Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short Principles of Management 2.0 1©2013...

Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short

1©2013 Flat World Knowledge, Inc.

Chapter 2 History, Globalization, and Ethics

Learning Objectives Learn about the history of

management Know the context for

contemporary principles of management

Understand key global trends See how globalization is affecting

management principles and practices

Appreciate the importance of value-based leadership (ethics) in management

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Management History Timeline


The Art of War

©2013 Flat World Knowledge, Inc. 5

1500s

Machiavelli’s The Prince

1776

Adam Smith Weather of Nations

Division of Labor

Early Management Principles


Administrative Management

Management Principles developed by Henri Fayol1. Division of Work: Work should be divided among individuals and groups to

ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.

2. Authority: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.

3. Discipline: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.

4. Unity of Command: Workers should receive orders from only one manager. 5. Unity of Direction: The entire organization should be moving towards a common

objective in a common direction.


6. Subordination Of Individual Interests To The General Interests: The interests of one person should not take priority over the interests of the organization as a whole.

7. Remuneration: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.

8. Centralization: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.

9. Scalar Chain: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.


10. Order: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.

11. Equity: All employees should be treated as equally as possible. 12. Stability of Tenure Of Personnel: Retaining productive employees should

always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.

13. Initiative: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.

14. Espirit De Corps (Team Spirits, Morale): Management should encourage harmony and general good feelings among employees.


Management Principles for Restaurants



Source: Fayol, H. (1914). Administration industrielle et generale.

Taylorism: Time and Motion Study• Scientific management, also called

Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management.


http://www.mindtools.com/pages/article/newTMM_Taylor.htm

http://en.wikipedia.org/wiki/Scientific_management

(Taylorism on ABC World Report Video)

http://www.youtube.com/watch?v=slfFJXVAepE

1911

Frederick Winslow Taylor introduces “scientific management,” which holds that jobs should be defined in detail to remove individual discretion. He argues: “Now one of the first requirements for a man who is fit to handle pig iron is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental makeup the ox than any other type.”


Taylor's 4 Scientific Management Principle• Replace rule-of-thumb work methods with methods based on a

scientific study of the tasks.• Scientifically select, train, and develop each worker rather than

passively leaving them to train themselves.• Cooperate with the workers to ensure that the scientifically

developed methods are being followed.• Divide work nearly equally between managers and workers, so

that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

http://www.netmba.com/mgmt/scientific/


Limitations of Early Theorists


Max Weber's Bureaucracy• Authority hierarchy: A clear chain of command • Division of labor: Delineated lines of authority in a fixed area of

activity• Formal rules and regulations: Action taken on the basis of and

recorded in written rules• Career Orientation: Bureaucratic officials need expert training.

They are not owners. • Impersonality: Rules are implemented by neutral officials• Formal selection and promotion: Career advancement depends

on technical qualifications judged by organization, not individuals.


A Look Backward At The Future Of Work• “System-centered” companies try to execute the corporate strategy

with maximum efficiency. • “People-centered” companies—always a minority—relax the rules in

hopes that good things will come from self-motivated workers.

©2013 Flat World Knowledge, Inc. 20http://images.businessweek.com/ss/07/08/0809_timeline/source/1.htm

Workers in Western Electric’s Hawthorne Works plant in Cicero, Ill., perform better when lighting and other working conditions are tinkered with—regardless of what the change is. Researchers realize that the workers are simply responding positively to attention from managers. This becomes known as the “.”

Hawthorne Studies (video)

http://www.youtube.com/watch?v=W7RHjwmVGhs

MANAGEMENT IDEAS OF THE 1990s


22©2013 Flat World Knowledge, Inc. Performance of the companies at http://www.forbes.com/2002/10/04/1004excellent.html

http://www.forbes.com/2002/10/04/1004excellent.html

In Search of Excellence Findings1. Managing Ambiguity and Paradox: The ability of managers to hold two

opposing ideas in mind at the same time and still be able to function effectively.

2. A Bias for Action: A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.

3. Close to the Customer: Staying close to the customer to understand and anticipate customer needs and wants.

4. Autonomy and Entrepreneurship: Actions that foster innovation and nurture customer and product champions.

5. Productivity through People: Treating rank-and-file employees as a source of quality.

6. Hands-On, Value-Driven: A management philosophy that guides everyday practice and shows management’s commitment.

7. Stick to the Knitting: Stay with what you do well and the businesses you know best. (Core competence)

8. Simple Form, Lean Staff: The best companies have very minimal, lean headquarters staff.

9. Simultaneous Loose-Tight Properties: Autonomy in shop-floor activities plus centralized values (planning).

23

Peter’s Management Recommendations


Efficiency vs. Effectiveness

25

Doing things right. Doing the right things.

TQM: Total Quality Management• Focus on the customer • Process focused• Improvement in the quality of everything the

organization does• Accurate measure• Continuous improvement• Empowerment of employees and employee

involvement


Gurus: Edwards Deming, Joseph Juran, etc.

Baldrige Criteria for Performance Excellence Framework: A Systems Perspective

27http://www.nist.gov/baldrige/publications/upload/2011_2012_Business_Nonprofit_Criteria.pdf

http://www.nist.gov/baldrige/publications/upload/2011_2012_Business_Nonprofit_Criteria.pdf

History of Management

28

Source: Robbins and Coulter, Management, 12th edition, Pearson.

Additional Source: Kiechel III, Walter, "The Management Century," Harvard Business Review. Nov. 2012, Vol. 90 Issue 11, p62-75.

• What goals seem to dominate early management principles? Why do you think this is the case?

• Do you see any commonalities between Fayol’s principles of management from 1911 and those of Tom Peters in the 1990s? What do you think accounts for this?

• Are there any jobs today for which time and motion studies would make sense to do? Would any other skills need to be taught as well?

• How would you put some of the ideas of the 1990s into practice?

• What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?


CORPORATIONS AS SOCIAL MOVEMENTSCORPORATIONS AS SOCIAL MOVEMENTS


The blurring between social movement and corporation is evidenced in the incorporation of

Occupy Portland, an offshoot of the Occupy Wall

Street movement in Portland, Oregon.http://en.wikipedia.org/wiki/File:Occupy_Portland,_first_day.jpg

http://en.wikipedia.org/wiki/File:Occupy_Portland,_first_day.jpg

http://en.wikipedia.org/wiki/File:Occupy_Portland,_first_day.jpg

LEARNING ORGANIZATIONS LEARNING ORGANIZATIONS


The Value of Wikis

Wikis pool the talent of experts as well as everyone from across the company and beyond it – in all time zones and geographic locations.

Input from unanticipated people brings fresh ideas and unexpected connections.

Wikis let people contribute to a project any time, giving them flexibility in managing their time.

It’s easy to see the evolution of an idea, and new people can get up to speed quickly by seeing the history of the project.

Co-creation of solutions eliminates the need to “sell” those solutions to get buy-in.

Wikis cut the need for email by 75 percent and the need for meetings by 50 percent.


…transferring knowledge and experimenting with new ideas requires continuous learning and adaptation to dynamic work environments.


• What commonalities do you see between organizations and social movements?

• How could you use a social network to help with a specific task such as helping new employees to adjust to the organization?

• Do intraorganizational social networks inspire employees or do they create more problems than they are worth? Please explain your position.

• How can social networks help managers plan, organize, lead, and control?

• What are the potential advantages and potential disadvantages of a virtual organization?



• How do you manage innovation if ideas can come from anywhere, including people who aren’t your direct employees – or aren’t even part of the company?

• If, according to some trends, you can work anytime and anywhere, how do you decide when to work? When do you stop working?

• What advantages do you see from an increasingly global workforce?


GLOBALIZATION AND

CROSS-CULTURAL LESSONS

Work environments are more diverse than ever before

Cultural and language differences require diverse management approaches

© Thinkstock


Nine Dimensions of Culture


• You’ve just been made a manager in Sweden, known for its collective institutionalism. What incentives and reward structures would you use to motivate your employees?

• How might you prepare workers for an overseas assignment to help them adjust to their new location and culture effectively?

• Your company has twelve branches in the US and will be opening its first branch in Brazil. Your company prides itself on its self-managed teams. Will you keep this policy in the new country? Why or why not?

• You’re a manager in Japan and you’ve just discovered that a team leader under your supervision has made a mistake that will result in a quality problem. How will you handle this mistake?

• You work in Hong Kong for a Swiss-owned firm. The Swiss are known for their high uncertainty avoidance. What differences might you expect to see from your Swiss bosses compared to your Hong Kong employees?



Developing Your Values-Based Leadership Skills

Managers face many ethical challenges

Managers must model ethical behavior and uphold values and standards

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2002 Sarbanes-Oxley Act


• What are the consequences of unethical behavior?• If you were writing a code of ethics for your company, what

would you include?• In times of economic downturn, is ethical behavior a luxury or a

mandate?• Imagine you just found out that one of your employees has lied

on an expense report. He is a great employee and one of your best salespeople. How would you handle this ethical violation?

• Nobel laureate economist Milton Friedman said that companies should focus on maximizing profits, not social responsibilities or purposes. Do you agree with this view? Why or why not?



Mason Carpenter, Talya Bauer, Berrin Erdogan, and Jeremy Short Principles of Management 2.0 1©2013...

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