & Donald A. Schon John W. Humble Edward de Bono Graham T. Allison

Irving Janis

1972

General Motors Lordstown

Harlan Cleveland

24

Charles Perrow

Complex Organization is a major defense of bureaucratic forms of organization and an attack on those writers who think that bureaucracy can be easily, fairly, or inexpensively replaced. Academy of Management Journal article General Systems Theory: Applications for Organization and Management, assess the level of successful application of general systems theory in organizations and advocate a contingency theory as a less abstract and more applicable theoretical approach. How strategy is made & how managers use their time; mental process-right brain/left-brain Small is Beautiful: The human scale vs. corporate giantism. Designing Complex Organizations, articulates the systems/contingency view that the amount of information an organization needs is a function of the levels of its uncertainty, inter-dependence of units and functions, and adaptation mechanisms. Introduce the phrase organized an archies to communicate why colleges and universities are distinctive organizational forms with uniquely difficult leadership needs and problems. The report was published as the book, Leadership and Ambiguity: The American College President. Journal of Contemporary Business article Path-Goal Theory of Leadership offers path-goal theory as a useful tool for explaining the effectiveness of certain leadership styles in given situations. Organizational Dynamics article A New Look at Managerial Decision-Making develops a useful model whereby leaders can perform a diagnosis of a situation to determine which leadership style is most appropriate.

Kast & Rosenweig

1973

Henry Mintzberg

E. F. Schumacher Jay Galbraith

1974

Michael Cohen & James March

Robert J. House & Terrance R. Mitchell

Victor H. Vroom

25

Steven Kerr

Academy of Management journal article On the Folly of Rewarding A, While Hoping for B substantiates that many organizational reward systems are fouled up -- they pay off for behaviors other than those they are seeking. Analyzes organizational decisions to produce products and services internally using economic market models, and assess the implications of such decisions on, for example, organizational authority, in Markets and Hierarchies: Analysis and Antitrust Implications. Behavior in Organizations, examines how individual -- organizational relationships emerge and grow, including how groups can exert influence on individuals in organizations and how such social influences relate to work effectiveness. Psychoanalytically interviews 250 corporate managers and discovers The Gamesman, a manager whose main interest lies in competitive activity where he can prove himself a winner. Describe an organization as simply an extension of and a means for satisfying the interests of the multiple individuals and groups that affect and are affected by it, in Agency Costs and the Theory of the Firm. In A Concept of Organizational Ecology, proposes a concept of organizational population ecology based on the field that is created by a number of organizations whose interrelations comprise a system. The system is the field as a whole, not its component organizations. Article The Population Ecology of Organizations proposes a new unit of analysis for understanding organizations: the population of organizations. Article Who Gets Power -- and How

1975

Oliver E. Williamson

Lyman Porter, Edward Lawler III, & Richard Hackman

1976

Michael Maccoby

Jensen & Meekling

Eric Trist

1977

Hannan & Freeman

Salancik & Pfeffer

26

They Hold on to It explains how power and politics help organizations adapt to their environment by reallocating critical resources to subunits that are performing tasks most vital to organizational survival. Davis & Lawrence In Matrix Caution against using a matrix form of organization unless there exist specific organizational conditions that are conductive to its success. Men and Women of the Corporation, describes the unique problems women encounter with power and politics in organizations. The psychological contract between employer and employed; career anchor; organizational culture. Organizational Dynamics article Symbols, Patterns, and Settings: An Optimistic Case for Getting Things Done is the first major analysis of symbolic management in organizations to gain significant attention in the mainstream literature of organization theory. Harvard Business Review article Power Failure in Management Circuits identifies organizational positions that tend to have power problems then argues that powerlessness Is often more of a problem than power for organizations. Structuring Organizations is published, the first book in integrative series on The Theory of Management Policy. Corporate Strategy; Strategies for competitive advantage, both national and international. Argue that evaluations of organizational effectiveness should employ multiple criteria that reflect the diverse interests of the various constituencies that are involved with organizations, in Organizational Effectiveness: A Multiple-Constituency Approach.

Rosabeth Moss Kanter

1978

Edgar H. |Schein

Thomas J. Peters

1979

Rosabeth Moss Kanter

Henry Mintzberg

1980

Michael Porter

Connoly, Conlon, & Deutsch

27

Meryl Reis Louis

Administrative Science Quarterly article, Surprise and Sense Making: What Newcomers Experience in Entering Unfamiliar Organizational Settings, proposes that sense-making by newcomers usually must rely on inadequate sources of information which can lead them astray. In Organization Development: A Political Perspective, argue that organization development (OD) has developed more political sensitivity and sophistication than most critics realize, but that political activity by OD practitioners is fraught with serious utilitarian and values problems. Power in Organizations integrates the tenets and applications of the power and politics school; of organization theory. Theory Z and Pascale and Athos The Art of Japanese Management popularize by the Japanese management movement. The Excellence cult & prescriptions for managing chaotic change. In Search of Excellence Corporate Culture, and Business Weeks cover story on Corporate Culture. Empowerment of individuals as force for change; the post-entrepreneurial corporation. Action-Centered Leadership. How Task, Tam and Individual Overlap. Power in and Around Organizations molds the power and politics school of organizational theory into an integrative theory of management policy. In The Change Masters, defines change masters as architects of organizational change; they are the right people in the right places at the right time. Article Organizations as Cultural-

1981

Anthony Cobb & Newton Margulies

Jeffrey Pfeffer

Thomas Ouchi Pascal & Athos 1982 Tom Peters & Robert H. Waterman, Jr. Deal and Kennedy 1983 Rosabeth Moss Kanter

John Adair Henry Mintzberg

Rosabeth Moss Kanter

Meryls R. Louis

28

Bearing Milieux becomes the first readable, integrative statement of the organizational cultural schools assumptions and positions Michael Keeley Values in Organizational Theory and Management Education, proposes that organizations exist by virtue of agreement on joint activities to achieve separate purposes of important constituencies, not to achieve organizational goals or purposes. Stakeholders of the Organizational Mind explains how the perceptions of internal and external organizational stakeholders influence organizational behavior -particularly, decision making about complex problems of organizational policy and design. Edit the first definitive volume on symbolic management, Organizational Symbolism. Article Organizations as Shared Meanings examines how systems of commonly shared meanings develop and are sustained in organizations through symbolic communications processes, and also how these shared meanings provide members of an organizational culture with a sense of commonality and a distinctive character. The future of work and organizations. Edit the first notable collection of papers on the organizational culture perspective, Leadership and Organizational Culture. Sergiovannis opening chapter Cultural and Competing Perspectives in Administrative Theory and Practice clearly articulates the fundamental underlying assumptions of the organizational culture and symbolic management perspective. Report the findings of the first major quantitative and qualitative empirical study of organizational culture in their

Ian Mitroff

Pondy, Frost, Morgan & Dandridge Linda Smircich

1984

Charles Handy Sergiovanni & Corbally

Siehl and Martin

29

The Role of Symbolic Management: How Can Managers Effectively Transmit Organizational Culture? 1985 Edgar Schein Writes the most comprehensive and integrative statement of the organizational culture school in his Organizational Culture and Leadership. In The Irrational Organization, postulates that rationality may lead to good decisions, but it decreases the probability of organization action and change. The Administrative Development, combines Western methodology and technique with Islamic substance, values, and ethics, to demonstrate how the Islamic perspective (as a system and a way of life) is an important moving force in the process and realization of administrative development world-wide. Corporate Culture: Diagnosis and Change, presents the first serious methodological treatise on diagnosing organizational culture. Write a comprehensive test that applies organization theory in the public sector, Organization Theory for Public Administration. Images of Organization develops the art of reading and understanding organizations and starting from the premise that our theories of organization are based on distinctive but partial mental mages or metaphors. Combines and extends his previous essays on multiple constituencies, organizational purposes, systems of justice, values, and organizational worth into the first comprehensive statement of A SocialContract Theory of Organizations. Compile Paradox and Transformation, an important collection of essays on the necessity for managing with paradoxes in complex organizations, rather than

Nils Brunsson

Muhammad A. Al-Buraey

1986

Desmond Graves

Michael Harmon & Richard Mayer

Gareth MOrggan

1988

Michael Keeley

Quinn and Cameron

30

necessarily trying to eliminate them. American Journal of Sociology Publishes a heated debate between the leading proponents and detractors of population ecology of organization theory. In The Age of the Smart Machine, examines the effects of information technology change on authority and hierarchy -- on people and organizations. Book When Giants Learn to Dance examines how organizations can gain the advantages of smallness (flexibility) and size (staying power) at the same time. Developing Corporate Character, explains how it is difficult but possible to change elements of an organizational culture without destroying the positive aspects of the culture that already exist. The creative use of conflict in organizations. The Borderless World (1982 The Mind of the Strategist) Each function in a business should be a customer of the next in the chain. Creates diary studies that explore how women leaders make decisions and gather and disperse information in organizations. Helgesen suggest that women may be the new Japanese of management, in The Female Advantage. In Praise of Hierarchy, argues that critics of hierarchy are misguided. Instead of needing new organizational forms, we need to learn how to manage hierarchies better. In Organizations, Uncertainties and Risk, describe how organizational behavior is impacted by decision making under risk and uncertainty, and how, in turn, risk and uncertainty in the general society affect the decision making of organizations.

Shoshana Zuboff

1989

Rosabeth Moss Kanter

Alan Wilkins

1990

Richard Pascale Kenichi Ohmae Richard J. Schonberger Sally Helgesen

Elliott Jaques

James F. Short, Jr., and Lee Clarke

31

Paul S. Goodman & Lee S. Sproull

Describe how organizational behavior is affected by new technologies. They argue that the impacts of technology are so profound that organizations must find new ways of conducting enterprise in order to survive the new techno/business climate; in Technology and Organizations. Influence Without Authority discusses an alternative method of work achievement based on the law of reciprocity that leads to organizational self-empowerment and the mutual advantage of participants. Symbols and Artifacts: Views of the Corporate Landscape, focuses on corporate artifacts: buildings, objects, images, and forms that go into the making of corporate cultures. Gagliardi presents social constructivist, phenomenological, and interpretive views of reality. Highly influential book, The Fifth Discipline, describes organizations with learning disabilities and how learning organizations defy the odds to overcome them. Develop a theory of inside competition that emphasizes organizational capability. Their book, Organizational Capability: Compelling from the Inside Out, explains what capability is and how to develop competitiveness based on management action. Academy of Management Review article, The Ethereal Hand: Organizational Economics and Management Theory, demonstrates the potentialities and pitfalls of organizational economics. Technology as Equivoque: Sense-making in New Technologies, examines cognitive process that people use in their struggle to adapt to work in environments where important events are unpredictable and chaotic; in Goodman and Sproulls book, Technology and Organizations. Frame leadership in terms of how

Allan R. Cohen & David L. Bradford

Pasquale Gagliardi

Peter Senge

David Ulrich & Dale Lake

Lex Donaldson

Karl Weick

1991

Robert G. Lord &

32

Karen J. Maher

organizational commandants process information -- rational, limited capacity, expert, and cybernetic -- and relate this to how other participants in the leaders environment process information about him or her; in, Information Processing: Linking Perceptions and Performance. Driving Fear Out of the Workplace: How to Overcome the Invisible Barriers to Quality, Productivity, and Innovation, explains the relationship between fear and workplace productivity. Management should take responsibility for fear in the workplace, starting with themselves, and then enlist the efforts of all organizational participants. Demonstrates how individualss rational and irrational behavior patterns influence organizations; in Organizations on the Couch. Apocalyptic liberation as highest fulfillment of needs. Explore crisis-prone organizations and the psychological and emotional factors that enable managers to ignore the possibility of pending crises, in Transforming The Crisis-Prone Organization. Managing With Power, describes how to consolidate power and use it for constructive organizational goals. The book teaches managers how to use power for advantage, to stop fearing it, and to realize that if they do not use power, someone else will. Explains sense-making in organizational life -- even when organizational behavior does not make sense. Her ideas as proposed in Exploring Complex Organizations: A Cultural Perspective constitute a cross-cultural and crosscontextual analysis of sense-making in large organizations. Uses architecture as a metaphor to identify evolving forms and features of

Kathleen D. Ryan & Daniel K. Oestreich

Manfred Kets de Vries

1992

Emmanuel T. Santos (I/AME at Wharton) Thierry C. Pauchant & Ian I. Mitroff

Jeffrey Pfeffer

Barbara Czarniawska-Joerges

David Nadler, Marc Gerstein, &

33

Robert Shaw

effective organizations of the future, including: autonomous work teams, highperformance work systems, spinouts, networks, self-designed organizations, and fuzzy boundaries. Creating Corporate Culture: From Discord to Harmony, studies organizations facing challenges from evolving cultures, using the perspective of core dilemmas. Dilemmas are two lemmas or propositions located on an axis with the organization located in between. Gendering Organization Theory, asserts that ordinary activities in organizations are not gender-neutral. They perpetuate the gendered substructure within the organization itself and within the wider society -- as well as in organization theory; in A. J. Mills and P. Pancred, Gendering Organizational Analysis. Best-selling book, Reinventing government: How the entrepreneurial spirit is transforming the public sector, claims that public agencies are designed to protect against politicians and bureaucrats gaining too mush power or misusing public money. Instead, we need entrepreneurial government. Managing the Unknowable: Strategic Boundaries Between Order and Chaos, challenges the view that organizational success stems from stability, harmony, predictability and stable equilibrium. Managers should embrace unbounded instability, because disorder, chance, and irregularity can be beneficial. Changing the Essence discusses leadership behaviors that are necessary for initiating and managing fundamental organizational change. The Postmodern Organization, looks comparatively at premodern, modern, and postmodern notions of five dimensions of organizational life: size and complexity,

Charles Hampden-Turner

Joan Acker

David Osborne & Ted Gaebler

Ralph D. Stacy

Richard Beckhard & Wendy Pritchard

1993

William Bergquist

34

mission and boundaries, leadership, communication, and capital and worker values. Taylor Cox, Jr., Cultural Diversity in Organizations, examines the potential benefits and the difficulties that may accrue to an organization from cultural diversity. Examine four ways of knowing, or inquiry systems designed to assist decision making, in The Unbounded, Mind: Breaking the Chains of Traditional Business Thinking. Reengineering the Corporation, Describe how to radically redesign a companys processes, organization, and culture to achieve a quantum leap in performance. The Corporate Culture, explore what it is like to be gay in the corporate world and how to manage sexual identity in the workplace. They encourage openness in corporate practices, such as listing sexual preference, as well as with gender and ethnicity in training, recruiting, and retention programs. Public Administration Review article, Nonlinear Dynamical Analysis: Assessing Systems Concepts in a Government Agency, suggests that nonlinear dynamics, or chaos theory, can be applied to public agencies because human organizations are nonlinear systems. Write the most comprehensive treatise on organizational culture, The Cultures of Work Organizations. Managing Chaos and Complexity in Government, applies chaos theory to selforganization in public management. Kiel shows how the deep structures and processes of agency dynamics can foster learning and coping with risk and uncertainty.

Ian I. Mitroff & Harold A. Linstone

Michael Hammer & James Champy

James D. Woods & Jay H. Lucas

L. Douglas Kiel

Harrison M. Trice

1994

L. Douglas Kiel

35

 Checkpoints

1 2 3

What functions or processes of management were already known before the Birth of Christ (B. C.)? What principles of management were practiced before the Birth of Christ (B. C.)? What practices in management were contributed by the following civilizations before the Birth of Christ (B. C.)? 3.1 3.2 3.3 3.4 3.5 3.6 Middle East Egyptians Hebrew Chinese Greek Roman

After the Death of Christ (A. D.) up to the 19 th century, what practices in management wre contributed by the following civilizations: 4.1 4.2 4.3 Arabic Italian Anglo-Saxon (British)

Classify the practices, concepts, and principles of management in the 20th century (1900-1999 according to the schools of management theory.

36

MODULE 3 Industrial Revolution and the Development of Modern Management

Learning Objectives: 1. 2. 3. 4. To present the historical, technological, economic, social and cultural perspectives and context out of which modern management sprang and operated. To gain insights relevant to management from an in-depth study of the Industrial Revolution. To discover how the Industrial Revolution by its nature and scope gave birth to modern Management. To develop profound and broader perspectives necessary for leadership in analyzing the historical and empirical relations between the Industrial Revolution and modern Management.

1.

The Nature and Scope of Industrial Revolution 1.1 A revolution is a profound and radical change in the economic, social, or political structure. It is a process of transformation in the economy, society, and political systems.

While it may appear sudden or spontaneous, the process of revolution actually covers a period of time. Suddeness of change is more associated with coup d etat-- the sudden seizure of political power by the military.

1.2 1.3

The Industrial Revolution is the process of change from an agrarian, handicraft or feudal economy to one dominated by industry. The Industrial Revolution cannot be treated as a definite period of time in history. Although the Industrial Revolution started in England and first spread to Belgium and the France, it cannot be asserted that it is over with the passage of the 18th and 19th centuries. It is still on-going as a process in our time and will continue to go on with Technological Revolution.

It was the result of gradual succession of change over a long period of time. Some of its elements can be traced back from the medieval period. 1.4 With the hindsight of contemporary history, we can even sat its embryonic roots can be traced from what Alfin Toffler calls the First Wave of Civilization -Agricultural Revolution which supplanted the Hunting Stage. Agriculture was revolutionary because:

1.5

37

* * * * * 2.

The acquisition, possession, enjoyment and ownership of land gave rise to wealth. And with wealth came power -- economic and political. Agricultural improvements made possible excess production over subsistence level, thus making possible provision of food for larger non-agricultural population. This enabled non-agricultural workers to engage in crafts and production of goods and services. It enabled the creative and innovative to produce arts, literature, and culture. It gave rise to trade and commerce.

First Situs of Industrial Revolution

2.1. 2.2.

England is the birthplace of Industrial Revolution. Why England? Because scientific, technological, political, legal economic, social and cultural environment in England was favorable to industrialization: At the end of 18th century, continental Europe was for ahead in pure research in the physical and chemical sciences. However, the English excelled in the application of scientific knowledge to practical affairs, particularly in industries. Technological revolution accompanied the Industrial Revolution as traditional methods of production -- the domestic handicraft system of manufacturing -could not provide adequate response to market conditions as primary cause of industrialization. It led to factory-based mechanization. Political liberty and individual rights were guaranteed. The right to life, liberty and property, the right to due process and freedom from illegal persecution were protected and recognized. The sanctity of property rights and sanctity of contracts were held in high regard. A patent law protected the intangible rights of inventors and the creative. The Agrarian Revolution in England centered on land use which increased production more than what improved technology could do so. The Enclosure Movement of the 18th century increased the efficiency of farm lands as common pastures and fields were replaced by more compact and easily farmed private holdings. Farmers were motivated to experiment with new forms of husbandry -- notably root crop rotation and convertibility between cultivated and pasture land -- that increased productivity. England had the domestic capital or wealth saved and accumulated from land and international trade. Banking and insurance services were available.

* * *

38

* * *

Every inventor who needed an entrepreneur with capital and vision to exploit an innovation could easily find such financial backer. England was richly endowed with coal and iron ore. It had wool. Its colonies had iron, cotton, dyewoods, lumber and naval stores. It had adequate transport system. Roads and canals were built. Railroads extended transportation network. These in addition to traditional British merchant marine which was the largest in the world at the time. Social mobility, as a result of economic changes in social relations in the means of production, was common and open. This became an incentive to savings and accumulation of wealth and capital. The Demographic Revolution -- Britains population in the 1700s doubled again by 1850 -- provided stimulus to increased demand for food.

Population growth in developing countries today tends to retard economic development. But Britain in the 18th century was a wealthy country with a standard of living well above subsistence. Thus the population explosion from 1750 enlarged the effective demand for consumption. Since the population generally had the purchasing power, the population explosion had a beneficial effect on economic development.

The shippers and traders and most of all the merchants saw the market opportunities. Hence, the increasing demand for improvements in the process of manufacturing or the production of goods. The Protestant Ethic, as Max Weber calls them, of hard work, saving, sacrifice (forego todays comfort for tomorrows security), honesty, trust, - values conducive to economic progress - were widely lived up to and practiced outside the confines of churches and even after religious services.

3.

Main Features of Industrial Revolution

The main features of the Industrial Revolution were Technological, economic, social, and cultural.

3.1.

Technological features: The use of new basic materials -- iron and steel. The use of new energy sources -- both fuels and motive power -- such as coal, steam engine, electricity, petroleum, and internal combustion engine. The invention of new machines -- spinning jenny and the power loom that permitted increased production with smaller expenditure of human energy. The new organization of work -- the Factory System -- which entailed increased division of work and specialization of function. (Note that F. W. Taylors School of Scientific Management is based on the study of work in the Factory System.)

* * * *

39

* *

Developments in transportation and communications -- steam locomotive, steamship, automobile, airplane, telegraph, and radio. The increasing application of science to industry.

These technological breakthroughs made possible massive use of natural resources and mass production of manufactured goods.

3.2.

Socio-economic and Cultural Features of Industrial Revolution Agricultural revolution produced surplus production for consumption of industrial, commercial and other non-agricultural population. Economic shift from land to industry resulted in broader distribution of wealth, especially among the bourgeoisie, the new middle class. Political changes reflected shift of economic power. Hence, new laws and state policies reflected the economic interests of new power holders. Sweeping social changes -- growth of cities, development of working class movements, and emergence of new patterns of authority. Cultural transformations of broader order. The worker acquired new and distinctive skills and relation to task shifted. Instead of craftsman with hands tools, he became a machine operator, subject to factory discipline. Psychological change -- mans confidence in his ability to use resources and to master nature was heightened.

* * * * * *
4.

Great Britain and France: A Case Study on Industrial Development

4.1.

France in the 18th century was the wealthiest and most powerful nation in continental Europe, in spite of calamitous wars, loss of its colonies, and impending royal bankruptcy.

But the Industrial Revolution started first in Great Britain because of its favorable environment. (Belgium was second to industrialize because the pre-requisites of industrialization were present there. However, its small size prevented it from becoming the leading industrial power in Europe.

4.2.

Capital investment in mechanical devices provided the basis for technological change. But for this purpose the capital must be mobile; i.e., available for industrial investment. While France had much capital, it was diverted to unproductive uses -- forced loans to the state, upkeep of a wasteful royal court and bureaucracy, and war expenditures. And it was dissipated by government bankruptcy.

Great Britains capital was rapidly increasing through agricultural improvements and commercial expansion. And the British monetary system was far sounder than that of France. Lowering by the British of interest rate in the first half of the 18 th century made cheap capital available for industrial investment.

40

4.3.

Mobility and adaptability in the labour supply are also essential for industrial development. In case respects, Britain surpassed France. Serfdom and the guild system had almost disappeared in Britain by the beginning of the 18th century. They were not completely destroyed in France until the French Revolution. Markets are also necessary for industrial growth. A large demand stimulates technological improvement. Mass production must have large market to consume its finished goods.

4.4.

Given the mercantilism practices of the 18th century, which entailed strict limitations on imports, both Great Britain and France had their home markets at their command. The population of France was larger than that of Britain but France lost most of its colonies in the 18th century. Britain meanwhile monopolized the trade with its growing colonies. Though it lost its 13 American colonies, Britain was able during the 1790s to extend its empire and its carrying trade. Thus British markets were expanding at a greater rate after 1763 than were the French. Britains advantage was further increased because the French specialized in expensive, handmade articles while the British made coarse goods capable of being produces by machines and sold to a mass market at low process.

4.5.

The British outstripped the French with a great merchant marine for overseas trade and an extensive canal and road system for inland transportation. James Brindleys pioneer efforts ushered in a canal-building era that gave England a network twice as large as that of France by 1800. Similarly, road building in 18thcentury England flourished with the new methods of the great Scottish roadbuilders Thomas Telford and John McAdam. Business opportunities were slightly greater for the British entrepreneur than for his French counterpart, for the English political system and scale of social values were more propitious for industrial and commercial activities. While the Bourbon monarchy constantly frustrated the French trading classes, the British parliament, controlled by commercial magnates and landed aristocrats since the English revolution of 1688, was consistently devoted to the expansion of commerce and the prosperity of agriculture. Both France and Britain possessed raw materials and other natural resources, but the British resources were more readily available than the French. Most important was coal. The production of every ton of iron required from seven to ten tons of coal. It was Britains good fortune to have this coal located near seaports, making the shipment of ore to coal an inexpensive process. Since the crucial early stage of the Industrial Revolution coincided with the French Revolution, Britains naval supremacy allowed it to maintain a free flow of raw materials, especially cotton, and to cut France off from colonial products. New inventions and new techniques of manufacturing were an inherent part of the Industrial Revolution. Neither Britain nor France had a monopoly of inventive genius. The names of J. M. Jacquard and Jacques de Vaucanson (1709-

4.6.

4.7.

4.8.

41

82), both of whom contributed to the improvement of weaving machinery, testify to French mechanical ingenuity. But the factors mentioned above combined to give greater opportunity for English mechanical genius, which explains why most of the early inventors were British. 5. The Textile Industry: A Case Study of Initiating Industrialization

5.1.

The textile industry was the first to undergo industrialization. Englands moist climate, which prevented cotton threads from becoming brittle and breaking, made easier the application of machinery to the spinning and weaving processes in Lancashire, but other factors probably account for the fact that textiles took the lead in industrialization. For one thing, faster and cheaper methods of production were necessary to meet the growing demand for textiles, especially the cottons and calicos that had been introduced from India. In addition, techniques for making cloth had already reached a high point of development; only minor changes were necessary to convert the processes from manual operations to semiautomatic or automatic operations propelled by mechanical power. Finally, a large number of persons were engaged in spinning and weaving as a part-time home task under the domestic or putting-out system. Under this system, entrepreneurs putout the raw materials to farm workers, who usually included the women and children of the household, and paid them at piece rates. The problems connected with the spinning ad weaving processes, already specialized and carried on in separate households, stirred the imagination of many inventors, and the piece-rat payments stimulated thought about techniques for increasing the rate of production. The rapidity with which changes were introduced in the textile industry illustrates the role of one invention in producing another in a related field. The first of the great inventions was John Kays flying shuttle (1733), a mechanical device for throwing the weaving shuttle more quickly than could be done by hand. Kays device upset the usual ratio of four spinners to one weaver: either there had to be many more spinners or else spinning had to be similarly quickened by application of machinery. James Hargreaves developed (1764-69) the spinning jenny, which mechanically reproduced the actions of the hand spinner. Richard Arkwright in 1769 patented the water frame, which produced a strong, well-twisted yarn suited for the warp of cotton goods and so named because it used water power. Samuel Cromptons mule (1779), a cross between the water frame and the jenny, marked the next improvement in spinning devices.

5.2.

5.3.

5.4.

* *

42

In the meantime the Rev. Edmund Cartwright set about mechanizing the weaving operation to take advantage of the then abundant yarn produced by Arkwrights and Cromptons machines. The result was the power loom (1785), a major step in applying mechanical power to weaving. Increased production of finished cotton goods in turn created a growing demand for raw cotton, but the supply lagged because of the labour involved in picking the seeds from the cotton bolls. In the United States, Eli Whitney solved the problem with his cotton gin (1973), which more than trebled the amount of cotton that a man could pick free of seeds per day and which caused the cotton crop to increase from 1,500,000 lb. in 1790 to 85,000,000 lb. in 1810. The cotton gin also stimulated the extension of the plantation system and Negro slavery in the South; it was indirectly responsible for producing the regional differences that eventually contributed to brining on the American Civil War. Meanwhile Samuel Slater and others introduced British machinery into the United States. In addition to leading in mechanical innovations, the textile industry was also the first to develop the new organization of production: the factory system. This was not the first time that workers had been concentrated under one roof under the close control of their employers. The royal manufactories in France, such as the Gobelin works, had come into existence almost a century before. And there had been factories in woolen industry in 16th-century England. There were other isolated examples as far back as some pottery works in ancient Athens.

5.5.

But the factory as the characteristics form for the organization of work grew out of the textile industry at the end of the 18th century. The factory gathered workers together and submitted them to the discipline of the machine. Within the factory there was division of labour, the workers performing specialized tasks.

5.6.

Power-driven machinery in the factory resulted in the production of goods in quantities greater than were demanded by the immediate local market, or even the national market, and made world-wide commerce necessary. British raw cotton imports provided an index of the rapid advance in production. These imports quadrupled from 1765 to 1785, almost quadrupled again from 1785 to 1805, tripled during the succeeding two decades, more than tripled in the years between 1825 and 1845, and doubled again in the next 20 years. By 1800 the chief inventions in the textile industry had been devised and the factory system established, the motive power being supplied chiefly by water. Although the steam engine is sometimes mistakenly credited with causing the Industrial Revolution, the industrial transformation had already begun before the steam engine came into widespread use. Water mills actually surpassed steam engines in aggregate power generated during the entire first century of the Industrial Revolution. Thus the Industrial Revolution might have taken place without James Watt. This is no to minimize Watts role, for his steam engine hastened the revolution and helped establish the industrial pattern of the future, but it did not create it. James Watt arrived on the scene when the mining and metallurgical industries were rapidly expanding and when there was need for a machine of greater

5.7.

5.8.

43

efficiency than those currently used to pump water from the mines. Had this invention come earlier the techniques and machines to produce the metal shapes basic to his engine would not yet have existed; there might not have been sufficient capital available to manufacture it on a commercial scale; and there probably would have been little demand for it.

5.9.

However, the need for Watts invention and the opportunity for its adoption were provided by a series of prior and contemporaneous developments. The shortage of wood, necessitating a substitute fuel for charcoal in smelting, had given rise to successful attempts by Abraham Darby and his son early in the 1700s to reduce coal into coke by burning off the coal gas in an oven. Henry Corts invention (1784) of puddling (stirring molten pig iron in a reverberatory furnace to burn off impurities) and of a rolling mill with grooved rollers (1783) simplified and cheapened the production of wrought iron. The boring mill developed 1755 by John Wilkinson made it possible to bore cylinders to the fine limits of accuracy required by Watts engine. Equally important was a reservoir of knowledge and experience in working with the power of steam for pumping purposes: Edward Somersets atmospheric engine (c.1663); Thomas Saverys first practical steam pump (1698), which raised water through the combination of a vacuum created by the condensation of steam and through steam pressure itself; Dennis Papins demonstration (1690) of the principle that steam could move a piston in a cylinder; the atmospheric engine of Thomas Newcomen, who first (1712) established the steam engine as a practical and reliable machine; and John Smeatons application of engineering principles to raise the efficiency of the atmospheric steam engine about as high as could be done with that type of engine. By the middle of the 18th century, Newcomens fire-engine, as it was then called, was widely used to pump water out of the Cornish tine mines. While engaged in repairing a model of the Newcomen engine at the University of Glasgow in 1764-65 Watt came upon his great idea. He took out his first patent in 1769. Watts engine might never have come into wide use had it not been for Matthew Boulton, a Birmingham industrialist, who provided capital and commercial acumen. By 1786 the firm of Boulton and Watt was prospering and by 1800 more than 500 of their engines had been built and set up both in England and abroad. For the first time mechanical power was independent of the movement of the wind or the location of water; it could be used wherever needed. The steam engine was eventually to become the symbol of the Industrial Revolution. Manufacturers producing goods in large quantities needed faster and more economical means of transporting raw materials to their factories and sending their products to market. Canals and roads were improved and expanded. But the most significant transportation development of the Industrial Revolution was steam locomotion. Parallel rails of a given gauge, suitably laid on a prepared roadbed, had been there were already railways long before Richard Trevithicks high-pressure engine made possible the commercial steam railway and George Stephenson demonstrated the speed and efficiency of steam

5.10.

5.11.

5.12.

5.13.

44

locomotion. The Stockton and Darlington railway (1825), designed to carry coal from the mines to waterways, proved immediately successful, and within a few years England was covered with a railroad network. Other countries in Western Europe and in western hemisphere also began to build railways.

5.14.

At the same time, steam was also being applied to water transportation. In 1807 Robert Fultons steamboat appeared on the Hudson river and water commercially successful, but many yeas passed before the steamship replaced the sailing ship.

Britains leadership in the Industrial Revolution was brilliantly displayed in 1851 at the Great exhibition in London, which focused the attention of the world on British scientific and technological progress.

5.15.

The second half of the 19th century marked a new phase of industrialization, evidenced among other things by the growing specialization of production, the beginnings of the direct application of science to industry, and the further development of mass-production techniques. Old industries expanded, new industries were founded, and machinery was applied to agriculture. At the same time new forms of business organization arose to meet new industrial needs, and the Industrial Revolution spread to countries hitherto unaffected. These elements continued to characterize industrialization during the 20th century, so that some historians view developments since 1760 as a continuous revolution, while others find second or even third Industrial Revolutions occurring in the latter part of the 19th and during the 20th centuries. As invention proceeded and as industrial machinery became more complex there was need for greater technical knowledge. Most of the early inventors had been tinkerers, but the demands of industry soon gave rise to a new and important professional group known as engineers. As industrial change continued, specialization arose among engineers; mechanical engineers, mining engineers and other varieties began to appear to meet the more intricate needs of an industrial age. Education in science and technology assumed added importance with the increasing dependence of technological advance on scientific achievements. Here Germany took the lead, building up a great chemical industry on the basis of discoveries in university and industrial laboratories. By the 20th century discoveries in theoretical science were applied so rapidly by industry that the distinction between fundamental, or pure science and applied science tended to disappear. One of the technological triumphs during this later period of the Industrial Revolution was the perfection and increased use or precision tools. Earlier, John Wilkinsons boring mill (1774) had permitted the boring of accurate cylinders essential for the success of the steam engine. Henry Maudlays slide-rest (1794) working on an all-metal lathe, facilitated the accurate cutting of metals and the screw-making machine possible. Constant improvement in the basic machine tools allowed for continually greater precision, which led to the manufacture of interchangeable parts, an essential feature of mass production.

5.16.

5.17.

5.18.

5.19.

45

5.20.

Most frequently credited with the introduction of mass production is Eli Whitney, best known for his invention of the cotton gin but also noteworthy for his manufacture of firearms. Although he was not solely responsible for the development of interchangeable parts, Whitneys assembling of muskets at his factory in New Haven, Conn., foreshadowed the mass-production techniques that later brought industrial pre-eminence to the United States. And that came to be known in Britain as the American system.

6.

Steel Industry

6.1.

The period after 1830 brought a tremendous expansion of other industries. The production of coat and iron, for example, was stimulated by increased use of steel through the development of new steel-making methods: the Bessemet process (1856), which burned off carbon and other impurities in the molten pig iron by a powerful blast of air; the Siemens-Martin process (1866), whereby a mixture of gas and air burned off the carbon in a shallow open heart; and the Thomas-Gilchrist method (1878) for smelting iron ores with a high phosphorous content in a furnace lined with magnesium limestone, which absorbed the phosphorous. In addition, the textile industry further expanded. The manufacture of linens and silks was mechanized and the needle trades were revolutionized by the invention of the sewing machine and the knitting machine (1863). Railway systems of most western European states were extended to all major cities. And in the United States the east and west coasts were linked by rail. Steamboats were also further developed, and the day of the sailing ship was almost over. Some older industries were mechanized for the first time in the second half of the 19th century and developed large-scales operations. Among these was the manufacture of shoes, formerly done completely by hand but now made automatic by the invention of a number of remarkable machines. Flour milling and brewing were similarly mechanized. Completely new industries were born: electrical, photographic, food canning, gas lighting, rubber and petroleum

6.2.

6.3.

7.

Agriculture Developments

7.1.

Change in agriculture were an integral part of the Industrial Revolution. Agricultural production had been increased by the use of fertilizers and the rotation of crops, by more careful and scientific cultivation of fields, and by an improvement in the quality of livestock through selective breeding. A tendency toward larger holdings which could be farmed more profitably was evident in Great Britain and in the Americas and Australia. More spectacular was the application of machinery to farming processes, and there the United States took the lead, the steel-blade plow-share and the reaper being invented there in the 1830s. Farming also developed a division of labour, certain areas concentrating on specific products, such as the Danish specialization in dairy products. Farmers concentrated on growing cash crops for an unknown or distant market rather than for their own consumption.

46

7.2.

The Industrial Revolution also brought transformations in the capitalist economy. Capitalism had originated long before the Industrial Revolution, and investment capital had been one of the prerequisites for industrialization. Despite the important role played by capitalism in the Industrial Revolution it would be wrong to equate the two: there have been forms of capitalism at other times without any industrial change. And the U. S. S. R. and China were to undergo Industrial Revolutions in the 20th century under an avowedly anti-capitalist system.

8.

Repercussions of Agricultural and Industrial Developments

8.1.

The Industrial Revolution changed the chief source of capital accumulation from land, commerce and banking to industrial production, and also changed the area and forms of capital investment. Industry had long outgrown the domestic stage, for power-driven machinery was too cumbersome, too complicated and too expensive to be owned by peasants and artisans and operated by them in their own homes without superintendents. It soon out-grew the small, one-owner factory as the need increased for capital investment in more complex machinery and more far-reaching enterprises. Because these enterprises required more capital than any one man possessed, ownership passed from individuals or partnerships to joint stock companies, or corporations. The growth of corporations was further stimulated by the legalization of the principle of limited liability through legislation passed in England and France during the 1850s and 1860s. Extension of corporative ownership meant that wealth was no longer invested primarily in land but in industrial securities. Corporate ownership also changed the relationship between owners and employees. Early industrial capitalists were likely to know personally all the employees of their small factories. But when the enterprise became a large corporation with many absentee owners there was little direct contact between owners and employees. The owners were usually represented by a managerial group that did not necessarily own a share of the business. This managerial function assumed increased importance in industrial enterprise in the 20th century. At the same time, the depersonalization of the industrial enterprise made the workers feel alienated from the owners and contributed to their grievances. Commerce and banking were also enlarged by the Industrial Revolution and became truly world-wide in scope. To keep the factories running smoothly and steadily there had to be a regular flow of raw material as well as permanent channels for the sale of merchandise to the consumer. In addition, consumer demand grew because of the greater specialization of production. Formerly the rural toiler had produced most of what he consumed; now the factory worker was forced to buy nearly everything he needed. Commerce was further stimulated by the fact that increasing population meant that there were more consumers. The task of supplying the growing population with the elementary needs of food, clothing and shelter provided a stimulus both to industrialization and to agricultural production.

8.2.

8.3.

8.4.

47

8.5. 8.6.

Not only were there more people, but the European peoples in some places improved their standards of living, demanding more in the way of productions. The expanded needs of trade and industry also led to the growth of banking enterprises for accumulating capital and savings, for transferring funds and for providing manifold exchange activities.

9.

Political and Economic Freedom

9.1.

In addition to its effect on the economy, the Industrial Revolution contributed to the efforts of liberal theorists to liberate man from political institutions and legal restrictions that hampered his freedom. Adam Smith in his Wealth of Nations (1776) had sounded the call for economic freedom. Industrial growth demanded the removal of customs barriers inherited from the preceding mercantilistic age. Competition was regarded as the life of trade, and no restrictions were to be placed upon it except in the case of the worst abuses. In Great Britain the concepts of laissez faire became public policy when the Liberal party achieved political power in 1830 and governed in the interests of the business clases, with but few interruptions, for the remainder of the 19th century. Bourgeois liberalism also became an important political movement in some of the other countries that followed in the wake of Britain in the Industrial Revolution. The liberal tendency was reversed when international economic competition ushered in a wave of neomercantilism near the close of the 19th century and when the working class pressures, manifested through trade unions and socialist movements, forced the state to intervene in business and curb the unrestricted exploitation of the workers.

10.

British Monopoly In the period 1760 to 1830 the Industrial Revolution had been largely confined to Britain. Aware of their headstart, the British forbade the export of machinery, skilled workers, and manufacturing techniques. The British monopoly could not last forever, especially since some Britons saw profitable industrial opportunities abroad, while continental businessman sought to lure British know-how top their countries.

11.

Belgium Two Englishmen, William and John Cockerill, brought the Industrial Revolution to Belgium by developing machine chops at Liege (c. 1807), and Belgium became the first country on the continent to be transformed economically. Like its English progenitor, the Belgian Industrial Revolution centered in iron, coal and textiles.

12.

France France was more slowly and less thoroughly industrialized than either Britain or Belgium. While Britain was establishing its industrial leadership France was immersed in its revolution, and the uncertain political situation discouraged large investments in industrial innovations. By 1848 France had become an industrial power, but despite great growth under the second empire, it remained behind England. In order to protect their

48

infant industries from British competitors, French Industrialists obtained government aid, usually in the form of high tariffs. 13. Other Europeans

13.1.

Countries lagged far behind. Their bourgeoisie, the class primarily responsible for the growth of industrialism, lacked the wealth, power and opportunities of their British, French and Belgian counterparts. Political conditions in the other nations also hindered industrial expansion. Germany, for example, despite vast resources of coal and iron, did not begin its industrial expansion until after national unity was achieved in 1870. Once begun, Germanys industrial production grew so rapidly that by turn of the century that nation was outproducing Britain steel and had become the world leader in the chemical industries The eastern Europeans countries were behind. It was not until the five-year plans that the Soviet Union became a major industrial power, telescoping into a few decades the industrialization that had taken a century and a half in Britain. The mid-20th century witnessed the spread of the Industrial Revolution into hitherto non-industrialized areas such as China and India.

13.2.

13.3.

14.

Socio-Cultural Aspects

14.1.

The socio-cultural accompaniments of the Industrial Revolution are closely interrelated to its technological and economic aspects. Not only did the Industrial Revolution enable am to produce more, travel faster, and communicate more rapidly, but it also provided him with more material conveniences. In its early stages, however, the Industrial Revolution seemed to have deepened mans poverty and misery. In the domestic system of manufacture, the labourer usually had a garden to provide him with food, even when there was no work to be done. With his removal to the city, the worker became entirely dependent upon the functioning of the machine for his subsistence. This, coupled with the fact that the specialization of labour forced the worker to perform the same task continually, gave rise to the charge that the Industrial Revolution reduced man to a machine and made the machine the master, rather than the tool, of man. Workers laboured long hours for miserable wages and lived in ugly, unsanitary tenements. The working day was 13 hours or longer. The workers seldom saw daylight, for gas illumination enabled them to work from before daybreak until after dark. Above all, the workers were insecure. The presence of a large pool of labourers, caused partly by the employment of women and children, partly by the influx of workers from overpopulated rural areas, meant that industrialized society was faced with a new social phenomenon: chronic mass unemployment. In addition to those who were unable to find work were others who were thrown out of work by temporary shutdowns, depressions or business failures. Some were unable to work because of old age or impaired efficiency. Still others lost their jobs because of technological improvements that enabled one machine to do

14.2.

14.3.

14.4.

49

the work of many men. In the early years of the Industrial Revolution, some workers had sought to wreck the machines that were putting them out of work. In 1779, for example, many textile mills were destroyed during serious riots in Lancashire. Despite the possibilities of economic advancement in a society where competition and economic freedom were stressed, the average workingman had little chance to escape poverty.

14.5.

The harsh exploitation of workers was not lost upon some of the humanitarian spirits of Victorian England. The famous Sadler report of 1832 exposed the brutality practised within factories and stimulated the movement for reform and the passage of Factory Acts that removed some of the worst abuses. Much of the writing on the Industrial Revolution has been affected by this picture of the appalling conditions of the factory workers. Socialist theorist claimed the exploitation of the workers was inevitable under capitalist competition. Others, including romantic writers with nostalgic medievalism, condemned both capitalism and industrialism. In the 20th century this pessimistic interpretation achieved a scholarly foundation in the works of J. L. and Barbara Hammond, who viewed the early days of industrialization as the bleak age, and in the writing of Lewis Mumford, who claimed that the Industrial Revolution produced a new barbarism wherein civilizations shifted from an interest in human values to measuring life in material and pecuniary terms. Some economic historians, notably T. S. Ashton, attempted to rehabilitate the Industrial Revolution, claiming that many of the economic and social evils usually blamed on it antedated the mid-18th century and that industrialization raised real wages in certain areas of the economy. The transition from countryside and cottage to city and factory was bound to create social stress. Besides, many of the social strains were actually the result of wars or other dislocations and would have occurred even had manufacturing remained undeveloped. Finally, Ashton points out that had the population increased without an Industrial Revolution the European countries could not have provided minimum living standards for the great mass of the population. Instead, Europe would have been subject to the same miserable conditions prevailing in Asian countries that suffer from overpopulation and under developed industrialization. There is some validity in these varying evaluations of the Industrial Revolution, depending upon whether one adopts a short-range or long-range point of view, and upon the yardstick used for comparison. Conditions under the early factory system appear dismal when compared with an idyllic medieval agrarian system with the early modern domestic system at its best, or with an idea situation. On the other hand, these conditions seem an improvement when compared with the seamy reality of medieval life, the domestic system at its worst, or the living conditions or the masses in certain Asia countries. Furthermore, it is increasingly evident that not all the workers suffered under the factory system, and that in some cases their conditions were improved.

14.6.

14.7.

14.8.

14.9.

50

14.10. Nevertheless, there can be no doubt that in the early phases of the Industrial
Revolution human gains were small in comparison with the great strides made in technology. Viewed in the larger perspective of the development of western civilization, however, it may well be that the sufferings of the early 19 th century factory workers are outweighted by the possibilities of greater material goods and the conquest of mans physical environment that have grown out of industrialization. 15. Continuing Revolution

15.1.

Perhaps sufficient historical perspective is lacking to make a final judgment of the Industrial Revolution. For one thing, the Industrial Revolution as a process is still continuing, some of the Asia countries undergoing its first stages in the 1960s. At the same time, this continued process ushered in what some authorities consider a new Industrial Revolution in the western countries already industrialized. Despite considerable overlapping with the old, there is mounting evidence for a new Industrial Revolution in the mid 20th century. In terms of basic materials, man has begun to explore many natural resources not hitherto utilized. The rare earth and lighter metals are increasingly employed. At the same time man has created new alloys and synthetic products in the laboratory; e.g., plastics, which augment the basic materials provided by nature. Similarly nuclear and solar energy promise a revolutionary transformation in power sources. Combined with these are developments in machines and tools which have given rise to the automatic factory. Although some segments of industry were almost completely mechanized in the 19th century, automatic operation, as distinct from the assembly line, first achieved major significance in the 1950s. Ownership of the means of production also underwent changes. The oligarchical ownership of the means of production that characterized the Industrial Revolution in the 19th century gave way to a wider distribution of ownership through purchase of common stocks by individuals and by institutions such as insurance companies. Many countries of Western Europe socialized basic sector of their economies. There was also a change in political theories instead of the laissez-faire ideas that dominated the economic and social thought of the classical Industrial Revolution. Governments generally moved into the social and economic realm to meet the needs of their more complex industrial societies.

15.2.

15.3.

16.

Americas Industrial Revolution

16.1.

With a stride that astonished statisticians, the conquering hosts of business enterprise swept over the continent; 25 years after the death of Lincoln, America had become [the foremost] manufacturing nation of the world. What England had accomplished in a hundred years, the United States had achieved in half the time. So wrote historians Charles and Mary Beard in the 1920s about Americas amazing industrialization.

Change came at a dizzying pace. Steel production, which provided the structural underpinnings for industrial growth, soared from 19,000 tons in 1867 to 11.4 million tons

51

in 1900. By the 1880s, the steel produced for nails alone amounted to twice the total steel output of the 1870s. Only 36,000 patents had been issued in the United States prior to 1860; from 1860 to 1890, 440,000 were granted. The new inventions included the telephone, the light bulb, the typewriter, the phonograph, barbed wire, the adding machine, and the cash register. As railroads crisscrossed the country, national markets tying remote rural areas to seaports and to the world economy emerged. In addition, railroads, the first large corporations, demonstrated the usefulness of managerial skills and bureaucratic organizations. For instance, to meet their needs for efficiency and predictability the railroads set up time zones, which the government soon adopted. Yet Americas industrial revolution was not without its victims. The familial atmosphere of crafts-peoples shops slipped away as emerging corporations drove smaller businesses into bankruptcy. Workers had little bargaining power as industrialists increasingly exploited the 25 million immigrants who poured into Americas burgeoning cities between 1865 and 1915. Young children often worked 12-hour days 6 days a week. Moreover, Americas accident rate was higher than that of any other industrialized nation. In 1913, 25,000 factory workers were injured so severely that they required at least four weeks disability. Attempts by states to regulate child labor, hazardous work conditions, and business practices were blocked by the Supreme Court, Congress, and a federal system devoted to laissez-faire economics. Scholars appropriately refer to the changes wrought by rapid industrialization as a revolution. Patterns and traditions in every day life were affected by the massive outpouring of goods. Labor businesses became the norm rather than the exception. Along with these trends, the need for more and better-skilled management became apparent to everyone.

Checkpoints 1. Why did England emerge as the birthplace of Industrial Revolution? How important really is the technological, political, economic, social & cultural environment to business and industry? Are the technological, political, legal, economic, social and cultural environment in the Philippines today favorable to pole-vaulting to the 21st century as a Tiger Economy? Elaborate. Discuss the relations between Agrarian Reform and Industrial Revolution in 18 th century England? Does Agrarian Reform push industrialization in the Philippines? Reasons. Could the Industrial Revolution in England have succeeded without their inventors? Discuss.

2.

3.
4. 5.

52

6. 7. 8.

Could the British inventors have succeeded without the British entrepreneurs and financiers? Elaborate. Does the Philippines need inventors to truly industrialize? Could not the Philippines just buy, license or franchise technology to pole-vault to cutting-edge industrialization? From the comparative industrial development of Britain and France, what insights and lessons relevant to the Philippines do you derive? Elaborate. What insights and approaches do you derive from the emergence of textile industry as the avant garde in the Industrial Revolution of England? Does it show us any approach or techniques in industrializing the country? Explain.

9. 10.

53

Part Two

MODULE 4 The Classical Approaches

Learning Objectives: After reading this module, the student is:

1. 2.

Expected to know the what, how, and why of Systematic Management, Scientific Management, Bureaucratic Management and Administrative Management. Identify the leading gurus and exponents of each management approach and know their principal contributions or ideas, concepts and principles of management.

1.

Pre-Classical Period: The Systematic Approach 1.1 In pre-industrial society, work was done by craftsmen. There was no employeremployee relationship as known today Relationship was a long personal, familial lines. It was basically feudal. It was only upon the advent of the Industrial Revolution with the Factory System as centerpiece that modern management practice came about. In U.S., 1886 marked the origins of the study of modern management thought and practice. It was in this year, that Sear, Roebuck and Company was founded by a railroad station agent, Richard W. Sears; the first Coca-Cola was served in Atlanta; Avon Products, Cosmopolitan Magazine, Johnson & Johnson, Westinghouse, Munsingwear, and UpJohn were founded. Henry R. Towne (1844-1924), co-founder of Yale Lock Co., presented a paper titled The Engineer as an Economist to the American Society of Mechanical Engineers (ASME). Towne proposed the creation of an Economic Section in ASME to act as forum and clearing house for shop management which would deal with subjects of organization, executive management, responsibility and reports. He also proposed shop accounting which would treat the nuts and bolts of time and wage systems, cost determination and allocation, bookkeeping methods, and manufacturing accounting. The society would develop a body of literature, record members experiences, and provide a forum for exchanging managers ideas.

1.2

1.3

The proposal triggered the turning point in the formal study of management. F. W. Taylor was in the audience.

54

And the study focused on manufacturing or shop floor of the factory. The approach was called Systematic Management. At the time, the work practices, were chaotic as observed by Adam Smith. Poor coordinations among subordinates and different levels of management caused frequent problems and breakdowns in the manufacturing process.

1.4

The goals of systematic management approach aimed to:

build specific procedures and processes into operations to ensure coordination; achieve economy in operations; provide adequate staffing; maintain inventories to meet consumer demand; setup organizational controls. 1.5 These goals of systematic management were achieved through: Definition of duties and responsibilities. Standardized techniques and methods of performing these duties. Specific means of gathering, handling, transmitting and analyzing information. Cost accounting Wage Production control systems to facilitate coordination and communications. 1.6 Systematic management focused on internal operations because: problems and concerns were in the manufacturing processes. managers were under pressure to meet explosive growth in demand. managers were free to focus on internal issues of efficiency, partly because the government did not constrain business practices significantly. labor was poorly organized at this stage of industrial development. As a result, managers were oriented toward things and machineries, rather than people. Systematic Management At a Glance Key Concepts 1. 2. 3. Systematized manufacturing organizations. Coordination of procedures and processes built into internal operations. Emphasis on economical operations, inventory management, and cost control.

Contributions 4. 5. Beginning of formal management in U.S. Promotions of efficient, uninterrupted production

Limitations 6. 7. Ignored relationship between an organization and its environment. Ignored differences in managers and workers view.

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2.

Scientific Management

2.1.

Systematic management failed to lead to widespread production efficiency. Hence, the emergence of a new approach -- the classical.

The classical approach breaks into two distinct areas the lower level management and higher level management analyses.

2.2.

Scientific management comes out of the body of knowledge developed by Frederick W. Taylor, Frank and Lillian Gilbreth, and Henry L. Gantt. They studied mainly the jobs of workers at lower levels of organization or shop floor level. The second area makes a comprehensive higher level analysis of the whole organization. It concentrates on the functions and processes of management of the entire organization. It gave birth to the Administrative Approach and its guru is Henri Fayol of France. The scientific management approach --

2.3.

2.4.

is a philosophy about the relationship between people and work -- not a technique or efficiency device. seeks to increase productivity and maximize efficiency. seeks to find the one best way to do a task. studies work methods, how a task can be constructed too bring out the highest productivity from works, and set optimal performance standards. requires rational selection of workers and training for job development.

2.5.

The Four Principles of Scientific Management

F. W. Taylor came out with four principles of scientific management based on his experience, observation, and practices on the shop floor of the factory: 1. The true science of management and scientific methods of designing jobs should be developed. This is necessary to find the one best way of doing each task. In other words, management should develop a scientific approach for each element of an individuals work to replace rule-of-thumb guidelines. Management should scientifically select, train, teach and develop each worker. The objective is to put the right person to the right job, or to place workers to the task best suited for him. Management should be cooperative with workers to ensure that the job matches plans and principles. Management should ensure an equal division of work and responsibility between managers and workers. There should be cooperation and interdependence between managers and workers.

2.

3. 4.

56

Frederick W. Taylor (1856-1917) Father of Scientific Management F. W. Taylor was an American industrial engineer who created a mental revolution about how to get things done in organizations. By unceasingly searching through observation and studies of actual work practices for one best way to do a task, he ended up as the founder/father of scientific management. Peter Drucker, the guru of management gurus, recognized Taylor as the first man in history who did not take work for granted, but looked at it and studied it. In short, he was the first guy who asked the question: What is work? In the process, be revolutionized industrial processes by making a systematic study of work and scientifically developing methods of production. Robert Waterman, co-author of In Search of Excellence and the author of The Renewal Factor, observes that many managers of the 90s unconsciously practice Taylorism without realizing it. The development of the principles of scientific management was a result of the experience of Taylor in three companies -- Midvale Steel, Bethlehem Steel Company, and Simonds Rolling Machine Company. At Midvale Steel, Taylor started as laborer and ended as chief engineer. From his experience, he came up with his managerial system based on his studies of production line. He observed how workers practiced soldiering -- that is -- the practice of workers to intentionally restrict their daily production. Here he analyzed and timed the movements of workers as they did their series of task activities. Using time study, Taylor broke each task into its component parts and designed the quickest and best methods of operations for each part of the job. He thus established how much workers would be able to accomplish with the equipment and materials at hand. In short, he was able to determine optimal standards of performance. Thus began scientific management approach. To discourage soldiering by workers who feared they would lose their jobs if they worked faster, Taylor developed the differential rate system which provided for increased pay to more productive and efficient workers. At Bethlehem Steel Company, Taylor refined his methods of work study to improve the efficiency of the company yard gang. The yard gang had to unload raw materials from incoming rail cars and then load the finished products on outgoing rail cars. Through time and motion study, Taylor was able to set a standard of performance as to the quantity of materials and products that a worker could handle a day with a corresponding higher pay. Consequently, the workers got willing to work faster for higher differential pay. The result was a dramatic increase in productivity and efficiency. Taylors consulting years at Simonds Rolling Machine Company saw him produce impressive improvements in productivity, quality, worker morale and wages. In sum, F. W. Taylors contributions to management are:

57

Job analysis Time-and-motions studies Standardization of processes Efficiency techniques Productivity measurements to systematically track labor costs Worker rest periods Training and development for both workers and managers Piece-rate method -- an approach to compensation whereby workers are paid for each unit of work completed Setting of standards of performance Motivation by monetary considerations

Taylor, by re-engineering the work methods in factory or manufacturing system, put an end to the weaknesses of traditional management and systematic management such as haphazard job assignments, unrelenting long hours of work and soldiering. Frank (1868-1924) and Lillian Gilbreth (1878-1972) The Gilbreths working as husband-and-wife team -- searched for the one best way in their study of work. They used time and motion study as their principal tool. The painstaking studies of work motions of various types of employees and the analysis of the time it took to perform those motions led to increased employee productivity. He also considered the study of the work environment and behavioral variables in addition to motion itself. Motion study today is the study of physical actions required to complete a task in the most efficient manner possible. The motion study reduces a job to its basic movements. The motion analysis is used to establish job performance standards and to eliminate unnecessary or wasted movement. At the time, Frank used a revolutionary new tool -- motion pictures -- to study the structure of tasks. For instance, his study of bricklaying, based on his experience as bricklayer, his first job, is a classic example of time and motion study. He observed that bricklayers used three different sets of motions: (1) for teaching apprentices; (2) for working fast; (3) for deliberately holding down the pace of work. Frank Gilbreth identified 18 individual motions that a bricklayer uses to lay bricks. By changing the structure of the task, he was able to reduce the 18 motions to 5. This resulted in more than 200% increase in workers overall productivity and greater efficiency. The Gilbreths were the first to describe elementary human micromotions which they labeled therbligs (Gilbreth spelled backward, with the th transposed. After the death of Frank, Lillian shifted her focus of study on psychology of management. She studied work efficiency, the effects on the worker of efficiency efforts, and fatigue. She studied individuals and their performances at work under stressful conditions. She devoted herself to improving employee working conditions, scheduled breaks, normal lunch periods, and standard

58

work days. Her work influenced Congress to establish child labor laws and develop legislation to protect workers from harsh and unsafe conditions.

Henry L. Gantt (1861-1919) Henry L. Gantt, perhaps Taylors leading systems for shop-floor production scheduling. His main tools is known as Gantt Charts a graphic illustration (usually a bar graph or diagram) that indicates time allocations for sequential operations and traces progress, routing, scheduling, and tasks in time intervals. It is a graphic means of coordinating the flow of work; a progress report in visual form that identifies stages of work and operational deadlines. It is commonly used today in PERT-CPM and adapted for computerized scheduling applications. Gantt established quota systems and bonuses systems for workers and managers who met or exceeded their quota standards. These evolved into gainsharing concept currently acclaimed as the newest method of motivating employee performance. Gainsharing is a method of bonus compensation based on a formula that shares profits or productivity gains among investors and employees. Gainsharing uses control techniques to monitor performance, compare results with established work standards, and pay employees bonuses in addition to base wages when results exceed standards. Gantt was one of the first managers to be concerned with social responsibility of business. The business system must accept its social responsibility and devote itself primarily to service or the community will ultimately make the attempt to take it over in order to operate it at its own interest.

2.6.

Scientific Management and the Model-T

At the turn of the century, automobiles were a luxury that only the wealthy could afford. They were assembled by craftspeople who put an entire car together at one spot on the factory floor. These workers were not specialized, and Henry Ford believed they wasted time and energy bringing the needed parts to the car. Ford took a revolutionary approach to automobile manufacturing by using scientific management principles. After much study, machines and workers in Fords new factory were placed in sequence so that an automobile could be assembled without interruption along a moving production line. Mechanical energy and a conveyor belt were used to take the work to the workers. The manufacturer of parts likewise was revolutionized. For example, formerly it took one worker 20 minutes to assemble a flywheel magneto. By splitting the job into 29 different operations, putting the product on a mechanical conveyor, and changing the height of the conveyor, Ford cut production time to five minutes. By 1914 chassis assembly time was trimmed from almost 13 hours to 1 hours. The new methods of production required complete standardization, new machines, and an adaptable

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labor force. However, costs dropped significantly, the Model-T became the first car accessible to the majority of Americans, and Ford dominated the industry for many years.

Systematic Management At a Glance Key Concepts * * Analyzed work using scientific methods to determine the one best way to complete production tasks. Emphasized study of tasks, selection and training of workers, and cooperation between workers and management

Contributions * * * * Improved factory productivity and efficiency Introduced scientific analysis to workplace Piece-rate system equated worker reward and performance Instilled cooperation between management and workers

Limitations * * * * * Simplistic motivational assumptions. Workers viewed as part of a machine Potential for exploitation of labor Excluded senior (top) management tasks. Ignored relationship between the organization and its environment

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Case Study McDonalds Recipe for Success Wow, we just had a customer walk out on us! Jim Delligatti drops his Big Mac in midbite and bolts from the booth, rushing past four rows of customers who make up the noonday rush at Warrendale McDonalds. Taking a command position behind the counter that stretches he width of the restaurant, Jim Delligatti, by his mere presence, spurs his twelve workers to hustle even faster. Its not enough that Delligatti has opened forty-seven of the famous hamburger outlets over the past twenty-six years and has become a millionaire in the process. He hates to see anyone leave one his stores unhappy, and his white-suited crews in their white McNugget Mania painters caps know it. Production -- twelve burgers, six Macs, barks the fresh-faced assistant manager posted behind the warming bin, where wrapped burgers can remain no more than ten minutes before being discarded. Coming up, says a high school boy, who slaps a handful of frozen patties on the hot, stainless steel grill. Behind him, a young woman takes buns from a toaster and dresses them with quick squirts of mustard and ketchup from a silver dispenser. She puts the pickles on by hand, taking care not to spread them out so the customer will not get everything in one gulp. At the french-fry station, another young woman shakes salt onto a hot batch of golden-brown potatoes and then scoops the fries into red paper containers. With todays crowd, none will remain in the warming bin over the seven-minute maximum. The lunchtime whirl all comes together to meet one goal: to serve the customer within sixty seconds of the orders being placed. As huge as it is, the McDonalds empire really is built around individual stores, each striving to conform to the company motto of quality, service, cleanliness, and value. These standards are hammered into new franchisees at McDonalds Hamburger U training center in Oak Brook, Illinois. The way the firm sees it, customers should get the same McDonalds quality whether they buy their hamburgers at a McDonalds in Brooklyn, Singapore, or Warrendale, a small community twenty miles north of Pittsburg. Jim Delligatti, the owner/manager of forty-seven McDonalds outlets could use a classical approach to management to stress organizational efficiency -- the one best way to perform jobs at McDonalds -- to increase productivity. As a simplified example, Delligatti might want to check whether the silver dispenser used to apply mustard and ketchup is of the appropriate size to require only one squirt or whether more than one squirt is necessary to adequately cover the hamburger bun. Delligatti also could use motion studies to eliminate unnecessary or wasted motions by his employees. For example, are hamburgers, french fries, and drinks located for easy insertion into customer bags, or must employee walk unnecessary steps during the sales process? Also, would certain McDonalds employees be more efficient over an entire working day if they sat, rather than stood, while working? The classical approach to management might also guide Delligatti in scheduling more

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efficiently. By ensuring that an appropriate number of people with the appropriate skills are scheduled to work during peak hours and that fewer such individuals are scheduled to work during slower hours, Delligatti would maximize the return on his labor costs. Delligatti also might want to consider offering his employees some sort of bonus if they reach certain goals. But he should make sure that the goals that he sets are realistic, since unreasonable or impossible goals tend to make workers resentful and unproductive. For example, Delligatti might ask that certain employees reduce errors in filling orders by 50 percent during the next month. If and when these employees reached the goal, Delligatti could give them a free lunch as a bonus. Comprehensive analysis of management implies that Jim Delligatti might be able to improve his McDonalds restaurants by evaluating the entire range of his managerial performance -- especially with regard to organizational efficiency, the handling of people, and appropriate management action. For example, Delligatti should check with his employees to make sure they are receiving orders from only one source -- that a manager isnt instructing an employee to man french fry station while moments later an assistant manager tells the same employee to tend to the grill. Along the same lines, Delligatti might want to verify that all of his employees are being treated equitably -- that fry cooks, for example, dont get longer work breaks than order takers. The behavioral approach to management suggests that Delligatti should consider the people working for him and evaluate the impact of their feelings and relationships on the productivity of his restaurants. He could, for example. Try to make the work more enjoyable, perhaps by allowing his employees to work more enjoyable, perhaps by allowing his employees to work at different stations (grill, beverage, french fry, cash register, etc.) each day. He might also consider creating opportunities for employees to become more friendly with one another, perhaps through company sponsored softball teams. In essence, the behavioral approach to management stresses that Delligatti should recognize the human variable in his restaurants and strive to maximize its positive effects. Jim Delligatti could use the management science approach to solve any operational problems that arose. According to the scientific method, Delligatti would first spend some time observing, what takes place in one of his restaurants. Next, he would use these observations to outline exactly how the restaurant operates as a whole. Third, he would apply this understanding of restaurant operations by predicting how various changes might help or hinder the restaurant as a whole. Before implementing possible changes, he would test them on a small scale to see if they actually affected the restaurant as desired. If Delligatti were to accept the contingency approach to management, his actions as a manager would depend on the situation. For example, if some customers hadnt been served within sixty seconds because the deep-fat fryer had unexpectedly broken down, then Delligatti probably would not hold his employees responsible. But if he knew that the fryer had broken down because of employee mistreatment or neglect, then his reaction to the situation would likely be very different. Delligatti could also apply the system approach and view each of his restaurants as a system, or a number of interdependent parts that function as a whole to reach restaurant objectives. Naturally, each restaurant would be seen as an open system -- a system that exists in and is influenced by its environment. Major factors within the environment of a McDonalds restaurant would include customers, suppliers, competitors, and the government. For example, if one of McDonalds fast-food competitors were to significantly lower its price for hamburgers to a point well below what McDonalds was asking for a hamburger, Delligatti might be forced to consider modifying different parts of his restaurants system in order to meet or beat that price. McDonalds Recipe for Success were written to help you better understand the management concepts

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contained in this module. Answer the following discussions questions about this introductory case to further enrich your understanding of the module content: 1. 2. 3. What problems do you think an individual like Delligatti faces in managing a McDonalds restaurant? What action(s) do you think a manager like Delligatti would have to take to solve these problems? From what you know about McDonalds restaurants, how easy would it be to hold Delligattis job? Why?

3.

Administrative Management

Henri Fayol (1841-1925) Henri Fayol is considered the father of modern management. His contributions represent an important transportation transformation in management thought. They now dominate the study of management. Fayols contributions are the functions of management -- planning, organizing, commanding, coordinating, and controlling -- and the 14 principles of management. Commanding and coordinating are now subsumed under leadership. Thus, the present four functions of management -- planning, organizing, leading, and controlling -- come from Fayol. They are now the essentials of textbooks on management. Administrative management is the second area of classical management which deals with the functions and structure of the whole organization. It stresses management principles from a functional perspective -- an approach that explains managers responsibilities and activities according to general principles of management for planning, organizing, leading, and controlling. Fayol is generally regarded as the first to ask: What is management? To obtain the answer, he had to analyze the nature of managerial activity and to formulate a comprehensive theory of management based on his personal experience in running the French iron and coal combine of Commentry-Fourchamboult-Decazeville as managing director. His answer is written in his classic work Administration Industrielle et Generale or General and Industrial

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Management. It was originally published in French in 1916. But it was only in 1949 that it was translated into English and widely circulated. For years, Fayols ideas were overshadowed by Taylors scientific management because the industrialists were more preoccupied with production issues to rapidly expanding economy which was production led.

Fayols 14 Principles of Management

1.

Division of Work. Specialization belongs to the natural order of things. The object of division of work is to produce more and better output with the same effort. This is accomplished by reducing the number of objects to which attention and effort must be directed. Authority and Responsibility. Authority is the right to give orders and responsibility is its essential counterpart. Wherever authority is exerted, responsibility arises. Discipline. Discipline implies obedience and respect for the agreements between the firm and its employees. Establishing agreements binding a firm and its employees should be one of the chief preoccupations of industrial heads. Disciplinary formalities emanate from these agreements, and may involve sanctions judiciously applied. Unity of Command. An employee should receive orders from one superior only. Unity of Direction. Each group of activities having one objective should be unified under one plan and one head Subordination of Individual Interest to General Interest. The interest of one employee or group of employees should not prevail over that of the company or broader organization. Remuneration of Personnel. To maintain their loyalty and support, workers must be given a fair wage for services rendered. Centralization. Like division of work, centralization belongs to the natural order of things. However, the appropriate degree of centralization varies from one organization to another. The problem is to find the measure that will give the best overall yield. Scalar Chain. The scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks. It is an error to depart needlessly from the line of authority, but is an even greater one to adhere to it the detriment of the business. Order. A place for everything and everything in its place. Equity. Equity is a combination of kindliness and justice. Stability of Tenure of Personnel. High turnover breeds inefficiency. A mediocre manager who stays is infinitely preferable to an outstanding manager who comes and goes.

2. 3.

4. 5. 6. 7. 8.

9.

10. 11. 12.

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13. 14. 4.

Initiative. Initiative involves thinking out a plan and ensuring its success. This gives zeal energy to an organization. Esprit de Corps. Union is strength, and it comes from harmony among the personnel. The Bureaucratic Management Approach

Jesus Christ once said that the poor has been with us and will always be with us. We can say the same thing with bureaucracy. Bureaucracy has been with us and will always be with us even if the organizational structure becomes flatter, leaner and meaner. Bureaucracy was set up by the Chinese, Egyptians, Persians, Babylonians, Greeks, and the Romans in the administration of their empires. The Roman Catholic Church has the most enduring bureaucracy over the last 2000 years. However, it is only in the early decades of the 20th century that bureaucracy has been studied and a body of knowledge created to make it a distinct management approach.

Max Weber (1864-1920) A German sociologist, social historian and philosopher, Max Weber is considered the guru of bureaucracy because of his work on studies of Germans government bureaucracy. He is said to be the father of organization theory. Weber defined bureaucracy as the ideal pure form of organization. Bureaucracy is a model of organization based on defined positions, formal authority, and a regulated environment that includes well-documented rules, policies, and procedures. Bureaucratic management is a traditional management system that relies on rules, set hierarchy, a clear division of labor, and formal procedures and that focuses on the overall organizational structure. The strengths of bureaucratic management are consistency and predictability. The objectives of Webers studies were to improve organizational structures used in large organizations and to design a blueprint of a structure that would help organizations achieve its objectives. Webers concept of bureaucracy is conceptually close to Fayols view of structure. With the growth in size and complexity of organizations in the 1940s and 1950s, leaders took a fresh interest in Webers ideal bureaucracy as model to improve the structures of their organizations. His formalized structures then led to the examination of informal organizations, human relations, organizational behavior, and other factors that influence the formal blueprint of an organization.

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In seeking to define an ideal system and develop a bureaucratic model as a rational method of structuring complex organizations, Weber identified seven characteristics of bureaucracy.

Seven Characteristics of Webers Bureaucracy

1.

Rules -- Rules are formal guidelines for the behavior of employees while they are on the job. Rules can provide the discipline for the organization to achieve its goals. Adherence to rules ensures uniformity of procedures and operations and helps maintain organizational stability, regardless of personal desires, whims and caprices of managers and employees. Efficiency and success will result by following the rules in a routine and unbiased

manner.

2.

Impersonality -- Reliance on rules leads to impersonality. Managers and employees are selected on the basis of their qualifications, either by examination or on the basis of their education or training. All employees are evaluated according to rules and objective data. An impersonal superior does not allow subjective personal or emotional considerations to color his evaluations of subordinates. The organization need not rely on one particular individual.

3.

Division of Labor -- The division of labor is a process of dividing duties and functions into simpler, more specialized tasks. Managers and employees are assigned and perform duties based on specialization and personal expertise.

Bureaucratic structures eliminates variability that results when managers and employees in the same organization have different skills, experiences and goals.

4.

Hierarchical Structure -- A hierarchical structure ranks jobs according to the amount of power and authority (right to decide) given to each manager or employee. Authority and responsibility are clearly defined and legitimized. Typically, power and authority increase at each higher-level, up to the top of the hierarchy. Each lower-level position is under the control and direction of a higherlevel position. According to Weber, a well-defined bureaucracy helps control the

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behavior of employees by making clear to each exactly where he/she stands in relation to every other employee. Roles are standardized. Formal network of relationships among specialized positions in the organization are structured.

5.

Authority Structure -- An authority structure is the organizational structure that determines the right to make decisions of varying importance at different levels within the organization.

Weber identifies three types of authority structures traditional, charismatic, and rational legal. Webers Three Types of Authority

1. 2.

Traditional is based on tradition or custom. Example: The divine right of kings like Louis XIV of France Charismatic authority is based on followers personal belief and trust in the leader because of special qualities or abilities they perceive in the leader. Examples: Social, political and religious movements are often headed by charismatic leaders Jesus, Joan of Arc, Andres Bonifacio, Martin Luther King. In business Steven Jobs and Walt Disney. Rational-legal authority is based on impersonal laws and rules that apply to all. A superior is obeyed because of the position he/she occupies within the organizations hierarchy. This authority depends on employees acceptance of rules. Lifelong Career Commitment In bureaucratic management system, employment is viewed as a lifelong career commitment. In general, it means that job security is guaranteed as long as the manager or employee is technically qualified, competent, and performs satisfactorily. Entrance requirements are based on technical qualifications, rather than patronage. The organization uses job security, tenure, step-by-step salary increases, and pensions to ensure that employees satisfactorily do their assigned duties. Promotion is granted when an employee demonstrates technical competence required to handle the demands of the next higher position. It is assumed that organizational level corresponds closely with expertise.

3.

6.

Bureaucratic organization, such as the civil service, often rely on the results of written and oral exams, amount of education, and previous work experience to determine management rank.

7.

Rationality -- is the use of the most efficient possible means to achieve the organizations objectives. Rationality requires general organizations goals or purpose to be broken down into more specific objectives for each part of the organization.

At Xerox, for example, the overall corporate goals are to provide customers with copying machines and services of superior quality at a fair price and to earn enough profit to maintain the companys growth.

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An objective of its R & D (Research and Development) department is to pursue new xerographic technology and to transform technological breakthrough into high-quality products and services. If all departments achieve their individual objectives, the corporation reaches its overall goals.

Bureaucratic Management Key Concepts * * * * * Contributions * * * * * * * * * Limitations * * * * * * * * Inefficiency due to rigid rules. Rules become an end in itself Red tape Inflexibility. Hinders timely decision-making Coldness Dehumanization. Ignores importance of people and interpersonal relationship Throttles creativity & innovativeness Slow decision-making Incompatibility with changing technology Provides rational model for restructuring complex, mega organizations. Minimizes subjective personal factors that affect decision-making Consistency Predictability Reliability Stability Continuity Emphasizes the position, rather than the person, as the source of authority Promotes efficient performance of routine activities Webers Seven Characteristics of bureaucracy Structured, formal network of relationships among specialized positions in an organization. Rules & regulations standardize behavior. Hierarchy defines the relationship among jobs. Jobs staffed by trained specialists who follow rules.

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* *

Self-perpetuating. Difficult to dismantle once established. Ignores the importance of people and interpersonal relationships Accumulation of power can lead to authoritarian management

United Parcel Service -A Working Bureaucracy United Parcel Service (UPS) can deliver a small package anywhere in the United States for $2 to $3. The company views its prices as competitive with those of the U.S. Postal Service, Federal Express, and Purolator Courier. Unlike the Postal Service, however, UPS must pay taxes on real estate, income, and fuel. It cant subsidize package delivery with revenue from first-class letters. Nevertheless, UPS makes an excellent profit on its revenues from first-class letters. UPS makes an excellent profit on its revenues of more than $12.4 billion. Why has UPS been so successful in its ground operations? Two important reasons are automation and bureaucracy. Automation is evident in its 100 mechanized centers that sort at least 40,000 packages an hour. Employees who operate sorting machines handle 1124 packages an hour and are allowed no more than one mistake per 2500 packages. The more than 152,000 employees at UPS handle millions of packages a day. Yet the organization is so efficient that it can send a truck to pick up a package from a customers home or business and deliver packages door to door -- and still make money. The bureaucratic organization at UPS results in efficiency. Each manager is given several bound policy books about company rules and is expected to refer to them regularly. For example, drivers are instructed to walk to a customers door at a brisk pace of three feet per second. They should knock so as not to lose valuable seconds searching for the doorbell. Jobs at UPS centers are broken down in a clearly defined division of labor. Employees perform the specialized duties of drivers, loaders, clerks, washers, sorters, and property maintenance personnel. The hierarchy of authority is clearly defined: Eight levels extend from the washer at a local center up to the company president. Technical qualifications are UPSs criteria for hiring and promotion. Company policy says, A leader does not have to remind others of authority by use of a title. Knowledge, performance, and capacity should be adequate evidence of position and leadership. Special favors are forbidden. Each employee sets performance targets and has an equal opportunity to succeed. Promotions and salary increments are based on objective performance criteria, not on background or position in the organization. Finally, UPS relies on extensive written records and has installed a computer system to help with record keeping. Recorded operating costs and production figures are compared to those of competitors. Daily worksheets specifying performance quotas are kept on every employee and department. Employees daily achievements are accumulated on a weekly and monthly basis. UPS pays its drivers $15 an hour, and, with overtime, many of them earn between $35,000 and $40,000 a year. In return for this salary UPS expects maximum performance, and it monitors employees accordingly. For example, one UPS manager watching a driver make deliveries and seeing any waste of seconds will point out the inefficiency at once. According too the manager, a mere thirty seconds wasted at each stop can snowball into a big delays by days end. UPS drivers, with nicknames like Ace, Hammer, Slick, and Rocket Shoes, take pride in

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meeting rules established by the company: We used to joke that a good driver could get to his stop and back to the truck before the seatbelt stopped swaying. Checkpoints 1. 2. What are the goals of systematic management? What are the key concepts and contributions of: a. b. c. d. Systematic Management Scientific Management Administrative Management Bureaucratic Management

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MODULE 5 Behavioral Approach to Management

Learning Objectives: After reading this module, you are expected: 1. 2. 3. 4. 5. To know the contributions of the 3 eras of behavioral approach. To appreciate the implications to management Theory X & Y. To know the application of the hierarchy of needs. To know the hygiene approach to motivation. To imagine the concept of apocalyptic liberation. 1. Backdrop and Context of Developments in Management Approaches

During the 1920s and 1930s, the U.S. and other industrialized nations experienced radical social and cultural changes. Mass production triggered a Second Industrial Revolution in U.S. Assembly lines were releasing a flood of inexpensive goods -- cars, appliances, and clothing - into an increasingly consumer society. The overall standard of living in U.S. rose. Working conditions in many industries improved. As productivity increased dramatically, the average work week declined from seventy hours to less than fifty. Factories were hard-pressed to satisfy consumer demand. Thus, factories eagerly tried to attract workers from he farms to the cities by making industrial employment more appealing than it was during Taylors tenure at Midvale Steel. During the Great Depression, the Federal government began to play a more influential role in peoples lives. By the time Franklin Delano Roosevelt (FDR) took office in 1933, the national economy was hovering on the brink of collapse. To provide employment, the government undertook temporary public work projects constructing dams, roads, public buildings, and laying out national parks. It also created government agencies such as Social Security Administration, to assist the aged, the unemployed, and the disabled. In one of the eras most dramatic changes, unskilled workers increased their ability to influence management decisions by forming powerful unions. During the 1930s, Congress passed laws increasing union powers by deterring management from restricting union activities, legalized collective bargaining, and required management to bargain with unions. As a result, the American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO) were formed. In 1937, the autoworkers and steelworkers won their first big contracts. Eventually, professionals and skilled workers, as well as unskilled workers, united for better pay, increased benefits, and improved working conditions.

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Following the Depression and World War II, a new wave of optimism swept the American economy, organized labor enjoyed its greatest success from the 1950s through the 1970s. Against this backdrop of change and reform, managers were forced to recognize the human aspect of their task. They were now leading workers who did not appear to exhibit what traditional management theorists had thought was rational behavior. That is, workers werent always performing up to their physiological capabilities, as Taylor had predicted rational people would do. Nor were effective managers consistently following Fayols fourteen principles. By exploring these consistencies, those who favored behavioral viewpoint of management gained recognition. 2. Three Eras of Behavioral Approach The First Era The Second Era The Third Era --1920s when Hawthorne research inspired what we now call Human Relations Movement. -- post-World War II period when theorists focused on human needs and motivation. -- occurring now, as we search for integrative concepts that satisfy the dual necessities of meeting employee needs and improving productivity.

3.

The First Era Human Relations Movement

The human relations movement (HRM) focused on individuals working in group environment. Managers and employees were studied in terms of group dynamics. Early contributors to HRM concluded that by improving workers satisfaction with their jobs, companies could improve their performance. Thus, managers were encouraged to be more cooperative with workers, to upgrade the social environment at work, and to reinforce the selfimages of the individual employees. The management theorists of the human relations movement are:

1.

Kurt Lewin (1890-1947) He examined the effects of different types of leaderships and wrote extensively on group behavior. He is remembered more for his 3-step process of change -- Defreezing, Introduction of change, Refreezing. Chester I. Barnard (1886-1961) He advocated conciliatory management relations that enhanced cooperation between employees and supervisors. Mary Parker Follett (1868-1933) She is considered one of the founders of the human relations movements. She felt that managers were responsible for motivating employees to pursue organizational goals enthusiastically, not simply to obey orders. She rejected the notion that managers should be groomed to give orders. Instead, managers should be trained to work with employees toward the attainment of common objectives.

2. 3.

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Follett laid the ground work for studies in group dynamics, conflict management, and political process in organizations. Later theorists would build on her work to contribute to advancements in industrial psychology and sociology.

4.

George Elton Mayo (1880-1949) In association with F. J. Roethlisberger and W. J. Dickson, Elton Mayo pioneered experimental research on human behavior in work settings.

Mayo and a Harvard University research team conducted a series of experiments at the Hawthorne plant of Western Electric Company in Illinois. Begun in 1924 to determine the effects of illumination on employee productivity, the experiment spanned several years. In this fieldwork, Mayo was initially concerned with scientific management, but his results showed that human relations and behavior were far more crucial considerations for management. The Hawthorne Studies have become famous for enduring contributions to management thought. Elton Mayo & Hawthorne Studies The Relay Assembly Test Room. The first significant experiment by Elton Mayo and his team at the Western Electric Hawthorne plant concerned employees, all women, in the Relay Assembly test Room. One group was subjected to changes in lighting and different methods of altering the intensity of the illumination. The other group experienced no change in work conditions. Researchers monitored other environmental factors and then followed work results closely. Mayo hypothesized that changes in illumination would yield one lighting condition that created the best productivity. His experiments clearly reflected the scientific management idea of finding the one best method of controlling the work environment. However, no matter what the researchers did, productivity increased among the test groups. Even more startling, it increased in the control group. Even when all conditions were set back to normal, productivity increased. Mayo considered is research a failure until he interviewed workers. His findings centered on effects of research intervention and on human relations. Test Room employees found working there more enjoyable during the experiments because they felt they were involved in something important. Management had changed during tests. Allowing more freedom, and employees found they had a much better relationship with their supervisors and could work without fear. They also became closer as a work group because of the enhanced social contact. The researchers concluded that human factors influenced productivity, and over several years, they conducted more research in other areas of the Hawthorne plant. The Bank Wiring Room. A piece-rate work system was observed in the Bank Wiring Observation Room. Once again, control and study groups were formed and observations were made about human relations. Researchers found that faster workers were pressured by their peers to slow down instead of working as hard as they could. In effect, the work group set the pace and

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enforced standards rather than management or individuals, who had the legal right to work as hard as they wanted to. Social pressure dominated behavior. The researchers drew several conclusions from the Hawthorne Studies. First, recognition and attention to individual workers motivated them to work harder. Second, group dynamics influenced work substantially. Third, and perhaps most important, intervention by researchers created a perception by workers, real or not, that they were doing something of value. The act of intervention and its impact is now called the Hawthorne Effect.

The implications of Mayos work are far reaching. After the Hawthorne Studies, organizations were viewed as social systems with both formal and informal patterns of authority and communications. Mayo was the first to suggest that managers needed interpersonal skills for counseling employees, diagnosing personal and group needs, balancing, technical needs for productivity with human needs for job satisfaction. These conclusions seem perfectly reasonable today. But in the context of industrial society, at the time, many thought that the research findings of Mayo, Roethlisberger, Dickson, and other colleagues were irrational. Those were the days when collective bargaining and safety regulations were not yet recognized, when standard workday was more than 10 hours and children worked alongside with adults. Factories were dimmed and cavernous. Employees were considered little more than productive units like machines. But machines were treated better because they were expensive. 4. The Second Era Human Needs and Motivation

The second era was dominated by a professor (McGregor) and his student (Maslow). But it is the latter who immortalized his mentor. Both have emerged as management gurus. Their behavioral research emphasized motivation -- the concept of behavioral change or result of influence that alters an individuals performance. The research focused on personal needs of employees and how they influenced performance. Contributions to motivation theory immediately after World War II inspired greater efforts to understand individual behavior in work environments. This focus led to a field of study called Organizational Behavior.

4.1.

Douglas McGregor (1906-1964) brought fresh perspective to management. He challenged leaders to think of subordinates as responsible, capable, and creative.

McGregor felt throughout history leaders have treated subordinates as irresponsible and lazy. He called this approach to management as Theory X. Theory X managers tend to be autocratic control-oriented, and distrustful. Theory X assumptions lead managers to view human nature pessimistically. In contrast, McGregor identified a second perspective -- Theory X -- that reverses these assumptions on human nature. Theory X managers view subordinates

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optimistically as individuals who want the challenge of work, prefer self-control, and are capable of responsible, independent judgment.

McGregors Assumptions on Theory X and Theory Y Theory X * * * * Theory Y * * * * Work is natural, and most people prefer the physical and mental effort of working. Commitment to objective is also a natural state for most individuals, particularly when rewards are associated with achievement. Human beings can exercise self-control, prefer self-direction, and have the capacity for innovation and creativity. Under most reasonable circumstances, the majority of people will accept responsibility, many individuals seek leadership rather than the security of being led. Most human beings dislike work and avoid it when ever possible; They must be forced, threatened, and directly controlled in order to achieve organizational goals. Most people are lazy, prefer to be directed, shun responsibility, have little ambition, and want security. Th3e average human being avoids leading and wants to be led.

In other words, Theory X is based on a set of assumptions that employees are lazy, unambitious, and must be coerced to work; hence, a managerial approach based on fear tactics. Theory Y, on the other hand, is based on a set of assumptions that employees are generally responsible, want to have meaningful work, and are cap[able of self-direction; hence, a managerial approach based on conciliatory, consultative, participative approach.

4.2.

Abraham Maslow (1908-1970) based his theory of human behavior on the idea that individuals work to satisfy human needs, including simple physiological needs, such as food, and complex psychological needs such as self-esteem.

Maslow observed that a fulfilled need did little to motivate an employee. For example, a person who has sufficient food to eat cannot be easily enticed to do something for a reward of food. In contrast, a person with an unfulfilled need could be persuaded to work to satisfy that need. Thus, a hungry person might work hard for food. Maslow called this the deficit principle.

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The deficit principle is a crucial aspect of Maslows theory of motivation based on human needs that suggests an unsatisfied needs becomes a focal motivator, while a satisfied need no longer influences an individuals behavior. Maslow suggested that managers be alert for unmet needs and then create rewards to satisfy them. Maslow formulated a progression principle -- a concept that successively higher-order needs in his hierarchy of needs are not active motivators until lower-order needs are fulfilled. In other words, successively higher-level needs are activated once lower-level needs are met. In Maslows view lover-level needs that go unfulfilled tend to take the precedence in an employees mind over higher-level needs. For example, for someone who is hungry, the need for food will far outweigh the need for self-respect. This particular aspect of Maslows work is controversial because many people ignore lower-level needs such as safety and security to satisfy higher-order needs such as the social need for love. McGregors Assumptions on Theory X and Theory Y The basic human needs placed by Maslow in an ascending order of importance and shown in Figure are these:

1.

Physiological needs. These are the basic needs for sustaining human life itself, such as food, water, warmth, shelter, and sleep. Maslow took the position that until these needs are satisfied to the degree necessary to maintain life, other needs will not motivate people. Security, or safety, needs. These are the needs to be free of physical danger and the fear of loss of a job, property, food, or shelter. Affiliation, or acceptance, needs. Since people are social beings, they need to belong, to be accepted by others. Esteem needs. According to Maslow, once people begin to satisfy their need to belong, they tend to want to be held in esteem both by themselves and by others. This kind of need produces such satisfaction as power, prestige, status, and selfconfidence. Need for self-actualization. Maslow regards this as the highest need in his hierarchy. It is the desire to become the highests need in his hierarchy. It is the desire to become what one is capable of becoming to maximize ones potential and to accomplish something.

2. 3. 4.

5.

The Motivation-Hygiene Approach to Motivation

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Maslows need approach has been considerably modified by Frederick Herzberg and his associates. Their research purports to find a two-factory theory of motivation. In one group of needs are such things as company policy and administration, supervision, working conditions, interpersonal relations, salary, status, job security, and personal life. These were found by Herzberg and his associates to be only dissatisfiers and not motivators. In other words, if they exist in a work environment in high quantity and quality, they yield no dissatisfaction. Their existence does not motivate in the sense of yielding satisfaction; their lack of existence would, however result in dissatisfaction. They were consequently referred to as hygiene factors. In the second group, Herzberg listed certain satisfiers -- and therefore motivators -- all related to job content. They included achievement, recognition, challenging work, advancement, and growth in the job. Their existence will yield feelings of satisfaction or no satisfaction (not dissatisfaction). As we can see from figure, the factors identified by Herzberg are similar to those suggested by Maslow. Maslows Hierarchy of Needs.

The first group of factors Herzberg called maintenance or hygiene factors. Their presence will not motivate people in an organization; yet they must be present, or dissatisfaction will arise. The second group, or the job content factors, he found to be the real motivators because Esteem needs they have the potential; of yielding a sense of satisfaction. Clearly, if this theory of motivation is sound, managers must give considerable attention to upgrading job content.
Affiliations or acceptance Comparison of Maslows and Herzbergs Theories of Motivation needs Security or safety needs

Need for selfactualizat ion

Physiological needs

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Source: Koontz, Weihrich, Essentials of Management, p. 324

4.3.

Apocalyptic liberation is that state of life beyond the level of self-fulfillment. It is that stage in life when a person in unbound from the demands of work whether as business owner or professional manager. His goals are service to, or betterment of society, humanity, the environment, or other causes, or simply inner peace and happiness. (Emmanuel T. Santos, Wharton, 1992.)

MASLOWS NEED HIERARCHY Self-actualization

5.

Third Era integrative Concepts of Organizational Behavior

To begin with, an integrationist is a theorist who integrates concepts of several schools of management thought to suggest improved management practices.

Early human relations research was value-laden and more philosophical than practical. Classical theories, though practical, went to the opposite extreme and ignored the human side of enterprise.

Behavioral scientists who followed McGregor and Maslow expanded their ideas and attempted to integrate human behavior concepts with the practical necessities of managing organization. These are the integrationists Victor Vroom, Lyman Porter, Edward Lawler, etc. They took McGregors ideas, applied Maslows need concepts, and studied how organizations can use scientific techniques to achieve results. They have proposed methods of instituting, systematic change in organizations, resolving conflict, achieving objectives through motivated individuals, and improving group dynamics for greater productivity. The central theme of integration is that understanding human behavior is the key to effective management, but that management practices must still be based on scientifically sound concepts.

Esteem or status Affiliation or acceptance

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More recently, integrative approaches have focused on national trends in productivity and how organizations can improve their performance.

5.1.

Theory Z

McGregors use of X and Y as identifiers for management style has been expanded to include Theory Z, which has become a convenient label for Japanese management philosophy. Theory Z refers to Japanese management practices of consensus decision-making, quality circles, and employee participation to enhance productivity. Theory Z captures the essence of Japanese management techniques as practiced by excellent firms in U.S. William Ouchi introduced Theory Z in 1981 to describe American adaptation of Japanese organizational behavior. His theory is based on a comparison of management in Japanese organizations -- called J type firms -- with management in American firms -called A type enterprises.

Contrasts Between American and Japanese Organizations American -- Type A Mobile employees. Employees seek opportunities, advancement, and career changes by moving between employers and organizations. Personal Decision Making. Americans tend to rely on individual judgment and prefer to make decisions unilaterally, either as managers or as individuals controlling their own destiny. Individual Responsibility. Americans prefer taking personal initiatives and shouldering responsibilities as individuals rather than in groups. Rapid Advancement. Employees gain economically and socially from rapid advancement, with a premium on success as measured by promotions. Specialization in Careers. American organizations are founded on specialization of skills and labor; employees create intensity in career choices and follow specialized career paths. Explicit Control Mechanisms. Western nations emphasize explicit standards and controls for work and evaluation; employees expect explicit control mechanism and guidelines. Focused Concern for Employees. American firms tend to view employees in their roles at work, paying less attention to the complete profile of the individual: family, social issues, personal health, and general well-being. Japanese -- Type J Lifetime Employment. Japanese workers tend to make a lifetime commitment to their organizations and, in turn, organizations assume responsibility for lifetime employees. Collective Decision Making. Employees and managers seek consensus on decisions and endorse collective decision-making processes.

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Group Responsibilities. Japanese prefer group processes and accept group responsibilities through conciliatory communications; group rewards are not uncommon. Slow and Systematic Advancement. Employees rise slowly through established ranks; when opportunities arise for promotion, loyalty and harmonious behavior are considered. General Career Perspective. Japanese organizations do not emphasize specialization but prefer flexibility and internal training so they can reassign personnel and develop skills among those who are members of the organization. Careers are linked to organizations, not professions. Implicit Control System. Japanese organizations emphasize quality control and process control methods, often with trained engineers in operational, but standards and work criteria are replaced by major objectives; control is let implicitly to shop-floor decisions. Holistic Concern for Employees. Japanese organizations take account of employees beyond the work environment and often aid in providing housing, day-care services, and mental and physical health counseling, among other things; employees are considered integral members of the total organizations.

Ouchi recognized that cultural differences between the two nations prevent American managers from adopting Japanese techniques without modifications. For example: Americans are highly mobile; often seek opportunities, jobs, and career advancement by changing employers. Japanese workers contrast, tend to make a lifetime commitment to their organization. Still Ouchi discovered similarities between practices in Americas leading firms and Japanese organizational behavior. For example: in Hewlett-Packard and IBM, longterm employment has been the norm, even though it falls short of lifetime commitment. Typical A-type firms rely on individual management decision-making and J-type firms rely on collective decision-making. But a number of excellent U.S. firms endorse a collaborative decision-making process closely approximating J-type behavior. Perhaps the most important element in Theory Z is its combination of human Commitment Long-term employment relations Employees and scientific management techniques. to concepts The Z-type company endorses collective responsibility, a pervasive concern for Decision Improved benefits Making employees, and a commitment to participative decision-making. These organizations recognize individual and group needs, but simultaneously develop exceptional quality control techniques and scientific work methods. Cross-skills Z incorporates classical Theory training Specialization principles, behavioral tenets, and human relations concepts to emphasize quality and and development productivity.
Holistic Human Relation

Z-Type Organizations: The American Adaptation

Responsibility

Concern for employees and their families Employees involvement in group efforts and team decision making Individuality stressed for quality performance Innovation, implicit controls with formal evaluation

Career Stability Control and Evaluation

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The Motivation-Hygiene Approach to Motivation Key Concepts * * * Behavioral approach explains how managers influence others to achieve organizational objectives through human relations and motivation. Productivity and employee behavior are influenced by the informal work group. Cohesion, status, and group norms determine output and productivity. Managers stress employee welfare, motivation & communication. Social needs have precedence over economic needs.

*
*

Contributions * * * * * * Psychological and social processes influence performance. Productivity trough people. McGregors Theory X and Theory Y Ouchis Theory Z Maslows Hierarchy of Needs Apocalyptic liberation

Limitations * Ignored workers rational side and the formal organizations contribution to productivity. Research findings have overturned the prescription that happy workers are more productive.

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Checkpoints 1. 2. What is the significance of the Hawthorne studies? What are the contributions to management theory if. 1. 2. 3. 4. 5. Mary Parker Follett Elton Mayo Douglas McGregor Abraham Maslow Frederick Herzberg

3.
4. 5.

Explain Apocalyptic liberation What is Theory Z? What are the key concepts and contributions of the behavioral approach?

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MODULE 6 Contemporary Approaches

Learning Objectives: After reading this module you are expected. 1. 2. To know concept of management science. To appreciate the systems contingency and situational approaches. 1. Quantitative/Management Science Approach

The Quantitative Approach to management is an approach based on decision theory, use of statistical techniques for problem solving, and application of mathematical models to organizational processes. Churchman, Ackoff, and Arnoff define Management Science, or Operations Research (OR) approach as: 1. an application for the scientific method to problems arising in the operation of a system and; 2. the solving of these problems by the solving of mathematical equations representing the system. The scientific method involves:

1. 2. 3.

Observing systematically observe the system whose behavior must be explained to solve the problem. Constructing a model use these specific observations to construct a generalized framework (model) to be predicted. Deducing use the model to deduce how the system will behave under conditions that have not been observed but could be observed if the changes were made. Testing the model by performing an experiment on the actual system to see if the effects of changes predicted using the model actually occur when the changes are made.

4.

Management Science is an approach to management that relies on models ad mathematical analysis to improve decision making. It uses mathematical models for qualified decision making models.

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For example: a company will use consumer survey which will, in turn, trigger decisions about hiring employees, opening sales office, contracting with suppliers for materials, and so on. Management science should no t be confused with F. W. Taylors Scientific Management. Management Science (MS) can be traced to World War II when physicists and other hard scientists were organized into teams that eventually became known as Operations Research (OR) groups. The ORs were used to apply mathematical techniques to defense and logistic problems. Using statistical models, supplied by Operations Research (OR) military experts were able to locate German submarines with high probability. One OR grouped was asked to determine which gunsights would best stop German attacks on British mainland. ORs were used to plan strategic troop movements and deploy new weapons systems effectively. After the war, private corporations began assembling teams of quantitative experts to tackle complex issues and to apply quantitative analysis to management problems and decisions. Computers have facilitated the development of specific quantitative methods. These include such techniques as statistical decision theory, linear programming, queuing theory, simulation, forecasting, inventory modeling, network modeling, and break-even analysis. Organizations apply these techniques in many areas of management -- production, quality control, marketing, human resources, finance, and distribution, planning, research and development. MS is applied to Operations Management (OM) which is concerned with using quantitative methods for production and operations control. These methods are not necessarily mathematically complex. Most of them use simple statistics and are easily understood. In this area of applied management, some techniques are inventory control models, materials-handling procedure, purchasing systems, production scheduling systems, and costcontrol processes. The applications of Operations Management (OM) are in production operations and service operations. For example, banks have used the new techniques for customer service systems.

1.1.

Characteristics of MS Application 1.1.1. 1.1.2. 1.1.3. 1.1.4. Large number of variables. Use of economic implications as guidelines for particular decisionmaking. Use of mathematical models to investigate the decision situation. Models are constructed to represent reality and then used to determine how the real world situation might be improved. Use of computer. The great complexity of the problems and the sophisticated mathematical analysis required of problem-related information are two factors that make computers valuable to MS analyst.

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Quantitative/MS Approach Key Concept * Application of quantitative analysis to management decisions.

Contributions * * Developed specific mathematical methods of problem analysis. Helped managers select the best alternative among a set

Limitations * Models neglect non-quantifiable factors. Managers not trained in these techniques and may not trust or understand the outcomes of techniques. Not suited to non-routine or unpredictable management decisions.

*
*

2.

The System Approach

The system approach to management is based on general system theory. Ludwig von Bertalanffy is recognized as the founder of general system theory. He was a scientist who worked mainly in the areas of physics and biology. Kenneth Boulding built directly on Bertalanffy and Boulding developed their ideas in 1930s. The system approach takes a holistic view of the entire organization system and stresses processes.

2.1.

Systems Theory

Was proposed in the 1940s by the biologist Ludwig von Bertalanffy (Anthology: General Systems Theory, 1968), and furthered by Ross Ashby (Introduction to Cybernetics, 1956). Von Bertalanffy was both reacting against Reductionism and attempting to revive the Unit of Science. He emphasized that real systems are open to, and interact with, their environments, and that they can acquire qualitatively new properties through emergence, resulting in continual evolution. Rather than reducing an entity (e.g. the human body) to the properties of its parts or elements (e.g. organs or cells), systems theory focuses on the arrangement of and relations between the parts which connect them into a whole (cf. holism). This particular organization determines a system, which is independent of the concrete substance of the elements (e.g. particles, cells, transistors, people, etc). Thus, the same concepts and principles of organization underlie the different disciplines (physics, biology, technology, sociology, etc.), providing a basis for their unification.

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The main premise of the theory is that to understand fully the operation of an entity, the entity must be viewed as a system. To understand the system as a whole requir4es understanding the interdependence of the parts. A system is a number of interdependent parts functioning as a whole for some purpose. General system theory integrates the knowledge of various specialized fields so that the system as a whole can be better understood. Management developed systems theory in 1960s & 1970s. Kast and Rosenweig extended systems perspective to functioning of organizations. A system is collective association of inter-related and interdependent parts. Just as the human body is a system with organs, muscles, bones, a nervous system, and a consciousness that links all parts together, an organization is a system with many departments that are linked by people working together. It is the relationships among human beings that define the system, not the machines and facilities. A system-oriented manager makes decisions only after identifying other managers or departments that might be affected by the decision. The systems approach provides a frame of reference for managers who make decisions in a changing environment. The systems approach is an approach in solving problems by diagnosing them within a framework of what are called the systems inputs, transformation process, and outputs in the light of feedback.
ENVIRONMENT

INPUTS Human, physical, financial, and information resources Feedback

TRANSFORMATION PROCESS

OUTPUTS Products and services Loops

Input are the human, physical, material, financial, and information resources that enter the transformation process and leave it as outputs. At a university, for example, the inputs include students, faculty, money, buildings, and audio-visuals. Transformation processes are the technologies used to convert inputs into outputs. In a university, the transformation processes are such technologies as lectures, reading assignments, lab experiments, term papers, and tests. Outputs are the original inputs now in a changes condition. Outputs in a university include the graduating students.

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Feedback is any form of information about a systems status and performance. One form of feedback in a university is the graduates ability to get jobs. In an organization, feedback may take the form of marketing surveys, financial, reports, production records, performance appraisals, etc. Managements role in the systems approach is to ease the transformation process by planning, organizing, leading, and controlling the system. The main parts of the management system are organizational input (organizational resources), organizational process (the production process), and organizational output (finished goods/services). The parts represent a combination that exists to achieve organizational objectives. General systems theory has important I placations foe management. research shows that effective communication is crucial for managing large organizations. The emergence of systems concepts during the late 1940s created new fields such as management information systems (MIS). The systems theory also led to scholarly research about the general principles of management.

2.2.

MIS

The Management Information Systems (MIS) integrated networks of information that support decision making. Usually, the information is computerized, but also includes the human aspect of integrating information and data throughout the organization. MIS is a natural extension of systems theory, in which interrelated components of organizations must be orchestrated. It includes the vertical integration of management functions from top-level executives to first-line supervisors. It includes horizontal integration of activities among functional areas such as production, marketing, personal, and finance. One main role of MIS is to recognize information as a resource. Then use that resource to better achieve organizational objectives. Using information resources effectively requires MIS managers to consider how best to collect, store, process, and transmit data. Information is like other resources such as labor, capital, and materials except that it is usually internally generated rather than acquired. An MIS system includes people, hardware, software, data, and processes. The ultimate aim of generating management information systems is not to overwhelm managers with information, but to create systems that provide sufficient and accurate information in a timely fashion. The field of MIS evolved alongside computer technology. Using computers, however, is not the same as having an MIS. Systems theory provides a way to interpret organizations. It takes a holistic view of the entire organizational system and processes.

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2.3.

Systems and Wholeness

The concept of wholeness is important in general system analysis. The system must be viewed as a whole and modified only through changes in its parts. A thorough knowledge of how each part functions and the inter-relationship among the parts must be present before modifications of the parts can be made for the overall body of the system. L. Thomas Hopkins suggested six guidelines for system wholeness for use during system analysis: 1. 2. 3. 4. 5. 6. The whole should be the main focus; the parts to receive secondary attention; Integration is the key variable in wholeness analysis. It means inter-relatedness of parts within the whole; Possible modifications of each part should be weighed against possible effects on every other part. Each part has some role to perform so that the whole can accomplish its purpose. The nature of the part and its function is determined by its position in the whole. All analysis starts with the existence of the whole. The parts and their interrelationships should then evolve to best suit the purpose of the whole. Types of Systems

2.4.

According to Bertalanffy, there are two types of systems closed and open. Closed systems are those that are not influenced by and do not interact with its environment. They are mostly mechanical and have necessary predetermined motions or activities that must be performed regardless of the environment. Examples: a clocks wheels, gears, etc must function in a predetermined way if the clock as a whole is to exist and serve its purpose. Most production departments operate as closed systems -- they produce standardized products in an uninterrupted process. Open system interacts with the external environment. Managers in a marketing department, for example, constantly try to respond to changes in customers desires. They monitor what competitors are doing, then develop ways in which their organizations can deliver better quality and service at a lower price. The external environment includes the social, political, legal, technological, and economic forces that affect the system. A subsystem is one of possibly many lower levels within a larger system. Subsystems in Panasonic include its marketing, human resources, production, accounting, and finance departments. Panasonic is a subsystem of its parent corporation Matsushita. Matsushita is a subsystem of Japans overall economic subsystem, which is part of the worlds economic system.

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2.5.

Federal Express -- An Open System

Federal Express Corporation was founded in 1971 by Frederick Smith and started operations in 1972. Smith realized that ours is an information society in which time is of the essence. Over half of all working Americans earn their living by processing information. Business has become increasingly more urgent. Logistical systems to support this fast-paced economy have become integral parts of it. Smith anticipated that growing service and computer industries that relied on rapid information delivery would support a small-package express business. He developed a system to provide overnight door-to-door delivery service for high-priority packages and documents. Service is provided Monday through Saturday, with packages and documents routed through 145 airports in the United States and certain points in Canada, Puerto Rico, Europe, and the Far East [open system]. Local offices are maintained at or near airports in more than 300 cities and employ customer service agents, handlers, loaders, and a staff of couriers who pick up and deliver packages [outputs]. The company now handles more than 850,000 packages per day and has an annual sales volume [outputs] of more than $4 billion. Federals innovative use of a computer system for tracking packages from their origin to their destination is critical to its success. This sophisticated computer system also allows messages [inputs] to be left for the courier even when the delivery vehicle isnt occupied. In addition, this system enables Federal to locate a customers shipment anytime it passes through six electronic gates during transit [transformation] and to accurately bill the customer. Automatic sorting system based on computer and optical character recognition are used to provide efficient customer service. Federal owns and operates more than 175 aircraft [transformation]. The company also operates more than 17,000 computer- and radio- dispatched vans that pick up and deliver shipments. These aircraft and vehicles are important subsystems of the companys air-ground transportation system. The companys aircraft operate in a hub-and-spoke pattern, with Memphis as the hub. Each weekday evening aircraft carry packages [inputs] for delivery from cities throughout the United States to Memphis, where they are sorted [transformation] between midnight and 2:00 a.m. and reloaded onto aircraft. They are then flown to cities by early morning, and delivered to customers [outputs] by the companys couriers by 10:30 a.m. Global Management Challenge Daimler-Benz Automaker! Conglomerate? Many companies choose to stick with what they know. Daimler-Benz, the extraordinarily successful German automaker, has historically found sticking to the knitting quite to its liking. But, uncharacteristically, in 1985 it chose to diversify significantly. It acquired three firms -Dornier (aerospace), MTU (engine manufacturing), and AEG (diversified consumer products) -which added substantially to the companys revenues but virtually nothing to its bottom line. These companies al had a strong technological base, and the companys chairman, Werner Breitschwerdt, felt compelled to bring that technology to Germanys second largest corporation. Breitschwerdt believed that this markets consumers will demand ever more sophisticated automobiles, the kind that only technological supremacy can deliver. He felt that cars had to be intelligent, be able to see through fog and be able to talk to each other. He also felt that increased levels of competition in Daimler-Benzs luxury auto markets dictated diversification.

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He also believed that the new subsidiaries will provide ways for getting the costs of auto production down, to better enable the company t prosper in the future. Note how similar Daimler-Benzs strategies are to those of General Motors. Did Werner Breitschwerdt make the right decisions? Should he have gone against the companys history? Only time will tell.

2.6.

Information for Management System Analysis

The general system theory allows for the use of information from many specialized discipline. Information from any discipline can increase the understanding of management systems operations and thereby enhance the success of the system. Certo prefers the system approach which uses three sources of information to analyze the management system -1. 2. 3. the classical approach to management, the behavioral approach, and the management science approach Other Concepts from Systems Theory

2.7.
are:

Aside from Open System versus Closed System, the other concepts from systems theory

1. 2.

Efficiency -Effectiveness --

the ratio of outputs to inputs. the degree to which the organizations outputs correspond to the needs and wants of the external environment. there are many avenues to the same outcome. Systems theory suggests that many different combinations of subsystems, ideas, and methods can lead to the same goal.

3.

Equifinality --

This is in contrast with the one best way concept of scientific management.

4.

Synergy --

the whole is greater than the sum of its parts.

For example: 3M has applied its core technology of adhesives to many products -- from industrial sealers to Post-it TM notes. 3M did not have to start from scratch for each product: its adhesive expertise provide synergies across products.

Systems Theory Key Concepts

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* * * * *

Organization is viewed as an open system Management must interact with its environment to gather inputs and return the outputs of its production. Organizational objectives must encompass both efficiency and effectiveness Organizations contain a series of subsystems. There are many avenues to the same outcome Synergies exist where the whole is greater than its parts.

Contributions * * * Recognized the importance of the organizations relationship wit the external environment Systems analysis is helping computer experts develop hardware as well as software with human-like intelligence; capable of processing languages and reasoning. Major impact on manufacturing through the use of computer-aided design (CAD) and computer-aided manufacturing (CAM)

Limitations * * Does not provide specific guidance on the functions and duties of managers. Still have to develop techniques to effectively deal with the human aspects of management because systems analysis has been used primarily in the management of production processes and in the technical planning and decision-making areas of management Contingency Approach

3.

Contingency Management is an approach to management that suggests leadership behavior should be adapted to accommodate different situations, or alternatively, leaders should be assigned to situations that best fit their leadership styles. Rather than suggest the best one way to manage, contingency approach implies that there are many effective ways to behave as managers, each depending on circumstances of the work environment. Research showed that management methods used in one circumstance seldom work the same way in other circumstances. In simple terms, contingency approach suggests that what managers do in practice depends on, or is contingent on, a given set of circumstances -- a situation. In essence, this approach stresses the if-then relationships. If this situational variable exists, then this is the action a manager probably would take. In general, the contingency approach attempts to outline the conditions or situations in which the various management methods have the best chance to succeed. This approach is based on the premise that although there is probably no one best way to solve a management problem in all organizations, there probably is one best way to solve any given management problem in any one organization. Perhaps the main challengers of using the contingency approach are:

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1. 2. 3.

Accurately perceiving organizational situations as they actually exist. Choosing the management tactics best suited to those situations. Competently implementing those tactics.

The general consensus of contingency writers is that if managers are to apply management concepts, principles and techniques successfully, they must consider the realities of the specific organizational circumstances they face. These include factors internal and external to the organization. The contingency theory is a problem-solving approach. It dictates that managers should consider the major elements in a situation before making a decision, determining what management style to use, determining how to structure an organization, or determining a plan or a budget. As one manager puts it the contingency viewpoint really means it all depends. It means different situations require different practices and allows the use of the other viewpoints or approaches separately or in combination to deal with various problems. Applying the contingency approach requires the development of conceptual skills. Managers must be able to diagnose and understand a given situation thoroughly -- to determine which approach is most likely to be successful -- before making a decision. The managers interpersonal and communications skills are essential for actually implementing the decision. Hellriegel and Slocum identify three key contingencies variables -- people, environment, and technology.

3.1.

Management Challenge Procter & Gamble Alters Historically Ingrained Management Practices

Procter & Gamble had a rich, historically founded organizational culture. There was the P&G way, and that was it. Well, that was it. Now there is the new P&G way. P&G, and more importantly its employees, lived by the rules. Among them was the one that said that brand managers have offices that are exactly 12 ceiling tiles by 12 ceiling tiles. Walls were move to make certain that offices were the right size. When P&G built its new headquarters building, it did away with ceiling tiles, just one signal among many that the culture was changing. P&G discovered in the early 1980s that its traditional way of proceeding, its long-established discipline, and its rules were impeding the company in its market situations. So it changed the rules. The company that did not lay off a single worker in the Depression has asked the employees to retire early and has even laid off some. It has been adamant about cutting costs. It cut the work force by 4 percent overall in a matter of months by requesting early retirement, by reduced hiring, and by firing people. Perhaps of most symbolic importance, the traditional one-page memo, which could spell success or failure for the new manager, is declining in importance. These one-page memos were used for almost everything, but especially to move ideas upward for a decision. P&G became a bureaucracy in the worst sense of

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the word. When it came to choose the color of the cap for a Folgers coffee can, the options were green or gold. The decision went all the way to CEO John Smale. He chose gold. Now there are even interdivisional projects teams making decisions about issues that once were made secretly by only those with the primary responsibility for the product or project. The company has added a new super brand manager, the category manager, taking power from the traditionally focal brand manager. Finally, CEO John Smale, having overseen years of gut-wrenching change, in late 1989, turned over the reins to Edwin Artzt. This move signaled a new global focus for P&G. Artzt was responsible for turning around fortunes of the firms international division, and promises to make the company more global. History is what you make of it.

3.2.

Common Contingencies

Many organizations share key situational characteristics or contingencies that can be grouped together: Growth markets Uncertain environments Corporate strategies The rate of change and degree of complexity in the organizations external environment. The internal strengths and weaknesses of the organization The values, goals, skills, and attitudes of managers and workers in the organization The types of tasks, resources, and technologies the organization uses. Depending on those contingencies, a manager may categorize the situation and use the proper competitive strategy, organization structure, or management process for the circumstances. The relative importance of each contingency variables depends on managerial problem being considered.

3.3.

Trends in Contingency Approach

Fred E. Fiedler undertook the first major research on contingency theory in 1967 in connection with his studies on style of leadership that a manager should use in a given situation. Leadership styles were characterized as either production-oriented or people-oriented. Fielder found that managers exhibit varying degrees of concern for production and for people. Paul Hersey and Kenneth H. Blanchard, management researchers and authors, identified different factors on which a managers leadership style depends. They believe that the maturity level of subordinate work group is the key factor. Therefore, leadership style should change depending on whether subordinates have low, medium, or high levels of maturity. In this context, maturity means a combination of job skills and psychological maturity. Spurred by research in leadership, contingency theory followed strategic planning, personnel, and marketing.

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In the 1970s, virtually all management functions became contingent on the elements of a situation. Examples of various contingency models: In strategic planning, recommended actions are often based on the particular stage of the product or industry life cycle. The design of the organization structure must match growth, size, environment, technological conditions, the requirements of strategy and the philosophy/vision of top management. In choosing leadership style, managers should first determine the condition of several key factors, such as personality, dynamics of subordinates work group, nature of subordinates job organizational structure and culture, etc. In controlling performance, the manager must recognize the who, what, when, where, how, and why of the situation

Contingency Approach Key Concepts * * Situational contingencies influence the strategies, structures, and processes that result in high performance. There is no more than one way to reach a goal. Managers may adapt their organizations to the situation

Contributions * * Identified major contingencies Argued against universal application of principles of management.

Limitations * * * 4. Not all critical contingencies have been identified Theory may not be applicable to all managerial issues Cannot apply where quantity or number of combinations of variables are supernumerary. Situational Management

While true contingency theory would attempt to define the factors and prescribe behavior for a specified set of these factors and their conditions, this becomes virtually impossible when the number of ht potential combination of variables in any given situation is considered. Charles Hofer, researcher of management strategy, for example, has determined hat some 186,000,000 combinations of the 50+ key strategic planning variables exist. Hence, contingency theory for most managers has evolved into situational management.

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Situational management suggests that managers should consider the major elements or variables in a situation before making a decision, and then determine what action to take based on past experience and knowledge.

Checkpoints

1.

What are the key concepts and contributions of: 1. 2. 3. 4. Quantitative/Management Science approach? Systems approach Contingency approach Situational approach

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Part Three

MODULE 7 Planning Concepts and Practices

Expectations: After reading this module, the student is expected:

1. 2.
3. 4. 5.

To familiar with the concept, nature, and process of, and approaches to, planning. To be knowledgeable with the hierarchy, types, and characteristics of objectives To know planning hierarchy and planning time horizon and the corresponding levels of management. To learn about the planning types and models. To know the different kinds of plans.

Developing Creative Thinking Embracing New Ideas People and organization form habits of thinking just they form other habits. Many organizations that reject new thinking outright do so because they view change as risk. There are, however, ways to defeat this negativity and encourage an acceptance of the new. For example, in any type of ideas meeting, forbid the use of the response yes, but a classic idea-killer until a predetermined number of new ideas have been explores and discussed. Thinking Positively If your are by nature, your are not very likely to think adventurously, but if you are highly creative, you may be impatient with skeptics who see only the objections in a discussion. Do not allow colleagues to get locked into these or any other mind-sets that prevent them from listening to other points of view with an open mind. If you think that a debate is becoming too negative, say so and ask everybody to try and make positive, creative contribution. This will help you avoid sterile debates in which everyone defends their own fixed position and attacks all other. Always encourage new, unexplored ways of thinking. If using a multistage approach, work through the stages one at a time. Deciding on Action The object of generating new ideas is to find the best one and act on it. Expert Mark Brown uses a five-stage model (given the acronym AGISA) for the group thinking process. It starts with Analysis, in which you seek to uncover the issues affecting the decision. That enables you to set Goals either opportunities (code White) or problems conventional, midly original (Soft Blue

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