Chapter 2

1. Chapter 2 Management Learning Past to Present

2. Planning Ahead — Chapter 2 Study Questions • What can be learned from classical management thinking? • What insights come from behavioral management approaches? • What are the foundations of modern management thinking?

3. Chapter 2 Learning Dashboard • Classical Management Approaches • Scientific management • Administrative principles • Bureaucratic organization • Behavioral Management Approaches • Follett’s organizations as communities • The Hawthorne studies • Maslow’s theory of human needs • McGregor’s Theory X and Theory Y • Argyris’s theory of adult personality

4. Chapter 2 Learning Dashboard • Modern Management Foundations • Quantitative analysis and tools • Organization as systems • Contingency thinking • Quality management • Knowledge management and organizational learning • Evidence-based management

5. Figure 2.1 Major branches in the classical approach to management

6. Takeaway 1: Classical Management Approaches • Four guiding principles of scientific management (Frederick Taylor) • Develop for every job a “science” that includes rules of motion, standardized work implements, and proper working conditions. • Carefully select workers with the right abilities for the job. • Carefully train workers to do the job and give them the proper incentives to cooperate with the job “science.” • Support workers by carefully planning their work and by smoothing the way as they go about their jobs.

7. Takeaway 1: Classical Management Approaches • Scientific management (the Gilbreths) • Motion study • Science of reducing a job or task to its basic physical motions • Eliminating wasted motions improves performance

8. Takeaway 1: Classical Management Approaches • Practical lessons from scientific management • Make results-based compensation a performance incentive • Carefully design jobs with efficient work methods • Carefully select workers with the abilities to do these jobs • Train workers to perform jobs to the best of their abilities • Train supervisors to support workers so they can perform jobs to the best of their abilities

9. Takeaway 1: Classical Management Approaches • Administrative principles (Henri Fayol) — rules/duties of management:

10. Takeaway 1: Classical Management Approaches • Administrative principles (Henri Fayol) • Scalar chain • there should be a clear and unbroken line of communication from the top to the bottom of the organization • Unity of command • each person should receive orders from only one boss • Unity of direction • one person should be in charge of all activities with the same performance objective

11. Takeaway 1: Classical Management Approaches • Bureaucratic organization (Max Weber) • Bureaucracy • An ideal, intentionally rational, and very efficient form of organization • Based on principles of logic, order, and legitimate authority

12. Takeaway 1: Classical Management Approaches • Characteristics of bureaucratic organizations: • Clear division of labor • Clear hierarchy of authority • Formal rules and procedures • Impersonality • Careers based on merit

13. Takeaway 1: Classical Management Approaches • Possible disadvantages of bureaucracy: • Excessive paperwork or “red tape” • Slowness in handling problems • Rigidity in the face of shifting needs • Resistance to change • Employee apathy

14. Figure 2.2 Foundations in the behavioral or human resource approaches to management

15. Takeaway 2: Behavioral Management Approaches • Organizations as communities – Mary Parker Follett • Groups and human cooperation: • Groups allow individuals to combine their talents for a greater good • Organizations are cooperating “communities” of managers and workers • Manager’s job is to help people cooperate and achieve an integration of interests

16. Takeaway 2: Behavioral Management Approaches • Organizations as communities • Forward-looking management insights:

17. Takeaway 2: Behavioral Management Approaches • Hawthorne studies • Initial study examined how economic incentives and physical conditions affected worker output • No consistent relationship found • “Psychological factors” influenced results

18. Takeaway 2: Behavioral Management Approaches • Hawthorne studies (cont.) • Social setting and human relations • Manipulated physical work conditions to assess impact on output • Designed to minimize the “psychological factors” of previous experiment • Mayo and colleagues concluded: • New “social setting” led workers to do good job • Good “human relations” = higher productivity

19. Takeaway 2: Behavioral Management Approaches • Hawthorne studies (cont.) • Employee attitudes and group processes • Some things satisfied some workers but not others • People restricted output to adhere to group norms

20. Takeaway 2: Behavioral Management Approaches • Lessons from the Hawthorne Studies: • Social and human concerns are keys to productivity • Hawthorne effect — people who are singled out for special attention perform as expected

21. Takeaway 2: Behavioral Management Approaches • Maslow’s theory of human needs • A need is a physiological or psychological deficiency a person feels compelled to satisfy • Need levels: • Physiological • Safety • Social • Esteem • Self-actualization

22. Figure 2.3 Maslow’s hierarchy of human needs

23. Takeaway 2: Behavioral Management Approaches • Maslow’s theory of human needs • Deficit principle • A satisfied need is not a motivator of behavior • Progression principle • A need becomes a motivator once the preceding lower-level need is satisfied • Both principles cease to operate at self-actualization level

24. Takeaway 2: Behavioral Management Approaches • McGregor’s Theory X assumes that workers: • Dislike work • Lack ambition • Are irresponsible • Resist change • Prefer to be led

25. Takeaway 2: Behavioral Management Approaches • McGregor’s Theory Y assumes that workers are: • Willing to work • Capable of self control • Willing to accept responsibility • Imaginative and creative • Capable of self-direction

26. Takeaway 2: Behavioral Management Approaches • Implications of Theory X and Theory Y: • Managers create self-fulfilling prophecies • Theory X managers create situations where workers become dependent and reluctant • Theory Y managers create situations where workers respond with initiative and high performance • Central to notions of empowerment and self-management

27. Takeaway 2: Behavioral Management Approaches • Argyris’s theory of adult personality • Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality • Psychological success occurs when people define own goals

28. Takeaway 2: Behavioral Management Approaches • Argyris’s theory of adult personality • Management practices should accommodate the mature personality by: • Increasing task responsibility • Increasing task variety • Using participative decision making

29. Takeaway 3: Modern Management Foundations • Foundations for continuing developments in management

30. Takeaway 3: Modern Management Foundations • Management science or operations research

31. Takeaway 3: Modern Management Foundations • Quantitative Analysis and Tools • Analytics – the use of large data bases and mathematics to solve problems and make informed decisions using systematic analysis • Typical quantitative approach to managerial problem-solving • Problem encountered, it is systematically analyzed, appropriate mathematical models and computations applied, optimal solution identified

32. Takeaway 3: Modern Management Foundations • Organizations as Systems • System • Collection of interrelated parts that function together to achieve a common purpose • Subsystem • A smaller component of a larger system • Open systems • Organizations that interact with their environments in the continual process of transforming resource inputs into outputs

33. Figure 2.4 Organizations as complex networks of interacting subsystems

34. Takeaway 3: Modern Management Foundations • Contingency thinking • Tries to match managerial responses with problems and opportunities unique to different situations • No “one best way” to manage • Appropriate way to manage depends on the situation

35. Takeaway 3: Modern Management Foundations • Quality management • Managers and workers in progressive organizations are quality conscious • Quality and competitive advantage are linked • Total quality management (TQM) • Comprehensive approach to continuous quality improvement for a total organization • Creates context for the value chain

36. Takeaway 3: Modern Management Foundations • Continuous improvement • Continual search for new ways to improve quality • Something always can and should be improved • ISO certification • Global quality benchmark • Refine and upgrade quality to meet ISO standards

37. Takeaway 3: Modern Management Foundations • Knowledge Management and Organizational Learning • Knowledge management is the process of using intellectual capital for competitive advantage • Portfolio of intellectual assets include patents, intellectual property rights, trade secrets, and accumulated knowledge of the entire workforce

38. Takeaway 3: Modern Management Foundations • Learning organizations • Organizations that are able to continually learn and adapt to new circumstances • Core ingredients include:

39. Takeaway 3: Modern Management Foundations • Evidence-Based Management • Making management decisions on “hard facts” about what really works

40. Takeaway 3: Modern Management Foundations • Evidence-Based Positive Human Resource Management Practices • Employment security • Selective hiring • Self-managing teams • High pay based on merit • Training and development • Reduced status distinctions • Shared information