Management theory

MODERN MANAGEMENT
THEORIES
THE LATEST OF EVOLUTION

Theories and approaches to explain
management in modern era
2

By:
Haniiful Wahib Su’ud (13210039)
Bimadanta Prakosa (13210060)
Iqbal Novramadani (13210063)
Angga Pratama Putra (13210072)
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Definition
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) :
1. A supposition or a system of ideas intended to explain something,
especially one based on general principles independent of the thing to be
explained.
2. A set of principles on which an activity is based.
(Oxford Dictionary)
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Modern Management Theories
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 ..................................................................
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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.
6Modern Management Theories

Quantitative Approach
• 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.

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.“ –
Dr. W. Edwards Deming

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

• Japan (1950-1960)
• US Navy (1985)
• US Navy (1985)

Plan-Do-Check-Act

• Malcolm Bridge National Quality Award
• European Quality Award, Australian Quality Award, Canadian
Quality Award, Deming Prize,etc
Quality Award

Total Quality
Management
ISO 9000,
Six Sigma,
Lean Manufacturing

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

• 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

The Fifth Discipline

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

Team Building Theory
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)
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What is a Team?

Characteristic of a Team
(i) It is a group that has a job to do, whether as paid participants
or as volunteers.
(ii) It is a group that achieves cohesiveness
(iii) It is a group with a common objective, whose members are
very clear about working toward one purpose.
(iv) It is a group whose members are interdependence.
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What is Team Building?
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.
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Types of Team Building Theory
1. Beldin’s Team Role Theory
2. Isabel Briggs-Myers’ MBTI Theory
3. Jung’s Colour Works Theory
4. Douglas McGregor X and Y Theory
5. Abraham Maslow Hierarchy of Needs Theory
6. Tajfel, Social Identity Theory
7. John Adair Leadership Theory
8. Tuckman’s Theory of Group Development
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Belbin’s Nine Team Roles

Myers-Brigss Type Indicator (MBTI)
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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)

Myers-Brigss Type Indicator (MBTI)
24

Colour Works Theory
25
• 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

X and Y Theory
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• 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.

Maslow’s Hierarchy of Needs
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Social Identity Theory
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• Social identity theory was developed by Henri Tajfel and John
Turner in 1979.

Social Identity Process
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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.

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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.

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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.

John Adair’s Action-Centered Leadership
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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.

Tuckman’s Theory of Team Development
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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.

Tuckman’s Theory of Team Development
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Chaos Theory
• 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).

Chaos Theory
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.

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.

Open System Theory
System
Input
Environtment:
Goal
Output
Feedback

Open System Diagram

Notable Persons
• Daniel Katz,
• Robert L. Khan,
• Richard A. Johnson.

Contingency Theory/Approach
SYSTEMCulture
Technology
Government Economy
Geography
Demography

Notable Persons
• G.M. Stalker
• Tom Burns
• Joan Woodward
• Paul R. Lawrence
• L.W. Lorsch.
Theory Developed
• Organic Organization

Conclusion
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 20th century (after 1950) and haven’t found yet in the classical and
neo-classical era.
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Conclusion
Strength:
• The organization can survive many different situation
• The organization will be more adaptive to change by predictions
• Continuous Improvement
• Solve complex and detail problem
Weakness:
• Hard to understand
• Need advance math and modelling
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References
• Gomez-Meija dan Balkin, Management, McGraw Hill, New York, 2002.
• Schermerhorn, Management, John Wiley & Sons, USA, 2010
• A Comparative Analysis of National and Regional Quality Awards, Robert
Vokurkas et.al.
• 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
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References
• 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
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Management theory

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