The Evolution of Management Thinking

1. The Evolution of Management Thinking Chapter 2

2. New Approach to Management Success accrues to those who learn how • To be leaders • To Initiate change • To participate in and create organizations • with fewer managers • With less hierarchy that can change quickly

3. Management and Organization • Management philosophies and organization forms change over time to meet new needs • Some ideas and practices from the past are still relevant and applicable to management today

4. Historical Perspective • Provides a context or environment • Develops an understanding of societal impact • Achieves strategic thinking • Improves conceptual skills • Social, political, and economic forces have influenced organizations and the practice of management

5. Forces Influencing Organizations and Management • Social Forces - values, needs, and standards of behavior • Political Forces - influence of political and legal institutions on people & organizations • Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users

6. 2000 The Technology-Driven Workplace 1990 2010 TheLearning Organization 2010 1980 Total Quality Management 2000 1970 Contingency Views 2000 1950 Systems Theory 2000 1940 Management Science Perspective 1990 1930 Humanistic Perspective 1990 1890 Classical 1940 Management Perspectives Over Time Exhibit 2.1, p.44 2010 1870

7. Classical Perspective: 3000 B.C. • Rational, scientific approach to management – make organizations efficient operating machines • Scientific Management • Bureaucratic Organizations • Administrative Principles

8. Scientific Management: Taylor 1856-1915 General Approach • Developed standard method for performing each job. • Selected workers with appropriate abilities for each job. • Trained workers in standard method. • Supported workers by planning work and eliminating interruptions. • Provided wage incentives to workers for increased output.

9. Scientific Management Contributions • Demonstrated the importance of compensation for performance. • Initiated the careful study of tasks and jobs. • Demonstrated the importance of personnel and their training. Criticisms • Did not appreciate social context of work and higher needs of workers. • Did not acknowledge variance among individuals. • Tended to regard workers as uninformed and ignored their ideas

10. Bureaucracy Organizations • Max Weber 1864-1920 • Prior to Bureaucracy Organizations • European employees were loyal to a single individual rather than to the organization or its mission • Resources used to realize individual desires rather than organizational goals • Systematic approach –looked at organization as a whole Ethical Dilemma: The Supervisor

11. Bureaucracy Organizations Division of labor with Clear definitions of authority and responsibility Personnel are selected and promoted based on technical qualifications Positions organized in a hierarchy of authority Managers subject to Rules and procedures that will ensure reliable predictable behavior Administrative acts and decisions recorded in writing Management separate from the ownership of the organization Exhibit 2.3, p. 49

12. Administrative Principles • Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard • Focus: • Organization rather than the individual • Delineated the management functions of planning, organizing, commanding, coordinating, and controlling

13. Division of labor Authority Discipline Unity of command Unity of direction Subordination of individual interest Remuneration Centralization Scalar chain Order Equity Stability and tenure of staff Initiative Esprit de corps Henri Fayol 1841-1925 14 General Principles of Management

14. Mary Parker Follett 1868-1933 • Importance of common super-ordinate goals for reducing conflict in organizations • Popular with businesspeople of her day • Overlooked by management scholars • Contrast to scientific management • Reemerging as applicable in dealing with rapid change in global environment • Leadership – importance of people vs. engineering techniques Ethics - Power - Empowerment

15. Chester Barnard 1886-1961 • Informal Organization • Cliques • Naturally occurring social groupings • Acceptance Theory of Authority • Free will • Can choose to follow management orders

16. Humanistic Perspective Emphasized understanding human behavior, needs, and attitudes in the workplace • Human Relations Movement • Human Resources Perspective • Behavioral Sciences Approach

17. Human Relations Movement Emphasized satisfaction of employees’ basic needs as the key to increased worker productivity

18. Hawthorne Studies • Ten year study • Four experimental & three control groups • Five different tests • Test pointed to factors other than illumination for productivity • 1st Relay Assembly Test Room experiment, was controversial, test lasted 6 years • Interpretation, money not cause of increased output • Factor that increased output, Human Relations

19. Human Resource Perspective Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential

20. Abraham Maslow’s Hierarchy of Needs 1908-1970 Self-actualization Esteem Belongingness Safety Physiological Based on needs satisfaction

21. Dislike work –will avoid it Must be coerced, controlled, directed, or threatened with punishment Prefer direction, avoid responsibility, little ambition, want security Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely distributed Intellectual potential only partially utilized Douglas McGregor Theory X & Y 1906-1964 Theory X Assumptions Theory Y Assumptions

22. Douglas McGregor Theory X & Y • Few companies today still use Theory X • Many are trying Theory Y techniques Experiential Exercise: Theory X and Theory Y Scale

23. Behavioral Sciences Approach Sub-field of the Humanistic Management Perspective • Applies social science in an organizational context • Draws from economics, psychology, sociology, anthropology, and other disciplines • Understand employee behavior and interaction in an organizational setting • OD – Organization Development

24. Management Science Perspective • Emerged after WW II • Applied mathematics, statistics, and other quantitative techniques to managerial problems • Operations Research – mathematical modeling • Operations Management – specializes in physical production of goods or services • Information Technology – reflected in management information systems

25. Recent Historical Trends • Systems Theory • Contingency View • Total Quality Management (TQM)

26. Systems View of Organizations Exhibit 2.5, p. 58

27. Contingency View of Management Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

28. Elements of a Learning Organization Team-Based Structure Learning Organization Empowered Employees Open Information Exhibit 2.7, p. 61

29. Types of E-Commerce Business-to-Consumer B2C Selling Products and Services Online Consumer-to-Consumer C2C Electronic Markets Created by Web-Based Intermediaries Business-to-Business B2B Transactions Between Organizations Exhibit 2.8, p. 63