Topic

History of Management
Organization Theory in Action
• Current Challenges
– Globalization
– Intense Competition
– Ethics and Social Responsibility
– Speed of Responsiveness
– The Digital Workplace
– Diversity
• Organization theory helps us explain what
happened in the past, as well as what may
happen in the future, so that we can manage
organizations more effectively
• Organization (n.)
– Enterprise (企業)
– Non-profit organizations
• Organize (v.)
– Planning
– Organizing
– Leading
– Control
 What is an Organization?

Social (interpersonal) entities (human) that

are goal-directed
Designed as deliberately structured and
coordinated activity systems
Linked to the external environment
Includes large multinational corporations, family
owned businesses as well as nonprofits
 Importance of Organizations
• Organizations are a means to an end
• The corporation has played a significant role in the last
100 years
• Produce goods and services efficiently
• Facilitate innovation
• Adapt to and influence a changing environment
• Create value for owners, customers, and employees
• Accommodate ongoing challenges of diversity, ethics, and
the motivation and coordination of employees
Dimensions of Organization Design

Structural Dimensions Contingency Factors

– Formalization – Size
– Specialization – Organizational
– Hierarchy of Authority technology
– Centralization – Environment
– Professionalism – Goals and strategy
– Personnel Ratios – Culture
 Performance and
Effectiveness Outcomes
• Efficiency – amount of resources used to
achieve the organization’s goals
• Effectiveness – the degree to which an
organization achieves its goals
• Stakeholder Approach – balancing the needs of
groups in and outside of the organization that has
a stake in the organization’s performance
 The Evolution of Organization
Theory and Design

Historical perspectives provide insight into

how organization design and management
practices have varied over time in
response to changes in society.
 Historical Perspectives

• Efficiency is Everything
– Scientific Management: Pioneered by Frederick Winslow Taylor
• How to Get Organized
– Administrative Principles
• Contributed to Bureaucratic Organizations
• What about People?
– Hawthorne Studies
• Can Bureaucracies Be Flexible?
– Flexible and lean; focused on service, quality, and engaged
employees (1908s)
• It All Depends: Key Contingencies
– Contingency: there is no “one best way”
 Early Management

• The Egyptian pyramids and the Great Wall of

China are proof that projects of tremendous
scope, employing tens of thousands of people,
were completed in ancient times.
 Job Specialization

• In 1776 Adam Smith published “The Wealth of

Nations”
– division of labor (job specialization): the
breakdown of jobs into narrow and repetitive
tasks
 Industrial Revolution

• Industrial revolution: a period during the late

eighteenth century when machine power was
substituted for human power, making it more
economical to manufacture goods in factories
than at home
Major Approaches to Management
 Classical Approach

• Classical approach: first studies of

management, which emphasized rationality and
making organizations and workers as efficient as
possible
 Scientific Management

• Scientific management: an approach that

involves using the scientific method to find the
“one best way” for a job to be done
• Taylor’s Scientific Management Principles
Principles
1. Develop a science for each element of an individual’s work to replace the old rule-
of-thumb method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.
4. Divide work and responsibility almost equally between management and workers.
Management does all work for which it is better suited than the workers.
 Frank and Lillian Gilbreth
Henry L. Gantt

• Therbligs: a classification scheme for labeling

basic hand motions
• Henry L. Gantt
– Reward system
• Bonus
• Take Foreman & workman
– Scheduling
• Gantt chart
 General Administrative Theory

• General administrative theory: an approach to

management that focuses on describing what
managers do and what constitutes good
management practice
 Henri Fayol

• Principles of management: fundamental rules of

management that could be applied in all
organizational situations and taught in schools
Principles
1. Division of work. Specialization increases output by making employees more efficient.
2. Authority. Managers must be able to give orders, and authority gives them this right.
3. Discipline. Employees must obey and respect the rules that govern the organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide managers
and workers.
6. Subordination of individual interests to the general interest. The interests of any one
employee or group of employees should not take precedence over the interests of the
organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
Principles
8. Centralization. This term refers to the degree to which subordinates are involved
in decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks is the
scalar chain.
10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel. Management should provide orderly personnel
planning and ensure that replacements are available to fill vacancies.

13. Initiative. Employees allowed to originate and carry out plans will exert high
levels of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within the
organization.
 Max Weber

• Bureaucracy: a form of organization characterized by

division of labor, a clearly defined hierarchy, detailed rules
and regulations, and impersonal relationships
 Behavioral Approach
• Organizational behavior (OB): the study of the
actions of people at work
• Robert Owen
– Improve labor environment
– Humanitarianism
• Hugo Munsterberg
– 《Psychology and Industrial Efficiency》-1913
– Use scientific method to understand human behavior
• Psychological test → selection
• Learning → Training
• Motivation
 Hawthorne Studies

• Hawthorne studies: a series of studies during

the 1920s and 1930s that provided new insights
into individual and group behavior
– Research in group norm (1920 – 1930)
– Beginning: the relation between lighting & productivity
– George Elton Mayo
– Hawthorne effect
• Group standard
• Group affect
• Sense of security
 Human Relations Approach

• Dale Carnegie
– 《How to Win Friends and Influence People》
• Impression management
• Empathy
• Face saving
• Abraham Maslow
– Hierarchy of needs
• Douglas McGregor
– Human side of enterprise – X theory vs. Y theory
 Quantitative Approach

• Quantitative approach: the use of quantitative

techniques to improve decision-making
• Operations research, OR
• Starts from World War II
– Robert McNamara
• Cost-benefit analysis
– Charles Thornton
• Diversification – Litton Industries (利頓實業)
 Total Quality Management

• Total quality management (TQM): a philosophy of

management that is driven by continuous
improvement and responsiveness to customer
needs and expectations
 What is Quality Management?

Characteristic
1. Intense focus on the customer. The customer includes outsiders who buy the organization’s
products or services and internal customers who interact with and serve others in the
organization.
2. Concern for continual improvement. Quality management is a commitment to never being
satisfied. “Very good” is not good enough. Quality can always be improved.
3. Process focused. Quality management focuses on work processes as the quality of goods
and services is continually improved.
4. Improvement in the quality of everything the organization does. This relates to the final
product, how the organization handles deliveries, how rapidly it responds to complaints, how
politely the phones are answered, and the like.
5. Accurate measurement. Quality management uses statistical techniques to measure every
critical variable in the organization’s operations. These are compared against standards to
identify problems, trace them to their roots, and eliminate their causes.
6. Empowerment of employees. Quality management involves the people on the line in the
improvement process. Teams are widely used in quality management programs as empowerment
vehicles for finding and solving problems.
 Contemporary Approaches

• System: a set of interrelated and interdependent

parts arranged in a manner that produces a unified
whole
• Closed systems: systems that are not influenced
by and do not interact with their environment
• Open systems: systems that interact with their
environment
Organization as an Open System
 Contingency Approach

• Contingency approach: a management approach

that recognizes organizations as different, which
means they face different situations
(contingencies) and require different ways of
managing
 Popular Contingency Variables
Variable
Organization Size. As size increases, so do the problems of coordination. For in-
stance, the type of organization structure appropriate for an organization of 50,000
employees is likely to be inefficient for an organization of 50 employees.
Routineness of Task Technology. To achieve its purpose, an organization uses
technology. Routine technologies require organizational structures, leadership styles,
and control systems that differ from those required by customized or nonroutine
technologies.
Environmental Uncertainty. The degree of uncertainty caused by environmental
changes influences the management process. What works best in a stable and
predictable environment may be totally inappropriate in a rapidly changing and
unpredictable environment.
Individual Differences. Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations. These and other individual differences are
particularly important when managers select motivation techniques, leadership styles,
and job designs.