Management Guru 8

SHB2034 – Management Guru & Quality Chapter 6: Current Management Thoughts

TABLE OF CONTENTS OBJECTIVES.........................................................................................................2 ABSTRACT............................................................................................................2 6.1 INTRODUCTION..............................................................................................3 6.2 PETER M. SENGE...........................................................................................4 6.3 MICHAEL E. PORTER ....................................................................................5 6.4 THEODORE LEVITT........................................................................................6 6.5 PETER F. DRUCKER.......................................................................................8 6.6 TOM PETER.....................................................................................................9 6.7 MAX DE PREE ..............................................................................................10 6.8 ROBERT K GREENLEAF..............................................................................11 ADDITIONAL MATERIALS..................................................................................12

OBJECTIVES At the end of this topic, you will be able to: • Enable learners to understand the lives, philosophies, ideas and contributions of Current Management Thinkers. • Enable learners to assess and evaluate the importance and impact of those ideas in organizations and society. • Enable learners to relate the ideas to other management gurus from other disciplines of knowledge. • Enable learners to apply the best and the most relevant concepts formulated by management gurus and thinkers in behaviors and practices in daily lives.

ABSTRACT Current Management Thoughts is a modern management approach that studies and identifies management activities bases on the contemporary objective in management.

6.1 INTRODUCTION Most management ideas are far more original. Most great ideas have already been discovered, they are just continually rediscovered, and re-stated in a new and compelling way. The best place to get new ideas is from thoughtful practitioners, leading CEOs and people of high intellect. The new economy has spawned a new generation of thought-leaders. The new gurus think and look different. Their ideas are based on current trends and issues that change the way managers do their jobs for example the globalization, workforce diversity, e-business world, learning organization, and quality management. These gurus include Peter Senge, Michael Porter, Theodore Levitt, Peter Drucker, Tom Peters, Max De Pree, and Robert Greenleaf. In fact, an effective management guru has to research, develop and test theories in many areas covering all aspects as possible.

6.2 PETER M. SENGE Peter Senge's major work, ''The Fifth Discipline'' articulated the concepts of systems thinking and the learning organization. The learning organization emerged from extensive research carried out by Senge and his team in order to understand what "learning organizations" are all about and how to make progress in organization along this path. According to this research, there are five components to a learning organization: systems thinking, personal mastery, mental models, shared vision, and team learning. Peter M. Senge Senge was born in 1947. He is a director of the Center for Organizational Learning at the Massachusetts Institute of Technology and the founding partner of the training and consulting company, Innovation Associates, now part of Arthur D. Little. Senge graduated in engineering from Stanford before doing a PhD on social systems modeling at MIT. Systems Thinking Systems thinking can help organizations to view themselves as totalities and understanding the interconnected natures of organizations themselves and their relationship with their environment. Senge's view of management is highly humanistic, and he contrasts his 'learning organization', which enables and grows people, with 'controlling organizations' which confine and limit them. Five Components Senge suggests there are five components to a learning organization: • Systems thinking - recognizing those things are interconnected and regard corporations as complex systems. Senge introduced the idea of systems archetypes that can help managers spot repetitive patterns, such as the way certain kinds of problems persist, or the way systems have their own in-built limit to growth. • Personal mastery - Eventhough his idea in the familiar competencies and skills associated with management, but also includes spiritual growth - opening oneself up to a progressively deeper reality - and living life from a creative rather than a reactive viewpoint. • Mental models - this essentially deals with the organization's driving and fundamental values and principles. Senge alerts managers to the power of patterns of thinking at the organizational level and the importance of nondefensive inquiry into the nature of these patterns. • Shared vision - stresses the importance of co-creation and argues that shared vision can only be built on personal vision. He claims that shared vision is present when the task that follows from the vision is no longer seen by the team members as separate from the self. • Team learning - the discipline of team learning involves two practices: dialogue and discussion. The former is characterized by its exploratory nature, the nature by the opposite process of narrowing down the field to the best alternative for the decisions that need to be made. The two are mutually complimentary, but the benefits of combining them only come from having previously separated them. For the traditional organization, the learning organizations pose huge challenges. In the learning organization managers are researchers and designers rather than controllers and overseers. Senge argues that managers should frankly with each other, understand thoroughly how their companies operate, form a collective vision and work together to achieve their goal.

6.3 MICHAEL E. PORTER Porter has served as a counselor on competitive strategy to many leading international and US companies. He says that a company should increase its competitiveness in a chosen industry. At the same time, companies should conduct a detailed study and analysis of their competitors. He suggested them to use one of his three generic strategies as defense. For companies to know if they have a sustainable competitive advantage, they can look at the 'value-chain' like manufacturing, sales and after-sales service. Porter proposes that it is good to have good competitors while eliminating the bad ones which could give the industry a bad name. Together, both could increase overall demand while controlling different segments. Michael Porter Porter was born in Ann Arbor, Michigan in 1947, Porter's father was an army officer and he spent his youth moving around the world. He later served in the US Army Reserve reaching the rank of Captain. Porter went to Princeton University where he obtained a degree in aerospace and mechanical engineering. He was also an all-state high school football and baseball player. Porter took a Harvard MBA (1971) and followed this with a doctorate in business economics (1973). While completing his PhD, Porter came under influence of Richard Caves, the economist, who became his mentor. Competitive Strategy Five competitive forces that companies must look for are: • Rivalry among firms, which could result because competitors are equal strength. • Bargaining power of suppliers. If there is a possibility of a supplier increasing the price of his goods, he could use this position and become your competitor. • Bargaining power of buyers. Buyers may want lower prices and high quality. Using their position, they could become your competitor. • Threat of new entrants. New firms could enter and erode your share of the market. • Threat of substitutes. Companies should watch out for other products that could act as a substitute to theirs. Three Generic Strategies Three generic strategies as defense. • Cost leadership - seize overall leadership by pricing itself lower than its competitor. • Differentiation - chooses something that buyers look for in a product and meet this need. • Focus - select an industry segment and serve it only.

6.4 THEODORE LEVITT Theodore Levitt, the author of ''Marketing Myopia'', expounded the idea of "globalization of markets", which has considerable effect on the operations of many businesses. He argued in his talks about the narrow definition of business, the important of marketing-mix, the differentiation between the substance and the form, and the world markets becoming smaller, fast pace and technologically sophisticated, spreading quickly around the globe. He also argues that companies think more on their product instead of their customers. Theodore Levitt Levitt graduated from Antioch College in 1949 and received his Ph.D. from Ohio State University in 1951. He first started teaching at North Dakota State University, and it was from there that he sent his first articles to the Harvard Business Review and other business journals. His publications attracted the attention of the Standard Oil Company; when he was hired as a consultant and moved to Chicago. In 1959, he became a lecturer of business administration at the Harvard University Graduate School of Business, and in 1965 became the Edward W. Carter Professor of Business Administration, a position he held until his retirement. He also edited the Harvard Business Review. Narrow Definition of Business Levitt talks about the narrow business understanding - that railways thought that they were in the railway business and not in the transport business where subsequent advances in other modes of transport led to the extinction of many. Marketing-Mix Levitt argues that the marketing-mix is important and that companies with a high customer, high company orientation (those that have the most concern for customers and at the same time most concern for profits) have succeeded. Differentiation between the Substance and the Form Levitt emphasized the differentiation between the substance and the form - from pricing, packaging or the type of image given, to distribution and servicing. Markets Becoming Smaller In his later work, Levitt talks of the world markets becoming smaller, fast pace and technologically sophisticated, spreading quickly around the globe. He noted that buyer behavior across nations is becoming similar in nature and that there seemed to be a stereotype of wants. Products on the other hand are also becoming 'standardized'. He gives examples of Coca-Cola, Sony TV, Hamburgers and Levi Jeans. He, therefore, argues that companies must think on a global scale and not along national lines. They should go on commonalties and not differences. They should go for economies of scale (giving the customer competitive prices), quality and service.

Product Instead of Their Customers Levitt argues that companies think too often of their product rather than their customers. Indeed, he argues that what appears to be the product can be expanded and changed by considering the customer. He expresses this in his famous rings which like the rings in the cross section of a tree trunk, expand our from the center. The central ring is the generic product - the physical thing that is made and sold perhaps by many companies. The next ring is the expected product - what goes with the generic product most of the time. This could include packaging, user instructions or a minimal guarantee. The next ring brings us to the notion of the augmented product, something unusual and surprising about the way that the generic product is handled and sold - outstanding service for example. The final ring is what Levitt calls the potential product, what it could be if taken to the ultimate extreme. The essential element here is that the physical thing is stills the same. Levitt's work was taken up and expanded by William Davidow with his distinction between the device and the product in his book, ''Marketing High Technology''.

6.5 PETER F. DRUCKER Peter F. Drucker is a writer, teacher, and consultant specializing in strategy and policy for businesses and social sector organizations. He coined the term 'management by objectives' and is considered largely responsible for changing attitudes away from scientific management towards a more philosophical approach in which management can be reduced to a series of generic tasks and in which goals are of greater importance than functions. Peter Ferdinand Drucker Drucker was born in 1909 in Vienna Austria. He was educated in Austria and England where he took his doctorate in public and international law. He first started out by working as a newspaper reporter in Frankfort, Germany. Then, he went to work for various banks and companies in London before he came to the United States in 1937. While in the United States, he went to work at Bennington College as a professor of politics and philosophy. He moved to New York and became a management professor at the Graduate Business School of New York University. Finally, he moved to California and became Clark Professor of Social Science at Claremont Graduate School. Today, he works for the Wall Street Journal as an editorial columnist, and presents articles for the Harvard Business Review. He is the author of thirty books, which have been translated into more than twenty languages, and has made several series of educational films based on his management books. Management by Objectives Instead of analyzing each task in detail, he looked for general principles of management, which underlie all managerial tasks. By shifting the emphasis of these tasks to output rather than throughput, he created the concept of management by objectives. Instead of simply managing processes, managers should set goals and then work towards them. Changing Attitudes According to George Harris, Drucker combines an acute understanding of socioeconomic forces with practical insights into how leaders can turn turbulence into opportunity. Drucker also believes, "there have been genuine changes in the "social ecology". This is changes in population structure and dynamics; changes in the role and performance of established and seemingly stable institutions; changes in the relation between the sciences and society; and changes in fundamental theories about economics and society long considered as truths''. Philosophical Approach Drucker can perhaps best be described as emphasizing a humanistic approach or philosophical approach to management. He sees enterprises as playing a crucial role in modern society and places the manager at the heart of the enterprise in a role, which emphasizes both dynamism and control.

6.6 TOM PETER Peter together with Robert Waterman wrote ''In Search of Excellence", where they come to the conclusion that most excellent companies are good in the basics. They elaborate the eight key characteristics that successful companies necessarily had. His recent work has a more personal emphasis. For example, in typically breathless style, he ushers in a new era in the world of brands. According to Peters, the new world of brands is radically different. The big names still exist but they no longer have a monopoly over the art of branding. Peters points to the rise of the Internet as evidence of a new, more personal brand generation. After all, you return to the Web site you trust and gain the most value from. Increasingly, we need to promote our own personal brands through such things as developing our contracts or updating our resumes. Tom Peter Peter was born in 1942 and brought up near Baltimore. He studied engineering at Cornell University and served in Vietnam. He also worked for the drug enforcement agency in Washington. Peters has an MBA and PhD from Stanford. After Stanford, he joined the consultancy firm, McKinsey & Company. He left the firm (prior to publication of ''In Search of Excellent'') to work independently. He continues to travel the world giving seminars. Eight Key Characteristics The eight crucial characteristics are: 1. A bias for action - get the job done; 'do it, fix it, try it". 2. Unparalleled service and quality - get close to the customer; give them what they want. 3. Autonomy and entrepreneurship - small group/network; get the best out of people. 4. Productivity through people - respect for the individual. 5. Hands-on, value driven - go to the "field"; know the essential things, know what's happening. 6. "Stick to the knitting" - do what you are good at or know. 7. Simple form, lean staff - structure top-level staff not too large. 8. Simultaneous loose-tight properties - core things/values are strictly centralized, others are decentralized, giving autonomy and freedom. World of Brands 'Regardless of age, regardless of position, regardless of the business we happen to be in, all of us need to understand the importance of branding, say Peters. 'We are CEOs of our own companies: Me Inc. To be in business today, our most important job is to be head marketer for the brand called you.'

6.7 MAX DE PREE De Pree pioneered the use of profit sharing, gain sharing, work teams, and other participatory management practices. This reflects some of the ongoing management practices in Herman Miller, which make the company such a success. De Pree starts by insisting that leaders endorse the concept of persons, beginning with an understanding of the diversity of people's gifts and talents and skills. The art of leadership lies in the ability to polish, liberate and enable those gifts. This is what we should do with every person coming into contact with ourselves every year. Max De Pree Max De Pree is chairman emeritus of office furniture manufacturer Herman Miller, Inc., a leader in both product design and organizational innovation. It is the kind of furniture, which often ends up in the Museum of Modern Art. He is also a member of Fortune Magazine's Business Hall of Fame and is best-selling author of Leadership Is an Art, Leadership Jazz, and the forthcoming Leading Without Power. Herman Miller Miller has been consistently ranked in the top 5 U.S. companies for quality of product for years. Quality according to the company, is a matter of truth and integrity. It includes the quality of our relationships, our communications and the quality of our promises to each other. Another definition for this quality is honor, which in the dictionary means "a fine sense of one's obligation". The Art of Leadership According to De Pree, leadership is lacking these days. He says, "we all need leaders and we will all, at times, act as leaders…too often we are faced with the slick presentation, the perfectly logical explanation, and the well executed classic, the expert opinion and this is not leadership". De Pree talks about measuring leadership by the tone of the body, not the quality of the head. He says to look among the followers for signs of leadership. Moreover, a leader has responsibilities and to be a leader means, especially, having the opportunity to make a meaningful difference in the lives of those who permit the leader to lead. The responsibilities for this covenant go both ways. For example, coaches are in a unique position of leadership to begin with. After the stroke technique, the training intensity and the art of recovery is mastered, the end game is won with leadership, real leadership. There is strength and a trust given by leaders, which we all need. We recognize it when it happens, it will do us all some good to know how to become one.

6.8 ROBERT K GREENLEAF Back in 1970, Robert K Greenleaf wrote a small essay called ''The Servant As Leader'', which introduced the term "servant-leadership." He said true leaders are chosen by their followers. In 1972, Greenleaf published a second essay, ''The Institution As Servant'', which was based on the idea that institutions could also be servants. Greenleaf said that much of the caring for persons in today's society is mediated by large, complex institutions. Until his death in 1990, Robert Greenleaf kept writing on the themes of management, servanthood, organizations, power and spirituality. Robert Greenleaf's ideas sound "soft" to some people. They go against the grain of common wisdom about organizations and power. He once said, "management is the study of how things get done". Greenleaf was also a man of Great Spirit. He believed that spirit was a practical thing, and that belief shone through in all of his writing. Robert K Greenleaf Robert K Greenleaf spent his first career in management research, development and education at AT&T. After retirement, he began a second career teaching and consulting at institutions ranging from Harvard Business School to the Ford Foundation to scores of churches and not-for-profit institutions. During 1960s, Greenleaf tried to understand why so many young people were in rebellion against America's institutions, especially universities. He concluded that the fault lay with the institutions: they weren't doing a good job of serving, therefore, they were doing a poor job of leading. The Servant As Leader In this essay, Greenleaf described some of the characteristics and activities of servant-leaders, providing examples, which show that individual efforts, inspired by vision and a servant ethic, can make a substantial difference in the quality of society. He discussed the skills necessary to be a servant-leader; the importance of awareness, foresight and listening and the contrasts between coercive, manipulative, and persuasive power. The Institution As Servant ''The Institution As Servant'' challenges conventional wisdom about hierarchical organization and the use of power in our major institutions. As he continued to reflect on the way organizations operate, Greenleaf realized that institutions were controlled by trustees. This reflection prompted a third essay in 1974, Trustees As Servants. It's a must-read for any trustees or directors who would venture to become powerful forces in regenerating trust. This essay seeks to address the needs of senior executives for sustained, caring (but demanding) assistance from able trustees. Drawing on a lifetime of experience in institutions, Greenleaf addressed the ambiguity of the trustee role and offered ideas on how each trustee group can claim its rightful functions.

ADDITIONAL MATERIALS • • • • • •

http://www.antioch.edu/review/levitt-bio.html http://www.business.com/ http://www.greenleaf.org/leadership/servant-leadership/Robert-K-Greenleaf-Bio.html http://www.hamiltonco.com/facultybios/levitt.html http://www.managementlearning.com/ppl/levitheo.html http://www.tompeters.com/