Principles of Management

The Evolution of Management

Case study: Handling competitors at Burger King

Burger King is a fast food hamburger restaurant Recent reports indicate that the company owns or franchises a total of 11,129 restaurants in 65 different countries Feature flame broiled hamburgers, chicken and other specialty sandwiches Overall menu: hamburgers, cheeseburgers, chicken and fish sandwiches, french fries, onion rings, salads and desserts. Also breakfast items New competitions from quick casual restaurants including Subway, Chipotle Mexican Grill, Cosi and Panera Bread are offering healthier food at higher prices This combination has helped restaurants in this category to steal away traditional fast food customers Recent research reveals that the quick casual concept appeals to individuals between 18 and 34 years old, a key demographic for the fast food industry Burger King is trying to operate the company in a way that is consistent with concerns of customers in a modern economy. Eg: adding its own healthier food offerings Also offering other more socially conscious choices to customers. Eg. Buying eggs and pork from suppliers that do not confine their animals in cages and crates John Chidsey recently named CEO. He understands that Burger King needs to compete ferociously to survive Some of his future challenges: building and maintaining store efficiency, managing the caloric content of the menu, dealing with illegal immigrants Chidsey has to apply his comprehensive management skill

Mr. Chidsey, in meeting your challenges, you should

Keep in mind that there is probably one best way to do restaurant jobs

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2.

True False

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Divide work among Burger King workers so that they can focus on special portions of tasks

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Not apply insights of the classical approach to management in concert with insights from the behavioral approach

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Focus on understanding how to increase production at Burger King through an understanding of people

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Not worry about some Burger King workers influencing other workers to disregard monetary incentives you offer

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Continually focus on building experience in determining what action to take at Burger King, depending on what events occur

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See Burger King as a series of interdependent parts functioning as a whole

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Build an understanding of Burger King as a closed system

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Visualize Burger King system inputs as directly leading to system outputs

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Feel free to change Burger King system inputs after considering system outputs but not system process

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Continually monitor customers to determine ways to make the Burger King system more responsive to customer needs

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Analyze Burger King as a group of interrelated parts that may or may not function as a whole

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Use systems thinking at Burger King as a foundation for building the company as a learning organization

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Scientific Management

Background

Labor short supply at start of 20th c Need to increase productivity of workers

Scientific management

Frederick W. Taylor

Develop a science for each element of the job Scientifically select employees

Give a task for which best suited

Scientific education and development of the worker Supervise employees to ensure prescribed methods are followed Intimate friendly cooperation between management and worker Differential rate system: higher rate for higher productivity Limitation: exploitation of workers

Bethlehem Steel Co

Questions

Will a first class worker do more work per day with a shovelful of 5, 10, 15, 20, 30 or 40 pounds? What kinds of shovels work best with which materials? How quickly can a shovel be pushed into a pile of materials and pulled out properly loaded? How much time is required to swing a shovel backward and throw the load a given horizontal distance at a given height?

Some of Taylors modifications

Matching shovel size with factors like

Size of the worker Weight of the materials Height and distance the materials were to be thrown

Results at the end of the

rd 3

year

Total number of shovelers needed was reduced from 600 to 140 Average number of tons shoveled per worker per day rose from 16 to 59 Average earnings per worker per day increased from $1.15 to $1.88 Average cost of handling a long ton (2240 pounds) dropped from $0.072 to $0.033

Scientific management

Henry L. Gantt

Abandoned differential rate system Bonus for a worker finishing a days assigned work load Bonus for supervisor

for each worker who reached the daily standard Extra bonus if all the workers reached it

Gantt chart: for scheduling work

Scientific management

The Gilbreths

Frank and Lillian collaborated on fatigue and motion studies Techniques and strategies for eliminating efficiency Focused on ways to promote worker welfare Every motion that was eliminated reduced fatigue Raise worker morale

Classical Organization Theory

Henri Fayol

Organizational functions

Planning Organizing Leading controlling

Principles of management Systematized the practice of management

Classical Organization Theory

Max Weber

Theory of bureaucratic management

Organization is a bureaucracy Activities and objectives rationally thought out Divisions of labor explicitly spelled out Technical competence emphasized Performance evaluations on the basis of merit

Classical Organization Theory

Mary Parker Follett

Become a whole person as member of a group Human beings grow through relationships with others in organizations Holistic model of control

Effects of environmental factors

Classical Organization Theory

Chester Barnard

As individuals pursue organization goals, they must also satisfy individual needs Balance Zone of indifference

What the employee will do without questioning the managers authority

Behavioral Management

Emphasis on individual attitudes and behaviors and group processes Importance of behavioral processes in the workplace Applying psychological concepts to industrial settings

The Hawthorne Studies

Western Electrics Hawthorne plant near Chicago Experiment 1

Manipulating lighting for a control group and a test group Lighting for test group increased higher productivity, but increase was erratic Lighting conditions made worse, productivity still increased Control groups productivity also rose despite no change in illumination

Conclusion

Attitudinal responses Groups singled out for attention group pride

Motivated them to improve performance Sympathetic supervision reinforced motivation Employees work harder if they believe that management is concerned about their welfare and supervisors paid special attention to them

Experiment 2

Piecework incentive pay plan for assembling terminal banks for telephone exchanges Scientific management: each man tries to maximize pay by producing as many units as possible Instead, the group informally established an acceptable level of output for members Overproducers rate busters Under producers chiselers Acceptability by the group: produce at accepted levels

Quantitative Management

Management science: applying quantitative models to management Operations management

The systems approach

Organization is viewed as a system

Inputs Transformation processes Outputs Feedback

Systems and wholeness

The whole should be the main focus of analysis, with the parts receiving secondary attention Integration is the key variable: interrelatedness of the many parts within the whole Possible modifications in each part should be weighed in relation to possible effects on every other part Each part has some role to perform so that the whole can accomplish its purpose The nature of the part and its function is determined by its position in the whole The parts and their interrelationships evolve to best suit the purpose of the whole

The contingency approach

Situational approach In a particular situation, under particular circumstances, at a particular time

Case study: Handling competitors at Burger King

Burger King is a fast food hamburger restaurant Recent reports indicate that the company owns or franchises a total of 11,129 restaurants in 65 different countries Feature flame broiled hamburgers, chicken and other specialty sandwiches Overall menu: hamburgers, cheeseburgers, chicken and fish sandwiches, french fries, onion rings, salads and desserts. Also breakfast items New competitions from quick casual restaurants including Subway, Chipotle Mexican Grill, Cosi and Panera Bread are offering healthier food at higher prices This combination has helped restaurants in this category to steal away traditional fast food customers Recent research reveals that the quick casual concept appeals to individuals between 18 and 34 years old, a key demographic for the fast food industry Burger King is trying to operate the company in a way that is consistent with concerns of customers in a modern economy. Eg: adding its own healthier food offerings Also offering other more socially conscious choices to customers. Eg. Buying eggs and pork from suppliers that do not confine their animals in cages and crates John Chidsey recently named CEO. He understands that Burger King needs to compete ferociously to survive Some of his future challenges: building and maintaining store efficiency, managing the caloric content of the menu, dealing with illegal immigrants Chidsey has to apply his comprehensive management skill

Mr. Chidsey, in meeting your challenges, you should

Keep in mind that there is probably one best way to do restaurant jobs

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Divide work among Burger King workers so that they can focus on special portions of tasks

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Not apply insights of the classical approach to management in concert with insights from the behavioral approach

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Focus on understanding how to increase production at Burger King through an understanding of people

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Not worry about some Burger King workers influencing other workers to disregard monetary incentives you offer

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Continually focus on building experience in determining what action to take at Burger King, depending on what events occur

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

See Burger King as a series of interdependent parts functioning as a whole

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Build an understanding of Burger King as a closed system

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Visualize Burger King system inputs as directly leading to system outputs

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Feel free to change Burger King system inputs after considering system outputs but not system process

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Continually monitor customers to determine ways to make the Burger King system more responsive to customer needs

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Analyze Burger King as a group of interrelated parts that may or may not function as a whole

1.

2.

True False

0%
0 of 35
1

0%
20
2
Countdown

Use systems thinking at Burger King as a foundation for building the company as a learning organization

1.

2.

True False

0%
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1

0%
20
2
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