L E A R N I N G O U T L I N E Follow this Learning Outline as you read and study this chapter.Historical Background of ManagementExplain why studying management history is important.Describe some early evidences of management practice.Scientific ManagementDescribe the important contributions made by Fredrick W. Taylor and Frank and Lillian Gilbreth.Explain how todays managers use scientific management.

L E A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.General Administrative TheoristsDiscuss Fayols 14 management principles.Describe Max Webers contribution to the general administrative theory of management.Explain how todays managers use general administrative theory.Quantitative Approach to ManagementExplain what the quantitative approach has contributed to the field of management.Discuss how todays managers use the quantitative approach.

L E A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.Toward Understanding Organizational BehaviorDescribe the contributions of the early advocates of OB.Explain the contributions of the Hawthorne Studies to the field of management.Discuss how todays managers use the behavioral approach.The Systems ApproachDescribe an organization using the systems approach.Discuss how the systems approach is appropriate for understanding management.

L E A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.The Contingency ApproachExplain how the contingency approach differs from the early theories of management.Discuss how the contingency approach is appropriate for studying management.Current Issues and TrendsExplain why we need to look at the current trends and issues facing managers.Describe the current trends and issues facing managers.

Historical Background of ManagementAncient ManagementEgypt (pyramids) and China (Great Wall)Venetians (floating warship assembly lines)Adam SmithPublished The Wealth of Nations in 1776Advocated the division of labor (job specialization) to increase the productivity of workersIndustrial RevolutionSubstituted machine power for human laborCreated large organizations in need of management

Development of Major Management TheoriesExhibit 2.1

Major Approaches to ManagementScientific ManagementGeneral Administrative TheoryQuantitative ManagementOrganizational BehaviorSystems ApproachContingency Approach

Scientific ManagementFredrick Winslow TaylorThe father of scientific managementPublished Principles of Scientific Management (1911)The theory of scientific managementUsing scientific methods to define the one best way for a job to be done:Putting the right person on the job with the correct tools and equipment.Having a standardized method of doing the job.Providing an economic incentive to the worker.

Taylors Five Principles of ManagementExhibit 2.2Develop a science for each element of an individuals work, which will replace the old rule-of-thumb method.Scientifically select and then train, teach, and develop the worker.Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers.

Scientific Management (contd)Frank and Lillian GilbrethFocused on increasing worker productivity through the reduction of wasted motionDeveloped the microchronometer to time worker motions and optimize performanceHow Do Todays Managers Use Scientific Management?Use time and motion studies to increase productivityHire the best qualified employeesDesign incentive systems based on output

General Administrative TheoristsHenri FayolBelieved that the practice of management was distinct from other organizational functions Developed fourteen principles of management that applied to all organizational situationsMax WeberDeveloped a theory of authority based on an ideal type of organization (bureaucracy)Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism

Fayols 14 Principles of ManagementExhibit 2.3Division of work.Authority.Discipline.Unity of command.Unity of direction.Subordination of individual interest to the interests of the organization.Remuneration.Centralization.Scalar chain.Order.Equity.Stability of tenure of personnel.Initiative.Esprit de corps.

Webers Ideal BureaucracyExhibit 2.4

Quantitative Approach to ManagementQuantitative ApproachAlso called operations research or management scienceEvolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problemsFocuses on improving managerial decision making by applying:Statistics, optimization models, information models, and computer simulations

Understanding Organizational Behavior Organizational Behavior (OB)The study of the actions of people at work; people are the most important asset of an organizationEarly OB AdvocatesRobert OwenHugo MunsterbergMary Parker FollettChester Barnard

The Hawthorne StudiesA series of productivity experiments conducted at Western Electric from 1927 to 1932.Experimental findingsProductivity unexpectedly increased under imposed adverse working conditions.The effect of incentive plans was less than expected.Research conclusionSocial norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.

Early Advocates of OBExhibit 2.5

The Systems ApproachSystem DefinedA set of interrelated and interdependent parts arranged in a manner that produces a unified whole.Basic Types of SystemsClosed systemsAre not influenced by and do not interact with their environment (all system input and output is internal).Open systemsDynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.

The Organization as an Open SystemExhibit 2.6

Implications of the Systems ApproachCoordination of the organizations parts is essential for proper functioning of the entire organization.Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.Organizations are not self-contained and, therefore, must adapt to changes in their external environment.

The Contingency ApproachContingency Approach DefinedAlso sometimes called the situational approach.There is no one universally applicable set of management principles (rules) by which to manage organizations.Organizations are individually different, face different situations (contingency variables), and require different ways of managing.

Popular Contingency VariablesExhibit 2.7Organization sizeRoutineness of task technologyEnvironmental uncertaintyIndividual differences

Current Trends and IssuesGlobalizationEthicsWorkforce DiversityEntrepreneurshipE-businessKnowledge ManagementLearning OrganizationsQuality Management

Current Trends and Issues (contd)GlobalizationManagement in international organizationsPolitical and cultural challenges of operating in a global marketEthicsIncreased emphasis on ethics education in college curriculumsIncreased creation and use of codes of ethics by businesses

A Process for Addressing Ethical DilemmasExhibit 2.8Step 1:What is the ethical dilemma?Step 2:Who are the affected stakeholders?Step 3:What personal, organizational, and external factors are important to my decision?Step 4:What are possible alternatives?Step 5:Make a decision and act on it.

Current Trends and Issues (contd)Workforce DiversityIncreasing heterogeneity in the workforceMore gender, minority, ethnic, and other forms of diversity in employeesAging workforceOlder employees who work longer and do not retireThe increased costs of public and private benefits for older workersAn increasing demand for products and services related to aging.

Current Trends and Issues (contd)Entrepreneurship DefinedThe process whereby an individual or group of individuals use organized efforts to create value and grow by fulfilling wants and needs through innovation and uniqueness.Entrepreneurship processPursuit of opportunitiesInnovation in products, services, or business methodsDesire for continual growth of the organization

Current Trends and Issues (contd)E-Business (Electronic Business)The work preformed by an organization using electronic linkages to its key constituenciesE-commerce: the sales and marketing component of an e-businessCategories of E-BusinessesE-business enhanced organizationE-business enabled organizationTotal e-business organization

Categories of E-Business InvolvementExhibit 2.9

Current Trends and Issues (contd)Knowledge ManagementThe cultivation of a learning culture where organizational members systematically gather and share knowledge with others in order to achieve better performance.Learning OrganizationAn organization that has developed the capacity to continuously learn, adapt, and change.

Learning Organization versus Traditional OrganizationExhibit 2.10

Current Trends and Issues (contd)Quality ManagementA philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectationsInspired by the total quality management (TQM) ideas of Deming and JuranQuality is not directly related to cost

What is Management Quality? Exhibit 2.11Intense focus on the customerConcern for continual improvementProcess-focusedImprovement in the quality of everything Accurate measurementEmpowerment of employees