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McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Two The Evolution of Management Thought.

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Presentation on theme: "McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Two The Evolution of Management Thought."— Presentation transcript:

1 McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Two The Evolution of Management Thought

2 2-2 The Evolution of Management Theory Figure 2.1

3 2-3 Job Specialization and the Division of Labor  Job Specialization ≈ process by which a division of labor occurs as different workers specialize in specific tasks over time  Adam Smith (18 th century economist) concluded that increasing the level of job specialization increases efficiency and leads to greater org performance

4 2-4 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. 1.Study way workers perform tasks (time-and-motion study), gather informal job knowledge, experiment w/ ways of improving how tasks performed 2.Codify new methods into SOPs 3.Carefully select workers possessing skills/abilities that match needs of task, train them to perform task according to SOPs 4.Establish acceptable performance level for task, develop pay system providing reward beyond acceptable level

5 2-5 Problems with Scientific Management  Managers frequently implemented only the increased output side of Taylor’s plan. ≈ Workers did not share in the increased output.  Specialized jobs became very boring, dull. ≈ Workers ended up distrusting the Scientific Management method.

6 2-6 Administrative Management Theory  Administrative Management ≈ The study of how to create an organizational structure that leads to high efficiency and effectiveness.

7 2-7 Weber’s Principles of Bureaucracy Figure 2.2

8 2-8 Fayol’s Principles of Management  Division of Labor: allows for job specialization (provided boredom is managed, e.g., job enlargement/enrichment)  Authority and Responsibility (both formal and informal)  Unity of Command: one supervisor  Line of Authority: limited length to chain of command  Centralization: authority should not be concentrated at top of chain of command???  Unity of Direction: single plan of action  Equity: justice and respect

9 2-9 Fayol’s Principles of Management  Order: maximize org efficiency, provide ees w/ satisfying career opportunities  Initiative: allow ees to be innovative  Discipline: focused  Remuneration of Personnel: equitable  Stability of Tenure of Personnel  Subordination of Individual Interest to the Common Interest  Esprit de corps (org culture)

10 2-10 Behavioral Management Theory  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.

11 2-11 Behavioral Management  Mary Parker Follett ≈ Concerned that Taylor ignored the human side of the organization  Suggested workers help in analyzing their jobs  If workers have relevant knowledge of the task, then they should control the task

12 2-12 The Hawthorne Studies  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 was measured at various levels of light illumination.  Hawthorne effect — workers’ attitudes toward their managers affect the level of workers’ performance

13 2-13 Behavioral Management  Human relations movement ≈ advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity  Organizational Behavior ≈ MNGT 315

14 2-14 Theory X vs. Theory Y Figure 2.3

15 2-15 Management Science Theory  Management Science Theory ≈ Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.

16 2-16 Management Science Theory  Quantitative management ≈ utilizes mathematical techniques, like linear programming, modeling, simulation and chaos theory ≈ DSCI 351  Operations management ≈ provides managers a set of techniques they can use to analyze any aspect of an organization’s production system to increase efficiency ≈ DSCI 445

17 2-17 Management Science Theory  Total quality management ≈ focuses on analyzing an organization’s input, conversion, and output activities to increase product quality ≈ DSCI 446  Management information systems ≈ help managers design systems that provide information that is vital for effective decision making ≈ CIS 305 ≈ ACCT 413

18 2-18 Organizational Environment Theory  Organizational Environment ≈ The set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources ≈ MNGT 443

19 2-19 The Organization as an Open System Figure 2.4

20 2-20 Contingency Theory Figure 2.5

21 2-21 Type of Structure  Mechanistic Structure ≈ Authority is centralized at the top. ≈ Emphasis is on strict discipline and order. ≈ Employees are closely monitored and managed. ≈ Can be very efficient in a stable environment.

22 2-22 Type of Structure  Organic Structure ≈ Authority is decentralized throughout the organization. ≈ Departments are encouraged to take a cross- departmental or functional perspective. ≈ Works best when environment is unstable and rapidly changing.

23 2-23 Case Study: Flight 3407  Continental Connection Flight 3407 crashed in Buffalo, NY 2/12/09, killing all 49 people on board as well as one on ground ≈ Operated by Colgan Inc., unit of Pinnacle Airlines  Captain 47 yrs old, co-pilot 24 yrs old ≈ FAA safety inspector assigned to Colgan testified that pilots frequently violated safety rules by engaging in idle chatter in cockpit  Part of culture: “you can kind of slide by, cut corners, wink and nod when the FAA is not there.” ≈ Colgan previously failed to maintain detailed records of pilots who failed proficiency tests  Determined after crash that captain failed five flight tests over period of five years  Q: How to manage airline so as to minimize risk of accidents? ≈ Since accident Colgan has instituted numerous changes, including enhanced stall-recovery training, new operations manual, stricter experience requirements for new hires  Source: Wall Street Journal, 5/13/09

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