1. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-11-1 ©2013 John Wiley & Sons, Inc. All rights reserved. JOHN R. SCHERMERHORN, JR. MANAGEMENT 12 th Edition Chapter 2 Management Learning Past to Present

2. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-2 Planning Ahead — Chapter 2 Study Questions 1.What can be learned from classical management thinking? 2.What insights come from behavioral management approaches? 3.What are the foundations of modern management thinking ?

3. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-3 Chapter 2 Learning Dashboard 1.Classical Management Approaches 1.Scientific management 2.Administrative principles 3.Bureaucratic organization 2.Behavioral Management Approaches 1.Follett’s organizations as communities 2.The Hawthorne studies 3.Maslow’s theory of human needs 4.McGregor’s Theory X and Theory Y 5.Argyris’s theory of adult personality

4. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-4 Chapter 2 Learning Dashboard 3.Modern Management Foundations 1.Quantitative analysis and tools 2.Organization as systems 3.Contingency thinking 4.Quality management 5.Knowledge management and organizational learning 6.Evidence-based management

5. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-5 Figure 2.1 Major branches in the classical approach to management

6. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-6 Takeaway 1: Classical Management Approaches Four guiding principles of scientific management (Frederick Taylor) 1.Develop for every job a “science” that includes rules of motion, standardized work implements, and proper working conditions. 2.Carefully select workers with the right abilities for the job. 3.Carefully train workers to do the job and give them the proper incentives to cooperate with the job “science.” 4.Support workers by carefully planning their work and by smoothing the way as they go about their jobs. 6

7. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-7 Takeaway 1: Classical Management Approaches Scientific management (the Gilbreths) – Motion study Science of reducing a job or task to its basic physical motions – Eliminating wasted motions improves performance

8. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-8 Takeaway 1: Classical Management Approaches Practical lessons from scientific management – Make results-based compensation a performance incentive – Carefully design jobs with efficient work methods – Carefully select workers with the abilities to do these jobs – Train workers to perform jobs to the best of their abilities – Train supervisors to support workers so they can perform jobs to the best of their abilities

9. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-9 Takeaway 1: Classical Management Approaches Administrative principles (Henri Fayol) — rules/duties of management: Foresight to complete a plan of action for the future Organization to provide and mobilize resources to implement the plan Command to lead, select, and evaluate workers to get the best work toward the plan Coordination to fit diverse efforts together and ensure information is shared and problems solved Control to make sure things happen according to plan and to take necessary corrective action

10. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-10 Takeaway 1: Classical Management Approaches Administrative principles (Henri Fayol) – Scalar chain there should be a clear and unbroken line of communication from the top to the bottom of the organization – Unity of command each person should receive orders from only one boss – Unity of direction one person should be in charge of all activities with the same performance objective

11. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-11 Takeaway 1: Classical Management Approaches Bureaucratic organization (Max Weber) – Bureaucracy An ideal, intentionally rational, and very efficient form of organization Based on principles of logic, order, and legitimate authority

12. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-12 Takeaway 1: Classical Management Approaches Characteristics of bureaucratic organizations: – Clear division of labor – Clear hierarchy of authority – Formal rules and procedures – Impersonality – Careers based on merit 12

13. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-13 Takeaway 1: Classical Management Approaches Possible disadvantages of bureaucracy: – Excessive paperwork or “red tape” – Slowness in handling problems – Rigidity in the face of shifting needs – Resistance to change – Employee apathy

14. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-14 Figure 2.2 Foundations in the behavioral or human resource approaches to management Human resource approaches Assumption: People are social and self- actualizing Theory of human needs Abraham Maslow Hawthorne studies Elton Mayo Organizations as communities Mary Parker Follett Theory X and Theory Y Douglas McGregor Personality and organization Chris Argyris

15. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-15 Takeaway 2: Behavioral Management Approaches Organizations as communities – Mary Parker Follett – Groups and human cooperation: Groups allow individuals to combine their talents for a greater good Organizations are cooperating “communities” of managers and workers Manager’s job is to help people cooperate and achieve an integration of interests

16. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-16 Takeaway 2: Behavioral Management Approaches Organizations as communities – Forward-looking management insights: precursor of employee ownership, profit sharing, and gain-sharing Making every employee an owner creates a sense of collective responsibility precursor of systems thinking Business problems involve a variety of inter-related factors precursor of managerial ethics and social responsibility Private profits relative to public good

17. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-17 Takeaway 2: Behavioral Management Approaches Hawthorne studies – Initial study examined how economic incentives and physical conditions affected worker output – No consistent relationship found – “Psychological factors” influenced results

18. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-18 Takeaway 2: Behavioral Management Approaches Hawthorne studies (cont.) – Social setting and human relations Manipulated physical work conditions to assess impact on output Designed to minimize the “psychological factors” of previous experiment Mayo and colleagues concluded: – New “social setting” led workers to do good job – Good “human relations” = higher productivity

19. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-19 Takeaway 2: Behavioral Management Approaches Hawthorne studies (cont.) – Employee attitudes and group processes Some things satisfied some workers but not others People restricted output to adhere to group norms

20. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-20 Takeaway 2: Behavioral Management Approaches Lessons from the Hawthorne Studies: – Social and human concerns are keys to productivity – Hawthorne effect — people who are singled out for special attention perform as expected

21. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-21 Takeaway 2: Behavioral Management Approaches Maslow’s theory of human needs – A need is a physiological or psychological deficiency a person feels compelled to satisfy – Need levels: Physiological Safety Social Esteem Self-actualization

22. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-22 Figure 2.3 Maslow’s hierarchy of human needs

23. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-23 Takeaway 2: Behavioral Management Approaches Maslow’s theory of human needs – Deficit principle A satisfied need is not a motivator of behavior – Progression principle A need becomes a motivator once the preceding lower-level need is satisfied – Both principles cease to operate at self- actualization level

24. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-24 Takeaway 2: Behavioral Management Approaches McGregor’s Theory X assumes that workers: – Dislike work – Lack ambition – Are irresponsible – Resist change – Prefer to be led

25. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-25 Takeaway 2: Behavioral Management Approaches McGregor’s Theory Y assumes that workers are: – Willing to work – Capable of self control – Willing to accept responsibility – Imaginative and creative – Capable of self-direction

26. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-26 Takeaway 2: Behavioral Management Approaches Implications of Theory X and Theory Y: – Managers create self-fulfilling prophecies – Theory X managers create situations where workers become dependent and reluctant – Theory Y managers create situations where workers respond with initiative and high performance Central to notions of empowerment and self- management

27. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-27 Takeaway 2: Behavioral Management Approaches Argyris’s theory of adult personality – Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality – Psychological success occurs when people define own goals

28. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-28 Takeaway 2: Behavioral Management Approaches Argyris’s theory of adult personality – Management practices should accommodate the mature personality by: Increasing task responsibility Increasing task variety Using participative decision making

29. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-29 Takeaway 3: Modern Management Foundations Foundations for continuing developments in management Quantitative analysis and toolsSystems view of organizationsContingency thinkingCommitment to quality and performanceKnowledge management and learning organizationsEvidence-based management

30. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-30 Takeaway 3: Modern Management Foundations Management science or operations research The scientific applications of mathematical techniques to management problems Value chain analysis Supply chain management Inventory management Quality control Queuing theory Linear programming Network models

31. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-31 Takeaway 3: Modern Management Foundations Quantitative Analysis and Tools Analytics – the use of large data bases and mathematics to solve problems and make informed decisions using systematic analysis Typical quantitative approach to managerial problem- solving – Problem encountered, it is systematically analyzed, appropriate mathematical models and computations applied, optimal solution identified

32. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-32 Takeaway 3: Modern Management Foundations Organizations as Systems – System Collection of interrelated parts that function together to achieve a common purpose – Subsystem A smaller component of a larger system – Open systems Organizations that interact with their environments in the continual process of transforming resource inputs into outputs

33. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-33 Figure 2.4 Organizations as complex networks of interacting subsystems

34. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-34 Takeaway 3: Modern Management Foundations Contingency thinking – Tries to match managerial responses with problems and opportunities unique to different situations – No “one best way” to manage – Appropriate way to manage depends on the situation

35. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-35 Takeaway 3: Modern Management Foundations Quality management – Managers and workers in progressive organizations are quality conscious Quality and competitive advantage are linked – Total quality management (TQM) Comprehensive approach to continuous quality improvement for a total organization Creates context for the value chain

36. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-36 Takeaway 3: Modern Management Foundations – Continuous improvement Continual search for new ways to improve quality Something always can and should be improved – ISO certification Global quality benchmark Refine and upgrade quality to meet ISO standards

37. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-37 Takeaway 3: Modern Management Foundations Knowledge Management and Organizational Learning – Knowledge management is the process of using intellectual capital for competitive advantage – Portfolio of intellectual assets include patents, intellectual property rights, trade secrets, and accumulated knowledge of the entire workforce

38. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-38 Takeaway 3: Modern Management Foundations Learning organizations – Organizations that are able to continually learn and adapt to new circumstances – Core ingredients include: Encourage learning Information sharing Teamwork Empowerment Participation

39. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-39 Takeaway 3: Modern Management Foundations Evidence-Based Management – Making management decisions on “hard facts” about what really works

40. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 2-40 Takeaway 3: Modern Management Foundations Evidence-Based Positive Human Resource Management Practices – Employment security – Selective hiring – Self-managing teams – High pay based on merit – Training and development – Reduced status distinctions – Shared information