Chapter 2
The Evolution of
Management Thinking
New Approach to
Management
Success accrues to those who learn how
 To be leaders
 To Initiate change
 To participate in and create organizations
 with fewer managers
 With less hierarchy that can change quickly
Management and
Organization


Management philosophies and
organization forms change over time to
meet new needs
Some ideas and practices from the
past are still relevant and applicable to
management today
Historical Perspective





Provides a context or environment
Develops an understanding of societal
impact
Achieves strategic thinking
Improves conceptual skills
Social, political, and economic forces have
influenced organizations and the practice of
management
Forces Influencing
Organizations and Management

Social Forces - values, needs, and
standards of behavior

Political Forces - influence of political
and legal institutions on people &
organizations

Economic Forces - forces that affect the
availability, production, & distribution of
a society’s resources among competing
users
Management Perspectives Over Time
Exhibit 2.1, p.44
The Technology-Driven Workplace
The Learning Organization
Total Quality Management
Contingency Views
2000
1980
2010
2000
1970
2000
1950
Systems Theory
1940
Management Science Perspective
2000
1990
1930
Humanistic Perspective
1890
Classical
1870
2010
1990
1990
1940
2010
Classical Perspective: 3000
B.C.
●
●
●
●
Rational, scientific approach to
management – make organizations
efficient operating machines
Scientific Management
Bureaucratic Organizations
Administrative Principles
Scientific Management: Taylor 1856-1915
General Approach
 Developed standard method for
performing each job.
 Selected workers with appropriate
abilities for each job.
 Trained workers in standard method.
 Supported workers by planning work
and eliminating interruptions.
 Provided wage incentives to workers
for increased output.
Scientific Management
Contributions
 Demonstrated the importance of compensation for
performance.
 Initiated the careful study of tasks and jobs.
 Demonstrated the importance of personnel and their
training.
Criticisms
 Did not appreciate social context of work and higher
needs of workers.
 Did not acknowledge variance among individuals.
 Tended to regard workers as uninformed and
ignored their ideas
Bureaucracy Organizations


Max Weber 1864-1920
Prior to Bureaucracy Organizations
 European employees were
loyal to a single individual
rather than to the organization
or its mission
 Resources used to realize
individual desires rather than
organizational goals

Systematic approach –looked at
organization as a whole
Ethical Dilemma: The Supervisor
Bureaucracy Organizations
Division of labor
with Clear definitions of
authority and responsibility
Personnel are selected
and promoted based
on technical
qualifications
Positions organized
in a hierarchy of authority
Managers subject to
Rules and procedures
that will ensure reliable
predictable behavior
Administrative acts
and decisions recorded
in writing
Management separate
from the ownership
of the organization
Exhibit 2.3, p. 49
Administrative Principles


Contributors: Henri Fayol, Mary Parker, and
Chester I. Barnard
Focus:
 Organization rather than the individual
 Delineated the management functions of
planning, organizing, commanding,
coordinating, and controlling
Henri Fayol 1841-1925
14 General Principles of Management







Division of labor
Authority
Discipline
Unity of command
Unity of direction
Subordination of
individual interest
Remuneration







Centralization
Scalar chain
Order
Equity
Stability and
tenure of staff
Initiative
Esprit de corps
Mary Parker Follett 18681933

Importance of common super-ordinate
goals for reducing conflict in organizations
 Popular with businesspeople of
her day
 Overlooked by management
scholars
 Contrast to scientific
management
 Reemerging as applicable in
dealing Ethics
with rapid
change
- Power
- in
Empowerment
global environment

Leadership – importance of people vs.
Chester Barnard 1886-1961
 Informal Organization
 Cliques
 Naturally occurring social groupings
 Acceptance Theory of Authority
 Free will
 Can choose to follow management orders
Humanistic Perspective
Emphasized understanding
human behavior, needs, and
attitudes in the workplace
●
Human Relations Movement
●
Human Resources Perspective
●
Behavioral Sciences Approach
Human Relations Movement
Emphasized satisfaction of
employees’ basic needs as
the key to increased worker
productivity
Hawthorne Studies







Ten year study
Four experimental & three control
groups
Five different tests
Test pointed to factors other than
illumination for productivity
1st Relay Assembly Test Room
experiment, was controversial, test lasted
6 years
Interpretation, money not cause of
increased output
Factor that increased output, Human
Relations
Human Resource
Perspective
Suggests jobs should be
designed to meet higher-level
needs by allowing workers to
use their full potential
Abraham Maslow’s
Hierarchy of Needs
1908-1970
Selfactualization
Esteem
Belongingness
Safety
Physiological
Based on needs satisfaction
Douglas McGregor
1906-1964
Theory X & Y
Theory X Assumptions



Theory Y Assumptions
Dislike work –will avoid it
 Do not dislike work
Must be coerced, controlled,
directed, or threatened with
 Self direction and self
punishment
control
Prefer direction, avoid
 Seek responsibility
responsibility, little ambition, want  Imagination, creativity
security
widely distributed

Intellectual potential only
partially utilized
Douglas McGregor Theory
X&Y
 Few companies today still
use Theory X
 Many are trying Theory Y
techniques
Experiential Exercise: Theory X and Theory Y Scale
Behavioral Sciences Approach
Sub-field of the Humanistic Management Perspective


Applies social science in an
organizational context
Draws from economics, psychology,
sociology, anthropology, and other
disciplines
 Understand employee behavior
and interaction in an
organizational setting
 OD – Organization Development
Management Science Perspective


Emerged after WW II
Applied mathematics, statistics, and other
quantitative techniques to managerial problems
 Operations Research – mathematical
modeling
 Operations Management – specializes in
physical production of goods or services
 Information Technology – reflected in
management information systems
Recent Historical Trends
●
Systems Theory
●
Contingency View
●
Total Quality Management (TQM)
Systems View of Organizations
Exhibit 2.5, p. 58
Contingency View of Management
Successful resolution of organizational problems is thought to
depend on managers’ identification of key variations in the
situation at hand
Elements of a Learning
Organization
Team-Based Structure
Learning
Organization
Empowered
Employees
Open
Information
Exhibit 2.7, p. 61
Types of E-Commerce
Business-to-Consumer B2C
Selling Products and
Services Online
Business-to-Business B2B
Transactions Between
Organizations
Consumer-to-Consumer C2C
Electronic Markets
Created by Web-Based
Intermediaries
Exhibit 2.8, p. 63