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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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Scientific Management
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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Scientific Management
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 Hawthorne Studies
The Hawthorne Studies
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
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