Chapter 2 – Management Yesterday and
Today
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Importance of studying management history
Early examples of management practice
Scientific management
General administrative theories
Quantitative approach to management
Organizational Behavior and the Hawthorne studies
The systems approach (closed versus open systems)
The contingency approach
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Egyptian Pyramids
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20 years
100,000 people
Great Wall of China
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Began 221 BC
Over 4,000 miles
300,000 people
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Adam Smith’s “ Wealth of Nations”:
Division of Labor
10 people doing all tasks
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10 pins per day
10 people doing specialized tasks
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48,000 pins per day
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Industrial Revolution – 1700’s
1) Machine power
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Steam, coal, fossil fuels, electricity
2) Mass production
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Moving assembly line – Ford
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3) Efficient transportation
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Railroad, steamship
Result: Big Corporations Needed
Management!
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Development of Major
Management Theories
Exhibit 2.1
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Shovel Load
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92 lbs
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38 lbs
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34 lbs
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21 lbs
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16 lbs
Tonnage
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12,500
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25,000
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30,000
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48,000
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25,000
Wage increase: $1.15 to $1.85 per day
Q: What’s the “one best way”?
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Fredrick Winslow Taylor – the “father”
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Using scientific methods to define the “one best way” for a job to be done:
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Put the right person on the job with the correct tools and equipment.
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Standardize the method of doing the job.
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Providing an economic incentive to the worker.
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Frederick Taylor’s
Principles of Scientific Management
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3.
1.
4.
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Develop a science for each element of work
Select, train, and develop workers
Cooperate with workers to make sure work done as planned
Divide work and responsibility equally between management and workers
Management takes over all work for which better suited
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Frank and Lillian Gilbreth’s
Hand and Body Studies
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Used motion pictures to study hand and body motions
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17 “Therbligs”
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Reduced number of motions from 18 to 2 (interior)
Movie and Book - “Cheaper by the Dozen”
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Is Scientific Management Alive
Today?
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YES
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Time and motion studies are still used
Still hire the best qualified employees
Still design incentive systems based on output
BUT
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Rotate workers through various jobs
Make sure jobs are ergonomically correct
Teach front-line employees to use their BRAINS!
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Scientific Management at Organizational
Level - General Administrative Theorists
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Q: What “rules” make organizations work like well-organized machines, just like workers?
Henri Fayol
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Developed fourteen principles of management that applied to all organizational situations
Max Weber
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Ideal organization = bureaucracy
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Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism
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Fayol’s 14 Principles of
Management
1. Division of work.
2. Authority.
3. Discipline.
4. Unity of command.
5. Unity of direction.
6. Subordination of individual interest to the interests of the organization.
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Remuneration.
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Centralization.
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Scalar chain.
10. Order.
11. Equity.
12. Stability of tenure of personnel.
13. Initiative.
14. Esprit de corps.
Exhibit 2.3
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Weber’s Ideal Bureaucracy
Q: Are bureaucracies alive today?
Exhibit 2.4
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“Modern Times”
Discussion Questions
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What evidence did you see of Scientific
Management?
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What evidence did you see of a bureaucracy?
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What are the benefits of SM/bureaucracy?
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What are the drawbacks of SM/bureaucracy?
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Also called operations research or management science
Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems
Focuses on improving managerial decision making by applying:
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Statistics, optimization models, information models, and computer simulations
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The study of the actions of people at work; people are the most important asset of an organization
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Control Group
Experimental Group
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Early Advocates of OB
Exhibit 2.5
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System Defined
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A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
Basic Types of Systems
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Closed systems
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Are not influenced by and do not interact with their environment (all system input and output is internal).
Open systems
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Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.
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The Organization as an Open
System
Exhibit 2.6
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Coordination of the organization’s parts is essential for proper functioning of the entire organization.
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Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.
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Organizations are not self-contained and, therefore, must adapt to changes in their external environment.
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Contingency Approach Defined
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Also sometimes called the situational approach.
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There is no one universally applicable set of management principles (rules) by which to manage organizations.
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Organizations are individually different, face different situations (contingency variables), and require different ways of managing.
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Popular Contingency Variables
• Organization size
• Routineness of task technology
• Environmental uncertainty
• Individual differences
Exhibit 2.7
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