ESM 520

Engineering Management

Lecture 1
Dr. Hazim El-Baz

Chapter 1

The Nature of Organizations and

Management

Learning Objectives
1. Discuss what organizations are and why they exist.
2. Define management and understand what managers do.
3. Distinguish between the sociological and process
perspectives on management.
4. Identify differences in the way managers execute the
management process.
5. Specify the skills that managers need to perform
effectively.
6. Distinguish between management as a process and
management as a set of roles.

13

The Setting For Organizational Behavior

Management practices and organization
design are major contributors to employee
attitudes, motivation, and behaviors.
Management

Employee Attitudes,
Motivation & Behavior

Organization

FIGURE I1
14

Strategic Choices
Organizational Goals

Management
Practices

(reason for being)

Management
Philosophy

External
Environment

Employee Attitudes,
Motivation & Behavior

Strategic Choices

Organization
Design

FIGURE I2
15

The Nature and Types of Organizations

The Nature and Process of Management

Organization Defined
Machine Approach
A technical or mechanical system that transforms inputs into the

goods and services required to serve a societal need.

Social System Approach

Two or more people with common conscious, common purpose,

linked by communication and command system, possessing both

the ability and willingness to contribute to attainment of
organizations goals
A system characterized by relatively enduring interaction patterns

that link people and people as they pursue organizational goals.

17

The Nature of Organizations (contd)

Socio-Technical System
An organization that is both a social and technical

system.
Both systems have different needs that must be
managed simultaneously.

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Managers and Organizations definition

Why is it important?
The definition that managers use for their organization

influences how they manage the organization.

An organization seen as a machine lead to different
approaches to design efficient input, throughput, and
output system.
On the other hand, if she is seen as a social system
then careful attention will be paid to satisfying
individuals needs and developing cohesion and
teamwork.

29

The Nature of Management

What is Management?
Getting things accomplished through other people.
A philosophy, a set of attitudes and beliefs about

people, work, action, and organization.

Two dominant definitions for management :
sociological and process.
The Sociological Perspective

The belief that management consists of a group of

organizational members (managers) who occupy the
social positions responsible for making sure that the
organization achieves its mission.

110

The Nature of Management (contd)

The Process Perspective

Management is an activity concerned with the

orchestration of people, work, and systems in pursuit
of organizational goals. (Follett)
Management is the process of planning, organizing,
directing, and controlling organizational resources in
the pursuit of organization goals. (Fayol)

111

The Nature of Management (contd)

Four Universal Management Functions
Planningdefining goals and the methods by which these goals

are to be attained.
Organizingdesigning, structuring, and coordinating components

of an organization to meet its goals.

Directingorchestrating interpersonal activities, leading, and

motivating employees to work effectively and efficiently in pursuit

of organizational goals.
Controllingmonitoring organizational member behavior and

organization effectiveness to determine whether organization goals

are being achieved, and taking corrective action if necessary.
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The Management Process

Resources

Management Functions

Human
Financial

Goal
Planning

Organizing

Directing

Controlling

Achievements

Physical
Informational

Source: Adapted from G. Terry, 1972. Principles

of Management. Homewood, IL: Irwin, 4.

FIGURE 11
113

Types of Managers (contd)

Line and Staff Distinctions
Line managershave direct responsibility for

producing the organizations products and/or services.

Staff managershave responsibility to support line

managers with expert advice and guidance.

114

Hierarchical-Level Differences Among

Managers
Upper-Level

Planning

Organizing

Directing

Controlling

Managers

Middle-Level

Planning

Organizing

Directing

Controlling

Managers

Lower-Level
Planning

Organizing

Directing

Controlling

Managers

Proportion of Time

FIGURE 19
115

Functional-Area Managerial Differences

Human
Resource
Managers
Financial
Managers
Marketing
Managers
Production
Managers

Planning

Planning

Planning

Planning

Organizing

Organizing

Directing

Directing

Organizing

Organizing

Directing

Directing

Controlling

Controlling

Controlling

Controlling

Proportion of Time

Source: Based on data from J. Home and T. Lupton. 1965.

The Work Activities of Middle Managers: An Exploratory
Study. Journal of Management Studies 2:1433.

FIGURE 11
116

Managerial Roles
Interpersonal Roles
Organizational roles that involve serving as a

figurehead, leader, and liaison for an organization.

Informational Roles
Organizational roles that involve monitoring,

disseminating, and serving as a organizational

spokesperson.

Decisional Roles
Organizational roles that involve serving as an

entrepreneur, disturbance handler, resource allocator,

and negotiator
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Chapter 2

Philosophies and Approaches to

Management Practices

Learning Objectives
1. Identify early pioneers in management and
organizational behavior and their contributions to the
classical theory of management.
2. Discuss the major elements of of Taylors approach to
scientific management.
3. Explain the significance of the Hawthorne studies.
4. Identify the major contributors to the behavioral theory
of management, their view of organizations, and their
contributions to the management literature.
5. Discuss the meaning of the human resources model and
its relationship to the high involvement approach to
organizational management.
6. Identify and discuss several contemporary perspectives
on the nature of organization and management practice.
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The Classic School of Management

The Classical School of Management

Thought and Practice
The Scientific Management Movement
Management which conducts a business or affairs by

standards established by facts or truths gained through

systematic observation, experiment, or reasoning.
Focused on increasing labor efficiency and productivity
primarily by managing the work of employees in the
organizations technical core (i.e., shop floor).
Characterized by close forms of supervision and
control-oriented management practices.

221

Scientific Management Pioneers

Charles Babbage (17921871)
Advocated division of labor and job specialization.
Promoted time studies to establish performance

standards and rewards for exceeding standards.

Frederick Taylor (18561915)

Considered the father of scientific management.
Believed in the science of workthe underlying laws,

or principles, that govern various work activities.

Believed in the economically-motivated mutuality of
interest of employees and managers.

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Fredrick Taylors Scientific Management

Prescriptions
Develop the science of work (one best way).
Emphasize an absolute adherence to work
standards.
Scientifically select, place, and train workers
Apply a financial incentive system.
Develop and maintain friendly labormanagement relations.

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Scientific Management Pioneers (contd)

The Gilbreths
Frank Gilbreth (18681924) focused on improving work

methods such as bricklaying to improve effectiveness

and efficiency.
Lillian Gilbreth (18781972) pioneered modern human
resource management.
Developed

a classification scheme
to describe the motions (therbligs)
used in the performance of
a job.

224

Scientific Management Pioneers (contd)

Henry Gantt (18611919)
Developed the Gantt chart to summarize work activities

and identify those tasks that should be performed

simultaneously or sequentially.
Advocated a minimum-wage-based incentive system
and bonuses for work above and beyond the expected
standard by employees.
Proposed a bonus system for supervisors to encourage
them to manage subordinates effectively.

225

Gantt Chart for Classic Home Contractors

Draw Plans
Rough Framing
Rough Electrical
Cabinet Ordering
Final Electrical Work
Install Wallboard
Install Cabinets
Install Carpet
Final Inspection
Week 1
Source: Adapted from J. G. Monks, 1982.
Operations management: Theory and problems.
New York: McGraw-Hill, 549.

Week 2

Week 3

Week 4

FIGURE 22
226

Administrative Management and the

Bureaucratic Organization
Organizations were viewed as giant machines created

to achieve goals.
A basic set of universal laws, or principles should
govern organization design and allow managers to run
those machines effectively.

227

Administrative Management (contd)

Henri Fayol (18411925)
Believed that all managers perform five managerial

functions:
Planning
Organizing
Commanding
Coordinating
Controlling

228

Fayols Fourteen Principles

1.
2.
3.
4.
5.
6.

Division of labor
Authority
Discipline
Unity of command
Unity of direction
Subordination of
individual interest
for common good

7.
8.
9.
10.
11.
12.
13.
14.

Remuneration
Centralization
Scalar chain
Order
Equity
Stability of tenure
Initiative
Esprit de corps

229

Fayols Principles of Management

30

Division of Labor: allows for job specialization.

Fayol noted jobs can have too much specialization leading to

poor quality and worker dissatisfaction.

Authority and Responsibility

Fayol included both formal and informal authority resulting from

special expertise.

Unity of Command
Employees should have only one boss.

232

Fayols Principles of Management (contd)

31

Line of Authority
A clear chain of command from top to bottom of the firm.

Centralization
The degree to which authority rests at the top of the

organization.

Unity of Direction
A single plan of action to guide the organization.

233

Fayols Principles of Management (contd)

Equity

32

The provision of justice and the fair and impartial treatment

of all employees.

Order
The arrangement of employees where they will be of the

most value to the organization and to provide career

opportunities.

Initiative
The fostering of creativity and innovation by encouraging

employees to act on their own.

234

Fayols Principles of Management (contd)

33

Discipline
Obedient, applied, respectful employees are necessary for the organization to

function.

Remuneration of Personnel
An equitable uniform payment system that motivates contributes to

organizational success.

Stability of Tenure of Personnel

Long-term employment is important for the development of skills that improve

the organizations performance.

235

Fayols Principles of Management (contd)

34

Subordination of Individual Interest to the Common

Interest
The interest of the organization takes precedence over that of
the individual employee.

Esprit de corps
Comradeship, shared enthusiasm foster devotion to the

common cause (organization).

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The Bureaucratic Organization

Max Weber (18641920)
Envisioned an organization managed on an impersonal

and rational basis.

Goals of the bureaucratic model:
Speed
Precision
Order
Unambiguity
Continuity
Predictability

235

Structure of the Bureaucratic Model

Division of labor (functional specialization)
Well-defined hierarchy of authority (centralization of
authority)
Systems of rules for employees and work procedures
Impersonal organizational relationships
Selection and promotion solely on competence
Career employment and well-defined promotion path to
top of organization
Organizational transactions extensively documented

236

Contributions and Limitations of the

Classical School
Contributions
Prescriptions for how to

manage organizations

Limitations
Limited view of employees as

resources without social needs

Search for one best way to

Pursuit of one best way

manage to lead to greater

organizational efficiency

(universal principles) to
manage

Spurred additional research

into management and

organizational systems

Control-oriented approach

creates an inflexible,
mechanistic organization

237

The Behavioral School of Management

The Hawthorne Studies

Worker productivity studies (19241933)
carried out at Western Electric.
Focused on the relationship of workers productivity

and changes in their work environment.

Strongly influenced by behavioral management theory.
Researchers concluded that social factors were

powerful determinants of worker productivity.

Results

were inconsistent with expectations:

Productivity improved under adverse conditions.

239

Behavioral School of Management

An organization was viewed as a social system
of people-to-people and people-to-work
networks in which employees have both social
needs and the desire to make meaningful
contributions toward the accomplishment of
organizational goals.

240

Behavioral School Contributors

Robert Owen (17711858)
Called for managers to treat employees with respect

and dignity, provide better working conditions, offfer

meals, and not use children for labor.

Hugo Munsterberg (18631916)

In his book psychology and industrial efficiency he

advocated that managers can use psychology to

enhance organizational efficiency.

Walter Dill Scott (18691955)

Advocated improving employee attitudes and

motivation as a means to increase worker productivity.

241

Behavioral School Contributors (contd)

Mary Parker Follett (18681933)
Asserted that managers influence and power should

flow from their knowledge and skill. Also, managers

should coordinate work activities through personal
contact rather than impersonal structured work
systems.

Chester Barnard (18861961)

Provided insight into the concept of formal (consciously

created) and informal (spontaneous) organizations

within firms.

242

The Behavioral Science Influence

Behavioral science movement
A movement that stressed the need to conduct a

systematic and controlled field and laboratory studies

of workers and their motivation, attitudes, and behavior.
Introduced the growth model of the employee.
The movement eventually
gave rise to organizational
behavior as a discipline.

243

Behavioral Science Contributors

Abraham Maslow (19081970)
Identified sets of basic human needs and suggested

that they could be arranged in a hierarchy based on

their importance to the individual. And suggested that
an organization must offer its members the opportunity
to satisfy their active needs.

Douglas McGregor (19061964)

Developed the Theory X (traditionalnegative

management approach) and Theory Y (positive

management approach) to workers and work
motivation.

244

Theory X and Theory Y

Theory X:
Describes workers as inherently dislike work, gullible

and dull, and essentially indifferent to organizational

needs and goals; prefer to be lead; and resist change

Theory Y:
Describes the worker as liking work, motivated to

achieve objectives to which they are committed;

capable of self-control; and neither passive nor
resistant to change in nature.

245

Organizational Humanism
A system that promoted an interest in
understanding the psychological forces tying
individuals to organizations.
A system that also promoted management
practices that lead to employee satisfaction
and well-being.

246

The Human Resources Model

Employee

Organizational

Involvement

Performance

Satisfaction

Commitment and a
Willingness to
Become More
Involved

The belief that through employee involvement in organizational decision

making performance would be enhanced, leading to employee
satisfaction, commitment and motivation for further involvement.
FIGURE 24
247

The Human Resources Model (contd)

High-involvement management and
organization (Edward E. Lawler, III)
A participative process (everyone at all levels) that uses

the entire capacity of workers, is designed to encourage

employee commitment to organizational success.
Depends upon management providing the necessary

information, skills, empowerment and reward systems

for organizational members.

248

Contributions and Limitations of the

Behavioral School
Contributions

Limitations

Raised awareness of the

Lacks a language for

need to design open,

flexible organizations
Introduced the growth
needs model of the
employee

communicating its ideas

to managers
Havent gotten top
managements attention
and respect
Persistence in the belief
that there is one best
way to manage
249

Dominant Features of the Behavioral

Model
Involvement-oriented management practices
Organic organization design
organization is a social system (human community)
involvement-oriented organization
flexible structure
dynamic tasks, loosely defined
consultative communications
authority flows from knowledge
and expertise vs. position
low levels of standardization
extensive use of groups/teams
open system
Table 23
250

Contemporary Schools of Management

Other Management Perspectives

Contingency perspective
The belief that the techniques appropriate for a manager

to use depend (are contingent) on the specific situation.

Contingency perspectives
Total quality management
Systems theory
Theory Z
McKinsey 7-S framework

252

Demands on Effective Management:

Contingency Perspectives
Develop Diagnostic
Skills for Situational
Awareness

Identify Appropriate
Style and Fit It
to Situation

Management
Challenges

Develop Capacity for

Flexible Behavior

FIGURE 25
253

Total Quality Management Perspective

Quality management perspective
An approach to management that has as its goal the

achievement of customer satisfaction by providing

high-quality goods and services.

Total quality management (TQM)

A management philosophy and way of managing with

the goal of getting everyone committed to quality,

continuous improvement, and the attainment of
customer satisfaction by meeting or exceeding
customer expectations.
TQM

pioneers: Deming, Juran, Ishikawa

254

Total Quality Management Perspective (contd)

TQM assumptions
Quality products are less costly to produce than poor

quality products.
People (employees) care about quality and improving
the quality of their work.
Organizations are systems of interdependent parts and
quality problems cut across functional lines.
Quality and continuous improvement are the
responsibility of top (senior) management.
Continuous learning and improvement are vital to the
long-term health and survival of an organization.

255

The Systems Perspective

Systems theory
A view of an organization as made up a number of

interrelated elements, each functioning to contribute to

the purpose of the whole organization which exists in
an interdependent relationship with the external
environment.

256

System theory prospectives

Organization:
Is part of and dependent on large system
Is an input-throughput-output system
Is a whole but consists of subsystems
Must understand its contexts, its subsystem and the

way these subsystems are interconnected.

Activities of one part affects the whole
Is embedded in a larger environment
A feedback system must exist
Let unattended the system naturally tend to run down

257

The McKinsey 7-S Framework

Structure
Strategy

Systems

Organization
Management

Skills

Style

Staff

Shared
goals

258

The McKinsey 7-S Framework contd)

Seven interdependent factors must be
managed harmoniously:
Strategy: course of action
Structure: organizations design
System: procedural reports and routinized processes
Staff: personnel groups
Style: how key managers behave and organizations

culture
Skills: distinctive capabilities
Superordinate goals: guiding concepts

259

Theory A (American)

Theory J (Japanese)

Short-Term Employment
Individual Decision Making
Individual Responsibility
Rapid Evaluation and Promotion
Explicit Control Mechanisms
Specialized Career Path
Segmented Concern for Employee
as a Person

Lifetime Employment
Collective Decision Making
Collective Responsibility
Slow Evaluation and Promotion
Implicit Control Mechanisms
Nonspecialized Career Path
Holistic Concern for Employee
as a Person

A Comparison
of American,
Japanese, and
Theory Z
Organizations
Source: Adapted from W. Ouchi. 1981. Theory Z.
Reading, MA: Addison-Wesley, 58.

Theory Z (Modified American)

Long-Term Employment
Collective Decision Making
Individual Responsibility
Slow Evaluation and Promotion
Implicit, Informal Control with
Explicit, Formalized Measures
Moderately Specialized Career Paths
Holistic Concern, Including Family

FIGURE 26
260

Contributions and Limitations of the

Contemporary Schools
Contributions
Unified the technical side

(classicists) and the social

elements of organizations
(behavioralists).
Showed that there is no one

best way to manage in all

circumstances.

Limitations
Contemporary approaches to

management are more complex

than the classical and
behavioral approaches.
No contemporary management

approach has been thoroughly

researched.

261

The Container Corp

http://opal.aus.edu/vodilv/?solution_id=9384

262

Reference:
Management and Organizational Behavior,
Pierce & Gardner, South-Western Thomas
learning, ISBN 0-324-04958-7
Lecture slides are partly modified from the
original version of South-Western by Thomas
Cook.

263