Management - Chapter 2 - PDF

Management Fifteenth Edition, Global Edition Chapter 2 Management History Module Dr. Mohammad Okour Copyright © 2021 Pearson Education Ltd. Learn...

Management Fifteenth Edition, Global Edition Chapter 2 Management History Module Dr. Mohammad Okour Copyright © 2021 Pearson Education Ltd. Learning Objectives M H1.1 Describe some early management examples. M H1.2 Explain the various theories in the classical approach. M H1.3 Discuss the development and uses of the behavioral approach. M H1.4 Describe the quantitative approach. M H1.5 Explain various theories in the contemporary approach. Copyright © 2021 Pearson Education Ltd. Exhibit M H.1 Major Approaches to Management Exhibit M H.1 shows the four major approaches to management theory: classical, behavioral, quantitative, and contemporary. Copyright © 2021 Pearson Education Ltd. Early Management The Egyptian pyramids and the Great Wall of China are proof that projects of tremendous scope, employing tens of thousands of people, were completed in ancient times. Who told each worker what to do? Who ensured there would be enough stones at the site to keep workers busy? The answer is managers. Someone had to plan what was to be done, organize people and materials to do it, make sure those workers got the work done, and impose some controls to ensure that everything was done as planned. Copyright © 2021 Pearson Education Ltd. Job Specialization In 1776 Adam Smith published “The Wealth of Nations” – division of labor (job specialization): the breakdown of jobs into narrow and repetitive tasks. – Smith concluded that division of labor increased productivity by increasing each worker’s skill and proficiency, saving time lost in changing tasks and creating labor-saving inventions and machinery. Copyright © 2021 Pearson Education Ltd. Industrial Revolution Industrial revolution: a period during the late eighteenth century when machine power was substituted for human power, making it more economical to manufacture goods in factories than at home. These large efficient factories needed someone to forecast demand, ensure that enough material was on hand to make products, assign tasks to people, direct daily activities, and so forth. Copyright © 2021 Pearson Education Ltd. Classical Approach Classical approach: first studies of management, which emphasized rationality and making organizations and workers as efficient as possible. Two major theories comprise the classical approach: scientific management and general administrative theory. The two most important contributors to scientific management theory were Frederick W. Taylor and the husband–wife team of Frank and Lillian Gilbreth. The two most important contributors to general administrative theory were Henri Fayol and Max Weber. Let’s take a look at each of these important figures in management history. Copyright © 2021 Pearson Education Ltd. Scientific Management If you had to pinpoint when modern management theory was born, 1911 might be a good choice. That was when Frederick Winslow Taylor’s Principles of Scientific Management was published. Its contents were widely embraced by managers around the world. Scientific management: an approach that involves using the scientific method to find the “one best way” for a job to be done. Copyright © 2021 Pearson Education Ltd. Exhibit M H.2 Taylor’s Scientific Management Principles Principles 1. Develop a science for each element of an individual’s work to replace the old rule-of-thumb method. 2. Scientifically select and then train, teach, and develop the worker. 3. Heartily cooperate with the workers to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. Management does all work for which it is better suited than the workers. Copyright © 2021 Pearson Education Ltd. Frank and Lillian Gilbreth The Gilbreths also devised a classification scheme to label 17 basic hand motions (such as search, grasp, hold), which they called therbligs. This scheme gave the Gilbreths a more precise way of analyzing a worker’s exact hand movements. Therbligs: a classification scheme for labeling basic hand motions. Copyright © 2021 Pearson Education Ltd. General Administrative Theory General administrative theory: an approach to management that focuses on describing what managers do and what constitutes good management practice Copyright © 2021 Pearson Education Ltd. Henri Fayol Principles of management: fundamental rules of management that could be applied in all organizational situations and taught in schools Copyright © 2021 Pearson Education Ltd. Exhibit M H.3 Fayol’s 14 Principles of Management (1 of 2) Principles 1. Division of work. Specialization increases output by making employees more efficient. 2. Authority. Managers must be able to give orders, and authority gives them this right. 3. Discipline. Employees must obey and respect the rules that govern the organization. 4. Unity of command. Every employee should receive orders from only one superior. 5. Unity of direction. The organization should have a single plan of action to guide managers and workers. 6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. 7. Remuneration. Workers must be paid a fair wage for their services. Copyright © 2021 Pearson Education Ltd. Exhibit M H.3 Fayol’s 14 Principles of Management (2 of 2) Principles 8. Centralization. This term refers to the degree to which subordinates are involved in decision making. 9. Scalar chain. The line of authority from top management to the lowest ranks is the scalar chain. 10. Order. People and materials should be in the right place at the right time. 11. Equity. Managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies. 13. Initiative. Employees allowed to originate and carry out plans will exert high levels of effort. 14. Esprit de corps. Promoting team spirit will build harmony and unity within the organization. Copyright © 2021 Pearson Education Ltd. Max Weber Max Weber (pronounced VAY-ber) was a German sociologist who studied organizations. Writing in the early 1900s, he developed a theory of authority structures and relations based on an ideal type of organization he called a bureaucracy—a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships (see Exhibit MH-4). Bureaucracy: a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships Copyright © 2021 Pearson Education Ltd. Exhibit M H.4 Characteristics of Weber’s Bureaucracy Exhibit M H.4 shows Weber’s ideal bureaucracy Copyright © 2021 Pearson Education Ltd. Behavioral Approach The field of study that researches the actions (behavior) of people at work is called organizational behavior (OB). Much of what managers do today when managing people —motivating, leading, building trust, working with a team, managing conflict, and so forth—has come out of OB research. Organizational behavior (O B): the study of the actions of people at work Copyright © 2021 Pearson Education Ltd. Exhibit M H.5 Early O B Advocates Exhibit M H.5 summarizes each individual’s most important ideas. Copyright © 2021 Pearson Education Ltd. Hawthorne Studies Hawthorne studies: a series of studies during the 1920s and 1930s that provided new insights into individual and group behavior. The studies concluded that people’s behavior and attitudes are closely related, that group factors significantly affect individual behavior, that group standards establish individual worker output, and that money is less a factor in determining output than group standards, group attitudes, and security. These conclusions led to a new emphasis on the human behavior factor in the management of organizations. Copyright © 2021 Pearson Education Ltd. Quantitative Approach Quantitative approach: the use of quantitative techniques to improve decision making Copyright © 2021 Pearson Education Ltd. Total Quality Management Total quality management (TQ M): a philosophy of management that is driven by continuous improvement and responsiveness to customer needs and expectations Copyright © 2021 Pearson Education Ltd. Exhibit M H.6 What is Quality Management? Characteristic 1. Intense focus on the customer. The customer includes outsiders who buy the organization’s products or services and internal customers who interact with and serve others in the organization. 2. Concern for continual improvement. Quality management is a commitment to never being satisfied. “Very good” is not good enough. Quality can always be improved. 3. Process focused. Quality management focuses on work processes as the quality of goods and services is continually improved. 4. Improvement in the quality of everything the organization does. This relates to the final product, how the organization handles deliveries, how rapidly it responds to complaints, how politely the phones are answered, and the like. 5. Accurate measurement. Quality management uses statistical techniques to measure every critical variable in the organization’s operations. These are compared against standards to identify problems, trace them to their roots, and eliminate their causes. 6. Empowerment of employees. Quality management involves the people on the line in the improvement process. Teams are widely used in quality management programs as empowerment vehicles for finding and solving problems. Copyright © 2021 Pearson Education Ltd. Contemporary Approaches System: a set of interrelated and interdependent parts arranged in a manner that produces a unified whole Closed systems: systems that are not influenced by and do not interact with their environment Open systems: systems that interact with their environment Copyright © 2021 Pearson Education Ltd. Exhibit M H.7 Great Moments in American Business The $5 Workday (1914). Ford doubles its employees’ pay and helps create the middle class. Comprehensive Employee Benefits (1928). Kodak grants benefits that were lavish for the time—such as life insurance, tuition assistance, and a retirement annuity. The Innovation Lab (1944). 3M set up the Products Fabrication Laboratory for lab technicians to dream big without constraints. ENIA C (1946). The first digital computer begins operation. The Personal Computer (1977). The Apple II is introduced, starting the era of the personal computer. Flexible Workplaces (1993). Ad agency Chiat/Day builds new offices designed to boost creativity by eliminating assigned desks and replacing them with mobile workstations. Domestic-Partner Benefits (1996). IB M extends healthcare benefits to its employees’ gay and lesbian partners. Going Green (2005). G E introduces Ecomagination, a suite of environmentally friendly products. Copyright © 2021 Pearson Education Ltd. Exhibit M H.8 Organization as an Open System Exhibit M H.8 shows a diagram of an organization from an open systems perspective Copyright © 2021 Pearson Education Ltd. Contingency Approach Contingency approach: a management approach that recognizes organizations as different, which means they face different situations (contingencies) and require different ways of managing Copyright © 2021 Pearson Education Ltd. Exhibit M H.9 Popular Contingency Variables Variable Organization Size. As size increases, so do the problems of coordination. For in- stance, the type of organization structure appropriate for an organization of 50,000 employees is likely to be inefficient for an organization of 50 employees. Routineness of Task Technology. To achieve its purpose, an organization uses technology. Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or nonroutine technologies. Environmental Uncertainty. The degree of uncertainty caused by environmental changes influences the management process. What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment. Individual Differences. Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations. These and other individual differences are particularly important when managers select motivation techniques, leadership styles, and job designs. Copyright © 2021 Pearson Education Ltd. Review Learning Objective M H1.1 Describe some early management examples. – Early examples of management practice include the construction of the Egyptian pyramids and the Great Wall of China. – One important historical event was the publication of Adam Smith’s “Wealth of Nations,” in which he argued the benefits of division of labor (job specialization). – Another was the industrial revolution, where it became more economical to manufacture in factories than at home. Copyright © 2021 Pearson Education Ltd. Review Learning Objective M H1.2 Explain the various theories in the classical approach. – Frederick W. Taylor – The Gilbreths – Henri Fayol – Max Weber Copyright © 2021 Pearson Education Ltd. Review Learning Objective M H1.3 Discuss the development and uses of the behavioral approach. – Early advocates of OB – The Hawthorne Studies Copyright © 2021 Pearson Education Ltd. Review Learning Objective M H1.4 Describe the quantitative approach. – The quantitative approach – Total quality management (TQ M) Copyright © 2021 Pearson Education Ltd. Review Learning Objective M H1.5 Explain various theories in the contemporary approach. – Systems approach – Contingency approach Copyright © 2021 Pearson Education Ltd.