Management fads: Emergence, evolution, and implications for managers Jane Whitney Gibson and Dana V. Tesone (2001)

This article focuses on 5 management fads of the late 20th century:

1) MBO (‘50s)2) Sensitivity training (‘60s)3) Quality circles (‘70s)4) Total quality management (‘80s)5) Self-managed or self-directed teams (‘90s)

These particular fads were chosen as representative fads because they were widespread and received much attention in the academic literature (not because they were the most important). Attention = a good indicator of the importance of a mgm fad ↔ even though much evidence suggests that the academic literature lags behind actual mgm practice

Definition A fad= a fashion, a craze, a temporary cultural hype in society Mgm fads= widely accepted, innovative interventions into the organization's practices

designed to improve some aspect of performance. Fads either evolve into new mgm practices or are abandoned as failures.

Fads & practices Many mgm practices started as fads: discovered or created by someone, after which they

found their way into mgm practice The difference between a fad and a practice is related to the age or newness of the

practice new practices are often old fads (although sometimes under new names)

How fads develop

Variables Leading to Fad AdoptionI. Environmental Pressures II. Forces for Conformity III. Organizational

CharacteristicsCompetitiveness ↑ (external)

Knowledge cascades1 Frustration from past efforts (more determined to embrace change)

Union activity increase Desire to be seen as progressive and be in the in-crowd

Desire for differentiation (to be ahead of the competition)

Political & regulatory environment

Desire to avoid sanctions Culture of risk taking

Dynamic & turbulent

1 Occurs when people do not have enough information to make their own choices so they imitate the choices made by others

environmentThe life cycle of mgm fads

Life cycle= a useful construct to understand the evolution of mgm fads organizations are also more likely to support a fad that is in the earlier stages of the life cycle

Fads display a symmetrical life cycle, shaped like a bell-curve Etorre’s life cycle theory: Stage 1: the discovery stage

The fad is just beginning to come to the public's attention. Very early articles are appearing in the literature

Stage 2: the wild-acceptance stageThe fad becomes very popular

Stage 3: the digestion stageCritics begin to suggest that the fad not the wonder drug is it might once have seemed to be

Stage 4: the disillusionment stageMore widespread recognition that problems exist with the fad. The next fad has already begun to capture the attention of the organization, hastening the decline of the current fad. However, this does not mean that the fad always fades away completely. The fad may serve as a catalyst or antecedent to some new managerial fad, or it may become part of the normal way of doing things under a different name

Stage 5: the hard core stageOnly the staunch supporters remain loyal to the fad

applied to the 5 chosen fads:

1) Management By Objectives (MBO) MBO= a technique that encourages participative decision making through shared goal setting

at all levels of the organization and performance assessment based on the achievement of stated objectives. process of goal setting and selfcontrol

Criticism: too much emphasis on bottom-line aspects of the organization Wider recognition in Japan than in USA emergence of large numbers of white-collar and

administrative positions helped popularize MBO in the USA as well In 1992 it was reported that MBO was standard operating procedure in 80 percent of US

firms2 (stage 2) By 1996 MBO was a fad that was long gone (stage 5). But the practice continues to thrive in

new fad terminology e.g. self-managed work teams, total quality mgm

2 Roughly translated, the article actually talks about “the Fortune 500 companies, Forbes best-managed, and Dun's list of best-managed companies”

2) Sensitivity Training (ST) ST traces its beginnings to an intergroup relations workshop held conducted by Kurt Lewin,

the father of social psychology (stage 1). Shortly after Lewin died in early 1947, his 3 colleagues organized the National Training Laboratories. At the same time similar studies were held in Japan

An ST session/T-group/laboratory training consisted of 10-12 stranger-participants and 1 or 2 trained facilitators. Over the 1- to 3-week training period, a laboratory experience was derived from the interpersonal dynamics exhibited by the attendees focus on interpersonal dynamics between group members unstructured learning (no appointed leader, no assigned topic) goal: to develop self-insight and awareness, to increase sensitivity to one's effect on others, and to bring to the surface data on one's blind spots and hidden areas participants can then take new ways of behaving and working with others to their work

Coming out of the lab and into organizations, T-groups attained considerable popularity all through the 1960s (stage 2)

Criticism (stage 3):- poorly trained facilitators to lead the sessions- the interdependency of coworkers gave the T-groups a very personal nature… ↔ originally T-groups were voluntary and participants were strangers to eachother- little/no proof of sufficient carry-over of training results back to the job

Influence of ST in personal-development movements (e.g. encounter groups) and in other mgm fads (e.g. team building)

T-groups proved to be an ineffective technique but… the concept of ST surged in popularity in the 90s as workplace-diversity and harassment-prevention programs

3) Quality Circles (QCs) QCs were part of a Japanese strategy to improve quality and build market share after World

War II. The first use of QCs in the USA was documented in the early 70s (stage 1) QCs consisted of volunteer groups of workers who met on company time and considered

ways in which the quality of products and/or processes could be improved a way to increase worker participation but if carefully planned and inaugurated, QCs improved attitudes and behavior among employees (cost ↓ and human-relations benefits ↑)

By the middle of the 1980s, QCs were used in over 90% of US firms3 (stage 2) However a survey in 1988 showed that more than 80% of these companies that had tried

QCs had already abandoned them (stage 5). QCs didn’t really last long in the US because of lack of central support and guidance (↔ Japan)

QCs not very effective, but… the philosophical grounds of participation and focus on quality have become the foundation for other techniques, such as TQM and self-managed work teams

4) Total Quality Mgm (TQM) The decline of QCs in the early 80s lead to a surge in the popularity of TQM for the remainder

of the decade and into the 90s. Western managers were still eager to apply Japanese quality-movement methodologies in their organizations (stage 1)

TQM emphasized quantitative measures, continuous improvement, customer-defined standards, individual empowerment, situational analysis, and top-mgm support

3 Roughly translated, the article actually talks about “the Fortune 500 companies”

Criticism (stage 3):- high costs- too much bureaucracy- difficult processes- for managers: a shift away from the philosophical roots into standardized procedures less understanding by workers so they did not embrace TQM as part of the culture (which was essential to the TQM philosophy!) quality experts then convinced organizational managers to buy in to the quality journey and to accept that there would be no immediate financial return which in turn lead to large quality fees, little earnings in their reports and a lot of disappointment in TQM initiatives in Western organizations new consultants emerged in the early 90s who specialized in turning around failed TQM programs but during 1993 TQM moved to stage 4

By 1996, only the staunch supporters of quality initiatives appeared to be in favor of TQM initiatives (stage 5), though there were notable exceptions (e.g. Ford) which launched major TQM programs in the late 90s

5) Self-Managed Teams (SMT) SMT/Self-Managed Work Teams (SMWT)/ Self-Determined Teams (SDT)= non-hierarchical

work groups that are responsible and accountable for outcomes in the organization were created, utilizing rotating team leadership. Each work group was autonomous and provided maximum group control of work-related variables improved results & member satisfaction↑. Other studies suggested that small work groups (8-12 members) intrinsic motivation↑, performance↑, job satisfaction↑ and turnover↓

Criticism:- improvements in performance were overstated in the literature- individual resistance to team participation- the techniques did not prove to be beneficial to many organizations

Significance of the 5 fads for mgm today What lessons can be learned from looking at these 5 fads and what is their significance to

managers today? Each has had some lasting significance on mgm today:1) MBO goal setting2) ST various types of communication training and group-development activities

(teambuilding, diversity training, harassment prevention)3) QC structured employee participation (different terminology, but worker

commitment to quality is the same by any name)4) TQM continues as the philosophy of ongoing quality improvement (now often a

different name in organizations)5) SMT seem to be a natural outgrowth of QC’s and TQM. They are also a natural

extension of other popular fads like empowerment and 380-degree evaluations. Because of this integration of fads, they can be expected to have a fairly long life cycle

Implications for managers Choosing which fads to adopt: managers should ask

themselves the 11 questions in Table 3 the more yes answers that are checked, the more likely it is that fad adoption is the right thing to do

1. Adopting a fad too soon risk2. Don’t adopt a fad if the company is already scoring

high in that particular area3. Only adopt if the new fad fits with the

organization’s core values (organizational fit)4. What are the specific outcomes of the fad, what is

is supposed to accomplish?5. Does the organization have the time, money, and

energy required to implement the fad successfully?6. Do a cost/benefit analysis regarding the fad7. Assuming positive results, the fad will be easier to sell to the rest of the organization if there

are success stories to be told. And if it doesn't work out, the costs have been kept to a minimum

8. Research: companies with previous fad implementation fail are more likely to adopt new fad examin organization’s history (Are there successes/failures? What caused previous failures? How can these problems be avoided in the future?)

9. Fads’ life cycles are getting shorter (external pressure on mgm for ROI). But achieving lasting benefits takes time and patience

10. Change always produces stress on employees and the organization's processes11. Political pressure, pressure to appear progressive & up-to-date in managerial style & tools,

statistics, …

Remember: the goal of fad adoption is to provide an innovative technique to improve organizational performance.

The benefits of fads Recent research: while there is no proven correlation between adopting mgm fads like TQM,

empowerment, and self-managed teams, and resulting financial performance, there are other documented benefits organizations closely associated with popular mgm fads: - were more admired by the public and thought to be more innovative - were perceived as having better managers- had CEOs with increased compensation, regardless of corporate performance