Friday, August 15, 2008

Classical/Neo-Classical Approaches and Emerging Management Theories

by Alan S. Cajes

Classical and Neo-Classical Approaches

The preceding management theories are part of the general trend to “understand organizations holistically and to define areas in which management might effectively intervene to improve technical, social, and psychological conditions[1].” The trend is a reaction to the perceived inadequacies of the Human Relations approach to management.

The important contribution of such trend in management theory is the effort to view organizations in an integrative manner. The earlier management theories were generally focused on particular aspects of organizations rather than the whole. This does not mean, however, that the earlier theories are no longer useful. Many of the ideas contained in the integrative theories come from the earlier models, which are discussed below.

Bureaucratic Model

The sociologist Max Weber (1864-1920) viewed the state as possessing “within the domain of its jurisdiction a monopoly over coercive force[2].” In his reading of the signs of his times, there was a significant trend in the “modernization of the state’s exercise of coercive power by its adoption of rationalistic methods and the staffing of its departments with people who are skilled in the arts of efficient administration[3].”

Weber attributed the introduction of “more ‘rational,” i.e., more efficient, mode of hierarchical organization” to capitalism[4]. This modern mode of organizations or rational-legal bureaucracy eventually paved “the way for the shift of the authority to exercise the coercive power of the state from the politicians to officials[5].” Weber described bureaucracy in the following terms[6]

  • “A hierarchical arrangement of offices, each with its own authority or legitimated powers. The administrative structure of the bureaucracy, therefore, is pyramidal, with each lower office under the control of a higher one.
  • “A systematic division of labor, with each office or position having its own clearly specified sphere of competence expressed as duties and powers.
  • “Formalized, written rules of conduct and procedure to be applied uniformly. These rules are implemented and followed because ‘…they conform with the statutes of a government that monopolizes their enactment and the legitimate use of physical force[7].’”
  • “Impersonality – officials are subject to an impersonal order and formally established norms of conduct, and they act only in accordance with these rules in their contacts with others inside and outside the organization.
  • “Neutral competence is the hallmark of the bureaucratic official. They are selected and progress through their bureaucratic careers on the basis of their technical competence, not considerations such as social status and partisan loyalties.”
Based on Weber’s description of bureaucracy, one can distill the following reasons why he “asserted that bureaucratic forms of organization were more efficient than other systems of administration[8]:”
  • Clear definition of staff duties and responsibilities;
  • Clear delineation of office functions and authority;
  • Implementation of written rules of conduct and procedure;
  • Observance of government laws;
  • Professionalism in dealing with internal and external stakeholders;
  • Competence-based selection process, and
  • Performance-based promotion process.
Scientific Management

The scientific management approach started influencing the art and science of management in the United States when Weber was writing his ideas about the sociology of organizations[9]. This trend was stimulated by the industrial revolution that “made technology an important element in organizing work, and brought the man-machine nexus into sharp focus[10].” With the introduction of machines that speed up the production process, workers needed to be “proficient in carrying out technical processes[11].”
The new requirements for organizational efficiency altered the method of earlier organizations, which relied mostly on manual labor. Work tasks became specialized and repetitive, hence routinary. But since the production was now dependent on both people and machines, there was much focus in rewarding productivity. Thus, workers were paid more when they rendered overtime work and manufacturing processes were designed in a systematic way.

Frederick W. Taylor, one of the proponents of scientific management, was an engineer who “concentrated on intensive, empirical analyses of work processes at the level of the industrial shop and the individual worker[12].” Taylor’s goal was to discover the “’one-best-way’ to design and execute tasks[13].” He pointed out “the need for professional management, the scientific study and design of work processes, and the creation of an ethos promoting the mutuality of interests between workers and the organization[14].” For him, organizations must aim for “efficiency and goal accomplishment,” which can be achieved through “systematic research and evaluation[15].”

Principles of the Administration School

The focus of the administration school was not shop management but the entire organization. For the proponents of this approach to management, efficiency and organizational goals cannot be achieved by fine-tuning the worker-machine but by properly arranging and readjusting the organizational parts or subdivisions[16]. The important principles of the administration school include the following: 

  • “Organizational structure, coordinated by management, is the key to rational-efficient administration. People should be correctly fitted to the structure, and the organization chart is a basic tool for monitoring and controlling the entire administrative process.
  • “Organizations should be constructed according to four basic criteria: (a) the purposes they serve, (b) the processes they use, (c) the persons and things worked with, and (d) the place where their work is done. Also, whenever possible, division of labor and specialization (of organizational units) are desirable.
  • “Unit of command or direction by only one supervisor is essential. Multiple supervision creates confusion and conflict, which undermine organizational performance and employee morale. For the parts of the organization to function effectively, in a coordinated manner, there must be a unified command at the top of the system – i.e., hierarchy is required. Similarly, the head of each organizational unit must centrally direct all activities of that unit.
  • “Those held responsible for tasks in the organization must be given the authority to carry them out. Thus, along with responsibility, authority should be delegated down the hierarchy to its logical level, and top management should concentrate on the setting of organizational goals and general policies to be implemented by subordinates.
  • “A narrow ‘span of control’ is desirable. There is a limit to the number of immediate subordinates that any one person can effectively direct and control. This number decreases as the variety and complexity of subordinate functions increases. Inefficiency and confusion are likely to result when one official attempts to supervise directly the activities of a large number of organizational subdivisions. Consequently, tall hierarchies with narrow spans of control are often needed to maintain control.
  • “Systematic planning is a necessary administrative function. Through planning, management creates the organizational foresight necessary for long-term survival and prosperity.
  • “Human psychological variables should be taken into consideration… Incentives and other personnel practices should be used to promote initiative and a willingness to accept responsibility. Esprit de corps and harmony should be cultivated[17].”
The famous proponents of the administration school include Henri Fayol, a French mining engineer and executive, and Luther Gulick and Lyndall Urwick, who edited the Papers on the Science of Administration[18]. It was Gulick who formulated his noted acronym, POSDCORB, of the seven administrative functions: 

  • “Planning: the development in broad outline of the a activities to be carried out and their methods of execution so as to accomplish the goals of the organization;
  • “Organizing: the establishment of the formal structure of authority, on the basis of which work subdivisions (e.g., departments, bureaus, agencies, offices, etc.) are established and coordinated;
  • “Staffing: the entire personnel function of recruiting and training staff and maintaining favorable working conditions;
  • “Directing: the continuous task of dealing the organization by making decisions and implementing them through policies and procedures;
  • “Coordinating: the crucial job of interrelating and meshing the various parts or elements of the work process;
  • “Reporting: the process and techniques of keeping superiors informed of the status of their work in progress (e.g., data collection and information management);
  • “Budgeting: the tasks of fiscal planning, accounting, and control[19].”
The principles of the administration school have a considerable influence to the field of public administration, especially in area of administrative reform. Pfiffner and Sherwood have identified the following influences of the school in relation to the “reorganization plans of the reformers[20]:” 

  • “The elected executive (president, governor, mayor) should be the administrative leader as well. This arrangement establishes political accountability for administrative performance. If there is no strong elected chief executive, a professional manager should be appointed to head the administrative apparatus. In addition to clarifying lines of authority and accountability, this structure assures unity of command.
  • “The administrative structure of the jurisdiction should be organized along hierarchical lines, with the chief executive on top. The hierarchy should allow the chief executive to direct and hold accountable all other administrative officers in the system.
  • “The number of departments reporting directly to the chief executive should be small enough to permit a manageable span of control. This principle should be applied throughout the organization.
  • “Overall coordination should be maintained through executive control over the budget. Final authority over the administration of the budget should be in the hands of the chief executive.
  • “Staff units such as budget and personnel are appropriately used to strengthen coordination and control by giving them authority to monitor line activities. These units should report directly to the chief executive.
  • “Administrative functions should be departmentalized by purpose, e.g., parks and recreation, education, and defense.
  • “The functions of the professional administrator are summarized in POSDCORB. With the exception of elected executives, public administrators should be elected on the basis of their technical expertise[21].”
Human Relations Approach

The behavioral or human relations theory has been referred to as the neoclassical approach to management since it was initially an improvement of the classical approaches such as the bureaucratic model, scientific management and administrative management. One distinctive contribution of the human relations school is the establishment of the “informal group as a major explanation of behavior in organizations[22].” Elton Mayo, who led an extended research at the Hawthorne plant of the Western electric Company or what came to be known as Hawthorne[23]. studies, found out that there was no relation between the physical conditions of the workplace and the productivity of workers. Mayo and his team concluded that the organization is a complex web of human relations or a social structure where informal groupings have a profound influence on the behavior of workers. Thus, organizations do not become productive by effecting changes in the formal structure (management, processes, people, etc) but also by understanding the informal structure (workers’ needs, feelings, values, relationships, work environment, etc.) and devising the appropriate interventions. When the formal and informal structures are not in harmony with each other, an organization would have a hard time improving productivity
Chestner Barnard, whose work has been associated with the human relations school, stressed that what keep organizations intact are strategically planned and coordinated plans, strategies and activities, an effective communication system, and a highly motivated workforce. This means that workers are willing to help an organization in achieving its objectives when the organization, in turn, makes workers feel satisfied in their job. To induce workers to contribute, an organization needs to institute a rewards system that provides sufficient financial and other forms of incentives.

Another contribution of Barnard is his concept of authority. He stressed the need for workers to understand what they must do, for workers to be convinced that what they must do are consistent to the organization’s goals and objectives, for them to think that an organization’s order or directive is consistent to their own personal goals and objectives, and for them not to doubt that the order or directive can be complied with using the available resources[24].

Emerging Management Theories

This part of the paper focuses on three recent approaches to management, namely, learning organization, new public management, and the postmodernist approach to management.

Learning Organization

A learning organization is “skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights[25].” It is characterized by “systematic problem-solving, experimentation with new approaches, learning from their own history and experience, learning from the experience and best practice of others, and transferring knowledge quickly throughout the organization[26].”

Change and innovation are central to a learning organization. Change refers particularly to the organization’s capacity to meet new and potential requirements of both internal and external customers. Innovation, on the other hand, involves the continuous process of improvements so that an organization can implement the required changes in its systems, processes, products, and goals. Its objective is to make the organization responsive to changing factors like customer preferences.

To make an organization innovative and adept at handling any change, a learning organization invests in human resource development and continuous education. The emphasis is in making the human resource development systems relevant and efficient by properly understanding the learning styles and habits of workers. Human resource development interventions that fail to consider such aspects in the learning process could hardly be translated to improved competencies of workers.

Another feature of a learning organization is the processing, use and sharing of information among workers and sub-units of the organization. This theme builds on previous management approaches that emphasize the need for employees to meaningfully and intelligently participate in the problem-solving and decision-making processes. It stresses the importance of designing and installing a system for the effective vertical and horizontal transmission of knowledge and information within the organization. It also promotes teamwork among workers. This is important because participation aims to develop a sense of common or shared organizational purpose among the workers.

New Public Management[27]

A number of academics and practitioners like David Osborne, Ted Gaebler, Stanford Borins and Owen E. Hughes consider the new public management (NPM) as a new paradigm of public management. The prominence of NPM as an approach to public sector reform is facilitated by factors such as the common public perception that government instrumentalities are generally inefficient in delivering public services, decreasing government budgets, and the trend towards global integration of governments and markets. Although there are various ways of understanding this approach, NPM is widely known for the following key components: “deregulation of line management;” “conversion of civil service departments into free-standing agencies or enterprises;” “performance-based accountability, particularly through contracts;” and “competitive mechanisms such as contracting-out and internal markets[28].”

The NPM approach is currently used in developing countries although it is “only one among a number of contending strands of reform.” The most common features are privatization, retrenchment, and corporitization or the attempt to privatize the operations of a government department to “achieve greater efficiency, cost savings or service quality improvements[29].” Other common initiatives such as “capacity-building, controlling corruption, and political decentralization or devolution,” however, are not related to NPM.

Postmodernist Approach

This part of the paper describes the postmodern concepts that have influence the science of management. These concepts are “difference,” “tolerance,” “contextualism,” “relativism,” “dialogue,” and “defiance.”

Difference. The term difference comes from the Latin word differo, which means to bring apart. If everything is different, then everything is separate, distinct, and distinguishable.

The concept of difference has wide implications in the various areas of human life, i.e. economic, socio-cultural, and political life. It implies, for instance, that an economic, cultural or political system that works in one country may not work in another given the difference of people's experiences as shaped by the categories of space and time. In particular, it does not follow that since the presidential system of government works quite well in the United States of America, it should work well in the Philippines.

Tolerance. Difference leads to the idea of tolerance, which is to recognize and respect the unique condition of reality in general. In practical terms, tolerance means, for example, respect to other cultures. In the Philippine setting, there are various local cultures that co-exist with one another, although such relationship is not always harmonious and peaceful. Cultural co-existence means the existence of various and different cultural communities that tolerate each other's presence[30].

Contextualism. Context may be defined as the parts or relevant circumstances that surround a text, which is understood, in a general way, as anything that can be interpreted. Context gives meaning to a text hence textual interpretation becomes possible by understanding the text’s context. Polygamy, for example, could be right or wrong depending on its context; it is unacceptable within the context of Christianity but acceptable within the context of Islam. That is why it is not practical for government to ban polygamy for all Filipinos since Muslim Filipinos allow many marriages.

Relativism. Relativism assumes that meaning should not be considered in relation to a universal or transcendental standard or logos because such logos presupposes identity and fails to account the contextual dimension of meaning. Meaning is relative to the interpreter and the context of the text being interpreted. This implies that there are different meanings of a text, instead of one, and that each interpretation of meaning is legitimate. Relativism, together with difference, is related to the idea of non-commensurability, which “involves a radical notion of non-comparability, and the unacceptability of imposing one set of cultural norms over another[31].”

Dialogue. Under a condition characterized by difference, contextualism, relativism and tolerance, the only viable way of maintaining social and political order is not through the totalizing power or authority of the state but though the spirit of dialogue, negotiation and cooperation. Dialogue is not a communication among non-equals. It is a communication premised on differences. It is a process of coming to understand the positions of each party to a dialogue using the rule of consensus. It is a dialogue through words and words are contextual. The purpose of dialogue is not to win over the positions behind the words but to fuse the horizons of the dialoging positions.

Defiance. The attitude of postmodernism is active opposition against authority, because authority is perceived as a product of logocentrism or totalization, which is a violation of the notion of difference. Postmodernism rejects grand or totalizing narratives and since the state is one of the grand narratives, postmodernists defy the authority of the state.
This condition forces governments to reconfigure the procedures of decision-making to accommodate the postmodern imperatives. The result is a leveling of hierarchies. No one is above anyone. Nobody is superior to anybody. Everyone is equal, equality being understood in the context of difference, not similarity.

Conclusion

Public management theory is dynamic. It has changed over the years and has influenced the way managers do their job. Research and experience are the bases of management theory, which in turn, helps enrich the practice of management.

Public managers use different approaches, tools and techniques in performing their functions. Their goal is to make their respective organizations fulfill their reasons for being, as mandated by law or policy. To achieve the goal, public managers set organizational objectives and establish systems and processes using appropriate methods, which differ from one management theory to another.


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[1] Ibid. 118
[2] Scott Gordon, The History and Philosophy of Social Science, 484
[3] Ibid.
[4] Ibid, 487
[5] Ibid.
[6] Felix A. Negro and Lloyd G. Nigro, Modern Public Administration, 102
[7] Reinhard Bendix, Max Weber: An Intellectual Portrait (Garden City, N.Y.: Anchor Books, Doubleday & Co., 1962), 49-79 and Guenther Roth and Wolgang Schuchter, Max Weber’s Vision of History (Berkeley, Calif.: University of California Press, 1979), 11-64. Cited in Felix A. Negro and Lloyd G. Nigro, Modern Public Administration, 102
[8] Ibid. 103
[9] Ibid. 106
[10] Division for Public Economics and Public Administration, Department of Economics and Social Affairs, Rethinking Public Administration: An Overview, 65
[11] Ibid.
[12] Felix A. Negro and Lloyd G. Nigro, Modern Public Administration, 106
[13] Ibid.
[14] Ibid.
[15] Ibid. 107
[16] Ibid, 109
[17] Ibid. 110
[18] Ibid, 109
[19] Luther Gulick and Lyndall Urwick, eds., Papers on the Science of Administration (New York: Institute of Public Administration, 1937). Cited in Felix A. Negro and Lloyd G. Nigro, Modern Public Administration by Nigro and Nigro, 110-111
[20] Ibid.
[21] John Pfiffner and Frank Sherwood, Administrative Organization (Englewood Cliffs, N.J.: Prentice-Hall, 1960), 63-65. Cited in Felix A. Negro and Lloyd G. Nigro, Modern Public Administration, 111
[22] Ibid., 113
[23] Ibid. 115
[24] Ibid. 116-117
[25] David Garvin, “Building a Learning Organization” Harvard Business Review (July-August 1993), 78-91
[26] Ibid. 81
[27] The ideas in this part of the paper are mostly taken from Charles Polidano’s November 1999 Public Policy and Management Working Paper No. 13 “The New Public Management in Developing Countries”. Polidano is based at the Institute for Development Policy and Management, University of Manchester.
[28] See Peter Aucoin “Administrative Reform in Public Management: Paradigms, Principles, Paradoxes and Pendulums” Governance (1990), 115-37 and Christopher Hood “A Public Management for All Seasons” Public Administration (1991), 3-19 cited in Polidano’s work.
[29] This type of “civil service reform” is used in the United Kingdom, New Zealand and Singapore.
[30] Following this train of thought, the colonization of the Philippines by the Spaniards and the Americans violate the notion of tolerance. The foreigners operated on the basis of identity, which presupposes that everyone is similar and shares the same nature. This notion led to their desire to impose uniformity on the natives, with uniformity based on the identity of the occupants. They made the Filipinos think the way they thought, act the way they behaved, put on clothes the way they dressed, speak the way they spoke, build houses the way they built their own, etc. Colonization was totalization. It sought to make Filipinos uniform and identical both in internal and external manifestations. It prevented tolerance of the differences among the various cultural communities in the country.
[31] Florentino H. Hornedo, Pagpakatao and Other Essays in Contemporary Philosophy and Literature of Ideas (Manila, Philippines: University of Santo Tomas Publishing House, 2002), 20

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