1. Chapter 2 The Management Movement

2. CHAPTER OVERVIEW The Evolution of Management The Evolution of Management The Industrial RevolutionThe Industrial Revolution New Challenges of ManagementNew Challenges of Management The Development of Modern Management The Development of Modern Management Empowering EmployeesEmpowering Employees The Emphasis on Quality TeamworkThe Emphasis on Quality Teamwork Japanese Management PracticesJapanese Management Practices

3. Essential Questions What if there were no teachers? What would a classroom look like? What if there were no teachers? What would a classroom look like? What if there were no managers? What would a workplace look like? What if there were no managers? What would a workplace look like? What types of factors affect your ability to be productive? What types of factors affect your ability to be productive? How would you feel if an employer told you, “You are lazy and need to be told what to do?” How would you feel if an employer told you, “You are lazy and need to be told what to do?” Do you feel there are advantages to working in teams? Do you feel there are advantages to working in teams?

4. Section 1 The Evolution of Management

5. THE EVOLUTION OF MANAGEMENT The Industrial Revolution The Industrial Revolution The Industrial Revolution refers to the period during which a country develops an industrial economy.The Industrial Revolution refers to the period during which a country develops an industrial economy. In the US, the Industrial Revolution began about 1860, just before the Civil War.In the US, the Industrial Revolution began about 1860, just before the Civil War.

6. Causes of the Industrial Revolution Changes in technology, communication, and transportation made the IR possible. Changes in technology, communication, and transportation made the IR possible. steam powersteam power telegraph and cable linestelegraph and cable lines invention of telephoneinvention of telephone construction of canals and roadsconstruction of canals and roads improvements in the design of steamshipsimprovements in the design of steamships

7. Captains of Industry John D. Rockefeller (oil) John D. Rockefeller (oil) James B. Duke (tobacco) James B. Duke (tobacco) Andrew Carnegie (steel) Andrew Carnegie (steel) J.P. Morgan (banking) J.P. Morgan (banking) Cornelius Vanderbilt (steamships and railroads) Cornelius Vanderbilt (steamships and railroads) Captains often pursued profit and self- interest above all else Captains often pursued profit and self- interest above all else Drove competitors out of business and created giant companies that maintained monopolies in their industries Drove competitors out of business and created giant companies that maintained monopolies in their industries

8. Creation of Monopolies A monopoly occurs when one party maintains total control over a type of industry A monopoly occurs when one party maintains total control over a type of industry John D. Rockefeller John D. Rockefeller lowered the prices he charged for oil in order to force his competitors to sell out of join forces with himlowered the prices he charged for oil in order to force his competitors to sell out of join forces with him He combined dozens of companies he owned into a single trust, controlling more than 90 percent of the countries refining capacity and pipelines.He combined dozens of companies he owned into a single trust, controlling more than 90 percent of the countries refining capacity and pipelines. A trust is a giant industrial monopoly A trust is a giant industrial monopoly

9. The Break-Up of the Trusts By 1870 government decided to begin regulating business. By 1870 government decided to begin regulating business. The Interstate Commerce Act (1887) The Interstate Commerce Act (1887) first major piece of regulatory legislationfirst major piece of regulatory legislation forced railroads to publish rates and forbade them to change rates without notifying the publicforced railroads to publish rates and forbade them to change rates without notifying the public The Sherman Act (1890) The Sherman Act (1890) made it illegal for companies to create monopoliesmade it illegal for companies to create monopolies intent was to restore competitionintent was to restore competition

10. New Challenges for Management Giant companies employed thousands of people and distributed products all over the country. Giant companies employed thousands of people and distributed products all over the country. The specialized tasks of the workers needed to be coordinated. The specialized tasks of the workers needed to be coordinated.

11. Frederick W. Taylor Scientific Management Tried to figure out the “one best way” to perform a particular task, using a stopwatch to determine which work method was the most efficient Tried to figure out the “one best way” to perform a particular task, using a stopwatch to determine which work method was the most efficient These time and motion studies, enabled him to come up with scientific management principles These time and motion studies, enabled him to come up with scientific management principles

12. Scientific Management Scientific management seeks to increase productivity and make work easier by carefully studying work procedures and determining the best methods for performing particular tasks Scientific management seeks to increase productivity and make work easier by carefully studying work procedures and determining the best methods for performing particular tasks

13. The Hawthorne Studies of Productivity Researchers began to look at the relationship between working conditions and productivity Researchers began to look at the relationship between working conditions and productivity Conducted a series of experiments at the Hawthorne plant of Western Electric in Cicero, Illinois Conducted a series of experiments at the Hawthorne plant of Western Electric in Cicero, Illinois Lowered lighting – expected productivity to fall Lowered lighting – expected productivity to fall No matter what variables they changed (lighting, rest periods, work hours, etc.), productivity increased! No matter what variables they changed (lighting, rest periods, work hours, etc.), productivity increased!

14. Hawthorne Effect Why??? Why??? Workers worked harder when they receive attention!Workers worked harder when they receive attention! This phenomenon, in which change of any kind increases productivity, has since been known as the “Hawthorne effect” This phenomenon, in which change of any kind increases productivity, has since been known as the “Hawthorne effect” How would the “Hawthorne effect” influence the way a manager manages? How would the “Hawthorne effect” influence the way a manager manages?

15. Abraham H. Maslow Hierarchy of Needs Psychologist who developed a theory of motivation which had significant impact on management Psychologist who developed a theory of motivation which had significant impact on management 5 basic types of needs 5 basic types of needs Physical or physiologicalPhysical or physiological Security or safetySecurity or safety Social or loveSocial or love Status or egoStatus or ego Self-fulfillment or self-actualizationSelf-fulfillment or self-actualization Why does Maslow’s hierarchy of needs have important implications for business managers? Why does Maslow’s hierarchy of needs have important implications for business managers?

17. Assignments Using Microsoft Publisher or Word, create a pyramid representing Maslow’s Hierarchy of Needs that depicts the needs you feel your employees would have within each of the five categories. Using Microsoft Publisher or Word, create a pyramid representing Maslow’s Hierarchy of Needs that depicts the needs you feel your employees would have within each of the five categories. Be creative with your design (use graphics, colors, “fun” fonts) Be creative with your design (use graphics, colors, “fun” fonts) Print your final copy and turn in! Print your final copy and turn in! 2.1 Review page 40 #s 1-4 and critical thinking # 2 2.1 Review page 40 #s 1-4 and critical thinking # 2

18. Section 2 The Development of Modern Management

19. Empowering Employees Management styles identified by MIT Professor Douglas McGregor in the 1960s Management styles identified by MIT Professor Douglas McGregor in the 1960s Theory X assumes that people are basically lazy and will avoid working if they can Theory X assumes that people are basically lazy and will avoid working if they can What would this look like?What would this look like? Theory Y assumes that people find satisfaction in their work Theory Y assumes that people find satisfaction in their work What would this look like?What would this look like?

20. Comparing Theory X and Theory Y Theory X managers impose strict rules managers impose strict rules make sure all important decisions are made only by them make sure all important decisions are made only by them Theory Y managers believe that people will work productively if put in the right environment managers believe that people will work productively if put in the right environment have high expectations of their employees have high expectations of their employees grant considerable freedom grant considerable freedom let employees make important decisions let employees make important decisions

21. Theory X and Theory Y Most companies combine elements of both theories and motivation Most companies combine elements of both theories and motivation managers allow employees freedom in some aspects and control their actions in othersmanagers allow employees freedom in some aspects and control their actions in others

22. Centralization versus Decentralization Centralization is the concentration of power among a few key decision makers Centralization is the concentration of power among a few key decision makers Henry FordHenry Ford Decentralization is the process by which decisions are made by managers at various levels within an organization Decentralization is the process by which decisions are made by managers at various levels within an organization General MotorsGeneral Motors

23. The Emphasis on Quality and Teamwork W. Edwards Deming W. Edwards Deming “Demings 14 Points” emphasized the maintenance of high quality standards“Demings 14 Points” emphasized the maintenance of high quality standards Mathematically based approachMathematically based approach Ensure products companies produce are not defectiveEnsure products companies produce are not defective

24. Demings 14 Points 1. Create consistent purpose to remain competitive 2. Adopt a new philosophy – no more mistakes or defects 3. Stop depending on mass inspection 4. Consider quality as well as price in awarding business 5. Constantly improve the system of production and service 6. Institute a vigorous program of job training 7. Adopt and implement leadership 8. Drive out fear so that everyone may work effectively 9. Break down barriers between departments to work as a team 10. Eliminate numerical goals, posters, and slogans asking for new levels of production without new methods 11. Eliminate work standards that prescribe numerical quotas 12. Remove barriers that stand between hourly workers and pride of workmanship 13. Encourage education and self- improvement for everyone 14. Create a structure in top management that will work every day to achieve these points!

25. Total Quality Management Total Quality Management (TQM) is a system of management based on involving all employees in a constant process of improving quality and productivity by improving how they work Total Quality Management (TQM) is a system of management based on involving all employees in a constant process of improving quality and productivity by improving how they work

26. TQM Total = Quality involves everyone and all activities in the company. Total = Quality involves everyone and all activities in the company. Quality = Conformance to Requirements (Meeting Customer Requirements). Quality = Conformance to Requirements (Meeting Customer Requirements). Management = Quality can and must be managed. Management = Quality can and must be managed. TQM = A process for managing quality; it must be a continuous way of life; a philosophy of perpetual improvement in everything we do. TQM = A process for managing quality; it must be a continuous way of life; a philosophy of perpetual improvement in everything we do.

27. Japanese Management Practices Japanese managers: Japanese managers: encouraged employee participation in decision makingencouraged employee participation in decision making showed deeper concern for the personal well-being of their employeesshowed deeper concern for the personal well-being of their employees tended to facilitate decision making by teams of workerstended to facilitate decision making by teams of workers Honda Honda

28. Japanese/American Comparison Japanese Type Lifetime employment Lifetime employment Collective decision making Collective decision making Collective responsibility Collective responsibility Slow evaluation and promotion Slow evaluation and promotion Implicit control mechanisms Implicit control mechanisms Nonspecialized career path Nonspecialized career path Holistic concern for employees as a person Holistic concern for employees as a person American Type Short-term employment Short-term employment Individual decision making Individual decision making Individual responsibility Individual responsibility Rapid evaluation and promotion Rapid evaluation and promotion Explicit control mechanisms Explicit control mechanisms Specialized career path Specialized career path Segmented concern for employee as an employee Segmented concern for employee as an employee

29. Theory Z 1980s- William Ouchi 1980s- William Ouchi Theory Z is a business management theory that integrates Japanese and American business practices Theory Z is a business management theory that integrates Japanese and American business practices Incorporates the Japanese emphasis on collective decision making and concern for employees with the American emphasis on individual responsibilityIncorporates the Japanese emphasis on collective decision making and concern for employees with the American emphasis on individual responsibility

30. Applying Management Principles Activity Read all of the scenarios. Read all of the scenarios. Is it a good or bad way to manage employees? Is it a good or bad way to manage employees? Use one or more of the given theories studied in class to defend your argument Use one or more of the given theories studied in class to defend your argument