part Chapter © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill A Brief History of Management 1 Chapter 2

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 2 McGraw-Hill Learning Objectives 1.Explain the role of the Industrial Revolution in the development of managerial thought and identify the captains of Industry and their role in management’s evolution 2.Define scientific management and outline the role Frederick W. Taylor played in its development 3.Identify and explain the human relations movement 4.Explain the systems approach

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 3 McGraw-Hill Learning Objectives 5.Explain the differences between Theory X, Theory Y, and Theory Z 6.Define the contingency approach to management 7.Explain the concepts of the search for excellence and the emphasis on quality 8.Understand what is required for an organization to move from good to great

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 4 McGraw-Hill The History of Management Many of today’s managerial problems began during the early management movement. The challenge to present and future managers: To develop a feel for why and how things happened and to apply this knowledge to the practice of management Some forms of management have existed since the beginning of time.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5 McGraw-Hill U.S. Industrial Revolution Shift from farming-based society to an industrialized society Daniel Wren’s three components: –Power –Transportation –Communication Steam Engine Transportation improved Speed and efficiency dramatically increased

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 6 McGraw-Hill Captains of Industry The four captains of industry were: –John D. Rockefeller (Oil) –James B. Duke (Tobacco) –Andrew Carnegie (Steel) –Cornelius Vanderbilt (Steamships and Railroads) Government regulation for business –1890 – the Sherman Antitrust Act Low wages, crude production methods, nonexistent worker training

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 7 McGraw-Hill Scientific Management and Taylor Henry Towne and Frederick Taylor The tendency to restrict output is referred to as soldiering Scientific Management’s four main principles are –New scientific method to replace old methods –Selection and progressive teaching of employees –Joining of employees and methods for specific jobs –Division of work resulting in interdependence Scientific management is a philosophy, not a technique of efficiency device

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 8 McGraw-Hill Other Scientific Management Pioneers Henry Lawrence Gantt – production control The Gantt Chart Frank Gilbreth – study of motions Lillian Gilbreth – psychology Lillian Gilbreth became the First Lady of Management

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 9 McGraw-Hill Fayol’s Theory of Management Henri Fayol issued statement on general management Theory of management principles and elements –14 principles of management Principles as general guidelines First to outline the functions of management –Planning, organizing, commanding, coordinating, and controlling

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 10 McGraw-Hill The Human Relations Movement The Great Depression ( ) created excessive unemployment Afterward came the Golden Age of Unionism Climate became employee-focused

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 11 McGraw-Hill The Hawthorne Studies The 1924 Hawthorne studies Production increased with no obvious relationship to environment Employees reacted to conditions and attention This became known as the Hawthorne effect

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 12 McGraw-Hill The Systems Approach Era of attempted integration Theorists sought systems approach An organization can be viewed as one of the following systems: –Open system – interact with environment –Closed system – no interaction with environment

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 13 McGraw-Hill Theory X and Theory Y The Human Side of Enterprise, 1960 Douglas McGregor Theory X Theory Y

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 14 McGraw-Hill The Contingency Approach 1970s Contingency Approach No one Best Way Dependent on circumstances

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 15 McGraw-Hill Theory Z Japanese Managers –Encouraged more participation –Deeper concern for employee’s well-being –Great emphasis on quality –Top management acted as facilitator William Ouchi Theory Z

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 16 McGraw-Hill The Search for Excellence 1982, In Search of Excellence Mix of standards and success Re-emphasized value Luster lost Two lessons: –Companies of today may not be companies of tomorrow –Management requires more than one set of rules

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 17 McGraw-Hill The Emphasis on Quality American Products had reached a low by 1970 Managers forced to look at quality issue A shift from finding to preventing TQM

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 18 McGraw-Hill Moving from Good to Great Built to Last: Successful Habits of Visionary Companies, 1994 Current successes do not guarantee future successes The Hedgehog Concept