PowerPoint Presentation by Charlie Cook Copyright © 2005 Prentice Hall, Inc. All rights reserved.

Historical Background of Management Ancient Management Organized jobs directed by people responsible for planning, organizing, leading, and controlling activities have existed for thousands of years. Egypt (Pyramids) and China (The Great Wall) Venetians (floating warship assembly lines) Adam Smith Published “The Wealth of Nations” in 1776 Advocated the division of labor (job specialization) to increase the productivity of workers. Industrial Revolution Substituted machine power for human labor Created large organizations in need of management

Major Approaches to Management Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach

Development of Major Management Theories Exhibit 2.1

Scientific Management Frederick Winslow Taylor − The “father” of scientific management. Published Principles of Scientific Management (1911) The use of scientific methods to define the “one best way” for a job to be done. Putting the right person on the job with the correct tools and equipment. Having the worker follow instructions exactly or use a standardized method of doing the job. Motivating the worker with an economic incentive (bonus) of a higher wage.

Scientific Management (cont’d) Frank and Lillian Gilbreth Focused on increasing worker productivity through the reduction of wasted hand and body motions. Experimented with tools and equipment to optimize (get the most out of) work performance. Developed the microchronometer to time worker motions and optimize performance. Today’s use of scientific management: Analyze the work tasks to be performed Use time-and-motion study to eliminate wasted motions Hire the best qualified workers for a job Design incentive (bonus, reward) systems based on output (production).

General Administrative Theorists Henri Fayol Described management as a set of functions that included planning, organizing, commanding, coordinating, and controlling. Believed that the practice of management was distinct from other organizational functions. Developed fourteen principles of management that applied to all organizational situations. Max Weber Developed a theory of authority based on an ideal type of organization: bureaucracy Emphasizing rationality, predictability, impersonality, technical competence, and authoritarianism

General Administrative Theorists (Vocabulary) Rationality: Having good sense, sound judgment Predictability: capable of being known in advance Impersonality: Without preference to individual persons Competence: Good physical and intellectual ability Authoritarianism: Centrally managed by a single individual or small group

Fayol’s 14 Principles of Management Division of work. Authority. Discipline. Unity of command. Unity of direction. Subordination of individual interest to the interests of the organization. Remuneration. Centralization. Scalar chain. Order. Equity. Stability of tenure of personnel. Initiative. Esprit de corps. Exhibit 2.3

Weber’s Ideal Bureaucracy Exhibit 2.4

General Administrative Theories Today’s use of general administrative theories of management: Many contemporary (today’s) managers feel that “bureaucracy” takes away employees’ creativity and the organization’s ability to respond quickly to a dynamic (changing) environment. Yet today some bureaucratic mechanisms (processes) are necessary to ensure that resources are used efficiently and effectively.

Quantitative Approach to Management The Quantitative Approach Also called operations research or management science Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems Focuses on improving managerial decisions by applying: Statistics (data), optimization models (improvement theories), information models (use of recorded information), and computer simulations (the technique of using a computer program to create a virtual representation of what can possibly happen).

Quantitative Approach to Management Today’s use of the quantitative approach to management: The availability of software programs has made the use of quantitative techniques easier for managers. Today, when managers make budgeting, scheduling, quality control, and similar decisions, they rely on quantitative techniques.

Understanding Organizational Behavior Organizational Behavior (OB) The study of the actions of people at work. The early advocates of OB believed that people were the most important asset of an organization Their ideas provided the basis for employee selection procedures, motivation programs, work teams and working environment management techniques. Behavior: Way of relating to other humans, conduct. Research conclusion of the Hawthorne Studies Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.

Today’s Use of Organizational Behavior The behavioral approach is widely used in today’s organizations as can be seen in: --The way managers design motivating jobs --The way they work with employee teams --The way they use open communication. Early OB and the Hawthorne studies provided the basis for our current (today’s) theories of motivation, leadership, group development and other behavioral topics.

The Systems Approach System Defined Basic Types of Systems A set of interrelated (all connected) and interdependent (depend on each other) parts of an organization that work together as a whole to achieve goals. Basic Types of Systems Closed systems Are not influenced by and do not interact with their environment. Inputs and outputs are internal. Open systems Dynamically interact with their environment. They collect inputs (resources) from the environment and transform them into outputs that are distributed into the environment.

The Organization as an Open System Exhibit 2.6

Implications (meanings/ideas) of the Systems Approach How the systems approach is appropriate for understanding management: Coordination of the organization’s parts is essential for proper functioning of the entire organization. Decisions and actions taken in one area of the organization will have an effect in other areas of the organization. Organizations are not self-contained and, therefore, must adapt to changes in their external environment. Self-contained: Complete and independent in and of itself. E.g. The university is like a self-contained city with shops and conveniences.

The Contingency Approach Sometimes called the situational approach. The contingency approach differs from the early theories of management insofar as: Organizations are different from one another, there is no single universally applicable set of management principles (rules) by which to manage all organizations. Organizations face different situations (or contingencies = changing events/conditions), and require different ways of managing depending on the present conditions.

Current Trends and Issues We need to look at these current trends and issues because they are changing the way managers do their jobs. -- Globalization -- Ethics -- Workforce Diversity -- Entrepreneurship -- E-business -- Knowledge Management -- Learning Organizations -- Quality Management

Current Trends and Issues (cont’d) Globalization Management in international organizations Political and cultural challenges of operating in a global market Ethics Increased emphasis on ethics education (the study of moral values and rules) in college curriculums Increased creation and use of codes of ethics by businesses (sets of rules and principles directing the conduct of employees in deciding what is right and wrong when faced with difficult choices)

Current Trends and Issues (cont’d) Workforce Diversity Increasing heterogeneity in the workforce In terms of gender, race, ethnicity and other forms of diversity in the workforce. Aging workforce Older employees who work longer and do not retire The increased costs of public and private benefits for older workers An increasing demand for products and services related to aging.

Current Trends and Issues (cont’d) Entrepreneurship The process whereby an individual or group of individuals uses organized efforts to create value and grow by fulfilling wants and needs through innovation and uniqueness. Entrepreneurship themes (forms & ideas) The pursuit (search) of opportunities Innovation in products, services, or business methods A desire for continual growth of the organization

Current Trends and Issues (cont’d) E-Business (Electronic Business) An organization that does its work performed by using electronic linkages – the Internet – to its key constituencies (members, parts, components of the organization). E-commerce The sales and marketing component of an e-business that uses electronic linkages to the public.

Current Trends and Issues (cont’d) Knowledge Management The cultivation (development) of a learning culture (mental attitude) where organizational members systematically gather and share knowledge with others in order to achieve better performance. Learning Organization An organization that has developed the capacity to continuously learn, adapt, and change.

Learning Organization versus Traditional Organization Exhibit 2.10

Current Trends and Issues (cont’d) Quality Management A philosophy of management that is committed to (aimed at) continuous improvement in the quality of work processes and responding to customer needs and expectations. Inspired by the total quality management (TQM) ideas of Deming and Juran Quality is not directly related to cost; low quality may result in higher costs to the organization.

What is Quality Management? Intense focus on the customer. Concern for continual improvement. Process-focused, e.g. quality of goods. Improvement in the quality of everything the organization does. Accurate measurement: Comparing the state of operations against standards. Empowerment of employees: Involving people in the improvement process. Exhibit 2.11

Chapter review Historical Background of Management pg. 25 Explain why studying management history is important. Describe some early evidences of management practice. Scientific Management pg. 27 Describe the important contributions made by Fredrick W. Taylor and Frank and Lillian Gilbreth. Explain how today’s managers use scientific management.

Chapter review (cont’d) General Administrative Theorists pg. 28 Discuss Fayol’s 14 management principles. Describe Max Weber’s contribution to the general administrative theory of management. Explain how today’s managers use general administrative theory. Quantitative Approach to Management pg. 30 Explain what the quantitative approach has contributed to the field of management. Discuss how today’s managers use the quantitative approach.

Chapter review (cont’d) Toward Understanding Organizational Behavior pg. 31 Explain the conclusions of the Hawthorne Studies. Discuss how today’s managers use the behavioral approach. The Systems Approach pg. 33 Describe an organization using the systems approach. Discuss how the systems approach is appropriate for understanding management.

Chapter review (cont’d) The Contingency Approach pg. 35 Explain how the contingency approach differs from the early theories of management. Discuss how the contingency approach is appropriate for studying management. Current Issues and Trends pg. 36 Explain why we need to look at the current trends and issues facing managers. Describe the current trends and issues facing managers.