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MIS UNIT 2
Evolution of Management Thoughts & Business
Ethics
 The Evolution of Management Theory
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 In the closing decades of the 19th century managers were

searching to find better ways to satisfy customer’s needs.
 Hand manufactured versus sophisticated machines
 Managers/Bosses had a technical orientation and were under
prepared for the social problems that occur with large groups.
 This led to emerge of various management theories:

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 scientific management: The systematic study of relationships

between people and tasks for the purpose of redesigning the work
process to increase efficiency
 administrative management: The study of how to create an
organizational structure and control system that leads to high
efficiency and effectiveness
 behavioral management: The study of how managers should
behave to motivate employees and encourage them to perform at
high levels and be committed to the achievement of organizational
goals

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 management science theory: An approach to management

that uses rigorous quantitative techniques to help managers
make maximum use of organizational resources
 organizational environment: The set of forces and conditions
that operate beyond an organization’s boundaries but affect a
manager’s ability to acquire and utilize resources

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 Job Specialization and
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the Division of Labor
 Adam Smith (18th century economist)
 Observed that firms manufactured pins in one of two
different ways:
- Craft-style—each worker did all steps.
 - Production—each worker specialized in one step.

 Smith found that the performance of the factories in

which workers specialized in only one or a few tasks was
much greater than the performance of the factory in
which each worker performed all pin-making tasks

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 Job Specialization
 processby which a division of labor occurs as different
workers specialize in specific tasks over time
 Workers who specialized became much more skilled at
their specific tasks
 Increasing job specialization increases efficiency and
leads to higher organizational performance

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 F.W. Taylor and Scientific Management
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 F.W. Taylor and Scientific Management
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 Frederick W. Taylor defined the techniques of Scientific

Management - the systematic study of relationships between
people and tasks for the purpose of redesigning the work process
to increase efficiency.
 Sought to reduce the time a worker spent on each task by
optimizing the way the task was done.

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 He developed four principles to increase efficiency in the
workplace efficiency.
• Identify Best Practices: Study and measure how workers perform their
jobs (using time-and-motion study methods), gather all the informal job
knowledge that workers possess and experiment with ways of
improving how tasks are performed and then identify the methods that
are most efficient.
• Standard Operating Procedures: Codify the new methods of
performing tasks into written work rules.
• Match workers skills and abilities to needs and tasks: Carefully
select workers who possess skills and abilities that match the needs of
the task, and train them to perform the tasks according to the rules
and procedures established in step two.
• Pay and performance: Establish a fair or acceptable level of
performance for a task and then develop a pay system that provides
a higher reward for performance above the acceptable level.

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 Problems with Scientific Management
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 Time and motion studies: Study the way workers perform their tasks,
gather all of the informal knowledge possessed by workers, and
experiment with ways of improving task performance.
• Some managers obtained increases in performance but did not share
gains with workers through bonuses.
• Workers learned that increases in performance often meant fewer jobs
and a threat of layoffs. They could/would purposely ‘under perform’.
• The more specialized jobs became more monotonous and repetitive,
causing dissatisfaction.
•Some organizations responded to worker resistance by increasing the
mechanization of the work process. Management responded with
increased use of machines and conveyors belts.
• Achieving the right mix of worker-task specialization produced huge cost
savings and output increases.
• Scientific management practices cause many ethical concerns

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 Administrative Management Theory
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 Administrative management is the study of how to create an

organizational structure and control systems (measurement) that
leads to high efficiency and effectiveness.
 Organizational structure is the system of tasks and authority
relationships that controls how employees use resources to achieve
the organization’s goals.
Max Weber
 Developed the concept of bureaucracy as a formal system
of organization and administration designed to ensure
efficiency and effectiveness.

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 Rules, SOPs and Norms
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 Rules – formal written instructions that specify

actions to be taken under different circumstances
 Standard Operating Procedures (SOPs) – specific
sets of written instructions about how to perform a
certain aspect of a task
 Norms – unwritten, informal codes of conduct that
prescribe how people should act in particular
situations

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