Chapter 2

Scientific Management

defined by Frederick W. Taylor the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency

Scientific Management Problems

-workers found that as performance increased, managers required they do more work for same pay -specialized jobs became repetitive and workers became dissatisfied

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

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

Operations Management

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

Two of the most influential early views regarding the creation of efficient systems of organizational administration were developed in Europe:

1. Max Weber, a German sociology professor 2. Henri Fayol, a French manager

The Evolution of Management Theory

1. Scientific Management Theory 2. Administrative Management Theory 3. Behavioral Mangagement Theory 4. Management Science Theory 5. Organizational Environment Theory

Espirit de corps

shared feelings of comradeship, enthusiasm, or devotion to a common cause among members of a group comradeship, shared enthusiasm foster devotion to the common cause (organization)

Rules, SOPs, and norms provide behavioral guidelines that increase the performance of the bureaucratic system because

they specify the best ways to accomplish organizational tasks

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" the average worker is lazy, dislikes work, and will try to do as little as possible. workers have little ambition and wish to avoid responsibility. to keep workers performance at a high level, managers should closely supervise workers managers should create strict work rules and implement a well-defined system of rewards and punishments to control employees

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" employees are not inherently lazy. given the chance, employees will do what is good for the organization. the characteristics of the work setting determine whether workers consider the source of work satisfying or as punishment. to allow employees to work in the organization's interest, managers must create a work setting that provides opportunities for workers to exercise initiative and self-direction managers should decentralize authority to employees and make sure employees have the resources necessary to achieve organizational goals. their role is not to control employees but to provide support and advice, make sure they have the needed resources to perform jobs, evaluate them on their ability to help organization meet its goals

Adam Smith (18th century economist during the Industrial Revolution) observed that firms manufactured pins in different ways:

"craft-style production" each worker did all of the 18 steps involved in making a pin "specialized production" each worker specialized in one or a few steps

Theory X and Y raise questions about how to manage and design organizations :

-are some people naturally Theory X and some are Y? -does your management style influence whether subordinates at as if they are Theory X/Y? -does the organization's design influence whether subordinates act as if they are Theory X/Y?

MPF continued

-authority and decisions should follow knowledge, not level of management -managers should behave as coaches and facilitators, not supervisors -view organizations as horizontally, not vertically. "cross-functioning" members of different departments working together in cross-departmental teams to accomplish projects -horizontal view of power and authority: power is fluid and should flow to the person who can best help the organization achieve its goals

Scientific Management worked but got a bad name because:

-changes to improve efficiency had broader ramifications -managers gained control of work, workers lost control -benefits went to the organization, not workers -workers came to distrust management and reacted (games, sit-downs, unionization)

Three Stages of Open-Systems View

1. input stage: organization obtains inputs from its environment 2. conversion stage: organization transforms inputs into outputs of finished goods and services 3. output stage: organization releases finished goods/services to its external environment, where customers purchase & use them to satisfy needs

Four Principles Summary

1. optimize: find one best method for a task by detailed study and experimentation 2. standardize: codify new methods and establish standard procedures 3. staff: elect workers who skills match that of the task 4. reward: identify and pay premium for high performance levels

Fayol's Principles of Management

14 principles he believed essential to increase efficiency of the management process

How does Behavioral Management compare to existing models?

Behavioral Management: people as humans Scientific Management: human machine Bureaucracy: rule-following robot

Other Contingency Examples

Organizational Size: larger size requires more formal procedures and more layers of management. Complexity of product line: Organizations with many different products should be organized into divisions (lighting, aircraft engines, etc.) rather than by functions (finance, marketing, etc.). Environmental (marketplace) turbulence: Organizations facing rapidly changing markets and technologies have to be flexible and responsive, so they should be less bureaucratic

Line of Authority

a clear chain of command from top to bottom of the firm

The Theory of Bureaucracy (Weber)

a formal system of organization and administration designed to ensure efficiency and effectiveness

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

Unity of Command

a reporting relationship in which an employee receives orders from, and reports to, only one superior employees should only have one boss

Rules and SOP example

a rule might state that at the end of the workday employees are to leave machines in good order, and a set of SOPs would specify exactly how they should do so

Closed System

a system that is self-contained and thus not affected by changes occurring in the external environment. likely to experience entropy because they fail to acquire inputs *most organizations are open systems

Open-Systems View

a system that takes in resources from its external environment and converts them into goods and services that are then sent back to that environment for purchase by customers

Division of Labor

allows for job specialization jobs can have too much specialization leading to poor quality and worker dissatisfaction

Management Science Theory

an approach to management that uses rigorous quantitative techniques to help managers make maximum use of organizational resources

Remuneration of Personnel

an equitable uniform payment system that motivates contributions to organizational success

Systems theorists like to argue that the whole is greater than the sum of its parts; meaning that

an organization performs at a higher level when its departments work together rather than separately

Mechanistic Structure

an organizational structure in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised this is used when the environment surrounding an organization is stable typically rests on Theory X assumptions

Organic Structure

an organizational structure in which authority is decentralized to middle and first-line managers and tasks and roles are left ambiguous to encourage employees to cooperate and respond quickly to the unexpected this is used when the environment surrounding an organization is changing rapidly typically rests on Theory Y assumptions

Principle #4 of Bureaucratic Systems

authority can be exercised effectively in an organization when positions are arranged hierarchically, so employees know whom to report to and who reports to them managers must create an organizational hierarchy of authority that makes it clear who reports to whom and to whom mangers and workers should go to if conflicts/problems arise

Authority and Responsibility

both formal and informal authority resulting from special expertise

Taylor's Principle #3:

carefully select workers who posses skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures Taylor believed workers had to understand the tasks that were required and be thoroughly trained to perform the tasks at the required level

Taylor's Principle #2:

codify the new methods of performing tasks into written rules and standard operating procedures once the best method of performing the task was determined, Taylor said it should be recorded so this procedure could be taught to all workers performing the same task = further standardized and simplified jobs, increasing efficiency

Taylor's Principle #4:

establish a fair or acceptable level of performance for a task, and then develop a pay system that rewards performance above the acceptable level Taylor said that workers benefit from any gains in performance = he advocated they should be paid a bonus and receive a percentage of the performance gains achieved through the more efficient work process

Managing people as _____, instead of as _____

humans; resources

Principle #1 of Bureaucratic Systems

in a bureaucracy, a manager's formal authority derives from the position he or she holds in the organization

Principle #2 of Bureaucratic Systems

in a bureaucracy, people should occupy positions because of their performance, not because of their social standing or personal contacts **this means people get jobs based off of their job-related skills, influence hiring, and promotional decisions instead of social networking

The Hawthorne Studies and Human Relations

investigates how characteristics of the work setting - specifically the level of lighting or illumination - affect worker performance produced unexpected results: productivity increased when lighting changed in general, regardless of its increase or decrease received help with further research from Elton Mayo

Hawthorne Effect

it was found that many other factors also influence worker behavior. HE: the finding that a managers behavior or leadership approach can affect workers' level of performance

Stability of Tenure of Personnel

long-term employment is important for the development of skills that improve the organization's performance

Principle #5 of Bureaucratic Systems

managers must create a well-defined system of rules, standard operating procedures (SOPs) and norms so they can effectively control behavior within an organization

Specialized Production

much more efficient than craft-style production *efficiency driven by Job Specialization

Discipline

obedience, energy, application, and other outward marks of respect for a superior's authority obedient, applied, respectful employees are necessary for the organization to function

Synergy

performance gains that result when individuals and departments coordinate their actions

Centralization

the concentration of authority at the top of the managerial hierarchy the degree to which authority rests at the top of the organization

Douglas McGregor

proposed two sets of assumptions about how work attitudes and behaviors not only dominate the way managers think but also affect how they behave in organizations (Theory X and Theory Y)

The Bank Wiring Room Experiments

researchers Elton Mayo and F.J. Roethlisberger discovered that workers, as a group, had deliberately adopted a norm of output restriction to protect their jobs those who performed above the norm = rate busters and below the norm = chiselers the experiment concluded that both types of workers threatened the group as a whole, rate busters threatened group members because they revealed how fast work could be done, chiselers were looked down on because they were not doing their share of the work

Standard Operating Procedures

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

Taylor's Principle #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 Taylor studied the different ways workers went about performing their tasks, then experimented to increase specialization usually this meant simplifying jobs and having each worker perform fewer, more routine tasks

Initiative

the ability to act on one's own without direction from a superior the fostering of creativity and innovation by encouraging employees to act on their own

When managers rely too much on rules to solve problems and not enough on their own skills and judgment,

the behavior becomes inflexible and decision making slow and inefficient. must use bureaucratic principles to benefit, not harm aka no "bureaucratic red tape"

Principle #3 of Bureaucratic Systems

the extent of each position's formal authority and responsibilities, and its relationship to other positions in an organization, should be clearly specified when the tasks and authority associated with various positions in the organization are clearly specified, managers and workers know what is expected of them & what to expect from each other -- employees can be held strictly accountable

Contingency Theory

the idea that the organizational structures and control systems managers choose depend on (are contingent on) characteristics of the external environment in which the organization operates crucial message of this theory: there is no one best way to organize how managers design the organizational hierarchy, choose a control system, and lead and motivate their employees is contingent on the characteristics of the organizational environment

Subordination of Individual Interests to the Common Interest

the interest of the organization takes precedence over that of the individual employee

Equity

the justice, impartiality, and fairness to which all organizational members are entitled the provision of justice and the fair and impartial treatment of all employees

Order

the methodical arrangement of positions to provide the organization with the greatest benefit and to provide employees with career opportunities the arrangement of employees where they will be of the most value to the organization and to provide career opportunities

Authority

the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources

Job Specialization

the process by which a division of labor occurs as different workers specialize in different tasks over time

Authority gives managers

the right to direct and control their subordinates behavior to achieve organizational goals

Organizational Environment Theory

the set of forces and conditions that operate beyond an organization's boundaries but affect a manager's ability to acquire and utilize resources resources in the organizational environment include the raw materials and skilled people that an organization requires to produce goods/services and provide the organization with financial resources

Unity of Direction

the singleness of purpose that makes possible the creation of one plan of action to guide managers and workers as they use organizational resources a single plan of action to guide the organization

Behavioral Management Theory

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

Administrative Management Theory

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

Informal Organization

the system of behavioral rules and norms that emerge in a group the Hawthorne studies demonstrated the importance of understanding how the feelings, thoughts, and behavior of work group members and managers affect performance

Organizational Structure

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

Entropy

the tendency of a closed system to lose its ability to control itself and thus to dissolve and disintegrate

Mary Parker Follett

thought that Taylor was ignoring the human side of the organization. she pointed out that management often overlooks the multitude of ways in which employees can contribute to the organization when managers allow them to participate and exercise initiative in their everyday work lives argued that because workers know the the most about their jobs, they should be involved in job analysis and managers should allow them to participate in the work development process

The Gilbreths

two prominent followers of Taylor, who refined his analysis of work movements and made many contributions to time-and-motion study also studied fatigue - studied how physical characteristics of the workplace contribute to job stress that often leads to fatigue and thus poor performance

Norms

unwritten, informal codes of conduct that prescribe people should act in particular situations and are considered important by most members of a group or organization ex: in a restaurant, a norm may be that waiters help each other out if they have time

Quantitative Management

uses mathematical techniques to help managers decide, for example, how much inventory to hold at different times of the year, where to locate a new factory, and who best to invest an organization's financial capital