1. The Human Factor: Preparing the Way
Week 5: Chapter 9
The Human Factor: Preparing the Way

2. The Human Factor – Preparing the Way
Personnel Management
Psychology and the Individual
The Social Problem
Participative Decision Making

3. Personnel Management – A Dual Heritage
One part of personnel management can be found in the industrial betterment/welfare movement.
The other side comes from scientific management and the needs for record.

4. Personnel Management – As Welfare Work
A number of companies hired a welfare secretary to advise management. Their duties were many, and in some cases appeared to be paternalistic.
Many secretaries were female, perhaps because of their experience in vocational guidance or social work, or perhaps because some of their duties resembled a role stereotype of what a woman did – i.e. administering dining facilities, handling illnesses, etc.

5. Personnel Management – As Welfare Work
This approach grew out of the Social Gospel movement.
The moral behavior of unmarried females factory workers was a concern.
Early companies establishing welfare offices:
National Cash Register Company in 1897
John Bancroft and Sons in 1899
H.J. Heinz Company in 1902
International Harvester Company in 1903.

6. Personnel Management – Scientific Management Roots
Scientific management emphasized
Personnel selection
Placement
Wage plans
Other issues involving employee welfare.
Welfare work eventually was replace with “Employment Management” after 1910 as personnel practices were standardized and improved.

7. Psychology and the Individual
Wilhelm Wundt pioneered scientific psychology.
He opened the first laboratory in Leipzig in 1879.
He founded experimental psychology, leading to applied and industrial psychology.
William Wundt
Courtesy of Dr. Charles I. Abramson

8. The Birth of Industrial Psychology
Hugo Munsterberg ( ) applied scientific psychology to industrial problems
Best possible worker
Best possible work
Best possible effect
Munsterberg advocated
Tests for worker selection
Research in the learning process in training
Studied under Wundt
Hugo Munsterberg

9. Foundations of the Social Person – Industrial Sociology
Whiting Williams ( )
Emile Durkheim ( )
Charles H. Cooley ( )
Gestalt Psychology
Whiting Williams from Weekly London Tabloid, called 'ANSWERS',  dated 24th February 1934.

10. Whiting Williams ( )
Williams was a participant-observer. He put on the clothes and guise of a worker to study work first hand.
He emphasized the centrality of work.
He believed
that the job defines social status as well as a person’s place in the work situation
that the workplace is a part of a larger social system.

11. Whiting Williams
Williams saw earnings as a matter of social comparison – influencing how a person viewed himself relative to others (similar to equity theory).
The “Eleventh Commandment” – “Thou shalt not take thy neighbor for granted.”
Summary – Industrial sociology began with Williams and the Social Gospel influenced his thoughts.

12. Emile Durkheim: Contributions to Sociological Theory
Anomie – state of confusion, insecurity, and “normlessness.”
Mechanical societies were dominated by a collective consciousness.
Organic societies were characterized by interdependence and the division of labor leading to anomie.
Durkheim’s thinking influenced the human relationists’ view of the need for social solidarity.
Emile Durkheim

13. Social Behaviorism
C. H. Cooley – “Looking Glass Self” is a very interesting way of looking at the formation of self-efficacy, personality development, and other similar ideas.
Gestalt psychology – the whole system is greater than the sum of its parts.
Charles H. Cooley

14. Employee Participation in Decision Making
Three paths for giving employees a “voice” in the organization led to the democratization of the workplace:
Membership in a union that would represent the workers’.
Union-management cooperation
Employee representation plans.

15. The Trade Union Movement and Industrial Relations
John R. Commons ( ) was the “Father of Industrial Relations.”
He was probably the first to use the term “Human Resources.”
He wrote of the need for workers to have a voice in the workplace.
John R. Commons,
courtesy of the Wisconsin Electronic Reader

16. The Trade Union Movement and Industrial Relations
John R. Commons admired Taylor.
He was not anti-scientific management because it worked in some firms, but felt workers needed a say-so in the workplace.
John R. Commons,
courtesy of the Wisconsin Electronic Reader

17. The Trade Union Movement and Industrial Relations
American Federation of Labor formed under the leadership of Samuel Gompers in 1886.
Goal was to achieve gains for organized labor through bargaining power, not productivity.
Gompers said “more, more, and then more” was what labor wanted.
Samuel Gompers, courtesy of Library of Congress

18. The Era of Union- Management Cooperation
Morris Cooke, Ordway Tead, and Robert Valentine were examples of those who were trying to reformulate what labor felt was the unyielding, no union, position of scientific management.
The revised emphasis was to be on consent:
Union-management cooperation plans began when union membership was in decline in the early 1920’s. Unions agreed to accept scientific management if they were involved by electing representatives and could bargain about wages, hours working conditions, etc.

19. Employee Representation Plans
Employee representation plans did not involve unions but the workers elected representatives and participated through shop councils and committees.
Unions did not like these plans, but studies of these plans indicated they were progressive and improved labor-management relations.

20. Summary The 1920s was prosperous for employers and employees.
Despite a surplus of labor, employers created “industrial goodwill” with a variety of employee benefit programs.
Scientific Management inspired social scientists and psychologists to study the workplace.
Industrial Sociology began in the 1920s.
The Social Gospel spawned the industrial betterment/welfare movement.

21. Emergence of Management and Organization Theory
Week 5, Chapter 10
Emergence of Management and Organization Theory

22. Emergence of Management and Organization Theory
Henri Fayol – Modern approach to general management theory through the management process
Max Weber – Bureaucracy to provide a formal approach to organization theory

23. Henri Fayol Wren, History of Management Thought
Jules Henri Fayol was born to French parents in Constantinople.
His experiences as the Managing Director of Comambault formed his conception of management as the general activity of integrating functions of the firm in order to intelligently use resources to attain the objectives of the firm.
While Taylor was more production oriented, Fayol’s viewpoint was that of general management.
Henri Fayol Wren, History of Management Thought

24. Henry Fayol’s Conclusions
Managerial abilities differed from technical ones, and the success of the firm depended to a greater degree on good managers than good technicians.
Fayol felt that every organization required management regardless of whether it was “commercial, industry, politics, religion, war, …”
This statement suggests the universality of management in that this activity is necessary in all organizations.
It does not mean that managers are universal.

25. Fayol’s List of Managerial Qualities
Physical qualities: health, vigor, address
Mental qualities: ability to understand and learn, judgment, mental vigor, and adaptability
Moral qualities: energy, firmness, willingness to accept responsibility, initiative, loyalty, tact dignity
General education: general acquaintance with matters not belonging exclusively to the function performed
Special knowledge: that peculiar to the function, be it technical, commercial, financial, managerial, etc.
Experience: knowledge arising from the work proper; the recollection of lessons a person has derived from things

26. Henry Fayol’s Conclusions
Managerial abilities become more important as a person moves up in the hierarchy.
Technical abilities are less essential for upper level managers.
Management could be taught in schools and universities but was not because of the absence of management theory.
Fayol defined management theory as “a collection of principles, rules, methods, and procedures tried and checked by general experience.” (Fayol, 1949, p. 15)

27. Fayol’s Principles of Management
Division of work
Authority
Discipline
Unity of command
Unity of direction
Subordination of individual interests to the general interest
Remuneration
Centralization
Scalar Chain
Order
Equity
Stability of tenure of personnel
Initiative
Esprit de corps

28. Fayol’s Principles of Management
Keep in mind that there is nothing rigid in management. Fayol’s principles were guides, not absolutes or universals.
We will not stress each principle…the following is a discussion of a few key ones.
Henri Fayol

29. Fayol’s Principles of Management
Division of Labor – Fayol is rather traditional here regarding work design. However, he also used job enlargement when appropriate.
Authority – Fayol distinguished between formal authority and personal authority. He was aware of the need to combine and complement the authority of position with leadership qualities.
Authority must be commensurate with responsibility.

30. Fayol’s Principles of Management
Unity of command – Fayol felt that employees should receive supervision from only one person.
Unity of direction – “one head and one plan for a group of activities having the same objective” (Fayol, 1949, p. 32). This is still good advice for many organizations today.
Centralization – This is not centralized decision making. Instead it is finding where decisions should be made depending on the factors Fayol mentioned. (See Wren text for Fayol’s excellent discussion.)

31. Scalar Chain and the “Gangplank”
The “gangplank” is a means for providing lateral communications.
The Foreman (F) wishing to communicate with Foreman (P) without reporting upward through the President (A) can use a “gangplank to bypass organizational red tape.

32. Figure 10.1 - Scalar Chain and the “Gangplank”

33. Fayol’s Elements of Management
Planning (could also be translated as foresight)
Plans depended on the firm’s resources, work in process, and future trends that could not be predetermined (resembled a strategic audit).
Plans needed to have the characteristics of unity, continuity, flexibility, and precisions.
Long range planning was a unique idea for his time but a valuable contribution to the evolution of strategic management.

34. Fayol’s Elements of Management
Organizing – Fayol included both the design of the organization and the staffing job of the manager in this element.
Structure of the organization had to be consistent with the objectives, resources, and requirements of the firm
Functional (horizontal) and scalar (vertical) growth
Span of control – narrow at the top but greater at lower levels
Staff – advisory personnel are needed by line managers
Staffing (separate issue from staff above) – involved selection, evaluation, and training of personnel.

35. Fayol’s Elements of Management
Command – Fayol’s term for directing, leading, supervising, etc.
Coordination – harmonizing the activities of the organization
Control – checking on performance to identify and make corrections if necessary

36. Fayol’s Elements of Management
Fayol spent relatively little time discussing command, coordination, and control.
Planning, organizing, and staffing set the stage for where we are going and when and how we intend to get there.
These plans, people, and resources are activated, led, motivated, and coordinated.
As our information system brings us performance data, the control element enables management to renew the elements by reorganizing or whatever is indicated by our control system.

37. Fayol’s Elements of Management
Management is a continuous process, not a neat set of discrete elements and functions that are performed without coordination of other elements.
Fayol’s perspective was that of a strategist.

38. Max Weber (1864-1920) Bureaucracy
Weber’s Germany was characterized by cartels which limited competition (anti-trust laws limited this in the U.S.).
To Weber, capitalism in the US encouraged innovation and competition.
Max Weber

39. Max Weber and Bureaucracy
His interest in the U.S. Capitalistic spirit led him to ask:
If a market oriented society could operate large organizations on some rational, systematic basis?

40. Bureaucracy as a Theory
It was management by the office not by a person.
It was an “ideal,” the “pure form” of organization but this did not mean that it was the most desirable.
Weber is suggested as the “Founder of Organization Theory.”

41. Three “Pure” Types of Legitimate Authority
Rational-legal – “right of those elevated to authority…to issue commands.”
Traditional – rested on the belief “in the sanctity of immemorial traditions and the legitimacy of the status of those exercising authority under them.”
Charismatic – based on “devotion to the specific and exceptional sanctity, heroism, or exemplary character of an individual person.” (Weber, 1947, p. 328)
Weber believed that rational type of authority must be the basis for a bureaucracy.

42. Elements of Bureaucracy
The division of labor and authority and responsibility were clearly defined for each member and were legitimatized as official duties.
Offices or positions were organized in a hierarchy of authority resulting in a chain of command or the scalar principle.
All organizational members were selected on the basis of technical qualifications through formal examinations or by virtue of training or education.
Max Weber

43. Weber’s Elements of a Bureaucracy
Officials were appointed, not elected.
Administrative officials worked for fixed salaries and were career officials.
Administrative officials were not owners of the units they administered.
Administrators were subject to strict rules, discipline, and controls regarding the conduct of their official duties. These rules and controls were impersonal and uniformly applied in all cases.

44. Summary
The emergence of management and organization theory had two forms:
Fayol’s principles and elements of management
Weber’s rationalized organization structure for efficiency
Fayol stressed: planning and organizing , and education for management.
Weber sought leadership based on rational-legal authority, not tradition or charisma.