Chapter Two

Traditional and Contemporary Issues and Challenges

Learning Objectives
After studying this chapter, you should be able to:
1. Summarize and evaluate the classical perspective on management, including scientific and administrative management, and note its relevance to contemporary managers. Summarize and evaluate the behavioral perspective on management, including the Hawthorne studies, human relations movement, and organizational behavior, and note its relevance to contemporary managers. Summarize and evaluate the quantitative perspective on management, including management science and operations management, and note its relevance to contemporary managers.

2.

3.

4.

Discuss the systems and contingency approaches to management and explain their potential for integrating the other areas of management.

Case
You are a management consultant and is required to recommend ways to increase the low productivity of Bapcos workers at oil processing department.

How to increase productivity?

Find ways to increase the efficiency of the individual workers and the whole orgnisation Find ways to understand individuals behavior, groups and teams, to motivate them and effectively lead them Find ways to improve the operation, decision making and resource allocation

How to increase productivity?

Find ways to increase the efficiency of the individual workers and the whole orgnisation Find ways to understand individuals behavior, groups and teams, to motivate them and effectively lead them Behavioral Find ways to improve the operation, decision making and resource allocation

Classical

Quantitative

Management Perspective

Classical

Behavioral Management Perspectives

Management Perspectives

Quantitative Management Perspectives

Universal Mgt Perspective: One best way

Management Perspectives
Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling 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

An Integrative Framework of Management Perspectives

Systems Approach Recognition of internal interdependencies Recognition of environmental influences

Contingency Perspective Recognition of the situational nature of management Response to particular characteristics of situation

Universal Management Perspectives

Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling

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

THE MANAGEMENT PERSPECTIVE

THE UNIVERSAL MANAGEMENT PERSPECTIVE

Classical Scientific Management Administrative Management

Behavioral Hawthorn Study The Human Relations Movement Organizational Behavior Quantitative Management Science Operation Management
INTEGRATING PERSPECTIVES FOR MANAGERS

System Approach Contingency Theory

Classical Management Branches

Scientific Management Increasing the efficiency of the individual worker Administrative Management Focuses on managing the total organization

Scientific Management Perspective

Fredrick Taylor

Frank and Lillian Gilbreth

Henry Gantt

Harrington Emerson

Fredrick Taylor
Soldiering Employees deliberately working at a slow pace To increase the efficiency of the individual worker
Redesigned Jobs: Observe, Select, Train , Implement PPS Piecework pay system Any work that is produced above the target level of output will be paid by the piece Rest periods

Frank and Lillian Gilbreth

(Husband and Wife) Industrial engineers Frank Bricklaying Standardization of Materials Procedures to perform the job Result- Increase output by 200% Industrial psychology + Personnel mgt Cheaper by the Dozen

Lillian Both

Henry Gantt
Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling

Henry Gantt A scheduling Devise

Completed Planned 1. Design 2. Purchase Parts 3. Fabricate Bodies 4. Fabricate Frames 5. Build Drive Trains 6. Assemble Carts 7. Test Carts 1 Week 1 2 3 4 Week 2 Week 3 Week 4

5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26

Harrington Emerson
Consultant -1910 Interstate Commerce Commission By using Scientific management railroads could save $1 million a day Advocated job specialization in both managerial and operating jobs.

How would the scientific mgt scholars improve the productivity of workers at Bapco?

Fredrick Taylor

Frank and Lillian Gilbreth

Henry Gantt

Harrington Emerson

How would the following scientific management scholars improve the productivity of workers at Bapco?

Fredrick Taylor

Frank and Lillian Gilbreth

Henry Gantt

Harrington Emerson

Classical Management Branches

Scientific Management Increasing the efficiency of the individual worker Administrative Management Focuses on managing the total organization

Administrative Management
Focuses on managing the total organization

Henry Fayol, Max Weber Chester Barnard Lyndall Urwick

Administrative Management Perspective

Henry Fayol

Max Weber

Chester Bernard

Lyndal Urwick

Henri Fayol
French industrialist

Systematize the
practice of management

Identified managerial
functions

Max Weber
German Sociologist Bureaucratic Structure guidelines for structuring the organization in the most efficient way

Chester Barnard
The Functions of the Executive- book

Subordinates Acceptance of Authority = f (understands it; able to comply with it; views it as appropriate)

Lyndall Urwick
Scientific Mgt + Administrative

Mgt

Advanced our thinking managerial functions and managerial effectiveness

No specific new contributions but rather the integration of the previous theories

Administrative Management Perspective

Henry Fayol

Max Weber

Chester Bernard

Lyndal Urwick

Contributions
+ Foundations

Limitations
- Is it appropriate now

+ Identified processes, skills, functions

- Is it universal

+ mgt valid subject of scientific inquiry

- Is it right to treat employees as tools

The Behavioral Management Perspective Placed emphasis on individual attitudes and behaviors and on group processes and recognized the importance of behavioral processes in the work place.

Branches of Behavioral Mgt Perspective

Hawthorne Studies

The Human Relations Movement Organizational Behavior

Hawthorn Studies
Years 1927-1932 Founder Elton Mayo & Colleagues Place Western Electric

Lighting Experiment Piecework Incentive Pay Interview program

Hawthorn Studies - Findings

Importance of Human Element
Recognition - Feeling important
Belonging to a group relationships

The Human Relations Movement

Proposed that workers respond primarily to the social context of the workplace, including social conditioning, group norms, and interpersonal dynamics Maslows Hierarchy of Need

McGregor Theory X & Y

Maslows Hierarchy of Needs

Self-actualization needs
Esteem needs

Social needs
Safety needs

Physiological needs

Behavioral Theory on How Employees Behave Toward Work - pessimistic

Employees
dislike work. are irresponsible. lack ambition.

resist change.

Another Theory on How Employees Behave Optimistic

Employees are
willing to work. self directed. accept responsibility.

creative.
self-controlled

Organizational Behavior
Psychology, sociology, anthropology, economics, and medicine.

Individual + Group + organizational processes

Stress, motivation, group dynamics, interpersonal conflict, job satisfaction, organizational politics

Contributions
+ Challenged thinking
+ Insights into - motivation - group dynamics - interpersonal processes in

Limitations
- Prediction of human behavior

- Adaptation - Communication

The Quantitative Management Perspective Decision making, mathematical models, use of computers Management Science Operations Management

The Quantitative Management Perspective

Management Science
Focuses specifically on the development of mathematical models (simplified representation of a system, process, or a relationship)

Operations Management
Applies quantitative techniques (mgt science) to management to help the organization produces goods and services more efficiently and to run the operation
Inventory Mgt Linear Programming

Mgt Science and Operations Management

Mgt Science and Operations Management

Mgt Science and Operations Management

BEQ = FC / (TC-VC) Development mathematical equation Application of Mathematical Equation using BEQ to determine the minimum quantity that must be produced to cover all the costs

Contributions
Techniques to assist in decision making
Awareness of complex organizational processes

Limitations
- Not fully able to predict human behavior - Costs vs. other skills - Assumptions

Planning and controlling

Are the three management perspectives contradictory or complimentary

Integrating Perspectives for Managers

A complete understanding of management requires an appreciation of, classical, behavioral, and quantitative approaches. The systems perspectives and

Contingency perspectives

An Integrative Framework of Management Perspectives

Systems Approach Recognition of internal interdependencies Recognition of environmental influences Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling Behavioral Management Perspectives Insights for motivating performance and understanding individual behavior, groups and teams, and leadership Contingency Perspective Recognition of the situational nature of management Response to particular characteristics of situation Quantitative Management Perspectives Techniques for improving decision making, resource allocation, and operations

Effective and efficient management

Copyright Houghton Mifflin Company. All rights reserved.

The Systems Perspective of Organizations

Inputs from
the environment: material inputs, human inputs, financial inputs, and information inputs.

Transform ation
Process: technology, operating systems, administrative systems, and control systems

Outputs
into the environment: products/services, profits/losses, employee behaviors, and information outputs

Feedback

Match the example with the appropriate concept that illustrates it: Open system, Closed System, Subsystem, Synergy, Entropy Hewlett-Packard and Compaq is merger is based on the notion that working together in a cooperative and coordinated fashion will benefit the two companies more than working alone. IN ALBA, a decision that was taken by the production department to lower he quality of the materials used will effect the Finance and marketing departments. There is an autonomy for each department, but decisions of one department affects the others. This is because the departments are -------------.

One of the reasons attributed to the failure of Bahrain Cinema Company in the 80s was that they ignore the effect of the of VCRs (videos) on their demand.
UOB monitors the quality of its services by requiring students to evaluate their instructors and the subject. The main reason attributed to ENRONs failure is overlooking a simple process of checking the money used versus the quota of their brokers.

The System Perspective - Concepts

Open system Closed systems Subsystem Synergy Entropy

Open System

An organizational system that interacts with its environment

Closed System

An organizational system that doesnt interacts with its environment

Subsystem

A system within another broader system

Synergy Synergy two or more subsystems working together may often be more successful then working alone

Entropy

A normal process leading to system decline

Contingency vs. Universals

Universal perspective: tempting to identify one

best way.

Contingency perspective:

depending on
elements in that situation.

Figure 2.5: The Emergence of Modern Management Perspectives

Copyright Houghton Mifflin Company. All rights reserved.

Contemporary Mgt Challenges

Labor shortage Management of diversified workforce Values, goals and beliefs of the new generation workforce Management of change Organizational Structure Information Technology Globalization and its effect Ethics and social responsibility Quality & its importance for competitiveness Service Economy

 Labor Shortage
Advancement in technology Demand for technology-related employees (salaries) Effect on Lower-skills jobs

Management of Diversified Workforce

Differences among people Internationalization factor Difficulty in management

Values, Goals and Beliefs of the New Generation Workforce

Less devoted to long-term career prospects Less to Conformity and uniformity How to attract and motivate Flexibility

 Management of Change
Rapid and constant environment change Change is an opportunity

New Technology
Internet, e-business, e-government, Information technology Investment in technology Employee-privacy Decision-making quality Physical or virtual offices

Organization Structure
Webers bureaucratic structure Now, Flat structure

 Globalization
Role of government in business Behavioral processes vary widely Values and beliefs of Bahraini vs. Japanese employee

Ethics and Social Responsibility

Business scandals Increased contributions to social issues

Quality
Used as a base for competition Quality and productivity

Service Economy
Traditionally, manufacturer Now, half of GDP of USA from service industries