WEEK 1: Evolution of Management

Thought

Learning Outcomes

By the end of this week you should be able to:

 Describe the nature of an organisation

 Describe who managers are and what they do
 Discuss what theory is and why it is important for managers
 Explain the history, contributions and limitations of organisations,
management and managers and the importance of management
theory
 Explain how all these perspectives contribute to the managers’
efficiency and effectiveness
 1. Organization, management and Managers

Organisation – deliberate arrangement of people, brought together to

accomplish a specific purpose. (goals, people, structure)
Characteristics:
 Distinct purpose
 People working together
 Systematic structure

Management – the co-ordination and oversight of work activities of others

so that their activities are completed efficiently and effectively.
(doing the right things, right = high effectiveness, high efficiency = right
goals, good use of resources)

Manager – someone who co-ordinates and oversees the work of others so

that goals can be accomplished (efficiently and effectively).

Top level manager (conceptual) – Organisation-wide goal setting, planning

and decision making. Sets objectives, scans environment, plans and
makes decisions.

Middle manager (human) – Oversees first-line management, reports to top

management. Allocates resources. Development and implementation of
activities.

First-line manager (technical) – Day to day operations. Manages the work

of employees. Reports to middle management. Co-ordinates activities.
What managers do:
 Planning – set goals, and course of action to achieve the goal
 Organising – Establish tasks and hierarchy to allow people to work
together
 Leading (commanding) – Motivation and coordination of individuals
and groups to achieve goals
 Controlling – Measure and monitor systems to evaluate how well
goals have been achieved. Make corrections.

Managerial roles:
Interpersonal roles
 Figurehead – ceremonial duties
 Leader – motivate and encourage to achieve goal
 Liaison – deal with people outside of their unit
Decision roles
 Negotiator – negotiate schedules, projects, goals, resources and
raises
 Resource allocator – decide who gets what
 Disturbance handler – Respond to problems
 Entrepreneur – Adapt themselves and their employees to change
Information roles
 Monitor - scan environment for information
 Disseminator - Sharing info within their department or company
 Spokesperson – sharing info with people outside their department or
company

Why we still need managers:

Hierarchy vs flat/decentralized decision making.
Managers still important under 3 scenarios:
1. When decisions are time sensitive
2. When key knowledge is held by management
3. When there is a high need for co ordination

Theory - A statement predicting which actions lead to what results and

why.
 Helps us predict the future
 Helps us understand the present
3 stages – Observation of phenomena, Classification/categorization,
develop hypothesis (what causes and why). Correlation does not equal
causation. An identifiable mechanism is needed. ‘this happens because of
this’ Should also explain how the mechanism will produce different results
in different scenarios.
 2.History of Management theory:

Classical Management perspectives

 Scientific management (Taylor)
 Administrative management (Fayol)
 Bureaucratic management (Weber)
Describe methods for enhancing efficiency and facilitating planning,
organizing and controlling. Assumes humans are rational (predictable)

Behavioral Management perspectives

Provide insights for understanding individual and group behavior as well as
motivation to increase performance and leadership.
 Constructive conflict (Mary Parker Follet)

Quantitative Management perspective

Techniques for improving decision making, resource allocation and
operations.
Based on mathematical forecasting, data analysis, inventory modeling,
scheduling systems, simulations, cost-benefit analysis.

Together these improve efficiency and effectiveness of management

Efficiency – working with minimum effort, expense or waste (doing it right)
Effectiveness – Doing the tasks to achieve goals (doing the right things)
Other approaches (more modern approach)
 Systems approach - The systems approach to management views an
organization as an interconnected system, coordinating parts to
achieve goals efficiently while adapting to external factors.

System – set of interrelated elements or parts that function as a whole to

achieve a common purpose.

Systems approach recognizes the connections and dependencies in the

parts of an organization. Each separate part is called a sub system.
Synergy occurs when a system produces more than the sum of its parts.

Organizations are open systems (interact with an depend on their

environment)

 Contingency approach - The contingency approach to management

holds that there is no one-size-fits-all management style. Effective
management depends on aligning strategies with specific situational
factors, such as environment, technology, and organizational size.
Managers adapt their approach based on these contingencies to
optimize performance. Different situations require different
solutions/theories.
VUCA –
 Volatility – Rate of change, org faces unexpected events and
problems. Ambiguity = lack of clarity of meaning of events
 Complexity – environment with many interconnected parts, key
decisions can be complicated
 Uncertainty – Lack of clarity about the present. Lack of complete
information.

The five forces (global shifts/megatrends)

1. Demographic and social change – increasing, aging population
2. Global economic power – emerging market growth slowing down
3. Rapid urbanization – huge demands on infrastructure, job creation
and environment. Companies must focus on new tech and business
models
4. Climate change and resource scarcity – companies must focus on
sustainability
5. Technological breakthroughs
Scientific Management

Identifying the best most efficient way to complete a job by studying and
testing different work methods.

t’s about figuring out the best way to do a job, training workers to do it
that way, and rewarding them for working efficiently.

4 principles:
1. Study Work Scientifically
Don’t guess—observe and measure the best way to do each
task.
2. Select and Train Workers
Pick the right people and teach them the best methods (instead
of letting them figure it out themselves).
3. Cooperate with Workers
Managers and workers should work together to follow the best
methods.
4. Divide Work and Responsibility
Managers plan and train; workers do the job—each focuses on
what they’re best at.

Motion studies
Each task broken down into separate motions/parts. Unnecessary or
repetitive motions then eliminated. Standards set for how long each task
should take.

Applied by Henry Ford in assembly line

Contributions Limitations
Developed performance efficiency Sees workers as “tools” interested
techniques only in money
Machines redesigned to fit people Assumed predictable enviroment
better – improved working
conditions
Standardization and specialization Focuses only on production – other
for smooth workflow aspects of management ignored.
Improved training Very rigid – only 1 way to do a job
Administrative Management

Rules and principles for managers to manage an organization as a whole.

Focuses on principles of management

5 Functions:
1. Planning – what needs to be done, how and when
2. Organizing – Arranging people tasks and resources
3. Coordinating – Making sure everything and everyone works together
4. Commanding/leading – Guiding and supervising employees
5. Controlling – Monitoring performance and adjusting where necessary

Contributions Limitations
The management functions Very general
Universal principles – can still be Doesn’t account for human
applied today behavior
Focuses on whole organization Assumes stable environment
Top down approach
Bureaucratic Management
Way of running organizations using clear rules, structure and strict chain of
command so that everything is fair and efficient. Based on belief that orgs
should be based on logic, laws and procedures, not favoritism or opinions.
1. Division of Work - Split work into smaller tasks to increase efficiency.
2. Authority- Managers must have the right to give orders and expect
obedience.
3. Discipline- Employees must follow rules and agreements.
4. Unity of Command- Each worker should get orders from only one
boss.
5. Unity of Direction- Everyone doing the same task should work toward
the same goal.
6. Subordination of Individual Interest- The organization’s goals come
before personal interests.
7. Remuneration- Workers should be fairly paid for their work.
8. Centralization- Decision-making should be balanced between
managers and workers.
9. Scalar Chain- A clear line of authority from top to bottom (a "chain of
command").
10. Order- Everything and everyone should be in the right place.
11. Equity- Managers should treat workers fairly and kindly.
12. Stability of Tenure- Keeping good workers is important—don't change
staff too often.
13. Initiative- Encourage workers to take ideas and act on them.
14. Esprit de Corps- Build team spirit and unity to boost morale and
performance.
Contributions Limitations
Consistency and fairness Universal procedures ignoring
complexity of environment
Efficiency in large organizations Ignored the human element
Laid foundation for later Discourages innovation
management theory
Rigid system – lack of flexibility
Behavioral School

Focuses on the human side of work – how people behave, what motivates
them and how to make them more satisfied and productive. Sees workers
as humans, not just tools or machines.

Main ideas:
 Workers motivated by more than just money – recognition, purpose
etc
 Efficiency alone is not enough
 Good communication and leadership matter
 Teamwork and group dynamics affect performance
 Managers should understand human bahviour

Key thinkers:
Abraham Maslow (Hierarchy of needs), Elton Mayo (hawthorn studies),
Douglas McGregor (Theory X theory Y, Mary Parker Follet (Human
relations and teamwork)

Contributions Limitations
Better understanding of motivation Human complexity makes
and group dynamics outcomes hard to predict
Introduced HR Managers reluctant to adopt these
ideas
Focus on leadership and Sometimes too idealistic
communication
Management Science

Uses maths, statistics and data to help managers make better decisions.
Solves business problems using scientific models and tools like computers,
simulations and formulas.

Used in decision making, problem solving and to achieve efficiency and

optimization.

Especially useful in planning and controlling.

Contributions Limitations
Improved decision making *data Large focus on numbers - may
based choices) ignore other aspects of
management eg people
Efficient use of resources Can be unrealistic – may not reflect
real life
Supports planning and controlling – Requires high skill and data to
helps predict the future implement
Strong use in complex
environments
Systems Approach

Sees an organization as a system (group of interconnected parts) working

together towards a goal. Coordination between these parts is essential to
success.

 The whole is more than its parts

 Organization takes in resources (inputs) transforms them and
produces results (outputs)
 Feedback (eg. Customer revies or sales reports) are important
 Open systems – most real businesses interact with the environment

Contributions Limitations
Promotes big picture thinking Broad and abstract
Improves coordination between Needs lots of information to fully
departments understand the system
Focuses on adaptability to Slow decision making
feedback and change
Great for managing large
businesses
Contingency Approach

Based on the premise that there is no one best way to manage. The best
way always depends on the situation. What works in one case may not
work in another.

Managers must adapt their strategy or structure based on the environment,

people and conditions.

Case view: Every situation is unique

Universalist view: There is one best way
Contingency view: Organizational phenomena exist in logical patterns.
Managers should apply the appropriate strategy to the context.
Main ideas:
 No universal rules - management should change depending on
context
 ‘it depends’ thinking – decisions based on what’s happening
 Fit is key – managers actions must fit the specific situation to be
effective
Contributions Limitations
Encourages innovation and Requires experience and
problem solving judgement from managers
Increases freedom of managers Fails to enlist all contingency
variables – doesn’t clearly list all
possible factors that could affect
management decision.
Flexible and practical – managers
should think and adjust
Adjusts well to complex situations