Chapter 2:

Management Learning:
Past to Present

Management 3e - Chapter 2

12

Chapter 2 Learning Objectives

List the characteristics and principles of
each of the three classical management
approaches.
Describe the principles of the various
behavioural management approaches.
Explain the foundations of modern
management thinking.

Management 3e - Chapter 2

23

Management
How do you think the roles of managers
have changed and will be changing in the
future.

How do you think the management of

people has changed?
WHY?
3

KPMG Survey, Journal of

Engineering , Dec 2013.
Over 90 Percent of U.S. Companies Are Changing
Existing Business Models
More than 9 out of 10 - to meet customer demands,
embrace and leverage disruptive technologies, and
remain competitive in the global business landscape
Executives from more than 900 U.S.-based
multinational companies - 93 percent of
organizations are changing business models.

Reasons for business model changes

changing customer focus and buying patterns
new technologies
domestic competition
a changing global environment
balancing growth with shrinking budgets, while
raising efficiency, foreign competitors, a
widening global footprint and industry
consolidation
51 percent say their organization's transformation
approach continually aligns their business model
with their strategy

Classical Management Approaches

Major branches in the classical approach to management.

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65

Classical Management Approaches

Scientific management (Frederick Taylor)

Workers were taught and helped by supervisors to always

do their jobs in the right ways

To improve the productivity

time study
Develop rules of motion, standardized work implements,
and proper working conditions for every job.

Carefully select workers with the right abilities for the

job.

Carefully train workers and provide proper incentives.

Support workers by carefully planning their work and
removing obstacles.

Make results-based compensation a performance

incentive
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Classical Management Approaches

Scientific management (the Gilbreths)

Motion study
Science of reducing a job or task to its basic
physical motions.

Eliminating wasted motions improves

performance.

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87

Classical Management Approaches

Administrative principles (Henri Fayol)

1. Division of labour- specialization

2. Authority- managers right to give orders
3. Discipline- obedience and respect
4. Unity of command- employee reporting to 1 manager
5. Unity of direction- single plan
6. Subordination of individual interests- work issues
7. Remuneration- fair compensation
8. Centralization- decision making at the top
9. Scalar chain- formal chain of command
10. Order- place for everything
11. Equity- kind and fair treatment
12. Personnel tenure- lifetime employment
13. Initiative- work with energy
14. Esprit de corp- harmony and morale
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99

Classical Management Approaches

Administrative principles (Henri Fayol)

rules of management:
Foresight to complete a plan of action for the
future.
Organization to provide and mobilize resources
to implement the plan.
Command to lead, select, and evaluate workers to
get the best work toward the plan.
Coordination to fit diverse efforts together and
ensure information is shared and problems solved.
Control to make sure things happen according to
plan and to take necessary corrective action.

Management 3e - Chapter 2

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10

Classical Management Approaches

Administrative principles (Henri Fayol) key

principles of management:
Scalar chain there should be a clear and unbroken

line of communication from the top to the bottom of

the organization.

Unity of command each person should receive

orders from only one boss.

Unity of direction one person should be in charge of

all activities with the same performance objective.

Management 3e - Chapter 2

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11

Classical Management Approaches

Bureaucratic organization (Max Weber)

Bureaucracy
An ideal, intentionally rational, and very
efficient form of organization.

Based on principles of logic, order, and

legitimate authority.

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12
12

Classical Management Approaches

Characteristics

of bureaucratic
organizations:
Clear division of labour
Clear hierarchy of
authority
Formal rules and
procedures
Impersonality
Careers based on merit

Possible
disadvantages of
bureaucracy:
Excessive paperwork or red
tape
Slowness in handling problems
Rigidity in the face of shifting
needs
Resistance to change
Employee apathy

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13

Behavioural Management Approaches

Behavioural Management - Human

Resource approaches include:

Folletts notion of organizations as communities
Hawthorne studies

Maslows theory of human needs

McGregors Theory X and Theory Y
Argyriss theory of adult personality

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14

Behavioural Management Approaches

Foundations in the behavioural or human resource
approaches to management

Management 3e - Chapter 2

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15

Behavioural Management Approaches

Organizations as Communities(Mary Parker

Follett)
Groups and human cooperation:
Groups are mechanisms through which individuals
can combine their talents for a greater good.
Organizations are cooperating communities of
managers and workers.
Managers job is to help people in the organization
cooperate and achieve an integration of interests.

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16

Behavioural Management Approaches

Organizations as Communities (Mary Parker

Follett)

Forward-looking management insights:

Making every employee an owner creates a sense of

collective responsibility (precursor of employee
ownership, profit sharing, and gain-sharing)

Business problems involve a variety of inter-related

factors (precursor of systems thinking)

Private profits relative to public good (precursor of

managerial ethics and social responsibility)
Management 3e - Chapter 2

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17

Behavioural Management Approaches

Hawthorne studies

Initial study examined how economic incentives

and physical conditions affected worker output.

No consistent relationship found.

Psychological factors influenced results.

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18

Behavioural Management Approaches

Hawthorne studies (cont.)

Relay assembly test-room studies

Manipulated physical work conditions to assess

impact on output.
Designed to minimize the psychological factors of
previous experiment.
Factors that accounted for increased productivity:
Group atmosphere
Participative supervision

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19

Behavioural Management Approaches

Hawthorne studies (cont.)
Employee attitudes, interpersonal relations and
group processes.
Some things satisfied some workers but not
others.
People restricted output to adhere to group
norms.
Lessons from the Hawthorne Studies:
Social and human concerns are keys to
productivity.
Hawthorne effect people who are singled
out for special attention perform as expected.

Management 3e - Chapter 2

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20

Behavioural Management Approaches

Maslows hierarchy of human needs.

Management 3e - Chapter 2

21
22

Behavioural Management Approaches

Maslows theory of human needs

Deficit principle
A satisfied need is not a motivator of behaviour.
Progression principle
A need becomes a motivator once the preceding

lower-level need is satisfied.

Both principles cease to operate at self-actualization
level.

Management 3e - Chapter 2

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23

Behavioural Management Approaches

McGregors Theory X McGregors Theory Y
assumes that workers are:
assumes that workers:

Dislike work
Lack ambition
Are irresponsible
Resist change
Prefer to be led

Willing to work
Capable of self control
Willing to accept responsibility
Imaginative and creative
Capable of self-direction

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24

Behavioural Management Approaches

Implications of Theory X and Theory Y:

Managers create self-fulfilling prophecies.

Theory X managers create situations where workers
become dependent and reluctant.

Theory Y managers create situations where workers

respond with initiative and high performance.

Central to notions of empowerment and selfmanagement.

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25

Behavioural Management Approaches

Argyriss theory of Adult Personality

Classical management principles and practices inhibit

worker maturation and are inconsistent with the
mature adult personality.

Taylor
Weber
Fayol

no self-actualization
dependent and passive workers
psychological failure

Management practices should accommodate the

mature personality by:

Increasing task responsibility

Increasing task variety
Using participative decision making
Management 3e - Chapter 2

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26

Modern Management Foundations

Foundations for continuing developments in

management

Quantitative analysis and tools

Systems view of organizations

Contingency thinking
Commitment to quality
Learning organizations
Evidence-based management
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27

Modern Management Foundations

Management science or operations

research

The scientific applications of mathematical

techniques to management problems
Mathematical forecasting makes future
projections useful for planning
Inventory modeling controls inventories
mathematically
Linear programming calculates how to
allocate scarce resources among competing uses

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28

Modern Management Foundations

Management science or operations research

Queuing theory allocates service

personnel/workstations to minimize service cost and

customer waiting time
Network models break large tasks into smaller
components for better coordination

Operations management is the study of how

organizations produce goods and services most
efficiently and effectively

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29

Modern Management Foundations

Organizations as Systems

System
Collection of interrelated parts that function
together to achieve a common purpose.

Subsystem
A smaller component of a larger system.
Open systems
Organizations that interact with their
environments in the continual process of
transforming resource inputs into outputs.

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30

Modern Management Foundations

Organizations as complex networks of interacting
subsystems.

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30
31

Modern Management Foundations

Contingency thinking

Tries to match managerial responses with

problems and opportunities unique to different
situations.
Especially individual or environmental
differences.
No one best way to manage.
Appropriate way to manage depends on the
situation (strategy, environment, technology, size,
age)

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32

Modern Management Foundations

Quality management

Managers and workers in progressive organizations are

quality conscious.

Quality and competitive advantage are linked.

Total quality management (TQM)
Comprehensive approach to continuous quality
improvement for a total organization.

Creates context for the value chain.

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33

Modern Management Foundations

Evidence-Based Management
Making management decisions on hard facts about what
really works

Evidence-Based Positive Human Resource Management

Practices

Employment security
Selective hiring
Self-managing teams
High pay based on merit
Training and development
Reduced status distinctions
Shared information
Management 3e - Chapter 2

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39

Modern Management Foundations

21st Century Manager
Managers have to excel as never before to meet the
expectations held of them and of the organization they lead.

Attributes of a 21st Century Manager

Global strategist understanding the interconnections
among nations, cultures and economies
Master of technology comfortable with information
technology
Inspiring leader attracting and motivating workers to
achieve high-performance culture
Model of ethical behaviour acting ethically in all ways

Management 3e - Chapter 2

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40

Cases
MORNING STAR
Which management approaches are applied at
Morning Star?
Which elements of change in the organizations
can we see at Morning Star?

35

Cases
Adapting to a Workforce without
Borders
Which implications of todays workplace do
you find in this article?
Which management approaches are used
in hiring?

36

Cases
GOOGLE
Which management approaches are
applied at GOOGLE?
Which elements of change in the
organizations can we see at GOOGLE?
Which of the skills of Katz do GOOGLEs 8
key behaviors correspond to?
How do yo think GOOGLE is an example of
high-performance organization?
37

Preparations for Next Week

Schermerhorn & Wright Chapter 3
Sobeys Without Sobey, Canadian Business,
Mar. 2014, 87 (2)
Drinking Up, Forbes, Oct. 30, 2006
Right Up the Middle: How the Israeli
Firms Go Global, HBR, May 2014

38

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