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THE EVOLUTION OF MANAGEMENT THOUGHT, 6 TH EDITION Electronic Resource by: Regina Greenwood and Julia Teahen.

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Presentation on theme: "THE EVOLUTION OF MANAGEMENT THOUGHT, 6 TH EDITION Electronic Resource by: Regina Greenwood and Julia Teahen."— Presentation transcript:

1 THE EVOLUTION OF MANAGEMENT THOUGHT, 6 TH EDITION Electronic Resource by: Regina Greenwood and Julia Teahen

2 Organizations and People Chapter Sixteen

3 Organizations and People  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-

4 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.

5 James Mooney and Alan Reiley – Onward Industry  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.”

6 Administrative Theory Luther Gulick (1892-1993)  Luther Gulick is better known for his work in public administration Luther Gulick  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

7 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.

8 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

9 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.

10 V. A. Graicunas Papers on the Science of Administration by Urwick and Gulick.

11 Pay special attention to the authors

12 Toward a Top Management Viewpoint  Ralph C. 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.

13 Renewed interest in managerial work and seminal work in transaction costs and the nature of the firm is discussed here. This section is important as preparing the way for later developments in strategic management and organization theory. Toward a Top Management Viewpoint

14 Ralph C. Davis  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.

15 Toward a Top Management Viewpoint  Harry 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).

16 Was Harry Hopf ahead of A. D. Chandler Jr.’s “structure follows strategy?” Optimology is a view of the firm as a whole…serve society to maximize profits. How could this idea be used in strategy formulation? Harry Hopf – Form Follows Function & Optimology

17 The study found the need for clearer objectives and plans. Do we still face the same issues? Holden, Fish, and Smith’s 1941 Study

18 Other Studies of Top Management  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.

19 What did Adam Smith say about those who manage “other peoples’ money?”

20 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) Adolph Berle and Gardiner Means

21 Robert Gordon’s criticism was much the same, seeing top management as a self- perpetuating oligarchy serving their own interests. Why is ownership and control an ever recurring problem? Ownership and Control

22 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

23 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.Nobel Prize in economics in 1991.

24 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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