The Evolution of Management Thought

The Evolution of Management Thought

Early Management Thought

Classical Perspective

Contemporary Management Perspectives

Behavioral Perspective

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Evolution Of Management Thought

Classical Approaches

Contemporary Approaches

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Systematic management Scientific management

Administrative management

Quantitative management

Systems theory

Contingency theory

Current and future revolutions

Human relations

Organizational behavior

Bureaucracy

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Job Specialization and the Division of Labor

Adam Smith (18th century economist)
Observed that firms manufactured pins in one of two different ways:
Craft-styleeach worker did all steps.

Productioneach worker specialized in one step.

Realized that job specialization resulted in much higher efficiency and productivity
Breaking down the total job allowed for the division of labor in which workers became very skilled at their specific tasks.

Scientific Management Theory

Evolution of Modern Management
Began in the industrial revolution in the late 19th century as:
Managers of organizations began seeking ways to better satisfy customer needs. Large-scale mechanized manufacturing began to supplanting small-scale craft production Social problems developed in the large groups of workers employed under the factory system. Managers began to focus on increasing the efficiency of the worker-task mix.

F.W. Taylor and Scientific Management

Scientific Management
The systematic study of the relationships between people and tasks for the purpose of redesigning the work process for higher efficiency.
Defined by Frederick Taylor in the late 1800s to replace informal rule of thumb knowledge. Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.

Four Principles of Scientific Management

1) Study the way workers perform their tasks, gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed Time-and-motion study

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Four Principles of Scientific Management

2) Codify the new methods of performing tasks into written rules and standard operating procedures

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Four Principles of Scientific Management

4) Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

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Four Principles of Scientific Management

3) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures

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Problems with Scientific Management

Managers frequently implemented only the increased output side of Taylors plan. Workers did not share in the increased output. 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.
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Henry Fayols 14 Principles of Management

1. Division of work 8.

Centralization

2. Authority
3. Discipline 4. Unity of command

9.

Scalar chain

10. Order 11. Equity 12. Stability and tenure 13. Initiative 14. Esprit de corps

5. Unity of direction
6. Subordination of

individual interest to the general interest 7. Remuneration

Fayols Principles of Management

Division of Labor: allows for job specialization. jobs can have too much specialization leading to poor quality and worker dissatisfaction. Authority and Responsibility both formal and informal authority resulting from special expertise. Unity of Command Employees should have only one boss.

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Fayols Principles of Management

Line of Authority A clear chain of command from top to bottom of the firm. Centralization The degree to which authority rests at the top of the organization. Unity of Direction A single plan of action to guide the organization.

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Fayols Principles of Management

Equity - The provision of justice and the fair and impartial treatment of all employees. Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Initiative - The fostering of creativity and innovation by encouraging employees to act on their own.

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Fayols Principles of Management

Discipline Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success.

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Fayols Principles of Management

Stability of Tenure of Personnel Long-term employment is important for the development of skills that improve the organizations performance. Subordination of Individual Interest to the Common Interest The interest of the organization takes precedence over that of the individual employee.
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Fayols Principles of Management

Esprit de corps Comradeship, shared enthusiasm foster devotion to the common cause (organization).

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Behavioral Management Theory

Behavioral Management
The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.

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The Hawthorne Studies

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The Hawthorne Studies

Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.

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The Hawthorne Studies

Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

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The Hawthorne Studies

Human Relations Implications Hawthorne effect workers attitudes toward their managers affect the level of workers performance

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The Hawthorne Studies

Human relations movement advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity

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The Hawthorne Studies

Implications Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task

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The Hawthorne Studies

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

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The Behavioral Approach -The Hawthorne Studies (1924)

The studys results that productivity was strongly affected by workers attitudes turned management toward the humanistic and realistic viewpoint of the social man model.

Elton Mayo
Emotional factors were more important determinants of productive efficiency than were physical and logical factors.

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General Systems Theory

General Systems Theory
An interdisciplinary area of study based on the assumptions that everything is part of a larger, interdependent arrangement

Levels of systems
Each system is a subsystem of the system above it.

Closed Versus Open Systems

Closed system: A self-sufficient entity Open system: Something that depends on its surrounding environment for survival
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The Open-Systems View

Open System
A system that takes resources for its external environment and converts them into goods and services that are then sent back to that environment for purchase by customers. Inputs: the acquisition of external resources. Conversion: the processing of inputs into goods and services. Output: the release of finished goods into the environment.

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The Organization as an Open System

Other System Considerations

Closed system
A system that is self-contained and thus not affected by changes occurring in its external environment. Often undergoes entropy and loses its ability to control itself, and fails.

Synergy
Performance that results when individuals and departments coordinate their actions
Performance gains of the whole surpass the sum of the performance of the individual components.

Contingency Theory
Contingency Theory
The idea that the organizational structures and control systems manager choose depend onare contingent oncharacteristics of the external environment in which the organization operates. Assumes there is no one best way to manage.
The environment impacts the firm and managers must be flexible to react to environmental changes.

In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively.

Contingency Theory of Organizational Design