Chapter 2 Outline

Scientific Management Theory

Job Specialization and the Division of Labor
F. W. Taylor and Scientific Management
The Gilbreths
Administrative Management Theory
The Theory of Bureaucracy
Fayols Principles of Management
Behavioral Management Theory
The Work of Mary Parker Follett
The Hawthorne Studies and Human Relations
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 Chapter Outline (contd)
Behavioral Management Theory (contd)
Theory X and Theory Y
Management Science Theory
Organizational Environment Theory
The Open Systems View
Contingency Theory

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 The Evolution of Management Theory

Source: Figure 2.1

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 Scientific Management Theory
Evolution of Modern Management
Began in the industrial revolution in the late 19th
century as:
Managers of organizations began seeking ways to
better satisfy customer needs.
Large-scale mechanized manufacturing began to
supplanting small-scale craft production in the ways
in which goods were produced.
Social problems developed in the large groups of
workers employed under the factory system.
Managers began to focus on increasing the efficiency
of the worker-task mix.

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 F.W. Taylor and Scientific Management
Scientific Management
The systematic study of the relationships between
people and tasks for the purpose of redesigning the
work process for higher efficiency.
Defined by Frederick Taylor in the late 1800s to
replace informal rule of thumb knowledge.
Taylor sought to reduce the time a worker spent on
each task by optimizing the way the task was done.
Taylor: increase specialization & division of labor to
make production process more efficient

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 F.W. Taylor and Scientific Management
Scientific Management (Taylor) Principles
Gather data about ways workers perform their
tasks; experiment with different ways to improve
performance
Codify methods into written rules and standards
Select people who have skills/abilities needed in the
task and train them on the particular task
Establish acceptable level of performance and
reward for performance above that level

Organizations chose to select some, rather than all, of

these principles.

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 Henry Ford: A matter of ethics

Reduced work day and

more pay

along with

Extreme control

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 Frank and Lillian Gilbreth
Refined Taylors work and made many
improvements to the methodologies of time
and motion studies.
Time and motion studies
Break up each job action into its component actions.
Find better ways to perform the action.
Reorganize each job action to be more efficient.
Also studied worker-related fatigue problems
caused by lighting, heating, and the design of
tools and machines.

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 Scientific Management Principles:
the result

Jobs were more repetitive, boring, monotonous

Workers increasingly dissatisfied

Workers tried to hide the potential efficiency of

the work environment

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 Administrative Management Theory
Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.
Max Weber
Developed the concept of bureaucracy as a formal
system of organization and administration designed
to ensure efficiency and effectiveness.

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 Webers
Principles of
Bureaucracy

Figure 2.2
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 Bureaucracy
Strengths
Claimed to improve organizational performance
Easier for managers to organize and control
Fair and equitable raises and promotion
Improves feeling of security
Reduces stress
Encourage ethical behavior
Weaknesses
What if poorly managed?
Decisions and changes are slow
Inflexibility

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 Fayols Principles of Management
Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization
leading to poor quality and worker dissatisfaction.
Authority and Responsibility
Fayol included both formal and informal authority
resulting from special expertise.
Unity of Command
Employees should have only one boss.

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Fayols Principles of Management (contd)
Line of Authority
A clear chain of command from top to bottom of
the firm.
Centralization
The degree to which authority rests at the top of
the organization.
Unity of Direction
Employee should receive orders and report to only
one supervisor.

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Fayols Principles of Management (contd)
Equity
The provision of justice and the fair and impartial
treatment of all employees.
Order
The arrangement of employees where they will be
of the most value to the organization and to provide
career opportunities.
Initiative
The fostering of creativity and innovation by
encouraging employees to act on their own.

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Fayols Principles of Management (contd)
Discipline
Obedient, applied, respectful employees are
necessary for the organization to function.
Remuneration of Personnel
An equitable uniform payment system that
motivates contributes to organizational success.
Stability of Tenure of Personnel
Long-term employment is important for the
development of skills that improve the
organizations performance.

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Fayols Principles of Management (contd)
Subordination of Individual Interest to the
Common Interest
The interest of the organization takes precedence
over that of the individual employee.
Esprit de corps
Comradeship, shared enthusiasm foster devotion to
the common cause (organization).

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Why do companies perform better than their
rivals?
(62 companies)
Emphasize management autonomy and
entrepreneurship
Encourage risk taking and initiative
Top managers closely involved in daily operations
Unity of command and unity of direction
Decisions are not made in an isolated tower
Decentralized authority
Organizational goals guide everyones actions
Division of work and authority given with individual
interests towards the common interest
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 Behavioral Management Theory
Behavioral Management
The study of how managers should behave to
motivate employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.
Focuses on the way a manager should personally
manage to motivate employees.

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 Behavioral Management
Mary Parker Follett (1868-1933)

An influential leader in early managerial theory

Concerned that Taylor was ignoring the human side
of the organization and the number of ways
employees can help managers
Held a horizontal view of power and authority
Authority should go with knowledge
Managers should be facilitators rather than monitors
or supervisors
Root of the work in self-managed teams,
empowerment, and cross-functioning

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 The Hawthorne Studies
Studies of how characteristics of the work
setting affected worker fatigue and
performance at the Hawthorne Works of the
Western Electric Company from 1924-1932.
Worker productivity was measured at various levels
of light illumination.
Productivity increased regardless of whether the
light levels were raised or lowered.
Why? the presence of the researchers
Implication human relations movement

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 Human Relations Movement
Sparked by the Hawthorne Studies
Workers attitude towards their managers affect their work
performance
Train supervisors to elicit cooperative behavior from
subordinates so productivity will increase
Workers making telephone switching equipment
The norm of output vs. ratebusters vs. chiselers
Workers influence can be as great as the managers
Managers must understand the informal organization
The beginning of Organizational Behavior

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 Theory X versus Theory Y
(Douglas McGregor)

Source: Figure 2.3

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 Management Science Theory
An approach to management that uses
rigorous quantitative techniques to maximize
the use of organizational resources.
Quantitative managementutilizes linear
programming, modeling, simulation systems.
Operations managementtechniques to analyze
all aspects of the production system.
Total Quality Management (TQM)focuses on
improving quality throughout an organization.
Management Information Systems (MIS)
manage information throughout the organization so
that it gets to the right people at the right time.

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 Organizational Environment Theory
Organizational Environment
The set of forces and conditions that operate
beyond an organizations boundaries but affect a
managers ability to acquire and utilize resources.
What forces are presently in the
environment that affect the managers ability
to acquire and utilize resources?

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 The Open-Systems View
(Katz, Kahn, Thompson, 1960s)

Organization takes resources from the external

environment and transforms them into goods and
services that are sent back out to environment
Organization interacts with environment in order to
survive
Not a closed system, which is:
self contained
likely to experience entropy
The whole is greater than the sum of its parts
Synergy: gains acquired when entities coordinate
their efforts

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 Contingency Theory
(Burns & Stalker, Britain, 1960s)

No one best way to organize because the

external environment (ability to gain
resources) influences the organizational
structures and controls
A quickly changing environment works against
this why?
Mechanic vs. Organic structure

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 Summary of Theories

Scientific Management Theory

Job specialization and division of labor
Taylor (Scientific Management)
Gilbreths

Administrative Management Theory

Theory of Bureaucracy
Fayol (14 principles of management)

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 Summary of Theories (continued)

Behavioral Management Theory

Follett
Hawthorne Studies and Human Relations
McGregor (Theory X & Theory Y)
Management Science Theory
Quantitative management
Organizational Environment Theory
Open-systems View
Contingency Theory

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