Management Submitted:11/11/2010

Management Theory06/10/10

Ciaran HendersonDT413-Event ManagementGroup (A)Mary O’Rawe

Management Theory

ContentsContents........................................................................................................................1Foreword.......................................................................................................................2Introduction..................................................................................................................3

Planning.....................................................................................................................3Aims............................................................................................................................3

Historical Development of Theories...........................................................................4Historic Theorists.......................................................................................................4Classical Theorists.....................................................................................................4Scientific Theorists.....................................................................................................5

Management, a Science or an Art?.............................................................................6Science........................................................................................................................6Art...............................................................................................................................6

Innovation.....................................................................................................................8Googles 20 Percent Time...........................................................................................8Innovation in the Events Industry..............................................................................9

Disruptive Innovation................................................................................................11IBM...........................................................................................................................11

Conclusion...................................................................................................................13Books........................................................................................................................14Blogs.........................................................................................................................14Journals....................................................................................................................14Images......................................................................................................................15Websites....................................................................................................................15

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Management Theory

Foreword

This document has been compiled by Ciaran Henderson and this is whom “the author”, mentioned in-text, refers to. There is also a supplementary presentation.

If you would like to find out more about Ciaran;

His LinkedIn Profile:

His O-Desk Profile:

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Management Theory

IntroductionDrucker (1974, p12) defines management as “the specific organ of every institution”.

PlanningThis investigation into this “organ” has been undertaken as part of the authors’

Event Management module and in it he plans to:

Give a brief Historic Development of management theory.

Discuss whether Management is a Science or an Art.

Examine Innovation and see how valuable it is in successful management in

the event sector.

Investigate a recent Management Theory known as “Disruptive Innovation”.

Aims By the end of the investigation the author hopes to have demonstrated his

interest and personal thoughts on the subject areas stated above while

demonstrating his broad amount of research work. He also hopes to learn

about the recent management theory “Disruptive Innovation”.

He hopes to have communicated clearly and effectively in order for the reader

to understand the information he presents and the way he interpreted it along

with his own thoughts.

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Management Theory

Historical Development of Theories

There are many arguments as to when management theory actually originated

and there are many different famous theorists through the years who have gained

fame and fortune from their publications and writings. However there are 3 main

headings we can class them under:

Historic TheoristsThe earliest writing that could be considered a plausible theory, written by

Chinese general Sun Tzu, was The Art of War in the 6 th Century BC. It’s a military

strategy book, that suggests for managerial uses, being aware and acting on strengths

and weaknesses of both a managers organization and a foes. (Gomez-Mejia et Al.

2008)

Classical TheoristsA Scottish philosopher named Adam Smith wrote the wealth of nations in

1776. It aspires towards resourceful organization of work using the specialization of

labour.

Smith demonstrates this in changing processes that boost productivity in the

manufacture of pins. While one employee could produce 200 pins a day, Smith

altered the steps and, with 10 specialists, could produce 48,000 pins per day. (Gomez-

Mejia et Al. 2008)

Mary Parker Follett who was a forerunner in the areas of organizational theory

& organizational behaviour. Who also wrote a number of books, articles, speeches on

democracy, human relations, psychology, organizational behaviour & conflict

resolution. Her ideas on negotiation, power, and employee participation were

extremely influential in the development of the fields of organizational studies,

alternative dispute resolution, and the Human Relations Movement.She described

management as "the art of getting things done through people" (Richard Barrett 2003)

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Scientific TheoristsWhile in the Frenchman Henri Fayol’s “Administration industrielle et

générale” (1917) proposed that any industrial undertaking had six functions:

technical, commercial, financial, security, accounting, and managerial. He then breaks

it down further and considers management to consist of six functions: forecasting,

planning, organizing, commanding, coordinating, controlling. He was one of the most

significant contributors to the concepts of management and we still use many of his

theories in modern management today.

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Management Theory

Management, a Science or an Art?

Initially the author established what the definitions are for Science and Art.

ScienceAccording to CRHM Global (2008):

“Science has 3 specific characteristics:

1. It is a systematic and organized knowledge and based on scientific methods of

observation.

2. Inferences are arrived after continuous observation and experiemtns;

3. It has logical principals which are well defined and are Universally

applicable without any limitations.”

From this the author deduces that management is indeed a science as there is a

huge aspect in management of measuring performance with regards to planning,

organising, controlling, co-ordinating and book-keeping. All of these have very clear

objectives and rules which must be followed, there are no grey areas. In this way all

of these things are easily measured and compared to precious results to determine

progress and performance.

ArtAccording to oxforddictionaries.com (2010) Art is- “subjects of study primarily

concerned with human creativity and social life , such as languages, literature, and

history (as contrasted with scientific or technical subjects)”

From this the author can deduce many areas of management which is not easily

measured or dealt with and must be approached in a skilful and sensitive manner,

such as- Human resources, hiring & firing, business ethics, motivation, moral and

contentedness within an organization.

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Management Theory

These are in contrast to the scientific side of management as this aspect of the

business can be altered in different circumstances depending on who the people are,

what their personalities and individual traits are, their attitudes, emotions and many

other factors that must be taken into consideration and approached with caution taking

all possible outcomes into mind and choosing the most appropriate course of action.

There is a certain art in knowing how to deal with people, mastering the art of

conversation & communication.

The author found CRHM Global (2008) to describe the relationship

beautifully-

“Management has got two faces like a coin; on one side it is art and on the other it is science…Science and Art are not mutually exclusive but complementary to each other. Therefore management is both a science and an art.”

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Management Theory

Innovation

According to Joseph Schumpter, who is often thought of as the first economist to

draw on the importance of innovation, defined five types of innovation in the

1930s(OECD, 1997, p28):

“Introduction of a new product or a qualitative change in an existing product”

“Process innovation new to an industry”

“The opening of a new market”

“Development of new sources of supply for raw materials or other inputs”

“Changes in industrial organisation”

Googles 20 Percent TimeOne excellent example of innovation at its most productive is Google’s 20 percent

time, as Alex K. (2006) tells us in Google’s official blog-

“The 20 percent time is a well-known part of our philosophy here, enabling engineers to spend one day a week working on projects that aren’t necessarily in our job descriptions. You can use the time to develop something new, or if you see something that’s broken, you can use the time to fix it.”

The author thinks this is such a beneficial idea as it gives employees the

opportunity to use their own initiative & creativity to come up with ideas that can then

be implemented into the business giving the employees an immense sense of pride &

importance in their work and company. This kind of scheme will also act as a huge

source of motivation encouraging them to work harder.

Another blogger Steve Safran (2010) tells us that “incentives are wonderful

things” He tells us he knows of a TV station that offered $500 dollars to anyone who

could come up with a cost saving initiative “The employee gets $500, the company

saves far more, and everyone wins.” If more businesses were to operate in this

manner then the businesses would not only generate loyal staff & customers but may

also end up with some ground-breaking ideas, which may give them the edge in their

particular market or even save a failing business from the brink of bankruptcy in these

uncertain times.

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Management Theory

The author believes that all areas of industry should invest in these kinds of

initiatives, as realistically as possible. They will definitely pay back in the long run,

generate a community of budding intrepreneurs and will be by and large priceless.

As a Chinese proverb (n.d) once said

“Tell me and I'll forget; show me and I may remember; involve me and I'll understand.”

Awards held by the Business & Finance journal (2009) were held in UCD.

The main focus tended to be on innovative businesses and how they coped in the

recession. One of the shortlisted business’s was Paddy Power (2010) “Irelands biggest

and most successful bookmaker”. According to the Business & Finance journal

(2009) one of the unique selling points of their business model is that it-

“takes an unconventional approach to betting and gaming, believing them to be

firmly rooted in the leisure and entertainment space…Through this strategy, the

company has developed a strong reputation as ‘the punter friendly bookmaker’ and

has become renowned for its unique ‘money back specials’”

These innovations have meant that “In 2009, turnover was over €2.75 billion, up 31%

on 2008.” (Paddy Power 2010)

Innovation in the Events IndustryThe author believes innovation links directly with the events industry as

competition becomes stronger and in the current economy events need to be exciting,

new and a little bit quirky in order to stand out from the crowd and develop their own

image and attract people to their events. The author thinks that the value companies

put into innovation. The author found a selection of events which really caught his

attention:

Wife Carrying World Championships-

Created in 1994 The Wife Carrying World Championships are held in

Sonkajärvi, Finland every year. The men carry their wives on their backs over

250m of obstacles, including a water jump. “The winner is awarded his

spouse's weight in beer.” (whatsonwhen.com 2010)

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Burning Man

Started in 1986 with a few hundred people, it has now grown to a

“bustling city of some 48,000+ people” Held in Black Rock Desert, 120 miles

north of Reno, Nevada for one week every year. “Burning Man is an annual

experiment in temporary community dedicated to radical self-expression and

radical self-reliance” (BurningMan.com 2010)

Alternative Miss Ireland

This is a fund-raising event for HIV/AIDS which started

controversially in 1987. It “is a tumescent celebration of alternative beauty

and performance, of concentrated otherness…“AMI looks for the broadest

range of entrants - men, women and anything else”. It is now held in the

Olympia annually, on the 17th of March, with an audience of 1300.

(AlternativeMissIreland.com 2010)

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Disruptive Innovation

This term first appeared in the 1997 Best-seller “The Innovators Dilemma”,

According to Clayton Christensen (2009), Disruptive innovation is:

“a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”

The author had never previously had thought that innovation could be

disruptive until doing research and discovering Christensens theory. To support the

theory, the author has used blogger Daniel Scocco’s (10/04/2006) article as he

explains using the example of the disk drive industry:

IBMIBM developed the first disk drives around 1954, they were as large as

refrigerators and could only store 5mb of data. By 1976 $1 billion worth of disk

drives were being produced annually between many different producers. By 1996 the

market was worth $18 million and the only company still operating in the market was

IBM.

The reason IBM was so disruptive was thanks to their innovative 8-inch disks

which were much smaller than the rest of the market who dominated with 14-inch

drives, however at first the cost-per-megabyte was much higher than that of the larger

drives, and unfortunately their main customers were not interested in this new

technology at all as the size of the drive wasn’t important as all they cared about was

the capacity of the drives and the cost-per-megabyte.

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Management Theory

Eventually however the smaller drives became both cheaper, smaller and were

out-performing the larger models. While customer demand was increasing by 25%

each year, the producers of 8’inch drives were able to increase capacity by 40% each

year- nearly twice the speed.

Customers Demand Difference

Thanks to these disruptive innovations, according to Yahoo Finance (2010)

IBM now has a market cap of $181.96 billion dollars and ranks second in the worlds

top 100 best global brands (2009)

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Conclusion

In conclusion the author has-

Given a Historic Development of management theory in 3 classifications of-

Historic, Classical and Scientific.

Concluded that management is a carful combination of both science and art.

Demonstrated the importance & impact of innovation on the success of

management in the event sector.

Presented his investigation into the theory of disruptive innovation

The author believes he has clearly and effectively communicated throughout his

investigation and is optimistic that the reader has understood the different areas

explored throughout.

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Management Theory

Bibliography

Books

Barrett. R. (2003) “Vocational Business: Training, Developing and

Motivating” Cheltenham: Nelson Thornes.

Drucker, P.F. (1974) “Management: Tasks, Responsibilities, Practises”

Oxford, Clays Ltd, St Ives plc.

Fayol, H. (1917) (in French), Administration industrielle et générale;

prévoyance, organisation, commandement, coordination, controle, Paris, H.

Dunod et E. Pinat.

Gomez-Mejia, Luis R.; David B. B. and Robert L. C. (2008). Management:

People, Performance, Change, 3rd edition. New York, New York USA. :

McGraw-Hill.

OECD 1997. “The Oslo Manual: Proposed Guidelines for Collecting and

Interpreting Technological Innovation Data” Paris, OECD.

Blogs

K. Alex (2006), Googles “20percent time” in action, The Official Google

Blog [Blog] 5/18/2006. Available at:

<http://googleblog.blogspot.com/2006/05/googles-20-percent-time-in-

action.html> [Date Accessed: 07/10/2010]

Safran. S. (2010), “20percent time: the way to innovate” [Blog] 14/7/2010

available at: <http://www.lostremote.com/2010/07/14/20-percent-time-the-

way-to-innovate/> [Date Accessed: 07/10/2010]

Scocco. D. (2006), “Disruptive Innovation” [Blog] 04/10/2010 available at:

<http://innovationzen.com/blog/2006/10/04/disruptive-innovation/>

[Date Accessed: 08/11/2010]

Journals

The Business & Finance Journal (2009) “Business & Finance awards

shortlist, Fantastic Four” Business & Finance, 45 (20) Pg. 49.

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Images

Cypruslocal, Handshake.jpg, [Online] available at:

<http://www.cypruslocal.co.uk/Portals/32/advert%20images/handshake.jpg>

Date Accessed: 14/10/10

Scocco. D. (2006), “Disruptive” [Online] available at:

<http://innovationzen.com/blog/wp-content/uploads/disruptive.jpg>

[Date Accessed: 08/11/2010]

Websites

Alternativemissireland.com (2010) “All Aspiring Queen Cailíns!” [website]

available at: <http://www.alternativemissireland.com/enter/index.php>

[Date Accessed 10/11/2010]

BurningMan.com (2010) “What is burning man? Frequently Asked

Questions” [website] available at:

<

http://www.burningman.com/whatisburningman/about_burningman/faq_what

_is.html> [Date Accessed: 10/11/2010]

Business week (2009) “100 Best Global Brands” [website] available at:

<

http://www.businessweek.com/interactive_reports/best_global_brands_2009.h

tml> [Date Accessed: 08/11/2010]

Chinese Proverb (n.d) “Chinese proverb quotes” [website] available at:

<

http://thinkexist.com/quotation/a_single_conversation_across_the_table_with_

a/157842.html> [Date Accessed: 09/11/2010]

Christensen C. (2009), “Key concepts- Disruptive innovation” [website]

available at: <http://www.claytonchristensen.com/disruptive_innovation.html>

[Date Accessed: 08/11/2010]

CHRMGlobal (2008) “Management: Art or Science?” [website] available at:

<http://www.chrmglobal.com/Articles/180/1/Management--Art-or-

Science-.html> [Date Accessed: 09/11/2010]

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Oxford University Press (2010) “Art” [website] available at:

<http://oxforddictionaries.com/definition/art?

rskey=qteBSd&result=1#m_en_gb0041510> [Date Accessed: 09/11/2010]

Paddy Power (2010) “about us” [website] available at:

<http://www.paddypower.com/bet/about-us> [Date Accessed: 09/11/2010]

Whatsonwhen.com (2010) “wife carrying world championships” [website]

available at: <http://www.whatsonwhen.com/sisp/?

fx=event&event_id=26295>

[Date Accessed: 10/11/2010]

Yahoo Finance (2010), “International Business Machines Corp. (IBM)”

[website] available at: < http://finance.yahoo.com/q/ks?s=ibm>

[Date Accessed: 08/11/2010]

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