Chapter 14
Fads, fashions and the
future of management
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-1
Learning objectives
After studying the chapter, you should be able to:
– define contemporary management theories such as
emotional intelligence, succession planning and Six Sigma
– explore the implications of fads and fashions
– explain the role that organisational learning and creativity
play in helping managers improve their decisions
– describe how managers can encourage and promote
entrepreneurship to create a learning organisation, and
differentiate between entrepreneurs and intrapreneurs
– differentiate between two forms of innovation and explain
why innovation and product development is a crucial
component of competitive advantage.
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-2
Management challenge
‘Leadership – it’s also organisational’
How managers’ lead
is influenced by three
factors; individual
leadership, the
business’s strategic
imperatives, and its business context
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Overview
– Demand for solutions to management problems
driven by self-interest to ‘fix’ latest problem
– ‘Solutions’ provided by academics, business
leaders and consultants
– Mechanics of this market need investigation
– Legitimacy of solutions offered need testing
– Managers need to decide which ‘solution’ is best
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Meaning of ‘fads’ and ‘fashions’
Fads are solutions which are transient/
temporary.
Gurus/best-sellers/scholars popularise these
‘Management Fashions’:
– ‘transitory collective beliefs that certain
management techniques are at the forefront
of management progress’ Abrahamson
1996
Past management fads included quality
circles, total quality management and selfmanaged teams.
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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The market for management fashion
– Demand for fads generated by managers seeking
rational, ‘cutting-edge’ solutions to persistent
organisational problems
– Managers in turn try to pacify stakeholders, to conform,
find legitimacy or fulfil own psychological needs
– Environmental pressures also drive demand in an
‘open system’
– Fads and fashion are adopted at different speeds, follow
a life cycle
– Fads preceded by dormancy, followed by a bell-shaped
life cycle
– Decline of one fad is interdependent with the
development and increasing popularity of another fad
that replaces it
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-6
Five stages in the life cycle of a
management fad
1. Discovery
– Fad discovered, preliminary articles appear in the literature
2. Wild acceptance
– Fad becomes very popular
3. Digestion
– Critics begin to react negatively, not the panacea hoped for
4. Disillusionment
– General consensus that problems exist, next fad appears,
undermines current fad
5. Hard core
– Committed supporters remain loyal to the previous fad
or idea
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-7
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-8
Suppliers of management fashion
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Management consultants
Prestigious business schools
‘Gurus’
Successful leaders on speaking circuits
Mass media influence
Ideas need to be rational to ease adoption and
progressive
‘Guru Theory’ (Collins 2003): Structures and rhythms of
management fashion constantly shaped and reshaped
by commentators known as gurus of management
Today’s gurus include: Handy, Hofstede, Porter, Hamel,
Bennis, Nonaka, Deming, Tichy, Mintzberg, Dunphy,
Stace, Still, Inkson, Drucker
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Implications of management fashions
for managers
Managers should exercise care with fads:
checklists are useful
– Does the fad have a track record?
– Does the fad’s goal complement organisational needs?
– Does fad implementation mesh or ‘fit’ with
organisational culture?
– Will fad adoption help organisational competitiveness?
– Are organisational resources sufficient to implement
the fad?
– Do fad benefits outweigh direct and indirect costs?
– Can the fad be piloted in parts of the organisation to
test it?
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-10
Implications of management fashions
for managers (cont.)
Managers should exercise care with fads:
checklists are useful (cont.)
– Does the organisation have a positive record of fad
adoptions?
– Is there sufficient time to wait for the long-term
benefits?
– Can organisational inertia and resistance to change
be managed?
– Do managers have a choice?
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-11
Some contemporary management
ideas
The context of management
– Learning organisation/organisational learning
– Corporate sustainability, governance,
organisation reputation
– Organisational culture, emotional intelligence,
organisational climate, organisational identity
– Multiculturalism, diversity management
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© 2011 McGraw-Hill Australia Pty Ltd
14-12
Some contemporary management
ideas (cont.)
Managing people
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Risk management, chaos and complexity management
Trust management, workplace trust
High-performance organisations
Generation X, Generation Y
Leadership, authentic leadership, coaching
Balanced scorecard
Employee empowerment, employee engagement
QWL, life-friendly policies
Social partnership
Virtual HR
360-degree feedback
Succession planning
PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Some contemporary management
ideas (cont.)
Managing organisations
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Value chain management, supply chain management
E-commerce, e-business, e-procurement
Virtual organisations
Quality management, knowledge management
Benchmarked-incremental-capacity (BIC)
Networked evolutionary reengineering (NER)
Business process reengineering, X engineering
Hybrid organisations, networked organisations, boundaryless
organisations
Six Sigma, lean manufacturing
Downsizing, upsizing, rightsizing
Project management, program management
Networking, venture creation, communities of practice
Internet alliances
Contingency management, management by exception
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© 2011 McGraw-Hill Australia Pty Ltd
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Innovation and entrepreneurship
– Intrapreneurship
– Imaginative capital
– Other?
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-15
The context of management:
emotional intelligence (EI)
Emotional intelligence is the ability to understand
and manage one’s own moods and emotions and
the moods and emotions of other people to
enhance results
Three core assets in emotional intelligence:
– High self-awareness, which is the ability to tune in
to thoughts, feelings, senses and actions to
enhance results
– Emotional management involving understanding
emotions so they may be of benefit to the individual
– Self-motivation, using emotions to propel individuals to
action towards a desired purpose (examples are
enthusiasm, drive, tenacity and inspiration)
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© 2011 McGraw-Hill Australia Pty Ltd
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Emotional intelligence
– Requires investment and commitment to
relationships by sharing information about oneself
– Threatening to some
– Requires active listening
– Requires such interpersonal skills as problem
solving, conflict resolution
Thompson 2004
– Emotional intelligence an underlying attribute of
leadership
Palmer, Walls, Burgess & Stough 2001
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-17
Emotional intelligence (cont.)
Elements of emotional intelligence proposed
by Higgs & Aitken (2003):
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Emotional resilience
Motivation
Interpersonal sensitivity
Influence
Intuitiveness
Conscientiousness and integrity
PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Managing people: succession
planning
Succession planning
– Making sure there are suitable people to step into any
significant role as it becomes vacant or is created
– Motivating and developing people to adapt to new roles
quickly
– Ensuring every role is a learning resource where the
incumbent can develop relevant job skills and build
capability for different and larger jobs
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-19
Managing people: succession
planning (cont.)
Introducing succession planning to an organisation:
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Make sponsorship open and managed.
Don’t put people in ‘boxes’ or label them.
Adopt a systemic view of performance.
Continually re-examine qualities and experience required
for significant roles
– Manage the process of helping people build a track
record
Research in 2004 showed succession planning in
less than half of surveyed organisations (n = 711)
with programs generally less than 5 years old.
Succession management programs strive to develop
and retain high-potential employees.
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-20
Managing organisations: Six Sigma
Six Sigma is a business initiative programme
which focuses on minimising errors in
processes and products and returning
savings due to increased profitability.
– Motorola, GE and Honeywell are just some
corporate users
– Six Sigma is a process improvement framework
or methodology
– Six Sigma is not next stage of quality
measurement program
– Six Sigma is not an alternative to ISO 9000
standards
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-21
Steps of the Six Sigma program:
(DMAICR)
1. Define
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Select projects, develop plans, identify processes
2. Measure
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Process variables through data checks
3. Analyse
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Use graphical techniques to analyse process behaviour
4. Improve
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Existing process through experimentation and simulation
techniques
5. Control
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Development of the control plan for process improvement
6. Reporting
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Reporting the benefits of the reengineered process
PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-22
Six Sigma
– The attraction of Six Sigma:
• Reduces cycle time, eliminates product defects, increases
customer satisfaction
• Creates a closed-loop system that allows continuous
improvements in business functioning
– Six Sigma identifies goal (usually customer related) e.g.
delivery time
– Delivery time is not averaged, instead variation is measured
– Business processes then changed to minimise variation as
much as possible
– If organisation attains goal of reduced variation 99.9997 per
cent of time it has achieved ‘Six Sigma’, a statistical term that
reflects ‘defects per million opportunities down to 3.4’
– Six Sigma allows easy measurement of results and business
processes can be adjusted quickly
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-23
Innovation and entrepreneurship
Entrepreneurs
– People who see a unique business opportunity and
act on it
– Do all the planning, organising, leading and
controlling
– Assume all the risk and receive all the returns
– A few succeed spectacularly; however, 80 per cent of
small businesses fail in the first 3 to 5 years
Intrapreneurs
– People inside the organisation who notice
opportunities for quantum or incremental product
improvements and who innovate and manage
product development processes
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-24
Entrepreneurship and new ventures
Characteristics of entrepreneurs
– At times intrapreneurs become frustrated and leave
their firms to become entrepreneurs (e.g. Hewlett and
Packard leave Fairchild Semiconductor, Canion
(Compaq) leaves Texas Instruments)
– Entrepreneurs are prepared to face uncertainty
and risks
– Entrepreneurs are high on openness to experience,
predisposed to being original, open to a wide range
of stimuli, internal locus of control with a high level of
self-esteem, feel competent to handle most situations
and have a high need for achievement and set
personal standards of excellence
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-25
Entrepreneurship and management
Entrepreneurship is not the same as management.
Management involves planning, organising, leading
and controlling.
Entrepreneurship notices something that is wanted, then
management must put processes in place as the pressing
need becomes the provision of the product or service.
Frequently, entrepreneurs lack skills, patience and
experience to engage in management. Many lack
delegation skills, become overloaded, and/or don’t have
necessary detailed technical knowledge.
To succeed, organisations need the new product PLUS to
build the management systems to allow a new venture to
survive and prosper.
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Developing a plan for a new business
Clear business plans can guide the development of
a new business.
Planning begins when a new opportunity presents.
Feasibility of the new product is tested through
a strategic planning process using an
environmental analysis such as the
SWOT framework.
If the idea is feasible, an actual business plan is
developed.
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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The business plan, franchising and
entrepreneurship
The business plan
– Helps attract investors or bank funds
– States the organisation’s mission, goals and financial
objectives
– Lists functional and organisational resources required
– Provides a timeline with milestones to measure progress
Franchising is a way of buying into a proven business
plan to reduce the risks associated with a venture
started from zero.
Entrepreneurs may fail repeatedly before finding success.
Some entrepreneurs sell their successful venture only to
go and start another venture and take on another risk!
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-29
Promoting intrapreneurship and
organisational learning
– Intensity of competition drives need for
intrapreneurship
– Innovation and organisational learning encouraged
– Promoting organisational intrapreneurship through
product champions
– ‘Skunkworks’: a group of intrapreneurs deliberately
separated from the rest of the organisation so as
to focus on a new product
– New venture divisions created with autonomy and
resources to counter organisational bureaucracy
and inflexibility
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-30
Rewards for innovation
– Performance needs to be linked to rewards to
encourage hard work and manage risk and
uncertainty associated with entrepreneurship
– Intrapreneurs granted large bonuses, stock
options
– Microsoft: hundreds of employees made
millionaires
– Promotion another reward
– Rewards also keep intrapreneurs inside the
organisation and counter possibility of outside
new ventures formed by departing, disgruntled
employees
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-31
The future of management
– Important for scholars and management
practitioners to understand how market for
management ideas operates so that they can
constructively influence management fashion
process for organisational stakeholders
– Understanding demonstrates currency of
management concepts in practitioners
– Understanding current concepts/fashions
prepares practitioners for next concept
– Some fads become mainstays (TQM, MBO),
many others fade
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-32
Management in the media
‘Programmed decision-making at UPS’
Case Study: UPS’s
‘340 methods’
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
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Summary
– Fads and fashions come and go, a
few remain
– Entrepreneurs start new ventures on
their own, seeing and seizing
opportunities
– Intrapreneurs operate inside
organisations managing product
development processes
– Intrapreneurship needs
encouragement so as to promote
organisational learning and innovation
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PPTs to accompany Contemporary Management 2e by Waddell, Jones & George
© 2011 McGraw-Hill Australia Pty Ltd
14-34