questions
Management theory: past present and future
Managing People and Organisations
BUSMGT 711
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3 big questions:
What is a theory
Why are theories important?
What are the continuous theoretical themes of the 21st century?
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Management practice is like being on the dance floor.
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Management theory gives the perspective of seeing the dance from the balcony.
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What do we mean by ‘theory’?
A theory is a way of explaining a causal relationship. In other words, how things work; why things happen.
Theories predict outcomes; what we might expect to happen. Theories need evidence to support their claims.
Hypotheses state a testable relationship (usually within a theoretical framework).
All theories are based on assumptions or a certain worldview.
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Say you’re a programmer and you’ve a great idea for a business start-up…
You tell a friend, who likes the idea … a lot!
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So, you ask a few friends to join you.
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Here you are on the dance floor
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Pretty soon you find that you are programming less and less and spending more and more time thinking about what others are doing, or should be doing.
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You need to start seeing things from the balcony
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So, you need to create an organisational chart
Job title and descriptions
Who reports to whom
How many people report to each manager
Managerial roles as well as non-managerial roles
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Whether you know it or not, think about it or not, everything you’ve done can be explained by one or more theories. You don’t have to know theory to act, but knowing theory helps you understand your actions and the actions of others better. Management theories explain how things work in organisations.
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Where does theory come from?
Frustrations with existing practice/problems.
Feeling that existing theories don’t explain what’s happening.
Drive to find a better way.
Clever managers as well as clever academics.
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So, theory is important, but why study management history?
Important to know ‘where we’ve come from’
See how far we’ve come
And, how sometimes we seem to being going around in circles
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This is how your smartphone was built.
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The Principles of Scientific Management
Book written by Frederick W. Taylor in 1911.
A response to work practices of the time: no standardisation; ‘seat-of-the-pants’ management.
Taylor believed the key organisational goal should be to find ‘the one best way of doing work’.
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Scientific management was based on principals of:
Systematic inquiry, rational thinking
Data-based decisions
Adherence to rules and procedures
Eliminate variation (waste)
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Time and Motion studies
Motion studies developed by husband and wife team Lillian and Frank Gilbreth.
Work was studied to see if unnecessary movements could be eliminated.
Set standards for how long each part of a task should take.
Suggested workers should be paid according to how long it took them to complete a job (outcome based, piece work).
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Process improvement (‘lean’ manufacturing)
Redesign
Improve quality
Reduce waste
Save time and money
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Bureaucratic management
A rational and efficient form of organisation founded on logic, order and legitimate authority (Max Weber)
The defining characteristics are:
a clear division of labour
a clear hierarchy of authority
formal rules and procedures
impersonality
careers based on merit.
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Why Silicon Valley needs more bureaucracy
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The Hawthorne Studies and human relations
Famous studies, which discovered by accident that giving attention to workers improved performance more than physical conditions (e.g., lighting). Lead by Elton Mayo (an Australian) while working at General Electric
We refer to this syndrome as the ‘Hawthorne Effect’
Basically, we learned there are lots of things that motivate people other than money.
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Human relations movement
Suggested efficiency alone is not enough.
Organisational success also depends on management treating workers well.
Constructive views on difference in organisations
Key figures:
Elton Mayo
Mary Parker Follett
Chester Barnard
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Why are organisations so similar?
DiMaggio and Powell identified 3 institutional pressures to conform:
Regulatory (e.g., government regulations, legal requirements)
Mimicry (i.e., firms copy successful firms)
Normative (e.g., educational and professional training)
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Jacques’ Levels of Work
OBJECTIVES
OUTCOMES
Prosperity
Stakeholder
VALUE
ROI
LEVELS
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6
5
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3
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New forms of social, political and economic institutions
Vision, building strong national and world wide presence
Direction, purposeful, challenge and maximizing assets
Innovation, change and continuity
Effective work practices, systems and productivity
Effective coordination, collective improvement and efficiency
Excellence of Task
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Modern approaches to management
Modern approaches recognise that:
no one model or theory applies universally in all situations or to the exclusion of the others
people are complex and variable; they have many different needs that can change over time and possess a range of talents and capabilities that can be developed
managers should respond to individual differences.
Contingency thinking:
tries to match managerial responses with the problems and opportunities specific to different settings, particularly those posed by individual and environmental differences
recognises that what is a good structure for one organisation may not work well for another, and what works well at one time may not work as well in the future as circumstances change.
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What management theory best fits with your world view or personal philosophy?
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Linking course content to the business simulation
Takeaways for your team:
CEOs and CFOs need to be able to look at your MikesBikes firm “from the balcony”
Understand that various operational decisions may be grounded in the principals of Scientific Management
Understand that various HR decisions may be grounded in the Human Relations movement
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