1. MGT 200 Management Theory Required Reading: Chapter 2 of textbook
Peter Senge Article
Meg Wheatly Interview
Today’s Topic: History of Management Theory

2. Learning Objectives Know the basic premises of six management theories
Understand the context for the evolution and development of these theories
Know the basic concepts of several current trends in management
Explore three forces that are changing the context for managerial work today

3. Management Theories/Concepts
Division of Labor
Scientific Management
Administrative Theories
Behavioral Theory
Chaos Theory
Contingency Theory

4. Division of Labor Adam Smith: “The Wealth of Nations”
Premise: Increase productivity by breaking down jobs into narrow, repetitive tasks

5. Scientific Management
Management practices should be based on fact and observation
Focuses on the relationship between individual workers and their tools or machines

6. Scientific Management
Frederick Taylor
There is “one best way” to perform a task
Time and motion studies
Money motivates employees to do their best
Frank and Lillian Gilbreth
Followers of Taylor
Henry Gantt
Control systems for production scheduling

7. Assessing Scientific Management
Many aspects used today
Misreads human side of work
Simple tasks and clear rules don’t guarantee results

8. Administrative Theories
Focus on managers and their behavior
Henri Fayol, French industrialist
Management is a discipline with principles that can be taught
Max Weber
Developed the concept of “bureaucracy” as the ideal structure for an organization

9. Fayol’s Administrative Principles
1. Division of labor
2. Authority to give orders
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest
7. Remuneration: pay for work done
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability and tenure of staff
13. Initiative
14. Esprit de corps

10. Bureaucratic Management
Formal system of rules and procedures
Impersonality
Hierarchical structure with detailed authority
Clear division of labor
Rationality
Career commitment

11. Assessing Administrative Theories
Managers still use many of Fayol’s principles
Overemphasizes the rational behavior of managers
Advantages & disadvantages of bureaucracy
Benefits: efficiency, consistency
Costs: rigid, slow, difficult to adapt

12. Behavioral Theory Focuses on the human aspects of organizations
Mary Parker Follet
Management is a dynamic process
Workers should be involved in decisions
Chester Barnard
Organizations are social systems
Managers need “buy-in” of employees

13. Hawthorne Studies
A “scientific theory” study that provided strong support for the behavioral viewpoint
The Hawthorne Effect: Productivity is likely to increase when employees are given special attention regardless of whether working conditions change
The social environment of employees also greatly influences productivity

14. Behavioral Theory Basic Assumptions
Employees are motivated by social needs
Social forces exerted by peers is strong
Employees respond to managers who help them satisfy their needs
Managers need to coordinate the work of subordinates democratically to improve efficiency

15. Behavioral Theory Assessment
Adds greatly to the mechanistic view of managing people
But human relation skills alone won’t guarantee increased productivity or high quality work
Managing the human aspects of an organization is a very complex task

16. Chaos Theory Margaret Wheatley, 1992
Look at an organization as a living organism
Learn management from natural systems
Basic Premise: Self-organization
the tendency of living systems to organize into structure without any externally imposed plan

17. Chaos Theory Principles
Information access
Everyone has easy access to all the information they need to do their job
Relationships
Everyone has easy access to anyone they need to do their job
Self-reference
The organizations core identity or purpose

18. Chaos Theory Assessment
Goes against many traditional beliefs about role of managers
Requires educated, involved employees
Requires change in communication methods
Clear vision/joint purpose is crucial

19. Contingency Viewpoint
There is no best way to manage in all situations
Use the different management viewpoints as appropriate to deal with various situations
Managers must be able to diagnose and understand a situation thoroughly

20. Contingency Viewpoint
Basic contingency variables:
External environment
Technology
Individuals
Importance of each variable depends on type of situation and problems being faced

21. Assessing the Contingency Viewpoint
Useful approach - makes sense to change viewpoint depending on situation
Most managers use intuitively
Diagnosis very important to determine best approach
Many don’t consider to really be a “theory” of management
just draws on other theories

22. Management Theories Summary
Division of Labor - Adam Smith
Scientific Management - Taylor, Gilbreths, Gantt
Administrative Theories - Fayol, Weber
Organizational Behavior - Follett, Barnard
Chaos Theory - Wheatley
Contingency Theory

23. What’s Next? Current Trends and Issues in Management
Read Chapter 2: pages 40-53
Read Senge handout on Systems Thinking