The Evolution of Management Theory Chapter 2 The Evolution of Management Theory

Learning Objectives Identify and explain major developments in the history of management thought. Describe and compare scientific management, administrative management and behavioral management theories. What role does contingency play in organizations? Explain the importance of the external environment in management theories.

Evolution of Management Theory Evolution of Management Theory Influences on Management Practice Social Forces … values, needs, and standards of behavior. – Family versus Work Political Forces … influence of political and legal institutions on people & organizations –government systems, capitalism Economic Forces … forces that affect the availability, production, & distribution of a society’s resources. Machines replacing labor, technology

Late 1800s to 1940 Emphasized a rational, scientific approach to the study of management. Sought to make organizations efficient.

Scientific Management Scientific Management Pioneered by Frederick Taylor Standard of living is low and production is labor intensive at the beginning of this period Developed precise, standardized procedures for doing each job Focused on efficiency – “one best way to do the job” Used wage incentive plans. Workers earn higher pay – management higher profits. Emphasized selecting workers based on abilities and training workers

Scientific Management Scientific Management Frank and Lillian Gilbreth Studied fatigue caused by lighting, heating and design of tools and machines Time and Motion studies (often filmed workers performing tasks) Broke up each job action into its components Sought better ways to perform the task Reorganize job action to be more efficient

Administrative principles Administrative principles What comes to mind when you hear the word “bureaucracy?” Max Weber developed five principles of bureaucracy in Germany Designed to ensure efficiency and effectiveness in organizations

Administrative principles Administrative principles Max Weber’s principles: Manager’s authority derives from position in organization People should be given position because of performance Each position’s responsibility and authority should be clearly defined Clearly specified hierarchy of authority System of rules and standard operating procedures which specify how employees should behave.

Administrative principles Administrative principles Henri Fayol’s 14 Principles of Management Still the foundation for much of management theory of today Some notable mentions of principles Manager’s informal authority from expertise, moral worth and ability to lead Unity of command Important to limit the length of the chain of command Managers should allow employees to be innovative and creative Equity to all organizational members Esprit de Corps

Behavioral Management Theory Behavioral Management Theory Emphasized understanding human behavior. Dealt with needs & attitudes in the workplace. Truly effective control comes from within the individual worker rather than authoritarian control. Hawthorne Studies brought this perspective to forefront.

Behavioral Management Theory Behavioral Management Theory Mary Parker Follett Scientific management approaches ignored human side of organization Management should involve workers in finding better ways to perform tasks Knowledge and expertise should be deciding factor in who should lead – not manager’s formal authority Precursor to self-managed teams

Behavioral Management Theory “Managers get things done through people” Behavioral Management Theory “Managers get things done through people” Western Electric Company’s Hawthorn Studies (1920s)– Elton Mayo Started from studies looking at how amount of illumination affected productivity – found that productivity increased in control and experimental groups Numerous experiments performed on wage incentives, job design, etc. over a decade found that positive treatment of employees had more influence on group productivity. Money isn’t the only motivator – group norms, standards New emphasis on “human factor” in management

Theory X & Y – Douglas McGregor Theory X & Y – Douglas McGregor Theory X Theory Y People are lazy People lack ambition Dislike responsibility People are self-centered People don’t like change People are energetic People want to make contributions People do have ambition People will seek responsibility

The Contingency Approach The Contingency Approach There is no one best way to organize. Situations are unique. There are no universal principles of management. Managers search for key contingencies – important patterns and characteristics for organizations to be effective, there must be a “goodness of fit” between their structure and the conditions in their external environment.

Characteristics of the New Workplace Characteristics of the New Workplace Economic Forces Work centered around information and ideas Globalization of markets Work is often virtual

Characteristics of the New Workplace Characteristics of the New Workplace Social Forces Coordination of Family and Work Increased Longevity of Workers – Multi-generations Cultural Diversity of Workers Social Responsibility