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Ppt ch02

  1. 1. Chapter Two The Evolution of Management Thought
  2. 2. Chapter Objectives <ul><li>Identify two key assumptions supporting the universal process approach, and briefly describe Henri Fayol’s contribution. </li></ul><ul><li>Discuss Frederick W. Taylor’s approach to improving the practice of industrial management. </li></ul><ul><li>Identify at least four key quality improvement ideas from W. Edwards Deming and the other quality advocates. </li></ul><ul><li>Describe the general aim of the human relations movement and explain the circumstances in which it arose. </li></ul>
  3. 3. Chapter Objectives (cont’d) <ul><li>Explain the significance of applying open-system thinking to management. </li></ul><ul><li>Explain the practical significance of adopting a contingency perspective. </li></ul><ul><li>Describe what “management by best seller” involves and explain what managers can do to avoid it. </li></ul>
  4. 4. Figure 2.1: Management Is a Global Affair
  5. 5. The Practice and Study of Management <ul><li>The systematic study of management did not begin in earnest until after 1900. </li></ul><ul><li>The practice of management is much older, stretching as far back as the construction of the pyramids. </li></ul>
  6. 6. The Practice and Study of Management (cont’d) <ul><li>Information Overload </li></ul><ul><ul><li>Management has not had a systematically recorded body of knowledge until recently. </li></ul></ul><ul><ul><li>Today, vast amounts of relevant information are readily available in print and electronic media. </li></ul></ul><ul><li>An Interdisciplinary Field </li></ul><ul><ul><li>The manifold increase in management theory information is due largely to its interdisciplinary nature in drawing from several fields (e.g., psychology, mathematics, economics, history, and engineering). </li></ul></ul>
  7. 7. No Universally Accepted Theory of Management <ul><li>There are several approaches to the theory and practice of management. </li></ul><ul><ul><li>The universal process approach </li></ul></ul><ul><ul><li>The operational approach </li></ul></ul><ul><ul><li>The behavioral approach </li></ul></ul><ul><ul><li>The systems approach </li></ul></ul><ul><ul><li>The contingency approach </li></ul></ul><ul><ul><li>The attributes of excellence approach </li></ul></ul>
  8. 8. The Universal Process Approach <ul><li>Universal Process Approach </li></ul><ul><ul><li>Assumes all organizations require the same rational management process </li></ul></ul><ul><ul><ul><li>Core management process remains the same regardless of the purpose of the organization. </li></ul></ul></ul><ul><ul><ul><li>The management process can be reduced to a set of separate functions and related principles. </li></ul></ul></ul>
  9. 9. Henri Fayol’s Universal Management Process <ul><li>Fayol published Administration Industrielle et Générale in 1916. </li></ul><ul><ul><li>He divided a manager’s job into five functions: </li></ul></ul><ul><ul><ul><li>Planning </li></ul></ul></ul><ul><ul><ul><li>Organizing </li></ul></ul></ul><ul><ul><ul><li>Command </li></ul></ul></ul><ul><ul><ul><li>Coordination </li></ul></ul></ul><ul><ul><ul><li>Control </li></ul></ul></ul><ul><ul><li>He developed 14 universal principles of management. </li></ul></ul>
  10. 11. Henri Fayol’s Universal Management Process (cont’d) <ul><li>Lessons from the Universal Process Approach </li></ul><ul><ul><li>The management process can be separated into interdependent functions. </li></ul></ul><ul><ul><li>Management is a continuous process. </li></ul></ul><ul><ul><li>Management is a largely, though not an entirely, rational process. </li></ul></ul><ul><ul><li>The functional approach is useful because it specifies what managers should do. </li></ul></ul>
  11. 12. The Operational Approach <ul><li>Frederick W. Taylor’s Scientific Management </li></ul><ul><ul><li>Developing performance standards on the basis of systematic observations and experimentation </li></ul></ul><ul><ul><ul><li>Standardization of work practices and methods to reduce waste and increase productivity </li></ul></ul></ul><ul><ul><ul><li>Time and task study of workers’ efforts to maximize productivity and output </li></ul></ul></ul><ul><ul><ul><li>Systematic selection and training of workers to increase efficiency and productivity </li></ul></ul></ul><ul><ul><ul><li>Differential pay incentives based on established work standards </li></ul></ul></ul>
  12. 13. Figure 2.2: Taylor’s Differential Piece-Rate Plan
  13. 14. Taylor’s Followers <ul><li>Frank and Lillian Gilbreth </li></ul><ul><ul><li>Refined time and motion study methods for use in work simplification </li></ul></ul><ul><li>Henry L. Gantt </li></ul><ul><ul><li>Refined production control and cost-control techniques </li></ul></ul><ul><ul><li>Developed the Gantt chart for work scheduling of projects </li></ul></ul><ul><ul><li>Early advocate of the importance of the human factor and the importance of customer service over profits </li></ul></ul>
  14. 15. The Quality Advocates <ul><li>Walter A. Shewhart </li></ul><ul><ul><li>Introduced the concept of statistical quality control </li></ul></ul><ul><li>Kaoru Ishikawa </li></ul><ul><ul><li>Proposed a preventive approach to quality </li></ul></ul><ul><ul><li>Developed fishbone diagram approach to problem solving </li></ul></ul><ul><li>W. Edwards Deming </li></ul><ul><ul><li>Based his 14 principles on reformed management style, employee participation, and striving for continuous improvement </li></ul></ul>
  15. 16. The Quality Advocates (cont’d) <ul><li>Joseph M. Juran </li></ul><ul><ul><li>Proposed the concept of internal customers, teamwork, partnerships with suppliers, and brainstorming </li></ul></ul><ul><ul><li>Developed Pareto analysis (the 80/20 rule) as a tool for separating major problems from minor ones </li></ul></ul><ul><li>Armand V. Feigenbaum </li></ul><ul><ul><li>Developed the concept of total quality control </li></ul></ul><ul><li>Philip B. Crosby </li></ul><ul><ul><li>Promoted the idea of zero defects (doing it right the first time) </li></ul></ul>
  16. 17. The Operational Approach <ul><li>Lessons from the Operational Approach </li></ul><ul><ul><li>A dedication to finding a better way is still important. </li></ul></ul><ul><ul><li>Using scientific management doesn’t dehumanize workers. </li></ul></ul><ul><ul><li>Quality advocates, inspired by the scientific approach, have been right all along about the importance of quality and continuous improvement. </li></ul></ul><ul><ul><li>The operational approach fostered the development of operations management. </li></ul></ul>
  17. 18. The Behavioral Approach <ul><li>The Human Relations Movement </li></ul><ul><ul><li>An effort to make managers more sensitive to their employees’ needs </li></ul></ul><ul><ul><li>Arose out of the influences of </li></ul></ul><ul><ul><ul><li>The threat of unionization </li></ul></ul></ul><ul><ul><ul><li>The Hawthorne studies </li></ul></ul></ul><ul><ul><ul><li>The philosophy of industrial humanism </li></ul></ul></ul>
  18. 19. Figure 2.3: The Human Relations Movement Pyramid
  19. 20. The Behavioral Approach (cont’d) <ul><li>The Threat of Unionization </li></ul><ul><ul><li>The Wagner Act of 1935 legalized union-management collective bargaining, promoting the growth of unions and union avoidance by firms. </li></ul></ul><ul><li>The Hawthorne Studies (1924) </li></ul><ul><ul><li>The study’s results that productivity was strongly affected by workers’ attitudes turned management toward the humanistic and realistic viewpoint of the “social man” model. </li></ul></ul>
  20. 21. The Philosophy of Industrial Humanism <ul><li>Elton Mayo </li></ul><ul><ul><li>Emotional factors were more important determinants of productive efficiency than were physical and logical factors. </li></ul></ul><ul><li>Mary Parker Follett </li></ul><ul><ul><li>Managers should be aware of how complex each employee is and how to motivate employees to cooperate rather than to demand performance from them. </li></ul></ul>
  21. 22. The Philosophy of Industrial Humanism (cont’d) <ul><li>Douglas McGregor </li></ul><ul><ul><li>Developed Theory X and Theory Y </li></ul></ul><ul><ul><ul><li>Theory X: Management’s traditionally negative view of employees as unmotivated and unwilling workers </li></ul></ul></ul><ul><ul><ul><li>Theory Y: The positive view of employees as energetic, creative, and willing workers </li></ul></ul></ul>
  22. 24. Organizational Behavior <ul><li>Organizational Behavior </li></ul><ul><ul><li>A modern research-oriented approach seeking to discover the causes of work behavior and to develop better management techniques </li></ul></ul><ul><li>Lessons from the Behavioral Approach </li></ul><ul><ul><li>People are the key to productivity. </li></ul></ul><ul><ul><li>Success depends on motivated and skilled individuals committed to the organization. </li></ul></ul><ul><ul><li>Managerial sensitivity to employees is necessary to foster the cooperation needed for high productivity. </li></ul></ul>
  23. 25. The Systems Approach <ul><li>What Is a System? </li></ul><ul><ul><li>A collection of parts operating interdependently to achieve a common purpose </li></ul></ul><ul><li>Systems Approach </li></ul><ul><ul><li>Posits that the performance of the whole is greater than the sum of the performance of its parts </li></ul></ul><ul><ul><ul><li>Analytic versus synthetic thinking: Outside-in thinking versus inside-out thinking </li></ul></ul></ul><ul><ul><ul><li>Seeks to identify all parts of an organized activity and how they interact </li></ul></ul></ul>
  24. 26. The Systems Approach <ul><li>Chester I. Barnard’s Early Systems Perspective </li></ul><ul><ul><li>Wrote Functions of the Executive </li></ul></ul><ul><ul><li>Characterized all organizations as cooperative systems </li></ul></ul><ul><ul><li>Defined principal elements in an organization as </li></ul></ul><ul><ul><ul><li>Willingness to serve </li></ul></ul></ul><ul><ul><ul><li>Common purpose </li></ul></ul></ul><ul><ul><ul><li>Communication </li></ul></ul></ul><ul><ul><li>Strong advocate of business ethics </li></ul></ul>
  25. 27. Figure 2.4: Barnard’s Cooperative System
  26. 28. General Systems Theory <ul><li>General Systems Theory </li></ul><ul><ul><li>An area of study based on the assumptions that everything is part of a larger, interdependent arrangement </li></ul></ul><ul><li>Levels of systems </li></ul><ul><ul><li>Each system is a subsystem of the system above it. </li></ul></ul><ul><ul><li>Identification of systems at various levels helps translate abstract systems theory into more concrete terms. </li></ul></ul>
  27. 29. Figure 2.5: Levels of Living Systems
  28. 30. General Systems Theory (cont’d) <ul><li>Closed Versus Open Systems </li></ul><ul><ul><li>Closed system: A self-sufficient entity </li></ul></ul><ul><ul><li>Open system: Something that depends on its surrounding environment for survival </li></ul></ul><ul><li>Systems are classified as open (closed) by how much (how little) they interact with their environments. </li></ul>
  29. 31. General Systems Theory (cont’d) <ul><li>New Directions in Systems Thinking </li></ul><ul><ul><li>Organizational learning and knowledge management </li></ul></ul><ul><ul><ul><li>Organizations are living and thinking open systems that learn from experience and engage in complex mental processes. </li></ul></ul></ul><ul><ul><li>Chaos theory </li></ul></ul><ul><ul><ul><li>Every complex system has a life of its own, with its own rule book. </li></ul></ul></ul><ul><ul><li>Complex adaptive systems </li></ul></ul><ul><ul><ul><li>Complex systems are self-organizing. </li></ul></ul></ul>
  30. 33. The Contingency Approach <ul><li>Contingency Approach </li></ul><ul><ul><li>A research effort to determine which managerial practices and techniques are appropriate in specific situations </li></ul></ul><ul><ul><ul><li>Different situations require different managerial responses. </li></ul></ul></ul><ul><ul><ul><li>It deals with intercultural feelings in which custom and habits cannot be taken for granted. </li></ul></ul></ul>
  31. 34. Figure 2.6: The Contingency View: A Compromise
  32. 35. The Contingency Approach (cont’d) <ul><li>Contingency Characteristics </li></ul><ul><ul><li>An open-system perspective </li></ul></ul><ul><ul><ul><li>How subsystems combine to interact with outside systems </li></ul></ul></ul><ul><ul><li>A practical research orientation </li></ul></ul><ul><ul><ul><li>Translating research findings into tools and situational refinements for more effective management </li></ul></ul></ul><ul><ul><li>A multivariate approach </li></ul></ul><ul><ul><ul><li>Many variables collectively account for variations in performance. </li></ul></ul></ul>
  33. 36. The Contingency Approach (cont’d) <ul><li>Lessons from the Contingency Approach </li></ul><ul><ul><li>Approach emphasizes situational appropriateness rather than rigid adherence to universal principles </li></ul></ul><ul><ul><li>Approach creates the impression that an organization is captive to its environment </li></ul></ul>
  34. 37. The Era of Management by Best Seller: Proceed with Caution <ul><li>Management in the Mainstream </li></ul><ul><ul><li>Gurus and Best Sellers </li></ul></ul><ul><ul><ul><li>Peter Drucker—author and first management guru </li></ul></ul></ul><ul><ul><ul><li>Peters and Waterman’s bestseller In Search of Excellence </li></ul></ul></ul><ul><ul><ul><li>Donald Trump’s hit show “The Apprentice” </li></ul></ul></ul><ul><ul><li>What’s Wrong with Management by Best Seller? </li></ul></ul><ul><ul><ul><li>Academics point to shoddy research and selective inclusion of anecdotal evidence. </li></ul></ul></ul><ul><ul><ul><li>It encourages simplistic thinking: Upper management assumes that there is a one-size-fits-all solution that’s a magic bullet quick-fix to solve the organization’s problems. </li></ul></ul></ul>
  35. 39. Summary <ul><li>Management is an interdisciplinary and international field that has evolved over the years. </li></ul><ul><li>The operational approach has evolved from scientific management to operations management. </li></ul><ul><li>Quality advocates teach the strategic importance of high-quality goods and services. </li></ul><ul><li>Management has turned to the human factor in the human relations movement and organizational behavior approach. </li></ul>
  36. 40. Summary (cont’d) <ul><li>Under the systems approach, modern organizations are viewed as open systems. </li></ul><ul><li>The contingency approach stresses situational appropriateness rather than universal principles. </li></ul><ul><li>A quick-fix is unlikely to solve an organization’s unique problems. </li></ul>
  37. 41. Terms to Understand <ul><li>Universal process approach </li></ul><ul><li>Operational approach </li></ul><ul><li>Scientific approach </li></ul><ul><li>Operations management </li></ul><ul><li>Human relations movement </li></ul><ul><li>Theory Y </li></ul><ul><li>Organizational behavior </li></ul><ul><li>System </li></ul><ul><li>General systems theory </li></ul><ul><li>Closed system </li></ul><ul><li>Open system </li></ul><ul><li>Contingency approach </li></ul><ul><li>Multivariate analysis </li></ul>

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