Chapter 2

1. Chapter 2 The Evolution of Management Thought

2. The Evolution of Management Theory MGMT 321 – Chapter 2

3. Job Specialization and the Division of Labor • Adam Smith – 2 different ways to manufacture pins • Craft-style: each worker did all steps • Production: each worker specialized in one step • Job Specialization • Different workers specialize in specific tasks over time MGMT 321 – Chapter 2

4. F.W. Taylor and Scientific Management • Systematic study of the relationships between people and tasks to redesign the work process to increase efficiency • Consists of 4 principles • Study tasks to identify improvements • Create written rules and SOPs • Select and train workers carefully • Establish fair performance standards and reward accordingly MGMT 321 – Chapter 2

5. Problems with Scientific Management • Managers frequently implemented only the increased output side of Taylor’s plan • Workers did not share in the increased output • Specialized jobs became very boring, dull • Workers ended up distrusting the Scientific Management method • Workers could purposely “under-perform” • Management responded with increased use of machines and conveyors belts MGMT 321 – Chapter 2

6. The Gilbreths • Break up and analyze each action of a task into its component actions • Find better ways to perform each component action • Reorganize the component actions to be more efficient, at less cost in time and effort MGMT 321 – Chapter 2

7. Administrative Management Theory • Study of how organizational structure affects efficiency and effectiveness • Max Weber • Developed the principles of bureaucracy as a formal system designed to ensure efficiency and effectiveness MGMT 321 – Chapter 2

8. Weber’s Principles of Bureaucracy MGMT 321 – Chapter 2

9. Fayol’s Principles of Management • Division of Labor • Jobs can have too much specialization leading to poor quality and worker dissatisfaction • Authority and Responsibility • Both formal and informal authority • Unity of Command • Employees should have only one boss • Line of Authority • A clear chain of command from top to bottom MGMT 321 – Chapter 2

10. Fayol’s Principles of Management • Centralization • The degree to which authority rests at the top • Unity of Direction • A single plan of action to guide the organization • Equity • The justice and fairness in the treatment of all employees • Order • Arranging employees to be of the most value and to provide career opportunities MGMT 321 – Chapter 2

11. Fayol’s Principles of Management • Initiative • Fostering creativity and innovation by encouraging employees to act on their own • Discipline • Obedient, applied, respectful employees are necessary for the organization to function • Remuneration of Personnel • An equitable uniform payment system that motivates contributes to organizational success MGMT 321 – Chapter 2

12. Fayol’s Principles of Management • Stability of Tenure of Personnel • Long-term employment develops skills that improve organizational performance • Subordination of Individual Interest • The interest of the organization takes precedence • Esprit de corps • Foster comradeship, shared enthusiasm, and devotion to the common cause MGMT 321 – Chapter 2

13. Behavioral Management Theory • The study of how managers should behave to: • Motivate employees • Encourage them to perform at high levels • Be committed to the achievement of organizational goals • Mary Parker Follett • Concerned that Taylor ignored the human side of the organization MGMT 321 – Chapter 2

14. The Hawthorne Studies • How work setting characteristics affect fatigue and performance • Regardless of whether the light levels were raised or lowered, worker productivity increased • Hawthorne effect – workers’ attitudes toward their managers affect performance • Implications – behavior of managers and workers is as important in explaining the level of performance as the technical aspects of the task MGMT 321 – Chapter 2

15. Douglas McGregor’s Theory X and Y MGMT 321 – Chapter 2

16. Management Science Theory • Utilizes quantitative techniques to help managers maximize the use of organizational resources • Quantitative management • Operations management • Total Quality Management (TQM) • Management Information Systems (MIS) MGMT 321 – Chapter 2

17. Organizational Environment Theory • The set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources MGMT 321 – Chapter 2

18. The Open-Systems View MGMT 321 – Chapter 2

19. Contingency Theory MGMT 321 – Chapter 2