chap 2 lect

8/6/2019 Chap 2 Lect

1/28

22Chapter

PowerPoint Presentation by Charlie Cook Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.

The Evolution ofThe Evolution of

Management TheoryManagement Theory


2/28

Copyright McGraw-Hill. All rights reserved. 22

Scientific Management TheoryScientific Management Theory

Evolution of Modern ManagementEvolution of Modern Management

Began in the industrial revolution in the late 19thBegan in the industrial revolution in the late 19thcentury as:century as:

Managers of organizations began seeking waystoManagers of organizations began seeking waysto

bettersatisfy customerneeds.bettersatisfy customerneeds.

LargeLarge--scalemechanized manufacturing began toscalemechanized manufacturing began to

supplantingsmallsupplantingsmall--scale craftproduction in the waysscale craftproduction in the ways

in whichgoods wereproduced.in whichgoods wereproduced.

Social problems developed in the largegroups ofSocial problems developed in the largegroups ofworkersemployed underthe factorysystem.workersemployed underthe factorysystem.

Managers began to focus on increasingtheefficiencyManagers began to focus on increasingtheefficiency

ofthe workerofthe worker--taskmix.taskmix.


3/28


The Evolution of Management TheoryThe Evolution of Management Theory

Figure 2.1Source:


4/28


Job Specialization andJob Specialization andthe Division of Laborthe Division of Labor

Adam Smith (18th centuryeconomist)Adam Smith (18th centuryeconomist)

Observed that firms manufactured pins in one ofObserved that firms manufactured pins in one oftwo different ways:two different ways:

CraftCraft--stylestyleeach workerdid all steps.each workerdid all steps.

ProductionProductioneach workerspecialized in onestep.each workerspecialized in onestep.

Realized that job specialization resulted in muchRealized that job specialization resulted in much

higher efficiency and productivityhigher efficiency and productivity Breaking down thetotal job allowed forthe division ofBreaking down thetotal job allowed forthe division of

laborin which workers became veryskilled attheirlaborin which workers became veryskilled attheir

specific tasks.specific tasks.


5/28


F.W. Taylor and Scientific ManagementF.W. Taylor and Scientific Management

Scientific ManagementScientific Management

The systematic study of the relationships betweenThe systematic study of the relationships betweenpeople and tasks for the purpose of redesigning thepeople and tasks for the purpose of redesigning thework process for higher efficiency.work process for higher efficiency.

Defined by Frederick Taylorin the late 1800stoDefined by Frederick Taylorin the late 1800sto

replaceinformal rule ofthumb knowledge.replaceinformal rule ofthumb knowledge.

Taylorsoughtto reducethetimea workerspent onTaylorsoughtto reducethetimea workerspent on

eachtask by optimizingthe waythetask was done.eachtask by optimizingthe waythetask was done.


6/28


Four Principles of Scientific ManagementFour Principles of Scientific Management

Principlesto increaseefficiency:Principlesto increaseefficiency:

1.1. Study the ways jobs are performed now andStudy the ways jobs are performed now anddetermine new ways to do them.determine new ways to do them.

Gatherdetailed timeand motion information.Gatherdetailed timeand motion information.

Try differentmethodsto see whichis best.Try differentmethodsto see whichis best.

2.2. Codify the new methods into rules.Codify the new methods into rules.

Teachto all workersthe new method.Teachto all workersthe new method.

3.3. Select workers whose skills match the rules.Select workers whose skills match the rules.4.4. Establish fair levels of performance and pay aEstablish fair levels of performance and pay a

premium for higher performance.premium for higher performance.

Workersshould benefit fromhigheroutputWorkersshould benefit fromhigheroutput


7/28


Problems with Scientific ManagementProblems with Scientific Management

Managers frequentlyimplemented onlytheManagers frequentlyimplemented onlythe

increased outputside of Taylorsplan.increased outputside of Taylorsplan.

Workers did not share in the increased output.Workers did not share in the increased output.

Specialized jobs became very boring, dull.Specialized jobs became very boring, dull.Workers ended up distrusting the ScientificWorkers ended up distrusting the Scientific

Management method.Management method.

Workers could purposely underWorkers could purposely under--perform.perform.

Management responded with increased use ofManagement responded with increased use ofmachines and conveyors belts.machines and conveyors belts.


8/28


Frank and Lillian GilbrethFrank and Lillian Gilbreth

Refined Taylors workand mademanyRefined Taylors workand mademany

improvementsto themethodologies oftimeimprovementsto themethodologies oftime

and motion studies.and motion studies.

Time and motion studiesTime and motion studies Breaking upeach job action into its components.Breaking upeach job action into its components.

Finding betterwaysto performtheaction.Finding betterwaysto performtheaction.

Reorganizingeach job action to bemoreefficient.Reorganizingeach job action to bemoreefficient.

Also studied workerAlso studied worker--related fatigueproblemsrelated fatigueproblemscaused by lighting,heating,and the design ofcaused by lighting,heating,and the design of

toolsand machines.toolsand machines.


9/28


Administrative Management TheoryAdministrative Management Theory

Administrative ManagementAdministrative Management

The study of how to create an organizationalThe study of how to create an organizationalstructure that leads to high efficiency andstructure that leads to high efficiency andeffectiveness.effectiveness.

Max WeberMax Weber

Developed the concept of bureaucracy as a formalDeveloped the concept of bureaucracy as a formalsystem of organization and administration designedsystem of organization and administration designedto ensure efficiency and effectiveness.to ensure efficiency and effectiveness.


10/28


WebersWebersPrinciples ofPrinciples ofBureaucracyBureaucracy

Figure 2.2


11/28


Webers Five Principles ofBureaucracyWebers Five Principles ofBureaucracy

Authorityisthepowerto hold peopleAuthorityisthepowerto hold people

accountable fortheiractions.accountable fortheiractions.

Positionsin the firmshould beheld based onPositionsin the firmshould beheld based on

performance, notsocial contacts.performance, notsocial contacts. Position dutiesare clearlyidentified so thatPosition dutiesare clearlyidentified so that

peopleknow whatisexpected ofthem.peopleknow whatisexpected ofthem.

Lines ofauthorityshould be clearlyidentifiedLines ofauthorityshould be clearlyidentified

suchthat workersknow who reportsto who.suchthat workersknow who reportsto who.

Rules,standard operatingprocedures (SOPs),Rules,standard operatingprocedures (SOPs),

and normsguidethe firms operations.and normsguidethe firms operations.


12/28


Fayols Principles of ManagementFayols Principles of Management

Division of Labor:allows for job specialization.Division of Labor:allows for job specialization.

Fayol noted jobs can have too much specializationFayol noted jobs can have too much specializationleading to poor quality and worker dissatisfaction.leading to poor quality and worker dissatisfaction.

Authorityand ResponsibilityAuthorityand ResponsibilityFayol included both formal and informal authorityFayol included both formal and informal authority

resulting from special expertise.resulting from special expertise.

Unity ofCommandUnity ofCommand

Employees should have only one boss.Employees should have only one boss.


13/28


Fayols Principles of Management (contd)Fayols Principles of Management (contd)

Line of AuthorityLine of Authority

A clear chain of command from top to bottom ofA clear chain of command from top to bottom ofthe firm.the firm.

CentralizationCentralizationThe degree to which authority rests at the top ofThe degree to which authority rests at the top of

the organization.the organization.

Unity of DirectionUnity of Direction

A single plan of action to guide the organization.A single plan of action to guide the organization.


14/28



EquityEquity

The provision of justice and the fair and impartialThe provision of justice and the fair and impartialtreatment of all employees.treatment of all employees.

OrderOrderThe arrangement of employees where they will beThe arrangement of employees where they will be

of the most value to the organization and toof the most value to the organization and toprovide career opportunities.provide career opportunities.

InitiativeInitiativeThe fostering of creativity and innovation byThe fostering of creativity and innovation by

encouraging employees to act on their own.encouraging employees to act on their own.


15/28



DisciplineDiscipline

Obedient, applied, respectful employees areObedient, applied, respectful employees arenecessary for the organization to function.necessary for the organization to function.

Remuneration of PersonnelRemuneration of PersonnelAn equitable uniform payment system thatAn equitable uniform payment system that

motivates contributes to organizational success.motivates contributes to organizational success.

Stability of Tenure of PersonnelStability of Tenure of Personnel

LongLong--term employment is important for theterm employment is important for thedevelopment of skills that improve thedevelopment of skills that improve theorganizations performance.organizations performance.


16/28



Subordination of Individual Interestto theSubordination of Individual Interestto theCommon InterestCommon Interest

The interest of the organization takes precedenceThe interest of the organization takes precedenceover that of the individual employee.over that of the individual employee.

Esprit de corpsEsprit de corps

Comradeship, shared enthusiasm foster devotion toComradeship, shared enthusiasm foster devotion tothe common cause (organization).the common cause (organization).


17/28


Behavioral Management TheoryBehavioral Management Theory

Behavioral ManagementBehavioral Management

The study of how managers should behave toThe study of how managers should behave tomotivate employees and encourage them tomotivate employees and encourage them toperform at high levels and be committed to theperform at high levels and be committed to the

achievement of organizational goals.achievement of organizational goals.

Focuses on the way a manager should personallyFocuses on the way a manager should personallymanage to motivate employees.manage to motivate employees.


18/28


Behavioral ManagementBehavioral Management

Mary ParkerFollettMary ParkerFollett

An influential leader in early managerial theoryAn influential leader in early managerial theory

Held a horizontal view of power and authority inHeld a horizontal view of power and authority inorganizationsorganizations

Suggested workershelpin analyzingtheir jobs forSuggested workershelpin analyzingtheir jobs for

improvementsimprovementstthe workerknowsthe best waytohe workerknowsthe best wayto

improvethe job.improvethe job.

If workershaverelevantknowledge ofthetask,thenIf workershaverelevantknowledge ofthetask,then

theyshould control thetask.theyshould control thetask.


19/28


Theory X and Theory YTheory X and Theory Y

Douglas McGregorproposed thetwo differentDouglas McGregorproposed thetwo differentsets ofassumptionsabout workers.sets ofassumptionsabout workers.

Theory X assumes the average worker is lazy,Theory X assumes the average worker is lazy,dislikes work and will do as little as possible.dislikes work and will do as little as possible.

Managersmust closelysuperviseand control throughManagersmust closelysuperviseand control through

reward and punishment.reward and punishment.

Theory Y assumes workers are not lazy, want to doTheory Y assumes workers are not lazy, want to doa good job and the job itself will determine if thea good job and the job itself will determine if the

worker likes the work.worker likes the work. Managersshould allow workersgreater latitude,andManagersshould allow workersgreater latitude,and

createan organization to stimulatethe workers.createan organization to stimulatethe workers.


20/28


21/28


Management Science TheoryManagement Science Theory

An approachto managementthat usesAn approachto managementthat usesrigorousquantitativetechniquesto maximizerigorousquantitativetechniquesto maximize

the use of organizational resources.the use of organizational resources.

Quantitative managementQuantitative managementutilizes linearutilizes linearprogramming, modeling, simulation systems.programming, modeling, simulation systems.

Operations managementOperations managementtechniques to analyzetechniques to analyzeall aspects of the production system.all aspects of the production system.

Total Quality Management (TQM)Total Quality Management (TQM)focuses onfocuses onimproving quality throughout an organization.improving quality throughout an organization.

Management Information Systems (MIS)Management Information Systems (MIS)pprovides information about the organization.rovides information about the organization.


22/28


Organizational Environment TheoryOrganizational Environment Theory

Organizational EnvironmentOrganizational Environment

The set of forces and conditions that operateThe set of forces and conditions that operatebeyond an organizations boundaries but affect abeyond an organizations boundaries but affect amanagers ability to acquire and utilize resources.managers ability to acquire and utilize resources.

..


23/28


The OpenThe Open--Systems ViewSystems View

Open SystemOpen System

A system that takes resources for its externalA system that takes resources for its externalenvironment and converts them into goods andenvironment and converts them into goods andservices that are then sent back to thatservices that are then sent back to that

environment for purchase by customers.environment for purchase by customers.

Inputs: the acquisition of external resources.Inputs: the acquisition of external resources.

Conversion: the processing of inputs into goods andConversion: the processing of inputs into goods andservices.services.

Output: the release of finished goods into theOutput: the release of finished goods into theenvironment.environment.


24/28


The Organization as an Open SystemThe Organization as an Open System

Figure 2.4


25/28


Other System ConsiderationsOther System Considerations

Closed systemClosed system

A system that is selfA system that is self--contained and thus notcontained and thus notaffected by changes occurring in its externalaffected by changes occurring in its externalenvironment.environment.

Often undergoes entropy and loses its ability toOften undergoes entropy and loses its ability tocontrol itself, and fails.control itself, and fails.

SynergySynergy

Performance that results when individuals andPerformance that results when individuals anddepartments coordinate their actionsdepartments coordinate their actions

Performancegains ofthe wholesurpassthesum ofPerformancegains ofthe wholesurpassthesum of

theperformance oftheindividual components.theperformance oftheindividual components.


26/28


Contingency TheoryContingency Theory

Contingency TheoryContingency Theory

The idea that the organizational structures andThe idea that the organizational structures andcontrol systems manager choose depend oncontrol systems manager choose depend onarearecontingent oncontingent oncharacteristics of the externalcharacteristics of the external

environment in which the organization operates.environment in which the organization operates.

Assumes there is no one best way to manage.Assumes there is no one best way to manage.

Theenvironmentimpactsthe firmand managersTheenvironmentimpactsthe firmand managers

must be flexibleto reactto environmental changes.must be flexibleto reactto environmental changes.

In rapidly changing organizational environments,In rapidly changing organizational environments,managers must find ways to coordinate differentmanagers must find ways to coordinate differentdepartments to respond quickly and effectively.departments to respond quickly and effectively.


27/28


Contingency Theory ofOrganizational DesignContingency Theory ofOrganizational Design

Figure 2.5Source:


28/28


Mechanistic and Organic StructuresMechanistic and Organic Structures

Mechanistic StructureMechanistic Structure

Authority is centralized at the top. (Theory X)Authority is centralized at the top. (Theory X)

Employees are closely monitored and managed.Employees are closely monitored and managed.

Can be very efficient in a stable environment.Can be very efficient in a stable environment.

Organic structureOrganic structure

Authority is decentralized throughout theAuthority is decentralized throughout theorganization. (Theory Y)organization. (Theory Y)

Tasks and roles are left ambiguous to encourageTasks and roles are left ambiguous to encourageemployees to react quickly to changingemployees to react quickly to changingenvironment.environment.

chap 2 lect

Documents