The Evolution of Management Thinking Chapter 2 The Evolution of Management Thinking

Management and Organization Studying management history helps your conceptual skills Social Forces – influence of culture that guides people and relationships Political Forces – influence of political and legal institutions Economic Forces – the availability, production, and distribution of resources Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.1 Management Perspectives over Time Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Classical Perspective Emerged during the nineteenth and early twentieth centuries Rise of the factory system Issues regarding structure, training, and schedule complex manufacturing operations Large, complex organizations required new approaches to coordination and control Three subfields: scientific management, bureaucratic organizations, and administrative principles Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

1. Scientific Management Improve efficiency and labor productivity through scientific methods Frederick Winslow Taylor proposed that workers “could be retooled like machines” Management decisions would be based on precise procedures based on study Henry Gantt developed the Gantt Chart to measure and plan work The Gilbreth’s pioneered time and motion studies to promote efficiency Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.2 Characteristics of Scientific Management Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.Bureaucratic Organizations Max Weber, a German theorist, introduced the concepts Manage organized on an impersonal, rational basis Organization depends on rules and records Managers use power instead of personality to delegate Although important productivity gains come from this foundation, bureaucracy has taken on a negative tone Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.3 Characteristics of Weberian Bureaucracy Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

3.Administrative Principles Focused on the entire organization Henri Fayol, a French mining engineer, was a major contributor Identified five functions of management: planning, organizing, commanding, coordinating, and controlling 14 general principles of management; many still used today: Unity of command-receive orders form one superior Division of work Unity of direction-group similar activities under one manager Scalar chain Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Humanistic Perspective: Early Advocates Mary Parker Follett and Chester Barnard Understand human behaviors, needs, and attitudes in the workplace Importance of people rather than engineering techniques: contrast to scientific management Empowerment: facilitating instead of controlling Recognition of the informal organization Introduced acceptance theory of authority-choice to choose to follow or otherwise Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Humanistic Perspective: Human Relations Movement Effective control comes from within the employee than authoritarian control Hawthorne studies were key contributor Human relations key variable in increasing performance Employees performed better when managers treated them positively Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Humanistic Perspective: Human Resources Perspective From worker participation and considerate leadership to managing work performance Combine motivation with job design Maslow and McGregor extended and challenged current theories Maslow’s Hierarchy Theory X and Theory Y Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.4 Theory X and Theory Y Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Humanistic Perspective: Behavioral Sciences Approach Uses Scientific methods + sociology, psychology, anthropology, economics…etc to develop theories on behavior & interaction in organization Organizational Development – field that uses behavioral sciences to improve organization e.g. coping with change, improve internal r/ship, increase problem solving capabilities Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Quantitative Perspective Also referred to as management science Use of mathematics and statistics to aid management decision making Enhanced by development and growth of the computer Operations Management focuses on the physical production of goods and services Information technology focuses on technology and software to aid managers Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Recent Trends: Systems Thinking The ability to see the distinct elements of a situation as well as the complexities The relationship among the parts form the whole system Subsystems are parts of the system that are all interconnected Synergy – the whole is greater than the sum of its parts Managers must understand subsystem interdependence and synergy Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.5 Systems Thinking and Circles of Causality Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Recent Trends: Contingency View Every situation is unique, there is no universal management theory Managers must determine what method will work Managers must identify key contingencies for the current situation Organizational structure should depend upon industry and other variables Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.6 Contingency View of Management Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Recent Trends: Total Quality Management Quality movement is strongly associated with Japan The US ignored the ideas of W. Edwards Deming, “Father of the Quality Movement” Total Quality Management (TQM) became popular in the 1980s and 90s Integrate high-quality values in every activity Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Elements of Quality Management Employee involvement Focus on the customer Benchmarking Continuous improvement Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Innovative Management: Thinking for a Changing World Management ideas trace their roots to historical perspectives New ideas continue to emerge to meet the changing needs and difficult times The shelf life of trends is getting shorter and new ideas peak in fewer than three years Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Managing the Technology- Driven Workplace Customer Relationship Management – technology used to build relationship with customers Outsourcing – contracting functions or activities to other organizations to cut costs Supply Chain Management – managing supplier and purchaser relationships to get goods to consumers Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2.7 Supply Chain for a Retail Organization Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.