Because learning changes everything.

CHAPTER 2
MANAGEMENT
THEORY
Essential Background for
the Successful Manager

© 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
©Olivier Renck/ Getty Images
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
 LEARNING OBJECTIVES
2-1 Describe the development of current perspectives on
management.
2-2 Discuss the insights of the classical view of management.
2-3 Describe the principles of the behavioral view of management.
2-4 Discuss the two quantitative approaches to solving problems.
2-5 Identify takeaways from the systems view of management.
2-6 Explain why there is no one best way to manage in all situations.
2-7 Define how managers foster a learning organization, high-
performance work practices, and shared value and sustainable
development.
2-8 Describe how to develop the career readiness competency of
understanding the business.

© McGraw Hill
 MANAGE YOU: WHAT TYPE OF WORK ENVIRONMENT DO I
PREFER?

• What Does It Mean for

You?
• How Can You Get a Job
in a Peopled
Organization?

© McGraw Hill
 EVOLVING VIEWPOINTS: HOW WE GOT
TO TODAY’S MANAGEMENT OUTLOOK

Creating Modern Management:

The Handbook of Peter Drucker

Six Practical Reasons for Studying This Chapter

The Progression of Management Perspectives

© McGraw Hill
 CREATING MODERN MANAGEMENT:
THE HANDBOOK OF PETER DRUCKER.
Understanding management history can
assist you in determining the type of
management style you prefer.
Drucker introduced several ideas that
now underlie the organization and
practice of management.
• Workers should be treated as assets.
• The corporation could be considered a
human community.
• There is “no business without a customer.”
• Institutionalized management practices
are preferable to charismatic cult leaders.

© McGraw Hill Jonathan Alcorn/ZUMAPRESS/ Newscom

 SIX PRACTICAL REASONS FOR
STUDYING THIS CHAPTER
1. Understanding of the present
2. Guide to action

3. Source of new ideas

4. Clues to the meaning of your managers’ decisions

5. Clues to the meaning of outside events

6. Producing positive results

© McGraw Hill
 FIGURE 2.1 PROGRESSION OF
MANAGEMENT PERSPECTIVES

Access the text alternative for slide images.

© McGraw Hill
 CLASSICAL VIEWPOINT: SCIENTIFIC AND
ADMINISTRATIVE MANAGEMENT

• Scientific Management:
Pioneered by Taylor and the
Gilbreths
• Administrative Management:
Pioneered by Spaulding,
Fayol, and Weber
• The Problem with the
Classical Viewpoint: Too
Mechanistic

© McGraw Hill Bettmann/Getty Images

 SCIENTIFIC MANAGEMENT: PIONEERED BY TAYLOR AND
THE GILBRETHS

Frederick Taylor and the Four Principles of Scientific

Management:
• Evaluate a task by scientifically studying each part of it.
• Carefully select workers with the right abilities for the task.
• Give workers the training and incentives to do the task with
the proper work methods.
• Use scientific principles to plan the work methods and ease
the way for workers to do their jobs.

© McGraw Hill
 SCIENTIFIC MANAGEMENT:
PIONEERED BY TAYLOR AND THE
GILBRETHS
• Frank and Lillian Gilbreth and
Industrial Engineering.
• Identified 17 basic motions and
applied them to work processes
to determine whether the tasks
could be done more efficiently.
• Demonstrated they could
eliminate motions while reducing
fatigue for some workers.
• The Gilbreths are important
because they reinforced the link
between studying the physical
movements in a job and workers’
efficiency.

© McGraw Hill Bettmann/Getty Images

 ADMINISTRATIVE MANAGEMENT: PIONEERED BY
SPAULDING, FAYOL, AND WEBER 1

Charles Clinton Spaulding:

the “Father of African-American Management”
Suggested considerations
such as:
• The need for authority
• Division of labor
• Adequate capital
• Proper budgeting
• Cooperation
• Teamwork
Highlighted the need to
enrich “the lives of his
organizational and
community family” while
simultaneously focusing
on making a profit.

© McGraw Hill
 ADMINISTRATIVE MANAGEMENT: PIONEERED BY
SPAULDING, FAYOL, AND WEBER 2

• Fayol was not the first to investigate

management behavior, but he was the first to
systematize it.

• His most important work, General and

Industrial Management, was translated into
English in 1930.

• Fayol was the first to identify the major

functions of management—planning,
organizing, leading, and controlling.

© McGraw Hill
 ADMINISTRATIVE MANAGEMENT: PIONEERED BY
SPAULDING, FAYOL, AND WEBER 3

Weber believed bureaucracy was a rational, efficient,

ideal organization based on principles of logic.
A better-performing organization, he felt, should have
five positive bureaucratic features:
1. A well-defined hierarchy of authority
2. Formal rules and procedures
3. A clear division of labor, with parts of a complex job being
handled by specialists
4. Impersonality, without reference or connection to a particular
person
5. Careers based on merit

© McGraw Hill
 THE PROBLEM WITH THE CLASSICAL VIEWPOINT: TOO
MECHANISTIC

• A flaw in the classical viewpoint is that it tends to view

humans as cogs within a machine, not taking into
account the importance of human needs.
• The essence of the classical viewpoint was that work
activity was amenable to a rational approach.
• The classical viewpoint also led to such innovations
as management by objectives and goal setting.

© McGraw Hill
 BEHAVIORAL VIEWPOINT: BEHAVIORISM,
HUMAN RELATIONS, AND BEHAVIORAL
SCIENCE 1
Behavioral viewpoint: Emphasized the importance of
understanding human behavior and motivating
employees toward achievement
Developed over three phases:
1. Early behaviorism
2. The human relations
movement
3. Behavioral science

© McGraw Hill
 BEHAVIORAL VIEWPOINT: BEHAVIORISM, HUMAN
RELATIONS, AND BEHAVIORAL SCIENCE 2

• Early Behaviorism:
Pioneered by
Munsterberg, Follett, and
Mayo
• The Human Relations
Movement: Pioneered by
Maslow and McGregor
• The Behavioral Science
Approach
© McGraw Hill AP Images
 EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG,
FOLLETT, AND MAYO 1

Hugo Munsterberg is called the father of industrial

psychology.
He suggested that psychologists could contribute to
industry in three ways:
1. Study jobs and determine which people are best suited to
specific jobs.
2. Identify the psychological conditions under which employees
do their best work.
3. Devise management strategies to influence employees to
follow management’s interests.

© McGraw Hill
 EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG,
FOLLETT, AND MAYO 2

• Mary Parker Follett was lauded as a female

pioneer in the fields of civics and sociology.
• Follett thought organizations should become
more democratic, with managers and
employees working cooperatively.
• Three key ideas in making organizations
more democratic

© McGraw Hill
 EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG,
FOLLETT, AND MAYO 3

Mayo led a Harvard research group to conduct worker

productivity studies at Western Electric’s Hawthorne
(Chicago) plant in the late 1920s.

Hawthorne Effect:
• Employees worked harder if they received added attention, if they
thought that managers cared about their welfare, or that
supervisors paid special attention to them.

© McGraw Hill
 THE HUMAN RELATIONS MOVEMENT:
PIONEERED BY MASLOW

• Abraham Maslow and the Hierarchy of Needs

• Maslow observed that his patients had certain

innate needs that had to be satisfied before
they could reach their fullest potential.

© McGraw Hill
 THE HUMAN RELATIONS MOVEMENT:
PIONEERED BY MCGREGOR

• Douglas McGregor came to realize that it was not

enough for managers to try to be liked; they also
needed to be aware of their attitudes toward
employees.

• These attitudes could be thought of as either “X” or

“Y.”

© McGraw Hill
 THE BEHAVIORAL SCIENCE APPROACH

• Behavioral science relies on scientific research for

developing theories about human behavior that
can be used to provide practical tools for
managers.

• The disciplines of behavioral science include

psychology, sociology, anthropology, and
economics.

© McGraw Hill
 QUANTITATIVE VIEWPOINTS:
OPERATIONS
MANAGEMENT AND EVIDENCE-BASED
MANAGEMENT

• Operations Management: Being

More Effective
• Evidence-Based Management:
Facing Hard Facts, Rejecting
Nonsense

© McGraw Hill
 OPERATIONS MANAGEMENT: BEING
MORE EFFECTIVE
Operations management consists of all the job
functions and activities in which managers:
• Schedule and delegate work and job training,
• Plan production to meet customer needs,
• Design services customers want and how to deliver
them,
• Locate and design company facilities, and
• Choose optimal levels of product inventory to keep costs
down and reduce backorders.

© McGraw Hill
 EVIDENCE-BASED MANAGEMENT: FACING HARD FACTS,
REJECTING NONSENSE

Evidence-based management is based on the belief

that:
• Facing the hard facts about what works and what
doesn’t,
• Understanding the dangerous half-truths that constitute
so much conventional wisdom about management, and
• Rejecting the total nonsense that too often passes for
sound advice will help organizations perform better.

© McGraw Hill
 THE SYSTEMS VIEWPOINT 1

• The Systems Viewpoint

• The Four Parts of a System

© McGraw Hill
 THE SYSTEMS VIEWPOINT 2

• Managers must understand how the different

parts of an organization come together to achieve
its goals in order to diagnose problems and
develop effective solutions.
• Even though a system may not work very well, it
is nevertheless still a system.

© McGraw Hill
 THE FOUR PARTS OF A SYSTEM

• Systems may be open or

closed.
The four parts of a • Synergy in a system
system are: creates an effect that is
1. Inputs greater than the sum of
2. Transformational individual efforts.
processes
3. Outputs • Systems viewpoint led to
4. Feedback the development of
Complexity Theory.

© McGraw Hill
 FIGURE 2.2 THE FOUR PARTS OF A SYSTEM

Access the text alternative for slide images.

© McGraw Hill
 CONTINGENCY VIEWPOINT

• The contingency viewpoint began to develop

when managers discovered that under some
circumstances better results could be achieved by
breaking the one-best-way rule.
• The beauty, and simplicity, of contingency theory
lies in the proposition that there is not one best
way to manage.

© McGraw Hill
 CONTEMPORARY APPROACHES

• The Learning Organization: Sharing Knowledge

and Modifying Behavior
• High-Performance Work Practices
• Shared Value and Sustainable Development:
Going beyond Profits
• Responsible Management Education: The United
Nations Takes the Lead

© McGraw Hill
 THE LEARNING ORGANIZATION: SHARING KNOWLEDGE AND
MODIFYING BEHAVIOR

• Keep on learning. Three parts of a learning

• Individuals who embrace organization:
learning make the 1. Creating and acquiring
organization smarter and knowledge
contribute to its growth.
2. Transferring knowledge
• A key challenge for
managers, therefore, is 3. Modifying behavior
to establish a culture of
shared knowledge and
values that will enhance
their employees’ ability to
learn.

© McGraw Hill
 HIGH-PERFORMANCE WORK PRACTICES

The job of management, according to this viewpoint,

is to create human resource (HR) practices that
foster employee development and overall well-
being.
High-performance work practices include:
• Ability-enhancing practices
• Motivation-enhancing practices
• Opportunity-enhancing practices

© McGraw Hill
 SHARED VALUE AND SUSTAINABLE DEVELOPMENT: GOING
BEYOND PROFITS

• Shared value and sustainable development look

beyond short-term profits and focuses on the
environmental and social costs of doing business.
• Sustainable development focuses on meeting the
needs of the present without compromising the
ability of future generations to meet their own
needs.
• Shared value and sustainable development is
where business and sustainability intersect.

© McGraw Hill
 RESPONSIBLE MANAGEMENT EDUCATION:
THE UNITED NATIONS TAKES THE LEAD

• The growing importance of shared value and

sustainable development has led the United
Nations (UN) to tackle the issue.
• In 2007, the organization launched Principles for
Responsible Management Education (PRME).
• The mission of PRME is to “transform business and
management education, research and thought
leadership globally, while promoting awareness
about the Sustainable Development Goals [SDGs],
and developing the responsible business leaders of
tomorrow.”
© McGraw Hill
 CAREER CORNER: MANAGING YOUR CAREER READINESS
1

• Recruiters expect you to do some research, just

as you would for a class assignment.
• That’s good for both you and a potential employer
because it helps identify the likely level of fit
between the two of you.
• Good fit, in turn, is associated with more positive
work attitudes and task performance, lower
intentions to quit, and less job-related stress.

© McGraw Hill
 FIGURE 2.3 MODEL OF CAREER READINESS

Access text descriptions for image.

© McGraw Hill
 CAREER CORNER: MANAGING YOUR CAREER READINESS
3

To demonstrate that you understand a business, you

should learn the following 7 things about a company
before showing up for an interview:
1. The company’s missions and vision statements
2. The company’s core values and culture
3. The history of the company
4. Key organizational players
5. The company’s products, service, and clients
6. Current events and accomplishments
7. Comments from current or previous employers
© McGraw Hill
 End of Main Content

Because learning changes everything. ®

www.mheducation.com

© 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.