Transcript The Importance of Theory and History • Why Theory? – Theory: a conceptual framework for organizing knowledge and providing a blueprint for action. – Management.

The Importance of
Theory and History
• Why Theory?
– Theory: a conceptual framework for organizing
knowledge and providing a blueprint for action.
– Management theories are grounded in reality.
– Managers develop their own theories about how
they should run their organizations.
• Why History?
– Understanding historical developments in
management aids managers in the development
of management practices and in avoiding the
mistakes of others.
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Theories of Management
• Scientific
• Administrative
• Behavioral
• Quantitative
• Systems
• Contingency
Book Organization
•Classical - Scientific/Administrative
•Behavioral - Human Relations/Organizational Behavior
•Quantitative - Management Science/Operations Management
•Integrative - Systems/Contingency
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Scientific Management
– Concerned with improving the performance of
individual workers (i.e., efficiency).
– Grew out of the industrial revolution’s labor
shortage at the beginning of the twentieth century.
• Frederick Taylor (1856–1915)
– “Father of Scientific Management.”
– Replaced rule-of-thumb methods with
scientifically-based work methods to eliminate
“soldiering.”
– Believed in selecting, training, teaching, and
developing workers.
– Used time studies, standards planning, exception
rule, slide-rules, instruction cards, and piece-work
pay systems to control and motivate employees.
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• Other Scientific Management Pioneers
– Frank (1868-1924)and Lillian (1878-1972) Gilbreth
• Husband and wife team of industrial engineer
• Used motion pictures to study movements
• Reduced the number of movements in bricklaying,
resulting in increased output of 200%.
• Applied their ideas to raising their 12 childrendocumented their experience in the book and original
movie-Cheaper by the Dozen
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Administrative Management
Focuses on managing the total organization rather than individuals.
Henri Fayol
• Helped to systematize the practice of management
(14 Principles of Management)
• Was first to identify the specific management
functions of planning, organizing, leading, and
controlling.
Max Weber
•His theory of bureaucracy is based on a rational set
of guidelines for structuring organizations.
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Fayol’s 14 Principles of Management
•Specialization of labor
•Authority
•Discipline
•Unity of command
•Unity of direction
•Subordination of
Individual Interests
Specializing encourages continuous improvement in skills
and the development of improvements in methods.
The right to give orders and the power to exact obedience.
No slacking, bending of rules. The workers should be
obedient and respectful of the organization.
Each employee has one and only one boss.
A single mind generates a single plan and all play their part
in that plan.
When at work, only work things should
be pursued or thought about
.
•Remuneration
Employees receive fair payment for services, not what the
company can get away with.
•Centralization
Consolidation of management functions. Decisions are made
from the top.
•Line of Authority
Formal chain of command running from top to bottom of the
organization, like military
•Order
All materials and personnel have a prescribed place, and
they must remain there.
•Equity
Equality of treatment (but not necessarily identical treatment)
•Personnel Tenure
Limited turnover of personnel. Lifetime employment for good
workers.
•Initiative
Thinking out a plan and do what it takes to make it happen.
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•Esprit
corps
Harmony,
cohesion among personnel.
Weber’s Bureaucracy
Division of Labor
Jobs broken down into simple, routine, and well-defined tasks
Authority Hierarchy
Positions organized in a hierarchy with clear chain of command
Formal Selection
People selected for jobs based on technical qualifications
Formal Rules and Regulations
System of written rules and standard operating procedures
Impersonality
Uniform application of rules and controls, not according to
personalities
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Behavioral Management
– Emphasized individual attitudes and behaviors,
and group processes.
– Recognized the importance of behavioral
processes in the workplace.
Human Relations Movement
- Early Movement, Simplistic
- Maslow’s Hierarchy of Needs, McGregor’s Theory X & Y
Organizational Behavior
-Current Movement, Broader
-Looks at Individual and Group Behavior
Goal is to Explain, Predict and Influence Behavior
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The Hawthorne Studies
Conducted by Elton Mayo and associates at
Western Electric (1927–1935)
– Illumination study of changes in workplace lighting
unexpectedly affected both the control group and
the experimental group of production employees.
• Group study—the effects of a piecework incentive plan
on production workers.
– Workers established informal levels of acceptable
individual output; over-producing workers (“rate busters”)
and under-producing workers (“chiselers”).
• Interview program
– Confirmed the importance of human behavior in the
workplace.
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Quantitative Management
– Focuses on decision making, economic
effectiveness, mathematical models, and the use
of computers to solve quantitative problems.
• Management Science
• Operations Management
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Systems Theory
• Systems Perspective
– A system is an interrelated set of elements
functioning as a whole.
• Open system
– An organization that interacts with its external
environment.
• Closed system
– An organization that does not interact with its
environment.
• Subsystems
– The importance of subsystems is due to their
interdependence on each other within the
organization.
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Systems Perspective
• Synergy
– Subsystems are more successful working together
in a cooperative and coordinated fashion than
working alone.
– The whole system (subsystems working together
as one system) is more productive and efficient
than the sum of its parts.
• Entropy
– A normal process in which an organizational
system declines due to failing to adjust to change
in its environment
– Entropy can be avoided and the organization reenergized through organizational change and
renewal.
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The Contingency Perspective
The Contingency Perspective
– Suggests that each organization is unique.
– The appropriate managerial behavior for
managing an organization depends (is contingent)
on the current situation in the organization.
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Contemporary Management
Issues and Challenges
• Contemporary Management Challenges
– An erratic economy that limits growth
– Management of an increasingly diverse workforce
– Employee privacy
– Technology that promotes telecommuting
– The role of the Internet in business strategy
– Operating and competing in diverse global markets
– Ethics in corporate governance and social responsibility
– Quality as the basis for competition
– The shift toward a service economy
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