P RINCIPLES OF M ANAGEMENT

CHAPTER 2 The Evolution of Management Thought

When studying management, it is critical that we know where management has been if we are to understand where it is going. Various approaches in the evolution of management thought are discussed relative to the lessons each can teach todays managers. I. THE PRACTICE AND STUDY OF MANAGEMENT The systematic study of management is relatively new, essentially a product of the twentieth century. The actual practice of management has been around for thousands of years. A. Information Overload 1. In early cultures, management was learned by word of mouth and trial and error. 2. However, there was no systematically recorded body of management knowledge. 3. Today there is a wealth of information on management. 4. So much information exists today that it is difficult to impossible to keep abreast of it. B. An Interdisciplinary Field 1. Individuals from many different academic and professional areas have contributed to our knowledge of management. 2. Scholars from many fieldsincluding psychology, sociology, cultural anthropology, mathematics, philosophy, statistics, political science, economics, logistics, computer science, ergonomics, history, and various fields of engineeringhave, at one time or another, been interested in management. C. No Universally Accepted Theory of Management 1. There is no single theory of management that is universally accepted today. 2. This chapter covers five conventional approaches and one modern unconventional perspective. II. THE UNIVERSAL PROCESS APPROACH The __________________________ ____ is the oldest and one of the most popular approaches to management thought. It is also called the universalist or functional approach. There are two main assumptions: Although the purpose of organizations may vary, a _______________ _______________ remains the same across all organizations. This process can be reduced to a set of separate ___________ and related ____________. A. Henri Fayols Universal Management Process 1. Fayols work left a permanent mark on twentieth-century management thinking. 2. Fayol divided the managers job into five functions: Planning, Organizing, Command, Coordination, Control (later was evolved into 8 functions as described in Chapter 1) 3. His fourteen universal principles of management (listed and explained in Table 2.1 in the text) were intended to show managers how to carry out their functional duties. These principles are: g. Remuneration a. Division of work h. Centralization b. Authority i. Scalar chain c. Discipline j. Order d. Unity of command k. Equity e. Unity of direction l. Stability and tenure of personnel f. Subordination of individual m. Initiative interests to the general n. Esprit de corps interest
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4. These functions and principles have withstood the test of time because of their widespread _______________. Lessons from the Universal Process Approach 1. The complex management process can be separated into interdependent areas of responsibility, or functions. 2. Management is a continuous process beginning with planning and ending with controlling. 3. There is a concern that this rigid approach may make management seem more rational and orderly than it really is.

III. THE OPERATIONAL APPROACH The term ______________________________ is a convenient description of the productionoriented area of management dedicated to improving efficiency and cutting waste. It has also been called scientific management, management science, operations research, production management, and operations management. Its underlying purpose is to make person-machine systems work as efficiently as possible. A. Frederick W. Taylors Scientific Management 1. As a factory manager, Taylor was appalled at the industrys unsystematic practices. 2. Taylor sought what he termed a mental revolution in the practice of industrial managementhe was considered the _______________ of scientific management. 3. ______________________________ is the development of performance standards on the basis of systematic observation and experimentation. 4. Experiment was Taylors trademark. 5. Taylor focused on four areas: a. Standardization b. Time and task study c. Systematic selection and training d. Pay incentives: Taylors pay incentive plan included a higher piece rate if the worker produced at or above the standard daily rate. B. Taylors Followers 1. Frank and Lillian Gilbreth were inspired by Taylor to turn _______________ into an exact science. Using motion pictures, they studied and streamlined work motions, paving the way for work simplification. They are best known today as the parents in the humorous book and movie Cheaper by the Dozen, written by two of their twelve children about living in a household where scientific management was applied. 2. Henry L. Gantt refined production control and cost control techniques. a. Variations of Gantts work-scheduling charts are still used today. b. Gantt also emphasized the importance of the _______________ ____________ and urged management to concentrate on _______________ rather than profits. C. The Quality Advocates Todays managers recognize the strategic importance of _______________. In the 1980s, Americans began to realize that quality was the reason for Japans dominance in world markets. As a result, the following quality advocates began to be listened to: 1. Walter A. Shewhart introduced statistical quality control in 1931. 2. Kaoru Ishikawa was a professor at the University of Tokyo who advocated quality before World War II. a. He founded JUSE (the Union of Japanese Scientists and Engineers). b. He focused on prevention and introduced the idea of both internal and external customers. 3. W. Edwards Deming introduced concepts such as ____________________________ and _____________________________ in Japan. His 1986 book, Out of the Crisis, became a bible for Deming disciples. 4. Joseph M. Juran also had a strong influence on Japanese managers.
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a. The Juran Institute helped strongly establish the concept of the internal customer. b. Teamwork, partnerships with suppliers, problem solving, and brainstorming are all Juran trademarks. c. Juran also introduced Pareto analysis, a technique for separating major problems from minor ones (the 80/20 rule). 5. Armand V. Feigenbaum developed the concept of total quality control and focusing on quality improvement throughout an organization. He felt that the _______________ is the one who ultimately determines quality. 6. Philip B. Crosby wrote the 1979 best-seller Quality Is Free, which promoted the concept of _______________, or doing it right the first time. Lessons from the Operational Approach 1. Scientific management was a revolutionary approach, producing dramatic results in the context of the haphazard industrial practices at the time. 2. It created a much-needed emphasis on promoting production efficiency and combating waste. 3. While Taylors work is often considered dehumanizing today, Taylor actually improved working conditions by reducing fatigue and redesigning machines to fit people. 4. Scientific management brought about a new way of thinking_______________ _______________ is the process of transforming raw materials, technology, and human talent into useful goods and services and tends to be broader in scope and application than scientific management.

IV. THE BEHAVIORAL APPROACH This approach has evolved gradually over many years. It recognizes the importance of people in management and believes that successful management depends on the ability to understand and work with a variety of people. A. The Human Relations Movement 1. The ______________________________ was a concerted effort among theorists and practitioners to make managers more sensitive to employee needs. 2. It was supported by three very different historic influences: a. The Threat of Unionization: The movement was a union-avoidance tactic, with the idea that satisfied employees would be less likely to join unions. b. The Hawthorne Studies: Practical behavioral research studies such as these made management aware of the psychological and sociological dynamics of the workplace. c. The Philosophy of Industrial Humanism: A recognition that people were important to productivity. There were three primary proponents: (1). Elton Mayo focused on emotional and cultural factors. He encouraged work that fostered personal and subjective satisfaction. (2). Mary Parker Follett encouraged managers to motivate performance rather than demand it. Cooperation, a spirit of unity, and self-control were keys to productivity. (3). Douglas McGregor created the Theory X/Y philosophy, with Theory X as the traditional assumptions and _______________ stating employees are energetic and creative if given the opportunity. B. Organizational Behavior _____________________________ is a modern approach to management that attempts to determine the causes of human work behavior and translates the results into effective management techniques. C. Lessons from the Behavioral Approach 1. Primarily, the behavioral approach makes it clear to present and future managers that people are the key to productivity.
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2. Negatively, traditional human relations doctrine has been criticized as vague and simplistic. Satisfying employees does not guarantee higher morale and productivity. V. THE SYSTEMS APPROACH A _____________ is a collection of parts operating interdependently to achieve a common purpose. This approach requires a completely different style of thinking. The traditionalists said that the whole can be explained in terms of its parts. Systems theorists assume that the whole is greater than the sum of its parts. The difference is traditional _____________ thinking (outsidein) versus _____________ thinking (inside-out). Systems theorists propound synthetic thinking because management is not practiced in a vacuum. Many organizational and environmental variables affect each other. A. Chester I. Barnards Early Systems Perspective 1. He wrote the classic The Functions of the Executive in 1938. In it, he characterized all organizations as cooperative systems. 2. Barnard felt that an organization did not exist if three principal elements__________ _______________, _____________________________, and ______________ were not present and working interdependently (see Figure 2.4). He felt _______________ was the energizing force between willingness to serve and the organizations common purpose. B. General Systems Theory 1. ______________________________ is an interdisciplinary area of study based on the assumption that everything is part of a larger, interdependent arrangement. 2. Ludwig von Bertalanffy, a biologist, was the founder of general systems theory and determined in order to understand an organized whole, we must know the parts and the relations between them. 3. Levels of SystemsIdentifying hierarchies of systems, ranging from very specific to very general, has helped make general systems theory more concrete. 4. Closed versus Open Systems a. A _______________ is a self-sufficient entity. b. An _______________ depends on the surrounding environment for survival. c. Systems can be categorized as open or closed by evaluating the amount of interaction they have with the outside environment. C. New Directions in Systems Thinking 1. _____________________________________________ portrays the organization as a living and thinking open system. a. Organizations rely on _______________ to adjust to changing environmental conditions, and they learn from experience. b. Organizations engage in complex mental processes such as anticipating, perceiving, envisioning, problem solving, and remembering. c. When organizational learning becomes a strategic initiative to identify and fully exploit valuable ideas from both inside and outside the organization, a ______________________________ program exists. 2. Chaos Theory and Complex Adaptive Systems a. Chaos Theory was developed in the 1960s and 1970s by mathematicians Edward Lorenz and James Yorke. b. The challenge for those in the emerging field known as complex adaptive systems theory is the notion that every complex system has rules that govern the seemingly random patterns and that those rules can be discovered, given the perspective of time. c. With this theory, managers are challenged to be more flexible and adaptive than in the past. d. Chaos theory and complex adaptive systems theory are launching pads for new and better management models, not final answers.
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Lessons from the Systems Approach a. Managers have a greater appreciation for the importance of seeing the whole picture. b. Open-systems thinking encourages a constant awareness of both internal and external realities. c. The systems approach also works to integrate various management theories. d. Critics say the systems approach is nice in theory but short on facts and practical advice.

VI. THE CONTINGENCY APPROACH The ______________________________ is an effort to determine through research which managerial practices and techniques are appropriate in specific situations. Different situations require different managerial responses. This approach is particularly appropriate in intercultural situations. In real-life management, the success of any given technique is dictated by the situation. A. Contingency Characteristics 1. Contingency thinking is viewed as a workable compromise between the systems approach and a purely situational perspective. (Figure 2.6 illustrates this.) 2. Three characteristics of the contingency approach are: a. An open-system perspective b. A practical research orientation c. A multivariate approach____________________________ is a research technique used to determine how a combination of variables interacts to cause a particular outcome. B. Lessons from the Contingency Approach 1. The contingency approach is a helpful addition to management thought because it emphasizes situational appropriateness. 2. Contingency thinking is a practical extension of the systems approach. 3. Critics say contingency theory creates the impression that the organization is a captive of its environment, making attempts to manage it useless. 4. The contingency approach is still undeveloped. Its final impact remains to be seen. VII. I. THE ERA OF MANAGEMENT BY BEST-SELLER: PROCEED WITH CAUTION Over the last 25 years or so, the field of management moved from the classroom into the mainstream. ____________________ fathered this trend, becoming the first management guru who appealed to both academics and practicing managers. In 1982, the popularization of management shifted into high gear when Thomas J. Peters and Robert H. Waterman, Jr. published In Search of Excellence. Others followed (see Table 2.4) and the popular appeal of management grew. Certain academics worried about the instant gurus and their best sellers encouraging shoddy research and simplistic thinking. A. Whats Wrong with Management by Best-Seller? Top managers will apply concepts learned in a book to an organization with no diagnosis or assessment to determine the real organizational problems. This is not the fault of the management books that typically contain some really good ideas. Rather it is the hurried and haphazard application of those ideas that causes the problems. B. How to Avoid the Quick-Fix Mentality In a follow-up study of the excellent companies outlined in Peters and Watermans In Search of Excellence, companies that satisfied all of the excellence criteria turned out to be no more effective than a random sample of Fortune 1000 companies. To avoid the quick fix mentality, managers should: 1. Remain current with literature in the field, particularly with journals that translate research into practice.
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Chapter 2 Notes

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Ensure that concepts applied are based on science or, at least, some form of rigorous documentation, rather than purely on advocacy. 3. Be willing to examine and implement new concepts, but first do so using pilot tests with small units. 4. Be skeptical when solutions are offered; analyze them thoroughly. 5. Constantly anticipate the effects of current actions and events on future results. Putting What You Have Learned to Work To put this historical overview into proper perspective, this chapter provides a useful conceptual framework for students but generally does not carry over to the practice of management. Managers are pragmatists; they use whatever works, generally a mixed bag approach.

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Chapter 2 Notes

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