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TwoManagement Yesterday and Today1. HISTORICAL BACKGROUND OF MANAGEMENT.There are many examples from past history that illustrate how management has been practiced for thousands of years.The Egyptian pyramids and the Great Wall of China are good examples of projects of tremendous scope and magnitude that employed tens of thousands of people. How was it possible for these projects to be completed? The answer is management. Regardless of what managers were called at the time, someone had to plan what was to be done, organize people and material, lead and direct the workers, and impose controls to ensure that things were done as planned.Other examples of early management practices can be seen at the Arsenal of Venice. For instance, assembly lines, accounting systems, and personnel functions are just a few of the processes and activities in organizations at that time that are also common to today’s organizations. Organizations and managers have been around for thousands of years.Adam Smith, author of the classical economics doctrine, The Wealth of Nations, argued brilliantly about the economic advantages that division of labor (the breakdown of jobs into narrow, repetitive tasks) would bring to organizations and society.The Industrial Revolution can be thought of as possibly the most important pre-twentieth-century influence on management. The introduction of machine powers, combined with the division of labor, made large, efficient factories possible. Planning, organizing, leading, and controlling became necessary.Exhibit 2.1 presents six major approaches to management.2. SCIENTIFIC MANAGEMENT.Scientific management is defined as the use of the scientific method to define the “one best way” for a job to be done.A. Important ContributionsFrederick W. Taylor is known as the “father” of scientific management.Taylor’s work at the Midvale and Bethlehem Steel companies motivatedhis interest in improving efficiency.a. Taylor sought to create a mental revolution among bothworkers and managers by defining clear guidelines forimproving production efficiency. He defined fourprinciples of management (Exhibit2.2).b. His “pig iron” experiment is probably the most widelycited example of scientific management.c. Using his principles of scientific management, Taylorwas able to define the one best way for doing each job.d. Overall, Taylor achieved consistent improvements inproductivity in the range of 200 percent. He affirmed therole of managers to plan and control and of workers toperform as they were instructed.2. Frank and Lillian Gilbreth were inspired by Taylor’s work andwent on to study and develop their own methods of scientificmanagement.a. Frank Gilbreth is probably best known for hisexperiments in reducing the number of motions inbricklaying.b. The Gilbreths were among the first to use motion picturefilms to study hand and body motions in order toeliminate the wasteful ones.c. They also devised a classification scheme to label 17basic hand motions called therbligs.B. How Do Today’s Managers Use Scientific Management?The guidelines that Taylor and others devised from improvingproduction efficiency are still used in organizations today. Currentmanagement practice isn’t restricted to scientific management, however.Some elements still used include:1. The use of time and motion studies.2. Best qualified workers.3. Design incentive systems based on output.3. GENERAL ADMINISTRATIVE THEORISTS.This group of writers focused on the entire organization. They’re important for developing more general theories of what managers do and what constitutes good management practice.A. The two most prominent theorists behind the general administrative approachwere Henri Fayol and Max Weber.1. Henri Fayol wrote during the same time period as Frederick Taylor.Fayol was the managing director of a large French coal-miningfirm.a. His attention was aimed at the activities of all managers.b. He described the practice of management as distinctfrom other typical business functions.c. He stated 14 principles of management(fundamental or universal truths of management that can be taught in schools). (See Exhibit2.3.)2. Max Weber (pronounced VAY-ber) was a German sociologistwho wrote in the early part of the 20th century.a. He developed a theory of authority structures anddescribed organizational activity based on authorityrelations.b. He described the ideal form of organization—thebureaucracy, defined as a form of organization markedby division of labor, a clearly defined hierarchy, detailedrules and regulations, and impersonal relationships. (SeeExhibit2.4.)B. How Do Today’s Managers Use General Administrative Theories?Some of our current management concepts and theories can be traced tothe work of the general administrative theorists.1. The functional view of a manager’s job can be traced to HenriFayol.2. Weber’s bureaucratic characteristics are still evident in many oftoday’s large organizations—even in highly flexibleorganizations of talented professionals where some bureaucraticmechanisms are necessary to ensure that resources are usedefficiently and effectively.4. QUANTITATIVE APPROACH TO MANAGEMENT.The quantitative approach to management involves the use of quantitative techniques to improve decision-making. This approach has been called operations research or management science. It includes applications of statistics, optimization models, information models, and computer simulations.A. Important Contributions.1. The quantitative approach evolved out of the development ofmathematical and statistical solutions to military problemsduring World War II.2. One group of military officers—the Whiz Kids—includedRobert McNamara and Charles “Tex” Thornton.B. How Do Today’s Managers Use the Quantitative Appro ach?1. This approach has contributed most directly to managerialdecision making, particularly in planning and controlling.2. The availability of sophisticated computer software programsmade the use of quantitative techniques somewhat lessintimidating for managers.5. TOWARD UNDERSTANDING ORGANIZATIONAL BEHAVIOR.The field of study concerned with the actions (behaviors) of people at work is called organizational behavior. Organizational behavior (OB) research has contributed much of what we know about human resources management and contemporary views of motivation, leadership, trust, teamwork, and conflict management.A. Early Advocates.Four people stand out as early advocates of the OB approach. Theseinclude Robert Owen, Hugo Munsterberg, Mary Parker Follett, andChester Barnard. Their ideas provided foundation for practices such asemployee selection procedures, motivation programs, work teams, andorganization-environment management techniques. (See Exhibit2.5 fora summary of the most important ideas of these early advocates.)B. The Hawthorne Studies were, without question, the most importantcontribution to the developing OB field.1. These were a series of experiments conducted from 1924 to theearly 1930s at Western Electric Company’s Haw thorne Works inCicero, Illinois joined by Harvard professor Elton Mayo and hisassociates.2. The studies were initially devised as a scientific managementexperiment to assess the impact of changes in various physicalenvironment variables on employee productivity.3. Other experiments looked at redesigning jobs, making changesin workday and workweek length, introducing rest periods, andintroducing individual versus group wage plans.4. The researchers concluded that social norms or group standardswere the key determinants of individual work behavior.5. Although not without critics (of procedures, analyses offindings, and the conclusions), the Hawthorne studies didstimulate an interest in human behavior in organizations.C. How Do Today’s Managers Use the Behavioral Approach?1. The behavior approach aids managers in designing motivatingjobs, working with employee teams, and opening upcommunication channels.6. 2. The behavioral approach has provided the foundation for currenttheories of motivation, leadership, group behavior and development,and other behavioral topics. THE SYSTEMS APPROACH.During the 1960’s researches began to analyze organizations from a systemsperspective based on the physical sciences.1. A system is a set of interrelated and interdependent partsarranged in a manner that produces a unified whole.2. The two basic types of systems are open and closed. A closedsystem is one that is not influenced by and does not interact withits environment. An open system is one that dynamicallyinteracts with its environment (see Exhibit2.6).A.The Systems Approach and Managersanization is made up of “interdependent factors, includingindividuals, groups, attitudes, motives, formal structure, interactions,goals, status and authority.2.Managers coordinate the work activities of the various parts of theorganization3.Decisions and actions taken in one organizational area will affectothers and vice versaOrganizations are not self-contained. They rely on their environment.7. THE CONTINGENCY APPROACH.A contingency approach is intuitively logical. One thing to say that the wayto manager “depends on the situation” and another to say what it depends on.1. The contingency approach to management is a view that theorganization recognizes and responds to situational variables asthey arise.2. Some popular contingency variables are shown in Exhibit2.7.8. CURRENT TRENDS AND ISSUESNow that you’ve got a good understanding of the evolution and past history of management theories and practices, what current concepts and practices are shaping today’s management history and changing the way that managers do their jobs?A. Globalization. Organizational operations no longer stop at geographicborders. Managers in all types and sizes of organizations are faced withthe opportunities and challenges of globalization.A.Ethics. Cases of corporate lying, misrepresentations, and financialmanipulations were widespread during 2002. Managers of firms such asEnron, ImClone, Global Crossing, and Tyco International put their self-interest ahead of others who might be affected by their decisions.1.While most managers continue to behave in a highly ethical manner,the abuses suggest a need to “upgrade” ethical standards.2.Ethics education is being widely emphasized in college curriculumsanizations are taking a more active role in creating and using codesof ethics, ethics training programs, and hiring ethics officers.Workforce diversity refers to employees in organizations who are heterogeneous in terms of gender, race, ethnicity, or othercharacteristics. The challenge for managers is to make theirorganizations more accommodating to diverse groups of people byaddressing different lifestyles, family needs, and work styles.1.Workforce diversity is a global issue2.Before the early 1980’s a melting pot or assimilation model wasused. It has been replaced by the recognition and celebration ofdifferences.3.Challenge for managers is to make organizations moreaccommodating to diverse groups of people by addressing differentlifestyles, family needs, and work styles.4.Smart managers recognize diversity as an asset in bringing a broadrange of viewpoints and problem-solving skills to a company.D. Entrepreneurship refers to the process whereby an individual or agroup of individuals uses organized efforts and means to pursueopportunities to create value and grow by fulfilling wants and needsthrough innovation and uniqueness.1. Three important themes stand out in this definition:a. The pursuit of opportunitiesb. Innovationc. Growth2. Entrepreneurship will continue to be important to societiesaround the world.Note: At the end of each major section in this book, a specialentrepreneurship module has been included that looks atthe topics presented in that section from anentrepreneurial perspective.E. Managing in an E-Business World.1. E-business(electronic business)—a comprehensive termdescribing the way an organization does its work by usingelectronic (Internet-based) linkages with key constituencies inorder to efficiently and effectively achieve its goals.2. While critics have questioned the viability of Internet-basedcompanies (dot-coms) after the high-tech implosion in 2000 and2001, e-business is here for the long-run.3. E-commerce(electronic commerce) is any form of businessexchange or transaction in which the parties interactelectronically.4. Categories of e-business involvement (see Exhibit2.8):a. E-business enhanced organization—uses the Internet toenhance (not to replace) their traditional ways of doingbusiness.b. E-business enabled organization—Internet enablesorganizational members to do with work moreefficiently and effectively.F. c. Total e-business organization—whole existence is madepossible by and revolves around the Internet. Knowledge Managementand Learning Organizations.1.Change takes place at an unprecedented rate.anizations to be successful need to be learning organizations—ones that have developed the capacity to continuously learn, adapt,and change. (Exhibit2.9demonstrates the differences between alearning organization and a traditional organization.)Knowledge management involves cultivating a learning culture where organizational members systematically gather knowledge and share itwith others in the organization so as to achieve better performance.G. Quality Management.1. Total quality management is a philosophy of management thatis driven by customer needs and expectations and focuses oncontinual improvement in work processes. (See Exhibit2.10.)2. TQM was inspired by a small group of quality experts, of whomW. Edwards Deming was one of the chief proponents.3. TQM represents a counterpoint to earlier management theoristswho believed that low costs were the only road to increasedproductivity.4. The objective of TQM is to create an organization committed tocontinuous improvement.1. What kind of workplace would Henri Fayol create? How about Mary ParkerFollett? How about Frederick Taylor?Fayol would probably create a workplace in which managers could perform the managerial functions of planning, organizing, coordinating, commanding, and controlling. In addition, he would have a workplace in which his 14 management principles would be followed.Follett would undoubtedly create a workplace in which managers and workers viewed themselves as partners, as part of a common group. In such a workplace, managers would rely more on their expertise and knowledge to lead subordinates, rather than the formal authority of their position. Empowerment and teamwork would be hallmarks of a Follett-style workplace.Taylor would create a workplace in which managers and workers scientifically analyzed and determined the “one best way” to accomplish each job. He would put the right person on the job with the correct tools and equipment, would have the worker follow instructions exactly, and would motivate the worker with an economic incentive of a significantly higher daily wage. Consistent productivity improvements would be his goal in the workplace.2. Can a mathematical (quantitative) technique help a manager solve a “people”problem such as how to motivate employees or how to distribute work equitably?Explain.Although we need to recognize that some “people” problems can’t be expressed quantitatively, mathematical techniques could help a manager solve these problems. Statistical methods, information models, computer simulations, and other quantitative techniques are designed to help managers make better decisions. As such, they could help a manager address people problems being encountered in the workplace.3. Is globalization an issue for e-businesses? Explain.Management, in a traditional, and especially in an e-business world, is no longer constrained by national borders. The world is definitely become a global village, so globalization is an issue! Anywhere business constituencies has Internet-capable, an e-business transaction can take place, regardless of geographic location and proximity.4. “Entrepreneurship is only for small, start-u p businesses.” Do you agree ordisagree with this statement? Explain.Entrepreneurship by definition is the process whereby an individual or a group of individuals uses organized efforts and means to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources are currently controlled. It involves the discovery of opportunities and resources to exploit them. So, yes, entrepreneurship is for small, start-up businesses, but it is also important for larger organizations.Organizations, regardless of size, must be innovative and flexible, which is closely related to entrepreneurship.5. How do societal trends influence the practice of management? What are theimplications for someone studying management?Societal trends greatly influence the practice of management. For example, the change in society’s emphasis on the value of diversity has profound implications for management. The U.S. society went from an emphasis on assimilation (“melting pot”) of differences in the early 1980’s to a celebration and recognition of differences today. Therefore, the way that organizations are structured, motivation programs, and other work-related processes must be aligned with the needs of a diverse and pluralistic workforce. This is a global issue as other countries such as Japan and Australia are experiencing similar diversity trends.6.Would you feel more comfortable in a learning organization or in a traditionalorganization? Why?The answers for these questions will vary according to each student. However, the important part of the answer is how well each student explains or supports his/her preference.The task for students to accomplish with this activity is to do some preliminary work on creating a knowledge base for your particular institution, such that differentorganizational members could utilize the information to increase efficiency and effectiveness. Form groups of three to four students for discussion.One suggestion would be for each group to develop a knowledge “list” for different campus offices or functions. For instance, have one group concentrate on the Registrar’s Office, another with the Financial Aid Office, another with the Student Union, the Alumni Office, etc. The groups should identify what tasks the office performs for students and other institutional offices, what common activities the office performs that other offices might also be performing, and what unique tasks the office performs. After discussing these issues, compile an outline of major areas of important knowledge the organization has as a whole.A couple of hints that might help get the activity started are: using technology in classrooms, keeping in touch with former students and/or alumni.。
