Appendix 1 Managing
History and Current Thinking
Target Skill
Comprehensive Management Skill: the ability to collectively apply concepts from various major management approaches to perform a manager’s job
Objectives
To help build my comprehensive management skill, when studying this appendix, I will attempt to acquire:
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An understanding of the classical approach to management
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Knowledge about the behavioral approach to management
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Insights about the management science approach to management
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Information about the contingency approach to management
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An understanding of the system approach to management
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Knowledge about the learning organization approach to management
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Challenge Case How Management Innovation Keeps Ford Moving Ahead
Ever since Ford Motor Company’s early years, innovative management has given the company a competitive edge. Ford introduced the Model T in 1908; it quickly became popular, but building it was expensive and slow. Because workers brought parts to a chassis remaining in one spot, it took more than 12 hours to put together each car. Henry Ford decided to set up the work differently: The chassis would be pulled along the floor to the parts and the workers. By 1914, improvements to the moving assembly line had trimmed the assembly time to 93 minutes per car.
But Ford saw more than a production process; he saw a new approach to managing workers. He used the efficiency gained from the assembly line to make working for the company more attractive so that workers would be less likely to quit. He more than doubled wages to $5 per day and shortened the nine-hour workday by an hour. He also set up training facilities where workers could learn to manage their money. Besides improving employee relations, these efforts made it possible for Ford’s workers to become Ford customers as well.
Years later, the founder’s son, Henry Ford II, also introduced management innovations. During World War II, the need to move people and materials around the world to win the war fueled the innovation of applying analytic methods to management problems. After the war, Ford brought the creators of the government’s management information system to his company so that they could apply their methods there. These “whiz kids” studied Ford’s informal record-keeping systems and set up formal financial methods and controls to help the company function more efficiently.
Today, Ford technology has entered the twenty-first century. Under the leadership of Ford’s current CEO, Alan Mulally, Ford is using computer technology and analytic tools to predict consumer preferences and precisely schedule production to meet that demand. Mulally also demonstrates modern thinking in the way he manages people: He sees his role as creating an environment in which everyone focuses on “moving the organization forward.” Employees are empowered to act when they see a problem. This includes management negotiating with union representatives to find ways to make facilities work more efficiently rather than simply closing unprofitable operations. In this environment, employees share in the organization’s successes. Ford recently reported strong earnings for the year and announced that employees would receive a record profit-sharing payment of more than $8,000 each.1
The Comprehensive Management Skill Challenge
The Challenge Case illustrates many different comprehensive management skill challenges that Ford Motor Company’s management must strive to overcome. For Ford to be successful, management must collectively apply insights from the classical, behavioral, management science, contingency, systems, and learning organization approaches to managing. The remaining material in this appendix explains these approaches and helps you develop your comprehensive management skill. After studying appendix concepts, read the Challenge Case Summary at the end of the appendix to gain insights about using comprehensive management skill at Ford.
Ford continues to move ahead under the leadership of CEO, Alan Mulally, by using twenty-first century technology and modern thinking in the management of its employees.
Mandel Ngan/Newscom
Chapter 1 focused primarily on defining management. This appendix presents various approaches to analyzing and reacting to management situations, each characterized by a different method of analysis and a different type of recommended action.
Over the years, a variety of different approaches to management have been developed, along with wide-ranging discussions of what each approach entails. In an attempt to simplify the discussion of the field of management without sacrificing significant information, Donnelly, Gibson, and Ivancevich combined the ideas of Koontz, O’Donnell, and Weihrich with those of Haynes and Massie and categorized three basic approaches to management:2
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Classical approach
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Behavioral approach
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Management science approach
The following sections build on the work of Donnelly, Gibson, and Ivancevich in presenting the classical, behavioral, and management science approaches to analyzing the management task. The contingency approach is discussed as a fourth primary approach, whereas the system approach is presented as a recent trend in management thinking. The learning organization approach is continually evolving and is discussed as the newest way to analyze management.