Chapter 2 Outline
• Scientific Management Theory
Job Specialization and the Division of Labor
F. W. Taylor and Scientific Management
The Gilbreths
• Administrative Management Theory
The Theory of Bureaucracy
Fayol’s Principles of Management
• Behavioral Management Theory
The Work of Mary Parker Follett
The Hawthorne Studies and Human Relations
© Copyright McGraw-Hill. All rights reserved.
2–1
Chapter Outline (cont’d)
• Behavioral Management Theory (cont’d)
Theory X and Theory Y
• Management Science Theory
• Organizational Environment Theory
The Open Systems View
Contingency Theory
© Copyright McGraw-Hill. All rights reserved.
2–2
The Evolution of Management Theory
Source:
© Copyright McGraw-Hill. All rights reserved.
Figure 2.1
2–3
Scientific Management Theory
• Evolution of Modern Management
Began in the industrial revolution in the late 19th
century as:
• Managers of organizations began seeking ways to
better satisfy customer needs.
• Large-scale mechanized manufacturing began to
supplanting small-scale craft production in the ways
in which goods were produced.
• Social problems developed in the large groups of
workers employed under the factory system.
• Managers began to focus on increasing the efficiency
of the worker-task mix.
© Copyright McGraw-Hill. All rights reserved.
2–4
F.W. Taylor and Scientific Management
• Scientific Management
The systematic study of the relationships between
people and tasks for the purpose of redesigning the
work process for higher efficiency.
• Defined by Frederick Taylor in the late 1800’s to
replace informal rule of thumb knowledge.
• Taylor sought to reduce the time a worker spent on
each task by optimizing the way the task was done.
• Taylor: increase specialization & division of labor to
make production process more efficient
© Copyright McGraw-Hill. All rights reserved.
2–5
F.W. Taylor and Scientific Management
• Scientific Management (Taylor) Principles
 Gather data about ways workers perform their
tasks; experiment with different ways to improve
performance
Codify methods into written rules and standards
Select people who have skills/abilities needed in the
task and train them on the particular task
Establish acceptable level of performance and
reward for performance above that level
Organizations chose to select some, rather than all, of
these principles.
© Copyright McGraw-Hill. All rights reserved.
2–6
Henry Ford: A matter of ethics
Reduced work day and
more pay
along with
Extreme control
© Copyright McGraw-Hill. All rights reserved.
2–7
Frank and Lillian Gilbreth
• Refined Taylor’s work and made many
improvements to the methodologies of time
and motion studies.
Time and motion studies
• Break up each job action into its component actions.
• Find better ways to perform the action.
• Reorganize each job action to be more efficient.
• Also studied worker-related fatigue problems
caused by lighting, heating, and the design of
tools and machines.
© Copyright McGraw-Hill. All rights reserved.
2–8
Scientific Management Principles:
the result …
Jobs were more repetitive, boring, monotonous
Workers increasingly dissatisfied
Workers tried to hide the potential efficiency of
the work environment
© Copyright McGraw-Hill. All rights reserved.
2–9
Administrative Management Theory
• Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.
• Max Weber
Developed the concept of bureaucracy as a formal
system of organization and administration designed
to ensure efficiency and effectiveness.
© Copyright McGraw-Hill. All rights reserved.
2–10
Weber’s
Principles of
Bureaucracy
Figure 2.2
© Copyright McGraw-Hill. All rights reserved.
2–11
Bureaucracy
• Strengths
Claimed to improve organizational performance
Easier for managers to organize and control
Fair and equitable raises and promotion
• Improves feeling of security
• Reduces stress
• Encourage ethical behavior
• Weaknesses
What if poorly managed?
Decisions and changes are slow
Inflexibility
© Copyright McGraw-Hill. All rights reserved.
2–12
Fayol’s Principles of Management
• Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization
leading to poor quality and worker dissatisfaction.
• Authority and Responsibility
Fayol included both formal and informal authority
resulting from special expertise.
• Unity of Command
Employees should have only one boss.
© Copyright McGraw-Hill. All rights reserved.
2–13
Fayol’s Principles of Management (cont’d)
• Line of Authority
A clear chain of command from top to bottom of
the firm.
• Centralization
The degree to which authority rests at the top of
the organization.
• Unity of Direction
Employee should receive orders and report to only
one supervisor.
© Copyright McGraw-Hill. All rights reserved.
2–14
Fayol’s Principles of Management (cont’d)
• Equity
The provision of justice and the fair and impartial
treatment of all employees.
• Order
The arrangement of employees where they will be
of the most value to the organization and to provide
career opportunities.
• Initiative
The fostering of creativity and innovation by
encouraging employees to act on their own.
© Copyright McGraw-Hill. All rights reserved.
2–15
Fayol’s Principles of Management (cont’d)
• 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.
• Stability of Tenure of Personnel
Long-term employment is important for the
development of skills that improve the
organization’s performance.
© Copyright McGraw-Hill. All rights reserved.
2–16
Fayol’s Principles of Management (cont’d)
• Subordination of Individual Interest to the
Common Interest
The interest of the organization takes precedence
over that of the individual employee.
• Esprit de corps
Comradeship, shared enthusiasm foster devotion to
the common cause (organization).
© Copyright McGraw-Hill. All rights reserved.
2–17
Why do companies perform better than their
rivals?
(62 companies)
• Emphasize management autonomy and
entrepreneurship
• Encourage risk taking and initiative
• Top managers closely involved in daily operations
• Unity of command and unity of direction
• Decisions are not made in an isolated tower
• Decentralized authority
• Organizational goals guide everyone’s actions
• Division of work and authority given with individual
interests towards the common interest
© Copyright McGraw-Hill. All rights reserved.
2–18
Behavioral Management Theory
• Behavioral Management
The study of how managers should behave to
motivate employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.
Focuses on the way a manager should personally
manage to motivate employees.
© Copyright McGraw-Hill. All rights reserved.
2–19
Behavioral Management
• Mary Parker Follett
(1868-1933)
An influential leader in early managerial theory
Concerned that Taylor was ignoring the human side
of the organization and the number of ways
employees can help managers
Held a horizontal view of power and authority
• “Authority should go with knowledge …”
• Managers should be facilitators rather than monitors
or supervisors
• Root of the work in self-managed teams,
empowerment, and cross-functioning
© Copyright McGraw-Hill. All rights reserved.
2–20
The Hawthorne Studies
• Studies of how characteristics of the work
setting affected worker fatigue and
performance at the Hawthorne Works of the
Western Electric Company from 1924-1932.
Worker productivity was measured at various levels
of light illumination.
Productivity increased regardless of whether the
light levels were raised or lowered.
• Why? … the presence of the researchers
• Implication … human relations movement
© Copyright McGraw-Hill. All rights reserved.
2–21
Human Relations Movement
• Sparked by the Hawthorne Studies
 Workers attitude towards their managers affect their work
performance
• Train supervisors to elicit cooperative behavior from
subordinates so productivity will increase
• Workers making telephone switching equipment
 The norm of output vs. “ratebusters” vs. “chiselers”
 Worker’s influence can be as great as the manager’s
• Managers must understand the informal organization
• The beginning of Organizational Behavior
© Copyright McGraw-Hill. All rights reserved.
2–22
Theory X versus Theory Y
(Douglas McGregor)
Source:
© Copyright McGraw-Hill. All rights reserved.
Figure 2.3
2–23
Management Science Theory
• An approach to management that uses
rigorous quantitative techniques to maximize
the use of organizational resources.
Quantitative management—utilizes linear
programming, modeling, simulation systems.
Operations management—techniques to analyze
all aspects of the production system.
Total Quality Management (TQM)—focuses on
improving quality throughout an organization.
Management Information Systems (MIS)—
manage information throughout the organization so
that it gets to the right people at the right time.
© Copyright McGraw-Hill. All rights reserved.
2–24
Organizational Environment Theory
• Organizational Environment
The set of forces and conditions that operate
beyond an organization’s boundaries but affect a
manager’s ability to acquire and utilize resources.
• What “forces” are presently in the
“environment” that affect the manager’s ability
to acquire and utilize resources?
© Copyright McGraw-Hill. All rights reserved.
2–25
The Open-Systems View
(Katz, Kahn, Thompson, 1960s)
• Organization takes resources from the external
environment and transforms them into goods and
services that are sent back out to environment
• Organization interacts with environment in order to
survive
• Not a closed system, which is:
 self contained
 likely to experience entropy
• The whole is greater than the sum of its parts
• Synergy: gains acquired when entities coordinate
their efforts
© Copyright McGraw-Hill. All rights reserved.
2–26
Contingency Theory
(Burns & Stalker, Britain, 1960s)
• No one best way to organize because the
external environment (ability to gain
resources) influences the organizational
structures and controls
• A quickly changing environment works against
this … why?
• Mechanic vs. Organic structure
© Copyright McGraw-Hill. All rights reserved.
2–27
Summary of Theories
• Scientific Management Theory
Job specialization and division of labor
Taylor (Scientific Management)
Gilbreths
• Administrative Management Theory
Theory of Bureaucracy
Fayol (14 principles of management)
© Copyright McGraw-Hill. All rights reserved.
2–28
Summary of Theories (continued)
• Behavioral Management Theory
Follett
Hawthorne Studies and Human Relations
McGregor (Theory X & Theory Y)
• Management Science Theory
Quantitative management
• Organizational Environment Theory
Open-systems View
Contingency Theory
© Copyright McGraw-Hill. All rights reserved.
2–29