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Chapter 2

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Dave Swanston

TheEvolutionofManagementTheory Scientific Management: matching people and tasks to maximize efficiency Administrative Management: focuses on identifying the principles that will lead to the creation of the most efficient system of organization and management Behavioural Management: (before and after Second world war) how managers should lead and control their workforces to increase performance Management Science Theory: (developed during Second World war) important as reseachers developed analytical and quantitative techniques to help managers measure and control organizational performance Scientific Management Theory: -in late 19 century, managers had technical knowledge, unprepared for social problems -managers began to search for new ways to manage organizations resources and increase efficiency of employee task mix Job Specialization and Division of Labour Adam Smith experimented between letting all members of a group do 18 tasks, while having some people in a group do different 18 tasks. Employees that specialized in a few tasks had greater performance. Adam Smith said increasing the level of job specialization—the process by which a division of labour occurs as different employees specialize in different tasks over time—increases efficiency and leads to higher organizational performance. F.W. Taylor and Scientific Management Scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. Frederick W. Taylor (1856–1915) noted increased specialization and the division of laour could increase efficiency. 4 Principles 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 or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level Frank Gilbreth and Lillian Gilbreth, Taylors followers wanted to (1) break up a particular task into individual actions, and analyze each step needed to perform the task, (2) find better ways to perform each step, and (3) reorganize each of the steps 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. Organizational structure is the system of task and authority relationships that control how employees use resources to achieve the organization’s goals. th The Theory of Bureaucracy by Max Weber (early 20 century) 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 and (b) to whom managers and employees should go if conflicts or problems arise. This
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