Chapter 2 History of Management Thought John R. Schermerhorn, Jr. Daniel G. Bachrach Introduction to Management 13th edition 2 Chapter 2 History of Management Thought

Planning Ahead — Key Takeaways Identify what can be learned from the classical management approaches. Identify what can be learned from the behavioral management approaches. Identify what can be learned from the modern management approaches. Copyright ©2015 John Wiley & Sons, Inc.

Chapter 2 Outline Classical Management Approaches Scientific management Administrative principles Bureaucratic organization Behavioral Management Approaches Follett’s organizations as communities The Hawthorne studies Maslow’s theory of human needs McGregor’s Theory X and Theory Y Argyris’s personality and organization Copyright ©2015 John Wiley & Sons, Inc.

Chapter 2 Outline Modern Management Foundations Quantitative analysis and tools Organization as systems Contingency thinking Quality management Evidence-based management Copyright ©2015 John Wiley & Sons, Inc.

Figure 2.1 Major branches in the classical approach to management Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Four guiding principles of scientific management (Frederick Taylor) Develop a “science” that includes rules of motion, standardized work implements, and proper working conditions for every job. Carefully select workers with the right abilities for the job. Carefully train workers to do the job and give them incentives to cooperate with the job “science.” Support workers by carefully planning their work and by smoothing the way as they do their work. Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Scientific management (the Gilbreths) Motion study Science of reducing a job or task to its basic physical motions Eliminating wasted motions improves performance Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Practical insights from scientific management Make results-based compensation a performance incentive Carefully design jobs with efficient work methods Carefully select workers with the abilities to do these jobs Train workers to perform jobs to the best of their abilities Train supervisors to support workers so they can perform jobs to the best of their abilities Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Administrative principles (Henri Fayol) — rules/duties of management: Foresight to complete a plan of action for the future Organization to provide and mobilize resources to implement the plan Command to lead, select, and evaluate workers to get the best work toward the plan Coordination to fit diverse efforts together and ensure information is shared and problems solved Control to make sure things happen according to plan and to take necessary corrective action Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Administrative principles (Henri Fayol) Scalar chain there should be a clear and unbroken line of communication from the top to the bottom of the organization Unity of command each person should receive orders from only one boss Unity of direction one person should be in charge of all activities with the same performance objective Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Bureaucratic organization (Max Weber) Bureaucracy An ideal, intentionally rational, and very efficient form of organization Based on principles of logic, order, and legitimate authority Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Characteristics of bureaucratic organizations: Clear division of labor Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit Copyright ©2015 John Wiley & Sons, Inc.

Classical Management Approaches Possible disadvantages of bureaucracy: Excessive paperwork or “red tape” Slowness in handling problems Rigidity in the face of shifting needs Resistance to change Employee apathy Copyright ©2015 John Wiley & Sons, Inc.

Figure 2.2 Foundations in the behavioral or human resource approaches to management Human resource approaches Assumption: People are social and self-actualizing Theory of human needs Abraham Maslow Hawthorne studies Elton Mayo Organizations as communities Mary Parker Follett Theory X and Theory Y Douglas McGregor Personality and organization Chris Argyris Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Follett’s Organizations as communities – Mary Parker Follett Groups and human cooperation: Groups allow individuals to combine their talents for a greater good Organizations are cooperating “communities” of managers and workers Manager’s job is to help people cooperate and achieve an integration of interests Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Organizations as communities Forward-looking management insights: precursor of employee ownership, profit sharing, and gain-sharing Making every employee an owner creates a sense of collective responsibility precursor of systems thinking Business problems involve a variety of inter-related factors precursor of managerial ethics and social responsibility Private profits relative to public good Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Hawthorne studies Initial study examined how economic incentives and physical conditions affected worker output No consistent relationship found “Psychological factors” influenced results Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Hawthorne studies (cont.) Social setting and human relations Manipulated physical work conditions to assess impact on output Designed to minimize the “psychological factors” of previous experiment Mayo and colleagues concluded: New “social setting” led workers to do good job Good “human relations” = higher productivity Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Hawthorne studies (cont.) Employee attitudes and group processes Some things satisfied some workers but not others People restricted output to adhere to group norms Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Lessons from the Hawthorne Studies: Social and human concerns are keys to productivity Hawthorne effect — people who are singled out for special attention perform as expected Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Maslow’s theory of human needs A need is a physiological or psychological deficiency a person feels compelled to satisfy Need levels: Physiological Safety Social Esteem Self-actualization Copyright ©2015 John Wiley & Sons, Inc.

Figure 2.3 Maslow’s hierarchy of human needs Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Maslow’s theory of human needs Deficit principle A satisfied need is not a motivator of behavior Progression principle A need becomes a motivator once the preceding lower-level need is satisfied Both principles cease to operate at self-actualization level Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management approaches McGregor’s Theory X assumes that workers: Dislike work Lack ambition Are irresponsible Resist change Prefer to be led Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management approaches McGregor’s Theory Y assumes that workers are: Willing to work Capable of self control Willing to accept responsibility Imaginative and creative Capable of self-direction Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Implications of Theory X and Theory Y: Managers create self-fulfilling prophecies Theory X managers create situations where workers become dependent and reluctant Theory Y managers create situations where workers respond with initiative and high performance Central to notions of empowerment and self-management Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Argyris’s theory of adult personality Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality Psychological success occurs when people define own goals Copyright ©2015 John Wiley & Sons, Inc.

Behavioral Management Approaches Argyris’s theory of adult personality Management practices should accommodate the mature personality by: Increasing task responsibility Increasing task variety Using participative decision making Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Foundations for continuing developments in management Quantitative analysis and tools Organizations as systems Contingency thinking Quality management Evidence-based management Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Quantitative Analysis and Tools Analytics – the use of large data bases and mathematics to solve problems and make informed decisions using systematic analysis Typical quantitative approach to managerial problem-solving Problem encountered, it is systematically analyzed, appropriate mathematical models and computations applied, optimal solution identified Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Organizations as Systems System Collection of interrelated parts that function together to achieve a common purpose Subsystem A smaller component of a larger system Open systems Organizations that interact with their environments in the continual process of transforming resource inputs into outputs Copyright ©2015 John Wiley & Sons, Inc.

Figure 2.4 Organizations as complex networks of interacting subsystems Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Contingency thinking Tries to match managerial responses with problems and opportunities unique to different situations No “one best way” to manage Appropriate way to manage depends on the situation Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Quality management Managers and workers in progressive organizations are quality conscious Quality and competitive advantage are linked Total quality management (TQM) Comprehensive approach to continuous improvement for a total organization Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Continuous improvement Continual search for new ways to improve quality Something always can and should be improved ISO certification Global quality management Refine and upgrade quality to meet ISO standards Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Evidence-Based Management Making management decisions on “hard facts” about what really works Copyright ©2015 John Wiley & Sons, Inc.

Modern Management Foundations Evidence-Based Positive Human Resource Management Practices Employment security Selective hiring Self-managing teams High pay based on merit Training and development Reduced status distinctions Shared information Copyright ©2015 John Wiley & Sons, Inc.