Evolution of Management Thought

The Evolution of Management Thought

• The Egyptian Pyramids demonstrated early large-scale project management and organized labor
• The Roman Empire expanded its reach through systematic governance and administrative practices
• The Industrial Revolutions (late 1700s – early 1800s) revolutionized manufacturing and sparked new organizational methods
• Adam Smith emphasized division of labor and task specialization, increasing efficiency
• Henry Ford (early 20th Century) introduced mass production techniques, transforming industrial processes
• People have been "getting things done through others" since biblical times
• Pre-historic people managed resources to secure shelter, hunting, and land cultivation
• The systematic study of management using the scientific method is recent
• Contemporary managers use an organized body of knowledge called "management" to guide decision-making

Classical Management Approaches

• Composed of scientific management, administrative principles and bureaucratic organization
• People are assumed to be rational
• Scientific Management emphasizes the careful alignment of worker training, incentives, and supervisory support with job requirements
• Four guiding principles of scientific management (Frederick Taylor, 1911):
  • Develop "Science/Work Methods" that includes rules of motion, standardized work, and proper working conditions for every job
  • Carefully select workers with the right abilities for the job
  • Train workers to do the job and give them incentives to cooperate with the job “science"
  • Support workers by planning their work and smoothing the way they do their work
• UPS workers follow carefully adjusted productivity standards, making efficiency a top priority
• Saving a few seconds at each stop leads to significant increases in productivity
• Scientific management includes motion study as a management tool
  • Motion study reduces a job or task to its basic physical motions
  • Eliminating wasted motions improves performance

Administrative Principles

• Henri Fayol (1841 – 1925) was a French mining engineer who developed a general theory of business administration now called Fayolism
• Fayol and his colleagues developed administrative principles independently of scientific management
• Fayol is acknowledged as a founder of modern management methods
• Administrative Principles (Henri Fayol, 1916) define five roles/duties of management:
  • Foresight: Completing a plan of action for the future
  • Organization: Providing and mobilizing resources to implement the plan
  • Command: Leading and evaluating workers to get the best work toward the plan
  • Coordination: Fitting diverse efforts together, ensuring shared information and problem-solving
  • Control: Ensuring things happen according to plan and taking corrective action
• Scalar Chain (chain of command): A clear and unbroken line of communication from top to bottom
• Unity of Command: Each person receiving orders from only one boss
• Unity of Direction: One person overseeing all activities with the same performance objective

Bureaucratic Organization

• Max Weber (1864 – 1920) was a German sociologist and political economist whose ideas influenced social theory and research
• A bureaucratic organization is an ideal, intentionally rational and efficient form
• Based on principles of logic, order, and legitimate authority
• Characteristics of Bureaucratic Organizations:
  • Clear division of labor (specialization) with well-defined jobs
  • Clear hierarchy of authority with well-defined authority and responsibility as positons report to a higher level
  • Formal rules and procedures including written guidelines and proper record keeping
  • Impersonality: Rules and procedures impartially and uniformly applied without preferential treatment
  • Careers based on merit (fairness): Selection and promotion based on ability, competency, and performance
• Possible disadvantages of Bureaucracy:
  • Excessive paperwork or "red tape," slowness in handling problems, rigidity, resistance to change, employee laziness
• Bureaucracy works wells sometimes
• Modern thinking requires consideration such as contingency thinking, flexibility and creativity

Behavioral Management Approaches

• Classical theory ignored employee motivation and behavior
• Behavioral management theory addresses the human dimension of work and is often called the human relations movement
• Behavioral approaches to management view people as social and self-actualizing
• Management attention has shifted from the notion that people are rational to the human factor as a key element in organizational performance
• People at work seek satisfying social relationships, respond to group pressures, and search for personal fulfillment
• Follett's Organizations as Communities
  • Provides transition from classical thinking into Behavioral Management
  • Groups allow individuals to combine talents for a greater good
  • Organizations are cooperating "communities" of managers and workers with "collective responsibility"
  • A manager's job is to help people cooperate and achieve an integration of interests
• Forward-looking management insights:
  • Making every employee an owner creates a sense of collective responsibility and fosters employee ownership, profit sharing, and gain-sharing
  • Business problems involve a variety of inter-related factors and fostering of systems thinking is needed
  • Private profits relative to public good and therefore needs a fostering of managerial ethics and social responsibility

Hawthorne Studies

• Conducted in 1924 by Alton Mayo
• One study examined how economic incentives and physical conditions affected worker production rate
• Findings:
  • A new "social setting" led workers to do a good job
  • Good "human relations" led to higher productivity
  • Employee attitudes and group processes are important
  • Some things satisfied some workers, but not others
  • People restricted output to adhere to the group norms
• Lessons from the Hawthorne Studies:
  • Social and human concerns are keys to productivity
  • The Hawthorne effect is the tendency of persons who are singled out for special attention to perform as expected
  • A.k.a. the observer effect or viewing effect is where individuals modify or improve an aspect of their behavior in response to their awareness of being observed
• Maslow's Hierarchy 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
• McGregor's Theory X assumes/perceives that workers:
  • Dislike work, lack ambition, are irresponsible, resist change, and prefer to be led
• McGregor's Theory Y assumes/perceives that workers:
  • Are willing to work, capable of self-control, willing to accept responsibility, imaginative, and capable of self-direction

Implications of Theory X and Theory Y

• Managers often create self-fulfilling predictions
• Theory X managers create situations where workers are dependent and reluctant
• Theory Y managers create situations where workers respond with initiative and high performance
• Empowerment and self-management

Modern Management Foundations

• Foundations continuing developments in management:
  • Quantitative analysis and tools (Analytics)
  • Organizations as Systems
  • Contingency thinking (Situational)
  • Quality Management
  • Evidence-based management
• Mathematical forecasting which helps make future projections that are useful in the planning process
• Inventory analysis helps control inventories by mathematically establishing how much to order and when
• Queuing theory helps allocate service personnel or workstations to minimize customer waiting time
• Linear programming calculates how best to allocate scarce resources among competing uses
• Network models break large tasks into smaller components to allow for better analysis, planning and control of complex projects