Transcript Seminar Four

The History of Management
Thought
Management 336
Mike Bejtlich
Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren
Chapter Fourteen
The Search for Organizational
Integration
Search for Organizational
Integration
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Mary Parker Follett
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Chester Barnard
Mary Parker Follett 1868-1933
The Political Philosopher

Mary Parker Follett
Follett was
chronologically closer to
the scientific
management
movement, but
intellectually a
forerunner of
understanding the
group processes
Mary Parker Follett
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Basis of her philosophy
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Johann Fichte (1762-1814): each ego is a social
one, bound to a wider world of egos.
From this Follett concluded that individuals can
discover their true nature and gain freedom
through the group.
Georg Hegel (1770-1831)
She espoused the Gestalt notion that a person’s
“true self is the group self.”
Follett and Conflict Resolution
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Submission if in a
conflict situation.
With struggle,
someone wins and
someone loses.
Compromise was a
solution she did not
like, especially as it
appeared in labormanagement collective
bargaining.
Follett and Conflict Resolution
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Integration was the best
solution.
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In integration, parties
find a solution that
did not involve
compromise,
submission, or
struggle.
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Integration involves
finding a creative
solution so that both
parties achieve their
goal.
Mary Parker Follett
Follett and Authority & Power
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Rethinking authority and power is essential to
integration.
She advocated power-with and co-action to replace
power-over and coercion.
Depersonalize orders and follow the law of the
situation.
Authority is based on knowledge and not the will of
one person.
“Power with” required “circular response,” disclosure,
and open discussion.
Follett believed in employee representation plans
because of cooperation and shared power.
Follett and Leadership
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Follett’s notion of the role of the leader/manager was
an extension of her ideas of integration and authority.
Control could not be achieved without integrated
efforts, that is, when interests were not reconciled.
Control was based on facts, not people; and
“correlated,” not imposed from above.
Coordination facilitated control.
Leadership, then, involved defining the purpose of
the organization and skills in coordinating and
evoking the law of the situation.
Follett and Leadership
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These leadership tasks
were not based on the
power of the leader, but
a reciprocating
influence of leaders and
followers within the
context of the situation.
Mary Parker Follett
Follett’s Books
Chester Barnard 1886-1961
The Erudite Executive

Chester I. Barnard
Chester Barnard
influenced human
relations thinking and
continues to influence
our understanding of
organizations and
management.
Barnard
and Cooperative Systems
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Formal organizations as the kind of cooperation that is
“conscious, deliberate, and purposeful.”
Formal organizations helped:
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Maintain an internal equilibrium.
Examine external forces to see if adjustments must be
made. An “open systems” viewpoint.
Analyze the functions of executives.
Organizations needed to be cooperative systems
because people had choices and they could choose to
contribute or not to contribute.
The executive functions could modify actions and
motives through influence and control.
Barnard
and Cooperative Systems
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Effective-Efficient: individual and organizational
goals might differ and Barnard expressed this as:
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Effective – meet the goals of the organization.
Efficient – meet individual motives and only the
individual could determine whether or not this was
occurring.
The only measure for efficiency according to
Barnard was the organization’s capacity to survive.
That is, to provide adequate inducements to
satisfy individual motives to secure their
cooperation.
Barnard
and Formal Organizations
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Barnard defined a formal
organization as “a system
of consciously coordinated
activities or forces of two
more more persons.”
The late Lyndall Urwick felt
this definition was too
broad, and quipped:
“under Barnard’s definition,
a boy kissing a girl is also a
formal organization.”
Chester I. Barnard
Elements of a
Formal Organization

Willingness to cooperate, and this was to be
facilitated by the offerings of objective and
subjective incentives. This notion meant:
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“self-abnegation”
“surrender of control of personal conduct”
“depersonalization of personal actions”
Purpose or objectives of the organization.
Although individual and organizational motives
were different, individuals could achieve their
motives by working toward organizational
purposes.
Elements of a
Formal Organization

Communication – Barnard developed three
principles:
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Channels should be definitely known
Objective authority requires a definite channel of
communication (formal authority)
Keep the line of communication short and direct.
Barnard’s
Informal Organization
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Three universal elements of an informal
organization:
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Communication
Maintenance of cohesiveness
Maintenance of feelings of personal integrity and
self-respect.
Barnard’s
Acceptance Theory of Authority
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From The Functions of the Executive by Chester I.
Barnard. Harvard University Press, 1938.
Barnard’s definition of
authority included the
notion that a
communication must be
“accepted” by the
organizational member.
Authority did not reside in
persons of authority, but
in a member’s acceptance
of authority.
Barnard’s
Acceptance Theory of Authority

Individuals would consent
to authority if four
conditions were met:
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From The Functions of the Executive by Chester I.
Barnard. Harvard University Press, 1938.
They understood the
communicated order.
They believed the order
was consistent with the
organization’s purpose.
The order was “compatible
with their personal
interests as a whole.”
They were physically and
mentally able to comply
with the order.
Barnard’s “Zone of Indifference”
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“Zone of Indifference” – Barnard’s phrase for
explaining how an organization could
function since members could accept or
reject authority on almost any occasion.
Individuals could be very “indifferent,”
leading to a wider possibility of acceptance,
or less indifferent.
This depended on the individuals weighing
the “inducements,” burdens, and sacrifices.
“Authority of Leadership”
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This was Barnard’s way of expressing the
“potentiality of assent” created when people
had respect for and confidence in their
leaders.
Authority still existed in the organizational
hierarchy, in formal authority, but authority in
the final analysis still rested with the
organizational member.
Barnard –
Functions of the Executive
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The functions of the executive:
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Provide a system of communication
Promote securing personal efforts
Formulate and define organizational purpose.
These reflect to a large extent the elements
of organization.
Barnard had a top management view of
integrating the organization as a whole,
internally and the external environment.
Moral Leadership
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Moral leadership for Barnard involved executives
having a high moral code, demonstrating it as
an example, and seeking to create this morality
in others.
How would Barnard feel about the executives at
Enron?
Summary
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Mary Parker Follett and Chester Barnard bridged
two eras.
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Follett introduced a group view with Gestalt psychology.
Barnard focused on the formal and informal
organization.
Both operated on a philosophical plane.
Both sought to create a spirit of cooperation and
collaboration.
Both were concerned with the individual in group
effort.
Both examined concepts of authority and moral
leadership.
Chapter Fifteen
People and Organizations
People and Organizations
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Eduard C. Lindeman (1885-1953)
Jacob L. Moreno (1889-1974)
Kurt Lewin (1890-1947)
Abraham H. Maslow (1908-1970)
Joseph N. Scanlon (1899-1956)
James F. Lincoln (1883-1965)
Charles P. McCormick (1876-1970)
William Foote Whyte (1914-2000)
Leadership Studies at Michigan and Ohio State
with Rensis Likert (1903-1981), Ralph Stogdill
(1904-1978) and Carroll L. Shartle (1903-1993).
People at Work – Micro View
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Eduard C. Lindeman
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Early study of group
behavior in member
interaction,
participation, and
attitudes
Origin of phrase
“participant-observer”
Lindeman was a
cohort of Mary Parker
Follett and they
appear to have
influenced each other.
Eduard C. Lindeman,
Reproduced from the encyclopaedia of informal
education, www.infed.org
People at Work – Micro View

Jacob Moreno
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Jacob Moreno,
courtesy of Dr. Walter Logeman
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Sociometry, trying to classify
individuals into groups that were
capable of harmonious relationships.
Sociogram, mapping interpersonal
preferences…there was a difference
when preferences were for social vs.
task mates.
Psychodrama, a cathartic experience
for an individual in a group setting
Sociodrama, the basis of role
playing.
Role reversal, taking the role of
others and a useful technique for
working with culturally diverse
groups.
People at Work – Micro View

Kurt Lewin
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Group dynamics and
field theory – Gestalt
notions for
understanding
individuals in groups.
Quasi-stationary
equilibrium. Groups
never achieved a
steady state but were
continuously in a
process of mutual
adaptation.
People at Work – Micro View
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Kurt Lewin and Leadership
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During leadership studies, Lewin asked his
counselors to role play democratic or authoritarian
styles and found what he expected in boy’s
reactions.
One counselor, however, misplayed his role and,
rather than throwing the data out, Lewin called
this “laissez-faire,”meaning no leadership.
This style has persisted in the literature despite its
inaccuracy.
People at Work – Micro View
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Kurt Lewin and Changing Behavior
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Lewin’s found that group participation facilitated
the change process.
His three step model is still a foundation for
modern theory:
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“unfreezing” through participation
“moving” to the new level
“freezing” (reinforcing) the desired new behavior.
Lewin’s work became the basis for sensitivity
training through his influence on Leland
Bradford.
Changing Assumptions about
People at Work
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Motivation
Job Enlargement
Participation
Leadership
Motivation – Abraham H. Maslow
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His “humanistic
psychology” was a
revolt against
behaviorism leading to
the Third Force in
psychology.
His contact with
industry led to the book
Eupsychian
Management.
Abraham H. Maslow
Motivation – Abraham H. Maslow
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Dynamics of need
fulfillment or
deprivation
Hierarchy of Needs
Motivation – A.H. Maslow
The Journals of Abraham Maslow by Abraham Maslow. The Lewis Publishing Company, 1982.
Joseph Scanlon
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Union official and later a colleague of Douglas
McGregor at MIT.
The Scanlon Plan
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A union-management productivity plan whereby
groups of workers got bonuses for proposing
savings in labor costs
Group oriented
Not profit sharing.
James F. Lincoln
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Rewarding individual efforts based on skill
ratings.
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Wages and benefits were comparable to the
Cleveland area labor market
In addition, bonuses were paid for performance
based on quality and quantity of output as well as
self-management.
Bonuses are substantial.
Job Enlargement
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Research in the 1940’s by Walker and Guest
indicated some possible improvements if jobs
were designed to lengthen (broaden) the
work cycle.
This concerned combining jobs rather than
increasing job depth.
Participation
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Participation was a power-equalization thesis
of this period to play down the importance of
the organizational hierarchy.
James Worthy (1910-1998)
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at Sears, Roebuck argued for flatter structures
and decentralization.
Also worked with the University of Chicago’s
Committee on Human Relations to study the
impact of structure on employee morale.
Participation
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William B. Given, Jr. – “bottom-up” approach
Charles P. McCormick – a plan for participation
which is still operative in the McCormick
Company (tea, spice, and extract firm).
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Junior Boards were created (“multiple
management”) to improve communications,
manager development, and coordination through
participation.
The Golden Rule was the basis for his successful
technique for managing people.
Rensis Likert – University of
Michigan Studies
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Found a two dimensional
orientation:
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Rensis Likert
An employee orientation
stressing interpersonal
relations
A production orientation
focusing on producing
An employee orientation
coupled with more general
supervision led to higher
productivity, better morale,
lower turnover, greater
group cohesiveness and
less employee anxiety.
Ohio State University Studies
Ralph M. Stogdill
Carroll L. Shartle
Ohio State University Studies
Summary of Michigan and
OSU Leadership Studies

Despite differing terminology, leadership was
viewed by each as a two-by-two matrix of
leader behaviors in which people-oriented
was not mutually exclusive of a production
orientation.
People at Work: The Macro
View
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William Foote Whyte (1914-2000) –
restaurant studies
E. Wight Bakke (1903-1971) – formal and
informal systems
Herbert A. Simon (1916-2001) – how choices
were made
George C. Homans (1910-1989) – activities,
interactions, sentiments
People at Work: The Macro
View
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William F. Whyte’s
restaurant study:
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Status ran counter to
workflow and who
initiated work for
others.
Whyte's work was key
to the idea of sociotechnical systems.
Whyte is noted for
“participatory action
research.”
People at Work: The Macro
View

E. Wight Bakke
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the interactions of the formal and informal
systems;
the "bonds" of organization;
the "fusion" process involving organizational
position and personal views of standing or status.
People at Work: The Macro
View
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Herbert A. Simon
Herbert A. Simon,
Nobel Laureate, was
influenced by Barnard.
Wrote about limits that
“bound the area of
rationality.“
This led to “satisficing"
or "good enough"
decisions.
People at Work: The Macro
View
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For Simon, composite
decisions are better due to
limits on a person's ability
to achieve better
solutions;participation by
different groups would be
an improvement.
With James March (1928-),
Simon wrote the influential
book Organizations.
People at Work: The Macro
View
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George Homans was
influenced by Pareto.
His study of
relationships in work
and social systems
found dimensions such
as:
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Activities, formal or
informal.
Interactions,prescribed
or emergent.
Sentiments, the elusive
nature of feelings.
George Homans
Summary
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Evolving management thought had two phases in
this period:
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Micro level inquiry into sociometry, group dynamics,
participation, leadership and motivation
Macro level search for models to explain interactions
between the formal and informal organization.
Human relation additions to concepts of
management include:
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An increasing emphasis on the social
Enlarging jobs to counteract overspecialization
Less emphasis on hierarchy, more on participation
Recognition of the informal organization
Developing the means to study the interaction of the
formal and informal organization.
Chapter Sixteen
Organizations and People
Organizations and People
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Organizations – Structure and Design
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James D. Mooney (1869-1947) and Alan C. Reiley
(1884-1957)
Administrative Theory
Span of Control
Toward a Top Management Viewpoint
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Ralph C. Davis (1894-1986)
Harry A. Hopf (1882-1949)
Ronald H. Coase (1910-
James Mooney and Alan Reiley
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They searched for principles of
organization both in historical
examples and in large-scale
enterprise
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Objectives – “profit through service”
Efficiency resided in organized group
effort
Formalism, the basis of an efficient
organization, involved the “efficient
coordination of all relationships”
Management actuates, plans, and
controls the plans and procedure of
the organization.
James Mooney and Alan Reiley
– Principles
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Coordination – rested on authority
Authority was in the organization, while power
was an individual possession
“Doctrine” – Objectives
Scalar principle, which was founded in leadership
Delegation – conferring authority
Functional principle – difference in duties
performed (such as line-staff)
Staff – represented the authority of ideas
Line – represented the “authority of man.”
Administrative Theory
Luther Gulick (1892-1993)
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Better known for his work in
public administration
POSDCORB – his view of the
functions of the manager
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Planning, organizing, staffing,
directing, co-ordination,
reporting, and budgeting
Departmentation and
“principles of homogeneity” –
grouping persons by:
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Purpose, process, persons or
“things” and place
Administrative Theory
Lyndall Urwick (1891-1984)
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Lt. Col. Lyndall Urwick
Lt. Col. Urwick attempted
to synthesize a number of
contributors to develop a
general theory of
organization and
management.
8 Principles of organization
Along with Gulick, brought
Fayol into the picture long
before Fayol was
recognized in the U.S.
Span of Control –
V. A. Graicunas
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Influenced by Urwick and the
British general Sir Ian Hamilton.
Put forth an argument for a
narrow span of control due to
“span of attention” and the
relationships that managers must
deal with.
The mathematics of the different
types of relationships indicated a
geometric growth of relationships
with an arithmetic increase in the
number of subordinates (See
Wren text for discussion)
Span of Control – Graicunas
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While the mathematics would indicate keeping the
span of control narrow, Graicunas also includes a
qualifier:
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Exceptions could be made if the work was routine, was
done independently of others, and where supervisory
responsibilities were less complex.
See Bedeian, A.G. “Vytautas Andrius Graicunas: A
Biographical Note,” Academy of Management
Journal 17, no. 2 (June 1974) for fascinating
account of Graicunas’ unusual life.
Graicunas
Papers on the Science of Administration by Urwick and Gulick.
Pay special
attention to
the authors
Toward a Top Management
Viewpoint – Ralph C. Davis
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Ralph C. Davis
Davis (1894-1986) was
educated as a mechanical
engineer, took an early shop
management approach,
encountered the Coubrough
translation of Fayol, leading
him to his top management
contributions.
Organic functions of
management: planning,
organizing, and controlling.
Ralph C. Davis
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Management defined as “the function of
executive leadership.”
Unique insights into controlling with respect
to its timing:
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Preliminary – trying to design in advance what
would promote the planned performance.
Concurrent – supervising, comparing, and taking
corrective action as needed.
Toward a Top Management
Viewpoint – Harry Hopf
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Hopf (1882-1949) was influenced by Taylor
and applied these ideas in a more general
management setting.
Interested in office worker and executive
compensation, while others had focused on
blue-collar workers.
Interested in tying executive compensation
to performance (still an important issue
today).
Harry Hopf
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“Form follows function,” an architectural
notion for organization structure (ahead of
A.D. Chandler Jr.’s “structure follows
strategy?”).
“Optimology,” a view of the firm as a whole –
serve society to maximize profits.
Other Studies of Top
Management
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Holden, Fish, and Smith studied 31 blue-chip
companies in 1941: found need for clearer
objectives and plans.
Sune Carlson found communications occupied
a major portion of a manager's time (1951).
Jackson Martindell created a management
audit; a search for excellence before Tom
Peters and Bob Waterman.
Ownership and Control
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Adolph Berle and Gardiner Means criticized
executives and directors as “economic
autocrats” who were removed from serving
the interests of the shareholders. (1930s)
Robert Gordon’s criticism was much the
same, seeing top management as a selfperpetuating oligarchy serving their own
interests.
Why does this seems to be an evergreen,
ever recurring problem?
Visible and Invisible Hands
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John R. Commons
(1868-1945), labor
economist and founder
of institutional
economics, noted that
the transactions were
smallest unit of
analysis.
His ideas achieved
wider appreciation
later.
John R. Commons,
courtesy of the Wisconsin Electronic Reader
Visible and Invisible Hands
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Ronald H. Coase (1910-) wrote his seminal work
during this time about the nature of the firm.
He saw the firm as the “visible hand” and superior,
in most cases, to the market in allocating
resources.
Coase was continuing the tradition of J.B. Say and
Alfred Marshall but his work received belated
acclaim.
Coase, from the University of Chicago, won the
Nobel Prize in economics in 1991.
Summary

Contributors in this chapter were concerned with
structuring activities and relationships for
productivity and satisfaction at work:
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Mooney and Reiley presented rules of organization from
history.
Dennison’s work built on compatible work groups.
Gulick, Urwick, and Graicunas focused on formalizing
relationships.
Davis focused on top management.
Hopf applied the scientific approach to examining the
whole firm.
Coase and Commons introduced transaction cost
economics.