Modern Management,12th Edition

2
chapter

Managing: History and

Current Thinking
 Student Learning Objectives
From studying this chapter, students are expected to acquire:

1. An understanding of the classical approach to

management.

2. An appreciation for the work of Frederick W. Taylor,

Frank and Lillian Gilbreth, Henry L. Gantt, and
Henri Fayol.

3. An understanding of the behavioral approach to

management.

4. An understanding of the studies at the Hawthorne

Works and the human relations movement.
 Student Learning Objectives
From studying this chapter, students are expected to acquire:

5. An understanding of the management science

approach to management.

6. An understanding of how the management

science approach has evolved.

7. An understanding of the system approach to

management.
 Student Learning Objectives

From studying this chapter, students are expected to acquire:

8. Knowledge about the learning organization

approach to management.

9. An understanding of how triangular management

and the contingency approach to management
are related.
 There are different approaches to analyzing and
reacting to management situations. Donnelly, Gibson
and Evancevich synthesize the ideas of Koontz,
O’Donnell and Weihrich with those of Haynes and
Massie and identify the following three basic
approaches:

 1. Classical Approach,
 2. Behavioral Approach
 3. Management Science Approach

 Other distinct approaches are the System Approach,

the Contingency Approach and the Learning
Organization Approach
The Classical Approach

The classical approach to management is a

management approach that emphasizes
organizational efficiency to increase
organizational success.
Division of Classical Approach to Management into Two
Areas and the Major Contributors to Each Area
Classical
Approach to
Management

Lower-Level Comprehensive
Management Analysis of
Analysis Management

Major
Contributors Major
Frederick W. Taylor Contributor
Frank and Lillian Gilbreth
Henri Fayol
Henry L. Gantt
The Scientific Management Approach:

 All of the major proponents of this approach had an

engineering background. They are
 - Frederick W Taylor, - Frank B Gilbreth and
Lillian M Gilbreth
 - Henry L Gantt, - Harrington Emerson
F W Taylor (1856–1915)
 Born in Philadelphia.
 Trained as a Mechanical Engineer.
 1878: Joined Midvale Steel Company.
 1886: Became a member of American Society of
Mechanical Engineers (ASME).
 He also assumed management positions in the
Bethlehem Steel and Cramps Shipbuilding Company.
 He wrote books titled Shop Management (1903), and
The Principles of Scientific Management (1911).
With an aim to determine a ‘fair day’s work’ and a ‘fair
day’s pay’, he started analyzing jobs of various workers
(e.g., lathe work at Midvale Steel, material shoveling at
Bethlehem Steel, etc.) and concluded that the key
management functions should include the following:
 Examining variables (components or factors) affecting a
task. For example, equipment, distance, height, load,
fatigue, etc.
 Developing the most effective method of doing a task on
the basis of optimal relationships among variables. For
example, for the task of material shoveling the effective
method should be based on the proper matching of shovel
size with man, materials, height, and the distance of
materials were to be thrown. In this purpose he also
proposed using time and motion studies.
Contd.
 Selecting workers according to the physiological and
psychological requirements of the job.
 Training workers in most effective methods.
 Rewarding successful completion of the task by using
an incentive wage system based on output (The
Differential Wage Rate System: No minimum wage, a
piece-rate up to the target output, and an increased
piece-rate for all units once the target is surpassed).
The principles of scientific management:

 Replacing rule of thumb with science, i.e., organized

knowledge,
 Harmony and cooperation among groups (i.e., among
workers, managers, and owners),
 Working for maximum output rather than restricted
output, and
 Developing all workers to the fullest extent possible for
their own and their firm’s highest prosperity.
 Frank Gilbreth (1868–1924) and Lillian Glibreth (1878–
1972)
Motion study: A motion study finds the best way to
accomplish a task by analyzing the movements nescessary
to perform the taks.

 Henry L. Gantt (1861–1919)

(a). Scheduling Innovation
The Gantt chart
(b). Rewarding Innovation
Gantt believed that worker compensation needed to
correspond not only to production through the piece-rate
system but also to overproduction through the bonus
system.
The Classical Organization or the Administrative
Management Approach

Major contributors are:

 Henri Fayol
 Max Weber
 James D Mooney and Alan C Reiley
 Chester I Barnerd
 Lindall Urwick
 Alvin Brown
 Henri Dennison
 Luther Gulick
 Oliver Sheldon
Henri Fayol
 Born in France.
 Obtained a degree in Mining Engineering from
National School of Mines.
 Wrote Administration Industrielle et Generale (1916) in
French which was translated in English as General and
Industrial Management (1949) in the US.
 His work experience as a mining engineer was of about
30 years in various capacities.
According to his view point the managerial or
administrative function includes the following:
 Planning: Charting future courses of action.
 Organizing: Determining the structure of task and
authority. To accomplish a task proper mix of human and
non-human resources is necessary.
 Commanding: Directing the activities of the subordinates
which requires thorough knowledge about personnel and
the agreements with them, communication, evaluating
organizational structure and subordinates, and bringing
necessary changes in the organization.
 Coordinating: Bringing individual efforts together and
directing them toward a common objective.
 Controlling: Making things happen the way they were
thought to happen.
He proposed some general principles of management
that can be utilized to guide managerial behavior in all
organizational situations
 Division of work: It is needed to ensure high degree
of specialization and thereby efficiency in the
organization
 Authority: Both formal and informal authorities are
needed to carry out managerial responsibilities.
 Discipline: All should comply with the rules
governing the organization. Worthiness of leaders is
needed to ensure obedience to agreements reached
between the parties in the organization.
Contd.
 Unity of command: Each subordinate should receive command
from and report to one and only one superior. Otherwise there
will be severe breakdown of authority and discipline. This
principle would eliminate the causes of interdepartmental and
interpersonal conflicts.
 Unity of direction: Similar activities in an organization should
be grouped together under one manager. It derives from a sound
organizational structure, which is departmentalized in an
appropriate manner. It is important to note that unity of
command refers to the functioning of personnel within an
organization structure, on the other hand, unity of direction
refers to the organization itself. Unity of direction does not
ensure unity of command, but unity of command cannot exist
without the unity of direction.
Contd.
 Subordination of individual interests to the general
interest (i.e., organizational interests).
 Remuneration: It should be fair both the employees and
to the organization.
 Centralization: It should be related to the character of the
managers, the reliability of the subordinates, and the
nature of the organization.
 Scalar chain: It refers to a chain of authority that extends
from the top to the bottom of the organization and is
followed all the times by all members of the organization.
It also serves as a channel of communication between
superiors and subordinates.
Contd.
 Order: It refers to the coordination of human and non-
human resources so as to be available at right time and
place.
 Equity: Managers should be kind to their subordinates to
enforce established rules in the organization.
 Stability of tenure of personnel.
 Initiative: Subordinates should be encouraged and given
freedom to take initiatives, to think through and
implement a plan of action.
 Esprit de Corps: It refers to the unity of efforts through
harmony of interest, teamwork, and a sense of
togetherness that should be fostered and maintained in the
organization.
Max Weber (1864–1920)
The primary characteristics of Weber’s bureaucracy
are as under:
• Specialization of labor
• Hierarchy of authority
• Procedures and Rules
• Impersonality of Discipline
• Promotion and Selection by Competence
The Behavioral Approach

The behavioral approach to management is

a management approach that emphasizes
increasing organizational success by
focusing on human variables within the
organization.
The Hawthorne Studies
 The behavioral approach is usually described as
beginning with a series of studies conducted between
1924 and 1932, which investigated the behavior and
attitudes of workers at the Hawthorne (Chicago)
Works of the Western Electric Company. Accounts of
the Hawthorne Studies are usually divided into two
phases: the relay assembly test room experiments and
the bank wiring observation room experiment.
A. The Relay Assembly Test Room
Experiments
 The experimenters believed that if productivity was
studied long enough under different working
conditions, those working conditions maximizing
production would be found.

 The experimenters concluded that human factors

within organizations could significantly influence
production.
A. The Relay Assembly Test Room
Experiments
 The results of the experiments surprised the
researchers: No matter what conditions employees
were exposed to, production increased. They found no
consistent relationship between productivity and
lighting intensity. An extensive interviewing campaign
was undertaken to determine why the subjects
continued to increase production under all lighting
conditions.
A. The Relay Assembly Test Room
Experiments
 The following are the main reasons, as formulated from the
interviews:
1. The subjects found working in the test room enjoyable.
2. The new supervisory relationship during the experiment
allowed the subjects to work freely, without fear.
3. The subjects realized that they were taking part in an
important and interesting study.
4. The subjects seemed to become friendly as a group.

 The experimenters concluded that human factors within

organizations could significantly influence production.
B. The Bank Wiring Observation Room
Experiment
 The purpose of the bank wiring observation room
experiment was to analyze the social relationships in a
work group.
 The research concluded that social groups in
organizations could effectively exert enough pressure
to influence individuals to disregard monetary
incentives.
Recognizing the Human Variable
 The Hawthorne studies pointed up the need to study
the human variable, since it could drastically increase
and decrease productivity.
D. The Human Relations Movement

 A people oriented approach to management.

Management stimulates high worker commitment and
productivity through human relation skills, the ability
to work with people in a way to enhance organizational
success.
The Human Relations Movement

The human relations movement is a people-

oriented approach to management in which
the interaction of people in organizations is
studied to judge its impact on organizational
success.
The Management Science
Approach
 Churchman, Ackoff, and Arnoff define the management
science, or operations research (OR), approach as
 (1) an application of the scientific method to problems
arising in the operation of a system and
 (2) the solution of these problems by solving mathematical
equations representing the
 system.
 The management science approach suggests that
managers can best improve their organizations by using
the scientific method and mathematical techniques to
solve operational problems.
The Management Science Approach

The management science approach is a

management approach that emphasizes the
use of the scientific method and quantitative
techniques to increase organizational
success.
The Management Science Approach

 The management science, or operations research, approach

can be traced to World War II, an era in which leading
scientists were asked to help solve complex operational
problems in the military. The term management science was
actually coined by researchers of a UCLA–RAND academic
complex featuring academic and industry researchers working
together to solve operations problems. These early OR groups
typically included physicists and other “hard” scientists
who used the problem-solving method with which they
had the most experience: the scientific method.
 The Management Science Approach
The scientific method dictates that scientists:
1. Systematically observe the system whose behavior must be
explained to solve the problem.
2. Use these specific observations to construct a generalized
framework (a model) that is consistent with the specific
observations and from which consequences of changing the
system can be predicted.
3. Use the model to deduce how the system will behave under
conditions that have not been observed but could be
observed if the changes were made.
4. Finally, test the model by performing an experiment on the
actual system to see whether the effects of changes predicted
using the model actually occur when the changes are made.
Characteristics of Management Science
Applications
 First, the management problems studied are so
complicated that managers need help analyzing a large
number of variables.
 Second, a management science application generally
uses economic implications as guidelines for making a
particular decision.
 Third, the use of mathematical models to investigate
the decision situation is typical in management
science applications.
 The fourth characteristic of a management science
application is the use of computers.
The Contingency Approach

The contingency approach to management

is a management approach that emphasizes
that what managers do in practice depends
on a given set of circumstances--a situation.
The System Approach

The system approach to management is a

management approach based on general
system theory--the theory that to understand
fully the operation of an entity, the entity
must be viewed as a system. This requires
understanding the interdependence of
its parts.
System

A system is a number of
interdependent parts
functionning as a whole for
some purpose.
 ClosedSystem
 Open System
The Open Management System

Input
Customers Government

Process

Competitors Suppliers

Output
Triangular Management

Triangular management is a management

approach that emphasizes using information
from the classical, behavioral, and manage-
ment science schools of thought to manage
the open management system.
Triangular Management Model

ENVIRONMENT

BEHAVIORALLY BASED INFORMATION

The learning organization
 A learning organization is an organization that does
well in creating, acquiring, and transferring knowledge,
and in modifying behavior to reflect new knowledge.
 Learning organizations emphasize systematic problem
solving, experimenting with new ideas, learning from
experience and past history, learning from the
experiences of others, and transferring knowledge
rapidly throughout the organization.
 Managers attempting to build a learning organization
must create an environment conducive to learning and
encourage the exchange of information among all
organization members.
The learning organization
 According to Peter Senge (1990: 3) learning
organizations are:
 …organizations where people continually expand their
capacity to create the results they truly desire, where
new and expansive patterns of thinking are nurtured,
where collective aspiration is set free, and where
people are continually learning to see the whole
together.
Senge’s five features for building a learning
organization:
 1. Systems thinking: Every organization member understands his or
her own job and how the jobs fit together to provide final products to
the customer.
 2. Shared vision: All organization members have a common view of
the purpose of the organization and a sincere commitment to
accomplish the purpose.
 3. Challenging of mental models: Organization members routinely
challenge the way business is done and the thought processes people
use to solve organizational problems.
 4. Team learning: Organization members work together, develop
solutions to new problems together, and apply the solutions together.
Working as teams rather than as individuals will help organizations
gather collective force to achieve organizational goals.
 5. Personal mastery: All organization members are committed to
gaining a deep and rich understanding of their work. Such an
understanding will help organizations successfully overcome
important challenges that confront them.