Ch 2

understanding the business

the extent to which one understands a company's business and strategies and the needs of its stakeholders.

Transformation processes

the organization's capabilities in management and technology that are applied to converting inputs into outputs.

Inputs

the people, money, information, and materials required to produce an organization's goods or services.

Outputs

the products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization.

Quality control

the strategy for minimizing errors by managing each stage of production. This uses statistical sampling to locate errors by testing just some of the items in a particular production run.

complexity theory

the study of how order and pattern arise from very complicated, apparently chaotic systems. It recognizes that complex systems are networks of interdependent parts that interact with one another according to simple rules. The discipline is used in management to understand how organizations adapt to their environments

Quality

the total ability of a product or service to meet customer needs.

Six Sigma

A rigorous statistical-analysis process that measures and reduces defects in and improves manufacturing and service-related processes. Relies on two processes:o DMAIC: series of steps called Define, Measure, Analyze, Improve, and Control, which is intended to improve existing processes. DFSS (Design for Six Sigma): managers can employ to create new products or processes.

A better-performing organization should have five positive bureaucratic features:

A well-defined hierarchy of authority. Formal rules and procedures. A clear division of labor. Impersonality. Careers based on merit.

Mary Parker Follett

Social worker and social philosopher who believed in power sharing among employees and managers. Instead of following the usual hierarchical arrangement, Follett thought organizations should become more democratic. Organizations should be operated as "communities." Conflicts should be resolved by having managers and workers talk over differences and find solutions, a process she called integration. The work process should be under the control of workers with the relevant knowledge.

Elton Mayo

Western Electric's Hawthorne plant, the Hawthorne studies began with an investigation into whether workplace lighting level affected worker productivity. Mayo hypothesized the Hawthorne effect—employees worked harder if they received added attention. Although the design of the studies has been criticized, they drew attention to the importance of "social man" and how managers using good human relations could improve worker productivity.

total quality management (TQM)

a comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction.

Frank and Lillian Gilbreth (scientific management)

a husband-and-wife team of industrial engineers, expanded on Taylor's motion studies, using movie cameras to film workers at work. Frank Gilbreth coined the term "therblig," physical motions you perform from time to time. By identifying the therbligs in a job, Frank and Lillian Gilbreth were able to eliminate motions while reducing fatigue.

system

a set of interrelated parts that operate together to achieve a common purpose.

Hugo Munsterberg (behavioral)

"the father of industrial psychology," Study jobs and determine which people are best suited to specific jobs. Identify the psychological conditions under which employees will do their best work. Devise management strategies that would influence employees to follow management's interests.

three historical management viewpoints

(1) the classical; (2) the behavioral; and (3) the quantitative

Candidates should learn seven things about a company before showing up at a job interview

(1) the company's mission and vision statements, (2) the company's core values and culture, (3) the history of the company, (4) key organizational players, (5) the company's products, services, and clients, (6) current events and accomplishments, and (7) comments from current or previous employees.

Three contemporary management perspectives

(1) the systems, (2) the contingency, and (3) the quality-management viewpoints

classical viewpoint

(a) scientific management and (b) administrative management

Max Weber

German sociologist described a bureaucracy as a rational, efficient, ideal organization based on principles of logic.

TQM has four components:

Make continuous improvement a priority. Get every employee involved. Listen to and learn from customers and employees. Use accurate standards to identify and eliminate problems.

Gary Hamel

Management Innovation Lab, management ideas are not fixed; they are a process. Hamel suggests that management should be innovative, and this process begins by identifying core beliefs people have about the organization.

Douglas McGregor

Theory X represents a pessimistic, negative view of workers—workers are considered to be irresponsible, hate work, and would rather be led than lead. Theory Y represents an optimistic, positive view of workers. Theory X/Theory Y is important because it helps managers understand how their beliefs affect their behaviors.

learning organization

an organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge. Managers in learning organizations: Constantly scan their external environments for new knowledge and try to actively infuse their organizations with new ideas and information. Actively work at transferring knowledge throughout the organization, reducing barriers to sharing information and ideas. Encourage employees to use the new knowledge to change their behavior and help achieve organizational goals.

Total quality management (TQM)

comprehensive approach—led by top management and supported throughout the organization—dedicated to continuous quality improvement, training, and customer satisfaction.

Administrative management

concerned with managing the total organization rather than individual workers.

Peter Drucker

creator and inventor of modern management. proposed that management should be treated as a profession, like medicine or law. first person to give us a handbook to manage complex organizations.

quantitative viewpoints

emphasize the application to management of quantitative techniques, such as statistics and computer simulations Two approaches of quantitative management are management science and operations management

behavioral viewpoint

emphasized the importance of understanding human behavior and of motivating employees toward achievement

behavioral viewpoint

emphasized the importance of understanding human behavior and of motivating employees toward achievement. The behavioral viewpoint developed over three phases: early behaviorism, the human relations movement, and behavioral science.

Scientific Management

emphasized the scientific study of work methods in order to improve the productivity of individual workers.

contingency viewpoint

emphasizes that a manager's approach should vary according to the individual and environmental situation

The Classical Viewpoint

finding ways to manage work more efficiently two branches—scientific and administrative. assumes that people are rational.

Henry Fayol (administrative management)

first to systemize the study of management behavior, and he identified the major functions of management—planning, organizing, leading, and controlling.

Abraham Maslow

hierarchy of needs, which included physiological needs, safety, social needs, esteem, and self-actualization.

historical perspective

includes three viewpoints—classical, behavioral, and quantitative.

contemporary perspective

includes three viewpoints—systems, contingency, and quality-management.

Feedback

information about the reaction of the environment to the outputs that affect the inputs.

The Four Parts of a System

inputs, transformational processes, outputs, feedback

mechanistic

it tends to view humans as cogs within a machine. Human needs are not given importance. However, this approach demonstrated that scientific methods, time and motion studies, and job specialization could be used to boost productivity.

closed system

little interaction with its environment; that is, it receives very little feedback from the outside. Any organization that ignores feedback from the environment risks failure.

Frederick Taylor (scientific Management)

managers could eliminate soldiering, deliberately working at less than full capacity, by applying four principles of science. Evaluate a task by scientifically studying each part of the task. Carefully select workers with the right abilities for the task. Give workers the training and incentives to do the task with the proper work methods. Use scientific principles to plan the work methods. Taylor used motion studies, in which he broke down each worker's job into basic physical units, and then trained workers to use the best possible methods. He suggested using a differential rate system in which more efficient workers earned higher wages. Taylor believed that, if used correctly, the principles of scientific management could enhance productivity.

Operations management

ocuses on managing the production and delivery of an organization's products or services more effectively. Operations management is concerned with work scheduling, production planning, facilities location and design, and optimum inventory levels.

Quality assurance

ocuses on the performance of workers, urging employees to strive for "zero defects." This has been less successful because employees often have no control over the design of the work process.

Management science

or operations research, focuses on using mathematics to aid in problem solving, decision making, and strategic planning. Management science stresses the use of rational, science-based techniques and mathematical models to improve decision making and strategic planning.

subsystems

parts making up the whole system, and a part of the larger environment.

human relations movement (2)

pioneered by Abraham Maslow (who proposed a hierarchy of needs) and Douglas McGregor (who proposed a Theory X and Theory Y view to explain managers' attitudes toward workers).

Administrative management

pioneered by Charles Spaulding, Henri Fayol, and Max Weber, was concerned with managing the total organization.

Scientific management

pioneered by Frederick W. Taylor and Frank and Lillian Gilbreth, emphasized the scientific study of work methods to improve the productivity of individual workers.

Early behaviorism (1)

pioneered by Hugo Munsterberg, Mary Parker Follett, and Elton Mayo.

W. Edwards Deming and Joseph M. Juran

pioneers in introducing quality management to manufacturing. Deming believed that quality stemmed from "constancy of purpose" along with statistical measurement and reduction of variations in the production process. He also proposed the "85-15 rule"—when things go wrong, there is an 85 percent chance that the system is at fault, only a 15 percent chance that the individual worker is at fault. Juran defined quality as "fitness for use" and suggested that companies should concentrate on satisfying the real needs of customers.

human relations movement

proposed that better human relations could increase worker productivity.

quality-management viewpoint

quality control, the strategy for minimizing errors by managing each stage of production, and quality assurance, which focuses on the performance of workers, urging employees to strive for zero defects.

systems viewpoint

regards the organization as a system of interrelated parts.

behavioral science approach

relied on scientific research for developing theories about behavior useful to managers.

Behavioral science

relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers.

systems viewpoint

sees organizations as a system, either open or closed, with inputs, outputs, transformation processes, and feedback

Evidence-based management

translating principles based on best evidence into organizational practice, bringing rationality to the decision-making process. Managers should rely on the hard facts about what works and what doesn't rather than merely accepting conventional wisdom about management.

synergy

which occurs when two or more forces combined create an effect that is greater than the sum of their individual effects.