1) Confronted by ever-shifting conditions, managers have to make continual changes in their organizations and sometimes create new companies with which they have little experience or skill
2) Managers today face the ultimate paradox:
a. Keep everything running efficiently and profitably
b. While at the same time, change everything
3) Success accrues to those who learn how to be leaders, initiate change, and to create organizations with flatter hierarchies that can be agile and make decisions quickly.
CLASSICAL PERSPECTIVE
Evolved in 3000 BC and can be considered to be the basis for the current study of management science. Can be divided into three broad sub-fields:
1) Scientific Management - Frederick Winslow Taylor (1856-1915) – Father of Scientific Management
a. Developed standard method(s) for performing each job, trained workers in standard techniques and tied output and wages
b. Demonstrated the importance of compensation tied to performance, training and selection
c. Drawbacks were that it did not include variance amongst individuals and did not appreciate the social context of work and the higher needs of workers. Also ignored workers suggestions and inputs
2) Bureaucratic Organizations - Max Weber (1864-1920)
a. This theory states that an organization built on rational authority would be more efficient and adaptable to change because continuity is related to formal structures and positions rather than one single person
3) Administrative principles - Henry Fayol, Mary Parker Follett, Chester Barnard
a. Fayol discussed 14 general principles of management including
i. Unity of command
ii. Division of work
iii. Unity of direction
iv. Scalar chain
b. Five basic functions of management include planning, organizing, commanding, coordinating and controlling.
4) Humanistic Perspective
a. Hawthorne Studies
i. Hawthorne studies formed the basis of the Human Relations Movement. As part of the Scientific Management regime, companies routinely studied the effects of the physical environment on their workers. For example, they varied the lighting to find the optimum level of light for maximum productivity. They piped in music, varied the temperature, tried different compensation schemes, adjusted the number of working hours in a day, etc.
ii. The Hawthorne studies were carried out by the Western Electric company at their Hawthorne plant in the 1920's. Initially, the study focused on lighting.
iii. 2 things emerged from the initial studies: (1) the experimenter effect, and (2) a social effect. The experimenter effect was that making changes was interpreted by workers as a sign that management cared, and more generally, it was just provided some mental stimulation that was good for morale and productivity. The social effect was that it seemed that by being separated from the rest and being given special treatment, the experimentees developed a certain bond and camaraderie that also increased productivity.
b. McGregor’s Theory X and Theory Y – To understand human relations in organizations.
| Theory X | Theory Y |
| Most people dislike work & want to avoid it | Work is a natural activity |
| People require close direction | People can be self-directed if they are committed to the objective |
| People want to avoid responsibility & have little ambition | Rewards help commitment |
| | Most employees accept & seek responsibility |
| | Employees have imagination, ingenuity & creativity |
Recent Historical Trends
1. Systems Theory – A system is a set of interrelated parts that function as a whole to achieve a common purpose. Systems theory of organizations consists of 5 components –
a. Inputs
b. Transformation process
c. Output
d. Feedback
e. Environment
Ideas of systems theory –
a) Open systems - Open systems must interact with the environment to survive, closed systems need not. In the classical approach, organizations were thought of as closed systems.
b) Entropy – Entropy is a universal property of systems and refers to their tendency to run down and die. If a system doesn’t receive fresh inputs and energy from its environment, it will die. So organizations monitor their environments and try to reduce entropy.
c) Synergy – Synergy means that the whole is greater than the sum of its parts. Organization functions as a whole, not merely as a sum of its parts.
d) Subsystems – Subsystems are interdependent. Change in one affects others.
2. Contingency View – Old views were Universalist view (management concepts are universal) and Case view (each situation is unique). Contingency view is the latest trend. It combines Universalist view and case view.
3. Total Quality Management - It focuses on managing the total organization to deliver quality to customers. Involves entire organization. Benchmarking refers to a process by which companies find out how others do something better than they do, & then try to imitate or improve on it.
Innovative management thinking for turbulent times
1. The learning organization – In a learning organization everyone is engaged in identifying & solving problems, enabling the organization to continuously experiment, change & improve, thus increasing its capacity to grow, learn & achieve its purpose. Focus is on problem solving rather than efficiency. The 3 characteristics of a learning organization –
a) Team Based Structure
b) Employee empowerment
c) Open Information
2. Managing the technology driven work place – Massive infusion of Information Technology in modern organizations.
a) E-Business - Refers to work done by an organization using electronic linkages.
b) E-Commerce - Refers to electronic business transactions. Three types are –
i) B2B
ii) B2C
iii) C2C
3. Innovative Technology in the Workplace - Use of technologies like ERP, CRM etc for knowledge management and functioning of organizations. Outsourcing of IT to devout to core competencies.
Learning Organization - Many managers are redesigning their companies toward the learning organization, which fully engages all employees in identifying and solving problems. The learning organization is characterized by a team based structure, empowered employees, and open information. The learning organization represents a substantial departure from the traditional management hierarchy
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