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1 Management Theories (organizations as machines).

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1 1 Management Theories (organizations as machines)

2 2 Pre-Industrial Revolution: Organizations functioned like empires Ben Franklin- independence, hard work, planning, organization, control Frederick the Great – organized armies on principles of mechanics

3 3 Adam Smith (1776) – Wealth of Nations – division of labor Karl Marx – 1u32 – division of labor Blueprint for organizational form: Organization Chart

4 4 Civil War - conflict of social values – hierarchy of race vs. hierarchy of social class Industrial Revolution – rise of the modern factory Concepts of division of labor, hierarchy, scientific methods solidified

5 5 Scientific Management – Frederick Taylor Management as a science, clearly defined laws, rules, principles Time and motion studies – improved organizational efficiency Division of labor, chain of command, communication limited to orders, instructions Management-oriented, production centered view of org. comms.

6 6 Managers think; workers work Efforts to improve efficiency (sometimes backfired) Henri Fayol (1949) Theory of administrative science 5 elements of classical management: planning, organizing, goal setting, coordinating, controlling (evaluating)

7 7 Fayol advocated centralized decision making, respect for authority Principles of management: Division of work Discipline Unity of command Subordination of individual to general interest

8 8 Fair remuneration for effort Centralization Hierarchy Equitable treatment of employees Esprit de corps Stability of tenure of employees Initiative on part of managers

9 9 Bureaucracy (Max Weber): Fixed division of labor Hierarchy of offices General rules for performance Separation of personal/work life Selection of personnel based on technical qualifications Equal treatment Employment as a career

10 10 Influence of traditional management theories on businesses today: Management authority Rational behavior model Money as motivator Hierarchical thinking Machinelike, prescriptive management of behavior

11 11 Criticism: Rigid, unadaptive, structures “red tape” inefficiencies Failure to understand social/ psychological dynamics of organizational behavior

12 12 Transitional: Chester Barnard Attempted to provide comprehensive theory of cooperative behavior in formal organizations Individual as basic strategic factor in organizations Compliance and “zone of indifference”

13 13 Barnard: first function of the executive is to establish and maintain a system of communication Organizations made up of individual humans with individual motivations Larger organizations contain smaller sub-grouping – consider their goals Efficiency vs. effectiveness

14 14 Authority in organization only exists if people willing to accept it Principles for ensuring effectiveness of communications: 1.Everyone should know channels 2.Everyone should have access to a formal channel of communications 3.Lines of communic s/b as short as possible

15 15 Beginnings of Human Relations movement (reaction against traditional management theories) 1927-1932 Hawthorne Plant of Western Electric in Illinois – Elton Mayo and others studying relationship between lighting conditions and worker productivity

16 16 Found that increased attention paid to workers increased productivity First glimpse of workers as complex beings, sensitive to group norms, possessing multiple values, motives, emotions Does positive employee morale foster productivity? Little basis for this theory

17 17 Conclusions of Mayo’s studies: Work is a group activity Social world of adults primarily patterned about work activity Need for recognition, security, sense of belonging is more important in determining worker morale than physical conditions Complaints are symptoms of disturbance of status position

18 18 Worker as person whose attitudes, effectiveness conditioned by social demands from inside/outside plant Informal groups exercise strong social controls over individual workers Group collaboration m/b planned, developed

19 19 Human Relations movement became concerned with discovering how to harness motivation and commitment of individuals to corporate goals

20 20 Importance of Mayo’s work: Importance of recognizing human emotions in managing people Demonstrated that success in leadership depends on acceptance of that leadership Showed that relationship of workers to management was fundamental problem of industry

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