Learning From the History of Management Thought

8/3/2019 Learning From the History of Management Thought

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Learning from the History

of Management Thought

Prof. Rushen Chahal


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Learning from the History of

Management Thought

Learning Goals

1. Describe the three branches of the traditionalviewpoint of management:

2. Explain the behavioral viewpoints contribution

to management

Bureaucratic, Scientific, and

Administrative


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Learning Goals (contd)

3. Describe how managers can use systems and

quantitative techniques to improve employeeperformance

4. State the two major components of the

contingency viewpoint

5. Explain the impact of the need for quality on

management practices


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Goals:

Efficiency

Consistency

Administrative

Management

Bureaucratic

Management

Scientific

Management


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Traditional ViewpointTraditional Viewpoint

Behavioral ViewpointBehavioral Viewpoint

Systems ViewpointSystems Viewpoint

Contingency ViewpointContingency Viewpoint

Quality ViewpointQuality Viewpoint

18901890 19001900 19101910 19201920 19301930 19401940 19501950 19601960 19701970 19801980 19901990 20002000


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Bureaucratic Management

Max Weber


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Bureaucratic Management

Use of rules, hierarchy, a clear division of labor,

and detailed procedures to guide employees

behaviors

Seven characteristics

Rulesformal guidelines for the behavior of

employees on the job

Impersonalityemployees are evaluated

according to rules and objective data

Division of Laborsplitting work into

specialized positions


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Caliper Technologies Corporation

(adapted from Figure 2.2)

CEO

Director ofQualityControl

ChiefFinancial

Officer

VP ofOperations

VP ofSales &

Marketing

VP ofResearch

VP ofProduct

Development

VP ofCorporate

Development

PlantManager

USA

Controller

PlantManagerGermany

Manager ofChemical

Engineering

Manager ofChip

Manufacturing

Manager ofEngineering& Software

Directorof

Manufacturing

Directorof

Manufacturing

Employees Employees


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Hierarchical Structureranks jobs accordingto the amount of authority in each job

Authoritywho has the right to make

decisions of varying importance at different

organizational levels Traditional authority

Charismatic authority

Rational, legal authority

Lifelong Career Commitmentboth the employee

and the organization view themselves committed toeach other over the working life of the employee

Rationalitythe use of the most efficient

means available to accomplish a goal


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Each job has a policy manual detailing the rules

that a person needs to follow to ensure efficiency.

Drivers are told to walk to a customers door at a

brisk pace of 3 feet per second, carrying thepackage in the right hand and clipboard in the

left. They should knock on the door so as not to

lose valuable seconds searching for a doorbell.

Michael Eskew

Chairman and CEO, UPS

Snapshot


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LOW MIDRANGE HIGH

DreamWorks Sony IRS

R&D Thinktank 7-11 McDonalds

MP3 PepsiCo State Motor

Vehicle

Registration

Bureaucratic Continuum


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Potential Benefits of Bureaucracy Efficiency

Consistency

Functions best when routine tasks are performed

Performance based on objective criteria

Most effective when

Large amounts of standard information have to be processed

The needs of the customer are known and are unlikely to

change The technology is routine and stable (e.g., mass production)

The organization has to coordinate the activities of employees

in order to deliver a standardized service/product to the

customer


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Potential Costs of Bureaucracy

Rigid rules

and

red tape

Protection of authority Slow decision making

Incompatible with

changingtechnology

Incompatible with

21st century workersvalues for freedom

and participative

management


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Scientific Management

Frederick W. Taylor

The father of Scientific Management the 1st Efficiency Expert.

A philosophy and set of management

practices that are based on fact and

observation, not on guesswork


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Believed increased productivity depended on

finding ways to make workers more efficient Used time-and-motion studies to analyze work

flows, supervisory techniques, and worker fatigue

Used functional foremanship, a division of labor

that assigned eight foremen to each work area Assumed workers motivated by money $$


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He was interested in machines --

apprenticeship in industry: Midvale Steel

Shocked by how inefficient his fellow

workers were

timed workers with stopwatches

break down job into parts, make parts

efficient

figure out how to hire the right worker for

the job

give the worker appropriate training

Taylors Work?


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introduced incentive pay plans

(workers were assumed to be motivated

only by money).Believed would lead to cooperation--

management and worker

Studied design of shovels and introduced

a better design at Bethlehem Steel Works,reducing the number of people shoveling

from 500 to 140

Taylors Work? Contd.


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The Gilbreths

Frank Gilbreth used motion pictures

to analyze workers motions Lillian Gilbreth championed protecting

workers from unsafe working conditions

Henry Gantt

Focused on control systems for

production scheduling (Gantt Chart)


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Frank and Lillian Gilbrethrefined Taylors methods and suggested

1. Breaking down each action into individualcomponents.

2. Find better ways to perform the action.

3. Reorganize each action to be more efficient.

Problems associated with Scientific Management

Managers often gave attention only to increasing output

They did not allow workers to share in the benefits ofincreased output.

Specialized jobs became very boring & dull.

Workers ended up distrusting Scientific Management.


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Henry L. GanttHow to increase workers efficiency?

The essential difference between the best systemof today and those of the past are the manner inwhich the tasks are scheduled, and the manner

in which their performance is rewarded

Scheduling InnovationGantt Chart scheduling summary of work

Rewarding InnovationBonus in addition to the piece rate if they exceeded theirdaily production quota

On time = Bonus, Good Performance = Reward


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Insights from Scientific Management

Many companies have used scientific management

principles to improve efficiency, employee selection

and training

Scientific management failed to recognize the

social needs of workers and the importance of

working conditions and job satisfaction


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David Berbauer

CEO, Walgreens

Walgreens is constantly pushing to drive costs down. It

pioneered the application of satellite communications and

computer technology and linked these to increase store

efficiency. By using tried-and-proven management concepts,

each of its 6,100 stores [is] able to process around 280

prescriptions a day and beat Wal-Mart by 27 cents and CVS

by 94 cents on each prescription.

Snapshot


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Administrative Management: Overview

Focuses on the manager and basic managerial

functions of planning, organizing, controlling

and leading

Unity of Command Principle: an

employee should report to only one

manager

Authority Principle: managers have the

right to give orders to get things done


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Fayols Principles of Effective Management

Division of Work: allows for job specialization. Work should be divided among individuals and groups.

Authority and Responsibility

Authority right to give orders

Responsibility involves being answerable

Whoever assumes authority assumes responsibility

Discipline

Common efforts of workers. Penalties

Unity ofCommand

Employees should have only one boss.


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Unity ofDirection

A single plan of action to guide the organization.

Subordination of individual interests to the generalinterests of organization

Remuneration

An equitable uniform payment system that motivates

contributes to organizational success. Centralization

The degree to which authority rests at the top of the

organization.

Scalar

Chain

Chainlike authority scale.

Most vs. least authority


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Order

The arrangement of employees where they will be of

the most value to the organization and to providecareer opportunities.

Equity

The provision of justice and the fair and impartial

treatment of all employees. Stability of Tenure of Personnel

Long-term employment is important for the

development of skills that improve the organizations

performance. Subordination of Individual Interest to

the Common Interest

The interest of the organization takes precedence

over that of the individual employee.


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Initiative

The fostering of creativity and innovation by

encouraging employees to act on their own. Esprit de corps

Harmony, general good feeling among employees,

shared enthusiasm, foster devotion to the common

cause (organization).


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Behavioral Viewpoint: Overview

Focuses on dealing effectively with the

human aspects of organizations

Started in the 1930s

Emphasis on working conditions

Workers wanted respect

Workers formed unions to bargain

with management


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Mary Parker Folletts Contributions

Managers need to establish

good working relationships

with employees

Goal:

Improve

Coordination


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Managers need to have a common

touch and to be a team leader and not adrill sergeant. When their people shine,

they shine.

Vickie Yoke, Senior Vice President, Alcatel

Snapshot


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Chester Barnards Contributions

People should continuously communicateand cooperate with one another

Acceptance theory of authority holds that employees

have free wills and, thus, choose whether to follow

managements orders. Employees will follow ordersif they:

Understand what is required

Believe the orders are consistent withorganization goals

See positive benefits to themselves in

carrying out the orders


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The Hawthorne Studies

Studies of how characteristics of the work settingaffected 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.

Researchers found that regardless of whether

the light levels were raised or lowered, workerproductivity increased.


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The Relay Assembly Test Room Experiments

Working conditions and productivity

The Bank Wiring Observation Room Experiment

Analyze the social relationships in a work group


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Employees are

motivated by social

needs and associationwith others

Employees performance

is more a result of peer

pressure thanmanagements incentives

and rules

Managers need to

involve subordinates

in coordinating their

work to improve

efficiency

Employees want to

participate in decisions

that affect them

Lessons from the Hawthrone Studies

Behavioral Viewpoint


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Snapshot

Teamwork is one of the most beautiful

experiences in life. Teamwork is our

core value and a primary way that the

Container Store enriches the quality

of employees work life.

Kip Tindell, President, The Container Store


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System: an association of interrelated

and interdependent parts

Systems viewpoint: an approach to solving

problems by diagnosing them within a

framework of transformation processes,

outputs, and feedback

Systems Viewpoint:

Systems Concepts


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Inputs

Human, physical,financial, and

information

resources

Transformation

Process

OutputsProducts

and

services

Feedback Loops

Basic Systems View of Organizations


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Closed system: limits its interactions with

the environment (e.g., stamping departmentin GM assembly plant)

Open system: interacts with the external

environment (e.g., marketing department)

System Types


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Mathematical

models are usedto simulate

changes

Computers are

essential

Primary focus is

on decision

making

Alternatives are

based on

economic criteria

Quantitative Techniques


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Lead to

creation of

blogs

Enables

managers to

simulate

conditions

Emphasis on

objective criteriafor decision

making

Focus on

planning


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The Contingency Approach

What managers do in practice depends on agiven set of circumstances a situation.


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Management practices should be consistent

with the requirements of the external

environment, the technology used to make aproduct or provide a service, and capabilities

of the people who work for the organization

Uses concepts of the traditional, behavioral

and system viewpoints


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External environmentstable or

changing

Technologysimple or complex

Peopleways they are similar and

different from each other

Contingency Variables


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Behavioral ViewpointHow managers influence others;

Informal group

Cooperation among employees

Employees social needs

Systems Viewpoint

How the parts fit together.

Inputs

Transformations

Outputs

Traditional Viewpoint

What managers do:

Plan

Organize

Lead

Control

Contingency ViewpointManagers use of other viewpoints

to solve problems involving: External environment

Technology

Individuals

Contingency Viewpoint: Draws on

Other Viewpoints, As Necessary


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Quality: how well a product or service

does what it is supposed to dohow closely

and reliably it satisfies the specifications towhich it is built or provided

Total Quality Management (TQM): a

philosophy that makes quality values thedriving force behind leadership, design,

planning, and improvement initiatives


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Inputs or raw materials

Operations

Outputs

Measuring by variable or a products characteristics

Measuring by attribute or a products acceptable/

unacceptable characteristics

Statistical process control

Quality of a process (e.g., sigma)

Quality Control Process


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Lower Costs

and Higher

Market Share

Decreased

Product

Liability Quality

Positive

Company

Image

Learning from the Quality Viewpoint

Learning From the History of Management Thought

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