《Contemporary Management》chpt 2 The Evolution of Management Theory

2 The Evolution of Management Theory OThe McGraw-Hill Companies. Inc, 2000

2-1 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 2 The Evolution of Management Theory

2-2 Scientific Management theory o Modern management began in the late 19th century Organizations were seeking ways to better satisfy customer needs Machinery was changing the way goods were produced Managers had to increase the efficiency of the worker-task mix " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-2 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Scientific Management theory ⚫Modern management began in the late 19th century. ◼Organizations were seeking ways to better satisfy customer needs. ◼Machinery was changing the way goods were produced. ◼Managers had to increase the efficiency of the worker-task mix

2-3 Job specialization aDam smith, 18th century economist, found firms manufactured pins in two ways Craft - each worker did all steps Factory -each worker specialized in one step eSmith found that the factory method had much higher productivity. Each worker became very skilled at one, specific task o Breaking down the total job allowed for the division of labor win/MeGraw-Hill CThe McGraw-Hill Companies, Inc, 2000

2-3 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Job specialization ⚫Adam Smith, 18th century economist, found firms manufactured pins in two ways: ◼ Craft -- each worker did all steps. ◼ Factory -- each worker specialized in one step. ⚫Smith found that the factory method had much higher productivity. ◼ Each worker became very skilled at one, specific task. ⚫Breaking down the total job allowed for the division of labor

2-4 Evolution of Management Theory Figure 2.1 Org. Environment Management Science Behavioral management Administrative management Scientific Management 1940 2000 " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-4 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Evolution of Management Theory 1940 2000 Administrative Management Behavioral Management Scientific Management Management Science Org. Environment

2-5 Scientific Management ● Defined by frederick Taylor,late1800’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 " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-5 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 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

2-6 The 4 Principles o Four principles to increase eficiency Study the way the job is performed now determine new ways to do it e Gather detailed. time and motion information o Try different methods to see which is best 2. Codify the new method into rules. ◆ Teach to all workers 3. Select workers whose skills match the rules set in Step 2 4. Establish a fair level of performance and pay for higher performance o Workers should benefit from higher output " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-6 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 The 4 Principles ⚫Four Principles to increase efficiency: 1. 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. 2. Codify the new method into rules. ◆ Teach to all workers. 3. Select workers whose skills match the rules set in Step 2. 4. Establish a fair level of performance and pay for higher performance. ◆ Workers should benefit from higher output

2-7 Problems of Scientific Management o Managers often implemented only the increased output side of Taylor's plan. They did not allow workers to share in increased output Specialized jobs became very boring, dull Workers ended up distrusting Scientific Management wOrkers could purposely“ under- perform” o Management responded with increased use of machines " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-7 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Problems of Scientific Management ⚫Managers often implemented only the increased output side of Taylor’s plan. ◼ They did not allow workers to share in increased output. ◼ Specialized jobs became very boring, dull. ◼ Workers ended up distrusting Scientific Management. ⚫Workers could purposely “under-perform” ⚫Management responded with increased use of machines

2-8 The Gilbreths o Frank and lillian gilbreth refined Taylors methods made many improvements to time and motion studies o Time and motion studies 1. Break down each action into components 2. Find better ways to perform it 3. Reorganize each action to be more efficient o gilbreths also studied fatigue problems, lighting heating and other worker issues win/MeGraw-Hill CThe McGraw-Hill Companies, Inc, 2000

2-8 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 The Gilbreths ⚫Frank and Lillian Gilbreth refined Taylor’s methods. ◼ Made many improvements to time and motion studies. ⚫Time and motion studies: ◼ 1. Break down each action into components. ◼ 2. Find better ways to perform it. ◼ 3. Reorganize each action to be more efficient. ⚫Gilbreths also studied fatigue problems, lighting, heating and other worker issues

2-9 Administrative Management sEeks to create an organization that leads to both efficiency and effectiveness o Max Weber developed the concept of bureaucracy. a formal system of organization and administration u to ensure effectiveness and efficiency Weber developed the Five principles shown in Figure 2.2 " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-9 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Administrative Management ⚫Seeks to create an organization that leads to both efficiency and effectiveness. ⚫Max Weber developed the concept of bureaucracy. ◼ A formal system of organization and administration to ensure effectiveness and efficiency. ◼ Weber developed the Five principles shown in Figure 2.2

2-10 Bureaucratic Principles Figure 2.2 Written rules System of task LA Bureaucracy Hierarchy of relationships should have authority Fair evaluation and reward " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

2-10 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Bureaucratic Principles A Bureaucracy should have Written rules System of task relationships Hierarchy of authority Fair evaluation and reward Figure 2.2