My Journey to the IIM !!

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motivation in theory - taylor -scientific management
Introduction
Taylor developed his theory of "scientific management" as he worked his way up from a labourer to a works manager in a US steelworks.
From his observations, Taylor made three key assumptions about human behaviour at work:
(1) Man is a rational economic animal concerned with maximising his economic gain;
(2) People respond as individuals, not as groups
(3) People can be treated in a standardised fashion, like machines
Taylor had a simple view about what motivated people at work - money. He felt that workers should get a fair day's pay for a fair day's work, and that pay should be linked to the amount produced (e.g. piece-rates). Workers who did not deliver a fair day's work would be paid less (or nothing). Workers who did more than a fair day's work (e.g. exceeded the target) would be paid more.
The implications of Taylor's theory for managing behaviour at work were:
- The main form of motivation is high wages, linked to output
- A manager's job is to tell employees what to do
- A worker's job is to do what they are told and get paid accordingly
Weaknesses in Taylor's Approach
The most obvious weakness in Taylor's approach is that it ignores the many differences between people. There is no guarantee that a "best way" will suit everyone.
Secondly, whilst money is an important motivation at work for many people, it isn't for everyone. Taylor overlooked the fact
 
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Contingency theory

Introduction
To date, the approaches to management that we've discussed have been characterised by proposing 'one best way' to manage. As we saw from our discussion of Systems Theory last week, they were also characterised by a focus on the internal environment - what actually happens within organisations.

Today, in discussing the first of the contemporary approaches - contingency theory - I will be focussing on an approach which acknowledges that there is no one best way to manage in a given situation and that situational variables from both the internal and external environments impact on management practice.

Although the list of variables is probably just about endless, they may include:

the size of the organisation
how it adapts to its environment
differences among resources and operations activities
managerial assumptions about employees
strategies and
technologies used.
Although we will discuss all these and more during coming lectures today I will focus on the variables of strategy, adaptation to the environment, technology and size.

Main ideas
The main ideas about Contingency Theory that I will discuss today are:

There is no universal or one best way to manage
The design of an organisations and its subsystems must 'fit' with the environment
Effective organisations not only have a proper 'fit' with the environment but also between its subsystems and
The needs of an organisation are better satisfied when it is properly designed and the management style is appropriate both to the tasks undertaken and the nature of the work group.
The contingency approach
The essence of the contingency approach is that a desired outcomes is the consequence of an appropriate 'fit' between two or more factors, such as between the organisation's strategy and structure.

According to this approach the managerial tasks involves analysing the organisations in its context, taking advantage of opportunities and minimising constraints through endless combinations of strategies, structures and policies.

Contingency approaches to organisational design
According to Contingency Theory, the structure of an organisation depends on the circumstances at any given time. The key contingency variables addressed in the literature include:

strategy
ability to adapt to the environment
technology and
size.
Strategy and structure
Strategy can impact on structure in a variety of ways, including:

Strategy determines organisational tasks
Strategy impacts on the choice of technology and the people who use it and
Strategy defines the environment in which an organisation will operate.
Adaptation and structure
Burns and Stalker identified two 'ideal' organisational types:

Mechanistic: Which corresponds with the classical model and is adapted to stable environments and
Organic: A less structured and formal organisation type which is more suited to turbulent environments.
Lawrence and Lorsch found that successful organisations tend to differentiate their structures under conditions of environmental change.

Technology and structure
Joan Woodward and her colleagues examined the relationship between technological processes and organisational structure and found that:

the more complex the technology, the greater the numbers of managers and mangerial levels
the span of management of first line managers varies depending on the type of production technology utilised and
the greater the technological complexity of the organisation the larger the number of clerical and administrative staff.
Size and structure
In terms of size and structure:

the overall size of the organisation and of its subunits affect structure
larger organisations tend to favour more standardised activities
decentralisation occurs with increase in size and
the larger the organisation the more bureaucratic it is likely to become.
Child found that, in looking at large organisations, those that were more bureaucratic had better financial performance than those that were less bureaucratic. The converse was true of small organisations.

Contingency theories and leadership
A contingency approach to leadership sees the successful leader as 'one who is keenly aware of the forces which are most relevant to his behaviour at any given time [and] who is able to behave appropriately in the light of these ...' (Tannenbaum & Schmidt 1958, 101)

Fiedler proposed that leaders were either:

relationship centred or
task centred
and that the situation can be analysed in terms of:

leader-member relations
task structure and
leader position power.
Limitations
Criticisms of contingency theory include:

determinism
reification and
its assumption that managers react rationally in response to organisational threats or changes. It ignores the fact that managers may act politically or pursue agendas which cirumvent rational responses to the environment.
Legacies
Legacies are that contingency theory:

recognises that multiple organisational forms and management styles are the norm
appreciates the importance of judgment as a managerial tool and
recognises the importance of the environment-organisation interaction.
 
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The Contingency Approach. The work of Fred Fiedler (1967) was one of the first major contributions to the development of the contingency view of leadership. ...
 

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Modern managers use many of the practices, principles, and techniques developed from earlier concepts and experiences. The Industrial Revolution brought about the emergence of large-scale business and its need for professional managers. Early military and church organizations provided the leadership models.

In 1975, Raymond E. Miles wrote Theories of Management: Implications for Organizational BehavioManagerial

Functions

r and Development published by McGraw Hill Text. In it, he popularized a useful model of the evolution of management theory in the United States. His model includes classical, human relations, and human resources management.

Classical School

The Classical school of thought began around 1900 and continued into the 1920s. Traditional or classical management focuses on efficiency and includes bureaucratic, scientific and administrative management. Bureaucratic management relies on a rational set of structuring guidelines, such as rules and procedures, hierarchy, and a clear division of labor. Scientific management focuses on the "one best way" to do a job. Administrative management emphasizes the flow of information in the operation of the organization.

Bureaucracy

Max Weber (1864-1920), known as the Father of Modern Sociology, analyzed bureaucracy as the most logical and rational structure for large organziations. Bureaucracies are founded on legal or rational authority which is based on law, procedures, rules, and so on. Positional authority of a superior over a subordinate stems from legal authority. Charismatic authority stems from the personal qualities of an individual. Efficiency in bureaucracies comes from: (1.) clearly defined and specialized functions; (2.) use of legal authority; (3.) hierarchical form; (4.) written rules and procedures; (5.) technically trained bureaucrats; (6.) appointment to positions based on technical expertise; (7.) promotions based on competence; (8.) clearly defined career paths.

Scientific Management

Scientific management focuses on worker and machine relationships. Organizational productivity can be increased by increasing the efficiency of production processes. The efficiency perspective is concerned with creating jobs that economize on time, human energy, and other productive resources. Jobs are designed so that each worker has a specified, well controlled task that can be performed as instructed. Specific procedures and methods for each job must be followed with no exceptions.

Frederick Taylor (1856-1915)

Many of Frederick Taylor's definitive studies were performed at Bethlehem Steel Company in Pittsburgh. To improve productivity, Taylor examined the time and motion details of a job, developed a better method for performing that job, and trained the worker. Furthermore, Taylor offered a piece rate that increased as workers produced more.

In 1911, Frederick Taylor, known as the Father of Scientific Management, published Principles of Scientific Management in which he proposed work methods designed to increase worker productivity. One of his famous experiments had to do with increasing the output of a worker loading pig iron to a rail car. Taylor broke the job down into its smallest constituent movements, timing each one with a stopwatch. The job was redesigned with a reduced number of motions as well as effort and the risk of error. Rest periods of specific interval and duration and a differential pay scale were used to improve the output. With scientific management, Taylor increased the worker's output from 12 to 47 tons per day! The Taylor model gave rise to dramatic productivity increases.

Frank (1868-1924) and Lillian (1878-1972) Gilbreth



Frank and Lillian Gilbreth emphasized method by focusing on identifying the elemental motions in work, the way these motions were combined to form methods of operation, and the basic time each motion took. They believed it was possible to design work methods whose times could be estimated in advance, rather than relying upon observation-based time studies. Frank Gilbreth, known as the Father of Time and Motion Studies, filmed individual physical labor movements. This enabled the manager to break down a job into its component parts and streamline the process. His wife, Lillian Gilbreth, was a psychologist and author of The Psychology of Work. In 1911 Frank Gilbreth wrote Motion Study and in 1919 the couple wrote Applied Motion Study. Frank and Lillian had 12 children. Two of their children, Frank B. Gilbreth, Jr. and Ernestine Gilbreth Careyone, wrote their story, Cheaper by the Dozen.

One of Frank Gilbreth's first studies concerned bricklaying. (He had worked as an apprentice bricklayer.) He designed and patented special scaffolding to reduce the bending and reaching which increased output over 100 per cent. However, unions resisted his improvements, and most workers persisted in using the old, fatiguing methods.

The Gilbreths believed that there was one best way to perform an operation. However, this "one best way" could be replaced when a better way was discovered. The Gilbreths defined motion study as dividing work into the most fundamental elements possible, studying those elements separately and in relation to one another; and from these studied elements, when timed, building methods of least waste. They defined time study as a searching scientific analysis of methods and equipment used or planned in doing a piece of work, development in practical detail of the best way of doing it, and determination of the time required. The Gilbreths drew symbols on operator charts to represent various elements of a task such as search, select, grasp, transport, hold, delay, and others. They called these graphical symbols "therbligs" (Gilbreths spelled backwards).

Henry Gantt (1861-1919)

Henry Gantt developed the Gantt chart, which is used for scheduling multiple overlapping tasks over a time period. He focused on motivational schemes, emphasizing the greater effectiveness of rewards for good work (rather than penalties for poor work). He developed a pay incentive system with a guaranteed minimum wage and bonus systems for people on fixed wages. Also, Gantt focused on the importance of the qualities of leadership and management skills in building effective industrial organizations.

Administrative Management

Administrative management emphasizes the manager and the functions of management. Henri Fayol (1841--1925), known as the Father of Modern Management, was a French industrialist who developed a framework for studying management. He wrote General and Industrial Management. His five functions of managers were plan, organize, command, coordinate, and control. His fourteen principles of management included division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interests to general interests, renumeration of personnel, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative, and esprit de corps (union is strength).

Mary Parker Follett's concepts included the universal goal, the universal principle, and the Law of the Situation. The universal goal of organizations is an integration of individual effort into a synergistic whole. The universal principle is a circular or reciprocal response emphasizing feedback to the sender (the concept of two-way communications). Law of the Situation emphasizes that there is no one best way to do anything, but that it all depends on the situation.

Human Relations School

Behavioral or human relations management emerged in the 1920s and dealt with the human aspects of organizations. It has been referred to as the neoclassical school because it was initially a reaction to the shortcomings of the classical approaches to management. The human relations movement began with the Hawthorne Studies which were conducted from 1924 to 1933 at the Hawthorne Plant of the Western Electric Company in Cicero, Illinois.

The Hawthorne Studies

Harvard Business School researchers, T.N. Whitehead, Elton Mayo, and George Homans, were led by Fritz Roethlisberger. Elton Mayo, known as the Father of the Hawthorne Studies, identified the Hawthorne Effect or the bias that occurs when people know that they are being studied. The Hawthorne Studies are significant because they demonstrated the important influence of human factors on worker productivity.

There were four major phases to the Hawthorne Studies: the illumination experiments, the relay assembly group experiments, the interviewing program, and the bank wiring group studies. The intent of these studies was to determine the effect of working conditions on productivity. The illumination experiments tried to determine whether better lighting would lead to increased productivity. Both the control group and the experimental group of female employees produced more whether the lights were turned up or down. It was discovered that this increased productivity was a result of the attention received by the group. In the relay assembly group experiments, six female employees worked in a special, separate area; were given breaks and had the freedom to talk; and were continuously observed by a researcher who served as the supervisor. The supervisor consulted the employees prior to any change. The bank wiring group studies were analyzed thoroughly by Homans and were included in his now classic book, The Human Group. The bank wiring groups involved fourteen male employees and were similar to the relay assembly group experiments, except that there was no change of supervision. Again, in the relay and bank wiring phases, productivity increased and was attributed to group dynamics. The conclusion was that there was no cause-and-effect relationship between working conditions and productivity. Worker attitude was found to be important. An extensive employee interviewing program of 21,000 interviews was conducted to determine employee attitudes toward the company and their jobs. As a major outcome of these interviews, supervisors learned that an employee's complaint frequently is a symptom of some underlying problem on the job, at home, or in the person's past.

Chester Barnard (1886-1961)

When Chester Barnard retired as the CEO of New Jersey Bell Telephone, he recorded his insights about management in his book, Functions of the Executive. It outlined the legitimacy of the supervisor's directives and the extent of the subordinates' acceptance. He developed the concepts of strategic planning and the acceptance theory of authority. Strategic planning is the formulation of major plans or strategies, which guide the organization in pursuit of major objectives. Barnard taught that the three top functions of the executive were to (l) establish and maintain an effective communication system, (2) hire and retain effective personnel, and (3) motivate those personnel. His Acceptance Theory of Authority states that managers only have as much authority as employees allow them to have. The acceptance theory of authority suggests that authority flows downward but depends on acceptance by the subordinate. The acceptance of authority depends on four conditions. (1.) Employees must understand what the manager wants them to do. (2.) Employees must be able to comply with the directive. (3.) Employees must think that the directive is in keeping with organizational objectives. (4.) Employees must think that the directive is not contrary to their personal goals. Barnard believed that each person has a zone of indifference or a range within each individual in which he or she would willingly accept orders without consciously questioning authority. It was up to the organization to provide sufficient inducements to broaden each employee's zone of indifference so that the manager's orders would be obeyed.

Human Resources School

Beginning in the early 1950s, the human resources school represented a substantial progression from human relations. The behavioral approach did not always increase productivity. Thus, motivation and leadership techniques became a topic of great interest. The human resources school understands that employees are very creative and competent, and that much of their talent is largely untapped by their employers. Employees want meaningful work; they want to contribute; they want to participate in decision making and leadership functions.

Integrating the Management Theories

Systems theory and a contingency view can help integrate the theories of management. Appropriate managerial techniques can be applied as required by environmental conditions. A broad perspective is valuable to managers when overseeing one unit or the total integration of all subunits.

Systems Theory

During the 1940s and World War II, systems analysis emerged. This viewpoint uses systems concepts and quantitative approaches from mathematics, statistics, engineering, and other related fields to solve problems. Managers find optimal solutions to management problems by using scientific analysis which is closely associated with the systems approach to management. A system is an interrelated and interdependent set of elements functioning as a whole. It is an open system that interacts with its environment. It is composed of inputs from the environment (material or human resources), transformation processes of inputs to finished goods (technological and managerial processes), outputs of those finished goods into the environment (products or services), and feedback (reactions from the environment). Subsystems are systems within a broader system. Interdependent subsystems (such as production, finance, and human resources) work toward synergy in an attempt to accomplish an organizational goal that could not otherwise be accomplished by a single subsystem. Systems develop synergy. This is a condition in which the combined and coordinated actions of the parts of a system achieve more than all the parts could have achieved acting independently. Entropy is the process that leads to decline.

Contingency View

In the mid-1960s, the contingency view of management or situational approach emerged. This view emphasizes the fit between organization processes and the characteristics of the situation. It calls for fitting the structure of the organization to various possible or chance events. It questions the use of universal management practices and advocates using traditional, behavioral, and systems viewpoints independently or in combination to deal with various circumstances. The contingency approach assumes that managerial behavior is dependent on a wide variety of elements. Thus, it provides a framework for integrating the knowledge of management thought.

Emerging Management Positions

New management viewpoints are emerging. Quality management emphasizes achieving customer satisfaction by providing high quality goods and services. Reengineering the organization redesigns the processes that are crucial to customer satisfaction.

Chaos models the corporation as a complex adaptive system that interacts and evolves with its surroundings. Many seemingly random movements in nature exhibit structured patterns. Living systems operate at their most robust and efficient level in the narrow space between stability and disorder -- poised at "the edge of chaos." It is here that the agents within a system conduct the fullest range of productive interactions and exchange the greatest amount of useful information.
 
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The Industrial Revolution began in the eighteenth century and transformed the job of manager from owner-manager to professional, salaried manager. Prior to industrialization, the United States was predominantly an agricultural society. The production of manufactured goods was still in the handicraft stage and consisted of household manufacturing, small shops, and local mills. The inventions, machines, and processes of the Industrial Revolution transformed business and management (such as, the use of fossil fuels as sources of energy, the railroad, the improvement of steel and aluminum metallurgical processes, the development of electricity, and the discovery of the internal-combustion engine.) With the industrial innovations in factory-produced goods, transportation, and distribution, big business came into being. New ideas and techniques were required for managing these large-scale corporate enterprises.

Two large-scale institutions, the church and the military, served as examples of control for these new managers. Many of the management terms and techniques used today have their basis in ecclesiastical and military authority (for example, superior, subordinate, strategy, and mission). Military commanders need only give orders, and then discharge, penalize, and demote those who do not carry them out and reward those who do.

Today, business and management continue to be transformed by high technology. In order to keep pace with the increased speed and complexity of business, new means of calculating, sorting and processing information were invented. An interesting description of the modern era is the Information Age that describes the general use of technology to transmit information.

Managers realized that they could profit from immediate knowledge of relevant information. The telegraph was the first instrument to transform information into electrical form over long distances. The telephone, radio, television, and computer expanded instant information. Computers store and handle a vast amount of data, automate manufacturing, and enhance modern communication systems. The mainframe in the 1970s, the PC in the 1980s and the office network in the first part of the 1990s were the platforms that drove massive product development and growth for the technology industry.

Communication and processing technologies are an essential tool in almost every field of business. The Internet, with its interconnection of millions of computers, has evolved to potentially become one of the greatest resources available to businesses today. The World Wide Web (www) offers access to vast information resources and an immense number of sites on the Internet. Managers can access, store and move digital information (voice, sound, text and numbers). Private corporate intranets provide a universal interface for sharing company-wide information and work group level information. Employees can access information, collaborate, and distribute results anywhere, anytime.

The computer and telecommunications industries continue to converge and have resulted in advances in two-way pagers, digital cellular service, desktop video-conferencing, portable satellite phones, mini-dishes and high-speed Internet access. Business documents include graphics and text on computers around the world, sound, video and simultaneous voice communications. Thus, the Information Age implies a time for a revolution in the information environment for business and management. The changes that are taking place may be more significant to management than the Industrial Revolution.

Organizations are two or more people working together in a structured, formal environment to achieve common goals. Managers provide guidance, implementation, and coordination so those organizational goals can be reached. The modern manager coaches employees of the organization to develop teamwork, which effectively fulfills their needs and achieves organizational objectives. The traditional autocratic organization with its hierarchical system of management and an overbearing "boss" that forces performance out of people is no longer needed. The modern manager provides an atmosphere of empowerment by letting workers make decisions and inspiring people to boost productivity.
 
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The extent to which managers perform the functions of management - planning, organizing, directing, and controlling - varies by level in the management hierarchy. The term supervisor could be applied at all management levels of the organization to those who direct the work of others. In common usage, however, the title tends to be used only in the first level of the management hierarchy. If an organization were divided into top, middle, and lower managerial levels, the term generally applies to the lower level.


Supervisors are managers whose major functions emphasize directing and controlling the work of employees in order to achieve the team goals. They are the only level of management managing non-managers. Thus, most of the supervisor's time is allocated to the functions of directing and controlling. In contrast, top managers spend most of their time on the functions of planning and organizing. The top manager determines the mission and sets the goals for the organization. His or her primary function is long-range planning. Top management is accountable for the overall management of the organization. Middle management implements top management goals. Supervisors direct the actual work of the organization at the operating level.



Keystone in the Organization

The keystone view, identified by Professor Keith Davis, is many people's ideal of a supervisor's job*. The comparison between an archway and an organization is very interesting. Without the keystone (supervisor), the arch (organization) collapses. The keystone is the central topmost stone of an arch. It is an essential part because it takes the pressure of both sides, exerts pressure of its own and uses them to strengthen the overall arch. The keystone supervisor is the main connector joining management and employees making it possible for each to perform effectively. Supervisors are the level of management linking the operations of each department to the rest of the organization. This view underscores the critical importance of developing people at all levels.



Employees need their jobs and want to know what is expected of them and how their work relates to the whole process. The supervisor is the point of contact in the satisfaction of these needs for employees. By his or her efforts toward productivity and efficiency, the supervisor helps make the company successful, which preserves and creates jobs. By interpreting policies and giving instructions and information and through normal, everyday contact with employees, the supervisor serves as the point of contact with management. The keystone has determined that he or she will control the job instead of the job controlling him or her. Thus, It is the confidence in self that will help determine the success of the manager.
 
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To meet the many demands of performing their functions, managers assume multiple roles. A role is an organized set of behaviors. Henry Mintzberg has identified ten roles common to the work of all managers. The ten roles are divided into three groups: interpersonal, informational, and decisional*. The informational roles link all managerial work together. The interpersonal roles ensure that information is provided. The decisional roles make significant use of the information. The performance of managerial roles and the requirements of these roles can be played at different times by the same manager and to different degrees depending on the level and function of management. The ten roles are described individually, but they form an integrated whole.


The three interpersonal roles are primarily concerned with interpersonal relationships. In the figurehead role, the manager represents the organization in all matters of formality. The top level manager represents the company legally and socially to those outside of the organization. The supervisor represents the work group to higher management and higher management to the work group. In the liaison role, the manger interacts with peers and people outside the organization. The top level manager uses the liaison role to gain favors and information, while the supervisor uses it to maintain the routine flow of work. The leader role defines the relationships between the manger and employees.

The direct relationships with people in the interpersonal roles place the manager in a unique position to get information. Thus, the three informational roles are primarily concerned with the information aspects of managerial work. In the monitor role, the manager receives and collects information. In the role of disseminator, the manager transmits special information into the organization. The top level manager receives and transmits more information from people outside the organization than the supervisor. In the role of spokesperson, the manager disseminates the organization's information into its environment. Thus, the top level manager is seen as an industry expert, while the supervisor is seen as a unit or departmental expert.

The unique access to information places the manager at the center of organizational decision making. There are four decisional roles. In the entrepreneur role, the manager initiates change. In the disturbance handler role, the manger deals with threats to the organization. In the resource allocator role, the manager chooses where the organization will expend its efforts. In the negotiator role, the manager negotiates on behalf of the organization. The top level manager makes the decisions about the organization as a whole, while the supervisor makes decisions about his or her particular work unit.

The supervisor performs these managerial roles but with different emphasis than higher managers. Supervisory management is more focused and short-term in outlook. Thus, the figurehead role becomes less significant and the disturbance handler and negotiator roles increase in importance for the supervisor. Since leadership permeates all activities, the leader role is among the most important of all roles at all levels of management.
 
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What does the discipline of MANAGEMENT involve?

An organisation may be broadly defined as a group of people who work together using a variety of resources such as money, materials and machines, and performing relevant tasks in order to achieve particular goals which they could not achieve working on their own. In most situations, successful organisations do not achieve their goals by chance but by following a deliberate process called "management".

MANAGEMENT may be defined as a process whereby people in leading positions in an organisation guide, direct and influence the activities of other people in the organisation with the aim of efficiently providing relevant products and/or services in order to meet the needs of customers and/or clients as a means of achieving the stated goals of the organisation.

There are various ways of looking at the MANAGEMENT process:





1. The Traditional Viewpoint of Management focuses on what managers do. It is generally accepted that they perform the following four functions:-

Planning: This involves defining organisational goals and proposing ways to reach them.

Organising: This is the process of creating a structure of relationships within the organisation that will enable employees to interact with one another, to interact with managers and to carry out management's plans and meet its goals.

Leading: This involves communicating with and motivating others to perform the tasks necessary to achieve the organisation's goals.

Controlling: This is the process by which a person consciously monitors performance and takes corrective action. In the control process, managers:

set standards of performance
measure current performance against those standards
take action to correct any deviations, and
adjust the standards if necessary.





2. The Behavioural Viewpoint of Management focuses on the roles which managers play while performing the four basic managerial functions:-





(a) Interpersonal Roles:

In the figurehead role, the manager represents the organisation at ceremonial and symbolic functions. For example, the sales manager who takes a customer to lunch.

The leader role involves responsibility for directing and co- ordinating the activities of employees in order to accomplish organisation goals.

The liaison role refers to managers' dealings with people outside the organisation. Such people include clients, government officials, customers and suppliers. In the liaison role, the manager seeks support from people who can affect the organisation's success, such as the Chamber of Commerce, for example.





3. The Systems Viewpoint of Management recognises that an organisation is an association of interrelated and interdependent parts or sub-systems. A business organisation is what might be called a "system" made up of many "sub-systems" such as employees, teams, departments, divisions, subsidiaries, who all need to work together to achieve the organisation's goals. The organisation also has to interact with various external "systems" such as suppliers, customers, shareholders and government agencies, for example. A manager with a systems view of management will only make decisions after identifying and analysing how other managers, departments, or customers might be affected by the decisions.





4. The Contingency Viewpoint of Management is illustrated in Figure 1. It evolved as a result of managers finding that applying either the traditional viewpoint of management, or the behavioural viewpoint of management, or the systems viewpoint of management in all situations on their own, did not work. As a hypothetical example, why would giving a bonus to workers at the Holiday Inn in Umtata result in an improved service to guests, whereas at the Holiday Inn in Port Elizabeth it might not? The underlying principle of the Contingency Viewpoint of Management is that different situations require different practices. The Contingency Viewpoint really means "it all depends". The Contingency Viewpoint recommends using the other three management viewpoints, namely the Traditional, the Behavioural and the Systems Viewpoints, independently or in combination, as necessary and appropriate, to deal with various situations. Managers are required to determine which of these three approaches is likely to be more effective than the others in a given situation.





Applying the contingency viewpoint requires the development and use of conceptual skills. Managers must be able to diagnose and understand a situation thoroughly - to determine which approach is most likely to succeed - before making a decision. Thereafter, the manager must apply a variety of other managerial skills to ensure that the decision is carried out in the most effective and efficient way possible.





Amongst the most important of these managerial skills are:

�¡ decision-making
�¡ inter-personal skills
�¡ communication
�¡ negotiating skills
�¡ delegating

The overall discipline of Management also involves the study of the key functional areas of an organisation in which the general principles of management outlined above will be applied. Clearly, however, in each key functional area, specific functionally-related skills and tasks will be practised and carried out in addition.





Key functional areas of an organisation:

1. Human Resource Management: This functional area is concerned with the following tasks and responsibilities:

formulating a personnel policy which is consistent with the overall strategic plan for the organisation as a whole;
training and development of employees
remuneration of employees
formulation and implementation of a labour relations strategy
interacting with trade unions
organisational behaviour issues such as
motivation of employees
leadership
corporate culture
organisational structure
individual behaviour and group behaviour
affirmative action (managing diversity in the workforce)
productivity





2. Purchasing Management: This functional area is concerned with the following tasks and responsibilities:-

procuring and making available all necessary raw materials, parts, machinery, stationery, vehicles, furniture equipment and services that the other functional areas of the organisation may need.
the key requirement is that the right supplies of the right quality are acquired at the right time at the right price.

3. Production Management: This functional area is concerned with the following tasks and responsibilities:-

establishing world class standards of manufacturing and service within the organisation
choosing the manufacturing process
layout of factory, machinery and equipment
quality control

4. Information Management: This functional area is concerned with the following tasks and responsibilities:-

financial accounting
cost accounting
collecting, storing and releasing information by means of a computerised management information system.

5. Marketing Management: this functional area is concerned with the following tasks and responsibilities:-

transferring ownership of the products and services provided by the organisation, to the customer
identifying target markets
identifying the needs and wants of the target market
designing and developing products and services to meet the needs and wants of the market
promoting the products through advertising, personal selling, sales promotion and public relations
pricing the products
distributing the products through a combination of retailers, wholesalers and other distributors.

6. Financial Management: This functional area is concerned with the following tasks and responsibilities:-

raising, allocating and controlling the finances of the organisation in terms of specified return on investment, liquidity and solvency objectives.
the investment decision - determining the type and quantity of assets needed by the organisation
the financing decision - determining the appropriate financial structure for the organisation in terms of share capital and debt capital.
the dividend decision - determining how profits should be distributed.





The Study of Management at Rhodes University:

The Department focuses on specific generic areas of Management but specialises in ENTREPRENEURSHIP. This specialisation is reflected in the Post-graduate Diploma in Entreprise Management.

The anticipation is that on comprehension of the course in Management sudents will be well-quipped to follow a career in General Management or start their own business.
 
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The first known management ideas were recorded as long ago as 3000-4000 B.C. One example is provided in the building of the pyramids in Egypt. One pyramid built by Cheops in 2900 B.C. required the use of 100,000 men for twenty years. The pyramid covered thirteen acres and measured 481 feet in height. It was constructed with 2.3 million stone blocks, each weighing an average of two and a half tons.1 To produce such a monumental achievement required planning, organizing, guiding and directing, monitoring, and decision making.

Archeologists and historians have discovered that the Sumerians in 3000 B.C. used a form of recordkeeping for commerce that was a relatively sophisticated system of accounting.2 Other management ideas developed during the Greek and Roman empires and the Middle Ages. An interesting situation occurred in Italy in the 1400s. Venice, known for its fighting power and production facilities, used assembly-line techniques to outfit galley ships to go to war. A report from a traveler in 1436 describes the process the Venetians used:

And as one enters the gate there is a great street on either hand with the seal in the middle, and on one side are windows opening out of the houses of the Arsenal, and the same on the other side, and out came the galley towed by a boat, and from the windows they handed out to them from one the cordage, from another the bread, from another the arms, and from another the balistes and mortars, and so from all sides everything which was required was on board, together with the complement of oars, and she was equipped from end to end. In this manner there came out ten galleys, fully armed, between the hours of three and nine.3

Even now it is impressive that within just a few hours ten ships could be completely outfitted and sent to sea.

Machiavelli
In the 1500s Machiavelli wrote The Prince in an attempt to gain favor with the ruler of an Italian city state. In his book, written as a satire, Machiavelli described the way that a good prince or leader should act .4 He suggested two basic approaches to people. One could be labeled the “love approach”—using love or respect as a basis for leadership and administration. Machiavelli suggested that the followers can control this relationship because they can break it whenever they wish to. The other approach is to rule through fear. Machiavelli felt that fear was superior because administrators or managers control the relationship and can tighten or loosen “the screws” as they see fit.
 
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In the late 1960s a book entitled Management and Machiavelli appeared on the best-seller list. The author, Antony Jay, took many of Machiavelli’s ideas and applied them to achieving success in a large corporation. As Jay says, “. . . in fact, Machiavelli, however marginal his relevance to academic historians, is bursting with urgent advice and acute observation for top management of the great private and public corporations all over the world.”5

The book provides some insight into the management of power and political organizations. Knowledge of this type is important to managers, especially in their own career advancement. For example, some universities have offered a course on Machiavellian management. A course of this type focuses on learning how to use Machiavellian tactics in order to advance one’s career.

Throughout history, management style was often autocratic and paternalistic. Serfs, soldiers, workers who were “supervised” were all expected to do as they were told. Some of them were fortunate to labor under benevolent autocracy. The autocratic owner or manager was generous, similar to a stern but loving father, as long as people stayed in line. Such a style represented a tempering of Machiavellian concepts with some “love.”

There are many examples of successful managers who use fear as a principle tool of their managerial style. For example, employees at National Cash Register (NCR) still talk about the hapless executive who returned from lunch one day to find his desk and chair on the curb. A worker doused his furniture with kerosene and set it ablaze under order from John Patterson, the company’s founder. Charles Revson, the founder of Revlon, once had a police gondola in Venice bring back a vacationing staffer from a boat on the canal to discuss a minor problem. And, Jack Tramiel, an autocratic chief executive of Commodore, hired, fired, and rehired four top subordinates in an effort to demonstrate his power and control over the operations. At big corporations, however, fear must be used cautiously. There is often a premium on consensus in today’s management world, and playing too tough can bring a quick end to a promising career. A recent study of forty-one fast-track executives showed that half were fired or forced to retire early because of their abrasive, intimidating styles.6

Many of the greatest contributions to management thought and practice occurred during and after the late 1800s. The industrial revolution in the United States led to a need for greater efficiency in production, and thus the development of a more scientific approach to managing and organizing workers. This development was due to the changing nature of societal values, growth in the population, the use of more technology and machines, and the demand for more complex products by consumers. These changes triggered the development of the classical era of management thought.
 
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CLASSICAL MANAGEMENT THEORY
Classical theory is a grouping of similar ideas on the management of organizations that evolved in the late 1800s and early 1900s. This theory contains three general branches. The predominant characteristic of all three branches is an emphasis on the economic rationality of the individual employee at work.

1. People are motivated by economic gains.

2. Because organizations control economic incentives, an individual is primarily a pas­sive resource to be manipulated, controlled, and motivated by the organization.

3. Irrational emotions must be kept from interfering with economic rationality.

4. Organizations can be designed in ways to control irrational emotions, and thus unpredictable, dysfunctional behaviors of employees.
Rational Economic View
The rational economic assumption was an extension of the ideas developed by Adam Smith in his economic writings. Smith’s classical assumption was that people choose the course of action that maximizes their economic reward. Thus to get employees to work hard, managers should appeal to their monetary desires. Figure 2-1 summarizes the rational economic view.7

The assumptions that guided classical theorists essentially are based on pessimistic views of human nature. Although these views are true to some extent, they overlook more positive aspects. Classical theorists recognized that humans have emotions, but they felt that emotions could be controlled by a logical and rational structuring of jobs and work. The focus on individual jobs was predominant with scientific management. Smith’s ideas span many disciplines in addition to economics and were instrumental in the development of the industrial revolution in England
 
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Scientific Management
The series of ideas that became known as scientific management grew from the work of Frederick W. Taylor, who is known as “the father of scientific management.” As illustrated in the managerial challenge, the ideas consist of four basic parts:

1. Each person’s job should be broken down into elements, and a scientific way to perform each element should be determined.

2. Workers should be scientifically selected and trained to do the work in the designed manner.

3. There should be good cooperation between management and workers so that tasks are performed in the designed manner.

4. There should be a division of labor between managers and workers. Managers should take over the work of supervising, setting up instructions, and designing the work, and the workers should be free to perform the work itself.8

In essence, scientific management emphasizes that managers and industrial engineers should develop the best way to perform each job, people should be trained to perform each job in the best way, and management and workers should cooperate so that the job is performed in the desired manner.

Frederick W. Taylor

Frederick W. Taylor is known as the “Father of Scientific Management”. This title was given to him because of his contributions to the practice of management. He is one of the first to apply a scientific approach to the study and practice of management. Therefore, he is the forerunner to the field of management as we know it today. Sigma Iota Epsilon, an honorary management organization, still recognized Taylor’s contributions in its ceremony to initiate new members.
 
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Frank and Lillian Gilbreth Frank and Lillian Gilbreth were a husband-and-wife team that brought not only color but significance to the early management movement. In his later years, Frank formed his own management consulting company and became closely associated with the scientific management movement. It was the good fortune of modern management that Frank married Lillian Moller, for they formed a team whose combined interests brought a new dimension to the emerging field of management.

Their marriage in 1904 began a significant partnership. After their marriage, Lillian became interested in psychology, for she thought that this field best complemented her husband’s work. Combining marriage and a growing family (there were eventually twelve children) with her assistance in Frank’s work, Lillian continued her research on her doctoral dissertation and finally submitted it in 1912. A great blow came when the University of California informed her that the dissertation was accepted but that she would have to return to campus for a year of residency before the degree could be granted. Lillian had been led to believe that this requirement would be waived in her case, but the university officials were adamant. Frank was furious and began shopping around for a publisher. Eventually the dissertation was published as a book. The author was listed as L. M. Gilbreth, with no mention that the author was a woman. This book, The Psychology of Management, is one of the earliest contributions to understanding the human factor in industry. Eventually, Lillian received her degree in 1915.9

1913 Assembly Line

Ford Motor Company’s first moving assembly line was located in Highland Park, Michigan in 1913. Above, the exterior of the Ford building was used for lowering the auto body on the chassis. Ford Motor Company was one of the first manufacturing plants to use assembly lines to mass produce “look alike automobiles.” The process allowed Henry Ford to keep prices down and better control the quality of the automobile
 
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Time and Motion Studies The Gilbreths are best known for their work on motion studies and the importance of increasing efficiency. From Frank’s earlier work in improving the efficiency of bricklayers, the Gilbreths ultimately developed a list of seventeen basic motions called therbligs (Gilbreth spelled backward, almost). The list of seventeen basic movements used in performing most tasks included such items as grasp, transport, load, and hold. 10 However, time-and-motion study did not always work out as planned, as indicated in the “When Things Go Wrong” discussion.

Piece-Rate Incentives Another major managerial practice developed by scientific management theorists and still widely used is the piece-rate incentive system. The development of these systems was a logical extension of the rational economic view. With a piece-rate incentive system, the largest amount of income goes to the workers who produce the maximum output.

Tying pay directly to output serves both the worker’s interest and management’s requirements. Take, for example, workers who operate a plastic injection molding machine for a luggage manufacturing company. This machine takes hot plastic and molds it into one side of a luggage case. Each worker is paid $0.18 for each side of luggage, and skilled workers can complete about 400 sides each day. Therefore, skilled workers can earn an average of $72 per work day. The benefit to management is the production of 400 parts.

This practice parallels the later work of B. F. Skinner, who developed principles of operant conditioning, and whose work will be reviewed in Chapter 10 (on motivation). It should be recognized that there were frequent abuses of piece-rate incentives in the days of its introduction. Frequently, managers would raise the base rate of production when it was discovered that workers could indeed work faster than before. The result was that workers often found themselves working harder and harder just to maintain the same wages they had before the introduction of piece-rate incentives. However, this practice was not what the scientific management theorists had in mind when they developed the system. They had intended for the rates to provide incentive to work harder and more efficiently, not to serve as a means for managers to get higher production from the workers without incurring higher wage costs.

WHEN THINGS GO WRONG
Efficiency to the ExtremeFrank and Lillian Gilbreth

Frank and Lillian Gilbreth, like Frederick W. Taylor, were pioneers in the study and practice of management. They prompted what became known as time and motion studies, the forerunner of the current field of ‘industrial engineering. They applied many of their managerial ideas at home with their children which led to the book (and later movie) about their family life entitled Cheaper by the Dozen
Frank Gilbreth was a fanatic about reducing inefficiency and using time-and-motion studies in all phases of life. However, there are numerous amusing anecdotes about his overzealous use of time-and-motion studies at home and on the job. As recounted by two of his children in Cheaper by the Dozen, Frank’s insistance upon efficiency at home backfired in several instances. For example, to reduce the time it took him to shave in the mornings, he used two shaving brushes to lather his face and found that he could reduce shaving time by seventeen seconds. He tried shaving with two razors and found that he could reduce the total shaving time by forty-four seconds. But he abandoned this scheme because it took him two minutes to apply bandages to cuts. His children suggested that it was the two lost minutes that bothered him and not the cuts.

At another time, Frank Gilbreth attempted to use efficiency to deal with family sickness. His philosophy of sickness was to ignore it. He said, “A sick person drags down the performance of the entire group ... You have been given health and it’s your job to keep it.” Yet, in spite of his admonitions, Frank was told that his tonsils needed to be removed. To enhance efficiency, he decided that as long as he was to have his tonsils out, the entire family (except for one older girl) would have their tonsils taken out at the same time. Frank even set up motion picture equipment to film the operating efficiency of the surgeon performing the tonsillectomies. However, in spite of the confusion of operating on all dozen or so people of the same name, the operations went well. Frank

had the most difficult recovery time, having to spend two weeks in bed (which was an extremely inefficient use of time). But the most severe problem was that the photographer had forgotten to take off the lens cap, so there were no movies of the operations for Frank to study and make recommendations on to the surgeons.
 
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A second group of classical management theorists dealt less with individual workers and their jobs and more with the operation of the total organization. Just as Taylor and the Gilbreths looked for the best piece-rate incentives and work motions, the administrative theorists looked for the best way to combine jobs and people into an efficient organization.Henri Fayol

One administrative theorist whose ideas stand out is Henri Fayol, the son of a middle-class Frenchman. Fayol was schooled as a mining engineer and became involved in studying the causes of underground fires. Later he created new techniques for improving mine safety and published studies of the design of mine shafts in regard to safety. Also, as the managing director of a mining company, Fayol developed a unified concept of management. Whereas scientific management was concerned primarily with tasks at the worker level, Fayol focused on managerial levels and the organization as a whole.11
Fayol divided management into five activities: planning, organizing, commanding, coordinating, and controlling. At the heart of his theory was the use of foresight (planning). He advocated both long-range planning and participation by man­agers.12

Within the group of five major activities, Fayol developed a list of basic management principles for achieving a good organization. These principles are summarized in Figure 2-2.

Although there are many elements in Fayol’s theory, the key idea is the tremendous emphasis placed on logic, rationality, and consistency. You will see the importance and impact of Fayol’s precepts in many areas of management, especially the organizing process.

. Division of Work. The intent of division of work is to produce more and better work for the same effort. Specialization is the most efficient way to use human effort.
2. Authority and Responsibility. Authority is the right to give orders and obtain obedience, and responsibility is a corollary of authority. The two types of authority are official authority, which is the authority of command, and personal authority, which is the authority of the individual manager.

3. Discipline. Obedience to organizational rules and employment agreement is necessary. The best way to have good superiors and clear and fair rules and agreements is to apply sanctions and penalties judiciously.
4. Unity of Command. There should be one and only one boss for each individual employee.

5. Unity of Direction. All units in the organization should be moving toward the same objectives through coordinated and focused effort.
6. Subordination of Individual Interest to General Interest. The interests of the organization should take priority over the interests of any one individual employee.

7. Remuneration of Employees. The overall pay and compensation for employees should be fair to both employees and the organization.
8. Centralization. There is a need to balance subordinate involvement through decentralization with managers’ retention of final authority through centralization.

9. Scalar Chain. Organizations should have a chain of authority and communication that runs from the top to the bottom and should be followed by managers and subordinates.
10. Order. People and materials must be in suitable places at the appropriate time for maximum efficiency.

11. Equity. Good sense and experience are needed to ensure fairness to all employees, who should be treated as equally as possible.
12. Stability of Personnel. Employee turnover should be minimized to maintain organizational efficiency.

13. Initiative. Workers should be encouraged to develop and carry out their plans for improvements.
14. Esprit de Corps. Management should promote a team spirit of unity and harmony among employees.
 
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Bureaucratic Organization
The writer most often associated with the bureaucratic approach to organization is Max Weber. Weber’s ideas of bureaucracy were a reaction to managerial abuses of power. He looked for methods to eliminate managerial inconsistencies that contributed to ineffectiveness, and his solution was a set of principles for organizing’ group effort through a bureaucratic organization. Although the term bureaucracy, has been popularized as a means of referring to organizations that “rule too rigidly by the book,” these principles are found in virtually every formal organization, today.

Max Weber

Max Weber proposed the development of ideal bureaucracy. Weber’s ideal bureaucracy was designed to eliminate inefficiency and waste in organizations. Many of the principles that he proposed many years ago are applied in the design of large organizations today. In fact, the term bureaucracy, that many consider similar to “red tape,” has a much broader and positive meaning because of Max Weber. In the last few decades, we have learned of some of the weaknesses of bureaucracies. As such, bureaucratic organizations are being modified.
The basic principles of bureaucratic organization are:

1. A division of labor by functional specialization.

2. A well-defined hierarchy of authority.

3. A system of rules covering the rights and duties of employees.

4. A system of procedures for dealing with work situations.

5. Impersonal relations between people.

6. Promotion and selection based on technical competence.13

One of the more dramatic examples of the strengths and weaknesses of bureaucratic organization is the U.S. Postal Service. A fact that sometimes escapes the demanding public is that usually a letter can be delivered quickly and cheaply across the country. Coordinating the efforts of a number of employees equivalent to a major metropolitan city is possible only because the postal system has a workable set of rules and policies and a hierarchy of authority. These obvious strengths of bureaucracies can be seen in many organizations.

On the other hand, the postal service sometimes follows its rules and policies too rigidly. Even though more than 10,000 local post offices are uneconomical, bureaucratic procedures prevent their closing. Furthermore, the postal system frequently cannot make changes because of resistance by the letter carriers’ union.

Advantages of Bureaucracy Bureaucracy has many positive outcomes, but they occur only when the bureaucracy operates ideally. Some of the positive consequences are as follows:

1. Employee behavior is consistent because of set policies, procedures, and rules.

2. Overlapping or conflicting job duties are eliminated because jobs are defined clearly.

3. Behavior is predictable because there is a hierarchy of authority (supervision).

4. Hiring and promotion are based on merit or expertise.

5. Employees develop expertise in their jobs because they specialize in those jobs.

6. There is continuity in the organization because it emphasizes the position rather than the person (that is, when one person leaves a position, another person assumes that same position).

Although rules and policies can be enforced too strictly, they are needed for efficiency. Also, they provide the bases for coordinating many different managers and entities. For example, realistic dress-code policies and rules used by all supervisors may reduce employee complaints about inconsistent standards and personal bias. Without an official policy, each supervisor might have a different dress expectation, which would be more likely to lead to complaints from employees. The advantages of bureaucracy are many; often difficulties blamed on it arise merely from employees misinterpreting rules or applying them inappropriately.

A major advantage associated with bureaucracy is that it helps ensure the consistent treatment of employees that is required by law (nondiscrimination). Precise job definitions can assure the manager that all necessary tasks will be accomplished, and they may prevent wasted actions due to overlapping jobs. The hierarchy of managerial positions provides for predictable behavior throughout the organization. Two supervisors must report to the same superior, and ultimately all managers report to one person, the president. This control is designed to prevent inconsistent policies among supervisors.

It is effective to promote individuals on the basis of merit and expertise—which bureaucracy facilitates—allowing them to move up the hierarchy as they gain expertise and experience. Specializing in their jobs helps individuals become “experts” on those jobs; thus they can perform more effectively. Finally, the organization continues even if individuals leave. If the president leaves, another person is simply promoted, and the organization continues.

Disadvantages of Bureaucracy The negative aspects of bureaucratic organization invite many criticisms about large organizations such as the federal government. Some of the charges made are:

1. There is too much red tape and too much paperwork.

2. Employees do not care about the organization.

3. Employees are treated impersonally (according to the rules).

4. Regulations result in conformity in behavior.

5. Relying on rules and policies stifles the growth of employees.

Most people have had unpleasant experiences at some time with some organization because an employee is unwilling to break a rule or exercise individual judgment. If a problem is not covered by a written rule or policy, many employees are afraid to make decisions or take actions to resolve the problem. This reliance on rules may lessen creativity, employee development, and initiative. Employees of bureaucracies sometimes are not treated like individuals but like machines. The impersonal treatment can lead to employee indifference toward the organization and job performance. Finally, recording all actions in writing and relying on rules may produce a lot of red tape, which wastes time that could be spent in more productive ways.

The complaints that students have about course registration procedures are examples of problems with the bureaucratic approach. Large numbers of students are impersonally processed, but individual problems are often ignored. In sum, the bureaucratic approach can have some important advantages, but it also has significant negative side effects.
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Contributions and Critique of Classical Theory
Any critique of classical theory must consider the time period in which it developed and the prevalent conditions of society and industry during that time. Classical principles of management evolved during the late nineteenth and early twentieth centuries. The United States was recovering from the Civil War and was changing from a frontier nation to an industrialized and urbanized society. Most organizations were small, inefficient manufacturing operations. The available workforce was made up of a large number of immigrants who spoke little English and had limited education. (Under such conditions, it is easy to understand why the concepts of scientific management and bureaucracy were such productive breakthroughs.)

Narrow, specialized jobs were performed by the immigrant workforce. Money was a major concern of many workers who were living in rather primitive circumstances. The orientation toward close supervision, rules and regulations, and an impersonal bureaucracy were all an outgrowth of the circumstances that confronted managers and business owners.

CONCEPT SUMMARY: Classical Theories

Approach
Rationale
Focus

Scientific Management
One best way to do each job
Job level

Administrative Principles
One best way to put an organization together
Organizational level

Bureaucratic Organization
Rational and impersonal organizational arrangements
Organizational level




The administrative principles of the classical theorists were useful to managers as small, owner-manager businesses grew into large companies and corporations. The level of coordination and control obtained from application of these principles was necessary for further growth of organizations. Again, it must be emphasized that managerial processes are constantly changing so that managers can cope with the changing nature of society and industry.

Even organizations that are now shifting to new ways of thinking about managerial principles retain fairly extensive use of some classical principles of management. In companies like Levi Strauss, NCR, Allstate, General Motors, and Du Pont, many classical principles still operate, such as specialized jobs, division of labor, established work rules, promotion based on individual merit, and so on. However, these classical approaches serve only as a base from which new refinements of managerial applications are created. These refinements are necessary because the current conditions (of societal values, worker skills, changing technology, and others) are different.

One problem in applying the ideas of classical theory in the United States and other highly developed countries is that such theory is based on the notion of the rational economic person. The assumption that most people are motivated primarily by economic rewards might have been appropriate around 1900. However, with the increase in educational level and changes in people’s aspirations, this assump­tion is true for fewer people today. Also, organizations have grown more complex; and as a result, managers must now rely on more employee creativity and judgment in many jobs.

Another problem with the classical approach is that it assumes that all organizations can be managed according to one set of principles. This assumption is not valid for the modern world. The president of a major university faces different types of problems and demands than does the president of a major appliance manufacturer. They both have to be concerned with satisfying the public and their employees, but their approaches are likely to be different. Current disillusionment with government indicates that the rational bureaucratic approach with rules and regulations and paperwork is not well received. Its inefficiencies and depersonalization make it inappropriate for many of the situations in which organizations exist today.

Having said all this, we nevertheless urge you not to overlook some of the key concepts of classical theory as you progress through this book. Some insights from classical theory provide the basis for many modern managerial practices. Although the classical theorists were not totally correct, they did provide many useful ideas.
 
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NEOCLASSICAL THEORY: HUMAN RELATIONS APPROACH
Neoclassical theory is a group of management ideas that developed throughout the period from the 1920s through the 1950s. The predominant characteristic of these ideas is the emphasis on the social needs, drives, and attitudes of individuals. The neoclassical writers felt that employees could not simply respond “rationally” to rules, chains of authority, and economic incentives. Such writers believed that employees brought their social needs with them to the organization and that, consequently, effective management required a more human-oriented approach. A series of research studies conducted in the mid and late 1920s played an important role in the development of the human relations approach.

Hawthorne Studies
Three researchers, F. J. Roethlisberger, William J. Dickson, and Elton Mayo, conducted studies at the Hawthorne plant of Western Electric Co.14 The researchers felt that if the best work environment could be determined (just as the best way to perform the job could be determined by scientific management), the workers would be more efficient and become less tired. Mayo, the leader of the research effort, and his colleagues felt that it was also important to evaluate the attitudes and reactions of workers to their jobs and their environment.

Illumination Experiment The initial experiment in the Hawthorne studies was an illumination experiment. In this experiment, workers performed their jobs under varying light conditions. As the lights were turned up or down, worker productivity rates were charted. Surprisingly, this study showed that whether lights were turned up or down, employee productivity increased. These researchers thus concluded that some factors other than light were responsible for the increased productivity.

Relay Assembly Test Room Experiments Following the illumination experi­ment, some workers were placed in the relay assembly test room, and various experiments under different work conditions were conducted. As a result of these experiments, about 20,000 interviews were conducted. Employees were asked about the company, the work environment, the type of supervisors, and their interpersonal relationships. From this information, the Hawthorne researchers realized that people were not leaving their feelings, attitudes, and emotions at home. The employees were not at work simply for economic benefit. Other di­mensions also affected their performance.

Bank Wiring Room Experiment A final experiment was conducted in the bank wiring room with a small group of employees. In this study researchers discovered that the production quota set by the company (using scientific management tech­niques) was not the number of units actually produced by the workers. The re­searchers discovered that the workers had developed their own idea of the level of output that was fair. This informal standard of behavior, called a norm, was enforced by the work group to the point that output was restricted. Any worker who produced more than that number was pressured by co-workers to comply with the norm.

These experiments led researchers to two conclusions: (1) strong informal groups exist; (2) noneconomic factors affect employees’ behavior at work. These findings revealed some inadequacies of the rational and structured approaches of classical theorists and the fallacy of viewing all workers as rational and economic beings. As a result of the Hawthorne studies, a social view of employees evolved.

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Social View
The essence of the social view is shown in Figure 2-3. The emphasis on social needs led to managerial strategies for improving the human skills of the supervisor who deals directly with the worker. Human relations programs were developed to train supervisors to become more “human” when dealing with employee problems.

1. Individuals are motivated by social needs.

2. People obtain their sense of identity through interpersonal relationships.

3. Because of industrial progress and routinization of work, work has become dissat­isfying.

4. Employees are more responsive to the social forces of peer groups than to incentives and controls of management.

5. Employees respond to provisions for their social needs and acceptance offered by management.


FIGURE 2-3. The Social View

Because social forces affect work groups, group incentive plans were developed to replace individual incentive plans. Instead of focusing on planning, organizing, directing, and controlling employees, managers emphasized their employees’ feel­ings and attitudes and the effect these might have on productivity and management style.15 According to this theory, if productivity in an accounting department is poor, the manager should look beyond organizational factors (job design, planning, compensation systems). The problem may be that the organization is not meeting individual and group needs. Low productivity might indicate that the employees do not feel committed to the organization, perhaps because the organization is unfeeling and unsupportive, because supervision is too close, or because the jobs have no meaning to the employees’ personal goals and values.

Contributions and Critique of Neoclassical Theory
Management approaches developed from the neoclassical theory were based on a more realistic picture of people at work. The importance of group behavior could no longer be ignored. Managers began placing greater emphasis on the work group and the need for better communication between supervisors and workers. Hence neoclassical approaches are often referred to as human relations approaches.

As the name neoclassical implies, these approaches did not reject all of the classical ideas. However, they evolved in response to subtle changes in the nature of the workforce and an awareness of the need to treat employees with respect for their dignity. Human relations theorists recognized that progress in managerial excellence might be impeded by strict adherence to classical principles. Such principles (for example, piece-rate incentive payments and standardized work rules) were valid in theory, but they sometimes did not work because people did not always act “rationally.” Neoclassical writers believed that treating employees like individuals would allow workers to be integrated fully into organizations and enhance the effectiveness of other managerial procedures. “Treat employees as if they are important” and “Give the workers the feeling of participation” were statements that soon found their way into a manager’s vocabulary.

However, this approach was not totally successful. Suppose your instructor said, “I believe in treating students as if they are important.” The instructor is indicating that he or she does not consider students important but hopes to use “image management” to give the impression of interest. Sooner or later, you would see through such an approach, and you might react negatively toward the instructor.

Similarly, when managers attempted to treat employees as if they were important (without really considering them important), many workers recognized the insincerity. Company-sponsored social activities such as picnics and parties were introduced to promote employee togetherness. Recreational activities, such as the company bowling team, were also supposed to enhance togetherness and group loyalty to the organization. However, many workers saw through this facade. There is a difference between allowing workers to participate in making work-related decisions and letting workers think that they are participating in the company through social and recreational activities. Again, like classical theory, neoclassical theory provided useful insights but was not totally accurate.

Although the human relations approaches of neoclassical theory were very popular management strategies throughout the 1940s and most of the 1950s, the seeds of further development in managerial approaches had been planted by Chester Barnard in his book, The Functions of the Executive, published in 1938. Barnard saw the business organization as a cooperative system with a need to maintain its equilibrium. He stated, “Disturbances of the equilibrium of cooperative systems have come from false ideologies, particularly on the part of those who are leaders or executives in formal organizations.”16 This view had been an influence in the development of neoclassical theory, but it also helped lead to the later development of behavioral science approaches and theories of decision making and organization. In their search for the most effective managerial practices, researchers questioned the unqualified application of these views to all situations.
 
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BEHAVIORAL SCIENCE APPROACH: ORGANIZATIONAL HUMANISM
Organizational humanism was partly a natural evolution from the human relations approach and partly a reaction to the manipulative aspects of human relations. A group of organizational theorists relied upon knowledge from psychology, soci­ology, and anthropology to develop this approach. The philosophy underlying organizational humanism is that individuals need to use all of their capacities and creative skills at work as well as at home. This philosophy is expressed in the works of writers such as Chris Argyris, Douglas McGregor, Abraham Maslow, and Frederick Herzberg.

Self-Actualizing View
Self-actualization refers to reaching one’s ultimate potential through the use of personal skills and talents.17 The organizational humanists believe that allowing employees greater freedom and satisfaction at work is more consistent with human nature than were earlier views. Because self-actualized employees are highly motivated, such changes should produce organizational benefits that cannot be achieved in the bureaucratic organization. The self-actualizing view is summarized in Figure 2-4.

1. Motives fall into categories that can be arranged according to their importance: (a) survival, safety, and security needs; (b) social and relationship needs; (c) ego and self-esteem needs; (d) needs for independence; and (e) self-actualization needs, in the sense of fully using all personal abilities.

2. Employees seek to be mature (self-actualized) on the job and are capable of being so.

3. Employees are primarily self-motivated and self-controlled and react negatively to externally imposed controls.

4. If allowed to become self-actualized, employees will integrate their goals with those of the organization.


FIGURE 2-4. The Self-Actualizing View

Organizational humanists contend that the rational design of organizations leads to highly specialized and routine jobs in which employees cannot use all their creative, motivated potential. The major goal of organizational humanists is to eliminate unnecessary rules, rigidly designed jobs, and inflexible supervisory approaches.

Organizational humanists suggest that the best role for a manager is to challenge employees, develop their decision-making skills, and allow them to seek responsibility. Humanist managers rely on the worker’s internal motivations (desire to grow), whereas classical and neoclassical managers relied on external pressures (social acceptance and organizational pay) to encourage worker performance. If jobs limit employees’ sense of personal achievement and growth, employees will not be satisfied with other incentives. On the other hand, if jobs allow employees’ freedom to achieve self-actualization, they will be motivated and satisfied.

This viewpoint is important in many organizations today. For example, in seeking to encourage innovation, companies such as 3M, Levi Strauss, and others have challenged employees, sought to involve them fully in decision-making activities, and encouraged them to seek responsibility. The employees have responded positively and are making substantial contributions to the organizations in the form of product and manufacturing innovations.

Contributions and Critique of Organizational Humanism
The behavioral approach of the organizational humanists received significant publicity and attention in management literature, especially during the 1970s. Aware ness of and emphasis on human behavior was a major contribution to the evolution of management thought. This approach has significantly affected some employees ­by granting them more freedom in their jobs.

However, the organizational humanists also indicate that organizations should be radically changed so that work is made more satisfying and meaningful. Many, writers have criticized organizational humanism because it suggests that every’ employee seeks self-actualization at work. Although white-collar professionals and managers may desire self-actualization at work, not all workers are the same furthermore, not all professionals and executives have the same motivational need structures. In addition, research results generally do not support the contention of the organizational humanists that an increase in job satisfaction leads to higher productivity.

Although behavioral ideas have proven valuable, perhaps this group of theorists has overlooked the possibility that self-actualization is not desired by all workers in all types of organizations. Companies such as American Express, General Electric, and others do not force all employees to become involved in growth and self-actualizing activities. Rather, they provide a flexible environment where such activities can be engaged in if desired by the individual employee and if it benefits the organization as well.
 
Re: WORST CASE SOME ONE!!!

The management science approach evolved from the application of some of the scientific management techniques of the classical theorists. It developed as the management field matured and as theorists recognized the importance of developing and applying knowledge of both organizational systems and people. Because the complexity of organizational systems creates problems, managers require more and better information to make effective decisions. The management science approach emphasizes research on operations and the use of quantitative techniques to aid managers in making decisions.

A wide variety of mathematical models and quantitative tools for analyzing information have been developed by management scientists. However, management science would be severely limited without the development and wide use of high-speed computers because many quantitative techniques require sophisticated calculations. The size of the problems and the amount of data to be analyzed make computers necessary.

Management Information Systems
The development of management information systems (MIS) is an extension of the management science approach. With the explosive growth of computer technology, more managers can use quantitative tools, spreadsheets, and other software programs for planning and analysis. Especially important has been the widespread introduction of personal computers and computerized workstations in both small and large organizations. Tools such as linear programming, queuing models, and simulation models may be used in managerial decision making. Program evaluation and review technique (PERT), another quantitative aid, is useful for both planning and control. Inventory-control and quality-control tools are necessary in many organizations. Management science techniques are particularly appropriate for complex and unstructured problems.

Critique of Management Science Approach
Management science is an attempt to rationalize and quantify managerial processes. Although this approach has provided important tools for management, the limitations of these tools must be remembered. Not all managerial processes can be rationalized and quantified. For example, when managers deal with subordinates, they find it more difficult to apply quantitative tools. One writer who looked at a broad range of management theories said that management science appeared to be overly preoccupied with mathematical models and with simulating solutions to certain types of problems. Consequently, he said this approach does not represent a true management school of thought.18 Nevertheless, the tools and techniques associated with management science and operations research increasingly are being used in managerial planning, decision making, and controlling activities.
 
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