History And Evolution Of Management Thought

The changing nature of organizations and work, the drivers behind the changes, and the consequences for workers and the workplace “ENTERING AN ERA OF DYNAMIC ENGAGEMENT” Six different themes about management theory are emerging under the umbrella that we call dynamic engagement. six management practices that impact climate

Introduction
Management and organizations are products of their historical and social times and places. Thus, we can understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular times in history

Both theory and history are indispensable tools for managing contemporary organizations. A theory is a conceptual framework for organizing knowledge that provides a blueprint for various courses of action.

Early Approaches to Management
MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES
First: Classical Approach
Forms the foundation for the field of management
The schools for management thoughts are:
1-Scientific Management
2-Administrative Theory
3-Bureaucratic Management

1-SCIENTIFIC MANAGEMENT-F.W. TAYLOR
Piece rate incentive system
Time and motion study
Major contributors:
Frederick Winslow Taylor
Frank and Lillian Gillbreth
Henry L.Gantt: Gantt scheduling chart-Henry Laurence Gantt

2-ADMINISTRATIVE THEORY- HENRY FAYOL
Technical
Commercial
Financial
Security
Accounting
Managerial

3-BUREAUCRATIC MANAGEMENT- MAX WEBER
Work specialization and division of labor
Abstract rules and regulations
Impersonality of managers
Hierarchy of organization structure

First: Classical Approach
First: Scientific Management
Early 1900s
It is defined as “that kind of management which conducts a business or affairs by standards established, by facts or truths gained through systematic observation, experiment, or reasoning.”

1-Frederick Winslow Taylor (1878)
“Father of scientific management”
Two major managerial practices:
Piece-rate incentive system
Time-and-motion study

2-Frank and Lillian Gillbreth (1868-1924)
Motion study involves finding out the best sequence and minimum number of motions needed to complete a task. Explore new ways for eliminating unnecessary motions and reducing work fatigue.

3-HENRY L.GANTT (1861-1919)
Well known for Task – and – bonus system -The Gantt chart
If the worker completed the work fast, i.e., in less than the standard time, he received a bonus. It is a Simple chart that compares actual and planned performances.

Limitations of Scientific Management
Do not focus on the management of an organization from a manager’s point of view. People were “rational” and were motivated primarily by the desire for material gain. It also ignored the human desire for job satisfaction.

First: Classical Approach
Second: Administrative Theory:
It focused on principles that could be used by managers to coordinate the internal activities of organizations. Henri Fayol (1841-1925)

Henri Fayol (1841-1925)
Fourteen principles:
1-Division of work
2-Authority and responsibility
3-Discipline
4-Unity of command
5-Unity of direction
6-Subordination of the individual interest to the general interest
7-Remuneration
8-Centralization
9-Scalar chain
10-Order
11-Equity
12-Stability
13-Initiative
14-Esprit de corps (team spirit)

First: Classical Approach
Third: Bureaucratic Management
Weber (1864-1920)
Characteristics of Weber’s ideal Bureaucracy:
Work specification and division of labor
Abstract rules and regulations
Impersonality of managers
Hierarchy of organization structure

Limitations of Bureaucratic Management and Administrative Theory Not universally applicable to today’s complex organizations. Fayol’s principles like that of specialization were frequently in conflict with the principle of unity of command. Principle characteristic of bureaucracy changes in the global environment. Classical theorists ignored the problems of leadership, motivation, power or information relations.

Second: Behavioral Approach
The behavioral approach to management emphasized individual attitudes and behaviors and group processes, and recognized the significance of behavioral process in the workplace.

HAWTHORNE STUDIES
Illumination studies
Relay assembly room study
Bank wiring room study

Contributions of Behavioral Thinkers to Management Thought
Mary Parker Follet (1868-1933)
Power, according to Follet, was the ability to influence and bring about a change. Concept of integration, which involves finding a solution acceptable to all group members

Elton Mayo (1868-1933)

Abraham Maslow: Maslow’s Hierarchy of human needs
His theory rested on these assumptions.
1-Physiological needs;
2-Safety or security needs
3-Belongingness or social needs;
4-Esteem or status needs
5-Self actualization or self-fulfillment needs.

Douglas Mcgregor

Chris Argyris
Maturity – immaturity theory
People progress from a stage of immaturity and dependence to a state of maturity and independence. Model I and Model II organization analysis:
Model I organization are manipulative
Model II organization are open to learning
Third: Quantitative Approach
It includes the application of statistics, optimization models, information models and computer simulations. More specifically, this approach focuses on achieving organizational effectiveness. Three main branches:

Management Science
Operations Management and
Management Information Systems.

Management Science
It stresses the use of mathematical models and statistical methods for decision-making. Another name is the Operations Research.

Operations Management
It deals with the effective management of the production process and the timely delivery of an organization’s products and services.

Management Information Systems
Management information systems focuses on designing and implementing computer-based information systems for business organizations.

Fourth: Modern Approaches to Management
Systems Theory
Contingency Theory
Emerging Approaches In Management Thought

Recent emerging Approaches and practices In Management Thought William Ouchi, outlined new theory called Theory Z.
It is the blend of positive aspects of both American and Japanese management styles. Quality Management is a management approach that directs the efforts of management towards bringing about continuous improvement in product and service quality to achieve higher levels of customer satisfaction and build customer loyalty.

In summary:
Today’s world, the structure, content, and process of work have changed. Hence you will also be working for an organization that is likely to be very different due to competitive pressures and technological breakthroughs. Because Organizations today are: leaner and more agile

more focused on identifying value from the customer perspective more tuned to dynamic competitive requirements and strategy
less hierarchical in structure and decision authority
less likely to provide lifelong careers and job security
Continually reorganizing to maintain or gain competitive advantage.

So the changing nature of organizations and work, the drivers behind the changes, and the consequences for workers and the workplace.

ENTERING AN ERA OF DYNAMIC ENGAGEMENT

New management theory the dynamic engagement approach. “Dynamic engagement” is our term. We use dynamic engagement to convey the mood of current thinking and debate about management and organizations. It is quite likely that twenty years from now, you will look back and call this period of movement by some other name. Dynamic is opposite of static which implies continuous change, growth, and activity; which implies intense involvement with others. We therefore think the term dynamic engagement best expresses the vigorous way today’s most successful managers focus on human relationships and quickly adjust to changing conditions over time Six different themes about management theory are emerging under the umbrella that we call dynamic engagement.

1-NEW ORGANIZATIONAL ENVIRONMENTS
The dynamic engagement approach recognizes that an organization’s environment is not some set of fixed, impersonal forces. Rather, it is a complex, dynamic web of people interacting with each other. As a result, managers must not only pay attention to their own concerns, but also understand what is important to other managers both within their organizations and at other organizations.

2-ETHICS AND SOCIAL RESPONSIBILITY
Managers using a dynamic engagement approach pay close attention to the values that guide people in their organizations, the corporate culture that embodies those values, and the values held by people outside the organization. Managers must exercise moral courage by placing the value of excellence at the top of their agendas.

3- GLOBALIZATION AND MANAGEMENT
Managers facing the twenty first century must think of themselves as global citizens. Kenichi Ohmae makes this point as he describes a “borderless” world where managers treat all customers as “equidistant” from their organizations.

4-INVENTING AND REINVENTING ORGANIZATIONS
Managers who practice dynamic engagement continually search for ways to unleash the creative potential of their employees and themselves. Michael Hammer and James Champy have made their concept of reengineering the corporation” into a bestseller.

5-CULTURES AND MULTICULTURALISM
Managers who embrace the dynamic engagement approach recognize that the various perspectives and values that people of different cultural backgrounds bring to their organizations are not only a fact of life but a significant source of contributions. Joanne Martin has pioneered the cultural analysis of organizations. She explains how differences create unprecedented challenges for modem managers. Charles Taylor is a prominent proponent of the so called “communitarian” movement

6-QUALITY
By the dynamic engagement approach, Total Quality Management (TQM) should be in every manager’s vocabulary. All managers should be thinking about how every organizational process can be conducted to provide products and services that are responsible to tougher and tougher customer and competitive standards. Strong and lasting relationships can be fruitful byproducts of a “quality” frame of mind and action, by this view. Total Quality Management adds one more dynamic dimension to management, because quality, too, is always a moving target.

REMEMBER TO CHANGE WITH THE TIMES
First, theorists, whatever their fields of endeavor, tend to be people and products of their times. Second, management theories, like theories in all fields, tend to evolve to reflect everyday realities and changing circumstances. By the same token, managers must be sensitive to changing circumstances and equally willing to change. If they do not, they must be surpassed by more flexible competitors.

How do you effectively create and manage a climate that will help your company sustain leadership and yield positive business results even amid worldwide uncertainty? Following are six management practices that impact climate:

1. Clarity: Establish clear and specific performance goals for people’s jobs.
Communicating clearly is the link between a team’s daily work and the organization’s strategy. 2. Commitment: Institute challenging yet realistic goals for employees. Inspire peak performance by connecting people to their work emotionally and intellectually. 3. Standards: Regularly review employees’ overall individual performance. Create high performance standards for the team that will push them to achieve their best. 4. Responsibility: Encourage people to initiate tasks and projects they think are important. This creates trustworthiness that uses organizational resources appropriately to achieve results. 5. Recognition: Recognize superior performance publicly and provide open and honest feedback. This will help employees grow and obtain their fullest career goals. 6. Teamwork: Conduct team meetings that serve to increase trust and mutual respect among team members. Persuade people to collaborate across the organization. This fosters a feeling of belonging to an organization that is characterized by cohesion, mutual support, trust, and pride.

One of the many new trends that have affected the organizations nowadays is: The Borderless World, Power and Strategy in the Interlinked Economy What “Borderless World” means?

I’m going to shed light on it in brief

The Borderless World, Power and Strategy in the Interlinked Economy What “Borderless World” means?
A “borderless world”… (Refers to an open world which can bring influences upon people. It may bring about changes in their culture, beliefs, traditions and others.) Patricia Evangelista

Study of borders…
-undergone a renaissance during the past decade.
-Renaissance – partly due to the emergence of a counter narrative to the borderless and deterritorialized world discourse which has accompanied much with globalization theory -has moved beyond the limited confines of the political geography discourse, crossing its own disciplinary boundaries -Until now-not successful-in creating a common language or glossary of terms Study of borders…

-contemporary studies of borders are notions such as “borders are institutions” -border terminologies focus on the binary distinction between “us” and “them”, the “included” and “excluded” -Should be studied not only from a top-down perspective but also from the bottom up -with a focus on the individual border narratives and experiences, reflecting the ways in which borders impact upon the daily life practices of people living in and around the borderland and transboundary transition zones.

Business in a Borderless World
Kenichi Ohmae argues…
-borders and nation states are becoming irrelevant and explains that “fundamental paradigm shift has occurred that is changing the way business is being done…and is operating under the old rules.

Business in a Borderless World
Globalization… is redefining the way companies do business.

Managing in a Borderless World
-identifies the purpose for the companies to go abroad and trying to invest in foreign countries regardless of the way to enter it, like joint ventures, wholly owned businesses, licensing …but effective global operations require a genuine equidistance of perspectives. But even with the best will in the world, managers find that kind of vision hard to develop and harder to maintain.

Managing in a Borderless World
Managing effectively in this new borderless environment does not mean building pyramids of cash flow by focusing on the discovery of new places to invest, nor does it mean tracking our competitors to their lair and pre-emptively undercutting them in their own home market.

Managing in a Borderless World
Most managers in all big companies are trying to increase their sales andmarket share, but the only way nowadays is to search for new  market where there are new opportunities (especially in the far east) in order to expand their businesses.

Managing in a Borderless World
The major purpose to go internationally is due to the intensive and huge competition the companies are facing in their local markets, domestic and foreign competition.

Managing in a Borderless World
The other factors that lead managers to manage in a borderless world are the cost factor that all companies care about because it will identify the marginal profit.

Threats that Management Should Take Into Considerations
Economic situation of the country
The currency rate
Interests rates
Inflation rate
Unemployment rate

Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization

1 Dispersion
Even original equipment manufacturers with captive technology are not immune from dispersion.

2 Partnerships
Nothing stays propriety for long and no player can master everything

3. Reduce fixed costs
To compete with the global markets, companies have to incur and show find a way to defray – immense fixed costs.

4. Brand
You must spend enough money on brand promotion to realize benefits.

5. The Government’s Role
Governments have become the major obstacle for people to have the best and the cheapest from anywhere in the world.

6. Equidistance
Companies that are globally successful in white goods focus on close interactions with individual users; where as those that prosper with equipment installation focus on interactions with designer, engineer, and trade unions.

7. Customer Oriented Strategies
Sometimes getting back to strategy means getting back to a deep understanding of what product is about.

8. Demand
Maintaining the customer relationship through good service is the key to success.

CONCEPT OF INTERLINKED ECONOMY
The concept of the interlinked economy is obviously now more apparent than it was in the 1990s. At the height of globalization, developed countries in the west were able to export their products thereby increasing their consumer base and business influences. Today, countries are confronted with the borderless nature of business transactions. Instead of fighting this reality, those that embrace the shift are more likely to benefit in global competitiveness.

Business in a Borderless World
In today’s dynamic business battlefield, strategy creates the macro picture; our assets are positioned, we know what the competition is doing and we deliver. Tactics help us to maneuver our way around unexpected roadblocks, without losing sight of our strategic objectives.

On Why Size Matter
In certain industries, size is very important. It gives an advantage in costs, reach and technology. In other businesses, size matters less. In the natural world, ants account for 10 per cent of all biomass. These small creatures have found ways to be incredibly successful, and can take on even the mighty elephant. The question is, does one want to be an incredibly dynamic and flexible but small ant, or an all-powerful elephant?

On Managing Diversity
Whether conglomerates are optimal organisation strategists is a hotly debated question today. Research shows that premium conglomerates can create incredible value. One of the best performing companies in the last 20 years has been GE, which is extremely diverse. And there is also a lot of research to suggest that diverse businesses are particularly appropriate to dynamic, emerging markets.

On Managing Diversity
We have a way of managing diversity that is centred around a strong belief in decentralisation. The companies run themselves; they are not dependent on the centre.

The key to success is taking quick and good decisions, as well as their managements seizing the initiative and taking responsibility.

On the challenges of the future
Hard work, preparation, research, thinking, getting the value proposition right and serving the customer better, can take care of the economic challenges. We have more high quality people available at a lower cost than most of our competitors in the international market place. But these advantages will erode as the competition replicates them. Besides, the cost base will also increase in the future. What the group would then need to do is to move its competitive advantage over time.

On looking ahead
One thing that will not change is the values of the group and its desire to serve customers well in the marketplace. So whether the corporate centre looks different, whether it is in one place or distributed, doesn’t really matter. What matters is that our soul, embodied in the group’s values, will still be the same. And, what is more, we will have successful world-class and larger scale companies.

Tax in a borderless world
Achieving tax compliance is a challenge facing governments the world over. Action can be taken. Jeffrey Owens
OECD Centre for Tax Policy and Administration

Tax in a borderless world

Globalization brings costs and benefits, even for the tax professional. The move towards a borderless world has opened up new opportunities for taxpayers to minimize their overall tax liabilities. Much of this tax planning is legitimate.

Managing Across Borders: New Strategic Requirements

INTERNATIONAL BUSINESSES FACED NEW STRATEGIC challenges in the 1980s. Corporations that had once succeeded with relatively one-dimensional strategies—efficiency, responsiveness, or ability to exploit learning—were forced to broaden their outlook. Successful “transnational” corporations integrated all three of those characteristics. They did so by building on the strengths— but accepting the limitations—of their administrative heritages. All of the citizens of this world has some obligations to make this world a better place to live, but not only is the ultimate obligation. The ultimate obligation is to know more. If we can only work for the ultimate obligations then miracles will happen. Let’s do our part of the obligation. In that way soon our world will be borderless.

References:

http://www.wbdg.org/resources/chngorgwork.php
http://www.trainingmag.com/content/6-management-practices-affecting-workplace-climate http://faculty.wwu.edu/dunnc3/rprnts.historyofmanagementthought.pdf http://www.slideshare.net/chaimoreno/borderless-world