33:620:301 Study Guide - Midterm Guide: Intellectual Capital, Switching Barriers, Calibration

Course Code
Introto Management( Dennis Hamilton)
Study Guide

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1 Introduction
3 Core Management Elements
1. Targets
2. Incentives
3. Monitoring
Evaluated these 3 management practices in both private and public sector
Very few were well managed
Many were poorly managed
What if firms adopt these management practices?
Results from controlled study showed improvement
So why don’t managers in firms with poor practices adopt these proven management practices?
79% of firms in the study claimed to have above average management practices
managers lousy at self-evaluation of their management practices
don’t recognize (or don’t want to admit) the problem
Why is adoption so difficult?
Sometimes national policies/cultures perpetuate ineptness
Human nature to resist change (uncomfortable)
Need a burning platform  motivation to change
Resistance can also be overcome with small successful trials
Takes long time to implement, progress can be slow at first

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Does Management Really Work? – YES but
Sometimes good management practices are necessary but not sufficient
Sometimes other factors allow a business to succeed in spite of its inept management practices
Management Theory has endured a healthy tension between
The Scientists (engineer, economists, process managers)
The Humanists (sociologists, psychologists)
The Evolution of Management Theory reflects this tension
3 Stages of Management Theory Evolution
Frederick TaylorPrinciples of Scientific Management
“the best management is a true science, resting upon clearly defined laws, rules, and principles” –
The laborer should work according to a process analyzed and designed by management for optimum
efficiency, “the one best way”, allowing him to do as much as possible within a specific time period --
Mary Parker Follett (1924) – Power with rather than power over employees
Hawthorne Studies (1924- 1932) – Elton Mayo
Factories in Cicero, Illinois
Controlled studies to evaluate various factors (physical conditions, work schedules, incentive
systems) on worker productivity
These factors could not explain the change in productivity which consistently increased
2 unexpected factors appeared in results:
Group dynamics: the workers working as a team encouraging each other

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The workers had been engaged by management in soliciting their feedback and input
Humanistic Psychology applied to social institutions
Peter Drucker, corporation as a social institution in which the capacity and potential of everyone
involved were to be respected
Douglas McGregor
Theory X: people are inherently lazy
Theory Y: people want to find meaning in their work and will contribute in positive ways if the work is
Initially driven by economics
Bruce Henderson (1963) – analytical approach to developing business strategy
Drucker (1964) – Results Driven Management, business exist to produce results
John Kenneth Galbraith (1967) – raises concern about the fact that the top 200 US firms controlled
67% assets, and 60% sales, employment and income – consolidation of industrial power
Strategic Management Evolves through Turbulent Times
Declining confidence in business leaders (1966: 55% of Americans had great confidence in leaders,
1975: only 15%)
Forces of Change
Deregulation (airlines, railroads, trucking, telecomm, finance)
Globalization (new entrants, Japan, Russia, China, India)
Technology (computers, software changed productivity)
Mergers & Acquisitions (25% of firms on Fortune 500 in 1980 were acquired by 1989)
Shareholder capitalism starts to override Stakeholder capitalism
Michael Porter
1980 Competitive Strategy (the 5 forces, generic strategies)
1985 Competitive Advantage (value chain)
Strategic Management Integrates Both Perspectives
Agency Theory Jensen 1980
In Search of Excellence – Peters & Waterman 1982
Reengineering – Michael Hammer 1990
Human/Social Perspective
Leads to a melding of scientific perspective, shareholder capitalism, and human relations with
new themes of:
Leadership (controversial topic)
Innovation – essential for survival and growth
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