Discussion Questions

7 July 2016

The Classical management theory made a great impact to what management is today. One very important contribution of the classical management theory was to emphasize the importance of management as a key element to an organized society. Classical management theory also took the time to identify the process and functions in management. Also the classical approach left us management techniques such as time and motion analysis, work simplification, incentive wage systems, personnel testing and budgeting, these techniques are still being used today.

The classical management theory made great contribution to management but it could have been better. Classical theorist never contemplated what today are known as contemporary organizations. Critics argue that classical organizational theory and scientific management are better suitable for the past. Peter Drucker was educated as a lawyer and worked as a journalist in Germany.

Although Drucker was an influence to contemporary management he emphasized the importance of managers in organizational societies, just like the classical management theory did. Drucker’s central issue was how best to manage a business so that is successful over time. Drucker considered the present era of management to be a period of transformation and the organization must be structured in such way as to be able to accommodate constant changes.

He suggested continuous improvement, exploit knowledge and innovation to be able to stay abreast of changes. Michael Porter was a Harvard Business School professor of industrial organization and a consultant. He was one of the first contemporary scholars to apply traditional economic thinking to management problems. Porter believed that competitive advantage could be used for strategic planning. Strategic planning was something developed with classical management theory and is now key in contemporary management.

In an effort to explain corporate strategy in relation to competitive marketplace Porter identified four generic strategies: cost leadership, differentiation, cost focus, and focused differentiation. Porter’s approach in contemporary management allows managers to see the big picture and the way it affects the organization and its changing environment. Both Drucker and Porter took something from the past “classical management theory” to benefit from it and added something of their own to contemporary management.

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