MANAGEMENT

CHAPTER 2 EVOLUTION OF MANAGEMENT THEORIES

Most of this chapter is taken from the reference book and slides Management Challenges for Tomorrows Leaders by Pamela S. Lewis et.al chapter 2 (for educational purpose only)

Arief Samuel Gunawan ST., MIM.

CHRONOLOGICAL DEVELOPMENT OF MANAGEMENT PERSPECTIVES

Classical Perspective Behavioral Perspective Quantitative Perspective Systems Perspective Contingency Perspectives

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ENVIRONMENTAL FACTORS INFLUENCING MANAGEMENT THOUGHT

Economic Influences

The availability, production, and distribution of resources within a society.

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Social Influences
The aspects of a culture that influence interpersonal relationships. The impact of political institutions on individuals and organizations. The advances and refinements in any of the devices that are used in conjunction with conducting business.

Political Influences Technological Influences Global Influences

The pressures to improve quality, productivity, and costs as organizations attempt to compete in the worldwide marketplace.

SUBFIELDS OF THE CLASSICAL PERSPECTIVE ON MANAGEMENT

Focuses on the individual workers productivity

Focuses on the functions of management

Focuses on the overall organizational system

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SCIENTIFIC MANAGEMENT
The need to increase productivity In the beginning of 20th century The lack of skilled human resources the need to increase human resource efficiency to increase productivity Taylor, Gilbreth, Gantt

SCIENTIFIC MANAGEMENT: TAYLOR

Frederick W. Taylor (1856-1915)

Father of Scientific Management.

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attempted to define the one best way to perform every task through systematic study and other scientific methods. believed that improved management practices lead to improved productivity.

Three areas of focus:

Task Performance Supervision Motivation

TASK PERFORMANCE

Scientific management incorporates basic expectations of management, including:

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Development of work standards Selection of workers Training of workers Support of workers

SUPERVISION AND MOTIVATION

Taylor felt that a single supervisor could not be an expert at all tasks.

As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor.
This became known as Functional Foremanship.

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Taylor believed money was the way to motivate workers to their fullest capabilities.

He advocated a piecework system in which workers pay was tied to their output.

Workers who met a standard level of production were paid a standard wage rate. Workers whose production exceeded the standard were paid at a higher rate for all of their production output.

SCIENTIFIC MANAGEMENT: THE GILBRETHS

Frank Gilbreth

Specialized in time and motion studies to determine the most efficient way to perform tasks. Used motion pictures of bricklayers to identified work elements (therbligs) such as lifting and grasping.
A strong proponent of better working conditions as a means of improving efficiency and productivity.

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Lillian Gilbreth

Favored standard days with scheduled lunch breaks and rest periods for workers. Strived for removal of unsafe working conditions and the abolition of child labor.

SCIENTIFIC MANAGEMENT: HENRY GANTT, ROBERT OWEN

Henry L. Gantt (1816 1919)

Incentive system for workers and supervisors Gantt Chart for production schedule later developed into CPM and PERT methods The improvement of working condition can increase productivity Human resource is the most important factor in production process

Robert Owen (1771-1858)

SCIENTIFIC MANAGEMENT: USE AND

LIMITATIONS

Use of scientific management

Can be implemented in various organization activities Efficiency techniques The selection and development of workers scientifically The importance of work design Profesionalism of management

Limitations of scientific management

Increase of productivity without increase in welfare Ignoring the social needs and satisfaction of workers Distant relationship of workers and management Tendency of worker exploitation

ADMINISTRATIVE MANAGEMENT: FAYOL

Classical organization theory

Henri Fayol (18411925)

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First recognized that successful managers had to understand the basic managerial functions. Developed a set of 14 general principles of management. Fayols managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.

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FAYOLS GENERAL PRINCIPLES OF MANAGEMENT

1.

2.

3. 4. 5. 6.

7.

Division of work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual interest to the common good Remuneration of personnel

8.

9.
10. 11. 12. 13. 14.

Centralization Scalar chain Order Equity Stability Initiative Esprit de corps

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Source: Based on Henri Fayol, General and Industrial Management, trans. Constana Storrs (London: Pittman & Sons, 1949).

BUREAUCRATIC MANAGEMENT
Focuses on the overall organizational system. Bureaucratic management is based upon:

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Firm rules Policies and procedures A fixed hierarchy A clear division of labor

BUREAUCRATIC MANAGEMENT: WEBER

Max Weber (18641920)

A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behaviorthe approach to management now referred to as bureaucracy.
Division of labor Hierarchy of authority Rules and procedures Impersonality Employee selection and promotion

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WEBERS FORMS OF AUTHORITY

Traditional authority

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

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Charismatic authority

Rational-legal authority

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BUREAUCRATIC HIERARCHICAL POWER STRUCTURE

USE AND LIMITATIONS OF ADMINISTRATIVE AND BUREAUCRATIC PERSPECTIVES

Use

Can be applied to all activities Basics of effective managerial behaviors Awareness of possible problems that can occur

Limitations

Not all relevant for current situation Fit for organizations in stable and predictable environment Principles are too general for complex problems Not guidance in decision making

BEHAVIORAL PERSPECTIVE

Followed the classical perspective in the development of management thought. Acknowledged the importance of human behavior in shaping management style The Human Relations Movement Understand:
Physiological Safety Social Esteem Self-actualization

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People can be: Self-directed, Accept responsibility, Consider work to be as natural as play

Mary Parker Follett, Elton Mayo, Douglas McGregor, Chester Barnard

MARY PARKER FOLLETT

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

1. Coordination requires that people be in direct contact with one another. 2. Coordination is essential during the initial stages of any endeavor. 3. Coordination must address all factors and phases of any endeavor. 4. Coordination is a continuous, ongoing process.

ELTON MAYO

Conducted the famous Hawthorne Experiments.

Hawthorne Effect
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Productivity increased because attention was paid to the workers in the experiment. Phenomenon whereby individual or group performance is influenced by human behavior factors.

His work represents the transition from scientific management to the early human relations movement.

DOUGLAS MCGREGOR

Proposed the Theory X and Theory Y styles of management.

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Factor
Employee attitude toward work Management view of direction

Theory X Assumptions
Employees dislike work and. will avoid it if at all possible. Employees must be directed, coerced, controlled, or threatened to get them to put forth adequate effort. Employees wish to avoid responsibility; they prefer to be directed and told what to do and how to do it. Authoritarian style of management

Theory Y Assumptions
Employees enjoy work and will actively seek it. Employees are self-motivated and self-directed toward achieving organizational goals. Employees seek responsibility; they wish to use their creativity, imagination, and ingenuity in performing their jobs. Participatory style of management

Employee view of direction

Management style

CHESTER BARNARD

Felt that executives serve two primary functions:

Must establish and maintain a communications system among employees. Must establish the objectives of the organization and motivate employees.
Authority of a manager flows from the ability of subordinates to accept or reject an order from the manager once they:
Comprehend what the order requires of them. Review the orders consistency with organization goals. Perceive a personal benefit in obeying the order.

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Developed an acceptance theory of authority:

CLASSICAL VERSUS BEHAVIORAL PERSPECTIVE

vs.

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Classical Perspective
Focused on rational behavior

Behavioral Perspective
Acknowledged the importance of human behavior

THE QUANTITATIVE PERSPECTIVE / MANAGEMENT SCIENCE

Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. Problems are complicated and use economic implications as guidelines This approach has four basic characteristics: 1. A decision-making focus 2. Development of measurable criteria 3. Formulation of a quantitative model 4. The use of computers

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The Beginning of the Management Science Approach

Observe Construct Deduce Test

SYSTEMS PERSPECTIVE

An approach to problem solving based on an understanding of the basic structure of systems.

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Environmental interaction

Open systems must interact with the external environment to survive.

Closed systems do not interact with the environment.

Synergy: when all subsystems work together making the whole greater than the sum of its parts. Entropy: the tendency for systems to decay over time.

BASIC STRUCTURE OF SYSTEMS

Systems and Wholeness 1. The whole should be the main focus of analysis 2. Integration is the key variable in wholeness analysis
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3. Modifications weighed in relation to effects on every other part

4. Each part has some role to perform 5. Part and its function determined by its position in the whole 6. All analysis starts with the existence of the whole

INFORMATION TECHNOLOGY AND MANAGEMENT STYLE

Information technology can facilitate the use of a particular management style. Quantitative/ Systems Perspectives
Facilitated by advanced computers

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Classical Perspective
Facilitated by communications equipment

THE CONTINGENCY PERSPECTIVE

A view that proposes that there is no one best approach to management for all situations.

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Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation.

This requires managers to identify the key contingencies (all possible things that might occur) in a given situation.

PRODUCTION TECHNOLOGY EXAMPLES

Joan Woodwards Research Discovered that a particular management style is affected by the organizations technology. Identified and described three different types of technology:
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Production Technology

Examples

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

THE SYSTEM APPROACH

MANAGEMENT IN THE 21ST CENTURY

William Ouchis Theory Z

Japanese-style approach to management developed by William Ouchi

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Advocates trusting employees and making them feel like an integral part of the organization. Based on the assumption that once a trusting relationship with workers is established, production will increase.

LEARNING ORGANIZATION:A NEW APPROACH?

1. Systems Thinking

2. Shared Vision
3. Challenging of Mental Models

4. Team Learning
5. Personal Mastery

FUTURE ISSUES: DIVERSITY, GLOBALIZATION, AND QUALITY

Heightened concern for diversity initiatives within the workplace and within management Adoption of the concept of workers as decision makers, problem solvers, and team players Creation of a focus on and commitment to the concept of quality.

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FUTURE LEADERS MUST:

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

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