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  1. 1. Management Theories <ul><li>Traditional and Contemporary Issues and Challenges </li></ul>Figure 2.5 1890 2000 1980 1960 1990 1970 1940 1950 1930 1910 1920 1900 The Behavioral Perspective The Quantitative Perspective The Contingency Perspective The Systems Perspective Contemporary Applied Perspectives Theory Z and the Excellence Perspective The Classical Perspective Senge Covey Peters Porter Adams Kotter Hamel 2010
  2. 2. Classical Approaches to Mgmt. <ul><li>Scientific Management </li></ul><ul><ul><li>What is the best way to increase the efficiency and productivity of an individual employee? </li></ul></ul><ul><li>Administrative Management </li></ul><ul><ul><li>What is the best way to structure an organization so that employees are maximally efficient and productive? </li></ul></ul>
  3. 3. Frederick Taylor - Father of Scientific Management <ul><li>Degree in mechanical engineering </li></ul><ul><li>Started work at Midvale Steel company as a shop laborer, soon rose to foreman </li></ul><ul><li>Recognized need for “mental revolution” where “both sides take their eyes off the division of the surplus…and together turn their attention toward increasing the surplus.” </li></ul>
  4. 4. Taylor's Approach <ul><li>Use science (observation and experimentation) to design jobs </li></ul><ul><li>Use science to select workers - different people are suitable for different jobs </li></ul><ul><li>Train employees to do work the &quot;one best way,&quot; and pay them for the work they do </li></ul><ul><li>Have managers and employees work separately, but collaboratively - managers plan, organize and train. </li></ul>
  5. 5. Frederick Taylor - Bethlehem Steel Company <ul><li>Shovelers Study </li></ul><ul><ul><li>Employees shoveled fuel using their own shovels </li></ul></ul><ul><ul><li>Loads ranged from 3.5 to 38 lbs. </li></ul></ul><ul><ul><li>Taylor redesigned shovels to match fuel -- load weight: 21.5 lbs. </li></ul></ul><ul><ul><li>Tonnage went from 16 to 59 tons/day </li></ul></ul><ul><ul><li>Number of employees reduced from 500 to 140. </li></ul></ul>
  6. 6. Taylor’s Contributions <ul><li>Started systematic training for workers </li></ul><ul><li>Allowed laborers to receive middle class wages </li></ul><ul><li>Developed the concept of work design - giving employees the best tools and techniques to do their jobs </li></ul><ul><li>Started practice of managing based on research, questioning and investigation. </li></ul>
  7. 7. Other Scientific Management Pioneers <ul><li>Frank and Lillian Gilbreth </li></ul><ul><ul><ul><li>Reduced number of movements in bricklaying, resulting in increased output of 200% </li></ul></ul></ul><ul><li>Henry Gantt </li></ul><ul><ul><ul><li>Developed other techniques, including the Gantt chart, to improve working efficiency through planning and scheduling. </li></ul></ul></ul>
  8. 8. Gantt Chart
  9. 9. Administrative Management <ul><li>Henri Fayol - Position as assistant mining superintendent led to theories: </li></ul><ul><ul><li>Four basic management functions </li></ul></ul><ul><ul><li>Equal authority & responsibility </li></ul></ul><ul><ul><li>Unity of command </li></ul></ul><ul><ul><li>Division of work </li></ul></ul><ul><ul><li>Unity of direction </li></ul></ul><ul><ul><li>Scalar chain-of-command. </li></ul></ul>
  10. 10. ? Discussion Questions ? <ul><li>Do you see manager's using scientific management or administrative management ideas today? </li></ul><ul><li>What do you think would be the advantages of using these approaches where you work? The disadvantages? </li></ul>
  11. 11. Behavioral Management Perspective <ul><li>Emphasizes individual attitudes and behaviors and group processes </li></ul>Western Electric Hawthorne Works, Cicero, Illinois
  12. 12. Hawthorne Studies <ul><li>Fritz Rothlisberger </li></ul><ul><ul><li>Illumination study </li></ul></ul><ul><li>Elton Mayo </li></ul><ul><ul><li>Relay assembly test room experiment </li></ul></ul><ul><ul><li>Employee interviews </li></ul></ul><ul><ul><li>Bank wiring observation room experiment </li></ul></ul>
  13. 13. Hawthorne Study Contributions <ul><li>Identified the social and attitudinal components of work </li></ul><ul><li>Emphasized the importance of recognition, security and a sense of belonging on motivation </li></ul><ul><li>Established the impact of management actions on employee satisfaction. </li></ul>
  14. 14. Behavioral Management Perspective <ul><li>Human Relations Movement </li></ul><ul><ul><li>Abraham Maslow </li></ul></ul><ul><ul><ul><li>Hierarchy of Needs </li></ul></ul></ul><ul><ul><li>Douglas MacGregor </li></ul></ul><ul><ul><ul><li>Theory X; Theory Y. </li></ul></ul></ul>
  15. 15. Theory X and Theory Y Table 2.2 Source: Douglas McGregor, The Human Side of Enterprise , Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
  16. 16. ? Discussion Questions ? <ul><li>Have you ever had an experience where the attitudes of your co-workers affected your attitude? What happened? </li></ul><ul><li>Who do you think has the most influence on your attitude at work - your boss, your co-workers, or yourself? </li></ul>
  17. 17. Quantitative Management Perspective <ul><li>Using quantitative methods and models to manage decisions </li></ul>
  18. 18. Quantitative Management Perspective <ul><li>Management Science </li></ul><ul><ul><li>Development of mathematical models to assist with decisions </li></ul></ul><ul><li>Operations Management </li></ul><ul><ul><li>Applied management science </li></ul></ul><ul><ul><li>Helps an organization efficiently manage production and distribution of its products and services. </li></ul></ul>
  19. 19. <ul><li>An interrelated set of elements functioning as a whole </li></ul>Systems Perspective Environment Throughputs (Transformation) Organization Inputs Outputs
  20. 20. Systems Perspective <ul><li>Open systems - Systems that interact with one another and other environments </li></ul><ul><li>Closed systems - Systems that do not interact with their environment </li></ul><ul><li>Subsystems - Interdependent systems within systems. </li></ul>
  21. 21. Systems Perspective <ul><li>Synergy </li></ul><ul><ul><li>Subsystems are more successful working together than working alone. The whole, working together, is greater than the sum of its parts. </li></ul></ul><ul><li>Entropy </li></ul><ul><ul><li>A natural process, which leads to system decline. Should be avoided through organizational change and renewal. </li></ul></ul>
  22. 22. Contingency View Universalist : “ One best way” Case View : “ Every situation is unique ” Contingency View : Different situations require different approaches. What works best in one situation might not work in another. Managers must analyze the situation to find the right solution.
  23. 23. A Contingency Theory <ul><li>Independent Variable 1 = Industry environment (turbulent or static) </li></ul><ul><li>Independent Variable 2 = Organization design (structured or unstructured) </li></ul><ul><li>Dependent Variable = Success of company </li></ul><ul><li>Theory = Structured companies more successful in static environments, unstructured companies more successful in turbulent environments. </li></ul>
  24. 24. Can Theory Solve Real Problems? <ul><li>You manage a group of 5 employees at the GAP. Recently, sales have dropped. What should you do, according to: </li></ul><ul><ul><li>Scientific Management Theory </li></ul></ul><ul><ul><li>Behavioral Management Theory </li></ul></ul><ul><ul><li>Quantitative Management Theory </li></ul></ul><ul><ul><li>Contingency Theory? </li></ul></ul>
  25. 25. ? Discussion Questions ? <ul><li>Which of the theories do you think provides an approach that you would be most likely to use in real life? Why? </li></ul><ul><li>Is there any way of combining the approaches suggested by the different theories? </li></ul>
  26. 26. An Integrative Framework of Management Perspectives Figure 2.4 Systems Approach • Recognition of internal interdependencies • Recognition of environmental influences Contingency Perspective • Recognition of the situational nature of management • Response to particular characteristics of situation Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling Behavioral Management Perspectives Insights for moti- vating performance and understanding individual behavior, groups and teams, and leadership Quantitative Management Perspectives Techniques for improving decision making, resource allocation, and operations Effective and efficient management