Traditional Management Theory is Dead

Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers – a prize for the best Halloween costume, grades in school, gold stars – and on up through university. On the job, people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknownable.”

This is what Dr. Deming wrote to Peter M. Senge in the 90’s (you can find in the intro to The Fifth Discipline, revised edition). The Agile movement started before the 90’s, but the term “agile” was coined in 2001. Many of the frameworks that were encompassed under the Agile umbrella don’t tackle the problem of managers. They talk about self-managed, cross-functional teams, but they don’t address one essential question: the role of the manager is changed in an agile environment.

The current or traditional management methodology started in the 19th century. Two of the biggest influencers of the time are Frederick Winslow Taylor in USA and Henry Fayol in France.

Frederick W. Taylor and the Scientific Management theory

Frederick W. Taylor, b. 1856, USA, is the parent of scientific management. He was a mechanical engineer and became obsessed by workers productivity, wanting to know how one can get more input from the workers.

Scientific management starts with the assumption that men work under their capacity, or are “soldiering” on purpose, due to three main causes:

  1. The belief that a higher work output will result in throwing a large number of men out of work.
  2. The defective management system, especially pay per hour, not per output, which would push the worker to work as little as possible for the same pay, for fear that, if they increase their output, then they will be required to do more and the new output will be considered as standard.
  3. Workers use rule-of-thumb methods instead of scientific ones, that are not the most effective and fastest ways to get the work done.

According to Taylor, there is only “one way” to do the work, a specialised sequence of motions that would allow the worker to complete his tasks as fast as possible. This way is decided by the management, while the workers have absolutely no autonomy or option to change the way they work.

Planning, strategising, improvement on work should also be done by managers, thinkers, people who are highly educated and can make better decisions than the uneducated workers.

Taylor’s concepts increased productivity indeed, but it created the divide between managers (the educated) and workers (the uneducated, executioners, that don’t need to think to do their job). If you’re interested to read all about his ideas, check out his book, The Principles of Scientific Management.

Henri Fayol and The Administration School of Management

 Henri Fayol, b. 1841, France, is the father of the administration school of management. In Fayol’s view, the management had five main functions:

  • Planning (forecasting) – preventing problems
  • Organising –  building the management structure
  • Coordinating – process and people
  • Commanding – giving orders and clear instructions to the employees, so they know what’s expected of them
  • Controlling – verifying that everything is going according to plan.

Fayol’s 14 principles of management are considered the underlying factors for management success:

  1. Division of Work – when employees are specialised, output can increase because they become increasingly skilled and efficient.
  2. Authority – managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
  3. Discipline – discipline must be upheld in organisations, but methods for doing so can vary.
  4. Unity of Command – employees should have only one direct supervisor.
  5. Unity of Direction – teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
  6. Subordination of Individual Interests to the General Interest – the interests of one employee should not be allowed to become more important than those of the group. This includes managers.
  7. Remuneration – employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
  8. Centralisation – this principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
  9. Scalar Chain – employees should be aware of where they stand in the organisation’s hierarchy, or chain of command.
  10. Order – the workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
  11. Equity – managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
  12. Stability of Tenure of Personnel – managers should strive to minimise employee turnover. Personnel planning should be a priority.
  13. Initiative – employees should be given the necessary level of freedom to create and carry out plans.
  14. Esprit de Corps – organisations should strive to promote team spirit and unity.

Fayol’s 14 management principles are focused on specialised work, authority, discipline, unity of command and initiative (the employees were given freedom to create and carry out the plan), but the slogan of the authoritative style of management in the 50′ – 60’s became “command and control“. Read Fayol’s representative book – General and Industrial Management – if you want to learn more about his theory.

Looking back to how traditional management came about, we have to remember that management is an invented concept. Yes, its creators added some science behind but is that science based on correct assumptions? At the same time, are we facing the same problems we did in the 19th century? 

Douglas McGregor’s Theory X and Y of management

In the 60’s,  Douglas McGregor, an MIT Sloan School of Management Professorwent on to challenge the assumptions behind the scientific management theory. McGregor came from a sociology background, thus he incorporated his training into the field of management. He created the concepts of management theories X and Y.

McGregor challenged the assumptions behind the traditional management theories, that people need to be commanded and controlled, and he outlined that managers have a new role: managers should assist the employees to reach their full potential.

These are the basic leadership and management assumptions behind the theories X and Y:

Abraham Maslow was greatly influenced by McGregors theory X and Y management in his hierarchy of needs theory.

McGregor started the inquiry into the way management is done and his ideas are of relevance still, even though further research is needed and new theories emerge. He brought into question how human factors affected the organisational behaviour and outcome, and brought up the need to align human needs to organisational goals. Notable changes were brought in performance appraisals, organisational change, leadership. If you want to learn more about it, check out McGregor’s annotated book, The Human Side of Enterprise.

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