The Evolution of Management Thought Chapter 1

Major Tasks of Management: Decide the purpose and mission of the organization Make work productive Manage social impacts and responsibilities

Management Has Different Meanings Primary views of management state that management is a: Process Discipline Human activity Career

Management Is a Process Implies that management: Is some type of work or set of activities Activities are performed well or not well Involves certain functions and activities

Management Is a Discipline Implies that management: Is an accumulated, “learnable” body of knowledge Is a subject with principles, concepts, and theories Has a purpose of learning how to apply principles, concepts, and theories at the right time and under the right circumstances to produce desired results

Management Is a Human Activity Implies that management: Refers to people in the management process Refers to and emphasizes employees’ importance

Management Is a Career Implies that management: Is a progression through a sequence of activities, jobs, organizations, and challenges Requires constant learning of new skills and updating information on business and its industry

The Functions of Management Leading Planning Organizing Controlling

Management Function—Leading Integrates everything a manager does Leader has: Ability to influence others Vision or mission Courage and commitment

Management Function—Planning Capstone activity of management All managers plan at all levels Determine an organization’s goals in order to be successful Establish strategies to achieve goals

Management Function—Organizing Turn plans into actions Create a structure of task and authority relationships to achieve goals Assign tasks to individuals and groups

Management Function—Controlling Ensure that actual performance conforms to planned performance requiring management to: Establish standards of performance Locate deviations between actual and planned standards Correct performance not meeting standards

History of Management Thought

Management Thought Has Been Grouped Into Three Approaches: Classical Behavioral Management Science

Classical Approach

Classical Approach Late 19th century effort to understand work and how workers can be more productive and efficient Two perspectives: Scientific management Classical organization theory

Scientific Management Focus is on the management of work Focus on the physical environment Concentrate on the problems of lower-level managers dealing with the everyday problems of the work force Study work processes to make them more efficient in order to better use labor at that time—unskilled, no formal education, largely immigrant Primary contributors—engineers

Scientific Management—Contributors Frederick W. Taylor, “father of scientific management,” developed 4 principles based on his beliefs that the interests of both management & labor can be combined: 1 best way to do a job Optimum work pace Train people to do a job Reward using incentive pay system Frank & Lillian Gilbreth, “time & motion studies,” break down job motions into elementary parts and find better ways to perform each part

Classical Organization Theory Focus is on the management of organizations Concentrate on the problems top-level managers face in managing the organization as a whole Two major purposes: Develop basic principles to create, and maintain large organizations Identify basic functions of managing organizations Primary contributors—practicing executives

Classical Organization Theory—Contributors Max Weber, “theory of bureaucracy,” thought an organization should be based on 5 principles: Formal authority of managers Jobs based on qualifications Authority and responsibility clearly defined Hierarchical positions Rules and SOPs control organization Modern ideas based on Weber: TQM, process specialization, competency testing

Classical Organization Theory—Contributors (cont) Henri Fayol developed 14 principles essential to effective management: 1. Division of labor 2. Management authority and responsibility 3. Unity of command 4. Line of Authority 5. Centralization 6. Unity of direction 7. Equity 8. Order 9. Initiative 10. Discipline 11. Remuneration 12. Tenure Stability 13. Common Interest 14. Esprit De Corps

Classical Approach—Pros & Cons Contributions Identify management as an important element of organized society Basis for training new managers Acknowledge importance of managers Many current techniques are direct outgrowths Limitations Too simplistic for today’s complex organizations More appropriate for stable & predictable environments Shallow understanding of human nature and how people interact

Behavioral Approach

Behavioral Approach Developed because (a) classical approach didn’t achieve total efficiency and workplace harmony and (b) managers still encountered problems because workers didn’t always behave as they were supposed to Two branches: Human Relations Approach Behavioral Sciences Approach

Human Relations Approach Focus on the social environment of a job Refers to the manner in which managers interact with subordinates Managers must know why subordinates behave as they do Importance of individuals in success or failure of an organization

Human Relations Approach—(cont.) Management should recognize employees’ need for recognition and social acceptance Management should look on work group as a positive force Managers should be trained in human relations skills as well as in technical skills

Behavioral Sciences Approach Focus is on the nature of work itself Individuals are motivated to work for reasons other than money and social relationships— recognition, societal contributions, personal fulfillment

Behavioral Sciences Approach—Contributors Mary Parker Follett viewed organizations from the perspective of individual or group behavior, i.e., people-centered view. Managers’ job is to harmonize and coordinate group efforts Hawthorne Studies varied lighting levels at the Western Electric Company; productivity increased regardless of the illumination level Elton Mayo replicated Hawthorne Studies and the results; workers enjoyed the attention and produced the results they believed researchers wanted

Behavioral Sciences Approach—Pros & Cons Contributions Contribute to people—managing aspect of management Use of teams Focus on training & development Use of reward & incentive systems Limitations Doesn’t always help managers in problem situations Difficulty in translating technical findings into useful tools and policies Variety of viewpoints complicates the problem

Management Science Approach

Management Science Approach Developed to solve complex military problems in World War II, American business firms began to use a similar approach to deal with operating issues Formerly called operations research, this approach uses mathematics and statistics to aid in resolving production and operations problems Solve technical rather than human behavior problems; analyze the problem and often develop a mathematical representation of it Provide management with quantitative bases for decisions

Management Science Approach—Pros & Cons Contributions Techniques that help with production management—scheduling, budgeting, inventory Techniques that help with operations management— development programs, aircraft scheduling Limitations Not a substitute for management Doesn’t deal with the people aspect of a organization

Systems Approach Contingency Approach Integrating the 3 Approaches— Classical, Behavioral, and Management Science Systems Approach Contingency Approach

Systems Approach Views an organization as interrelated parts with a unified purpose: surviving and ideally thriving in its environment Management should focus on efficiency and effectiveness in each part of the organization Elements of an organization are interconnected Organization is linked to its environment Open Systems vs. Closed Systems

Contingency Approach Helps in better understanding the interactions of an organization’s components. Views an organization as interrelated parts with a unified purpose: surviving and ideally thriving in its environment Workplace situations are too complex to analyze and control; thus, instead of focusing on trying to find the one best way to arrange workplace variables, managers focus on adapting their behavior to match the demands of the situation

End of Chapter 1