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1912012 management theory
By the end of the class you will have had an
                    opportunity to:

Gain an understanding of how our ideas about
 management have evolved
Examine the major schools of thought: Classical,
 Human Relations, Systems, Behavioural
Examine the ‘one best way’ versus ‘contingency’ view
Why should we care about the history
      of management ideas?
Ideas that changed our world e.g Taylorism
They are around us every day e.g the factory system,
 McDonald’s
We need to know our ‘turf’, where our ideas came
 from
Concepts, models and theories
What is a concept? Words that help us organise and
 sort knowledge e.g job satisfaction
A model: a ‘half-way’ house to a theory
A theory: a set of concepts and ideas that
 systematically attempt to explain, understand and
 predict outcomes
We operate in the social sciences; we can ‘prove
 ‘nothing
1912012 management theory
1912012 management theory
1912012 management theory
1912012 management theory
The evolution of management theory
First came the practitioners: early attempts by
 entreprenuers to find better ways of doing things e.g.
 John Kay’s Flying Shuttle
Then much later came the academics: knowledge
 from research about management and organisations
Now it has become an industry
Systems (Org. Environment)


                    Management Science (Quantitative)

                          Human Relations

             Behavioral Management
       Administrative Management

  Bureaucratic Management

Scientific Management


1890                      1940                           2000
1912012 management theory
Classical Management Theory
   Organizations seeking ways to improve efficiency
  (Capitalist mode of production)
   Led to surplus value
   Satisfied (manipulated?) customers
   Application of technology/machinery which changed
  the way goods were produced (Industrial Revolution)
  Managers had to increase the efficiency of the worker-
  task mix
The Principles of Scientific Management
                  1911
 Taylor was an engineer interested in improving efficiency
 How to reduce the time spent on each task by optimizing the
  way the task was done
 Develop rules of motion, standardized work implementation,
  proper working conditions
 Careful select ion of workers with right abilities for the job
 Train them to do the job and give proper incentives
 Support workers by carefully planning their work
 ‘One best way’
Application: Fordism

Henry Ford revolutionized car manufacture
By 1914, his Highland Park (Michigan) plant could
 turn out a complete chassis every 93 minutes!
This was a stunning improvement over the earlier
 production time of 728 minutes [783% improvement!]
Using a constantly-moving assembly line, subdivision
 of labour, and coordination of operations, Ford
 realized huge gains in productivity
Founded the Ford empire
The assembly line at Ford’s 1914
Ford’s Dearborne plant 1914
Another cog in the wheel . .
Fordism
What images are symbolic of
 Scientific Management (and Fordism)?
   How are people portrayed?
   How is management portrayed?
   What drives work?
 What are the limitations of this management
 approach?
What is the legacy today of this means of production?
Problems with this approach
Managers often implemented the increased output
 side of Taylor’s plan
  They did not allow workers to share in increased output
  Specialized jobs became very VERY boring
  Workers ended up distrusting Scientific Management
Workers could purposely “under-perform” (known as
 “soldiering” )
Management responded with increased use of
 controls and later, machines
What do these organisation have in common?
Oxfam NZ
NZ Police
BNZ
Waikato Multiple Sclerosis Trust
Fraser Tech Rugby Club
East Street Apostolic Church
Hamilton East Primary School


Answer: to one degree or another all are
  bureaucracies
Classical Management Theory
                      Bureaucracy
Bureaucratic Organization (Max Weber)
 Ideal-type, intentionally rational and efficient form of
   organization
 Based on principles of logic, order and legitimate
   authority
 Bpecialisation of labour
  Formal rules and procedures
  Impersonality of process
  Well defined hierarchy of
   authority
  Career advancement based on merit
Key points of Bureaucracy

Authority is the power to hold people accountable for
 their actions
Positions should be based on performance not social
 contacts
Position duties are clearly identified. People should
 know what is expected of them
Lines of authority should be clearly identified.
 Workers know who reports to who
Rules, Standard Operating Procedures (SOPs), &
 norms used to determine how the firm operates
Critical Review: Classical Management
                Theories
+ Encouraged managers to think rationally and
    systematically about the organisation of work


    Increased productivity through efficiency (work
+   specialisation of simple tasks)


    People selected for tasks which they are best suited and
+   can be learned easily
Human Relations Movement: managers who use
good human relations will achieve productivity
Human Relations Approaches to
                   Management

Hawthorne studies (Elton Mayo 1924-1932)
  initial study to examine the relationship of economic
    incentives and physical conditions on worker output
       “psychological factors” interfered with experiment
  Relay Assembly Test-Room Studies
     designed to minimize the “psychological factors” of previous
      experiment
     productivity increased regardless of changes made

     factors that accounted for increased productivity
        group atmosphere

        participative supervision
Hawthorne Studies

Lessons in Behaviour
  Shift toward social and human concerns as keys to
   productivity
  Hawthorne effect
     people who are singled out for special attention perform as
      expected
     workers are social beings driven by the need for belonging
      and acceptance
Hawthorne Effects
The major finding was that almost regardless of the
 experimental manipulation (brightness of lights,
 humidity, breaks, group pressure, working hours,
 managerial leadership), the production of the workers
 seemed to improve.
One reasonable conclusion is that the workers were
 pleased to receive attention from the researchers who
 expressed an interest in them.
Work-group norms affect productivity.
The workplace is also a social system.
Human Relations Movement

Theory X and Y (McGregor, 1960)
Managers assumptions about workers differ:
  Theory X: Assumes the average worker is lazy, dislikes
    work and will do as little as possible.
       Managers must closely supervise and control through reward
        and punishment
  Theory Y: Assumes workers are not lazy, want to do a
    good job and the job itself will determine if the worker
    likes the work.
        Managers should allow the worker great latitude, and create
        an organization to stimulate the worker
Human Relations Movement


Maslow’s Theory of Human Needs
  need is a physiological or psychological deficiency a
   person feels the compulsion to satisfy
       satisfied need is not a motivator of behavior
  progression principle: Hierarchy of needs
       a need becomes a motivator once the need below it is
        satisfied
1912012 management theory
Critical Review: HR Management
                         Theories
    Attempted to explain the psychological and sociological
+   processes which influence performance

    Recognised workers’ needs

+ Developments in motivation theory, social & personal
    interests in work


+
Behaviouralists

What is it that effective managers do?
 Are there behaviours associated with them?
Ohio & Michigan Studies
Identified two dimensions: Task and People
Blake & Mouton’s Managerial Grid
Ground breaking New Zealand research (2008)
  ‘A Day in the Life of a Manager’
  Mintzberg
Some questions to ponder….
How relevant are these models and theories to 21 st
 century organisations?
We moved through stages: agricultural, pre-
 industrial, industrial, post-industrial, to a digital-
 knowledge economy, so how relevant are these 20th
 century theories now?
Are our ideas about managing rooted in ‘pre-history’?
What sort of models do we need to ‘invent’ for this
 century?
What metaphors?
Conclusion: why we can’t continue to rely on
    the way we have done things in the past
 A combination of very rapid population growth
over the last 50 years and reckless economic
growth during the same time has stored up
massive problems for societies the world over. No
nation is immune. The scientific evidence tells us
all we need to know: carry on with business-as-
usual growth-at-all-costs, and we’re stuffed -
Jonathon Porritt, www.forumforthefuture.org
article 'Living within our means' (21 March 2009)

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1912012 management theory

  • 2. By the end of the class you will have had an opportunity to: Gain an understanding of how our ideas about management have evolved Examine the major schools of thought: Classical, Human Relations, Systems, Behavioural Examine the ‘one best way’ versus ‘contingency’ view
  • 3. Why should we care about the history of management ideas? Ideas that changed our world e.g Taylorism They are around us every day e.g the factory system, McDonald’s We need to know our ‘turf’, where our ideas came from
  • 4. Concepts, models and theories What is a concept? Words that help us organise and sort knowledge e.g job satisfaction A model: a ‘half-way’ house to a theory A theory: a set of concepts and ideas that systematically attempt to explain, understand and predict outcomes We operate in the social sciences; we can ‘prove ‘nothing
  • 9. The evolution of management theory First came the practitioners: early attempts by entreprenuers to find better ways of doing things e.g. John Kay’s Flying Shuttle Then much later came the academics: knowledge from research about management and organisations Now it has become an industry
  • 10. Systems (Org. Environment) Management Science (Quantitative) Human Relations Behavioral Management Administrative Management Bureaucratic Management Scientific Management 1890 1940 2000
  • 12. Classical Management Theory Organizations seeking ways to improve efficiency (Capitalist mode of production) Led to surplus value Satisfied (manipulated?) customers Application of technology/machinery which changed the way goods were produced (Industrial Revolution) Managers had to increase the efficiency of the worker- task mix
  • 13. The Principles of Scientific Management 1911 Taylor was an engineer interested in improving efficiency  How to reduce the time spent on each task by optimizing the way the task was done  Develop rules of motion, standardized work implementation, proper working conditions  Careful select ion of workers with right abilities for the job  Train them to do the job and give proper incentives  Support workers by carefully planning their work  ‘One best way’
  • 14. Application: Fordism Henry Ford revolutionized car manufacture By 1914, his Highland Park (Michigan) plant could turn out a complete chassis every 93 minutes! This was a stunning improvement over the earlier production time of 728 minutes [783% improvement!] Using a constantly-moving assembly line, subdivision of labour, and coordination of operations, Ford realized huge gains in productivity Founded the Ford empire
  • 15. The assembly line at Ford’s 1914
  • 17. Another cog in the wheel . .
  • 18. Fordism What images are symbolic of Scientific Management (and Fordism)?  How are people portrayed?  How is management portrayed?  What drives work?  What are the limitations of this management approach? What is the legacy today of this means of production?
  • 19. Problems with this approach Managers often implemented the increased output side of Taylor’s plan They did not allow workers to share in increased output Specialized jobs became very VERY boring Workers ended up distrusting Scientific Management Workers could purposely “under-perform” (known as “soldiering” ) Management responded with increased use of controls and later, machines
  • 20. What do these organisation have in common? Oxfam NZ NZ Police BNZ Waikato Multiple Sclerosis Trust Fraser Tech Rugby Club East Street Apostolic Church Hamilton East Primary School Answer: to one degree or another all are bureaucracies
  • 21. Classical Management Theory Bureaucracy Bureaucratic Organization (Max Weber) Ideal-type, intentionally rational and efficient form of organization Based on principles of logic, order and legitimate authority Bpecialisation of labour  Formal rules and procedures  Impersonality of process  Well defined hierarchy of authority  Career advancement based on merit
  • 22. Key points of Bureaucracy Authority is the power to hold people accountable for their actions Positions should be based on performance not social contacts Position duties are clearly identified. People should know what is expected of them Lines of authority should be clearly identified. Workers know who reports to who Rules, Standard Operating Procedures (SOPs), & norms used to determine how the firm operates
  • 23. Critical Review: Classical Management Theories + Encouraged managers to think rationally and systematically about the organisation of work Increased productivity through efficiency (work + specialisation of simple tasks) People selected for tasks which they are best suited and + can be learned easily
  • 24. Human Relations Movement: managers who use good human relations will achieve productivity
  • 25. Human Relations Approaches to Management Hawthorne studies (Elton Mayo 1924-1932) initial study to examine the relationship of economic incentives and physical conditions on worker output  “psychological factors” interfered with experiment Relay Assembly Test-Room Studies  designed to minimize the “psychological factors” of previous experiment  productivity increased regardless of changes made  factors that accounted for increased productivity  group atmosphere  participative supervision
  • 26. Hawthorne Studies Lessons in Behaviour Shift toward social and human concerns as keys to productivity Hawthorne effect  people who are singled out for special attention perform as expected  workers are social beings driven by the need for belonging and acceptance
  • 27. Hawthorne Effects The major finding was that almost regardless of the experimental manipulation (brightness of lights, humidity, breaks, group pressure, working hours, managerial leadership), the production of the workers seemed to improve. One reasonable conclusion is that the workers were pleased to receive attention from the researchers who expressed an interest in them. Work-group norms affect productivity. The workplace is also a social system.
  • 28. Human Relations Movement Theory X and Y (McGregor, 1960) Managers assumptions about workers differ: Theory X: Assumes the average worker is lazy, dislikes work and will do as little as possible.  Managers must closely supervise and control through reward and punishment Theory Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.  Managers should allow the worker great latitude, and create an organization to stimulate the worker
  • 29. Human Relations Movement Maslow’s Theory of Human Needs need is a physiological or psychological deficiency a person feels the compulsion to satisfy  satisfied need is not a motivator of behavior progression principle: Hierarchy of needs  a need becomes a motivator once the need below it is satisfied
  • 31. Critical Review: HR Management Theories Attempted to explain the psychological and sociological + processes which influence performance Recognised workers’ needs + Developments in motivation theory, social & personal interests in work +
  • 32. Behaviouralists What is it that effective managers do?  Are there behaviours associated with them? Ohio & Michigan Studies Identified two dimensions: Task and People Blake & Mouton’s Managerial Grid Ground breaking New Zealand research (2008) ‘A Day in the Life of a Manager’ Mintzberg
  • 33. Some questions to ponder…. How relevant are these models and theories to 21 st century organisations? We moved through stages: agricultural, pre- industrial, industrial, post-industrial, to a digital- knowledge economy, so how relevant are these 20th century theories now? Are our ideas about managing rooted in ‘pre-history’? What sort of models do we need to ‘invent’ for this century? What metaphors?
  • 34. Conclusion: why we can’t continue to rely on the way we have done things in the past A combination of very rapid population growth over the last 50 years and reckless economic growth during the same time has stored up massive problems for societies the world over. No nation is immune. The scientific evidence tells us all we need to know: carry on with business-as- usual growth-at-all-costs, and we’re stuffed - Jonathon Porritt, www.forumforthefuture.org article 'Living within our means' (21 March 2009)