From last class…

Course Components
 Weekly activities (20%)
 Journals (5%)
 Challenges (10%)
 Feedback on challenges (5%)
 Midterm (20%)
 February 15th
 Final (35%)
 Group project (25%)
 March 29th and April 3rd (feedback)
First Challenge: “People don’t buy what you do;
they buy why you do it”– Simon Sinek
Module 2: History of Management
Principles of Management

FUNDAMENTALS OF MANAGEMENT
Scientific Management
 The evolution of the
field of management
Scientific Bureaucratic Humanistic
Management Management Management
 Scientific Management
Core Principles
Fundamentals of Management

 Look at each task to

determine “best way” to
perform job
 Hire right workers for each
job and train to work at
maximum efficiency
 Monitor worker performance
and provide instruction and
training
 Divide work between
management and labor so
workers can be more efficient

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 Frederick Winslow Taylor
• Known as the father of management

Influential
• Examined ways to run a business efficiently and productively
Fundamentals of Management

• His method is seen as scientific management

• Borrowed techniques from botanists and chemists

Theorists • Employed scientific techniques such as analysis, observation,

synthesis, rationality, and logic

Behind Frank and Lillian Gilbreth

• Focused on worker welfare and motivation.

Scientific
• They believed that by reducing the amount of motions associated
with a particular task, they could also increase the worker’s well-
being.

Management Henry Gantt

• Gantt chart: tool that provides a visual (graphic) representation
of what occurs over the course of a project.
• Task and bonus plan: do more, get more; do less, get less

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Bureaucratic
Management
 Understanding Bureaucratic Management

• Looks at how government departments and large businesses operate

• Examines how to manage more effectively
Fundamentals of Management

• Influential theorists
 Max Weber
 Thought bureaucratic theory would result in highest level of efficiency—however negative aspects
 Excessive procedures, boredom, unresponsiveness
 Identified six characteristics of bureaucracy
 Henry Fayol
 Concerned instead with how workers were managed and how they contributed
 Created the 5 duties of management
 Created 14 guiding principles

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 Max Weber
Organizations should be based on rational
authority
Fundamentals of Management

authority given to the most competent and

qualified people (not based on who you knew).
Identifiedsix characteristics of
bureaucracy

 Hierarchical Management
 Division of Labor
 Formal Selection Process
 Career Orientation
 Formal Rules and Regulations
 Impersonality

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 Henri Fayol
Fayol thought management principles needed to be flexible and adaptable and that they
Fundamentals of Management

would be expanded through experience and experimentation.

Was concerned with how workers were managed and how they contributed to the
organization.
- successful organizations linked to satisfied and motivated employees.

Scalar chain: unbroken chain of command extends from top to bottom

Unity of command: employees receive orders from only one superior
Guiding principles:
Unity of direction: activities that are similar should be the responsibility of one person
Division of work: workers specialize in a few tasks to become more proficient

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 Fayol’s Five Duties of Management
Fundamentals of Management

Foresight: create plan of action for future

Organization: provide resources to implement plan

Command: select and lead best workers through clear orders

Coordinate: make sure diverse efforts fit together through communication

Control: verify whether things are going according to plan and correct as
needed

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 Humanistic
Management
 Places emphasis on interpersonal relationships
Fundamentals of Management

Highlights concerns about lower standards of

workmanship and lower wages
Basics of
Labor unions began addressing growing fear of
Humanistic the workers

Management
• the US government called Frederick Taylor to testify about
aims of his proposals

Influential theorists
• Mary Parker Follett
• Elton Mayo

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  Considered to be the ”Mother of Modern Management”

 Developed concepts applied to business and

management
Fundamentals of Management

 created a better understanding of lateral

processes
 noted the Importance of informal processes
within organizations
Mary Parker  applied principles of noncoercive power sharing
she called integration

Follett  examined empowerment and facilitation instead

of control
 promoted conflict resolution in group based on
constructive consultation

 Follett devoted her life’s work to the idea that social

cooperation is better than individual competition.

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  Completed a series of studies designed to
isolate factors in workplace that affected
productivity
Fundamentals of Management

 If positive change was implemented,

productivity increased
Elton Mayo and  If negative change was implemented,
productivity still increased
the Hawthorne  Employed nondirective interview method

Experiments  Benefits- feeling of group cohesion,

friendlier attitude of researchers,
attention brought to individuals
 Published findings in “The Human
Problems of an Industrialized Civilization”
in 1933

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 Current
Developments in
Management
Practices
 Introduction to Current Developments in
Management Practices
Fundamentals of Management

Many argue Most of what we do

classical practices requires us to
and theories are no interact with large-
longer valid scale institutions

Government
agencies, banks,
health-care
providers,
insurance
companies, etc.

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 Forces Shaping
Management and
Current Developments
Fundamentals of Management

 The pace of change

 Technology
 Globalization
 Diversity
 Social expectations

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 Current Developments in
Management
 Becoming more specific with formation of disciplines
Fundamentals of Management

 Also becoming more general

 managers are given a toolbox, not step-by-step procedure

 Operations Management. Concerned with physical processes involved

 Initial product design to incorporate features
 Manage supply chain
 Work with marketing and sales

 Information Management. Depends on accuracy to make decisions

 Concerned with collection, preservation, storage, etc. of
information
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 Current Developments in
Management
 Systems Approach to Management
 Gets feedback from from the market in two ways
Fundamentals of Management

 Receives revenue
 Receives information on how well organization is doing: direct information
from surveys
 Focuses on whole production process; usually split by specialties within company
 Companies are open to environmental influence
 Political instability, economic conditions, consumer tastes, etc
 Must be able to detect change and respond effectively
 Contingency Management
 Not specific function—general approach
 Every situation recognized as unique; managers must adapt to match situation
 Might include industry in which company operates

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  Explain the concept of scientific
management
 Summarize the work of Frederick W.
Taylor, Frank and Lillian Gilbreth,
Fundamentals of Management

and Henry Gantt

 Explain the concept of bureaucratic
management
 Summarize the work of Max Weber
Quick Review and Henri Fayol
 Explain the concept of humanistic
management
 Summarize the work of Mary Parker
Follett and Elton Mayo
 Explain the concepts of operations,
systems, information, and
contingency managements

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 Module 3:
Principles of
Management
Planning and
Mission
FUNDAMENTALS OF MANAGEMENT
Mission, Vision and Values
 « VISION provides
guidance about
Fundamentals of Management

Collins &
what CORE to preserve,
Porras: and what
Vision
FUTURE to stimulate
progress toward. »
Building your company’s vision; HBR – Sept./Oct. 1996;
p.66 26
 y Asp
lit VISION ira
Rea ENVISIONED FUTURE
t ion
CORE IDEOLOGY
What we stand for What we aspire to become
Audacious and vivid goals that stimulate
Fundamentals of Management

Enduring character of the organization;

Glue that holds the org. together progress
CORE CORE AUDACIOUS GOAL
VALUE PURPOSE GOAL ACHIEVEMENT
- 3-5 values - 100 yr test - 10-30 years - Vivid description
- Small set of - Organization’s - BHAG: - What it will be
timeless guiding most like to achieve
- Unifying focal
principles fundamental BHAG
- Require no point - Picture people
reason for - Catalyst for
external existence can carry around
team spirit - Passion,
justification - Can never be - Clear finish
- Have intrinsic fulfilled emotion,
line conviction:
value to those
inside the essential
organization Preserve the core &
stimulate progress
27
 y Asp
lit Walt Disney’s VISION ira
Rea ENVISIONED FUTURE
t ion
CORE IDEOLOGY
What we stand for What we aspire to become
Audacious and vivid goals that stimulate
Fundamentals of Management

Enduring character of the organization;

Glue that holds the org. together progress
CORE CORE AUDACIOUS GOAL
VALUE PURPOSE GOAL ACHIEVEMENT
- No cynicism - To make - Becoming net- -At Disney, for
-Creativity, people happy zero by 2030 nearly a century
dreams, and we have found
imagination inspiration in the
-Fanatical wonders of our
attention to world we share
consistency and and have taken
detail action to make a
-Preservation and happier, healthier
control of the planet possible for
Disney magic Preserve the core & all.
stimulate progress
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Putting it all together…
 Vision: a statement of an organization’s overarching aspirations
of what it hopes to achieve or to become.
 Mission: what the organization needs to do now to achieve the
vision.
 It’s more specific
 Defines how the organization is different from others
 Values: The values statement defines what the organization
believes in and how people in the organization are expected to
behave
 It’s a “code of ethics”
Types of Plans
and Common
Planning Tools
 Short-term plans/ Long-term plans
Fundamentals of Management

Regulations

• Policies: broad guidelines for smooth operation- hiring and firing, promotions, etc.
• Procedures: steps to be followed in established operations- reflect company policies and support
long-term goals
• Regulations: what is allowed and what is strictly prohibited= state and federal governments issue
regulations often
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 Types of Plans:
Forecasting, Contingency Planning, and Scenario Planning
Fundamentals of Management

Forecasting Contingency plans Scenario Planning

Makes a prediction about Describes what will happen Long-term version of
future in a possible—but not contingency planning
Scientific forecasting is using expected--situation Involves creating “best case”
mathematical models, Used to handle emergency and “worse case” prediction
historical data, and situations
statistical analysis
Long-range forecasting
requires both quantitative
numerical data and
qualitative data based on
experts
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 Planning Tools:
Management By Objective, SMART Goals and Benchmarking
Fundamentals of Management

Management By Objective (MBO) - Drucker (1954)

• Jointly set goals and objectives, plan tasks for employees, agree on standards for
evaluating performance, meet to review progress often

SMART Goals – Locke & Latham (2002)

• Provides incentives to employees, empowering them to set own objectives,

honestly communication with workers
• Specific, Measurable, Achievable, Relevant, Time-bound

Benchmarking

• looking for performance levels outside organization

• Industry, geography, organization, processes, innovation

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The Planning
Cycle
 Iterative
Fundamentals of Management

Stages of
the
Planning
Cycle

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 Essential Aspects of the Planning Cycle
• Maintaining organizational focus
 Defining specific goals to consider the vision, mission, and values of the
Fundamentals of Management

organization
• Encouraging diverse participation
 Provides opportunity for input
 Establish planning committees that intentionally include people from diverse
backgrounds
• Empowering and motivating employees
 Empowers people to contribute
 Motivates them to support outcomes

Why do plans fail? 36

Pros and Cons
of Planning
 Understanding Pros and Cons of Planning

Pros of Planning Cons of Planning

 Provides a guide for action • Prevents action
Fundamentals of Management

 Improves resource utilization • Leads to complacency

 Provides motivation and • Prevents flexibility
commitment • Inhibits creativity
 Sets performance standards
 Allows flexibility

Analysis Paralysis 38
 Today’s Take aways…
 What can history teach us
Fundamentals of Management

 Distinguish between a mission, a vision, and values

 Explain the benefits and drawbacks of planning
 Explain the stages of the planning cycle
 List and describe the types of plans and common planning tools
 Define MBOs, SMART GOALs, forecasting, benchmarking,
contingency planning, scenario planning.

at? at?
So wh w w h
No
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Next Class…

 LIFE journals
 Chapter 4 & 5
 Rocky Mountain Insurance (practice case)