MGT 200 Management Theory n Required Reading: Chapter 2 of textbook Peter Senge Article Meg Wheatly Interview n Today’s Topic: History of Management Theory.

MGT 200 Management Theory

Required Reading:

Chapter 2 of textbook

Peter Senge Article

Meg Wheatly Interview Today’s Topic: History of Management

Theory

Learning Objectives

Know the basic premises of six management theories

Understand the context for the evolution and 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

Management Theories/Concepts

Division of Labor Scientific Management Administrative Theories Behavioral Theory Chaos Theory Contingency Theory

Division of Labor

Adam Smith: “The Wealth of Nations” Premise: Increase productivity by breaking

down jobs into narrow, repetitive tasks

Scientific Management

Management practices should be based on fact and observation

Focuses on the relationship between individual workers and their tools or machines

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

Assessing Scientific Management

Many aspects used today Misreads human side of work Simple tasks and clear rules don’t

guarantee results

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

Fayol’s Administrative Principles

1. Division of labor

2. Authority to give orders

3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of individual interest

7. Remuneration: pay for work done

8. Centralization

9. Scalar chain

10. Order

11. Equity

12. Stability and tenure of staff

13. Initiative

14. Esprit de corps

Bureaucratic Management

Formal system of rules and procedures Impersonality Hierarchical structure with detailed

authority Clear division of labor Rationality Career commitment

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

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

Hawthorne Studies

A “scientific theory” study that provided strong support for the behavioral viewpoint

The Hawthorne Effect: Productivity is likely to increase when employees are given special attention regardless of whether working conditions change

The social environment of employees also greatly influences productivity

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

Behavioral Theory Assessment

Adds greatly to the mechanistic view of managing people

But human relation skills alone won’t guarantee increased productivity or high quality work

Managing the human aspects of an organization is a very complex task

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 into structure without any externally imposed plan

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

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

Contingency Viewpoint

There is no best way to manage in all situations

Use the different management viewpoints as appropriate to deal with various situations

Managers must be able to diagnose and understand a situation thoroughly

Contingency Viewpoint

Basic contingency variables:– External environment– Technology– Individuals

Importance of each variable depends on type of situation and problems being faced

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

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

What’s Next?

Current Trends and Issues in Management Read Chapter 2: pages 40-53 Read Senge handout on Systems Thinking