Job specialization (Adam Smith): The process by which a division of labour occurs as
different employees specialize in different tasks over time.
Scientific management (F.W Taylor): The systematic study of relationships between
people and tasks for the purpose of redesigning the work process to increase
• 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
Lilian and Frank Gilbreth: Their aims were 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: the study of how to create an organizational structure
that leads to high efficiency and effectiveness.
Bureaucracy: A formal system of organization and administration designed to
ensure efficiency and effectiveness
Max Weber: principles of bureaucracy
· 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.10
• 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.
Authority: The power to hold people accountable for their actions and to make
decisions concerning the use of organizational resources
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 rules and informal codes of conduct that prescribe how people
should act in particular situations Behavioural 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
**read page 35-38**
Commercial Endeavours refers to the markets the organization serves, the products
and services it offers, and the needs it professes to meet in the marketplace.
Employee Interaction refers to the value-creating skills an organization’s employees
bring to the marketplace. The success of many businesses lies with the specialized
skills that exist within its labour force.
Organizational Efficiency and Structure is a reflection of the complexities of the
business activities that circulate within an organization.
An efficient and effective operating platform (business system) will also possess
three fundamental characteristics against which it can be assessed: its commercial
endeavours, its human resource (employee) interaction model, and its
organizational efficiency and structure
Business refers to the mission- focused activities aimed at identifying the needs of
a particular market or markets, and the development of a solution to such needs
through the acquisition and transformation of resources into goods and services
that can be delivered to the marketplace at a profit.
Assets refers to the infrastructure and resource base of the organization
Labour refers to the human resource requirements of the business. Capital refers to the money needed by an organization to support asset-based
expenditures, meet operating cash requirements, and invest in the development of
new products and/or services which the organization desires to introduce into the
Managerial Acumen refers to the foresight, drive, knowledge, ability, decision-
making competency, and ingenuity of the organization’s key individuals—its owners
or top-level managers.
Business Model (System) is the operational platform or structure that a business
uses to generate revenue and profit.
Fundamental to this challenge is for the business owner and his/her management