Chapter 2: The Evolution of Management Thought

Fayol's Principle of Management

(14 Priniciples) According to Henri Fayol specialization promotes efficiency of the workforce and increases productivity. In addition, the specialization of the workforce increases their accuracy and speed.

Adam Smith (18th century economist)

-Observed that firms manufactured pins in one of two different ways -Smith found that the performance of the factories in which workers specialized in only one or a few tasks was much greater than the performance of the factory in which each worker performed all pin-making tasks

Example of Theory Y

-Southwest Airlines -Leadership cites their Theory Y culture as a driving force -Inspired by former CEO and Chairman Herb Kelleher, Southwest Airlines emphasizes a culture of fun, creativity, and camaraderie -Southwest employees note how Kelleher maintained an open-door policy of contact which enabled him to stay in touch with problems facing the airline and find solutions faster

The Hawthorne Studies and Human Relations

-Studies of how characteristics work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932 -Worker productivity was measured at various levels of light illumination

Operations management

-gives managers a set of techniques they can use to analyze any aspect of an organization's production system to increase efficiency

Quantitative management

-utilizes mathematical techniques, like linear programming, modeling, simulation and chaos theory

The Gilbreths

1. Analyze every individual action necessary to perform a particular task and break it into each of its component actions 2. Find better ways to perform each component action 3. Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort

The 4 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 2. Codify the new methods of performing tasks into written rules and standard operating procedures 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 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

Human relations movement

A management approach that advocates the idea that supervisors should receive behavioral training to manage subordinates in ways that elicit their cooperation and increase their productivity

Principle 1:

A manager's formal authority derives from the position he holds in the organization.

Theory X

A set of negative assumptions about workers that leads to the conclusion that a manager's task is to supervise workers closely and control their behavior

Theory Y

A set of positive assumptions about workers that leads to the conclusion that a manager's task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction

Open System

A system that takes resources for its external environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers

Equity

All organizational members are entitled to be treated with justice and respect.

Unity of command

An employee should receive orders from only one superior.

Principle 4:

Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.

Centralization

Authority should not be concentrated at the top of the chain of command.

Weber had five Principles of __________

Bureaucracy

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

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

Max Weber (Administrative Management Theory)

Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness.

Subordination of individual interests to the common interest

Employees should understand how their performance affects the performance of the whole organization.

Behavior of managers and workers in the work setting is as important in explaining the _______ ___ ____________ as the technical aspects of the task.

Level of performance

Stability of tenure of personnel

Long-term employees develop skills that can improve organizational efficiency.

Authority and responsibility

Managers have the right to give orders and the power to exhort subordinates for obedience

Principle 5:

Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior.

Discipline

Managers need to create a workforce that strives to achieve organizational goals.

Initiative

Managers should allow employees to be innovative and creative.

Esprit de corps

Managers should encourage the development of shared feelings of comradeship, enthusiasm, or devotion to a common cause.

Problems with Scientific Management

Many workers experiencing the reorganized work system found that as their performance increased, managers required that they do more work for the same pay. Scientific management brought many workers more hardship than gain and a distrust of managers who did not seem to care about workers' well-being.

Principle 2:

People should occupy positions because of their performance, not because of their social standing or personal contacts.

Job Specialization

Process by which a division of labor occurs as different workers specialize in different tasks over time -Workers who specialized became much more skilled at their specific tasks -Increasing job specialization increases efficiency and leads to higher organizational performance

Douglas McGregor

Proposed 2 different sets of assumptions about workers -Theory X and Theory Y

Organizational structure

System of task and authority relationships that control how employees use resources to achieve the organization's goals

Order

The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities.

Principle 3:

The extent of each position's formal authority and task responsibilities and it's relationship to other positions should be clearly specified.

Hawthorne Effect

The finding that a manager's behavior or leadership approach can affect workers' level of performance

Line of authority

The length of the chain of command that extends from the top to the bottom of an organization should be limited.

Unity of direction

The organization should have a single plan of action to guide managers and workers.

Organizational Environment

The set of forces and conditions that operate beyond an organization's boundaries but affect a manager's ability to acquire and utilize resources

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

Administrative Management

The study of how to create an organizational structure and control system that leads to high efficiency and effectiveness.

Organizational behavior

The study of the factors that have an impact on how individuals and groups respond to and act in organizations

Remuneration of personnel

The system that managers use to reward employees should be equitable for both employees and the organization.

F.W. Taylor and Scientific Management

The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

The Hawthorne Studies demonstrated the importance of understanding how the ________, _______, _________ of work-group members and managers affect performance.

feelings, thoughts and behavior

Total quality management

focuses on analyzing an organization's input, conversion, and output activities to increase product quality

Rules

formal written instructions that specify actions to be taken under different circumstances to achieve specific goals

Management information systems

gives managers information about events occurring inside the organization as well as in its external environment -information that is vital for effective decision making

Division of labor Job

specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers' boredom.

Standard Operating Procedures (SOPs)

specific sets of written instructions about how to perform a certain aspect of a task

Informal Organization

the system of behavioral rules and norms that emerge in a group

Norms

unwritten, informal codes of conduct that prescribe how people should act in particular situations