CHAPTER 19
MANAGEMENT THEORY AND PRACTICE
RESUME by Alamanda
In this period, management scholar turned from a shop-level management orientation to general management theory.
THE RENAISSANCE OF GENERAL MANAGEMENT
It is easy to forget just how ancient the practice of management is. Only within the last century did people begin to reflect systematically on their experiences and observations in attempts to sort out and identify those managerial practices that seemed to work better than others. These better practices were called principles but more closely resembled guides to managerial thought and action than scientific fact.
Henry Fayol was the first to propose a general theory of management. He defined theory as “a collection of principles, rules, methods, and procedures tried and checked by general experience.
Fayol’s Intellectual Heirs
Newman, 1948, defined administration as “the guidance, leadership, and control of the efforts of a group of individuals toward some common goal” and developed a logical process of administration as a separate intellectual activity
Terry, defined management as “the activity which plans, organizes, and controls the operations of the basic elements of men, materials, machines, methods, money, and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise”
Terry defined a principle as “a fundamental statement providing a guide to action,” and his principles, like Fayol’s, were lighthouses to knowledge and not laws in a scientific sense
Harold Koontz (19098-1984) and Cyril O’Donnell (1900-1976) defined management as “the function of getting things done through others”. They furthered Fayol’s ideas and sought to provide a conceptual framework for the orderly presentation of the principles of management.
They attempted to identify management as a distinct intellectual activity and sought a generally accepted body of knowledge that could be distilled into principles hence lead to a general theory of management
Management Education: Challenges and Responses
Gordon and Howell noted at least four different aspects of the fields of organization and management
o Managerial problem solving through the scientific method and quantitative analysis
o Organization theory
o Management principles
o Human relation
Each played a part in the study of management, and the authors recommended some integration of these ideas into a sequences of courses that would better prepare future leaders rather than leave them with a fragmented picture of the tasks of management
The Management Theory Jungle
Koontz noted six main groups, or schools, of management thought: the management process school “perceives management as a process of getting things done through and with people operating in organized groups
The empirical School identified management as the “study of experience” and used case analyses or Ernest Dale’s “comparative approach” (in The Great Organizers) as vehicles for teaching and drawing generalizations about management
The human behavior school variously called the human relations, leadership, or behavioral sciences approach, studied management as interpersonal relations, since management was getting things done through people. This school used psychology and social psychology to concentrate on the people part of management
The mathematical school viewed management as a” system of mathematical models and processes”. This approach included the contribution of operations and processes”. This approach included the contributions of operations researchers, operations analysis, and management scientists who thought that management or decision making could be “expressed in terms of mathematical symbols and relationships”
William Frederick said that “Perhaps five years, certainly not more than ten years hence, a general theory of management will be evolved, stated, and generally accepted in management circles”
Other Views of Managerial Work
Mintzberg concluded that managers performed ten roles but be described under three general categories (1) interpersonal (2) informational and (3)decisional
Stewart offered another view of manager’s job by examining: (1)demand; (2)constraints; (3)choices
Kotter identified the differences in responsibilities and relationships that caused the job demands to vary, such as organizational size, age, performance level, culture, and product or market diversity
Kotter concluded that managers developed agendas, sets of loosely connected plans, and tasks necessary to accomplish organizational objectives
Kotter’s agenda helped explain why observations of managers in action reveal behaviors that do not appear to fit some neat categories of planning and organizing, there are regularities in managerial work in terms of accomplishing goals
The Search For Excellence
Thomas Peters and Robert Waterman identified eight attributer of corporate excellence: (1) a bias for action rather than contemplation; (2) a closeness to customer needs in products and services;(3) the encouragement of autonomy and loose rather than close supervision; (4) an attitude toward employees that encouraged productivity and avoided a “we” versus “they” feeling; (5) a close touch with people in a technique called “management by walking around; (6) a “sticking to knitting” by staying close to the business competencies, thus avoiding unrelated ventures; (7) a simple organizational structure and a lean staff; and (8) a control system that had simultaneous loose-tight properties of keeping on target but without stifling innovation
No one technique or set of techniques will ensure successful performance; no one measure stands alone
Management Education: Another Look
According to some observer, the business school were prime contributors to the gulf between theory and practice
American Assembly of Collegiate Schools of Business sponsored a three-year comprehensive study of management education that surveyed practitioners and academics
Drucker: The Guru of Management Practice
Peter Drucker achieved prominence through his writing and consulting his contribution have been primarily to he world of management practice.
Drucker stressed the need to define key areas for setting objectives and evaluating results
Drucker’s work is “grounded in management practice, and has also been able to communicate has ideas well to academics and leading executives”. Perhaps Drucker’s work will help us leaven academic rigor and make it more managerially relevant; if not, knowledge will remain data and the theory practice gap will continue.
FROM BUSINESS POLICY TO STARTEGIC MANAGEMENT
Governance and agency issues are intertwined with other management topics: organizing, human resource management, motivation, ethics, strategic leadership, interpersonal relations, communication and information system, and control techniques, to touch the main connections. Historically, governance and agency are evergreen issues; the stuff for morality dramas, for seeking exemplas of virtue.
Drucker’s ideas would inspire others. One possible influence appeared in the Gordon and Howell, which proposed business policy as a capstone course to bring together the knowledge acquires in the various business functional areas
In a later role in academia, Ansoff encountered the ideas of Peter Drucker and Alferds Chandler, and formulated his notion of corporate strategy, which involved formulating objectives and strategy based on an analysis of opportunities in the environment
The format of combining industry notes with case in the texts developed at Harvard for business policy was in recognition of a need to place the strategy firm in its competitive environment
Michael Porter, recalled it, “surreal experience” to find that both academic units were discussing industries in the study of business policy and industrial organization (I/O) economics
Edith Penrose (1914-1996) observed that “it is the heterogeneity, and not the homogeneity, of the productive services available or potentially available from its resources that give each firm its unique character
Penrose noted that a firm’s resources were “inherited” that is, left over from prior decisions about location, special purpose equipment, the pool of managerial talent, and “indivisible” resources, all of which posed potential limits to decisions about the future direction of the firm.” Knowledge” was also inherited as it resided in the experience, education, and intuition of the firm’s human resource. And “entrepreneurs” to describe persons within the firm who could provide changes in knowledge about products, markets, technology, administrative processes and opportunities
In the 1960s, the Harvard business policy group using SWOT analysis in the classroom. An acronym for “strength” and “weaknesses” and “opportunities” and “threats”
In retrospect, Wernerfelt admitted that the resource-based view did not gain credence until some years later in the work of Prahalad and Hamel and their paper on the “core competencies” of the firm
Robert Hoskisson and his colleagues have studied the swinging pendulum of strategic management theory. From case studies, to I/O economics, and industry studies and to resource and knowledge-based theories of the firm, there has been an ebb and flow from specific to more encompassing theories about the firm in its quest for a competitive advantage
The theory of evolutionary economics suggest that a firm must developed dynamic capabilities that will enable it to transform it self as competitive conditions changes
In contrast to transaction-cost economics, Lazonick propose organizational learning to “unbound” rationality and to provide organizational incentives to overcome “opportunism”
The evolutionary/dynamic capabilities theories place responsibility for change and learning squarely on the firm and its human resource
Strategic management is but one part f this model and must recognize its integrative, capstone role and how it relates to the body of management thought
In this period, management scholar turned from a shop-level management orientation to general management theory.
THE RENAISSANCE OF GENERAL MANAGEMENT
It is easy to forget just how ancient the practice of management is. Only within the last century did people begin to reflect systematically on their experiences and observations in attempts to sort out and identify those managerial practices that seemed to work better than others. These better practices were called principles but more closely resembled guides to managerial thought and action than scientific fact.
Henry Fayol was the first to propose a general theory of management. He defined theory as “a collection of principles, rules, methods, and procedures tried and checked by general experience.
Fayol’s Intellectual Heirs
Newman, 1948, defined administration as “the guidance, leadership, and control of the efforts of a group of individuals toward some common goal” and developed a logical process of administration as a separate intellectual activity
Terry, defined management as “the activity which plans, organizes, and controls the operations of the basic elements of men, materials, machines, methods, money, and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise”
Terry defined a principle as “a fundamental statement providing a guide to action,” and his principles, like Fayol’s, were lighthouses to knowledge and not laws in a scientific sense
Harold Koontz (19098-1984) and Cyril O’Donnell (1900-1976) defined management as “the function of getting things done through others”. They furthered Fayol’s ideas and sought to provide a conceptual framework for the orderly presentation of the principles of management.
They attempted to identify management as a distinct intellectual activity and sought a generally accepted body of knowledge that could be distilled into principles hence lead to a general theory of management
Management Education: Challenges and Responses
Gordon and Howell noted at least four different aspects of the fields of organization and management
o Managerial problem solving through the scientific method and quantitative analysis
o Organization theory
o Management principles
o Human relation
Each played a part in the study of management, and the authors recommended some integration of these ideas into a sequences of courses that would better prepare future leaders rather than leave them with a fragmented picture of the tasks of management
The Management Theory Jungle
Koontz noted six main groups, or schools, of management thought: the management process school “perceives management as a process of getting things done through and with people operating in organized groups
The empirical School identified management as the “study of experience” and used case analyses or Ernest Dale’s “comparative approach” (in The Great Organizers) as vehicles for teaching and drawing generalizations about management
The human behavior school variously called the human relations, leadership, or behavioral sciences approach, studied management as interpersonal relations, since management was getting things done through people. This school used psychology and social psychology to concentrate on the people part of management
The mathematical school viewed management as a” system of mathematical models and processes”. This approach included the contribution of operations and processes”. This approach included the contributions of operations researchers, operations analysis, and management scientists who thought that management or decision making could be “expressed in terms of mathematical symbols and relationships”
William Frederick said that “Perhaps five years, certainly not more than ten years hence, a general theory of management will be evolved, stated, and generally accepted in management circles”
Other Views of Managerial Work
Mintzberg concluded that managers performed ten roles but be described under three general categories (1) interpersonal (2) informational and (3)decisional
Stewart offered another view of manager’s job by examining: (1)demand; (2)constraints; (3)choices
Kotter identified the differences in responsibilities and relationships that caused the job demands to vary, such as organizational size, age, performance level, culture, and product or market diversity
Kotter concluded that managers developed agendas, sets of loosely connected plans, and tasks necessary to accomplish organizational objectives
Kotter’s agenda helped explain why observations of managers in action reveal behaviors that do not appear to fit some neat categories of planning and organizing, there are regularities in managerial work in terms of accomplishing goals
The Search For Excellence
Thomas Peters and Robert Waterman identified eight attributer of corporate excellence: (1) a bias for action rather than contemplation; (2) a closeness to customer needs in products and services;(3) the encouragement of autonomy and loose rather than close supervision; (4) an attitude toward employees that encouraged productivity and avoided a “we” versus “they” feeling; (5) a close touch with people in a technique called “management by walking around; (6) a “sticking to knitting” by staying close to the business competencies, thus avoiding unrelated ventures; (7) a simple organizational structure and a lean staff; and (8) a control system that had simultaneous loose-tight properties of keeping on target but without stifling innovation
No one technique or set of techniques will ensure successful performance; no one measure stands alone
Management Education: Another Look
According to some observer, the business school were prime contributors to the gulf between theory and practice
American Assembly of Collegiate Schools of Business sponsored a three-year comprehensive study of management education that surveyed practitioners and academics
Drucker: The Guru of Management Practice
Peter Drucker achieved prominence through his writing and consulting his contribution have been primarily to he world of management practice.
Drucker stressed the need to define key areas for setting objectives and evaluating results
Drucker’s work is “grounded in management practice, and has also been able to communicate has ideas well to academics and leading executives”. Perhaps Drucker’s work will help us leaven academic rigor and make it more managerially relevant; if not, knowledge will remain data and the theory practice gap will continue.
FROM BUSINESS POLICY TO STARTEGIC MANAGEMENT
Governance and agency issues are intertwined with other management topics: organizing, human resource management, motivation, ethics, strategic leadership, interpersonal relations, communication and information system, and control techniques, to touch the main connections. Historically, governance and agency are evergreen issues; the stuff for morality dramas, for seeking exemplas of virtue.
Drucker’s ideas would inspire others. One possible influence appeared in the Gordon and Howell, which proposed business policy as a capstone course to bring together the knowledge acquires in the various business functional areas
In a later role in academia, Ansoff encountered the ideas of Peter Drucker and Alferds Chandler, and formulated his notion of corporate strategy, which involved formulating objectives and strategy based on an analysis of opportunities in the environment
The format of combining industry notes with case in the texts developed at Harvard for business policy was in recognition of a need to place the strategy firm in its competitive environment
Michael Porter, recalled it, “surreal experience” to find that both academic units were discussing industries in the study of business policy and industrial organization (I/O) economics
Edith Penrose (1914-1996) observed that “it is the heterogeneity, and not the homogeneity, of the productive services available or potentially available from its resources that give each firm its unique character
Penrose noted that a firm’s resources were “inherited” that is, left over from prior decisions about location, special purpose equipment, the pool of managerial talent, and “indivisible” resources, all of which posed potential limits to decisions about the future direction of the firm.” Knowledge” was also inherited as it resided in the experience, education, and intuition of the firm’s human resource. And “entrepreneurs” to describe persons within the firm who could provide changes in knowledge about products, markets, technology, administrative processes and opportunities
In the 1960s, the Harvard business policy group using SWOT analysis in the classroom. An acronym for “strength” and “weaknesses” and “opportunities” and “threats”
In retrospect, Wernerfelt admitted that the resource-based view did not gain credence until some years later in the work of Prahalad and Hamel and their paper on the “core competencies” of the firm
Robert Hoskisson and his colleagues have studied the swinging pendulum of strategic management theory. From case studies, to I/O economics, and industry studies and to resource and knowledge-based theories of the firm, there has been an ebb and flow from specific to more encompassing theories about the firm in its quest for a competitive advantage
The theory of evolutionary economics suggest that a firm must developed dynamic capabilities that will enable it to transform it self as competitive conditions changes
In contrast to transaction-cost economics, Lazonick propose organizational learning to “unbound” rationality and to provide organizational incentives to overcome “opportunism”
The evolutionary/dynamic capabilities theories place responsibility for change and learning squarely on the firm and its human resource
Strategic management is but one part f this model and must recognize its integrative, capstone role and how it relates to the body of management thought
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