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MGT 200 Management Theory Required Reading: Chapter 2 of textbook

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1 MGT 200 Management Theory Required Reading: Chapter 2 of textbook
Peter Senge Article Meg Wheatly Interview Today’s Topic: History of Management Theory

2 Learning Objectives Know the basic premises of six management theories
Understand the context for the evolution and development of these theories Know the basic concepts of several current trends in management Explore three forces that are changing the context for managerial work today

3 Management Theories/Concepts
Division of Labor Scientific Management Administrative Theories Behavioral Theory Chaos Theory Contingency Theory

4 Division of Labor Adam Smith: “The Wealth of Nations”
Premise: Increase productivity by breaking down jobs into narrow, repetitive tasks

5 Scientific Management
Management practices should be based on fact and observation Focuses on the relationship between individual workers and their tools or machines

6 Scientific Management
Frederick Taylor There is “one best way” to perform a task Time and motion studies Money motivates employees to do their best Frank and Lillian Gilbreth Followers of Taylor Henry Gantt Control systems for production scheduling

7 Assessing Scientific Management
Many aspects used today Misreads human side of work Simple tasks and clear rules don’t guarantee results

8 Administrative Theories
Focus on managers and their behavior Henri Fayol, French industrialist Management is a discipline with principles that can be taught Max Weber Developed the concept of “bureaucracy” as the ideal structure for an organization

9 Fayol’s Administrative Principles
1. Division of labor 2. Authority to give orders 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interest 7. Remuneration: pay for work done 8. Centralization 9. Scalar chain 10. Order 11. Equity 12. Stability and tenure of staff 13. Initiative 14. Esprit de corps

10 Bureaucratic Management
Formal system of rules and procedures Impersonality Hierarchical structure with detailed authority Clear division of labor Rationality Career commitment

11 Assessing Administrative Theories
Managers still use many of Fayol’s principles Overemphasizes the rational behavior of managers Advantages & disadvantages of bureaucracy Benefits: efficiency, consistency Costs: rigid, slow, difficult to adapt

12 Behavioral Theory Focuses on the human aspects of organizations
Mary Parker Follet Management is a dynamic process Workers should be involved in decisions Chester Barnard Organizations are social systems Managers need “buy-in” of employees

13 Hawthorne Studies A “scientific theory” study that provided strong support for the behavioral viewpoint The Hawthorne Effect: Productivity is likely to increase when employees are given special attention regardless of whether working conditions change The social environment of employees also greatly influences productivity

14 Behavioral Theory Basic Assumptions
Employees are motivated by social needs Social forces exerted by peers is strong Employees respond to managers who help them satisfy their needs Managers need to coordinate the work of subordinates democratically to improve efficiency

15 Behavioral Theory Assessment
Adds greatly to the mechanistic view of managing people But human relation skills alone won’t guarantee increased productivity or high quality work Managing the human aspects of an organization is a very complex task

16 Chaos Theory Margaret Wheatley, 1992
Look at an organization as a living organism Learn management from natural systems Basic Premise: Self-organization the tendency of living systems to organize into structure without any externally imposed plan

17 Chaos Theory Principles
Information access Everyone has easy access to all the information they need to do their job Relationships Everyone has easy access to anyone they need to do their job Self-reference The organizations core identity or purpose

18 Chaos Theory Assessment
Goes against many traditional beliefs about role of managers Requires educated, involved employees Requires change in communication methods Clear vision/joint purpose is crucial

19 Contingency Viewpoint
There is no best way to manage in all situations Use the different management viewpoints as appropriate to deal with various situations Managers must be able to diagnose and understand a situation thoroughly

20 Contingency Viewpoint
Basic contingency variables: External environment Technology Individuals Importance of each variable depends on type of situation and problems being faced

21 Assessing the Contingency Viewpoint
Useful approach - makes sense to change viewpoint depending on situation Most managers use intuitively Diagnosis very important to determine best approach Many don’t consider to really be a “theory” of management just draws on other theories

22 Management Theories Summary
Division of Labor - Adam Smith Scientific Management - Taylor, Gilbreths, Gantt Administrative Theories - Fayol, Weber Organizational Behavior - Follett, Barnard Chaos Theory - Wheatley Contingency Theory

23 What’s Next? Current Trends and Issues in Management
Read Chapter 2: pages 40-53 Read Senge handout on Systems Thinking

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