Management Yesterday and Management Yesterday and TodayToday
Ch 2Ch 2
Historical Background of Historical Background of ManagementManagement
Ancient ManagementAncient Management Egypt (pyramids) and China (Great Wall)Egypt (pyramids) and China (Great Wall) Venetians (floating warship assembly lines)Venetians (floating warship assembly lines)
Adam SmithAdam Smith Published Published “The Wealth of Nations” “The Wealth of Nations” in 1776in 1776
Advocated the division of labor (job specialization) to Advocated the division of labor (job specialization) to increase the productivity of workersincrease the productivity of workers
Industrial RevolutionIndustrial Revolution Substituted machine power for human laborSubstituted machine power for human labor Created large organizations in need of managementCreated large organizations in need of management
Major Approaches to ManagementMajor Approaches to Management
Scientific ManagementScientific ManagementGeneral Administrative TheoryGeneral Administrative TheoryQuantitative ManagementQuantitative ManagementOrganizational BehaviorOrganizational BehaviorSystems ApproachSystems ApproachContingency ApproachContingency Approach
Scientific ManagementScientific Management
Fredrick Winslow TaylorFredrick Winslow TaylorThe “father” of scientific managementThe “father” of scientific managementPublished Published Principles of Scientific ManagementPrinciples of Scientific Management
(1911)(1911)The theory of scientific management:The theory of scientific management:
Using scientific methods to define the “one best way” for Using scientific methods to define the “one best way” for a job to be donea job to be done
Putting the right person on the job with the correct Putting the right person on the job with the correct tools and equipmenttools and equipment
Having a standardized method of doing the jobHaving a standardized method of doing the job Providing an economic incentive to the workerProviding an economic incentive to the worker
Scientific Management (cont’d)Scientific Management (cont’d)
Frank and Lillian GilbrethFrank and Lillian Gilbreth Focused on increasing worker productivity through Focused on increasing worker productivity through
the reduction of wasted motionthe reduction of wasted motion Developed the microchronometer to time worker Developed the microchronometer to time worker
motions and optimize performance.motions and optimize performance.
How Do Today’s Managers Use Scientific How Do Today’s Managers Use Scientific Management?Management? Use time and motion studies to increase productivityUse time and motion studies to increase productivity Hire the best qualified employeesHire the best qualified employees Design incentive systems based on outputDesign incentive systems based on output
General Administrative TheoristsGeneral Administrative Theorists
Henri FayolHenri Fayol Believed that the practice of management was distinct Believed that the practice of management was distinct
from other organizational functions from other organizational functions Developed fourteen principles of management that Developed fourteen principles of management that
applied to all organizational situationsapplied to all organizational situations
Max WeberMax Weber Developed a theory of authority based on an ideal Developed a theory of authority based on an ideal
type of organization (bureaucracy)type of organization (bureaucracy)Emphasized rationality, predictability, impersonality, Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism.technical competence, and authoritarianism.
Quantitative Approach to Quantitative Approach to ManagementManagement
Quantitative ApproachQuantitative ApproachAlso called Also called operations researchoperations research or or
management sciencemanagement scienceEvolved from mathematical and statistical Evolved from mathematical and statistical
methods developed to solve WWII military methods developed to solve WWII military logistics and quality control problemslogistics and quality control problems
Focuses on improving managerial decision Focuses on improving managerial decision making by applying:making by applying:Statistics, optimization models, information Statistics, optimization models, information
models, and computer simulationsmodels, and computer simulations
Understanding Organizational Understanding Organizational BehaviorBehavior
Organizational Behavior (OB)Organizational Behavior (OB)The study of the actions of people at work; The study of the actions of people at work;
people are the most important asset of an people are the most important asset of an organizationorganization
Early OB AdvocatesEarly OB AdvocatesRobert OwenRobert OwenHugo MunsterbergHugo MunsterbergMary Parker FollettMary Parker FollettChester BarnardChester Barnard
The Hawthorne StudiesThe Hawthorne Studies A series of productivity experiments conducted A series of productivity experiments conducted
at Western Electric from 1927 to 1932.at Western Electric from 1927 to 1932. Experimental findingsExperimental findings
Productivity unexpectedly increased under imposed Productivity unexpectedly increased under imposed adverse working conditions.adverse working conditions.
The effect of incentive plans was less than expected.The effect of incentive plans was less than expected.
Research conclusionResearch conclusion Social norms, group standards and attitudes more Social norms, group standards and attitudes more
strongly influence individual output and work behavior strongly influence individual output and work behavior than do monetary incentives.than do monetary incentives.
The Systems ApproachThe Systems Approach
System DefinedSystem Defined A set of interrelated and interdependent parts A set of interrelated and interdependent parts
arranged in a manner that produces a unified whole.arranged in a manner that produces a unified whole.
Basic Types of SystemsBasic Types of Systems Closed systemsClosed systems
Are not influenced by and do not interact with their Are not influenced by and do not interact with their environment (all system input and output is internal)environment (all system input and output is internal)
Open systemsOpen systems Dynamically interact to their environments by taking in inputs Dynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed into and transforming them into outputs that are distributed into their environmentstheir environments
Implications of the Systems Implications of the Systems ApproachApproach
Coordination of the organization’s parts is Coordination of the organization’s parts is essential for proper functioning of the essential for proper functioning of the entire organization.entire organization.
Decisions and actions taken in one area of Decisions and actions taken in one area of the organization will have an effect in the organization will have an effect in other areas of the organization.other areas of the organization.
Organizations are not self-contained and, Organizations are not self-contained and, therefore, must adapt to changes in their therefore, must adapt to changes in their external environment.external environment.
The Contingency ApproachThe Contingency Approach
Contingency Approach DefinedContingency Approach DefinedAlso sometimes called the situational Also sometimes called the situational
approach.approach.
There is no one universally applicable set of There is no one universally applicable set of management principles (rules) by which to management principles (rules) by which to manage organizations.manage organizations.
Organizations are individually different, face Organizations are individually different, face different situations (contingency variables), different situations (contingency variables), and require different ways of managing.and require different ways of managing.
Current Trends and IssuesCurrent Trends and Issues
GlobalizationGlobalizationEthicsEthicsWorkforce DiversityWorkforce DiversityEntrepreneurshipEntrepreneurshipE-businessE-businessKnowledge ManagementKnowledge ManagementLearning OrganizationsLearning OrganizationsQuality ManagementQuality Management
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
GlobalizationGlobalizationManagement in international organizationsManagement in international organizationsPolitical and cultural challenges of operating Political and cultural challenges of operating
in a global marketin a global marketEthicsEthics
Increased emphasis on ethics education in Increased emphasis on ethics education in college curriculumscollege curriculums
Increased creation and use of codes of ethics Increased creation and use of codes of ethics by businessesby businesses
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
Workforce DiversityWorkforce Diversity Increasing heterogeneity in the workforceIncreasing heterogeneity in the workforce
More gender, minority, ethnic, and other forms of More gender, minority, ethnic, and other forms of diversity in employeesdiversity in employees
Aging workforceAging workforceOlder employees who work longer and not retireOlder employees who work longer and not retireThe cost of public and private benefits for older The cost of public and private benefits for older
workers will increase workers will increase Increased demand for products and services Increased demand for products and services
related to agingrelated to aging
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
Entrepreneurship DefinedEntrepreneurship Defined The process whereby an individual or group of The process whereby an individual or group of
individuals use organized efforts to create value and individuals use organized efforts to create value and grow by fulfilling wants and needs through innovation grow by fulfilling wants and needs through innovation and uniqueness.and uniqueness.
Entrepreneurship processEntrepreneurship process Pursuit of opportunitiesPursuit of opportunities Innovation in products, services, or business methodsInnovation in products, services, or business methods Desire for continual growth of the organizationDesire for continual growth of the organization
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
E-Business (Electronic Business)E-Business (Electronic Business) The work preformed by an organization using The work preformed by an organization using
electronic linkages to its key constituencieselectronic linkages to its key constituencies
E-commerce: the sales and marketing component of E-commerce: the sales and marketing component of an e-businessan e-business
Categories of E-BusinessesCategories of E-Businesses E-business enhanced organizationE-business enhanced organization
E-business enabled organizationE-business enabled organization
Total e-business organizationTotal e-business organization
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
Knowledge ManagementKnowledge ManagementThe cultivation of a learning culture where The cultivation of a learning culture where
organizational members systematically gather organizational members systematically gather and share knowledge with others in order to and share knowledge with others in order to achieve better performance.achieve better performance.
Learning OrganizationLearning OrganizationAn organization that has developed the An organization that has developed the
capacity to continuously learn, adapt, and capacity to continuously learn, adapt, and change.change.
Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
Quality ManagementQuality ManagementA philosophy of management driven by A philosophy of management driven by
continual improvement in the quality of work continual improvement in the quality of work processes and responding to customer needs processes and responding to customer needs and expectationsand expectations
Inspired by the total quality management Inspired by the total quality management (TQM) ideas of Deming and Juran(TQM) ideas of Deming and Juran
Quality is not directly related to cost.Quality is not directly related to cost.