Chapter 2
The Evolution of
Management Thought
The Evolution of Management
Theory
MGMT 321 – Chapter 2
Job Specialization and
the Division of Labor
Adam Smith – 2 different ways to
manufacture pins
– Craft-style: each worker did all steps
– Production: each worker specialized
in one step
 Job Specialization

– Different workers specialize in specific
tasks over time
MGMT 321 – Chapter 2
F.W. Taylor and Scientific
Management
Systematic study of the relationships
between people and tasks to redesign
the work process to increase efficiency
 Consists of 4 principles

–
–
–
–
Study tasks to identify improvements
Create written rules and SOPs
Select and train workers carefully
Establish fair performance standards and
reward accordingly
MGMT 321 – Chapter 2
Problems with Scientific
Management

Managers frequently implemented only the
increased output side of Taylor’s plan
– Workers did not share in the increased output

Specialized jobs became very boring, dull
– Workers ended up distrusting the Scientific
Management method

Workers could purposely “under-perform”
– Management responded with increased use of
machines and conveyors belts
MGMT 321 – Chapter 2
The Gilbreths
1.
2.
3.
Break up and analyze each action of a
task into its component actions
Find better ways to perform each
component action
Reorganize the component actions to
be more efficient, at less cost in time
and effort
MGMT 321 – Chapter 2
Administrative Management Theory

Study of how organizational structure
affects efficiency and effectiveness

Max Weber
– Developed the principles of bureaucracy as
a formal system designed to ensure
efficiency and effectiveness
MGMT 321 – Chapter 2
Weber’s Principles of Bureaucracy
MGMT 321 – Chapter 2
Fayol’s Principles of Management

Division of Labor
– Jobs can have too much specialization leading to
poor quality and worker dissatisfaction

Authority and Responsibility
– Both formal and informal authority

Unity of Command
– Employees should have only one boss

Line of Authority
– A clear chain of command from top to bottom
MGMT 321 – Chapter 2
Fayol’s Principles of Management

Centralization
– The degree to which authority rests at the top

Unity of Direction
– A single plan of action to guide the organization

Equity
– The justice and fairness in the treatment of all
employees

Order
– Arranging employees to be of the most value and
to provide career opportunities
MGMT 321 – Chapter 2
Fayol’s Principles of Management

Initiative
– Fostering creativity and innovation by encouraging
employees to act on their own

Discipline
– Obedient, applied, respectful employees are
necessary for the organization to function

Remuneration of Personnel
– An equitable uniform payment system that
motivates contributes to organizational success
MGMT 321 – Chapter 2
Fayol’s Principles of Management

Stability of Tenure of Personnel
– Long-term employment develops skills that
improve organizational performance

Subordination of Individual Interest
– The interest of the organization takes precedence

Esprit de corps
– Foster comradeship, shared enthusiasm, and
devotion to the common cause
MGMT 321 – Chapter 2
Behavioral Management Theory

The study of how managers should
behave to:
– Motivate employees
– Encourage them to perform at high levels
– Be committed to the achievement of
organizational goals

Mary Parker Follett
– Concerned that Taylor ignored the human side
of the organization
MGMT 321 – Chapter 2
The Hawthorne Studies

How work setting characteristics affect
fatigue and performance
– Regardless of whether the light levels were raised
or lowered, worker productivity increased
– Hawthorne effect – workers’ attitudes toward their
managers affect performance
– Implications – behavior of managers and workers
is as important in explaining the level of
performance as the technical aspects of the task
MGMT 321 – Chapter 2
Douglas McGregor’s Theory X and Y
MGMT 321 – Chapter 2
Management Science Theory

Utilizes quantitative techniques to help
managers maximize the use of
organizational resources
– Quantitative management
– Operations management
– Total Quality Management (TQM)
– Management Information Systems (MIS)
MGMT 321 – Chapter 2
Organizational Environment Theory

The set of forces and conditions that
operate beyond an organization’s
boundaries but affect a manager’s
ability to acquire and utilize resources
MGMT 321 – Chapter 2
The Open-Systems View
MGMT 321 – Chapter 2
Contingency Theory
MGMT 321 – Chapter 2