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Schools of Management Thought

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Schools of Management Thought
(Note: This Chapter Outline corresponds to Chapter 2 within Management: Comprehension, Analysis, and Application, Gatewood, Taylor & Ferrell, 1st edition, 1995. Numbers at right are the corresponding page numbers for your use in referencing.)
Executive Summary: There are four schools of management thought. The classical school of thought, influenced by the tenets of capitalism and the Protestant Ethic, views workers as 'machines' (ie, as a smaller machine inside the big factory machine, as a "cog in the works") and embraces the use of productivity measures, bureaucratic/hierarchical control structures, and scientific management techniques. The behavioral school of thought views workers as 'people' and embraces the use sociological/psychological techniques. The modern school of thought avoids bureaucratic/hierarchical control structures, and embraces the use of teams and cooperation as well as sociological/psychological techniques. The systematic school of thought views organizations as made up of 'input-process-output' building blocks, and embraces techniques that integrate both scientific management and sociological/psychological techniques.
The Protestant Ethic (or 'the work ethic') (32-33)
Described in the works of Martin Luther and Jean Calvin, early 16th century
During their earthly life, every person should not passively await the salvation of afterlife

During their earthly life, every person should work hard

During their earthly life, every person should accumulate and wisely use wealth

During their earthly life, every person should live in self-denial

Four Basic Tenets of Captialism (33)
Described in The Wealth of Nations, Adam Smith, 1776.
1) The laws of supply and demand will ensure the best use of society's resources

2) Everyone has the right to accumulate wealth

3) Everyone has the right to own property

4) Division of labor yields gains in productivity

The Protestant Ethic and the Spirit of Captialism, Max Weber, 1930
Argues that 'the work ethic' and capitalism are mutually supportive

Four Major Ages of Society

Hunter-gatherer age

Agricultural age (or the "first wave"

Industrial age (or revolution or "second wave") (34)

Technological / Information age (or "third wave")

Evidence of the move from the Agricultural Age to the Industrial Age (34)

Interchangable parts

1851, then called "the American System of Manufactures"

Mass production techniques

1914, the first Ford assembly line

Standardized products

Large factories

The Four Major Schools of Management Thought (35)




(The text mentions 'the contingency school' (p. 36, 49) but let's "skip it")

The Classical School of Management Thought

Workers viewed as 'machines', ie, as a smaller machine inside the

big factory machine, as a "cog in the works." (see picture on p. 35)

advocates hierarchical authority (36)

advocates division of labor (into simple a/o unskilled tasks) (33-34)

strongly associated with Scientific Management (36)

Scientific Management, Fredrick Taylor, 1911
Taylor is called "the father of scientific management" (36)
focus on labor productivity and efficiency (37)
General Principles of Scientific Management (37)
1) There is one best way to perform a task

2) Selection and training of workers should be scientific.

3) Incentives should be provided for workers to use the "one best way"

4) Managers and labor share work and responsibility.

Three Assumptions Underlying the General Principles (37-38)

of Scientific Management

1) Employers and employees have a shared goal in economic gain.

Counterexamples: "downsizing," minimizing wages

2) Man is rational and economically motivated

Counterexamples: romance, auto purchasing, loyality

3) For every person, there is a job for which he is ideally suited.
associated with 'the quantitative (or decisional) approach' (38)
emerged after World War II
emphasizes the application of mathematical models and

statistics to support rational decision making.

embraces the areas of management science and production &

operations management.

historically influenced by scientific management principles.
This is 'snipped' from one of my other writings: (If something is long and single spaced, you are not "responsible" for the material in detail, it is rather "JFYI, " just for your information, to support your understanding of the concept.) "During World War II, the military was faced with many new and complex questions, such as what flight patterns should be used over the English Channel by planes looking for German submarines, that could not be answered by traditional methods such as studying past military history. The Office of Strategic Services (OSS), predecessor of the CIA, tried to provide answers by bringing together a number of preeminent thinkers who viewed these questions as military decisions with optimal (ie, "best") answers that could be determined through the use of scientific, mathematical, logical and analytical methods. These thinkers added enough new insight into such questions that their approach received encouragement and funding for additional research after the war. Eventually, some of their approaches were found to be useful in business as well. For instance, PERT (Program Evaluation and Review Technique) was originally developed in the late 1950's by the RAND Corporation (a Department of Defense 'think-tank' that was 'home' to a number of these thinkers after the war) as a logical method for organizing the "on-time, on-budget" completion of the Polaris nuclear missile project. By the 1960's, PERT was being used by construction companies to manage large industrial projects such as the building of power plants. Today, PERT is taught within 'project management' coursework in most business schools, and PERT based personal computer software packages (eg, Microsoft Project) are used to control all types of typical managerial 'projects' (eg, launching a new marketing campaign). The continued success of this decisional approach through the 1950's contributed to the rise of academic disciplines such as management science, game theory, military science, operations research, and decision sciences. By 1960, the revered academic Herbert Simon had redefined the primary role of manager from that of 'taskmaster/overseer of direct labor' to 'professional decision-maker.' Many business schools that focused on the teaching of vocational skills such as bookkeeping during the 1950's, were in part influenced by these events to incorporate a more quantitative approach within their curriculums. Many excellent and widely used decisional management tools have been developed that greatly improve the efficiency of American mass production including Material Requirements Planning (a logical process for planning material deliveries and production floor schedules), a variety of demand forecasting models and formulas for predicting product demand, and linear programming methods that use an algebraic approach to find "optimal" solutions to a number of common management problems."
advocates bureaucracy (42)
described in the works of Max Weber
advocates authority vested in the office, rather than the individual

(Example: President by vote vs. King by birthright)

"Even today, you can observe the classical school of management thought in use when production standards (ie, a worker must paint 75 widgets per hour "to get production") or time and motion studies (eg, the observing and timing of labor) to set those standards are employed."

The Behavioral School of Management Thought

also called the 'human relations movement'
views workers as 'people' and embraces the use of sociological & (43)

psychological techniques

Individuals who, while conducting research in scientific management, found

evidence to support the humanization of worker conditions

Frank and Lillian Gilbreth (38-39)

Henry Gantt (39)

Morris Cooke (39-40)

Mary Follett (43-44)

argued that work groups are one of the most (43)

significant sources of influence on worker behavior

Example: peer pressure

Elton Mayo (44-45)

The Hawthorne studies and the "Hawthorne effect"

run at Western Electric Hawthorne, Illinois plant

Hypothesis: there is significant POSITIVE correlation

between the level of workplace lighting and worker output,

ie, brighter light->higher productivity (a selfserving hypothesis

that was promoted by the electric companies)

Results: dimmer light -> higher productivity was observed !

Factors other than lighting were more important to increase

The General Conclusion: the social needs of workers

are a crucial aspect of productivity management

Conclusion was 'turning point' towards the behavioral school of

management thought

basis for The Human Problems of an Industrial Civilization, 1933

Some other individuals who contributed to the behavioral school

Abraham Maslow
Hierarchy of Needs (45, 465-466)

individuals seek to meet these needs 'in order,' lower first

Douglas McGregor
'Theory X' perspective of management
workers are 'bad'

people have little ambition at work

people dislike work, and so must be threatened a/o forced to work

people seek to fulfill lower-order needs through work

people prefer formal direction in the workplace

Theory X is more 'classical' in nature

'Theory Y' perspective of management

workers are 'good'

people aspire to responsibility and self-control at work

people prefer to work

people seek to fulfill higher-order needs through work

people prefer informal control mechanisms in the workplace

Theory Y is more 'behavioral' in nature
basis for The Human Side of Enterprise, 1960
Henri Fayol
General Principles of Management (41)

Some principles are more 'classical' in nature

division of work (labor)

authority and responsibility


unity of command, direction


scalar chain (eg, "top-down" authority) (41, 346-347, 349)


Some principles are more 'behavioral' in nature


worker tenure


esprit de corps

'fair' renumeration
contained in General and Industrial Management, 1916
Fayol's functional definition of management (40)

(as quoted in General and Industrial Management, Henri Fayol, 1916)

"to forecast and plan, to organize, to command, to coordinate and to control")
You'll see the classical vs. behavioral idea "resurrected" a number

of times in the course. For example see p. 309, pp. 338-340, p 464.

The Modern School of Management Thought
Forward and popular thinking, for the most part by non-academics
Tom Peters
In Search of Excellence: Lessons from America's Best-Run (51)

Companies, 1982. (Coauthored with Bob Waterman, Jr.)
Here's a snip from my notes about the book::
The book identifies and studies the best run companies in America and identify common traits, eg, a bias for action, a customer orientation, a tendency to "stick to the knitting." The text popularized the phrase "management by walking around," or "MBWA." Ironically, some of the companies they identified, such as Cat, GM, and IBM, are now generally acknowleged as being in crisis. Peters holds an MBA and a Ph.D. from Stanford's Graduate School of Business. The text was second only to Roots in total nonfiction sales; Peters' first royalty check from the book was just under $2 million. During the authoring of the book, Peters left McKinsey & Co., to form his own consulting group. During the early 1990's, Peters commanded $65,000 for a two hour seminar and has practically become an industry in his own right. The book is included in Business Week's Ten Classic Books for Management, where is was said to be "at once the most overrated and the most underrated management book of all time [that] can't be ignored because of its phenomenal impact and its own excellence." According to a Wall Street Journal survey, he is among the the ten most frequently employed consultants in executive education. The text is one of the Baker's Dozen of idea books noted in Carl Sewell's Customers for Life, and served as the basis for a 1985 PBS special. In 1996, Peters was indexed first in awareness and credibility among business leaders by Siegel and Gale / Ropel Starch Worldwide; his rating was twice that of second place Bill Gates. Business Week once described Peters as "the best friend and worst nightmare of business."

The Eight Attributes of Excellence

A bias for action -- a preference for doing something -- ANYTHING -- rather than sending a question through cycles and cycles of analyses and committee reports

Staying close to the customer -- learning his preferences and catering to them

Autonomy and entrepreneurship -- breaking the corporation into small companies and encouraging them to think independently and competitively

Productivity through people -- creating in all employees the awareness that their best efforts are essential and they will share in the rewards of the company's success

Hands-on, value driven - insisting that executive keep in touch with the firm's essential business

Stick to the knitting - remaining with the business the company knows best

Simple form, lean staff - few administrative layers, few people at the upper levels

Simultaneous loose-tight properties - fostering a climate where there is dedication to the central values of the company combined with tolerance for all employees who accept those values.

Thriving on Chaos: Handbook for a Management Revolution, 1987

organizations must be designed to be dynamic, to be adaptive, to

operate under constant change
Example: Bees, flies & a glass jar; the 'fly' system handles change

Liberation Management: Necessary Disorganization for the Nanosecond

Nineties, 1992.

control via hierarchical organization is no longer effective

organizations should and will be run using small entrepreneurial teams

markets are becoming fickle, ephemeral, impermanent, fleeting

William Ouchi (51)
Theory Z: How American Business Can Meet the Japanese Challenge, 1982
Japanese workers are viewed as neither "good" (Theory Y) nor "bad,"

(Theory X) but are the organization, involved in all aspects of the

decision making process
worker empowerment, structures for increasing the ability and authority

of workers to make corporate decisions typically reserved for management.

management concern for quality of work life (QWL) through lifetime

employment, trust and intimacy in professional relationships, slow

and equitable promotion and advancement

A culture of "win/win" cooperation (versus "win/lose" competition).
Example: Win/Win and Win/Lose Sales Forces
Win/Lose -- Salesmen with highest sales goes to Hawaii. The untrue assumption: This will motivate each salesman to maximize sales, thereby maximizing total sales. The undesirable effects: Salesmen throw away leads they can't close themselves. Salesmen try to ditch the sales of others. Salesmen sell product to customers that they won't be happy with; customers quit the company. Remember the movie Glengarry Glen Ross (1992)?

Times are tough in a Chicago real-estate office; the salesmen are given a strong incentive by Blake to succeed in a sales contest. The prizes? First prize is a Cadillac Eldorado, second prize is a set of steak knives, third prize is the sack! There is no room for losers in this world; only "closers" will get the good sales leads. There is a lot of pressure to succeed, so a robbery is committed which has unforseen consequences for all the characters.

Win/Win -- If sales force increases total sales by $100,000, they all go to Hawaii. (salesmen stop trying to ditch the efforts of others, instead help each other close sales.)

(See the "Win/Win" chapter in Seven Habits ... for more)

use of small teams of workers for decision-making

(Peter Drucker, the most prolific management writer of the 20th century

and notably absent in this chapter, best fits here, I suppose...)

The Systematic School of Management Thought (46-47, 293)

views organizations as made up of 'input-process-output' building blocks (47)

Here's a simple example from elsewhere my notes...

embraces techniques that integrate both scientific management and

sociological/psychological techniques. ('Human nature' must be included.)

focuses on synthesis (versus analysis)

management analysis has been overemphasized during late 20th century
Example: Analysis of automobile made for sale and use in Japan. Disassemble it. Measure every part in the most exact detail. Measure their interactions completely -- how do the left front tire and the left front tire balancing weights effect each other; how is the tire affected if the weights are removed? The most complete undertanding of its parts and how they relate will NOT give you the slightest clue why the steering wheel is on the left. Synthetical, not analytical, understanding is required; the auto must be studied as a part of, and within, its entire system in order to know it.
focuses on seeking, on increasing synergy (47, 275, 333)

JFYI .... Teams strive for synergy. R. Buckminster Fuller coined the term 'synergy' from the Greek word synergos, meaning 'working together.' He defined synergy as "synthesis plus energy; that is, when individuals join in a cooperative venture, the power generated far exceeds what they could have accomplished acting individually." In common usage, people say that synergy means that "the whole is greater than the sum of the parts." Russell Ackoff says that that a team is "more than the sum of its parts, but the product of its interactions." Synergy is considered part of the systematic approach. Research backs up this thinking; it well known that small groups of peers have higher decision quality than any of one its individual members. There is something in our nature that makes us think that in business we must establish all sorts of measurements, rules, procedures and controls to organize and monitor the efforts of individuals towards higher productvity. When you look at such things being done, please think about how your "productivity" increases when you form study teams, where, without such measurements, rules, procedures and controls, you are simply allowed to organize your own efforts towards a truly shared mission.

Example: Two boards clamped together hold more weight than the

combined weight that can be held by each separately

Example: Cheesecake > cream cheese + graham crackers

Example: Football team > quarterback + halfback + center + ......

Example: Marriage > husband + wife
Example: Orchestra. Imagine you are listening to the Star Spangled Banner played by the Boston Pops. Now imagine you are listening to a mediocre high school band play it. Different? Why, aren't they playing from the same set of sheet music, following the same procedures, both meeting the required standards of productivity? Haven't both performed the same efficient "division of labor?" One reason for the difference is that the synergy of the Boston Pops -- how they work together, how they play to complement each other -- is greater.
(Please always remember the Orchestra Test for Managing. Before you do something as a manager, or believe something is a good management idea, ask yourself how well it would serve if you used it to "manage" a mediocre high school band into becoming the Boston Pops! What about productivity measures; would cranking out more notes do it? What about micro cost control; would setting a standard for the number of instrument strings to buy do it? How about competition; do you want musicans competing on stage to maximize the total amount of beautiful music?)1
In a synergistic situation, weaknesses (eg, "I can't speak in front of large groups.") often may be offset by strengths (eg, Hey, I am great at speaking to large groups!") plus capture the benefits of other strengths as well.
focuses on avoiding, on decreasing entropy (47)
natural tendency of systems to deteriorate, to drift away from an organized state, over

Example: A rack of pool balls arranged in a neat triangle on the table. Break them, they scatter. Who would expect the reverse; that hitting scattered pool balls would roll them up into a racked triangle?

Example: Two buckets of water, one hot, the other cold. Mix them then pour them back into two buckets. The molecules scatter, resulting in two buckets of warm water. Who would expect the reverse; that mixing two buckets of warm water would result in one hot, the other cold?
Physics-types call entropy "the arrow of time" if you "taped" these things and played the tape backwards, you would know something was wrong
focuses on "feedback" to defeat entropy, historically neglected
Example: A cruise ship sets out on a certain course, a certain heading. Drift from this course is inevitable. Common variation occurs; the wind, error in course entry, less than perfect steering, change in weather, unpredictable currents. Special cause variation occurs; an iceberg appears in its path, a unplanned stop must be made. At intervals, the captain obtains factual feedback and acts appropriately. He compares the supposed location (according to time and distance along the course) to the actual location as determined by global positioning satellites. The captain determines a correcting adjustment, a new heading. The rudder is turned. Organizational systems experience such "drift" from the true course, the true aim, and must obtain factual feedback and adjust course appropriately. An organization that does not use feedback for correction, but rather just continues on its original course today, starting out where it left off yesterday with no adjustment for variation, will always drift further and further off-course, (In the words of Deming, it will "move off to the Milky Way."). Both customer driven companies and satellite-driven ships are using feedback towards appropriate adjustment.

See also "Pink Ice in the Urinals" within Leadership is an Art

Here is another snippet from my notes introducing the idea of a system, again JFYI:
"Basically, a system is comprised of processes that operate according to rules that ensure consistent output. As an example, consider the "escaping" process from a simple maze. A mouse typically uses a 'random bump' rule (bump into walls at random until the exit path "output" is found). The output from the 'random bump' rule is inconsistent -- exit paths differ or may never be outputted at all. The 'hand-walk' rule is a systematic process. A person can always escape from a simple maze by placing one hand on either wall at the entrance, then just walking along, never taking his hand off the wall, until the exit is reached. The 'hand-walk' rule ensures that a useable exit path is consistently "output," although it will not usually be the shortest path. Systems do not always appear to be the most efficient approach, when, in fact, they are if they avoid greater inefficiencies and wastes due to inconsistency of output. (Systems can, and often do, ensure consistently incorrect output; think of all the people who use a 'system' to pick winning lottery numbers!)"

Chester Barnard (47)

(According to your book, Barnard is also a "systems thinker." Ok?)

The Functions of the Executive, 1938.
Organizations must adjust to a constantly changing external environment.

Individuals join organizations to cooperatively reach goals unattainable individually

Getting people to believe in organizational goals is a major function of managers
Acceptance Theory of Authority (48)
Authority in organizations really flows upwards or "bottom-up"

(The opposing idea, that authority flows downwards, or "

top-down;" is called verticality, scaler, or scalar chain; see pp.

41, 346-347, 349)

Example: Getting a PC one part at a time

Example: Work to Rule; "I'm smokin! Somebody stop me!"

W. Edwards Deming (49)
Out of the Crisis, 1986
The New Economics for Industry, Government, Education, 1991
The perspective of quality as a profit driver, rather than as a cost driver.
The integration of quantitative methods and efficiency concepts with psychological and social factors into a single system.
The organizational goal of continuous improvement

Peter Senge

The Fifth Discipline, 1990
professor at MIT's Sloan School of Management

Five disciplines organizations must master to succeed

systems thinking

personal mastery of learning

mental modeling

shared vision building

team learning (the 'fifth' discipline)
Russell Ackoff
professor at Penn's Wharton School of Business
Relevant Readings
Functions of the Executive, Chester I. Barnard, 1938. (ties to GTF at pp. 47-48)
General and Industrial Management, Henri Fayol, 1916. (ties to GTF at pp. 40-41)
In Search of Excellence: Lessons from America's Best-Run Companies, Tom Peters & Robert H. Waterman, Jr., 1982. (ties to GTF at pp. 50-51)
Motivation and Personality, Abraham H. Maslow, 1954. (ties to GTF at p. 45)
Quality or Else: The Revolution in World Business, Lloyd Dobyns and Clare Crawford-Mason, 1990, pp. 19-20.
The Human Problems of an Industrial Civilization, Elton Mayo, 1933. (ties to GTF at pp. 44-45)
The Human Side of Enterprise, Douglas McGregor, 1960. (ties to GTF at pp. 45-46)
The New Science of Management Decision, Herbert A. Simon, 1960.
The Principles of Scientific Management, Fredrick W. Taylor, 1911 (ties to GTF at pp. 36-37)
The Protestant Ethic and the Spirit of Capitalism, Max Weber, 1930. (ties to GTF at pp. 32-33)
The Third Wave, Alvin Toffler, 1980.
Theory Z: How American Business Can Meet the Japanese Challenge, William Ouchi, 1982. (ties to GTF at p. 51)
Wealth of Nations, Adam Smith, 1776. (ties to GTF at p. 33)

1References to this 'test' can be found many places including Post Capitalist Society, Peter Drucker, 1993, pages 54, 88; The New Economics for Industry, Government, Education, W. Edwards Deming, 1994, page 96; The Deming Management Method, Mary Walton, 1986, page 61. Deming attributes the concept to his friend Robert Piketty; see Dr. Deming: The American Who Taught the Japanese about Quality, Rafael Aguayo, 1990, page 35.

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