Module 5 – Lecture Notes

Bureaucratic Management

Looking into the organizations and the people or individuals who make them up.

As we shift focus into organizations, we’re going to also now confront the real implications of
bureaucracy, the implications of the observation that Weber made, that bureaucracy is
technically superior and that this technical superiority derives primarily from the fact that it
neutralizes the humanity of the people that make up the organization.

Recall that Weber considered bureaucracy to be a technically superior form of organization and
also characteristic of what he regarded to be a seemingly inevitable progress of modernity.
 This progress required increasing demands on what we call government.
 The technical superiority was also essential in things like planning because we could
predict behavior.
 Required a minimization of uncertainty through formal rationality and the reality is that
the source of most uncertainty itself in organizations are the people themselves.
 This is why Weber regarded dehumanization to be the special virtue of bureaucracy
because it is effective in guaranteeing that the standards apply to the organization are
fulfilled irrespective of the individual who is tasked with executing the tasks themselves
in organizations.
 Organizations are mission and goal oriented, and in the pursuit of the goals of an
organization are characterized primarily by efficiency.
 To the greatest extent practicable, organizations are designed around procedures that
minimize uncertainty and maximize efficiency
 Bureaucracy, the way Weber describes it, is the best form of such organization.
 Organizations are made up of people, so our attention is going to focus now upon the
impactful and crucial strategies and efforts over the 20th Century to accommodate the
impulse and the need for efficiency within the context of the people themselves.
 We have to configure an organization with the uncertainty of people in mind.
 Must seek some kind of balance between the mission of the organization and the reality
of its makeup, which is directly connected with the human condition itself.
 The institution of rules that govern organizations is foremost a deliberate choice made
by people, so we have to think about what that looks like.
 We will examine the ways in which the special virtue of bureaucracy is considered and
confronted and will proceed from the classical theory of scientific management through
to the competing ideas of human relations and this will leave us with a discussion of
human resources management and human resource perspectives.
 Shifting the focus to what has traditionally become known as management.
 Focus in this lecture is going to be on organizations and the people that constitute them,
beginning with scientific management, and it will conclude with discussion of the
Hawthorne experiments, which were themselves experiments of scientific management
 To really grasp the ides of scientific management, we have to understand the person
who was primarily responsible for the popularization and also for its study, Frederick
Taylor.
o Management theorist known for his work and what we now know of as scientific
management
o Distinction between Taylor and Weber – need to understand because both of
these figures were important in our understanding of early modern organization,
but they approached it in different ways.
 When we discussed Weber, we focused on his notion of bureaucracy, and
we referred to this as a concept that was an ideal type, and there was a
possibility that we could misinterpret this idea.
 The meaning of an ideal type was not intended to be
misconstrued to be imperfect of utopian.
 Weber was not a management consultant – he was not offering a
prescription for how to best organize society, rather he was
making observations about the way sociological impulses, through
modernity, led almost logically to the development of this thing he
called bureaucracy.
 Weber was a theorist that was concerned primarily with forms of
domination.
 In terms of organizational structure, we should be very familiar
with the structure of bureaucracy as Weber outlined it.
 Weber proposed his characteristics of bureaucracy as an ideal
type with some key characteristics, characteristics like
documentation, expertise, tenure, etc.
 For purposes of productive organizations, bureaucracy remains, in many
respects, the default form.
 The key, is figuring out how to extract from the organization
maximal production.
 Bureaucracy is also monocratic, meaning it relies upon a top-down
hierarchical structure; its activities are determined by scientific
knowledge, and they are insulated through legible, knowable rules.
 Organizations that are bureaucratic are systematic, as opposed to being
ad hoc.
 They are designed to address comprehensive concerns rather than to just
simply address temporary concerns; they are supposed to be lasting
forms of organization
 The idea that we can utilize these qualities to maximize or optimize,
meaning that we can use these qualities of bureaucracy to pursue an
ideal in and of itself, this is an invention of what we call management
theory. This is not something we inherit from Weber.
o Management theory and management ideas, specifically, the burgeoning
industry of management consulting – come from Frederick Taylor.
o To understand the development of personnel management in the 20th Century,
it’s important to know where this all begins.
Frederick Taylor and Scientific Management (Part 1)

Frederick Taylor’s background

 Began his life as an apprentice
 Over 12 years, he worked his way up to the role of engineer, which is an important
historical note because, as you are likely aware, there are fairly few apprenticeships
today
o One of the reasons for few apprenticeships is that capital and technology
gradually phased out the apprentice system, Guilds slowly waned in their
influence
o Skilled labor was gradually becoming less influential as machines and technology
replaced certain roles and tasks.
 Also, at this time in the early 1900s, Labor was still able to exert some influence over
capital through unions. Labor and workers exercised a certain level of control over
production.
 One of the things Taylor observed was that the type of production that was now asked
of any type of endeavor in modernity was not the same as it had been in the past that
labor that was required to execute these things had been strongly mitigated by
technology itself. (1:00).
 Taylor began to believe that the control over production should fall not on the workers,
but on the managers.
o We understand today the concept that managers are responsible for production
o But when Taylor was talking about managers, he was referring to something new
o Like many of the ideas we’ve explored, the manager is one that is invented of
sorts in order to promote the values of the modern organization.
o As the industrial period bloomed, the economy consisted of those who owned
the productive capacities and those who committed the labor to bring about
commodities.
o Increasingly, the owners of capital took on new capacities with workforces that
grew into the hundreds and sometimes the thousands, and the questions that
this raised had less to do with the efficient conduct of machines and production,
since these were matters that were increasingly taken care of by advances in
technology, than it did with the efficient conduct of persons involved in the
efficient conduct of machine production
o Short of a full replacement of human capacity through technology, there
continue to be a need for human labor and industrial production.
o Where does the human ultimately fit into this now largely machine-based type of
production?
 The capacities of the individual and the machine were an essential,
though difficult to control component of productivity.
 In short, we are talking about a move from craft, which is the learned
skills of handiwork that are usually passed down through systems of
apprenticeship and training, largely derived from practical knowledge,
 into machine tools, where the person’s skills were largely interchangeable
in the sense that they would only be using tools, and this dictated the
work itself independent of actual skill.
 So, what we’re seeing in the changes in productivity is that we’re moving
from a type of environment in which a person came to acquire certain
skills, and these skills weren’t necessarily replaceable without a type of
training and a very extensive form of training to a period of time in which
machines mechanization technology itself began to make those types of
skills less and less necessary.
 As a result, it created a new question of how the person fits into this form
of production (3:48).
 So, at the point when humans became simply conduits of machine
production, they also present the primary weakness in the link of
production, and recognizing this, labor early on, was able to exert some
influence on capital through strikes and shirking, which effectively
diminished efficiency and production, and it would cost the owners of
capital, sometimes substantially.
 Taylor’s novelty is the invention of a middle actor, a middleman of sorts, what he labeled
the manager.
o Manager’s task was to orchestrate the work floor.
o Taylor was central to the invention of the manager and management itself, both
of which are late modern conceptions that contribute to the flourishing of
capitalism and industrial production.
o They lay the groundwork for the later systems of process control, such as
statistics and computerization.
o It would not fall on those who owned the means of productions (i.e., the owners
of capital), to ensure the output of machines and labor, this was Taylor’s great
insight, and the reason was quite simple.
 The skills of those who owned the means of production were not up to
the task
 The proper balance being sought between machines, tools, and labor
were the purview of other skill sets, and this was where Taylor saw the
role of the manager and of management as an activity.
 In Taylor’s scheme, the manager is the most active participant, the
one who bridges the understanding of efficiency and productivity,
which is the concern of owners and of work and activity that is the
province of labor.
 Workers must be properly suited to the work with which they are
tasked – must not be under or over qualified
o This is the primary task of the manager – to assign the
proper work to the proper people
o If a task required nothing more than menial labor, such as
the handling of pig iron, a person who is alert and
 intelligent would be unsuited for the work because of the
monotony of it.
o A more proper worker, as Taylor describes, would be stupid
and phlegmatic, meaning they are not looking for anything
fulfilling in the work they are doing. This is a direct quote
from Taylor’s work.
o Even the most menial of tasks are underscored, according
to Taylor, by a complex scientific principle that helps to
achieve maximal efficiency
o A point that cannot be understated is that Taylor believed
that it was incumbent upon managers to ensure that the
maximum efficiency was achieved, that managers would
impose the necessary rules and principles to compel the
most production out of workers.
 Taylor believed that one of the key tasks of a manager was to assign
individuals who are properly suited to work, the work that they were
properly suited for and also, that no matter what the actual task was,
even if it’s digging a hole, that the work has a best way of getting it done,
a one best way.
 Key Principle of scientific management: the one best way idea. That there is one best
way to achieve a task.
o Not only is it necessary that people are properly assigned to the work they are
cut out for, but also that the manager understands the best ways of doing all of
the tasks that are necessary for production.
 Taylor’s ideas came to be known as the principles of scientific management, sometimes
also referred to as Taylorism or simply scientific management, which are based upon 4
central principles

4 Principles of Scientific Management

1. The Methods of Work must be based upon a scientific study of the necessary tasks to
achieve a given objective (8:25)
a. This is to be done to the most detailed and minute level feasible.
b. This is the principle of one best way – that it is discoverable, how best to achieve
and do any given task, and that that is the subject of scientific study.
2. Workers should be selected, trained and continuously developed.
a. They should not be left to develop the skills on their own
b. This creates a role for the manager in developing the workers and to ensuring
these workers are properly suited to the tasks at hand.
3. Workers must be provided with detailed instruction and must be supervised
a. It is not allowed to just leave workers to their own power and their own
discretion.
b. They must be supervised at all times to ensure that they are doing the work as it
is scientifically demanded to be done.
4. Managers and workers must share in the work to be done.
 a. Managers must prepare, organize, and implement the principles in order to
achieve the work.
b. Workers must perform the required tasks
c. It is an important principle because it embeds the manager within production
itself because the manager is the one who knows how to do things best, even if
the manager is not directly doing it.
d. You can have one group who has to identify the fundamental principles and
another group who is asked only to execute those tasks and nothing more.
e. Here, what we have is a dichotomy between the manager and the worker that is
based upon a hierarchy and geared toward executing the necessary tasks at the
highest level of efficiency possible.
i. This is the type of relationship that was described when we discussed the
principal agent problem in accountability.
ii. The manager is tasked with nothing short of knowing and understanding
the standard practices that will ensure the highest level of efficiency, but
also of enforcing these standards and enforcing the cooperation of labor
fir its achievement.
iii. This was an expression of a very important shift in how a worker was to
be treated.
iv. Taylor summed up the shift in thinking in which the worker was no longer
autonomous to the workers own regulation of how to go about a job – it
was no longer up to the worker to determine how to get a job done.
v. Once that task had been assigned, it was no longer acceptable to simply
look at the output of the worker to determine how well the task had been
achieved.
vi. This idea was rejected in favor of the position that the manager
possessed some responsibility in production, that it was not left to the
worker alone, and that responsibility was nothing short of knowledge and
enforcement of the best way for the worker to execute the given task.
vii. You couldn’t simply look at a worker at the end of the day and make a
determination about how much he or she had done and then judge that
worker on that basis.
viii. This is where some of the confusion about Taylor comes in, because
Taylor’s concern here was not simply about maximizing production, but
also of allowing workers to have the conditions to ensure that they were
able to do their job to the best of their ability, and this was left up to the
manager.
ix. The manager was also responsible for production. That middleman role
was invented in order to ensure that the worker was properly assigned
and properly guided to get the work done.
f. We can think of this idea in Scientific Management as production-oriented
theory, the central concern is production.
Review the material from Schmidt that is cited in Frederick Taylor Scientific Management.
Frederick Taylor and Scientific Management (Part 2)

To recap, last lecture was a discussion of scientific management and the introduction of
Frederick Taylor, who was an important figure in early efficiency studies and in particular the
development of what we now have come to understand as the study of management and the
role of the manager.
As we left off, we began to think about the ideas that Taylor had as being focused on matters of
production and production orientation, and these are, in many respects, what we would
consider classical theories of organization and management, which prioritizes the idea of
production and efficiency.

The studies of scientific management also began to put a focus upon the role of the individual
and the person within the organization.

Scientific Management
 We can lay out more clearly what is meant by scientific management by reviewing a
small excerpt from Taylor’s work
 The central concern for scientific management is efficiency and production.
 In general, it tends to neglect the person that the individual, in the form of the worker,
because, in fact, the worker, in many respects, is seen metaphorically as very little more
than a machine, a person who in some cases could be considered too stupid even to
understand the simplest of tasks.
 It becomes the onus of the manager to help the worker understand the best way to
achieve the tasks that the worker is assigned.
 This point is underscored by Taylor’s account of the carrying of pig iron, which was
mentioned in the last lecture.
o Pig iron is an inter-product of the industrial production of smelting iron ore, and
it was used to produce wrought iron and eventually, it was used to produce steel
o In one of his most famous studies, Taylor observed a man named Schmidt, and
this man is a man that Taylor described as being ox-like.
o Now, the story, when you read it and listen to it, it’s astonishing because Taylor
and his fellow consultants discovered that the gang at Bethlehem Steel managed
to move, on average, twelve and one half tons of pig iron per day per man.
o They thought, by their calculations, that a single man in that group should be
able to handle about 4 times that much.
 This is today what we call shirking.
 What is meant by shirking is that individuals aren’t performing at their
optimal level.
 They may be doing it because of the divorce between what their
objectives are, which is primarily to get paid, and the objectives of the
employer, which is to maximize production.
 This is related to the principal agent problem that we discussed in the
context of accountability.
  So, this problem of shirking was one that it was up to the manager to
figure out how to deal with

 Schmidt
o Taylor had to figure out how to get a gang of individuals who moved 12.5 tons in
a day to now move 47 tons in a day
o To start the process, they selected a single individual, a man named Schmidt,
who was, in Taylor’s words, a man who valued the dollar.
o In the exchange between Taylor and Schmidt, you see that Taylor’s ideas are
clearly prioritizing production.
o Discussion begins by asking Schmidt or trying to position Schmidt to prioritize
what it is that Taylor determines the he wants, which is money.
o He asks Schmidt if he’s a high priced man, and even gets a bit annoyed at the
beginning of the discussion because Schmidt doesn’t seem to know where this
place is, he doesn’t know what a high-price man is, and Taylor is trying to define
it for him.
o Taylor says, If you’re a high-priced man is someone who wants to earn $1.85 per
day, or are you just satisfied with $1.15? The same as these cheap fellas are
getting?
o Taylor tells Schmidt how he can earn $1.85 per day
 Schmidt has to load the pig iron onto the car, and every day you do this,
you’ll get $1.85
 Schmidt agrees
 Taylor then turns toward scientific management, which is where the really
important contribution really is.
 Taylor says a high priced man has to do exactly as he’s told from morning
til night
 He’s already made Schmidt think he’s a high-priced man
 Then he’s telling him that a high-priced man has to do exactly
everything he’s told from morning til night.
 Schmidt is a rather dense fella
 Taylor points out the consultant and tells Schmidt that if he is a
high-priced man, he will follow exactly as this man tells him to do
tomorrow.
 Reiterates that there is “no back talk.” A high-priced man does just
what he is told to do and no backtalk.
 Taylor is trying to find a way to incentivize Schmidt to do the
things that Taylor and the team consider essential to production,
in this case, the movement of pig iron.
 Taylor sums it up that it is rather rough talk, and indeed it would
be if he were talking to an educated mechanic or even intelligent
laborer with a man of the mentally sluggish type like Schmidt, it is
appropriate and not unkind.
  It is effective in fixing his attention on the high wages, which he
wants and away from, his attention to impossibly hard work.
 This is an important part of Taylor’s ideas of scientific management and
really what made scientific management something that was palatable to
so many people in the early parts of the 20th century.
 Taylor and others aligned with scientific management sincerely believe
that their work and attempts to organize production were good not just
for capital ownership or managers, but for workers as well.
 It was an opportunity for workers to make more money and to do so by
figuring out the best ways to achieve the tasks that were sat before them.
 It may seems impossible for a worker like Schmidt to be able to move 4
times that amount of pig iron in a day, but with the insights of a manager
and with the guidance and direction of a manager, he can do exactly that,
and, as a consequence, make almost 50% more in a day than he had been
before.
 That’s the key here for Taylor.
 He’s trying to point to the fact that even these individuals who are
not particularly advanced in their understanding of the work can
be better off by this system of scientific management because of
their discovery of a “one best way.”
 Taylor’s objective is to get these men to maximize production and to do
so under the guidance of clear principles of what the tasks entail.
 For Schmidt, it was key to keep him properly rested and like a well-oiled
machine, he would work at maximum function.
 It was also key to induce Schmidt to do this work.
o The assumption is that productivity can be achieved when all tasks are viewed as
routine and scientifically grounded, and that is what the scientific aspect of
scientific management is really about, it’s discovering the routine activities that
optimize the act, the work and tasks that are required for any given assignment.
o And Taylorism garnered a tremendous amount of support because of this, and in
many respects it was the central management theory of the progressive era and
was subject to a number of different studies over multiple decades.
o One of the studies of scientific management was conducted at Hawthorne.

The Hawthorne Experiments (1924)

 An effort to conduct tests of sorts of the scientific management theory that there is
within the organization a manipulatable condition for maximum production.
 These studies began as an effort to study those classical theories, particularly scientific
management.
 Studies were done at the Hawthorne Works at the Western Electric Company in Cicero,
Illinois.
 First study was interested in the classical conditions for maximum production, essentially
testing to see how much illumination affected output
 Recall, scientific management seeks to discover the best conditions, activities, and
routine tasks that are necessary for production, so this comes down to things such as
illumination, temperature, rest, etc. These are all matters that need to be tested
scientifically according to the tenets of scientific management.
 First of these studies were looking at illumination experiments
o Performed to find out the effect of the different levels of illumination or lighting
on productivity of labor.
o The brightness of the light was increased and it was decreased to find out the
effect on the productivity of the test group.
o Surprisingly, over three years of study, the productivity increased even when the
level of illumination decreased.
o It was concluded that there were factors other than light that were important.
o Lighting was not essential to these tasks at all; productivity was not impacted by
lighting, so it led to a series of other studies.
 Thought that perhaps that individuals are being observed, and they are aware of the fact
that they are being observed and their behaviors are changing in accordance with this
observation.
 In 1927, they set up two small groups of female telephone relay assemblers and they
were selected.
o Each group was kept in separate rooms, and from time to time, there were
changes made to their working hours, rest periods, and lunch breaks.
o They were allowed to, in some cases, choose their own rest periods and to give
suggestions.
o Output increased in both control room
o Concluded that social relationships among workers, participation in decision
making, etc. had a greater effect on productivity than simply working conditions
o They were trying to understand whether or not these informal groups, through
which workers kind of developed relationships, seemed to have any effect on
productivity. These tests determined exactly that.
 Mass interviewing program that began in 1928
o 21,000 employees were interviewed over a three-year period to find out the
reasons for increased productivity.
o It was concluded that productivity can be increased if workers are allowed to talk
freely about matters that are important to them.
o So, it wasn’t that they were able to find some objective or independent factors
that were increasing productivity, but they found that the very act of talking with
workers increased productivity and gave managers and middlemen a better
understanding of the demands of productivity
 Fourth Study (1932) is known as the Bank Wiring Observation Room experiment.
o At this point, they’ve come up with some key hypothesis through these
Hawthorne experiments, and they are trying to better grasp what it is that’s
driving productivity.
 o Took a group of 14 male workers in the bank wiring room, and they were placed
under observation for four to six months in 1932.
o They determined they would tie a worker’s pay on the performance of the group
as a whole.
o They were trying to test the informal grouping and how the relationships among
the workers would affect actual pay.
o The hypothesis going into this was that individuals, as parts of the group, would
want to see the group produce as much as possible in order to increase their pay,
so they would find that the highest and most productive individuals would try to
induce and incentivize the lowest productive, the least productive individuals to
produce better, to produce more.
o They thought that the efficient workers would put pressure on the less efficient
workers to complete the work.
o Instead, what they found, was that the group established its own standards of
output and social pressure was actually used to achieve those standards of
output.
o As a group, they determined what was ana acceptable level of output and as a
consequence, individuals, even those predisposed to being more efficient, they
met the standards of output but did not exceed them.

 These studies generated what came to be known as the Hawthorne effect, and what the
Hawthorne effect describes, is somewhat simple, it’s the idea that being observed
changes behaviors, which became the most enduring concept from these Hawthorne
studies.
o Not really a clear consensus on what the effect is or what the cause of the effect
is.
o We don’t really have a good grasp on how it works, and this was demonstrated in
the other studies at the Hawthorne Works plant.
o Trying to get some kind of idea about how individuals having some involvement
in their work might have an effect on productivity
o A few years ago, Heidelberg did a study of 21 textbooks that mentioned the
Hawthorne effect and, of the 21 textbooks that just dealt with organizational
theory and organizational behavior, 13 of them included an explicit definition of
the Hawthorne effect. Others sort of mentioned it in passing.
 All 13 definitions included some reference to performance or behavior
change
 2 of the definitions indicated that this change was generally temporary or
brief, meaning that people only change their behavior as they are being
observed. One of the definitions of this type followed by the elaboration
of the psychological literature including the Hawthorne effects may last
anywhere from a few days to two years, depending on the situation.
  So there is at least some idea that this is an actual real effect in the
literature, but most definitions implicated a number of variables as being
the cause of the Hawthorne effects.
 9 of the 13 definitions talked about the participants’ knowledge of being
observed or being in an experiment, so they’re being reactive to the fact
that they’re being observed or in an experiment, and so they are
changing their behavior accordingly.
 6 of the 13 talked about how new or favorable treatment will have at
least a temporary effect upon productivity, so if you think about the very
fact that you are under supervisions, that might change your behavior,
but also, if suddenly conditions are changing, you might also change your
behavior and your productivity in some way
 Just the very idea of being paid attention to might change the way that
you act and behave.
o The real takeaway from this and other studies that focused upon scientific
management as it evolved was that there became a shift from thinking about the
person merely as a kind of machine like function within the organization to
seeing a person as a person in the organization.
 This was a shift away from what we would consider just a key focus on
the production by way of instruments, and the most important
instrument being the worker to production being kind of outcome of
actions by persons, not simply instruments.
 A shift from a central concern for the task to a concern for the worker.
 And a lot of this is captured in this idea that during these Hawthorne
experiments, they observed that just having some involvement or being
observed, individuals changed their behavior, in which case, they are not
simply being guided through on a task by task basis the way that scientific
management assumes can be optimal.
o We have a shift from a production-oriented theory to what would be considered
a person-oriented theory.
 In the person-oriented theory, we begin to see some attention to the idea
that a happy worker is also a productive worker.
 This calls into question some of those hierarchical models of decision
making that place the manager as the key participant in the system of
production, possessing knowledge about the best way to do things and
rather into a manager of people themselves.
 It’s calling to the ideas of informal groupings, of friendships, of networks
 The relationships people develop within the organization are also
important to the success of the organization.
 Think back the to interview study where they were doing the 21,000
interviews and how individuals responded to just the opportunity to
communicate their feelings.
  One of the studies that dealt in mail reports was the story of a worker
whose wife and daughter had died the night before, what they had
determined to be an unproductive day.
 It’s this idea that you can recognize this person and the fact that
the person has to deal with things outside of the organization and
that might have an impact on productivity.
 So it’s a shift from the task to the worker in particular to the
worker’s production,
 We start to see more emphasis on this kind of two-way
communication, where it’s not just a top-down flow of
information from the manager to the worker, but where
individuals are communicating with managers and trying to help
managers see the conditions of the workplace itself.
 We also start to see more emphasis on social relationships,
informal groupings.
 You start to see people talk about the organization as kind of a
unit, and later on, we start to hear this in the metaphor of the
family.
 The workplace or your coworkers are like a family, which is
speaking to this idea of these informal groupings, these social
relationships that arise out of these studies that focused more
upon the personal communications of opinions, complaints,
suggestions. All of these things increase the satisfaction and thus
they increase production.
 So, basically just giving individuals an opportunity to
communicate, to speak about what’s going on in the organization
actually leads to higher productivity.
 The priority remains upon the worker and the comfort and the
condition of the worker.
 A happy worker is also a productive worker; a happy worker leads
to higher levels of productivity.
o The Hawthorne experiments are sort of an enigma in the field because they call
attention to very important concepts, but they’ve also not been terribly useful in
the design of organizations, primarily because part of the reason was an
excessive shift away from production, which is, after all is said and done, the
purpose of the organization.
 The purpose of the organization is some kind of production to do
something, its mission oriented and also, perhaps wrongly, seemed to be
interpreted as a counter-theory to scientific management. To put that
idea to rest, the Hawthorne experiments were a study of scientific
management.
 What they found was that scientific management could not work if it
focused on too centrally upon simply task orientation and giving direction
 to individuals; there needed to be some relationship between the
manager and the worker, him or herself.
 In the next lecture, we’re going to pick up on the idea of it being a
counter theory to scientific with what’s known as Douglas McGregor’s
ideas of Theory X and Theory Y, because at this point in the middle of the
20th century, management and the role of the manager becomes a widely
accepted function within economy and society.
 People began to ask questions about the managers themselves and began
to study and understand how the manager could affect production
directly, given not just their expertise in a field and some task, but also
the relational role that a manager held.
Frederick Taylor and Scientific Management (Part 3)

By the middle of the 20th century, we start to see a correction to the rather intense focus upon
production in the start of the 20th century of scientific management.
This correction is to pay greater attention to the role of the organization with respect to the
person and puts a greater emphasis upon regarding the individual within the organization as a
person in and out of him or herself.

People began to ask more questions about the role of the manager as well; this idea of the
manager, this role of the manager was largely invented in conjunction with scientific
management. It was the creation of this position by the logic of scientific management that
really distinguished it as a new way of thinking about organizations and how organizations
function both within public and the private sector.

At this time, you begin to see people actually studying this more carefully, studying
management itself, which makes sense in a lot of respects. If you think about the idea of
scientific management as being proposed as a scientific enterprise within the academy, but also
within the practical consulting realm.

Douglas McGregor
 Management scholar at MIT
 Came up with the idea of Theory X and Theory Y
o He coined these terms because what he was trying to understand was not so
much the role of the worker within the organization, but this new role of the
manager
o He wanted to understand the manager’s role a little bit more deliberately.
o The ideas of Theory X and Theory Y actually apply to a description of two sets of
beliefs that a manager might hold about the origins of human behavior.
o What we see is now an obvious attention upon human behavior, which was
implicit within scientific management.
 The reason it was implicit within scientific management is that it was
believed by Taylor and many of those who initially followed his ideas of
scientific management, that the key was inducing individuals to do the
tasks that they would otherwise find themselves somewhat straying from
 The way to induce them to do so was largely with pay.
 So, it was this idea of incentives as a monetary scheme, but by the middle
of the 20th century, particularly, we started to see this kind of after the
human relations shift through the Hawthorne experiments, we began to
have questions about the manifold ways that people can be induced to
work within the organization and there was more and more attention
upon human behavior itself.
 While we did regard the manager as being a key role in the production of
an organization, by the middle of the 20th century people began to ask
 questions about the beliefs that the managers themselves and how those
beliefs might have a relationship or impact upon the organization
o Theory X and Theory Y are speaking to the ways that managers view individuals
within the organization.
 This is about the origins of human behavior and it’s how the manager
views human behavior itself
 Theory X
o Assumptions align with what we have closely been discussing in terms of the
classical theories, what we would consider to be classical scientific management
o Scientific management advocated for prediction and control primarily because it
saw the work environment in terms of this principle-agent competition, where
the principal needed to figure out how to get the agent to do the things that the
principal knew needed to get done for the better production of the organization
o Workers might not have the same objectives as the managers, but the managers
were the ones who were responsible for developing the tools and the
frameworks for getting the most out of the worker.
o Think back to Schmidt and the way that Taylor portrayed Schmidt.
 This isn’t a person who is particularly thoughtful about his work, but he is
someone who can be brought to the viewpoints of the manager through
a portrayal of him as a high-priced man.
 This idea that Schmidt could be induced to work for more money, and
that is largely what is driving Schmidt
 So, the key here is, how do you get the most out of the worker?
 And the manager has to have the tools for doing exactly that.
o According to Theory X, people generally want to avoid responsibility and they
generally just want security, so the techniques of management are coercion,
whether through incentives or through punishment.
o Theory X type manager doesn’t really want to give individuals more responsibility
or give them opportunities for involvement or participation within the
organization
o Manager X isn’t really about making the individuals feel as though they are part
of the organization in any way.
o What the Theory X type manager thinks is that these are individuals who are
looking primarily for security, they see the job as just that, as a job.
o So, what we need in order to get them to succeed for the organization is to
incentivize them, to coerce them, through incentives or through punishment.
 Theory Y Managers
o Take somewhat of a different approach, now a markedly different approach for a
theory Y manager, there is this recognition that external control and punishment
are not the only strategies.
o It’s very important that both managers and the workers recognize a joint
commitment to the objectives and that workers understand what the broader
 objectives are within the organization so that they feel as though they are a part
of something.
o People, according to a Theory Y manager, actually seek responsibility and they
would exercise imagination and ingenuity in solving their problems
o The key here is that an organization needs to find ways to cater to those types of
individuals that seek responsibility and use their imagination to solve problems.
o The idea from the Theory Y perspective is that the classical theory or basically
theory x, underutilizes the average potential of a person because individuals have
more capabilities and abilities than a manager perhaps even knows.
o If all the manager is doing is catering to the security of the individual and not
giving the individual an opportunity to be part of the production of the
organization, you may in fact be underutilizing that individual.

McGregor pointed out that a manager’s own behavior, think in terms of how a manager
approaches his or her work, would largely be determined by the particular beliefs that he or she
subscribes to. McGregor hoped that this work would lead managers to investigate these two
sets of beliefs. What McGregor was pointing out is that, in the broader discourse of
organizational theory and management at the time, there were two ways of approaching the
worker, Theory X and Theory Y.

McGregor was hoping that if managers began to internalize these ideas to recognize the extent
to which they were Theory X or Theory Y, they may start to invent other ways of relating to the
organization and to the workers themselves.
 They may begin to test out assumptions that were underlying them.
 They may start to develop new managerial strategies that made sense in terms of those
tested views of reality.
 That is not what happened.
o Instead, what McGregor’s ideas became was a way of advocating for a Theory Y
as a new and superior ethic.
o McGregor never himself actually argued that Theory Y was a superior ethic or a
superior way of relating to workers.
o He was simply offering an alternative, a different way from Theory X, just like
Theory X was a different way from Theory Y.
o Largely what came from Theory X and Theory Y idea was a norm, a set of moral
values that ought to replace the values that managers usually accept
o What you began to see was that people called for more Theory Y type
arrangements
 What McGregor was actually after was to expose how assumptions about human
behavior determines managerial style.
o He was trying to show that the way people viewed other individuals determined
in a lot of ways, what kinds of managers they actually were, and he saw that
there were these two kinds of prevailing frameworks, what he called Theory X
and Theory Y.
 o Instead, what we began to see was a bigger push for more Theory Y type
organizations or managers within these organizations.
o So, the Theory Y idea is aligned very much with the ideas that derived from the
Hawthorne experiments, and they became what is known as the human relations
approach or the human relations movement within organizations and
organizational theory and in management.
 The human relations movement identified a lot of problems with what we would
consider the classical theories, and one of them was that individuals actually did prove
to be more productive when they were happy and more comfortable within
organizations, that they weren’t simply instruments of production.
o It was also criticized based upon the terms of scientific management because it
didn’t really create a very structured way for setting up systems of control within
organizations, even if that meant trying to include human relations
o It was criticized because it simply seemed to be an insufficient bass for organizing
society,
o The humans relation approach did not have a good, prescriptive model for how
to maximize production within organizations.
 What McGregor did was he called attention to the assumptions, calling attention to the
assumptions behind both theory Y and Theory X, the classical and human relations
theory, as the basis of these two competing theories.
 McGregor says there is validity to each of the theories, otherwise they would not endure
 Neither of these theories, as he put it, was a prescription for success because what
they’re really about is characterizing the management’s behavior and providing a
heuristic by which to judge management
 In doing this, what McGregor was trying to do was show ways that managers and
management teams can learn
o This created a tremendous number of complications within organizations
o It’s no surprise that out of this arose what came to be considered a new theory
of human organization and intersection, one that would, as McGregor has hoped,
find ways that both appealed to the human relations side of things, recognizing
that each individual has their own unique potential, but also recognizing that
production required systems of prediction and control.
o This theory, this idea that we see arise begins kind of later in the 20th century,
and it is called human resource management, which really begins to take hold in
the 1980s