MODERN MANAGEMENT THEORIES

This presentation covers various modern management theories to be taught at MBA level.

1. MODE R N MANAGEMENT THEORIES THE LATEST OF EVOLUTION

2. Theories and approaches to explain management in modern era 2

3. 3 By: h ani i ful Wa h i b Su’u d (13 2 1003 9 ) Bimad anta Prako s a (13 2 10060) Iqbal Novramadani (13210063) Angg a Pratam a Put r a (1 3 21007 2 )

4. Definition 4 Modern : Relating to the present or recent times. Characterized by or using the most up-to-date techniques, equipment, etc. Management : The process of managing: administer and regulate (resources under one’s control). Theory (pl. Theories) : A supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained. A set of principles on which an activity is based. (Oxford Dictionary)

5. Modern Management Theories 5 1. System Approach ....................................................................................... 2. Quantitative Approach ................................................................................ 3. Total Quality Management Approach ........................................................ 4. Learning Organization Approach ............................................................... 5. Team Building Theory ............................................................................... 6. Chaos Theory ............................................................................................ 7. Open System Theory ................................................................................ 8. Contingency Theory/Approach ..................................................................

6. System Approach An organization is a system consisting four subsystems namely task, structure, people, and environment. The subsystems are interconnected and interdependent one another. Maintaining the balance. An organization is an open adaptive system which continuously interacts with its environment. Management regulates and modifies the system to optimize performance. An organization is more than just the aggregate of various parts. This is called ‘synergy’. Focus on the system. Modern Management Theories 6

7. Quantitative Approach Modern Management Theories 7 Management = decision-making. Organization = decision-making unit. Organizational efficiency depends upon the quality of managerial decisions. A problem is expressed in the form of a quantitative or mathematical model. The different variables in management can be quantified and expressed in the form of an equation.

8. Total Quality Management Approach “..by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces .“ – D r . W . E d w a r d s Deming Modern Management Theories 8

9. Total Quality Management Approach a) When people and organizations focus primarily on quality, defined by following ratio: quality tends to increase and costs fall over time b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time Modern Management Theories 9

10. Total Quality Management Approach Japan (1950-1960) US Navy (1985) US Navy (1985) Modern Management Theories 10

11. Plan-Do-Check-Act Modern Management Theories 11

12. Malcolm Bridge National Quality Award European Quality Award, Australian Quality Award, Canadian Quality Award, Deming Prize,etc Quality Award Modern Management Theories 12

13. Total Quality Mana g eme n t ISO 9000, Six Sigma, Lean Manufacturing Modern Management Theories 13

14. Learning Organization Approach “…..'learning organizations' are those organizations 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 continually learning to see the whole together .“ – Dr. Peter M. Senge Modern Management Theories 14

15. Knowledge management is the process of using intellectual capital for competitive advantage Portfolio of intellectual assets include: Patents Intellectual property rights Trade secrets Accumulated knowledge of the entire workforce Learning Organization & Knowledge Management Modern Management Theories 15

16. The Fifth Discipline Modern Management Theories 16

17. Learning Organization Approach Building a Learning Organiz a tion Team Learning System thinking (Systems Approach) Modern Management Theories 17 Shared Vision (Chaordic Organization) Challenging of Mental models (Classical/Management science) (Theory Z/Behavioral) Personal mastery (Theory Z/Behavioral)

18. Team Building Theory Modern Management Theories 18 What is a Team? A team is a small group of people with complementary skills , who work actively together to achieve a common purpose for which they hold themselves collectively accountable (Adair, 1986) A team is a workgroup or unit with a common purpose through which members develop mutual relationships for the achievement of goals/tasks. Teamwork, then, implies cooperative and coordinated effort by individuals working together in the interests of their common cause. It requires the sharing of talent and leadership, the playing of multiple roles (Harris , 1986)

19. Characteristic of a Team Modern Management Theories 19 (ii) (i) It is a group that has a job to do, whether as paid participants or as volunteers. It is a group that achieves cohesiveness It is a group with a common objective, whose members are very clear about working toward one purpose. It is a group whose members are interdependence. Team Building Theory

20. What is Team Building? Modern Management Theories 20 According to Cleland (1996), team building is the process of forming , growing , and improving the knowledge , skills and attitudes of individuals with different needs, backgrounds , and abilities into an integrated, high-performance team. Team Building Theory

21. Types of Team Building Theory Modern Management Theories 21 Beldin’s Team Role Theory Isabel Briggs-Myers’ MBTI Theory Jung’s Colour Works Theory Douglas McGregor X and Y Theory Abraham Maslow Hierarchy of Needs Theory Tajfel, Social Identity Theory John Adair Leadership Theory Tuckman’s Theory of Group Development Team Building Theory

22. Team Building Theory Belbin’s Nine Team Roles Modern Management Theories 22

23. Myers-Brigss Type Indicator (MBTI) Modern Management Theories 23 Team Building Theory Essentially within the MBTI, there are 16 types and a survey will tell individuals which type they are most like. Four dichotomies Extrovert / Introvert (E/I) Sensation / Intuition (S/N) Thinking / Feeling (T/F) Judging / Perceiving (J/P)

24. Myers-Brigss Type Indicator (MBTI) Team Building Theory Modern Management Theories 24

25. Colour Works Theory Team Building Theory The Colour Works uses a psychological model of behaviours that helps teams to understand similarities and differences in order to become more effective. How does it work? We are all made up of 4 distinct colour energies of behaviour, each of which has distinct characteristics. Forming 72-type, based on 8 Archetype: The Director , Motivator , Inspirer , Helper , Supporter , Co-Ordinator , Observer , Reformer Modern Management Theories 25

26. X and Y Theory Modern Management Theories 26 Team Building Theory Leaders and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition. A negative perspective on human behavior. Leaders and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization. A positive perspective on human behavior.

27. Maslow’s Hierarchy of Needs Team Building Theory Modern Management Theories 27

28. Social Identity Theory Modern Management Theories 28 Team Building Theory Social identity theory was developed by Henri Tajfel and John Turner in 1979.

29. Social Identity Process Modern Management Theories 29 Team Building Theory 1. Categorization: we categorize object in order to understand them and identify them. Similarly, we categorize people (including ourselves) in order to understand the social environment. We use social categories like Black, White, Christian, Muslim, Student, Bus drivers because they are useful. So if we can assign people to a category then that tells us things about those people. Similarly we can find out things about ourselves by knowing what categories we belong to. The norms of groups also tell us about appropriate behaviours of individuals in the group.

30. Social Identity Process Modern Management Theories 30 Team Building Theory 2. Social identification: We adopt the identity of the group we have categorized ourselves as belonging to. For example if you have categorized yourself as a student, the chances are, you will adopt the identity of a student and belonging to act in the ways you believe students act (and conform to the norms of the group). There will be an emotional significance to your identification with a group, and yourself esteem will become bound up with group membership.

31. Social Identity Process Modern Management Theories 31 Team Building Theory 3. Social comparison: Once we have categorized ourselves as part of a group and have identified with that group, we then tend to compare that group with other groups. If our self-esteem is to be maintained our group needs to compare favourably with other groups. If two groups have identify themselves as rivals they are forced to compete in order for the members to maintain their self-esteem.

32. John Adair’s Action-Centered Leadership Team Building Theory Adair approached leadership from a more practical and simple angle; by describing what leaders have to do and the actions they need to take. John Adair's Action-Centred Leadership model is represented by Adair's 'three circles' diagram, which illustrates Adair's three core management responsibilities. Modern Management Theories 32

33. Tuckman’s Theory of Team Development Modern Management Theories 33 Team Building Theory Bruce Tuckman first published this model of team development in 1965. It is effectively a theory of how teams develop from the very start of a project to the end. It describes four main stages, although he added a fifth stage (adjourning) later in his career.

34. Tuckman’s Theory of Team Development Modern Management Theories 34 Team Building Theory

35. Chaos Theory Modern Management Theories 35 First stated by Edward Lorentz in 1960s. Introduced by James A. Yorke and his partners as a new paradigm in 1975 (Yorke, 1975) Dr. Kellert (1993) defines Chaos Theory as a qualitative study of unstable aperiodic behavior in deterministic nonlinear dynamical systems (p.2).

36. Chaos Theory Modern Management Theories 36 Chaos theory wasn't "first published' - like most theories it evolved over time - however this is an exact statement: "sensitive dependence on initial conditions" This is the statement they used before the term "chaos theory" came into popular speech. It means that systems can be greatly affected by tiny changes in initial conditions, that would have normally been thought of as so small they could be neglected.

37. Chaos Theory Chaos theory is a promising framework that accounts for the dynamic evolution of industries and the complex interactions among industry actors. By conceptualizing industries as chaotic systems, a number of managerial implications can be developed. Long-term forecasting is almost impossible for chaotic systems, and dramatic change can occur unexpectedly; as a result, flexibility and adaptiveness are essential for organizations to survive. Nevertheless, chaotic systems exhibit a degree of order, enabling short-term forecasting to be undertaken and underlying patterns can be discerned. Modern Management Theories 37

38. Open System Theory System Input Environtment: Goal Output F ee d back Modern Management Theories 38

39. Open System Diagram Modern Management Theories 39

40. Notable Persons Modern Management Theories 40 Daniel Katz, Robert L. Khan, Richard A. Johnson.

41. Contingency Theory/Approach S Y S TEM Cu l tu r e Technology Government Economy Geography Demography Modern Management Theories 41

42. Notable Persons G.M. Stalker Tom Burns Joan Woodward Paul R. Lawrence L . W . Lo r sc h. Theory Developed Organic Organization Modern Management Theories 42

43. Conclusion 43 System Approach, Quantitative Approach, Total Quality Management Approach, Learning Organization Approach, Team Building Theory, Chaos Theory, Contingency Theory/Approach, Open System Theory are included into modern management theories because these theories were developed in late 20 th century (after 1950) and haven’t found yet in the classical and ne o - cla s s i ca l e r a.

44. Conclusion 44 Strength: The organization can survive many different situation The organization will be more adaptive to change by predictions C o nt i n u o u s Impr o vem e nt Solve co m p l e x a n d d e ta i l p r o b l e m Weakness: H a r d t o un d e r stand N e e d a d v a n c e m a t h a n d mo d e l l ing

45. Re ferences Gomez-Meija dan Balkin, Management, McGraw Hill, New York, 2002. Sch e r m e r h o r n , Ma n ag e ment, Joh n Wi l e y & Sons, US A , 20 1 A Comparative Analysis of National and Regional Quality Awards, Robert Vok u r k a s et.a l . The Fifth Discipline, Peter Michael Senge, http://www.slideshare.net/Gambari/perspective-of-civil-service-on-team- building http://www.faculty.umb.edu/david_levy/smj94.pdf http://en.wikipedia.org/wiki/Chaos_theory 45

46. Re ferences 46 Dr.M. Thenmozhi, EVOLUTION OF MANAGEMENT THEORY http://managementlearningcenter.blogspot.com/2012/09/modern- management-theory-in-principle.html http://www.healthknowledge.org.uk/public-health-textbook/organisation- management/5c-management-change/basic-management-models http://www.referenceforbusiness.com/management/Comp- De/Contingency-Approach-to-Management.html

47. Question and Answer Session