CHAPTER 2: Managing History and Current Thinking

LEARNING OB ECTI!E" 1. an understanding of the classical approach to management 2. an appreciation for the work of Frederick W. Taylor, Frank and Lillian Gilbreth, enry L. Gantt, and enri Fayol !. an understanding of the beha"ioral approach to management #. an understanding of the studies at the awthorne Works and the human relations mo"ement $. an understanding of the management science approach to management %. an understanding of how the management science approach has e"ol"ed &. an understanding of the system approach to management '. knowledge about the learning organi(ation approach to management ). an understanding of how triangular management and the contingency approach to management are related

#ETAILE# LECT$RE O$TLINE *. **. *+T,-./0T-,1 02345 62 7,-8L49 2T 90.-+2L.:3; T 4 0L233*02L 277,-20 < 4mphasi(es organi(ational efficiency to increase organi(ational success. 2. Lower=Le"el 9anagement 2nalysis < 3cientific management emphasi(es the >one best way.> 1. Frederick W. Taylor ?1'$%=1)1$@ < 0alled the father of scientific management. < is primary goal was to increase worker efficiency by scientifically designing Aobs. ?a@. Work at 8ethlehem 3teel < 2t 8ethlehem 3teel he constructed the >science of sho"eling>. 9atched sho"el to si(e of worker. ?b@. Global 3potlight < Found the one best way to compete globally was through automation.
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2. Frank Gilbreth ?1'%'=1)2#@, Lillian Gilbreth ?1'&'=1)&2@ < 3ignificant contributors to the scientific method. < 7rimary in"estigati"e tool in their research was motion study ?reducing each Aob to the most basic mo"ement possible@. !. enry L. Gantt ?1'%1=1)1)@ ?a@. 3cheduling *nno"ation < The Gantt chart ?b@. ,ewarding *nno"ation < Gantt belie"ed that worker compensation needed to correspond not only to production through the piece=rate system but also to o"erproduction through the bonus system. ?c@. 7eople 7erspecti"es < 0ourier 7ublications in"ol"ed its workers in the decision to automate. 2llowing them to decide on the kind of eBuipment helped obtain their commitment to technologyCs success. 2cross *ndustries5 9ail -rder ,etailing = 6-ne 8est Way at L. L. 8ean; < The one best way to fill customer orders was to upgrade the information system. 0omprehensi"e 2nalysis of 9anagement < 4mphasi(es the entire range of managerial performance. < enri Fayol ?1'#1=1)2$@ < /sually regarded as the pioneer of administrati"e theory. < General management principles suggested by Fayol5 < .i"ision of work < 2uthority < .iscipline < /nity of command < /nity of direction < 3ubordination of indi"idual interests to the general interest < ,emuneration < 0entrali(ation < 3calar chain < -rder < 4Buity < 3tability of tenure of personnel < *nitiati"e < 4sprit de 0orps Limitations of the 0lassical 2pproach < The human "ariable for the organi(ation may not be adeBuately emphasi(ed in the classical approach.

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T 4 84 2D*-,2L 277,-20 < 4mphasi(es stri"ing to increase production through an understanding of people. 2. The ,elay 2ssembly Test ,oom 4Eperiments < The eEperimenters belie"ed that if producti"ity was studied long enough under different working conditions, those working conditions maEimi(ing production would be found. < The eEperimenters concluded that human factors within organi(ations could significantly influence production. 8. The 8ank Wiring -bser"ation ,oom 4Eperiment < The purpose of the bank wiring obser"ation room eEperiment was to analy(e the social relationships in a work group. < The research concluded that social groups in organi(ations could effecti"ely eEert enough pressure to influence indi"iduals to disregard monetary incenti"es. 0. ,ecogni(ing the uman Dariable < The awthorne studies pointed up the need to study the human "ariable, since it could drastically increase and decrease producti"ity. .. The uman ,elations 9o"ement < 2 people oriented approach to management. 9anagement stimulates high worker commitment and producti"ity through human relation skills, the ability to work with people in a way to enhance organi(ational success. T 4 92+2G494+T 30*4+04 277,-20 < 3uggests that managers can best impro"e their organi(ations by using the scientific method and mathematical techniBues to sol"e operational problems. 2. The 8eginning of the 9anagement 3cience 2pproach < The scientific method of problem=sol"ing in"ol"es the following seBuential steps5 < -bser"ing < 0onstructing a model < .educing < Testing the model < 0an be traced back to World War **. 8. 9anagement 3cience Today < 8y 1)$$, the management science approach to sol"ing industrial problems had pro"en "ery effecti"e. < 8y 1)%$, the management science approach was being used in many companies and was beging applied to di"erse management problems. < *n the 1)'Fs, sur"eys indicated these techniBues were used eEtensi"ely in "ery large, compleE organi(ations < The challenge for the 1))FCs is to find ways of applying management science techniBues to smaller organi(ations. 0. Guality 3potlight < The 9alcolm 8aldrige 2ward e"aluates the Buality of a company in terms of efficiency and effecti"eness. 9erely applying forces companies to re"iew its entire operation in terms of Buality deficiencies. .. 0haracteristics of 9anagement 3cience 2pplications
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9anagement problems studies are so complicated that managers need help in analy(ing a large number of "ariables. < 9anagement science applications generally use economic implications as guidelines for making a particular decision. < The use of mathematical models to in"estigate the decision situation is typical in management science applications. < The use of computers. 9anagement and the *nternet < 2pplies the 6*f=Then; approach to eEplain the rise of the 0ybercafe and to suggest a way of responding to the decline. 4 0-+T*+G4+01 277,-20 4mphasi(es that what managers do in practice depends on, or is contingent upon, a gi"en set of circumstances or situation. 2ttempts to outline the conditions or situations in which "arious management methods ha"e the best chance of success. 9ain challenges in using the contingency approach include5 < 7ercei"ing organi(ational situations as they actually eEist < 0hoosing the management tactics best suited to those situations < 0ompetently implementing those tactics

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T 4 313T49 277,-20 < 8ased on general system theory ?to fully understand the operation of an entity, it must be "iewed as a system@. < 2 system is a number of interdependent parts functioning as a whole for some purposes 2. Types of 3ystems < 0losed systems are not influenced by and do not interact with their en"ironmentsH i.e., a clock. < 2n open system is constantly interacting with its en"ironmentH i.e., a plant or "egetable. 8. 3ystems and >Wholeness> < The system must be "iewed as a whole and modified only through changes in its parts. 0. The 9anagement 3ystem < 0omposed of a number of parts that function on an interdependent basis to achie"e a purpose. < The three main parts are5 < -rgani(ational input < -rgani(ational process < -rgani(ational output

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*nformation for 9anagement 3ystem 2nalysis < Three primary information sources5 < The classical approach to management < The beha"ioral approach to management < The management science approach to management < Triangular management uses these three information sources to analy(e the management system. "$MMAR%

This chapter discusses siE approaches to management situations and to sol"ing organi(ational problems. The first one discussed is the classical approach to management. This approach deals with lower=le"el management analysis, such as was done by Frederick W. Taylor, Frank and Lillian Gilbreth, and enry L. Gantt. *t also is concerned with a comprehensi"e analysis of management as a whole, as eEemplified by enri Fayol. 8ecause the human factor was not adeBuately emphasi(ed in the classical approach, the beha"ioral approach to management was de"eloped. This approach began with the eEperiments at the awthorne Works of Western 4lectric. This method emphasi(es people. The third approach is the management science approach to management, which in"ol"es using the scientific method and mathematics to sol"e operational problems. This method began in World War **. The approach is widely used today, especially by "ery large, compleE organi(ations. The contingency approach to management emphasi(es that what managers do in practice is dependent on a gi"en set of circumstances. The approach is based on the premise that there is probably no one best way to sol"e a management problem in all organi(ations, but there is probably one best way to sol"e any gi"en managerial problem in a specific organi(ation. The fifth approach to management is the systems approach. This approach is based on the theory that to understand fully the operation of an entity, the entity must be "iewed as a system. There are two basic systems in management5 closed systems and open systems. The effect of en"ironmental factors on the management system cannot be o"eremphasi(ed. 9anagers can use triangular management to get the information they need about their en"ironments. The siEth approach to management is the Learning -rgani(ation approach. 2 learning organi(ation is an organi(ation that does well in creating, acBuiring, and transferring knowledge, and in modifying beha"ior to reflect new knowledge.

RE!IE& '$E"TION" AN# AN"&ER" 1. List the siE approaches to managing. The siE approaches are5 ?1@ the classical approach, ?2@ the beha"ioral approach, ?!@ the management science approach, ?#@ the contingency approach, ?$@ the system approach, and ?%@ the learning organi(ation approach. 2. .efine the classical approach to management. The classical approach to management can best be defined as the approach that stresses efficiency in the organi(ation through task structuring. The task structuring in"ol"es the analysis of the task to determine the >one best way> to perform the task. This analysis is broken into two distinct areas5 lower=le"el management and comprehensi"e management analysis. 2nalysis of both areas concentrates on efficiency and organi(ation.

!. 0ompare and contrast the contributions to the classical approach made by Frederick W. Taylor, Frank and Lillian Gilbreth, and enry L. Gantt. *n comparing these four peopleCs contributions to the classical approach, two points appear to be common to all. The first is the area in which they made their contributionsIlower=le"el management. The second is their actual field of interestIthat of increasing worker efficiency through application of the scientific method. owe"er, these indi"iduals all differed in the tools they used in their work. These tools, by and large, constitute their contributions to the classical approach. For Taylor, the tool was a scientific designing of Aobs, commonly referred to as scientific management. The Gilbreths further pursued this scientific method through the use of motion study. The analysis of basic mo"ements was used to increase worker performance. The Gilbreths also introduced "ariables that Taylor chose to lea"e outIthe beha"ioral "ariable of the workers and en"ironment. Gantt sought to increase efficiency through the use of task scheduling and bonus inno"ation. GanttCs research led to the combining of many tasks and the pro"ision of incenti"es to increase worker efficiency.

#. ow does enri FayolCs contribution to the classical approach differ from the contributions of Taylor, the Gilbreths, and GanttJ FayolCs contribution of the elements and general principles of management differs from the contributions of the others in that his contribution was directed at management as a whole, whereas Taylor, Gantt, and the Gilbreths concentrated their efforts on a study of management in terms of Aob design. Fayol concerned himself with the entire range of a managerCs performance. Fayol, thus, mo"ed beyond simple task structuring to a series of elements and principles for achie"ing organi(ational efficiency.
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$. What is scientific managementJ 3cientific management is a process that attempts to find the >one best way> to perform a task in order to achie"e maEimum worker producti"ity and efficiency. This process reBuires scientific inBuiry through obser"ation and eEperimentation, and results in the scientific design of the task based on these obser"ations.

%. .escribe motion study as used by the Gilbreths. 9otion study, as used by the Gilbreths, in"ol"ed the reduction of each Aob to the most basic mo"ements possible. These motions were then analy(ed to form Aob performance standards and to eliminate unnecessary or wasted mo"ements. The analysis was long and complicated and in"ol"ed the eEamination of three "ariables in the task situation==the beha"ioral "ariables concerning the worker, the work en"ironment, and the motion itself.

&. .escribe GanttCs inno"ation in the area of worker bonuses. Gantt belie"ed that a >taskmaster> or manager should assign tasks in the workerCs interest to perform themH that is, that a bonus plan tied to the piece=rate system would encourage people to higher le"els of production. Gantt de"eloped a system in which workers earned a bonus when their production went beyond their Buota for the day.

'. List and define FayolCs general principles of management. FayolCs general principles of management are5 ?1@ .i"ision of work. Work should be di"ided among indi"iduals and groups to ensure that effort and attention is focused on special portions of the task. Worker speciali(ation is the best way to use the organi(ationCs human resources. ?2@ 2uthority. 2uthority is the right to gi"e orders and the power to eEact obedience. ,esponsibility in"ol"es being accountable and must be associated with authority. Whene"er one assumes authority, one also assumes responsibility. ?!@ .iscipline. The common effort of the workers is necessary if the organi(ation is to be successful. ?#@ /nity of command. Workers should recei"e orders from only one manager. ?$@ /nity of direction. The entire organi(ation should mo"e towards a common obAecti"e, in a common direction. ?%@ 3ubordination of indi"idual interests to the general interests. The interests of one person should not be put before those of the organi(ation as a whole. ?&@ ,emuneration. 9any "ariables need to be considered in the determination of a workerCs pay. These "ariables include cost of li"ing, the success of the business, business conditions, and the supply of Bualified personnel.
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?'@ 0entrali(ation. *n this lowering of the importance of the subordinate role, the degree to which an organi(ation is centrali(ed or decentrali(ed depends upon the specific organi(ation. ?)@ 3calar chain. 9anagers eEist in a hierarchy, each ha"ing "arying degrees of authority that decrease as they mo"e down from the le"el of president. Lower=le"el managers should, thus, keep upper=le"el managers informed of their work acti"ities. ?1F@ -rder. For the sake of efficiency and to keep coordination problems to a minimum, all materials and people that are related to a specific kind of work should be assigned to the same general location in the organi(ation. ?11@ 4Buity. 2ll employees should be treated as eBually as possible. ?12@ 3tability and tenure of personnel. ,etaining producti"e employees should always be a high priority for managers. ?1!@ *nitiati"e. +ew or additional work acti"ities taken on through the self=direction of the worker should be encouraged by the manager. ?1#@ 4sprit de corps. 9anagement should encourage harmony and general feelings among employees.

). What is the primary limitation to the classical approach to managementJ The primary limitation to the classical approach to management is the lack of consideration gi"en to the human "ariable in the organi(ation. The interpersonal areas of conflict, communication, leadership, and moti"ation are merely glanced o"er and, for the most part, ignored. 1F. .efine the beha"ioral approach to management. The beha"ioral approach to management in"ol"es organi(ational success from an understanding of people. /nlike the classical approach, production is increased by understanding the people in the organi(ation and adapting the organi(ation to them.

11. What is the significance of the studies at the awthorne Works of the Western 4lectric 0ompanyJ The significance of these studies was the reali(ation of the importance of human factors in the organi(ation. The studies showed that the human "ariable could directly decrease or increase production le"els. 9anagers recogni(e that they had to understand the influence that human factors could eEert in an organi(ation in order to maEimi(e the positi"e effects and minimi(e the negati"e effects.

12. .escribe the human relations mo"ement. The human relations mo"ement is a people=oriented approach to management. The obAecti"e being to enhance organi(ational success through people. uman relation skills are those skills needed to work with people in such a way as to enhance company success. 2braham 9aslow and .ouglas 9cGregor are big ad"ocates of the human relations mo"ement.

1!. What is the management science approach to managementJ The management science approach to management is the application of the scientific method to operational problems to arri"e at a solution to those problems. 2s such, mathematical models must be constructed to represent the system. The problemCs solution is found by sol"ing the eBuations that represent the system. *n contrast to the classical and beha"ioral approaches to managing, the management science approach ad"ocates the use of the scientific method to increase production efficiency.

1#. What are the steps in the scientific method of problem sol"ingJ The scientific method of problem sol"ing has four steps, which must be followed in order. First, the manager should systematically obser"e the system whose beha"ior must be eEplained to sol"e the problem. 3econd, a model that is consistent with these obser"ations and from which the conseBuences of changes in the system can be predicted must be constructed. Third, the model should be used to determine how the system will react under conditions that ha"e not yet been obser"ed were such changes made in the system. Fourth, the manager should test the model by running an eEperiment on the actual system to see if the effects of changes made using the model actually do occur.

1$. List and eEplain three characteristics of situations in which management science applications usually are made. 2ny three of the following four responses would be sufficient5 ?1@ *ncreased effecti"eness of decision making related to compleE management situations. -ften the problems confronting management are Buite complicated and in"ol"e the analysis of a large number of "ariables. The application of the scientific method makes such analysis less cumbersome through the use of mathematical models. ?2@ /se of economic implications as guidelines for making a particular decision. 9anagement science techniBues are best suited for analy(ing Buantifiable factors. The formulation of eBuations in constructing the models reBuires that the system be of this nature for the most part. ?!@ /se of mathematical models to in"estigate the decision situation. 9athematical models are constructed in management science in an attempt to represent reality. 3uch models can then be used to test ways of impro"ing the real=world situation without upsetting the actual system.
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?#@ /se of a computer. /se of a computer is necessary in management science applications for two reasons5 ?1@ the great compleEity of the management problems in which this approach is applied, and ?2@ the sophisticated analysis performed on the problem=related information. 1%. .efine the contingency approach to management. The contingency approach to management emphasi(es the "iewpoint that what managers do in practice depends on, or is contingent upon, a gi"en set of circumstancesIa situation. This approach attempts to outline the conditions or situations in which "arious management methods ha"e the best chance of being successful.

1&. What is a systemJ 2 system is a number of interdependent parts functioning as a whole for some purpose. 2n eEample would be the human body whose interdependent parts include many organs and tissues, many of which are highly speciali(ed.

1'. What is the difference between a closed and an open systemJ 2 closed system does not interact with its en"ironments, nor is it influenced by them. 3uch systems are mostly mechanical. -pen systems, on the other hand, are constantly interacting with their en"ironments. They are both influenced by and ha"e influence upon their en"ironment.

1). 4Eplain the relationship between system analysis and >wholeness.> >Wholeness> simply means that the system must be "iewed as a whole and that modification of the system must be made only through changes in the parts of the system. 9ore specifically, any analysis of the system must be made in the conteEt of the whole system, not any one part. *n system analysis, the concept of wholeness must be emphasi(ed. 3tudies of the interdependent parts must be secondary to analysis of the whole. The key to system analysis is an understanding of the >whole,> the nature of the parts, their role and function in the whole, and their integration and interrelatedness in the whole.

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2F. What are the parts of the management systemJ The system consists of three main parts5 ?1@ organi(ational input, ?2@ organi(ational process, and ?!@ organi(ational output. 9ore simply stated, these parts are resources, the production process, and finished goods. These three represent a combination that eEists to achie"e organi(ational obAecti"es.

21. 4Eplain in your own words what is meant by a learning organi(ationJ 2 learning organi(ation is an organi(ation that does well in creating, acBuiring, and transferring knowledge, and in modifying beha"ior to reflect new knowledge.

"$GGE"TE# AN"&ER" TO #I"C$""ION '$E"TION" (OR CA"E "T$#% NOTE: "ee a)so the se*tion +"uggested A*ti,ities-

1. .escribe 2l .unlapCs management approach. .oes it fit any of the classical or modern approachesJ 4Eplain. ow does it contradict some point in these approaches. The classical approach increases production through increased organi(ational efficiency. TaylorCs basic premise is that there is one best way to do a Aob. .unlap seems to feel that an organi(ation is always too top hea"y and can be made to run more efficiently by slashing layers of unrelated employees and business "entures. The human relations approach seems to say that people are your most important commodity. 2. .elineate the good points and bad points of a massi"e downsi(ing effortIsuch as undertaken at 3cott 7aperIas if you were a stakeholder, and then, as if you were a shareholder. 2re your two lists differentJ 4Eplain. 2s a stockholder, the good points regarding massi"e downsi(ing would be the increase in stock price and "alue as a result of bottom line impro"ement. The bad point may come with ad"erse publicity as to how people are being let go, and the companies morale and attitude start affecting the bottom line, thereby affecting stock "alues. 2s a stakeholder * would welcome downsi(ing if it were meant to keep the entire company afloat. The bad point would seem to encompass those that were let go and under what circumstances. Were they gi"en counseling and training so as to help them to go elsewhere in the industryJ

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!. What factors were the keys to increased producti"ity at 3cott 7aperJ responsible for the companyCs turnaroundJ

ow was .unlap

*ncreased producti"ity in this case may ha"e come from concern o"er keeping oneCs Aob. 3tudents might note that .unlap has a particular way of doing business5 if you disagree, then you will most probably be looking for another Aob. .unlap turned 3cott around through cost=cutting measures. Get rid of those people and operations that donCt contribute to the bottom line results.

#. .escribe the kind of company that might hire .unlap neEt. What goals might its board of directors ha"eJ What problems might the company faceJ What companies in the news today fit your descriptionJ .unlap would probably be hired by another company sinking fast under the weight of a bloated and inefficient work force. The board of directors are responsible to their stockholders and will do what is necessary to increase market "alue. The problems encountered by these companies might ha"e to do with unioni(ation or bad business "entures. 3ome of the companies that might fit this description would be TW2, 3ears, and the banking industry.

"$GGE"TE# ACTI!ITIE"

1. 2sk students to think of complaints they may ha"e concerning an organi(ation and imagine that they ha"e taken o"er as its top manager. 2sk them to show how they would use the approaches suggested in this chapter to change the organi(ation.

2. 4"ery student has been a part of an organi(ation at one time = if nothing else, at least as part of a school. 2sk students to identify organi(ations which ha"e used one or more of the approaches used in the chapter. 2sk them to identify how well the approach worked, why it did or did not work, and what they think should ha"e been done differently.

!. 2sk students to identify how any of the approaches in the chapter could be applied in their personal li"es. For eEample, is there anything about contingency management which might be useful to them in their indi"idual li"esJ #. *n the study in"ol"ing 60hainsaw 2l .unlap,; one of the Buestions asked about the type of company which might hire him neEt. 2ctually, he went on to take o"er 3unbeam, using much the same approach as he had before and the initial results were impressi"e. owe"er, something went wrong and this time .unlap was among those who were fired at 3unbeam. ,esearch 2l .unlap and 3unbeam to find out what happened and why.

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TEACHING NOTE" (OR THE INTRO#$CTOR% CA"E

The introductory case uses an organi(ation which has likely been patroni(ed at some time by most students and will be known by all. The case points to 9c.onald:s attempt to deal with a decline in its market share. 9c.onald:s changed its approach, which in"ol"ed prepackaged food ready to sell and customi(ing food only if reBuested. *nstead, it sought to do as 8urger King which promoted its approach with the slogan5 6 a"e it your way.; 9c.onald:s implemented a 6one order at a time; approach which it felt would reduce waste from discarded food and increase freshness, while also better meeting indi"idual wants. The approach in"ol"ed a computeri(ed system which was supposed to pro"ide not customi(ation but greater speed. The rest of the case study discussed how each of the management approaches might be used to impro"e effecti"eness, customer ser"ice, and profitability. The case study opens an opportunity for interesting discussion. 3tudents could be asked to comment on their obser"ations concerning 9c.onald:s. a"e they noticed any change in ser"ice and Buality, good or badJ ow does 9c.onald:s ser"ice and Buality compare to competitorsInow "ersus pre"iouslyJ The case study did not eEplain how the computeri(ed system resulted in both greater customi(ation and faster ser"ice. -ther things being eBual, many would eEpect increased customi(ation would result in slower ser"ice. Furthermore, if the computeri(ed system has produced faster ser"ice using customi(ation, would it not produce e"en faster ser"ice without customi(ation. 2sk students what they think is more important in a business which is known for being 6fast food;Iis it being 6fast,; or is it the Buality of foodJ 9any will say that they want 6both of the abo"e; or that their priority may depend on whether they are in a hurry. The wrap=up case has the following Buestions. 1. 8ased on information in the introductory case, list three problems that you think future 9c.onald:s managers will ha"e to sol"e. 2 "ariety of answers could be obtained depending on whether one focuses on competitors, changes in eating habits, legislation, en"ironmental issues, employee a"ailability, technology, and markets in the /nited 3tates "ersus o"erseas markets. 2. What action?s@ do you think the managers will ha"e to take to sol"e these problemsJ *nformation and contingency plans will be reBuired. 2s the fast food business matures in any country in which 9c.onald:s operates and as 9c.onald:s gains a dominant position within that country, it may reBuire multiple approaches to keep from losing at least some market share occasion. !. From what you know about fast=food restaurants, how easy would it be to manage a 9c.onald:s restaurantJ WhyJ
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3tudents may ha"e many responses. They may point to the long hours, customer complaints, and stress.

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