Academics From The United States

"23rd Academy President Ernest Dale, 79, a consultant to top executives of some of the world's largest corporations, emeritus professor at the University of Pennsylvania's Wharton School of Finance & Commerce and 23rd President of the Academy of Management (1968), passed away."

"Empirical School ; A second approach to management I refer to as the "empirical" school. In this, I include those scholars who identify management as a study of experience, sometimes with intent to draw generalizations but usually merely as a means of teaching experience and transferring it to the practitioner or student. Typical of this school are those who see management or "policy" as the study and analysis of cases and those with such approaches as Ernest Dale's "comparative approach.""

"The scientific study of leadership in complex organizations, as an area of enquiry in its own right, is relatively new; hardly more than a decade old. As in any new "science" there is yet no comprehensive framework within which to operate. Unlike medical men after Harvey's great discovery on the circular system of the human body, we have no unifying concepts around which to make further refinements and discoveries."

"The extent to which personnel handles recruitment varies among companies, but in almost all large ones it will recruit all candidates for rank-and-file jobs, plant, or office, and for some of the lower and middle management jobs as well. As one goes up the line, the line managers are likely to take on more of the recruitment task."

"Every manager, up to the president of the company, must handle some phases of staffing, even though personnel may provide at least technical help in every case... Again, the personnel department seldom makes the final decision on selection, except in cases where large numbers of people must be hired at one time and the line managers would not have the time to interview them all. More commonly, even in the case of rank-and-file employees, it merely screens the applicants and picks out a few whom it considers the most promising. Then the immediate supervisors make a choice among these few."

"Provision is made for utilization of a centralized staff of specialists to aid the decentralized operations."

"Centralized controls are designed to ensure that the chief executive can find out how well the delegated authority and responsibility are being exercised."

"The administrative unit that usually covers the company as a whole as well as all Its plants is broken Into smaller administrative units — often on a geographical or product basis. Each is headed by a manager who may be compared to the head of a smaller enterprise. Usually he has fairly complete control over basic line functions; if he also has staff services, such as accounting, engineering, research, and personnel. the unit may be largely self- contained."

"An organization that is based on pure rationality ignores many facets of human nature."

"A list of major management functions and their contents may be helpful in reorganization and in preparation of job descriptions, organization manuals, and charts. The major management functions, analyzed in this Appendix on the basis of a number of manuals, job descriptions, and interviews, are as follows:"

"The functions or job contents necessary to reach objectives must be defined. This step is governed by two precepts."

"In some cases the changes may represent just one part of a general improvement program. Such steps as the following, for example, will generally affect the organization structure:"

"This section will deal with the mechanics of organization—the actual processes or methods of creating and changing the company's organization structure. The problem is essentially that of best utilizing the people and resources presently on hand, as contrasted with the building up of an organization from scratch, described in Part I."

"In and of itself managerial decentralization is neither desirable nor undesirable. We must apply certain criteria in order to evaluate it. One such criterion is economic efficiency: At what point in the management hierarchy and by what individual is a particular decision made most efficiently? Is a particular function exercised or a service performed more cheaply if it is "centralized" or "decentralized"? It is impossible to say in general that either centralization or decentralization is more efficient."

"Centralized control is provided for in a number of different ways:"

"Organization studies usually are devoted to the study of large-scale enterprise because information about larger companies is generally more widely recorded and more readily available. Because of this, more emphasis needs to be placed on organization planning in the smaller firms. It was at the suggestion of Lt. Colonel Lyndall Urwick that AMA undertook this study of companies of different sizes, as a means of improving our knowledge of organization—a field in which he has made major contributions. Many of the larger companies face small-scale problems in their subsidiaries and small units. However, those starting work in the large firm find it difficult to visualize the evolutionary process on which their company's present operation is based. Therefore, it may be of interest even for large companies to study the various stages of growth, up to and including, of course, their own present stage of development."

"The major problems of organization can perhaps best be studied in dynamic terms, i.e., as they arise and change with the evolution of the company. In this dynamic setting the causes and nature of organization problems can be recognized most easily. Each major problem can be analyzed at the stage of the company's growth when it typically arises, when there are few complications and the organizational problem is centered about just one factor or change in the company's mode of operation. Just as it is easier to study the workings of democracy as they arise in one of the small towns of New England rather than in the United States as a whole, so it appears to be desirable, in dealing with a subject of such scope as organization, to isolate and study the major problems individually."

"I find myself just a little annoyed at the tendency of all of us to adopt certain clichés about decentralization and then glibly announce that we're for it. I have been somewhat amused at some of my colleagues who are most vocal in expounding the virtues of decentralization and yet quite unconsciously are apt to be busily engaged in developing their own personal control over activities for which they are responsible."

"The following basic characteristics of organization should be kept in mind in any discussion of organization planning:"

"Organization planning is the process of defining and grouping the activities of the enterprise so that they may be most logically assigned and effectively executed. It is concerned with the establishment of relationships among the units so as to further the objectives of the enterprise."

"In this study, the primary aim has been to provide a perspective on organization development which would combine basic truths with practical realities. The answers had to be drawn, in the first place, from the wisdom of the great authorities of the past. These were the pioneers in scientific management and their followers, and the economists who evolved the principles of profit maximization."

"This book is an analysis of the development and change of the organization structure of the individual company. It is an attempt to combine the systematic thinking on this subject with the "rule of thumb" of practical experience. It essays an integration of the formal structure of the enterprise with the human forces that mold and are molded by it. Thus it is designed to aid the practical man of affairs as well as the student of organization."

"The application of systematic methods to the conduct of business is one of the most striking developments of the present day. The successful pursuit of business activities is increasingly based on carefully developed plans and well-ordered arrangements. The body of knowledge, called Organization, has become increasingly helpful in accomplishing the objectives of the enterprise."

"Management policies and the quality of leadership have a lot to do with individual performance."

"Although the Gordon and Howell report noted the diversity of approaches to the study of management, it was Harold Koontz who delineated the differences and applied the catchy label ‘‘management theory jungle.’’"

"The management theory jungle is still with us... Perhaps the most effective way [out of the jungle] would be for leading managers to take a more active role in narrowing the widening gap... between professional practice and our college and university business [schools]."

"The Current Approaches to Management Theory and Science"

"The various schools of or approaches to management theory that I identified nearly two decades ago, and called "the management theory jungle," are reconsidered. What is found now are eleven distinct approaches, compared to the original six, implying that the "jungle" may be getting more dense and impenetrable. However, certain developments are occurring which indicate that we may be moving more than people think toward a unified and practical theory of management."

"A prominent manufacturer once said that although he could see some use for an organization chart for his factory, he had refused to chart the organization above the level of factory superintendent. His argument was that charts tend to make people overly conscious of being superiors or inferiors, tend to destroy team feeling, and give persons occupying a box on the chart too great a feeling of "ownership"?Another top executive once said that if an organization is left uncharted, it can be changed more easily and that the absence of a chart also encourages a competitive drive for higher executive positions on the part of the uncharted middle-management group."

"Every organization structure, even a poor one, can be charted, for a chart merely indicates how departments are tied together along the principal lines of authority. It is therefore somewhat surprising to find top managers occasionally taking pride in the fact that they do not have an organization chart or, if they do have one, feeling that the chart should be kept a secret."

"This book undertakes the study of management by utilizing analysis of the basic managerial functions as a framework for organizing knowledge and techniques in the field. Managing is defined here as the creation and maintenance of an internal environment in an enterprise where individuals, working together in groups, can perform efficiently and effectively towards the attainment of group goals. Managing could, then, be called "performance environment design." Essentially, managing is the art of doing, and management is the body of organized knowledge which underlies the art."

"Management is defined here as the accomplishment of desired objectives by establishing an environment favorable to performance by people operating in organized groups. Each of the managerial functions (planning, organizing, staffing, , directing, and controlling) is analyzed and described in a systematic way. As this is done, both the distilled experience of practicing managers and the findings of scholars are presented. This is approached in such a way that the reader may grasp the relationships between each of the functions, obtain a clear view of the major principles underlying them."

"The Mathematical School ; Although mathematical methods can be used by any school of management theory, and have been, I have chosen to group under a school those theorists who see management as a system of mathematical models and processes. Perhaps the most widely known group I arbitrarily so lump are the operations researchers or operations analysts, who have sometimes anointed themselves with the rather pretentious name of "management scientists." The abiding belief of this group is that, if management, or organization, or planning, or decision making is a logical process, it can be expressed in terms of mathematical symbols and relationships. The central approach of this school is the model, for it is through these devices that the problem is expressed in its basic relationships and in terms of selected goals or objectives."

"The Decision Theory School : Another approach to management theory, undertaken by a growing and scholarly group, might be referred to as the decision theory school. This group concentrates on rational approach to decision-the selection from among possible alternatives of a course of action or of an idea. The approach of this school may be to deal with the decision itself, or to the persons or organizational group making the decision, or to an analysis of the decision process. Some limit themselves fairly much to the economic rationale of the decision, while others regard anything which happens in an enterprise the subject of their analysis, and still others expand decision theory to cover the psychological and sociological aspect and environment of decisions and decision-makers."

"The Social System School: Closely related to the human behavior school and often confused or intertwined with it is one which might be labeled the social system school. This includes those researchers who look upon management as a social system, that is, a system of cultural interrelationships. Sometimes, as in the case of March and Simon, the system is limited to formal organizations, using the term "organization" as equivalent to enterprise, rather than the authority-activity concept used most often in management. In other cases, the approach is not to distinguish the formal organization, but rather to encompass any kind of system of human relationships."

"The Human Behavior School: This approach to the analysis of management is based on the central thesis that, since managing involves getting things done with and through people, the study of management must be centered on interpersonal relations. Variously called the "human relations," "leadership," or "behavioral sciences" approach... This school concentrates on the "people" part of management and rests on the principle that, where people work together as groups in order to accomplish objectives, "people should understand people.""

"Empirical School ; A second approach to management I refer to as the "empirical" school. In this, I include those scholars who identify management as a study of experience, sometimes with intent to draw generalizations but usually merely as a means of teaching experience and transferring it to the practitioner or student. Typical of this school are those who see management or "policy" as the study and analysis of cases and those with such approaches as Ernest Dale's "comparative approach.""

"The Management Process School : This approach to management theory perceives management as a process of getting things done through and with people operating in organized groups. It aims to analyze the process, to establish a conceptual framework for it, to identify principles underlying it, and to build up a theory of management from them. It regards management as a universal process, regardless of the type that the environment of management differs widely between enterprises and levels. It looks upon management theory as a way of organizing experience so that practice can be improved through research, empirical testing of principles, and teaching of fundamentals involved in the management process."

"Although students of management would readily agree that there have been problems of management since the dawn of organized life, most would also agree that systematic examination of management, with few exceptions, is the product of the present century and more especially of the past two decades."

"I see too many academics forgetting what I think our job is in management, and that is to organize available knowledge; develop new knowledge, of course, but organize it in such a way that it can be useful to practicing managers to underpin management. I am surprised as I watch the literature, that some people are discovering what we’ve known for years. For example, some things like this: that technology affects management organization. I found that out when I was in the airline industry a few years ago and I never thought it was anything very surprising. Another, that the actual managing depends on the situation... I thought, my gosh, there must be something new there. Only to find, after spending a lot of time reading, that there wasn’t anything, and I don’t know any practicing manager who doesn’t manage in light of the situation. I think we have to agree that management theory and science should underpin practice, otherwise why develop it?"

"Organization charts are subject to important limitations. A chart shows only formal authority relationships and omits the many significant informal and informational relationships."

"[ Managementlove can be defined as] the function of getting things done through others."

"[William H. Meckling was] a most unusual man – one who has never managed a business, who has no advanced degree, and who has never been on a university staff as a teacher or administrator, but who, nevertheless, has just been appointed dean of the Graduate School of Management at the University of Rochester."

"[William H. Meckling was] the consummate scholar who was constantly probing and questioning, and always stimulating each of us to produce the best work possible. He created an exciting, vibrant intellectual environment where each faculty member was encouraged to interact and create knowledge."

"The examples [of economics] all had to relate to management. In price theory, we talked about two divisions within a firm, a manufacturing division and a distribution division. We talked about what price manufacturing would set if it set the price and what price distribution would set. We didn't talk about the social implications of this; we talked about what it would mean to the profits of the firm. Then we introduced competition and asked what the outcome would be. Out of this came a new way of looking at markets and the internal organization of firms. A key problem is assigning decision rights within a firm. You want to assign the rights where the knowledge to use them exists."

"Economics is a discipline that can help students solve the sort of problems they meet within the firm."

"This paper analyzes the relations between knowledge, control and organizational structure both in the market system as a whole and in private organizations. Limitations on the mental capacity of the human mind and the costs of producing and transferring knowledge means that knowledge relevant to all decisions can never be collected in the mind of a single individual or a small body of experts. This means that if the knowledge valuable to a particular decision is to be used in making that decision, there must be a system for partitioning out decision rights to individuals who already have the relevant knowledge and abilities or who can acquire or produce them at the lowest cost. Self interest on the part of individual decision-makers means a control system is required to motivate individuals with the decision rights and the relevant knowledge to use those decision rights appropriately. This control problem is solved in a capitalist economy by a system of alienable property rights."

"The corporation as an organizational form is an enormously productive social invention. Partly because of its success it is under increasing attack from various quarters, often under the guise of “protecting” investors from self-interested managers. Some of these attacks are successful simply because the corporation is a poorly understood entity. This paper discusses what the corporation is, what it is not, and how certain misconceptions about the corporate form are fostered by its critics as part of their attack."

"It is traditional in the theory of the firm to define the production opportunity set available to the firm in terms of its boundary -- the maximum attainable set of output quantities for various input quantities, given the state of technology and knowledge. This boundary is the production function of the firm. One of our purposes here is to point out the dependence of such production functions on the structure of property rights and contracting rights within which the firm exists. We redefine the production function in order to recognize the dependence of output on the structure of property and contracting rights. That expanded framework is then used to discuss a concrete set of problems surrounding the role of labor in the firm ranging from the 'labor-managed firm' system (in which tradable capital value residual claims [common stock] are legally prohibited), and the codetermination and industrial democracy movements (in which management participation by labor is required by law), to cooperatives and professional partnerships (i.e., quasi-labor-managed firms which arise out of the voluntary contracting process), and the capitalist corporation."

"This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the 'separation and control' issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears the costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem."