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Majo r Q uestio n s Y ou S hou ld B e A ble t o A nsw er

2.1 Evolving V iewpoints: How W e Got to Today’s Management Outlook

Major Question: What’ s the payof f in studying dif ferent management perspectives, both

yesterday’s and today’ s?

2.2 Classical Viewpoint: Scientiﬁc & Administrative Management

Major Question: If the name of the game is to manage work more efﬁciently , what can the

classical viewpoint teach me?

2.3 Behavioral Viewpoint: Behaviorism, Human Relations, & Behavioral Science

Major Question: To understand how people are motivated to achieve, what can I learn from

the behavioral viewpoint?

2.4 Quantitative V iewpoints: Management Science & Operations Management

Major Question: If the manager ’s job is to solve problems, how might the two quantitative

approaches help?

2.5 Systems V iewpoint

Major Question: How can the exceptional manager be helped by the systems viewpoint?

2.6 Contingency V iewpoint

Major Question: In the end, is there one best way to manage in all situations?

2.7 Quality-Management V iewpoint

Major Question: Can the quality-management viewpoint of fer guidelines for true

managerial success?

2.8 The Learning Organization in an Era of Accelerated Change

Major Question: Organizations must learn or perish. How do I build a learning

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th e m an ag er’s t o olb ox

M in d-s e ts : H ow D o Y ou G o a b out L earn in g?

Lea rn o r d ie . I s n ’t th at th e c h alle n ge to u s a s in div id uals ? T hro ughout y our c are er, y our s u ccess w ill d ep en d

o n y our c o nsta n tly b ein g a le arn er, m ak in g c h oic es a b out h ow to so lv e v ario us p ro ble m s— whic h to ols to

a p ply , in clu din g th e th eo rie s w e w ill d esc rib e in th is c h ap te r. H ow ev er, o ne b arrie r to le arn in g th at a ll o f u s

n eed t o b e a w are o f i s o ur m in d-s e t .

T he E nem y o f L ea rn in g

B y th e tim e w e a re g ro w n, th e m in ds o f m an y o f u s h av e b eco m e s e t in p atte rn s o f th in kin g, th e r e su lt o f o ur

p ers o nal e x perie n ces a n d v ario us e n vir o nm en ts , th at a ff e ct h ow w e re sp ond to n ew id eas. T hese m in d-s e ts

d ete rm in e w hat i d eas w e t h in k a re i m porta n t a n d w hat i d eas w e i g nore .

B ecau se w e c an ’t p ay a tte n tio n to a ll th e e v en ts th at o ccu r a ro und u s, s a y th e a u th ors o f a b ook o n c ritic al

a n aly sis , “o ur m in ds ﬁlte r out so m e obse rv atio ns an d fa cts an d le t oth ers th ro ugh to our co nsc io us

aw are n ess.” 1 H ere in lie s th e d an ger: “ A s a r e su lt, w e s e e a n d h ear w hat w e s u bco nsc io usly w an t to a n d p ay

little a tte n tio n t o f a cts o r o bse rv atio ns t h at h av e a lr e ad y b een r e je cte d a s u nim porta n t.”

H av in g m in d-s e ts m ak es lif e co m fo rta b le . H ow ev er, as th e fo re g oin g w rite rs poin t out, “F am ilia r

re la tio nsh ip s a n d e v en ts b eco m e so c o m m onpla ce th at w e e x pect th em to c o ntin ue fo re v er. T hen w e ﬁ nd

o urs e lv es c o m ple te ly u npre p are d t o a ccep t c h an ges t h at a re n ecessa ry e v en w hen t h ey s ta re u s i n t h e f a ce.” 2

W hat’s Y ou r M in d-s e t? T w o V ie w s

W hat w ill b e y our a p p ro ach to s tu dyin g m an ag em en t th eo ry ( o r a n yth in g e ls e in th is b ook)? I f y ou c an ’t “ g et

it” rig ht a w ay, w ill y ou ta k e th at a s a re ﬂ ectio n o n y our b asic in te llig en ce— th at y ou’re s o m eh ow d eﬁ cie n t,

t h at p eo ple w ill t h in k y ou’re d um b a n d y ou ’ll f e el l ik e a l o se r?

B ase d o n 2 0 y ears o f re se arc h , S ta n fo rd p sy ch olo gy p ro fe sso r C aro l D weck su ggests th at t h e v ie w y o u

adopt a bout y o urse lf p ro fo undly a ffe cts th e w ay y o u le a d y o ur life — in clu din g h ow y ou le arn . I n o ur v ie w s o f

ours e lv es, s h e s a y s, m ost o f u s h av e e ith er a ﬁ xed m in d-s e t o r a g ro w th m in d-s e t. 3

• T he ﬁ xed m in d-s e t— belie v in g y ou r b asic q ualit ie s a re c a rv ed i n s to n e. P eo ple w ith a ﬁ xed m in d-s e t a re

c o ncern ed a b out h ow t h ey w ill b e j u dged , a s o n i n te llig en ce o r p ers o nal q ualitie s. T hey b elie v e “ M y

in te llig en ce i s s o m eth in g v ery b asic t h at c an ’t b e c h an ged v ery m uch .” O r, “ I’m a c erta in k in d o f p ers o n,

an d t h ere ’s n ot m uch t h at c an b e d one t o c h an ge t h at.” T hey c are l e ss a b out l e arn in g t h an l o okin g b ad w hen

fa ilu re o ccu rs .

• T he g ro w th m in d-s e t— belie v in g y ou r b asic q ualit ie s c a n b e c h an ged t h ro u gh y ou r e ffo rt. P eo ple w ith

a g ro w th m in d-s e t a re c o ncern ed w ith i m pro vin g. T hey t h in k, “ Y ou c an a lw ay s c h an ge y our i n te llig en ce

q uite a b it.” O r, “ Y ou c an a lw ay s c h an ge b asic t h in gs a b out t h e k in d o f p ers o n y ou a re .” F ailu re f o r t h ese

k in ds o f p eo ple m ay w ell f e el b ad , b ut i n ste ad o f h id in g t h eir d eﬁ cie n cie s f ro m o th ers t h ey t r y t o o verc o m e

th em . F ortu nate ly , b y a p ply in g t h em se lv es, p eo ple o f a ﬁ xed m in d-s e t c an d ev elo p a g ro w th m in d-s e t.

F or D is c u ssio n Y our a p pro ach to le arn in g w on’t s to p o nce y ou le av e s c h ool. A s w e d is c u ss a t th e e n d o f th is

c h ap te r, m ost o rg an iz atio ns n ow a re “ le arn in g o rg an iz atio ns,” in w hic h e m plo yees a re c o ntin ually r e q uir e d to

e x pan d th eir a b ility to a ch ie v e re su lts b y o bta in in g th e rig ht k now le d ge a n d c h an gin g th eir b eh av io r. T hus,

y our m in d-s e t m atte rs . W hic h t y pe a re y ou? W hat c an a p ers o n b eg in t o d o t o m ove f ro m a ﬁ xed m in d-s e t t o a

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This c h ap te r g iv es y ou a s h ort o verv ie w o f th e th re e p rin cip al h is to ric a l p ers p ectiv es o r v ie w poin ts o n m an ag em en t

— cla ssic a l, b eh avio ra l, a n d quantita tiv e . It th en d esc rib es th e th re e p rin cip al c o nte m pora ry v ie w poin ts — sy ste m s,

c o ntin gen cy, a n d quality -m anagem en t . F in ally , w e c o nsid er t h e c o ncep t o f le a rn in g o rg aniz a tio ns.

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Evolv in g V ie w poin ts : H ow W e G ot t o T od ay’s

M an agem en t O utlo ok

W hat’s t h e p ayoff i n s tu dyin g d if f e re n t m an ag em en t p er sp ec tiv es, b oth

y este rd ay’s a n d t o d ay’s ?

T H E B IG P IC TU RE

After studying theory , managers may learn the value of bringing rationality to the decision-

making process. This chapter describes two principal theoretical perspectives—the historical

and the contemporary . Stud ying management theory provides understanding of the present, a

guide to action, a source of new ideas, clues to the meaning of your managers’ decisions, and

clues to the meaning of outside events.

“The best way to predict the future is to create it,” Peter Drucker said.

The purpose of this book is, to the extent possible, to give you the tools to create your own future in your

career and as a manager .

Cre atin g M odern M an ag em en t: T he H an dbook o f P ete r D ru ck er

Who is Peter Drucker? “He was the creator and inventor of modern management,” says management guru

Tom Peters (author of In Sear ch of Excellence ). “In the early 1950s, nobody had a tool kit to manage these

incredibly complex organizations that had gone out of control. Drucker was the ﬁrst person to give us a

handbook for that.” 4

An Austrian trained in economics and international law , Drucker came to the United States in 1937, where

he worked as a correspondent for British newspapers and later became a college professor . In 1954, he

published his famous text The Practice of Management, in which he proposed that management was one of

the major social innovations of the 20th century and that it should be treated as a profession, like medicine or

law. In this and other books, he introdu ced several ideas that now underlie the organization and practice of

management—that workers should be treated as assets, that the corporation could be considered a human

community , that there is “no business without a customer ,” that institutionalized management practices were

preferable to charismatic cult leaders.

Many ideas that you will encounter in this book—decentralization, management by objectives, knowledge

workers—are directly traceable to Drucker ’s pen. “Without his analysis,” says one writer , “it’ s almost 6/6/2017 University of Phoenix: Management

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impossible to imagine the rise of dispersed, globe-spanning corporations.” 5 In our time, Druck er’s rational

approach has culminated in evidence-based management , as we describe in Section 2.6 in this chapter .

Tru e l e a rn er. I n h is 7 0-y ear c are er, P ete r D ru ck er p ublis h ed o ver 3 5 b ooks a n d n um ero us o th er p ublic atio ns,

re ceiv ed t h e P re sid en tia l M ed al o f F re ed om , a n d a ch ie v ed n ear r o ck -s ta r s ta tu s f o r h is m an ag em en t i d eas, w hic h

in ﬂ uen ced o rg an iz atio ns f ro m G en era l E le ctr ic t o t h e G ir l S co uts . A t r u e l e arn er w ho c o nsta n tly e x pan ded h is

k now le d ge, h e u nders to od t h at n ew e x perie n ce s a re k ey t o n urtu rin g n ew i d eas a n d n ew v en tu re s. D o y ou h av e t h is

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EX AM PL E

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Six P ra ctic al R easo ns f o r S tu dyin g T his C hap te r

“Theory ,” say business professors Clayton Christensen and Michael Raynor, “o ften gets a bum

rap among managers because it’s associated with the word ‘theoretical,’ which connotes ‘impractical.’ But it

shouldn’ t.” 6 After all, what could be more practica l than studying different approaches to see which work

best?

Indeed, there are six good reasons for studying theoretical perspectives:

1. Understanding of the pr esent. “Sound theories help us interpret the present, to understand what is

happening and why,” say Christensen and Raynor . 7 Understanding history will help you understand

why some practices are still favored, whether for right or wrong reasons.

2. Guide to action. Good theories help us make predictions and enable you to develop a set of

principles that will guide your actions.

3. Source of new ideas. It can also provide new ideas that may be useful to you when you come up

against new situations.

4. Clues to meaning of your managers’ decisions. It can help you understand your ﬁrm’ s focus, where

the top managers are “coming from.”

5. Clues to meaning of outside events. It may allow you to understand events outside the or ganization

that could affect it or you.

6. Producing positive r esults. It can help you understand why certain management practices—such as

setting goals that stretch you to the limit (stretch goals), basing compensation and promotion on

performance, and monitoring results—have been so successful for many ﬁrms. 8

Pages f r o m a G am e C om pan y’s E m plo yee G uid e I n F la tn ess

L ie s G re a tn ess:

If Management 1.0 is what we’re used to now , with its traditional pyramid hierarchy, what would

Management 2.0 look like? What if, as management thinker Gary Hamel suggests, Management 2.0

looked a lot like Web 2.0 as represented in Wikipedia, YouT ube, and other online communities? 9 Could

the traditional hierarchy of boxes with lines actually become a corporate straitjacket?

Is Hierar chy Overrated? Bellevue, Washington–based Valve Corp. is an online entertainment and

technology company that has created several award-winning games (Half Life, Portal) as well as Steam,

an online gaming platform. Its staf f con sists of (1) all the employees and (2) a founder/president—who

is not a manager . In fact, “we don’t have any management,” says Valve’ s em ployee handbook, “and

nobody ‘reports to’ anybody else.” 10

In other words, Valve is a ﬂat or ganization, de ﬁned as one with few or no levels of management (as

we discuss further in Chapter 8 ). Ind eed, Valve is the ﬂattest of ﬂat organizations because for an

employee, says the handbook, it “remo ves every organizational barrier between your work and the

customer enjoying that work.”

Desks with Wheels. Not only do Valve employees have no managers, but they get to select which

projects they want to work on, have the power to green-light (approve) new projects, and even ship

ﬁnished products. Every employee’ s desk has wheels, serving two purposes. “The ﬁrst is a symbolic

reminder that one should always consider where they could move to be more valuable,” says one 6/6/2017 University of Phoenix: Management

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account. “The other is literal—team members often move their desks close together when working on a

project.” 11 I nstead of managers , V alve relies on rotating team leaders (called “group contributors”), who

change according to each project.

YO UR C ALL

The basic reason Valve has no formal managers is that it wants to attract the best talent and produce

outstanding products year after year. Clearly , the ﬂat structure works very well for Valve—as it does for

other orga nizations, proﬁt and not-for -proﬁt alike, that operate in a rapidly changing environment,

depend on innovation to stay on top, and have a shared purpose. 12 Fl attened hierarchies even work for

some large organizations, such as W.L. Gore, maker of Gore-T ex fabric, which employs 10,000 people.

Why do you think, then, that many organizations resist using ﬂat structures? Do you think studying

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Theo ry u nderlie s a ll t h e a ch ie v em en ts o f b usin ess. S om e o f t h e g re ate st c o m pan ie s i n t h e w orld a re

h ead quarte re d i n t h ese N ew Y ork C ity s k ysc ra p ers : A m eric an E xpre ss, C olg ate -P alm oliv e, J .P . M org an C hase ,

Je tB lu e A ir w ay s, M acy ’s , N BC U niv ers a l, R alp h L au re n , a n d T im e W arn er. A n um ber o f s ta rt- u ps a re a ls o b ase d

in N ew Y ork : E ts y , F ab , F ours q uare , G ilt, M eetu p, S hu tte rs to ck , a n d T um blr . T he l a u nch , g ro w th , a n d p ro ﬁ ta b ility

o f b usin esse s a ll d ep en d o n e x ecu tio n o f s o li d m an ag em en t t h eo ry .

T w o O vera rc h in g P ers p ectiv es a b out M an ag em en t: H is to ric al &

C onte m pora ry

In this chapter , we describe two overarching perspectives about management. (See Figure 2.1 .) They are:

The historical perspective (1911–1950s) includes thr ee viewpoints— classical, behavioral, and

quantitative.

The contemporary perspective (1960s–present) also includes thr ee viewpoints— systems,

contingency, and quality-management.

FIG URE 2 .1 T he T w o O vera rc h in g P ersp ectiv es— His to ric a l a n d C on te m pora ry 6/6/2017 University of Phoenix: Management

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Cla ssic a l V ie w poin t: S cie n tiﬁ c &

A dm in is tr a tiv e M an agem en t

If t h e n am e o f t h e g am e i s t o m an age w ork m ore e fﬁ cie n tly , w hat c a n t h e

cla ssic a l v ie w poin t t e a ch m e?

T H E B IG P IC TU RE

The thr ee historical management viewpoints we will describe include (1) the classical,

described in this section; (2) the behavioral; and (3) the quantitative. The classical viewpoint,

which emphasized ways to manage work more efﬁciently , had two approaches: (a) scientiﬁc

management and (b) administrative management. Scientiﬁc management, pioneered by

Frederick W. Taylor and Frank and Lillian Gilbreth, emphasized the scientiﬁc study of work

methods to improve the productivity of individual workers. Administrative management,

pioneered by Henri Fayol and Max Weber , was concerned with managing the total

organization.

Bet you’ve never heard of a “therblig,” although it may describe some physical motions you perform from

time to time—as when you have to wash dishes, say. A made-up word you won’ t ﬁnd in most dictionaries,

therblig was coined by Fran k Gilbreth and is, in fact, “Gilbreth” spelled backward, with the “t” and the “h”

reversed. It refers to 1 of 17 basic motions. By identifying the therbligs in a job, as in the tasks of a bricklayer

(which he had once been), Frank and his wife, Lillian, were able to eliminate motions while simultaneously

reducing fatigue.

The Gilbreths were a husband-and-wif e team of industrial engineers who were pioneers in one of the

classical approaches to management, part of the historical perspective (191 1–1950s). As we mentioned, there

are three historical management viewpoints or approaches. 13 (See Figur e 2.2 , next page.) They are

Classical viewpoint—191 1–1947

Behavioral viewpoint—1913–1950s

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In this section, we describe the classical perspective of management, which originated during the early

1900s. The classical viewpoint , which emphasized ﬁnding ways to manage work more efﬁciently , had

two branches— scientiﬁc and administrative— each of which is identiﬁed with particular pioneering

theorists. In general, classical management assumes that people are rational. Let’ s compare the two

approaches.

Scie n tiﬁ c M an ag em en t: P io neere d b y T ay lo r & t h e G ilb re th s

The proble m for which scientiﬁc management emerged as a solution was this: In the expansive days of the

early 20th century , labor was in such short supply that managers were hard-pressed to raise the productivity

of workers. Scientiﬁc management emphasiz ed the scientiﬁc study of work methods to impr ove the

productivity of individual workers. T w o of its chief proponents were Frederick W. Taylor and the team of

Frank and Lillian Gilbreth.

Fre d eric k T aylo r & th e F ou r P rin cip le s o f S cie n tiﬁ c M an agem en t No doubt there are

some days when you haven’ t studied, or worked, as efﬁciently as you could. This could be called

“underachieving,” or “loaﬁng,” or what Taylor called it— soldiering, deliberately working at less than full

capacity . Known as “the father of scientiﬁc management,” Taylor was an American engineer from

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who believed that managers could eliminate soldiering by applying four principles of science:

FIG URE 2 .2 T he H is to ric a l P ersp ectiv e: T hre e V ie w poin ts — Cla ssic a l, B eh av io ra l, a n d Q uan tit a tiv e

1. Evaluate a task by scientiﬁcally studying each part of the task (not use old rule-of-thumb methods).

2. Carefully select workers with the right abilities for the task.

3. Give workers the training and incentives to do the task with the proper work methods.

4. Use scientiﬁc principles to plan the work methods and ease the way for workers to do their jobs.

T aylor based his system on motion studies, in which he broke down each worker ’s job—moving pig iron

at a steel company , say—into basic physical motions and then trained workers to use the methods of their

best-performing coworkers. In addition, he suggested employers institute a differential rate system, in which

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Fre d eric k W . T aylo r. C alle d t h e f a th er o f s c ie n tiﬁ c m an ag em en t, T ay lo r p ublis h ed T he P rin cip le s o f S cie n tiﬁ c

M anagem en t i n 1 911 .

Why Taylo r Is Important: Alth ough “Taylorism” met considerable resistance from employees fearing that

working harder would lead to lost jobs except for the highly productive few, Taylor believed that by raising

production both labor and management could increase proﬁts to the point where they no longer would have

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over them. If used correctly , the principles of scientiﬁc management can enhance

productivity , and such innovations as motion studies and dif ferential pay are still used today.

Lillia n a n d F ra n k G ilb re th w it h 1 1 o f t h eir d ozen c h il d re n . A s i n dustr ia l e n gin eers , t h e G ilb re th s p io neere d

tim e a n d m otio n s tu die s. I f y ou’re a n a th le te , y ou c an a p pre cia te h ow s m all c h an ges c an m ak e y ou m ore e fﬁ cie n t.

F ra n k & L illia n G ilb re th & I n du str ia l E ngin eerin g As mentio ned, Frank and Lillian Gilbreth

were a husband-and -wife team of indus trial engineers who lectured at Purdue University in the early 1900s.

Their experiences in raising 12 children—to whom they applied some of their ideas about improving

efﬁciency (such as printing the Morse Code on the back of the bathroom door so that family members could

learn it while doing other things)—later were popularized in a book, two movie s, and a TV sitcom, Cheaper

by the Dozen . T he Gilbreths expanded on Taylor ’s m otion studies—for instance, by using movie cameras to

ﬁlm workers at work in order to isolate the parts of a job.

Lillian Gilbreth, who received a PhD in psychology , was the ﬁrst woman to be a major contributor to

management science.

Adm in is tr a tiv e M an ag em en t: P io neere d b y F ay ol & W eb er

Scientiﬁc management is concerned with the jobs of individuals. Administrative management is

concerned with managing the total organization. Among the pioneering theorists were Henri Fayol and

Max W eber.

Hen ri F ayol & t h e F unctio n s o f M an agem en t Fayol was not the ﬁrst to investigate management

behavior, but he was the ﬁrst to systematize it. A French engineer and indus trialist, he became known to

American business when his most important work, General and Industr ial Management, was translated into

English in 1930.

Why Fayol Is Important: Fayol was the ﬁrst to identify the major functions of management (see page 9 )—

planning, organizing, leading, and controlling, as well as coordinating—the ﬁrst four of which you’ll

recognize as the functions providing the framework for this and most other management books. 14

M ax W eb er & t h e R atio n alit y o f B ure a u cra cy I n our time, the word bureaucracy has come to

have negative associations: impersonality , inﬂexibility , red tape, a molasseslike response to problems. But to

German sociologist Max Weber , a bur eaucracy was a rational, efﬁcient, ideal organization based on

principles of logic. After all, in W eber’s Germany in the late 19th century , many people were in 6/6/2017 University of Phoenix: Management

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positions of authority (particularly in the government) not because of their abilities but because

of their social status. The result, W eber wrote, was that they didn’t perform effectively.

A better-performing or ganization, he felt, should have ﬁve positive bureaucratic features:

1. A well-deﬁned hierarchy of authority .

2. Formal rules and procedures.

3. A clear division of labor, with parts of a complex job being handled by specialists.

4. Impersonality, without reference or connection to a particular person.

5. Careers based on merit.

Why Webe r Is Important: W eb er’s work was not translated into English until 1947, but it came to have an

important inﬂuence on the structure of lar ge corporations, such as the Coca-Cola Company .

The P ro ble m w ith t h e C la ssic al V ie w poin t: T oo M ech an is tic

A ﬂaw in the classic al viewpoint is that it is mechanistic: It tends to view humans as cogs within a machine,

not taking into account the importance of human needs. Behavioral theory addressed this problem, as we

explain next.

Why the Classical Viewpoint Is Important: The essence of the classical viewpoint was that work activity

was amen able to a rational approach, that through the application of scientiﬁc methods, time and motion

studies, and job specialization it was possible to boost productivity . Indeed, these concepts are still in use

today , the results visible to you every time you visit McDonald’ s or Pizza Hut. The classical viewpoint also

led to such innovations as management by objectives and goal setting, as we explain elsewhere.

Scie n tiﬁ c m an agem en t. C arm ak ers h av e b ro ken d ow n a u to m obile m an ufa ctu rin g i n to i ts c o nstitu en t t a sk s, a s

sh ow n h ere f o r a n a sse m bly p la n t. T his r e ﬂ ects t h e c o ntr ib utio ns o f t h e s c h ool o f s c ie n tiﬁ c m an ag em en t. I s t h ere

a n yth in g w ro ng w ith t h is a p pro ach ? H ow c o uld i t b e i m pro ved ? 6/6/2017 University of Phoenix: Management

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Beh avio ra l V ie w poin t: B eh avio ris m , H um an

R ela tio n s, & B eh avio ra l S cie n ce

To u ndersta n d h ow p eo p le a re m otiv ate d t o a ch ie v e, w hat c a n I l e a rn f r o m

th e b eh avio ra l v ie w poin t?

T H E B IG P IC TU RE

The second of the three historical management perspectives was the behavioral viewpoint,

which emphasized the importance of understanding human behavior and of motivating

employees toward achievement. The behavioral viewpoint developed over three phases: (1)

Early behaviorism was pioneered by Hugo Munsterber g, Mary Parker Follett, and Elton

Mayo. (2) The human relations movement was pioneered by Abraham Maslow (who

proposed a hierarchy of needs) and Douglas McGregor (who proposed a Theory X and

Theory Y view to explain managers’ attitudes toward workers). (3) The behavioral science

approach relie d on scientiﬁc research for developing theories about behavior useful to

managers.

The behavioral viewpoint emp hasized the importance of understanding human behavior and of

motivating employees toward achievement. The behavioral viewpoint developed over three phases: (1)

early behaviorism, (2) the human relations movement, and (3) behavioral science.

Early B eh av io ris m : P io neere d b y M unste rb erg , F olle tt, & M ay o

The three people who pioneered behavioral theory were Hugo Munsterber g, Mary Parker Follett, and Elton

Mayo.

Hugo M unste rb erg & t h e F ir st A pplic a tio n o f P sy ch olo gy t o I n dustr y Calle d “th e father

of industri al psycho logy,” German-born Hugo Munsterber g had a PhD in psychology and a medical degree

and joined the faculty at Harvard University in 1892. Munsterber g suggest ed that psychologists could

contribute to industry in three ways. They could:

1. Study jobs and determine which people are best suited to speciﬁc jobs.

2. Identify the psychological conditions under which employees do their best work.

3. Devise management strategies to inﬂuence employees to follow management’ s interests.

Why Muns terber g Is Important: His ideas led to the ﬁeld of industrial psychology , the study of human

behavior in workplaces, which is still taught in colleges today .

Mary P ark er F olle tt & P ow er S harin g a m on g E m plo yees & M an agers A Massachusetts

social worker and social philosopher , Mary Parker Follett was lauded on her death in 1933 as “one of the

most important women America has yet produced in the ﬁelds of civics and sociology .” Instead of following

the usual hierarchical arrangement of managers as order givers and employees as order takers, Follett thought

organizations should become more democratic, with managers and employees working cooperatively . 6/6/2017 University of Phoenix: Management

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The following ideas were among her most important:

1. Organizations should be operated as “communities,” with managers and subordinates

working together in harmony .

2. Conﬂicts should be resolved by having managers and workers talk over dif ferences and ﬁnd solutions

that would satisfy both parties—a process she called integration .

3. The work process should be under the control of workers with the relevant knowledge, rather than of

managers, who should act as facilitators.

Why Follett Is Important: W ith these and other ideas, Follett anticipated some of today’ s concepts of

“self-managed teams,” “worker empowerment,” and “interdepartmental teams”—that is, members of

different departments working together on joint projects.

Elt o n M ayo & th e S uppose d “ H aw th orn e E ffe ct” Do you think workers would be more

productive if they thought they were receiving special attention? This was the conclusion drawn by a Harvard

research group in the late 1920s.

Conducted by Elton Mayo and his assoc iates at Western Electric’ s Hawthorne (Chicago) plant, what came

to be called the Hawthorne studies began with an investigation into whether workplace lighting level af fected

worker productivity . (This was the type of study that Taylor or the Gilbreths might have done.) In later

experiments, other variables were altered, such as wage levels, rest periods, and length of workday . W orker

performance varied but tended to increa se over time, leading Mayo and his colleagues to hypothesize what

came to be known as the Hawthorne effect —namely, that employees worked harder if they received added

attention, if they thought that managers cared about their welfare and that supervisors paid special attention

to them.

However , later investigators found ﬂaws in the studies, such as variations in ventilation and lighting or

inadequate follow-through, that were overlooked by the original researchers. Critics also point out that it’s

doubtful that worker s improved their productivity merely on the basis of receiving more attention rather than

because of a particular instructional method or social innovation. 15

Why the Hawthorne Studies Are Impor tant: Ultimately , the Hawthorne studies were faulted for being

poorly designed and not having enough empirical data to support the conclusions. Nevertheless, they

succeeded in drawing attention to the importance of “social man” (social beings) and how managers using

good human relations could improve worker productivity . This in turn led to the so-called human relations

movement in the 1950s and 1960s.

Elt o n M ayo. I n t h e 1 920s, E lto n M ay o ( s h ow n w ith l o ng c ig are tte h old er) a n d h is t e am c o nducte d s tu die s o f

W este rn E le ctr ic ’s H aw th orn e p la n t. D o y ou t h in k y ou’d p erfo rm b ette r i n a r o botlik e j o b i f y ou t h ought y our

su perv is o r c are d a b out y ou a n d p aid m ore a tte n tio n t o y ou? 6/6/2017 University of Phoenix: Management

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The H um an R ela tio ns M ovem en t: P io neere d b y M aslo w &

M cG re g or

The two theorists who contributed most to the human relations movement —which proposed that better

human r elations could incr ease worker productivity —were Abraham Maslow and Douglas McGregor .

Abra h am M aslo w & t h e H ie ra rc h y o f N eed s What motivates you to perform: Food? Security?

Love? Recognition? Self-fulﬁllment? Probably all of these, Abraham Maslow would say, although some

needs must be satisﬁed before others. The 6/6/2017 University of Phoenix: Management

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chairman of the psychology department at Brandeis University and one of the earliest

researchers to study motivation, in 1943 Maslow proposed his famous hierar chy of human

needs: physiological, safety, love, esteem, and self-actualization. 16 W e discuss this hierarchy in

detail in Chapter 12 , where we explain why Maslow is important.

Dou gla s M cG re g or & T heo ry X v ersu s T heo ry Y Having been for a time a college president

(at Antioch College in Ohio), Douglas McGregor came to realize that it was not enough for managers to try

to be liked; they also needed to be aware of their attitudes toward employees. 17 Basically , McGregor

suggested in a 1960 book, these attitudes could be either “X” or “Y .”

Theory X represents a pessim istic, negative view of workers. In this view , workers are considered to be

irresponsible, to be resistant to change, to lack ambition, to hate work, and to want to be led rather than to

lead.

Theory Y represents the outlook of human relations proponents—an optimistic, positive view of workers.

In this view , workers are considered to be capable of accepting responsibility , self-direction, and self-control

and of being imaginative and creative.

Why Theory X/Theory Y Is Important: The principal contribution offered by the Theory X/Theory Y

perspective is that it helps managers understand how their beliefs affect their behavior . For example, Theory

X managers are more likely to micromanage, which leads to employee dissatisfaction, because they believe

employees are inherently lazy. Managers can be more effective by considering how their behavior is shaped

by their expectations about human nature.

Underlying both Maslow’ s and McGre gor’s theories is the notion that more job satisfaction leads to

greater worker performance—an idea that is somewhat controversial, as we’ll discuss in Chapter 1 1 .

What is your basic view of human nature? Your attitude could be key to your career success. To see the

general direction of your outlook, try the following self-assessment.

SE LF-A SSE SSM EN T 2 .1

W hat I s Y ou r O rie n ta tio n t o w ard T heo ry X /T heo ry Y ?

This s e lf -a sse ssm en t i s d esig ned t o r e v eal y our o rie n ta tio n a s a m an ag er— wheth er i t t e n ds t o w ard T heo ry X o r

T heo ry Y . G o to co n nect.m hed uca tio n .c o m an d ta k e th e se lf -a sse ssm en t. W hen y ou’re d one, an sw er th e

fo llo w in g q uestio ns:

1 . T o w hat e x te n t d o y ou t h in k y our r e su lts a re a n a ccu ra te r e ﬂ ectio n o f y our b elie fs a b out o th ers ? A re y ou

su rp ris e d b y t h e r e su lts ?

2 . A s a l e ad er o f a s tu den t o r w ork -re la te d p ro je ct t e am , h ow m ig ht y our r e su lts a ff e ct y our a p pro ach t o w ard

le ad in g o th ers ? E xpla in .

3. I f a n e m plo yee d oesn ’t s e em t o s h ow a m bitio n, c an t h at b e c h an ged ? D is c u ss.

T he B eh av io ra l S cie n ce A ppro ach

The human relations movement was a necessary correction to the sterile approach used within scientiﬁc

management, but its optimism came to be considered too simplistic for practical use. More recently , the

human relations view has been superseded by the behavioral science approach to management. Behavioral

science r e lies on scientiﬁc resear ch for develo ping theories about human behavior that can be used to

provide practical tools for managers. The disciplines of behavioral science include psychology , sociology ,

anthropology , and economics. 6/6/2017 University of Phoenix: Management

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Applic a tio n o f B eh avio ra l S cie n ce A ppro ach : T he O pen -P la n

O fﬁ ce— Pro d uctiv it y E nhan cer o r P ro d uctiv it y K ille r?

T oday some ofﬁce layouts mix manag ers and workers in completely open ofﬁces using communal

tables. The theory is that this fosters more interaction and increased productivity . But does it work?

The Distraction Next to You. On any given day, probably 40%–60% of all your workplace interactions

(including face-to-face chats and e-mails) will be with your immediate fellow employees, says a

behavioral scientist who studies such things. There is only a 5%–10% chance of your interacting with

someone two rows away. 18 And, research shows, face-to-face interruptions constitute one-third more

intrusions than do e-mail or phone calls. 19 So how are conscientious workers in open-plan ofﬁces to get

anything done—to avoid “pesky , productivity-sapping interruptions,” in one writer ’s phrase? 2 0

“This Means I’m Busy!” V ari ous workers have come up with their own ways of alerting others that

they are not to be interrupted. Some wear special bright-colored sashes or vests or hats. Some block off

their work spaces with neon-yellow plastic DO NOT D IS T U RB barricade tape (from CubeGuard). Some

retreat to designated closed ofﬁces as “no interruption” zones to get necessary work done.

The Right Seating Mix. Ano ther way to reduce disruption is for companies to assign who sits next to

whom, rather than using unassigned seating. In open-plan ofﬁces, “people literally catch emotions from

one another like a virus,” says Wharton School management professor Sigal Barsade, who suggests that

the people who work best together are those with similar emotional temperaments. 21 For instance,

mixing extroverts and introverts can lower the productivity of both, as introverts, who are quiet and like

to keep their distan ce, may resent the intrusions of extroverts, those outgoin g coworkers who need

interaction and love to talk and talk. 22 Paul Engl ish, co-fo under of the travel web-site Kayak.com, uses

new hires as an excuse to alter existing open-ofﬁce seating arrangemen ts, taking into careful

consideration everything from “employees’ personalities to their political views to their propensity for

arriving at work early—or , more important, their propensity for judging colleagues who arrive late,”

says one report. 23 “ If I put someone next to you that’s annoying or there’ s a total style clash, I’m going

to make your job depressing,” English says.

YO UR C ALL

The open ofﬁce is designed to encourage spontaneous interaction, cooperation, and teamwork, with the

goal of fostering achievement and productivity among employees. Is there a case to be made for

intermingling employees with different personalities and different skills to foster the potential for

stimulating breakthrough ideas? What kind of fellow workers in an open ofﬁce would you like to be

seated with and why? 6/6/2017 University of Phoenix: Management

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Open -p la n s e a tin g. W hat k in d o f o fﬁ ce w ould y ou p re fe r t o h av e f o r y ours e lf — a p riv ate o fﬁ ce , a s h are d p riv ate

o fﬁ ce, a p artitio ned c u bic le , o r a d esk i n a n o pen o fﬁ ce s c atte re d w it h o th er d esk s w it h n o p artitio ns? W hic h w ould

b e m ost c o m fo rta b le f o r y ou p ers o nally ? W hy, t h eo re tic ally , w ou ld t h e o pen o fﬁ ce b est p ro m ote s u perio r

perfo rm an ce?

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Quan tit a tiv e V ie w poin ts : M an agem en t S cie n ce

& O pera tio n s M an agem en t

If t h e m an ager ’s j o b i s t o s o lv e p ro b le m s, h ow m ig h t t h e t w o q uan tit a tiv e

ap pro ach es h elp ?

T H E B IG P IC TU RE

The third and last category under historical perspectives consists of quantitative viewpoints,

which emphasize the application to man agement of quantitative techniques, such as statistics

and computer simulations. Two approaches of quantitative management are management

science and operations management.

During the air war known as the Battle of Britain in World War II, a relative few of England’ s Royal Air

Force ﬁghter pilots and planes were able to successfully resist the overwhe lming might of the German

military machine. How did they do it? Military planners drew on mathematics and statistics to determine how

to most ef fectively allocate use of their limited aircraft.

When the Americans entered the war in 1941, they used the British model to form operations resear ch

(OR) teams to determine how to deploy troops, submarines, and other military personnel and equipment most

effectively . For example, OR techniques were used to establish the optimum pattern that search planes should

ﬂy to try to locate enemy ships.

After the war , businesses also began using these techniques. One group of former ofﬁcers, who came to be

called the Whiz Kids, used statistical techniques at Ford Motor Co. to make better management decisions.

Later Whiz Kid Robert McNamara, who had become Ford’s president, was appointed Secretary of Defense 6/6/2017 University of Phoenix: Management

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and introduced similar statistical techniques and cost-beneﬁt analyses throughout the Department of Defense.

Since then, OR techniques have evolved into quantitative management , the application to management

of quantitative techniques, such as statistics and computer simulations. Tw o branches of quantitative

management ar e management science and operations management.

Man ag em en t S cie n ce: U sin g M ath em atic s t o S olv e M an ag em en t

P ro ble m s

How would you go about deciding how to assign utility repair crews during a blackout? Or how many

package sorters you needed and at which times for an overnight delivery service such as FedEx or UPS? You

would probably use the tools of management science.

Management science is not the same as Taylor ’s scientiﬁc management. Management science focuses

on using mathemat ics to aid in problem solving and decision making. Sometimes management science is

called operations r esearch.

Why Management Science Is Important: Management science stresses the use of rational, science-based

techniques and mathematical models to improve decision making and strategic planning Management

science is a forerunner to analytics and Big Data, as we will discuss in Chapter 7 .

Fed E x. W hat m an ag em en t t o ols d o y ou u se t o s c h ed u le e m plo yees a n d a ir c ra ft t o d eal w it h w id e v aria tio ns i n

p ack ag e v olu m e— su ch a s D ecem ber 2 3 v ers u s D ec em ber 2 6? 6/6/2017 University of Phoenix: Management

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Man agem en t S cie n ce: “ F in d M e M ore M usic I L ik e!”

“Once, all you need ed to succeed in the music business were a pair of gold ears and some hustle,” says

writer Ben Sisario. “Now , it also takes mountains of data.” 24

T im Wester gren studied music composit ion and computer science in college, played in unsuccessful

rock bands, and worked as a ﬁlm-score composer. Then he thought to try to ma p song musical qualities

in what he called the Music Genome Project, which he described as “an enormous collection of songs

that have been analy zed, one song at a time, using 400 unique qualities.” 25 In 2005 the genome became

the basis for Oaklan d, California–based Pandora Internet Radio, which essentia lly applies management

science (metrics) to music selection. Pandora is an online music streaming and automated music

recommendation service that allows users to type in a favorite song or artist, and then Pandora’ s

software plays other music with the same musical characteristics. In 2014 the company “that plays only

music you like” reported it had 75 million active listeners. 26

Y O UR C ALL

Today there are many companies that have computer “recommendation engines” to suggest new

products keyed to a consumer ’s individu al tastes, such as Spotify , W arner Music, and iTunes for music;

Amazon for books; and Netﬂix for ﬁlms. Do you think there’s any room left for experienced human

decision makers who don’ t rely on numbers? (See, for example, Beats Music, which Apple acquired in

2014.) 27 D o you think reliance on the automa ted recommendation process cheats consumers out of

“pleasant surprises” and new discoveries?

Opera tio ns M an ag em en t: B ein g M ore E ff e ctiv e

Operations management focuses on managing the production and delivery of an organization’ s

products or services more effectively . O perations management is concerne d with work scheduling,

production planning, facilities location and design, and optimum inventory levels.

Why Operations Management Is Important: Thr ough the rational management of resources and

distribution of goods and services, operations management helps ensure that business operations are efﬁcient

and ef fective.

Opera tio n s M an agem en t: U sin g “ th e T oyota W ay” t o B en eﬁ t

H osp it a l P atie n ts

Over the years, Toyota Motor Corp. has developed a variety of production techniques that drew in part

on operations management. 28 T og ether these methods constitute “the Toyota Way ,” the company’ s

systematic approach to producing vehicles efﬁciently , with the ultimate aim of pleasing the customer.

First, the process emphasizes the smoothest possible ﬂow of work, by identif ying the many steps in a

production process and eliminating unnecessary ones (called value-str eam mapping ). It also uses 6/6/2017 University of Phoenix: Management

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teamwork to examine problems and ﬁx them as soon as they appear ( mistake pr ooﬁng ). In addition, the

carmaker uses the just-in-time a pproach to obtain supplies from vendors only as they are needed in the

factory . These efﬁcient techniques, which all come under the term “lean management,” has enabled

Toyota to sell its cars on the basis of their superior quality . 29

Adapting Toyota’ s Philosophy & Practices to Hospitals. A growin g number of U.S. hospitals have

been forced to compete harder under the federal Affordable Care Act as formerly uninsured patients

have begun to understand they do not necessarily have to go to their closest public safety-net hospital

but could be a little more choosey . That realization put public hospitals “in the unusual position of

having to attract and retain ‘paying customers’ to survive,” writes reporter Victoria Colliver . 30

Accordingly , around 2000, hospital administrators began to apply Toyota’ s techniques to improving

hospital quality , safety, and patient satisfaction.

“A Million Small Changes.” The Toyota method is “really focused on the small things,” a hospital

CEO told Colliver . A team of employe es meets for a week-long hands-on session to come up with a

plan that makes speciﬁc, small changes that can have a major impact. One team, for instance, focused

on whittling 10 minutes off the typical 40 minutes of time it took from wheeling a patient into the

operating room until the ﬁrst surgical incision. “Ten minutes may not sound like a lot,” observes

Colliver , “but those minutes can add up in wasted time and cost when a staf f of nurses and doctors has

to wait for a piece of equipment or a patient to be ready for them.” Another team was able to reduce

outpatient wait time from 4–6 hours to 2.5 hours.

YO UR C ALL

In Chapter 1 , we described the problem of “efﬁciency versus effectiveness.” Which is the focus of lean

management?

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Syste m s V ie w poin t

H ow c a n t h e e x cep tio n al m an ager b e h elp ed b y t h e s y ste m s

vie w poin t?

T H E B IG P IC TU RE

Thr ee con temporary management perspectives are (1) the systems, (2) the contingency , and

(3) the quality-management viewpoints. The systems viewpoint sees organizations as a

system, either open or closed, with inputs, outputs, transformation processes, and feedback.

The system s viewpo int has led to the development of complexity theory, the study of how

order and pattern arise from very comp licated, apparently chaotic systems. The contingency

viewpoint e mp hasizes that a manager ’s approach should vary according to the individual and

environmental situation. It is a foreru nner to evidence-based management. The quality-

management viewpoint has two traditiona l approaches: quality control, the strategy for

minimizing errors by managing each stage of production, and quality assurance, which

focuses on the perfo rmance of workers, urging employees to strive for zero defects. A third

quality approach is the movement of total quality manag ement (TQM), a comprehensive

approach dedicated to continuous quality improvement, training, and customer satisfaction. 6/6/2017 University of Phoenix: Management

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Being of a presumab ly practical turn of mind, could you run an organization or a department according to the

theories you’ve just learned? Probably not. The reason: people are complicated. To be an exceptional

manager , you need to learn to deal with individual dif ferences in a variety of settings.

Thus, to the historical perspective on management (classical, behavioral, and quantitative viewpoints), let

us now add the contemporary perspective, which consists of three viewpoints. (See Figure 2.3 below .) These

consist of:

Systems

Contingency

Quality-management

F IG URE 2 .3 T he C on te m pora ry P ersp ectiv e: T hre e V ie w poin ts — Syste m s, C on tin gen cy , a n d Q ualit y -

M an agem en t

In this section, we discuss the systems viewpoint.

T he S yste m s V ie w poin t

The 27 bones in the hand. The monarchy of Great Britain. A weather storm front. Each of these is a system.

A system is a set of interr elated parts that operate together to achieve a 6/6/2017 University of Phoenix: Management

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common purpose. Even though a syste m may not work very well—as in the inefﬁcient way the

Italian government collects taxes, for example—it is nevertheless still a system.

The systems viewpoint r ega rds the organization as a system of interr elated parts. By

adopting this point of view , you can look at your organization both as (1) a collection of subsystems —parts

making up the whole system— and (2) a part of the larger environment. A college, for example, is made up

of a collection of academic departments, support staffs, students, and the like. But it also exists as a system

within the environment of education, having to be responsive to parents, alumni, legislators, nearby

townspeople, and so on.

The F our P arts o f a S yste m

The vocabulary of the systems perspective is useful because it gives you a way of understanding many

different kinds of or ganizations. The four parts of a system are deﬁned as follows:

1. Inputs are the people, money , information, equipment, and materials r equired to pr oduce an

organization’ s goods or services. Whatever goes into a system is an input.

2. Transformational pr ocesses are the organization’ s capabilities in management, internal

processes, and technology that ar e applied to converting inputs into outputs. The main activity of

the organization is to transform inputs into outputs.

3. Outputs are the pr oducts, services, pr oﬁts, losses, employee satisfaction or discontent, and the

like that are produced by the organization. Whatever comes out of the system is an output.

4. Feedback is information about the r eaction of the environment to the outputs that affects the

inputs. Are the customers buying or not buying the product? That information is feedback.

The four parts of a system are illustrated below . (See Figure 2.4 .)

FIG URE 2 .4 T he F ou r P arts o f a S yste m

O pen & C lo se d S yste m s Near ly all or ganiza tions are, at least to some degree, open systems rather

than closed systems. An open system co ntinua lly interacts with its envir onment. A closed system has

little interaction with its envir onment; that is, it receives very 6/6/2017 University of Phoenix: Management

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EX AM PL E

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little feedback from the outside. The classical management viewpoint often considered an

organization a closed system. So does the management science perspective, which simpliﬁes

organizations for purposes of analysis. However, any organization that ignores feedback from

the environment opens itself up to possibly spectacular failures.

Com ple x it y T heo ry : T he U lt im ate O pen S yste m The systems viewpoint has led to the

development of complexity theory , the study of how order and pattern arise from very complicated,

appar ently chaotic systems. Complexity theory recognizes that all complex systems are networks of many

interdependent parts that interact with each other according to certain simple rules. Used in strategic

management and organizational studies, the discipline seeks to understand how organizations, considered as

relatively simple and partly connected structures, adapt to their environments.

Why the Systems Vie wpoint—Particularly the Concept of Open Systems—Is Important: History is full of

accounts of products that failed (such as the 1959 Ford Edsel) because they were developed in closed

systems and didn’ t have sufﬁcient feedback. Open systems stress multiple feedback from both inside and

outside the organization, resulting in a continuous learning process to try to correct old mistakes and avoid

new ones.

Clo se d v ersu s O pen S yste m s: P en ney ’s v ersu s M acy ’s

Retail shopping habits are being remade by two powerful forces (1) the erosion of the middle class and

(2) the rise of online sales.

Thus, stores are either focusing on rock -bottom prices to attract penny-pinching customers, reports

The New York Times, or of fering high-end products to attract the rich. 31 W ith increased online purchases

and declining walk-in foot trafﬁc, even shopping malls face extinction, and chains such as RadioShack

and Staples are closi ng stores and rethinking their Internet strategies. 32 This is the difﬁcult environment

in which J.C. Penney and Macy’ s have been operating.

Closed System: Penney’s CEO “Goes with His Gut.” Ron Johnson was a well-regarded executive at

Tar get and then had a meteoric rise as the developer of Apple’ s sleek, hands-on retail stores. In 201 1, he

was hired as CEO to revive J.C. Penney , a tired, low-end department store chain that he hoped to

rebuild into an exciting, more upscale brand by, among other things, eliminating discounts, sales, and

coupons and ﬁlling stores with name-brand clothes (Izod, Liz Claiborne) highlighted in store-within-a-

store boutiques.

Although most retailers regularly try out new ideas in a limited way before committing them to all

their stores, Johnson preferred to go wit h his gut, adhering to a closed system. That is, Johnson took the

Apple approach, whose then-leader Steve Jobs famously once said, “A lot of times, people don’t know

what they want until you show it to them .” Penney’ s customers, however, made it clear they were very

much into value and that coupons and sales were important. Johnson’ s strategy failed, and in early 2014,

Penney reported sales were down 7.4% and announced the closing of 33 stores. Johnson left the

company . 33

Open System: Macy’s Uses Resear ch & “Magic Selling.” Led by seasoned retail executive Terry

Lundgren, Macy’s has so transformed itself that even during difﬁcult times (recession, harsh weather)

its proﬁts have grown, rising 1 1% during 2013. 34 What is its secret? 6/6/2017 University of Phoenix: Management

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Retailing fashion goods is much less predictable than selling staples, such as food, but Macy’ s has

managed to stay close to its customers by using technology that cues a store when, for instance, to

restock on particula r Clinique cosmetics and at the same time reveals that Clinique shoppers are

purchasers of fashion jewelry, which can be marketed accordingly . In other words, Macy’s operates an

open system. Another initiative has been the “My Macy’ s” localization strategy, in which the goal is to

take into account local tastes and seek a more personalized touch. 35

T o co mpete with websites, Macy’s has reﬁned the “My Macy’ s” approach by integrating mobile

technologies, such as GPS, so customers can use their smartphones to navigate store aisles. In one key

insight, Macy’ s foun d that “more than half of consumers do research online before visiting a physical

store,” according to one report, “so they expect more insight [from store salespeople] than basic product

information.” Out of this came Macy’s “Magic Selling” program, which empowers employees to

improve the custom er experience by being able “to differentiate the in-store experience through their

personalities and service, while still delivering the basics of price, assortment, and convenience that

customers get through online shopping.” 36 T he store’ s integr ated inventory system also enables

salespeople to ﬁnd in-stock products and ship them directly to the customer .

YO UR C ALL

“Sometimes you have to destroy your business in order to save it,” says ﬁnancial writer James

Surowiecki.” 37 B esides the retrenching of RadioSha ck and Staples, can you think of other retail

businesses that need a makeover—that should do more to become open systems? What should they do?

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Con tin gen cy V ie w poin t

In t h e e n d, i s t h ere o n e b est w ay t o m an ag e i n a ll s it u atio n s?

T H E B IG P IC TU RE

The second viewpoint in the contemporary perspective, the contingency viewpoint,

emphasizes that a manager ’s approach should vary according to the individual and

environmental situation.

The classical viewpoints advanced by Taylor and Fayol assumed that their approaches had universal

applications—that they were “the one best way” to manage organizations. The contingency viewpoint began

to develop when managers discovered that under some circumstances better results could be achieved by

breaking the one-best-way rule. The contingency viewpoint emp hasizes that a manager ’s appr oach

should vary according to—that is, be contingent on—the individual and the envir onmental situation.

A manager subscribing to the Gilbreth approach might try to get workers to be more productive by

simplifying the steps. A manager of the Theory X/Theory Y persuasion might try to use motivational

techniques. But the manager following the contingency viewpoint would simply ask, “What method is the

best to use under these particular circumstances?”

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The C on tin gen cy V ie w poin t: W hat A re t h e B est K in ds o f B en eﬁ ts ?

Money is not the only motivator for employee productivity . Applying the contingency approach,

managers have found there are incentives in offering various kinds of fringe beneﬁts—one recent report

listed more than 300 such beneﬁts, from health plans to house down-payment assistance. 38

Small Incentives. Sma ll bus inesses may not be able to dangle big raises, but they can offer imagi native

beneﬁts that big organizations may ﬁnd too expensive or impractical. “Free Beer Friday” is the morale

booster offered by news-media analysis company Universal Information Services in Omaha, Nebraska.

“Bring Your Pet to Work” (no messes or barking, please) is the beneﬁt extended by Internet equipment

company VoIP Supply of Amherst, New York. Litzky Public Relations in Hoboken, New Jersey ,

provides space for twice-a-week yoga instruction. Next-StepU.com, a teen-counseling company in

Rochester, New York, offers a paid week off to volunteer for good causes. Various companies offer

other options: at-you r-desk meditation, drop-off laundry services, free theme park tickets, even adoption

assistance and funeral planning. 39

Large Incentives. Are little perks all that’ s required? Netﬂix has decided that the best way to keep top

talent is to hire people who are “fully formed adults” who will put the company ﬁrst and support a high-

performance workplace. Thus, instead of having a rigid system of vacation days and a formal travel and

expense policy , Netﬂix decided to take the ultimate contingency approach, embodied in the policy “Act

in Netﬂix’ s best interests.” This means salaried employees can take whatever time they feel is

appropriate and enforce their own travel and expense policies—in other words, they are trusted to act as

fully formed adults. 40

Y O UR C ALL

One career analyst suggests that people are motivated most by autonomy , devel oping their skills, and a

sense of higher purpose. 41 This opinion is echoed in a survey that found the top factors in determining

people’ s happiness at work are whether they enjoy the tasks required of them, are able to focus on the

things they do best, and are proud of their employer . 42 Another study found that people care, ﬁrst, about

the ofﬁce environme nt, positive culture, and compensation; second, a job that makes the world a better

place or a company that shares their values; and third, company prestige and rapid promotion. 43

Considering these ﬁndings and applying a contingency approach to stimulating productivity at work,

what different kinds of incentives or beneﬁts would you offer for hourly shift workers, salaried middle

managers, and work-at-home employees? 6/6/2017 University of Phoenix: Management

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Con tin gen cy a p pro ach . G iv in g e m plo yees m ore m oney i s n ot t h e o nly w ay t o m otiv ate t h em t o b e m ore

p ro ductiv e. S om etim es s m all r e w ard s, s u ch a s a llo w in g p ets a t w ork , a re e q ually e ff e ctiv e. W hat i n cen tiv es w ould

m ak e y ou s ta y a t a j o b f o r w hic h y ou a re n ot r e ally s u ite d a n d t o d o y our b est w hile t h ere ?

G ary H am el: M an ag em en t I d eas A re N ot F ix ed , T hey ’r e a P ro cess

Discussion of the contingency viewpoint leads us naturally to the thoughts of Gary Hamel , co-founder of the

Management Innovation Lab and ranked by The Wall Str eet Jour nal in 2008 as the most inﬂuential business

thinker. 44 “ Over time,” he says, “every great invention, management included, travels a road that leads from

birth to maturity , and occasionally to senescence.” 45 Hamel holds that much of management theory is dated

and doesn ’t ﬁt the current realities of organizational life and that management innovation is essential to

future organizational success. Indeed, he suggests, what we need to do is look at management as a process,

and then make improvements and innovation ongoing and systematic. After all, if managers now innovate by

creating new products or new business strategies, why can’t they be equally innovative in how they manage

their companies?

How do forward-lo oking managers get the ball rolling in management innovation, particularly in a

traditional, conventional company? Hamel believes that the answer can be foun d by identifying core beliefs

that people have about the organization, es pecially those that detract from the pursuit of management

innovation. He suggests that these beliefs can be rooted out by repeatedly asking the right questions—

namely , the following:

1. Is this a belief worth challenging? Is it debilitating? Does it get in the way of an important

organizational attribute that we’d like to strengthen?

2. Is this belief universally valid? Are there counterexamples? If so, what do we learn from those

cases?

3. How does this belief serve the inter ests of its adherents? Are there people who draw reassurance or

comfort from this belief?

4. Have our choices and assumptions conspir ed to make this belief self-fulﬁlling? Is this belief true

simply because we have made it true—and, if so, can we imagine alternatives? 46

Why the Contingency Viewpoint Is Imp ortant: The contingency viewpoint would seem to be the most

practical of the viewpoints discussed so far because it addresses problems on a case-by-case basis and varies

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Evid en ce-B ase d M an ag em en t: F acin g H ard F acts , R eje ctin g

N onse n se

Evidence-based management is very much in the spirit of the contingency viewpoint’s practical approach to

management. Evidence-based management means translating 6/6/2017 University of Phoenix: Management

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PR ACTIC AL A CTIO N

Page 60

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principles based on best evidence into organizational practice, bringing rationality to the

decision-making pr ocess.

As its two principal proponents, Stanford business scholars Jeffrey Pfeffer and Robert

Sutton, put it, evidence-based management is based on the belief that “facing the hard facts about what works

and what doesn’ t, understanding the dangerous half-truths that constitute so much conventional wisdom

about management, and rejecting the total nonsense that too often passes for sound advice will help

organizations perform better .” 47

Learning to make managerial decisions based on evidence is the approach we hope you will learn to take

after studying many other approaches—the perspectives we covered in this chapter . W e will consider

evidence-based management further , along with analytics and Big Data, in Chapter 7 .

Evid en ce-B ase d M an agem en t: A n A ttit u de o f

W is d om

“These days, there aren’ t any hot, new trends, just a lot of repackaged ones from the past,” writes Wall

Str eet Journal colu mnist Carol Hymowitz. 48 “Executives have been treated to an overdose of

management guides that mostly haven’t delivered what they promised. Many bosses have adopted them

all, regardless of their company’ s business model, balance sheet, competition, employee bench strength,

or any other unique qualities. They have become copycat managers, trying to ﬁnd a one-stop, ﬁx-it-all

answer to their various problems.”

How will you know whether the next “ﬁx-it-all” book to hit the business bestseller list is simply a

recycling of old ideas? The answer is: you have to have studied history—the subject of this chapter . 49

Management: Art or Science? Is the practice of management an art or a science? Certainly it can be

an art. Lo ts of top executives have no actual training in management, although General Motors CEO

Mary Barra, discussed in Chapter 1 , has an MBA in addition to a degree in electrical engineering. Great

managers, like great painters or actors, have the right mix of intuition, judgment, and experience.

But management is also a science. That is, rather than being performed in a sea t-of-the-pants, make-

it-up-as-you-go-along kind of way—wh ich can lead to big mistakes—managem ent can be approached

deliberately , rational ly, systematically . That’ s what the scientiﬁc method is, after all—a logical process,

embodying four steps: (1) You observe events and gather facts. (2) You pose a possible solution or

explanation based on those facts. (3) You make a prediction of future events. (4) Y ou test the prediction

under systematic conditions.

Following the Evidence. The process of scientiﬁc reasoning underlies what is known as evidence-

based management. As we stated, evidence-based management means translating principles based on

best evidence into organizational practice, bringing rationality to the decision-making process. 50

Evidence-based management derives from evidence-based medicine, embracing what Jeffrey Pfeffer

and Robert Sutton call an attitude of wisdo m. This is a mind-set that, ﬁrst, is willing to set aside belief

and conventional wisdom and to act on the facts and, second, has an unrelenting commitment to

gathering informatio n necessary to make informed decisions and to keeping pace with new evidence to

update practices. 51

“The way a good doctor or a good manager works,” Sutton says, “is to act with knowledge while

doubting what you know . So if a patient goes to a doctor , you hope the doctor would do two things: ﬁrst 6/6/2017 University of Phoenix: Management

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look at the literature and make the best decision given what’s available. Then actually track the progress

of the treatment and see what unexpected side ef fects you’re having and what things are working.” 52

Thr ee T ruths. Evidence-based management is based on three truths:

• Ther e are few r eally new ideas: Most supposedly new ideas are old, wrong, or both.

• True is better than new: Ef fective or ganizations and managers are more interested in what is true

than in what is new .

• Doing well usually dominates: Organizations that do simple, obvious, and even seemingly trivial

things well will dominate competitors who search for “silver bullets and instant magic.”

YO UR C ALL

Do you think manag ers are often driven by fads, by what they’ve read in the latest book or heard in the

latest management seminar? Have you ever heard of a manager taking an experimental approach, as in

trying out a new idea with an open mind to see what happens? How could you proﬁt by taking an

evidence-based approach to the ideas we discussed in this chapter?

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Qualit y -M an agem en t V ie w poin t

Can t h e q ualit y -m an agem en t v ie w poin t o ffe r g u id elin es f o r t r u e

m an ageria l s u ccess?

T H E B IG P IC TU RE

The quality-management viewpoint, the third category under contemporary perspectives,

consists of quality contr ol, qua lity assurance, a nd espec ially the movement of total quality

management (TQM), dedicated to continuous quality improvement, training, and customer

satisfaction.

In 1971, in his book Wheels, a uthor Arthur Hailey advised Americans not to buy cars that were assembled on

Mondays or Fridays—days when cars supposedly suffered from quality problems because they were put

together when absen teeism and hangovers were highest among dissatisﬁed autoworkers. Although cars are

not built all in one day (various parts are built at dif ferent times) and are not stamped with a “birth date,”

Hailey’ s claim reinforced the notion that, despite the efforts of quantitative management, the American cars

produced on those days were the most shoddily made of what were coming to look like generally shoddy

products.

The energy crisis of the 1970s showed different possibilities, as Americans began to buy more fuel-

efﬁcient, better -built cars made in Japan . Today the average American car lasts much longer than it used to,

and some U.S. cars are equal or superior to the best foreign competitors—for example, the 2014 Cadillac

CTS 3.6 beat the 2014 Mercedes-Benz E350, according to one automotive review . 53

Although not a “the ory” as such, the quality-management viewpoint , which includes quality control,

quality assurance, and total quality management, de serves to be considered because of its impact on

contemporary management perspectives.

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Quality r efers to the total ability of a pr oduct or service to meet customer needs. Quality is seen as one

of the most important ways of adding value to products and services, thereby distinguishing them from those

of competitors. T wo traditional strategies for ensuring quality are quality control and quality assurance.

Qualit y C on tr o l Quality control is deﬁne d as the strategy for minimizing errors by managing

each stage of production. Qual ity control techniques were developed in the 1930s at Bell Telephone Labs

by Walter Shewart, who used statistical sampling to locate errors by testing just some (rather than all) of the

items in a particular production run.

Qualit y A ssu ra n ce Dev eloped in the 1960s, quality assurance focu ses on the performance of

workers, urging employees to strive for “zer o defects.” Quality assurance has been less successful because

often employees have no control over the design of the work process.

Tota l Q uality M an ag em en t: C re atin g a n O rg an iz atio n D ed ic ate d t o

C ontin uous I m pro vem en t

In the years after World War II, the imprint “Made in Japan” on a product almost guaranteed that it was

cheap and ﬂimsy . That began to change with the arrival in Japan of two Americans, W. Edwards Deming

and Joseph M. Juran .

W. E dw ard s D em in g Desperate to rebuild its war-devastated economy, Japan eagerly received

mathematician W. Edwards Deming’s lectures on “good management.” Deming believed that quality

stemmed from “constancy of purpose”—steady focus on 6/6/2017 University of Phoenix: Management

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an organization’ s mission—along with statistical measurement and reduction of variations in

production processes. He also thought that managers should stress teamwork, be helpful rather

than simply give orders, and make employees feel comfortable about asking questions.

Jose p h M . J u ra n A nother pioneer with Deming in Japa n’s quality revolution was Joseph M. Juran,

who deﬁned quality as “ﬁtness for use.” By this he meant that a product or service should satisfy a

customer ’s real needs. Thus, the best way to focus a company’ s ef forts, Juran suggested, was to concentrate

on the real needs of customers.

TQ M p io n eer. W . E dw ard s D em in g i n 1 961. D em in g p ro pose d h is s o -c alle d 8 5–15 r u le — nam ely , w hen t h in gs g o

w ro ng, t h ere i s a n 8 5% c h an ce t h at t h e s y ste m i s a t f a u lt, o nly a 1 5% c h an ce t h at t h e i n div id ual w ork er i s a t f a u lt.

M ost o f t h e t im e, h e t h ought, m an ag ers e rro neo usly b la m ed i n div id uals r a th er t h an t h e s y ste m .

T Q M : W hat I t I s From the work of Deming and Juran has come the strategic commitment to quality

known as total quality management. Total quality management (TQM) is a compr ehensive approach—

led by top manage ment and supported throughout the organization—dedicated to continuous quality

improvement, training, and customer satisfaction.

The four components of TQM are as follows:

1. Make continuous impr ovement a priority. TQM companies are never satisﬁed. They make small,

incremental improvements an everyday priority in all areas of the or ganization. By improving

everything a little bit of the time all the time, the company can achieve long-term quality , efﬁciency,

and customer satisfaction.

2. Get every employee involved. To build teamwork, trust, and mutual respect, TQM companies see

that every employee is involved in the continuous improvement process. This requires that workers

must be trained and empowered to ﬁnd and solve problems.

3. Listen to and learn fr om customers and employees. TQM companies pay attention to their

customers, the people who use their products or services. In addition, employees within the

companies listen and learn from other employees, those outside their own work areas.

4. Use accurate standards to identify and eliminate pr oblems. TQM organizations are always alert to

how competitors do things better , then try to improve on them—a process known as benchmarking.

Using these standards, they apply statistical measurements to their own processes to identify

problems.

Why Tota l Quality Management Is Important: The total quality management viewpoint emphasizes

infusing concepts of quality throughout the total organization in a way that will deliver quality products and

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Want to ﬁnd out how committed to TQM the organizations are that you are most familiar with? Even the

most sophisticated organizations, you may be surprised to learn in the following self-assessment, may not

measure up very well when it comes to the quality of their products.

SE LF-A SSE SSM EN T 2 .2

T o W hat E xte n t I s Y ou r O rg an iz a tio n C om mit te d t o T ota l Q ualit y M an agem en t?

T his s e lf -a sse ssm en t is d esig ned to g au ge th e e x te n t to w hic h th e o rg an iz atio n y ou h av e in m in d is c o m mitte d

to T ota l Q uality M an ag em en t (T Q M ). G o to co n nect.m hed uca tio n .c o m a n d ta k e th e s e lf -a ss e ssm en t. W hen

y ou’re d one, a n sw er t h e f o llo w in g q uestio ns:

1 . W hic h o f t h e ﬁ ve d im en sio ns i s m ost a n d l e ast i m porta n t t o t h e o rg an iz atio n? A re y ou s u rp ris e d b y t h is

c o nclu sio n? E xpla in .

2. B ase d o n t h e t h re e l o w est- ra te d i te m s i n t h e s u rv ey, w hat a d vic e w ould y ou g iv e t o s e n io r l e ad ers i n t h e

co m pan y?

3. C onsid erin g a ll o f t h e q uestio ns i n t h e s u rv ey, w hic h t h re e d o y ou t h in k a re m ost i m porta n t i n t e rm s o f

fo ste rin g T Q M i n a c o m pan y? W hy?

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The L ea rn in g O rg an iz a tio n i n a n E ra o f

A ccele ra te d C han ge

O rg an iz a tio n s m ust l e a rn o r p eris h . H ow d o I b uild a l e a rn in g o rg an iz a tio n ?

T H E B IG P IC TU RE

Learning organizati ons actively create, acquire, and transfer knowledge within themselves

and are able to modify their behavior to reﬂect new knowledge. There are three ways you as a

manager can help build a learning or ganization.

Ultimately, the lesson we need to take from the theories, perspectives, and viewpoints we have described is

this: we need to keep on learning. Organizations are the same way: like people, they must continually learn

new thing s or face obsolescence. A key challenge for managers, therefore, is to establish a culture of shared

knowledge and values that will enhance their employees’ ability to learn— to build so-called learning

organizations.

Learning organizations, says Massachusetts Institute of Technology professor Peter Senge , who coined

the term, are places “where people continually expand their capacity to create the results they truly desire,

where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where

people are continually learning how to learn together .” 54

T he L earn in g O rg an iz atio n : H an dlin g K now le d ge & M odif y in g

B eh av io r

More formally, a learning organization is an organization that actively creat es, acquir es, and transfers

knowledge within itself and is able to modify its behavior to reﬂect new knowledge. 55 Note the three 6/6/2017 University of Phoenix: Management

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parts:

1. Creating and acquiring knowledge. In learning or ganizations, managers try to actively infuse their

organizations with new ideas and information, which are the prerequisites for learning. They acquire

such knowledge by constantly scanning their external environments, by not being afraid to hire new

talent and expertise when needed, and by devoting signiﬁcant resources to training and developing

their employees.

2. Transferring knowledge. Managers actively work at transferring knowledge throughout the

or ganization, reducing barriers to sharing information and ideas among employees. Electronic Data

Systems (EDS), for instance, practically invented the information-technology services industry , but by

1996 it was slipping behind competitors—missing the onset of the Internet wave, for example. When

a new CEO, Dick Brown, took the reins in 1999, he changed the culture from “ﬁx the problem

yourself” to sharing information internally. 56

3. Modifying behavior . Learning organizations are nothing if not results oriented. Thus, managers

encourage employees to use the new knowledge obtained to change their behavior to help further the

organization’ s goals. 57

T he l e a rn in g o rg an iz a tio n . I n r ig id o rg an iz atio ns, e m plo yees o fte n k eep i n fo rm atio n t o t h em se lv es. I n l e arn in g

org an iz atio ns, w ork ers a re e n co ura g ed t o s h are i n fo rm atio n w it h e ach o th er— bo th i n sid e a n d o uts id e t h eir

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How t o B uild a L earn in g O rg an iz atio n: T hre e R ole s

M an ag ers P la y

To create a learning organization, managers must perform three key functions or roles: (1) build a

commitment to learning, (2) work to generate ideas with impact, and (3) work to generalize ideas with

impact. 58

1. Y ou can build a commitment to learning. T o instill in your employees an intellectual and emotional

commitment to the idea of learning, you as a manager need to lead the way by investing in it, publicly

promoting it, creating rewards and symbols of it, and performing other similar activities. For example,

to encourage employees to overcome fears about losing their jobs and exert some boldness in decision

making, Jim Donald, CEO of Extended Stay America, created miniature “Get Out of Jail, Free” cards,

which employees could call in whenever they took a big risk on behalf of the company—in ef fect

giving them permission to make and learn from mistakes. 59

2. Y ou can work to generate ideas with impact. As a manager , you need to try to generate ideas with

impact—that is, ideas that add value for customers, employees, and shareholders—by increasing

employee competence through training, experimenting with new ideas, and engaging in other

leadership activities. Xerox, for example, hired researchers called ”innovation managers” to hunt for

inventions and products from start-ups in India that could be adapted for the North American market.

Hewlett-Packard used its research lab in India to see how it could adapt mobile phone web-interface

applications in Asia and Africa to markets in developed countries. 60

3. Y ou can work to generalize ideas with impact. Besides generating ideas with impact, you can also

generalize them—that is, reduce the barriers to learning among employees and within your

or ganization. Y ou can create a climate that reduces conﬂict, increases communication, promotes

teamwork, rewards risk taking, reduces the fear of failure, and increases cooperation. In other words,

you can create a psychologically safe and comforting environment that increases the sharing of

successes, failures, and best practices.

Based on the above discussion, do you wonder about the speciﬁc behaviors that people exhibit in a

learning organization? It would be interesting to determine if you have ever worked for such an organization.

The following self-assessment was created to evaluate whether an organization you now work for or

formerly worked for could be considere d a serious learning organization. The survey items provide a good

indication of what it takes to become a learning or ganization.

SE LF-A SSE SSM EN T 2 .3

A re Y ou W ork in g f o r a L ea rn in g O rg an iz a tio n ?

This s e lf -a sse ssm en t p ro vid es a m easu re o f th e e x te n t to w hic h a n o rg an iz atio n o f y our c h oic e is a le arn in g

o rg an iz atio n. G o to co n nect.m hed uca tio n .c o m a n d ta k e th e s e lf -a ss e ssm en t. W hen y ou’re d one, a n sw er th e

fo llo w in g q uestio ns:

1 . W hat a re t h e s tr e n gth s a n d w eak nesse s o f t h is c o m pan y i n t e rm s o f b ein g a l e arn in g o rg an iz atio n?

2 . I f y ou w ere C EO o f t h is o rg an iz atio n, w hat c h an ges w ould y ou m ak e b ase d o n y our s u rv ey r e su lts ?

E xpla in .

3. W hat s u ggestio ns w ould y ou m ak e f o r h ow t h is o rg an iz atio n m ig ht ( 1 ) b uild a c o m mitm en t t o l e arn in g,

(2 ) w ork t o g en era te i d eas w ith i m pact, a n d ( 3 ) w ork t o g en era liz e i d eas w ith i m pact? D is c u ss.

4 . H ow d oes t h e l e arn in g s c o re f o r t h e o rg an iz atio n p ro bab ly c o m pare w ith t h e s c o re s o f o th er o rg an iz atio ns

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Key T erm s U se d i n T his C hap te r

administrative management

behavioral science

behavioral viewpoint

classical viewpoint

closed system

complexity theory

contemporary perspective

contingency viewpoint

evidence-based management

feedback

historical perspective

human relations movement

inputs

learning or ganization

management science

open system

operations management

outputs

quality

quality assurance

quality control

quality-management viewpoint

quantitative management

scientiﬁc management

subsystems

system

systems viewpoint

total quality management (TQM)

transformation processes

Key P oin ts

2 .1 E volv in g V ie w poin ts : H ow W e G ot t o T od ay’s M an agem en t O utlo ok

• The two overarching perspectives on management are (1) the historical perspective, which includes

three viewpoints—classical, behavioral, and quantitative; and (2) the contemporary perspective,

which includes three other viewpoints—systems, contingency , and quality-management.

• Six practical reasons for studying theoretical perspectives are that they provide (1) understanding of

the present, (2) a guide to action, (3) a source of new ideas, (4) clues to the meaning of your

managers’ decisions, (5) clues to the meaning of outside ideas, and (6) understanding as to why

certain management practices produce positive outcomes. 6/6/2017 University of Phoenix: Management

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2 .2 C la ssic a l V ie w poin t: S cie n tiﬁ c & A dm in is tr a tiv e M an agem en t

• The ﬁrst of the historical perspectives is the classical viewpoint, which emphasized ﬁnding ways to

manage work more efﬁciently . It had two branches, scientiﬁc management and administrative

management.

• Scientiﬁc management emphasized the scientiﬁc study of work methods to improve productivity by

individual workers. It was pioneered by Frederick W . Taylor , who of fered four principles of science

that could be applied to management, and by Frank and Lillian Gilbreth, who reﬁned motion studies

that broke job tasks into physical motions.

• Administrative management was concerned with managing the total or ganization. Among its

pioneers were Henri Fayol, who identiﬁed the major functions of management (planning,

organizing, leading, controlling), and Max W eber, who identiﬁed ﬁve positive bureaucratic features

in a well-performing or ganization.

• The classical viewpoint showed that work activity was amenable to a rational approach, but it has

been criticized as being too mechanistic, viewing humans as cogs in a machine.

2 .3 B eh avio ra l V ie w poin t: B eh avoris m , H um an R ela tio n s, & B eh avio ra l S cie n ce

• The second of the historical perspectives, the behavioral viewpoint emphasized the importance of

understanding human behavior and of motivating employees toward achievement. It developed over

three phases: (1) early behaviorism (2) the human relations movement, and (3) the behavioral

science approach.

• Early behaviorism had three pioneers: (a) Hugo Munsterber g suggested that psychologists could

contribute to industry by studying jobs, identifying the psychological conditions for employees to do

their best work. (b) Mary Parker Follett thought organizations should be democratic, with

employees and managers working together. (c) Elton Mayo hypothesized a so-called Hawthorne

effect, suggesting that employees worked harder if they received added attention from managers.

• The human relations movement suggested that better human relations could increase worker

productivity . Among its pioneers were (a) Abraham Maslow , who proposed a hierarchy of human

needs, and (b) Douglas McGregor, who proposed a Theory X (managers have pessimistic view of

workers) and Theory Y (managers have positive view of workers). 6/6/2017 University of Phoenix: Management

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• The behavioral science approach relied on scientiﬁc research for developing theories

about human behavior that can be used to provide practical tools for managers.

2 .4 Q uan tit a tiv e V ie w poin ts : M an agem en t S cie n ce & O pera tio n s M an agem en t

• The third of the historical perspectives, quantitative viewpoints emphasized the application to

management of quantitative techniques.

• T wo approaches are (1) management science, which focuses on using mathematics to aid in

problem solving and decision making; and (2) operations management, which focuses on managing

the production and delivery of an or ganization’s products or services more ef fectively.

2 .5 S yste m s V ie w poin t

• Following the historical perspective, the contemporary perspective includes three viewpoints: (1)

systems, (2) contingency , and (3) quality-management.

• The systems viewpoint regards the or ganization as a system of interrelated parts or collection of

subsystems that operate together to achieve a common purpose. A system has four parts: inputs,

outputs, transformational processes, and feedback. A system can be open, continually interacting

with the environment, or closed, having little such interaction.

• The systems viewpoint has led to the development of complexity theory , the study of how order and

pattern arise from very complicated, apparently chaotic systems.

2 .6 C on tin gen cy V ie w poin t

• The second viewpoint in the contemporary perspective, the contingency viewpoint emphasizes that

a manager ’s approach should vary according to the individual and the environmental situation.

• In the spirit of the contingency viewpoint is evidence-based management, which means translating

principles based on best evidence into or ganizational practice, bringing rationality to the decision-

making process.

2 .7 Q ualit y -M an agem en t V ie w poin t

• The third category in the contemporary perspective, the quality-management viewpoint is concerned

with quality , the total ability of a product or service to meet customer needs.

• Quality management has three aspects: (1) Quality control is the strategy for minimizing errors by

managing each stage of production. (2) Quality assurance focuses on the performance of workers,

urging employees to strive for “zero defects.” (3) T otal quality management (TQM) is a

comprehensive approach dedicated to continuous quality improvement, training, and customer

satisfaction.

• TQM has four components: (a) make continuous improvement a priority; (b) get every employee

involved; (c) listen to and learn from customers and employees; and (d) use accurate standards to

identify and eliminate problems.

2 .8 T he L ea rn in g O rg an iz a tio n i n a n E ra o f A ccele ra te d C han ge

• A learning or ganization is one that actively creates, acquires, and transfers knowledge within itself

and is able to modify its behavior to reﬂect new knowledge.

• Three roles that managers must perform to build a learning or ganization are to (1) build a

commitment to learning, (2) work to generate ideas with impact, and (3) work to generalize ideas

with impact. 6/6/2017 University of Phoenix: Management

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Understa n din g t h e C hap te r: W hat D o I K now ?

1. What are the two overarching perspectives about management, and what are the three viewpoints that

each one covers?

2. What are six practical reasons for studying theoretical perspectives?

3. What are the contributions of scientiﬁc management?

4. How would I summarize the behavioral viewpoint and what are its contributions?

5. What is the dif ference between management science and operations management?

6. What would be an example of the application of the four parts of a system?

7. What would be an example of the application of the contingency viewpoint?

8. Where have I seen an or ganization employ evidence-based management?

9. Why should I adopt a total quality management viewpoint?

10. What are three roles I could play as a manager in a learning or ganization? 6/6/2017 University of Phoenix: Management

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Man agem en t i n A ctio n

G M ’s N ew C EO , M ary B arra , M ust M an age a M ajo r R eca ll

[General Motors CEO Mary] Barra, in a letter to employees posted on a compa ny blog [March 4, 2014],

said she is leading a group of senior executives who are monitoring the auto maker ’s recall of 1.6 million

vehicles equipped with potentially defective ignition switches and built in the years before GM’s publicly

funded bankruptcy .

The cars could suddenly turn off when the keys are jarred, shutting down the engine and the airbags.

Thirteen deaths have been linked to the problem, which GM engineers ﬁrst discovered more than nine

years ago.

GM issued a recall for the affected vehicles late last month [February], and the National Highway

Trafﬁc Safety Administration has said it is reviewing whether the auto maker should be ﬁned for taking

so long to act. . . .

Ms. Barra had not commented publicly on the situation until GM posted her letter . In her post, Ms.

Barra wrote that she is now leading the company’ s response to the problem, and promised that an internal

investigation will produce an “unvarnished report on what happened. We will hold ourselves accountable

and improve our processes so our customers do not experience this again.” . . .

Ms. Barra wrote in her letter that the ignition switch issue was being reviewed by “experienced

technical experts” who work independently of managers with responsibility for other aspects of the

business. The issue was brought to Ms. Barra and other senior executives “a few weeks ago,” she wrote.

Now , she wrote, she has created “a working group of senior executives, which I lead, to direct our

response, monitor our progress and make adjustments as necessary .” Among other steps, GM is working

with parts makers to get repair parts to dealers more rapidly and has provided federal regulators with

“comprehensive information on this issue,” she wrote.

“While I deeply regret the circumstances that brought us to this point, I appreciate how today’ s GM

has responded so far,” Ms. Barra said. “We have much more work ahead of us and I’m conﬁdent we will

do the right thing for our customers.”

Ms. Barra ’s comme nts come amid the growing likelihood that GM will face more lawsuits and a

federal ﬁne for as much as $35 million if regulators determine that the auto maker violated federal rules

that govern the timeliness of recalls. . . .

GM engin eers knew of the potential problem in 2004 when a switch failure incident was reported

around the time of the launch of the 2005 Cobalt, according to a timeline submitted by GM and provided

to NHTSA last week. GM looked into the problem, but decided to close its inquiry with no action.

In 2007, a group of GM employees met with NHTSA regulators in Washington, D.C., to discuss

another matter when a federal ofﬁcial told the GM personnel that a fatal crash had occurred on July 29,

2005, in which a 2005 Chevrolet Cobalt was involved in a front-end collision, and the airbags didn’t

deploy , according to the GM chronology .

But court documents reviewed by The Wall Street Journal show that concerns about the safety of

vehicles equipped with the suspect ignition systems continued to bounce around the company’ s

engineering department in the years after the meeting.

GM, on three separa te occasions, “repurchased” vehicles from owners who complained of stalling or

losing power while they were driving, according to a deposition by a GM employee.

One customer , a New Jersey woman who had her 2005 Cobalt repurchased, said the vehicle died on

the highway four times. She only had about 600 miles on the vehicle. She said the stalling issue seemed

to occur on right-hand turns. The dealer reported that the customer “has the fear of God in her about the

car,” according to a deposition.

GM’ s chro nology says that a higher -level team to investigate the ignition switch problem was formed

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Over the next two years, GM conducted tests and investigated the problem which ﬁnally led to a

meeting on January 31, 2014, where executives decided a recall was needed, the GM chronology states.

On February 13, GM announced it woul d recall about 778,000 Chevrolet Cobalt and Pontiac G5 cars.

Twelve days later, the company widened the recall to 1.6 million vehicles after growing consumer

complaints and issued a second formal apology to consumers. . . .

Ms. Barra in her letter addressed employee concerns about the potential damage to GM’ s reputation

and sales.

“My answer is simp le: that’ s not the issue,” she wrote. “The vehicles we make today are the best in

memory and I’m conﬁdent that they will do ﬁne, on their own merits. And our company’ s reputation

won’ t be determined by the recall itself, but by how we address the problem going forward.”

FO R D IS C USSIO N

1. T o what extent is GM using evidence-based management? Are they overdoing it? Explain your

rationale.

2. To what extent are the managerial practices being used at GM consistent with principles associated 6/6/2017 University of Phoenix: Management

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