CHAPTER Management Yesterday and Today lsctreautine Scientific Manager men Since the birth of modern management theory in Management? he earl小v1900s. management experts have developed theories to help organizations and thei and effici presenting the history of modem management s Ma Chapter wo QUE Do Todays Managers Use knowledge of management history can help us un tan current manage ent pracu practice of management has Studie historical times and so How Do Today 's Man nstanc on, mpetition, an today's business w vorld:nnovate or ose A N ation As Cha anager's Dile global footwear design for Nike,leads an ear.Design team members find insp ration for their new styles through activities that include to th zoo to obs rve the Japanese art of origami.What can other managers learn from Nike today's dynamic b 15
15 CHAPTER TWO Management Yesterday and Today 2 Lecture Outline Historical Background Scientific Management Important Contributions Frederick W. Taylor Frank and Lillian Gilbreth How Do Today’s Managers Use Scientific Management? General Administrative Theory Important Contributions Henri Fayol Max Weber How Do Today’s Managers Use General Administrative Theories? Quantitative Approach Important Contributions How Do Today’s Managers Use Quantitative Approach? Toward Understanding Organizational Behavior Early Advocates The Hawthorne Studies How Do Today’s Managers Use the Behavioral Approach? The Systems Approach The Contingency Approach Current Trends and Issues Globalization Ethics Workforce Diversity Entrepreneurship Managing in an E-Business World Knowledge Management and Learning Organizations Quality Management Since the birth of modern management theory in the early 1900s, management experts have developed theories to help organizations and their managers coordinate and oversee work activities as effectively and efficiently as possible. In presenting the history of modern management, Chapter Two explores the evolution of management thought and practice during the twentieth century. Students discover how knowledge of management history can help us better understand current management practices while avoiding some mistakes of the past. The practice of management has always reflected historical times and societal conditions. For instance, innovation, global competition, and general competitive pressures reflect a reality of today’s business world: “Innovate or lose.” As Chapter Two opens, “A Manager’s Dilemma” relates how John R. Hoke III, vice president of global footwear design for Nike, leads an international design team in creating hundreds of innovative, sustainable footwear designs every year. Design team members find inspiration for their new styles through activities that include taking trips to the zoo to observe the structure of animals’ feet and devoting time to studying the Japanese art of origami. What can other managers learn from Nike about managing innovation in today’s dynamic business environment?
variety of Po otoatsites both original otpdnkaca ANNOTATED OUTLINE practiced for thousands of years. 2.1 Why do Ineed to know management history? Organization nd ma ha ed for th tremendous scope and magnitude,requiring the efforts of tens of thousa eo peopl out history.someone has always had to plan shed,organize people and materials,lead s to ensure that goals were actices can also be seen by studying business in the fifteenth century that are common to today's C f the c doctrin that he divisionofabor (the breakdown of jobs into narrow,repetitive tasks) ety D on Is po nt T combined with the division of labor made large,efficient factories possible. Planning,organizing.leading,and controlling became Exhibit nd PowerPoint slide 2-7 illustrate the development of management theories. >NOTES Materials I Plan to Use: 2. SCIENTIFIC MANAGEMENT 16
16 A variety of PowerPoint slides, including both original text art and newly created images, are available for your use in enhancing the presentation of Chapter Two materials to your students. ANNOTATED OUTLINE 1. HISTORICAL BACKGROUND OF MANAGEMENT Many fascinating examples from history illustrate how management has been practiced for thousands of years. Q & A 2.1 Why do I need to know management history? A. Organizations and managers have existed for thousands of years. The Egyptian pyramids and the Great Wall of China were projects of tremendous scope and magnitude, requiring the efforts of tens of thousands of people. How was it possible for these projects to be completed successfully? The answer is management. Regardless of the titles given to managers throughout history, someone has always had to plan what needs to be accomplished, organize people and materials, lead and direct workers, and impose controls to ensure that goals were attained as planned. B. Examples of early management practices can also be seen by studying the Arsenal of Venice. Assembly lines, accounting systems, and personnel functions are only a few of the processes and activities used in business in the fifteenth century that are common to today’s organizations as well. C. Adam Smith, author of the classical economics doctrine The Wealth of Nations, argued brilliantly for the economic advantages that he believed division of labor (the breakdown of jobs into narrow, repetitive tasks) would bring to organizations and society. D. The Industrial Revolution is possibly the most important pre-twentiethcentury influence on management. The introduction of machine powers combined with the division of labor made large, efficient factories possible. Planning, organizing, leading, and controlling became necessary activities. E. Exhibit 2-1 and PowerPoint slide 2-7 illustrate the development of management theories. ¾ NOTES Materials I Plan to Use: 2. SCIENTIFIC MANAGEMENT
Important Contributions 1. Frederick W.Taylor is known as the"father of scientific a Taylor sought to create a mental revolution among both workers and managers by defining c ent(Exhibit 2-2) His"pig iron"experiment is probably the most widely c ample of his scientific m Tavlo was able to define the"one best way"for doing each iob d Frederick W.Taylor achieved consistent improvements workers to perform as they were instructed. NOTES Materials I Plan to Use: A2.2 It sure seems like Frederick W.Taylor viewed people negatively.Is that true? Frank Lillian Gilbreth swork and of scient山f a Frank Gilbreth is probably best known for his experiments in reducing the number of motions in 6 The Gilbreths were among the first to use motion picture films to study hand and body motions in order to eliminate wastefu c backward.with the th transposed). >NOTES Materials I Plan to Use B How Do Today's Mar ent? rove production efficiency are still used in today's organizations.However,current 17
17 Scientific management is defined as the use of the scientific method to determine the “one best way” for a job to be done. A. Important Contributions 1. Frederick W. Taylor is known as the “father” of scientific management. Taylor’s work at the Midvale and Bethlehem Steel companies stimulated his interest in improving efficiency. a. Taylor sought to create a mental revolution among both workers and managers by defining clear guidelines for improving production efficiency. He defined four principles of management (Exhibit 2-2). b. His “pig iron” experiment is probably the most widely cited example of his scientific management efforts. c. Using his principles of scientific management, Taylor was able to define the “one best way” for doing each job. d. Frederick W. Taylor achieved consistent improvements in productivity in the range of 200 percent. He affirmed the role of managers to plan and control and the role of workers to perform as they were instructed. ¾ NOTES Materials I Plan to Use: Q & A 2.2 It sure seems like Frederick W. Taylor viewed people negatively. Is that true? 2. Frank and Lillian Gilbreth were inspired by Taylor’s work and proceeded to study and develop their own methods of scientific management. a. Frank Gilbreth is probably best known for his experiments in reducing the number of motions in bricklaying. b. The Gilbreths were among the first to use motion picture films to study hand and body motions in order to eliminate wasteful motions. c. They also devised a classification scheme to label 17 basic hand motions called therbligs (Gilbreth spelled backward, with the th transposed). ¾ NOTES Materials I Plan to Use: B. How Do Today’s Managers Use Scientific Management? Guidelines devised by Taylor and others to improve production efficiency are still used in today’s organizations. However, current
Ising time and motion studies 43 Hiring best qualified workers Designing incentive systems based on output NOTES Materials I Plan to Use: 2.3 Why was scientific management even a management theory when it concentrated on laborers'jobs? 3 GENERAL ADMINISTRATIVE THEORISTS This group of writers,who focused on the entire organization,developed more general theories of what managers do and what constitutes good management Henri favol and max weber were the two most prominent proponents of the general administrative approach. Henri Fayol,who was a contemporary of Fred derick W.Taylor, rencn o all m ng the practice of management as distinct c e ypical bus ght in schools:sec Exhibit 2-3 and PowerPoint slide 2-13) NOTES Materials I Plan to Use: Q&A s W modern management rather than Taylor? 2 Max Wehe ced VAY.ber who wrote in the ar was a German sociologis ieth centun 6 He described the ideal form ofc a clearl 18
18 management practice is not restricted to scientific management practices alone. Elements of scientific management still used include: 1. Using time and motion studies 2. Hiring best qualified workers 3. Designing incentive systems based on output ¾ NOTES Materials I Plan to Use: Q & A 2.3 Why was scientific management even a management theory when it concentrated on laborers’ jobs? 3. GENERAL ADMINISTRATIVE THEORISTS This group of writers, who focused on the entire organization, developed more general theories of what managers do and what constitutes good management practice. A. Henri Fayol and Max Weber were the two most prominent proponents of the general administrative approach. 1. Henri Fayol, who was a contemporary of Frederick W. Taylor, was the managing director of a large French coal-mining firm. a. Fayol focused on activities common to all managers. b. He described the practice of management as distinct from other typical business functions. c. He stated 14 principles of management (fundamental or universal truths of management that can be taught in schools; see Exhibit 2-3 and PowerPoint slide 2-13). ¾ NOTES Materials I Plan to Use: Q & A 2.4 It would seem that Fayol’s view of management is more in tune with current views of management than was Taylor’s. Why, then, isn’t Fayol known as the “father” of modern management rather than Taylor? 2. Max Weber (pronounced VAY-ber) was a German sociologist who wrote in the early twentieth century. a. Weber developed a theory of authority structures and described organizational activity based on authority relations. b. He described the ideal form of organization as a bureaucracy marked by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships (see Exhibit 2-4)
NOTES Materials I Plan to Use: How Do Today's Managers Use General Administrative Theories? Wome current management conceptsan te r's job relates to Henri Fayol's cent of management 2. bureaucratic characteristics are evident in many of bureaucratic mechanisms are necessary in highly innovative ceetrvto ensure hat resoure cntly NOTES Materials I Plan to Use: making.Thspproach includes applications of statisties,optimization nform and computer simulation The quantitative ap roach originated during World War II as maic and atistical solutions to military problems were As often dnim Worl Wrcoure p vartime methods that were dev private industry follo ve decision making at Ford Motor Con pany in the mid- 1940 NOTES Materials I Plan to Use B How Do Today's Mar rs Use the ouanti manag rial decision making.particularly in planning and controlling
19 ¾ NOTES Materials I Plan to Use: B. How Do Today’s Managers Use General Administrative Theories? Some current management concepts and theories can be traced to the work of the general administrative theorists. 1. The functional view of a manager’s job relates to Henri Fayol’s concept of management. 2. Weber’s bureaucratic characteristics are evident in many of today’s large organizations—even in highly flexible organizations that employ talented professionals. Some bureaucratic mechanisms are necessary in highly innovative organizations to ensure that resources are used efficiently and effectively. ¾ NOTES Materials I Plan to Use: 4. QUANTITATIVE APPROACH TO MANAGEMENT The quantitative approach to management, sometimes known as operations research or management science, uses quantitative techniques to improve decision making. This approach includes applications of statistics, optimization models, information models, and computer simulations. A. Important Contributions. 1. The quantitative approach originated during World War II as mathematical and statistical solutions to military problems were developed for wartime use. 2. As often happens after wartime, methods that were developed during World War II to conduct military affairs were applied to private industry following the war. For instance, a group of military officers—the Whiz Kids—used quantitative methods to improve decision making at Ford Motor Company in the mid- 1940s. ¾ NOTES Materials I Plan to Use: B. How Do Today’s Managers Use the Quantitative Approach? 1. The quantitative approach has contributed most directly to managerial decision making, particularly in planning and controlling
2. The managers 5. TOWARD UNDERSTANDING ORGANIZATIONAL BEHAVIOR of st lo at orl i ration behavior.Organizational behavior (OB)research has contributed ership,trust,tcamwork,and conflict management Early Advocates Parke motivation programs.work teams,and organization-environment (See Exhibit 2-5 for a summary of the most e carly adv NOTES Materials I Plan to Use: The Hawthorne Studies were the most important contribution to the velopmnt of organizational 1g24t0 Cicero,Illinois,were initially devised impact of vanous phys After Harvard professor Elton Mayo and his associates joined re included to lo 3. ers Although not without criticism(conceing procedures,analyses of findings,and the conclusions),the Hawthome Studies stimulated interest in human behavior in organizational settings >NOTES Materials I Plan to Use: 2.5 Why were the Hawthome Studies so significant to management theory? 20
20 2. The availability of sophisticated computer software programs has made the use of quantitative techniques more feasible for managers. 5. TOWARD UNDERSTANDING ORGANIZATIONAL BEHAVIOR The field of study concerned with the actions (behaviors) of people at work is organizational behavior. Organizational behavior (OB) research has contributed much of what we know about human resources management and contemporary views of motivation, leadership, trust, teamwork, and conflict management. A. Early Advocates Four individuals—Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnard—were early advocates of the OB approach. Their ideas served as the foundation for employee selection procedures, motivation programs, work teams, and organization-environment management techniques. (See Exhibit 2-5 for a summary of the most important ideas of these early advocates.) ¾ NOTES Materials I Plan to Use: B. The Hawthorne Studies were the most important contribution to the development of organizational behavior. 1. This series of experiments conducted from 1924 to the early 1930s at Western Electric Company’s Hawthorne Works in Cicero, Illinois, were initially devised as a scientific management experiment to assess the impact of changes in various physical environment variables on employee productivity. 2. After Harvard professor Elton Mayo and his associates joined the study as consultants, other experiments were included to look at redesigning jobs, make changes in workday and workweek length, introduce rest periods, and introduce individual versus group wage plans. 3. The researchers concluded that social norms or group standards were key determinants of individual work behavior. 4. Although not without criticism (concerning procedures, analyses of findings, and the conclusions), the Hawthorne Studies stimulated interest in human behavior in organizational settings. ¾ NOTES Materials I Plan to Use: Q & A 2.5 Why were the Hawthorne Studies so significant to management theory?
ach? 1 The behavioral approach assists manager The theories of motivation,leadership,and group behavior and development. NOTES Materials I Plan to Use: 6. THE SYSTEMS APPROACH During the 1960 from two basic types of systems are open and closed.A closed system is not nteracts >NOTES Materials I Plan to Use: ganization as a body of the s of the organization.realizing that decisions and actions taken inone organizational area will affect other areas. environment. NOTES Materials I Plan to Use: 2.6 Why is the systems perspective a good way to view organizations? 1. THE CONTINGENCY APPROACH The contingency approach recognizes that different organizations require different ways of managing. 21
21 C. How Do Today’s Managers Use the Behavioral Approach? 1. The behavioral approach assists managers in designing jobs that motivate workers, in working with employee teams, and in facilitating the flow of communication within organizations. 2. The behavioral approach provides the foundation for current theories of motivation, leadership, and group behavior and development. ¾ NOTES Materials I Plan to Use: 6. THE SYSTEMS APPROACH During the 1960s researchers began to analyze organizations from a systems perspective based on the physical sciences. A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. The two basic types of systems are open and closed. A closed system is not influenced by and does not interact with its environment. An open system interacts with its environment (see Exhibit 2-6). ¾ NOTES Materials I Plan to Use: A. The Systems Approach and Managers 1. Using the systems approach, managers envision an organization as a body with many interdependent parts, each of which is important to the well-being of the organization as a whole. 2. Managers coordinate the work activities of the various parts of the organization, realizing that decisions and actions taken in one organizational area will affect other areas. 3. The systems approach recognizes that organizations are not selfcontained; they rely on and are affected by factors in their external environment. ¾ NOTES Materials I Plan to Use: Q & A 2.6 Why is the systems perspective a good way to view organizations? 7. THE CONTINGENCY APPROACH The contingency approach recognizes that different organizations require different ways of managing
A. The approach is a viw that the organization Some popular. >NOTES Materials I Plan to Use: merely ala deend can a Self-Assessment Library Responding to Change and char ntial in the ach #I.C.1 "How Well Do I Respond to Turbulent Cha r en ng the regar How might your score on this self-assessment exercise influence the way you hat ot nplications might this information have? What could you learn from your classmates through this exercise? Q &A 2 8 Considerina the ma which man ne n 8 CURRENT TRENDS AND ISSUES After the study of the history and development of management theories,students d chanin the A Globalization.Organizational operations are no longer limited by national ughout the v opportunities an Iwith new enges >NOTES Materials I Plan to Use: Ethics.Cases of corporate lving.misrepresentation s.and financial manipulations have been widespread in recent years.Managers of firms 22
22 A. The contingency approach to management is a view that the organization recognizes and responds to situational variables as they arise. B. Some popular contingency variables are shown in Exhibit 2-7. ¾ NOTES Materials I Plan to Use: Q & A 2.7 If the contingency perspective merely tells us “it all depends,” how can this approach be valuable to managers? Self-Assessment Library Responding to Change Change and change management are essential elements in the contingency approach (situational approach) that often require different ways of managing. Self-Assessment #III.C.1 “How Well Do I Respond to Turbulent Change?” gives students the opportunity to gauge their effectiveness regarding change. Students may consider the following questions after completing the exercise: How might your score on this self-assessment exercise influence the way you approach managing? What other career implications might this information have? What could you learn from your classmates through this exercise? Q & A 2.8 Considering the many ways in which managerial situations may differ, how can we have a common body of knowledge about effective management? 8. CURRENT TRENDS AND ISSUES After the study of the history and development of management theories, students can better understand how current concepts and practices are changing the way managers do their jobs today. A. Globalization. Organizational operations are no longer limited by national borders. Managers throughout the world must deal with new opportunities and challenges inherent in the globalization of business. ¾ NOTES Materials I Plan to Use: B. Ethics. Cases of corporate lying, misrepresentations, and financial manipulations have been widespread in recent years. Managers of firms
1.While most managers continue to behave in a highly ethical manner, ethcal standard increasingly emphasize ollege curricula 3.Organizations are taking a more active role in creating and using codesofthics.cthics training programs,and ethical hiring NOTES Materials I Plan to Use: Workfore diversity refers to a workforce that ishet Icity,age,and other charact 2Wetiorcthncnsty5agotbglisuc 3. s of people by addressi g different ifstyles.family needs,and work styles is a major challenge for managers. 4 Wis n asset in bringin g a broad range of viewpoints and problem-soving skills to an organization. >NOTES Materials I Plan to Use: Entrepreneurshin is the process whereby an individual or group of and grow by u可 The pursuit of opportunities Entre neurship will continue to be important to societies e entrepreneurship module appea examines topics presented in that particular section from an entrepreneurial perspective. NOTES Materials I Plan to Use: 23
23 such as Enron, ImClone, Global Crossing, and Tyco International have placed their own self-interest ahead of other stakeholders’ welfare. 1. While most managers continue to behave in a highly ethical manner, abuses suggest a need to “upgrade” ethical standards. 2. Ethics education is increasingly emphasized in college curricula today. 3. Organizations are taking a more active role in creating and using codes of ethics, ethics training programs, and ethical hiring procedures. ¾ NOTES Materials I Plan to Use: C. Workforce diversity refers to a workforce that is heterogeneous in terms of gender, race, ethnicity, age, and other characteristics that reflect differences. 1. Workforce diversity is a global issue. 2. The assimilation (“melting pot”) model used before the early 1980s has been replaced by the recognition and celebration of differences. 3. Accommodating diverse groups of people by addressing different lifestyles, family needs, and work styles is a major challenge for today’s managers. 4. Wise managers value diversity as an asset in bringing a broad range of viewpoints and problem-solving skills to an organization. ¾ NOTES Materials I Plan to Use: D. Entrepreneurship is the process whereby an individual or group of individuals use organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has. 1. Three important themes stand out in this definition: a. The pursuit of opportunities b. Innovation c. Growth 2. Entrepreneurship will continue to be important to societies around the world. Note: A special entrepreneurship module appears at the end of each of the six major parts of the textbook. This feature examines topics presented in that particular section from an entrepreneurial perspective. ¾ NOTES Materials I Plan to Use:
Self-Assessment Library Entrepreneurship Entr gives students an opportunity to assess thei entrepr rial attributes and inclinations.In this exercise,students may want to reflec on the following questions: Dohnkstdents mjorinin busines would or high oow on this as How might sco owyouussfoationtohep you pan you ar Managing in an E-Business World siness ion eve its goal 2 2001,e-business is here to stay. 3 (commerce)is the sales and marketing 4 Categories of e-business involvement (see Exhibit 2-9 and PowerPoint slide 2-30): This type of organization sets up e b able ess ena orga nzanon uses the emet to functions more and effectively,but it does not A tot NOTES Materials I Plan to Use: 24
24 Self-Assessment Library Entrepreneurship Entrepreneurship involves changing, revolutionizing, transforming, or introducing new products or services or new ways of doing business. Self-Assessment #I.E.4 “Am I Likely to Become an Entrepreneur?” gives students an opportunity to assess their entrepreneurial attributes and inclinations. In this exercise, students may want to reflect on the following questions: Do you think most college students majoring in business would score high or low on this assessment? Explain. How might scores on this self-assessment exercise affect an individual’s approach to managing? How can you use this information to help you plan your career? E. Managing in an E-Business World 1. E-business (electronic business) is a comprehensive term describing the way an organization does its work by using electronic (Internet-based) linkages with its key constituencies in order to efficiently and effectively achieve its goals. 2. While critics questioned the viability of Internet-based companies (dot-coms) after the high-tech implosion in 2000 and 2001, e-business is here to stay. 3. E-commerce (electronic commerce) is the sales and marketing component of e-business. 4. Categories of e-business involvement (see Exhibit 2-9 and PowerPoint slide 2-30): a. An e-business enhanced organization uses the Internet to enhance (expand, not replace) its traditional ways of doing business. This type of organization sets up ebusiness capabilities (usually e-commerce). b. An e-business enabled organization uses the Internet to enable the company to perform its traditional business functions more efficiently and effectively, but it does not sell products or services on the Internet. c. A total e-business is made possible by, and revolves around, the Internet. ¾ NOTES Materials I Plan to Use: