From traditional
management to strategic management: How Modern approaches to Management compare
with the traditional approaches of the Scientific Management and Human
Relations thought
By Juma CJO
Strategic management constitutes the modern concept
of modern management where focus is on identifying or developing resources and
capabilities that can yield a competitive advantage under different
environmental circumstance. It is no longer just about controlling the
exploitation of resource. It emphasizes synergy and incorporates aspects such
as employee management in a manner that was not emphasized in the past.
The concept of management has evolved over time
through various distinct stages to the modern day approaches to management.
These modern practices have evolved in order to meet the needs of the
organizations operating in the increasingly volatile global environment leading
to emergence of strategic management as a popular field. The concept of
management is increasingly gaining prominence at the corporate strategy level
of organizations with the executives seeking to find ways of remaining
competitive and where possible gain a strategic advantage over other market
players (Head, 2005). Management is therefore no longer viewed as a separate
function of the organizations but as a pillar that can ensure the success of
the organization. One of the earliest schools of management was the classical
school of management which dominated societal thinking between the 1880s and
the 1940s (Wren, 1987). This school consisted of scientific management (1880s),
bureaucratic management (1940s), and administrative management (1940s) (Wren,
1987). This school was succeeded by the behavioral school which was very
popular in the period between the 1930s and the 1950s (Wren, 1987). This school
could be summed into two distinct approaches to management namely the human
relations (1930s) and the behavioral science (1950s) (Wren, 1987). The
behavioral school gave way to the quantitative school which was dominant
between the 1940s and the 1970s through the theories of management science and
operations management in the 1940s, and management information systems between
the 1950s and the 1970s (Wren, 1987). The remaining two schools remain dominant
to date and form what can arguably be referred to as the modern approaches to
management when put together with the contemporary schools of management. These
schools include the Systems School which was developed in the 1950s and the
contingency theory which developed in the 1960s (Wren, 1987). The systems
school views the organizations as systems that are used to create outputs using
inputs while constantly interacting with the environment. On the other hand,
the contingency theory advocates for application of management principles based
on the unique circumstances of the organizations at any given time.
The traditional schools of management include some
of the earliest forms of management thoughts that dominated the work
environments between the late 19th century and the mid-20th
century. The earliest schools of management include the classical school of
management and the behavioral school of management which have been represented
by the scientific management theory and the human relations management thought
respectively (Beissinger, 1988). Scientific management emphasizes process,
efficiency and principles, while the human relations theory emphasizes the
significance of human behavior in the organization and the importance of
positive attitudes in fostering higher levels of job satisfaction which in turn
translate to higher productivity. While these two approaches may be tackled separately,
strategic management theory emphasizes the application of both approaches with
an aim of obtaining the best outcome achievable. These two theories essentially
cover the most crucial aspects of management in any organization.
Scientific management is part of the classical school
of management alongside the bureaucratic management and the administrative
management (Aitken, 1985). The scientific management model was developed to
meet the needs that were persistent in the typical work place in the late 19th
century. Management decisions were often arbitrary and the productivity of
workers was significantly low characterized by their slow pace when working.
The conflicts between the workers and the management were also rampant. The
main proponents of the scientific management model were Fredrick Taylor,
Lillian Gilbreth, Frank Gilbreth and Henry Gantt (Drury, 1915). This system was
introduced to bring about a revolution of though in the typical work place and
aimed at improving efficiency through the systematic study of the work under
observation (Drury, 1915). The system proposed a number of principles to be
applied in management. These included the study and application of scientific
methods to the tasks contained in various roles with the aim of improving the
efficiency of the workers. The system also proposed a reform of recruitment
processes that ensured recruits were scientifically selected to ensure that the
employees employed were fit for the job. It advocated for candid cooperation
between the management and the workers in a meaningful symbiotic relationship
and proposed that the managers be fully responsible for job design and planning
while the workers concentrate on implementation (Locke, 1982). The system also
introduced the concept of performance based financial incentives as well as the
setting of achievable but challenging targets for the workers. This aspect
remains central in the modern approach to strategic management with reward
power being viewed as key to motivating employees. The same applies to emphasis
on efficiency and clarity of processes. In a nutshell, scientific management
emphasized on a tripartite approach while comprised; process, efficiency and
principles (Locke, 1982). This early contribution to the management theory
would later serve as the pillar from which subsequent schools of management
would emanate.
Human relations thought is part of the behavioral
school of management which was developed to cover for the weaknesses of the
classical school of management by placing a special emphasis on human behavior
(Wren, 1987). The theory, which was developed as a result of extensive
experiments, concluded that human attitudes could affect their productivity
either positively or negatively (Mitcham, 2005). A second conclusion was that
the workplace could be equated to a social system consisting of informal groups
which bear great influence over the attitude and behavior of the employees. This
theoretical framework also laid emphasis on the style of management and
supervision stating that the styles embraced had a direct impact on the level
of job satisfaction of the employees (Hersey, Blanchard and Johnson, 2001). This system further advocated for
organizations to take steps to enable the employees to adjust to the
organization while fostering collaboration between the workers and the
management. The managers were therefore required to possess excellent
interpersonal skills that would enable them discern the causes for certain
behaviors by employees and motivate them to achieve the organization’s goals
(Donnelly, 2000). The focus was to ensure the highest levels of employee
satisfaction which would in turn translate into enhanced productivity. Unlike
the scientific management thought, the human relations thought focused on
communication, leadership, group behavior and motivation. This is key in
strategic management as it focuses on developing employees in a manner that can
convert them into the source of competitive advantage that most organizations
seek.
One of the main contributors to this thought was Fredrick
Herzberg and Abraham Maslow who developed the infamous needs hierarchy for
explaining employee behavior. Maslow came up with a theory that categorized the
needs that employees needed to satisfy in a hierarchy (Maslow, 1954). According
to Maslow, the employees would seek the satisfaction of the needs on the lower
side before seeking the satisfaction of the higher placed needs. For instance,
an employee who can barely feed would prioritize the need to earn a basic wage
that would enable him feed before he can seek to have his employment secured
and attend to other needs. The hierarchy progresses from the most basis needs
to as follows: physiological needs (food, shelter, and clothing), safety and
security needs (job security, insurance, health), love and belonging (need for
family, intimacy and need to be loved), self esteem (need for self respect and
to be valued by others), and self actualization (attainment of full potential)(Maslow,
1954). Fredrick Herzberg in his part developed a two-factor theory of
motivation (Mullins, 2004). This theory came up with two factors namely the
motivating factors and the hygiene factors. Motivating factors are those that
when introduced motivates employees to work harder. Hygiene factors do not
motivate but their absence would de-motivate the workers (Mullins, 2004).
Unlike the scientific management approach which views wages as a motivating
factor, this theory categorizes wages as a hygiene factor. It argues that once
the job is acquired, the pay stops being a motivator. In its absence, the
employee would be de-motivated but it cannot in itself motivate the employee
(Mullins, 2004). The two-factor theory identifies the motivating factors as
recognition, promotion, job enlargement, job enrichment, and job empowerment
among others. In strategic management, these motivation theories are central to
the process of ensuring that the uniqueness and potential of each employee is
tapped and used to the advantage of the organization.
The modern approaches to management comprise the
collection of strategic management theories that dominate organizational
management in current times. Some of these approaches bear their roots in the
1950s and the 1960s and continue to be dominant in the management circles to
date (Wren, 1987). The systems school views the organization as a collection of
systems whose key function is to transform inputs into outputs while in
constant interactions with the external environment. It brings focus on the
organization’s various functions and the importance of ensuring that the
different components function in a synergy that ensures that the overall
outcome of the organization is up to expectations (Lewis, Stephen and Patricia,
1998). The system comprises four major components namely the inputs, the
transformation process, the output and the feedback. The thinking behind
strategic thinking in modern practice is dominated by the principal focus of
this theory which emphasizes the importance of the organization functioning as
a unit with all the components functioning in a synergy that enables them to
create a competitive advantage over other market players.
The contingency theory refers to the variability of
situations that require managers to embrace different management techniques for
the varying circumstances (Mullins, 2004). This theory reckons that there is no
strategic management blue print that can be applicable to all scenarios in an
organization. The managers are therefore required to carry out a situation
analysis and formulate systems that would enable them to handle such situations
in the best way possible. The factors to be considered may include the nature
of products needed, the level of expertise of the workers, the level of
competition and other environmental factors, the level of resources at the
organization’s disposal, and the prevailing organizational challenges among
others (Mullins, 2004).
Several theories explaining the existence of
organizations have also played a major role in influencing the strategic management
thought in modern times. One such theory is the resource-based theory which
visualizes the organization as a collection of resources which must be pooled
together in order to realize the organizational goals (Raduan, et al, 2009). This view describes the
resources as both human and non-human assets that the organization possesses
and is able to exercise control over. These resources need to be coordinated in
a manner that enhances some level of synergy that enables the highest possible
output from these resources. The increasing volatility of the business
environment has also raised concerns among executives on their ability to
ensure profitability through the application of more efficient exploitation of
their resources (Raduan, et al, 2009).
This has focused attention on internal processes and the importance of
minimization of waste in order to ensure profitability. This approach is
necessitated by the fact that the increasing competition limits the
organization’s ability to ensure profitability through pricing.
The application of corporate strategy and strategic
management also plays a crucial role in determining the management approach
taken by the business executives and managers (Sheldrake, 2003). The standard
approach to strategic management involves the analysis of the business position
in the environment before embarking on a strategic management process that
distinguishes the organization from other organizations. The most common
evaluation models involve the porter’s five forces model which evaluates the
organization’s relative strength in relation to competitors, customers, and
suppliers (Raduan, et al, 2009). The
PESTEL analysis model is important in evaluating the external environment in
which the organization operates. It considers the political factors, economic
factors, social factors, technological factors, environmental factors, and
legal factors (Raduan, et al, 2009).
The micro and macro analysis of the environment therefore becomes the backbone
on which other strategic management processes are hinged. For instance, the
organization may need to decide on whether or not to differentiate their
products. The competitive advantage can also be created using innovative
business processes and office layout. This is evident in the UK fashion
industry where market players seek to outdo each other in developing the most
convenient and attractive office layouts while ensuring that the purchasing
process is as simple as possible (Sheldrake, 2003). The simplicity of the
process tends to be a point of attraction for clients in the service industry
on a global scale.
The approach to strategic management in most
organization also focuses on the efficiency and effectiveness of logistics
involved in the production process (Raduan, et
al, 2009). The popularity of the concept of total quality management (TQM)
underscores this point. This approach aims to ensure that the resources are
utilized to the optimum and at the highest efficiency levels. TQM has been
known to greatly contribute to the good performance of the organizations where
properly implemented (Raduan, et al,
2009). This concept has been modified by organizations engaging in retail
business which aim to control their retail logistics with the aim of minimizing
unnecessary losses and thereby boost the profitability of the organizations.
With the realization that human resources can
potentially be a source of competitive advantage for organizations,
considerable emphasis has been placed in developing a highly competent and
motivated workforce that understands their role in delivering the strategic
objectives of the organizations (Raduan, et
al, 2009). Motivating factors such as performance-based financial
incentives, transparent promotion regulations, job enrichment, job empowerment
and other measures are continuously taking center stage in the human resource
practices. The human element in any organization is perhaps the most crucial
element. This explains the recent popularity of the concept of ‘fit’ in human
resource management where the human resources are part and parcel of the
organizational strategy (Warner, 1994). This ‘fit’ implies the need to aligh
human resource management policies to the overall approach to strategic
management in the organization. The involvement of workers in the strategy
formation and implementation process has been known to yield superior results
as the workers feel obligated to honor the commitments made during the strategy
formulation process.
The constant and fast evolution of technology puts
the organizations in danger of losing their competitive edge where such
technological advancements render their products obsolete (Raduan, et al, 2009). Organizations are
therefore increasing embracing the culture of the Learning organization where
all members of the organization are involved in identifying emerging trends and
sharing the same with their colleagues with the aim of ensuring that prompt and
quick adjustments are made. This approach lays profound responsibility of the
employees who are tasked to remain abreast with the developments in the
industries and global changes. Accordingly, organizations are giving these peer
groups the lead in spearheading the proposed amendments and are able to keep
the employees’ morale at soaring levels using these peer groups (Warner, 1994).
This management perspective has proven to be revolutionary especially in
organizations that are technology based.
How modern management approaches
compare to the traditional approaches
Modern approaches tend to reinforce rather than
weaken the traditional approaches to management (Mullins, 2005). For instance,
the scientific method focuses on efficiency of production processes, the
motivation of the employees through the offering of performance based pay and
the observance of strict principles. This view is reinforced by the modern
approach to strategic management which emphasizes the importance of focusing on
internal processes in order to remain competitive in the increasingly
competitive business environment (Sheldrake, 2003). The concepts of Total
Quality Management run in consonance with the aims of the scientific model when
it singles out the production processes and the importance of ensuring
effectiveness and efficiency of production during all the stages of the process
(Donnelly, 2000). This internal approach of the scientific management model has
been extrapolated to include various other processes business functions. For
instance, business organizations conduct cautious marketing campaigns while
remaining keen to ensure that the process is as economical as possible. The
effect of such campaigns is also weighed to ensure that the organizations
realize value for money at the end of such endeavors. The resource based view
of the organization and the systems theory further reinforce the scientific by
emphasizing the importance of processes and their coordination in the
organization (Raduan, et al, 2009).
This is however done with an improvement on the traditional model where the
organization is visualized as a collection of systems that must be synchronized
for the organization to run efficiently. The traditional model had initially
concentrated on production processes while the modern view visualizes all the
functions of the organization as an essential part of the system. The emphasis
on proper recruitment also resonates with the modern day practices where
organizations are keen to recruit persons that are qualified and highly
talented in order to execute their duties with a rare brilliance (Hersey,
Blanchard and Johnson, 2001). The development of scientific personality tests
in addition to oral interviews further enriches this requirement of the
scientific management outlook.
The human relations thought has been the backbone of
the employee motivational approaches in modern times (Warner, 1994). The
insight from the Maslow’s hierarchy and the Herzberg’s two fact theory continue
to form the basis for the motivational schemes across the organization. The
enrichment provided by modern management practices is the benefit of
incorporation of the staff into the strategy implementation of the
organization. In addition to remuneration systems that recognize performance most
organizations engage in job enrichment and development exercises that are aimed
at making the jobs more fulfilling and challenging for the employees (Hersey,
Blanchard and Johnson, 2001). The focus on employee motivation is in
recognition of their strategic importance in ensuring high performance in
organizations.
The ancient approaches to management namely the
scientific approach and the human relations thought can be described as the
sources of the modern day management thought. While the scientific management
theory focus on the efficiency of the production process and the motivation of the
worker, the human relations thought emphasizes on the importance of behavioral
elements in employee satisfaction and consequently the levels of satisfaction.
The combination of these two traditional models therefore covers the most
important aspects of management albeit in a retracted form. The modern
approaches to management tend to build onto these provisions by providing
meaningful insights that enable management practices to be relevant and more
effective in the modern day. A good illustration is the comparison between the
human relations thought and the modern day approach to human resource
management as illustrated above. The conveyor belt production which is still
common can also be traced to the scientific model. It therefore must be
concluded that modern approaches to management reinforce rather than repudiate
the traditional approaches to management.
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