Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short
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Chapter 2 History, Globalization, and Ethics
Learning Objectives

Learn about the history of management

Know the context for contemporary principles of management

Understand key global trends

See how globalization is affecting management principles and practices

Appreciate the importance of value-based leadership (ethics) in management
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Management History Timeline
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The Art of War
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Machiavelli’s
The Prince
1500s
1776
Adam Smith
Weather of Nations
Division of Labor
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Early Management Principles
Henri Fayol
Frederick
Taylor
Administrative Management
Frank and
Lillian Gilbreth
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Management Principles developed by Henri Fayol
1. Division of Work: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.
2. Authority: The concepts of Authority and responsibility are closely related.
Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.
3. Discipline: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.
4. Unity of Command: Workers should receive orders from only one manager.
5. Unity of Direction: The entire organization should be moving towards a common objective in a common direction.
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6. Subordination Of Individual Interests To The General Interests: The interests of one person should not take priority over the interests of the organization as a whole.
7. Remuneration: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.
8. Centralization: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.
9. Scalar Chain: Managers in hierarchies are part of a chain like authority scale.
Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.
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10. Order: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.
11. Equity: All employees should be treated as equally as possible.
12. Stability of Tenure Of Personnel: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.
13. Initiative: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.
14. Espirit De Corps (Team Spirits, Morale): Management should encourage harmony and general good feelings among employees.
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Source: Fayol, H. (1914). Administration industrielle et generale.
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• Scientific management, also called
Taylorism, was a theory of management that analyzed and synthesized workflows.
Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management.
(Taylorism on ABC World Report Video ) http://en.wikipedia.org/wiki/Scientific_management http://www.mindtools.com/pages/article/newTMM_Taylor.htm
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Frederick Winslow Taylor introduces “scientific management,” which holds that jobs should be defined in detail to remove individual discretion.
He argues: “Now one of the first requirements for a man who is fit to handle pig iron is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental makeup the ox than any other type.”
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• Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
• Scientifically select, train, and develop each worker rather than passively leaving them to train themselves.
• Cooperate with the workers to ensure that the scientifically developed methods are being followed.
• Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
http://www.netmba.com/mgmt/scientific/
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Manual
Labor Force
Dehumanized
Workers
Shift to
Knowledge
Workers
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• Authority hierarchy: A clear chain of command
• Division of labor: Delineated lines of authority in a fixed area of activity
• Formal rules and regulations: Action taken on the basis of and recorded in written rules
• Career Orientation: Bureaucratic officials need expert training. They are not owners.
• Impersonality: Rules are implemented by neutral officials
• Formal selection and promotion: Career advancement depends on technical qualifications judged by organization, not individuals.
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• “System-centered” companies try to execute the corporate strategy with maximum efficiency.
• “People-centered” companies—always a minority—relax the rules in hopes that good things will come from self-motivated workers.
Workers in Western Electric’s Hawthorne
Works plant in Cicero, Ill., perform better when lighting and other working conditions are tinkered with —regardless of what the change is. Researchers realize that the workers are simply responding positively to attention from managers. This becomes known as the
“.”
Hawthorne Studies ( video ) http://images.businessweek.com/ss/07/08/0809_timeline/source/1.htm
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MANAGEMENT IDEAS OF THE 1990s
Peter Drucker

Father of Modern
Management
Tom Peters and Robert Waterman

In Search of Excellence
Warren Bennis

Leadership
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Managing
Ambiguity and
Paradox
A Bias for Action
Close to the
Customer
Autonomy and
Entrepreneurship
Productivity through People
Hands-On,
Value-Driven
Stick to the
Knitting
Simple Form,
Lean Staff
Simultaneous
Loose-Tight
Properties
Performance of the companies at http://www.forbes.com/2002/10/04/1004excellent.html
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1. Managing Ambiguity and Paradox: The ability of managers to hold two opposing ideas in mind at the same time and still be able to function effectively.
2. A Bias for Action: A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.
3. Close to the Customer: Staying close to the customer to understand and anticipate customer needs and wants.
4. Autonomy and Entrepreneurship: Actions that foster innovation and nurture customer and product champions.
5. Productivity through People: Treating rank-and-file employees as a source of quality.
6. Hands-On, Value-Driven: A management philosophy that guides everyday practice and shows management’s commitment.
7. Stick to the Knitting: Stay with what you do well and the businesses you know best. (Core competence)
8. Simple Form, Lean Staff: The best companies have very minimal, lean headquarters staff.
9. Simultaneous Loose-Tight Properties: Autonomy in shop-floor activities plus
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Peter ’ s Management Recommendations
Empower people by involving everyone in decisionmaking
Eliminate bureaucratic rules and humiliating conditions
Celebrate and recognize employees for their contributions
Develop an inspiring vision
Lead by example
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Doing things right.
Doing the right things.
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• Focus on the customer
• Process focused
• Improvement in the quality of everything the organization does
• Accurate measure
• Continuous improvement
• Empowerment of employees and employee involvement
Gurus: Edwards Deming, Joseph Juran, etc.
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Baldrige Criteria for Performance Excellence
Framework: A Systems Perspective http://www.nist.gov/baldrige/publications/upload/2011_2012_Business_Nonprofit_Criteria.pdf
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Source: Robbins and Coulter, Management, 12 th edition, Pearson.
Additional Source: Kiechel III, Walter, "The Management Century,"
Harvard Business Review. Nov. 2012, Vol. 90 Issue 11, p62-75.
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What goals seem to dominate early management principles? Why do you think this is the case?
•
Do you see any commonalities between Fayol ’ s principles of management from 1911 and those of Tom
Peters in the 1990s? What do you think accounts for this?
•
Are there any jobs today for which time and motion studies would make sense to do? Would any other skills need to be taught as well?
•
How would you put some of the ideas of the 1990s into practice?
•
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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CORPORATIONS AS SOCIAL MOVEMENTS
We are connected
“virtually”
Dynamic and shifting authority structures
Fluid boundaries
Reduction of formal procedures
The blurring between social movement and corporation is evidenced in the incorporation of
Occupy Portland, an offshoot of the Occupy Wall
Street movement in Portland, Oregon
.
http://en.wikipedia.org/wiki/File:Occupy_Portland,_first_d ay.jpg
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Assists in identifying experts
Efficient sharing of information
SOCIAL
NETWORKING
Showcases skills, talents, and knowledge
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LEARNING ORGANIZATIONS
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The Value of Wikis

Wikis pool the talent of experts as well as everyone from across the company and beyond it – in all time zones and geographic locations.

Input from unanticipated people brings fresh ideas and unexpected connections.

Wikis let people contribute to a project any time, giving them flexibility in managing their time.
 It ’ s easy to see the evolution of an idea, and new people can get up to speed quickly by seeing the history of the project.

Co-creation of solutions eliminates the need to “ sell ” those solutions to get buy-in.
 Wikis cut the need for email by 75 percent and the need for meetings by 50 percent.
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Discussion
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What commonalities do you see between organizations and social movements?
•
How could you use a social network to help with a specific task such as helping new employees to adjust to the organization?
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Do intraorganizational social networks inspire employees or do they create more problems than they are worth? Please explain your position.
•
How can social networks help managers plan, organize, lead, and control?
•
What are the potential advantages and potential disadvantages of a virtual organization?
•
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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How do you manage innovation if ideas can come from anywhere, including people who aren ’ t your direct employees – or aren’t even part of the company?
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If, according to some trends, you can work anytime and anywhere, how do you decide when to work? When do you stop working?
•
What advantages do you see from an increasingly global workforce?
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Work environments are more diverse than ever before
Cultural and language differences require diverse management approaches
© Thinkstock
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Performance
Orientation
Uncertainty
Avoidance
Assertiveness
Power
Distance
Gender
Egalitarianism
Institutional
Collectivism
Humane
Orientation
Future
Orientation
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Global
Ventures Gone
Awry
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Discussion
•
You ’ ve just been made a manager in Sweden, known for its collective institutionalism. What incentives and reward structures would you use to motivate your employees?
•
How might you prepare workers for an overseas assignment to help them adjust to their new location and culture effectively?
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Your company has twelve branches in the US and will be opening its first branch in Brazil. Your company prides itself on its self-managed teams. Will you keep this policy in the new country? Why or why not?
•
You ’ re a manager in Japan and you’ve just discovered that a team leader under your supervision has made a mistake that will result in a quality problem. How will you handle this mistake?
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You work in Hong Kong for a Swiss-owned firm. The Swiss are known for their high uncertainty avoidance. What differences might you expect to see from your Swiss bosses compared to your Hong Kong employees?
•
What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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Pressure to meet unrealistic business objectives/deadlines
A desire to further one’s career
A desire to protect one’s livelihood
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Integrating Ethics Into
Managerial Decision Making
Assess the situation
Monitor outcomes
Consider the stakeholder’s point of view
Consider all possible alternatives
Make a decision
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Pay attention to how it makes you feel
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Discussion
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What are the consequences of unethical behavior?
• If you were writing a code of ethics for your company, what would you include?
• In times of economic downturn, is ethical behavior a luxury or a mandate?
• Imagine you just found out that one of your employees has lied on an expense report. He is a great employee and one of your best salespeople. How would you handle this ethical violation?
• Nobel laureate economist Milton Friedman said that companies should focus on maximizing profits, not social responsibilities or purposes. Do you agree with this view? Why or why not?
• What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
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