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Transcript of Chap 2 Lect
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PowerPoint Presentation by Charlie Cook Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.
The Evolution ofThe Evolution of
Management TheoryManagement Theory
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Scientific Management TheoryScientific Management Theory
Evolution of Modern ManagementEvolution of Modern Management
Began in the industrial revolution in the late 19thBegan in the industrial revolution in the late 19thcentury as:century as:
Managers of organizations began seeking waystoManagers of organizations began seeking waysto
bettersatisfy customerneeds.bettersatisfy customerneeds.
LargeLarge--scalemechanized manufacturing began toscalemechanized manufacturing began to
supplantingsmallsupplantingsmall--scale craftproduction in the waysscale craftproduction in the ways
in whichgoods wereproduced.in whichgoods wereproduced.
Social problems developed in the largegroups ofSocial problems developed in the largegroups ofworkersemployed underthe factorysystem.workersemployed underthe factorysystem.
Managers began to focus on increasingtheefficiencyManagers began to focus on increasingtheefficiency
ofthe workerofthe worker--taskmix.taskmix.
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The Evolution of Management TheoryThe Evolution of Management Theory
Figure 2.1Source:
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Job Specialization andJob Specialization andthe Division of Laborthe Division of Labor
Adam Smith (18th centuryeconomist)Adam Smith (18th centuryeconomist)
Observed that firms manufactured pins in one ofObserved that firms manufactured pins in one oftwo different ways:two different ways:
CraftCraft--stylestyleeach workerdid all steps.each workerdid all steps.
ProductionProductioneach workerspecialized in onestep.each workerspecialized in onestep.
Realized that job specialization resulted in muchRealized that job specialization resulted in much
higher efficiency and productivityhigher efficiency and productivity Breaking down thetotal job allowed forthe division ofBreaking down thetotal job allowed forthe division of
laborin which workers became veryskilled attheirlaborin which workers became veryskilled attheir
specific tasks.specific tasks.
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F.W. Taylor and Scientific ManagementF.W. Taylor and Scientific Management
Scientific ManagementScientific Management
The systematic study of the relationships betweenThe systematic study of the relationships betweenpeople and tasks for the purpose of redesigning thepeople and tasks for the purpose of redesigning thework process for higher efficiency.work process for higher efficiency.
Defined by Frederick Taylorin the late 1800stoDefined by Frederick Taylorin the late 1800sto
replaceinformal rule ofthumb knowledge.replaceinformal rule ofthumb knowledge.
Taylorsoughtto reducethetimea workerspent onTaylorsoughtto reducethetimea workerspent on
eachtask by optimizingthe waythetask was done.eachtask by optimizingthe waythetask was done.
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Four Principles of Scientific ManagementFour Principles of Scientific Management
Principlesto increaseefficiency:Principlesto increaseefficiency:
1.1. Study the ways jobs are performed now andStudy the ways jobs are performed now anddetermine new ways to do them.determine new ways to do them.
Gatherdetailed timeand motion information.Gatherdetailed timeand motion information.
Try differentmethodsto see whichis best.Try differentmethodsto see whichis best.
2.2. Codify the new methods into rules.Codify the new methods into rules.
Teachto all workersthe new method.Teachto all workersthe new method.
3.3. Select workers whose skills match the rules.Select workers whose skills match the rules.4.4. Establish fair levels of performance and pay aEstablish fair levels of performance and pay a
premium for higher performance.premium for higher performance.
Workersshould benefit fromhigheroutputWorkersshould benefit fromhigheroutput
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Problems with Scientific ManagementProblems with Scientific Management
Managers frequentlyimplemented onlytheManagers frequentlyimplemented onlythe
increased outputside of Taylorsplan.increased outputside of Taylorsplan.
Workers did not share in the increased output.Workers did not share in the increased output.
Specialized jobs became very boring, dull.Specialized jobs became very boring, dull.Workers ended up distrusting the ScientificWorkers ended up distrusting the Scientific
Management method.Management method.
Workers could purposely underWorkers could purposely under--perform.perform.
Management responded with increased use ofManagement responded with increased use ofmachines and conveyors belts.machines and conveyors belts.
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Frank and Lillian GilbrethFrank and Lillian Gilbreth
Refined Taylors workand mademanyRefined Taylors workand mademany
improvementsto themethodologies oftimeimprovementsto themethodologies oftime
and motion studies.and motion studies.
Time and motion studiesTime and motion studies Breaking upeach job action into its components.Breaking upeach job action into its components.
Finding betterwaysto performtheaction.Finding betterwaysto performtheaction.
Reorganizingeach job action to bemoreefficient.Reorganizingeach job action to bemoreefficient.
Also studied workerAlso studied worker--related fatigueproblemsrelated fatigueproblemscaused by lighting,heating,and the design ofcaused by lighting,heating,and the design of
toolsand machines.toolsand machines.
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Administrative Management TheoryAdministrative Management Theory
Administrative ManagementAdministrative Management
The study of how to create an organizationalThe study of how to create an organizationalstructure that leads to high efficiency andstructure that leads to high efficiency andeffectiveness.effectiveness.
Max WeberMax Weber
Developed the concept of bureaucracy as a formalDeveloped the concept of bureaucracy as a formalsystem of organization and administration designedsystem of organization and administration designedto ensure efficiency and effectiveness.to ensure efficiency and effectiveness.
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WebersWebersPrinciples ofPrinciples ofBureaucracyBureaucracy
Figure 2.2
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Webers Five Principles ofBureaucracyWebers Five Principles ofBureaucracy
Authorityisthepowerto hold peopleAuthorityisthepowerto hold people
accountable fortheiractions.accountable fortheiractions.
Positionsin the firmshould beheld based onPositionsin the firmshould beheld based on
performance, notsocial contacts.performance, notsocial contacts. Position dutiesare clearlyidentified so thatPosition dutiesare clearlyidentified so that
peopleknow whatisexpected ofthem.peopleknow whatisexpected ofthem.
Lines ofauthorityshould be clearlyidentifiedLines ofauthorityshould be clearlyidentified
suchthat workersknow who reportsto who.suchthat workersknow who reportsto who.
Rules,standard operatingprocedures (SOPs),Rules,standard operatingprocedures (SOPs),
and normsguidethe firms operations.and normsguidethe firms operations.
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Fayols Principles of ManagementFayols Principles of Management
Division of Labor:allows for job specialization.Division of Labor:allows for job specialization.
Fayol noted jobs can have too much specializationFayol noted jobs can have too much specializationleading to poor quality and worker dissatisfaction.leading to poor quality and worker dissatisfaction.
Authorityand ResponsibilityAuthorityand ResponsibilityFayol included both formal and informal authorityFayol included both formal and informal authority
resulting from special expertise.resulting from special expertise.
Unity ofCommandUnity ofCommand
Employees should have only one boss.Employees should have only one boss.
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Fayols Principles of Management (contd)Fayols Principles of Management (contd)
Line of AuthorityLine of Authority
A clear chain of command from top to bottom ofA clear chain of command from top to bottom ofthe firm.the firm.
CentralizationCentralizationThe degree to which authority rests at the top ofThe degree to which authority rests at the top of
the organization.the organization.
Unity of DirectionUnity of Direction
A single plan of action to guide the organization.A single plan of action to guide the organization.
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Fayols Principles of Management (contd)Fayols Principles of Management (contd)
EquityEquity
The provision of justice and the fair and impartialThe provision of justice and the fair and impartialtreatment of all employees.treatment of all employees.
OrderOrderThe arrangement of employees where they will beThe arrangement of employees where they will be
of the most value to the organization and toof the most value to the organization and toprovide career opportunities.provide career opportunities.
InitiativeInitiativeThe fostering of creativity and innovation byThe fostering of creativity and innovation by
encouraging employees to act on their own.encouraging employees to act on their own.
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Fayols Principles of Management (contd)Fayols Principles of Management (contd)
DisciplineDiscipline
Obedient, applied, respectful employees areObedient, applied, respectful employees arenecessary for the organization to function.necessary for the organization to function.
Remuneration of PersonnelRemuneration of PersonnelAn equitable uniform payment system thatAn equitable uniform payment system that
motivates contributes to organizational success.motivates contributes to organizational success.
Stability of Tenure of PersonnelStability of Tenure of Personnel
LongLong--term employment is important for theterm employment is important for thedevelopment of skills that improve thedevelopment of skills that improve theorganizations performance.organizations performance.
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Fayols Principles of Management (contd)Fayols Principles of Management (contd)
Subordination of Individual Interestto theSubordination of Individual Interestto theCommon InterestCommon Interest
The interest of the organization takes precedenceThe interest of the organization takes precedenceover that of the individual employee.over that of the individual employee.
Esprit de corpsEsprit de corps
Comradeship, shared enthusiasm foster devotion toComradeship, shared enthusiasm foster devotion tothe common cause (organization).the common cause (organization).
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Behavioral Management TheoryBehavioral Management Theory
Behavioral ManagementBehavioral Management
The study of how managers should behave toThe study of how managers should behave tomotivate employees and encourage them tomotivate employees and encourage them toperform at high levels and be committed to theperform at high levels and be committed to the
achievement of organizational goals.achievement of organizational goals.
Focuses on the way a manager should personallyFocuses on the way a manager should personallymanage to motivate employees.manage to motivate employees.
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Behavioral ManagementBehavioral Management
Mary ParkerFollettMary ParkerFollett
An influential leader in early managerial theoryAn influential leader in early managerial theory
Held a horizontal view of power and authority inHeld a horizontal view of power and authority inorganizationsorganizations
Suggested workershelpin analyzingtheir jobs forSuggested workershelpin analyzingtheir jobs for
improvementsimprovementstthe workerknowsthe best waytohe workerknowsthe best wayto
improvethe job.improvethe job.
If workershaverelevantknowledge ofthetask,thenIf workershaverelevantknowledge ofthetask,then
theyshould control thetask.theyshould control thetask.
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Theory X and Theory YTheory X and Theory Y
Douglas McGregorproposed thetwo differentDouglas McGregorproposed thetwo differentsets ofassumptionsabout workers.sets ofassumptionsabout workers.
Theory X assumes the average worker is lazy,Theory X assumes the average worker is lazy,dislikes work and will do as little as possible.dislikes work and will do as little as possible.
Managersmust closelysuperviseand control throughManagersmust closelysuperviseand control through
reward and punishment.reward and punishment.
Theory Y assumes workers are not lazy, want to doTheory Y assumes workers are not lazy, want to doa good job and the job itself will determine if thea good job and the job itself will determine if the
worker likes the work.worker likes the work. Managersshould allow workersgreater latitude,andManagersshould allow workersgreater latitude,and
createan organization to stimulatethe workers.createan organization to stimulatethe workers.
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Management Science TheoryManagement Science Theory
An approachto managementthat usesAn approachto managementthat usesrigorousquantitativetechniquesto maximizerigorousquantitativetechniquesto maximize
the use of organizational resources.the use of organizational resources.
Quantitative managementQuantitative managementutilizes linearutilizes linearprogramming, modeling, simulation systems.programming, modeling, simulation systems.
Operations managementOperations managementtechniques to analyzetechniques to analyzeall aspects of the production system.all aspects of the production system.
Total Quality Management (TQM)Total Quality Management (TQM)focuses onfocuses onimproving quality throughout an organization.improving quality throughout an organization.
Management Information Systems (MIS)Management Information Systems (MIS)pprovides information about the organization.rovides information about the organization.
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Organizational Environment TheoryOrganizational Environment Theory
Organizational EnvironmentOrganizational Environment
The set of forces and conditions that operateThe set of forces and conditions that operatebeyond an organizations boundaries but affect abeyond an organizations boundaries but affect amanagers ability to acquire and utilize resources.managers ability to acquire and utilize resources.
..
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The OpenThe Open--Systems ViewSystems View
Open SystemOpen System
A system that takes resources for its externalA system that takes resources for its externalenvironment and converts them into goods andenvironment and converts them into goods andservices that are then sent back to thatservices that are then sent back to that
environment for purchase by customers.environment for purchase by customers.
Inputs: the acquisition of external resources.Inputs: the acquisition of external resources.
Conversion: the processing of inputs into goods andConversion: the processing of inputs into goods andservices.services.
Output: the release of finished goods into theOutput: the release of finished goods into theenvironment.environment.
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The Organization as an Open SystemThe Organization as an Open System
Figure 2.4
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Other System ConsiderationsOther System Considerations
Closed systemClosed system
A system that is selfA system that is self--contained and thus notcontained and thus notaffected by changes occurring in its externalaffected by changes occurring in its externalenvironment.environment.
Often undergoes entropy and loses its ability toOften undergoes entropy and loses its ability tocontrol itself, and fails.control itself, and fails.
SynergySynergy
Performance that results when individuals andPerformance that results when individuals anddepartments coordinate their actionsdepartments coordinate their actions
Performancegains ofthe wholesurpassthesum ofPerformancegains ofthe wholesurpassthesum of
theperformance oftheindividual components.theperformance oftheindividual components.
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Contingency TheoryContingency Theory
Contingency TheoryContingency Theory
The idea that the organizational structures andThe idea that the organizational structures andcontrol systems manager choose depend oncontrol systems manager choose depend onarearecontingent oncontingent oncharacteristics of the externalcharacteristics of the external
environment in which the organization operates.environment in which the organization operates.
Assumes there is no one best way to manage.Assumes there is no one best way to manage.
Theenvironmentimpactsthe firmand managersTheenvironmentimpactsthe firmand managers
must be flexibleto reactto environmental changes.must be flexibleto reactto environmental changes.
In rapidly changing organizational environments,In rapidly changing organizational environments,managers must find ways to coordinate differentmanagers must find ways to coordinate differentdepartments to respond quickly and effectively.departments to respond quickly and effectively.
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Contingency Theory ofOrganizational DesignContingency Theory ofOrganizational Design
Figure 2.5Source:
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Mechanistic and Organic StructuresMechanistic and Organic Structures
Mechanistic StructureMechanistic Structure
Authority is centralized at the top. (Theory X)Authority is centralized at the top. (Theory X)
Employees are closely monitored and managed.Employees are closely monitored and managed.
Can be very efficient in a stable environment.Can be very efficient in a stable environment.
Organic structureOrganic structure
Authority is decentralized throughout theAuthority is decentralized throughout theorganization. (Theory Y)organization. (Theory Y)
Tasks and roles are left ambiguous to encourageTasks and roles are left ambiguous to encourageemployees to react quickly to changingemployees to react quickly to changingenvironment.environment.