MGMT Chapter 2 - Lecture notes 2 PDF

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Roles managers play, total quality management, quality assurance, closed system, open system, Maslow's hierarchy of needs, Joseph M. Muran...

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MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager 2.1 Evolving Viewpoints: How We Got To Today’s Management Outlook Peter Drucker – He was the creator and inventor of modern management. 1954 – The Practice of Management – “Management was one of the major social innovations of the 20th century and that it should be treated as a profession.”  Workers should be treated as assets  Corporation could be considered a human community  “There is no business without a customer” Evidence-Based Management: Facing Hard Facts, Rejecting Nonsense  Follows Drucker’s rational approach to management.  Evidence-based management – translating principles based on evidence into organizational practice, bringing rationality to the decision making process. Evidence-Based Management – Two Proponents: Jeffrey Pfeffer and Robert Sutton  Facts about what works and what doesn’t.  Identifies half-truths that make up wisdom about management  Rejects total nonsense that passes for sound advice Two Perspectives about Management  Historical perspective – includes classical, behavioral, and quantitative.  Contemporary perspective – includes systems, contingency, and quality-management. Five Good Reasons for Studying Theoretical Perspectives.  Understanding of the present.  Guides to action.  Source of new ideas.  Clues to meaning of your managers’ decisions.  Clues to meaning of outside events. 2.2 If the name of the game is to manage work more efficiently, what can the classical viewpoint teach me? Three historical management viewpoints – classical, behavioral, and quantitative. Classical viewpoint – find ways to manage work more efficiently; assumes people are rational  The two branches are scientific and administrative Scientific management – put emphasis the scientific study of work methods to improve individual workers’ quality of productivity.  Coined by Frederick W. Taylor and Frank and Lillian Gilbreth

Frederick Taylor & the Four Principles of Scientific Management

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager  

Soldiering, coined by Taylor, means working less than full effort or capacity Taylor is known as the father of scientific management

Eliminate soldiering through four principles of science: 1. Evaluate a task by studying each bit of the task 2. Select workers with the right abilities for the task 3. Give workers training and incentives to do the work right 4. Use scientific concepts to plan the work methods Taylor based these principles on motion studies, which each worker’s job is broken down by tasks. He suggested that employers implement a differential rate system – more skilled workers earn higher income. He believed that raising both management and labor could increase profit to where employees stop quarreling. The principles of scientific management can enhance productivity. Frank and Lillian Gilbreth and Industrial Technology  Expanded on Taylor’s motion studies  Lillian Gilbreth was the first woman to be a contributor to management science. Administrative Management: is concerned with the works of the entire organization.  Theorists – Henri Fayol and Max Weber Henri Fayol  He systemized management behavior. He became known to American businesses when General and Industrial Management was translated to English in 1930.  He identified major functions of management – leading, organizing, planning, and controlling. Max Weber  Believed that bureaucracy was a “rational, efficient, ideal organization based on principles of logic.” An Organization’s 5 Positive Bureaucratic Features 1. A well defined hierarchy of authority 2. Formal rules 3. A clear division of labor 4. Impersonality 5. Careers based on merit Importance of Weber  His work had an important influence on large corporations such as Coca Cola.

The Problem with the Classical Viewpoint: Too Mechanistic  Tends to view humans as machines, not taking human needs into account

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager The Importance of the Classical Viewpoint:  The work activity was similar to the rational approach, which implemented scientific methods, time and motion studies, and job specialization.  This viewpoint is used by McDonald’s and Pizza Hut 2.3 Behavioral Viewpoint: Behaviorism, Human Relations, and Behavioral Science Major Question To understand how people are motivated to achieve, what can I learn from the behavioral viewpoint? The Big Picture The second of the three historical management perspectives was the behavioral viewpoint, which stresses the importance of understanding human behavior and of motivating employees toward achievement. It was developed over three phases: (1) early behaviorism, (2) human relations movement, and behavioral science approach. Behavioral viewpoint – emphasized the importance of understanding human behavior and of motivating employees toward achievement. Early Behaviorism: Pioneered by Munsterberg, Follett, and Maya  Pioneered by Hugo Munsterberg, Mary Parker Follett, and Elton Maya. Hugo Munsterberg and the First Application of Psychology to Industry  Called “the father of industrial psychology”  Psychologists could contribute to industry in three ways: 1. Study jobs and determine which people are best suited to specific jobs 2. Identify the psychological conditions under which employees do their best work 3. Devise management strategies to influence employees to follow management’s interests Why Munsterberg is Important: His ideas led to the field of industrial psychology, which is the study of human behavior in workplaces. Mary Parker Follett & Power Sharing among Employees and Managers  Considered to be “one of the most important women America has yet produced in the fields of civics and sociology.  Organizations should become more democratic – with managers and employees working cooperatively 1. Organizations should be operated as “communities.” 2. Conflicts should be resolved by having managers and workers talk over differences and find solutions that would satisfy both parties – a process called integration. 3. The work process should be under the control of workers with the relevant knowledge, rather than of managers. Why Follett is Important

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager  

Introduced concepts of “self managed teams”, “worker empowerment” Members of different departments working together on joint projects

Elton Maya and the “Hawthorne Effect”  Workers would be more productive if they thought they were receiving special attention.  Conducted by Elton Maya and his associates at Western Electric’s Hawthorne (Chicago) plant  Whether or not workplace lighting level affected worker productivity  Taylor or Gilbreths might have done this.  Variables were altered (wage levels, rest periods, and length of workday).  Flaws in studies (variations in ventilation and lighting or inadequate follow through) Why the Hawthorne Studies Are Important: The Hawthorne studies were faulted for being poorly designed and not having enough empirical data to support the conclusions.  Led to the human relations movement in the 50s and 60s. The Human Relations Movement: Pioneered by Maslow and McGregor  The two theorists who contributed most to the human relations movement – which proposed that better human relations could increase worker productivity – were Maslow and McGregor. Abraham Maslow and the Hierarchy of Needs  Food, security, love, recognition, self fulfillment motivates you to perform  Some needs must be satisfied before others  1943 – Hierarchy of Needs – physiological, safety, love, esteem, and self-actualization Douglas McGregor (Theory X vs Theory Y)  Attitudes can be either X or Y  Theory X represents a negative view of workers, which them being considered irresponsible, to be resistant to change, to lack ambition, to hate work, and to be led rather than to lead  Theory Y represents the outlook of human relations proponents – a positive view of workers. They have self control, self direction, and are creative. Why Theory X/Theory Y is Important:  It helps managers avoid falling into the self-fulfilling prophecy.  If a manager expects a subordinate to act a certain way, the worker may act that wat and confirm the manager’s expectations.  Job satisfaction leads to greater worker performance

The Behavioral Science Approach  The human relations movements was an improvement used within scientific management, but it was too simplistic.  The behavioral science approach has overshadowed the human relations movement.  Behavioral science – relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers.

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager Disciples of behavioral science are – psychology, sociology, anthropology, and economics. 2.4 Quantitative Viewpoints: Management Science and Operations Research 

Major Question If the manager’s job is to solve problems, how might the two quantitative approaches help? The Big Picture The third and last category under historical perspectives consists of quantitative viewpoints, which emphasize the application to management of quantitative techniques, such as statistics and computer simulations. Two approaches of quantitative management are management science and operations management. Operations research (OR) has transformed into quantitative management, the application to management of quantitative techniques, such as statistics and computer simulations. Two branches of quantitative management are management science and operations management. Management Science: Using Mathematics to Solve Management Problems  Management science – focuses on using mathematics to aid in problem solving and decision making.  Often called operations research. Why Management Science Is Important: It stresses the use of rational, science based techniques and mathematical models to improve decision making and strategic planning. Operations Management: Being More Effective  Operations management focuses on managing the production and delivery of an organization’s products or services more effectively. Why Operations Management Is Important: Operations management helps ensure that business operations are efficient and effective.

2.5 Systems Viewpoint Major Question How can the exceptional manager be helped by the systems viewpoint? The Big Picture

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager Three contemporary management perspectives are (1) the systems, (2) the contingency, and (3) the quality-management viewpoints. The systems viewpoint sees organizations as a system, either open or closed, with inputs, outputs, transformation processes, and feedback. The contingency viewpoint emphasizes that a manager’s approach should vary according to the individual and environmental situation. The quality management viewpoint has two traditional approaches: quality control, the strategy for minimizing errors by managing each stage of production, and quality assurance, which focuses on the performance of workers, urging employees to strive for zero defects. A third quality approach is the movement of total quality management (TQM), a comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction. To be an exceptional manager, you must learn to deal with individual differences in a variety of settings. Contemporary perspective consists of:  Systems  Contingency  Quality management The Systems Viewpoint  Regards the organization as systems of interrelated parts that operate together to achieve a common purpose The Contingency Viewpoint  Emphasizes that a manager’s approach should vary according to – i.e. be contingent on – the individual and environmental situation The Quality-Management Viewpoint  Three approaches Quality Control  Strategy for minimizing errors by managing each state of production  Proponent: Walter Shewart Quality assurance  Focuses on the performance of workers, urging employees to strive for “zero defects”

Total quality management  Comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction  Proponents: W. Edwards Deming, Joseph M. Juran The Systems Viewpoint

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager  System – a set of interrelated parts that operate together to achieve a common purpose.  Systems viewpoint – regards the organization as a system of interrelated parts. By adopting this point of view, you can look at your organization both as (1) A collection of subsystems – parts making up the whole system – and (2) a part of the larger environment The Four Parts of a System 1. Inputs – the people, money, information, equipment, and materials required to product an organization’s goods or services. 2. Outputs – the products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization. 3. Transformation processes – the organization’s capabilities in management and technology that are applied to converting inputs into outputs. 4. Feedback – is information about the reaction of the environment to the outputs that affects the inputs. Open & Closed Systems  Open system – continually interacts with its environment.  Closed system – has little interaction with its environment. The classical management often considered an organization a closed system. So does the management science perspective, which simplifies organizations for purposes of analysis. Why the Systems Viewpoint – Particularly the Concept of Open Systems – Is Important:  Failure: 1959 Ford Edsel. They weren’t open enough systems and didn’t have sufficient feedback.  An open system attempts to ensure a continuous learning process in order to correct old mistakes and avoid new ones. 2.6 Contingency Viewpoint Major Question In the end, is there one best way to manage in all situations? The Big Picture The second viewpoint in the contemporary perspective, the contingency viewpoint, emphasizes that a manager’s approach should vary according to the individual and environmental situation. The classical viewpoints advanced by Taylor and Fayol assumed that their approaches had universal applications – that they were “the one best way” to manage organizations. The contingency viewpoint began to develop when managers discovered that under some circumstances better results could be achieved by breaking the one-best-way rule.  Contingency viewpoint – emphasizes that a manager’s approach should vary according to – that is, be contingent on – the individual and the environmental situation. A manager subscribing to the Gilbreth approach might try to get workers to be more productive by simplifying the steps. A manager of the Theory X/Theory Y persuasion might try to use

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager motivational techniques. But the manager following the contingency viewpoint would simply ask, “What method is the best to use under these particular circumstances?” Gary Hamel: Management Ideas Are Not Fixed, They’re a Process  Gary Hamel – cofounder of the Management Innovation Lab  Ranked by The Wall Street Journal as today’s most influential business thinker.  “Over time, every great invention, management included, travels a road that leads from birth to maturity, and occasionally to senescence.  Claims that much of management theory is dated  Claims to look at management as a process How to implement management innovation?  Hamel states the answer can be found by identifying core beliefs that people have about the organization, especially those that detract from the pursuit of management innovation. 1. Is this a belief worth challenging? Is it debilitating? Does it get in the way of an important organizational attribute that we’d like to strengthen? 2. Is this belief universally valid? Are there counter examples? If so, what do we learn from those cases? 3. How does this belief serve the interests of its adherents? Are there people who draw reassurance or comfort from this belief? 4. Have our choice and assumptions conspired to make this belief self – fulfilling? Is this belief true simply because we have made it true – and, if so, can we imagine alternatives. Why the Contingency Viewpoint Is Important: The contingency viewpoint would seem to be the most practical of the viewpoints discussed so far because it addresses problems on a case-bycase basis and varies the solution accordingly.

2.7 Quality-Management Viewpoint Major Question Can the quality management viewpoint offer guidelines for true managerial success? The Big Picture The quality-management viewpoint, the third category under contemporary perspectives, consists of quality control, quality assurance, and especially the movement of total quality

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager management (TQM), dedicated to continuous quality improvement, training, and customer satisfaction. Today the average American car last much longer than it used to, and some U.S. cars are equal or superior to the best foreign competitors – for example, the Cadillac CTS beats the MercedesBenz E350 and Lexus GS 450h.  Although not a “theory” as such, the quality-management viewpoint, which includes, quality control, quality assurance, and total quality management, has an impact of thinking on contemporary management perspectives. Quality Control & Quality Assurance  Quality refers to the total ability of a product or service to meet customer needs. It’s one of the most important ways of adding value to products and services, thereby distinguishing them from those of competitors. Two traditional strategies for ensuring quality are quality control and quality assurance. Quality Control  Quality control – is defined as the strategy for minimizing errors by managing each stage of production.  Practices were developed in the 1930s by Walter Shewart, who used statistical sampling to locate errors by testing just some of the items in a particular production run. Quality Assurance  Developed in the 1960s, quality assurance – focuses on the performance of workers, urging employees to strive for “zero defects.” Total Quality Management: Creating an Organization Dedicated to Continuous Improvement  “Made in Japan” changed after the arrival of two Americans, W. Edwards Deming and Joseph M. Juran. W. Edwards Deming  Believed that quality stemmed from “constancy of purpose”  Statistical measurement and reduction of variations in production processes.  Emphasized the human side, saying that managers should stress teamwork, try to be helpful rather than simply give orders, and make employees feel comfortable about asking questions.  85-15 rule – when things go wrong, there is an 85% chance that the system is at fault, only a 15% chance that the individual worker is at fault. Joseph M. Juran  Quality as “fitness for use”  The best way to focus a company’s efforts, is to concentrate on the real needs of customers.

MGMT 300 Notes Chapter 2: Management Theory – Essential Background for the Successful Manager TQM: What It Is  From the work of Deming and Juran  Total quality management (TQM) – is a comprehensive approach – led by top management and supported throughout the organization – dedicated to continuous quality improvement, training, and customer satisfaction. Four Components of TQM are as follows: 1. Make continuous improvement a priority. 2. Get every employee involved. 3. Listen to and learn from customers and employees. 4. Use accurate standards to identify and eliminate problems. Why Total Quality Management Is Important: The total quality management viewpoint emphasizes infusing concepts of quality throughout the total organization in a way that will deliver quality products and services to cus...