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/WENTIETH CENTURY MANAGEMENT THEORY

By

Rita Schuler Rood

//

A PROBLEM

Submitted to
the Dean of the College of Home Economics
of Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE
Department of Institution Administration

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TABLE OF CONTENTS

PREFACE O O O O I O O O O O O O O O O
TWENTIETH CENTURY MANAGEMENT THEORY .

Overview of Management Theory:

I9lO-l962

Development of Management Theory: l958-l962 .

MANAGEMENT LITERATURE TRENDS: l952-I962 . . . .

BIBLIOGRAPHY . . . . . . . . . . . .

PREFACE

Present-day trends and developments in organization discussed in
this paper are based on articles published in two journals between the

years l952-I962, the Harvard Business Review and Administrative Science

 

Quarterly. The literature contained information on administration and
management problems, operational problems and new developments, research
findings, and the need for a theory of management. These general trends
and relating factors are summarized and may be of help to the admin-
istrative dietitian in her interpretation of management literature.

The author is indebted to Professor Katherine Hart for her guidance

in the preparation of the manuscript.

LIST OF EXHIBITS

Exhibit Page

I. Percentage distribution of references by three
management areas for Harvard Business Review,
l952-l962 and Administrative Science anrterly,
I956-l962 . . . . . . . . . . . . . . . . . . . . . . . . l2

 

 

2. Management literature trends, l952—l962, based
on articles presented in Harvard Business
Review, l952-l962 and Administrative Science

Quarterly, l956-l962 . . . . . . . . . . . . . . . . . . l3

 

 

TWENTIETH CENTURY MANAGEMENT THEORY

Evidence of an interest in the problems of management appeared in
the United States after the turn of this century. During the following
years, the subject of management was given more attention, and literature
on the activities in organizations began to appear.

Social scientists became engrossed with the problem of management
during the 1930's. Publication of books and periodicals devoted to all
management areas has increased each succeeding year. In I958 Boulding (8)
found that the contributors to the first two issues of the Administrative

Science Quarterly represented nine fields of competence: administration,

 

.business administration, economics, political science, psychology, public

administration, social anthropology, social psychology, and sociology.
The following overview presents a summary of factors related to

management theory as presented in the Harvard Business Review, l952-l962,

and the Administrative Science Qparterly, l956-l962.

Overview of Management Theory: l9lO-l962

The publication of views held by management practitioners accompanied
the development of industry in the United States. Scientific management
or the traditional theory of management was the term applied in I9l0 to
these first writings on the subject. As organizations grew and their
equity passed from the original owners, management became more complex
and competition created a need for efficient operation.

I

In an effort to improve organizational performance after World War I,
management became cognizant of the unanticipated consequences of organ-
izations: workers' feelings, beliefs, perceptions, ideas, and sentiments.
This awareness contributed to the development of the human relations
theory during the 1930's. The major assumption of this theory was that
man could be motivated to work more productively if certain socio-
psychological needs were filled.

Concern with the principles of human relations expanded during the
I9h0's. Training programs were developed to help management understand
and apply the principles of human relations. In a discussion of the value
of the training programs published in I956, Katz (26) explained that some
critics did not consider the programs satisfactory because of a failure
to realize the limitations of any training. He said the pitfalls in
human relations training programs may be due to the presence of unsure
and unsound leadership at the top management levels, the lack of clear
objectives, or the unquestioning use of fad techniques.

In a progress report on human relations, Whyte (70) identified
three new developments: I) workers are motivated by factors other than
economic incentives, 2) workers do not respond as isolated individuals,
and 3) extreme functionalization does not necessarily make the most
efficient operation. Whyte also stated that social scientists recognized
an intimate connection between technical and structural change and human
relations. He added that after research has identified the behavior
patterns which accompany environmental change, new management principles
can be developed which will permit greater achievement in organizations.

In an evaluation of human relations, Schoen (58) expressed the view

that the principles of human relations proved workable under the following

conditions: when they were not concerned with making everyone happy or
sugar coating harsh reality, and when human relations and clinical
orientation were not equated in toto with the job of management or
executive leadership.

Although the human relations philosophy of management was filling
the needs of many organizations, some authors indicated a desire for
change in management practices. In an address delivered in June, I957,
Pusey (52) aptly described this feeling with the following statement:

. . . Important background changes and trends which are

taking place in our economy must be taken into account in

redefining managerial philosophy. . . . This does not mean

that the old purposes and values on which private enterprise

is built must be discarded in favor of entirely new concepts,

but rather, the best of the old incorporated into the new

but differentiated further and adapted to new situations and

conditions. So too, our business thinking evolves to a more

sensitive and highly integrated set of meanings and purposes

which form a sounder basis for meeting the conditions and

dynamics of our American independent society.

The impact of change and its possible ramifications were stressed
by Ohmann (Ah) in I957. In a study of managerial effectiveness over a
period of ten years, he found the most crucial determinants of success
were the manager's conception of his role and the quality of his personal
values. Ohmann cited similar observations made by Teele of Harvard
Business School; Teele's contention was that a manager's basic attitudes
were more important than the techniques used. Teele also predicted that

the time may come when a man with no clear sense of values may not be an

effective administrator.

 

lN. Pusey, 'Whe University Eighty Years Later,” Harvard Business
Review, XXXV (July-August, I957), p. 5l.

Collective bargaining had been a potent force on the economy in the
United States since the I930's. The impact of automation during the past
decade, although one of the most recent changes in industry, probably
represents one of the most powerful influences on managerial philosophy
since the industrial revolution. Both innovations helped to minimize
the personal characteristic of work and lessen the worker's job involvement.

The social, economic, and technological changes in industry contrib-
uted to the need for effective communications, training, and management
development. These were the areas of concern discussed in management
literature during the l950's (23, 32, 54).

During the mid-century decade techniques and effectiveness of the
communication processes were studied by the social scientists (55). The
importance of effective communication was stressed by Saltonstall (57)
at a meeting of personnel workers in I953. He pointed out that one
management's effort to provide security for workers resulted in manage-
ment learning that the planned benefits were not viewed as security
factors by the workers. Whyte (69) reported that the importance of
economic incentives was dependent on the worker's environment.

During the early l950's management authorities were concerned with
the position of foreman or first-line supervisor. This middle management
employee was often subjected to pressures from union demands, workers'
needs, and management's conflicting expectations. The authorities recog-V
nized the need for developing the supervisor's human relations skills, but
they did not agree on what made effective training programs (32, 62).

Information on electronic developments which would prove valuable to
organizations appeared in the literature by I956. Use of this new equip-

ment often required the hiring of technically trained personnel and the

making of personnel adjustments to permit economical use of these costly
employees (I7, 67). Savings of time and labor in the handling of routine
procedures were benefits gained from mechanized decision-making equipment.

In I956 management literature contained a new term, “operations
research.” This referred to the use of scientific methods, tools, and
techniques in the search for information and alternatives which form the
basis for IIoptimal solutions” to management problems (9). Dean (l5)
stated that the ready access of statistical information provided by the
computer proved especially valuable in the determination of trends and
control curves needed for planning changes and company programs.

To help solve a persistent problem often discussed in management
literature, the scarcity of people with executive and decision-making
ability (Al, #6, 60), the business or management game was developed.

This tool, which appeared on the market during I959, was designed to pro-
vide potential or present administrators with the necessary information
and opportunity to develop decision-making skills without the hazards
present in the business world. The results of the participant's actions
can be projected, analyzed, and evaluated by the players with the help

of the observers, and statistical information, to determine which course
of action would best achieve the desired goals.

The use of human relations principles, the contributions from social
science research, the changes in our society and in the labor market, the
technological and electronic developments, and the progress made in
management training and development--all these have contributed to the
need for the development of a theory of management. These same factors
have also provided management authorities with the valuable experience
and knowledge to realize some of the demands which may be made of a theory

of management.

Development of Management Theory: I958-I962

During the years I958 to I962, management literature indicated the
need for social scientists to develop a theory of human organization.

Prethus (SI), editor of the Administrative Science Quarterly, stated that

 

management was an art which could be improved by the discovery, under-
standing, and proper application of theory by those who knew how to use
it. He pointed out that writers who proposed that theory and fact were
diametrically opposed have overlooked the truth that good theory improves
practice. Bennis (5) stated that theorists should not be discouraged by
the deluge of conflicting opinions on management because controversy was
often a sign of development.

A discussion of the need for a theory of management by Koontz (3l)
indicated the first step in the development of the theory must follow
definition of the management field. He specified that the explication
should limit the field of management by indicating operations research,
accounting, economic theory, sociometry, and psychology furnish signifi-
cant tools for management's use, but that these should not be considered
part of the management field. This delimitation of the theory would
recognize that management is part of a larger universe of knowledge and
inquiry and would deal with a definitive area of information.

Koontz further specified that a theory of management should be
presented with no semantic obstacles, should be useful in improving
management practice--be focused on the tasks and needs of the executive,
and should give direction and efficiency to management research and
teaching. This author also emphasized the fact that management theory
should not be limited to business enterprise, but it should be applicable

to other kinds of organized human activity such as schools, voluntary

 

associations, unions, hospitals, governmental agencies, and scientific
and professional organizations. 'Each of the organizations may use
different procedures but the basic theory of management should be of
value to all.

In the introduction to a volume of reports by leading management
authorities, Haire (86) suggested that an investigation of management
could begin with the study of any major area in the organization. The
independent variables include the structure of the organization--linkage
for reporting responsibility, degree of centralization and hierarchical
levels; the behavior in organization with an analysis of motives,
activities, and interactions; and the conflict between the demands of
individual personalities and the organization. Haire identified the
decision and communication processes, and the specific tasks of the
organization as mediating factors which could also be treated as inde-
pendent variables, and, to some degree, causal. The continual existence
and productive efficiency of the group constitute the dependent
variables.

Likert (35, 36, 90) published research findings which indicated the
need for change in management philosophy. He and his co-workers found
successful administrators and supervisors used methods of operation
which differed from accepted management practices. For example, the
tools of scientific management were used with mutual influence systems
which encouraged integration, coordination, and added to motivation. In
addition to these changes, Likert recommended the use of newly developed
measurement devices which would enable the evaluation of production
capacity and human dimensions--motivation of members, effectiveness of

communications, and adequacy of decision-making processes.

An explication by Bennis (6) in the Harvard Business Review cited

 

three authors he called “revisionists.” These men attempted to reconcile
or show points of conflict between traditional theory and the human
relations philosophy of management. Bennis said their modifications
probably developed because of the following factors:

I) New research findings-~particularly the fact that no positive
relationship was found between human factors and criterion
variables of productivity and effectiveness.

2) Recognition of I'reality factors.” Organization theory was
again concerned with the task, cognitive power of the
individual, reality of formal status, power differentials,
and recognition that formally designated leadership has to
”aCt.”

3) Change in the Zeitgeist. Revisionists showed concern for
external economic factors--productivity and formal status--
but not to the exclusion of the human elements which tradi-
tional theorists neglected.

McGregor (37, 92), an early advocate of the human relations philos-
ophy and one of the revisionists described by Bennis, was said to have
become dissatisfied with human relations during a period when he was
active as a top administrator of a large institution. Abnegation of
responsibility at the top level of organization was given as the prin-
ciple cause for McGregor's disenchantment. His revised philosophy
stressed integration of task requirements with individual growth, role
incumbency, personal factors, coercion, and external rewards and punish-
ments. McGregor encompassed the problem of task requirements with the
trading, negotiation, and accommodations necessary to realize true
integration of management and employee goals.

McMurry (38, 93), head of a business consultation firm and a
psychologist, said he believed that consultative management was the

preferable type of management, but it was not practical or congruent

with the way personalities function. Conflict between man and

organization was resolved by McMurry postulating man's needs as those
which appear compatible with a highly controlled hierarchy. He stated
that man wants to be dependent, is incapable of taking responsibility,
and needs a strong leader. This philosophy was termed ”pessimistic
revolution” by Bennis because it implied that man's needs are fixed and
immutable. Bennis explained that even Freud, a known pessimist, believed
that there was no indication man could not change.

The third revisionist cited by Bennis was Argyris (2, 3, 4, 7#) who
proposed the thesis, based on extensive research, that the needs of the
individual and formal organization were basically incompatible. His
contention was that the outcome of this frustration can be observed
through a variety of defense mechanisms and other pathological behavior
on the part of the individual. Ultimately, the frustration is said to
lead to the attenuation of organization goals and employee mental health.

Argyris suggested two solutions for this dilemma: the use of a new
input of individuals who do not aspire to be healthy, mature adults or a
change in the nature of formal organization structure, directive leader-
ship, and management controls. Job or role enlargement was given as an
effective method to change the organization structure and individual
centered leadership was given as a method to modify directive leader-
ship. These two changes were said to be ineffective if resistance had
been firmly entrenched in the organization structure and the self-concept
of individuals. When this difficulty was encountered, Argyris stated
that the use of reality centered leadership often proved to be helpful.

Haire (86) observed that many management authorities viewed conflict
between organization and workers as undesirable. He proposed that small

amounts of hostility often act as a stimulus to organization. Haire

I0

cited one authority who observed that bonds of cohesion strengthened at
the point of stress and another who reported that growth and development
occurred in the area of conflict.

A tremendous amount of investigation and work have been done in an
effort to develop a theory of management. Reported information and con-
clusions vary widely and often conflict with one another. This does not
mean that the research studies and organization experiences are not valid
or useful. It indicates, however, that a variety of approaches were used
by those interested in the problem of management and suggests that the
context in which a management theory has been conceived may still be too
narrow. A broad unifying concept of management may eventually be
developed which will show how the conflicting data can be fitted into
a single meaningful picture.

The subjects covered and the relative importance of the various
management areas in the literature reviewed are summarized and discussed

in the final section of this study.

MANAGEMENT LITERATURE TRENDS: l952-l962

The literature surveyed in the Harvard Business Review, l952-l962,

and the Administrative Science Quarterly, I956-I962, consisted of 7l

 

articles which made lI7 references to organization and management. The
author arbitrarily grouped the articles into three management areas:
administration and management (38 references); operational problems and
new developments (39 references); and research and management theory
(ho references).

The number of reviewed articles varied from year to year, and the
amount of interest shown in the areas of management shifted during
successive years. Exhibit I shows the number and percentage of refer-
ences devoted to three management areas in the Harvard Business Review
(I952-l962) and Administrative Science anrterly (I956-I962). Exhibit 2
illustrates management literature trends during this ten year period.

The percentage of references devoted to administration and manage-
ment activities was low and remained relatively unchanged during the
period of this study. Haire (86) suggested that administration and
management activities may have been neglected because undue amounts of
attention were focused on the traditional wage earner, especially in
large organizations where automation decreased the number of laborers
and increased the total technicians.

Exhibit 2 indicates that article references in the two periodicals
during the first five years of the survey, I952-l956, were largely
devoted to operational problems and new developments. This trend changed

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EXHIBIT 2.--Management literature trends, l952-l962, based on articles
presented in Harvard Business Review, l952-l962 and Administrative
Science Quarterly, I956-I962 '

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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I952 I953 195“ I955 I956 I957 I958 1959* I960 I96] 1962
Code:..--- Administration and Management

.... Operational Problems and New Developments
...- Research and Management Theory

Source of data: Exhibit l.

* References (three) for I959 were not included.

 

 

 

lh

in I957 and I958 when the percentage of literature dealing with this
area of management dropped to the lowest point for the ten year period.

These same two years, I957-I958, marked a period when a rapid
increase in published information related to research and management
theory was apparent. This area of management began to dominate the
literature, and references related to research and management theory
continued to receive the largest proportion of attention during the four
remaining years of the survey, I959-I962.

In Modern Organization Theogy Haire (86) called attention to the
shift of trends in management literature. He noted that in I959 a
complete text was published which was compiled from reports of the latest
work being done in the development of a theory of management. The very
term ”organization theory” would have appeared out of place in the
literature during the early fifties when literature was concerned with
relatively specific problems in organization and concepts closely
associated with operational procedures.

Progress toward the development of a theory of management since I952
has been significant. A new social science periodical, the Administra-

tive Science Quarterly, which was first published at the close of I956,

 

has continued to grow in scope and is making a notable contribution to
the management field. The current emphasis on the development of a
theory of management rather than on specific organizational problems is
evidence of a significant enlargement of management perspective. The
development of a theory of management which will move from extreme posi-
tions to balance and modulate with more refinement the human and

organizational requirements may not be far in the future.

 

l0.

ll.

I2.

13.

Rev., XXXIX (January-February, I96l), 26.

BIBLIOGRAPHY

I. Periodicals

Andlinger, G. G. ”Business Games--Play One!” Harvard Business Rev.,
XXXVI (September-October, I958), Ill-25.

 

 

 

 

Argyris, C. I'lndustry and Organization,” Administrative Sci. Quart.,
Il (June, I957), l-24.
. ”The Individual and Organization: An Empirical Test,”
Administrative Sci. Quart., IV (September, I959), l45-68.
|'Leadership Pattern in the Plant,” Harvard Business Rev.,
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