The Evolution of Management Theory

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Nov 20, 2013 (3 years and 9 months ago)

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The Evolution of Management Theory

Learning Objectives

To understand how management theories
develop

To understand the impact of the environment to
management thinking

To gain insights into new management approach

Early Management Thought

Early ideas about
management strategy

Sun Tzu (770
-
476 B.C.),
The Art of War

Early ideas about
leadership

Nicol
ò Machiavelli (1469
-
1527),
The Prince

Early ideas about the
design and organization
of work

Adam Smith,
The Wealth of Nations


division of labor


Sun Tzu, Art of War

“Shang Chang Ru Zhan Chang”

“The marketplace is a battlefield”

Sun Tzu, 4
th

century BC

Management and Machiavelli

New science of management
lies in the the old art of
government

"to be a great pretender and
dissembler."

“cunning and intrigue, the
triumph of force over reason.”

"a prince" ought to have no
other aim or thought, nor select
anything else for his study,
than war and its rules and
discipline."






The Evolution of Management Theory

(Comprehensive Analysis of Management)

Systems Theory

Contingency Approach

Management Approaches

and the Environment

GENERAL

ENVIRONMENT

OPERATING

ENVIRONMENT

INTERNAL

ENVIRONMENT

SOCIAL

ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY

NEW ENTRANTS

SUPPLIER

SUBSTITUTES

CUSTOMER

COMPETITION

PRODUCTION

TECHNOLOGY

STRUCTURE

INPUTS

The Classical Approach

Environment

in ca1890


Industrial revolution


Autocratic management was the norm



Science" as a solution to the inefficiencies


and injustices of the period


Idea of interchangeable parts

The
classical approach

(ca1890) to

management is a management approach that

emphasizes organizational efficiency to

increase organizational success.

The Classical Approach

Scientific Management

Frederick W. Taylor

Frank and Lillian Gilbreth

Henry Gantt

Bureaucratic Management

Max Weber

Administrative Management

Henri Fayol



Taylor’s Four Principles of Scientific Management

1.
Scientifically study each part of a task and
develop the best method of performing the
task.

2.
Carefully select workers and train them to
perform the task by using the scientifically
developed method.

3.
Cooperate fully with workers to ensure that
they use the proper method.

4.
Divide work and responsibility so that
management is responsible for planning
work methods using scientific principles and
workers are responsible for executing the
work accordingly.

“Now one of the first requirements for
a man who is fit to handle pig iron as a
regular occupation is that he shall be
so stupid and so phlegmatic that he
more nearly resembles in his mental
makeup the ox than any other type”






-

Frederick Taylor

Key Characteristics of Weber’s Ideal Bureaucracy

Specialization of labor

Formal rules and procedures

Impersonality

Well
-
defined hierarchy

Career advancement based on merit

Fayol’s 14 Principles of

Administrative Management

1.
Division of work

2.
Authority

3.
Discipline

4.
Unity of command

5.
Unity of direction

6.
Subordination of
individual interest to
the general interest

7.
Remuneration

8.
Centralization

9.
Scalar chain

10.
Order

11.
Equity

12.
Stability and
tenure

13.
Initiative

14.
Esprit de corps

Planning, Organizing, Commanding, Coordinating, Controlling

What are the limitations of the
Classical Approach??

The Behavioral Approach

The
behavioral approach

(ca 1910) to

management is a management approach that


emphasizes increasing organizational

success by focusing on human variables

within the organization.

Environment

in ca1910


The Newtonian science that supported "the one best way" of
doing things was being strongly challenged by the "new
physics" results of Rutherford and Einstein


In the work place there were strong pressures for shorter
hours and employee stock ownership.


As the effects of the 1929 stock market crash and following
depression were felt, employee unions started to form

Behavioral Perspective

The Hawthorne Studies

Human Relations
Approach

Employee motivation


Abraham Maslow

Leadership style


Douglas McGregor

Hawthorne Effect:

The discovery that paying special
attention to employees motivates them
to put greater effort into their jobs.

(from the Hawthorne management studies,
performed from 1924


1932 at Western Electric
Company’s plant near Chicago)

Physical Needs

Need for Security

Need for Social Relations

Need for Self Esteem

Self
-
Actualization

Maslow’s Hierarchy of
Needs

McGregor’s Theory X and Theory Y

Leaders and managers who hold
Theory X

assumptions
believe that employees are inherently lazy and lack
ambition.

A negative perspective on human behavior.

Leaders and managers who hold
Theory Y

assumptions
believe that most employees do not dislike work and
want to make useful contributions to the organization.

A positive perspective on human behavior.

What are the limitations of the
behavioral approach?

The Management Science Approach

The
management science approach

(ca1940)

is a management approach that emphasizes

the use of the scientific method and

quantitative techniques to increase

organizational success.

Environment

in ca1940


Application of OR in solving complex problems in
warfare (WWII)


Significant technological and tactical
breakthroughs


Interest in manufacturing and selling after WWII


The System Approach

The
system approach (ca 50

s
-
60

s)

to

management is a management approach

based on general system theory
--
the theory

that to understand fully the operation of an

entity, the entity must be viewed as a system.

This requires understanding the

interdependence of its parts.

Environment

in ca1950

s to 60

s



Growing quality consciousness


Total Quality Management


The Open Management System

GENERAL

ENVIRONMENT

OPERATING

ENVIRONMENT

SOCIAL

ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY

NEW ENTRANTS

SUPPLIER

SUBSTITUTES

CUSTOMER

COMPETITION

PLANNING, ORGANIZING,

INFLUENCING, CONTROLLING

INPUT


P剏䍅RS


何呐啔

The Contingency Approach

The
contingency approach (ca 70

s)

to

Management is a management approach that

Emphasizes that what managers do in

practice depends on a given set of

circumstances
--
a situation.

Environment

in ca1970

s



Emergence of new companies

Apple



Emergence of new products,

IBM PC


Triangular Management

Triangular management

is a management

approach that emphasizes using information

from the classical, behavioral, and manage
-

ment science schools of thought to manage

the open management system.

Triangular
Management Model

BEHAVIORALLY BASED INFORMATION

GENERAL
ENVIRONMENT
OPERATING
ENVIRONMENT
SOCIAL
ECONOMIC
POLITICAL
LEGAL
TECHNOLOGY
NEW ENTRANTS
SUPPLIER
SUBSTITUTES
CUSTOMER
COMPETITION
PLANNING, ORGANIZING,
INFLUENCING, CONTROLLING
INPUT

PROCESS

OUTPUT
GENERAL
ENVIRONMENT
OPERATING
ENVIRONMENT
SOCIAL
ECONOMIC
POLITICAL
LEGAL
TECHNOLOGY
NEW ENTRANTS
SUPPLIER
SUBSTITUTES
CUSTOMER
COMPETITION
PLANNING, ORGANIZING,
INFLUENCING, CONTROLLING
INPUT

PROCESS

OUTPUT
Type Z Organization

(Theory Z by Ouchi 1981)

Theory Z (ca 80

s)

suggests that involved workers
are the key to an increase in productivity and it
offers offers ways to manage (collective decision
making, slow evaluation and promotion, and
holistic concern for people) so that they can work
together more effectively.


Environment

in ca1980

s


Slow

American

productivity

improvement


Rise

of

Japanese

companies


Japanese

management

may

offer

solutions

to

this

problem



Theory Z

“Involved workers

are the key to an increase in
productivity.”


From “Theory Z” by William Ouchi, 1981

Chaordic Organization (Chaos Theory)

(Hock, Dee,1999)

Chaos theory (ca 90

s)

in management
recognizes that events indeed are rarely
controlled. Blending chaos with order


Environment

in ca1990

s


Start

of

Internet

age


Highly

competitive

environment


Emergence

of

communications

technologies


Emergence

of

new

work

practices

(virtual

teams,

network

organizations)



Chaordic Organizations

Purpose

Principles, People, and Concept

Structure and Practice



Clarity of purpose and
shared values


Operate through
network of equals, not
hierarchies

From “Birth of the Chaordic Age” by Hock, D. 1999

How about Modern Management
Approach?

Environment In the New Millennium

Environment

in the millenium


Information and electronic age


Information and knowledge is going to be readily
available to us all


Information speed through Internet


The future is going to be dominated by our need to
understand systems.



The Learning Organization Approach

The
learning organization approach

to
management

is the management approach
based on an organization anticipating
change faster than its counterparts to have
an advantage in the market over its
competitors.


From “The Fifth Discipline” by Peter Senge, 1990

Managerial Approach to Learning
Organization

Managers must create an environment conducive to
learning

Managers encourage the exchange or information
among organization members

Managers promote

systematic problem solving

Experimentation

learning from experiences and past history

learning from experience of others

transferring knowledge rapidly throughout the organization

From “The Fifth Discipline” by Peter Senge, 1990

Building a Learning Organization

System Thinking

Every organization member understands his or her own job and
how the jobs fit together to provide finals products to the
customer

Shared vision

All organization members have a common view of the purpose of
the organization and a sincere commitment to accomplish the
purpose

Challenging of the mental models

Organization members routinely challenge the the way business
is done and the thought processes people use to solve
organizational problems

From “The Fifth Discipline” by Peter Senge, 1990

Building a Learning Organization

Team learning

Organization members work together, develop solution to new
problems together, and apply the solutions together.

Working as teams rather than than individuals will help the
organization gather collective force to achieve organizational
goals

Personal mastery

All organization members are committed to gaining a deep and
rich understanding of their work

Such an understanding will help organizations to reach important
challenges that confront them

From “The Fifth Discipline” by Peter Senge, 1990

Building a

Learning

Organization

System thinking

Personal mastery

Team Learning

Learning Organization Approach

Shared Vision

Challenging of

Mental models

(Systems Approach)

(Chaordic Organization)

(Classical/Management

science)

(Theory Z/Behavioral)

(Theory Z/Behavioral)

Business Process Management Approach

The
business process management approach

to management
is a method of efficiently aligning an organization with the
wants and needs of clients. It is a holistic management
approach that promotes business effectiveness and efficiency
while striving for innovation, flexibility and integration with
technology. As organizations strive for attainment of their
objectives, BPM attempts to continuously improve processes
-

the process to define, measure and improve your processes


a

process optimization' process.


This is actually a slow advance in process management:


Record Management


Workflow
-

1970


Business Process Re
-
engineering (BPR)
-

1990


Business Process Management (BPR)
-

2000


Western Management Theories

Is there an Asian Management Theory??

What is business management

the Asian way?

Business tend to be small scale

Time has no beginning and end

Individualism is less relevant; managerial beliefs shift
towards the autocratic end

Conformity to socially acceptable behaviors is done
through morality (e.g losing face)

Oriental managers rely less on interpersonal
confrontations

Managerial decisions consider effects on othe rpeople

Control of performance is less formal

Maintaining and developing
guanxi

(connection and
relationship

*
From World Executive Digest by Redding & Martyn, 1984


“Will Western Management

work in Asia?”*

“Values and attitudes affect but do not invalidate the
transfer of American management concepts…
Consequently, when we wish to transfer an effective
device from one culture to another, careful attention
should be given to underlying premises…?

“Tools of management remain the same.”**

“Economic and business philosophy are however,
different.”**

Combination of general management, functional
management, and communal organization and
management..**


*From World Executive Digest by William Newman, 1984

**From World Executive Digest by Sixto Roxas, 1981

Photo from www.aim.edu.ph

Is there a Filipino Management
Theory??

Are Western theories applicable in
Philippine setting?


Are Western Theories Applicable in
Philippine Setting?


The models and ideal types taught in Western
-
oriented
MBA programs are based on certain assumptions, many
of which are invalid in the Philippines
.

Although organizations here have most of the structures
and formal procedures of Western business, actual day
-
to
-
day business processes and interactions necessarily
proceed within the matrix of Filipino culture and values.

Thus,
the need for the Westerner to go "the extra mile" to
understand what's really going on and adapt a culturally
sensitive style of doing business
.”






-

Clarence Henderson,






Henderson Consulting International

What is Pinoy Management Theory??

“No one Management Theory or Style.”

Under the formal organization are:

“Informal organization”

“Battlefield of behavioral styles among managers and
employees”

“Unknown cultural ambiance among peoples and
systems”

From “Pinoy Management” by Ernesto Franco, 1986

Weaknesses of Pinoy Workers

Walang bilib sa sarili

(No confidence in oneself)

Dikdik sa Colonial Mentality

(Indoctrinated with
Colonial Mentality)

Masyadong relaks

(Overly relaxed)

Ningas
-
cogon

(Not a follow
-
up people)

Holiday mentality

Lack of managerial and organizational
effectiveness

Lack of self
-
reliant tenacity

From “Pinoy Management” by Ernesto Franco, 1986

Pinoy Management

Kailangan may No. 2 (There is a need for No.2)

Tsismis machine (Grapevine Machine)

Kailangan may Hatchet Man (There is need for a Hatchet
Man)

Be an expert on timing

Lumayo sa madalas matalo (Avoid losers)

Gawin mong personal (Make it personal)

NBA Style: One
-
on
-
one

Power play. Laban (Fight)

Be situational and contingent

Umarte kang parang intelihente. Iyong laging nag
-
iisip

Body language ang importante (Body language is important)

Pag sinabing “No”, dapat “No” talaga



From “Pinoy Management” by Ernesto Franco, 1986

Pinoy Management Approaches

Management by “
Kayod”

(Realist Manager)

He wants quick action

He’s an autocrat

He is
sigurista

He has gut feel

He knows how to use people

Management by “Libro” (Idealist Manager)

He is a thinker; technocrat;
mabusisi
;
may sistema

Matigas and ulo

From “Pinoy Management” by Ernesto Franco, 1986

Pinoy Management Approaches

Management by “Lusot” (Opportunist Manager)

He is
galawgaw

Walang konsensiya

Mahilig sa lusot (
Loves to get by)

Mahilig sa ayusan

Ugnayan
-
Management
(The Hybrid)

Has balance

Contingency management style

He is solid

Marunong pumili

(Chooses well)

Pambihira talaga (Exceptionally gifted)

From “Pinoy Management” by Ernesto Franco, 1986

END