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The History of Management Thought. Mike Bejtlich. Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren. Part Four. The Modern Era. Chapter Nineteen. Management Theory and Practice. The Modern Era. The Renaissance of General Management

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the history of management thought

The History of Management Thought

Mike Bejtlich

Based on The History of Management Thought, 5th edition, 2005by Daniel A. Wren

part four

Part Four

The Modern Era

chapter nineteen

Chapter Nineteen

Management Theory and Practice

the modern era
The Modern Era
  • The Renaissance of General Management
    • Fayol’s Intellectual Heirs
    • Management Education
    • Other Views of Managerial Work
    • Peter Drucker: The Guru of Management
  • From Business Policy to Strategic Management
    • Markets and Hierarchies
    • Governance and Agency Issues
    • Management as an Integrating and Innovating Task
    • Strategy and Views of the Firm
    • Strategic Leadership and Evolutionary Dynamics
the renaissance of general management
The Renaissance of General Management
  • Henri Fayol – the first to propose a general theory of management
    • The elements of management describing what managers did (plan, organize, command, coordinate, and control).
    • The principles, which were lighthouses, or guides, to how to manage.

Henri Fayol

fayol s intellectual heirs
Fayol’s Intellectual Heirs
  • William Newman (1909-2002) – “the basic objectives of the firm should define its place or niche in the industry, define its social philosophy as a business ‘citizen,’ and serve to establish the general managerial philosophy of the company” (Wren text)
  • George Terry (1909-1979)– first to call his book Principles of Management
  • Harold Koontz (1908-1984) and Cyril O’Donnell (1900-1976) – defined management as “the function of getting things done through others” in their popular text.
management education
Management Education
  • The Gordon and Howell Report 1959:
  • Asked: What are we teaching in business schools and does this prepare our students for a career in a changing environment?
  • Cited the need for more courses in:
    • The humanities and liberal arts.
    • Mathematics.
    • The behavioral and social sciences.
  • Compare a pre-1959 B-school curriculum to your current requirements.
management theory jungle harold koontz 1908 1984
Management Theory Jungle – Harold Koontz (1908-1984)
  • Six Different Schools – management process, empirical, human behavior, social system, decision theory, mathematical schools.
  • Each can contribute, but some are “tools.”
  • Causes of confusion and the “jungle warfare”
    • “The semantics jungle”
    • Problems in defining management as a body of knowledge
    • The misunderstanding of principles through trying to disprove an entire framework of principles when one principle was violated in practice
    • Inability or unwillingness of management theorists to understand each other.
other views of managerial work
Other Views of Managerial Work
  • Henry Mintzberg (1939- observed five executives and concluded mangers perform ten roles within three categories: interpersonal, informational, and decisional.

Henry Mintzberg, courtesy of the University of Western Ontario

other views of managerial work10
Other Views of Managerial Work
  • Rosemary Stewart examined the "demands," "constraints," and "choices“of a managers job.
  • John Kotter's studies of general managers and his finding of certain "demands" or regularities in all general managers' jobs that resemble traditional management functions. Note, also, the factors that cause these to vary.
other views of managerial work11
Other Views of Managerial Work
  • Fred Luthans, Richard Hodgetts, and Stuart Rosenkrantz studied 44 managers, recording activities and behaviors.
  • In Real Managers they note four categories: routine communication, traditional management, networking, and human resource management.

Richard M. Hodgetts

the search for excellence
The Search for Excellence
  • Thomas Peters and Robert Waterman identified eight attributes of corporate excellence in their best selling book, In Search of Excellence.
  • Peters and Waterman relied solely on financial measures in determining success.
management education revisited
Management Education Revisited
  • Harold Koontz revisited the management theory jungle and expanded it from 6 to 11 approaches.
    • Called for leading managers to narrow the gap between professional practice and business schools.
  • Lyman Porter and Lawrence McKibbin surveyed management education for the AACSB.
    • Called for professors to be more broadly educated and possess relevant work experience.
peter drucker 1909 guru of management practice
Peter Drucker (1909 –Guru of Management Practice
  • Drucker achieved prominence through his writings and consulting.
  • He asks:
    • What is our business?
    • Who I the customer?
    • What does the customer buy?
    • What does the customer consider value?
    • What will our business be?
    • And what should it be?

Peter F. Drucker

peter drucker 1909 guru of management practice15
Peter Drucker (1909 –Guru of Management Practice
  • Importance on Innovation
  • Key areas for setting objectives and evaluating results
    • Fortune magazine publishes a survey of the most “admired” corporations. The areas that Fortune uses bear a strong resemblance to Drucker’s key areas.
  • Management by Objectives
peter drucker 1909 guru of management practice16
Peter Drucker (1909 –Guru of Management Practice
  • Drucker’s focus on managerial practice asks the lingering question: “Can our academic research have rigor and also be relevant to the practice of management?”
from business policy to strategic management
From Business Policy to Strategic Management
  • Markets and hierarchy
    • Echoing the work of earlier economists such as Say and Marshall, who saw management as a factor of production and able to provide competitive advantage, Ronald Coase, in a 1937 article, asked why have business firms?
    • Coase saw the firm as an alternative to the market with certain advantages in allocating resources.
from business policy to strategic management18
From Business Policy to Strategic Management
  • Markets and hierarchy
    • Echoing the work of earlier economists such as Say and Marshall, who saw management as a factor of production and able to provide competitive advantage, Ronald Coase, in a 1937 article, asked why have business firms?
    • Coase saw the firm as an alternative to the market with certain advantages in allocating resources.

Ronald Coase

from business policy to strategic management19
From Business Policy to Strategic Management
  • Oliver Williamson (1932-) and the “new institutional economics” saw the hierarchy of the firm being typically more efficient than markets because firms could internalize transaction costs (remember Commons?) and provide monitoring mechanisms to thwart, hopefully, opportunism.

Oliver Williamson

from business policy to strategic management20
From Business Policy to Strategic Management
  • Governance and Agency Issues
    • If the firm, through management, is more efficient than the market, then the actions of those who govern the firm becomes more significant.
    • A number of individuals, such as Michael Jensen, criticize the behavior of those in the managerial hierarchy who serve their own interests rather than those of their shareholders.
    • The separation of ownership and control is an evergreen issue to catch the conscience that lies within.
from business policy to strategic management21
From Business Policy to Strategic Management
  • Agency theory,
    • assuming it is a theory, creates situations that lead to opportunistic behavior.
    • Assumes that everyone will engage in opportunistic behavior—leading to contracts and other means of monitoring behavior.
    • Involves issues of trust, fidelity, and other appropriate behaviors in contrast to the assumptions of agency theory.
    • How do our assumptions about the behavior of others influence how we manage?
management as an integrating and innovative task
Management as an Integrating and Innovative Task
  • Henri Fayol was a strategist. (See quote in Wren text.)
  • Arch Shaw (1876-1962) pioneered the study of business policy as a academic subject at Northwestern University.

Henri Fayol

management as an integrating and innovative task23
Management as an Integrating and Innovative Task
  • There is a rich heritage of “strategy” in Barnard, Newman, Drucker, and Chandler.
  • Strategic management has emerged as the “new” view of business policy and long range planning.

Alfred D. Chandler,

Courtesy of Harvard Business School

from business policy to strategic management24
From Business Policy to Strategic Management
  • Strategy and Views of the Firm
    • Michael Porter (and others) in industrial/organizational economics made key contributions to strategy.
    • Porter’s “five forces” framework, value chain and “generic” strategies.

Michael E. Porter,

Courtesy of Harvard Business School

from business policy to strategic management25
From Business Policy to Strategic Management
  • Strategy and Views of the Firm
    • Edith Penrose (1914-1996)asked why firms differed in performance, providing seminal insights for the resource based and the knowledge based views of the firm.
    • SWOT— In 1960s HBS policy group began use of the term.
    • Important developments in “core competencies” and “distinctive competencies” followed through the work of Wernerfelt, Rumelt, Barney, Prahalad, and Hamel.
from business policy to strategic management26
From Business Policy to Strategic Management
  • Strategic Leadership and Evolutionary Dynamics
    • “Evolutionary economics”—how to create and gain competitive advantages through innovation.
    • Organizational learning to “unbound” rationality and move to new and innovative forms of competitive advantage.
    • Strategic leadership—the bridge to general management theory.
  • General management theory reawakened as organizations grew more complex and needed more broadly educated general managers.
  • Drucker and others emphasized the need to improve the practice of management.
  • General management also grew through a resurgence in industrial/organizational economics.
  • Business policy evolved to strategic management.
chapter twenty

Chapter Twenty

Organizational Behavior

and Theory

organizational behavior and theory
Organizational Behavior and Theory
  • People and Organizations
  • Organizations and People
gordon howell report 1959
Gordon & Howell Report 1959
  • Triggered more interest in the behavioral and social sciences
    • The behavioral/social scientists were trained differently in research methods and drew on a different body of literature.
    • Human relations thought was modified by these behavioral scientists, providing for a transition from human relations to organizational behavior.
keith davis 1918 2002 mr human relations
Keith Davis (1918-2002) Mr. Human Relations
  • Acts as a transition point for human relations and organizational behavior.
  • Defined human relations as “the integration of people into a work situation in a way that motivates them to work together productively, cooperatively, and with economic, psychological, and social satisfaction.”
  • Modern Human Relations – Two Facets
    • Organizational behavior
    • Human relations
chris argyris 1923
Chris Argyris (1923 -
  • Influenced by the humanist approach of Abraham Maslow and the socio-technical process of E. Wight Bakke.
  • Indicated his feelings about how organizations neglected human needs.

Chris Argyris courtesy of the University of Western Ontario

chris argyris personality vs organization
Chris Argyris – Personality vs. Organization
  • Certain organizational practices, such as the division of labor, interfered with the development of health human personalities.
  • These practices promoted immature, not mature behavior.
  • In an attempt to self-actualize, individuals ran into the obstacles posed by formal organizations.
  • The result was defensive behaviors, with management reacting by becoming more autocratic or by turning to sugar-coated human relations.
douglas mcgregor 1906 1964
Douglas McGregor (1906-1964)
  • Taught psychology at MIT.
  • At Antioch College, McGregor found that his classroom teaching of human relations did not always work in practice.
  • From these experiences, his ideas evolve and lead him to recognize the influence of assumptions we make about people and our managerial style.

Douglas McGregor

Courtesy of University of Western Ontario

theory x
Theory X
  • Management is responsible for organizing the elements of productive enterprise – money, materials, equipment, people – in the interest of economic ends.
  • With respect to people, this is a process of directing their efforts, motivating them, controlling their actions, modifying their behavior to fit the needs of the organization.
  • Without this active intervention by management, people would be passive – even resistant – to organizational needs. They must, therefore, be persuaded, rewarded, punished, controlled – their activities must be directed. This is management’s task -- in managing subordinate managers or workers. We often sum it up by saying that management consists of getting things done through other people.
theory x continued
Theory X (continued)
  • Behind this conventional theory there are several additional beliefs – less explicit, but widespread:
    • The average man is by nature indolent – he works as little as possible.
    • He lacks ambition, dislikes responsibility, prefers to be led.
    • He is inherently self-centered, indifferent to organizational needs.
    • He is by nature resistant to change.
    • He is gullible, not very bright – the ready dupe of the charlatan and the demagogue.
theory y
Theory Y
  • Management is responsible for organizing the elements of productive enterprise – money, materials, equipment, people – in the interest of economic ends.
  • People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organizations.
  • The motivation, the potential for development, the capacity for assuming responsibility, the readiness to direct behavior toward organizational goals are all present in people. Management does not put them there. It is a responsibility of management to make it possible for people to recognize and develop these human characteristics for themselves.
  • The essential task of management is to arrange organizational conditions and methods of operation so that people can achieve their own goals best by directing their own efforts toward organizational objectives.
theory x theory y
Work is inherently distasteful to most people.

Most people are not ambitious, have little desire for responsibility, and prefer to be directed.

Most people have little capacity for creativity in solving organizational problems.

Motivation occurs only at the physiological and safety levels.

Most people must be closely controlled and often coerced to achieve organizational objectives.

Work is as natural as play, if the conditions are favorable.

Self-control is often indispensable in achieving organizational goals.

The capacity for creativity in solving organizational problems is widely distributed in the population.

Motivation occurs at the social, esteem, and self-actualization levels, as well as physiological and security levels.

People can be self-directed and creative at work if properly motivated.

Theory X Theory Y
personnel human resource management
Personnel/Human Resource Management
  • Human Resource Management did not always receive the attention it deserved. An example is the Gordon and Howell’s 1959 assessment of personnel management.
  • John R. commons was the first to use the phrase “human resource.”
  • E. Wight Bakke appears to be the first person to cast personnel in a human resources framework.
personnel human resource management41
Personnel/Human Resource Management
  • Wendell French was the first to add human resources to a personnel management text.
  • The contributions of George Strauss, Leonard Sayles, and Thomas Kochan have enriched human resource management literature by noting it is complementary to industrial relations.
frederick herzberg 1923 2000
Frederick Herzberg (1923-2000)
  • His research emphasized job enrichment (depth) rather than job enlargement
    • Job context (hygiene factors) – needed to be optimal to prevent job dissatisfaction. These factors (according to Herzberg) did not motivate.
    • Job content (motivators) – factors that did lead to motivation
    • Money (according to Herzberg) could motivate if it was seen as a reward for accomplishment; but if money was given without regard for merit, then it was a hygiene factor.

Frederick Herzberg

motivation and hygiene factors
Motivation and Hygiene Factors






Recognition for Accomplishment

Challenging Work

Increased Responsibility

Growth and Development

Policies and Administration


Working Conditions

Interpersonal Relations

Money, Status, Security

motivation and hygiene factors44
Motivation and Hygiene Factors





























work design
Work Design
  • Richard Hackman, Edward Lawler, and Greg Oldham’s work extended Herzberg’s notions by adding a situational (it depends…) dimension
    • Key job characteristics
    • Depending on an individual’s “growth-need strength,” these characteristics could be amplified to make the job more meaningful.
motivation expectancy theory victor vroom
Motivation: Expectancy Theory Victor Vroom
  • The expectancy theory of Victor Vroom helps explain the choosing process among individuals in terms of the value (valence) of the reward and the expectancy of receiving the reward.

Victor Vroom

expectancy theory48
Expectancy Theory
  • Lyman Porter and Edward Lawler extended Vroom’s work with their model of expectancy.

Expectancy Theory

(Lyman W. Porter – Edward E. Lawler III)


Value of






























Revised Diagram of the Theoretical Model

SOURCE: Managerial Attitudes and Performance, 1968, Richard D. Irwin Inc.

equity theory
Equity Theory
  • Equity theory is not a new one but focuses on how individuals perceive their reward or pay compared to what others are receiving.
  • Issues of social justice and distributive justice are involved in the theories of Stacy Adams and Elliot Jaques.

Elliot Jacques

edwin locke goal setting theory
Edwin Locke – Goal Setting Theory
  • Over a 35 year period, research has demonstrated its practical and theoretical value.
  • Money is a motivator because of its “instrumentality” or as an economist would say, money is a medium of exchange for the things we want.
  • Goal setting theory is rooted in the work of Taylor, the Gilbreths, Drucker, Cecil Mace, and Thomas Ryan.
  • Individuals need specific rather than general goals.

Edwin Locke History of Management Thought by D. Wren

edwin locke goal setting theory52
Edwin Locke – Goal Setting Theory
  • The goals should be challenging but not exceed the person’s ability.
  • Performance feedback is essential.
  • Goal-setting by management works best when people are already internally motivated by a need to achieve.
  • Participative goal-setting works best for individuals with a lower need for achievement, and when they are familiar and at ease with participative management techniques.
  • Goal-setting is related to self-efficacy in terms of how goals are chosen and how results are fed back.
leadership rensis likert 1903 1981
LeadershipRensis Likert (1903-1981)
  • Leadership is a part of general management theory
  • Likert proposed four types of leadership termed System 1-4.

Rensis Likert

leadership rensis likert
LeadershipRensis Likert
  • The key to good leadership, according to Likert, is to move toward System 4 by:
    • The principle of supportive relationships
    • The use of group decision making and supervision. “Link pins” is important here.
    • Setting high performance goals
  • “System 5” was further developed by Jane Gibson Likert – influenced by Mary Parker Follett.
fred fiedler situational or contingent leadership theories
Fred Fiedler – Situational or Contingent Leadership Theories
  • Fiedler suggested that leadership style "depends" or is contingent upon certain leader orientations and situational characteristics
  • LPC scale to measure leadership style
  • Situational factors of:
    • Leader-member relation
    • Task structure
    • Position power, meaning formal authority

Fred Fielder

situational leadership57
Situational Leadership
  • Depending on the situation, high LPC or relationships-oriented leaders fared best in situations that were intermediate in favorableness.
  • Low LPC leaders tended to perform better in either very favorable or very unfavorable situations.

Fiedler Investigations of Leadership

Group Situation

Leadership Style

Correlating with









1 Good Structured Strong Directive

2 Good Structured Weak Directive

3 Good Unstructured Strong Directive

4 Good Unstructured Weak Permissive

5 Moderately poor Structured Strong Permissive

6 Moderately poor Structured Weak No data

7 Moderately poor Unstructured Strong No relationship found

8 Moderately poor Unstructured Weak Directive

leadership theories
Leadership Theories
  • Bob House and Gary Dessler’s “path-goal” theory focuses more on the role of the leader in identifying people’s needs and providing means for subordinates to satisfy those needs. The difference in this notion, contrasted with Fiedler, is that the same leader could be task or relationship oriented.
leadership theories61
Leadership Theories
  • Charisma re-emerges in modern theory.
  • Charismatic leaders may attract followers for evil ends (Hitler, Bin Laden, etc.)
  • Transformational leadership also reflects the trend toward personality traits of leaders.
  • Is charisma too unstable for organizational continuity, as Max Weber suggests?
leadership theories62
Leadership Theories
  • James McGregor Burns’ transactional and transformational leadership also reflects the trend toward personality traits of leaders.
  • George Graen and leader-member exchange theory has enriched our study of interpersonal relations.
  • Leader-member exchange theory furthers understanding of intra-organizational connections.
organizations and people
Organizations and People
  • Organizations as Open Systems
    • Chester Barnard’s idea of the organization as including investors, suppliers, etc. was an early example of viewing the organization as an open system.
    • Ludwig von Bertalanffy’s (1901-1972) system theory furthered the idea of organizations as open systems. He was a biologist.
organizations as open systems joan woodward
Organizations as Open Systems - Joan Woodward
  • Researched the impact of technology on organizational structure.
  • Classified organizations by the complexity of the technology used.

Joan Woodward

organizations as open systems
Organizations as Open Systems
  • The Aston Group also considered technology but arrived at different findings than Woodward.
  • Paul Lawrence and Jay Lorsch's viewed the impact of environmental factors on structure
    • Rate of change in environmental conditions
    • Certainty of information available
    • Time span of feedback of results from decisions.
behavioral theories of the firm
Behavioral Theories of the Firm
  • Emphasis on internal processes of coalitions, organizational learning, conflict resolution, and so forth was a new approach. Representatives of this approach are Richard Cyert & James March, Daniel Katz & Robert Kahn, and Karl Weick.
  • Another emphasis was on external forces and factors as primary shapers of the organization. Jeffrey Pfeffer & Gerald Salancik, Michael Hannan & John Freeman, and John Meyer & Richard Scott are cited as representatives.
the paradigm wars
The Paradigm Wars
  • “Paradigm,” a model, example, or pattern to help us view organizations.
  • Disagreements about the number of contemporary paradigms exist — some indicating this as a sign of progress and others seeing this as creating an organization theory jungle.
  • Miner’s analysis of 73 theories is important as he indicates no organization theory high in estimated scientific validity or usefulness in application.
strategy and structure
Strategy and Structure
  • Chandler’s study led to the idea that “structure follows strategy.”
  • Fayol saw the need for a “fit” between structure and the “objectives, resources, and requirements” of the firm.
  • In the 1960s and 1970s, economic and political factors influenced many mergers and acquisitions as firms diversified outside of their industry.
  • The influx of behavioral scientists into business schools brought different perspectives, research tools, and ideas.
  • Their impact was felt on organization design and job design.
  • Personnel management evolved into human resource management.
  • Organizational theory evolved from a number of factors, internal and external.
  • Better theory, it was suggested, can be built by examining successful practice.
chapter twenty one

Chapter Twenty One

Science and Systems in Management

science and systems in management
Science and Systems in Management
  • Operations Research – World War II
  • Ideas the U.S. took to Japan
  • Impact of Computers
quest for science in management
Quest for Science in Management
  • Scientific Method – roots in Aristotle, Descartes, Babbage, and scientific management
  • Operations research – developed in Great Britain during World War II by P.M.S. Blackett and others.
patrick maynard stuart blackett 1897 1974
Patrick Maynard Stuart Blackett (1897-1974)
  • Attempted to apply the scientific method and to quantify complex problems.
  • “Blackett’s Circus” was a team of specialists who could bring a variety of techniques to apply to problems.
  • Operations research applications after the war were primarily in the area of production management.

Patrick Blackett

frederick taylor revisited
Frederick Taylor Revisited
  • Used specialists in his metal-cutting experiments, suggesting numerous parallels between management science and scientific management.
  • “Optimal Decisions” – is this the “One Best Way?”
  • The search was for a use of science in management, not a science of management.

Frederick W. Taylor

production management in transition
Production Management in Transition
  • Gordon and Howell’s 1959 remark “Production management courses are often the repository for some of the most inappropriate and intellectually stultifying materials to be found in the business curriculum…”
  • Also, they recommended more mathematics for business school students.
  • Production management and operations research merged into into production/operations management.
gantt chart
Gantt Chart
  • The Gantt Chart concept was extended with newer variations for planning and controlling, PERT and CPM (Critical Planning Method)
  • PERT and CPM together plan a network of activities, their relationships, and their interaction along a path to a given completion point.
old lessons relearned
Old Lessons Relearned
  • Product quality was important historically – the hallmark concept allowed customers to connect quality with the maker of the firm (Carnegie).
  • Some maintained that the U.S. forgot how to complete which enabled the Japanese to use U.S. experts such as W. Edwards Deming, Joseph Juran, and others for statistical quality control.
  • Wickham Skinner – incorporating manufacturing into overall corporate strategy.
  • Richard Schonberger – integrating the firm around a “chain of customers.”
old lessons relearned80
Old Lessons Relearned
  • Statistical quality control was pioneered at Western Electric by Walter Shewhart (1891-1967).
  • Edwards Deming (1900-1993) revived Shewhart’s ideas and took them to Japan.

W. Edwards Deming

Courtesy of the University of Western Ontario

old lessons relearned81
Old Lessons Relearned
  • Joseph Juran (1904-) also influenced by Shewhart and Taylor.
  • Japanese developed quality circles.
  • Wickham Skinner – incorporating manufacturing into overall corporate strategy.
  • Richard Schonberger – integrating the firm around a “chain of customers.”
inventory management
Inventory Management
  • Materials Requirements Planning (MRP) developed.
  • Taiichi Ohno and “just-in-time” planning for materials delivery was influenced by earlier work at Ford Motor Company.
systems and information
Systems and Information
  • “Systems” – an ancient concept found new meaning in General Systems Theory (GST)
  • GST – a product of Ludwig von Bertalanffy, was a Gestalt concept. The GST view was:
    • Study of the whole organism
    • Organisms sought equilibrium
    • All systems were open

Ludwig von Bertalanffy

norbert weiner 1894 1964 cybernetics
Norbert Weiner (1894-1964)- Cybernetics
  • Developed cybernetics
  • Cybernetics fits into GST by providing feedback loops so systems could “learn.”
  • Example: consider a firm that scans its environment to sense changes that need to be incorporated into future plans (strategic planning).

Norbert Weiner

computer age to the information age death to the slide rule
Computer Age to the Information Age – Death to the Slide Rule

“The Faber-Castell 67/87 is a plastic 6-inch simplex pocket rule with the Reitz scale arrangement and extended, self-documenting scales. It's a nice little rule, and that's before you discover its secret: flip it over, and there's a 6-digit addiator on the back!”


computer age to the information age
Computer Age to the Information Age
  • Alan Turing - a specialized machine to break the German Code.
  • Herman Hollerith, founded the firm that became IBM; his punch cards were reminiscent of the Jacquard loom.
  • John Atanasoff – built an electronic digital computer for Iowa State University in the 1930’s; his ideas were plagiarized by Mauchly and Eckert.

John V. Atanasoff

Courtesy of Iowa State University

computer age to the information age87
Computer Age to the Information Age
  • Early computers were monsters, slow, expensive, and with limited applicability. This was the EDP stage of computer evolution.
  • Computer technology evolved rapidly from vacuum tubes to microcircuitry.



computer age to the information age88
Computer Age to the Information Age
  • JoAnne Yates noted that technological adoption, such as computers, comes not with the invention or advancement but when managers see an application for the new technology.
  • Computers have benefited production/operations management, such as Computer-Assisted-Design (CAD).
  • Management Information Systems replaced EDP for providing information to management enabling computer-assisted decision making technologies.

JoAnne Yates

Courtesy of Dr. Yates

  • The chapter traced the search for order through science and systems in management.
  • Operations research was viewed as a modern version of early scientific approaches to problem solving.
  • Others outstripped U.S. industrial productivity gains as they learned production lessons overlooked in the U.S.
  • The development of computers and microcircuitry led to new methods to assist managerial decision making.
chapter twenty two

Chapter Twenty-Two

Obligations and Opportunities

obligations and opportunities
Obligations and Opportunities
  • Individuals, Organizations, and Evolving Expectations
  • Management Opportunities in a Global Arena
individuals organizations and evolving expectations
Individuals, Organizations, and Evolving Expectations
  • Ethics
    • “The moral ‘oughts’ that sustain a civilized society.”
    • Business ethics is an ancient issue:
      • St. Thomas Aquinas – the “just price” as the market price without collusion, fraud, and coercion
      • Johannes Nider (from chapter 2) and the quest for ethical business practices in the early fifteenth century.
      • Joseph Wharton, founder of the first collegiate school of business, was very specific about ethics in the business school curriculum.
business ethics
Business Ethics
  • Johnson and Johnson’s credo is illustrative of both ethical and social responsibility issues (ex: Tylenol crisis).
  • Agency Theory – considered new, but an old issue relative to principal-agent relations. As the ownership of firms was separated from its management, there was heightened interest in this notion of agency.
  • John Shad – donation of $23 million to the Harvard Graduate School of Business to teach business ethics.
business society
Business & Society
  • Ethics – individual moral conduct
  • Social Responsibility – expectations by others about the conduct of the firm
  • Business leaders are long-standing patrons of the arts.
    • Example: Carnegie gave $480 million during his lifetime
  • The Federal Revenue Act of 1935 was a step toward corporate philanthropy—but it became law during an economic depression.
  • Morrell Heald’s quote about business people and philanthropy. Do your students agree with this point of view?
  • A. P. Smith Manufacturing Company vs. Barlow established the precedent for modern corporate philanthropy
business society95
Business & Society
  • Donna Wood’s findings concerning the Meat Inspection Act (1906) and the Pure Food and Drug Act (1906) show the positive role of business leaders.
  • Howard Bowen provided one definition of social responsibility and observed that business firms alone could not solve the problems of economic life.
business society96
Business & Society
  • Keith Davis suggests an interesting maxim: “If you mess it up, you clean it up.”
  • “Stakeholder” – a term that has come into use to describe those others who are affected by business decisions (originated by the Stanford Research Institute)
  • Ansoff’s distinction between “objectives” and “responsibilities” – secondary responsibilities cannot be met unless economic objectives had been achieved. (Ideas taken from Peter Drucker).
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Business & Society
  • Archie Carroll’s categories of responsibilities:
    • Economic - primary
    • Legal – regulations & rules
    • Ethical – expectations of how the firm should conduct its business
    • Discretionary – voluntary choices.

Archie Carroll

Courtesy of Professor Carroll

business society archie carroll
Business & Society –Archie Carroll
  • Dr. Carroll, attended Dan Wren’s first doctoral course on management history; Notes from that class became the foundation of his own management history course at the University of Georgia. Dr. Wren would use the notes as a foundation for the first edition of his book.

Archie Carroll

Courtesy of Professor Carroll

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Business & Society –Archie Carroll
  • Archie Carroll was a student in Dan Wren’s first doctoral course on management history at Florida State University.
  • Notes from that first course became the foundation of Dr. Carroll’s own management history course at the University of Georgia.
  • The notes from that course would also be the foundation for Dr. Wren’s first edition of this book.

Dr. Daniel A. Wren

management opportunities in a global arena
Management Opportunities in a Global Arena
  • Trade – political strategy
    • Example: policy of mercantilism
  • Adam Smith advocated a market economy to replace mercantilism and the wars fostered those policies.
  • David Ricardo (an early 19th century economist and advocate of free trade with each nation) – finding its comparative advantage.

David Ricardo

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Management Opportunities in a Global Arena
  • Advances in transportation and communication technology enabled a new era for multinational business.
  • The U.S. was an importer of capital until about 1914, i.e., the U.S. was a debtor nation.
  • The tire and rubber industry is presented as one example of the disappearance of U.S. firms in the global market. Are there other industries? Where does the U.S. have comparative advantage?
managing across cultures
Managing Across Cultures
  • “Culture” is hard to define but is used here as a set of beliefs held in common by a group of people about economic, social, and political behavior.
  • Bernard Bass noted differences between cultures in the leadership literature in Bass and Stogdill’s Handbook of Leadership
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Managing Across Cultures
  • Bill England and his colleagues focused on differences in the meaning of working.
  • The “centrality of work” notion affects how leaders would motivate in different countries.
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Managing Across Cultures
  • Geert Hofstede (1928 - ) describes cultural differences in different countries.
    • Individualism vs. collectivism (group orientation);
    • Power Distance: The level of preference for equality or inequality within groups:
    • Uncertainty avoidance: The preference for risk vs. structure.
    • Masculinity (assertiveness) vs. femininity (tender values).
    • Long term vs. Short term orientation.

Geert Hofstede

Courtesy of Prof. Hofstede

last thoughts from peter drucker
Last Thoughts ……from Peter Drucker
  • “I would hope that American managers—indeed, managers worldwide—continue to appreciate what I have been saying almost since day one: that management is so much more than exercising rank and privilege; it’s so much more than ‘making deals.’ Management affects people and their lives, both in business and in many other aspects as well. The practice of management deservers our utmost attention; it deserves to be studied” (Drucker, 1995, p. 351-352).
  • Ethics, codes of moral conduct, have long been a concern of history, but people still struggle to make the right decisions.
  • Managers’ responsibilities are more complex with the introduction of stakeholders.
  • Advancements in transportation and communication have made the world a closer place.
  • Stereotypes of individuals and nations must be avoided.
internet resources
Internet Resources
  • Academy of Management – Management History Division Website
  • List of Internet Resources compiled by Charles Booth
  • Western Libraries Business Library – Biographies of Gurus

  • Henry Mintzberg

  • Thought Leaders Forum – Mintzberg

  • Rensis Likert
  • David C. McClelland
  • Peter Drucker Interview
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Internet Resources
  • Drucker - Leader to Leader Institute
  • Ludwig von Bertalanffy (1901--1972)

  • Chris Argyris
  • Douglas McGregor
  • Frederick Herzberg
  • Victor Vroom
  • Edwin A. Locke
  • Fred Fiedler
  • Joan Woodward
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Internet Resources
  • Joan Woodward
  • P.M.S. Blackett
  • Deming Institute

  • Ludwig von Bertalanffy
  • Norbert Wiener
  • What are Cybernetics?
  • Death of the Slide Rule
  • John Vincent Atanasoff
  • David Ricardo
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Internet Resources
  • Geert Hofstede

  • Managing Oneself by Peter F. Drucker
  • Ansoff Matrix