Traditional and Contemporary Issues in Management Theory

Traditional and
Contemporary Issues and

Challenges
Chapter 02
City University of Science and Information Technology
Faisal Ghani
The Role of Theory and History in

Management
The Importance of Theory and History
Why Theory: A theory is a conceptual
framework for organizing knowledge and
provide outline for action.
Why History: Awareness and understanding
of important historical developments are
also important to present managers.
Understanding the historical context of
management provides a sense of heritage
and can help managers avoid the mistakes of
others.
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Traditional and Contemporary
Faisal Ghani

Management
Precursors of Management Theory
Management in Antiquity
Early Management Pioneers
Chapter 02
Robert Own (1771-1858)

Employee Welfare
British Industrialist and Reformer
Recognized the importance of human
resource
Better working conditions
High minimum working age
Meals for employees
Reduce work hours
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Management
Early Management Pioneers

Charles Babbage (1792-1871)
English Mathematician
Efficiency of production
Division of labor
Profit sharing plan
On the Economy of Machinery and
Manufactures
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Management
Other Management Pioneers

Andrew Ure was the 1st professor of
teaching management in Glasgow in 17th
century
Charles Dupin of France
Daniel McCallum published 1st
Organizational Chart
Henry Poor wrote about management
efficiency in the railroad industry in 19 th
century
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The Classical Management

Prospective
Classical Management Prospective
consists of two distinct branches
scientific management and administrative
management.
Scientific Management is an approach
of management concerned with improving
the performance of individual workers.
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Prospective
Scientific Management
Frederick W. Taylor (1856-1915)

Foreman at the Midvale Steel Company in
Philadelphia. He observed what he called
Soldiering (employees deliberately working
at a slow pace). He determined that:
Piecework pay system
Each employee should be producing get
paid accordingly
Rest periods to reduce fatigue
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Prospective
Frederick W. Taylor (1856-1915) suggested 4 basic

steps in scientific management perspective.
Develop a science
for each element
of the job to
replace old
methods.
Step 1
Scientifically selectSupervise employeesContinue to plan the

employees and
to make sure they work, but use worke
then train them
follow the prescribe to get the work don
to do the job as
methods for
described in step 1 performing their jobs.
Step 2
Step 3
Step 4
Steps in Scientific Management

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Prospective
Frank Gilbreth (1868-1924)
Lillian Gilbreth (1878-1972)
Husband and a Wife
His most important contribution was to the
craft of bricklaying. He developed techniques
which brought 200% increase in work
performance.
Book and movie Cheaper by a Dozen
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Prospective
Henry Gantt (1861-1919)
He developed a Gantt Chart for scheduling
work for workers. He also supported
Taylor work of pay system.
Harrington Emerson (1853-1931)
He was a strong advocate of specialized
management role in the organization.
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Prospective
Classical Management Prospective
scientific management and administrative
management.
Administrative Management is an
approach to management that focuses
managing the total organization.
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Prospective
Administrative Management
Henry Fayol (1841-1925)
French Industrialist
His book General and Industrial Management
translated in English in 1930.
Identified managerial functions of planning,
organizing, leading and controlling.
He systemized the practice of management
to provide guidance to managers.
He gave 14 effective points of management
practice.
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Prospective
1.
2.
3.
4.
5.
6.
7.
Henry Fayol (1841-1925)
Division of labor
Authority
Discipline
Unity of command
Unity of direction
Subordination of the
individuals to the
common good
Remuneration
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8.
9.
10.
11.
12.
13.
14.
Centralization
Scalar chain
Order
Equity
Stability
Initiative
Esprit de corps
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Prospective
Division of Labor: A high degree of
specialization should result in efficiency.
2. Authority: Authority is needed to carry out
managerial responsibilities. Formal and Personal
Authority.
3. Discipline: People in the organization must
respect the rules that govern the organization.
4. Unity of Command: Each subordinate should
report to one and only one superior.
5. Unity of Direction: Similar activities in an
organization should be grouped together under
one manager.
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1.
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Prospective
6.
7.
8.
9.
Subordination of the Individuals to the

Common Good: Interests of individuals should
not be placed before the goals of the overall
organization.
Remuneration: Compensation should be fair
both to employees and to the organization.
Centralization: Power and authority should be
concentrated at the upper levels of the
organization as much as possible.
Scalar Chain: A chain of authority should
extend from the top to the bottom of the
organization and should be followed all the time.
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Prospective
Order: Human and material resources should
be coordinated so that they are in the required
place at the required time.
11. Equity: Mangers should be kind and fair when
dealing with subordinates.
12. Stability: High turnover of the employees
should be avoided.
13. Initiative: Subordinates should have the
freedom to take initiate.
14. Esprit de Corps: Teamwork, team spirit, and
sense of unity and togetherness should be
fostered and maintained.
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10.
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Prospective
Lyndall Urwick (1891-1983)
Planning, organizing and controlling
Max Weber (1864-1920)
German sociologist
Worked on bureaucracy
Chester Barnard (1886-1961)
Acceptance
of authority (He believed that order

is accepted if the subordinate understands it, is
able to comply with it, and views it as
appropriate.)
Book The Functions of the Executive
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The Behavior Management

Perspective
Behavior Management Perspective
emphasizes individual attitudes and
behaviors and group process.
Psychological practices in the industry
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Perspective
Hugo Munsterberg (1863-1916) was a

German psychologist, is known as father of
industrial psychology.
His book Psychology and Industrial
Efficiency was translated in English in
1892.
He believed that psychologists could
make valuable contribution to managers
in the area of section and motivation.
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Perspective
Mary Parker Follett (1968-1933) worked

during the Scientific Management era.
She appreciated the need to understand
the role of behavior in organization.
Her special interest was adult education
and vocational guidance.
She believed that organizations should be
more democratic in accommodating
employees and managers.
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Perspective
The Hawthorne Studies
Elton Mayo faculty member and

consultant at Harvard.
Illumination Changed (Research
conducted at Western Electrics
Hawthorne Plant 1927-1932)
Incentive pay plan for telephone
exchange
Rate busters
Chiselers
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Perspective
The Human Relations Movement

The Human Relations Movement argued that
workers respond primarily to the social context
of the workplace including social conditioning,
group norms, and interpersonal dynamics.
Abraham Maslow (1908-1970) suggested
that people are motivated by the hierarchy of
needs including monetary incentives and social
acceptance.
Douglas McGregor (1906-1964) presented
Theory X and Theory Y concepts.
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Perspective

Douglas McGregor (1906-1964) presented
Theory X and Theory Y concepts.
Theory X: A pessimistic and negative view of
workers consistent with the view of scientific
management.
Theory Y: A positive view or workers; it
represents the assumptions that human
relations advocates make.
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Perspective
McGregor Approach of Theory X & Y

Theory X
1.People do not like work and try to avoid
it.
2.Managers have to control, direct, force
and threaten employees to get them to
work toward organization's goal.
3.People prefer to be directed, to avoid
responsibility, to want security; they have
little ambition.
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Perspective
McGregor Approach of Theory X & Y

Theory Y
1. Work is a natural part of workers life.
2. People are motivated and committed to
objectives.
3. Committed to goals to the degree that they get
personal reward.
4. Under favorable conditions they accept and seek
responsibilities.
5. People have the capacity to be innovative in
solving problems.
6. People are bright but under most conditions
their potentials are underutilized
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Perspective
The Emergence of Organizational Behavior

A contemporary (modern) behavioral perspective on
management that takes a holistic view of behavior by
addressing individual, group and organization
processes.
Organizational behavior is based on:
Psychology
Sociology
Anthropology
Economics
Job satisfaction, stress, motivation, leadership, group dynamics,
organizational politics, interpersonal conflicts, and design and
structure of organization.
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The Quantitative Management

Perspective
Quantitative Management Perspective is

an approach to management in which
quantitative techniques are applied to
management.
Quantitative management perspective
focuses on:
decision making
economic effectiveness
mathematical models and
the use of computers.
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The Quantitative Management

Perspective
Quantitative Management Perspective

management science and operations
management.
Management Science focuses specifically on
the development of mathematical models. (e.g.
how many tellers on duty for how long,
collision damage to cars)
Operations Management is concerned with
helping the organization more efficiently
produce its product and services. (e.g. flight
schedules, shipping routs etc.)
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Integrating Perspective for

Managers
Output into the

Input from the
Transformation
environment:
environment:
process: technology,
products/ services,
material inputs,
operating systems,
profits/ losses,
human inputs,
Administrative
employees behavior
financial inputs, andsystems, and
and
information inputs control systems
information output
Feedback
The Systems Perspective of

Organizations
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Managers
The Systems Perspective
System: An interrelated set of elements functioning

as a whole.
Open System: A system that interacts with its
environment.
Closed System: A system that does not interact with
its environment.
Subsystems are systems within a broader system.
Synergy is when two subsystems working together
produce more then the total of what they might
produce if working alone.
Entropy is a normal process leading to system
decline. (ignoring feedback)
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Managers
The Contingency Perspective is an

approach to management that suggest
that appropriate managerial behavior in a
given situation depends, or is contingent
on, a wide variety of elements.
Each organization is unique.
Every human recourse has different
approach to work. (e.g. money, status,
social acceptance etc.)
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An Integrative Framework
Systems Approach
Recognition of internal
interdependencies
Recognition of
environmental influences
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling
Contingency Perspective
Recognition of the situational
nature of management
Response to particular
characteristics of situation
Behavioral
Management
Perspectives
Insights for motivating performance
and understanding
individual behavior,
groups and teams,
and leadership
Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations
Effective and efficient management
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Contemporary Management Issues and

Challenges
Contemporary Applied Perspective
Thomas Peter and Robert Waterman
In Search of Excellence
William Ouchi (1981)
Theory Z
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Contemporary Management Issues and

Challenges
Contemporary Applied Perspective
William Ouchi (1981) Theory Z
1.
2.
3.
4.
5.
6.
7.
An attempt to integrate common business

practices in the US and Japan into a middleground framework.
Length of employment
Model of decision making
Location of responsibility
Speed of evaluation and promotion
Mechanism of control
Specialization of career path
Nature of concern for the employees
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Contemporary Management Issues

and Challenges
Contemporary Management
Challenges include:
Globalization of business
Quality and productivity
Downsizing and cutbacks
Ownership issues
Ethics and social responsibilities
Work-force diversity
Chapter 02
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Traditional and Contemporary Issues in Management Theory

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Contemporary Issues and

City University of Science and Information Technology

The Role of Theory and History in