© Copyright McGraw-Hill. All rights reserved.2–12–1 Chapter 2 Outline Scientific Management...

© Copyright McGraw-Hill. All rights reserved. 2–1

Chapter 2 OutlineChapter 2 OutlineChapter 2 OutlineChapter 2 Outline

• Scientific Management TheoryScientific Management TheoryJob Specialization and the Division of LaborJob Specialization and the Division of LaborF. W. Taylor and Scientific ManagementF. W. Taylor and Scientific ManagementThe GilbrethsThe Gilbreths

• Administrative Management TheoryAdministrative Management TheoryThe Theory of BureaucracyThe Theory of BureaucracyFayol’s Principles of ManagementFayol’s Principles of Management

• Behavioral Management TheoryBehavioral Management TheoryThe Work of Mary Parker FollettThe Work of Mary Parker FollettThe Hawthorne Studies and Human RelationsThe Hawthorne Studies and Human Relations


Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)

• Behavioral Management Theory (cont’d)Behavioral Management Theory (cont’d)Theory X and Theory YTheory X and Theory Y

• Management Science TheoryManagement Science Theory

• Organizational Environment TheoryOrganizational Environment TheoryThe Open Systems ViewThe Open Systems ViewContingency TheoryContingency Theory


The Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management TheoryThe Evolution of Management Theory

Figure 2.1Source:


Scientific Management TheoryScientific Management TheoryScientific Management TheoryScientific Management Theory

• Evolution of Modern ManagementEvolution of Modern ManagementBegan in the industrial revolution in the late Began in the industrial revolution in the late

19th century as:19th century as:• Managers of organizations began seeking ways to Managers of organizations began seeking ways to

better satisfy customer needs.better satisfy customer needs.

• Large-scale mechanized manufacturing began to Large-scale mechanized manufacturing began to supplanting small-scale craft production in the ways supplanting small-scale craft production in the ways in which goods were produced.in which goods were produced.

• Social problems developed in the large groups of Social problems developed in the large groups of workers employed under the factory system.workers employed under the factory system.

• Managers began to focus on increasing the efficiency Managers began to focus on increasing the efficiency of the worker-task mix.of the worker-task mix.


F.W. Taylor and Scientific F.W. Taylor and Scientific ManagementManagement


• Scientific ManagementScientific ManagementThe systematic study of the relationships The systematic study of the relationships

between people and tasks for the purpose of between people and tasks for the purpose of redesigning the work process for higher redesigning the work process for higher efficiency.efficiency.

• Defined by Frederick Taylor in the late 1800’s to Defined by Frederick Taylor in the late 1800’s to replace informal rule of thumb knowledge.replace informal rule of thumb knowledge.

• Taylor sought to reduce the time a worker spent on Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.each task by optimizing the way the task was done.

• Taylor: increase specialization & division of labor to Taylor: increase specialization & division of labor to make production process more efficientmake production process more efficient




• Scientific Management (Taylor) PrinciplesScientific Management (Taylor) Principles Gather data about ways workers perform their Gather data about ways workers perform their

tasks; experiment with different ways to tasks; experiment with different ways to improve performanceimprove performance

Codify methods into written rules and Codify methods into written rules and standardsstandards

Select people who have skills/abilities needed Select people who have skills/abilities needed in the task and train them on the particular in the task and train them on the particular tasktask

Establish acceptable level of performance and Establish acceptable level of performance and reward for performance above that levelreward for performance above that level

Organizations chose to select some, rather than all, Organizations chose to select some, rather than all, of these principles.of these principles.


Henry Ford: A matter of ethicsHenry Ford: A matter of ethicsHenry Ford: A matter of ethicsHenry Ford: A matter of ethics

Reduced work day andReduced work day and

more paymore pay

along withalong with

Extreme controlExtreme control


Frank and Lillian GilbrethFrank and Lillian GilbrethFrank and Lillian GilbrethFrank and Lillian Gilbreth

• Refined Taylor’s work and made many Refined Taylor’s work and made many improvements to the methodologies of time improvements to the methodologies of time and motion studies.and motion studies.Time and motion studiesTime and motion studies

• Break up each job action into its component actions.Break up each job action into its component actions.

• Find better ways to perform the action.Find better ways to perform the action.

• Reorganize each job action to be more efficient.Reorganize each job action to be more efficient.

• Also studied worker-related fatigue problems Also studied worker-related fatigue problems caused by lighting, heating, and the design of caused by lighting, heating, and the design of tools and machines.tools and machines.


Scientific Management Principles:Scientific Management Principles:the result …the result …

Scientific Management Principles:Scientific Management Principles:the result …the result …

Jobs were more repetitive, boring, monotonousJobs were more repetitive, boring, monotonous

Workers increasingly dissatisfiedWorkers increasingly dissatisfied

Workers tried to hide the potential efficiency of Workers tried to hide the potential efficiency of the work environmentthe work environment


Administrative Management TheoryAdministrative Management TheoryAdministrative Management TheoryAdministrative Management Theory

• Administrative ManagementAdministrative ManagementThe study of how to create an organizational The study of how to create an organizational

structure that leads to high efficiency and structure that leads to high efficiency and effectiveness.effectiveness.

• Max WeberMax WeberDeveloped the concept of Developed the concept of bureaucracybureaucracy as a as a

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


Weber’s Weber’s Principles of Principles of BureaucracyBureaucracy

Weber’s Weber’s Principles of Principles of BureaucracyBureaucracy

Figure 2.2


BureaucracyBureaucracyBureaucracyBureaucracy

• StrengthsStrengthsClaimed to improve organizational Claimed to improve organizational

performanceperformanceEasier for managers to organize and controlEasier for managers to organize and controlFair and equitable raises and promotionFair and equitable raises and promotion

• Improves feeling of securityImproves feeling of security

• Reduces stressReduces stress

• Encourage ethical behaviorEncourage ethical behavior

• WeaknessesWeaknessesWhat if poorly managed?What if poorly managed?Decisions and changes are slowDecisions and changes are slowInflexibilityInflexibility


Fayol’s Principles of ManagementFayol’s Principles of ManagementFayol’s Principles of ManagementFayol’s Principles of Management

• Division of Labor: allows for job specialization. Division of Labor: allows for job specialization. Fayol noted jobs can have too much Fayol noted jobs can have too much

specialization leading to poor quality and specialization leading to poor quality and worker dissatisfaction.worker dissatisfaction.

• Authority and ResponsibilityAuthority and ResponsibilityFayol included both formal and informal Fayol included both formal and informal

authority resulting from special expertise.authority resulting from special expertise.

• Unity of CommandUnity of CommandEmployees should have only one boss.Employees should have only one boss.


Fayol’s Principles of Management Fayol’s Principles of Management (cont’d)(cont’d)


• Line of AuthorityLine of AuthorityA clear chain of command from top to bottom A clear chain of command from top to bottom

of the firm.of the firm.

• CentralizationCentralizationThe degree to which authority rests at the The degree to which authority rests at the

top of the organization.top of the organization.

• Unity of DirectionUnity of DirectionEmployee should receive orders and report Employee should receive orders and report

to only one supervisor.to only one supervisor.




• EquityEquityThe provision of justice and the fair and The provision of justice and the fair and

impartial treatment of all employees.impartial treatment of all employees.

• OrderOrderThe arrangement of employees where they The arrangement of employees where they

will be of the most value to the organization will be of the most value to the organization and to provide career opportunities.and to provide career opportunities.

• InitiativeInitiativeThe fostering of creativity and innovation by The fostering of creativity and innovation by

encouraging employees to act on their own.encouraging employees to act on their own.




• DisciplineDisciplineObedient, applied, respectful employees are Obedient, applied, respectful employees are

necessary for the organization to function.necessary for the organization to function.

• Remuneration of PersonnelRemuneration of PersonnelAn equitable uniform payment system that An equitable uniform payment system that

motivates contributes to organizational motivates contributes to organizational success.success.

• Stability of Tenure of PersonnelStability of Tenure of PersonnelLong-term employment is important for the Long-term employment is important for the

development of skills that improve the development of skills that improve the organization’s performance.organization’s performance.




• Subordination of Individual Interest to the Subordination of Individual Interest to the Common InterestCommon InterestThe interest of the organization takes The interest of the organization takes

precedence over that of the individual precedence over that of the individual employee.employee.

• Esprit de corpsEsprit de corpsComradeship, shared enthusiasm foster Comradeship, shared enthusiasm foster

devotion to the common cause devotion to the common cause (organization).(organization).


Why do companies perform better than Why do companies perform better than their rivals?their rivals?

(62 companies)(62 companies)

Why do companies perform better than Why do companies perform better than their rivals?their rivals?

(62 companies)(62 companies)

• Emphasize management autonomy and Emphasize management autonomy and entrepreneurshipentrepreneurship

• Encourage risk taking and initiativeEncourage risk taking and initiative

• Top managers closely involved in daily operationsTop managers closely involved in daily operations

• Unity of command and unity of directionUnity of command and unity of direction

• Decisions are not made in an isolated towerDecisions are not made in an isolated tower

• Decentralized authorityDecentralized authority

• Organizational goals guide everyone’s actionsOrganizational goals guide everyone’s actions

• Division of work and authority given with individual Division of work and authority given with individual interests towards the common interestinterests towards the common interest


Behavioral Management TheoryBehavioral Management TheoryBehavioral Management TheoryBehavioral Management Theory

• Behavioral ManagementBehavioral ManagementThe study of how managers should behave to The study of how managers should behave to

motivate employees and encourage them to motivate employees and encourage them to perform at high levels and be committed to perform at high levels and be committed to the achievement of organizational goals.the achievement of organizational goals.

Focuses on the way a manager should Focuses on the way a manager should personally manage to motivate employees.personally manage to motivate employees.


Behavioral ManagementBehavioral ManagementBehavioral ManagementBehavioral Management

• Mary Parker Follett Mary Parker Follett (1868-1933)(1868-1933)

An influential leader in early managerial theoryAn influential leader in early managerial theoryConcerned that Taylor was ignoring the human Concerned that Taylor was ignoring the human

side of the organization and the number of side of the organization and the number of ways employees can help managersways employees can help managers

Held a horizontal view of power and authorityHeld a horizontal view of power and authority• ““Authority should go with knowledge …”Authority should go with knowledge …”

• Managers should be facilitators rather than monitors or Managers should be facilitators rather than monitors or supervisorssupervisors

• Root of the work in self-managed teams, empowerment, Root of the work in self-managed teams, empowerment, and cross-functioningand cross-functioning


The Hawthorne StudiesThe Hawthorne StudiesThe Hawthorne StudiesThe Hawthorne Studies

• Studies of how characteristics of the work Studies of how characteristics of the work setting affected worker fatigue and setting affected worker fatigue and performance at the Hawthorne Works of the performance at the Hawthorne Works of the Western Electric Company from 1924-1932.Western Electric Company from 1924-1932.Worker productivity was measured at various Worker productivity was measured at various

levels of light illumination.levels of light illumination.Productivity increased regardless of whether Productivity increased regardless of whether

the light levels were raised or lowered.the light levels were raised or lowered.• Why? … the presence of the researchersWhy? … the presence of the researchers

• Implication … human relations movementImplication … human relations movement


Human Relations MovementHuman Relations MovementHuman Relations MovementHuman Relations Movement

• Sparked by the Hawthorne StudiesSparked by the Hawthorne StudiesWorkers attitude towards their managers affect their Workers attitude towards their managers affect their

work performancework performance

• Train supervisors to elicit cooperative behavior from Train supervisors to elicit cooperative behavior from subordinates so productivity will increasesubordinates so productivity will increase

• Workers making telephone switching equipmentWorkers making telephone switching equipmentThe norm of output vs. “ratebusters” vs. “chiselers”The norm of output vs. “ratebusters” vs. “chiselers”Worker’s influence can be as great as the manager’sWorker’s influence can be as great as the manager’s

• Managers must understand the Managers must understand the informalinformal organization organization

• The beginning of Organizational BehaviorThe beginning of Organizational Behavior


Theory X versus Theory YTheory X versus Theory Y(Douglas McGregor)(Douglas McGregor)

Theory X versus Theory YTheory X versus Theory Y(Douglas McGregor)(Douglas McGregor)

Figure 2.3Source:


Management Science TheoryManagement Science TheoryManagement Science TheoryManagement Science Theory

• An approach to management that uses rigorous An approach to management that uses rigorous quantitative techniques to maximize the use of quantitative techniques to maximize the use of organizational resources.organizational resources.Quantitative managementQuantitative management——utilizes linear utilizes linear

programming, modeling, simulation systems.programming, modeling, simulation systems.Operations managementOperations management——techniques to techniques to

analyze all aspects of the production system.analyze all aspects of the production system.Total Quality Management (TQM)Total Quality Management (TQM)——focuses focuses

on improving quality throughout an on improving quality throughout an organization.organization.

Management Information Systems (MIS)Management Information Systems (MIS)——manage manage information throughout the information throughout the organization so that it gets to the right people organization so that it gets to the right people at the right time.at the right time.


Organizational Environment TheoryOrganizational Environment TheoryOrganizational Environment TheoryOrganizational Environment Theory

• Organizational EnvironmentOrganizational EnvironmentThe set of forces and conditions that operate The set of forces and conditions that operate

beyond an organization’s boundaries but beyond an organization’s boundaries but affect a manager’s ability to acquire and affect a manager’s ability to acquire and utilize resources.utilize resources.

• What “forces” are presently in the What “forces” are presently in the “environment” that affect the manager’s ability “environment” that affect the manager’s ability to acquire and utilize resources?to acquire and utilize resources?


The Open-Systems ViewThe Open-Systems View(Katz, Kahn, Thompson, 1960s)(Katz, Kahn, Thompson, 1960s)

The Open-Systems ViewThe Open-Systems View(Katz, Kahn, Thompson, 1960s)(Katz, Kahn, Thompson, 1960s)

• Organization takes resources from the external Organization takes resources from the external environment and transforms them into goods and environment and transforms them into goods and services that are sent back out to environmentservices that are sent back out to environment

• Organization interacts with environment in order to Organization interacts with environment in order to survive survive

• Not a Not a closed systemclosed system, which is:, which is: self containedself contained likely to experience entropylikely to experience entropy

• The whole is greater than the sum of its partsThe whole is greater than the sum of its parts

• Synergy: gains acquired when entities coordinate Synergy: gains acquired when entities coordinate their effortstheir efforts


Contingency TheoryContingency Theory(Burns & Stalker, Britain, 1960s)(Burns & Stalker, Britain, 1960s)

Contingency TheoryContingency Theory(Burns & Stalker, Britain, 1960s)(Burns & Stalker, Britain, 1960s)

• No one best way to organize because the No one best way to organize because the external environment (ability to gain external environment (ability to gain resources) influences the organizational resources) influences the organizational structures and controlsstructures and controls

• A quickly changing environment works against A quickly changing environment works against this … why?this … why?

• Mechanic vs. Organic structureMechanic vs. Organic structure


Summary of TheoriesSummary of TheoriesSummary of TheoriesSummary of Theories

• Scientific Management TheoryScientific Management TheoryJob specialization and division of laborJob specialization and division of laborTaylor (Scientific Management)Taylor (Scientific Management)GilbrethsGilbreths

• Administrative Management TheoryAdministrative Management TheoryTheory of BureaucracyTheory of BureaucracyFayol (14 principles of management)Fayol (14 principles of management)


Summary of Theories Summary of Theories (continued)(continued)

Summary of Theories Summary of Theories (continued)(continued)

• Behavioral Management TheoryBehavioral Management TheoryFollettFollettHawthorne Studies and Human RelationsHawthorne Studies and Human RelationsMcGregor (Theory X & Theory Y)McGregor (Theory X & Theory Y)

• Management Science TheoryManagement Science TheoryQuantitative managementQuantitative management

• Organizational Environment TheoryOrganizational Environment TheoryOpen-systems ViewOpen-systems ViewContingency TheoryContingency Theory

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