Chapter 2

MANAGEMENT TOUGHTS AND THEORIES

GM 12/04/20
 The Importance of
Theory and History
Why Theory?
Theory: a conceptual framework for organizing
knowledge and providing a blueprint for action.
Management theories are grounded in reality.
Managers develop their own theories about how they
should run their organizations.
Why History?
Understanding historical developments in management
aids managers in the development of management
practices and in avoiding the mistakes of others.

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 Figure 2.1: Management
in Antiquity

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 Early Management Pioneers
Robert Owen (1771–1858)
British industrialist who recognized the importance of
human resources and implemented better working
conditions through reduced child labor, meals, and
shorter hours.
Charles Babbage (1792–1871)
English mathematician who focused on creating
efficiencies of production through the division of labor,
management and labor cooperation, and application of
mathematics to management problems.
 Wrote “On the Economy of Machinery and Manufactures.”

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 The Classical
Management Perspective
Consists of two different viewpoints:
Scientific Management
 Concerned with improving the performance of
individual workers (i.e., efficiency).
 Grew out of the industrial revolution’s labor
shortage at the beginning of the twentieth
century.
Administrative Management
 A theory that focuses on managing the total
organization.

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 Scientific Management
Frederick Taylor (1856–1915)
“Father of Scientific Management.”
Replaced rule-of-thumb methods with scientifically-
based work methods to eliminate “soldiering.”
Believed in selecting, training, teaching, and developing
workers.
Used time studies, standards planning, exception rule,
slide-rules, instruction cards, and piece-work pay
systems to control and motivate employees.

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 Figure 2.2: Steps in
Scientific Management

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 The Classical Management Perspective
(cont’d)
Other Scientific Management Pioneers
Frank and Lillian Gilbreth
 Reduced the number of movements in bricklaying, resulting in
increased output of 200%.
Henry Gantt
 Was an early associate of Fredrick Taylor.
 Developed other techniques, including the Gantt chart, to improve
working efficiency through planning/scheduling.
Harrington Emerson
 Advocated job specialization in both managerial and operating
jobs.

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 The Classical Management
Perspective (cont’d)
Administrative Management Theory
Focuses on managing the total organization rather than
individuals.
Henri Fayol
Wrote “General and Industrial Management.”
Helped to systematize the practice of management.
Was first to identify the specific management functions
of planning, organizing, leading, and controlling.

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 Classical Management Proponents
Lyndall Urwick
Integrated the work of previous management theorists.
Max Weber
His theory of bureaucracy is based on a rational set of
guidelines for structuring organizations.
Chester Barnard
Wrote “The Functions of the Executive.”
Proposed a theory of the acceptance of authority (by
subordinates) as the source of power and influence for
managers.

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 The Classical Management Perspective
Today
 Contributions
Laid the foundation for later theoretical developments.
Identified management processes, functions, and skills.
Focused attention on management as a valid subject of
scientific inquiry.
 Limitations
More appropriate approach for use in traditional, stable,
simple organizations.
Prescribed universal procedures that are not appropriate
in some settings.
Employees viewed as tools rather than as resources.

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 Table 2.1: The Classical Management
Perspective

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 The Behavioral
Management Perspective
Behavioral Management
Emphasized individual attitudes and behaviors, and
group processes.
Recognized the importance of behavioral processes in
the workplace.
Hugo Munsterberg (1863–1916)
A German psychologist, considered the father of
industrial psychology, wrote “ Psychology and Industrial
Efficiency,” a pioneering work in the practice of
applying psychological concepts to industrial settings.

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 The Hawthorne Studies
Conducted by Elton Mayo and associates at
Western Electric (1927–1935)
Illumination study of changes in workplace lighting
unexpectedly affected both the control group and the
experimental group of production employees.
 Group study—the effects of a piecework incentive plan on
production workers.
 Workers established informal levels of acceptable individual output;
over-producing workers (“rate busters”) and under-producing workers
(“chiselers”).
 Interview program
 Confirmed the importance of human behavior in the workplace.

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 The Behavioral Management Perspective
(cont’d)
The Human Relations Movement
Grew out of the Hawthorne studies.
Proposed that workers respond primarily to the social
context of work, including social conditioning, group
norms, and interpersonal dynamics.
Assumed that the manager’s concern for workers would
lead to increased worker satisfaction and improved
worker performance.

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 The Behavioral Management Perspective
(cont’d)
Human Relations Movement
Abraham Maslow
 Advanced a theory that employees are motivated by a hierarchy
of needs that they seek to satisfy.
Douglas McGregor
 Proposed Theory X and Theory Y concepts of managerial beliefs
about people and work.

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 Table 2.2: Theory X
and Theory Y

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 The Emergence of Organizational
Behavior
A contemporary field focusing on behavioral
perspectives on management.
Draws on psychology, sociology, anthropology,
economics, and medicine.
Important organizational behavior topics:
Job satisfaction and job stress
Motivation and leadership
Group dynamics and organizational politics
Interpersonal conflict
The design of organizations

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 The Behavioral Management Perspective
Today
 Contributions
 Provided insights into motivation, group dynamics, and other
interpersonal processes.
 Focused managerial attention on these critical processes.
 Challenged the view that employees are tools and furthered the
belief that employees are valuable resources.
 Limitations
 Complexity of individuals makes behavior difficult to predict.
 Many concepts not put to use because managers are reluctant to
adopt them.
 Contemporary research findings are not often communicated to
practicing managers in an understandable form.

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 Table 2.3: The Behavioral Management
Perspective

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 The Quantitative Management
Perspective
Quantitative Management
Helped the World War II Allied forces manage logistical
problems.
Focuses on decision making, economic effectiveness,
mathematical models, and the use of computers to solve
quantitative problems.
Management Science
Focuses on the development of representative
mathematical models to assist with decisions.
Operations Management
The practical application of management science to
efficiently manage the production and distribution of
products and services.

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 The Quantitative Management
Perspective Today
 Contributions
 Developed sophisticated quantitative techniques to assist in decision
making.
 Application of models has increased our awareness and
understanding of complex processes and situations.
 Has been useful in the planning and controlling processes.
 Limitations
 Quantitative management cannot fully explain or predict the
behavior of people in organizations.
 Mathematical sophistication may come at the expense of other
managerial skills.
 Quantitative models may require unrealistic or unfounded
assumptions, limiting their general applicability.

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 Table 2.4: The Quantitative Management
Perspective

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 Integrating Perspectives
for Managers
Systems Perspective
A system is an interrelated set of elements functioning as a
whole.
Open system
An organization that interacts with its external
environment.
Closed system
An organization that does not interact with its
environment.
Subsystems
The importance of subsystems is due to their
interdependence on each other within the organization.

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 Figure 2.3: The Systems Perspective of
Organizations

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 Systems Perspective
Synergy
Subsystems are more successful working together in a
cooperative and coordinated fashion than working alone.
The whole system (subsystems working together as one
system) is more productive and efficient than the sum of its
parts.
Entropy
A normal process in which an organizational system
declines due to failing to adjust to change in its environment
Entropy can be avoided and the organization re-energized
through organizational change and renewal.

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 The Contingency Perspective
Universal Perspectives
Include the classical, behavioral, and quantitative
approaches.
Attempt to identify the “one best way” to manage
organizations.
The Contingency Perspective
Suggests that each organization is unique.
The appropriate managerial behavior for managing an
organization depends (is contingent) on the current
situation in the organization.

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 The Contingency
Perspective (cont’d)
An Integrative Framework
Is a complementary way of thinking about theories of
management.
Involves the recognition of current system and
subsystem interdependencies, environmental influences,
and the situational nature of management.

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 Figure 2.4: An Integrative Framework of
Management Perspectives

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 Figure 2.5: The Emergence of Modern
Management Perspectives

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 Contemporary Management Issues and
Challenges (cont’d)
 Contemporary Applied Perspectives
 William Ouchi’s “Theory Z,” Peters and Waterman’s “In Search of
Excellence”, biographies—Iacocca, Trump, Welch
 Authors: Senge, Covey, Peters, Collins, Porter, Kotter, and Hamel
 Contemporary Management Challenges
 An erratic economy that limits growth
 Management of an increasingly diverse workforce
 Employee privacy
 Technology that promotes telecommuting
 The role of the Internet in business strategy
 Operating and competing in diverse global markets
 Ethics in corporate governance and social responsibility
 Quality as the basis for competition
 The shift toward a service economy

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