1. Management History

2. Early Example of Management
Egyptian Pyramids
Great Wall of China

3. 2 Events are Important for Management History
Division of Labor (Job Specialization) from The Wealth of Nations by Adam Smith
Industrial Revolution

4. Division of Labor (Job Specialization)
The breakdown of jobs into narrow & repetitive tasks.
Example of the pin industry among 10 individuals:
They doing a specialized task = 48,000 pins a day
They performing each task separately = 10 pins a day
Smith concluded that it increased productivity by increasing each worker’s skill and dexterity, saving time lost in changing tasks, and creating labor-saving inventions and machinery.

5. Industrial Revolution
Machine power was substituted for human power as it was more economical to manufacture goods in factories than at home.
“Managers” are required in these factories in order to forecast demand, ensure that enough material was on hand to make products, assign tasks to people, direct daily activities, and etc.

6. 4 Management Approaches
Classical Approach
Quantitative Approach
Behavioral Approach
Contemporary Approach

7. I. Classical Approach Emphasis on ways to manage work more efficiently
2 major theories:
A) Scientific Management
B) Administrative Management

8. A) Scientific Management
Emphasized scientific study of work methods to improve productivity (the rate at which goods are produced) of individual workers
Proponents:
Frederick Winslow Taylor
Frank and Lillian Gilbreth

9. Frederick Winslow Taylor
Known as “the father of scientific management”
He used the scientific methods to define the “one best way” for doing each job which included:
put the right person on the job with the correct tools & equipment,
had the worker follow his instructions exactly,
and motivated the worker with an economic incentive of significantly higher daily wage differential rate system (piece rate system.)
4 principles of scientific management

10. 4 Principles of Scientific Management
Evaluate a task by scientifically studying each part of the task
Carefully select workers with the right abilities for the task
Give workers the training and incentives to do the task with proper work methods
Use scientific principles to plan the work methods and ease the way for workers to do their jobs

11. Frank and Lillian Gilbreth
They studied work to eliminate inefficient hand-and-body motions for more productive work performance.
Invented a microchronometer for recording a worker’s motions and amount of time spend doing each motion to reduce wasted motions missed by naked eye.
Created “therbligs” to classify 17 basic hand motions for more precise way of analyzing a worker’s exact hand movements.
Applied scientific management principles and techniques in raising their 12 children and running their household efficiently as known in book wrote by 2 of their children, movies and TV sitcom “Cheaper by the Dozen”.

12. B) General Administrative Theory
Concerned with managing the total organization
Proponents:
Henry Fayol
Max Weber

13. Henri Fayol
Was the first to identify 5 functions of management: planning, organizing, commanding, coordinating, controlling
Developed 14 principles of management which are fundamental rules for managing all kind of organizations

14. Max Weber
Developed theory of authority structures and relations based on ideal type of organization called “bureaucracy.”

15. Weber’ Bureaucratic Features
Division of Labor: clear and well-defined tasks in each division
Authority Hierarchy: clear and well-defined positions and chain of command
Formal Selection: recruitment is based on ability/qualification
Formal Rules and Regulations: clear system of written rules & procedures
Impersonality: same rules and controls are applied for everyone
Career Orientation: understand the concept of being a manager

16. Max Weber
Later on, he recognized this ‘ideal bureaucracy’ didn’t exist in reality after many people were in positions of authority (esp. government) not because of their abilities but because of their social status.

17. II. Quantitative Approach (or Management Science)
Applies quantitative techniques involve applying statistics, optimization models, information models, computer simulations, and etc. to management activities such as decision making process
Example: Linear programming is a technique managers use to improve resource allocation decision

18. Linear Programming
Is a mathematical method of finding the best way in the operation with the limited resources in order to help manager in making the decision.
Example of Problem: there are 3 products require 3 raw materials in production (raw material: A, B, C.) However, the stock inventory has limited amount of those raw materials (A: 400, B: 800, C: 1000), and can’t find more in the short time. The 3 different products can make different level of profit per unit for company (1st product: $20, 2nd product: $10, 3rd product: $15). How can the manager plan for producing these 3 product items?

19. Total Quality Management (TQM)
A comprehensive approach--led by top management and supported throughout the organization—dedicated to continuous quality improvement, training, and customer satisfaction
TQM components are:
Make continuous improvement a priority
Get every employee involved
Listen to & learn from customers & employees
Use accurate standards to identify & eliminate problems

20. III. Behavioral Approach
Emphasis on importance of understanding human behavior and motivating and encouraging employees toward achievement

21. Hawthorne Studies
A series of studies by Elton Mayo and associates during the 1920s and 1930s that provided new insights into individual and group behavior
It began with an experiment of whether workplace lighting level affected worker productivity, however, the result was totally contrast with the first assumption.

22. Hawthorne Studies Low Adjusted Low-Light Intensity Level High High
Experimental Group
Control Group
Control Group (assumption)
Experimental Group (assumption)
Productivity
Low Adjusted Low-Light Intensity Level High

23. Hawthorne Studies
In later experiments, other variables were altered, such as wage levels, rest periods, and length of workday.
Finally, according to the later experiments’ results, these studies conclude people’s behavior and attitudes are closely related in which group factors/standards establish individual worker output, namely, employees will work harder they if received added attention, cared welfare from managers.

24. IV. Contemporary Approach
This management approach concerns more on what was happening in the external environment outside the organization, then determine which method should be the best practice
2 contemporary perspectives are:
System
Contingency

25. A) System Theory
Regards the organization as systems of interrelated parts that operate together to achieve a common purpose
Open & Close Systems
Open Systems: Systems that interact with their environment
Closed Systems: Systems that are not influenced by do not interact with their environment

26. 4 Parts of a System
Inputs: people, money, information, equipment, materials required to produce an organization’s goods or services
Output: products, services, profits, losses, employee satisfaction or discontent, etc. produced by the organization

27. 4 Parts of a System (Con’t)
Transformational processes: the organization’s capabilities in management and technology that are applied to converting inputs into outputs
Feedback: information about reaction of the environment to the output that affects the inputs

28. Open-System Perspective of an Organization
External Environment
Raw materials
Human Resources
Energy
Financial Resources
Information
Equipment
Organization
Transformation Process
Goods
Services
inputs
outputs
Feedback

29. B) Contingency Approach (Situation Approach)
Emphasizes that a manager’s approach should vary according to the organization size, technologies, individual and the environmental situation
“one size doesn’t fit all”
Manager will apply method is the best to use under the particular circumstances  “flexible”

30. End of Chapter