History of Management Theories

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History of Management
Theories
MGT 3310
The Case of Egypt
First large state
 Centralized government

◦ Provincial governors (nomarchs)
◦ Bureaucrats (taxation, irrigation)
◦ Based on writing (first Information Revolution)

Large scale construction projects
◦ Pyramids, Sphinx, temples
◦ Workforce: thousands of peasants, possibly slaves (prisoners of
war)
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History of Management Thought
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Sun Tzu and The Art of War

Dates uncertain –
◦ Some say he lived ca. 544 BC to 496 BC
◦ Others place it closer to 600 BC
A renowned Chinese general
 The Art of War a work on military strategy, but seen in Asia as a guide to
management
 Principles:

◦
◦
◦
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Moral cause for battle
Leadership – wise, courageous, benevolent yet strict
Awareness of environmental conditions – events and the playing field
Organization and discipline
Espionage
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History of Management Thought
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The Industrial Revolution – New Technology

Manufacturing
◦ Steam engines
◦ Cotton gin
◦ Mass production through standardization and
specialization

Transportation
◦ Steam powered ships
◦ Railroads

Communications
◦ Telegraph
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History of Management Thought
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Large Organizations and New Approaches to
Management

Economic transformation
◦ Previously – family farms, small workshops
◦ After Industrial Revolution – large organizations, requiring
management skills

New demands on management
◦
◦
◦
◦
Need for professional managers (as opposed to owners)
Need to plan, structure, and schedule activities
Push to efficiency
Need for worker training and socialization to factory work
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History of Management Thought
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The Fortune 500: When Were They Founded?
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History of Management Thought
6
The Classical Approach

Lower-Level Management Analysis
◦ Frederick W.Taylor (1856–1915)
 Work at Bethlehem Steel Co.
◦ Frank Gilbreth (1868–1924) and Lillian Gilbreth (1878–1972)
Motion study
“The Right Way
“The Wrong Way”
◦ Henry L. Gantt (1861–1919)
 Scheduling Innovation
 Rewarding Innovation
F. W. Taylor and Scientific Management


Worked at Midvale Steel (beginning as a common
laborer, rising to chief engineer, in 6 years)
Identified “soldiering”
◦ Workers doing less than they were capable of
◦ Due to lack of training, fear of losing work or rate cuts


Began with time study and incentive plans
Pig iron study: the right shovel for each job.
Frank and Lillian Gilbreth: The One
Best Way

Focus on work simplification and
efficiency
◦ Reduce time and fatigue (Frank)
◦ Involve workers (Lillian)

“The One Best Way”
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History of Management Thought
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The Classical Approach

Comprehensive Analysis of Management (Administrative Management Theory)
◦ Henri Fayol (1841–1925)
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to the general interests
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps (common spirit)
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2-10
Henri Fayol



French manager (coal mining)
Published Industrial and General Administration in 1916 (not
translated into English until 1930’s)
Elements of management
◦ Planning
◦ Organizing
◦ Command, Coordination, Control



Fourteen principles
Universality of management
Management as a skill can be taught
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History of Management Thought
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Max Weber and Bureaucracy

Bureaucracy = management by the office

Bureaucracy
◦
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◦
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Clearly defined division of labor, authority, responsibility
Offices organized in a hierarchy
Recordkeeping (organizational memory and continuity separate from individuals)
Selection on the basis of qualifications
Officials appointed, not elected
Administrators work for fixed salaries, on a career basis
Administrators are not owners
Administrators subject to impersonal rules, discipline, control
Limitations
◦ Assumed workers were robots without social needs or higher
order needs
◦ Assumed all individuals were the same
◦ Ignored worker’s potential to contribute ideas, not just labor
◦ Does not adequately emphasize human variables

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Conflict
Communication
Leadership
Motivation
* These are Taylor’s ideas; Gilbreths thought differently
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The Behavioral Approach

The Hawthorne Studies
◦ The Relay Assembly Test Room Experiments
◦ The Bank Wiring Observation Room
Experiment

Recognizing the Human Variable
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2-14
The Behavioral Approach

The Human Relations Movement
Understand:
Physiological
Safety
Social
Esteem
Self-actualization
Topics:
Commitment
Turnover
Motivation
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The Management Science Approach
The Beginning of the Management Science
Approach
1.Observe
2.Construct
3.Deduce
4.Test
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2-16
The Management Science Approach

Management Science Today

Characteristics of Management Science Applications
1) Problems studied are complicated
2) Economic implications as guidelines
3) Mathematical models to investigate the decision
situation
4) Use of computers
Copyright ©2012 Pearson Education, Inc. Publishing as Prentince Hall
2-17
The Contingency Approach
Basically, contingency theory asserts that when managers make a
decision, they must take into account all aspects of the current
situation and act on those aspects that are key to the situation
at hand. Basically, it’s the approach that “it depends.”
1.
Perceiving organizational situations as they actually exist
2.
Choosing the management tactics best suited to those
situations
3.
Competently implementing those tactics.
Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall
2-18
Maslow’s hierarchy of needs

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Self-actualization – advancement, challenges,
opportunities to use skills
Esteem – job title, compliments
Belongingness – compatible work groups, friends,
parties
Safety and security – salary increases, pension plan,
medical plans, insurance
Physiological – salary, office, co. cafeteria
Motivation and Leadership
Early and mid 1960's: contingency models of
leadership proposed a need for different
styles under different circumstances (Fred
Fiedler)
 1964: Vroom's VIE theory (valence,
instrumentality, expectancy) of motivation
proposed
 Mid 1960's: David McClelland proposed need
for achievement theory
 Late 1960's: Frederick Herzberg proposed
his two-factor theory of motivation
(motivators and hygiene factors)
 Late 1960's: Edwin Locke outlined his goal
setting approach to motivation

The System Approach
A number of interdependent parts
functioning as a whole for some purpose.
Types of Systems
1. Closed
2. Open
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The System Approach

Tomas Hopkins’ six guidelines for conducting system
analysis:
1. The whole should be the main focus of analysis
2. Integration is the key variable in wholeness analysis
3. Modifications weighed in relation to effects on every other part
4. Each part has some role to perform
5. Part and its function determined by its position in the whole
6. All analysis starts with the existence of the whole
Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall
2-22
Dynamic System and Chaos Theory
Real-time interaction
 Determined but not predictable
 Sensitive to initial condition

Example: Group Decision
Group Preference
C
A
B
Test information Lag effect
160
140
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100
80
Info. Lag
No Info. Lag
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20
0
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Risk and Luck in Chaos System

Risk in management
◦ Recognize risk
◦ Estimate loss
◦ Eliminate risk

Luck plays an important role in business,
but it is hard to be identified and
analyzed.
Assignment for Week 01
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