Introduction to Management 11e John Schermerhorn Chapter 2 History of Management Thought

Planning Ahead — Chapter 2 Study Questions What can be learned from classical management thinking? What insights come from behavioral management approaches? What are the foundations of modern management thinking?

Figure 2.1 Major branches in the classical approach to management

Scientific management (Frederick Taylor) Study Question 1: What can be learned from classical management thinking? Scientific management (Frederick Taylor) Develop rules of motion, standardized work implements, and proper working conditions for every job Carefully select workers with the right abilities for the job Carefully train workers and provide proper incentives Support workers by carefully planning their work and removing obstacles

Scientific management (the Gilbreths) Study Question 1: What can be learned from classical management thinking? Scientific management (the Gilbreths) Motion study Science of reducing a job or task to its basic physical motions Eliminating wasted motions improves performance

Practical lessons from scientific management Study Question 1: What can be learned from classical management thinking? Practical lessons from scientific management Make results-based compensation a performance incentive Carefully design jobs with efficient work methods Carefully select workers with the abilities to do these jobs Train workers to perform jobs to the best of their abilities Train supervisors to support workers so they can perform jobs to the best of their abilities

Administrative principles (Henri Fayol) — rules of management: Study Question 1: What can be learned from classical management thinking? Administrative principles (Henri Fayol) — rules of management: Foresight to complete a plan of action for the future Organization to provide and mobilize resources to implement the plan Command to lead, select, and evaluate workers to get the best work toward the plan Coordination to fit diverse efforts together and ensure information is shared and problems solved Control to make sure things happen according to plan and to take necessary corrective action

Administrative principles (Henri Fayol) Study Question 1: What can be learned from classical management thinking? Administrative principles (Henri Fayol) Scalar chain there should be a clear and unbroken line of communication from the top to the bottom of the organization Unity of command each person should receive orders from only one boss Unity of direction one person should be in charge of all activities with the same performance objective

Bureaucratic organization (Max Weber) Study Question 1: What can be learned from classical management thinking? Bureaucratic organization (Max Weber) Bureaucracy An ideal, intentionally rational, and very efficient form of organization Based on principles of logic, order, and legitimate authority

Characteristics of bureaucratic organizations: Study Question 1: What can be learned from classical management thinking? Characteristics of bureaucratic organizations: Clear division of labor Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit

Possible disadvantages of bureaucracy: Study Question 1: What can be learned from classical management thinking? Possible disadvantages of bureaucracy: Excessive paperwork or “red tape” Slowness in handling problems Rigidity in the face of shifting needs Resistance to change Employee apathy Chapter 2

Figure 2.2 Foundations in the behavioral or human resource approaches to management Human resource approaches Assumption: People are social and self-actualizing Theory of human needs Abraham Maslow Hawthorne studies Elton Mayo Organizations as communities Mary Parker Follett Theory X and Theory Y Douglas McGregor Personality and organization Chris Argyris

Behavioral Management - human resource approaches include: Study Question 2: What insights come from the behavioral management approaches? Behavioral Management - human resource approaches include: Hawthorne studies Maslow’s theory of human needs Mary Parker Follett’s Organizations as communities McGregor’s Theory X and Theory Y Argyris’s theory of adult personality

Organizations as communities – Mary Parker Follett Study Question 2: What insights come from the behavioral management approaches? Organizations as communities – Mary Parker Follett Groups and human cooperation: Groups allow individuals to combine their talents for a greater good Organizations are cooperating “communities” of managers and workers Manager’s job is to help people cooperate and achieve an integration of interests

Organizations as communities Study Question 1: What can be learned from classical management thinking? Organizations as communities Forward-looking management insights: Making every employee an owner creates a sense of collective responsibility precursor of employee ownership, profit sharing, and gain-sharing Business problems involve a variety of inter-related factors precursor of systems thinking Private profits relative to public good precursor of managerial ethics and social responsibility

Study Question 2: What insights come from the behavioral management approaches? Hawthorne studies Initial study examined how economic incentives and physical conditions affected worker output No consistent relationship found “Psychological factors” influenced results

Hawthorne studies (cont.) Study Question 2: What insights come from the behavioral management approaches? Hawthorne studies (cont.) Relay assembly test-room studies Manipulated physical work conditions to assess impact on output Designed to minimize the “psychological factors” of previous experiment Factors that accounted for increased productivity: Group atmosphere Participative supervision

Hawthorne studies (cont.) Study Question 2: What insights come from the behavioral management approaches? Hawthorne studies (cont.) Employee attitudes, interpersonal relations and group processes Some things satisfied some workers but not others People restricted output to adhere to group norms

Lessons from the Hawthorne Studies: Study Question 2: What insights come from the behavioral management approaches? Lessons from the Hawthorne Studies: Social and human concerns are keys to productivity Hawthorne effect — people who are singled out for special attention perform as expected

Maslow’s theory of human needs Study Question 2: What insights come from the behavioral management approaches? Maslow’s theory of human needs A need is a physiological or psychological deficiency a person feels compelled to satisfy Need levels: Physiological Safety Social Esteem Self-actualization

Figure 2.3 Maslow’s hierarchy of human needs

Maslow’s theory of human needs Study Question 2: What insights come from the behavioral management approaches? Maslow’s theory of human needs Deficit principle A satisfied need is not a motivator of behavior Progression principle A need becomes a motivator once the preceding lower-level need is satisfied Both principles cease to operate at self-actualization level

McGregor’s Theory X assumes that workers: Study Question 2: What insights come from the behavioral management approaches? McGregor’s Theory X assumes that workers: Dislike work Lack ambition Are irresponsible Resist change Prefer to be led

McGregor’s Theory Y assumes that workers are: Study Question 2: What insights come from the behavioral management approaches? McGregor’s Theory Y assumes that workers are: Willing to work Capable of self control Willing to accept responsibility Imaginative and creative Capable of self-direction

Implications of Theory X and Theory Y: Study Question 2: What insights come from the behavioral management approaches? Implications of Theory X and Theory Y: Managers create self-fulfilling prophecies Theory X managers create situations where workers become dependent and reluctant Theory Y managers create situations where workers respond with initiative and high performance Central to notions of empowerment and self-management

Argyris’s theory of adult personality Study Question 2: What insights come from the behavioral management approaches? Argyris’s theory of adult personality Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality

Argyris’s theory of adult personality Study Question 2: What insights come from the behavioral management approaches? Argyris’s theory of adult personality Management practices should accommodate the mature personality by: Increasing task responsibility Increasing task variety Using participative decision making

Foundations for continuing developments in management Study Question 3: What are the foundations of modern management thinking? Foundations for continuing developments in management Quantitative analysis and tools Systems view of organizations Contingency thinking Commitment to quality and performance Knowledge management and learning organizations Evidence-based management

Supply chain management Study Question 3: What are the foundations of modern management thinking? Management science or operations research The scientific applications of mathematical techniques to management problems Value chain analysis Supply chain management Inventory management Quality control Queuing theory Linear programming Network models

Management science or operations research Study Question 3: What are the foundations of modern management thinking? Management science or operations research Queuing theory allocates service personnel/workstations to minimize service cost and customer waiting time Network models break large tasks into smaller components for for better coordination Simulations create problem models to test different solutions

Study Question 3: What are the foundations of modern management thinking? Operations management is the study of how organizations produce goods and services

Organizations as Systems Study Question 3: What are the foundations of modern management thinking? Organizations as Systems System Collection of interrelated parts that function together to achieve a common purpose Subsystem A smaller component of a larger system Open systems Organizations that interact with their environments in the continual process of transforming resource inputs into outputs

Figure 2.4 Organizations as complex networks of interacting subsystems

Study Question 3: What are the foundations of modern management thinking? Contingency thinking Tries to match managerial responses with problems and opportunities unique to different situations No “one best way” to manage Appropriate way to manage depends on the situation

Quality and performance excellence Study Question 3: What are the foundations of modern management thinking? Quality and performance excellence Managers and workers in progressive organizations are quality conscious Quality and competitive advantage are linked Total quality management (TQM) Comprehensive approach to continuous quality improvement for a total organization Creates context for the value chain

Quality and performance excellence Study Question 3: What are the foundations of modern management thinking? Quality and performance excellence ISO certification Global quality benchmark Refine and upgrade quality to meet ISO standards Continuous improvement Continual search for new ways to improve quality Something always can and should be improved

Knowledge Management and Organizational Learning Study Question 3: What are the foundations of modern management thinking? Knowledge Management and Organizational Learning Knowledge management is the process of using intellectual capital for competitive advantage Portfolio of intellectual assets include patents, intellectual property rights, trade secrets, and accumulated knowledge of the entire workforce

Learning organizations Study Question 3: What are the foundations of modern management thinking? Learning organizations Organizations that are able to continually learn and adapt to new circumstances Core ingredients include: Mental models Personal mastery Systems thinking Shared vision Team learning

Evidence-Based Management Study Question 3: What are the foundations of modern management thinking? Evidence-Based Management Making management decisions on “hard facts” about what really works

Evidence-Based Positive Human Resource Management Practices Study Question 3: What are the foundations of modern management thinking? Evidence-Based Positive Human Resource Management Practices Employment security Selective hiring Self-managing teams High pay based on merit Training and development Reduced status distinctions Shared information

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