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BUREAUCRACY

Socrates Discovers Generic Management (Shafritz and Ott, 35-36)

• Socrates discusses with Nicomachides the appointment of Antisthenes, a chorus-master, to general.
• Socrates says “emulation, a quality necessary in a general” is found in Antisthenes.
• Responding to Nicomachides criticism that Antisthenes is not fit to manage because there is “nothing similar in managing a chorus
and an army,” Socrates says that Antisthenes will “select the best men in military affairs… and will probably attain superiority in this
respect…”
• Socrates proceeds to outline the similarities between good managers of a family and good generals:
1) Render Obedience and submissiveness
2) Give tasks (intrusts employments and ask to execute)
3) Punish the bad, and honor the good
4) Gain Allies and auxillaries
THEREFORE: “The conduct of private affairs differs from that of public concerns only in magnitude; in other aspects they are
similar... for those who conduct public public business make use of men not at all differing in nature (a division of labor) from those
whom the managers of private affairs employ…” (36)

ADAM SMITH “OF THE DIVISION OF LABOR”

The division of labor—how it works, what limits (Shafritz and Ott pg.37-41)

-example of the pin maker…by dividing up the stages of making the pin, u can make many more than if one person made a pin from start to
finish (pg. 37)

-division of labor doesn’t work so well in agriculture as in manufacturing b/c labor isn’t easily separated (pg.38)

-division of laborÆ Increase in the quantity of work/production is b/c of 3 difference circumstances

1. increase of dexterity in workman (pg.39)
2. saving of the time which is lost in passing from one species of work to another (pg 39)
3. invention of machines which facilitate and abridge labor (pg.40)

MAX WEBER “BUREAUCRACY” pg. (S&O, 73-78)

Bureaucracy: the basic characteristics of bureaucracy according to weber. Social impact. Org methods of overcoming these
dysfuctions.

-Principles/Characteristics of Bureaucracy/ functions of modern officialdom

1. principle of fixed and official jurisdictional areas, which are ordered by rules/bylaws/administrative regulations (73)
2. principle of hierarchical office authority mean a ordered system of super and sub ordination where the higher ones supervise lower
offices (73)
3. management of modern office is based upon written docs/files which are preserved in their original form (74)
4. office man presupposes expert training (74)
5. when office is fully developed, official activity demands working capacity of the official despite fact that his time in the bureau is
delimited (74)
6. manag of the office follows general rules, which are more or less stable, more or less exhaustive, and can be learned (74)

-position of the official (ok this part wasn’t on the review sheet so its very brief)
1. office holding is a “vocation” pg. 74-75
2. personal position of the official is patterned in the following way:
a.modern official has social esteem (75)
b.pure type of bureaucratic official is appointed by a superior authority (76)
c. position of official is held for life/ tenure for life (77)
d. official receives pecuniary compensation of a fixed salary (77)
e. official is set for a career within the hierarchial order of the public service

FAYOL’s “GENERAL PRINCIPLES OF MANAGEMENT” pg. 48-60

Fayol’s understanding of the unity of command and its limits
Division of labor—how it works, what limits

-14 Principles of Management

1. division of work
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2. authority and responsibility
3. discipline
4. unity of command
5. unity of direction
6. subordination of individual interest to the general interest
7. remuneration of personnel
8. centralization
9. scalar chain (line of authority)
10. order
11. equity
12. stability of tenure of personnel
13. initiative
14.esprit de corps
1. division of work (end of 48-49)
-object of division of work is to produce more and better work with the same effort
-results in specialization of functions and separation of powers
-has its limits which experience and sense of proportion teach us may not be exceeded
4. unity of command (51)
-one employee to have orders from one superior or else authority undermined, discipline in jeopardy, order disturbed, stability
threatened
-men cannot bear dual command: awkwardnessÆirritationÆhatred
9. scalar chain (pg. 56 had a diagram of what it looks like…basically the fayol gangplank)
-chain is lengthy and dictated by need for some transmission and the principle of unity of command
-why the scalar chain?
-fear of responsibility
-use the fayol gangplank if the superior managers agree that u can and that the inferiors report what they have agreed on to their
superiors (57)

GULICK “NOTES ON THE THEORY OF ORG” (79-86)

The major points of classical administrative theory, according to Gulick

-division of labor is the foundation of/reason for organization

1.Why divide work? (79)

-2 great gains
1. makes better use of diff skills of different workmen (79)
2. eliminates time that is lost when workmen do different tasks (79)
-intro of machinery accentuates division of work

-3 limits of division (80)

1. nothing is gained by subdividing if it results in setting up a task that requires less than the full time of one man (80)
2. technology and custom at a given time and place (80)
3. subdivision of work must not pass beyond physical division into organic (80)

-the whole and the parts (81)

-the more work is subdivided, greater danger of confusion and need of supervision/coordination

2. The co-ordination of work (81-82)

-coordination through organization (82)
-span of control
-6 ppl to supervise, depends on internalization, level of training, the task (all from notes), nature of work and the
executive (83)
-One master (83)
-unity of command applies to coordination and org b/c without it, confusion, in efficiency and irresponsibility arise
(83-84)
-caveamus expertum (84)

3. organizational patterns (I don’t think any of this is on the review sheet…)

-what is the work of the chief executive? POSDCORB (pg 86)
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Scientific Management

Key Figures:
1. Frederick Winslow Taylor
2. Henry Ford
3. (Chester Barnard)
4. Morris Cooke
5. Frank Gilbeth

-Core of 2nd Industrial Revolution (Mass Production Revolution)

• Assembly line
• White collar revolution
o Organized B workers more efficient by adding white collar middle class
• By flow chard & other management techniques, middle class produces more
• More people can go to school & get good jobs now
• Didn’t have to do assembly work anymore
• Increased the availability of cheap mass production goods
• Changed industry

- Scientific Managers (created this revolution)

• Fredric W. Taylor
o Found more efficient ways of organizing labor
ƒ Standardize work ethics
ƒ Wrote things down (different methods of doing things quickly)
• H.L Gantt
o Gantt charts- helped in planning production
• Barth
o Slide rule system
• Frank & Lillian Gilbeth
o Motion study (to reduce # of motions by timing)
o Teamed up w/ people for time studies
o “Cheaper by the dozen” family
o Thought having more children, could manage home like an assembly line
• Morris L. Cooke
o Took efficiency system & applied it to government & education
• New York Bureau of Municipal Rights
o Took corrupt system & changed it
o Wanted to have system file where kept track of corruption

- Henry Ford
• Pioneer of “assembly line”
• Broke car system down so regular people could buy a car
• Was more efficient, so became more productive (Tin Lizzie pg. 55)
• Increased wages
• Setup model of centralization

- Fred Winslow Taylor

• Came up w/ invention to resolve problems
• Designed series of machines (e.g. his nightmare machine)
• Had food in 2 worlds (1 in middle class, 1 in day labor)
• Hated goofing off
• Created piece rate system (payment by production #’s)
• Workers organized “slow downs” against him
• Proposed to stabilize the speed rate system by finding the optimal working rhythm (The American Plan pg. 22)
o Wrote it down
o Timed component parts
o Combined his time study w/ motion study
• Also created fatigue study
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- Key Information
• 4 Principles of Scientific Management (Shaff. & Ott. Pg 65-66)
o Deliberate gathering together of great mass of traditional knowledge
o Scientific selection of the workman & his progressive development
o Bringing together of science and trained workmen
o Complete re-division of the work of the establishment
• Increased productivity
o Price decreased
o People can afford more
o Convert non-buyers into buyers
o Also increased wages
• Established white collar management
• Created labor saving devices (Shaff. & Ott. Pg 62)
• Scientific Management can’t exist w/o mental revolution (Shaff. & Ott. Pg 64)
• Set-up dynamic assembly line management
• Labor was now cheaper w/ division of labor (Shaff. & Ott. Pg 66)
o Less skilled workers replacing specialization (Shaff. & Ott. Pg 70)
o People are easily replaceable
• Was the beginning of globalization
• Fordism refers to the system of mass production and consumption characteristic of highly developed economies during the 1940s-
1960s. Under Fordism, mass consumption combined with mass production to produce sustained economic growth and widespread
material advancement.
• Caused people to go insane (b/c they’re performing same task 24/7)
o Boredom also caused much damage in workplace
• Shifted the class systems

- Impact Scientific Revolution had & its Weak Spots

• Genuine revolution
• Begin by looking @ common denominator of what output is
o Can measure input, input/output ratio (efficiency)
• Need formal flow charting & management organization
• Had centralized records and standardization
o Believed that it was the key to preventing war
• Piece and bonus (weakest part)
o Had set # of pieces
o If produced over that number, got bonus
• Began rapidly w/in steel industry
• System had forward planning
o Was mimicry of assembly line
o Line of interlocking tasks done through forward planning
• Showed up into schools
o Full Time Equivalent (FTE)- how many students per teacher, etc.
• Taylor System had weaknesses
1. Efficiency vs. Effectiveness
ƒ Efficiency- get done w/ less input
ƒ Effectiveness- getting it done
o When work on efficiency may not always get effectiveness
2. Produced labor difficulties
o People went on strike
o Political turmoil stirred up by use of system
3. Faked data to prove a point
o They wanted to prove a point rather than get actual results
4. Didn’t recognize role of informal relation
o Groups can motivate or bring down
o Managers didn’t like informal relationships
5. Some weaknesses had to do w/ personalized changing markets, quality, quantity, etc.
o If you change way make things, you slow things down
o When had market that’s constantly changing, it becomes a problem
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6. Labor Motivation (huge problem)
o Hard to motivate people (Shafritz & Ott. Pg. 94, 97)
o Have to use right combination of incentives (material & non-material)
o Because become bored
o Boredom affects quality of work
ƒ People need a feeling of control

Hamburgers and Hernias

- Hospitals should structure their business like fast food restauraunts
o They should standardize everything
o They should offer a limited menu (specialize/offer a few things to improve quality of service)
o In doing so, will increase efficiency and decrease variation in the standards of hospital treatment

Structure and performance; the changing paradigm

Shafritz & Ott: Herbert Simon "The Proverbs of Administration" (pg. 112-124)
• Proverbs (pg. 112)
1) always occur in mutually contradictory pairs
2) scientific theory should tell what’s true, but also what’s false
3) with proverbs as basis of administrative theory, for almost every principle one can find an equally plausible and acceptable
contradictory principle (two principles of the pair will lead to exactly opposite organizational recommendations, but there is nothing
in the theory to indicate which is the proper one to apply)
• Specialization (pg. 113)
1) principle: administrative efficiency is increased by a specialization of the task among the group
2) which alternative is correct: specialization by place or specialization by function
3) simplicity of the principle is deceptive, conceals fundamental ambiguities
4) “specialization” is an inevitable characteristic of group effort: real problems is not just to specialize, but to specialize in that
particular manner and along those particular lines which will lead to administrative efficiency
• Unity of Command (pg. 113-114)
1) principle: administrative efficiency is increased by arranging the members of the group in a determinate hierarchy of authority in
order to preserve unity of command
2) principle of unity of command cannot be violated in any group
3) incompatible with the principle of specialization
4) perhaps more defensible if narrowed down to: in case two authoritative command conflict, there should be a single determinate
person whom the subordinate is expected to obey, and the sanctions of authority should be applied against the subordinate only to
enforce his obedience to that one person
• Span of Control (pg. 114-116)
1) principle: administrative efficiency is increased by limiting the span of control at any point in the hierarchy to a small number
2) contradictory principle/proverb of administration: administrative efficiency is enhanced by keeping at a minimum the number of
organizational levels through which a matter must pass before it is acted upon
3) dilemma: in a large organization with complex interrelations between members, a restricted span of control inevitably produced
excessive red tape, for each contact between organization members must be carried upward until a common superior is found
4) both increase and decrease in span of control has some undesirable consequences – what is the optimum point? the principle as
stated casts no light on this very crucial question
• Organization by Purpose, Process, Clientele, Place (pg. 116-119)
1) principle: administrative efficiency is increased by grouping the workers, for purposes of control, according to purpose, process,
clientele, or place
2) internally inconsistent principle: purpose, process, clientele, and place are competing bases of organization, and at any given point
of division the advantages of three must be sacrificed to secure the advantages of the fourth
3) dilemma of choosing between alternative, equally plausible, administrative principles
4) no essential difference between a “purpose” and a “process,” but only a distinction of degree (a process is an activity whose
immediate purpose is at a low level in the hierarchy of means and ends; a purpose is a collection of activities whose orienting value
or aim is at a high level in the means-end hierarchy)
5) “clientele” and “place” are part of “purpose”
6) even with problem solved of proper usage of the terms, the principles of administration give no guide as to which of these 4
competing bases of specialization is applicable in any particular situation
• An Approach to Administrative Theory
1) description of administrative situations – develop a set of concepts that will permit the description in terms relevant to the theory of
administrative situations
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2) diagnosis of administrative situations – among several alternatives involving the same expenditure one should always be selected
which leads to the greatest accomplishment of administrative objectives
3) assigning weights to the criteria – solving problems according to their relative importance in any concrete situation

Shafritz & Ott: Burns and Stalker, "Mechanistic and Organic Systems" (pg. 198-202)
• Two polar extremities of the forms that management systems can take when they are adapted to a specific rate of technical and commercial
change
• Mechanistic management system: appropriate to stable conditions
1) specialized differentiation of functional tasks – problems/tasks as a whole are broken down
2) abstract nature of each individual task
3) reconciliation of the distinct performances by the immediate superiors
4) precise definition of rights, obligations, and technical methods
5) translation of rights/obligations/methods into the responsibilities of a functional position
6) hierarchic structure of control, authority, and communication
7) reinforcement of hierarchic structure of location of knowledge exclusively at the top
8) tendency for interaction between members of the concern to be vertical
9) tendency for operations and working behavior to be governed by instructions and decisions of superiors
10) insistence on loyalty and obedience as a condition of membership
11) greater importance and prestige attached to internal than to general knowledge, experience, and skill
• Organic management system: appropriate to changing conditions
1) contributive nature of special knowledge and experience to the common task
2) “realistic” nature of the individual task
3) adjustment and continual redefinition of individual tasks through interactions with others
4) shedding of “responsibility” as a limited field of rights, obligations and methods
5) spread of commitment beyond any technical definition
6) network structure of control, authority, and communication
7) omniscience no longer imputed to the head; knowledge about the technical or commercial nature of the here and now task may be
located anywhere in the network
8) lateral rather than vertical direction of communication; communication between people of different rank resembling consultation
rather than command
9) content of communication which consists of information and advice rather than instructions and decisions
10) commitment to tasks and “technological ethos” of material progress an expansion more highly valued than loyalty and obedience
11) importance and prestige attach to affiliation and expertise valid in the industrial, technical, and commercial setting external to the
firm

Shafritz & Ott: Mary Parker Follett, "The Giving of Orders" (pg. 152-157)
• issuing orders is surrounded by many difficulties
• unless you change the habit-patterns of people, you have not really changed your people
1) build up certain attitudes
2) provide for the release of these attitudes
3) augment the released response as it is being carried out
• orders will not take the place of training
• the giving of orders and the receiving of orders ought to be a matter of integration through circular behavior
1) before the integration can be made, there is often an integration to be made within one or both of the individuals concerned
2) often are two dissociated paths in the individual – business administration has often to consider how to deal with the disassociated
paths in individuals or groups
3) an order should seek to unite , to integrate, dissociated paths
• probably more industrial trouble has been caused by the manner in which orders are given than in any other way
1) the addressed man feels that his self-respect is attacked, that one of his most inner sanctuaries is invaded
2) the more you are “bossed” the more your activity of though will take place within the bossing-pattern, and your part in that pattern
seems usually to be opposition to the bossing
• opposite extreme: immediate superior officer is often so close to the worker that he does not exercise the proper duties of his position
• how to avoid the two extremes?
1) depersonalize the giving of orders
2) unite all concerned in a study of the situation
3) discover the law of the situation and obey that
• depersonalizing orders
1) one of the largest contributions of scientific management
2) no overbearing authority on the one hand, nor on the other that dangerous laissez-aller which comes from the fear of exercising
authority
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3) really a matter of repersonalizing: we, persons, have relations with each other, but we should find them in and through the whole
situation – a divorcing of persons and the situation does a great deal of harm
• question of authority and consent: it is alright to work with anyone, what is disagreeable is to feel too distinctly that you are working under
anyone
• how can you expect people to merely to obey orders and at the same time to take that degree of responsibility which they should take? the
reconciliation between receiving orders and taking responsibility can be made through our conception of the law of the situation
• the evolving situation: the situation is changing while orders are being carried out. External orders can never keep up the situation, only
those drawn fresh from the situation

Shafritz & Ott: Philip Selznick, "The Foundations of a Theory of Organization" (pg. 125-134)
• Structural-Functional Analysis
1) security of the organization as a whole in relation to social forces in its environment
2) stability of the lines of authority and communication
3) stability of informal relations within the organization
4) continuity of policy and of the sources of its determination
5) homogeneity of outlook with respect to the meaning and role of the organization
• Co-optation as a mechanism of adjustment
1) Co-optation is the process of absorbing new elements into the leadership or policy-determining structure of an organization as a
means of averting threats to its stability or existence
2) used when there exists a hiatus between consent and control, so that the legitimacy of the formal authority is called into question
3) response of the pressure of specific centers of power
4) reflects a state of tension between a formal authority and social power
5) significance is not simply that there is a change in or broadening of leadership, and that this is an adaptive response, but also that
this change is consequential for the character and role of the organization

The Hawthorne Experiments (Fritz J. Roethlisberger: S&O, 158-166))

• Thesis to fix management: A human problem to be brought to a human solution requires human data and human tools.
• Western Electric, Hawthorne experiments in illumination, “test” v. “control groups”
1) test: increasing light magnitude of 24, 46, and 70 foot candles
control: no light change
Result: production levels increased in both cases
2) test: decreased levels of light from 10 to 3 foot candles
control: no light change
Result: production levels increased in both cases
3) workers made to believe that light was increasing (with appreciable comments), with no increase in output
4) workers made to believe that light was decreasing (with complaints), with no increase in output
5) decreased illumination to .06 foot candle equivalent to moonlight was their a decline in output rate (S & O, 158-159)
• Relay Assembly Test Room- segregated group of women in following conditions:
1) two five-minute rests, one in the morning and one in the afternoon, then at different times of day
2) specially prepared lunch during rest
3) Saturday morning off for a while
RESULT: Output increased for first year and a half
• Period XII- Relay Assembly Test room was re-formulated back to regular conditions, and output still was high. (S & O, 160)
• Roethlisberger- human beings know that they are being experimented upon and thus, attitudes toward the experiment and toward the
experimenters become very important factors.
• Roethlisberger attributed output increases to experimenters and their interaction with experiments. (S & O, 161).
• 1928, Interviewing was created to study employee importance, likes, and dislikes. The found:
1) Chronic kickers- people who dissatisfactions were more deeply rooted in factors relating to their personal histories, no matter
how the object of complaint changed
2) Fake complaints- complain, then when nothing has been done, change their complaint altogether.
3) People wanted an opportunity to complain and have someone listen.
• Conclusions from interviewing:
1) Workers behavior cannot be separated from their feelings and sentiments.
2) Sentiments are easily disguised. E.g. “I feel bad” versus “the world is bad,” where complainant attributes cause for sentiment.
3) Sentiments needed to be explored from total experience of the person, which can be divided into the worker’s “social
conditioning” and their human satisfaction from work. (Figure 1, Pg. 164)
• Figure 1- Represents the gradual change and reasoning behind increased or decreased output
I. Change, therefore response (simple causality, e.g. lights increase, productivity increases)
II. Change, therefore has “meaning” (attitude/sentiment change) to worker, meaning causes response
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III. Change has “meaning,” but is dependent on the personal history and social situation one has from work, therefore leading to a
response.
• Bank Wiring Observation Room- group piecework where the more they turned out the more they earned.
1) You should not turn out too much work; if you do, you are a “rate buster”
2) Do not turn out too little work; if you do, you are a “chiseler”
3) Not say anything to a supervisor, or you are a “squealer”
4) You should not be too officious, that is, if you are an inspector you should not act like one. (S&O, 165)
• Each worker’s level of output was reflected by his position in the social network. Examples: lower producer had the highest
intelligence and third in dexterity, while the highest producer ranked the lowest in intelligence and lowest in dexterity.
• CONCLUSIONS:
1) Western Electric offers a fruitful working hypothesis, a few simple and relatively clear ideas for the study and
understanding of human situations in business
2) the offer a simple method by means of which we can explore and deal with complex human problems
3) new light on precondition for effective collaboration
4) Greatest- worker is a social animal and should be treated as such and deserves social recognition (S&O, pg. 166)
• George Elton Mayo’s Conclusions when he carried out the Hawthorne Works of the Western Electric company in Chicago between
1924 and 1927:
1) Work is a group activity.
2) The social world of the adult is primarily patterned about work activity.
3) The need for recognition, security and sense of belonging is more important in determining workers' morale and productivity than
the physical conditions under which he works.
4) A complaint is not necessarily an objective recital of facts; it is commonly a symptom manifesting disturbance of an individual's
status position.
5) The worker is a person whose attitudes and effectiveness are conditioned by social demands from both inside and outside the
work plant.
6) Informal groups within the work plant exercise strong social controls over the work habits and attitudes of the individual worker.
7) The change from an established society in the home to an adaptive society in the work plant resulting from the use of new
techniques tends continually to disrupt the social organization of a work plant and industry generally.
8) Group collaboration does not occur by accident; it must be planned and developed. If group collaboration is achieved the human
relations within a work plant may reach a cohesion which resists the disrupting effects of adaptive society.

A Theory of Human Motivations (Abraham Maslow: S&O, 167-177)

• Physiological Needs
1) Homeostasis
2) appetites (i.e. choices among foods)
• Safety Needs, after physiological needs, the organism becomes a safety-seeking mechanism
1) Infants react in a fashion of threat when startled, etc.
2) Orderly, and predictable patterns are preferred
• Love Needs- love of significant other, friends, and children. Does not include sex, because sex is physiological need.
• Esteem Needs- High evaluations of self-esteem and self-respect
• Self-Actualization- desire for self-fulfillment
• Notes:
1) Degree of fixity of the hierarchy of Basic Needs can be changed due to factors of chronic low aspiration and undervaluation.
2) Degrees of Relative Satisfaction- needs do not need to be satisfied 100 percent
3) Man is a constantly wanting animal, when a need is satisfied adequately, then the prepotency of a need shifts
4) Emergency reactions occur when lower needs are threatened relative to current needs.

The Human Side of Enterprise (Douglas Murray McGregor: S&O, 167-177)

• Theory X (Management by Control)
1) Management is responsible for organizing the business.
2) Management directs, controls, and modifies the behavior of people in the organization.
3) People would be passive, even resistant, without active intervention by management.
4) Implicit- average man is indolent, working as little as possible.
5) Average man lacks ambition, dislikes responsibility, and prefers to be led.
6) Average man is inherently self-centered, indifferent to organizational needs.
7) By nature, is resistant to change.
8) Gullible, not very bright, the ready dupe of the charlatan and the demagogue.
• Management methods
1) Hard or Strong- coercion, close supervision, and tight controls on behavior.
2) Soft or Weak- permissive and achieving harmony
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3) Firm but Fair- gain the advantages of both hard and soft. E.g. TR- “speak softly and carry a big stick.”
• Theory X Criticism-
1) Physiological Needs- not a motivator
2) Safety Needs- once these are used as a motivator for one area, it affects management as well, because all are interdependent.
3) Social Needs- Management is afraid of social groups in workplace, but social groups work more efficiently
4) Ego Needs- Modern industrial organization gives no incentive for promotion and working opportunity
5) Self-fulfillment needs- Nowhere seen in modern industry
• Carrot and Stick Approach- Once management has satisfied (1) and (2), they need to focus on (3), (4), and (5), causing a shift
toward more money. The philosophy of management by direction and control, regardless of whether it is hard or soft is inadequate to
motivate past certain needs, causing indolence, passivity, etc.
• Theory Y (Management by Objectives):
1) Management is responsible for organizing the business.
2) People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in
organizations.
3) The motivation, the potential for development, the capacity for assuming responsibility, the readiness to direct behavior
toward organization goals are all present in people.
4) The essential task of management is to arrange organizational conditions and methods of operation so that people can achieve their
own goals best by directing their own efforts toward organizational objectives.
• Drucker- “Industrial Citizenship”- the satisfaction of social, egoistic, and self-fulfillment needs through one’s workplace
• Theory Y Methods:
1) Decentralization and Delegation- Forces Sears “management by objectives,” enlargement of the number of people reporting to a
manager until he cannot direct/control them any longer.
2) Job Enlargement- IBM and Detroit Edison- Encourages the acceptance of responsibility at the bottom of the organization.
3) Participation and Consultative Management- Direct their creative energies toward organization objectives, give them some
voice in decisions that affect them.
4) Performance Appraisal- General Mills, Ansul Chemical, and GE- individuals set “targets” or objectives for himself and in a
self-evaluation of performance semiannually or annually.

Human Relations School Impact

• HR Focused on:
1) To encourage employees to be more participative.
2) To implement job enlargement and job enrichment in order to give wider discretion to employees.
3) To improve communications between employees and their managers.
• The mistake that was made by HR managers was the replacement of the traditional theory with that of the human relations school as if
one was a perfect substitute for the other, when in fact they were part of the same continuum.
• The HR movement oversimplified the complexity of human behavior.
• The assumptions about individual motives were simple and sterile, with money remaining as an important work-related incentive for
employees and conflict treated as an evil to be removed in all circumstances. Which became completely against the primary
motivators of money and essential.
• Relative examples disproved the HR Theory:
1) Goldthorpe (1969), for example, was to find that some employees, although they disliked the work which involved repetitive
tasks in their Coventry car assembly plant, would put up with them for the money rather than move to more interesting jobs and
lower wages in plants nearby.
2) Experiments at Philips at Eindhoven showed that although output initially rose after enlarging the jobs in radio assembly, workers
were unhappy with their new jobs and responsibilities and many left. White (1973) also found that the motivation of managers to
work depended very much on two factors - the type of job that was being performed and the age of the jobholder.

Dilbert’s Management Handbook

Whole book is a critique on the application of Theory Y under the umbrella of Theory X.
1) Dogbert- “You can become jargon-spewing corporate zombies”
2) Critiques Maslow’s hierarchy by giving “plenty of stuff on the lower level, but not so much that they develop a need for more
money (higher levels).”
3) Falsely implementing company initiatives, but under Theory X.
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DRUCKER

Management: Peter F. Drucker

Compendium of Chapters 1-3, 15-23

Note to the reader:

I find the works of Drucker to be tremendous works not just of organizational theory but general wisdom and therefore exceed the needs of
students or active managers looking to implement his methods. His writing is replete with succinct tidbits of wisdom that ultimately convey
more than his overall conclusions in their simplicity. As there are no real graphs or pictures and most of the text is the set-up, explanation,
detail or disclaimer that goes with these tidbits through supporting cases and stories, I have attempted to include the most direct and all-
encompassing quotes for ease of comprehension. For quickest consumption, refer to the final bullet point of each chapter and focus on the
quoted tidbits to add punch to your arguments.

Chapter 1 The Emergence of Management pg. 3

-during last 50 years, society in developed countries became society of institutions

-1900 family was agent of most social tasks; institutions few and small
-business, university, hospital, labor unions, research institutes grown in 70 years
- society has become an employee society

Why Business Management has to be the focus?

As the success story of the century, and the primary means of producing virtually every good and service, business management is rightly the
natural focus for many.

Chapter 2 The Business Management Boom & its Lessons pg. 11

The Management Boom (25 years from end of WWII to end of 1960s)

In post WWII, Sir Stafford Cripps conceived of man as force that could restore British econ and provide impetus for growth and performance.
The MARSHALL Plan supported this effort; Japanese followed the West and took management as a central force in rebuilding. But the boom
seemed to have burst in 1970. While it is no longer the hot new trend (as far as this book is concerned given my copy states 1973) there are a
number of lessons to be learned on how you properly apply management to organizations.

Management as a Discipline /managers and skills

Skills: -communications within organizations
-making decisions under conditions of uncertainty
-strategic planning

What have we learned?

The practice of management is not science, it is based on knowledge and responsibility rather than application of common sense, leadership, or
financial manipulation.

Ultimately, management is a generic function, a discipline, that every organization in any situation faces. As it directs vision and resources
towards a greater goal it consistently deals with problems of leading workers towards productivity and achievement.

Chapter 3 The New Challenges pg. 27

Challenges for management going forward

1) Need for knowledge
Understanding of productivity imperative
2) decentralization as basic principle of organization
Best principle for operations, this is the emerging new model
3) personnel management
Lead people rather than contain them
4) Entrepreneurial manager
Will have to learn and build innovative organizations
5) Multi-Institutional Management
Complexity of organizations increasing
6) Knowledge & Knowledge worker
Making knowledge productive will change job structure
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7) Multi-national, Multi-cultural management
International considerations increase
8) Quality of Life
Organizations are now held accountable for fulfillment of social values

15) The New Realities (New Challenges):

(This is a 13 page chapter that brings some new general issues to the table; nothing very substantial here.)

Work has become a very complicated concept in this era especially when compared to play, idleness and in consideration of different
types. (p.168)

• Crisis of Manual Worker: (p.170)

The working class is currently pressured as trends towards more education and managerial positions increase. The end result is
decreased social position and status, which is unlike the proud predecessor who understood their place as the core of America’s
manufacturing and such.

• Crisis of the Labor Union: (p.172)

Unions are weaker due to the separation between union leaders and union workers as one of “them” instead of one of “us.” Also the
changing nature of worker complicates things.

• Managing Knowledge workers (p.176)

A new undertaking, managing knowledge workers must take a different tack from that of manual laborers. Self-motivation and
direction are keys. Quantifying production and achievement are much more difficult.

• Segmented work force (p.177)

The labor force can be segregated by sex, clerical, manual, knowledge, and age.

• The New Breed: (p.179)

All traditional elements are now challenged. The structure and character of work has changed such that it must provide a life not
simply means of earning a living. New workers have high expectations, and look for work to be not necessarily enjoyable but
achieving.

16) About Work, Working and Worker:

• 5 Dimensions of working (p.183)

1. Machine design and Human design
Humans unlike machines work better under variable conditions, speeds and rhythms.
2. Work as a curse and a blessing
Humans are unable to remain idle but also unable to work endlessly. Work is a burden and a need.
3. Work as a social and community bond (p.187)
Status is derived from profession. Personal relationships are stronger ties to work than business issues.
4. The Economic Dimension (p.188)
Work is a “living” that provides a wage fund and a capital fund. These funds conflict as one satisfies current needs
of employees while the other provides capital for the economy on a whole through saving.
I. Work as living, Work as wage
There are conflicts between wage as living and wage as a cost for businesses. Living needs to be predictable and
consistent to support employees, while businesses need to respond to operating changes.
5. The Power Dimension (p.192)
There is always an implicit power relationship when working in a group where workers must submit themselves.

• The 6th Dimension-Power dimension of Economics (p.192)

Redistribution of or resources is a political decision rather than an economic one. All firms have to deal with how to distribute firm
returns amongst employees.
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• Fallacy of the dominant dimension: (p.194)

While Marx saw the economic dimension as the superior and Mayo saw the interpersonal relations as superior we must understand in
accordance with Maslow’s “marginal utility” that wants are not absolute and change as they are satisfied. This leaves the manager
with the task of covering all these elements simultaneously to maintain productivity.

17) Making work productive: (p.198)

Requires four steps analysis, synthesis, control and tools.

• The analysis of work (p.200)

“Work analysis does not begin with identifying operations. It begins with defining the desired end product.”

Work Study, Scientific management, and industrial engineering encompass the traditional analysis of work. All of these measures fail
to incorporate the consideration of the end product, the logic of work as well as working and the overall process of production as a
whole job.

• Principles of production (p.203)

Production is the application of logic to work and includes 4 basic systems models. The right process needs to be selected for firm
success.

• Process 1, Unique-Product Production (p.205) Standardized tools are always used for unique-products and usually standardized
materials. Work is organized by homogenous stages where work can stop after each stage. Workers must be able to do all the work
necessary for a particular stage, so it is based on stage skills not craft skills.

• Process 2 & 3, Rigid and Flexible Mass production (p.207)

Parts are standardized as well here, so products are not made they are assembled. Flexible includes multiple outputs.

• Process 4, Process Production (p.212)

Classic example: Oil refinery. On integrated system with no stages. This should be the goal for all previous processes. There are
huge economies when properly placed yet when misapplied due to its rigidity the costs are high.

• Demands of each principle (p.213)

P1 is labor-intensive, has great flexibility places high demand on skill and low on judgment. Management’s first job is to get an order.

P2 is also labor-intensive and requires high volume. Minor fluctuations affect the economies of the system. High degree of judgment
in design but none in operations. Management’s first job is to ensure proper distribution here and in P3.

P3 tends to be capital-intensive with substantial labor and high total volume.

P4 requires high capital investment and is not labor intensive. The maintenance of markets is the primary concern here.

18) Controls and tools (p.217)

The process of production needs built-in controls for its direction, quality, quantity, standards, and its efficiency. Control needs to be
exercised where the malfunction is likely to occur in the most minimal fashion.

• Routines and exceptions (p.220)

A control system need to be able to distinguish exception from the normal, but so much as to make order out of chaos. The
“differential diagnosis” is an ideal to model as doctors used this to go through a preset order of ascertainable systems to eliminate one-
by-one all the possible problems.

• Patterns of Routines (p.222)

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3 types of routines: Input and Output are highly standardized, The diversity of events creates subpatterns, Or where unique events
prevail.
• Work and Tools:

Fit the right tools to the job. Provide the simplest, smallest, lightest, easiest tool for the job. The work does not exist for the sake of
the tool; the tool exists for the sake of the work. (p.224)

• Mechanization and Automation (p.225)

“…tools are the bridge between work and working.”

2 things to watch out for when mechanizing; One, don’t make man part of the machine, Two, don’t use tools as divisive elements that
ruin community bonds.

• Beyond Manual Work (p.228)

While most work up until recently has been manual the same processes can be transferred to service industries. Work analysis,
principles of production, controls, and tools have been proven successful everywhere except in the generation of new knowledge.
Understanding these 4 points are essential to making work productive.

19) Theories and Reality (p.231)

McGregor’s “Human side of the Enterprise” introduces 2 theories. Theory X where humans are understood to be lazy and shun work
and need both carrot and stick motivation. Theory Y believes people have a psychological need for responsibility and achievement.

• Maslow’s criticism (p.233)

Maslow supports Theory Y yet thinks it is inhuman to place theory Y expectations on most people as they are too weak to shoulder the
burden. He concluded that the restraints and certainty of a theory X system needed to be replaced by those of a theory Y system not
simply removed. Y systems have to do otherwise they leave humans with demands they cannot meet.
McClelland continues from here to show the desire to achieve is largely conditioned by culture and experiences so people can be
“turned on” or off based on situations, which is not accounted for in either X or Y theories.

• Manager’s Reality (p.235)

Currently Theory X views on management no longer work.

• Big fear & little fear: (p.237)

“Big Fear” motivates where it is truly credible but there are few instances of this. “Little Fear” is a foolish tool for motivation that
simply results in resentment and resistance. As components of a theory X framework both are incorrect.

• Overly Potent Carrot: (p.237)

Unlike “Fear,” incentives have not lost their potency but have become harder to control. The demand for more increases limitlessly
(directly due to Maslow’s rule) and as it progresses equally reduces the value of incentives overall. The new breed of manual workers
who have not achieved through their lives respond to motivational tools with sabotage not increased performance. Discipline nor
incentive can be used by a manager as he is not a master but a fellow employee who is just superior.

• Replacing Carrot and Stick? (p.241)

More than Theory Y is necessary however; managers are unable to manage the psychological needs of all their workers. Carrot and
stick methods have lost their potency along with other theory X methods. Managers must assume that people will work to achieve
only if given the opportunity to do so.

20) Success Stories-Japan, Zeiss, IBM: (p.246)

• Zen versus Confucius (p.247)

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Japanese Zen: The purpose of learning is self-improvement. The Confucian concept: The purpose of learning is to qualify oneself for
a new, bigger job.

• Lifetime Employment (p.249)

As people are generally unemployable past 30, this creates tremendous conformity and huge incentive to ensure the company does not
go under. There is little wage carrot offered.

• But flexible labor costs (p.251)

Flexibility in labor costs is achieved by treating women as perennial temporary workers. Retirement at 55 helps. The overall system
provides the Japanese worker psychological conviction of job and income security.

• The Benefit System (p.253)

The Japanese system customizes the benefit system to their group of workers’ needs.

• The Godfather System (p.254)

Mentors, senior veteran managers, are informally assigned to young up and coming employees and this helps senior management on a
whole to watch their development. The young employee receives support as well as discipline at times.

• Upward Responsibility (p.257)

At every level of the organization, subordinates are expected to participate in the responsibility for the decision.

• Ernst Abbe & the Zeiss Optical Works (p.258)

Abbe did well to manage working and the worker though a form of scientific management and production improvements. He insisted
that the employees be a part of the process creation and had them organize themselves. He also implemented continuous training.
Lastly, he created a foundation to own the firm which protects it from outside risks with little capital.

• IBM (p.260)

Supervisors are the assistants to their subordinates not their superiors. They maximize jobs by training people to do every possible
part of their stage and keep job instructors on hand to continuously help workers learn new methods. Also workers participated in the
engineering of the fist products released and returned better production numbers in every category. Now they continue the same
method for all products. Subsequently, there is heavy emphasis placed on training and placement to support the entire process.

• Lessons (p.263)

There are flaws in the primary methods that have created current problems for each firm despite their overall success.

Japanese approaches are rapidly becoming inappropriate to their social reality. Education is undermining their manual work force
and inflationary pressures threaten the all important wage structure.

Abbe’s Zeiss has restrictions on outside financing that eliminate ability to acquire the necessary capital for serious growth.

IBM cannot maintain employment security like it once could, and has issued layoff but not to its manual workers for which the policy
was intended.

The similar factor across all these examples is none of them allowed “permissive management” they focused on organizing
responsibility.

21) Responsible Worker (p.266)

Focus must be on the job, achievement must be possible, to enable the worker to achieve he must be responsible. Therefore he must
do productive work, receive feedback and undergo continuous learning.

• Fallacy of Creativity (p.267)

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People do not come up with better ideas when freed from restraint.

• Feedback Info for Self-Control (p.268)

Allows the worker the necessary information to measure and direct himself. He then does not need praise, he knows how well he is
doing.

• Continuous Learning (p.269)

Keeps workers open to innovation and reduces risk of obsolescence.

• Planning and Doing (p.270)

2 different things, not to be mixed.

• Need for Clear Authority (p.272)

Worker need to know exactly their limitations and who is in charge.

• Job and Work Groups (p.272)

The responsibility for this should go to the work group so that design goes to those responsible for output.

• Assembly Line and Job Enrichment (p.274)

Assembly lines are also subject to variation and also improve when treated like a work-group issue especially when groups are
informed and undergo continuous training. In job enrichment the worker chooses the number of output, the speed, the sequence, and
the rhythm when given the units of output by a superior. This also shows higher output in result.

• Worker responsibility and New Breeds (p.277)

Worker responsibility is especially important for the new young manual worker, the pre-industrial and the knowledge worker. The
new young manual worker has been described before as having resistance to being driven, insecurity about social position, limited
schooling and high propensity for sabotage.

• Pre-industrials (p.278)

Typically foreigners or those not at home in society who need a paternalistic environment.

• Knowledge worker (p.279)

The educated worker, who can not be motivated nor supervised, is only productive when responsible for his own job.

• Saving the Supervisor (p.279)

Worker responsibility may be the only way to restore health and function to the supervisor.

• Plant and Office as Communities (p.281)

Environment is key; workers need to take a part in formation.

• Need for Leadership Opportunities (p.282)

Simple leadership opportunities help press energies in the right direction.

• Work-Community Activities (p.283)

(a list of possible activities)

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• Self-Governing Work Communities (p.284)

While not a democracy, the self governing work community places responsibility where the consequences of the decisions have to be
dealt with. A solid community includes all of the previously listed aspects.

22) Employment, Incomes and Benefits (p.285)

Living in fear of loss of job or income is incompatible with the worker responsibilities initiatives.

• Job Security and Income Stability (p.286)

Both these concepts need to be implemented further into western systems, with more options for vested pensions and retirement
benefits.

• Shortcomings (p.289)

Lack of financial flexibility arises when supporting income stability. Job mobility is a hurdle and increases fear of displacement for
workers despite the efforts of headhunters.

• Rehn Plan (p.290)

This shows that the fear of displacement is greater than the actual effect or statistical existence of displacement. The Rehn Plan would
underwrite the income of a redundant employee in case of technological advance and retrain them, even relocate them to keep them
employed. The result was an increase from non-player to #2 work force in the world behind U.S. in 1971.

• Needed-Organized Placement (p.291)

The Rehn model shows the positive effects this can have on a work force.

• Profits Productivity and Benefits (p.292)

Benefits are the area where a meaningful link between company profitability and worker needs can be created as they build the
worker’s capital fund not his wage fund. Profits have too little effect on wage fund to be of value.

• Making Benefits Benefit (p.295)

Benefits need to be restructured; people consider 25% of their pay fringe when it shouldn’t be.

• What Benefits should be (p.297)

1) Benefits need to be structured to give the worker the most for the money
2) Benefit floor needs to be fixed yet fluctuate with performance
3) Administer benefit programs in groups not individually
4) Administration should be responsibility of the work-community

Benefits already consist of 25% to 33% of total compensation packages, management should expect this to increase. Improving this
should improve productivity.

23) People are our Greatest Asset (p.300)

“Power and Authority are two different things. Management has no power. Management only has responsibility…it needs to have the
authority to discharge its responsibilities-but not one whit more.”

• Lesson of Decentralization (p.301)

It makes top management stronger not weaker. The responsible worker, the responsible work-group and self-governing community
are decentralized components and they all help spread work management. In absence of sufficient carrot or stick methods the added
responsibility on the worker helps fill the authority void and cuts against cynicism which can destroy a firm internally.

• Demands on Management (p.302)

“Nothing quenches motivation as quickly as a slovenly boss.”
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Employees expect that a manager take responsibility for his own work/performance ad be able to explain his behavior and actions. A
leader always inspires confidence, always commands respect. Responsible work forces are effective as they bring problems to the
fore-front but in a cooperative sense when everyone is not only on the same team but takes their job seriously.

• Leadership of People: (p.304)

Managers must accept the responsibility for making human strengths effective. 3 traditional approaches: Welfare, Personnel
Management, Cost and Threat. Welfare – people are problems that need help. P.M. – sees activities and chores to be performed
whenever large numbers of people have to work together. Cost and Threat – labor is such and must be controlled and limited. The
welfare approach, as shown in the Krupp example is not a method for management but for aiding workers.

Krupp example: Built excellent firm by selecting excellent workforce. Instituted paternalism; providing housing, schooling and more
for employees. Created tremendous firm loyalty which brought firm back from extinction twice, once after each World War.
Ultimately led to firm’s demise as they intended to offer lifetime employment and expanded even the losing operations of the firm.

• Personnel Management: (p.306)

“The purpose of an organization is to make the strengths of people productive and their weaknesses irrelevant.”

Defined: The methodical and systematic discharge of all the activities that have to be done where people are employed, including the
subsequent selection, employment, training, compensation, and any other necessary service involved.

Drucker relates P.M. to the effect of dirty dishes on a successful marriage; if allowed to pile up they may lead to a break-up, however
clean dishes have little effect on the happiness of the relationship.

Periods of serious issue in personnel management come from failures at managing people (the cost/threat method speaks to an
example of a serious issue like fighting against unions; this is also not managing people but rather costs).

• People are our greatest asset: (p.308)

“Little of the human potential of any organization is tapped and put to work.”

Largely, firms approach labor as problem, procedure or cost instead of resource. Implementing “practices” is the best means to
achieving a personnel/resource focused group.

1st practice – Build responsibility and achievement, complete with specific objectives, into each job.

2nd practice – Have managers treat people as resources to himself with upward contribution directly supporting the manager’s
performance.

• Placement: (p.309)
The most important element in managing people is placing them where their strengths can be productive. Non-performers are often
not duds; they are simply in the wrong place. Traditional methods of interviewing and testing are debatable as justified selection
methods. Treating people as resources to managers is simply a “practice” but it does point organizations toward performance rather
than conformance.

Psychological Despotism (Drucker)

• Drucker- managers seem to be motivated by biogenic needs for the scholars assume that managers are interested only in “enlightened
psychological despotism.” In other words, they want to be authoritarian for that brings them security.
• Industrial psychology writers of today “use terms like ‘self-fulfillment,’ ‘creativity,’ and the ‘whole man.’ But what they talk and
write about is control through psychological manipulation.”
• Management is no longer a matter of controlling people on the basis of their economic needs, but their psychological needs. By
becoming an indispensable servant of the employees in their search for “self- fulfillment,” the manager actually become their master. .
. According to Drucker, the psychology-based approach to management ought to be rejected because it violates a basic ethical
imperative: respect for other persons (Hardy, 1990, pp. 162, 163).