Chapter 2: Evolution of Management Thinking PDF

02/10/2023 Chapter 2 The Evolution of Management Thinking © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or i...

02/10/2023 Chapter 2 The Evolution of Management Thinking © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Introduction ❖ Management has been practiced by early civilizations in Egypt, China, Rome, Greece, Mesopotamia… ❖ The industrial revolution brought new issues: big factories, mass production, training, etc. As there was no established science of management, managers were struggling to find answers to the complex problems they were confronted to. ❖ Since the late 1800’s, engineers started to develop methods and theories to improve work processes, to maximize productivity, to bring down costs, etc. 2 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  02/10/2023 The Classic School ❖ The formal study of management began early in the 20th century. The first studies of management, often called the classical approach, emphasized rationality and making organizations and workers as efficient as possible. 3 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. THE CLASSIC SCHOOL ❖ A branch of management theory that was introduced during the Industrial Revolution when new problems related to the factory system began to appear. ❖ Managers were unsure of how to improve productivity within factories. ❖ While less common in today’s society, this type of management may still provide benefits for some organizations. ❖ Three subfields: 1. Scientific management 2. Bureaucratic organizations 3. Administrative principles 4 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  02/10/2023 Scientific Management Frederick Taylor Fredrick Taylor (1856–1915) is the ‘Father of Scientific Management’. 5 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Scientific Management (Taylorism) ❖ Science Not the rule of thumb to improve labor efficiency. ❖ Time and motion study (broking work into simple movements and analyzing them to determine how to perform them in a minimum of time). ❖ Work must be conducted in a specific and standardized sequence (the one best way’ to do the job). ❖ Instead of doing the whole work by one worker, each one or two movements are performed by a different worker (division of labor). By repeating the same tasks the worker become a master of that specific task. 6 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  02/10/2023 Scientific Management (Taylorism) ❖ For Taylor, the most productive workers should be paid more (piece- rate pay system). ❖ Taylor’s ideas have radically shaped methods of mass production ❖ Ford was the first company to apply scientific management principles in the auto industry. Ford had managed to bring the average time of car production from 12 hours to 93 minutes. 7 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Benefits and Limitations of Scientific Management ❖ Taylorism resulted in a better utilization of resources and huge increase in productivity and profit for organizations. But, these benefits were short term, as workers were psychologically demotivated and stressed. It also resulted in : ❖ Treating people like robots and deskilling them: workers were trained to execute the easiest and quickest method of work. ❖ Limiting worker scope for promotion as there are fewer opportunities to demonstrate higher capabilities ❖ Taylorism continue to be relevant and effective in certain high-volume production like the auto industry, the computer manufacturing plants, the fast -food industry, etc. 8 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  02/10/2023 2. The Bureaucracy Approach Max Weber Max Weber (1864-1920) a German sociologist 9 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. The Bureaucracy Approach ❖ Max Weber argued that bureaucracy constitutes the most efficient and rational way in which human activity can be organized ❖ He believed that organizations should be managed impersonally and that the behavior of employees should be regulated through a set of clear rules. ❖ This non-personal, objective form of organization was called a bureaucracy. ❖ For Max Weber, Bureaucracy ensure better efficiency and consistent execution of work than traditional personal or familial structures. 10 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  02/10/2023 2. The Bureaucracy Approach ❖ The main features of a bureaucracy are: ✓ A clear chain of command to facilitate control and order: Every person is overseen by a person who works one level above him, and this creates an efficient hierarchy ✓ A specialization of labor: tasks are well-defined so that workers know what is expected of them. ✓ Rules and regulations are formulated and recorded in standard written procedures. ✓ Impersonal relationships: rules, procedures, and sanctions are applied equally regardless of personal considerations. ✓ Separation of management from the ownership 11 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Limitations of Bureaucracy Although bureaucracy made positive contributions to management thought, it also has many limitations: ❖ Slowness in handling problems, rigidity and weak communication due to the many hierarchical layers. ❖ Hierarchies form barriers between employees and restricts their ability to come up with innovative ideas. ❖ As they have no opportunity to express their opinion or influence decision making, employees may be demotivated and may get annoyed. 12 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  02/10/2023 3. Administrative Principles Henri Fayol Henri Fayol (1841-1925), a French engineer 13 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3. Administrative Principles ❖ Fayol developed 14 principles that provide managers with guidelines on how to organize their department. Many of these principles still used today. ❖ Fayol categorized organizational activities into 6 groups: technical, commercial, financial, security, accounting and management ❖ Fayol is also the one who divided a manager’s job into 4 functions planning, organizing, directing and controlling. ❖ While Taylor focused on workers efficiency and Weber on the whole organization, Fayol’s focus was on the direction and coordination of the organization, which is the domain of the top manager. 14 ✓ © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  02/10/2023 THE BEHAVIORAL SCHOOL ❖ It emerged as a result of the many criticisms of the classical approach which was not useful in dealing with many situations and failed to explain employees behavior and motivations. ❖ During the early part of the 20th century, especially as a result of the great depression in the 1920s and 1930s, more attention shifted to employee behaviour and social factors at work. ❖ The behavioral school suggests that we can improve productivity and satisfaction through a better understanding of human behavior at work, such as motivation, expectations, conflict and group dynamics. 15 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. THE BEHAVIORAL SCHOOL 1. Hawthorne studies (Elton Mayo) 2. Maslow’s theory of human needs 16 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  02/10/2023 1. Hawthorne Studies (by Elton Mayo) ❖ The Hawthorne experiments consisted of two studies conducted at the Hawthorne Works of the Western Electric Company in Chicago from 1924 to 1932. ❖ Mayo tested the impact of physical working conditions (lighting levels, length of rest pause, length of working days...) on productivity. No consistent relationship were found. ❖ Instead, workers reacted more to the psychological and social conditions at work such as individual recognition, and participation in decision making. ❖ Employees performed better when managers treated them positively. 17 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. Maslow’s Theory of Human Needs For Maslow, human behavior is purposeful and is motivated by the satisfaction of needs. A need is a physiological or psychological deficiency a person feels. 18 © 2014 Cengage Learning. All RightsManagement 10/e Reserved. May not - Chapter be scanned, 2 or duplicated, or posted to a publicly accessible website, in whole or in part. copied 9  02/10/2023 2. Maslow’s Theory of Human Needs Needs have a hierarchical structure of importance. A need is not an effective motivator unless those lower in the hierarchy are satisfied. A satisfied need is not a motivator. ❖ Maslow’s ideas suggest that employee motivation is more complex than was assumed by the scientific management approach, which focused strictly on pay. ❖ Maslow assumed that pay can motivate only lower-level needs, and once those are satisfied it loses its power to shape employee behavior. Instead, nonmonetary factors such as praise, recognition, and job characteristics motivate human behavior. 19 Chaptercopied © 2014 Cengage Learning. All Rights Reserved. May not be scanned, 10 or©Prentice Hall, duplicated, or 2001 posted to a publicly accessible website, in whole or in part. MODERN THEORIES OF MANAGEMENT ❖ Modern management theories include among others: 1. The Systems theory 2. The Contingency theory 3. The Total Quality Management 20 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  02/10/2023 1. Systems Theory Approach ❖ The classic approaches studied management by dividing it into elements such as tasks, motions, functions, needs and attitudes. All these elements were studied separately, while in reality they interact with each other. System theorists warned against this “reductionism” as it may lead to simplistic prescriptions. ❖ According to the systems theory: ✓ Organizations depend on their environments for resources ✓ Organizations, as open systems, adapt to the changing external environment. ✓ Managers must see the distinct elements of a situation as well as the complexities. 21 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. Systems Theory Approach 22 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  02/10/2023 1. Systems Theory Approach ❖ Systems theory focuses on the relations between the parts and how they work together as a whole. The parts of the system (subsystems) are highly interdependent so that a minor event in one part may amplify into serious unplanned consequences elsewhere in the organization. ❖ This approach is called abstract and vague. It cannot be easily applied to large and complex organizations. Moreover, it does not provide any tool and technique for managers. ❖ The Contingency approach evolved out of the System Approach to managing organizations. 23 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A restaurant as an example of Systems Theory Approach ❖ The Management (a subsystem) ❖ The cook (a subsystem) ❖ The waiters (a subsystem) ❖ The Cashier (a subsystem) ❖ The Inventory (a subsystem) ❖ There must be a feedback between each component to provide excellent customer service because if they don’t communicate a cashier may sell something to a customer that is no longer available in the inventory. 24 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12  02/10/2023 2. Contingency Approach ❖ While the previous approaches assume that management principles are universally applicable, the contingency approach suggest that: ✓ The “One best way of doing” may be useful for repetitive tasks but not for managerial problems. Organizations are different, face different situations, and require different ways of managing. ✓ Managers with a contingency view use a flexible approach, draw on a variety of theories and experiences, and evaluate many options as they solve problems. The style used to manage should depend on the circumstances. ✓ One limit to the contingency approach is that it is highly dependent on the experience and judgment of the manager in a given organizational environment. 25 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. Contingency Approach ❖ Example of contingent management: ✓ The approach used to manage a group of teenagers working in a fast‐food restaurant would be very different from the approach used to manage a medical research team trying to find a cure for a disease. ✓ Autocratic management style may be indicated in emergency situations, or when there is shortage of time. In theses circumstances the use of authority in directing actions is most appropriate. ✓ A small organization, will require a different approach of management compared to a large and complex organization 26 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13  02/10/2023 3. The Total Quality Management ❖ TQM is a management approach to achieving and maintaining high levels of quality and customer satisfaction. It involves every member of an organization to improve the quality of products, services, and processes. ❖ TQM started in 1950s in the japanese automative industry and spread in various industries worldwide. ❖ TQM often incorporates various methodologies, including Lean management, Kaizen, and Six Sigma, among others. These approaches complement each other and can be used together to create a comprehensive quality management system. 27 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaizen ❖ Kaizen is a Japanese word for “Change for the better”. KAIZEN philosophy says that everything can be improved and everything can perform better or more efficiently. ❖ Kaizen aims to improve all parts of a company through the standardization of production processes. Kaizen is a continuous action, rather than a particular state of being you must reach. So it is a journey and not a destination, it is a mindset as opposed to being a specific tool. ❖ When an organization has a Kaizen culture, people use their personal creativity to identify problems and then develop and implement ideas to solve those problems. 28 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  02/10/2023 Lean Management ❖ Lean management is based on the Toyota production system. It focuses on removal of ‘wastes’ sometimes referred to as ‘muda’ in Japanese. Operations that fail to create value for the end customer are deemed “wasteful.” Lean management focuses on the following: 1. Defining value from the standpoint of the end customer. 2. Eliminating all waste in the business processes. 3. Continuously improving all work processes, purposes and people. ❖ It seeks to eliminate any waste of time, effort or money by identifying each step in a business process and then revising or cutting out steps that do not create value. 29 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Six Sigma ❖ Six Sigma was developed by Motorola in the 1980s, and it has since been adopted by many other companies around the world. ❖ Six Sigma focuses on improving quality of the final product by finding and eliminating causes of defects. The goal is achieving consistent and reliable results through statistical analysis of business processes. ❖ The term "Six Sigma" refers to a statistical measure of how far a process deviates from perfection. A process that operates at six sigma has a failure rate of only 0.00034%. 30 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15  02/10/2023 The Total Quality Management ❖ Organizations often integrate these methodologies to create a comprehensive approach to quality and process improvement. For example, a company might use Lean principles to eliminate waste, Kaizen for continuous improvement, and Six Sigma for statistical control and defect reduction, all under the umbrella of TQM to ensure a holistic approach. 31 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16