Principles of Management

Managing History and Current Thinking LEARNING OBJECTIVES 1. an understanding of the classical approach to management 2. an appreciation for the work of Frederick W. Taylor, Frank and Lillian Gilbreth, Henry L. Gantt, and Henri Fayol 3. an understanding of the behavioral approach to management 4. an understanding of the studies at the Hawthorne Works and the human relations movement 5. an understanding of the management science approach to management 6. an understanding of how the management science approach has evolved 7. an understanding of the system approach to management 8. nowledge about the learning organization approach to management 9. an understanding of how triangular management and the contingency approach to management are related DETAILED LECTURE OUTLINE I. INTRODUCTORY CASE: “A PROBLEM AT MCDONALD’S” II. THE CLASSICAL APPROACH *Emphasizes organizational efficiency to increase organizational success. A. Lower-Level Management Analysis *Scientific management emphasizes the “one best way. ” 1. Frederick W. Taylor (1856-1915) * Called the father of scientific management. *His primary goal was to increase worker efficiency by scientifically designing jobs. a). Work at Bethlehem Steel *At Bethlehem Steel he constructed the “science of shoveling”. Matched shovel to size of worker. (b). Global Spotlight * Found the one best way to compete globally was through automation. 2. Frank Gilbreth (1868-1924), Lillian Gilbreth (1878-1972) * Significant contributors to the scientific method. * Primary investigative tool in their research was motion study (reducing each job to the most basic movement possible). 3. Henry L. Gantt (1861-1919) (a). Scheduling Innovation *The Gantt chart (b). Rewarding Innovation Gantt believed that worker compensation needed to correspond not only to production through the piece-rate system but also to overproduction through the bonus system. (c). People Perspectives *Courier Publications involved its workers in the decision to automate. Allowing them to decide on the kind of equipment helped obtain their commitment to technology’s success. B. Across Industries: Mail Order Retailing – “One Best Way at L. L. Bean” * The one best way to fill customer orders was to upgrade the information system. C. Comprehensive Analysis of Management Emphasizes the entire range of managerial performance. * Henri Fayol (1841-1925) * Usually regarded as the pioneer of administrative theory. * General management principles suggested by Fayol: *Division of work * Authority * Discipline * Unity of command * Unity of direction * Subordination of individual interests to the general interest * Remuneration * Centralization * Scalar chain * Order * Equity *Stability of tenure of personnel * Initiative * Esprit de Corps D. Limitations of the Classical Approach * The human variable for the organization may not be adequately emphasized in the classical approach.

III. THE BEHAVIORAL APPROACH *Emphasizes striving to increase production through an understanding of people. A. The Relay Assembly Test Room Experiments * The experimenters believed that if productivity was studied long enough under different working conditions, those working conditions maximizing production would be found. * The experimenters concluded that human factors within organizations could significantly influence production. B. The Bank Wiring Observation Room Experiment * The purpose of the bank wiring observation room experiment was to analyze the social relationships in a work group. The research concluded that social groups in organizations could effectively exert enough pressure to influence individuals to disregard monetary incentives. C. Recognizing the Human Variable * The Hawthorne studies pointed up the need to study the human variable, since it could drastically increase and decrease productivity. D. The Human Relations Movement * A people oriented approach to management. Management stimulates high worker commitment and productivity through human relation skills, the ability to work with people in a way to enhance organizational success.

IV. THE MANAGEMENT SCIENCE APPROACH *Suggests that managers can best improve their organizations by using the scientific method and mathematical techniques to solve operational problems. A. The Beginning of the Management Science Approach * The scientific method of problem-solving involves the following sequential steps: *Observing *Constructing a model *Deducing * Testing the model * Can be traced back to World War II. B. Management Science Today * By 1955, the management science approach to solving industrial problems had proven very effective. By 1965, the management science approach was being used in many companies and was beging applied to diverse management problems. * In the 1980s, surveys indicated these techniques were used extensively in very large, complex organizations * The challenge for the 1990’s is to find ways of applying management science techniques to smaller organizations. C. Quality Spotlight * The Malcolm Baldrige Award evaluates the quality of a company in terms of efficiency and effectiveness. Merely applying forces companies to review its entire operation in terms of quality deficiencies. D.

Characteristics of Management Science Applications * Management problems studies are so complicated that managers need help in analyzing a large number of variables. * Management science applications generally use economic implications as guidelines for making a particular decision. * The use of mathematical models to investigate the decision situation is typical in management science applications. * The use of computers. E. Management and the Internet *Applies the “If-Then” approach to explain the rise of the Cybercafe and to suggest a way of responding to the decline. V. THE CONTINGENCY APPROACH Emphasizes that what managers do in practice depends on, or is contingent upon, a given set of circumstances or situation. *Attempts to outline the conditions or situations in which various management methods have the best chance of success. *Main challenges in using the contingency approach include: * Perceiving organizational situations as they actually exist * Choosing the management tactics best suited to those situations * Competently implementing those tactics VI. THE SYSTEM APPROACH *Based on general system theory (to fully understand the operation of an entity, it must be viewed as a system). A system is a number of interdependent parts functioning as a whole for some purposes A. Types of Systems *Closed systems are not influenced by and do not interact with their environments; i. e. , a clock. *An open system is constantly interacting with its environment; i. e. , a plant or vegetable. B. Systems and “Wholeness” * The system must be viewed as a whole and modified only through changes in its parts. C. The Management System *Composed of a number of parts that function on an interdependent basis to achieve a purpose. *The three main parts are: *Organizational input *Organizational process Organizational output D. Information for Management System Analysis *Three primary information sources: *The classical approach to management *The behavioral approach to management *The management science approach to management *Triangular management uses these three information sources to analyze the management system. SUMMARY This chapter discusses six approaches to management situations and to solving organizational problems. The first one discussed is the classical approach to management. This approach deals with lower-level management analysis, such as was done by Frederick W.

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Taylor, Frank and Lillian Gilbreth, and Henry L. Gantt. It also is concerned with a comprehensive analysis of management as a whole, as exemplified by Henri Fayol. Because the human factor was not adequately emphasized in the classical approach, the behavioral approach to management was developed. This approach began with the experiments at the Hawthorne Works of Western Electric. This method emphasizes people. The third approach is the management science approach to management, which involves using the scientific method and mathematics to solve operational problems. This method began in World War II.

The approach is widely used today, especially by very large, complex organizations. The contingency approach to management emphasizes that what managers do in practice is dependent on a given set of circumstances. The approach is based on the premise that there is probably no one best way to solve a management problem in all organizations, but there is probably one best way to solve any given managerial problem in a specific organization. The fifth approach to management is the systems approach. This approach is based on the theory that to understand fully the operation of an entity, the entity must be viewed as a system.

There are two basic systems in management: closed systems and open systems. The effect of environmental factors on the management system cannot be overemphasized. Managers can use triangular management to get the information they need about their environments. The sixth approach to management is the Learning Organization approach. A learning organization is an organization that does well in creating, acquiring, and transferring knowledge, and in modifying behavior to reflect new knowledge. REVIEW QUESTIONS AND ANSWERS 1. List the six approaches to managing. The six approaches are: 1)the classical approach, (2) the behavioral approach, (3) the management science approach, (4) the contingency approach, (5) the system approach, and (6) the learning organization approach. 2. Define the classical approach to management. The classical approach to management can best be defined as the approach that stresses efficiency in the organization through task structuring. The task structuring involves the analysis of the task to determine the “one best way” to perform the task. This analysis is broken into two distinct areas: lower-level management and comprehensive management analysis.

Analysis of both areas concentrates on efficiency and organization. 3. Compare and contrast the contributions to the classical approach made by Frederick W. Taylor, Frank and Lillian Gilbreth, and Henry L. Gantt. In comparing these four people’s contributions to the classical approach, two points appear to be common to all. The first is the area in which they made their contributions—lower-level management. The second is their actual field of interest—that of increasing worker efficiency through application of the scientific method. However, these individuals all differed in the tools they used in their work.

These tools, by and large, constitute their contributions to the classical approach. For Taylor, the tool was a scientific designing of jobs, commonly referred to as scientific management. The Gilbreths further pursued this scientific method through the use of motion study. The analysis of basic movements was used to increase worker performance. The Gilbreths also introduced variables that Taylor chose to leave out—the behavioral variable of the workers and environment. Gantt sought to increase efficiency through the use of task scheduling and bonus innovation.

Gantt’s research led to the combining of many tasks and the provision of incentives to increase worker efficiency. 4. How does Henri Fayol’s contribution to the classical approach differ from the contributions of Taylor, the Gilbreths, and Gantt? Fayol’s contribution of the elements and general principles of management differs from the contributions of the others in that his contribution was directed at management as a whole, whereas Taylor, Gantt, and the Gilbreths concentrated their efforts on a study of management in terms of job design. Fayol concerned himself with the entire range of a manager’s performance.

Fayol, thus, moved beyond simple task structuring to a series of elements and principles for achieving organizational efficiency. 5. What is scientific management? Scientific management is a process that attempts to find the “one best way” to perform a task in order to achieve maximum worker productivity and efficiency. This process requires scientific inquiry through observation and experimentation, and results in the scientific design of the task based on these observations. 6. Describe motion study as used by the Gilbreths. Motion study, as used by the Gilbreths, involved the reduction of each job to the most basic movements possible.

These motions were then analyzed to form job performance standards and to eliminate unnecessary or wasted movements. The analysis was long and complicated and involved the examination of three variables in the task situation–the behavioral variables concerning the worker, the work environment, and the motion itself. 7. Describe Gantt’s innovation in the area of worker bonuses. Gantt believed that a “taskmaster” or manager should assign tasks in the worker’s interest to perform them; that is, that a bonus plan tied to the piece-rate system would encourage people to higher levels of production.

Gantt developed a system in which workers earned a bonus when their production went beyond their quota for the day. 8. List and define Fayol’s general principles of management. Fayol’s general principles of management are: (1)Division of work. Work should be divided among individuals and groups to ensure that effort and attention is focused on special portions of the task. Worker specialization is the best way to use the organization’s human resources. (2)Authority. Authority is the right to give orders and the power to exact obedience. Responsibility involves being accountable and must be associated with authority.

Whenever one assumes authority, one also assumes responsibility. (3)Discipline. The common effort of the workers is necessary if the organization is to be successful. (4)Unity of command. Workers should receive orders from only one manager. (5)Unity of direction. The entire organization should move towards a common objective, in a common direction. (6)Subordination of individual interests to the general interests. The interests of one person should not be put before those of the organization as a whole. (7)Remuneration. Many variables need to be considered in the determination of a worker’s pay.

These variables include cost of living, the success of the business, business conditions, and the supply of qualified personnel. (8)Centralization. In this lowering of the importance of the subordinate role, the degree to which an organization is centralized or decentralized depends upon the specific organization. (9)Scalar chain. Managers exist in a hierarchy, each having varying degrees of authority that decrease as they move down from the level of president. Lower-level managers should, thus, keep upper-level managers informed of their work activities. (10)Order.

For the sake of efficiency and to keep coordination problems to a minimum, all materials and people that are related to a specific kind of work should be assigned to the same general location in the organization. (11)Equity. All employees should be treated as equally as possible. (12)Stability and tenure of personnel. Retaining productive employees should always be a high priority for managers. (13)Initiative. New or additional work activities taken on through the self-direction of the worker should be encouraged by the manager. (14)Esprit de corps. Management should encourage harmony and general feelings among employees. 9.

What is the primary limitation to the classical approach to management? The primary limitation to the classical approach to management is the lack of consideration given to the human variable in the organization. The interpersonal areas of conflict, communication, leadership, and motivation are merely glanced over and, for the most part, ignored. 10. Define the behavioral approach to management. The behavioral approach to management involves organizational success from an understanding of people. Unlike the classical approach, production is increased by understanding the people in the organization and adapting the organization to them. 1. What is the significance of the studies at the Hawthorne Works of the Western Electric Company? The significance of these studies was the realization of the importance of human factors in the organization. The studies showed that the human variable could directly decrease or increase production levels. Managers recognize that they had to understand the influence that human factors could exert in an organization in order to maximize the positive effects and minimize the negative effects. 12. Describe the human relations movement. The human relations movement is a people-oriented approach to management.

The objective being to enhance organizational success through people. Human relation skills are those skills needed to work with people in such a way as to enhance company success. Abraham Maslow and Douglas McGregor are big advocates of the human relations movement. 13. What is the management science approach to management? The management science approach to management is the application of the scientific method to operational problems to arrive at a solution to those problems. As such, mathematical models must be constructed to represent the system. The problem’s solution is found by solving the equations that represent the system.

In contrast to the classical and behavioral approaches to managing, the management science approach advocates the use of the scientific method to increase production efficiency. 14. What are the steps in the scientific method of problem solving? The scientific method of problem solving has four steps, which must be followed in order. First, the manager should systematically observe the system whose behavior must be explained to solve the problem. Second, a model that is consistent with these observations and from which the consequences of changes in the system can be predicted must be constructed.

Third, the model should be used to determine how the system will react under conditions that have not yet been observed were such changes made in the system. Fourth, the manager should test the model by running an experiment on the actual system to see if the effects of changes made using the model actually do occur. 15. List and explain three characteristics of situations in which management science applications usually are made. Any three of the following four responses would be sufficient: (1) Increased effectiveness of decision making related to complex management situations.

Often the problems confronting management are quite complicated and involve the analysis of a large number of variables. The application of the scientific method makes such analysis less cumbersome through the use of mathematical models. (2)Use of economic implications as guidelines for making a particular decision. Management science techniques are best suited for analyzing quantifiable factors. The formulation of equations in constructing the models requires that the system be of this nature for the most part. (3)Use of mathematical models to investigate the decision situation.

Mathematical models are constructed in management science in an attempt to represent reality. Such models can then be used to test ways of improving the real-world situation without upsetting the actual system. (4)Use of a computer. Use of a computer is necessary in management science applications for two reasons: (1) the great complexity of the management problems in which this approach is applied, and (2) the sophisticated analysis performed on the problem-related information. 16. Define the contingency approach to management.

The contingency approach to management emphasizes the viewpoint that what managers do in practice depends on, or is contingent upon, a given set of circumstances—a situation. This approach attempts to outline the conditions or situations in which various management methods have the best chance of being successful. 17. What is a system? A system is a number of interdependent parts functioning as a whole for some purpose. An example would be the human body whose interdependent parts include many organs and tissues, many of which are highly specialized. 18. What is the difference between a closed and an open system?

A closed system does not interact with its environments, nor is it influenced by them. Such systems are mostly mechanical. Open systems, on the other hand, are constantly interacting with their environments. They are both influenced by and have influence upon their environment. 19. Explain the relationship between system analysis and “wholeness. ” “Wholeness” simply means that the system must be viewed as a whole and that modification of the system must be made only through changes in the parts of the system. More specifically, any analysis of the system must be made in the context of the whole system, not any one part.

In system analysis, the concept of wholeness must be emphasized. Studies of the interdependent parts must be secondary to analysis of the whole. The key to system analysis is an understanding of the “whole,” the nature of the parts, their role and function in the whole, and their integration and interrelatedness in the whole. 20. What are the parts of the management system? The system consists of three main parts: (1) organizational input, (2) organizational process, and (3) organizational output. More simply stated, these parts are resources, the production process, and finished goods.

These three represent a combination that exists to achieve organizational objectives. 21. Explain in your own words what is meant by a learning organization? A learning organization is an organization that does well in creating, acquiring, and transferring knowledge, and in modifying behavior to reflect new knowledge. SUGGESTED ANSWERS TO DISCUSSION QUESTIONS FOR CASE STUDY NOTE: See also the section “Suggested Activities” 1. Describe Al Dunlap’s management approach. Does it fit any of the classical or modern approaches? Explain. How does it contradict some point in these approaches.

The classical approach increases production through increased organizational efficiency. Taylor’s basic premise is that there is one best way to do a job. Dunlap seems to feel that an organization is always too top heavy and can be made to run more efficiently by slashing layers of unrelated employees and business ventures. The human relations approach seems to say that people are your most important commodity. 2. Delineate the good points and bad points of a massive downsizing effort—such as undertaken at Scott Paper—as if you were a stakeholder, and then, as if you were a shareholder. Are your two lists different?

Explain. As a stockholder, the good points regarding massive downsizing would be the increase in stock price and value as a result of bottom line improvement. The bad point may come with adverse publicity as to how people are being let go, and the companies morale and attitude start affecting the bottom line, thereby affecting stock values. As a stakeholder I would welcome downsizing if it were meant to keep the entire company afloat. The bad point would seem to encompass those that were let go and under what circumstances. Were they given counseling and training so as to help them to go elsewhere in the industry? . What factors were the keys to increased productivity at Scott Paper? How was Dunlap responsible for the company’s turnaround? Increased productivity in this case may have come from concern over keeping one’s job. Students might note that Dunlap has a particular way of doing business: if you disagree, then you will most probably be looking for another job. Dunlap turned Scott around through cost-cutting measures. Get rid of those people and operations that don’t contribute to the bottom line results. 4. Describe the kind of company that might hire Dunlap next.

What goals might its board of directors have? What problems might the company face? What companies in the news today fit your description? Dunlap would probably be hired by another company sinking fast under the weight of a bloated and inefficient work force. The board of directors are responsible to their stockholders and will do what is necessary to increase market value. The problems encountered by these companies might have to do with unionization or bad business ventures. Some of the companies that might fit this description would be TWA, Sears, and the banking industry. SUGGESTED ACTIVITIES . Ask students to think of complaints they may have concerning an organization and imagine that they have taken over as its top manager. Ask them to show how they would use the approaches suggested in this chapter to change the organization. 2. Every student has been a part of an organization at one time – if nothing else, at least as part of a school. Ask students to identify organizations which have used one or more of the approaches used in the chapter. Ask them to identify how well the approach worked, why it did or did not work, and what they think should have been done differently. . Ask students to identify how any of the approaches in the chapter could be applied in their personal lives. For example, is there anything about contingency management which might be useful to them in their individual lives? 4. In the study involving “Chainsaw Al Dunlap,” one of the questions asked about the type of company which might hire him next. Actually, he went on to take over Sunbeam, using much the same approach as he had before and the initial results were impressive. However, something went wrong and this time Dunlap was among those who were fired at Sunbeam.

Research Al Dunlap and Sunbeam to find out what happened and why. TEACHING NOTES FOR THE INTRODUCTORY CASE The introductory case uses an organization which has likely been patronized at some time by most students and will be known by all. The case points to McDonald’s attempt to deal with a decline in its market share. McDonald’s changed its approach, which involved prepackaged food ready to sell and customizing food only if requested. Instead, it sought to do as Burger King which promoted its approach with the slogan: “Have it your way. McDonald’s implemented a “one order at a time” approach which it felt would reduce waste from discarded food and increase freshness, while also better meeting individual wants. The approach involved a computerized system which was supposed to provide not customization but greater speed. The rest of the case study discussed how each of the management approaches might be used to improve effectiveness, customer service, and profitability. The case study opens an opportunity for interesting discussion. Students could be asked to comment on their observations concerning McDonald’s.

Have they noticed any change in service and quality, good or bad? How does McDonald’s service and quality compare to competitors—now versus previously? The case study did not explain how the computerized system resulted in both greater customization and faster service. Other things being equal, many would expect increased customization would result in slower service. Furthermore, if the computerized system has produced faster service using customization, would it not produce even faster service without customization. Ask students what they think is more important in a usiness which is known for being “fast food”—is it being “fast,” or is it the quality of food? Many will say that they want “both of the above” or that their priority may depend on whether they are in a hurry. The wrap-up case has the following questions. 1. Based on information in the introductory case, list three problems that you think future McDonald’s managers will have to solve. A variety of answers could be obtained depending on whether one focuses on competitors, changes in eating habits, legislation, environmental issues, employee availability, technology, and markets in the United States versus overseas markets. . What action(s) do you think the managers will have to take to solve these problems? Information and contingency plans will be required. As the fast food business matures in any country in which McDonald’s operates and as McDonald’s gains a dominant position within that country, it may require multiple approaches to keep from losing at least some market share occasion. 3. From what you know about fast-food restaurants, how easy would it be to manage a McDonald’s restaurant? Why? Students may have many responses.

They may point to the long hours, customer complaints, and stress. CLASSICAL APPROACH Classical management thought can be divided into three separate schools: scientific management, administrative theory and bureaucratic management. Classical theorists formulated principles for setting up and managing organizations. These views are labeled “classical” because they form the foundation for the field of management thought. The major contributors to the three schools of management thought – scientific management, administrative theory and bureaucratic management – are Frederick W.

Taylor, Henry Fayol and Max Weber respectively. Table 2. 3 gives a brief overview of the classical theories in management thought. Table 2. 3: A Brief Overview of Classical Theories ApproachRationaleFocus Scientific management One best way to do each job Job level Administrative principles One best way to put an organization together Organizational level Bureaucratic organization Rational and impersonal organizational arrangements Organizational level Scientific Management:- Scientific management became increasingly popular in the early 1900s.

In the early 19th century, scientific management was defined as “that kind of management which conducts a business or affairs by standards established, by facts or truths gained through systematic observation, experiment, or reasoning. ” In other words, it is a classical management approach that emphasizes the scientific study of work methods to improve the efficiency of the workers. Some of the earliest advocates of scientific management were Frederick W. Taylor (1856-1915), Frank Gilbreth (1868-1924), Lillian Gilbreth (1878-1972), and Henry Gantt (1861-1919).

Frederick Winslow Taylor Frederick Winslow Taylor took up Henry Towne’s challenge to develop principles of scientific management. Taylor, considered “father of scientific management”, wrote The Principles of Scientific Management in 1911. An engineer and inventor, Taylor first began to experiment with new managerial concepts in 1878 while employed at the Midvale Steel Co. At Midvale, his rise from laborer to chief engineer within 6 years gave him the opportunity to tackle a grave issue faced by the organization – the soldiering problem. Soldiering’ refers to the practice of employees deliberately working at a pace slower than their capabilities. According to Taylor, workers indulge in soldiering for three main reasons: Workers feared that if they increased their productivity, other workers would lose their jobs. Faulty wage systems employed by the organization encouraged them to work at a slow pace. Outdated methods of working handed down from generation to generation led to a great deal of wasted efforts. Taylor felt that the soldiering problem could be eliminated by developing a science of management. Table 2. 4 presents the steps in scientific management.

The scientific management approach involved using scientific methods to determine how a task should be done instead of depending on the previous experiences of the concerned worker. Table 2. 4: Four Steps in Scientific Management Step Description Step 1 Develop a science for each element of the job to replace old rule of thumb methods. Step 2 Scientifically select employees and then train them to do the job as described in Step 1. Step 3 Supervise employees to make sure they follow the prescribed methods for performing their jobs. Step 4 Continue to plan the work but use workers to actually get the work done.

In essence, scientific management as propounded by Taylor emphasizes: Need for developing a scientific way of performing each job. Training and preparing workers to perform that particular job. Establishing harmonious relations between management and workers so that the job is performed in the desired way. Exhibit 2. 1 Scientific Management – A Critique Scientific management focuses primarily on the work to be done. At the heart of scientific management is the organized study of work, the analysis of work into its simplest elements and systematic improvement of worker’s performance of each of these elements.

Scientific management can be described as a systematic philosophy of worker and work. Scientific management, in spite of the hype that it created has not completely succeeded in solving the problem of managing worker and work. In the words of Peter F. Drucker, “Scientific management has two blind spots – one engineering and one philosophical. ” The first blind spot is the belief that since work has to be divided into the simplest constituent motions, it should also be arranged as a series of individual motions – each motion being carried out by an individual worker.

It is quite correct to state that work should be analyzed by the motions that constitute it. But it is an erroneous view that by confining the work to an individual operation, one can do the work in a much better fashion. For the human resource to be used productively, the individual operations must be analyzed, studied and improved and jobs be formed out of these operations which utilize a worker’s specific talents. The second blind spot of scientific management is “the divorce of planning from doing. ” Work becomes more effective and productive if it involves a good amount of planning.

It would be absurd to say that the planner and the doer should be two different persons just because planning and doing have been separated in work analysis. Planning and doing are the separate parts of the same job. No work can be performed effectively unless it includes both these elements. As Drucker very aptly says, “Advocating the divorce of the two is like demanding that swallowing food and digesting it be carried out in two separate bodies. ” The two blind spots of scientific management help us understand why its application is met with resistance from the workers.

As a worker is taught individual motions, he acquires habit and experience rather than knowledge and understanding. As the emphasis is placed on the doing aspect, bringing in change would cause the workers to feel insecure. Scientific management does not take into consideration the fact that change is inevitable and one of the major functions of an organization is to bring about change. The two major managerial practices that emerged from Taylor’s approach to management are the piece-rate incentive system and the time-and-motion study. Piece-rate incentive system

Taylor felt that the wage system was one of the major reasons for soldiering. To resolve this problem, he advocated the use of a piece-rate incentive system. The aim of this system was to reward the worker who produced the maximum output. Under this system, a worker who met the established standards of performance would earn the basic wage rate set by management. If the worker’s output exceeded the set target, his wages would increase proportionately. The piece-rate system, according to Taylor, would motivate workers to produce more and thus help the organization perform better.

Time-and-motion study Taylor tried to determine the best way to perform each and every job. To do so, he introduced a method called “time-and-motion” study. In a “time-and-motion” study, jobs are broken down into various small tasks or motions and unnecessary motions are removed to find out the best way of doing a job. Then each part of the job is studied to find out the expected amount of goods that can be produced each day. The objective of a time-and-motion analysis is to ascertain a simpler, easier and better way of performing a work or job. Exhibit 2. Frederick W. Taylor – The Prophet of Efficiency Frederick W. Taylor rose from the rank of an apprentice to that of a Chief Engineer at Midvale Steel in a short span of six years. Taylor’s approach to efficiency was similar to that of a scientist – he observed, measured and recorded the most trivial tasks. He believed that no matter how easy a task seems, one needs to study it systematically to find the “one best way” to do that task. Taylor observed at Bethlehem Steel that each worker performed a variable amount of work depending on his ability.

He also noted that workers brought their own shovels to work and they used the same shovel for materials of different relative weights, like iron ore and ash. By analyzing carefully, Taylor determined that the optimum weight for shoveling was 21 pounds. He then suggested the use of shovels of different sizes for different classes of materials, thereby ensuring that the weight of the material being shoveled was around 21 pounds. By implementing Taylor’s plans of use of shovels of different sizes, the average amount shoveled was increased from 16 to 59 tons.

As a result of these changes, productivity improved and the company’s costs decreased despite an increase in the wages of workers. Thus, scientific management with its emphasis on measurement and analysis embodied the principle of efficiency. Behind the concept of Scientific management is a simple maxim: “Never assume that the best way of to do something is the way it has always been done. ” Frank and Lillian Gilbreth After Taylor, Frank and Lillian Gilbreth made numerous contributions to the concept of scientific management. Frank Gilbreth (1868-1924) is considered the “father of motion study. Lillian Gilbreth (1878-1972) was associated with the research pertaining to motion studies. Motion study involves finding out the best sequence and minimum number of motions needed to complete a task. Frank and Lillian Gilbreth were mainly involved in exploring new ways for eliminating unnecessary motions and reducing work fatigue. The Gilbreths devised a classification scheme to label seventeen basic hand motions – such as “search,” “select,” “position,” and “hold” – which they used to study tasks in a number of industries.

These 17 motions, which they called therbligs (Gilbreth spelled backward with the‘t’ and ‘h’ transposed), allowed them to analyze the exact elements of a worker’s hand movements. Frank Gilbreth also developed the micromotion study. A motion picture camera and a clock marked off in hundredths of seconds was used to study motions made by workers as they performed their tasks. He is best known for his experiments in reducing the number of motions in bricklaying. By carefully analyzing the bricklayer’s job, he was able to reduce the motions involved in bricklaying from 18 ? o 4. Using his approach, workers increased the number of bricks laid per day from 1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves. Lillian’s doctoral thesis (published in the early 1900s as The Psychology of Management) was one of the earliest works which applied the findings of psychology to the management of organizations. She had great interest in the human implications of scientific management and focused her attention on designing methods for improving the efficiency of workers.

She continued her innovative work even after Frank’s death in 1924, and became a professor of management at Purdue University. Lillian was the first woman to gain eminence as a major contributor to the development of management as a science. In recognition of her contributions to scientific management, she received twenty-two honorary degrees. Figure 2. 1 Gantt scheduling chart Henry Laurence Gantt Henry L. Gantt (1861-1919) was a close associate of Taylor at Midvale and Bethlehem Steel. Gantt later became an independent consultant and made several contributions to the field of management.

He is probably best remembered for his work on the task-and-bonus system and the Gantt chart. Under Gantt’s incentive plan, if the worker completed the work fast, i. e. in less than the standard time, he received a bonus. He also introduced an incentive plan for foremen, who would be paid a bonus for every worker who reached the daily standard. If all the workers under a foreman reached the daily standard, he would receive an extra bonus. Gantt felt that this system would motivate foremen to train workers to perform their tasks efficiently. The Gantt Chart (see Figure 2. ) is still used today by many organizations. It is a simple chart that compares actual and planned performances. The Gantt chart was the first simple visual device to maintain production control. The chart indicates the progress of production in terms of time rather than quantity. Along the horizontal axis of the chart, time, work scheduled and work completed are shown. The vertical axis identifies the individuals and machines assigned to these work schedules. The Gantt chart in Figure 2. 1 compares a firm’s scheduled output and expected completion dates to what was actually produced during the year.

Gantt’s charting procedures were precursors of today’s program evaluation and review techniques. Limitations of scientific management Scientific management has provided many valuable insights in the development of management thought. In spite of the numerous contributions it made, there are a few limitations of scientific management. They are: The principles of scientific management revolve round problems at the operational level and do not focus on the management of an organization from a manager’s point of view. These principles focus on the solutions of problems from an engineering point of view.

The proponents of scientific management were of the opinion that people were “rational” and were motivated primarily by the desire for material gain. Taylor and his followers overlooked the social needs of workers and overemphasized their economic and physical needs. Scientific management theorists also ignored the human desire for job satisfaction. Since workers are more likely to go on strike over factors like working conditions and job content (the job itself) rather than salary, principles of scientific management, which were based on the “rational worker” model, became increasingly ineffective. Administrative Theory

While the proponents of scientific management developed principles that could help workers perform their tasks more efficiently, another classical theory – the administrative management theory – focused on principles that could be used by managers to coordinate the internal activities of organizations. The most prominent of the administrative theorists was Henri Fayol. Henri Fayol French industrialist Henri Fayol (1841-1925), a prominent European management theorist, developed a general theory of management. Fayol believed that “with scientific forecasting and proper methods of management, satisfactory results were inevitable. Fayol was unknown to American managers and scholars until his most important work, General and Industrial Management, was translated into English in 1949. Many of the managerial concepts that we take for granted today were first articulated by Fayol. According to Fayol, the business operations of an organization could be divided into six activities. : Business Operations of an Organization Technica- Producing and manufacturing products. Commercial – Buying, selling and exchange. Financial – Search for and optimal use of capital. Security – Protecting employees and property.

Accounting – Recording and taking stock of costs, profits, and liabilities,maintaining balance sheets, and compiling statistics. Managerial – Planning, organizing, commanding, coordinating and controlling. Fayol focused on the last activity, managerial activity. Within this, he identified five major functions: planning, organizing, commanding, coordinating and controlling. Fayol’s five management functions are clearly similar to the modern management functions – planning, organizing, staffing, leading and controlling – described in Chapter 1.

Fayol’s concept of management forms the cornerstone of contemporary management theory. Fayol outlined fourteen principles of management: Division of work: Work specialization results in improving efficiency of operations. The concept of division of work can be applied to both managerial and technical functions. Authority and responsibility: Authority is defined as “the right to give orders and the power to exact obedience. ” Authority can be formal or personal. Formal authority is derived from one’s official position and personal authority is derived from factors like intelligence and experience.

Authority and responsibility go hand-in-hand. When a manager exercises authority, he should be held responsible for getting the work done in the desired manner. Discipline: Discipline is vital for running an organization smoothly. It involves obedience to authority, adherence to rules, respect for superiors and dedication to one’s job. Unity of command: Each employee should receive orders or instructions from one superior only. Unity of direction: Activities should be organized in such a way that they all come under one plan and are supervised by only one person.

Subordination of the individual interest to the general interest: Individual interests should not take precedence over the goals of the organization. Remuneration: The compensation paid to employees should be fair and based on factors like business conditions, cost of living, productivity of employees and the ability of the firm to pay. Centralization: Depending on the situation, an organization should adopt a centralized or decentralized approach to make optimum use of its personnel. Scalar chain: This refers to the chain of authority that extends from the top to the bottom of an organization.

The scalar chain defines the communication path in an organization. Order: This refers to both material and social order in organizations. Material order indicates that everything is kept in the right place to facilitate the smooth coordination of work activities. Similarly, social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization). Equity: All employees should be treated fairly. A manager should treat all employees in the same manner without prejudice.

Stability of tenure of personnel: A high labor turnover should be prevented and managers should motivate their employees to do a better job. Initiative: Employees should be encouraged to give suggestions and develop new and better work practices. Espirit de corps: This means “a sense of union. ” Management must inculcate a team spirit in its employees. Bureaucratic Management Bureaucratic management, one of the schools of classical management, emphasizes the need for organizations to function on a rational basis. Weber (1864-1920), a contemporary of Fayol, was one of the major contributors to this school of thought.

He observed that nepotism (hiring of relatives regardless of their competence) was prevalent in most organizations. Weber felt that nepotism was grossly unjust and hindered the progress of individuals. He therefore identified the characteristics of an ideal bureaucracy to show how large organizations should be run. The term “bureaucracy” (derived from the German buro, meaning office) referred to organizations that operated on a rational basis. According to Weber, “a bureaucracy is a highly structured, formalized, and impersonal organization. In other words, it is a formal organization structure with a set of rules and regulations. The characteristics of Weber’s ideal bureaucratic structure are outlined in Table 2. 5. These characteristics would exist to a greater degree in “ideal” organizations and to a lesser degree in other, less perfect organizations. Table 2. 5: Major Characteristics of Weber’s Ideal Bureaucracy CharacteristicDescription Work specialization and division of labor The duties and responsibilities of all the employees are clearly defined. Jobs are divided into tasks and subtasks.

Each employee is given a particular task to perform repeatedly so that he acquires expertise in that task. Abstract rules and regulations The rules and regulations that are to be followed by employees are well defined to instill discipline in them and to ensure that they work in a co-coordinated manner to achieve the goals of the organization. Impersonality of managers Managers make rational decisions and judgments based purely on facts. They try to be immune to feelings like affection, enthusiasm, hatred and passion so as to remain unattached and unbiased towards their subordinates.

Hierarchy of organization structure The activities of employees at each level are monitored by employees at higher levels. Subordinates do not take any decision on their own and always look up to their superiors for approval of their ideas and opinions. The term “bureaucracy” is sometimes used to denote red tapism and too many rules. However, the bureaucratic characteristics of organizations outlined by Weber have certain advantages. They help remove ambiguities and inefficiencies that characterize many organizations. In addition, they undermine the culture of patronage that he saw in many organizations.

Limitations of bureaucratic management and administrative theory Scholars who emphasized the human approach to management criticized classical theorists on several grounds. They felt that the management principles propounded by the classical theorists were not universally applicable to today’s complex organizations. Moreover, some of Fayol’s principles, like that of specialization, were frequently in conflict with the principle of unity of command. Weber’s concept of bureaucracy is not as popular today as it was when it was first proposed.

The principal characteristics of bureaucracy – strict division of labor, adherence to formal rules and regulations, and impersonal application of rules and controls – destroy individual creativity and the flexibility to respond to complex changes in the global environment. Classical theorists ignored important aspects of organizational behavior. They did not deal with the problems of leadership, motivation, power or informal relations. They stressed productivity above other aspects of management. They also failed to consider the impact of the external and internal environment upon employee behavior in organizations.

Principle of management:- Contribution of Henri Fayol, Administrative Management theory in classical theory of management Evaluation of management The Classical theory of management Administrative Management (Contribution of Henri Fayol) Henri Fayol was real father of modern Management. Henri Fayol is the French industrialist in 1841-1925. He was a mining engineer in. Henri Fayol spent his entire working career in French industry; French cool and iron combine of commentary fourchambault. Henri Fayol developed a general theory of Business Administration.

Henri Fayol was concerned the principles of organization and the function of management. Fayol laid the foundation of management as a separate body of knowledge. He always insisted that if scientific forecasting and proper methods are used in management than company can get satisfactory results. According to Fayol, management was not personal talent; it is a knowledge base skill. Henri Fayol’s Administrative Management is based on six admin activities. They are- 1. Technical : Production and manufacture 2. Managerial : Planning, controlling, co-ordination 3. Commercial : Purchasing and selling . Financial : Use of capital 5. Accounting : Asset, Liabilities, cost, profits 6. Security : Protection of goods and Person Fayol’s fourteen Principles of management Fayol derived the following fourteen principles. – · Division of work: Division of work means specialization. Each job and work should be divided into small task and should be assigned to specialist of it. · Authority and responsibility: Authority means right to give order and command while responsibility means to accomplish objective. · Discipline: Discipline is required at every level in every organization.

Fayol stated discipline in terms of obedience, application, and respect to superiors. · Unity of command: A subordinate should receive order from only one boss. · Unity of direction: It means that all the works of an organization must work together to accomplish a common objective in under one plan and head. · Subordination of individual interest to common interest: Worker follows the common interest of organization rather than individual. · Remuneration: Remuneration should be fair and adequate. It includes both types of incentives financial as well as non financial. Centralization: There should be one central point in organization which exercises overall direction and control of all the parts. · Scalar Chain: Scalar chain is the chain or line of command from superior to subordinates. · Order: Only proper order can give an efficient management. · Equity: Equity creates loyalty and devotion among the employees. · Stability of tenure personnel: Security of job for an employee in an organization is very important and pre-requisite condition. Retaining productive employee should always a higher priority of management. Esprit de corps: Management should encourage harmony and proper understandings between workers. Fayol said that in union there is strength. Whole organization should work as a team. · Initiative: Manager should be encouraged the employees Initiative for creative working. Frank and Lillian Gilbreth were a husband-and-wife team who worked as engineers in the early part of the 20th century. Lillian carried on this work after the death of Frank in 1924. Their main focus was on the fields of motion study and time study, combined with an interest on the psychology of efficiency and work.

The Gilbreth theory held that there was a “one best way” to do any task. Efficiency, according to the Gilbreth business management theory, could therefore be improved by finding this “one best way” and replicating it throughout the manufacturing process. The Gilbreths used new technologies such as film to break motions down into incremental parts, which they called “therbligs. ” By reducing the number of “therbligs” for any task, one could increase the efficiency of the worker. The management theory of Frank and Lillian Gilbreth can be summed up by the following: 1. Reduce the number of motions in a task to increase efficiency. . Focus on the incremental study of motions and time to understand an entire task. 3. The goal of increased efficiency is both increased profit and greater worker satisfaction. Look into the technical aspects of the Lillian and Frank Gilbreth management theory As famous early engineers and experts in the field of motion study, the Gilbreths have several websites devoted to them. Most of these websites give a good overview of the Gilbreth management theory. The technical details of the Gilbreth business management theory are the key to the understanding and implementation of this theory in work situations.

By familiarizing yourself with this theory, you can take advantage of its benefits. biography of Lillian, with some technical details about her work, is available from the San Diego Supercomputer Center. A brief biography and look at the Lillian and Frank Gilbreth management theory is provided by Accel-Team. One major aspect of the Gilbreth theory, the concept of therbligs, is explained in an article on the Gilbreth Network. The Internet Archive offers an edited version of the Gilbreths’ original films of their motion study techniques.

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