the evolution of management theory 9-18-06 upload

The Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management Theory

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

To understand how management theories develop

To understand the impact of the environment to management thinking

To gain insights into new management approach

Early Management ThoughtEarly Management ThoughtEarly Management ThoughtEarly Management Thought

Early ideas about management strategySun Tzu (770-476 B.C.), The Art of War

Early ideas about leadershipNicolò Machiavelli (1469-1527), The Prince

Early ideas about the design and organization of work

Adam Smith, The Wealth of Nations• division of labor

Sun Tzu, Art of WarSun Tzu, Art of WarSun Tzu, Art of WarSun Tzu, Art of War“Shang Chang Ru Zhan Chang”“The marketplace is a battlefield”

Sun Tzu, 4th century BC

Management and MachiavelliManagement and MachiavelliManagement and MachiavelliManagement and Machiavelli

New science of management lies in the the old art of government"to be a great pretender and dissembler." “cunning and intrigue, the triumph of force over reason.”"a prince" ought to have no other aim or thought, nor select anything else for his study, than war and its rules and discipline."

The Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management Theory

(Comprehensive Analysis of Management)

Systems Theory

Contingency Approach

Management ApproachesManagement Approachesand the Environmentand the Environment

Management ApproachesManagement Approachesand the Environmentand the Environment

GENERALENVIRONMENT

OPERATINGENVIRONMENT

INTERNALENVIRONMENT

SOCIAL ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY

NEW ENTRANTSSUPPLIER

SUBSTITUTES

CUSTOMER

COMPETITION

PRODUCTIONTECHNOLOGYSTRUCTUREINPUTS

The Classical ApproachThe Classical ApproachThe Classical ApproachThe Classical Approach

Environment in ca1890•Industrial revolution•Autocratic management was the norm•“Science" as a solution to the inefficiencies and injustices of the period•Idea of interchangeable parts

The classical approach (ca1890) to management is a management approach that emphasizes organizational efficiency to increase organizational success.

The Classical ApproachThe Classical ApproachThe Classical ApproachThe Classical Approach

Scientific ManagementFrederick W. Taylor

Frank and Lillian Gilbreth

Henry Gantt

Bureaucratic ManagementMax Weber

Administrative ManagementHenri Fayol

Taylor’s Four Principles of Scientific ManagementTaylor’s Four Principles of Scientific ManagementTaylor’s Four Principles of Scientific ManagementTaylor’s Four Principles of Scientific Management

1. Scientifically study each part of a task and develop the best method of performing the task.

2. Carefully select workers and train them to perform the task by using the scientifically developed method.

3. Cooperate fully with workers to ensure that they use the proper method.

4. Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

““Now one of the first requirements for Now one of the first requirements for a man who is fit to handle pig iron as a a man who is fit to handle pig iron as a regular occupation is that he shall be regular occupation is that he shall be so stupid and so phlegmatic that he so stupid and so phlegmatic that he more nearly resembles in his mental more nearly resembles in his mental makeup the ox than any other type”makeup the ox than any other type”

- Frederick Taylor- Frederick Taylor

““Now one of the first requirements for Now one of the first requirements for a man who is fit to handle pig iron as a a man who is fit to handle pig iron as a regular occupation is that he shall be regular occupation is that he shall be so stupid and so phlegmatic that he so stupid and so phlegmatic that he more nearly resembles in his mental more nearly resembles in his mental makeup the ox than any other type”makeup the ox than any other type”

- Frederick Taylor- Frederick Taylor

Key Characteristics of Weber’s Ideal BureaucracyKey Characteristics of Weber’s Ideal BureaucracyKey Characteristics of Weber’s Ideal BureaucracyKey Characteristics of Weber’s Ideal Bureaucracy

Specialization of labor

Formal rules and procedures

Impersonality

Well-defined hierarchy

Career advancement based on merit

Fayol’s 14 Principles of Fayol’s 14 Principles of Administrative ManagementAdministrative Management

Fayol’s 14 Principles of Fayol’s 14 Principles of Administrative ManagementAdministrative Management

1. Division of work

2. Authority

3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of individual interest to the general interest

7. Remuneration

8. Centralization

9. Scalar chain

10. Order

11. Equity

12. Stability and

tenure

13. Initiative

14. Esprit de corps

Planning, Organizing, Commanding, Coordinating, Controlling

What are the limitations of the What are the limitations of the Classical Approach??Classical Approach??

What are the limitations of the What are the limitations of the Classical Approach??Classical Approach??

The Behavioral ApproachThe Behavioral ApproachThe Behavioral ApproachThe Behavioral ApproachThe behavioral approach (ca 1910) to management is a management approach that emphasizes increasing organizational success by focusing on human variables within the organization.

Environment in ca1910•The Newtonian science that supported "the one best way" of doing things was being strongly challenged by the "new physics" results of Rutherford and Einstein•In the work place there were strong pressures for shorter hours and employee stock ownership.•As the effects of the 1929 stock market crash and following depression were felt, employee unions started to form

Behavioral PerspectiveBehavioral PerspectiveBehavioral PerspectiveBehavioral Perspective

The Hawthorne StudiesHuman Relations Approach

Employee motivation• Abraham Maslow

Leadership style• Douglas McGregor

Hawthorne Effect:Hawthorne Effect:Hawthorne Effect:Hawthorne Effect:

The discovery that paying special The discovery that paying special attention to employees motivates them attention to employees motivates them to put greater effort into their jobs.to put greater effort into their jobs.

(from the Hawthorne management studies, (from the Hawthorne management studies, performed from 1924 – 1932 at Western Electric performed from 1924 – 1932 at Western Electric Company’s plant near Chicago)Company’s plant near Chicago)

Physical NeedsPhysical Needs

Need for SecurityNeed for Security

Need for Social RelationsNeed for Social Relations

Need for Self EsteemNeed for Self Esteem

Self-ActualizationSelf-Actualization

Maslow’s Hierarchy of Maslow’s Hierarchy of NeedsNeeds

McGregor’s Theory X and Theory YMcGregor’s Theory X and Theory YMcGregor’s Theory X and Theory YMcGregor’s Theory X and Theory Y

Leaders and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition.

A negative perspective on human behavior.

Leaders and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization.

A positive perspective on human behavior.

What are the limitations of the What are the limitations of the behavioral approach?behavioral approach?

What are the limitations of the What are the limitations of the behavioral approach?behavioral approach?

The Management Science ApproachThe Management Science ApproachThe Management Science ApproachThe Management Science Approach

The management science approach (ca1940) is a management approach that emphasizes the use of the scientific method and quantitative techniques to increase organizational success.

Environment in ca1940•Application of OR in solving complex problems in warfare (WWII)•Significant technological and tactical breakthroughs•Interest in manufacturing and selling after WWII

The System ApproachThe System ApproachThe System ApproachThe System Approach

The system approach (ca 50’s-60’s) to management is a management approach based on general system theory--the theory that to understand fully the operation of an entity, the entity must be viewed as a system. This requires understanding the interdependence of its parts.

Environment in ca1950’s to 60’s”•Growing quality consciousness•Total Quality Management

The Open Management SystemThe Open Management SystemThe Open Management SystemThe Open Management SystemGENERALENVIRONMENT


SOCIAL ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY


SUBSTITUTES

CUSTOMER

COMPETITION

PLANNING, ORGANIZING,INFLUENCING, CONTROLLINGINPUT PROCESS OUTPUT

The Contingency ApproachThe Contingency ApproachThe Contingency ApproachThe Contingency Approach

The contingency approach (ca 70’s) to Management is a management approach that Emphasizes that what managers do in practice depends on a given set of circumstances--a situation.

Environment in ca1970’s”•Emergence of new companies “Apple”•Emergence of new products, “IBM PC”

Triangular ManagementTriangular ManagementTriangular ManagementTriangular Management

Triangular management is a managementapproach that emphasizes using informationfrom the classical, behavioral, and manage-ment science schools of thought to managethe open management system.

Triangular Triangular Management ModelManagement Model

Triangular Triangular Management ModelManagement Model

BEHAVIORALLY BASED INFORMATION

CLA

SSIC

ALL

Y B

ASE

D IN

FOR

MA

TIO

NM

AN

AG

EMEN

T SCIEN

CE-B

ASED

INFO

RM

ATIO

N

GENERALENVIRONMENT


SOCIAL ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY


SUBSTITUTES

CUSTOMER

COMPETITION


GENERALENVIRONMENT


SOCIAL ECONOMIC

POLITICAL

LEGAL

TECHNOLOGY


SUBSTITUTES

CUSTOMER

COMPETITION


Type Z Organization Type Z Organization (Theory Z by Ouchi 1981)(Theory Z by Ouchi 1981)

Type Z Organization Type Z Organization (Theory Z by Ouchi 1981)(Theory Z by Ouchi 1981)

Theory Z (ca 80’s) suggests that involved workers are the key to an increase in productivity and it offers offers ways to manage (collective decision making, slow evaluation and promotion, and holistic concern for people) so that they can work together more effectively.

Environment in ca1980’s•Slow American productivity improvement•Rise of Japanese companies•Japanese management may offer solutions to this problem

Theory ZTheory ZTheory ZTheory Z

“Involved workers are the key to an increase in productivity.”

From “Theory Z” by William Ouchi, 1981

Chaordic Organization (Chaos Theory)Chaordic Organization (Chaos Theory)(Hock, Dee,1999)(Hock, Dee,1999)

Chaordic Organization (Chaos Theory)Chaordic Organization (Chaos Theory)(Hock, Dee,1999)(Hock, Dee,1999)

Chaos theory (ca 90’s) in management recognizes that events indeed are rarely controlled. Blending chaos with order

Environment in ca1990’s•Start of Internet age•Highly competitive environment•Emergence of communications technologies•Emergence of new work practices (virtual teams, network organizations)

Chaordic OrganizationsChaordic OrganizationsChaordic OrganizationsChaordic Organizations

Purpose

Principles, People, and Concept

Structure and Practice

• Clarity of purpose and shared values•Operate through network of equals, not hierarchies

From “Birth of the Chaordic Age” by Hock, D. 1999

How about Modern Management How about Modern Management Approach?Approach?

How about Modern Management How about Modern Management Approach?Approach?

Environment In the New MillenniumEnvironment In the New MillenniumEnvironment In the New MillenniumEnvironment In the New Millennium

Environment in the millenium•Information and electronic age•Information and knowledge is going to be readily available to us all•Information speed through Internet•The future is going to be dominated by our need to understand systems.

The Learning Organization ApproachThe Learning Organization ApproachThe Learning Organization ApproachThe Learning Organization Approach

The learning organization approach to management is the management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors.

From “The Fifth Discipline” by Peter Senge, 1990

Managerial Approach to Learning Managerial Approach to Learning OrganizationOrganization

Managerial Approach to Learning Managerial Approach to Learning OrganizationOrganization

Managers must create an environment conducive to learning

Managers encourage the exchange or information among organization members

Managers promote systematic problem solving

Experimentation

learning from experiences and past history

learning from experience of others

transferring knowledge rapidly throughout the organization


Building a Learning OrganizationBuilding a Learning OrganizationBuilding a Learning OrganizationBuilding a Learning Organization

System ThinkingEvery organization member understands his or her own job and how the jobs fit together to provide finals products to the customer

Shared vision All organization members have a common view of the purpose of the organization and a sincere commitment to accomplish the purpose

Challenging of the mental models Organization members routinely challenge the the way business is done and the thought processes people use to solve organizational problems


Building a Learning OrganizationBuilding a Learning OrganizationBuilding a Learning OrganizationBuilding a Learning Organization

Team learningOrganization members work together, develop solution to new problems together, and apply the solutions together.

Working as teams rather than than individuals will help the organization gather collective force to achieve organizational goals

Personal masteryAll organization members are committed to gaining a deep and rich understanding of their work

Such an understanding will help organizations to reach important challenges that confront them


Building a Building a LearningLearning

OrganizationOrganization

System thinkingSystem thinking

Personal masteryPersonal mastery

Team LearningTeam Learning

Learning Organization ApproachLearning Organization ApproachLearning Organization ApproachLearning Organization Approach

Shared VisionShared Vision

Challenging of Challenging of Mental modelsMental models

(Systems Approach)

(Chaordic Organization)

(Classical/Management science)

(Theory Z/Behavioral)

(Theory Z/Behavioral)

Business Process Management ApproachBusiness Process Management ApproachBusiness Process Management ApproachBusiness Process Management ApproachThe business process management approach to management is a method of efficiently aligning an organization with the wants and needs of clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology. As organizations strive for attainment of their objectives, BPM attempts to continuously improve processes - the process to define, measure and improve your processes – a ‘process optimization' process.

This is actually a slow advance in process management: •Record Management •Workflow - 1970 •Business Process Re-engineering (BPR) - 1990 •Business Process Management (BPR) - 2000

Western Management TheoriesWestern Management TheoriesWestern Management TheoriesWestern Management Theories

Is there an Asian Management Theory??Is there an Asian Management Theory??

What is business management What is business management the Asian way?the Asian way?

What is business management What is business management the Asian way?the Asian way?

Business tend to be small scaleTime has no beginning and endIndividualism is less relevant; managerial beliefs shift towards the autocratic endConformity to socially acceptable behaviors is done through morality (e.g losing face)Oriental managers rely less on interpersonal confrontationsManagerial decisions consider effects on othe rpeopleControl of performance is less formalMaintaining and developing guanxi (connection and relationship

*From World Executive Digest by Redding & Martyn, 1984

““Will Western Management Will Western Management work in Asia?”*work in Asia?”*

““Will Western Management Will Western Management work in Asia?”*work in Asia?”*

“Values and attitudes affect but do not invalidate the transfer of American management concepts… Consequently, when we wish to transfer an effective device from one culture to another, careful attention should be given to underlying premises…?

“Tools of management remain the same.”**

“Economic and business philosophy are however, different.”**

Combination of general management, functional management, and communal organization and management..**

*From World Executive Digest by William Newman, 1984**From World Executive Digest by Sixto Roxas, 1981

Photo from www.aim.edu.ph

Is there a Filipino Management Is there a Filipino Management Theory??Theory??

Are Western theories applicable in Are Western theories applicable in Philippine setting?Philippine setting?

Is there a Filipino Management Is there a Filipino Management Theory??Theory??

Are Western theories applicable in Are Western theories applicable in Philippine setting?Philippine setting?

Are Western Theories Applicable in Are Western Theories Applicable in Philippine Setting?Philippine Setting?

Are Western Theories Applicable in Are Western Theories Applicable in Philippine Setting?Philippine Setting?

“The models and ideal types taught in Western-oriented MBA programs are based on certain assumptions, many of which are invalid in the Philippines. Although organizations here have most of the structures and formal procedures of Western business, actual day-to-day business processes and interactions necessarily proceed within the matrix of Filipino culture and values. Thus, the need for the Westerner to go "the extra mile" to understand what's really going on and adapt a culturally sensitive style of doing business.”

- Clarence Henderson, Henderson Consulting International

What is Pinoy Management Theory??What is Pinoy Management Theory??What is Pinoy Management Theory??What is Pinoy Management Theory??

“No one Management Theory or Style.”

Under the formal organization are:“Informal organization”

“Battlefield of behavioral styles among managers and employees”

“Unknown cultural ambiance among peoples and systems”

From “Pinoy Management” by Ernesto Franco, 1986

Weaknesses of Pinoy WorkersWeaknesses of Pinoy WorkersWeaknesses of Pinoy WorkersWeaknesses of Pinoy Workers

Walang bilib sa sarili (No confidence in oneself)Dikdik sa Colonial Mentality (Indoctrinated with Colonial Mentality)Masyadong relaks (Overly relaxed)Ningas-cogon (Not a follow-up people)Holiday mentalityLack of managerial and organizational effectivenessLack of self-reliant tenacity


Pinoy Management Pinoy Management Pinoy Management Pinoy Management Kailangan may No. 2 (There is a need for No.2)Tsismis machine (Grapevine Machine)Kailangan may Hatchet Man (There is need for a Hatchet Man)Be an expert on timingLumayo sa madalas matalo (Avoid losers)Gawin mong personal (Make it personal)NBA Style: One-on-onePower play. Laban (Fight)Be situational and contingentUmarte kang parang intelihente. Iyong laging nag-iisipBody language ang importante (Body language is important)Pag sinabing “No”, dapat “No” talaga


Pinoy Management ApproachesPinoy Management ApproachesPinoy Management ApproachesPinoy Management Approaches

Management by “Kayod” (Realist Manager)He wants quick action

He’s an autocrat

He is sigurista

He has gut feel

He knows how to use people

Management by “Libro” (Idealist Manager)He is a thinker; technocrat; mabusisi; may sistema

Matigas and ulo


Pinoy Management ApproachesPinoy Management ApproachesPinoy Management ApproachesPinoy Management Approaches

Management by “Lusot” (Opportunist Manager)He is galawgawWalang konsensiyaMahilig sa lusot (Loves to get by)Mahilig sa ayusan

Ugnayan-Management (The Hybrid)Has balanceContingency management styleHe is solidMarunong pumili (Chooses well)Pambihira talaga (Exceptionally gifted)


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the evolution of management theory 9-18-06 upload

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