Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Describe some early management examples Explain the various theories in the classical approach Discuss the development and uses of the behavioral approach Describe the quantitative approach Explain the various theories in the contemporary approach Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Historical Background of Management Ancient Management Egypt (pyramids) and China (Great Wall) Venetians (floating warship assembly lines) Adam Smith The Wealth of Nations in 1776 Industrial Revolution Substituted machine power for human labor Created large organizations in need of management Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Exhibit MH-1: Major Approaches to Management Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Scientific Management Fredrick Winslow Taylor The “father” of scientific management The theory of scientific management Using 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 a standardized method of doing the job Providing an economic incentive to the worker Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

General Administrative Theory Henri Fayol Believed that the practice of management was distinct from other organizational functions Developed principles of management that applied to all organizational situations Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Administrative principles (Henri Fayol)—rules of management Foresight—to complete 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, ensure information is shared and problems solved. Control—to make sure things happen according to plan and to take necessary corrective action.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-3 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

General Administrative Theory Max Weber Developed a theory of authority based on an ideal type of organization (bureaucracy) Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-4 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Discussion Is there any similarities in the way of thinking between Fayol and Weber?!! Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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 decision making by applying: Statistics, optimization models, information models, and computer simulations Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Quantitative management Use of specialists to help managers apply techniques. Software and hardware developments have expanded potential quantitative applications . Personal judgment?! Techniques and applications include: Mathematical forecasting Inventory modeling Linear programming Queuing theory Network models Simulations

Organizational Behavior Organizational Behavior (OB) The study of the actions of people at work; people are the most important asset of an organization Early OB Advocates Robert Owen Hugo Munsterberg Mary Parker Follett Chester Barnard Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-5 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Mary Parker Follett Groups and human cooperation Groups are mechanisms through which individuals could combine their talents for a greater good. Organizations as cooperating “communities” of managers and workers. Manager’s job is to help people in the organization cooperate and achieve an integration of interests.

Mary Parker Follett Forward-looking management insights Employee ownership creates sense of collective responsibility (precursor of employee ownership, profit sharing, and gain-sharing) Business problems involve variety of inter-related factors (precursor of systems thinking) Private profits relative to public good (precursor of managerial ethics and social responsibility)

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall The Hawthorne Studies A series of productivity experiments conducted at Western Electric from 1924 to 1932 Experimental findings Productivity unexpectedly increased under imposed adverse working conditions. The effect of incentive plans was less than expected. Research conclusion Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-6 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall The Systems Approach System - a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Closed systems Are not influenced by and do not interact with their environment (all system input and output is internal) Open systems Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-7 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

The Contingency Approach Contingency Approach - sometimes called the situational approach There is no one universally applicable set of management principles (rules) by which to manage organizations. Organizations are individually different, face different situations (contingency variables), and require different ways of managing. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exhibit MH-8 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Teamwork activity Assume the identity of one of the following: Fredrick Taylor Henri Fayol Max Weber Mary Parker Follet System’s thinking Contingency theories Answer the following questions (within teams)

Teamwork activity Q1: what are your basic beliefs about good management and organizational practices (according to your school of thoughts)?! Q2: What is the best thing a manager can do to improve productivity in his or her work unit (according to your school of thoughts)?! Q3: Disregard the school of thoughts you have chosen, how can you – as a manger – improve the productivity of a low performance employee in your organization?! (make use of what you have learned from the different schools of thoughts)

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Terms to Know division of labor (or job specialization) Industrial Revolution scientific management therbligs general administrative theory principles of management bureaucracy quantitative approach organizational behavior (OB) Hawthorne Studies system closed systems open systems contingency approach Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall