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The History of Management Thought Management 336 Mike Bejtlich Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren.

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Presentation on theme: "The History of Management Thought Management 336 Mike Bejtlich Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren."— Presentation transcript:

1 The History of Management Thought Management 336 Mike Bejtlich Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren

2 Chapter Fourteen The Search for Organizational Integration

3 Search for Organizational Integration Mary Parker Follett Chester Barnard

4 Mary Parker Follett 1868-1933 The Political Philosopher Follett was chronologically closer to the scientific management movement, but intellectually a forerunner of understanding the group processes Mary Parker Follett

5 Basis of her philosophy Johann Fichte (1762-1814): each ego is a social one, bound to a wider world of egos. From this Follett concluded that individuals can discover their true nature and gain freedom through the group. Georg Hegel (1770-1831) She espoused the Gestalt notion that a person’s “true self is the group self.”

6 Follett and Conflict Resolution Submission if in a conflict situation. With struggle, someone wins and someone loses. Compromise was a solution she did not like, especially as it appeared in labor- management collective bargaining.

7 Follett and Conflict Resolution Integration was the best solution. In integration, parties find a solution that did not involve compromise, submission, or struggle. Integration involves finding a creative solution so that both parties achieve their goal. Mary Parker Follett

8 Follett and Authority & Power Rethinking authority and power is essential to integration. She advocated power-with and co-action to replace power-over and coercion. Depersonalize orders and follow the law of the situation. Authority is based on knowledge and not the will of one person. “Power with” required “circular response,” disclosure, and open discussion. Follett believed in employee representation plans because of cooperation and shared power.

9 Follett and Leadership Follett’s notion of the role of the leader/manager was an extension of her ideas of integration and authority. Control could not be achieved without integrated efforts, that is, when interests were not reconciled. Control was based on facts, not people; and “correlated,” not imposed from above. Coordination facilitated control. Leadership, then, involved defining the purpose of the organization and skills in coordinating and evoking the law of the situation.

10 Follett and Leadership These leadership tasks were not based on the power of the leader, but a reciprocating influence of leaders and followers within the context of the situation. Mary Parker Follett

11 Follett’s Books

12 Chester Barnard 1886-1961 The Erudite Executive Chester Barnard influenced human relations thinking and continues to influence our understanding of organizations and management. Chester I. Barnard

13 Barnard and Cooperative Systems Formal organizations as the kind of cooperation that is “conscious, deliberate, and purposeful.” Formal organizations helped: Maintain an internal equilibrium. Examine external forces to see if adjustments must be made. An “open systems” viewpoint. Analyze the functions of executives. Organizations needed to be cooperative systems because people had choices and they could choose to contribute or not to contribute. The executive functions could modify actions and motives through influence and control.

14 Barnard and Cooperative Systems Effective-Efficient: individual and organizational goals might differ and Barnard expressed this as: Effective – meet the goals of the organization. Efficient – meet individual motives and only the individual could determine whether or not this was occurring. The only measure for efficiency according to Barnard was the organization’s capacity to survive. That is, to provide adequate inducements to satisfy individual motives to secure their cooperation.

15 Barnard and Formal Organizations Barnard defined a formal organization as “a system of consciously coordinated activities or forces of two more more persons.” The late Lyndall Urwick felt this definition was too broad, and quipped: “under Barnard’s definition, a boy kissing a girl is also a formal organization.” Chester I. Barnard

16 Elements of a Formal Organization Willingness to cooperate, and this was to be facilitated by the offerings of objective and subjective incentives. This notion meant: “self-abnegation” “surrender of control of personal conduct” “depersonalization of personal actions” Purpose or objectives of the organization. Although individual and organizational motives were different, individuals could achieve their motives by working toward organizational purposes.

17 Elements of a Formal Organization Communication – Barnard developed three principles: Channels should be definitely known Objective authority requires a definite channel of communication (formal authority) Keep the line of communication short and direct.

18 Barnard’s Informal Organization Three universal elements of an informal organization: Communication Maintenance of cohesiveness Maintenance of feelings of personal integrity and self-respect.

19 Barnard’s Acceptance Theory of Authority Barnard’s definition of authority included the notion that a communication must be “accepted” by the organizational member. Authority did not reside in persons of authority, but in a member’s acceptance of authority. From The Functions of the Executive by Chester I. Barnard. Harvard University Press, 1938.

20 Barnard’s Acceptance Theory of Authority Individuals would consent to authority if four conditions were met: They understood the communicated order. They believed the order was consistent with the organization’s purpose. The order was “compatible with their personal interests as a whole.” They were physically and mentally able to comply with the order. From The Functions of the Executive by Chester I. Barnard. Harvard University Press, 1938.

21 Barnard’s “Zone of Indifference” “Zone of Indifference” – Barnard’s phrase for explaining how an organization could function since members could accept or reject authority on almost any occasion. Individuals could be very “indifferent,” leading to a wider possibility of acceptance, or less indifferent. This depended on the individuals weighing the “inducements,” burdens, and sacrifices.

22 “Authority of Leadership” This was Barnard’s way of expressing the “potentiality of assent” created when people had respect for and confidence in their leaders. Authority still existed in the organizational hierarchy, in formal authority, but authority in the final analysis still rested with the organizational member.

23 Barnard – Functions of the Executive The functions of the executive: Provide a system of communication Promote securing personal efforts Formulate and define organizational purpose. These reflect to a large extent the elements of organization. Barnard had a top management view of integrating the organization as a whole, internally and the external environment.

24 Moral Leadership Moral leadership for Barnard involved executives having a high moral code, demonstrating it as an example, and seeking to create this morality in others. How would Barnard feel about the executives at Enron?

25 Summary Mary Parker Follett and Chester Barnard bridged two eras. Follett introduced a group view with Gestalt psychology. Barnard focused on the formal and informal organization. Both operated on a philosophical plane. Both sought to create a spirit of cooperation and collaboration. Both were concerned with the individual in group effort. Both examined concepts of authority and moral leadership.

26 Chapter Fifteen People and Organizations

27 Eduard C. Lindeman (1885-1953) Jacob L. Moreno (1889-1974) Kurt Lewin (1890-1947) Abraham H. Maslow (1908-1970) Joseph N. Scanlon (1899-1956) James F. Lincoln (1883-1965) Charles P. McCormick (1876-1970) William Foote Whyte (1914-2000) Leadership Studies at Michigan and Ohio State with Rensis Likert (1903-1981), Ralph Stogdill (1904-1978) and Carroll L. Shartle (1903-1993).

28 People at Work – Micro View Eduard C. Lindeman Early study of group behavior in member interaction, participation, and attitudes Origin of phrase “participant-observer” Lindeman was a cohort of Mary Parker Follett and they appear to have influenced each other. Eduard C. Lindeman, Reproduced from the encyclopaedia of informal education,

29 People at Work – Micro View Jacob Moreno Sociometry, trying to classify individuals into groups that were capable of harmonious relationships. Sociogram, mapping interpersonal preferences…there was a difference when preferences were for social vs. task mates. Psychodrama, a cathartic experience for an individual in a group setting Sociodrama, the basis of role playing. Role reversal, taking the role of others and a useful technique for working with culturally diverse groups. Jacob Moreno, courtesy of Dr. Walter Logeman

30 People at Work – Micro View Kurt Lewin Group dynamics and field theory – Gestalt notions for understanding individuals in groups. Quasi-stationary equilibrium. Groups never achieved a steady state but were continuously in a process of mutual adaptation.

31 People at Work – Micro View Kurt Lewin and Leadership During leadership studies, Lewin asked his counselors to role play democratic or authoritarian styles and found what he expected in boy’s reactions. One counselor, however, misplayed his role and, rather than throwing the data out, Lewin called this “laissez-faire,”meaning no leadership. This style has persisted in the literature despite its inaccuracy.

32 People at Work – Micro View Kurt Lewin and Changing Behavior Lewin’s found that group participation facilitated the change process. His three step model is still a foundation for modern theory: “unfreezing” through participation “moving” to the new level “freezing” (reinforcing) the desired new behavior. Lewin’s work became the basis for sensitivity training through his influence on Leland Bradford.

33 Changing Assumptions about People at Work Motivation Job Enlargement Participation Leadership

34 Motivation – Abraham H. Maslow His “humanistic psychology” was a revolt against behaviorism leading to the Third Force in psychology. His contact with industry led to the book Eupsychian Management. Abraham H. Maslow

35 Motivation – Abraham H. Maslow Dynamics of need fulfillment or deprivation Hierarchy of Needs

36 Motivation – A.H. Maslow The Journals of Abraham Maslow by Abraham Maslow. The Lewis Publishing Company, 1982.

37 Joseph Scanlon Union official and later a colleague of Douglas McGregor at MIT. The Scanlon Plan A union-management productivity plan whereby groups of workers got bonuses for proposing savings in labor costs Group oriented Not profit sharing.

38 James F. Lincoln Rewarding individual efforts based on skill ratings. Wages and benefits were comparable to the Cleveland area labor market In addition, bonuses were paid for performance based on quality and quantity of output as well as self-management. Bonuses are substantial.

39 Job Enlargement Research in the 1940’s by Walker and Guest indicated some possible improvements if jobs were designed to lengthen (broaden) the work cycle. This concerned combining jobs rather than increasing job depth.

40 Participation Participation was a power-equalization thesis of this period to play down the importance of the organizational hierarchy. James Worthy (1910-1998) at Sears, Roebuck argued for flatter structures and decentralization. Also worked with the University of Chicago’s Committee on Human Relations to study the impact of structure on employee morale.

41 Participation William B. Given, Jr. – “bottom-up” approach Charles P. McCormick – a plan for participation which is still operative in the McCormick Company (tea, spice, and extract firm). Junior Boards were created (“multiple management”) to improve communications, manager development, and coordination through participation. The Golden Rule was the basis for his successful technique for managing people.

42 Rensis Likert – University of Michigan Studies Found a two dimensional orientation: An employee orientation stressing interpersonal relations A production orientation focusing on producing An employee orientation coupled with more general supervision led to higher productivity, better morale, lower turnover, greater group cohesiveness and less employee anxiety. Rensis Likert

43 Ohio State University Studies Ralph M. StogdillCarroll L. Shartle

44 Ohio State University Studies

45 Summary of Michigan and OSU Leadership Studies Despite differing terminology, leadership was viewed by each as a two-by-two matrix of leader behaviors in which people-oriented was not mutually exclusive of a production orientation.

46 People at Work: The Macro View William Foote Whyte (1914-2000) – restaurant studies E. Wight Bakke (1903-1971) – formal and informal systems Herbert A. Simon (1916-2001) – how choices were made George C. Homans (1910-1989) – activities, interactions, sentiments

47 People at Work: The Macro View William F. Whyte’s restaurant study: Status ran counter to workflow and who initiated work for others. Whyte's work was key to the idea of socio- technical systems. Whyte is noted for “participatory action research.”

48 People at Work: The Macro View E. Wight Bakke the interactions of the formal and informal systems; the "bonds" of organization; the "fusion" process involving organizational position and personal views of standing or status.

49 People at Work: The Macro View Herbert A. Simon, Nobel Laureate, was influenced by Barnard. Wrote about limits that “bound the area of rationality.“ This led to “satisficing" or "good enough" decisions. Herbert A. Simon

50 People at Work: The Macro View For Simon, composite decisions are better due to limits on a person's ability to achieve better solutions;participation by different groups would be an improvement. With James March (1928-), Simon wrote the influential book Organizations.

51 People at Work: The Macro View George Homans was influenced by Pareto. His study of relationships in work and social systems found dimensions such as : Activities, formal or informal. Interactions,prescribed or emergent. Sentiments, the elusive nature of feelings. George Homans

52 Summary Evolving management thought had two phases in this period: Micro level inquiry into sociometry, group dynamics, participation, leadership and motivation Macro level search for models to explain interactions between the formal and informal organization. Human relation additions to concepts of management include: An increasing emphasis on the social Enlarging jobs to counteract overspecialization Less emphasis on hierarchy, more on participation Recognition of the informal organization Developing the means to study the interaction of the formal and informal organization.

53 Chapter Sixteen Organizations and People

54 Organizations – Structure and Design James D. Mooney (1869-1947) and Alan C. Reiley (1884-1957) Administrative Theory Span of Control Toward a Top Management Viewpoint Ralph C. Davis (1894-1986) Harry A. Hopf (1882-1949) Ronald H. Coase (1910-

55 James Mooney and Alan Reiley They searched for principles of organization both in historical examples and in large-scale enterprise Objectives – “profit through service” Efficiency resided in organized group effort Formalism, the basis of an efficient organization, involved the “efficient coordination of all relationships” Management actuates, plans, and controls the plans and procedure of the organization.

56 James Mooney and Alan Reiley – Principles Coordination – rested on authority Authority was in the organization, while power was an individual possession “Doctrine” – Objectives Scalar principle, which was founded in leadership Delegation – conferring authority Functional principle – difference in duties performed (such as line-staff) Staff – represented the authority of ideas Line – represented the “authority of man.”

57 Administrative Theory Luther Gulick (1892-1993) Better known for his work in public administration POSDCORB – his view of the functions of the manager Planning, organizing, staffing, directing, co-ordination, reporting, and budgeting Departmentation and “principles of homogeneity” – grouping persons by: Purpose, process, persons or “things” and place

58 Administrative Theory Lyndall Urwick (1891-1984) Lt. Col. Urwick attempted to synthesize a number of contributors to develop a general theory of organization and management. 8 Principles of organization Along with Gulick, brought Fayol into the picture long before Fayol was recognized in the U.S. Lt. Col. Lyndall Urwick

59 Span of Control – V. A. Graicunas Influenced by Urwick and the British general Sir Ian Hamilton. Put forth an argument for a narrow span of control due to “span of attention” and the relationships that managers must deal with. The mathematics of the different types of relationships indicated a geometric growth of relationships with an arithmetic increase in the number of subordinates (See Wren text for discussion)

60 Span of Control – Graicunas While the mathematics would indicate keeping the span of control narrow, Graicunas also includes a qualifier: Exceptions could be made if the work was routine, was done independently of others, and where supervisory responsibilities were less complex. See Bedeian, A.G. “Vytautas Andrius Graicunas: A Biographical Note,” Academy of Management Journal 17, no. 2 (June 1974) for fascinating account of Graicunas’ unusual life.

61 Graicunas Papers on the Science of Administration by Urwick and Gulick.

62 Pay special attention to the authors

63 Toward a Top Management Viewpoint – Ralph C. Davis Davis (1894-1986) was educated as a mechanical engineer, took an early shop management approach, encountered the Coubrough translation of Fayol, leading him to his top management contributions. Organic functions of management: planning, organizing, and controlling. Ralph C. Davis

64 Management defined as “the function of executive leadership.” Unique insights into controlling with respect to its timing: Preliminary – trying to design in advance what would promote the planned performance. Concurrent – supervising, comparing, and taking corrective action as needed.

65 Toward a Top Management Viewpoint – Harry Hopf Hopf (1882-1949) was influenced by Taylor and applied these ideas in a more general management setting. Interested in office worker and executive compensation, while others had focused on blue-collar workers. Interested in tying executive compensation to performance (still an important issue today).

66 Harry Hopf “Form follows function,” an architectural notion for organization structure (ahead of A.D. Chandler Jr.’s “structure follows strategy?”). “Optimology,” a view of the firm as a whole – serve society to maximize profits.

67 Other Studies of Top Management Holden, Fish, and Smith studied 31 blue-chip companies in 1941: found need for clearer objectives and plans. Sune Carlson found communications occupied a major portion of a manager's time (1951). Jackson Martindell created a management audit; a search for excellence before Tom Peters and Bob Waterman.

68 Ownership and Control Adolph Berle and Gardiner Means criticized executives and directors as “economic autocrats” who were removed from serving the interests of the shareholders. (1930s) Robert Gordon’s criticism was much the same, seeing top management as a self- perpetuating oligarchy serving their own interests. Why does this seems to be an evergreen, ever recurring problem?

69 Visible and Invisible Hands John R. Commons (1868-1945), labor economist and founder of institutional economics, noted that the transactions were smallest unit of analysis. His ideas achieved wider appreciation later. John R. Commons, courtesy of the Wisconsin Electronic Reader

70 Visible and Invisible Hands Ronald H. Coase (1910-) wrote his seminal work during this time about the nature of the firm. He saw the firm as the “visible hand” and superior, in most cases, to the market in allocating resources. Coase was continuing the tradition of J.B. Say and Alfred Marshall but his work received belated acclaim. Coase, from the University of Chicago, won the Nobel Prize in economics in 1991.

71 Summary Contributors in this chapter were concerned with structuring activities and relationships for productivity and satisfaction at work: Mooney and Reiley presented rules of organization from history. Dennison’s work built on compatible work groups. Gulick, Urwick, and Graicunas focused on formalizing relationships. Davis focused on top management. Hopf applied the scientific approach to examining the whole firm. Coase and Commons introduced transaction cost economics.

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