Management Theories: Taylor & Fayol

Evolution of Management Thought

• Frederick Taylor is the Father of Scientific Management
• The Principles of Scientific Management include Taylor's observation that workers intentionally work slower
• Principles include time and motion studies which analyze the time and physical movements required to complete a task
• Central to Taylorism is the idea of identifying the "one best way" to do things through scientific work process study
• In Functional Foremanship, multiple specialized foremen oversee different aspects of a worker's job
• Line and Staff include "line", which is the production workforce and "staff," such as the foreman who performs planning
• Henri Fayol is the Father of Modern Management Theory who created 14 principles
• The 14 principles include: division of labor, authority and responsibility, discipline, unity of command, unity of direction
• 14 principles also include: subordination of individual interest, remuneration, degree of centralization, scalar chain, order, equity
• Final four of the 14 principles include: stability of tenure of personnel, initiative, and Esprit de Corps
• Scalar chain, a clear line of authority and communication, flows from the highest to the lowest management ranks through each level of supervision in a structured manner
• Gangplank enables level jumping in emergency situations, allowing bypassing a level in the hierarchy if supervisors are informed
• Esprit de corps means "in union there is strength"
• The five core functions are planning, organizing, commanding, coordinating, and controlling (POCCC)
• Elton Mayo and F.J. Roethlisberger are associated with the Hawthorne Studies during 1924-1932
• The Hawthorne Studies performed Illumination Studies at Western Electric
• Hawthorne highlighted that improvement in productivity is due to worker morale, satisfactory interrelationships, and effective management
• Herbert Simon is associated with Decision Making
• Bounded Rationality is when people cannot make rational decisions due to limited time, information, and cognitive abilities
• People tend to "satisfice" (choose the first option that meets a minimum threshold) instead of optimizing
• Efficiency means taking the shortest and cheapest path to desired goals
• Peter Drucker popularized Management by Objectives (MBO), defining clear goals for defined objectives

The Functions of Managers

• Gulick & Urwick described management functions as POSDCORB: Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting
• Planning involves selecting missions, objectives, and plans to achieve them
• Organizing means establishing roles for people
• Staffing means filling positions in the organizational structure
• Leading is influencing people to contribute to organizational goals
• Controlling is measuring and controlling individual and organizational plans

Management and Society

• Management has a social responsibility
• Corporate social responsibility is a company's actions and impact on society
• Ethics involves dealing with good and bad and moral duty
• Utilitarian theory suggests that plans should produce the greatest good for the greatest number of people
• Ethical Theories include: theory based on rights, theory of justice
• Theory of justice means decisions should be fair, equal, and impartial
• Whistle-blowing involves reporting unethical company practices to outside agencies

International Management

• International Management focuses on the operation of international firms in host countries
• MNC's have headquarters in one country but operate in many countries
• Global / Transnational Companies view the world as one market
• The European Union in 1992 created a single market in Europe through free movement of goods, people, service, and capital
• NAFTA eliminates trade barriers to facilitates cross border movement of goods , services, investment, and mechanisms to resolve disputes
• ASEAN includes 10 countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam)
• BRICS countries used for foreign investment strategies
• Japan: Z theory involves lifetime employment, consensus decision-making

Planning: Mission and Purposes

• Vision statements should describe what an organization hopes to achieve and state long-term goals.
• Mission statements describe how an organization will achieve its goals.
• RINL's vision is to attain 20 Mt liquid steel capacity through technological upgradation, operational efficiency, and expansion.
• SBI's vision is to enhance the quality of life for people through financial solutions and social initiatives.

Planning : Industry Analysis – Porter’s 5 Force Analysis

• Method used for analyzing the competitive environment of a business.
• Cost leadership strategy aims at cost reduction
• Differentiation strategy – offering something unique in terms of products or services.
• Blue Ocean Strategy aims to a create new markets with little or no competition

Planning : The TOWS matrix

• Framework evaluates, creates, compares business strategies for improvements.
• Attempts to reduce threats/weakness, utilize strengths, capitalize opportunities.
• (WT) form Joint Venture, retrench.
• (WO) develop weaker areas within the enterprise.
• (ST) use its technological, financial, managerial, marketing strengths to cope with the threats of a new product.
• (SO) company capitalizes on strengths to advantage of opportunities

Planning : Portfolio Matrix

• Visual tool helps businesses evaluate which products to prioritize, divest.
• Also called the Boston Consulting Group (BCG) Matrix
• Products with High growth, low market share are question marks quadrant

Planning : Decision Making

• Limited or Bounded Rationality limitations of information, time constraints, & uncertainty.
• Satisficing picks a course of action that is satisfactory under the circumstances.
• Heuristics (thumb-rules) are effective for quick judgments, but can result in irrational or inaccurate conclusions
• Quantitative factors are numerically measured like time/operating costs.
• Qualitative factors can't be measured numerically like a brands reputation
• Marginal Analysis compares additional revenue, additional costs to maximize profit/efficiency.
• Cost-effectiveness analysis seeks best ratio of benefit & cost.
• An innovation is Loans to SHGs in India (micro financing).
• Brainstorming finds new/unusual solutions
• Group brainstorming involves not criticizing radical ideas and stressing quantity

Organizing : Formal and Informal Organizations

• Organization is a formal roles & positions where people maintain continuity in groups.
• Formal Organizations are an environment for individual performance helps group goals.
• Informal organizations are interpersonal relationships.
• Spans of management can either be smaller or wider
• Smaller span is many levels, 5 subordinates.
• Wider span is few levels, high employee capability

Theory X and Y

• Theory X heightened supervision, Theory Y contentment/emotions)
• Theory X has external rewards while Theory Y has tasks without supervision.
• Theory X looks at penalties while Theory Y sees employees as assets.
• Theory X is negative assumptions, Theory Y employees design, construct work.
• Theory X is “We vs. They” while Theory Y an amount that the feel neglect entitled

Organizing and Reengineering

• Reengineering fundamental rethinking/design for dramatic improvements in performance
• Purpose or function is one base
• Process is one base
• Clientelle (persons)
• Place - are some of the 4 P's of departmentation

Organizational Structure Departmentation

Departmentation structure includes: enterprise function/ customer grouping/product.

• Customer Grouping encourages focus/giving suppliers understanding.
• Levitt said intangible elements add value

Matrix Organizations

• Type of org. structure that empowers employees allowing to participate decisions
• Argyris believed that more effective than traditional structures
• Defined power/responsibility, self-disciplined, project teams, cohesive teams consistent leadership
• The disadvatages is conflict is authority and possibility of disunity command
• SBUs are distinct businesses promoting product lines and handled as independent

Line/Staff Authority, Empowerment, and Decentralization

• Vertical Authority is Centralized, gradually delegate, employees report to immediate supervisor. -Vertical means Superior is accountable to them
• Horizontal Authority has no superiority, focuses teamwork/sharing, adapt
• Power is influence, Authority’s is discretion
• Empowers employees to decide without permissions
• Scalar principle means more effective communication.
• Lines are direct supervision, staff advisory. Authority delegates to control policies
• Decentralized Authority disperses those decisions in structured orgs.
• Centralized pertains concentration, restricts in management
• Decentralization’s requires, makes decision, selection, training, controls, & trust

Aspects of Organizational Control

• Delegation gives subordinates discretion, can't delegate authority they don't have.
• Effective Delegation is unable or unwilling.
• Receptive attitudes, give ideas, mistakes personal. Define assignments/delegate authority
• Weak delegation and select in to be done.
• Maintain communications while decentralizing. Establishes controls, rewards.
• Effective organizing only one best way. Must plan for ideals or adapt.
• Inflexibility through changes in operations, markets, influences CEO's/ VPs have ideas

Specialization

• Specialization must have: knowing work, make/adopt, keep staff informed
• Charts/descriptions tell connections indicate authority.
• A good position description advises for all
• Organizing refers ventures establish legally, venture obtain/governmental recognition
• Founders legal steps, ventures, new business legal forms.
• Value guides fulfil organizations, SBI include Inclusion

What may change your organization

Metaphors reveal, the world view instructions.

• Likert Scale is agreements on behaviors
• Fills positions as personnel select to filling roles

The System Approach

• The systems approach to management external/internal sources using the process of recruitment.
• Sources is external PESTLE, internal promotions.
• Selections is hiring suitable person for position , Job learning company operation.

Position Requirements & Job Design

• Position looks at requirements, enrichment practice/relations.
• Design practice: groups tasks natural, feedback
• Validity is success as reliabilitys accuracy.
• The tests are Intelligence as questions.

Career Strategy & Performance Appraisal

• Performance Appraisals have subject/objective rating
• Team evaluation: rates job, behaviors
• Rewards time. Process: stress, responses to excess
• Preparation in career, analysis, create

Motivation and Leading Management

• Motivation is the drivers of needs and similar forces.
• Content Theories are “What”
• Process theories are “how" to motivate.
• (Maslow )One set needs satisfied. next in order ends as motivator

Maslows Hierarchy

• Maslow: Psychological, Security/Safety, accept, esteem, maximize Potential

Motivational Tools

• Alderfer ERG has existence, relates, with growth
• Herzberg, maintenance won't motivate, but absence dissatisfies
• Hertzberg includes achievement/growth

Herzberg Two-Factor Theory

• Two-Factor: recognition Satisfaction's/bias. The hierarchy includes: challenges/responsibility.
• McClelland. Motivations needs, power, affiliation.
• Vroom: people will act to reach goal/they value, see will help achieve
• Equity: based on other rewards.

The Expectancy Theory Of Motivation

Value, multiple confidence

• Force Valence X. Expectancy or preference.
• Goals should motivate while having clear expectations,.
• Reinforcements: motivates then improve to do better.