CHAPTER 2 MANAGEMENT TODAY AND YESTERDAY Historical Background of Management
• Ancient Management
； Egypt (pyramids) and China (Great Wall)
• Adam Smith
； Published “The Wealth of Nations” in 1776
; Advocated the division of labor (job specialization) to increase the
productivity of workers
• Industrial Revolution
； Substituted machine power for human labor
； Created large organizations in need of management
Development of Major Management Theories
Major Approaches to Management
• Scientific Management
• General Administrative Theory
• Quantitative Management
• Organizational Behavior
• Systems Approach
• Contingency Approach
• Fredrick Winslow Taylor
； The “father” of scientific management
； Published Principles of Scientific Management (1911)
; The theory of scientific management
– Using 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
• Having a standardized method of doing the job.
• Providing an economic incentive to the worker.
Taylor’s Five Principles of Management
1. Develop a science for each element of an individual’s work, which will replace the
old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the worker. 3. 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. 4. Divide work and responsibility almost equally between management and workers.
5. Management takes over all work for which it is better fitted than the workers.
Frank and Lillian Gilbreth
1. Focused on increasing worker productivity through the reduction of wasted
2. Developed the microchronometer to time worker motions and optimize
How Do Today’s Managers Use Scientific Management?
3. Use time and motion studies to increase productivity
4. Hire the best qualified employees
5. Design incentive systems based on output
General Administrative Theorists
• Henri Fayol
； Believed that the practice of management was distinct from other organizational
； Developed fourteen principles of management that applied to all organizational
• Max Weber
； Developed a theory of authority based on an ideal type of organization
; Emphasized rationality, predictability, impersonality, technical
competence, and authoritarianism
Fayol’s 14 Principles of Management
3. Unity of command.
4. Unity of direction.
5. Subordination of individual interest to the interests Division of work. 6. of the organization.
9. Scalar chain.
12. Stability of tenure of personnel.
14. Esprit de corps.
Weber’s Ideal Bureaucracy
Quantitative Approach to Management
• Quantitative Approach
； Also called operations research or management science
； Evolved from mathematical and statistical methods developed to solve WWII
military logistics and quality control problems
； Focuses on improving managerial decision making by applying:
; Statistics, optimization models, information models, and computer
Understanding Organizational Behavior
• Organizational Behavior (OB)
； The study of the actions of people at work; people are the most important asset of
• Early OB Advocates
； Robert Owen
； Hugo Munsterberg
； Mary Parker Follett
； Chester Barnard
The Hawthorne Studies
• A series of productivity experiments conducted at Western Electric from 1927 to 1932. • Experimental findings
； Productivity unexpectedly increased under imposed adverse working conditions.
； The effect of incentive plans was less than expected.
• Research conclusion
； Social norms, group standards and attitudes more strongly influence individual
output and work behavior than do monetary incentives.
Early Advocates of OB
The Systems Approach
• System Defined
； A set of interrelated and interdependent parts arranged in a manner that produces
a unified whole.
• Basic Types of Systems
； Closed systems
; Are not influenced by and do not interact with their environment (all
system input and output is internal).
； Open systems
; Dynamically interact to their environments by taking in inputs and
transforming them into outputs that are distributed into their
The Organization as an Open System
Implications of the Systems Approach
• Coordination of the organization’s parts is essential for proper functioning of the entire
• 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
The Contingency Approach
• Contingency Approach Defined
； Also 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 Variables
• Organization size
• Routineness of task technology
• Environmental uncertainty
• Individual differences
Current Trends and Issues
• Workforce Diversity
• Knowledge Management
• Learning Organizations
• Quality Management
； Management in international organizations
； Political and cultural challenges of operating in a global market Ethics
； Increased emphasis on ethics education in college curriculums
； Increased creation and use of codes of ethics by businesses A Process for Addressing Ethical Dilemmas
Step 1: What is the ethical dilemma?
Step 2: Who are the affected stakeholders?
Step 3: What personal, organizational, and
external factors are important to
Step 4: What are possible alternatives?
Step 5: Make a decision and act on it.
； Increasing heterogeneity in the workforce
; More gender, minority, ethnic, and other forms of diversity in employees
； Aging workforce
; Older employees who work longer and do not retire
; The increased costs of public and private benefits for older workers
; An increasing demand for products and services related to aging. Entrepreneurship Defined
； The process whereby an individual or group of individuals use organized efforts
to create value and grow by fulfilling wants and needs through innovation and
； Pursuit of opportunities
； Innovation in products, services, or business methods
； Desire for continual growth of the organization
E-Business (Electronic Business)
； The work preformed by an organization using electronic linkages to its key
； E-commerce: the sales and marketing component of an e-business Categories of E-Businesses
； E-business enhanced organization
； E-business enabled organization
； Total e-business organization
； The cultivation of a learning culture where organizational members
systematically gather and share knowledge with others in order to achieve better
； An organization that has developed the capacity to continuously learn, adapt, and
Learning Organization versus Traditional Organization
； A philosophy of management driven by continual improvement in the quality of
work processes and responding to customer needs and expectations
； Inspired by the total quality management (TQM) ideas of Deming and Juran
； Quality is not directly related to cost
What is Quality Management?
Intense focus on the customer
Concern for continual improvement
Improvement in the quality of everything
Empowerment of employees
Parameters of Managerial Discretion
The Organization’s Culture
• Organizational Culture
； A system of shared meanings and common beliefs held by organizational
members that determines, in a large degree, how they act towards each other.
• Organizational Culture
； “The way we do things around here.”
• Values, symbols, rituals, myths, and practices
； Implications: Culture is a perception. Culture is shared. Culture is descriptive.
Dimensions of Organizational Culture
Strong versus Weak Cultures
• Strong Cultures
； Are cultures in which key values are deeply held and widely held.
； Have a strong influence on organizational members. • Factors Influencing the Strength of Culture
； Size of the organization
； Age of the organization
； Rate of employee turnover
； Strength of the original culture
； Clarity of cultural values and beliefs
Benefits of a Strong Culture
1. Creates a stronger employee commitment to the organization. 2. Aids in the recruitment and socialization of new employees. 3. Fosters higher organizational performance by instilling and promoting employee
• Sources of Organizational Culture
； The organization’s founder
; Vision and mission
； Past practices of the organization
; The way things have been done
； The behavior of top management
• Continuation of the Organizational Culture
； Recruitment of like-minded employees who “fit”
； Socialization of new employees to help them adapt to the culture
How an Organization’s Culture Is Established and Maintained
How Employees Learn Culture
； Narratives of significant events or actions of people that convey the spirit of
； Repetitive sequences of activities that express and reinforce the values of the
• Material Symbols
； Physical assets distinguishing the organization
； Acronyms and jargon of terms, phrases, and word meanings specific to an
How Culture Affects Managers
• Cultural Constraints on Managers
； Whatever managerial actions the organization recognizes as proper or
improper on its behalf
； Whatever organizational activities the organization values and encourages
； The overall strength or weakness of the organizational culture
Simple rule for getting ahead in an organization:Find out what the
organization rewards and do those things.
Organization Culture Issues
• Creating an Ethical Culture
； High in risk tolerance
； Low to moderate aggressiveness
； Focus on means as well as outcomes
• Creating an Innovative Culture
； Challenge and involvement
； Trust and openness
； Idea time
； Conflict resolution
Organization Culture Issues
• Creating a Customer-Responsive Culture
； Hiring the right type of employees (ones with a strong interest in serving
； Having few rigid rules, procedures, and regulations
； Using widespread empowerment of employees
； Having good listening skills in relating to customers’ messages
； Providing role clarity to employees to reduce ambiguity and conflict and
increase job satisfaction
； Having conscientious, caring employees willing to take initiative
Defining the External Environment
External Environment •
； The forces and institutions outside the organization that potentially can
affect the organization’s performance.
• Components of the External Environment
； Specific environment: external forces that have a direct and immediate
impact on the organization.
； General environment: broad economic, socio-cultural, political/legal,
demographic, technological, and global conditions that may affect the
The External Environment