1 Ashley White U3137815 Essay on Management Theory Word Count: 2223 2 ‘Modern management is situational in orientation and denies the ‘one best way’ approach’ - To what extent do you agree or disagree with this statement? Justify your answer by looking into the various management theories. 3 Through research of many different theorists, theories, and cases studies, the thesis of this paper is as follows; modern management is situational in orientation, and denies a best one-way approach to managing businesses. This paper will prove this thesis through analyzing some of the past classical theorists, and the theory known as the contingency theory, the theory that supports one size does not fit all, in regards to management. Modern management is a complex and difficult line of work, one that cannot be defined through a number of required principles, tasks, and procedures it has given managers today a very difficult task, not one that they can just scientifically break down the issue that occurred, but a task that involves many different aspects. “The managerial task involves analyzing the organization and its context, and identifying opportunities, constraints, and options” (Stoner, Yetton, Craig, Johnston, 1994). Classical management theories have been used for many years in the past, and in some cases, they are still used to manage companies today. The many classical theorists include Max Weber, Frederick Taylor, Frank and Lillian Gilbreth, Mary Parker Follet, and Henry Fayol. These theorists have created countless different styles of management that, for years, were each individually used effectively, if applied to the right company and time frame. I have chosen a couple of these many theorists to outline their approaches to management and their difference between modern approaches to management. Max Weber, one of the earliest classical theorists created the bureaucratic approach to management. A bureaucracy is characterized by a clear division of labor, a clear hierarchy of authority, formal rules and procedures, impersonality, and careers based on merit (Schermerhorn, J., Davidson, P., Poole, D., Woods, P., Simon, A., & 4 McBarron, E., 2014). Weber believed that this approach was the best way for management and efficiency to be achieved, here is an excerpt of a quote found in Historical Foundations of Management by Max Weber himself, The purely bureaucratic type of administrative organization…is, from a purely technical point of view, capable of attaining the highest degree of efficiency…It is superior to any other form in precision, in stability, in the stringency of its discipline, and in its reliability. It thus makes possible a particularly high degree of calculability of results for the heads of the organization and for those acting in relation to it. It is finally superior both in intensive efficiency and in the scope of its operations and is formally capable of application to all kinds of administrative tasks (Schermerhorn, et al., 2014). Also, found in an article titled Management Theory, Weber was quoted to have said that a bureaucracy is the, “most capable of attaining the highest degree of efficiency and the most rationally known means of exercising authority over human beings” (Weymes, 2004). Weber, is just one of many examples of people creating and believing that their approach to management is the best way. Frederick Taylor and Frank and Lillian Gilbreth developed the scientific approach to management. This is the use of scientific analysis to specify jobs and work methods to increase their efficiency (Weymes, 2004). Scientific management can also be characterized by a few principles including; develop for every job a science that includes rules of motion, standardized work processes and proper working conditions, carefully select workers with the right abilities for the hob, carefully train workers to do the job and give them the proper incentives to cooperate with the job science, and support 5 workers to do the job and give them the proper incentives to cooperate with the job (Schermerhorn, et al., 2014). Both Weber and Taylor’s approaches to management could easily be defined with a few leading principles and characteristics, both including specific procedures and specific actions that need to be taken in certain circumstances, something that cannot be applied to the ever changing modern management world today. Today’s work environment has changed from an assembly line industrialized work environment to an environment based on individual achievement, capabilities, and actions. With each individual worker, their comes many different things that will motivate the worker or not. With this difference in the work place, there shows a difference in management styles, from one company to the next, management techniques greatly vary. This difference in styles for each situation, manager, and work place, can be explained in the contingency theory. Contingency theory “emphasizes that the appropriate pattern of organization is contingent on the nature of the work to be done and on the particular needs of the people involved” (Patz & Rowe, 1977). Douglas McGregor then challenged the scientific, impersonal approach to management in his book The Human Side of Enterprise (Weymes, 2004). He believed that workers must be driven by rewards and punishment, that they must be motivated by interesting work and entrusted to manage and direct their own behavior, they don’t need this “command and control” ideology Weber and Taylor had created (Weymes, 2004). In the 1980’s the Western nations were falling short of the Asian countries in production efficiency, and profit of their organisations (Weymes, 2004). Total Quality Management was then created, a people focused management philosophy, focused on the employees 6 and a system of rewards, incentives, and even punishments to motivate the worker. (Weymes, 2004). There are many different factors that go into modern management today, factors that include culture, countries, continents, workers, amount of workers, size of organization, size of industry, number of management positions, technology used in the organization, and so on. Management technique variations can be seen from country to country, according to an article Cultural Constraints in Management Theories, how management is run and used and coined in the United States, is highly different from other countries across the globe (Hofstede, 1993). Modern approaches to management “…recognise that no one model or theory applies universally in all situations or to the exclusion of the others” (Schermerhorn et al., 2014). This is the very essence of the theories known as the contingency theory and the situational theory. There are countless theorists who have researched and created different approaches to the situational theory and the contingency theory, these include; Joan Woodward, Tom Burns, G.M. Stalker, James Thompson, Derek Pugh, Paul Lawrence, Jay Lorsch, John Child, Henry Mintzberg, Raymond Miles, Charles Snow, Andrew Van de Ven, Fred Fiedler, Victor Vroom, Ohillip Yetton, Robert House and Lex Donaldson. I will not go into detail of each of these theories; but will speak specifically about contingency theory. Contingency theory, developed by Fiedler, essentially, is the answer to my thesis. This theory states that there is no one best way approach to management, each situation is different, each manager is different, and each organization is different. You essentially, must find the right manager for the right situation. 7 In organisations today, each situation must be handled differently. “For example, organizational tasks that are simple and repetitive, with little interdependence with other units, are better managed with mechanistic, bureaucratic structures, which impose close supervision or strict rule and procedures to enforce standardization. On the other hand, tasks involving high uncertainty and interdependence, which necessitate greater information processing and coordination, are best managed by a more flexible, organic structure, which maximizes employee interaction and discretion” (Stoner, et. al.). There are different people, different knowledge workers, different resources, and different amounts of knowledge in each organization. According to Weymes, in his journal article, Management Theory, “organisations now buy brains not brawn” (Weymes 2004). This simple statement clearly identifies the difference between the organisations that were able to be run by one management approach and the organisations of today’s society. The individual is highly emphasized in organizations today; the amount of knowledge, talent, and skill each worker brings to each organization is one of the highest priorities of each company. “Contingency theory of management and organization suggests that control decisions should be based upon the nature of the task and on the particular needs of the individuals involved. The most important of these needs is that an individual has to master the world around him and develop a sense of competence” (Patz & Rowe, 1977). When looking at strategic management, there are many factors behind a companies strategy, these factors include positioning an organization for competitive advantage, making choices about which markets to participate in, what products and services to offer, how to allocate corporate resources, create long-term value for 8 shareholders and other stakeholders and providing customer value, the result of choices executives make about what to offer, where to play and how to win, to maximize longterm value (Kluyver and Pearce, 2015). In Strategic Management Theory: An Integrated Approach, they speak about the concept of competitive advantage, a simple concept, meaning your profitability is greater than that of your competitors (Hill, Jones, Schilling, 2013). This simple concept can very easily back up the fact that there is no best one way approach to managing businesses, all businesses contain their own competitive advantage. The reason that a company maintains their competitive advantage is because they maintain something that makes them unique or different from all of their rivals. In order to gain a unique advantage over your competitors, a company must be flexible in figuring out what works best for them. All organisations strive to become a high performance organisation in today’s economy. Flexibility is one of the most important keys in the high performance organisations management structures of today. “A flexible work place should be the goal of every organisation for a higher performance. But the absence of strict, rigid rules does not mean that everyone can do whatever they want. In high performance organizations, there are discipline guidelines, but managers also have flexibility in the implementation of these guidelines,” (Akdemir, Erdem, Polat, 2010). “The ideal or perfect structure of a high performance organization depends on the organization’s context and focus, goals and priorities, skills and experience levels, and culture.” (Akdemir, Erdem, Polat, 2010). These high performance organisations are going to focus on the knowledge and the humans involved in the organisation, rather than the rigid rules and applications of the rules. A high performance organization (HPO) is defined by Development Dimensions 9 International in Pittsburgh as “one in which the culture provides employees with the accountability and responsibility necessary to meet customer needs in a timely manner to ensure business success” (Akdemir, Erdem, Polat, 2010). These organizations turn out to be very situational in their management practices, this situational use of management approaches adds to the success of the HPO’s. Managers today have obtained a difficult task, a task of having to appeal to individuals and their talents, rather than just working with individuals as machines. Employees are no longer seen scientifically for their efficiency, in most organisations, but managers must allocate please these employees, in order for them to do their job to their highest potential. Through meticulous research of theories, case studies, and textbooks in regards to modern management style, one can conclude that there is not any one best way approach to management. “In modern management approach, there is no expectation that you can or should find the one best way to manage in all circumstances” (Schermerhorn, et al., 2014). Modern management, has evolved for many years now, and will always evolve, due to the fast paced environment it was developed in. Classical theorists created the grounds for management theories, that some companies still use as a basis for managing today, but there is not one common technique, each company runs differently, each company has different resources and advantages. Contingency theorists grow each and every year, helping discover that with each situation, requires a certain style of management, and each situation can not be handled the same as the last. 10 Works Cited 1. Akdemir, B., Erdem, O., & Polat, S. (2010). CHARACTERISTICS OF HIGH PERFORMANCE ORGANIZATIONS. Suleyman Demirel University Journal Of Faculty Of Economics & Administrative Sciences, 15(1), 155-174. 2. BAER, M. (2012). PUTTING CREATIVITY TO WORK: THE IMPLEMENTATION OF CREATIVE IDEAS IN ORGANIZATIONS. Academy Of Management Journal, 55(5), 1102-1119. doi:10.5465/amj.2009.0470 3. Chester Barnard. (n.d.). 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