Chapter 2

MANAGEMENT LEARNING
PAST TO PRESENT

Principles of Management – Phuoc Van Hanh

 LEARNING OBJECTIVES

Takeaway 1 Classical management approaches

Takeaway 2 Behavioral management approaches
Takeaway 3 Modern Management Foundations
• In the 1700s, Industrial Revolution: Adam Smith’s ideas of efficient
production through specialized tasks & the division of labor.

• In 20th century (1900s): Henry Ford & other were making mass
production => rapid development of the science & practices of
management.
 Takeaway 1
Classical Management Approaches

Classical approaches
Assumption: People are rational

Scientific Administrative Bureaucratic

management principles organization
Frederick Taylor Henri Fayol Max Weber

Figure 2.1 Major branches in the classical approach to

 Takeaway 1
Classical Management Approaches

Assumption:

People at work rationally consider opportunities made available to them &

do whatever is necessary to achieve the greatest personal & monetary
gain.
1. Scientific management (Frederick W. Taylor)

• Scientific management emphasizes careful selection

& training of workers & supervisory support.
(proper direction, work assistance & monetary incentives)
 1. Scientific management (cont.)

4 guiding principles:
1. Develop for every job a “science” that includes rules of
motion, standardized work implements, & proper working
conditions.
2. Carefully select workers with the right abilities for the jobs.
3. Carefully train workers to do the job & give them the
proper incentives to cooperate with the job “science”.
4. Support workers by carefully planning their work & by
smoothing the way as they go about their jobs.
 2. Administrative principles (Henri Fayol)

5 “rules” of management:
1. Foresight – to complete a plan of action for the future.
2. Organization – to provide & mobilize resources to implement the
plan.
3. Command – to lead, select, & evaluate workers to get the best work
toward the plan.
4. Coordinate – to fit diverse efforts together & to ensure information is
shared & problems solved.
5. Control – to make sure things happen according to plan & to plan
necessary corrective action.
 2. Administrative principles (cont.)

3 “principles” to guide managers in action:

1. Scalar chain principle – there should be a clear & unbroken line

of communication from the top to the bottom in the
organization.
2. Unity of command principle – each person should receive
orders from only one boss.
3. Unity of direction principle – one person should be in charge of
all activities that have the same performance objective.
3. Bureaucratic organization (Max Weber)

• A bureaucracy is a rational & efficient form of organization

founded on logic, order, & legitimate authority.
 3. Bureaucratic organization (cont.)

5 characteristics:
1. Clear division of labor: Workers are highly skilled at performing jobs.
2. Clear hierarchy of authority: Authority & responsibility.
3. Formal rules & procedures: Written guidelines & written files.
4. Impersonality: Rules & procedures are impartially & uniformly applied.
5. Careers based on merit: Workers are selected and promoted on
ability, competency, & performance.
3. Bureaucratic organization (cont.)

Fair
Impersonal
Career managers
Clear division of labor DO
NE
Promotion based on merit TO
DO
Formal hierarchy of authority
Written rules & standard procedures
The classical bureaucracy
 Takeaway 2
Behavioral Management Approaches
Organizations as communities
Mary Parker Follett

Hawthorn studies Theory X and Theory Y

Elton Mayo Douglas McGregor

Theory of
Human Personality and
human needs
Abraham
resource Organization
Maslow approaches Chris Argyris

Figure 2.2 Foundations in the behavioral or human resource approaches to

 Takeaway 2
Behavioral Management Approaches

Assumption:

People are social and self-actualizing, enjoying social relationships,

responding to group pressures, & searching for personal fulfillment.

Organizational behavior: the

study of individuals & groups
in organizations.
 1. Follet’s organizations as communities

• Organizations as “communities”: managers & workers should

labor in harmony without one party dominating the other, & with
the freedom to talk over, & truly reconcile conflicts & differences.

Þ Job of managers: help people in the organizations cooperate

with one another & achieve integration of interests.
 1. Follet’s organizations as communities
(cont.)

Follet’s emphasis on groups:

(1) Making every employee an owner in a business would create
feelings of collective responsibility.
=> today issues: employee ownership, profit sharing, & gain-sharing.
(2) Business problems involve a wide variety of factors that must be
considered in relationship to one another.
=> today issues: systems & contingency thinking.
(3) Businesses were service organizations & private profits should
always be considered vis-à-vis the public good.
=> today issues: managerial ethics & corporate social responsibility.
 2. Hawthorn Studies

Notes
• The Hawthorne Studies: the research
program to study individual The Hawthorne
productivity at the Hawthorne Works in Works was a
large factory
1924. complex of the
Western Electric
• First failure to find a link between improved Company in
lighting & productivity. Cicero, Illinois
• (1905 – 1983).
Finding: unforeseen “psychological factors”
interfered with the experiments.
 2. Hawthorn Studies (cont.)

• Social setting & human relations

+ good “human relations” seemed to result in higher productivity.

• Employee attitudes & group processes

+ work conditions or wages could be sources of satisfaction for
some workers and of dissatisfaction for others.
+ groups can have strong negative, as well as positive,
influences on individual productivity.
 2. Hawthorn Studies (cont.)

• Lessons of the Hawthorne studies

• social & human factors as keys to productivity.
• people’s feelings, attitudes, & relationships with coworkers
affected their work.
• groups were important influences on individuals.

• Hawthorne effect: the tendency of persons who are singled out

for special attention to perform as expected.
 3. Maslow’s theory of human needs

• A need is a physiological or psychological deficiency

that a person wants to satisfy.
3. Maslow’s theory of human needs (cont.)
 3. Maslow’s theory of human needs (cont.)

Self-actualization • Highest level: need for self fulfillment; to grow &

needs use abilities to fullest & most creative extent
HIGHER-
ORDER
• Need for esteem in eyes of others; need for
NEEDS
Esteem needs respect, prestige, recognition; need for self-
esteem, personal sense of competence, mastery

• Need for love, affection, sense of belongingness in

Social needs one’s relationships with other people

• Need for security, protection, & stability in the LOWER-

Safety needs events of day-to-day life ORDER
NEEDS
• Most basic of all human needs: need for biological
Physiological needs maintenance; food, water, & physical well-being

Figure 2.3 Maslow’s hierarchy of human

3. Maslow’s theory of human needs (cont.)

• Deficit principle: a satisfied need does not motivate

behavior.
• Progression principle: a need is activated only when the
next-lower-level need is satisfied.

• At the level of self-actualization, the deficit & progression

principles cease to operate. The more this need is
satisfied, the stronger it grows.
 4. McGregor’s theory X and theory Y

Managers should give more attention to the social &

self-actualizing needs of people at work.

Theory X Theory Y
• People dislike work • People are willing to work
• People lack ambition • People like responsibility
• People act irresponsibly • People are self-directed & creative
• People prefer to be led

The managers should view their employees as …

4. McGregor’s theory X and theory Y (cont.)

Managers create self-fulfilling prophecies

Theory X managers create Theory Y managers create situations

situations where … where …
workers become dependent workers respond with initiative
and reluctant and high performance
 5. Argyris’s theory of adult personality

Managers who treat people positively & as responsible

adults will achieve the highest productivity.

Scientific • Limits opportunities for self-actualization

management

Administrative • Create conditions for psychological failure

principles

Bureaucratic • Creates dependent, passive workers

organization
 Takeaway 3
Modern management foundations

1. Quantitative analysis & tools

2. Organizations as systems
3. Contingency thinking
4. Quality management
5. Knowledge management & organizational learning
6. Evidence-based management
 1. Quantitative analysis & tools

• Analytics: the systematic analysis of large databases to solve

problems & make informed decisions.
• A typical quantitative approach to managerial problem solving
proceeds as follows:

Problem is Appropriate mathematical An optimum

Problem is
systematically models & computations are solution is
encountered
analyzed applied identified
 2. Organizations as systems

• A system: a collection of interrelated parts working together

for a purpose.
• A subsystem: a smaller component of a larger system.
• An open system interacts with its environment & transforms
resource inputs into outputs.
 Organizational
network of subsystems

Purchasing & Marketing,

inventory sales, &
systems distribution
systems
Inputs Operations & Outputs
service
Suppliers management Customer
systems s

Accounting Information
& financial & technology
systems systems

Fig 2.4 Organizations as complex

networks of interacting subsystems.
 3. Contingency thinking

• Contingency thinking tries to match managerial responses with

problems & opportunities specific to different people &
settings.

Stable, uncomplicated Flexible

Bureaucratic structures
structures work well
work well
Changing, complex
 3. Contingency thinking (cont.)

There is NO “one best way” to manage in all circumstances.

 The “best” structure will depend on many factors including:

• environmental uncertainty
• an organization’s primary technology
• the strategy being pursued
 4. Quality management

• Total quality management (TQM): an organization-wide

commitment to continuous improvement, product quality,
& customer needs.
• Continuous improvement involves always search for new
ways to improve work quality & performance.

• ISO certification indicates conformance with a rigorous

set of international quality standards.
 5. Knowledge management &
organizational learning

• Knowledge management: the process of using intellectual capital

for competitive advantage.

• A learning organization continuously changes & improves, using

the lessons of experience.
 6. Evidence-based management

• Evidence-based management involves making decisions

based on hard facts about what really works.

• Hard facts include practitioner expertise & judgment,

evidence from the local context, a critical evaluation of
the best available research evidence, & the perspectives
of those people who might be affected by the decision.
 6. Evidence-based management (cont.)

The criteria to first-test in determining whether or not good scientific

methods have been used:

(1) A research question or problem is clearly identified.

(2) One of more hypotheses is stated to describe possible explanations.
(3) The research design provides for a good test of hypotheses.
(4) Data are rigorously gathered, analyzed, & interpreted.
(5) Hypotheses are accepted or ejected & conclusions made based on
evidence.
Case study
chapter 2

ZARA
INTERNATIONAL

Fashion at the
Speed of Light
 END OF
CHAPTER 2