LEARNING OUTLINE

Follow this Learning Outline as you read and study this chapter.
o Historical Background of Management
• Explain why studying management history is important.
• Describe some early evidences of management practice.

• Scientific Management
• Describe the important contributions made by Fredrick W.
Taylor and Frank and Lillian Gilbreth.
• Explain how today’s managers use scientific
management.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
oGeneral Administrative Theorists
• Discuss Fayol’s 14 management principles.
• Describe Max Weber’s contribution to the general
administrative theory of management.
• Explain how today’s managers use general administrative
theory.

oQuantitative Approach to Management

• Explain what the quantitative approach has contributed to
the field of management.
• Discuss how today’s managers use the quantitative
approach.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
•Toward Understanding Organizational Behavior
• Describe the contributions of the early advocates of OB.
• Explain the contributions of the Hawthorne Studies to the
field of management.
• Discuss how today’s managers use the behavioral
approach.

oThe Systems Approach

• Describe an organization using the systems approach.
• Discuss how the systems approach is appropriate for
understanding management.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.
oThe Contingency Approach
• Explain how the contingency approach differs from the
early theories of management.
• Discuss how the contingency approach is appropriate for
studying management.

oCurrent Issues and Trends

• Explain why we need to look at the current trends and
issues facing managers.
• Describe the current trends and issues facing managers.

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Historical Background of Management
• Ancient Management
 Egypt (pyramids) and China (Great Wall)
 Venetians (floating warship assembly lines)
• Adam Smith
 Published “The Wealth of Nations” in 1776
 Advocated the division of labor (job specialization) to
increase the productivity of workers
• Industrial Revolution
 Substituted machine power for human labor
 Created large organizations in need of management

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Development of Major Management Theories

Exhibit 2.1
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Major Approaches to Management
• Scientific Management
• General Administrative Theory
• Quantitative Management
• Organizational Behavior
• Systems Approach
• Contingency Approach

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Scientific Management
• Fredrick Winslow Taylor
 The “father” of scientific management
 Published Principles of Scientific Management (1911)
 The theory of scientific management
– Using scientific methods to define the “one best way” for a
job to be done:
• Putting the right person on the job with the correct tools
and equipment.
• Having a standardized method of doing the job.
• Providing an economic incentive to the worker.

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Taylor’s Five Principles of Management

1. Develop a science for each element of an individual’s work, which

will replace the old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
4. Divide work and responsibility almost equally between
management and workers.
5. Management takes over all work for which it is better fitted than
the workers.

Exhibit 2.2
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Scientific Management (cont’d)
• Frank and Lillian Gilbreth
 Focused on increasing worker productivity through
the reduction of wasted motion
 Developed the microchronometer to time worker
motions and optimize performance
• How Do Today’s Managers Use Scientific
Management?
 Use time and motion studies to increase productivity
 Hire the best qualified employees
 Design incentive systems based on output

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General Administrative Theorists
• Henri Fayol
 Believed that the practice of management was distinct
from other organizational functions
 Developed fourteen principles of management that
applied to all organizational situations
• Max Weber
 Developed a theory of authority based on an ideal
type of organization (bureaucracy)
 Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism

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Fayol’s 14 Principles of Management
1. Division of work. 7. Remuneration.
2. Authority. 8. Centralization.
3. Discipline. 9. Scalar chain.
4. Unity of command. 10. Order.
5. Unity of direction. 11. Equity.
6. Subordination of 12. Stability of tenure
individual interest of personnel.
to the interests of
13. Initiative.
the organization.
14. Esprit de corps.
Exhibit 2.3
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Weber’s Ideal Bureaucracy

Exhibit 2.4
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Quantitative Approach to Management
• Quantitative Approach
 Also called operations research or management
science
 Evolved from mathematical and statistical methods
developed to solve WWII military logistics and quality
control problems
 Focuses on improving managerial decision making by
applying:
 Statistics,
optimization models, information models, and
computer simulations

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Understanding Organizational Behavior
• Organizational Behavior (OB)
 The study of the actions of people at work; people are
the most important asset of an organization
• Early OB Advocates
 Robert Owen
 Hugo Munsterberg
 Mary Parker Follett
 Chester Barnard

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The Hawthorne Studies
• A series of productivity experiments conducted
at Western Electric from 1927 to 1932.
• Experimental findings
 Productivity unexpectedly increased under imposed
adverse working conditions.
 The effect of incentive plans was less than expected.
• Research conclusion
 Social norms, group standards and attitudes more
strongly influence individual output and work behavior
than do monetary incentives.

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Early Advocates of OB

Exhibit 2.5
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The Systems Approach
• System Defined
 A set of interrelated and interdependent parts
arranged in a manner that produces a unified whole.
• Basic Types of Systems
 Closed systems
 Are not influenced by and do not interact with their
environment (all system input and output is internal).
 Open systems
 Dynamically interact to their environments by taking in
inputs and transforming them into outputs that are
distributed into their environments.

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The Organization as an Open System

Exhibit 2.6
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Implications of the Systems Approach
• Coordination of the organization’s parts is
essential for proper functioning of the entire
organization.
• Decisions and actions taken in one area of the
organization will have an effect in other areas of
the organization.
• Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.

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The Contingency Approach
• Contingency Approach Defined
 Also sometimes called the situational approach.
 There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
 Organizations are individually different, face different
situations (contingency variables), and require
different ways of managing.

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Popular Contingency Variables
• Organization size
• Routineness of task technology
• Environmental uncertainty
• Individual differences

Exhibit 2.7
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Current Trends and Issues
• Globalization
• Ethics
• Workforce Diversity
• Entrepreneurship
• E-business
• Knowledge Management
• Learning Organizations
• Quality Management

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Current Trends and Issues (cont’d)
• Globalization
 Management in international organizations
 Political and cultural challenges of operating in a
global market
• Ethics
 Increased emphasis on ethics education in college
curriculums
 Increased creation and use of codes of ethics by
businesses

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A Process for Addressing Ethical Dilemmas

Step 1: What is the ethical dilemma?

Step 2: Who are the affected stakeholders?

Step 3: What personal, organizational, and

external factors are important to
my decision?

Step 4: What are possible alternatives?

Step 5: Make a decision and act on it.

Exhibit 2.8
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Current Trends and Issues (cont’d)
• Workforce Diversity
 Increasing heterogeneity in the workforce
 More gender, minority, ethnic, and other forms of
diversity in employees
 Aging workforce
 Older employees who work longer and do not retire
 The increased costs of public and private benefits for
older workers
 An increasing demand for products and services related
to aging.

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Current Trends and Issues (cont’d)
• Entrepreneurship Defined
 The process whereby an individual or group of
individuals use organized efforts to create value and
grow by fulfilling wants and needs through innovation
and uniqueness.
• Entrepreneurship process
 Pursuit of opportunities
 Innovation in products, services, or business methods
 Desire for continual growth of the organization

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Current Trends and Issues (cont’d)
• E-Business (Electronic Business)
 The work preformed by an organization using
electronic linkages to its key constituencies
 E-commerce: the sales and marketing component of
an e-business
• Categories of E-Businesses
 E-business enhanced organization
 E-business enabled organization
 Total e-business organization

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Categories of E-Business Involvement

Exhibit 2.9
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Current Trends and Issues (cont’d)
• Knowledge Management
 The cultivation of a learning culture where
organizational members systematically gather and
share knowledge with others in order to achieve
better performance.
• Learning Organization
 An organization that has developed the capacity to
continuously learn, adapt, and change.

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Learning Organization versus Traditional
Organization

Exhibit 2.10
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Current Trends and Issues (cont’d)
• Quality Management
 A philosophy of management driven by continual
improvement in the quality of work processes and
responding to customer needs and expectations
 Inspired by the total quality management (TQM) ideas
of Deming and Juran
 Quality is not directly related to cost

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What is Management Quality?

Intense focus on the customer

Concern for continual improvement
Process-focused
Improvement in the quality of everything
Accurate measurement
Empowerment of employees

Exhibit 2.11
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