Management 1600 Chapter 2

US Industrial Revolution
The period when the US began to shift from an agrarian society to an industrialized society. Allowed companies to expand the markets.
The actions of an emplyee who intentionally restrict output.
Scientific Development
1. Designating specific jobs.
2. Progressive training of employees. Matching the job with the worker. Study worker strength and weakness.
3. Tell they why’s to the employee.
4. Interdependence between management and workers.
The division of labor to most effectively produce.
Fayol’s 14 Principles of Management
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to the general interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of tenured personnel
13. Initiative
14. Esprit de Corps
1. Division of Work
Specialization of work.
2. Authority
Formal authority versus personal authority.
3. Discipline
Based on obedience and respect.
4. Unity of Command
Each employee should receive orders from only one supervisor.
5. Unity of Direction
One bass, one plan for a group of activities having the same objective.
6. Subordination of Individual Interests to the General Interests
A plea to abolish the tendency to place individual interests ahead of the group interests.
7. Remuneration
The mode of payment of wages was dependent on many factors.
8. Centralization
The degree of centralization desired depended on the situation and the formal communication channels.
9. Scalar Chain
Shows the routine of the line of authority and formal communication channels.
10. Order
Ensure a place for everything.
11. Equity
Resulted from kindness and justice.
12. Stability of Tenures Personell
Call for orderly personnel planning.
13. Initiative
Called for individual zeal and energy in all efforts.
14. Esprit de Corps
Stressed the building of harmony and unity within the organizations.
Period of Solidification
A period in the 1920s and 1930s in which management became recognized as a discipline.
Golden Age of Unionism
During the Great Depression when legislatures and court actively supported employees and the worker.
Hawthorne Studies
Worker productivity increased due to psychological and social condition rather than the environment.
Professional Manager
A career person who does not necessarily have a controlling interest in the enterprise for which he or she works. Their responsibilities are to the employees, stockholders, and the public.
Lincoln’s Reward Plan
1. An advisory board of employees.
2. A piece-rate method of compensation wherever possible.
3. A suggestion system.
4. Employee ownership of stock.
5. Year-end bonuses.
6. Life insurance for all employees.
7. Two weeks of paid vacation.
8. An annuity pension plan.
9. A promotion policy.
Henry Dennison
Believed the strength of an organization can from its members and the sources of power are the incentives, habits, and traditions.
McCormick multiple-management Plan
Developed by Charles McCormick, a plan that uses participation as a training and motivational tool by selecting promising young employees from various company departments to form a junior board of directors.
Bottom Up Management
Philosophy by William B Given that encouraged widespread delegation of authority to solicit the participation of all employees from the bottom to the top of the organization.
Scanlon Plan
Incentive plan developed by Joseph Scanlon to give workers a bonus for tangible savings in labor costs.
Process Approach to Management
Focuses on the management functions of planning, controlling, organizing, staffing, and leading.
Henri Fayol
The first management scholar to present an analysis of the management process.
Oliver Sheldon
Gave a breakdown of the management process. He defined management as the determination of business policy, the coordination of the execution of policy, the organization of the business, and the control of the executive.
Ralph C. Davis
The first American to publish a functional breakdown of the management process. He split it into three functions: planning, organization, and controlling.
Management Theory Jungle
Referring to the division of though that resulted from studying the management process.
Systems Approach to Management
A way of thinking about the job of managing that provides a framework for visualizing internal and external environmental factors as an integrated whole.
Contingency Approach to Management
Theorizes that different situation and conditions require different management approaches.
Theory Z
A theory developed by William Ouchi that attempts to integrate American and Japanese management practices by combining the American emphasis on individual responsibility with the Japanese emphasis on collective decision making, slow evaluation and promotion, and holistic concern for employees.
Peters and Waterman’s Eight Characteristics of Excellent Companies.
1. A bias for action – A willingness to experiment
2. Close to the customer – willingness to listen to the customer
3. Autonomy and Entrepreneurship – Tolerate mistakes and promote innovation
4. Productivity through people – Employees treated with dignity and trust
5. Hands on; value driven – clearly communicated, hands-on
6. Stick to the knitting – Grow business rather than merge
7. Simple form; lean staff – Clear lines of authority
8. Simultaneous loose-tight properties – Core values are kept, but autonomy is not
Industrial Revolution
Steam power
Railroad boom
Captains of industry
John D. Rockefeller
James B. Duke
Andrew Carnegie
Cornelius Vanderbilt
Scientific Management Era
Henry Towne “The Engineer as Economist”
Frederick W. Taylor
Henry Fayol
Period of Solidification
Founding if professional management societies
Human relations movement
Hawthorne studies, led by Elton Mayo
Mary Parker Follett
Chester Barnard, “Functions of the Executive”
Management process period
Widely circulated English translation of Fayol’s work
Ralph Davis “Top Management Planning”
Early principles of management texts
Management Theory Jungle
Process Approach
Quantitative approaches
Behavioral Approaches
Systems approach
Integrates the various approaches to the study of management
Continency Approach
Theorizes that different situations and conditions require different management appraches
Theory Z
Combines certain aspects of traditional Japanese and American management types.
Emphasis on quality, TQM
Emphasis on overall quality of the product or service
International Movement
Increased awareness of international and global markets and managerial appraoches
Management into twenty-first century
Extremely fluid organizations; multidisciplinary and multiskilled teams

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