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Evolution Management NARRATOR: For centuries, scientists have been following the behavior of workers and managers. The understanding and analysis of this behavior grew into a new field of study, management thought. Management thought is a relatively new discipline. Over the past century, its modern practice has grown out of the influence of social, economic and political forces. It has also grown from the influence of many researchers and practitioners such as Frederick Taylor, Elton Mayo and W. Edwards Deming. NARRATOR: By the late 1800’s America had become the manufacturing capital of the world. Mass production techniques enabled companies to turn out more products at a lower cost than ever before. The sky was the limit! Improvement in assembly line technology led to large-scale production of a wide variety of material goods. These technological advancements came about at such an accelerated pace that a certain degree of chaos developed. Most businessmen of the time perceived this chaos in terms of a national productivity problem. Businesses weren’t as efficient as they should have been. Three issues formed the basis for the problem. First was the problem of collaboration between people and machines. Many factory workers were afraid that substituting machine power for human power would result in the elimination of jobs. Workers were also physically afraid of large, noisy, dirty and dangerous factory machines. The second obstacle was a general inexperience in running large size factories and organizations that could produce large volumes of products to lower the cost per item. Because owners and employees weren’t used to working in large groups different authority structures were needed. Standard operating procedures had to be developed and implemented. Whatever efficiencies these procedures brought about were off set in part by an overall depersonalization in the workplace. Bigger businesses were just having bigger problems. The more managers began to realize how costly these problems were becoming the more they searched for solutions. NARRATOR: The search for solutions provided the basis for the development of the four major theories or approaches to management. The classical approach beginning in the late 1800’s, the behavioral approach in the early 1900’s, the systems approach in the 1930’s and 1940’s and the contingency approach a theory that gained prominence in the 1960’s. INSTRUCTOR: “Let’s bring Taylor up in the 1890’s.” NARRATOR: The classical approach to management emphasizes the manager’s role in the formal hierarchy of authority. It focuses on the task, machines and systems needed to perform the task efficiently. The classical approach has two components scientific management and administrative management. An effort to blend the study and functions of engineering with those of business economics came to be known as shop management. Shop management gave way to an entirely new discipline known as scientific management. Scientific management emphasizes improving the efficiency of work by the systematic and scientific study of work methods, tools and performance standards.

Evolution Management Page 2 of 4 NARRATOR: Frederick Taylor is remembered for his contributions to management thought in the first part of the twentieth century. As a result of his experience in the steel mills of Philadelphia, Taylor concluded that the productivity problem of the day was due to lack of management attention to workers. This contradicted the beliefs of most businessmen in the early 1900’s who blamed the productivity problem on the general laziness of workers. Taylor’s theory was based mainly on his observations of soldiering among steel mill workers. Soldiering is the systematic slow down in work by laborers in order to keep their employers ignorant of how fast the work can be done. Taylor believed that the deceptive practice of soldiering existed for three reasons. First management didn’t know how much work could be done. Second many laborers thought if they worked too fast, they would work themselves out of a job. Third workers didn’t know how to do their jobs efficiently to begin with. Taylor blamed these problems on poor management. According to Taylor, the role of management is to: 1) Develop the one best way to perform any task. 2) Scientifically select, train, teach and develop each worker. 3) Cooperate with workers and provide an incentive to insure that the work is done according to the one best way. 4) Divide the work and the responsibility equally between management and labor. The other arm of the classical approach to management theory is administrative management. This approach emphasizes that management as a function can be applied to any size or kind of organization. Administrative management theories focus on the coordination of the workings of an entire organization not just organizing the work of individual workers. Classical management theories are broadly grounded in the assumption that work is a rational undertaking that is done in order to make money and given that, the behavior of people at work will be fairly predictable and easy to understand. The trouble is that isn’t always true. Work often isn’t a rational, logical or reasonable process and to many people work is more than just a means of making money. The need study and understand human behavior and look at management in this light began to develop in the early 1900’s. The behavioral approach is a view of management that stresses understanding the importance of people’s needs and attitudes within formal organizations. INSTRUCTOR: “What we will do is we will bring up the Hawthorne studies if you would that took place here in Chicago in the 1930s.” NARRATOR: Beginning in 1924 a group of researchers from MIT and Harvard led by Professor Elton Mayo began conducting experiments at Western Electric’s Hawthorne Plant in Cicero, IL. They didn’t know it at the time but their research would span nine years before they could come to a conclusion.

Evolution Management Page 3 of 4 VOICE OF MAYO: “We were trying to find out what circumstances in the workplace had the greatest affect on worker output. We experimented with changes in lighting, the number of hours the employees worked, rest periods, incentive pay and hot lunches. It seemed that none of these factors had any direct link to output. But we found that when being interviewed the workers lost their shyness and fear. They began to feel valued by their coworkers and supervisors. Our studies showed that good social relationships in the workplace is what produces more output.” NARRATOR: The Hawthorne experiments marked a change in the direction of management theory and practice. The systems approach to management theory views organizations as sets of interrelated parts to be managed as a whole with the purpose of achieving a common goal. Systems organizations consist of inputs, transformation processes, outputs and feedback. One of the great management thinkers of this half century is W. Edwards Deming. Deming has been credited with among other things resurrecting Japan’s economy in the years that followed the second world war. INSTRUCTOR: “Bring up Deming.” NARRATOR: He devoted much of his life to spreading his message of continuous improvement and statistical process control to improve quality. Deming thought it was necessary to integrate the theories that came earlier into an approach in which all dimensions of the organization and its environment are considered as part of one system. ROBERT RODNEY, PRESIDENT MARSHALL INDUSTRIES: “About 3 ½ years ago Gordon read an article in Harvard Business Review on Dr. Deming and his 14 points and he showed it to myself and Dick Bentley. We met with some people and we attended the Deming four day seminar and began to get a picture of what this possibility could mean for the company.” NARRATOR: Some of Deming’s theories enabled Marshall Industries, a California electronics company to make a commitment to total quality within their organization. ROBERT RODNEY, PRESIDENT MARSHALL INDUSTRIES: “We see the business as very dependent. Each system in our company is dependent on the next system. Both our suppliers, our customers and our internal customer relationships have a tremendous dependency on one another. This requires everybody to work together like an orchestra or a football team where each person has a job to do but no one job is more important than the other.”

Evolution Management Page 4 of 4 NARRATOR: During the 1960’s the phrase “it depends” began to appear regularly in management writing. It depends characterized the contingency approach. The contingency approach emphasizes identifying the key variables in each situation understanding the relationships among the variables and recognizing the causes and effects of managerial decisions. Generally, the contingency approach is considered to be an outgrowth of the systems approach. NARRATOR: From the classical approach to the contingency approach and from Frederick Taylor to W. Edwards Deming, management thinking has evolved and improved. As ideas change and new theories develop, future generations will benefit from continued efforts to improve the quality of work and the quality of life in the work place.