Classical Management: Scientific Management

Study Notes

Scientific Management
- Founded by Frederick Taylor
- Aims to develop a "science" for each job
- Four principles:
  - Develop a science for each job
  - Hire workers with the right abilities
  - Train and motivate workers
  - Divide work equally between managers and workers
- Techniques:
  - Time and motion study
  - Differential piece-rate payment system
- Criticisms:
  - Workers were seen as incapable of understanding their work
  - Workers were only motivated by money
  - Increased monotony of work
  - Dehumanizing
Functional Management
- Taylor's view on organizational structure
- "Unity of command principle" - military bureaucratic model
- Eight functional foremen:
  - Route Clerk
  - Instruction Card Clerk
  - Time and Cost Clerk
  - Shop Disciplinarian
  - Gang Boss
  - Speed Boss
  - Repair Boss
  - Inspector
Henry Ford's Mass Production Methods
- Aims to achieve economies of scale
- Produced over 15 million Model T cars
- Innovations:
  - Assembly line
  - Vertical integration of production
- Social benefits:
  - High wages for workers
  - 8-hour work day and 5-day work week
  - Kindergarten for workers' children

Henri Fayol
- Five duties of managers:
  - Foresight and planning
  - Organizing
  - Commanding
  - Coordinating
  - Controlling
- Six main groups of activities:
  - Technical
  - Commercial
  - Financial
  - Security
  - Accounting
  - Managerial
- Principles of management:
  - Scalar chain
  - Unity of command
  - Unity of direction
  - Authority
  - Discipline

Max Weber
- Defined bureaucracy in the late 19th century
- Focused on definitions of authority, responsibility, and process
- Ideal bureaucracy:
  - Clear division of labor
  - Clear hierarchy of authority
  - Formal rules and procedures
  - Impersonality
  - Careers based on merit
- Negative connotations:
  - Excessive paperwork
  - Slowness in handling problems
  - Resistance to change
  - Employee apathy

Human Relations Movement
- An effort to make managers more sensitive to employees' needs
- Historical preconditions:
  - Threat of unionization
  - Philosophy of industrial humanism
  - Hawthorne studies
- Assumptions:
  - People are social and self-actualizing
- Key figures:
  - Elton Mayo
  - Douglas McGregor
- Key concepts:
  - Hawthorne effect
  - Theory X and theory Y
  - Informal groups and social needs

Too much importance to employees and social needs
Employee-oriented approach to a limited extent
Workers satisfaction is one but not the only factor which raises industrial productivity
Limited importance to economic incentives

William Ouchi's Theory Z
- Japanese management approach
- Focus on strong company philosophy, corporate culture, long-range staff development, and consensus decision-making
- Characteristics:
  - Long-term employment and job security
  - Consensual decision making
  - Slow evaluation and promotion
  - Informal control with formalized measures
  - Moderately specialized career path
  - Holistic concern for employees

Organizations as open systems
- Interacting with the environment
- Receiving external inputs and transforming them into outputs
- Features:
  - Open or closed systems
  - Interdependent parts
  - Consideration of whole system
  - Defined boundaries
  - Synergy
  - Feedback mechanism

Extension of systems approach
No longer "one best way" to manage
Contingency thinking - match managerial responses with opportunities unique to different situations
**Features:
- Management is entirely situational
- Managers should match their approach as per the requirements of the situation
- Policies and practices should be suitable to environmental changes
- Success of management depends on its ability to cope with its environment