Chapter 2: Learning from the History of Management Thought Don Hellriegel Susan E. Jackson John W. Slocum, Jr. MANAGING: A COMPETENCY BASED APPROACH 11 th Edition Prepared by Argie Butler Texas A&M University

Chapter 2: PowerPoint 2.1 Learning from the History of Management Thought Learning Goals 1.Describe the three branches of the traditional viewpoint of management: 2.Explain the behavioral viewpoint’s contribution to management Bureaucratic, Scientific, and Administrative

Chapter 2: PowerPoint 2.2 Learning Goals (cont’d) 3.Describe how managers can use systems and quantitative techniques to improve employee performance 4.State the two major components of the contingency viewpoint 5.Explain the impact of the need for quality on management practices

Chapter 2: PowerPoint 2.3 Goals: Efficiency Consistency  Administrative Management  Bureaucratic Management  Scientific Management

Chapter 2: PowerPoint 2.4 (Adapted from Figure 2.1) Traditional Viewpoint Behavioral Viewpoint Systems Viewpoint Contingency Viewpoint Quality Viewpoint

Chapter 2: PowerPoint 2.5 Bureaucratic Management  Use of rules, hierarchy, a clear division of labor, and detailed procedures to guide employees’ behaviors  Seven characteristics RR ules—formal guidelines for the behavior of employees on the job II mpersonality—employees are evaluated according to rules and objective data DD ivision of Labor—splitting work into specialized positions

Chapter 2: PowerPoint 2.6  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 T raditional authority C harismatic authority R ational, 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—the use of the most efficient means available to accomplish a goal

Chapter 2: PowerPoint 2.7 “Each job has a policy manual detailing the rules that a person needs to follow to ensure efficiency. Drivers are told to walk to a customer’s door at a brisk pace of 3 feet per second, carrying the package in the right hand and clipboard in the left. They should knock on the door so as not to lose valuable seconds searching for a doorbell.” Michael Eskew Chairman and CEO, UPS Snapshot

Chapter 2: PowerPoint 2.8 (Adapted from Figure 2.3) LOWMIDRANGEHIGH DreamWorksSonyIRS R&D Thinktank7-11McDonalds MP3PepsiCo State Motor Vehicle Registration Bureaucratic Continuum

Chapter 2: PowerPoint 2.9 Potential Benefits of Bureaucracy  Efficiency  Consistency  Functions best when routine tasks are performed  Performance based on objective criteria  Most effective when  Large amounts of standard information have to be processed  The needs of the customer are known and are unlikely to change  The technology is routine and stable (e.g., mass production)  The organization has to coordinate the activities of employees in order to deliver a standardized service/product to the customer

Chapter 2: PowerPoint 2.10 Potential Costs of Bureaucracy Rigid rules and red tape Protection of authoritySlow decision making Incompatible with changing technology Incompatible with 21 st century workers’ values for freedom and participative management

Chapter 2: PowerPoint 2.11 Scientific Management  A philosophy and set of management practices that are based on fact and observation, not on hearsay or guesswork  Frederick W. Taylor Believed increased productivity depended on finding ways to make workers more efficient Used time-and-motion studies to analyze work flows, supervisory techniques, and worker fatigue Used functional foremanship, a division of labor that assigned eight foremen to each work area Assumed workers motivated by money

Chapter 2: PowerPoint 2.12 Scientific Management  The Gilbreths  Frank Gilbreth used motion pictures to analyze workers’ motions  Lillian Gilbreth championed protecting workers from unsafe working conditions  Henry Gantt  Focused on control systems for production scheduling (Gantt Chart)

Chapter 2: PowerPoint 2.13 Insights from Scientific Management  Many companies have used scientific management principles to improve efficiency, employee selection and training  Scientific management failed to recognize the social needs of workers and the importance of working conditions and job satisfaction

Chapter 2: PowerPoint 2.14 David Berbauer CEO, Walgreens “Walgreens is constantly pushing to drive costs down. It pioneered the application of satellite communications and computer technology and linked these to increase store efficiency. By using tried-and-proven management concepts, each of its 6,100 stores [is] able to process around 280 prescriptions a day and beat Wal-Mart by 27 cents and CVS by 94 cents on each prescription.” Snapshot

Chapter 2: PowerPoint 2.15 Administrative Management: Overview  Focuses on the manager and basic managerial functions of planning, organizing, controlling and leading  Unity of Command Principle: an employee should report to only one manager  Authority Principle: managers have the right to give orders to get things done

Chapter 2: PowerPoint 2.16 Behavioral Viewpoint: Overview  Focuses on dealing effectively with the human aspects of organizations  Started in the 1930’s  Emphasis on working conditions  Workers wanted respect  Workers formed unions to bargain with management

Chapter 2: PowerPoint 2.17 Mary Parker Follett’s Contributions  Managers need to communicate with workers  Workers should participate in solving problems  Managers need to establish good working relationships with employees Goal: Improve Coordination

Chapter 2: PowerPoint 2.18 “Managers need to have a common touch and to be a team leader and not a drill sergeant. When their people shine, they shine.” Vickie Yoke, Senior Vice President, Alcatel Snapshot

Chapter 2: PowerPoint 2.19 Chester Barnard’s Contributions  People should continuously communicate and cooperate with one another  Acceptance theory of authority holds that employees have free wills and, thus, choose whether to follow management’s orders. 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

Chapter 2: PowerPoint 2.20 Informal work groups control productivity Peer pressure to conform to norms is important Hawthorne effect: when employees are given special attention, productivity changes Productivity increases occur when managers recognize employee feelings

Chapter 2: PowerPoint 2.21 Employees are motivated by social needs and association with others Employees’ performance is more a result of peer pressure than management’s incentives and rules Managers need to involve subordinates in coordinating their work to improve efficiency Employees want to participate in decisions that affect them

Chapter 2: PowerPoint 2.22 Snapshot “Teamwork is one of the most beautiful experiences in life. Teamwork is our core value and a primary way that the Container Store enriches the quality of employees’ work life.” Kip Tindell, President, The Container Store

Chapter 2: PowerPoint 2.23  System: an association of interrelated and interdependent parts  Systems viewpoint: an approach to solving problems by diagnosing them within a framework of transformation processes, outputs, and feedback

Chapter 2: PowerPoint 2.24 (Adapted from Figure 2.4) Inputs Human, physical, financial, and information resources Transformation Process Outputs Products and services Feedback Loops

Chapter 2: PowerPoint 2.25  Closed system: limits its interactions with the environment (e.g., stamping department in GM assembly plant)  Open system: interacts with the external environment (e.g., marketing department)

Chapter 2: PowerPoint 2.26 Mathematical models are used to simulate changes Computers are essential Primary focus is on decision making Alternatives are based on economic criteria

Chapter 2: PowerPoint 2.27 Lead to creation of blogs Enables managers to simulate conditions Emphasis on objective criteria for decision making Focus on planning

Chapter 2: PowerPoint 2.28  Management practices should be consistent with the requirements of the external environment, the technology used to make a product or provide a service, and capabilities of the people who work for the organization  Uses concepts of the traditional, behavioral and system viewpoints

Chapter 2: PowerPoint 2.29  External environment—stable or changing  Technology—simple or complex  People—ways they are similar and different from each other

Chapter 2: PowerPoint 2.30 (Adapted from Figure 2.5) Behavioral Viewpoint How managers influence others;  Informal group  Cooperation among employees  Employee’s social needs Systems Viewpoint How the parts fit together.  Inputs  Transformations  Outputs Traditional Viewpoint What managers do:  Plan  Organize  Lead  Control Contingency Viewpoint Managers’ use of other viewpoints to solve problems involving:  External environment  Technology  Individuals

Chapter 2: PowerPoint 2.31  Quality: how well a product or service does what it is supposed to do—how closely and reliably it satisfies the specifications to which it is built or provided  Total Quality Management (TQM): a philosophy that makes quality values the driving force behind leadership, design, planning, and improvement initiatives

Chapter 2: PowerPoint 2.32  Inputs or raw materials  Operations  Outputs Measuring by variable or a product’s characteristics Measuring by attribute or a product’s acceptable/ unacceptable characteristics Statistical process control Quality of a process (e.g., sigma)

Chapter 2: PowerPoint 2.33 (Adapted from Figure 2.6) Lower Costs and Higher Market Share Decreased Product Liability Quality Positive Company Image