Prepared by
Michael K. McCuddy
Valparaiso University
John Wiley & Sons, Inc

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Chapter 4
Historical Foundations of Management

–
What can be learned from classical management thinking?
– What ideas were introduced by the human resource approaches?
–
What is the role of quantitative analysis in management?
– What is unique about the systems view and contingency thinking?
– What are continuing management themes of the 21st century?
Schermerhorn - Chapter 4 3

Chapter 4
Major Schools of Management Thought

– Developing universal principles for use in various management situations.

– Human needs, the work group, and social factors in the workplace.
Schermerhorn - Chapter 4 4

Chapter 4
Major Schools of Management Thought

– Use of mathematical techniques for management problem solving.

– Systems and contingency views of organizations.
Schermerhorn - Chapter 4 5

What can be learned from classical management thinking?

–
Scientific management
–
Administrative principles
–
Bureaucratic organization
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What can be learned from classical management thinking?
 Scientific management (Frederick Taylor)
–
Develop rules of motion, standardized work implements, and proper working conditions for every job.
–
Carefully select workers with the right abilities for the job.
– Carefully train workers to do the job and provide proper incentives.
– Support workers by carefully planning their work and removing obstacles.
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What can be learned from classical management thinking?

– Motion study
• Science of reducing a job or task to its basic physical motions.
–
Eliminating wasted motions improves performance.
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What can be learned from classical management thinking?
 Administrative principles (Henri Fayol)—rules of management
– Foresight—to complete plan of action for the future.
– Organization—to provide and mobilize resources to implement the plan.
–
Command—to lead, select, and evaluate workers to get the best work toward the plan.
– Coordination—to fit diverse efforts together, ensure information is shared and problems solved.
– Control—to make sure things happen according to plan and to take necessary corrective action.
Schermerhorn - Chapter 4 9

What can be learned from classical management thinking?
 Administrative principles (Henri Fayol)—key principles of management
– Scalar chain—there should be a clear and unbroken line of communication from the top to the bottom of the organization.
– Unity of command—each person should receive orders from only one boss.
– Unity of direction—one person should be in charge of all activities with the same performance objective.
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What can be learned from classical management thinking?

– Groups and human cooperation
• Groups are mechanisms through which individuals could combine their talents for a greater good.
• Organizations as cooperating “communities” of managers and workers.
• Manager’s job is to help people in the organization cooperate and achieve an integration of interests.
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What can be learned from classical management thinking?

– Forward-looking management insights
• Employee ownership creates sense of collective responsibility (precursor of employee ownership, profit sharing, and gain-sharing)
• Business problems involve variety of inter-related factors (precursor of systems thinking)
•
Private profits relative to public good (precursor of managerial ethics and social responsibility)
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What can be learned from classical management thinking?

–
Bureaucracy
• An ideal, intentionally rational, and very efficient form of organization.
•
Based on principles of logic, order, and legitimate authority.
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What can be learned from classical management thinking?
 Characteristics of bureaucratic organizations:
– Clear division of labor
–
Clear hierarchy of authority
– Formal rules and procedures
– Impersonality
–
Careers based on merit
 Possible disadvantages of bureaucracy:
–
Excessive paperwork or “red tape”
– Slowness in handling problems
–
Rigidity in the face of shifting needs
–
Resistance to change
– Employee apathy
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What ideas were introduced by the human resource approaches?

– Hawthorne studies
– Maslow’s theory of human needs
– McGregor’s Theory X and Theory Y
– Argyris’s theory of adult personality
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What ideas were introduced by the human resource approaches?
 Hawthorne studies
–
Initial study examined how economic incentives and physical conditions affected worker output.
–
No consistent relationship found.
– “Psychological factors” influenced results.
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What ideas were introduced by the human resource approaches?

–
Relay assembly test-room studies
• Manipulated physical work conditions to assess impact on output
• Designed to minimize the “psychological factors” of previous experiment
•
Factors that accounted for increased productivity
– Group atmosphere
– Participative supervision
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What ideas were introduced by the human resource approaches?

– Employee attitudes, interpersonal relations and group processes
•
Some things satisfied some workers but not others.
• People restricted output to adhere to group norms.
–
Lessons
• Social and human concerns as keys to productivity.
•
Hawthorne effect—people who are singled out for special attention perform as expected.
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What ideas were introduced by the human resource approaches?

– A need is a physiological or psychological deficiency a person feels compelled to satisfy.
–
Need levels
• Physiological
•
Safety
• Social
•
Esteem
• Self-actualization
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What ideas were introduced by the human resource approaches?

–
Deficit principle
• A satisfied need is not a motivator of behavior.
–
Progression principle
• A need becomes a motivator once the preceding lower-level need is satisfied.
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What ideas were introduced by the human resource approaches?
 McGregor’s Theory X assumes that workers:
– Dislike work
–
Lack ambition
–
Are irresponsible
–
Resist change
–
Prefer to be led
 McGregor’s Theory Y assumes that workers are:
–
Willing to work
– Capable of self control
– Willing to accept responsibility
– Imaginative and creative
–
Capable of selfdirection
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What ideas were introduced by the human resource approaches?

– Managers create self-fulfilling prophesies.
–
Theory X managers create situations where workers become dependent and reluctant.
–
Theory Y managers create situations where workers respond with initiative and high performance.
• Central to notions of empowerment and selfmanagement.
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What ideas were introduced by the human resource approaches?

– Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality.
– Management should accommodate the mature personality.
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What ideas were introduced by the human resource approaches?

–
Management practices consistent with the mature adult personality:
•
Increasing task responsibility
• Increasing task variety
•
Using participative decision making
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What is the role of quantitative analysis in management?
 Management science (operations research) foundations
–
Scientific application of mathematical techniques to management problems
– Techniques and applications include:
• Mathematical forecasting
• Inventory modeling
• Linear programming
• Queuing theory
•
Network models
• Simulations
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What is the role of quantitative analysis in management?

– Use of staff specialists to help managers apply techniques.
– Software and hardware developments have expanded potential quantitative applications to managerial problems.
– Good judgment and appreciation for human factors must accompany use of quantitative analysis.
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What is unique about the systems view and contingency thinking?
 Systems thinking
–
System
• Collection of interrelated parts that function together to achieve a common purpose.
– Subsystem
• A smaller component of a larger system .
–
Open systems
• Organizations that interact with their environments in the continual process of transforming resource inputs into outputs.
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What is unique about the systems view and contingency thinking?

–
Tries to match managerial responses with problems and opportunities unique to different situations.
• Especially individual or environmental differences.
– No “one best way” to manage.
–
Appropriate way to manage depends on the situation.
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What are continuing management themes of the 21st century?

–
Managers and workers in progressive organizations are quality conscious.
•
Quality provides competitive advantage.
–
Total quality management (TQM)
• Comprehensive approach to continuous quality improvement for a total organization.
•
Creates context for the value chain.
Schermerhorn - Chapter 4 29

What are continuing management themes of the 21st century?
 Eight attributes of performance excellence:
–
A bias toward action
–
Closeness to the customer
– Autonomy and entrepreneurship
– Productivity through people
– Hands-on and value-driven
–
Sticking to the knitting
–
Simple form and lean staff
–
Simultaneous loose-tight properties
Schermerhorn - Chapter 4 30

What are continuing management themes of the 21st century?
 Global awareness
–
Pressure for quality and performance excellence is created by a highly competitive global economy.
–
Has fostered increasing interest in new management concepts.
•
Process engineering
• Virtual organizations
• Agile factories
• Network firms
–
Adoption of Theory Z management practices.
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What are continuing management themes of the 21st century?
 Contemporary businesses must learn to become learning organizations.
 Learning organization success depends on:
– Culture that emphasizes information, teamwork, empowerment, participation, and leadership.
– Leadership that emphasizes motivation and rewards, communication, conflict and negotiation, teamwork, and change management.
Schermerhorn - Chapter 4 32

What are continuing management themes of the 21st century?

st
–
A global strategist
– A master of technology
–
A consummate politician
–
A leader/motivator
Schermerhorn - Chapter 4 33