CHAPTER 2 Traditional and contemporary issues Presentation prepared by and challenges in management Susan Bandias Charles Darwin University

Learning Objectives

Justify the role of history and theory to management, and discuss the precursors to modern management theory.
Summarise and evaluate the classical, behavioural, and quantitative perspectives on management, noting its relevance to todays managers. Discuss the systems and contingency approaches to management, explaining their potential for integrating other management areas. Identify and describe contemporary management issues and challenges.
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Why Theory?

Theory: A conceptual framework for organising knowledge and providing a blue-print for action.

Management theories are grounded in reality.

In addition to well known theories, managers develop and refine their own theories.

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Why History?

Organisations exist in social and historical context. Understanding the historical context enriches our understanding of the generated theories. Understanding history helps us avoid the mistakes of others.

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The Historical Context of Management

Social forces: The norms and values that characterise the people in a culture.

Economic Forces: The forces associated with economic systems and general economic conditions and trends.
Political forces: the government institutions, attitudes and policies that affect business.
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Management in Antiquity

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Early Influences

Protestant work ethic. Robert Owen (17711858) Charles Babbage (17921871) Andrew Ure (17781857) and Charles Dupin (17841873) Focus on technical aspects of production and the individual characteristics of the pioneer, rather than generalised ideas about managing.
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Classical Management Perspective

A natural outgrowth of the pioneering work.

Consists of two distinct branches:

Scientific management

Administrative management

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Scientific Management
Aimed at improving workers performance through analytical procedures. Frederick Taylor (1856-1915): soldiering-reward

Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-1972): time + motion => efficiency
Henry Gantt (1861-1919): Grant Chart Harrington Emerson (1853-1931): specialisation of management roles.
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Steps in Scientific Management

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Administrative Management

Focuses on managing the total organisation. Henri Fayol (18411925): management functions Max Weber (18641920): ideal bureaucracy Lyndall Urwick (18911983): integrated Chester Barnard (18861961): acceptance of authority by subordinates
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Fayols 14 Principles

1. 2. 3. 4. 5. 6.

Division of labour Authority Discipline Unity of command Unity of direction Subordination of the individual to the common good

7. Remuneration 8. Centralisation 9. Scalar chain 10. Order 11. Equity 12. Stability 13. Initiative 14. Esprit de corps
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Critical Thinking Questions

Identify the contributions of the classical management theories. Do the classical management theories have any limitations? Explain.

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Behavioural Management Perspective

Emphasises individual attitudes and behaviours and group processes.
Hugo Mnsterberg (18631916): psychological testing in selection and motivation. Mary Parker Follett (18681933): adult education, vocational guidance, cross-functional work-teams, empowerment, participate management. Elton Mayo (18801949), the Hawthorne studies: diagnostic and interpersonal skills.
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Behavioural Perspective (cont.)

Technology and social systems - the Tavistock Institute: confirmed the Hawthorne studies. The human relations movement:

- Abraham Maslow: hierarchy of needs

- Douglas McGregor: theory X (negative view of workers) and Y (positive view of workers) Organisational behaviour: contemporary research field on behavioural management perspectives.
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Critical Thinking Questions

Identify the contributions of the behavioural management perspective. Do the behavioural management perspective have any limitations? Explain.

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Quantitative Management Perspective

Applies quantitative techniques to management.

Management science: uses mathematical models for simulations and prediction.

Operations management (applied management science): helps the organisation to produce its products or services more efficiently.

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Critical Thinking Questions

Identify the contributions of the quantitative management perspective. Do the quantitative management perspective have any limitations? Explain.

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Integrating Management Perspectives

The systems perspective
System: Interrelated set of elements functioning as a whole; relationships between the elements are as important as the elements themselves. Open systems interact with their environment. Systems within systems are sub-systems. Positive relationships in the system can produce synergy (1 +1 = 3) A natural process in systems is entropy (decline).
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Systems Approach to Organisations

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Integrating Management Perspectives

The Contingency Perspective

Classical, behavioural and quantitative approaches are universal perspectives (one best way). Contingency perspective: appropriate managerial behaviour in a given situation depends on a wide variety of elements in that situation.

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An Integrating Framework

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Contemporary Management Challenges

Flattening the hierarchy Managing diversity Managing change New technology Organisational design Globalisation Ethics and social responsibility Quality Service
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Take-home messages

Review of topic 2 key points Read chapters 2 and 3 of the textbook

Summarise the key points of chapter 2

Decide on the team project topic

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