1. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 1 Management Thought: Past and Present MANAGEMENT Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University

2. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 2 learning objectives 1.Discuss why knowledge of the evolution of management theories is important to managers 2.Explain the contributions of the following: a.Classical schools of management thought b.Behavioral school of management thought c.Quantitative school of management thought d.Systems school of management thought e.Contingency school of management thought f.Quality school of management thought

3. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 3 History and Theory of Management 1 1 People who ignore the past are destined to relive it. The Value of History A person unaware of mistakes made by others is likely to repeat them.

4. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 4 Time Line of Management Thought 1 1

5. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 5 Classical Management Theory Classical Management Theory Classical Management Theory A theory that focused on finding the “one best way” to perform and manage tasks 2a

6. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 6 Classical Management Theory 2a ▼Originated during England’s Industrial Revolution ▼Manufacturers began mass-producing goods in factories ▼Textile industry was among the first ▼Allowed production of standardized goods ▼Depended on a constant flow of labor and materials ▼Owners needed to plan, organize, lead, control ▼Focused on finding the “one best way”

7. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 7 Classical Management Theory 2a Classical Scientific School Focused on the manufacturing environment Classical Administrative School Emphasized the flow of information and how organizations should operate

8. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 8 Classical Scientific School ▼In 1832, published On the Economy of Machinery and Manufactures ▼Concluded that definite management principles existed: –with broad applications –determined by experience ▼Principle of “the division of labor amongst the persons who perform the work” Charles Babbage 2a

9. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 9 Classical Scientific School ▼The Father of Scientific Management ▼Pursued four key goals: –Develop a science of management –Select workers scientifically –Develop and train workers scientifically –Create cooperation between management and labor ▼Determined the quickest ways to perform tasks Frederick W. Taylor 2a

10. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 10 Classical Scientific School ▼Invented the Gantt chart ▼Moved away from authoritarian management ▼Advocated a bonus system to reward workers Henry Gantt 2a

11. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 11 Lessons from Classical Scientific Thinkers 2a Analyze everything Teach effective methods to others Plan responsibly Constantly monitor workers Control the work and the workers

12. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 12 Classical Administrative School 2a ▼Believed specific management skills could be learned and taught ▼Fayol’s universal management functions: –Planning –Organizing –Leading –Controlling Henri Fayol

13. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 13 Classical Administrative School 2a Mary Parker Follett ▼Focused on how organizations cope with conflict and the importance of sharing goals ▼Emphasized the need to discover and enlist individual and group motivation ▼The first principle for individual and group success is the “capacity for organized thinking”

14. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 14 Classical Administrative School 2a Chester Barnard ▼Argued that managers must gain acceptance for their authority ▼Advocated the use of basic management principles ▼Cautioned managers to issue no order that could not or would not be obeyed

15. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 15 Behavioral Management Theory 2b Behavioral School Recognized employees as individuals with concrete, human needs, as parts of work groups, and as members of a larger society

16. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 16 Behavioral Management Theory 2b Robert Owen ▼The father of modern personnel management ▼The quality and quantity of workers’ output influenced by conditions on and off the job

17. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 17 Behavioral Management Theory 2b Abraham Maslow ▼Needs-based theory of motivation –physiology –security –affiliation –esteem –self-actualization

18. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 18 Behavioral Management Theory Results 2b Managers discover… What employees want from work How to unleash talents, energy, and creativity How to enlist cooperation and commitment

19. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 19 Quantitative Management Theory 2c Quantitative School Emphasized mathematical approaches to management problems Management Science The study of complex systems of people, money, equipment, and procedures, with the goal of improving their effectiveness

20. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 20 Quantitative Management Theory 2c ▼Mathematical approaches to management problems ▼Developed during World War II ▼Applied to every aspect of business

21. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 21 Tools of Operations Management 2c Inventory models Beak-even analyses Production routing Production scheduling

22. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 22 Systems Management Theory 2d Systems School Systems School The theory that an organization comprises various parts that must perform tasks necessary for the survival and proper functioning of the system

23. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 23 The Organization as a System 2d

24. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 24 Contingency Management Theory 2e Contingency School Contingency School A theory based on the premise that managers’ preferred actions or approaches depend on the variables of the situation they face

25. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 25 Contingency Management Theory 2e ▼Approaches depend on the variables of the situations ▼Draws on all past theories in attempting to analyze and solve problems ▼Is integrative ▼Summarized as an “it all depends” device ▼Tells managers to look to their experiences and the past and to consider many options before choosing ▼Encourages managers to stay flexible

26. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 26 Quality Management Theory 2f Quality School Quality School The essence of the quality of any output is its ability to meet the needs of the person or group

27. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 27 Quality Management Theory 2f Kaizen A Japanese term used to mean incremental, continuous improvement for people, products, and processes Reengineering Businesses processes are redesigned to achieve improvements in performance

28. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 28 Reengineering Approach 2f ▼What a company must do ▼How to do it Reengineering determines… ▼To sense the need for change ▼To see change coming ▼To react effectively to change Managerial Challenges

29. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 29 Quality School of Management 2f ▼Quality school is the most current and is worldwide ▼Its roots are in the behavioral, quantitative, systems, and contingency schools of management theory ▼People are key to commitments and performance ▼What is done must be evaluated quantitatively and qualitatively