Management Theories

Traditional and Contemporary Issues and Challenges

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The Behavioral Perspective

The Quantitative Perspective

The Contingency Perspective

The Systems Perspective

Contemporary AppliedPerspectives

Theory Z and theExcellence Perspective

The Classical Perspective

SengeCoveyPetersPorterAdamsKotterHamel

2010

Figure 2.5

Classical Approaches to Mgmt.

Scientific Management What is the best way to

increase the efficiency and productivity of anindividual employee?

Administrative Management What is the best way to structure an

organization so that employees are maximally efficient and productive?

Frederick Taylor - Father of Scientific Management

Degree in mechanical engineering Started work at Midvale Steel company as a

shop laborer, soon rose to foreman Recognized need for “mental revolution”

where “both sides take their eyes off the division of the surplus…and together turn their attention toward increasing the surplus.”

Taylor's Approach

Use science (observation and experimentation) to design jobs

Use science to select workers - different people are suitable for different jobs

Train employees to do work the "one best way," and pay them for the work they do

Have managers and employees work separately, but collaboratively - managers plan, organize and train.

Frederick Taylor - Bethlehem Steel Company

Shovelers Study Employees shoveled fuel using their own

shovels Loads ranged from 3.5 to 38 lbs. Taylor redesigned shovels to match fuel

-- load weight: 21.5 lbs. Tonnage went from 16 to 59 tons/day Number of employees reduced from 500

to 140.

Taylor’s Contributions

Started systematic training for workers Allowed laborers to receive middle class

wages Developed the concept of work design -

giving employees the best tools and techniques to do their jobs

Started practice of managing based on research, questioning and investigation.

Other Scientific Management Pioneers

Frank and Lillian GilbrethReduced number of movements in

bricklaying, resulting in increased output of 200%

Henry GanttDeveloped other techniques, including

the Gantt chart, to improve working efficiency through planning and scheduling.

Gantt Chart

Project J F M A M J J A S O N D J

COMPENSATION

Develop 1999 Compensation Plan

Implement 1999 Compensation Plan

Job Evaluation Process Improvement

Corporate Incentive Plan

Support PeopleSoft Conversion

Performance Review Analysis

Administrative Management

Henri Fayol - Position as assistant mining superintendent led to theories: Four basic management functions Equal authority & responsibility Unity of command Division of work Unity of direction Scalar chain-of-command.

? Discussion Questions ?

Do you see manager's using scientific management or administrative management ideas today?

What do you think would be the advantages of using these approaches where you work? The disadvantages?

Behavioral Management Perspective

Emphasizes individual attitudes and behaviors and group processes

Western ElectricHawthorne Works,

Cicero, Illinois

Hawthorne Studies

Fritz Rothlisberger Illumination study

Elton Mayo Relay assembly test room experiment Employee interviews Bank wiring observation room

experiment

Hawthorne Study Contributions

Identified the social and attitudinal components of work

Emphasized the importance of recognition, security and a sense of belonging on motivation

Established the impact of management actions on employee satisfaction.

Behavioral Management Perspective

Human Relations Movement Abraham Maslow

Hierarchy of Needs Douglas MacGregor

Theory X; Theory Y.

Theory X and Theory Y

Table 2.2

Theory X Assump-tions

1. People do not like work and try to avoid it.

2. People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals.

3. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.

Theory Y Assump-tions

1. People do not naturally dislike work; work is a natural part of their lives.

2. People are internally motivated to reach objectives to which they are committed.

3. People are committed to goals to the degree that they receive personal rewards when they reach their objectives.

4. People seek both seek responsibility and accept responsibility under favorable conditions.

5. People have the capacity to be innovative in solving organizational problems.

6. People are bright, but under most organizational conditions their potentials are underutilized.

Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.

? Discussion Questions ?

Have you ever had an experience where the attitudes of your co-workers affected your attitude? What happened?

Who do you think has the most influence on your attitude at work - your boss, your co-workers, or yourself?

Quantitative Management Perspective

Using quantitative methods and models to manage decisions

Quantitative Management Perspective

Management Science Development of mathematical models to

assist with decisions Operations Management

Applied management science Helps an organization efficiently manage

production and distribution of its products and services.

An interrelated set of elements functioning as a whole

Systems Perspective

Environment

Throughputs(Transformation)

Organization

Inputs Outputs

Systems Perspective

Open systems - Systems that interact with one another and other environments

Closed systems - Systems that do not interact with their environment

Subsystems - Interdependent systems within systems.

Systems Perspective

Synergy Subsystems are more successful working

together than working alone. The whole, working together, is greater than the sum of its parts.

Entropy A natural process, which leads to system

decline. Should be avoided through organizational change and renewal.

Contingency View

Universalist: “One best way”

Case View: “Every situation is unique”

Contingency View: Different situations require different approaches. What works best in one situation might not work in another. Managers must analyze the situation to find the right solution.

A Contingency Theory

Independent Variable 1 = Industry environment (turbulent or static)

Independent Variable 2 = Organization design (structured or unstructured)

Dependent Variable = Success of company Theory = Structured companies more

successful in static environments, unstructured companies more successful in turbulent environments.

Can Theory Solve Real Problems?

You manage a group of 5 employees at the GAP. Recently, sales have dropped. What should you do, according to: Scientific Management Theory Behavioral Management Theory Quantitative Management Theory Contingency Theory?

? Discussion Questions ?

Which of the theories do you think provides an approach that you would be most likely to use in real life? Why?

Is there any way of combining the approaches suggested by the different theories?

An Integrative Framework ofManagement Perspectives

Systems Approach• Recognition of internal

interdependencies• Recognition of

environmental influences

Contingency Perspective• Recognition of the situational

nature of management• Response to particular

characteristics of situation

ClassicalManagementPerspectivesMethods forenhancingefficiency andfacilitating planning,organizing, andcontrolling

BehavioralManagementPerspectivesInsights for moti-vating performanceand understandingindividual behavior,groups and teams,and leadership

QuantitativeManagementPerspectivesTechniques forimproving decisionmaking, resourceallocation, andoperations

Effective and efficient management

Figure 2.4