Studying history doesn’t mean merely arranging events in chronological order; it means
developing an understanding of the impact of societal forces on organizations. Studying
history is a way to achieve strategic thinking, see the big picture, and improve conceptual
skills. Social, political, and economic forces in the broader society influence organizations
and the practice of management over time.8 Social forces refer to those aspects of a culture
that guide and influence relationships among people. What do people value? What
are the standards of behavior among people? These forces shape what is known as the
social contract, which refers to the unwritten, common rules and perceptions about relationships
among people and between employees and management. Political forces refer tothe influence of political and legal institutions on people and organizations. Some managers
expect increasing government regulation in the coming years, for example, which will
strongly affect organizations.9 Economic forces pertain to the availability, production, and
distribution of resources in a society. Governments, military agencies, churches, schools,
and business organizations in every society need resources to achieve their goals, and economic
forces influence the allocation of scarce resources.
Management practices and perspectives vary in response to social, political, and economic
forces in the larger society. Exhibit 2.1 illustrates the evolution of significant management
perspectives over time. The timeline reflects the dominant time period for each
approach, but elements of each are still used in today’s organizations.10
The Things of Production Versus the Humanity
of Production
One observation from looking at the timeline in Exhibit 2.1 is that there has long been
a struggle within management to balance “the things of production” and “the humanity
of production.”11 When forces either outside or within the organization suggest a need
for change to improve efficiency or effectiveness, managers have often responded with a
technology or numbers-oriented solution that would make people little more than a cog in
a big machine. For instance, as the United States shifted from a world of small towns and
small businesses to an industrialized network of cities and factories in the late nineteenth
century, people began looking at management as a set of scientific practices that could be
measured, studied, and improved with machinelike precision (the classical perspective).
Frederick Taylor wrote that “the best management is a true science, resting upon clearly
defined laws, rules, and principles.” By the 1920s, there was a minor rebellion against this
emphasis on the quantifiable with a call for more attention to human and social needs
(the humanistic perspective). In the first issue of the Harvard Business Review (1922),
Dean Wallace B. Donham wrote that the “development, strengthening, and multiplication of socially-minded business men is the central problem of
business.”12 This dilemma—the scientific numbers-driven
push for greater productivity and profitability and the call
for more humanistic, people-oriented management—has
continued to the present day.
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