1. Chapter 2 – Management Yesterday and Today
Importance of studying management history
Early examples of management practice
Scientific management
General administrative theories
Quantitative approach to management
Organizational Behavior and the Hawthorne studies
The systems approach (closed versus open systems)
The contingency approach

2. Early Examples of Management
Egyptian Pyramids
20 years
100,000 people
Began 221 BC
Over 4,000 miles
300,000 people
Great Wall of China

3. Adam Smith’s “Wealth of Nations”: Division of Labor
10 people doing all tasks
10 pins per day
48,000 pins per day
10 people doing specialized tasks

4. Industrial Revolution – 1700’s
1) Machine power
Steam, coal, fossil fuels, electricity
2) Mass production
Moving assembly line – Ford
3) Efficient transportation
Railroad, steamship
Result: Big Corporations Needed Management!

5. Development of Major Management Theories
Exhibit 2.1

6. Taylor’s Pig-Iron Experiment
Tonnage
Shovel Load
92 lbs
38 lbs
34 lbs
21 lbs
16 lbs
12,500
25,000
30,000
48,000
Wage increase: $1.15 to $1.85 per day
Q: What’s the “one best way”?

7. Theory of Scientific Management
Fredrick Winslow Taylor – the “father”
Using scientific methods to define the “one best way” for a job to be done:
Put the right person on the job with the correct tools and equipment.
Standardize the method of doing the job.
Providing an economic incentive to the worker.

8. Frederick Taylor’s Principles of Scientific Management
Develop a science for each element of work
Select, train, and develop workers
Cooperate with workers to make sure work done as planned
Divide work and responsibility equally between management and workers
Management takes over all work for which better suited

9. Frank and Lillian Gilbreth’s Hand and Body Studies
Used motion pictures to study hand and body motions
17 “Therbligs”
Reduced number of motions from 18 to 2 (interior)
Movie and Book - “Cheaper by the Dozen”

10. Is Scientific Management Alive Today?
YES
Time and motion studies are still used
Still hire the best qualified employees
Still design incentive systems based on output
BUT
Rotate workers through various jobs
Make sure jobs are ergonomically correct
Teach front-line employees to use their BRAINS!

11. Scientific Management at Organizational Level - General Administrative Theorists
Q: What “rules” make organizations work like well-organized machines, just like workers?
Henri Fayol
Developed fourteen principles of management that applied to all organizational situations
Max Weber
Ideal organization = bureaucracy
Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism

12. Fayol’s 14 Principles of Management
Remuneration.
Centralization.
Scalar chain.
Order.
Equity.
Stability of tenure of personnel.
Initiative.
Esprit de corps.
Division of work.
Authority.
Discipline.
Unity of command.
Unity of direction.
Subordination of individual interest to the interests of the organization.
Exhibit 2.3

13. Weber’s Ideal Bureaucracy
Exhibit 2.4
Q: Are bureaucracies alive today?

14. “Modern Times” Discussion Questions
What evidence did you see of Scientific Management?
What evidence did you see of a bureaucracy?
What are the benefits of SM/bureaucracy?
What are the drawbacks of SM/bureaucracy?

15. Quantitative Approach to Management
Also called operations research or management science
Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems
Focuses on improving managerial decision making by applying:
Statistics, optimization models, information models, and computer simulations

16. Organizational Behavior (OB)
The study of the actions of people at work; people are the most important asset of an organization

17. The Hawthorne Studies
Control Group
Experimental Group

18. Early Advocates of OB
Exhibit 2.5

19. The Systems Approach System Defined Basic Types of Systems
A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
Basic Types of Systems
Closed systems
Are not influenced by and do not interact with their environment (all system input and output is internal).
Open systems
Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.

20. The Organization as an Open System
Exhibit 2.6

21. Implications of the Systems Approach
Coordination of the organization’s parts is essential for proper functioning of the entire organization.
Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.
Organizations are not self-contained and, therefore, must adapt to changes in their external environment.

22. The Contingency Approach
Contingency Approach Defined
Also sometimes called the situational approach.
There is no one universally applicable set of management principles (rules) by which to manage organizations.
Organizations are individually different, face different situations (contingency variables), and require different ways of managing.

23. Popular Contingency Variables
Organization size
Routineness of task technology
Environmental uncertainty
Individual differences
Exhibit 2.7