Management Evolution & the Role of Complexity and Chaos Theory

1. Management Evolution and the role of Complexity and Chaos Theory in ‘emergence’ Michael Duignan

2. Personal info • BA, MAIB from Anglia Ruskin • MBA from Hanze University in Netherlands • Ongoing researcher of Management Practice and Complexity/Chaos Theory in OD

3. Learning Outcomes • Why study the development of management? • Identify the main pre-20th Century guru’s/contributors to management • Evolving management paradigms (1900’s – today) Scientific  behavioural  complexity

4. Learning Outcomes (cont’d) • Discuss the need for greater innovation and pro-activity in today’s business environment • The role complexity can play in management and 21st Century innovation • Complexity Concept into a Practical Context

5. Why study the development of management? Management is changing at the speedof sound • Business Environments are more dynamic and unpredictable • More competition • More products and services • Increased consumer complexities • Market conditions used to be consistent and predictable • Management decisions made 100 years ago would remain valid for many years.

6. Pre-19th Century Management • Management can be identified as old as society itself • ‘Governance’ and ‘rule’ can been seen from ancient tribes & the portrayed kingdoms we see in modern day films. • Pyramids and canals ‘administered’ and ‘managed’ through powerful authorities. • The rise of the Roman Empire, hierarchy established principles for the management of modern constitutional governments. • The ‘first modern man’ of Niccolòdi Bernardo dei Machiavelli’s at the turn of the 16th Century – First to highlight the concept of Machiavellianism touching upon a ‘cognitive side’ to management.

7. Mid-Late 1800’s – BANG! **** ‘INDUSTRIAL REVOLUTION’! **** - Machines replacing humans • The creation of financial markets • Our environment was made more complex practically overnight!!

8. Starting off - Adam Smith (1723-1790)the ‘father’ of modern economics Prof of Economics and a significant contributor of the ‘Scottish Enlightenment’ Coined the term: The Division of Labour - the breakdown of jobs into narrow repetitive task First efforts to produce EFFICIENCY…!

9. Frederick W Taylor (1856 – 1915)The ‘father’ of scientific management’ US born Mechanical Engineer 1878-1889 - employed at ‘Midvale Steel’ where he developed ‘Scientific Management’ * Time and Motion study’ / “Ones best way” *

10. CRITICISMS Fantastic in times of Industrial Revolution but can such linear approaches to efficiency be applicable to today's business environments and organisations? **Only in mundane production processes and standardised tasks!** Frederick W Taylor (1856 – 1915)The ‘father’ of scientific management’

11. Hawthorne Studies (1927-1932) Radical transformation of management paradigm Conducted by Aussie born Elton Mayo (1980-1949) at the ‘Western Electric Company’ - Initially looked at the effects of light on worker productivity – BUT…

12. Hawthorne Studies (1927-1932) – Cont’d …stumbled across the power of: ‘psychological’ & ‘behavioural’ elements Changing from the dominant view thatemployees were no different than machines

13. Hawthorne Studies (1927-1932) – Cont’d But…WHY? "Employees are more productive because the employees know they are being studied.“ - Elton Mayo, June 4, 1931 Mayo's experiments showed an increase in worker productivity that was produced by the psychological stimulus of being singled out, involved, and made to feel important This was the first development of behavioural management

14. Hawthorne and Hertzberg • ‘Frederick Hertzberg’ the founder of ‘hygiene factors and motivators’ recognised recognition as one of his key motivators within the workplace. • McGregor Theory Y and X managers • Maslow’s Hierarchy of needs

15. Peter Drucker The pioneer of Management Theory in the 20th Century. He practically invented management as a discipline for all organizations

16. Mintzberg

17. Innovating in today’s business environment • the need for greater innovation and pro-activity in today’s business environment • Added complexity and external pressures • Increased focus on ‘softer’ relationship issues i.e. trust and emotional intelligence already discussed by Steve

18. What is complexity? • Reductionism Vs Complexity Science • Newtonian Concept – Gravity - The falling of an apple • Linear Cause and Effect Relationship • But what if the wind catches it and takes it off course!? • Chaos Theory – Small things have big effects • Butterfly Effect – Changing the course of a tornado

22. The power of emergence • Bounded by simple rules - Jazz Metaphor • Business Context -

23. Structure needed for emergence • Decentralised – Emergence comes from the bottom up • Managers must be willing to steer the business onto the right path not pick it up • A diverse workforce, for a character based organisation • In-formal workshops/discussions

24. ‘Skunkworks’ and Intrapreneurs

25. Role of the ‘hybrid’ organisation • Skunkworks and • Intrapreneurs in creativity and innovation

26. Recommended Reads… - Niccolò di Bernardo dei Machiavelli’s – ‘The Prince’ • Peter Drucker – ‘Management Practice’ • Mintzberg - ‘Strategy Safari’ • Ralph Stacey – ‘Complexity and Creativity’ …and Google all the terms presented today