Scientific Management Theory
o
Modern management began in the late 19th century.
o
Organizations
were seeking ways to better satisfy customer needs.
o
Machinery
was changing the way goods were produced.
o
Managers
had to increase the efficiency of the worker-task mix.
Job specialization
l Adam Smith, 18th century economist,
found firms manufactured pins in two ways:
n Craft -- each worker did all steps.
n Factory -- each worker specialized in
one step.
l Smith found that the factory method
had much higher productivity.
n Each worker became very skilled at
one, specific task.
Breaking
down the total job allowed for the division of labor
Scientific Management
l Defined by Frederick Taylor, late
1800’s.
l The systematic study of the
relationships between people and tasks to redesign the work for higher
efficiency.
n Taylor sought to reduce the time a
worker spent on each task by optimizing the way the task was done.
The 4 Principles
l Four Principles to increase
efficiency:
1. Study the way the job is performed now & determine new ways to do
it.
u Gather detailed, time and motion
information.
u Try different methods to see which is
best.
2. Codify the new method into rules.
u Teach to all workers.
3. Select workers whose skills match the rules set in Step 2.
4. Establish a fair level of performance and pay for higher performance.
Workers
should benefit from higher output
Problems of
Scientific Management
l Managers often implemented only the
increased output side of Taylor’s plan.
n They did not allow workers to share
in increased output.
n Specialized jobs became very boring,
dull.
n Workers ended up distrusting
Scientific Management.
l Workers could purposely
“under-perform”
l Management responded with increased
use of machines.
The Gilbreths
l Frank and Lillian Gilbreth refined
Taylor’s methods.
n Made many improvements to time and
motion studies.
l Time and motion studies:
n 1. Break down each action
into components.
n 2. Find better ways
to perform it.
n 3. Reorganize each action
to be more
efficient.
l Gilbreths also studied fatigue
problems, lighting, heating and other worker issues.
Administrative Management
l Seeks to create an organization that
leads to both efficiency and effectiveness.
l Max Weber developed the concept of bureaucracy.
n A formal system of organization and
administration to ensure effectiveness and efficiency.
n Weber developed the Five principles
shown in Figure
Key points of Bureaucracy
Authority is the power to
hold people accountable for their actions.
Positions in
the firm should be held based on performance not social
contacts.
Position
duties are clearly identified. People should know what is expected
of them.
Lines
of authority should be clearly identified. Workers know who reports
to who.
Rules,
Standard Operating Procedures (SOPs), & Norms used to
determine how the firm operates.
u Sometimes, these lead to “red-tape”
and other problems.
Fayol’s Principles
l Henri Fayol, developed a set of 14
principles:
1. Division of Labor: allows for job specialization.
u Fayol
noted firms can have too much specialization leading to poor quality and
worker involvement.
2. Authority and Responsibility: Fayol included both formal and
informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one boss.
4. Line of Authority: a clear chain from top to bottom of the firm.
5. Centralization: the degree to which authority rests at the very top.
6. Unity
of Direction: One plan of action to guide the organization.
7. Equity: Treat all employees fairly in justice
and respect.
8. Order: Each employee is put where they have
the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees needed.
11. Remuneration of Personnel: The payment system contributes to success.
12. Stability of Tenure: Long-term employment is important.
13. General interest over individual interest: The organization takes precedence
over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.
Behavioral Management
l Focuses on the way a manager should
personally manage to motivate employees.
l Mary Parker Follett: an influential leader
in early managerial theory.
n Suggested workers help in analyzing
their jobs for improvements.
n The worker knows the best way to
improve the job.
n If workers have the knowledge of the
task, then they should control the task.
