Power Point Presentation to Accompany Chapter 2 of

Power. Point Presentation to Accompany Chapter 2 of Management Fundamentals Canadian Edition Schermerhorn Wright Prepared by: Michael K. Mc. Cuddy Adapted by: Lynda Anstett & Lorie Guest Published by: John Wiley & Sons Canada, Ltd.

Planning Ahead — Chapter 2 Study Questions Ø What can be learned from classical management thinking? Ø What ideas were introduced by the human resource approaches? Ø What is the role of quantitative analysis in management? Ø What is unique about the systems view and contingency thinking? Ø What are the continuing management themes of the 21 st century? Management Fundamentals - Chapter 2 2

Study Question 1: What can be learned from classical management thinking? ØClassical approaches to management include: – Scientific management – Administrative principles – Bureaucratic organization Management Fundamentals - Chapter 2 3

Figure 2. 1 Major branches in the classical approach to management. Management Fundamentals - Chapter 2 4

Study Question 1: What can be learned from classical management thinking? Ø Scientific management (Frederick Taylor) – Develop rules of motion, standardized work implements, and proper working conditions for every job. – Carefully select workers with the right abilities for the job. – Carefully train workers and provide proper incentives. – Support workers by carefully planning their work and removing obstacles. Management Fundamentals - Chapter 2 5

Study Question 1: What can be learned from classical management thinking? Ø Scientific management (the Gilbreths) – Motion study • Science of reducing a job or task to its basic physical motions. – Eliminating wasted motions improves performance. Management Fundamentals - Chapter 2 6

Study Question 1: What can be learned from classical management thinking? Ø Administrative principles (Henri Fayol) — rules of management: – Foresight — to complete a plan of action for the future. – Organization — to provide and mobilize resources to implement the plan. – Command — to lead, select, and evaluate workers to get the best work toward the plan. – Coordination — to fit diverse efforts together and ensure information is shared and problems solved. – Control — to make sure things happen according to plan and to take necessary corrective action. Management Fundamentals - Chapter 2 7

Study Question 1: What can be learned from classical management thinking? Ø Administrative principles (Henri Fayol) — key principles of management: – Scalar chain — there should be a clear and unbroken line of communication from the top to the bottom of the organization. – Unity of command — each person should receive orders from only one boss. – Unity of direction — one person should be in charge of all activities with the same performance objective. Management Fundamentals - Chapter 2 8

Study Question 1: What can be learned from classical management thinking? Ø Administrative principles (Mary Parker Follett) – Groups and human cooperation: • Groups are mechanisms through which individuals can combine their talents for a greater good. • Organizations are cooperating “communities” of managers and workers. • Manager’s job is to help people in the organization cooperate and achieve an integration of interests. Management Fundamentals - Chapter 2 9

Study Question 1: What can be learned from classical management thinking? Ø Administrative principles (Mary Parker Follett) – Forward-looking management insights: • Making every employee an owner creates a sense of collective responsibility (precursor of employee ownership, profit sharing, and gain-sharing) • Business problems involve a variety of inter-related factors (precursor of systems thinking) • Private profits relative to public good (precursor of managerial ethics and social responsibility) Management Fundamentals - Chapter 2 10

Study Question 1: What can be learned from classical management thinking? Ø Bureaucratic organization (Max Weber) – Bureaucracy • An ideal, intentionally rational, and very efficient form of organization. • Based on principles of logic, order, and legitimate authority. Management Fundamentals - Chapter 2 11

Study Question 1: What can be learned from classical management thinking? Ø Characteristics of bureaucratic organizations: – Clear division of labor – Clear hierarchy of authority – Formal rules and procedures – Impersonality – Careers based on merit Ø Possible disadvantages of bureaucracy: – Excessive paperwork or “red tape” – Slowness in handling problems – Rigidity in the face of shifting needs – Resistance to change – Employee apathy Management Fundamentals - Chapter 2 12

Study Question 2: What ideas were introduced by the human resource approaches? Ø Human resource approaches include: – Hawthorne studies – Maslow’s theory of human needs – Mc. Gregor’s Theory X and Theory Y – Argyris’s theory of adult personality Management Fundamentals - Chapter 2 13

Figure 2. 2 Foundations in the behavioral or human resource approaches to management. Management Fundamentals - Chapter 2 14

Study Question 2: What ideas were introduced by the human resource approaches? Ø Hawthorne studies – Initial study examined how economic incentives and physical conditions affected worker output. – No consistent relationship found. – “Psychological factors” influenced results. Management Fundamentals - Chapter 2 15

Study Question 2: What ideas were introduced by the human resource approaches? Ø Hawthorne studies (cont. ) – Relay assembly test-room studies • Manipulated physical work conditions to assess impact on output. • Designed to minimize the “psychological factors” of previous experiment. • Factors that accounted for increased productivity: – Group atmosphere – Participative supervision Management Fundamentals - Chapter 2 16

Study Question 2: What ideas were introduced by the human resource approaches? Ø Hawthorne studies (cont. ) – Employee attitudes, interpersonal relations, and group processes. • Some things satisfied some workers but not others. • People restricted output to adhere to group norms. – Lessons from the Hawthorne Studies: • Social and human concerns are keys to productivity. • Hawthorne effect — people who are singled out for special attention perform as expected. Management Fundamentals - Chapter 2 17

Study Question 2: What ideas were introduced by the human resource approaches? Ø Maslow’s theory of human needs – A need is a physiological or psychological deficiency a person feels compelled to satisfy. – Need levels: • • • Physiological Safety Social Esteem Self-actualization Management Fundamentals - Chapter 2 18

Figure 2. 3 Maslow’s hierarchy of human needs. Management Fundamentals - Chapter 2 19

Study Question 2: What ideas were introduced by the human resource approaches? Ø Maslow’s theory of human needs – Deficit principle • A satisfied need is not a motivator of behavior. – Progression principle • A need becomes a motivator once the preceding lower-level need is satisfied. – Both principles cease to operate at self-actualization level. Management Fundamentals - Chapter 2 20

Study Question 2: What ideas were introduced by the human resource approaches? Ø Mc. Gregor’s Theory X assumes that workers: – – – Dislike work Lack ambition Are irresponsible Resist change Prefer to be led Ø Mc. Gregor’s Theory Y assumes that workers are: – Willing to work – Capable of self control – Willing to accept responsibility – Imaginative and creative – Capable of selfdirection Management Fundamentals - Chapter 2 21

Study Question 2: What ideas were introduced by the human resource approaches? Ø Implications of Theory X and Theory Y: – Managers create self-fulfilling prophecies. – Theory X managers create situations where workers become dependent and reluctant. – Theory Y managers create situations where workers respond with initiative and high performance. • Central to notions of empowerment and selfmanagement. Management Fundamentals - Chapter 2 22

Study Question 2: What ideas were introduced by the human resource approaches? Ø Argyris’s theory of adult personality – Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality. – Management practices should accommodate the mature personality by: • Increasing task responsibility • Increasing task variety • Using participative decision making Management Fundamentals - Chapter 2 23

Study Question 3: What is the role of quantitative analysis in management? Ø Management science (operations research) foundations – Scientific application of mathematical techniques to management problems – Techniques and applications include: • • • Mathematical forecasting Inventory modeling Linear programming Queuing theory Network models Simulations Management Fundamentals - Chapter 2 24

Study Question 3: What is the role of quantitative analysis in management? Ø Quantitative analysis today – Use of staff specialists to help managers apply techniques. – Software and hardware developments have expanded potential quantitative applications to managerial problems. – Good judgment and appreciation for human factors must accompany use of quantitative analysis. Management Fundamentals - Chapter 2 25

Study Question 4: What is unique about the systems view and contingency thinking? Ø Systems thinking – System • Collection of interrelated parts that function together to achieve a common purpose. – Subsystem • A smaller component of a larger system. – Open systems • Organizations that interact with their environments in the continual process of transforming resource inputs into outputs. Management Fundamentals - Chapter 2 26

Figure 2. 4 Organizations as complex networks of interacting subsystems. Management Fundamentals - Chapter 2 27

Study Question 4: What is unique about the systems view and contingency thinking? Ø Contingency thinking – Tries to match managerial responses with problems and opportunities unique to different situations. • Especially individual or environmental differences. – No “one best way” to manage. – Appropriate way to manage depends on the situation. Management Fundamentals - Chapter 2 28

Study Question 5: What are continuing management themes of the 21 st century? Ø Quality and performance excellence – Managers and workers in progressive organizations are quality conscious. • Quality and competitive advantage are linked. – Total quality management (TQM) • Comprehensive approach to continuous quality improvement for a total organization. • Creates context for the value chain. Management Fundamentals - Chapter 2 29

Study Question 5: What are continuing management themes of the 21 st century? Ø Eight attributes of performance excellence: – A bias toward action – Closeness to the customer – Autonomy and entrepreneurship – Productivity through people – Hands-on and value-driven – Sticking to the knitting – Simple form and lean staff – Simultaneous loose-tight properties Management Fundamentals - Chapter 2 30

Figure 2. 5 The organizational value chain. Management Fundamentals - Chapter 2 31

Study Question 5: What are continuing management themes of the 21 st century? Ø Global awareness – Pressure for quality and performance excellence is created by a highly competitive global economy. – Has promoted increasing interest in new management concepts. • • Process engineering Virtual organizations Agile factories Network firms – Adoption of Theory Z management practices. Management Fundamentals - Chapter 2 32

Study Question 5: What are continuing management themes of the 21 st century? Ø Contemporary businesses must learn to become learning organizations. Ø Core ingredients of learning organizations: – Mental models – Personal mastery – Systems thinking – Shared vision – Team learning Management Fundamentals - Chapter 2 33

Study Question 5: What are continuing management themes of the 21 st century? Ø In the 21 st century, managers must be: – Global strategists – Masters of technology – Inspiring leaders – Models of ethical behavior Management Fundamentals - Chapter 2 34

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