Management

Chapter
Management
2 History

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Historical Background of
Management
• Ancient Management
➢ Egypt (pyramids) and China (Great Wall)
• Adam Smith
➢ Published The Wealth of Nations in 1776
❖ Advocated the division of labor (job specialization) to increase
the productivity of workers
• Industrial Revolution
➢ Substituted machine power for human labor
➢ Created large organizations in need of management

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Major Approaches to Management

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Major Approaches to
Management
• Classical
• Quantitative
• Behavioral
• Contemporary

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Scientific Management
• Fredrick Winslow Taylor
➢ The “father” of scientific management
➢ Published Principles of Scientific Management (1911)
❖ The theory of scientific management
– Using scientific methods to define the “one best way” for a
job to be done:
• Putting the right person on the job with the correct tools
and equipment.
• Having a standardized method of doing the job.
• Providing an economic incentive to the worker.

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 Taylor’s Scientific Management Principles

1. Develop a science for each element of an individual’s work, which will

replace the old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
4. Divide work and responsibility almost equally between management
and workers. Management takes over all work for which it is better
fitted than the workers.

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Scientific Management (cont’d)
• Frank and Lillian Gilbreth
➢ Focused on increasing worker productivity through
the reduction of wasted motion
➢ Developed the microchronometer to time worker
motions and optimize work performance
• How Do Today’s Managers Use Scientific
Management?
➢ Use time and motion studies to increase productivity
➢ Hire the best qualified employees
➢ Design incentive systems based on output

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General Administrative Theory
• Henri Fayol
➢ Believed that the practice of management was distinct
from other organizational functions
➢ Developed principles of management that applied to
all organizational situations
• Max Weber
➢ Developed a theory of authority based on an ideal
type of organization (bureaucracy)
❖ Emphasized rationality, predictability, impersonality, technical
competence, and authoritarianism

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 Fayol’s 14 Principles of Management

1. Division of work 7. Remuneration

2. Authority 8. Centralization

3. Discipline 9. Scalar chain

4. Unity of command 10. Order

5. Unity of direction 11. Equity

6. Subordination of 12. Stability of tenure

individual interests of personnel
to the general 13. Initiative
interest
14. Esprit de corps
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Weber’s Bureaucracy

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Quantitative Approach to
Management
• Quantitative Approach
➢ Also called operations research or management
science
➢ Evolved from mathematical and statistical methods
developed to solve WWII military logistics and quality
control problems
➢ Focuses on improving managerial decision making by
applying:
❖ Statistics, optimization models, information models, and
computer simulations

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 What Is Quality Management?
Intense focus on the customer
Concern for continual improvement
Process-focused
Improvement in the quality of everything
Accurate measurement
Empowerment of employees

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Understanding Organizational
Behavior
• Organizational Behavior (OB)
➢ The study of the actions of people at work; people are
the most important asset of an organization
• Early OB Advocates
➢ Robert Owen
➢ Hugo Munsterberg
➢ Mary Parker Follett
➢ Chester Barnard

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The Hawthorne Studies
•A series of productivity experiments conducted
at Western Electric from 1924 to 1932.

•Experimental findings
➢Productivity unexpectedly increased under imposed
adverse working conditions.
➢The effect of incentive plans was less than
expected.

•Research conclusion
➢Social norms, group standards and attitudes more
strongly influence individual output and work behavior
than do monetary incentives.
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The 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.

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The Organization as an Open System

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Implications of the Systems
Approach
• Coordination of the organization’s parts is
essential for proper functioning of the entire
organization.
• Decisions and actions taken in one area of the
organization will have an effect in other areas of
the organization.
• Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.
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The Contingency Approach
• Contingency Approach Defined
➢ Also sometimes called the situational approach.
➢ There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
➢ Organizations are individually different, face different
situations (contingency variables), and require
different ways of managing.

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 Popular Contingency Variables
• Organization size
• As size increases, so do the problems of coordination.
• Routineness of task technology
• Routine technologies require organizational structures,
leadership styles, and control systems that differ from
those required by customized or non-routine
technologies.
• Environmental uncertainty
• What works best in a stable and predictable environment
may be totally inappropriate in a rapidly changing and
unpredictable environment.
• Individual differences
• Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations.
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