Unit 1(P14): Management Theories: Contemporary perspectives

Contemporary perspective on management.

Theory Z model

• It was first described by William Ouchi in his book "Theory Z- How an American Business Can Meet the Japanese Challenge".
• Ouchi contrasted American types of organizations (Type A) that were rooted in the United States' tradition of individualism with Japanese organizations (Type J) that drew upon the Japanese heritage of collectivism. 
• Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. 
• According to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction
• The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. "This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making"(Ouchi, 1981). 

The major parts of theory Z are:

1. Length of employment: Long-term employment and job security. Traditional U.S. organizations are plagued with short-term commitments by employees, but employers using more traditional management perspective may inadvertently encourage this by treating employees simply as replaceable cogs in the profit-making machinery. In the United States, employment at will, which essentially means the employer or the employee can terminate the employment relationship at any time, has been among the dominant forms of employment relationships. Conversely, Type J organizations generally make life-long commitments to their employees and expect loyalty in return, but Type J organizations set the conditions to encourage this. This promotes stability in the organization and job security among employees.
2. Mode of decisions making: Collective decision-making. The Type Z organization emphasizes communication, collaboration, and consensus in decision making. This marks a contrast from the traditional Type A organization that emphasizes individual decision-making.
3. Individual responsibility: Collective responsibility. Type A organizations emphasize individual accountability and performance appraisal. Traditionally, performance measures in Type J companies have been oriented to the group. Thus, Type Z organizations retain the emphasis on individual contributions that are characteristic of most American firms by recognizing individual achievements, albeit within the context of the wider group.
4. Seed of evaluation and promotion: Slow evaluation and promotion. The Type A organization has generally been characterized by short-term evaluations of performance and rapid promotion of high achievers. The Type J organization, conversely, adopts the Japanese model of slow evaluation and promotion.
5. Mechanisms of control: Implicit, informal control with explicit, formalized measures. The Type Z organization relies on informal methods of control, but does measure performance through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J organizations.
6. Specialization of career path: Moderately specialized careers. Type A organizations have generally had quite specialized career paths, with employees avoiding jumps from functional area to another. Conversely, the Type J organization has generally had quite non-specialized career paths. The Type Z organization adopts a middle-of-the-road posture, with career paths that are less specialized than the traditional U.S. model but more specialized than the traditional Japanese model.
7. Nature of concern of the employee: Concern for a total person, including their family. The Type Z organization is characterized by concern for employees that goes beyond the workplace. This philosophy is more consistent with the Japanese model than the U.S. model.

Seven habits of highly effective people: Stephen Covey

• The book first introduces the concept of Paradigm Shift and prepares the reader for a change in mindset. It helps the reader understand that there exists a different perspective, a viewpoint that may be different from his own and asserts that two people can see the same thing and yet differ with each other. Once the reader is prepared for this, it introduces the seven habits, in a proper order.
• Each chapter is dedicated to one of the habits,which are represented by the following imperatives:
• Independence or Self-Mastery: The First Three Habits surround moving from dependence to independence (i.e., self-mastery):
• Habit 1: Be Proactive: Take initiative in life by realizing that your decisions (and how they align with life's principles) are the primary determining factor for effectiveness in your life. Take responsibility for your choices and the consequences that follow.
• Habit 2: Begin with the End in Mind: Self-discover and clarify your deeply important character values and life goals. Envision the ideal characteristics for each of your various roles and relationships in life. Create a mission statement.
• Habit 3: Put First Things First: Prioritize, plan, and execute your week's tasks based on importance rather than urgency. Evaluate whether your efforts exemplify your desired character values, propel you toward goals, and enrich the roles and relationships that were elaborated in Habit 2.
• Interdependence: The next three have to do with Interdependence (i.e., working with others):
• Habit 4: Think Win-Win: Genuinely strive for mutually beneficial solutions or agreements in your relationships. Value and respect people by understanding a "win" for all is ultimately a better long-term resolution than if only one person in the situation had gotten his way.
• Habit 5: Seek First to Understand, Then to be Understood: Use empathic listening to be genuinely influenced by a person, which compels them to reciprocate the listening and take an open mind to being influenced by you. This creates an atmosphere of caring, and positive problem solving.
• Habit 6: Synergize: Combine the strengths of people through positive teamwork, so as to achieve goals no one person could have done alone.
• Self Renewal: The Last habit relates to self-rejuvenation:
• Habit 7: Sharpen the Saw: Balance and renew your resources, energy, and health to create a sustainable, long-term, effective lifestyle. It primarily emphasizes exercise for physical renewal, prayer (meditation, yoga, etc.) and good reading for mental renewal. It also mentions service to society for spiritual renewal.

Thomas J. Peters and Robert M. Waterman “In Search of Excellence”

There are eight basic principles of how to run a successful business and stay ahead of the competition. These are:

1. A bias for action, active decision making - 'getting on with it'. Facilitate quick decision making & problem solving tends to avoid bureaucratic control
2. Close to the customer - learning from the people served by the business.
3. Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'.
4. Productivity through people- treating rank and file employees as a source of quality.
5. Hands-on, value-driven – participation, practical experience and management philosophy that guides everyday practice - management showing its commitment.
6. Stick to the knitting - stay with the business that you know, business diversity almost never works
7. Simple form, lean staff - have a simple structure and outsource a lot. Some of the best companies have minimal HQ staff. 
8. Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralized values. A combination of centralized and decentralized gives the best blend

Contemporary Management Challenges

1. Labor Shortage:Advancement in technology, Demand for technology-related employees (salaries), Effect on Lower-skills jobs
2. Management of Diversified Workforce: Differences among people, Internationalization factorDifficulty in management
3. Values, Goals and Beliefs of the New Generation Workforce: Less devoted to long-term career prospects, Less to Conformity and uniformity, How to attract and motivate,
4. Management of Change: Rapid and constant environment change, Change is an opportunity
5. New Technology: Internet, e-business, e-government, Information technology, Investment in technology, Employee-privacy, Decision-making quality, Physical or virtual offices
6. Organization Structure:Weber’s bureaucratic structure to more flat structure
7. Globalization: Role of government in business, Behavioral processes vary widely, Values and beliefs of employee
8. Ethics and Social Responsibility: Business scandals, Increased contributions to social issues
9. Quality: Used as a base for competition, Quality and productivity
10. Service Economy: Challenge to provide good experience to all stakeholders.