Management Thought: Past and Present Chapter 2 MANAGEMENT Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 1 learning objectives 1. Discuss why knowledge of the evolution of management theories is important to managers 2. Explain the contributions of the following: a. Classical schools of management thought b. Behavioral school of management thought c. Quantitative school of management thought d. Systems school of management thought e. Contingency school of management thought Chapter 2 f. Quality school of management thought Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 2 1 History and Theory of Management The Value of History People who ignore the past are destined to relive it. Chapter 2 A person unaware of mistakes made by others is likely to repeat them. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 3 Chapter 2 1 Time Line of Management Thought Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 4 2a Classical Management Theory Chapter 2 Classical Management Theory A theory that focused on finding the “one best way” to perform and manage tasks Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 5 2a Classical Management Theory ▼ Originated during England’s Industrial Revolution ▼ Manufacturers began mass-producing goods in factories ▼ Textile industry was among the first ▼ Allowed production of standardized goods ▼ Depended on a constant flow of labor and materials ▼ Owners needed to plan, organize, lead, control Chapter 2 ▼ Focused on finding the “one best way” Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 6 2a Classical Management Theory Classical Scientific School Chapter 2 Classical Administrative School Focused on the manufacturing environment Emphasized the flow of information and how organizations should operate Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 7 2a Classical Scientific School Charles Babbage ▼ In 1832, published On the Economy of Machinery and Manufactures ▼ Concluded that definite management principles existed: – with broad applications – determined by experience Chapter 2 ▼ Principle of “the division of labor amongst the persons who perform the work” Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 8 Classical Scientific School 2a Frederick W. Taylor ▼ The Father of Scientific Management ▼ Pursued four key goals: – – – – Develop a science of management Select workers scientifically Develop and train workers scientifically Create cooperation between management and labor Chapter 2 ▼ Determined the quickest ways to perform tasks Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 9 2a Classical Scientific School Henry Gantt ▼ Invented the Gantt chart ▼ Moved away from authoritarian management Chapter 2 ▼ Advocated a bonus system to reward workers Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 10 2a Lessons from Classical Scientific Thinkers Analyze everything Teach effective methods to others Constantly monitor workers Chapter 2 Plan responsibly Control the work and the workers Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 11 2a Classical Administrative School Henri Fayol ▼ Believed specific management skills could be learned and taught Chapter 2 ▼ Fayol’s universal management functions: – Planning – Organizing – Leading – Controlling Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 12 2a Classical Administrative School Mary Parker Follett ▼ Focused on how organizations cope with conflict and the importance of sharing goals ▼ Emphasized the need to discover and enlist individual and group motivation Chapter 2 ▼ The first principle for individual and group success is the “capacity for organized thinking” Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 13 2a Classical Administrative School Chester Barnard ▼ Argued that managers must gain acceptance for their authority ▼ Advocated the use of basic management principles Chapter 2 ▼ Cautioned managers to issue no order that could not or would not be obeyed Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 14 2b Behavioral Management Theory Chapter 2 Behavioral School Recognized employees as individuals with concrete, human needs, as parts of work groups, and as members of a larger society Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 15 2b Behavioral Management Theory Robert Owen ▼ The father of modern personnel management Chapter 2 ▼ The quality and quantity of workers’ output influenced by conditions on and off the job Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 16 2b Behavioral Management Theory Abraham Maslow ▼ Needs-based theory of motivation – physiology – security – affiliation – esteem Chapter 2 – self-actualization Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 17 2b Behavioral Management Theory Results Managers discover… What employees want from work How to enlist cooperation and commitment Chapter 2 How to unleash talents, energy, and creativity Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 18 Chapter 2 2c Quantitative Management Theory Quantitative School Emphasized mathematical approaches to management problems Management Science The study of complex systems of people, money, equipment, and procedures, with the goal of improving their effectiveness Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 19 2c Quantitative Management Theory ▼ Mathematical approaches to management problems ▼ Developed during World War II Chapter 2 ▼ Applied to every aspect of business Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 20 2c Tools of Operations Management Inventory models Beak-even analyses Production scheduling Chapter 2 Production routing Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 21 2d Systems Management Theory Chapter 2 Systems School The theory that an organization comprises various parts that must perform tasks necessary for the survival and proper functioning of the system Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 22 Chapter 2 2d The Organization as a System Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 23 2e Contingency Management Theory Chapter 2 Contingency School A theory based on the premise that managers’ preferred actions or approaches depend on the variables of the situation they face Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 24 2e Contingency Management Theory ▼ Approaches depend on the variables of the situations ▼ Draws on all past theories in attempting to analyze and solve problems ▼ Is integrative ▼ Summarized as an “it all depends” device ▼ Tells managers to look to their experiences and the past and to consider many options before choosing Chapter 2 ▼ Encourages managers to stay flexible Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 25 2f Quality Management Theory Chapter 2 Quality School The essence of the quality of any output is its ability to meet the needs of the person or group Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 26 2f Quality Management Theory Kaizen Chapter 2 Reengineering A Japanese term used to mean incremental, continuous improvement for people, products, and processes Businesses processes are redesigned to achieve improvements in performance Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 27 2f Reengineering Approach Reengineering determines… ▼ What a company must do ▼ How to do it Managerial Challenges ▼ To sense the need for change ▼ To see change coming Chapter 2 ▼ To react effectively to change Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 28 2f Quality School of Management ▼ Quality school is the most current and is worldwide ▼ Its roots are in the behavioral, quantitative, systems, and contingency schools of management theory ▼ People are key to commitments and performance Chapter 2 ▼ What is done must be evaluated quantitatively and qualitatively Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 29