Part 1 Meeting the Challenges of the 21st Century

Topic
2

Evolution of
Management
Thought

PowerPoint Presentation by Wessex Press, Inc.

© 2016 Wessex Press, Inc. All rights reserved.

© 2016 Wessex Press, Inc. All rights reserved.
 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The five major The different The theories of The The systems The nature of The future
The perspectives of subfields that the major characteristics perspective the issues that will
major management exist in the contributors to of the building blocks contingency affect the
thought that classical the behavioral quantitative and their perspective of further
influence have evolved perspective of perspective of perspective of interactions. management. development of
s on the over the years. management management. management. management
and the central thought.
develop focus of each.

ment of
manage
ment
thought.

2–2
© 2016 Wessex Press, Inc. All rights reserved.
 Environmental Factors Influencing
Management Thought
• Economic Influences
 The availability, production, and distribution of
resources within a society. Resources:
Forest, Coal, Natural Gas
• Social Influences
 The aspects of a culture that influence interpersonal
relationships. Needs, values and standards

• Political Influences
 The impact of political institutions on individuals and
organizations. Political system, laws, rules,
regulations

2–3
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 Environmental Factors Influencing
Management Thought (cont’d)
• Technological Influences
 The advances and refinements in any of the devices
that are used in conjunction with conducting business.
Hardware & Software:
Opportunities for improvement
• Global Influences
 The pressures to improve quality, productivity, and
costs as organizations attempt to compete in the
worldwide marketplace. Advances in transportation,
information technology, internet
capabilities – more accessible

2–4
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 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The major The five The different The theories of The The systems The nature of The future
influences on subfields that the major characteristics perspective the issues that will
the major exist in the contributors to of the building blocks contingency affect the
development of perspectiv classical the behavioral quantitative and their perspective of further
management perspective of perspective of perspective of interactions. management. development of
thought. es of management management. management. management
managem and the central thought.
focus of each.
ent
thought
that have
evolved
over the
years.

2–5
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Figure 2.1 Chronological Development of Management
Perspectives

2–6
© 2016 Wessex Press, Inc. All rights reserved.
 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The major The five major The The theories of The The systems The nature of The future
influences on perspectives of the major characteristics perspective the issues that will
the management different contributors to of the building blocks contingency affect the
development of thought that subfields the behavioral quantitative and their perspective of further
management have evolved perspective of perspective of interactions. management. development of
thought. over the years. that exist management. management. management
in the thought.
classical
perspectiv
e of
managem
ent and
the central
focus of
each.

2–7
© 2016 Wessex Press, Inc. All rights reserved.
 Figure 2.2 Subfields of the Classical Perspective on Management

Focuses on the
individual worker’s
productivity
Focuses on the
overall
organizational
Focuses on the system
functions of
management

2–8
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 (a) Scientific Management: Taylor
• Frederick W. Taylor (1856-1915)
 Father of “Scientific Management”.

 attempted to define “the one best way” to perform

every task through systematic study and other
scientific methods.
 believed that improved management practices
lead to improved productivity.
 Three areas of focus:
 Task Performance
 Supervision
 Motivation
2–9
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 Task Performance
• Scientific management incorporates basic
expectations of management, including:
 Development of work standards

 Selection of workers

 Training of workers
 Support of workers

2–10
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 Motivation
• Taylor believed money was the way to motivate
workers to their fullest capabilities.
 He advocated a piecework system in which worker’s
pay was tied to their output.
 Workers who met a standard level of production
were paid a standard wage rate.
 Workers whose production exceeded the standard
were paid at a higher rate for all of their production
output.

2–11
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 Supervision
• Taylor felt that a single supervisor could not be
an expert at all tasks.
 As a result, each first-level supervisor should be
responsible only on workers who perform a common
function familiar to the supervisor.
 This became known as “Functional Foremanship.”

2–12
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 Scientific Management: The Gilbreths
• Frank Gilbreth
 Specialized in time and motion studies to determine
the most efficient way to perform tasks.
 Used motion pictures of bricklayers to identified work
elements (therbligs) such as lifting and grasping.
• Lillian Gilbreth
 A strong proponent of better working conditions as a
means of improving efficiency and productivity.
 Favored standard days with scheduled lunch
breaks and rest periods for workers.
 Strived for removal of unsafe working conditions
and the abolition of child labor.

2–13
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 (b) Administrative Management: Fayol
• Henri Fayol (1841–1925)
 First recognized that successful managers had to
understand the basic managerial functions.
 Developed a set of 14 general principles of
management.
 Fayol’s managerial functions of planning, leading,
organizing and controlling are routinely used in
modern organizations.

2–14
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 Table 2.1 Fayol’s General Principles of Management

1. Division of work 8. Centralization

2. Authority and 9. Scalar chain
responsibility 10. Order
3. Discipline 11. Equity
4. Unity of command 12. Stability
5. Unity of direction 13. Initiative
6. Subordination of 14. Esprit de corps
individual interest to the
common good
7. Remuneration of
personnel
Source: Based on Henri Fayol, General and Industrial Management, trans. Constana Storrs (London: Pittman & Sons, 1949).

2–15
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 (c)Bureaucratic Management
• Focuses on the overall organizational system.
• Bureaucratic management is based upon:
 Firm rules
 Policies and procedures
 A fixed hierarchy
 A clear division of labor

2–16
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 Bureaucratic Management: Weber
• Max Weber (1864–1920)
 A German sociologist and historian who envisioned a
system of management that would be based upon
impersonal and rational behavior - the approach to
management now referred to as “bureaucracy.”
 Division of labor
 Hierarchy of authority
 Rules and procedures
 Impersonality
 Employee selection and promotion

2–17
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 Weber’s Forms of Authority
• Traditional authority
 Subordinate obedience based upon custom or
tradition (e.g., kings, queens, chiefs).
• Charismatic authority
 Subordinates voluntarily comply with a leader
because of his or her special personal
qualities or abilities (e.g., Nelson Mandela).
• Rational-legal authority
 Subordinate obedience based upon the position held
by superiors within the organization (e.g., police
officers, executives, supervisors).

2–18
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 Table 2.2 Weber’s Three Types of Authority

Type Description
Traditional Subordinate obedience based upon
custom or tradition
Charismatic Subordinate obedience based upon
special personal qualities associated
with certain social reformers, political
leaders, religious leaders, or
organizational leaders
Rational–legal Subordinate obedience based upon
the position held by superiors
within the organization

2–19
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 Figure 2.3 Bureaucratic Hierarchical Power Structure

2–20
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 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The major The five major The different The The The systems The nature of The future
influences on perspectives of subfields that characteristics perspective the issues that will
the management exist in the theories of of the building blocks contingency affect the
development of thought that classical the major quantitative and their perspective of further
management have evolved perspective of perspective of interactions. management. development of
thought. over the years. management contributor management. management
and the central s to the thought.
focus of each.
behavioral
perspectiv
e of
manageme
nt.

2–21
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 2. Behavioral Perspective

vs.

Classical Behavioral
Perspective Perspective
Focused on Acknowledged the
rational behavior importance of human
behavior
2–22
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 Behavioral Perspective
• Followed the classical perspective in the
development of management thought.
 Acknowledged the importance of human behavior in
shaping management style
 Is associated with:
 Mary Parker Follett
 Elton Mayo
 Douglas McGregor

2–23
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 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.

2–24
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 Elton Mayo
• Conducted the famous Hawthorne Experiments.
 “Hawthorne Effect”
 Productivity increased because attention was paid
to the workers in the experiment.
 Phenomenon whereby individual or group
performance is influenced by human behavior
factors.
• His work represents the transition from scientific
management to the early human relations
movement.

2–25
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 Douglas McGregor
 Proposed the Theory X and Theory Y styles of
management.
 Theory X managers perceive that their subordinates
have an inherent dislike of work and will avoid it if at
all possible.
 Theory Y managers perceive that their subordinates
enjoy work and that they will gain satisfaction from
performing their jobs.

2–26
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 Table 2.3 Comparison of Theory X and Theory Y Assumptions

Factor Theory X Assumptions Theory Y Assumptions

Employee attitude Employees dislike work and. Employees enjoy work and
toward work will avoid it if at all possible. will actively seek it.

Management view Employees must be directed, Employees are self-motivated

of direction coerced, controlled, or threatened and self-directed toward achieving
to get them to put forth adequate effort. organizational goals.

Employee view Employees wish to avoid responsibility; Employees seek responsibility;

of direction they prefer to be directed and told what they wish to use their creativity,
to do and how to do it. imagination, and ingenuity in
performing their jobs.
Management style Authoritarian style of management Participatory style of management

2–27
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 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The major The five major The different The theories of The The systems The nature of The future
influences on perspectives of subfields that the major perspective the issues that will
the management exist in the contributors to characteri building blocks contingency affect the
development of thought that classical the behavioral stics of the and their perspective of further
management have evolved perspective of perspective of interactions. management. development of
thought. over the years. management management. quantitativ management
and the central e thought.
focus of each.
perspectiv
e of
managem
ent.

2–28
© 2016 Wessex Press, Inc. All rights reserved.
 3.The Quantitative Perspective
• Characterized by its use of mathematics,
statistics, and other quantitative techniques for
management decision making and problem
solving.
• This approach has two basic characteristics:
1. A decision-making focus
2. Development of measurable criteria

2–29
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 The Quantitative Perspective (cont’d)
• Decision-Making Focus
 The primary focus of the quantitative approach is on
problems or situations that require direct action, or a
decision, on the part of management.
• Measurable Criteria
 The decision-making process requires that the
decision maker select some alternative course of
action.
 The alternatives must be compared on the basis of
measurable criteria.

2–30
© 2016 Wessex Press, Inc. All rights reserved.
 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8

The major The five major The different The theories of The The The nature of The future
influences on perspectives of subfields that the major characteristics the issues that will
the management exist in the contributors to of the systems contingency affect the
development of thought that classical the behavioral quantitative perspectiv perspective of further
management have evolved perspective of perspective of perspective of management. development of
thought. over the years. management management. management. e building management
and the central blocks and thought.
focus of each.
their
interaction
s.

2–31
© 2016 Wessex Press, Inc. All rights reserved.
 4. System Approach
Figure 2.4 Basic Structure of Systems

Materials
Workers Physical
Capital commodity/
Land
Materials Materials intangible
Information Information Services –
Equipment
Customers Desired by
Information the users

Information about system’s status

and performance 2–32
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 Systems Perspective
• An approach to problem solving based on an
understanding of the basic structure of systems.
 Environmental interaction
 Open systems must interact with the external
environment to survive.
Exchange of material,
energy, information

 Closed systems do not interact with the

environment.

2–33
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 Systems Perspective
• An approach to problem solving based on an
understanding of the basic structure of systems.
 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.
 System that does not receive inputs continually from
environment will eventually die
Global changes: PESTLE

2–34
© 2016 Wessex Press, Inc. All rights reserved.
 LEARNING OUTCOMES
When you have finished studying this chapter, you
should be able to explain:

1 2 3 4 5 6 7 8
The major The five major The different The theories of The The systems The nature The future
influences on perspectives of subfields that the major characteristics perspective issues that will
the management exist in the contributors to of the building blocks of the affect the
development of thought that classical the behavioral quantitative and their contingen further
management have evolved perspective of perspective of perspective of interactions. development of
thought. over the years. management management. management. cy management
and the central perspectiv thought.
focus of each.
e of
managem
ent.

2–35
© 2016 Wessex Press, Inc. All rights reserved.
 5. The Contingency Perspective
• A view that proposes that there is no one best
approach to management for all situations.
 Asserts that managers are responsible for
determining which managerial approach is likely to be
most effective in a given situation.
 This requires managers to identify the key
contingencies in a given situation.

2–36
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 Figure 2.5 Blending Components into a Contingency Perspective

2–37
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 An Example of the Contingency Perspective
• Joan Woodward’s Research
 Discovered that a particular management style is
affected by the organization’s technology.
 Identified and described three different types of
technology:
 Small-batch technology
 Mass-production technology
 Continuous-process technology

2–38
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 An Example of the Contingency Perspective
• Joan Woodward’s Research
 Small-batch technology
 Job-shop characteristics, custom made
 High involvement of human (labor intensive)
 Mass-production technology
 Assembly-line characteristics
 Large volume and standardized
 Bureaucratic management
 Continuous-process technology
 Product flows continuously through serious stages of
conversions
 Least human involvement and interaction

2–39
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 Table 2.4 Production Technology Examples

Production Technology Examples

Small-batch Custom fabrication machine shop,

technology manufacturer of neon advertising signs,
print shop specializing in personal business
cards, trophy-engraving shop

Mass-production Manufacturer of automobiles, manufacturer

technology of refrigerators, manufacturer of hair dryers,
manufacturer of pencils

Continuous-process Oil refinery, flour mill, soft drink bottler,

technology chemical processor

2–40
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 Management in the 21st Century
• William Ouchi’s Theory Z
 Japanese-style approach to management developed
by William Ouchi
 Advocates trusting employees and making them
feel like an integral part of the organization.
 Based on the assumption that once a trusting
relationship with workers is established,
production will increase.

2–41
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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.

2–42
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