Frank and lillian gilbreth developed the principle of

CHAPTER 2

The Evolution of Management

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Learning Objectives

1 Describe the origins of management practice and its early concepts and influences.

2 Summarize the five classical approaches to management.

3 Discuss the four contemporary approaches to management.

4 Identify modern contributors who have shaped management thought and practices.

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Key Points Topics included in this chapter: early concepts of management, classical approaches to management such as scientific management and bureaucracy, contemporary approaches to management such as organizational behavior and systems theory, and modern contributors to management thought and practices

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Origins of Management (1 of 3)

While, as a formal area of study, the field of management is relatively new, evidence of formalized management practices have been found dating back to 5000 BC.

The industrial revolution promoted a more structured approach to work.

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What is a chapter about history doing in a management textbook? It provides context for understanding how managerial approaches have evolved over time. Today’s taken-for-granted management practices—efficiency, division of labor, pay for performance, cooperative work environments, equitable treatment of employees, decentralized decision making, empowerment, autonomy, and teamwork—originated from earlier contributions to management thought.

The management profession as we know it today is relatively new. This chapter explores the roots and influences of modern management theory. Understanding the origins of management thought will help you grasp the underlying contexts of the ideas and concepts presented in the chapters ahead. Although this chapter is titled “The Evolution of Management,” it might be more appropriately called “The Revolutions of Management” because it documents the wide swings in management approaches over the last 100 years. Parts of each of these approaches have survived and found their way into modern perspectives on management. Thus, the legacy of past efforts, breakthroughs, and failures has become our guide to current and future management practice.

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Origins of Management (2 of 3)

Around 4000 BC, the Egyptians used planning, organizing, leading, and controlling to build their great pyramids.

As early as 1100 BC, the Chinese applied the managerial concepts of delegation, cooperation, efficiency, organization, and control.

In 500 BC, Sun Tzu discussed the importance of planning and leading in his book The Art of War.

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Additional detail on the origins of management slide 2

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Origins of Management (3 of 3)

Around 400–350 BC, the Greeks recognized management as a separate art and advocated a scientific approach to work.

Around AD 1436, the Venetians standardized production through the use of an assembly line..

In 1776, Adam Smith discussed control and the principle of specialization with regard to manufacturing workers.

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Additional detail on the origins of management

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Exhibit 2.1 The Evolution of Management Thought

Jump to Appendix 1 for description

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Exhibit 2.1 provides a timeline depicting the evolution of management thought through the decades. This historical perspective is divided into two major sections: classical approaches and contemporary approaches. Many of these approaches overlapped as they developed, and they often had a significant impact on one another. Some approaches were a direct reaction to the perceived deficiencies of previous approaches. Others developed as the needs and issues confronting managers changed over the years. All the approaches attempted to explain the real issues facing managers and provide them with tools to solve future problems.

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Classical Approaches

Systematic management

A classical management approach that attempted to build into operations the specific procedures and processes that would ensure coordination of effort to achieve established goals and plans

Scientific management

A classical management approach that applied scientific methods to analyze and determine the “one best way” to complete production tasks

Introduced by Frederick Taylor

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The systematic management approach attempted to build specific procedures and processes into operations to ensure coordination of effort. Systematic management emphasized economical operations, adequate staffing, maintenance of inventories to meet consumer demand, and organizational control. These goals were achieved through

Careful definition of duties and responsibilities.

Standardized techniques for performing these duties.

Specific means of gathering, handling, transmitting, and analyzing information.

Cost accounting, wage, and production control systems to facilitate internal coordination and communications.

Systematic management failed to lead to widespread production efficiency. This shortcoming became apparent to a young engineer named Frederick Taylor, who was hired by Midvale Steel Company in 1878. Taylor discovered that production and pay were poor, inefficiency and waste were prevalent, and most companies had tremendous unused potential. He concluded that management decisions were unsystematic and that no research to determine the best means of production existed.

In response, Taylor introduced a second approach to management, known as scientific management.This approach advocated the application of scientific methods to analyze work and to determine how to complete production tasks efficiently. For example, U.S. Steel’s contract with the United Steel Workers of America specified that sand shovelers should move 12.5 shovelfuls per minute; shovelfuls should average 15 pounds of river sand composed of 5.5 percent moisture.

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Taylor’s Four Principles of Scientific Management

Management should develop a precise, scientific approach for each element of one’s work.

Management should scientifically select, train, teach, and develop each worker.

Management should cooperate with workers.

Management should ensure an appropriate division of work and responsibility.

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Taylor identified four principles of scientific management as shown on the slide.

To implement this approach, Taylor used techniques such as time-and-motion studies. With this technique, a task was divided into its basic movements, and different motions were timed to determine the most efficient way to complete the task. After the “one best way” to perform the job was identified, Taylor stressed the importance of hiring and training the proper worker to do that job. Taylor advocated the standardization of tools, the use of instruction cards to help workers, and breaks to eliminate fatigue. Another key element of Taylor’s approach was the use of the differential piecerate system. Taylor assumed workers were motivated by receiving money. Therefore, he implemented a pay system in which workers were paid additional wages when they exceeded a standard level of output for each job. Taylor concluded that both workers and management would benefit from such an approach.

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Scientific Management

Henry L. Gantt worked with and became a protégé of Frederick Taylor.

He expanded on the piecerate system by suggesting that frontline supervisors should receive a bonus for each of their workers who completed their assigned daily tasks.

Gantt is also known for creating the Gantt chart, which helps employees and managers plan projects by task and time to complete those tasks.

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Henry L. Gantt worked with and became a protégé of Frederick Taylor’s.

Like Taylor, he believed in scientific management and the need for management and labor to cooperate. He expanded on the piecerate system by suggesting that frontline supervisors should receive a bonus for each of their workers who completed their assigned daily tasks.

Gantt believed that this would motivate supervisors to provide extra attention and training to those workers who were struggling with meeting their output goals.

He is also known for creating the Gantt chart, which helps employees and managers plan projects by task and time to complete those tasks. An interesting aspect of the chart is that it illustrates how some tasks need to be done during the same time period. Today, Gantt charts (available through Microsoft Project and other project software) are used in several fields for a wide variety of projects.

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Using a Gantt Chart for a Team Research Project at School

Step Task Assigned to Accomplish Task
Aug Sept Oct Nov Dec
1 Review assignment. All team members …8/28
2 Meet as group to discuss and identify areas for clarification. All team members …9/5
3 Identify team leader. All team members …9/8
4 Meet with professor to clarify objectives of assignment. Team leader …9/12
5 Meet as group to divide responsibilities. Team leader and members …9/18
6 Write sections 1–3. Member B ...10/31
7 Write sections 4–6. Member C ...10/31
8 8 Write introduction and conclusion and type bibliography. Member D ...10/31
9 Edit entire paper. Team leader …11/15
10 Prepare PPT slides for presentation. Member E …11/20
11 Practice/rehearse presentation. Team leader and members …11/22
12 Submit completed paper and deliver presentation. Team leader and members …12/1
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The slide contains a larger print version f Exhibit 2.2

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Other Management Pioneers

Frank and Lillian Gilbreth used “motion studies” to identify and remove wasteful movements so workers could be more efficient and productive.

Max Weber advocated bureaucracy.

This classical management approach emphasizes a structured, formal network of relationships among specialized positions in the organization.

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Frank B. and Lillian M. Gilbreth formed a productive husband and wife team. Frank was a strong believer in Taylor’s philosophies. While working as a supervisor of bricklayers, Frank Gilbreth developed a system to lower costs and increase worker productivity by showing how employees could work smarter, not harder. His analysis showed how the number of motions for the average bricklayer could be reduced from 18 to 4, allowing worker productivity to increase from 1,000 to 2,700 bricks laid each day. This success inspired Gilbreth to use a motion picture camera (with a clock in the foreground) to capture the precise movements of workers as they accomplished tasks. These “motion studies” were used to identify and remove wasteful movements so workers could be more efficient and productive.

Lillian Gilbreth was also an influential contributor to management thought and practice. Known as the “mother of modern management,” she earned a PhD in psychology and later taught at Purdue University as a professor of management and the first female professor in the engineering school. While supportive of her husband’s work, Lillian Gilbreth eventually focused less on the technical and more on the human side of management. She was interested in how job satisfaction motivated employees, how motion studies could be used to help disabled individuals perform jobs, and how fatigue and stress affected workers’ well-being and productivity.

The ideal model for management, according to Weber, is the bureaucracy approach.

Weber believed bureaucratic structures can eliminate the variability that results when managers in the same organization have different skills, experiences, and goals. Weber advocated that the jobs themselves be standardized so that personnel changes would not disrupt the organization. He emphasized a structured, formal network of relationships among specialized positions in an organization. Rules and regulations standardize behavior, and authority resides in positions rather than in individuals. As a result, the organization need not rely on a particular individual, but will realize efficiency and success by following the rules in a routine and unbiased manner.

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Exhibit 2.3 Characteristics of an Effective Bureaucracy

DIVISION OF LABOR Tasks, assignments, and authority are specified.

AUTHORITY A chain of command or hierarchy is well established.

QUALIFICATIONS Employees are selected and promoted based on merit.

OWNERSHIP Managers, not owners, should run the organization.

RULES Impersonal rules should be applied consistently and fairly.

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The ideal model for management, according to Weber, is the bureaucracy approach. Weber believed bureaucratic structures can eliminate the variability that results when managers in the same organization have different skills, experiences, and goals. As illustrated in Exhibit 2.3, Weber advocated that the jobs themselves be standardized so that personnel changes would not disrupt the organization. He emphasized a structured, formal network of relationships among specialized positions in an organization. Rules and regulations standardize behavior, and authority resides in positions rather than in individuals. As a result, the organization need not rely on a particular individual, but will realize efficiency and success by following the rules in a routine and unbiased manner.

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Your Turn 1

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Question:

The U.S. military is legendary in terms of its bureaucracy.

In what ways does this structure benefit the organization?

In what ways might it hinder the organization?

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The U.S. military is legendary in terms of its bureaucracy. In what ways does this structure benefit the organization? In what ways might it hinder the organization?

The military structure is efficient and productive and relies on specialized skills of military officials. However, some people perform best without excessive rules and procedures, which can limit creativity.

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Administrative Management Pioneers (1 of 3)

Henri Fayol

Fayol advocated administrative management, a classical management approach that attempted to identify major principles and functions that managers could use to achieve superior organizational performance.

He identified five functions and 14 principles of management. The five functions are planning, organizing, commanding, coordinating, and controlling.

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The administrative management approach emphasized the perspective of senior managers within the organization, and argued that management was a profession and could be taught.

An explicit and broad framework for administrative management emerged in 1916, when Henri Fayol, a French mining engineer and executive, published a book summarizing his management experiences. Fayol identified five functions and 14 principles of management. The five functions, which are very similar to the four functions discussed in Chapter 1, are planning, organizing, commanding, coordinating, and controlling.

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Exhibit 2.4 Fayol’s 14 Principles of Management

1. Division of work—divide work into specialized tasks and assign responsibilities to specific individuals.
2. Authority—delegate authority along with responsibility.
3. Discipline—make expectations clear and punish violations.
4. Unity of command—each employee should be assigned to only one supervisor.
5. Unity of direction—employee’s efforts should be focused on achieving organizational objectives.
6. Subordination of individual interest to the general interest—the general interest must predominate.
7. Remuneration—systematically reward efforts that support the organization’s direction.
8. Centralization—determine the relative importance of superior and subordinate roles.
9. Scalar chain—keep communications within the chain of command.
10. Order—order jobs and material so they support the organization’s direction.
11. Equity—fair discipline and order enhance employee commitment.
12. Stability and tenure of personnel—promote employee loyalty and longevity.
13. Initiative—encourage employees to act on their own in support of the organization’s direction.
14. Esprit de corps—promote a unity of interests between employees and management.
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Administrative Management Pioneers (2 of 3)

Chester Barnard

Published The Functions of the Executive in 1938 outlining the role of the senior executive: formulating the purpose of the organization, hiring key individuals, and maintaining organizational communications

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A host of other executives contributed to the administrative management literature. These writers discussed a broad spectrum of management topics, including the social responsibilities of management, the philosophy of management, clarification of business terms and concepts, and organizational principles. Chester Barnard’s and Mary Parker Follett’s contributions have become classic works in this area.

Barnard, former president of New Jersey Bell Telephone Company, published his landmark book The Functions of the Executive in 1938. He outlined the role of the senior executive: formulating the purpose of the organization, hiring key individuals, and maintaining organizational communications. Mary Parker Follett’s 1942 book Dynamic Administration extended Barnard’s work by emphasizing the continually changing situations that managers face. Two of her key contributions—the notion that managers desire flexibility and the differences between motivating groups and individuals— laid the groundwork for the modern contingency approach discussed later in the chapter.

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Administrative Management Pioneers (3 of 3)

Mary Parker Follett

Emphasizing the continually changing situations that managers face

Two key contributions

The notion that managers desire flexibility

The differences between motivating groups and individuals

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Mary Parker Follett’s 1942 book Dynamic Administration extended Barnard’s work by emphasizing the continually changing situations that managers face. Two of her key contributions—the notion that managers desire flexibility and the differences between motivating groups and individuals— laid the groundwork for the modern contingency approach discussed later in the chapter.

All the writings in the administrative management area emphasize management as a profession along with fields such as law and medicine. In addition, these authors offered many recommendations based on their personal experiences, which often included managing large corporations. Although these perspectives and recommendations were considered sound, critics noted that they might not work in all settings. Different types of personnel, industry conditions, and technologies may affect the appropriateness of these principles.

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Your Turn 2

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Question:

The workplace has changed dramatically since 1916 when Fayol published his 14 principles.

Referring to Exhibit 2.4, which of these principles remain important today and why?

Which principles are less relevant today and why?

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The work environment and the workforce have changed significantly since 1916, when Henri Fayol published a book identifying the functions and principles of management. Look at Fayol’s Principles of Management (Exhibit 2.4, page 33 ). Which of these principles do you believe still are important in the contemporary workforce? In what ways do you see them as remaining important? Which of these principles are less applicable today? Why?

Students will vary in their responses but may note that concepts such as authority, unity of directive, and equity remain highly important, whereas division of work, centralization, and stability and tenure of personnel remain less important. That is, jobs have become less specialized, and centralized, and life-long tenure within a given organization is less of a reality today.

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Human Relations (1 of 3)

Human relations

A classical management approach that attempted to understand and explain how human psychological and social processes interact with the formal aspects of the work situation to influence performance

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A fourth approach to management, human relations, developed during the 1930s. This approach aimed at understanding how psychological and social processes interact with the work situation to influence performance. Human relations was the first major approach to emphasize informal work relationships and worker satisfaction. This approach owes much to other major schools of thought. For example, many of the ideas of the Gilbreths (scientific management) and Barnard and Follett (administrative management) influenced the development of human relations from 1930 to 1955. In fact, human relations emerged from a research project that began as a scientific management study.

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Human Relations (2 of 3)

Hawthorne effect

People’s reactions to being observed or studied, resulting in superficial rather than meaningful changes in behavior

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Western Electric Company, a manufacturer of communications equipment, hired a team of Harvard researchers led by Elton Mayo and Fritz Roethlisberger. They were to investigate the influence of physical working conditions on workers’ productivity and efficiency in one of the company’s factories outside Chicago.

This research project, known as the Hawthorne Studies, provided some of the most interesting and controversial results in the history of management. The Hawthorne Studies were a series of experiments conducted from 1924 to 1932. During the first stage of the project (the Illumination Experiments), various working conditions, particularly the lighting in the factory, were altered to determine the effects of those changes on productivity. The researchers found no systematic relationship between the factory lighting and production levels. In some cases, productivity continued to increase even when the illumination was reduced to the level of moonlight. The researchers concluded that the workers performed and reacted differently because the researchers were observing them. This reaction is known as the Hawthorne effect.

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Human Relations (3 of 3)

Abraham Maslow suggested that humans have five levels of needs and are motivated to satisfy unmet.

Exhibit 11.5: A conception of human needs organizing needs into a hierarchy of five major types

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Another noted contributor to the field of human relations was Abraham Maslow.

In 1943, Maslow suggested that humans have five levels of needs. The most basic needs are the physical needs for food, water, and shelter; the most advanced need is for self-actualization, or personal fulfillment. Maslow argued that people try to satisfy their lower-level needs and then progress upward to the higher-level needs. Managers can facilitate this process and achieve organizational goals by removing obstacles and encouraging behaviors that satisfy people’s needs and organizational goals simultaneously.

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Contemporary Approaches (1 of 5)

Sociotechnical systems theory

An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees’ interpersonal relationships and other human aspects of the work

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Although the human relations approach generated research into leadership, job attitudes, and group dynamics, it drew heavy criticism. Critics believed that one result of human relations—a belief that a happy worker was a productive worker—was too simplistic. While scientific management overemphasized the economic and formal aspects of the workplace, human relations ignored the more rational side of the worker and the important characteristics of the formal organization. However, human relations was a significant step in the development of management thought because it prompted managers and researchers to consider the psychological and social factors that influence performance.

The contemporary approaches to management include sociotechnical systems theory, quantitative management, organizational behavior, and systems theory. The contemporary approaches have developed at various times since World War II, and they continue t

to represent the cornerstones of modern management thought.

Drawing on several classical approaches, sociotechnical systems theory suggests that organizations are effective when their employees (the social system) have the right tools, training, and knowledge (the technical system) to make products and services that are valued by customers. Developed in the early 1950s by researchers from the London-based Tavistock Institute of Human Relations, sociotechnical systems theory explained how important it was to understand how coal miners’ social behaviors interacted with the technical production system of their organizations. The researchers found that when there was a good fit between these two important internal dimensions and the demands of customers external to the organization, the organizations could reach higher levels of effectiveness.

While research on sociotechnical systems theory was a precursor to the total quality management (TQM) movement (discussed in other chapters), it also promoted the use of teamwork and semiautonomous work groups as important factors for creating efficient production systems. The researchers believed that workers should be given the freedom to correct problems at early stages of the production process rather than after products were made, when errors would create waste.30

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Contemporary Approaches (2 of 5)

Quantitative management

An approach that emphasizes the application of quantitative analysis to managerial decisions and problems

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Although Taylor introduced the use of science as a management tool early in the 20th century, most organizations did not adopt the use of quantitative techniques for management problems until the 1940s and 1950s.

During World War II, military planners began to apply mathematical techniques to defense and logistic problems. After the war, private corporations began assembling teams of quantitative experts to tackle many of the complex issues confronting large organizations. This approach, referred to as quantitative management, emphasizes the application of quantitative analysis to management decisions and problems.

Quantitative management helps a manager make a decision by developing formal mathematical models of the problem. Computers facilitated the development of specific quantitative methods. These include such techniques as statistical decision theory, linear programming, queuing theory, simulation, forecasting, inventory modeling, network modeling, and breakeven analysis.

Organizations apply these techniques in many areas, including production, quality control, marketing, human resources, finance, distribution, planning, and research and development. One particular area of quantitative management known as “big data” is increasingly being used by managers to analyze patterns in structured and unstructured data. The idea is that more accurate analyses and decision making can result in “greater operational efficiencies, cost reductions, and reduced risk.”

Despite the promise quantitative management holds, managers do not rely on these methods as the primary approach to decision making. Typically, they use these techniques as a supplement or tool in the decision process. Many managers will use results that are consistent with their experience, intuition, and judgment, but they often reject results that contradict their beliefs. Also, managers may use the process to compare alternatives and eliminate weaker options.

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Contemporary Approaches (3 of 5)

Organizational behavior

An approach that studies and identifies management activities that promote employee effectiveness by examining the complex and dynamic nature of individual, group, and organizational processes

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During the 1950s, a transition took place in the human relations approach. Scholars began to recognize that worker productivity and organizational success are based on more than the satisfaction of economic or social needs. The revised perspective, known as organizational behavior, studies and identifies management activities that promote employee effectiveness through an understanding of the complex nature of individual, group, and organizational processes.

Organizational behavior draws from a variety of disciplines, including psychology and sociology, to explain the behavior of people on the job. During the 1960s, organizational behaviorists heavily influenced the field of management. Douglas McGregor’s Theory X and Theory Y marked the transition from human relations. According to McGregor, Theory X managers assume workers are lazy and irresponsible and require constant supervision and external motivation to achieve organizational goals. Theory Y managers assume employees want to work and can direct and control themselves. An important implication for managers who subscribe to Theory X is known as a self-fulfilling prophecy. This occurs when a manager treats employees as lazy, unmotivated, and in need of tight supervision; then the employees eventually fulfill the manager’s expectations by acting that way. This cycle can have several negative implications for managers, employees, and organizations. McGregor advocated a Theory Y perspective, suggesting that managers who encourage participation and allow opportunities for individual challenge and initiative would achieve superior performance.

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Contemporary Approaches (4 of 5)

Systems theory

A theory stating that an organization is a managed system that changes inputs into outputs

Exhibit 2.5: Open-system perspective of an organization

Jump to Appendix 2 long image description

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The classical approaches as a whole were criticized because they (1) ignored the relationship between the organization and its external environment and (2) usually stressed one aspect of the organization or its employees at the expense of other considerations. In response to these criticisms, management scholars during the 1950s stepped back from the details of the organization to attempt to understand it as a whole system. These efforts were based on a general scientific approach called systems theory. Organizations are open systems, dependent on inputs from the outside world, such as raw materials, human resources, and capital. They transform these inputs into outputs that (ideally) meet the market’s needs for goods and services. The environment reacts to the outputs through a feedback loop; this feedback provides input for the next cycle of the system. The process repeats itself for the life of the system, and is illustrated in Exhibit 2.5

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Contemporary Approaches (5 of 5)

Contingency perspective

Proposes that the managerial strategies, structures, and processes that result in high performance depend on the characteristics, or important contingencies, or the situation in which they are applied

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Building on systems theory ideas, the contingency perspective refutes universal principles of management by stating that a variety of factors, both internal and external to the firm, may affect the organization’s performance. Therefore, there is no “one best way” to manage and organize because circumstances vary.

Situational characteristics are called contingencies. Understanding contingencies helps a manager know which sets of circumstances dictate which management actions. You will learn recommendations for the major contingencies throughout this course.

The contingencies include Circumstances in the organization’s external environment. The internal strengths and weaknesses of the organization. The values, goals, skills, and attitudes of managers and workers in the organization. The types of tasks, resources, and technologies the organization uses.

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Modern Contributors (1 of 2)

Porter – competitive strategy

Published over 125 articles and 18 books on the subject and related topics

Hamel – management innovation

Ranked as the “world’s most influential business thinker”

Drucker – need for organizations to set clear objectives

Popularized concepts such as MBO, decentralization, humans as assets, and knowledge workers

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In addition to the historical figures that we discussed earlier in this chapter, several individuals from more recent times have influenced (through their leadership, interviews, presentations, or writing) the way management is practiced in today’s organizations.

Michael Porter, professor at Harvard University, is a well-known and influential expert on competitive strategy. He has published more than 125 research articles and 18 books on the subject and related areas, including Competitive Strategy: Creating and Sustaining Superior Performance. Two of his influential research articles are titled “What Is Strategy?” and “The Five Competitive Forces That Shape Strategy” (discussed in Chapter 3).

Gary Hamel, professor, consultant, and management educator, was recently ranked as the “world’s most influential business thinker” by The Wall Street Journal. As a member of the London Business School faculty since 1983, Hamel has published numerous influential articles, including “The Core Competence of the Corporation” (with C. K. Prahalad) and “The Why, What, and How of Management Innovation.” His most recent book, The Future of Management, was selected by Amazon.com as the best business book of 2007.

Peter Drucker was a respected management guru who, through his writings and consulting, made several lasting contributions to the practice of management. One of his major contributions was the need for organizations to set clear objectives and establish the means of evaluating progress toward those objectives. He was the first person to discuss “management by objective” (MBO), by which a manager should be self-driven to accomplish key goals that link to organizational success (as opposed to being controlled by a supervisor). Drucker also championed several ideas that continue to be influential to this day, including decentralization, employees as assets (not liabilities), corporation as a human community, and the importance of knowledge workers in the new information economy.”

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Modern Contributors (2 of 2)

Senge – learning organization

The Fifth Dimension: The Art and Practice of the Learning Organization

Covey – leader’s success

Seven Habits of Highly Effective People

Collins – “level 5 leaders”

Good to Great

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Peter Senge of MIT Sloan School of Management has made several significant contributions to the areas of organizational learning and change. In addition to founding the “Society of Organizational Learning,” Senge wrote The Fifth Dimension: The Art and Practice of the Learning Organization, which has sold more than 1 million copies worldwide.

In his 1990 best-selling book, the Seven Habits of Highly Effective People: Powerful Lessons in Personal Change, Stephen Covey discussed how a leader’s success hinges on balancing between personal and professional effectiveness.

In 2001, Jim Collins authored an influential book titled Good to Great in which he and his research team analyzed 1,435 companies to understand why some companies reach high levels of sustained performance while other companies fail to reach greatness. He discovered that great companies are managed by “level 5 leaders” who often display humility while simultaneously inspiring those in the organization to apply self-discipline and self-responsibility while pursuing high standards.

Christopher A. Bartlett of Harvard University has focused on the “strategic and organizational challenges confronting managers in multinational corporations.” With coauthor Sumatra Ghoshal, he wrote the influential Managing Across Borders: The Transnational Solution (1998), named by the Financial Times as one of the 50 most influential business books of the 20th century.

In 1982, Thomas J. Peters and Robert H. Waterman wrote the best-selling book In Search of Excellence, which urged U.S. firms to fight their competition by refocusing their business strategies on several drivers of success: people, customers, values, culture, action, and an entrepreneurial spirit.

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Challenge

You are the office manager of a large law firm. Several of your associates have complained about an employee, Sara, coming to work late, taking extended breaks, and making personal calls. Sara claims she always gets her work done in a timely fashion and that’s all that should matter.

Consider a management theory (e.g., scientific management, human relations, systems, and contingency).

Use this theory to develop a response to the situation.

What are the strengths and weaknesses of this response?

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“Management Approaches”—Divide the class into four groups and give each group the following scenario:

You are the office manager at a large law firm, and several administrative assistants have come to you over the past few weeks to complain about Sara, another administrative assistant in the firm. They tell you that Sara is often late, sometimes takes longer lunches than is allowed, and spends considerable time on personal telephone calls. When you confront Sara, she acknowledges that, although she may come in late occasionally or make personal calls, her work is always done on time, and the quality of her work is impeccable. She suggests that this should be the measure used to evaluate her performance, not small infractions.

Assign each group one management theory (scientific management, human relations, systems approach, and contingency approach), answer the following questions, and appoint a spokesperson to share the group’s findings with the class.

Questions:

As the office manager, you are a believer in the assigned management theory. How would you handle this situation?

The scientific management group may point out that Sara’s work time is spent inefficiently and she would either require additional training or be terminated for not achieving organizational plans and principles. The human relations group may appreciate that employee down-time is important for overall satisfaction and performance in one’s job and may not decide to intervene. The systems approach group would consider Sara’s inputs and outputs. If her performance is high, no intervention may be needed. The contingency group may suggest examining whether the strategies, structures, and processes that are currently in place should be modified given Sara’s high performance level.

Do you believe this is the best approach to the situation? Why or why not?

Answers will vary based on the assigned role.

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Chapter Overview

Origins of management

Egyptians, Chinese, Sun Tzu, Ancient Greeks, Venetians

Five classical approaches to management

Systematic management, scientific management, bureaucracy, administrative management, human relations

Four contemporary approaches to management

Sociotechnical systems, quantitative management, organizational behavior, systems theory

Modern contributors to management

Porter, Hamel, Drucker, Senge, Covey

©McGraw-Hill Education.

Teachers and Performance Incentives Video Questions

One critic in the video suggests that compensation programs that create competition between teachers are not good for students. In what ways do you believe this is true?

How does competition between teachers differ from competition between salespeople at a car dealership?

How is the school district using quantitative management in addressing student performance?

Video

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When Sulphur Springs Elementary School in Tampa received an F rating, the school district responded by bringing In a new principal, Christy Buell. She quickly replaced 60% of the staff and was able to attract new teachers by using the school district's merit pay program that pays teachers more when their students attain better grades. Teachers can earn up to $5,000 extra if their students are among those that show the most improvement on test scores within the school year. Even President Obama has embraced the idea of performance incentives for teachers, but the approach is not without its critics. They contend that there is little research showing that the approach work, it's hard to administer fairly, and it can create Ill will among teachers. However, the failing grade that Sulphur Springs received two years ago has now become a B, and the school district has received a $100,000,000 grant from the Bill and Melinda Gates Foundation to further study and fine-tune the pay-for-performance approach.

Follow-Up Questions:

Sulphur Springs Principal Buell is a strong believer in pay for performance, and this reflects Fayol's principle of management on remuneration (I.e., "systematically reward efforts that support the organization's direction"). Can you see any other similarities between Buell's approach and Fayol's principles of management?

Students may also note that this objective could help ensure stability and tenure of personnel, unity of direction, and initiative.

One critic in the video suggests that compensation programs that create competition between teachers are not good for students. In what ways do you believe this is true? How does competition between teachers differ from competition between salespeople at a car dealership?

Students will likely agree this is true but may have varying opinions on whether it could have a negative impact on students. Some may note that competition at a car dealership only influences each individual customer and customers do not interact with each other, as do students in a school.

How would you establish a pay for performance plan for professors at your college or university? What measures would you use to assess the professor's performance?

Answers will vary here but students will likely focus most on the “teaching” aspect of professor performance and might suggest that greater weight is given to student evaluations and that pay could be commensurate with higher satisfaction ratings. Others may suggest taking into consideration academic achievement or even placement upon graduation, although difficulties with all “performance” factors will be debated.

How is the school district using quantitative management in addressing student performance?

Student test scores are used to determine teacher’s raises.

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Appendix 1 Exhibit 2.1 The Evolution of Management Thought

Classical Approaches

Before 1890: Systematic management

1900 to 1910: Scientific management

1910s: Bureaucracy

1920s: Administrative management

1930s: Human relations

Contemporary Approaches

1940s: Sociotechnical systems

1950s: Quantitative management

1960s: Organizational behavior

1960s to 1970s: Systems theory

1980 through the present: Modern contributions to current and future revolutions

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©McGraw-Hill Education.

Appendix 2 Contemporary Approaches (4 of 5)

Raw materials, human resources, energy, financial resources, information, and equipment are inputs into the organization, resulting in a transformation process that produces outputs – goods and services.