Chapter 2: Management Learning Past to Present PowerPoint Presentation to Accompany Management, 2/e John R. Schermerhorn, Jr. and Barry Wright Chapter 2: Management Learning Past to Present Prepared by: Jim LoPresti University of Colorado, Boulder Revised by: Dr. Shavin Malhotra Ryerson University, Toronto, Ontario Published by: John Wiley & Sons Canada, Ltd.

Planning Ahead — Chapter 2 Study Questions What can be learned from classical management thinking? What insights come from the behavioural management approaches? What are the foundations of modern management thinking? Management 2e - Chapter 2

Classical approaches to management include: Study Question 1: What can be learned from classical management thinking? Classical approaches to management include: Scientific management Administrative principles Bureaucratic organization Management 2e - Chapter 2

Figure 2.1 Major branches in the classical approach to management. Management 2e - Chapter 2

Scientific management (Frederick Taylor) Study Question 1: What can be learned from classical management thinking? Scientific management (Frederick Taylor) Develop 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 and provide proper incentives. Support workers by carefully planning their work and removing obstacles. Management 2e - Chapter 2

Scientific management (the Gilbreths) Study Question 1: What can be learned from classical management thinking? Scientific management (the Gilbreths) Motion study Science of reducing a job or task to its basic physical motions. Eliminating wasted motions improves performance. Management 2e - Chapter 2

Practical lessons from scientific management Study Question 1: What can be learned from classical management thinking? Practical lessons 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 Management 2e - Chapter 2

Administrative principles (Henri Fayol) — Study Question 1: What can be learned from classical management thinking? Administrative principles (Henri Fayol) — Division of labour Authority Discipline Unity of command Unity of direction Subordination of individual interests Remuneration Centralization Scalar chain Order Equity Personnel tenure Initiative Espirit de corps Management 2e - Chapter 2

Administrative principles (Henri Fayol) — rules of management: Study Question 1: What can be learned from classical management thinking? Administrative principles (Henri Fayol) — rules 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. Management 2e - Chapter 2

Study Question 1: What can be learned from classical management thinking? Administrative principles (Henri Fayol) — key principles of management: 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. Management 2e - Chapter 2

Bureaucratic organization (Max Weber) Study Question 1: What can be learned from classical management thinking? Bureaucratic organization (Max Weber) Bureaucracy An ideal, intentionally rational, and very efficient form of organization. Based on principles of logic, order, and legitimate authority. Management 2e - Chapter 2

Characteristics of bureaucratic organizations: Study Question 1: What can be learned from classical management thinking? Characteristics of bureaucratic organizations: Clear division of labour Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit 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 Management 2e - Chapter 2

Behavioural Management - human resource approaches include: Study Question 2: What insights come from the behavioural management approaches? Behavioural Management - human resource approaches include: Follett’s notion of organizations as communities Hawthorne studies Maslow’s theory of human needs McGregor’s Theory X and Theory Y Argyris’s theory of adult personality Management 2e - Chapter 2

Figure 2.2 Foundations in the behavioural or human resource approaches to management Management 2e - Chapter 2

Administrative principles (Mary Parker Follett) Study Question 2: What insights come from the behavioural management approaches? Administrative principles (Mary Parker Follett) Groups and human cooperation: Groups are mechanisms through which individuals can combine their talents for a greater good. Organizations are cooperating “communities” of managers and workers. Manager’s job is to help people in the organization cooperate and achieve an integration of interests. Management 2e - Chapter 2

Administrative principles (Mary Parker Follett) Study Question 2: What insights come from the behavioural management approaches? Administrative principles (Mary Parker Follett) Forward-looking management insights: Making every employee an owner creates a sense of collective responsibility (precursor of employee ownership, profit sharing, and gain-sharing) Business problems involve a variety of inter-related factors (precursor of systems thinking) Private profits relative to public good (precursor of managerial ethics and social responsibility) Management 2e - Chapter 2

Study Question 2: What insights come from the behavioural management approaches? Hawthorne studies Initial study examined how economic incentives and physical conditions affected worker output. No consistent relationship found. “Psychological factors” influenced results. Management 2e - Chapter 2

Hawthorne studies (cont.) Study Question 2: What insights come from the behavioural management approaches? Hawthorne studies (cont.) Relay assembly test-room studies Manipulated physical work conditions to assess impact on output. Designed to minimize the “psychological factors” of previous experiment. Factors that accounted for increased productivity: Group atmosphere Participative supervision Management 2e - Chapter 2

Hawthorne studies (cont.) Study Question 2: What insights come from the behavioural management approaches? Hawthorne studies (cont.) Employee attitudes, interpersonal relations and group processes. Some things satisfied some workers but not others. People restricted output to adhere to group norms. 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. Management 2e - Chapter 2

Maslow’s theory of human needs Study Question 2: What insights come from the behavioural 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 Management 2e - Chapter 2

Figure 2.3 Maslow’s hierarchy of human needs. Management 2e - Chapter 2

Maslow’s theory of human needs Study Question 2: What insights come from the behavioural management approaches? Maslow’s theory of human needs Deficit principle A satisfied need is not a motivator of behaviour. Progression principle A need becomes a motivator once the preceding lower-level need is satisfied. Both principles cease to operate at self-actualization level. Management 2e - Chapter 2

McGregor’s Theory X assumes that workers: Study Question 2: What insights come from the behavioural management approaches? McGregor’s Theory X assumes that workers: Dislike work Lack ambition Are irresponsible Resist change Prefer to be led 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 Management 2e - Chapter 2

Implications of Theory X and Theory Y: Study Question 2: What insights come from the behavioural 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. Management 2e - Chapter 2

Argyris’s theory of adult personality Study Question 2: What insights come from the behavioural management approaches? Argyris’s theory of adult personality Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality. Management practices should accommodate the mature personality by: Increasing task responsibility Increasing task variety Using participative decision making Management 2e - Chapter 2

Foundations for continuing developments in management Study Question 3: What are the foundations of modern management thinking? Foundations for continuing developments in management Quantitative analysis and tools Systems view of organizations Contingency thinking Commitment to quality Learning organizations Evidence-based management Management 2e - Chapter 2

Management science or operations research Study Question 3: What are the foundations of modern management thinking? Management science or operations research The scientific applications of mathematical techniques to management problems Mathematical forecasting makes future projections useful for planning Inventory modeling controls inventories mathematically Linear programming calculates how to allocate scarce resources among competing uses Management 2e - Chapter 2

Management science or operations research Study Question 3: What are the foundations of modern management thinking? Management science or operations research Queuing theory allocates service personnel/workstations to minimize service cost and customer waiting time Network models break large tasks into smaller components for better coordination Operations management is the study of how organizations produce goods and services Management 2e - Chapter 2

Organizations as Systems Study Question 3: What are the foundations of modern management thinking? 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. Management 2e - Chapter 2

Figure 2.4 Organizations as complex networks of interacting subsystems. Management 2e - Chapter 2

Study Question 3: What are the foundations of modern management thinking? Contingency thinking Tries to match managerial responses with problems and opportunities unique to different situations. Especially individual or environmental differences. No “one best way” to manage. Appropriate way to manage depends on the situation. Management 2e - Chapter 2

Study Question 3: What are the foundations of modern management thinking? 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 quality improvement for a total organization. Creates context for the value chain. Management 2e - Chapter 2

Study Question 3: What are the foundations of modern management thinking? Quality management ISO certification Global quality benchmark. Refine and upgrade quality to meet ISO standards Continuous improvement Continual search for new ways to improve quality Something always can and should be improved on Management 2e - Chapter 2

Knowledge Management and Organizational Learning Study Question 3: What are the foundations of modern management thinking? Knowledge Management and Organizational Learning Knowledge management is the process of using information technology to achieve performance success Portfolio of intellectual assets include patents, intellectual property rights, trade secrets, and accumulated knowledge of the entire workforce. Management 2e - Chapter 2

Learning organizations Study Question 3: What are the foundations of modern management thinking? Learning organizations Organizations that are able to continually learn and adapt to new circumstances. Core ingredients include: Mental models Personal mastery Systems thinking Shared vision Team learning Management 2e - Chapter 2

High Performance Organizations Study Question 3: What are the foundations of modern management thinking? High Performance Organizations Organizations that consistently achieve excellence while creating a high quality work environment. Common characteristics of high performance organizations include: People oriented – value people as human assets Team oriented – achieve synergy through teamwork Information oriented – mobilizes the latest information technology Management 2e - Chapter 2

High Performance Organizations Study Question 3: What are the foundations of modern management thinking? High Performance Organizations Achievement oriented – focuses on the needs of customers and stakeholders Learning oriented – operates with internal culture that respects and facilitates learning Management 2e - Chapter 2

Evidence-Based Management Study Question 3: What are the foundations of modern management thinking? Evidence-Based Management Making management decisions on “hard facts” about what really works 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 Management 2e - Chapter 2

Attributes of a 21st Century Manager Study Question 3: What are the foundations of modern management thinking? 21st Century Manager Managers have to excel as never before to meet the expectations held of them and of the organization they lead. Attributes of a 21st Century Manager Global strategist – understanding the interconnections among nations, cultures and economies Master of technology – comfortable with information technology Inspiring leader – attracting and motivating workers to achieve high-performance culture Model of ethical behaviour – acting ethically in all ways Management 2e - Chapter 2

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