Lecture-2

THE EVOLUTION OF
MANAGEMENT THINKING
New Approach to Management

Success accrues to those who learn how

 To be leaders

 To Initiate change

 To participate in and create organizations

 withfewer managers
 With less hierarchy that can change quickly

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Management 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

3
Historical 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

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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

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Management Perspectives Over Time
Exhibit 2.1, p.44

2000
The Technology-Driven Workplace
2010
1990
The Learning Organization
2010
1980
Total Quality Management
2000
1970
Contingency Views
1950 2000
Systems Theory
1940 2000
Management Science Perspective
1930 1990
Humanistic Perspective
1890 1990
Classical
1940
1870 2010
Classical Perspective: 3000 B.C.

● Rational, scientific approach to management

● – make organizations efficient operating
machines

● Scientific Management
● Bureaucratic Organizations
● Administrative Principles

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Scientific 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.

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Scientific 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

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Bureaucracy 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

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Bureaucracy Organizations

Division of labor
with Clear definitions of
Personnel are selected authority and responsibility
and promoted based
on technical Positions organized
qualifications in a hierarchy of authority

Managers subject to
Rules and procedures
Administrative acts that will ensure reliable
and decisions recorded predictable behavior
in writing
Management separate
from the ownership
of the organization
Administrative Principles

 Contributors: Henri Fayol, Mary Parker, and

Chester I. Barnard
 Focus:
 Organization rather than the individual
 Delineated the management functions of planning,
organizing, commanding, coordinating, and
controlling

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 Henri Fayol 1841-1925
14 General Principles of Management

 Division of labor  Centralization

 Authority  Scalar chain
 Discipline  Order
 Unity of command  Equity
 Unity of direction  Stability and tenure
 Subordination of of staff
individual interest  Initiative
 Remuneration  Esprit de corps

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Chester Barnard 1886-1961
 Informal Organization
 Cliques

 Naturally occurring social groupings

 Acceptance Theory of Authority

 Freewill
 Can choose to follow management orders

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

● Human Relations Movement

● Human Resources Perspective
● Behavioral Sciences Approach

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Human Relations Movement

Emphasized satisfaction of employees’ basic

needs as the key to increased worker
productivity

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Hawthorne Studies

 Ten year study

 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

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Human Resource Perspective

Suggests jobs should be designed to meet higher-

level needs by allowing workers to use their full
potential

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 Douglas McGregor 1906-1964
Theory X & Y

Theory X Assumptions Theory Y Assumptions

 Dislike work –will avoid it  Do not dislike work

 Must be coerced, controlled,  Self direction and self control
directed, or threatened with  Seek responsibility
punishment  Imagination, creativity widely
 Prefer direction, avoid distributed
responsibility, little ambition,
want security  Intellectual potential only
partially utilized

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Douglas McGregor Theory X & Y

 Few companies today still use Theory X

 Many are trying Theory Y techniques

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Behavioral Sciences Approach

 Applies social
Sub-field ofscience in anPerspective
the Humanistic Management organizational
context
 Draws from economics, psychology, sociology,
anthropology, and other disciplines
 Understand employee behavior and interaction in
an organizational setting
 OD – Organization Development

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Management 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

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 Recent Historical Trends

● Systems Theory

● Contingency View

● Total Quality Management (TQM)

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Systems View of Organizations
Contingency View of Management

Successful resolution of organizational problems is thought to depend

Exhibit 2.6, p. 59

on managers’ identification of key variations in the situation at hand

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Elements of a Learning Organization

Team-Based Structure

Learning
Organization
Empowered Open
Employees Information
Types of E-Commerce

Business-to-Consumer B2C
Selling Products and
Services Online

Consumer-to-Consumer C2C
Business-to-Business B2B Electronic Markets
Transactions Between Created by Web-Based
Organizations Intermediaries