Classical Management Theories in Contemporary Management

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Journal of Management and Marketing Research

Infusing value: application of historical management concepts at a modern organization Andrew H. Clem Nova Southeastern University Bahaudin G. Mujtaba Nova Southeastern University Abstract History and the relative global marketplace have always proven to large organizations that there will continue to be wavering economic waters to navigate as well as deal with constant changes in the business environment. Today’s economy is no different, and management strategies are continually tested to withstand the slow return to prosperity. Science Applications International Corporation (SAIC) has historically been able to weather these environmental business factors through insightful management strategy, a focus on employees, and value creation. By analyzing various management theories and exploring SAIC, a set of recommendations for managers is presented along with an in-depth view of what has helped SAIC to become successful. Key words: Customers, competitors, technology, economy, value creation, management theories.

Classical Management Theories, Page 1

Introduction In a modern economy, a corporation can expect many scenarios, events, and a wealth of market and economic fluctuations. Today’s economy is riddled with abyssal economic downturn and subsequently wild market fluctuations. Coupled with these events is marked competition from multiple avenues. As technology remains at the forefront of civilization, businesses not only must remain malleable to the aforementioned conditions, but continue to improve their technological infrastructure to keep a competitive edge since skilled and knowledge employees are likely to leave and take others jobs when better opportunities become available (Udechukwu & Mujtaba, 2007). Remaining at the forefront these factors create an impetus for success of an organization. However, all else aside, creating value and implementing positive, value-creating strategic management practices is the most practical direction to proceed to ensure a long-run outlook on organizational success and longevity (Chan, Fine, Khanfar, & Mujtaba, 2009). Science Applications International Corporation (SAIC) has found a way to implement various management theories and increasingly be successful, all the while creating value for the company through a host of value drivers. SAIC Background SAIC is an employee-owned corporation with a track-record of high-level client service and organizational success. J. Robert “Bob” Beyster, Ph.D. founded SAIC in 1969 and it has since grown into an international company with around 45,000 employees (SAIC, 2009, About…). He is also the author of The SAIC Solution, explaining how SAIC came to be successful. According to Reuters (2009), SAIC can be described as “a provider of scientific, engineering, systems integration and technical services and solutions to all branches of the United States military, agencies of the United States Department of Defense (DoD), the intelligence community, the United States Department of Homeland Security (DHS) and other United States Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets” (Reuters, 2009, p. 1). Through the years, SAIC has remained at the forefront of business decisions and management strategies to carry the company through both great times and economic turmoil. Through these, SAIC has been able to “position the company for sustainable growth,” even posting ten billion dollars in revenue for fiscal year 2009; the first time in the company’s history (SAIC, 2009, Annual…, p. 2). Part of this sustainable growth, however, can be found within how the company motivates itself. Employee-owned corporations are generally derived through some type of employee stock ownership program (ESOP) within the company. SAIC has chosen to remain employee owned, partly due to the fact that employee ownership is directly linked to one of the...
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