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BA 351BA 351Managing Managing

OrganizationOrganizationss

Management Management and its and its

EvolutionEvolution

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Clicker ButtonsClicker Buttons

Send or “enter” button to submit

a selection

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on/off

Directional buttons: navigate menu options

Clear: erase an entry

Find Net / No Net: Need to change the session ID number

Denied: Need to change the user ID number

Change Session ID:>> Menu

>> Right directional button

>> Send

>> ”Yes” button

>> Enter ID & Send

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How many students are How many students are enrolled in this class?enrolled in this class?

A)A) 1 - 501 - 50

B)B) 51 - 10051 - 100

C)C) 101 - 125101 - 125

D)D) 126+126+

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Mike CieriMike Cieri

Office: 338 BexellOffice: 338 Bexell

Hours: Monday, & Wednesday 1:00 – Hours: Monday, & Wednesday 1:00 – 1:50 & by appointment1:50 & by appointment

E-mail:E-mail: mike.cieri@bus.oregonstate.edumike.cieri@bus.oregonstate.edu

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Communication TriangleCommunication Triangle

ReceiverFeedback

600 w

ord

s p

er m

inu

te

Sender150 words per minute

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Organizational StructureOrganizational Structure

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The performance of organizations depends to a large extent on how their resources are allocated and their ability to adapt to changing conditions.

Successful organizations know how to manage people and resources efficiently and effectively to accomplish organizational goals and to keep those goals in tune with changes in the external environment.

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Management in the New Management in the New MillenniumMillennium A firm can be A firm can be efficientefficient by making by making

the best use of people, money, the best use of people, money, physical plant, and technology.physical plant, and technology.

It is It is ineffectiveineffective if its goals do not if its goals do not provide a sustained competitive provide a sustained competitive advantage.advantage.

A firm with excellent goals would A firm with excellent goals would fail if it hired the wrong people, fail if it hired the wrong people, lost key contributors, relied on lost key contributors, relied on outdated technology, and made outdated technology, and made poor investment decisions.poor investment decisions.

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Strategic Managers

Tactical Managers

Operational Managers

Levels of Management

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Evolution Evolution of of

LeadershLeadershipip

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The Evolution of The Evolution of Managerial PracticesManagerial Practices

COORDINATIONCOORDINATION

COOPERATIONCOOPERATION

CONTROLCONTROL

COMMITMENTCOMMITMENT

COLLABORATIONCOLLABORATION

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The Evolution of The Evolution of Managerial ThoughtManagerial Thought

MILITARISTICMILITARISTIC400400

INDUSTRIAL INDUSTRIAL REVOLUTIONREVOLUTION18501850

SCIENTIFIC SCIENTIFIC MANAGEMENTMANAGEMENT19001900

BUREAUCRACYBUREAUCRACY19101910

TEAM-BASEDTEAM-BASED20002000

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MilitaristicMilitaristic700 AD700 AD

Executive OfficersExecutive OfficersThe Generals, “the The Generals, “the brass” brass”

Staff OfficersStaff OfficersStay behind the front Stay behind the front line, help line managersline, help line managers

Line / Field OfficersLine / Field OfficersGo to battle, “see Go to battle, “see action”action”

GruntsGruntsUninformed, “follow Uninformed, “follow orders”orders”

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MilitaristicMilitaristic700 AD700 AD

When to use the militaristic model:When to use the militaristic model:

Works well in a crisisWorks well in a crisis Clear lines of authorityClear lines of authority Creates order without freedomCreates order without freedom Needs an enemy or common goal Needs an enemy or common goal

to keep focusedto keep focused No discretion, do as toldNo discretion, do as told

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Machine production Machine production People are sophisticated People are sophisticated

machinesmachines Increased productivityIncreased productivity Worker specializationWorker specialization Use rules and Use rules and

punishment to controlpunishment to control Rise of labor movementRise of labor movement

Industrial RevolutionIndustrial Revolution18501850

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Scientific ManagementScientific Management19001900

Fredrick Winslow TaylorFredrick Winslow Taylor Use scientific techniques Use scientific techniques

and methods to improve and methods to improve productionproduction

Implement Time & Implement Time & Motion Motion

People are extensions of People are extensions of machinesmachines

““Idiot proof” tasks make Idiot proof” tasks make people expendablepeople expendable

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Form bureaus / departmentsForm bureaus / departments Define roles clearlyDefine roles clearly Maximize efficiencyMaximize efficiency Resist change, protect Resist change, protect

status quostatus quo Seek “more”Seek “more” Making each department Making each department

efficient worsens the whole efficient worsens the whole organization (sub-optimize)organization (sub-optimize)

Age of BureaucracyAge of Bureaucracy19101910

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Hawthorne Electric WorksHawthorne Electric Works Lighting & Productivity Lighting & Productivity

StudiesStudies Increased lighting to Increased lighting to

improve productivityimprove productivity Management:Management:

-- monitors experimental groupmonitors experimental group-- ignores regular employeesignores regular employees

Expectations impact performanceExpectations impact performance

Human Relations EraHuman Relations Era19201920

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Human Relations EraHuman Relations Era19201920

The “Hawthorne effect” was named after an attempt to improve morale and productivity at a manufacturing plant in Hawthorne, Illinois.

Industrial psychologists provided improved lighting, and it improved employee productivity. So did dimming the lighting. So did shortening the workday, and lengthening the workday.

Workers were actually responding to “positive attention and interaction,” not specific policies.

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Time

Low

High

Performance

Reward Behavior

Ignore / Punish Behavior

The “Hawthorne Effect”Attention + Expectations = Increased Performance

Human Relations EraHuman Relations Era19201920

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FormalFormal RankRank Need to knowNeed to know Reprimands Reprimands

youyou Motive is FearMotive is Fear

InformalInformal No rankNo rank Informs YouInforms You Protects youProtects you Motive is FriendshipMotive is Friendship

Group DynamicsGroup Dynamics19301930

Every company operates with two Every company operates with two distinctly different systems:distinctly different systems:

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Low

High

Low High

Group DynamicsGroup Dynamics19301930

Productivity

Cohesion

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Work SimplificationWork Simplification19401940

Pre-WWIIPre-WWII Women in workplaceWomen in workplace Work naturally as teamWork naturally as team Cross train in processesCross train in processes Teach quality statisticsTeach quality statistics Goal is “Zero Defects”Goal is “Zero Defects” Weekly communicationWeekly communication

““When 21 million men left When 21 million men left the workforce, productivity went the workforce, productivity went up!!!”up!!!”

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Work SimplificationWork Simplification19401940

High performing team-based High performing team-based systemssystems

Form teams, assign to work processForm teams, assign to work process Cross train everyone, up and down Cross train everyone, up and down

streamstream Set clear commonly shared goalsSet clear commonly shared goals Minimize rank, empower everyoneMinimize rank, empower everyone Statistical workflow techniquesStatistical workflow techniques Learning instead of blamingLearning instead of blaming Group norms, culture as powerful Group norms, culture as powerful

determiner of human behavior determiner of human behavior

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Work SimplificationWork Simplification19451945

After WWII, which model did we After WWII, which model did we adopt?adopt?

Militaristic?Militaristic?

oror

High Performing Work Teams?High Performing Work Teams?

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Deming goes to JapanDeming goes to Japan19501950

“Adapt the tools of total quality and you can win any market you want in the world.”

W. Edwards Deming,Quality Innovation Leader

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Matrix ManagementMatrix Management19601960

Demand for flexible Demand for flexible structuresstructures::

Blended “solid line” and Blended “solid line” and “dotted line”“dotted line”

Flexible & adaptiveFlexible & adaptive

Invites conflictInvites conflict

Creates trianglesCreates triangles

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Quality CirclesQuality Circles19701970

Voluntary groupsVoluntary groups

Pick problems with qualityPick problems with quality

Use tools to analyzeUse tools to analyze

Recommend changes to Recommend changes to managementmanagement

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Japanese ManagementJapanese Management(originally developed in the USA)(originally developed in the USA)

INPUTS OUTPUTS

Total Quality Total Quality ManagementManagement

19801980

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1Flow ChartIs a pictorial representation showing all the steps of the Process.

VariablVariablee

FrequencyFrequency

AA

BB

CC

DD

EE

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|||| | |||| | |||| | |||| |

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||

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VA

RIA

BL

E

TIME

2ChecksheetMechanism for identifying variables & counting their frequency of occurrence.

3Run ChartUsed to monitor a Process to see if the Trend is changing.

FR

EQ

UE

NC

Y

VARIABLE

4Pareto ChartBar graph that helps determine which problems to solve and in what order.

FR

EQ

UE

NC

Y

VARIABLE

5HistogramTakes measurement data and reveals the variation a Process has within it.

VA

RIA

BL

E 2

VARIABLE 1

6Scatter ChartUsed to study the possible relationship between one variable and another.

7Cause & Effect “Fishbone” shows relationship between “Effect” and possible influencing “Causes”.

VA

RIA

BL

E

TIME

UCL

X

LCL

8Control ChartA Run Chart with Statistical Upper and Lower Limits of the Process.

Tools of Quality Tools of Quality ImprovementImprovement

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High Performing Work High Performing Work SystemSystem

19901990Horizontal Horizontal

OrganizationOrganization Design business Design business

processprocess Quality as a processQuality as a process Educate everyone in Educate everyone in

basic statisticsbasic statistics Assign Process Assign Process

OwnersOwners Black Belts / Green Black Belts / Green

BeltsBelts

Dept. A

Function A

Dept. B Dept. C Dept. D

BOSS

Function B

Function C

Function D

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High Performing Work High Performing Work System System

19901990

TeamCommittee

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High Performing Work High Performing Work Teams Teams

19901990

Form teams Aligned to ProcessesForm teams Aligned to Processes::

Clear Mission / Vision / GoalsClear Mission / Vision / Goals Big Hairy Audacious Goals - BHAGBig Hairy Audacious Goals - BHAG Map the value stream / processesMap the value stream / processes Information at the sourceInformation at the source Sig Sigma / Lean ProcessesSig Sigma / Lean Processes

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Lean Organization Lean Organization 20002000

Dept. A

FunctionA

Dept. B Dept. C Dept. D

BOSS

Function B

Function C

Function D

Business Processes

CUSTOMER

Dept. A

FunctionA

Dept. B Dept. C Dept. D

BOSS

Function B

Function C

Function D

Business ProcessesBusiness Processes

CUSTOMER

CUSTOMER

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Create Business ResultsCreate Business Results

Scorecard of Performance IndicatorsScorecard of Performance Indicators• Profit / EBITA Profit / EBITA • Profit by customer segmentProfit by customer segment• Gross margin by product Gross margin by product • Retention of key staff with Retention of key staff with

replacements in placereplacements in place• Training hours per employeeTraining hours per employee• Warranty costs by product Warranty costs by product

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The Evolution of The Evolution of ManagementManagement

Building a Mission-Centered,Building a Mission-Centered,

High Performance High Performance

Teambased Enterprise Teambased Enterprise

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Physical Needs

Need for Security

Need for Social Relations

Need for Self Esteem

Self-Actualization

Maslow’s Hierarchy of Needs

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“Video

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Todd McFarlane

Answer these Qs:1.Considering the competitive environment, McFarlane specifically address some things that his competitors were doing that he wanted to do differently – what are these? 2.How does this relate to Deming’s idea of TQM?3.Consider what you know about Maslow’s theory. Based on this perspective, what needs were motivating McFarlane in his decision to start his own company?

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Yes or No

Do you think starting one’s business Do you think starting one’s business is the only way to achieve higher-is the only way to achieve higher-level needs? level needs?