 Study questions

What can be learned from classical management thinking?

What ideas were introduced by the human resource approaches?

What is unique about the systems view and contingency thinking?

What are continuing management themes of the 21st century?

I. Classical management approaches
 Developing universal principles for use in various management situations.
II. Behavioral management (or human resource) approaches
 Human needs, the work group and social factors in the workplace.
III. Quantitative management approaches
 Use of mathematical techniques for management problem solving.
IV. Modern approaches
 Systems and contingency views of organisations.

 Three major branches within classical approaches:
1. Scientific management (Taylor and Frank and Lillian
Gilbreths)
2. Administrative principles (Fayol and Follet)
3. Bureaucratic organisation (Weber)

Classical approaches
Assumption:
People are rational
Scientific management
Frederick Taylor
Frank and Lillian
Gilbreth
Administrative principles
Henry Fayol
Mary Parker Follett
Bureaucratic organisation
Max Weber

 Frederick Taylor (Principles of Scientific Management)
4 Principles (for maximum prosperity of both)

Develop for every job a ‘science’ that includes rules of motion, standardised work processes 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 to cooperate with job ‘science’.

Support workers by carefully planning their work and removing obstacles.



Frank and Lillian Gilbreths

Motion study

Science of reducing a job or task to its basic physical motions

Eliminating waste motions improves performance
Practical lessons of Scientific management
- Make results-based compensation a performance incentive
- Carefully design jobs with efficient work methods
- Carefully select workers with the abilities to do these jobs
- Train workers to perform jobs to the best of their abilities
- Train supervisors to support workers so they can perform jobs to the best of their abilities

 Henri Fayol (French, 1916) – Administration
Industrielle et Generale (based on experiences of successful managers)
 Suggested 5 Functions of management
 Foresight — to complete plan of action for the future
 Organisation — to provide and mobilise resources to implement the plan
 Command — to select, lead and evaluate workers to get the best work towards 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


(conti.)
Administrative principles (14) to guide managerial action
1. Specialization /Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of Individual interest to organizational interest
7. Remuneration of staff
8. Centralization
9. The scalar chain / line of authority
10. Order
11. Equity
12. Stability of staff
13. Initiative
14. Esprit de corps (strength in unity)

 Mary Parker Follett (1933) – Dynamic Administration:
The collected papers of Mary Parker Follett
 Emphasized role of groups and human cooperation

Groups are mechanisms through which individuals could combine their talents for a greater good.

Organisations as cooperating ‘communities’ of managers and workers

The manager’s job is to help people in the organisation to make them cooperate and achieve an integration of interests.



Employee ownership creates sense of collective responsibility (precursor of employee ownership
(stock options), profit sharing and gain sharing).

Business problems involve a wide variety of interrelated factors (precursor of systems thinking).

Private profits should always be considered vis-àvis the public good (precursor of managerial ethics and social responsibility).





19 th Century German sociologist
What should be the bases for exercising authority in the organizations
Three bases of Authority
- Traditional authority
- Charismatic authority
- Legal-rational authority
Theory of Bureaucracy

An ideal, intentionally rational and very efficient form of organisation.

Based on principles of logic, order and legitimate authority.

 Characteristics of bureaucratic organisations:





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Clear division of labor
Clear hierarchy of authority
Formal rules and procedures (written)
Office files (records)
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

approaches


Since 1920s a new thinking started on human side of enterprise:
It has opposed classical theory on the ground that the people in the organization are human beings and not cogs in the machine
- Focused more on the social context at work rather than regarding worker as responsive only to financial incentives
1. Hawthorne Studies and human relations - Mayo
2. Maslow’s theory of human needs
3. McGregor’s Theory X and Theory Y
4. Argyris’s theory of adult personality.

Hawthorne Studies
Elton Mayo
Theory X and
Theory Y
Douglas McGregor
Human resource approaches
Assumption: People are social and self-actualising
Theory of human needs
Abraham Maslow
Personality and organisation
Chris Argyris

 1. The experiments on illumination
2. The relay-assembly test room experiments
3. The interviewing program
4. The bank-wiring observation room experiments
 Initial study examined how economic incentives and physical conditions affected worker output


No consistent relationship found
Called ‘Great illumination’
 This has led to carrying out further studies

 Chief Findings of Hawthorne Experiments
1. The informal org. and informal peer groups play critical role in org. behavior and productivity
2. Relationships are more critical to effectiveness than structures
3. The conception of economic man is inadequate and shortsighted
4. An employee should be considered as a total person and recognize his importance and dignity
5. Employee job satisfaction involved a wide variety of needs, motivations and rewards. Satisfaction and work environment are important determinants of performance
6. Bottom-up communications are superior to top-down ones
Hawthorne effect — people who are singled out for special attention perform as expected

 A need is a physiological or psychological deficiency a person feels compelled to satisfy.
 Classified human needs into 5 levels
 Physiological
 Safety
 Social
 Esteem
 Self-actualisation
 Deficit principle: A satisfied need is not a motivator of behaviour.
 Progression principle: A need becomes a motivator once the preceding lower-level need is satisfied.

Self
Actualization
5. Self-actualization needs
Highest level; need for self-fulfillment to grow and use abilities to fullest and most creative extent
4. Esteem needs
Need for esteem in eyes of others; need for respect, prestige, recognition and self-esteem, personal sense of competence, mastery
Esteem
3. Social needs
Need for love, affection, sense of belongingness in one’s relationships with other people
Social needs
Safety and security
2. Safety needs
Need for security, protection and stability in the events of day-to day life
1. Physiological needs
Most basic of all human needs: need for biological maintenance; food, water and physical wellbeing
Physiological

Classified Managers’ dominant assumptions about workers - 2 types

McGregor’s Theory X assumes that workers:


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 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 self-direction


Managers create self-fulfilling prophecies.

Theory X managers create situations where workers become dependent and reluctant to assume responsibility.

Theory Y managers create situations where workers respond with initiative, high performance. And assume responsibility

 Systems thinking

System

Collection of interrelated parts that function together to achieve a common purpose

Subsystem

A smaller component of a larger system

Open system

An organisation that interacts with its environments in the continual process of transforming resource inputs into outputs.

Inputs
Suppliers
Organisational
Network of subsystems
Purchasing and inventory systems
Marketing, sales and distribution systems
Accounting and financial systems
Operations and service management systems
Information and technology systems
Outputs
Customers
23

 Contingency thinking

Tries to match managerial responses with problems and opportunities unique to different situations

No ‘one best way’ to manage

Appropriate way to manage depends on the situation

Organization as a transformation system
Resources and materials flow in
Materials received and organize for use
People and technology create products
Finished products distributed
Customer s served
Management of the value chain

V. What are continuing management themes of the 21st century?
 Quality and performance excellence

Managers and workers in progressive organizations are quality conscious.

Total quality management (TQM)

Comprehensive approach to continuous quality improvement for a total organisation

Creates context for the value chain


V. What are continuing management themes of the 21st century?
1.
2.
Eight attributes of performance excellence:
Bias towards action
Closeness to the customer
3.
4.
5.
6.
7.
8.
Autonomy and entrepreneurship
Productivity through people
Hands-on and value-driven
Stick to the knitting
Simple form and lean staff
Simultaneous loose-tight properties

V. 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 reengineering

Virtual organizations


Agile factories

Network firms
Adoption of Theory Z management practices

V. 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
 special leadership qualities

V. What are continuing management themes of the 21st century?

The 21st century manager must be:
 a global strategist
 a master of technology
 an effective politician
 an inspiring leader