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Ch.2 MGM101.doc

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University of Toronto Mississauga
Gill Parveen

Ch.2 The Evolution of Management Theory Scientific Management Theory • The evolution of modern management began in the closing decades of the 19 century, after the Industrial Revolution had swept through Europe, Canada and the U.S. • Many managers and supervisors had only technical knowledge and were unprepared for the social problems that occur when people work together in large groups Job Specialization & The Division of Labor • Employees who specialized became much more skilled at their specific tasks, were able to produce a product faster than the group of employees in which everyone had to perform many tasks • Increasing level of job specialization –the process by which a division of labor occurs as different employees specialize in different tasks over time –increases efficiency and leads to higher organizational performance F.W. Taylor & Scientific Management • Frederick W. Taylor is best known for defining the techniques of scientific management –the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency • To increase efficiency in the workplace: • Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving the way tasks are performed • Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures • Principle 3: Carefully select workers so that they 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 • Principle 4: Establish a fair acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level • Scientific management brought many employees more hardship than gain, and left them with a distrust of managers who did not seem to care about their well being Administrative Management Theory • Administrative management –the study of how to create an organizational structure that leads to high efficiency and effectiveness • Organizational structure is the system of task and authority relationships that control how employees use resources to achieve the organization’s goals. The Theory of Bureaucracy • Max Weber developed the principles of bureaucracy –a formal system of organization and administration designed to ensure efficiency and effectiveness • Principle 1: In a bureaucracy, a manager’s formal authority derives from the position he or she holds in the organization • In a bureaucratic system of administration, obedience is owed to a manager, not because of any personal qualities that he or she might possess –such as personality, wealth, or social status –but because the manager occupies a position that is associated with a certain level of authority and responsibility • Principle 2: In a bureaucracy, people should occupy positions because of their performance, not because of their social standing or personal contacts. • This principle was not always followed in Weber’s time and is often ignored today. Some organizations and industries are still affected by social networks in which personal contacts and relations, not job-related skills, influence hiring and promotional decisions. • Principle 3: The extent of each position’s formal authority and task responsibilities and its relationship to other positions in an organization, should be clearly specified • When the tasks and authority associated with various positions in the organization are clearly specified, managers and employees know what is expected of them and what to expect from each other. Moreover, an organization can hold all its employees strictly accountable for their actions when each person is completely familiar with his or her responsibilities • Principle 4: For authority to be exercised effectively in an organization, positions should be arranged hierarchically. This helps employees know whom to report to and who reports to them. • Managers must create an organizational hierarchy of authority that makes it clear a) Who reports to whom b) To whom managers and employees should go if conflicts of problems arise. This principle is especially important to the Armed Forces, Canadian Security • Principle 5: Managers must create a well-defined system of rules, standard operating procedures, and norms so that they can effectively control behavior within an organization • 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. • Weber believed that organizations that implement all 5 principles will establish a bureaucratic system that will improve organizational performance • The specification of positions and the use of rules and SOPs to regulate how tasks are performed make it easier for managers to organize and control the work of subordinates Behavioral Management Theory • Behavioral management –the study of how managers should behave in order to motivate employees and encourage them to perform at high levels and be committed to achieving organizational goals The Hawthorne Studies and Human Relations • Main implications of the Hawthorne studies was that the behavior of managers and employees in the work setting is as important
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