The Evolution of Management TheoryThe Evolution of Management Theory
Learning ObjectivesLearning ObjectivesTo understand how management theoriesdevelopTo understand the impact of the environment tomanagement thinkingTo gain insights into new management approach
Early Management ThoughtEarly Management ThoughtEarly ideas about management strategySun Tzu (770-476 B.C.), The Art of WarEarly ideas about leadershipNicolò Machiavelli (1469-1527), The PrinceEarly ideas about the design and organizationof workAdam Smith, The Wealth of Nations• division of labor
Sun Tzu, Art of WarSun Tzu, Art of War“Shang Chang Ru Zhan Chang”“The marketplace is a battlefield”Sun Tzu, 4thcentury BC
Management and MachiavelliManagement and MachiavelliNew science of managementlies in the the old art ofgovernment"to be a great pretender anddissembler."“cunning and intrigue, thetriumph of force over reason.”"a prince" ought to have noother aim or thought, nor selectanything else for his study,than war and its rules anddiscipline."
The Evolution of Management TheoryThe Evolution of Management Theory(Comprehensive Analysis of Management)Systems TheoryContingency Approach
Management ApproachesManagement Approachesand the Environmentand the EnvironmentGENERALENVIRONMENTOPERATINGENVIRONMENTINTERNALENVIRONMENTSOCIALECONOMICPOLITICALLEGALTECHNOLOGYNEW ENTRANTSSUPPLIERSUBSTITUTESCUSTOMERCOMPETITIONPRODUCTIONTECHNOLOGYSTRUCTUREINPUTS
The Classical ApproachThe Classical ApproachEnvironment in ca1890•Industrial revolution•Autocratic management was the norm•“Science" as a solution to the inefficienciesand injustices of the period•Idea of interchangeable partsThe classical approach (ca1890) tomanagement is a management approach thatemphasizes organizational efficiency toincrease organizational success.
The Classical ApproachThe Classical ApproachScientific ManagementFrederick W. TaylorFrank and Lillian GilbrethHenry GanttBureaucratic ManagementMax WeberAdministrative ManagementHenri Fayol
Taylor’s Four Principles of Scientific ManagementTaylor’s Four Principles of Scientific Management1. Scientifically study each part of a task anddevelop the best method of performing thetask.2. Carefully select workers and train them toperform the task by using the scientificallydeveloped method.3. Cooperate fully with workers to ensure thatthey use the proper method.4. Divide work and responsibility so thatmanagement is responsible for planningwork methods using scientific principles andworkers are responsible for executing thework accordingly.
““Now one of the first requirements forNow one of the first requirements fora man who is fit to handle pig iron as aa man who is fit to handle pig iron as aregular occupation is that he shall beregular occupation is that he shall beso stupid and so phlegmatic that heso stupid and so phlegmatic that hemore nearly resembles in his mentalmore nearly resembles in his mentalmakeup the ox than any other type”makeup the ox than any other type”- Frederick Taylor- Frederick Taylor““Now one of the first requirements forNow one of the first requirements fora man who is fit to handle pig iron as aa man who is fit to handle pig iron as aregular occupation is that he shall beregular occupation is that he shall beso stupid and so phlegmatic that heso stupid and so phlegmatic that hemore nearly resembles in his mentalmore nearly resembles in his mentalmakeup the ox than any other type”makeup the ox than any other type”- Frederick Taylor- Frederick Taylor
Key Characteristics of Weber’s Ideal BureaucracyKey Characteristics of Weber’s Ideal BureaucracySpecialization of laborFormal rules and proceduresImpersonalityWell-defined hierarchyCareer advancement based on merit
Fayol’s 14 Principles ofFayol’s 14 Principles ofAdministrative ManagementAdministrative Management1. Division of work2. Authority3. Discipline4. Unity of command5. Unity of direction6. Subordination ofindividual interest tothe general interest7. Remuneration8. Centralization9. Scalar chain10. Order11. Equity12. Stability andtenure13. Initiative14. Esprit de corpsPlanning, Organizing, Commanding, Coordinating, Controlling
What are the limitations of theWhat are the limitations of theClassical Approach??Classical Approach??
The Behavioral ApproachThe Behavioral ApproachThe behavioral approach (ca 1910) tomanagement is a management approach thatemphasizes increasing organizationalsuccess by focusing on human variableswithin the organization.Environment in ca1910•The Newtonian science that supported "the one best way" ofdoing things was being strongly challenged by the "newphysics" results of Rutherford and Einstein•In the work place there were strong pressures for shorterhours and employee stock ownership.•As the effects of the 1929 stock market crash and followingdepression were felt, employee unions started to form
Behavioral PerspectiveBehavioral PerspectiveThe Hawthorne StudiesHuman RelationsApproachEmployee motivation• Abraham MaslowLeadership style• Douglas McGregor
Hawthorne Effect:Hawthorne Effect:The discovery that paying specialThe discovery that paying specialattention to employees motivates themattention to employees motivates themto put greater effort into their jobs.to put greater effort into their jobs.(from the Hawthorne management studies,(from the Hawthorne management studies,performed from 1924 – 1932 at Western Electricperformed from 1924 – 1932 at Western ElectricCompany’s plant near Chicago)Company’s plant near Chicago)
Physical NeedsPhysical NeedsNeed for SecurityNeed for SecurityNeed for Social RelationsNeed for Social RelationsNeed for Self EsteemNeed for Self EsteemSelf-ActualizationSelf-ActualizationMaslow’s Hierarchy ofMaslow’s Hierarchy ofNeedsNeeds
McGregor’s Theory X and Theory YMcGregor’s Theory X and Theory YLeaders and managers who hold Theory X assumptionsbelieve that employees are inherently lazy and lackambition.A negative perspective on human behavior.Leaders and managers who hold Theory Y assumptionsbelieve that most employees do not dislike work andwant to make useful contributions to the organization.A positive perspective on human behavior.
What are the limitations of theWhat are the limitations of thebehavioral approach?behavioral approach?
The Management Science ApproachThe Management Science ApproachThe management science approach (ca1940)is a management approach that emphasizesthe use of the scientific method andquantitative techniques to increaseorganizational success.Environment in ca1940•Application of OR in solving complex problems inwarfare (WWII)•Significant technological and tacticalbreakthroughs•Interest in manufacturing and selling after WWII
The System ApproachThe System ApproachThe system approach (ca 50’s-60’s) tomanagement is a management approachbased on general system theory--the theorythat to understand fully the operation of anentity, the entity must be viewed as a system.This requires understanding theinterdependence of its parts.Environment in ca1950’s to 60’s”•Growing quality consciousness•Total Quality Management
The Open Management SystemThe Open Management SystemGENERALENVIRONMENTOPERATINGENVIRONMENTSOCIALECONOMICPOLITICALLEGALTECHNOLOGYNEW ENTRANTSSUPPLIERSUBSTITUTESCUSTOMERCOMPETITIONPLANNING, ORGANIZING,INFLUENCING, CONTROLLINGINPUT PROCESS OUTPUT
The Contingency ApproachThe Contingency ApproachThe contingency approach (ca 70’s) toManagement is a management approach thatEmphasizes that what managers do inpractice depends on a given set ofcircumstances--a situation.Environment in ca1970’s”•Emergence of new companies “Apple”•Emergence of new products, “IBM PC”
Triangular ManagementTriangular ManagementTriangular management is a managementapproach that emphasizes using informationfrom the classical, behavioral, and manage-ment science schools of thought to managethe open management system.
Type Z OrganizationType Z Organization(Theory Z by Ouchi 1981)(Theory Z by Ouchi 1981)Theory Z (ca 80’s) suggests that involved workersare the key to an increase in productivity and itoffers offers ways to manage (collective decisionmaking, slow evaluation and promotion, andholistic concern for people) so that they can worktogether more effectively.Environment in ca1980’s•Slow American productivity improvement•Rise of Japanese companies•Japanese management may offer solutions to thisproblem
Theory ZTheory Z“Involved workers are the key to an increase inproductivity.”From “Theory Z” by William Ouchi, 1981
Chaordic Organization (Chaos Theory)Chaordic Organization (Chaos Theory)(Hock, Dee,1999)(Hock, Dee,1999)Chaos theory (ca 90’s) in managementrecognizes that events indeed are rarelycontrolled. Blending chaos with orderEnvironment in ca1990’s•Start of Internet age•Highly competitive environment•Emergence of communications technologies•Emergence of new work practices (virtual teams,network organizations)
Chaordic OrganizationsChaordic OrganizationsPurposePrinciples, People, and ConceptStructure and Practice• Clarity of purpose andshared values•Operate throughnetwork of equals, nothierarchiesFrom “Birth of the Chaordic Age” by Hock, D. 1999
How about Modern ManagementHow about Modern ManagementApproach?Approach?
Environment In the New MillenniumEnvironment In the New MillenniumEnvironment in the millenium•Information and electronic age•Information and knowledge is going to be readilyavailable to us all•Information speed through Internet•The future is going to be dominated by our need tounderstand systems.
The Learning Organization ApproachThe Learning Organization ApproachThe learning organization approach tomanagement is the management approachbased on an organization anticipatingchange faster than its counterparts to havean advantage in the market over itscompetitors.From “The Fifth Discipline” by Peter Senge, 1990
Managerial Approach to LearningManagerial Approach to LearningOrganizationOrganizationManagers must create an environment conducive tolearningManagers encourage the exchange or informationamong organization membersManagers promotesystematic problem solvingExperimentationlearning from experiences and past historylearning from experience of otherstransferring knowledge rapidly throughout the organizationFrom “The Fifth Discipline” by Peter Senge, 1990
Building a Learning OrganizationBuilding a Learning OrganizationSystem ThinkingEvery organization member understands his or her own job andhow the jobs fit together to provide finals products to thecustomerShared visionAll organization members have a common view of the purposeof the organization and a sincere commitment to accomplish thepurposeChallenging of the mental modelsOrganization members routinely challenge the the way businessis done and the thought processes people use to solveorganizational problemsFrom “The Fifth Discipline” by Peter Senge, 1990
Building a Learning OrganizationBuilding a Learning OrganizationTeam learningOrganization members work together, develop solution to newproblems together, and apply the solutions together.Working as teams rather than than individuals will help theorganization gather collective force to achieve organizationalgoalsPersonal masteryAll organization members are committed to gaining a deep andrich understanding of their workSuch an understanding will help organizations to reach importantchallenges that confront themFrom “The Fifth Discipline” by Peter Senge, 1990
Business Process Management ApproachBusiness Process Management ApproachThe business process management approach to managementis a method of efficiently aligning an organization with thewants and needs of clients. It is a holistic managementapproach that promotes business effectiveness and efficiencywhile striving for innovation, flexibility and integration withtechnology. As organizations strive for attainment of theirobjectives, BPM attempts to continuously improve processes -the process to define, measure and improve your processes –a ‘process optimization process.This is actually a slow advance in process management:•Record Management•Workflow - 1970•Business Process Re-engineering (BPR) - 1990•Business Process Management (BPR) - 2000
Western Management TheoriesWestern Management TheoriesIs there an Asian Management Theory??Is there an Asian Management Theory??
What is business managementWhat is business managementthe Asian way?the Asian way?Business tend to be small scaleTime has no beginning and endIndividualism is less relevant; managerial beliefs shifttowards the autocratic endConformity to socially acceptable behaviors is donethrough morality (e.g losing face)Oriental managers rely less on interpersonalconfrontationsManagerial decisions consider effects on othe rpeopleControl of performance is less formalMaintaining and developing guanxi (connection andrelationship*From World Executive Digest by Redding & Martyn, 1984
““Will Western ManagementWill Western Managementwork in Asia?”*work in Asia?”*“Values and attitudes affect but do not invalidate thetransfer of American management concepts…Consequently, when we wish to transfer an effectivedevice from one culture to another, careful attentionshould be given to underlying premises…?“Tools of management remain the same.”**“Economic and business philosophy are however,different.”**Combination of general management, functionalmanagement, and communal organization andmanagement..***From World Executive Digest by William Newman, 1984**From World Executive Digest by Sixto Roxas, 1981Photo from www.aim.edu.ph
Is there a Filipino ManagementIs there a Filipino ManagementTheory??Theory??Are Western theories applicable inAre Western theories applicable inPhilippine setting?Philippine setting?
Are Western Theories Applicable inAre Western Theories Applicable inPhilippine Setting?Philippine Setting?“The models and ideal types taught in Western-orientedMBA programs are based on certain assumptions, manyof which are invalid in the Philippines.Although organizations here have most of the structuresand formal procedures of Western business, actual day-to-day business processes and interactions necessarilyproceed within the matrix of Filipino culture and values.Thus, the need for the Westerner to go "the extra mile"to understand whats really going on and adapt aculturally sensitive style of doing business.”- Clarence Henderson,Henderson Consulting International
What is Pinoy Management Theory??What is Pinoy Management Theory??“No one Management Theory or Style.”Under the formal organization are:“Informal organization”“Battlefield of behavioral styles among managers andemployees”“Unknown cultural ambiance among peoples andsystems”From “Pinoy Management” by Ernesto Franco, 1986
Weaknesses of Pinoy WorkersWeaknesses of Pinoy WorkersWalang bilib sa sarili (No confidence in oneself)Dikdik sa Colonial Mentality (Indoctrinated withColonial Mentality)Masyadong relaks (Overly relaxed)Ningas-cogon (Not a follow-up people)Holiday mentalityLack of managerial and organizationaleffectivenessLack of self-reliant tenacityFrom “Pinoy Management” by Ernesto Franco, 1986
Pinoy ManagementPinoy ManagementKailangan may No. 2 (There is a need for No.2)Tsismis machine (Grapevine Machine)Kailangan may Hatchet Man (There is need for a HatchetMan)Be an expert on timingLumayo sa madalas matalo (Avoid losers)Gawin mong personal (Make it personal)NBA Style: One-on-onePower play. Laban (Fight)Be situational and contingentUmarte kang parang intelihente. Iyong laging nag-iisipBody language ang importante (Body language is important)Pag sinabing “No”, dapat “No” talagaFrom “Pinoy Management” by Ernesto Franco, 1986
Pinoy Management ApproachesPinoy Management ApproachesManagement by “Kayod” (Realist Manager)He wants quick actionHe’s an autocratHe is siguristaHe has gut feelHe knows how to use peopleManagement by “Libro” (Idealist Manager)He is a thinker; technocrat; mabusisi; may sistemaMatigas and uloFrom “Pinoy Management” by Ernesto Franco, 1986
Pinoy Management ApproachesPinoy Management ApproachesManagement by “Lusot” (Opportunist Manager)He is galawgawWalang konsensiyaMahilig sa lusot (Loves to get by)Mahilig sa ayusanUgnayan-Management (The Hybrid)Has balanceContingency management styleHe is solidMarunong pumili (Chooses well)Pambihira talaga (Exceptionally gifted)From “Pinoy Management” by Ernesto Franco, 1986