The Evolution of Management Theory

1. 2 The Evolution of Management Theory 1 History Background 2 Evolution of the theory 3 Contingency Management

2. Evolution of Management Theory Figure 2.1 Org. Environment Management Science Behavioral Management Administrative Management Scientific Management 1940 2000 1890

3. History Background • Industrial revolution in 18th century in Great Britain. • Machinery was changing the way goods were produced. • Managers had to increase the efficiency of the worker-task mix. • Organizations were seeking ways to better satisfy customer needs.

4. Division of labor“the wealth of nation”(1776) • Adam Smith, 18th century economist, found firms manufactured pins in two ways: • Craft -- each worker did all steps. • Factory -- each worker specialized in one step. • Smith found that the factory method had much higher productivity.

5. 工序：拔丝、矫直、切段、敲针头、磨针尖、焊接。工序：拔丝、矫直、切段、敲针头、磨针尖、焊接。 分工前——200根/人 分工后——48，000根/10人 4，800根/人 24倍

7. Scientific Management CASE • Defined by Frederick Taylor, late 1800’s. • 1911 “Principles of Scientific Management” • the books publication established Taylor as the “father” of scientific management. • Contribution to Management • The 5 Principles • Valid of Scientific Management

8. Contribution to Management • Rise the labor productivity • Rise the managerial efficiency • The systematic study of the relationships between people and tasks to redesign the work for higher efficiency.

9. The 5 Principles • Four Principles to increase efficiency: 1. Study the way the job is performed & determine new ways to do it. Codify the new method into rules. 2. Select workers whose skills match the rules set in Step 1. 3. Establish a fair level of performance and pay for higher performance. 4.Divided work and managers take over all work for which it is better fit than workers. 5. Empowerment and Daily Control.

10. CASE UPS 美国联合邮包公司

11. Valid of the Scientific Management • The Scientific Management only suite to the enterprise which production is highly labor intensive. • Workers could purposely “under-perform”.Management responded with increased use of machines.

12. Administrative Management • Henri Fayol developed the concept of business & the principles of management. • 14 principles of management. • Developed the business activities as 6 sections & 4 managerial functions.

13. Business activities Business Activities Production Distribution Management Business Activities Accounting Finance Technology

14. Fayol’s Principles • Henri Fayol, developed a set of 14 principles: 1. Division of Labor:allows for job specialization. 2. Authority and Responsibility:Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command:Employees should have only one boss. 4. Unity of Direction:One plan of action to guide the organization 5. Centralization:the degree to which authority rests at the very top.

15. Fayol’s Principles 6.. Line of Authority:a clear chain from top to bottom of the firm. 7. Equity:Treat all employees fairly in justice and respect. 8. Order:Each employee is put where they have the most value. 9. Initiative:Encourage innovation. 10. Discipline:obedient, applied, respectful employees needed.

16. Fayol’s Principles 11. Remuneration of Personnel:The payment system contributes to success. 12. Stability of Tenure:Long-term employment is important. 13. General interest over individual interest:The organization takes precedence over the individual. 14. Esprit de corps:Share enthusiasm or devotion to the organization.

17. Behavioral Management • Focuses on the way a manager should personally manage to motivate employees. • A professor from Harvard named Elton Mayo takes charge of theHawthorne Studies. • Established the “Human Relationship” theory.

18. The Hawthorne Studies • Study of worker efficiency at the Hawthorne Works of the Western Electric Co. during 1924-1932. • Step one: Lighting intensity experiment. • Step two: Relayassembly experiment. • Step three: Conversation studies • step four: Observation experiment

19. Lighting intensity experiment • Worker productivity was measured at various levels of light illumination. • Researchers found that regardless of whether the light levels were raised or lowered, productivity rose. • Conclusion :It appears that the workers enjoyed the attention they received as part of the study and were more productive.

20. Relay assembly experiment • Change the situation of work, the productivity rose. • After the situation removed ,the productivity still kept high. • Conclusion : Find that the change of the situation can affect the workers` attitude to their jobs , then influence their output.

21. Conversation studies • During two years Meyo talked with 20,000 staffs about their jobs. • Find there are many informal groups in formal organization . • Group influences significantly affected individual behavior；

22. Observation experiment • Meyo observed the productivity of several work-groups, every group was a small organization with 14 workers . • Find social norms or standard of group usually affect individual action. • Group standards established individual worker output；

23. Management Science • Uses rigorous quantitative techniques to maximize resources. Quantitative management:utilizes linear programming, modeling, simulation systems. Operations management:techniques to analyze all aspects of the production system. Total Quality Management (TQM):focuses on improved quality. Management Information Systems (MIS):provides information about the organization.

24. Organization-Environment Theory • Considers relationships inside and outside the organization. • The environment consists of forces, conditions, and influences outside the organization, and it will affect the organization`s performance. Details in Chapter 3

25. Contingency Theory • Assumes there is no one best way to manage. • The environment impacts the organization and managers must be flexible to react to environmental changes. • The way the organization is designed, control systems selected, depend on the environment. • Details in chapter 7