MGT/521 (Management Course) Viewpoints Paper – Week 1

Select one of the viewpoints mentioned in Chapter 2 of the text. Write a 350- to 700-word paper summarizing the basics of that viewpoint including highlighting at least one of the key figures related to that viewpoint. Click the Assignment Files tab to submit your assignment.

Page 40 Major Questions You Should Be Able to Answer 2.1 Evolving Viewpoints: How We Got to Today’s Management Outlook Major Question: What’s the payoff in studying different 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 Viewpoints: 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 Viewpoint Major Question: How can the exceptional manager be helped by the systems viewpoint? 2.6 Contingency Viewpoint Major Question: In the end, is there one best way to manage in all situations? 2.7 Quality­Management Viewpoint Major Question: Can the quality­management viewpoint offer guidelines for true managerial success? Page 41 2.8 The Learning Organization in an Era of Accelerated Change Major Question: Organizations must learn or perish. How do I build a learning organization? the manager’s toolbox Mind­sets: How Do You Go about Learning? Learn or die. Isn’t that the challenge to us as individuals? Throughout your career, your success will depend on your constantly being a learner, making choices about how to solve various problems—which tools to apply, including the theories we will describe in this chapter. However, one barrier to learning that all of us need to be aware of is our mind­set. The Enemy of Learning By the time we are grown, the minds of many of us have become set in patterns of thinking, the result of our personal experiences and various environments, that affect how we respond to new ideas. These mind­sets determine what ideas we think are important and what ideas we ignore. Because we can’t pay attention to all the events that occur around us, say the authors of a book on critical analysis, “our minds filter out some observations and facts and let others through to our conscious awareness.” 1 Herein lies the danger: “As a result, we see and hear what we subconsciously want to and pay little attention to facts or observations that have already been rejected as unimportant.” Having mind­sets makes life comfortable. However, as the foregoing writers point out, “Familiar relationships and events become so commonplace that we expect them to continue forever. Then we find ourselves completely unprepared to accept changes that are necessary even when they stare us in the face.” 2 What’s Your Mind­set? Two Views What will be your approach to studying management theory (or anything else in this book)? If you can’t “get it” right away, will you take that as a reflection on your basic intelligence—that you’re somehow deficient, that people will think you’re dumb and you’ll feel like a loser? Based on 20 years of research, Stanford psychology professor Carol Dweck suggests that the view you adopt about yourself profoundly af ects the way you lead your life—including how you learn. In our views of ourselves, she says, most of us have either a fixed mind­set or a growth mind­set. 3 • The fixed mind­set—believing your basic qualities are carved in stone. People with a fixed mind­set are concerned about how they will be judged, as on intelligence or personal qualities. They believe “My intelligence is something very basic that can’t be changed very much.” Or, “I’m a certain kind of person, and there’s not much that can be done to change that.” They care less about learning than looking bad when failure occurs. • The growth mind­set—believing your basic qualities can be changed through your effort. People with a growth mind­set are concerned with improving. They think, “You can always change your intelligence quite a bit.” Or, “You can always change basic things about the kind of person you are.” Failure for these kinds of people may well feel bad, but instead of hiding their deficiencies from others they try to overcome them. Fortunately, by applying themselves, people of a fixed mind­set can develop a growth mind­set. For Discussion Your approach to learning won’t stop once you leave school. As we discuss at the end of this chapter, most organizations now are “learning organizations,” in which employees are continually required to expand their ability to achieve results by obtaining the right knowledge and changing their behavior. Thus, Page 42 your mind­set matters. Which type are you? What can a person begin to do to move from a fixed mind­set to a growth mind­set? This chapter gives you a short overview of the three principal historical perspectives or viewpoints on management —classical, behavioral, and quantitative. It then describes the three principal contemporary viewpoints—systems, contingency, and quality­management. Finally, we consider the concept of learning organizations. Evolving Viewpoints: How We Got to Today’s Management Outlook What’s the payoff in studying different management perspectives, both yesterday’s and today’s? THE BIG PICTURE After studying theory, managers may learn the value of bringing rationality to the decisionmaking process. This chapter describes two principal theoretical perspectives—the historical and the contemporary. Studying 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. Creating Modern Management: The Handbook of Peter Drucker Who is Peter Drucker? “He was the creator and inventor of modern management,” says management guru Tom Peters (author of In Search 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 introduced 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 impossible to imagine the rise of dispersed, globe­spanning corporations.” 5 In our time, Drucker’s rational EXAMPLE Page 43 approach has culminated in evidence­based management, as we describe in Section 2.6 in this chapter. True learner. In his 70­year career, Peter Drucker published over 35 books and numerous other publications, received the Presidential Medal of Freedom, and achieved near rock­star status for his management ideas, which influenced organizations from General Electric to the Girl Scouts. A true learner who constantly expanded his knowledge, he understood that new experiences are key to nurturing new ideas and new ventures. Do you have this kind of curiosity? Six Practical Reasons for Studying This Chapter “Theory,” say business professors Clayto
n Christensen and Michael Raynor, “often 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 practical than studying different approaches to see which work best? Indeed, there are six good reasons for studying theoretical perspectives: 1. Understanding of the present. “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 organization that could affect it or you. 6. Producing positive results. 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 from a Game Company’s Employee Guide In Flatness Lies Greatness: 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, YouTube, and other online communities? 9 Could the Page 44 traditional hierarchy of boxes with lines actually become a corporate straitjacket? Is Hierarchy Overrated? Bellevue, Washington–based Valve Corp. is an online entertainment and technology company that has created several award­winning games (Half Life, Portal) as well as Steam, an online gaming platform. Its staff consists 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 employee handbook, “and nobody ‘reports to’ anybody else.” 10 In other words, Valve is a flat organization, defined as one with few or no levels of management (as we discuss further in Chapter 8). Indeed, Valve is the flattest of flat organizations because for an employee, says the handbook, it “removes 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 green­light (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 account. “The other is literal—team members often move their desks close together when working on a project.” 11 Instead of managers, Valve relies on rotating team leaders (called “group contributors”), who change according to each project. YOUR CALL 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 organizations, profit and not­for­profit alike, that operate in a rapidly changing environment, depend on innovation to stay on top, and have a shared purpose. 12 Flattened hierarchies even work for some large organizations, such as W.L. Gore, maker of Gore­Tex fabric, which employs 10,000 people. Why do you think, then, that many organizations resist using flat structures? Do you think studying management theory could help you answer this question? Theory underlies all the achievements of business. Some of the greatest companies in the world are headquartered in these New York City skyscrapers: American Express, Colgate­Palmolive, J.P. Morgan Chase, JetBlue Airways, Macy’s, NBC Universal, Ralph Lauren, and Time Warner. A number of start­ups are also based in New York: Etsy, Fab, Foursquare, Gilt, Meetup, Shutterstock, and Tumblr. The launch, growth, and profitability of businesses all depend on execution of solid management theory. Page 45 Two Overarching Perspectives about Management: Historical & Contemporary In this chapter, we describe two overarching perspectives about management. (See Figure 2.1.) They are: The historical perspective (1911–1950s) includes three viewpoints—classical, behavioral, and quantitative. The contemporary perspective (1960s–present) also includes three viewpoints—systems, contingency, and quality­management. FIGURE 2.1 The Two Overarching Perspectives—Historical and Contemporary Classical Viewpoint: Scientific & Administrative Management If the name of the game is to manage work more efficiently, what can the classical viewpoint teach me? THE BIG PICTURE The three 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 made­up word you won’t find in most dictionaries, therblig was coined by Frank 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 husband­and­wife team of industrial engineers who were pioneers in one of the classical Page 46 approaches to management, part of the historical perspective (1911–1950s). As we mentioned, there are three historical management viewpoints or approaches. 13 (See Figure 2.2, next page.) They are Classical viewpoint—1911–1947 Behavioral viewpoint—1913–1950s Quantitative viewpoint—1940s–1950s 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. Scientific Management: Pioneered by Taylor & the Gilbreths The problem 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 hard­pressed to raise the productivity of workers. Scientific management emphasized the scientific study of work methods to improve the productivity of individual workers. Two of its chief proponents were Frederick W. Taylor and the team of Frank and Lillian Gilbreth. Frederick Taylor & the Four Principles of Scientific Management 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 Philadelphia
who believed that managers could eliminate soldiering by applying four principles of science: FIGURE 2.2 The Historical Perspective: Three Viewpoints—Classical, Behavioral, and Quantitative 1. Evaluate a task by scientifically studying each part of the task (not use old rule­of­thumb 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. Taylor 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 bestperforming coworkers. In addition, he suggested employers institute a dif erential rate system, in which more efficient workers earned higher wages. Page 47 Frederick W. Taylor. Called the father of scientific management, Taylor published The Principles of Scientific Management in 1911. Why Taylor Is Important: Although “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 to quarrel over them. If used correctly, the principles of scientific management can enhance productivity, and such innovations as motion studies and differential pay are still used today. Lillian and Frank Gilbreth with 11 of their dozen children. As industrial engineers, the Gilbreths pioneered time and motion studies. If you’re an athlete, you can appreciate how small changes can make you more efficient. Frank & Lillian Gilbreth & Industrial Engineering As mentioned, Frank and Lillian Gilbreth were a husband­and­wife team of industrial 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 movies, and a TV sitcom, Cheaper by the Dozen. The Gilbreths expanded on Taylor’s motion 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. Administrative Management: Pioneered by Fayol & Weber 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 Weber. Henri Fayol & the Functions of Management Fayol was not the first to investigate management behavior, but he was the first to systematize it. A French engineer and industrialist, he became known to American business when his most important work, General and Industrial 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 Max Weber & the Rationality of Bureaucracy In 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 bureaucracy was a rational, efficient, ideal organization based on principles Page 48 Page 49 of logic. After all, in Weber’s Germany in the late 19th century, many people were in positions of authority (particularly in the government) not because of their abilities but because of their social status. The result, Weber wrote, was that they didn’t perform effectively. A better­performing organization, he felt, should have five positive bureaucratic features: 1. A well­defined 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 Weber Is Important: Weber’s work was not translated into English until 1947, but it came to have an important influence on the structure of large corporations, such as the Coca­Cola Company. The Problem with the Classical Viewpoint: Too Mechanistic A flaw in the classical 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 amenable 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. Scientific management. Carmakers have broken down automobile manufacturing into its constituent tasks, as shown here for an assembly plant. This reflects the contributions of the school of scientific management. Is there anything wrong with this approach? How could it be improved? Behavioral Viewpoint: Behaviorism, Human Page 50 Relations, & Behavioral Science To understand how people are motivated to achieve, what can I learn from the behavioral viewpoint? THE BIG PICTURE 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 Munsterberg, 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 relied on scientific research for developing theories about behavior useful to managers. The behavioral viewpoint emphasized 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 Behaviorism: Pioneered by Munsterberg, Follett, & Mayo The three people who pioneered behavioral theory were Hugo Munsterberg, Mary Parker Follett, and Elton Mayo. Hugo Munsterberg & the First Application of Psychology to Industry Called “the father of industrial psychology,” German­born Hugo Munsterberg had a PhD in psychology and a medical degree and joined the faculty at Harvard University in 1892. Munsterberg suggested 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 Munsterberg 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 Parker Follett & Power Sharing among Employees & Managers 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. 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 differences 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: With these and other ideas, Follett anticipated some of today’s concepts of “selfmanaged teams,” “worker empowerment,” and “interdepartmental teams”—that is, members of different departments working together on joint projects. Page 51 Elton Mayo & the Supposed “Hawthorne Effect” 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 associates at Western Electric’s Hawthorne (Chicago) plant, what came to be called the Hawthorne studies began with an investigation into whether workplace lighting level affected 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. Worker performance varied but tended to increase over time, leading Mayo and his colleagues to hypothesize what came to be known as the Hawthorne ef ect—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 follow­through, that were overlooked by the original researchers. Critics also point out that it’s doubtful that workers 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 Important: 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 so­called human relations movement in the 1950s and 1960s. Elton Mayo. In the 1920s, Elton Mayo (shown with long cigarette holder) and his team conducted studies of Western Electric’s Hawthorne plant. Do you think you’d perform better in a robotlike job if you thought your supervisor cared about you and paid more attention to you? The Human Relations Movement: Pioneered by Maslow & McGregor The two theorists who contributed most to the human relations movement —which proposed that better human relations could increase worker productivity—were Abraham Maslow and Douglas McGregor. Abraham Maslow & the Hierarchy of Needs What motivates you to perform: Food? Security? Love? Recognition? Self­fulfillment? Probably all of these, Abraham Maslow would say, although some needs must be satisfied before others. The chairman of the psychology department at Brandeis University and one of the earliest researchers to study motivation, in 1943 Maslow proposed his famous hierarchy of human needs: physiological, safety, love, esteem, and self­actualization. 16 We discuss this hierarchy in detail in Chapter 12, where we explain why Maslow is important. Douglas McGregor & Theory X versus Theory 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 Page 52 EXAMPLE 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 pessimistic, 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, self­direction, and self­control 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 McGregor’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 11. 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 self­assessment. SELF­ASSESSMENT 2.1 What Is Your Orientation toward Theory X/Theory Y? This self­assessment is designed to reveal your orientation as a manager—whether it tends toward Theory X or Theory Y. Go to connect.mheducation.com and take the self­assessment. When you’re done, answer the following questions: 1. To what extent do you think your results are an accurate reflection of your beliefs about others? Are you surprised by the results? 2. As a leader of a student or work­related project team, how might your results affect your approach toward leading others? Explain. 3. If an employee doesn’t seem to show ambition, can that be changed? Discuss. The Behavioral Science Approach 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 relies on scientific research for developing 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. Application of Behavioral Science Approach: The Open­Plan Office—Productivity Enhancer or Productivity Killer? Today some office layouts mix managers 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 face­to­face chats and e­mails) 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, face­to­face interruptions constitute one­third more intrusions than do e­mail or phone calls. 19 So how are conscientious workers in open­plan offices to get anything done—to avoid “pesky, productivity­sapping interruptions,” in one writer’s phrase? 20 “This Means I’m Busy!” Various workers have come up with their own ways of alerting others that they are not to be interrupted. Some wear special bright­colored sashes or vests or hats. Some block off their work spaces with neon­yellow plastic DO NOT DISTURB barricade tape (from CubeGuard). Some retreat to designated closed offices as “no interruption” zones to get necessary work done. The Right Seating Mix. Another wa
y to reduce disruption is for companies to assign who sits next to whom, rather than using unassigned seating. In open­plan 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 distance, may resent the intrusions of extroverts, those outgoing coworkers who need interaction and love to talk and talk. 22 Paul English, co­founder of the travel web­site Kayak.com, uses new hires as an excuse to alter existing open­office seating arrangements, 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. YOUR CALL 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? Open­plan seating. What kind of office would you prefer to have for yourself—a private office, a shared private office, a partitioned cubicle, or a desk in an open office scattered with other desks with no partitions? Which would be Page 53 most comfortable for you personally? Why, theoretically, would the open office best promote superior performance? Quantitative Viewpoints: Management Science & Operations Management If the manager’s job is to solve problems, how might the two quantitative approaches help? THE BIG PICTURE The third and last category under historical perspectives consists of quantitative viewpoints, which emphasize the application to management 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 overwhelming might of the German military machine. How did they do it? Military planners drew on mathematics and statistics to determine how to most effectively allocate use of their limited aircraft. When the Americans entered the war in 1941, they used the British model to form operations research (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 and introduced similar statistical techniques and cost­benefit 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. Two branches of quantitative management are management science and operations management. Management Science: Using Mathematics to Solve Management Problems 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 mathematics to aid in problem solving and decision making. Sometimes management science is called operations research. Why Management Science Is Important: Management science stresses the use of rational, science­based 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. Page 54 EXAMPLE FedEx. What management tools do you use to schedule employees and aircraft to deal with wide variations in package volume—such as December 23 versus December 26? Management Science: “Find Me More Music I Like!” “Once, all you needed 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 Tim Westergren studied music composition and computer science in college, played in unsuccessful rock bands, and worked as a film­score composer. Then he thought to try to map song musical qualities in what he called the Music Genome Project, which he described as “an enormous collection of songs that have been analyzed, one song at a time, using 400 unique qualities.” 25 In 2005 the genome became the basis for Oakland, California–based Pandora Internet Radio, which essentially 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 YOUR CALL Today there are many companies that have computer “recommendation engines” to suggest new products keyed to a consumer’s individual tastes, such as Spotify, Warner 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 Do you think reliance on the automated recommendation process cheats consumers out of “pleasant surprises” and new discoveries? Operations Management: Being More Effective Operations management focuses on managing the production and delivery of an organization’s products or services more effectively. Operations management is concerned with work scheduling, production planning, facilities location and design, and optimum inventory levels. Why Operations Management Is Important: Through the rational management of resources and distribution of goods and services, operations management helps ensure that business operations are efficient and effective. EXAMPLE Page 55 Operations Management: Using “the Toyota Way” to Benefit Hospital Patients Over the years, Toyota Motor Corp. has developed a variety of production techniques that drew in part on operations management. 28 Together 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 identifying the many steps in a production process and eliminating unnecessary ones (called value­stream mapping). It also uses teamwork to examine problems and fix them as soon as they appear (mistake proofing). In addition, the carmaker uses the just­in­time approach 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 growing number of U.S. hospitals have been forced to compete harder under the federal Affordable Care Act a
s formerly uninsured patients have begun to understand they do not necessarily have to go to their closest public safety­net 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 employees meets for a week­long hands­on 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 staff 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. YOUR CALL In Chapter 1, we described the problem of “efficiency versus effectiveness.” Which is the focus of lean management? Systems Viewpoint How can the exceptional manager be helped by the systems viewpoint? THE BIG PICTURE Three contemporary management perspectives are (1) the systems, (2) the contingency, and (3) the quality­management viewpoints. The systems viewpoint sees organizations as a system, either open or closed, with inputs, outputs, transformation processes, and feedback. 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. The contingency viewpoint emphasizes that a manager’s approach should vary according to the individual and environmental situation. It is a forerunner to evidence­based management. The quality­management viewpoint has two traditional approaches: quality control, the strategy for minimizing errors by managing each stage of production, and quality assurance, which focuses on the performance of workers, urging employees to strive for zero defects. A third quality approach is the movement of total quality Page 56 management (TQM), a comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction. Being of a presumably 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 differences 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 Quality­management FIGURE 2.3 The Contemporary Perspective: Three Viewpoints—Systems, Contingency, and Quality­Management In this section, we discuss the systems viewpoint. The Systems Viewpoint 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 interrelated parts that operate together to achieve a common purpose. Even though a system 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 regards the organization as a system of interrelated 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 Four Parts of a System The vocabulary of the systems perspective is useful because it gives you a way of understanding many different kinds of organizations. The four parts of a system are defined as follows: Page 57 1. Inputs are the people, money, information, equipment, and materials required to produce an organization’s goods or services. Whatever goes into a system is an input. 2. Transformational processes are the organization’s capabilities in management, internal processes, and technology that are applied to converting inputs into outputs. The main activity of the organization is to transform inputs into outputs. 3. Outputs are the products, services, profits, 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 reaction 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.) FIGURE 2.4 The Four Parts of a System Open & Closed Systems Nearly all organizations are, at least to some degree, open systems rather than closed systems. An open system continually interacts with its environment. A closed system has little interaction with its environment; that is, it receives very 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. Complexity Theory: The Ultimate Open System 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. 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 Viewpoint—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. EXAMPLE Closed versus Open Systems: Penney’s versus Macy’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 rock­bottom prices to attract penny­pinching customers, reports The New York Times, or offering high­end products to attract the rich. 31 With increased online purchases and declining walk­in foot traffic, even shopping malls face extinction, and chains such as RadioShack and Staples are closing 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 well­regarded executive at Target and then had a meteoric rise as the developer of Apple’s sleek, hands­on retail stores. In 2011, he was hired as CEO to revive J.C. Penney, a tired, low­end 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 name­brand clothes (Izod, Liz Claiborne) highlighted in store­within­a­store boutiques. Although most retailers regular
ly try out new ideas in a limited way before committing them to all their stores, Johnson preferred to go with his gut, adhering to a closed system. That is, Johnson took the Apple approach, whose then­leader 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 Research & “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 11% during 2013. 34 What is its secret? 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 particular 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 To compete 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 found 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 customer experience by being able “to differentiate the in­store experience through their personalities and service, while still delivering the basics of price, assortment, and convenience that customers get through online shopping.” 36 The store’s integrated inventory system also enables salespeople to find instock products and ship them directly to the customer. YOUR CALL “Sometimes you have to destroy your business in order to save it,” says financial writer James Surowiecki.” 37 Besides the retrenching of RadioShack 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? Page 58 EXAMPLE Contingency Viewpoint In the end, is there one best way to manage in all situations? THE BIG PICTURE 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 onebest­way rule. The contingency viewpoint emphasizes that a manager’s approach should vary according to—that is, be contingent on—the individual and the environmental 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?” The Contingency Viewpoint: What Are the Best Kinds of Benefits? 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 down­payment assistance. 38 Small Incentives. Small businesses may not be able to dangle big raises, but they can offer imaginative benefits that big organizations may find too expensive or impractical. “Free Beer Friday” is the morale booster offered by news­media 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 twice­a­week yoga instruction. Next­StepU.com, a teen­counseling company in Rochester, New York, offers a paid week off to volunteer for good causes. Various companies offer other options: at­yourdesk meditation, drop­off 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 highperformance 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 YOUR CALL One career analyst suggests that people are motivated most by autonomy, developing 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 Page 59 the office environment, 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 work­at­home employees? Contingency approach. Giving employees more money is not the only way to motivate them to be more productive. Sometimes small rewards, such as allowing pets at work, are equally effective. What incentives would make you stay at a job for which you are not really suited and to do your best while there? Gary Hamel: Management Ideas Are Not Fixed, They’re a Process Discussion of the contingency viewpoint leads us naturally to the thoughts of Gary Hamel, co­founder of the Management Innovation Lab and ranked by The Wall Street Journal 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 forward­looking managers get the ball rolling in management innovation, particularly in a traditional, conventional company? Hamel believes that the answer can be found by identifying core beliefs that people have about the organization, especially 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 interests of its adherents? Are there people who draw reassurance or comfort from this belief? 4. Have our choices and assumptions conspired to make this belief self­fulfilling? Is this belief true simply because we have made it true—and, if so, can we imagine alternatives? 46 Why the Contingency Viewpoint Is Important: The contingency viewpoint would seem to be the most practical of the viewpoints discussed so far because it addresses problems on a case­by­case basis and varies the solution accordingly. PRACTICAL ACTION Page 60 Evidence­Based Management: Facing Hard Facts, Rejecting Nonsense Evidence­based management is very much in the spirit of the contingency viewpoint’s practical approach to management. Evidence­based management means translating principles based on best evidence into organizational practice, bringing rationality to the decision­making process. As its two principal proponents, Stanford business scholars Jeffrey Pfeffer and Robert Sutton, put it, evidence­based management is based on the belief that “facing the hard facts about what works and what doesn’t, understanding the dangerous half­truths 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. We will consider evidence­based management further, along with analytics and Big Data, in Chapter 7. Evidence­Based Management: An Attitude of Wisdom “These days, there aren’t any hot, new trends, just a lot of repackaged ones from the past,” writes Wall Street Journal columnist 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 one­stop, fix­it­all answer to their various problems.” How will you know whether the next “fix­it­all” 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. Lots 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 seat­of­the­pants, make­itup­as­you­go­along kind of way—which can lead to big mistakes—management can be approached deliberately, rationally, 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) You test the prediction under systematic conditions. Following the Evidence. The process of scientific reasoning underlies what is known as evidence­based management. As we stated, evidence­based management means translating principles based on best evidence into organizational practice, bringing rationality to the decision­making process. 50 Evidencebased management derives from evidence­based medicine, embracing what Jeffrey Pfeffer and Robert Sutton call an attitude of wisdom. This is a mind­set 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 information 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 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 effects you’re having and what things are working.” 52 Page 61 Three Truths. Evidence­based management is based on three truths: • There are few really new ideas: Most supposedly new ideas are old, wrong, or both. • True is better than new: Effective organizations 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.” YOUR CALL Do you think managers 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 evidencebased approach to the ideas we discussed in this chapter? Quality­Management Viewpoint Can the quality­management viewpoint offer guidelines for true managerial success? THE BIG PICTURE The quality­management viewpoint, the third category under contemporary perspectives, consists of quality control, quality assurance, and especially the movement of total quality management (TQM), dedicated to continuous quality improvement, training, and customer satisfaction. In 1971, in his book Wheels, author 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 absenteeism and hangovers were highest among dissatisfied autoworkers. Although cars are not built all in one day (various parts are built at different 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 fuel­efficient, better­built 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 Mercedes­Benz E350, according to one automotive review. 53 Although not a “theory” as such, the quality­management viewpoint , which includes quality control, quality assurance, and total quality management, deserves to be considered because of its impact on contemporary management perspectives. Quality Control & Quality Assurance Quality refers to the total ability of a product 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. Two traditional strategies for ensuring quality are quality control and quality assurance. Quality Control Quality control is defined as the strategy for minimizing errors by managing each stage of production. Quality 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. Page 62 Quality Assurance Dev
eloped in the 1960s, quality assurance focuses on the performance of workers, urging employees to strive for “zero defects.” Quality assurance has been less successful because often employees have no control over the design of the work process. Total Quality Management: Creating an Organization Dedicated to Continuous Improvement 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. Edwards Deming Desperate to rebuild its war­devastated 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 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. Joseph M. Juran Another pioneer with Deming in Japan’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 efforts, Juran suggested, was to concentrate on the real needs of customers. TQM pioneer. W. Edwards Deming in 1961. Deming proposed his so­called 85–15 rule—namely, when things go wrong, there is an 85% chance that the system is at fault, only a 15% chance that the individual worker is at fault. Most of the time, he thought, managers erroneously blamed individuals rather than the system. TQM: What It Is 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 comprehensive approach—led by top management 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 improvement a priority. TQM companies are never satisfied. They make small, incremental improvements an everyday priority in all areas of the organization. By improving everything a little bit of the time all the time, the company can achieve long­term 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 Page 63 trained and empowered to find and solve problems. 3. Listen to and learn from 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 problems. 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 Total 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 services to customers. The adoption of TQM helped American companies deal with global competition. 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 self­assessment, may not measure up very well when it comes to the quality of their products. SELF­ASSESSMENT 2.2 To What Extent Is Your Organization Committed to Total Quality Management? This self­assessment is designed to gauge the extent to which the organization you have in mind is committed to Total Quality Management (TQM). Go to connect.mheducation.com and take the self­assessment. When you’re done, answer the following questions: 1. Which of the five dimensions is most and least important to the organization? Are you surprised by this conclusion? Explain. 2. Based on the three lowest­rated items in the survey, what advice would you give to senior leaders in the company? 3. Considering all of the questions in the survey, which three do you think are most important in terms of fostering TQM in a company? Why? The Learning Organization in an Era of Accelerated Change Organizations must learn or perish. How do I build a learning organization? THE BIG PICTURE Learning organizations 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 organization. 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 things 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 so­called 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 Page 64 continually learning how to learn together.” 54 The Learning Organization: Handling Knowledge & Modifying Behavior More formally, a learning organization is an organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge. 55 Note the three parts: 1. Creating and acquiring knowledge. In learning organizations, 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 organization, reducing barriers to sharing information and ideas among employees. Electronic Data Systems (EDS), for instance, practically invented the information­technology 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 The learning organization. In rigid organizations, employees often keep information to themselves. In learning organizations, workers are encouraged to share information with each other—both inside and outside their department. How to Build a Learning Organization: Three Roles Managers Play 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. You can build a commitment to learning. To 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 b
oldness 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 effect giving them permission to make and learn from mistakes. 59 Page 65 2. You 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 start­ups in India that could be adapted for the North American market. Hewlett­Packard used its research lab in India to see how it could adapt mobile phone web­interface applications in Asia and Africa to markets in developed countries. 60 3. You 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 organization. You 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 self­assessment was created to evaluate whether an organization you now work for or formerly worked for could be considered a serious learning organization. The survey items provide a good indication of what it takes to become a learning organization. SELF­ASSESSMENT 2.3 Are You Working for a Learning Organization? This self­assessment provides a measure of the extent to which an organization of your choice is a learning organization. Go to connect.mheducation.com and take the self­assessment. When you’re done, answer the following questions: 1. What are the strengths and weaknesses of this company in terms of being a learning organization? 2. If you were CEO of this organization, what changes would you make based on your survey results? Explain. 3. What suggestions would you make for how this organization might (1) build a commitment to learning, (2) work to generate ideas with impact, and (3) work to generalize ideas with impact? Discuss. 4. How does the learning score for the organization probably compare with the scores of other organizations you are familiar with? Key Terms Used in This Chapter administrative management behavioral science behavioral viewpoint classical viewpoint closed system complexity theory contemporary perspective contingency viewpoint evidence­based management feedback historical perspective human relations movement inputs learning organization management science open system operations management outputs quality quality assurance quality control quality­management viewpoint quantitative management scientific management subsystems system systems viewpoint total quality management (TQM) transformation processes Key Points 2.1 Evolving Viewpoints: How We Got to Today’s Management Outlook • 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 quality­management. • 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. 2.2 Classical Viewpoint: Scientific & Administrative Management • 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 offered 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 organization. Among its pioneers were Henri Fayol, who identified the major functions of management (planning, organizing, leading, controlling), and Max Weber, who identified five positive bureaucratic features in a well­performing organization. • 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 Behavioral Viewpoint: Behavorism, Human Relations, & Behavioral Science • The second of the historical perspectives, the behavioral viewpoint emphasized the importance of Page 66 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 Munsterberg 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 so­called 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). • 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 Quantitative Viewpoints: Management Science & Operations Management • The third of the historical perspectives, quantitative viewpoints emphasized the application to management of quantitative techniques. • Two 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 organization’s products or services more effectively. 2.5 Systems Viewpoint • Following the historical perspective, the contemporary perspective includes three viewpoints: (1) systems, (2) contingency, and (3) quality­management. • The systems viewpoint regards the organization 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 Contingency Viewpoint • 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 evidence­based management, which means translating principles based on best evidence into organizational practice, brin
ging rationality to the decisionmaking process. 2.7 Quality­Management Viewpoint • The third category in the contemporary perspective, the quality­management 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) Total 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 The Learning Organization in an Era of Accelerated Change Page 67 • A learning organization 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 organization are to (1) build a commitment to learning, (2) work to generate ideas with impact, and (3) work to generalize ideas with impact. Understanding the Chapter: What Do I Know? 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 difference 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 organization employ evidence­based 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 organization? Management in Action GM’s New CEO, Mary Barra, Must Manage a Major Recall [General Motors CEO Mary] Barra, in a letter to employees posted on a company 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 comments 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. . . . Page 68 GM engineers 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 front­end 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 separate 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 right­hand turns. The dealer reported that the customer “has the fear of God in her about the car,” according to a deposition. GM’s chronology says that a higher­level team to investigate the ignition switch problem was formed in 2011. The chronology does not identify the members of this team. 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 would 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 simple: 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.” FOR DISCUSSION 1. To what extent is GM using evidence­based management? Are they overdoing it? Explain your rationale. 2. To what extent are the managerial practices being used at GM consistent with principles associated with management science and operations management techniques? Discuss. 3. Use Figure 2.4 to analyze the extent to which GM is using a systems viewpoint. 4. How are the managerial practices being used at GM consistent with a quality­management viewpoint? Explain your rationale. 5. To what extent does GM represent a learning organization? Discuss. Source: Excerpted from J. Bennett, “Recall Is First Big Test for GM Chief Barra,” The Wall Street Journal, March 5, 2014, http://online.wsj.com/news/articles/SB10001424052702304360704579419494191216588 (accessed March 5, 2014). Legal/Ethical Challenge Is an Apology Enough? This dilemma involves a scandal at the University of North Carolina (UNC). The issue revolves around whether or not the school’s Department of African and Afro­American Studies offered courses that never met and sponsored hundreds of independent study classes of limited value to student athletes. The university did
an internal review and determined the department “offered more than 200 lecture courses that never met. The department also sponsored hundreds of independent study classes of dubious value. Internal reviews Page 69 have identified forged faculty signatures and more than 500 grades changed without authorization. The students affected were disproportionately football and basketball players.” 61 College athletics is a $16 billion industry, and schools enjoy the related revenues in light of their nonprofit, tax­exempt status as organizations dedicated to education and research. This means that it is important for the “stars” to keep playing and winning games. Management at UNC took action and eight employees either resigned or were fired, including the Chancellor. The new Chancellor, Carol Foyt, initially resisted calls for further investigation, but changed her mind in January 2014. An investigation is currently taking place. The scandal was exposed by Mary Willingham, a campus reading specialist. Mary told reporters that she and other academic advisers “knowingly steered some of their charges into the fake classes to keep the sports stars eligible.” She said that “18 out of about 180 athletes whose records she assessed could be considered to read at a grammar school level.” 62 Willingham’s comments resulted in her being demoted and stripped of her supervisory title and public condemnation by some school officials. For example, James Dean Jr., the executive vice chancellor and provost, said that “Mary Willingham has done our students a great disservice.” He initially declared that Willingham was a liar, but later stated that he misspoke. Head basketball coach Roy Williams said that Willingham had impugned the moral character of his players. He claimed that “every one of the kids that we’ve recruited in 10 years you’d take home and let guard your grandchildren.” Sadly, Willingham has in turned received e­mails containing death threats, and recent reports in Bloomberg Businessweek revealed that Dean continues to attack Willingham in internal meetings. 63 SOLVING THE CHALLENGE Assuming that you are the university’s chancellor, what would you do at this point in the scandalous saga? 1. Acknowledge wrongdoing, reinstate Mary Willingham to her former position, and continue the internal investigation. 2. Acknowledge wrongdoing, but Mary stays where she is. She should not have blown the whistle to local reporters without first going to upper management at the university. 3. Reprimand both James Dean and the basketball coach for their comments, and continue the internal investigation. 4. Invent other options.

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