1. Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short
Principles of Management 2.0
Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short
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2. Chapter 2 History, Globalization, and Ethics
Learning Objectives
Learn about the history of management
Know the context for contemporary principles of management
Understand key global trends
See how globalization is affecting management principles and practices
Appreciate the importance of value-based leadership (ethics) in management
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3. The P-O-L-C Framework must be adapted to meet global challenges
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4. Management History Timeline
The Art of War
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Machiavelli’s
The Prince
1500s
1776
Adam Smith
Weather of Nations
Division of Labor
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6. Early Management Principles
Fayol’s 14 Principles
Henri Fayol
Scientific Management or Taylorism
Frederick Taylor
Time and Motion Studies
Frank and Lillian Gilbreth
Administrative Management
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7. Management Principles developed by Henri Fayol
Division of Work: Work should be divided among individuals and groups to ensure  that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.          
Authority: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.    
Discipline: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.
Unity of Command: Workers should receive orders from only one manager.
Unity of Direction: The entire organization should be moving towards a common objective in a common direction.    
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Subordination Of Individual Interests To The General Interests: The interests of one person should not take priority over the interests of the organization as a whole.      
Remuneration: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.  
Centralization: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.                            
Scalar Chain: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.  
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Order: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.                                                                          
Equity: All employees should be treated as equally as possible.  
Stability of Tenure Of Personnel: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.                                                                                                 
Initiative: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.                                                    
Espirit De Corps (Team Spirits, Morale): Management should encourage harmony and general good feelings among employees.
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10. Management Principles for Restaurants
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Source: Fayol, H. (1914). Administration industrielle et generale.
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15. Taylorism: Time and Motion Study
Scientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management.
(Taylorism on ABC World Report Video)
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1911
Frederick Winslow Taylor introduces “scientific management,” which holds that jobs should be defined in detail to remove individual discretion. He argues: “Now one of the first requirements for a man who is fit to handle pig iron is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental makeup the ox than any other type.”
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17. Taylor's 4 Scientific Management Principle
Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
Scientifically select, train, and develop each worker rather than passively leaving them to train themselves.
Cooperate with the workers to ensure that the scientifically developed methods are being followed.
Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
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18. Limitations of Early Theorists
Shift to Knowledge Workers
Dehumanized Workers
Manual Labor Force
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19. Max Weber's Bureaucracy
Authority hierarchy: A clear chain of command
Division of labor: Delineated lines of authority in a fixed area of activity
Formal rules and regulations: Action taken on the basis of and recorded in written rules
Career Orientation: Bureaucratic officials need expert training. They are not owners.
Impersonality: Rules are implemented by neutral officials
Formal selection and promotion: Career advancement depends on technical qualifications judged by organization, not individuals.
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20. A Look Backward At The Future Of Work
“System-centered” companies try to execute the corporate strategy with maximum efficiency.
“People-centered” companies—always a minority—relax the rules in hopes that good things will come from self-motivated workers.
Workers in Western Electric’s Hawthorne Works plant in Cicero, Ill., perform better when lighting and other working conditions are tinkered with—regardless of what the change is. Researchers realize that the workers are simply responding positively to attention from managers. This becomes known as the “.”
Hawthorne Studies (video)
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21. MANAGEMENT IDEAS OF THE 1990s
Peter Drucker Father of Modern Management
Tom Peters and Robert Waterman In Search of Excellence
Warren Bennis  Leadership
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22. In Search Of Excellence
Managing Ambiguity and Paradox
A Bias for Action
Close to the Customer
Autonomy and Entrepreneurship
Productivity through People
Hands-On, Value-Driven
Stick to the Knitting
Simple Form, Lean Staff
Simultaneous Loose-Tight Properties
Performance of the companies at
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23. In Search of Excellence Findings
Managing Ambiguity and Paradox: The ability of managers to hold two opposing ideas in mind at the same time and still be able to function effectively.
A Bias for Action: A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.
Close to the Customer: Staying close to the customer to understand and anticipate customer needs and wants.
Autonomy and Entrepreneurship: Actions that foster innovation and nurture customer and product champions.
Productivity through People: Treating rank-and-file employees as a source of quality.
Hands-On, Value-Driven: A management philosophy that guides everyday practice and shows management’s commitment.
Stick to the Knitting: Stay with what you do well and the businesses you know best. (Core competence)
Simple Form, Lean Staff: The best companies have very minimal, lean headquarters staff.
Simultaneous Loose-Tight Properties: Autonomy in shop-floor activities plus centralized values (planning).

24. Peter’s Management Recommendations
Empower people by involving everyone in decision-making
Eliminate bureaucratic rules and humiliating conditions
Celebrate and recognize employees for their contributions
Develop an inspiring vision
Lead by example
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25. Efficiency vs. Effectiveness
Doing things right.
Doing the right things.

26. TQM: Total Quality Management
Focus on the customer
Process focused
Improvement in the quality of everything the organization does
Accurate measure
Continuous improvement
Empowerment of employees and employee involvement
Gurus: Edwards Deming, Joseph Juran, etc.
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27. Baldrige Criteria for Performance Excellence Framework: A Systems Perspective

28. History of Management
Source: Robbins and Coulter, Management, 12th edition, Pearson.
Additional Source: Kiechel III, Walter, "The Management Century," Harvard Business Review. Nov. 2012, Vol. 90 Issue 11, p62-75.

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Discussion
What goals seem to dominate early management principles? Why do you think this is the case?
Do you see any commonalities between Fayol’s principles of management from 1911 and those of Tom Peters in the 1990s? What do you think accounts for this?
Are there any jobs today for which time and motion studies would make sense to do? Would any other skills need to be taught as well?
How would you put some of the ideas of the 1990s into practice?
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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30. CORPORATIONS AS SOCIAL MOVEMENTS
We are connected “virtually”
Fluid boundaries
Reduction of formal procedures
Dynamic and shifting authority structures
The blurring between social movement and corporation is evidenced in the incorporation of Occupy Portland, an offshoot of the Occupy Wall Street movement in Portland, Oregon.
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31. SOCIAL NETWORKING Efficient sharing of information
Assists in identifying experts
Efficient sharing of information
Showcases skills, talents, and knowledge
SOCIAL NETWORKING
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32. LEARNING ORGANIZATIONS
Systematic problem solving
Experimentation
Learning from past experience
Learning from others
Transferring knowledge
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33. Virtual Organizations
The Value of Wikis
Wikis pool the talent of experts as well as everyone from across the company and beyond it – in all time zones and geographic locations.
Input from unanticipated people brings fresh ideas and unexpected connections.
Wikis let people contribute to a project any time, giving them flexibility in managing their time.
It’s easy to see the evolution of an idea, and new people can get up to speed quickly by seeing the history of the project.
Co-creation of solutions eliminates the need to “sell” those solutions to get buy-in.
Wikis cut the need for by 75 percent and the need for meetings by 50 percent.
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As the pace of change continues …
…transferring knowledge and experimenting with new ideas requires continuous learning and adaptation to dynamic work environments.
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Discussion
What commonalities do you see between organizations and social movements?
How could you use a social network to help with a specific task such as helping new employees to adjust to the organization?
Do intraorganizational social networks inspire employees or do they create more problems than they are worth? Please explain your position.
How can social networks help managers plan, organize, lead, and control?
What are the potential advantages and potential disadvantages of a virtual organization?
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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Top 5 Challenge Trends
1. Increasing Concern for the Environment
2. Greater Personalization and Customization
3. Faster Pace of Innovation
4. Increasing Complexity
5. Increasing Competition for Talent
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Top 5 Solution Trends
1. Becoming More Connected
2. Becoming More Global
3. Becoming More Mobile
4. Rise of the Creative Class
5. Increasing Collaboration
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38. Trends in Higher Education
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Discussion
How do you manage innovation if ideas can come from anywhere, including people who aren’t your direct employees – or aren’t even part of the company?
If, according to some trends, you can work anytime and anywhere, how do you decide when to work? When do you stop working?
What advantages do you see from an increasingly global workforce?
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40. GLOBALIZATION AND CROSS-CULTURAL LESSONS
Work environments are more diverse than ever before Cultural and language differences require diverse management approaches
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41. Nine Dimensions of Culture
Performance Orientation
Uncertainty Avoidance
Assertiveness
Power Distance
Gender Egalitarianism
Institutional Collectivism
Humane Orientation
Future Orientation
Global Ventures Gone Awry
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Discussion
You’ve just been made a manager in Sweden, known for its collective institutionalism. What incentives and reward structures would you use to motivate your employees?
How might you prepare workers for an overseas assignment to help them adjust to their new location and culture effectively?
Your company has twelve branches in the US and will be opening its first branch in Brazil. Your company prides itself on its self-managed teams. Will you keep this policy in the new country? Why or why not?
You’re a manager in Japan and you’ve just discovered that a team leader under your supervision has made a mistake that will result in a quality problem. How will you handle this mistake?
You work in Hong Kong for a Swiss-owned firm. The Swiss are known for their high uncertainty avoidance. What differences might you expect to see from your Swiss bosses compared to your Hong Kong employees?
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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43. Developing Your Values-Based Leadership Skills
Managers face many ethical challenges Managers must model ethical behavior and uphold values and standards
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44. Ethical Lapse A desire to further one’s career
Pressure to meet unrealistic business objectives/deadlines
A desire to further one’s career
A desire to protect one’s livelihood
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2002 Sarbanes-Oxley Act
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46. Integrating Ethics Into Managerial Decision Making
Assess the situation
Consider the stakeholder’s point of view
Consider all possible alternatives
Pay attention to how it makes you feel
Make a decision
Monitor outcomes
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Discussion
• What are the consequences of unethical behavior?
• If you were writing a code of ethics for your company, what would you include?
• In times of economic downturn, is ethical behavior a luxury or a mandate?
• Imagine you just found out that one of your employees has lied on an expense report. He is a great employee and one of your best salespeople. How would you handle this ethical violation?
• Nobel laureate economist Milton Friedman said that companies should focus on maximizing profits, not social responsibilities or purposes. Do you agree with this view? Why or why not?
• What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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