Management History and Functions: Classical to Contemporary Perspectives

Why learn- Social, political, and economic changes impact management practices. Knowing history helps observe these forces’ impact on organizations. Learn from the past to adapt to current challenges and prepare for the future.

Classical perspective- industrialization perspective- Emphasizes a rational, scientific approach to management focused on efficiency, structure, and clear hierarchies.

  • Scientific management (F.W. Taylor)- scientifically determined jobs and management practices to improve efficiency and productivity. Focus on efficiency and labor productivity. Scientific study determines the best way to do work.
  • Bureaucratic organizations (Max Weber)- focus on rational authority and formal structure. Employee selection based on merit. Fixed rules. Authority based on position/legal power.
  • Administrative principles (Henry Fayol) – focus on the whole organization, not individuals. 5 elements- planning, organizing, commanding, coordinating, controlling.

Humanistic perspective- Focus on humanity of production- human behavior, needs, attitudes, increase effectiveness, motivation, and engagement by satisfying employee needs.

Systems thinking (extension of humanistic)- focuses on the interdependence of systems, the ability to see both the distinct elements of a system or situation, and the complex and changing interaction among those elements, focuses on the way that a system’s constituent parts interrelate and how systems work over time and within the context of larger systems.

Contingency view (extension of humanistic) – What works in one situation may not work in another, Differs from the classical perspective of universal concepts, Each case is unique or contingent.

Management functions – planning, organizing, leading, and controlling.

Work Motivation

Motivation is the forces acting on or within a person that moves him to behave in a particular manner. It’s about why people do what they do, a way of explaining differences in behaviors, helps in understanding characteristics of individuals.

Maslow hierarchy of needs- physiological, safety, love and belonging, esteem, and self-actualization (developing one’s full potential). Emphasizes the importance of fulfilling these needs to promote employee well-being and motivation, ultimately leading to improved performance and satisfaction in the workplace.

Intrinsic motivation – internal satisfaction gained by performing.

Extrinsic motivation – reward given by someone else.

Hertzberg’s Two-factor approach – hygiene factors like pay, working conditions take an employee from highly dissatisfied to neither satisfied nor dissatisfied. Motivators like recognition and personal growth take an employee from there to highly satisfied.

Goal-setting theory- specific, challenging, relevant goals with feedback help in improving performance. Goals should be “SMART” (Specific, Measurable, Achievable, Relevant, Timely).

Expectancy theory- motivation dependent on an individual’s expectations about the ability to perform tasks and receive rewards. Relies on the principle that employee effort leads to performance which leads to outcomes in the form of rewards. 3 elements- valence (value of outcome), instrumentality (that performance leads to rewards), and expectancy (that efforts lead to performance).

Job design – the application of motivational theories to the structure of work to improve productivity.

Job enrichment- A job design that incorporates achievement, recognition, and other high-level motivators into the work.

Job characteristics model- a model of job design that comprises core job dimensions, critical psychological states, and employee growth-need strength.

Personality and Work

Understanding personality helps in management by understanding the workplace, motivation, and morale.

The LEXICAL approach- Extraversion, Agreeableness, Conscientiousness, Emotional Stability/Neuroticism, Openness to Experience/Intellect.

Five-factor model – Conscientiousness, Extraversion, Agreeableness, Emotional Stability, Openness to Experience.

HEXACO model – honesty, emotionality, extraversion, agreeableness, conscientiousness, openness to experience.

Personality and work – Extraversion – sales performance, Enhanced leadership, Higher job/life satisfaction.

Openness to experience – training and expatriate success, More adaptable to change, better deal with boredom. Agreeableness – customer service and team-oriented jobs, lower levels of deviant behaviors, a good teammate. Emotional stability or neuroticism (REVERSE) – management positions, safety and security sector, lower stress level. Conscientiousness – Higher performance overall, greater longevity (persevere – day in and day out).

Situational Strength Theory- The way personality translates into behavior depends on the strength of the situation. “Weak” situation- personalities are more likely to translate to behaviors. “Strong” situation- personalities are less likely to translate to behaviors.

Trait activation theory- activate specific traits for specific situations.

Locus of control – tendency to place responsibility for success or failure internally or on an outside force.

Authoritarianism – belief that power and status differences should exist within the organization.

Machiavellianism – tendency to direct behavior towards acquiring power and manipulate others for personal gain.

Leading Groups and Teams

Groups- two or more people, interacting and interdependent working to achieve the same objectives.

Group size- as the group grows larger, individual contribution decreases.

Social loafing – individuals expend less effort in a group. Caused by the belief that others are not doing much and that individual contribution cannot be measured.

Norms- Acceptable standards of behavior within a group that are shared by the group’s members that express what they ought and ought not to do under certain circumstances.

Teams are like groups with clear goals, roles, and rules. A work team generates positive synergy through coordinated effort, results in a team outcome, is more than an additive sum of team members’ individual outcomes. Synergy: An action of two or more substances that results in an effect that is different from the individual summation of the substances.

Team creativity- A creative product is both new (novel, original) and useful (appropriate, feasible). Development of new useful ideas by a team. Outcome of combining, advancing, and exploring perspectives.

Team innovation – focus on generating creative ideas and implementing them.

Managing Start-up and New Ventures

Entrepreneurship – initiating a business, organizing the necessary resources, and assuming the associated risks and rewards. Innovation, diversity, sustainability, and social responsibility are major elements. Starts with a business idea, choosing a legal structure (sole proprietorship, partnership, company), arranging financing (equity financing, venture capitalism, debt financing, family, friends, banks).

Entrepreneurship has experienced a tremendous boost due to: advances in technology, rapid expansion of the middle class in countries such as China and India.

Social Entrepreneurship- Consumers have a growing expectation that organizations will operate in socially responsible ways, New breed of business motivated to help society solve social problems including environmental pollution, global hunger, and deaths from treatable diseases.

Entrepreneurs- who recognize an idea and make a business out of it. They have some innate traits and motivators that set them apart. the ability to persevere, a desire for power and influence, self-confidence, a high energy level, a need to achieve, and a tolerance of ambiguity.

Intrapreneurship- the process through which an individual sees the need for innovation and promotes it within an organization.

1. encourage action 2. use informal meetings whenever possible 3. tolerate failure and use it as a learning experience 4. be persistent in getting an idea to market 5. reward innovation for innovation’s sake 6. plan the physical layout of the firm to encourage informal communication 7. encourage clever bootlegging of ideas 8. organize people into small teams for future-oriented projects 9. strip away rigid procedures and encourage personnel to go around red tape when they find it 10. reward and promote innovative personnel.

sustainability in small business – Small to medium enterprises (SME) face day-to-day challenges, Sustainability usually placed on hold, But important to be proactive and think sustainability, Consider building long term win–win relationships with stakeholders, No business is too small for doing well by doing good.

Small businesses- generally proceed through five stages of growth: start-up; survival; success; takeoff and resource maturity.

online business- Find a market niche, Create a professional website, Choose a domain name, Use social media.

Cross-cultural Management

Cultural diversity – hiring people of diverse races, different religions, and promoting the entry of working staff from different countries, Diversity is an element of society and is an important part of business. Helps in: gaining knowledge about minority groups, diverse teams are innovative and creative, means to generate a positive image towards the outside world, increases the potential of the group.

Cultural intelligence(CQ)- required to develop a global mindset, refers to the ability to use reasoning and observation to interpret unfamiliar situations and devise appropriate behavioral responses.

Hofstede’s framework for assessing cultures-

  • Power Distance: the acceptance of a culture towards power distribution. Low distance: Relatively equal power between those with status and those without status. High distance: Extremely unequal power distribution between those with status and those without status. Countries that have larger power distance- products should depict respect for authority and compliance.
  • Uncertainty Avoidance: the tolerance of a society towards uncertainty and ambiguity.
  • Individualism vs Collectivism: individualistic culture prefers fulfillment of personal needs. Collectivist culture prefers the overall needs of a group.
  • Masculinity vs Femininity: Masculine cultures prioritize achievement, power, and control. feminine cultures prefer equality, caring, and cooperation.
  • Long-Term Orientation vs. Short-Term Orientation: Long-term oriented focus on future planning and persistence. Short-term oriented cultures focus on the present.
  • Indulgence vs Self Restraint: Indulgent cultures- importance of freedom for desires and enjoyment, restrained cultures control these desires through strict social norms.

Holistic perception- countries in East Asia, orientation to focus on the big picture, perceive objects or events as a whole. Holistic perception useful in psychology, counseling, social work where understanding people’s emotions, behaviors, and relationships are important. It can also be helpful in creative fields such as art, literature, and music where seeing the big picture and having a sense of meaning and purpose are essential.

Analytic perception- western cultures, focus on specific objects and details and break down complex objects or events into smaller parts. useful in science, engineering, mathematics where breaking down complex problems into smaller parts and analyzing data are essential, also helpful in law, journalism, and accounting where attention to detail and accuracy are crucial.

Culture and negotiation- Different countries evolve different ways to solve conflicts in their societies, Different culture has an implicit, standard operating procedure – the way they do deals in the business, The more you can accurately anticipate the opponent’s response and action, the more you are successful in making deals.

1. IAMS- Individuals’ Asserting and Maximizing Self-interest Strategy – Promote one’s self-interest, often through competition, Self-serving bias – Positive evaluation of oneself, Fixed-pie concept – winner vs. loser, Assume others want to behave competitively (expectation begets reality), Direct, confrontational communication style, Focus on economic value vs. relational capital.

2. NOOS – Not to Offend Others Strategy (Eastern Asians) – Expect that the individual subjugates their interest to those of the group, Tight culture: embedded in strong, multiplex social networks and low mobility, Follow duties and expectations of the group- One should be modest and avoid behaviors that threaten one’s reputation, Relational capital vs. economic capital, Strangers are considered “dangerous” – Focus on securing loyalty and commitment of the partner, Consider the overall context more thoroughly. Individual person as a conscious agent is less common, Default vs. Deviant Strategies (Less monitoring).


Communication process involves several steps: 1. Encode- select symbols with which to compose the message 2. Choose a channel- the carrier of communication 3. Decode- translate the symbols used for the purpose of interpreting its meaning 4. Feedback- two-way process.

Emotional intelligence – ability to perceive, express, and regulate emotions. 4 dimensions- self-awareness, social awareness, self-management, relationship management.


Communication networks:

Centralized communication- team communication through one individual to solve problems or make decisions, clear line of communication is maintained which can ensure transparency and consistency.

Decentralized communication- team communicating freely with each other and arriving at decisions together, teams can collaborate freely to solve problems, The freedom to control communication provides a team the ability to promote trust and transparency within itself.

Listening- Listening involves the skill of grasping facts as well as feelings to interpret a message’s genuine meaning, Is a vital link in the communication process.

Structural adaptation theory- flexible structures of communication that easily adapt to changes in the organization.

Grapevine method- a tool to encourage informal communication regarding suggestions and feedback, faster than formal channels, useful in crisis warning.

Crisis communication- stay calm, listen hard, be visible, get the bitter truth out, communicate future vision.

Communication and sustainability – Many organizations now publish a sustainability report, otherwise called a corporate social responsibility (CSR) report. Two important aspects of communication in sustainability: Need to communicate the organization’s policies, strategies, and activities relating to sustainability, ensure achievements are publicized.

Advance sustainability outcomes in the firm’s communication processes: Video conferences, Internet (VOIP), etc. are better than air travel on the environment (e.g., to use less paper), Also use technology to enable telecommuting.

Judgment and Decision Making

Programmed decisions- situations that have occurred multiple times have fixed rules that can be applied.

Non-programmed decisions- unique situations, uncertain and complex, strategic planning required.

Classical model- assumes that managers make logical, rational decisions in the organization’s best economic interests.

Attribution bias- tendency to attribute behaviors to a person’s personality rather than external factors of a situation.

Stereotyping – judging someone based on one’s perception of the group they belong to. Process- develop categories and assign traits, assign a person to a category based on observable info, assign category traits to the person.

Bounded rationality- a simplified model seeking “good enough” decisions rather than the best possible, Limits in time, energy, and money, Fast-and-frugal process of solving problems, Often has a minimum threshold.

Intuitive decision making – decisions based on personal experience not through deliberation or formal process, when you have experience with the problem, Pattern recognition, Cue recognition, No conscious deliberation, Automatic, Subconscious mental process, Difficult to study, difficult to know its effectiveness.

Representativeness- likelihood of a condition is judged by similarity to a condition, mitigating factors notwithstanding. Insensitivity to the prior probability of outcomes.

Availability heuristic – using the most easily accessible information to inform decision making.

Anchoring- depending heavily on an initial piece of information offered when making decisions.

Conformity- conforming to social norms

Improve decision making by – innovative decision making(brainstorming), use hard evidence( evidence based decision making), engage in debates, know when to pull the plug, do after action review.


Trait approach – identifies key traits that make someone an effective leader, doesn’t tell what leaders need to do

Behavioural approach – focus on what leaders do and how they act. Types-

Transformation leadership – motivate followers to strive towards higher goals or vision that transcends self-interests. 4 elements- Idealised influence (charismatic and trusted), inspiration motivation (present positive, appealing vision of future), intellectual simulation (stimulate creativity), individualised consideration (encourage and support).

Transactional – clarify roles and tasks, build structures, provide rewards. 3 types- contingent reward(exchanging resources for support), management by exception-active(monitoring performance and corrective actions), management by exception-passive( intervening only when problem is serious).

Ethical leadership – demonstrate appropriate and thoughtful conduct/principles

Servant leadership – prioritise serving the greater good, serve team and organisation over personal goals.

Laissez- faire – avoiding leadership responsibilities, hands-off and allow members to take decisions.

Authentic Leaders- know who they are, what they believe in and value, and act on those values openly and candidly, Primary quality is trust, Followers see them as ethical, Often has a life story

Ethical leaders- use ethical means to get followers to achieve their goals, and the goals themselves are ethical

Servant leaders go beyond their own self-interest to help followers grow

Situational model of leadership- Links the leader’s behavioural style with the task readiness of employees, Effective leaders adapt style according to the readiness level of subordinates, focused on the characteristics of followers, Four styles of leadership: telling style, delegating style, participating style, selling style.

Fiedler’s contingency theory – looks at different elements of the organisational situation, Assess when one leadership style is more effective than another, Considered a person’s leadership style to be relatively fixed and difficult to change. Suitability of a person’s leadership style is determined by situation-favourable or unfavourable, Favourability of a leadership situation can be analysed in terms of three elements:, quality of relationships between leader and followers, degree of task structure, extent to which the leader has formal authority over followers. Fielder found: Task-oriented leaders are more effective when the situation is either highly favourable or highly unfavourable, Relationship-oriented leaders are more effective in situations of moderate favourability.

Power – refers to the potential ability to influence the behaviour of others

Influence – refers to the effect that a person’s actions have on the attitudes, values, beliefs or behaviour of others

Organisational Culture

Organisation culture – common perception held by the organisation’s members, intangible and invisible, a system of shared meaning held be members, differentiates organisation.

Measurement- FOCUS questionnaire, OCI and OCAI.

Culture strength- strength is reflected in level of intensity with which values are held and the degree of consensus about assumptions, value and norms. Strong/tight culture is one where degree of congruence in values endorsed by members is high.

Visible elements- rituals, symbols, language, slogans, ceremonies, stories.

4 types cultures- adaptability (fast response and high risk decision making), achievement (results oriented), involvement (cooperation, consideration, equality), consistency (rational, orderly way of doing things).

Invisible elements – values, beliefs, assumptions, perceptions.