The Evolution of Management Thought

Learning Objectives
• Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory
• Explain the principle of job specialization and division of labor, and tell why the study of person-task relationships is central to the pursuit of increased efficiency
• Identify the principles of administration and organization that underlie effective organizations
• Trace the change in theories about how managers should behave to motivate and control employees
• Explain the contributions of management science to the efficient use of organizational resources
• Explain why the study of the external environment and its impact on an organization has become a central issue in management thought


The Evolution of Management Theory



Job Specialization and the Division of Labor
Adam Smith (18th century economist)
– Observed that firms manufactured pins in one of two different ways:
- Craft-style—each worker did all steps.
- Production—each worker specialized in one step.


Question related to the job specialization
What is the process by which a division of labor occurs as different workers specialize in specific tasks over time?
A. Job Diversification
B. Job Sterilization
C. Job Specification              
D. Job Specialization
E. Job Specialization
A. process by which a division of labor occurs as different workers specialize in specific tasks over time

• Workers who specialized became much more skilled at their specific tasks
• Increasing job specialization increases efficiency and leads to higher organizational performance


F.W. Taylor and Scientific Management
Scientific Management
The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
Four Principles of Scientific Management
1) Study the way workers perform their tasks, gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed
• Time-and-motion study
2) 2) Codify the new methods of performing tasks into written rules and standard operating procedures
1) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures
2) Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level


Problems with Scientific Management
• Managers frequently implemented only the increased output side of Taylor’s plan.
– Workers did not share in the increased output.
• Specialized jobs became very boring, dull.
– Workers ended up distrusting the Scientific Management method.
• Workers could purposely “under-perform.”
– Management responded with increased use of machines and conveyors belts.
The Gilbreths

1. Break up and analyze every individual action necessary to perform a particular task into each of its component actions
2. Find better ways to perform each component action
3. Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort

Administrative Management Theory
• Administrative Management
– The study of how to create an organizational structure that leads to high efficiency and effectiveness.
Max Weber
– Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness.

Weber’s Principles of Bureaucracy

1) A manager’s formal authority derives from the position he holds in the organization.
2) People should occupy positions because of their performance, not because of their social standing or personal contacts.
Weber’s Principles of Bureaucracy
3) The extent of each position’s formal authority and task responsibilities and it’s relationship to other positions should be clearly specified.
4) Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.
5) Managers must create a well-defined system of rules, standard operating procedures,
and norms so they can effectively control behavior.

Rules, SOPs and Norms
• Rules – formal written instructions that specify actions to be taken under different circumstances to achieve specific goals
• Standard Operating Procedures (SOPs) – specific sets of written instructions about how to perform a certain aspect of a task
• Norms – unwritten, informal codes of conduct that prescribe how people should act in particular situations