Critical thinking Success Factors for Organization:

• It is the ability to diagnose situations and • Access to resources—primarily money and talent,
predict patterns of behaviors, which • Effective leaders,
result in better decision making. • Competent employees,
• A critical thinker can put aside
• Interested consumers or advocates
biases and view situations from different
perspectives to ultimately improve his or
FOUR MAIN CATEGORIES (Major Tasks)
her understanding of the world.
• Critical thinking is fast becoming one of • Planning ‐ process of setting goals for the future,
the most important skills that employers designing appropriate strategies, and deciding on
look for in 21st‐century managers. the actions and resources needed to achieve
success.
IMPORTANCE OF CRITICAL THINKING
• Organizing ‐ process of orchestrating people,
• A multitude of research shows that critical thinkers actions, resources, and decisions to achieve goals.
will enjoy more success in education, the • Leading ‐ process of effectively motivating and
workplace, and life in general because the more we communicating with people to achieve goals.
can critically think, the more we can handle difficult • Controlling ‐ process of monitoring activities,
situations and make the right decisions. measuring results and comparing them with goals,
• Critical thinking has been linked with creativity. In a and correcting performance when necessary.
2011 study focused on fluid reasoning (a concept
Management Both Art and Science
similar to critical thinking), people with higher levels
of fluid reasoning were more capable of producing • We often describe this people‐focused side of a
creative ideas. manager's duties as the “art of management.”
• In today's increasingly busy working environment, • We can think of these more technical activities as
critical thinking skills are essential in making logical, the “science of management.”
rational decisions. Critical thinking encourages us to
think before we act and saves us time from TRIPLE BOTTOM LINE
correcting mistakes made through hasty decision
making. • People
• In 2013, critical thinking skills topped the list as the • Planet
most desirable skills employers look for when • Profit
recruiting college graduates.
MANAGEMENT ROLES
METHODOLOGY
Henry Mintzberg, management researcher, has been
1. Observe (recognize the behavior) observing managers in their organizational environments

2. Interpret (understand the cause and effects of • Interpersonal roles, managers build relationships
behavior) with the people they work with and act as a public
symbol for the many people they represent.
3. Analyze (investigate the causes and effects of • Informational roles require managers to gather,
behavior) assess, and communicate information to individuals
and teams in support of the organization's values,
4. Infer (propose paths to change behavior)
mission, vision, and goals.
5. Evaluate (assess the consequences of changing • Decisional roles, managers are responsible for
behavior) making judgments and decisions based on available
information and analysis of the situation.
6. Explain (justify a change to behavior)
Sustaining: A Balanced Approach to Management
7. Meta‐think (consider the process used to propose
this behavior change). • Effective managers today understand threats and
approach every function in full consideration of the
Management consequences of their decisions on their
• the process of working with people and distributing organization, community, and environment. This
an organization's resources to achieve goals balanced approach to management is called
efficiently and effectively. sustaining, which means seeing, analyzing, and
designing systems to achieve long‐term
organizational, community, and environmental
health.
Types of Organizations • Strengths are the skills in which managers
demonstrate the greatest aptitude.
An organization is an entity formed and structured to
achieve goals. Positive Psychology

• Small organizations have fewer than 100 • Explores ways to help people recognize their
employees positive traits or strengths and nurture them to
• Mid‐size organizations between 100 and 500 their full potential.
• Large organizations more than 500 employees
The Historical Foundations of Management

• History is important. It helps us to understand

1. Start‐up company is a newly formed organization human nature and why people in the past behaved
with limited or no operational history. as they did; it increases our knowledge of business
2. Multinational corporation has operations in strategies and how they have evolved over years;
multiple countries, usually employs more than and it helps us learn about the mistakes of the past
10,000 people, and designs, develops, and sells so we can avoid repeating them.
products and services to customers all over the
world. Wealth of a Nation
3. Growth company is an organization that increases
• In 1776, prominent critical thinker Adam Smith
its annual revenue faster than its competitors.
(1723 –1790), a Scottish economist and
4. Nonprofit organizations are required by the
philosopher, published The Wealth of Nations,
Internal Revenue Service (IRS) to reinvest all profits
which argued that division of labor could increase
back into the organization, as opposed to
production by having workers specialize on a task.\
distributing that money to investors or employees.
5. Student organizations are groups formed to engage The Corporation
students further in the college experience through
academic, political, religious, sports, • The concept just described, known as “division of
environmental, and social action. labor,” gave self ‐employed and family ‐owned
businesses a model for expanding their enterprises
Types of Managers and creating more wealth.
• Corporations, a type of organization, are legal
• Top managers set the organization's direction and
entities formed and structured to achieve goals with
make decisions that affect everybody.
special protections for owners
• Middle managers report to upper management
and direct the work of first‐line managers; they are Bureaucratic Management: Max Weber
also responsible for divisions or departments.
• First‐line managers direct daily activities for • Weber defined the ideal management of an
producing goods and services. organization as a bureaucracy, a form of
organization marked by the division of labor,
Successful Management managerial hierarchy, rules and regulations, and
impersonality.
• Managers are expected to continuously seek ways
• Weber regarded bureaucracy as the ultimate state
to increase effectiveness and efficiency through
of organizational and managerial excellence,
other people and systems, and they are successful
defined by six model characteristics: division of
when they accomplish this objective.
labor, managerial hierarchy, formal selection, career
• Effectiveness is the level to which people or
orientation, formal rules and controls, and
organizations achieve agreed‐upon goals
impersonality.
• Efficiency means using the smallest amount of
resources to achieve the greatest output. Administrative Management

• Henri Fayol had created another theory of

management. In the 1860s, Fayol, a mining
engineer, observed the need for managers to gain
both responsibility and authority through a greater
set of skills than those that simply increased
production output and quality.
 • Fayol's ideas became the foundation for • The last seven principles of Emerson's management
administrative theory, which identifies the manifesto dealt with the science of management,
functions of management in an organization and with easily measurable processes and methods
the principles needed to make sense of a complex 1. Were keeping accurate, timely, and permanent
set of organizational tasks. records.
• Fayol's views incorporated some of Weber's 2. Planning activities.
bureaucracy theory, where legitimate authority was 3. Standards and timing for tasks.
inherent in a position and organizational hierarchy 4. “Standardized conditions”.
attempted to create order —a rules ‐based 5. “Standardized operations”.
approach that disregarded the personal needs of 6. Written documentation for processes.
individual workers. 7. Rewards for achieving ideal efficiency.

The Quantitative Approach Motion Studies

• Charles Babbage (1792–1871), inventor of the first • Frank B. Gilbreth set forth to apply motion studies,
mechanical computer, was also interested in where he used a motion‐picture camera to capture
questions of management, particularly the the step‐by‐step movements that were taken to
inefficiencies that he observed in the modern complete a task. This method was employed
factory. wherever possible and applicable—in such widely
• Workers began to test management by performing varying areas as surgery, nursing, golf, and baseball
as slowly as possible while giving their supervisors
the impression that they were working fast. This is Scientific Management and the Mind
known as soldiering.
• Lillian M. Gilbreth
• Two types of soldiering were observed: ➢ Traditional management depended on
o natural soldiering and systemic soldiering.
centralized authority.
➢ Transitory represented the confused shift
Scientific Management: Frederick W. Taylor
between central authority and manager‐
• As a manager at the Midvale Steel Company, critical employee cooperation.
thinker Frederick W. Taylor (1856–1915) observed ➢ Scientific management relied on positive
soldiering among his workers. manager‐employee relationships, which could
• Scientific management is the focus on analyzing be maximized by refining methods for
and synthesizing the flow of work to maximize employee selection, incentives, and welfare.
productivity.
Visualizing Management
Task‐management system
• Henry Gantt
• A combination of setting performance standards, ➢ became a management consultant in 1901. His
selecting the best worker for the job, and building methods and advice were not always embraced
good relations between managers and employees. by his clients.
• Frederick Taylor defined management as “knowing ➢ Gantt hired new employees and quickly taught
exactly what you want men to do, and then seeing them their tasks and “habits of industry,” which
that they do it in the best and cheapest way.” we now refer to as training. These “habits” of
industriousness and cooperation were
Harrington Emerson behaviors that could be observed,
documented, standardized, and idealized.
• Harrington Emerson (1853 –1931) became the first
“efficiency engineer,” a title that he created for Quality Movement
himself.
• First, he created a chief of staff position that would • The American Society for Quality suggests that
oversee the activities of four subdivisions: quality has two meanings:
1. Employee relations 1. The characteristics of a product or service that
2. Machines, tools, and equipment bear on its ability to satisfy stated or implied needs;
3. Materials, including purchasing, handling, and 2. A product or service free of deficiencies.
inventory • To accomplish this, the company invented a process
4. Records and accounting. for manufacturing called the assembly line, where
 parts are added sequentially to construct a product Motivation: Douglas McGregor
faster.
• Theory X is a negative view of the worker stating
Hawthorne Studies that people do not like to work; therefore, workers
need to be coerced, told what to do, and
• The Hawthorne studies, conducted between 1924 intimidated. Otherwise, left on their own, workers
and 1932, seemingly verified that employees were will soldier, or, worse yet, do nothing at all.
motivated by many factors, not just money, and that • Theory Y is a positive view of the worker stating that
group dynamics had an impact on employee morale people enjoy the mental and physical purpose that
and performance. work provides
Illumination Study (1924 –1927) Behavioral Management

• the Illumination Study had the simple objective of • The behavioral management perspective relies on
observing the effect of lighting on worker understanding individual behaviors, decisions, and
productivity. attitudes to motivate employees
• the Illumination Study had the simple objective of
observing the effect of lighting on worker The Balanced Approach
productivity
• Contingency (or situational) theory states that
Relay‐Assembly Test Room Study (1927–1932) different organizations, situations, and contexts
require different approaches.
• The research team, led by Homer Hibarger and • Contingency theory laid the groundwork for the
Charles E. Snow, assessed the effects of work balanced approach that is emerging in management
conditions on employee productivity, including practice today.
breaks, meals, and length of workday.
• The research team identified five major reasons for Cooperation: Chester I. Barnard
increased performance, “in order of importance:
1. Working in a small group, • He saw organizations and their systems as
2. A less restrictive and friendlier supervisory style, comprising three components:
3. Increased earnings, 1. “Willingness of members to cooperate”
4. The novelty of being a study participant, and 2. “A common purpose”
5. Attention given to the assemblers by company 3. “Members able to communicate with each
officials and the researchers other.”
• Barnard believed that inefficient organizations were
The Interviewing Program (1925–1932) doomed to fail through continued entropy, or loss
of social and market‐based energy that leads to the
• Interviewing was a component of the research. decline of the system. Therefore, the manager's
When the study was initiated, researchers using the responsibility and authority is to establish negative
directive method asked questions that could easily entropy, social and market‐based energy that builds
be answered or maintains a system.
Conflict: Mary Parker Follett Systems: Jay W. Forrester

• According to the Hawthorne studies, working • Forrester drew a conceptual system of GE's
groups increased performance in a more informal inventory as it related to the company's decision to
environment, where they could express themselves hire or lay off ‐employees, a method that became
with each other and the leader and be heard. known as system dynamics. System dynamics
• Follett argued that the American notion of allowed Forrester to show the management team at
individual rights over the interests and well‐being of GE a simulation that demonstrated unintended
the group was counterproductive. consequences of their hiring practices.
• She suggests that there are four possible solutions: • He observed three factors that were consistent
1. Group submission among a multitude of disciplines, not just
2. Struggle for victory management:
3. Compromise 1. A study of organizations must make an
4. integration observation of the whole the interdependent
 subsystems, smaller interdependent systems that ▪ An approach that involve using
make up the whole system); the scientific method to
2. Organizations seek a state of equilibrium; and determine the “one best way” for
3. Organizations are open systems—they have the a job to be done.
power to change and be changed by external and
internal forces F.W. Taylor worked at the Midvale and Bethlehem Steel
companies in Pennsylvania.
History of Management
o General administrative
• History helps to understand the present theories ▪ Focused more on what managers
and practices, helps what has worked and what has do
not worked? ▪ Henry Fayol and Max Weber are
• Consider the great construction in past days. the most prominent behind this
• Management has been practiced a long time general administrative theory.
• The construction of a single pyramid took 20 years • Quantitative approach
and involved more than 1,00,000 workers. • Behavioral approach
• Who told each worker what to do? Who ensured • Contemporary approach
that there are enough stones at the site to keep o System approach
everyone busy? Managers o Contingency approach
• Venetians used warehouse and inventory system to
Pig Iron experiment
keep track of materials, HRM functions to manage
labour force, etc • Workers loaded “pigs of iron (each weighing 92
pounds) onto rail cars.
Division of labors
• Their daily average output was 12.5 tons, but Taylor
• Adam Smith (16 June 1723 – 17 July 1790) was a believed that it can be increased up to 47 or 48 tons.
Scottish moral philosopher, pioneer of political • Taylor offered the person $ 1.85 a day which is $
economy, and a key figure in the Scottish 0.70 more than other workers.
Enlightenment. • By following the instructions, motivating and
• In 1776, Adam Smith published “The Wealth of allocating optimistic man power, Taylor was able to
Nations‟, in which he argued the economic reach his 48‐ton objective.
advantages that organization and society would • With this experiment, Taylor concluded that the
gain from the division of labor. following principles would result in prosperity for
• Defined as breakdown of jobs in to narrow and both workers and managers.
repetitive tasks. o Develop a scientific method to replace the
old thumb rule method.
Industrial revolution o Scientifically train, teach and develop the
worker.
• In the late eighteenth century when machine power
o Heartily cooperate with the workers.
substituted human power, it became the more
o Divide the responsibility equally among
economical to manufacture goods in factories than
workers and management.
at home.
• Requires someone to forecast and handle the entire Frank and Lillian Gilbreth
task. That someone are called as managers.
• Frank Bunker Gilbreth Sr. (July 7, 1868 – June 14,
Approaches to management theory 1924) was an early advocate of scientific
management and a pioneer of motion study.
• Classical approach ‐ Emphasizes the rationality and
• Frank and his wife Lillian, a psychologist, studied the
making organizations and workers as efficient as
brick laying experiment to eliminate inefficient
possible
hand‐and‐body motions.
o Scientific management ‐ Modern
• By carefully analyzing the brick layer’s job, he
management can be predicted to be born
reduced the number of motions in laying exterior
on 1911, when F.W. Taylor (the father of
brick from 18 to about 5 and in laying interior brick
scientific management) published
from 18 to 2.
“Principles of Scientific Management”.
 • They invented a device called micro chronometer
that recorded a worker’s motions and the amount
of time spent doing each motions
• The Gilbreths also devised a classification scheme to
label 17 basic hand motions, which they called
Therbligs.

Scientific Management in present days

• Incentive systems
• Hiring process

Henry Fayol’s contribution

• He believed that management is the activity

common for all business endeavors.
• Henry Fayol’s 14 principles (1916)
o Division of work – specialization.
o Authority – authority and responsibility
are two sides of a coin.
o Discipline – sincerity towards higher
authority order.
o Unity of command – single boss
o Unity of direction – single plan of action.
o Subordination of individual interests to
general interests
o Remuneration – deserving pay / wages.
o Centralization – degree of centralization.
o Scalar chain – rank / line of authority.
o Order – people and material should be at
right time.
o Equity – should be no discrimination.
o Stability of tenure of personnel – man
power.
o Initiative – opportunities.
o Esprit de corps – promoting team spirit
and unity.

Max Weber’s contribution

• Max Weber was a German Sociologist who studied

organizations.
• In early 1900s, he developed a theory of authority
structures and relations based on an ideal type of
organization he called a bureaucracy.
• Weber realized that this “ideal bureaucracy” didn’t
exist in reality.
• His theory became the structural design for many of
today’s large organizations.