From interaction with many companies in the last year, we learned that people in organizations (regardless of the organization management style and the role of people in the organization) are not familiar with the management theory they are following. This model should help you to figure out your company management style base on three axes: people motivation, work for an organization and to what the organization compares himself.
The first one is People Motivation. On this scale, we have two polarities, “Fear and Money” on one side and “Porpus & Freedom” on the other side.
Second Axile depicts how the management system promotes organizing work. On one side we can find central control and Authority. The other side of the axile will be systems that prompt distributed control and autonomy for groups and individuals.
The third Axile is using five colors that depict different heights (Z axile). Each color represents the different perspective of organizations from seeing an organization as a machine to seeing the organization as an organism (a living system).
As we discussed in earlier posts, there isn’t any right or wrong management system. Each system created to address specific needs, and they apply to different people with different behavior codes in any company. Knowing these management styles and using them for the right groups within an organization is critical for organizations success.
You can use the model below:
If you want to learn more about the management system/theory that fit you, keep on reading this post.
We used a group of classical to modern group of management theories and a group of contemporary (last 10-15 years, with one exception) management theories.
Classical to modern management theories:
- Scientific management (Taylor): An early 20th-century school of management thought concerned primarily with the physical efficiency of an individual worker.
Scientific management is based on the work of the US engineer Frederick Winslow Taylor (1856-1915) who in his 1911 book The Principles Of Scientific Management laid down the fundamental principles of large-scale manufacturing through assembly-line factories. It emphasizes rationalization and standardization of work through division of labor, time and motion studies, work measurement, and piece-rate wages. See also Taylorism. - Administrative Theory (Fayol): The Administrative Theory is based on the concept of departmentalization, which means the different activities to be performed for achieving the common purpose of the organization should be identified and be classified into different groups or departments, such that the task can be accomplished effectively.
- Personal Management (Owen): The earliest roots of this branch of knowledge can be traced back to the eighteenth century to some of the writings of Robert Owen—a successful textile manufacturer in Scotland. Robert Owen is regarded as the father of personnel management. Owen believed that the volume and quality of a worker’s output were influenced by his total environment, i.e., by his conditions both on and off job.
- Bureaucracy (Weber): Max Weber was a historian that wrote about the emergence of bureaucracy from more traditional organizational forms (like feudalism) and it’s rising pre-eminance in modern society. Scott defines bureaucracy it as “the existence of a specialized administrative staff”. According to Weber, beaucracy is a particular type of administrative structure developed through rational-legal authority. Bureaucratic structures evolved from traditional structures with a clear definition of duties, Hierarchies, Govern by rules, Separation of personal and office property, Managers selected base on skills, employment == career.
- Human Relations (Mayo & Fullet): Human relations management theories were created based on the Hawthorne studies conducted by Professor Elton Mayo. The Hawthorne Effect is the increased motivation and productivity found in employees when placed in a team or group setting. The human relations movement was propelled by the Hawthorne studies.
- Theory Y (McGregor): two distinct sets of assumptions that managers, in general, have about their employees and which often turn out to be self-fulfilling prophesies. Theory-X assumptions are: (1) most people dislike work and will avoid it to the extent possible, therefore (2) they must be continually coerced, controlled, and threatened with punishment to get the work done, and that (3) they have little or no ambition, prefer to avoid responsibility, and choose security above everything else. Theory-Y assumptions are: (1) physical and mental effort are natural and most people (depending on the work environment) find work to be a source of satisfaction, (2) they generally, on their own motivation, exercise self-control, self-direction, creativity, and ingenuity in pursuit of individual and collective (company) goals, (3) they either seek responsibility or learn to accept it willingly, and that (4) their full potential is not tapped in most organizations.
- Theory Z (Japanese management): Theory Z is an approach to management based upon a combination of American and Japanese management philosophies and characterized by, among other things, long-term job security, consensual decision making, slow evaluation, and promotion procedures, and individual responsibility within a group context. Proponents of Theory Z suggest that it leads to improvements in organizational performance. The following sections highlight the development of Theory Z, Theory Z as an approach to management including each of the characteristics noted above, and an evaluation of Theory Z. Realizing the historical context in which Theory Z emerged is helpful in understanding its underlying principles. The following section provides this context.
- Contingency Theory: The basic premise of Contingency Theory is that there is no one best way to lead an organization. There are too many external and internal constraints that will alter what really is the best way to lead is in a given situation. In other words, it all depends upon the situation at hand as to what will be the best course of action.
- System Approach: System approach considers the organization as a dynamic and inter-related set of parts. Each part represents a department or a sub-system. Each department has its sub-system. Continuous and effective interaction of sub-systems helps to attain goals of the larger system. Thus, every sub-system is a system and has sub-systems which together make an organization a set of mutually dependent parts and their sub-parts.
Contemporary management system:
- Agile: Enter Agile Business Management; an approach to business management and corporate governance based on the successful values and processes from the Agile software development movement. Agile and Agile Business Management are a series of principles and techniques that focus on business agility as a means of promoting business growth. Ultimately, this is achieved by improving communication, collaboration, continuous delivery and responsiveness to change.
- Holacracy: Holacracy® is a new way of structuring and running your organization that replaces the conventional management hierarchy. Instead of operating top-down, power is distributed throughout the organization, giving individuals and teams more freedom to self-manage, while staying aligned to the organization’s purpose.
- Haier: As Haier becomes a platform-based business, every part of the organization has its own P&L, makes autonomous decisions (including which other parts of Haier to work with), and can reach out independently to customers, potential employees, and collaborators. R&D projects now often reach beyond Haier’s walls to include academics, independent designers, and even competitors. Zhang sees this as a natural evolution for all major companies, particularly those focused on business innovation in the Internet age.
- BSO’s cell: One of the most amazing organizations on our Bucket List is Buurtzorg. The fully self-managed home-care organization in The Netherlands has grown to 14,000 employees in only 10 years time. Client satisfaction is highest in their segment while employee satisfaction is through the roof. To better understand this unique organization, we visited Buurtzorg, joined one of their teams and interviewed founder (and humble revolutionary) Jos de Blok.
- Morning Star (self-management): Self-Management brings organizational structure to an enterprise spontaneously. Individual Colleagues, directed by their Personal Commercial Mission, are principally responsible for organizing their relationships. Their Personal Commercial Mission is their “boss.” The managerial functions of planning, organizing, staffing, directing and controlling are the personal responsibility of each Colleague.
- Eco-Autonomous: Implementing Chaos Mathematics and Complex Adaptive System principles as a new management system. The end result is decentralized, distributed decision making and autonomous organization. The autonomy, of each entity that creates the organization, enables each entity to implement a management system that works for them.