Which approach calls for using management concepts and techniques in a situationally appropriate manner?

Appendix A: A Brief History of the Management Field
The Universal Process Approach
Henri Fayol’s Universal Management Process
Lessons from the Universal Process Approach
The Operational Approach
Frederick W. Taylor’s Scientific Management
Taylor’s Followers
The Quality Advocates
Lessons from the Operational Approach
The Behavioral Approach
The Human Relations Movement
Organizational Behavior
Lessons from the Behavioral Approach
The Systems Approach
Chester I. Barnard’s Early Systems Perspective
General Systems Theory
New Directions in Systems Thinking: Organizational Learning and Knowledge Management
Lessons from the Systems Approach
The Contingency Approach
Contingency Characteristics
Lessons from the Contingency Approach
Attributes of Excellence: A Modern Unconventional Approach
Eight Attributes of Excellence
A Critical Appraisal of the Excellence Approach
Lessons from the Excellence Approach
Terms to Understand
Endnotes
We can safely state that no single theory of management is universally accepted today. To provide a useful historical perspective that will guide our study of modern management, we shall discuss six different approaches to management in this appendix: (1) the universal process approach, (2) the operational approach, (3) the behavioral approach, (4) the systems approach, (5) the contingency approach, and (6) the attributes of excellence approach. Understanding these general approaches to the theory and practice of management can help you appreciate how management has evolved, where it is today, and where it appears to be headed.

The Universal Process Approach
The universal process approach is the oldest and one of the most popular approaches to management thought. It is also known as the universalist or functional approach. According to the universal process approach universal process approach
assumes that all organizations require the same rational management process, the administration of all organizations, public or private or large or small, requires the same rational process. The universalist approach is based on two main assumptions. First, although the purpose of organizations may vary (for example, business, government, education, or religion), a core management process remains the same across all organizations. Successful managers, therefore, are interchangeable among organizations of differing purposes. Second, the universal management process can be reduced to a set of separate functions and related principles. Early universal process writers emphasized the specialization of labor (who does what), the chain of command (who reports to whom), and authority (who is ultimately responsible for getting things done).

Henri Fayol’s Universal Management Process
In 1916, at the age of 75, Henri Fayol published his now classic book Administration Industrielle et G�n�rale, though it did not become widely known in Britain and the United States until an English translation became available in 1949.1 Despite its belated appearance in the English-speaking world and despite its having to compete with enthusiastic scientific management and human relations movements in the United States, Fayol’s work has left a permanent mark on twentieth-century management thinking.

Fayol was first an engineer and later a successful administrator in a large French mining and metallurgical concern, which is perhaps why he did not resort to theory in his pioneering management book. Rather, Fayol was a manager who attempted to translate his broad administrative experience into practical guidelines for the successful management of all types of organizations.

As we mentioned in Chapter 1, Fayol believed that the manager’s job could be divided into five functions, or areas, of managerial responsibility—planning, organizing, command, coordination, and control—that are essential to managerial success. (Some educators refer to them as the POC3 functions.) His 14 universal principles of management, as listed in Table A.1, were intended to show managers how to carry out their functional duties. Fayol’s functions and principles have withstood the test of time because of their widespread applicability. In spite of years of reformulation, rewording, expansion, and revision, Fayol’s original management functions still can be found in nearly all management texts. In fact, after an extensive review of studies of managerial work, a pair of management scholars concluded:

The classical functions still represent the most useful way of conceptualizing the manager’s job, especially for management education, and perhaps this is why it is still the most favored description of managerial work in current management textbooks. The classical functions provide clear and discrete methods of classifying the thousands of different activities that managers carry out and the techniques they use in terms of the functions they perform for the achievement of organizational goals.2

Table�1�

1. Division of work.
   Specialization of labor is necessary for organizational success.
2. Authority.
   The right to give orders must accompany responsibility.
3. Discipline.
   Obedience and respect help an organization run smoothly.
4. Unity of command.
   Each employee should receive orders from only one superior.
5. Unity of direction.
   The efforts of everyone in the organization should be coordinated and focused in the same direction.
6. Subordination of individual interests to the general interest.
   Resolving the tug of war between personal and organizational interests in favor of the organization is one of management’s greatest difficulties.
7. Remuneration.
   Employees should be paid fairly in accordance with their contribution.
8. Centralization.
   The relationship between centralization and decentralization is a matter of proportion; the optimum balance must be found for each organization.
9. Scalar chain.
   Subordinates should observe the formal chain of command unless expressly authorized by their respective superiors to communicate with each other.
10. Order.
    Both material things and people should be in their proper places.
11. Equity.
    Fairness that results from a combination of kindliness and justice will lead to devoted and loyal service.
12. Stability and tenure of personnel.
    People need time to learn their jobs.
13. Initiative.
    One of the greatest satisfactions is formulating and carrying out a plan.
14. Esprit de corps.
    Harmonious effort among individuals is the key to organizational success.

Source: Adapted from HenriFayol, General and Industrial Management, trans. Constance Storrs (London: Isaac Pitman & Sons, 1949). � 1949 by Lake Publishing Company. Reprinted by permission.

Lessons from the Universal Process Approach
Fayol’s main contribution to management thought was to show how the complex management process can be separated into interdependent areas of responsibility, or functions. Fayol’s contention that management is a continuous process beginning with planning and ending with controlling also remains popular today. Contemporary adaptations of Fayol’s functions offer students of management a useful framework for analyzing the management process. But as we mentioned in Chapter 1, this sort of rigid functional approach has been criticized for creating the impression that the management process is more rational and orderly than it really is. Fayol’s functions, therefore, form a skeleton that needs to be fleshed out with concepts, techniques, and situational refinements from more modern approaches. The functional approach is useful because it specifies what managers should do, but the other approaches help explain why and how.

The Operational Approach
The term operational approach operational approach
production-oriented field of management dedicated to improving efficiency and cutting waste is a convenient description of the production-oriented area of management that is dedicated to improving efficiency, cutting waste, and improving quality. Since the turn of the twentieth century, it has had a number of labels, including scientific management, management science, operations research, production management, and operations management. Underlying this somewhat confusing evolution of terms has been a consistent purpose: to make person-machine systems work as efficiently as possible. Throughout its historical development, the operational approach has been technically and quantitatively oriented.

Frederick W. Taylor’s Scientific Management
Born in 1856, the son of a Philadelphia lawyer, Frederick Winslow Taylor was the epitome of the self-made man. Because a temporary problem with his eyes kept him from attending Harvard University, Taylor went to work as a common laborer in a small Philadelphia machine shop. In just four years he picked up the trades of pattern maker and machinist.3 Later, Taylor went to work at Midvale Steel Works in Philadelphia, where he quickly moved up through the ranks while studying at night for a mechanical engineering degree. As a manager at Midvale, Taylor was appalled at industry’s unsystematic practices. He observed little, if any, cooperation between the managers and the laborers. Inefficiency and waste were rampant. Output restriction among groups of workers, which Taylor called “systematic soldiering,” was widespread. Ill-equipped and inadequately trained workers were typically left on their own to determine how to do their jobs. Hence, the father of scientific management committed himself to the relentless pursuit of “finding a better way.”4 Taylor sought nothing less than what he termed a “mental revolution” in the practice of industrial management.5

According to an early definition, scientific management scientific management
developing performance standards on the basis of systematic observation and experimentation is “that kind of management which conducts a business or affairs by standards established by facts or truths gained through systematic observation, experiment, or reasoning.”6 The word experiment deserves special emphasis because it was Taylor’s trademark. While working at Midvale and later at Bethlehem Steel, Taylor started the scientific management movement in industry in four areas: standardization, time and task study, systematic selection and training, and pay incentives.7

Standardization.
By closely studying metal-cutting operations, Taylor collected extensive data on the optimum cutting-tool speeds and the rates at which stock should be fed into the machines for each job. The resulting standards were then posted for quick reference by the machine operators. He also systematically catalogued and stored the expensive cutting tools that usually were carelessly thrown aside when a job was completed. Operators could go to the carefully arranged tool room, check out the right tool for the job at hand, and check it back in when finished. Taylor’s approach caused productivity to jump and costs to fall.

Time and Task Study.
According to the traditional rule-of-thumb approach, there was no “science of shoveling.” But after thousands of observations and stopwatch recordings, Taylor detected a serious flaw in the way various materials were being shoveled—each laborer brought his own shovel to work. Taylor knew the company was losing, not saving, money when a laborer used the same shovel for both heavy and light materials. A shovel load of iron ore weighed about 30 pounds, according to Taylor’s calculations, whereas a shovel load of rice coal weighed only 4 pounds. Systematic experimentation revealed that a shovel load of 21 pounds was optimum (permitted the greatest movement of material in a day). Taylor significantly increased productivity by having workers use specially sized and shaped shovels provided by the company—large shovels for the lighter materials and smaller ones for heavier work.

Systematic Selection and Training.
Although primitive by modern standards, Taylor’s experiments with pig iron handling clearly reveal the intent of this phase of scientific management. The task was to lift a 92-pound block of iron (in the steel trade, a “pig”), carry it up an incline (a distance of about 36 feet), and drop it into an open railroad car. Taylor observed that on the average, a pig iron handler moved about 12½ tons in a ten-hour day of constant effort. After careful study, Taylor found that if he selected the strongest men and instructed them in the proper techniques of lifting and carrying the pigs of iron, he could get each man to load 47 tons in a ten-hour day. Surprisingly, this nearly fourfold increase in output was achieved by having the pig iron handlers spend only 43 percent of their time actually hauling iron. The other 57 percent was spent either walking back empty-handed or sitting down. Taylor reported that the laborers liked the new arrangement because they were less fatigued and took home 60 percent more pay.

Management historians recently have disputed Taylor’s pig iron findings, suggesting his conclusions were unfounded and/or exaggerated.8 Importantly, our present historical perspective is an evolving blend of fact and interpretation.

Pay Incentives.
According to Taylor, “What the workmen want from their employers beyond anything else is high wages.”9 This “economic man” assumption led Taylor to believe that piece rates were important to improved productivity. Under traditional piece-rate plans, an individual received a fixed amount of money for each unit of output. Thus, the greater the output, the greater the pay. In his determination to find a better way, Taylor attempted to improve the traditional piece-rate scheme with his differential piece-rate plan.

Figure A.1 illustrates the added incentive effect of Taylor’s differential plan. (The amounts are typical rates of pay in Taylor’s time.) Under the traditional plan, a worker would receive a fixed amount (for example, five cents) for each unit produced. Seventy-five cents would be received for producing 15 units and $1.00 for 20 units. In contrast, Taylor’s plan required that a time study be carried out to determine the company’s idea of a fair day’s work. Two piece rates were then put into effect. A low rate would be paid if the worker finished the day below the company’s standard, and a high rate when the day’s output met or exceeded the standard. As the diagonal lines in Figure A.1 indicate, a hard worker who produced 25 units would earn $1.25 under the traditional plan and $1.50 under Taylor’s plan.

Figure A.1��Taylor’s Differential Piece-Rate Plan

Taylor’s Followers
Among the many who followed in Taylor’s footsteps, Frank and Lillian Gilbreth and Henry L. Gantt stand out.

Frank and Lillian Gilbreth.
Inspired by Taylor’s time studies and motivated by a desire to expand human potential, the Gilbreths turned motion study into an exact science. In so doing, they pioneered the use of motion pictures for studying and streamlining work motions. They paved the way for modern work simplification by cataloguing 17 different hand motions, such as “grasp” and “hold.” These they called “therbligs” (actually the name Gilbreth spelled backward with the t and h reversed). Their success stories include the following:

In laying brick, the motions used in laying a single brick were reduced from eighteen to five—with an increase in output from one hundred and twenty bricks an hour to three hundred and fifty an hour, and with a reduction in the resulting fatigue. In folding cotton cloth, twenty to thirty motions were reduced to ten or twelve, with the result that instead of one hundred and fifty dozen pieces of cloth, four hundred dozen were folded, with no added fatigue.10

Frank and Lillian Gilbreth were so dedicated to the idea of finding the one best way to do every job that 2 of their 12 children wrote Cheaper by the Dozen, a humorous recollection of scientific management and motion study applied to the Gilbreth household.11

Henry L. Gantt.
Gantt, a schoolteacher by training, contributed to scientific management by refining production control and cost control techniques. As illustrated in Appendix B, variations of Gantt’s work-scheduling charts are still in use today.12 He also humanized Taylor’s differential piece-rate system by combining a guaranteed day rate (minimum wage) with an above-standard bonus. Gantt was ahead of his time in emphasizing the importance of the human factor and in urging management to concentrate on service rather than profits.13

The Quality Advocates
Today’s managers readily attach strategic importance to quality improvement. The road to this enlightened view, particularly for U.S. managers, was a long and winding one. It started in factories and eventually made its way through service businesses, nonprofit organizations, and government agencies. An international cast of quality advocates took much of the twentieth century to pave the road to quality. Not until 1980, when NBC ran a television documentary titled If Japan Can ... Why Can’t We? did Americans begin to realize fully that quality was a key to Japan’s growing dominance in world markets. Advice from the following quality advocates finally began to sink in during the 1980s.14

Walter A. Shewhart.
A statistician for Bell Laboratories, Shewhart introduced the concept of statistical quality control in his 1931 landmark text, Economic Control of Quality of Manufactured Product.

Kaoru Ishikawa.
The University of Tokyo professor advocated quality before World War II and founded the Union of Japanese Scientists and Engineers (JUSE), which became the driving force behind Japan’s quality revolution. Ishikawa proposed a preventive approach to quality. His expanded idea of the customer included both internal and external customers. Ishikawa’s fishbone diagrams, discussed in Chapter 6, remain a popular problem-solving tool to this day.

W. Edwards Deming.
This Walter Shewhart understudy accepted an invitation from JUSE in 1950 to lecture on his principles of statistical quality control. His ideas, detailed in Chapter 8, went far beyond what his Japanese hosts expected from a man with a mathematics Ph.D. from Yale. Japanese manufacturers warmly embraced Deming and his unconventional ideas about encouraging employee participation and striving for continuous improvement. His 1986 book Out of the Crisis is “a guide to the ‘transformation of the style of American management,’ which became a bible for Deming disciples.”15

Joseph M. Juran.
Juran’s career bore a striking similarity to Deming’s. Both were Americans (Juran was a naturalized U.S. citizen born in Romania) schooled in statistics, both strongly influenced Japanese managers via JUSE, and both continued to lecture on quality into their nineties. Thanks to extensive training by the Juran Institute, the concept of internal customers is well established today.16 Teamwork, partnerships with suppliers, problem solving, and brainstorming are all Juran trademarks. “A specific term associated with Juran is Pareto analysis, a technique for separating major problems from minor ones. A Pareto analysis looks for the 20 percent of possible causes that lead to 80 percent of all problems.”17 (The 80/20 rule is discussed in Chapter 5in the section, “Priorities.”)

Armand V. Feigenbaum.
While working on his doctorate at MIT, Feigenbaum developed the concept of total quality control. He expanded on his idea of an organizationwide program of quality improvement in his 1951 book, Total Quality Control. He envisioned all functions of the business cycle—from purchasing and engineering, to manufacturing and finance, to marketing and service—as necessarily involved in the quest for quality. The customer, according to Feigenbaum, is the one who ultimately determines quality.18

Philip B. Crosby.
The author of the 1979 best-seller Quality Is Free, Crosby learned about quality improvement during his up-from-the-trenches career at ITT (a giant global corporation in many lines of business). His work struck a chord with top managers because he documented the huge cost of having to rework or scrap poor-quality products. He promoted the idea of zero defects, or doing it right the first time.19

Lessons from the Operational Approach
Scientific management often appears rather unscientific to those who live in a world of genetic engineering, manned space flight, industrial robots, the Internet, and laser technology. Systematic management might be a more accurate label. Within the context of haphazard, turn-of-the-twentieth-century industrial practices, however, scientific management was indeed revolutionary. Heading the list of its lasting contributions is a much-needed emphasis on promoting production efficiency and combating waste. Today, dedication to finding a better way is more important than ever in view of uneven productivity growth and diminishing resources.

Nevertheless, Taylor and the early scientific management proponents have been roundly criticized for viewing workers as unidimensional economic beings interested only in more money. These critics fear that scientific management techniques have dehumanized people by making them act like mindless machines. Not all would agree. According to one respected management scholar who feels that Taylor’s work is widely misunderstood and unfairly criticized, Taylor actually improved working conditions by reducing fatigue and redesigning machines to fit people. A systematic analysis of Taylor’s contributions led this same management scholar to conclude: “Taylor’s track record is remarkable. The point is not, as is often claimed, that he was ‘right in the context of his time’ but is now outdated, but that most of his insights are still valid today.”20

Contributions by the quality advocates are subject to less debate today. The only question is, Why didn’t we listen to them earlier? (See Chapter 8.)

An important post–World War II outgrowth of the operational approach is operations management. Operations management, like scientific management, aims at promoting efficiency through systematic observation and experimentation. However, operations management (sometimes called production/operations management) tends to be broader in scope and application than scientific management was. Whereas scientific management was limited largely to hand labor and machine shops, operations management specialists apply their expertise to all types of production and service operations, such as the purchase and storage of materials, energy use, product and service design, work flow, safety, quality control, and data processing. Thus, operations management operations management
the process of transforming material and human resources into useful goods and services is defined as the process of transforming raw materials, technology, and human talent into useful goods and services.21 Operations managers could be called the frontline troops in the battle for productivity growth.

The Behavioral Approach
Like the other approaches to management, the behavioral approach has evolved gradually over many years. Advocates of the behavioral approach to management point out that people deserve to be the central focus of organized activity. They believe that successful management depends largely on a manager’s ability to understand and work with people who have a variety of backgrounds, needs, perceptions, and aspirations. The progress of this humanistic approach from the human relations movement to modern organizational behavior has greatly influenced management theory and practice.

The Human Relations Movement
The human relations movement human relations movement
an effort to make managers more sensitive to their employees’ needs was a concerted effort among theorists and practitioners to make managers more sensitive to employee needs. It came into being as a result of special circumstances that occurred during the first half of the twentieth century. As illustrated in Figure A.2, the human relations movement may be compared to the top of a pyramid. Just as the top of a pyramid must be supported, so too the human relations movement was supported by three very different historic influences: (1) the threat of unionization, (2) the Hawthorne studies, and (3) the philosophy of industrial humanism.

Figure A.2��The Human Relations Movement Pyramid

Threat of Unionization.
To understand why the human relations movement evolved, one needs first to appreciate its sociopolitical background. From the late 1800s to the 1920s, American industry grew by leaps and bounds as it attempted to satisfy the many demands of a rapidly growing population. Cheap immigrant labor was readily available, and there was a seller’s market for finished goods. Then came the Great Depression in the 1930s, and millions stood in bread lines instead of pay lines. Many held business somehow responsible for the depression, and public sympathy swung from management to labor. Congress consequently began to pass prolabor legislation. When the Wagner Act of 1935 legalized union-management collective bargaining, management began searching for ways to stem the tide of all-out unionization. Early human relations theory proposed an enticing answer: satisfied employees would be less inclined to join unions. Business managers subsequently began adopting morale-boosting human relations techniques as a union-avoidance tactic.

The Hawthorne Studies.
As the sociopolitical climate changed, a second development in industry took place. Behavioral scientists from prestigious universities began to conduct on-the-job behavior studies. Instead of studying tools and techniques in the scientific management tradition, they focused on people. Practical behavioral research such as the famous Hawthorne studies stirred management’s interest in the psychological and sociological dynamics of the workplace.

The Hawthorne studies began in 1924 in a Western Electric plant near Chicago as a small-scale scientific management study of the relationship between light intensity and productivity. Curiously, the performance of a select group of employees tended to improve no matter how the physical surroundings were manipulated. Even when the lights were dimmed to moonlight intensity, productivity continued to climb! Scientific management doctrine could not account for what was taking place, and so a team of behavioral science researchers, headed by Elton Mayo, was brought in from Harvard to conduct a more rigorous study.

By 1932, when the Hawthorne studies ended, more than 20,000 employees had participated in one way or another. After extensive interviewing of the subjects, it became clear to researchers that productivity was much less affected by changes in work conditions than by the attitudes of the workers themselves. Specifically, relationships between members of a work group and between workers and their supervisors were found to be more significant. Though the experiments and the theories that evolved from them are criticized today for flawed methodology and statistical inaccuracies, the Hawthorne studies can be credited with turning management theorists away from the simplistic “economic man” model to a more humanistic and realistic view, the “social man” model.22

The Philosophy of Industrial Humanism.
Although unionization prompted a search for new management techniques and the Hawthorne studies demonstrated that people were important to productivity, a philosophy of human relations was needed to provide a convincing rationale for treating employees better. Elton Mayo, Mary Parker Follett, and Douglas McGregor, although from very different backgrounds, offered just such a philosophy.

Born in Australia, Elton Mayo was a Harvard professor specializing in psychology and sociology when he took over the Hawthorne studies. His 1933 book, The Human Problems of an Industrial Civilization, inspired by what he had learned at Hawthorne, cautioned managers that emotional factors were a more important determinant of productive efficiency than were physical and logical factors. Claiming that employees create their own unofficial yet powerful workplace culture complete with norms and sanctions, Mayo urged managers to provide work that fostered personal and subjective satisfaction. He called for a new social order designed to stimulate individual cooperation.23

Mary Parker Follett’s experience as a management consultant and her background in law, political science, and philosophy convinced her that managers should be aware that each employee is a complex collection of emotions, beliefs, attitudes, and habits. She believed managers had to recognize the individual’s motivating desires if they wanted to get employees to work harder. Accordingly, Follett urged managers to motivate performance rather than simply demand it. Cooperation, a spirit of unity, and self-control were seen as the keys to both productivity and a democratic way of life.24 Historians credit Follett, who died in 1933, with being decades ahead of her time in terms of behavioral and systems management theory.25 Her influence as a management consultant in a male-dominated industrial sector was remarkable as well.

A third philosophical rallying point for industrial humanism was provided by an American scholar named Douglas McGregor. In his 1960 classic, The Human Side of Enterprise, McGregor outlined a set of highly optimistic assumptions about human nature. McGregor viewed the typical employee as an energetic and creative individual who could achieve great things if given the opportunity. He labeled the set of assumptions for this optimistic perspective Theory Y Theory Y
McGregor’s optimistic assumptions about working people . McGregor’s Theory Y assumptions are listed in Table A.2, along with what he called the traditional Theory X assumptions. These two sets of assumptions about human nature enabled McGregor to contrast the modern or enlightened view he recommended (Theory Y) with the prevailing traditional view (Theory X), which he criticized for being pessimistic, stifling, and outdated. Because of its relative recency (compared with Mayo’s and Follett’s work), its catchy labels, and its intuitive appeal, McGregor’s Theory X/Y philosophy has left an indelible mark on modern management thinking.26 Some historians have credited McGregor with launching the field of organizational behavior.

Table�2�

Organizational Behavior
Organizational behavior organizational behavior
a modern approach seeking to discover the causes of work behavior and develop better management techniques is a modern approach to management that attempts to determine the causes of human work behavior and translate the results into effective management techniques. As such, it has a strong research orientation. Organizational behaviorists have borrowed an assortment of theories and research techniques from all of the behavioral sciences and applied them to people at work in modern organizations. The result is an interdisciplinary field in which psychology predominates. In spite of its relatively new and developing state, organizational behavior has had a significant impact on modern management thought by helping to explain why employees behave as they do. Because human relations has evolved into a practical, how-to-do-it discipline for supervisors, organizational behavior amounts to a scientific extension of human relations. Many organizational behavior findings will be examined in part three of this text.

Lessons from the Behavioral Approach
Above all else, the behavioral approach makes it clear to present and future managers that people are the key to productivity. According to advocates of the behavioral approach, technology, work rules, and standards do not guarantee good job performance. Instead, success depends on motivated and skilled individuals who are committed to organizational objectives.27 Only a manager’s sensitivity to individual concerns can foster the cooperation necessary for high productivity.

On the negative side, traditional human relations doctrine has been criticized as vague and simplistic. According to these critics, relatively primitive on-the-job behavioral research does not justify such broad conclusions. For instance, critics do not believe that supportive supervision and good human relations will lead automatically to higher morale and hence to better job performance. Also, recent analyses of the Hawthorne studies, using modern statistical techniques, have generated debate about the validity of the original conclusions.28

Fortunately, organizational behavior, as a scientific extension of human relations, promises to fill in some of the gaps left by human relationists while at the same time retaining an emphasis on people. Today, organizational behaviorists are trying to piece together the multiple determinants of effective job performance in various work situations and across cultures.

The Systems Approach
A system system
a collection of parts that operate interdependently to achieve a common purpose is a collection of parts operating interdependently to achieve a common purpose. Working from this definition, the systems approach represents a marked departure from the past; in fact, it requires a completely different style of thinking.

Universal process, scientific management, and human relations theorists studied management by taking things apart. They assumed that the whole is equal to the sum of its parts and can be explained in terms of its parts. Systems theorists, in contrast, study management by putting things together and assume that the whole is greater than the sum of its parts. The difference is analytic versus synthetic thinking. According to one management systems expert, “Analytic thinking is, so to speak, outside-in thinking; synthetic thinking is inside-out. Neither negates the value of the other, but by synthetic thinking we can gain understanding that we cannot obtain through analysis, particularly of collective phenomena.”29

Systems theorists recommend synthetic thinking because management is not practiced in a vacuum. Managers affect and are, in turn, affected by many organizational and environmental variables. Systems thinking has presented the field of management with an enormous challenge: to identify all relevant parts of organized activity and to discover how they interact. Two management writers predicted that systems thinking offers “a basis for understanding organizations and their problems which may one day produce a revolution in organizations comparable to the one brought about by Taylor with scientific management.”30

Chester I. Barnard’s Early Systems Perspective
In one sense, Chester I. Barnard followed in the footsteps of Henri Fayol. Like Fayol, Barnard established a new approach to management on the basis of his experience as a top-level manager. But the approach of the former president of New Jersey Bell Telephone differed from Fayol’s. Rather than isolating specific management functions and principles, Barnard devised a more abstract systems approach. In his landmark 1938 book, The Functions of the Executive, Barnard characterized all organizations as cooperative systems: “A cooperative system is a complex of physical, biological, personal, and social components which are in a specific systematic relationship by reason of the cooperation of two or more persons for at least one definite end.”31

According to Barnard, willingness to serve, common purpose, and communication are the principal elements in an organization (or cooperative system).32 He felt that an organization did not exist if these three elements were not present and working interdependently. As illustrated in Figure A.3, Barnard viewed communication as an energizing force that bridges the natural gap between the individual’s willingness to serve and the organization’s common purpose.

Barnard’s systems perspective has encouraged management and organization theorists to study organizations as complex and dynamic wholes instead of piece by piece. Significantly, he was also a strong advocate of business ethics in his speeches and writings.33Barnard opened some important doors in the evolution of management thought.

Figure A.3��Barnard’s Cooperative System

General Systems Theory
General systems theory general systems theory
an area of study based on the assumption that everything is part of a larger, interdependent arrangement is an interdisciplinary area of study based on the assumption that everything is part of a larger, interdependent arrangement. According to Ludwig von Bertalanffy, a biologist and the founder of general systems theory, “In order to understand an organized whole we must know the parts and the relations between them.”34 This interdisciplinary perspective was eagerly adopted by Barnard’s followers because it categorized levels of systems and distinguished between closed and open systems.

Levels of Systems.
Envisioning the world as a collection of systems was only the first step for general systems theorists. One of the more important recent steps has been the identification of hierarchies of systems, ranging from very specific systems to general ones. Identifying systems at various levels has helped translate abstract general systems theory into more concrete terms.35 A hierarchy of systems relevant to management is the seven-level scheme of living systems shown in Figure A.4. Notice that each system is a subsystem of the one above it.

Figure A.4��Levels of Living Systems

Closed Versus Open Systems.
In addition to identifying hierarchies of systems, general systems theorists have distinguished between closed and open systems. A closed system closed system
a self-sufficient entity is a self-sufficient entity, whereas an open system open system
something that depends on its surrounding environment for survival depends on the surrounding environment for survival. In reality, these two kinds of systems cannot be completely separated from each other. The key to classifying a system as relatively closed or relatively open is to determine the amount of interaction between the system and its environment. A battery-powered digital watch, for example, is a relatively closed system; after the battery is in place, it runs without help from the outside environment. In contrast, a solar-powered clock is a relatively open system; it cannot operate without a continuous supply of outside energy. The human body is a highly open system because life depends on the body’s ability to import oxygen and energy and to export waste. In other words, the human body is highly dependent on the environment for survival.

Along the same lines, general systems theorists say that all organizations are open systems because organizational survival depends on interaction with the surrounding environment. Just as no person is an island, no organization or organizational subsystem is an island, according to this approach.

New Directions in Systems Thinking: Organizational Learning and Knowledge Management
An organizational learning perspective portrays the organization as a living and thinking open system. Like the human mind, organizations rely on feedback to adjust to changing environmental conditions. In short, organizations are said to learn from experience, just as humans and higher animals do. Organizations thus engage in complex mental processes such as anticipating, perceiving, envisioning, problem solving, and remembering. According to two organization theorists:

Some forms of organizational learning occur regularly in many organizations. Human resource development activities, strategic and other planning activities, and the introduction and mastering of new technologies for doing work are three common learning processes. They often do not fulfill their potential for true organizational learning, however.

Organizational learning is more than the sum of the learning of its parts—more than cumulative individual learning. The training and development of individuals with new skills, knowledge bases, theories, and frameworks does not constitute organizational learning unless such individual learning is translated into altered organizational practices, policies, or design features. Individual learning is necessary but not sufficient for organizational learning.36

When organizational learning becomes a strategic initiative to identify and fully exploit valuable ideas from both inside and outside the organization, a knowledge management program exists.37 You will find more about knowledge management in Chapter 6.

Lessons from the Systems Approach
Because of the influence of the systems approach, managers now have a greater appreciation for the importance of seeing the whole picture. Open-system thinking does not permit the manager to become preoccupied with one aspect of organizational management while ignoring other internal and external realities. The manager of a business, for instance, must consider resource availability, technological developments, and market trends when producing and selling a product or service. Another positive aspect of the systems approach is how it tries to integrate various management theories. Although quite different in emphasis, both operations management and organizational behavior have been strongly influenced by systems thinking.

There are critics of the systems approach, of course. Some management scholars see systems thinking as long on intellectual appeal and catchy terminology and short on verifiable facts and practical advice.

The Contingency Approach
A comparatively new line of thinking among management theorists has been labeled the contingency approach. Contingency management advocates are attempting to take a step away from universally applicable principles of management and toward situational appropriateness. In the words of Fred Luthans, a noted contingency management writer, “The traditional approaches to management were not necessarily wrong, but today they are no longer adequate. The needed breakthrough for management theory and practice can be found in a contingency approach.”38 Formally defined, the contingency approach contingency approach
research effort to determine which managerial practices and techniques are appropriate in specific situations is an effort to determine through research which managerial practices and techniques are appropriate in specific situations. Imagine using Taylor’s approach with a college-educated computer engineer! Different situations require different managerial responses, according to the contingency approach.

Generally, the term contingency refers to the choice of an alternative course of action. For example, roommates may have a contingency plan to move their party indoors if it rains. Their subsequent actions are said to be contingent (or dependent) on the weather. In a management context, contingency has become synonymous with situational management. As one contingency theorist put it, “The effectiveness of a given management pattern is contingent upon multitudinous factors and their interrelationship in a particular situation.”39 This means the application of various management tools and techniques must be appropriate to the particular situation because each situation presents to the manager its own problems. A contingency approach is applicable in intercultural dealings where customs and habits cannot be taken for granted.

In real-life management, the success of any given technique is dictated by the situation. For example, researchers have found that rigidly structured organizations with many layers of management function best when environmental conditions are relatively stable. Unstable surroundings dictate a more flexible and streamlined organization that can adapt quickly to change. Consequently, traditional principles of management that call for rigidly structured organizations, regardless of the situation, have come into question.

Contingency Characteristics
Some management scholars are attracted to contingency thinking because it is a workable compromise between the systems approach and what can be called a purely situational perspective. Figure A.5 illustrates this relationship. The systems approach is often criticized for being too general and abstract, although the purely situational view, which assumes that every real-life situation requires a distinctly different approach, has been called hopelessly specific. Contingency advocates have tried to take advantage of common denominators without getting trapped into simplistic generalization. Three characteristics of the contingency approach are (1) an open-system perspective, (2) a practical research orientation, and (3) a multivariate approach.

Figure A.5��The Contingency View: A Compromise

An Open-System Perspective.
Open-system thinking is fundamental to the contingency view. Contingency theorists are not satisfied with focusing on just the internal workings of organizations. They see the need to understand how organizational subsystems combine to interact with outside social, cultural, political, and economic systems.

A Practical Research Orientation.
Practical research is that which ultimately leads to more effective on-the-job management. Contingency researchers attempt to translate their findings into tools and situational refinements for more effective management.

A Multivariate Approach.
Traditional closed-system thinking prompted a search for simple one-to-one causal relationships. This approach is called bivariate analysis. For example, the traditional human relations assumption that higher morale leads automatically to higher productivity was the result of bivariate analysis. Only one variable, morale, was seen as the sole direct cause of changes in a second variable, productivity. Subsequent multivariate analysis has shown that many variables, including the employee’s personality, the nature of the task, rewards, and job and life satisfaction, collectively account for variations in productivity. Multivariate analysis multivariate analysis
research technique used to determine how a combination of variables interacts to cause a particular outcome is a research technique used to determine how a combination of variables interacts to cause a particular outcome. For example, if an employee has a conscientious personality, the task is highly challenging, and the individual is highly satisfied with his or her life and job, then analysis might show that productivity could be expected to be high. Contingency management theorists strive to carry out practical and relevant multivariate analyses.

Lessons from the Contingency Approach
Although still not fully developed, the contingency approach is a helpful addition to management thought because it emphasizes situational appropriateness. People, organizations, and problems are too complex to justify rigid adherence to universal principles of management. In addition, contingency thinking is a practical extension of the systems approach. Assuming that systems thinking is a unifying synthetic force in management thought, the contingency approach promises to add practical direction.

The contingency approach, like each of the other approaches, has its share of critics. One has criticized contingency theory for creating the impression that the organization is a captive of its environment.40 If such were strictly the case, attempts to manage the organization would be in vain. In actual fact, organizations are subject to various combinations of environmental forces and management practices.

Whether the contingency management theorists have bitten off more than they can chew remains to be seen. At present they appear to be headed in a constructive direction. But it is good to keep in mind that the contingency approach is a promising step rather than the end of the evolution of conventional management thought.

Attributes of Excellence: A Modern Unconventional Approach
In 1982, Thomas J. Peters and Robert H. Waterman Jr., a pair of management consultants, wrote a book that took the management world by storm. It topped the nonfiction best-seller lists for months, was translated into several foreign languages, and later appeared in paperback. Just five years later, an astounding five million copies had been sold worldwide.41In Search of Excellence attempted to explain what makes America’s best-run companies successful. Many respected corporate executives hailed Peters’s and Waterman’s book as the remedy for America’s productivity problems. Certain management scholars, however, called the book simplistic and accused the authors of pandering to management’s desire for a quick fix. Moreover, they called Peters’s and Waterman’s research methods weak. If for no reason other than its widespread acceptance in the management community, In Search of Excellence deserves discussion in any historical perspective of management thought.42

Peters’s and Waterman’s approach to management was unconventional for three reasons. First, they attacked conventional management theory and practice for being too conservative, rationalistic, analytical, unemotional, inflexible, negative, and preoccupied with bigness. Second, they replaced conventional management terminology (such as planning, management by objectives, and control) with catch phrases gleaned from successful managers (for example, “Do it, fix it, try it” and “management by wandering around”). Third, they made their key points with stories and anecdotes rather than with objective, quantified data and facts. All this added up to a challenge to take a fresh new look at management. In this section we explore that challenge by discussing the eight attributes of excellence uncovered by Peters and Waterman. Subsequent interpretations of their approach are also examined.

Eight Attributes of Excellence
Peters and Waterman employed a combination of subjective and objective criteria to identify 62 of the best-managed companies in the United States. Among the final subsample of 36 “excellent” companies that boasted 20-year records of innovation and profitability were such familiar names as Boeing, Caterpillar, Delta Air Lines, Eastman Kodak, IBM, Johnson & Johnson, McDonald’s, and 3M. Extensive interviews were conducted at half of these firms and less extensive interviewing took place at the rest.43 After analyzing the results of their interviews, Peters and Waterman isolated the eight attributes of excellence summarized in Table A.3. Importantly, the authors noted: “Not all eight attributes were present or conspicuous to the same degree in all of the excellent companies we studied. But in every case at least a preponderance of the eight was clearly visible, quite distinctive.”44

Table�3�

Source: “Eight Attributes of Excellence” from In Search of Excellence: Lessons from America by Thomas J.Peters and Robert H.Waterman Jr. � 1982 by Thomas J. Peters and Robert H. Waterman Jr. Reprinted by permission of HarperCollins Publishers, Inc.

A Critical Appraisal of the Excellence Approach
Critics took Peters and Waterman to task for giving managers more questions than answers, ignoring the contingency approach to management, and relying too heavily on unsupported generalizations. They also criticized them for taking an overly narrow viewpoint of organizational success. According to one skeptical management consultant:

The authors fail to position management effectiveness among the several nonmanagement variables that are also important to sustained corporate excellence. Technology, finances, government policy, raw materials, and others must be acknowledged, if only to forestall unreasonable expectations of and for management.45

In fact, after reviewing research evidence that 14 of Peters’s and Waterman’s “excellent” companies had fallen on hard times by 1984, Business Week observed:

One major lesson from all this is that the excellent companies of today will not necessarily be the excellent companies of tomorrow. But the more important lesson is that good management requires much more than following any one set of rules. In Search of Excellence was a response to an era when management put too much emphasis on number-crunching. But companies can also get into trouble by overemphasizing Peters’s and Waterman’s principles.46

Subsequent research has reinforced the foregoing criticisms of the excellence approach. Unlike Peters and Waterman, Michael Hitt and Duane Ireland conducted a comparative analysis of “excellent” companies and industry norms. Companies satisfying all of Peters’s and Waterman’s excellence criteria turned out to be no more effective than a random sample of Fortune 1000 companies.47 This outcome prompted Hitt and Ireland to warn managers against “the quick-fix mentality.” Len Schlesinger, chief operating officer of Limited Brands, recently offered this caution about management fads and quick fixes:

The basics of everyday operating management will never be, and should never be, supplemented by any other big idea. Many managers are on a never-ending chase for new solutions and silver bullets. For the most part, the quest is a waste of energy.48

See Best Practices.Best Practices: Beyond Quick Fixes
.. if you look hard at the history of the Fortune 500 over the past 40 years, there emerges through all the static a set of golden management rules that have surviving power. They don’t have labels—once you stick a name on something, it’s fast on its way to becoming a flavor-of-the-month disappointment—but are broad management principles. They are (1) Management is a practice. (2) People are a resource. (3) Marketing and innovation are the key functions of a business. (4) Discover what you do well. (5) Quality pays for itself.

Source: Excerpted from BrianDumaine, “Distilled Wisdom: Buddy, Can You Paradigm?” Fortune (May 15, 1995): 205.

Lessons from the Excellence Approach
Certainly more than anything else, Peters and Waterman did a good job of reminding managers to pay closer attention to basics such as customers, employees, and new ideas. While reviewing their findings, they noted:

The project showed, more clearly than could have been hoped for, that the excellent companies were, above all, brilliant on the basics. Tools didn’t substitute for thinking. Intellect didn’t overpower wisdom. Analysis didn’t impede action. Rather, these companies worked hard to keep things simple in a complex world. They persisted. They insisted on top quality. They fawned on their customers. They listened to their employees and treated them like adults. They allowed their innovative product or service “champions” long tethers. They allowed some chaos in return for quick action and regular experimentation.49

Although discussion of these basics may strike some as a tedious review of the obvious, it is precisely neglect of the basics that keeps many organizations and individuals from achieving excellence.

Despite Peters’s and Waterman’s subjective research methodology,50 they deserve credit for reminding managers of the importance of on-the-job experimentation. All the planning in the world cannot teach the practical lessons that one can learn by experimentally rearranging things and observing the results, trying an improved approach, observing, and so on.51

A concluding comment is in order to help put the foregoing historical overview into proper perspective. The theoretical tidiness of this appendix, though it provides a useful conceptual framework for students of management, generally does not carry over to the practice of management. As the excellence approach makes clear, managers are, first and foremost, pragmatists. They use whatever works. Instead of faithfully adhering to a given school of management thought, successful managers tend to use a “mixed bag” approach. This appendix is a good starting point for you to begin building your own personally relevant and useful approach to management by blending theory, the experience and advice of others, and your own experience.

Terms to Understand
Universal process approach assumes that all organizations require the same rational management process

Operational approach production-oriented field of management dedicated to improving efficiency and cutting waste

Scientific management developing performance standards on the basis of systematic observation and experimentation

Operations management the process of transforming material and human resources into useful goods and services

Human relations movement an effort to make managers more sensitive to their employees’ needs

Theory Y McGregor’s optimistic assumptions about working people

Organizational behavior a modern approach seeking to discover the causes of work behavior and develop better management techniques

System a collection of parts that operate interdependently to achieve a common purpose

General systems theory an area of study based on the assumption that everything is part of a larger, interdependent arrangement

Closed system a self-sufficient entity

Open system something that depends on its surrounding environment for survival

Contingency approach research effort to determine which managerial practices and techniques are appropriate in specific situations

Multivariate analysis research technique used to determine how a combination of variables interacts to cause a particular outcome

Endnotes
1. See HenriFayol, General and Industrial Management, trans. Constance Storrs (London: Isaac Pitman & Sons, 1949). An interesting review by Nancy M.Carter of Fayol’s book can be found in Allen C.Bluedorn, ed., “Special Book Review Section on the Classics of Management,” Academy of Management Review, 11 (April 1986): 454–456.

2. Stephen J.Carroll and Dennis J.Gillen, “Are the Classical Management Functions Useful in Describing Managerial Work?” Academy of Management Review, 12 (January 1987): 48.

3. Frank B.Copley, Frederick W. Taylor: Father of Scientific Management (New York: Harper & Brothers, 1923), I: 3. Also see the brief profile of Taylor in “Taylorism,” Business Week: 100 Years of Innovation (summer 1999): 16.

4. For expanded treatment, see Copley, Frederick W. Taylor. A good retrospective review of Taylor’s classic writings may be found in Bluedorn, ed., “Special Book Review Section on the Classics of Management,” pp. 443–447. RobertKanigel’s One Best Way, a modern biography of Taylor, is reviewed in AlanFarnham, “The Man Who Changed Work Forever,” Fortune (July 21, 1997): 114.

5. For an interesting update on Taylor, see ChristopherFarrell, “Micromanaging from the Grave,” Business Week (May 15, 1995): 34.

6. George D.Babcock, The Taylor System in Franklin Management, 2d ed. (New York: Engineering Magazine Company, 1917), p. 31.

7. Taylor’s seminal 1911 book, The Principles of Scientific Management, has been selected by a panel of management experts as the most influential management book of the twentieth century: See Arthur G.Bedeian and Daniel A.Wren, “Most Influential Management Books of the 20th Century,” Organizational Dynamics, 29 (winter 2001): 221–225. Also see OswaldJones, “Scientific Management, Culture and Control: A First-Hand Account of Taylorism in Practice,” Human Relations, 53 (May 2000): 631–653.

8. For an alternative perspective and detailed critique of Taylor’s pig iron–handlingexperiments, see Charles D.Wrege and Richard M.Hodgetts, “Frederick W. Taylor’ 1899 Pig Iron Observations: Examining Fact, Fiction, and Lessons for the New Millennium,” Academy of Management Journal, 43 (December 2000): 1283–1291.

9. Frederick W.Taylor, Shop Management (New York: Harper & Brothers, 1911), p. 22.

10. Frank B.Gilbreth and Lillian M.Gilbreth, Applied Motion Study (New York: Sturgis & Walton, 1917), p. 42. A retrospective review of the Gilbreths’ writings, by Daniel J.Brass, can be found in Bluedorn, ed., “Special Book Review Section on the Classics of Management,” pp. 448–451.

11. See Frank B.Gilbreth Jr., and ErnestineGilbreth Carey, Cheaper by the Dozen (New York: Thomas Y. Crowell, 1948).

12. For example, see the Gantt chart on p. 64 of Tom D.Conkright, “So You’re Going to Manage a Project,” Training, 35 (January 1998): 62–67.

13. For detailed coverage of Gantt’s contributions, see H. L.Gantt, Work, Wages, and Profits, 2d ed. (New York: Engineering Magazine Company, 1913). An interesting update on Gantt’s contributions can be found in Peter B.Peterson, “Training and Development: The Views of Henry L.Gantt (1861–1919),” SAM Advanced Management Journal, 52 (winter 1987): 20–23.

14. Good historical overviews of the quality movement are RonZemke, “A Bluffer’s Guide to TQM,” Training, 30 (April 1993): 48–55; R. RayGehani, “Quality Value-Chain: A Meta-Synthesis of Frontiers of Quality Movement,” Academy of Management Executive, 7 (May 1993): 29–42; and SangitChatterjee and MustafaYilmaz, “Quality Confusion: Too Many Gurus, Not Enough Disciples,” Business Horizons, 36 (May–June 1993): 15–18.

15. MaryWalton, Deming Management at Work (New York: Putnam, 1990), p. 13. See JohnHillkirk, “World-Famous Quality Expert Dead at 93,” USA Today (December 21, 1993): 1B–2B; PeterNulty, “The National Business Hall of Fame: W. EdwardsDeming,” Fortune (April 4, 1994): 124; Keki R.Bhote, “ Dr. W.Edwards Deming—A Prophet with Belated Honor in His Own Country,” National Productivity Review, 13 (spring 1994): 153–159; AnneWillette, “Deming Legacy Gives Firms Quality Challenge,” USA Today (October 19, 1994): 2B; and M. R.Yilmaz and SangitChatterjee, “Deming and the Quality of Software Development,” Business Horizons, 40 (November–December 1997): 51–58.

16. See JackGordon, “An Interview with Joseph M.Juran,” Training, 31 (May 1994): 35–41.

17. Zemke, “A Bluffer’s Guide to TQM,” p. 51. Also see Joseph M.Juran, “Made in U.S.A.: A Renaissance in Quality,” Harvard Business Review, 71 (July–August 1993): 42–50.

18. See Armand V.Feigenbaum, “How Total Quality Counters Three Forces of International Competitiveness,” National Productivity Review, 13 (summer 1994): 327–330. More Feigenbaum ideas can be found in DelJones, “Employers Going for Quality Hires, Not Quantity,” USA Today (December 11, 1997): 1B.

19. Crosby’s more recent ideas may be found in Philip B.Crosby, Completeness: Quality for the 21st Century (New York: Dutton, 1992).

20. Edwin A.Locke, “The Ideas of Frederick W.Taylor: An Evaluation,” Academy of Management Review, 7 (January 1982): 22–23. Also see David H.Freedman, “Is Management Still a Science?” Harvard Business Review, 70 (November–December 1992): 26–38.

21. See Donald W.Fogarty, Thomas R.Hoffman, and Peter W.Stonebraker, Production and Operations Management (Cincinnati: South-Western Publishing Co., 1989), pp. 7–8; and Vincent A.Mabert, “Operations in the American Economy: Liability or Asset,” Business Horizons, 35 (July–August 1992): 3–5.

22. The Hawthorne studies are discussed in detail in F. J.Roethlisberger and William J.Dickson, Management and the Worker (Cambridge, Mass.: Harvard University Press, 1939). Dennis W.Organ’s review of this classic book, in which he criticizes the usual textbook treatment of it, can be found in Bluedorn, ed., “Special Book Review Section on the Classics of Management,” pp. 459–463.

23. See Ellen S.O’Connor, “The Politics of Management Thought: A Case Study of the Harvard Business School and the Human Relations School,” Academy of Management Review, 24 (January 1999): 117–131.

24. See Henry C.Metcalf and L.Urwick, Dynamic Administration: The Collected Papers of Mary Parker Follett (New York: Harper & Brothers, 1942); MaryParker Follett, Freedom and Coordination (London: Management Publications Trust, 1949). A review by Diane L.Ferry of Dynamic Administration can be found in Bluedorn, ed., “Special Book Review Section on the Classics of Management,” pp. 451–454.

25. See L. D.Parker, “Control in Organizational Life: The Contribution of MaryParker Follett,” Academy of Management Review, 9 (October 1984): 736–745; Albie M.Davis, “An Interview with MaryParker Follett,” Negotiation Journal, 5 (July 1989): 223–225; and DanaWechsler Linden, “The Mother of Them All,” Forbes (January 16, 1995): 75–76.

26. For a recent case study of a military leader’s transition from a Theory X style to a Theory Y style, see D. MichaelAbrashoff, “Retention Through Redemption,” Harvard Business Review, 79 (February 2001): 136–141.

27. An interesting and instructive timeline of human resource milestones can be found in “Training and Development in the 20th Century,” Training, 35 (September 1998): 49–56.

28. For a statistical interpretation of the Hawthorne studies, see RichardHerbert Franke and James D.Kaul, “The Hawthorne Experiments: First Statistical Interpretation,” American Sociological Review, 43 (October 1978): 623–643. Also see Stephen R. G.Jones, “Worker Interdependence and Output: The Hawthorne Studies Reevaluated,” American Sociological Review, 55 (April 1990): 176–190.

29. Russell L.Ackoff, “Science in the Systems Age: Beyond IE, OR, and MS,” Operations Research, 21 (May–June 1973): 664.

30. Charles J.Coleman and David D.Palmer, “Organizational Application of System Theory,” Business Horizons, 16 (December 1973): 77.

31. Chester I.Barnard, The Functions of the Executive (Cambridge, Mass.: Harvard University Press, 1938), p. 65.

32. Ibid., p. 82. A retrospective review, by Thomas L.Keon, of Barnard’s The Functions of the Executive can be found in Bluedorn, ed., “Special Book Review Section on the Classics of Management,” pp. 456–459.

33. For details, see LoriVerstegen Ryan and William G.Scott, “Ethics and Organizational Reflection: The Rockefeller Foundation and Postwar ‘Moral Deficits,’ 1942–1954,” Academy of Management Review, 20 (April 1995): 438–461.

34. Ludwigvon Bertalanffy, “The History and Status of General Systems Theory,” Academy of Management Journal, 15 (December 1972): 411.

35. For an example of an economic/industrial hierarchy of organizations, see Figure 2 (p. 774) in PhilipRich, “The Organizational Taxonomy: Definition and Design,” Academy of Management Review, 17 (October 1992): 758–781.

36. SusanAlbers Mohrman and Allan M.Mohrman Jr., “Organizational Change and Learning,” in Organizing for the Future: The New Logic for Managing Complex Organizations, eds. Jay R.Galbraith, Edward E.Lawler III, and Associates (San Francisco: Jossey-Bass, 1993), p. 89. For an excellent overview of organizational learning, see David A.Garvin, “Building a Learning Organization,” Harvard Business Review, 71 (July–August 1993): 78–91. Also see RobertAubrey and Paul M.Cohen, Working Wisdom: Timeless Skills and Vanguard Strategies for Learning Organizations (San Francisco: Jossey-Bass, 1995); and Timothy T.Baldwin and Camden C.Danielson, “Building a Learning Strategy at the Top: Interviews with Ten of America’s CLOs,” Business Horizons,43 (November–December 2000): 5–14.

37. For an excellent collection of readings, see Harvard Business Review on Knowledge Management (Boston: Harvard Business School Publishing, 1998). Also see NathanielFoote, EricMatson, LeighWeiss, and EtienneWenger, “Leveraging Group Knowledge for High-Performance Decision-Making,” Organizational Dynamics, 31 (winter 2002): 280-295; and Syed H.Akhter, “Strategic Planning, Hypercompetition, and Knowledge Management,” Business Horizons, 46 (January-February 2003): 19-24.

38. FredLuthans, Introduction to Management: A Contingency Approach (New York: McGraw-Hill, 1976), p. 28. Also see Henry L.Tosi Jr. and John W.Slocum Jr., “Contingency Theory: Some Suggested Directions,” Journal of Management, 10 (spring 1984): 9–26.

39. Y. K.Shetty, “Contingency Management: Current Perspective for Managing Organizations,” Management International Review, 14, no. 6 (1974): 27.

40. See Joseph W.McGuire, “Management Theory: Retreat to the Academy,” Business Horizons, 25 (July–August 1982): 37.

41. Data from John A.Byrne, “How the Best Get Better,” Business Week (September 14, 1987): 98–99.

42. Business Week listed In Search of Excellence among ten indispensable business books. See John A.Byrne, “A Classic Business Bookshelf,” Business Week (March 5, 1990): 10, 12.

43. Information about the sample in this study may be found in Thomas J.Peters and Robert H.Waterman Jr., In Search of Excellence (New York: Harper & Row, 1982), pp. 19–26.

44. Ibid., pp. 16–17.

45. Daniel T.Carroll, “A Disappointing Search for Excellence,” Harvard Business Review, 61 (November–December 1983): 88.

46. “Who’s Excellent Now?” Business Week (November 5, 1984): 76–78. 3M Company’s troubles since being an “excellent” company are chronicled in De’AnnWeimer, “3M: The Heat Is on the Boss,” Business Week (March 15, 1999): 82–84.

47. See Michael A.Hitt and R. DuaneIreland, “Peters and Waterman Revisited: The Unended Quest for Excellence,” Academy of Management Executive, 1 (May 1987): 91–98. Also see James N.Vedder, “How Much Can We Learn from Success?” Academy of Management Executive, 6 (February 1992): 56–66.

48. LenSchlesinger, “Go Back to Basics,” Fast Company (January 2003): 101. Also see Jane WhitneyGibson and Dana V.Tesone, “Management Fads: Emergence, Evolution, and Implications for Managers,” Academy of Management Executive, 15 (November 2001): 122–133; and DannyMiller and JonHartwick, “Spotting Management Fads,” Harvard Business Review, 80 (October 2002): 26–27.

49. Peters and Waterman, In Search of Excellence, p. 13.

50. For recent controversy about the “excellence” research methodology, see TomPeters, “Tom Peter’s True Confessions,” Fast Company, no. 53 (December 2001): 78–92; DavidLieberman, “Author: Data on Successful Firms ‘Faked’ But Still Valid,” USA Today (November 19, 2001): 6B; and John A.Byrne, “The Real Confessions of Tom Peters,” Business Week (December 3, 2001): 46.

51. See Susan AlbersMohrman, Cristina B.Gibson, and Allan M.Mohrman Jr., “Doing Research That Is Useful to Practice: A Model and Empirical Exploration,” Academy of Management Journal, 44 (April 2001): 357–375.

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