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
2
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
4
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
5
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
7
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.
8
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
9
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
10
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
12
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
13
Chester Barnard 1886-1961
Informal Organization
Cliques
Naturally occurring social groupings
Acceptance Theory of Authority
Freewill
Can choose to follow management orders
14
Humanistic Perspective
Emphasized understanding human behavior, needs,
and attitudes in the workplace
● Human Relations Movement
● Human Resources Perspective
● Behavioral Sciences Approach
15
Human Relations Movement
Emphasized satisfaction of employees’ basic
needs as the key to increased worker
productivity
16
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
17
Human Resource Perspective
Suggests jobs should be designed to meet higher-
level needs by allowing workers to use their full
potential
18
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
19
Douglas McGregor Theory X & Y
Few companies today still use Theory X
Many are trying Theory Y techniques
20
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
21
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
22
Recent Historical Trends
● Systems Theory
● Contingency View
● Total Quality Management (TQM)
23
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
25
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
