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Chapter Two

Chapter Two. The Evolution of Management Thought. 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.

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Chapter Two

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  1. Chapter Two The Evolution of Management Thought

  2. 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.

  3. 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.

  4. Figure 2.1: Management Is a Global Affair

  5. The Practice and Study of Management • The systematic study of management did not begin in earnest until after 1900. • The practice of management is much older, stretching as far back as the construction of the pyramids.

  6. The Practice and Study of Management (cont’d) • 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).

  7. 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 • The attributes of excellence approach

  8. 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.

  9. 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.

  10. 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.

  11. The Operational Approach • Frederick W. Taylor’s Scientific Management • Developing performance standards on the basis of systematic observations and experimentation • Standardization of work practices and methods to reduce waste and increase productivity • Time and task study of workers’ efforts to maximize productivity and output • Systematic selection and training of workers to increase efficiency and productivity • Differential pay incentives based on established work standards

  12. Figure 2.2: Taylor’s Differential Piece-Rate Plan

  13. 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

  14. 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

  15. The Quality Advocates (cont’d) • Joseph M. Juran • Proposed the concept of internal customers, teamwork, partnerships with suppliers, 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)

  16. The Operational Approach • 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.

  17. 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

  18. Figure 2.3: The Human Relations Movement Pyramid

  19. 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.

  20. 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.

  21. 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

  22. 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 the organization. • Managerial sensitivity to employees is necessary to foster the cooperation needed for high productivity.

  23. The Systems Approach • What Is a System? • A collection of parts operating interdependently to achieve a common purpose • Systems Approach • Posits that the performance of the whole is greater than the sum of the performance of its parts • Analytic versus synthetic thinking: Outside-in thinking versus inside-out thinking • Seeks to identify all parts of an organized activity and how they interact

  24. The Systems Approach • Chester I. Barnard’s Early Systems Perspective • 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

  25. Figure 2.4: Barnard’s Cooperative System

  26. General Systems Theory • General Systems Theory • An area of study based on the assumptions that everything is part of a larger, interdependent arrangement • Levels of systems • Each system is a subsystem of the system above it. • Identification of systems at various levels helps translate abstract systems theory into more concrete terms.

  27. Figure 2.5: Levels of Living Systems

  28. General Systems Theory (cont’d) • Closed Versus Open Systems • Closed system: A self-sufficient entity • Open system: Something that depends on its surrounding environment for survival • Systems are classified as open (closed) by how much (how little) they interact with their environments.

  29. General Systems Theory (cont’d) • New Directions in Systems Thinking • Organizational learning and knowledge management • Organizations are living and thinking open systems that learn from experience 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 • Complex systems are self-organizing.

  30. The Contingency Approach • Contingency Approach • A research effort to determine which managerial practices and techniques are appropriate in specific situations • Different situations require different managerial responses. • It deals with intercultural feelings in which custom and habits cannot be taken for granted.

  31. Figure 2.6: The Contingency View: A Compromise

  32. The Contingency Approach (cont’d) • Contingency Characteristics • 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.

  33. The Contingency Approach (cont’d) • Lessons from the Contingency Approach • Approach emphasizes situational appropriateness rather than rigid adherence to universal principles • Approach creates the impression that an organization is captive to its environment

  34. 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 • Donald Trump’s hit show “The Apprentice” • What’s Wrong with Management by Best Seller? • Academics point to shoddy research and selective inclusion of anecdotal evidence. • It encourages simplistic thinking: Upper management assumes that there is a one-size-fits-all solution that’s a magic bullet quick-fix to solve the organization’s problems.

  35. 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.

  36. 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.

  37. Universal process approach Operational approach Scientific approach Operations management Human relations movement Theory Y Organizational behavior System General systems theory Closed system Open system Contingency approach Multivariate analysis Terms to Understand

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