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Chapter Objectives
 Identify two key assumptions supporting the universal
process approach, and briefly describe Henri Fayol’s
contribution.
 Discuss Frederick W. Taylor’s approach to improving
the practice of industrial management.
 Identify at least four key quality improvement ideas
from W. Edwards Deming and the other quality
advocates.
 Describe the general aim of the human relations
movement and explain the circumstances in which it
arose.
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Chapter Objectives (cont’d)
 Explain the significance of applying open-system
thinking to management.
 Explain the practical significance of adopting a
contingency perspective.
 Describe what “management by best seller” involves
and explain what managers can do to avoid it.
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The Practice and Study of Management
 The systematic study of management did not begin in
earnest until after 1900.
 The Egyptian pyramids required managed effort.
 Information Overload
Management has not had a systematically recorded body of
knowledge until recently.
 Today, vast amounts of relevant information are readily available
in print and electronic media.

 An Interdisciplinary Field

The manifold increase in management theory information is due
largely to its interdisciplinary nature in drawing from several fields
(e.g., psychology, mathematics, economics, history, and
engineering).
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No Universally Accepted Theory of
Management
 There are several approaches to the theory and
practice of management.
 The universal process approach
 The operational approach
 The behavioral approach
 The systems approach
 The contingency approach
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The Universal Process Approach
 Universal Process Approach
 Assumes all organizations require the same rational
management process


Core management process remains the same regardless of
the purpose of the organization.
The management process can be reduced to a set of separate
functions and related principles.
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Henri Fayol’s
Universal Management Process
 Fayol published Administration Industrielle et
Générale in 1916.
 He divided a manager’s job into five functions:





Planning
Organizing
Command
Coordination
Control
 He developed 14 universal principles of management.
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Table 2.1: Fayol’s 14 Universal
Principles of Management
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Table 2.1: Fayol’s 14 Universal Principles
of Management (cont)
Henri Fayol’s Universal Management
Process (cont’d)
 Lessons from the Universal Process Approach
 The management process can be separated into
interdependent functions.
 Management is a continuous process.
 Management is a largely, though not an entirely,
rational process.
 The functional approach is useful because it specifies
what managers should do.
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The Operational Approach
 The operational approach is a production-oriented
field of management dedicated to improving
efficiency and cutting waste
 Frederick W. Taylor’s Scientific Management
 Developing performance standards on the basis of
systematic observations and experimentation




Standardization
Time and task study
Systematic selection and training
Pay incentives
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Figure 2.2: Taylor’s
Differential Piece-Rate Plan
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Taylor’s Followers
 Frank and Lillian Gilbreth
 Refined time and motion study methods for use in
work simplification
 Henry L. Gantt
 Refined production control and cost-control
techniques
 Developed the Gantt chart for work scheduling of
projects
 Early advocate of the importance of the human factor
and the importance of customer service over profits
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The Quality Advocates
 Walter A. Shewhart
 Introduced the concept of statistical quality control
 Kaoru Ishikawa
 Proposed a preventive approach to quality
 Developed fishbone diagram approach to problem
solving
 W. Edwards Deming
 Based his 14 principles on reformed management style,
employee participation, and striving for continuous
improvement
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The Quality Advocates (cont’d)
 Joseph M. Juran
 Proposed the concepts of teamwork, partnerships with
suppliers, problem solving, and brainstorming
 Developed Pareto analysis (the 80/20 rule) as a tool for
separating major problems from minor ones
 Armand V. Feigenbaum
 Developed the concept of total quality control
 Philip B. Crosby
 Promoted the idea of zero defects (doing it right the
first time)
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Lessons from the Operational Approach
 A dedication to finding a better way is still important.
 Using scientific management doesn’t dehumanize
workers.
 Quality advocates, inspired by the scientific
approach, have been right all along about the
importance of quality and continuous improvement.
 The operational approach fostered the development
of operations management.
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The Behavioral Approach
 The Human Relations Movement
 An effort to make managers more sensitive to their
employees’ needs
 Arose out of the influences of



The threat of unionization
The Hawthorne studies
The philosophy of industrial humanism
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Figure 2.3: The Human
Relations Movement Pyramid
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The Behavioral Approach (cont’d)
 The Threat of Unionization
 The Wagner Act of 1935 legalized union-management
collective bargaining, promoting the growth of unions
and union avoidance by firms.
 The Hawthorne Studies (1924)
 The study’s results that productivity was strongly
affected by workers’ attitudes turned management
toward the humanistic and realistic viewpoint of the
“social man” model.
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The Philosophy of Industrial Humanism
 Elton Mayo
 Emotional factors were more important determinants
of productive efficiency than were physical and logical
factors.
 Mary Parker Follett
 Managers should be aware of how complex each
employee is and how to motivate employees to
cooperate rather than to demand performance from
them.
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The Philosophy of
Industrial Humanism (cont’d)
 Douglas McGregor
 Developed Theory X and Theory Y


Theory X: Management’s traditionally negative view of
employees as unmotivated and unwilling workers
Theory Y: The positive view of employees as energetic,
creative, and willing workers
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Table 2.2: McGregor’s Theories X and Y
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Organizational Behavior
 Organizational Behavior
 A modern research-oriented approach seeking to
discover the causes of work behavior and to develop
better management techniques
 Lessons from the Behavioral Approach
 People are the key to productivity.
 Success depends on motivated and skilled individuals
committed to organizational objectives.
 Managerial sensitivity to employees is necessary to
foster the cooperation needed for high productivity.
 Has been criticized as being vague and simplistic.
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The Systems Approach
 A system is a collection of parts operating
interdependently to achieve a common purpose
 In the systems approach:
 The whole is greater than the sum of its parts
 Use of Analytic (outside-in) thinking and synthetic
(inside-out) thinking
 Seeks to identify all parts of an organized activity and
how they interact
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Barnard’s Early Systems Perspective
 Chester I. Barnard wrote Functions of the Executive
 Characterized all organizations as cooperative systems
 Defined principal elements in an organization as



Willingness to serve
Common purpose
Communication
 Strong advocate of business ethics
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Figure 2.4: Barnard’s
Cooperative System
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General Systems Theory
 General Systems Theory
 An interdisciplinary area of study based on the
assumptions that everything is part of a larger,
interdependent arrangement
 Levels of systems
 Identification of systems at various levels helps
translate abstract systems theory into more concrete
terms.
 Each system is a subsystem of the system above it.
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Figure 2.5: Levels of Living Systems
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General Systems Theory (cont’d)
 Closed Versus Open Systems
 Closed system: A self-sufficient entity
 Open system: Depends on its surrounding
environment for survival
 New Directions in Systems Thinking
 Organizational learning and knowledge management –
Organizations are living and thinking open systems
that learn and engage in complex mental processes.
 Chaos theory – Every complex system has a life of its
own, with its own rule book.
 Complex adaptive systems - Self-organizing
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Table 2.3: Complex Adaptive Systems
and Classical Management
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be scanned, copied or
duplicated, or posted to a
publicly accessible website,
in whole or in part.
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Systems Approach
 Lessons from the Systems Approach
 Managers now have a greater appreciation for the
importance of seeing the whole picture.
 Manager should not become preoccupied with one
aspect of organizational management while ignoring
other internal and external realities.
 The systems approach tries to integrate various
management theories.
 Criticism: Short on verifiable facts and practical advice.
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The Contingency Approach
 A research effort to determine which managerial
practices and techniques are appropriate in specific
situations.
 The term contingency refers to the choice of an
alternative course of action.
 Contingency management has become synonymous
with situational management.
 Application of various management tools and
techniques must be appropriate for the particular
situation.
 Especially applicable in intercultural dealings.
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Figure 2.6: The
Contingency View: A Compromise
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The Contingency Approach (cont’d)
 An open-system perspective
 How subsystems combine to interact with outside
systems
 A practical research orientation
 Translating research findings into tools and situational
refinements for more effective management.
 A multivariate approach
 Many variables collectively account for variations in
performance.
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The Contingency Approach
 Lessons from the Contingency Approach
 Approach emphasizes situational appropriateness
rather than rigid adherence to universal principles
 Practical extension of the systems approach
 Criticism: Creates the impression that an organization
is captive to its environment
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The Era of Management by
Best Seller: Proceed with Caution
 Management in the Mainstream
 Gurus and Best Sellers
 Peter Drucker—author and first management guru
 Peters and Waterman’s bestseller In Search of
Excellence
 What’s Wrong with Management by Best Seller?
 Encourages the hurried and haphazard application
of generic, one-size-fits-all strategies
 Challenge: Avoid the quick-fix mentality
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Table 2.5: How to Avoid the Quick-Fix
Mentality in Management
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Summary
 Management is an interdisciplinary and international
field that has evolved over the years.
 The operational approach has evolved from scientific
management to operations management.
 Quality advocates teach the strategic importance of
high-quality goods and services.
 Management has turned to the human factor in the
human relations movement and organizational
behavior approach.
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Summary (cont’d)
 Under the systems approach, modern organizations
are viewed as open systems.
 The contingency approach stresses situational
appropriateness rather than universal principles.
 A quick-fix is unlikely to solve an organization’s unique
problems.
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Terms to Understand
 Universal process
 Organizational behavior
approach
 Operational approach
 Scientific management
 Operations management
 Human relations
movement
 Theory Y
 System
 General systems theory
 Closed system
 Open system
 Contingency approach
 Multivariate analysis
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