The Evolution of Management Theory
1.
A.
1.
2.
3.
4.
1. Classical Management Approach
a. Scientific Management
b. General Administrative Management
2. Behavioral Management Approach
a. The Hawthorne Studies
b. Human Relations Management
3. Quantitative Management Approach
a. Management science, operations
b. Management research,
Classical Approach
Scientific Management
Defined by Frederick Taylor, late 1800’s.
The systematic study of the relationships between people and tasks to redesign the work for higher efficiency.
Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.
Four Principles To Increase Efficiency:
Study the way the job is performed now & determine new ways to do it.
Gather detailed, time and motion information.
Try different methods to see which is best.
Codify the new method into rules.
Teach to all workers.
Select workers whose skills match the rules set in Step 2.
Establish a fair level of performance and pay for higher performance.
Workers should benefit from higher output.
Problems Of Scientific Management
1. Managers often implemented only the increased output side of Taylor’s plan.
a) They did not allow workers to share in increased output.
b) Specialized jobs became very boring, dull.
c) Workers ended up distrusting Scientific Management.
2. Workers could purposely “under-perform”
3. Management responded with increased use of machines.
The Gilbreth
1. Frank and Lillian Gilbreth refined Taylor’s methods.
a. Made many improvements to time and motion studies.
2. Time and motion studies:
a. 1. Break down each action into components.
b. 2. Find better ways to perform it.
c. 3. Reorganize each action to be more efficient.
3. Gilbreths also studied fatigue problems, lighting, heating and other worker issues.
B. Administrative Management
A theory that focuses on managing the total organization. Seeks to create an organization that leads to both
efficiency and effectiveness.
Max Weber developed the concept of Bureaucracy.
a. A formal system of organization and administration to ensure effectiveness and efficiency.
b. Weber developed the Five principles shown in Figure
Written Rules
Hierarchy of
System of Task
relationships
A bureaucracy
should have
Authority
Fair Evaluation
Key points of Bureaucracy
1.
2.
3.
4.
5.
and reward
Authority is the power to hold people accountable for their actions.
Positions in the firm should be held based on performance not social contacts.
Position duties are clearly identified. People should know what is expected of them.
Lines of authority should be clearly identified. Workers know who reports to who.
Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates.
Fayol’s Principles
1. Division of Labor: allows for job specialization.
Fayol noted firms can have too much specialization leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one boss.
4. Line of Authority: a clear chain from top to bottom of the firm.
5. Centralization: the degree to which authority rests at the very top. Unity of Direction: One plan of action to guide the
organization.
7. Equity: Treat all employees fairly in justice and respect.
8. Order: Each employee is put where they have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees needed.
. Remuneration of Personnel: The payment system contributes to success.
12. Stability of Tenure: Long-term employment is important.
13. General interest over individual interest: The organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.
Behavioral Management
Hawthorne Studies(1924~1930s)
A series of study started in 1924 at Western Electric Company Conducted by Elton Mayo and associates at Western
Electric (1927–1935)
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Workers’ feelings and attitudes affected their work
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Financial incentives weren’t the most important motivator for workers
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Group norms and behavior play a critical role in behavior at work
Human Relations Movement:
This movement was an attempt to equip managers with the social skills
Abraham Maslow (1908-1970) theory of motivation
Abraham Maslow (1908-1970): Theory of motivation/ Need of Hierarchy
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Biological and Physiological needs - air, food, drink, shelter, sleep, etc.
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Safety needs - protection from elements, security, order, Medical insurance , Job security, Financial reserves,
law, stability, etc.
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Social and Love needs - work group, family, affection, relationships,
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Esteem needs – Recognition, Attention, Social Status, Self-respect , achievement, independence etc.
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Self-Actualization needs - realizing personal potential, self-fulfillment, Truth , Justice , Wisdom, Meaning
Douglas McGregor (1906-1964) developed the Theory X and Theory Y. proposed. the two different sets of worker
assumptions.
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Theory X: Assumes the average worker is lazy, dislikes work and will do as little as possible.
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(Managers must closely supervise and control through reward and punishment.)
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Theory Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker
likes the work.
(Managers should allow the worker to take initiative, and create an organization to stimulate the Worker).
Quantitative Management Approach
The use of quantitative techniques to improve decision making. It includes applications of statistics, optimization
models, information models, and computer simulations Emerged during World War II to help the Allied forces
manage logistical problems.
Branches:
1. Management Science,
Focus specially on the development of mathematical models. Utilizes linear programming, modeling,
simulation systems.
2. Operations Management,
Practical application of management science to efficiently manage the production and distribution of
products and services. Help organization more efficiently produce its product. Manage production facilities &
inventory.
Modern Perspective
Systems Approach
System Defined: A set of interrelated and interdependent parts arranged in a manner that produces a unified whole
Basic Types of Systems
Closed systems
Are not influenced by and do not interact with their environment (all system input and
output is internal)
Open systems
Dynamically interact to their environments by taking in inputs and transforming them
into outputs that are distributed into their Environments
Components of a Open System
1) Inputs:
3) Outputs:
2) Transformation processes:
4) Feedback:
The Contingency Approach (situational approach):
The appropriate managerial behavior depends (is contingent) on the current problems or situations that managers
are facing at a particular time and place
1. Assumes there is no one best way to manage.
a. The environment impacts the organization and managers must be flexible to react to environmental
changes.
b. The way the organization is designed, control systems selected, depend on the environment.
2. Technological environments change rapidly, so must managers.
Limitation of Contingency Theory
a) There is no one universally applicable set of management principles (rules) by which to manage organizations.
b) Organizations are individually different, face different situations (contingency variables), and require different
ways of managing.
Contingency Variable:
a.
b.
c.
d.
Organization Size
Routineness of task Technology
Environmental Uncertainty
Individual Differences