1. The Importance of Theory and History
Why Theory?
Theory: a conceptual framework for organizing knowledge and providing a blueprint for action.
Management theories are grounded in reality.
Managers develop their own theories about how they should run their organizations.
Why History?
Understanding historical developments in management aids managers in the development of management practices and in avoiding the mistakes of others.
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2. Theories of Management
Scientific
Administrative
Behavioral
Quantitative
Systems
Contingency
Book Organization
Classical - Scientific/Administrative
Behavioral - Human Relations/Organizational Behavior
Quantitative - Management Science/Operations Management
Integrative - Systems/Contingency
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3. Scientific Management
Concerned with improving the performance of individual workers (i.e., efficiency).
Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth century.
Frederick Taylor (1856–1915)
“Father of Scientific Management.”
Replaced rule-of-thumb methods with scientifically-based work methods to eliminate “soldiering.”
Believed in selecting, training, teaching, and developing workers.
Used time studies, standards planning, exception rule, slide-rules, instruction cards, and piece-work pay systems to control and motivate employees.
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4. Other Scientific Management Pioneers
Frank ( )and Lillian ( ) Gilbreth
Husband and wife team of industrial engineer
Used motion pictures to study movements
Reduced the number of movements in bricklaying, resulting in increased output of 200%.
Applied their ideas to raising their 12 children-documented their experience in the book and original movie-Cheaper by the Dozen
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5. Administrative Management
Focuses on managing the total organization rather than individuals.
Henri Fayol
Helped to systematize the practice of management (14 Principles of Management)
Was first to identify the specific management functions of planning, organizing, leading, and controlling.
Max Weber
His theory of bureaucracy is based on a rational set of guidelines for structuring organizations.
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6. Fayol’s 14 Principles of Management
Specialization of labor Specializing encourages continuous improvement in skills and the development of improvements in methods.
Authority The right to give orders and the power to exact obedience.
Discipline No slacking, bending of rules. The workers should be obedient and respectful of the organization.
Unity of command Each employee has one and only one boss.
Unity of direction A single mind generates a single plan and all play their part in that plan.
Subordination of When at work, only work things should
Individual Interests be pursued or thought about
Remuneration Employees receive fair payment for services, not what the company can get away with.
Centralization Consolidation of management functions. Decisions are made from the top.
Line of Authority Formal chain of command running from top to bottom of the organization, like military
Order All materials and personnel have a prescribed place, and they must remain there.
Equity Equality of treatment (but not necessarily identical treatment)
Personnel Tenure Limited turnover of personnel. Lifetime employment for good workers.
Initiative Thinking out a plan and do what it takes to make it happen.
Esprit de corps Harmony, cohesion among personnel.
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7. Weber’s Bureaucracy Division of Labor Authority Hierarchy
Jobs broken down into simple, routine, and well-defined tasks
Authority Hierarchy
Positions organized in a hierarchy with clear chain of command
Formal Selection
People selected for jobs based on technical qualifications
Formal Rules and Regulations
System of written rules and standard operating procedures
Impersonality
Uniform application of rules and controls, not according to personalities
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8. Behavioral Management
Emphasized individual attitudes and behaviors, and group processes.
Recognized the importance of behavioral processes in the workplace.
Human Relations Movement
- Early Movement, Simplistic
- Maslow’s Hierarchy of Needs, McGregor’s Theory X & Y
Organizational Behavior
Current Movement, Broader
Looks at Individual and Group Behavior
Goal is to Explain, Predict and Influence Behavior
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9. The Hawthorne Studies
Conducted by Elton Mayo and associates at Western Electric (1927–1935)
Illumination study of changes in workplace lighting unexpectedly affected both the control group and the experimental group of production employees.
Group study—the effects of a piecework incentive plan on production workers.
Workers established informal levels of acceptable individual output; over-producing workers (“rate busters”) and under-producing workers (“chiselers”).
Interview program
Confirmed the importance of human behavior in the workplace.
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10. Quantitative Management
Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems.
Management Science
Operations Management
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11. Systems Theory Systems Perspective Open system Closed system
A system is an interrelated set of elements functioning as a whole.
Open system
An organization that interacts with its external environment.
Closed system
An organization that does not interact with its environment.
Subsystems
The importance of subsystems is due to their interdependence on each other within the organization.
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12. Systems Perspective Synergy Entropy
Subsystems are more successful working together in a cooperative and coordinated fashion than working alone.
The whole system (subsystems working together as one system) is more productive and efficient than the sum of its parts.
Entropy
A normal process in which an organizational system declines due to failing to adjust to change in its environment
Entropy can be avoided and the organization re-energized through organizational change and renewal.
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13. The Contingency Perspective
Suggests that each organization is unique.
The appropriate managerial behavior for managing an organization depends (is contingent) on the current situation in the organization.
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14. Contemporary Management Issues and Challenges
Contemporary Management Challenges
An erratic economy that limits growth
Management of an increasingly diverse workforce
Employee privacy
Technology that promotes telecommuting
The role of the Internet in business strategy
Operating and competing in diverse global markets
Ethics in corporate governance and social responsibility
Quality as the basis for competition
The shift toward a service economy
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