Early management Concepts and influenceso Growth of companies

• minor improvements in management tactics produced impressive increases in production quantity and quality

• economies of scale - reductions in the average cost of a unit production as the total volume produced increases

• opportunities for mass production created by the industrial revolution spawned intense and systematic thought about management problems and issues

Systematic management:o Key concepts

• systematized manufacturing operations• coordination of procedures and processes built into internal operations• emphasis on economical operations, inventory management, and cost

controlo Contributions

• beginning of formal management in the United States• promotion of efficient, uninterrupted production

o Limitations• ignored relationship between an organization and it environment• ignored differences in managers’ and workers’ views

Scientific Management:o Key concepts

• used scientific methods to determine the “one best way’• emphasized study of tasks, selection and training of workers, and

cooperation between workers and managemento Contributions

• improved factory productivity and efficiency• introduced scientific analysis to the workplace• piece-rate system equated worker rewards and performance

o Limitations• simplistic motivational assumptions• workers viewed as parts of a machine• potential for exploitation of labor

Administrative Management:o Key concepts

• Fayol’s five functions and 14 principles of management• executives formulate the organization’s purpose, secure employees, and

maintain communications• managers must respond to changing developments

o Contributions• viewed management as a profession that can be trained and developed• emphasized the broad policy aspects of top-level managers

• offered universal managerial prescriptionso Limitations

• universal prescriptions need qualifications for contingencies

Human Relationso Key concepts

• productivity and employee behavior are influenced by the informal work group

• should stress employee welfare, motivation, and communication• social needs have precedence over economic needs

o Contributions• psychological and social processes influence performance• Maslow’s hierarchy of need

o Limitations• ignored workers’ rational side and the formal organization’s contributions

to productivity• research overturned the simplistic belief that happy workers are more

productive

Bureaucracy:o Key Concepts

• structured network of relationships among specialized positions• rules and regulations standardize behavior• jobs staffed by trained specialists who follow rules

o Contributions• promotes efficient performance of routine operations• eliminates subjective judgment by employees and management• emphasizes position rather than the person

o Limitations• limited organizational flexibility and slowed decision making• ignores the importance of people and interpersonal relationships• rules may become ends in themselves

Quantitative Management:o Key concepts

• application of quantitative analysis to managemento Contributions

• developed specific mathematical methods of problem analysis• helped managers select the best alternative among a set

o Limitations• models neglect non-quantitative factors• managers not trained in these techniques may not trust or understand the

techniques’ outcomes• not suited for non-routine or unpredictable management decisions

Organizational Behaviour:o Key concepts

• promotes employee effectiveness through understanding of individual, group, and organizational processes

• stresses relationships among employees/managers• assumes employees want to work and can control themselves

o Contributions• increased participation, greater autonomy, individual challenge and

initiative, and enriched jobs may increase participation• recognized the importance of developing human resources

o Limitations• some approaches ignored situational factors, such as the environment and

technology

System Theory:o Key concepts

• organization is viewed as a managed system• management must interact with the environment• organizational goals must address effectiveness and efficiency• organizations contain a series of subsystems• there are many avenues to the same outcome• synergies enable the whole to be more than the sum of the parts

o Contributions• recognized the importance of the relationship between the organization

and the environmento Limitations

• does not provide specific guidance on the functions of managers

Contingency theory:o Key concepts

• situational contingencies influence the strategies, structures, and processes that result in high performance

• there is more than one way to reach a goal• managers may adapt their organizations to the situation

o Contributions• identified major contingencies• argued against universal principles of management

o Limitations• not all important contingencies have been identified• theory may not be applicable to all managerial issues