Management Theory Development

• Chapter explores the development of management theory
• Learning outcomes include understanding classical, behavioral, quantitative, systems, and contingency theories

Introduction

• Management is an ancient practice, not a new discipline
• Neanderthals used management skills for hunting
• Sumerians kept records of estate and tax management around 5000 BC
• Egyptians applied management to construct the pyramids
• Romans had management strategies to build their army and conquer

Development of Management

• 8-hour workdays (8:00 am - 4:00 pm) started in the late 1800s
• 3,000 years ago, work was primarily home-based
• Bartering was a common practice
• In the 9th century, skilled artisans established trade guilds and workshops near their homes
• The Industrial Revolution (1750-1900) shifted manual labor to machine-based production

Post-Industrial Revolution Changes

• Small artisan workshops were replaced by large factories
• Mass production of goods via machines became the norm
• Division of labor and social issues like absenteeism arose
• Managers/ superivsors were required to solve workplace challenges

Classification of Management Theories

• Early Management (3000 BC - 1776)
• Classical Approaches (1911-1947): scientific, bureaucratic, and administrative
• Behavioral Approaches (Late 1700s - 1950): human relations and human resources
• Quantitative Approaches (1940s-1950s): operations and information management
• Contemporary Approaches (1960s-present): systems, contingency, and total quality management

Classical Management Theories

• The earliest form of management theory
• A traditional management view that aims to find the very best way for workers to conduct their assigned tasks
• Began late 19th to early 20th century post-Industrial Revolution

Scientific Management - Frederick Winslow Taylor

• Aimed to improve economic efficiency and maximize productivity through simplification
• Considered the "father" of scientific management
• Sought to maximize efficiency by optimizing task completion time
• The first management theorist to conduct experiments and record findings
• Developed four principles for increasing efficiency
• Had a significant impact on American society, leading to increased workplace productivity
• Followers such as Frank and Lillian Gilbreth, and Henry Gantt built upon his ideas

Taylor’s Four Principles

• Develop a science for each work element, replacing the old rule-of-thumb method
• Scientifically select, train, teach, and develop the workman
• Enthusiastically cooperate with the men to ensure work being done is in accordance with scientific principles
• Equal division of work and responsibility between management and workmen

Taylor’s Principles Summary

• Develop a science for each worker's job to replace rule of thumb
• Job specialization should be an integral part of each job
• Proper selection, training, and development of workers are essential
• Planning and scheduling of work are key
• Method and time standards for each task
• Wage incentives should be an integral part of each job

Frank and Lillian Gilbreth

• Husband and wife team who pioneered industrial management techniques
• Focused on simplifying bricklaying to increase efficiency
• Built and improved upon Taylor's work and theories
• Improved methods of time and motion studies through breaking tasks into components, eliminating unnecessary motions, and reducing movements to raise daily productivity

Frank and Lillian Gilbreth Details

• Frank Gilbreth:
  • Never went to college
  • Owned a bricklaying business
  • Focused on technical aspects of worker efficiency
• Lillian Gilbreth:
  • Considered the "mother of modern management"
  • First woman to receive a doctorate in Industrial Psychology
  • Focused on human factors in time management
  • Enacted improvements to office communication, job satisfaction and safety, and management training to influence US labor laws

Gilbreths' Long-Term Interests

• Using motion studies to:
  • Simplify work
  • Improve productivity
  • Reduce the level of effort needed to perform jobs safely
• Applied to medical surgery, reducing patient time on the operating table

Henry Gantt

• Worked for Frederick Taylor
• Applied scientific management principles to improve labor productivity
• Developed the Gantt chart in the 1910s

Gantt Chart Details

• A horizontal bar chart that visually represents a project schedule
• Production control tool showing start and finish dates
• Used in project management to plan, coordinate, and track specific tasks in projects
• Beneficial for determining the duration of a project and task order
• It does not illustrate task dependencies

Other Contributions of Gantt

• Established quota systems and bonuses for workers who exceeded quotas
• Advocated training and development, because trained workers performed better

The Bureaucratic Approach

• Created by German sociologist Max Weber (1864-1920)
• Focuses on organizational structure
• Divides organizations into hierarchies
• Establishes strong lines of authority and control
• Organizations should be managed impersonally and rationally
• Resources should aim to achieve organizational goals

Eight Principles of Bureaucratic Organizations

• Written Rules: Regulations must be standardized and well-defined
• System of Task Relationship: Established processes to achieve alignment between systems and tasks
• Specialized Training: Employees trained for assigned tasks, managers receive managerial training and workers get job-specific training
• Hierarchy of Authority: Authority assigned based on positions in the management pyramid
• Clearly Identified Duties: Well-defined responsibilities for each worker
• Paperwork: Everything written down for systematic organizational operation
• Fair Evaluation and Reward: Established evaluation for rewards based on commitment and competency
• Maintenance of Ideal Bureaucracy: Achieved through training and reward systems

Administrative Management Approach

• Developed by Henri Fayol
• Focuses on the organization as a whole
• Fayol's contributions as a CEO to make a steel company profitable were published in "General and industrial management"
• Success depends on administrative ability of leaders more than their technical ability
• Managers perform functions: planning, organizing, coordinating, commanding (leading), and controlling
• Effective management is built on 14 principles

Fourteen Principles of Fayol

• Division of work
• Authority
• Discipline
• Unity of command
• Unity of direction
• Subordination of individual interest to the general interest
• Remuneration
• Centralization
• Scalar chain
• Order
• Equity
• Stability & tenure
• Initiative
• Esprit de corps

Five Characteristics

• Chain of command
• Division of labor
• Unidirectional downward influence
• Autocratic leadership style
• Predicted behavior

Behavioral Theories

• Contrasts classical approaches that treat workers as machines
• Focuses on the social and group interactions in the workplace
• Aims to understand human behaviors, needs, and attitudes for better performance and productivity
• Two main approaches: human relations and human resources

Mary Parker Follet's Work

• American social worker management consultant specializing in organizational theory and behavior
• Management is "getting things done by other people"
• Proposed theories on employee participation, negotiation, and power

Follet’s Four Theories

• Authority with knowledge and expertise
• Managers as coaches and facilitators
• Departments should engage in cross-functioning
• Power adaptable to achieve organizational goals

The Hawthorne Studies

• Conducted at Western Electric Company in Illinois (1924-1932)
• Investigated the impact of changes in the work environment on worker productivity
• Six female workers (experimental and control groups) to study lighting, incentives, and breaks for study of impact on effect of productivity

Hawthorne Studies - Key Findings

• Expectation: Individual output directly correlates with light intensity
• Discovery: Productivity fluctuates with lighting
• Explanation: Harvard professor Elton Mayo
• Actual lighting wasn't a factor
• Workers responding to attention (Hawthorne effect)
• Workers developed ownership and became cohesive social unit
• Productivity increased

Hawthorne Studies - Conclusions

• Worker feelings and attitudes affect their work
• Special attention leads to productivity change regardless of conditions
• Social interactions and open communication significantly influence productivity

Maslow's Needs Theory

• People seek to satisfy five basic needs: physiological, safety, belongingness, esteem, and self-actualization
• Hierarchy of needs where lower levels must be satisfied first

McGregor's Theory X and Theory Y

• Two assumptions about human nature: -Theory X workers dislike work and avoid responsibility, -Theory Y workers like work, accept responsibility

Assumptions Comparison - Theory X vs Theory Y

• Theory X: Authoritarian style, dislikes work, needs direction, avoids responsibility, average worker must be coerced and controlled
• Theory Y: Participative style, willing to work, accepts work, can take initiative, threat of punishment may not be necessary as the worker is committed and will exercise self-discipline and self-control to achieve organizational goals

Quantitative Theories

• Also known as management science
• Uses mathematics, statistics, and computer technology to aid management decision making
• Emerged post-World War II, from military solutions and then adopted by business organizations
• Two main approaches: operations management and information management

Quantitative Approaches Characteristics

• Focus on decision making
• Alternatives based on economic criteria (costs, sales, profits)
• Mathematical models are used to analyze problems
• Computers essential

Operations Management

• Uses quantitative techniques to find ways to increase productivity, reduce costly inventory, and improve quality
• Forecasting, capacity planning, quality control, scheduling systems, inventory systems, project management, and cost-benefit analysis
• Main Contributor: Eli Whitney who designed the cotton gin and proposed standardized parts for machinery
• Gaspard Monge, invented descriptive geometry and 3D drawings

Information Management

• A system that provides organizations with relevant data to manage efficiently
• Involves assessing, designing, implementing, and operating systems for improved decision making
• Historical view:
  • 15th century: Printing press
  • Mid-19th century: Manual typewriter
  • 1980s: Personal computer (PC)
  • 1990s: WWW and email
  • 21st century: Smart devices and social media

Contemporary Management Theories

• Integrate and expand the key concepts of classical theories
• Developed in the 1960s focusing on the external environment and its effect on the organization
  • Systems management
  • Contingency theory
  • Total quality management (TQM)

Systems Management

• Analyzing problems within a framework that includes inputs, transformation processes, outputs, and feedback
• A system is a set of interrelated parts arranged for a common goal
• Organization made up of interdependent subsystems
• Changes in one affects others

Systems Management - Details

• Closed vs. open systems
• Closed systems not interacting with environments
• Open systems interacting with internal and external environments
• Synergy – two or more subsystems achieve more together than individual parts (1+1=3)

The Organization as an Open System

• Inputs: human, material, physical, financial and information resources
• Transformation process: processing inputs into goods and services
• Output: organization's finished product or service
• Feedback: amount of information about a system’s performance and status and consumption by customers

Contingency Theory

• No universal management theory applies to all situations
• Effective management depends on the problems and situations faced
• The best way to manage depends on the specific situation (situational approach) and that individual organizations, employees, and situations are different

Contingency Theory Explained

• Key phrase: "if...then"
• To manage this type of situation, one should do this

Total Quality Management (TQM)

• Pioneered by Edward Deming - "Father of the quality movement"
• Integrate organization-wide strategy for service and quality
• Meets expectations
• Process of quality assurance

Total Quality Management Principles

• Teamwork between all participants including customers and suppliers
• Committed to Quality at all levels
• Quality from the customer’s perspective
• Systematic process
• Kaizen - strive for continuous improvement

Summary of Management Theory

• Classical: Managing work efficiency
• Behavioural: Understanding human behavior
• Quantitative: Uses quantitative & mathematics techniques to aid decision-making
• Contemporary: Innovative/ contemporary management

Approaches of Management Theory

• Classical : Scientific, Bureaucratic, Administrative approaches
• Behavioural: Human Relations & Human Resources
• Quantitative: Operations management, information management
• Contemporary: Systems approach, Contingency approach & Total quality management (TQM)

Chapter Summary

• Management is ancient
• Scientific focusses on efficiency
• Bureaucratic focuses on rules and procedures
• Administrative focuses on what managers shuold do
• Behavioural centers on people
• Quantitative approaches make use of mathematical and statistical techniques to aid managers in decision-making
• The contemporary approaches promote the use of contingencies and quality for effective and efficient management.