study unit 1 - the development of management thought
TRANSCRIPT
8/6/2019 Study Unit 1 - The Development of Management Thought
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By the end of this Study Unit you should be able to:
` Understand the early developments in management
thought regarding the organisation and its
management` Appreciate the relationships between management
theor y and practice
` Compare and contrast the main contributions to the
development ofmanagement thinking andorganisational behaviour
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With the advent of the Industrial Revolution came:
` The need to increase efficiency and effectivenesshas driven the evolution of management theor y
` Job specialization, the division of labor and the study
of how people do things is central to the pursuit of increased efficiency
` Theories about the best ways to motivate and
control employees have evolved
` The study of the external environment¶s impact onan organization has become a central issue in
management thought
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1A-44
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Systematic
management
Administrative
management
Quantitative
management
Systems
theory
Current and
future revolutions
Scientific
management Human
relationsOrganizational
behavior
Bureaucracy
Classical Approaches Cont emporary Approaches
Contingency
theory
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` The effectiveness of management activities/ functions inpractice is based on appreciating early ideas ± whether accepted or displaced.
` Practical management of people and their behaviour isfounded on ideas of what will work in practice
` Management thought has evolved to cope withenvironmental changes
` Management insight requires combining conceptualframeworks of organizational behaviour, and itsapplication in practice
` They form the foundations of current understanding of organizational behaviour
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A management perspective thatemerged during the 19th and early
20th centuries that emphasized arational, scientific approach to thestudy of management, and sought
to make organizations efficientoperating machines.
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Focuses on theFocuses on theindividualindividualworkersworkers
productivityproductivity
Focuses on theFocuses on the
functions offunctions ofmanagementmanagement
Focuses on theFocuses on the
overalloverallorganizationalorganizational
systemsystem
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1) Understand the purpose of the organization
2) Examine organizational structure
3) Focus on the operations of the organizationundertaken to achieve organizational objectives
4) Sought to prescribe ³one best way´ for
organizations to be structured and managed
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Adam Smith (18th centur y economist)
Observed that firms manufactured pins in one of twodifferent ways:
- Craft-style²each worker did all steps.
- Production²each worker specialized inone step.
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Smith realized that:
Breaking the total job down into steps
allowed workers to become ver y
skilled at specific tasks, thus
increasing productivity
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A subfield of the ClassicalManagement Perspective that
emphasized scientifically-determined changes inmanagement practices as the
solution to improving labour productivity.
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` EFFICIENCY ± by increasing the output per worker and reducing deliberate ³underworking´ (a.k.a.systematic soldiering) by employees
` PR EDICTABILITY ± of job performance, through
standardizing tasks by dividing up tasks into small,closely specified subtasks
` CONT R OL ± by establishing discipline throughhierarchical authority and introducing a system
whereby all management¶s policy decisions could beimplemented
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` A clear division of tasks and responsibilities betweenmanagement and workers
` Use of scientific methods to determine the best way of doing a job
` Scientific selection of the person to do the newly designed job
` Training the selected worker to perform the job in theprescribed way
` Surveillance of workers through the use of hierarchies
of authority and close supervision` The introduction of payment on a piecework basis
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` Studied fatigue caused by lighting,heating, and the design of tools andmachines.
` Time and motion studiesx Breaking up each job action into its components.
x Finding better ways to perform the action.
x Reorganizing each job action to be more efficient.
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` It assumed that securing maximum earnings was thesole motivator of employees
` Neglected personal and interactional aspects of work
` Ignored the psychological needs and capabilities of workers
` Proposed a complex and unwieldy mode of supervision ± ³functional foremanship´
` It failed to appreciate worker reactions to proposed
procedures
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The study of how to create anorganizational structure that leads
to high efficiency
and effectiveness.
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Focuses on managing the whole organization
rather than individuals.
Henri Fayol (1841±1925)
x Was first to identif y the specific managementfunctions of planning, organizing, leading, and
controlling.
Lyndall Urwick (1891±1983)
x Integrated the work of previous managementtheorists.
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A subfield of the Classical ManagementPerspective that focused on the total
organization rather than the individualworker, and delineating the activities/functions of management to create an
organizational structure that leads to highefficiency and effectiveness
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` FO R ECASTING ± predicting future outcomes
` P LANNING ± devising a course of action to meet expected
circumstances in the future
` O R GANIZING ± allocating resources, dividing/ grouping
tasks to achieve objectives
` COMMANDING ± providing direction to employees
` COO R DINATING ± ensuring resources and activities are
working well towards the common goal
` CONT R OLLING ± monitoring progress to ensure that plans
are being carried out properly
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Functional division of work Hierarchical relationships Bureaucratic forms of control Narrow supervisor y spans Closely prescribed roles
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Like Taylor, Fayol prescribed principles which he believed would suit all organizat ions irrespect ive of size, t echnology, environment, employees et c., and was based on t he applicat ion of
cert ain key principles:
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1) Division of Labour
2) Authority
3) Discipline
4) Unity of Command
5) Scalar
principle/chain
6) Unity of direction
7) Interest
subordination
8) Remuneration
9) Centralization
10) Order
11) Equity of treatment12) Stability of
employment
13) Opportunity for initiative
14) Esprit de Corps
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Urwick consolidated Fayol¶s ideas
and, to an extent, synthesizedthem with the Scientific
Management approach to
prescribe 10 principles of organization
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1) Principle of the objective
2) Principle of authority
3) Principle of responsibility
4) Principle of correspondence
5) Principle of continuity
6) Principle of specialization
7) Principle of definition
8) Span of Control
9) Principle of coordination
10) Principle of balance
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` It misleadingly proposed a single, standardized
organizational model as the optimum one
` It promoted a militaristic, mechanistic organization.
` It overlooked the negative consequences of tight control
and narrow task specialization which can de-motivate
and hinder efficiency
` O
ver-emphasized an organization¶s formal structure.
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` It underestimated the complexity of organizations
` Based on personal knowledge, rather than systematic
research
` Lacked concern for social interactions
` Underestimated the effects of conflict
` Misunderstood how people thought, and processed
information
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Weber¶s work stemmed from his
interest in POWER and AUTHORITY
within societies. This concept was
then extended to examine its
relevance and applicability to
organizations.
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`POWER ± is used to refer to the
capacity of individuals to overcomeresistance on the part of others, toexert their will, and to produce resultsconsistent with their interests andobjectives.
`AUTHORITY - is the right to give
orders, enforce rules, make decisionsand exercise power and control over others
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Type Description
Traditional Subordinat e obedience based upon
custom or tradit ion
Charismatic Subordinat e obedience based uponspecial personal qualit ies associat ed
wit h cert ain social reformers, polit ical
leaders, religious leaders, ororganizat ional leaders
Rationallegal Subordinat e obedience based upon
t he posit ion held by superiors
wit hin t he organizat ion
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A form of organization structure underpinned by therational-legal type of authority. Weber used the term todescribe a particular type of organization and was
concerned with how work was divided, coordinated andcontrolled. The bureaucratic organization¶s continuity was related to formal structure and positions, rather thanon particular individuals, based on the themes of IMPERSONALITY and RATIONALITY.
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2-32
Weber¶s
Principles of
Bureaucracy
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` JOB SPECIALIZATION ± jobs are broken down into simple,
routine and well-defined tasks. Clear definitions of authority and
responsibility are legitimated as official rules
` HIERARCHYOF AUTHORITY ± clear chain of command,and workers clearly know to whom they are accountable.
` EMPLOYMENT ± personnel are selected, promoted, paid
etc. on the basis of their technical qualifications and expertise
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` RECORDING ± administrative acts and decisions are
recorded in writing to provide organizational memor y and
continuity over time.` RULES & PROCEDURES ± all individuals are subject to
explicit rules, procedures, guidelines etc. to ensure reliable,
predictable behaviour.
` IMPERSONALITY ± rules and procedures are impersonal
and uniformly applied to all individuals, managerial and non-
managerial alike
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` Emphasized individual attitudes and behaviors, and group
processes, and recognized the importance of behavioral
processes in the workplace` Hugo Munsterber g (1863±1916): A German psychologist,
³the father of industrial psychology´, who advocated applying
psychological concepts to employees selection and motivation
industrial settings.
` Mary Parker Follett (1868±1933): Recognized the
importance of the role of human behavior in the workplace.
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Focused onFocused onrat ional behaviorrat ional behavior
ClassicalClassical
PerspectivePerspective Acknowledged t he Acknowledged t he
import ance of humanimport ance of humanbehaviorbehavior
BehavioralBehavioral
PerspectivePerspective
vs.
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Acknowledged Acknowledged the importance of humanthe importance of human
behavior in shaping managementbehavior in shaping management style,style,
and isand is associatedassociated with the work of:with the work of:
xx Mar y Parker FollettMar y Parker Follett
xx Elton MayoElton Mayo
xx Douglas McGregor Douglas McGregor
xxChester Chester BarnardBarnard
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A system is a set of interrelated
parts that function as a whole to
achieve a common purpose. Any
change in one part of the system
would usually lead to a change in
another part.
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Organisations are comprised of ³interrelated parts´
e.g. departments, functions, people, technology etc.
These parts function as a ³whole´ e.g. planning/
coordination/ control of activities, policies andprocedures etc.
These parts work together for a ³common purpose´
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Closed systems
are those that are
considered to be
isolated from its
environment, and
independent of it
Open systems
are those which
are connectedto, and interacts
with its
environment.
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This approach describesorganizations as open systems
that are characterized by entropy, synergy and sub-system interdependence.
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`Entropy ± The tendency for a systemto run down and die.
`Syner gy ± The concept that the
whole is greater than the sum of itsindividual parts.
`Subsystems ± parts of a system
that depend on one another for their functioning
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`Technical sub-system
`Psycho-social subsystem
`Structural subsystem
`Goals and values subsystem
`Managerial subsystem
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Encapsulates the technology being used
in an organization, as it influences the way
work is done, the organizational form andthe relationships between people. It
includes all aspects of information and
communications technology.
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Focuses on the people within the organization,
as their INDIVIDUAL goals, aspirations, values,
beliefs, motivations etc. will influence the way
work is done, and the nature of relationships. It
recognizes the presence and influence of the
informal organization, while ensuring
adherence to the formal organization.
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Concerned with the ways in which the
transformation process is undertaken (i.e.
inputs to outputs), thus considering the
division of tasks, employee groupings into
departments, their coordination and control
etc. this is ver y reminiscent of the Classical
Approach to Management.
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Focuses on the goals and values of the
ORGANIZATION as a whole, not its individual
members (psycho-social) i.e. the mission/
purpose, supporting sub-goals etc.
These goals and values are subject to change
over time.
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Focuses to the mechanisms of coordinationand control, beyond those of the structuralsubsystem e.g. management style, budgeting,
MBO, quality control etc.This subsystem can exert influence over theother subsystems within the organization to suittheir requirements
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INPUTS OUTPUTS
TR ANSFORMATION PR OCESS
FEED ACK
Technical subsyst em
Psycho-social subsyst em
Structural subsyst em
Goals and values
subsyst em
Managerial subsyst em
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LEVELLEVEL TASK TASK TIMESCALE TIMESCALE APPR OACH APPR OACH
TECHNICALTECHNICAL
SpecificSpecific
operationsoperations
ShortShort--termterm Costing &Costing &
measuringmeasuring
ORGANIZATIONALORGANIZATIONAL
CoordinationCoordination
of specificof specific
operationsoperations
Short/Short/
mediummedium
termterm
Mediation &Mediation &
compromisecompromise
INSTITUTIONALINSTITUTIONALSelection of Selection of operations tooperations to
fitfit
environmentenvironment
LongLong--termtermForecasting &Forecasting &negotiatingnegotiating
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This approach proposes that theThis approach proposes that thesuccessful resolution of organizationalsuccessful resolution of organizationalproblems is dependent onproblems is dependent on managers¶managers¶identification of key variablesidentification of key variables in any givenin any givensituation, andsituation, and address those issues asaddress those issues asthey arisethey arise i.e. there is no ³one best way´ i.e. there is no ³one best way´
structuring or managing an organization.structuring or managing an organization.
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Problem or Situat ionProblem or Situat ion
Solut ion orSolut ion orct ion Bct ion B
Solut ion orSolut ion orct ionct ion
Solut ion orSolut ion or A ct ion C A ct ion C
Import ant Import ant Cont ingenciesCont ingencies
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`̀ Acute labor shortages in high Acute labor shortages in high--technology job sectorstechnology job sectors
and an oversupply of less skilled labor and an oversupply of less skilled labor
`̀ An increasingly diverse and globalized workforce An increasingly diverse and globalized workforce
`̀ The need to create challenging, motivating, andThe need to create challenging, motivating, andflexible work environmentsflexible work environments
`̀ The effects of information technology on how peopleThe effects of information technology on how people
workwork
`̀ The complex array of new ways of structuringThe complex array of new ways of structuring
organizationsorganizations
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Woodward focused on the relationshipbetween manufacturing technology and
organization structure, and categorized firmsalong the lines of manufacturing capabilitiesgiven certain structural characteristics e.g.administrative overhead, span of control,
formalization, centralization etc.
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`̀Unit or Small Batch ProductionUnit or Small Batch Production ± ± involvesinvolves
the production of goods in batches of one or a fewthe production of goods in batches of one or a few
products designed to customer specifications.products designed to customer specifications.`̀Mass or Lar ge Batch ProductionMass or Lar ge Batch Production ± ± thethe
production of a large volume of products with the sameproduction of a large volume of products with the same
specifications.specifications.
`̀Process ProductionProcess Production ± ± the mechanization of thethe mechanization of the
entire workflow, and nonentire workflow, and non--stop productionstop production
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Burns & Stalker focused on the relationshipbetween the organization and its environments,which led them to propose two ³ideal types´ of management organization, which form theextremes on a continuum along which mostorganizations can be placed. They are:
The Mechanistic SystemThe Organic System
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Mechanistic:Mechanistic:Organizations as
machines ± i.e. acollection of moving
parts which act and
interact in defined,
routine and expectedways.
Or ganicOr ganic::Organizations asbiological organisms ±i.e. a growing entity which learns andadapts to itsenvironment over time
to ensure its survival
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`̀ The nature of the environmentThe nature of the environment
`̀ Distribution of tasksDistribution of tasks
`̀ Nature of individual tasksNature of individual tasks
`̀ Who has the power to define/ redefine tasksWho has the power to define/ redefine tasks`̀ Task scopeTask scope
`̀ Structure of control, authority andStructure of control, authority andcommunicationcommunication
`̀ Perceived location of knowledgePerceived location of knowledge
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The idea that the organizational structures andcontrol systems are contingent on characteristics
of the external environment
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Advocated that the main concern of management is the pursuit of excellence ±
striving for, measurement and eventualachievement of high standards of performance. The theor y is based on a totalcommitment to a series of management and
organizational imperatives.
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`̀ Bias for actionBias for action
`̀ Autonomy and entrepreneurship Autonomy and entrepreneurship
`̀ Close to the customer Close to the customer
`̀ Productivity through peopleProductivity through people
`̀ Hands on, value drivenHands on, value driven
`̀ ³Stick to the knitting´³Stick to the knitting´
`̀ Simple form, lean staff Simple form, lean staff
`̀ Simultaneous looseSimultaneous loose--tight propertiestight properties
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A more radical and flexible approach which proposed
that certain functions and activities be withdrawn from
functional departments and be allocated to outside³specialists´ i.e. the concept of outsourcing. The
formal structure of functional departments is to be
replaced by teams. It proposed the creation of an
eventual virtual organization.
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Ouchi developed this approach in an attempt to apply
the lessons of Japanese organization and
management styles and practices to theW
esternorganizations. Its purpose was to develop a
philosophy and value system which fosters
commitment to organizational goals.
N ote:the potential issues which would arise due to cultural
differences.
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` Secure lifetime employment
` Consensual, participative decision-making
` Collective responsibility
` Slow individual development` Implicit, informal control
` Holistic concern for the organization and its
members
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`̀ Individual expression and responsibilityIndividual expression and responsibility
`̀ Lack of company loyaltyLack of company loyalty
`̀ Focus on shortFocus on short--term, personal rewardsterm, personal rewards
`̀ Competition among employeesCompetition among employees`̀ Individualistic, autocratic decisionIndividualistic, autocratic decision--makingmaking
`̀ Formal, explicit structures and controls.Formal, explicit structures and controls.
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Can you:
` Explain the nature of the Classical Approaches to
Management, and assess their contribution to the
study of people in organizations
` Understand and explain the Behavioural limitations of
the Classical Approaches
` Explain the nature of Systems Theor y and more
Contemporar y Approaches, and assess their contribution to Management