Classical Management Theories

1. Classical Management Theories • Scientific Management • Administrative Principles • Bureaucratic Organizations

2. Bureaucratic Organization (Max Weber) • Noticed German managers got jobs because of who they are, not what they know • Developed the Bureaucratic Organization Principle • Based on principles of order and legitimate authority

3. Characteristics of bureaucratic organizations: Clear division of labor Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit Business is a “machine” Bureaucratic Organization (Max Weber)

4. Pros: Efficient Objective Fair career paths Cons: Excessive paperwork or “red tape” Slowness in handling problems Rigidity in the face of shifting needs Resistance to change Employees become “a number” Bureaucratic Organization (Max Weber)

5. And that’s all for Classical Management Theories! …but has a perfect theory been reached?

6. Recap Classical Theories • Scientific Management = productive but to robotic • Administrative Principles = established leadership but too hierarchical • Bureaucratic Organization = provides order but is too slow and impersonal

7. Behavioural Approach to Management • Look at the needs of employees, how they feel in a given work environment, and how this impacts their work

8. Western Electric Hawthorne Works Company The Western Electric Company in Cicero, Illinois was looking to save money in their factory and began testing productivity when lighting and heat variables were changed. A group of workers were chosen as test subjects and were put in a special room where they would carry out their regular daily tasks.

9. Each worker was required to build electrical relay switches, a small but complicated component that consists of over 40 separate pieces. Each worker was asked to sit alone at a table and build the relays. When completed, an assembled relay was dropped in a chute where it would be counted and added to the worker’s total.

10. Prior to the testing each employee worked a 48-hour week (including Saturdays) and was given no rest pauses except for the lunch break. Under these conditions the average worker could produce 2,400 relays in one week. The first day of the experiment, a regular temperature was applied to the room where the group of workers was sent, however the

11. lighting was increased by 25%. The employees continued to work and what do you think happened to their productivity? One the second day, temperature again remained the same but lighting was reduced this time by 50%. What happened to their productivity now? The third day temperature remained the same

12. but lighting was reduced to a level at which it was difficult for the workers to see. What happened to productivity now? Next, temperature was used as a variable. First it was increased to extremely high temperatures, then reduced to a point at which the workers were wearing their jackets. In both cases you can probably guess what happened to productivity…

13. How does this make any sense? Should managers put their employees in dark, cold rooms to increase production? Or maybe extremely bright, hot rooms?

14. Hawthorne Studies • Something psychological effects worker productivity • Elton Mayo, Harvard Business Professor created Hawthorne Studies from 1927-1932

15. Hawthorne Studies Results • Being “included” increase productivity • Self-worth and value increase productivity • Employees want to have purpose, not be another “number” • The Hawthorne Effect: People who are singled out increase their performance.