LEARNING OUTLINE

Follow this Learning Outline as you read and study this chapter.
MM2021 • Historical Background of Management (early evidence)
Management & Organization • Scientific Management (Fredrick W. Taylor, Frank and Lillian Gilbreth)
• General Administrative Theory (Henri Fayol and Max Weber)
S2 Management Yesterday & Today • Organizational Behavioral Approach (Hawthorne studies)
• Quantitative Approach
Dr. Katrina Lin
• The Systems Approach
katrina.lin@polyu.edu.hk
M930 (3400 3923) • The Contingency Approach
• Current Issues and Trends

2–2

History of Management History of Management

• Management
– coordinating and overseeing the work of other people
so that their activities are completed efficiently and
effectively (plan, organize, lead, control)
• Why do we study management history?
– Management history documents theories people
used to explain and improve management efficiency
and effectiveness during a specific period of time
– Not knowing history: make mistakes in explanation
and improvement of management
Management Theories
2–3 2–4

History of Management: Historical Background History of Management: Historical Background

• Adam Smith (the father of economics)
• Ancient Management (seven – Published “The Wealth of Nations” in 1776
wonders of the ancient world) – Advocated using the division of labor (job
– Egypt (pyramids) and China (Great Wall) specialization) to increase the productivity
of workers
– Example of the pin industry
– Draw wire out → straighten the wire →
cut the wire → sharpen the point →
flatten the head
– 100 → 48,000 pins/day

2–5 2–6

1
History of Management: Historical Background
• Industrial Revolution (1760 – 1840)
– Substituted machine power for human
labor
– Domestic workshops → larger
factories/organizations
– Need scientific knowledge and theories to
manage (not just individual experiences):
– How to organize more complex work
– How to manage so many people
– How to maximize productivity
2–7
History of Management
2–9
Classical Approach: Scientific Management
• Fredrick Winslow Taylor (the father of scientific mgmt)
– Published Principles of Scientific Management (1911)
• The theory of scientific management
– Key idea: use scientific methods to define
the “one best way” for a job to be done,
and set the structure and rules for workers
to follow
2–11
Major Approaches to Management
• Scientific Management
Classical Approach
• General Administrative Theory
• Organizational Behavior
• Quantitative Management
• Systems Approach
Contemporary Approach
• Contingency Approach
2–8
Classical Approach: Scientific Management
• Scientific management (formal study of mgmt.):
– Theory of management (focus on rationality): analyzes
and synthesizes workflow to improve efficiency, eps.
labor productivity
– Apply science to the engineering of processes to
management (managing people like running &
calibrating a machine)
• Key persons:
– Fredrick Winslow Taylor
– Frank and Lillian Gilbreth
2–10
Exhibit MH–2 Taylor’s Scientific Management Principles
1. Develop a science for each element of an individual’s work, which will
replace the old rule-of-thumb method. (systematic, scientific, division
of labor)
2. Scientifically select, train, teach, and develop the worker. (HR)
3. Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed. (monitor and matched pay)
4. Divide work and responsibility almost equally between management
and workers. Management takes over all work for which it is better
suited than the workers. (division of responsibility)
Standardized scientific system, productivity & efficiency,
no innovation or initiatives, money as the single motivator
MEASURE, MONITOR, CONTROL
2–12
2
 Classical Approach: Scientific Management
• Frank and Lillian Gilbreth (motion and time study)
• Focused on increasing worker productivity through the
reduction of unnecessary motion (bricklayers, use tools instead
of bending over to pick up the brick)
• Developed the microchronometer to time worker motions and
optimize work performance
2–13
Classical Approach: General Administrative Theory
• General administrative theory:
– Theory of management: focuses on what managers do
and what defines good management practices
• Key persons:
– Max Weber
– Henri Fayol
2–15
Exhibit MH–4 Weber’s Ideal Bureaucracy
Rationality, predictability, authoritarianism
2–17
Classical Approach: Scientific Management
• How do today’s managers use scientific management?
• Use time and motion studies to increase productivity
• Hire the best qualified (most skilled) employees
• Design incentive systems based on output
2–14
Classical Approach: General Administrative Theory
• Max Weber (sociologist)
– Bureaucracy: a form of organization characterized by
division of labor, a clearly defined hierarchy, detailed
rules and regulations, and impersonal relationship
(like government and the legal system)
– Developed a theory of authority based on
bureaucracy
2–16
Classical Approach: General Administrative Theory
• Henri Fayol (mining executive & engineer)
– Believed that the practice of management was distinct
from other organizational functions (e.g., accounting,
finance, production, etc.)
– Focused on activities/functions of all managers
– Developed fourteen principles of management that
applied to all organizational situations
2–18
3
 Exhibit MH–3 Fayol’s 14 Principles of Management History of Management
1. Division of work 7. Remuneration (fair pay)
(specialization)
8. Centralization (decision making)
2. Authority (the right to give
order) 9. Scalar chain (clear hierarchy)

3. Discipline (obey rules) 10. Order (right place/time)

4. Unity of command 11. Equity (kind/fair treatment)

(receive orders from only one
superior)
12. Stability of tenure of
5. Unity of direction (single personnel (manpower plan)
org. plan)
13. Initiative (autonomy)
6. Subordination of
individual interests to 14. Esprit de corps (team spirit)

the general interest

(org. goal)
2–19 2–20

Understanding Organizational Behavior:

Understanding Organizational Behavior The Hawthorne Studies
• Organizational Behavior (OB) • A series of productivity experiments conducted at
– Focus on the actions of people at work; people are Western Electric from 1927 to 1932.
the most important asset of an organization
• RQ: Whether lighting levels
• Function (leading): might affect worker productivity?
– Motivate • Study design: lower lighting
– Influence group vs. higher lighting group
– Build trust
• Which group will be more
– Collaborate
productive?
– Conflict resolution
2–21 2–22

History of Management Quantitative Approach to Management

• Quantitative Approach
– Known as operations research or management
science
– Evolved from mathematical and statistical methods
developed to solve WWII military logistics and quality
control problems
– To improve managerial decision making by applying:
• Statistics, optimization models, information models, and
computer simulations
• e.g., economic order quantity model for optimal inventory
• e.g., logistics operation management
2–23 2–24

4
 History of Management Contemporary Approach: Systems Approach
• Systems approach:
– An organization functions as a cooperative system
• System Defined
– A set of interrelated and interdependent parts arranged in
a manner that produces a unified whole.
– Closed systems: not influenced by and do not interact with
their environment (all system input and output is internal).
– Open systems: dynamically interact to their environments
by taking in inputs and transforming them into outputs
that are distributed into their environments.

2–25 2–26

Exhibit MH–8 The Organization as an Open System Implications of the Systems Approach
Government & Culture
• Coordination of the organization’s parts is essential
for proper functioning of the entire organization.
• Decisions and actions taken in one area of the
organization will have an effect in other areas of the
organization. (interrelatedness)
• Organizations are not self-contained and, therefore,
must adapt to changes in their external environment.

Acknowledge open system, the interrelated influences, the

importance of coordination (R&D vs. marketing)
2–27 2–28

Contemporary Approach: The Contingency Approach Exhibit MH–9 Popular Contingency Variables

• Contingency approach: • Organization size

– About the external environment, also called the situational
approach
– There is no one best way to organize and manage
– Organizations are individually different, face different
situations (contingency variables), and require different
ways of managing, i.e., “if….then….”
– Embrace uncertainty and flexibility
• 50000 vs. 50 employees (mechanistic vs. organic structures)
• Environmental uncertainty
• Stable vs. environment (mechanistic, centralized, formalized,
specialized vs. organic, decentralized, flexible, adaptable structures)
• Routineness of task technology
• Routine technologies vs. innovative technologies (different
structures, leadership styles, and control systems).
• Individual differences
• Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations (different motivation
techniques, leadership styles, and job designs)

2–29 2–30

5
 History of Management
Scientific General admin
management theory
standardization -> customization
Dehumanization -> humanization
Increasing certainty -> Embracing uncertainty
Looking in -> Looking out
Current Trends and Issues
System approach • Globalization
• Ethics
• Workforce Diversity
• Entrepreneurship
Behavioral
approach • E-business
• Knowledge Management
Contingency approach
• Learning Organizations

31

2–32

Current Trends and Issues (cont’d) Current Trends and Issues (cont’d)
• Globalization • Ethics
– Management in international organizations (MNC) – Increased investment on corporate social responsibilities
– Political and cultural challenges of operating in a global – Increased creation and use of codes of ethics by businesses
market – Increased emphasis on ethics education in college curriculums
• Emerging markets: against
capitalism
• Trade war
• Working with people from
different cultures (cultural
differences)

2–33 2–34

Current Trends and Issues (cont’d) Current Trends and Issues (cont’d)
• Workforce Diversity
– Increasing heterogeneity in the workforce
• More gender, minority, ethnic, and other forms of
diversity in employees
– Aging workforce
• Older employees who work longer and do not retire
• Create more job opportunities for the seniors
• How to manage?

2–35 2–36

6
 Current Trends and Issues (cont’d) Current Trends and Issues (cont’d)
In 2020, residents aged 65 years and above made up 7.9% • Entrepreneurship Defined
of the total employed resident population in Singapore.
– The process of starting new businesses, generally
in response to opportunities.
• Entrepreneurship process
– Pursuit of opportunities
– Innovation in products, services, or business
methods
– Desire for continual growth of the organization

2–37 2–38

39 40

Current Trends and Issues (cont’d)

• E-Business (Electronic Business)
– The work preformed by an organization using electronic
linkages to its key constituencies
– E-commerce: sales and marketing aspect of an e-business

41 2–42

7
Current Trends and Issues (cont’d) Current Trends and Issues (cont’d)
• Learning Organization
– An organization that has developed the capacity
to continuously learn, adapt, and change.
• Knowledge Management
– The cultivation of a learning culture where
organizational members systematically gather and
share knowledge with others in order to achieve
better performance.

43 2–44

Summary
• Historical Background of Management
• Classical Approaches (Scientific Management, General Administrative
Theory)
• Organizational Behavioral Approach (Hawthorne studies)
• Quantitative Approach
• Contemporary Approaches (The Systems Approach, The Contingency
Approach)
• Current Issues and Trends

Next week:
Lecture: Organizational culture & the environment
Tutorial: Exercise: Skill utilization & individual assignment
2–45 1–46