BOH4M – Grade 12 Business Leadership – Management – Past to Present

 

Chapter 2: Management – Past to Present

 

  • History of management theory has been grouped into five eras of development:
    1. Classical Management Approaches: based on the rationale that people will work in a manner most economically beneficial to themselves  (beginning of the 20th century – 1900s and 1910s))
    2. Behavioural Management Approaches: focused on a more progressive workplace where employee morale and relationships are important

(1920s and 1930s))

    1. Quantitative Management Approaches: focused on producing goods quickly and achieving greatest output possible

(1940s and 1950s))

    1. Modern Management Approaches: examination of organizations and their interactions with their environment

(1960s and 1970s)

    1. Continuing Management Themes: focused on issues of quality, excellence, globalization, learning, technology, and cross-cultural aspects of management

(1980s to the present)

 

Classical Approaches to Management

 

  • Includes three major branches: Scientific management school, Administrative principles, and Bureaucratic organization

 

1a/ Scientific Management (Taylor)

  • Guiding action principles:
  • Develop rules of motion, standardized work implements, and proper working conditions
  • Carefully select workers with the right abilities for the job
  • Carefully train workers to do the job and provide proper incentives
  • Support workers by planning their work and removing obstacles

 

1b/ Scientific Management (The Gilbreths)

  • Motion study: Science of reducing a job or task to its basic physical motions. Eliminating wasted motions improves performance

2a/ Administrative Principles (Fayol) 

  • Five rules or duties of management:
    1. Foresight: Complete a plan of action for the future
    2. Organization: Provide and mobilize resources to implement the plan
    3. Command: Lead, select, and evaluate workers to get the best work toward the plan
    4. Coordination: Fit diverse efforts together, ensure information is shared and problems solved
    5. Control: Make sure things happen according to plan and to take necessary corrective action
  • Believed that management could be taught
  • Set forth a number of principles to guide managerial action:
  • Scalar chain: Should be a clear, formal chain of command running from the top to the bottom of the organization
  • Unity of command: A person should receive orders from only one boss
  • Unity of direction: One person should be in charge of all activities with the same performance objective

 

2b/ Administrative Principles (Follett)

  • Groups are mechanisms through which individuals could combine their talents for the greater good
  • Organizations are cooperating “communities” of managers and workers
  • Manager’s job is to help people in the organization cooperate and achieve an integration of interests
  • Forward looking management insights:
    • Employee ownership creates sense of collective responsibility (precursor of employee ownership and profit sharing)
    • Business problems involve variety of inter-related factors (precursor to system thinking)
    • Private profits relative to public good (precursor to managerial ethics and social responsibility)

 

 

 

 

 

 

3. Bureaucratic Organization (Weber) 

  • Bureaucracy: Rational and efficient form of organization founded principles of logic, order, and legitimate authority
  • Defining characteristics of bureaucratic organizations:
    • Clear division of labour
    • Clear hierarchy of authority
    • Formal rules and procedures
    • Impersonality
    • Careers based on merit
  • Possible disadvantages of bureaucracy:
    • Excessive paperwork or “red tape”
    • Slowness in handling problems
    • Rigidity in the face of shifting needs
    • Resistance to change
    • Employee apathy

 

 

Behavioural (Human Resource) Approaches to Management

 

Hawthorne studies 

  • Took place at the Western Electric Company between 1924-1932
  • Initially researchers investigated how economic incentives and physical conditions (lighting) effected worker output
  • No consistent relationship found. Determined that unforeseen “psychological factors” influenced results
  • Directed attention toward human interaction in the workplace

 

  • Relay assembly test-room studies (Mayo)
    • Manipulated levels of worker fatigue to access impact of output
    • Productivity increased regardless of changes made (number and length of rest periods, varying workdays/workweeks)
    • New “social setting” created in test-room accounted for increased productivity. Two factors of special importance:
    1. Group atmosphere – Workers shared pleasant social relations and wanted to do a good job
    2. Participative supervision – Workers made to feel important, given a lot of information, and asked frequently for their opinion

 

  • Bank wiring room studies
    • Further examination of employee attitudes, interpersonal relations and group processes found that:
  1. Same things (such as work conditions, wages) could be sources of satisfaction for some workers and dissatisfaction for others
  2. People restricted their output in order to adhere to group norms

 

  • Lessons of the Hawthorn Studies:
    • Social and human concerns are keys to productivity
    • Hawthorne effect: People who are singled out for special attention tend to perform as anticipated, merely because of expectations created by the situation
  • Studies contributed to the emergence of the human relations movement: Managers using good human relations will achieve productivity 
  • Set the stage for the field of organizational development: Study of individuals and groups in organizations

 

Abraham Maslow’s theory of human needs

  • A need is a physiological or psychological deficiency a person wants to satisfy
  • Maslow identified five levels of human needs. They are:

5. Self-actualization (grow, use abilities to fullest)

4. Esteem (respect, prestige, recognition)

3. Social (love, affection, sense of belonging)

2. Safety (security, protection, stability)

1. Physiological (food, water, physical well-being)

 

  • His theory is based on two underlying principles:
  • Deficit principle: A satisfied need is not a motivator for behaviour
  • Progression principle: A need becomes a motivator once the preceding lower-level need is satisfied
  • Maslow’s theory implies that managers who help people satisfy their important needs at work will achieve higher productivity

 

 

 

 

McGregor’s Theory X and Theory Y 

 

Theory X assumes workers: Theory Y assumes workers are:

Dislike work – Willing to work

– Lack ambition – Imaginative and creative

– Are irresponsible – Willing to accept responsibility

– Prefer to be led – Capable of self-direction

 

  • Managers who hold either set of assumptions can create self-fulfilling prophecies: Through their behaviour, create situations where subordinates act in ways that confirm original expectations
  • Theory X managers create situations where workers become dependant and reluctant. Theory Y managers create situations where workers respond with initiative and high performance

 

Argyris’s theory of adult personality

  • Management practices in traditional and hierarchical organizations inhibit worker maturation and are inconsistent with the mature adult personality
  • His advice is to expand job responsibility, allow more task variety, adjust supervisory styles to allow more participation and promote better human relations
  • Managers who treat people as responsible adults will achieve the highest productivity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quantitative Approaches to Management

 

  • Management science (operations research) foundations:
    • Scientific application of mathematical techniques to management problems
    • Techniques and applications commonly used include: mathematical forecasting, inventory modeling, linear programming, queuing theory, network models, and simulations
  • Applied Quantitative analysis today:
    • Use of staff specialists to help managers apply techniques
    • Recent software developments make these techniques more available through easy-to-use applications for desktop and handheld personal computers
    • Good judgment and appreciation for human factors must accompany use of quantitative analysis

 

Modern Approaches to Management

 

Systems Thinking

  • Organizations as systems: Collection of interrelated parts that function together to achieve a common purpose
  • Subsystem: A smaller component of a larger system
  • Open systems: Organizations that interact with their environments in the continual process of transforming resource inputs into outputs

 

Contingency thinking

  • Tries to match managerial responses with problems and opportunities unique to different situations, especially individual or environmental differences
  • No “one best way” to manage. Appropriate way to manage depends on the situation

 

 

 

 

 

 

 

 

Continuing Management Themes

 

Quality and performance excellence

  • Managers and workers in progressive organizations are quality conscious
  • Quality provides competitive advantage
  • Total quality management (TQM) is a comprehensive approach to build quality into all aspects of operations
  • Quality must be maintained at each point of the value chain: Sequence of activities that transform materials into finished products
  • Closely aligned with the pursuit of quality, is management commitment to performance excellence. Includes attributes such as:
    • A bias toward action
    • Closeness to the customer
    • Autonomy and entrepreneurship
    • Productivity through people
    • Hands-on and value-driven
    • Sticking to the knitting (focus on what the organization does best)
    • Simple form and lean staff
    • Simultaneous loose-tight properties (flexibility and control)

 

Global awareness

  • Pressure for quality and performance excellence is created by a highly competitive global economy
  • Continuing efforts of businesses around the globe to transform themselves into world-class operations
  • Adoption of Theory ZJapanese management models (Ouchi):
    • Long-term employment
    • Slower promotions and more lateral job movements
    • Attention to career planning and development
    • Consensus decision making
    • Emphasis on teamwork and employee involvement

 

 

 

 

 

 

Learning Organizations

  • Contemporary businesses must learn to become learning organizations: A organization that continuously changes and improves using the lessons of experience
  • Senge identifies the following five disciplines or core ingredients of a learning organization:
  1. Mental models – Everyone sets aside old ways of thinking
  2. Personal mastery – Everyone becomes self-aware and open to others
  3. Systems thinking – Everyone learns how the organization works
  4. Shared vision – Everyone understands and agrees to a plan of action
  5. Team learning – Everyone works together to accomplish the plan
  • Learning organization success depends on:
    • A culture that emphasizes sharing, teamwork, empowerment, participation, and learning
    • Leadership that sets an example by embracing change and communicating enthusiasm for solving problems and growing new opportunities

 

21st Century Leadership

  • Today’s managers have to excel like never before to meet the expectations held of them and the organizations they lead
  • Managers must be global strategists, masters of technology, inspiring leaders, and models of ethical behaviour
  • Success in turbulent times comes only through learning and continuous improvement