The Development of Modern Management Chapter 2 Lesson 2 The Development of Modern Management

What You’ll Learn The principals of total quality management Theory X and Theory Y Japanese management concepts and Theory Z

Initiation Are people lazy in general?

Theory X Assumes people are lazy and will avoid doing work Under this theory managers impose strict rules and make all important decisions themselves. Utilized by traditional organizations (ex. USPS)

Theory Y Assumes that people find satisfaction in their work. Believe people will be productive if placed in the right environment. Managers give their employees more freedom and allow them to make mistakes. Focus on creativity

Theories X and Y Allow employees freedom in some aspects & control their actions in others Many companies utilize a combination of both theories

Centralization versus Decentralization Centralization = a small group of managers make all the decisions Decentralization = decisions are made by managers at various levels within the organization. Which is the better approach? Example: Ford vs GM

Total Quality Management (TQM) TQM is based on involving all employees in a constant process of improving quality and productivity by improving how they work.

Japanese Management Practices Japanese companies were very successful after WW2. Managers encouraged more employee decision making and showed a deeper concern for the personal well-being of workers. Example: Honda

Theory Z Compromise between American and Japanese business practices. Incorporates Japanese collective decision making and concern for employees with American focus on individual responsibility.

Deming’s 14 Points Create consistent purpose for improving products and services in order to remain competitive. Adopt a new philosophy. We are in a new economic age. We can no longer live with commonly accepted levels of delays, mistakes, defective material, and defective workmanship. Stop depending on mass inspection. Require instead statistical evidence that quality is built in to eliminate need for inspection on a mass basis.

Deming’s 14 Points Consider quality as well as price in awarding business. Constantly improve the system of production and service. It is management’s job to work continually on the system. Institute a vigorous program of job training. Adopt and implement leadership. The responsibility of supervision must change from focusing on sheer numbers to quality. Improvement of quality will automatically improve productivity.

Deming’s 14 Points Drive out fear so that everyone may work effectively for the company. Break down barriers between departments. People in research, design, sales, and production must work as a team to foresee problems of production that may be encountered with various materials and specifications. Eliminate numerical goals, posters, and slogans for the workforce that asks for new levels of productivity without providing new methods.

Deming’s 14 Points Eliminate work standards that prescribe numerical quotas. Remove barriers that stand between the hourly worker and his or her right to pride of workmanship. Encourage education and self-improvement for everyone. Create a structure in top management that will work every day to achieve the above 13 points.

Deming’s 14 Points Question Of the 14 previously listed points, which one do you think is the most important? Why?

Math Activity Three out of every 500 pairs of jeans your factory produces are defective and need to be thrown away. If the cost of each pair of discarded jeans is $9, how much money is your company losing on every 10,000 pairs of jeans it produces? 10,000/ 500 = 20 20 x 3 = 60 60 x $9 = $540

Exit If you were a manager, which theory would you implement? Why?