History of Management
Contingency Theory
"There is no one best way to organize" - The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates.
o Deficit principle
A satisfied need is not a motivator of behavior.
System
A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
Persuasion
Follet encouraged managers to use ¬¬________instead of coercion when working with subordinates, proposing that this leads to better decision making since it allows ideas from all levels of the organization to be heard and respected.
Communication, trust
Follet stressed the importance of ___________between members at different levels within the organization and between organizations themselves to build ______ and foster consensus around common goals
potentially positive force
Follett proposed that conflict should be seen as a _________within organizations since it can bring about creative solutions by allowing those involved to see each other's differences in perspective.
A. Hawthorne Studies B. Theory of Human Needs C. Theory X and Theory Y D. Personality and organization
Foundations in the behavioral or human resource approaches to management
Incentivizing Employees
Four Principles of Scientific Management - 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.
Time and Motion study
Four Principles of Scientific Management - 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.
Better Wages
Four Principles of Scientific Management - Taylor advocated for better wages for workers who performed difficult physical labor. He believed that paying good wages would encourage people to stay longer at their jobs, leading to less turnover and a more stable workforce—a concept that remains important today.
Task Specialization
Four Principles of Scientific Management - The principles he developed are still used today in many different industries. This principle - states that people should specialize in specific tasks and become experts, leading to increased productivity
• Henri Fayol
He believed that the practice of management was distinct from other organizational functions - Developed fourteen principles of management that applied to all organizational situations
o Power with / Shared power
concept challenges traditional views that emphasize a hierarchical model where power is centralized in individual leaders or managers. - Follett argued that true power should be decentralized and shared between individuals and teams to promote collaboration and democracy in decision making. - She found that when employees have more responsibility for their own decisions and actions, they are more likely to be committed to achieving organizational goals.
Fayol's 5 essential elements
provided companies with a framework for planning their future success. - elements are still used in many businesses worldwide to plan their operations for future success.
• Accountability - holding decision makers responsible for results. • Communication - encouraging dialogue between all levels of staff. • Delegation - delegating tasks to those who are best qualified. • Leadership -being able to inspire others. • Creativity -fostering innovation -
o Barnard proposed several principles that he believed should be applied when managing an organization:
• Self actualization needs • Esteem needs • Social needs • Safety needs • Physiological needs
o What are the Maslow Hierarchy of Human Needs?
Standard Operating Procedures (SOPs)
specific sets of written instructions about how to perform a certain aspect of a task
• Chester Barnard
suggested that managers must understand how an organization interacts with its environment and how its internal components interact to make successful decisions. - In terms of motivation, he argued that organizations could only function effectively if their members were motivated to cooperate. - he asserted that inspiration must come from within individuals and can not be created by external forces such as rewards or punishments.
• Mary Parker Follett
Recognized that organizations could be viewed from the perspective of individual and group behavior. - Believed that individual potential could only be released by group association. - main contribution was her concept of "power with," or shared power
• Routineness of task technology
Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or non routine technologies.
Mechanistic Structure Organic Structure
Types of Structure in Contingency Theory
• Robert Owen • Hugo Munsterberg • Mary Parker Follett • Chester Barnard
Who are the Early OB Advocates
Chris Argyis
Who proposed Personality and organization?
Abraham Maslow
Who proposed Theory of Human Needs?
o Taylor's Principles
focused on making work more efficient by breaking it down into smaller and simpler tasks performed quickly with maximum efficiency. He believed that if workers were given clear instructions and rewarded for their efforts, they would be more productive.
Rules
formal written instructions that specify actions to be taken under different circumstances to achieve specific goals
o Progression principle
A need becomes a motivator once the preceding lower level need is satisfied. - Both principles cease to operate at self actualization level.
Contingency Theory
AKA situational approach. - There is no one universally applicable set of management principles (rules) by which to manage organizations. - Organizations are individually different, face different situations (contingency variables), and require different ways of managing.
Quantitative Approach
Also called operations research or management science - Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems - Focuses on improving managerial decision making by applying: Statistics, optimization models, information models, and computer simulations
8. Queuing Models
Analyzing the behavior of customer waiting lines to determine optimal staffing policies. o Disneyland designing waiting lines and policies for rides at the amusement park. o United States Postal Service determining staffing levels and type of waiting line at different branch offices.
• Closed systems
Are not influenced by and do not interact with their environment (all system input and output is internal). - A self contained system that is not affected by changes in its external environment. - Likely to experience entropy and lose its ability to control itself
• Organization size
As size increases, so do the problems of coordination.
Mechanistic Structure
Authority is centralized at the top. - Emphasis is on strict discipline and order - Employees are closely monitored and managed. - Can be very efficient in a stable environment.
Organic Structure
Authority is decentralized throughout the organization. - Departments are encouraged to take a cross departmental or functional perspective - Works best when environment is unstable and rapidly changing
Productivity unexpectedly increased under imposed adverse working conditions. The effect of incentive plans was less than expected.
B. What is the Experimental findings of Hawthorne Studies?
o Adaptive Cycle
Barnard also posited that organizational success depends on an organization's ability to adapt to changing environmental conditions. - organizations must identify those elements of their environment which could potentially harm them and then implement strategies to mitigate these risks. - evaluating potential threats or opportunities within their environment.
• Closed systems • Open systems
Basic Types of Systems
Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.
C. What is the Research conclusion of Hawthorne Studies?
• Clear division of labor • Clear hierarchy of authority • Formal rules and procedures • Impersonality • Careers based on merit
Characteristics of bureaucratic organizations
Theory of adult personality
Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality.
• 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.
• Hugo Munsterberg
Created the field of industrial psychology—the scientific study of individuals at work to maximize their productivity and adjustment. - Psychology and Industrial Efficiency (1913)
7. Inventory Models
Determining how much of a product to order and when to place the order to minimize overall total costs. o Macy's making merchandising decisions for the season. o See's Candies producing goods for their own stores.
3. Integer Linear Programming Models
Determining integer quantities (such as people, machines, airplanes, etc.) that maximize profits. E.g. o American Airlines assigning planes, crews, and support personnel on a daily basis. o McDonald's assigning workers throughout the day.
C. Theory X and Theory Y
Douglas McGregor - this model became one of the most widely accepted models for understanding employee motivation and has significantly impacted modern management practices.
• Open systems
Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments. - 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.
A. Hawthorne Studies
Elton Mayo - A series of productivity experiments conducted at Western Electric from 1927 to 1932.
o Quantitative School
Emphasized mathematical approaches to management problems
o Theory Y
Employees are not inherently lazy. - 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.
Scalar chain / Line of Authority.
Fayol's 14 Principles of Management - A clear chain of command from top to bottom of the firm
Unity of direction.
Fayol's 14 Principles of Management - A single plan of action to guide the organization
Remuneration (of Personnel).
Fayol's 14 Principles of Management - An equitable uniform payment system that motivates contributes to organizational success
Esprit de corps.
Fayol's 14 Principles of Management - Comradeship, shared enthusiasm foster devotion to the common cause (organization).
Unity of command.
Fayol's 14 Principles of Management - Employees should have only one boss
Stability of tenure of personnel.
Fayol's 14 Principles of Management - Long term employment is important for the development of skills that improve the organization's performance
Discipline.
Fayol's 14 Principles of Management - Obedient, applied, respectful employees are necessary for the organization to function
Order.
Fayol's 14 Principles of Management - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities.
Centralization.
Fayol's 14 Principles of Management - The degree to which authority rests at the top of the organization
Initiative.
Fayol's 14 Principles of Management - The fostering of creativity and innovation by encouraging employees to act on their own
Subordination of individual interest to the interests of the organization.
Fayol's 14 Principles of Management - The interest of the organization takes precedence over that of the individual employee.
Equity.
Fayol's 14 Principles of Management - The provision of justice and the fair and impartial treatment of all employees
Division of work/labor
Fayol's 14 Principles of Management - allows for job specialization - jobs can have too much specialization leading to poor quality and worker dissatisfaction.
Authority (and Responsibility).
Fayol's 14 Principles of Management - both formal and informal authority resulting from special expertise
• Self actualization needs
Highest level: need for self fulfillment to grow and use abilities to fullest and most creative extent
• Use time and motion studies to increase productivity • Hire the best qualified employees • Design incentive systems based on output
How Do Today's Managers Use Scientific Management?
Coordination of the organization's parts is essential for proper functioning of the entire organization. Decisions and actions taken in one area of the organization will have an effect in other areas of the organization. Organizations are not self contained and, therefore, must adapt to changes in their external environment.
Implications of the Systems Approach
o Increasing task responsibility o Increasing task variety o Using participative decision making
In theory of adult personality, management practices should accommodate the mature personality by
• Individual differences
Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations.
6. Decision Models
Making decisions about the best course of action when the future is not known with certainty. o Fidelity Investments making mutual fund decisions given the uncertainty of the company performance, and the markets. o The International Olympic Committee making site decisions given uncertain weather patterns and changing international conditions.
1. Linear Programming Models 2. Integer Linear Programming Models 3. Network Models 4. Project Scheduling Models 5. Decision Models 6. Inventory Models 7. Queuing Models
Management Science Applications
o Regulation of equity - states that employees should be treated fairly in terms of pay, rewards, opportunities for advancement, etc. o The principle of participation- encourages managers to involve their employees in decision making processes. o The principle of job enlargement or enrichment- encourages managers to make jobs more interesting by adding a variety of increasing responsibilities McGregor also developed some other principles relating to human resource management
McGregor also developed some other principles relating to human resource management
• Physiological needs
Most basic of all human needs: need for biological maintenance, food, water and physical well being
• Esteem needs
Need for esteem in eyes of others. need for respect, prestige, recognition and self esteem, personal sense of competence, mastery
• Social needs
Need for love, affection, sense of belongingness in one's relationships with other people
• Safety needs
Need for security, protection, and stability in the events of day to day life
• Excessive paperwork or "red tape" • Slowness in handling problems • Rigidity in the face of shifting needs • Resistance to change • Employee apathy
Possible disadvantages of bureaucracy
• Chester Barnard
Saw organizations as social systems that require human interaction and cooperation. - Expressed his views on the "acceptance of authority" in his book The Functions of the Executive (1938). - argued that organizations are "social systems"
5. Project Scheduling Models
Scheduling of the various tasks that make up a project in order to minimize the time or cost it takes to complete the entire project.
• Robert Owen
Scottish businessman and reformer who advocated for better treatment of workers. - Claimed that a concern for employees was profitable for management and would relieve human misery.
o Theory X
The average employee is lazy, dislikes work, and will try to do as little as possible. - To ensure that employees work hard, managers should closely supervise employees. - Managers should create strict work rules and implement a well defined system of rewards and punishments to control employees
o Management Science
The study of complex systems of people, money, equipment, and procedures, with the goal of improving their effectiveness
Organizational Behavior (OB)
The study of the actions of people at work, people are the most important asset of an organization
Scientific Management
The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
• Frank and Lillian Gilbreth
They focused on increasing worker productivity through the reduction of wasted motion - They developed the microchronometer to time worker motions and optimize performance
2. Linear Programming Models
Using of scare resources to achieve maximum profits when there are constant returns to scale. E.g. o Steelcase scheduling monthly production desks, cabinets, and other office furniture to maximize profit by assigning workers and utilizing the steel, wood, and other resources that are available. o Texaco blending various grades of raw crudes to maximize profits while meeting production targets.
4. Network Models
Using specialized linear models to determine routes of shortest distance, connections that tie points together of minimum length or finding a maximum flow (through a series of pipes) E.g. o UPS scheduling deliveries in a fleet of trucks. o United Van Lines determining the least costly route between a pickup and delivery point.
• Forecasting, • Organizing and staffing • Directing • Coordinating • Controlling and budgeting
What are Fayol's 5 essential elements?
1. A manager's formal authority derives from the position he holds in the organization. 2. People should occupy positions because of their performance, not because of their social standing or personal contacts. 3. The extent of each position's formal authority and task responsibilities and it's relationship to other positions should be clearly specified. 4. Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them. 5. Managers must create a well defined system of rules, standard operating procedures, and norms so they can effectively control behavior.
What are Weber's Principles of Bureaucracy?
Forecasting, capital budgeting, portfolio analysis, capacity planning, scheduling, marketing, inventory management, project management, and production planning
What are the Applications of management science
1. Division of work/labor 2. Authority (and Responsibility). 3. Discipline. 4. Unity of command. 5. Unity of direction 6. Subordination of individual interest to the interests of the organization. 7. Remuneration (of Personnel). 8. Centralization. 9. Scalar chain / Line of Authority. 10. Order. 11. Equity. 12. Stability of tenure of personnel. 13. Initiative. 14. Esprit de corps
What are the Fayol's 14 Principles of Management?
1. Time and Motion study 1. Task Specialization 1. Incentivizing Employees 1. Better Wages
What are the Four Principles of Scientific Management
Classical Approach Quantitative Approach Behavioral Approach System Approach Contingency Approach
What are the Major Approaches to Management?
• Organization size • Routineness of task technology • Environmental uncertainty • Individual differences
What are the Popular Contingency Variables?
Inputs the acquisition of external resources to produce goods and services Conversion transforms the inputs into outputs of finished goods and services. Output the release of finished goods and services to its external environment.
What are the parts of an Open System?
Scientific management Administrative principles Bureaucratic Organization
What are the three subfields of Classical Approach?
It is useful to understand management theories of the past and present in order to gain an appreciation of the social, economic, and political contexts in which they were developed. History allows us to observe and understand how people and societies behaved in the past.
What is the Importance of Studying History of Management
• Environmental uncertainty
What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment.
Elton Mayo
argued that managers should treat employees with respect and understanding rather than view them as cogs in machines or tools for increasing efficiency. - he believed that employees should be motivated by more than just financial rewards and that their feelings and attitudes significantly impact performance. - he also emphasized communication between employers and employees to build trust and foster collaboration.
B. Administrative Management Theory
attempts to find a rational way to design an organization as a whole - The theory generally calls for a formalized administrative structure, a clear division of labor, and delegation of power and authority to administrators relevant to their areas of responsibilities. - helped create a standardized approach to managing organizations, while his workplace management techniques have helped improve labor relations between employers and employees worldwide.
Elton Mayo
he argued that group interaction could lead to greater productivity than individual efforts alone could achieve. - introduced a holistic approach to understanding workplace dynamics by simultaneously looking at physical conditions, labor processes, team structures, and organizational cultures. - His focus on understanding the many elements of an organization's functioning has been instrumental in creating successful management models across different industries today.
• Douglas McGregor
his work has provided important insights into how organizational cultures can be shaped through effective leadership styles. - His research demonstrated that leaders who adopted a Theory Y approach were often able to create an environment where employees felt valued and motivated. - In contrast, those who adopted a Theory X approach often started an environment where morale was low, and resistance was high.
Max Weber
main proponent of bureaucracy
Bureaucracy
model examined hierarchical power structures within organizations. - The core elements of this model included a hierarchal design with a transparent chain of command, rules, and regulations for work processes, specialization of labor based on expertise, and impersonal decision making rooted in rationality. - approach designs to develop an efficient system for large institutions with many employees and multiple departments or divisions.
o Operations management
techniques used to analyze any aspect of the organization's production system.
Norms
unwritten, informal codes of conduct that prescribe how people should act in particular situations
o Quantitative management
utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory.
Systems Theory
views an organization as a complex set of dynamically intertwined and interconnected elements, including inputs, processes, outputs, feedback loops, and the environment. Any change in one element causes changes in other elements.