The Evolution Of Management Chapter 2 The Evolution Of Management Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Learning Objectives Describe the three branches of the traditional viewpoint of management: Bureaucratic Scientific Administrative Explain the behavioral viewpoint’s contribution to management Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Learning Objectives (Cont) Describe how managers can use systems and quantitative techniques to improve employee performance State the two major components of the contingency viewpoint Explain the impact of the need for quality on management practices Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

History of Management Thought Quality Viewpoint Contingency Viewpoint Systems Viewpoint Behavioral Viewpoint Traditional Viewpoint 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Traditional (classical) Viewpoint Bureaucratic Management Scientific Management Administrative Management Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Bureaucratic Management Refers to the use of rules, a set of hierarchy, a clear division of labor, and detailed procedures. - Rules- formal guidelines for the behavior of employees on the job. - Impersonality- employees are evaluated according to rules and objective data. - Division of labor- splitting work into specialized positions. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Bureaucratic Management (cont.) Hierarchical Structure- ranks jobs according to the amount of authority in each job. Authority- who has the right to make decisions of varying importance at different organizational levels. Traditional authority Charismatic authority Rational, legal authority Lifelong Career Commitment- both the employee and the organization view themselves committed to each other over the working life of the employee. Rationality- is the use of the most efficient means available to accomplish a goal. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Mid-Range Bureaucracy Range of Bureaucracy Amazon.com Pepsi-Cola IRS Blockbuster Video Cisco Systems Procter & Gamble Sony McDonald’s Starbucks Low Bureaucratic Structure High Bureaucratic Orientation Mid-Range Bureaucracy Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Characteristics of Traditional Management Bureaucratic Management Scientific Management Administrative Management Administrative Characteristics Rules Impersonality Division of Labor Hierarchy Authority Structure Lifelong Career Commitment Rationality Focus Whole Organization Administrative Characteristics Training in routines and rules “One Best Way” Financial Motivation Focus Employee Administrative Characteristics Defining of management functions Division of Labor Hierarchy Authority Equity Focus Manager Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Characteristics of Traditional Management (cont.) Bureaucratic Management Scientific Management Administrative Management Benefits Consistency Efficiency Drawbacks Rigidity Slowness Benefits Productivity Efficiency Drawbacks Overlooks social needs Benefits Clear structure Professionalization of managerial roles Drawbacks Internal focus Overemphasizes rational behavior of managers Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Behavioral Viewpoint Focuses on dealing effectively with the human aspects of organizations. Mary Parker Follett - Coordination is best when people making a decision are in direct contact. - Coordination during the early stages of planning and project implementation is essential. - Coordination should address all factors in a situation. - Coordination must be worked at continuously. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Behavioral Viewpoint (cont.) Chester Barnard - Viewed organizations as social systems. - People should continuously communicate with one another. - “Acceptance” theory of authority Employees will follow orders if they * understand what is required * believe the orders are consistent with organization goals * see positive benefits to themselves in carrying out the orders Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Behavioral Viewpoint (cont.) Hawthorne effect - When employees are given special attention, productivity is likely to change regardless of whether working conditions change. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

System Viewpoint A system is an association of interrelated and interdependent parts. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Basic Systems View of Organization Environment INPUTS Human, physical, financial, and information resources TRANS-FORMATION PROCESS OUTPUTS Products and Services Feedback loops Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

System Types A closed system limits its interactions with the environment. An open system interacts with the external environment. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Contingency Viewpoint (Sometimes called the situational approach) indicates that management practices should be consistent with the requirements of the external environment. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Contingency Viewpoint 2.8 Contingency Viewpoint Behavioral Viewpoint How managers influence others: Informal Group Cooperation among employees Employees’ social needs Traditional Viewpoint What managers do: Plan Organize Lead Control Systems Viewpoint How the parts fit together: Inputs Transformations Outputs Contingency Viewpoint Managers’ use of other viewpoints to solve problems involving: External environment Technology Individuals Adapted from Figure 2.5 Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Quality Viewpoint Quality is how well a product or service does what it is supposed to do. Total Quality Management (TQM) is the continuous process of ensuring that every aspect of production builds quality into the product. Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Importance of Quality Lower Costs & Higher Market Positive Company 2.09 Importance of Quality Lower Costs & Higher Market Share Positive Company Image QUALITY Decreased Product Liability Adapted from Figure 2.6 Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved

Integration of Management Viewpoints and Competencies 2.10 Integration of Management Viewpoints and Competencies Managerial Competency Management Viewpoint Traditional Behavioral Systems Contingency Quality X X X X X X X X X X X X Communication Planning and administration Strategic action Self-management Global awareness Teamwork X = relatively high importance Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved Adapted from Table 2.3