Week 5: Chapter 9

The Human Factor: Preparing the Way

The Human Factor – Preparing the Way Personnel Management Psychology and the Individual The Social Problem Participative Decision Making

Personnel Management – A Dual Heritage One part of personnel management can

be found in the industrial betterment/welfare movement.

The other side comes from scientific management and the needs for record.

Personnel Management – As Welfare Work A number of companies hired a welfare

secretary to advise management. Their duties were many, and in some cases appeared to be paternalistic.

Many secretaries were female, perhaps because of their experience in vocational guidance or social work, or perhaps because some of their duties resembled a role stereotype of what a woman did – i.e. administering dining facilities, handling illnesses, etc.

Personnel Management – As Welfare Work This approach grew out of the Social

Gospel movement. The moral behavior of unmarried females

factory workers was a concern. Early companies establishing welfare

offices:National Cash Register Company in 1897John Bancroft and Sons in 1899H.J. Heinz Company in 1902International Harvester Company in 1903.

Personnel Management – Scientific Management Roots Scientific management emphasized

Personnel selection Placement Wage plans Other issues involving employee welfare.

Welfare work eventually was replace with “Employment Management” after 1910 as personnel practices were standardized and improved.

Psychology and the Individual Wilhelm Wundt

pioneered scientific psychology.

He opened the first laboratory in Leipzig in 1879.

He founded experimental psychology, leading to applied and industrial psychology.

William WundtCourtesy of Dr. Charles I. Abramson

The Birth of Industrial Psychology

Hugo Munsterberg (1863-1916) applied scientific psychology to industrial problems

Best possible worker Best possible work Best possible effect

Munsterberg advocated Tests for worker

selection Research in the

learning process in training

Studied under Wundt

Hugo Munsterberg

Foundations of the Social Person – Industrial Sociology

Whiting Williams (1878-1975)

Emile Durkheim (1858-1917)

Charles H. Cooley (1864-1929)

Gestalt Psychology

Whiting Williams from Weekly London Tabloid, called 'ANSWERS',  dated 24th February 1934.

Whiting Williams (1878-1975) Williams was a participant-observer. He

put on the clothes and guise of a worker to study work first hand.

He emphasized the centrality of work. He believed

that the job defines social status as well as a person’s place in the work situation

that the workplace is a part of a larger social system.

Whiting Williams Williams saw earnings as a matter of

social comparison – influencing how a person viewed himself relative to others (similar to equity theory).

The “Eleventh Commandment” – “Thou shalt not take thy neighbor for granted.”

Summary – Industrial sociology began with Williams and the Social Gospel influenced his thoughts.

Emile Durkheim: Contributions to Sociological Theory

Anomie – state of confusion, insecurity, and “normlessness.”

Mechanical societies were dominated by a collective consciousness.

Organic societies were characterized by interdependence and the division of labor leading to anomie.

Durkheim’s thinking influenced the human relationists’ view of the need for social solidarity.

Emile Durkheim

Social Behaviorism C. H. Cooley – “Looking

Glass Self” is a very interesting way of looking at the formation of self-efficacy, personality development, and other similar ideas.

Gestalt psychology – the whole system is greater than the sum of its parts.

Charles H. Cooley

Employee Participation in Decision Making Three paths for giving employees a

“voice” in the organization led to the democratization of the workplace: Membership in a union that would

represent the workers’. Union-management cooperation Employee representation plans.

The Trade Union Movement and Industrial Relations John R. Commons

(1862-1945) was the “Father of Industrial Relations.”

He was probably the first to use the term “Human Resources.”

He wrote of the need for workers to have a voice in the workplace.

John R. Commons, courtesy of the Wisconsin Electronic Reader

The Trade Union Movement and Industrial Relations

John R. Commons admired Taylor.

He was not anti-scientific management because it worked in some firms, but felt workers needed a say-so in the workplace.

John R. Commons, courtesy of the Wisconsin Electronic Reader

The Trade Union Movement and Industrial Relations

American Federation of Labor formed under the leadership of Samuel Gompers in 1886.

Goal was to achieve gains for organized labor through bargaining power, not productivity.

Gompers said “more, more, and then more” was what labor wanted.

Samuel Gompers, courtesy of Library of Congress

The Era of Union-Management Cooperation Morris Cooke, Ordway Tead, and Robert

Valentine were examples of those who were trying to reformulate what labor felt was the unyielding, no union, position of scientific management.

The revised emphasis was to be on consent: Union-management cooperation plans began when

union membership was in decline in the early 1920’s. Unions agreed to accept scientific management if they were involved by electing representatives and could bargain about wages, hours working conditions, etc.

Employee Representation Plans Employee representation plans did not

involve unions but the workers elected representatives and participated through shop councils and committees.

Unions did not like these plans, but studies of these plans indicated they were progressive and improved labor-management relations.

Summary The 1920s was prosperous for employers

and employees. Despite a surplus of labor, employers

created “industrial goodwill” with a variety of employee benefit programs.

Scientific Management inspired social scientists and psychologists to study the workplace.

Industrial Sociology began in the 1920s. The Social Gospel spawned the industrial

betterment/welfare movement.

Week 5, Chapter 10

Emergence of Management and Organization Theory

Emergence of Management and Organization Theory

Henri Fayol – Modern approach to general management theory through the management process

Max Weber – Bureaucracy to provide a formal approach to organization theory

Henri Fayol (1841-1925) Jules Henri Fayol was born to

French parents in Constantinople.

His experiences as the Managing Director of Comambault formed his conception of management as the general activity of integrating functions of the firm in order to intelligently use resources to attain the objectives of the firm.

While Taylor was more production oriented, Fayol’s viewpoint was that of general management.

Henri Fayol Wren, History of Management

Thought

Henry Fayol’s Conclusions Managerial abilities differed from technical

ones, and the success of the firm depended to a greater degree on good managers than good technicians.

Fayol felt that every organization required management regardless of whether it was “commercial, industry, politics, religion, war, …”

This statement suggests the universality of management in that this activity is necessary in all organizations.

It does not mean that managers are universal.

Fayol’s List of Managerial Qualities

Physical qualities: health, vigor, address Mental qualities: ability to understand and learn,

judgment, mental vigor, and adaptability Moral qualities: energy, firmness, willingness to

accept responsibility, initiative, loyalty, tact dignity General education: general acquaintance with

matters not belonging exclusively to the function performed

Special knowledge: that peculiar to the function, be it technical, commercial, financial, managerial, etc.

Experience: knowledge arising from the work proper; the recollection of lessons a person has derived from things

Henry Fayol’s Conclusions Managerial abilities become more important as

a person moves up in the hierarchy. Technical abilities are less essential for upper

level managers. Management could be taught in schools and

universities but was not because of the absence of management theory.

Fayol defined management theory as “a collection of principles, rules, methods, and procedures tried and checked by general experience.” (Fayol, 1949, p. 15)

Fayol’s Principles of Management1. Division of work2. Authority3. Discipline4. Unity of command5. Unity of direction6. Subordination of individual interests to the general interest7. Remuneration8. Centralization9. Scalar Chain10. Order11. Equity12. Stability of tenure of personnel13. Initiative14. Esprit de corps

Fayol’s Principles of Management

Keep in mind that there is nothing rigid in management. Fayol’s principles were guides, not absolutes or universals.

We will not stress each principle…the following is a discussion of a few key ones.

Henri Fayol

Fayol’s Principles of Management Division of Labor – Fayol is rather

traditional here regarding work design. However, he also used job enlargement when appropriate.

Authority – Fayol distinguished between formal authority and personal authority. He was aware of the need to combine and complement the authority of position with leadership qualities.

Authority must be commensurate with responsibility.

Fayol’s Principles of Management Unity of command – Fayol felt that employees

should receive supervision from only one person. Unity of direction – “one head and one plan for a

group of activities having the same objective” (Fayol, 1949, p. 32). This is still good advice for many organizations today.

Centralization – This is not centralized decision making. Instead it is finding where decisions should be made depending on the factors Fayol mentioned. (See Wren text for Fayol’s excellent discussion.)

Scalar Chain and the “Gangplank” The “gangplank” is a

means for providing lateral communications.

The Foreman (F) wishing to communicate with Foreman (P) without reporting upward through the President (A) can use a “gangplank to bypass organizational red tape.

Figure 10.1 - Scalar Chain and the “Gangplank”

Fayol’s Elements of Management Planning (could also be translated as

foresight) Plans depended on the firm’s resources, work

in process, and future trends that could not be predetermined (resembled a strategic audit).

Plans needed to have the characteristics of unity, continuity, flexibility, and precisions.

Long range planning was a unique idea for his time but a valuable contribution to the evolution of strategic management.

Fayol’s Elements of Management Organizing – Fayol included both the design of

the organization and the staffing job of the manager in this element.

Structure of the organization had to be consistent with the objectives, resources, and requirements of the firm

Functional (horizontal) and scalar (vertical) growth Span of control – narrow at the top but greater at

lower levels Staff – advisory personnel are needed by line

managers Staffing (separate issue from staff above) – involved

selection, evaluation, and training of personnel.

Fayol’s Elements of Management

Command – Fayol’s term for directing, leading, supervising, etc.

Coordination – harmonizing the activities of the organization

Control – checking on performance to identify and make corrections if necessary

Fayol’s Elements of Management Fayol spent relatively little time discussing

command, coordination, and control. Planning, organizing, and staffing set the stage

for where we are going and when and how we intend to get there.

These plans, people, and resources are activated, led, motivated, and coordinated.

As our information system brings us performance data, the control element enables management to renew the elements by reorganizing or whatever is indicated by our control system.

Fayol’s Elements of Management

Management is a continuous process, not a neat set of discrete elements and functions that are performed without coordination of other elements.

Fayol’s perspective was that of a strategist.

Max Weber (1864-1920) Bureaucracy Weber’s Germany

was characterized by cartels which limited competition (anti-trust laws limited this in the U.S.).

To Weber, capitalism in the US encouraged innovation and competition.

Max Weber

Max Weber and Bureaucracy

His interest in the U.S. Capitalistic spirit led him to ask: If a market

oriented society could operate large organizations on some rational, systematic basis?

Bureaucracy as a Theory It was management

by the office not by a person.

It was an “ideal,” the “pure form” of organization but this did not mean that it was the most desirable.

Weber is suggested as the “Founder of Organization Theory.”

Three “Pure” Types of Legitimate Authority Rational-legal – “right of those elevated to

authority…to issue commands.” Traditional – rested on the belief “in the sanctity of

immemorial traditions and the legitimacy of the status of those exercising authority under them.”

Charismatic – based on “devotion to the specific and exceptional sanctity, heroism, or exemplary character of an individual person.” (Weber, 1947, p. 328)

Weber believed that rational type of authority must be the basis for a bureaucracy.

Elements of Bureaucracy The division of labor and

authority and responsibility were clearly defined for each member and were legitimatized as official duties.

Offices or positions were organized in a hierarchy of authority resulting in a chain of command or the scalar principle.

All organizational members were selected on the basis of technical qualifications through formal examinations or by virtue of training or education.

Max Weber

Weber’s Elements of a Bureaucracy Officials were appointed, not elected. Administrative officials worked for fixed

salaries and were career officials. Administrative officials were not owners of the

units they administered. Administrators were subject to strict rules,

discipline, and controls regarding the conduct of their official duties. These rules and controls were impersonal and uniformly applied in all cases.

Summary The emergence of management and

organization theory had two forms: Fayol’s principles and elements of management Weber’s rationalized organization structure for

efficiency Fayol stressed: planning and organizing ,

and education for management. Weber sought leadership based on rational-

legal authority, not tradition or charisma.