2 Historical Background of Management Ancient ManagementEgypt (pyramids) and China (Great Wall)Venetians (floating warship assembly lines)Adam SmithPublished “The Wealth of Nations” in 1776Advocated the division of labor (job specialization) to increase the productivity of workersIndustrial RevolutionSubstituted machine power for human laborCreated large organizations in need of management
3 Major Approaches to Management Scientific ManagementGeneral Administrative TheoryQuantitative ManagementOrganizational BehaviorSystems ApproachContingency Approach
4 Scientific Management Fredrick Winslow TaylorThe “father” of scientific managementPublished Principles of Scientific Management (1911)The theory of scientific management:Using scientific methods to define the “one best way” for a job to be donePutting the right person on the job with the correct tools and equipmentHaving a standardized method of doing the jobProviding an economic incentive to the worker
5 Scientific Management (cont’d) Frank and Lillian GilbrethFocused on increasing worker productivity through the reduction of wasted motionDeveloped the microchronometer to time worker motions and optimize performance.How Do Today’s Managers Use Scientific Management?Use time and motion studies to increase productivityHire the best qualified employeesDesign incentive systems based on output
6 General Administrative Theorists Henri FayolBelieved that the practice of management was distinct from other organizational functionsDeveloped fourteen principles of management that applied to all organizational situationsMax WeberDeveloped a theory of authority based on an ideal type of organization (bureaucracy)Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism.
7 Quantitative Approach to Management Also called operations research or management scienceEvolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problemsFocuses on improving managerial decision making by applying:Statistics, optimization models, information models, and computer simulations
8 Understanding Organizational Behavior Organizational Behavior (OB)The study of the actions of people at work; people are the most important asset of an organizationEarly OB AdvocatesRobert OwenHugo MunsterbergMary Parker FollettChester Barnard
9 The Hawthorne StudiesA series of productivity experiments conducted at Western Electric from 1927 to 1932.Experimental findingsProductivity unexpectedly increased under imposed adverse working conditions.The effect of incentive plans was less than expected.Research conclusionSocial norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.
10 The Systems Approach System Defined Basic Types of Systems A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.Basic Types of SystemsClosed systemsAre not influenced by and do not interact with their environment (all system input and output is internal)Open systemsDynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments
11 Implications of the Systems Approach Coordination of the organization’s parts is essential for proper functioning of the entire organization.Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.Organizations are not self-contained and, therefore, must adapt to changes in their external environment.
12 The Contingency Approach Contingency Approach DefinedAlso 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.
13 Current Trends and Issues GlobalizationEthicsWorkforce DiversityEntrepreneurshipE-businessKnowledge ManagementLearning OrganizationsQuality Management
14 Current Trends and Issues (cont’d) GlobalizationManagement in international organizationsPolitical and cultural challenges of operating in a global marketEthicsIncreased emphasis on ethics education in college curriculumsIncreased creation and use of codes of ethics by businesses
15 Current Trends and Issues (cont’d) Workforce DiversityIncreasing heterogeneity in the workforceMore gender, minority, ethnic, and other forms of diversity in employeesAging workforceOlder employees who work longer and not retireThe cost of public and private benefits for older workers will increaseIncreased demand for products and services related to aging
16 Current Trends and Issues (cont’d) Entrepreneurship DefinedThe process whereby an individual or group of individuals use organized efforts to create value and grow by fulfilling wants and needs through innovation and uniqueness.Entrepreneurship processPursuit of opportunitiesInnovation in products, services, or business methodsDesire for continual growth of the organization
17 Current Trends and Issues (cont’d) E-Business (Electronic Business)The work preformed by an organization using electronic linkages to its key constituenciesE-commerce: the sales and marketing component of an e-businessCategories of E-BusinessesE-business enhanced organizationE-business enabled organizationTotal e-business organization
18 Current Trends and Issues (cont’d) Knowledge ManagementThe cultivation of a learning culture where organizational members systematically gather and share knowledge with others in order to achieve better performance.Learning OrganizationAn organization that has developed the capacity to continuously learn, adapt, and change.
19 Current Trends and Issues (cont’d) Quality ManagementA philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectationsInspired by the total quality management (TQM) ideas of Deming and JuranQuality is not directly related to cost.