11. Evolution of Mgmt Theory

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The Evolution of

Management Theories

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Management Theories

Industrial Revolution (1700’s – 1800’s)- Moved from Agrarian to Manufacturing Society

- Adam Smith – The Wealth of Nations

- Division of labor (pin factory example)

Scientific Management (1890’s – 1930’s)- Frederick Taylor

- Time & Motion Studies- “Fair day’s pay for a fair day’s work” 

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Management Theories

Bureaucracy – Max Weber (1930’s – 1950’s)

- All activities follow the organizational hierarchy

- Strong lines of authority & control

- Formal selection, rules & regulations

- Only qualified persons are employed (no nepotism)

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Management Theories

Humanistic Management (1930’s – 1970’s)

Hawthorne Studies

- Elton Mayo – Father of Human Relations

- Western Electric Plant in Hawthorne, IL

- “”Hawthorne Effect”; “Spotlight Effect” 

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Management Theories

POSDCORB (1937)- Luther Gulick 

Management by Objectives (1954)- Peter Drucker

- Goals are set for employee to achieve- People end up working for themselves

Theory X & Theory Y (1960)- Douglas McGregor

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Theory X & Theory Y 

Theory X 

People do not really want to work.

They are self-interested and prefer leisure over work.

If managers relax, sloppiness sets in.

Theory Y  Workers find work enjoyable & satisfying “Work is Play” 

Workers will exercise self-direction and self-control.

Workers can solve problems creatively.

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Theory X

People do not really want to work.

They are self-interested and prefer leisure over work.

Managers have to structure work and give workerswell specified tasks.

If managers relax, sloppiness sets in. Most people prefer to be directed. They do not really

want to carry the burden of responsibility.

Workers have little ambition and prefer security

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Theory Y 

Workers find work enjoyable & satisfying “Work is Play” 

Workers will exercise self-direction and self-control.

Workers will seek the intrinsic rewards associated withtheir achievement, not just extrinsic rewards.

Workers can solve problems creatively.

The intellectual potential of workers is only partially

utilized. People are capable of handling more complexproblems.

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Management Theories

Total Quality Management A system of continuous improvement employing

participative management and centered on the

needs of customers.

W. Edwards Deming (1950’s Japan)

14 Steps to TQM- Cease dependence on mass inspection

- Eliminate quotas and numerical targets

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Management Theories

Theory Z- William Ouchi (1981); Abraham Maslow (1968)

Japanese Management- Cooperation and trust built on mutual respect

* Maslow’s Hierarchy of Needs Long-term employment Collective decision making & shared responsibility Careful evaluation and slow promotion Involvement in the organization

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Theory Z

Maslow (1968) & William Ouchi (1980’s) Employees driven by commitment to belong

to something worthwhile

Employees crave opportunities to advanceand learn

Manager believes that employees shouldwork up through the ranks to build loyaltyand have lifelong employment

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Theory “X” vs. “Y” vs. “Z” 

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Management Theories

 “The One Minute Manager” (1981)- Kenneth Blanchard

- One minute objectives; praising & reprimanding

The ABCs- Activators – Manager’s pre-goal actions

- Behavior – Effect on employee actions- Consequences – Manager’s post-goal actions

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Management Theories

Systems Approach – Peter Senge (1990)System – A set of interdependent parts that work

together to achieve a common goal

Inputs Processes Outputs (Feedback)

Look at the organization from a broader perspective

Interrelationship of all of the parts (hotel front desk)

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Management Theories

Empowerment- Authorizing employees to do their work without the need toseek approval from supervisors

- Sense of responsibility & achievement for employees

- Reduces work-load on manager; Reduces delays in flow of work

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Japanese Management

Kaizen Continuous improvement

Jidoka

Defect detection system

Just-in-time inventory

Having just enough inventory on hand tocomplete the process

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Other Theories

Peter Principle Promotion to a level of ignorance

Dilbert Principle

Promote worst employees to management

Natural Capitalism

Rewards energy and material efficiency