MGT200 Chapter 2A

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MGT 200 Management Theory

Required Reading:

Chapter 2 of textbook

Peter Senge ArticleMeg Wheatly Interview

Today’s Topic: History of Management

Theory

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Learning Objectives

Know the basic premises of six

management theories

Understand the context for the evolutionand development of these theories

Know the basic concepts of several current

trends in management Explore three forces that are changing the

context for managerial work today

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Management Theories/Concepts

Division of Labor

Scientific Management

Administrative Theories Behavioral Theory

Chaos Theory

Contingency Theory

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Division of Labor

Adam Smith: “The Wealth of Nations” 

Premise: Increase productivity by breaking

down jobs into narrow, repetitive tasks

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Scientific Management

Management practices should be based

on fact and observation

Focuses on the relationship between

individual workers and their tools or

machines

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Scientific Management

Frederick Taylor

 –  There is “one best way” to perform a task

 –  Time and motion studies –  Money motivates employees to do their best

Frank and Lillian Gilbreth

 –  Followers of Taylor

Henry Gantt

 –  Control systems for production scheduling

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Assessing Scientific Management

Many aspects used today

Misreads human side of work

Simple tasks and clear rules don’t

guarantee results

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Administrative Theories

Focus on managers and their behavior

Henri Fayol, French industrialist 

 –  Management is a discipline with

 principles that can be taught

Max Weber

 –  Developed the concept of “bureaucracy”

as the ideal structure for an organization

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Fayol’s Administrative Principles 

1. Division of labor

2. Authority to give orders

3. Discipline4. Unity of command

5. Unity of direction

6. Subordination of

individual interest

7. Remuneration: pay for

work done

8. Centralization

9. Scalar chain

10. Order11. Equity

12. Stability and tenure

of staff

13. Initiative

14. Esprit de corps

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Bureaucratic Management

Formal system of rules and procedures

Impersonality

Hierarchical structure with detailedauthority

Clear division of labor

Rationality

Career commitment

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Assessing Administrative Theories

Managers still use many of Fayol’s principles 

Overemphasizes the rational behavior of

managers Advantages & disadvantages of bureaucracy

 –  Benefits: efficiency, consistency

 –  Costs: rigid, slow, difficult to adapt

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Behavioral Theory

Focuses on the human aspects of organizations

Mary Parker Follet

 –  Management is a dynamic process –  Workers should be involved in decisions

Chester Barnard

 –  Organizations are social systems –  Managers need “buy-in” of employees 

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Hawthorne Studies

A “scientific theory” study that provided

strong support for the behavioral viewpoint

The Hawthorne Effect: Productivity islikely to increase when employees are given

special attention regardless of whether

working conditions change  The social environment of employees also

greatly influences productivity

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Behavioral Theory

Basic Assumptions

 –  Employees are motivated by social needs

 –  Social forces exerted by peers is strong –  Employees respond to managers who help them

satisfy their needs

 –  Managers need to coordinate the work of

subordinates democratically to improve

efficiency

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Behavioral Theory Assessment

Adds greatly to the mechanistic view of

managing people

But human relation skills alone won’tguarantee increased productivity or high

quality work

Managing the human aspects of anorganization is a very complex task

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Chaos Theory

Margaret Wheatley, 1992

Look at an organization as a living

organism Learn management from natural systems

Basic Premise: Self-organization

 –  the tendency of living systems to organize intostructure without any externally imposed plan

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Chaos Theory Principles

Information access

 –  Everyone has easy access to all the information

they need to do their job

Relationships

 –  Everyone has easy access to anyone they need

to do their job

Self-reference

 –  The organizations core identity or purpose

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Chaos Theory Assessment

Goes against many traditional beliefs about

role of managers

Requires educated, involved employees Requires change in communication methods

Clear vision/joint purpose is crucial

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Contingency Viewpoint

There is no best way to manage in all

situations

Use the different management viewpoints asappropriate to deal with various situations

Managers must be able to diagnose and

understand a situation thoroughly

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Contingency Viewpoint

Basic contingency variables:

 –  External environment

 –  Technology –  Individuals

Importance of each variable depends on

type of situation and problems being faced

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Assessing the Contingency

Viewpoint

Useful approach - makes sense to change

viewpoint depending on situation

Most managers use intuitively Diagnosis very important to determine best

approach

Many don’t consider to really be a “theory”of management

 –  just draws on other theories

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Management Theories Summary

Division of Labor - Adam Smith

Scientific Management - Taylor, Gilbreths, Gantt

Administrative Theories - Fayol, Weber

Organizational Behavior  - Follett, Barnard

Chaos Theory - Wheatley

Contingency Theory

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What’s Next? 

Current Trends and Issues in Management

Read Chapter 2: pages 40-53

Read Senge handout on Systems Thinking