Maryland International College

Chapter
Chapter 2:
2:
The
The Evolution
Evolution Management
Management
 Chapter
Chapter 22 Outline
Outline
• Scientific Management Theory
Job Specialization and the Division of Labor
F. W. Taylor and Scientific Management
The Gilbreths
• Administrative Management Theory
The Theory of Bureaucracy
Fayol’s Principles of Management
• Behavioral Management Theory
The Work of Mary Parker Follett
The Hawthorne Studies and Human Relations
 Development
Development of
of Mgt
Mgt thought
thought
Despite the long history of In 20th century, the situation changed
management, it walked as a tortoise. rapidly, some of the factors that
Because of : contributed to the need a systematic
• Low esteem to business in society management are:

• Indifferent approaches of various • 1. The development of capitalism and

disciplines towards business the emergence of industries, mass
organizations. production, trade unions, competition
for markets, technological
• Treatment of management as an art not innovations, the increase in capital
as a science and investment, etc. forced organizations to
be efficient or to find out ways for
efficiency.
• The attitudes that successful managers
are born but not made • 2. The complexities of organizations,
society became more complex. Due to
division of labour, increased gov’t
These factors made management not regulations, organized trade unions
develop and studied systematically and
scientifically.
 Early
Early Influencers
Influencers
• A few of the contributor of early 2. Charles Babbage /1792-1871/
influences are:-
• 1. Robert Owen (1771-1858)
• He was a British professor of
• * He was a successful textile mill mathematics;
manager in Scotland from 1880-1828.
• convinced that the application of
• * He believed that factory workers scientific principles to work processes
would be more productive if they were would both increase productivity and
motivated through rewards rather lower expenses.
than punishments.
• advocated profit-sharing plans & bonus
• * He experienced with several systems as ways to achieve better
motivating techniques. relations between management & labor.
• The improved working conditions with in
the factory (Reducing the workday to 10 • emphasis on cutting costs and
½ hrs. )
increasing efficiency led to the
emergency of the classical school of
• Because of his emphasis on the management theory
workers, he is regarded as the father of
modern personal management.
 The
The Evolution
Evolution of
of Management
Management Theory
Theory

Source: Figure 2.1

 Scientific
Scientific Management
Management Theory
Theory
• Evolution of Modern Management
Began in the industrial revolution in the late
19th century as:
• Managers of organizations began seeking ways to
better satisfy customer needs.
• Large-scale mechanized manufacturing began to
supplanting small-scale craft production in the ways
in which goods were produced.
• Social problems developed in the large groups of
workers employed under the factory system.
• Managers began to focus on increasing the efficiency
of the worker-task mix.
 F.W.
F.W. Taylor
Taylor and
and Scientific
Scientific
Management
Management
• Scientific Management
The systematic study of the relationships
between people and tasks for the purpose of
redesigning the work process for higher
efficiency.
• Defined by Frederick Taylor in the late 1800’s to
replace informal rule of thumb knowledge.
• Taylor sought to reduce the time a worker spent on
each task by optimizing the way the task was done.
• Taylor: increase specialization & division of labor to
make production process more efficient
• Money is the prime motivator
 F.W.
F.W. Taylor
Taylor and
and Scientific
Scientific
Management
Management
• Scientific Management (Taylor) Principles
 Gather data about ways workers
perform their tasks;
experiment with
different ways to improve performance
Codify methods into written rules
and standards
Select people who have skills/abilities needed in
the task and train them on the particular task
Establish acceptable level of performance and
reward for performance above that level
Organizations chose to select some, rather than all,
of these principles.
 Frank
Frank and
and Lillian
Lillian Gilbreth
Gilbreth
• Refined Taylor’s work and made many
improvements to the methodologies of time
and motion studies.
Time and motion studies
• Break up each job action into its component actions.
• Find better ways to perform the action.
• Reorganize each job action to be more efficient.
• Also studied worker-related fatigue problems
caused by lighting, heating, and the design of
tools and machines.
 Scientific
Scientific Management
Management Principles:
Principles:
the
the result
result …
…

Jobs were more repetitive, boring, monotonous

Workers increasingly dissatisfied

Workers tried to hide the potential efficiency of

the work environment
When
When jobs
jobs are
are boring,
boring, output
output
declines…
declines…
Employees
Employees lack
lack of
of motivation
motivation andand bad
bad
work
work ethics
ethics are
are costly
costly for
for the
the
company
company
Administrative
Administrative Management
Management Theory
Theory
• Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.
• Max Weber
Developed the concept of bureaucracy as a
formal system of organization and
administration designed to ensure efficiency
and effectiveness.
 Weber’s
Weber’s
Principles
Principlesof
of
Bureaucracy
Bureaucracy

Figure 2.2
 Key points of Bureaucracy

Authority is the power to hold people accountable

for their actions.
Positions in the firm should be held based on
performance not social contacts.
Position duties are clearly identified. People
should know what is expected of them.
Lines of authority should be clearly identified.
Workers know who reports to who.
Rules, Standard Operating Procedures
(SOPs), & Norms used to determine how the
firm operates.
• Sometimes, these lead to “red-tape” and other
problems.
 Bureaucracy
Bureaucracy
• Strengths
Claimed to improve organizational
performance
Easier for managers to organize and control
Fair and equitable raises and promotion
• Improves feeling of security
• Reduces stress
• Encourage ethical behavior
• Weaknesses
What if poorly managed?
Decisions and changes are slow
Inflexibility
 Fayol’s
Fayol’s Administrative
Administrative Theory
Theory
• Henri Fayol (1841-1925)
General and Industrial Management
Principles and Elements of Management -
how managers should accomplish their
managerial duties
PRIMARY FOCUS: Management
(Functions of Administration)
More Respect for Worker than Taylor
• Workers are motivated by more than money
• Equity in worker treatment
More PRESCRIPTIVE
 Fayol’s
Fayol’s Administrative
Administrative Theory
Theory
• Five Elements of Management -- Managerial Objectives
Planning
Organizing
Command
Coordination
Control
• Keep machine functioning effectively and efficiently
• Replace quickly and efficiently any part or process that
did not contribute to the objectives
 Fayol’s Principles
• Henri Fayol, developed a set of 14
principles:
1. Division of Labor: allows for job specialization.
•Fayol noted firms can have too much specialization leading to poor
quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal
and informal authority resulting from special expertise.

3. Unity of Command: Employees should have only one boss.

4. Line of Authority: a clear chain from top to bottom of the

firm.

5. Centralization: the degree to which authority rests at the very

top.
 Fayol’s Principles

6. Unity of Direction: One plan of action to

guide the organization.
7. Equity: Treat all employees fairly in
justice and respect.
8. Order: Each employee is put where they
have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful
employees needed.
 Fayol’s Principles

11. Remuneration of Personnel: The

payment system contributes to success.
12. Stability of Tenure: Long-term
employment is important than employees
turnover.
13. General interest over individual
interest: The organization takes
precedence over the individual benefits.
14. Esprit de corps: Share enthusiasm or
devotion to the organization.
 Behavioral
Behavioral Management
Management Theory
Theory
• Behavioral Management
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.
Focuses on the way a manager should
personally manage to motivate employees.
 Behavioral
Behavioral Management
Management
• Mary Parker Follett (1868-1933)
An influential leader in early managerial theory
Concerned that Taylor was ignoring the human
side of the organization and the number of
ways employees can help managers
Held a horizontal view of power and authority
• “Authority should go with knowledge …”
• Managers should be facilitators rather than monitors or
supervisors
• Root of the work in self-managed teams, empowerment,
and cross-functioning
 The
The Hawthorne
Hawthorne Studies
Studies
• Studies of how characteristics of the work
setting affected worker fatigue and
performance at the Hawthorne Works of the
Western Electric Company from 1924-1932.
Worker productivity was measured at various
levels of light illumination.
Productivity increased regardless of whether
the light levels were raised or lowered.
• Why? … the presence of the researchers
• Implication … human relations movement
 Hawthorn
Hawthorn Studies
Studies by
by George
George Elton
Elton
Mayo
Mayo
• was known of conducting an • The relay assembly test room
experiment at the Hawthorn helped them to conclude that
plant at the Western Electric the most likely cause was that
Co. in U. S. A. changes in the social
• The illumination experiment conditions and in the method
was designed to prove the of supervision brought about
effect/impact of physical the improved attitude and
surroundings such as noise, increased output.
light, tonicity on productivity. • Based on the responses,
• The result of the experiment They realized that the
was that was little individuals work performance,
relationship/or physical position and status in the
surroundings did not have an organization were determined
impact on productivity. not only by the person himself
but by the group members as
well.
• His peers had an effect on his
performance.
 Human
Human Relations
Relations Movement
Movement
• Sparked by the Hawthorne Studies
 Workers attitude towards their managers affect their
work performance
• Train supervisors to elicit cooperative behavior from
subordinates so productivity will increase
• Workers making telephone switching equipment
 The norm of output vs. “ratebusters” vs. “chiselers”
 Worker’s influence can be as great as the manager’s
• Managers must understand the informal organization
• The beginning of Organizational Behavior
 Theory
Theory XX versus
versus Theory
Theory YY
(Douglas
(Douglas McGregor)
McGregor)

Source: Figure 2.3

 Theory Z
• William Ouchi researched the cultural
differences between Japan and USA.
 USA culture emphasizes the individual, and
managers tend to feel workers follow the
Theory X model.
 Japan culture expects worker committed to the
organization first and thus behave differently
than USA workers.
• Theory Z combines parts of both the USA
and Japan structure.
 Managers stress long-term employment, work-
group, and organizational focus.
 Management
Management Science
Science Theory
Theory
• An approach to management that uses rigorous
quantitative techniques to maximize the use of
organizational resources.
Quantitative management—utilizes linear
programming, modeling, simulation systems.
Operations management—techniques to
analyze all aspects of the production system.
Total Quality Management (TQM)—focuses
on improving quality throughout an
organization.
Management Information Systems (MIS)—
manage information throughout the
organization so that it gets to the right people
at the right time.
 Organizational
Organizational Environment
Environment Theory
Theory
• Organizational Environment
The set of forces and conditions that operate
beyond an organization’s boundaries but
affect a manager’s ability to acquire and
utilize resources.
• What “forces” are presently in the
“environment” that affect the manager’s ability
to acquire and utilize resources?
 The
The Open-Systems
Open-Systems View
View
(Katz,
(Katz,Kahn,
Kahn,Thompson,
Thompson,1960s)
1960s)

• Organization takes resources from the external

environment and transforms them into goods and
services that are sent back out to environment
• Organization interacts with environment in order to
survive
• Not a closed system, which is:
 self contained
 likely to experience entropy
• The whole is greater than the sum of its parts
• Synergy: gains acquired when entities coordinate
their efforts
The Organization as an Open System

Input Stage Conversion Output

Stage Stage
Raw
Materials Machines Goods
Human skills Services

Sales of outputs
Firm can then buy inputs
 Contingency Theory

• Assumes there is no one best way to

manage.
 The environment impacts the organization
and managers must be flexible to react to
environmental changes.
 The way the organization is designed,
control systems selected, depend on the
environment.
• Technological environments change rapidly,
so must managers.
 Structures

• Mechanistic: Authority is centralized at

the top. (Theory X)
 Employees closely monitored and
managed.
 Very efficient in a stable environment.

• Organic: Authority is decentralized

throughout employees. (Theory Y)
 Much looser control than mechanistic.
 Managers can react quickly to changing
environment.
 Contingency
Contingency Theory
Theory
(Burns
(Burns&&Stalker,
Stalker,Britain,
Britain,1960s)
1960s)

• No one best way to organize because the

external environment (ability to gain
resources) influences the organizational
structures and controls
• A quickly changing environment works against
this … why?
• Mechanic vs. Organic structure
 Summary
Summary of
of Theories
Theories

• Scientific Management Theory

Job specialization and division of labor
Taylor (Scientific Management)
Gilbreths

• Administrative Management Theory

Theory of Bureaucracy
Fayol (14 principles of management)
 Summary
Summary of
of Theories
Theories
(continued)
(continued)

• Behavioral Management Theory

Follett
Hawthorne Studies and Human Relations
McGregor (Theory X & Theory Y)
• Management Science Theory
Quantitative management
• Organizational Environment Theory
Open-systems View
Contingency Theory
 End of
Chapter 2