Ch. 2: Management Theory

The Learning Organization: Handling Knowledge & Modifying Behavior

"Learning organizations are places where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to lear together."- Peter Senge Is an organization that actively creates acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge and contain three parts -creating and acquiring knowledge -transferring knowledge -modifying behavior

Operations Management

Focuses on managing the production and delivery of an organization's products or services more effectively. Is concerned with work scheduling, production planning, facilities location and design, and optimum inventory levels. Through the rational management of resources and distribution of goods and services, operations management helps ensure that business operations are efficient and effective.

Two Overarching Perspectives about Management:

HISTORICAL PERSPECTIVE (1911-1950s): -Classical Viewpoint (1911-1947) -Behavioral Viewpoint (1913-1950s) -Quantitative Viewpoint (1940s-1950s) CONTEMPORARY PERSPECTIVE (1960s-Present): -The Systems Viewpoint -The Contingency Viewpoint -The Quality-Management Viewpoint

The Problem with the Classical Viewpoint

It is mechanistic: it tends to view humans as cogs within a machine, not taking into account the importance of human needs.

Quality-Management Viewpoint

includes quality control, quality assurance, and total quality management and deserves to be considered because of its impact on contemporary management perspectives

How to Build a Learning Organization: Three Roles Managers Play

-You can build commitment to learning -You can work to generate ideas with impact -You can work to generalize ideas with impact

Six Practical Reasons for Studying This Chapter: Theory

1. Understanding of the present (understanding history) 2. Guide to action (good theories help make predictions to develop a set of principles) 3. Source of new ideas 4. Clues to meaning of your managers' decisions 5. Clues to meaning of outside events. 6. Producing positive results

Administrative Management

Concerned with managing the total organization. Henri Fayol was first to systematize management behavior and was the first to identify the major functions of management (planning, organizing, leading, and controlling, as well as coordinating). Max Weber, highly influenced large corporations such as Coca-Cola, claimed a bureaucracy was a rational, efficient, ideal organization based on principles of logic and had five positive bureaucratic features: 1. A well-defined hierarchy of authority 2. formal rules and procedures 3. a clear division of labor, with parts of a complex job being handled by specialists 4. impersonality, without reference or connection to a particular person 5. careers based on merit

Early Behavioralism: Mayo

Elton Mayo started Hawthorne studies and began an investigation into whether workplace lighting level affected worker productivity and founded the Hawthorne effect, namely, that employees worked harder if they received added attention, if they thought that managers cared about their welfare and that supervisors paid special attention to them. Although his studies were faulted for being poorly designed and not having enough empirical data to support the conclusions they succeeded in drawing attention to the importance of "social man" and how managers using good human relations could improve worker productivity and led to the human relations movement in the 1950s & 60s.

Early Behaviorism: Munsterberg

Hugo Munsterberg is called "the father of industrial psychology". His ideas led to the field of industrial psychology, the study of human behavior in workplaces which is still taught in colleges today. suggested psychologists could contribute to industry in three ways: -Study jobs and determine which people are best suited to specific jobs. -Identify the psychological conditions under which employees do their best work. -Devise management strategies to influence employees to follow management's interests.

Gary Hamel: Management Ideas Are Not Fixed, They're a Process

Important because contingency viewpoint would seem to be the most practical of the viewpoints because it addresses problems on a case-by-case basis and varies the solution accordingly. "Overtime every great invention, management included, travel a road that leads from birth to maturity, and occasionally to senescence" Management is a process, and then make improvements and innovation ongoing and systematic. Hamel believes that the answer can be found by identifying core beliefs that people have about the organization, especially those that detract form the pursuit of management innovation. He suggests that these beliefs can be rooted out by repeatedly asking the right questions: -Is this a belief worth challenging? -Is this belief universally valid? -How does this belief serve the interests of its adherents? -Have our choices and assumptions conspired to make this belief self-fulfilling?

The Four Parts of a System

Inputs: are the people, money, information, equipment, and materials required to produce and organization's goods or services. Whatever goes into a system is an input. Transformational Processes: Are the organization's capabilities in management, internal processes, and technology that are applied to converting inputs into outputs and is the main activity of the organization. Outputs: ar the products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization. Whatever comes out of the system is an output. Feedback: is information about the reaction of the environment to the outputs that affects the inputs. Are the customers buying or not buying the product? -Open system: continually interacts with its environment. -Closed system: has little interaction with its environment; that is, it receives very little feedback from the outside. (classical management viewpoint) -Complexity theory (the ultimate open system): the study of how order and pattern arise from very complicated, apparently chaotic systems. Recognizes that all complex systems are networks of many interdependent parts that interact with each other according to certain simple rules. Used in strategic management and organizational studies, the discipline seeks to understand how organizations, considered as relatively simple and partly connected structures, adapt to their environments. Important because closed systems didn't have sufficient feedback and open systems stress multiple feedback from both inside and outside the organization, resulting in a continuous learning process to try to correct old mistakes and avoid new ones.

Early Behavioralism: Follett

Mary Parker Follett is recognized as "one of the most important women America has yet produced in the fields of civics and sociology." She believed that organizations should become more democratic, with managers and employees working cooperatively.She anticipated some of today's concepts of "self-managed teams", "worker empowerment", and "interdepartmental teams"-- that is members of different departments working together on joint projects.The following ideas were among her most important: -Organizations should be operated as "communities," with managers and subordinates working together in harmony. -Integration, Conflicts should be resolved by having managers and workers talk over differences and find solutions that would satisfy both parties -The work process should be under the control of workers with the relevant knowledge, rather than of managers, who should act as facilitators.

Evidence-Based Management: Facing Hard Facts, Rejecting Nonsense

Means translating principles based on evidence into organizational practice, bringing rationality to the decision-making process. Jeffrey Pfeffer and Robert Sutton said that evidence-based management is based on the belief that "facing the hard facts about what works and what doesn't, understanding the dangerous half-truths that constitute so much conventional wisdom about management, and rejecting the total nonsense that too often passes for sound advice will help organizations perform better."

Creating Modern Management: The Handbook of Peter Drucker

Peter Drucker is the creator and inventor of modern management. 1954 he published his famous text "The Practice of Management", in which he proposed that management was one of the major social innovations of the 20th century and that it should be treated as a profession, like medicine or law. Workers should be treated as assets, that the corporation could be considered a human community, that there is "no business without a customer", that institutionalized management practices were preferable to charismatic cult leaders.

The Human Relations Movement

Proposes that better human relations could increase worker productivity.Underlying notion of both Maslow's and McGregor's theories is the notion that more job satisfaction leads to greater worker performance. Abraham Maslow claimed that although some needs must be satisfied before others and founded the hierarchy of human needs: -physiological -safety -love -esteem -self-actualizations Douglas McGregor came to realize that it was not enough for managers to try to be liked; they also needed to be aware of their attitudes toward employees in either "X" or "Y". -Theory X represents a pessimistic, negative view of workers. In this view, workers are considered to be irresponsible, to be resistant to change, to lack ambition, to hate work, and to want to be led rather than to lead. -Theory Y represents the outlook of human relations proponents, an optimistic and positive view of workers. Workers are considered to be capable of accepting responsibility, self-direction, and self-control and of being imaginative and creative. These perspectives help managers understand how their beliefs affect their behavior. Theory X managers are more likely to micromanage, which leads to employee dissatisfaction, because they believe employees are inherently lazy.

Quality Control & Quality Assurance

Quality: refers to the total ability of a product or service to meet customer needs. On of the most important way of adding value to products and services, distinguishing them from those of competitors. Quality Control: defined as the strategy for minimizing errors by managing each stage of production. Developed by Walter Stewart, who used statistical sampling to locate errors by testing just some (rather than all) of the items in a particular production run. Quality Assurance: Developed in the 1960's focuses on the performance of workers, urging employees to strive for "zero defects". Has been less successful because often employees have no control over the design of the work process.

Quantitative Viewpoints

Quantitative management: the application to management of quantitative techniques, such as statistics and computer simulations. Two branches of quantitative management are management science and operations management.

Behavioral Science Approach

Relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers. Include psychology, sociology, anthropology, and economics.

Scientific Management

Scientific Management: emphasized the scientific study of work methods to improve productivity of individual workers. Soldiering: deliberately working at less than full capacity. Frederick Taylor is the father of scientific management. Based his system on motion studies in which he broke down each worker's job into basic physical motions and then trained workers to use the methods of their best-performing coworkers. He also suggested that employers institute a differential rate system, in which more efficient workers earned higher wages. Believed that manager could eliminate soldiering by applying for principles of science: 1. Evaluate a task by scientifically studying each part of the task (not use old rule-of-thumb methods). 2. Carefully select workers with the right abilities for the task. 3. Give workers the training and incentives to do the task with the proper work methods. 4. Use scientific principles to plan the work methods and ease the way for workers to do their jobs. Frank & Lillian Gilbreth expanded on Taylor's motion by using cameras to film workers at work in order to isolate the parts of a job.

TQM, What it is?

The total quality management viewpoint emphasizes infusing concepts of quality throughout the total organizations in a way that will deliver quality products and services to customers. A comprehensive approach-led by top management and supported throughout the organization-dedicated to continuous quality improvement, training, and customer satisfaction. 4 components include: -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.

Total Quality Management: Creating an Organization Dedicated to Continuous Improvement

W. Edwards Deming believed that quality stemmed from "constancy of purpose"- steady focus on an organization's mission-along with statistical measurement and reduction of variations in production processes. He also thought that managers should stress teamwork, be helpful rather than simply give orders, and make employees feel comfortable about asking questions. Joseph M. Juran defined quality as "fitness for use." by this he meant that a product or service should satisfy a customer's real needs. Thus, the best way to focus a company's efforts, Juran suggested, was to concentrate on the real needs of customers.

Systems Viewpoint

a system is a set of interrelated parts that operate together to achieve a common purpose. systems viewpoint regards the organization as a system of interrelated parts. By using this one can look at your organization both as (1.) a collection of subsystems (parts making up the whole system) and (2.) a part of the larger environment.

Classical Viewpoint

emphasizes finding ways to manage work more efficiently, had two branches-scientific & administrative-each of which is identified with particular pioneering theorists. In general, classical management assumes that people are rational

Contingency Viewpoint

emphasizes that a manager's approach should vary according to-that is, be contingent on-the individual and environmental situation

Behavioral Viewpoint

emphasizes the importance of understanding human behavior and of motivating employees toward achievement. Developed over three phases -Early Behaviorism -Human Relations Movement -Behavioral Science

Management Science

instead focuses on using mathematics to aid in problem solving and decision making and is sometimes called operations research. Not the same as Taylor's scientific management and Stress the use of rational, science-based techniques and mathematical models to improve decision making and strategic planning Management science is a forerunner to analytics and Big Data.