Chp 1A

Management History Module

In this chapter, we’re going to take a trip back in time to see how the field of study called management has evolved. What you’re going to find out is that today’s managers still use many elements of the historical approaches to management. Focus on the following learning objectives as you read and study this chapter.

LEARNING OBJECTIVES

1. Describe some early management examples.

2. Explain the various theories in the classical approach.

3. Discuss the development and uses of the behavioral approach.

4. Describe the quantitative approach.

5. Explain the various theories in the contemporary approach.

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, this supplement 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.

CHAPTER OUTLINE MH.1 EARLY MANAGEMENT

Many fascinating examples from history illustrate how management has been practiced for thousands of years.

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. Adam Smith, author of the classical economics doctrine The Wealth of Nations, argued brilliantly for the economic advantages that he believed division of labor or job specialization (the breakdown of jobs into narrow, repetitive tasks) would bring to organizations and society.

C. 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 2 possible. Planning, organizing, leading, and controlling became necessary activities.

D. Exhibit MH-1 illustrates the development of management theories.

MH.2 CLASSICAL APPROACH

A. Scientific management is defined as the use of the scientific method to determine the “one best way” for a job to be done.

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 MH-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.

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).

3. 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 management practice is not restricted to scientific management practices alone. Elements of scientific management still used include:

a. Using time and motion studies

b. Hiring best qualified workers

c. Designing incentive systems based on output

B. 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.

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.

3 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 MH-3).

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 a division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships (see Exhibit MH-4).

3. 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. a. The functional view of a manager’s job relates to Henri Fayol’s concept of management. b. 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. MH.3 BEHAVIORAL APPROACH 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 of Organizational Behavior. 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 MH-5 for a summary of the most important ideas of these early advocates.) 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 the Western Electric Company 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, 4 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. 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. MH. 4 QUANTITATIVE APPROACH TO MANAGEMENT The quantitative approach to management, sometimes known as management science, uses quantitative techniques to improve decision-making. This approach includes applications of statistics, optimization models, information models, and computer simulations. A. The quantitative approach originated during World War II as mathematical and statistical solutions to military problems and was developed for wartime use. 1. 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. 2. In the 1950s, the ideas and techniques of W. Edwards Deming and Joseph M. Juran were embraced by Japanese organizations. Later Western managers also incorporated their ideas. 3. The management philosophy devoted to continual improvement and responding to customer needs and expectations is total quality management or TQM. (See Exhibit MH-6.) 4. TQM represents a counterpoint to earlier management theorists who believed that low costs were the only road to increased productivity. 5. The objective of quality management is to create an organization committed to continuous improvement in work processes. 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 availability of sophisticated computer software programs has made the use of quantitative techniques more feasible for managers. MH.5 CONTEMPORARY APPROACHES A. Systems Theory. During the 1960s, researchers began to analyze organizations from a systems perspective based on the physical 5 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 closed and open. A closed system is not influenced by and does not interact with its environment. An open system interacts with its environment (see Exhibit MH-7). 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. B. The Contingency Approach. The contingency approach recognizes that different organizations require different ways of managing. 1. The contingency approach to management is a view that the organization recognizes and responds to situational variables as they arise. 2. Some popular contingency variables are shown in Exhibit MH-8