Chapter 2: Management learning – Past to present Business Leadership: Management Fundamentals John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest © John Wiley & Sons Canada, Ltd.

Planning Ahead — Chapter 2 Learning Goals Understand what can be learned from traditional management thinking Understand the insights of the behavioural management approaches Understand the foundations of modern management thinking

Classical management approaches p 42-46

Classical approaches to management include: 1. Scientific management 2. Administrative principles 3. Bureaucratic organization

Figure 2.1 major branches IN the classical approach to management © John Wiley & Sons Canada Ltd.

Scientific management (frederick Taylor) “The principal object of management should be to secure maximum prosperity for the employer, coupled with the maximum prosperity for the employee” – F. Taylor Four guiding principles: 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. © John Wiley & Sons Canada Ltd.

Class activity The puzzle

Scientific management (the gilbreths) Motion Study: Science of reducing a job or task to its basic physical motions Eliminating wasted motions improves performance © John Wiley & Sons Canada Ltd.

Video: bricklaying ergonomics (external link) © John Wiley & Sons Canada Ltd.

Video: how ups works How UPS Works (external link) © John Wiley & Sons Canada Ltd.

Video: expansion of worldport (external link) Link: http://www.youtube.com/watch?v=zYtKPrsJFus © John Wiley & Sons Canada Ltd.

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 © John Wiley & Sons Canada Ltd.

End here (up to page 44 in text) Answer questions on page © John Wiley & Sons Canada Ltd.

Administrative Principles and Bureaucratic Organization Pages 46 - 52 © John Wiley & Sons Canada Ltd.

Administrative principles (henri favol) 1. Division of labour 8. Centralization 2. Authority 9. Scalar chain 3. Discipline 10. Order 4. Unity of command 11. Equity 5. Unity of direction 12. Personnel tenure 6. Subordination of individual interest 13. Initiative 7. Remuneration 14. Esprit de corps © John Wiley & Sons Canada Ltd.

Administrative principles (cont’d) 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

Administrative principles (cont’d) 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

Bureaucratic organization (max weber) Bureaucracy: An ideal, intentionally rational, and very efficient form of organization Based on principles of logic, order, and legitimate authority

figure 2.2 characteristics of classic bureaucracy © John Wiley & Sons Canada Ltd.

Characteristics and disadvantages of bureaucracy 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

© John Wiley & Sons Canada Ltd.

Behavioural management p 46-52 © John Wiley & Sons Canada Ltd.

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

Figure 2.3 foundations in the behavioural or human resources approach to management © John Wiley & Sons Canada Ltd.

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. © John Wiley & Sons Canada Ltd.

Administrative principles (Mary Parker Follett) (cont’d) 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).

How to tie a tie activity

Hawthorne studies Initial study examined how economic incentives and physical conditions affected worker output No consistent relationship found “Psychological factors” influenced results

Hawthorne studies (cont’d) 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

Hawthorne studies (cont’d) 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

Video: Testing the Hawthorne Effect (external link) Link: http://www.youtube.com/watch?v=b_YAJtJmPLE © John Wiley & Sons Canada Ltd.

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

Figure 2.4 Maslow’s hierarchy of human needs © John Wiley & Sons Canada Ltd.

Maslow’s theory of human needs (cont’d) 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.

Application: Maslow What parts of a job satisfy each level of the pyramid? Physical? Safety? Social? Esteem? Self-Actualization? © John Wiley & Sons Canada Ltd.

McGregor’s Theory X and Y 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

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. This is central to notions of empowerment and self-management.

Argyris’s theory of adult personality Traditional 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

Modern Management Foundations p 53-60 © John Wiley & Sons Canada Ltd.

Modern Management Foundations Foundations for furthering developments in management: Quantitative analysis and tools Systems view of organizations Contingency thinking Commitment to quality Learning organizations Evidence-based management © John Wiley & Sons Canada Ltd.

Quantitative Analysis and Tools Management science or operations research: The scientific applications of mathematical techniques to management problems Mathematical forecasting makes future projections useful for planning Network model such as a Gantt chart breaks large tasks into smaller components

figure 2.6 gantt chart © John Wiley & Sons Canada Ltd.

Quantitative Analysis and Tools (cont’d) Management science or operations research (cont’d): Inventory analysis controls inventories mathematically determining how much to automatically order and when Queuing theory allocates service personnel/workstations to minimize service cost and customer waiting time Linear programming calculates how to allocate scarce resources among competing uses Operations management is the study of how organizations produce goods and services

Organizations as Systems “Organizations are co-operative systems that achieve great things by integrating the contributions of many individuals to achieve a common purpose” – Chester Barnard 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.

Figure 2.7 Organizations as complex networks of interacting subsystems © John Wiley & Sons Canada Ltd.

Contingency thinking Tries to match managerial responses with problems and opportunities unique to each situations Especially in terms of individual or environmental differences No “one best way” to manage Appropriate way to manage depends on the situation

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

Quality management (cont’d) “80% of the problems are caused by 20% of the operations” - Deming’s 80/20 rule 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 © John Wiley & Sons Canada Ltd.

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.

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

Evidence-Based Management Organizations that consistently achieve excellence while creating a high quality work environment Involves making decisions based on hard facets about what really works

Common characteristics of high performance organizations People oriented – value people as human assets Team oriented – achieve synergy through teamwork Information oriented – mobilizes the latest information technology Achievement oriented – focuses on the needs of customers and stakeholders Learning oriented – operates with internal culture that respects and facilitates learning © John Wiley & Sons Canada Ltd.

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

21st Century Leadership The 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

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