chapter 2 learning from the history of management thought mgt 301
TRANSCRIPT
Chapter 2
Learning from the History of Management Thought
MGT 301MGT 301
Learning from the History ofManagement Thought
Learning Goals
1. Describe the three branches of the traditional viewpoint of management:
2. Explain the behavioral viewpoint’s contribution to management
Bureaucratic, Scientific, andAdministrative
Learning Goals (cont’d)
3. Describe how managers can use systems and quantitative techniques to improve employee performance
4. State the two major components of thecontingency viewpoint
5. Explain the impact of the need for quality on management practices
Goals:Efficiency
Consistency
Administrative Management
Bureaucratic Management
ScientificManagement
Traditional ViewpointTraditional Viewpoint
Behavioral ViewpointBehavioral Viewpoint
Systems ViewpointSystems Viewpoint
Contingency ViewpointContingency Viewpoint
Quality ViewpointQuality Viewpoint
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Bureaucratic Management
Max Weber
Bureaucratic Management
Use of rules, hierarchy, a clear division of labor, and detailed procedures to guide employees’ behaviors Seven characteristics
Rules—formal guidelines for the behavior of employees on the job
Impersonality—employees are evaluated according to rules and objective data
Division of Labor—splitting work into specialized positions
Caliper Technologies CorporationCaliper Technologies Corporation(adapted from Figure 2.2)(adapted from Figure 2.2)
CEO
Director ofQualityControl
ChiefFinancialOfficer
VP ofOperations
VP ofSales &
Marketing
VP ofResearch
VP ofProduct
Development
VP ofCorporate
Development
PlantManager
USA
Controller
PlantManagerGermany
Manager ofChemical
Engineering
Manager ofChip
Manufacturing
Manager ofEngineering& Software
Directorof
Manufacturing
Directorof
Manufacturing
Employees Employees
Hierarchical Structure—ranks jobs according to the amount of authority in each job
Authority—who has the right to make decisions of varying importance at different organizational levels
Traditional authorityCharismatic authorityRational, legal authority
Lifelong Career Commitment—both the employee and the organization view themselves committed to each other over the working life of the employee
Rationality—the use of the most efficient means available to accomplish a goal
“Each job has a policy manual detailing the rules that a person needs to follow to ensure efficiency. Drivers are told to walk to a customer’s door at a brisk pace of 3 feet per second, carrying the package in the right hand and clipboard in the left. They should knock on the door so as not to lose valuable seconds searching for a doorbell.”
Michael EskewChairman and CEO, UPS
Snapshot
LOW MIDRANGE HIGH
DreamWorks Sony IRS
R&D Thinktank 7-11 McDonalds
MP3 PepsiCo State MotorVehicle
Registration
Bureaucratic Continuum
Potential Benefits of Bureaucracy Efficiency Consistency Functions best when routine tasks are performed Performance based on objective criteria Most effective when
Large amounts of standard information have to be processed The needs of the customer are known and are unlikely to
change The technology is routine and stable (e.g., mass production) The organization has to coordinate the activities of employees
in order to deliver a standardized service/product to the customer
Potential Costs of Bureaucracy
Rigid rulesand
red tape
Protection of authority Slow decision making
Incompatible withchanging
technology
Incompatible with21st century workers’
values for freedom and participative
management
Scientific Management
Frederick W. Taylor
The father of Scientific Management – the 1st Efficiency Expert.
A philosophy and set of management practices that are based on fact and observation, not on guesswork
Scientific Management
Believed increased productivity depended on finding ways to make workers more efficient
Used time-and-motion studies to analyze work flows, supervisory techniques, and worker fatigue
Used functional foremanship, a division of labor that assigned eight foremen to each work area
Assumed workers motivated by money $$
• He was interested in machines -- apprenticeship in industry: Midvale Steel• Shocked by how inefficient his fellow workers were• timed workers with stopwatches• break down job into parts, make parts efficient• figure out how to hire the right worker for the job • give the worker appropriate training
Taylor’s Work?
• introduced incentive pay plans (workers were assumed to be motivated only by money). • Believed would lead to cooperation--management and worker • Studied design of shovels and introduced a better design at Bethlehem Steel Works, reducing the number of people shoveling from 500 to 140
Taylor’s Work? Contd.
Scientific Management
The Gilbreths Frank Gilbreth used motion pictures
to analyze workers’ motions Lillian Gilbreth championed protecting
workers from unsafe working conditions
Henry Gantt Focused on control systems for
production scheduling (Gantt Chart)
Frank and Lillian Gilbreth
refined Taylor’s methods and suggested 1. Breaking down each action into individual compone
nts. 2. Find better ways to perform the action. 3. Reorganize each action to be more efficient.
Problems associated with Scientific Management Managers often gave attention only to increasing output They did not allow workers to share in the benefits of inc
reased output. Specialized jobs became very boring & dull. Workers ended up distrusting Scientific Management.
Henry L. GanttHenry L. Gantt How to increase worker’s efficiency?How to increase worker’s efficiency?““The essential difference between the best system The essential difference between the best system
of today and those of the past are the manner in of today and those of the past are the manner in which which the tasks are scheduledthe tasks are scheduled, and , and the manner the manner
in which their performance is rewardedin which their performance is rewarded””
Scheduling InnovationScheduling Innovation Gantt Chart – scheduling summary of work Gantt Chart – scheduling summary of work
Rewarding InnovationRewarding Innovation Bonus in addition to the piece rate if they exceeded their Bonus in addition to the piece rate if they exceeded their
daily production quotadaily production quota On time = Bonus, Good Performance = RewardOn time = Bonus, Good Performance = Reward
Insights from Scientific Management
Many companies have used scientific management principles to improve efficiency, employee selection and training
Scientific management failed to recognize the social needs of workers and the importance of working conditions and job satisfaction
David BerbauerCEO, Walgreens
“Walgreens is constantly pushing to drive costs down. It pioneered the application of satellite communications and computer technology and linked these to increase store efficiency. By using tried-and-proven management concepts, each of its 6,100 stores [is] able to process around 280 prescriptions a day and beat Wal-Mart by 27 cents and CVS by 94 cents on each prescription.”
Snapshot
Administrative Management: Overview
Focuses on the manager and basic managerial functions of planning, organizing, controlling and leading
Unity of Command Principle: an employee should report to only one manager
Authority Principle: managers have the right to give orders to get things done
Fayol’s Principles of Effective Fayol’s Principles of Effective ManagementManagement
Division of Work:Division of Work: allows for job specialization. allows for job specialization. Work should be divided among individuals and groups.Work should be divided among individuals and groups.
Authority and ResponsibilityAuthority and Responsibility Authority right to give ordersAuthority right to give orders Responsibility involves being answerableResponsibility involves being answerable
Whoever assumes authority assumes responsibilityWhoever assumes authority assumes responsibility DisciplineDiscipline
Common efforts of workers. PenaltiesCommon efforts of workers. Penalties Unity of CommandUnity of Command
Employees should have only one boss.Employees should have only one boss.
Unity of DirectionUnity of Direction A single plan of action to guide the organization.A single plan of action to guide the organization.
Subordination of individual interests to the general Subordination of individual interests to the general interests of organizationinterests of organization
RemunerationRemuneration An equitable uniform payment system that motivates An equitable uniform payment system that motivates
contributes to organizational success.contributes to organizational success. CentralizationCentralization
The degree to which authority rests at the top of the The degree to which authority rests at the top of the organization.organization.
Scalar ChainScalar Chain Chainlike authority scale.Chainlike authority scale. Most vs. least authorityMost vs. least authority
OrderOrder The arrangement of employees where they will be of The arrangement of employees where they will be of
the most value to the organization and to provide the most value to the organization and to provide career opportunities.career opportunities.
EquityEquity The provision of justice and the fair and impartial The provision of justice and the fair and impartial
treatment of all employees.treatment of all employees. Stability of Tenure of PersonnelStability of Tenure of Personnel
Long-term employment is important for the Long-term employment is important for the development of skills that improve the organization’s development of skills that improve the organization’s performance. Subordination of Individual Interest to performance. Subordination of Individual Interest to the Common Interestthe Common Interest
The interest of the organization takes precedence The interest of the organization takes precedence over that of the individual employee.over that of the individual employee.
InitiativeInitiative The fostering of creativity and innovation by The fostering of creativity and innovation by
encouraging employees to act on their own.encouraging employees to act on their own. Esprit de corpsEsprit de corps
Harmony, general good feeling among employees, Harmony, general good feeling among employees, shared enthusiasm, foster devotion to the common shared enthusiasm, foster devotion to the common cause (organization).cause (organization).
Behavioral Viewpoint: Overview
Focuses on dealing effectively with the human aspects of organizations
Started in the 1930’s
Emphasis on working conditions
Workers wanted respect
Workers formed unions to bargain with management
Mary Parker Follett’s Contributions
Managers need to communicate with
workers Workers should
participate in solving
problems
Managers need to establish good working relationships with employees
Goal:Improve
Coordination
“Managers need to have a common touch and to be a team leader and not adrill sergeant. When their people shine,
they shine.”
Vickie Yoke, Senior Vice President, Alcatel
Snapshot
Chester Barnard’s Contributions
People should continuously communicateand cooperate with one another
Acceptance theory of authority holds that employees have free wills and, thus, choose whether to follow management’s orders. Employees will follow orders if they:
Understand what is required Believe the orders are consistent with
organization goals See positive benefits to themselves in
carrying out the orders
The Hawthorne StudiesThe Hawthorne Studies Studies of how characteristics of the work setting Studies of how characteristics of the work setting
affected worker fatigue and performance at the affected worker fatigue and performance at the Hawthorne Works of the Western Electric Hawthorne Works of the Western Electric Company from 1924-1932.Company from 1924-1932. Worker productivity was measured at various Worker productivity was measured at various
levels of light illumination.levels of light illumination. Researchers found that regardless of whether Researchers found that regardless of whether
the light levels were raised or lowered, worker the light levels were raised or lowered, worker productivity increased.productivity increased.
The Hawthorne StudiesThe Hawthorne Studies
The Relay Assembly Test Room ExperimentsThe Relay Assembly Test Room Experiments
Working conditions and productivityWorking conditions and productivity
The Bank Wiring Observation Room ExperimentThe Bank Wiring Observation Room Experiment
Analyze the social relationships in a work groupAnalyze the social relationships in a work group
The Hawthorne StudiesThe Hawthorne Studies
Employees are motivated by social
needs and association with others
Employees’ performance is more a result of peer
pressure than management’s incentives
and rules
Managers need to involve subordinates in coordinating their
work to improve efficiency
Employees want to participate in decisions
that affect them
Lessons from the Hawthrone Lessons from the Hawthrone Studies Studies
Behavioral ViewpointBehavioral Viewpoint
Snapshot
“Teamwork is one of the most beautifulexperiences in life. Teamwork is ourcore value and a primary way that theContainer Store enriches the quality
of employees’ work life.”
Kip Tindell, President, The Container Store
System: an association of interrelated and interdependent parts
Systems viewpoint: an approach to solving problems by diagnosing them within a framework of transformation processes, outputs, and feedback
Systems Viewpoint: Systems Viewpoint: Systems ConceptsSystems Concepts
InputsHuman, physical,
financial, and information
resources
TransformationProcess
OutputsProducts
andservices
Feedback Loops
Basic Systems View of Basic Systems View of OrganizationsOrganizations
Closed system: limits its interactions with the environment (e.g., stamping department in GM assembly plant)
Open system: interacts with the external environment (e.g., marketing department)
System TypesSystem Types
Mathematical models are used
to simulate changes
Computers are essential
Primary focus is on decision
making
Alternatives are based on
economic criteria
Quantitative TechniquesQuantitative Techniques
Lead to creation of
blogs
Enables managers to
simulate conditions
Emphasis on objective criteria
for decision making
Focus on planning
The Contingency ApproachThe Contingency Approach
What managers do in practice depends on a given set of circumstances – a situation.
Management practices should be consistent with the requirements of the external environment, the technology used to make a product or provide a service, and capabilities of the people who work for the organization
Uses concepts of the traditional, behavioral and system viewpoints
External environment—stable or changing
Technology—simple or complex
People—ways they are similar and different from each other
Contingency VariablesContingency Variables
Behavioral ViewpointHow managers influence others; Informal group Cooperation among employees Employee’s social needs
Systems ViewpointHow the parts fit together.
Inputs Transformations Outputs
Traditional ViewpointWhat managers do:
Plan Organize Lead Control
Contingency ViewpointManagers’ use of other viewpoints to solve problems involving:
External environment Technology Individuals
Contingency Viewpoint: Draws onContingency Viewpoint: Draws onOther Viewpoints, As NecessaryOther Viewpoints, As Necessary
Quality: how well a product or service does what it is supposed to do—how closely and reliably it satisfies the specifications to which it is built or provided
Total Quality Management (TQM): a philosophy that makes quality values the driving force behind leadership, design, planning, and improvement initiatives
Inputs or raw materials
Operations
Outputs
Measuring by variable or a product’s characteristicsMeasuring by attribute or a product’s acceptable/
unacceptable characteristics
Statistical process controlQuality of a process (e.g., sigma)
Quality Control ProcessQuality Control Process
Lower Costs and Higher
Market Share
DecreasedProductLiability Quality
PositiveCompany
Image
Learning from the Quality Learning from the Quality ViewpointViewpoint