2 | 1© 2009 South-Western, Cengage Learning

Chapter 2

The Evolution of Management Thought

2 | 2© 2009 South-Western, Cengage Learning

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.

• Explain the significance of applying open-system thinking to management.

• Explain the practical significance of adopting a contingency perspective.

2 | 3© 2009 South-Western, Cengage Learning

Management is a Global Affair

The contributors to management theory and practice have come from around the globe.

2 | 4© 2009 South-Western, Cengage Learning

The Practice and Study of Management

• The Egyptian pyramids required managed effort.• The systematic study of management started only

during the 20th century.• 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 multiple increase in management theory information is

due largely to its interdisciplinary nature or contributions from several fields such as psychology, mathematics, economics, history, and engineering.

2 | 5© 2009 South-Western, Cengage Learning

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

2 | 6© 2009 South-Western, Cengage Learning

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.

2 | 7© 2009 South-Western, Cengage Learning

Henri Fayol’sUniversal Management Process

– Fayol divided a manager’s job into five functions:

• Planning• Organizing• Command• Coordination• Control

– He developed 14 universal principles of management.

2 | 8© 2009 South-Western, Cengage Learning

2 | 9© 2009 South-Western, Cengage Learning

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 beginning with planning and ending with controlling.

– The functional approach is useful because it specifies what managers should do.

2 | 10© 2009 South-Western, Cengage Learning

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

2 | 11© 2009 South-Western, Cengage Learning

Taylor’s Followers

• Frank and Lillian Gilbreth (THERBLIGS)– 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

2 | 12© 2009 South-Western, Cengage Learning

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

2 | 13© 2009 South-Western, Cengage Learning

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)

2 | 14© 2009 South-Western, Cengage Learning

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.

2 | 15© 2009 South-Western, Cengage Learning

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

2 | 16© 2009 South-Western, Cengage Learning

The Human Relations Movement Pyramid

2 | 17© 2009 South-Western, Cengage Learning

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.

2 | 18© 2009 South-Western, Cengage Learning

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– Cooperation, spirit of unity and self-control are the

keys to productivity.

2 | 19© 2009 South-Western, Cengage Learning

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

2 | 20© 2009 South-Western, Cengage Learning

2 | 21© 2009 South-Western, Cengage Learning

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.

2 | 22© 2009 South-Western, Cengage Learning

The Systems Approach

• What Is a System?– A collection of parts operating

interdependently to achieve a common purpose

• Systems Approach– The performance of the whole is greater than

the sum of the performance of its part.

– Seeks to identify all parts of an organized activity and how they interact.

2 | 23© 2009 South-Western, Cengage Learning

The Systems Approach

Chester I. Barnard’s Early Systems Perspective– Characterized all organizations as cooperative

systems– Defined principal elements in an organization as

• Willingness to serve• Common purpose• Communication

– Strong advocate of business ethics

2 | 24© 2009 South-Western, Cengage Learning

General Systems Theory

• General Systems Theory– An interdisciplinary 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.

2 | 25© 2009 South-Western, Cengage Learning

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

2 | 26© 2009 South-Western, Cengage Learning

Systems Approach

• Lessons from the Systems Approach

– Managers now have a greater appreciation for the importance of seeing the whole picture.

– Manager should not become preoccupied with one aspect of organizational management while ignoring other internal and external realities.

– The systems approach tries to integrate various management theories.

2 | 27© 2009 South-Western, Cengage Learning

The Contingency Approach

• Contingency Approach

Also called Situational Approach. A research effort to determine which managerial practices and techniques are appropriate in specific situations.

2 | 28© 2009 South-Western, Cengage Learning

The Contingency Approach

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

2 | 29© 2009 South-Western, Cengage Learning

Summary• Management is an interdisciplinary and international field

that has evolved over the years.• The universal approach to management suggests that the

administration of companies requires the same rational process.

• The operational approach has evolved from scientific management to operations management.

• By definition, the operational approach is oriented toward the production area of 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.

2 | 30© 2009 South-Western, Cengage Learning

Summary (cont’d)

• Under the systems approach, modern organizations are viewed as open systems.

• The contingency approach stresses situational appropriateness rather than universal principles.

2 | 31© 2009 South-Western, Cengage Learning

End of Chapter 2

2 | 32© 2009 South-Western, Cengage Learning

ASSIGNMENT (Chapter 3)

Describe the impact of TECHNOLOGICAL ENVIRONMENT (CHANGE) to you as a manager and to your organization.

Requirements:•Write your name & section, subject, prelim assignment#02 and date at the top.•Write clearly & legibly in BIG letters•Use 1 sheet yellow paper•Essay format•To be submitted on Friday, July 08

2 | 33© 2009 South-Western, Cengage Learning

1. Identify future technological changes in your organization.

2. How will #1 affects your organization if changes will be adapted?

3. How will #1 affects your organization if changes will not be adapted? Will your organization still be competitive?

2 | 34© 2009 South-Western, Cengage Learning

Quiz no. 2 - The Evolution of Management Thought

Choose the correct Answer: (1 – 5) (10% each )

1.________ also called situational approach states that different situations require different practices to deal with a given situation (Contingency Approach, Operational Approach, Systems Approach, Behavioral Approach, Universal Process Approach)

2.W. Edwards Deming recommended _______ improvement for all types of operations (continuous, segmented, economic, training, parallel)

3.According to advocates of _______, the central focus of organized activity should be people (operations approach, scientific management, universal process approach, behavioral approach, quality control management)

4.Management is studied by _______ theorists, who put things together and assume that the whole is greater than the sum of its parts (systems, universal process, human relations, behavioral, scientific management)

5.________ developed Theory X & Theory Y (Mary Parker Follett, Elton Mayo, Henry Fayol, Frederick Taylor, Douglas McGregor)

6 -10. Identify and explain at least 5 of Henry Fayol’s 14 Universal Principles of Management