Fundamentals of

MANAGEMENT
Core Concepts & Applications
Griffin
Third Edition

Chapter 2
Traditional and Contemporary Issues and
Challenges
 The Importance of Theory and History
• Why Theory?
– A theory is a conceptual framework for organizing
knowledge and providing a blueprint for action.
– Management theories, used to build organizations, are
grounded in reality. Most managers develop their own
theories about how they should run their organizations.
• Why History?
– An awareness and understanding of important historical
developments in management are also important to
contemporary managers in furthering the development
of management practices and in avoiding the mistakes
of others in the past.

1–2
 The Historical Context of Management
• Management Through the Ages

D Greeks

C Babylonians G Venetians

B Egyptians E Romans

A Sumerians F Chinese

3000 B.C. 2500 B.C. 2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D.500 A.D.1000 A.D.1500

A Used written rules and regulations for governance E Used organized structure for communication and control

B Used management practices to construct pyramids F Used extensive organization structure for government
agencies and the arts
C Used extensive set of laws and policies for governance
G Used organization design and planning concepts to
D Used different governing systems for cities and state control the seas

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 Early Management Pioneers
• Robert Owen (1771–1858)
– British industrialist who was one of the first managers
to recognize the importance of human resources and
the welfare of workers.
• Charles Babbage (1792–1871)
– English mathematician who focused on creating
efficiencies of production through the division of labor,
and the application of mathematics
to management problems.

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 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

1–5
 Classical Management Perspective
• Scientific Management
– Concerned with improving the performance of
individual workers (i.e., efficiency).
– Grew out of the industrial revolution’s labor shortage
at the beginning of the twentieth century.
• Administrative Management
– A theory that focuses on
managing the total organization.

1–6
 Scientific Management
• Frederick Taylor (1856–1915)
– The father of scientific management approach.
– Replaced old methods of how to do work with
scientifically-based work methods to eliminate
“soldiering,” where employees deliberately worked at a
pace slower than their capabilities.
– Believed in selecting, training, teaching, and
developing workers.
– Used time studies of jobs, standards planning,
exception rule of management, slide-rules, instruction
cards, and piece-work pay systems to control and
motivate employees.

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 Frederick Taylor (1856–1915)
F. W. Taylor was concerned with four areas
• Standardization
– He studied metal-cutting operations, collected data and
systematically catalogued and stored the expensive cutting tools.
• Time and task study
– Observation of shoveling, thousands of stop watch recordings-
Large shovels for lighter materials.
• Systematic selection and training
– Studying lifting of a 92 pounds block of iron, carrying it up an
incline (36 ft) and dropping it.
• Pay incentives
– Traditionally Piece-rate system was in vogue. He introduced the
Differential Piece Rate System which meant higher per hour
wages to those who produced more than a standard minimum
limit.

1–8
 Steps in Scientific Management

1 2 3 4
Supervise employees
Develop a science Scientifically select Continue to plan
to make sure they
for each element of employees and then follow the prescribed the work, but use
the job to replace old train them to do the job workers to get the
methods for performing
rule-of-thumb methods as described in step 1 work done
their jobs

Figure 1.3
1–9
 Scientific Management Pioneers
• Frank and Lillian Gilbreth
– Both developed techniques and strategies for
eliminating inefficiency.
– Frank reduced the number of
movements in bricklaying, resulting
in increased output of 200%.
– Lillian made substantive contributions
to the fields of industrial psychology
and personnel management.

1–10
Classical Management Perspective (cont’d)
• Administrative Management Theory
– Focuses on managing the whole organization rather
than individuals.
• Henri Fayol (1845–1925)
– The father of modern operational management theory
– Was first to identify the specific management functions
of planning, organizing, leading, and controlling.
• Lyndall Urwick (1891–1983)
– Integrated the work of previous management theorists.
• Max Weber (1864–1920)
– His theory of bureaucracy is based on a rational set of
guidelines for structuring organizations.
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 Fayol introduced 14 principles of
management
1. Division of Work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity Direction
6. Subordination of individual to general interest
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of Tenure
13. Initiative
14. Esprit de corps

1–12
Classical Management Perspective…Today
• Contributions • Limitations
– Laid the foundation for – More appropriate
later developments. approach for use in
– Identified important traditional, stable,
management simple organizations.
processes, functions, – Prescribed universal
and skills. procedures that are not
– Focused attention on appropriate in some
management as a valid settings.
subject of scientific – Employees are viewed
inquiry. as tools rather than as
resources.

1–13
 Behavioral Management Perspective
• Behavioral Management
– Emphasized individual attitudes and behaviors, and
group processes, and recognized the importance of
behavioral processes in the workplace.
• Hugo Munsterberg (1863–1916)
– A German psychologist, considered the father of
industrial psychology, who advocated the practice of
applying psychological concepts to employees
selection and motivation industrial settings.
• Mary Parker Follett (1868 –1933)
– Recognized the importance of the role of human
behavior in the workplace.
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 Key Managerial Roles (Munsterberg)

Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permissions.

1–15
 The Hawthorne Studies (1927–1932)
• Conducted by Elton Mayo and associates at
Western Electric
– Illumination study—workplace lighting adjustments
affected both the control and the experimental groups
of production employees.
– Group study—implementation of piecework incentive
plan caused production workers to establish informal
levels of acceptable individual output.
• Over-producing workers were labeled “rate busters” and
under-producing workers were considered “chiselers.”
– Interview program—confirmed the importance of
human behavior in the workplace.

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 Behavioral Management Perspective
(cont’d)

• Human Relations Movement

– Grew out of the Hawthorne studies.
– Proposed that workers respond primarily
to the social context of work, including
social conditioning, group norms,
and interpersonal dynamics.
– Assumed that the manager’s
concern for workers would lead to
increased worker satisfaction and
improved worker performance.

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 The Human
Relations View
of Management

Source: Van Fleet, David D., Contemporary

Management, Second Edition. Copyright ©
1991 by Houghton Mifflin Company. Used
with permissions.

1–18
 Behavioral Management Perspective
(cont’d)

• Abraham Maslow
– Advanced a theory that employees are motivated by a
hierarchy of needs that they seek to satisfy.
• Douglas McGregor
– Proposed Theory X and Theory Y concepts
of managerial beliefs about people
and work.

1–19
 Theory X and Theory Y
• Theory X Assumptions
– People do not like work and try to avoid it.
– People do not like work, so managers have to control,
direct, coerce, and threaten employees to get them to
work toward organizational goals.
– People prefer to be directed,
to avoid responsibility, and
to want security; they have
little ambition.

Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960

by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. Table 1.1
1–20
 Theory X and Theory Y (cont’d)
• Theory Y Assumptions
– People do not dislike work; work is a natural part of their
lives.
– People are internally motivated to reach objectives to
which they are committed.
– People are committed to goals to the degree that they
receive rewards when they reach their objectives.
– People seek both seek responsibility and accept
responsibility under favorable conditions.
– People can be innovative in solving problems.
– People are bright, but under most organizational
conditions their potentials are underutilized.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. Table 1.1 (cont’d)
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 Organizational Behavior
• A contemporary field focusing on behavioral
perspectives on management.
– Draws on psychology, sociology, anthropology,
economics, and medicine.
• Important topics in organizational behavior
research:
– Job satisfaction and job stress
– Motivation and leadership
– Group dynamics and organizational politics
– Interpersonal conflict
– The structure and design of organizations

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 Behavioral Management Perspective…
Today
• Contributions
– Provided important insights into motivation, group
dynamics, and other interpersonal processes.
– Focused managerial attention on these critical
processes.
– Challenged the view that employees are tools and
furthered the belief that employees are valuable
resources.

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 Behavioral Management Perspective…
Today (cont’d)
• Limitations
– Complexity of individuals makes behavior difficult to
predict.
– Many concepts not put to use because managers are
reluctant to adopt them.
– Contemporary research findings are not often
communicated to practicing managers in an
understandable form.

1–24
 Quantitative Management Perspective
• Quantitative Management
– Emerged during World War II to help the Allied forces
manage logistical problems.
– Focuses on decision making, economic effectiveness,
mathematical models, and the use of computers to
solve quantitative problems.

1–25
 Quantitative Management Perspective
(cont’d)

• Management Science
– Focuses on the development of representative
mathematical models to assist with decisions.
• Operations Management
– Practical application of management
science to efficiently manage the
production and distribution
of products and services.

1–26
 Quantitative Management Perspective…
Today
• Contributions
– Developed sophisticated quantitative techniques to
assist in decision making.
– Application of models has
increased our awareness
and understanding of
complex processes and
situations.
– Has been useful in the
planning and controlling
processes.

1–27
 Quantitative Management Perspective…
Today (cont’d)
• Limitations
– Quantitative management cannot fully explain or
predict the behavior of people in organizations.
– Mathematical sophistication may come at
the expense of other managerial skills.
– Quantitative models may require
unrealistic or unfounded assumptions,
limiting their general applicability.

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The Systems Perspective of Organizations

Outputs into
Inputs from the Transformation
the environment:
environment: process: technology,
products/services,
material inputs, operating systems,
profits/losses,
human inputs, administrative
employee behaviors,
financial inputs, and systems, and
and information
information inputs control systems
outputs

Feedback

Figure 1.4
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 Integrating Perspectives for Managers
• Systems Perspective
– A system is an interrelated set of elements functioning
as a whole.
• Open system
– An organizational system that interacts with its
environment.

1–30
 Integrating Perspectives for Managers
(cont’d)
• Closed system
– An organizational system that does not interact with its
environment.
• Subsystems
– A system within another system.
Their importance is due to their
interdependence on each other
within the organization.

1–31
 The Systems Perspective
• Synergy
– Subsystems are more successful working together in
a cooperative and coordinated fashion than working
alone.
– The whole system (subsystems working together as
one system) is more productive and efficient than the
sum of its parts.

1–32
 The Systems Perspective
(cont’d)
• Entropy
– A normal process in which an organizational system
declines due to failing to adjust to change in its
environment
– Entropy can be avoided and
the organization re-energized
through organizational change
and renewal.

1–33
 The Contingency Perspective
• Universal Perspectives
– Include the classical, behavioral, and quantitative
approaches.
– An attempt to identify the “one best way” to manage
organizations.
• The Contingency Perspective
– Suggests that each organization is unique.
– The appropriate managerial behavior for
managing an organization depends
(is contingent) on the current
situation in the organization.

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 The Contingency Perspective (cont’d)

Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permissions.
1–35
 Contemporary Management Issues
and Challenges
• Acute labor shortages in high-technology job
sectors and an oversupply of less skilled labor
• An increasingly diverse and globalized
workforce
• The need to create challenging, motivating, and
flexible work environments
• The effects of information technology on how
people work
• The complex array of new ways of structuring
organizations
1–36
 Contemporary Management Issues
and Challenges (cont’d)
• Increasing globalization of product and service
markets
• The renewed importance of ethics and social
responsibility
• The use of quality as the basis for competition
• The shift to a predominately service-based
economy

1–37