week 1 discussion Tom’s

The Evolution of Management Thought
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More than ever before, companies must learn how to adapt and remain competitive in a changing global marketplace.
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Learning Objectives (1 of 2)
Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory.
Explain the principle of job specialization and division of labor, and tell why the study of person⎼task relationships is central to the pursuit of increased efficiency.
Identify the principles of administration and organization that underlie effective organizations.

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Learning Objectives (2 of 2)
Trace the change in theories about how managers should behave to motivate and control employees.
Explain the contributions of management science to the efficient use of organizational resources.
Explain why the study of the external environment and its impact on an organization has become a central issue in management thought.

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Scientific Management Theory
Figure 2.1 The Evolution of Management Theory

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Figure 2.1 The Evolution of Management Theory
In Figure 2.1 we summarize the chronology of the management theories discussed in this chapter.

In the 19th century’s new economic climate, managers of all types of organizations—political, educational, and economic—were trying to find better ways to satisfy customers’ needs. Many major economic, technical, and cultural changes were taking place at this time.

The introduction of steam power and the development of sophisticated machinery and equipment changed how goods were produced.

Owners and managers of the new factories found themselves unprepared for the challenges accompanying the change.

They were unprepared for the social problems that occur when people work together in large groups in a factory or shop system.

Managers began to search for new techniques to manage their organizations’ resources, and soon they began to focus on ways to increase the efficiency of the worker–task mix.

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Job Specialization and the Division of Labor (1 of 2)
Adam Smith (18th-century economist)
Observed that firms manufactured pins in one of two different ways:
Smith found that the performance of the factories in which workers specialized in only one or a few tasks was much greater than the performance of the factory in which each worker performed all 18 pin-making tasks.

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Smith identified two different types of manufacturing:
The first was similar to crafts-style production, in which each worker was responsible for all the 18 tasks involved in producing a pin.

The other had each worker performing only one or a few of the 18 tasks.

Workers who specialized became much more skilled at their specific tasks.

Job Specialization and the Division of Labor (2 of 2)
Job specialization
Process by which a division of labor occurs as different workers specialize in different tasks over time
Factory lines

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Smith concluded that increasing the level of job specialization—the process by which a division of labor occurs as different workers specialize in tasks—improves efficiency and leads to higher organizational performance.
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F.W. Taylor and Scientific Management
Scientific management
The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency

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Frederick W. Taylor is best known for defining the techniques of scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

Taylor believed that if the amount of time and effort that each worker expends to produce a unit of output (a finished good or service) can be reduced by increasing specialization and the division of labor, the production process will become more efficient.

Taylor’s Four Principles: (Detailed Next Slides)
Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.
Time-and-motion study
Codify the new methods of performing tasks into written rules and standard operating procedures.
Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures.
Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level.

Principles of Scientific Management (1 of 2)
Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.

Codify the new methods of performing tasks into written rules and standard operating procedures.

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Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.

To discover the most efficient method of performing specific tasks, Taylor studied in great detail and measured the ways different workers went about performing their tasks. One of the main tools he used was a time-and-motion study. Taylor sought to find ways to improve each worker’s ability to perform a particular task – for example, by reducing the number of motions workers made to complete the task, by changing the layout of the work area or the type of tools workers used, or by experimenting with tools of different sizes.

Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures.

Once the bet method of performing a particular task was determined, Taylor specified that it should be recorded so this procedure could be taught to all workers performing the same task. These new methods further standardized and simplified jobs–essentially making jobs even more routine and increasing efficiency throughout an organization.

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Principles of Scientific Management (2 of 2)
Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures

Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

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Principle 3: Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures.

To increase specialization, Taylor believed workers had to understand the tasks that were required and be thoroughly trained to perform the tasks at the required level. Workers who could not be trained to this level were to be transferred to a job where they were able to reach the minimum required level of proficiency,

Principle 4: Establish a fair or acceptable level of performance for a task, and then develop a pay system that rewards performance above the acceptable level.

To encourage workers to perform at a high level of efficiency, and to give them an incentive to reveal the most efficient techniques for performing a task, Taylor advocated that workers benefit from any gains in performance They should be paid a bonus and receive some percentage of the performance gains achieved through the more efficient work process.

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Problems with Scientific Management
Many workers experiencing the reorganized work system found that as their performance increased, managers required that they do more work for the same pay.

Scientific management brought many workers more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.

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Managers in many organizations chose to implement the new principles of scientific management selectively. This decision ultimately resulted in problems:
For example, some managers using scientific management obtained performance increases, but rather than sharing performance gains with workers through bonuses as Taylor had advocated, they simply increased the amount of work that each worker was expected to do.
Workers also learned that performance increases often meant fewer jobs and a greater threat of layoffs, because fewer workers were needed.
The specialized, simplified jobs were often monotonous and repetitive, and many workers became dissatisfied with their jobs.
Scientific management brought many workers more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.
These dissatisfied workers resisted attempts to use the new scientific management techniques and at times even withheld their job knowledge from managers to protect their jobs and pay.
Unable to inspire workers to accept the new scientific management techniques for performing tasks, some organizations increased the mechanization of the work process.

From a performance perspective, the combination of the two management practices—(1) achieving the right worker–task specialization and (2) linking people and tasks by the speed of the production line—produces the huge cost savings and dramatic output increases that occur in large organized work settings.
 

The Gilbreths
Followers of Taylor: Frank and Lillian Gilbreth
Analyze every individual action necessary to perform a particular task and break it into each of its component actions.
Find better ways to perform each component action.
Reorganize each of the component actions so that the action as a whole could be performed more efficiently at less cost in time and effort.

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Frank Gilbreth and Lillian Gilbreth refined Taylor’s analysis of work movements and made many contributions to time-and-motion study.

Their aims were to:
Analyze every individual action necessary to perform a particular task and break it into each of its component actions.
Find better ways to perform each component action.
Reorganize each of the component actions so that the action as a whole could be performed more efficiently—at less cost in time and effort.

The Gilbreths became increasingly interested in the study of fatigue.

They studied how physical characteristics of the workplace contribute to job stress that often leads to fatigue and, thus, poor performance.

They isolated factors that result in worker fatigue, such as lighting, heating, the color of walls, and the design of tools and machines.

In workshops and factories, the work of the Gilbreths, Taylor, and many others had a major effect on the practice of management.

In comparison with the old crafts system, jobs in the new system were more repetitive, boring, and monotonous as a result of the application of scientific management principles, and workers became increasingly dissatisfied.

Frequently the management of work settings became a game between workers and managers: Managers tried to initiate work practices to increase performance, and, to protect their own well-being, workers tried to hide the true potential efficiency of the work setting.

Administrative Management Theory (1 of 5)
Administrative management
The study of how to create an organizational structure and control system that leads to high efficiency and effectiveness
Max Weber
Henri Fayol

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Organizational structure – system of task and authority relationships that control how employees use resources to achieve the organization’s goals

Administrative Management Theory (2 of 5)
Max Weber
Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness

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Two of the most influential early views regarding the creation of efficient systems of organizational administration were developed in Europe:
Max Weber, a German sociology professor, developed one theory.
Henri Fayol, the French manager who developed the model of management introduced in Chapter 1 developed the other. (Planning, Organizing, Leading, Controlling).

Max Weber (1864 – 1920) To help Germany manage its growing industrial enterprises while it was striving to become a world power, Weber developed the principles of bureaucracy – a formal system of organization and administration designed to ensure efficiency and effectiveness.

A bureaucratic system of administration is based on the 5 principles summarized in Figure 2.2.

Administrative Management Theory (3 of 5)
Authority
The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources
Hierarchy in the FBI, CIA

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Weber’s Principle 4: Authority can be exercised effectively in an organization when positions are arranged hierarchically so employees know whom to report to and who reports to them.

In the military, FBI, or CIA it is important in dealing with sensitive issues that subordinates are held accountable for their actions.
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Figure 2.2 Weber’s Principles of Bureaucracy

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A manager’s formal authority derives from the position he holds in the organization.

Authority: the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.
Authority gives manager the right to direct and control their subordinates’ behavior to achieve organizational goals.
Obedience is owed to a manager not because of any personal qualities – such as personality, wealth, or social status- but because the manager occupies a position that is associated with a certain level of authority and responsibility.

People should occupy positions because of their performance, not because of their social standing or personal contacts.

Often ignored, some organizations and industries are still affected by social networks in which personal contacts and relations, not job-related skills, influence hiring and promotional decisions.

The extent of each position’s formal authority and task responsibilities and its relationship to other positions should be clearly specified.

Managers and workers know what is expected of them and what to expect from each other; the organization can hold all its employees strictly accountable for their actions.

Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.

Important in the armed forces, FBI, CIA and other organizations that deal with sensitive issues involving possible major repercussions.

Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .
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Administrative Management Theory (4 of 5)
Rules
Formal written instructions that specify actions to be taken under different circumstances to achieve specific goals
If ”A” happens, then do “B”; at the end of the workday, employees are to leave their machines in good order.
Standard operating procedures (SOPs)
Specific sets of written instructions about how to perform a certain aspect of a task
Which parts of a machine must be oiled or replaced

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A rule might state that at the end of the workday employees are to leave their machines in good order, and a set of SOPs would specify exactly how they should do so, itemizing which machine parts must be oiled or replaced.

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Administrative Management Theory (5 of 5)
Norms
Unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or an organization
Restaurant waiters should help each other if time permits.

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Rules, SOPs, and norms provide behavioral guidelines that increase the performance of a bureaucratic system, because they specify the best ways to accomplish organizational tasks.

Weber believed organizations that implement all 5 principles establish a bureaucratic system that improves organizational performance. If bureaucracies are not managed well, however, many problems can result. Sometimes managers allow rules and SOPs, “bureaucratic red tape” to become so cumbersome that decision-making is slow and inefficient and organizations cannot change.

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Table 2.1 Fayol’s Principles of Management (1 of 2)

Principle Description

Division of labor Job specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers’ boredom.

Authority and responsibility Managers have the right to give orders and the power to exhort subordinates for obedience.

Unity of command An employee should receive orders from only one superior.

Line of authority The length of the chain of command that extends from the top to the bottom of an organization should be limited.

Centralization Authority should not be concentrated at the top of the chain of command.

Unity of direction The organization should have a single plan of action to guide managers and workers.

Equity All organizational members are entitled to be treated with justice and respect.

Order The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities.

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Working at the same time as Weber, but independently, Fayol identified 14 principles that he believed essential to increase the efficiency of the management process. These principles remain the bedrock on which much of recent management theory and research is based.

Division of labor: Job specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers’ boredom. Workers are given more job duties or encouraged to assume more responsibility for work outcomes. Publix bakery and deli employees focus on creating cakes, pies and ready-to-eat meals, creating the opportunity for employees to develop expertise they might not otherwise gain.

Authority and responsibility: Managers have the right to give orders and the power to exhort subordinates for obedience–recognizes the INFORMAL authority that derives from personal expertise, technical knowledge, moral worth, and the ability to lead and to generate commitment from subordinates.

Unity of command: An employee should receive orders from only one superior; DUAL COMMAND should be avoided except in exceptional circumstances. Dual command confuses subordinates, undermines order and discipline, and creates havoc within the formal hierarchy of authority.

Line of authority: The length of the chain of command that extends from the top to the bottom of an organization should be limited. Limit the number of levels in the managerial hierarchy. The more levels in the hierarchy, the longer communication takes between managers at the top and bottom and the slower the pace of planning and organizing.

Centralization: Authority should not be concentrated at the top of the chain of command. It makes it difficult for the people who are closest to problems and issues to respond in a timely manner and reduces motivation of the middle and first-line managers.

Unity of direction: The organization should have a single plan of action to guide managers and workers.

Equity: All organizational members are entitled to be treated with justice and respect.

Order: The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities.

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Table 2.1 Fayol’s Principles of Management (2 of 2)

Principle Description

Initiative Managers should allow employees to be innovative and creative.

Discipline Managers need to create a workforce that strives to achieve organizational goals.

Remuneration of personnel The system that managers use to reward employees should be equitable for both employees and the organization.

Stability of tenure of personnel Long-term employees develop skills that can improve organizational efficiency.

Subordination of individual interests to the common interest Employees should understand how their performance affects the performance of the whole organization.

Esprit de corps Managers should encourage the development of shared feelings of camaraderie, enthusiasm, or devotion to a common cause.

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Initiative: Managers should allow employees to be innovative and creative.

Discipline: Managers need to create a workforce that strives to achieve organizational goals.

Remuneration of personnel: The system that managers use to reward employees should be equitable for both employees and the organization.

Stability of tenure of personnel: Long-term employees develop skills that can improve organizational efficiency. – Companies need to reduce turnover

Subordination of individual interests to the common interest: Employees should understand how their performance affects the performance of the whole organization.

Esprit de corps: Managers should encourage the development of shared feelings of comradeship, enthusiasm, or devotion to a common cause. Today the term Organizational Culture is used (discussed chapter 3).

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Behavioral Management Theory (1 of 2)
Behavioral management
The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals

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Because the writings of Weber and Fayol were not translated into English and published in the US until the late 1940s, American management theorists in the first half of the 20th century were unaware of the contributions of these European pioneers. American management theorists began where Taylor and his followers left off. Although their writings were different, these theorists all espoused a theme that focused on behavioral management.

Behavioral Management Theory (2 of 2)
Mary Parker Follett
Concerned that Taylor ignored the human side of the organization
Suggested workers help in analyzing their jobs
Suggested if workers have relevant knowledge of the task they should
be in control of the work process

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Follett pointed out that management often overlooks the multitude of ways in which employees can contribute to the organization.

She argued that because workers know the most about their jobs, they should be involved in job analysis, and managers should allow them to participate in the work development process.

She advocated “cross-functioning”: members of different departments working together in cross-departmental teams to accomplish tasks.

Follett proposed that knowledge and expertise, and not managers’ formal authority, should decide who will lead at any particular moment — a horizontal view of power and authority.

The Hawthorne Studies and
Human Relations (1 of 5)
Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932
Worker productivity measured at various levels of light illumination

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Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

During a two-year study of a small group of female workers, the researchers again observed that productivity increased over time, but the increases could not be solely attributed to the effects of changes in the work setting.

The Hawthorne Studies and
Human Relations (2 of 5)
Hawthorne effect
Workers’ performance affected by their attitudes about their managers
Led to the human relations movement

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The researchers discovered that their presence was affecting the results, because the workers enjoyed receiving attention and being the subject of study and were willing to cooperate with the researchers to produce the results they believed the researchers desired.

This particular effect became known as the Hawthorne effect.

The Hawthorne Studies and
Human Relations (3 of 5)
Human relations movement
A management approach that advocates the idea that supervisors should receive behavioral training to manage subordinates in ways that elicit their cooperation and increase their productivity

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The study, or series of experiments, by Elton Mayo and Roethlisberger
Ratebusters
Chislers
See following Slide Notes.

The Hawthorne Studies and
Human Relations (4 of 5)
Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task
Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

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The importance of behavioral or human relations training became even clearer to its supporters after the bank wiring room experiments.

In a study of workers making telephone switching equipment, researchers discovered that workers, as a group, had deliberately adopted a norm of output restriction to protect their jobs.
Workers who violated this informal production norm were subjected to sanctions by other group members.
Those who violated group performance norms and performed above the norm were called “ratebusters.” Those who performed below the norm were called “chiselers.”
A works group’s influence over output can be as great as the supervisor’s influence.
Supervisors should be trained to behave in ways that gain the goodwill and cooperation of workers so that supervisors, not workers, control the level of work group performance.

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The Hawthorne Studies and
Human Relations (5 of 5)
Informal organization
The system of behavioral rules and norms that emerge in a group
Organizational behavior
The study of the factors that have an impact on how individuals and groups respond to and act in organizations

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Managers must understand the workings of the informal organization when they try to manage or change behavior in organizations.

The increasing interest in the area of management known as organizational behavior dates from these early studies.

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Theory X and Theory Y (1 of 2)
Douglas McGregor proposed two different sets of assumptions about workers.
Theory X
A set of negative assumptions about workers that leads to the conclusion that a manager’s task is to supervise workers closely and control their behavior
Assumes the average worker is lazy, dislikes work, and will try to do as little as possible

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Douglas McGregor proposed two sets of assumptions about how work attitudes and behaviors not only dominate the way managers think but also affect how they behave in organizations. McGregor named these two contrasting sets of assumptions Theory X and Theory Y (Figure 2.3).
 
Theory X
According to the assumptions of Theory X, the average worker is lazy, dislikes work, and will try to do as little as possible. To keep worker’s performance at a high level, the manager must supervise workers closely and control their behavior by means of “the carrot and stick”—rewards and punishments.

Managers who accept the assumptions of Theory X design and shape the work setting to maximize their control over workers’ behaviors and minimize workers’ control over the pace of work.

Theory X and Theory Y (2 of 2)
Theory Y
A set of positive assumptions about workers that leads to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction
Assumes workers are not inherently lazy, do not naturally dislike work, and will do what is good for the organization

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Theory Y assumes that workers are not inherently lazy, do not naturally dislike work, and if given the opportunity, will do what is good for the organization. The characteristics of the work setting determine whether workers consider work to be a source of satisfaction or punishment, and managers do not need to closely control workers’ behavior to make them perform at a high level because workers exercise self-control when they are committed to organizational goals.

Managers who believe workers are motivated to help the organization reach its goals can …

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