MGT 200 Management Theory

Required Reading: Chapter 2 of textbook Peter Senge Article Meg Wheatly Interview Todays Topic: History of Management Theory

Learning Objectives
Know the basic premises of six management theories Understand the context for the evolution and development of these theories Know the basic concepts of several current trends in management Explore three forces that are changing the context for managerial work today

Management Theories/Concepts
Division of Labor Scientific Management Administrative Theories Behavioral Theory Chaos Theory Contingency Theory

Division of Labor
Adam Smith: The Wealth of Nations Premise: Increase productivity by breaking down jobs into narrow, repetitive tasks

Scientific Management
Management

practices should be based on fact and observation Focuses on the relationship between individual workers and their tools or machines

Scientific Management

Frederick Taylor

There is one best way to perform a task Time and motion studies Money motivates employees to do their best Followers of Taylor Control systems for production scheduling

Frank and Lillian Gilbreth

Henry Gantt

Assessing Scientific Management

Many

aspects used today Misreads human side of work Simple tasks and clear rules dont guarantee results

Administrative Theories
Focus

on managers and their behavior Henri Fayol, French industrialist

Management is a discipline with principles that can be taught

Max

Weber

Developed the concept of bureaucracy as the ideal structure for an organization

Fayols Administrative Principles

1. Division of labor 2. Authority to give orders 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interest 7. Remuneration: pay for work done 8. Centralization 9. Scalar chain 10. Order 11. Equity 12. Stability and tenure of staff 13. Initiative 14. Esprit de corps

Bureaucratic Management
Formal system of rules and procedures Impersonality Hierarchical structure with detailed authority Clear division of labor Rationality Career commitment

Assessing Administrative Theories

Managers still use many of Fayols principles Overemphasizes the rational behavior of managers Advantages & disadvantages of bureaucracy

Benefits: efficiency, consistency Costs: rigid, slow, difficult to adapt

Behavioral Theory
Focuses on the human aspects of organizations Mary Parker Follet

Management is a dynamic process Workers should be involved in decisions Organizations are social systems Managers need buy-in of employees

Chester Barnard

Hawthorne Studies
A scientific theory study that provided strong support for the behavioral viewpoint The Hawthorne Effect: Productivity is likely to increase when employees are given special attention regardless of whether working conditions change The social environment of employees also greatly influences productivity

Behavioral Theory

Basic Assumptions

Employees are motivated by social needs Social forces exerted by peers is strong Employees respond to managers who help them satisfy their needs Managers need to coordinate the work of subordinates democratically to improve efficiency

Behavioral Theory Assessment

Adds greatly to the mechanistic view of managing people But human relation skills alone wont guarantee increased productivity or high quality work Managing the human aspects of an organization is a very complex task

Chaos Theory
Margaret Wheatley, 1992 Look at an organization as a living organism Learn management from natural systems Basic Premise: Self-organization

the tendency of living systems to organize into structure without any externally imposed plan

Chaos Theory Principles

Information access

Everyone has easy access to all the information they need to do their job Everyone has easy access to anyone they need to do their job The organizations core identity or purpose

Relationships

Self-reference

Chaos Theory Assessment

Goes against many traditional beliefs about role of managers Requires educated, involved employees Requires change in communication methods Clear vision/joint purpose is crucial

Contingency Viewpoint
There is no best way to manage in all situations Use the different management viewpoints as appropriate to deal with various situations Managers must be able to diagnose and understand a situation thoroughly

Contingency Viewpoint

Basic contingency variables:

External environment Technology Individuals

Importance of each variable depends on type of situation and problems being faced

Assessing the Contingency Viewpoint

Useful approach - makes sense to change viewpoint depending on situation Most managers use intuitively Diagnosis very important to determine best approach Many dont consider to really be a theory of management

just draws on other theories

Management Theories Summary

Division of Labor - Adam Smith Scientific Management - Taylor, Gilbreths, Gantt Administrative Theories - Fayol, Weber Organizational Behavior - Follett, Barnard Chaos Theory - Wheatley Contingency Theory

Whats Next?
Current Trends and Issues in Management Read Chapter 2: pages 40-53 Read Senge handout on Systems Thinking