Organisational & Historical Context

BMAN 10011: Fundamentals of Management

Dr. Masakatsu (Bob) Ono

[Link]@[Link]
AMBS 7.012
TODAY’S LECTURE
- Organisational Context
- Historical Context
 What is Organisational Culture?
Artefacts
• “the pattern of basic assumptions physical layout
dress
that a given group has invented symbols

discovered or developed and

therefore taught to new members as
the correct way to perceive think and
feel in relation to problems.” (Schein,
Espoused
2004)
Beliefs &
Values

• Functions:
− Integration
− Communication Underlying
Assumptions
− Sense of Purpose
 Formation of Corporate Cultures
• Personality of the founder(s) is the main causes
of a culture
• ASA Model (Schneider, 1987)

− Attraction: people are differentially attracted to careers

(interests & personality)
− Selection: organisations choose those who share
common attributes
− Attrition: compatibles remain longer than “misfits”
▶ ▶ ▶ increased homogeneity
 Strong vs. Weak Culture
• Strong Culture: “one that is internally consistent,
is widely shared, and makes it clear what it
expects and how it wishes people to behave”

STRONG CULTURE WEAK CULTURE

Subcultures or people within an
Most people have basic beliefs and values organization have values and beliefs that
that agree with the organization’s values are different or conflict with the
organization’s values
Values and beliefs are consistent and
Values are vague or contradictory
coherent
Values and beliefs are comprehensive and
Values are patchy
cover most things

example of strong culture

 National Cultures
• Dimensions of International Cultures (Hofstede, 2005)

Egalitarian Power Distance Embrace hierarchy

Collectivist Collectivisms vs. Individualism Individualist

Comfortable Uncomfortable
Uncertainty Avoidance
with uncertainty with uncertainty

Nurture important Femininity vs. Masculinity Power important

Traditional and Short- vs. Long-Term Futuristic and

short-term Orientation long-term

Normative repression Restraint vs. Indulgence Satisfaction is good

RECENT ADDITIONS
 National Cultures
• GLOBE Project (House et al., 2004)
− Data not limited to one firm
− 170 researchers involved
− Proposed a competing model of cultural dimensions
• 9 dimensions: assertiveness, future orientation, gender
egalitarianism, power distance, uncertainty avoidance, etc.
• “as is” scores and “should be” scores

[Link]
 National Cultures

Who is more likely to trust

members of the other group?

• A study examined whether culture influences the

tendency of individuals and organisations to trust
(Huff & Kelley, 2003)
− Data: 1,200+ mid-level managers from 7 different
countries
− Result: Higher propensity to trust in the US than in Asia
(e.g., Japan, Korea, China)
HISTORY OF
MANAGEMENT
 Scientific Management
 Classical Theorists
 Human Relations
 Systems Theory
 Contingency Theory
 Scientific Management
• Increased importance of management after
industrial revolution
− Larger units
− Demand for specialised labour
− Costly factories & machines

Platt Brothers & Co. Ltd

 Scientific Management
• Frederick W. Taylor
− Father of scientific management
− Workers seen as mere parts of a large machine
− Scientifically studied “what a good worker should
achieve”

Loading pig iron

Shoveling iron & coal
 Scientific Management
• Lillian & Frank Gilbreth
− Time & Motion Study
− Studied the hand movements of bricklayers
• Eliminating repetitive or meaningless moves
• Training bricklayers
• Improving materials
 Scientific Management
• Fordism: assembly/production line technology
− Standardisation, interchangeability, and precision
− Simplicity and specialization
− Synchronisation and conveyor belt production

Ford Toyota
 Classical Theorists
• Henri Fayol: identified the key administrative
processes & principles
− 7 Process: POSDCoRB (amended by Gulick)

Planning Organising Staffing

Deciding Controlling Reporting Budgeting

− 14 Principles

Division of Unity of
Order
Labour Command

Authority &
Centralisation Equity more…
Responsibility
 Classical Theorists
• Max Weber: provided guidelines for
a rational organization
• 6 features of bureaucracies iron cage of rational control

Specialised, clearly defined Written records of acts and

jobs decisions – equality

Hierarchical order – Comprehensive rules to cover

increasing authority & control all eventualities

Merit-based selection & Management is separate from

promotion ownership
 Human Relations
• Elton Mayo’s Hawthorne studies
− Tested whether good lighting improves the performance
(illumination experiments)
 Human Relations
• Findings from the Hawthorne studies:
− Productivity increased when illumination rose
− Productivity increased when illumination was reduced
▶ ▶ ▶ Illumination did not affect productivity increases
—then, what did?
Control Experimental

• Hawthorne Effect:
− Workers responding to the
interest taken in them
− aka. observer effect
 Human Relations
Hugo Munsterberg Mary Parker Follett
- Attention to mental - Management is
skills of workers “getting things done
- Developed tests to by other people
assess ability & - Managers to
performance harnessing the
potential of people
- Self-governing,
empowered groups

Elton Mayo Chester Barnard

- Attention to - Managers needing to
psychological obtain cooperation of
conditions of employees
productive workers - Effective
- Found the Hawthorne communication & a
Effect harmonious working
atmosphere
 Systems Theory
• “The whole organisation can only work effectively
if the individual parts work effectively and co-
operate”
Closed System Open Systems

• Operates in isolation to its • Interacts with its environment

environment via feedback loops
• Predictable environment: • Complex environment
slow technological development & • Considered as a modern
communication speed, low
theory
competition
• Common among earlier
theorists
 Systems Theory
• Complex Open System

Inputs (x): Outputs (x + y):

o Money Transformation o Profit/Loss
o Materials process arranged by o Satisfaction
o Men & Women managers o Contribution to local
o Information*** & wider communities

feedback fromaenvironment

DEMAND
Shareholders New technology Pressure groups
SUPPLY

Lenders Local community Consumer tastes

Employees Economic climate Markets
Suppliers Government regulations New competitors
 Systems Theory
• Additional features of the theory:

− Excessive feedback can be dysfunctional

− A system tends to run down, decay, and become
chaotic (Entropy) without regular inputs & maintenance
− The extra values can be created when two parts of a
system interact (Synergy)
− An organisation often has sub-systems (e.g., functions
& departments)
 Contingency Theory
• The style of management in an organisation (as
an open system) is contingent on an
organisation’s environment
− Group’s situations (Fiedler et al., 1978)
− Production type (Woodward, 1965)
• Leadership
− Appropriate leader style (task vs. relationship) depends
on the group’s situations
− Situational elements:
• leader-member relationship, task structure, formal power
 Reading & Self-Test
• Smith (2011)
− Chapter 2: The Organisational Context
− Chapter 3: The Historical Context

• Self-test 2 posted on BlackBoard

− Answers are also available