A Challenge to Traditional Management Theory
Traditional CEO’s Dilemma
- Balancing shareholder demands with achieving longevity ir sustainability.
- Focussing on the design and development of systems and processes while paying some attention to the "people" in the organisation.
Today CEO’s Dilemma
- Providing an environment that espouses individual freedom while ensuring the financial and non-financial targets of the organisation are met.
- The people in the organisation control the systems and processes and not have the people controlled by the systems.
Challenging Traditional Management Theory
- There was a system to control behavior in order to increase productivity: A hierarchy of authority, impersonal rules that defines duties, standardised procedures, promotion based on achievement, and specialised labour.
- The command and control environment was designed to motify or control behaviour and not to build trust between individual through the formation of sustanaible relationships.
- Bureaucracy was capable of attaining the highest degree of efficiency and the most rationally known means of exercising authority over human beings.
- The driving force of the organisation was efficiency, increasing output and the wealth of the owners.
- Employees were not to be trusted and required stringent controls to ensure their behavior were focussed on increased productivity.
The “new” approaches to management
- System and procedures are required to support the orgranisation, no longer drive the organisation.
- The organisation should be considered as an open system and not a series of discrete parts. Relationships are established between people when there is a sharing of values, attitudes and beliefs, and cannot be mandated by strict adherence to systems and processes.
- Environment is designed to build trust and to maintain the appropriate performance measures which are acceptable to its staffs.
- The core competence of the organisation lies in the knowledge and skills of its people.
- The organisation must be values driven. The individuals in the organisation are committed to the purpose of the organisation, when the organisation is driven by common values and shared beliefs.
- Trust is based on shared values and value systems lie at the heart of human behaviour, that cannot be controlled through systems and processes, the traditional operating standard for many organisations.
The Challenges
The Development of Emotions and Relationship — Self-discovery process: the employees are made aware of their own strengths and limitations, of how they react in certain situations and understand why they experience particular emotional reactions in particular situations. Emotions dictate the individual’s ability to form relationships.
Inspiration — The need to create a focus for the realisation of individual dreams.
Environment and New Knowledge Creation — The creation of new knowledge in an environment where individuals are committed to the organisation and a high level of trust and integrity pervade the organisation.
