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HistoryofManagementThought TheEvolutionofManagementTheory Uponcompletingthischapter,youshouldbeableto:

Explainthesettinginwhichmanagementtheoryfirstdeveloped. Describethewaysinwhichatheorycanbeuseful. Distinguishthescientificmanagementschool,theclassicalorganizationtheoryschool,the

behavioralschool,andthemanagementscienceschoolofmanagementtheory. Understandthehistoricalcontextinwhichthesystemsapproach,thecontingencyapproach,and

thedynamicengagementapproachtomanagementtheoryhavedeveloped.THEAPOSTLEOFMASSPRODUC'TION

HenryFordandtheModelhavelongbeensymbolsoftheindustrialage.EventhesubsequentgrowthandsuccessofFord’srival,GeneralMotors,wasdueinlargeparttoGM’sneedtofindaninnovativeresponsetotheModelT.Inlargemeasure,themanagerialapproachofHenryFord,aswellashispreferencesinmanagerialtheory,isaparadigmofmuchthatwasconstructiveandmuchthatwasimperfect‐‐inearlyapproachestomanagement

ThesonofapoorIrishimmigrant,HenryFordwasbornin1863andgrewuponafarminruralMichigan.Hewasfascinatedbymachineryandwasquiteskilledinrepairingandimprovingalmostanymachine.HestartedtheFordMotorCompanyin1903,andby1908,theModelTwasbuilt.

Inthepartofthecenturywhenautomobileswereintroduced,theywereasymbolofstatusandwealth,thenearexclusiveprovinceoftherich.Fordintendedtochangethat:theModelTwastobeforthemasses‐‐acarthatvirtuallyanyonecouldafford.Heunderstoodthattheonlywaytomakesuchacarwastoproduceitathighvolumeandlowcost.Fordfocusedhisfactoryeffortsonefficiency,mechanizingwhereverpossible,andbreakingdowntasksintotheirsmallestcomponents.Oneworkerwouldperformthesametaskoverandover,producingnotafinishedpart,butoneoftheoperationsnecessaryfortheproductionofthewhole;theincompletepartwouldthenbepassedontoanotherworker,whowouldcontributeasuccessiveoperation.Fordwasabletoachieveremarkableefficiencies:AlthoughthefirstModelTtookover12½hourstoproduce,only12yearslater,in1920,FordwasproducingoneModelTeveryminute.By1925,atthepeakofthecar’spopularity,aModelTwasrollingoffFord’sassemblylinesattherateofoneevery5seconds.

However,mechanizationoftheplanthadsomeadverseeffects.ThefasterFordpushedhisworkers,themoredisgruntledtheybecame.In1913,turnoverwas380percent,andFordhadtohiretentimesmoreworkersthanheneededjusttokeepthelinemoving.Inanactionthatatthetimewasunprecedented,Fordsimplydecidedtodoublewagesinordertogetthebestpeopleandmotivate

themtoworkevenharder.Inthedaysfollowingtheannouncementthatwageswerebeingdoubled,thousandsandthousandsofmencametotheFordplantinsearchofwork.Policehadtobecalledintocontrolthecrowds.

Whenhediedin1945,Fordwasworthover$600million.HeleftanindeliblemarkonbothAmericanindustryandsociety.Hisnameissynonymouswithmassproductionandthedevelopmentofmodernmanagementtheory.

MostpeopleassociateHenryFordwiththeModelT,theaffordablemass‐producedautomobilethatchangedsociety.ButFordisalsoimportantasamanagementthinkerbecausehedevelopedideasabouthoworganizationsfunction.Moreover,Fordhiredtheorists,suchasFrederickWinslowTaylor,andgavethemthechancetodeveloptheirmanagementtheories.Inthischapterwewillseehowdifferentmanagementtheoriesdevelopedandcontinuetoevolve.Butfirstwe’lllookatsomeearlyideasabouthowtorunorganizationseffectively.

EARLYTHINKINGABOUTMANAGEMENT

Peoplehavebeenshapingandreshapingorganizationsformanycenturies.Lookingbackthroughworldhistory,wecantracethestoriesofpeopleworkingtogetherinformalorganizationssuchastheGreekandRomanarmies,theRomanCatholicChurch,theEastIndiaCompany,andtheHudsonBayCompany.Peoplehavealsolongbeenwritingabouthowtomakeorganizationsefficientandeffective‐‐sincelongbeforetermssuchas"management"cameintocommonusage.TwoprominentandinstructiveexamplesarethewritingsleftforusbyNiccoloMachiavelliandSunTzu.

MACHIAVELLIANDSUNTZU:

EARLYSTRATEGISTS

Althoughtheadjective'Machiavellian'isoftenusedtodescribecunningandmanipulativeopportunistsMachiavelliwasagreatbelieverinthevirtuesofarepublic.ThisisevidentinDiscourses,abookMachiavelliwrotein1531whilehelivedintheearlyItalianrepublicofFlorence.Theprincipleshesetforthcanbeadaptedtoapplytothemanagementoforganizationstoday.

Anorganizationismorestableifmembershavetherighttoexpresstheirdifferencesandsolvetheirconflictswithinit

Whileonepersoncanbeginanorganization,"itislastingwhenitisleftinthecareofmanyandwhenmanydesiretomaintainit."

Aweakmanagercanfollowastrongone,butnotanotherweakone,andmaintainauthority. Amanagerseekingtochangeanestablishedorganization"shouldretainatleastashadowofthe

ancientcustoms."AnotherclassicworkthatoffersinsightstomodemmanagersisTheArtofWar,writtenbytheChinesephilosopherSunTzumorethan2,000yearsago.ItwasmodifiedandusedbyMaoZedong,whofoundedthePeople'sRepublicofChinainl949.AmongSunTzu'sdicturarethefollowing: Whentheenemyadvances.weretreat! whentheenemyhaltsweharass!

Whentheenemyseekstoavoidbattle,weattack! Whentheenemyretreats,wepursue!Althoughtheserulesweremeanttoguidemilitarystrategy,theyhavebeenusedwhenplanningastrategytoengagebusinesscompetitors.KeepSunTzuinmindasyoustudythechapteraboutstrategyandplanning.AlthoughneitherMachiavellinorSunTzuwastryingtodevelopatheoryofmanagementperse,theirinsightsteachusanimportantlessonabouthistory.ManagementisnotsomethingthatoriginatedintheUnitedStatesinthiscentury.Wemustbecarefulnottoputonhistoricalandculturalblinderswhen,fromtheperspectiveofthisparticulartimeandplace,wethinkaboutthemanagementoforganizations.Beforegoingontoourdiscussionofthemajormanagementtheories,let'stakeamomenttolookatthereasonsstudyingmanagementtheorywillhelpyouunderstandmanagementandtoday’scomplexorganizations.

WHYSTUDYMANAGEMENTTHEORY?

Theoriesareperspectiveswithwhichpeoplemakesenseoftheirworldexperiences.Formally,atheoryisacoherentgroupofassumptionsputforthtoexplaintherelationshipbetweentwoormoreobservablefacts.JohnClancycallssuchperspectives"invisiblepowers"toemphasizeseveralcrucialusesoftheories,the"unseen"waysinwhichweapproachourworld.

First,theoriesprovideastablefocusforunderstandingwhatweexperience.Atheoryprovidescriteriafordeterminingwhatisrelevant.ToHenryFord,alargeandcompliantworkforcewasonerelevantfactorashetheorizedabouthisbusiness.Inotherwords,histheoryofmanagementincluded,amongotherthings,thisassumptionaboutthesupplyoflabor.

Second,theoriesenableustocommunicateefficientlyandthusmoveintomoreandmorecomplexrelationshipswithotherpeople.Imaginethefrustrationyouwouldencounterif,indealingwithotherpeople,youalwayshadtodefineeventhemostbasicassumptionsyoumakeabouttheworldmwhichyoulive!BecauseFordandhismanagersfullyunderstoodFord'stheoryaboutmanufacturingautomobiles,theycouldinteracteasilyastheyfacedday‐to‐daychallenges.

Third,theoriesmakeitpossible‐‐indeed,challengeus‐‐tokeeplearningaboutourworld.Bydefinition,theorieshaveboundaries;thereisonlysomuchthatcanbecoveredbyanyonetheory.Onceweareawareofthis,wearebetterabletoaskourselvesiftherearealternativewaysoflookingattheworld(especiallywhenourtheoriesnolongerseemto"fit"ourexperience)andtoconsidertheconsequencesofadoptingalternativebeliefs.Twocasesareinstructive.

Oneexampleinvolvesworldpolitics.Foryears,whatmightbecalledatheoryoftheColdWardominateddiplomaticactivitybetweentheUnitedStatesandtheSovietUnion.Duringthoseyears,mostdiplomatsandmilitaryofficialsdidnotconsiderwhattheworldwouldbelikeiftheColdWarended.Now,however,the"ColdWar"theorynolongerfitsourexperience,andgovernmentandmilitaryofficials,aswellasmanagersoforganizations;arescramblingtodevelopnewtheoriesfordealingwithformerenemiesonamorecooperativebasis.Forexample,thebreakupoftheSoviet

UnionandRussia'sstrugglestowardfinancialstabilityhaveleftsomeoftheworld'stopscientistsunemployed,strugglingwithpoorequipment,andwillingtoworkforlittlepay.InthisbreachU.S.firmssuchasCorning,AmericanTelephoneandTelegraph,andUnitedTechnologieshavecapitalizedontheopportunitythispresentsbyfundingresearchfacilitiesinRussia.

TheothercasetakesusbacktoHenryFord.Fordhasbeencriticizedfornotusinghisapproachasawaytolearnaboutbetterwaystorunhiscompany.WhileFordwasgivinghiscustomersnochoiceaboutanythingotherthanprice(whichwasattractive!)AlfredSloanwastransformingGeneralMotors.Beginninginthe1920s,SloanrejectedpartofFord'stheoryaboutrunningabusinessinfavorofalternativewaystodesignautomobilesandorganizemanufacturinganddistribution.GMsmarketingstrategyhadalwaysbeentomarketnationwidewithcarsofinteresttodifferentsegmentsofthepublic.Sloansetupseparatedivisions,withcentraldirectionfromheadquarters,tomarkettheBuick,Oldsmobile,Pontiac,Cadillac,andChevroletlines.IncontrasttoFord,eachtypeofcarhasitsowndistinctionandpricedifferentials.

Inthischapter,wewillfocusonfourwell‐establishedschoolsofmanagementthought:thescientificmanagementschool,theclassicalorganizationtheoryschool,thebehavioralschool,andthemanagementscienceschool.Althoughtheseschools,ortheoreticalapproaches,developedhistoricalsequence,laterideashavenotreplacedearlierones.Instead,eachnewschoolhastendedtocomplementorcoexistwithpreviousones.Atthesametime,eachschoolhascontinuedtoevolve,andsomehaveevenmergedwithothers.Thistakesustothreerecentintegrativeapproaches:thesystemsapproach,thecontingencyapproach,andwhatwecallthedynamicengagementapproachtomanagement.Figure2‐1showstheapproximatedatewheneachofthesetheoreticalperspectivesemerged,aswellaskeyhistoricaleventsthatsignaledtheemergenceofeachwayofthinkingaboutorganizationsandmanagement.

THEEVOLUTIONOFMANAGEMENTTHEORY

Managementandorganizationsareproductsoftheirhistoricalandsocialtimesandplaces.Thus,wecanunderstandtheevolutionofmanagementtheoryintermsofhowpeoplehavewrestledwithmattersofrelationshipsatparticulartimesinhistory.Oneofthecentrallessonsofthischapter,andofthisbookasawholeisthatwecanlearnfromthetrialsandtribulationsofthosewhohaveprecededusinsteeringthefortunesofformalorganizations.AsyoustudymanagementtheoryyouwilllearnthatalthoughtheparticularconcernsofHenryFordandAlfredSloanareverydifferentfromthosefacingmanagersinthemid‐1990s,wecanstillseeourselvescontinuingthetraditionsthattheseindividualsbeganlongbeforeourtime.Bykeepinginmindaframeworkofrelationshipsandtime,wecanputourselvesintheirshoesasstudentsofmanagement.

ImaginethatyouareamanageratanAmericansteelmill,textilefactory,oroneofFord'splantsintheearlytwentiethcentury.Yourfactoryemploysthousandsofworkers.ThisisascaleofenterpriseunprecedentedinWesternhistory.Manyofyouremployeeswereraisedinagriculturalcommunities.Industrialroutinesarenewtothem.Manyofyouremployees,aswell,areimmigrantsfromotherlands.TheydonotspeakEnglishwell,ifatall.Asamanagerunderthesecircumstances,youwillprobablybeverycuriousabouthowyoucandevelopworkingrelationshipswiththesepeople.Yourmanagerialeffectivenessdependsonhowwellyouunderstandwhatitisthatisimportanttothese

people.Current‐daychallengesparallelsomeofthosefacedintheearlytwentiethcentury.Inthe1980s8.7millionforeignnationalsenteredtheU.S.andjoinedthelabormarket.Theyoftenhavedistinctneedsforskillsandlanguageproficiency,muchasthosebeforethemattheadventoftheindustrialage.

EarlymanagementtheoryconsistedofnumerousattemptsatgettingtoknowthesenewcomerstoindustriallifeattheendofthenineteenthcenturyandbeginningofthetwentiethcenturyinEuropeandtheUnitedStates.Inthissection,wewillsurveyanumberofthebetter‐knownapproachestoearlymanagementtheory.Theseincludescientificmanagement,classicalorganizationtheory,thebehavioralschool,andmanagementscience.Asyoustudytheseapproaches,keeponeimportantfactinmind:themanagersandtheoristwhodevelopedtheseassumptionsabouthumanrelationshipsweredoingsowithlittleprecedent.Large‐scaleindustrialenterprisewasverynew.Someoftheassumptionsthattheymademightthereforeseemsimpleorunimportanttoyou,buttheywerecrucialtoFordandhiscontemporaries.

THESCIENTIFICMANAGEMENTSCHOOL

ScientificManagementtheoryaroseinpartfromtheneedtoincreaseproductivity.IntheUnitedStatesespecially,skilledlaborwasinshortsupplyatthebeginningofthetwentiethcentury.Theonlywaytoexpandproductivitywastoraisetheefficiencyofworkers.Therefore,FrederickW.Taylor,HenryL.Gantt,andFrankandLillianGilbrethdevisedthebodyofprinciplesknownasscientificmanagementtheory.

FREDERICKW.TAYLOR

FrederickW.Taylor(1856‐1915)restedhisphilosophyonfourbasicprinciples:

Thedevelopmentofatruescienceofmanagement,sothatthebestmethodforperformingeachtaskcouldbedetermined.

Thescientificselectionofworkers,sothateachworkerwouldbegivenresponsibilityforthetaskforwhichheorshewasbestsuited.

Thescientificeducationanddevelopmentoftheworker. Intimate,friendlycooperationbetweenmanagementandlabor. Taylorcontendedthatthesuccessoftheseprinciplesrequired"acompletementalrevolution"onthepartofmanagementandlabor.Ratherthanquarreloverprofits,bothsidesshouldtrytoincreaseproduction;bysodoing,hebelieved,profitswouldrisetosuchanextentthatlaborandmanagementwouldnolongerhavetofightoverthem.Inshort,Taylorbelievedthatmanagementandlaborhadacommoninterestinincreasingproductivity.

Taylorbasedhismanagementsystemonproduction‐linetimestudies.Insteadofrelyingontraditionalworkmethods,heanalyzedandtimedsteelworkers'movementsonaseriesofjobs.Usingtimestudyashisbase,hebrokeeachjobdownintoitscomponentsanddesignedthequickestandbestmethodsofperformingeachcomponent.Inthiswayheestablishedhowmuchworkersshouldbeabletodowiththeequipmentandmaterialsathand.Healsoencouragedemployerstopaymore

productiveworkersatahigherratethanothers,usinga"scientificallycorrect"ratethatwouldbenefitbothcompanyandworker.Thus,workerswereurgedtosurpasstheirpreviousperformancestandardstoearnmorepayTaylorcalledhisplanthedifferentialratesystem.

CONTRIBUTIONSOFSCIENTIFICMANAGEMENTTHEORY

ThemodemassemblylinepoursoutfinishedproductsfasterthanTaylorcouldeverhaveimagined.Thisproduction"miracle"isjustonelegacyofscientificmanagement.Inaddition,itsefficiencytechniqueshavebeenappliedtomanytasksinnon‐industrialorganizations,rangingfromfast‐foodservicetothetrainingofsurgeons.

LIMITATIONSOFSCIENTIFICMANAGEMENTTHEORY

AlthoughTaylor'smethodledtodramaticincreasesinproductivityandtohigherpayinanumberofinstances,workersandunionsbegantoopposehisapproachbecausetheyfearedthatworkingharderorfasterwouldexhaustwhateverworkwasavailable,causinglayoffs.

Moreover,Taylor'ssystemclearlymeantthattimewasoftheessence.Hiscriticsobjectedtothe"speedup"conditionsthatplacedunduepressuresonemployeestoperformatfasterandfasterlevels.Theemphasisonproductivity—and,byextension,profitability—ledsomemanagerstoexploitbothworkersandcustomers.Asaresult,moreworkersjoinedunionsandthusreinforcedapatternofsuspicionandmistrustthatshadedlabor‐managementrelationsfordecades.

HENRYL.GANTT

HenryL.Gantt(1861‐1919)workedwithTayloronseveralprojects.Butwhenhewentoutonhisownasaconsultingindustrialengineer,GanttbegantoreconsiderTaylor'sincentivesystem.

Abandoningthedifferentialratesystemashavingtoolittlemotivationalimpact,Ganttcameupwithanewidea.Everyworkerwhofinishedaday'sassignedworkloadwouldwina50‐centbonus.Thenheaddedasecondmotivation.Thesupervisorwouldearnabonusforeachworkerwhoreachedthedailystandard,plusanextrabonusifalltheworkersreachedit.This,Ganttreasoned,wouldspursupervisorstotraintheirworkerstodoabetterjob.

Everyworker'sprogresswasratedpubliclyandrecordedonindividualbarcharts,‐‐inblackondaystheworkermadethestandard,inredwhenheorshefellbelowit.Goingbeyondthis,Ganttoriginatedachartingsystemforproductionscheduling;the"Ganttchart"isstillinusetoday.Infact,theGanttChartwastranslatedintoeightlanguagesandusedthroughouttheworld.Startinginthe1920s,itwasinuseinJapan,Spain,andtheSovietUnion.Italsoformedthebasisfortwochartingdeviceswhichweredevelopedtoassistinplanning,managing,andcontrollingcomplexorganizations:theCriticalPathMethod(CPM),originatedbyDuPont,andProgramEvaluationandReviewTechnique(PERT),developedbytheNavy.Lotus1‐2‐3isacreativeapplicationoftheGanttChart.

THEGILBRETHS

FrankB.andLillianM.Gilbreth(1868‐1924and1878‐1972)madetheircontributiontothescientificmanagementmovementasahusband‐and‐wifeteam.LillianandFrankcollaboratedonfatigueandmotionstudiesandfocusedonwaysofpromotingtheindividualworker'swelfare.Tothem,theultimateaimofscientificmanagementwastohelpworkersreachtheirfullpotentialashumanbeings.

Intheirconception,motionandfatiguewereintertwined—everymotionthatwaseliminatedreducedfatigue.Usingmotionpicturecameras,theytriedtofindthemosteconomicalmotionsforeachtaskinordertoupgradeperformanceandreducefatigue.TheGilbrethsarguedthatmotionstudywouldraiseworkermoralebecauseofitsobviousphysicalbenefitsandbecauseitdemonstratedmanagement'sconcernfortheworker.

CLASSICALORGANIZATIONTHEORYSCHOOL

Scientificmanagementwasconcernedwithincreasingtheproductivityoftheshopandtheindividualworker.Classicalorganizationtheorygrewoutoftheneedtofindguidelinesformanagingsuchcomplexorganizationsasfactories.

HENRIFAYOL

HenriFayol(1841‐1925)isgenerallyhailedasthefounderoftheclassicalmanagementschool‐‐notbecausehewasthefirsttoinvestigatemanagerialbehavior,butbecausehewasthefirsttosystematizeit.Fayolbelievedthatsoundmanagementpracticefallsintocertainpattersthatcanbeidentifiedandanalyzed.Fromthisbasicinsight,hedrewupablueprintforacohesivedoctrineofmanagers—onethatretainsmuchofitsforcetothisday.

Withhisfaithinscientificmethods,FayolwaslikeTaylor,hiscontemporary.WhileTaylorwasbasicallyconcernedwithorganizationalfunctions,howeverFayolwasinterestedinthetotalorganizationandfocusedonmanagement,whichhefelthadbeenthemostneglectedofbusinessoperations.Exhibit2‐1liststhe14principlesofmanagementFayol"mostfrequentlyhadtoapply."BeforeFayol,itwasgenerallybelievedthat"managersareborn,notmade."Fayolinsisted,however,thatmanagementwasaskilllikeanyother‐‐onethatcouldbetaughtonceitsunderlyingprincipleswereunderstood.

Fayol’s14Principlesofmanagement

DivisionofLabor.Themorepeoplespecialize,themoreefficientlytheycanperformtheirwork.Thisprincipleisepitomizedbythemodernassemblyline.

Authority.Managersmustgiveorderssothattheycangetthingsdone.Whiletheirformalauthoritygivesthemtherighttocommand,managerswillnotalwayscompelobedienceunlesstheyhavepersonalauthority(suchasrelevantexpertise)aswell.

Discipline.Membersinanorganizationneedtorespecttherulesandagreementsthatgoverntheorganization.ToFayol,disciplineresultsfromgoodleadershipatalllevelsoftheorganization,

fairagreements(suchasprovisionsforrewardingsuperiorperformance),andjudiciouslyenforcedpenaltiesforinfractions.

UnityofCommand.Eachemployeemustreceiveinstructionsfromonlyoneperson.Fayolbelievedthatwhenanemployeereportedtomorethanonemanager,conflictsininstructionsandconfusionofauthoritywouldresult.

UnityofDirection.Thoseoperationswithintheorganizationthathavethesameobjectiveshouldbedirectedbyonlyonemanagerusingoneplan.Forexample,thepersonneldepartmentinacompanyshouldnothavetwodirectors,eachwithadifferenthiringpolicy.

SubordinationofIndividualInteresttotheCommonGood.Inanyundertaking,theinterestsofemployeesshouldnottakeprecedenceovertheinterestsoftheorganizationasawhole.

Remuneration.Compensationforworkdoneshouldbefairtobothemployeesandemployers. Centralization.Decreasingtheroleofsubordinatesindecisionmakingiscentralization;increasing

theirroleindecentralization.Fayolbelievedthatmanagersshouldretainfinalresponsibility,butshouldatthesametimegivetheirsubordinatesenoughauthoritytodotheirjobsproperly.Theproblemistofindtheproperdegreeofcentralizationineachcase.

TheHierarchy.Thelineofauthorityinanorganization—oftenrepresentedtodaybytheneatboxesandlinesoftheorganizationchart—runsinorderofrankfromtopmanagementtothelowestleveloftheenterprise.

Order.Materialsandpeopleshouldbeintherightplaceattherighttime.People,inparticular,shouldbeinthejobsorpositionstheyaremostsuitedto.

Equity.Managersshouldbebothfriendlyandfairtosubordinates. StabilityofStaff.Ahighemployeeturnoverrateunderminestheefficientfunctioningofan

organization. Initiative.Subordinatesshouldbegiventhefreedomtoconceiveandcarryouttheirplans,even

thoughsomemistakesmayresult. EspiritdeCorps.Promotingteamspiritwillgivetheorganizationasenseofunity.ToFayol,even

smallfactorsshouldhelptodevelopthespirit.Hesuggested,forexample,theuseofverbalcommunicationsinsteadofformal,writtencommunicationwheneverpossible.

Source:HenriRayolIndustrialandGeneralAdministration,J.A.Caubrough,trans.(GenevaInternationalManagementInstitute,1930)MAXWEBER

Reasoningthatanygoal‐orientedorganizationconsistingofthousandsofindividualswouldrequirethecarefullycontrolledregulationofitsactivities,theGermansociologistMaxWeber(1864‐1920)developedatheoryofbureaucraticmanagementthatstressedtheneedforastrictlydefinedhierarchygovernedbyclearlydefinedregulationsandlinesofauthority.Heconsideredtheidealorganizationtobeabureaucracywhoseactivitiesandobjectiveswererationallythoughtoutandwhosedivisionsoflaborwereexplicitlyspelledout.Weberalsobelievedthattechnicalcompetenceshouldbeemphasizedandthatperformanceevaluationsshouldbemadeentirelyonthebasisofmerit.

Todayweoftenthinkofbureaucraciesasvast,impersonalorganizationsthatputimpersonalefficiencyaheadofhumanneeds.Weshouldbecareful,though,nottoapplyournegativeconnotationsofthewordbureaucracytothetermasWeberuseit.Likethescientificmanagementtheorists,Webersoughttoimprovetheperformanceofsociallyimportantorganizationsbymaking

theiroperationspredictableandproductive.Althoughwenowvalueinnovationandflexibilityasmuchasefficiencyandpredictability,Weber'smodelofbureaucraticmanagementclearlyadvancedtheformationofhugecorporationssuchasFord.BureaucracywasaparticularpatternofrelationshipsforwhichWebersawgreatpromise.

Althoughbureaucracyhasbeensuccessfulformanycompanies,inthecompetitiveglobalmarketofthe1990sorganizationssuchasGeneralElectricandXeroxhavebecome"bureaucracybusters,"throwingawaytheorganizationchartandreplacingitwithever‐changingconstellationsofteams,projects,andallianceswiththegoalofunleashingemployeecreativity.

MARYPARKERFOLLETT

MaryParkerFollett(1868‐1933)wasamongthosewhobuiltonclassicframeworkoftheclassicalschool.However,sheintroducedmanynewelementsespeciallyintheareaofhumanrelationsandorganizationalstructure.Inthis,sheinitiatedtrendsthatwouldbefurtherdevelopedbytheemergingbehavioralandmanagementscienceschools.

Follettwasconvincedthatnoonecouldbecomeawholepersonexceptasamemberofagroup;humanbeingsgrewthroughtheirrelationshipswithothersinorganizations.Infact,shecalledmanagement"theartofgettingthingsdonethroughpeople."ShetookforgrantedTaylor'sassertionthatlaborandmanagementsharedacommonpurposeasmembersofthesameorganization,butshebelievedthattheartificialdistinctionbetweenmanagers(ordergivers)andsubordinates(ordertakers)obscuredthisnaturalpartnership.Shewasagreatbelieverinthepowerofthegroup,whereindividualscouldcombinetheirdiversetalentsintosomethingbigger.Moreover,Follett's"holistic"modelofcontroltookintoaccountnotjustindividualsandgroups,buttheeffectsofsuchenvironmentalfactorsaspolitics,economics,andbiology.

Follett’smodelwasanimportantforerunneroftheideathatmanagementmeantmorethanjustwhatwashappeninginsideaparticularorganization.Byexplicitlyaddingtheorganizationalenvironmenttohertheory,Follettpavedthewayformanagementtheorytoincludeabroadersetofrelationships,someinsidetheorganizationandsomeacrosstheorganization'sborders.AdiversesetofmodelmanagementtheoriespayshomagetoFollettonthispoint.

CHESTERI.BARNARD

ChesterBarnard(1886‐1961),likeFollett,introducedelementstoclassicaltheorythatwouldbefurtherdevelopedinlaterschools.Barnard,whobecamepresidentofNewJerseyBellin1927,usedhisworkexperienceandhisextensivereadinginsociologyandphilosophytoformulatetheoriesaboutorganizations.AccordingtoBarnard,peoplecometogetherinformalorganizationstoachieveendstheycannotaccomplishworkingalone.Butastheypursuetheorganization'sgoals,theymustalsosatisfytheirindividualneeds.AndsoBarnardarrivedathiscentralthesis:Anenterprisecanoperateefficientlyandsurviveonlywhentheorganization’sgoalsarekeptinbalancewiththeaimsandneedsoftheindividualsworkingforit.WhatBarnardwasdoingwasspecifyingaprinciplebywhichpeoplecanworkinstableandmutuallybeneficialrelationshipsovertime.

Forexample,tomeettheirpersonalgoalswithintheconfinesoftheformalorganization,peoplecometogetherininformalgroupssuchascliques.Toensureitssurvival,thefirmmustusetheseinformalgroupseffectively,eveniftheysometimesworkatpurposesthatruncountertomanagement’sobjectives.Barnard'srecognitionoftheimportanceanduniversalityofthis"informalorganization"wasamajorcontributiontomanagementthought.

Barnardbelievedthatindividualandorganizationspurposescouldbekeptinbalanceifmanagersunderstoodanemployee'szoneofindifference‐‐thatis,whattheemployeewoulddowithoutquestioningthemanager'sauthority.Obviously,themoreactivitiesthatfellwithinanemployee'szoneofindifference(whattheemployeewouldaccept),thesmootherandmorecooperativeanorganizationwouldbe.Barnardalsobelievedthatexecutiveshadadutytoinstillasenseofmoralpurposeintheiremployees.Todothis,theywouldhavetolearntothinkbeyondtheirnarrowself‐interestandmakeanethicalcommitmenttosociety.AlthoughBarnardstressedtheworkofexecutivemanagers,healsofocusedconsiderableattentionontheroleoftheindividualworkeras"thebasicstrategicfactorinorganization."Whenhewentfurthertoemphasizetheorganizationasthecooperativeenterpriseofindividuals,workingtogetherasgroups,hesetthestageforthedevelopmentofagreatdealofcurrentthinking.

Forexample,companiesareincreasinglyusingteams.Infact,someadvocateusingteams,asthebuildingblocksoftheorganization.Becauseteamsaregenerallyareself‐managing,supervisoryrolesarelimited.Managementprovidesdirectionbygivingeachteamacommonpurposeandholdstheteamsaccountableformeasurableperformancegoals.CompaniessuchasMotorola,DuPont,AT&T,andGeneralElectricaremovinginthisdirectionsWewilldiscussteamsmorefullyinChapter18.

EFFICIENCYANDTHEFACTORY

TakingtheadviceofefficiencyexpertWalterFlandersin1908,]FordboughtgroundsinHighlandPark,whereheintendedtoemploythemostmodernideasaboutproduction,particularlythoseofFrederickWinslowTaylor.Thosewouldbring,asTayloraprophesied,anabsoluterationalitytotheindustrialprocess.Theideawastobreakeachfunctiondownintomuchsmallerunitssothateachcouldbemechanizedandspeededupandeventuallyflowintoastraight‐lineproductionoflittlepiecesbecomingsteadilylarger.Theprocessbegantochangeinthespringof1913.Thefirstpieceonthemodernassemblylinewasthemagnetocoilassembly.Inthepast,aworker—andhehadtobeaskilledworker—hadmadeflywheelmagnetofromstarttofinish.Agoodemployeecouldmake34or40aday.Now,however,therewasanassemblylineformagnetos;dividedinto29differentoperationsperformedby29differentmen.Intheoldsystemittook20minutestomakeamagneto;nowittook13.

Fordandhismensoonmovedtobringthesamerationalitytotherestofthefactory.Quickly,theyimposedacomparablesystemfortheassemblyofmotorsandtransmissions.Then,inthesummerof1913,theytookonthefinalassembly,whichastherestoftheprocesshadspeededup,hadbecomethegreatbottleneck.Theworkers[nowmaneuvered]asquicklyastheycouldaroundastationarymetalobject,thecartheywereputtingtogether.Ifthemencouldremainstationaryasthesemi‐finishedcarmovedthelinethroughthem,lessoftheworkers’time—Ford’stime—wouldbewasted.

CharlesSorensen,whohadbecomeoneofFord’stopproductionpeople[initiatedtheassemblylinebypulling]aModelTchassisslowlybyawindlassacross250feetoffactoryfloor,timingtheprocessallthewhile.Behindhimwalkedsixworkers,pickinguppartsfromcarefullyspacedpilesonthefloorandfittingthemtothechassis…[soon,]thebreakthroughscameevenmorerapidly..[Byinstallinganautomaticconveyorbelt,]Fordcouldeventuallyassemblyacarin[93minutes]…justafewyearsbefore,inthedaysofstationarychassisassembly,thebestrecordforputtingacartogetherhadbeen728hoursofoneman’swork.Ford’stopexecutivescelebratedtheirvictorywithadinneratDetroit’sPontchartrainHotel.Fittingly,theyriggedasimpleconveyorbelttoafive‐horsepowerenginewithabicyclechainandusedtheconveyortoservethefoodaroundthetable.Ittypifiedthespirit,camaraderie,andconfidenceoftheearlydays.

Nineteenyearsandmorethanfifteenmillioncarslater,whenFordreluctantlycametotheconclusionthathehadtostopmakingtheT,thecompanybalancewas$673million.Andthiswasnotmerelyacompany’ssuccess;itwasthebeginningofasocialrevolution.Fordhimself[believed]hehadachievedabreakthroughforthecommonman."Massproduction,"hewrotelater,"precedesmassconsumption,andmakesitpossiblebyreducingcostsandthuspermittingbothgreateruse‐convenienceandprice‐convenience."

[Notsurprisingly,]thepriceoftheModelTcontinuedtocomedown,from$780inthefiscalyear1910‐11to$690thefollowingyear,thento$600,to$550,and,ontheeveofWorldWarI,to$360.Atthatprice,Fordsold730,041cars,outproducingeveryoneelseintheworld….

HenryFood,immigrant’ssonandone‐timemachinist’sapprentice,hadindeedbecomeaveryrichman.Obviously,hehadbecomesobybeingaventuresomeandsuccessfultheoristofindustrialmanagement.Butbothhispracticesandhispersonalitydrewfirefromthosewhowerecriticalofhisimplicitattitudetowardthose"masses"forwhomhehadoriginallyperfectedandprizedtheModelT.Forexample,hiswidelypublicizeddoublingofwagesforemployeesin1914wasseenbysomeasatrailblazingmaneuverinmanagement‐laborrelations,byothersasaschemetosolidifyFord’spaternalisticpoweroverthosewhodependeduponhimforaliving.Inaddition,Fordstubbornlyresistedtheunionizationofhisemployeeslongafterhismajorcompetitorshadmadeagreementswithunionorganizations.Repressiononthepartofcompanypoliceagainstunion"agitatorswascommonthecompany’sgroundsuntil,finally,havinglostanelectionconductedbytheNationalLaborRelationsBoard[agovernmentagencyestablishedin1935toaffirmlabor’srighttobargaincollectively],FordcontractedwiththeUnitedAutoWorkersin1941.

THEBEHAVIORALSCHOOL:

THEORGANIZATIONISPEOPLE

Thebehavioralschoolemergedpartlybecausetheclassicalapproachdidnotachievesufficientproductionefficiencyandworkplaceharmony.Tomanagersfrustration,peopledidnotalwaysfollowpredictedorexpectedpatternsofbehavior.Thustherewasincreasedinterestinhelpingmanagersdealmoreeffectivelywiththe"peopleside"oftheirorganizations.Severaltheoriststriedtostrengthenclassicalorganizationtheorywiththeinsightsofsociologyandpsychology.

THEHUMANRELATIONSMOVEMENT

Humanrelationsisfrequentlyusedasageneraltermtodescribethewaysinwhichmanagersinteractwiththeiremployees.When"employeemanagement"stimulatesmoreandbetterwork,theorganizationhaseffectivehumanrelations;whenmoraleandefficiencydeteriorate,itshumanrelationsaresaidtobeineffective.Thehumanrelationsmovementarosefromearlyattemptstosystematicallydiscoverthesocialandpsychologicalfactorsthatwouldcreateeffectivehumanrelations.

THEHAWTHORNEEXPERIMENTS.ThehumanrelationsmovementgrewoutofafamousseriesofstudiesconductedattheWesternElectricCompanyfrom1924to1933.Theseeventuallybecameknownasthe"HawthorneStudies"becausemanyofthemwereperformedatWesternElectric'sHawthorneplantnearChicago.TheHawthorneStudiesbeganasanattempttoinvestigatetherelationshipbetweentheleveloflightingintheworkplaceandworkerproductivity‐‐thetypeofquestionFrederickTaylorandhiscolleaguesmightwellhaveaddressed.

Insomeoftheearlystudies,theWesternElectricresearchersdividedtheemployeesintotestgroups,whoweresubjectedtodeliberatechangesinlighting,andcontrolgroups,whoselightingremainedconstantthroughouttheexperiments.Theresultsoftheexperimentswereambiguous.Whenthetestgroup'slightingwasimproved,productivitytendedtoincrease,althougherratically.Butwhenlightingconditionsweremadeworse,therewasalsoatendencyforproductivitytoincreaseinthetestgroup.Tocompoundthemystery,thecontrolgroup'soutputalsoroseoverthecourseofthestudies,eventhoughitexperiencednochangesinillumination.Obviously,somethingbesideslightingwasinfluencingtheworkers'performance.

Inanewsetofexperiments,asmallgroupofworkerswasplacedinaseparateroomandanumberofvariableswerealtered:Wageswereincreased;restperiodsofvaryinglengthwereintroduced;theworkdayandworkweekwereshortened.Theresearchers,whonowactedassupervisors,alsoallowedthegroupstochoosetheirownrestperiodsandtohaveasayinothersuggestedchanges.Again,theresultswereambiguous.Performancetendedtoincreaseovertime,butitalsoroseandfellerratically.Partwaythroughthissetofexperiments,EltonMayo(1880‐1949)andsomeassociatesfromHarvard,includingFritzJ.RoethhsbergerandWilliamJ.Dickson,becameinvolved.

Intheseandsubsequentexperiments,Mayoandhisassociatesdecidedthatacomplexchainofattitudeshadtouchedofftheproductivityincreases.Becausetheyhadbeensingledoutforspecialattention,boththetestandthecontrolgroupshaddevelopedagrouppridethatmotivatedthemtoimprovetheirworkperformance.Sympatheticsupervisionhadfurtherreinforcedtheirmotivation.Theresearchersconcludedthatemployeeswouldworkharderiftheybelievedmanagementwasconcernedabouttheirwelfareandsupervisorspaidspecialattentiontothem.ThisphenomenonwassubsequentlylabeledtheHawthorneEffect,sincethecontrolgroupreceivednospecialsupervisorytreatmentorenhancementofworkingconditionsbutstillimproveditsperformance,somepeople(includingMayohimself)speculatedthatthecontrolgroup'sproductivitygainsresultedfromthespecialattentionoftheresearchersthemselves.

Theresearchersalsoconcludedthatinformalworkgroups‐‐thesocialenvironmentofemployees‐‐haveapositiveinfluenceonproductivity.ManyofWesternElectric’semployeesfoundtheirworkdullandmeaningless,buttheirassociationsandfriendshipswithco‐workers,sometimesinfluencedbyasharedantagonismtowardthe"bosses,"impartedsomemeaningtotheirworkinglivesandprovidedsomeprotectionfrommanagement.Forthesereasons,grouppressurewasfrequentlyastrongerinfluenceonworkerproductivitythanmanagementdemands.

ToMayo,then,theconceptof"socialman"‐‐motivatedbysocialneeds,wantingrewardingon‐the‐jobrelationships,andrespondingmoretowork‐grouppressuresthantomanagementcontrol‐‐vasnecessarytocomplementtheoldconceptof"rationalman"motivatedbypersonaleconomicneeds.Allthesefindingsmightunremarkabletoday.ButcomparewhatMayoandhisassociatesconsideredrelevantwithwhatFordandWeberfoundrelevant,andyouseewhatachangetheseideasbroughttomanagementtheory.

APPLYINGQUALITYCONCEPTSTOHUMANRELATIONSTHEORIES

Theapplicationofthesehumanrelationstheoriescanbeseenintoday'scompetitiveenvironment.Forexample,withtherestructuringoftoday'scompetitiveglobaleconomy,manycompanieshavemadethedecisionto"downsize"orreducethenumbersofmanagersandworkers.However,somecompanies,wellawareofthedynamicspointedoutbytheHawthornestudies,haveapproachedemployeereductionswithgreatcare.AtSkyChiefs,a$450millionairlinein‐flightservicescorporation,theproblemsexperiencedbytheairlinesindustrysuchaspricewars,briskcompetitionfromforeignairlines,agingfleets,andtheincreasingcostofnewplanes,weredirectlyaffectingthecompany.Forcedtoreducestaff,managementrealizedthatifitmanagedtheprocesspoorlyanddidn'ttakeintoconsiderationtheneedsofemployees,thosewhoremainedafterthedownsizingwouldbelessloyalandcohesiveasagroup.

Tominimizepotentialproblemsafterthedownsizing,themanagementadopted"totalqualityleadership"toprovidethecompanywithaframeworkforimplementingtherestructuring.Itspentthousandsofhoursanddollarstofundtrainingandimprovementprocessesrelatedtototalqualityleadership.Thekeytothesuccessoftherestructuringwasthatinsteadofmanagementdictatingwhatwouldhappenandtowhom,employees,seenasthebackboneofthecompany,wereempoweredtofacilitatetheprocess.Forexample,priortotherestructuringprocess,employeesparticipatedinevaluatingallheadquartersfunctions.Anemployee‐managedrestructuringcommitteewasselectedbymanagementtoassemble,interpret,andevaluatethedata.Thensmalleractionteamswerecreatedtoaddressthedownsizing.Tohelpthosewhoweretobeletgo,extensivecounselingandoutplacementserviceswereprovided,includinggroupworkshopsonnetworking,interviewingtechniques,andhiring,andemployeeswerevideotapedtohelpwithfutureinterviews.

Now,aftertherestructuring,productivityandoperatingprofitsareincreasing.Theremainingemployeeshaveacceptedtheirnewrolesandresponsibilities,andmoralecontinuestoimprove.

FROMHUMANRELATIONSTOTHEBEHAVIORALSCIENCEAPPROACH

Mayoandhiscolleaguespioneeredtheuseofthescientificmethodintheirstudiesofpeopleinthe

workenvironment.Laterresearchers,morerigorouslytrainedinthesocialsciences(psychology,sociology,andanthropology),usedmoresophisticatedresearchmethodsandbecameknownas"behavioralscientists"ratherthan"humanrelationstheorists."

Thebehavioralscientistsbroughttwonewdimensionstothestudyofmanagementandorganizations.First,theyadvancedanevenmoresophisticatedviewofhumanbeingsandtheirdrivesthandidMayoandhiscontemporaries.AbrahamMaslowandDouglasMcGregoramongothers,wroteabout"selfactualizing"people.Theirworkspawnednewthinkingabouthowrelationshipscanbebeneficiallyarrangedinorganizations.Theyalsodeterminedthatpeoplewantedmorethan"instantaneous"pleasureorrewards.Ifpeoplewerethiscomplexinthewaytheyledtheirlives,thentheirorganizationalrelationshipsneededtosupportthatcomplexity.

Second,behavioralscientistsappliedthemethodsofscientificinvestigationtothestudyofhowpeoplebehavedinorganizationsaswholeentities.TheclassicexampleistheworkofJamesMarchandHerbertSimonmthelate1950’s.MarchandSimondevelopedhundredsofpropositionsforscientificinvestigation,aboutpatternsofbehavior,particularlywithregardtocommunication,inorganizations.Theirinfluenceinthedevelopmentofsubsequentmanagementtheoryhasbeensignificantandongoing.

AccordingtoMaslow,theneedsthatpeoplearemotivatedtosatisfyfallintoahierarchy.Physicalandsafetyneedsareatthebottomofthehierarchy,andatthetopareegoneeds(theneedforrespect,forexample)andself‐actualizingneeds(suchastheneedformeaningandpersonalgrowth).Ingeneral,Maslowsaidlower‐levelneedsmustbesatisfiedbeforehigher‐levelneedscanbemet.Sincemanylower‐levelneedsareroutinelysatisfiedincontemporarysociety,mostpeoplearemotivatedmorebythehigher‐levelegoandself‐actualizingneeds.

Somelaterbehavioralscientistsfeelthateventhismodelcannotexplainallthefactorsthatmaymotivatepeopleintheworkplace.Theyarguethatnoteveryonegoespredictablyfromonelevelofneedtothenext.Forsomepeople,workisonlyameansformeetinglower‐levelneeds.Othersaresatisfiedwithnothinglessthanthefulfillmentoftheirhighest‐levelneeds;theymayevenchoosetoworkinjobsthatthreatentheirsafetyifbydoingsotheycanattain‐‐‐elypersonalgoals.Themorerealisticmodelofhumanmotivation,thesebehavioralscientistsargueis"complexperson."Usingthismodel,theeffectivemanagerisawarethatnotwopeopleareexactlyalikeandtailorsmotivationalapproachesaccordingtoindividualneeds.

AsAmericancorporationsincreasinglydobusinesswithothercultures,itisimportanttorememberthattheoriescanbeculturallybounded.Forexample,Maslow'shierarchyofneedsisnotadescriptionofauniversalmotivationalprocess.Inothernationstheorderofthehierarchymightbequitedifferentdependingonthevaluesofthecountry.InSweden,qualityoflifeisrankedmostimportant,whileinJapanandGermany,securityisrankedhighest.

McGregorprovidedanotherangleonthis"complexperson"idea.Hedistinguishedtwoalternativebasicassumptionsaboutpeopleandtheirapproachtowork.Thesetwoassumptions,whichhecalledTheoryXandTheoryY,takeoppositeviewsofpeople'scommitmenttoworkinorganizations.TheoryXmanagers,McGregorproposed,assumethatpeoplemustbeconstantlycoaxedintoputtingforth

effortintheirjobs.TheoryYmanagers,ontheotherhand,assumethatpeoplerelishworkandeagerlyapproachtheirworkasanopportunitytodeveloptheircreativecapacities.TheoryYwasanexampleofa"complexperson"perspective.TheoryYmanagement,McGregorclaimed,wasstymiedbytheprevalenceofTheoryXpracticesintheorganizationsofthe1950s.Asyouarealreadyabletosee,therootsofTheoryXcanbetracedtothedaysofscientificmanagementandthefactoriesbasedontheseprinciples.InaccordancewithMcGregor'sthinking,GeneralElectricCEOJackWelcharguesthatpeoplemustforgettheoldideaof"boss"andreplaceitwiththeideathatmanagershavethenewdutiesofcounselinggroups,providingresourcesforthemandhelpingpeoplethinkforthemselves."We'regoingtowinonourideas,"hesays,"notbywhipsandchains."

THEMANAGEMENTSCIENCESCHOOL

AtthebeginningofWorldWarII,GreatBritaindesperatelyneededtosolveanumberofnew,complexproblemsinWarfare.Withtheirsurvivalatstake,Britishformedthefirstoperationalresearch(OR)teams.Bypoolingtheexpertiseofmathematicians,physicists,andotherscientistsinORteams,theBritishwereabletoachievesignificanttechnologicalandtacticalbreakthroughs.WhentheAmericansenteredthewar,theyformedwhattheycalledoperationsresearchteams,basedonthesuccessfulBritishmodel,tosolvesimilarproblems.Theteamsusedearlycomputerstoperformthethousandsofcalculationsinvolvedinmathematicalmodeling.

Whenthewarwasover,theapplicabilityofoperationsresearchtoproblemsinindustrygraduallybecameapparent.Newindustrialtechnologieswerebeingputintouseandtransportationandcommunicationwerebecomingmorecomplicated.Thesedevelopmentsbroughtwiththemahostofproblemsthatcouldnotbesolvedeasilybyconventionalmeans.Increasingly,ORspecialistswerecalledontohelpmanagerscomeupwithanswerstothesenewproblems.Overtheyears,ORprocedureswereformalizedintowhatisnowmoregenerallycalledthemanagementscienceschool.

Themanagementscienceschoolgainedpopularitythroughtwopostwarphenomena.First,thedevelopmentofhigh‐speedcomputersandofcommunicationsamongcomputersprovidedthemeansfortacklingcomplexandlarge‐scaleorganizationalproblems.Second,RobertMcNamaraimplementedamanagementscienceapproachatFordMotorCompanyinthe1950sand1960s.(Later,hebroughtthesameapproachtohisassignmentasSecretaryofDefenseintheJohnsonAdministration.)AsMcNamara'sso‐called"WhizKids"protegesmovedtomanagementpositionsatFordandacrossAmericanindustry,themanagementscienceschoolflourished.Ifyoufindyourselfworkingmanorganizationwhere"crunchingthenumbers"isthecentralwaythatmanagementdecisionsarereachedandjustified,youcanthankMcNamaraandhisgeneration.

Todaythemanagementscienceapproachtosolvingaproblembeginswhenamixedteamofspecialistsfromrelevantdisciplinesiscalledintoanalyzetheproblemandproposeacourseofactiontomanagement.Theteamconstructsamathematicalmodelthatshows,insymbolicterms,allrelevantfactorsbearingontheproblemandhowtheyareinterrelated.Bychangingthevaluesofthevariablesinthemodel(suchasincreasingthecostofrawmaterials)andanalyzingthedifferentequationsofthemodelwithacomputer,theteamcandeterminetheeffectsofeachchange.Eventually,themanagementscienceteampresentsmanagementwithanobjectivebasisformakingadecision.

Managementscienceofferedawholenewwaytothinkabouttime.Withsophisticatedmathematicalmodels,andcomputerstocrunchthenumbers,forecastingthefuturebasedonthepastandpresentbecameapopularactivity.Managerscannowplaywiththe"whatifthefuturelookslikethis?"questionsthatpreviousmanagementtheoriescouldnothandle.Atthesametime,themanagementscienceschoolpayslessattentiontorelationshipsperseinorganizations.Mathematicalmodelingtendstoignorerelationshipsasdata,emphasizingnumericaldatathatcanberelativelyeasilycollectedorestimated.Thecriticismisthusthatmanagementsciencepromotesanemphasisononlytheaspectsoftheorganizationthatcanbecapturedinnumbers,missingtheimportanceofpeopleandrelationships.

RECENTDEVELOPMENTSINMANAGEMENTTHEORY

Theoriesarepowerfulinfluences.Thelongerweuseagiventheory,themorecomfortablewebecomewithitandthemorewetendtonotseekoutalternativetheoriesunlesseventsforceustochange.This.helpsexplainwhy"modern"managementtheoryisreallyarichmosaicofmanytheoriesthathaveenduredoveratleastthepastcentury.Onebenefitofunderstandingthisconcurrentpopularityofmanypointsofviewaboutorganizationsisthatitpreparesyouforyourownorganizationalexperiences.Ifthischapterhasnotalreadybroughttominddifferentmanagerialstylestowhichyouhavebeenexposed,itwillprepareyouforthedaywhen,forexample,youworkfora"managementscience"managerwhointurnworksforamanagerwhopracticesbyoneofthetheoriestofollowinthenextsection!Orifyouhavealreadyexperiencedsuchmanagers,itwillhelpyouunderstandtheirperspectivesbetter.

Whileitisimpossibletopredictwhatfuturegenerationswillbestudying,atthispointwecanidentifyatleastthreeadditionalperspectivesonmanagementtheorythatcangrowinimportance:thesystemsapproach,thecontingencyapproach,andwhatwecallthedynamicengagementapproach.

THESYSTEMSAPPROACH

Ratherthandealingseparatelywiththevarioussegmentsofanorganization,thesystemsapproachtomanagementviewstheorganizationasaunified,purposefulsystemcomposedofinterrelatedparts.Thisapproachgivesmanagersawayoflookingattheorganizationasawholeandasapartofthelarger,externalenvironment(seeChapter3).Systems.theorytellsusthattheactivityofanysegmentofanorganizationaffects,invaryingdegrees,theactivityofeveryothersegment.

Productionmanagersinamanufacturingplant,forexample,preferlonguninterruptedproductionrunsofstandardizedproductsinordertomaintainmaximumefficiencyandlowcosts.Marketingmanagers,ontheotherhand,whowanttooffercustomersquickdeliveryofawiderangeofproducts,wouldlikeaflexiblemanufacturingschedulethatcanfillspecialordersonshortnotice.Systemsorientedproductionmanagersmakeschedulingdecisionsonlyaftertheyhaveidentifiedtheimpactofthesedecisionsonotherdepartmentsandontheentireorganization.Thepointofthesystemsapproachisthatmanagerscannotfunctionwhollywithintheconfinesofthetraditionalorganizationchart.Theymustmeshtheirdepartmentwiththewholeenterprise.Todothat,theyhavetocommunicatenotonlywithotheremployeesanddepartments,butfrequentlywithrepresentativesofotherorganizationsaswell.Clearly,systemsmanagersgrasptheimportanceof

websofbusinessrelationshipstotheirefforts.

SOMEKEYCONCEPTS

Manyoftheconceptsofgeneralsystemstheoryarefindingtheirwayintothelanguageofmanagement.Managersneedtobefamiliarwiththesystemsvocabularysotheycankeeppacewithcurrentdevelopments.

SUBSYSTEMS.Thepartsthatmakeupthewholeofasystemarecalledsubsystems.Andeachsysteminturnmaybeasubsystemofastilllargerwhole.Thusadepartmentisasubsystemofaplant,whichmaybeasubsystemofacompany,whichmaybeasubsystemofaconglomerateoranindustry,whichisasubsystemofthenationaleconomy,whichisasubsystemoftheworldsystem.

SYNERGY.Synergymeansthatthewholeisgreaterthanthesumofitsparts.Inorganizationalterms,synergymeansthatasseparatedepartmentswithinanorganizationcooperateandinteract,theybecomemoreproductivethanifeachweretoactinisolation.Forexample,inasmallfirm,itismoreefficientforeachdepartmenttodealwithonefinancedepartmentthanforeachdepartmenttohaveaseparatefinancedepartmentofitsown.

OPENANDCLOSEDSYSTEMS.Asystemisconsideredanopensystemifitinteractswithitsenvironment;itisconsideredaclosedsystemifitdoesnot.Allorganizationsinteractwiththeirenvironment,buttheextenttowhichtheydosovaries.Anautomobileplant,forexample,isafarmoreopensystemthanamonasteryoraprison.

SYSTEMBOUNDARY.Eachsystemhasaboundarythatseparatesitfromitsenvironment.Inaclosedsystem,thesystemboundaryisrigid;inanopensystem,theboundaryismoreflexible.Thesystemboundariesofmanyorganizationshavebecomeincreasinglyflexibleinrecentyears.Forexample,managersatoilcompanieswishingtoengageinoffshoredrillingnowmustconsiderpublicconcernfortheenvironmentAtrendisthatAmericancommunitiesaredemandingmoreandmoreenvironmentalresponsibilityfromcompanies.Forexample,SantaRosa,California,acityof125,000,treatsenvironmentalviolationssuchas"off‐gassing"awasteproduct,thatis,allowingittoevaporateintotheatmosphere,asapotentialcriminaloffense.

FLOW.Asystemhasflowsofinformation,materials,andenergy(includinghumanenergy).Theseenterthesystemfromtheenvironmentasinputs(rawmaterials,forexample),undergotransformationprocesseswithinthesystem(operationsthatalterthem),andexitthesystemasoutputs(goodsandservices).

FEEDBACK.Feedbackisthekeytosystemcontrols.Asoperationsofthesystemproceed,informationisfedbacktotheappropriatepeople,andperhapstoacomputer,sothattheworkcanbeassessedand,ifnecessary,corrected.Forexample,whenAluminumCompanyofAmericabeganfeedingproductiondatabacktothefactoryfloor,workersintheAddy,Washington,magnesiumplantquicklyobservedwaystoimproveoperations,boostingproductivityby72percent.Figure2‐2(notshown)showstheflowsofinformation,materials,energy,andfeedbackinanopensystem.

Systemtheorycallsattentiontothedynamicandinterrelatednatureoforganizationsandthemanagementtask.Thus,itprovidesaframeworkwithinwhichwecanplanactionsandanticipatebothimmediateandfar‐reachingconsequenceswhileallowingustounderstandunanticipatedconsequencesastheydevelop.Withasystemsperspective,generalmanagerscanmoreeasilymaintainabalancebetweentheneedsofthevariouspartsoftheenterpriseandtheneedsandgoalsthewholefirm.

THECONTINGENCYAPPR0ACH

Thewell‐knowninternationaleconomistCharlesKmdlebergerwasfondoftellinghisstudentsatMITthattheanswertoanyreallyengrossingquestionineconomicsis::Itdepends."Thetaskoftheeconomist,Kindlebergerwouldcontinue,istospecifyuponwhatitdepends,andinwhatways.

"Itdepends"isanappropriateresponsetotheimportantquestionsinmanagementaswell.Managementtheoryattemptstodeterminethepredictablerelationshipsbetweensituations,actions,andoutcomes.Soitisnotsurprisingthatarecentapproachseekstointegratethevariousschoolsofmanagementthoughtbyfocusingontheinterdependenceofthemanyfactorsinvolvedinthemanagerialsituation.

Thecontingencyapproach(sometimescalledthesituationalapproach)wasdevelopedbymanagers,consultants,andresearcherswhotriedtoapplytheconceptsofthemajorschoolstoreal‐lifesituations.Whenmethodshighlyeffectiveinonesituationfailedtoworkinothersituations,theysoughtanexplanation.Why,forexample,didanorganizationaldevelopmentprogramworkbrilliantlyinonesituationandfailmiserablyinanother.Advocatesofthecontingencyapproachhadalogicalanswertoallsuchquestions:Resultsdifferbecausesituationsdiffer;atechniquethatworksinonecasewillnotnecessarilyworkinallcases.

Accordingtothecontingencyapproachthemanager'staskistoIdentifywhichtechniquewill,inaparticularsituation,underparticularcircumstances,andatparticulartime,bestcontributetotheattainmentofmanagementgoals.Whereworkersneedtobeencouragedtoincreaseproductivity,forexample,theclassicaltheoristmayprescribeanewwork‐simplificationscheme.Thebehavioralscientistmayinsteadseektocreateapsychologicallymotivatingclimateandrecommendsomeapproachlikejobenrichment‐‐thecombinationoftasksthataredifferentinscopeandresponsibilityandallowtheworkergreaterautonomyinmakingdecisions.Butthemanagertrainedinthecontingencyapproachwillask,"Whichmethodwillworkbesthere?"Iftheworkersareunskilledandtrainingopportunitiesandresourcesarelimited,worksimplificationwouldbethebestsolution.However,withskilledworkersdrivenbyprideintheirabilities,ajob‐enrichmentprogrammightbemoreeffective.Thecontingencyapproachrepresentsanimportantturninmodernmanagementtheory,becauseitportrayseachsetoforganizationalrelationshipsinitsuniquecircumstances.

Forexample,whenmanagersatTacoBelladdressedthequestionofwhatwouldworkbestforitsrestaurants,theyredefinedbusinessbasedonthesimplepremisethatcustomersvaluefood,service,andthephysicalappearanceoftherestaurant.Toimplementthenewcustomer‐focusedgoals,thecompanyrecruitednewmanagerswhowerecommittedtocreatingordeliveringgoodsthatcustomersvalueandwhocouldcoachandsupportstaffinthenewdirection.Toconcentrateon

customers,TacoBelloutsourcedmuchoftheassembly‐linefoodpreparation,suchasshreddinglettuce,allowingemployeestofocusoncustomers.Asaresult,ithasenjoyeda60percentgrowthinsalesatcompany‐ownedstores.0therfastfoodrestaurantsmightbasetheirbusinessondifferentsituationalfactors,bythecontingencyview.

ENTERINGANERAOFDYNAMICENGAGEMENT

Alloftheprecedingtheorieshavecomedowntousinthelatetwentieth‐centuryworldoforganizationsandmanagement.Heretheyarepracticedagainstabackdropofrapidchangeandprofoundrethinkingabouthowmanagementandorganizationswillevolveinthenextcentury.Attheheartofthisrethinking,whichisreallyoccurringinnumerouswaysatthesametime,arenewwaysofthinkingaboutrelationshipsandtime.

Asboundariesbetweenculturesandnationsareblurredandnewcommunicationstechnologymakesitpossibletothinkoftheworldasa"globalvillage,"thescopeofinternationalandinterculturalrelationshipsisrapidlyexpanding.Thepaceoforganizationalactivitypicksupdramatically.Thesetrendsindicateaheightenedlevelofintensityinorganizationsandmanagementtoday.

Toemphasizetheintensityofmodernorganizationalrelationshipsandtheintensityoftimepressuresthatgoverntheserelationships,wecallthisflurryofnewmanagementtheorythedynamicengagementapproach."Dynamicengagement"isourterm.Intimeswhentheoriesarechanging,itisoftentruethatthelastthingthathappensisthatsomeoneassignsanametothenewtheory.Weusedynamicengagementtoconveythemoodofcurrentthinkinganddebateaboutmanagementandorganizations.Itisquitelikelythattwentyyearsfromnow,wellintoyourorganizationallives,youwilllookbackandcallthisperiodofmovementbysomeothername.

Dynamic‐‐oppositeofstatic‐‐impliescontinuouschange,growth,andactivity;engagement‐‐theoppositeofdetachment‐‐impliesintenseinvolvementwithothers.Wethereforethinkthetermdynamicengagementbestexpressesthevigorouswaytoday'smostsuccessfulmanagersfocusonhumanrelationshipsandquicklyadjusttochangingconditionsovertime.

Sixdifferentthemesaboutmanagementtheoryareemergingundertheumbrellathatwecalldynamicengagement.Toemphasizetheirimportancetoyourunderstandingofmanagementinthe1990sandbeyond,andtohighlightthedifferencesbetweenthem,wedevoteachapterinPartTwotoeachofthem.

NEWORGANIZATIONALENVIRONMENTS(Chapter3)

Thedynamicengagementapproachrecognizesthatanorganization'senvironmentisnotsomesetoffixed,impersonalforces.Rather,itisacomplex,dynamicwebofpeopleinteractingwitheachother.Asaresult,managersmustnotonlypayattentiontotheirownconcerns,butalsounderstandwhatisimportanttoothermanagersbothwithintheirorganizationsandatotherorganizations.Theyinteractwiththeseothermanagerstocreatejointlytheconditionsunderwhichtheirorganizationswillprosperorstruggle.Thetheoryofcompetitivestrategy,developedbyMichaelPorter,focusesonhowmanagerscaninfluenceconditionsinanindustrywhentheyinteractasrivals,buyers,suppliers,

andsoon.Anothervariationonthedynamicengagementapproach,mostnotablyarguedbyEdwardandJeanGernerSteadinManagementforaSmallPlanet,placesecologicalconcernsatthecenterofmanagementtheory.

ETHICSANDSOCIALRESPONSIBILITY(Chapter4)

Managersusingadynamicengagementapproachpaycloseattentiontothevaluesthatguidepeopleintheirorganizations,thecorporateculturethatembodiesthosevalues,andthevaluesheldbypeopleoutsidetheorganization.Thisideacameintoprominencewiththepublicationin1982ofInSearchofExcellencebyThomasPetersandRobertWaterman.Fromtheirstudyof"excellent"companies,PetersandWatermanconcludedthat"thetopperformerscreateabroad,upliftingsharedculture,acoherentframeworkwithinwhichcharged‐uppeoplesearchappropriateadaptations.

RobertSolomonhastakenthisideaastepfurther,arguingthatmanagersmustexercisemoralcouragebyplacingthevalueofexcellenceatthetopoftheiragendas.Indynamicengagement,itisnotenoughformanagerstodothingsthewaytheyalwayshave,ortobecontentwithmatchingtheircompetitors.Continuallystrivingtowardexcellencehasbecomeanorganizationalthemeofthe1990s.Becausevalues,includingexcellence,areethicalconcepts,thedynamicengagementapproachmovesethicsfromthefringeofmanagementtheorytotheheartofit.

GLOBALIZATIONANDMANAGEMENT(Chapter5)

Thedynamicengagementapproachrecognizesthattheworldisatthemanager'sdoorstepinthe1990s.Withworldfinancialmarketsrunning24hoursaday,andeventheremotestcornersoftheplanetonlyatelephonecallaway,managersfacingthetwenty‐firstcenturymustthinkofthemselvesasglobalcitizens.KenichiOhmaemakesthispointashedescribesa"borderless"worldwheremanagerstreatallcustomersas"equidistant"fromtheirorganizations.

Asimplecomparisonillustrateshowthingshavechanged.IfyouweretolookthroughAlfredSloan’sautobiographyabouthislongcareerasGeneralMotorschairmanthroughthe1940s,youwouldfindverylittleaboutinternationalfactors—withgoodreasonmthattimeandplace.Today,however,ifyoutimeintoaCNNbroadcastyouwillnoticethatthereportersdonotusetheword"foreign"atall.Or,considertheposteronthewallofHondadealerships,whichsaystheideaofan"Americancar"doesn'tmakeanysenseinanerawhenasinglecarcontainspartsmadebypeoplefromallovertheglobe.

INVENTINGANDREINVENTINGORGANIZATIONS(Chapter6)

Managerswhopracticedynamicengagementcontinuallysearchforwaystounleashthecreativepotentialoftheiremployeesandthemselves.Agrowingchorusoftheoristsareurgingmanagerstorethinkthestandardorganizationstructurestowhichtheyhavebecomeaccustomed.Petersisonceagainattheforefront.Hisconceptof"liberationmanagement"challengesthekindsofrigidorganizationstructuresthatinhibitpeople'screativity.Peters'heroessucceedinspiteofthosestructures.MichaelHammerandJamesChampyhavemadetheirconceptofreengineeringthe

corporation"intoabestseller.HammerandChampyurgemanagerstorethinktheveryprocessesbywhichorganizationsfunctionandtobecourageousaboutreplacingprocessesthatgetinthewayoforganizationalefficiency.

CULTURESANDMULTICULTURALISM(Chapter7)

Managerswhoembracethedynamicengagementapproachrecognizethatthevariousperspectivesandvaluesthatpeopleofdifferentculturalbackgroundsbringtotheirorganizationsarenotonlyafactoflifebutasignificantsourceofcontributions.

JoanneMartinhaspioneeredtheculturalanalysisoforganizations.Sheexplainshowdifferencescreateunprecedentedchallengesformodemmanagers.CharlesTaylorisaprominentproponentofthesocalled"communitarian"movement.Taylorclaimsthatpeoplecanpreservetheirsenseofuniqueness‐‐theirauthenticity—onlybyvaluingwhattheyholdincommonandseekingtoextendwhattheyholdincommonintheorganizationsandcommunitiesinwhichtheylive.CornelWestgrabsourattentiontodifferentcultureswiththeverytitleofhisbook,RaceMatters.Martin,Taylor,andWestallwantustoseethebenefitsthatcomefromwelcomingandunderstandingdifferencesamongpeople.Still,noneofthemsaythatacceptanceofdifferentcultureswillbeeasy.Multiculturalismisamovingtargetasmoreandmorepeoplebecomeconsciousoftheirparticularculturaltraditionsandties.Hereiswhereboth"dynamic"and"engagement"clearlycometogetherasweenvisiontheorganizationsofthetwenty‐firstcentury.

QUALITY(Chapter8)

Bythedynamicengagementapproach,TotalQualityManagement(TQM)shouldbeineverymanager'svocabulary.Allmanagersshouldbethinkingabouthoweveryorganizationalprocesscanbeconductedtoprovideproductsandservicesthatareresponsibletotougherandtoughercustomerandcompetitivestandards.Strongandlastingrelationshipscanbefruitfulbyproductsofa"quality"frameofmindandaction,bythisview.TotalQualityManagementaddsonemoredynamicdimensiontomanagement,becausequality,too,isalwaysamovingtarget.

Dynamicengagementisanexampleofthechangingfaceofmanagementtheory.Noteveryonewehavementionedinthisoverviewofthedynamicengagementapproachcallshimselforherselfamanagementtheorist.Somearephilosophersandsomearepoliticalscientists.Aswebringthischaptertoaclose,wewanttopointoutanimportantlessoninthislineupofdynamicengagementtheorists.Thedynamicengagementapproachchallengesustoseeorganizationsandmanagementasintegralpartsofmodemglobalsociety.Thiswasnotalwaysatenetofmanagementtheory.Oncethedoorisopenedbetweenorganizationsandthelargerworld,however,manynewinfluencescancometobearonquestionsaboutmanagementtheoryandrelationships.

REMEMBERTOCHANGEWITHTHETIMES

Wehavediscussedtwobasicthingsinthischapter.First,theorists,whatevertheirfieldsofendeavor,tendtobepeopleandproductsoftheirtimes.Second,managementtheories,liketheoriesinallfields,tendtoevolvetoreflecteverydayrealitiesandchangingcircumstances.Bythesametoken,

managersmustbesensitivetochangingcircumstancesandequallywillingtochange.Iftheydonot,theymustbesurpassedbymoreflexiblecompetitors.

BothoftheseideasapplytoHenryFord,themanwhoboldlybracedtheideasofscientificmanagement,revolutionizingtheautoindustryandsocietyintheprocess.

YetmanyofFord’smanagerialpracticeswereconservativeorunresponsivetochangingtimes,andhisholdontheautomotivemarketwaseventuallywrestedfromhimbycompaniesmorefarsightedintheirmanagerialtheoriesandpractices.Hostiletothebankingcommunity,forexample,Fordrefusedoutsideinvestmentsinhiscompanythroughouthislifetime,borrowingcapitalonlywhenabsolutelynecessaryandpreferringtofinancecorporateactivitiessolelythroughthecompany’sownincome.Hewasalsoinclinedtoignorethedynamicsoftheindustrythathehadlargelyfounded.AlthoughheopenedupbranchfactoriestocatertoagrowingEuropeanmarket,helongfailedtofollowmanagerialadvicetoretoolforboththehydraulicbrakeandsix‐oreightcylinderengine;healsoresistedmanagementcounselregardingtheadvancesingearshiftandtransmissiontechnologyandevenputoffintroducingcolorvarietyintohisproductline(Fordpreferredhiscarstobeblack).Hisdisinterestinconsumerdemandsforcomfortandstyleultimatelycosthimhisindustry’sleadership,whichpassedtoGeneralMotors,aconglomerateassembledfromover20diversfirmsby

founderWilliamDurantandasecondgenerationofAmericanindustrialorganizers.