Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall The construction of a single pyramid occupied more than 100,000 workers for 20 years. Who told each worker what to do? Who ensured that there would be enough stones at the site to keep workers busy? https://www.youtube.com/watch?v=fF_YvY7jfiE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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 http://www.investopedia.com/articles/economics/09/adam-smith-wealth-of-nations.asp He ONES WHO ARE INTERESTED IN ADAM SMITH PLEASE READ THIS VERY BRIEF SUMMARY ABOUT «INVISIBLE HAND» Adam Smith: Division of labor. Breakdown of works into small and repititive task. He told that if you breka down the prodction into pieces 10 individual can produce 48.000 pins a day. But if you let each one to produce a whole part you can not exceed 10 pins a day for person. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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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

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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 Max Weber Developed a theory of authority based on an ideal type of organization (bureaucracy) Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism HENRI FAYOL Fayol's 14 Principles of Management Fayol's principles are listed below: Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient. Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary. Unity of Command – Employees should have only one direct supervisor. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority. Initiative – Employees should be given the necessary level of freedom to create and carry out plans. Esprit de Corps – Organizations should strive to promote team spirit and unity. Fayol's Six Functions of Management Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows: Forecasting. Planning. Organizing. Commanding. Coordinating. Controlling. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Fayol's Six Functions of Management Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows: Forecasting. Planning. Organizing. Commanding. Coordinating. Controlling. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall The organization defined by Weber: Division of Labor A clearly defined hierarchy Detailed rules and regulations Impersonal relationships Documentation Career oriantation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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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

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 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

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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

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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

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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