MGT 200 Management Theory

1. MGT 200 Management Theory • Required Reading: Chapter 2 of textbook Peter Senge Article Meg Wheatly Interview • Today’s Topic: History of Management Theory

2. 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

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

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

5. Scientific Management • Management practices should be based on fact and observation • Focuses on the relationship between individual workers and their tools or machines

6. Scientific Management • Frederick Taylor • There is “one best way” to perform a task • Time and motion studies • Money motivates employees to do their best • Frank and Lillian Gilbreth • Followers of Taylor • Henry Gantt • Control systems for production scheduling

7. Assessing Scientific Management • Many aspects used today • Misreads human side of work • Simple tasks and clear rules don’t guarantee results

8. 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

9. 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 Fayol’s Administrative Principles

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

11. Assessing Administrative Theories • Managers still use many of Fayol’s principles • Overemphasizes the rational behavior of managers • Advantages & disadvantages of bureaucracy • Benefits: efficiency, consistency • Costs: rigid, slow, difficult to adapt

12. Behavioral Theory • Focuses on the human aspects of organizations • Mary Parker Follet • Management is a dynamic process • Workers should be involved in decisions • Chester Barnard • Organizations are social systems • Managers need “buy-in” of employees

13. 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

14. 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

15. Behavioral Theory Assessment • Adds greatly to the mechanistic view of managing people • But human relation skills alone won’t guarantee increased productivity or high quality work • Managing the human aspects of an organization is a very complex task

16. 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

17. Chaos Theory Principles • Information access • Everyone has easy access to all the information they need to do their job • Relationships • Everyone has easy access to anyone they need to do their job • Self-reference • The organizations core identity or purpose

18. 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

19. 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

20. Contingency Viewpoint • Basic contingency variables: • External environment • Technology • Individuals • Importance of each variable depends on type of situation and problems being faced

21. 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 don’t consider to really be a “theory” of management • just draws on other theories

22. 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

23. What’s Next? • Current Trends and Issues in Management • Read Chapter 2: pages 40-53 • Read Senge handout on Systems Thinking