Part 1 Meeting the Challenges of the 21

Part 1 Meeting the Challenges of the 21 st Century Chapter 2 Evolution of Management Thought Power. Point Presentation by Wessex Press, Inc. © 2016 Wessex Press, Inc. All rights reserved.

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 The major influences on the development of management thought. 2 The five major perspectives of management thought that have evolved over the years. 5 The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 3 4 The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. 6 The systems perspective building blocks and their interactions. 7 The nature of the contingency perspective of management. 8 The future issues that will affect the further development of management thought. 2– 2

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 3

Environmental Factors Influencing Management Thought • Economic Influences Ø The availability, production, and distribution of resources within a society. • Social Influences Ø The aspects of a culture that influence interpersonal relationships. • Political Influences Ø The impact of political institutions on individuals and organizations. © 2016 Wessex Press, Inc. All rights reserved. 2– 4

Environmental Factors Influencing Management Thought (cont’d) • Technological Influences Ø The advances and refinements in any of the devices that are used in conjunction with conducting business. • Global Influences Ø The pressures to improve quality, productivity, and costs as organizations attempt to compete in the worldwide marketplace. © 2016 Wessex Press, Inc. All rights reserved. 2– 5

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 6

Figure 2. 1 Chronological Development of Management Perspectives © 2016 Wessex Press, Inc. All rights reserved. 2– 7

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 8

Figure 2. 2 Subfields of the Classical Perspective on Management Focuses on the individual worker’s productivity Focuses on the functions of management © 2016 Wessex Press, Inc. All rights reserved. Focuses on the overall organizational system 2– 9

Scientific Management: Taylor • Frederick W. Taylor (1856 -1915) Ø Father of “Scientific Management. v attempted to define “the one best way” to perform every task through systematic study and other scientific methods. v believed that improved management practices lead to improved productivity. Ø Three areas of focus: v Task Performance v Supervision v Motivation © 2016 Wessex Press, Inc. All rights reserved. 2– 10

Task Performance • Scientific management incorporates basic expectations of management, including: Ø Development of work standards Ø Selection of workers Ø Training of workers Ø Support of workers © 2016 Wessex Press, Inc. All rights reserved. 2– 11

Motivation • Taylor believed money was the way to motivate workers to their fullest capabilities. Ø He advocated a piecework system in which worker’s pay was tied to their output. v Workers who met a standard level of production were paid a standard wage rate. v Workers whose production exceeded the standard were paid at a higher rate for all of their production output. © 2016 Wessex Press, Inc. All rights reserved. 2– 12

Supervision • Taylor felt that a single supervisor could not be an expert at all tasks. Ø As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor. Ø This became known as “Functional Foremanship. ” © 2016 Wessex Press, Inc. All rights reserved. 2– 13

Scientific Management: The Gilbreths • Frank Gilbreth Ø Specialized in time and motion studies to determine the most efficient way to perform tasks. Ø Used motion pictures of bricklayers to identified work elements (therbligs) such as lifting and grasping. • Lillian Gilbreth Ø A strong proponent of better working conditions as a means of improving efficiency and productivity. v Favored standard days with scheduled lunch breaks and rest periods for workers. v Strived for removal of unsafe working conditions and the abolition of child labor. © 2016 Wessex Press, Inc. All rights reserved. 2– 14

Administrative Management: Fayol • Henri Fayol (1841– 1925) Ø First recognized that successful managers had to understand the basic managerial functions. Ø Developed a set of 14 general principles of management. Ø Fayol’s managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations. © 2016 Wessex Press, Inc. All rights reserved. 2– 15

Table 2. 1 Fayol’s General Principles of Management 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interest to the common good 7. Remuneration of personnel 8. 9. 10. 11. 12. 13. 14. Centralization Scalar chain Order Equity Stability Initiative Esprit de corps Source: Based on Henri Fayol, General and Industrial Management, trans. Constana Storrs (London: Pittman & Sons, 1949). © 2016 Wessex Press, Inc. All rights reserved. 2– 16

Bureaucratic Management • Focuses on the overall organizational system. • Bureaucratic management is based upon: Ø Firm rules Ø Policies and procedures Ø A fixed hierarchy Ø A clear division of labor © 2016 Wessex Press, Inc. All rights reserved. 2– 17

Bureaucratic Management: Weber • Max Weber (1864– 1920) Ø A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behavior—the approach to management now referred to as “bureaucracy. ” v Division of labor v Hierarchy of authority v Rules and procedures v Impersonality v Employee selection and promotion © 2016 Wessex Press, Inc. All rights reserved. 2– 18

Weber’s Forms of Authority • Traditional authority Ø Subordinate obedience based upon custom or tradition (e. g. , kings, queens, chiefs). • Charismatic authority Ø Subordinates voluntarily comply with a leader because of his or her special personal qualities or abilities (e. g. , Martin Luther King, Gandhi). • Rational-legal authority Ø Subordinate obedience based upon the position held by superiors within the organization (e. g. , police officers, executives, supervisors). © 2016 Wessex Press, Inc. All rights reserved. 2– 19

Table 2. 2 Weber’s Three Types of Authority Type Description Traditional Subordinate obedience based upon custom or tradition Charismatic Subordinate obedience based upon special personal qualities associated with certain social reformers, political leaders, religious leaders, or organizational leaders Rational–legal Subordinate obedience based upon the position held by superiors within the organization © 2016 Wessex Press, Inc. All rights reserved. 2– 20

Figure 2. 3 Bureaucratic Hierarchical Power Structure © 2016 Wessex Press, Inc. All rights reserved. 2– 21

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 22

Classical versus Behavioral Perspective vs. Classical Perspective Behavioral Perspective Focused on rational behavior Acknowledged the importance of human behavior © 2016 Wessex Press, Inc. All rights reserved. 2– 23

Behavioral Perspective • Followed the classical perspective in the development of management thought. Ø Acknowledged the importance of human behavior in shaping management style Ø Is associated with: v Mary Parker Follett v Elton Mayo v Douglas Mc. Gregor v Chester Barnard © 2016 Wessex Press, Inc. All rights reserved. 2– 24

Mary Parker Follett • Concluded that a key to effective management was coordination. • Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people. • Believed that management is a continuous, dynamic process. • Felt that the best decisions would be made by people who were closest to the situation. © 2016 Wessex Press, Inc. All rights reserved. 2– 25

Follett on Effective Work Groups • Four principles of coordination to promote effective work groups: 1. Coordination requires that people be in direct contact with one another. 2. Coordination is essential during the initial stages of any endeavor. 3. Coordination must address all factors and phases of any endeavor. 4. Coordination is a continuous, ongoing process. © 2016 Wessex Press, Inc. All rights reserved. 2– 26

Elton Mayo • Conducted the famous Hawthorne Experiments. Ø “Hawthorne Effect” v Productivity increased because attention was paid to the workers in the experiment. v Phenomenon whereby individual or group performance is influenced by human behavior factors. • His work represents the transition from scientific management to the early human relations movement. © 2016 Wessex Press, Inc. All rights reserved. 2– 27

Douglas Mc. Gregor • Proposed the Theory X and Theory Y styles of management. Ø Theory X managers perceive that their subordinates have an inherent dislike of work and will avoid it if at all possible. Ø Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs. © 2016 Wessex Press, Inc. All rights reserved. 2– 28

Table 2. 3 Comparison of Theory X and Theory Y Assumptions Factor Theory X Assumptions Theory Y Assumptions Employee attitude toward work Employees dislike work and. will avoid it if at all possible. Employees enjoy work and will actively seek it. Management view of direction Employees must be directed, coerced, controlled, or threatened to get them to put forth adequate effort. Employees are self-motivated and self-directed toward achieving organizational goals. Employee view of direction Employees wish to avoid responsibility; they prefer to be directed and told what to do and how to do it. Employees seek responsibility; they wish to use their creativity, imagination, and ingenuity in performing their jobs. Management style Authoritarian style of management Participatory style of management © 2016 Wessex Press, Inc. All rights reserved. 2– 29

Chester Barnard • Felt that executives serve two primary functions: Ø Must establish and maintain a communications system among employees. Ø Must establish the objectives of the organization and motivate employees. • Developed an acceptance theory of authority: Ø Authority of a manager flows from the ability of subordinates to accept or reject an order from the manager once they: v Comprehend what the order requires of them. v Review the order’s consistency with organization goals. v Perceive a personal benefit in obeying the order. © 2016 Wessex Press, Inc. All rights reserved. 2– 30

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 31

The Quantitative Perspective • Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. • This approach has four basic characteristics: 1. A decision-making focus 2. Development of measurable criteria 3. Formulation of a quantitative model 4. The use of computers © 2016 Wessex Press, Inc. All rights reserved. 2– 32

The Quantitative Perspective (cont’d) • Decision-Making Focus Ø The primary focus of the quantitative approach is on problems or situations that require direct action, or a decision, on the part of management. • Measurable Criteria Ø The decision-making process requires that the decision maker select some alternative course of action. Ø The alternatives must be compared on the basis of measurable criteria. © 2016 Wessex Press, Inc. All rights reserved. 2– 33

The Quantitative Perspective (cont’d) • Quantitative Model Ø To assess the likely impact of each alternative on the stated criteria, a quantitative model of the decision situation must be formulated. • Computers Ø Computers are quite useful in the problem-solving process. © 2016 Wessex Press, Inc. All rights reserved. 2– 34

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 35

Figure 2. 4 Basic Structure of Systems © 2016 Wessex Press, Inc. All rights reserved. 2– 36

Systems Perspective • An approach to problem solving based on an understanding of the basic structure of systems. Ø Environmental interaction v Open systems must interact with the external environment to survive. v Closed systems do not interact with the environment. Ø Synergy: when all subsystems work together making the whole greater than the sum of its parts. Ø Entropy: the tendency for systems to decay over time. © 2016 Wessex Press, Inc. All rights reserved. 2– 37

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 38

The Contingency Perspective • A view that proposes that there is no one best approach to management for all situations. Ø Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation. Ø This requires managers to identify the key contingencies in a given situation. © 2016 Wessex Press, Inc. All rights reserved. 2– 39

Figure 2. 5 Blending Components into a Contingency Perspective © 2016 Wessex Press, Inc. All rights reserved. 2– 40

An Example of the Contingency Perspective • Joan Woodward’s Research Ø Discovered that a particular management style is affected by the organization’s technology. Ø Identified and described three different types of technology: v Small-batch technology v Mass-production technology v Continuous-process technology © 2016 Wessex Press, Inc. All rights reserved. 2– 41

Table 2. 4 Production Technology Examples Small-batch technology Custom fabrication machine shop, manufacturer of neon advertising signs, print shop specializing in personal business cards, trophy-engraving shop Mass-production technology Manufacturer of automobiles, manufacturer of refrigerators, manufacturer of hair dryers, manufacturer of pencils Continuous-process technology Oil refinery, flour mill, soft drink bottler, chemical processor © 2016 Wessex Press, Inc. All rights reserved. 2– 42

Information Technology and Management Style • Information technology can facilitate the use of a particular management style. Classical Perspective Quantitative/ Systems Perspectives Facilitated by communications equipment Facilitated by advanced computers (ERP) © 2016 Wessex Press, Inc. All rights reserved. 2– 43

LEARNING OUTCOMES When you have finished studying this chapter, you should be able to explain: 1 2 3 4 5 The major influences on the development of management thought. The five major perspectives of management thought that have evolved over the years. The different subfields that exist in the classical perspective of management and the central focus of each. The theories of the major contributors to the behavioral perspective of management. The characteristics of the quantitative perspective of management. © 2016 Wessex Press, Inc. All rights reserved. 6 The systems perspective building blocks and their interactions. 7 8 The nature of the contingency perspective of management. The future issues that will affect the further development of management thought. 2– 44

Future Issues: Diversity, Globalization, Quality, and Sustainability • Heightened concern for diversity initiatives within the workplace and within management • Adoption of the concept of workers as decision makers, problem solvers, and team players • Creation of a focus on and commitment to the concept of quality (The successes of the Japanese management ( style – total quality control). • Concern over the depletion of natural resources and the degradation of environment, result in the practice of creating less waste and recycling materials when and where possible. © 2016 Wessex Press, Inc. All rights reserved. 2– 45

Management in the 21 st Century • William Ouchi’s Theory Z Ø Japanese-style approach to management developed by William Ouchi v Advocates trusting employees and making them feel like an integral part of the organization. v Based on the assumption that once a trusting relationship with workers is established, production will increase. © 2016 Wessex Press, Inc. All rights reserved. 2– 46

Future Leaders Must: • Be thoroughly schooled in the different management perspectives. • Understand the various influences that will have a continuing effect on management thinking • Be aware of how key business environment variables relate to their organization. • Know which elements to select from the various management perspectives that are appropriate for their situation. • Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete. © 2016 Wessex Press, Inc. All rights reserved. 2– 47