Week 5

Lecture 5: The Historical and Scientific

Perspectives of Management
Textbook: Chapter 2
 RECAP of Week 4 Lesson
Ethics & Corporate Social Responsibility (CSR)

1. What is ethics and ethical dilemma?

2. Identify common kinds of workplace deviance.
3. Factors influencing ethical decision making.
4. Ethical principles & cultural dimension of ethical decision
making
5. Practical steps managers can take to improve ethical
decision making
6. What CSR is & the stakeholder model of CSR.
Why Business Ethics and Corporate Social
Responsibility??

 Inter-connected as it relates to sustainability & the environment -

contributes to the sustainable development, health and welfare of society.
 Public expectations & awareness - organisations which practice ethical
and responsible actions increase their reputation, market share, improve
staff retention and generally, get to feel good about themselves.
 Power of the media: speed & transparency
Ethics & Ethical Dilemma
Factors that influence ethical
decision making

1. Ethical intensity of decision

Degree of concern about an ethical issue

Ethical 2. Moral development of manager &

answers organization culture
Stages of moral development
depend on …
3. Ethical principles used
Use approaches that describe norms
& values that may guide ethical
decision making

4. National Culture
Shared values, beliefs & attitudes
of a particular country
 4. Ethical Principles

Ethical Decision-Making
Principles/Approaches

Principle of
Principle of religious government
Principle of injunctions requirements
personal virtue
: never take action that is : businesses
: openness, honesty & unkind or harms a sense of should operate
truthfulness community within the law
 C. Ethical Principles Used

Ethical Decision-Making
Principles/Approaches

Principle of Utilitarianism:
decisions made on basis of
Principle of Individual Principle of
their outcomes or Rights Distributive Justice
consequences
(deontology:duty or imposing and enforcing
(consequentialism approach):
obligation) rules fairly and
provide greatest respecting and protecting impartially; to protect the
good for society /benefits to the
basic rights of poor, uneducated &
most people
individuals/agreed upon rights unemployed

There is no ideal principle!

Cultural Dimension of Ethical Decision Making
 Practical steps to
ethical decision making

• Select and hire ethical employees

• Establish a code of ethics
• Train employees to make ethical
decisions
• Create an ethical climate
• Protect whistleblowers
Corporate Social Responsibility
Triple bottom line
Organization's social responsibilities in CSR: Types of
Social Responses

Serve a social role; contribute

Discretionary
to community & quality of life

Abide by principles
of right and wrong; avoid harm Ethical
?
Obey laws and
regulations Legal

Be profitable Economic
$
Source: Samson, D. & Daft, R.L. 2012.
Fundamentals of Management, 4th Asia
Pacific Edition, Cengage Learning
Week 5 : Topics for Discussion

1. Explain the origins of management

2. Explain the principles of scientific management
under Frederic Taylor
3. Explain principles of administrative management
under Henri Fayol
4. Explain principles of bureaucratic management
under Max Weber
5. Explain the humanistic approach (from human
relations to human resources management) to
management focusing on the Hawthorne Experiments
& briefly some motivational theories
6. Discuss what is meant by operations, information,
systems theory of management.
 Evolution of
management thinking
• Concept, theory, principle
• The idea of management is not new
• Without management thinking and
plan, could they build;
• The Egyptian pyramids ( 2551 BC )
• The Great Wall of China ( since 5th
century BC )
• Taj Mahal of India ( 1600s )
• Every form of management theory is
applied to ensure progress of a society
 How a Field of Theory Evolves
The emergence of a new field of theory tends to be characterised
by the following stages:
Stage 1:
Observation of a new phenomenon and the reporting of
exploratory case studies.
Stage 2:
Definitions which capture operational characteristics and the
context.
Stage 3:
Conceptualisation of useful constructs and their dimensions
to provide a deeper, more nuanced understanding of the
possible relationships that underpin the phenomenon.
Stage 4:
Testing of theoretical relationships
Stage 5:
Consistent body of knowledge within a field of theory.
 Origin of the word ‘Management’

 19th century - British economist John Stuart Mill (1806-

1873) referred to "managers" and "management" to
describe the persons and the process of running joint
stock companies;
 Since the 1880s - canonized by Frederick W. Taylor in The
Principles of Scientific Management in 1911.
 Present meaning - an American invention
 Linguistic origin - Latin manus, hand, via the Italian
maneggiare, which is the training of horses in the
manege.
 Also been associated with the French menage, as the art
of running a household (Mant, 1977:20).
 The theatre of present-day management contains
elements of both manege and menage and different
managers and cultures may put different accents.
 Why we need managers today

 The Industrial Revolution (1750-1900)

changed the structure of work processes.
 The workforce change from small (family)
units to factories which employed many
workers.
 Managers were needed to supervise and
direct these workers.
 E.g., by 1912, Ford employed 12000
workers in one factory.
Types of Management Theories

A. Classical management theory/early

management theory/Historical
Works best in a stable environment
Behavioural or humanistic theory
Works best in any type of environment
C. Modern management theory
Works best in a changing/dynamic environment
Early Management Theories

• Industrial revolution in the 1800s

• Mass production required management
processes
• Efficiency emphasized to maximize
productivity
• To reduce cost
• To increase profitability
1. Classical Management Perspective

Acronym: SAB
 1.1 Scientific Management

Scientific management
 Studies and tests methods to identify
the best, most efficient ways

Before scientific management

‘Seat-of-the pants’ organizational decision-making :
Decisions made haphazardly
 No standardisation of procedures
 No follow-up on improvements
 1.1 Scientific Management

 Forerunners: Frederick Taylor & Frank &

Lillian Gilbreth
 Scientific approach: based on the belief
that productivity is maximised and
efficiency achieved when organisations are
rationalized with precise sets of instructions
based on time-and-motion studies
• This approach changed the purpose and scope
of factory workers
• Worker’s reward is linked to productivity
• This approach also changed the role of
managers to train workers into skilled
employees
 • PAUSE
View video and answer a few questions
https://isssp.org/time-and-motion-study-
pioneers-frank-and-lillian-gilbreth/
3.24 minutes
 Taylor’s Principles &
Contribution to Management

 Father of Scientific Management

 “The Principles of Scientific Management’’,
published in 1911
 Standard rules, processes, working conditions
for every job – ‘one best way’
Selection of workers
Training of workers
Incentives & support for workers
Division of labour
 Divide responsibility between management Frederick Winslow
and workmen to ensure there is an almost Taylor (1856 – 1915)
American mechanical
equal division of the work and the engineer first
responsibility. management consultant
 Gilbreths’ Contribution
to Management

Pioneers in Motion studies

Finding the one best way to

do a work task efficiently by
reducing the task to its basic
physical motions.

Frank Gilbreth (1868-1924)

Lillian Gilbreth (1878-1972)
American Industrial
Engineers, Management
Consultants
 Motion studies:
Frank and Lillian Gilbreth

Time study
Timing how long it takes good workers
to complete each part of their jobs.

Motion study
Breaking each task into its separate
motions and then eliminating those
that are unnecessary or repetitive
 Frank Gilbreth started work as a bricklayer & found that there were
many improvements to be made in the process of laying bricks.
 Through a series of changes, productivity improved 300%.
 The Gilbreths pioneered motion studies as a management tool.
McDonalds: Set rules of physical motions based on standardized work processes

Scientific management in application

 1.2 Bureaucratic Management

Bureaucracy
 The exercise of control on the
basis of knowledge, expertise
or experience (rational-legal
authority)
 All about achieving efficiency
 Focus on a hierarchical
structure with clear line of
authority, strict set of
guidelines and SOPs (Standard Max Weber (1864-1920)
Operating Procedures( German sociologist, historian,
jurist, and political economist
 Aims of Bureaucracy

1. Qualification-based hiring

2. Merit-based promotion

3. Chain of command

4. Division of labour

5. Impartial application of rules and procedures

6. Recorded in writing

7. Managers separate from owners

The aim of bureaucracy is to achieve an organization's goals in the

most efficient way possible.
 Characteristics of
Weber’s bureaucracy

 Clear definitions of authority and responsibility

 Positions are organised hierarchically.
 Clear division of labour: jobs are well defined & each
position reports to a higher level
 Selection and promotion based on technical
qualifications
 Administrative acts and decisions are recorded in
writing (formal rules & procedures)
 Management is separate from ownership.
 Rules and procedures are uniformly applied to all
employees (impersonality)
Disadvantage of bureaucracy

• Excessive paperwork or ‘red

tape’
• Slowness in handling problems
• Rigidity in the face of shifting
needs
• Resistance to change
• Employee apathy
• PAUSE
• Watch this video clip: Henry Fayol’s Principles of
Management
• https://www.youtube.com/watch?v=90qpziPNR
nY
 1.3 Fayol’s Administrative Principles

2 fold contribution to management thought:

• 5 key functions of management &
• 14 principles to guide successful manager

Henri Fayol 1841 –1925)

French mining engineer

1949: Wrote “General & Industrial Management”

Father of Administrative Management Theory
14 Administrative Principles of Henri Fayol

1. Division of work 8. Centralization

2. Authority and 9. Scalar chain

responsibility

3. Discipline 10. Order

4. Unity of command 11. Equity

12. Stability of tenure

5. Unity of direction of personnel
6. Subordination of 13. Initiative
individual interests

7. Remuneration 14. Esprit de corps

 Fayol’s Five Key Functions
of Management

• to forecast and plan –examine the future and draw up plans

of action
• to organise- build up the structure, material and human of
the undertaking
• to command- maintain activity among the personnel
• to co-ordinate- bind together, unify and harmonise activity
and effort (command & control are classified as leading in
some textbooks)
• to control- see that everything occurs in conformity with
policy and practise

Note: The above functions will be covered in detail from

lectures 6-9
 Fayol’s 14 principles for
successful manager
1. Division of labour
: divide work so that each worker completes smaller tasks or job elements
2. Authority & responsibility
: the right to give orders and the power to exact obedience
3. Discipline
: clearly defined rules so that there is no slacking, bending rules
4. Unity of command
: each employee has one and only one boss to avoid confusion & conflict
5. Unity of direction
: one person & one plan should be used to decide on activities used to
accomplished org goals
6. Subordination of individual interests:
: Employees should put org’s interests & goals before their own
7. Remuneration
: employees receive fair payment for services, not what the company can get
away with labour
 Fayol’s 14 principles for
successful manager
8. Centralisation
: consolidation of management functions. Decisions made at the top
9. Scalar chain: formal chain of command running from top to bottom of the
organisation like the military
10. Order
: all materials and personnel have a prescribed place and they must remain
there
11. Equity
: kind, fair & just treatment for all ; equality of treatment but not
necessarily identical treatment
12. Personnel tenure: limited turnover of personnel. Lifetime employment for
good workers
13. Initiative: thinking out a plan and do what it takes to make it happen
14. Esprit de corps: a strong sense of morale & unity that encourages
coordination of efforts harmony, cohesion among person
• While the principles of classical
management theory were helpful in placing
management objectives in the perspective
of an organization, they failed to fulfill one
of their earlier goals i.e. providing tools for
dealing with organizational personnel
challenges
 Behavioural Approaches
Human Relations Management

In contrast, the human relations approach to

management focuses on the psychological and
social aspects of work. People are valuable
organizational resources whose needs are
important.
Efficiency alone is not enough to produce
organizational success. Success also depends
on treating workers well
Hawthorne Studies:

Elton Mayo
1880 –1950
Australian psychologist,
industrial researcher, and
organizational theorist
 Hawthorne Studies

Workers’ feelings and attitudes

affected their work.
Financial incentives weren’t the most
important motivator for workers.
Group norms and behaviour play a
critical role in behaviour at work.
 What were the Hawthorne Studies and
what was their contribution to management?

• Basically the Hawthorne Studies is a series of studies between 1924

– 1832 that provided new insights into individual and group
behaviour.
• It was held at the Western Electric Company which is the
predecessor of today's Lucent Technologies ( a big high-tech
company in the states).
• Western Electric Company commissioned this study on their plant
workers in Hawthorne, just outside of Chicago.
• The idea is to see the effects of a variety of factors on productivity.
• The experiments manipulated various conditions (pay, light levels,
rest breaks etc.), but each change resulted on average productivity
rising, including eventually a return to the original conditions.
 Hawthorne Studies
Reasons for productivity increase:
 Group Atmosphere
 Participative Supervision

Regardless of the conditions, whether there were more or fewer rest

periods, longer or shorter workdays, … the women worked harder and
more efficiently. Although this effect was probably due to several
reasons, the most important was that the women felt they were
something special …They were happy, a lot of attention was paid to
them, and they complied with what they thought the experimenter (their
boss) wanted (Freedman, Sears, & Carlsmith, 1981, p, 338).

Conclusion: Work is a group activity and need for recognition,

security and sense of belonging are more important in
determining productivity than physical conditions of work.
Humanistic Perspective: from Human Relations
to Human Resources Perspective
Human relations movement
• Emphasizes satisfaction of employees’ basic needs as
key to increased worker productivity
• Focuses on the psychological and social aspects of
work

Human resources perspective

• Suggests jobs should be designed to meet higher
level needs by allowing workers to use their full
potential
 Humanistic Perspective: from Human
Relations to Human Resources Perspective
 Needs Classification of
Different Theories
Chapter 12 of textbook: p p.256-258

Needs are the physical or psychological requirements that must

be met to ensure employee survival and well-being.

• Maslow’s Hierarchy of Needs

• Alderfers’ ERG (Existence, relatedness, Growth)
• McClelland’s Learned Needs
 Needs Classification
Maslow’s Alderfer’s McCelland’s
Hierarchy of ERG Learned
needs Needs
Higher order Self- Growth Power
needs actualisation Relatedness Achievement
Esteem
Belongingness

Lower order Safety & Physiological Affiliation

needs Security
Physiological
Maslow’s Hierarchy of Needs
 Alderfer ERG Theory
Vis-a-Vis Maslow’s

Maslow’s Hierarchy of Needs ERG Theory

McClelland’s Needs Theory
 McClelland’s Needs Theory

 Need for achievement: is the urge to excel, to

accomplish in relation to a set of standards, to struggle
to achieve success
 Need for power: is the desire to influence other
individual’s behavior as per your wish. In other words,
it is the desire to have control over others and to be
influential
 Need for affiliation: is a need for open and sociable
interpersonal relationships. In other words, it is a
desire for relationship based on co-operation and
mutual understanding.
• People with different needs are motivated differently.
 Other Influential Theories

• Operations management: managing the daily production

of goods & services; ideas and tools from research into
weaponry by US government in WWII
• Information management: management needs timely
and accurate information; information technologies give
speed to timely information e.gs cash register and the
typewriter
• Systems management/systems view/system theory (see
next slide) : systems view of organisation ( a set of
interrelated elements or parts that functions as a whole);
idea of organisations existing within a complex
environment
 Recent Historical Trends:
Systems Theory
 System
Set of interrelated parts that function as a whole
 Subsystem
A smaller component of a larger system
 Closed system
Can sustain itself without interacting with its environment
 Open system
A system that can sustain itself only by interacting with its
environment, on which it depends for its survival.
Entropy – organization will die without fresh inputs from the
environment
Synergy – whole is greater than the sum of its parts (1 +1 =3)
 Nearly all organisations are viewed as open systems that
interact with their environments and depend on them for
survival.
  A system can be looked
at as having
Inputs (e.g.,
resources such as raw
materials, money,
technologies, people -
Processes (e.g.,
planning, organizing,
motivating, and controlling),
outputs (products or
services)
Outcomes (e.g., enhanced
quality of life or productivity
for customers/clients,
productivity).
These aspects interact with
the environment out there.
Systems share feedback
among each of these
aspects of the system

Samson, D. & Daft, R.L. 2012, Fundamentals of Management, 4th Asia-Pacific Edition, Cengage Learning
 Application of Systems Theory

• Depicts the larger organization as an open system

that interacts with its environment in the
continual process of transforming inputs from
suppliers into outputs for customers.
• Within the organisation, any number of critical
subsystems can be described eg operations and
service management systems are a central point.
They facilitate the interactions between other
subsystems such as purchasing, accounting, sales
and information .
 Recent Developments in
Management Theory
• Situational or Contingency theory, Chaos theory, and
Team Building theory
• The situational or contingency theory asserts that
when managers make a decision, they must take into
account all aspects of the current situation and act on
those aspects that are key to the situation at hand.
• It is the approach that emphasizes on “it depends”. For
example, if one is leading troops in Iraq, an autocratic
style is probably best. If one is leading a hospital or
University, a more participative and facilitative
leadership style is probably best.
 Chaos Theory
 Made popular by Tom Peters (1942)
 As chaotic and random as global events seem today, they are equally
chaotic in organizations.
 Managers have acted on the basis that organizational events can always be
controlled.
 The chaos theory has emerged to recognize that events are rarely
controlled.
 Chaos theorists suggest that systems naturally go to more complexity, and
as they do so, they become more volatile and must, therefore, expend
more energy to maintain that complexity.
• As they expend more energy, they seek more structure to maintain
stability. This trend continues until the system splits, combines with
another complex system or falls apart entirely.
• It will need an effective manager for the latter worst scenario not to
happen.
 Team Building Theory

• Emphasizes quality circles, best

practices, and continuous
improvement.
• Hinges mainly on reliance on
teamwork.
• Emphasizes flattening of
management pyramid, and reducing
the levels of hierarchy.
• All about consensus management –
i.e., involving more people at all
levels in decision-making
What are the Continuing Management
Themes of the 21st century?
Quality and performance excellence
• Total Quality Management (TQM)
• Spread of Japanese management techniques
emphasizing organisational culture, teamwork and
consensus decision making from 1980s
Learning Organisations
• Organisational Culture that emphasizes information,
teamwork, empowerment, participation and
leadership
Sustainable Development
• Stakeholder relationships
 Summary: Evolution of
Management Theory

Hard / Scientific Management

Management Science
Science/
Rational

1900 1920 1950 1980 TIME

Soft /
People/
Normative Industrial Humanistic Organisational
Betterment Perpectives Culture
 The Practicality of Good Theory

•Lewin, K.(1945), in Sociometry, 8.

“ … nothing is so practical as a good theory …”

–Enlightens the profession (the academy) and the

applied field (the practising manager) … it builds good
practice.

•Characteristics of good theory

–Explicit treatment of who? what? where? when? why?
and how? With emphasis on why !!

•See Academy of Management Review, 1989, 14(4).

 Attempt the mcqs in Quiz 5 to test your
knowledge and application of this week’s lecture