The Evolution of Management Thinking
>> Creative, dynamic management is a driving force behind the success of any business.
In today’s marketplace, change is rapid and managers are expected to deal with a broad
set of issues and needs. How they address those issues is very different today than it was
a hundred years ago. Times have changed, labor has changed, and, most importantly,
management philosophies have changed. The management philosophies of yesterday are
valuable tools for managers to use today.
The earliest management philosophy, the classical perspective, emerged in the 19th and
early 20th century in response to a problem businesses grapple with today: how to make
businesses efficient operating machines. In the factory system, managers had the
challenge of coordinating a huge, unskilled labor force, complex production systems, and
an expansive manufacturing operation.
Frederick Winslow Taylor’s solution was the Scientific Management approach which
proposed that productivity could be improved only by a series of precise procedures
developed from a scientific observation of a situation. This approach standardized labor
and training, employee hiring, and tied compensation to increased productivity. While
highly successful, this approach did not take into consideration the diversity of abilities
and needs within the workforce.
A crucial shift in management philosophy came in the 1920s with a new emphasis on
human behaviors, needs and attitudes in the workplace over the economy and efficiency
of production. Mark Parker Follett and Chester Barnard pioneered the Humanistic
Perspective that first stressed the need for employee empowerment. This new way of
thinking led the way for the human resource perspective, which saw workers as a
resource to be fully utilized, as opposed to tools from which to extract utility. It suggested
that beyond the need for worker inclusion and supportive leadership, organizations
should design jobs to meet the higher needs of their employees and utilize their full
potential. This perspective paved the way for the role that human relations departments
play in organizations today. Allstate Insurance uses the human resource perspective in
designing the comprehensive benefits package it provides to its employees.
>> They're looking for interesting, meaningful work. They're looking for career
advancement. They're looking for that balance of work and family. Total compensation
from our view consists of pay itself, they're the benefits, which include health and
welfare. Then there's the retirement plans that we offer in the form of pension and profit
sharing. We also have learning opportunities and a career development plan. Not only do
you have a particular job to do but how do you increase your skills and how do you keep
them competitive in the market. So it's that continuous learning philosophy that a
company should have when trying to motivate a workforce.
>> Many of today’s management perspectives grew out of adaptations of the humanistic
perspective. One such perspective is the systems theory, which views an organization as a
series of interconnected systems that affect and are effected by each other. Peet’s Coffee
& Tea is one of America’s leading coffee roasters and distributors. Unlike most coffee
distributors, Peet’s has a commitment to freshness and only roasts beans upon demand.
But today, the business involves more than just roasting and brewing a fresh cup of
coffee.
>> When I started at Peet’s in 1999 we had two channels: retail stores and mail order.
We also have grocery and office coffee and specialty sales channels.
>> Each of these channels of Peet’s has different packaging and shipping requirements,
but they all lead back to the roasting room. By managing each distribution channel as a
system within the greater system of Peet’s, the company has created a sophisticated
process that allows them to maintain their artisan quality while meeting a higher demand.
Another modern evolution of the humanistic perspective is the contingency view. This
view addresses one of the weaknesses of the classical perspective by viewing all
employees and situations as unique, as opposed to uniform and generalizable. American
Apparel, a leading clothing manufacturer that specializes in non-sweatshop production
processes, based in the US, was suffering from low production levels. To solve the
problem, they created a team production strategy where teams of workers, each focused
on a different element of production, would together produce a completed garment. But
each type of garment is assembled differently and each team of workers had their own
strategy for working together. So, to implement the system, they went to the workers.
>> I mean the whole idea of team manufacturing it was a concept, but the best ideas of
how we should actually execute the process came from the people doing the work every
day.
>> The managers knew that one solution for implementation would not fit the needs of
every worker, so they used the contingency view and asked the workers to develop
solutions for each of their teams, ultimately improving production and increasing
efficiency.
>> There are a number of modern trends in management thinking that have emerged to
meet the demands of today’s changing marketplace. These include the concept of a
learning organization and the shift to a technology-driven workplace. The Learning
Organization is a form of organizational management that focuses on continuous
learning, problem solving, and innovation to constantly improve the work of an
organization. Second City is the top creator of improvisational and sketch comedy acts in
the nation. With theaters across the country, national touring troupes, a school, and a
corporate training center, Second City has grown into a large organization. Throughout
the company, the managers at Second City take the climate of experimentation from the
stage, into the office.
>> You're a very handsome boy.
>> (screech)
>> (laughter)
>> He's part gargoyle.
>> Part of the work that we do from an artistic point of view is premised on failure. You
do these improv sets and you want the cast to go out there and fail, that’s how they build
the new material. So there’s kind of a culture of encouraging failure.
>> By encouraging employees to share their thoughts and opinions and in turn, to support
and build on the ideas of others, Second City has inspired trust, innovation, and
teamwork amongst the many levels of the organization and has brought the organization
widespread success.
>> There is no business today that is not influenced in some way by technology.
Technology helps organizations with production, information sharing, networking, and
sales. E-commerce is one such realm that many businesses have had to embrace or risk
losing customers. Zingerman's started as a local deli in Ann Arbor, Michigan and has
grown to include over seven businesses, all based in Ann Arbor and a large-scale internet
distribution business.
>> How we got started in mail order is pretty simple. Just people lived here, they were
good customers, they moved away. They realized after they moved they couldn’t get a
lot of what they had been getting at the deli. And so they would call up and say, "Can you
ship this stuff to us?" And you know in good business fashion we said, "Sure." And
then we said, "Wonder how we do that." And then we started to figure it out. That was
'92, '93, '94, something like that. E-commerce started in 1999, I believe. Actually this
month. September '99 is when we formally launched our first website. I think now it's
just part of the normal course of doing business and will become increasingly more and
more integrated into what everybody does.
>> Today the distribution is a large and growing portion of Zingerman's and it invests a
great deal in keeping the website current, user friendly, and technologically up to date.
Whether in the factories of yesterday or the e-businesses of today, managers have had the
responsibility of coordinating and motivating employees to meet the goals of an
organization. As times have changed, so have the philosophies of management.
Understanding the evolution of management helps current managers understand where
we are today and how to improve management for the future.