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CH 14-16
CH 14-16
Thought
Management 336
Mike Bejtlich
Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren
Chapter Fourteen
Chester Barnard
Mary Parker Follett 1868-1933
The Political Philosopher
Follett was
chronologically closer to
the scientific
management
movement, but
intellectually a
forerunner of
understanding the
group processes
Chester I. Barnard
Barnard
and Cooperative Systems
Formal organizations as the kind of cooperation that is
“conscious, deliberate, and purposeful.”
Formal organizations helped:
Maintain an internal equilibrium.
Examine external forces to see if adjustments must be
made. An “open systems” viewpoint.
Analyze the functions of executives.
Organizations needed to be cooperative systems
because people had choices and they could choose to
contribute or not to contribute.
The executive functions could modify actions and
motives through influence and control.
Barnard
and Cooperative Systems
Effective-Efficient: individual and organizational
goals might differ and Barnard expressed this as:
Effective – meet the goals of the organization.
Efficient – meet individual motives and only the
individual could determine whether or not this was
occurring.
The only measure for efficiency according to
Barnard was the organization’s capacity to survive.
That is, to provide adequate inducements to
satisfy individual motives to secure their
cooperation.
Barnard
and Formal Organizations
Barnard defined a formal
organization as “a system
of consciously coordinated
activities or forces of two
more more persons.”
The late Lyndall Urwick felt
this definition was too
broad, and quipped:
“under Barnard’s definition,
a boy kissing a girl is also a
formal organization.”
Chester I. Barnard
Elements of a
Formal Organization
Willingness to cooperate, and this was to be
facilitated by the offerings of objective and
subjective incentives. This notion meant:
“self-abnegation”
“surrender of control of personal conduct”
“depersonalization of personal actions”
Purpose or objectives of the organization.
Although individual and organizational motives
were different, individuals could achieve their
motives by working toward organizational
purposes.
Elements of a
Formal Organization
Communication – Barnard developed three
principles:
Channels should be definitely known
Objective authority requires a definite channel of
communication (formal authority)
Keep the line of communication short and direct.
Barnard’s
Informal Organization
Three universal elements of an informal
organization:
Communication
Maintenance of cohesiveness
Maintenance of feelings of personal integrity and
self-respect.
Barnard’s
Acceptance Theory of Authority
Barnard’s definition of
authority included the
notion that a
communication must be
“accepted” by the
organizational member.
Authority did not reside in
persons of authority, but
in a member’s acceptance
of authority.
Abraham H. Maslow
Motivation – Abraham H. Maslow
Dynamics of need
fulfillment or
deprivation
Hierarchy of Needs
Motivation – A.H. Maslow
The Journals of Abraham Maslow by Abraham Maslow. The Lewis Publishing Company, 1982.
Joseph Scanlon
Union official and later a colleague of Douglas
McGregor at MIT.
The Scanlon Plan
A union-management productivity plan whereby
groups of workers got bonuses for proposing
savings in labor costs
Group oriented
Not profit sharing.
James F. Lincoln
Rewarding individual efforts based on skill
ratings.
Wages and benefits were comparable to the
Cleveland area labor market
In addition, bonuses were paid for performance
based on quality and quantity of output as well as
self-management.
Bonuses are substantial.
Job Enlargement
Research in the 1940’s by Walker and Guest
indicated some possible improvements if jobs
were designed to lengthen (broaden) the
work cycle.
This concerned combining jobs rather than
increasing job depth.
Participation
Participation was a power-equalization thesis
of this period to play down the importance of
the organizational hierarchy.
James Worthy (1910-1998)
at Sears, Roebuck argued for flatter structures
and decentralization.
Also worked with the University of Chicago’s
Committee on Human Relations to study the
impact of structure on employee morale.
Participation
William B. Given, Jr. – “bottom-up” approach
Charles P. McCormick – a plan for participation
which is still operative in the McCormick
Company (tea, spice, and extract firm).
Junior Boards were created (“multiple
management”) to improve communications,
manager development, and coordination through
participation.
The Golden Rule was the basis for his successful
technique for managing people.
Rensis Likert – University of
Michigan Studies
Found a two dimensional
orientation:
An employee orientation
stressing interpersonal
relations
A production orientation
focusing on producing
An employee orientation
coupled with more general
supervision led to higher
productivity, better morale,
lower turnover, greater
group cohesiveness and
less employee anxiety.
Rensis Likert
Ohio State University Studies
Herbert A. Simon
People at Work: The Macro
View
For Simon, composite
decisions are better due to
limits on a person's ability
to achieve better
solutions;participation by
different groups would be
an improvement.
With James March (1928-),
Simon wrote the influential
book Organizations.
People at Work: The Macro
View
George Homans was
influenced by Pareto.
His study of relationships
in work and social
systems found
dimensions such as:
Activities, formal or
informal.
Interactions,prescribed
or emergent.
Sentiments, the elusive
nature of feelings.
George Homans
Summary
Evolving management thought had two phases in this
period:
Micro level inquiry into sociometry, group dynamics, participation,
leadership and motivation
Macro level search for models to explain interactions between the
formal and informal organization.
Human relation additions to concepts of management
include:
An increasing emphasis on the social
Enlarging jobs to counteract overspecialization
Less emphasis on hierarchy, more on participation
Recognition of the informal organization
Developing the means to study the interaction of the formal and
informal organization.
Chapter Sixteen
Ralph C. Davis
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.
Toward a Top Management
Viewpoint – Harry Hopf
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).
Harry Hopf
“Form follows function,” an architectural
notion for organization structure (ahead of
A.D. Chandler Jr.’s “structure follows
strategy?”).
“Optimology,” a view of the firm as a whole –
serve society to maximize profits.
Other Studies of Top
Management
Holden, Fish, and Smith studied 31 blue-chip
companies in 1941: found need for clearer
objectives and plans.
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.
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)
Robert Gordon’s criticism was much the
same, seeing top management as a self-
perpetuating oligarchy serving their own
interests.
Why does this seems to be an evergreen,
ever recurring problem?
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
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.
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.