The Evolution of Management

Thinking
CHAPTER 2
 Learning Objectives

 Understand how historical forces influence the

practice of management.
 Identify and explain major developments in the
history of management thought.
 Describe the major components of the classical
and humanistic management perspectives.
 Discuss the management science perspective
and its current use in organizations.

2 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Learning Objectives (contd.)

 Explain the major components of systems

theory, the contingency view, and total quality
management.
 Describe the learning organization and the
changes in structure, empowerment, and
information sharing that managers make to
support it.
 Discuss the technology-driven workplace and
the role of outsourcing, supply chain
management, enterprise resource planning,
knowledge management systems, and customer
relationship management.

3 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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

4 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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

5 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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

6 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Management Perspectives Over Time

Exhibit 2.1

7 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Classical Perspective: 3000 B.C.

● Rational, scientific approach to

management – make organizations
efficient operating machines
● Scientific Management
● Bureaucratic Organizations
● Administrative Principles

8 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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.

9 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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

10 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Bureaucratic 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

11 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Characteristics of Weberian Bureaucracy

Division of labor
with Clear definitions of
authority and responsibility
Personnel are selected
and promoted based Positions organized
on technical in a hierarchy of authority
qualifications

Managers subject to
Administrative acts Rules and procedures
and decisions recorded that will ensure reliable
in writing predictable behavior
Management separate
from the ownership
of the organization

Exhibit 2.3

12 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Administrative Principles

 Contributors: Henri Fayol, Mary Parker

Follett, and Chester I. Barnard
 Focus:
– Organization rather than the individual
– Delineated the management functions of
planning, organizing, commanding,
coordinating, and controlling

13 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Henri Fayol 1841-1925
Examples of General Principles of Management

 Division of work
 Unity of command
 Unity of direction
 Scalar chain

14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Mary Parker Follett 1868-1933

 Importance of common super-ordinate goals for reducing

conflict in organizations
– Popular with businesspeople of her day
– Overlooked by management scholars
– Contrast to scientific management
– Reemerging as applicable in dealing with
rapid change in global environment

 Leadership – importance of people vs. engineering

techniques

Ethics - Power - Empowerment

15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
 Chester Barnard 1886-1961

 Informal Organization
– Cliques
– Naturally occurring social groupings

 Acceptance Theory of Authority

– Free will
– Can choose to follow management orders

16 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Humanistic Perspective

Emphasized understanding human

behavior, needs, and attitudes in the
workplace

Human Relations Movement

Human Resources Perspective
Behavioral Sciences Approach

17 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Human Relations Movement

Emphasized satisfaction of
employees’ basic needs as the key to
increased worker productivity

18 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Hawthorne Studies

 Started in 1895
 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

19 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Human Resource Perspective

Suggests jobs should be designed to

meet higher-level needs by allowing
workers to use their full potential

20 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Abraham Maslow 1908-1970

 Identified a hierarchy of needs

 Problems stem from an inability to satisfy
one’s needs

21 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Douglas McGregor Theory X & Y
1906-1964
Theory X Assumptions Theory Y Assumptions

 Dislike work –will avoid it  Do not dislike work

 Must be coerced, controlled,
directed, or threatened with
punishment
 Prefer direction, avoid
responsibility, little ambition,
want security
 Self direction and self control
 Seek responsibility
 Imagination, creativity widely
distributed
 Intellectual potential only
partially utilized

22 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Behavioral Sciences Approach
Sub-field of the Humanistic Management Perspective

 Applies social science in an

organizational context
 Draws from economics, psychology,
sociology, anthropology, and other
disciplines
– Understand employee behavior and
interaction in an organizational setting
– OD – Organization Development

23 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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

24 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Recent Historical Trends

● Systems Theory

● Contingency View

● Total Quality Management (TQM)

25 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Systems View of Organizations

Exhibit 2.5

26 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Contingency View of Management

Exhibit 2.6

27 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 TQM

 Focuses on managing the total organization to

deliver quality to customers.
 Four significant elements are
– Employee involvement
– Focus on the customer
– Benchmarking
– Continuous improvement

28 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 Elements of a Learning Organization

Team-Based Structure

Learning
Organization
Empowered Open
Employees Information

Exhibit 2.7

29 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

 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
Exhibit 2.8

30 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.