Ch 2 the Management Movement

8/22/2019 Ch 2 the Management Movement

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Theories of Management

The Evolution of Management


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What Youll Learn

How the Industrial Revolution created a

new need for management.

How the captains of industry of the lastcentury created huge empires.

The principles of Scientific Management.

The results of the Hawthorne studies onworker productivity.

Maslows Hierarchy of Needs


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What Youll Learn contd

The difference between Theory X, Y, and Z What TQM stands for and Demings 14 pts

Centralization and Decentralization

Japanese management concepts andAmerican management practices

Becoming familiar with modern management

principles will help you understand howbusinesses function in todays environment.


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The Industrial Revolution

Refers to the period during which a countrydevelops an industrial economy. In Europe theIndustrial Revolution began in the eighteenth

century; in the United States, it began around1860, just before the Civil War.

Before the Industrial Revolution, the US economywas based on agriculture. Most people worked on

small farms, using only simple technology, suchas horse-drawn plows. Professional managerswere not needed because most people worked forthemselves.


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Captains of Industry

Toward the end of the nineteenth century,powerful business people who created enormousbusiness empires dominated and shaped the USeconomy. These captains of industry includedJohn D. Rockefeller (oil), JP Morgan (banking),

Andrew Carnegie (steel) and Cornelius Vanderbilt(steamships and railroads).

During this period entrepreneurs foundedcompanies that later became industrial giants.

One of these companies was Bethlehem Steel. In1863, the company began producing the first ironrailroad rails; by 1899, it was selling almost $1trillion worth of iron and steel products in a year.


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Management History

By the late 1800s, the US economy depended

largely on industries such as oil, steel, railroads,

and manufactured goods.

Many people left their farms to take jobs infactories, where professional managers supervised

their work.

The new industrial enterprises that emerged in thenineteenth century demanded management skills

that had not been necessary earlier.


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Scientific Management

Frederick Winslow Taylor(1856-1915) was the

father of Scientific Management. When he was

working as an apprentice at the Midvale steel

company, he noticed that most workers did notwork as hard as they could. To increase

efficiency, Taylor tried to figure out the one

best way to perform a particular task. To do so,

he used a stop watch to determine which methodwas the most efficient. These studies were

known as Time and Motion Studies.


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Taylors scientific management was

based on four main ideas:

1. Jobs should be designed according to

scientific rules rather than rule-of-thumbmethods. Employers should gather,

classify, and tabulate data in order to

determine the one best way ofperforming a task or series of tasks.


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2. Employees should be selected and trained

according to scientific methods. Employersshould also train employees in order to

improve their performance.

3. The principles of scientific management

should be explained to workers.

4. Management and workers should be

interdependent so that they cooperate.


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Abraham H. Maslow

1908-1970Maslow was a psychologist who developed a theory

of motivation. His ideas had a significant impact

on management. Maslow believed that

individuals fulfill lower-level needs beforeseeking to fulfill higher-level needs. That is,

people satisfy their need for food before they seek

self-fulfillment. Because one set of needs must be

met before another is sought, Maslow referred tothis as a hierarchy of needs.


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Maslows Theory


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Applying Maslows Theory to

ManagementAt the lowest level, workers are motivated by basic needs,

such as the needs for wages or salary. Basic needs also

include the physical conditions in which a person works,

such as heating, lighting, and noise.

Once these basic needs are met, employers can address the

next level of needssafety or security needs. Some of

these security needs can be met by providing employees

with insurance, retirement benefits, and job security.

Employees need to know that in the workplace, they aresafe from physical, psychological, or financial harm.


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Managers meet workers social needs by providingwork environments in which colleagues interact

by providing opportunities for co-workers tosocialize with one another by providing lunchrooms or allowing employees to attend companyretreats.

Status needs can be met by providing employeeswith signs of recognition that are visible to others,such as job titles, awards, designated parkingspaces, and promotions.

Managers can meet employees need forself-fulfillment by providing them with opportunitiesto be creative at work or allow them to becomeinvolved in decision making.


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Theory X

MIT Professor Douglas McGregor

Theory Xassumes that people are basically

lazy and will avoid working if they can. Tomake sure that employees work, Theory X

managers impose strict rules and make sure

that all important decisions are made only

by them.


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Theory Y

Theory Y assumes that people find

satisfaction in their work. Theory Y

managers believe that people are creative

and will come up with good ideas if

encouraged to do so. They tend to give

their employees much more freedom and let

them make mistakes.


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Theory Z

William Ouchi, a management researcherdeveloped this new theory of managementin the 1980s

Theory Z is a business management theorythat integrates Japanese and Americanbusiness practices. The Japanese business

emphasis is on collective decision making,whereas the American emphasis is onindividual responsibility.


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Japanese Type Organization

1. Lifetime employment

2. Collective decision making

3. Collective responsibility

4. Slow evaluation and promotion

5. Implicit (understood, implied) controlmechanisms

6. Non-specialized career path

7. Holistic concern for employee as a person


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American Type Organization

1. Short-term employment

2. Individual decisionmaking

3. Individual responsibility

4. Rapid evaluation and promotion

5. Explicit (clear, precise, unambiguous) control

mechanisms

6. Specialized career path

7. Segmented concern for employee as an

employee.


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Theory Z Type Organization

1. Long-term employment

2. Consentual, participative decision-making

3. Individual responsibility

4. Slow evaluation and promotion

5. Implicit, informal control with explicit,formalized measures

6. Moderately specialized career path

7. Holistic concern, including family


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The Hawthorne Effect

The result of an experiment conducted at the

Hawthorne plant of Western Electric in Cicero,

Illinois in 1924. They lowered the lighting in the

factory, expecting productivity to fall; but instead,to their astonishment, productivity increased.

The researchers concluded that productivity rose

because workers worked harder when they

received attention. This phenomenon, in which

change of any kind increases productivity, has

been known as the Hawthorne Effect.


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TQMTotal Quality

Management Result of study conducted in the 1950s by W.

Edwards Deming who began studying howcompanies ensure that the products they produceare not defective. He came up with amathematically based approach to quality controlthat became known as Total Quality Management,which is a system of management based oninvolving all employees in a constant process of

improving quality and productivity by improvinghow they work. This approach focuses on totallysatisfying both customers and employees.


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TQMDemings Fourteen Points

1. Create consistent purpose for improvingproducts and services in order to remaincompetitive.

2. Adopt a new philosophy. We are now living in

a new economic age.3. Stop depending on mass inspection. Require

instead that quality is built in.

4. Consider quality as well as price in awarding

business.5. Constantly improve the system of production

and service.

6. Institute a vigorous program of job training.


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Demings 14 points contd

7. Adopt and implement leadership. Focus onquality, not productivity.

8. Drive out fear so that everyone may work

effectively.9. Break down barriers between departments.

10. Eliminate numerical goals, posters, slogans, forthe work force that ask for new levels of

productivity without providing new methods.11. Eliminate work standards that prescribe

numerical quotas.


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Demings 14 points contd

12. Remove barriers that stand between the hourly

worker and his or her right to pride of

workmanship.

13. Encourage education and self-improvement foreveryone.

14. Create a structure in top management that will

work every day to achieve the above 13 points.

Most companies that have adopted TQM found that

the performance of their companies improved.


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International Management

Thailand

The social culture of Thailand has given rise

to highly centralized corporations with strict

lines of authority. Self-managed teams

would not be a viable management style

because workers are used to taking direction

from leaders whose authority is absoluteand based on status.


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Japanese Management Practices

Japanese managers encourage more employee

participation in decision making.

Japanese managers show deeper concern for

the personal well-being of their employees.

Rather than present their workers with

demands, Japanese managers tend to

facilitate decision making by teams of

workers.


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Japanese Business Practices contd

Japanese business practices have been successfullyexported to the United States at Hondas plant inMarysville, Ohio. Unlike most American plants,where there is a clear distinction between workersand managers, all Honda employees areempowered to make decisions. As a result, Hondaemployees are energetic and committed to

producing high-quality products. They turn out

one Honda Accord per minute. This high level ofproductivity is attributed to several innovative(new, original, groundbreaking) management

practices, where workers are organized by teams

rather than by function.

HERZBERGS


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HERZBERGS

Motivation-Hygiene Theory

Psychologist Frederick Herzberg believed that:

Intrinsicnatural, realfactors are related tojob satisfaction &

Extrinsic factors are related to job

dissatisfaction.


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Herzbergs Theory contd

On the other hand, when employees were

dissatisfied, they tended to cite extrinsic factors

such as company policy and administration,

supervision, interpersonalrelationships, andworking conditions.

Herzberg suggested emphasizing motivators

those factors that increase job satisfaction, such asrecognition and growth.


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Hygiene Factors

Herzbergs term for factors such as: Working conditions and Salarywhen these factors

are adequate, people will not be dissatisfied, butneither will they be satisfied.

These factors may eliminate job dissatisfaction butdo not necessarily increase job satisfaction.

Herzberg proposed that his findings indicate that theopposite of satisfaction is no satisfaction and the

opposite of dissatisfaction is no dissatisfaction.


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Herzbergs Theory

He believed that an individuals attitude toward

his or her work can very well determine success or

failure

Intrinsic factors such as achievement, recognition,and responsibility were related to job satisfaction

When people felt good about their work, they

tended to attribute these characteristics to

themselves.


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David McClellands

Three-Needs Theory

The three needs are the major motives in work:

The need forAchievement: (nAch) The drive to excel,

to achieve in relation to a set of standards, and to strive

to succeed. The need forPower: (nPow) The need to make others

behave in a way that they would not have behaved

otherwise.

The need forAffiliation: (nAff) The desire for friendlyand close personal relationships.


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Findings of McClellands Theory McClelland found that some people have a compelling drive

to succeed for personal achievement rather than for therewards of success.

High achievers perform best when they perceive that theyhave a 50-50 chance of success.

They dislike gambling when the odds are high because theyget no satisfaction from happenstance (fluke or accidental)success

They also dislike low odds (high probability of success)because then there is no challenge to their skills.

They like to set goals that stretch themselves a little.


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J. Stacey Adams Equity Theory

Adams theory that employees perceive what they

get from a job (outcomes) in relation to what they

put into it (inputs) and then compare their input-

outcome ratio with the input-outcome ratios ofrelevant others.

If workers compare themselves, a state of equity

exists.

They believe that their situation is fairthat

justice prevails.

Ch 2 the Management Movement

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