THE EVOLUTION OF MANAGEMENT THOUGHT SHERYL C. FARQUERABAO Instructor

EVOLUTION OF MANAGEMENT Major Schools of Management Thought Classical Schools Humanistic Schools Quantitative Approaches Systems Theory Contingency Management Learning Organizations

CLASSICAL PERSPECTIVES Classical Schools of Management Scientific Management Frederick W. Taylor The Gilbreths Henry Gantt Bureaucratic Organizations Max Weber Administrative Principles Henri Fayol

SCIENTIFIC MANAGEMENT MOVEMENT Frederick W. Taylor “Father of Scientific Management” Workers are primarily economically motivated and that they will put forth their best efforts if they are rewarded financially.

SCIENTIFIC MANAGEMENT MOVEMENT Believed that managers should: 1. develop series of rules and routines to help workers in their daily work 2. replace the rule-of-thumb method by finding the most efficient way of accomplishing a task 3. select scientifically, and then train, teach and develop worker, and 4. provide wage incentives to workers for increased output.

SCIENTIFIC MANAGEMENT MOVEMENT Frank and Lilian Gilbreth Engineer-psychologist, husband and wife team; known for time-and- motion study while focusing on human aspects of work. They tried to identify the one best way to perform a task in the most comfortable and time-efficient manner.

SCIENTIFIC MANAGEMENT MOVEMENT Henry L. Gantt Developed the task and bonus system and the Gantt chart for scheduling activities

Gantt Chart

BUREAUCRATIC SCHOOL Developed by Max Weber, a German Sociologist, who dealt with theory of structure of the authority in organizations and distinguish between power and authority, between compelling action and voluntary response. Believed in specialization in labor, regulations and procedures, and of the advantages of a hierarchical system in making informed decisions.

Characteristics of a Bureaucratic Organization - Weber Labor is divided with a clear indication of authority and responsibility. The principle of hierarchy exists. Personnel are selected and promoted based on qualifications. Rules are written down and impersonally and uniformly applied. Promotion into management is only through demonstrated technical competence. Rules and procedures ensure reliable and predictable behavior.

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Classical or Generalist Movement Henri Fayol “Father of the classical (or generalist) movement, also referred to as Administrative Principles Movement Fayol’s 14 Principles of Management Division of Work Authority Unity of Command Unity of Direction Subordination of individual interest to the general interest

Classical or Generalist Movement Remuneration of personnel Centralization Scalar chain Order Equity Stability of tenure of personnel Initiative Esprit de corps

HUMANISTIC APPROACH Human Relations Movement Focused on the behavior of the individual and his or her quality of life in the organization, as well as on the needs, aspirations, and motivations of this individual and on those of the group and the organization. The major assumption was that if management can make employees happy, maximum performance will be the result.

HUMAN RELATIONS MOVEMENT Chester Barnard First to introduce the issue of social responsibility of management, including fair wages, security, and the creation of an atmosphere conducive to work;

HUMAN RELATIONS MOVEMENT He identified 4 inducements: Material (money, physical security) Personal (distinction, prestige, power) Desirable physical conditions of work Ideal benefactions (pride in one’s work, loyalty to the organization, etc.)

HUMAN RELATIONS MOVEMENT Mary Parker Follet Viewed management as a social process and the organization as a social system in which coordination was the most important principle Recognized the interdependencies between the individual, the work and the environment Emphasized worker participation and the importance of shared goals. Advocated the so-called constructive conflict; she saw conflict within an organization as inevitable and wanted to provide ways to make that conflict work for the organization.

Elton Mayo and the Hawthorne Studies  A phenomenon, arising basically from people being noticed – called “Hawthorne Effect”  The Hawthorne experiment demonstrated that:  Workers are more motivated by social rewards and sanctions than by economic incentives.  Workers’ actions are influenced by the group

In general, the Human Behavior/Relation Movement maintained that if the organization makes employees happy, it will gain their full cooperation and effort and therefore reach optimum efficiency.

SELF-ACTUALIZING MOVEMENT ( Human Resources Perspective) It emphasized designing jobs that would allow workers to satisfy higher-level needs and utilize more of their potentials. Abraham Maslow - “Hierarchy of Needs” The theory is built upon the concept that humans have a hierarchy of needs, starting with the basic physical necessities of food, shelter, ad clothing and ascending five steps to the intangible needs of self-actualization and fulfillment, with the emphasis on self- actualization.

Maslow’s Hierarchy of Needs

Physiological Safety Belonging Esteem Self- actualization Based on Needs Satisfaction Organizational Examples Challenging Job Job Title Friends Retirement Plan Wages General Examples Self-fulfillment Status Friendship Stability Shelter

Douglas McGregor Put forth two influential set of assumptions about workers; he called these sets assumptions Theory X and Theory Y. The first set of assumptions, Theory X, reflects what McGregor saw as the traditional, autocratic, managerial perception of workers.

Douglas McGregor Theory Y presents a much more positive picture of people, but the assumptions that constitute this theory are more challenging to managers. These assumptions imply that human nature is dynamic, not static. Theory Y makes managers responsible for creating an environment that promotes positive development of individual employees.

Douglas McGregor’s Theory X & Theory Y Theory X People are lazy People lack ambition Dislike responsibility People are self-centered People don’t like change People need close supervision Theory Y People are energetic People want to make contributions People do have ambition People will seek responsibility Consider work as natural as rest & play

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Peter Drucker Management by Objectives (MBO) relies on the defining of objectives for each employee and then comparing and directing their performance against the objectives which have been set. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identifying their objectives, time lines for completion, etc. It includes ongoing tracking and feedback in the process to reach objectives.

According to Drucker, managers should avoid “the activity trap”, getting so involved in their day to day activities that they forget their main purpose or objective. One of the concepts of MBO was that instead of just a few top-managers, all managers of a firm should participate in the strategic planning process, in order to improve the implementability of the plan. Another concept of MBO was that managers should implement a range of performance systems, designed to help the organization stay on the right track.

Principles of MBO Cascading of organizational goals and objectives; Specific objectives for each member, Participative decision making, Explicit time period, and Performance evaluation and provide feedback.

Drucker also introduced the SMART Method for checking the validity of the Objectives, which should be smart Specific Measurable Achievable Realistic, and Time-related.

QUANTITATIVE APPROACH (Management Science Perspective) Developed to meet changing and dynamic environment Engaged mathematics, statistics and quantitative techniques to aid in decision making Increased study of management led by Peter Drucker Use of technology and programming for optimizing operations

SYSTEMS APPROACH It integrates knowledge from biological, physical and behavioral science and regards organizations as systems that function as a whole. Ludwig von Bertalanffy – was one of the first people to write about the “system theory of the organism”. He defined a system as “ a set of elements standing in interrelation among themselves and with the environment.”

The Systems approach to management acknowledges the impact of the outside environment on everything that happens within an organization.

The Systems View of Organization

CONTINGENCY APPROACH (Situational Approach) It asserts that: There is no best management technique. There is no best way to manage. No technique or managerial principle is effective all of the time. Should the question be posed as to what works best, the simple response is, “It all depends on the situation”.

CONTINGENCY APPROACH (Situational Approach) It considers the circumstances of each situation and then decides which response has the greatest chance of success. Tells managers that there is no so-called silver bullet – no one-size-fits-all approach. Instead, a manager has to look at the organization, its goals and objectives, the technology it uses, the people who work there, the outside environment, and a number of other factors before deciding how to manage.

TOTAL QUALITY MANAGEMENT W. Edward Deming Known as the “Father of the Quality Movement” Four key elements of quality management: 1. Employee involvement 2. Focus on customer 3. Benchmarking 4. Continuous improvement

THE LEARNING ORGANIZATION (Peter Senge) One in which all employees are constantly learning; where all focus on identifying and solving problems confronting the organization. Characterized by open communication, decentralized decision making, and a flattened organizational structure.

THE LEARNING ORGANIZATION (Peter Senge) Basic Principles: 1. Personal mastery 2. Mental models 3. Shared vision 4. Team learning 5. Systems thinking

TECHNOLOGY-DRIVEN WORKPLACE Most work is performed on computers in today’s workplace Companies use technology to communicate and collaborate