T. 2 Development. Schools

8/3/2019 T. 2 Development. Schools

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Theme 2. EVOLUTION OF MANAGEMENT SCHOOLS

1. HISTORIC DEVELOPMENT

2. CLASSICAL APPROACH

3. BEHAVIORAL APPROACH

4. SYSTEMS THEORY

5. QUANTITATIVE APPROACH

HISTORIC DEVELOPMENT

Management is as old as human society, but until the modern era, little was done to establish a

body of knowledge about how to manage. Several thousand years of actual management practice preceded

management theory. The industrial revolution compelled us to address management for the first time as an

independent subject. Then, as complex organizations emerged in the early 1900s, scholars began to turn

their attention to management theory. Following World War II, the industrialized nations embraced

management research, and business leaders became interested in graduates skilled in management

concepts. This focus led to the growth of business schools and management as a field of study.

Recently, a tremendous interest in management techniques has generated a proliferation of research

and many publications, including educational texts. Popular books on management dominated nonfiction

best-seller lists during the past decade, and business magazines such asFortune andBusiness Weekare soldworldwide. This deluge of new information prompted management writer Harold Koontz to suggest that

we have created a "management theory jungle" of conflicting approaches and concepts.4 Figure 2-1 outlines

the major approaches to management theory, most of their chief proponents, and the theories arising from

these approaches.

Heroic leaders who conquered and ruled vast empires capture our imagination. We are astounded

by the accomplishments of Alexander the Great. The Athenian statesman and general Pericles established a

golden age in Athens founded on successful trade and commerce. And the Roman Caesars, some famous

and some infamous, forged an immense empire still reflected in today's political boundaries. What often

escapes our attention is that great leaders need tremendous managerial skills. Alexander did not simply

march halfway across the known world with sword and shield in hand. Pericles did not create a wealthy

state by luck alone. The Romans did not control a complex empire for hundreds of years withoutexceptional management systems. But the remnants of these civilizations give us little of a concrete nature

to draw upon for management theory.

The organizations of antiquity are only shadows of the enormous corporations we now manage.

Management techniques of past eras would be insufficient today. We could not rely on the wisdom of

Solomon or the zeal of Caesar to control our destinies. Yet these leaders and many other great individuals

have given us a foundation of management.


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CLASSICAL APPROACH

Unprecedented growth during the industrial revolution prompted three types of management

theory. The first, called scientific management, focuses on production efficiency. The second, calledbureaucratic theory, is concerned with structuring organizations. The third, labeled administrativemanagement theory, seeks to establish universal principles of management. Collectively, these are known

as the classical approach to management.Scientific Management

Scientific management - a major approach to management advocated by Frederick W. Taylor that

focuses on standardized work methods and rational selection of employees coupled with training and job

development.

At the beginning of this century, the industrial process was little more than a collection of

traditional skills. There was a "factory" system both in Europe and in North America that exploited human

labor and sought only the greatest output. Assembly-line techniques had not yet been developed, and

workers were treated rather like the machines they operated. Jobs were almost randomly assigned, and

employees worked very long hours. Techniques of work had advanced little sinceAdam Smith inspired theconcept ofspecialization in his famous 1776 economic treatise The Wealth of Nations6Smith explainedhow production of straight pins could be increased by assigning different workers to do different tasks. One

person would specialize in drawing out wire, another would straighten it, another would cut it into pinlengths, a fourth would grind points, and others would attach pin heads, package, and stack the product. By

having individuals specialize instead of each making pins one at a time, a company could produce

thousands rather than dozens of pins a day. Specialization resulted in the division of labor, whereby taskswere broken down into narrowly defined jobs. These were repetitious, but highly efficient.

Frederick Winslow Taylor(1856-1915) revolutionized industrial processes by making a systematicstudy of work and scientifically developing methods of production. Taylor is called the "father of scientific

management" because he created a mental revolution about how to get things done in organizations.

Scientific management became a method of maximizing efficiency by studying individual jobs and

establishing optimal standards of performance. Workers were then hired to fill those jobs based on their

skills.

Bureaucratic Management

Bureaucracy - a model of organization based on defined positions, formal authority, and a regulated

environment that includes well-documented rules, policies, and procedures.


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The term bureaucracy evokes images of the federal government, a large, inefficient organization,and lots of red tape. Indeed, the word bureaucracy has become synonymous with bloated organizations.

Most bureaucracies also have rather inflexible rules and a preponderance of regulations. Still, a large part

of the industrialized world is modeled on bureaucracy, and basic principles of bureaucratic management

dominate the way we think.

Max Weber (1864-1920) developed the bureaucratic model as a rational method of structuring

complex organizations. He sought to define an ideal system where positions were well defined, the divisionof labor was clear, objectives were explicit, and a clear chain of authority existed.

Managing organizations that consist of thousands of individuals in hundreds of locations would be

impossible without a rational system, and although we tend to avoid the label, bureaucracy has provided

the organizational mechanisms needed to build large companies like GM, Exxon, and IBM. The

connotations of inflexibility, coldness, and dehumanization were not intended by Weber when he

introduced his bureaucratic model.

If we view rational organization in Weber's terms, there is nothing wrong with the concept of

bureaucracy. Most of us prefer to have clear objectives, well-structured authority, and formal guidelines.

Weber also believed that employment decisions should be based on merit so that more productive and

skillful people would rise to the top. The superiority of bureaucratic organization rests on dinning positions

and then filling them with qualified individuals. Weber was perhaps the first to address the problems of

establishing a productive organization, and his ideas have inspired research in contemporary organizational

theory.

The bureaucratic system has been criticized as inhumane because it first specifies jobs and then

slots human beings into them. Bureaucracies have also been attacked for their propensity to "formalize,"

and thus "complicate," everything through rules and regulations. Recently, they have been charged with

throttling creativity, and our current emphasis on innovation fosters a cultural bias against bureaucratic

systems.

Administrative Management

Functional perspective - an approach that explains managers' responsibilities and activities

according to general principles of management for planning, organizing, leading, and controlling.

Perhaps the most influential classical theory is administrative management. Administrative

management emphasizes management principles from a functional perspective. The significantcontribution of administrative management has been the definition of the general duties, or functions, of

managers within a framework of clearly articulated guidelines, or principles.

Henri Fayol(1841-1925), a French engineer who became managing director of one of France's

largest coal mining businesses, was the first to propose a comprehensive list of administrative management

principles. Today we generally recognize four functions of management distilled from Fayol's original list:

planning, organizing, leading, and controlling.

BEHAVIORAL APPROACH

Behavioral approach - an approach that explains how managers influence others to achieve organizational

objectives through human relations and motivation.

Three distinct eras are associated with behavioral concepts. The first was the 1920s, when researchinspired what we now call the human relations movement. The second was die postWorld War II period,when theorists focused on human needs and motivation. The third era is occurring now, as we search forintegrative concepts that satisfy the dual necessities of meeting employee needs and improving

productivity.

Human Relations Movement

The human relations movement focused on individuals working in group environments. Early

contributors to the movement concluded that by improving workers' satisfaction with their jobs, companies

could improve their performance: Thus managers were encouraged to be more cooperative with workers, to

upgrade the social environment at work, and to reinforce individual employees' self-images. Several

pioneers in human relations made contributions that are still influencing the way we manage today.

Prominent among them is Hugo Munsterberg(1863-1916), a German psychologist and philosopher often

regarded as the founder of applied psychology.

Human Needs and Motivation


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The second era of behavioral research emphasized motivation. This research focused on

employees' personal needs and how those needs influenced performance. Contributions to motivation

theory by several important scholars immediately after World War II inspired greater efforts to understand

individual behavior in work environments. This focus led to a field of study called organizational

behavior. We will introduce only two noteworthy motivation theorists here.Douglas McGregor(1906-1964) brought a fresh perspective to management by challenging leaders

to think of employees as responsible, capable, creative individuals. McGregor felt that throughout most of

human history leaders had treated the people under them as irresponsible and lazy. He called this approachto management Theory X. Theory X assumptions commit managers to a pessimistic view of human nature,

and Theory X managers tend to be autocratic, control-oriented, and distrustful. McGregor identified a

second perspective, Theory Y, that reverses these assumptions. Theory Y managers view employees in

optimistic terms as individuals who want to be challenged by their work, who prefer self-control, and who

are capable of responsible, independent judgment. McGregor's assumptions about Theory X and Theory Y

management are outlined in Exhibit 2-3.

Abraham Maslow (1908-1970), a contemporary of McGregor, based his theory of: human behavioron the idea that individuals work to satisfy unfulfilled needs. He suggested a hierarchy of needs through

which everyone progresses. Thus a person may initially work to earn money for food and shelter, but once

these fundamental needs are met, the employee will require more complicated rewards, such as respect,

recognition, and self-fulfillment.

EXHIBIT 2-3 McGregor's Assumptions on Theory X and Theory YTheory X Most human beings dislike work and avoid it whenever possible; they must be forced,

threatened, and directly controlled in order to achieve organizational goals. Most people are lazy, prefer to

be directed, shun responsibility, have little ambition, and want security. The average human being avoids

leading and wants to be led.

Theory Y Work is natural, and most people prefer the physical and mental effort of working.

Commitment to objectives is also a natural state for most individuals, particularly when rewards are

associated with achievement. Human beings can exercise self-control, prefer self-direction, and have the

capacity for innovation and creativity. Under most reasonable circumstances, the majority of people will

accept responsibility, and many individuals seek leadership rather than the security of being led.

Integrative Concepts of Organizational Behavior

Integrationist approach - a theorist who integrates concepts of several schools of management thought to

suggest improved management practices.

Scholars have yet to reconcile the imperatives of the various concepts and perspectives on human

nature with the practicalities of managing a complicated organization. Early human relations research was

value-laden and more philosophical than practical. Classical theories, though practical, generally ignored

the human side of enterprise. Behavioral scientists who followed McGregor and Maslow expanded their

concepts and have attempted to integrate human behavior concepts with the practical necessities of

managing organizations. These integrationists, among them Victor Vroom, Lyman Porter, and EdivardLawler; have taken McGregor's ideas, applied Maslow's need concepts, and studied how managers can use

scientific techniques to achieve results. They have proposed methods of instituting systematic change inorganizations, resolving conflict, achieving objectives through motivated employees, and improving group

dynamics for greater productivity.

Integration and the Global Perspective

Given the global structure of many organizations and the intensity of international competition, it has also

become important to understand global management concepts. Hence, some integrationists seek to combine

the best of Western management techniques with those practiced overseas. Most notably, many Japanese

management concepts have been integrated into American practice. McGregor's use of "X" and "Y"

identifiers for management styles has been expanded to include Theory Z, which has become a convenientlabel for Japanese management techniques as practiced in the United States.

William Ouchi introduced Theory Z in 1981 to describe American adaptations of Japaneseorganizational behavior. His theory is based on a comparison of management in Japanese organization with

management in American firms. Exhibit 2-4 compares these two types of organizations. Ouchi recognizedthat cultural differences between the two nations prevent American managers from adopting Japanese

techniques without modification. For example, Americans are highly mobile and often seek opportunities


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and career advancement by changing employers. Japanese workers, in contrast, tend to

EXHIBIT 2-4 Contrasts between American and Japanese OrganizationsAMERICAN

Mobile Employees.Employees seek opportunities, advancement, and careerchanges by moving betweenemployers and organizations.

Personal Decision Making.Americans tend to rely on individual judgment and prefer to make decisions

unilaterally, either as managers or as individuals controlling their own destiny.Individual Responsibility.Americans prefer taking personal initiatives and shouldering responsibilities asindividuals rather than in groups.

Rapid Advancement.Employees gain economically and socially from rapid advancement, with a premiumon success as measured by promotions.

Specialization in Careers. American organizations are founded on specialization of skills and labor;employees make career choices and follow specialized career paths.

Focused Concern for Employees.American firms tend to view employees in their roles at work, payingless attention to the "complete" profile of the individual: family, social issues, personal health, and general

well-being.

JAPANESE

Lifetime Employment.Japanese workers tend to make a lifetimecommitment to their organizations and, inturn, organizations assume responsibility for lifetime employees.

Collective Decision Making.Employees and managers seek consensus on decisions and endorse collectivedecision-making processes.

Group Responsibilities. Japanese prefer group processes and accept group responsibilities through

conciliatory communications: group rewards are not uncommon.

Slow and Systematic Advancement.Employees rise slowly through established ranks; when opportunitiesarise for promotion, the loyalty and harmonious behavior of applicants are considered.

General Career Perspective.Japanese organizations do not emphasize specialization but prefer flexibilityand internal training so they can reassign personnel and develop skills among those who are members of

the organization. Careers are linked to organizations, not professions.

Holistic Concern for Employees. Japanese organizations take account of employees beyond the workenvironment and often aid in providing housing, day-care services, and mental and physical health

counseling, among other things; employees are considered to be integral members of the total organization.

Still, Ouchi discovered similarities between practices in America's leading firms and those in

Japan. For example, at Hewlett-Packard and IBM, long-term employment has been the norm, even though

it falls short of a lifetime commitment. Perhaps the most important element in Theory Z is its combination

of human relations concepts and scientific management techniques. The Type Z company endorses

collective responsibility, a pervasive concern for employees, and a commitment to participative decision

making.

SYSTEMS THEORY

Most managers recognize that the era of industrialization is being replaced by one based on information

technology. Managers are studying new ways to use information technologies to improve the competitive

profile of their organizations. A broader view of management has evolved, encompassingsystems theoryand contingency management.

Systems Theory

Managers have discovered that our rapidly changing society requires a broader perspective about

organizational behavior than one limited to work groups or individual organizations. Decisions made in a

single work group affect other groups, organizations affect other organizations, and society as a whole is a

system of organizations. This wider perspective alters how managers view their responsibilities and make

decisions. They now need to adopt asystems approach.

A system is a collective association of interrelated and interdependent parts. Even if it seemsobvious that organizations are systems, managers have too often defined their roles within singular "parts"

without viewing the "whole" of their enterprise. Just as the human body is a system with organs, muscles,


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bones, a nervous system, and a consciousness that links all the parts together, an organization is a system

with many interdependent parts that are linked by the social dynamics of human beings working together.

The systems approach provides a frame of reference for managers who must make decisions in a

constantly changing environment. Decisions should be approached with consideration for the total

organization and how it fits into a society of other organizations. Managers not only influence their own

systems but also affect other managers and their systems. In a hospital, for example, decisions in support

areas such as X-ray departments and laboratory services affect the scheduling of patient care by ward

nurses.Systems theory has also led to research about the general principles of management. Contrary to

Taylor's belief, there is no "one best way" of doing anything because human behavior changes with

circumstances, and circumstances change with the dynamics of internal and external systems.

Therefore, instead of searching for absolute theories with universal applications, scholars have begun to

explore contingency management as a method of understanding systems dynamics.

Contingency Management

Contingency management - an approach to management that suggests leadership behavior should

be adapted to accommodate different situations, or, alternatively, leaders should be assigned to situations

that best fit their leadership styles.

The problem with the universal principles of management promulgated by early theorists is that

few principles really are universal. Contingency management has emerged to address this dilemma.

Advocates of contingency management argue that managers should adapt their leadership behavior to

accommodate different situations or, alternately, should be assigned to situations that suit their leadership

styles. Rather than suggest "one best way" to manage, contingency management implies that there are

many effective ways to behave as managers, each depending on the circumstances of the work

environment.

QUANTITATIVE APPROACH

Quantitative management - an approach to management based on decision theory, use of

statistical techniques for problem solving, and application of mathematical models to organizational

processes.

The move toward an information society has fostered extraordinary changes in quantitative

management techniques. These are the techniques used in numerical analysis of organizational problems,

statistical studies, and mathematical model building to improve management decisions. One area of

quantitative management is called management science, not to be confused with Taylor's "scientific

management." Management science uses mathematical models for quantified decision making. Its methods

involve rather sophisticated techniques, extensive use of statistics, and complex decision-making models.

For example, a company will use consumer survey information to model probabilities of demand for its

products or services, and on that basis will determine how much to produce. This will, in turn, trigger de-

cisions about hiring employees, opening sales offices, contracting with suppliers for materials, and so on.

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T. 2 Development. Schools