principles of management slides - chapter 2
TRANSCRIPT
The Evolution of Management Thought
McGraw-Hill/IrwinContemporary Management, 5/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
chapter two
Learning Objectives
Basically, this chapter briefly provides the history of management. More important than the dates and names are knowing how Principles of Management were born and have evolved so that you can understand where they are today and predict where they’ll be tomorrow.
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Taylor’s Principles of Scientific Management (1890’s – early 1900’s)
1. Scientifically designing the “One Best Way” to do a job, replacing “how its always been done”. Ex: Shoveling
2. Selecting the right worker for each job.3. Studying worker strengths and weaknesses to
determine what training is required and what equipment is ideal.
4. Emphasis on maximizing efficiency and minimizing waste (of time and money)
5. Monitoring performance against standards and rewarding employees accordingly
6. Goal was for the company to benefit (cost savings) and the employees to benefit (wage increases)
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Problems with Scientific Management
Companies benefited in the short run with increased efficiency, but the workers did not receive increased wages
Specialized jobs became very boring, dull.Workers ended up distrusting the
Scientific Management method.Workers could purposely “under-perform.”Management responded with increased
use of machines and conveyors belts – no difference in approach today
Other Scientific Management Pioneers
Frank and Lillian Gilbreth - Used Time & Motion Studies to identify greatest efficiency in movements. Example: Bricklaying
Henry L. Gantt – Sought efficiency through task scheduling (Gantt chart) and Rewarding Productivity (Bonuses!). Also was the first major advocate for businesses and managers being socially responsible
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Administrative Management Theory
Administrative Management - The study of how to create an organizational structure that leads to high efficiency and effectiveness.
Max Weber - Developed the “Principles of Bureaucracy” as a formal system of organization and administration designed to ensure efficiency and effectiveness.
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Weber’s Principles of Bureaucracy
1) A manager’s formal authority derives from the position he holds in the organization.
2) People should occupy positions because of their performance, not because of their social standing or personal contacts.
3) Each position’s formal authority, responsibilities and relationship to other positions should be clearly specified.
4) Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.
5) Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior.
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Rules, SOPs and NormsRules – formal written instructions that specify actions to be taken under different circumstances to achieve specific goals
Standard Operating Procedures (SOPs) – specific sets of written instructions about how to perform a certain aspect of a task
Norms – unwritten, informal codes of conduct that prescribe how people should act in particular situations
Fayol’s 14 Principles of Management (early 1900’s)1. Division of work – There will be specialists in
positions2. Authority – over employees and in making decisions3. Discipline – obedience and respect is required4. Unity of command – 1 supervisor per employee5. Unity of direction – everyone working towards the
same goals6. Subordination of individual interests to general
interests – the group comes before the individual7. Remuneration – wages depend on numerous factors
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Fayol’s 14 Principles of Management
8. Centralization – how much power held by specific managers is defined
9. Scalar chain – who reports to who is clearly defined for everyone to see and communication must follow
10. Order – everything has a specific place11. Equity – everyone will be treated the same12. Stability – personnel planning is necessary13. Initiative – everyone should try their best14. Esprit de corps – harmony and unity within
the organization needs to be builtMcGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Fayol’s 14 Principles of Management (early 1900’s)
These Principles are the basic framework for the Management functions of Planning, Organizing, and Controlling
General Themes: Overall Organizational efficiency Efficient and Effective Personnel Management Managers should act appropriately and
consistently
Q. What is missing in Fayol’s Principles?
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Lincoln Electric Management Plan (1913)
1. An advisory board of employees.
2. A piece-rate method of compensation wherever possible.
3. A suggestion system.
4. Employee ownership of stock.
5. Year-end bonuses.
6. Life insurance for all employees.
7. Two weeks of paid vacation.
8. An annuity pension plan.
9. A promotion policy.McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
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Behavioral Management Theory
Behavioral Management - The study of how managers should personally behave to motivate employees to perform at high levels and be committed to the achievement of organizational goals.
Mary Parker Follett - Concerned that Taylor ignored the human side of the organization…
Suggested workers help in analyzing their jobs
If workers have relevant knowledge of the task, then they should control the task
The Hawthorne Studies (1920’s)
The Hawthorne Studies were the first to identify human variables (such as attitudes towards managers) impacted productivity: Psychological and Sociological factors might influence performance in the workplace – DUH!
Group dynamics Individual recognition and attention Participation in decision making Effective supervision = productivity & morale
Catalyst for the Human Relations Movement - studying the interaction of people
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The “Professional Manager” Emerges (1930’s)
The Professional Manager: Not an owner or investor in the
company Is hired to manage a facet of the
company Are responsible to employees,
stockholders, and the public
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Management Science Theory
Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.
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Management Science Theory
Quantitative management — utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory.
Operations management —techniques used to analyze any aspect of the organization’s production system.
Management Information Systems (MIS) — provides information vital for effective decision making.
Total Quality Management (TQM) —focuses on analyzing input, conversion, and output activities to increase product quality.
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Contingency Theory
“There is no one best way to organize” IT DEPENDS! The idea that the organizational structures and control systems manager choose depend on characteristics of the external environment in which the organization operates.
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Contingency Theory
Figure 2.5
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Contingency Theory
Mechanistic StructureAuthority is centralized at the topEmphasis is on strict discipline and orderEmployees are closely monitored and managedCan be very efficient in a stable environment
Organic StructureAuthority is decentralized throughout the organization
Departments are encouraged to take a cross-departmental or functional perspective
Works best when environment is unstable and rapidly changing
Theory Z Management: Blending the Best of Japanese and American Management
Theories (1980’s)Japanese-Type Organization
American-Type Organization
Theory Z-Type Organization
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Japanese-Type Organization
Lifetime employment
Collective decision making
Collective responsibility
Slow evaluation and promotion
Non-specialized career paths
True concern for employees as people
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American-Type Organization
Short-term employment (relative to the Japanese)
Individual decision making
Individual responsibility
Rapid evaluation and promotion
Specialized career path
Segmented concern for employee as a person
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Theory Z-Type Organization
Long-term employment
Consensual, participative decision making
Individual responsibility
Slow evaluation and promotion
Moderately specialized career paths
Concern for the employee, including their family
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Major Components and Events of the Management Movement – A Chronology
U.S. Industrial Revolution (before 1875)
Captains of industry (1875-1900)
Scientific Management era (1895-1920)
Period of Solidification (1920 to early 1930s)
Human relations movement (1931 to late 1940s)
Management process period (early 1950s to
early 1960s)
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Major Components and Events of the Management
Movement Continued Management theory jungle (early to late 1960s)
Systems approach (late 1960s to early 1970s)
Contingency approach (1970s)
Theory Z (1980s)
Search for excellence (1980s)
Emphasis on quality, TQM (1980s-1990s)
International movement (1980s-1990s)
Management into twenty-first centuryMcGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Management TODAY!
Stick around for the next 3 months and find out!
In the meanwhile…
Q. In what ways do you think management is different now than it was in Fayol’s day (100 years ago!)
Q. What do you think are the most important aspects of management today?
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.