History of Management TheoriesMGT 3310

History of Management Thought 2

The Case of EgyptFirst large stateCentralized government

◦ Provincial governors (nomarchs)◦ Bureaucrats (taxation, irrigation)◦ Based on writing (first Information Revolution)

Large scale construction projects◦ Pyramids, Sphinx, temples◦ Workforce: thousands of peasants, possibly slaves

(prisoners of war)

Spring 2007

History of Management Thought 3

Sun Tzu and The Art of War Dates uncertain –

◦ Some say he lived ca. 544 BC to 496 BC◦ Others place it closer to 600 BC

A renowned Chinese general The Art of War a work on military strategy, but seen in Asia

as a guide to management Principles:

◦ Moral cause for battle◦ Leadership – wise, courageous, benevolent yet strict◦ Awareness of environmental conditions – events and the playing

field◦ Organization and discipline◦ Espionage

Spring 2007

History of Management Thought 4

The Industrial Revolution – New TechnologyManufacturing

◦Steam engines◦Cotton gin◦Mass production through

standardization and specializationTransportation

◦Steam powered ships◦Railroads

Communications◦Telegraph

Spring 2007

History of Management Thought 5

Large Organizations and New Approaches to ManagementEconomic transformation

◦ Previously – family farms, small workshops◦ After Industrial Revolution – large organizations,

requiring management skillsNew demands on management

◦ Need for professional managers (as opposed to owners)

◦ Need to plan, structure, and schedule activities◦ Push to efficiency◦ Need for worker training and socialization to factory

work

Spring 2007

History of Management Thought 6

The Fortune 500: When Were They Founded?

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1780

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1800

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1820

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1840

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1860

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1880

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1900

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1920

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1940

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1960

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1980

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Spring 2007

The Classical Approach Lower-Level Management Analysis

◦ Frederick W.Taylor (1856–1915) Work at Bethlehem Steel Co.

◦ Frank Gilbreth (1868–1924) and Lillian Gilbreth (1878–1972)Motion study

“The Right Way“The Wrong Way”

◦ Henry L. Gantt (1861–1919) Scheduling Innovation Rewarding Innovation

F. W. Taylor and Scientific ManagementWorked at Midvale Steel (beginning as a

common laborer, rising to chief engineer, in 6 years)

Identified “soldiering”◦ Workers doing less than they were capable of◦ Due to lack of training, fear of losing work or rate

cutsBegan with time study and incentive plansPig iron study: the right shovel for each job.

History of Management Thought 9

Frank and Lillian Gilbreth: The One Best WayFocus on work simplification and

efficiency◦Reduce time and fatigue (Frank)◦Involve workers (Lillian)

“The One Best Way”

Spring 2007

The Classical Approach Comprehensive Analysis of Management (Administrative Management

Theory)

◦ Henri Fayol (1841–1925) 1. Division of work 2. Authority 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interests to the general interests 7. Remuneration 8. Centralization 9. Scalar chain10. Order11. Equity12. Stability of tenure of personnel13. Initiative14. Esprit de corps (common spirit)

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History of Management Thought 11

Henri Fayol French manager (coal mining) Published Industrial and General Administration in

1916 (not translated into English until 1930’s) Elements of management

◦ Planning◦ Organizing◦ Command, Coordination, Control

Fourteen principles Universality of management Management as a skill can be taught

Spring 2007

Max Weber and BureaucracyBureaucracy = management by

the office Bureaucracy

◦ Clearly defined division of labor, authority, responsibility◦ Offices organized in a hierarchy◦ Recordkeeping (organizational memory and continuity separate

from individuals)◦ Selection on the basis of qualifications◦ Officials appointed, not elected◦ Administrators work for fixed salaries, on a career basis◦ Administrators are not owners◦ Administrators subject to impersonal rules, discipline, control

History of Management Thought 13

Limitations◦ Assumed workers were robots without social needs

or higher order needs◦ Assumed all individuals were the same◦ Ignored worker’s potential to contribute ideas, not

just labor◦ Does not adequately emphasize human variables

Conflict Communication Leadership Motivation

Spring 2007

* These are Taylor’s ideas; Gilbreths thought differently

The Behavioral ApproachThe Hawthorne Studies

◦The Relay Assembly Test Room Experiments

◦The Bank Wiring Observation Room Experiment

Recognizing the Human Variable

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The Behavioral Approach The Human Relations Movement

Understand:PhysiologicalSafetySocialEsteemSelf-actualization

Topics:

Commitment

Turnover

Motivation

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The Management Science Approach

The Beginning of the Management Science Approach

1. Observe

2. Construct

3. Deduce

4. Test

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The Management Science Approach

Management Science Today

Characteristics of Management Science Applications

1) Problems studied are complicated

2) Economic implications as guidelines

3) Mathematical models to investigate the decision situation

4) Use of computers

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The Contingency ApproachBasically, contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it’s the approach that “it depends.”

1. Perceiving organizational situations as they actually exist

2. Choosing the management tactics best suited to those situations

3. Competently implementing those tactics.Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall

2-18

Maslow’s hierarchy of needsSelf-actualization – advancement,

challenges, opportunities to use skillsEsteem – job title, complimentsBelongingness – compatible work groups,

friends, partiesSafety and security – salary increases,

pension plan, medical plans, insurancePhysiological – salary, office, co. cafeteria

Motivation and LeadershipEarly and mid 1960's: contingency

models of leadership proposed a need for different styles under different circumstances (Fred Fiedler)

1964: Vroom's VIE theory (valence, instrumentality, expectancy) of motivation proposed

Mid 1960's: David McClelland proposed need for achievement theory

Late 1960's: Frederick Herzberg proposed his two-factor theory of motivation (motivators and hygiene factors)

Late 1960's: Edwin Locke outlined his goal setting approach to motivation

The System Approach

A number of interdependent parts functioning as a whole for some purpose.

Types of Systems

1. Closed

2. Open

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The System ApproachTomas Hopkins’ six guidelines for

conducting system analysis:

1. The whole should be the main focus of analysis

2. Integration is the key variable in wholeness analysis

3. Modifications weighed in relation to effects on every other part

4. Each part has some role to perform

5. Part and its function determined by its position in the whole

6. All analysis starts with the existence of the whole

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Dynamic System and Chaos TheoryReal-time interactionDetermined but not predictableSensitive to initial condition

Example: Group Decision

C

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Group Preference

Test information Lag effect

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Info. Lag

No Info. Lag

Risk and Luck in Chaos System Risk in management

◦Recognize risk◦Estimate loss◦Eliminate risk

Luck plays an important role in business, but it is hard to be identified and analyzed.

Assignment for Week 01