1. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Chapter 2 The History of Management

2. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 2 What Would You Do? ISG needs its six summer college-student hires to load railcars with several tons of scrap metal—a six-week job that needs to be completed in two weeks. ISG Steelton—International Steel Group, Steelton, Pennsylvania As shift supervisor, what would you to do to motivate the students? What can you do to deal with the physical fatigue from the job?

3. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 3 In the Beginning After reading the next section, you should be able to: 1.explain the origins of management.

4. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 4 Management Ideas and Practice Throughout History 1.1 5000 BC 4000-2000 BC 1800 BC 600 BC 500 BC 400 BC 175 284 900 1100 1418 1436 1500 1525 Sumerians EgyptiansPlanning, organizing, controlling. Hammurabi Nebuchadnezzar Sun Tzu Xenophon Cyrus Cato Diocletian Alfarabi Ghazali Barbarigo Venetians Sir Thomas More Machiavelli Record keeping Plan, organize, control. Written requests. Controls and written documentation Wage incentives, production control Strategy Management as a separate art Human relations and motion study Job descriptions Delegation of authority Listed leadership traits Listed managerial traits Different organizational forms/structures Numbering, standardization, interchangeability Critical of poor management and leadership Cohesiveness, power, and leadership

5. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 5 Why We Need Managers Today Work in families Skilled laborers Small, self-organized groups Unique, small batches of production ThenThen Work in factories Specialized, unskilled laborers Large factories Large standardized mass production NowNow 1.2

6. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 6 The Evolution of Management After reading the next four sections, you should be able to: 2.explain the history of scientific management. 3.discuss the history of bureaucratic and administrative management. 4.explain the history of human relations management. 5.discuss the history of operations, information systems, and contingency management.

7. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 7 Scientific Management 2 2  Studies and tests methods to identify the best, most efficient ways Scientific Management  Studies and tests methods to identify the best, most efficient ways “Seat-of-the Pants” Management  No standardization of procedures  No follow-up on improvements “Seat-of-the Pants” Management  No standardization of procedures  No follow-up on improvements

8. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 8 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, 1856-1915(Part 2)

9. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 Taylor’s Four Management Principles 2.1 Develop a science for each element of a man’s work, which replaces the old rule-of-thumb method. Scientifically select and then train, teach, and develop the workman. Cooperate with the men to insure all work is done in accordance with the principles of the science. There is almost equal division of the work and the responsibility between management and workmen. Adapted from Exhibit 2.2 Find the “one best way” to do every job.

10. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved Taylor’s Innovative Ideas Using systematic analyses to identify best methods Scientifically selecting and training the best workers Promoting cooperation between workers and management Developing standardized approaches and tools Setting specific tasks and goals and then rewarding workers with financial incentives Giving workers shorter hours and frequent breaks. 10

11. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 11 Frank & Lillian Gilbreth 2.2 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.

12. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 12 Motion Studies: Frank & Lillian GilbrethLillian 2.2 Time Study Timing how long it takes good workers to complete each part of their jobs. Motion Study Breaking each task into its separate motions and then eliminating those that are unnecessary or repetitive.

13. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 13 Charts: Henry Gantt 2.3 Also made significant contributions to management with pay-for-performance plans and the training and development of workers.

14. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 14 Bureaucratic Management 3.1 Bureaucracy The exercise of control on the basis of knowledge, expertise, or experience. Max Weber, 1864-1920

15. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 15 The Aim of Bureaucracy 3.1 1. Qualification-based hiring 2. Merit-based promotion 3. Chain of command 4. Division of labor 5. Impartial application of rules and procedures 6. Recorded in writing 7. Managers separate from owners Employees are hired on the basis of their technical training or educational background. Promotion is based on experience or achievement. Managers, not organizational owners, decide who is promoted. Each job occurs within a hierarchy, the chain of command, in which each position reports and is accountable to a higher position. A grievance procedure and a right to appeal protect people in lower positions. Tasks, responsibilities, and authority are clearly divided and defined. Rules and procedures apply to all members of the organization and will be applied in an impartial manner, regardless of position or status. The owners of an organization should not manage or supervise the organization. All administrative decisions, acts, rules, or procedures will be recorded in writing.

16. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 16 Administrative Management: Henri Fayol 3.2 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interests 7. Remuneration 8. Centralization 9. Scalar chain 10. Order 11. Equity 12. Stability of tenure of personnel 13. Initiative 14. Esprit de corps Adapted from Exhibit 2.5 Each worker – unique/smaller tasks Manager has authority, but not to be abused. Clearly defined rules and procedures. One and only one boss for each worker. One person/one plan for organizational objectives. Organizational goals first, individual goals second. “Fair” compensation, don’t underpay or overpay. Appropriate balance between centralizaiton or not. Vertical chain of authority; One worker/one boss No overlapping responsibilities Kind, fair and just treatment for all. Low employee turnover, stable work force. Encourage development of initiative in workers. Strong sense of morale and unity among workers. All about organizing the organization.

17. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved Functional Management Scientific Management – focuses on improving the efficiency of manufacturing facilities and their workers. Bureaucratic Management – focuses on using knowledge, fairness and logical rules to increase organizational efficiencies. Administrative Management – focuses on how and what managers should do in their jobs. 17 What about the workers???

18. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 18 4 4 Human Relations Management Efficiency alone is not enough to produce organizational success. Success also depends on treating workers well.

19. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 19 Mary Parker Follett Mary Parker Follett, 1868-1933 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.

20. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 20 4.1 Constructive Conflict and Coordination: Mary Parker Follett Dealing with Conflict Compromise Domination Integration Domination is a victory of one side over the other. Compromise involves both parties giving up some of what they want in order to reach agreement. Integrative conflict resolution involves both parties indicating their preferences and then working together to find an alternative that meets the needs of both.

21. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 21 4.1 Constructive Conflict and Coordination: Mary Parker Follett 1.Coordination as reciprocal relating all the factors in a situation. 2.Coordination by direct contact of the responsible people concerned 3.Coordination in the early stages 4.Coordination as a continuing process 1.Coordination as reciprocal relating all the factors in a situation. 2.Coordination by direct contact of the responsible people concerned 3.Coordination in the early stages 4.Coordination as a continuing process Fundamental Principals of Organizations

22. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 22 4.2 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 Experimenting with workers at Western Electric in Chicago between 1924 and 1932. Finding #1

23. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 23 4.3 Cooperation and Acceptance of Authority: Chester Barnard Managers can gain cooperation by: Securing essential services from individuals Unifying people by clearly formulating an organization’s purpose and objectives Providing a system of effective communication

24. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 24 4.3 Cooperation and Acceptance of Authority: Chester Barnard People will willingly carry out managerial directives if they… 1.are understood 2.are consistent with the purpose of the organization 3.are compatible with the people’s personal interests 4.can actually be carried out by those people

25. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 25 5 5 Operations, Information, Systems, and Contingency Management Information Management Operations Management Contingency Management Systems Management Managing the daily production of goods and services Managing parts of the organization for the good of The whole organization. Managing the information needed by the organization to make good decisions. Managing depending upon the situation.

26. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 26 5.1 Operations Management Tools Quality control Forecasting techniques Capacity planning Productivity measurement and improvement Linear programming Scheduling systems Inventory systems Work measurement techniques Project management Cost-benefit analysis

27. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 27 5.1 Operations Management Tools Origins of Operations Management Geometry Guns Fire

28. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 28 Whitney, Monge, and Olds Eli Whitney, 1765-1825 Gaspard Monge, 1746-1818 Ransom Olds, 1864-1950

29. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 29 5.3 Information Management Milestones in information management: 1400sHorses in Italy 1500-1700 Creation of paper and the printing press 1850Manual typewriter 1860sVertical file cabinets and the telegraph 1879Cash registers 1880s Telephone 1890sTime clocks 1980sPersonal computer 1990sInternet

30. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 30 5.3 Systems Management Objective of Systems Management: to take advantage of the organization’s internal, specific and general environments to create synergy for increased productivity. Objective of Systems Management: to take advantage of the organization’s internal, specific and general environments to create synergy for increased productivity. Objective of Systems Management: to take advantage of the organization’s internal, specific and general environments to create synergy for increased productivity.

31. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 31 Biz Flix: In Good Company Take Two Video Click Is Carter Duryea’s explanation of synergy the same as the text definition? Dan identifies a potential downside with Carter’s plan. Do you agree with Dan or Carter?

32. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 32 5.4 Contingency Management Contingency Approach Holds that the most effective management theory or idea depends on the kinds of problems or situations that managers are facing at a particular time and place.

33. Chapter 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved 33 5.4 Contingency Management Management is harder than it looks Managers need to look for key contingencies that differentiate today’s situation from yesterday’s situation Managers need to spend more time analyzing problems before taking action Pay attention to qualifying phrases, such as “usually”