2. Learning from the History of
Management Thought
Learning Goals
1. Describe the three branches of the traditional
viewpoint of management:
2. Explain the behavioral viewpoint’s contribution
to management
Bureaucratic, Scientific, and
Administrative
3. Learning Goals (cont’d)
3. Describe how managers can use systems and
quantitative techniques to improve employee
performance
4. State the two major components of the
contingency viewpoint
5. Explain the impact of the need for quality on
management practices
7. Bureaucratic Management
Use of rules, hierarchy, a clear division of labor,
and detailed procedures to guide employees’
behaviors
Seven characteristics
Rules—formal guidelines for the behavior of
employees on the job
Impersonality—employees are evaluated
according to rules and objective data
Division of Labor—splitting work into
specialized positions
8. Caliper Technologies CorporationCaliper Technologies Corporation
(adapted from Figure 2.2)(adapted from Figure 2.2)
CEO
Director of
Quality
Control
Chief
Financial
Officer
VP of
Operations
VP of
Sales &
Marketing
VP of
Research
VP of
Product
Development
VP of
Corporate
Development
Plant
Manager
USA
Controller
Plant
Manager
Germany
Manager of
Chemical
Engineering
Manager of
Chip
Manufacturing
Manager of
Engineering
& Software
Director
of
Manufacturing
Director
of
Manufacturing
Employees Employees
9. Hierarchical Structure—ranks jobs according
to the amount of authority in each job
Authority—who has the right to make
decisions of varying importance at different
organizational levels
Traditional authority
Charismatic authority
Rational, legal authority
Lifelong Career Commitment—both the employee
and the organization view themselves committed to
each other over the working life of the employee
Rationality—the use of the most efficient
means available to accomplish a goal
10. “Each job has a policy manual detailing the rules
that a person needs to follow to ensure efficiency.
Drivers are told to walk to a customer’s door at a
brisk pace of 3 feet per second, carrying the
package in the right hand and clipboard in the
left. They should knock on the door so as not to
lose valuable seconds searching for a doorbell.”
Michael Eskew
Chairman and CEO, UPS
Snapshot
11. LOW MIDRANGE HIGH
DreamWorks Sony IRS
R&D Thinktank 7-11 McDonalds
MP3 PepsiCo State Motor
Vehicle
Registration
Bureaucratic Continuum
12. Potential Benefits of Bureaucracy
Efficiency
Consistency
Functions best when routine tasks are performed
Performance based on objective criteria
Most effective when
Large amounts of standard information have to be processed
The needs of the customer are known and are unlikely to
change
The technology is routine and stable (e.g., mass production)
The organization has to coordinate the activities of employees
in order to deliver a standardized service/product to the
customer
13. Potential Costs of Bureaucracy
Rigid rules
and
red tape
Protection of authority Slow decision making
Incompatible with
changing
technology
Incompatible with
21st
century workers’
values for freedom
and participative
management
14. Scientific Management
Frederick W. Taylor
The father of Scientific Management
– the 1st Efficiency Expert.
A philosophy and set of management
practices that are based on fact and
observation, not on guesswork
15. Scientific Management
Believed increased productivity depended on
finding ways to make workers more efficient
Used time-and-motion studies to analyze work
flows, supervisory techniques, and worker fatigue
Used functional foremanship, a division of labor
that assigned eight foremen to each work area
Assumed workers motivated by money $$
16. • He was interested in machines --
apprenticeship in industry: Midvale Steel
• Shocked by how inefficient his fellow
workers were
• timed workers with stopwatches
• break down job into parts, make parts
efficient
• figure out how to hire the right worker for
the job
• give the worker appropriate training
Taylor’s Work?
17. • introduced incentive pay plans
(workers were assumed to be motivated
only by money).
• Believed would lead to cooperation--
management and worker
• Studied design of shovels and introduced
a better design at Bethlehem Steel Works,
reducing the number of people shoveling
from 500 to 140
Taylor’s Work? Contd.
18. Scientific Management
The Gilbreths
Frank Gilbreth used motion pictures
to analyze workers’ motions
Lillian Gilbreth championed protecting
workers from unsafe working conditions
Henry Gantt
Focused on control systems for
production scheduling (Gantt Chart)
19. Frank and Lillian Gilbreth
refined Taylor’s methods and suggested
1. Breaking down each action into individual
components.
2. Find better ways to perform the action.
3. Reorganize each action to be more efficient.
Problems associated with Scientific Management
Managers often gave attention only to increasing output
They did not allow workers to share in the benefits of
increased output.
Specialized jobs became very boring & dull.
Workers ended up distrusting Scientific Management.
20. Henry L. GanttHenry L. Gantt
How to increase worker’s efficiency?How to increase worker’s efficiency?
““The essential difference between the best systemThe essential difference between the best system
of today and those of the past are the manner inof today and those of the past are the manner in
whichwhich the tasks are scheduledthe tasks are scheduled, and, and the mannerthe manner
in which their performance is rewardedin which their performance is rewarded””
Scheduling InnovationScheduling Innovation
Gantt Chart – scheduling summary of workGantt Chart – scheduling summary of work
Rewarding InnovationRewarding Innovation
Bonus in addition to the piece rate if they exceeded theirBonus in addition to the piece rate if they exceeded their
daily production quotadaily production quota
On time = Bonus, Good Performance = RewardOn time = Bonus, Good Performance = Reward
21. Insights from Scientific Management
Many companies have used scientific management
principles to improve efficiency, employee selection
and training
Scientific management failed to recognize the
social needs of workers and the importance of
working conditions and job satisfaction
22. David Berbauer
CEO, Walgreens
“Walgreens is constantly pushing to drive costs down. It
pioneered the application of satellite communications and
computer technology and linked these to increase store
efficiency. By using tried-and-proven management concepts,
each of its 6,100 stores [is] able to process around 280
prescriptions a day and beat Wal-Mart by 27 cents and CVS
by 94 cents on each prescription.”
Snapshot
23. Administrative Management: Overview
Focuses on the manager and basic managerial
functions of planning, organizing, controlling
and leading
Unity of Command Principle: an
employee should report to only one
manager
Authority Principle: managers have the
right to give orders to get things done
24. Fayol’s Principles of Effective ManagementFayol’s Principles of Effective Management
Division of Work:Division of Work: allows for job specialization.allows for job specialization.
Work should be divided among individuals and groups.Work should be divided among individuals and groups.
Authority and ResponsibilityAuthority and Responsibility
Authority right to give ordersAuthority right to give orders
Responsibility involves being answerableResponsibility involves being answerable
Whoever assumes authority assumes responsibilityWhoever assumes authority assumes responsibility
DisciplineDiscipline
Common efforts of workers. PenaltiesCommon efforts of workers. Penalties
Unity of CommandUnity of Command
Employees should have only one boss.Employees should have only one boss.
25. Unity of DirectionUnity of Direction
A single plan of action to guide the organization.A single plan of action to guide the organization.
Subordination of individual interests to the generalSubordination of individual interests to the general
interests of organizationinterests of organization
RemunerationRemuneration
An equitable uniform payment system that motivatesAn equitable uniform payment system that motivates
contributes to organizational success.contributes to organizational success.
CentralizationCentralization
The degree to which authority rests at the top of theThe degree to which authority rests at the top of the
organization.organization.
Scalar ChainScalar Chain
Chainlike authority scale.Chainlike authority scale.
Most vs. least authorityMost vs. least authority
26. OrderOrder
The arrangement of employees where they will be ofThe arrangement of employees where they will be of
the most value to the organization and to providethe most value to the organization and to provide
career opportunities.career opportunities.
EquityEquity
The provision of justice and the fair and impartialThe provision of justice and the fair and impartial
treatment of all employees.treatment of all employees.
Stability of Tenure of PersonnelStability of Tenure of Personnel
Long-term employment is important for theLong-term employment is important for the
development of skills that improve the organization’sdevelopment of skills that improve the organization’s
performance. Subordination of Individual Interest toperformance. Subordination of Individual Interest to
the Common Interestthe Common Interest
The interest of the organization takes precedenceThe interest of the organization takes precedence
over that of the individual employee.over that of the individual employee.
27. InitiativeInitiative
The fostering of creativity and innovation byThe fostering of creativity and innovation by
encouraging employees to act on their own.encouraging employees to act on their own.
Esprit de corpsEsprit de corps
Harmony, general good feeling among employees,Harmony, general good feeling among employees,
shared enthusiasm, foster devotion to the commonshared enthusiasm, foster devotion to the common
cause (organization).cause (organization).
28. Behavioral Viewpoint: Overview
Focuses on dealing effectively with the
human aspects of organizations
Started in the 1930’s
Emphasis on working conditions
Workers wanted respect
Workers formed unions to bargain
with management
29. Mary Parker Follett’s Contributions
Managers need to
communicate with
workers Workers should
participate in solving
problems
Managers need to establish
good working relationships
with employees
Goal:
Improve
Coordination
30. “Managers need to have a common
touch and to be a team leader and not a
drill sergeant. When their people shine,
they shine.”
Vickie Yoke, Senior Vice President, Alcatel
Snapshot
31. Chester Barnard’s Contributions
People should continuously communicate
and cooperate with one another
Acceptance theory of authority holds that employees
have free wills and, thus, choose whether to follow
management’s orders. Employees will follow orders if
they:
Understand what is required
Believe the orders are consistent with
organization goals
See positive benefits to themselves in
carrying out the orders
32. The Hawthorne StudiesThe Hawthorne Studies
Studies of how characteristics of the work settingStudies of how characteristics of the work setting
affected worker fatigue and performance at theaffected worker fatigue and performance at the
Hawthorne Works of the Western ElectricHawthorne Works of the Western Electric
Company from 1924-1932.Company from 1924-1932.
Worker productivity was measured at variousWorker productivity was measured at various
levels of light illumination.levels of light illumination.
Researchers found that regardless of whetherResearchers found that regardless of whether
the light levels were raised or lowered, workerthe light levels were raised or lowered, worker
productivity increased.productivity increased.
33. The Hawthorne StudiesThe Hawthorne Studies
The Relay Assembly Test Room ExperimentsThe Relay Assembly Test Room Experiments
Working conditions and productivityWorking conditions and productivity
The Bank Wiring Observation Room ExperimentThe Bank Wiring Observation Room Experiment
Analyze the social relationships in a work groupAnalyze the social relationships in a work group
The Hawthorne StudiesThe Hawthorne Studies
34. Employees are
motivated by social
needs and association
with others
Employees’ performance
is more a result of peer
pressure than
management’s incentives
and rules
Managers need to
involve subordinates
in coordinating their
work to improve
efficiency
Employees want to
participate in decisions
that affect them
Lessons from the Hawthrone StudiesLessons from the Hawthrone Studies
Behavioral ViewpointBehavioral Viewpoint
35. Snapshot
“Teamwork is one of the most beautiful
experiences in life. Teamwork is our
core value and a primary way that the
Container Store enriches the quality
of employees’ work life.”
Kip Tindell, President, The Container Store
36. System: an association of interrelated
and interdependent parts
Systems viewpoint: an approach to solving
problems by diagnosing them within a
framework of transformation processes,
outputs, and feedback
Systems Viewpoint:Systems Viewpoint:
Systems ConceptsSystems Concepts
38. Closed system: limits its interactions with
the environment (e.g., stamping department
in GM assembly plant)
Open system: interacts with the external
environment (e.g., marketing department)
System TypesSystem Types
39. Mathematical
models are used
to simulate
changes
Computers are
essential
Primary focus is
on decision
making
Alternatives are
based on
economic criteria
Quantitative TechniquesQuantitative Techniques
41. The Contingency ApproachThe Contingency Approach
What managers do in practice depends on a
given set of circumstances – a situation.
42. Management practices should be consistent
with the requirements of the external
environment, the technology used to make a
product or provide a service, and capabilities
of the people who work for the organization
Uses concepts of the traditional, behavioral
and system viewpoints
43. External environment—stable or
changing
Technology—simple or complex
People—ways they are similar and
different from each other
Contingency VariablesContingency Variables
44. Behavioral Viewpoint
How managers influence others;
Informal group
Cooperation among employees
Employee’s social needs
Systems Viewpoint
How the parts fit together.
Inputs
Transformations
Outputs
Traditional Viewpoint
What managers do:
Plan
Organize
Lead
Control
Contingency Viewpoint
Managers’ use of other viewpoints
to solve problems involving:
External environment
Technology
Individuals
Contingency Viewpoint: Draws onContingency Viewpoint: Draws on
Other Viewpoints, As NecessaryOther Viewpoints, As Necessary
45. Quality: how well a product or service
does what it is supposed to do—how closely
and reliably it satisfies the specifications to
which it is built or provided
Total Quality Management (TQM): a
philosophy that makes quality values the
driving force behind leadership, design,
planning, and improvement initiatives
46. Inputs or raw materials
Operations
Outputs
Measuring by variable or a product’s characteristics
Measuring by attribute or a product’s acceptable/
unacceptable characteristics
Statistical process control
Quality of a process (e.g., sigma)
Quality Control ProcessQuality Control Process
47. Lower Costs
and Higher
Market Share
Decreased
Product
Liability Quality
Positive
Company
Image
Learning from the Quality ViewpointLearning from the Quality Viewpoint
