The Importance of Theory and History

Why Use Theories?

Theories provide conceptual frameworks for organizing knowledge and
blueprints for actions.
Management theories are grounded in reality.
Managers develop their own theories about how they should run their
organizations.

Why Study History?

Understanding history aids managers in the development of management
practices and in avoiding the past mistakes of others.

Management History

By the late 1800s, the US economy depended largely on industries such as

oil, steel, railroads, and manufactured goods.

Many people left their farms to take jobs in factories, where professional
managers supervised their work.

The new industrial enterprises that emerged in the nineteenth century demanded
management skills that had not been necessary earlier
Management Theories
1.Early management ideas 2. Classical theorists 3. Behavioural theorists 4.
Quantitative approach 5.Contemporary ideas
6. Innovation &
management theory

Early Management Ideas

Robert Owen (17711858) Entrepreneur (Cotton mill in New Lanark ,Scotland)

Identified / recognize the importance of working and social conditions

for employees (Human Resource).

Advocated concern for the working and living conditions for the
employees.
Organizations would responsible socially uplifts

Charles Babbage (17911871) English

Mathematician Interest in operations of factories, is widely known as the

father of modern computing

Ideas on work specialisation, production efficiency, incentive and profit-sharing

plans.
focused on creating efficiencies of production through the division of labor,
management and labor cooperation, and application of mathematics to
management problems.
Built 1st mechanical calculator, ideas on work (physical and mental) specialization,
production efficiency, costing, incentives and profit sharing plan.
(Charles Babbage was an English mathematician, philosopher and inventor born on
December 26, 1791, in London, England. Often called The Father of Computing,
Babbage detailed plans for mechanical Calculating Engines, Difference Engines, and
Analytical Engines. Babbage died on October 18, 1871, in London. )
Henry R. Towne (18441924) President of a manufacturing organization, and a
Mechanical Engineer.
Called for a management science that would establish principles of management
Management as separate field
Paper the Engineer as an economist
He observed that although good engineering skill and good business skill were
rarely combined in the same individual, both skill were needed to run an
organization effectively.
Summary
Assessing the early contributions:

Uncoordinated efforts.
Contributions tended to relate to specific problems.
Did not see management as a separate field or skill (until Towne).

Management Theories
Classical Management Approaches
1. Scientific Management
2. Bureaucratic Management

3. Administrative Management
Classical Viewpoint
This viewpoint emphasises managing work and organisations more efficiently.
The classical approach to management is a management approach that
emphasizes organizational efficiency to increase organizational success.
It comprises three different management approaches:
Scientific Management,
administrative Management
and bureaucratic Management
Classical Management
Scientific Management
An approach that emphasizes the scientific study of work methods in order to
improve work efficiency.

Concerned with improving the performance of individual

workers (i.e. efficiency).
Grew out of the industrial revolutions labor shortage at the
beginning of the twentieth century.

Management Theories

Classical theorists

1.Scientific Management

F. W. Taylor, Frank & Lillion Gilbreth, H. Gantt

2.Bureaucratic Management
3.Administrative Management

Max Weber
Henry Fayol (France)

Management Theories (Classical)

Scientific management Frederick Winslow Taylor (1856-1915) is known as

the father of scientific Management

Four principles of scientific management:

1. Determine the most efficient work methods
2. Select the worker & train then to perform the task by using the
scientifically developed method.
3. Co-operate fully with workers to ensure that best/proper method is used.
4. Divide work/responsibility between workers & managers.

(American Mechanical Engineer, Frederick W. Taylor, the father of scientific

management, spent three years to improve output of workers who were
deliberately restricting output. His principles are described on this slide.
Taylors key ideas have stood the test of time. These include:

using systematic analysis to identify the best methods

scientifically selecting, training, and developing workers

promoting cooperation between management and labor

developing standardized approaches and tools

setting specific tasks or goals and then rewarding workers with financial
incentives

giving workers shorter work hours and frequent breaks

(Frederick Winslow Taylor (1856-915) was the father of Scientific Management.

When he was working as an apprentice at the Midvale steel company, he noticed
that most workers did not work as hard as they could. To increase efficiency, Taylor
tried to figure out the one best way to perform a particular task. To do so, he used
a stop watch to determine which method was the most efficient. These studies
were known as Time and Motion Studies.)
Management Theories (Classical)
Scientific Management
Frank &Lillion Gilbreth(1868-1924)/(1878-1972)
Use of motion pictures to study hand-and-body movements
Time and motion studies Human implications of Scientific Management
Focused on increasing worker productivity through the reduction of wasted
motion
Developed the micro chronometer to time worker motions and optimize
performance
Reduced the number of movements in bricklaying, resulting in increased output of
200%.
The belief that productivity is maximized when organizations are rationalized with
precise sets of instructions based on time-and-motion studies
(In addition to their use of motion studies to simplify work, Frank and Lillian Gilbreth
also made significant contributions to the employment of handicapped workers and
industrial psychology.

Lillian Gilbreth, the first woman to receive a Ph.D. in Management, also convinced
the government to enact laws regarding workplace safety, ergonomics, and child
labor.
The belief that productivity is maximized when organizations are rationalized with
precise sets of instructions based on time-and-motion studies)

Scientific Management

Henry Gantt (1861-1919)

Pay incentives
Gantt chart

Developed the Gantt chart to improve working efficiency through planning and
scheduling.
(Henry Gant, in addition to creating the Gantt chart, made significant contributions
to management with pay-for-performance plans and the training and development
of workers.
A Gantt chart shows time in various units on the x-axis and tasks on the y-axis,
visually indicating what tasks must be completed at which times in order to
complete a project.)
Charts: Henry Gantt

Classical Theorists

1.Scientific Management F. W. Taylor, Frank & Lillion Gilbreth, H. Gantt

2. Bureaucratic Management Max Weber
3.Administrative Management Henry Fayol (France)
Bureaucratic Management
Max Weber (pronounced VAY-ber) (German Sociologist 1864 1920)
An approach emphasizing the need for organizations to operate in a rational
manner rather than relying on owners and managers whims!
Advocated job specialization in both managerial and operating jobs.
Bureaucracy :-The exercise of control on the basis of knowledge,
expertise, or experience.
(When we hear the term bureaucracy, we think of inefficiency and red tape,
incompetence and ineffectiveness. However, when German sociologist Max Weber
proposed the idea of bureaucratic organizations, monarchies were associated with
these problems. Bureaucracy literally means to rule from a desk or office. In a

bureaucracy, people would lead by virtue of rational-legal authorityfrom

knowledge, expertise, and experience. )

Webers (1864-1920) Ideal Bureaucracy

Specialisation of labour
Formal rules & procedures
Impersonality
Well-defined hierarchy
Advancement on merit / Carrier Orientation
[French bureaucratie : bureau, office; + -cratie, rule]
German buro , meaning office, large organization that operate on
rational basis.

Administrative management

Approach focusing on principles used by managers to co-ordinate the

organisations internal activities.

Henri Fayols

Elements of Management- Planning, Organizing, Commanding, Coordination & Control

Henri Fayols 14 Priciples of Management

1. Division of work, allows for the job specialization

2.
3.
4.
5.
6.

Authority, formal and informal authority.

Discipline, obedient , respectful employees.
Unity of command, Employees should have only one boss.
Unity of direction, One plan of action to guide the organization.
Subordination of individual interest to general interest. (The interest of the
organization should dominate individual or group interests.)
7. Remuneration ,Something, such as a payment, that remunerates.
8. Centralisation, the degree to which authority rests at the very top.
9. Scalar chain, a clear chain from top to bottom of the firm.
10.Order , Each employee is put where they have the most value.
11.Equity, Treat all employees fairly in justice and respect.
12.Low turnover ,Retaining productive employees, Long-term employment is
important.
13.Initiative , Encourage innovation
14.Esprit de corps (and general good feelings ) , / union is strength.
(: Union is strength- refers to harmony & mutual understanding among
the members of an organization.
A common spirit of comradeship, enthusiasm, and devotion to a cause am
ong the members of a group.
Comrade
1. A person who shares one's interests or activities; a friend or companion
.
2. often Comrade A fellow member of a group, especially a fellow member
of the Communist Party.)
Behavioral View Point
(human resources approach)
Perspective on management emphasising the importance of attempting to
understand various factors affecting human behaviour in organisations.
Emphasized individual attitudes and behaviors, and group
processes.
Recognized the importance of behavioral processes in the
workplace.
Behavioural theorists
Early theorists:
Hugo Munsterberg (1863-1916) PhD in Psychology
Creating optimal psychological conditions, behaviour shaping.
A German psychologist in the field of industrial psychology . He was especially
interested in identifying the condition that would promote an individuals best work

and in finding ways to influence workers to act in accord with the management
interest
Mary Parker Follett (1868-1933)
Importance of group functioning.
Her ideas on power sharing , conflicts resolution, and the integration of
organizational system were far in advance of their time.
Hawthorne studies
Importance of supervisory style
Mary Parker Follett, 1868-1933
Mary Parker Follett is known today as the mother of Modern management / ." Her
many contributions to modern management include the ideas of negotiation,
conflict resolution, and power sharing.
Importance of group functioning.
Her ideas on power sharing , conflicts resolution, and the integration of
organizational system were far in advance of their time
The Hawthorne Studies

Conducted by Elton Mayo and associates at Western Electric (19271935)

Importance of supervisory style
There were four main phases to the Hawthorne experiments:
the illumination experiments;
the relay assembly test room;
the interviewing program;
the bank wiring observation room.

(The lux (symbol: lx) is the SI unit of illuminance and luminous emittance,
measuring luminous flux per unit area. The lux is one lumen per square metre
(lm/m2)
The original investigation was conducted on the lines of the classical approach and
was concerned, in typical scientific management style, with the effects of the
intensity of lighting upon the workers productivity. The workers were divided into
two groups, an experimental group and a control group. The results of these tests
were inconclusive as production in the experimental group varied with no apparent
relationship to the level of lighting, but actually increased when conditions were
made much worse.
Production also increased in the control group although the lighting remained
unchanged. The level of production was influenced, clearly, by factors other than
changes in physical conditions of work. This prompted a series of other experiments
investigating factors of worker productivity.

In the relay assembly test room the work was boring and repetitive. It involved
assembling telephone relays by putting together a number of small parts. Six
women workers were transferred from their normal departments to a separate area.
The researchers selected two assemblers who were friends with each other. They
then chose three other assemblers and a layout operator. The experiment was
divided into 13 periods during which the workers were subjected to a series of
planned and controlled changes to their conditions of work, such as hours of work,
rest pauses and provision of refreshments.
The general environmental conditions of the test room were similar to those of the
normal assembly line. During the experiment the observer adopted a friendly
manner, consulting with the workers, listening to their complaints and keeping them
informed of the experiment.
Following all but one of the changes (when operators complained too many breaks
made them lose their work rhythm) there was a continuous increase in the level of
production. The researchers formed the conclusion that the extra attention given to
the workers, and the apparent interest in them shown by management, was the
main reason for the higher productivity.
Another significant phase of the experiments was the interviewing programme. The
lighting experiment and the relay assembly test room drew attention to the form of
supervision as a contributory factor to the workers level of production. In an
attempt to find out more about the workers feelings towards their supervisors and
their general conditions of work, a large interviewing programme was introduced.
More than 20 000 interviews were conducted before the work was ended because of
the depression.
Initially, the interviewers approached their task with a set of prepared questions,
relating mainly to how the workers felt about their jobs. However, this method
produced only limited information. The workers regarded a number of the questions
as irrelevant; also they wanted to talk about other issues than just supervision and
immediate working conditions. As a result, the style of interviewing was changed to
become more non-directive and open-ended. There was no set list of questions and
the workers were free to talk about any aspect of their work.
The interviewers set out to be friendly and sympathetic. They adopted an impartial,
non-judgemental approach and concentrated on listening.
Arising from this approach, the interviewers found out far more about the workers
true feelings and attitudes. They gained information not just about supervision and
working conditions, but also about the company itself, management, work group
relations and matters outside of work such as family life and views on society in
general.
Many workers appeared to welcome the opportunity to have someone to talk to
about their feelings and problems, and to be able to let off steam in a friendly
atmosphere.
The interviewing programme was significant in giving an impetus to present-day
personnel management and the use of counselling interviews, and highlighting the
need for management to listen to workers feelings and problems.

Being a good listener is arguably even more important for managers in todays work
organisations, and it is a skill which needs to be encouraged and developed Another
experiment involved the observation of a group of 14 men working in the bank
wiring room. It was noted that the men formed their own informal organisation with
sub-groups or cliques, and with natural leaders emerging with the consent of the
members. The group developed its own pattern of informal social relations and
norms of what constituted proper behaviour. Despite a financial incentive scheme
where the workers could receive more money the more work produced, the group
decided on a level of output well below the level they were capable of producing.
Group pressures on individual workers were stronger than financial incentives
offered by management. The group believed that if they increased their output,
management would raise the standard level of piece rates.
ExamplesIlluminanceSurfaces illuminated by:0.0001 luxMoonless, overcast
night sky (starlight)[3]0.002 luxMoonless clear night sky with airglow[3]0.27
1.0 luxFull moon on a clear night[3][4]3.4 luxDark limit of civil twilight under a clear
sky[5]50 luxFamily living room lights (Australia, 1998)[6]80 luxOffice building
hallway/toilet lighting[7][8]100 luxVery dark overcast day[3]320500 luxOffice lighting[6]
[9][10][11]
400 luxSunrise or sunset on a clear day.1000 luxOvercast day;[3] typical TV
studio lighting1000025000 luxFull daylight (not direct sun)[3]32000
100000 luxDirect sunlight )
The Hawthorne Studies_2

Factors influencing behavior:

Attention from researchers

Managers leadership approach
Work group norms
Hawthorne Effect
When people improve some aspect of their behavior or performance
simply because they are being assessed
The Hawthorne Effect

The result of an experiment conducted at the Hawthorne plant of Western

Electric in Cicero, Illinois in 1924. They lowered the lighting in the factory,
expecting productivity to fall; but instead, to their astonishment, productivity
increased.

The researchers concluded that productivity rose because workers worked

harder when they received attention. This phenomenon, in which change of
any kind increases productivity, has been known as the Hawthorne Effect.

Hawthorne Studies

Hawthorne Studies: studies conducted during the 1927s and 1935s

that discovered the existence of the informal organization

Behavioural theorists
Human relations movement

Grew out of the Hawthorne studies.

Proposed that workers respond primarily to the social context of work,
including social conditioning, group norms, and interpersonal
dynamics.
Assumed that the managers concern for workers would lead to
increased worker satisfaction and improved worker performance.
Abraham Maslow
Advanced a theory that employees are motivated by a hierarchy of
needs that they seek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y concepts of managerial beliefs about
people and work.

(According to Maslow, self-actualizing people share the following qualities:

Truth: honest, reality, beauty, pure, clean and unadulterated completeness
Goodness: rightness, desirability, uprightness, benevolence, honesty
Beauty: rightness, form, aliveness, simplicity, richness, wholeness, perfection,
completion,

Wholeness: unity, integration, tendency to oneness, interconnectedness, simplicity,

organization, structure, order, not dissociated, synergy
Dichotomy: transcendence: acceptance, resolution, integration, polarities,
opposites, contradictions
Aliveness: process, not-deadness, spontaneity, self-regulation, full-functioning
Unique: idiosyncrasy, individuality, non comparability, novelty
Perfection: nothing superfluous, nothing lacking, everything in its right place, justrightness, suitability, justice
Necessity: inevitability: it must be just that way, not changed in any slightest way
Completion: ending, justice, fulfillment
Justice: fairness, suitability, disinterestedness, non partiality,
Order: lawfulness, rightness, perfectly arranged
Simplicity: nakedness, abstract, essential skeletal, bluntness
Richness: differentiation, complexity, intricacy, totality
Effortlessness: ease; lack of strain, striving, or difficulty
Playfulness: fun, joy, amusement
Self-sufficiency: autonomy, independence, self-determining)

Theory X
MIT Professor Douglas McGregor
Theory Xassumes that people are basically lazy and will avoid working if they can.
To make sure that employees work, Theory X managers impose strict rules and
make sure that all important decisions are made only by them.
Theory Y

Theory Y assumes that people find satisfaction in their work. Theory Y

managers believe that people are creative and will come up with good ideas
if encouraged to do so. They tend to give their employees much more
freedom and let them make mistakes.

The Industrial Revolution

Refers to the period during which a country develops an industrial economy.

In Europe the Industrial Revolution began in the eighteenth century; in the
United States, it began around 1860, just before the Civil War.

Before the Industrial Revolution, the US economy was based on agriculture. Most
people worked on small farms, using only simple technology, such as horse-drawn
plows. Professional managers were not needed because most people worked for
themselves
Quantitative management viewpoint
Focuses on mathematics, statistics and information aids to support managerial
decision making and organisational effectiveness.
Helped World War II Allied forces manage logistical problems.
Focuses on decision making, economic effectiveness, mathematical
models, and the use of computers to solve quantitative problems.
(World War II (WWII or WW2), also known as the Second World War (after the
recent Great War), was aglobal war that lasted from 1939 to 1945)

Management Science (Operation Research) OR/MS

An Approach aimed at increasing decision effectiveness through use of

sophisticated mathematical models & statistical methods. OR is applied math.
Employing techniques from other mathematical sciences, such as mathematical
modeling, statistical analysis, and mathematical optimization, operations research
arrives at optimal or near-optimal solutions to complex decision-making problems."
Operations Management (OM)
Function or field of expertise primarily responsible for managing production &
delivery of an organisations products and services.
OP: Refers to the management of the production system that transforms inputs into
finished goods and services.
(OP Refers to the management of the production system that transforms inputs into
finished goods and services.
Production system: the way a firm acquires inputs then converts and disposes
outputs.
Operations managers: responsible for the transformation process from inputs to
outputs.
Operations management seeks to increase the quality, efficiency, and
responsiveness of the firm.
Seeks to provide a competitive advantage.
Mathematical models can take many forms, including dynamical systems, statistical
models, differential equations, or game theoretic models.
Management information systems (MIS) is the study of people, technology,
organizations, and the relationships among them. This definition, given by Mays
Business School, relates specifically to MIS as a course of study. In other words, MIS
is commonly used in business schools to refer to the study of how individuals,
groups, and organizations evaluate, design, implement, manage, and utilize
systems to generate information to improve efficiency and effectiveness of decision
making, including systems termed decision support systems, expert systems, and
executive information systems.[1] Many business schools (or colleges of business
administration within universities) have an MIS department, alongside departments
of accounting, finance, management, marketing, and may award degrees (at
undergraduate, master, and doctoral levels) in MIS. )

MIS

An MIS is
An organized collection of people, procedures, software, databases,
and devices used to provide routine information to managers and
decision makers

(Transaction Processing System

Short for management information system or management
information services, and pronounced as separate letters, MIS refers to a class of
software that provides managers with tools for organizing and evaluating their
department.
Typically, MIS systems are written in COBOL and run on mainframes or
minicomputers. Within companies and large organizations, the department
responsible for computer systems is sometimes called the MIS department. Other
names for MIS include IS (Information Services) and IT (Information Technology). )

Contemporary Viewpoint
1. Systems Theory
2. Contingency Theory
3. Emerging Theories
(Theory Z, TQM, Km, LO)
ORGANIZATION

THEORIES
Organization as Rational system
Single unit,
Organization as Natural system

 Single unit Coalition/other participant

Organization as Open System
Multiple organization, stakeholder
System
A set of elements or components that interact to accomplish goals.

A combination of components working together

Systems theory
Approach based on the idea that organisations can be viewed as systems.
The theory that an organization comprises various parts that must
perform tasks necessary for the survival and proper functioning of the
system
Systems Theory
System mean certain components or certain subunits have integrated activities
A set of interrelated and interdependent parts arranged in a manner that produces a
unified whole.
e.g. Any organization, Computer
Basic Types of Systems
Closed systems
Are not influenced by and do not interact with their environment
(all system input and output is internal).
Open systems
Dynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed into
their environments.

(A system is a set of interrelated elements or parts that function as a whole. A

systems approach encourages managers to look for connections between the
different parts of the organization. )
The Four Parts of a System

The vocabulary of the systems perspective is useful because it gives you a

way of understanding many different kinds of organizations. The four parts of
a system are defined as follows:

Inputs are the people, money, information, equipment, and materials

required to produce an organizations goods or services. Whatever
goes into a system is an input.

Outputs are the products, services, profits, losses, employee

satisfaction or discontent, and the like that are produced by the
organization. Whatever comes out of the system is an output.

Transformation processes are the organizations capabilities in

management and technology that are applied to converting inputs
into outputs. The main activity of the organization is to transform inputs
into outputs.

Feedback is information about the reaction of the environment to

the outputs that affects the inputs. Are the customers buying or not
buying the product?

Contingency theory Viewpoint arguing that appropriate managerial action

depends on the particular parameters of the situation.

Contingency Theory
Also sometimes called the situational approach.
There is no one universally applicable set of management principles
(rules) by which to manage organizations.
Organizations are individually different, face different situations (contingency
variables), and require different ways of managing

Emerging Theories

Theory Z Concept combining positive aspects of American and Japanese

management into a modified approach aimed at increasing managerial
effectiveness while remaining compatible with the norms and values of
American society and culture.

Total Quality approach Approach highlighting collective responsibility for

product and service quality, and encouraging individuals to work together to
improve quality.

TQM can lead to much higher labor productivity.

When quality rises, less time is wasted on scrap.
Total Versus Traditional Quality

(For Ouchi, Theory Z focused on increasing employee loyalty to the company by

providing a job for life with a strong focus on the well-being of the employee, both
on and off the job. According to Ouchi, Theory Z management tends to promote
stable employment, high productivity, and high employee morale and satisfaction.
According to Maslow, self-actualizing people share the following qualities:
Truth: honest, reality, beauty, pure, clean and unadulterated completeness
Goodness: rightness, desirability, uprightness, benevolence, honesty
Beauty: rightness, form, aliveness, simplicity, richness, wholeness, perfection,
completion,
Wholeness: unity, integration, tendency to oneness, interconnectedness, simplicity,
organization, structure, order, not dissociated, synergy
Dichotomy: transcendence: acceptance, resolution, integration, polarities,
opposites, contradictions
Aliveness: process, not-deadness, spontaneity, self-regulation, full-functioning
Unique: idiosyncrasy, individuality, non comparability, novelty
Perfection: nothing superfluous, nothing lacking, everything in its right place, justrightness, suitability, justice
Necessity: inevitability: it must be just that way, not changed in any slightest way
Completion: ending, justice, fulfillment
Justice: fairness, suitability, disinterestedness, non partiality,
Order: lawfulness, rightness, perfectly arranged
Simplicity: nakedness, abstract, essential skeletal, bluntness
Richness: differentiation, complexity, intricacy, totality
Effortlessness: ease; lack of strain, striving, or difficulty
Playfulness: fun, joy, amusement
Self-sufficiency: autonomy, independence, self-determining
TQM (total Quality Approach)
Quality is a strategic issue
Plan for quality
Quality is everybodys responsibility
Strive for zero defects
Quality means conformance to requirements that meet or exceed customers
expectations
Scrap and reworking are only a small part of the costs of nonconformance

Traditional Quality Approach

Quality is a tactical issue
Screen for quality
Quality is the responsibility of the quality control department
Some mistakes are inevitable
Quality means inspection Scrap and reworking are the major costs of poor
quality )

Japanese Type Organization

1.
2.
3.
4.
5.

Lifetime employment
Collective decision making
Collective responsibility
Slow evaluation and promotion
Implicit (implied or understood though not plainly or directly expressed)
control mechanisms
6. Non-specialized career path
7. Holistic concern for employee as a person
American Type Organization
1. Short-term employment
2. Individual decision making
3. Individual responsibility
4. Rapid evaluation and promotion
5. Explicit (clear, precise, unambiguous) control mechanisms
6. Specialized career path
7. Segmented concern for employee as an employee.
Theory Z
William Ouchi, a management researcher developed this new theory of
management in the 1980s
Theory Z is a business management theory that integrates Japanese and American
business practices. The Japanese business emphasis is on collective decision
making, whereas the American emphasis is on individual responsibility.

Theory Z Type Organization

1.
2.
3.
4.
5.
6.
7.

Long-term employment
Consentual, participative decision-making
Individual responsibility
Slow evaluation and promotion
Implicit, informal control with explicit, formalized measures
Moderately specialized career path
Holistic concern, including family

Japanese Business Practices contd

Japanese business practices have been successfully exported to the United States
at Hondas plant in Marysville, Ohio. Unlike most American plants, where there is a
clear distinction between workers and managers, all Honda employees are
empowered to make decisions. As a result, Honda employees are energetic and
committed to producing high-quality products. They turn out one Honda Accord per
minute. This high level of productivity is attributed to several innovative (new,
original, groundbreaking) management practices, where workers are organized by
teams rather than by function.
Japanese managers encourage more employee participation in decision making.
Japanese managers show deeper concern for the personal well-being of their
employees.
Rather than present their workers with demands, Japanese managers tend to
facilitate decision making by teams of workers
Contemporary viewpoints
Knowledge Management (KM)
Art of creating value from organizations intangible assets.
The cultivation of a learning culture where organizational members systematically
gather and share knowledge with others in order to achieve better performance.
Learning Organization (LO)
An organization that has developed the capacity to continuously learn, adapt and
change.
({This example uses a bank savings account to show how data, information and
knowledge relate to the principal, interest rate and interest.
Data.The numbers 100 or 5%, completely out of context, are just pieces of data.
Interest, principal, and interest rate, out of context, are not much more than
data as each has multiple meanings which are context dependent.
Information. If I establish a bank savings account as the basis for context,
then interest, principal, and interest rate become meaningful in that context with
specific interpretations. Principal is the amount of money, $100, in the savings
account. Interest rate, 5%, is the factor used by the bank to compute interest on
the principal.
Knowledge. If I put $100 in my savings account, and the bank pays 5% interest
yearly, then at the end of one year the bank will compute the interest of $5 and
add it to my principal and I will have $105 in the bank.
This pattern represents knowledge, which, when I understand it, allows me to
understand how the pattern will evolve over time and the results it will produce. In
understanding the pattern, I know and what I know is knowledge. If I deposit more
money into my account, I know that I will earn more interest, while if I withdraw
money from my account, I know that I will earn less interest.

Knowledge management is the collection of processes that govern the creation,

dissemination, and utilization of knowledge. Brian
2. Knowledge management is the management of the organization towards the
continuous renewal of the organizational knowledge
base this means, for example, the creation of supportive organizational
structures, facilitation of organizational members,
putting IT-instruments with emphasis on teamwork and diffusion of knowledge
(e.g., groupware) into place. Thomas Bertels
3. Knowledge management is an audit of intellectual assets that highlights
unique sources, critical functions and potential bottlenecks which hinder knowledge
flows to the point of use. Denham Grey
4. Knowledge management consists of activities focused on the organization
gaining knowledge from its own experience and from the experience of
others, and on the judicious application of that knowledge to fulfill the mission
of the organization. Gregory Wenig
5. Knowledge management is a business activity with two primary aspects:
(a) treating the knowledge component of business activities as an explicit concern
of business reflected in strategy, policy, and practice at all levels of the
organization; and (b) making a direct connection
between an organizations intellectual assets both explicit (recorded) and tacit
(personal know-how) and positive business results. Rebecca
O. Barclay and Philip C. Murray
The Five Disciplines
The five disciplines of what the book refers to as a "learning organization" discussed
in the book are:
"Personal mastery is a discipline of continually clarifying and deepening our
personal vision, of focusing our energies, of developing patience, and of seeing
reality objectively."[2]
"Mental models are deeply ingrained assumptions, generalizations, or even pictures
of images that influence how we understand the world and how we take action." [2]
"Building shared vision - a practice of unearthing shared pictures of the future that
foster genuine commitment and enrollment rather than compliance." [2]
"Team learning starts with dialogue, the capacity of members of a team to suspend
assumptions and enter into genuine thinking together." [2]
"Systems thinking - The Fifth Discipline that integrates the other four.")}

TQMTotal Quality Management

Result of study conducted in the 1950s by W. Edwards Deming who began

studying how companies ensure that the products they produce are not
defective. He came up with a mathematically based approach to quality
control that became known as Total Quality Management, which is a system
of management based on involving all employees in a constant process of
improving quality and productivity by improving how they work. This
approach focuses on totally satisfying both customers and employees.

TQM Demings Fourteen Points

1. Create consistent purpose for improving products and services in order to
remain competitive.
2. Adopt a new philosophy. We are now living in a new economic age.
3. Stop depending on mass inspection. Require instead that quality is built in.
4. Consider quality as well as price in awarding business.
5. Constantly improve the system of production and service.
6. Institute a vigorous program of job training.
7. Adopt and implement leadership. Focus on quality, not productivity.
8. Drive out fear so that everyone may work effectively.
9. Break down barriers between departments.
10.Eliminate numerical goals, posters, slogans, for the work force that ask for
new levels of productivity without providing new methods.
11.Eliminate work standards that prescribe numerical quotas.
Remove barriers that stand between the hourly worker and his or her right to pride
of workmanship.
13.Encourage education and self-improvement for everyone.
14.Create a structure in top management that will work every day to achieve the
above 13 points.
Most companies that have adopted TQM found that the performance of their
companies improved.
Promoting innovation
Each management viewpoint provides a contribution to managing innovation:

Classical
Behavioural

 Quantitative
Contemporary
Modern Management Today
An Integrating Framework
Is a complementary way of thinking about theories of management.
Involves recognition of current system and subsystem
interdependencies, environmental influences, and the situational
nature of management.

Classes of Organizations Theories

Rational Early theories, talrism, efficient way , Factory line,
Natural Modern Era, natural system , lack of consensus , Conflict ,
Open Dependent on Environment
Contemporary Issues and Challenges

A sluggish and worrisome economy that limits growth

Management of an increasingly diverse workforce

Employee privacy

Technology that promotes telecommuting

The role of the Internet in business strategy

Operating and competing in diverse global markets

Ethics in corporate governance and social responsibility

Quality as the basis for competition, increased productivity, and lower costs

The shift toward a service economy