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2.12.13 Game Plan Turn in Entrepreneur FB Pages History of Management Notes Partner work on exploring modern
management
We will take notes together AND on our own…I’ll explain!
• Together = History of Management and Industrial Revolution Breakdown
• On Your Own = Nine theories of management explored:
• Scientific Management• Hawthorne Studies• Maslow’s Hierarchy of Needs• Theory X• Theory Y• Centralization• Decentralization• TQM• Theory Z
A little history on modern management…
Business Management
When did management start? Who’s the BOSS?
Management has always existed since one human being has tried to direct another
Different times=different challenges Due to the industrial revolution, these
challenges dramatically changed
What is the industrial revolution? Period (late 1800’s)
during which the U.S. developed an industrial economy
Caused by: advances in manufacturing, telegraph and cable lines, transportation advances
Example: farmers plowing their fields by hand to…horse drawn plows to…machine run plows
Why is this important to managers?
Many people left farms to work in factories where they were managed by professional managers
Entrepreneurs emerged in their companies to become managers
James Duke = TOBACCO
John Rockefeller = OIL
Andrew Carnegie = STEEL
J.P. Morgan = BANKING
Cornelius = STEAMSHIPS
Vanderbilt and RAILROADS
Captains of the Industry
What happened as a result of the captains of the industries?
Monopolies were created
Monopolies: one party maintains total control over a type of industry
Trusts were created Trust: giant
industrial monopoly E.g. Rockefeller
lowered prices for oil to force competitors out
The Break-up of the Trusts!
Worries about the concentration of wealth in the hands of few
Questions about driving competition out of business– bad for the economy
1887 Interstate Commerce Act: forced railroads to publish rates and forbade them to change rates with out notifying the public
1890: Sherman Act: illegal for companies to create monopolies and restored competition
Now…how do we manage?Fredrick W. Taylor
did time and motion studies to determine best way to perform a particular task
Match workers to jobs they are best suited for and let workers be independent
Is his work really useful?YES! Marriott Corporation found that
customer satisfaction with a hotel depends largely on how well a customer is treated during the first 10 minutes
So…they created a new system to make sure that these efforts are carried out Every day the company makes a list of arriving guests Place the names of the guests expected to arrive earliest at the
top of the list Cleaning staff cleans those rooms first (so they don’t have to
wait) Marriott also combined roles of doorperson, bellhop, and desk
clerk – combo = guest service agent
Hawthorne Studies
1920’s research on working conditions and productivity
Took place at Hawthorn Electric plant in Cicero, IL He lowered the lighting in the factory (i.e.,
it was pretty dark! Expected productivity to fall…did it? NO! Productivity increased
Harvard psychologist brought in and did 5 years worth of testing
What did they test?Effects of different
wage paymentsRest periodsWork hoursRegardless of the
variable tested… productivity increased
Conclusion of HawthornProductivity rose because workers
worked harder when they received attention
“Hawthorne Effect” is when change of any kind increases productivity
Other conclusions: factors other than physical productivity such as social conditions, group pressures, individual recognition effect productivity and employee moral
Maslow and the Hierarchy of Needs
People fulfill lower needs
before seeking higher needs Theory of Motivation
Applying Maslow’s Theory to Management
Provide salary (to buy food and housing) Provide heating/AC, lighting, noise level (physical needs)
Clearly communicate the benefits of working for a particular company e.g. security=insurance (security needs)
Work environment where employees interact (social needs)
Employee recognition, job titles, designated parking spaces, awards (ego/status needs)
Opportunities to be creative at work; include in decision making process (self-actualization)
Theory X and Y – Established in the 60’s by Douglas McGregor of MIT
X People are lazy and
avoid working Strict rules,
decisions made only by managers
Management knows all the answers
Y Workers find
satisfaction in their work
People will work productively if put in the right environment
Freedom and ability to make mistakes
Theory X and Y togetherMost companies
combine theories of motivation
Freedom in some aspects, control in others
E.g. flexible work schedule, but formal dress code
Centralization vs. Decentralization Central: concentration of power in a few key decision
makers Popular in early 20th century Henry Ford almost destroyed his company because he
would not delegate (out of fear)
De-central: decisions are made by managers at various levels within an organization 1920’s example of GM: Alfred Sloan, GM’s chair, broke
the company up into five divisions: Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac
Different cars for different people/different goals for each segment
Total Quality Management 1950’s push using
mathematical models to QUANTIFY management.
In comes W. Edwards Deming
Total quality management (TQM) – system of management based on involving all employees in a constant process of improving quality and productivity by improving how they work.
Adopted widely by American businesses.
Focus is on satisfying both customers and employees.
Deming’s Fourteen Points1. Create consistent purpose to
remain competitive2. Adopt a new philosophy – no
more mistakes or defects3. Stop depending on mass
production4. Consider quality as well as
price in awarding business5. Constantly improve the
system of production and service
6. Institute a vigorous program of job training
7. Adopt and implement leadership
8. Drive out fear so that everyone may work effectively
9. Break down barriers between departments to work as a team
10.Eliminate numerical goals, posters, and slogans asking for new levels of production without new methods
11.Eliminate work standards that prescribe numerical quotas
12.Remove barriers that stand between hourly workers and pride of workmanship
13.Encourage education and self-improvement for everyone
14.Create a structure in top management that will work every day to achieve these points!
Japanese Management More employee
participation in collective decision making
Concern for personal well-being of employees
Teams vs. individuals
Theory ZBusiness management
theory that integrates Japanese and American business practices
Long term employment Individual responsibilitySlow evaluation and
promotionHolistic concern
Applying Management Theories Activity1. Visit my website to locate your first subject-based
paper for my class. Outline: Pick 3 people. You must then interview and/or
research the management style that each employs. You must back up your “definition” of this person’s style with supporting details/facts. Here is the profile of who must be depicted: One must be a person that you have worked for or a
business leader in the community. (Note: If you have not yet had a job, do some research to look into a prominent local business leader!)
One must be a teacher here in the building. One must be a worldly figure. (Ghandi, Hillary
Clinton, etc.) Please do not use these examples!
2. Due Monday, Feb. 26th, 2013