Chapter Two

Traditional and
Contemporary
Issues and
Challenges
 Learning Objectives
After studying this chapter, you should be able to:

1. Summarize and evaluate the classical perspective on

management, including scientific and administrative management,
and note its relevance to contemporary managers.
2. Summarize and evaluate the behavioral perspective on
management, including the Hawthorne studies, human relations
movement, and organizational behavior, and note its relevance to
contemporary managers.
3. Summarize and evaluate the quantitative perspective on
management, including management science and operations
management, and note its relevance to contemporary managers.
4. Discuss the systems and contingency approaches to
management and explain their potential for integrating the other
areas of management.
 Case

You are a management

consultant and is
required to recommend
ways to increase the low
productivity of Bapcos
workers at oil processing
department.
 How to increase productivity?

Find ways to Find ways to Find ways to

increase the understand improve the
efficiency of the individuals operation,
individual behavior, decision making
workers and the groups and and resource
whole teams, to allocation
orgnisation motivate them
and effectively
lead them
 How to increase productivity?

Find ways to Find ways to Find ways to

increase the understand improve the
efficiency of the individuals operation,
individual behavior, decision making
workers and the groups and and resource
whole teams, to allocation
orgnisation motivate them
and effectively
lead them

Classical Behavioral Quantitative

 Management Perspective

Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives

Universal Mgt Perspective: One best way

 Management Perspectives

Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
enhancing vating performance improving decision
efficiency and and understanding making, resource
facilitating planning, individual behavior, allocation, and
organizing, and
groups and teams, operations
and leadership
controlling
 Systems Approach Contingency Perspective
An Integrative Recognition of internal Recognition of the situational
Framework of interdependencies nature of management
Management Recognition of Response to particular
environmental influences characteristics of situation
Perspectives
Classical Behavioral Quantitative
Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
Universal enhancing vating performance improving decision
Management efficiency and and understanding making, resource
facilitating planning, individual behavior, allocation, and
Perspectives organizing, and groups and teams, operations
controlling and leadership

Effective and efficient management

THE MANAGEMENT PERSPECTIVE

THE UNIVERSAL MANAGEMENT PERSPECTIVE

Classical
Scientific Management
Administrative Management

Behavioral
Hawthorn Study
The Human Relations Movement
Organizational Behavior

Quantitative
Management Science
Operation Management

INTEGRATING PERSPECTIVES FOR MANAGERS

System Approach
Contingency Theory
 Classical Management Branches
Scientific Management
Increasing the efficiency
of the individual worker

Administrative
Management
Focuses on managing the
total organization
Scientific Management Perspective

Fredrick Taylor Frank and Lillian Gilbreth

Henry Gantt Harrington Emerson

 Fredrick Taylor

Soldiering Employees deliberately working at a

slow pace

To increase the efficiency of the individual

worker
Redesigned Jobs: Observe, Select, Train , Implement PPS

Piecework pay system Any work that is produced above

the target level of output will be paid by the piece

Rest periods
 Frank and Lillian Gilbreth

(Husband and Wife) Industrial engineers

Frank Bricklaying
Standardization of Materials
Procedures to perform the job
Result- Increase output by 200%

Lillian Industrial psychology + Personnel mgt

Both Cheaper by the Dozen

 Henry Gantt

Developed other
techniques,
including the Gantt
chart, to improve
working efficiency
through
planning/scheduling
 Henry Gantt A scheduling Devise

Completed Week 1 Week 2 Week 3 Week 4

Planned 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26

1. Design

2. Purchase Parts

3. Fabricate Bodies

4. Fabricate Frames

5. Build Drive Trains

6. Assemble Carts

7. Test Carts
 Harrington Emerson

Consultant -1910

Interstate Commerce
Commission

By using Scientific management

railroads could save $1 million a
day

Advocated job specialization in

both managerial and operating
jobs.
How would the scientific mgt scholars improve
the productivity of workers at Bapco?

Fredrick Taylor Frank and Lillian Gilbreth

Henry Gantt Harrington Emerson

How would the following scientific management scholars
improve the productivity of workers at Bapco?

Frank and
Fredrick Taylor Lillian Gilbreth

Harrington
Henry Gantt Emerson
 Classical Management Branches
Scientific Management
Increasing the efficiency of
the individual worker

Administrative
Management
Focuses on managing the
total organization
 Administrative Management

Focuses on managing the total

organization

Henry Fayol,
Max Weber
Chester Barnard
Lyndall Urwick
Administrative Management Perspective

Henry Fayol Max Weber

Chester Bernard Lyndal Urwick

 Henri Fayol

French industrialist

Systematize the
practice of management

Identified managerial
functions
 Max Weber

German Sociologist
Bureaucratic
Structure
guidelines for
structuring the
organization in the
most efficient way
 Chester Barnard
The Functions of the
Executive- book

Subordinates Acceptance of
Authority
= f (understands it;
able to comply with it;
views it as appropriate)
 Lyndall Urwick

Scientific Mgt + Administrative

Mgt

Advanced our thinking managerial

functions and managerial
effectiveness

No specific new contributions but

rather the integration of the
previous theories
Administrative Management Perspective

Henry Max
Fayol Weber

Chester Lyndal
Bernard Urwick
 Contributions Limitations

Foundations - Is it appropriate now

Identified - Is it universal
processes, skills,
functions

- Is it right to treat
mgt valid subject employees as tools
of scientific inquiry
The Behavioral Management Perspective

Placed emphasis on
individual attitudes
and behaviors and
on group
processes and
recognized the
importance of
behavioral
processes in the
work place.
Branches of Behavioral Mgt Perspective

Hawthorne Studies

The Human Relations

Movement

Organizational
Behavior
 Hawthorn Studies
Years 1927-1932
Founder
Elton Mayo & Colleagues
Place Western Electric

Lighting Experiment
Piecework Incentive Pay
Interview program
 Hawthorn Studies - Findings

Importance of Human
Element

Recognition - Feeling
important

Belonging to a group
relationships
 The Human Relations Movement
Proposed that workers
respond primarily to the
social context of the
workplace, including
social conditioning,
group norms, and
interpersonal dynamics

Maslows Hierarchy of
Need

McGregor Theory X &

Y
 Maslows Hierarchy of Needs

Self-actualization needs

Esteem needs

Social needs

Safety needs

Physiological needs
 Behavioral Theory on How Employees Behave Toward Work - pessimistic

Employees

dislike work.

are irresponsible.

lack ambition.

resist change.
Another Theory on How Employees Behave Optimistic

Employees are

willing to work.

self directed.

accept responsibility.

creative.

self-controlled
 Organizational Behavior
Psychology, sociology, anthropology, economics, and
medicine.
Individual + Group + organizational processes

Stress, motivation, group dynamics, interpersonal

conflict, job satisfaction, organizational politics
 Contributions Limitations

+ Challenged - Prediction of
thinking human behavior

+ Insights into
- motivation - Adaptation
- group dynamics
- interpersonal - Communication
processes in
 The Quantitative Management Perspective

Decision making,
mathematical models,
use of computers

Management
Science

Operations
Management
 The Quantitative Management Perspective
Management Science
Focuses specifically on the
development of mathematical
models (simplified representation
of a system, process, or a
relationship)

Operations Management
Applies quantitative techniques
(mgt science) to management to
help the organization produces
goods and services more
efficiently and to run the operation
Inventory Mgt
Linear Programming
Mgt Science and Operations Management
Mgt Science and Operations Management
 Mgt Science and Operations Management
BEQ = FC / (TC-VC)

Development mathematical equation

Application of Mathematical Equation using BEQ to determine

the minimum quantity that must be produced to cover all the
costs
 Contributions Limitations

Techniques to assist - Not fully able to

in decision making predict human
behavior
Awareness of
complex
organizational - Costs vs. other
processes skills
Planning and
controlling - Assumptions
Are the three
management
perspectives
contradictory or
complimentary
 Integrating Perspectives for Managers
A complete understanding of management requires
an appreciation of, classical, behavioral, and
quantitative approaches.

The systems perspectives and

Contingency perspectives
 An Integrative Framework of
Management Perspectives
Systems Approach Contingency Perspective
Recognition of internal Recognition of the situational
interdependencies nature of management
Recognition of Response to particular
environmental influences characteristics of situation

Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
enhancing vating performance improving decision
efficiency and and understanding making, resource
facilitating planning, individual behavior, allocation, and
organizing, and groups and teams, operations
controlling and leadership

Effective and efficient management

Copyright Houghton Mifflin Company. All rights reserved.

 The Systems Perspective
of Organizations
Transform
Inputs from ation Outputs
the into
Process:
environment: the environment:
technology,
material inputs, products/services,
operating
human inputs, systems, profits/losses,
financial inputs, and administrative employee behaviors,
information inputs. systems, and and information
control systems outputs

Feedback
 Match the example with the appropriate concept that illustrates it:
Open system, Closed System, Subsystem, Synergy, Entropy

Hewlett-Packard and Compaq is merger is based on the notion that

working together in a cooperative and coordinated fashion will benefit
the two companies more than working alone.

IN ALBA, a decision that was taken by the production department to

lower he quality of the materials used will effect the Finance and
marketing departments. There is an autonomy for each department, but
decisions of one department affects the others. This is because the
departments are -------------.

One of the reasons attributed to the failure of Bahrain Cinema Company

in the 80s was that they ignore the effect of the of VCRs (videos) on
their demand.

UOB monitors the quality of its services by requiring students to

evaluate their instructors and the subject.

The main reason attributed to ENRONs failure is overlooking a simple

process of checking the money used versus the quota of their brokers.
The System Perspective - Concepts

Open system
Closed systems
Subsystem
Synergy
Entropy
 Open System

An
organizational
system that
interacts with
its
environment
 Closed System

An organizational
system that
doesnt interacts
with its
environment
 Subsystem

A system
within
another
broader
system
 Synergy

Synergy two or
more
subsystems
working together
may often be
more successful
then working
alone
 Entropy

A normal
process
leading to
system
decline
 Contingency vs. Universals
Universal perspective:
tempting to identify one
best way.

Contingency perspective:
depending on
elements in that situation.
 Figure 2.5: The Emergence of Modern
Management Perspectives

Copyright Houghton Mifflin Company. All rights reserved.

 Contemporary Mgt Challenges
Labor shortage
Management of diversified workforce
Values, goals and beliefs of the new generation
workforce
Management of change
Organizational Structure
Information Technology
Globalization and its effect
Ethics and social responsibility
Quality & its importance for competitiveness
Service Economy
 Labor Shortage
Advancement in technology
Demand for technology-related employees (salaries)
Effect on Lower-skills jobs

Management of Diversified Workforce

Differences among people
Internationalization factor
Difficulty in management

Values, Goals and Beliefs of the New

Generation Workforce
Less devoted to long-term career prospects
Less to Conformity and uniformity
How to attract and motivate
Flexibility
 Management of Change
Rapid and constant environment change
Change is an opportunity

New Technology
Internet, e-business, e-government, Information technology
Investment in technology
Employee-privacy
Decision-making quality
Physical or virtual offices

Organization Structure
Webers bureaucratic structure
Now, Flat structure
 Globalization
Role of government in business
Behavioral processes vary widely
Values and beliefs of Bahraini vs. Japanese employee

Ethics and Social Responsibility

Business scandals
Increased contributions to social issues

Quality
Used as a base for competition
Quality and productivity

Service Economy
Traditionally, manufacturer
Now, half of GDP of USA from service industries