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ANNOTATED OUTLINE
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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. 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-twentieth-century 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.
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.
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).
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 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
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).
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).
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.
The
quantitative approach to management, sometimes known as operations research or management science, uses quantitative
techniques to improve decision making. Thi s
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.
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.
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.)
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
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.
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.
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).
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 self-contained; they
rely on and are affected by factors in their external environment.
The contingency approach
recognizes that different organizations require different ways of managing.
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.
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.
B.
Ethics.
Cases of corporate lying, misrepresentations, and financial manipulations have
been widespread in recent years. Managers of firms 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.
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.
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.
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 e-business 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.
F.
Knowledge
Management and Learning
Organizations.
1.
Change is occurring at an unprecedented rate.
2.
To be successful, today’s organization must
become a learning organization—one
that has developed the capacity to continuously learn, adapt, and change. (Exhibit 2-10 and PowerPoint slide
2-32 illustrate differences between a learning organization and a
traditional organization.)
3.
Knowledge
management involves cultivating a learning culture where organizational
members systematically gather knowledge and share it with others in the
organization so as to achieve better performance.
G. Quality Management.
1. Quality management is a philosophy of management that is driven by
continual improvement and response to customer needs and expectations (see Exhibit 2-11).
2. TQM was inspired by
a small group of quality experts, including W. Edwards Deming, who was one of
its chief proponents.
3. TQM represents a
counterpoint to earlier management theorists who believed that low costs were
the only road to increased productivity.
4. The objective of quality management is to create an
organization committed to continuous improvement in work processes.
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