business planning

MASUNDA M. HIT 210 L2 2015, HARARE INST. OF TECH 1

SCHOOLS OF MANAGEMENT THOUGHT

L2

Schools of management thought


TEXTS

1.Robin S. and Coulter M. (2010), Management, Pearson education, India

2. Jones and George (2009), Contemporary Management,


LEARNING OUTLINE

Study questions What can be learned from classical

management thinking? What ideas were introduced by the human

resource approaches? What is the role of quantitative analysis in

management? What is unique about the systems view and

contingency thinking? What are continuing management themes

of the 21st century?


5

Time Line of Management Thought

11

Major Schools of Management Thought Quantitative management approaches

… Use of mathematical techniques for

management problem solving.

Modern approaches … Systems and contingency views of

organizations.


Classical approaches to managementThe term used to describe the hypotheses of

the scientific management theorists and the general administrative theorists.

Scientific management

Administrative principles

Bureaucratic organization

Scientific management theorists• Fredrick W. Taylor, Frank and Lillian Gilbreth ,

and Henry GanttGeneral administrative theorists

Henri Fayol and Max Weber


MASUNDA M. HIT 210 L2 2015, HARARE INST. OF TECH1–8

Scientific Management Contributors Frederick W. Taylor

The Principles of Scientific Management (1911) Advocated the use of the scientific method to

define the “one best way” for a job to be done Believed that increased efficiency could be

achieved by selecting the right people for the job and training them to do it precisely in the one best way.

To motivate workers, he favored incentive wage plans.

Separated managerial work from operative work.


Scientific Management Contributors

Frank and Lillian Gilbreth Bricklaying efficiency improvements Time and motion studies (therbligs)

Henry Gantt Incentive compensation systems Gantt chart for scheduling work

operations

What can be learned from classical management thinking?

Scientific management (Frederick Taylor) Develop rules of motion, standardized work

implements, and proper working conditions for every job.

Carefully select workers with the right abilities for the job.

Carefully train workers to do the job and provide proper incentives.

Support workers by carefully planning their work and removing obstacles.



Scientific management (the

Gilbreths)

Motion study

Science of reducing a job or task to its

basic physical motions.

Eliminating wasted motions improves

performance.



Administrative principles (Henri Fayol)—rules of management Foresight—to complete plan of action for the

future. Organization—to provide and mobilize

resources to implement the plan. Command—to lead, select, and evaluate

workers to get the best work toward the plan. Coordination—to fit diverse efforts together,

ensure information is shared and problems solved.

Control—to make sure things happen according to plan and to take necessary corrective action.



Administrative principles (Henri Fayol)—key principles of management Scalar chain—there should be a clear and

unbroken line of communication from the top to the bottom of the organization.

Unity of command—each person should receive orders from only one boss.

Unity of direction—one person should be in charge of all activities with the same performance objective.


Henry Fayol First came up with the five basic functions

of management—Planning, Organizing, Staffing, Directing, Communicating, and Controlling

Max Weber Coined “bureaucracy”: the perfect office

Well defined chain of command Clear division of work (job descriptions) Procedures for any situation Impersonality Employment and promotion based on

technical competenceMASUNDA M. HIT 210 L2 2015, HARARE INST. OF TECH 14


Administrative principles (Mary Parker Follett) Groups and human cooperation

Groups are mechanisms through which individuals could combine their talents for a greater good.

Organizations as cooperating “communities” of managers and workers.

Manager’s job is to help people in the organization cooperate and achieve an integration of interests.



Administrative principles (Mary Parker Follett) Forward-looking management insights

Employee ownership creates sense of collective responsibility (precursor of employee ownership, profit sharing, and gain-sharing)

Business problems involve variety of inter-related factors (precursor of systems thinking)

Private profits relative to public good (precursor of managerial ethics and social responsibility)



Bureaucratic organization (Max

Weber)

Bureaucracy

An ideal, intentionally rational, and very

efficient form of organization.

Based on principles of logic, order, and

legitimate authority.


What can be learned from classical management thinking?(Max Weber) Characteristics of

bureaucratic organizations: Clear division of

labor Clear hierarchy of

authority Formal rules and

procedures Impersonality Careers based on

merit

Possible disadvantages of bureaucracy: Excessive

paperwork or “red tape”

Slowness in handling problems

Rigidity in the face of shifting needs

Resistance to change

Employee apathyMASUNDA M. HIT 210 L2 2015, HARARE INST. OF TECH 18

What ideas were introduced by the human resource approaches?

Behavioral management (or human

resource) approaches include: Hawthorne studies

Maslow’s theory of human needs

McGregor’s Theory X and Theory Y

Argyris’s theory of adult personality



Human Resources Approach

Robert Owen Claimed that a concern for employees

was profitable for management and would relieve human misery.

Hugo Munsterberg Created the field of industrial psychology

—the scientific study of individuals at work to maximize their productivity and adjustment.


Hawthorne studies

Initial study examined how economic

incentives and physical conditions affected

worker output.

No consistent relationship found.

“Psychological factors” influenced results.



Maslow’s theory of human needs A need is a physiological or

psychological deficiency a person feels compelled to satisfy.

Need levels Physiological Safety Social Esteem Self-actualization



Hawthorne studies Employee attitudes, interpersonal relations

and group processes Some things satisfied some workers but not

others. People restricted output to adhere to group

norms. Lessons

Social and human concerns as keys to productivity.

Hawthorne effect—people who are singled out for special attention perform as expected.



Maslow’s theory of human needs

Deficit principle

A satisfied need is not a motivator of

behavior.

Progression principle

A need becomes a motivator once the

preceding lower-level need is satisfied.



McGregor’s Theory X assumes that workers: Dislike work Lack ambition Are irresponsible Resist change Prefer to be led

McGregor’s Theory Y assumes that workers are: Willing to work Capable of self

control Willing to accept

responsibility Imaginative and

creative Capable of self-

direction



McGregor’s Theory X and Theory Y Managers create self-fulfilling prophesies. Theory X managers create situations

where workers become dependent and reluctant.

Theory Y managers create situations where workers respond with initiative and high performance. Central to notions of empowerment and

self-management.




Classical management principles and

practices inhibit worker maturation and

are inconsistent with the mature adult

personality.

Management should accommodate the

mature personality.




Management practices consistent with

the mature adult personality:

Increasing task responsibility

Increasing task variety

Using participative decision making


What is the role of quantitative analysis in management? Management science (operations

research) foundations Scientific application of mathematical

techniques to management problems Techniques and applications include:

Mathematical forecasting Inventory modeling Linear programming Queuing theory Network models Simulations


What is the role of quantitative analysis in management? Quantitative analysis today

Use of staff specialists to help managers apply techniques.

Software and hardware developments have expanded potential quantitative applications to managerial problems.

Good judgment and appreciation for human factors must accompany use of quantitative analysis.


What is unique about the systems view and contingency thinking? Systems thinking

System Collection of interrelated parts that function

together to achieve a common purpose.

Subsystem A smaller component of a larger system.

Open systems Organizations that interact with their environments

in the continual process of transforming resource inputs into outputs.


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Contingency Management Theory

2e2e

Approaches depend on the variables of the situations

Draws on all past theories in attempting to analyze and solve problems

Is integrative Summarized as an “it all depends” device Tells managers to look to their

experiences and the past and to consider many options before choosing

Encourages managers to stay flexible

What is unique about the systems view and contingency thinking? Contingency thinking

Contingency perspective - different ways of managing are required in different organizations and different circumstances. Tries to match managerial responses with problems and opportunities unique to different situations. Especially individual or environmental

differences.

No “one best way” to manage. Appropriate way to manage depends on the

situation.MASUNDA M. HIT 210 L2 2015, HARARE INST. OF TECH 33

Lessons from the systems theory

People are key to commitments and performance

What is done must be evaluated quantitatively and qualitatively


What are continuing management themes of the 21st century?

Quality and performance excellence Managers and workers in progressive

organizations are quality conscious. Quality provides competitive advantage.

Total quality management (TQM) Comprehensive approach to continuous

quality improvement for a total organization.

Creates context for the value chain.



Eight attributes of performance excellence: A bias toward action Closeness to the customer Autonomy and entrepreneurship Productivity through people Hands-on and value-driven Sticking to the knitting Simple form and lean staff Simultaneous loose-tight properties



Global awareness Pressure for quality and performance

excellence is created by a highly competitive global economy.

Has fostered increasing interest in new management concepts. Process engineering Virtual organizations Agile factories Network firms

Adoption of Theory Z management practices.


Theory z

Developed by Dr. William Ouchi (1981) Not necessarily an offshoot of McGregor’s

Theory X/Y, Ouchi’s theory blends modern western management approaches with Japanese management techniques

Ironically, many so-called “Japanese” management techniques such as Kaizen are based on American Edward Deming’s 14 Points For Management

Theory Z focuses on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job

This means stable employment, and high employee morale and satisfaction by creating opportunities for collaboration, lateral job movements, and multi-level participation in decision-making



Contemporary businesses must learn to become learning organizations.

Learning organization success depends on: Culture that emphasizes information, teamwork,

empowerment, participation, and leadership.

Leadership that emphasizes motivation and rewards, communication, conflict and negotiation, teamwork, and change management.



In the 21st century managers must

be:

A global strategist

A master of technology

A consummate politician

A leader/motivator


business planning

Documents

management problem

contemporary management

classical management

continuing management

scientific method

standardized work

operative work

contingency thinking