Evolution of Thought in the Area of Management and Public ... of Thought.pdf · management...

© J. Rudy, Organizational Behavior, FMCU, Fall 2007

Evolution of Thought in the Area of

Management and Public Administration

Prof. A. SURYANARAYANA

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OUTLINE Upon listening to my Lecture, you should be

able to:

Understand the setting in which Management Thought first developed

Describe the ways in which a Theory can be useful

Distinguish the various Schools of Management Thought

Understand the historical context in which the Dynamic Engagement Approach to Management Thought has been developed

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EARLY THINKING

Early strategists –

1. Machiavelli (1531) “Discourses” – Italy – Republic of Florence

2. Chinese Philosopher, Sun Tzu >2000 years ago…”The Art of War”……

3. Mao Zewdong….Founder of People’s

Republic of China (1949)

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WHY STUDY MANAGEMENT THOUGHT

Thought/Theory is a coherent group of assumptions put forth to explain the relationship between two or more observable facts

It represents perspectives with which people make sense of their experiences in the world

It provides a stable focus for understanding what we experience providing criteria for determining what is relevant

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Evolution of Management Thought

CLASSICAL APPROACH

HUMAN RELATIONS APPROACH

BEHAVIORAL SCIENCE APPROACH

OPERATION RESEARCH APPROACH

SYSTEM APPROACH

CONTINGENCY APPROACH

EXCELLENT COMPANIES APPROACH

RECENT TRENDS

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Approaches 1 – 7 (1)

REPRESENT THE EVOLUTION OF MANAGEMENT THOUGHT FROM THE END OF 19th CENTURY TILL THE BEGINNING OF 90s

THERE IS A SPECIFIC CONTRIBUTION OF EACH APPROACH TO MANAGEMENT DEVELOPMENT

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ON THE OTHER HAND – THERE ARE SEVERAL GENERAL (COMMON) FEATURES OF EACH APPROACH

THE ORGANIZATION AS A SYSTEM AND THE PROCESS OF MANAGEMENT IS SEEN AS:

DETERMINISTIC

PREDICTABLE

THEY REFLECT THE MECHANISTIC CONCEPT OF THE UNIVERSE

THE UNIVERSE = GIANT MECHANISM

THE RELIABILITY OF THE MECHANISM IS DETERMINED BY THE RELIABILITY OF ITS SINGLE PARTS

THERE IS A RELATIONSHIP:

CAUSE EFFECT 7



BOTH CLASSICAL NEWTON’S PHYSICS

AND

CLASSICAL THEORIES OF MANAGEMENT ARE BASED ON THE SAME MECHANISTIC CONCEPT OF THE UNIVERSE

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Management Implications (1)

CLASSICAL APPROACH:

HUMAN RELATIONS AND BEHAVIORAL SCIENCE APPROACH:

MANAGEMENT

PRINCIPLES’

IMPLICATION

TAYLOR, FAYOL, WEBER

EFFECTIVE

FUNCTIONING

OF THE

ORGANIZATION

EMPLOYEE

MOTIVATION

EFFECTIVE

FUNCTIONING

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OPERATION RESEARCH APPROACH:

SYSTEM APPROACH:

CRITICAL

PATH

EFFECTIVE ACCOMPLI-

SHMENT OF THE GOAL

INPUTS TRANSFORMATION OUTPUT

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CONTINGENCY APPROACH:

EXCELLENT COMPANIES APPROACH:

ANALYSIS OF THE

CONTINGENCY

FACTORS IN THE

ENVIRONMENT

EFFECTIVE

FUNCTIONING

OF THE

ORGANIZATION

MANAGERIAL

IMPLICATION

OF EIGHT

PRINCIPLES

EFFECTIVE

FUNCTIONING

OF THE

ORGANIZATION

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The Result of Mechanistic Concept

CLASSICAL MECHANISTIC MODEL OF THE ORGANIZATION (THE “OLD” MODEL)

TYPICAL FEATURES:

SPECIALIZATION

HIERARCHY

CENTRALIZATION, ETC.

TOP MANAGEMENT

MIDDLE MANAGEMENT

FIRST-LINE MANAGEMENT

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Mechanistic Concept

ADVANTAGES: RELATIVELY RELIABLE CONTROL

CLEAR DELEGATION OF AUTHORITY

SPECIALIZED (SKILLED) WORKFORCE, etc.

DISADVANTAGES: LOW FLEXIBILTY

THE ORGANIZATION IS “TOO FAR” FROM THE CUSTOMER

THE ORGANIZATION IS LESS COMPETITIVE IN THE COMPETITIVE ENVIRONMENT

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Recent Trends

CLASSICAL PHYSICS HAS BEEN ELIMINATED BY THEORY OF RELATIVITY AND QUANT MECHANICS

CLASSICAL PRINCIPLE OF DETERMINISTIC PREDICTABILITY HAS BEEN ELIMINATED BY CHAOS THEORY

CHAOS THEORY DEALS WITH THE NON-LINEAR SYSTEMS (non-linear behavior)

ORGANIZATIONS AS INSTITUTIONS ARE TYPICAL NON-LINEAR SYSTEMS

THE REASON: PEOPLE IN THE ORGANIZATION

RESULT: CHAOS IS NOT A SYNONYM OF INSTABILITY

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Management & Chaos Theory

OBJECTIVES:

1. DESCRIBE THE BASIC FEATURES OF CHAOS THEORY

2. SPECIFY THE CHAOS THEORY IMPACT ON MANAGEMENT

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Chaos Theory

ACCORDING TO CHAOS THEORY THERE ARE:

1. PASSIVE CHAOS = EQUILIBRIUM = MAXIMAL ENTROPY

2. ACTIVE CHAOS = SYSTEM IS “FAR FROM THE EQUILIBRIUM”

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Laws of Thermodynamics

ENTROPY = THE TERM THAT COMES FROM PHYSICS (THERMODYNAMICS)

THE FIRST LAW OF THERMODYNAMICS SAYS:

MASS AND ENERGY IN THE UNIVERSE ARE CONSTANT

(Mass and energy cannot be “made”, produced or destroyed. They can be only changed for another form)

THE SECOND LAW OF THERMODYNAMICS SAYS:

MASS AND ENERGY CAN BE CHANGED ONLY IN ONE WAY (EX: FROM USABLE TO NON-USABLE)

MAX. ENTROPY = DISORDER = ALL THE ENERGY HAS BEEN CHANGED FOR NON-USABLE

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Chaos Theory

CHAOS THEORY DEALS WITH THE ACTIVE CHAOS

RESULT:

SYSTEMS ARE NOT NECESSARILY HEADING TO THE EQUILIBRIUM

IN THE STAGE WHEN THE SYSTEM IS FAR FROM THE EQUILIBRIUM THE NEW SYSTEM SPRINGS UP

CHAOTIC SYSTEM THAT IS FAR FROM THE EQUILIBRIUM – THE NEW SYSTEM – REACHES A HIGHER LEVEL OF ORDER

ORDER OUT OF CHAOS

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Managerial Implication

HERE IS YOUR LIMIT

GROWTH

TIME

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Managerial Implication

TIME

GROWTH

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TAYLOR’S LEGACY

Principles of Scientific Management 1. SPECIALIZE ALL JOBS AND TASKS, REDUCING WORK

TO ITS SMALLEST AND SIMPLEST ELEMENTS;

2. ESTABLISH PRECISE POLICIES AND PROCEDURES SO THAT WORK IS PERFORMED IN THE SAME WAY EVERY TIME. CLOSELY MONITOR WORKERS TO ENSURE COMPLIANCE;

3. CONTAIN AND COMPARTMENTALIZE ALL RESPONSIBILITY, DECISION-MAKING, DISCRETION, AND POWER EXCLUSIVELY WITH THOSE IN AUTHORITY;

4. ENSURE THAT EACH WORKER IS WELL-MATCHED TO THE SPECIFIC PRE-DETERMINED REQUIREMENTS OF THE FUNCTION ASSIGNED. 21


TAYLOR’S LEGACY

Principles of Scientific Management 5. ELIMINATE ALL DUPLICATION OF EFFORT, REQUIRING

THAT TASKS ARE PERFORMED EXCLUSIVELY BY THOSE TO WHOM THEY ARE ASSIGNED.

A CHILLING PROPHECY

“WE ARE GOING TO WIN AND THE INDUSTRIAL WEST IS GOING

TO LOSE. THERE IS NOT MUCH YOU CAN DO ABOUT IT BECAUSE THE REASONS FOR YOUR FAILURE ARE WITHIN YOURSELVES. YOUR FIRMS ARE BUILT ON THE TAYLOR MODEL. EVEN WORSE, SO ARE YOUR HEADS”.

Konosuke Matsushita, Founder Matsushita Electric, Ltd.

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Frederick W. Taylor (1856-1915)

Development of a true Science of Management

Scientific Selection of Workers

Scientific Education and Development of Workers

Intimate and friendly cooperation between management and Workers

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Contributions and Limitations

[+ ]

Production Miracle is one legacy

Efficiency Techniques for non-industrial settings ranging from fast-food service to t he training of surgeons

[-]

Fear of Layoffs

Productivity leading to exploitation

Shaded labor-management relations

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Classical Organization School

Henry Fayol (1841-1925)

14 General Principles of Management 1. Division of Labor;

2. Authority;

3. Discipline;

4. Unity of Command;

5. Unity of Direction;

6. Subordination of Individual Interest to the Common Good;

7. Remuneration;

8. Centralization;

9. The Hierarchy;

10.Order;

11. Equity;

12. Stability of Staff;

13. Initiative;

14. Esprit de Corps 25


MAX WEBER – BUREAUCRACY (1864-1920)

Carefully controlled regulation of activities

Strictly defined hierarchy governed by clearly defined regulations and lines of authority

Rationality for objectives and activities

Explicitly spelled out division of labor

Emphasis on technical competency

Merit-based performance evaluations

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BUREAUCRACY

Efficiency of Operations

Predictable and Productive Operations

Has the promise for advancing the formation of huge corporations such as Ford

[-]

1. Bureaucracy Busters e.g., GE and Xerox

2. Replacement of Organization Charts

3. Innovation and Creativity through Teams, Projects, and Alliances

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The Behavioral School

Organization is People

Failure to achieve efficiency and harmony

Unpredictable or unexpected behavior

Dealing with “people-side” of firms

Insights from Sociology and Psychology

Human Relations Movement

Hawthorne Experiments (1924-1933)

Elton Mayo (18880-1949)

Hawthorne Effect

Concept of ‘Social Man’

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Others

Abraham H. Maslow’s Need Hierarchy

Herbert Simon (Late 50s)

Douglas McGregor {Complex Person} Theory X and Y

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MANAGEMENT SCIENCE SCHOOL

World War-II Great Britain’s OR Teams consisting of Mathematicians, Physicists, and other Scientists

Application of OR to problems in Industry

Formalization of OR Procedures leading to Management Science School

McNamara….Ford Company (50s and 60s)

Crunching the Numbers…..Whiz Kids

Values and Variables…Simulations

Objective basis for making a decision

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SYSTEMS APPROACH

Key Concepts

Sub-systems

Synergy

Open and Closed Systems

System boundary

Flow

Feedback

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THE CONTINGENCY APPROACH

Charles Kindleberger – Economist – “it all depends”

Situational approach

Identification of techniques that best contribute to the attainment of goals in a particular situation, under particular circumstances, and at a particular time

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Entering an Era of Dynamic Engagement

All the theories of 20th Century are not enough as new environment is not some set of fixed, impersonal forces

Dynamic and complex web of people interacting with each other

Backdrop of rapid change and profound rethinking about 21st Century organizations

Blurred boundaries of cultures and nations

Global Village Concept

Scope of international and intercultural relationships

Time pressures and intensity of organizational relationships ----- a new approach is needed

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NEW ORGANIZATIONAL RESPONSIBILITY

Ethics and Social Responsibility

Globalization and Management

Inventing and Reinventing Organizations

Cultures and ‘Multiculturisms’

Quality

………….Remember to change with the times

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THANKS FOR YOUR PATIENCE

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