Management Functions & Historical

Perspective
HISTORICAL PERSPECTIVES
 • Efficiency is Everything
• How to Get Organized
HISTORICAL • What about People?
PERSPECTIVES
• Can Bureaucracies Be Flexible?
• It All Depends: Key Contingencies
EFFICIENCY IS EVERY THING.
 FREDERICK WINSLOW TAYLOR

Workers “could be retooled like machines, their physical and mental gears
recalibrated for better productivity.”
 FREDERICK WINSLOW TAYLOR

Managers develop precise, standard procedures for doing each job, select
workers with appropriate abilities, train workers in the standard procedures,
carefully plan work, and provide wage incentives to increase output.
 FREDERICK WINSLOW TAYLOR

The role of management is to maintain stability and efficiency, with top

managers doing the thinking and workers doing what they are told
HOW TO GET ORGANIZED.
 HENRI FAYOL

Fourteen principles of management, such as “each subordinate receives

orders from only one superior” (unity of command) and “similar activities in
an organization should be grouped together under one manager” (unity of
direction).
 HENRI FAYOL

These principles formed the foundation for modern management practice

and organization design. contributed to the development of bureaucratic
organizations, where organizations are designed and managed on an
impersonal, rational basis including defined authority and responsibility,
formal recordkeeping, and uniform application of standard rules
 HENRI FAYOL

Bureaucratic characteristics worked extremely well for the needs of the

Industrial Age. One problem with the classical perspective, however, is that it
failed to consider the social context and human needs.
HAW THORNE S TUDIES
 HAW THORNE S TUDIES

Positive treatment of employees improved their motivation and productivity

Encouraging treatment of workers, leadership, motivation, and human

resource management.
 HAW THORNE S TUDIES

Tthe hierarchical system and bureaucratic approaches that developed during

the Industrial Revolution remained the primary approach to organization
design and functioning well into the 1970s and early 1980s. However, during
the 1980s, it began to lead to problems. Increased competition, especially on
a global scale, changed the playing field.
CAN BUREAUCRACIES BE FLEXIBLE?
The 1980s produced new corporate cultures that valued lean staff, flexibility
and learning, rapid response to the customer, engaged employees, and quality
product.

Organizations began experimenting with teams, flattened hierarchies, and

participative management approaches.
Recent influences on the shifting of organization design include the Internet
and other advances in communications and information technology;
globalization and the increasing interconnection of organizations; the rising
educational level of employees and their growing quality-of-life expectations;
and the growth of knowledge.
CONTINGENCY
IT DE?ENDS
Contingency means that one thing depends on other things, and for
organizations to be effective, there must be a “goodness of fit” between their
structure and the conditions in their external environment.

There is no “one best way.” Contingency theory means it depends.

 PLANNING ORGANIZING

THE
M A N AG E M E N T
FUNCTIONS

LEADING CONTROLLING
 PLANNING

1 2 3
Determine the Develop a Design tactical and
firm’s goals. comprehensive operational plans
strategy for for implementing
achieving those the strategy
goals.
 ORGANIZING
Organization charts help everyone understand roles
and reporting relationships
 It is not only about giving orders and
demanding results. When leading, a
LEADING
manager works to guide and motivate
employees to meet the firm’s objectives
 CONTROLLING

The process of monitoring a firm’s performance to make

sure that it is meeting its goals. All CEOs must pay close
attention to costs and performance
Controlling Organization
Performance
Control
Process
 Performance and
Effectiveness Outcomes

Efficiency – amount of resources used to achieve the organization’s

goals

Effectiveness – the degree to which an organization achieves its goals

Stakeholder Approach – balancing the needs of groups in and outside

of the organization that has a stake in the organization’s performance
 Refers to how well the
product does what it is
Performance supposed to do
For loyal buyers of Godiva premium
chocolates, performance includes such
sensory delights as aroma, flavor, color, and
texture. “Truly fine chocolates,” observes
master chocolatier Thierry Muret, “are
always fresh, contain high-quality ingredients
like cocoa beans and butter...and feature
unusual textures and natural flavors.
 Sameness of product quality
from unit to unit
Consistency
It achieved this status by maintaining the same

features at all of Marriott’s more than 967

Courtyard hotels in 38 countries. Designed for

business travelers, most guest rooms include a

Courtyard Suite with high-speed Internet

access, meeting space, and access to an exercise

room, restaurant and lounge, swimming pool,

and 24-hour access to food.

Traditional approaches to measuring effectiveness
Balanced
Scorecard
3 Organizational control strategies
 Clan Control

u In a tough environment of exorbitant fuel costs and declining business, Southwest was one of the few
airlines that didn’t ask for wage and benefit concessions from employees. At Southwest, people are
viewed as the airline’s “greatest competitive weapon,” says CEO Gary Kelly.

u Employees have sometimes voluntarily given up vacation pay or contributed in other ways to help
the airline pay for rising costs.

u Loyalty, commitment, and peer pressure are strong components of control at Southwest Airlines,
where a “we’re all family” culture spurs employees to give their best and make sure others do too.

u Flight attendants who are traveling off-duty pitch in to help clean planes. Pilots help ramp agents
load bags to keep flights on time.
Clan Control

u In 2007, Southwest was tops among the ten biggest carriers in on-time arrivals, had the
fewest customer complaints, and posted the biggest profits.

u However, as the company grows larger and faces new competitive pressures, the
culture is showing signs of strain.

u Revenues have slowed, costs have mounted, new low-cost carriers are snatching
business, and larger rivals have grown leaner and more competitive.
Clan Control

u Despite these tensions, clan control still works at Southwest. Leaders are trying to reinforce
the family-like culture to ensure that heavy bureaucratic controls are not needed.

u Today’s companies that are trying to become learning organizations often use clan
control or self-control rather than relying on rules and regulations
Clan Control

u Clan control may also be used in some departments, such as strategic planning, where
uncertainty is high and performance is difficult to measure. Managers of departments
that rely on these informal control mechanisms must not assume that the absence of
written, bureaucratic control means no control is present.

u Clan control is invisible yet very powerful. One study found that the actions of
employees were controlled even more powerfully and completely with clan control than
with a bureaucratic hierarchy.