Evolution of Management Theories
Classified in Economy
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Management History
Classical Perspectives:
No training or processes/standardization
Scientific Management
Frederik Taylor: Scientific Labour
Conduct scientific studies of each job
Match workers to jobs they're suited for
Cooperate with workers
Divide work between workers and managers (i.e. managers don't do the same jobs workers do)
'One right way' to do any task, no teamwork
Fordism: Based on electricity, moved from craft production to mass production
System based on standardization
Minimize costs rather than maximize profits
Vertical integration
Fayol's 14 Principles of Management: Early theory of management
Division of work: Dividing work of organization among people to make departments
Balancing authority and responsibility: Right to give orders shouldn't be considered without reference to responsibility
Discipline: Respect for org's rules and regulations
Unity of command: A subordinate must receive orders only from one supervisor
Unity of direction: Activities aimed to the same objective should be organized
Subordination of individual interests to the general interest: Greater good
Remuneration: Compensation based on systematic attempt to reward good performance
Centralization: Authority concentrated in a few hands
Scalar chain: Chain of command is a thing
Order: Resources in the right place at the right time
Equity: Managers should treat employees equally, combining kindness and justice
Stability of Tenure of personnel: Should have job security
Initiative: Management should encourage initiative
Esprit De Corps: Team spirit!
Human Relations Movement (or, 'when managers learned how to gaslight')
Look at social and environmental conditions
Incorporating human behaviour into management
People being noticed, social cohesion helps
How people are treated impacts performance
Management Science approach:
Operational research: rose from scientists helping the army to do war
Fiedler Contingency Model: Leader's effectiveness is based on context
Challenges classic approaches
Systems Approach:
Systems are interdependent
Inputs -- > Transformation (Processes) --> Outputs
Some outputs are returned to the environment, others are returned to the system.
TAKEAWAYS:
No “one true theory” of management
Management situations are situational
Management Functions and Roles
"I've been getting really into 'hell'. Both as a mindset and as something to strive for, in an organizational sense."
Fayol’s Management Functions:
Forecast and plan
Organize
Command/direct
Coordinate
Control
Gulick and UrwickPOSDCoRB
Planning
Organizing
Staffing
Directing
Coordinating
Reporting
Budgeting
Weber’s Bureaucracy Theory
Division of labour
Authority/hierarchy
Formal selection
Formal rules/regulations
Impersonality --> Distant and impersonal relations
Career orientation
Mintzberg’s Management Roles
Interpersonal role: Figurehead, leader, liaison
Decision role: Entrepreneur, disturbance handler, resource allocator, negotiator
Informational role: Monitor, disseminator, spokesperson
Business functions vs. Business processes
We should take a processes approach
Traditional thought of funcitons is to separate areas of operations, but this isolates parts
Processes: Looks at the org from a customer’s perspective
Takes inputs and produces outputs
Customer not involved in each function of process
Function areas are interdependent, eacher requiring information from others
Integrating functions = success win
Strategic Planning
Vision -- > What we want to be
Providesa direction and destination
Provides focus and integration
Sourcoe meaning and inspiration
Mission --> Why we exist, what we do, who we are, how we do things
Values --> What we believe
Strategic goals--> What we have to do to get there
Objectives ≠ Policy
Policy:
Originated policy: Developed in general operations
Appealed policy: Decisions from management--> Often snap decisions
Implied policy: What people see, and believe consitutes policy
Externally-imposed policy: THE LAW
2 Policy Types:
Managerial functions
Selections and development
Policies should be:
Consistent
Flexible
Not rules, guidelines
Written down
Core competencies: Distinguish your org from competitors
Distinction between creating and appropriating value
90s: knowledge-based view of the firm
Strategic Planning As Art:
People cooperate when motivated by self-interest
Putting self in others’ shoes
Interpreting and revealing information
Mintzberg’s 5 P’s:
Plan: Intended strategies and courses of action
Ploy: Specific manoeuvers
Pattern: Consistency in behaviour, whether or notit’s intended—internalized strategies
Position: Means of locating organization in its environment
Perspective: ingrained way of perceiving the world
Administration vs. Management:
Management brings together administration’s strategic goals
Planning organizations into uncertain environments:
Strategic plans: Organization-wide, establishobjectives, and the position
Operational plans Details on how objectives are achieved
Planning: Analytical process: rely on environmental scanning. My notes say that this “depends on a good team leader, apparently”
Make future assessment
Determine desired objectives
Developing alternative courses of action
Selecting course of action
Strategic planning--> Longer term
How to determine if one service is better than others? Profit
What if there’s no historical data? Guess
Ask: Do you have the right strategy? A fair process for developing the strategy will have a better buy-in
GOALS: WHAT, NOT HOW. HOW IS OBJECTIVES.
Porter’s 5 Forces: Positioning and value chain:
Framework for industry analysis, used when moving into industries or expanding operations
Buyer power: As a supplier business you want low buyer power
In most industries this has gone up
Businesses lower buyer power through loyalty programs (😉)
Supplier power:
Opposite of buyer power
Wants high supplier power
Organizations look for alternative supply sources to create a competitive advantage
Threat of substitute products or services
Marketing with few substitutes
Build in switching costs to the plan
Threat of New Entrants
If it’s easy for another org to enter the market
Entry barriers
What customers expect in that industry
Rivalry among existing competitors
Rivalry is high when competition is fierce
Porter’s Generic Positioning Strategies
Don’t follow more than one at a time since they contradict
Differentiation: Offering service that is unique in the marketplace
Focus: Is a strategy that offers niche products to customers in a specific demographic/geographic market
Adding extra for serving market
Have to really understand market
From there, need to choose a cost or differentiation model
Cost: Increase profits by reducing costs, increase market share by charging lower prices
Differentiation: Make products or services more attractive than competitors
Picking the right strat:
SWOT Analysis
5 Forces analysis
Compare SWOT with 5-Forces
Manage supplier and buyer power
Win the competitive rivalry
Reduce/eliminate substitutes and new threats
Select strategy that gives you the best options
Value Chain analysis:
Value chain: Sequence of activities your organization performs leading to products and services
Focus on activities that increase value
Porter: 2 Activity sets:
Understanding the links between these helps improve performance
Primary Value Chain:
Inbound
Operations
Outbound
Service
Marketing
Support Activities
Research and development
Human resources
Infrastructure
Procurement
PESTLE and SWOT
PESTLE: External environment scan:
Political
Economic
Social
Technological
Legal
Environmental
SWOT:
Strengths
Weaknesses
Opportunities
Threats
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MOTIVATION
If employees are more motivated, they do better, and the organization does better
William James: Unmotivated workers don’t use their full potential (much insight, very innovate)
Basic assumptions for motivation theories:
All behaviour is motivated
People are human
People have value
Needs depend on culture
Brewer, “A Symposium on Public Service Motivation”
Motivation theory: “Very mysterious”
Been difficult to identify--> Motivation different from private sector but might do for some tasks
Maslow’s Hierarchy of Needs is foundational: I’m not making notes on this.
McGregor Theory X and Y:
Two management styles
X-Style
Authoritarian, thinking workers just want money, people prefer to be directed
Low trust
Y-Style
Teams have pride and satisfaction
People like responsibility and discipline
Most managers combine styles
McClelland 3 Needs Theory:
Everyone learns one of these three needs—everyone has them, but most will have a strong tendency towards one.
Achievement: Responsibility, needs feedback, takes moderate risks
Power: Influence, competitive; needs direct feedback
Affiliation: acceptance, cooperative; give feedback away from the group
Edwin Locke’s Goal-Setting:
Set difficult goals
Specific and challenging goals, paired with appropriate feedback: better motivation, better performance
Adam’s Equity theory:
Employees compare inputs and outputs
Evaluate their own inputs and outputs to that of other workers
Negative inequality reduces motivation
Hard to quantify
Perceived inequality can also be bad
Levinson, “Management by Whose Objectives?”
Management By Objectives has major problems, namely it ignores deeper motivational factors that go into someone’s workplace behaviour
Goal-setting always heavily subjective
Further you lean into objectivity, the more liekly subtle, nonmeasurable elements will be sacrificed
MBO Process leaves out personal goals “it is simply assumed that because a goal is rational, employees will see the rationality and pursue it”
Look at employee needs:
Assess how well they can be met in the organization
While doing what org needs done
Midlife crises are a thing
Herzberg, “How do you motivate employees?”
Kicks In The Ass are not motivation
Hygiene vs. Motivators: Job satisfaction is produced by factors distinct from job dissatisfaction
Hygiene: Necessary but not sufficient for satisfaction, e.g. supervision, policy, working conditions, salary, peers, security
Motivators: achievement, recognition, responsibility, growth
Remove hygiene problems, increase motivators
Animal needs vs. The ability to achieve and have psychological growth
Motivators:
Achievement
Recognition of achievement
Work itself
Responsibility
Growth or assessment
Job loading: horizontal job loading typically enlarges meaninglessness of the job
Vertical job loading: keep accountability, give independence, enable people to become experts
Victor Vroom, Expectancy Theory
Individual will act based on expected outcome;behaviour based on desirability of that outcome
Multiplication logic: basically if one factor is zero, they’ll all be zero
Expectancy: How much harder will I have to work?
Instrumentality: What is the reward?
Valence: How attractive is the reward relative to the added work? (This one can be in the negative)
Need to understand rewards employees really want and value
Need to make sure rewards are deserved and related directly to performance
Pink’s Motivation Talk
Overcoming functional fixedness is important
Contingent motivators often don’t work and often do harm
Reward and punishment doesn’t work, if/then rewards also don’t work
Narrowing problem is important
A larger reward lead to worse cognitive effort in studies:
Higher incentives lead to worse performance
Intrinsic motivation:
Purpose
Mastery
Autonomy