2.12.13 Game Plan Turn in Entrepreneur FB Pages History of Management Notes Partner work on exploring modern

management

We will take notes together AND on our own…I’ll explain!

• Together = History of Management and Industrial Revolution Breakdown

• On Your Own = Nine theories of management explored:

• Scientific Management• Hawthorne Studies• Maslow’s Hierarchy of Needs• Theory X• Theory Y• Centralization• Decentralization• TQM• Theory Z

A little history on modern management…

Business Management

When did management start? Who’s the BOSS?

Management has always existed since one human being has tried to direct another

Different times=different challenges Due to the industrial revolution, these

challenges dramatically changed

What is the industrial revolution? Period (late 1800’s)

during which the U.S. developed an industrial economy

Caused by: advances in manufacturing, telegraph and cable lines, transportation advances

Example: farmers plowing their fields by hand to…horse drawn plows to…machine run plows

Why is this important to managers?

Many people left farms to work in factories where they were managed by professional managers

Entrepreneurs emerged in their companies to become managers

James Duke = TOBACCO

John Rockefeller = OIL

Andrew Carnegie = STEEL

J.P. Morgan = BANKING

Cornelius = STEAMSHIPS

Vanderbilt and RAILROADS

Captains of the Industry

What happened as a result of the captains of the industries?

Monopolies were created

Monopolies: one party maintains total control over a type of industry

Trusts were created Trust: giant

industrial monopoly E.g. Rockefeller

lowered prices for oil to force competitors out

The Break-up of the Trusts!

Worries about the concentration of wealth in the hands of few

Questions about driving competition out of business– bad for the economy

1887 Interstate Commerce Act: forced railroads to publish rates and forbade them to change rates with out notifying the public

1890: Sherman Act: illegal for companies to create monopolies and restored competition

Now…how do we manage?Fredrick W. Taylor

did time and motion studies to determine best way to perform a particular task

Match workers to jobs they are best suited for and let workers be independent

Is his work really useful?YES! Marriott Corporation found that

customer satisfaction with a hotel depends largely on how well a customer is treated during the first 10 minutes

So…they created a new system to make sure that these efforts are carried out Every day the company makes a list of arriving guests Place the names of the guests expected to arrive earliest at the

top of the list Cleaning staff cleans those rooms first (so they don’t have to

wait) Marriott also combined roles of doorperson, bellhop, and desk

clerk – combo = guest service agent

Hawthorne Studies

1920’s research on working conditions and productivity

Took place at Hawthorn Electric plant in Cicero, IL He lowered the lighting in the factory (i.e.,

it was pretty dark! Expected productivity to fall…did it? NO! Productivity increased

Harvard psychologist brought in and did 5 years worth of testing

What did they test?Effects of different

wage paymentsRest periodsWork hoursRegardless of the

variable tested… productivity increased

Conclusion of HawthornProductivity rose because workers

worked harder when they received attention

“Hawthorne Effect” is when change of any kind increases productivity

Other conclusions: factors other than physical productivity such as social conditions, group pressures, individual recognition effect productivity and employee moral

Maslow and the Hierarchy of Needs

People fulfill lower needs

before seeking higher needs Theory of Motivation

Applying Maslow’s Theory to Management

Provide salary (to buy food and housing) Provide heating/AC, lighting, noise level (physical needs)

Clearly communicate the benefits of working for a particular company e.g. security=insurance (security needs)

Work environment where employees interact (social needs)

Employee recognition, job titles, designated parking spaces, awards (ego/status needs)

Opportunities to be creative at work; include in decision making process (self-actualization)

Theory X and Y – Established in the 60’s by Douglas McGregor of MIT

X People are lazy and

avoid working Strict rules,

decisions made only by managers

Management knows all the answers

Y Workers find

satisfaction in their work

People will work productively if put in the right environment

Freedom and ability to make mistakes

Theory X and Y togetherMost companies

combine theories of motivation

Freedom in some aspects, control in others

E.g. flexible work schedule, but formal dress code

Centralization vs. Decentralization Central: concentration of power in a few key decision

makers Popular in early 20th century Henry Ford almost destroyed his company because he

would not delegate (out of fear)

De-central: decisions are made by managers at various levels within an organization 1920’s example of GM: Alfred Sloan, GM’s chair, broke

the company up into five divisions: Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac

Different cars for different people/different goals for each segment

Total Quality Management 1950’s push using

mathematical models to QUANTIFY management.

In comes W. Edwards Deming

Total quality management (TQM) – system of management based on involving all employees in a constant process of improving quality and productivity by improving how they work.

Adopted widely by American businesses.

Focus is on satisfying both customers and employees.

Deming’s Fourteen Points1. Create consistent purpose to

remain competitive2. Adopt a new philosophy – no

more mistakes or defects3. Stop depending on mass

production4. Consider quality as well as

price in awarding business5. Constantly improve the

system of production and service

6. Institute a vigorous program of job training

7. Adopt and implement leadership

8. Drive out fear so that everyone may work effectively

9. Break down barriers between departments to work as a team

10.Eliminate numerical goals, posters, and slogans asking for new levels of production without new methods

11.Eliminate work standards that prescribe numerical quotas

12.Remove barriers that stand between hourly workers and pride of workmanship

13.Encourage education and self-improvement for everyone

14.Create a structure in top management that will work every day to achieve these points!

Japanese Management More employee

participation in collective decision making

Concern for personal well-being of employees

Teams vs. individuals

Theory ZBusiness management

theory that integrates Japanese and American business practices

Long term employment Individual responsibilitySlow evaluation and

promotionHolistic concern

Applying Management Theories Activity1. Visit my website to locate your first subject-based

paper for my class. Outline: Pick 3 people. You must then interview and/or

research the management style that each employs. You must back up your “definition” of this person’s style with supporting details/facts. Here is the profile of who must be depicted: One must be a person that you have worked for or a

business leader in the community. (Note: If you have not yet had a job, do some research to look into a prominent local business leader!)

One must be a teacher here in the building. One must be a worldly figure. (Ghandi, Hillary

Clinton, etc.) Please do not use these examples!

2. Due Monday, Feb. 26th, 2013