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MANAGEMENT TOOLS & PRACTICE READINGS PART 1

MANAGEMENT TOOLS & PRACTICE – READINGS, PART 1

Sources: Robert C. Appleby (1991): Modern Business Administration. Pitman &Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London.

Selected & elaborated by [email protected], for SZE, Fall Semester, 2002

Contents

Management Theories.................................................................................2Management - a universal process?.....................................................................................2Development of Management Thought...............................................................................2Early Influences.................................................................................................................3

Ancient Records..........................................................................................................3Thomas More..............................................................................................................4Charles Babbage..........................................................................................................4

Classical Theories – Administrative & Scientific Management...........................................4Administrative Management..............................................................................................4

Henri Fayol.................................................................................................................4Scientific Management.......................................................................................................7

F.W. Taylor (1856-1917).............................................................................................7F. Gilbreth (1868-1924)...............................................................................................9H.L. Gantt (1861-1919)...............................................................................................9H. Emerson (1853-1931).............................................................................................9

Bureaucracy.......................................................................................................................9Max Weber................................................................................................................10

Human Relations..............................................................................................................11Elton Mayo...............................................................................................................11

Management Science School............................................................................................12Systems Approach To Management..................................................................................13

Norbert Weiner – Cybernetics (1948).........................................................................13Organization As A Complex System of People, Tasks & Technology........................15

Contingency Approach to Management............................................................................16Pugh (U.K.), Lawrence & Lorsch (USA)...................................................................16

SUMMARY ABOUT MOST IMPORTANT THEORISTS..................................17

MANAGING CHANGE.................................................................................19Rosabeth Moss Kanter.....................................................................................................19Resistance to change........................................................................................................20Driving forces to bring about change – Peters & Waterman..............................................21

SZE Department of Management, October, 2002 1


MANAGEMENT THEORIES

MANAGEMENT - A UNIVERSAL PROCESS?

It was previously noted that a suitable environment is desirable in order to apply the principles of management effectively. Environments differ, and it has to be considered whether management prob-lems vary with the environment and whether management skills can be effectively transferred. A point worth further thought is that in privately owned and capitalistic enterprises, which have reasonable freedom from government control and influence, managers are free to make the basic decisions neces-sary for profitable operations and where the risk of wrong decisions is accepted by owners and man-agement. The profit motive and free competition is the system now largely in operation and this book is based upon these assumptions. It can be realized that, where government influence increases, man-agers are less free to make decisions and many principles may be affected.1

If one agrees that management is a universal process, i.e. a fundamental process with universal charac-teristics and principles, it appears that management skills are transferable, and a manager can success-fully apply his knowledge and skill in a wide variety of industries. It implies that general principles are at work and that detailed specialist work in the various businesses can later be absorbed. It then appears to follow that all types of organizations can benefit from such universality, even non-profit-making concerns.

P.F. Drucker holds the opposite view. He considers that management skill and experience, as such, cannot be applied to the running of different institutions, as the main objective of business is profit, consistent with its security, and stability. This differs from a non-business organization, whose offi -cers do not have the responsibility for producing goods and services or maintaining wealth-producing resources.

Ernest Dale is another who does not agree with this idea of universality if one considers this to be a theory of universal principles applicable in every field. He does not believe any one person could be a good administrator in academic, business, military or religious concerns, as the underlying philosophy in each constitution is so varied in nature and it is not possible for one person to know so much.

It appears to the writer that all resources needed by organizations are scarce and even non-business or-ganizations must allocate men, materials and equipment, time and money to varying needs and aims. This can be done only by managers using their skill and knowledge and to this extent it seems that management skills are transferable.2

DEVELOPMENT OF MANAGEMENT THOUGHT

Management is an applied technique and is closely related to many allied fields, e.g. economics. Dis-ciplines devoted to studying people, e.g. psychology, sociology and political science have grown and generated an expansion of management knowledge. The development of management thought can, for convenience, be considered to comprise four main periods - early influences, scientific management movement, human relations movement, and, modern influences, e.g. revisionist movement. 3

1 Robert C. Appleby (1991): Modern Business Administration. Pitman2 Robert C. Appleby (1991): Modern Business Administration. Pitman3 Robert C. Appleby (1991): Modern Business Administration. Pitman



The theorists who have contributed to our understanding of management have included practical man-agers as well as social scientists. The contribution of the practical managers has been to reflect on, and theorize about, their own experiences in management with the idea of producing a set of principles of management applicable in a wide variety of situations. In practice these theorists have applied their principles to the structure of organizations rather than to other aspects, such as people in organiza-tions. The label which has been ascribed to these theorists is ‘classical’ or, in some cases, ‘scientific managers’. Their approach has been described as prescriptive i.e. suggesting what is good for organi-zation.4

The social scientists, by contrast, have been academics, whose starting point has been research into human behavior with the intention of first describing, and subsequently predicting, behavior in orga-nizations. The earliest social scientists concentrated their attentions on the motivation and behavior of individuals and groups in the work situation. They were particularly interested in social relationships and have been called the Human Relations movement. Their ideas were followed up by the so-called neo-Human Relations School, composed mainly of social psychologists. Modern theorists have taken a more comprehensive view of people in organizations. Their studies have looked at the various inter-actions between people and their environment with the aim of first diagnosing and subsequently pre-dicting behavior in given situations. This approach has been labeled the ‘contingency’ approach to management.5

There are many writers on management subjects and a great volume of interesting material is being published. While many of the ideas may be valid for the particular survey, it does not mean that the idea can be used or introduced in any organization.

There are many reasons for this, e.g. the statistical base may be suspect, the organization studied, the nationality, etc., may produce different results in a different environment. So findings in one area or country may not necessarily be valid for other areas or countries. Points to consider are:

the age of those in the survey - older persons have different ideas, e.g. on job security; the age of the survey - many important writings, e.g. those of Fayol, were published many years

ago; are they therefore still relevant today? changes in the law since the date of the original research may affect conclusions drawn, e.g. atti-

tudes and practices changed after the 1975 Employee Protection Act; work done in one country may not be the same as in another country with different characteristics; surveys based upon women may not produce the same results as if based on men.

Other points to note before deciding to introduce new ideas into an organization are: is the period in question a boom or slump, is it a large manufacturing company or a small service company; would Hertzberg's works on accountants and engineers apply equally to other professional areas?6

EARLY INFLUENCES

Ancient Records

Ancient records in China and Greece indicate the importance of organization and administration, but do not give much insight into the principles of management. Outstanding scholars have referred to management activities in the running of city states and empires.

The administration of the Roman Empire was a complex job. The Romans effectively used many ba-sic management ideas, e.g. scalar principle and delegation of authority.

4 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London5 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London6 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London



In the period 1400 to 1450, merchants in Venice, Italy, operated various types of business organiza-tion, e.g. partnerships, trust and holding companies. Control emerged in the form of a double-entry book-keeping system and related documentation and records (Lucia Paccioli). In addition there was standardization of material and systems of inventory control.

Thomas More

Concepts of the ideal state were considered by many 16th century writers. In Sir Thomas More's Utopia, for example, his comments upon the reform of the management of Britain were radical. An Italian, Niccolo Machiavelli of Florence, was a good writer and was sent on assignments at home and abroad where he observed governments and men in action. His best known work, The Prince, was dis-tilled from his writing of The Discourses. The basic work in The Prince was not original, but his ap-proach was forthright and alarming to rulers at that time. Some of his ideas are relevant today, e.g. the need to rely on the consent of the majority of the people. The object of writing The Prince was to as-sist a young prince in acquiring techniques of leadership. He suggested that he should inspire people to greater achievement, offer rewards and incentives and take advantage of all opportunities. He stressed that survival was the main objective of any organization and no matter what measures were taken to achieve this end, they should be taken. The end justifies the means.

Charles Babbage

In a much later period, Charles Babbage (1792-1871), who was a professor of mathematics at Cam-bridge University, recognized that science and mathematics could be applied to the operation of facto-ries and also that more detailed cost measurements were needed. He also developed a calculating ma-chine, but lack of suitable materials made it difficult for him to make many refinements to it.7

CLASSICAL THEORIES – ADMINISTRATIVE & SCIENTIFIC MANAGEMENT

The classical approach to management was primarily concerned with the structure and activities of formal, or official, organization. Issues such as the division of work, the establishment of an hierarchy of authority, and the span of control were seen to be of the utmost importance in the achievement of an effective organization. The two greatest exponents of classical theories were undoubtedly Henri Fayol (1841-1925), and F. W. Taylor (1856-1915). Between them these two practising managers laid the foundations of ideas about the organization of people at work and the organization of work itself. At first these ideas were developed separately. Fayol in France, and Taylor in the United States. By the 1930’s their work was being promoted and developed by writers such as L. F. Urwick and E. F. L. Brech on both sides of the Atlantic.8 Lyndall F. Urwick and E. F. L. Brech adapted and extended clas-sical ideas in the period after the Second World War.

ADMINISTRATIVE MANAGEMENT

Henri Fayol

Fayol was a celebrated French industrialist and theorist, a qualified mining engineer and managing di-rector of a large French company. He spent his entire working life with the same company, rising to Managing Director at the age of 47 and only retiring after his seventy-seventh birthday! Under his leadership the Company grew and prospered despite its near-bankrupt state when he took over. His entrepreneurial successes won him considerable fame and popularity, and when, in 1916, he published his major work on management, he ensured himself a place in the annals of industrial history.9

7 Robert C. Appleby (1991): Modern Business Administration. Pitman8 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London9 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London



A year after the death of Taylor he published General and Industrial Management. Fayol, unlike Tay-lor, started in management and attempted to develop a science of administration for management. He believed that there was a universal science of management applicable to 'commerce, industry, politics, religion, war or philanthropy'. He was one of the first practising managers to draw up a list of man-agement principles.

Fayol thought principles would be useful to all types of managers, but he did not consider that a man-ager needs anything more than a knowledge of management principles in order manage successfully. At higher levels he said managers depended less upon technical knowledge of what they were manag-ing and more on a knowledge of administration.

Fayol worked independently in France during the period that scientific management was developing in the USA. He trained as an engineer but realized that management of an enterprise required skills other than those he had studied. He emphasized the role of administrative management and concluded that all activities that occur in business organizations could be divided into six main groups.

(1) Technical (production, manufacturing).(2) Commercial (buying, selling, exchange).(3) Financial (obtaining and using capital).(4) Security (protection of property and persons).(5) Accounting (balance sheet, stocktaking, statistics, costing).(6) Managerial (planning, organizing, commanding, co-ordinating, controlling).

To manage, says Fayol, is to forecast and plan, to organize, to command, to coordinate and to control. He sees forecasting and planning as looking to the future and drawing up a plan of action. Organizing is seen in structural terms. Commanding is described as ‘maintaining activity among the personnel’. Coordinating is seen as essentially a unifying activity. Controlling means ensuring that things happen in accordance with established policies and practice. It is important to note that Fayol does not see managerial activities as exclusively belonging to the management. Such activities are part and parcel of the total activities of an undertaking. Having said this, it is equally important to point out that Fayol’s general principles of management take a perspective which essentially looks at organizations from the top downwards. Nevertheless, they do have the merit of taking a comprehensive view of the role of management in organizations. Thus, Fayol’s analysis has more far-reaching implications than F. W. Taylor’s ideas on scientific management, which are centered on the shop floor.10

He concluded that the six groups of activities mentioned above are interdependent and that it is the role of management to ensure all six activities work smoothly to achieve the goals of an enterprise.

Fayol's main contribution was the idea that management was not an inborn talent but a skill that could be taught. He created a system of ideas that could be applied to all areas of management and laid down basic rules for managing large organizations. Fayol’s ideas have been adopted in one way or an-other all over the world!

The General Principles of Management, by H. Fayol

In his book Fayol lists fourteen so-called ‘principles of management’. These are the precepts which he applied the most frequently during his working life. He emphasizes that these principles are not abso-lutes but are capable of adaptation according to need. He does not claim that his list is exhaustive, but only that it served him well in the past. The fourteen items listed below are given in the order set out by Fayol. The comments are a summary of his own:

Division of work: Reduces the span of attention or effort for any one person or group. Develops practice and familiarity.

Authority: The right to give orders. Should not be considered without reference to responsibility.

10 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London



Discipline: Outward marks of respect in accordance with formal or informal agreements between firm and its employees.

Unity of command: One man one superior! Unity of direction: One head and one plan for a group of activities with the same objective. Subordination of individual interests to the general interest: The interests of one individual or

one group should not prevail over the general good. This is a difficult area of management. Remuneration: Pay should be fair to both the employee and the firm. Centralization: Is always present to a greater or lesser extent, depending on the size of company

and quality of its managers. Scalar chain: The line of authority from top to bottom of the organization. Order: A place for everything and everything in its place; the right man in the right place. Equity: A combination of kindliness and justice towards employees. Stability of tenure of personnel: Employees need to be given time to settle into their jobs, even

though this may be a lengthy period in the case of managers. Initiative: Within the limits of authority and discipline, all levels of staff should be encouraged to

show initiative. Esprit de corps: Harmony is a great strength to an organization; teamwork should be encouraged.

Issues such as individual versus general interests, remuneration and equity, are considered very much from the point of view of a paternalistic management. Today, questions concerning fairness or the bona fide conflict of interests between groups, have to be worked out jointly between management and organized labor, often with third party involvement by the State.

Although emphasizing the hierarchical aspects of the business enterprise, Fayol is well aware of the need to avoid an excessively mechanistic approach towards employees. Thus references to Initiative and Esprit de corps indicate his sensitivity to people’s needs as individuals and as groups. Such issues are of major interest to theorists today, the key difference being that whereas Fayol saw these issues in the context of a rational organization structure, the modern organization development specialist sees them in terms of adapting structures and changing people’s behavior to achieve the best fit between the organization and its customers.

What Fayol did achieve was the first real attempt to produce a theory of management based on a num-ber of principles which could be passed on to others. Many of these principles have been absorbed into modern organizations. Their effect on organizational effectiveness has been subject to increasing criticism over the last decade; mainly because such principles were not designed to cope with condi-tions of rapid change and with issues such as employee participation in the decision-making processes of organizations.11

SCIENTIFIC MANAGEMENT

In the years after 1900 conventional management practices were found to be inadequate to meet de-mands from the changing economic, social and technological environment. A few pioneers examined causes of inefficiency and experimented to try to find more efficient methods and procedures for con-trol. From these basic experiments a system of management thought developed which came to be known as scientific management.12

The method was to investigate every operating problem and try to determine the 'best way' to solve the problems, using scientific methods of research. The concept involved a way of thinking about management.

Among the pioneers of ‘Scientific Management’, especially should be mentioned F. W. Taylor, Frank 11 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London12 Robert C. Appleby (1991): Modern Business Administration. Pitman



and Lilian Gilbreth and H. Gantt.

F.W. Taylor (1856-1917)

Frederick Winslow Taylor was one of the principal people to be associated with this movement. Like Fayol, he was one of the early practical manager-theorists. He was from a middle-class background and worked his way to a high position in an American steel firm; most of his work was involved in experiments to find the 'best method' of doing jobs. He spent the greater part of his life working on the problems of achieving greater efficiency on the shop-floor. The solutions he came up with were based directly on his own experience at work, initially as a shop-floor worker himself and later as a man-ager. His career began as an apprentice in engineering. Having served his time, however, he moved to the Midvale Steel Company, where, in the course of eleven years, he rose from laborer to shop super -intendent. It was during this time that Taylor’s ideas of ‘scientific management’ were born. In 1889 he left Midvale to work for the Bethlehem Steel Company, where he consolidated his ideas and con-ducted some of his most famous experiments in improving labor productivity.13

In 1911, he published his book Principles of Scientific Management. He spoke on the subject at a con-ference and stressed that there were mistaken tendencies in uninformed people to grasp at some of the new techniques and then expect these techniques to solve management problems. He warned them against confusing techniques with aims. This comment is surely very relevant today, when many more new techniques are being introduced, e.g. linear programming. The present student of management should consider whether some people are not again confusing techniques with aims. The following principles were suggested by him to guide management:

each worker should have a large, clearly defined, daily task; standard conditions are needed to ensure the task is more easily accomplished; high payment should be made for successful completion of tasks. Workers should suffer loss

when they fail to meet the standards laid down.14

Taylor listed 'new duties' for management. These were:

the development of a true science; the scientific selection, education and development of workmen; friendly, close co-operation, between management and workers.

A brief summary of the factors he emphasized would cover the need for time and motion study, effec-tive control over performance by the use of the exception principle, the definition of responsibility and effective selection and training of personnel.15 After his death, his major works were collected to-gether and published as ‘Scientific Management’ in 1947. He did not meet Henri Fayol and it is possi-ble that he did not know of Fayol’s analysis of management.16

The Setting for Scientific Management – by Taylor

The last twenty years or so of the nineteenth century were a time for facing up to the often ugly reali -ties of factory life. From the employers’ point of view, efficiency of working methods was the domi-nant issue. The gathering pace of the industrial revolution in the Western world had given rise to new factories, new plant and machinery; labor was plentiful. The problem was how to organize all these el-ements into efficient and profitable operations.17

It was against this background that Taylor developed his ideas. He was passionately interested in the efficiency of working methods. At an early stage he realized that the key to such problems lay in the

13 Robert C. Appleby (1991): Modern Business Administration. Pitman14 Robert C. Appleby (1991): Modern Business Administration. Pitman15 Robert C. Appleby (1991): Modern Business Administration. Pitman16 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London17 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London



systematic analysis of work. Experience, both as a worker and as a manager, had convinced him that few, if any, workers put more than the minimal effort into their daily work. He described this ten-dency as ‘soldiering’, which he sub-divided into ‘natural’ soldiering i.e. man’s natural tendency to take things easy, and ‘systematic’ soldiering i.e. the deliberate and organized restriction of the work-rate by the employees. The reasons for soldiering appeared to Taylor to arise from three issues:

Fear of unemployment Fluctuations in the earnings from piece-rate systems Rule-of-thumb methods permitted by management.

Taylor’s answers to these issues was to practice “scientific management”.

The Principles of Scientific Management

Taylor recognized that what he was proposing would appear to be more than just a new method – it would be revolutionary! He stated at the outset that ‘scientific management’ would require a complete mental revolution on the part of both management and workers.18

In its application to management, the scientific approach required the following steps:

Develop a science for each operation to replace opinion and rule-of-thumb. Determine accurately from the science the correct time and method for each job. Set up a suitable organization to take all responsibility from the workers except that of actual job

performance. Select and train the workers. Accept that management itself be governed by the science developed for each operation and sur-

render its arbitrary power over the workers i.e. cooperate with them.

Taylor saw that if changes were to take place at the shopfloor level, then facts would have to be sub-stituted for opinion and guesswork. This would be done by studying the jobs of a sample of especially skilled workers, noting each operation and timing it with a stop-watch. All unnecessary movements could then be eliminated in order to ,produce the best method of doing a job. This best method would become the standard to be used for all like jobs. This analytical approach has come to be known as Work Study, the series of techniques now utilized all over the world.

F. Gilbreth (1868-1924)

He started as an apprentice bricklayer and later managed his own business. He became very interested in the 'best way' of doing a job. This involved doing the job in the most comfortable position, in the fewest motions. In operating his system of motion study, he identified seventeen basic elements in job motions, and any motion can be broken down into all or some of these basic elements. He created a flow process chart, which facilitates the study of complete operations and not just a single task.19

H.L. Gantt (1861-1919)

Gantt worked with Taylor for a time and improved upon Taylor's ideas. He believed management was responsible for creating a favorable environment to obtain worker co-operation. Some of his main contributions were:

the setting up of a well-measured task for a worker, thus giving him a goal to achieve - this made the worker interested in attaining the goal;

the believed management had a responsibility to train workers; he advocated proper methods of planning and control. He used graphical recording systems, ma-

chine and man record charts. His charts showed relationships between 'events' in a production pro-gram and he recognized that total program goals should be regarded as a series of interrelated

18 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London19 Robert C. Appleby (1991): Modern Business Administration. Pitman



plans that people can understand and follow.20

H. Emerson (1853-1931)

He wrote two important books on the subject of efficiency and emphasized the importance of correct organization to achieve higher productivity. He advocated the new popular 'line and staff' organiza-tion, and set out his 'principles of efficiency' which are:

a clearly defined ideal and a common sense competent counsel a fair deal and, discipline reliable, immediate, adequate and permanent records standards, schedules, standardized conditions and operations written standard practice instructions dispatching and, reward for efficiency.21

BUREAUCRACY

Bureaucracy is a term with several meanings, and this has led to genuine misconceptions about what it truly means. The most common meanings are as follows:

Bureaucracy is ‘red tape’ i.e. an excess of paperwork and rules leading to gross inefficiency. This is the pejorative sense of the word.

Bureaucracy is ‘officialdom’ i.e. all the apparatus of central and local government. This is a simi-lar meaning to red tape.

Bureaucracy is an organizational form with certain dominant characteristics, such as an hierarchy of authority and a system of rules.

Bureaucracy may be interpreted as an organizational form, with particular reference to the fundamen-tal work of Max Weber.

Max Weber

Max Weber spanned the same period of history as those early pioneers of management thought, Fayol and Taylor. Unlike them, however Weber was an academic – a sociologist – and not a practising man-ager. His interest in organizations was from the point of view of their authority structures. He wanted to find out why people in organizations obeyed those in authority over them. The observations and conclusions from his studies were first published in translation from the original German in 1947. It was in this publication ‘The Theory of Social & Economic Organization’ that he gave the name ‘bu-reaucracy’ to describe a·form of organization that exists to a greater or lesser extent in practically ev-ery business and public enterprise.22

Taylor and Fayol directed their attention towards practical problems of managing, while Weber was more concerned with the basic issue of how enterprises are structured. Weber was a German sociolo-gist and formulated ideas on the ideal management approach for large organizations. He developed a set of ideas about the structure of an organization that define what we know as bureaucracy.23

The characteristics of an ideal formalized organization as described in Weber's Perspective on Admin-istrative Management are:

A division of labor. In which authority and responsibility are defined very clearly and set out as official duties.

20 Robert C. Appleby (1991): Modern Business Administration. Pitman21 Robert C. Appleby (1991): Modern Business Administration. Pitman22 Cole, G. A. (1993): Management Theory and Practice. DP Publications Ltd. London23 Robert C. Appleby (1991): Modern Business Administration. Pitman



Hierarchy of authority. Office or positions are organized in a hierarchy of authority resulting in a chain of command or the scalar principle.

Formal selection. All employees are selected on the basis of technical qualifications through for-mal examinations or by education or training.

Career managers. Managers are professionals who work for fixed salaries and pursue 'careers' within their respective fields. They are not 'owners' of the units they administer.

Formal rules. Administrators should be subject to strict formal rules and other controls regarding the conduct of their official duties (these rules and controls would be impersonal and uniformly applied).

Weber’s three types of legitimate authority are as follows:

Traditional authority – where acceptance of those in authority arises from tradition and custom. Charismatic authority – where acceptance arises from loyalty to, and confidence in, the personal

qualities of the ruler. Rational-legal authority – where acceptance arises out of the office, or position, of the person in

authority as bounded by the rules and procedures of the organization.

It is the last mentioned form which exists in most organizations today, and this is the form to which Weber ascribed the term ‘bureaucracy’.

Before describing these, it will be helpful to understand what he meant by the expression ‘legitimate authority’. Authority has to be distinguished from power. Power is a unilateral thing – it enables one person to force another to behave in a certain way, whether by means of strength or by rewards. Au-thority, on the other hand, implies acceptance of rule by those over whom it is to be exercised. It im -plies that power may only be exercised within limits agreeable to subordinates. It is this latter situa-tion to which Weber refers when he talks about legitimate authority.

The main features of a bureaucracy, according to Weber, are as follows:

A continuous organization of functions bound by rules. Specified spheres of competence i.e. the specialization of work, the degree of authority allocated

and the rules governing the exercise of authority. An hierarchical arrangement of offices (jobs) i.e. where one level of jobs is subject to control by

the next higher level. Appointment to offices made on grounds of technical competence. The separation of officials from the ownership of the organization. Official positions exist in their own right and the job holders have no rights to a particular posi -

tion. Rules, decisions and actions are formulated and recorded in writing.

The above features of bureaucratic organization enable the authority of officials to be subject to pub-lished rules and practices. Thus authority is legitimate, not arbitrary. It is this point more than any other which caused Weber to comment that bureaucratic organization was capable of attaining the highest degree of efficiency and was, in that sense, the most rational known means of carrying out ‘imperative control over human beings’.

HUMAN RELATIONS

Since Taylor, much of the emphasis on scientific management has centered on the worker, and his re-lationship to the company, his job and his fellow workers. Advances in the sciences of man, and his behavior as an individual and in groups, e.g. psychology, sociology, etc., have revealed a number of factors which helped business and industrial problems.

Industrial psychology emerged as a specific field about 1913. It was concerned with problems of fa-



tigue and monotony and efficiency in work; also in the design of equipment, lighting and other work-ing conditions. It later dealt with problems of selecting and training employees and developed tech-niques of psychological testing and measurement. Industrial psychology emphasized the study of large and small groups in industry. The basis of the human relations movement was the integration of various disciplines, i.e. industrial psychology and sociology, applied anthropology and social psychol-ogy, and was concerned with the human problems which management encountered.

The fundamental idea behind the human relations approach to management is that people’s needs are the decisive factor in achieving organizational effectiveness. The leading figure of human relations was Professor Elton Mayo, whose association with the so-called ‘Hawthorne Studies’ between 1927 and 1932 provided an enormous impetus to considerations of the human factor at work.24

Elton Mayo

In 1941 the publication of the results of the psychological experiments of Elton Mayo at the Hawthorne (Illinois) plant of the Western Electric Company was a notable landmark. It revolutionized management thinking by focusing attention on the components of job and work satisfaction on the part of employees. These Hawthorne Experiments (as they are referred to) were divided into three phases.

(1) Test room studies

These were to assess the effect of single variables upon employee performance. A group of women were segregated and variations made in the intensity of illumination, in temperature, hours of work and rest periods, and their performance was noted. The results were surprising, as output rose, even though some changes were made which made working conditions poorer.

It was established that the more important factors were not incentives or working conditions, but the high esprit de corps that had developed in the group and the more personal interest shown by the supervisor and higher management. So, in themselves, conditions of work, light-ing, hours, rest periods, etc., could not be viewed as affecting people's work - people subject to the conditions develop attitudes and interpretations which are important factors also.

(2) Interviewing studies

This first study led to an interest in the attitudes of the plant population towards their jobs, working conditions, and supervision, and a morale survey, comprising over 21,000 interviews, was taken. It was not, though, easy to find out objectively the cause of an individual's dissatis-faction.

(3) Observational studies

These studies were made to study the normal group working. It was found the group developed 'norms' of conduct, output and relations with others outside the department. It became obvious that to each individual in the group the relations with his fellows were important in his motiva-tion and the study showed the importance of informal organization in worker motivation.

To summarize, it was obvious a worker was not motivated solely by money. The superior's role was important for morale and productivity.

Group spirit and teamwork were vital to accomplish organizational goalsand worker satisfaction.




Since then, it can be seen how the studies contributed to the growth of human resource management and human relations and pointed the way to the need to study in detail the 'informal group'.

The term 'human relations' is used to indicate the ways in which managers interact with their subordinates.

Managers must therefore know why employees act in the manner they do, and the psychological, so-cial and other factors which motivate them. After the pioneering attempts of Mayo and his associates, researchers using more sophisticated research methods developed other models to try to explain what motivates people at the workplace (e.g. Maslow, Argyris and McGregor). They became known as 'behavioral scientists' rather than members of the human relations school. It was thought that an un-derstanding of a person's needs would enable a manager to use more accurate methods to motivate subordinates.

Many of the issues raised by Mayo and his colleagues were taken up in post-war years by American social psychologists. An early major influence here was Abraham Maslow’s work on motivation based on an hierarchy of human needs, ranging from basic physiological needs (food, sleep etc) to higher psychological needs, such as self-fulfillment. Other important contributors included McGregor, Argyris, Likert and Herzberg.

MANAGEMENT SCIENCE SCHOOL

Great Britain was faced with many complex problems during World War II. Operational research teams were set up, composed of mathematicians, physicists and other scientists, who pooled their knowledge to solve problems. After the war, these ideas were applied to industrial problems which could not be solved by conventional means. With the development of the electronic computer, these procedures became formalized into a 'management science' school.

The contribution of the quantitative school was greatest in the activities of planning and control. There are many doubts that this school cannot yet deal effectively with 'people'. Some techniques in-troduced include: capital budgeting, production scheduling, optimum inventory levels and develop-ment of product strategies.

The management science school differs from the classical and behavioral schools in the following ways:

The classical or scientific management approach concentrates on the efficiency of the manufactur-ing process. The management science school places greater weight on the overall planning and decision-making process and regards technical efficiency as a tool, rather than an end in itself;

It advocates the use of computers and mathematical models in planning; It advocates the evaluation of effectiveness of models. Techniques for evaluating the effectiveness

of models emphasize their use in managerial decision making, e.g. the return on investment analy-sis.

In essence, the management science school, by its use of computers and quantitative analysis, has made it possible to consider the effect of a number of variables in an organization which may other-wise have been overlooked. It should be noted that statistical evidence by itself may not be sufficient as it may require the more comprehensive techniques of the behavioral school or the administrative management approach. The latter stresses the concern for the welfare of staff and seeks to identify the reasons behind certain behavior.25

25 Robert C. Appleby (1991): Modern Business Administration. Pitman



SYSTEMS APPROACH TO MANAGEMENT

The approaches already mentioned, scientific, administrative management science and behavioral, are useful in different circumstances, but it is difficult to be sure which one is right in a given situation. In view of this, it is considered that the newer systems and contingency approaches may provide a more complete integrated approach to the problems of management.26

Norbert Weiner – Cybernetics (1948)

Many activities in an organization were treated in an essentially descriptive fashion before Norbert Weiner published his book on cybernetics in 1948, which encouraged an analytical approach to the activities of management. 'Cybernetics' can be traced back to Plato; in his Republic he used the Greek term Kybernetike (the art of steersmanship; a pilot or governor) as an analogy to illustrate piloting the 'ship of state'. Cybernetics is now a branch of applied mathematics used in the study and design of control mechanisms. It is useful to recognize the relationship between control and communication. Norbert Weiner's definition of cybernetics is 'The science of communication and control in the animal and in the machine.'

The basic model used in cybernetics has a number of similarities to the models used in systems - col -lections of parts that are dynamically combined and interrelated into a purposive whole. The interrela-tionships occurring through a communications network are self-regulating and adaptive to environ-mental changes in the system.

The essence of cybernetic control is the series of interrelated steps to reach a stage of homeosta -sis (i.e. a stable condition) by means of adjustments made through feeding back into the controlling system information obtained from its interaction with outside environments. A good example is the thermostat, which is sensitive to temperature changes and automatically adjusts the heating mecha-nism.

Feedback involves passing information from one point in a system back to an earlier point with a view to modifying behavior.

Cybernetic control is dependent upon the adequacy of feeding backreliable information to a point where action can be taken.

Systems can be divided into two categories:

(a) Deterministic, where the behavior can be completely determined, e.g. we know what will happen when we touch the keys of a typewriter.

(b) Probabilistic, where behavior can only be estimated within degrees of likelihood, e.g. the result of tossing a coin is unpredictable, as it may be a head or a tail.

In a very probabilistic system, we do not know how the machine works, because of its complexity. All we can do is to treat it like a 'black box'. We cannot see inside the system, or box, and can only make intelligent guesses by manipulating the flows into and out of the box, thus learning about its be-havior by trial and error. We could, for example, institute a sales promotion campaign, but we cannot accurately predict its effect, as the situation is of the probabilistic type.

A system is called open-loop when information is fed out from a process so that necessary evaluations and adjustments can be made externally. If the loop is closed, a person is not needed to complete the control circuit; it is self-correcting.

26 Robert C. Appleby (1991): Modern Business Administration. Pitman



Thinking about management with a knowledge of the systems approach can help us to postulate con-ceptually the interrelationship of apparently separate and even contradictory ideas underlying manage-ment theory for the first time. Systems theory tries to synthesize ideas common to several disciplines. Examples of a system are: the schools system, the telephone system, the solar system.

A system is an organized combination of parts which form a complex entity, with interrelationships or interactions between the parts and between the system and the environment.

It was not until about the early 1960s that a change in management thought began which reflected the impact of systems thinking, but it was slow to start and it was not until the 1970s that ideas of general systems appeared in formal management theory. Basic systems thinking has become more firmly es-tablished and is waiting to be further developed.

A management system encourages one to consider the cutting across of traditional boundaries of responsibility between departments in order to appreciate the objectives of the whole organization.

Distinct demarcation lines between purchasing, manufacturing, engineering, marketing, etc., may be-come less distinct and a revision of organization may be needed. This is essential in viewing the man-agement process as a system. Russell L. Ackoff in the General Systems Yearbook (Vol. 5,1960, p. 6) commented, 'we must stop acting as though nature were organized into disciplines like the Universi-ties are'.

Recent applications of this approach have presented complex systems in the form of models for ease of manipulation, to stimulate a portion of reality. Others have tried to model the life of cities or tried to solve the problems of society with the new tools available. The main problem is that these systems (e.g. cities) are only products of those systems which interact with other more complex systems, which are more difficult to model. A city's problems, for example, derive from its relation to its envi-ronment.

The systems approach stresses the need for more understanding in the development of sophisticated problem-solving techniques, e.g. simulation, operations research and computerized information sys-tems. All these aim to improve the control mechanisms of organizational systems so that they can plan for, and react more effectively to, changes in the environment.

A system may be said to comprise the following elements, which are called sub-systems:

a sensing system or mechanism, to find out the situation and what is going on; an information coding system, to ensure that data are in usable form; a physical processing system, requiring two-way communication and feedback of results; a regulating and control system, based upon actual output and measurement of deviations; an information storage and retrieval system; a goal-setting or policy-making system.

The adoption of a systems approach will involve a marked change in organization, hence the vital need to prepare the organization well in advance of the need to accept change.

Whatever classification is given to managerial activities and responsibilities, they are becoming more dynamic and complex because of:

a greater rate of change and uncertainty in the external environment; new techniques and the revolution in knowledge and technology, especially information process-

ing and micro-circuits); problems of co-ordination and integration as more jobs become specialized.

Traditional managerial theory and behavioral science have provided guidelines to cope with uncer-



tainty and change, but the approaches are too fragmented. It is here that a systems approach can help.

General systems theory provides valuable insights into the structure and process of management and any serious student of management needs to be aware of the ideas of this theory of structure and rela-tionships and to recognize also the impact of systems thinking, arising out of this theory, on manage-ment.

The systems approach recognizes variety and offers a way of interrelating differences by reconciling them within the whole. This is an approach which emphasizes theory and conformity.

Organization As A Complex System of People, Tasks & Technology

By the late 1960’s another group of theories began to challenge the dominance of human relations and psychology. These were theories that viewed organizations as complex systems of people, tasks and technology. The early work on this approach was conducted by British researchers from the Tavistock Institute of Human Relations, who, despite their title, recognized that human or social factors alone were not the most important consideration in achieving organizational effectiveness. They recognized that organizations were part of a larger environment with which they interacted and in particular were affected. by technical and economic factors just as much as social ones. They coined the phrase ‘open socio-technical system’ to describe their concept of a business enterprise. An ‘open’ social system is one that interacts with its environment e.g. a commercial enterprise; a ‘closed’ social system is self-contained e.g. a strict monastic community.27

Management is not an activity that exists in its own right. It is rather a description of a variety of ac -tivities carried out by those members of organizations whose role is that of a manager i.e. someone who normally has formal responsibility for the work of at least one other person in the organization. The activities carried out by managers have generally been grouped in terms of planning, organizing, motivating, and controlling activities. These groupings describe activities which indicate broadly what managers actually do. They are describing managers’ jobs primarily in terms of their inputs.

The groupings of management activities can be summarized as follows:

Planning = deciding the objectives or goals of the organization and preparing how to meet them. Organizing = determining activities and allocating responsibilities for the achievement of plans;

coordinating activities and responsibilities into an appropriate structure. Motivating = meeting the social and psychological needs of employees in the fulfillment of orga-

nizational goals. Controlling = monitoring and evaluating activities, and providing corrective mechanisms.

These traditional groupings – the POMC approach – are the ones chosen to represent the framework for many books. It is appreciated that they do not tell the whole story about what constitutes manage-ment, but they are a convenient way of describing most of the key aspects of the work of managers in practice.

CONTINGENCY APPROACH TO MANAGEMENT

Arising out of the open systems approach is an essentially pragmatic ‘theory’ which argues that there is no one theory at present which can guarantee the effectiveness of an organization: it is impossible to select one way of managing that works best in all situations. Management has to select a mix of theories which seem to meet the needs of the organization and its internal and external pressures at a particular period in its life. This has been termed a contingency approach to management.




Pugh (U.K.), Lawrence & Lorsch (USA)

This approach intends to identify the conditions of a task (scientific management school), managerial job (administrative management school) and persons (human relations school) as parts of a complete management situation and attempts to integrate them all into a solution which is most appropriate for a specific circumstance. Notable exponents of this approach are Pugh and colleagues in the United Kingdom, and Lawrence and Lorsch in the United States.28

Contingency refers to the immediate (contingent or touching) circumstances. The manager has to try systematically to identify which technique or approach will, in a particular circumstance or context, best contribute to the attainment of the desired goals.

An example of this is the recurrent problem of how to increase productivity. The 'expert' would pre-scribe as follows:

Behavioral scientist – create a climate which is psychologically motivating. Classical approach - create a new incentive scheme. Contingency approach - examine both ideas and see how any answer fits in with goals, structure

and resources of the organization.

In the above case it may be found that if workers needed money mainly for personal expenses, finan-cial incentive may work well. Skilled workers may prefer, however, job enrichment to encourage pride in their work.

The contingency approach may consider, for policy reasons, that an incentive scheme was not rele-vant. Also the expense of a job enrichment scheme may rule this out. The complexity of each situa-tion should be noted and decisions made in each individual circumstance.

It should be borne in mind that the contingency approach is not really new , as Taylor emphasized the importance of choosing the general type of management best suited to a particular case. There was also the point emphasized by Fayol that there is nothing rigid or absolute in management affairs.

Similar ideas were expressed in the 1920s by Mary Parker Follett (1865-1933). She was greatly inter-ested in social work and had a gift for relating individual experience to general principles. Her concept of the Law of the Situation referred to the necessity of acting in accordance with the specific require-ments of a given situation. She noted that these requirements were constantly changing and needed continual efforts to maintain effective working relationships. Her main contributions were on the psy-chological implications of authority, leadership and control.

The contingency approach seeks to apply to real life situations, ideas drawn from various schools of management thought. Different problems and situations require different approaches and no one ap-proach is universally applicable. Managers must seek to identify the approach that will serve them best in any given situation, so they can achieve their goal.

It is important to note that the contingency approach stresses the need for managers to examine the re-lationship between the internal and external environment of an organization.

The systems approach to management emphasizes that relationships between various parts of an organization are interlocked. The contingency approach has emphasized this idea by focusing on the nature of such relationships.

Criticisms of the contingency approach are that it has little theoretical foundation and is basically in-tuitive. This can be countered by noting that the contingency approach examines each situation to find




out its unique attributes before management makes a decision. Earlier approaches tended to consider universal principles which were not always applicable to specific situations. Managers today are ad-vised to analyze a situation and use ideas from the various schools of thought to use an appropriate combination of management techniques to meet the needs of the situation.

SUMMARY ABOUT MOST IMPORTANT THEORISTS

This Section has looked at a selection of the most important ideas of the leading theorists of classical organization. These ideas have tended to focus on the structure of organizations and the management of structure. People and their needs have not been ignored by the classical theorists, but have been dealt with firmly against the background of some ideal structure.29

Fayol, Taylor, Gantt and the Gilbreths, Urwick and Brech have endeavored to find rational principles that can be applied to the development and management of organizations. These principles have con-centrated on such issues as the division of labor, or specialization, and the control of physical and hu-man resources by means of hierarchical structures.

Several of the principles put forward by these writers have been adopted by managements in practice. The scalar chain or management hierarchy, for example, is an integral part of most companies today. Similarly, issues such as authority matching responsibility and the clear definition of jobs and roles have also been absorbed into the thinking of many management teams. On the other hand, several of the principles advocated by Fayol and the others have not found favor in practice. Questions of unity of command, fair treatment of staff, remuneration and similar issues relating to leadership and motiva-tion are not easy for modern managements to install on a unilateral basis. In the 1920’s it was possible to conduct the management of people in a spirit of benevolent paternalism. Today that just is not pos -sible. Increasingly, employees at all levels are demanding more participation in decision-making and more joint control of working conditions. In this kind of situation, classical theories stand little chance of success, without considerable modification.

Whilst most attention has been given to the organization as a whole, the Scientific Managers, in par-ticular, sought to apply rational methods to work itself. Their techniques have provided the foundation for the many forms of quantitative analysis of work in use today all over the world. The greatest bene-fits of the so-called ‘scientific approach’ have been in the productivity improvements gained by more efficient use of machines and manpower. The disadvantages have arisen mainly from the overspecial-ization of jobs, which has resulted in boredom and frustration for many employees, and (b) from the payments systems generated as a result of work study applications in the workplace. The implicit car-rot and stick attitude at the heart of payments systems geared tightly to measured work has proved to be more of a stick than a carrot, and one that has been used by both sides of industry to beat the other!

Most of the theorists have been practising managers or consultants. The exception has been Max We-ber, the sociologist. His analysis of, and subsequent enthusiasm for, the bureaucratic form of organi-zation demonstrates his position as a member of the classical school alongside Fayol, Taylor and the others. His concept of the efficiency of the structure and procedures embodied in a bureaucracy shares a considerable amount of common ground with the thinking of Fayol, Urwick and Brech. In particu-lar, features such as the scalar chain, specialization, authority, and the definition of jobs which were seen by these writers as essential for successful management, are typical of a bureaucracy. There is also little doubt that Weber’s ideas concerning specified spheres of competence and appointments based on technical competence would have had a considerable appeal for Taylor and the scientific management.




The prime responsibility for strategic management lies with the top management of the organization (e.g. Chief Executive and Board members). The strategic dimension of management has grown in im-portance over the last thirty years largely on account of the increasing complexity of modern business organizations. This state of affairs has come about due to such factors as:

the increased expectations of customers for the quality and variety of consumer goods and per-sonal services

the rapid advance of micro-electronic technology, which has revolutionized many of the processes by which goods and services are made available to the customer

the increased ability of firms to compete with each other due to the benefits of new technology and a sufficiency of trained labor

the greater concern among most nations for the protection of the natural environment, leading to the development of alternative materials, components, energy sources etc

greater emphasis on consumer rights (e.g. in terms of safety, product reliability etc) the improvement in world-wide communication systems, leading to better and more timely infor-

mation prior to decision-making by buyers, sellers and middlemen/ agents the greater inter-connectedness of the world’s peoples, not only in their trading and commercial

activities, but also in political and economic terms (e.g. European Community (EC), Oil Produc-ing & Exporting Countries (OPEC), General Agreement on Trade & Tariffs (GATT) etc).

The scenario thus presented to many industrial and commercial enterprises is a complex one requiring attention to the longer-term view and the broader perspective. Strategic thinking has to address such questions as ‘Where do we want to be in 5, 10 or 20 years time? What do we have to achieve in order to get there? What resources are we likely to require? What changes are we likely to have to cope with in our operating environment? How can we gain and/ or retain the competitive advantage over oth-ers?’. Such questions make up the principal challenge to the top management of an organization, for it is their task to ensure a healthy and prosperous future for the organization (or, in a completely differ-ent scenario, to plan for the closure or rationalization of the organization). This chapter will concen-trate on the positive aspect of strategic management, i.e. planning for growth and development. How-ever, it is important to recognize that in cases where a major industry, such as coal-mining, is in steady decline, the issues are how to make the operation a viable business and yet demonstrate respon-sibility to the local communities concerned. Often in such cases governments themselves have to in-tervene on behalf of those communities in order to mitigate the effects of unemployment and to attract new employers into the areas affected.30

MANAGING CHANGE

To change something implies altering it, varying or modifying it in some way. Organizations change, or adapt, what they want to achieve and how. Some organizations change mainly in response to exter-nal circumstances (reactive change); others change principally because they have decided to change (proactive change). Some organizations are conservative in outlook, seeking little in the way of change; others are entrepreneurial in outlook, ever seeking new opportunities and new challenges. Some organizations are so constructed (even constricted!) that change i.e. adaptation is a slow and dif-ficult process; others are designed with an in-built flexibility, enabling adaptation to take place regu-larly and relatively easily. Over thirty years ago Burns and Stalker conducted their famous enquiries in the management of innovation, when they identified mechanistic and organic types of organiza-tion. Their organizational types have been confirmed time and time again by subsequent researchers, and current exponents of organizational change such as Tom Peters and Rosabeth Moss Kanter make reference to these two basic organizational forms in their writings.

Change does not always imply innovation, i.e. introducing something new, but it is this aspect of




change which has attracted the most attention from researchers. What are the key variables that have to be considered when looking at organizational change? They certainly include such fundamental variables as Organization Structure, People, Technology and the External Environment, but these in turn break down to include others such as Decision-making Processes, Senior Management Commit-ment, Organization Mission and Strategy, Management Style, Employee Motivation, Communication systems, Employee skills/know-how and Change agents. In addition to these variables must be added other issues such as resistance to change, the social and political environment and organizational cul-ture. Clearly, any study of change and/ or innovation is likely to be a complex undertaking.

ROSABETH MOSS KANTER

In her in-depth study of 10 major US companies, which also drew on related research in another 100 American business enterprises, Moss Kanter (1984) identified two quite different ways in which companies approached innovation. One approach, which she calls the ‘integrative’ approach describes firms that dealt holistically with problems, were willing to try out new ideas, prepared to push the or-ganization to its limits, and generally saw change as an opportunity rather than a threat. The other ap -proach, by contrast, compartmentalized its problem-solving, saw the organization as a collection of segments rather than as organic whole, dealt with change within segments/compartments and was un-willing to alter the balance of the overall structure. This approach she calls the ‘segmentalist’ ap -proach. It soon became clear to her that innovation – the introduction not just of new products and new technology, but also of new ideas and practices – was much better handled by integrative compa-nies than by the segmentalists.

The most important motive for innovation in a business enterprise is, according to Moss Kanter, to improve the organization’s ability to meet and satisfy customer needs. For companies to become inte-grative they need to develop three new sets of skills:

Power skills – i.e. skills in persuading others to invest time and resources in new (and risky) ini-tiatives

Skills in managing problems arising from team-working and employee participation An understanding of how change is designed and constructed in an organization.

These are points which are taken up by other writers, including Peters, whose ideas will be referred to shortly.

In dealing with issues of resistance to change and overcoming inertia (‘roadblocks to innovation’), Moss Kanter suggests a number of possible actions, which can be summarized as follows:

As a pre-requisite to change, top management must be personally committed to supporting inno-vation and must learn to think integratively

A ‘culture of pride’ should be encouraged within the organization, in which achievements are highlighted and where experienced innovators serve as consultants to other parts of the organiza-tion

Access to power sources (management committees etc) should be enlarged to improve support for innovatory experimental proposals

Lateral communication should be improved. Cross-functional links should be developed, and staff mobility should be encouraged

Unnecessary layers of hierarchy should be reduced (i.e. a flatter structure should be aimed for) and authority should be pushed downwards (‘empowerment’ of staff)

Information about company plans should be more widespread and given as early as possible to en-able people to contribute to change before decisions are made (e.g. by means of task-forces, prob-lem-solving groups etc).



RESISTANCE TO CHANGE

There is not much point in ‘change for change’s sake’, and most people need to be persuaded of the need to change. Some fear change. The reality is that every human grouping has forces within it which keep it together and provide it with stability, and yet others which provide it with a reason to change or adapt. Kurt Lewin (1951) illustrated the dilemma neatly with his classic notion of ‘Force-field theory’.

This theory suggests that all behavior is the result of an equilibrium between two sets of opposing forces (what he calls ‘driving forces’ and ‘restraining forces’). Driving forces push one way to attempt to bring about change; restraining forces push the other way in order to maintain the status quo.

DRIVING FORCES TO BRING ABOUT CHANGE – PETERS & WATERMAN

Generally speaking, human beings tend to prefer to use driving forces to bring about change. They want to ‘win’ by exerting pressure on those who oppose them, but, as Lewin’s model suggests, the more one side pushes, the more the other resists, resulting in no change. The better way of overcom-ing resistance, therefore, is by focusing on the removal, or at least weakening, of the objections and fears of the resisting side. Thus the initial policy should be not ‘How can we persuade them of our ar-guments for change?’, but rather ‘What are their objections/fears, and how can we deal with them?’

As a result of their studies, Peters and Waterman, identified eight attributes of excellence, which can be summarized briefly as follows:

They have a bias towards action, i.e. once a problem is identified and analyzed, people are ex-pected to come up with solutions

They listen to their customers – customer service is foremost They encourage internal autonomy and entrepreneurship (and are prepared to tolerate the in-

evitable failures that will occur) Employees are held in high esteem, but in a performance-conscious environment; expectations are

high They emphasize the organization’s basic values (culture) and demonstrate their commitment to

them They stick to what they know (acknowledging that what they know increases over time) Complex structures are avoided; divisionalized structures are the most likely; corporate/ headquar-

ters staff are kept to the minimum Control is loose yet tight; it is loose in that decision-making is pushed downwards, but tight in

that certain core values/ practices are insisted upon (e.g. attention to quality, information feedback etc)

One other important conclusion reached by Peters and Waterman was that there was invariably one strong individual at work in the crucial early stages of developing the culture of excellence.

In encouraging others to take up the cause of excellence, and thus increase the number of people will-ing to take up the key leadership role, Peters has written subsequently on the subject of excellence. In his book, Thriving on Chaos (1987), he proposes some prescriptions for managing change, innovation and survival. The title of the book is intended to show that the external environment is turbulent and unstable, and managements have to develop a suitable strategy for change if they and their firms are to survive and win. In this book he proposes 45 prescriptions in order to realize excellence.


kszm/man tools and... · web viewthus, fayol’s analysis has more far-reaching implications than...

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