2 The Evolution of Management Theory

were seeking ways to better satisfy customer needs.
Machinery was changing

the way goods were produced.
Managers had to increase the efficiency of the worker-task mix.

in two ways:
Craft -- each worker did all steps.
Factory

-- each worker specialized in one step.
Smith found that the factory method had much higher productivity.
Each worker became very skilled at one, specific task.
Breaking down the total job allowed for the division of labor.

the relationships between people and tasks to redesign the work

for higher efficiency.
Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.

way the job is performed now & determine new ways

to do it.
Gather detailed, time and motion information.
Try different methods to see which is best.
2. Codify the new method into rules.
Teach to all workers.
3. Select workers whose skills match the rules set in Step 2.
4. Establish a fair level of performance and pay for higher performance.
Workers should benefit from higher output.

side of Taylor’s plan.
They did not allow workers to share

in increased output.
Specialized jobs became very boring, dull.
Workers ended up distrusting Scientific Management.
Workers could purposely “under-perform”
Management responded with increased use of machines.

to time and motion studies.
Time and motion studies:
1. Break down

each action into components.
2. Find better ways to perform it.
3. Reorganize each action to be more efficient.
Gilbreths also studied fatigue problems, lighting, heating and other worker issues.

efficiency and effectiveness.
Max Weber developed the concept of bureaucracy.
A formal

system of organization and administration to ensure effectiveness and efficiency.
Weber developed the Five principles shown in Figure 2.2.

reward
Figure 2.2

accountable for their actions.
Positions in the firm should be held

based on performance not social contacts.
Position duties are clearly identified. People should know what is expected of them.
Lines of authority should be clearly identified. Workers know who reports to who.
Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates.
Sometimes, these lead to “red-tape” and other problems.

of Labor: allows for job specialization.
Fayol noted firms can

have too much specialization leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one boss.
4. Line of Authority: a clear chain from top to bottom of the firm.
5. Centralization: the degree to which authority rests at the very top.

to guide the organization.
7. Equity: Treat all employees fairly

in justice and respect.
8. Order: Each employee is put where they have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees needed.

success.
12. Stability of Tenure: Long-term employment is important.
13. General interest

over individual interest: The organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.

to motivate employees.
Mary Parker Follett: an influential leader in early

managerial theory.
Suggested workers help in analyzing their jobs for improvements.
The worker knows the best way to improve the job.
If workers have the knowledge of the task, then they should control the task.

of the Western Electric Co. during 1924-1932.
Worker productivity was measured

at various levels of light illumination.
Researchers found that regardless of whether the light levels were raised or lowered, productivity rose.
Actually, it appears that the workers enjoyed the attention they received as part of the study and were more productive.

of worker assumptions.
Theory X: Assumes the average worker is lazy,

dislikes work and will do as little as possible.
Managers must closely supervise and control through reward and punishment.
Theory Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.
Managers should allow the worker great latitude, and create an organization to stimulate the worker.

create work setting to build initiative

Provide authority to workers
Theory X
Employee

is lazy

Managers must
closely supervise

Create strict rules & defined rewards

USA.
USA culture emphasizes the individual, and managers tend to

feel workers follow the Theory X model.
Japan culture expects worker committed to the organization first and thus behave differently than USA workers.
Theory Z combines parts of both the USA and Japan structure.
Managers stress long-term employment, work-group, and organizational focus.

linear programming, modeling, simulation systems.
Operations management: techniques to analyze all

aspects of the production system.
Total Quality Management (TQM): focuses on improved quality.
Management Information Systems (MIS): provides information about the organization.

of forces, conditions, and influences outside the organization.
Systems theory considers

the impact of stages:
Input: acquire external resources.
Conversion: inputs are processed into goods and services.
Output: finished goods are released into the environment.

system is self-contained.
Closed systems often undergo entropy and lose the

ability to control itself, and fails.
Synergy: performance gains of the whole surpass the components.
Synergy is only possible in a coordinated system.

can then buy inputs
Figure 2.4

environment impacts the organization and managers must be flexible to

react to environmental changes.
The way the organization is designed, control systems selected, depend on the environment.
Technological environments change rapidly, so must managers.

monitored and managed.
Very efficient in a stable environment.
Organic: Authority is

decentralized throughout employees. (Theory Y)
Much looser control than mechanistic.
Managers can react quickly to changing environment.