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The Evolution of

Management Theory
IMT580
Fall 2013
Instructor: Mala Sarat Chandra
mchand1@uw.edu
TA:
@uw.edu

Learning Objectives
Explain what a management theory is.
Understand the evolution of
Management Theories and their major
contributions.

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Mala Sarat Chandra, University of


Washington

Session 1

EVOLUTION OF
MANAGEMENT THEORY
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Mala Sarat Chandra, University of


Washington

Evolution of Management Theory

1920-1950

1880 - 1930

Classical
Manageme
nt School

NeoClassical
Managemen
t School
Human
Relations
Behavioral

Modern
Manageme
nt School
Systems
Contingency
Organizational
Humanism
Management
Science

Scientific
Administrative
Bureaucratic
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Mala Sarat Chandra, University of


Washington

1900 - 1930

THE CLASSICAL SCHOOL


OF MANAGEMENT
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Washington

Core Ideas
1. Application of science to the practice of
management.
2. Development of basic management functions.
3. Articulation and application of specific
principles of management.
Evolved in response to the shift from handicraft to industrial
production.
Emphasis is on economic rationality of people and
organizations; motivated by economic incentives, they
make choices that yield the greatest monetary benefits.

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Mala Sarat Chandra, University of


Washington

Max Webber
1905
The Theory of Social and Economic Organization

The Bureaucratic School of Management


A major contribution is his
bureaucracy theory, a formalized
and idealized view of organizations,
comprising 6 major principles.
1.
2.
3.
4.
5.
6.
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A formal hierarchical structure.


Management by rules.
Organization by task competency.
Impersonal relationships.
A focused mission.
Employment based on technical
qualifications.
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Washington

Frederick Taylor
1911
Principles of Scientific Management

The Scientific School of Management


Proposed an objective and
systematic method to identify
the one best way to do a job
using scientific selection and
training methods; co-operation
and clear division of
responsibility between managers
and workers; pay for
performance.
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Mala Sarat Chandra, University of


Washington

Frank & Lillian Gilbreth


1912 - 1924
Time and Motion Studies

Disciples of Frederick Taylor,


their
time
and
motion
studies
helped lay the foundations for
Scientific Management the
best possible way for a worker
to complete a job.
The expected results are employee
satisfaction, productivity and efficiency.
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Mala Sarat Chandra, University of


Washington

Henry Gantt
1910 - 1915
Project Scheduling The Gantt Chart

A protg and associate of


Frederick Taylor, he designed a
project scheduling model for
increasing the efficiency of project
execution and completion.

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Mala Sarat Chandra, University of


Washington

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Henri Fayol
1916
Administration Industrielle et Generale

The Administrative School of Management


Managers need specific roles in
order to manage work and workers.
He enumerated 6 functions / roles of
management.
1. Forecasting
4. Commanding
2. Planning
5. Coordinating
3. Organizing
6. Controlling
These roles evolved into 14 principles of
management.
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Division of work, Authority, Discipline, Unity of


Command, Unity of Direction, Subordination of
Mala Sarat Chandra,
University of
Interests,
Remuneration,
Centralization, Scalar Chain,
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Equity, Order, Stability of Tenure of Personnel, Initiative,

Ford and Frederick Taylors


Scientific Management

http://www.youtube.com/watch?v=8PdmNbqtDdI

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Summary: The Classical School of


Management

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Scientific

Bureaucrat
ic

Administra
tive

Concern for
precise work
methods

Impersonal
view of
organizations

Development
of managerial
principles

Best way for


jobs to be
done

Formal
structure,
legitimate
authority and
competence of
management

Best way to
organize all
jobs in a
business

Mala Sarat Chandra, University of


Washington

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Criticisms of The Classical School of


Management
No one is entirely driven by economic motivations.
Peoples choices and behavior are dictated by
other factors such as social needs, security and
self-esteem.
There is no such thing as the best way to do a
job.
Extreme division of labor tends to produce
monotony and reduce overall skill levels.
People are managed like machines. Introduction of
newer machines led to job elimination.
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1920 - 1950

THE NEO-CLASSICAL
SCHOOL OF MANAGEMENT
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Core Concepts
Grew in reaction against the Scientific Theory of
Management which emphasized standardization of
jobs, processes and technologies to maximize
economic return.
Focus shifted to the human side of organizations.
1. The best way to motivate, structure and support
employees.
2. The need for workers to find intrinsic value in
their jobs.
3. The positive impact of social relationships on
worker productivity.
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Washington

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Mary Parker Follet


1925
The Psychological Foundations of Business Administration

Pioneered the notion of participative


leadership. Suggests that
organizations are communities
involving networks of groups. Workers
and managers equally share power
and responsibility for decision making
and therefore, their outcomes. She
introduces many contemporary
concepts such as leadership,
motivation and empowerment.
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The Hawthorne Studies

http://www.youtube.com/watch?v=W7RHjwmVGhs
2:49
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The Hawthorne Effect


Productivity increases when workers believe
that they are being observed closely.
Employees perform better when managers
and co-workers make them feel valued.
Financial rewards are not necessarily
conducive to increasing worker productivity.
Workers care about self-fulfillment,
autonomy, empowerment, social status and
personal relationships with co-workers.
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Washington

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Human Relations Theory of


Management
Elton Mayo
1933

The Human
Poblems of an
Industrial
Civilization

Fritz Roethlisberger
1939

Management and the


Worker

People are social beings, motivated by social


needs.
A sense of identity is derived from inter-personal
relationships.
Workers are more receptive to social forces of peer
groups than monetary incentives and
management controls.
Workers respond positively to attention from
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management, co-workers
and customers.
Washington

Chester Barnard
1938
The Functions of the Executive

Proposes the acceptance theory of


authority, that organizational goals
will be achieved and managerial
authority will be accepted if workers
believe that their individual needs
are being met.

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Washington

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Behavioral Theory of
Management
The fulfillment of emotional needs of workers is
important in achieving economic goals.
Employee satisfaction and working conditions are
important in achieving worker productivity.
Workers are intrinsically motivated to work when
they feel a sense of belonging and participate in
decision making.
Workers desire diverse and challenging work.

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Mala Sarat Chandra, University of


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Abraham Maslow
1954
Motivation and Personality
Autonomy, Empowerment
Recognition and Rewards
Collaboration, teamwork, work-life balance
Personal and financial security
Working Conditions and
Work hours

Sel
f
Act
ual
iza
tio
n
Esteem
Social
Safety

Physiological

Hierarchy of Needs Theory


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Douglas McGregor
1960
Human side of Enterprise

Theory X Managers
Workers must be coerced and controlled to work towards
organizational goals.
Workers are inherently lazy, lack ambition and prefer to be
directed rather than take responsibilities.
Workers are self-centered and only care about themselves,
not the organization.
Workers dislike change and will resist it at all cost.

Theory Y Managers
Workers encouraged to develop their full potential will work
towards achieving organizational goals.
With appropriate incentives and support, workers will seek out
and fulfill responsibilities on their own.
Workers will apply their ingenuity, creativity and hard work to
meet organizational goals.

Caution: Self-Fulfilling Prophecy


Workers behave as expected by managers due to the
managers own behavior and actions.
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Notable Contributors to the


Behavioral School of Management (1)

Chris
Argyris
1957
Personality and
Organization
Fundamental
conflicts between
Individual and
Organizational
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needs.

Frederick
Herzberg
1959
The Motivation
to Work.
Two-factor
Theory.
Mala Sarat Chandra, University of
Washington

Kurt Lewin
1944 1951
Model of
planned
change:
unfreeze,
change,
refreeze

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Notable Contributors to the


Behavioral School of Management (2)

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Rensis
Likert

George
Homans

Warren
Bennis

1967
The Human
Organization
Linking-pin model
to bridge human
relations and
organizational
structure

1950

1961

The Human
Group
Extrapolates from
a small group to
understanding
Mala the
Saratsocial
Chandra,
University of
system.

The Planning of
Change
Foundation for
planned
organizational
change and
development.

Washington

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Summary: Neo-Classical School of


Management
Behavioral School is a logical extension of the
Human Resource School.
They are largely concerned with motivation of
workers.
Workers are diverse in their needs and want
challenging work, participative decisionmaking, self-direction and control.
Managers must help workers deal with
situational constraints and social aspects of
organizational and environmental changes.
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Washington

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THE MODERN SCHOOL OF


MANAGEMENT
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Core Concepts
Dealing with complexity is the core of modern
management theory.
Organizations, Workers, Environment and the interactions between
them.

It is a synthesis of several theories.


Behavioral science, mathematics, statistics, operations / quantitative
research and computing technologies.

Management is an exercise in logic applied to


situations.
Situations can be measured.
Computers have an increasing role to play.

Application of management knowledge is extended


to non-business areas.
Education, government, health care and others.
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The Quantitative School of


Management
Combines classical management theory and
behavioral science through the use of statistical
models and simulations.
A major focus is on the process with which
decisions are made, to ensure informed results.
The quantitative school comprises
Scientific Management
Managers use of math and statistics for problem solving.

Operations Management
Managing the process of combining materials, workers and capital to
produce goods and services.

Management Information Systems


Transforming historic, current and projected data from internal and external
sources into useful, usable management information.

Systems Management Theory

Mala Sarat
Chandra,
University
of
Transforming
inputs into outputs
and
receiving
feedback.
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Washington

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The Systems School of Management


Ludwig von Bertalanffy
1937

Allgemeine Systemlehre (General


Systems Theory)
Feedback from the environment
used to change & grow

Throughput
Input
Resources from
the environment

The process of
converting or
transforming
resources within
the system into a
product or
service

Output
The product or
service exported
to the
environment

The Environment in which the system operates.


Environmental elements have the potential to affect all or part of the
system
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University of Washington

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Types of Systems
Closed
System

Open
System

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Systems and wholeness


Guidelines for System Analysis
1. The focus of analysis is the whole, parts
receive secondary attention.
2. Integration (interrelatedness of the many
parts within the whole) is the key in
wholeness analysis.
3. Possible modifications in each part should
be weighed in relation to possible effects
on every other part.
4. Each part has a role to perform so the
whole can accomplish its purpose.
5. The nature of the part and its function is
determined by its position in the whole.
6. All analysis starts with the existence of the
whole. Parts and their relationships should
Source: Modern Management by Certo & Certo
evolve
to best suit the purpose of the
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University
whole.of Washington

The Management System

Customers

Competitors

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It is an open system
comprising parts
such as
organizational
Input
resources (capital,
Government
raw materials,
Process
workers), the
production process,
Suppliers
Output
information systems,
finished goods, that
Environment
are needed to
achieve the
Mala Sarat Chandra
organizations goals.33
University of Washington

The Contingency School of


Management (1)
Joan Woodward
1965
Industrial
Organziation:
Theory and
Practice
&

P. Lawrence

J.W. Lorsch
1967

Argued that technology and


production systems were
critical aspects of
organizational design;
advanced a contingency
approach to organizing.
Suggested that successful
organizations match their
structure to the nature of the
environment

Organization &
Environment: Managing
Differentiation and
Integration
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The Contingency School of


Management (2)

Daniel Katz

Robert Kahn

Present a unified, open systems


approach extending organizational
theory beyond the boundaries of a
single organization.

1966
The Psychology of Organizations

Fred Edward Fiedler


1967
A Theory of
Leadership
Effectiveness
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Argued that leadership


effectiveness is contingent upon
two interacting factors, Leadership
style and situational
favourableness.

Mala Sarat Chandra


University of Washington

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Definition of an
Organization
An Organization
is a social system
comprising
subsystems of
resource
variables,
interrelated by
various
management
policies, practices
and techniques
which interact
with variables in
the environment
to achieve a set
of goals or
objectives.

Environmental

PERFORMAN
CE CRITERIA

SITUATIONAL
SYSTEM
PERFORMANCE

Resource

ORGANIZATIONAL

Management

Variables and relationships in a


Contingency Model of the
Organization

Source: A General Contingency Theory of Management, Luthans and Stewart (1977)

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Mala Sarat Chandra


University of Washington

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Core Concepts
What managers do depends on or is
contingent on the situation at hand; it
emphasizes an if-then relationship.
If a particular situational variable exists, then
managers are likely to take a particular action.
Successful managers must consider the
realities of the specific organizational
circumstances they face when applying
management concepts, principles, tools and
techniques.

Serto & Serto (2012) Modern Management

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Chandra

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Challenges with the Contingency


Approach
1. Perceiving organizational situations
as they actually exist.
2. Choosing the management tactics
best suited to those situations.
3. Competently implementing those
tasks.

Source: Modern Management by Certo & Certo

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Mala Sarat Chandra


University of Washington

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Summary
Three distinct Schools of Management
Classical Process
Neo-ClassicalPeople
Modern
Integrative - People,
Process,
Environment

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University of Washington

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Key Concepts: Definition of


Management
Management is the process of
accomplishing an organizations goals
by working with and through people,
utilizing all the resources available to
it.
Role of Management

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Key Concepts: The Role of


Management
Planning
Doing the right thing at the right time to accomplish organizational
goals.
Choose the tasks that need to be performed and decide when and
how to perform those tasks.

Organizing
Creating a mechanism to put plans into action.
Assign tasks to individuals and teams to accomplish the tasks
required to accomplish organizational goals.

Influencing
Leading, motivating and directing an organizations members toward
accomplishing organizational goals.
Increase productivity of members in the accomplishment of
organizational goals and to be responsive to changing needs of the
organization.

Control
Establishing and tracking organizational performance standards.
Gather and analyze appropriate
performance
IMT580 - Winter
2013 - Mala Saratmetrics and compare
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Chandra
against established standards. Make
organizational changes needed

Common Mistakes of
Management
Planning
Not establishing goals and objectives for all important organizational areas.
Making plans that are too risky.
Not exploring enough viable alternatives for reaching goals and objectives.

Organizing
Not establishing the appropriate organization structure span of control, interdepartmental coordination, geographic balance.

Influencing
Not establishing lines of communications, communicating infrequently, managing
rather than leading.

Controlling
Not tracking progress against goals, not establishing performance standards,
tracking performance metrics, analyzing trends or using insights to drive
improvements.

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Management and Organizational


Resources

Organizational
Resources
People
Money
Raw Materials
Capital Resources

Inputs
Production
Process

Outputs Finished
Products

IMT580 - Winter 2013 - Mala Sarat


Chandra

Goods
Services

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Managerial Effectiveness and


Efficiency

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Management Skills
Changerelated
activities
People-related
activities
Task-related
activities

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The Management
Framework
Planning
Vision and
Mission
Strategy
Goals and
Objectives

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Organizing

Leading

Controlling

Organization
Design
Culture
Social
Networks

Leadership
Decision
Making
Communicati
ons
Groups and
Teams
Motivation

Systems and
Processes
Human
Resources

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University of Washington

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The Future of Management

http://www.youtube.com/watch?v=K3-_IY66tpI

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