Chapter 2 - Management Theory

Charles Clinton Spaulding

"father of African-American Management" eight "fundamental necessities" of management 1. need for authority 2. division of labor 3. adequate capital 4. proper budgeting 5. cooperation and teamwork

the quality-management viewpoint (contemporary perspective)

1. quality control 2. quality assurance 3. total quality management

3 contemporary Perspective of Management

1. systems 2. contingency 3. quality-management

3 roles managers play to build a learning organization

1. you can build a commitment to learning 2. you can work to generate ideas with impact 3. you can work to generalize ideas with impact

Frederick W. Taylor

Father of scientific management published "the principle of scientific management" in 1911.

the rise of this new focus on people

For young entry-level workers get more choices about the kind of work environment in which you can work.

Henri Fayol

French engineer and industrialist first to identify the major functions of management - planning, organizing, leading, and controlling

Max Weber

German sociologist that regarded the development of rational social orders as humanity's greatest achievement. Saw bureaucratization (the process whereby labor is divided into an organized community and individuals acquire a sense of personal identity by finding roles for themselves in large systems) as the driving force in modern society.

Classical Viewpoint (1911-1947)(Historical perspective)

emphasized finding ways to manage work more efficiently. assumed that people were rational. Two approaches: - scientific management - administrative management

theory x

suggests that workers are resistant and unwilling and need to be monitored and controlled in order to achieve anything.

Hawthorne effect

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.

Two principal theoretical perspectives

the historical the contemporary

synergy

the idea that two or more forces combined create an effect that is greater than the sum of their individual effects

feedback

the information about the reaction of the environment to the outputs that affects the inputs

transformational processes

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

inputs

the people, money, information, equipment, 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

Quantitative Viewpoint (1940s-1950s) (Historical perspective)

Applies quantitative techniques to management Management Science: Focuses on using mathematics to aid in problem solving and decision making. Operations management: Focuses on managing the production and delivery of an organization's products or services more effectively.

Operations management

- plays an important role in managing the supply chain - governs managers' decisions about how to increase productivity and efficiency - assists managers with decisions regarding how to achieve the highest quality goods and services

company's vision and mission statement

-these statements tell you why the company exists -these statements tell you what the company wants to achieve over time -you will be a better fit for a company if you support their mission and vision statements

issues with Classical Viewpoint

-views humans as cogs in a machine -is overly mechanistic -fails to account for the importance of human needs

5 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 interference or connection to a particular person 5. Careers based on merit

core beliefs that people have about the organizations

1. is this a belief worth challenging? 2. is this a belief universally valid? 3. how does this belief serve the interests of its adherents? 4. have our choices and assumptions conspired to this belief self-fulfilling?

4 principles of scientific management

1. Evaluate a task by scientifically studying each part of the task, establishing realistic performance goals for a job. 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

the four parts of a system

1. Inputs 2. Transformational processes 3. Outputs 4. Feedback

4 components of TQM

1. Make continuous improvement a priority 2. Get every employee involved 3. Listen to and learn from customers and employees 4. Use accurate standards to identify and eliminate problems

Taylor's principles of scientific management

1. Scientifically study each part of the task 2. Carefully select workers with the right abilities 3. Give workers the training and incentives to do the task properly 4. Use scientific principles to plan the work methods

*Peter Drucker's* five tasks of management:

1. Sets objectives 2. Organises 3. Motivates and communicates 4. Measures 5. Develops people

7 things to learn about a company before showing up to a job interview

1. The company's mission and vision statement 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 7. comments from previous workers or employers

six practical reasons for studying theoretical perspectives

1. Understanding of the present: understanding what is happening and why. 2. Guide to action: help make predictions to develop a set of principles. 3. Source of new ideas: may be useful to you when you come up against new situations. 4. Clues to meaning of your managers' decisions: understanding your firm's focus and where your manager is "coming from" 5. Clues to meaning of outside events: understand events outside of organization 6. producing positive results: help understand why certain management practices have been successful for many firms.

3 Historical Perspective of Management

1. classical (1911-1947): 2. behavioral (1913-1950s) 3. quantitative (1940s-1950s)

3 parts of a learning organization

1. creating and acquiring knowledge 2. transferring knowledge 3. modifying behavior

ISO 9000

A company would rely on ISO 9000 to reduce manufacturing flaws

Theory X and Theory Y

A motivation theory that suggests that management attitudes toward workers fall into two opposing categories based on management assumptions about worker capabilities and values.

DMAIC

A six-sigma process: define, measure, analyze, improve, and control.

DFSS

Design for Six Sigma - to create new products or processes

"the practice of management" Peter Drucker (1954)

Drucker purposed the important idea that management was one of the major social innovations of the 20th century and should be treated as a profession, like medicine or law -That workers should be treated as assets -that the corporation could be considered a human community -that there is "no business without customer" -That institutionalized management practices are preferable to charismatic cult leaders

Hawthorn Studies

Elton Mayo (1880-1948) -early behaviorism - studies the effects of lighting levels, financial incentives (weren't the most important motivational factor) and rest pauses on employee productivity - worker's feelings and attitudes affected their work - group norms and behavior play a critical role in work behavior

Frank and Lillian Gilbreth

Employed motion study to simplify work and improve productivity. "CHeaper by the Dozen"

Getting hired at a people-focused organization

Ex: REI, the maker of outdoor and camping gear "we're looking for passionate and knowledgeable employees who want to work with purpose and a shared belief that a life outdoors is a life well lived. We hire people who intentionally direct their skills and experience toward a greater good. People who are already living by our values - authenticity, integrity, quality, respect, balance and service."

Two Overarching Perspectives about Management

Historical perspective (1911-1950s) Contemporary perspective (1960s-present)

Abraham Maslow's Hierarchy of Needs

Maslow's pyramid of human needs; must satisfy levels below before reaching to next; can go up and down pyramid stages the study of what motivates people to perform -physiological -safety -love -esteem -self actualization

Millennial Generation Expert

Some consulting companies focus on helping their clients nurture younger workers by designating this expert.

Taylorism benefits

Taylor believed that increasing production would benefit both labor and management bu increasing profits to the point where they no longer had to quarrel over them. if used correctly, principles of scientific management can enhance productivity, and innovations like motion studies and differential pay are still used today.

Quantitative Management - branches

The application to management of quantitative techniques, such as statistics or computer simulations. 2 branches management science and operations management

theory y

The assumption that employees like work, are creative, seek responsibility, and can exercise self-direction. A more benevolent and optimistic view of workers, and it has lately given rise to a real-world phenomenon known as the people focused organization.

Zappos Holacracy

The company eliminated job titles and organizational hierarchy, replacing them with democratic assemblies called "circles" in which it's 1,500 employees proposed their own job descriptions, ratified the roles of others and decided what projects the group should undertake. CEO Tony Hsieh "enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do."

Peter Drucker

The creator and inventor of modern management Wrote "The Practice of Management" (1954) An Australian trained in economics and international law.

Behavioral Sciences Approach

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

Why the Classical Viewpoint is Important?

The essence of the classical viewpoint was that work activity was amenable to a rational approach, that through the application of scientific methods, time and motion studies, and job specialization it was possible to boost productivity.

Taylorism resistance

Workers feared it would lead to lost jobs except for the highly productive few.

Total Quality Management (TQM)

a comprehensive approach - led by top management and supported throughout the organization - dedicated to continuous quality improvement, training, and customer satisfaction Holds the value that all employees, regardless of their background, need to feel welcomed, to be open to different approaches, and to come together to execute the best ideas.

Therblig

a made-up word coined by Frank Gilbreth, "Gilbreth" spelled backward, with the "t" and the "h" reversed. It refers to 1 of 17 basic motions workers can perform. To help workers eliminated unnecessary motions and reduce their fatigue.

Bureaucracy

a rational and efficient ideal organization based on the principle of logic

learning organization

an organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge

people-focused organizations

are guided by the theory Y view that people are essentially good, trustworthy, and productive, and that they flourish when they are empowered to act independently in an atmosphere that respects their diversity and values their well-being. -The key for managers is to see the company's positive internal culture as a competitive advantage

Motion Studies

breaking each task or job into its separate motions and then eliminating those that are unnecessary or repetitive

Gary Hamel

co-founder of the management Innovation Lab and ranked by the Wall Street Journal in 2008 in 2008 as the most influential business thinker. believes that much of management theory is dated and doesn't fit the current realities of organizational life management should be viewed as a process to which ongoing improvements and innovation can be made systematically. "every great invention, management includes, travel the road that leads from birth to maturity, and occasionally to senescence."

Administrative management approach (Classical Viewpoint)

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

open system

continually interacts with its environment has the potential of creating synergy

Behavioral Viewpoint (1913 - 1950s) (Historical perspective)

emphasized the importance of understanding human behavior and of motivating employees toward achievement 3 approaches -Early behaviorists - Human relations movement: Proposed better human relations could increase workers productivity - Behavioral science approach: Relies on scientific research for developing theory to provide practical management tools.

the contingency viewpoint (contemporary perspective)

emphasizes that a manager's approach should vary according to the individual and the environmental situation asks the question, "What method is the best to use under these particular circumstances?"

Hugo Munsterberg

father of industrial psychology 1. study jobs and determine which people are best suited to specific jobs 2. identify the psychological conditions under which employees do their best work 3. devise management strategies to influence employees to follow management's interests

quality assurance

focuses on the performance of workers, urging employees to strive for "zero defects"

closed system

has little interaction with its environment

differential rate system

more efficient workers earned higher rates of pay

The management approach of Spaulding

one of the first to recognize that enriching the lives of organizational and community family was just as important as a company making a profit.

subsystems

parts making up the whole system

merit pay

pay awarded to employees on the basis of the relative value of their contributions to the organization

scientific management approach (Classical Viewpoint)

pioneered by Frederick W. Taylor and Frank and Lillian Gilbreth, emphasized the scientific study work methods to improve the productivity of individual workers. -emerged in the early 20th century when companies wished to increase worker productivity to counteract labor shortages.

Human Relations Movement (Maslow and McGregor)

proposed that better human relations could increase worker productivity

Studying management theory

provides and understanding of the present, a guide to action, a source of new ideas, clues to the meaning of your managers' decisions, and clues to the meaning of outside events.

quality

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

the systems viewpoint (contemporary perspective)

regards the organization as a system of interrelated parts that operate together to achieve a common purpose look at your organization as: 1) a collection of subsystems 2) a part of a larger environment

The Six Sigma approach

relies on statistical analysis to help improve manufacturing processes.

Mary Parker Follett

social worker and social philosopher Mary Parker Follett's concept of integration: 1. Organizations should be operated as "communities" 2. Conflicts should be resolved by having managers and workers talk over differences and find solutions that would satisfy both parties 3. The work process should be under control of workers with relevant knowledge

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

evidence-based management

translating principles based on best evidence into organizational practice, bringing rationality to the decision-making process encourages managers to make facts and logic the foundation of their approach to decision-making. - Drucker's rational approach. - the basing of managerial decisions on the best available scientific evidence.