1. The Evolution of Management
Chapter Two
© 2013 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 

2. Learning Objectives
LO1 Describe the origins of management practice and its early concepts and influences. LO2 Summarize the five classical approaches to management. LO3 Discuss the four contemporary approaches to management. LO4 Identify modern contributors who have shaped management thought and practices.

3. Origins of Management
Around 4000 BC, the Egyptians used planning, organizing, leading, and controlling to build their great pyramids; one pyramid took over 100,000 laborers 20 years to complete.
As early as 1100 BC, the Chinese applied the managerial concepts of delegation, cooperation, efficiency, organization, and control.

4. Origins of Management
In 500 BC, Sun Tzu discussed the importance of planning and leading in his book The Art of War.
Around 400–350 BC, the Greeks recognized management as a separate art and advocated a scientific approach to work.

5. Origins of Management
Around AD 1436, the Venetians standardized production through the use of an assembly line
In 1776 Adam Smith discussed control and the principle of specialization with regard to manufacturing workers.

6. Origins of Management Economies of scale
reductions in the average cost of a unit of production as the total volume produces increases

7. The Evolution of Management Thought
Exhibit 2.1

8. Classical Approaches Systematic management
a classical management approach that attempted to build into operations the specific procedures and processes that would ensure coordination of effort to achieve established goals and plans
systematic management emphasized internal operations because managers were concerned primarily with meeting the explosive growth in demand brought about by the industrial revolution.

9. Systematic Management
Goals were achieved through:
Careful definition of duties and responsibilities.
Standardized techniques for performing these duties.
Specific means of gathering, handling, transmitting, and analyzing information.
Cost accounting, wage, and production control systems to facilitate internal coordination and communications

10. Classical Approaches Scientific management
a classical management approach that applied scientific methods to analyze and determine the “one best way” to complete production tasks
Introduced by Frederick Taylor

11. Frederick W. Taylor
Frederick Taylor is known today as the "father of scientific management." One of his many contributions to modern management is the common practice of giving employees rest breaks throughout the day.
Frederick W. Taylor,
2.2

12. Four Principles of Scientific Management
Management should develop a precise, scientific approach for each element of one’s work to replace general guidelines.
Management should scientifically select, train, teach, and develop each worker so that the right person has the right job.

13. Scientific Management
Management should cooperate with workers to ensure that jobs match plans and principles.
Management should ensure an appropriate division of work and responsibility between managers and workers.

14. Scientific Management
Henry L. Gantt worked with and became a protégé of Frederick Taylor’s
He expanded on the piecerate system by suggesting that frontline supervisors should receive a bonus for each of their workers who completed their assigned daily tasks

15. Scientific Management
Gantt is also known for creating the Gantt chart, which helps employees and managers plan projects by task and time to complete those tasks.
An interesting aspect of the chart is that it illustrates how some tasks need to be done during the same time period.

16. Using a Gantt Chart
Exhibit 2.2

17. Charts: Henry Gantt
Henry Gant, in addition to creating the Gantt chart, made significant contributions to management with pay-for-performance plans and the training and development of workers.
A Gantt chart shows time in various units on the x-axis and tasks on the y-axis, visually indicating what tasks must be completed at which times in order to complete a project.
2.3

18. Frank & Lillian Gilbreth
Frank and Lillian Gilbreth were prolific researchers and often used their family as guinea pigs. Their work is the subject of Cheaper by the Dozen, written by their son and daughter. Developed the use of motion studies to simply work and improve productive.
In addition to their use of motion studies to simplify work, Frank and Lillian Gilbreth also made significant contributions to the employment of handicapped workers and industrial psychology.
Lillian Gilbreth, the first woman to receive a Ph.D. in Management, also convinced the government to enact laws regarding workplace safety, ergonomics, and child labor.
2.2

19. The History of Bureaucratic Management
Max Weber,
Proposed the idea of bureaucratic organizations to overcome the problems associated with monarchies and patriarchies.
Bureaucracy
The exercise of control on the basis of knowledge, expertise, or experience.
When we hear the term bureaucracy, we think of inefficiency and “red tape”, incompetence and ineffectiveness. However, when German sociologist Max Weber proposed the idea of bureaucratic organizations, monarchies were associated with these problems. Bureaucracy literally means to rule from a desk or office. In a bureaucracy, people would lead by virtue of rational-legal authority—from knowledge, expertise, and experience.
3.1

20. Scientific Management
Frank and Lillian Gilbreth used “motion studies” to identify and remove wasteful movements so workers could be more efficient and productive.

21. Bureaucracy Bureaucracy
A classical management approach emphasizing a structured, formal network of relationships among specialized positions in the organization

22. Characteristics of an Effective Bureaucracy
Exhibit 2.3

23. Administrative Management
A classical management approach that attempted to identify major principles and functions that managers could use to achieve superior organizational performance

24. Administrative Management
Henri Fayol, a French mining engineer and executive, published a book summarizing his management experiences.
Fayol identified five functions and 14 principles of management. The five functions are planning, organizing, commanding, coordinating, and controlling

25. Fayol’s 14 Principles of Management
Exhibit 2.4

26. Fayol’s 14 Principles of Management
Exhibit 2.4

27. Administrative Management
Chester Bernard-President of New Jersey Bell, author of The Functions of the Executive.
Bernard wrote that the extent to which workers willingly cooperate in an organization depends how workers perceive authority and whether they are willing to accept it.
He outlined the role of the senior executive: formulating the purpose of the organization, hiring key individuals, and maintaining organizational communications

28. Mary Parker Follett
Mary Parker Follett is known today as the “mother of scientific management." Her many contributions to modern management include the ideas of negotiation, conflict resolution, and power sharing.
Mary Parker Follett,
4.1

29. Administrative Management
Mary Parker Follett extended Barnard’s work by emphasizing the continually changing situations that managers face.
Two key contributions
the notion that managers desire flexibility
the differences between motivating groups and individuals

30. Question Which approach tries to find the “one best way”?
Systemic management
Scientific management
Administrative management
Bureaucracy
The correct answer is B – scientific management

31. Human Relations Human relations
a classical management approach that attempted to understand and explain how human psychological and social processes interact with the formal aspects of the work situation to influence performance

32. Human Relations
Human relations proponents argued that managers should stress primarily employee welfare, motivation, and communication.
Believed that social needs had precedence over economic needs.

33. Human Relations
Abraham Maslow suggested that humans have five levels of needs.
The most basic needs are the physical needs for food, water, and shelter; the most advanced need is for self-actualization, or personal fulfillment.
Maslow argued that people try to satisfy their lower-level needs and then progress upward to the higher-level needs

34. Maslow’s Hierarchy of Needs
Esteem
Recognition, achievement
Belongingness
Friendship, social interaction
Safety
Physical and economic
Physiological
Food and water
Self-Actualization
Realizing your potential
Maslow’s Hierarchy of needs suggests that people are motivated by these factors.
Physiological: food and water
Safety: physical and economic
Belongingness: friendship, love, social interaction
Esteem: achievement and recognition
Self-actualization: realizing your full potential
1.2

35. Hawthorne Studies: Elton Mayo
Workers’ feelings and attitudes affected their work
Financial incentives weren’t the most important motivator for workers
Group norms and behavior play a critical role in behavior at work
Elton May’s ideas became popular during the twentieth century when labor unrest and protests were widespread in the U.S., Europe and Asia. Mayo's work proved relevant as managers looked for ways to increase productivity and to improve worker satisfaction and working conditions.
4.2

36. Question
People’s reactions to being observed or studied resulting in superficial rather than meaningful changes in behavior is called the ________________.
Henry Ford rule
Hawthorne effect
Mogadorian precept
Pitticus effect
The correct answer is B – Hawthorne effect

37. Human Relations Hawthorne effect
people’s reactions to being observed or studied resulting in superficial rather than meaningful changes in behavior

38. Contemporary Approaches
Sociotechnical systems theory
An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees’ interpersonal relationships and other human aspects of the work
A precursor to the total quality management (TQM) movement, it also promoted the use of teamwork and semiautonomous work groups as important factors for creating efficient production systems.

39. Contemporary Approaches
Quantitative management
approach that emphasizes the application of quantitative analysis to managerial decisions and problems
A manager makes a decision by developing formal mathematical models of the problem.
Typically they use these techniques as a supplement or tool in the decision process, not the primary approach.
The limited use of quantitative management is due to managers not being trained in using these techniques.

40. Contemporary Approaches
Organizational behavior
approach that studies and identifies management activities that promote employee effectiveness by examining the complex and dynamic nature of individual, group, and organizational processes

41. Contemporary Approaches
Douglas McGregor influenced the field of management in the 1960’s with his Theory X and Theory Y perspective.
Theory X managers assume workers are lazy and irresponsible and require constant supervision and external motivation to achieve organizational goals.
Theory Y managers assume employees want to work and can direct and control them- selves.
Theory X is known as a self-fulfilling prophecy.

42. Contemporary Approaches
Systems theory
A theory stating that an organization is a managed system that changes inputs into outputs
inputs from the outside world, such as raw materials, human resources, and capital.
They transform these inputs into outputs that (ideally) meet the market’s needs for goods and services.
The environment reacts to the outputs through a feedback loop; this feedback provides input for the next cycle of the system.

43. Open-system Perspective of an Organization
Exhibit 2.5

44. Contemporary Approaches
Systems approach
The contingency perspective refutes universal principles of management by stating that a variety of factors, both internal and external to the firm, may affect the organization’s performance.
Therefore, there is no “one best way” to manage and organize because circumstances vary.
Situational characteristics are called contingencies.
The contingencies include
Circumstances in the organization’s external environment.
The internal strengths and weaknesses of the organization.
The values, goals, skills, and attitudes of managers and workers in the organization.
The types of tasks, resources, and technologies the organization uses.

45. Modern Contributors
In 2001 Jim Collins authored an influential book titled Good to Great. His research team analyzed 1,435 companies and discovered that great companies are managed by “level 5 leaders” who often display humility while simultaneously inspiring those in the organization to apply self-discipline and self-responsibility while pursuing high standards.
Other exceptional leaders who have left their mark on management practice include Herb Kelleher, cofounder of Southwest Airlines, Sam Walton, founder of Walmart, Jack Welch, Ex-CEO of General Electric, and Lou Gerstner, former CEO of IBM.

46. One of Peter Drucker’s major contributions to the practice of management was the need for organizations to set clear objectives and establish the means of evaluating progress toward those objectives. He was the first person to discuss “management by objective” (MBO), by which a manager should be self-driven to accomplish key goals that link to organizational success.
In the Seven Habits of Highly Effective People: Powerful Lessons in Personal Change, Stephen Covey discussed how a leader’s success hinges on balancing between personal and professional effectiveness.

47. Video Case: AFLAC and Dan Amos
Why does AFLAC CEO, Dan Amos, want shareholders to vote on his compensation package?
What are the consequences of paying an underperforming CEO an exorbitant severance package?