The Evolution of Management Thinking CHAPTER 2. Copyright © 2008 by South-Western, a division of...

The Evolution of Management Thinking

The Evolution of Management ThinkingCHAPTER 2CHAPTER 2

2 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

Learning ObjectivesLearning Objectives

Understand how historical forces influence the practice of management.

Identify and explain major developments in the history of management thought.

Describe the major components of the classical and humanistic management perspectives.

Discuss the management science perspective and its current use in organizations.


Learning Objectives (contd.)Learning Objectives (contd.)

Explain the major components of systems theory, the contingency view, and total quality management.

Describe the learning organization and the changes in structure, empowerment, and information sharing that managers make to support it.

Discuss the technology-driven workplace and the role of outsourcing, supply chain management, enterprise resource planning, knowledge management systems, and customer relationship management.


Management and OrganizationManagement and Organization

Management philosophies and organization forms change over time to meet new needs

Some ideas and practices from the past are still relevant and applicable to management today


Historical PerspectiveHistorical Perspective

Provides a context or environment Develops an understanding of societal

impact Achieves strategic thinking Improves conceptual skills Social, political, and economic forces

have influenced organizations and the practice of management


Forces Influencing

Organizations and Management Forces Influencing

Organizations and Management

Social Forces - values, needs, and standards of behavior

Political Forces - influence of political and legal institutions on people & organizations

Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users


Management Perspectives Over Time

Exhibit 2.1


Classical Perspective: 3000 B.C.Classical Perspective: 3000 B.C.

● Rational, scientific approach to management – make organizations efficient operating machines

● Scientific Management● Bureaucratic Organizations● Administrative Principles


Scientific Management: Taylor 1856-1915Scientific Management: Taylor 1856-1915

General Approach Developed standard method for

performing each job. Selected workers with appropriate

abilities for each job. Trained workers in standard method. Supported workers by planning work

and eliminating interruptions. Provided wage incentives to workers

for increased output.


Scientific ManagementScientific Management

Contributions Demonstrated the importance of compensation for performance. Initiated the careful study of tasks and jobs. Demonstrated the importance of personnel and their training.

Criticisms Did not appreciate social context of work and higher needs of

workers. Did not acknowledge variance among individuals. Tended to regard workers as uninformed and ignored their ideas


Bureaucratic OrganizationsBureaucratic Organizations

Max Weber 1864-1920 Prior to Bureaucracy Organizations

– European employees were loyal to a single individual rather than to the organization or its mission

– Resources used to realize individual desires rather than organizational goals

Systematic approach –looked at organization as a whole


Characteristics of Weberian BureaucracyCharacteristics of Weberian Bureaucracy

Positions organized in a hierarchy of authority

Managers subject to Rules and procedures

that will ensure reliable predictable behavior

Personnel are selected and promoted based

on technical qualifications

Administrative acts and decisions recorded

in writing

Management separate from the ownership of the organization

Division of labor with Clear definitions of

authority and responsibility

Exhibit 2.3


Administrative PrinciplesAdministrative Principles

Contributors: Henri Fayol, Mary Parker Follett, and Chester I. Barnard

Focus: – Organization rather than the individual– Delineated the management functions of

planning, organizing, commanding, coordinating, and controlling


Henri Fayol 1841-1925Examples of General Principles of Management

Henri Fayol 1841-1925Examples of General Principles of Management

Division of work Unity of command Unity of direction Scalar chain


Mary Parker Follett 1868-1933Mary Parker Follett 1868-1933

Importance of common super-ordinate goals for reducing conflict in organizations

– Popular with businesspeople of her day– Overlooked by management scholars– Contrast to scientific management– Reemerging as applicable in dealing with

rapid change in global environment

Leadership – importance of people vs. engineering techniques

Ethics - Power - Empowerment


Chester Barnard 1886-1961Chester Barnard 1886-1961

Informal Organization– Cliques– Naturally occurring social groupings

Acceptance Theory of Authority– Free will– Can choose to follow management orders


Humanistic PerspectiveHumanistic Perspective

Emphasized understanding human behavior, needs, and attitudes in the workplace

Human Relations Movement

Human Resources Perspective

Behavioral Sciences Approach


Human Relations MovementHuman Relations Movement

Emphasized satisfaction of

employees’ basic needs as the key to

increased worker productivity


Started in 1895 Four experimental & three control groups Five different tests Test pointed to factors other than illumination

for productivity 1st Relay Assembly Test Room experiment,

was controversial, test lasted 6 years Interpretation, money not cause of increased

output Factor that increased output, Human Relations

Hawthorne StudiesHawthorne Studies


Human Resource PerspectiveHuman Resource Perspective

Suggests jobs should be designed to

meet higher-level needs by allowing

workers to use their full potential


Abraham Maslow 1908-1970Abraham Maslow 1908-1970

Identified a hierarchy of needs Problems stem from an inability to satisfy

one’s needs


Dislike work –will avoid it Must be coerced,

controlled, directed, or threatened with punishment

Prefer direction, avoid responsibility, little ambition, want security

Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely

distributed Intellectual potential only

partially utilized

Douglas McGregor Theory X & Y1906-1964

Theory X Assumptions Theory Y Assumptions


Behavioral Sciences ApproachBehavioral Sciences Approach

Applies social science in an organizational context

Draws from economics, psychology, sociology, anthropology, and other disciplines– Understand employee behavior and

interaction in an organizational setting– OD – Organization Development

Sub-field of the Humanistic Management Perspective


Management Science PerspectiveManagement Science Perspective

Emerged after WW II Applied mathematics, statistics, and other

quantitative techniques to managerial problems Operations Research – mathematical modeling Operations Management – specializes in physical

production of goods or services Information Technology – reflected in management

information systems


Recent Historical TrendsRecent Historical Trends

● Systems Theory

● Contingency View

● Total Quality Management (TQM)


Systems View of OrganizationsSystems View of Organizations

Exhibit 2.5


Contingency View of ManagementContingency View of Management

Exhibit 2.6


TQMTQM

Focuses on managing the total organization to deliver quality to customers.

Four significant elements are– Employee involvement– Focus on the customer– Benchmarking– Continuous improvement


Elements of a Learning OrganizationElements of a Learning Organization

Learning Organization

Open Information

Empowered Employees

Team-Based Structure

Exhibit 2.7


Types of E-CommerceTypes of E-Commerce

Business-to-Consumer B2C Selling Products and

Services Online

Business-to-Business B2B Transactions Between

Organizations

Consumer-to-Consumer C2C Electronic Markets

Created by Web-Based Intermediaries

Exhibit 2.8

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